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Articles by Guy Baker
Helping Clients Navigate Tariff Whiplash
After over 50 years in this business, I’ve watched the market forget almost everything it has learned the hard way. But it’s not likely to forget tariffs. Tariffs are no longer a policy. They are a structural change in how exporters and importers think about trade. The arguments for tariffs include the benefits of reshoring, reengineering of industrial policy, and reciprocity between trading partners. Each describes the same shift.
Helping Clients Understand the U.S. Debt Problem
America's relationship with government debt is what the psychologists call co-dependency. We can’t live with it; we can’t live without it. We know it cannot last forever, but we love the benefits of government debt so much that we can’t leave it behind. After six decades helping families and business owners manage their liabilities and money, I can tell you the first rule of debt: It is future consumption delivered in today’s dollars.
Preparing Social Security Plans Before Congress Acts
Every few months, yet another Social Security rescue plan surfaces. And every few months it dies. The latest comes from the Committee for a Responsible Federal Budget, which has revived a cost-of-living-adjustment cap that co-chair Tim Penny first introduced in Congress in 1987. It went nowhere then. Consensus is that it will go nowhere now. But as the projected Social Security shortfall approaches, some type of reform will likely pass sooner than many expect.
Three Retirement Planning Questions That Stand the Test of Time
schedule6 Min Read Remember those ING commercials from the early 2000s in which people walked around with a giant hologram of their projected retirement number floating over their head? The ads were memorable because they distilled retirement planning to one figure: the amount of capital someone needs to maintain their lifestyle in the post-working years.
Is the Dollar Still King? Rethinking Safe Havens
For most of the postwar era, the answer to the question "where do I park my money when the world gets scary?" was simple—the U.S. dollar. More specifically, you could tell a nervous client to put their money into short-term (one-year Treasurys), which were always liquid, deep, and backed by the world's most credible central bank. But lately, that solution has been questioned.
Where AI Fits into the Smart Advisor Ecosystem
After 60 years in this wonderful business, I marvel at the incredible opportunities that keep emerging. The chance to learn new things every day seems endless. And if I’ve learned one important lesson after all these years, it’s that you must keep adapting to stay relevant and serve your clients well.
Maxwell Baker Wealth Group
WealthManagement.com is part of the Informa Connect Division of Informa PLC This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
Why Clients Should Care About Capex
Big tech’s Capex as a share of revenue has risen to its highest level in over a decade. Until recently, capital expenditures were something rarely discussed outside of CFO summits, accounting conferences and maybe a budget meeting at a heavy manufacturing company. But lately, capex has been on everyone’s mind. Thanks to the surge of AI and the need for massive data centers to support it, Big tech’s capex as a share of revenue has risen to its highest level in over a decade.
Why 60/40 Portfolios Still Work Despite 2022 Setback
The 60/40 portfolio has long been a staple for retirees, near-retirees and others with a moderate risk tolerance seeking a blend of growth and capital preservation. But 60/40 proponents were tested after 2022 when the Fed’s rapid anti-inflation rate hikes caused a simultaneous bear market in both U.S. equities (-19.4%) and bonds (-13.1%). Meanwhile, long-term U.S. Treasurys fell by over 29% and corporate bonds lost 15.7%. Some cautious investors are still recovering.
Why Advisors Must Address Long-Term Care Planning
Advancements in medical treatments have extended life expectancy and enabled life-sustaining therapies. That’s the good news. But these advances have added to the rising long-term care risk in our country. Approximately 70% of adults age 65 and older will require some form of LTC, according to the U.S. Department of Health and Human Services. And one in four Americans (24%) will need LTC services for more than two years, according to Morningstar.
Rethink Retirement with Reverse Mortgages
How do your retired clients unlock the capital in their homes without selling? Dr. Guy Baker, Founder, Wealth Teams Alliance I’m sure you’ve had plenty of clients tell you they want to pay off their mortgage. After all, being debt-free is a worthy goal, and it brings peace of mind, especially in times of economic chaos. But is it the smartest thing to do? Not necessarily. In today’s high-inflation world, real estate values have soared.
