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Transcript

Mike:

If you’re not one of these super rich people, you have to understand your money. Probably isn’t managed the same as theirs. And here’s what I mean. It is all about the difference between what I like to call symmetrical investing versus a symmetrical investing. So of course that begs the question. What the heck does that mean

Zach:

Welcome to Retirement Today. My name is Zach Holcomb, and alongside me we have Michael Reese. He’s a certified financial planner, retirement planning expert, and founder and president of Centennial advisors located right here in Austin, Texas. Mike, how are you today?

Mike:

I’m doing great. And Hey, let’s go ahead and go on the record and say, I hope I’m at least starting to lose some weight because I’m doing this crazy thing called exercise. So we’ll see how that affects my life. See if, how it affects my energy level today.

Zach:

Right, I’ve never heard of her. Let me know how it goes. All right. So today’s show, I’m really excited about what we have to discuss here today. We’re talking about the three keys to financial prosperity, correct?

Mike:

That’s right. Three keys to financial prosperity. So what we want to talk about today, Zach is what are the three things you absolutely have to do? Like what do you have to do in order to enjoy true, complete financial security? Now I’m not talking about incomplete financial security. Like if you want to make sure that you are completely financially secure when you’re talking about how to do that today, and you know, what we find Zach is, you know, most people, you know, they have some financial security maybe, but it’s incomplete. Our job today is to talk about what are the three things you need to do for you to have complete financial security, no matter what.

Zach:

Right, so some people might be covered in one or two of these areas, but your point is you have to account for all three.

Mike:

Gotta account for all three. Very true. And I also want to talk a little bit before we’re done. We’ve got a really nice we called financial secure, the complete financial security blueprint. We’ve got a great blueprint. We’ve built to make it easy for people to figure out, Hey, what have they done well and what areas do they need to work on? And we’ll talk a little bit more about that later on as well.

Zach:

Cool, can’t wait to hear more about it. So let’s dive right in. All right. So the three keys, what’s the first one that comes to mind. All right.

Mike:

So here’s what I’m gonna do. Let’s lay these out all of them at once and then we’ll dive into each one. Okay. All right. So if you want complete financial security, here are the three things you have to do and they are not optional. You have got to do them. Number one, you have to manage your money effectively. And we’re gonna talk more about what that means in a little bit, right here on the segment. Number two, you’ve got to plan for taxes, right? You’ve got to keep more money in your, give less to the IRS. And, and I don’t know if you saw this. I know we’ll talk about this later in the show, but I see that in Biden’s new tax plan, he wants to make he wants to basically make Americans taxed at the highest rate in the world on capital gains. So, you know, we’ll talk about that. And number three, you know, you get your money managed properly. You get your taxes manage, but guess what? Sometimes things happen. They don’t expect. So you have to protect yourself. You have to have protections in place to make sure that you’re in good shape. If things happen that quite frankly, you didn’t plan on. Yeah.

Zach:

All three of those things seem pretty equally important to me. But I know we’re going to talk about managing your money properly first.

Mike:

Yeah. Let’s start there. So here is the biggest problem out there. And I see, you know, Zach, we see this every day and I mean, every day, and this is because it is a big problem with the financial industry. So let’s start here. Let’s imagine you are super wealthy. You’re I mean, you’ve got tens of millions of dollars, hundreds of millions of dollars. Like you’ve got some serious

Zach:

Money. I like thinking about this already. Yeah.

Mike:

You win the lottery, right. Yay team. Anyway, the point is you’ve got a lot of money and because you have a lot of money, you are able to work with the very best investment advisors in the, like in the country, in the world. Like you have access to the absolute best 1%, right? Yeah. You need to understand if you’re that person, your money is probably managed very differently than everybody else out there. Right. So as you’re sitting there listening, maybe you’re driving the car and you’re stuck in traffic. It’s Austin. We have traffic again. Maybe you know, maybe you’re at home, you know, wherever you are. If you’re not one of these super rich people, you have to understand your money. Probably isn’t managed the same as theirs. And here’s what I mean. It is all about the difference between what I like to call symmetrical investing versus asymmetrical investing.

Mike:

So of course that begs the question. What the heck does that mean? Right.

Zach:

Pretty interesting concept.

Mike:

I mean, I can barely pronounce symmetrical and asymmetrical sometimes. I mean, but so what does it mean? What is a difference between these things? Well, here’s what it means. This is how 99.9%, by the way, I haven’t, I guess I shouldn’t use a percentage without having actual data to back it up, but it seems like 99.9, 9% of people we talk to are investing symmetrically. So what does that mean? Here’s what it means. It means that if you go back in time, if you look at your portfolio, how your money’s invested and you say, well, how much might I make when in a good year, when the market’s doing really well, and then you look and say, well, how much might I lose if the market’s doing really poorly, like say in 2008, those numbers are really close to the same number.

