Advisors on Call

Advisors on Call Podcast Episode 3 | The ABC's of an Estate Plan

Mon, 06 Mar 2023 18:11:23 GMT

Taking control now of how your wealth and financial affairs will be addressed later could greatly reduce any issues and frustration for your loved ones.

FULL TRANSCRIPT

Announcer: [00:00:01] You're listening to Advisers on Call.

Cheryl White: [00:00:07] Thank you for tuning in to our podcast. Advisors on Call with Greg Ramirez, Wealth Manager and CEO of Advisors on Call. I'm Cheryl White. Greg, this week let's talk about estate plans. We talk often about needing an estate plan, but what exactly is it and what comprises an estate plan?

Greg Ramirez: [00:00:28] Well, basically what comprises an estate plan is a trust. And then within the trust, there's three components. So first, you're going to have your powers of attorney for financial. Then you're going to have your powers of attorney for health care. Then you're going to have a pour-over will. Now, that consists of a trust, a part of estate plan, because what you do is your trust covers your major assets, it covers your homes, covers your 401(k) plans, your savings, any investment accounts that you have. Then when you get into the powers of attorney, now you can actually have two different powers of attorney. One power of attorney is going to be in charge of your financials. So should you become incapacitated where you can't do two of the six activities of daily living or a doctor would say, you can no longer make decisions, then you would have someone appointed as your power of attorney for financial. You need to know this the power of attorney that you have for financial. When you pass away, that power of attorney goes away. The power of attorney that has more power than that is called the health care directives. Now, the health care directives don't do anything financially, but what they take care of is your health care decisions. Do you want to be on a respirator? Do you want to have extended medicines if you're terminally ill? What decisions did you make? Depending on the decisions that you made that person who has your health care directives will carry them out.

Greg Ramirez: [00:01:40] Now, those powers will actually go even once you pass away, because once you pass away, how do you want to be buried? Do you want to be cremated? Do you want to be buried? Do you want to have a non-denominational burial? Do you want one that's involving with being Catholic, Christian, Buddhist, Islamic, whatever your religion is, the person that has the health care directives are going to make the decisions that involve anything that would be once you pass away. Are you going to have a casket and where is the event going to be? So all those things is what the person with the health care directives does. They control where the body goes. I mean, seriously, they do. And then the last component is the pour over will. So basically a pour over will is, let's say, for example, there's a family heirloom, maybe an old clock or maybe your grandfather's watch. Those are going to be put in the power of a will so that any small trinkets can be going to the people that they want that are supposed to get those.

Cheryl White: [00:02:32] Oh, I see. Okay.

Greg Ramirez: [00:02:33] And that's it. You know, now obviously there's more components to estate planning because the other question is when you have an estate plan, do you have life insurance? What kind of trust is it An A, B trust? It's a trust. And trust is an irrevocable trust. There's also trusts for people with special needs. There's many different types of trusts. So depending on what your needs are, you're going to have to see an expert for that. Now, I do want to say I myself, I don't practice law in regards to that, but we have referrals that we can send you. But I've been doing estate planning for a long time, and it's very important for you to have a trust. The reason why it's important because the decisions that you make in the trust are the decisions that your trustee is going to have to carry out for you. So what I suggest, folks, if you don't want to be on a respirator, if you don't want to be an organ donor, put those things in writing before you get sick because someone else is going to make those decisions for you and don't have the estate. Make the decisions. You make the decisions. You be in control.

Cheryl White: [00:03:27] Greg What happens if you have a sizable estate but you have not put together your estate plan?

Greg Ramirez: [00:03:34] Oh, well, first of all, you're going to have probate and lose up to as much as a third of the estate in probate. So it's very important people put beneficiaries on. Let's say, for example, you don't have a trust. You make darn sure that on your home you have another person on that deed so that when you go, that other person can get it. Number two, you have accounts. You want to have accounts with joint rights of survivorship so that when you go, the other person gets it. Or you can have what's called a TOD, which is a transfer on death. Once you pass away, the other person inherits. Because anything that you don't have a beneficiary on can go to probate. And the biggest issue that I've seen is I'll give you an example. I had a family that the father and mother passed away in different years. The house was owned free and clear. The son didn't get to update it. So now the son had to go through probate. Now the good thing is we found the pour over will and it was in the trust, so we were able to accept it. And the good news is he didn't have to pay all the probate expenses, but if he didn't have that trust or the pour over will to show that it was done but it wasn't put in there, he would have had to pay a substantial amount.

