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041: Annuities Part 2 - Because Some Is Never Enough!
Episode 415th July 2023 • Retirement Equals Freedom • Josh Bretl
00:00:00 00:39:52

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Sometimes investment decisions (like saving for retirement) are black and white. No nuance or downsides.

But when it comes to annuities, there are shades of grey that The Retirement Equals Freedom Podcast is here to help you understand.

On this second of two parts, Host Josh Bretl shares FSR Wealth Strategies’ take on when, how and why certain annuities can make the perfect fit for clients whose portfolios need rounding out.

You’ll learn about various types of vehicles to consider, what makes them appealing and potential pitfalls to avoid.

Get to know the difference between immediate and deferred annuities and what distinguishes “protected income” buckets from “growth” buckets (from buckets of “fried chicken,” if – like Co-Host Dave Schmidt – you choose to go there!).

You’ll also find out why Fixed Index Annuities have a lot to offer as a steady stream of low-risk income.

If you’ve ever been intimidated (or put off) by the world of annuities, this is your invitation to take stock (on your own or with the help of a financial adviser) to determine whether they might make a good addition to your growing retirement nest egg.

If you missed Part I of this series, click this link to listen to Episode 40, “What’s Annuities Got to Do With It?”

If you haven’t already, please sign up for all the news you can use (+ lots of fun) at this link for the Retirement Equals Freedom podcast newsletter. You might also want to join the conversation at our private Facebook group, which you’ll find here.

Click here to explore the services that FSR Wealth Strategies offers and schedule a discovery call with one of the team’s CPAs. When it comes to living your best life, it’s never too early to get started!

Transcripts

Josh Bretl:

The one that we use most in our office is something

Josh Bretl:

called a fixed indexed annuity.

Josh Bretl:

And they have the guarantees, the reason they call it fixed

Josh Bretl:

is because it can't lose money.

Josh Bretl:

But it can earn money, and it's usually tied to a stock index.

Josh Bretl:

These fixed index annuities have been a godsend for a lot

Josh Bretl:

of clients in their portfolios, but you have to think about

Josh Bretl:

them a little differently.

Josh Bretl:

It's not a mutual fund, it's not a stock market tool.

Josh Bretl:

It is designed for your low risk, your bond alternative,

Josh Bretl:

things along those lines.

Josh Bretl:

But if you already know that the asset that you're spending,

Josh Bretl:

like an annuity that can't lose money, then you have

Josh Bretl:

this permission slip to let the rest of your money grow.

Dave Schmidt:

Sometimes investment decisions

Dave Schmidt:

are black and white.

Dave Schmidt:

No nuance, no downsides.

Dave Schmidt:

But when it comes to annuities, there are several shades

Dave Schmidt:

of gray that we are here to help you understand.

Dave Schmidt:

On the second of two parts, Josh shares his take on when,

Dave Schmidt:

how, and why certain annuities can make the perfect fit

Dave Schmidt:

for clients whose portfolios need a little rounding out.

Dave Schmidt:

You'll learn about various types of vehicles to consider,

Dave Schmidt:

what makes them appealing, and potential pitfalls to avoid.

Dave Schmidt:

Get to know the difference between deferred and

Dave Schmidt:

immediate annuities, and what distinguishes protected income

Dave Schmidt:

buckets from growth buckets from buckets of chicken?

Dave Schmidt:

Yeah, I went there.

Dave Schmidt:

You'll also find out why fixed index annuities have

Dave Schmidt:

a lot to offer as a steady stream of low risk income.

Dave Schmidt:

If you've ever been intimidated or put off by the world of

Dave Schmidt:

annuities, we encourage you to give this episode a listen.

Dave Schmidt:

It's your personal invitation to take stock to determine

Dave Schmidt:

whether or not annuities might make a good addition to your

Dave Schmidt:

growing retirement nest egg

Dave Schmidt:

Because hey, this is the Retirement Equals

Dave Schmidt:

Freedom Podcast.

Dave Schmidt:

Your host, Josh Bretl, is the owner of FSR, Wealth Strategies.

Dave Schmidt:

And for the last 20 plus years, Josh has been helping

Dave Schmidt:

fine folks like you gain the confidence to make retirement

Dave Schmidt:

the best part of your life.

Dave Schmidt:

Me?

Dave Schmidt:

Who am I?

Dave Schmidt:

Thanks for asking.

Dave Schmidt:

I'm Dave.

Dave Schmidt:

Josh's longtime friend, co-host of the show, and

Dave Schmidt:

huge fan of Stan's Donuts, chocolate Dipped Donuts.

Dave Schmidt:

Oh yeah.

Dave Schmidt:

Alright, enough of my voice.

Dave Schmidt:

Let me let you let me end my introduction so we

Dave Schmidt:

can get on with the show.

Dave Schmidt:

Josh, barrel aged cold brew from Stan's Donuts.

Dave Schmidt:

What do you think?

Josh Bretl:

I think it's delicious.

Josh Bretl:

And I also think I'm a little giddy today.

Josh Bretl:

I've had too much coffee already.

Josh Bretl:

It's really good, though.

Dave Schmidt:

A giddy Josh makes for a far more

Dave Schmidt:

entertaining podcast.

Josh Bretl:

I hope so.

Josh Bretl:

Some mornings we're up for these, some mornings we're like,

Josh Bretl:

eh, I got to record a podcast.

Josh Bretl:

But today I'm like, come on, let's go, let's go, let's go.

Dave Schmidt:

Yeah.

Dave Schmidt:

Landon's got his championship game tonight.

Josh Bretl:

Ooh, is tonight the big championship game?

Dave Schmidt:

Yep, so we are stoked.

Dave Schmidt:

Trying to keep him nice and calm though, because he's pitching.

Dave Schmidt:

It's a big game.

Josh Bretl:

How many innings are they allowed to pitch?

Dave Schmidt:

One, right now still?

Dave Schmidt:

And then we're pretty much gearing up for Colorado

Dave Schmidt:

on Tuesday, so it's an exciting time here.

Josh Bretl:

Now, I catch a lot of grief in my house.

Josh Bretl:

Because when we go for vacation, Missy says that I

Josh Bretl:

don't really do anything, and I just show up and off we go.

Josh Bretl:

But I think I'm an integral part.

Josh Bretl:

All of the behind the scenes organization to make sure that

Josh Bretl:

we have a taxi to get us to the airport, all the reservations.

Josh Bretl:

Once we go, I got it all.

Josh Bretl:

I know how to do everything.

Josh Bretl:

And I will gladly help pack, but she doesn't trust my packing.

Josh Bretl:

If I pack the kids, she'd re-check it 10 times.

Dave Schmidt:

I don't blame her.

Josh Bretl:

No, I don't either.

Josh Bretl:

I'd re-check my work too if it was packing the kids.

Josh Bretl:

But I've taken the kids to Michigan randomly to go

Josh Bretl:

see my parents, I have a whole different mindset.

Josh Bretl:

Because she won't look at that, she won't check that.

Josh Bretl:

And I just go.

Josh Bretl:

And if we forget something, we forget something.

Josh Bretl:

We'll figure it out, it's not a big deal.

