THE JOSEPH STRATEGY A 5-Step Financial Game Plan To Achieve the Retirement of Your Dreams in ANY Economic Climate

Andrew Winnett

THE JOSEPH STRATEGY A 5-Step Financial Game Plan To Achieve the Retirement of Your Dreams in ANY Economic Climate

Copyright © Andrew Winnett All rights reserved. No portion of this book may be reproduced mechanically, electronically, or by any other means, including photocopying, without written permission of the author. It is illegal to copy the book, post it to a website, or distribute it by any other means without permission from the author. Disclaimer This publication is designed to provide accurate and authoritative information regarding the subject matter contained within. It should be understood that the author and publisher are not engaged in rendering legal, accounting, or other financial service through this medium. The author and publisher shall not be liable for your misuse of this material and shall have neither liability nor responsibility to anyone with respect to any loss or damage caused or alleged to be caused, directly or indirectly, by the information contained in this book. The author and/or publisher do not guarantee that anyone following these strategies, suggestions, tips, ideas, or techniques will become successful. If legal advice or other expert assistance is required, the services of a competent professional should be sought.

Table of Contents Disclaimer............................................................................................................. 5 Acknowledgments............................................................................................ 7

Chapter 1

Intro......................................................................................................................... 9

Chapter 2

The Westernized Modern-Day Joseph Story..........................................13

Chapter 3

Where Are All the Josephs?..........................................................................27

Chapter 4

Strategy #1: Management............................................................................29

Chapter 5

Strategy #2: Financial Wisdom....................................................................39

Chapter 6

Strategy #3: Creating your ‘Silo’...................................................................61

Chapter 7

Strategy #4. Use the Silos’  Distributions to Build Your Wealth.........87

Chapter 8

Strategy #5: World-Changing Generosity................................................93

Chapter 9

The Day the Breadwinner Died: My Family’s Story..............................99 About the Author.......................................................................................... 105

5

Disclaimer While great efforts have been taken to provide accurate and current information regarding the covered material, neither “The Joseph Strategy,” Legacy Builders Wealth Management, or Andrew Winnett are responsible for any errors or omissions or for the results obtained from the use of this information. The name “The Joseph Strategy” is a marketing concept and does not guarantee or imply that you will become wealthy. The act of purchasing any book or financial product holds no such guarantees. The ideas, suggestions, general principles, and conclusions presented here are subject to local, state, and federal laws and regulations and revisions of the same and are intended for informational purposes only. All information in this report is provided “as is,” with no guarantee of completeness, accuracy, or timeliness regarding the results obtained from the use of this information. Also, without any warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose. Your use of this information is at your own risk. You assume full responsibility and risk of loss resulting from the use of this information. Andrew Winnett, Legacy Builders Wealth Management, and “The Joseph Strategy” will not be liable for any direct, special, indirect, incidental, consequential, or punitive damages or any other damages whatsoever, whether in action based upon a statute, contract, tort (including but not

limited to negligence), or otherwise relating to the use of this information. In no event will Andrew Winnett, Legacy Builders Wealth Management, “The Joseph Strategy,” or their related partnerships or corporations, or the partners, agents, or employees of Andrew Winnett, Legacy Builders Wealth Management, or “The Joseph Strategy” be liable to you or anyone else for any decision made or action taken in reliance on the information in this book or for any consequential, special, or similar damages, even if advised of the possibility of such damages. Neither Andrew Winnett, Legacy Builders Wealth Management, or “The Joseph Strategy” are engaged in rendering legal, accounting, or other professional services. If accounting, financial, legal, or tax advice is required, the services of a competent professional should be sought. Facts and information in this book are believed to be accurate at the time of publication and may become outdated by marketplace changes or conditions, new or revised laws, or other circumstances. All figures and examples in this report are based on rates and assumptions no later than December 2020. Rates and assumptions are not guaranteed and may be subject to change. As in all assumptions and examples, individual results may vary based upon a wide range of factors unique to each person’s situation. All data provided in this book are to be used for informational purposes only. Any slights against individuals, companies, or organizations are unintentional.

Acknowledgments I want to thank my amazing wife, Jess, for putting up with this crazy entrepreneur all these years. I know it’s been quite the ride. Thanks for being there through thick and thin. I love you. To my children, don’t ever follow the crowd. Don’t ever go into “bad” debt. Don’t ever stop investing. Always be generous. Life is about helping others. Remember that. I love you all. And, finally, to my Lord and Savior, Jesus Christ. Thank you for saving me. Thank you for forgiving me and giving me a new life. And thank you for this amazing book idea. It was all you!

9

Chapter 1 Intro

T

 he 3,500-year-old story you are about to read contains 5 secrets and strategies to financial success in any economic climate. Although I will only highlight aspects of the story for the sake of gleaning financial wisdom that can help enrich your life, I highly encourage you to do your own digging into the life of Joseph. The biblical account of Joseph’s story, which I encourage you to read through, can be found in Genesis 37-50. Most people get desensitized to Bible stories because they become too familiar with them. In many cases, we have heard these stories since childhood and usually glaze over the details of what really went on. Though many of us have heard the story of Joseph countless times, very few have dug into what really happened and taken an interest by doing a deep dive to learn about what kind of person he was. Even fewer have studied Egyptian history and world history at the time these events unfolded.

Egyptian history tells us that Joseph, with his divine knowledge, advocated and ultimately persuaded the Pharaoh to give the ill-prepared nations back their land after they had proven themselves faithful with what Joseph entrusted them with for three to four years after the famine was over. Joseph was not obligated to return the land. Instead, he could have made the other nations Egypt’s slaves and kept it that way. By the world’s standards, he had every right to do so. But that’s the thing about wisdom from above; you are not threatened by the world’s systems when you are tuned in to the true source of all provision, the unlimited source of all things. Joseph was tuned in. So tuned in was he that not only did he save Egypt but also its neighboring nations. (In fact, some even say he saved the entire known world at the time.) What would it be like to be so tuned in to the source, to the wisdom of heaven, that your financial decisions could literally SAVE THE WORLD? That is what this book is all about. Here, I’ll give you five strategies that I believe, if executed diligently, can bring about unprecedented financial breakthroughs — not just for yourself but for the people around you. That is what we all want, right? When you are concerned about running out of money, it is hard to think outwardly. It isn’t easy to think about impact when you are just trying to make sure your bills will be paid during retirement. I believe we all can learn a lot from the world’s greatest financial advisor in all of history. In spite of untold difficulty and despair, this one man was able to singlehandedly save the lives of millions and, ultimately, get a stubborn world back on track economically.

Intro

11

Just one man. Think of it: If God can save and prosper the world with Joseph through divine strategy, what can God do with you? How significant could your financial impact be? Will you be talked about 100 years from now for your financial wisdom and accomplishments? How about 500 or 1,000 years from now? I believe if you are faithful with these five keys, the world will talk about you in the ages to come.

12

THE JOSEPH STRATEGY

13

Chapter 2 The Westernized Modern-Day Joseph Story

I

magine the president of the United States, the leader of the  most powerful country in the present world, going to sleep like any other night. He is sleeping in his plush Brooklyn Bedding Brushed Microfiber Sheets in his big mahogany bed frame next to his beloved wife. He is thinking about that day’s decisions — thinking about how amazing the country is doing and growing prosperously under his leadership. Excited for tomorrow, he finally drifts off to sleep as he contemplates almost all the possibilities for making the country even better. Much to his chagrin, he awakes in a sweaty panic from the most vivid, terrifying dream he has ever had. The president has had bad dreams before, but not like this. This one is different and feels real, as some sign from God. The president KNOWS that this dream is significant. He knows it is prophetic, even if he is unfamiliar with the term “prophetic.” The president knows he has to do something about these dreams. He knows this is a sign from heaven. He knows in his spirit that this is some kind of warning to prepare for. However, the problem is that he has no one to interpret these dreams. In fact, he is scared to even mention these dreams out loud. Sleep evades him, and peace eludes him. Anxiety is just the beginning of how this president feels. He knows he is responsible for the nation, and thus, he has to do something about this

vision. But what? He does not know what this is for or what it means. Early the next morning, long before the sun rises, the president calls for an emergency meeting with his top advisors. He anxiously inquires of his advisors whether they know of any spiritual experts who have the ability to interpret dreams. However, to his shock, nobody has the answer to his concern. Even in the most powerful, resourceful, and connected nation in the world, there is no dream interpreter to be found. He commands his cabinet to check the network. “Scour every database!” the president yells. “This is priority one!” The president tells his secretary to put all his meetings on hold until he finds someone to help him with this deeply troubling dream. His advisors have never seen the president like this. He normally is so poised and resolute. Now, he appears to be having a panic attack right in the middle of the Oval Office. Hours go by. The president can’t work. He can’t eat. All he can think about is the terror and feelings he received from this dream. Finally, a low-ranking advisor, out of breath, rushes into the Oval Office. “Sir … Mr. President,” he says breathlessly. “I think I may have found someone to interpret your dream … but … uh … it’s not someone you would think.” “Who is it?!” The president exclaims. “It’s a criminal,” the advisor sheepishly retorts. “A convicted rapist who is spending life behind bars in Guantanamo Bay. He raped the Israeli ambassador’s wife, sir. His name is Joseph, and he is Iranian by descent.” “What! Criminal? Guantanamo Bay!” The president screams. The Westernized Modern-Day Joseph Story

15

The president looks over at his chief secretary and says half-jokingly, “Where did you get this guy? I think you may need to review your hiring standards.” The low-ranking advisor goes on, trying to rationalize bringing this criminal, Joseph, to the president as an option. “Sir,” he says, “I know it sounds crazy, and I didn’t believe it myself at first, but there were two other criminals who were in the same wing of Guantanamo Bay as this Joseph individual.” “Both of the criminals who were serving life right next to him had a dream two years ago on the same night, sir. And Joseph interpreted both of the dreams correctly.” “For one of the criminals, Joseph revealed that this man would be acquitted of all his charges within three days and restored back to his position in the White House, and, sir, that is John Davidson, our secretary of labor. Remember, sir, DNA evidence came back indicating he had been framed, and you restored his position. The other criminal’s dream was that he would be executed within three days — and he was, sir.” The advisor sheepishly says as he looks down at the ornate carpet of the Oval Office, “That criminal’s name was Stewart Bradshaw, and he was given the electric chair three days later, just as Joseph predicted.” “When both criminals were taken out of the wing in Guantanamo Bay, Joseph pleaded with John Davidson not to forget him, telling him that he was innocent. But unfortunately, sir, John forgot about him — until the mass directive you sent out looking for anyone who could interpret dreams.” “John came to me, and I am coming to you,” the advisor says. The president processes all that has been said, and in a whatdo-I-have-to-lose tone, says, “Well then, bring him here right away. Send Air Force One and bring him here immediately.” 16

THE JOSEPH STRATEGY

Now Joseph, who was innocent, had almost given up his every hope; his Iranian ethnicity didn’t help him with the Westerners. In fact, because he was Iranian, there was immediate prejudice toward him. Iranians were opposite in every way in comparison to the Americans. The prejudice toward him as a Middle Easterner made arguing his innocence almost a waste of time. As an Iranian, you were guilty if someone accused you of anything. The guard watching over Joseph opens up his prison door and yells, “The president wants to see you!” Joseph is shocked. “What! The president? What for?” Joseph asks worriedly. The guard mockingly retorts, “Beats me! Something about a dream he had.” Joseph breathes a sigh of relief. As Joseph exits Guantanamo Bay’s dark torrid dungeon and is escorted into a new black Cadillac Escalade with blacked-out windows, the sunlight hurts his eyes. The prison guard passes Joseph over to the Secret Service and says, “He is all yours now.” The smell of fresh air is intoxicating; Joseph’s heart is pounding fast. “Lord, what is going on? Why me?” he utters in surrender under his breath. All he feels is the peace of God as he is speeding through the streets toward the airport. Once the airport is within view, he can’t help but notice the giant airplane emblazoned with the words “United States of America” on the side. Air Force One is there for him! As he is roughly escorted up the stairs onto this magnificent aircraft, he is taken back by the excellence of the interior: the leather seats, the intricate decorations, the comfortable temperature. It had both The Westernized Modern-Day Joseph Story

17

functionality and versatility so the most powerful man in the world could spend extended amounts of time in this ornate and complex machine, commanding the strongest military, giving directions on important decisions, and leading the most powerful nation in the world — and all from the sky. Joseph is seated in a plush leather chair. Then he is given an Italian suit and commanded to put it on once they are airborne. Once airborne, Joseph enters the roomy lavatory to find a fully functioning bathroom. When he looks in the mirror for the first time in over two years, he notices how unkempt his face looks. He notices his dark, stately beard and mutters to himself, “Wow, my beard is something to be admired. Look how full and wise I look.” In Iranian culture, a full beard is a sign of wisdom and stature, but not in Western culture, especially not to the president. Everyone in the world knows the president respects a clean-shaven face. He then receives a download from heaven. Shave your beard, the Lord says to him. Joseph obediently exits the luxurious bathroom and asks the nearest Secret Service agent if he has a razor. “A razor?” the agent responds quizzically. “You ain’t trying to take over the plane, are you, Joseph?” The uniformed man says half-jokingly. “No, sir,” Joseph says. “I want to be respectful of my audience. To do that, I need to be clean-shaven.” The Secret Service agent responds after a few seconds of calculating all the risks of giving him a razor and finally says, “Uh, let me see. One second.” 18

THE JOSEPH STRATEGY

He looks around, finds one, and passes it to Joseph. Before long, Joseph is clean-shaven, with a simple haircut that he gave himself, showered, and clothed in a suit. Joseph barely recognizes himself. Before long, Air Force One is touching down at Andrew’s air force base. Joseph is quickly escorted into an all-black Chevy Tahoe. Shortly after, he is walking into the Oval Office with his heart pounding. As he enters, he sees the president’s silhouette; he has his back toward Joseph and is reviewing a file. Once inside, the door shuts behind him, and two Secret Service agents stand next to Joseph, one on each side — just in case. The president stands up and looks directly at Joseph for at least five seconds before saying, “Well, well, well. Not what I expected, Joseph,” and looking him over thoroughly. “Your file says you did some pretty terrible things,” he says said in an accusatory manner. “I’ve been told you can interpret dreams, Joseph? Can you?” “It is not me, Mr. President, to interpret your dreams, but God will give you an answer of peace,” Joseph replies. The president leans on his desk as he begins to recount his horror, “I had a dream that there were seven eagles: strong, majestic, and healthy. They were flying high above everyone in pride. Then I saw seven other eagles, but these were sick, demented, and weak. The seven sick eagles flew up behind the healthy eagles, ate them, and then landed all over the land. I was deeply troubled by this dream, but then I fell back asleep and had another dream. I saw seven bison on the plains; they were strong, majestic, and healthy. They were running with great endurance. Then I saw seven feeble, weak, and sick bison. The sick, feeble bison came up

The Westernized Modern-Day Joseph Story

19

behind the healthy, majestic bison, ate them, and then lay down all across the land.” By the end of recalling these dreams, sweat began to appear on the president’s forehead. He looked at Joseph and asked vulnerably, “Do you know what these dreams mean?” Joseph humbly, yet confidently, replies, “Mr. President, your two dreams are one and the same. The seven healthy eagles and the seven healthy bison represent seven years of incredible abundance that will come to all the land. Not just to America but the entire world. However, the seven sick and demented eagles, as well as the seven demented and feeble bison that come and swallow up the healthy eagles and bison, represent seven years of famine and depression, unlike the world has ever seen.” As Joseph explains all this, the president’s face shows enlightenment, worry, and terror. After a brief moment of silence, Joseph continues, “Sir, I would strongly recommend the following. God showed you these dreams to give you a warning; this is something you can take note of and can capitalize on. When the seven years of abundance are happening, you need to require a flat 20 percent tax on all goods and services produced throughout the entire land. As you receive these resources, you need to store them up in silos all across the land. When the seven years of abundance are over, you should have more than enough resources to distribute to the Americans and, potentially, other nations. Most of the world will be in a great state of desperation when the famine hits. You will then be able to buy gold, silver, food, and any valuable tangible resource at very good prices and still help keep people alive. You need to store up the resources in silos at the U.S. Treasury and heavily guarded food banks and food silos all across the country. You need to be prepared for the seven years of famine. When the correction happens, and the money fails, you will be able to 20

THE JOSEPH STRATEGY

save your people and make America more prosperous than ever before.” As Joseph finished, he could see the surprised look on the president’s face. The president sat on his desk, thinking about what was just said for a few moments and then finally broke the silence. He fixed his gaze on Joseph and said, “I am undone! I am so glad we found you, Joseph! I knew my dreams meant something! We have to act fast and prepare! What you said is true! I know it!” “While you were on the way over, I called the Israeli ambassador and asked him about you.” The president told Joseph about the ambassador’s wife accusing another man of rape just this last week. After the authorities questioned her thoroughly, she just confessed she had lied — not just about the recent alleged attacker but also that she lied about you, Joseph. It seems you were indeed innocent,” the president says with a look of compassion in his eyes. “We are working the details out now, but it looks like you will be set free soon. “I want you to work with me, Joseph. I need you to. I have never heard such wisdom in all my days. It is clear God has gifted you to see the future. I want you to lead the charge in preparing for the seven years of famine. In fact, I am putting you in command of all the land. I am declaring martial law, therefore giving me complete control in this time of preparation. And I am giving that complete control over to you, Joseph. You will have all the resources you need to accomplish whatever is necessary. The only person that will have more authority than you during this time is me.” Joseph’s knees almost buckle. The Secret Service agents to his right and left can tell he is about to go down and grab him under the arms to assist.

