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Highlights from this episode include:

  • How the “Rapid Retire Program” can speed up your retirement by up to 10 years sooner than your peers (3:02) 
  • The “Corporate Bond ETF Method” that mitigates a large chunk of your risk in your portfolios (6:11) 
  • 6 down stocks that can potentially be lavishly profitable as the world reopens (13:05) 
  • Why going conservative with your portfolios right before retirement makes you run out of cash too quickly (and how the “bucket concept” prevents you from doing this) (17:16)

Ready to stop doing what you hate? Go to https://RetireNowRetireWow.com and fill out the Game Changer form to secure your financial future.

Get our 5 Year Countdown to Retirement Guide and make sure you’re on track to retire (no matter where you are in your career). Visit brightfg.info/5yearguide

Read Full Transcript

Do you hate the thought of working past 55 or 60? Do you hate not being able to live the life you deserve today? Do you hate not knowing what your financial future looks like? It's time to stop doing what you hate, here's your host, Mr. Harold Green.

00:38: Oh, hi everybody. This is Harold Bree and it is time to stop doing what you paid. I hope you are having a fantastic day. My day is going just getting started, to be honest with you guys. I was kind of up early this morning, and honestly, I've been wondering to change the amount of time that I sleep, but, you know, I've just gotten so used to getting up so early in the morning, it's just kind of hard, right? So I need to figure out what to do to, to try to get some more Zs. And so I'll let you guys know what I come up with, but today we're going to be talking about something very interesting. And the title of my show is called risk growth, value OMI. And I kind of took that from you know, one of my favorite shows is, you know, movies of all times when I was a kid was the wizard of Oz and, you know, they, they were you know, going through their little maze and on their journey. And you know, they, they started chanting this thing, lions, tigers, and bears Ohlmeyer or something like that.

01:28: I don't quite remember what it was, but I just kinda came up with the risk growth value. Oh my. Because it's really hard to make sense out of all of it and where you should be pointing your direction. And I want to share with you guys a little bit of a, a challenge I've had recently, I've been doing the show now for over a year and when it comes to finances, you know, there's so many things that you can talk about, but the question is, is how do you talk about things in such a manner that would deliver the most value and still just up until about five minutes ago, you know, I had really no idea in regards to what the title of my next show was going to be. So I, you know, I got up from the desk, I went over to my protein shake, took a swig of the protein shake, you know, went to the bathroom, came back and then it just hit me risk growth, value OMI.

02:26: And we're going to be talking about you know, these three items, these three things and how, and how they work in relationship to the other. And, and also, you know, I was a little bit concerned about the direction of the show and where it was headed. And so I, I took a little time and here's what I've decided to do, or the foreseeable future that show is going to be focused on the rapid retire program and all of the things that go into the program. And so I think, you know, I've shared quite a bit about the rapid retire program in the past. And I want to put out a little bit of a disclosure because we are going to be talking about investments mental and using our rapid retard program. There can be no guarantees made that you will be in a position to retire seven to 10 years sooner or any specific period.

03:20: The results of the program is going to vary by the user. And then as far as the investments go past performance are no guarantee of future results. All investments, including real estate are speculative in nature and involve substantial risk of loss. And I encourage you guys to invest carefully. And then, so go get the personal advice from your own professional investment advisor before you make any decisions. And so I can't guarantee you any success if you act on anything that I say without me actually being your investment advisor and having contracts and things like that side. So we're really going to start to focus on this. And I really, really, really want to work to position people that really seriously want to be ready to retire the next five to 10 years. And today is inauguration day. We have a new administration coming on board.

04:09: And so what that means is it going to, it's going to mean new things in regards to different regulation and different ideologies being implemented and so on and so forth. And one of the things I've I've been talking to people about is some clients are extremely happy that, you know, their guy won and some clients are extremely sad that their guy lost. And my thing is, you really can't look at it like that. I know it's hard, but the media does such a good job of putting one side against the other. And that's one of the things that have this gusted me over the last year or two, it's just all of, you know, the lying and mudslinging and hyping and all of these crazy things that I've heard people say. And I don't want to get into that too much because I don't want that to detract from what my, what my true mission is.

04:56: And that is to help put you in position to retire within the next five to 10 years, by taking advantage of everything that's going to happen in this market. Because to be honest with you, I have no idea how long this thing is going to run or how hot it's going to run. So we're going to talk about putting yourself in position to take advantage of everything that's on the table. That's right. Or you, so are you guys ready? Are you ready? Are you ready? Are you ready? All right. One, two, three. Let's get it. All right. So the first thing we're gonna talk about is risk. Okay. And we all know what it means to analyze your risk, to look at your time horizon, to understand, you know, your risk tolerance and things of that nature. But I'm going to share with you guys, this has been so misconstrued.

