Business Innovators Radio - Interview with John Badalamenti Co Founder & CEO of Safe Estate Discussing Market Risk

Episode Date: April 7, 2025

John has lived in this business for a while, 30 years fighting the Wall Street battle! Born and raised in beautiful Michigan with a close family that he loves and cherishes. They spend a great deal of time together travelling and love visiting their family cottage in up north of Michigan. One of his truly favorite spots is mystical Mackinaw Island. Being an avid animal lover and protector, he will soon provide a sanctuary for animals that need love and a safe home. This will be in memory of my “ex-partner” and beloved friend Bambi, whom he rescued and went everywhere with me in my travels. In my business model, he works in many states but primarily the Michigan and Ohio areas, fighting for my students and clients from the stock market insanity.“Emotions run the market,” and he has learned from all those emotions from all his students through the years!Learn More: https://www.safeestate.net/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-john-badalamenti-co-founder-ceo-of-safe-estate-discussing-market-risk

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 with us, John Baddalenore, who's the co-founder and CEO of Safe Estate, and we'll be talking about market risk. John, welcome to the program.

Hi, Mike. Thank you for having me here. I really, really appreciate it. Hey, you're welcome, and I know that market risk is kind of a term that makes you feel sick to your stomach. So before we dive into that and learn all about your perspectives on how to properly manage and mitigate market risk, tell us a little bit about yourself and your story and how did you get into the industry? Well, I'm a Michigander, and I've been in this business for quite a while, 30 years in the business fighting the wall, Street Battle. And as I said, I make my home in Michigan. I do work outside of Michigan quite a bit.

I travel into the beautiful state of Ohio in the Cuyahoga Valley. And being in Michigan, my whole life, there's many special places in Michigan that we travel around. I have a very close family being Italian. You know how that is, right? So we get together a lot and we travel around. And one of our favorite places to go is up north Michigan. We have a little cottage on the Lake in West Branch, Michigan. We all gather there in fellowship. My baby brother is a pastor, so he tries to keep the family in line. And one of my favorite places is Mackinall Island, which is a very mystical special place up in up North Michigan. If you've been there, you know about it. If you're not, it's just a great place to go with the family. Quiet,

no cars, horses and buggy, and bicycles. So it's great stuff. Great stuff. And, and, and, probably to enhance that experience, you would probably recommend when you arrive, turn your cell phone off, put it in your briefcase, and don't get it back out until you're headed back home. You bet. I tell people the same thing when I teach in my college classes. You know, just keep the phones off so it doesn't disturb anybody. But up there, I don't think, it's probably one of the first places I see that people aren't carrying their phones all around other than taking pictures.

It's just so peaceful and beautiful. Nice. It really is. That's awesome. Well, peaceful and beautiful sounds good in real life, but when we now start, thinking about market risk, sometimes that doesn't feel peaceful and beautiful. So let's talk a little bit about that. When you start working with a client and they start talking about the risks or volatility, you say that the market opinion matters, not ours. How does that work? Talk a little bit

about that. Well, let's lose an example of the very day today. It's funny you ask that. Look at what is happening to our stock markets today. Now, we know something's triggering that. There's a big tariff discussion going on in battles. We know that. But the market's really been ready for a fall for a long time. It's been on such a tear that we were bound to hit a wall. And it's been happening over the last month. We've seen the indexes really pull back and the volatility increase. Things like the volatility index spike up. And today just put a real big hammer blow on it. It's dropping like a stone. And when I say the market's opinion matters, I'm not seeing that in a cocky way. We actually, I say this in a lot of my classes. I stole that from an old trader named

Jesse Livermore, who wrote a famous book back in the 1930s and 40s called How to Trade in Stocks. And he basically said, it's the market opinion that matters, not ours. The market does what it wants to do. It doesn't care what we need. And if today we needed to go up, it said, too bad, I'm going down. Yeah. And it's falling. Because of the news. A lot of time. Yep. Yep. So it just goes down. It does what it wants and it hits that portfolio. And you can scream at it all you want. You can hire a cheerleading team.

But it just, it's going to go until it wants to go. And when it wants to go up, it goes up. When it wants to go down, it goes down. And that's the moral of the story. Yeah.

