The Retirement Grocery Store

Welcome to Mr. Stillman's office with John still course Rosewood wealth management their course Rosewood wealth management is for your far drawn most the time John R know that you love going to the grocery store. I mean, I don't mind. I don't know if I would say I love it. It'll actually enjoy groceries. I guess it depends a lot of shopping for well the retirement grocery store is something that you can discuss today and I'm just wondering if you can explain to us how is planning for retirement like going to the grocery store will first let me say that you will remember this but I remember this was probably at least 10 years ago, probably more. At least midnight. Probably later and had a run in the Food Lion right which is close to your house, I had to run and grab something at Food Lion.

I think I was sick and I was getting some kind of medicine or something okay and you were in their at midnight on a weeknight just kind of aimlessly shuffling up and down the cookie. I'll fill you sure you click Ron what are you like you have to be on the air at six in the morning wire you. It Food Lion after midnight.

I don't remember you having a very good explanation for that. I'm sure my wife and sent me there to get some probably so I'm kind of a night owl yet but it never get up so early in the morning to do a radio show. I would be up like that every night, but first of all, if you go to the grocery store and it's the same with retirement planning. You need to know what you need. Well, you know how it they always tell you not to go grocery shopping without a list right and also don't go hungry hungry because everything looks good right so if you go without a list. What can happen. First of all, you forget stuff that you needed to be all over the place yet you're going to get home so I forgot the garlic cloves, or whatever. You're also going to buy stuff that you didn't need right because, as you're trying remember everything you need to be going up and down all these I'll try to make sure you didn't forget anything. You see other stuff in the process that looks like something you probably could talk yourself into getting you get stuff you don't need and you can forget stuff that you do need. So let's apply that same principle to retirement planning. So often people know what they need their money to do. They just assume, well, I wanted to perform well okay will. What does that mean do we want long-term growth. Do we need a hedge against long-term care costs.

Do we need that money to create income for you a little bit of all of these things like what is it you need money to do and so often people will come in with you a few hundred thousand dollars and say how would you invest this I I don't know what do you need it to do. Let's make a list look like a grocery list of everything that you need this money to accomplish for you that Lynn is going to dictate how the money should be invested if not just some argument of well I can make your money perform better than this guy over here. What kind of meaningless discussion is that until we know what it is you need that money to do.

How can we gauge whether it's performing well or not well it makes perfect sense. Also, I guess when you go to the grocery store and certainly this would apply to retirement planning as well make sure everything fits together. Yes, so again let's say you're operating in the grocery store without a list which I know you never do know now you just kind of aimlessly walk around and you fill up your car with a lot of stuff looks good but maybe it doesn't necessarily go together so you might end up with a really nice looking pineapple and you'll have some some cheeses and maybe a tub of yogurt. Maybe some of those cookies that you were looking at that weeknight that I can remember none of these things are individually bad… They don't go together to make a meal. What can a meal or you make out of cookies, pineapple, yogurt and cheese. I'm sure there's something that's probably not very good what the same problem that people have their portfolio you have this hodgepodge of different products that you've collected over the course of your life and all of them might have their individual merits, but they don't fit together cohesively. Let's say you went to a dinner workshop and you got an annuity from this guy over here. You went to another dinner workshop and you put a couple hundred thousand in these mutual funds with this lady over here and you you end up with this non-cohesive portfolio where all the pieces are working together.

There just things that don't really have any direction or specific use, and so that's the same as having a cart full of stuff that doesn't really go together to make a meal. It could be that you have all carbs, maybe it's different products by the end of the day they're all doing pretty much the same thing.

Or maybe you have products that are doing a lot of different things, but maybe some of those things aren't jobs that you need done for you so you just have to be careful you don't have this random assortment of groceries in your shopping cart or in your financial cart there some people who go to the grocery store and have a well in the old days that have a calculator in their hands these days.

I suppose you could probably add it up on your phone but some people meticulously add up every item before they put in the grocery cart and they know exactly how much are to be paying when they go to the checkout counter. I am not one of those people, but you also in retirement planning. You should know how much you're paying well. So when you go grocery shopping. How much of the grocery shopping you do in your house a lot. I'm guessing you're probably responsible at least for the fudge sickle's.

I know you always have fun circles in your freezer.