Cheryl White: [00:04:38] What happens with divorce or, say, a death of someone that you've listed as a beneficiary and you should have changed it, but you didn't? Is it just locked in?

Greg Ramirez: [00:04:48] A couple of things. If that person is dead and doesn't have any next of kin, then it would go to probate. However, if they haven't executed, let's say, for example, you were married and you and your ex-wife had kids and the kids would inherit it. Or let's say they got remarried again and then she was married to the other person at the time. But she was dead. Then he would get it. So unfortunately, you want to make sure that you make those changes to the beneficiaries.

Cheryl White: [00:05:14] And that's why you get together on a regular basis with your clients to go over these things and make sure that they are up to date.

Greg Ramirez: [00:05:22] Yes, at least annually. You want to go over it because sometimes you change your mind. You don't want to have that beneficiary and sometimes you may want to go back to who you had originally. You can change your beneficiary as much as you want. But remember this, folks, there's two types of trusts. You have a revocable and irrevocable. If you're someone that's going to constantly change your mind, you do not want to get an irrevocable trust because once you make a trust irrevocable, you cannot make the changes. And it's done. Okay? It's as-is until you die. If it's a revocable trust, you can change it every month if you want to.

Cheryl White: [00:05:52] But why would you want one that you can't change?

Greg Ramirez: [00:05:55] Because sometimes as you get older you can be taken advantage of. And if you did something as an irrevocable trust, when you're in the right state of mind, nobody can give you the undue influence at that time when you're vulnerable.

Cheryl White: [00:06:08] Well, that makes perfect sense.

Greg Ramirez: [00:06:10] Less expenses and less trials, less stress to the person. That is the trustee that has to worry about it. I have a personal experience with it. And probably one of the biggest regrets that I have is I have an aunt and I had her get a revocable trust. And the reason why I did that is I wanted no one to think that it was undue influence. She was very close to me, but I regret it because I had an uncle that came in and basically took her assets while she was at stage four cancer and in hospice when she was at home and everything was done behind my back. And because of that, had there been an irrevocable trust, but they were stupid enough not to do anything. They left everything in the trust. Eventually they paid the price, but it was very expensive. Took five years of deliberation in court. Save yourself that time.

Cheryl White: [00:06:49] I think that story probably resonates with a lot of people because people change when there's money on the line, don't they?

Greg Ramirez: [00:06:57] Oh, yes, they do. And any amount doesn't matter. You'd be surprised, right?

Cheryl White: [00:07:02] Hey, is there any way to minimize the tax on your heirs, The people you leave the money to?

Greg Ramirez: [00:07:08] Yes. You can buy life insurance. That's one way to make sure that your heirs are going to get more money. If you have multiple properties involved, then you may want to look at maybe having some LLCs. You may want to look at having corporations. These are mitigation strategies that we need to talk about. It's not something that I can just overall say because every situation is going to be different. You want to make some of the people part owners because that helps too, because then you have a step up in cost basis. But again, you'd have to call us so that we can talk about the plan individually with you. I don't want to be general and make it seem like it's easy when it's not.

Cheryl White: [00:07:39] What sorts of things, documents, would someone have to pull together? Do you have a checklist?

Greg Ramirez: [00:07:44] Yes. Well, first of all, do you have a trust? If you have an old trust, do you have an updated splintered in? If you don't, some people may have a pour over will bring in your accounts, bringing in all your statements, you know, the real estate that you own. How is it titled bring all that stuff in so we can evaluate for you and then tell you what we need to do. And that's just a starting point, folks, because the first part is trying to put together a plan. But we can't put together a plan unless we know all the assets you have. And don't be shy. You know, one of the biggest things I see is that I hate when people hide the ball because we're not going to be able to help you if you don't show us all your assets. And the only person that you're going to screw is yourself or your estate or your heirs. Show us everything we have. You know, we're not here to gather all your assets. And I understand if you have another advisor that you want to work with, but you want to work with some of the assets. I understand that. But let us know, because if we know everything that you have, it's easier for us to work with you so that there won't be a problem in the future in terms of your estate and what taxes are paid.

Cheryl White: [00:08:37] It is kind of natural, though, isn't it? You're revealing yourself, you're exposing yourself, you feel so I guess part of it is trust, correct?

Greg Ramirez: [00:08:47] I had a client, I call him Client 001. It took years for him to show me everything that he had. Literally for seven years. He would always come up with a different account. Oh, Greg, I found this old passbook. You think it's still active? Oh, Greg, I had this annuity I didn't tell you about, and it was comical because I'm like, What is he going to show me today? And then finally, after the seventh years, you know, Greg, my cupboard is bare. You took it all. I understand it takes time, but, you know, the one thing that client told me, he said, you know, Greg, because you're one of the only advisors that's ever made me money because I've been through a lot of people. He says, But you actually made me money. I appreciate that.

