Business Innovators Radio - Interview with Eddie James, CKA® Owner of Harvest Wealth Management-How to Know How Much Money is Enough for Retirement

Episode Date: November 14, 2023

Eddie has a clear vision to do things differently as a certified pastor and fiduciary advisor. He wants to challenge conventional thinking in financial services that seem to be all about selling expensive and baffling financial products to the public to generate large commissions, but which never seem to solve the real-world issues faced by clients. He has established a client-focused business culture in which he spends time getting to know his clients, listening to them attentively, understanding them, and building a long-term relationship as a true trusted adviser.Eddie believes that helping clients see money from God’s perspective changes every decision with money and so he is passionate about providing biblically-centric financial planning to help you achieve the aspirations and objectives you feel God is calling you in life.He has an incredible innate ability to translate complicated financial and tax strategies into plain English. His diversified experience working with professional employees, churches, and other non-profits helps them understand and answer client queries to the best of his knowledge. He wants to make sure that his clients are as well-versed and well-organized financially as he is, with a defined plan for how their investment funds will be managed to achieve their goals.Eddie is all about helping others. Eddie believes that helping clients see money from God’s perspective changes every decision with money. Christian clients want a return on their money and have an impact on the world. They realize the brevity of life and see their wealth to invest for eternity and so Eddie devotes a lot of his time to teaching financial literacy, leading a Stewardship ministry, and helping to create healthy churches in Arizona, the United States, and throughout the world. Eddie has a lovely wife and three lovely girls who occupy most of his time outside of the office yet encourage him to look after your funds as if they were his own.Learn More:https://www.harvestwealthplan.comThe opinions expressed by Mike Saunders, MBA, and guests on this podcast show are their own and do not reflect the opinions of this podcast station. All Statements and opinions expressed are based upon information considered reliable. Although, it should not be relied upon as such. Any statements or opinions are subject to change without notice. Investments involve risk and unless otherwise stated are not guaranteed. Past performance cannot be used as an indicator to determine future results. Any strategies mentioned may not be suitable for everyone, information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for you. Before acting on any information mentioned, please consult with a qualified tax or investment advisor to determine if it is suitable for your specific situation. This program is designed to provide accurate and authoritative information with regard to a subject covered.Investment advisory services offered through Brookstone Capital Management, LLC (BCM), a registered investment advisor. BCM and Harvest Wealth Management are independent of each other.Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-eddie-james-cka-owner-of-harvest-wealth-management-how-to-know-how-much-money-is-enough-for-retirement

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of Influential Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have back with us, Eddie James, who's the owner of Harvest Wealth Management, and we'll be talking about ensuring sufficient funds to last. through retirement. Eddie, welcome back to the program. Thank you, Mike. Thanks for having me back. I'm excited to go ahead and spend some time with you again. Thank you so much again for this opportunity. You're welcome, and I know that you've got some just really solid insights, and I just am excited to

learn from you. And I think this topic is so important and timely because many times people put off the retirement conversation, but then when they start addressing it, it's like, wait a minute, here, I might not have sufficient funds. So let's start the conversation here with when you were working with a client, starting that conversation about making sure they have enough money to last through retirement. Guess what? I'm a really big word smith expert. I love that you said lasting through retirement, not to retirement, because getting to retirement, that's one thing. But lasting through retirement, that's a whole different story. So, get us started with your perspective on this.

Absolutely. Thank you, Mike. So if people have a pen, the piece of paper, I always like to say start off with the pen, the piece of paper. Let's go ahead and kind of on your sheet of painter. Let's go ahead and have three areas. We're going to go ahead and call those areas, you know, one, two, and three.

Because our goal is we want to really first have some clarity and kind of limit the amount of surprise expenses for retirement. Right? That's a big item. So, but first off, how do we even determine some of these future expenses? I'd like to go ahead and say first, you start off with what are your current essential expenses that you have now. I'd like to go ahead and call them the four walls. Those four walls being basic housing, basic transportation, food, clothing, and health care.

