Business Innovators Radio - Interview with Renee Kennedy, President of AAA Life Solutions Discussing Financial Forecast: Dark Storms Ahead then Bright and Clear

Episode Date: January 25, 2024

Renée Kennedy brings over 25 years of industry experience to the table. Their priority is always their clients and their financial stability, which is why they listen to their objectives and design innovative, personalized strategies that meet their unique needs.The focus is on customizing employee benefits plans for businesses to reduce or eliminate costs while offering tax savings. They also specialize in life insurance strategies, 401(k) rollovers, and more to help individuals and businesses build tax-free retirements, secure long-term care and death benefits, and more.At AAA Life Solutions, they always put clients first, with excellent customer service and up-to-date insurance strategies tailored to their individual needs. They do their due diligence to ensure they make the right decisions for their clients, knowing that their choices will affect them for a lifetime.We provide peaceful solutions in uncertain times.Learn More:https://aaalifesolutions.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-renee-kennedy-president-of-aaa-life-solutions-discussing-financial-forecast-dark-storms-ahead-then-bright-and-clear

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 Renee Kennedy, who's president of AAA Life Solutions and will be talking about the financial forecast. dark storms ahead, then bright and clear. Renee, welcome back to the program. Thanks, Mike.

I'm so glad to be here. I appreciate all you do for entrepreneurs like me. You are welcome, and I'm excited to talk about this, but then I'm also a little reticent because it's like, I don't want to hear about dark storms, but I want to hear about bright and clear. But, you know, in order to get to bright and clear, sometimes you got to muddle your way through the darkness.

So, you know, in the financial world, I think it's just like life. You know, we talk before on a conversation where you always have these things that pop up from COVID to 9-11 to the economic crisis to fill in the blank. So in the financial world, you know, what are some of those financial dark storms that you're seeing that are on the horizon? Well, I think the first one is young people not being able to buy a house. And I think that's a real serious issue coming up. And, you know, you've got what's called in the real estate market, you know, the supply and demand, just like every other thing that works in our economy. But right now, what we're seeing is kind of an equilibrium of supply and demand.

Now, I know there's people out there that'll disagree with me, but I know that there are a lot of people like me sitting on a 30-year mortgage that I'm paying 2.7% for. And it's probably not assumable for most people. and so that means they're not going to be able to get top dollar for their house because as the Fed goes in and, you know, the market is already priced in that the Fed is going to lower rates four times this year. I don't believe it. I really don't believe that's going to happen. They've done that the last two quarters. And, you know, Powell, I think, has only done one of two things that they thought he was going to do. So the number one thing is if you look at incomes to, home pricing, they are 30% overvalued. And the only other time, this has been like this, was in the 1970s. And so really, you know, everybody's familiar with debt to income ratio because that's what they look at when you're buying a house. But the thing that no one's really looking at is income to home price ratios. Like right now, it's at a 4.3, 4.5. And it should be around 3. And so it's got a come down, which means that people have been sitting on their houses and going, okay, well, I'm

going to wait until I can get the highest price because the market was so hot. But now the real estate market is not as hot as it was. It might be in some areas of the country. But one of the dark storms is that we're going to see our home prices fall. And we need to be prepared for that. You know, it's funny you mentioned that because in previous conversations, we've talked about certain things that pop up that have a like a side negative effect. Like when this happens to you, it impacts you emotionally. Well, with what you're talking about with housing, if a huge amount of the sector of the economy can't get into homes because they're young and maybe they can't afford it or maybe their credit or the house prices are too high, that impacts a lot of things

actually with the economy. But then also, doesn't it really? really kind of go to the core of the American dream. And if these young couples are out there going, I can't do it, it's not worth it. I'm not worthy. Or it has a ripple effect in that direction that then has a compounding effect on the economics, right? Yeah, absolutely. And remember when in the old days, and I'm older than you, but in the old days, you had to have some money saved up unless you got some kind of FHA new home buyer thing. But you had to have some money saved up, you know, 10, 20%, and that's what you wanted to do, because no one wanted to finance 100% of their mortgage. And so nowadays, they just got approved a 40-year mortgage.