And, you know, I think, I think that the really frustrating thing is you never know what, what direction that a certain piece of news is going to take it. You know, because like you mentioned tariffs, today it might be tariffs. Tomorrow it might be some other piece of news.

loser. And who knows, maybe the tariffs might have rallied the markets to react in a positive way because now people or the market is interpreting it that way. So the bottom line is when you're talking to your clients who are looking to have their, really, their life savings, their retirement in stable funds, the market has been for decades, the place where people put it, but you have to address that market risk and that volatility. We know from what you just said, you don't. really have control over it, but there can be some things you can put in place to mitigate it. What are some of those things that you are showing your clients to help kind of mitigate that volatility and risk? Well, stability is stability. It's how you enter it. When you're in it, you're in it. You remember if you ever heard the line, you can't lose what's not on the table, the old poker cliches, right? Whatever's on the table out there in the market is at risk to go up and down every minute of the day. So it's kind of where you're at in your retirement life. Most of the classes I teach are two baby boomers and retirees. And they come up with a percentage

and say, I'm scared, you know, for half of my portfolio. I'm more of a 50-50 person. Or so they say at this time of life, what do I do? How do I bring that to the sidelines and get it off the table and out of the market volatility? Well, it's the decisions you make. You can always make changes. We call it shifting. We use colors like a crayola can and shift more out of the reds or more of the danger to more of the blues and greens or more of the safety and liquidity. And it just requires change. Have you ever read that book, Who Move My Cheese? If you're familiar with that book, it was basically just a couple of mice that got confused because somebody moved the cheese on them. And they didn't know how to make a change. And so what we tell our clients are, if you truly

are worried and you want to take that 50% off the table, then you need to make a move. now and stop the bleeding for real. No matter what anybody says to you, you need to make the choice. And we usually use stable, principal, safe investments, everything from money markets, short-term CDs, longer-term pensions and annuities, we want to call them annuity-backed investments, things that are truly green and protect your principal and your interest. That's the key. Yeah. You mentioned shifting and moving at, and it made me think about what do you advise your clients as far as what age bracket? So, for instance, if you're in your 30s, you might have such a long runway before retirement that you can take it on the chin a little bit more and have a little bit more, you know, longevity with your dealing with risk and volatility. But when you get into other ages, you might need to shift it a little bit sooner.

where are you guiding your clients that way? That's a great question. Great point you're making, actually. Most of my classes, when I teach at the universities and colleges, it's funny. I rarely see a person in my class under the age of 50. It's usually maybe a grandkid comes along with grandpa because they're in completely different places. The younger crowd is, you know, they're shop talking about what stocks were going in and what

funds were going in and they're mixing it up. They have a longer time horizon, as you said. Yeah. But a lot of the people that come into the classes are. are people I talk out there too in the world and many restaurants that I sit in. I find myself living in Panera breads, believe it or not. I was in three just yesterday in Ann Arbor, Michigan. And people have the same concern at those ages of 55, 58, 60.

John, I'm scared. I'm going to run out of my income. I'm afraid I'm going to. And I say, gee, I never hear that, right? Okay. I say that laughing. I said that's their biggest concern. Their time horizon is shorter.

So if they don't start to make those shifts now, And it's tough to make those changes because they're in this cookie cutter mentality. It's not their fault of, well, don't I just leave it where it's at and just ride it all out? And I say, that's if you want to ride the roller coaster. If you want to take off what you don't want to lose, you better make a move now. And if you want to try to ride that roller coaster, it really does depend on your age because you can ride it out if you're in your 30s. But if you're in your 60s and you're going to need to access the money shortly, you don't have time for that. that. So let's talk a little bit about on those dips when you go and dip down like you're

mentioning, you know, today, the market's going crazy. Next month, it might be, you know, vibrant and who knows, we just never know. But if someone loses 40%, 30%, 20%, does that mean that they are just sitting there watching for that same 20% they lost to come back 20% or how much do they actually have to earn back to get to ground zero there? No, a great, great. point again. It's like that sequence of return risks, they call it, right? All those little words are nice. And our beta, they say my beta's low. Well, beta schmeta, this is what I thought I'm in class. What does beta have to do with anything other than a comparison to an index, right? What's happening in your account? Sure, the market's down right now, recently as much as 10%.

Today, it's going to make it a lot more, of course. You can sometimes recoup that 8, 9, 10% by making that 10. The problem is when you get to those 30s and 40s, which happen quickly. We've seen that in 2008 and 2001 and during COVID. You can lose 30% quickly. All of a sudden, when you're down 30 or 40, you don't come back the 40 you made to replace the 40 you lost. You have to come back nearly 80.

Just do the math simply. If you have $100 and you lose 40%, how much do you have left on 100 if you're down 40? We've got 60, right? Now make back the same 40. make 40% back on $60. You're not at 100 anymore. You're at 84.

So now you have a net true loss, a real loss of 16% still. So that means you don't come back the 40. You've got to come back 75 to 80. And it only gets worse if you're down 50. We've always seen the market lose as much as 50 in the worst times. And we've always seen that. You can prove that by going out there. I tell my students, test me.

