Episode 48 – Things we do NOT recommend – and things we DO (Part 2)

Description

Reid Trego welcomes CERTIFIED FINANCIAL PLANNER™ professional Justin Pitcock back for part two of the podcast to discuss what they do not recommend in general in terms of financial investments, such as annuities, whole life, cryptocurrency, and buying gold. Justin explains that while these options might have some merit in certain circumstances, they are often overhyped by ads and salespeople. They also caution listeners about the risks and scams associated with investing in cryptocurrency. They also discuss items such as reverse mortgages, CDs, and timeshares.

Reverse mortgages

The conversation then shifts to reverse mortgages, which they consider a last resort option for homeowners who own the majority of their homes. Justin explains that reverse mortgages are guaranteed by the government and can provide a lifeline for those who qualify. However, he emphasizes that it is rare for most people to qualify due to high equity requirements when interest rates are higher.

CDs

They move on to discussing certificates of deposit (CDs) at local banks. While CDs may seem attractive with their guaranteed interest rates, Reid Trego points out that investing in them can lead to missed opportunities in other investment vehicles like the stock market or bonds. It’s the opportunity cost that is the main reason CDs as an investment option are discouraged. He cautions against falling into the “cash trap” where individuals sell low and buy high due to reinvestment risk and inflation.Overall, Reed and Justin advise listeners to carefully consider their long-term goals when making financial investments and seek alternative options before resorting to options like reverse mortgages or CDs.

Timeshares

They discuss the topic of timeshares, explaining that they are not recommended as investments due to high sales pressure, fees, and difficulty in getting out of them. The speakers share their personal experience with a timeshare presentation and emphasize the importance of considering other investment options such as stocks, bonds, real estate, private credit funds, and infrastructure. They caution against being swayed by guarantees or fear-driven decisions and highlight the behavioral aspect of investing.

Reid and Justin also mention that heavily marketed investments should be approached with caution. They welcome comments from those involved in selling annuities, whole life insurance, precious metals, cryptocurrency, reverse mortgages, and timeshares.

The financial advisor emphasizes the importance of understanding individual goals and having personalized planning conversations.

If you want an expert who can give you sound advice and help you navigate how to best invest your wealth and plan for your retirement reach out to us to schedule a quick call. One of our CFP® professional wealth advisors would love to discuss your individual goals and options with you. The first step in our process is to schedule a free 15-minute intro call with our Goodwin Investment Advisory consultant here.