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let's destroy a Morgan Stanley financial plan shall we I'm sure I'm not gonna win any friends from Morgan Stanley Franco don't care oh this is so bad I just and on top of that just read where JP Morgan - JP Morgan economists are now predicting essentially we're all gonna die from climate change I'm like you guys can't predict the next freaking six months out of the market now you're gonna predict that we're gonna you know climate change is gonna kill us all I just the whole thing is one big scam is one big scam man and what is their solution for the us dying from climate change a carbon tax JP Morgan Morgan Stanley they all just they're not stood as if a climate a carbon tax is suddenly gonna keep us free from dying from climate change all right these guys man I can't look I know many I don't know anyone who works at JP Morgan I don't even know if I know anyone who works at Morgan Stanley anymore but I come from the brokerage industry you know I cut my teeth of Vanguard at Schwab went to the broker for about five years and and I met a lot of good people a lot of righteous dudes for sure without question lots of great guys in the business I do not deny that at all the software they use in the retirement stuff they're using is it's just piss-poor there's just no other way around that and and when you see stuff that's piss-poor that people are emailing you to say can you look this or just what do you think and you're sitting there thinking this is freaking nuts don't look man I'm gonna tell you right now it's only a matter of time before as ideas grows I'm not even at 30,000 subscribers yet but I'm under the what's the word I'm looking for I'm under the cover of darkness but you know more and more I'll be less and less under the cover of darkness I'm just as I'm sure as a matter of time for somehow the they bark bad they bark they bite back bark bad they bite back and I don't know what that means you know I you know I don't think YouTube would do anything I might say you can't do Personal Adviser anymore I I don't know I don't know I'm just telling you right now I'm gonna call like I see it I'm gonna hope the good Lord takes care of my income as we go forward because I can as the audience grows is it's gonna get I can just you can see a smile people don't like to be called out but that's all there was to it all right so let's go into this all right so first I do want to credit Morgan Stanley I've so my man would say his Bob Bob from a place in Northeast sends me this and it's you know but it's 30 pages of stuff and I gotta give credit to Morgan Stanley pretty significantly on their return assumptions I was actually I thought I was gonna be able to hammer them on the return assumptions and I was I was actually shocked the return assumptions were almost spot-on to mind I'm actually a little bit less in mine so I so kudos to them I hope they're using the same return assumptions across the board but well so let's just show you what the return of some shows are because I think it's important and so for that I say kudos if they get a 100% equity portfolio their annual return assumptions at six point seven with a standard deviation of fourteen point nine my standard deviation is about fifteen point five and my return assumptions are seven and a half so there's actually a little bit more conservative than mine I was stunned to see that they're 100% fixed income is three percent with with a five point three percent of standard deviation I think I have a six point five percent standard deviation and put again a three percent for a hundred percent fixed income so you know they're right on man and then he got a moderately aggressive portfolio it's about five point eight percent and returns with eleven point eight percent standard deviation so kudos i I was stunned to see that stunned and not and I went into this after seeing that with some level of respect for Morgan Stanley they also have on the bought and obviously I'm not going to show this to you but they also have at the bottom where they say all their stuff on their portfolio is net of fees and they said I mean no surely the fees are coming out which I wish they did but at least they show you the fees are part of this I think I mean it says a fees here on a second rate their 1% fee so they have a one percent fee included in here which you know they kind of it's knee-deep in the and the assumptions here but I mean I appreciate that that they show a fee and I presume as part of the model I didn't see any place where they're actually reducing the portfolio for the 1% fee I did see that at all which kind of bothered me but they are making at least a note that we are gonna charge you 1% fee in here as well so so kudos them I get no problem that the big so I don't know I couldn't see in here where they're taking the Fiat I just can't I and so this guy's got a million bucks I think it's 1.2 million that's $12,000 a year I did not see where that's coming out so I'm not sure where the how that feeds be accounted for I just don't know but you know they do make a point that the fee is 1% all right what drives me flipping batty has look at this let's talk my wife my wife was