I'm actually responsible for most of the grocery shopping in my house. How did you end up with that job and I actually enjoy it and I'm usually home at the end of the day and my wife tends to work late because I go to work really early and she is always gone and later that started way back in the day when we had kids. She would take care of in the morning and I would take care of at night and out so that it kind of evolved from that. On a separate note, I'm just now putting the pieces together as to why you guys have been able to stay together so long. You always were gone in the morning. She was always gone the evening she never had to see if that's true, it's really worked out well always said she's a really tolerant woman, Chris Chapman nearly 36 years 37 years at 45 minutes a day that she has to put up with you is manageable set half of that, I'm asleep so you said you're not the person that knows exactly what the total is going to be executor. The redeye that idea, but I wasn't exactly so you wouldn't go up to the register expecting it to be $22 and it's actually 100 know you like to be that for all.

Certainly not. You might expected to be 20 and it's closer to 30. That could happen or you might think it's going to be 60 units, only 48 we are not going to Best Buy a multiple of 450 have a good idea yeah so anybody that's going to go grocery shopping is going to have a rough idea of how much those groceries are going to cost you like to be taken completely aback when you get up to the register and finality cost four times what you thought I just doesn't happen well in the financial world, people often have no idea what it's costing them to have the financial products that they own. It's like they're not paying any attention to the price tag of the stuff they're throwing in their cart so in a lot of cases, you end up paying $100 for financial groceries that you thought were costing you $20 because you didn't understand the costs or the fees associated with those particular investments so it's is one of those things you want to be paying attention for don't speak aimlessly grabbing financial products off the shelf.

Be sure you understand what they're costing you another thing in the last thing you want to ask you about here in the way grocery shopping and preparing for retirement are sort of the same thing. The cheapest option isn't always the best. I mean we know that with food and I guess it's that way with retirement planning as well well and also the most expensive option is not always the best. You really have to look at on a case-by-case basis.

Let's use the grocery store example sometimes you have the storebrand and the namebrand. In a lot of cases those two products are exactly the same thing. They're made of the same factory in the same plant they just have different packaging that's literally the only difference in some of those cases the packaging was gone. A chemist couldn't tell you the difference in one product or the other.

Now that's not the case in all those products, there are cases where the namebrand is going to be a lot better than the storebrand or it could just be that there is a higher cost product but it's higher quality natural ingredients instead of artificial preservatives and processed stuff, so there are times where you should go with the cheaper product because it's literally the same thing. There other times she should go with the more expensive one because it really is a better product. What again same thing in financial world. Sometimes you're paying more than you should be paying and for no good reason. It's like you're buying the namebrand when you could get the generic brand that's exactly the same think this applies with prescriptions to a lot of times you get medication get the generic brand and it's the same thing. The chemistry is exactly the same and does the same thing for you as the namebrand but it cost 20% as much. Yeah, if that much now. So sometimes you should go with the cheapest option. Other times you might want to pay more, may be the advice that you're getting from a particular advisor justifies a higher management fee than you can get somewhere else where the service is terrible. I always like to compare it to the landscaper, so I suppose you have a landscaper who says all right I will cut your grass for hundred dollars a month and he comes by and he does that he cuts your grass for hundred dollars a month and you compare that to another landscaper who says why charge $140 a month right well if you're just looking at it on the surface, you can go with the guy who charges you hundred dollars a month but was a guy who charges you hundred and $40 a month is also going around picking up any trash in the yard he scooping the dog poop for you before he moves he repeats well around the bushes. He runs the edger on the sidewalks along the driveway becomes buying the spring and trims your hedges.

If you have snow in the winter will still come by and scoop some of the snow for you. Make sure that your driveway is clear he's doing a lot other than just cutting the grass and so when we look at that as not being an apples to apples comparison.

Now we understand why yet this hundred and $40 for all of that actually seems like a better deal than the guy who's just going to mow and nothing else for hundred right so in the financial realm. You have to understand not only what you're paying but also why you're paying is more about value than it is the actual price going to the grocery store and preparing for retirement a lot of similarities there need to look for some of the same things. Thank you Mr. Stillman for pointing all that out. Always a pleasure and will see if it line tonight this or after midnight.

This is Mr. Stillman's office. You can also read John's blog the financial beat here on Rosewood wealth management.com online sets along with John Stillman, Rosewood wealth management.

Thanks for listening Carolyn once towards doing business as Rosewood wealth management is a registered investment advisor in the state of North Carolina. The material presented is intended to be general information and should not be construed by any consumer is the rendering of personalized investment advice