The Westernized Modern-Day Joseph Story

21

Joseph is undone. “I … I don’t know what to say,” He stutters sheepishly. “I am honored, sir, and I gratefully accept. I will get started right away.” The president presses a button on his phone on his desk and yells, “Susanne? Please get Joseph his own office next to me right away! Give him anything he asks for!” The secretary on the other end responds, “Yes, sir, Mr. President.” As Joseph is leaving the Oval Office, he thanks God in amazement under his breath. *** Throughout the upcoming years, it is exactly as prophesied. The world sees the greatest seven years of abundance in world history; EVERYONE prospers! EVERYONE has more than enough, and although the wealth is on a level never seen before in history, so is the waste. People all across America and the world believe this gravy train will never end. Most people squander their excess money or go further into debt, chasing materialism and pleasure. However, Joseph is not one of them. As previously determined, Joseph saved and saved and saved. Wisely, he began storing millions and millions of pounds of corn, soybeans, wheat, sugar, seeds, and canned goods in giant silos all across the United States. He stored all the packaged food in 1,000,000-square-foot warehouse silos he built after the dream and the promotion. There were multiple silos in every state across the nation (even multiple silos for large cities like Los Angeles, Houston, Atlanta, Chicago, and New York). By the sixth year, Joseph had bought or secured so many necessary survival resources that it literally could not be tabulated. The accounting system the government was using was the same one put in place during Ronald Reagan’s presidency — when the 22

THE JOSEPH STRATEGY

United States had been overloaded due to the number of raw goods being stored and housed all across the nation. Yet Joseph did not let up in the preparation process. He relentlessly used all resources to acquire as many raw goods as was possible. Many nations called Joseph, the president, and the United States paranoid. Many leaders from foreign nations scoffed and said, “Why aren’t you expanding into more real estate? Why aren’t you investing in these new up-and-coming tech companies or alternative energy sources? You spend every excess dollar on acquiring tangible goods or commodities! Why go backward when the world is going forward?” Joseph would encourage everyone, including other nations, to prepare for the upcoming famine, but unfortunately, his warnings fell on deaf ears. He even broadcast warnings on national television in the United States encouraging people to buy as much food, grain, seeds, fertilizer, filtration systems, and farming equipment as possible, but virtually no one listened. Everyone had been lulled to sleep by a numbing sense of normalcy during the abundant years. But Joseph stayed to the course, faithfully. As prophesied, after year seven, the world experienced the beginnings of the worst famine in history. The markets crashed right away; most people waited month after month for the markets to rebound, but much to their surprise, it never did. Nations that tried stimulating the economy artificially by printing more money ended up driving up the cost of everything, and hyperinflation ensued. Within the first and second year, all across the globe, every nation was out of food. People were dying of starvation, and the numbers were in the millions.

The Westernized Modern-Day Joseph Story

23

Now, thankfully, because of Joseph’s prudence, America had more than enough — not just for themselves but for the whole world. Nations began coming to America in search of food, and Joseph cordially sold all nations food to survive. One after one, hat in hand, the nations apologized for their foolishness in not heeding his wise council. Nonetheless, Joseph sold each country the required food and resources to keep their people from dying. By the third year of this ferocious famine, all countries had come to Joseph and given him all the money they had to buy necessary provisions. Proudly, Joseph had taken all the money in the world (literally) and laid it at the president’s feet. Saying that the president was proud of his decision to promote Joseph to second in command didn’t even scratch the surface of what the president felt daily during this famine. One by one, each nation brought all livestock and raw materials to buy food for survival (all the money had been spent buying food the previous year). The following year, all tangible goods were used to buy food, and year after year, Joseph graciously sold what was needed to keep the world alive, in spite of other nations’ arrogance and unwillingness to prepare for what was ahead. By the fourth year, the nations of the earth didn’t have much left except their land. One by one, each nation even sold its land to keep from dying off. Joseph graciously obliged and provided each with what they needed in exchange for their land. Joseph never “rubbed it in.” He knew how seductive abundance could be for the nations. He knew his advancement was for this very reason: to save many from death. Day by day, month by month, year by year, the world became America’s property, thanks to Joseph’s oversight. In fact, with24

THE JOSEPH STRATEGY

in the first year of the seven-year famine, the American people even unanimously voted to amend their entire voting system and presidential term limits while they went through the famine. The leadership structure that was saving the world was too imperative to be changed. By the fifth year, all the nations came to Joseph saying, “We have spent all our money, resources, raw goods, and even our land trying to survive this famine. We know that our people would have been dead long ago if it weren’t for you and your wise preparation of storing up resources in the silos. All we have left is our bodies. Please help us!” Joseph made them a deal. He said, “Here is what I will do: I will give you seed and let you go back to your land that I own. I will lend you the land to produce food. I will take 20 percent, and you will keep 80 percent of whatever is grown. This approach will allow you to be back on your lands, in spite of you selling them to me, and to be faithful stewards of what you have been given.” It was a second chance for the previously unwise nations to learn the lessons and not repeat the same mistakes of bad stewardship. The nations couldn’t believe Joseph’s generosity. Only 20 percent? He could have easily taken 80 percent for himself (or the full 100 percent)! But he only took 20 percent! During a famine, he asked for the same taxation level as he would have during the times of abundance on the land he owns. All the nations responded in accord, “You have saved our lives, and we are happy to be slaves, yet what generosity is this? We are happy to come under your mentorship and stewardship and that of America and the president’s broader economy. You made America prosper to such an extent that you were able to look after us during these years.” They considered themselves blessed to be looked after in this very righteous fashion.

The Westernized Modern-Day Joseph Story

25

Now, rather than squandering resources and opportunities, the world’s nations painfully understood the importance of preparation, saving, and investing in times of abundance. As they began to till the land and save the way Joseph taught them, they began to prosper. They began implementing prudence while investing whatever leftover resources they had, and the nations began to prosper again. If it weren’t for Joseph giving the world’s nation’s seeds to start from scratch, all would have ceased to exist. After the seven years passed and the famine was over, Joseph evaluated the nations to see whether each had learned its lesson. Three years after the famine ended, Joseph met with the president and the governing authority and advocated restoring each nation’s land as their own. The president and the House and Senate unanimously agreed to give the lands back to the nations. It took them three to four years to prove that they could decently steward the land again. While each sovereign nation was given a second chance to properly manage the opportunity for a healthy economy, the tax still applied and was used to rebuild America’s infrastructure. Within 10 years of the famine’s end, the nations of the earth were on their way to thriving once again — all thanks to the strategy that Joseph implemented. One man, one strategy. A world saved.

26

THE JOSEPH STRATEGY

27

Chapter 3 Where Are All the Josephs?

A

fter reading a story like that, you must be thinking that this   could never happen in today’s market. Or, that would never work in your situation. After all, you say to yourself: I am a middle-class citizen, I have a family, a job, responsibilities; I’m almost retired or already retired. I can’t just save up the resources of a nation when times are great. That’s impractical. Now, you may not be implementing these strategies for an entire nation as Joseph did, but you can apply them to your “nation” or sphere of influence. In fact, I am so convinced that if you do these five things over a sustained period, God will entrust you with more. Way more! After all, doesn’t the Bible say, “Well done, good and faithful servant! You have been faithful with a few things; I will put you in charge of many things” (Matthew 25:23 NIV). If you are faithful with what God gives you, he always will entrust you with more. I have found that God is a really good businessman. He wants a return on His investment. He will entrust more and more to you if you multiply it. If you use God’s resources for His purposes, resources will NEVER be in short supply. Now, many of us already know this, but why don’t we see a breakthrough in our finances, businesses, and giving ability? Why is it that people who don’t even believe in God often succeed beyond their wildest dreams?

I believe it is because they follow these five principles I describe in this book in some way or fashion. They may not even know they are doing it either. The principle (or laws) works every time, whether you believe in God or don’t. It doesn’t matter if the market is good or bad, whether they grew up rich or poor, or what their financial education is. If they follow these five steps, success is GUARANTEED. Not only will the person succeed who follows these five steps, but they will also thrive beyond their wildest dreams. It’s important to remember that “God delights in our prosperity” (see Psalm 35:27). He knows that without abundant resources, it’s pretty challenging to make a REAL, LASTING, and LARGE impact on the earth. I pray you will utilize these steps and then tell the world about them. Egypt did. Pharaoh did. After all, the world is full of people who need this information. Even the strongest leaders and economies in the world can get it mixed up. The Joseph Strategy CAN and WILL set things straight economically. Are you ready to change the world?

Where Are All the Josephs?

29

Chapter 4 Strategy #1: Management Genesis 41:48-49 NIV: “Joseph collected all the food produced in those seven years of abundance in Egypt and stored it in the cities. In each city, he put the food grown in the fields surrounding it. Joseph stored up huge quantities of grain, like the sand of the sea; it was so much that he stopped keeping records because it was beyond measure.”

L

et’s go ahead and rip this Band-Aid off first. This first prin­   ciple is something 100 percent of people reading this book are guilty of in some capacity. We have all dropped the ball here. In fact, I will encourage you and say that if resources EVER begin to dry up, you need to go back to this principle and do some self-evaluation because this is almost always the real reason financial problems begin. If I could describe Joseph in one word, it would be ”excellent” because he ALWAYS worked with a spirit of excellence. Anything he put his hand to prospered. Because he had such favor and made prosperous whatever was before him, he was promoted to head of household over Potiphar’s house (a very prominent man in Egypt).

Even after Joseph was wrongfully accused of raping Potiphar’s wife (Genesis 39:7-20) and was thrown into prison, he gained favor because of the excellent spirit within him. He prospered in everything he did to the point that the prison keeper entrusted the entire prison into Joseph’s oversight and authority. After Joseph was promoted to second in command over the entire land of Egypt, he resisted the allure of abundance. He stayed hard pressed to fulfill the assignment given to him by his master, Pharaoh. He never let up, always striving to be a better and better steward of what was entrusted to him. Predictably, the responsibility entrusted to Joseph kept growing and growing. Now, our master is not Pharaoh or Potiphar. It’s not even our boss at work nor our spouses at home. Our master is God. “God owns the cattle on a thousand hills” (Psalm 50:10), and it’s been said, “He owns the hills too!” Psalm 115:16 NIV says, “The highest heavens belong to the LORD, but the earth he has given to mankind to manage” (italics mine for emphasis). I like how Bill Johnson puts it: “God is looking for those who don’t love the world, that he can entrust the world to.” The bottom line is that we have been given a measure of resources: a house, a car, a job, retirement savings, et cetera. How we manage what we have will determine if we get an upgrade or not. If I can’t manage a home when I am renting, God will not answer my prayers for the dream house I want to own. Or if I can’t manage five employees, how can God entrust me with 500? If I am losing percentages of my retirement savings that I will need over the next 30 years to fees and market volatility, how can I truly enjoy the fruit of my labors once I start my retirement?

Strategy #1: Management

31

Now, you may be thinking: I don’t struggle in this area. I am a great employee and a great spouse. I make my bed in the mornings, I wash the dishes after every meal, I spend time with my children, and I entrust my hard-earned money to a financial planner. All this may be true, but I will tell you that if there is ANY area in your life that God has entrusted you with that you are not properly stewarding, he will not give you more in that area. Let’s look at just the financial arena for a moment and say you have been praying faithfully for abundance financially. You want to get out of debt, give more to your local church, and save more for retirement. If you embellish your mileage write-off on your taxes, you are a bad steward with finances because you are lying. I know because I am guilty of this very thing. When I first was made aware that cheating on your taxes will stop the flow of God’s blessing, I had to refile my taxes and ended up owing over $5,000 more to the IRS, but my conscience was clear, and the flow of God’s blessing continued. Let’s say you owe multiple people money due to some bad decisions you made. If there is no way you can pay all of them at this time, don’t settle on not paying any of them. This will shut off God’s favor financially. I know because I did this too. You see, there was a season where I owed multiple people hundreds of thousands for a business venture. Because my income was down at the time, I rationalized not paying any of them for a few months. The funny thing was, each month I didn’t pay my debtors anything, my income was less and less. When I started paying them even a little something, everything changed almost instantly, and money and new deals started coming from every direction. The key here is management in EVERY area. Now I may be managing my personal relationships with my wife and kids well, and I will reap the benefits of that faithfulness. But if I am not 32

THE JOSEPH STRATEGY

stewarding my finances well, I can have the greatest family ever and still be poor. It’s as simple as that. Here is a memory-jogging list you can use to evaluate any areas of your life that need to be “cleaned up.” I have to evaluate this all the time. Please don’t fall into shame here. God is such a loving father who wants you to succeed. He will let you take the same test over and over until you pass it, so you then move onto the next level prepared. Do any of these areas need your attention? Taxes — Do you have any embellishments or deception? Anything unclaimed or unreported? God will help you make up for whatever you owe if you are faithful in managing this area. Remember, taxes are a governmental necessity. There are legal ways to pay less in taxes, but there must be no deception in this area. Your house — Is your house a mess? Are there lightbulbs out in your bathroom? Are there windows that need fixing? Does the lawn need to be mowed or leaves that need to be raked? Are there dirty clothes all over your room? Believe it or not, these things matter. If you can’t manage your house, how can God give you a bigger or better one? Management days — One thing that we do as a family on Saturday mornings is what I call a management day. It’s basically addressing anything that needs to get done around the house (or sometimes within the business) that didn’t get done during the week. Attending to all these chores may take most of the day, but it feels good to have your house or business in order. Your car — Are you staying current on registration, oil changes, tire rotation, insurance, et cetera? This is just another area of management that needs to be a priority. Your garage — This one can be tough. It’s easy to throw things in the garage and forget about them. It’s easy to rationalize not addressing things in the garage that are not being stewarded well. Are your tools organized? Are there things you could sell to Strategy #1: Management

33

pay down debt or use to invest? Is it clean and organized? Is it time for a yard sale? Relationships — If you are married, it is important that this be a daily priority. Communication is a powerful piece in management. Communicating your love to one another, expressing things that need to be done, and making time for one-on-one connection are essential in stewarding your No. 1 relationship (besides God, of course). If you are a parent, kids spell LOVE and TIME. Make them a priority. Debt — This can be a painful one. Do you have a plan? Do you have a budget? Are you sticking to it? Do you have a reward system for when you achieve certain benchmarks? If you are faithful even a little here, it will snowball with God’s help. Ideas — Many times, when we ask God for a financial breakthrough, he gives us an idea. The financial breakthrough is locked up in the idea like a seed. If we plant the seed in the right environment and are faithful and nurture that idea, the “fruit” that we are after will come about — and then, ultimately, more trees with more fruit. Unfortunately, the disappointing part is that most people do nothing with the ideas God gives them as the answers to their prayers. They just keep asking God for cold, hard cash to appear in their mailbox, and God keeps sending them seeds. Do you have flour, chocolate chips, and an oven? Bake some cookies and sell them at your church for extra resources. I like how Myles Munroe put it: “If you use your oven one time a week and are begging God for money, you are a bad manager!” Do you have a lawn mower? What about cutting lawns after work to make an extra $250 a week? You get the idea. You can be as creative as possible! Tithing — Folks, you can never outgive God, but you can steal from him. The fact of the matter is that the tithe (or 10 percent of your income) BELONGS to God. It is not yours. Check out Malachi 3:8-12. You invoke a curse on your household when you 34

THE JOSEPH STRATEGY

withhold the tithe. Conversely, when you give the tithe faithfully, God says he will do the following: 1.