If you think I'm lying, fine, test it. We'll debate it and have a fun debate in class, right? But test the numbers. You can actually see that that's actually what's happening out there. Absolutely. You know, I think that people, when they hear that math, it just, it's like when you look at those optical illusions and it's like, you glance at it and you think one thing. But then when you showed the secret, you're like, how did I miss that? And what you just explained there is like, wow, that volatility really knocked you.

for a loop. And I would suspect in certain, we talk about brackets, you know, like when you're in your 60s or 70s, when you actually need to start pulling money out to live or because you're required to, you know, with your government required withdrawals, you almost feel like you're getting a double whammy because I've got to pull it out. I must do it. But the market's down and you're getting hit double there, right? Right, right. Isn't that funny you said that? It's like I was ready to roll on to that. People in my classes tell me that I speak. and 78 r pms and it's it's we laugh about it but it's i have a passion in this business like i was a trader from the old days i was a stock trader i was an options trader um i used to put together bond

portfolios we call them bond ladders i still do some of that stuff you know it's certain realms of the business but um this drive to safety protects people because what you just said is what happens with a domino effect we call it in a portfolio somebody's 64 they're getting hammered in the market like, which is happening right now. And they say, boy, I'm down 30 percent. And while I lost the 30 percent this year, I lost enough in my portfolio to go buy a home. I'm down 250,000. I can take the money out and go pay cash for a house. I lost that much on paper. And they're telling me, don't worry about it. It's a paper loss. No, it's a real loss. If you have to cash it out at that moment, or you need to go give to a grandbaby or pay for something immediately or go buy that house,

it becomes a real lost real fast. So if you're drawing out income while you're down 30% that year and you've lost 200,000, and then you're drawing out $30,000 of income to supplement your social security, you're now down even more. And all of a sudden, when you start to look at the long-term numbers, you say, my gosh, I'm going to run out of money at 85 or 82. How is this money going to last? So yes, it creates a big domino effect.

The market does not care about what you and I just said and what we're trying to teach. The market just keeps taking until it's ready to give back. And that's the more. And I think another aspect, too, is you mentioned, you know, 80 or 82, and we don't know how long we need our money. I mean, nobody knows the day we're going to die, what age we need to live to. We don't know that. But we do know that statistically people have been taking better care of themselves. eating better, exercising, health care is better.

So they're living longer than back in the day when those tables were created. So now you might retire at X age, but you might need your money to last a whole lot longer than what people were thinking in decades past. So talk a little bit about that longevity aspect and how the risk factors into that to where you need to be even more safe and protected. Well, Mike, gee, you could come and teach my class with me. You're making the points are exactly on, right? You're correct. Yes, baby boomers, see, there's 10,000 a day retiring, right? There's millions of baby boomers that have been retiring.

And these people are living longer active lives. They enjoy life. They go out. They spend just as much money today having fun with themselves, their grandbabies, their children, as they were when they were working. So that old line of, well, you spend a lot less in your retirement, that's changing. And people are living a lot. longer and they need this money a lot longer since they're making it into their 90s or 100 years

old today so yes their concern is am i going to run out of money and that's become the big concern with social security look at all the battling with social security out there right now i hear about that in my classes all the time people throw their hands up and we talk a little bit about how taxes and things like that affect social security and how your social security income gets affected by a lot of things. In fact, even drawing the money out or showing a larger income each year as you're retired affects how they tax your social security. And so it just starts this big domino effect.

You bring up a great point about, yes, we know we're living longer so money needs to last longer, but you then layer in the other aspect of because we're feeling better. those go-go years are spread out more and it's like, oh, well, we're finding that we are traveling more because we can. And we're, yeah, we're living longer. So that means we're doing more travel. We're whatever the case is. And I would suspect that you're in a sense becoming like a life coach of sorts to go,

hey, what does retirement look like for you? And how much will you need a retirement? And they say, oh, we need X number of dollars. But then when you drill down and go, oh, well, aren't you going to go on those vacations and visit the grandkids and did you want to? start that nonprofit or donate to charity. And now all of a sudden that one number that they were thinking they needed now has gotten bigger and there could be some gaps. And G, have I got into like, I like the Russell the Bush is a little bit out there.

I always have in my classes. It makes people come down to reality and really start to talk and raise their hands and get involved in the setting. And that's great. I like to hear, I learn from people in my business every day through the 30 years I've been in it. and it's just it's amazing the things you hear out there there are concerns in those hands like I said they go up right away in the room and we've heard things like and I'm not mentioning any names here we'll just call it other people in the establishment saying well don't take that trip this year save a little bit more money and you can't really spend it on the grandbabies because you want

to maybe put a little bit more of that on the credit card payment I call it budgeting and I don't want to rip on anybody. And again, I'm not saying any names out there, but I'm so sick and tired of that mentality from these booksellers out there telling you how to budget your money and make an extra payment on the principal of the house. Right. At the cost of going on a vacation with the grandchildren. All because you potentially let Wall Street steal $200,000 from your $800,000 nest egg and you're wondering when it's going to come back. So now you have to forego the vacation. And that just eats at my bones, right? I want to start protecting everybody. So that's, you know, it reminds me of a book I read back in the 90s.