Cheryl White: [00:09:24] That is quite a compliment and endorsement. Yes. So thanks, everybody, for joining us for our podcast today. Advisors on Call about estate Planning. There's much more to it, of course, And if you would like to talk with Greg about the different components of an estate plan and how to put one together for yourself and your estate, you can call (562) 269-1007. That's advisors on call.

Announcer: [00:09:50] We know life is busy, but any time you have a question about your retirement, drop us a message online at advisorson.com. Investment Advisory services are offered through Greg Ramirez at Advisors on Call, a state registered investment advisor. Advisors on Call in this radio station are not affiliated. The investment ideas and financial vehicles discussed here should not be considered personalized investment advice, nor are these recommendations to buy or sell any particular investment or product. And the information you hear should not be considered tax or legal advice. Individuals should first consult with competent tax, legal, accounting and other professionals regarding the applicability and suitability of any investment ideas. Certain investment ideas contain substantial risk, are illiquid and may only be appropriate for accredited investors. Past performance is not a guarantee of future results. All investments will fluctuate and when redeemed, may be worth less than when originally invested. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company. None are offered or sold through Greg Ramirez and Advisors on Call. Comments regarding a particular client's experience may or may not be the same as another client's experience. Do not guarantee future investment success and should not be indicative that any client or prospective client will experience the same or a higher level of investment performance.

Advisors on Call Podcast Episode 2 | What Makes Annuities So Attractive Right Now?

Mon, 27 Feb 2023 21:52:37 GMT

This overview on annuities might open your eyes to a way to grow your retirement assets while protecting your portfolio against market volatility.

FULL TRANSCRIPT

Announcer: [00:00:01] You're listening to Advisers on Call.

Cheryl White: [00:00:04] Hey, this is your podcast for the financial and retirement information you need to live the retirement you deserve. On our podcast today, annuities, what they are, how they work, and are they right for you? Before we dive in, a reminder that if you have a subject you'd like for us to talk about on the podcast, reach out to Greg Ramirez anytime at advisorsoncall.com. I'm Cheryl White with Greg Ramirez. And Greg, there are certain words that we hear so much about that we think we know what they mean, but if someone asks you to define it, you might realize that you don't. And I think annuity is one of those terms, so if it's okay with you, can we just start at the beginning? What is an annuity?

Greg Ramirez: [00:00:48] An annuity is basically a tax-deferred vehicle that allows you to put money away. So, for example, let's say you have $100,000. You can put that money away. That money is going to earn interest on a tax-deferred basis. So at the date that you decide to take that money out, you can either take it out as a lump sum. But however, you don't want to do that because let's say it's been in there for ten years and let's say the 100,000 turns into 200,000. If you were to take that money out, you're going to have $100,000 taxable income. So normally what people do and this is something that's not discussed very often, is people do what's called annuitization because annuities are basically like a supplemental form of a pension, and that's how they should be used. And a lot of times today they're not really used that way. They are in a way, but they're not. So I'll explain that. So what should be done is you can take that annuity and take that 200,000 and let's say you want annuitize it and you want to be paid out for a period of five years, ten years, up to 30 years, that will give you a stream of income guaranteed. So let's just say 200,000 divided by ten, you're going to be getting $20,000 a year. And out of that 20,000 per month, you're going to get $1,667.

Greg Ramirez: [00:01:59] Now, the beauty of that is that as you spread it out over ten years, you're only going to pay about $10,000 in income tax because the amount that you invested, it gets stretched out over the period that you choose. Now that's the easiest option. That's called the period certain. There's another one called a life option where you basically can take a stream of income based on your life. Now, what this is based on is they take based on your life expectancy, so the older that you can annuitize, the more money that you're going to get from the insurance company. I have in the past seen people that are in their 70s and 80s want to get an annuity and then they want to annuitize it. Now, the problem is that the companies force you to wait five years before annuitization. In some cases they've raised it to ten years. So if you're thinking about doing a strategy like that, the older that you are, the more money you're going to get because it's based on life expectancy. So if you're 80 and let's say you're a male, you have about seven years left, you're going to be getting a lot of income. But the problem is that when you choose a life option, when you die, it doesn't go to anybody else. So you're gambling with the insurance company.

