Grow Money Business with Grant Bledsoe

A few weeks ago I had someone ask whether it was possible to live off of dividend income alone in retirement. This gentleman had saved up a nice chunk of money and was currently invested 100% in stocks. He was eligible for Social Security benefits, and was intent on never selling any of his shares in retirement.

Instead, he wanted to live off the dividends his portfolio produced to pay his expenses. He thought that between his Social Security benefits and dividend income he’d have plenty to pay his bills. I thought this was an interesting question, and dive into the details in today’s podcast episode.

We’re trying a new format on the show! Starting this week each episode of Grow Money Business will include a few consistent sections. We’ll answer mailbag questions. We’ll interview guests. We’ll spend a couple minutes reviewing the markets. And we’ll review news articles you should be paying attention to. Enjoy!

Resources:

etf.com/sections/news/fidelity-adds-surcharge-etf-platform

wsj.com/personal-finance/retirement/inherited-retirement-account-ira-irs-c3c95273?mod=personal-finance_lead_story

The general goal of investing is to buy low and sell high sometime in the future. So how should we handle it when the markets make new all time highs? Should we wait for the market to fall before investing new money? Should we invest it all now to catch upward momentum?

The reality is that markets make new all time highs pretty frequently. Since our economy continues to grow, the size of the pie that drives corporate profits and stock returns simply tends to get bigger and bigger. And even if you invest at a new all time high today, you’re still likely positioned for positive long term returns.

In today’s episode we dive into the details. We cover the history of returns over 1, 3, and 5 year periods after investing at an all time high, and how you might think about this in the context of your overall strategy.

Resources:

3 Golden Rules On How To Invest At All-Time Highs

seekingalpha.com/article/4453541-3-golden-rules-on-how-to-invest-at-all-time-highs

Tony Matheson joins us on the show this week. Tony worked as a wholesaler in the investment industry for 20 years before departing to launch a financial advisory firm, Slalom Wealth. Wholesaling is a sector of the industry we haven’t discussed much on the podcast to date, and Tony joins us to share the inside scoop. We cover how wholesalers work with and influence financial advisory offices, what his path to starting a financial advisory office has been like, and what it’s really like to study and sit for the CFA exams.

Resources

Connect with Tony:

Website - slalomwealth.com/

LinkedIn - linkedin.com/in/tony-matheson/

cfainstitute.org/en/

XY Planning Network - xyplanningnetwork.com/

I’m asked pretty frequently what I think of the market, and what themes I’m paying attention to. While I don’t think there’s any one theme, event, or headline that should impact your investment allocation, there are certainly some themes I’m tracking more than others. In this episode I cover the top four I’m paying attention to right now: the “Magnificent 7” and the impact on market returns, commercial real estate, the Fed’s dot plot, and the Chinese economy.

Resources

Links:

https://www.bankrate.com/banking/federal-reserve/how-to-read-fed-dot-plot-explained/

https://www.npr.org/2024/01/30/1227554424/evergrande-china-real-estate-economy-property-collapse

https://www.cnbc.com/2024/01/25/china-youth-unemployment-will-stay-elevated-in-2024-but-eiu-warns-economic-impact-will-linger.html

https://www.mba.org/news-and-research/newsroom/news/2024/01/16/delinquency-rates-for-commercial-properties-increased-in-fourth-quarter-2023

https://money.usnews.com/investing/articles/magnificent-7-stocks-explainer

Vince Shorb joins us this week to discuss the state of financial literacy. Vince is the founder and CEO of the National Financial Educators Council, which provides financial literacy resources to educators and organizations nationwide. He shares why basic financial concepts are not being taught in public schools across America, as well as what parents need to teach their kids about money to set them up for long term success.

Resources:

https://www.financialeducatorscouncil.org/

https://www.linkedin.com/in/vinceshorb/

When politicians draft tax reform bills I usually try not to pay attention until they become law, since so few actually do. This tax reform bill is a little different. The Tax Relief for American Families and Workers Act of 2024 is a bipartisan bill that got through the Ways & Means Committee with a vote of 40-3. And since some of the tax changes would be retroactive to 2023, I figured it warranted some coverage. You might want not want to file your tax return quite yet if any of these changes apply to you.

