A NEW BEGINNING – Mach 1 Market Moment Podcast

 

Matt Walters (00:01):
Hello and welcome to the Mach 1 Market moment where we provide financial information on topics such as investing, insurance, financial planning, and everything related to your money. This is Matt Walters here with Mike Frost and David Lee, and today we’re going to be talking about the changes to our podcast format and what to look for moving forward. Mike, David, how are you guys doing today?

David Lee (00:25):
I’m doing great. Happy to be here. Excited for to be doing our first podcast.

Mike Frost (00:31):
I’m excited, Matt. This is going to be a lot of fun.

Matt Walters (00:33):
Yeah. So really today’s goal is to give you an introduction to kind of who we are as individuals, advisors, as well as Mach 1, the firm. And then, um, for those of you that have been listening to our podcast and we’ve had quite a few people listening to our podcast over the last several years, just to introduce you to the new format, what we’re going to be doing a little bit differently. As always, we always welcome feedback , you know, for how we can make this better. But I’m definitely gonna sound and, and look a little different based on the podcasts that you’ve heard in the past. So we’re excited to get started. So new podcasts, what are we going to be talking about? What’s the format going to look like? It’s really going to be open-ended. We want to make it conversational where it’s going to be myself, David, Mike, maybe all three of us.

Maybe just one of us, maybe two of us. The combination of, of the three of us just talking about, you know, relevant topics, what’s going on in the world today. David, what are a few examples of things that have been going on that we might talk about. 

David Lee (01:36):
Let me think here. COVID maybe, how about the virus, all the, the news about the COVID-19 stuff is what’s going around at the time that we’re recording this, it’s the only thing that the news media seems to be talking about.

Matt Walters (01:52):
Yeah. So that’s a great example. So, you know, talking about, you know, COVID-19, but also more specifically COVID-19 and how it may affect your portfolio, you know, your retirement situation. So trying to do our best to tie everything back to investing, financial planning and you know, what we specialize at here at Mach 1. Um, other topics might include, you know, upcoming election. This year’s an election year. Mike, any thoughts on, on that?

Mike Frost (02:19):
Yeah, we’re looking forward to that and I hope many of you are as well. And that’s why we had Governor Huckabee here just a few months ago talking about what, 2020 A nd Your Money. So yeah, we have lots to say about that.

Matt Walters (02:30):
Yeah. So big. So we’ve got a plethora of options right now with COVID-19, being an election year. You know, the market just went through a really volatile session. We’ve kind of started to experience some somewhat of a recovery, so just talking through those types of things and then staying up to date on relevant topics as we move forward. So I think it’ll be, be very conversational, be, it’ll be fun for us and hopefully enjoyable for you as well. Also, getting into the more kind of nitty gritty, I guess you could say the details of what we do here at Mach 1. So getting into general information on investment products and options. Not just specific to the ones that we use here at Mach 1, but educational, um, information on all of the available options. So stocks, bonds, you know, options, contracts, mutual funds, ETFs, talking about all of those options. The pros and cons of each, and then getting into how we might use those at Mach 1, some of our portfolios and then you know, which ones might be most appropriate for you and your portfolio.

So David, I know one of the options, no pun intended, that we, that we use that aren’t as common, is options contract. So give us kind of a quick example of how those can be used in just general high level education that we might get into more detail in the future.

David Lee (03:51):
Most of the people before they become a client of Mach 1, they’ve never even heard of options or if they have heard of options, you know, what a put or a call option is, they certainly don’t typically know how to use them in a portfolio. So at a very high level, an option is just a contract between two parties. You’ve got a seller and a buyer. They can be used for a lot of different things. A lot of the ways we commonly use them in our strategies are as hedges. Rather than using the term hedge, which can sometimes be a term that’s used in the financial industry. Think of a put option contract as an insurance contract. A lot of times I’ll explain it to clients in terms of something that they already understand, such as their homeowner’s insurance policy.

So when you buy a home, especially if you have a mortgage, the bank requires you to buy a homeowner’s insurance policy. But even if you own your home outright, you,probably buy an insurance policy to hedge the risk of losing it in a tornado or a flood or a fire, or some kind of disaster. So just like most people would not think of owning a home and not insuring against a disaster from happening. Most people unfortunately invest in the market but don’t hedge against market risk such as like what we just went through, right Matt and Mike? We just went through this major market correction from the top to the bottom, from late February to early March. The DOW dropped something like 34%. We all will live through it, but you know, it went from like 29,500 to 17,800 I think in, in like a month.