Cheryl White: [00:02:58] Take me from the very beginning, say I have $200,000 and I'm considering an annuity. What are my options?

Greg Ramirez: [00:03:06] There's many different types of annuities. The simplest annuity is called a fixed annuity or a multi-year annuity rate, which is called a MYGA. So what that means is currently right now in this interest rate environment, I can get you the highest mica that we have is 5.8%. So I can get you a four-year annuity at 5.8%. So what that means is your 200,000 is going to be making 5.8% guaranteed. And I can say that because remember, folks, we're talking about insurance right now. It's a guaranteed rate. It doesn't change. Every year you get at 5.8% and it's going to compound. So you'll be making $11,160 and then that compounds. So in four years, you're probably going to make close to about 60 grand. So when the four years are up, the amount is going to be worth $260,000 because it's compounding. So at that four-year mark, you have an option to either take the money out because the surrender period is over with, which meaning the time that it had to be in there. Number two, you can annuitize it. So if you chose to annuitize it, you can choose a period certain a life option. There's also a life option with refund or a life option with a period certain, which means you would get money back if you died within the period of time. But most people don't use annuitization options. I think they should use them because I think they're very good to have. What companies do though, is they offer guaranteed income riders where you get guaranteed income and those are very gimmicky. They're like annuitization options. But I think you're better off doing an annuitization, to be honest with you.

Cheryl White: [00:04:33] I think I understand now. So say that $200,000, it is illiquid. Then for a period of time it is locked in, not illiquid.

Greg Ramirez: [00:04:42] You can take 10% out per year. You can get 10% plus the interest out a year. And it depends on the annuity product that you have. But when you're dealing with a MYGA--a multi-year annuity--the investment is guaranteed for the four years and you're getting that interest rate. Now there is another one separate from the MYGA, and that's called a fixed indexed annuity. Now the beauty with a fixed index annuity is that it allows you to have the option to have a fixed rate, but you can also get into the market and you can get into the S&P 500, maybe you can get into Nasdaq, you can get into the Dow and they will give you a participation rate. They will allow you 100% participation into the Dow, but then they give you a cap rate. So I'm going to explain to you the difference. So participation rate is how much you get to participate, whether you pick the Dow, the Nasdaq. So if they give you 100% participation, whatever the market returns, you get to 100%. But then this is where they get you. There's a cap rate. Most of these companies cap you at a return of about 10% or 14%. Now, in this present environment that we're in right now, in 2023, the cap rates are very attractive. The average cap rate is about 14% to as high as 25%. If that particular index, the Dow, the NASDAQ, S&P 500, S&P 100, if they return 20%,

Greg Ramirez: [00:05:53] if you have a cap rate of 14%, you're only going to get the 14. The company keeps six. That's how they get you. But right now, the incentive that they want you to invest is they have high cap rates. In addition to that, they also have a fixed component. Current interest rates right now are 5%. So you can get into that product, it's 5%. The minimum you'll make is 5%, but you have the upside. So you really don't have a downside and that's a fixed indexed annuity. And then you have riders too. There's the income riders. That's another podcast that we'll talk about, the different types of riders that they can put on. There's death benefit riders. There's a lot of different things that they can put on there. There's buffers that they can put on if you want to bet against the market. And different companies have different things. It depends what you're looking for. So after a fixed indexed annuity, the next annuity that you have is a variable annuity. Now a variable annuity is basically an annuity that is variable based on the market. You have separate accounts, remember separate accounts in a variable annuity work like mutual funds, but they're called separate accounts. They're not called mutual funds. It allows you to participate. And the variable annuity basically allows you to participate in all different indices. If you want to go with a technology, you want to go with health care, you want to go international, you want to go global, you want to go with resources in regards to gas and oil.

Greg Ramirez: [00:07:07] They have a lot of different indices that they cover. You want to bet that the market is going to go short. They can have inverse to Dow, inverse the Nasdaq, they have two times the Dow if the Dow is up. Now, the other thing I want to explain is that when I'm talking about annuities, there's two types. Here at Advisors on Call, we have advisory annuities. What that means is that we charge you a fee to have the annuity. However, your money is 100% liquid. Now, for some of you that don't like to pay fees, we have the traditional annuities where if you get into the annuity, you're going to be stuck into a five, 7 or 9 year time period. So depending because some people don't like to see the expense ratios taken out, we can do what's called a transactional one. You still get the same benefits. However, it's not liquid. Like right now, a lot of my advisory clients, I'm moving their money to the advisory news because I can give them a flaw guarantee of 5%. I can't do that if I keep them on the advisory accounts. So those are the differences between the annuities. Now I can talk about the different riders on all of them, but I think I've given a lot of information.

