Should You Be Greedy When Others Are Fearful | The Retirement Income Show

Mark Elliot: Glad you’re with us today for The Retirement Income Show with the CEO and founder of Oak Harvest Financial Group, Troy Sharpe. You can always go to the YouTube channel, just search Troy Sharpe and Oak Harvest, subscribe. That’ll let when all the new ones come out. There’s no cost to that whatsoever. Questions you have in the financial world or the retirement planning world, Troy’s probably got a video or Chris Perras or Jessica, somebody’s got a video on it from the team at Oak Harvest. Certainly, check that out, and you can always go to the website, oakharvestfg.com, lot of great information on there as well. As Troy always tells you, be more than willing to sit down and chat with you and see if they can help, if Oak Harvest can help you. It’s got to be a two-way street, right? You’ve got to like them and want the help.

They’ve got to be able to help. Probably like you, because this is a long-term relationship, 800-822-6434. We’re talking about how do we plan for retirement in a bear market. We know that typically, at bear market, 20% down turn in the market is called a crash. Those typically happen every three or four years. Warren Buffet says, be fearful when others are greedy. Then he says, be greedy when others are fearful. What’s he saying?

Troy Sharpe: He’s simply saying that when the market is going well and everyone is happy and everyone wants to get in, that’s when you should be a bit reluctant, you should be reticent. You should be sitting there saying, “Hey, you know what? If everyone wants to get in, think back when everyone and their friend wants to start flipping real estate, that’s when you need to be cautious. That’s when you need to be very, very careful.”

Unfortunately, as human beings, our investing decisions, and this is primal, this is not logical, this is not rational. This is just how the brain is hardwired. There’s just simply no getting around it. You’re not special. You’re not different. This is just, as human beings, how we are wired. Now, there are things that we can do and steps that we can take to help protect us from ourselves.

Truth of the matter is there is what we call FOMO or fear of missing out when the markets are doing really, really, really well, but at the same time, or a lot of times, the underlying economic data is not nearly as strong as what the markets are or how the markets are performing. That creates uncertainty. You sit on the sidelines and you’re like, “You know what? I’m just going to wait for things to get better. I think this market’s going to pull back because the economic data or what I see on CNN or Fox News and these guys and gals, they’re talking about economic problems and they’re debating, and I don’t know who to believe.”

You have to tune that noise out. That’s why Chris Perras, our chief investment officer, he actually does a weekly YouTube episode called News or Noise. It’s about a five-minute segment where he talks about is this news or is this noise. In about 90% to 95% probably of what you hear on CNBC, Fox, whatever channels you’re watching, it’s noise. It’s simply noise. Their job is not to provide you hard data. Their job is to get you to tune in. That is their number one responsibility.

The more confusion and chaos and the more they make you– they stoke your emotions, the more likely you are to tune in the very next day, whether it’s fear or greed, but those are the two emotions that drive investing behavior of human beings. When we start to take a step back from that, that’s the first thing that we can do is I tell people all the time, “Look, turn off that garbage, turn off the noise. It’s not good for your health, first and foremost, but it’s definitely not good for your investing behavior.”

A second thing that we can do is please do not check your accounts every single day. From a behavioral finance standpoint, there, it’s been proven that when you have losses in your portfolio, they hurt substantially more. I forget the exact multiple, but they hurt substantially more than the joy you receive from when your portfolio goes up. There is an asymmetrical risk reward. If you can relate that over to emotions, good emotions, bad emotions. The second thing you could do is, please, just in the times like this, stop checking the portfolio every single day, you can’t do anything about it. The more you tinker, the more likely you are to cause problems and miss out on opportunities. Please just stop looking at it every single day.

The most important thing that I really truly believe you can do is you have a comprehensive, full-scope retirement plan. If you’re 50, or 55, or 60, or 65, or 70, you need to have something customized. You don’t want to go to one of these big brand stores, big box stores, and just fit into their box that they have 50,000 other people in this country in that same box. You want the box to be built around you.

Here is what’s important to you. This is what matters to you and your family. This is when you are going to retire, this is how much income you need. Maybe you need more in the first five, six years of retirement. Here’s your health situation. Here’s your spouse’s health situation. What are we going to do for long-term care? Where exactly are we going to get that income from? What makes the most sense for you when we extrapolate your numbers out into the future and we look at your IRA balances, your potential future RMDs, we look at potential healthcare costs, long-term care costs, Medicare strategies?