doing some work I was doing some work you know because she's my partner crime and I said I've got to do a video on this because they're there taxes are freaking nuts man all right so let's go let's grab my trusty PVC pipe I came I still don't see how they're getting these numbers I've sitting there just boggles my mind all right so they have total income 38,000 from the portfolio to get a one breath rough it one a little bit more than a million dollar portfolio that's about three point five percent withdrawal rate I get that 36,000 from Social Security I don't even get to 36,000 from Social Security they show it three 38,000 come from the portfolio they do show that they just don't show that being net of fees or anything there's no other a line on it for fees other than there's one line which the least a show for 1% feet but it's just odd but the whites got 9,000 bucks of sole curious so I don't get why I don't I don't understand where they're getting their numbers from when it comes to taxes but I'm going with it I'm looking at their annual cash flow details they got they got so if you got thirty six thousand married filing jointly over the age of 65 thirty eight thousand portfolio withdraw your total incapacity four thousand bucks all right this is your total income I should say total income seventy four thousand dollars tell me what you think their taxes are for Morgan saline what do you think they're using for taxes nuts ah all right you ready we're just gonna say 18,000 bucks but it's a there's eighteen thousand five hundred and ninety nine dollars eighteen thousand dollars they are using 18,000 dollars of taxes a seventy four thousand dollars of income so if we take our trusty calculator 18 divided by 74 that is a 24 percent effective tax rate now what they'll say is that's no that's not true Josh they're only using a 22 percent effective tax rate because they show right here post-retirement 22 percent effective tax rate and they have a 15 percent effective capital gains long term and a 22 percent effective capital gains short term all right so they're basically so what's happening here is you've got to combine these two things right here and you're gonna get 92 thousand dollars all right so sensuous happening here because the taxes on top of the income they got ninety two thousand dollars that's how they're essentially saying at 22 percent effective tax rate because you take 18 divided by 22 by 92 and you get about 20 percent so it's at the point it doesn't matter is this is freaking nuts all right so let's so you say so let's go into this a little bit because I want to show of why that's the same just erase this all excited this whole thing is is it's silly I've shared this with you before when I was at USAA we used to have this thing I think it's a visor vision if that was the software I'd hopefully they're out of business by now I and the reason was because if this stuff was horrible horrible they put the software out there to get you to build some products it's all there is to it but the problem was is that they had a conservative portfolio of 20 stocks 80% bonds to give me 6.4 percent rates of return from now until attorneys so essentially everyone had a hundred percent success rate it was nuts and I guess they're saying well if I'm getting hundred percent success rate I guess I'll have a problem paying you at 1% fee or one of the quarter nuts that's crap yet so somehow the SEC the regulatory agencies don't do anything with that they don't do anything with this but yeah they're gonna come on some guy like me saying this other compliance is worried about the USA's own compliance you shouldn't say you like roth iras without being a compliant approved why because now that could in city way your make you're recommending roth iras I am that's Roth IRAs are good there's a well it's a broad-based recommendation for short doesn't mean anyone specifically should do it just means overall I think Roth IRA Roth IRAs are good it should be looked at well oh that's a violation of compliance you have to take that LinkedIn note down this is freaking nuts dude but yeah we've given a software that's absolutely absurd absurd absurd absurd and when he told the higher up and command at USA they didn't want to hear because they just wanted you to sell more product and here's Morgan Stanley it was crappy freakin nuts about their tax thing it's insane so let's go into this alright so the again the thing that freaking and annoys me more than anything so it's cool we got 32 six thousand of Social Security and we got thirty-eight thousand of other income all right so 36 38 all right so what we do is we take half the Social Security $18,000 they add it to the hack to get our provisional income so this is gonna be i've off Tommy what's that fifty six thousand bucks double check while bagging on these guys 18 plus 38 that's fifty six thousand dollars let me see I gotta get a better high to keep leaving my other markers upstairs now that won't sting so I make it won't be there we go think it feels good all right so we got 58,000 we got fifty six thousands over 56,000 our provisional income what's the point of finding out provisional income the point is to get a gauge of how