If you prefer to listen while you are on the road, click below!
Transcript
00;00;00;00 – 00;00;29;03
Mike
It’s like, Hey, I put this money in. Oh, my goodness, congratulations. It’s done really well. But the outcome is suddenly a big chunk. Your net worth is in one stock, and you don’t want to. You want to sell it to diversify. But if you sell it, you pay a big capital gains tax. And then the question is, well, is there a way to sell this stock and not pay huge capital gains tax?
00;00;35;00 – 00;00;46;18
Jonathan
Welcome to retirement today. I’m your co-host, Jonathan Birkeland. And with me as always, is Michael Reese, Certified Financial Planning Professional for over 25 years. And we’re having a great day, aren’t we, Mike?
00;00;46;21 – 00;00;48;24
Mike
Oh, my gosh. You know, we are.
00;00;48;24 – 00;00;53;00
Jonathan
We are. We’re having a good time having some laughs here in the studio before we get started. You know, it’s going to be good.
00;00;53;00 – 00;01;17;14
Mike
Yeah, that’s right. Hey, welcome, everybody, to the show tonight. And by the way, we’ve got some great I’ve got two great topics. Yeah. Yeah. Right. So this one we’re going to talk about tonight, the first thing we’re going to talk about is what do you do when you find yourself in, well, kind of the fortunate position of having, you know, maybe you work for a company.
00;01;17;23 – 00;01;41;13
Mike
You’ve been buying their stock or you were given stock options or something, and suddenly you find yourself having a ton of your net worth in one company’s stock and you’re sitting there, you’re like, oh, my goodness, I know, I know. I’ve got I got to do something. I can’t just sit here and have I can’t go into retirement having all my net worth in one company.
00;01;41;13 – 00;02;02;26
Mike
I mean, what if the company goes under this huge risk there? And so that’s a problem we’re going to talk about. How do you transition from that to a more diversified portfolio, but to do so in a very tax efficient way? Right. So that’s that’s topic number one. Right. Topic number two, this question we’ve been getting all the time.
00;02;03;11 – 00;02;13;13
Mike
And that question is, hey, Mike, I got all this money sitting in cash and the bank is paying me. How much, Jonathan Point?
00;02;13;13 – 00;02;13;24
Jonathan
Nothing.
00;02;14;15 – 00;02;28;28
Mike
Yeah, a lot of point. Nothing. So what options are out there where I can get a decent return? You get something on the money that I keep at the bank? Yeah, we’re going to talk about that, too. So those are two big topics.
00;02;28;28 – 00;02;31;00
Jonathan
Those are great. Those are pain points for people.
00;02;31;00 – 00;02;31;17
Mike
You like it?
00;02;31;17 – 00;02;32;12
Jonathan
I do. I do.
00;02;32;17 – 00;02;50;11
Mike
All right. So this all came up because about a week ago, I had a very nice couple come to the office. You know, they were listening to radio show like you are right now. And they had called in to get their retire, write report, which we provide for free for people who save some money, you know, saved at least 200,000.
00;02;51;00 – 00;03;16;17
Mike
Anyway, they call them and say, hey, we want this report because in their situation, they were both late fifties like I think 58, 59 or something like that. Yeah. And he worked for Apple and over the years he had bought Apple stock and here was their situation. He says, Mike, I feel both good and bad. Mike Well, what do you mean?
00;03;16;17 – 00;03;25;12
Mike
And he said, Well, I feel good because I have $2 million save for retirement. Oh, you feel good about that?
00;03;25;12 – 00;03;26;15
Jonathan
Yeah, absolutely.
00;03;26;15 – 00;03;29;27
Mike
Yeah. So that’s great, right? I’m like, sounds pretty good so far.
00;03;29;28 – 00;03;31;28
Jonathan
Yeah. What’s the bad part? What’s the bad part?
00;03;31;28 – 00;03;56;09
Mike
That’s what I said. So what’s the bad news? Because, well, here’s the thing. 1.5 million of it is in Apple stock that I’ve been buying in the employee stock purchase program over the years. And that’s all outside of his IRA, by the way. Wow. Right. Yeah. And his cost basis. But something like 300,000. So he’s got 80% gains.
00;03;56;15 – 00;04;16;27
Mike
He’s like, here’s my problem. I think he’s 59 in his wife of 58 and he says, hey, here’s my problem. I’m going to want to retire over the next few years. But I know it’s like, look, I know it’s not a good idea to retire. Yeah, I’ve got 2 million. But if one and a half of his in one company stock is, I know that’s not good.
00;04;16;27 – 00;04;21;06
Mike
Now, I feel blessed that the stock has performed so well.
00;04;21;07 – 00;04;21;17
Jonathan
Right.
00;04;22;14 – 00;04;43;01
Mike
But I need some help because if I like I. I asked him, I said, So what do you think is a reasonable amount of stock to hold in Apple? He said, Honestly, if I have $2 million total and maybe I own 500,000 in Apple stock, that’s cool. But I don’t think I should have more than that. And in fact, because I’m kind of that’s why I’m here.
00;04;43;01 – 00;04;44;08
Mike
I’m like, hoping you’ll tell me.
00;04;44;08 – 00;04;46;03
Jonathan
Yeah. Yeah, right.