Cheryl White: [00:08:06] You have, and I think you've cleared up a lot about annuities today, too, because again, it's something that we hear about, but it's just one word annuity without explanation.

Greg Ramirez: [00:08:16] Yes. Now you can also get an annuity with long-term care. And that's a whole different ballgame. It's a fixed annuity. However, if you get sick, it becomes long term care. And normally what they do with that annuity, they give you three times with the value that you're putting in and there's about seven questions that simplified issue. And so what you can do folks with that is that the money that you had, let's say, in any of these other annuities where you had the gains, if you put it into this long-term care vehicle, when that money comes out and it's being paid for long term care services, you don't pay taxes.

Cheryl White: [00:08:45] Interesting.

Greg Ramirez: [00:08:46] There's lots of different options that we can help you folks. You know, let us know what your situation is and we can identify how we can help you best.

Cheryl White: [00:08:54] Greg, one last question before we wrap up our podcast for today. Is there any right time or right age to buy an annuity.

Greg Ramirez: [00:09:02] In this environment that we're here in 2023? I think annuities make perfect sense because you've got the guarantees, you got the high interest rates. I think it's a really good time, but the older we get, we get more conservative. I'll be honest with you, when I was in my 30s, I was a real risk taker. But as I've gotten older, I want to save what I've amassed. So unfortunately with annuities, remember this you have a 10% tax penalty. If you're under 59.5. If you take that money out of the annuity, you're going to be taxed 10%. So I would say that as we get if we're 55, 60, and then we know we're not going to touch that money for at least 5 or 10 years, I think somewhere in our 50s is a good time to start looking at annuities or if we're somebody that can't stop from spending, I think an annuity is a good place to lock up money. No, you're not going to touch it because, you know, if you do touch it, you're going to be taxed heavily.

Cheryl White: [00:09:49] Oh, great angle. All right, Greg, thank you so much. Greg Ramirez, advisors on call. If you would like to talk more about annuities with Greg reach out at advisorsoncall.com or you can call (562) 269-1007. And if you have a topic you would like to know more about, something you'd like for us to discuss on the podcast, just let us know. And Greg is available 24/7 online. It's advisorsoncall.com.

Greg Ramirez: [00:10:17] Sounds good. Thank you. We'll see you in the next podcast.

Announcer: [00:10:20] We know life is busy, but any time you have a question about your retirement, drop us a message online at advisorsoncall.com Investment Advisory Services are offered through Greg Ramirez at Advisors on Call, a state, Registered Investment Advisor. Advisors on Call and this radio station are not affiliated. The investment ideas and financial vehicles discussed here should not be considered personalized investment advice, nor are these recommendations to buy or sell any particular investment or product. And the information you hear should not be considered tax or legal advice. Individuals should first consult with competent tax, legal, accounting and other professionals regarding the applicability and suitability of any investment ideas. Certain investment ideas contain substantial risk, are illiquid and may only be appropriate for accredited investors. Past performance is not a guarantee of future results. All investments will fluctuate and when redeemed, may be worth less than when originally invested. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company. None are offered or sold through Greg Ramirez and Advisors on Call. Comments regarding a particular client's experience may or may not be the same as another client's experience. Do not guarantee future investment success and should not be indicative that any client or prospective client will experience the same or a higher level of investment performance.

Advisors on Call Podcast Episode 1 | The Advantages of Working with a Registered Investment Advisor

Mon, 06 Feb 2023 19:40:29 GMT

How to know the difference between someone who claims to be a "financial advisor" and a financial professional who is truly working in your best interest, not theirs.

FULL TRANSCRIPT

Announcer: [00:00:01] You're listening to Advisors on Call.

Cheryl White: [00:00:06] This is Advisors on Call the podcast with Greg Ramirez. I'm Cheryl White. On this podcast, we delve into the financial and retirement information that you need to live the retirement you deserve. So Greg, first of all, hello. How are you doing today?

Greg Ramirez: [00:00:24] Well, I'm doing pretty good.

Cheryl White: [00:00:26] Excellent. You know, I wondered if we could go over a term that I think is such a loosely used term that I'd really like to get the details on financial professional. I see it used all the time, but I don't really know what that means.