much our social security subject to taxation all right so 56,000 sr provisional income we're married in this case so we got 0 to 30 to 0 and I get to this here in just a second 32 to 44 50 percent and +44 is 85% all right so what's happening here is the first 30 mm of our provisional income is none of is subject to taxation all right so in this case got 56 we got 32,000 in this category zero is subject to taxation all right but now we've got 12,000 in this category because 32 to 44 is 12,000 so 12,000 which we times that by 50% which means 6,000 of that amount is subject to taxation now we've got 56 minus 44 which is another 12,000 85 percent of that is subject to taxation so Barrowman just a second we take our trusty calculator 12 times 0.85 and that means 10200 is subject to taxation all right so what we do is we add these together of which could be sixteen thousand two hundred of our social security Mount is subject to taxation Social Security's 36 thousand sixteen thousand two hundred is subject to taxation all right so we knew about a little bit little bit less than half 16 divided by 36 it's about forty five percent forty four percent of our social security in this regard is subject to taxation so sixteen thousand two hundred all right just get my high 16200 of social security is subject to taxation all right all right here we go here we go yeah it's gonna even get worse guys and you're gonna want to have a freaking jump off a bridge when I show you how bad this gets actually let's try Orange 16200 of Social Security is subject to taxation that's pretty good 16200 right look at ass 16200 that's our how much for our so scared subject taxation now we have thirty eight thousand dollars of other income but this case they only got to get up there 1.1 million in assets they have with Morgan Stanley only seven thousand is in an IRA everything else is in a post tax account a brokerage account so 38,000 distributions ascensions can be tax-free I can tell you that a mile away because its long-term capital gain it's taxed at 15% but because in the 12 percent tax bracket which they certainly are it's tax-free if it's a short term capital gain load is Bo I but certainly not could be short-term capital gain how do I know because I can see what their cost basis is wrote to the portfolio it's a lot bad it was qualified dividends this can be a lot 15% but again because of the 12% tax practice it's not subject to any taxes it's crazy the only thing it could possibly be would be ordinary income so we're just gonna say it's our bond interest which is that we'll just say it's bond interest or else a is IRA distributions you both are ordinary income so it doesn't matter but this is freaking nuts I'm looking at this I'm like how can you say you have an effective tax rate of 22% with only 16,000 of your social security subject to taxation and you get a huge amount of after-tax accounts I mean the everything essentially except for eight thousand seven thousand five hundred after-tax ah so base these guys have no tax ah let's just say it's bond interest will say bond interest or you could say IRA it doesn't matter or IRA size 401k distribution it will not matter because they're both ordinary income and both are because they're both coming out as ordinary income it will not just running as if it were that so you can see even how absurd this is even if this was IRA money ah freaking nuts and ways so god I don't know what that would be so let me get my trusty calculator sixteen thousand two hundred plus thirty eight thousand dollars fifty four thousand two hundred is their total a and G I write that's their AGI fifty four thousand two hundred all right you're right it would be all right so we know if they're married filing jointly you take we're just gonna say what is the freaking hold on a second I can't remember what the the tax the standard deduction anymore is standard deduction 2009 2020 I just don't because it changes everyday I just forgot so let's take a gander here's a twenty thousand right here this is pretty crazy there are a standard deduction 2020 if you're married filing jointly and you're over the age of 65 come on man come on Molly fool and I don't know it's 24 I think it's twenty-seven thousand bucks we're just gonna go twenty-seven thousand bucks if you're under the age of sixty-five 24,800 I do not know what it is for if you're over the age of 65 so I'm just going to say twenty-seven thousand bucks all right so we're gonna say yeah when this hit on here all right we're just get 27 thousand bucks which sounds pretty good to me no it really won't matter $27,000 in standard deduction so their tax olenka fifty four thousand two hundred minus twenty seven thousand is twenty-seven thousand two hundred twenty seven thousand two hundred is their taxable income basically the first twenty thousand is taxed at 10% last twenty thousand at ten percent which is two thousand dollars and the 7,200 is at twelve percent which will be seven thousand two hundred times twelve percent is eighty-six $864 so you add these two together and we got taxes of two thousand eight hundred sixty four bucks I mean and that's assuming that's all as bond interest which it certainly was stupid would