It was a 2008 style market event in one month. 2008 took roughly 18 months to play out. So we want to hedge against those types of events that are going to happen from time to time. The market. If you think about how unwise it would be to buy an insurance policy against your home, what do you think is more likely – that your house is gonna burn down in a fire or flood or whatever, or that the market’s gonna take a dip?

Matt Walters (06:17):
Yeah. Market taking a dip. For sure.

David Lee (06:20):
Yeah. You know, the market going down is, I mean, I can’t remember the statistics off the top of my head.

Mike Frost (06:26):
Well, we did set a record this year, David, the market dropped 30% in 22 days. That set a record.

David Lee (06:34):
Yeah. So typically, a correction is considered anything more than 20%. Right, Matt? So those happen fairly regularly. I don’t know. Do you remember off the top of your head how often? Sorry, I don’t mean to put you on the spot, but they happen fairly regularly, right? They happen a lot more regularly than your house might burn down or flood or blow away in a tornado. Yet most people don’t hedge the risk of their stock portfolio taking a beating, so we, do that for folks by hedging portfolios with put options. And there’s other ways you can use, different types of options like calls we can get into that later. But, but that’s an important part of what we do is show people how to hedge market risk on their portfolios.

Mike Frost (07:21):
And our clients have experienced that because the market is still down about 15 to 17% at the time of this recording. And a lot of our folks are almost back to even, so we’d love to be able to share that with other folks as well.

Matt Walters (07:35):
Yeah, absolutely. And just to throw it, David, I know you know this, but we were just talking about some of the statistics that market correction is actually only a 10% drop. Bear market is if it drops by 20% or more. So, corrections of 10% or more, happen quite regularly, kind of to illustrate your point there, so that’s an example. Obviously we’ll have some more podcasts in the future, really digging into options contracts – how we use them, how they can be used.

Some other topics that we’ll get into, as well in the future, tax planning, full disclosure, we’re not CPAs, we can’t provide tax advice. You know, you definitely want to meet with a CPA or tax professional to get that type of advice- but, um, you know, as they say, we know enough to be dangerous. So Mike, you’ve really been the one that’s really dug into a lot of this. What are some topics and some, planning strategies that we’ve, we’ve been doing a lot with people lately.

Mike Frost (08:30):
Well, Matt, you’re right, we’re not CPAs. However, we do have a very powerful piece of software we call the Mach 1 Retirement Flight Planner that has all that built in under the hood. So, we can definitely kind of model some things for folks about their taxes, what they potentially experienced in the future. And again, we’d always want them to confirm that with their CPA.

Matt Walters (08:50):
Absolutely. So there’s a lot, a lot, lot that we can get into in terms of taxes, you’ll probably hear several different podcasts just specifically related to taxes, here in the not too distant future. Another thing we’re really excited about being able to incorporate into this new format of the podcast is having some special guests on here. So we work with a lot of really intelligent people. People that we refer clients to, you know, CPAs, legal attorneys that provide legal advice, estate planning, business owners in the community, pastors in the community. A lot of people have a ton of wisdom, a ton of knowledge that we may not have as much knowledge in that we want to have on the podcast interview, ask questions, to provide a lot of good information to our listeners.

So that’s one that we’re really excited about. Probably try to have a special guest on every couple episodes or so. Um, so definitely be on the lookout for that. So that’s just kind of the tip of the iceberg in terms of the detail that we’ll get into. Um, but hopefully it gives you an idea of what to expect and what, um, what to be listening for moving forward. So, um, now that we’ve talked about the topics, I want to spend a few minutes here. I think most people that we work with probably know a fair amount about the three of us advisors, you know, here at Mach 1, but they’ll probably have some listeners that maybe don’t work with us yet or don’t know us as well as they might want to. So let’s spend some time just kind of introducing ourselves. Mike, you’re, you’re known not only as the old guy in the office but also the educator, the teacher. So, you were just talking about retirement analyzer. You really have a passion for some of the education events that we have in the community. Where does that passion come from, how did you get started?

