1. ABC_WORKSHOP_PPT__1.5_Hr__2014_v9.pptx

2. DISCLAIMER
The Course “Conservative Investing made 123 Easy” is an educational
program, and is not intended to sell investment or insurance products,
nor is it intended to provide tax or legal advice. Consult with your tax
advisor and/or legal counsel for suitability for your specific situation.
Hypothetical and/or actual historical returns contained in this
presentation are for informational purposes only and are not intended
to be an offer, solicitation, or recommendation. Rates of return are not
guaranteed and are for illustrative purposes only.
Projected rates do not reflect the actual or expected performance
within any example or financial product.
David S. Edge and David P. Schaeffer are Licensed Financial
Professionals with American Retirement Advisors.
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3. s
Things you should know!

4. s
Things you should know!
AmericanRetire.com/ Radio

5. Warren Buffets Rules for Investing
2. Always follow rule #1
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6. What we will cover!
• How to eliminate the “what if’s” and guesswork
• The elements of a retirement income plan
• How to feel good about your investing decisions
• How to analyze mutual fund performance
• How brokers are really paid.
• How to identify outdated models
• Identify opportunities for maximum returns
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7. Forbes Magazine
“Todays retirees have no use for theories,
guesswork or past performance. They
need certainty and guarantees.”
~~David P. Schaeffer
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8. Our need to do a better job!
• Life based on things we can count on
creates peace of mind.
• Understanding change is inevitable,
your expenses are relatively constant.
•
• Wouldn’t predictable income be nice it
were possible?
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9. Phases of your Investment Life
• While working you are ACCUMULATING
• As you approach and enter retirement you
should be PRESERVING
• After you fully transition to retirement is
called DISTRIBUTION
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10. Why Are We Here?
• Do you know how all of
your assets (stocks, bonds,
mutual funds, annuities, REITS,
Life Insurance, etc.) work
together to achieve the
amount of risk you
want in your total
portfolio?
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11. Conservative Investing
• It is not “FAD” investing
• It is for the “Long Haul Investing”
• It allows you to sleep at night
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12. RISK and what is it?
• Market Risk
• Business Risk
• Inflation Risk
• Sovereign Risk
• Interest Rate Risk
• Re-Investments Risk
• Price Risk
• Liquidity Risk
• Systematic Risk
• Un-Systematic Risk
• Event Risk
• Political Risk
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13. RISK TOLERANCE SCALE
+ 8% + 15% + 26% + 34% + 100%
- 8% - 9% - 17% - 23% - 100%
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14. S&P 500 Chart 1934 - 2014
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15. s
5.28%
Compounded rate of
Return without
withdrawals

16. This
Year
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17. • Cultural Shift
• Investing vs. Gambling
• Pensions & 401(K) Plans
Times have changed
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18. Suggested Reading
• 1988 – Only legal in 2 states.
• 1994 – Operating in 23 states.
• 2000 – Over 34 million people visited Vegas.
• 2000 – Over 127M people visited casinos.
• 2003 – Casinos were operating in 48 states
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19. Where did my pension go?
• 1978 – Section 401k was amended.
• 1983 – 50% of large Companies switched to 401k
• 1985 – About 8M & 100 billion invested in 401k’s
• 2006 – 70M+ people and 3 Trillion Invested.
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20. • Wall Street is Disconnected
• Information Overload
• Long-Term Market Returns
The Need For A New Model
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21. Source: DOW & S&P500 returns from financial.google.com, as of 01/01/2014.
DJI returns from Indices are unmanaged, do not incur fees or expenses.
Source: 5 year CD rates from Federal Reserve Board.s

22. The Model
• Where to allocate assets to avoid volatility.
• Which assets to use and why.
• “123 Easy” process to achieve your goals.
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23. The Model
• Three Purposes of Money
• Yellow is LIQUID and available on Demand
• Green is PROTECTED and is Principal Insure
• Red is to hedge against INFLATION
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24. The Model
A
Demand Accounts
(Cash)
Low Interest
Taxable or
Tax-Deferred
Liquid
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The Yellow Money Rules
1. Accessible with no penalties
2. Accessible with minimal penalty

