Financial Fortress Radio June 13 2010 with Richard Jordan
Patrick: Welcome to Financial Fortress, the show that gives you good information on how to follow the secrets of the wealthy. Richard, we have a great show today. I know you wanted to start with the difference between brokers and the Registered Investment Advisors.
Richard: Thank you, Pat. Yes, there is a difference between who is just another salesman compared to someone that is only a Registered Investment Advisor. The Registered Investment Advisor’s only business acts as a trusted advisor. 95% of the Registered Advisor also carry the brokerage licenses whose only purpose is to collect commissions in addition to fees, and that represents a conflict of interest.
What it means is they don’t have a duty to you. They have a duty to themselves and the brokerage firm first, and yours second. I don’t know how you feel about being second with your money, but if you want someone that cares about you, you need to talk to someone that is in the wealth advisory business and is only a Registered Investment Advisor.
Unlike the brokers, we are required to act as your fiduciary only. You don’t have to worry about the conflicts of interest you’ll get with stock brokers and the insurance only sales people. Our golden rule is in our mission statement, so we’re going to treat you just as if you would like to be treated ourselves if we knew nothing about financial services.
You’ll find we offices all over the city, in North and Northeast Dallas, in the park cities uptown, Plano, Addison, Arlington, and Grapevine Southlake areas.
This week, we’re going to talk about undisclosed fees that were in the news again. Investors, unfortunately, don’t know that the fees that they’re paying on their 401Ks are much higher than the human resources groups that their companies have told them.
That is because the brokerage industry has not been forced to disclose the fees to the participants. So, 50 million 401K participants who deserve to know how much they’re paying for their retirement accounts don’t really know.
And lawmakers in the Senate decided this week to drop a measure that would have forced the 401K industry to disclose those fees. Does that sound fair to you? We don’t think it is.
Now, don’t get me wrong. There are those who advocate against 401K fees just because it would be difficult for some sort of a standardized report to be created by all the different brokers that are out there. It is quite possible that would take them a little bit of time. But in the meantime, they’re siphoning off tens of billions of dollars that belong to the American investors, and it’s just not right.
Patrick: I understand. I understand you have a workshop that’s coming up pretty soon.
Richard: Yes, we do have a workshop coming up for people that are in the Northern suburbs of Dallas; North, Northeast, and Eastern suburbs. We’ll be meeting at the Master Grill Steakhouse, that’s one of those Brazilian Steakhouses, at the Firewheel Mall.
Patrick: And that’s on?
Richard: We’ll be there on June 16th and June 22nd. That’s this coming Wednesday and the following Tuesday.
Patrick: What time should they be there?
Richard: 6:00 is when the seminar will start.
Patrick: Very good. Who should be attending these workshops?
Richard: Most of our clients are over 55 and have substantial assets ranging from $250,000 on up to invest.
Patrick: Very good. You were talking about the 401Ks and the expenses. They’re allowed to do this? They’re allowed to overcharge people all of this money and lawmakers you say are just letting it go, huh?
Richard: Well, they are. The lawmakers are ignoring the fact that the actual cost that people are paying on these funds are typically twice, three times, even four times as high as they think they are.
Patrick: Well, that’s because they all have corporate pension plans, right? Or wrong?
Richard: Well, Congress certainly has a heck of a pension plan.
Patrick: Well, I know that’s right. So what can anybody do? Folks that have money tied up in these 401Ks, what can they do?
Richard: Well, there’s a couple of things they can do. First of all, you need to notify your Senator immediately that this should’ve been included in the legislation. They cut it out at the last minute on the Financial Regulatory Reform.
And the second thing they should know is that you have a right under the Pension Protection Act of 2006 to roll your 401K out of your company and into a Traditional IRA that could be managed by someone that has a duty to take care of you and to disclose all the fees, like we do.
Patrick: Well, I know that you’re going to talk a little later about the Roth IRA, but that would be a logical thing to do, wouldn’t it, if they go through and analyze that?
Richard: Yes, the costs on their 401Ks, most of those costs are unknown. We have several ways of finding out what the actual costs are, but even we can’t find out all the costs. A lot of these are hidden from the public and they’re not listed in the prospectuses.