But I used to be a real estate guy, so you can't just have four walls. You've got to have a strong foundation. So for me, that would be your emergency fund for a lot of retirees. There's nothing like having that foundation of knowing that when life occurs, they have an emergency fund of three to nine months of expenses in place that are pretty liquid. I always like to go ahead and say what's going to go ahead and work best for people when it comes anywhere between three to nine months is just based off of how conservative you are. What's going to go ahead and make you feel able to rest at night? And then for every four walls and a floor, you got to have a roof as well. And so for my believers that are listening in, that's going to be the tide.

And so we all know that in life, you know, rains and those storms are going to occur. And we know that there's no better way to go ahead and prevent those storms from dilapidating our home than to have that roof. And of course, that would be the tide. So those are going to be the essentials, the four walls, your floor and your roof. Then in addition to, because we're still in the first step with the expenses is your essential lifestyle. So what are those non-negotiables? What are those spending fun things that are unique to you and that are going to be essential for your lifestyle satisfaction in retirement? I like to go ahead and say that in addition to you, you want to go ahead and start to think about what are some of your nice to have, you know, write those down as well, areas where you would like to have them, but again, you have some flexibility. The key word here is flexibility.

An interesting thing there, Eddie, is I love that you're talking about those two points and another thing that I would submit and see what you think about this. a lot of pre-retirees would make that list and go, okay, here it is. And you might come back to them and say, okay, but hold on a second here. You're thinking of this list in relation to your work in 40 hours a week and this is your list of expenses. But now when you're retired and you've got all the time in the world, you've got more time to spend money. You've got more time to travel or do those things you wanted to do. So maybe some of those expenses are going to be more than what you think right now because you're looking. looking at it from your current time constraints of working a job.

Yes, you bring up something that we like to go ahead and call there, Mike, the three stages of retirement to where there's the go-go years, the slow-go years, and the no-go years. I like that. The first 10 to 15 years of retirement for most of my clients, I like to say that's their go-go years. They're traveling. They're spending time with the grandkids,

and they're going to, you know, they're living out of the RV and they're loving it, right? That's what I like that. That's what I usually see. That's the go-go years. And then there's always a transition where it's kind of slow go, where do they still go to some of those events and still do some of that traveling? Yeah, but they usually spend more time weighing the pros and cons, whether they should or not, right? And whether that has to do with just with health, whether that just has to do with, you know, kind of been there, done that, who's kind of going to be there? That's what I kind of hear from them.

And then finally is the no-go years. That's where, you know, where I'm spending time visiting them in some of the assisted living facilities, spending time with their family members, you know, as we still continue. you to ensure that that quality of life is still the level of satisfaction, you know, where they're at now. So yeah. Yeah, that's, that's huge. And, you know, I think a lot of times when people don't go through that depth of planning of, ooh, well, you bring a good point there, Eddie. I think if I traveled three times a year, that would be wonderful versus, you know, here's what I'm spending right now. That in slow go, no go and go, go. And go, I don't. I love that analogy and that makes total sense.

So I think the very best place to start is expenses. Well, now if you know this is your expenses, let's back up and go, how much do I have to work with money-wise? And how about my income stream? So how do you close that gap of where you are now and where you are projecting that you'll be based on those expenses? Right. So the key with the expenses is, and, you know, I usually like to go ahead and speak about this a little bit later on, but it's a word that if we, if I mentioned it here on the podcast back in 2019, people probably, not a lot of people would know what I'm speaking about, but now everyone does. And that key word is inflation. Inflation and inflation. I like to go ahead and say that, hey, back in 1993, when my wife graduated from high school, you know,

a posted stamp was like 29 cents. Now here in 2023, that same posted stamp is 66 cents. Yeah. Now think about that. Does it have any additional value? No. It still gets the same letter from your house to grandma's house.

Exactly. Exactly. Yeah. But look what the cost. has done in 30 years. It's more than doubled. So when you're starting to go ahead and figure out what expense numbers do I need to calculate for retirement, especially keeping in mind that based on the actuarial figures that insurance companies are using,

that us Americans, we're living longer lives, not shorter, but longer. So now you have to go ahead and calculate that your retirement, more than likely, you're going to be retired for at least 30 years. Yeah. So whatever amount that you have income lies in retirement, that amount needs to, what, double by the time you're out of retirement? Yep. given that same stamp example. If that holds true, then you're going to have a whole lot more need. And, you know, how can we be assured that that's going to probably hold true?

