Episode 26: It's Never Too Late! Explore Later Life Investing

ABOUT THIS EPISODE

On this episode of the Build Your Life Podcast with Financial Expert John Browning, we're discussing how to explore later life investing.

 

In this episode, John explains that it is never too late to start investing. He shares his advice about how it can feel overwhelming when faced with too little planning during your later years. Tune in for all the details on what you should and shouldn't do when it comes to aging without being prepared in advance.

 

For more information, visit www.GuardianRockWealth.com to learn more about what John can do for you. Or, give us a call at (312) 372-5000.

 

 

Welcome to the build your life podcast with John Browning. Build your life as a relaxed and unedited conversation with financial expert John Browning. John's the founder of Guardian Rock Wealth, with offices in Hawaii, Colorado and Illinois. John's also the author of the book build a life, not a portfolio, a guide to your financial future based on your personal values, which you can purchase on Amazon, or stay around to the end of today's show and I'll tell you how to get a free copy meld right to your door. I'm Michael Delan, your host for the next few minutes as we chat with financial expert, business owner and author John Browning. And John, welcome back to your podcast. Or how are you today? I'm doing fine. How about stuff? Fabulous, fabulous. It's Great Day. I'm excited and I'm excited to talk to you because we're talking about something I don't really understand, John. I've heard the words here. Is One of the topics I want to talk about when we're talking about life, a later life, investing. I fall in that category. Now, John, I'm I'm over fifty and I know it's terrible that one of my favorite Bible verses that I refer to all the time because my hair is now gray. Right, is gray hair is the glory of the aged. It's achieved through a righteous life. So I quote that to my kids all the time. They're like Nan Dad. Anyway, right here talk about my great hair. We're talking about investing later in life. So we if there are people out there like myself, who did not do a great job when I was young, and we look at and say, you know a lot, I've got twenty, twenty five years left a retirement. I need to do something. What, what kind of counsel and advice do you give people like me who are later in life, bloomers, I guess, and we didn't start planning quite early enough. We don't think. What what do you what do you tell if? Well, it's I would...

...stay, maybe more common than you would think. If you think about it, where you're at when you're younger, you're wanting to first of all, a lot of young people they want to have everything that their parents had like yesterday, right. So they try and accumulate and then there's just no no spot, no place for investing. So this happens a lot. Will Talk to somebody at our age because I'm over fifty, not too and we talk to somebody our age that really hasn't done much of anything, or maybe it's doll a little bit and thought it was enough and really they're starting to realize it's Oh nuts, it's you know, I'm not there. So the number one thing that I like to tell people is it's it's never too late to start. So don't get overwhelmed and just say well, it's not possible. I better live life now and just keep spending in and living up of life. You know, it's never too late. You can, you can find the find ways to systematically start to save and then it's a matter. Then it gets into what I really love, which is how do you manage a portfolio differently from if you have started earlier to if you're starting late? And how do you manage the portfolio differently from when you're still working to when you actually need income and paycheck replacement plan on an ongoing basis? Those are very different ways to manage that portfolio and I love that, John, because we've talked in multiple episodes, so I want people to go back and listen to them, if they haven't, about how you can manage those portfolios differently because you don't have a pull off the shelf. Oh, you fit in category. See Portfolio for your clients. You actually get to know them and create their portfolio for them to match their lifestyle and their goals. That's how you're...

...able at Guardian rock well to be able to manage that for different people, because you don't have set in place programs. Right, that's right, that's right, and that's yeah. And it really comes back to and this this. You talked to investors at every different level. Right you you can. There's two types of mistakes that you can make, or sort of mindsets and myths that you can believe. One is you hold on so tightly to this idea that I can't take any risk at all, I have to hold on to every dime, but because I'm investing so late. And what happens then is you're holding on too tightly and the cost of living in the inflation costs just continues to snowball and get ahead of you. And on the flip side, you hold on too loosely and you end up with the portfolio that's extremely volatile and if you need some of that money at a particular point in time, you may have to sell securities at a very inopportune moment. And so there's a balance. And again it comes back to the mindset. And even with people who have planned well and they saved a lot. You know, I run into these folks quite often as well, where they've got well, I just can't afford to lose a dime. And you look at their portfolio this and CD's and short term bonds and and they're not keeping up with inflation and they're slowly becoming poorer as they get older and unfortunately, with there's a risk that we refer to as longevity risk, which we are facing an our age group, is that they expect us to live longer, and that's supposed to be a good thing, right. Maybe not if you're going to run out of money and your money's not working hard enough for you. Yeah, that's a good point. I don't want to live that long, all right, but that's an issue. I love the two aspects because the guy or...