Mike:

So a balanced investor today, you know, to give you an example, if someone is a stereotypical balanced investor, he might say, Hey, I’m diversified. I’m balanced. Yay. I feel good. Here’s reality. Reality is this. If the markets do really, really well, you might make as much as say 25% in a really good year. That sounds great. Yeah. We’re going to be, nobody’s mad at their advisor when that happened. Right, but in a really bad year, you could lose 25%. So in other words, the amount you make in the amount you lose are really close to the same number that is symmetrical investing. And there’s not a chance in the world a wealthy person would accept that, right? Or a hedge fund, or like a big institution or a foundation or an endowment like big money? They would never accept that yet. Everyday Americans have that happening all the time.

Zach:

So just to briefly recap, symmetrical investing your general investor, who is in a balanced portfolio, they’re symmetrically invested this way.

Mike:

Yeah, they might make 25% in a good year lose 25% of bad. And here’s the problem. Nobody remembers the bad years because we haven’t had one in forever. Right. Right. Now, how does that compare with asymmetrical investing? Asymmetrical investing means the wealthy person in a bank – and their balanced portfolio. If the market does well, they may make 25% just like you. Right? And that’s, so they’re no different really there, but in a bad market year, instead of losing 25%, they might lose five or 10% at the most, never more than 10. So in other words, asymmetrical means that, you know, a good year plus 25 and a bad year minus say seven or eight, those are not the same number. My opt- my, my opportunity of loss is very small compared to my opportunity for gain. So what does that really mean to you? Let’s say you’ve got a million dollars and you might have more, you might have less, right?

Mike:

So I’ll just use a million. Cause it’s around. Figure. If you invest a million dollars in a balanced portfolio, if the market is a bad year, you could lose 250 grand. I don’t want to lose 250 K. Yeah. And you probably don’t even realize you could. What about a wealthy investor? They, if for the same million dollars, a bad market year, they might lose 70,000. You’re losing two 50, they’re losing 70,000. That’s $180,000 of risk that you’re taking on. You’re investing that quite frankly, you don’t need to write. It’s just not that hard to invest asymmetrically. Here’s the problem, the big financial firms, they just don’t care. I mean, let’s be honest, unless you have like 10, $25 million. They really don’t care about you. You don’t have enough money to really, for them to really pay attention to. So they just put you in just kind of cookie cutter portfolios and the way you go, right.

Mike:

And they just, Hey, everybody lost 25% this year. That’s everybody, nothing you could do about it, which is pure BS, pure BS. Yeah. Asymmetrical versus symmetrical investing. Where are you? Are you taking on more risk than you have to? That’s really the key question. If you want complete financial security, you invest a symmetrically, you limit the loss, but you let your gains run. That’s what you do. You limit your loss, but you let the gains run. The question is whether you’re investing the money yourself or whether you’re having someone help you, are you truly investing in asymmetrically or are you investing symmetrically now that kind of brings up our blueprint that was talking about earlier. Right? Tell me about that. So we’ve developed, this is really, I mean, my goal is this. I want to provide for you the easiest path to complete financial security.

Mike:

That’s our mantra. We want to provide the easiest path to complete financial security. And so I figured, how do you do that? Well, step one, let’s create a blueprint and let’s make it simple. One page, one page blueprint. What it does is it looks at each of these three areas that we’re going to be talking about today, managing your money, managing your taxes and making sure you’re protected against, you know, the unknown here. We’re talking about managing your money on this one page blueprint. We can very quickly, very easily show you. Are you investing symmetrically or are you investing asymmetrically? Which way are you investing? Are you taking on risks that you don’t have to take? Like who would want to do that? Why would you take on risks if you don’t have to take, if you don’t have to. I mean, it’s just kind of silly, right? We want your run. Well, when the markets are running well, but limit your risk. And so what we’re going to do for the first 10 callers, if you give us a call and Zack, you’re given a number here in just a second, give us a call and we will provide that one page blueprint for you. Absolutely for free Zach. I know we’re running up against the clock here. What’s the number to

Zach:

Get this free blueprint. Give us a call 5 1 2 8 8, 6 58 50. Again, that number is 5 1 2 8 8 6 58 50. Hi, and thanks for checking out retirement today. If you like the content we share on our channel, make sure to like comment and subscribe. So you can say notified about all of our latest content and videos. Be sure to share all of our information with your friends and family as well. Thanks for joining us. We’ll see you next time.