The Importance Of A Financial Plan

If you want to get somewhere important, you would use a roadmap. Hosts John and Giuseppe preach the same thing. They are experts at creating roadmaps also known as Financial Plans, including Strategies our hosts use, Diversification, and specific Investments. The Wise Money Guys.

Episode Transcript

Speaker 1 (00:00):
The Wise Money Guys Radio Show is brought to you
by One Source of Wealth Management SEC Licensed three one
nine zero seven eight. For disclosures and more information, visit
our website One Source WM dot com.

Speaker 2 (00:13):
Welcome to the Wise Money Guys Radio Show. I'm your
co host John Scambrian. I'm here with my partners and
we are certified portfolio managers that specialize in helping people
who are retired are about to retire manage their money.
As always, if you like our show and have some
questions or want to get together for a no obligation consultation,
give us a call at nine one six nine six

(00:35):
seven thirty five hundred. Also know that if you're in
the Bay area, or if you're in the Nevada area,
we have a convenient office that we use in the
Walnut Creek area as well as in the Reno area. Again,
give us a call at nine one six nine six
seven thirty five hundred. You know, I thought we'd start

(00:56):
this morning by just diving into our background a little bit.
We haven't done that in a while. Giuseppe and I
have both been in this industry for a very long time.

Speaker 3 (01:06):
Oh, you don't want to start like where I grew up, Yeah,
where'd you go.

Speaker 2 (01:10):
To nursery school?

Speaker 3 (01:11):
I first learned how to ride a bike.

Speaker 2 (01:15):
But both of us are California boys, California natives, San Jose.
For me, I grew up in the Bay Area. Giuseppe
grew up in the South Bay. And let's see, I
got in the industry in nineteen ninety two and you
got in the industry in eight. I love saying that,
because what a time two thousand and eight to get in.

Speaker 3 (01:34):
Oh, it's a wild roller coaster ride. But both of.

Speaker 2 (01:36):
Us have experienced major market malaise, corrections, crashes, you know,
whatever you want to call it, Giuseppe, starting in one,
me going through the dot com crash, then to the
financial crash, then to the twenty twenty two inflation crash,

(01:58):
and many many poll Oh, don't find it's funny. How
could you forget the COVID?

Speaker 4 (02:05):
So I guess it's so traumatic for you just you
have to go through counseling like hypnosis to remember it.

Speaker 2 (02:11):
And what's so important about that is when you're working
with somebody and certainly you're seeing how well the markets
are doing right now, but don't forget what they could
turn around to do and do to you if you
take your eye off the ball, and that's where we
come in. We do this obviously full time. We've done
it for a long time. We've done it through many

(02:33):
different types of situations, good and bad. Good economies, bad economies,
a mess of things going on around the world, things
being peaceful around the world, you name it, whatever the
situation is. There are always great investments that are out
there for people at all walks of life, with all

(02:55):
varying degrees of comfort for investments from fixed and get
guaranteed to very speculative. So don't let the opportunity to
come in for a no obligation consultation pass you by
by calling John and Giuseppe the wise money Guys at
nine one six nine six seven thirty five hundred. So

(03:17):
part of our show is always talking about, you know,
what's currently going on, So we're going to do some
of that. It's also about some of the strategies that
we employ as well as you know, things that you
could use if you're stubborn and managing your money yourself.

Speaker 3 (03:35):
And or or maybe just getting started, or maybe.

Speaker 2 (03:37):
You're just getting started. You know, you were playing around
with some numbers just to show how quick somebody could
save one hundred thousand dollars. You know, I know for
kids that are and I say kids being in my fifties,
but kids that are in their twenties and thirties. You know,
having one hundred thousand dollars saved might seem like a
monumental task. But what was it. I mean, five hundred

(03:58):
bucks a month for fifteen years at seven percent gave you.

Speaker 4 (04:04):
Yeah, if you were to put away five hundred bucks,
which basically these days you kind of treat as a
car payment, right, Yeah, I guess depending on what kind
of car you have, but for a typical car, for
maybe somebody who's out of college, has been out of college,
has been working, maybe has some experience for a few years.
But putting away five hundred bucks a month for fifteen years,

(04:26):
earning an average annual return of seven percent, that turns
into some of over one hundred and thirty one thousand dollars.
So if you were to increase your contribute, that's just
keeping five hundred bucks sam over across fifteen years.

Speaker 2 (04:38):
Obviously, if you made that one thousand a month, or
if you earn ten percent, it's going to be a substantial,
or you kill money, or you.