Dave Schmidt:

Yeah.

Dave Schmidt:

You go to Walmart there in New Buffalo, Michigan,

Dave Schmidt:

and buy some new undies.

Josh Bretl:

Yeah.

Josh Bretl:

We're gone for two days.

Josh Bretl:

They'll be fine.

Dave Schmidt:

I don't know why I spoke with

Dave Schmidt:

my heavy south accent.

Dave Schmidt:

We're talking about Michigan, which is not south of us.

Josh Bretl:

No, it's not.

Josh Bretl:

The other day we recorded a live show.

Josh Bretl:

It was a video show, Java with Josh.

Josh Bretl:

It was our second one.

Josh Bretl:

And it kind of had a podcast feel, but it was

Josh Bretl:

much more current event-y.

Josh Bretl:

These podcasts are a lot of overarching topics that

Josh Bretl:

are kind of evergreen.

Josh Bretl:

And we had it live.

Josh Bretl:

For me it's interesting, because these podcasts

Josh Bretl:

are edited by you.

Josh Bretl:

So we can make a mistake, you can adjust the microphone,

Josh Bretl:

you can do stuff, and it just gets edited out.

Josh Bretl:

Our listeners never hear that.

Josh Bretl:

But you've been pushing me to make these live,

Josh Bretl:

make these podcasts live.

Josh Bretl:

We're going to try and do this as much as we can today,

Josh Bretl:

without editing anything.

Dave Schmidt:

Okay.

Dave Schmidt:

That's fair.

Josh Bretl:

Is that all right?

Dave Schmidt:

Yeah.

Dave Schmidt:

Are you committing to episode 42 being live?

Josh Bretl:

I can do it, if you can.

Dave Schmidt:

I've been pushing for it from day one.

Dave Schmidt:

I think we should absolutely do it.

Josh Bretl:

Okay.

Josh Bretl:

We'll see what we can do there.

Josh Bretl:

We'll start sending it out, and see if people watch it live.

Josh Bretl:

And it makes your life a little bit easier from

Josh Bretl:

the editing standpoint.

Josh Bretl:

We can get more stuff done.

Dave Schmidt:

Josh, I'm a proud papa right now.

Josh Bretl:

Why?

Dave Schmidt:

Not anything my kid did or anything.

Dave Schmidt:

You've noticed my sporadic work schedules of late?

Josh Bretl:

Yeah.

Dave Schmidt:

Okay.

Dave Schmidt:

You may not have known where I've been going off to lately.

Josh Bretl:

I don't even ask.

Dave Schmidt:

No, you don't want to know.

Dave Schmidt:

Well, we are approaching the 25th anniversary of

Dave Schmidt:

a very monumental moment in American history.

Dave Schmidt:

And I led a group of protestors.

Dave Schmidt:

And for the last few years actually, we have been posting

Dave Schmidt:

ourselves outside of Hasbro headquarters, demanding for

Dave Schmidt:

a re-release of something.

Dave Schmidt:

And just this past weekend, I actually dressed up as

Dave Schmidt:

one of these aforementioned characters, and tied myself

Dave Schmidt:

to a tree, and demanded a re-release of the Furby.

Dave Schmidt:

And Josh, today on Amazon, you can go and

Dave Schmidt:

buy a brand new Furby.

Dave Schmidt:

Thank you, Hasbro.

Dave Schmidt:

Your welcome, world.

Dave Schmidt:

You can thank me for it.

Josh Bretl:

The Furby is not something I'm familiar

Josh Bretl:

with, other than it's a term that I feel like it

Josh Bretl:

gets referenced back to pop culture of our generation.

Dave Schmidt:

Okay, that's fair.

Josh Bretl:

And you brought it up today on a team meeting

Josh Bretl:

that our whole team attended.

Josh Bretl:

And I have a surprise for you.

Dave Schmidt:

What's that?

Josh Bretl:

There's one coming here Monday for you.

Dave Schmidt:

What?

Josh Bretl:

I wanted to say thank you for all of the

Josh Bretl:

hard work that you do, and I thought, what better way than

Josh Bretl:

to buy you your own Furby?

Josh Bretl:

And I wanted to share it with you live, but Amazon

Josh Bretl:

is delivering it Monday.

Dave Schmidt:

Oh, this is the greatest day of my life.

Dave Schmidt:

You will not regret this.

Dave Schmidt:

You won't let me bring a dog in here, but this

Dave Schmidt:

is the next best thing.

Josh Bretl:

I know nothing about this, but I'm sure

Josh Bretl:

it will be entertaining.

Dave Schmidt:

It's going to revolutionize

Dave Schmidt:

the podcast industry.

Dave Schmidt:

Well, thank you, Josh.

Dave Schmidt:

I am humbled.

Dave Schmidt:

And you're going to love it, I promise you're going to love it.

Josh Bretl:

It'll be entertaining.

Josh Bretl:

It will be.

Josh Bretl:

We've been going for a little bit here, and I have one

Josh Bretl:

quick story, because this is a followup from our last episode.

Josh Bretl:

At the beginning we were talking about my son,

Josh Bretl:

Zach, and his glasses.

Josh Bretl:

And your son, Landon, goes to the same eye doctor.

Josh Bretl:

And you saw a picture of Zach there, and you sent

Josh Bretl:

it to Missy and I, of his graduation from this therapy

Josh Bretl:

that he's doing there.

Josh Bretl:

And we talked in the last episode how we bought Zach

Josh Bretl:

a new pair of glasses.

Josh Bretl:

And how he deserved it so much, because he went four years and

Josh Bretl:

never broke a pair, never lost a pair, never scratched a pair.

Josh Bretl:

He is so careful with these glasses.

Josh Bretl:

And we got these new pair of glasses from that eye doctor.

Josh Bretl:

Guess what happened yesterday?

Dave Schmidt:

No.

Josh Bretl:

Lens popped out.

Josh Bretl:

He wasn't even doing anything.

Josh Bretl:

He was just standing there.

Josh Bretl:

All of a sudden he goes, "Mama, my lens popped out."

Josh Bretl:

Missy goes, "I couldn't yell at him.

Josh Bretl:

He wasn't doing anything."

Josh Bretl:

They're back at the eye doctor today getting the lens fixed.

Dave Schmidt:

That is too funny.

Josh Bretl:

Yeah, so I thought I'd follow that up

Josh Bretl:

after I was talking about...

Josh Bretl:

four years, we spend some money on a nice pair of

Josh Bretl:

glasses for the kid, and, "Mama, my lens popped out."

Dave Schmidt:

:

That's how it works.

Dave Schmidt:

:

Is that your sister out there in the parking lot?

Josh Bretl:

Yeah, my sister uses our dumpster.

Josh Bretl:

Her husband, he reps different products.

Josh Bretl:

And one of his products that he sells to small stores, is shoes.

Josh Bretl:

When you rep shoes, you have to take these samples

Josh Bretl:

into the stores, so they will send him one shoe,

Josh Bretl:

so he gets the left pair.

Josh Bretl:

That way they can double up, they can send

Josh Bretl:

another rep the right.

Josh Bretl:

So, they have a lot of shoes that they

Josh Bretl:

can't do anything with.