Links:

https://www.wolterskluwer.com/en/expert-insights/tax-relief-for-american-families-and-workers-act-of-2024

https://www.congress.gov/bill/118th-congress/house-bill/7024

https://tax.thomsonreuters.com/blog/understanding-the-tax-relief-for-american-families-and-workers-act-of-2024/

https://taxfoundation.org/blog/bipartisan-tax-deal-2024-tax-relief-american-families-workers-act/

This week’s guest on the show is Eric Mason. Eric is a CFO, an economist, and a TEDx speaker. He is the current Chief Financial Officer for Quincy, Massachusetts. where he provides direct analysis of all economic and financial forecasting to the Chief Elected Official. He has an academic background in economics and has worked extensively in the field, with a focus on analytics and public policy. He teaches Principles of Microeconomics as an adjunct instructor at WVU John Chambers College of Business and Economics. Eric joined us today to talk about the current state of the economy in the US. Join us as we dive into Eric’s take on the current economic state, where it’s headed, what he expects to happen in the economy over the next 12 to 24 months, his take on federal debt, and more.

[07.00] National economy – Grant and Eric start off the conversation by discussing Eric’s career journey and his perspective on the present state of the national economy.

[16.04] Economic forecasts – Grant and Eric talk about how people make irrational economic decisions based on forecasts.

[21.50] Austrian School of Economics – Eric explains the Austrian School of Economics and how it is different from others.

[28.05] Capitalism – Grant and Eric discuss capitalism and its beauty.

[35.40] National debt – Eric shares his perspective on the US national debt and the US dollar as the dominant currency in the world.

[42.25] Threat – Grant and Eric discuss the threat of high interest-rates due to the US national debt of $33 trillion.

[49.36] FOMC – Eric explains his perspective on the ability of the Federal Open Market Committee to use balance sheet positions from the Federal Reserve to generate debt.

Resources

theinformaleconomist.com/

Annuities have earned a bad reputation within the financial community over the years, but why is that? When might an annuity actually make sense in retirement? And how can you tell whether they’re a good fit for you?

We’ve covered annuities a bit on the show over the years but haven’t described the fact pattern where an annuity might actually make some sense. In this episode we cover the fundamentals of retirement income planning, why mortality credits yield more income than bond interest, and when an annuity might be a good fit for your retirement.

[07.00] Annuities – Grant starts off the conversation by explaining annuities and why they are popular around the country.

[12.04] The 4% rule – Grant describes the popular retirement withdrawal method, “the 4% rule,” which implies retirees can securely withdraw 4% of their money in their first year.

[17.20] Mortality credits – Grant reviews longevity and annuity policies.

[23.30] Profitability – Grant explains how insurance companies design their products with their own profitability in mind.

[30.07] Candidacy – Grant explains who might be a good fit for annuities according to their background.

Resources

How Mortality Credits Make Annuities Work

safemoney.com/blog/annuity/how-mortality-credits-make-annuities-work/

Annuity Surrender Periods: Understand (and Avoid) Surrender Charges

thebalancemoney.com/annuity-surrender-period-charges-and-tips-to-pay-less-315092

This week our guest on the show is Michael Koeppel. Michael is the managing director and founder of Lakelet Advisory Group. In his roles as a board director, C-level leader, and business transformation strategist, he has helped companies in the manufacturing, technology, healthcare device, and financial industries achieve sustainable growth and turnarounds. Michael joins us to share his knowledge on the ins and outs of the ESOP (Employee Stock Ownership Plan), who may and may not be a good candidate for it, the costs, the benefits, and more.

Resources

ESOP

lakeletag.com/business-valuations/esop

Recent Podcast: ​https://www.youtube.com/watch?v=qjdFhVD2O10​

LinkedIn: ​https://www.linkedin.com/company/lakelet-advisory-group-llc/mycompany/