Greg Ramirez: [00:00:43] Well, a lot of people don't know what that means because there's a lot of people out there portraying themselves to be a financial professional. I think we should start at the root of first of all, there's people known as financial advisors. So what is a financial advisor? So normally when you go to a bank investment program or a wire house and I'll use examples like, you know, Merrill Lynch, we have Chase Bank, we have Wells Fargo, which also calls themselves Wells Fargo Advisors. We have credit unions. Credit unions have investment officers inside the credit union and they call themselves financial advisors. But you have to remember, folks, they're really not fiduciaries because they work for a broker dealer. So you have to know that there's a difference between what someone does in the broker dealer field where they work on commission. So, for example, as a financial advisor who works for a broker dealer, all the deals that you do, you're going to get paid a commission. So when they see you as a client, they see you as a commission, which is a transaction. And a lot of people may not like to hear that because nobody wants to say, well, gee, I'm a transaction, I'm not a relationship. Well, that's the difference.

Greg Ramirez: [00:01:45] Because if you notice, if you go to most bank programs or credit unions or wire houses, you're not going to be dealing with the same person. Let's say you've been working in that field. Let's say you've been there for 20 years. They're not going to have the same advisor. These advisors, they change because a lot of times those are starting points for people starting their careers. And the way the bank programs and the wire houses is they're looking for young kids that want to be successful. They want to cap how much the kids can make, but they want to make the most off of these young people that are going into their. It's not like it used to be. I mean, I'll be very honest with you, when I started 25 years ago, you could actually get a career. You would learn, you would move on, move up. These programs now don't want to do that. They basically want to take all of your people that you know, you know, friends, family and basically keep it for themselves. It's changed. And that's one of the reasons why a lot of people go independent, which is the next thing I'm going to discuss compared to financial advisor to a fiduciary or a registered investment advisor.

Cheryl White: [00:02:36] Yes, Thank you. Because I was going to ask you to explain fiduciary.

Greg Ramirez: [00:02:40] So you have to remember this when you're dealing with an RIA--registered investment advisory--they have a fiduciary duty. And what that means is that we don't get paid commission folks, anytime we're talking about an investment product, a securities. Now, if I'm talking about insurance, that's a different story, which I will talk about next. But right now we're just talking about the fiduciary duty of what a registered investment advisor has. We have to do things that's in your best interest in any investment that we have that pays a commission gets paid to you, the client. So already, you know, if someone's making a recommendation to you, that person is getting paid a commission. Because unfortunately sometimes what you see is that those other programs, you see proprietary products being sold to you. And there's a reason for that because the bank or the wire house makes more money. When you're an RIA, we don't have proprietary products. In addition to that, we're not being paid a commission. We're not getting an extra 1 or 2% if we sell this investment. And that's where some of the things that those other places do that we don't because we have to do. What's in your best interest, because all we can do is we can charge you a fee. And remember that fee varies by the amount of money that you have with us. Typically, anyone who has, let's say, $100,000, we might charge you start at 1.5%. You've got $1 million?

Greg Ramirez: [00:03:46] You know, obviously it's going to be substantially less. The more money that you have with us, the less the fee is going to be, because one of the things that we can't do is we can't charge you an astronomical amount because that becomes usury. You know, we can't charge 1.5% on a $3 million portfolio. It just can't be done. You have to be a lot less. And, you know, you negotiate that fee with your client. And what we're facilitating here is a fiduciary wants a relationship because since we get those fees, if your money loses, guess what, folks, we lose. If I was to do it as a transaction, I really don't care because I got paid. And you have to remember that's the difference between the two programs. One program gets paid a transaction, they move on to the next client. As a fiduciary, I want to keep you. I want to keep that relationship because the more I build with you, the more assets you add to me and the better that I can perform for you. Obviously, that instills confidence. It's going to instill that you want to work with somebody. One thing I do know is that even though we have a lot of social media and it seems like people don't stay at jobs for the next 30 years, we all want to have that relationship. One question that I have, folks, is how many times do you change your doctor? How many times do you change your CPA? How many times do you change your financial advisor? If we can, you can find that good person that you can work with.

Greg Ramirez: [00:04:54] You're going to stay with them. And that's the one thing that we have here as a fiduciary that we can do. So what I would like to do now is I'm going to explain to you the difference, because unfortunately. We have some people in the industry who have insurance licenses only, and they call themselves financial advisors. And that's one thing I want you to know, folks. One of the biggest red flags, if somebody doesn't have a securities license, they are not a financial advisor here in the state of California. They're called an insurance analyst. They cannot call themselves financial advisors. You don't know how many people I've come across that have told me, Oh, yeah, I dealt with this financial advisor. And then when I looked at them, they only have a life and disability license and that's because they were selling fixed indexed annuities. I'm not trying to be negative for those people that are out there, but you're not an advisor. You're selling a product that's fixed, that's an insurance product. You can't talk about stocks, you can't talk about securities, you can't do alternative investments. All you're offering is insurance. You're an insurance analyst. And so when you need to know that and again, folks, insurer analysts get paid commission.