Josh Bretl:

And so, when they're no longer selling that version, they

Josh Bretl:

have to get rid of these shoes.

Dave Schmidt:

Oh man, what a waste.

Josh Bretl:

Yeah, it is.

Josh Bretl:

They hate it.

Josh Bretl:

And they're like, "Well, just tell us who has the other shoe,

Josh Bretl:

and we'll donate them, we'll give them away to people."

Josh Bretl:

And nope, they won't do it.

Josh Bretl:

We will, a couple times a year in our office, have a dumpster

Josh Bretl:

full of shoes, which is really confusing to a lot of people.

Dave Schmidt:

It's just like annuities, man.

Dave Schmidt:

If you really get down into it, it's just like annuities.

Josh Bretl:

That was an amazing segue.

Dave Schmidt:

I've been working on it.

Dave Schmidt:

Thank you.

Josh Bretl:

We promised part two, and today is part

Josh Bretl:

two of annuities, baby.

Josh Bretl:

And last week, or last episode, I spent some time

Josh Bretl:

talking about all of the issues that people have with

Josh Bretl:

them, and rightfully so.

Josh Bretl:

There's a lot of reasons you shouldn't do them.

Josh Bretl:

But as you actually led the show with last time,

Josh Bretl:

there is no such thing as an inherently good or inherently

Josh Bretl:

bad investment vehicle.

Dave Schmidt:

I led the show with that?

Josh Bretl:

Well, yeah.

Josh Bretl:

Well, you did when, you edited it together and the very

Josh Bretl:

first thing people hear is, "There's no inherently good or

Josh Bretl:

inherently bad place to put your money," coming from my voice.

Josh Bretl:

That sounded like my political voice, apparently.

Josh Bretl:

Um, but, um...

Dave Schmidt:

These all things, these things, these um, but,

Dave Schmidt:

um, you're going to have to work on that for the live stuff.

Dave Schmidt:

That is going to be, it's going to drive people crazy.

Josh Bretl:

It drives you crazy.

Dave Schmidt:

It takes hours to get that out of the show.

Josh Bretl:

I'm sorry.

Dave Schmidt:

That's all right.

Josh Bretl:

All right.

Josh Bretl:

I'm going to work on it.

Dave Schmidt:

I went straight into an um.

Josh Bretl:

You did, you did.

Dave Schmidt:

I went straight into an um.

Josh Bretl:

How do I start a sentence without um?

Josh Bretl:

It shouldn't be that hard.

Dave Schmidt:

It shouldn't be.

Josh Bretl:

I mean, I talk all day long.

Dave Schmidt:

All day.

Josh Bretl:

But it's like, I can't form a

Josh Bretl:

thought without saying um, then it's the thought.

Josh Bretl:

I'm going to work on that really hard here today.

Dave Schmidt:

I don't have the answer for you.

Dave Schmidt:

I do tell you that I'm going to have to trim out

Dave Schmidt:

like three minutes of this, but we'll figure it out.

Dave Schmidt:

It's at 10 minutes already.

Josh Bretl:

People love us.

Dave Schmidt:

Oh, that's true.

Dave Schmidt:

Okay.

Dave Schmidt:

All right, so we're talking, last week we talked about kind

Dave Schmidt:

of why people hate annuities.

Dave Schmidt:

And Erin spent a bunch of time coming up with, I'm

Dave Schmidt:

guessing not why people love annuities, but why

Dave Schmidt:

annuities are good for people?

Dave Schmidt:

What are you talking about here?

Josh Bretl:

Well, last week we talked about a lot of the

Josh Bretl:

downsides, or the things that get the really bad press.

Josh Bretl:

And what I wanted to spend some time talking about today is

Josh Bretl:

because nothing's inherently good or inherently bad, I want

Josh Bretl:

to spend time on as to why, if we use them for a client,

Josh Bretl:

because not all clients need them, but if we use them for

Josh Bretl:

a client, why do we use them?

Josh Bretl:

And I wanted you to understand some backgrounds behind them.

Josh Bretl:

Bear with me as I get nerdy here for a few minutes,

Josh Bretl:

because this is one of my favorite things to talk about.

Josh Bretl:

You okay with that?

Dave Schmidt:

Yeah.

Josh Bretl:

I'm going to stop saying um, and I'm going to stop

Josh Bretl:

asking, does that make sense?

Dave Schmidt:

I do like the, does that make sense?

Dave Schmidt:

That's a nice little segue.

Josh Bretl:

All right.

Josh Bretl:

I'm glad I can keep that one.

Josh Bretl:

I think the ums might be easier to get rid of.

Josh Bretl:

The word annuity, when you look at the definition

Josh Bretl:

of the word annuity, the definition of annuity is

Josh Bretl:

just a stream of payments.

Josh Bretl:

Anything can be an annuity.

Josh Bretl:

Um...

Josh Bretl:

um, I'm just going to point it out every time.

Josh Bretl:

We need a button to hit.

Josh Bretl:

But if you look at a pension, a pension is an annuity.

Josh Bretl:

It's a stream of payments.

Josh Bretl:

Social Security is an annuity.

Josh Bretl:

It's a stream of payments.

Josh Bretl:

So the first annuity that was ever created, was

Josh Bretl:

what they called a, um...

Josh Bretl:

I can't.

Josh Bretl:

It's going to drive me nuts.

Dave Schmidt:

You're fine.

Dave Schmidt:

Yeah, don't fight it.

Dave Schmidt:

Just do it.

Dave Schmidt:

We'll work on it later.

Josh Bretl:

Stop talking about it, is what you're telling me?

Dave Schmidt:

Yeah.

Dave Schmidt:

Just don't think about it.

Josh Bretl:

All right.

Josh Bretl:

If you don't hear any ums for the rest of the show, it's

Josh Bretl:

because Dave just edited them out from this point forward.

Josh Bretl:

But an immediate annuity was the first thing that

Josh Bretl:

ever came into existence.

Josh Bretl:

An immediate annuity was if you gave an insurance company

Josh Bretl:

money, so let's say you gave them a hundred thousand dollars,

Josh Bretl:

they would promise you like a pension, a stream of payments

Josh Bretl:

for the rest of your life.

Josh Bretl:

And that was an annuity, that was what people thought of.

Josh Bretl:

There was good and bad to that.

Josh Bretl:

The good was, you were promised a stream of payments

Josh Bretl:

for the rest of your life.

Josh Bretl:

The bad was, you gave up complete control of that money.

Josh Bretl:

And so, it was good if you lived a long time, it was short if

Josh Bretl:

you only lived a short time.

Josh Bretl:

Because you gave them your money, let's say you gave

Josh Bretl:

them a hundred thousand dollars, and they were going

Josh Bretl:

to pay you $10,000 a year for the rest of your life,

Josh Bretl:

and you lived two years.

Josh Bretl:

Well, you just lost 80,000 bucks.

Josh Bretl:

Well, if you live 20 years, you just made a lot of money.

Josh Bretl:

So it had its good, its bad, its pros and cons.

Josh Bretl:

That was the first original type of annuity.

Josh Bretl:

And then they came up with what they called deferred annuities.