Patrick: I guess I presumed something there on that last thing. If you have a 401K and you have to stay with it in the company, you’re allowed now, due to some legislation, that you can take it out because of the Enron thing, right?
Richard: Yeah, the Enron Act is the colloquial term for it.
Patrick: But you can take it out and you can put it into your own self-directed IRA.
Richard: Correct.
Patrick: But it has to be a regular IRA, right?
Richard: It’s a Traditional IRA. There’s no tax consequences to do so. It simply means that you roll it over into an account and you can have that managed professionally. The other advantage to that, not only can you find out what your fees are on a Traditional IRA if it’s managed by us, you could have a selection of tens of thousands of different products, different funds, that are not available to you in the company 401K.
The reason the company 401K limits the number of options you have is so that the brokerage account, the brokerage manager, doesn’t have to deal with too many options. So by limiting their options, they can keep the disclosed fees low. The undisclosed fees are another matter.
Patrick: What else did you want to tell us about the 401Ks and the fees?
Richard: Those are the key things. Again, the cost of a 401K might be shown at your company to be less than 1%, but often we find that it ranges from 2-4% when we get done with all the disclosure information that we have access to that the public does not.
Patrick: Very good. Back to the workshop real quick, because we didn’t tell people how they could register. Do you want to tell them how they can register?
Richard: Yes, you can call (972) 325-1700 and you can find out all sorts of interesting facts by coming to one of our seminars because we discuss how the wealthy invest differently.
Patrick: I know it’s about a 60-minute presentation.
Richard: Correct.
Patrick: It’s not a sales presentation at all. Having been to a few, I would tell you it’s worth it and you should come. Who should be attending these really?
Richard: Again, most of our clientele are over age 55 that typically have assets ranging from $250,000 on up.
Patrick: Very good. Dinner follows as well, right?
Richard: Yes, this is one of those Brazilian Steakhouses where they cut off about a dozen different types of meat. They roast it on the spit, and they bring it to the table and you can take a slice and try it, see if you like it and, if not, just not take any more. They’ve also got an excellent salad bar. I highly recommend it. They’re at the Firewheel Mall, and the phone number to register is (972) 325-1700.
Patrick: What else did you want to talk about with the undisclosed fees?
Richard: Again, it’s up to you to make your viewpoint known to your Congressmen and your Senator. This was supposed to be the administration that was going to clean all this up, but look what’s happening. They are not taking care of the American public and the wealthy that is in 401Ks is supposed to sustain us. Social Security is only supposed to be 30-40% of our retirement savings. Pensions have been eradicated by 81% of the Fortune 500.
So 401Ks are really all we’ve got left and our gains are being siphoning off by these large brokerage houses that are managing these accounts and not disclosing these fees properly. If people knew how much it was costing them, they would’ve moved these accounts as soon as they had a chance to in 2007.
Patrick: I understand. We’re coming up on a break here in a little bit and I want to make sure folks know that next week, we’re going to have Harry Dent on the phone, so to speak, joining us for the interview. It’s going to be a great show.
Harry is known for his latest book, The Coming Great Depression. Actually, I was acquainted with Harry Dent back in 1993 when he came out with his book, The Coming Great Boom. That was really good.
It was good information. It will be great information next week. I think you all will really enjoy that. So make sure you tune in next week at 5:30-6:30 on KSKY. You’ll really enjoy the show.
Richard, I know there’s so much more of the show to go. We’ve talked about the fees. What else did you want to cover?
Richard: Well, again, Harry Dent is going to be an awesome opportunity for listeners next week on the 20th. His last book printed last year was The Great Depression Ahead. Harry does research based on the predictive ability of consumer spending to determine what’s going to happen in the stock market.
Since 2/3 of our stock market is driven and our gross domestic product is driven by consumer spending, it’s real important that you look at the demographics of our society and how when people get older, they have a tendency to spend more or less of different types of things and how that affects different sectors of the economy and the economy overall.
Very bright guy, Harvard Business School. I think you’ll enjoy listening to him. I highly recommend you show up.
Patrick: I know that people can also contact you during the week, Richard. They can catch you at your office direct, right?
Richard: Yes, Sir.