05:54: It is re [inaudible]. And I want to give you guys some examples of building a simple portfolio and analyzing that level of risk. Okay. So I'm going to go into a model that I've built for some of my portfolios, and it's called corporate CPT bonds and that's corporate bonds. And so I use corporate bond ETFs to help mitigate the risk and the portfolios. Okay. And so the long-term corporate bond model has a risk score. And I use a software called Riskalyze because it helps us to analyze the level of risk in a client's particular portfolio. So corporate bond ETFs, I have about five of them in that portfolio. Okay. And it has a risk score of 26. All right. So we're going to set up John and Janice forthright. Okay. That's their name? John and Janice forthright. So if you're out there, John and Janice forthright, this is a name that I've that I've made up.

07:00: Okay. So don't take offense to it. All right. So John and is forthright. Okay. And we're going to say John, and is forthright are worth basically $1 million. And so we're going to build a $1 million portfolio. And when I say worth, I'm talking about their investment portfolio, I'm not talking about the amount of cash they have in the bank. I'm not talking about the value of the rental properties or anything like that. We're just, we're just looking at there, they're worth in regards to a portfolio that we're going to build for them. Okay. So we're looking at risk and what that means and the overall situation. So $1 million, and we're going to go with a model call CPT, corporate bonds or ICPT bonds, all right. As a risk score of 26, and what that means is zero or one being the least risky and 99 being the most risky.

07:56: Okay. So with the corporate bond ETF portfolio, we've got a risk score of 26 and the potential annual return is 5.1%. Now we're going to get into growth and value. We are in a second, but we need to establish a baseline of what it means to the team, Herman, the appropriate level of risk. All right, John and Jen is forthright, has a risk score of 70. When we did their questionnaire, based on what their tolerances, the risk score came out to be a 70. So one being the most conservative to 99 being the most risky. So we got a million dollars to invest, and let's just say, they, they didn't want to take a lot of risk, but, and at the same time, they, they wasn't really sure of how things were going to go with the market. So let's say we just put a whole million dollars in the corporate bond ETF portfolio with a potential return, 5%.

08:53: Okay. Now here's some caveats that I want to throw in there. Now the risk score is a 70, but if we put everything in the corporate bond, ETF portfolio, the risk score is only going to be a 22. Now here's the tricky part. This software does not take into consideration all of the other assets that they may have. So we have to plug these things in. So I'm going to add another account. Okay. And I'm going to enter their real estate into this overall picture, this, this overall game plan. Okay. So we have about 3 million, $3.5 million in real estate and it's fully paid off. Okay. So it's money coming in every single month. They don't have to worry about it as fully paid off. They can sell the properties anytime they want. They can take lines of credits on the property, anything. So real estate, the way I manage my assets, real estate counts as a one cash real estate annuities.

09:53: Any, anything that doesn't really have a lot of downside risk is considered a one. Now, when I put that in there, $3.5 million in real estate, and then $1 million in a, you know, in a corporate bond portfolio, the risk score comes out to a six overall. All right. So now I know we got work to do, because the point is, is sometimes people come in and they'll say [inaudible] or a moderate or whatever, and they really have no idea. So they may come in and say, they're conservative, but their investments, when I add everything up and plug them in one by one, turns out to be like an 80, and I'll say, well, did you know that you're investing like well above or well below your risk tolerance? And a lot of people will say, yeah, no, I didn't know that. Okay. So if they're way down there and we need to get them up, we need to consider the type of assets to put into their portfolio.

10:46: Okay. In order to get them up to where they need to be. So $3.5 million in cash that is going to be a very, very, very low 50 feet. So I want to get into growth versus value. So growth stocks are a companies that are considered to have the potential to outperform the overall market, just because of their future potential. And then grow with our companies that are valued, you know, their, their prices they're valued lower than what they're, you know, what they're actually worth. And when you look at that, it means that over time they're going to provide, or hopefully provide a superior return. You know, just, just because they're undervalued. Now, look at something that I've been working on for a lot of my clients. And we have, you know, the software that we use to, to figure out where things are and, you know, maybe where things are going to be.

11:39: So I just want to, you know, build up portfolio for you here on the mic this morning and just kind of share with you, like, you know, how, how you can get your risk to the point where it really needs to be without sacrificing too much. And so I'm not going to tell you the weights or anything like that, but we're just going to go with the standard stuff. Okay. I'm going to go with the standard top three stocks of, yeah. Amazon. Okay. We're going to go with Apple and we're going to go with Tesla because that's a very hot stop right now. And I'm going to go with PayPal just because that's where things are going to go. And we're going to look at square and we're going to look at Enphase. So energy Inc. So we got our, we got our stocks here.