Josh Bretl:

Deferred annuities, where you could stick money into it

Josh Bretl:

and it would grow over time.

Josh Bretl:

Does that make sense?

Dave Schmidt:

Mm-hmm.

Josh Bretl:

And then after you let it grow, you have

Josh Bretl:

the ability to turn it into that stream of payments.

Josh Bretl:

Every annuity has the ability to turn it into

Josh Bretl:

that stream of payments, but you didn't have to.

Josh Bretl:

You could take it out if you wanted to, you could

Josh Bretl:

do something else with it.

Josh Bretl:

Deferred annuity is you put money in and it can grow.

Josh Bretl:

And at some point in the future, you can turn it

Josh Bretl:

into a stream of payments, or you can take it out.

Josh Bretl:

So, there's two types, A and B.

Josh Bretl:

Immediate, deferred.

Dave Schmidt:

And terms can vary?

Josh Bretl:

Terms can vary.

Josh Bretl:

You can have deferred annuities for a year.

Josh Bretl:

You can have deferred annuities for 20 years.

Josh Bretl:

You can even have a deferred annuity that's a year long,

Josh Bretl:

that you just leave it in there for the rest of your life,

Josh Bretl:

and it just continues to grow.

Josh Bretl:

But that's the difference.

Josh Bretl:

That's the two big types.

Josh Bretl:

Now, inside of deferred annuities, there's

Josh Bretl:

multiple different types of deferred annuities.

Josh Bretl:

And this is where people get hung up.

Josh Bretl:

Make sense so far?

Dave Schmidt:

:

Makes sense so far.

Josh Bretl:

That's what I want to beat down a little bit.

Josh Bretl:

The very first one was a fixed annuity.

Josh Bretl:

A fixed annuity was the insurance company, it's

Josh Bretl:

essentially a CD with an insurance company.

Josh Bretl:

We all know what a CD is.

Josh Bretl:

You go to the bank, you give them your money,

Josh Bretl:

and they're going to promise you a percentage.

Josh Bretl:

They promise you 5% for nine months, or whatever it might be.

Josh Bretl:

A fixed annuity is the same thing.

Josh Bretl:

It's just instead of going to a bank, you're going

Josh Bretl:

to an insurance company.

Josh Bretl:

Now, why would you do this?

Josh Bretl:

Well, usually the insurance company has less liquidity

Josh Bretl:

needs, so they can usually offer a little

Josh Bretl:

bit higher rate of return.

Josh Bretl:

It's not always the case, but they usually can.

Josh Bretl:

And the second is, annuities have a tax

Josh Bretl:

deferral available to them.

Josh Bretl:

On a CD, the interest as you earn it is taxable to you.

Josh Bretl:

You're going to see interest on your tax return.

Josh Bretl:

In an annuity, you don't see that interest.

Josh Bretl:

It just gets added to the account.

Josh Bretl:

And then when you take it out, that's when the

Josh Bretl:

taxable event occurs.

Josh Bretl:

That allows you the ability to time your taxes.

Dave Schmidt:

I see.

Josh Bretl:

See, I didn't even ask you if you understand.

Josh Bretl:

That makes sense.

Josh Bretl:

That's one of the benefits of deferred annuities.

Josh Bretl:

The fixed annuity is the first type.

Josh Bretl:

Then they got into the variable annuities.

Josh Bretl:

The very first variable annuity was offered by TIAA-CREF, and

Josh Bretl:

that was offered to teachers.

Josh Bretl:

And what they did was instead of being a fixed rate in like a CD,

Josh Bretl:

they made it a variable rate.

Josh Bretl:

And that variable rate is tied to usually a stock market index.

Josh Bretl:

Essentially what they did is they took mutual funds,

Josh Bretl:

and they put them inside of a variable annuity.

Josh Bretl:

Now, the big thing they always test you on when you get your

Josh Bretl:

insurance test is, in a fixed annuity the risk is with the

Josh Bretl:

insurance company, because the insurance company has

Josh Bretl:

to earn that interest rate.

Josh Bretl:

With the variable annuity, the risk is with the person

Josh Bretl:

who put their money into it.

Josh Bretl:

Because it depends upon what quote unquote, underlying

Josh Bretl:

mutual fund that you choose.

Josh Bretl:

if you have heard bad things about annuities, this

Josh Bretl:

is where it's come from.

Josh Bretl:

Because there are a lot of people that loved these variable

Josh Bretl:

annuities, because they would pay a higher commission then

Josh Bretl:

just using mutual funds.

Josh Bretl:

And so people would say, "Hey, this client wants mutual

Josh Bretl:

funds, but I can put them in a variable annuity, and have a

Josh Bretl:

few other bells and whistles, and they'll get paid more."

Josh Bretl:

And that's where the start of the really shady

Josh Bretl:

sales processes came from.

Josh Bretl:

That's the variable annuity.

Josh Bretl:

Now, with technology nowadays, we very rarely see a lot

Josh Bretl:

of uses in our practice for variable annuities.

Josh Bretl:

There are different uses, just not a lot for our clients.

Josh Bretl:

And I actually haven't used a variable annuity

Josh Bretl:

since I was first in the business 25 years ago.

Dave Schmidt:

You're old.

Josh Bretl:

Yeah, actually it sounds really freaking old.

Josh Bretl:

It's been a long time since we've actually used one.

Dave Schmidt:

It reminds me of a 401k, where the employees

Dave Schmidt:

would be able to choose their investments within their 401k,

Dave Schmidt:

similar to a variable annuity.

Josh Bretl:

Yeah, it's very similar.

Josh Bretl:

Now, the reason it's a little bit different, the

Josh Bretl:

reason it got the bad wrap is because it has higher fees.

Josh Bretl:

Because you have the normal mutual fund fees, but then

Josh Bretl:

you also have the additional fees that the annuity

Josh Bretl:

charges on top of it there.

Josh Bretl:

Does that make sense?

Dave Schmidt:

Yeah, makes sense.

Josh Bretl:

Back to fees.

Josh Bretl:

With the fixed annuity though, there are no

Josh Bretl:

additional fees to it.

Josh Bretl:

The interest rate that they pay you is how they

Josh Bretl:

calculate out their fees, so it's very similar to a bank.

Josh Bretl:

When you get a CD, there's not a fee that goes against your CD.

Josh Bretl:

You know the bank's earning more money.

Josh Bretl:

A fixed annuity is the same way.

Dave Schmidt:

Got it.

Dave Schmidt:

It's just the mutual fund fees, not an additional

Dave Schmidt:

fee on top of it.

Josh Bretl:

Yeah.

Josh Bretl:

Now, because the risk is not with the insurance company on

Josh Bretl:

the variable annuity, they add fees to that, so that is why the

Josh Bretl:

variable annuity have the higher fees, as that comes into play.

Josh Bretl:

Now the The one that we use most in our office is something

Josh Bretl:

called a fixed indexed annuity.

Josh Bretl:

And a fixed indexed annuity is a little different.

Josh Bretl:

It has the fixed component, but it does take some of the

Josh Bretl:

interest rate sensitivity and applies it to the customer.