...the person who says I can't lose a dime, in that scenario he's actually losing dimes and quarters. He just doesn't realize it because he's holding on to his money the wrong way. That's fascinating. Very difficult for the older generation, older than than us, to grasp that concept, and a lot of it comes from just their perspective and backgrounds and what they've been through in life. Some of them have seen, you know, some prutty, desperate times and their childhood and and that molds their perspective even now today. It absolutely does. All the more reason why, talking with John and his team, they're they get to know you because your background, your past and investing it plays a huge part, risk tolerance and all of that. It has to come to bear on how are you going to manage this portfolio so that you can build the life that you want? In your portfolios there to support your life. And too many times, John, I've I'm sure you see it all the time, people's life is not what it should be because they're so worried about their portfolio they get it backward. Right, that's right, exactly, and so that's that's why I love what you guys do with building the live, listening to your clients, structuring portfolios, managing their those portfolios so your clients can have the life that they that they really want. What the let's talk about some options that are available for people later in life. What about, and here's the concept I wanted to talk about, that I've heard TV commercials and all kind of direct mail whatever, but it's reverse mortgage and we've got a mortgage on our house. I don't understand this reverse mortgage thing. Can you help just shed some light on that, and what is it and when does it come into play? So this is something that's become popular...

...really in the last maybe ten fifteen years. It's been a frown for longer than that, but it's been much more popular, I think, as of late, and I'm not sure exactly why that is, other than I do think people are even now beginning to live longer and unfortunately running out of money. But what they have done is they they paid that mortgage for thirty years and suddenly they don't have a mortgage anymore and they have a house. So they're real estate bridge put cash poor. And this is another whole different topic that I talked about often because with wellof investors you tend to have they've heard and they believe that, you know, physical real estate is something that you should definitely be investing in as the greatest path for riches and there's just a lot of things they need to understand about that and how getting over allocated to real estate can really hurt your financial flexibility. But that's getting all off topic here. With a reverse mortgage, if you're older and you're frankly, we have literally you're getting down to the point where you realize, I'm not going to have enough money to support myself over the next ten years and I'm in good health and it looks look things are looking good as far as that goes, you can take your house. It's essentially just, really simplistically, you're you're selling it back to the bank and they are providing you with mortgage payments on that. Okay, so that sounds complicated. It really shouldn't be right, because we buy a how generally speaking, we buy a house and we take out a mortgage and we pay the bank mortgage payments every single month. So this is reverse of that. I own the House and I'm selling it, in effects, selling it, or a portion of it, doesn't have to be the whole thing, to the bank and then they pay any mortgage payments back. Now here's the issue with that. If you were hoping to...

...leave a legacy right to your children. Then you know, maybe that was going to be the house. Well, that's going to be the bank's house at some point. Okay, so these two things that you do need to understand and and be aware of. But when there's really not much of another option, this can be a good option to consider because a lot of times these houses are worth several hundredzero dollars and used correctly, that can support you for quite a while if your disciplined and don't have a lot of expenses. Interesting. Okay. So, so that that's another way to add another level of cash flow into your retirement portfolio, if you need to write. That's fascinating. That thank you for that explanation. That was probably the clearest explanation of a reverse mortgage I've ever heard and it just makes it makes sense. A Oh, the banks buying my house. In a sense, I get to live in it and they're going to buy it and it might take thirty years for them to pay it off and by then I'll probably be did right, I mean conceptually, because you know you took I mean, I'm fifty, mid fifties. I'm not going to do reverse mortgage now. I got a long time, but this is something that typically you're dealing with somebody in their later years. Is that accurate? Typically, yes, and and you know, if you're not in your later years and you have this issue, unfortunately, my suggestion would be first of all, cut expenses, but you probably unfortunately need to find something, a skill set that you have in order to go essentially go back to work, and which is no punt either once you've retired for a while, and it's also not easily done because unfortunately there is some age discrimination that does go on out there, right John. Yeah, I know, you know. I not that you know, John. So reverse mortgage. How do we? So if you're, if you're mid...