Open up the windows of heaven to pour out a blessing on you that there will not be room enough to receive it.

2.

God will rebuke the “devourer” for your sake so that you won’t fail to bear fruit, nor will your fruit be destroyed. There are very real demonic attacks against your finances. Remember, the enemy wants to keep you poor and limited in your capacity. If the enemy can consume your thoughts and time with nothing but survival, he has shelved you. He has won.

3.

ALL nations will call you blessed, and you shall be a land of delight. Sound familiar? This is what Joseph experienced exactly. In a roundabout way, Joseph used the resources he had in such a responsible manner for his fellow brother (mankind from all nations), saving them from complete destruction. There are over 100 verses in the Bible on giving alone. The tithe is just the first part, but this is a requirement. Be generous. Be QUICK to give. God is only asking for a 10th of what you make. Do you give it to him speedily? Or do you drag your feet? At the time of this writing in America, only 10–25 percent of church members tithe, according to State of the Plate. Only five percent of the United States population tithes. On average, Christians give 2.5 percent of their income, which is down from the 3.3 percent given during the Great Depression (Tithe.ly). No wonder the church is largely poor and being overrun by financial difficulty. This is a must!! You have to obey God’s laws to be successful!

Strategy #1: Management

35

Note: I give the first 10 percent (the tithe) to the poor, widows, orphans, sex-trafficked, et cetera, and then give the offering (anything above 10 percent) to the church. As I search the scriptures, this is the example I see personally. Offering — This one can be a little gray for most people. I won’t be dogmatic here, but the offering was anything over and above the required 10 percent tithe. In the Bible, this usually referred to what was in your heart to give. If you are struggling financially, try starting out giving 11 percent (10 percent tithe and 1 percent offering). I like how Bill Johnson put it, “Anything you give, God gives it back to you, and He has REALLY good interest rates!” Don’t be stingy! Be generous! If you are faithful to pour back into causes that are on God’s heart, he will give you more to steward! Finances/Investment — Well, you are off to a good start here. The fact that you are reading this book is a sign that you are trying to manage your finances and investments well, so GOOD ON YOU! •• Do you have a plan in place? •• Have you stress tested your plan? •• Are you doing your due diligence? •• Have you gotten a second opinion from someone you would want to trade places with financially? •• Are you paying high fees? •• Have you lost money in the market? If you have to take out required minimum distributions after age 72 on your tax-deferred money — traditional 401(k)s, individual retirement accounts (IRAs), 403(b)s, et cetera) — are you aware of how a negative sequence of returns can cause you to run 36

THE JOSEPH STRATEGY

out of money before you run out of life if the market happens to be down that year? Do you have a plan for long-term care? (Seventy percent of people find themselves in a long-term care situation before they die, something Medicare largely DOES NOT COVER.) Now don’t be overwhelmed! It may seem like you are dropping the ball in every area of your life. You may feel that there aren’t enough hours in the day to get all this done. And that’s OK! You may have to turn off the TV — indefinitely. You may have to forgo bowling night with the guys or movie night with the girls to make management a priority. But I am telling you that you have to be faithful with what you have now if you want your life to start improving. This is the foundation of The Joseph Strategy. Remember, if you look at Joseph’s life, he was one of only two people in the entire Bible for which no sin was listed. Sin simply means missing the mark. Whatever he put his hand to prospered because management was a part of who he was. He operated out of a spirit of excellence all the time. *** I remember when I was working as a ranch hand in Idaho. My boss, a very successful businessman, owned a landscaping and Walmart center maintenance company. They would make sure the parking lots and grounds of big chain companies like Walmart were well maintained and manicured. Both he and his wife were “attention-to-detail” people. When I first started working for him, he always tried to get me to think differently and maintain a constant awareness of things that needed to be tended to. You see, on the ranch, EVERYTHING needed my attention. When the pond drainage gate would get backed up with leaves, it could flood and blow out the dam, flooding neighbors downstream. If the irrigation levy was not correctly maintained, it could easily overwater the hay fields. Strategy #1: Management

37

When that happened, it created too much crabgrass, making the hay unusable or forcing it underwater, resulting in less hay production and the need to buy more hay — to the tune of tens of thousands of dollars. I needed to have a constant awareness of the weather at all times and know which machines were exposed if it rained. Is anything flooding? Is the wood for the boiler that heats the entire house and ranch getting wet? Are all the fences closed? Where are the horses? Did any of the horses get free when the wind blew open the gate? You get the idea. There was no time to “check out.” Management was a full-time ordeal on the ranch. It’s no different in your personal, professional, and financial life. The trick is knowing that everything requires your attention, but what needs your attention RIGHT NOW? To understand and tackle this is to understand wisdom. God knows this, which is why He will entrust you with more because He knows you can handle it! NOTE: At our financial firm, we handle the first strategy of “Management” during the first appointment by “taking inventory” of what you have, what your goals are, what your concerns are, and what you want to accomplish with your retirement savings. What gets measured gets managed. We believe that the first step to creating a financial game plan, an income plan, or an estate plan first starts with taking a complete look at where you are, what you have, and where you want to go financially. All of this is accomplished during the first 60-minute meeting at our firm.

38

THE JOSEPH STRATEGY

39

Chapter 5 Strategy #2: Financial Wisdom Don’t follow the crowd off the cliff! Genesis 47:13-15: “There was no food, however, in the whole region because the famine was severe; both Egypt and Canaan wasted away because of the famine. Joseph collected all the money that was to be found in Egypt and Canaan in payment for the grain they were buying, and he brought it to Pharaoh’s palace. When the money of the people of Egypt and Canaan was gone, all Egypt came to Joseph and said, ‘Give us food. Why should we die before your eyes? Our money is all gone.’”

H

ave you ever heard someone ask, “If your friends jumped off a bridge, would you do it too?” During my teen years, my mom used to say that all the time when I was about to make a stupid decision. Like when I was going down a colossal hill on a scooter without shoes and a helmet, and when I tried to break, the metal flap that would slow down the tire became so hot on my bare foot that I couldn’t apply any pressure — thus propelling me dangerously forward to an ultimate crash once I finally hit a top speed of 1,000 miles an hour. That was a painful lesson.

Or I’d hear it about other stupid things I did, like trying to make a bow and arrow with a pocket knife at 10 years old and ultimately filleting my hand wide open as I was trying to cut a branch off a tree. I learned a valuable lesson that day: Don’t cut toward yourself! I have many more stories, but you get the idea. Maybe this is why I have such a hard time when people say, “Everyone is doing it.” Anytime I hear that, I cringe inside. Have you heard about Norwegian lemmings? A lemming is a small rodent usually found on or near the arctic. Driven by strong biological urges, different species of lemmings can migrate in large groups when population density becomes too great. Oftentimes, during migration, the “herd” of lemmings may happen to migrate off a cliff into the ocean. And as you can imagine, the little lemmings follow right off the cliff to their death below. Hence the name “suicidal lemmings.” Boy, if this example doesn’t preach the truth, I don’t know what does! Part of growing in wisdom is learning not to blindly follow the crowd — especially if “everyone is doing it!” Part of maturing is learning from other people’s experiences and mistakes without making those same mistakes yourself. This is wisdom, also defined as “knowledge applied.” But what if the world redefines those mistakes? What if barreling down an Everest-sized hill on a scooter and ultimately crashing, knocking yourself out, and being reduced to hamburger meat with road rash was called normal? Cool even? Part of life? Encouraged by society? What if the world told you that cutting your hand was normal — and in fact, needs to be done frequently — with the reason being that you have too much blood anyway, and it’s good to Strategy #2: Financial Wisdom

41

let a little blood out here and there? After all, too much of your blood within you can kill you, so give yourself a good slash once a month. It’s healthy. Good on you for being responsible. These examples are preposterous because we know better. Or should I say, we understand better. We know through common sense that going down a large hill on a scooter without any helmet or shoes will end in disaster. We know that bloodletting is what kills people, not saves people. Science proved that nonsense decades ago. But what about something more sophisticated, something more difficult to understand? What if the majority of the population followed a way of thinking that SEEMED RIGHT? All the “experts” touted the same philosophy. Places of business encouraged a certain type of behavior. You turn on the news and get the same ideology. When you turn on the computer, you find identical ways of thinking. Everywhere. With this much “proof,” it’s impossible that large of a group could be wrong — because if they are, then EVERYONE IS WRONG. That doesn’t seem right. How could all the experts, the places of business, the professionals, and the wisdom of the world largely be wrong? If they all jumped off a cliff, would you? That’s what happened to the world in Joseph’s day. The world came to Joseph with hat in hand when they ran out of resources and were starving. They had just experienced unprecedented levels of blessing just a few years before, but because they “followed the crowd” and “did what everyone else was doing,” it almost resulted in their complete demise. I hate to say it, but the majority of society is HIGHLY uneducated when it comes to money. Because of their lack of education, they rely on “gurus” and “experts” and blindly trust what 42

THE JOSEPH STRATEGY

they have to say. Usually, these experts have something to do with Wall Street. More on why I think Wall Street is one of the biggest cons later. Nonetheless, when someone doesn’t understand something complicated, they usually turn their brains off and “go with the flow.” They follow any leader who will lead them, which is VERY dangerous and usually results in financial catastrophe or, at best, financial stagnation. I believe there are three reasons most people turn their brains off when it comes to finances, which ultimately leads to devastation and regret. These reasons are really three traps: #1. Normalcy Bias Trap There is something in life called a normalcy bias. According to Wikipedia, the definition of normalcy bias is as follows: The normalcy bias, or normality bias, is a belief people hold when there is a possibility of a disaster. It causes people to underestimate both the likelihood of a disaster and its possible effects because people believe that things will always function the way things normally have functioned. The world has always been this way. Society does this. The masses believe that. Therefore, maybe I should too. Today is just like yesterday. Tomorrow will be just like today. It’s all the same. Normalcy bias is also known as “optimism bias” — always being optimistic about the future and what it holds for you and never believing anything bad can happen. Nothing could ever go wrong … Then, the unthinkable happens, and people finally wake up out of the hypnotic trance that lulled them to sleep. But it’s almost always too late. The damage has been done. The money is gone. The relationship has been destroyed. The time has passed. And all people are left with is regret.

Strategy #2: Financial Wisdom

43

I’m afraid I am viewing one of the worst normalcy bias epidemics I have ever seen. I started working in a very large bank when the 2008 financial crisis began. I was an aspiring financial advisor at the time. The stock market intrigued me. I was fascinated by the idea of putting money into the market, timing it just right, using my “brilliance” and “gut instincts,” and then cashing out for millions. It seemed easy. Maybe God would give me a dream or vision of a stock to buy, and I could then sell at the perfect time, securing my financial fortress. But as I dabbled, the exact opposite happened. I lost everything. When the crash happened, I watched as our local financial advisor ran around like a chicken with his head cut off — answering phone call after phone call from angry clients demanding to know why their accounts had dropped by 40 percent or more. It was a sobering time, to say the least. Fast-forward to today. I’m afraid that people’s behavior is mostly the same as it was before the 2008 crash: the same retirement plan; the same amount of debt (or more); the same advisors being trusted with our hard-earned money; the same fees; the same growth model; and the same 4 percent withdrawal rate. It’s the same plan, different decade. We are crossing our fingers and praying that nothing happens before we can hang up our hat and finally do something with our “golden years.” Or maybe we are hoping to have enough to travel or take 10 cruises in a year like we wanted to or start a foundation with the extra money we were hoping to have. Ladies and gentlemen, in my years in the financial industry, I have never seen something so humbling as watching people who were happily retired or pursuing their purpose have to stop and go back to work in a field they dislike or are not trained in. It’s horrible to see it. It’s even worse to live it. I know because it happened to my mom. More on this later.

44

THE JOSEPH STRATEGY

#2. Ostrich Syndrome Trap Maybe you don’t struggle with the normalcy bias and believe everything will “work out” in the end or that nothing big will change. Maybe you suffer from “ostrich syndrome.” Ostrich syndrome is defined as a psychological term to describe behavior where we proverbially “stick our heads in the sand” to ignore our problems. Maybe you know things are changing — the market, new financial strategies. Prudent implementation over time is important to you, but it’s difficult to know where to start and who to trust. Many people fall prey to this trap. They trust a friend of a friend, or they don’t do their due diligence. They don’t get a second opinion, and inadvertently, they bury their head in the sand to avoid confronting any arising problems. I can’t tell you how many times I have sat with clients who got a financial strategy from a “friend” who is a financial advisor or an uncle they trust. This person has been faithful to a failing strategy that ends up leaving them broke just years into their retirement. And unfortunately, the pain of changing is too painful. They just bury their head in the sand, hoping against hope that they made the right decision but never want to stress test one of the most important financial decisions they could ever make. Coming out ahead with finances will ALWAYS REQUIRE CONFRONTATION. I’m not talking about a confrontation of screaming and physical violence. But there will be consternation anytime you are trying to get ahead financially, whether that confrontation is with a friend, a mindset, or, maybe, a widely adopted company retirement plan. Financial abundance REQUIRES confrontation (never forget that).