Patrick: That’s (972) 758-4484. If you want to join the call today or the conversation, (972) 299-5759. Connect with Richard direct during the week at (972) 758-4484 or register for the event on the 16th at (972) 325-1700. No salesman will call. You’ll just get a confirmation letter if you want to come either the 16th or the 22nd out in Garland. It will be a great presentation, and then dinner to follow. You’ll want to stick around. We’ve got so much more of the show. We’ll be right back.
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Patrick: Welcome back to Financial Fortress Radio. I’m here with Richard Jordan, the Chief of Investment Strategies in the DFW area. Richard, we’ve got a great show. You got a big article this week on the bonds and the bond bubble. What’s going on in bonds this week?
Richard: Well, it’s not just this week. It’s been going on since last year. We saw a record amount of money getting poured in the bonds when the bear market began back in ’07 and ’08, and that’s normal.
But when the stock market recovered last year in ’09 and ran up another 50% or so since then, people still carried the fear from the previous bear market and, as a result, they have continued to pour money into bonds hoping that they’re safe.
For several weeks now, I have told clients and investors that we are in the middle of a bond industry bubble and, recently, last week, Warren Buffet, on Thursday testified that a US government inquiry commission on the financial crisis and he said that municipal bonds are expected to go down soon for three reason, the same three things I’ve been talking about to my clients and to my investors for the last six months – overly generous retirement and health benefits that have been promised to the baby boomers working in these cities and states who create those municipal bonds, over 40-50% of the workforce, depending upon the municipality, are all retiring in the next five years, and they’re all expecting these huge pensions.
Some of these government service jobs have 90% pension rates. 90% of their salary will be paid to them for a lifetime. And although the actuary tables when they created these pensions 40 years ago expected these people to only live two or three years past 65, now the average person lives to about 80. So that’s another 13 years that are not expected that they will have to pay for.
Then you combine that with property tax collections being down 15 to even 50% in some cities and states like Florida, like Nevada, like California. And finally, sales tax collections down 10% in the best areas, like Dallas, but down as much as 50% in some of these cities and states.
So of course Warren has already dramatically reduced his municipal bond portfolio in the first quarter of this year, and we didn’t hear about that until just about a week ago.
Patrick: Very good. I know that he has a pretty big portfolio as well, doesn’t he?
Richard: Yes. He had over five billion dollars in munis and he cut back almost 50%. Anything that looked the least big risky in the wrong areas, he immediately sold. That is because of the record defaults that are being forecasted in munis right now. There was another article in the Wall Street Journal about it last week, and there was another article on Money News.
So while the yields look attractive on munis right now, the reason is when yields seem like they’re high, it’s because there’s an undercurrent where they’re expecting a record number of defaults.
Now what happens when they default? You not only don’t get your interest, you lose your principle. Does that sound like a safe investment?
Patrick: Well, are most of the investors out there right now in the mutual funds or do they buy the municipal bonds direct?
Richard: Most are buying actually through the bond funds. Again, the bond funds are being created by large brokerage houses and they’re being pushed by the bond brokers at the large brokerage houses who are driven by what? Commissions.
Since they have no requirement to disclose any additional risk beyond what’s in the prospectus, even stuff that’s in the news, like this has been recently. It just demonstrates they don’t have a fiduciary duty to you and you’re risking your life savings by giving your money to those folks.
Patrick: Do you think the government will, in any way, try to bail those municipalities out?
Richard: There’s a possibility of that. But how many more bailouts can we produce in this country? We’ve already got a record amount of debt and it’s becoming real unpopular to add to that debt in an election year.
Patrick: I understand there’s a lot of transition this year from people trying to, in a sense, fire the incumbent. So what can we do?
Richard: Again, I would be selling out of the bonds and I would be taking a look at other types of investments right now. There’s simply too much cash that have gone into these bonds and we’ve got a bubble that’s ready to burst. So let’s take a look at bonds that are considered the safest like US treasuries.
The average yield on five-year treasures this year has dropped to 1.9% and that’s the lowest rate in the last 25 years. Most of my clients are seniors, and seniors have a much higher rate of inflation than the average economy.
The consumer price index that the government touts does not include food, does not include energy, and it limits healthcare cost to 4% of income. When you add those three things in, there’s a much higher percentage of a senior’s budget. What happens is the amount of inflation they’re experiencing is typically 3-4% higher than the consumer price index.
