Transcript for:
Wealth Creation and Investment Philosophy

good morning everybody Welcome everybody who's on Zoom uh you guys and ladies are in for a treat today Ron's going to be doing a special version of his investment Philosophy for creating wealth uh so everything that you see today is going to be highlighted in his upcoming book for 2025 really excited about that another another Accolade uh to go you know for the office uh so we're really see what the final outcome is going to be um but you know the essential idea of his philosophy is he's taken 30 plus years of experience and knowledge um know from many different people and many different books who's gathered it all together into one compilation of investment philosophies and strategies to help create we um so one of the things that I like to talk about when I introduce him is the idea of investing sometimes is fearful for people because really not too educated about how it works and so in his 35 plus years of experience it's not telling people what to do but it's teaching them how to invest probably this that a lot of people associate with the so one of the things that I to use is if you were when you were a child maybe 3 four years old and you know the light switch in your room is a little too high to reach uh and your parents you know said hey it's time to go to bed or go to your room and you had to go into that room and it was dark and you couldn't reach the light switch you probably had some resistance right you probably had a little bit of fear about going into the room it was you know the boogeyman or you know just being afraid of the dark or whatever it would be you know something monsters in your closet monsters under your bed right that's what people think of as the investment the investment world they're afraid of it right because they have no idea what's out there uh so the moment your parents or you know somebody an adult turned the light switch on you could probably spend the rest of your life in that room if you had to right you could be in there and just you know hang out relax um that's what Rod is going to do with the with the investment World he's going to FP the light switch off he's going to teach you that it's not not something to be afraid of how to handle the ups and downs of the market uh how it works over long periods of time uh so in his experience over the last 30 plus years he's amassed his own wealth and has helped hundreds probably even thousands of people uh create Financial independence from this philosophy so without further Ado welcome our national director multi-millionaire R Leber all righty all righty thank you thank you how's everyone doing unbelievable s sounds pretty good I this is a little different for me right is normally we do it Thursday night in fact uh I I won't miss Thursday I'll be doing always the third Thursday of every month which will be the 21st of November but this will be a special broadcast uh coming in this morning and uh so I don't know is it different doing it in the first thing in the morning versus that night I don't know I we we'll see we'll we'll see we'll see how we do but um I I have a simple question I mean you you see what the philosophy says you know one here it says Ron's investment Philosophy for wealth how many want to be wealthy if you could I mean I always have to almost say if you could because most people just don't believe they can really create wealth in their life you know they they they whether it's they're they're thinking based on well I don't have the education for it I don't have the knowledge for I don't have this what what whatever it is but if but but if I preface by saying look how many would want to be wealthy if you could you know and it pretty much and everybody pretty much raises their hand because everybody really wants to be wealthy well Schwab does a great study uh you know every year and it says well what does it take to be wealthy and and uh he says Americans say right now you need a net worth of at least $25 million of f wealthy according to survey that he does every year which came out in March uh now obviously if you live in San Francisco where the cost of living is higher then maybe wealth is $4.5 million but when you look at it across the board Nationwide across the board to feel wealthy you need a net worth of 2% the question is then what percent of our population ever get the job done and the answer is two that's pretty sad so the question I'll also ask you now and keep this theme in mind all the way through the presentation how many would love to be a twcenter you want to be a twcenter you all want to be a 2ent I want to be wealthy and again you know what I'm going to be showing you today is how to achieve and now let's take a look at something you know when it comes to again achieving wealth uh knowledge whatever the case may be I think that's a big a a a big issue for a lot of people because I ask people this all the time how how many of you went to school you went to school yeah I can see you know all you did usually there's one or two that don't raise their hand I can usually pick them out you know right away but you went to school and in school uh how many of you uh you know had the subject algebra you had algebra in school yeah okay pretty much all of you and then the question I ask everybody is how many of you today use algebra to make a living and nobody just like all you guys in here nobody's raising your hand and that's typical nobody raise your hand I mean what what in the world are we doing why are we taking the most most worthless I don't want to say worthless subject but you know uh subject how many of you had the subject of money in school nobody how many but yet how many of you deal with Money Matters every single day of your life you know one there so you can understand number one the big disconnect you know on on actually you know what what's happening and so what you know there's a great article in fact I I I normally don't start with this but maybe may maybe I should uh you know here here on on U on educ on the education fees look at this so I'll just I'll just read this it says American household so when we look at what's happening because we don't have the knowledge it says right now America household debt hit a record 17.8 trillion in the second quarter of 2024 according to the Federal Reserve there were nearly 600 million credit card accounts in the US that same quarter and inflation has been eating away at an already type budget times are hard for a lot of people when it comes to money and it and it likely doesn't shock me uh many of our readers that most of America is financially illiterate but the degree to which many Americans are financially dumb can surprise you according to a research a few years ago from finra investor Education Foundation only 34% of the 27,000 adult respondents to a a nationwide survey could answer at least four of five basic Financial literally questions on topics such as mortgage interest inflation and risk that's down from 42% who could answer four out of five correct in 2009 in other words we're not only financially already financially dumb as a population but we're getting Dumber uh you know I mean is isn't it is is amazing so again I ask how many want to be wealthy only 2% to get your job done that means the other night what happens the other night that means the other 98% they're either broke working or dead I mean don't like the options on on any one of those other other than Crea was so today what you're about to hear I'm going to show you exactly how to get the job done in order in order to be one of those two percenters now when you look at it when we look at wealth you only have two resources available for you to create wealth with one of the resource is how you invest your time okay that's a big deal how you invest your time and then the other is how you invest your money the those are the two things so I'm going to I'm going to spend a little bit of time on on that first one but I'm going to recommend a couple of books along the way uh I suggest you write them down uh you know here the first one is called the cash flow quadrant written by Robert kosaki and uh these are some of the books that literally change my life you know uh in you know in a big in a big way so when I get into this let's talk let's talk about the cash flow quadrant for a second you know on here so when it comes to time remember how you invest your time ultimately be you know determines whether you have any money making money so let's let's take a look at that first because that's going to be the first part of this thing so you basically out of the four quadrants three out of the four deal with how you invest your time most of you 85% of you will invest your 40-year career you know life you know and you'll be what's called an employee what does it mean it means you have a job your income's based on your position uh not the person that you are the problem with that is you actually are working kind of a pyramid system you're paid based on you know the the level uh you know position that you occupy so in a pyramid system you have a president uh you know of a company or owner then you have a vice president level supervisor level and labor level at the bottom well what's the chance one of those laborers rise up and become the president or owner of the company I mean slim than none you know basically it happens so so that becomes an issue so that's going to be very very difficult to achieve wealth in a position of being becoming an employee you know second the second place then you could become self-employed self-employed simply means you own a job okay and then of course the third is becoming a business owner now here was the problem for me I actually thought there were only two quadrants you know I graduated with the health and fizet degree you know in 1977 eburg University uh I got a job to teaching coach uh you know here right in my own Hometown which I was very blessed and the interesting part about that is you know when I got the job offer uh the principal that was talking to me you know there at the time Mr Hershey uh was explaining about the job and whatever it's 12,000 bucks a year you know to teach School 1977 but here's the thing he asked me at the very end kind of our interview he said Ron do you have any any specific questions or any aspirations or what what is it that you're really looking to do and I said look Mr Hershey here's the goal my goal is I want to be wealthy but I'm not a very smart person you know so I said look could you give me the names of four or five teachers that went through this system that retired wealthy what do you think his answer was he said I I I I don't know any I don't know any of them that's really wealthy and I said okay you've been here 35 years of your of your life uh one of the highest paid people in the district are you going to retire financially or or wealthy and he said uh no and I said I can't spend five minutes here I mean just think about that I mean do you know anybody that does what you currently do for a living that retired wealthy and the answer most people tell me is no then I say what the hell are you still doing it for right if you want to be wealthy right so I realized I I I I got out of that and I and here's what I thought so I always thought that okay you either work for somebody that that owns a business or you own the business I I didn't know that there was actually a third quadrant uh that I had to go through and because I didn't know that I literally spent 10 years of my life wandering around like what what the guy that meor me Bob Safford used to call the Wango Wango bird okay people say what what is that and I said the Wango Wango bird is a bird that flies around in a circle at an ever increasing speed until it flies up its own rear end okay so that's basically what I was doing for 10 years flying up my you know because I didn't know I didn't know that I thought I was a business owner so so what I want to do is I want to just kind of share my story of this and by the way the fourth quadrant then will be dealing with your money fourth quadrant is in investor it's called the investor quadrant where you have money making money and that's the ultimate that's the ultim but again I'll say it again how you invest your time determines whether you have money making money so so I want to kind of explain my my uh uh you know the the quadrant process by just simply telling my story for some reason uh Dan's not it's not moving so so here so here it is so so let me let me let me get right into it so what I did was I thought again you know when you look at business when you look at going into business it's very simple all a business does is they find a need and fill it the greater the need you fill the more money you basically make filling it so you have you have a few ways of kind of entering it you know a business basically deals with a product a service or an idea all businesses deal with basically you know that kind of format so uh I I'll just show you a couple I mean these are only a couple I've been in many others but I just want to share a couple of you with now up front uh one of the first ones in the middle here it's called Weber Wentz Auto brokerage uh business and I thought this pretty cool uh cuz I said okay well what product does everybody need well everybody drives a car right now I do have a couple offices in Lancaster so I got to be careful because not everybody drives a car you know down in Lancaster uh you know but for the most part uh everybody basically drives an automobile so this is back in the late 70s and in the late 70s uh a leasing a thing called leasing concept of cars you know came into play be you know so because what happened is again cars were expensive a monthly payment but then you own it but a leasing concept would be able to allow you to lower you have a lower monthly payment now you never really own the car unless you buy it outright at the very end so I bought into a company called engage a car now tell me tell me this is not cool engage a car so it actually had a an engagement ring with a car going through the middle of it and and the concept was why marry your car just engage it kind of kind of cool little thing on leasing right that's kind of a little cool thing so I bought it I bought into this sold one car to my dad Chevy Blazer uh the second car I was selling to my my sister's boyfriend a guy named Kenny Hufford and the car didn't show up you know so the car didn't show up I'm calling I'm calling I had this big book I had figured out all the cost everything was really pretty cool so I I went down to Cherry Hill New Jersey where I actually did my training for engage a car and uh you know there and the company was gone the the company was gone so one one of the things one of the things I'll I'll I'll I'll I'll I'll say to you right up front is here's something you should take away from that uh never do business with a company whose main office is a hotel room just not just not just not a very very smart thing to do so anyway they're they're you know they're out of business and what end up happening is they took me along out of business with them you know so Pitfall I'm going to give you some pitfalls of again why do you why do you just s wander around in that self-employed and never get to be a real business owner where you have a residual income ongoing lifetime override the efforts of others which is key I I I'll show you the pitfall the up so number one Pitfall me for me was I got involved with the wrong company right I got involved with the wrong company the second business on here you see at the very bottom called vetronics uh vitronics uh this was a coin operated Amusement business and and uh uh some of you remember video games I mean I love playing video games I mean video games first came out basically in the early in the early 80s that was Pac-Man Miss Pac-Man Donkey Kong that you remember remember those games well I I used to put so much money in these games my wife said you know you should is own you you'd be better off owning the game versus putting all our money in into the damn thing so I said it's a good idea so I bought a thousand of them literally I bought a thousand of them uh I had a mortgage payment on the business of $57,000 a month I had the biggest arcade in Wildwood uh called the supercade in Murray Pier next to McDonald's uh you know here but but it was great while it was hot it was great but the problem was the video game was a fad it was a craze it only lasted about five years and and and that and that whole business was over so so now remember the first one I started with the wrong company now second Pitfall was with vetronics I had the wrong product the third one over here saram gas uh I I started a company called Life Safety Systems I franchised that out uh sold millions of dollars this this this product was literally incredible uh this product would actually put out a fire and leave no mess because it was a gas I mean it was unbelievable I mean you could have a kitchen fire put the fire out you could even eat the food not that you'd want to but you could you know on here and and and it was awesome you know here and and today this product is used in almost every computer room in in in the country the problem is I was in the business in the 80s and the computers didn't come out to the 90s so I was one decade ahead of my time right so it so it didn't last I never got into the '90s be able to do it so now I have what I have the wrong