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A tax freight train is bearing down on your retirement. To protect yourself, you'll have to harness The Power of Zero.
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Hello. David McKnight here. Thanks for being on The Power of Zero show. Today, I'm excited to share with you something that I haven't done before in any of my other podcasts, and that's the following: I am going to, for those of you who have not yet read The Volatility Shield: How to Vanquish the 4% Rule and Maximize Your Retirement Income, what I'm going to do is I'm going to read for you the first chapter. You're going to have a flavor for how different this is than any other book you've ever read, you can have a feel for the story, for the characters. It won't be too long, it won't take too much of your time, but the Audible version of this book won't be ready for another three weeks so I wanted to give you a little flavor of what this book is like. Of course, if you want to check it out, you can always go to amazon.com. We will be selling this in bulk on thevolatilityshield.com, that's going to happen at the end of April, so we’re still about four weeks away on that. Without any further ado, let's jump into Chapter One of The Volatility Shield.
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Jack Wheeler punched the accelerator on his 1996 Chevy Impala as he tore past city limits. With his hometown squarely in his rearview mirror, a giddiness began to wash over him. His master's of engineering degree was firmly in hand and he was about to step into his first post-college job over 3,000 miles away in San Jose, California. He could finally close the chapter on Lancaster, North Carolina, and its most famous resident. Within seconds, he was humming along the freeway flirting with nine over the limit. When he reached for the radio, he saw his cell phone vibrate to life on the console below. Someone had left a message, strange, he hadn't heard the phone ring. He put in his Bluetooth earpiece then dialed his voicemail. When he heard the voice, his spirits cratered, “Hey, Jack, your stepdad, Ted. I hope I'm not too late but I'd really like to see you before you head West, it's urgent. Swing by the office as soon as you can.” Jack cursed under his breath. Ted Hardy had been the driving force behind his decision to move to the West Coast in the first place. As much as he loved being near his mom, the sooner he could put distance between himself and Ted, the better. His mom would always be welcome to visit... alone.
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He drove another five miles doing his best to ignore Ted's message, but when he came to the next exit, he found his car veering towards it. Within 15 minutes, he was pulling into the parking lot at Hardy's Sporting Goods. Jack weaved his way through the aisles of hockey sticks and tennis racquets until he made it to Ted’s sprawling executive suite in the back corner of the store. On the wall behind Ted's desk were framed newspaper articles along with faded pictures of Ted from the early 80s throwing passes and eluding defenders. There was even a plaque from when Ted had garnered NFC Offensive Player of the Week honors. Jack had always thought of this office as Ted's shrine to himself, a constant reminder to all who entered that Ted Hardy was once an elite NFL quarterback. Jack wasn't going to miss this office one bit.
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Ted sat reclined in his chair, his face buried in the latest edition of ESPN Magazine. When Jack entered, Ted looked up and flashed a perfunctory smile, “Jack, my boy, take a seat.” Jack bristled as he slid into the chair opposite Ted and folded his arms tightly against his chest. “You said it was urgent,” Jack said. “I was on my way out of town when you called so I'm already losing time. Can we make this quick?” Ted flashed another smile. It was that same look he wore on his TV spots when he was selling something no one really needed. Jack had learned to be supremely distrustful of that smile. “Look, Jack,” Ted said, the smile cracking slightly, “I just wanted to let you know that I'm sorry about how things have gone down. I haven't been the easiest guy to live with these past ten years, I just wanted to say that you're welcome back anytime.” Ted extended his hand for a conciliatory handshake. “You could have said that over the phone,” Jack said, eyeing the hand wearily. “I like to look a man in the eye when I make amends.” Jack hesitated another moment and took Ted's hand on his own and gave it a few weak pumps. “Good luck with everything,” Ted said. “Thanks,” Jack said, managing a weak smile. He let go and began to rise from his chair.