So when the government is quoting 1%, a lot of seniors are experiencing 4%, 5% even. So when they’re only getting 1.9% on a five-year treasury. They’re losing 2-3% per year in purchasing power.
Let’s take a look at the rate over the last three years because of the record amount that’s gone in is still only 2.28%. So for most seniors, this is a losing investment.
Patrick: How much do you think someone can lose on this?
Richard: Again, as a result of the deficits, we are going to expect o see rates go up as soon as this election is over. I expect that we’re going to see rates go back to their historical averages. That five-year treasury used to be an average of 3.48%, about 3.5% over the last ten years.
The market value of that bond will result, if it goes up, the current market goes up to 3.48, that 1.9 is going to be worth 44% less.
Think about taking a 44% loss on one of the bonds that you thought would be the safest possible investment, a US treasury. Again, that’s more than most people lost in 2008 in the stock market.
Patrick: One of the things I’m curious about with these treasuries. You look at the average mutual fund out there that has a money market fund. Are they stuffing treasuries in those? And if so, do the money market funds that generally have a consistent dollar price, are they going to be affected by these changing rates?
Richard: Most of the money market funds are buying short-term treasures and those are 90 days or less, no longer than six months. The rates on those products are typically around 2/10 of a percent on up to about 4/10 of a percent. Again, we’re dealing with record low returns on these products. The yields are unbelievably low.
And now you know why the Chinese and the Japanese have started cutting way back on buying US treasury bonds and why you should, too.
Patrick: Who is going to fill in the gap? If we lose the Chinese and the Japanese that have purchased so much of our debt in the past, who is going to fill in?
Richard: Well, what’s been happening is the Federal Reserve has been buying these bonds that the Chinese didn’t day. That’s one arm of the government buying debt from another arm of the government. It’s robbing Peter to pay Paul. It just does not work long-term.
Patrick: I know you’ve got a workshop coming up. Before we go to the break here, can you tell us about this coming workshop?
Richard: Yeah. The workshop will cover some of these issues. We’ll be at the Master Grill Steakhouse at Firewheel Mall in Garland. That’s right there where Garland Highway 78 hits the George Bush Turnpike. So it’s pretty accessible for anybody in the North, or Northeastern, or Eastern suburbs. It will be at 6:00 p.m. this coming Wednesday, June 16th and the following Tuesday, June 22nd.
Patrick: And how would they register?
Richard: You can call (972) 325-1700 to register. No salesman will call back. Just leave your name, address, and phone number so we can send you a confirmation letter.
Patrick: So it’s (972) 325-1700. They’re going to get an hour presentation from you. What’s one or two of the topics that you’re going to cover?
Richard: Again, we’ll talk about how the wealthy invest differently and how they save money on taxes; both income taxes and estate taxes while they’re managing their investments.
Patrick: That’s great. (972) 325-1700. Or if you want to call Richard direct this next week, it’s (972) 758-4484. This is Financial Fortress Radio. We’ll be right back.
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Patrick: Welcome back to Financial Fortress Radio. Richard Jordan is the Chief Investment Strategist in the DFW area here on Financial Fortress. Richard, I know one of the things that you really have talked about, but you want to get into a little more is going back to the fees associated with your retirement accounts. Most people just don’t know how much they’re paying, do they?
Richard: They have no idea. Because the average investor never reads a prospectus, the typical person believes that they’re paying less than 1% to have their accounts managed when, in fact, they’re typically paying three to four times that.
Patrick: What are some of the other things that are included in these undisclosed fees?
Richard: Well, the undisclosed fees are just that. They’re not disclosed. They’re referred to in the prospectus by various, vague terminology. As a result of that, the government and the SEC allows these mutual fund companies to get away with the language that’s in there.
Certain types of fees have to be disclosed like ordinary initial commissions, but other types of compensation are referred to in vague terms that actually are forms of commissions.
For instance, if you sell so much of this mutual fund, we’re going to buy a trip to Tahiti for everybody on your brokerage team. We’re going to allow you to go golf at the finest golf course in your area. We’re going to spend a lot of money on special things for your people. Those are typically referred to in vague terminology as just “compensation.”
