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The Magic of Green Money

Dream Story – Carol Ebert

Carol started her career as a Navy Nurse to help people. When she transitioned to the private sector, she quickly relaized that she was not a bedside nurse, she didn’t want to just treat the problem, but instead focus on wellness and prevenatve healthcare, to keep people out of the hospital.

She spent many years teaching students and also as a wellness coach. She started a blog which turned into a book, “Too Busy For You.”

Carol never wants to retire, she loves what she does, however she decided a few years ago she didn’t want a boss, she wanted to work on her own terms.

So, she started what she refers to as her 3rd act as an independent wellness coach, which also meant learning how to run a business through the help of other wellness coaches. Now, she not only does wellness coaching, but is passionate about helping others who want to start their own wellness coaching business. She believes there is power in community and wants to help other independent coaches find community.

Carol has found a balance working on her terms from home yet connecting to community. Her passion gives her purpose which she believes is important for everyone.

If you want to chat about your own wellness, or if you are interested in helping others with wellness thru coaching, Carol would love to chat. You can learn more and connect with Carol at your3rdact.com.

Market Update

There are several factors affecting the current market environment. Inflation headlines are causing volatility, while January proved to be a stronger month than expected for the economy. Corporate earnings have been solid, although there have been declines in growth rate, particularly in certain sectors. The S&P Shiller P/E is above 30, which historically has not been well-tolerated by Wall Street. To navigate this environment, it’s important to focus on investing in quality to hold up best through continued rate pressures and any potential recession. Additionally, being tactically underweight equity targets with cash can provide opportunities to buy on market dips.

Gold and Silver

Wall Street Silver on Twitter posted a video from an FDIC meeting of bankers talking about the banking system and their lack of faith in it. FDIC as about 125B in assets to insure 9T in deposits.

Buy Gold and Silver to insure your wealth! (about 10% of your overall portfolio) Watch an interview with our Gold and Silver experts here or just schedule a call to talk more about this!

The Magic of Green Money

What is Green Money

Balancing these three goals – safety, liquidity, and growth – is crucial when it comes to investing money.

Yellow money is considered safe and liquid, but it provides minimal growth potential.

Red money is usually liquid and provides growth potential, but it carries more significant risks and lacks safety.

Green money provides safety (principal protection) and growth potential but can have limited liquidity, however, generating stable retirement income is a key benefit for many green money options.

The Most Common “Green” Money Vehicle – Index Annuities

Before any biases or reactions to the term annuity kick into gear, let’s talk about the different types of annuities.

There are several different types of annuities, each with their own unique features

  • Immediate annuities provide regular payments to the annuity holder beginning immediately after the annuity is purchased. Pensions use immediate annuities.
  • Fixed annuities provide a guaranteed rate of return for a set period of time, typically ranging from one to 5 years. They function like CDs but with a little longer time period and usually pay a little higher return. There are no fees in fixed annuities.
  • Variable annuities invest in a range of underlying assets, such as stocks or bonds, and the returns (and losses) are based on the performance of those assets. Variable annuities have management fees, M&E fees and often other rider fees.
  • Indexed annuities credit interest based on the performance of a specified stock market index, but with downside protection to limit potential losses. There are no management fees in index annuities, however if riders such as for additional income benefits of death benefits are added, there can be fees associated with those. We typically stay away from added riders unless needed in certain situations.
Wall Street doesn’t like Index Annuities as they cannot charge fees for managing them and billions of dollars every year flows out of Wall Street and into Index Annuities as retirees want the security they offer. (read more about this here)
The Mechanics of Fixed Index Annuities (FIA)
Curtis Eccles joined us from the home office of F&G to share some of the inside secrets of how Index Annuities work.

First, any money invested in an FIA is put into the general account of the company which then utilizes and investment team either internally or through a partnership to purchase bonds from secure companies or institutions ensuring a fixed rate of return.

From those returns, the company takes out their costs and then uses the fixed returns to invest into indexes through options in order to provide the policy holders with index-linked returns.

Cap Rates

Cap rates are a common feature used to calculate returns in an index. A cap rate sets a maximum limit on the amount of interest that can be credited to the annuity, during the annuity term (which is normally one year).

For example, if the cap rate on an annuity is set at 9% and the index it’s based on performs at 12% during the annuity term, the annuity will only be credited with a 9% return. However, if the index performs at 7%, the annuity will be credited with a 7% return and if the index returns -10%, 0% will be the return.