...s right and you don't think you've really done a great job, what are tell me some steps. What are some things I can do to protect myself from here onward to if I've not done a great job saving my kids are now really out of the House or in college, but they're still heathered to me, I guess, but really they're out of the house. What are some things I can do in the next twenty years? You know what, it really doesn't differ that much from what I would tell a younger person. Get systematic about your planning, and this is where, you know a big part of what we do is this financial planning. And people said, what's that? What's that mean? And it a lot of people don't really understand what that means. And of course it means systematically putting a portion of each chat into the best retirement vehicle that you have available to you, which could be several different things. Right. It might be your one K or four or three B or your TSP or any of the other myriad of things that are available to you through your employer, but it also might be a Rath IRA or might be a traditional regular IRA, and if those things aren't available to you because of one reason or another, then it might have to be a taxable account. But get systematic about every single month, systematic and consistent about putting that money away. And then the another part of financial planning is, though, wealth management, which is something that we focus on on us well. And then after that, of course there's the estate planning, the tax planning and everything else that goes into it. But systematic and consistency are the two most important things. That's great, and you mentioned this. I think there's in the last episode about systematic you know, we were talking about...

...emergency funds, the merge events, systematically putting money away from emergency funds. Same Concept. Systematic, consistent over time. So even if we only have twenty years to say systematic, you can. You can get a lot of money saved up, but you can put it in the right places, and that's why you know, working with you and guys like you, that you help build the right portfolio to sustain my life and help we have that lifestyle. Because again, is I tell people time, I may not need eighteen million dollars by the time I retire right. I just need to understand the lifestyle I'm looking for and you can help structure and say you don't want here's what you need to be doing over the next few years. That's right. I would say most, if not all, of the people that have not put this into practice yet will when I say this, when I say you know, systematically, even if it's a hundred dollars, but just about every one of us could have before a hundred dollars paycheck just set aside it will let me think about that and relation to everything else. And there like that's not enough. You would be absolutely amazed at the end of give it twelve months. At the end of that, invested correctly and the consistency of that. And and first of all, you begin to see it build and there's a psychological switch that happens and you're like, you know what, I think I could probably do a hundred fifty this month for a hundred fifty this paycheck, or maybe two hundred. And you start because it begins to be suddenly your financial planning gets to be fun when you start realizing that it's building up your future. And it's amazing to see the psychological shift and it's amazing to see how much faster it goes was than people really think when they start. The hardest part is starting, and yet it's the most important part. You have to start or you'll never get anywhere. That's right. Yeah, and that's good. That's great, counsel there, because you're right, it is you start, but you see that go in and you're like, Oh,...

I can do it, I can do it, and it makes financial planning more fun for people like me who really don't like it. And so that's why people like you are around, who love it, and I'm glad you're around. I'm glad you're doing this podcast and I'm glad that you can explain things like reverse mortgage is so simply that even I got it, John. So it's good. Yeah, I found the people who want to two things either over simplifier over complicate, and and so many of the unfortunately, so many of the people that are explaining these things just feel the need to make it more complicated than it really is. Yeah, that didn't confuse. Is the masses right? That's right. Well, keep it simple. Call John. How about that? There you go. That's great. Yeah, read out to John and Guarden Rockwell and he can help you out. He'll have a comp phone call with you. I give you a free copy of his book and he's just all around great guy who really understands all kinds of things around how do you can build your life and not just a proform this. John, thanks again for being with US another great episode. Will be back in next week really with another super episode. We've got two or three more topics we want to touch on, and so keep keep listening and if you not listen to the back issues and the back episode, you need to go back and listen to that because there are gems in there that are really, really good. So, John, thanks again for your time. Buddy. Go have a great week. All right, thanks a lot. You. Thanks for listening to the building your life podcast with John Brownie. Be Sure to subscribe to this podcast so each new episode will be sent to you automatically when it is released. Have a terrific day.

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