I have the wrong company I have the wrong product and now I'm in the I'm at the wrong time I'm in the wrong time right yall hear the the the fourth business that that'll talk about probably the the business we had the longest eight years and the longest and maybe maybe the reason it was the longest business we had because my wife ran my wife ran this piece of it of the operation uh you know here called the KOA Campground we brought the first ones at East Coast my parents did back in the back in the late 60s we piggybacked off the second one the franchise and you know the issue is we we did it here in the Northeast so in the Northeast one of the issues in the Northeast you have a very limited camping season right because you have basically Memorial Day to Labor Day you have some spring and fall but the problem is your bills go 12 months out of the year so so the the the issue becomes here kind of like the wrong location uh you know here in terms of but it w it was it was a successful business we took it we took a business that was doing about 400 camper nights uh you know that we turned it into in the the one that's doing almost 5,000 you know so we we did we did it for eight years we worked our butt off my my wife was a very hard worker uh you know in running and running the operation uh you know there and and but but again the franchise the franchise the reason we ended up with this the franchise build it right in our territory that we bought with with our Allentown KOA so that became a problem we ended up getting it at a Sheriff sale uh you know here we picked up that part of the business but we we literally ran it for eight years and turned it in into a into a successful but when my wife and I got married we we were just super hard workers we we didn't take a honeymoon we got married you know uh you know we got married and went to basically uh the local hotel for our wedding night and then we were back rocking and rolling on Monday and it business so after eight years my wife finally said you know you know you always wanted to go on a hunting trip and you know you should do it you should you you should do it we got everything up and running everything's running smoothly you should go so I ended up on this trip you know had a great time Colorado was it was awesome so I was in the woods uh you know pretty much the entire week and and then the very last day before I came home we were back kind of in a base camp where I had access to a phone so I talked to my wife you know that night how'd everything go she said everything was great you know and there and I would you know I said great I'll see you I'll see you tomorrow morning or you know when I when I get home so uh literally uh 2 o'clock in the morning I get a uh they they wake me up and said Ron your wife's on the phone there's some kind of emergency you know there and I'm like uh I'm like you know I just said please don't let anything happen to my kids I could probably deal with anything else other than that so I I get to the phone and they're all she's crying and I said what what's going on she said mom we had we had a fire we had a fire in the camp you know kind of burned out the back went up in the apartment uh one of the dogs died in the fire and and then and I said but but okay so so is is the rest of the building intact she said the rest of the building is intact you know and I said look no no problem we'll just we'll just put an RV next to the place we can you can be staying in there you know in there but we're we're not we're not out of business so we'll we'll be we'll be Rock and rolling the next uh she picks me up at the airport and she said Ron you'll never guess what happened I said well I me what the hell else could happen she said uh 6:00 in the morning the fire rekindled uh you know the campers actually called the the fire department uh you know here they didn't respond for two hours and by the time they did respond it burned to the ground so we literally lost everything there's a picture of you want to talk about Devastation uh we we we we literally we lost everything in the process so you know here and and I went back to the guy that we did a lease purchase from his name was Ken kko 42y old man this obviously worked him up as much as it worked us up you know there and uh this is this is the start of leading me into into the industry that I'm in today you know here because how many of you ever heard the saying when the student's ready the teacher appears you ever you ever ever hear that saying so and I also used to ever hear for every adversity there's a seed of Greater benefit and so when you're in it it never feels like that I I I I remember I remember one of our one of our employees had said to me Ron remember what you always said for every adversity there's a seed of Greater benefit and I said shut up I don't want to hear that crap you know obviously when you're going through it that's the way you think you know on there so I remember I was in I was in a in a trench um we were digging a new well because the fire burned up our well and everything and Ken KL you know was supposed to be there helping me uh how I found out how insurance companies really ripped you off uh we end up calling on the fire and you know there and they said do you have a policy and he said well I I have it here's what I'm paying and it was a proposal not a contract so the insurance company said they giveing us 350,000 to rebuild the building the insurance company basically said we're going to get only give you 75,000 you know on there so we we we were literally devastated so so we're in the process of trying to build it with that small amount of money and literally two weeks two weeks into it um I'm saying to the plumber while I'm in this trench I said uh man I haven't seen Ken in a while and uh you know he said and he said to me didn't you hear I said you'll never hear from him again thought that son of a gun filed bankruptcy he said no he died I'm like what he's 42 years old what do you mean he died and uh here he this this worked him up too and he ended up having an asthma condition went in the hospital uh over the weekend uh you know uh Saturday night develops pneumonia from being in hospital and passes away on Sunday so we we my wife and I lost everything we we were like totally totally devastated you know we end up getting land value and we're trying to figure out what do we do I mean what what what's our next step where where where do we go from here and uh one of my campers again I believe again when the student's ready to teacher appears like you heard me say earlier but one of my campers I guy named Jack brixius and his wife Alice they used to come to our Campground in this beautiful these beautiful uh big motor coaches you know there and he ended up calling me he end up calling me and said uh you know Ron what are you gonna do you know there and and and you know there and I said well Jack look I I'm I'm I'm actually thinking about buying a McDonald franchise and and uh he said what is wrong with you and I said ' why did you say that to me he said what he said 'l at least with KOA you own the property you know McDonald's you own anything you think that McDonald's is in the hamburger business so McDonald's is really in the real estate business you don't own anything in there other than any equipment inside why do you want to do it I said Jack because I'm a hard worker I've always made money in every business I've ever done never stayed in it very long you know but I've always made money and I've always made about a 12% return on my time remember a good business that can net out 15% is is a very successful business I've always done at least 12 here's what he said to me how would you like to make that kind of money without lifting a finger and I said come on if it was that easy everybody would do it and he said something that changed my life he said you know I'm wealthy right and I said yes you ever wonder how I did it yes I did wonder how you do it how again how many you heard when the student's ready the teacher appears and he starts to tell me about taking this money and not invest another business but put it in in an investment something called a mutual fund I didn't know anything about how money worked you know and there but but I I I trust the Jack he's explaining to me about the bid and the ass price and how they work this is back when we had the newspaper and remember the last section of the paper was all these investment funds and that's the first paper I used to throw away or start campfires with you know that I never looked at that paper before you know and there and he's educating me about each fun here's the bid here's house price here's how it works and I B the way so said Jack I literally trust you and I I did what he told me to do I made more money in eight months in the investment than I did running my business all year long that was totally and completely blown away by that fact I was I was just blown away uh you know there and and and so he's seen that and he said mean you know maybe if you're looking for the next venture or you know the next business maybe you should take a look at getting into the financial service industry and he said there's a guy that I know he accounts for 10% of a company's business his name is Bob Safford uh you know I can at least give you an introduction you know uh you know to him but uh but then you got to pick it up from there so I end up meeting Bob and so Bob is explaining this is where I first learned about the cash flow quadrant and Bob's explaining to me he said to me Ron here's your problem the reason that you always kind of live I don't want to say paycheck to paycheck we didn't get a paycheck but month to month is the way we were working in all our other businesses you know there even though I thought I was a business owner I really never became self-employed and this is what he explained to me he said Ron Ron the biggest issue is I I kept telling him Bob I'm a business owner he said no no no Ryan you're not a business owner that's the reason why you know you're not doing financially what you really should be doing because you're not a business owner you're just self-employed he said a business owner the difference a business owner creates residual income he said answer this question for me one question he said if you walked away from your so-called businesses for two years and didn't come back what would the condition of your business be two years later I said Bob I couldn't even make it two months let alone years he said that's my point you own a job and then he starts talking to me about what the process here now here's the thing I remember I told you I'm going to mention uh three books here's the second book it's called get wealthy building your perfect business written by Dennis coier who's written 25 other books probably he's most famous for the ABCs of making money but uh uh someone had told me then about this book and and I thought my God had I had this book this the little book that cost $10 as an example had I had this book this could have saved me 10 years of my life had I had this book in my hand isn't it isn't it exactly what I was looking for get wealthy building your what perfect business so so you can see here uh Dennis shows on on page 28 he shows there's 21 qualities that make up the perfect business remember what was my pitfalls I had the wrong company I had the wrong product I had the wrong time I had the wrong location those are all the pitfalls that stop me from ever moving you know to the business side of a business owner cash flow quadrant but here he has 21 qualities that make up the perfect business I'm not I don't have time to get into it we'll make sure that that this book is available for you anybody that really wants to know but but I'm going to read something on the next page on page 29 look look look what he writes so he said over the past 30 years I have examined well over a thousand business opportunities uh you know almost all score very low on my original 15o scale even worse of my revised 21 he revised the scale for covid well first of all let me ask you this how many of you have 30 years to start evaluating what business you should get into you have 30 years and even if you did do you even know what you're even looking for like I didn't know what I obviously I didn't know what I was looking for but here's a guy says I he already spent 30 years remember if you could find somebody who's already done it and they know where the landmines are you can get from where you are to wealth a hell of a lot quicker but here's what he says the fact for s the fact remains that there is only one business well that was that was that was that was there's only one business that I have found with the vision and viability for the year 2021 and well beyond the 21st century which scores a perfect 21 out of 21 as a researcher I have tried for years to find the flaws or limitations in the Primerica business opportunity but in all honesty I've yet to find any Primerica also scores points when it comes to setting up the perfect business with very low low startup cost low overhead cost and a high stable long-term growth potential it's not uncommon for part-timers to earn an extra ,000 or more a month if the opportunity does not work out for someone I found it's usually because that person did not invest enough time and effort into the business with a market penetration of currently less than 3% and the growing need for their products and services the growth potential for 2021 and Beyond is massive it's fascinating to note that during the covid-19 pandemic when so many businesses suffer greatly Primerica was able to very quickly adapt pivot and set new growth records boy had I had a book like this it would have been totally life Chang here I am now I'm with Bob Safford uh in the primar this opportunity but Bob Bob's telling me how this works you know how the process worked and through his mentorship uh when he died he had he you know he had you know he had a netw wored over 300 million you know and was already making $400,000 a month you know there and and I got to be mentored by this by this man uh for 25 years and literally changed my life you know there now his son Tom is taking over to business just done a great job continuing the Legacy but I started when I was 31 years old and by 38 I became a millionaire and now today uh I actually became the number 136 million doll a year earner on you know on top of that and then create created wealth you know uh many times over uh I thank God I don't say that to brag I say that if someone like me can do it you sure as hell can do it too I live on a 22 acre horse farm uh you know here you see our our barn my house is next to it uh you would with my wife of 48 years uh you know here Bonnie and my two kids Blake who's 40 and my daughter Britney who's 36 years old and it's you know and it's a funny thing not that it's funny but it's a funny thing about creating wealth here's the thing you know I I deal with a lot of a lot of lot of families and you know especially younger families that we that we bring into business and we kind of Mentor them and you know a lot of times people will say things like you know Ron I I I I I just really don't have the time in fact that's one of the excuses that I made initially look when I was running all my other businesses I was literally working 80 90 100 hours a week you know on here because that's what you do when you're self-employed because it's just you it's up to you to get the job done I'm working 80 900 hours a week so when this opportunity came along and Jack bricks just told me about Bob saffron in Prim America the first thing I said is look I don't I don't have time how how many have you ever said that I don't I don't have time and here's the one thing that Safford corrected me right from the very beginning he said to me Ron you got to understand one thing there is no such thing as a Time problem you don't have a time problem time is not a problem your real problem is money you have a money problem because if you have unlimited income you pay people to do the things that tie your time up so if you've ever said I have have a Time problem that's not your problem you have a money problem and that's what you really need help to get you know with right away so but it's funny because so I'll deal with these younger people and say Well Ron you know my kids are little once and you know they're only little once and then they'll be 18 years old and they'll be out of the house well let me tell you something if you create wealth or when you create wealth using what we're talking about today your kids don't freaking leave not only don't they leave but they bring a whole ton of other people back with them so my our family there's my son and his you know and and his wife uh you know two kids a f and Olive uh you know here and and the amazing part is they live right in our barn they're they're in they in our barn apartment you know you know on here and then of course my daughter with with uh with their with their two kids uh uh my buddy Solen you know here who's now five years old they've been living with us since he's born uh of course the bottom is Cool Hand Luke uh you know there on the bottom and they live in our house you know with us so like I said they don't they don't leave and when they don't leave they bring a whole bunch of other people back with them and and and and I'll tell you what we have a blast yes someday don't get me wrong it's chaotic as