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with us today for the retirement income
show with Troy sharp the CEO and founder
of Oak Harvest Financial Group you can
always go to the website to learn more
about Troy and the team Oak Harvest
financialgroup.com and of course check
out the YouTube channel there are over
300 videos now on the YouTube channel
just search Troy sharp and Oak harvest
the retirement success plan starts with
an investment plan then it's an income
plan then it's a tax plan a health plan
an estate plan and you really can't miss
any of those nobody's exactly the same
as the neighbor your relatives your
co-workers the planning process is all
about you at Oak Harvest that's how they
create the retirement success plan you
know you're talking about the three
phases really the the accumulation phase
are working years then it's the
pre-retirement phase and then of course
it's we're in retirement so now it's a
distribution phase and I wonder how many
people think that their retirement plan
are their 401ks are there IRAs I mean
they're important but that's not the
planning you're talking about is it no
you're absolutely right and
you know it's
um
it's that light bulb moment Market I
mean it really truly is it's you know
when you're young working as you're
progressing into your career and you're
getting into your 40s and 50s you have
so much going on in life you don't
really think about you know retirement
necessarily and especially the financial
aspect you may think about you know I
want to rent an RV and you know go to
the ball games I want to you know spend
more time fishing or golfing
you think about those things but most
people don't think about you know when
you're you know 50 years old you're not
thinking about well what's the what's
the tax ramification of taking social
security at 67 while I'm also taking
money out of my retirement account
combined with the rental income that I
have and the dividends and interest for
my non-qualified investment account
so that's not a question that comes into
your mind so I got divorced wow I got to
find a place because I have a daughter
so I look at apartments I'm like well
that's crazy I can get a house for way
cheaper than what rent is and so I go
well I'll just take my 401K money and
put 15 grand down just pull it out of my
401k having no idea about taxes Troy
little it took me about five years to
pay off all the back taxes it's easy to
make a mistake and you don't even really
realize you did because that was a
mistake in doing what I did I can tell
you you know the biggest you know we and
we see it all the time of course you
know people cost themselves so much
money
um you know the number one thing that we
see is when the market starts to get
volatile people cost themselves so much
money by selling out getting scared
going to cash
you know if you're in the pre-retirement
phase you know let's say you're seven
years away from retirement you know
that's seven full years the market has
never at any point been down for seven
consecutive years
the market is never taking uh you know
as best as I can as best as I know
um you know I'd want to go back I guess
and maybe look around the Great
Depression uh the New Deal really
extended out the recovery of the economy
I need to look in that period a little
bit more
um but even going back to 2008 you know
2007 to 2009 the financial collapse you
know the market came down
and then it took about five years for
the market to regain its prior levels
now
the the when you're in that accumulation
phase or pre-retirement phase one of the
big reasons why you don't want to be
moving in and out of the market besides
that it's historically been proven that
investors are extremely poor timers of
the market that means knowing when to
get in when to get out
but if you're if you have an investment
strategy that is paying interest in
paying dividends and you're reinvesting
those dividends what you're doing is
you're accumulating more shares at
cheaper prices and those Shares are now
spinning off dividends or spinning off
some type of interest and if you
continue to reinvest
one of the best ways that you can build
wealth over time in this country is
through what we call a dividend
reinvestment plan and this is it can
take many years of course depending on
what types of stocks you're invested in
if you're in
companies that pay Flats dividends or
companies that pay growing dividends so
not too far down this rabbit hole but
just to understand the concept that when
the Market's down it's like you get to
go shopping and it's an automatic
shopping where you're buying things that
are on sale and as long as you believe
five years 10 years 15 years later
Capital markets will be higher in value
than they are today that is how one of
the ways that you can really build
wealth is by accumulating shares at
discounted prices during times of
economic stress or recession or Market
pullbacks Corrections crashes if you're
in that accumulation phase or you have
five years eight years ten years before
retirement
and I personally even if you were a
little bit closer to retirement it just
depends on so many different factors so
I'm speaking high level in general here
and not giving specific advice but
if you can accelerate your investments
into a recession let's say you're
normally at your 35 years old 45 45
years old and you're normally putting
four percent of your salary into your
retirement account during times where
the market is down you should really be
trying as great as much as possible to
increase your savings contribution to
that plan buying
Investments when the prices are down and
that's how you build wealth it's called