Participation Rates

Participation rates are another feature used by to determine the amount of interest that can be credited to the annuity based on the performance of the underlying stock market index. A participation rate is a percentage that determines how much of the index’s gains will be credited to the annuity.

For example, if the participation rate on an annuity is set at 80% and the index it’s based on performs at 10% during the annuity term, the annuity will be credited with an 8% return (80% of the 10% index performance).

Participation rates are commonly used in volatility-controlled indexes. These are more of a hybrid index designed to adjust its exposure to stocks based on market volatility.

The goal of volatility-controlled indexes is to provide investors with a more consistent and less volatile investment experience, particularly during periods of market turbulence. By adjusting exposure to stocks based on market volatility, these indexes seek to mitigate the impact of market downturns while still capturing the benefits of long-term stock market growth.


A spread is a percentage that is subtracted from the return credited to the annuity based on the performance of the underlying stock market index. It is not a fee as it is only charge on gains, if there are not index gains for the year, nothing is charged.

For example, if the underlying index returns 10% during the annuity term and the spread is set at 2%, the annuity holder would be credited with an 8% return (10% – 2%).

Factors that Affect Rates

The cap rates of FIAs are heavily influenced by interest rates, as insurance companies use long-term bonds to secure these accounts and utilize the interest they earn to create index strategies. As interest rates rise, cap rates tend to increase as well.

Currently, annual cap rates for FIAs are around 9-10%, and participation rates are even higher. This means that if the market goes up by 12%, investors can receive up to 10%, which is locked in and cannot be lost even if the market drops by 20% the following year.

Overall, Green Money such as FIAs can be an attractive option for retirees who want to protect against market losses while still receiving potential upside based on market performance.

Estate Planning Spotlight with Nels Donovan – 5 Components of Estate Planning

1. Wills and Trusts
A common misconception is that only wealthy people need wills or trusts. In fact, a will or a trust is a crucial part of any estate plan, whether you are wealthy or of modest means. A will or a trust will direct the distribution of your estate (all of your property and assets) after your death, according to your wishes. A will can also name a guardian for any child you have who is not at least age 18 at the time of your death.
2. Durable Power of Attorney
Each of us has a complicated web of financial and legal responsibilities to take care of from day to day. We pay bills, manage bank accounts, sign documents, and perform any number of other ordinary, yet important, tasks. Should we become unable to perform these tasks due to illness, injury, or death, chaos can ensue. Bills won’t get paid, deposits won’t go into our accounts, and responsibilities won’t be met. A durable power of attorney, however, allows you to name a trusted individual to handle your financial and legal affairs should you be unable to manage them yourself, whether temporarily or permanently.
3. Medical or Healthcare Power of Attorney
Like the durable power of attorney, a medical power of attorney, sometimes called a healthcare power of attorney, allows you to authorize a trusted individual to make decisions about your medical care if you are unable to make those decisions for yourself. Having a living will or advance healthcare directive does not preclude the need for a medical power of attorney, as situations may arise that are not addressed in the living will, and those will require decisions to be made by the person you have designated.
4. Living Wills and Health Care Powers of Attorney for Medical Decisions
Living wills and Health Care Powers of Attorney are legal documents that specify your preferences for medical care if you are unable to make decisions for yourself and are terminally ill, seriously injured, in a coma, with late-stage dementia, or near death. The living will or Health Care Powers of Attorney can ensure that you get the medical care you want and are not given treatments that you don’t want. It can also relieve your family members of decision-making in a time of crisis and minimize confusion or disagreement about what you would choose if you were able.
5. Beneficiary Designations
While you are creating your estate plan, you should also ensure that you have named beneficiaries and that your beneficiary designations are up to date. Beneficiaries will need to be named for benefits that are paid directly without going through the estate, such as benefits from life insurance policies and retirement plans.
We serve clients in Mineral Point WI, Dodgeville WI, Platteville WI, Lancaster WI, Fennimore WI, Boscobel WI, Richland Center WI, Muscoda WI, Spring Green WI, Mazomanie WI, Sauk City WI, Middleton WI, Madison WI, Fitchburg WI, Verona WI, Mount Horeb WI, Barneveld WI, New Glarus WI, Monroe WI, Belleville WI, Oregon WI, Stoughton WI, Darlington WI, Cuba City WI, Hazel Green WI, Belmont WI, Dubuque IA, Freeport IL

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