Strategy #2: Financial Wisdom

45

#3. Zero-Urgency Trap Maybe you are younger. I consider anyone under 55 as “younger,” by the way. The reason I say this is because this trap usually happens to the “younger” folks. Most people above 55 REALLY understand the importance of making some aggressive moves to become financially free SOON. Warren Buffett said, “Successful investing takes time, discipline, and patience. No matter how great the talent or effort, some things just take time: You can’t produce a baby in one month by getting nine women pregnant.” According to nerdwallet.com, after a study of 16.2 million retirement accounts held at Fidelity Investments, the average median retirement savings by age bracket are as follows: Age 20-29 — $4,300 in retirement savings Age 30-39 — $16,500 in retirement savings Age 40-49 — $36,000 in retirement savings Age 50-59 — $60,900 in retirement savings Age 60-69 — $62,000 in retirement savings Now, anyone with half a brain knows that this is not enough money to do much “living” in America for a long period of time. We often see this trap played out in sports stars and Hollywood icons. When the money is flowing, they spend it as fast as they make it. They don’t put anything away for the future. They don’t invest wisely, and, unfortunately, when the cash flow ends, bankruptcy usually ensues within the decade. I have struggled under this trap the most. When things are good, you assume they will always be good. You enjoy the fruits of your efforts but rarely have anything left to show for when the seasons change. And let me assure you, the seasons ALWAYS change. The only “constant” is that nothing stays the same. 46

THE JOSEPH STRATEGY

The Wall Street ‘Bait and Switch’ This may come as a shock to some of you, but I believe that Wall Street is one of the biggest cons in the modern world for the average person trying to invest in their future. I’m blowing the whistle on them. Unfortunately, many do not really understand the inner workings of Wall Street. They do not know about the risks, fees, and exposure that investing in Wall Street puts someone in. Most hardworking folks are trying to be responsible with their money and get a decent return on their investment. And sometimes you can get that in the market. That is about the only pro I see in investing in the market. You MAY (or may not) get a decent return on your investment. One caveat is that it is better to invest in Wall Street than not invest at all. After all, trading is biblical. (See Matthew 25 for the Parable of the Talents and Luke 19 for the Parable of the Minas.) In my opinion, trading in the market should primarily be a “young man’s game” or a “very rich man’s game” — the young because they aren’t retiring any time soon and the rich because they have passive income coming in, regardless of whether they lose 50 percent in the next crash. The rich don’t necessarily need the “at-risk” money to retire well. But if you aren’t young (over age 55) and aren’t rich ($25 million-plus net worth), you need to keep reading because this REALLY applies to you. I have a safe solution for everything I am talking about here. A solution that I believe has much more of a rock-solid biblical foundation, one that has GUARANTEES. Actually, it’s very similar to Joseph’s strategy (more on this in the next chapter). Before we get into that, you need to become educated on the 10 inherent problems I see in Wall Street that “swindle” good folks like yourself out of their hard-earned money. The Mer-

Strategy #2: Financial Wisdom

47

riam-Webster dictionary’s definition of “swindle” is “to obtain money or property by fraud or deceit.” Even billionaire John D. Rockefeller said, “If I had to give any advice, it would be to keep out of Wall Street.” The following are 10 problems for anyone who invests in Wall Street (which I believe swindles people out of their money): Problem #1: Sequence of Returns This should be no surprise to anyone. Most of us have felt the sting of losing money in the market (some more than others). But sometimes, it’s not just the fact of losing money; it’s losing money you spent decades earning and building. Sometimes, it’s not so much about how much you gain but about how much you do not lose. Remember that. Now, if you are a wealthy individual with a net worth of $25 million or more and can afford to wait and ride out the rollercoaster of the market, this may not affect you as much because you aren’t drawing on any of the money. You don’t need to. You can wait it out, even if that means five to 10 years. But for most folks with less than a $25 million net worth, they can’t wait five to 10 years for the market to rebound. They risk losing money if the market is down and have to pull out money to live. I saw this firsthand with countless people when I worked at the bank in 2008. The bigger issue, though, is time. It’s either having to settle and live on less or start earning more money to compensate for the reduction in investments due to the market downturn. Did you know that it takes on average 40 months for the S&P 500 index to recuperate from the loss after a bear market crash? Forty months! What if you are taking the required minimum distributions? This means that you are unnecessarily being forced

48

THE JOSEPH STRATEGY

to take larger percentages out of your portfolio in down-market years. For example: Let’s say the market goes down 50 percent this year, and your required minimum distribution on your 401(k), 403(b), or IRA is five percent. Because the market is down by 50 percent, your required minimum distribution reduces your portfolio by 10 percent — not five percent — because the market has been cut in half. This illustrates how people run out of money before running out of life (and what 99 percent of financial advisors will NEVER talk about). Financial advisors will use fancy illustrations to show you all the positive years but never show you the down years. There will always be down years. And the most vulnerable money is tax-deferred money that is subject to required minimum distributions. Unless you’re young or rich, these accounts need to be insulated from risk and fees. Problem #2: Fees Talk about a hidden cancer. I saw this firsthand when I was reading a financial statement from my mom’s investments. Fees were eating up everything she was making. I was livid. More on my mom’s story later. According to Forbes, “The average investment account fees, including advisor commission fees, comes in at 2.1 percent annually every year” (Ferri 2013). These are typically invested in mutual funds. Think about it this way. Let’s say, for example, you are 60 years old, and you get your investment account up to $1 million in preparation to retire, which is not enough in most cases today (more on this to come). We won’t consider any fees you have paid to this point. Strategy #2: Financial Wisdom

49

If you live another 30 years, and the account only stays at the same balance, you will have paid $630,000.00 in fees alone. That is highway robbery! Oh, and by the way, YOU PAY THESE FEES WHETHER THE ACCOUNT GOES UP OR DOWN. Can you say “swindled?” That is almost 2/3 of an account paid out in ongoing fees. If you’ve ever heard anyone say that you can get 12 percent on average in a growth stock mutual fund, what you don’t hear them factor in is the fees. In order to get a 12 percent average return on investment, you would have to average a 14.1 percent return BEFORE FEES. This is “pie-in-the-sky” marketing. According to statista.com, there are over 119,000 worldwide regulated mutual funds, with almost 10,000 in the United States alone. In 2018, there were 582 mutual funds opened, while 591 were closed. Many mutual funds just don’t make it. According to Dan Caplinger of The Motley Fool: One of the most important things to know about a mutual fund is how much it charges in fees. Though every mutual fund is required by the SEC to report its expense ratio, one thing that many investors never realize is that not all of the costs a mutual fund has to pay actually show up in the brochure given to the client. The biggest omitted expense is the cost of trading. Just like an individual investor, whenever a fund buys or sells a stock, it has to pay commissions to the broker that executes the trade. In addition, the bid-ask spread — the difference between what buyers are willing to pay and sellers are willing to accept — can eat into a fund’s assets if it trades frequently, especially with stocks that have low trading volume and high spreads. In some cases, a mutual fund can be big enough that it actually moves the market when it tries to buy a stock, which can result in either paying a higher price or 50

THE JOSEPH STRATEGY

not getting as many shares of the stock as the fund manager had hoped. These trading costs don’t make it into the expense ratio, but they can dramatically affect total return. The higher those costs are, the harder a fund has to work just to match the overall market’s return, let alone beat it. (Feroldi et al, 2013) Before we get any further, I want to provide some balance to what I just said. I am all for someone earning what they are worth. The Bible even says in 1 Timothy 5:18 (NIV), “The worker deserves his wages.” But that fee is coming out of your investments, regardless of the performance. If the market goes down, guess what? It’s going down more because the financial advisor is still going to take his fees out. In most cases, there will be some sort of fee in any retirement account, but the more you can minimize fees, the greater your return on investment will be. There are options that solve all of the fee problems, which we will discuss in the next chapter. Problem #3: Bubbles According to Wikipedia: A stock market bubble is a type of economic bubble taking place in stock markets when market participants drive stock prices above their value in relation to some system of stock valuation. Behavioral finance theory attributes stock market bubbles to cognitive biases that lead to groupthink and herd behavior. Two famous early stock market bubbles were the Mississippi scheme in France and the South Sea bubble in England. Both bubbles came to an abrupt end in 1720, bankrupting thousands of unfortunate investors.

Strategy #2: Financial Wisdom

51

The two most famous bubbles of the 20th century — the bubble in American stocks in the 1920s just before the Wall Street Crash of 1929 and the following Great Depression and the dot-com bubble of the late 1990s — were based on speculative activity surrounding the development of new technologies. The 1920s saw the widespread introduction of an amazing range of technological innovations, including radio, automobiles, aviation, and the deployment of electrical power grids. The 1990s was the decade when internet and e-commerce technologies emerged. And who can forget the mortgage and real estate bubble of 2008? That’s the danger of investing in Wall Street when a bubble may be forming. The Wikipedia article goes on to say, “Investment managers, such as stock mutual fund managers, are compensated and retained in part due to their performance relative to peers. Taking a conservative or contrarian position as a bubble builds results in performance unfavorable to peers. This may cause customers to go elsewhere and can affect the investment manager’s own employment or compensation. The typical short-term focus of U.S. equity markets exacerbates the risk for investment managers that do not participate during the building phase of a bubble, particularly one that builds over a longer period of time. In attempting to maximize returns for clients and maintain their employment, they may rationally participate in a bubble they believe to be forming, as the benefits outweigh the risks of not doing so.” It’s the gregarious nature of people. People are of a “herd mentality.” It’s very uncommon for someone to go against the grain of “the machine,” especially when their livelihood is attached. This is why it can be detrimental to trust your money with someone who may be under the pressure of performing and will do whatever is necessary to keep a paycheck, even if it means putting your hard-earned money at risk. 52

THE JOSEPH STRATEGY

With no safeguards around investments, a mutual fund, for example, can trade different stocks EVERY QUARTER without really letting you know. Sure, you may get a statement, but who really catches the fact that three of the 30 stocks that comprise the mutual funds are different. The bottom line is you’re not in control — which brings me to the next problem with Wall Street. Problem #4: Not Being in Control of Your Money Did you know that since the early 2000s, since the advent of fiberoptic high-frequency trading, the investment world has dramatically changed — especially for the little guy? “The stock market is rigged,” Michael Lewis tells Fresh Air’s Terry Gross. “It’s rigged for the benefit for really a handful of insiders. It’s rigged to... maximize the take of Wall Street, of banks, the exchanges, and the high-frequency traders at the expense of ordinary investors.” Lewis is the author of several books about the world of finance. His new book “Flash Boys” is about the form of computerized transactions known as high-frequency trading, in which the fastest computers with the highest connection speeds get the information first and make the trade before anyone else can. A millisecond — even a nanosecond — can make all the difference between how much money is made or lost on any transaction. You’d be surprised to hear what investment banks do to get that nanosecond edge and how they often use it in ways Lewis describes as “predatory.” The victims range from some investment houses to individual investors. Lewis says high-frequency trades can end up hurting the returns on your retirement accounts. The FBI, Wall Street regulators and New York’s attorney general are investigating high-fre-

Strategy #2: Financial Wisdom

53

quency trading, and whether it has created an uneven playing field. (Lewis 2014) Now I don’t know about you, but the idea of playing a game starting off with a severe disadvantage doesn’t sound very appealing to me, especially with my hard-earned money! Unless you are a hedge fund manager and have inside information (which most of the time is illegal), you will more often than not lose in the market, especially in short-term trading. You may say, “Well, I don’t do short-term trading. I invest for the long term.” This may be true, but no one knows — unless you’re prophetic like Joseph — when the next pandemic will break out (or war, social unrest, an earthquake, corruption, et cetera). You get the idea. You are not in control of those things, but they can affect your portfolio. What is MOST exposed are your tax-deferred accounts, such as your 401(k), 403(b), and IRAs, those investment vehicles subject to required minimum distributions. Bottom line: If the money you need to live on in retirement is at risk to the ebbs and flows of the market and in something you have zero control to influence up or down, you are playing defense, not offense. For something as important as your retirement savings, shouldn’t you be playing offense, not defense? Offense is what wins games — not defense. Problem #5: Perpetuating Bad Advice Have you ever heard these things from a financial guru or financial planner? •• “We’ve gone through similar crashes in the past.” •• “Now that the market has crashed, it’s a great buying opportunity.” 54

THE JOSEPH STRATEGY

•• “That loss you’ve experienced is only a paper loss.” •• “If that other safe financial vehicle is so good, why aren’t other people doing it?” •• “It sounds too good to be true.” •• “You don’t want to tie up your money for long periods of time.” •• “You won’t get all of the market gains in other ‘safer’ products.” •• “As long as you don’t pull more than 4 percent out each year in retirement, you should never run out of money.” •• “The stock market has averaged 8 percent over the last 50 years.” These are just some of the most common sayings you will hear if you sit in any mainstream financial planner’s office. I will tell you that every last statement is completely wrong. I will prove it to you throughout the next couple of chapters. But suffice it to say, these ideas are propagated from the top of these financial organizations and then regurgitated day in and day out to genuinely inquisitive investors like you and me. It reminds me of IBM before Apple started dominating the computer scene. Everyone at IBM wore the same slacks, the same suit, and the same tie. They were like little lemmings, believing IBM was the titan of the future and that zero innovation was required to stay at the top. Boy, did they learn a very humbling lesson when Apple started gaining momentum. Most of the advice shared by the mainstream financial gurus has a measure of truth to it, but it is highly contingent on a few things that can make it irrelevant and potentially disastrous if followed. Details like: Strategy #2: Financial Wisdom

55

•• The amount of retirement savings you have •• The amount of money you need to live on each year •• Inflation •• Cost of living adjustments •• Long-term care costs •• Vacation savings •• Rainy-day fund All of these play a critical role in the APPLICATION of the advice. In other words, the CONTEXT of one’s financial means, dreams, desires, concerns, objectives, and risk tolerance is critical to tailor the advice. Financial advice should not be “one size fits all,” but unfortunately, in today’s mainstream financial world, it mostly is. This is why it is so important to meet with a Certified Financial Fiduciary®, who is required to carefully give you the best advice for your specific situation. A CFF® has to act in the best interest of the client in every situation. Problem #6: Limited Products Most financial planners representing Wall Street can offer you any stock, bond, or mutual fund. But when it comes to safe-money products, ones where you cannot lose money due to market volatility, don’t have to pay fees, can make great rates of returns, and cannot outlive your money, they may have fewer than 10 products altogether. Many financial planners don’t offer ANY. For most people at or approaching retirement, their risk tolerance changes. They are trying to retire and stop working. They cannot afford to work another 4-8 years while their portfolio recuperates its losses from the last financial crash.

