Mike Milligan of One Oak Financial joins Coach Pete D’Arruda and Thomas Lipscomb to discuss retirement income as an asset. They explore the difference between an account balance and a plan for monthly spending, the uncertainty of market returns, and the role income can play in supporting a retirement lifestyle. Part one of their Financial Safari conversation.

Call 800-661-7383 or text PLAN to 600-700.

Transcript

Automatically transcribed from this episode; timestamps are approximate.

00:00 Welcome into the Financial Safari. Excited for our show today. I'm Thomas Lipscomb in studio alongside bestselling author Coach Pete D’Arruda. And joining us, we have on the line Mike Milligan, founder of One Oak Financial, host of One of a Kind Financial Show, and a friend of the show as well, a friend of Coach Pete's for a very long time. Hey, Mike, how you doing? I'm good, Pete. How are you? Good. Hey, Thomas, tell everybody where Mike is joining us from. So Mike is joining us from the beautiful land of Puerto Rico. Oh, Michael would say beautiful, right? Is it beautiful down here today? Oh, my gosh. It's 84. It's 84, 85 every day. It's absolutely gorgeous down here. And it's a little bit of a breeze. We haven't had that heat that you guys have had back in North Carolina, right? That has just kind of been stifling over the last month or so.

00:46 It's been crazy. Same every day. Same every day. Watching the U.S. Open on TV the other day. And the players who aren't used to humidity, like even in the first set, they were like, they look like we're getting ready to die. We're used to this, Mike. I mean, I worked in the watermelon fields one year when I was in high school. And remember, I'd been working in the fields back in the day. I don't know if you ever did that. But you're a Scotland County guy, too, by the way, aren't you? Yeah, yeah, that's right. That's right. Coach Willard. Yeah, Coach Willard. Willard's watermelon. So a little history, folks. Mike Milligan there. My mom taught him seventh grade, and we found that out a couple years ago when we met. I didn't know who he was because I'm a little older. But my mom taught you, and that's pretty funny. That's funny, yes. That's right. Small world. Ten years different in age. We ran the same streets. As a matter of fact, we were talking, you know, before the show today,

01:33 we were talking about just some things, you know, that happened back in Scotland County. Good old LBG. You had to make your own fun back in the day. Yes, you did. The good thing there was no social media to tell everyone about the fun you were making. Yeah. Nowadays, kids are getting into trouble. They post everything. Thomas, we always talk about, like, Pete and I, when we went through elementary, middle school, and high school in Scotland County in North Carolina, North Carolina was the 50th ranked school in education in the nation. Oh, wow. I didn't know that. Wow. There are 100 counties in North Carolina. Scotland County was 100th. So we literally got the worst education in America. The lowest below. Wow. Hey, you're talking junk about my mom? And yet, here we are. The college goes back in the road.

02:20 You cannot be serious. Be serious. I said U.S. Open. So might as well play a little macro there. No, I mean, it is. My mom took it serious. My dad was a college professor. But, yeah, unfortunately, they don't put in. Well, back in the day, we had the mobile home classrooms, and we had the cinder block schools. Look at these Taj Mahals they're building now. I think they're putting money into the wrong places these days. Instead of building big buildings, they should build big mines. That's good. I like that. And the problem was is, like, when your mom had us in her class, right, there were 28 middle school kids in there, right? And we were more worried about, like, man, that girl looks good now because hormones were kicking off. Right? We weren't worried about, like, you know, Pythagorean's theorem or, you know, the atomic symbol of hydrogen. Right? We just weren't interested in it.

03:06 We were interested in what we're going to do in the field later today and what we're going to do in the break. Unless you're going to be a chemist in the future, it really doesn't matter what the atomic symbol of hydrogen is. It's more important to worry about life. And what the most important thing is is to establish a plan in your life, even if you're not the kind of person that likes to write things down, at least have it in your mind. And when we do a plan, Mike, we like to call it Plan Once, Plan for Life. And it's how to give every dollar you own a color and a job and put a check back in your mailbox every single month for as long as you live when you retire. And stop the quiet leaks that have been eating your money alive while you weren't looking. Those are called financial termites. We put a plan together. We eliminate those financial termites, which could save you 2% to 3% to even 4% hidden fees a year not coming out of you, not evaporating out of your portfolio, staying there.