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“Hey, before you leave, I was wondering if you might give me a hand with something.” Jack collapsed back into his chair barely stifling a laugh, there it was, the catch. With Ted, there is always some ulterior motive lurking right around the corner. “I know you're on a tight schedule but I could really use your help before you hit the road.” “What do you want?” Jack breathed. “It's about the business,” Ted said, “I sold it off last week, all seven stores. The sale price was almost $4 million, and on that, about $3 million after-tax.” “Congratulations,” Jack said coolly. “I got retirement projections from Bruce Lassiter today,” Ted continued, “He says the projections are conservative and practically guarantee I'll never run out of money. I'm not so sure. I'm only 50 so I need this money to last 35, maybe, 40 years. I don't want to adopt a plan if it's not sustainable. Do you mind taking a peek?” Jack had always been good with numbers and had even minored in finance, but he was reluctant to give Ted financial planning advice on the fly. “I don't know, Ted. I really need to be going.” “Come on, Jack, it'll take five minutes. It's not just my future on the line here but Jenny's too.” With the mention of his mother, Jack collapsed back into his chair. “All right, I'll take a look,” he said with a sigh. Ted slid the proposal across the table, Jack picked it up and scrutinized the rows of numbers. After a few minutes, he looked back at Ted, “Looks like he's recommending you take $165,000 out every year for the next 35 years. He's also running this projection an annual average return of 9%. Do you think that's realistic?” “Well, Bruce claims the average annual rates of return since 1990 have been over 14%, seems like I should be able to do 9% standing on my head,” Jack shrugged. “9% seemed doable even given the trend in the stock market over the last decade but he also knew it could all turn on a dime. 9% might be pushing it a skosh but in the big scheme of things, you'll probably be okay. If the most you ever take out is $165,000 per year, you'll never eat into your $3-million principle, at least not, in theory. Bruce calls it the ‘set it and forget it’ plan. Set this thing in motion, take your distributions, and write off into the sunset, and that's what I want for Jenny and me, a worry-free retirement. Do you think that's what these numbers will achieve?” Jack looked over the proposal again, “I think it's a sound plan, average rates of return are a tad aggressive, but if you can average 9% per year and you and Mom keep your pre-tax lifestyle at or below $165,000 every year, then you should never run out of money.” Ted slapped his hand down on the table with satisfaction, “That's what I needed to hear. I appreciate you stopping by, Jack.”
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Ted rose and gave Jack's hand another shake, “Thanks again, Jack. I owe you one.” Jack pressed his lips into a thin hard line before he bid Ted goodbye and strode toward the door. When his hand touched the doorknob, he paused for a moment and then wheeled around. Their relationship would never be any better than it was right now, he had nothing to lose, “Can I cash in on that favor now?” Ted had already settled back into his magazine, “Shoot,” he said, without bothering to look up. “When I was in college, I worked over at the Lancaster Boys Club. We took kids from rough neighborhoods, single-parent homes, and gave them mentors a safe environment, and a standing invitation to play pickup basketball. I spent a few years there myself before you and mom got married. Mel Kauffman founded it nearly a decade back, do you remember him?” “Mel Kauffman, I can't seem to shake that guy. He's like one of those little yappers who grabs on to the cuff of your pants and won't let go, stops by every month or so asking for money. Finally, it got to the point where I had to ask him not to come back at all.” Jack's determination to keep peace with his stepfather was quickly fading, “Right, well, these kids are transforming under his leadership, he's changing all of their lives for the better.” “Okay,” Ted said. He raised his eyes from his magazine and fixed them wearily upon Jack, “What about it?” “Their facility needs some major overhauls, revarnish the basketball court, replace the backboards, fix the air conditioning, you get the idea. Would you ever be open to emceeing a fundraising event, sign some memorabilia, pose for pictures?” Ted grimaced, “Yeah, I don't know, Jack.” “Ted, if they don't get an infusion of cash soon, they may have to close their doors. That won't be good for those boys and it certainly won't be good for the town of Lancaster.” Ted let out a long exasperated stream of pent-up air, “I love a noble cause just like the next guy,” Ted said, “But if I say yes to Mel Kauffman, the floodgates open. I do that one for free, then who's next? Before I know it, I'm spending all of my waking moments handing out freebies, and that's just not how I want to spend the next chapter of my life. Remember, Jack, worry-free retirement.” “But it's a worth while...” Jack trailed off. Ted had already buried his nose back in his magazine. “Never mind.” He turned around and stormed out of Ted's office. Once again, Ted had given Jack a poignant reminder of why he was leaving Lancaster and never coming back.
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All right, folks, that's Chapter One of the best-selling book, The Volatility Shield: How to Vanquish the 4% Rule and Maximize Your Retirement Income. I hope that whets your appetite for reading Chapter Two all the way to the end. It's got a great plot, it's got a great twist ending, it's got a crime that needs to be solved. There's $5 million missing from a portfolio, nobody knows where it went. Jack Wheeler is hot on the trail. This great story couches financial principles that are timeless and that are germane to all of your clients.
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Again, if you want to read more about The Volatility Shield, go to Amazon, that's the best place to buy it for now. It'll be available at thevolatilityshield.com in a couple of more weeks. I’m really looking forward to hearing your thoughts about it. Of course, I would love an Amazon review. When we launched it 10 days ago, it finished as the number of 533 most sold book in the world, number 2 in retirement planning, number 1 new release in introduction to investing and retirement planning, and a number of other categories. It's really doing well. I appreciate all the feedback. Again, if you want to do an Amazon review, that really helps just give the book credibility. I would love a fair and honest Amazon review when you have some time. That's the show for today. I look forward to talking to you next week. Have a great week.