So people are going to have to still put down 10 to 15% to get a 40-year mortgage that they can afford, which they really can't afford, but they don't know they can't afford it, you know. And there's this trickle-down effect to what about home equity lines? So if your home equity line is valued at X dollars that your home was valued at and the value of your home goes down, what's that going to do to your second line, to your home equity line of credit? You know, you're going to have to part of that loan will be called and they can start foreclosing on people. And people just aren't ready for that. You know, they really don't see that dark storm. It's going to hit them like a whirlwind.

And they're going to say, how did this happen? How could I've just been sitting there thinking that everything was okay? Because that's the message that the media is portraying is that, you know, everything's great, you know. And really, I don't want to be like Chicken Little running around saying the sky's falling, the sky's falling, you know. But people need to think. But there's dark clouds. There are dark clouds, okay. And I'm not saying it.

We can recognize that. Yeah, it might not be sky falling yet, but there. there's dark clouds, which is an indicator. So in addition to housing and real estate, what's another dark cloud, dark storm that you're looking at? Well, in addition to that, you've got the commercial real estate bubble. And you can think about all these properties that maybe these developers got overbought in when the prices were so good. Well, they might have bought them on an adjustable loan. And then that's 2008 mortgage crisis all over again, only instead of real estate for homes is real estate for commercial properties. So we're going to have all these commercial

properties and we already see it. How many businesses when you drive down the street aren't there anymore, you know, because of COVID, because of the economy? I mean, there's just so many because of because of right? Or the commercial building that half the building now everyone's working remotely and they don't need to go into the office and that causes real estate vacancies in the commercial world. Exactly. Which affects. the banks. And so we've already had two banks that went under and got bailed out. So what is this setting things up for? Well, how do you fix a money crisis with more debt? You can't, right? You can't. And so that's what they've done. But how are they going to fix the crisis? Well, just like Roosevelt.

And, you know, after the war, he was saying, okay, now or before the, I think it was before, 1940 something. He said, you guys have to turn in all your gold. And then as soon as everyone turned in their gold, they gave them like $21 an ounce. Then they revalued it up to $36 an ounce. Well, they're going to do the same thing with Fed coin. So when they go to a digital dollar, which Visa, J.P. Morgan Chase, I mean, there's so many big companies that are already, McDonald's, you know, they're already going to the system of they don't, if you want to pay cash, that's fine, but they're not going to give you change. back. And why are they doing that? Why are they doing that? And now at football stadiums and, you know, theaters and stuff, you can find reverse ATMs. Well, what is that all about? Well, people that have cash can put

cash in and get a debit card out. Well, for some people, especially people that are not from our country, they're going to think this is a great way that I can have a card just like everybody else. but in essence they're depleting the country of the literal cash dollars and coins that we have in our possession. And they're doing it very gradually. And about a year and a half ago, I went to the bank. I was feeling uneasy and I'm not, you know, I believe in the market. I love, you know, opportunity. This is a promised land. And I believe all of that. And I know that we have great things on the horizon. But I went to the bank and I was just going to get out 20,000 cash. And I just want to. wanted to put it in my safe, you know? Yeah. And I went to the bank and she goes, what do you want this money for?

And I was like, what? It's my business. What do you mean? She asked me that. Like I'm a job dealer or something, you know? I'm like, well, I just, I want to have some cash. That's all, just for emergency purposes. And she goes, well, Ms. Kennedy, you, we have $5,000 now.

And you can come back in the next two days and get the rest. So they did not even have 20,000 cash in their vault that they could give me. Now, I'm sure they had enough in there, but they had to plan on how much money they'd have to pay out between now and the next day or whatever. They probably had a limit per person. But still, that's not the way things should be, you would think. But you wouldn't think that 20,000 would break the bank, you know? And I was like, okay. And so that just proved to me that this Fed dollar is coming.