03:55 Over the course of a 25-, 30-year growth cycle, you're talking about about a million dollars you're losing when you talk about the money you lost plus the interest you could earn. How embarrassing is that in the financial world that some advisors are doing that to people? It's absolutely crazy. But think about this, though, Pete. Like when people go to their job, you know, most people work 30, 40 years at a job. When they go into their job, they have a written job description that they know exactly what they're going to get paid for doing that work. And they have somebody helping them along the way, a manager or a coach or a supervisor, right, helping them in their job. And then they go into retirement and they're, you know, they're trying to do it themselves with something that's not written down without a plan. You would never go to work without a plan, right? You would never try to build a house without a plan. You would never try to go on a trip without some type of, you know, some type of itinerary.

04:45 And most people are just, they don't treat their money the same way. And that's what we, I mean, that's what you guys do at your firm when people call into your show is you put this plan in place. That eliminates, right, a lot of things that people don't even know they have, just like termites, right? Most people don't know they have their termites until they're too late. Most people don't realize what advisors are actually charging because, you know, maybe we can talk about this, the things that we've heard advisors say. Yeah. I've heard advisors say, just trust me. Just trust me. You've got my word on it. That's right. Follow the green line, right? I mean, all of these marketing slogans are the best one. The best marketing slogan out there right now, I am a fiduciary.

05:31 Oh, we hear that all the time. Right. Sometimes I say, well, if you are a fiduciary, why aren't you offering a true income plan to folks so that when they hit retirement, they never have to worry about where the income is going to come from? Why haven't you given them a green flag on their mailbox where every month the postman is going to bring you a check? I mean, you have to spend it because the next month another one is coming. So the game here is spending your money, not trying to save it because you've got to spend it because it's coming in faster than you can spend it. That's the ultimate goal of retirement. Well, the biggest asset you have in your life is your income. And most people just don't realize that. Income is an asset. Yeah. Right. Income in retirement is what helps you sleep at night, what keeps you from being fearful. And it's what keeps you motivated.

06:17 Pete, you've seen studies before, right, that people who have guaranteed lifetime income live longer. Why do they live longer if they have guaranteed lifetime income? Less worry, man. And they're not worrying themselves. You heard that phrase, I'm worrying myself to death. Well, I mean, it's truer than you think. It is. Absolutely. Absolutely. Emotion matters so much in so many different things. And I want to make sure our listeners know that you can connect with Coach Pete's team here at Capital Financial. Just give us a call. You can get these questions answered that Mike and Coach Pete are talking about right now. Again, the number 800-661-7383. 800-661-7383. You can also text us if you'd like to take that method as well. Just text the keyword plan to the number 600-700. That's the keyword plan to the number 600-700. Mike, I agree. I think the most important asset class is lifetime guaranteed income.

07:05 Without that, you really don't have a retirement plan. And if we're truthful, and if we all were truthful, if the listeners would just sit back and just be honest with themselves right now, most of the advisors out there do not give you a guaranteed income plan. They give you an investment account and say we're going to take 4% of it. They say let's put this money in this sleeve and you'll just draw down on it. That's not a plan, folks. That's the investment guys still capitalizing by keeping more of your money so they can charge more fees. And at the end of the day, a written income plan is something totally different than a 401k, an IRA, or a brokerage account. A written income plan says what's going to show up in my account on the second Tuesday of every month.