As a result, the investor can’t figure out what that stuff means, if he even bothers to read the prospectus.
Patrick: I guess it gets a little fuzzy, and I’m sure that’s kind of their intent, but if we were to look at it, are there any keys to finding some of those expenses or do we just need to call you?
Richard: That’s what we do for a living. If I could teach you everything I’ve learned in the last eight to ten years about finding undisclosed fees, it would take several weeks. We can’t get that covered in a show; we can’t even get that covered in a typical one-hour meeting.
Most people’s eyes glaze over when I start talking about some of this terminology. But I can show the results to people if they’ll simply bring their brokerage statements in and allow me a couple of hours to go over those statements because I can find the real information and show them what they’re actually paying.
I had a client come in that had been using a major brokerage house last week. And she was very smart. She was a very bright lady and her husband had been very smart and had accumulated well over a million dollars before he had passed.
But over the last 15 years, she wasn’t taking any money out of this account. It had gone down by about 45%. She was greatly concerned there wasn’t going to be anything left at the end for her heirs.
And she said, “But I’m only paying an average of about .83% on all these different funds, and I just don’t understand. My management fee is only about1%. How can I be losing money this fast?”
I went through and analyzed. She was in about 30 different funds. All the information that I have access to as a Registered Advisor that the public can’t get their hands on. And what I found was that her actual cost was 3.18% instead of .83%. Is that a little bit of a difference?
Patrick: So she was losing money no matter what the market did almost, it seems like.
Richard: And her fees – her undisclosed fees – were three times higher than her disclosed fees, meaning that she was paying four times what she thought she was paying for fees.
Patrick: Wow. So how much had she lost?
Richard: Again, she had lost about 45% in the last 15 years when the S&P 500 index probably has averaged around 5-6%. And of course, most of the gain in the S&P 500 was in the 90s, between ’94 and ’99. In the last ten years, as everyone knows, the S&P is down about 20-25%.
Patrick: Wow. That’s amazing. Speaking of the 90s, one of the things that I do want to make sure people know is that Harry Dent is going to be on the show next week. I think he’s one of the good guys. He’s been around for a while. I actually learned about Harry in the 90s when he came out with one of his early books called The Great Boom Ahead. It was done in ’93 and he very accurately assessed what was going to happen in the next ten or so years, plus.
And then in 2009, his latest book is called The Coming Great Depression. He’s using some interesting tools to assess what’s been going on in the marketplace, and what’s coming ahead.
But he has been very accurate to a great degree – not perfect; I don’t think anybody gets it all the time. But he has done a good job. So we wanted to get him on the air. We thought he’d give you some good information. So listen next week, 5:30-6:30.
Richard: It should be a great show. Again, Harry Dent is a Harvard Business School economist. He started writing books in 1989. He’s got about seven or eight books out there. A lot of his research is based on consumer spending patterns compared to demographics.
His major theory deals with the fact that young adults, of course, when they start having children and [38:38 inaudible] them, keep spending money more and more as the children grow up. It’s funny how kids cost money, isn’t it?
Patrick: A lot of money.
Richard: And then after the kids finish college and leave home, the spending slows down the last 15 years of the working life for the typical adult in America. They end up saving more and more to prepare for their own retirement.
For the baby boomers, that means that there have been record amounts of savings that have accumulated over the last 10-15 years, but now with the fear in the market and people flocking the bonds, a lot of people are going to get hurt by this bond bubble.
Patrick: We were just talking about that in the last quarter. The bond bubble is going to be significant. There are going to be more people losing more money than I think anybody would expect. Wouldn’t you agree, Richard?
Richard: Yes, and losing money on things that are considered the safest possible investments, like US treasury bonds or treasury inflation protected bonds, those are both a great risk in the coming market; a bond bubble bust.
Take a look at the base rate for a five-year treasury inflation-protected securities right now – 0.5%. Take the last 12 months inflation late – and again, the inflation rate that the government creates is different for these bonds than it is for the consumer price index that you hear announced. It’s even lower.
They say it’s 0.9% in the last year. Right now, the TIPS that have just been recently released are paying 1.4%. Think about that. 1.4%. With over $3 trillion in cash still sitting on the sidelines combined with high unemployment, we now have a substantial risk of deflation.