Speaker 4 (04:45):
Can start off with that, right and the next year
maybe you get raised from your job, and then you
take part of that raise and increase your contribution, right,
and that just adds to it.

Speaker 2 (04:54):
Yeah, Again, our specialty is working with people who are retired.
They're typically empty nest they have no debt. They're either
relying on their investment assets for a portion of their
retirement income, or they're building their retirement nest egg or

(05:14):
their personal wealth to create their legacy and pass on
to the next generation or charities or whatever the case
may be. So if you're out there and you have
I would say more than two hundred and fifty thousand
or more than five hundred thousand dollars, especially if it's
just in mutual funds, you're probably past that. And there's

(05:37):
a whole world of investments out there like that fall
in the alternative space that are low correlated to stocks
and low correlated to bonds that many people aren't aware of,
that pay distribution rates of seven percent or more annually,
and they don't they don't go up and down as

(05:59):
wild as stocks. And speaking of going up and down wildly,
we're in that September month, and if you're just listening
to us for the first time and haven't been listening
to us for years. We always talk about how September
and October can be very volatile months, and historically September
is the worst of the year.

Speaker 4 (06:20):
August through October. It's a seasonality. But you know, August.
We just went through August and actually wasn't bad. We
had I think.

Speaker 2 (06:26):
One day we had a point and a half pullback.

Speaker 4 (06:30):
Yeah, depending on the industry that you track, but that
was really about it.

Speaker 3 (06:35):
I mean, it was it was it was that was
the biggest Today, the big kind.

Speaker 2 (06:39):
Of puts me on edge. You know, the fact that
we haven't had a five percent or a ten percent
pull back again after reaching all these new records. The
S and P is basically trading at record multiples, you know,
and it's September, which is typically not a good month

(07:00):
for the year. Now this could be different because everybody's
talking about, oh, they think I almost said green Span,
but they think Jerome Powell. And that tells you how
long I go back. You're going back to the nineties.
I go back to the early nineties. But you know,
they're betting on Jerome Powell with a quarter of a
percent FED funds cut, which pretty much to me is

(07:21):
baked in. So strategically if he doesn't, if.

Speaker 4 (07:26):
He doesn't when they do have their meeting this month,
it might be an excuse to sell off. Yeah, right, Well,
because well, I guess the other way to put it
is how many things have to continue to go right
to keep these levels where they're at right versus And
we saw a little bit of a sell off in
video they posted earnings, right, it was much anticipated, almost

(07:50):
as much as the film c meeting and Jerome Powell.

Speaker 3 (07:52):
Speaking, But they posted earnings.

Speaker 4 (07:55):
I think they disappointed a little bit on their something
dealing with the data centers, and the stock sold off, right,
and it was in the one low one eighties, and
then it got to like one high high one sixties,
and I was floating in the one seventies. But if
if the baked in anticipation, I think it was like
ninety something percent anticipation of a rate cut.

Speaker 3 (08:18):
If that doesn't happen, yeah, you'll see volatility pickup for shuit.

Speaker 2 (08:21):
You know, strategically we're talking about, you know, the risk
to the market correcting here a bit, especially with valuations
and just everything priced to perfection. And this reminds me
to tell people how important it is to have a
financial plan. I don't care if you're retired. You have

(08:43):
all the money you're ever gonna need. You know, many
of our clients have millions of dollars, but they still
have a financial plan, and often we go back to
that financial plan and we update the numbers, and that's
included in our annual advisory fee. By the way, we
don't charge separately for a financial plan. But what that
does for you is listen, if based on your situation,

(09:06):
your goals, your objectives, your tolerance for risk, your time horizon,
your potential longevity, your risks to your longevity, and on
and on and on, that we put and create in
your financial plan. The reality is it might show that
you only need a five, six, seven, eight percent return

(09:26):
to accomplish whatever your goals are. And when you have
that sort of roadmap in place and we're expecting some
sort of pullback, you're not watching the TV every morning
worried about it. Because as long as you're on track
for your plan and your plans goals each year, then

(09:48):
that's all that matters. Then if we get a five
percent pullback, You're not going Oh god, I got you know,
I was going for a ten, fifteen, twenty percent return
and now I'm down five. I got to pull out,
and then oh gosh, I don't know when to get
back in, and then I see everything going up, and
then I get back in. That's just not what you
want to be doing, especially if you're in your forties, fifties, sixties,