Josh Bretl:

So instead of a set rate, instead of a set earnings,

Josh Bretl:

like a CD or a fixed annuity has, what this

Josh Bretl:

one does, is the earnings are tied to a stock index.

Josh Bretl:

They have the guarantees, the reason they call it fixed is

Josh Bretl:

because it can't lose money.

Josh Bretl:

But it can earn money, and it's usually tied to a stock index.

Josh Bretl:

The most common one being the S&P 500, but there's

Josh Bretl:

a lot of different ones that are available to it.

Josh Bretl:

In a year the S&P does well and goes up, you'll participate

Josh Bretl:

in those gains and you'll get a percentage of it.

Josh Bretl:

In years that it goes down, you'll just stay

Josh Bretl:

even and stay flat.

Josh Bretl:

We do use that a lot.

Josh Bretl:

It allows us the ability to have some decent growth,

Josh Bretl:

not have the risk associated with different investments,

Josh Bretl:

and different downsides.

Josh Bretl:

There is the time period issue with it.

Josh Bretl:

It has the 10 year, a lot of them are eight, 10, 12

Josh Bretl:

year surrender charges.

Josh Bretl:

But if you can work around that, and you tie it into

Josh Bretl:

your plan and your overall situation, it can provide

Josh Bretl:

some really nice downside protection, some decent growth.

Josh Bretl:

Especially in the interest rate environments we've been

Josh Bretl:

having recently, where up until the last year, there have not

Josh Bretl:

been decent interest rates on CDs and things like that.

Josh Bretl:

These fixed index annuities have been a godsend for a lot

Josh Bretl:

of clients in their portfolios, but you have to think about

Josh Bretl:

them a little differently.

Josh Bretl:

It's not a mutual fund, it's not a stock market tool.

Josh Bretl:

It is designed for your low risk, your bond alternative,

Josh Bretl:

things along those lines.

Dave Schmidt:

I can relate to this, because I just

Dave Schmidt:

bought 800 Furbies in hopes that they grow in value.

Josh Bretl:

I would call your Furby purchase more of

Josh Bretl:

a stock purchase, I think.

Dave Schmidt:

Well, right.

Dave Schmidt:

But I'm saying, but I have an annuity on the backend to

Dave Schmidt:

protect myself in case I lose all my Furby investments.

Josh Bretl:

I thought her name was Carla.

Dave Schmidt:

Oh, wow.

Dave Schmidt:

Oh boy, oh boy.

Dave Schmidt:

It's funny, this is a good pause.

Dave Schmidt:

You need to work on your ums and your clicks, I need to

Dave Schmidt:

work on, and you fell prey to this during our Java with Josh.

Dave Schmidt:

I keep looking at the computer instead of our cameras,

Dave Schmidt:

because this is so new to us.

Josh Bretl:

We'll get there.

Josh Bretl:

We'll get there.

Josh Bretl:

Well, I also feel like I should look at you.

Josh Bretl:

We're the only two people here talking.

Josh Bretl:

I feel like I should look at you, but whatever.

Dave Schmidt:

Yeah.

Dave Schmidt:

That creepy guy that lives in our closet.

Dave Schmidt:

We don't even know his name.

Dave Schmidt:

Let's call him Herb.

Josh Bretl:

Herb?

Dave Schmidt:

Yeah.

Josh Bretl:

I though it was...

Josh Bretl:

no, Steve's the other side of the wall.

Dave Schmidt:

Oh yeah, Steven.

Josh Bretl:

Well, I want to talk a little bit

Josh Bretl:

about how we use them.

Josh Bretl:

In theory, we're using fixed annuities or fixed

Josh Bretl:

indexed annuities in our clients' portfolios.

Josh Bretl:

And again, they're not for everybody, but for

Josh Bretl:

certain people, they serve a really nice purpose.

Josh Bretl:

Let's talk about what some of those purposes are.

Josh Bretl:

The first one, we'll use it when we talk about having

Josh Bretl:

a protected income bucket.

Josh Bretl:

There's certain dollars that in retirement, you're

Josh Bretl:

going to have to spend.

Josh Bretl:

And it's really nice to have a low volatility asset, an asset

Josh Bretl:

that doesn't have a lot of risk.

Josh Bretl:

And if you want to spend down that annuity money, it's

Josh Bretl:

a great ability to do it.

Josh Bretl:

Now, you have to understand liquidity.

Josh Bretl:

You have to make sure you have an advisor who can

Josh Bretl:

factor liquidity into it.

Josh Bretl:

But that protected income bucket is also your

Josh Bretl:

permission slip to let your other assets sit and grow.

Josh Bretl:

Because people, when they're working, we're really used to...

Josh Bretl:

I don't really care what the market does.

Josh Bretl:

I got time.

Josh Bretl:

It was that whole retirement, hey, I'm going to spend my

Josh Bretl:

money, so they get nervous and things like that.

Josh Bretl:

But if you already know that the asset that you're spending,

Josh Bretl:

like an annuity that can't lose money, then you have

Josh Bretl:

this permission slip to let the rest of your money grow.

Josh Bretl:

That's one that comes into play.

Dave Schmidt:

What about the third bucket?

Dave Schmidt:

I see protected income bucket, versus growth bucket, versus

Dave Schmidt:

bucket of fried chicken.

Josh Bretl:

Bucket of fried chicken.

Josh Bretl:

That is just for people like you, who need that incentive

Josh Bretl:

to keep going forward there.

Josh Bretl:

Fried chicken works for most people.

Josh Bretl:

No one doesn't like fried chicken.

Dave Schmidt:

No, it's un-American to not

Dave Schmidt:

like fried chicken.

Josh Bretl:

What about the third bucket?

Josh Bretl:

The second reason we'll use them, is as a bond alternative.

Dave Schmidt:

James Bond.

Josh Bretl:

Bond, James Bond.

Josh Bretl:

Your Bond impersonation is much better than mine.

Dave Schmidt:

Most things I do is better than

Josh Bretl:

Right now, it still serves true.

Josh Bretl:

But we had a whole episode on bonds before, and it's

Josh Bretl:

actually still relevant.

Josh Bretl:

But back when interest rates were so low and the market

Josh Bretl:

was so high, the bonds were supposed to provide downside

Josh Bretl:

protection, and pay you a decent interest rate, and

Josh Bretl:

they just weren't doing that.

Josh Bretl:

And we were using the fixed annuities, and the fixed

Josh Bretl:

index annuities to do that, to provide downside protection

Josh Bretl:

and pay a decent interest rate.

Josh Bretl:

And they still have, they still do.

Josh Bretl:

And it's still a great bond alternative, if you think about

Josh Bretl:

what the purpose of the bond is.

Josh Bretl:

And we'll use that a lot of times inside our different

Josh Bretl:

clients' portfolios there.

Josh Bretl:

We have principal protection.

Josh Bretl:

It's a great safe investment.

Josh Bretl:

It hopefully will out earn cash over the long term it's there.

Josh Bretl:

One we have on there is, there's certain annuities that have some

Josh Bretl:

different tools built into it.

Josh Bretl:

They will have either guaranteed income tools,

Josh Bretl:

and it's a little different than the immediate annuity

Josh Bretl:

I first talked about where you give up complete control.