What would happen to your treasury inflation-protected security if we did go through deflation? It would drop below that 0.5%. In fact, this is the only bond that is allowed to drop below zero and erode your principle.
So you could actually start losing money on this. Not only would it be worth less in the open market if you tried to sell it, but the actual face value that if you held it to term, if you held it to maturity, the amount returned to you by Uncle Sam would be less than what you initially put in.
The reason you don’t know about this – Uncle Sam doesn’t have a fiduciary duty to explain bonds to you and neither does your broker. But we do, and we want to explain these things to our clients so they understand that they can get the same level of trusted advice that the wealthy have enjoyed since 1940.
Patrick: You’ve got a workshop coming up that should help them understand some of this. Wouldn’t you agree?
Richard: You bet. We’ll talk about the five key financial strategies that millionaires use on Wednesday night, June 16th and Tuesday, June 22nd at 6:00 p.m. at the Master Grill Steakhouse at the Firewheel Mall in Richardson.
Patrick: And how would they register?
Richard: You can call (972) 325-1700.
Patrick: (972) 325-1700. You can register to come to the June 16th at 6:00 p.m. workshop with Richard Jordan at the Master Grill Steakhouse. I know that it’s a good 60 minutes of a lot of content.
Richard: You bet.
Patrick: And they’ll be able to visit with you, ask you questions and enjoy a nice dinner afterwards. That’s (972) 325-1700. Register for the event. No salesman will call. It’s just a confirmation. We’ll be right back with Financial Fortress Radio. Thanks again.
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Patrick: Welcome back Financial Fortress Radio. This is Pat Dougher, Richard Jordan is in the house and we’re talking about ways to help you invest correctly. I know we’ve been talking about the undisclosed fees in the marketplace that’s a real shocker for most people, the bond bubble and how it really has a potential to be a real damaging effect to your investments and your portfolio in the next year.
Our guest next week being Harry Dent. This section, I know you wanted to talk about the Roth IRA. Explain what the Roth is, Richard, and why someone might consider transforming their old IRA into a Roth?
Richard: The Roth IRA is a different type of IRA. The Traditional IRA, you use pre-tax dollars to create an account, and then that account grows tax deferred. What that means is the dollars going in, the principle, were never taxed and then the dollars that the account made were never taxed so all of that money is taxable when it comes out.
Patrick: Very good. We get that. That’s a regular IRA.
Richard: Traditional IRA, or Rollover IRA. There are number of terms for them; SEPs, etc. Then we’ve got the Roth IRA and the Roth basically uses after tax dollars going in and then all the gains after you create the Roth IRA are tax free.
And since you’ve already paid taxes on the dollars before you put them in the Roth and all the gains in that type of IRA are tax free, that means all the gains that you take out of that are going to be tax free for your lifetime and for the lifetime of your heirs.
Patrick: So it’s a little bit like there’s two containers. One, you’ve never paid any taxes on the dollars that are in that IRA, so when it comes out, you pay taxes on it. If you do a Roth, that container, the taxes have been paid on the way in before they get there, and everything that comes out of there is tax free.
Richard: Exactly.
Patrick: I understand that we’ve got a rare opportunity in the next couple of years to change the Traditional IRA to a Roth. Tell us about that and why there’s a unique opportunity there.
Richard: Again, Congress passes laws to benefit who? The political action committees that represent the large companies and industries and the wealthy. This change in the Roth IRA law that went into effect at the beginning of this year was designed to help the wealthy who have record amounts of money sitting in large 401Ks and large IRAs of various types; Traditional and Rollover types.
And they’re scared that we’re going to see much higher tax rates over the next ten years, and that fear is well founded because of the large budget deficits. The Tax Foundation report that came out in March said we would have to effectively double our tax rates – and that includes the people in the 10% bracket, would have to go to 19. The people in the 15% bracket would have to go to 32. The people in the 25% bracket would have to go to 58%. It goes on and on. Effectively, double tax rates for ten years to pay off our deficit.
Patrick: Isn’t that a little bit scary? Because even if we gave more taxes in, at the rate that they keep over spending it, won’t they just increase the dollars spent?
