Abe Abich, founder and CEO of Abich Financial Services discusses the structure of creating, growing, and protecting accumulated wealth. is a podcast production of Indieloo - It's Your Place For Your Show. Discover your voice...Tell your story...Grow your business.

Abe has been in the financial services business for 14 years. He is a member of the Million Dollar Round Table, an organization consisting of insurance and financial professionals who uphold the highest standards for ethics and customer service in the industry.

And he also is a qualified member of the prestigious Court of the Table, which consists of the top 4,000 financial advisors around the world.

Abe founded Abich Financial Services in 2008 to help families prepare for their financial future. With a background in comprehensive financial planning, Abe has pioneered strategies that help protect his clients from volatile and risky financial strategies while helping them grow their retirement income.


BILL HORNBECK: Welcome to where we hear stories from the street. Well, actually stories behind the stories as told by solopreneurs and business professionals because these are the people who bring us an inside view to the ways they serve their customers, the way they serve their clients, their community and society at large. I’m your host, Bill Hornbeck.

We have a great conversation lined up for you today; in fact, I’m joined by Abe Abich, the founder and CEO of Abich Financial Services located in Ashburn, Virginia and I’ve got to tell you, both us are totally primed to cover some unique insights into the power of understanding and growing and I suppose most of all, protecting your assets. So welcome Abe, let’s have a conversation!

ABE ABICH: Thanks for the introduction Bill, I’m really looking forward to speaking with you today and to sharing some great insights and value with you and your listeners today.

BILL: Well great, because I’m going to hit you with what I hope are some interesting questions, and first of all I like your basic tenet because you are the one who is quick to say that clients can grow their money by following your 2 basic rules: I love these. Rule Number 1: Never Lose Any Money; and Rule Number 2: Never Forget Rule Number 1. I’ve got to say that’s a powerful rule of thumb so, come on Abe, how can you make that happen?

ABE: Well you know, one of the most famous investors of all time follows those two rules. I’m sure you know who he is – that’s Warren Buffett – and has Warren Buffett lost money in the past? I’m sure he has, but every investment decision he continues to make, he follows these rules: Rule Number 1: Never Lose Any Money and Rule Number 2: Never Forget Rule Number 1. So, if one of the most wealthy investors that’s ever walked this planet follows those rules shouldn’t we, as Middle Americans at least follow these rules with some of our investment decisions? And I think we’ll be a lot better off in the future if we look to these rules with some of the decisions we make regarding our retirement and our investments.

BILL: Right, in fact I often consider Warrant Buffett’s words where he says, “Price is what you pay; value is what you get”. So that’s got to play into what you’re offering.

ABE: Yes it is, and I think Bill, the majority of our clients are coming to us because they’re looking for something different, you know, and our clients all speak the same language, and what they are looking for is, they are looking for predictability, they are looking for the same principals, guarantees, dependability – they don’t want to lose any of their money any more.

They may have an advisor with Merrill Lynch or Fidelity or Edward Jones or TD Ameritrade, they may have an advisor or even two advisors out there, but they don’t want to lose any more of their money in their investments, but they also don’t want to sacrifice growth just to become more conservative. So obviously we know banks aren’t paying much interest at all right now so we can’t just liquidate all of our investments and go to cash, but there are strategies that are right in between what the bank offers and the market offers and that’s exactly how we help our clients with those types of strategies that can protect the client’s principal, protect them from any downside risk in the market while still earning, 4, 5, 6, 7%.

BILL: in fact that speaks to a conversation that I was having recently with a group of people, young people, look I’m a baby-boomer I’m just amazed at how fast the future becomes the past and if you don’t do it when you need to there’s not a chance to back up and I often say to these people, “Look, I know you’re not visiting with a financial planner because you’re saying, ‘I don’t have any money, I don’t have any reason to go to a financial planner’ and I say, ‘wait, wait, that’s precisely the reason you need to be talking to a financial planner’.”

ABE: Yeah, you know there are a lot of firms out there, Bill, that have what is called ‘Required Minimum Assets’ or ‘Required Minimum Investable Assets’ where you have to have 100,000 or a quarter million, or a half million, or a million, or 2 million just to speak with the advisor in the firm, and we’re not that way.

So, whether you are just starting out and just out of college or perhaps a young married couple and you’re just looking to start saving and building your wealth, or if you’re even more established and you do have hundreds of thousands or maybe even millions, if you have questions we have the answers. So you don’t have to have a minimum amount of money to have a conversation with us, we’re not that way, and so we open the door to anyone that wants to learn more about saving and planning for retirement.