hell you you know there uh you know I never thought at my age I'd be dealing with a five-year old or one and a half years old but but but but you they always talk about how it keeps you young you know you know in this process but but we just we just we just we just have we just have a blast so I'm so thankful I am so grateful you know of what we have but but so people say to me all the time well what is it that you learned okay so you came into primary you knew nothing about nothing you didn't know anything about money you know on there so what is it that you learned if you if you could pinpoint a couple things so the rest of what I want to talk about today will be so so what I did is I just gave you the three things I just talk about okay how do you invest your time I want you to be a twcenter so how you invest your time now is super important I gave you a good example of how to transition through the quadrants and now the rest of the time I want to talk about the money because this is the part that we're really financially ignorant yes you see the article said we're dumb you know on there but I I like to say Financial ignorant to be you know be politically correct but uh so we we we started here I I now have my own company it's called Blue Mountain Financial uh Primerica is the you know our our our Master Company I'm so grateful for you know what I've learned through this process but uh Blue Mountain Financial Group I'm not going to I'm not I'm not going to read the read this now I'm going to read it at the very end so you understand when you hear what My Philosophy is you'll see all the education piece I gave you along the way and then you'll understand why this statements that you see up here will make total total sense so you say what is it that you learned and and and and here's what here here's the first one and and I I I must have showed this rule literally a million times this is the rule that literally changed my life financially on how on how money works because I I I did not know I didn't understand the the process of money but here it is it's a very simple rule the rule is it's called the rule of 72 and the rule is very simple it says whatever interest rate your money earns if you divide that into number 72 that's a mathematical fact that tell you how long it takes your money to double watch how simple it is so right now if you have $10,000 uh you know and you make a 3% return typically what a bank will pay you know like in on in a CD so three divides into 72 24 times so if you have if you have 10 grand you give it to the bank you know in 24 years it's 20 grand in 48 years is 40 Grand now here's the thing if I say to you well what would happen if you double your interest rate what would happen to that money and logically you would all say well if you double the interest rate your money's got to double that's what I always thought too but this is the power of comp compound interest so watch six divides into 72 how many times 12 now the money's doubling every 12 years so in 48 years it's not 80 grand but 160 Grand tell me that's not powerful now look what happens at a 12% return how many of you believe you can make a 12% rate of return on money and of course most of the people will never raise their hand because they're not they're not earning it they're making the 3% because $18 trillion dollars are sitting in bank accounts M you know making basically nothing but at a 12% well let me ask you this how many of you at least believe and insurance companies make 12% of your money if you don't believe you can how how many of you believe they can everybody raise their hand on that one well look what happens here here's your 10 grand at 12% money's doubling every six years look in 48 years it's over2 A5 million so here's what you do see we're not investors we're basically looners we loan our money to the banks the banks and insurance company they invest it it's funny because Dan I love the story Dan always talks about you know when you go to the bank and you make a deposit you know whether you're in the drive up window or you're at the teller spot you know they always have it they always have these lollipops right they give you lollipops out and I Dan always use the example what are those lollipops actually called Dum Dum Dums suckers uh you know whatever I mean man they they they got it right right they got it right on track because here you are it was your money you gave it to them you allowed them to use your asset make $2 and5 million and pay you 40 Grand they made a profit of two two and a half milon bucks on your 10 grand remember if you put another 10 grand away next year like you should be doing in your IRAs you know on there in your 49th year you gave away another $2 and A5 million how many times can you give away $2 and A5 million and not be broke not many you know so this this was this was a rule that literally changed my life but when you start saying where do you make 12% return look over the past 50 years the market average rate of return has been 12.52% right so we're going to talk a little a little bit about you know the market and how that market operates so I'm showing you exactly where to get that kind of rate of returns you know on money now here's the thing this is probably the one of the in addition to rule of 72 I said well where do you get these returns where do you get that what you just heard me talk about where do where do you get that I didn't know anything about the market or what that meant or anything but but this is the next slide they showed me that really locked in you know where I could get those kind of rat returns so remember you basically have you know three liquid Investments I what I'll call more liquid you can you you have cash which would be like money you put in the bank and and of course the highest interest rate that a bank ultimately pays is a CD remember if you have money if you have money in the money market it pays less than a CD if you have money in the savings pays less than less than the money market if you have money in in in a checking it pays less than all but but I'm going to give him the the benefit of the doubt the average rate of return now I'm going all the way back to 1926 so I'm talking about like 97 years here right so you're seeing 97 years of you know of what happen so right now if you look at the rate of return the bank pays about 3.3% in in a c High highest rate they pay now remember if you made 3.3% interest on your money do you get to keep all the money and the answer is no you don't because two things affect your overall rate of return one tax because look if you if you have a gain the government's going to want want to take money in taxes and the second is inflation of course we've been hearing nothing but inflation for the last how many years now because of what inflation has has done you know done but anyway after taxes and you have minus .9% here's what I tell people there has never been a time in history that a CD has ever made money so one of the questions I ask people is why are you putting money in the bank and you know the first answer that I get from most people is they say well I put it in the bank because I don't want to lose it I mean it it's a guarantee it's guaranteed and I said that's correct it is guaranteed it but guaranteed to do what and they say well guaranteed to not to lose money I said you're right there it's a guarantee but it is the only place that you can invest money that you're guaranteed to lose money every single time right now I show you it's minus .9 but let me give it to you in real dollars because that's where it really hits home if you invested 10,000 bucks and you gave it to the bank in 1927 97 years later you know end of 2003 what is your account worth after taxes inflation answer 4,160 bucks does that does that excite you 97 years your 10 grand is worth 4160 okay so I said so I keep saying why would anybody put any money in that account secondly it take a look at bonds so here's bonds after taxes and inflation they yield 1.3 so in other words your $10,000 is $35,000 four after 97 years and then here's Equity stock you know on here after taxes and inflation you know five your $10,000 is now worth, 366,000 now here's me remember I I I I graduated with a health and fit degree football was my thing got hit in the head a lot of times maybe maybe that's the problem for me but I I said when I looked at this and I heard you I used to hear people talk about when it comes to money that you should diversify don't put all your eggs in one basket how many how many ever heard that you should diversify don't put all your eggs in one basket here's what they used to tell me they used to say to me well you want to put so much in stock so much in bonds and so much in cash now when I learned this and I learned the rer 72 when they showed me this slide I said that's the dumbest thing I ever heard in my life like when you you hear these people talking about a 6040 portfolio so here's what happens when you look at stocks and bonds as an example when stocks go up bonds go down typically and when stocks go down bonds go up so now if you have a 6040 mix that means the 40% in bonds is canceling out your 40% INE equities you only got 20% of your money even making money how in the hell does that even make any kind of sense it doesn't make it doesn't make any sense to me and they say well you should do you know let's say you should put so much in stock you know 60 40 and then maybe even a % you know on the cash side and then so so so here's your money and they say well let's make sure we put money in an account that we know is going to lose money let let's make sure we have some in here and then let's make sure we have some it made no sense I said why wouldn't you put all of your money on the equity side especially since the goal is I want to be able to retire why would you put in the money in the account that's going to make the highest rate of return now when I talk about diversification I'm going to talk about there's nine baskets of equities you don't put all your eggs in one basket but you want to make sure that they're all 100% in the equity basket I'm going to talk about that through the you know through the rest of my presentation but that's the thing where I picked up that on you know right right from the very beginning that just didn't make a lot of sense to me but I know a lot of people are afraid of the market or equities or stock whatever you whatever you want to call it now when you look at the real rate returns right now the real yield on bonds right now and you can see I I do this i r I run my numbers you know every day of course I always do my philosophy on the third Thursday of the of of the month and I updated that day I spent eight hours updating it to give that presentation at night but when I just did it the last time on the 16th you can see right now here's a real yield on bonds right now after inflation the real yield you're making on bonds is0 76 of a percent well plug that in a rule of 72 and see how long it takes your money to double let's say let let's get let's make it real simple if you got a 1% let's say it was a 1% yield how long do it take your money to double answer2 72 years one divides in 72 years so at one this is point 76 we didn't even get to 1% on that yet so you understand do you have that kind of time or do you have that kind of money to be able to able to accept a that low rate of return you know on funds well look when you when you take a look at retirement here's the issue here's the issue this is why we're not this is why we're not doing well you know on there as as a matter of fact I I want to I want to I want to share something with you too it's called uh what do uh working Americans fear more than death I mean is there anything that you fear more than dying uh there's not a lot I fear more than dying I I mean I don't want to die but you know you you you think about it right but they says what so people fear something more than dying and the answer is retirement the answer is retirement listen to this many Americans are not only financially unprepared to retire some fear retirement more than death a recent survey shows about 61% of working Americans are more afraid of retiring than dying 64% fear retiring more than they do getting divorced according to a national survey for uh for Live Career in in in June I mean is is that mind boing and why why should they why should they fear well first of all here's the here's the issue the the the issue is we're living too long right now right we're living too long I mean you're seeing a lot of systems blow up I'm going to talk about social security in a minute but here's another great article it say live to 100 plan on it ARP just came out with this it says Genie clamp and a typical woman over her time born in arish France in 1875 she lives a rather unremarkable Life by most of the Cs except for one thing when she died in 1997 at the age of 122 she was on record as the oldest person I've ever lived I just kept getting old and I couldn't help but she once said so what does this extraordinary life or this ordinary woman have to do with us today well more than you might think in her day living no 100 was extremely rare but today in the United States people 100 and over represent the second fastest growing age group in the country I had to read that like three times I said what people 100 people areund over a hundred represent the second fastest growing age group in the country the fastest are people over 85 many 65 year olds today will live well into their 90s think of it another way a 10-year-old child maybe your grandkid has a 50% chance of living to 104 and some demographics have even speculated that the first person ever lived to 150 is alive today so are we having problems are we having issues well why why do we fear retirement well Fidelity and Vanguard just came out with two incredible studies uh Vanguard talked about well what do you need at retirement like how much money do you really need to retire right and the answer and the answer is Fidelity says if you retire at age 67 you're going to need 10 times your current income to last in retirement with these life expectancies so let's say you and your spouse you each make 50 Grand you know that means you're making a 100,000 bucks if you need 10 times that in retirement how much money do you need in retirement answer 1 million $1 million okay well then well then Vanguard just did a study on how America shes report what does the average 55 to 64 year old have in their retirement account currently remember these people are one step away from retiring 55 to 64 year old remember they need how much 1 million what do they have answer $84,700 disconnect you see now you see now why more people fear retirement than death because we're going into retirement we are totally unprepared we are totally unprepared so now we need to make sure that we're maximizing the highest rates of return that we can possibly make on money if we even want to have a chance at being able to and because most people don't have the education side of how this works you know here that's why they fear that's why they have tremendous fear and and are worried so there's the bond side why would you use that and then you say well tell me a little bit more about equities are are they new is that something new or how does it work well you know do you understand that when you look at the global market right now you can see there's 109 trillion that was the end of last year of course has gone up a little bit more this year but there's 109 trillion United States which is the market I like to deal with account for 42.5% you know of that money which is about 46 trillion right here in you know in in our in our own country you know on here and then and then again when you when you when you look at that uh uh here I I like I like to about this you say well if I go jump back here if you say look when when did this all start like when okay so there 19 when did it start answer this all started in 1792 remember our country was founded in 1776 16 years after our country was founded 24 stock brokers who met under a Buttonwood tree at 68 Wall Street New York New York under a Buttonwood tree and they started the start they started the market at that point trading now it got so big so fast that they that they formed what was called the Buttonwood agreement so that they could meet inside so we could meet in the building now instead of outside under a treat but it start started in 1792 right today today that location is now where the New York shock exchange the biggest Exchange in the world NASDAQ is there too you know but again you can see why we account for $46 trillion biggest in the globe is happening right here in our country it's interesting because I was just at bny uh you know for due diligence uh this past week and here's a company founded by Alexander Hamilton in 1784 uh they were the very first uh uh stock on the exchange uh on the when you look at the S&P they're the 240 year old company their headquarters if you see it right almost next to the World Trade Center I'm up there this this this thing blew my mind 22 story building and it's amazing when I think about what we all get for a cost of you know whether you have an advisor fee you know the backend office the the program fee and we're paying like one one and a half% and we're getting access to to to these places it is mindblowing uh you know what we're looking at but but when you look at it is you say well how's it