00;04;46;25 – 00;04;55;28
Mike
And in any event, his problem was he goes, How do I sell this million dollars of Apple stock that is 80% gain and not get hammered on taxes?
00;04;55;28 – 00;04;59;02
Jonathan
Yeah, IRS is just rubbing their hands together, getting excited over there. They might.
00;04;59;02 – 00;05;07;08
Mike
Even be drooling like, you know, I’ve got my dogs every time I go to feed my dogs, you know, they get real excited and they start to realize that that’s like the IRS right here.
00;05;07;08 – 00;05;08;04
Jonathan
Right? Absolutely.
00;05;08;17 – 00;05;31;27
Mike
So if you did the math, like if you wanted to sell $1,000,000 of stock, but it’s 800,000 of capital gains, that’s going to hit him at about 23.4 in today’s world. 23.4%. Yeah, I don’t have my calculator in front of me, but I’m going to tell you, that’s close to $200,000 that he has to give the IRS if he would do it all at once.
00;05;32;19 – 00;05;43;25
Mike
Right. And if you do it over time, it’s still going to be close to that number. So and his position was, I don’t want to give the IRS 200 grand.
00;05;44;15 – 00;05;44;29
Jonathan
Fair enough.
00;05;45;10 – 00;05;50;22
Mike
Now, I don’t know about you, Jonathan. Would you be excited about writing a check to the IRS for $200,000?
00;05;51;03 – 00;05;53;18
Jonathan
That’s that’s painful. That is painful.
00;05;53;18 – 00;06;23;15
Mike
Yes. As I don’t think so. Right. What was that TV show? It was a home improvement where Tim would say something and his partner, I think Al would say, I don’t think so, Tim. Yeah, same thing here. I don’t want to write a check to the IRS for 200 grand. I mean, I get it. So his question for me was, are there any tools, are there any strategies that we can employ to it?
00;06;23;16 – 00;06;44;27
Mike
Maybe not all at once, but could we how do we transition that million dollars in Apple stock into a more diversified approach? Mm hmm. He goes, look, I’m not going to retire for, you know, three or four years. Is there a way to do it over that time or over at least some period of time where I don’t get hammered on taxes?
00;06;45;25 – 00;07;06;15
Mike
And, hey, the good news is because we are big at tax planning here, right? The company I work with, my company is called Centennial Advisors and we’re really good at tax planning. We do a lot of tax planning. And I was able to tell him, I say, hey, the good news for you is there are certainly ways to help fix that problem.
00;07;06;29 – 00;07;29;29
Mike
Well, and so what I want to do tonight is I want to talk about that a little bit. What do you do? You’re like, you know, maybe you’re like this guy. You’ve got a lot of money in some individual company. And heck, I had another guy. He worked. He worked at a company called Logitech. Mm hmm. Right. Made he was given a lot of stock options.
00;07;30;14 – 00;07;41;02
Mike
And when he left there, he left with basically he had, like, over $1,000,000 in Logitech stock and his cost basis was almost zero. Oof! I mean, it’s crazy, good.
00;07;41;02 – 00;07;41;24
Jonathan
And bad again.
00;07;41;24 – 00;07;43;14
Mike
Yeah, but same situation.
00;07;43;14 – 00;07;44;00
Jonathan
Exactly.
00;07;44;00 – 00;08;03;22
Mike
Yeah. When you find yourself in a situation where you’re like, Oh my goodness, I have good news. I have a lot of money in one. I’ve done really well with one company stock. Mm. And it’s outside of an IRA because if it’s inside of an IRA you can sell with no tax consequence. It’s super easy.
00;08;03;22 – 00;08;04;11
Jonathan
Right. Right.
00;08;04;21 – 00;08;13;18
Mike
But it’s outside of an IRA. I’ve got, you know, you have a bunch of money in one company. Maybe it’s IBM. I have that come up.
00;08;13;19 – 00;08;14;24
Jonathan
Yeah. Yeah, that’s common.
00;08;15;02 – 00;08;44;10
Mike
Apple, we see that Google. What else have we seen? I saw Logitech, I saw. Oh, Texas Instruments was another one where you came across. Yeah. You have all this and you’ve it’s like, hey, I put this money and all. My goodness, congratulations. It’s done really well. But the outcome is suddenly a big chunk of your net worth is on one stock, and you don’t want to you want to sell it to diversify.
00;08;45;18 – 00;08;56;23
Mike
But if you sell it, you pay a big capital gains tax. And then the question is, well, is there a way to sell this stock and not pay huge capital gains tax.
00;08;57;21 – 00;09;00;07
Jonathan
Eliminate the pain points as much as possible?
00;09;00;07 – 00;09;23;22
Mike
Yeah. I mean, you’re going to pay some tax probably, right? Actually, there are ways to avoid the tax altogether, but they’re pretty convoluted. You probably I want to go to that extent right. And here’s the thing. What we’re going to talk about, the solutions that we’re going to talk about here, they really apply when you have over you need to really have over 500,000 in that one stock.
00;09;24;01 – 00;09;38;10
Mike
Okay. So if you’ve got hey, I’ve got 200,000 in one stock, is there a way to sell and avoid major capital gains? The answer is no, probably not. And there probably is. But it’s not worth the money or the expense. You pay more in the.
