Imagine how different you’d be financially during the economic hardship if you had a Safe Tank. What’s a Safe Tank? Basically, it’s a place you can put your money that is protected, has guaranteed growth, even when you need to use funds for it, and you can use those funds anytime, guaranteed, for any purpose, without incurring taxes or penalties.
In this episode of a WTR Discussion, we talk about the current economic turmoil (characteristics of which are similar to other times of economic hardships). We also talk about what a Safe Tank is and why and how to use it. Also, we take you through 5 different, economic scenario stories, any of which could be you during these, or any, uncertain times.
Have Questions about what a Safe Tank is? How to use it? How to set one up for yourself?
Contact us anytime for your questions. Currently you can reach me, the host, Kevin Dumont at the following email:
- [00:25] Kevin: Today, we have our co-host Brian Dumont. Today, we're going to be talking about how to survive financial turmoil with a safe tank.
- [01:22] We're going to touch on the market volatility and how it affects your accounts, define what a safe tank is and why you'd want one, and you'll learn about how 5 different common financial tools and situations affect you during financial hardships and how you can begin to start building your safe tank today, which will put you in better financial control the next time there's turmoil
- [01:46] Let's start with talking a little about the market volatility and what's going on with our listeners today
- [02:20] Brian: There have been tremendous swings on a daily basis and we just don't know what's coming next and uncertainty is the worst thing for the market[03:13] If you're getting close to retirement or are already in it, you know that you can't rely on what your projections were just a few weeks ago. Things have changed dramatically
- [04:10] Kevin: Wealth Tactic Rebels, we're trying to help you out today with our talk about the volatility in the world and how you can financially survive it. Reach out to us on whatever the platform is that you listen to this on, give us a rate and review and let us know what you found inspirational. What resonated with you about today's discussion?
- [04:32] So we have what we call a personal economic model that we use as the model for how money flows. In there, we have what we call a two tank system, and the part of that that's today's discussion is the safe tank. Brian, can we expand talking about those tanks?
- [04:50] Brian: So the easy one to talk about first of all is the investment tank. Most people have investments[04:57] We put money somewhere with the expectation that it will grow overtime (that's why we're willing to take risk and put the money in there because we want some kind of reward)
- [05:13] There are two types of primary risk: market risk (the ability for your balance to decrease due to the market) and tax risk (government is in control of this)
- [06:02] By contrast, and this is where the safe tank comes in, is that we have done our best to position your money in a place where we have eliminated market risk to as little as possible if not any, so that we know that your account can only grow linearly (has to grow better than the inflation rate)
- [07:40] The main point of having a safe tank is it can only grow, and it must be liquid
- [07:50] Kevin: Great, so now we have defined what an investment tank is and what a safe tank is. Now comes the fun part. We're going to have a "Zoom dinner meeting with 5 friends". The subject of how they're dealing with this financial storm comes up in our talk with our 5 friends[08:18] Jim: I am one of those guys who likes to put his money in the market, I'm a stocks and bond kind of guy. I follow it every day and it's been painful to see how much I've lost in the last few weeks. I'm mostly sitting in cash waiting for things to change because I just don't feel safe right now to get into more equities
- [09:57] Mary: I didn't really like the market, and I think that property is a more secure place to be. A few years ago, I paid off my home and I bought an investment property and now I have 10 properties. All of my cash is in my properties, but now, half of my rentals aren't able to pay their rent. So my income is dried up since this is my only source of income. Because my income is down, the bank won't give me loans
- [11:45] Charlie: I retired a couple of years ago and I'm a conservative guy. I've been working part time doing some things that I like to do so I don't hold too much out of those annuities. I got laid off recently, and it's only part of my income. I called my broker asking if I can get a little more out of my annuities and he said no that I'm at the maximum right now
- [13:15] Jane: I didn't want to lose any money so I've been putting all my money into a money market account, and some in savings. They don't really pay me much in interest. With everything going on right now, I lost my job and so I had to go into what I had for savings and it's running out pretty quickly
- [15:00] Sam: I have an advisor that uses the two tank system and so I have money in both my investment tank and my safe tank, and I have enough in my safe tank that I can weather any storm (I could live off of the safe tank). The investment tank is just extra, so I know that's down, but I have not been losing sleep over it because I know my safe tank is well funded
- [19:15] Kevin: There are a lot of different financial tools out there that people use to help set them up in their own tactics but safe tank we find is a great way to build a foundation for your finances
- [19:30] Let's sum up what we've been talking about here
- [19:35] Brian: The great thing about a safe tank is that when there's an emergency, if you've been diligent, you can rely on it when things get rough[19:45] When it is an emergency like now and you have cash available, you can still move in that direction and start your safe tank now (don't have to wait until the financial crisis is over)