25. B
Principal Insured
(Growth/Income)
Moderate Interest
Tax-Deferred
Partial Liquidity
The Model
s
The Green Money Rules
1. Your Principal is Fully Insured
2. All Interest Earned is Yours
3. Income is Guaranteed

26. C
Risk
(Growth/Income)
Gains (Loss)
Taxable or
Tax-Deferred
Partial or Liquid
The Model
s
The Red Money Rules
1. Your Principal is at Risk
2. All Gains and Loss fluctuate
3. No Guarantees

27. A B C
Demand Accounts
(Cash)
Principal Insured
(Growth/Income)
Risk
(Growth/Income)
Low Interest
Taxable or
Tax-Deferred
Liquid
Moderate Interest
Tax-Deferred
Partial Liquidity
Gains (Loss)
Taxable or
Tax-Deferred
Partial or Liquid
The Model
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28. What is Your Goal?
A B C
Demand Accounts
(Cash)
Principal Insured
(Growth/Income)
Risk
(Growth/Income)
Low Interest
Taxable or
Tax-Deferred
Liquid
Moderate Interest
Tax-Deferred
Partial Liquidity
Gains (Loss)
Taxable or
Tax-Deferred
Partial or Liquid
Access to Cash Protection Gains (Loss)
Growth Liquidity Protection
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29. Aggressive (at Age 65)
A B C
Demand Accounts
(Cash)
Principal Insured
(Growth/Income)
Risk
(Growth/Income)
Low Interest
Taxable or
Tax-Deferred
Liquid
Moderate Interest
Tax-Deferred
Partial Liquidity
Gains (Loss)
Taxable or
Tax-Deferred
Partial or Liquid
10 % 0% 90%
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30. Conservative (at Age 65)
A B C
Demand Accounts
(Cash)
Principal Insured
(Growth/Income)
Risk
(Growth/Income)
Low Interest
Taxable or
Tax-Deferred
Liquid
Moderate Interest
Tax-Deferred
Partial Liquidity
Gains (Loss)
Taxable or
Tax-Deferred
Partial or Liquid
10 % 60% 30%
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31. “Hulbert’s data shows that
more than 84% of mutual funds
underperform the market over a
5-year period. Over ten years,
that number rises to 90%.”
Morningstar Publications
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32. Say Goodbye to the 4% rule
“ If you retired in in January 1, 2000 and
withdrew 4% each year from a portfolio of 55%
stocks and 45% bonds you would have lost 33%
of your principal savings.
71% of people using this traditional mutual fund
strategy will outlive their money.”
~~Wall Street Journal and T. Rowe Price.
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33. • Measuring (The Unknown)
– Systematic Risk
– Volatility
– Variance
• Indicators
– Alpha (Always looking to increase over 1.0)
– Beta (Always looking to decrease below 1.0)
– Standard Deviation (Always looking for Zero)
– R-Squared (Always looking for 85 or more)
Class Exercise - Red Money
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34. • Every 3 years you have
a bear market.
• Every 8 years you have
a significant bear
market.
• If you hold your money
for 17 years you won’t
have a problem.
On Average
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35. The Last Bear Market 2000-2009
S&P 500
Returns
1 2 3 Total Gain / Loss
$
Gain / Loss
%3% 7% cap S&P 500
2000-2009 $50,000 $0 $450,000 $500,000
-10.14% $51,500 $0 $404,370 $455,870 -$44,130 -9%
-13.04% $53,045 $0 $351,640 $404,685 -$51,185 -11%
-23.37% $54,636 $0 $269,462 $324,098 -$80,587 -20%
26.38% $56,275 $0 $396,821 $72,723 23%
8.99% $0 $429,125 $32,303 8%
3.00% $59,703 $0 $382,296 $441,998 $12,874 4%
13.62% $61,494 $0 $434,464 $495,858 $53,860 12%
3.53% $63,339 $0 $449,698 $513,036 $17,178 3%
-38.49% $65,239 $0 $276,609 $341,848 -$171,188 -34%
19.67% $67,196 $0 $331,018 $398,214 $56,366 16%
After 10 Yrs $67,196 $0 $331,018 $398,214 $101,786 -20%
Your Mix 10% 0% 90%
-$101,786
Less in your accounts
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36. The “123 Model” in the Last Bear Market
S&P 500
Returns
1 2 3 Total Gain / Loss
$
Gain / Loss
%3% 7% cap S&P 500