Richard: Well, they can do that, but I think what will happen is people, eventually, will make a demand for a balanced budget upon Congress. That’s going to be a demand that’s going to be made by the people because they understand the pain they feel from the increasing tax rates. Until people feel pain, they don’t demand Congress changes.
So here we have the wealthy that got this Roth IRA law changed that was designed to benefit the lower and the middle class. Under the new law, anybody, regardless of their income level can roll their Traditional IRA into a Roth IRA. They’ve got two years to pay the tax on it interest free. When’s the last time Uncle Sam gave you a loan interest free?
Patrick: Never. I know their interest rates are very, very high and they charge penalties on top of what’s there.
Richard: Right. And unlike a Traditional IRA, you do not have to take a required minimum distribution out of a Roth. If that money is just sitting there waiting to go to the next generation, it can now sit there and continue to accumulate.
The reason this opportunity is so tremendous is because we’ve had a little dip in the market, but we’re still in a bull market so over the next 16 months, it is likely that this bull market is going to continue.
If you convert today to a Roth IRA and this market runs up 30% over the next 16 months, and there is a likelihood that will occur, then the run-up in your stock portfolio would essentially pay all the taxes due on your new Roth IRA. And now you own a truly tax-free account that can benefit you in generations for up to five generations to come. And with the use of clever estate planning, we can even extend it past that.
But we can easily stretch a half a million dollar Roth IRA into five generations. Just let us show you how.
Patrick: If somebody wants to do that, they can call you directly at your office, correct?
Richard: That’s correct. Or they can come to the seminar. Either way. My direct number is (972) 758-4484. But that’s also my trading desk so if the market is open, I’m generally busy with clients or I am busy online, so I would recommend you call after 3:00 p.m.
Patrick: Okay. So that’s (972) 758-4484. And they can discuss their IRAs and all their investments. You can look at what the options are.
Richard: Absolutely.
Patrick: (972) 758-4484. Let’s talk about the workshop you’ve got coming up.
Richard: Absolutely. They can come to the seminar and kick the tires, get a chance to meet me, hear about the five ways the wealthy invest differently and that’s coming up at the Master Grill Steakhouse at the Firewheel Mall this coming Wednesday night, June 16th at 6:00 p.m. Just call (972) 325-1700 to register for that.
Patrick: And if they do, they’ll get a confirmation letter. Is that correct?
Richard: You get a confirmation letter in the mail. No call from a salesman. Just simply leave your name, and address and phone number on the voicemail. If they come, they’re going to get a chance to learn how the wealthy get their principle and high returns in income guaranteed on their money, how they get high returns even above index averages without taking on necessary risk in stock and bond markets or variable annuities, how to identify poor investments with high fees, how the rich legally avoid paying up to 99% of their capital gains taxes, and how the IRS levies an outrageous tax of 68% or more on many middle class folks’ IRAs when they pass away and how that won’t happen to the rich because they’ll either convert it to a Roth IRA or they’ll use some other clever legal entities to protect it. We talk about all that at the seminar.
Patrick: That’s the June 16th – this coming Wednesday night, 6:00 p.m. Master Grill Steakhouse. That’s over in the Firewheel Mall in Richardson in the Garland area. If they register, they can come to the 16th or to the 22nd which is the following Tuesday. Correct?
Richard: Correct.
Patrick: And there’s 60 minutes of great information. Then afterwards, dinner but they can ask you questions, learn more about what you’re doing, what you’re recommending and even if they want to know more, then after that they can sit down with you in an appointment kind of a setting. Correct?
Richard: Absolutely.
Patrick: Okay. You can just call (972) 325-1700 to register for this great workshop. Or if you want to call Richard direct it’s (972) 758-4484. Don’t forget, next week we’ve got Harry Dent. Harry’s got a couple of books. Actually, he’s got several book out there, the latest one being The Coming Great Depression.
You won’t want to miss that. Harry’s a good guy. You’ll enjoy the presentation and what he’s talking about there. It will be a great show.
One last time, if you want to register for this coming workshop, it’s (972) 325-1700. There’s so much to come, so much to talk about. We will be talking to you next week on Financial Fortress Radio. Thanks again. Have a great week.