not be he'd be done to do that or it's a IRA distribution was not if that was capital gains long term complications there's no taxes here I'm just telling you right now how do I know that cuz a sixteen thousand two hundred that the pan Social Security is well below their standard deduction that's there's no taxes so basically what's happening here is Morgan Stanley has these guys paying roughly twenty thousand taxes when in fact it's between zero which I have a sneaky suspicion is gonna be in twenty hundred sixty-four all right so let's real quickly [Music] just the whole thing and the reason by the way they have that $92,000 of their income of their net net Inc or gross would be yeah I guess that income is because they have to take eighteen thousand off and wish to pay the stupid taxes that Morgan Stanley thinks they have to pay which is incredibly just as stupid you don't you don't and if anyone who doesn't know this in this business I don't know what you're doing this business I'd look I hate to be like that but this is basic stuff here man if you're just using a Beretta bought a broad twenty-two percent effective tax rate at ten percent that's frickin the wrong answer yeah we so we got roughly me or reality zero to three thousand dollars in taxes and we got Morgan Stanley 18600 attacks that's a pretty significant wide birthday my friends Morgan Stanley is dead wrong here they don't know what they're doing this regard is nuts how bad they are here nuts and this should not be acceptable absolutely and the thing I have I would challenge anyone if they're using just a broad-based tax will approach and software I will you get out of there man this is this is your freaking money you're paying advisory fees for what exactly well if you're not painted what are you paying for well they're managing my money to what juice returns that's not happening they're managed money to protect the downside I guarantee that's not happening what are you paying for now remember I did a video the other day what's that was that no I wasn't just during the last remaining again live streams tonight at 7:30 p.m. Eastern Time where I shows you what the how the baron's top financial advisors get named Baron stock financial advisors one of the criteria is revenue derived for the firm not revenue drive to you as the client revenue derived for the firm doesn't take rocket science to figure out huh so if I drive more revenue from you the client to the firm more likely to be one of Barron's top financial advisors freaking bad that's just that's nuts nuts stop this Santa insanity man don't hire these guys until they get their crap together I'm sorry that's bad that's why the arrows as my audience grows is gonna get deeper deeper because when you are challenging people's lifestyle their income you are going to take it on the head like the climate scientists are being challenged by the good guys Roger pill Keyes Judith Curry's it's the good people mark Stein's of the world first dogs thought scientists and we have many scientists who challenged the freaking climate fraudsters as for sure people is when there's money at stake we're talking millions and millions and millions of dollars at stake when you start challenge these people you are gonna be public enemy number one just that bhai so I'm sitting here thinking and I'm looking up the Morgan Stanley thing I might dude you guys are so freaking jacked up in this let me see if I can't get it back no man would I do with it yeah I guess I lost it no what happened man my okay I don't know where it went it's in my email thing right there dude all right so I don't know where I went oh hey I get out of here here we go hold on a sec of my friends when you there is so when you're talking well beben huh 1.1 million dollars at stake for a couple that are in their mid 60's and you're having these taxes year over year over year which are absurd absurd hold on just a second they got I wish they'd just tallied up four is it they don't they always so the same scenario they're paying 19,000 and taxes this year 20,000 a couple years twenty two thousand twenty seven thousand 27 just times we'll just say on average twenty thousand a year over the course of you know basically 25 years in retirement I hate my friends Hey and this is when I who is the guy West something I forgot his last name now he's local here when the first videos I ever did was challenging his whole thing on these people have to work because they don't have enough money because they're making eighty five thousand year and they're gonna be I think he was using 25% tax bracket I said no oh oh I love to hear comments my friends you can't I'm sorry you can't trust the software you can't you've got to know how this works because the software you just can't trust it and it's all gonna come back on you if it's wrong you're gonna sue Morgan Stanley you're gonna sue you all about what the usaa at the other day they're gonna say well you sign this document that said you understood hey buddy the risks and that you know they're just a they're just giving you a assessment they're not truly tax professionals they're not truly this but you're like well I thought it's paying for a financial advice we'll see you