Mike Frost (10:42):
Well, Matt, my background, I go way back to the beginning. I grew up on a dairy farm and so I fully understand how what hard work is like. Um, played high school basketball, college basketball, just like you did Matt. So understand what teamwork is like. Uh, we’ll spend a couple of years teaching school, have a master’s degree in special ed, so I’ll have a passion for teaching and educating. Also have a master’s in business, spent a long time with a major food company, moved my family around the country about six times. Ended up here running their team here for about six years and then went through one of the restructurings and got, went to work for another company for about 11 years and managed about 650 people there, but all along there, Matt, I did get acquainted with the Dave Ramsey program, financial peace university.

I’m actually a counselor for them and we talked that my wife and I taught that for, we feel facilitated it for about 15 years, so we know how the program works. We implement a lot of that here when we do our retirement analysis, kind of doing the budget form, getting out of debt and things like that. But I’ve, what finances can do to people, if you don’t have your finances right, it’ll rule you. If you have ’em right, then you have control over your life. So I have a passion for helping people get their finances in a situation where they are in control of their life going forward. So, uh, been here with you guys now for a little over a year, have enjoyed every minute of it and look forward to the future.

Matt Walters (12:16):
Yeah, absolutely. And you know that Mike just mentioned Dave Ramsey. We’re actually one of the, for those that don’t know one of the smart Vester firms here in Northwest Arkansas. So Dave Ramsey recommended from, um, you can find that information on our website or look us up on the Dave Ramsey website as well. So a little bit about myself. Um, I’ve been in the industry for about seven years, studied finance in school and um, started with a firm in little rock. That firm moved me and my family to Nashville, Tennessee for a few years and helped to build an office out there. And then, um, I guess right about two years ago now, I reached out to David. We were wanting to, me and my wife were wanting to move our, our kids and our family back to the Northwest Arkansas area and, um, reached out to David.

A couple, actually reached out to a couple firms here in Northwest Arkansas trying to find a good fit and you know, long story short ended up finding a place here at Mach 1. David was gracious enough to bring me on board and, um, it’s been a, it’s been a blessing for us. So I, I’m married, have two little kids and one on the way here in August. So, um, you know, w life’s definitely busy and hectic, but having a lot of fun. Um, and it’s always a great, great, we have a great team here at Mach wants, always enjoy coming into work. So, um, David, you started out in the air force and had a really successful 10 plus year career there. Um, can you share a little bit of your story about that and just kind of what got you into,

Yeah, so I’m the founder and CEO of Mach 1 Financial. We’ve been in business for, gosh, 14 years now, almost 15 years. And first I want to start by saying how thankful I am to have both of you guys, Mike and Matt, on the team. Mike, you mentioned you’ve been with us for about a year now and it’s been been a great year. It’s been a blessing having you with us and Matt. Uh, it’s been two years, three years. What has it been now? Two years now. Yeah. And so it’s been a huge blessing having you with Mach 1 and really we’ve got, that’s probably the thing I’m most proud of about Mach 1 Financial, is the people that work here. I get compliments all the time on the staff and just how professional and courteous and kind, caring about the details, you know, attention to details, what we used to call that in the air force.

David Lee (14:41):
Everybody is like that here at Mach 1. And on that note, one thing we’ll do on a future podcast too is introduce the staff over a few podcast. So, as far as myself, as Matt said, I, I served for about a decade in the active duty air force growing up as a kid. I grew up down in Fort Smith, Arkansas and had a international guard base in town. So I grew up watching fighters flying overhead and from the time I was probably a five year old boy, I knew that that’s what I wanted to do. I wanted to be a fighter pilot. So the Lord blessed my path and directed my steps and I ended up getting accepted to the air force Academy and graduated from there and then went on to pilot training and then ultimately went on to become aT 38 instructor pilot as well as an F16 instructor pilot in the active duty air force.

Then for family reasons, you know, the air force moves you around a lot and you can’t really develop roots anywhere. So after serving about 10 years where you’re at that point where you gotta decide if you want to stay with this and make it a career or go out into the civilian world and do something on your own. You kinda need to make that decision typically around the 10 year point. So at that 10 year point, my wife and I made a decision to leave the air force and go out on our own and kind of develop our own business. And so that’s where Mach 1 Financial came from. It was a hard road to hoe as they say. It wasn’t easy to say the least.

I left the air force January 31st of 2005, started working in this industry in February of 2005 and started learning under my mentor. A guy by the name of Chuck Beale opened up our first office in September of 2005 and the rest is history as they say now. Today we managed between the annuities and TD Ameritrade, North of a quarter billion, I guess we’d say. So the Lord’s really blessed us and we’ve been, I feel like we’ve also been a blessing to a lot of people in the community. So anyway, it’s been a fun journey and I’m really thankful for where we are now, especially with the team members that we have here at Mach 1.