BILL: Right, because that’s where you want to put that plan in place. The reality here is that if there is a 24-year old, married or not, on a regular salaried job, looking for opportunity of course, anticipates a wonderful future ahead, it’s very easy when you’re an entrepreneur though to say, ‘well every bit of money I might have available I need to plough back into my business, I need to spend that money on advertising or producing some good’, and so you can put off the initiation of the original plan, but on the other hand the person who is in employment, with a payroll and perhaps a 401K or something they can start saving but how would you advise that 24 year old, how would you offer to help that person?

ABE: Well one of the most important things I think for anyone, whether young or old, is to pay yourself first. And I know we hear that a lot but it’s actually really true and I think a lot of Americans just try to save at the end of the day or at the end of the month after they’ve paid all their bills, they’ve paid their rent or mortgage payment, all their utilities, and gas and food and cell phone and all those things and then, you know, if there’s $50 a month left over at the end of the month or $500 or more then that’s the money that they try to save for themselves. But we what recommend is paying yourself first and having that savings going into a savings and retirement plan for yourself before anybody else gets paid and that’s one of the big ways that even someone young can start saving.

BILL: Hold that thought…..Sorry, because that’s a very interesting point and I wanted to grab that before it got by me, because are you suggesting that there are ways in which your firm can establish those particular kind of pay me first accounts, is that what you were saying?

ABE: Yes, absolutely Bill, you know there’s a book called The Automatic Millionaire and when I first read it, or before I opened it up, I thought it was going to be about some investment philosophy or some crazy investment idea I’d never heard of, but actually what the idea was in the book was that we need to set up our savings and retirement plans on automatic, out of sight out of mind type of plans, just like a 410K so if it weren’t for the 401K plan I think most of Middle America would have a lot less to very little retirement savings that they have now and that’s because all of the money comes out of your pay check first before you even see it and automatically goes into a retirement plan that you can then have in the future.

So that’s a really important thing; to save on an automatic basis where money is coming out of your pay check or out of your bank account before you even see it every month and every year and before you know it years have gone by and you have money to show for it. It’s a lot easier for money to come out of your pay check or your bank account every month instead of writing a check for $100 or $1000 or $100,000 or whatever it is, it’s a lot easier for that money to come out than writing a check.

BILL: Ok, so I hear that and that’s an approach and that’s a proper one, but can you touch on the mechanics of that – OK - for our younger listeners. Here’s John or Mary and they’re saying ‘Ok, that’s great, I know save for the future and greatness will come and all I have to do is start saving’, and you know what’s going on in the bank savings accounts, what are the mechanics of actually doing this to benefit them at the highest level now, how do you set up the account, what is it, how do you do it?

ABE: Yeah, so all the retirement strategies that we utilize and that our clients utilize offer tax deferral so one of the biggest benefits in a 401K, other than maybe a match that you have at your company plan, would be tax deferral, which means all the money that you are putting into the plan, plus any interest that you’re earning on the money that you put into the plan grows tax deferred which means you’re not paying any taxes on the money that’s going into the account plus gains until you retire which would be at 59½ or older.

With tax deferral comes compound interest; compound interest is known to be the 8th wonder of the world and so with compound interest and tax deferral you have interest that compounds every year on the amount of money that’s in the account, you have interest that compounds every year on the gains that you are earning every year and then you have interest that compounds on the taxes that you would otherwise pay if money were in the bank perhaps. So being young, that 24 year old you’re speaking of, they have 30+ years to save money, to put money away and take advantage of tax deferral and compound interest and so that’s one of the main benefits that our clients receive in the strategies that we offer.

BILL: OK, but in that scenario that person – that 24 year old – may well be participating in a 401K at their business. How does that relate to what you’re drawing up alongside that?

ABE: Good question. So, the strategies that we offer, whether you’re young or old, really complement a 401K type of plan. A 401K account is a good way to save on an automatic tax deferred basis that we’ve been talking about, but if you think that taxes – Federal Income Taxes - are going to be any higher in the future than they are today and you’ve got all your money in a 401K type of plan and that taxes are even 1 % higher when you retire than they are today then can’t you see how there would be some tax risk there?

If you are going to end up paying more taxes when you retire than you are today then perhaps we should consider paying some of our taxes now maybe utilizing a RothIRA or permanent life insurance where you can pay your taxes now, put money into the account, grow tax deferred and then all the money that you put in plus gains are 100% tax free in retirement. So the strategies that we offer really complement a 401K or an IRA type of plan really well from an income tax perspective and also from an investment diversification perspective. Meaning, when you have a 401K or an IRA typically most people invest in mutual funds, stocks and bonds, and so our strategies are right in between what the bank and what the market offers growing at 5-7% a year so you don’t have the risk that you would take on on a 401K so that’s another reason why the strategies we offer really complement a 401K type of account really well. If you don’t have the investment risk that you would in a 401K or a traditional IRA for example.