Just look at the deficit number. It goes up every second. And the only way to cap that deficit is to cap spending, which we won't see the government do or to raise taxes. And we know that's going to happen. So inflation is going to keep rearing its ugly head over the years. And inflation is a necessary evil. It really is. Now, if you looked at just historically what inflation has done from 1993 to 2023, you'll see that inflation historically has been anywhere between 2 to 2.5%. Now, because of what we have seen due to the pandemic and due to some of the other additional crises, in our country that we just never experienced before.

Analysts that are a lot smarter than me when it comes to forecasting, they're forecasting that inflation is going to be closer to 3% on an annualized basis. You know, whether, you know, I don't think that anyone can expect a financial professional like yourself to hit the bull's eye on what's the inflation rate, what is tax is going to do? what are all these things, but we know that the broad indicators are pointing in the directions like what you're saying. So if we are looking at having sufficient funds to last through retirement, and we know you might need 25, 30 years of time to have that happen, and here's my expenses. I just went through that exercise. What do you do to help your clients determine income streams

to make sure that that's going to get handled the right way? Excellent point. Excellent question. We're going to come. to income streams, we like to go ahead and think of two buckets. You're guaranteed income bucket and your non-guaranteed income bucket. So you're guaranteed income bucket like Social Security, pensions and annuities. With Social Security, I know that for many of us, probably who are listening to podcast, you probably remember when the Social Security Administration would annually send you in the mail what your Social Security benefit would be later on when you retire, right? Well, notice that they haven't sent those out, Mike, for quite some time.

Why? They use it. They use the reason that it's the cost. No, it's not the cost. It's that stamp. That stamp phrase has gone up. It's never been about not doing something because of the cost, right? You know, it's because, you know, recognizing one of the items is that for many of us who, where retirement is a decade or two away, they'll notice that on that benefit page, there'll be an asterisk in the corner.

And I'm a big believer that any time when the federal government hands you a document and there is an asterisk, you better pay attention to what that asterisk means. knowing that if you end up reading about what the asterisk states, it states that, hey, you know, based off of our current calculations, there's a good chance that you're not going to receive this full benefit, and you'll probably end up receiving maybe 75 to 80% of the benefit amount, unless we make some major changes, just like you alluded to earlier, whether they be they increase the benefit age, They increase taxes, but something's got to change if people are expecting to receive their

entire benefit. But again, the first bucket is a guaranteed income bucket. Yep, guaranteeing. That's huge. And I was just going to mention with change, it's like pushing down on a seesaw or pushing a, you know, one of those inflatable balls under a pool, water in a pool, it's going to come flopping right back up. So when there's change, it looks good on one hand.

but then where did the where did the repercussions happen so somehow some way there's going to be you know you know hey we lowered taxes well if we lower taxes something else happened on the other end oh we raise taxes something else happened so having that guarantee locks in that kind of peace of mind feeling absolutely absolutely and especially when you're finding yourself in a situation where you're not bringing in any additional earned income. if that is your choice in retirement, then we have to go ahead and really have some true discernment about not only what are we receiving currently, but how do we have some assurances for what you're going to be receiving in the future? Yeah. So once you kind of look at and address and dial in the guaranteed income aspect, what's the next consideration. So yes, the next consideration is going to be your non-guaranteed income. So your investments and your savings. And how do we go ahead and increase those returns while still mitigating the

risk? Because if we just can, if we rely on just the guaranteed income, then that means that income isn't going to change that drastically over the next 30 years of retirement. And if we rely just on the non-guaranteed income, now we're putting ourselves into too much risk and opening ourselves up to not having a consistent income in retirement. Because of volatility. Exactly. Yeah. And those are things out of your control. It's all about their mind. being tax efficient, risk efficient, and market efficient. Yep. Yeah. There's so many moving pieces in that. And, you know, in this kind of, you know, fault process, it seems like, oh, income expenses. What else is there? Well, there's a lot of things