Did you ever read the four-hour work week by Tim Ferriss? Absolutely. And I love the concept. You know, it's probably not very feasible. Not many people can only work for hours. But the neat concepts. But I remember one of the things he said in there was don't wait until, air quote, retirement to go do all these things because who knows what health you're going to be in then

or what financial situation would be in then. Structure your life or if you own a business, structure your business. so that you can take these little mini sabbaticals, many retirements, and take a two-month trip in your 50s or whatever the case is. And then you're getting that feeling there because you never know what's going to happen. Now, definitely be wise with your money and hopefully in retirement. You don't have huge credit card debt. But I know what you're saying there is you see these talking heads out there, the podcasters, the authors, the whoever, the pundits that are like, oh, you should. Well, in reality, making memories with your family.

and taking care of your family is so important. And like you said a few minutes ago, you might have this one person that goes, I think you can handle that risk and do it this way. But if it doesn't set right your gut, get out. Take the money off of the risk and put it into something on the sidelines that is going to make you sleep well at night. You don't have to have all of your money and risk. We call it red money. But you still want to play, hey, I'm a fair guy out there to all the colors, we call it. You still, I'm a trader from heart back in the day.

I still trade with risk money, right? But when you get to a certain age and time in your retirement, like we were talking earlier, there's no time to be massively risky with 100% of your portfolio at 60 years old. Yeah, maybe 10%. Yeah, there you go. Here's what's funny. How about maybe even a 40-60? You know, that money is on the table and what it's going to do out there it's going to do.

And today it's a bad day, right? Maybe tomorrow will be a good day. Yeah. You can't afford to sit there and say, oh, well, I lost, you know, 30% I'm going to have to wait to come back 50 now. You know, they need to look at it that way. You don't want to steal any of the things you're looking forward to doing because you have to wait for that money to catch up.

Well, what if it doesn't catch up? What if it takes seven, eight, nine years? What if it takes the time it did in 2008 where people weren't seeing account values come back until 2014? Okay, then we went on a rally after that finally. You don't want to shortchange yourself like that. You want to stay healthy, first of all, because without your health, the money. will mean nothing and then you want to enjoy that money you don't want to be terrified that if you

pull it out you're going to lose even more or you're going to owe the IRS more money so you're afraid to take it out because the tax man's coming well there's things we can do to eliminate the taxman in certain instances but at some point he's going to get something you know he's your silent partner out there you can't get away from it you know so and john you mentioned health um and i know neither one of us are doctors but i'm confident that um we both know that we've seen things online that stress negatively impacts our health. And if your risk in your retirement is too much, your stress levels are too high, which then negatively impacts your health.

So I think there's so many things that really are beneficial to make sure that you are dialed into the right colors and making sure that the market risk is doing the right thing for your portfolio. So I think if someone is listening to this and going, hey, let me just have a second opinion or look at what I've got going on, what's the best way that they can learn a little bit more about what you guys offer and reach out and connect with you?

Well, attending our classes is always one of the greatest ways. I always tell people, you know, rather than just meet me for coffee at a coffee shop, I'm in 20 times a day, right? I love being with everybody out there and eating, right? And I always say, cut to one of our classes, attend one of our classes, and then you get a chance to see what we do

and hear what we're thinking of, and you can ask questions personally right, there. And then we can always meet afterwards and grab a coffee and put it more on a personal level for you. So the best way to find that out is I teach out there for a few nonprofits. They brought me in. They have people across 50 states. And I actually teach in several different states for them. And we can get you the information and materials on where I'm teaching next. It's usually at colleges and universities. And like I said, we can get that to them. One of the best places they can do is visit our website, which is www.

www. Safeestate. That's S-A-F-E-E-S-T-A-T-E dot net. Safe-E-E-State.net. Or I always say, reach me, call me at any time. I love people calling me. If you can't get me at the minute, leave me a message. Call me at my direct number.

I answer or I get back to you. And that number's on my website, or I'll give it to you now, 248, 495, 3852. Don't be afraid to call me and I'll let you know where I'm teaching. You're invited. Come with a guest or a family member or call me direct and ask me any question you need to ask me. Perfect. Well, John, thank you so much for coming on today.

It was a real pleasure talking with you. Thank you so much, Mike. I appreciate you having me on. 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. influential entrepreneursradio.com.