Greg Ramirez: [00:05:49] So when they lock you up into that annuity, that's five, 7 or 9 years, your money is locked up. And compared to a fiduciary like here, we do things on a fee-based in some cases there's some alts that, yeah, your money can be locked up for 4 or 5 years, but for the most part, most of your money is not going to we can move it out. Or if this broker dealer again, they're going to lock your money up too, because the longer that these other two classes can lock up your money, the more likely that you're going to be forced to stay with them because you don't want to take a surrender penalty. So you have to be wary of these other two types of individuals that are out there. A lot of times they look for the higher incentive products. And that's not to say that some of the products they offer may be in your best interest, but unfortunately, most advisors is an 80 over 20 rule. And I think that goes in any type of business. Usually 20% are doing what's best for people's interests and the other 80% are just out there. And so, you know how many times you've come across a good doctor or you come across, like I said, a good accountant. It's hard to find good people in this industry. It's hard to find good people. You know, the best people go independent because when we go independent, we can offer so many things.

Greg Ramirez: [00:06:50] Because you have to remember, folks, when you work for a bank or a wire house program, the investment products that they offer are going to be in the best interest of the bank or the wire house, not your best interests. Do you ever wonder why when you go to a bank or credit union or a wire house, why they can't give you tax advice because they're not allowed to? Do you ever wonder why they can't give you a tax mitigation strategy? They're not allowed to. And an insurance agent. Do you know why they don't give you tax mitigation? Because they can't. Because an annuity is tax deferred. So all they can do is talk about tax deferral. They can talk about rates, but they can't talk about anything else. So you have to remember who and what you're dealing with, what type of licenses, how do they work? Because that's going to play a big part into how these individuals can help you. You know, here are the advisors on call. We have all the licenses, we have the securities license, we are an RIA, we have an insurance component. You know, we can do everything. We can do the financial planning. And we are a fiduciary, which is, I think one of the things that people want. They want to know that they, you know, is that person a fiduciary? Well, it's very important.

Cheryl White: [00:07:51] It is important. And if I just look at your name, your title, are there any initials behind your name that would indicate to me if I'm looking for a financial advisor, that you are a fiduciary?

Greg Ramirez: [00:08:03] Yeah, a registered investment advisor. RIA.

Cheryl White: [00:08:06] So that's going to be very helpful for people because as they're looking, they can identify those folks right away. Correct? So what services can you provide as a financial advisor? As a fiduciary? If I'm looking for a wide range of services, can you do everything for me from financial planning to estate planning?

Greg Ramirez: [00:08:27] Yes, we can. So if you don't know if you're headed in the right direction for retirement, we can do retirement planning. We can do estate planning, which also involves tax mitigation strategies, creating trust wills, looking at life insurance, looking at long term care, which is, I think, one of the most important topics that people don't like to talk about because it's an asset class that should be taken into account because insurance is very important, folks, because the older we get, the more expensive it gets. So if you can get it when you're younger, you're going to be much better off. We do all these things. We do alternative investments, we do easements, we do advisory annuities. And I want you to know, folks, advisory annuities are annuities. As a fiduciary, you have 100% liquidity to those annuities as to if you go to the folks that are the insurance analyst or the person that's a broker dealer, they're going to lock you up for five, seven, nine years. And if you're not in California, it could be as much as 13 or 16 years. So here we can give you the same products when we're going to charge you a fee, but you have 100% liquidity to that. And I think that's a huge deal, especially as we get older, because we want to know that our money is liquid, which allows us to move that money. As the market changes, we can move it from one product to another. We can make changes that can help your portfolio and balance it out.

Cheryl White: [00:09:37] Hey, Greg, at what point in our lives, our careers, do you think it becomes really important to work with a financial advisor?

Greg Ramirez: [00:09:44] The sooner you work with one, the better off you are. I think one of the biggest problems that we have here in the country is that we never are given a course when we're in high school or college about how to talk about finances. Usually it's our friends, our family, our parents. And I think as soon as you get a job, if we can start telling people, you know, get a Roth IRA. Control your credit cards, have a medical plan, savings accounts. The earlier you do it, the better off you are. I mean, sometimes you look $6,000 a year. Doesn't sound like much. But if you start saving when you're 20 and by the time you're 60, do the math on $6,000 a year over 40 years, let's say with an average return of 7%, you're going to have over $1 million. And I'll be honest with you folks, you have to remember Social Security is not going to be there for you to help you out when you retire. It's a supplement. You have to make your own retirement. So it's very important that the earlier you start, the better off you are.