that can punch holes in the bucket. Like we've talked about inflation or expenses or taxes. What are some of the other things that you advise and your clients on? I would have to go ahead and say that once you're able to determine whether you have a deficit or a surplus, what is your next step? So if you have a deficit, does that mean that we're walking through some different options as far as delaying retirement, looking at a second career going back to school? maybe doing some consulted work through either your current profession or picking up a new profession. So, again, having just having those conversations, you know, with someone who's going to be able to go ahead and not only be a friend, but also be a fiduciary. And having that conversation well ahead of retirement so that if that, what sounds like a drastic step like, oh, let me delay this or get more education or do a little side hustle, that you've

got time to put that in place and not feel like you're behind the eight ball. Exactly. Exactly. Because once you end up having some clarity about what that process looks like, now we're able to go ahead and have some continued sleepful nights. Yep. Because you have a plan. Exactly.

Exactly. And you have a plan that has shown itself has a high. high degree of that you're going to actually reach that plant. Yep. And so what happens if you run these numbers and it's like, we got some nice margin here. We got some buffer. You know, what if there is a surplus? What, what then is the consideration to do there? Ah, so I'm a big, I'm big when it comes the generosity there, Mike. So then comes some of those, then comes just a different conversation with your fiduciary. I wasn't given this surplus just to build bigger silos and bigger storehouses.

So what are some of the organizations that have assisted me along the way, or I believe in what they're doing, whether that be my university or some different nonprofits or my place of worship, you know, and so again, where you align with their mission and vision. So then comes to some of the decisions, you know, do we look to give a gift now where we get a chance that actually maybe even participate with the gift in action? Oh my goodness, right? And see the fruit of that gift. Yeah, right, right. You mean I get a chance to actually, you know, be a part of the hands and feeding experience the gift in action and receive a tax break?

Oh, my goodness. Only in America, right? Yeah, yeah. Or again, maybe that's a standpoint where you decide to go ahead and give that gift in your estate. So, you know, but again, it's a standpoint of, you know, that surplus that you've been provided. Being a wise steward of that surplus. Yeah. Yeah.

Yeah. Yeah. And it could look. And guess what? It's different for every single person because everyone has. Everyone has different needs, family situations, goals, aspirations, all of that. But those are some great key points. Like if there's a surplus, how much is enough?

Do you really need nine trips a year, vacation's year? Or would seven be fine? And if you have that surplus, what can you do with it? And maybe it's a little bit of both. You're going to give a little bit now and a little bit in the state planning and legacy and passing the heirs. All of those things need to be taken into consideration. And I think this conversation has been so enlightening.

to think, okay, it sounds like this gray area, but when you break it down, like income and expenses and considerations and boy, I guide me and show me the way, but I think I can see the path forward. I think that's really exciting, Eddie. I appreciate you for bringing it up, Mike, especially from the standpoints of the beauty that, you know, in 2023, you may have gone on nine vacations, but the beauty that as we continue to be in relationship, that, hey, you know what, in 2024 or 2025, you know, we're looking to make some different decisions with that surplus. How do we go ahead? How do we go about doing that? And we're making those decisions in 2023 for the future, right? Or, you know, whether that be that we're just dropping

down to seven vacations or whether it's that we want to go ahead and leave some type of legacy to the children again, children or some other organization where again we align with their mission and vision. I love it. Well, Eddie, it's just been such a real pleasure chatting with you again here on kind of making sure that your funds last to and through retirement. So if someone is interested in learning more and reaching out and connecting with you, what's the best way they can do that. Sure, they can go ahead and reach us on our website. That's at www.harvestwealthplan.com. Or they can just shoot me an email. I'm at Eddie. That's E, D-D-D-D-I-E, at Harvestwealthplan.com. Eddie at Harvestwealthplan.com. Excellent. Well, thank you so much for coming back on, my friend.

That's been a real pleasure talking with you. Thanks again, Mike. Thank you so much again for this opportunity to allow me just to go ahead and just share ways for people to truly find some peace and just kind of get rid of some of those sleepless nights that I know some of my pre-retirees have had before we end up shaking hands for the first time. So yeah. You know it. You're so welcome. Thank you so much. You've been listening to influential entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, visit www. www.

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