(10:11):
seventies or eighties. Most of our clients, I would say,
are what between fifty and eighty five years old. I mean,
so they're retired and they don't lose a wink of
sleep with us at the helm were planning place, we
leave to sleep, we lose the sleep for you. Right, well,
hire us to lose sleep for you. But honestly, that's

(10:35):
what you should be paying for, somebody to take the
worry out of your money and your financial situation so
that in retirement you can travel, you can do what
you love to do, whether that's golf, or spend time
with grandkids. Shoot. Many lots of our clients have great grandkids,
so on and so forth. So we've been through this

(10:58):
so many times. September is notoriously not a good stock
market month. But if you have a plan, a financial
plan in place, and you're not taking any more risk
than you should, which we call minimum return to objective.
So simply if that says you only need a net

(11:21):
net of fees, net of costs six or seven percent return,
that's what your portfolio and your plan should be designed
to create for you. And then you're not going to
be as worried when you know we're in September, October
or the markets are at all time highs because many

(11:42):
of your investments to get those types of returns six seven,
eight percent will be based on what dividends the investment
paget's interest, right the investment.

Speaker 3 (11:53):
I mean, unless.

Speaker 4 (11:54):
April just took all the volatility for the year and
we're just going to continue.

Speaker 2 (11:59):
To plug along because we literally had a twenty percent
crash in April. Yeah, the S and P was minus
twenty percent in April.

Speaker 4 (12:06):
I know, I was actually talking to a client this
week and one of the stocks.

Speaker 3 (12:12):
That he has.

Speaker 4 (12:15):
That he accumulated working for the company for years went
down basically cut in half in April, and then now
it is doubled from where the low point was in April.
So we took advantage of it and sold off some
of the shares even though he's gonna have to pay
capital gains yep, just because it's now at like a

(12:37):
very high point.

Speaker 2 (12:38):
Yeah. And that's another benefit of working with financial professionals
like Giuseppe and I money management professionals, is that we
have if you are a stock investor, we have a
couple of models that we have created that clients have
been in that are back tested for over ten years,

(13:01):
but clients have been in going back to twenty twenty two,
which basically bought the dips and now are just the
returns are absolutely fantastic. And if you'd like to see
some of those things, give us a call at nine
one six ninety six, seven thirty five hundred. Let us

(13:22):
show you how and what we're doing with today's you know,
record breaking highs in the market, with finding good fixed
income rates, with finding alternative investments like or alternative strategies
like structured notes and things of that, or option strategies.
You mentioned one of your clients who has a lot

(13:44):
of stock in his company. That's where we could do
covered calls and well, we're not going to go into
all those things, but the point is, there's so much
more out there, especially if you're just in mutual funds
or you're in just a vanilla straight stock portfolio. We
use strategies like active management, rebalancing, you know, stock selection

(14:09):
that's based on filters and screens that we've set up
based on our years of experience that many people just
can't do themselves. Yeah, I mean they could if they
were if that's what they were doing full time.

Speaker 4 (14:22):
Well, and you have to have the resources as well, right,
and access some of the things that we have access to.
The regular retail investor does not. So if you have
a regular Vanguard or Fidelity account, like we have access
to Fidelity in Schwab and Pershing and gold Mid interactive brokers,
but we're on the institutional side. It's very different than

(14:43):
just somebody creating a regular brokerage at retail brokerage account
or maybe they rolled over their IRA into the Fidelity
right because they had Fidelity.

Speaker 3 (14:51):
As a plan advisor before wherever they worked.

Speaker 4 (14:55):
You're not going to have similar access to some of
these funds, especially in the alternative sector. And it's ever evolving.
There's new things coming out all the time every year.
I mean just recently I sent out and I was
talking to you earlier this week about an investment opportunity
in real estate that is available. And it's somewhat unique

(15:19):
because the special tax one.

Speaker 2 (15:21):
Correct.

Speaker 4 (15:22):
Yeah, so it's a DST Delaware statutory trust. But typically
people who have real investments real assets, meaning they.

Speaker 2 (15:32):
Have part assets at homes things.

Speaker 4 (15:34):
Maybe a couple rental properties, right, and then they decide
they want to sell them, and they don't want to
or they haven't identified another property to do a ten
thirty one exchange. Right. They take the proceeds and they
can put it into a DST, which is a portfolio
of real estate assets, right that's professionally managed through some

(15:55):
investment firm. And there's several out there. A nice thing
about this we want to have access to, right, And
this one that's newer. I haven't seen something like this
because it has equity like returns. When you're looking at
the total return, right, So when you look at the
income plus the capital appreciation that it's that it's generated
in the past five years, it's just under thirteen percent

(16:18):
a year.