It's real. There's no doubt about it. Now, people say, well, what am I going to do with my money? How am I going to protect my money? Well, that's what we help people do. Okay. And so there are things you can put into place right now that, you know, we can't control what they do with the dollar. You know, in fact, if you look at what happened in 1973 when our government introduced the petro dollar across the world with Saudi Arabia, that they all agreed to buy oil.

from Saudi Arabia in U.S. dollars. Well, with the pressure that the presidencies have put on Saudi Arabia and China and Russia, they're all ganging up. They're all ganging up on us, even Brazil. And they're saying, all right, we're not going to buy oil in U.S. dollars anymore. And what is that going to do to our economy? People have no idea that this even has been going on, you know? So when I say dark storms,

head, I mean it, because it's going to feel like the sky is falling. And you're going to, if you have no point of reference, if no one's told you this before, then you're like, oh, wow, you know, they're going to start, you know, rioting in the streets. Well, we have that now. What's it going to look like in a year and a half from now, you know? And so getting off of that, the Fed coin is coming, get ready, they will probably do something like, turn in your dollars and we'll give you, if you give us $120, digital coin. We're not going to be able to control that. You know, it will be what it is. And that's the only way that we can get rid of some of this debt. I don't like it. I didn't come up with it. But it is a solution to a big problem that no one has an answer for. You know, we can't

work or pay our way out of this debt that we've gotten ourselves into. Now, we can make it better by what Congress does by eliminating earmarks and things like that that we don't need. And without getting political, I do feel like that we are sitting on a gold mine of energy. And if we can figure out how to become completely energy independent and completely still do all the good things that we're doing with solar. and there are ways. I know the state of Florida is doing all of those. They're doing fossil fuels, solar, and everything. So that's the part that's bright and clear.

The bright and clear is all of the medical advances, the artificial intelligence, the technology, and those things that are coming that we're going to get to sit back and have a front row seat to. If you could imagine being there for Edison when he invented the light bulb. Or Alexander Bell when he invented the telephone. I mean, we're going to see some fantastic things coming up.

It's almost like we see great things on the horizon, but dark storms are there now. But I guess in the meantime, to get from step one to four, we got to get to step two and three. So how do we protect ourselves from some of these risks that you're mentioning? And I know that it's not one solution for everybody, but what are some of the thought process behind? that. Well, the main thing is don't listen to people that tell you that, you know, if you stay in the market, it's going to be okay because the market goes up and the market goes down. And what you have, you have a huge risk of sequence of return. And what that means is, yeah, if you are, you know, 64 and a half and you're getting ready to retire at 65 and the market falls 50 percent,

and you put all of your money in the market because you thought that was. the best place to get back some of the gains you lost during COVID or maybe 2008, you're in the wrong place. So you have to reallocate your money into protection mode. And protection mode does not mean you don't make money. I wouldn't recommend that for anybody. You know, don't go put it, don't be the ostrich in the sand and go put it in the bank in a CD. And don't tie it up in a fixed annuity for five years or three years because it's paying a little more than a CD. There are things out there now that they've never had before that have had wonderful returns. I'm talking 11.7, 19.8, 23.4. These are some real returns that we've gotten in the last year or two

for our clients, and they had zero risk, meaning if the market went down, they just got to keep their previous years gains, and then they just didn't add anything that year. Yeah. It's not free. There's small fees involved, but nothing like paying, you know, your own financial advisor so much money a quarter, whether you make money or not. I mean, how can you afford that if you're not making any money? So right now, the market is at an all-time high from January of 2020 or 21.

And so with that in mind, what is the trigger that people need to pull? I mean, what do you think it is? You've got me so upside down. I wouldn't even want to take a guess. So the whole point of the market is buy, low, sell high, right? So right now, maybe they want to take 50% of those gains in a stock that they've been holding. Okay? Yeah.

And maybe they want to put some stop law. on other stocks that they're holding. And I don't know because I'm not giving advice. I'm just saying in general as a person who has been in the market for 28 years. Okay. So there are things you can do, places you can go, allocations you can switch. And, you know, total return equals growth plus income. But people don't pay attention to the income part. The whole point they have money in the market is so they can have more money when they retire and pull that money out. But the 60-40 rule is broken. That's not true. If you put 60% in stocks, 40% in bonds, then you should be fine. The other myth that's not right is if you take out 4% a year on a million dollars, then you never run out

of money. That's not true anymore because, you know, we have, normally we have an inverse relationship between stocks and bonds, and we don't even have that anymore. Both of them are down. You You know, or right now stocks may be up, but it's manufactured. It's not real. It's five to seven of those technology stocks that are holding up the entire S&P. Well, it should be called the S&P 493, you know? Right. The rest of them are all, you know, in a loss mode or, you know, just treading water mode.