doing and I want to I want to just teach you just a little bit not that you need to have some kind of big education but one of the things that really screw up people is their emotions when it comes to money and emotions since you have no logic remember we already established the fact you have no education and then since you have no education everything you do mean it operates on emotion and when you operate on emotion with money you're going to get your buck kicked every time so let let me let's talk about what's going on right now so here's the thing anytime we have a strong quarter first quarter meaning anytime the market is over 10% you can see right now now how did the market do so far in this year when we're just looking at well we averaged 10.2 in the first quarter so we already knew we were going to have a great year remember we're coming off a really really good year last year of a 26% I'll show you that in a minute but you can see anytime we come up with at least a 10% return the first quarter what do we average the market average is 14.1 uh first quarter return you can see the full year the market averag is for the year 21.4 so we knew we were going to have a really good year based again here's the thing about Mark nobody can CL the market perfectly but there but everything operates and runs in Cycles so you'll see that but right now 21.4 where are we so far this year through Friday the Market's up we're at 21 23.1 23.1 we already knew it should average 21.4 at 23.1 you know with another couple months you know noes small but here's when you look at the returns here they are so you see last and here's what you have to understand about the market the market kind of takes like seven steps forward one step back seven steps forward one step back seven steps forward one step step back that's just the way it operates and see what I find if you know how things kind of operate when you take the one step back you're not you're not surprised because you know that's normal that's what's supposed to happen right but this is when most people panic right so anyway last year 2629 now the year before right in 2022 we're down 18.11 but then look at that the year before that you know in 2021 28.7 one then we had 2020 18 184 and uh 2019 31.4914 th000 that's $350,900 you're you're up 13.37% return you know just in just in the last 10 years you know alone so tell me this is not amazing when you get it now here's the other thing but but but what are you reading now oh the Market's overpriced right now the Market's overprice you know we have a PE ratio running around 232 before when typically a PE ratio when you look at the last 30 years average is about 17 and now it's like 22 23 and they say the Market's overpriced and I I always say relative to what what does that even mean to you nothing what but look surprisingly it says what putting money to work at all-time highs has historically outperformed deploying Capital when a benchmark is below or on average so that means what this is a great time now are we going to have a lot of volatility because of a bunch of things happening sure we are are let's talk about that but the one picture that I want you to burn in your brain is this one right here because first of all people say uh you named your business Blue Mountain Financial now I it's funny because I didn't even name it Tracy Gman who Primerica brought on to run our manag account division or actually bring manag account she did a fabulous job this lady was great after watching My Philosophy uh she said Ron I know exactly what you should name your business Blue Mountain Financial because this is the slide I always show people and and for the fact I live on the Blue Mountain you know you know you know at the same time so so when you look at this thing this is the thing that scares people you see these red drops in the market these are what scares people now now by the way if you look at I just want to show you you see this red one over here 2122 that that that's red so normally once in a generational cycle do we have a major drop in the market but I want I want you to look at this one because this one you're be going to be more familiar with that was a Great Recession the Great Recession you'll see during that time period the Market's down 56% but look at this uh here but the Great Recession There's a Great Recession but look at how it compares to the growth the Blue Mountains the giant mountains look at the returns and and by the way here's Co there's Co can you even see the little blip in red in Co you can't even see the damn thing barely look at the mountain of it you know uh you know since then so to me a picture is worth a thousand words but what happens is people give up these Big Blue Mountains of return because they worry about these little downside Cycles you know on here but they don't last very long I'm I'm going to show you as I go through it how long do they really last and and you'll see you know here it they don't last very long the average lasts about 13 months and it's already over but the fear that they put into you is is is just what kills me so right now what's on your mind what what what are the three themes really on people's mind right now well number one what could the start of the Fed rate uh rate cutting cycle mean for investors so you know uh in September the the Fed rate dropped the rate another 50 points what does that mean going forward you know on here so I'll explain a little bit about that secondly how have the markets performed in months surrounding presidential elections oh my God I mean the amount of people that drive me nuts to say I don't think I want to put any money away uh you know here until after the election like here's what you're going to find it doesn't matter what clown is in office and I'll tell you what I can't stand I I just can't stand anything in terms of the politics no matter what idiot clown whatever you want to call him is in office it doesn't affect the market in fact it's the exact opposite the market dictates who the president is not the president dictates what the market does I'll show you that in the slide I'm going to prove everything you know what I'm talking about so how does it perform now I'm not saying we don't have volatility around some of those things but that but again understand these are normal and then number three why should investors think of Market volatility as an opportunity because that's all you hear about is volatility right well let me let me explain so look what could the start of a Federate site mean for investors well you can see I I go back and you can see all the rate uh the when the when the rate Cuts occurred you know all the way back to 1974 you can see the average rate return you know one month following a race cycle has been an average of 7.2% return on money o over over three years 41.3 over five years the the marget average 77.3 now here's the thing if there's no recession which is exactly what I believe now no recession no recession you see our third quarter GDP came in at 2.8 we have a strong G uh GDP throughout the year we are not we are not headed toward any kind of recession in fact we're in an expansion phase you know in our economy but without a recession look at their average rate of return the market in one year from that 19.6 where are we now 23.1 are we right on and then look what happen look at over three years 70.5 over over five years 101 meaning you doubled your money you doubled your money you know over over a fiveyear period tell tell me tell me that Sound exciting tell me that's not going to help the people you know here that have small balances in retirement of of 84,000 714 bucks they need to get they need to get every rate of return they can secondly here's a presidential election historical return now you can see right now here's what's very interesting you can see once the election is done how does the market respond over the next eight months answer the average rate of return in the market no matter who's in office doesn't make any difference the market average is 16.2% return over the next8 months should you be getting your money in now when election Tuesday should you be getting your money in now you should be getting your money in now why because in the next eight months I can make 16.2% average based on the Cycles that's going back you know for decades is this important right and then number three volatility volatility it says volatility may represent opportunities for investors now what are you looking at right here first of all it says this chart shows the average one-year performance of the S&P from various vix now vix is a is a you know CBOE index is is called the fear index the fear index based on based on a bunch of options priced to the S&P it determines fear right so uh so I I'll I'll I I'll read something to you and and I'll show you how again the fear of what the media does how everything gets screwed up but but I want you to see this it shows here with the various fix levels since 1990 historical example events that occur when evct certain thresholds so it says this volatility is a feature of investing not a defect it's a feature of however many investors instinctly view it as something to fear and avoid most people when you see the vix go up they panic and they get out right which can lead to poor behavior and subpar long-term results that's why you'll see the average investor has made no money over the last 20 years after taxes inflation I'm going to show you everything I'm talking about I'm not just going to say it I'm gonna I'm going to prove it to you but it says using a daily closing price of the vix as an investor made at any level has a solid return onee return at 9.7 that's what you see so what the vix level is average rate of return from that is 9 9.7 now the vix typically has a number around 20 that's what the vix is 20 that's kind of average right now so you can see this however an investment made on days where the vix was elevated the market what perform meaningfully better right investors could benefit from thinking the vix is an opportunity index because while it's always a good time to invest history has shown that some of the best opportunities that come during periods associated with elevated volatility let me give you a good example of that August the 5th just a couple months ago let me let me let me let me read what happened August the 5th it says fear is back this this is exactly what was published on a fear is back when the US market opened this morning Panic could be seen all over the CBOE volatility index was some consider the Market's fear gauge a measure of option activity on the S&P index spite from below 20 for most of last week to above 60 well let's take a look at that well when it goes above 60 how has the market performed over the next 12 months 31.7 how does it average at all levels 9.7 so are we happy at the vix goes up as an investor hell yes that's what that's a great opportunity but you know how many it got so bad that day that that some of these brokerage firms had to shut down because so many people were trying to get out of the market but let me let let me let me just read piece uh it it said it it it spiked below 20 for most of last week and to 60 it's the highest level this is what the media is writing that's why you can't pay attention to what the media writes but it says it's the highest level outside of covid-19 panic in March of 20120 and the onset of the great financial uh uh crisis in 2008 right and and and it says the major indexes were down by 3% or more across the board treasury yields were down meaning bond prices were up Bitcoin briefly traded below 50 Grand even gold was down 2% by closing the picture was more or less look the same the vix measure was around 38 office office morning Peak but still the highest level in years NASDAQ index and the S&P were down 2.9 uh the small cap Russell index was down 3.2 and theal Jones was down 2.6 this was the first everything is down day since the early days of the bare Market of 2022 or the pandemic if you really want volatility as a market it said anodically the trading performance or platform of some of the major Brokers like Charles Schwab Fidelity Vanguard appeared to be down for Pierce this morning due to the surge in activity and then remember that day Japan also announced that they were going to have a rate hike and they remember Japan's been a negative rate environment for decades now they announced a 25o rate heke and their Market went down that day 12.4% in one day that was a bigger drop in the market than Black Monday in 1987 some me remember Black Monday now you know what that this is all this was all media driven because you know what end up happening four days later Friday they came out and said oh we're sorry the vix didn't hit 65 on Monday it actually you know and it says the apparent Spike that they that they recorded was due entirely to the mispricing of a single option which through the vix calculation wildly out of out of whack what they believ the vix did contractor price according to Bloomberg the the it peaked at 32 still a serious Spike but not one of the three highest on records I would like to point out that the Vicks dropped quickly since Monday back down to 20.4 so you understand what the media does what the media does how it creates fear and how people react to fear now if we looked at this and we would have seen holy crap the vixs went up to 60 we would have said that's awwesome we would have been a pump we would have said what we want to put more money in what the average person do they took it out and and so you know this is typically why most people never make money they're in they're out they're in you can't time it you got to understand it's not timing the market it's time in the market that's the key and then we when we take a look at what's going on right now you've been all reading about social security course this is all added fear to retiring you know on here the the government's already already telling you right now my generation the baby boomer generation we're reaching 65 how many of us are reaching 65 of course you look at 65 as the that's the retirement level but at 65 you know that people think well I'm going to retire well there's 11,200 this year 2024 is the most amount of people reaching 65 in any in in any period in history we have 11,200 people a day turning 65 meaning we're worried about depending on the Social Security System well look this what the government just put out you know they don't hide anything he said by 2035 uh the Surplus is gone we we we we we have no more money in Surplus what does that mean does it mean it's going out of business doesn't mean it's going out of business it just simply means that we cannot continue to pay the benefits of you know of this thing we're going to be able to pay about 75 cents on a dollar and if and if nobody corrects the system and of course every one of these politicians you know have been just kicking the can down for decades I mean it already started with Carter already knew we had issues you know back already in the 70s every one of these Jokers have just kicked the can kicked the can kicked the can well we're getting to the point where we're getting point to passive point of no return so 75% of benefit each year it'll go down less and you know it's sad the number of people that depend on Social Security but think about this system again why is it going broke I already told you we're living too long people say oh the government borrowed money the government did this government did that the look that is not the reason why the system is going broke the system is going broke simply because we're living too long you know on here when in 1935 when the system got created Social Security you know why did it work well we said look we're going to take a little bit out of your paycheck every month and then at 65 we're going to start paying you out the social security benefit why did it work well the average life expectancy was 63 right so you know most people that paid in never collected a dime why because they were dead see that'll work that system will work but we already establish the fact you're living to 100 so that's a problem right so that's a problem so here's the thing you got to really start understanding that if you want to make it if you want to be wealthy then it's going to be up to you it's not going to be up to the government it's not going to be up to your company you know it's going to be 100% up to you to get the job done so you better get an education on how the process works right you know there now but here's the thing but again I I that what I'm trying to do is give you a little bit more of an education so not that you're some kind of expert but you don't do foolish things and Panic by getting out look look so look look at I I'll give you I'll give you some panic attacks you know to the S&P remember remember Y2K there's Y2K all the way up all the way at the very top remember Y2K we thought the world was going to come to an end 1999 it's going to go to 2000 the computers can't they can't work they can't they can't go from that to a 2000 I mean I they said planes are going to fall out of the sky elevators aren't going to work I'll never forget I had one of my clients she's a reflexologist in easn Pennsylvania she said Ron you got to come down to my house I really need to talk to you I go down to her house she's all afraid about Y2K everything's going to go away I'm going to lose everything and and literally she takes me in