Speaker 2 (16:18):
Right, and then you take into account that they pass
on losses. Right. So from a tax perspective, so they're
very on that depreciation, the.

Speaker 4 (16:26):
Very efficient and the income that they've averaged in the
last five years is six percent, right but four so
far ninety four percent of that income that is generated
that the client collects is non taxable. So which is
perfect that first, perfect for a taxable non qualified account
or somebody that's a higher and a higher tax practice.

Speaker 2 (16:46):
So many people think that, you know, one of the
great ways to go is, and we agree for the
most part, is having some investment real estate. However, the
downside to having investment real esat state is, especially if
it's just a single family rental property, is you got
to keep it rented and then you have to you know.

Speaker 3 (17:07):
Maintain it. You're going through through right now.

Speaker 2 (17:09):
We do a remodel of my dad, who's his tenant's
moving out, and it's a pain, and then we'll have
to you know, re rent it and hopefully we get
a renter in there soon. Otherwise it's just a wasted
you know, asset. But okay, so let's say, you know,
and I'm a good example, my dad's a good example.

(17:30):
Here comes this other real estate investment because most of
the time in where you're actually renting a physical home out.
You know, you're shooting for a six or seven percent return,
right because let's say the house is worth like in
my dad's case, probably four fifty, maybe five hundred, but

(17:52):
he's only getting less than two thousand dollars a month.
So but let's just say he's getting five percent return
for you know, simple you know what in giggles. But
then you got to pay property taxes. He pays, he
pays the for the front yard to be mode almost insurance,
he pays homeowners insurance. So his net return is probably

(18:15):
more like three and a half. Now, the other thing
you're hoping for is that price that home has appreciated value,
and over a long period of time it has. But
the easier way is when you pull your money into
these real estate investment trust type of products where there's

(18:36):
no commission. By the way, this is still done it,
you know, in an advisory fee capacity.

Speaker 4 (18:42):
And with us it could be if you're doing like
the traditional rates or private reads through typical brokerage firm,
they'll charge of commission.

Speaker 2 (18:51):
Yeah, and I would stay away from private non publicly
traded rates that make sure that whatever well you're doing
that they do have some sort of tender.

Speaker 4 (19:01):
There's pros and cons and that's what I was That's
what I was getting at within this one that this
is pretty unique because you have quarterly redemptions or you
can go once a quarter if you need to take
some right. But the other thing is that you don't
actually need to transfer. You don't need to have a
property to sell and then take the proceeds to transfer.
In this they're taking actual you know, just funds.

Speaker 3 (19:23):
So some of.

Speaker 4 (19:23):
Our higher income earner or higher tax bracket clients that
have a taxable account there and we're find trying to
find ways how can we further diversify your assets beyond
just stocks, bonds, cash, Some alternatives.

Speaker 2 (19:38):
Get you a six percent return with over ninety percent
of it not taxable. Yeah, that's insane. That's way better
than anything we could do for you in them Mune.
And it's not market and it's not volatile.

Speaker 4 (19:50):
Right when you look at the past five years, it
hasn't been vault where you have all these big swings
up and downs. Especially twenty twenty two had a positive year.

Speaker 2 (19:56):
Yeah, most real estate investments are just I mean, unless
there's wild swings and interest rates. That's when you tend
to see some of these rates react to the wild
swings and interest rates. But interest rates aren't going to
go higher, So well I should don't you You never know.
But let's assume interest rates stayed the same or head

(20:18):
lower then, or head lower then I think you'll see
some good price appreciation on top of the almost tax
almost tax free six percent.

Speaker 4 (20:29):
Right and so, But then but then we have clients
sometimes where they have a uh, you know, set aside cash,
and we say, what's the cash for? Oh, I want
to wait until the market softens up a little bit,
the real estate market and I'm going to go and
invite a rental property. Well, sure you can go do that,
but where's the cap rates right now? Just like you
were talking about earlier, you're lucky to get maybe four

(20:51):
if you get five percent cap rate, I mean, that's
super exciting.

Speaker 3 (20:54):
It's very hard.

Speaker 2 (20:55):
What's so exciting?

Speaker 4 (20:56):
Yeah, with how expensive are and and they've been resilient, right,
I mean the real estate market has softened a.

Speaker 3 (21:03):
Little bit, but nowhere near where.