00;09;38;29 – 00;09;39;24
Jonathan
Process, in the.
00;09;39;24 – 00;09;53;04
Mike
Process than you would in taxes. And the reality is, if you’ve got 200,000 of gains somewhere, you know what’s a tax bill, maybe 20, 30,000, which still still stinks, but it’s not two or 300,000.
00;09;53;10 – 00;09;54;28
Jonathan
Yeah, right. Little more manageable.
00;09;55;13 – 00;10;15;18
Mike
So if you have over 500,000 in a stock and you’re saying, man, the stock’s done well, I love it, but but I don’t want to be going into retirement with this huge percentage of my net worth in one company. Mm hmm. That’s not a great idea. Last week I was talking about I had a couple very nice couple came into the office.
00;10;16;10 – 00;10;23;05
Mike
They had saved $2 million for retirement. They’re there. He’s 59. She’s 58. $2 million. You’re doing great.
00;10;23;05 – 00;10;23;19
Jonathan
Great job.
00;10;23;25 – 00;10;45;15
Mike
The problem that and he knew he’s like, I know I’ve got a problem here. The problem is that of his $2 million, 1.5 million of it was all in Apple stock. Mm hmm. And the cost basis was about 300,000. So this was after tax money? Yeah. It was like, you know, an employee stock purchase plan for the most part.
00;10;45;15 – 00;11;04;16
Mike
And then every time you get more money, Buy More Apple stock is doing so well. And yeah, good news. It did really well. Bad news. Now he wants to say, hey, I want to sell a big chunk of it and get more diversified, you know, to limit risk and manage risk, which is purp perfectly sensible.
00;11;04;16 – 00;11;05;13
Jonathan
Saying all the right things.
00;11;05;13 – 00;11;14;07
Mike
Yeah he goes the problem I have is I’m going to owe a boatload of tax. Yeah. And so how do I avoid that, you know, legally now of course. I mean, it’s.
00;11;14;07 – 00;11;15;00
Jonathan
Not like always.
00;11;15;00 – 00;11;45;26
Mike
Yeah, everything we do is legal of course. And so one of the solutions that we’ve been using a lot for people in that situation is we take that portfolio, we take that Apple stock. Right. And we we hold it at, you know, a custodian like maybe Fidelity or TD Ameritrade. We say let’s put the stock there and then we calculate what’s called an annual tax budget.
00;11;45;26 – 00;11;55;26
Mike
We say let’s identify what a reasonable amount is of capital gains tax. You know, that we could pay each year to be palatable.
00;11;55;26 – 00;11;56;12
Jonathan
Okay. Right.
00;11;56;12 – 00;12;17;13
Mike
Okay, something like that. And then let’s say the number is, hey, I’m willing to pay, let’s say the numbers. Hey, I, you know, my budget says I can handle, oh, I don’t know, 20 or $30,000 a year off of tax. Sure. Right. So I say, okay, you’re number one, sell enough to and we’ll pay the 20, 30,000 of tax.
00;12;17;19 – 00;12;31;19
Mike
Right? Maybe the first year we do a little bigger chunk, you know, which is common, maybe will pay 50,000 more than a stock. You know, 50,000 tax will take it out of the stock account. You don’t have to come up with the money out of your pocket.
00;12;31;27 – 00;12;32;25
Jonathan
Right, right, right.
00;12;33;11 – 00;12;56;00
Mike
So we create that first year and we and once that money sold or the stock is sold, it goes to cash. And then what we do is we put it into we build a more diversified individual stock portfolio. So let’s let’s do some math here. He’s got $1.5 million. All right. Let’s imagine the first year we say let’s just take 200,000 of it.
00;12;56;13 – 00;12;56;23
Jonathan
Okay.
00;12;57;25 – 00;13;00;02
Mike
And we’re going to sell it to cash.
00;13;00;10 – 00;13;00;24
Jonathan
All right.
00;13;01;11 – 00;13;26;16
Mike
That’s going to create a tax bill of maybe $25,000. Right. So he had 200,000 cash. What are we going to do? 25,000 goes off to pay the IRS. At least 175. We take the 175 left over. We invest it in a more diversified portfolio of individual stocks. But then what we do is we start tax harvesting that. 175.
00;13;26;27 – 00;13;27;09
Jonathan
Okay.
00;13;27;16 – 00;13;42;28
Mike
Okay. So what that means is what does that mean? What it means is let’s say you buy like 50 stocks, so it’s more diversified than one stock. You buy 50. Jonathan, over the course of the next 3 to 6 months, are all 50 of those stocks going to go up?
00;13;43;10 – 00;13;45;01
Jonathan
Definitely in that. Are they all.
00;13;45;01 – 00;13;55;26
Mike
Going to go down? Probably no, not probably. Some will go up. Some will go down. So here’s what we do. Take the losers and sell them. Capturing a loss. Right?
00;13;56;03 – 00;13;56;13
Jonathan
Got it.
00;13;57;01 – 00;14;15;19
Mike
You take the money from the losers, reinvest in new stocks. But what did we do? We just captured a loss. Yeah. What can we now do? We can sell more of the Apple stock at, you know, whatever the losses, sell Apple stock at a gain. They offset each other. Boom, tax free district, you know, tax free apple sales.