B remember we were we were stockpiling water and all this other crap she takes me down to her basement she has a she has a little ranch home little ranch house I go down in the basement I thought I was at Costco I mean I thought I was Costco there was freaking Palace of freaking water and she's a single per one single woman pallets of water pallets of beans you know canned good I mean it's like holy crap and now now we all laugh about it now but was was that a serious situation back then were we really emotionally worried right but look look since why 2K the market the market draw down was 12.1% but since today we're up almost 250% since then and take any one of these attacks any one of these I don't care what it is you see what's happened now at once you look at five year 10 year 15 you know years out here's the thing here's the latest one I this is the one I really want to kind of burn in your brain because I give you a little history from afterward again to prove my point most of you remember this right so remember what happened covid 2020 remember 2020 so 2020 you know here February February 19th Markus at the all-time high February 19th I mean we're rocking we're freaking Rock and rolling remember we we've been now in a in a in a in a in a bull run since March 9th of 2009 here we are 2020 11 years one of the longest we ever had 11 years and we're we're we're we're rocking February 19th and all of a sudden Co now we didn't know what the hell was going on remember and our Market went down 34% in 34 days that was that was twice as fast as the Great Depression of the 30s right twice as fast and and here's what people were saying oh my God I just spent 20 30 years of my life saving money and I lost a third of my money in third in a month a third of my money in a month and people panic and then and then of course this is March th this year is is uh uh March 23d of 2020 and then the Wall Street article comes out with this now now did the Wall Street Journal know that that was the that that that was the the down Market that's when it hit the bottom it bottom down now nobody knows there's no Bell that Rings oh by the way we're at the bottom no bell rings but this is Wall Street Journal front page it says the worst is yet to come now think about how you feel you said holy crap I just lost a third of my money now by the way I want you understand when you talk about loss it's funny because when I had clients call up and luckily our clients I've been doing such a good job of trying to educate people and they've been really responding very well listening I didn't get a lot of client calls but the client calls I did when they were in the panic and said Ron I'm I'm I'm I'm I'm really down and I said well let me ask you a question uh but before this before this drop from February 19th uh how many shares did you have and they'll say I had 2,000 shares okay well like how many shares do you have now and they say well I have 2,000 shares well tell me what did you lose you didn't lose anything now the value of those shares but they change every day they change every day you didn't lose nothing you know on here but they don't look at it they don't look at it from you know from that point but anyway they say so you just you're just a down a third according to your mindset and then and then Wall Street says the worst is yet to come so we didn't even hit the worst yet you understand how people panick look what happened look look what happened in the very next month April this this this was March 23rd in April this is what we do 866 billion float out of the market in the bank accounts in the bank accounts right and then and then and then the the month following in May another 604 billion more went in the very next month do you understand that was a record year of the a record year already happened in one month now now when you go back and look at that the market did what the market in the month of April did 12.82% gave it to the bank the bank went right back in the market I have slides on that to show that all the way through 2015 the amount of money they make but let's just talk about let's say they did it again in the month of April 866 billion flowed out and they put it right back in they made 12.8 to11 billion dollar in one month on just one deposit on the one month where to deposit remember they already had $18 trillion doll sitting in bank accounts even before that even happened so what really irritates me is what's happening the rich are getting richer the Richer getting richer again at our own fault at our own stupidity or our own whatever whatever you want to call it it's so frustrating so what I did was I said just for the hell of it I'm GNA see how long it takes the bank to make a trillion doll profit on just those two months of deposits not the 18 children that's already in just the two month and I track it every month if you watch my show every month I tracked every month so we already said in April 12.82% was the return made on the money that month very next month May 4.76 there there they are I tracked it every month and I said how long will it take the bank to make a trillion dollar answer 17 months 17 months they went over a trillion dollar now I show here what if you have the 100 Grand in your account and you just left it alone you just left it alone in that 17 months what did your $100,000 earn you in the market answer $79,000 33 you would have made on your 100 Grand $79,200 37 this breaks my heart every time we just gave up another unbelievable opportunity because of fear and because a lack of Education now I track that I kept going that was just what we made till then I track it right to current current current right now that 100 Grand that 100 Grand now 57 months later since that happened is now 139,900 what all happened well covid hit government gave us stimulus money10 trillion do they gave out you know we didn't go into a a recession uh because there were economic IC problems in our country we went into a recession in 2020 because we the government shut all the businesses down we did that to ourselves so that wasn't that wasn't any logical reason why we went that was just emotional reasons why we went and anytime anything happens emotionally it will come back right away because it's not real it's just emotionally it's not just like your feeling your feelings they're real to you but but it's not really what's really going on it's just the way you feel right so so with that $10 trillion of stimulus you can see we amass savings look at our savings rate we ended up having excess Savings of $2.3 trillion now why do we have why why do we have so much saves well they remember they gave us$10 trillion and and guess what we normally do when you give us money we spend it that's what we do right but the problem was we could spend it because we shut all the businesses down which led to the issues that we had well if you can't buy goods and services you all had economics 101 you probably learned this crap in junior high that you know that with supply and demand when all of a sudden when when all of a sudden demand is high and Supply is low what happens to price it goes up so that's what ends up happening so that's what drove inflation all the way up to 99.1% you know through June of 2022 and then look at our savings rate our saving rate skyrocketed again why because we couldn't spend it well where are we now where are we now well we're back to normal we're only saving 3.4% of our disposable income which is very very poor uh you really the rule of thumb is one thing I always teach my clients is number one you should take 10% of what you earn and pay yourself first you have to pay yourself first you must pay yourself first that's that's critical most people they pay thems last well there's any money left over then I'll put it away well you you you have a problem with that you got to pay yourself 10% take it pay yourself first well we haven't done that in decades we haven't done that in decades why well how how how do how are we keeping up the spending right now well right now we're doing it through credit cards you already heard me say 600 million credit card accounts now through the second quarter of 2022 at an average interest rate of 24.4 two% so so we really got some debt issues but but here's the thing you got to understand what drives the market two-thirds of of the market going up is consumer spending super strong whether we're using a credit cards or whatever or whether we got that T1 TR doll stimulus consumer spending is very very strong that's why we finished with a very good another good GDP but look at corporate earnings corporate earnings we're hitting record earnings you know right now the other onethird of the market is driven by Corporation corporate earnings so you have people that get money what do they do they spend it with the corporations corporations make money you understand you understand the cycle but it's very strong of what's happening right now in this country we are not headed for any kind of a recession not based on the the numbers and you'll see that in a minute but here's what we talk about the FED interest rates so the interest rates I mean right now when you look at our economy is so strong even between the inflation numbers coming out I'll show you all that between wage growth uh between unemployment they're they're they're very good numers so is the Fed going to drop it again now they did say there's a possibility we'll have another one yet in November and another ray drop yet in December maybe 25 basis point but but we may not because it it it's strong who know we'll we'll see how that plays out but the point is they do predict it to come down they they they they want the FED cycle to come back down again you know which it will but look here's the thing and and people say even when it's going up why why haven't higher rates cause the economy slow down more the other thing remember remember you say well boy they just jacked the rate up you know all the way through the last couple of years like really really fast I mean we we we we went from zero fed fund rate you know like five and a quarter and and that and and when you look at the slope of how that happened it was like almost straight up well well then they said but but why didn't why did why did they have to do that well here's the thing because we had such a great economy prior to all that look 58% of the outstanding mortgages have an interest rate below 4% that's why even though why didn't why didn't Why didn't it cause the economy to slow more because 58% of the mortgages which is us our the people we we were below 4% we weren't having any kind of issue and then look at look at corporate debt 51% of the S&P debt won't mature after 2030 we there was no issue with the corporate debt either that's why it had to be as drastic as it was but that's just but again that's just normal but here's the drivers infl inflation was one remember so we hit June 2022 we hit 9.1 we had 9.1 inflation rate so the government said look we we got to we have to kind of hurt the consumer we have to hurt the consumer because we got to get them we got to get them to stop spending money so we're going to drive the rate up so that means more of your payments going to go to interest and principal so you have money hopefully more people lose their job isn't that sad when we got to create a a bad situation just to fix you know an issue you know in here but that's what happened but but did it work did it work it worked perfectly it's working picture perfectly look where we're at now 2.4 inflation I mean if you look at our 50-year inflation rate numbers 50 over 5050 years the average inflation rate is 3.7 we're at 2.4 now the FED said we W two we're right we're we're right where we need to be that's what I want you to understand we're right where we need to be you know uh with that there's the numbers there you can see there you can see the numbers here but let me let me let me just give you a little thing because inflation is real don't get me wrong it's real and I want you to understand the importance of understanding especially if you're in retirement because right now we really have a 30-year retirement income prices and remember I told you I I recommend three books I I gave you two already here's a big one it's called simp wealth inevitable wealth this is another guy who helped me tremendously hone my philosophy of 100% equities his name is Nick Murray uh the book he writes called Simple wealth inevitable wealth absolutely phenomenal book on understanding what really risk is all about but he really helped me find tune to philosophy and I had a chance to have a couple of mentoring sessions with him over a few years uh on telling a story this is the story this is what he taught me this is he said Ron you need to be telling this story to all people you know here I don't care and and he said if you keep telling this story and you help people you'll become wealthy in the process but I said I want to make sure that even though you become wealthy you don't stop doing it just because if you're willing to do that I'll meet with you you know for a couple years we'll go over let me I'll craft the story see how many people you talked it to but here's what he showed me he gave me the stamp when I first met I met him on Top of the World Trade Center you know back in the 90s uh you know on there I was so impressed with with uh with with with with what he showed me here's a guy that gets paid $40,000 an hour to speak you know here and he just blew me away uh you know here and he and he gave me the stamp afterward and it was called he said Ron here's a story I'm going to give you I'm going to give you actual the actual stamp honoring Vietnam Vets November 11 1979 and it's about inflation he said why do we run out of money well when you think about retirement you basically think about retirement uh you know here is that you're on a fixed income right that's what most people associate so here you are uh let's say you have a quarter coming in and all you have to do each year is just buy one stamp so your quarter you got to buy one stamp well that's honoring Vietnam remember that was Veterans Day November 11 that happened to be a Sunday so the stamp didn't hit the market until Monday November 12th 1979 and it was 15 cents you got a quarter you got a buy stamp you got money left over we're all happy well look what happened by 1988 that STS 25 cents look what happens by 1991 stamps 29 what do you do what do you do now now now you're short so people say oh no not a problem I'll just go I'll just go borrow money well remember you've been retired for 12 years you have no earned income who's going to loan you money nobody you know what you're going to to do your butt's going back to work if you think it's tough getting out of bed getting older now going to work try being retired for 12 years and have to do it like a bunch of people will because retirement is not an age it's an income stream unless you have the money to retire you can't well where's the stamp now 73 cents you got a quarter coming in do you understand the problem you understand the struggles that people are having right now but here's what he told me he said Ron here's a formula for creating wealth is that what I was looking for is I looking to be wealthy are you looking to be wealthy are you looking going to be part of the 2centers sure you are well here's the formula for creating wealth is you got to be 100% Equity based the equities have two ways of making money one you have dividends two you have you have capital appreciation two ways of making money let's explain this so dividends here we are 1979 just take I'll just take one stock on the exchange McDonald's you all you all heard of it you know who it is McDonald's dividend in 1979 was 50 cents so guess what 50 cents the stamps the stamps 15 were we okay yeah we were okay what's the dividend pay out you know here in in 2024 uh July 15 answer McDonald dividend 668 was that enough to cover the 73 Cent s well with a lot more money left over wasn't it but that's not the big money that's not the big money it's not the dividend the bigger part of it is is the share appreciation well when you look at the S&P the S&P closed November 12th 1979 at 103.5 one there's your dollar what the S&P closed July 15 2024 answer 5650 uh 5654 4.96 every dollar is worth $169 42 are we okay are we okay see it's not just about you you what you've done here is you created a generation of weth transfer not just you retiring and hopefully you don't you don't have to rely on your kids to be able to maintain it you know out there because you ran out of money here here we're talking about creating a generational wealth transfer that's a great story in inflation isn't it that's very important to understand that and then again when we look at the wage growth you heard me talk about the way where the wage unemployment was and and uh and and you can see right now when you look at unemployment rates 4.1 remember they had panic that one of one of the things that created some of that Panic also that Monday is the unemployment numbers were going up and up and up like five months in a row one one and then it hit 41 and then it jumped to 43 back in September and that's why that's why pal didn't uh necessarily drop the rate wide r or you know because he said look I don't know I I need to see more numbers and and but then they panicked because it it didn't go from it went from like 37 38 39 but it hit 41 then it jumped to 43 and they said uhoh