56

THE JOSEPH STRATEGY

The way you can know if safe-money products might be a better fit is by answering this question: When it comes to your hard-earned retirement savings, are you willing to lose ALL of your hard-earned money, SOME of your hard-earned money, or NONE of your hard-earned money during retirement? If the answer is NONE, then keep reading. I will go into detail on safe-money products in the next chapter. When it comes to dealing with safe-money products, make sure you deal with someone who is independent and represents hundreds of products. In certain situations, if you can find someone who represents over 1,000 safe-money products and has the software programs to assist in finding the best of the best (as safe-money products’ rates change on a monthly basis, and no one can memorize a thousand products’ rates), sit down with them and see if they can help accomplish your goals. At the very least, learn more about the products available to you. Problem #7: No Financial Guarantees When someone becomes “series” licensed, they become restricted by what they can and cannot say. The reason is that when an advisor gets a series license, it’s for the purpose of selling variable or risk-based products. Because these products could lose their clients’ money, they cannot use words like GUARANTEE. Would you rather HYPOTHETICALLY make an average of 10 percent each year for the next 10 years or be GUARANTEED to make 10 percent each year for the next 10 years? Would you rather HYPOTHETICALLY not lose money in the market or be GUARANTEED to NEVER lose money in the market? Would you rather HYPOTHETICALLY never run out of money in retirement, or be GUARANTEED to NEVER run out of money in retirement, even if you live to age 100? Strategy #2: Financial Wisdom

57

If you don’t want guarantees, then this strategy may not be for you. Joseph worked in absolutes. There was zero room for error when it came to saving and investing during the time of abundance. The world would count on Joseph succeeding, which is why Joseph worked with guarantees. Do you? Problem #8: Not All Advisors Are Required To Act in Your Best Interests As I briefly mentioned before, VERY FEW financial advisors are what’s called a Certified Financial Fiduciary®. This designation is very special. This ensures that the agent acts in “good faith, care, and loyalty to the client’s best interest.” If, for whatever reason, the CFF® does not act with “good faith, care, and loyalty to the client’s best interest,” they can be stripped of this prestigious designation and essentially blackballed forever. Some advisors will say they are a “fiduciary,” but if they haven’t been certified, they are just like everyone else with a license. For this very reason, many financial planners will put everyone in the same small number of products regardless of the client’s unique situation. It’s a one-size-fits-all approach. Again, unless the financial expert is a Certified Financial Fiduciary®, they are not obligated to act in your best interest. Please keep this in mind. Problem #9: Treatment Based Upon How Much Money a Client Has Invested With Them I have a sad story to tell you. I will change the names to protect these individuals. Around 2008, when the global financial crisis had really started to hit hard, I had a friend (we will call him Bob) who was in the safe-money industry. He had met a client (let’s call her Julie) who had $250,000 invested in mutual 58

THE JOSEPH STRATEGY

funds. Julie was getting closer to retiring and wanted to protect her money from market losses, so she wanted to roll her portfolio into a safe-money product. When things started to get turbulent in the market, she reached out to her financial advisor and asked him to sell. However, she could not get ahold of him. Days went by. She repeatedly called, emailed, and even went into the branch, and her financial planner was nowhere to be found. Finally, after almost two weeks, she received an email from her financial advisor stating that he had liquidated her position and the check was in the mail to her. He then went on to tell her that he had been given orders from his upper management that they were to reach out to the clients with the most amount of money first and then work incrementally backward based upon portfolio size. Bob proceeded to tell me that from the time Julie requested to liquidate her position to the time it was executed was almost two weeks, and she lost over 20 percent of her $250,000 portfolio. Julie was at the bottom of the totem pole because she didn’t have very much money with that institution and, therefore, was not given the preferential treatment that the wealthier clients received. This is all too common in mainstream financial institutions that deal with “risk-based” investments. The bigger clients can “rock the boat” more than smaller clients; therefore, they are the No. 1 priority over the many with average or smaller portfolios. To me, this is immoral, but this is a sad reality in the investment world. Problem #10: Running Out of Money This has been stated somewhat before, but the last and probably most damaging problem that I find in Wall Street is that people OFTEN run out of money before running out of life.

Strategy #2: Financial Wisdom

59

According to the Employee Benefit Research Institute (EBRI) Retirement Security Projection Model, which was developed in 2003 and has been updated numerous times since, an estimated 40.6 percent of all U.S. households headed by someone aged 35 to 64 are projected to run short of money during retirement. This is based on a database of 27 million 401(k) participants and IRA account holders. Sadly, for those families likely to run out of cash, the shortfall isn’t small. Even taking into account Social Security benefits, the aggregate retirement deficit for households headed by someone aged 35 to 64 is $3.83 trillion. When looked at on an individual basis, the data becomes even more worrisome. In fact, EBRI projected average annual retirement savings shortfalls of $12,640 for widowers, $15,782 for widows, $24,905 for single men, and $62,127 for single women. Those who live the longest will also be far worse off, with Americans expected to live the longest facing 10.2 times the retirement deficit compared to retirees with the shortest projected lifespans. This data should be worrisome to everyone, because even if you’re not one of the four in 10 Americans who will have thousands too little in retirement funds, your friends and neighbors are likely among this cohort — and having millions of broke retirees across the country isn’t exactly good news for the economy.” The EBRI data clearly shows that Americans are woefully ill prepared for a secure retirement. Large-scale changes are needed, but unless and until those are forthcoming, individuals need to make sure they’re prioritizing their own retirement savings and finding ways to put cash aside for the future.

60

THE JOSEPH STRATEGY

If you don’t find a way to save, there’s a very serious likelihood you’ll be tens of thousands of dollars short annually of the retirement funds you need. (Jones 2019) One of the biggest reasons this is happening is that the institutions in which retirees are investing their money are fundamentally flawed when it comes to securing a lifetime income that they cannot outlive. When this problem gets solved, running out of money during retirement is no longer an issue. *** As I wrap up this chapter, I’ll ask you to remember the story of Joseph when it comes to not following the crowd. The other nations that did what everyone else was doing during the season of abundance lost all their money, homes, business, land, and even sold themselves. They were completely and utterly destitute because they followed along with what everyone else was doing. Don’t be Norwegian lemmings like the other nations. Be like Joseph, and don’t follow the crowd off the cliff! NOTE: At our financial firm, we approach the second strategy of “Financial Wisdom” by educating our clients about the how the “Silo Strategy” plays into their portfolio specifically. We make sure that our clients understand how the Silos work, what the benefits are, and how it will help them accomplish the problem they are trying to solve financially. This is accomplished during the second appointment at our firm.

Strategy #2: Financial Wisdom

61

Chapter 6 Strategy #3: Creating your ‘Silo’ Genesis 41: 33-36 (MSG): “So, Pharaoh needs to look for  a wise and experienced man and put him in charge of the country. Then Pharaoh needs to appoint managers throughout the country of Egypt to organize it during the years of plenty. Their job will be to collect all the food produced in the good years ahead and stockpile (in silos) the grain under Pharaoh’s authority, storing it in (the silos within) the towns for food. This grain (stored in silos) will be held back to be used later during the seven years of famine that are coming on Egypt. This way the country won’t be devastated by the famine” (Emphasis mine).

W

hen God gave Joseph the interpretation of Pharaoh’s dream, he also gave him a strategy. Joseph instantly knew what to do, and the advice given was so brilliant it promoted him all the way to second in charge of the most powerful nation in the known world at the time. The idea was to store 20 percent or one-fifth of all abundance during the seven good years and put the food, grain, and corn in granaries or silos. The purpose of the silo was to store the re-

sources until they were needed and then begin distributing them as needs arose. In other words, Joseph was given a divine strategy to save, defer, and then distribute when the time was right. This is a critical piece we have to understand in order to truly experience the power of this strategy. #1. Joseph Saved Joseph saved relentlessly. Even when it probably seemed like they had plenty for all of Egypt, he kept saving. Imagine if he had stopped and taken his foot off the gas pedal when he knew he had enough for all of Egypt for the upcoming seven-year famine. What would the other nations have done? They would have starved to death. Joseph did not become complacent. He was not lulled to sleep by abundance. He was disciplined and saved diligently. The strategy God gave Joseph was 20 percent of everything. I think there is some truth here. Saving 20 percent for your future is a really good benchmark to aim for. If you cannot save 20 percent of your income, at least save 10 percent of everything and set it aside where it is safe, growing, and ready for when you want to use it. The point here is that Joseph saved diligently and never stopped. #2. Joseph Put the Saved Resources in a Safe Place, AKA the Silos If the granary or silo had not been safe, it would have been raided in the first year of the famine. If the food had been susceptible to spoilage due to weather, pests, or thieves, the world would have starved to death.

Strategy #3: Creating your ‘Silo’

63

Joseph stored the food and resources in SAFE silos. He understood the fate of the nation depended upon protecting those resources. #3. The Silos Never Went Backward in Value — EVER Joseph put safeguards around the silos so that NONE of the saved resources would EVER be lost. In fact, the silos only grew in value year after year until the time was right to start distributing the precious resources or food. This is what is known as deferral. Joseph deferred accessing the goods until there was a need. Because the silos were safe, the value of resources stored in the silos continued to grow and grow, especially as the need grew. No thief, pest, or weather was able to steal away from the principal invested in the silos. #4. The Distribution Was More Than Enough for All the Needs When the seven years of abundance ended and the seven years of famine started, the distribution began. It lasted until the famine was over and there was no more need. When the other nations that had sold everything to Egypt were finally restored and able to support themselves again, there wasn’t a need to take from the silos any longer. Essentially, the silos did their job in distributing what was needed for the duration of the need. #5. E  gypt Used the Distribution From the Silos To Prosper Itself Even Further Because Egypt was able to count on the steady stream of resources from the silos, Egypt acquired gold, silver, livestock, land, et cetera from people who needed the resources. 64

THE JOSEPH STRATEGY

Basically, anything of value was able to be purchased from the silo distributions. Egypt was able to capitalize on bargains because they were set up strategically to afford to buy up everything of value. The steady stream of the silos prospered Egypt more than any other time in history. What is the best silo to invest in? OK, so here comes the punchline … What is the best modern-day investment silo to invest in that has the same characteristics as the silos in Egypt? Before I tell you what I believe, let me say … There can be a handful of good “silos” that you can invest in that will provide safety of principal, decent rates of return, and deferment of income until a specified time without fee or market loss. Some of these may include cash-value life insurance, real estate, or businesses. The problem with these, however, is that with cash-value life insurance, not everyone can qualify physically. With real estate, there are ebbs and flows in the market, and you can lose money. And with businesses, you really have to be an expert in your field to ensure profitability and success. All of these have merit — along with pros and cons. I believe in investing in all of these at some point down the road. Please read the next chapter for further information. But the one financial instrument that I believe resembles Joseph’s silos in Egypt almost identically is fixed index annuities — not variable annuities where you can lose money. Fixed index annuities, or FIAs for short, provide the greatest population of people (approaching or already retired) with the most competitive, safe, predictable type of ongoing, passive income on the market. The advantage to FIAs: Strategy #3: Creating your ‘Silo’

65

•• Your health doesn’t matter (for the cash-value life insurance silo) •• The real estate market doesn’t matter (for a real estate portfolio silo) •• Your business acumen doesn’t matter (for the business silo) With an FIA, any sick simpleton with savings can qualify! You don’t have to be sick or simple to qualify for an FIA, but even if you are, you can use it to create a silo without having to worry about being disqualified the way you might have been with other financial vehicles. Let’s look at the similarities between the fixed index annuities and Joseph’s silos. Joseph Saved/the FIA Is the Best Savings Vehicle The typical retiree or pre-retiree will save in a 401(k), IRA, 403(b), 457, savings account, or money market account, build it up to a substantial level, and then live on for the rest of their lives, primarily during retirement, hoping the money will not run out. There are many problems with this strategy: 1. Potential loss due to market volatility 2. Not earning enough interest to offset inflation (which ensures your money is rotting and is worth less and less over time) 3. Uncertainty about how long you are going to live (and whether you really have enough to live on when you factor in inflation, long-term care costs, low cost of living adjustments, et cetera)

66

THE JOSEPH STRATEGY

The beautiful part about rolling over all, or part, of your 401(k), IRA, 403(b), 457, savings account, or money market account into a fixed-index annuity is that, depending upon how the annuity is structured, it can pay you a consistent, steady stream of income each year, no matter how long you or your spouse lives. Now, you may be in a situation where you have a larger 401(k), IRA, 403(b), or money market account exposed to the risk of loss, fees, low rates of returns, no guarantees, et cetera. These types of accounts can be easily rolled over into a fixed index annuity, usually without any tax penalties depending on your age and specific situation. In almost every situation, especially if you are approaching retirement or already retired, an FIA is one of the safest, most competitive financial vehicles the average investor can qualify for. When it comes to saving for an uncertain future, the fixed index annuity is the closest thing to Joseph’s silo. In the following chapter, I will explain why the annuity should be the first thing purchased in order to use the passive revenue to purchase other tangible investments, such as stocks, precious metals, land, real estate, and businesses. Stay tuned! Joseph Put the Saved Resources in a SAFE Place (the Silos)/the Safest Place To Store Resources Is in an Annuity One of the safest places you could put your money in is an annuity owned by a large insurance company. In the Frequently Asked Questions portion of this chapter, I will explain in greater detail why insurance companies are the strongest institution you can invest in.

Strategy #3: Creating your ‘Silo’

67

An annuity is so safe because it is a CONTRACT. It is contractually GUARANTEED never to lose money, regardless of what the market does. The reason an annuity can guarantee your money will always be safe — regardless of what the market does — is because your money is never invested in the market. The interest you earn is based on what the market does, which is why you can never lose money. The insurance company takes your money and invests it into many different things, earning a safe return and paying you as the annuity owner based upon what the market does. The company keeps the difference. With an FIA, you are able to participate in the upside potential of the market without any of the downsides. I tell people all the time, “Zero is your hero!” If the market is crashing, the worst you do is zero. With a fixed index annuity, you can NEVER go backward — only forward. The insurance company is on the hook to ensure that your principal is protected. For example: In the banking world, for every 10 cents that a bank has in deposits, it can loan out $1.20$1.50. In other words, they can leverage the cash they have 1215 times over. On the other hand, insurance companies are very different. They are highly regulated, both at the federal and state level. For every dollar they have promised to an annuity holder, they are required to keep $1.04-$1.08 on hand in case of any emergency. They must invest the $1.04-$1.08 in safe things, such as cash and Treasury bills to ensure if there is ever a liquidity crunch, they have more than enough to pay out their obligations. According to Wikipedia.com, as of 2019, there were 5,177 different banks in America, and almost 1,150 have failed since 2008. On the other hand, according to the Insurance Informa68

THE JOSEPH STRATEGY

tion Institute, as of 2019, there were 5,965 different insurance companies in America, with ONLY six annuity companies failing since 2008! That is over 22% of banks failing since 2008 vs only .001% of annuity companies failing since 2008! Oh and by the way, ZERO A-rated annuity companies have failed since 2008. Think about that! Even still, there are safeguards to get your money back in case an annuity company fails. Similar to Federal Deposit Insurance Corp. (FDIC) insurance, each state has a fund to ensure annuities are paid up to a certain point in case an insurance company fails. See the FAQs at the end of this chapter for more information. There is a reason why large banks like Wells Fargo, Goldman Sachs, JPMorgan Chase, Bank of America, and Citigroup all invest their profits into insurance companies. Those banks are not stupid. They know that there is nothing more secure than insurance companies because of the strict regulations they must adhere to. Even well-known financial gurus (ask me in person and I’ll give you the details) whom everyone has probably heard of, who are vehemently opposed to annuities, have been caught investing tens of millions of their own companies’ dollars into annuity companies. They must believe it’s a safe investment that provides a good return even though they don’t recommend them to their millions of clients. Interesting, isn’t it…. Most insurance companies also have reinsurance to provide further consumer protection. Essentially, it’s insurance for the insurance company. If a specific insurance company is having a hard time paying out its obligations for any reason, the reinsurance company will step in and make good on the commitments to the individual annuity holders.