00;14;15;19 – 00;14;31;20
Mike
So now we’ve got more money moving into the, you know, diversified portfolio, right? Three or four, 3 to 6 months go by, find more losses, sell those, cash out some of the apple again. Right. And just kind of keep that process.
00;14;31;20 – 00;14;33;10
Jonathan
Going, so on and so forth. Yeah, that makes sense.
00;14;33;10 – 00;14;55;24
Mike
So the idea is will there still is it now? Now, by the way, by doing this where we might initially say, man, it’s going to take like ten years to cash out all this stock with Apple. You know, it speeds the process up. We might be able to get, you know, get that Apple stock down to where we want it to be position wise and maybe, I don’t know, four or five years.
00;14;56;06 – 00;15;23;03
Mike
Right. And it’s they’re paying all the tax, like 200,000 tax like we were talking about before that the break. Maybe it’s only like 100. Maybe we cut the tax in half. Maybe we do even more than that. Maybe a little less than that. But the point is, you pay a lot less than the 200,000. So it’s a neat little way to legally manage a portfolio, do some tax harvesting to capture losses.
00;15;23;23 – 00;15;40;13
Mike
And at the same time, it allows us to move these concentrated stock positions into diversified portfolios, tax efficiently and more quickly. Right. Thank goodness for technology to help us, you know, handle it.
00;15;40;13 – 00;15;41;14
Jonathan
All right. Yes. Yeah.
00;15;41;26 – 00;16;01;26
Mike
But here’s my question. Who’s helping you do this stuff? You know, if you’re sitting there and you’re on, you’re sitting like like this couple came to my office. I I’m talking about this. They’re like, why doesn’t anybody tell us this? Yeah, yeah, right. Why doesn’t anybody tell us about this? Well, because most financial firms, they don’t pay attention to taxes.
00;16;01;26 – 00;16;06;19
Jonathan
Do they know that’s true? We have a lot of fun here in in segment number three here. Yes.
00;16;06;19 – 00;16;16;15
Mike
This is my favorite part of the show because this is where I get to be king for a day. Oh, my gosh.
00;16;16;15 – 00;16;17;10
Jonathan
And do we have fun?
00;16;17;10 – 00;16;18;08
Mike
Yes, I love this.
00;16;18;08 – 00;16;18;19
Jonathan
All right.
00;16;19;05 – 00;16;24;27
Mike
So every week I like to do this segment because just to get a little humor in here. Yeah.
00;16;24;28 – 00;16;25;27
Jonathan
And lighten up.
00;16;25;28 – 00;16;51;26
Mike
Yeah, I got it. I mean, I could talk about financial stuff forever, but, you know, we got to throw a little curveball in there. And so this is a segment where I pretend I imagine if I were king for a day. Right. You know, what are two laws that I might, you know, create? Yep. One might be a law on the financial side and another would be a law on the, you know, just general life.
00;16;51;26 – 00;16;52;04
Mike
Sorry.
00;16;52;04 – 00;16;53;17
Jonathan
Rest of the world. Yeah, yeah, yeah.
00;16;53;17 – 00;17;06;25
Mike
And and the idea is to, you know, there’s so many things out there that just annoy me. So I thought, you know, what the heck? Let’s create a segment where I can create laws to fix the problems that our world has. In my mind.
00;17;07;02 – 00;17;09;01
Jonathan
Yeah, yes, in my mind. Yeah.
00;17;09;11 – 00;17;11;04
Mike
All right, so here’s here’s number one.
00;17;11;22 – 00;17;12;10
Jonathan
All right.
00;17;12;15 – 00;17;25;22
Mike
So we’ll do the financial 1/1. It is tax season. India, right? Well, planning when I say tax season, tax planning for most of our clients. But if you extend your taxes.
00;17;26;00 – 00;17;27;03
Jonathan
Yeah, it’s still tax season.
00;17;27;03 – 00;18;03;00
Mike
It’s still tax season. And this morning when I came to the office, we extend taxes it this is crazy. So like I have my QuickBooks all completed, you know, for the year by like the first week of January. So you would imagine that our CPA could file our business taxes like right away. Well, the problem is he can’t because there’s a number of documents that you have to wait to get, you know, 1090 nines and what are called K ones and all these documents that the IRS creates in their complex world.
00;18;03;26 – 00;18;25;29
Mike
Well, we finally have them. So we’re essentially today I came in with all this this huge stack of documents, and we’re scanning them in so we can scan them off to our CPA. Right. And I understand that when you’re running a business that things can get a little complicated in especially my case when you’re running maybe two or three businesses.
00;18;25;29 – 00;18;51;01
Mike
Right. But it got me to thinking about just, you know, your average person. Right. And your average person is maybe they work, they’ve got W-2 income, right. You know, they get their employment income, maybe they’ve got a couple of kids or maybe they’re retired. You know, they’ve got, you know, nobody really itemize these days.
00;18;51;01 – 00;18;52;10
Jonathan
Now with the standard deductions, I.
00;18;52;10 – 00;18;53;23
Mike
Mean, given where that’s at.
00;18;53;24 – 00;18;54;01
Jonathan
Right.
00;18;54;12 – 00;18;59;16
Mike
You know, so you would think that taxes here’s what I think. I think taxes should be simple.