could could we be moving into a recession but look where we are now it went back down to 41 look at wage growth 3.9 remember inflation's 2.4 this one the first time that we're actually getting actional wage growth where our wage growth is higher than inflation typically it isn't for 50 years it hasn't been that way that's why people are struggling more and more in fact part of the article that I that I that I read about uh here is it said it talked about the Millennials it talked about the millennial generation listen to this um it says American Millennials are approaching middle age in worse Financial shape than every living generation ahead of them this is the first generation in history that at this current time in their life is worse off than the generation previous never happened ever in history and you can see again some of the reasons why some of these things are taking place right and then then Presidential election which we coming up right now interesting right look I say it don't matter what idiots in office I don't care Republican Democrat whatever it makes no difference if you take a look at the market and you have $1,000 invested January 1st 1926 it's now worth4 A5 million are you okay are you okay every thousand you're okay you're okay it doesn't matter it doesn't matter who's in there now I want to read some of these because this is very important because this is what's this is what's swaying some people right now from getting monies away but what's it showing it says look election years have historically generated strong returns are we having a strong return this year in election year we're at we're up what if you're paying attention 23.1% look stocks have outperformed a positive return 20 in the last 24 years 83% uh presidential election years from 28 to 1928 to 2023 averaging a 12% return in all years during the time frames right Rose 73% of the time when average return 11% look markets have performed well on their both parties doesn't matter who's in right since 1936 a 10-year annualized Return of the US Stock as measured by the S&P made a start of an election was 11.2 if it was a Democrat 10.5 if it was a is Republican not much difference not much difference look at this stocks uh Trend higher over time regardless of who's in office it says a, investment in S&P index when FDR became president 1933 would grown to 19 million by 2023 and during that time there have been seven Republicans and eight Democrats pretty much a split and then here we've been here many times before the current economic political challenges may seem unprecedent but look back at the controversy uncertainty have surround every campaign every campaign so it's really irrelevant here's what's interesting you heard me say earlier that that the the market will dictate the president not the president dictating the market president has nothing to do with the market I love this slide it says look if you look at the if you look at the three months before the election now we just we just finished it three months before the election quarter which would be August September and October if you look at the three months before the election stocks have historically Fallen ahead of CH of change of party and rally when thec company retained the White House here's what it says so in other words three months before the election that three months going up from August to the to the end of October if the Market's up whoever's in office stays if the market is down whoever's in office is out now it's funny because the market just closed we're only at we're only November 2nd so we don't have the calculation yet for for what October actually did but people now know they it's funny because Matt and Sally who I know is on our broadcast one of our one of our best friends and our first recruits in the business you know they called me up last night he said Ron how what does that mean how' the market how' the market do in this quarter because they they they're this is the first time people are calling me hoping their accounts are down I I hope I'm down I hope my investments are down what does that mean means a change that means whoever's off is out whoever's in you know I and so I said look I I don't have the numbers yet now I do know in in uh August it was up over 2% and and so was it in so was it in September up 2% and they say ah damn it that means we had to be down more than you know more than 4% in order in order to hopefully have somebody out and somebody in and that means their money they're they're they hope their money going down well I can't give you the answer Matt I can't give you the answer yet because the the statistics aren't published yet for for for October but remember what happened in 2020 to Trump remember what happened five days before the election the market in that quarter was up 5% it was up 5% how did it finish the last five days minus 04 of 1% meaning what he was out and what happened to him he was out right so just just to give you just give you a clue right here but look when we talk about this GDP or going into a recession now I always tell people look we already had a recession now the government never publicized it but the government's definition by their defin by definition the government says what is our recession two straight quarters of negative GDP well in in the uh uh March of 2022 we are minus 1.6 June of 2022 we are minus point6 that's two straight quarters of negative GDP P according to the government that's a recession but yet they didn't say it they didn't say it they said well if you take this this and this and this out of it we didn't have a recession well this this and this that's what C causes a recession what do you mean you have to take it out of it so I already told people we already had the recession we already had it now look here here's the other thing now look at where we are now you can see look at look at first quarter 1.6 second quarter 3.0 third quarter finished at 2.8 we are rocking but here's here's a measurement this is what we look at it's called the US recession dashboard this is done by Franklin Temple this is awesome so it tells there's 12 indicators that actually say whether we're moving into a recession this had turned red August of 2022 remember the two straight quarters of negative G GDP would was in June of 2022 couple months later August are the you know the anatomy recession dashboard turned recession it was red well where are we now we we we're not not even caution we're in expansion man we are in expansion we're not headed for any kind of recession and just remember what happens when the FED does a rate hike without a recession we return of the market is almost 20% and and what did we do 23.1 so far exactly everything that's happening is happening exactly like it's supposed to happen you know on here uh but by the way even if we were moving into a recession and I say we already had one in 2022 what happened happens to the return one year later following a recession that means in 2023 according to our numbers we the market should have been up 16% how' the market do last year you already heard me say 26% over three years it's up 31 over five years it's up 56% so you you now you're know you're moving into something where the market still has a lot of room to grow and make and really make great rate of return but here you heard me say initially before that how's the market work you heard me say take seven steps forward one step back seven steps one step back well here it is let's look at it so when you look at the average the average Mark the when you look at the average uh uh bull market it lasts seven years and nine months return uh 44% the average bare market last what 13 months you know here it's over 13 months let's take it let's take let's take a look at example let's take the worst one in 60 years here's a Great Recession right here remember that you all know remember that October 9th 2007 to March 9th of 2009 Market down what 56.8% how long did it last 517 days what is that 1.4 years 1.4 years it was over it was already over it was already over the what the Great Recession it's already over and then when you look at it since then when you look at it when you look at it you know here uh you know in terms of overturn one year later the Market's up from the recession 53.6 3 years it's up 137 10 years after the Great Recession was up 367 per now well over 400 tell me that's not amazing this what happens you just leave it alone you leave it alone but but here's what here's what here's what you you got to understand volatility does not equal a financial loss unless you do what like I said earlier unless you sell and when you look at Corrections and and that's why you read a lot about a correction coming we'll have a correction we'll have a correction coming that means the market actually goes down 10% from its high it's down 10% when it goes into a bare Market it means it's down 20% but you understand that we have a correction every single year on average this is not not normal our Market has an in-year decline of 10 minus 10.1% every single year it doesn't finish down that but we have an in-year drop with 10 so we go into a correction every year so when they say oh my God a Corrections coming no kidding it happens every year but you understand how it throws everything in the Panic for a lot of people it doesn't finish like that here's the average return that it finishes at 15.8 I'm going all the way back to 198 83 right and then here we are now here here's a graph of it going all the way back to 80 you can see every year year by year so far this year we were down we had we we were down 8% so far this year where are we now you heard me just say as a Friday we are at 23.1 this showed this showed through the end of the quarter at 22% normal is it normal everything's normal everything that you see is totally normal here's the other thing uh money market these are the most amount of assets we had in Cash ever look here's the three other times or four four other times that we had money and cash right now we have 6.2 trillion sitting in money market accounts ready to go in the market but they've been waiting for the FED to lower because they know the market will take off again just like we've been experiencing and you can see the returns around money market asset peaking and then going back in the market average rate of return on the last three 164 193 12.3 three-year performance return on that again we we're hit we're we're hitting we're hitting perfect what you know what's going on and then the this is probably one one of my favorite slides of all is the point is you cannot time the market you cannot time the market if you look at this if you go back to 1945 and and you took a look at an investor who sold 12 months before the market peaked so 12 remember this last run was 11 years so that let's say they sold out in year 10 they got out 12 months before the market peaked then the market went down and they got back in 12 months after the market hit the bottom and they did this for every recession since 1945 every everyone prior prior to that look at this so if you did that you would be a brilliant investor you would think you would be brilliant investor you could I'm timing it I got out 12 months before it peaked and I got back in 12 months after the low your $100 since 1945 would be worth $1,785 let's say you do what I teach people how to do you create the right asset allocation mix and you leave it the hell alone you don't do anything you just leave it alone you leave it alone your $100 is $ 43,372 you now made four times more money by just leaving it alone but properly allocating it right from the very beginning you understand the importance of that you can't time you can't time the mark and here's the other thing I'm gonna I hit you with so many slides because I want you to totally get it and and and and dramatically lower that fear level but when you look at this thing let's just say you invested $1,000 every year and you did it the wor you did it when the market hit the all-time high for the year you were this unlucky every year you know since 1950 you put $1,000 away in the year and you did it on the highest valuation day of the year now that's impossible to do you know on there but you did it every single year you hit the you hit the all-time high what's the concept in buying Buy Low sell High but you you you bought in at the high every year you have almost 2.8 million compared to your to to your CD at $448,000 again I want you to see how all this I want you to see how this all operates and then the point is always to remember it's a long-term perspective if you go back if you go back right now and and you look at this for for 50 years you can see we had the energy crisis we had Black Monday we had the tech bubble the global crisis Co all the things that we just talked about you can see right now we still average 12.52% and every $10,000 that you put away is over 3.6 million does that give you does that give you you know a real good feeling I just want to hit you with some Concepts here I want to hit you with some Concepts time value of money I want you understand why you need to get started right away and and and and you know if you look at an investor uh from 22 to to 30 let's say they put away 7 Grand away in their Ira they put $7,000 away in their Ira uh for the first for the first eight years and then they never invested another Penny their entire their entire career till they're 67 they invested $56,000 and by 67 their accounts almost $2.6 million here's investor B they didn't spend they saved nothing the first eight years nothing oh I'm young had to buy a car I had to get a house apartment whatever I got Des spense I had a kid whatever what I don't care I don't care I don't care what your issue is you put nothing away but then you save $7,000 every single year here from 30 to 67 you invested five times more money and you have less so one do you understand what I call a time value of money you you can't afford to lose any doubling period it's not timing the market it's time in the market that is so that is so critical I want to show you where do most people save money and why they're not getting returns why they're not creating well well we already established the fact that most people are saving money in the bank and I already kind of I already kind of beat them up uh you know pretty much and you understand why you're losing money after taxes and inflation I think you already get that in terms of purchasing power so I won't spend a lot of time there second place people are putting money as life insurance policies cash value life insurance policies this blows me away it blows me away and by the way when you look when you when you look at this thing there's there's there's two types of policies that you can buy and boy you want to talk about being uneducated in these areas I this is probably one of the worst areas we are uneducated in when you buy life insurance you buy Life Insurance in units of a thousand as very simple you can buy uh you know cash value life insurance whole life universal life variable life index life whatever whatever whatever it is and you can see right now this is right off the industry industry Pages uh the average cash value a th000 on cash value is $231 you pay for ,000 and yet you could have bought term insurance the same term same unit on protection for $2.7 so so here's my point why would anyone pay 11 times more to buy the same unit of protection obviously you must be getting some type of benefit right you if I'm paying 11 times more I must be getting some type of huge benefit here out of this deal well let's take a look at it let's take a let's take a look at it so I talk about the seven reasons why you never own cash value life insurance you know number one well I shouldn't even show you number one yet but let let me go this so so let's say you started buying life insurance is life insurance important look your whole life you spend three Place financially you want to be properly protected because one out of three people don't make it to retirement they die too soon you want to be debt free but there's good debt and bad debt and then you want to be financially independent right so you you're spending three plates you can't just focus on one you got to focus on all three so look at on life insurance side you're 35 years old you bought $100,000 policy your premium is $1,478 this is right off right off the industry books you can see now because you paid 11 times more by age 60 or 55 you've accumulated $2,737 worth of cash value so remember you bought a life insurance policy life insurance policies only pay one way only one not 10 one way you got to do something to get the money what do you got to do not my not my not my favorite option you got to die that's the only that's the only way any kind of benefits are ever paid well let's say you died at 55 years old there's 21,000 in your savings account because you pay 11 times more and then there's 100 Grand worth of protection that you that you purchased so you die what does your family get paid logically you would all say I would get paid $121,000 dollars right that's very logical that's what you would think the answer is and you heard me show it well no do you understand you lose your cash if you die life insurance is not a savings program if you were sold a life insurance policy as a savings program that is actually illegal that's why about uh 10 years ago all these companies were sued parential paid back $2 billion to 11 million