the marginal return on invested Capital
if I buy when everything is going great
and prices are really really high well
the marginal return that's expected on
that Capital that I've invested is much
smaller meaning the incremental growth
anticipated in the future from dollars
invested at very high level is much
smaller than the growth that you would
anticipate receiving if you invest when
prices Equity prices are depressed so
basic concepts that that that as a
finance person
it's it's just like speaking in English
to me it's I just know it to be
factually true but the average person
costs themselves so much money during
the accumulation phase or during the re
uh pre-retirement phase and even the
retirement phase if you have a proper
plan it's set up in retirement you
shouldn't have more inequities than
your what we call your risk willingness
where you should have some guard rails
on your portfolio and I'm going to get
into this in detail in the next segment
but that marginal return on invested
Capital understanding that the lower you
buy something in this case we're talking
about a recession a market correction a
market crash the cheaper prices are
relative to their fair market value
the higher your expected return on that
invested capital is
so when we're getting in and we're
getting out and we're getting in and
we're getting out and we're trying to
time this it's it's absolutely a failing
strategy we know that to be true based
on empirical data decades and decades
and Decades of research
dalbar a company called dalbar
d-a-l-b-a-r they put out a study every
single year that details the behavior of
the average investor based on publicly
available information on Equity Fund
flows buying and selling Equity mutual
funds essentially and in 2021 last year
the average investor retail investor
underperformed the market by 10
percentage points
so the market did let's say 28 the
average person did 18. or maybe it was
24 and 14 but it was 10 percentage
points we have this study we can send it
to you
um if you want give us a call Reach Out
1-800-822-6434
the that type of difference and and
here's the here's the here's the catcher
or the Killer
most of you that made 14 or 15 percent
last year you feel like you did great
you know you're not looking at that 24
or 25 percent that you should have done
you know if you had a more disciplined
approach to investing and staying
invested most people when they make 14
or 15 percent they're thrilled but again
as a finance person I look at the
opportunity cost what did you cost
yourself by making that emotional
decision to get out of the market
because you didn't like who was
president or you didn't like policies
that were being passed or you didn't
like the direction of the country the
stock market doesn't care about those
feelings it simply doesn't the stock
market is a discounting mechanism for
expected future cash flows for return on
a company or a company's Capital that
they've invested what type of future
cash flows are projected gonna discount
them to a present value and the policies
that are being passed by Presidents by
Congress the majority of them do not
impact what the stock market is going
going to do
so think about this is why many people
are far better off with someone to help
guide them during these difficult times
economically speaking within their
portfolio building a retirement income
plan looking at Social Security Medicare
health insurance all of these combined
components because not only do you need
extreme expertise to put all this
together and do it properly but you also
need
a a guiding hand so to speak during
times of high levels of emotion that can
often cause us to make irrational or
illogical decisions based on fear or
greed as opposed to sound hard data so
that's what we do here at Oak Harvest
Financial Group is we help build that
plan that requires the expertise about
taxes about Investments about risk
management about generating multiple
streams of income about health insurance
estate planning trust Etc that's the
expertise but the True Value that we
provide is when a client calls us in
June for example of this past year when
the market had a tough six months and
they're saying Troy we really need to
get out we really need to get out we
can't take it we can't take it first and
foremost we have to remind them look we
have a plan this money that we have in
the market here you know we don't need
this money for at least seven years okay
because we're getting income from over
here and if we get out now this is the
long-term impact this is how it impacts
you negatively and by going through and
having that calm conversation and
explaining the facts people a large
majority of the time you there you know
what Troy you're right we get it we feel
much better just some people need to be
reminded more often than others or some
people need to have phone calls and
conversations or meetings more often
than others and that's fine that's what
we're here to do but we always come back
to that plan whether you're in the
pre-retirement phase or the retirement
phase and if you understand that
oftentimes the biggest cost you incur in
retirement or pre-retirement is by the
decisions that you make personally when
it comes to trying to get in and out of
the market time it
just have a plan stick to it have the
discipline understand the pros cons time
Horizon risk tolerance Etc and don't
cost yourself money by allowing these
emotions to dictate your decisions
800-822-6434 we're talking about those
critical steps in the retirement phase
stay with us we're back with more in 60
Seconds
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