00;18;59;27 – 00;19;00;27
Jonathan
Ideally. Yes.
00;19;00;29 – 00;19;07;07
Mike
So I’m talking to one of my buddies who happens to live in Australia.
00;19;07;18 – 00;19;08;00
Jonathan
Okay.
00;19;08;12 – 00;19;26;02
Mike
And for whatever reason, I was, you know, bemoaning the complexity of our tax code. And his comment is like, man, that sounds crazy here in Australia, right? It’s like a flat number. It’s like you put in your income, there’s a flat percentage you pay on that income. And by the way, I don’t know if he’s correct about this.
00;19;26;02 – 00;19;50;10
Mike
I’m just relating what he said to me. And yeah, you just put in it’s like a postcard. You just dropping your income, dropping the tax rate, like I think he said it was 15% or something. And then whatever it is, it is. Yeah. And off it goes to, you know, the exchequer, whatever they call it, they’re right. And I’m thinking to myself, you know what, why can’t we have that?
00;19;50;10 – 00;19;54;10
Jonathan
Yeah, it’s simple. I’ve heard it is simple. A lot of the places too, like UK, for example.
00;19;54;19 – 00;20;22;13
Mike
Why, why can’t we just have a simple tax? Like, here’s how much I made, right? Forget about deductions. No deductions, right? It’s just income. And by the way, this is where like how do you account for capital gains, right? And all that kind of stuff. Here’s what I’m going to say. I think all income should be taxed at the exact same rate in my little kingly world here.
00;20;22;14 – 00;20;23;11
Jonathan
Income as income.
00;20;23;14 – 00;20;49;29
Mike
In income as income. I don’t care where it comes from. So income you get this much income and this taxed at a flat rate. But let’s make the rate like if with no deductions we can make like 15%, right? It’d be lower than current everything rate basically. Right. And then just boom, that’s what Washington DC gets. Right. And here’s the thing, here’s the thing.
00;20;49;29 – 00;20;52;24
Mike
No withholding allowed.
00;20;53;03 – 00;20;53;12
Jonathan
Oh.
00;20;54;09 – 00;21;06;04
Mike
And the reasons I want people actually having to write a check to the government every year so that they know what they’re really giving the IRS.
00;21;06;04 – 00;21;07;12
Jonathan
I like that, actually. Yeah.
00;21;07;16 – 00;21;16;16
Mike
Yeah. It’s not easier for people to do, but it’s like pretty soon people get sick and tired. Like, Why the heck am I send so much money? The IRS, these guys are bogus.
00;21;16;16 – 00;21;17;05
Jonathan
What am I getting?
00;21;17;07 – 00;21;31;02
Mike
You know, the government is a bunch of bozos. So anyway, that’s so I think simple, simple flat tax rate, income at that tax rate, no deductions. And you got to write a check to the IRS. How do we feel about that one?
00;21;31;14 – 00;21;33;19
Jonathan
I like it. I can’t find too many faults in that.
00;21;33;19 – 00;21;51;29
Mike
One, although I’m sure people say, well, what if I don’t have money and I didn’t save and all that? I understand. Yeah, all and I understand that’s never going to happen in the real world. It’s just me and my little, you know, reality. But for that, I’m going to go with it. So our our new law, simple tax rate, write a check.
00;21;52;11 – 00;22;03;04
Mike
And at this point, we can go ahead and rule that it is law. Okay. There we.
00;22;03;04 – 00;22;04;02
Jonathan
Go. There it is.
00;22;05;03 – 00;22;10;05
Mike
All right. My non financial rule, ruling.
00;22;10;16 – 00;22;12;13
Jonathan
Law I know you’re excited about.
00;22;12;13 – 00;22;13;13
Mike
This is related.
00;22;14;01 – 00;22;14;08
Jonathan
Okay.
00;22;14;10 – 00;22;21;11
Mike
It’s related. I mentioned a few minutes ago, I think that a lot of people in Washington DC are a bunch of bozos.
00;22;21;11 – 00;22;23;17
Jonathan
Yes. You always have kind things to say about that.
00;22;24;02 – 00;22;55;29
Mike
Well, you know, kind things like they are worse than pond scum. So here’s my idea. What if and I saw this I saw some commercial the other day where it was a guy was lying in his nose, grew like Pinocchio. I don’t know who it was for anything. I just remember seeing it. Yeah. Yeah. And of course, in my mind, I’m thinking, what if we could create some kind of cool law that would every time a politician lied?
00;22;56;08 – 00;22;56;26
Jonathan
Oh, boy.
00;22;57;08 – 00;23;02;10
Mike
Any time a politician’s representative in Washington lies.
00;23;02;23 – 00;23;03;12
Jonathan
Okay?
00;23;03;29 – 00;23;23;21
Mike
Any time someone in the news lives right, the media and whatever side of the media you listen to, any time they lie or misrepresent something. And here’s the best part, either knowingly or not.
00;23;23;28 – 00;23;25;11
Jonathan
Oh, okay. Okay.
00;23;25;12 – 00;23;26;21
Mike
Because you got to have a little fun with this.
00;23;26;21 – 00;23;27;00
Jonathan
Okay?
00;23;27;07 – 00;23;31;29
Mike
What the heck? I thought I was telling the truth. Yeah, their nose goes right in front of us.