Josh Bretl:

Now, you actually have control.

Josh Bretl:

If you die early, your loved ones and your heirs can still

Josh Bretl:

get whatever's left over.

Josh Bretl:

But they also can have some different long-term

Josh Bretl:

care features built in.

Josh Bretl:

For a lot of people, long-term care becomes really important.

Josh Bretl:

And if you can have a stream of income that also has a benefit

Josh Bretl:

for long-term care, that can mean a lot to a lot of people.

Josh Bretl:

That gets to be taken into consideration as well.

Dave Schmidt:

That was actually a question I had earlier,

Dave Schmidt:

is upon death, does it act like a pension or something

Dave Schmidt:

that just continues to pay out to your beneficiary?

Dave Schmidt:

But you're telling me-

Josh Bretl:

it can.

Josh Bretl:

There's a lot more flexibility, and you have that ability

Josh Bretl:

to have it keep paying out, or maybe a lump sum.

Josh Bretl:

If there's a husband or wife, you can do it over

Josh Bretl:

both of their lives.

Josh Bretl:

There's a lot more flexibility and control, because you

Josh Bretl:

own it, and that's there.

Josh Bretl:

Now, this gets me to the the overarching

Josh Bretl:

thought process here.

Josh Bretl:

And that is that, back to the original thing I

Josh Bretl:

said, it's never inherently good or inherently bad.

Josh Bretl:

But it does have to apply to your specific situation.

Josh Bretl:

Before you use them or before you deny them, make sure that

Josh Bretl:

you understand exactly what the purpose is, and you have

Josh Bretl:

a plan in place so that it works for your situation and

Josh Bretl:

what you're trying to do.

Josh Bretl:

They can be a great tool, and they can do harm, depending

Josh Bretl:

upon how you use them.

Josh Bretl:

The annuities that we talk about, and that we use in our

Josh Bretl:

clients' scenario, yeah, they're the same annuities that there's

Josh Bretl:

people out there screaming, "I hate annuities," but they're

Josh Bretl:

trying to sell something too.

Josh Bretl:

And so, when we work it in and we work it into our clients'

Josh Bretl:

situation, it can serve a huge purpose and a huge benefit.

Josh Bretl:

Now, when we make that recommendation, we always

Josh Bretl:

say we're only doing it because we think it's

Josh Bretl:

of your best interest.

Josh Bretl:

If you don't agree with it, if you are so anti-annuity that

Josh Bretl:

you can never get over it, okay, we'll do something different.

Josh Bretl:

It's just in our thought process, it probably won't be

Josh Bretl:

as good as what we have here.

Josh Bretl:

That is our thought process on how we think about annuities

Josh Bretl:

in our clients' portfolios.

Dave Schmidt:

There's always investing in Furbies.

Josh Bretl:

Your first one's coming on Monday, buddy.

Dave Schmidt:

You have no idea.

Dave Schmidt:

I'm so pumped.

Josh Bretl:

I forget what color I ordered you though.

Dave Schmidt:

The purple or the coral, I'm thrilled with either.

Dave Schmidt:

It's going to be great.

Josh Bretl:

Are you here Monday, before your trip on Tuesday?

Dave Schmidt:

I am going to be here Monday.

Josh Bretl:

Oh, I hope it shows up early.

Dave Schmidt:

I hope so too.

Dave Schmidt:

You know, can add little charms to them.

Dave Schmidt:

I think it comes with a pizza charm.

Dave Schmidt:

You can add additional charms, and I will be adding charms.

Josh Bretl:

Is it going to stay here in the office, or are

Josh Bretl:

you taking it home with you?

Dave Schmidt:

Oh, it's going to be an an office mascot, I think.

Josh Bretl:

Oh, great.

Josh Bretl:

I look forward to it.

Dave Schmidt:

I may buy Landon his own.

Dave Schmidt:

But he's going to be with us whenever we're recording.

Dave Schmidt:

We'll have to name him.

Josh Bretl:

Well Dave, we've been talking here for a

Josh Bretl:

while, and I think it's time.

Dave Schmidt:

[singing].

Josh Bretl:

For people that don't know us, we come up

Josh Bretl:

with these little tiny things we spend a lot of effort

Josh Bretl:

trying to put in place, and they don't always pay

Josh Bretl:

off, but that one worked.

Josh Bretl:

Did you hear it?

Dave Schmidt:

That was amazing.

Dave Schmidt:

I was worried about the song being too loud.

Dave Schmidt:

And that's why I'm like, which one is the sound

Dave Schmidt:

effects, is it the first one?

Josh Bretl:

That's sound effects, or this is the

Josh Bretl:

pad, that's the Bluetooth.

Dave Schmidt:

Okay, so turn it down.

Dave Schmidt:

Go ahead, play it again.

Dave Schmidt:

Can you play it again?

Josh Bretl:

Yeah, I can play it again.

Dave Schmidt:

Just in case people didn't pick up on it.

Josh Bretl:

That, folks, is a blue jay.

Josh Bretl:

And this comes from a YouTube that I found, that is a

Josh Bretl:

guy that teaches you how to make common bird calls.

Dave Schmidt:

Oh, he's my hero.

Dave Schmidt:

For context, last episode, I essentially accosted you for

Dave Schmidt:

not having original bird sounds.

Dave Schmidt:

And you stepped up and said, "I cannot let my buddy down today."

Josh Bretl:

Yeah, so now I am no longer making bird sounds.

Josh Bretl:

I am going to let this guy...

Josh Bretl:

that was a morning dove man.

Josh Bretl:

And he's going to come in and play with us, as times go on.

Dave Schmidt:

You have no idea what this has done to our

Dave Schmidt:

street cred for our podcast.

Dave Schmidt:

Official bird sounds.

Josh Bretl:

So, get to know Josh and Dave.

Josh Bretl:

Dave, you leave for vacation next week.

Josh Bretl:

You're going to Colorado, and then I take my vacation at

Josh Bretl:

the end of July with the kids.

Josh Bretl:

What is one thing that you are super excited to do

Josh Bretl:

with Landon on vacation?

Dave Schmidt:

We have three things planned,

Dave Schmidt:

and they're all awesome.

Josh Bretl:

Now, I'm worried this is gonna be like the

Josh Bretl:

dogs game, and all of a sudden you just can't...

Josh Bretl:

you're going to say you're so excited for

Josh Bretl:

it, and you can't do it.

Dave Schmidt:

I know.

Dave Schmidt:

We've been watching the forecast.

Dave Schmidt:

I think we're clear.

Dave Schmidt:

I want to say two.

Josh Bretl:

Okay, go ahead.

Josh Bretl:

Go ahead.

Dave Schmidt:

We're going to a Colorado Rockies game, which

Josh Bretl:

he been to a Major League Baseball game before?

Dave Schmidt:

He's been to a couple Sox games.

Dave Schmidt:

We're going to the Cubs Sox game in August.

Josh Bretl:

Oh, nice.

Dave Schmidt:

But this will be his first

Dave Schmidt:

non-Illinois sports team.

Dave Schmidt:

He's been playing a lot of MLB The Show on Switch, so

Dave Schmidt:

he's seen what different stadiums look like.

