Dollars & Sense: Stay in the Stock Market or Get Out?

Dr. Harold Wong

CNBC published an article by Jesse Pound and Samantha Subin: “Stocks fall to end Wall Street’s worst year since 2008.” Should you pull most of your financial assets out of the stock market or stay in?

Jeff and Mary Jones are a married couple, both age 60 and planning to retire at age 70. They have $1,100,000 financial assets and $200,000 annual income. They pay $30,000 annual income tax and spend $120,000 annually. Their financial assets are invested $1 million in the stock market and $100,000 emergency cash in the bank.

Scenario 1: The stock market drops another 25% by the end of 2024, and the couple now has $750,000 in the stock market. Next, assume the stock market has a compound average growth rate of 6.25% (the average since Jan. 1, 2000), counting dividends but no fees.

By 70, they have $1,375,151 and retire. Annual income is $41,254 from 3% bank or bond interest or dividends. Depending on what their Social Security income is and future inflation, they probably need to substantially cut annual spending.

Scenario 2: The same couple pull out all of their $1 million from the stock market before any further stock market decline in 2023 or 2024.

Step 1: They also save $25,000 taxes each year by buying a $70,000 piece of solar business equipment leased out to huge food companies, and annual income is $4,900. In 10 years, this will become a steady $49,000 of annual income. They are able to buy this with their annual savings from income, now that their taxes are heavily reduced.

Step 2: They deposit $700,000 in a private pension plan immediately. In 10 years, this will be a guaranteed annual $109,816 income, and none of the money is at risk in the stock market. Their total income, not counting Social Security, is $158,816. They also have at least $400,000 in an emergency cash fund vs. the original $100,000. They never have to worry about money in retirement. Conclusion: the key to happiness in retirement is high guaranteed income and little stock market risk!

Attend my Free Live Seminars: Tuesday, May 16, or Wednesday, May 17, at Hyatt Place, 3535 W. Chandler Blvd., Chandler, AZ 85226. The seminar is at 6 p.m., followed by a Free catered supper. The topic is “Beat Inflation by Saving Taxes and Increasing Income!”

Free Tour/Workshop at Solar Reefer (Refrigeration) Factory: Saturday, May 20, from 9 a.m. to noon. The topic is “How Solar Reefers Can Reduce Taxes to $0 and Earn a Steady 10-14%!” Lots of tasty refreshments will be served!

The location is Advanced Energy Machines, 4245 E. Norcroft Street, Mesa, AZ 85215, one-quarter mile southwest of McDowell and Greenfield Roads.

To RSVP for the seminars or schedule a free consultation, please contact Dr. Harold Wong at 480-706-0177 or [email protected]. His website is

Dr. Wong earned his Ph.D. in Economics at University of California/Berkeley and has appeared on over 400 TV/radio programs.