07:51 What's going to show up on the 17th of every month in my checking account so I can pay my bills. A written income plan is something that helps you no matter what's happening in the stock market. We've got something we call a WSST. It's a Wall Street sales tool, WSST. And the biggest Wall Street sales tool we see that is used to put people in the wrong place for retirement, I feel, is something called the Monte Carlo simulation. Are you familiar with that, Mike? Oh, 100%. It's the thing that it's, you know, I mean, what most people don't know about me is we talk about me being the founder of One Oak Financial. And I've written books and, you know, we've done all this. But I'm also a professor at Old Dominion University just across the border in North Carolina, in Norfolk, Virginia. I teach personal financial planning and principles and ethics of financial planning there. I do one class a semester just so I can stay up with what's going on college campuses.

08:40 But Monte Carlo simulation is just, it's just, today it's just AI. AI saying what's the probability I'm going to run out of money? Yep. Yep. It is, it was made, but it looks in the past, guys. Monte Carlo simulation doesn't look into the future to see what's happening today. It doesn't, it doesn't, it doesn't, a Monte Carlo simulation will not pay the bills. It will not get you to your grandkids' first day of kindergarten. It will not get you on that vacation to Europe that you want to go on. And it doesn't provide the legacy that your family really wants. It's investor talk to keep more money so they can keep paying fees. Back in the day, there was, I think it was like Times Square usually got the rap for there.

09:26 Even Myrtle Beach down at Broadway area, there'd be a guy with a table set up and he'd have three solo cups and one ping pong ball. And you put bets on where the, you know, at the end, you'd watch, you'd start where the ball was at the start, and then you'd put bets at where it was at the end. It's the old hidden ball trick kind of thing. And so Monte Carlo simulations is similar to that, in my opinion, because it's all depending on what age you say. Because you're saying based on if I kept all my money at risk and I got income from it and they put at, and I live to age 80, what's my percentage chance of it being okay? And usually that's like 94, 92 to 94%. But then, Mike, if they put 85 or 90, the numbers get worse. And, you know, I want my clients to live to be 100. And if you put 100 in a Monte Carlo simulation, you're going to fail a bunch.

10:12 But even just failing one out of 12 times, that's what 92% is. Are you willing to be that one out of 12 that fail by keeping all your money at risk? And if the answer is no, there are solutions. Matter of fact, we have a, I've got a brand new research paper I wrote this week called The Power of Income Riders. How do you get guaranteed lifetime income for isolating some of the money you have? Not all, but just get enough income or two or three streams of income. If you'd like to get a copy of this, let's say, e-book, and it's about 40 pages. Call right now. We'll send it to you. All right. Very easy to do. Just call 800-661-7383. 800-661-7383. Or text keyword plan to 600-700. Plan to 600-700. But, Mike, I guarantee you when people have that, when the broker gives them that Monte Carlo simulation

11:01 or the guy claiming to be a fiduciary that keeps all their money at risk, I bet they don't tell them what age they run it to. Or they brush past that. Because if they told me here, if you live past 85, we really can't guarantee these numbers. Well, heck, I want to live past 85. This isn't Logan's run where they eliminate you at 30. Yeah. Right. Hey, Pete. Hey, Pete. You fly a lot. Yeah. I mean, you move around a lot. If you were to. On a plane. The next time you get on an airplane. Yeah. If the pilot gets on the air, says, you know, thank you for, you know, hopping on today. You know, we've had a little technical difficulty with the plane coming in today. They didn't have a lot of gas. We have a, we have an 86% chance to get to our destination safely. Would you stay on that plane? That's more than one of 10 chance we're not going to get there.

11:46 So, no, I'd be the first one off. If they said, I said, pilot says, well, you know, hey, we just found a little more gas just sitting out there. Now we have a 92% chance of flying. Would you still stay on that plane? I'd be gone, man. I just want to make sure. Right. No, and we have to take that same correlation with retirement. So, folks, if you want to make sure to get your own retirement plan, then you don't worry about the market. And it's going to be there. Certainty, not probability. That's what we're offering here. Call right now. The next 10 of you will put together a true Coach Pete's power plan. Total retirement plan for you. No cost or obligation. We're here for you. 800-661-7383. 800-661-7383. Or text keyword plan to 600-700. That is keyword plan to the number 600-700.