Even If Rates Go Down, We’re Not Out of the Woods Yet
Three factors that may influence the direction of the economy, markets and your clients’ sense of wellbeing. Dr. Guy Baker, Founder, Wealth Teams Alliance Fed Chair Jerome Powell has hinted strongly recently about a potential rate cut in September. No surprise there. Conventional wisdom says lower interest rates are good for the economy because they stimulate economic growth, boost consumer spending, encourage investment and allocate more capital to reducing debt.
Market Chaos Is a Time for Attitude Adjustment
Despite equity markets hovering near all-time highs, many Wall Street firms are warning clients to prepare for a stock market shock—or at least a major pullback as we ride through the “Dog Days” of summer. For starters, the S&P 500 had a cyclically adjusted PE (CAPE) ratio of 37.8 at the end of July, well above the historical average of 21.2. A CAPE reading above 37 has only occurred about 5% of the time since 1957.
Is a Roth Conversion Worth It for All Clients?
For seniors heading toward retirement, one of the most important conversations they can have with their advisor is about whether it makes sense to convert their traditional IRA into a Roth IRA. The strategy can result in tremendous tax savings, but it depends on the client’s financial goals, tax situation and legacy plans. On the surface it seems like a no-brainer. All the income generated in a Roth IRA is tax-free.
Debunking 7 Bond Myths
Conventional wisdom says that when stocks fall bonds (particularly Treasurys) will pick up the slack. During April’s tariff announcements, however, stocks tumbled as expected, but bond yields rose, meaning their prices fell and didn’t come to the rescue. For many investors (and some advisors) it felt like 2022 déjà vu when both stocks and bonds tanked by double digits amid high inflation and a series of Fed interest-rate hikes.
Lessons from History
Many of your clients have been rattled by the recent market volatility. Headline writers like to use terms like “unprecedented” and “uncharted,” but this isn’t the first time that tariffs have shaken the financial landscape and people’s sense of well-being. It probably won’t be the last. As with so many other crises, the markets will adjust, and we’ll get through the turbulence. But clients should know the recent pause in trade tensions—and market rebound—is temporary.
Understanding Price vs. Value in Today's Investment Landscape
If they are in the market, they should stay in the market. If they are in cash, then they should stay in cash equivalents. A woman was recently referred to me from a longtime center of influence. She only had a little money to invest, but wanted a high-level understanding of the market and how it works. As a favor to my COI, I did my best to explain the basics. In the process, it got me thinking about some concepts we all need to keep in mind during unsettling times like these.
Inflation-Fighting TIPS for Today’s Uncertain Times
I’m sure many of your clients have been concerned about inflation and slowing economic growth since the implementation of U.S. tariffs against major international trading partners. Even with inflation running not much higher than its long-term historical average of roughly 3% annually, it can have an erosive effect on real wealth. For instance, if you invested $1 into the S&P 500 Index back in 1926, it would be worth nearly $14,577 today.
Dr. Guy Baker | WealthManagement.com
Dr. Guy Baker, CFP, Ph.D is the founder of Wealth Teams Alliance (Irvine, CA). He is a member of the Forbes 250 Top Financial Security Professionals List and author of Maximize the RedZone, a guide for business owners as well as The Great Wealth Erosion, Manage Markets, Not Stocks and Investment Alchemy. He received the 2019 John Newton Russell Memorial Award for lifetime achievement in the insurance.
Weathering The Coming Economic Storm
Nobel Prize-winning economist Paul Samuelson once quipped: “The stock market has predicted nine out of the last five recessions.” I bring this up because many believe the Fed has achieved the coveted soft landing for the economy and that we’ve dodged the recession so many have been bracing for since the Treasury yield curve inverted over two years ago. According to The New York Fed's latest recession model, there is just a 29% probability that the U.S. will enter a recession by the end of 2025.
How to Introduce Crypto to Clients
With Bitcoin approaching $100,000 as we go to press, many of your clients may ask if they should add cryptocurrency to their portfolios. Some may be irked that they’ve been sitting on the sidelines for so long while cryptocurrencies such as Bitcoin have gained over 100% this year (over 30% since the presidential election) and about 1,100% over the past five years. Some may be curious about these digital tokens and where they fit into their overall financial plan (if at all).
How to Introduce Crypto to Clients
With Bitcoin approaching $100,000 as we go to press, many of your clients may ask if they should add cryptocurrency to their portfolios. Some may be irked that they’ve been sitting on the sidelines for so long while cryptocurrencies such as Bitcoin have gained over 100% this year (over 30% since the presidential election) and about 1,100% over the past five years. Some may be curious about these digital tokens and where they fit into their overall financial plan (if at all).
