Well, we're paying the price for all that free money that happened over the
last decade, and now things are starting to catch up. It's like the
tighter you pull a rubber band, the faster and harder's going to snap back.
And then when we look at all the geopolitical situations, especially in Israel
right now, them being so close to the fuel sources, the oil sources
of the ramifications and ripples to the economy. With Ukraine that being such a
big energy source, so energy is big plus with Ukraine, and they're grain
that has ripples effects as well, So we're not holding a good card hand
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ever, And welcome. You are listening to watching the Financial Survival Network.
I'm your host, Carrie Lutz, and hey it's Thursday, October twelfth.
We just got the PPI numbers yesterday and the CPI numbers. Today, we're
talking to Brad Williams to get his take on it, and you can find
brad site. Ask Bradwilliams dot com. If you got a quick inner comment
what you think? Do you think inflation's going higher? Lower? Sideways?
Just send us an email with your thoughts and anything else. Klatcarrie Lutz dot
com. Hey Brad, great to have you back on the show. So
we get the CPI number. What's your take? Well, we're paying the
price for all that free money that happened over the last decade, and now
things are starting to catch up. It's like the tighter you pull a rubber
band, faster and harder's going to snap back. And then when we look
at all the geopolitical situations, especially in Israel right now, them being so
close to the fuel sources, the oil sources ramifications or ripples to the economy.
With Ukraine that being such a big energy source, so energy is big
plus with Ukraine, and they're grain that has ripples effects as well. So
we're not holding a good card hand right now, No we are not.
So what is the solution for an investor? How do you protect yourself against
what's happening here? Well, I think you know, if you're very young,
this is an opportunity because as prices drop, you're buying it a discount.
The problem is ideal primarily with the retirees, and they don't have that
time to make up when they take that risk. So looking at income sources,
looking at alternative sources of investment that do good in times of high inflation,
that's key. Okay, So what first, Just let's review the numbers,
because many of you out there might not have seen them, might be
unsure of what it is. What did we see here? We saw significant
get rise this month in the in the core CPI and energy and food were
two of the big drivers there. And now as we're seeing the inflation,
then we're going to have the issue of the Federal Reserve raising interest rates and
then that crowding out uh individual buyers from the from the financial markets because the
government's going to be need more money to pay interest on the debt. We're
looking at a two possibly a two point two trillion dollar deficit. Jeez,
that's like that's a lot of money, isn't it. Well, you know,
Everett Dirkson said many years ago, a billionaire a billion there pretty soon
you got some real money. Well, I think we're long past average numbers.
Yeah, I think we're at a trillion here and a trillion there and
pretty so you're looking at some real money, right, that's correct. And
then when when you look at you know, the things happening at the border,
Carrie, we just investors who are at or near retirement need to play
it close to the vest and they can't play by the same rules that got
them to the game, right and those rules? What were those rules and
why don't they apply now? Brad Well, when you have you know,
your typical seventy thirty stock bond portfolio, Well, if you don't own the
individual bonds and your bonds are in mutual funds, you've pretty much gotten cream.
You know. If you own the bonds yourself, which we do for
our clients as individual managed portfolios, you at least have a maturity date where
you get your money back. But in a mutual fund you don't own the
bond nor the interest rate, so you get creamed in times like this,
right, Yeah, you're getting killed. Right, So you want to stay
away from bonds or do we go to short term bonds? Well, shorter
term or you know, if you're buying bonds for the income that you're going
to get from it, and you're satisfied with that income, then you just
ride out the storm and the fluctuations. It'd be the same as if you
bought a route property and maybe the neighborhood went through some changes positive been negative.
As long as you're getting that rent and you're getting money on your money,
you're good. You know it'll mentually come back. But you know it's
that short term fluctuations that you've got to avoid. Yeah, that can definitely
hurt. Hey, so the short term fluctuations, but you know it's a
lot trickier than that. I mean, what are you supposed to do here
when inflation's going up? Uh, you know, the economy is looking real
bad. How can you really protect yourself? Well, Having the portion of
your assets obviously in precious metals is one edge, but you've always got to
look at those precious metals is what they really are. Their edge. They're
not an investment. If you want to make money on the metals, you
buy the paper and trade the futures and options. But if you're wanting to
hold value on your portfolio, then you own the hard metals to do that,
but you don't want to. You don't want to go out and cash
out your IRA and put it all in gold. But and you know,
having some of that after tax money sitting around as a hedge will help you
during times like this, and then looking at more conservative income oriented investments is
good. Okay, So all right, and what age is are you that
this is particularly important? Well, you might look at your life like climbing
amount You've got the accumulation stage where you're climbing, and the distribution stage where
you're coming down the mountain. Most deaths happen on the way down, so
you've got and then in the interim you've got that preservation stage where say when
you're fifty five you need to start de risking, and then once you hit
sixty you're probably in that five year preservation stage where you're shifting over to the
to the income. I look at things like a simple formula TR equals I
plus G total returns equals income plus growth. And so as you get into
retirement and close to retirement, you're shifting to the eye which is in and
away from G, which is growth because G can turn into L, which
is lost and So what you don't want is what happened to a lot of
people in two thousand and two thousand and three, in two thousand and seven,
two thousand and nine, where they had to delay their retirement because there
was a massive market drawback. That's kind of a drig. So are you
telling people to keep working longer, to keep finding new ways to get cash
flow besides from their investments. If you like your work and your health is
you know, allowing you to do that, probably working a little longer than
you expected in this environment might be a good idea because then you're still putting
money in your in your reserves and not taking it out even when you take
it out. I always use the equation of you want to live off the
eggs and not the chicken. So the dividends, the interest that's what you
want to live in. You might want to look at a guaranteed sources with
the interest rates where they are. Certain annuities are very popular now because of
the inherent guarantees they have. So sitting down with an advisor who really understands
the eye phase of your life is important, Yes, very important. All
right, So your clients, uh, what do you Obviously you review them
regularly, and I assume you're giving advice along these lines. Yes, I
am, and and a lot of them are already there. In fact,
Carrie, when I go when we go through times like this, I don't
get a tremendous amount of panic phone calls because they're ready for They understand the
implications of the economy and that The key is is you want to be able
to ride the way, and uh, you got to you got to be
structured properly to do that, or else you're you're going to you know,
loose sleep Yep, I can totally understand that, and yep, uh,
well hey, so, uh you know what with one more interest rate increase
ahead, is that baked in the cake already the markets and everything else.
I think so, I think it pretty much is where the anomaly will come
as if they decide to go up again because of geopolitical things. Right,
you know, typically by the time the interest rate happens, it's already,
like you say, baked in the cake. People have already anticipated then.
All right, well, hey, thanks for giving us this update. Ask
Bradwilliams dot com best place to find you, Yes, and always appreciate coming
on your show. Carry all right. Likewise, we love having you and
be well. We'll talk to you again soon. If you got a question
for Brad myself, kl at Kerrie luds dot com. That's the place to
send the email and we'll be having you back on next month, Brad.
See what they do then, Will they raise or will they cut? You
know, I think a lot of it's going to have to do with the
geopolitical situation here, isn't it? Yes, it is, yeah, right
now, it's the state of flux is probably a good term. All right,
state of flux it is. We'll talk to you soon, Brad.
Thanks, Hi, Kerrie, thank you, thanks for listening to Carrie Letz's
Financial Survival Network, your solution to today's trying times. For the latest,
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