I have a client (let's call him Joe Bob). Joe Bob has been a client of mine since 2004. I helped him establish a Simple IRA for his small firm.
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Prior to meeting Joe Bob in 2004, he had built a successful business and sold it in 1998, netting $4,000,000. Pretty good haul, wouldn't you say?
He happily turned his $4,000,000 over to a local stockbroker who, in a matter of four years, traded it to zero!
Now, Joe Bob is starting from scratch (zero) all over again (year 2002). Joe Bob built up and sold a new business with an after-tax profit of $5,000,000. This time Joe Bob has a new advisor (yours truly). I sat down with him and asked two very pointed questions:
1) Is safety of your money important to you?
2) How much are you willing to lose?
His answers were the following:
Joe Bob is now in his late 50s and planning to work another three years. He is now a conservative investor more than ever. We will all get to a point in our life that if we lose a large portion of our life savings, we do not have time to make it back! We are investing 80% of his $5,000,000 in Fixed Index Annuities all with income riders.
We show Joe Bob how to participate in the profits of the market with no downside risk!
Once is enough!