Three Important Overlooked Life Insurance Concepts
I’ve found over my career that many financial advisors are uncomfortable talking about life insurance. In some cases, they have an irrational fear of the product. In fact, a Saybrus Partners study found that more than half of financial advisors (56%) don’t talk about life insurance even if their clients bring it up. And nearly half don’t review existing life insurance policies with clients annually. That study was done over a decade ago, and I don’t think things have changed much since then.
Private Credit Explained
Small and medium-sized companies have long relied on banks to fund their growth. But in recent years, regulatory capital pressures have forced companies of this size to look outside the conventional banking system for alternative sources of credit. While private equity gets most of the headlines these days, private credit has become a $1.5 trillion market and is expected to grow to $3.5 trillion by 2028, according to BlackRock. That’s great news for privately held companies.
Six Considerations for Ensuring the Right Business Exit
My last article about business transitions examined the most important issues for owners to consider pre-sale when planning to exit their businesses. Here, we examine six key considerations. That can make or break a successful transition. Sell or Transfer the Business? In many ways, an owner’s business is like a family member.
Five Ways to Help Business Owners Presale
I played a lot of baseball growing up. One of the best pieces of advice my coaches gave me was this: “Guy, don’t step into the batter’s box without a plan.” My coaches wanted me to exude confidence whenever I stepped into the box to show the pitcher I wasn’t intimidated. More importantly, they wanted me to know what I planned to do before every pitch based on who was on the mound, how many runners were on base, how fast those runners were and where the defense was positioned in the field.
Inflation’s Impact on Retirement, Taxes and Estate Planning
A recent Allianz Life survey found that more Americans see inflation as the greatest threat to their retirement than any other money worry, but advisors, on average, are three times less likely to worry about inflation than their clients are. If inflation is unchecked, it can be one of the biggest destroyers of clients’ financial wealth and dreams. Here are six impactful ways to help clients gain more peace of mind in inflationary times. 1. Help clients calculate their “personal inflation” rate.
Don’t Forget About Sequence Risk
With the stock market at all-time highs and volatility normal, it’s easy for retirees, near-retirees and even advisors to get complacent about sequence risk, one of the biggest dangers to a retirement nest egg and saver’s peace of mind. No one knows exactly when the next big market correction will occur, but when it does, like we saw in 2000-2003 and 2008-2010, sequence risk (aka sequence of returns risk) can wreak havoc on retirement projections and planning.
Demystifying Life Insurance So Clients Can Make the Best Decision
From my earliest days in the insurance business, I’ve heard this refrain from skeptics: “Buy term and invest the difference.” That is, pay the lowest premium possible, and use the savings to pad your investment portfolio. Perhaps you’ve suggested this strategy to clients. Just know there are several problems with this advice. First, all life insurance is term insurance. That’s because all insurance is based on similar mortality costs.
Four Factors of Money Management
The world seems to be changing at lightning speed, but sometimes I’m surprised by how little things change. Let’s go back a dozen years to 2012. In the National Football League, the 2012 Baltimore Ravens and San Francisco 49ers led their respective conferences and headed into the playoffs as odds-on favorites to meet in the Super Bowl. Democrats controlled the White House, but the incumbent wasn’t too popular. The Fed was active on the rate front.
Using Client Objections to Your Advantage
This is the time of year when many of you are finalizing all the last-minute planning left over from 2023 (or still recovering from it). If you’re like most advisors, not every client agreed to all of your recommendations, and some got cold feet at the last minute. I know it’s frustrating. But now isn’t the time to lose your composure and do or say something you’ll regret. Clients and prospects don’t waste your time intentionally.
Help Clients Recognize Problems and Take Action to Solve Them
Albert Einstein once said: "We cannot solve our problems with the same thinking we used when we created them." As I discussed last month, the better we are at defining the real problems faced by our clients and prospects, the more we can help them implement proper solutions. Think of the last major problem you had to deal with in your life—say your aging hot water heater conked out just as winter arrived. What were your initial thoughts and concerns?