Speaker 4 (21:06):
Most people thought it was going to be because interest
rates were so high, and it's just been kind of
you know, sitting status quote for now. So here's another
way where you can put capital work. You're invested in
real estate specifically, and there's actual properties that you can
see within the portfolio that are part of that ownership
that you have, and you're getting six percent income.

Speaker 2 (21:27):
Okay, So you're listening to the buys many guys, John
Scammery to Seppivskani, and keep in mind that when we're
talking about specific types of investments or returns, that past
performance is never a guarantee of how something will perform
in the future. If anybody says any sort of investment
is one hundred percent guaranteed, can never lose you a dime,

(21:51):
run from that person. Do not take advice from that person.
All investments have some types of risks. So for more information,
give us a call at nine one six nine six
seven thirty five hundred, or you can visit our website
which is wisemoneyguys dot com. For important disclosures and information

(22:11):
scroll to the bottom of the page. Also, if you
want to see us recording this show, you can watch
us on our YouTube channel which is at the Wise
Money Guys. Just search the Wise Money Guys and scroll
until you see our very pretty faces and click to listen.
To our show. So let's talk about what the other

(22:35):
investment that and again we're talking high level right now.
We talked about a DST and real estate investment trust.
What some of the benefits of those are, especially if
you need income or if you just need a return
that has some tax advantages to it. But there's another

(22:56):
that if you're looking for a better than bank like
turn with lower volatility, a lower measure when it comes
to standard deviation, which is a measure of risk to
the stock market and to the bond market. Now, bond
market people always equate with conservative you know, no risk

(23:19):
and quite frankly, if you hold government bonds till they mature,
or most corporate bonds to they mature, you're guaranteed.

Speaker 3 (23:26):
If you if you hold them individually, not through.

Speaker 2 (23:28):
Individually, you're guaranteed to get back your principle and any
interest rate that it says it pays you. Now you know,
this particular investment is called an alternate falls in the
alternative space. It has private credit, private debt, hedge, private equity,

(23:51):
all kinds of things that the average person cannot get
access to unless it's through guys like Giuseppi and I
and are firm, which, by the way, the Wise Money
Guys Show is brought to you by One Source Wealth
Management powered by Farther uh SEC number three one nine
zero seven eight. There I got all this she gave.

(24:12):
For more information, give us a call at nine one
six nine six seven thirty five hundred or visit our
website wisemoneyguys dot com. Now, but getting back to this investment,
I mean, this thing is unbelievable. I mean, that's S
and P. What's the S and P standard deviation? On average?

(24:32):
Isn't it like fifteen to seventeen, fifteen to seven?

Speaker 4 (24:36):
Sometimes sometimes like this past five years, it was actually
a little higher at some point.

Speaker 2 (24:39):
Which think of it this way. That just means that's
a very big roller coaster ride from you know, peaks
and dips now the bond market. So just if we're
looking at say the aggregate bond index, what's the typical Well,
if you look at the deviation, if you look at the.

Speaker 4 (24:59):
Past five years, it's actually gonna be higher because because
twenty twenty two was a very wild ride for bonds
that we had.

Speaker 2 (25:06):
So that's what you should plan for. You should you
should plan for? Yes?

Speaker 4 (25:10):
And no, I mean that was that was a big outlier, right, because.

Speaker 2 (25:17):
You're not liking that answer, Hey, whatever I mean, but
that's the fact.

Speaker 4 (25:22):
But the bond market blew up in twenty twenty two,
and it hadn't seen that, you know, as far as
getting impacted as much as it did for like forty years. Right,
So we were and we were in very low interest
rate environment. Now it could happen again, but still the
standard deviation was what five or five or six.

Speaker 3 (25:42):
Usually it's a little bit lower than that.

Speaker 2 (25:44):
For a much smaller roller coaster ride, but still you know,
some peaks and valleys. And then you look at this
alternative investment that you have to call us or come
sit down for a no obligation consultation. Oh or if
you're in the Reno area or going to be in
the Reno area next week, then you can come to

(26:06):
our seminar from six to seven thirty pm at the
Twisted Fok on September tenth in Reno. Call us at
nine one, six, nine, six, seven thirty five hundred or
seven seven five four one five two six seven seven,
and we'll show you specifically how this investment might apeace
might make sense in your portfolio. But again this thing's now,

(26:27):
what's this.

Speaker 3 (26:28):
Back in the threes?

Speaker 2 (26:29):
Yeah, in the threes, way less threes.

Speaker 3 (26:33):
As far as.