When we start to customize this box around you, and we have that full comprehensive plan in place that looks not only at your portfolio’s capacity to take risk, but your willingness, your income strategies, where are you taking income from, which financial tools, how much income will you receive from outside of your portfolio in a bear market so you can have less anxiety when the portfolio was going down, tax strategies.

We recently had a client. We were doing a financial planning case study for some of the new advisors. I train all the advisors here along with Jared. Jared’s actually our head of advisors. He trains them. I have more responsibilities, but I hop in every single week almost and I participate in this training to make sure that the message that I’m giving you on the radio, the advisors are conveying that to you when they sit down with you.

We actually had a case study recently where the gentleman had an advisor, and that advisor kept telling him, “No, keep going this way. Don’t worry about these Roth conversions. Don’t worry about taking money out of your IRA.” I told the advisor to go back and ask him, “Look, has your advisor ever run these tax calculations to show you in advance real numbers, let’s look at 5%, 8%, 10% growth? If you continue down that path that he is telling you to go down, what your taxes will look like in the future because of your required minimum distributions and how large they will be and how that will impact your social security income puts you into the IRMA brackets, which is an acronym for income-related monthly adjustment amounts. It’s increased to your Medicare premiums. Has he ever done that for you?” The advisor said, “No, Troy, we talked about that. He’s never done that before.”
As part of our process, when we go through this tax planning with clients, we show them, “Look, if you continue down this path that you’re either currently on, or your advisors is telling you to do, this is a range of scenarios that could possibly happen to you. Now, if we go this direction, while everyone’s zigging over there, we want to be zagging. If we go this direction, here’s a range of scenarios that could possibly happen.”

In this particular case, on average, there was over an $800,000 in potential savings. If they zigged instead of zagged, meaning if they went, the tax planning route is opposed to continuing down the path that their advisor was telling them to go and reassuring on a constant basis that they were going to be just fine.

Now, I don’t know about you, but that’s a whole lot of money, especially in retirement when a lot of retirees are afraid of running out of money. We’re not quite certain what taxes are going to be in the future. That’s what we want to do for you. If you don’t have a tax plan, if you don’t have an income plan, if you don’t have all of these components, the healthcare, the estate side of things, and also the appropriate risk tolerance, you don’t have a full retirement plan.

That’s what we do here at Oak Harvest Financial Group, and that’s what we want to do for you. You have to give us a call. You have to sit down with one of the advisors here, and first and foremost, we’re trying to see if you’re a good fit for us and you’re as well as you’re trying to see if we’re a good fit for you. If we both agree that we’re a good fit, we’re going to move on to a more deeper relationship where we begin the analysis. We start doing some modeling. We start showing you what could happen if you went various different paths in retirement. The goal is to put you into the best position possible that we can, based on the numbers, the data, also our insights and experience of doing nothing but retirement planning for so long, 1800-822-6434, Oak Harvest Financial Group. You can reach out to us through the web. You can reach out to us through email.

If you give us a call now, you’ll leave a message. We don’t have anyone working on the weekends. I want them home with their families, spending time. You simply leave a message. We do have caller ID, so we can call you back as if you don’t leave the message, and just give us your name, give us your information. We’re going to give you a callback.

Frank, who’s been with me for, I think, 11 years now, maybe 12. Just going to have a very casual conversation with you. There’s no pressure. There’s no sales. It’s just simply, are you a good fit? If so, we’ll answer your questions, and we’ll get to know you a little bit better, then Frank will get that on the calendar. 1800-822-6434. This is The Retirement Income Show, and don’t forget to check out the YouTube channel. Just go to YouTube and search Oak Harvest Financial Group, tons of videos for you to learn on your own time and get to know us better. We look forward to seeing you soon.

Mark Elliot: The Oak Harvest retirement process, you think about it. It starts with investments, income, you need income to be able to retire, tax planning, then it’s a health plan. What about long-term care? How are you going to handle that? What about estate planning? There’s a lot of parts to the retirement process and you can’t skip them. Troy and the team are here to help, and as Troy said, the number, 800-822-6434, more with Troy Sharpe. This is The Retirement Income Show back with more right after this.

Investment advisory services are offered through Oak Harvest Financial Group, LLC. Oak Harvest Financial Group is an independent financial services firm that helps people create retirement strategies using a variety of insurance and investment products. Investing involves risk, including the loss of principle, any references to protection benefits, or lifetime income generally referred to fixed insurance products, never securities or investment products.

Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Oak Harvest Financial Group, LLC is not permitted to offer and no statement made during this show shall constitute tax or legal advice. You should speak to a qualified professional before making any decisions about your personal situation. We’re not affiliated with the US government or any governmental agency. This radio show is a paid placement.