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In today’s episode of Agency Intelligence podcast, host Jason Cass interviews Erik Garcia, Owner of Garcia Insurance Services, President at Garcia Financial Group, and Investment Advisor at New Century Financial Group, LLC. Erik Garcia and Jason Cass talk about four reasons why Erik finds reasons for apprehension with Dave Ramsey’s investment advice. 

Episode Highlights: 

  • Jason Cass introduces guest Erik Garcia and discusses AI Brainshare that is taking place on October 25-28th 2020 in Puerto Rico.  
  • Erik Garcia has four main reasons why he disagrees with Dave Ramsey’s advice. 
  • There is not a one-size-fits-all solution to giving investing advice. 
  • Erik Garcia and Jason Cass talk about their personal experience with Dave Ramsey’s financial advice. 
  • One red flag from taking financial advice is if the person isn’t regulated.  
  • Dave Ramsey says you should be getting 12% on your investments on an annual basis. 
  • Your retirement savings have to be converted to ongoing income for the rest of your life. 
  • The two ways you make money in the stock market are capital appreciation and dividends or yield.  
  • The problem with statistics in returns is you can use them to prove anything you want to.  
  • Why is 8% an unrealistic withdrawal rate against your savings?   
  • What does the sequence of returns mean? 
  • What are Erik Garcia’s problems with Dave Ramsey’s philosophies on mutual funds? 
  • Jason and Erik talk about buying leads and conflicts of interest.   
  • What makes Dave Ramsey’s asset allocation advice potentially problematic? 
  • The average investor operates off of their emotions. 
  • Bonds have a place in an investment portfolio.  

3 Key Points:

  1. Most mutual funds don’t beat their index with their tracking.
  2. A withdrawal rate of 4-5% is a safe zone during retirement. 
  3. When you engage with a client, be clear with them if there are any conflicts of interest with the transaction.      

Key Quotes:

  • “My first disagreement with Dave Ramsey is that he, from a planning perspective, says that you should be getting 12% on average, year-after-year on your investments.” – Erik Garcia
  • “Let’s say you have $2 millions in your investment account. So he (Dave Ramsey) says that you can withdraw safely 8% of the value every year for the rest of your life, which is an insane withdrawal rate.” – Erik Garcia
  • “When it comes to life insurance, my number one rule is provision. You’ve got young kids at home and you have got debt, you need a crap ton of life insurance.” – Erik Garcia

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