00;23;31;29 – 00;23;32;25
Jonathan
Just like Pinocchio.
00;23;32;26 – 00;23;40;18
Mike
Just like Pinocchio. And so, like, if you’re a politician in office for, like, 50 years, like some of these people are, it’s like they wouldn’t be able to.
00;23;40;26 – 00;23;41;20
Jonathan
Hold your head up.
00;23;41;20 – 00;24;07;17
Mike
Your nose is so dang long. Right? And the bigger the lie slash misrepresentation firm, the bigger it goes. Can you imagine, you know, how they these politicians, they pull in people to to what do you call it? They go under oath in front of the Congress, like in front of a committee. Testify? Yes. They testify in front of the committee where these politicians, they don’t care.
00;24;07;23 – 00;24;13;12
Mike
They never listen to what this person is talking about. All they want to do is do a soundbite for.
00;24;13;19 – 00;24;16;01
Jonathan
Yeah, get their soundbite out there in the media, their personal view.
00;24;16;01 – 00;24;27;18
Mike
Yeah. 90% of the time the sample rates are misrepresenting things in some way, shape or form, right? So here they are on TV making that soundbite and boom, their nose is just starting.
00;24;28;07 – 00;24;30;06
Jonathan
To cut them off.
00;24;30;06 – 00;24;48;07
Mike
That change or like these news anchors. Right. Reporting whatever is in front of them and boom in those is because it’s not true. Wouldn’t that change how things are reported when they change how our politicians behave? I think so.
00;24;48;07 – 00;24;49;18
Jonathan
I think so. Yeah.
00;24;50;02 – 00;24;52;25
Mike
I just don’t know if we have the technology to make this happen yet.
00;24;53;00 – 00;24;59;01
Jonathan
Oh, that’s that’s some pretty intense medical technology there. Yeah. Although it would be neat. It would be neat.
00;24;59;01 – 00;25;20;05
Mike
We need like a little lie detector slash misrepresentation. BUZZER Oh, and there’d be a buzzer. You also have to have a buzzer like it’s hey, you know, I, you know, we’re going to do this or I can’t believe this or, you know, every time they make these statements, you know, like, hey, under this person, unemployment rose by 55% or something.
00;25;20;05 – 00;25;23;26
Mike
And like, bang, bang, bang, your alarms go off and the news starts growing.
00;25;24;15 – 00;25;24;28
Jonathan
Right?
00;25;24;29 – 00;25;25;22
Mike
Well, that’ll be cool.
00;25;25;22 – 00;25;26;03
Jonathan
Yeah.
00;25;26;03 – 00;25;47;25
Mike
The fact checkers, I think that would be a long yeah, I think that should be a law. So here we go. I’m going to go with this. Our new law with politicians and news people and politics, anybody who represents politicians, news people, the news media, you know those people because the news media, a lot of those people are much better than politicians.
00;25;47;25 – 00;25;56;18
Mike
Right. They’re just the talking heads. Again, I’m there are obviously exceptions to this, right?
00;25;56;19 – 00;25;57;11
Jonathan
Of course, there are.
00;25;57;18 – 00;26;07;21
Mike
Obviously high quality people in the political arena, high quality people in the news media. There are I mean, don’t please do not I’m not trying to paint.
00;26;07;22 – 00;26;09;15
Jonathan
Or write up any letter about pressure.
00;26;10;10 – 00;26;24;18
Mike
But we know how a lot of them are. Right. We all know that. So the rule is new law is that when caught lying, alarm bells go off and their nose goes right. How do you feel about that?
00;26;24;18 – 00;26;25;12
Jonathan
I just love it.
00;26;26;19 – 00;26;39;21
Mike
I’m just visualizing. This is so fun. All right. So with that, we will rule it. It is law. Okay, gang, we’ve had a little bit of fun.
00;26;39;29 – 00;26;40;21
Jonathan
That was fun.
00;26;41;14 – 00;26;47;13
Mike
We came across this the other day and I remember I saw it and my eyes just popped.
00;26;47;13 – 00;26;47;19
Jonathan
Yeah.
00;26;48;13 – 00;26;53;02
Mike
And I if you remember, I said, Hey, Jonathan, send me an email to remind me to talk.
00;26;53;02 – 00;26;57;08
Jonathan
About this immediately. We couldn’t do it right then and there, but we had to get get on it later. Yeah.
00;26;57;08 – 00;27;23;10
Mike
Yes. There’s something I said Jonathan. I sent me an email, so don’t forget about this. So historically I remember when I was a kid. I was a kid in the seventies, in the eighties and, you know, interest rates and were really high. Yeah. And whenever I walked into a bank when I was a teenager, there would be a sign like, you walk in the bank and here’s a sign.
00;27;23;10 – 00;27;45;16
Mike
These days nobody walks in a bank, right? We all do it online. But back in those days, there was a sign and the sign was titled C D Rates, right? So CD stands for Certificate of Deposit and the rates it would show, hey, for the neck. If you put money in a CD for three months, we will pay you 2% on that money.
00;27;45;16 – 00;28;12;12
Mike
If you do six months, it might be two and a half or you do it a year, you know, maybe it’s like 3% and so on. The longer the CD, the higher the interest rate. And my mother lived on these things, right? My mother, my sainted mother, she’s 85 and still kickin. She would go to the bank and periodically she would just put money in these CDs.