Dave Schmidt:

I think it's going to be cool for him to walk into a

Dave Schmidt:

totally different environment.

Dave Schmidt:

I think that'll be a lot of fun.

Dave Schmidt:

The whole family's going, we got like 20

Dave Schmidt:

tickets or something, so.

Josh Bretl:

Oh, that would be awesome.

Dave Schmidt:

Yeah, it's going to be great.

Dave Schmidt:

And then I think I mentioned before, we rented boats.

Dave Schmidt:

We're going to go into Lake Dillon, which is just

Dave Schmidt:

the most gorgeous lake.

Dave Schmidt:

It looks like you're in a fjord.

Dave Schmidt:

You're in between huge foothills, with mansions on

Dave Schmidt:

the top, and you're driving a boat through there, and it's

Dave Schmidt:

maybe an hour from Breckenridge.

Dave Schmidt:

We'll do that afterwards.

Dave Schmidt:

That was one of my favorite days last time I went out there.

Dave Schmidt:

I got a migraine, and I still loved that day last time.

Dave Schmidt:

We're pumped, man.

Josh Bretl:

That's really cool.

Josh Bretl:

That's really cool.

Dave Schmidt:

Yeah, thanks Josh.

Dave Schmidt:

How about your trip to The Bahamas coming up?

Dave Schmidt:

What are you looking forward to?

Josh Bretl:

Well, this one is...

Josh Bretl:

we did The Bahamas a couple years ago with the kids, and

Josh Bretl:

we did the whole kiss a dolphin thing, where you get in this

Josh Bretl:

pool with the dolphins, and the trainers bring them up, and

Josh Bretl:

you get to pet them and feed them fish, and stuff like that.

Josh Bretl:

And we were excited, the kids were so excited.

Josh Bretl:

Well, Alex freaked out.

Josh Bretl:

He wanted nothing to do with it.

Josh Bretl:

Wouldn't get near the pool, wouldn't do anything.

Josh Bretl:

We have pictures of me, with Zach and Maggie holding them

Josh Bretl:

in the pool, and the dolphins come up and Maggie's kissing it.

Josh Bretl:

And I have a picture of them behind me, Alex just moping.

Josh Bretl:

Missy's like, oh my God, I want to be in the

Josh Bretl:

pool with the dolphins.

Josh Bretl:

And so, this time I'm looking forward to Alex

Josh Bretl:

being able to do that.

Josh Bretl:

Because I think he regrets it, even from that

Josh Bretl:

young age at this point.

Josh Bretl:

And I hope he can overcome that fear.

Josh Bretl:

And I get it.

Josh Bretl:

It's a weird thought, but-

Dave Schmidt:

Yeah, that's cool.

Dave Schmidt:

And you guys are actively talking about it now,

Dave Schmidt:

so he's ready to do it?

Josh Bretl:

He's ready.

Josh Bretl:

He's talking about it.

Josh Bretl:

He's excited for it.

Josh Bretl:

I think he's comfortable in the water now, and it'll be...

Josh Bretl:

I'm sure he'll still be a little bit nervous.

Dave Schmidt:

Sure.

Dave Schmidt:

Just be like, look at vacation Zach right here.

Dave Schmidt:

He's got Sean the duck-billed platypus.

Josh Bretl:

He does.

Dave Schmidt:

The duck-billed platypus will

Dave Schmidt:

get you through the day.

Josh Bretl:

You know, I'm going to...

Josh Bretl:

we have the Alex-

Alex:

hashtag tax nerd.

Josh Bretl:

That we drop in here.

Josh Bretl:

I'll see if I can get Zach to have Sean talk for me, and

Josh Bretl:

record it, because Sean talks.

Dave Schmidt:

Yeah, of course.

Josh Bretl:

And it's kind of like one of those characters

Josh Bretl:

that everyone pretends they know what they're

Josh Bretl:

saying, but no one has any idea what they're saying.

Josh Bretl:

And Zach translates for us, it's fantastic.

Josh Bretl:

So I'll see if I can't get that.

Dave Schmidt:

Kind of like ordering [Drive

Dave Schmidt:

thru shenanigans].

Josh Bretl:

Yes.

Josh Bretl:

Kevin Collins is very much that way.

Dave Schmidt:

Dave relates to retirees, yeah.

Dave Schmidt:

Speaking of Kevin Collins, this is going to be back to back

Dave Schmidt:

episodes talking about my boy.

Dave Schmidt:

Back in high school basketball we sometimes needed a way

Dave Schmidt:

to blow off some steam.

Josh Bretl:

When you say we, are we talking about,

Josh Bretl:

am I included in this?

Josh Bretl:

Is this the mutual we, or is this not me?

Dave Schmidt:

I don't know if you were there.

Dave Schmidt:

When I tell this story, you may remember.

Dave Schmidt:

But it was definitely me, Kevin and Vince.

Dave Schmidt:

The three amigos that often got into shenanigans.

Dave Schmidt:

The three main characters in the drive-through shenanigans,

Dave Schmidt:

were also responsible for what I'm about to tell you.

Dave Schmidt:

After a tough basketball loss, we would sometimes

Dave Schmidt:

just need to blow off steam.

Dave Schmidt:

And we weren't aggressive individuals, we're not going

Dave Schmidt:

to go smash stuff or anything.

Dave Schmidt:

But we had to find something that served us well, served our

Dave Schmidt:

purpose of blowing off steam, and didn't really care about

Dave Schmidt:

how it affected other people.

Dave Schmidt:

So we put our minds together, we first branded

Dave Schmidt:

ourselves as the TPC.

Dave Schmidt:

Do you remember what the TPC was?

Josh Bretl:

Kind of, it's starting to come back to me.

Dave Schmidt:

Well, the very first victim of the

Dave Schmidt:

TPC was Jonathan Flatley.

Dave Schmidt:

And we drove by opened the doors, and we jumped

Dave Schmidt:

out, and TP'd the crap out of John Flatley's house.

Dave Schmidt:

Jumped in the car, and sped away.

Dave Schmidt:

The TPC was the Toilet Paper Clan.

Dave Schmidt:

That's just who we were.

Dave Schmidt:

That was our way of blowing off steam.

Dave Schmidt:

It served us extremely well.

Dave Schmidt:

It did not necessarily serve others, AKA people's

Dave Schmidt:

houses, who we TP'd, as well.

Dave Schmidt:

That is why it is like an annuity, my friend.

Dave Schmidt:

It served a very specific purpose in our emotional

Dave Schmidt:

portfolio of 17-year-old minds, back in the day.

Dave Schmidt:

Now, I'll let you fester on how to relate that to what we're

Dave Schmidt:

talking about today, while I tell you other houses that

Dave Schmidt:

we TP'd during our tenure.

Dave Schmidt:

Cops eventually found us, locked us up for a few days.

Dave Schmidt:

No, just kidding.

Dave Schmidt:

We just stopped because we got bored.

Dave Schmidt:

But we hit up Coach Prunty.

Josh Bretl:

You TPC'd Coach Prunty?

Dave Schmidt:

We drove out to his house and TPC'd him.

Dave Schmidt:

Yep.