policy holders because they sold them life insurance as a savings program it's illegal it's illegal right why because you lose your cash if you die now they don't hide it they spell it out if you look at your contract in your contract out of the seven reasons reason number one you lose your cash if you die is spelled out three places in your life one of them is on the front page in Bull print at the bottom of the contract here's what it says it says the insurance is payable upon debt it doesn't say the insurance and savings are payable upon on that it tells you three places and that was credentials argument in court saying we told these people we give them a 30-day free look period our average contract is is 11 pages even if you're a slow reader and then you could read a page a day at at 11 days you could have read if you didn't like the fact you you could have turned it in now they're saying we want our money back but how many people really even read it they didn't so now 65 let's say you di 65 better chance of dying than 55 now how much is it you had 100 Grand how much is your own money almost half the longer you own that crap the more you're the insurance company you're risking more of your money than they're risking of theirs number two delayed savings you can see in the first couple of years first two years on average there's no money even though you paid 11 times more there's not even any any cash value even in the policy you know why because it goes to commissions paid to the agents who sold the crap they get all the money up front they love that crap that's why they sell it right delay savings by year by by year five the average cash value policies in the whole minus 3.27% remember with a rule of 72 and 12% I almost doubled your money or I did double your money in six years at five you didn't even get to zero yet you will never beat the concept of buy term and invest a difference it's mathematically impossible to beat that number three it cost you to borrow from your cash value you know the amount of people now are taking loans against a contract because money's tight for a lot of people they're borrowing from their life insurance policy and they think it's kind of like borrowing from their 401 well I just got to pay it back to myself no no because number one your cash value money is not yours so now you say look I'm coming in let's say let's say Co hit you lost your job you need money whatever the situation is and you have an emergency and you say look I got 21 Grand now I want to borrow I want to borrow 21 I want to take a loan on my contract you say man my insurance company gives me great service are at my house the very next day you know why here's why that $21,000 they're charging you 8% interest to borrow whose money your own now does that make any kind of financial set so you're paying 8% interest to borrow the can now you're paying them $1,680 and by the way if you don't pay it back it becomes part of the principle and that whole thing is operating that's like the ru of 72 working against you you know now at this point right so look before you borrowed your own money you were paying pay $478 for 100 grand now you borrowed your own money you're paying how much $3,158 for how much coverage and people say well I got 100 Grand no you created a debt to the contract so that has to come off the top so you only have $779,000 worth of coverage for 3,150 remember we already said it was a screw job at 1478 for 100 grand you're now paying 3158 for 79,000 tell me this is not crazy number four life insurance policy qualifies as an IRA why all money that goes into cash value life insurance policies are all after tax contributions all after tax contributions doesn't qualify for right you know what I you know what I did see I bought ter for the two bucks and invested the difference that $21 difference in premium that you that you paid an I did that $21 I put in my IRA account now because I get a full deduction on it on that $21 the IRS is going to give me like $6 of my money back it's going to give me six bucks in tax I put the 21 in my irm I'm going to get $6 back in a tax in a tax benefit how much was the insurance cost too I let the IRS pay $4 do of that of that so not only didn't I pay anything for my life insurance because I bought ter invested differ I got a $4 rebate on top of it per thousand you understand how to create wealth this what wealthy people do they leverage assets right and then number five life insurance companies by law can hold your cash for up to six months here's what your policy said it says we had the right to defer making a loan on this or any other contract with us unless the loan would be used to pay premiums to us oh yeah as long as you're willing to borrow the money to give them the premium they won't make make you wait six months to get your money out who's who's that benefit for them not you six Dividends are not really dividends this is the part that really fires me up the insurance industry is the only industry that's exempt from truth and lending or full disclosure now don't to tell you something so they can say oh you're going to make 7% pay a minus three and 5 years and it's perfectly legal I tell you what the returns were you better earn those returns or I'm going to be liable dividends when we think of dividends as an investor we think what well we made a profit on our money a dividend was a profit right and so they had to come up with US Treasury decision number 1743 to explain what a dividend actually is for tax purposes right so look at this so so your insurance AG say yeah but look we can give you a taxfree dividend well certainly it's a taxfree dividend why well it says what what are dividends Dividends are simple refunds to the policy holder of a portion of overcharge collected so remember they just overcharged you like $21 a th000 overcharge they invested the money they made money and then they say oh we're going to give you some dividends the dividends is just a return of the overcharge which you already pay tax on you can't get paid Twi taxed twice on the same dollar that's what they call tax red dividence because you didn't make any any money off of it right and of course number seven was universal life as all the other policies because of all the expenses that are built in you know upfront you know to the contract level number three mortgage companies debt boy this kills me I we have one of our one of our accountants here Dawn I said Don like how many clients you have and she has like uh you know four or 500 clients I said what percent of your clients are actually putting money away in an IRA and she said probably 3% 3% it means 97% of our people aren't even taking advantage you know if you're under 50 you can put $7,000 away if you're married multiply by two if you're over 50 add another thousand on top of that to each one and so over 50 husband and wife 16,000 you could be writing off your tax dollar for dooll that's going to save you what about $4,000 in tax liability I mean you that's an instant return 24% on your money right like like we talk about here and yet I watch people putting more money away like toward debt you know or or or or or they get a 15year mortgage instead of a 30-year mortgage or they make or worse yet they make bi-weekly mortgage payment or or add extra to the principal and they think they're doing a really good job because debts an emotional issue but it's only one plate you're missing the other two yeah you can become debt free but if you're not covering die too soon or live too long you're going right back into debt if you have an issue on either one of those outside plates but when you look at that I say look you take that dollar and you apply to the mortgage well what's your mortgage rate 5% so after tax you make 3.8 so if you apply that dollar to the mortgage side that dollar made you 3.8% return on your money if you would apply it to your IRA now remember we already established the fact that the IRA for the last 50 years has paid what 12 and a half per. but I can't show that I have to show what it paid the last hundred freaking years like that matters to you but whatever we'll take it 9% and the 24% bracket that you're in 24 that means you just made 33% return your money 24% of it was guaranteed by the government because they allow you to write it off your tax dollar for dollar if you qualify for that deduction and most people do so would you rather make 33% on your money or three take your time could be a trick question right you all understand what I'm talking about here this is what wealthy people do remember this saying this is one saying I always talk about remember the difference between what wealthy people do this is either e either you know you can either leverage your assets or your ass at work either your assets are at work or your asses at work now the problem is most people never get a chance to have asset work because they never got educated so that means they work to the day they die doesn't have to be that way but you understand what wealthy people do here they leverage their assets to make money let me give you an example of that you say well I just heard you say I should have had a 30-year mortgage versus a 15-year mortgage well let me tell you what I did so here I am refinancing again interest rates I got a 30-year fix rate at 3.1% M minus my tax liability I'm about 2 and a quarter anything under three is free money why would I why would I want to give it back or why would I not want to take it as long as I can I'm leveraging my assets to make me money look at this so if you take a difference here $200,000 loan at 5% and let's say you took a 15year mortgage well that was you your payment was 15581 a month if you'd have taken that mortgage for 30 your payments $1,073 that's a difference of $58 a month see I invest that difference and you look at this investing at 508 at just the 9% return not even putting it in the ira to give me the guarantee 24 from the government on the deposit going in not even that just putting it in account make it 0 I didn't I didn't get the deduction for the IRA 9% in 15 years I have 193,00 bucks in my account but here's you you did it for 15 years because they say Well Ron I'm 65 years old you mean I should get a 30-year loan yeah I did it when I was 65 years old you see you're making mortgage payments to your 95 that has nothing to do with how long I make the payment the term just sets the what the what the payment's going to be the average person refinances about every seven eight years so who who who that had a 30-year mortgage ever paid 30 years on a 30-year mortgage hardly anybody if if anyone right but look what happened to me so here you are 15 years into it right 15 years into it you had a 15year mortgage you made ontime payments at the end of 15 years how much money do you you owe nothing because it was a 15year term how much is in your savings account nothing either look at me 15 years into it my my $200,000 loan I still 135,000 in the invested difference uh part of my account I decide to pay it off I my house just made me almost $60,000 it made me 60 Grand so so my house is paid off in 15 years but I got 60 Grand how much you got nothing by the way if I show 12% and Dam and I should start showing because that's what they that be 120,000 means my house made twoth thirds of the payment for me remember either your assets at work or your assets are at work most of you don't let your assets work that's why your assets always working you understand that so stop it for God's Sak if you want to be wealthy right pretty interesting isn't it now look what what's the fear here what's a fear oh longevity risk well that's a risk but we already talked about the amount of people that are going to be reaching a 100 look at here here there's the numbers up there I mean look at look at these numbers the probability of living you know here for 65 living to 85 990 95 100 years old we're not prepared we're not prepared that's why all these systems are are are are breaking up secondly is Market risk this is what most people really look at is Market risk when you look at Market risk it's really look if you if you go back to 1939 uh you know here and here's what somebody somebody says Ron here's money the first thing I I want to ask is what do you want this money to do and how long does his money have to work if you tell me here's money but I only got one year time Horizon I need the money but exra well you have no business being in the market that's too short because if you look at the market over Oney year holding periods there's been 65 positive and 20 negatives you know since n since 1939 that means here you have a 23% chance of losing money when you if your time Horizon one year it's too much risk I want I I I I I wouldn't go in it now look at look at look at it over three year now you drop that risk down to 12% lot better look at look what happens at five year 8% 10 years 10 and that and anything over 10 by the way it's zero it's zero so even when I did that mortgage that I bail the equity out and invest the equity what risk was I really taking if I had a 30-year time Horizon on mortgage money or 20 I had zero risk you know in that point because there's never been there's never been a down period of you know of the market be you know beyond that so these are things again it's important to really you know totally understand but here you heard me say earlier is the average investors made no money over the last 20 years and yet over the last 20 years the Market's averaged 9.8 in the 20-year time frame look at what the average investor earned 3.1 and remember inflation was 2.5 we're going to lose a third of that because we're going to have to pay the government tax on that gain so we're going to be down the 2.1 minus inflation of 2.5 do we make any money we're actually in the hole look when you look at the numbers here they are had you stayed fully invested in the market your $110,000 is worth 6484 44 bucks in that 20-year period if you just missed the 10 best days of the last 20 years just the 10 best days you gave up half your money it's 29 Grand if you missed the best 40 days of the last 20 years your 10,000 is only worth eight grand you actually lost money and here's the funny thing it's not funny but seven of the 10 best days occurred within two weeks of the 10 worst you think you got out because you thought oh my God the vix hit this I better get the hell out oh but I got back in right away within the next couple of days that did not happen you didn't get back in so that's why you made no money there's the proof of it over the last 20 years right and then and then I'm going to wrap up with this last piece here you know there I showed you now how to accumulate a tremendous amount I showed you how to create wealth I show you how to accumulate wealth now the question is you're in retirement you want to live off the money what do we do how do we do that so I don't have this fear of saying God I fear Deb I fear retirement more than I fear dying that's to me crazy well look if the if these are your financial advisors example Bill ban says well if you diversify among large and small cap stock you can safely withdraw 4 and a half percent now you probably all heard of the 4% rule the 4% rule is the industry standard rule that says in your retirement as long as you don't withdraw more than 4% of your money in any given retirement year you should be okay with the typical retirement so Bill ban says well if you if you diversify large and small you could probably get four and a half look look at look at look at Dena she says well 4% has been a useful guideline but it can't be a rule for everybody she thinks that it's going to be 3% and then and then and look at Wade look at the professor retire American college he says well those who rely on to fixed income you can only take two and a half percent well now think about it if if he was your adviser and you had a million dollars and and and you you're only withdrawing two and two half% that means you're living on $2,000 a month of income but it takes a million dollars it takes a million dollars to live on two grand but first of all who the hell is going to live on two grand in retirement but even but it takes two million to be able to do that and the average retirement account is 84,7 14 bucks are you kidding me oh sure you now you understand why do people fear retirement more than dying well that's why because of the advice to some of you know these people what they're actually giving now you say what if I retire at the wrong time is there such thing answer there's not if you understand the rules let's give an example so you say I want to be able to show you because you heard me say well you told me I'm going to live in retirement 30 years so when's the last time we had a major drop in the market and then I then and and you can show me a 30-year track record well the last time was 7374 remember I said earlier once in a generational cycle do we have a major drop in the market we had it in 3031 the Great Depression we had at 7374 remember 7374 some of you are a little bit older so uh I don't want to say you're old but you're older and uh you remember that remember that in 7374 we had bu gas we had to buy a gas base in our license plate OT or even that's why luckily you had multiple cars and hopefully they didn't have the same ending number in Li because we were switching license plate to put it on this car just so we could buy gas so that was a very down big time down year in the market as a