BILL: So you’re playing alongside that of course but that comes back to your rules: #1 never lose any money; #2 never forget #1.

ABE: Exactly right, whether you are young or old we believe that you should really be diversified and what that means to us is having cash for emergency funds, having real estate (that’s important), having risky money perhaps in your 401Ks or IRAs and then also having safe money, and safe money strategies are exactly what we offer and there’s a real big market and a real big need for those types of strategies for most Middle Americans today.

BILL: Yeah and that strikes me to a point of my life relative to the baby boomers, with some of the research that I’ve done, this statistic is just amazing to me, because the baby boomers, those who were born between 1946 and 1964 wherein the older baby boomers are turning age 70 this year, the younger baby boomers, that last of the class, they’re turning 51 and the statistic says that of all those people those currently aged 54-64, just those 10 years prior to retirement age, of that group 25% have absolutely no money.

Now, when I speak to that and I believe it to be true because I’ve read it in several financial journals, I say to the younger people around me, ‘you have a problem; you have a problem because you’ve got millions of people who you as younger people are going to have to feed, clothe, provide shelter, provide elder health care and we don’t know how to fund that’, and so the point that I kind of relate to the younger people is, ‘we don’t know what the financial condition of the markets will be, we can’t envision the future precisely, we know that things will have to change, but that you as a younger person must concentrate on protecting your self-interest to some degree because we all want to contribute to society but we still need to protect that which is inside our own fence’. Do you speak to that, how do you see what is going on in this baby boomer economy?

ABE: Yeah, I guess going back to the statistic that you just mentioned where 25% of the people ages 54-64 don’t have much to show for, I think that the reason for that is because of the type of state that we live in such that everything is focused on spending; commercials on TV and billboards and radio, everything is focused on spending and having the newest iPhone, or computer or TV, and there are so many advertisements and people trying to keep up with their neighbors with cars, sometimes that can just get the best of us and we end up spending a lot more than we should and I know that’s the case for some of our clients and when we actually have a conversation we can actually find a lot of ways to help them save -- a lot of areas where they are maybe spending too much money, or just perhaps reallocating, redistributing and re-diversifying some of the money that they have already saved or are saving so that when they retire they have a healthy spread and diversification with all their investments.

But I think we are in a type of economy and place right now as a country when it’s all about spending and keeping up with the Joneses and having the newest car, phone and all those things and I think that can really hurt a lot of people. But I think a lot of it goes back to again to paying yourself first and just making sure that you are saving at least 10% of your income each year if not more and by doing that, by doing that smartly, you should be fine by the time you get to retirement.

BILL: In fact, hold your thought on that Abe because I want to address the fact about what to do if you have not done it, but first let me just take a short business break here.

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BILL: Ok, Abe, interesting thought because if you go beyond the gate and you can’t return, how can you recover? Well probably not, but let’s take this scenario: If you have done the correct things, and used the proper financial advisors available to you and developed this savings mentality rather than the spending mentality that you so well addressed, is there some way now …you’re 54, you’re 55, you’re 60. Help! What is a person to do?

ABE: Sure, and that’s exactly where I think we…that’s the group that we really specialize with the most, is helping people for the most part in between ages 50-55 and 70, that group of people that have about 10 years or less until they fully retire. I’m sure you’ve heard this statement before, Bill, over a long period of time the stock market usually does what? Usually goes up right, over a long period of time and we saw that from 1970-2000 especially from 1982-1999, during that 17 year period of time the Dow Jones went up over 1000%.

So I always ask our clients, ‘do you think you had a really good financial advisor during that 17 year period of time or do you think you were just in the right place at the right time?’, and they all say, ‘you know, I was probably just in the right place at the right time’. All you had to do if you were working and saving money during 1982-1999 was just contribute to your retirement accounts and save money and your accounts went up ridiculously in that 17 year period of time, but then if you take a step back and you look at 2000-2014 it’s a whole new ball game and it’s actually much more of what the market usually looks like, more of the ups and down.

We saw 3 down years in a row 2001 and 2002 and then 2008 was a huge down year and so that’s a lot of what our baby boomer clients are looking for from us, they have perhaps a Maryland’s or a Fidelity guy or another financial advisor that’s helping them with the growth and earnings of their investments. But what they are realizing, these baby boomer clients of ours, is that it’s not about what they’re earning now with 10 years or less away from when then fully retire, it’s about what they keep that counts. What would happen if we have another 2008 if we have someone who has 10 years or less away to retire?