Wow. So you mentioned bright and clear. I know that there's never a time that you can say on January the, you know, we're not going to pick a date. But what are some indicators, leading indicators that would say, okay, bright and clear is coming. You know, when could that happen potentially? And we also know that bright and clear doesn't mean all good and smooth sailing for the next 20 years because we know that life and financial markets have a volatility. But talk to a little bit about bright and clear. there happens when you have multiple contingency plans in place.

And what that means is if the market goes up, you've got a plan. If the market goes down, you've got a plan. If your family gets sick, you've got a plan. If a parent passes away, they have a plan. Bright and clear, I think we're in for another year and a half to two years of extreme volatility. I hope it's not three to four. but I think at least two years of extreme volatility. And then I think we're going to have seven years of good.

And I think by 2030, you know, the world could truly change. It could do a complete turnaround. Now, after that, I don't know, maybe Armageddon. Who knows? Right. Then it won't matter. No, it won't matter. But at that point, it's like you want to have some guarantees in place so that if the market

goes down, you don't have to worry. That's what we do. And, you know, if you go to our website, I have my first book on there that you can request and we'll send it to you. I have a second book that will be coming out soon and that'll be on Amazon. So you can look at that book. And in the book, I talk about a lot of real life, real people, things that go on, including my own life. And so it's not a tell-all book. It's just, hey, here's some issues in life.

life that have happened to me and maybe they've happened to you. And here's some answers of what I wish I'd done and here's some things that I'm glad I did and maybe it'll help you too. It sounds to me like it's real and transparent and trustworthy and not polished up and like unattainable that look look at me. I'm the best and no one can attain to what I did. But you're like, look, I've still got mud on me from the mess that I mucked through two months ago. but I figured out some ways and some paths around. And I think people really relate to that kind of thing. And that's the approach that you take in our conversations.

It's like, here's the deal. I'm facing this. I went through that. Here's what I did to get through it around it under it, not avoid it because guess what, personal and professionally in life, we're going to hit these roadblocks. It's not like we can avoid them, but how can we make our way through? And that's the, to me, the bright and clear might not be all things are rosy, but it might be you put enough things in place that even though there's volatility, you can be sitting

back going, hey, let the markets do crazy things, but I've got my retirement set in accounts where I'm not feeling that gut punch every time I turn on the news. That's right. And if you want to do options and you want to buy little crypto or you want to, you know, consider that your play money and use that as your play money. I know so many people in retirement, their husbands or wives get in retirement, and then they start becoming a day trader because they think they can beat the system. And they do. They do some days. They do great. I had a teacher and an engineer in my office one time and I said, I looked at

them both and I said, okay, so they had about $5 million. And I looked at the husband and I said, so how much you're willing to lose? And he said, oh, about 50%. So you immediately think $2.5 million. I look at the wife and she's about to pass out in the chair. And I said, well, what are you? you willing to lose? And she said, nothing. We've worked our whole life for this money. Right. And then I looked at him and I said, then why are you still in the market? So I think y'all need to go home and talk and come back and see me. You know? Yes. So anyway, it was good. But you know, we get on the same page. We provide peaceful solutions in uncertain times. That's our motto. And we do it in a way that you won't be worried or feel bad if your friend is in the market because you're going to be

making almost just as good of returns as they are, if they even are. And that's the question. Well, Renee, I think if someone has listened to this saying, you know what, I recognize there's dark clouds and financial storms on the horizon, but I want to make sure I get some of those peaceful solutions. What's the best way they can learn more and also reach out and connect with you? They can go to our website, www.aa-a-a-lifolutions.com or email me, Renee, R-E-N-E-E-E, and at AAAaalifolutions.com and just put in the line at the top, just put help question mark, and I'll try to prioritize those. And they can request the book on my website too.

There's lots of videos they can watch there too. Excellent. Well, Renee, thanks so much for coming back on. It's been a real pleasure talking with you. Thanks, Mike. I appreciate you too. 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