Matt Walters (17:01):
Yeah, absolutely. Yeah, it’s definitely impressive, kind of, you know, being here two years, looking at what David’s built from scratch really into one of the more prominent firms here in Northwest Arkansas. So we have a great team here and I’m really blessed to be a part of it.

Jumping ahead, I want to get into something new that we started. Natalie, our director of marketing, spent a lot of time on this with David developing a plan for, you know, what are the steps, what are the steps look like for someone who’s working with Mach 1, right? What’s the onboarding process? How do we bring value and what does that process look like? So we developed a plan that we call the Retirement Flight Plan, kind of to coincide with the Mach 1 air force theme. It’s a four step plan and I want to ask Mike to kind of walk us through what each of those four steps are and why those are sequentially a good process to walk through.

Mike Frost (18:00):
Sure thing, Matt. Alright, so our four step plan, and it’s on our website here, if you’re listening to this podcast is right here on our website. You can take a look at it. But the first thing is, and like most good advisors should do, where are we going? What are your goals? What are you wanting to accomplish? And depending on who you are, your family situation, your income situation, everything’s going to be different. So we don’t have any cookie cutter plans here. We sit down with each individual and find out what are your goals right now we figure out, okay, now I know what your goals are. So how do we get there? Alright, that’s where when the planning starts taking place. And then we talked about earlier about this thing called retirement analyzer. It’s a very robust piece of software we use that’s very efficient in showing us how hard we need to make your assets work to get you to your plan.

So now we know where you, what you want to do. We got a plan on how to get there and then we need you to get on board. You say, okay, we’re ready to go and we can get you set up. We can do all this, by the way, virtually. I mean if this COVID-19 continues, we can do all this electronically. And then after that we call it mission debriefing. Every three months we invite our clients to come in and sit down with us or virtually do it just to touch base. How are we doing? Are we on track? Is our flight plan working or do we need to make an adjustment? So that’s every three months we do that. So we want to start off with what your goals are, develop the plan, implement the plan, and then check up on it about every three months and started off. Matt, we have a very easy way of people just to kind of get in touch with us is thing we call it now nine to know there’s nine questions you can answer and you can get a real quick feedback on how you look as far as retirement planning. And again, it’s part of our website. So you just click on the icon below and you’ll see it.

Matt Walters (19:45):
Yup, absolutely. So if you go to our website, the homepage, scroll down to the retirement flight plan section and click the get started button, that’ll just take you straight to the 9 To Know and walk you through the nine questions and give you kind of a very high level overview of – “Are we in good shape?” “Are we where we need to be?”. Whether the answer is yes or no, we can take the next step and help you dig into some more details and look at that for sure. So, to wrap up today, I want to talk about one of the last segments that we’ll try to do at the end of most, if not all podcasts. We still want to implement kind of, along the lines of how we used to do podcasts, the short little Q and A session.

So we’re going to really encourage people to send us any questions that you have. You can go to the podcast section of our website and submit questions directly to us there. Or you can actually also email podcast at podcast@mach-1financial.com. So you can just send us an email to podcast@mach-1financial.com.

Send us the questions you have. If there’s any topics that you want to hear us discuss or get into some detail you want to learn more about, send us that information or fill out this form. . At the end of every podcast we’ll try to dig into two or three of those questions and answer those. We really like conversations & client feedback. We really encourage you to get on there and give us some good information.

Talking about future podcasts, the next podcast is actually going to be titled: Retirement, are you ready? So, we’re going to talk about financial planning, the value of financial planning. How do you learn whether or not you’re ready for retirement. Maybe you’re already retired and you never done a financial plan, so you still don’t know. 

Mike Frost (21:29):
Matt, are you aware that only 17% of Americans have ever visited with a financial planner?

Matt Walters (21:36):
Yeah, that’s a pretty, that’s a staggering statistic for sure. So we want to help. We want to increase that number. We want to take that number in Northwest Arkansas and make it 50, 75, 80%. So reach out to us on the website, send us questions, give us a call at +1 (479) 876-2100 and we’d be happy to talk to you. So, that’s it for today. We appreciate you listening to the podcast and we look forward to you joining us next time on the Mach 1 Market Moment.