Episode 48 - Things we do NOT recommend (Part 2)
Description
Reid Trego welcomes Justin Pitcock back for part two of the podcast. They discuss what they do not recommend in terms of financial investments, such as annuities, whole life cryptocurrency, and buying gold. Justin explains that while these options might have some merit in certain circumstances, they are often overhyped by ads and salespeople. They also caution listeners about the risks and scams associated with investing in cryptocurrency.
The conversation then shifts to reverse mortgages, which they consider a last resort option for homeowners who own the majority of their homes. Justin explains that reverse mortgages are guaranteed by the government and can provide a lifeline for those who qualify. However, he emphasizes that it is rare for most people to qualify due to high equity requirements when interest rates are higher.
They move on to discussing certificates of deposit (CDs) at local banks. While CDs may seem attractive with their guaranteed interest rates, Reed points out that investing in them can lead to missed opportunities in other investment vehicles like the stock market or bonds. He cautions against falling into the "cash trap" where individuals sell low and buy high due to reinvestment risk and inflation.
Overall, Reed and Justin advise listeners to carefully consider their long-term goals when making financial investments and seek alternative options before resorting to options like reverse mortgages or CDs.
The transcript discusses the topic of timeshares, explaining that they are not recommended as investments due to high sales pressure, fees, and difficulty in getting out of them. The speakers share their personal experience with a timeshare presentation and emphasize the importance of considering other investment options such as stocks, bonds, real estate, private credit funds, and infrastructure. They caution against being swayed by guarantees or fear-driven decisions and highlight the behavioral aspect of investing. The speakers also mention that heavily marketed investments should be approached with caution. They welcome comments from those involved in selling annuities, whole life insurance, precious metals, cryptocurrency, reverse mortgages, and timeshares.
The financial advisor emphasizes the importance of understanding individual goals and having personalized planning conversations.