12:22: Okay. And you know, that's basically one, two, three, four, five, six stocks that I would consider growth. Okay. Now I'm going to look at six stocks that I, me being Harold Green as an investment advisor would consider growth stocks that are worth less than, or their prices like really, really low. And we're looking at this from the standpoint of the coronavirus and we, you know, the travel industry is beat down really bad. And I'm going to tell you right now, don't go out there and buy a butt-load these beat down stocks, because we have no idea right. Where the stocks are going to go. And I'm just going to pick six docs off the top of my head ahead that you know, that are, that are down. So we're going to go rail, Caribbean cruise lines. We're going to put them in there. Okay.

13:16: We're going to put in when casinos and resorts, we're going to put in diamond rock hotels. We're going to go with Eventbrite. Okay. We're going to go with TripAdvisor. Okay. So we got one, two, three, four, five. And let me, you think of one more Southwest airlines. All right. So we got to put an airline in there, Southwest airlines. Okay. So I believe we have about 12 stocks in our portfolio. Okay. So now I'm going to go in there and put the weights and I'll tell you guys what the risk scores are. Once we get the weights and what the potential returns are, and I'm going to put a super weight on one of the holdings and we're going to leave about $30,000 in cash. Okay. So now this portfolio has a risk score of 95 and there's a million dollars in there.

14:08: So remember their risk score is 70. Okay. And we were going to go long-term or short-term corporate bonds or, or corporate bonds, which had a risk score of 26. And then they have $3.5 million in real estate. So basically one of the things we look at now is what is their current risk score with $1 million in the stock account and $3.5 million in real estate, basically it's 42 now they're well below their 70. So what can we do in order to increase their risk score, to meet their objective? Well, one of the things we could do take the real estate, for example, and again, this is for sophisticated investors, right? There's something called the margin account. You can either get a margin account and then double, okay. You can double the portfolio. So if I say now there's $2 million in that portfolio because we took out a margin loan.

15:14: Now we're at a risk score of 61. Okay. So that's within nine or 10 points of the risk score of being a 70. So risk world value. We just put these three together in order to generate the kind of risk score based on their overall situation that they can possibly handle. Okay. So a lot of people that I work with that are looking at retiring within five to 10 years are not necessarily sitting there holding $3.5 million in real estate. Sometimes I'll see them holding maybe a million dollars in real estate. And so outside of their house, okay, I've seen like 1.5 million. So let's go with that 1.5 million based on what I've seen so far, and then say $2 million. Now that takes the risk score up to 85, which is really, really, really, really high. Okay. So we're going to have to back that down and maybe not use the margin account as, as much, or maybe look at doing something a little bit different, but today I just wanted to share with you guys that sometimes, although you think you might be investing according to your risk tolerance, you might not be.

16:26: So the first thing you have to do is analyze your overall holdings and analyze your overall picture, and don't count out your cash assets and don't count out your other assets in order to determine your level of risk. Because if you're sitting there with a half, a million dollars in your checking account or whatnot, and you know, you're not investing as growth as aggressively as you should. Maybe we've got to take a look at that because maybe now is the time that you get the biggest bang for your buck in the market that we're in, based on how you're investing your money. So again, this is focused on people that want to retire in the next five to 10 years. And so, you know, if you're there, maybe you have a million dollars in your 401k, maybe you have a million and a half. I don't know.

17:06: Maybe you have a million and a half in your investment account is really time to analyze that and make sure that you are putting yourself in position in order to have a successful life in retirement. One of the problems I see when people retire is they start to go conservative within five to 10 years of retiring, because that's what they're told to do. Well, if you're going to implement the bucket concept, and that's one of the strategies and the rapid retire of having a short term bucket, a long-term bucket and an intermediate bucket, then you don't necessarily have to put everything in a conservative mode because you're not going to need all of that money within the first five years of retirement. God, I hope you don't. And so therefore you have time on your side and these buckets can, they can roll according to your life.

17:48: And then also according to the markets that we're in. So if we're being super aggressive and our long-term bucket and say something happens with the market, we can always pare that down and we can always pair the risks down in these buckets and take them up and down based on how things are going in the market. Again, I am a active investment advisor versus a, you know, buying whole strategy. And that allows us to move in and out of positions in your IRAs, without you actually having to pay long-term capital gains or short-term capital gains because you don't pay tax on the money until you access it. So I just wanted to hit you guys real quick with, you know, the show today. And hopefully you've learned a little bit in regards to how to set things up. If you are looking for a, an advisor that you want on your team that understands these things and understands how to put them all together the right way, then I'm probably your guy.

18:39: Check me out, retire. Now retire wild.com. That's the website, download the rapid retire brochure. Take a look at the game. Changer forums, submit some information for me, or you can straight up call me at (808) 521-4401. And I will see what it is going to take to get you in position to retire in the next five to 10 years, because they are going to be a lot of changes in our country, moving forward, some positive, some negative. And we want to understand how these things are going to impact your long term financial plan. So until next time, guys, thanks for letting me share with you just a little bit about risk growth, value mine. And until next time, one, two, three,

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