2000-2009 $50,000 $300,000 $150,000 $500,000
-10.14% $51,500 $300,000 $134,790 $486,290 -$13,710 -3%
-13.04% $53,045 $300,000 $117,213 $470,258 -$16,032 -3%
-23.37% $54,636 $300,000 $89,821 $444,457 -$25,801 -5%
26.38% $56,275 $321,000 $113,515 $490,791 $46,334 10%
8.99% $525,154 $34,363 7%
3.00% $59,703 $540,909 $15,755 3%
13.62% $61,494 $584,820 $43,911 8%
3.53% $63,339 $391,901 $149,899 $605,138 $20,318 3%
-38.49% $65,239 $391,901 $110,339 549,342 -$55,796 -9%
19.67% $67,196 $419,334 $92,203 $596,969 $47,427 9%
After 10 Yrs $67,196 $419,334 $110,339 $596,969 $96,869 19%
Your Mix 10% 60% 30%
$198,655
more in your accounts
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37. Year FourYear One Year Two Year Three
10%
4% cap
-40%
0%
6%
4%
Your up
8%+
4%
Your up
12%+
15%
FIA Simple Four Year Graph
Still up
4%
Your up
4%
•Market
•FIA
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38. Actual FIA Historical Performance*
*DISCLOSURE: This is a Hypothetical Graph that reflects the actual interest crediting methods used by a
specific insurance company from a time period beginning 09/30/1998 and ending on 09/30/2013.
Individual results may vary and be dependent upon crediting methods, caps and participation rates. This
is for illustration purposes only to show how a Fixed Index Annuity may have performed over a specific
period of time.
Annual
Monthly
Average
S&P 500
2.75%
Compounded
Interest
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39. The Greatest Need… INCOME
• So… when will you need income?
• What is your plan to make your income
last up to three decades?
• What affect would market losses have on
your retirement income?
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40. Accumulation on $500,000
Inverse Returns Effect
Year Annual Return End of Year
Value
Inverse Return End of Year
Value
1 +28% $640,000 -38% $310,000
2 -10% $576,000 -12% $272,800
3 +15% $662,400 +2% $278,256
4 +17% $775,008 +15% $319,994
5 +1% $782,758 +26% $403,193
6 +26% $986,275 +1% $407,225
7 +15% $1,134,216 +17% $476,453
8 +2% $1,156,901 +15% $547,921
9 -12% $1,018,073 -10% $493,129
10 -38% $631,205 +28% $631,205
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41. Income on $500,000
Inverse Returns Effect
Year Annual
Return
Annual
Withdraw
End of Year
Value
Inverse
Return
End of Year
Value
1 +28% $35,000 $605,000 -38% $275,000
2 -10% $36,225 $508,275 -12% $205,775
3 +15% $37,493 $547,023 +2% $172,398
4 +17% $38,805 $601,212 +15% $159,452
5 +1% $40,163 $567,061 +26% $160,746
6 +26% $41,569 $672,928 +1% $120,785
7 +15% $43,024 $730,843 +17% $98,294
8 +2% $44,530 $700,930 +15% $68,509
9 -12% $46,088 $579,730 -10% $15,570
10 -38% $47,701 $306,151 +28% (-$27,772)
5.8% Inflation
Adjusted Annually
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42. Steps to a “123 Easy” Plan
• Step One –
–Gather Your Investable Assets
–Discuss your Retirement Goals / Budget
• Step Two
–Determine Your Yellow, Green & Red Mix
–Create Your Retirement Planning Time Line
• Step Three
–Review and Adjust (Rinse and Repeat)
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43. Income Planning “The 123 Easy Method”
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44. Is Guaranteed Income Important
to You in Retirement?
Are you still paying management fees
on your entire portfolio?
Hmmm…
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45. The “123 Easy” Dating Process
• Discovery
• Recommendation
• Clarify and Initiate
• Review and Refine
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46. Register Today For Your Free:
1. Subscription to the “American RetirementAdvisor”
2. David Vick’s Book
3. Your Financial Snapshot & Planning Time Line
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47. AmericanRetire.com
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