It took the average investor 3½ years just to recoup their losses from 2008 so could our clients that are 55, 60, 65 or even 70, if we have another 2008 this year or in the future how would that effect their ability to retire? Would they have to continue working for another few years and how would that affect their retirement plan? So that’s what they‘re looking for from us, they are looking for that predictability we mentioned earlier in our conversation, those guarantees and dependability factors they can get from the strategies we offer, that offer peace of mind and really principal protection and then another big thing our clients are looking for as they approach retirement is additional sources of guaranteed income.

They may have a pension or pensions, they’re going to have social security and then typically that’s it for the guaranteed income sources that they have so we use annuities a lot, Bill, to help our clients protect their principal and create guaranteed income for the rest of their lives that they can never outlive and specifically we use indexed annuities because the fees are very, very low, typically less than 1% and there’s no market risk involved at all on their accounts.

BILL: So what strikes me Abe is that earlier in our conversation today we had spoken about your focus which is actually on the return of principal not the return on the principal and this plays to that.

ABE: Absolutely right, and actually fixed indexed annuities for our baby boomer clients so, aged 55 up to 70, 50 and older: Fixed index annuities are the most often used retirement planning tool right now and it’s because they can accomplish a lot of things for our pre-retiree and retiree clients.

BILL: So in that same scenario, as we look down through the different population groups there’s a different plan for each one and I can hear that’s the value that a financial advisor can bring because the elders, and by the way I refer to the elders as those currently over age 75, now this group of people have always been risk averse and debt averse. The baby boomers – we have never known a loan we didn’t love, and the Millennials… I guess everyone is going to get rich and never have to worry about the downside. How do you – you touched on this – it’s a little bit late when you’re over 75 because at that point you’re trying to conserve principal and before that you are trying to have principal to be able to access and the younger ones, as you’re saying, if you just get involved with a financial planner then you can set the dial and let it play.

Were you asking about how you would help someone that’s 75 and older?

BILL: Well let’s at least identify that, sure.

ABE: Well there may not be so much of an income need at 75 and older for our clients that are those ages, 75 and older, but what they still have a need for is principal protection; protecting the monies that they’ve saved so that they can last them the rest of their lives and so they can pass as much money on to their loved ones and their beneficiaries, so the strategy that we offer can still help someone even at 75 and older.

BILL: So that’s what we call the “necessary conversations” which is difficult for some families but nevertheless when you are managing affairs of the adult children of ageing parents, I mean these are the ones who not only have their self-consideration relative to their own financial preparation but here’s an opportunity for those people in their 45 to 55 year old range for example, who have concerns about their parents to be able to meet with someone such as Abe Abich to develop – an awareness if you will – and an understanding to develop a plan to protect those assets and yet provide all the care and the financial insights that are necessary to carry an ageing population into their much elder years.

ABE: That’s a great point Bill, no matter how young or old our clients are we try to help out the rest of their family as well, whether that be their children or their parents, because at some point down the road typically family gets involved. Let’s say there is a long term care need, which is a really big concern for our pre-retiree and retiree clients, is protecting themselves against the need for long term care and health assistance down the road whether it be in their home, or a nursing home or an adult day care facility, and the costs are just going through the roof year by year so that’s a really big concern we address and we can help our clients protect themselves and protect their assets from a possible event like that happening down the road.

BILL: Excellent point, and I guess as we wrap things up here, let me ask this basic question in which I am a 24 year old, I’m talking to Abe Abich, I look at you in the eye and I say “Abe, can you define for me what is a sound financial future?” How would you respond to that?

ABE: A sound financial future for me – what I think of when I think of a sound financial future and perhaps even financial freedom – is when you can have enough income coming in from your assets to pay your bills for the rest of your life.

In other words, if your bills were $100,000 a year or $50,000 a year, that you have enough income that you have that $50,000 or $100,000 a year coming in no matter what, guaranteed no matter what the markets do every single year for the rest of your life, because then once your income needs are solved Bill, you can spend and enjoy the rest of all your investments and your assets as you wish and even if you lost everything in the market, all the rest of everything that you own it wouldn’t matter because you have your income coming in that you need for the rest of your life. And to me that’s what I call financial freedom and the definition of a sound financial future.

BILL: Ok, so there you have it. Abe Abich, a man with a mission to help you become financially independent for life. You can learn more about Abe and his services on the web at - call him at 571 577 9968. But you’re going to find links and other information about what we have discussed today on the show notes page for this episode at So that’s it for today. This is Bill Hornbeck, and so long.

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