Strategy #3: Creating your ‘Silo’

69

In other words, there is not a more stable financial institution than an insurance company. In an Armageddon-type scenario, the insurance companies would be the “last institutions standing!” The Silos Never Went Backward in Value/FIAs Never Go Backward in Value This past October, I took my wife to Gatlinburg, Tennessee, in the Great Smoky Mountains for our anniversary. It was just the two of us, so we were feeling pretty adventuresome. One of Gatlinburg’s many attractions is these two-person rollercoasters that go down the many mountains overlooking the Smoky Mountains and the valley below. The appeal of these rides is that you can sit together and enjoy the experience as a couple. For the first three to four minutes, you keep going upward. Every few feet, you hear a “click.” Those clicks are the sound of your seat “locking in” the progress up the mountain. If, for whatever reason, the power that propels us forward and upward were to cease, the coaster would not go backward because our forward progress has been locked in. This is exactly how the “annual reset” works in fixed index annuities. Essentially, when the market goes up, you are locking in your forward progress or gains. If the power goes out and the market goes into a free fall, you don’t go backward because you have already locked in your gains. The following year it starts over. If the market goes up, you go up. If the market goes down, you are locked in place. Although you may not be going upward when the market is crashing, YOU WILL NOT GO BACKWARD — EVER. Remember, Joseph had ZERO losses in his silos. I’m sure most people would look at the incalculable amount of resources he had and say, “He can afford some loss!” But that wasn’t Joseph’s strategy. His strategy was zero losses — no going backward. With 70

THE JOSEPH STRATEGY

an FIA, this is a reality. The GUARANTEE of NEVER going backward is what FIAs provide. The Distribution Was More Than Enough for All the Needs/An FIA Can Provide All of Your Income Needs for the Rest of Your Life Because of Joseph’s shrewdness, he had more than Egypt needed to survive and, therefore, simultaneously saved the known world and enriched Egypt substantially in the process. Once the distribution started, the silos provided more than enough for everyone. So, too, can an FIA provide a distribution of income that can provide for all of the monthly bills and all of the desires. This capability comes through deferment. In the same way that Joseph held off for seven years before taking distributions from the silos, an FIA can be allowed to grow each year, turning on the income stream any time down the road. Some people want income right away. There are FIAs that offer income within 30 days of starting the contract. How much income one can get is determined by the starting purchase amount as well as the age of the owner, the age of the spouse (if it’s a joint annuity), and time-deferring payments. Some people liken an FIA to creating a lifetime pension. Pensions are very beneficial for retirement, yet very few companies offer them anymore because of the cost. Now, investors can create their own lifetime pension through a fixed index annuity. In July 2012, Time magazine published an article entitled, “Lifetime Income Stream Key to Retirement Happiness” that talked about how the No. 1 determining factor in happiness levels in retirees from ages 65-69 is having a steady stream of income to count on.

Strategy #3: Creating your ‘Silo’

71

Imagine how happy Joseph was, knowing that his shrewd preparation would save the world because there was more than enough for the famine. Imagine how you, preparing in the same practical way, could provide yourself with plenty of money to live on, invest, and generously give for the rest of your life. Egypt Used the Distribution From the Silos To Prosper Itself Even Further/You Can Use the Income From the FIAs To Grow Your Net Worth The smart thing to do is have MORE than you need coming in each month in retirement. This way, you can take that passive income and buy things, such as precious metals, land, real estate, and businesses. Joseph did this, and it is very important you don’t miss this: Joseph took the distributions and bought all the money — the gold, silver, and precious metals. He bought all the livestock (which in that day commonly represented businesses). He bought all the real estate. Notice, though, Joseph didn’t buy these things first (which is a big mistake that I see people making all the time due to bad information from the media or financial advisors). You see, buying precious metals, real estate, and businesses and investing in the stock market is great. But with all four, you can lose money because they are not insulated from risk. Your return is not guaranteed like it is with an FIA. If you buy these first and the value of them tanks for a few years, it can severely hurt you financially. Even if that’s not the case, it would have been better to use the starting money to create the silo or FIA rather than buying everything else — and THEN use the distributions from the silo to buy more assets, such as precious metals, real estate, stocks, and businesses.

72

THE JOSEPH STRATEGY

There is a place for silver and gold, real estate, and businesses in your portfolio. There may even be a place for stocks, bonds, and mutual funds. But these are things you should invest in after your silo is set up and paying you each month, no matter what happens to the economy. (Don’t forget it needs to be in this order; otherwise, you are exposed to the “famines” of the economies.) Now, some people may not have enough saved for retirement to buy a big enough annuity that provides them more than enough income to cover their bills AND still invest in other things. If this is you, then you DEFINITELY want to be very careful taking any of the money that you NEED for income and investing it in anything with risk. You cannot afford to lose one penny, and it is better to cover your bills for the rest of your life than to try to make up the difference by gambling in risk-based investments. Don’t gamble with your “seed!” The History of Annuities The annuity came into being around 222 A.D. and was initially referred to as “annua,” the Latin word for “annual.” As with today’s annuities, annua involved a buyer paying a lump sum to a seller who would later make annual payments to the buyer each year until the buyer passed, no matter how long the buyer lived. Back then, this concept was appealing to many as lifespans could vary widely. Another beneficiary of annua was the typical Roman soldier who received military service compensation in the form of annual payments or stipends. Militaries and governments would often continue this practice throughout the coming centuries. In 1759, pastors in Pennsylvania became the first-known Americans to receive annuities funded through congregants’ and Strategy #3: Creating your ‘Silo’

73

church leaders’ donations. Today’s widows and orphans funds originated from these types of annuities. Benjamin Franklin provides a great example of the potential longevity of an annuity. In his will, Franklin left annuities to two cities: Philadelphia and Boston. For over 200 years, up until the early 1990s, Franklin’s annuity to Boston continued paying and only stopped when the city opted to receive the remaining balance in a lump-sum distribution. The next big step America made toward annuities came in 1812 when a life insurance company in Pennsylvania began offering annuity contracts. Fast-forward half a century later, Union soldiers had the option of receiving compensation in the form of an annuity. In 1912, the Pennsylvania Company for Insurance on Lives began offering annuities on a broad scale to everyday Americans. Up until the Great Depression, annuity sales remained slow but steady. In the late 1930s, however, investors placed more trust in insurance companies than in banks. One of the more famous stories is that of baseball legend Babe Ruth who invested 100 percent of his savings into annuities. His famous quote is still true today: “I may take risks in life, but I will never risk my money. I use annuities, and I never have to worry about my money.” Franklin D. Roosevelt’s New Deal also placed great emphasis on savings, and the public responded. Even large corporations got involved, developing group annuities for pension plans available to employees. These early public annuity offerings offered tax-deferred status, fixed rates, and a guaranteed rate of return. Clients had two payment options: fixed income for life or payments through a specific number of years.

74

THE JOSEPH STRATEGY

Variable annuities arrived in 1952, allowing owners to choose their account type. In the late 1980s, indexed annuities offered even more diversity. Congress even promoted annuities with the 1982 Periodic Payment Settlement Act, which exempted structured settlement payments from taxes. Through the rest of the 20th century, annuities kept growing in complexity and competitive advantages. Annuities continue evolving today, with a diverse array of new available products and features, such as principal guarantees and long-term care benefits. Part of this increased popularity belongs to the expansion of institutions offering annuities. In addition to the original insurance agents, banks and brokerage houses joined the field in offering the guarantees that annuities offer. Even with all of the changes, today’s annuities are easy to recognize as the descendants of those annuities from 1,800 years ago. Life Insurance Marketing and Research Association, an independent service that tracks the insurance industry, reported that fixed and variable annuity sales amounted to $98.5 billion in 1995. By 1999, that figure had ballooned to $155 billion. Today, annuities are as popular as ever, with annual annuity sales estimated to be over $200 billion per year as of this book’s writing. Very soon, that number is estimated to surpass $500 billion. Investors are looking to insulate themselves against increasing market volatility, high inflation, and lack of principal protection within the investment world. To date, millions of retirement-minded investors have been able to use the annuity structure to their advantage. Why the Rich Entrust Their Wealth to Insurance Companies When it comes to wealthy individuals, I have noticed a strange phenomenon. Wealthy individuals MADE their wealth by taking risks and working hard. By stark contrast, however, wealthy indiStrategy #3: Creating your ‘Silo’

75

viduals KEEP their wealth by taking little risk with their money and ensuring IT (their money) is working hard. The wealthy take risks to get the money but protect it once obtained. This is never truer than when one is approaching retirement, a change in career or calling, or even when a family dynamic has changed, as in the example of the death of a loved one or a divorce. Why do the wealthy entrust their hard-earned money to the insurance companies? The following are numerous reasons: The Ideal Financial Strategy for a Wealthy Investor: •• Protection from market crashes •• Decent rate of return •• Tax-deferred growth •• Death benefit •• Access to money •• Chronic/terminal illness protection •• Inflation protection •• Lower fees With an Annuity, Wealthy Investors Receive: •• Protection against market downturn (annuity gains locked in). •• Average returns of 7-8 percent (sometimes even higher depending on the annuity product). •• Tax-deferred growth. •• The ability for unused money to go to beneficiaries as a probate-free death benefit. 76

THE JOSEPH STRATEGY

•• Access to money as soon as 30 days (depending upon the product’s features). •• Penalty-free access to 100 percent of your money in the event of a chronic or terminal illness, as well as payments that double in the instance of a long-term care event (product dependent). •• Growth that often double inflation. •• No fees (product dependent). It is like a match made in heaven for wealthy investors! They are VERY smart and didn’t get to where they are at by gambling over and over. Once a wealthy investor has obtained a sizable nest egg, they always want to protect their portfolio, especially the amount that they would never want to “drop below.” Ask any wealthy individual the following: “Out of your entire portfolio, what is the amount that you would never want to drop below in the event of a market crash?” Usually, that’s the amount they invest in the safe annuity. All other monies can be exposed to more risk because the wealthy individual can afford to lose it and still be OK financially. It’s no wonder athletes like Babe Ruth and Shaq invested large portions of their income into annuities that provided them guarantees. Babe Ruth was one of the few highly paid athletes who didn’t lose a penny during the Great Depression because he invested in annuities. Shaq’s money manager made Shaq invest millions into annuities each year and now Shaq will make millions for the rest of his life, even if he loses all of his other riskier investments. These are only two examples of professional athletes who have pursued the guarantees of annuities and benefited greatly because of it. There are dozens more stories just like theirs. Strategy #3: Creating your ‘Silo’

77

Babe Ruth and Shaq both implemented “The Silo Strategy” into their own portfolio. Will you?

Frequently Asked Questions About Annuities What is an annuity? Annuities are contracts issued by an insurance company in exchange for either a lump sum or monthly payments. These contracts provide guaranteed income for a specific time period. Often, annuities are issued to help people avoid the risk of outliving their income and last the annuitant’s lifetime. What are the types of annuities? In the 21st century, annuities have evolved considerably. Insurers have developed a wide variety of annuity products that address specific issues, such as long-term care, growth, and income. However, all these customized products are built around one of two basic categories: “immediate” or “deferred.” If you choose the immediate annuity option, you will receive payments as soon as you make your initial investment. Many people select immediate annuities as they get close to retirement age. On the other hand, a deferred annuity is invested for a specific period of time until you are ready to begin taking withdrawals. Both deferred and immediate annuities are available as either fixed, fixed-indexed, or variable.

78

THE JOSEPH STRATEGY

Why should I trust an insurance company with my money? Insurance products are safe and secure places in which to place your money. That’s because insurance companies are among the most highly regulated companies in the financial world. Insurers are legally required to keep minimum reserves on hand so that claims are paid in a timely manner. They cannot afford to take on investments that might put their reserves at risk. Building reserves requires that insurance companies be exceptionally risk averse, efficient, and profitable. Insurance companies utilize complex algorithms and thorough underwriting practices to improve their ability to predict outcomes and deliver high value to their customers and shareholders. How safe is my money with an insurance company? Insurance companies tend to be extremely safe. In fact, many experts believe them to be far safer than banks. Unlike banks, which operate according to a principle known as “fractional reserves,” insurance companies are required to hold AT LEAST, dollar for dollar, everything they have contracted with you. Banks, on the other hand, are allowed to have only a fraction of the cash deposited actually on hand. This is why when too many people demand their money from the banks at once, it can cause a banking collapse. Since the recession of 2008, over 1,150 banks have gone broke, while ZERO A-Rated Annuity companies have failed. Insurance companies truly are the last institutions standing during a major economic downturn. Why is an annuity contract better? Having a contract, such as an annuity contract, is very beneficial because it legally binds an insurance company to provide GUARANTEED periodic payments to the annuitant once that Strategy #3: Creating your ‘Silo’

79

annuitant reaches the agreed-upon age and requests that payment starts. This is, in essence, a guarantee that there will be a stream of income at retirement. Are insurance companies FDIC insured? The Federal Deposit Insurance Corporation provides coverage for checking and savings accounts at FDIC-insured banks. Life insurance and annuity products are not covered, even if sold by an FDIC member bank. However, since insurance companies are regulated primarily by the states, they have other types of protection in place in case of insolvency. One important protection comes from the National Organization of Life and Health Insurance Guaranty Associations. This organization provides a safety net for annuity and life insurance customers by getting them continued coverage if a company becomes insolvent, which is uncommon in the insurance industry. One reason is the continuous monitoring of insurance carriers by state regulators, including state insurance commissioners. State regulators are tasked with spotting problem companies and taking the necessary steps to help troubled companies regain their financial footing. In the rare instance when the state insurance department cannot restore a company, they declare the company insolvent and take control of the operations. In the event of an insolvency, state regulators pay policyholders before paying other creditors. How does an insurance company make money on a fixed annuity? In the case of traditional fixed annuities, insurance companies use premiums received to invest elsewhere. Insurance companies set the rates paid to their investors to ensure they profit after covering their general expenses. An insurance company uses 100 percent of the money invested in a fixed annuity to invest in fi80

THE JOSEPH STRATEGY

nancial vehicles, such as mortgage-backed securities, bonds, and other traditional investments. The largest portion of the yield from those investments is credited to the owner of the annuity contract. What are the tax benefits of annuities? If you purchase an annuity using PRETAX money, from a Traditional IRA or Traditional 401(k) for example, payments from that annuity are fully taxable as income. However, if you use AFTER-TAX money, from a non-qualified asset source for example, you only have to pay tax on the earnings. If you purchased an annuity with a Roth 401(k) or Roth IRA, distributions and growth is completely tax free as long as you meet some specific requirements on your age and how long you have had the Roth account for. One of the best things about owning annuities is the tax advantages they offer. Annuities allow investments to grow tax free until the funds are withdrawn. This includes taxes on dividends, interest, and capital gains, which may be reinvested as long as they remain in the annuity. Do I need long-term care coverage? In a 2019 report, The Wall Street Journal examined the odds of a person requiring long-term care and determined that: •• About 7 in 10 people will need some type of long-term care services at some point. •• Typically, women need care for a longer period (3.7 years, on average) than men (2.2 years). •• The average nursing home stay is 835 days. •• A nursing home stay costs over $225 a day for a semiprivate room. Strategy #3: Creating your ‘Silo’