00;28;12;12 – 00;28;32;28
Mike
In fact, she would ladder them a lot of times. Yeah. Where she would say, hey, I’ve got, you know, 5000 in this one that matures in a year and maybe 5001 that matures in two years and maybe another 5000 matures in three years. And so every year it would mature. She just get another three year to get the higher rate.
00;28;33;07 – 00;28;54;20
Mike
And so every year she’d replace it with a one with mature, get another three year and so on. Right, right. And in those days it made a lot of good sense for money that you had in cash because they’re paying decent rates. Yet when, you know, ever, especially ever since 2008 when the rates went down about nothing. Right.
00;28;54;20 – 00;28;57;17
Mike
They their CDs have not made sense for.
00;28;58;04 – 00;29;00;04
Jonathan
I can’t tell you it’s almost a joke. Yeah.
00;29;00;04 – 00;29;02;20
Mike
Yeah. They’ve been so low and they’re still not that great.
00;29;03;04 – 00;29;04;23
Jonathan
Right. No, no, not really.
00;29;05;05 – 00;29;27;17
Mike
So what popped our eyes open? Well, the other day, you know, Jonathan, I was sitting in some meeting were kind of doing some research on something and we came across this. We’re like, Holy smokes, two day as, as we’re doing this recording. So by the way, you know, as we’re talking here, right? This is what’s available now. Yeah.
00;29;27;25 – 00;29;51;26
Mike
Now, I don’t know how long this is going to be available for. I don’t know if they’re going to take it away. I don’t know. I’m sure they will take away at some point. But right now, right now, today, this instant, you can get from an A rated insurance company, you can get something called a two year mega.
00;29;52;06 – 00;29;54;03
Mike
Mega you know, mega stands for.
00;29;54;19 – 00;29;56;19
Jonathan
Multiyear guaranteed annuity.
00;29;56;19 – 00;29;57;13
Mike
You’re so smart.
00;29;57;13 – 00;29;57;29
Jonathan
How about that?
00;29;58;04 – 00;30;26;09
Mike
So sells multi year guaranteed annuity. So what is a multi year guaranteed annuity in English? It’s a C, D, an insurance company. Yeah, that’s basically all it is. Right. So like, instead of getting a CD at the bank, it’s a CD and an insurance company. Right now, for two years, you can get guaranteed 3.5% per year and at the end of two years, so it’s 7% total.
00;30;26;09 – 00;30;33;26
Mike
At the end of two years, boom, you walk away, you’re done. So it’s like the old fashioned CD 3.5%.
00;30;34;14 – 00;30;35;14
Jonathan
That’s awesome. For two.
00;30;35;14 – 00;30;45;06
Mike
Years. Yeah, it’s incredible. Now I know what you’re thinking, Mike. There’s got to be a catch. There’s got to be a catch. What’s wrong.
00;30;45;06 – 00;30;45;17
Jonathan
With this?
00;30;45;17 – 00;30;57;00
Mike
What is going what is what is up with this? There is a catch. The catch is and as I did further research, it requires a minimum deposit.
00;30;57;08 – 00;30;57;19
Jonathan
Okay.
00;30;58;16 – 00;31;02;22
Mike
Any guesses as to what that minimum deposit might be?
00;31;02;22 – 00;31;03;03
Jonathan
Ten.
00;31;03;13 – 00;31;04;14
Mike
$10,000.
00;31;04;16 – 00;31;05;08
Jonathan
That’s my guess.
00;31;05;08 – 00;31;07;22
Mike
Okay. $80,000.
00;31;07;22 – 00;31;08;16
Jonathan
Really? Okay.
00;31;08;17 – 00;31;30;17
Mike
Yes. So if you’ve got a pretty good chunk of it works really well. If you’ve got a pretty good chunk at the bank, it’s $80,000 minimum. But for if you put in 80,000, you’re guaranteed three, 3.5, three and a half percent. You’re one three and a half percent. You’re too. And then boom, you’re done. You get your money.
00;31;30;18 – 00;31;48;09
Mike
Go do something else. Right now, I know what you’re thinking. Like, man, 80,000. Oh, man. Yeah, I don’t have 80,000. Okay, well, guess what? The same company. What if you have maybe 20,000?
00;31;48;10 – 00;31;49;02
Jonathan
Okay, there we go.
00;31;49;15 – 00;31;54;20
Mike
It between 20,000. 80,000, same two year count. They’re paying 3.3.
00;31;55;08 – 00;31;55;15
Jonathan
Oh.
00;31;56;01 – 00;32;47;25
Mike
You’re so yeah. So not much different now. So here’s the thing today. This is basically guaranteed. Guaranteed for two years. That’s it. Just two years. If you’ve got cash in the bank, $20,000 minimum, you can get 3.3% from an A rated carrier. And if you have 80,000 and above, it’s 3.5. So 3.3, 3.5, 20,000, 80,000 and thresholds. Now, when you’re starting to get to those numbers for such a short term, I mean, my gosh, suddenly this idea of CDs, it’s not a CD, but it’s basically a CD, an insurance company, suddenly they’re starting to make some pretty decent sense, right?
