Why A Married Couple Sold Their Dry Cleaning Business Even Though They Had Cash On Hand To Weather The Storm
After a lifetime of raising three kids and building a thriving business, Joel and Maggie Johnson were plotting their escape from the monotony of pressing, ironing, mending, and sewing clothing for more than 1,000 customers.
Determined to trade in their commercial presses, washers, dryers, and boilers for a luxurious land yacht with all the amenities, they are ready to begin their new lives. Soon the salty aroma of the Pacific ocean would replace chemicals, solvents, bleach, and detergents.
Joel and Maggie sat at the kitchen table, exchanging random thoughts about life and business over their morning coffee. A tingle of nerves and excitement hung in the air as they stared in disbelief at the check from the guy who bought the dry cleaning company they had owned for 20 years.
They struggled with the reality that it was time to sell the house where they raised toddlers and argued with teens who grew up and abandoned the nest. Their adult lives revolved around the kids. After overcoming trials, tribulations, and adversity for years, they came out on top with a new lease on life.
Maggie married Joel, knowing he was a shop owner. She grew up on a Georgia farm and was no stranger to early mornings and hard work. Together, they decided to build up the business and make it the centerpiece of their lives.
They worked 80-hour weeks often and rarely took vacations as they built a legacy of stability for the children. The shop was their home as much as the house was. It had been good to them over the years. They were able to open a second location in town led by Joel's brother. Their four kids had all worked at the shops at different times growing up, giving them pocket money and experience to use on resumes for future endeavors.
In his spare time, Joel studied the investment markets. He bought books, watched tutorials, and kept track of changes in the stock market as it rose, fell, recovered, and fell again. He took pride in his ability to grow their savings.
Joel checked his portfolio every morning on his phone before work and fielded calls from Maggie asking for updates. His wife was nervous about the economy and unpredictable market gyrations.
She began an exhaustive online search for safer investments. The prominent financial planners and analysts served up charts and graphs showing that the market went up most years for a half-century, delivering annual gains of about 10%.
Then she came across a fascinating podcast about income insurance, technically fixed index annuities, that would protect her family's life savings from stock market losses and provide income for the rest of their lives after selling the business.
Steve Wheeler, the family’s financial planner, was immersed in his Peloton workout when he got the call from Maggie. She told him about the podcast she stumbled across online and solicited his expert opinion about the lifetime income insurance she discovered.
Steve told her that insurance was not an investment. He said annuities focused on protecting her money while his mission was to grow it. He insisted that the upside would outperform the conservative, plain vanilla annuity she heard about online.
With his trading skills, Steve was confident that Maggie and Joel would get better gains holding their positions in the stock market instead of tying their money up in an annuity. He reminded her that he grew the account despite the 2008 housing crisis, rising inflation, and political turmoil.
Then the global pandemic changed everything. In 2020, the business Maggie and Joel had spent over two decades building was slowing down at an alarming rate. People were working from home and no longer needed freshly pressed business attire.
They closed the second branch, causing a rift in the family when they had to part ways with Joel’s brother. But he and Maggie felt they had no choice. They needed to redirect all their remaining energy to keeping the doors open at the original location.
The stock market was volatile, rising and falling so quickly that it was difficult to decide which stocks to buy, hold or sell. As a result, Joel and Maggie went on a daily roller coaster ride that wasn’t fun anymore. By the end of 2020, half of their savings and investments had disappeared.
Every morning when Joel checked his phone, his heart sank. A cloud hung over him as he came to work each day. He joked darkly to Maggie that investing in the stock market now felt like pure gambling and that it would be cheaper to go to Las Vegas and bet it all on black at the roulette wheel.
A year later, Joel and Maggie were hanging out in their outdoor kitchen when Maggie broached the subject of selling the business. She felt it was time to quit while they were ahead. Joel agreed they couldn’t afford to risk losing even more money to the pandemic.
Maggie was driving to their daughter's house across town later that afternoon, thinking about their conversation. She remembered what the fixed index annuity expert said about how much more enjoyable life would be with the security of guaranteed lifetime income.
Later that night, she expressed her frustration with Joel for being close-minded about her idea. She told him his stubborn attachment to the stock market could cost them their life savings.
Joel realized for the first time that she might be right. When riding a bull market, he thought he was a master of the universe like the heavy hitters on Wall Street. But when the dark cloud of recession, high inflation, and war in Ukraine hit, his high-flying tech stocks fell off a cliff, wiping out 50% of their portfolio in less than three months.
When Maggie revealed that her doctor said he couldn't do anything more to treat her insomnia, Joel knew his massive losses were the root cause. Blood rushed to his head, and his heart dropped to the pit of his stomach. Joel finally agreed to meet with the fixed annuity expert from the podcast.
A few days later, Bob Lindquist from Safe Retirement Strategies was sitting in their living room, reassuring Joel that he would still participate in the market's upside. He explained that brilliant money managers focus on growing the stock portfolios in these fixed index annuities.
What resonated with Joel the most was when Bob explained that at the end of the year, the money managers sweep any gains off the table, removing them from exposure to market risk and locking in the profits for life.
In a down year, their principle would be 100% protected from market losses. Meanwhile, Bob could guarantee that the couple would receive an income of $30,000 a year for the rest of their lives. In addition, Bob assured them they could never run out of money because even if they depleted the funds in their account, the insurance would keep paying out $30,000.
Maggie heard words like safe investments, fixed annuities, and lifetime security. Now she was ready to move their funds and proceeds from selling the dry cleaning business to the index annuity Bob recommended.
Listen to the podcast that changed their lives here.
They were filled with emotion and a few lingering doubts when they signed the papers. Maggie's eyes welled up with tears, and Joel hugged her, whispering in her ear that the best years of their lives were ahead of them.
Joel hugged her as they walked to the car and promised her that the best was still yet to come. The transition was both nerve-wracking and enticing. The life of a nomad sounded so new and romantic, and they had years of freedom stretched out in front of them.
Later that year, Maggie and Joel stood on the deck of a small Catamaran as the orange sun slowly descended over the ocean. They had sold the empty oversized house and bought a luxurious mobile home with a dirt bike strapped on the back.
It was their first trip together in over twenty years. A road trip to an outdoor music festival in Colorado was up next. Maggie was sleeping soundly again. After tapping glasses of champagne, Joel asked if she wanted to play a little roulette later. This time it would only be for fun.