81

These alarming statistics have caused many Americans to consider purchasing long-term care (LTC) insurance in order to avoid running out of retirement money. Unfortunately, premiums for LTC have risen sharply in the last few years, reflecting the realities of an aging demographic. Also, traditional long-term care is a “use-it-or-lose-it” proposition. Theoretically, a person could spend hundreds of thousands of dollars paying LTC premiums and never use their coverage. Also, some plans have the possibility of increased premiums. One LTC insurer was increasing premiums by 80 percent once the policyholder reached a certain age! If you are concerned about long-term care costs devastating your retirement plans but have reservations about buying expensive LTC insurance, you are in luck. A number of specialized LTC products and hybrids have recently appeared in the marketplace. These products allow you to combine LTC benefits with annuities to offset some of the downsides of LTC insurance. If you wind up never needing the LTC coverage, you won’t walk away empty-handed as you do with a traditional LTC policy. Instead, you end up with an annuity product that you can tap into for cash or leave for a beneficiary to collect when you die. Why should I deal with a Certified Financial Fiduciary®? A Certified Financial Fiduciary® is ethically bound to put another person’s best interests before their own. In financial services, a CFF® can be an independent advisor who works with assets under management for a fee rather than receiving commissions. They can also be independent representatives who receive both management fees and some limited commissions but who agree to adhere to fiduciary standards in their practices. Choosing a CFF® as a financial advisor gives you greater assurance that you will get the best advice. A CFF® is committed 82

THE JOSEPH STRATEGY

to working strictly on your behalf and selecting the most suitable products to meet your objectives. Fiduciaries must disclose all material facts, make an effort to avoid conflicts of interest, control investment costs, act with good judgment, and serve the client’s best interests at all times. Advisors who are only licensed as sales representatives work on a lower legal standard of suitability and advice accountability. Nonfiduciaries do not have to disclose potential conflicts of interest, nor must they disclose that there may be other products to which they do not have access that would be better suited to your needs. What do financial advisors say about annuities? Financial advisors, primarily those specializing in the accumulation phase of financial life, tend to discount the use of annuity products in their clients’ portfolios. One of their main complaints is that annuities are “bad investments.” This indicates not so much frustration with the products themselves but with how these vehicles are being marketed. However, when looked at through the lens of preserving, protecting, and growing a person’s cash, annuity products are a strong addition to any portfolio. Another quibble that growth-focused financial advisors have with annuities is that they claim annuities barely keep up with inflation. They tell their clients that although it’s true, they’ll have security and protection of principle with an annuity; they won’t get the growth they need to have enough money in retirement. This may be true of some annuities, but definitely not for the majority of annuities available today. What nonspecialists fail to understand is that there are many different types of annuities, many with no fees and having great return rates and greater liquidity. Anyone looking into annuities Strategy #3: Creating your ‘Silo’

83

should partner with an expert who thoroughly understands the product and knows what these contracts DO and DO NOT DO. Do annuities charge fees? Fixed-rate annuities do not charge annual fees. However, there are surrender charges if you take money out of the annuity before the term is up. Surrender charge periods range from two to 10 years. In addition, if you are under age 59 1/2 and need to pull out your contributions, you will be penalized 10 percent by the IRS, plus another five to 10 percent for a surrender fee. Higher quality annuity products have declining surrender fees which drop to a lower percent the longer you hold the annuity. Many will also allow you to withdraw as much as 15 percent for emergencies without penalties. In the event of a chronic or terminal illness, many annuity companies allow you to withdraw up to 100 percent after the first year without any surrender charges. Variable annuities, on the other hand, have several fees of which you should be aware. These fees include: the annuity account fee, mortality expense, guaranteed income rider fees, and agent commissions, just to name a few. I am not a fan of variable annuities at all. Before entering into any annuity contract, it is important to sit down with your trusted advisor and get the bottom line on the fees you will incur over the lifetime of the contract. What should I look for in an insurance company/ advisor? When selecting an advisor, you should do your due diligence. You need to spend some time discovering more about the advisor and their background.

84

THE JOSEPH STRATEGY

Googling an agent is a good place to start. Your search should uncover a verifiable internet presence, including a professional website, social media, videos, and other media. Your potential advisor may also have published articles, press releases, podcasts, and digital presentations that will give you insights into their practice. Another thing you want to discover is whether the advisor is an independent or “captive” agent. A captive agent is hired by a particular company to market its products. Independent agents or advisors work on behalf of the insured — not a company — and are usually preferable to captives. Find out whether your agent or advisor has the technical knowledge and credentials necessary to provide you with the best advice. You could review an agent’s profile on LinkedIn to discover more about their background. Professional designations, such as CFF®, are indications that an agent has invested in advanced education and training and committed themselves to higher ethical standards. Most of all, you need to meet your advisor, either in person or in a live online session, to be sure that their personality meshes well with your own. A good advisor is critical to your financial success, so you want someone who is pleasant, easy to work with, and has a genuine passion for helping their clients reach their goals. NOTE: Our financial firm handles “The Silo Strategy” in the second appointment, after the education has been gone through and the client understands how “The Silo Strategy” works for them spe85

cifically. At this point, at the second appointment, after the client has been given an income plan and gone over any questions they may have, the client would move forward with implementing the Silo Strategy.

86

THE JOSEPH STRATEGY

Strategy #3: Creating your ‘Silo’

87

Chapter 7 Strategy #4. Use the Silos’  Distributions to Build Your Wealth Genesis 47:16-20: Joseph said, “Bring your livestock. I’ll trade you food for livestock since your money’s run out.” So they brought Joseph their livestock. He traded them food for their horses, sheep, cattle, and donkeys. He got them through that year in exchange for all their livestock. When that year was over, the next year rolled around, and they were back, saying, “Master, it’s no secret to you that we’re broke: our money’s gone and we’ve traded you all our livestock. We’ve nothing left to barter with but our bodies and our farms. What use are our bodies and our land if we stand here and starve to death right in front of you? Trade us food for our bodies and our land. We’ll be slaves to Pharaoh and give up our land — all we ask is seed for survival, just enough to live on and keep the farms alive.” So, Joseph bought up all the farms in Egypt for Pharaoh.

Every Egyptian sold his land — the famine was that bad. That’s how Pharaoh ended up owning all the land. Don’t be lulled to sleep by abundance. If done out of order, this fundamental strategy of using silos to build your wealth can lead to the same financial catastrophe that the people of Egypt and the world’s nations experienced because they were ill prepared for the famine. I see a lot of people put ALL their money FIRST into gold, silver, precious metals, real estate, and businesses. (I would categorize businesses not just as tangible businesses but also stocks, bonds, or mutual funds. After all, when you are buying equities, you are buying portions of companies.) They don’t create their silo first. They skip to everything else that they think has greater upside potential than a safe-money silo. Don’t fall for the trap! The ill-prepared people of Egypt DID THE SAME THING and lost it all because they did not have anything saved and hadn’t invested in silos that would pay them each month during the famine. They had their money invested in the fourth strategy without taking care of the third strategy FIRST. If Joseph had skipped step three (building a massive number of silos), everyone would have died. Even though the Egyptians had all the precious metals, livestock (businesses), and land they could want, it didn’t help them in the long run during the famine. Merriam-Webster defines famine as “an extreme shortage of food” and “a great shortage.” I want you to catch this; we WILL have seasons of abundance and seasons of shortage in our lives. Some seasons of shortage are self-inflicted. Retirement is a really good example of a self-inflicted “famine” or shortage. You may have been making $200,000 a Strategy #4. Use the Silos’  Distributions to Build Your Wealth

89

year your whole working life, but as soon as you retire, what do you have in place to replace the lost income? Only Social Security and your IRA and 401(k)s? Do you have any silos in place? Or is it all tied up in potentially volatile investments, such as gold, silver, precious metals, real estate, or businesses (stocks, bonds, or mutual funds)? WARNING: When you are in a season of abundance, this is the HARDEST time to create your silo, because you think the season of abundance will NEVER end. But it always does. And whether or not you were able to wake yourself up from the seductive lull of abundance that so easily traps people and go on to create your silo will determine how you fare during the season of famine. It’s important, especially for Americans, not to be deceived into thinking that the market will ALWAYS go up. There are nations in the world whose market has been stagnant for decades. Don’t think it can’t happen to America. With all of the spending we are doing and the debt we are creating, our markets are as fragile as ever. One more war, pandemic, or terrible governmental decision could send our markets into a free fall. And it could stay there for decades. Now, what if all your money is in stocks, bonds, or mutual funds? What if you have to take required minimum distributions each year in a down market? This is how people run out of money during retirement and end up losing everything (many times dying on a Medicaid bed, having had all of their assets seized by the state to cover the costs of long-term care). I’ve seen it countless times, and it breaks my heart! I will say this again for emphasis! You CANNOT skip step three, especially if the “famine” of retirement is less than 10 years away. 90

THE JOSEPH STRATEGY

Some of you may be in the “famine” of retirement now but don’t have step three taken care of. There is not a moment to lose! Take care of creating your silo before a real economic famine strikes! The Great Opportunity Did you know that more millionaires and billionaires are made in times of famine than in times of abundance? When everyone is losing everything because they didn’t have step three taken care of, it creates a tremendous buying opportunity to purchase things at a steep discount. When you have the freedom and opportunity that distributions from a silo afford you, achieving two, three, or even five times your net worth is possible in just a few short years. This is why it is so important not JUST to have your bills taken care of from the distribution of a silo but also to have EXTRA resources left over to be able to swoop up assets at a discount. When the foundations of a person’s financial needs are met, anything above and beyond that is coming in monthly SHOULD be used to buy more assets. This is when you would buy the precious metals, real estate, and businesses or equities in the market. The beautiful thing about this part of someone’s portfolio is THEY CAN AFFORD TO LOSE IT. However, there still is great upside potential to owning these types of riskier asset classes. There still is great value in them. If there wasn’t any value in any of these things, then why would Joseph have given precious distributions from the silos IN EXCHANGE for these assets? Joseph and Egypt’s needs were covered from the abundance stored in the silos; therefore, he could use the extra resources he didn’t need to keep the world alive AND buy the “riskier” investments. This book is not one that goes into great detail about the types of precious metals to buy, the kinds of real estate markets you Strategy #4. Use the Silos’  Distributions to Build Your Wealth

91

should invest in, or even what stocks to purchase. That is for another book. The point of this chapter is that by being prepared and creating your silo to provide more than enough for your bills, you should have leftover resources to buy the “riskier” investments. Because Joseph was prepared and because the silos had more than enough to cover the needs of the known world, Joseph capitalized on the situation and made Egypt the wealthiest nation in the world at the time. The abundance that Egypt realized was unparalleled to any nation before it. And it happened FAST. It can happen fast for you too! You can wake up a few years from now having to pinch yourself because you never thought you would achieve the financial abundance you are now enjoying in a million years! Have you heard about the parable of the Chinese bamboo tree? Matt Morris so brilliantly shares a timeless truth on his website: Like any plant, to grow a Chinese bamboo tree requires nurturing — water, fertile soil, and sunshine. In its first year, we see no visible signs of activity. In the second year, again, no growth above the soil. The third, the fourth, still nothing. Our patience is tested, and we begin to wonder if our efforts (caring, water, et cetera) will ever be rewarded. And finally, in the fifth year — behold, a miracle! We experience growth. And what growth it is! The Chinese bamboo tree grows 80 feet in just six weeks! But let’s be serious, does the Chinese bamboo tree really grow 80 feet in six weeks? Did the Chinese bamboo tree lie dormant for four years only to grow exponentially in the fifth? Or was the little tree growing underground, developing a root system strong enough to support its potential for outward growth in the fifth year and beyond? The answer is, of

92

THE JOSEPH STRATEGY

course, obvious. Had the tree not developed a strong, unseen foundation, it could not have sustained its life as it grew. The same principle is true for investing. People who patiently save in order to get their silos funded, building strong character while overcoming adversity and challenges along the way, grow the strong internal foundation to handle excess wealth when it comes, while “get-rich-quickers” usually are unable to sustain sudden wealth. The Chinese bamboo tree is a perfect parable to our own journey in disciplining ourselves to take care of our silos FIRST, investing in the riskier investments afterward. It is never easy and is slow to show any progress. It’s frustrating and seems unrewarding at times. But it is sooooo worth it — especially if we can be patient and persistent to truly see these strategies come to fruition. When to Stop Buying Silos Strategy four is really important! Notice that Joseph did not use his silos to build more silos. Once you have enough income to cover your bills and leftover income to invest in other asset classes, you no longer need to add any more fixed index annuities to your portfolio. You are already insulated from any future famines and are more than ready to capitalize on them should they arise. At this point, you have successfully implemented four out of the five world-changing financial strategies from the greatest financial planner who ever lived. But you CANNOT skip the final strategy … NOTE: Our financial firm handles the fourth strategy of “Using the Silos Distributions to Build Your Wealth” during the third appointment, when applicable.

Strategy #4. Use the Silos’  Distributions to Build Your Wealth

93

Chapter 8 Strategy #5: World-Changing Generosity

E

gyptian history tells us that three to four years after the famine  ended, Joseph released one of the most extraordinary acts of generosity, literally changing the world.

You see, during the famine, all of Egypt and the rest of the known world had sold everything it had — gold and silver, livestock (businesses), land (real estate) — in exchange for distributions from Joseph’s silos. People even sold themselves into Joseph’s care. In his wisdom, Joseph knew that in order for the world to thrive and everyone to prosper, he needed the world to get back on its feet economically. But he needed to ensure the world didn’t repeat the same mistakes that got them in that financial pickle in the first place. So how did he do that? Joseph, who now owned everything, leased the land back to the people who previously lived on it. He gave them seeds to begin farming again. And check this out: He only charged a 20 percent tax in return from their crop. Think about that! He let the previously financially ignorant individuals get a second chance to learn how economics works. Most people miss that Joseph required a 20 percent tax on everything during the times of abundance to store up food within the silos. Fast-forward a decade, and Joseph teaches the same

people who didn’t implement his wisdom the first time that you have to save 20 percent as a tax. In times of abundance, the 20 percent savings would be used for the silo. In times of famine, the 20 percent held back would be as a tax to teach them financial literacy. Keep in mind: Joseph is letting people use his land, his animals, and his seed and allowing them to keep 80 percent to begin to establish independence once again. He knows nations prosper when they buy and sell to each other in a capitalistic way. If Egypt had absorbed all of these other nations as each collapsed, it would have had to absorb the cost and responsibility of keeping everyone alive. It is smarter to get them back on their feet again and help them become independent once more. But Joseph takes it one step further. History tells us that three to four years after the famine had ended and the people had faithfully been farming Joseph’s land, he could see that those who were previously financially ignorant had learned their lesson. They were becoming wise with what they had and were on their way to being better managers (Strategy #1) and learning what to do and what not to do with their resources (Strategy #2). It was at this point that Joseph went to Pharaoh and negotiated debt forgiveness and land restoration for the people. Pharaoh happily obliged, as Egypt had come out on the other side of the famine a VERY wealthy country — far wealthier than Pharaoh could have imagined going into the famine. Joseph understood that God had given him wisdom — not just to save the world but to teach it how to prepare and prosper during famines. Joseph’s strategies allowed the world to continue and are an excellent lesson to show us the real purpose of money. But we cannot brush past this last strategy.