matter of fact look look so let's say here you are you retired and you retired at that time you had a million bucks and I show you withdrawing 6% of the money out so in other words a million dollars you're now living on 60 Grand you're living on 60 Grand and then remember so you took 60 Grand first year then you took 618 because we have to adjust it for a 3% inflation rate typically right so that means next year we had a withdraw of $61,800 and you can see by the second year your million doll account value is now $551,500 oh my God you just lost half money in two years half your money's gone in two years and you say to me hey I'm living 30 years in retirement two years in it half my money's gone you would be probably pissed would you not and what would you do what would you do out you would get out you would you would get out you would just get out because you say look I can't afford to lose any more money I'm going to be living 30 years in there I can't afford to lose any more and you would have got out you would have made the biggest mistake of your life because the answer here you say well should I live on less money should I take less out well can you live on L I can't well then don't so then you took 63 65 67 69 there it is here it is here it is continuing for that 30 years we said 30 years oh and by the way you caught 2001 and two at the end you got one right in the beginning you got one right in the end what the hell else could have happened to you and look at this you withdrew in that 30-year time period from your million dollars you withdrew $3,161 th000 from that account and you didn't even touch your principle in that 30 your account value is still 1, 58,4 49 does that give you peace of mind does that make you feel a lot better here here's what I said first time I've seen this you know what anybody can make nice round number or anybody can make nice hypothetical numbers that's really really pretty but give me a real live client I want to see somebody I want to see a real life client's account from start to finish when this crap happens so the thing that I am most proud of you know here is what I've done for my mom and dad that's people say look you already created wealth a long time ago why do you do it I do it because I love making a difference in people's life and and no better than my own personal family with my mom and dad their story is is is a very simple story my parents uh you heard me talk about the KOA Campground franchise in the beginning they brought the first ones at East Coast we operated with them as a partner in the business but I said for years to my dad dad you got to start saving money for retirement you know what my dad's famous last words were Ron my business is my retirement account when I retire I'm going to sell the business I'm going to live off the money famous last words I can't tell you how many times people have said that doomsday for them so my dad decides to retire 57 he wants to sell the business to my sister on a long-term agreement of sale he want 600 Grand doesn't generate enough Revenue so my sister buys it on a 20-year agreement of sale for my parents to cre money 12 years in my my dad would be 69 my dad was not the most positive individual you would ever meet so uh my dad at one of our family reunions said I hope I'm dead in eight years because I'll have no money left so I said to my sister you want to take care of him the rest of your life she said hell no I said me neither but you owe a money so here's what we need to do what we're going to do they lived in a farmhouse right in the middle of the campground we'll put them in one of The Lodges on the hill knocked The Farmhouse down put seven more campsites in there just a revenue from the seven additional campsites will be enough to pay the mortgage and we'll discount will mom and by 50 Grand so I invest $245,300 n and I invest that August the 5th of 2002 and guess what happened that year that was one of the years we had a major drop in the market the Market's down 22.1% and my parents are withdrawing 7% a year to live not four seven and they caught the big one all big one right year one right right right into it and then then something that's never happened to any single human living human being 08 happens six years later and the Market's down what 56% now tell me that's not a formula for disaster but because how we invested the money look what happened here so this is I showed her statement I've been showing her statement every month now for 22 years and three months to be exact my parents now withdrew from their account remember they invested 245 they now withdrew 318,000 $500 they have already withdrawn from their account over the 22 years and three months which means they withdrew all their money plus 30% more and their account value currently when I did my when I did the show my third Thursday October their account value $349,450 their account value is they have 43% more money than they started this is the thing that I am most proud of this is the thing that of everything that you learned here this morning kind of encap poates everything and says here how it work here's how it works live with a real client so that should give you the most unbelievable feeling I also promise you I tell you how do we invest what's the N baskets this shows the probability of meeting income needs in 25 year retirement I love the slide because you can see if you're withdrawing let's say 5% of your money out and let's say you were in bonds you had a 28% versus a 77 and 100% equities and look at what if you withdraw 1% more instead of 50 Grand you withdrew 60 Grand now you're down to 3% on a bond portfol this is how the industry teaches you invest oh you don't want to be in equities because they're risky assets you know on there it's the exact opposite of what they what they're talking about risk has to do not how you invest your money risk has to do with length of time that money's got to work your riskiest asset in retirement is being in a CD in the bank why because it doesn't have a chance of ever making any money look at that 7% my parents were withdrawing 7% of their money out if they would have been in that Bond F portfolio what chance would they have last to 25 years zero versus what 52% is that big and then we talked about the and showing you the baskets we said the market has two ways of making money you heard me say it earlier that's dividends and capital appreciation you see since 1950 the Market's average 11.2% 3.3 came from dividends 7.9 came from capital appreciation so if you want to maximize the market return you got to have both there's the baskets and so the way I like to invest money my job I don't manage anyone's money my job is to manage the philosophy of this I want to have two-thirds of my money in growth onethird in value right why do I do that because when you look at the basket returns you can see over 10 years when you look at this annualized return growth beats value right so I like to I like to do two3 growth onethird value I like to have I like to have 15 small that's the size of companies that they're investing in small cap companies up to two billion like Papa John's BJ you know Snapples i' like to have 30% mid these are big companies that are 2 to 10 billion market cap like Primerica our company Advanced Auto office Depot then I like to have 55 large these are the biggest companies in you know in the world that's the mix that I have and I want to show you with that and why do I want to be as small as well as large too well look if you just were in large cap stock and you can see you know here from you know from the last 20 years 10,000 in large cap is your account's worth 182 Grand but look at small cap every 10,000 is worth 210 so you want to make sure you're Diversified most people are not Diversified they don't have any in in the small cap area and yet when you look since 1930 small cap stocks are the only major asset class to outperform inflation in every decade and most of the time when I look at people's account they have nothing there right and then here small cap have historically outperformed large caps in presidential election like the one we're in right now and they have been right so here's a mix here's here's an example of our mix in the portfolio uh you know on here you can see uh through the second quarter did our third quarter just got updated uh yesterday so I didn't I didn't make a new slide it'll be updated again for our slide coming up but the market average 22.7 our our clients earns here was 25.3 one now look I don't care what happens over one year that's not a really great indicator of anything because the market typically Cycles in five to seven years so when you I like to look at the five and 10 year return so when you look at the market over five years average 13.15 our clients earned 15.58176 12.89 so I'm beating the market by about 15% I'm doing it with when you look at the beta score I'm doing it with 6% less risks in the market but what does that all mean here's what it means if you put away example 250 Grand you know in this example over over here over the past 10 years you basically tripled your money your account value is 763,000 uh you know here 79 you know in here so tell me that's not tell me that's not pretty amazing so that gives you an example and again you know the the funny part I'm not actually supposed to show these slides I'm you're not supposed to be able to see these this is these are these are some of the dumbest rules I've ever seen to me as an investor I want to know what the hell PE things are going to make I want to know what the return I want to know what what my return is I want to know what my risk is you give me an example if I gave you you know 100 Grand or 250 what what's my account G going to be worth but I like to show these slides because this is this is the real real returns you know you know on money but I want to read this thing and I want to just give you one thing of Hope at the very end so now when you look at it is that is is is now this will make sense to you but why did I come in this business and it says I started Blue Mountain Financial Group so I could be fiercely independent of the industry I can't stand what the industry is teaching I can't stand the things that they're talking about because they're not working they're not working they're not even realistic for the average person oh sure you can have crap for the wealthy but this isn't about the wealthy this is to help Middle America where most of us or all of us really come from you know here you know and here so I go fiercely again and you know why the the industry won't change I fought the industry I fought the industry always with My Philosophy you know why they won't change because they would have to admit they they made a mistake teaching people that's scrap along they won't do it they rather people suffer than than say I made a mistake let me tell you let me tell let me let me give you more of an education but look what it says I started Blue Mount Financial so I could be fiercely independent of the industry my goal was to be able to help clients with any size asset or with any investment needed I wanted Blue Mountain Financial to always focus on the client I also wanted to develop my own invest philosophy insist on to help clients build wealth for retirement a typical industry strategy for retirement says Savers is to position clients in a portfolio of stocks and bonds and to increase a portfolio's bond allocation as a client gets older in contrast our philosophy is based on building portfolio equities with 100% Equity be I call it Cradle to grade management of money you know what happens why the industry loves oh oh you're getting older you better we we need to get you out so let's sell this and let's buy this oh oh oh the markets has a good opportunity well let's let's sell this and get back in be G back in Buy Buy Buy sell sell sell and every time you do one of those transaction they get paid that's why they're C Brokers if you use them you get broker in the process just so that you know but uh we talked about bilding 100% while focusing on asset class diversification dividend income protective rappers such as variable annuities to mitigate risk and volatility we believe this approach will help you build wealth before retirement and continue to grow your Investments during retirement we developed our approach now based on now 38 years of experience each client works with an advisor to create and Implement an investment plan additionally we coach you on the importance of staying in the market and not trying to avoid it uh we have Assets Now is 500 we're now over 600 million because of the job job that we've done I am so appreciative I am so grateful and and I and I just want to give you one one one more one more thing this I find dramatically reduces people's fear uh uh you know here in the market so no when convict things we right now are in the third secular Bull Run in the last 100 years this you are going to find will be the greatest decade the market has ever experienced it is being fueled right now by AI That's all you hear about and what's called DNA mapping they believe by 2030 they'll have a cure for every disease in this country it's amazing what is going on you know right now so uh let me let me explain so in the last 100 years we had two other bull market sectors now each each each sector lasts about 18 to 19 years that's how long they last even though along the way in those sectors we have recessions and we have bull Mark or bare markets uh you hear but you see the first one occurred from 1949 to 1968 19 years was a length the average anding return was 16% the second one which was the biggest Bull Run we had and that was 1982 to 2000 that was remember that was fueled by the computers cell phones and the internet which is the highest return the Market's ever done in in a decade period the markets in the 90s the market was up four times itself nasak was up 900% but that return was 20% return over 18 over those 18 years we're now in the third one right now that started in 2013 we're 10 years into it going on 11 you know there but in that 10-year period our markets averaged 12.2% right 12.2 so we said if we hit the low end which was 16 we're behind so we got to catch up in that 10 years and then we got to finish even on the low end of 16% means the Market's got to average 21% a year for the next eight years now how did it do last year 26.2 how is it doing so far this year 23.1 are we right on with what we're talking about what that means is every 10,000 On The Low End will be worth 170 Grand if we hit the low end of it if we hit the highend every 10,000 is a quarter million so here's what I like to link that to it's like you know you're watching you're you're watching uh a movie and let's say you're a character in the movie and and what happens is everybody dies except one person and you don't know who it is so you think about how you feel watching that movie and you're in it you're one of the characters am i g to die am i g to fall off the cliff somebody going to shoot me and you you you think about how you feel that's why we have all this fear going on right now but let's say have you ever seen a movie where they told the end of the story first well the end of the story is you're the one that lived you lived now you watch the same movie all the fears and all the crap and all the people dying how do you feel now you're not even faced in fact you think it's pretty cool like how do I how did I get out of that one how did I get out of this one it's like kind of cool well I just gave you the end of the story The th by 2031 prediction will be worth 150,000 it will hit 150 we're at 40 now I've been saying this since the D was at 30 about two two years ago there'll be one now here's what people say to me you're crazy what do you mean that thou is going to have a five times multiple I've been saying this since it's at 30,000 I said it's going to be 150 people say you're freaking nuts there's no possible way that that can be the case well I said I tell people do you realize that's already happened it's already happened what do you mean it's happened well if you go back to 2009 remember the Great Recession the market was low so I had my jaw cut they had extended forward I had to wear braces for a year my orthodontist said to me when the Market's down the 6600 March 9th of 2009 he said to me Ron you'll never see that da hit 10,000 In Our Lifetime that's never going to happen I said ' thank God you're an orthodontist and not a financial adviser because you would suck you know one here well the Dow uh you that was in March and then October 14th of the same year 2009 did that went over 10,000 you know just seven months later I gave him an article right after he said that to me this is 2009 I gave him an article that said that thou will hit 30,000 which was the five times multiple by 2020 11 years just 11 years November 24th of 2020 that that one over 30,000 look nobody can predict a pitcher perfect but there's cycles that are very reliable you know that we know and how we can help people so you now are in the greatest period of being able to save money that you ever had ever in your life if you make the right choices with your investment exactly but today I showed you and I I'll lost the same question how many of you want to be wealthy 2% of you will get the job done I just showed you right now how to be one of those 2ers does that make sense God bless thank you very much for your [Applause] time 25