00;32;48;03 – 00;32;51;18
Jonathan
Yeah. Yeah. The rates popped up. That’s, that’s what we were surprised by, right? Yeah.
00;32;51;22 – 00;33;13;05
Mike
Yeah. Now, we did notice that five year rates are over 4%. Yeah, right. You can, if you want in there, much smaller like you could do like 10,000 minimum or something like that. Yeah. For five years you can get north of 4% and some people say, hey, if I’ve got cash that I’d love get over 4% for next five years locked in.
00;33;13;24 – 00;33;19;16
Mike
Hey, that’s you know, then we can be helpful there as well. I was just really surprised by the two year.
00;33;19;16 – 00;33;21;19
Jonathan
Yeah, yeah. For such a short time period to get that rate.
00;33;21;19 – 00;33;44;14
Mike
It’s nice. So here’s the thing. Let’s imagine you’re sitting out there and you’re like, Holy cow, I need more information. I might be interested in this. We can help you with that. All you had is give us a call. The number is 5128865850 and it is after hours. So that means when you call, you can get an answering service, right?
00;33;44;27 – 00;34;08;27
Mike
And they’ll set up a time where you talk to Jonathan. You call and say, Hey, Jonathan, I want to know more about these. You know, these my as they’re called him. Why g a multi-year guaranteed annuity. I want to know more about these megas. These are insured accounts, your principles, insured and protected and you’re guaranteed a certain rate.
00;34;08;27 – 00;34;32;19
Mike
So two years it’s either 3.3 or 3.5%. 3.3 requires at least 20,000. 3.5 requires 80. And then if you want to do more like four or five years, we have those available as well over 4% with a lot lower required deposit. So if you want to learn more, you just call us. So, Jonathan, what’s that number again?
00;34;32;19 – 00;34;44;16
Jonathan
Three. It’s real simple. 5128865850. Again the number reach out to us. 5128865850.
00;34;44;26 – 00;34;50;10
Mike
Yeah, I think that this is going to blow the phones up a little bit. Yes, I know.
00;34;50;10 – 00;34;50;29
Jonathan
And we hear.
00;34;51;02 – 00;34;58;00
Mike
Here’s the reality. I mean, think about there’s how many couple million people in the Austin area now.
00;34;58;00 – 00;34;58;23
Jonathan
Yeah, it’s crazy.
00;34;59;04 – 00;35;23;20
Mike
I’m sure, you know, hundreds of thousands are listening to Caleb Jay right now, right? Yeah. Yeah. And you’re probably out there like, holy cow, that that would be a very interesting opportunity. And we just help people kind of first come, first serve. That’s right. So we’ll do our best to get we’re probably going to get like dozens and dozens of calls, maybe more.
00;35;24;03 – 00;35;44;28
Mike
And so if you’re out there, you want to call us now, make sure, you know, first come, first serve. Let’s get you on the calendar so at least you can learn more and see if this is for you. I don’t hardly ever do this on the radio show, but it’s an opportunity that I felt would best serve the listening audience.
00;35;44;28 – 00;36;11;18
Mike
That’s right. I mean, where are you going to get three and a half percent a year for two years? Guaranteed insured account where it’s protected, right? Guaranteed. No, no. There’s no moving parts here. Right. It’s like a CD at a bank. Three and a half. Three and a half, or that’s for 80,000 or more. If you have 20,000 for two years, it’s 3.3 and 3.3 and then two years you can.
00;36;12;03 – 00;36;12;26
Jonathan
Do something else.
00;36;12;26 – 00;36;26;07
Mike
It’s super easy. Yeah. Now what if they had smaller amounts? Like what if you only have $10,000 and well, you can maybe do their four year, five year options and they’re earning over 4%.
00;36;26;14 – 00;36;27;07
Jonathan
Yeah, a little bit more.
00;36;27;10 – 00;36;40;19
Mike
In fact, I think the five years getting close to four and a half. Right. So again, these are the rates as we’re having this conversation right now. We don’t know what they’re going to be.
00;36;40;20 – 00;36;41;16
Jonathan
Who knows? Yeah.
00;36;41;29 – 00;37;05;08
Mike
That’s what’s available now. I don’t know how long they will be available for, so I know I can get it now. My best guess is we’ve got an insurance company or two out there that are saying, Hey, we have an opportunity to allocate some funds, we need to collect some dollars. And as soon as we collect a certain amount in these accounts, we’re done.
00;37;05;20 – 00;37;13;24
Mike
We see that happen quite a bit. And and so that’s that’s why I’m telling you, this is not something you want to kind of, you know.
00;37;14;03 – 00;37;15;05
Jonathan
Mess around, sit on.
00;37;15;05 – 00;37;27;15
Mike
Yeah, yeah. You don’t sit on it. So again, last time, let’s get that number out there. If you’re interested, call the number. Set up a time. Talk to Jonathan. Yeah, let’s see if we can help you out. What? What’s that number?
00;37;27;15 – 00;37;39;11
Jonathan
Just reach out to us at 512886 5850. Again, the number is 5128865850.
00;37;39;18 – 00;38;02;00
Mike
I make sure you call now. Let’s get you those great rates. All right, gang, that’s our show this week. Hope you enjoyed it. We will talk to you again next week.