"Sales" is Not A Dirty Word
As I mentioned last month, whether you’re discussing investments, trusts, exit planning strategies or wealth protection (including insurance) with clients, your job is to be a listener first and a facilitator second. What most advisors don’t realize is that clients have a “buying” process just like we have a “selling” process. If we take the time to understand a client’s buying process, then we can match our selling process to their rhythm.
"Sales" is Not A Dirty Word
As I mentioned last month, whether you’re discussing investments, trusts, exit planning strategies or wealth protection (including insurance) with clients, your job is to be a listener first and a facilitator second. What most advisors don’t realize is that clients have a “buying” process just like we have a “selling” process. If we take the time to understand a client’s buying process, then we can match our selling process to their rhythm.
Three Circles of Wealth Original
Most people know me as a life insurance consultant and business advisor. But I’ve been in sales since the age of 7. Regardless of what you think about salespeople, the lessons I’ve learned about selling and problem solving have served me well throughout my career, not only as a financial advisor, but also as a volunteer and officer of not-for-profit organizations.
Capital Split Dollar Programs Explained
It’s never been more difficult for closely held businesses to recruit and retain top talent. While most think of stock options, synthetic stock plans, bonuses, company cars, health plans or qualified plans such as supercharged Internal Revenue Code Section 401(k) plans, a split-dollar program can achieve far more benefits for a lower cost. While a 401(k) plan or even a cash balance plan can provide meaningful benefits, those plans must be made available to all eligible employees.
Three Strategies to Help Clients Retain More Wealth From Their Businesses
When discussing business succession strategies with your clients, remind them that there’s no such thing as new money. Every owner will get bought out of their business with their own money whether they do an asset sale, an insider sale or sell to an outside buyer. There are various methods for determining the price–appraisal, capitalization of net income, multiple of sales, book value or comparison to similar companies that have recently sold.
Optimizing Your Client’s Business Exit
In football, great quarterbacks excel when they’ve reached the 'Red Zone'—the last 20 yards before the end zone. Business owners have a 'Red Zone' as well—the final years before exiting. Unfortunately, most business owners aren’t experienced in the 'Red Zone.' With no preparation or game plan, they often fumble away tax savings and their ultimate walkaway money. That’s where you come in.
Athens Self Storage
Date: 2022-09-20 Category: Business OS: iOS Price: Free Compatible: iPhone iPad Requirements: Requires iOS 15.0 or Description - Athens Self Storage . The Athens Self Storage is now available as a free download on Apple Store for both iPhone and iPad owners.The application is designed for use in English language. It weighs in at only 5.1 MB to download. It is highly advisable to have the latest app version installed so that you don`t miss out on the fresh new features and improvements.
BMW M3 E30 (1986-1992): PH Pocket Buying Guide
The original and the best - time to get one before it's too late By Guy R Baker / Sunday, November 01, 2015 Designed originally as a Mercedes rival for Group A Touring car racing, BMW's left-hand drive E30 M3 is now one of the most sought-after modern classics. Put into road production for homologation purposes, the M3 was powered by a 2.3-litre, lightweight four-cylinder engine which was essentially a cut-down version of the BMW M1's straight six capable of revving to over 9000rpm.
Opportunity in business exit planning
As I look at what is emerging in the years ahead, I feel business exit planning remains the most fertile ground for our firm. I have three marketing strategies I am implementing to take advantage of this growing market. First, we are going back to all the companies I have met through the years (clients or not) and reintroducing the concept of exit planning. Second, we are aggressively using Internet marketing tools to introduce several booklets and white papers we have written for this market.
Sales strategy: Bring real value to your clients
Advisors have been given a unique opportunity to bring real value to their clients after having been maligned for many years. Seen for two decades as financial charlatans and unnecessary in many instances, financial advisors are now being viewed with a much higher level of esteem and respect. Why? Simply put–because we hold the keys to security and safety offered by no other profession.
Big Estates Need The Liquidity That Life Insurance Can Provide
High-net-worth prospects consistently have to address two critical issues regardless of how much wealth they have amassed: (1) They must determine equity among heirs; and (2) how much is enough for each child. They may feel equity among heirs is not an issue and ignore it completely. In the world of “uber wealth,” high-net-worth prospects may struggle with how much wealth they want their children to own directly or control indirectly. This struggle can cause procrastination and indecision.
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