Strategy #5: World-Changing Generosity

95

Joseph gave back the people’s land, even though he had bought it fair and square when the people desperately needed to sell it. He gave back the land, let the people go free, and allowed them to keep what they earned moving forward. This is an EXTREME, WORLD-CHANGING act of generosity, the kind that LITERALLY shapes nations! This is Joseph’s fifth strategy. When you follow strategies one through four in order, you WILL have opportunities to give back, whether it’s through an organization that helps widows and orphans or one that assists wounded veterans; the point is you will be in a position to bless others. The resources you and I accumulate are not just about us building our own empire. It’s about helping people. Our generosity can save lives, teach people how to prosper and thrive, and even shape nations for good! It’s not about the percentage you give but the generosity coming from within your heart. In my opinion, there is nothing more gratifying than being able to help less fortunate people — especially those in other countries where there is extreme poverty — receive the care, nutrition, training, protection, and encouragement they wouldn’t otherwise receive. To be able to look back at the end of your life knowing that potentially millions of people were directly or indirectly impacted by your generosity is the greatest trophy you could ever receive. The greatest honor. The greatest privilege! Anyone who follows steps one through four WILL be financially successful to some degree. But if they stop at Strategy #4 and don’t implement Strategy #5, they will be depressed and confused, pondering what life is all about as they sit on top of their growing financial fortress. True success is learning how to make money, keep money, grow money, and THEN USE YOUR MONEY TO HELP OTHERS. Many people, unfortunately, stop short and wonder 96

THE JOSEPH STRATEGY

why it never feels like there is “closure” on their life’s purpose and accomplishments. It’s like eating a drumstick ice cream bar and getting all the way to the bottom part filled with chocolate and then throwing that best piece in the trash. It ruins the whole experience! I believe we were created for generosity. I believe that God so loved this world that he GAVE his only son Jesus to rescue me, a lost son. He saw my potential, my created value, and chose to give everything to restore me to my original created value as a son in right standing with the Heavenly Father. It cost him everything! What an incredible example of generosity God modeled for us. We were made in his image, and I believe we are to follow in his footsteps. Sure, you can buy the Ferrari or purchase the boat you’ve wanted to get. Go on that vacation! Enjoy the fruits of your labor without ANY shame! You were wise, worked hard, followed the strategy, created the silo, and used the silo to buy more assets, so enjoy the fruit of your wisdom! But don’t forget to be generous. Without generosity, there WILL be a sense of meaninglessness in your life. After all, it was Jesus who said, “What does it profit a man if he gains the whole world but loses his soul?” Jesus did not say, “Don’t gain the world,” but told us not to lose our soul as we obtain the world and its possessions, which is a big difference. Imagine with me for one moment that you are approaching the end of your life. Think about how fulfilling it would be to KNOW that your family will be taken care of financially because of your diligence in applying these five world-changing strategies. You have decades’ worth of the most incredible memories with your beloved family: taking exotic vacations whenever you desired; pursuing your hobbies to the fullest; enjoying alone time with your spouse; and pouring into your children and grandchildren’s lives. You saw sporting events together. You surprised her

Strategy #5: World-Changing Generosity

97

with the spur-of-the-moment trip to Paris. You bought him the new truck for Christmas. Now, imagine the fulfillment you’ll have when you can look back over your life and think about the tens of thousands of starving children fed in Cambodia because of you; the hundreds of kids who received an education in Pakistan because of your generosity; or the countless veterans who received the emotional and financial support they deserve after a life-changing event overseas. Picture how special it will be to scan across your full life without regret. Sure, you made mistakes. And you may wish you could have done a few things differently if you had to go back. But you wouldn’t change it for anything. You had a FULL life. You get to pass on the baton confidently to the next generation, knowing they will run well. After all, you perfectly modeled the way the race was supposed to be run. Sure, you may have got off to a late start. But it’s not about how you start in life, my friend; it’s how you finish. Finish well, my friend. The world is counting on you! NOTE: Our financial firm believes that everyone should be positioned to give generously, if they so choose. This is not a requirement by any means. However, we do have many organizations that we believe in supporting, and are happy to share this information at the request of our clients. This would be discussed, only if asked, during the second or third appointment.

98

THE JOSEPH STRATEGY

99

Chapter 9 The Day the Breadwinner Died: My Family’s Story

I

t was July 1, 2009, just another Wednesday as far as I was concerned. I was working at the bank doing my normal opening procedures with my fellow bankers. There was nothing out of the ordinary about this particular day. I received a phone call and voicemail from my mom updating me on Dad’s latest developments in trying to jerry-rig his “new” 1979 trailer in time for our Fourth of July camping trip. As I checked my phone, I saw my mom’s name come up and assumed she was updating me on things for the vacation. I decided that it could wait until my break before returning her phone call and continued on with my routine. Then I received another phone call and voicemail from mom. It isn’t like her to call twice and leave a voicemail. I excused myself to listen. As soon as I heard the sound of my mom crying, I knew something was wrong. I immediately called the house phone. My 15-year-old sister picked up and, in between sobs, uttered the words I will never forget as long as I live. “Dad’s dead.” Instantly, I went into shock. What! How is Dad dead? What happened? Are you sure? I’m not really sure what my sister said after the barrage of questions I hailed at her, but I assured her I was on my way. I left work and raced the normally 20-minute drive from Roseville, California, to Auburn, California, where my parents lived.

I remember all the thoughts racing through my head during those 10-15 minutes of silence like it was yesterday: our last fishing trip two weeks before for Father’s Day when I took him to my secret spot and “slayed” the trout; all the times we had gotten into fights as I was growing up; and all our camping adventures. Could he really be gone? I thought about my younger brother and sister still at home and about my future children who would never get to meet him, at least not in this life. A million thoughts and questions spun out of control. When I finally blew through the last stop sign and pulled up to the home I grew up in, I was shocked to find multiple police and ambulance vehicles with lights on out front. I jumped over the planter row and plowed through the open front door to find a sheriff with his head down, avoiding eye contact. As I made my way to the open back door, the sound of my mom and sister crying greeted me before stepping into the backyard. Dad was lying on a stretcher; he was pale. I stared at him for a long time in disbelief. Somehow, I didn’t cry. I didn’t break down for a while. The responsibility to be strong landed on my shoulders. It wasn’t until later that the shock wore off, and I lost it. My dad was gone. In the days that followed, my family was left picking up the pieces and trying to evaluate what to do next. My mom was mourning the loss of her best friend; We kids were mourning the loss of our dad. It was horrible. To make matters worse, my mom had no money. My dad had been accustomed to making six figures in the computer industry. His last employment stint was with IBM, but he had been laid off 18 months earlier and spent all the savings just getting by during his quest for employment. By the grace of God, my mom had two term-life insurance products that were over a decade old, which definitely was a lifesaver, but they weren’t worth millions of dollars.

The Day the Breadwinner Died: My Family’s Story

101

Then came the next challenge — living expenses. My dad had been the primary breadwinner. My mom hadn’t worked in 20 years; she had been raising three kids. My dad made enough money (and then some) until he lost his job. What was my mom to do? She received a little more than $400,000 in life insurance proceeds. Should she use that money to live, with a $400,000 mortgage hanging over her head? Or does she pay the house off free and clear and have nothing to live on? My grandma ended up moving in to help make the house payments. It was a rough situation all around. My mother’s situation is one that I see almost every day. A lot of times, it’s actually worse. At least my mom got something when my dad died. But it definitely wasn’t going to last long. My family had been used to living on $100,000 plus a year! At that rate, they would have four to six years of living expenses depending on how much they tightened up their budget. What about retirement? Would my mom have to go back to work while raising the kids? Would she have to go further into debt to go back to college? She hadn’t worked in 20 years. What happens when my grandma passes and the subsidizing ends? What if my mom has to sell the house quickly and lose potential equity? What if my mom gets sick? Will she have to pay out of pocket and completely deplete any resources she has? As the oldest, I felt totally responsible. I was on my own, married, and had a good job in the financial industry. I knew I needed to help my mother leverage any money she had to provide in the long run. But how? What if I make a mistake? What if I lose some of her money? Or all of her money? How can I help my mom retire with more than just her dignity?

102

THE JOSEPH STRATEGY

The Good News Fast-forward to today. As I look back and write this book over a decade after my dad’s death, I am blown away at how God uses all things for good, even really terrible things. You see, my dad died way too soon. Hands down. But if he hadn’t died, my mom and thousands of clients my company has had the honor and privilege of serving would not be experiencing peace of mind knowing they are FULLY PROTECTED and can retire with more than just their dignity. My clients KNOW they won’t be leaving any financial burdens to their loved ones. Their next of kin won’t have to push any humiliating crowdfunding websites begging for 20 bucks. No bake sales. No carwashes. No going bankrupt over a chronic illness or long-term care situation. No withdrawing a yearly 4 percent from whatever nest egg they managed to scrape together, hoping they don’t outlive their money. No wondering if it’s better to die sooner rather than later because, frankly, they can’t afford to live any longer. No counting on Social Security to be their main source of income. No more living in fear or asking, “What if?” In my mom’s case, however, I had to go on a quest. I was already in the financial industry. I planned to become a financial advisor until I lived through the 2008 financial crisis while working at a well-known bank. When I saw our local financial advisor running around like a chicken with his head cut off, trying to explain to his clients why their portfolio was down 40 percent, I realized I don’t want to lose people’s money — not one cent! It was all a setup for what was coming! I’m pleased to say that today, my mom’s “silos” pay her over $70,000 a year (including Social Security). That money will come in EVERY YEAR, no matter how long she lives. It doesn’t matter if the market goes up 50 percent or down 50 percent. Her longterm care is taken care of in spite of a health condition she has. The Day the Breadwinner Died: My Family’s Story

103

My mom doesn’t have to be another casualty of the health care system bleeding her dry because she has assets above the federal poverty line and ending up having to deplete any resources she has before the government steps in and starts paying. She doesn’t have to join the ever-increasing group filing for bankruptcy in their old age. My mom doesn’t have to worry about her children getting the run around when it’s time for her to go to heaven and the remaining assets to be passed on. My mom never had to go back to work. She never had to fulfill any college courses. She is living the dream now. She is living life on her own terms! I helped my mom manage what assets she had with excellence (Strategy #1), personally discovering and recommending the best financial strategies to pursue, as well as the strategies to avoid (Strategy #2). We then created her silos using multiple fixed index annuities that now pay her each month for the rest of her life (Strategy #3). She is taking the excess and investing in real estate (Strategy #4). My mom is able to enjoy her money while being generous to her church and charities of her choice (Strategy #5). Even if she lives to 100, there will be more than enough left over to leave an inheritance to her three children. It’s The Joseph Strategy lived out beautifully! I hope my mom’s story encourages you to see that even in the midst of a tragedy, if you follow these five sound financial strategies, you can change not just your own financial trajectory but your family’s trajectory for generations to come. Do yourself a favor and execute these five strategies. After all, when Joseph implemented them, not only did it save his nation and enrich his own life, but it saved the world!

104

THE JOSEPH STRATEGY

105

About the Author Around 2015, Andrew started Legacy Builders Wealth Management with a mission: “To solve all the problems in the financial industry. To put the client first and provide the guarantees that most retirees and pre-retirees were looking for.” The company took off like a rocket! Andrew didn’t really understand how big of a need it really was to provide safe retirement products. Within seven months, the company was valued at over $20 million, with 200 agents nationwide helping clients with safe insurance and financial products. Although his success was admired by many, he wasn’t able to spend the time with his family that he desired. Andrew decided it really doesn’t matter how much you make; if your family isn’t a priority, it isn’t worth it. He decided his days of traveling the country training agents were over. Rather than focusing on quantity, Andrew began focusing on quality. Legacy Builders Wealth Management has never drifted from the foundations that made it successful. Andrew knows from experience what clients want and need. He continues to become better and better, offering the highest form of excellence, customer service, and, most importantly, GUARANTEES that his clients have come to enjoy. The best part is that Andrew now has the freedom to enjoy his four kids and lovely wife, Jess, in their home in Franklin, Tennessee, and he’s still able to passionately provide nationwide safe retirement planning as a Certified Financial Fiduciary®.

If there is one thing Andrew loves bragging about, it is the fact that out of the 5,000 clients his company has helped, he has not lost a penny of his clients’ hard-earned money due to market volatility. Andrew is the radio host of “The Andrew Winnett Retirement Hour” which broadcasts throughout Tennessee. He has been featured on numerous news outlets such as MarketWatch, Fox, Bloomberg, Yahoo Finance, Morningstar, NerdWallet, The New York Times, and The Washington Post, just to name a few. He maintains certifications with the National Association of Certified Financial Fiduciaries®, National Ethics Association, and National Association of Insurance and Financial Advisors and is an A+ Better Business Bureau accredited business. With over a decade of experience in financial and wealth management, Andrew is an expert contributor on annuity.com and has been rated as one of the Fastest-Growing Financial Firms from 2017-2020 by Heartland Financial Group and One Life America. Andrew is proud to be an independent rather than captive advisor. He represents the top 75 Financial Institutions in America and has over 1,200 safe-money products at his disposal. Andrew has access to every fixed index annuity and fixed annuity in America to ensure his clients truly get to take advantage of the best products available for creating their own silos. With over 5,000 happy clients across the nation, Andrew knows what retirees and pre-retirees want: GUARANTEES! Andrew always strives to provide the following: •• GUARANTEES that you’ll never outlive your money •• GUARANTEES that you’ll never pay another fee •• GUARANTEES that you’ll never lose money in the market About the Author

107

•• GUARANTEES that you’ll pass on a death benefit to your loved ones •• GUARANTEES that you’ll pay the lowest amount of taxes •• GUARANTEES that you’ll experience true financial peace of mind •• GUARANTEES that you’ll have your long-term care coverage included in your retirement If you or someone you know is looking for advice on retirement and creating silos or getting a second opinion regarding retirement accounts, you can visit LegacyBuildersWealth.com to schedule a time to speak with Andrew.

108

THE JOSEPH STRATEGY

References Feroldi, Brian, et al. “5 Things You Probably Didn’t Know About Mutual Funds.” The Motley Fool, Last modified November 12, 2015. https://www.fool.com/investing/ general/2015/11/12/5-things-you-probably-didnt-know-about-mutual-fund.aspx Ferri, Rick. “The Heavy Toll of Investment Fees.” Forbes. Last modified May 27, 2013. https://www.forbes.com/sites/rickferri/2013/05/27/the-heavy-toll-of-investmentfees/?sh=5267a3c818fb Insurance Information Institute, “2020 Insurance Fact Book.” Accessed April 18, 2020. https://www.iii.org/ Jones, Jeremy. “Will You Run Out of Money in Retirement?” Young Research & Publishing, Inc. Last modified May 22, 2019. https://www.youngresearch.com/ researchandanalysis/retirement-investing/will-you-run-out-of-money-inretirement/ Lewis, Michael. 2014. “On A ‘Rigged’ Wall Street, Milliseconds Make All The Difference.” Interview by Terry Gross. “Fresh Air,” NPR, April 1, 2014. Audio, 37:00. https://www. npr.org/2014/04/01/297686724/on-a-rigged-wall-street-milliseconds-make-allthe-difference Morris, Matt. n.d. “How Success is Like a Chinese Bamboo Tree.” MattMorris.com. Accessed January 20, 2021. https://www.mattmorris.com/how-success-is-like-achinese-bamboo-tree/ Statista. 2021. “Number of opened and merged/liquidated mutual funds in the United States from 2005 to 2019.” Accessed January 11, 2021. https://www.statista.com/ statistics/295917/number-of-opened-merged-liquidated-mutual-funds-usa/ Tithe.ly. 2020. “Tithing in the Bible: 100+ Scriptures about Giving.” Last modified August 4, 2020. https://get.tithe.ly/blog/106-bible-scriptures-about-giving Wikipedia. n.d. “Banking in the United States.” Accessed October 12, 2020. https:// en.wikipedia.org/wiki/Banking_in_the_United_States Wikipedia. n.d. “Normalcy Bias.” Accessed October 12, 2020. https://en.wikipedia. org/wiki/Normalcy_bias Wikipedia. n.d. “Stock market bubble.” Accessed January 20, 2021. en.wikipedia.org/ wiki/Stock_market_bubble#

About the Author

109