Cheryl White: [00:10:39] But what about someone who's waited and they are, let's say 50, 55, they're getting ready for retirement. Is it too late or can you still help get all of their financial things in order?

Greg Ramirez: [00:10:51] First of all, it's never too late. Our highest earning years are between 50 and 65. So anyone depending on your career, those are the highest earning years. Those are the years that you're probably going to need a financial advisor the most because you want to know how can I save on taxes? How can I save on retirement? At that point, you may have children that are going to college. How did we pay for college? I think it's very important to have a financial advisor at that time and if you haven't had one, it's never too late. And depending if you work for a company, hopefully you're contributing to a 401(k) plan. If you are self-employed, hopefully you have a SEP. Hopefully you have a single K. Hopefully you're using the benefits of a plan so that you can save yourself on taxes. It's never too late. You can talk to us, we can help you. That's something not to worry about.

Cheryl White: [00:11:33] So let me just ask you one simple question as we wrap things up for our podcast today. Why do I need a financial advisor?

Greg Ramirez: [00:11:41] You need a financial advisor to help you navigate through your life, just like you need a doctor, just like you need an accountant. Those are probably three of the most important people you can have in your life, separate from your parents and family. Because having the right one can save you a lot in taxes can also help you prepare for retirement. The sooner you get an advisor, the better you're going to be because you're going to be more prepared than someone who doesn't have one. Because remember, folks, what we do today is not indicative of what's going to happen in the future. Things change. And as things change and evolve, you have to have somebody that does that for you. You know, we can't operate on ourselves, you know? So are you going to be your own financial advisor? Exactly. Are you going to be. No, you're not going to be your own financial advisor. You're going to fix your own car. I mean, cars today are so much electronics in it or can you do it? Can you fix your own computer? That's why there's experts, and I think the three most important experts is, like I said, doctor, an accountant and a financial advisor.

Cheryl White: [00:12:37] And you know, Greg, another point that I would just like to make is that you in your profession, you see all kinds of things. You've created so many different scenarios. Talk to people in so many different areas of life and stages of life. And I think that working with a financial advisor, a fiduciary, helps you understand what might come your way. Things that you perhaps had not considered.

Greg Ramirez: [00:13:00] Yes, I've been in this industry for 25 years, folks, and I've seen it all and I'm still seeing more. So nothing surprises me. I could probably sit here and have a whole podcast season of scenarios that we've been through, and I obviously I'm going to talk about certain things that I think are very important. One of the biggest concerns that I have right now is that I think there's going to be a lot of elderly abuse as we get older because some of these young people don't want to work and they see their parents. I mean, right now we have the highest level of young adults living with their parents. I think this is the highest level we've had in over like 80 years or 100 years. It's not getting better because look at the inequalities in regards to getting a home. It's become very expensive. And again, if there would have been the right financial planning going and then on the other end, you see that the luxury brands are being bought by these people that are living at home because they don't have home payments. So again, if we teach our children correctly not to buy that Gucci purse or that Chanel purse and instead to save that money, then you can have a house or a condo. You know, we all got to start somewhere. But I think that a lack of planning is what's causing this.

Cheryl White: [00:14:01] Wow. We have covered so much today. Greg Ramirez, thank you. And I want to remind everyone that if you have a question that you'd like Greg to address to answer, just let us know. You can give us a call at (562) 269-1007. And remember that we're also online, available 24/7 on our website, advisorsoncall.com.

Announcer: [00:14:24] We know life is busy, but any time you have a question about your retirement, drop us a message online at advisorsoncall.com. Investment Advisory Services are offered through Greg Ramirez at Advisors on Call, a state registered investment advisor. Advisors on Call and this radio station are not affiliated. The investment ideas and financial vehicles discussed here should not be considered personalized investment advice, nor are these recommendations to buy or sell any particular investment or product. And the information you hear should not be considered tax or legal advice. Individuals should first consult with competent tax, legal, accounting and other professionals regarding the applicability and suitability of any investment ideas. Certain investment ideas contain substantial risk, are illiquid and may only be appropriate for accredited investors pass for. Performance is not a guarantee of future results. All investments will fluctuate and when redeemed, may be worth less than when originally invested. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company. None are offered or sold through Greg Ramirez at Advisors on Call.