Dave Schmidt:

He was not thrilled, because I believe it rained that night.

Josh Bretl:

He lived on the south side of Chicago.

Dave Schmidt:

Yeah.

Dave Schmidt:

But again, we were dedicated to our organization.

Dave Schmidt:

And I can't remember anybody else that we TP'd,

Dave Schmidt:

but we did at least five, because we spent most of

Dave Schmidt:

our money on toilet paper.

Dave Schmidt:

So Josh, right now, I broke a pen, but the Full

Dave Schmidt:

House music is starting.

Dave Schmidt:

I hope you've had enough time to put the pieces together.

Josh Bretl:

You gave me a hard time when I couldn't come up

Josh Bretl:

with bird noises for that song.

Josh Bretl:

And I think there's some definite reaching that's been

Josh Bretl:

going on here with this DR2R.

Josh Bretl:

Because the TPC does apply to you, and it's

Josh Bretl:

very specific to you.

Josh Bretl:

And you probably angered a few people.

Josh Bretl:

And I will actually tell you, my father, who you know well, I

Josh Bretl:

believe you TPC'd our house at one point in time, and I don't

Josh Bretl:

think he appreciated it either.

Josh Bretl:

And I think as a teenage boy, I knew that he

Josh Bretl:

wouldn't enjoy it so much.

Josh Bretl:

I probably also was like, oh no, Dad's not going to

Josh Bretl:

be happy about this one.

Josh Bretl:

But probably still enjoyed some laughs with you over

Josh Bretl:

it, and I hope you got to blow off some steam.

Josh Bretl:

But I would like to think that annuities serve a broader

Josh Bretl:

purpose for more people, than just the three people

Josh Bretl:

who lost a basketball game.

Dave Schmidt:

You're not connecting this at all to-

Josh Bretl:

no, I'm really having a hard

Josh Bretl:

time with this one.

Dave Schmidt:

I did it for you.

Dave Schmidt:

I said, it served us well, but may not have served others well.

Josh Bretl:

Yeah, I could see that.

Josh Bretl:

I could see that.

Josh Bretl:

You know what?

Josh Bretl:

That makes sense.

Josh Bretl:

It served you well.

Josh Bretl:

I would not have been comfortable doing that.

Dave Schmidt:

That's my point.

Dave Schmidt:

We never asked goody-two-shoes like you to join us.

Josh Bretl:

No, that's true.

Josh Bretl:

I would not have been comfortable doing that,

Josh Bretl:

but it did serve you well.

Josh Bretl:

And I guess we know what is right for our own situation.

Josh Bretl:

I don't know if you had an advisor that was trying to

Josh Bretl:

tell you to blow off steam that way, or something along

Josh Bretl:

those lines, but that was...

Dave Schmidt:

When we filed our articles of incorporation.

Dave Schmidt:

I was the-

Josh Bretl:

for TPC?

Dave Schmidt:

Yeah, I was the president of TPC, so I

Dave Schmidt:

really answered to no one.

Josh Bretl:

You've continued that thought

Josh Bretl:

the rest of your life.

Dave Schmidt:

In fact, when we did TP John Flatley's

Dave Schmidt:

house, he literally chased us.

Dave Schmidt:

And we were in my two door Chevy Cavalier.

Dave Schmidt:

And I clearly remember, you remember where John lived?

Josh Bretl:

Oh yeah.

Josh Bretl:

I know right where John lived.

Dave Schmidt:

Yeah.

Dave Schmidt:

And racing through the back streets of, really

Dave Schmidt:

kind of uptown Elmhurst, trying to get away from him.

Dave Schmidt:

And I finally pulled into a driveway, and one of those

Dave Schmidt:

scenarios where he drove right past us, because I

Dave Schmidt:

turned off the lights, and it was a deep driveway, and

Dave Schmidt:

I was able to pull way in.

Dave Schmidt:

Who knows who's house I was hiding out in?

Dave Schmidt:

He eventually claims he saw my car.

Dave Schmidt:

We never admitted guilt to it.

Dave Schmidt:

But yeah, I remember there was a high speed car chase

Dave Schmidt:

through my Chevy Cavalier.

Dave Schmidt:

We would even go as far as to spell out TPC in toilet

Dave Schmidt:

paper on the sidewalk.

Dave Schmidt:

I don't know if we just wetted it down so it would stay there.

Dave Schmidt:

But we had our signature and everything, man.

Josh Bretl:

I still can't believe you drove down to

Josh Bretl:

the south side of the city to TP Coach Prunty's house.

Dave Schmidt:

You know what?

Dave Schmidt:

We may have done it.

Dave Schmidt:

We did a team dinner at his house, so we may have

Dave Schmidt:

planned it ahead of time to do it right afterwards.

Dave Schmidt:

That kind of sounds familiar now.

Josh Bretl:

Oh, man.

Josh Bretl:

Oh gosh, the good old days.

Dave Schmidt:

We got to wait for Kevin and Vince to start

Dave Schmidt:

listening to these, man, because they're going to

Dave Schmidt:

be coming up more and more.

Josh Bretl:

Our listeners are so excited.

Josh Bretl:

They love reliving our high school glory days.

Josh Bretl:

Well Dave, again, I'm entering a point here where I'm not

Josh Bretl:

going to see you for a little bit of time, so I hope you

Josh Bretl:

have a wonderful trip out to Colorado, and you get to spend

Josh Bretl:

some time with your family.

Josh Bretl:

And I know you're going to see Cowboy Mike out there.

Dave Schmidt:

Sure will.

Josh Bretl:

And I hope he behaves himself.

Dave Schmidt:

I hope so too.

Dave Schmidt:

He can get wild.

Josh Bretl:

He can get wild.

Josh Bretl:

And tell your sisters I said hi, and I miss hanging

Josh Bretl:

out and laughing with them.

Dave Schmidt:

I'll do that, Josh.

Dave Schmidt:

Maybe we'll FaceTime you when we're all together.

Dave Schmidt:

Perfect.

Dave Schmidt:

Cool.

Dave Schmidt:

All right, Josh.

Dave Schmidt:

Well, we'll see you in about a week and a half.

Dave Schmidt:

And to everybody out there, bye.

Josh Bretl:

Bye.

Dave Schmidt:

TPC is coming for you.

Dave Schmidt:

What are you going to do?

Josh Bretl:

That one really was a stretch for me.

Dave Schmidt:

I thought it was one of my better

Dave Schmidt:

ones, but apparently not.

Alex:

Hashtag tax nerd.

Dave Schmidt:

FSR Wealth Management is a registered

Dave Schmidt:

investment advisor located in Elmhurst, Illinois.

Dave Schmidt:

Information and opinions contained in this audio

Dave Schmidt:

have been arrived at by FSR Wealth advisors.

Dave Schmidt:

All information herein is for informational purposes

Dave Schmidt:

and should not be construed as investment advice.

Dave Schmidt:

It does not constitute an offer, a solicitation or recommendation

Dave Schmidt:

to purchase any security.

Dave Schmidt:

FSR is not providing legal, tax, accounting, or financial

Dave Schmidt:

planning advice in this audio.

Dave Schmidt:

These views are as of the date of this publication

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