Speaker 4 (26:33):
Standard deviation, which is a measurement of volatility risk, the
return overall average return that has been putting out is
about eight. The distribution for income is seven percent, and
that's their target that they try and shoot for every
year which has been performing at And then the income
or the frequency of when you get the income is monthly.

(26:54):
So it's perfect for one either just a diversifier. You
can reinvest those those dividends or to you know, for
like most of our clients who are retire and want
some sort of cash flow, they can have that monthly
stream of cash flow from the investment. But you're not
taking that big risk, right.

Speaker 2 (27:14):
And you mentioned the word diversification, and I'd like to
expand upon that a little bit because most people think
diversification is mutual funds or diversification is having, you know,
mutual funds of many different brands, and then diversification of firm.
So I have a Vanguard account, I have a Fidelity account,
I have a Wells Fargo account undiversified. But the reality

(27:38):
is is that when we see most people and what
they've done. They're not diversified at all, right, And so
some of diversification really has to do with how an
investment moves and zigs and zags in relationship to another.
So if you want true diversification, then you want an

(28:00):
estate that has a lower standard deviation. Then say stocks,
then say bonds.

Speaker 4 (28:06):
So if you have a electric vehicle and a gas
powered vehicle, electrical grid goes down, or we have a
brown up because it's one hundred and ten degrees and
everybody's AC's going yep, you can't charge your ev no problem.
You get in your gas powered car, right. What if
you get in your gas powered car and you go
to lunch and you run out of gas.

Speaker 2 (28:25):
Then I don't know anybody who does that. Then what
in my defense I have. I have an old truck
and the gas gauge you know, is pretty accurate, but
clearly not accurate enough.

Speaker 3 (28:40):
So we do to the down to the line.

Speaker 2 (28:44):
But but but you know, in comparison, you're right, I mean,
that's one way to look at it. An electric vehicle
is truly diversified over a gas vehicle.

Speaker 4 (28:55):
Versus you have two electric vehicles, your gas, your concentrat
and then the power greed goes down, you know, and
you can't charge and not your stock.

Speaker 2 (29:05):
So strategy tip number three is know what diversification is
and work with somebody who truly knows how to diversify
truly your portfolio so that not all of your investments
in all of your different accounts overlap. That way, if
something's not doing well, maybe something else is doing okay

(29:29):
or doing better. That's diversification. Having one stock fund in
one brand, and another stock fund and another brand, even
though they come up with different fancy names, is not diversification.
A bond fund is definitely not diversification. A bond fund
can be just as risky as a stock fund, especially

(29:50):
in periods of you know, volatile interest rates and interest
rate and monetary policy, so keep that in mind. But
if you're confused about these things or don't know if
your portfolio is truly diversified, and you don't know what
dividends and interest rates you are getting, and you don't
know what the tax consequences of those interest rates are,

(30:15):
you'll definitely want to call us at nine one six
nine six seven thirty five hundred for a no obligation consultation.
Again that number is nine one six ninety six seven
thirty five hundred. And whether you're in the Bay area,
the Greater Sacramento area, or up the hill in the
Reno area, we have an office conveniently located to meet

(30:36):
with you in person. So give us call at nine
one six nine six seven thirty five hundred. And I
should mention that we're certified portfolio managers. And Giuseppe also
has a master's in economics and finance and is a
chartered retirement Planning counselor and has an undergraduate degree in economics,

(30:56):
business business economics, business economic Well that's mine, business marketing.
Oh but education is important and we are students of
this game. But you can't replace experience. And so we
were talking about some of the strategies that we employ,

(31:17):
that you develop and you get better at through years
and years of experience, and just to recap on some
of those. First of all, we think you should be
locking in some profits. Here, not saying get out of
the stock market, because I truly think other than maybe
you know a minor pullback, that that might be opportunities

(31:39):
to redeploy cash or rebalance. So in essence, we're saying
by the dip. But if you've got it thirty fifty
seventy one hundred percent profit in something and you don't
sell some shares to lock that in, boy, that's just
that's just foolish in our experience. The other thing is

(32:02):
is that we mentioned that we focus on, you know,
obviously taxes and what sort of tax consequence investment returns
have or don't have. We mentioned an investment strategy that
it's six percent distribution, over ninety percent of it isn't taxed.

(32:25):
And then we also talked about how important looking at
standard deviation and correlation and having true diversification is when
it comes to your investment portfolio. All of these things
will help you sleep better at night, none more than
the other thing that we talked about, and that's where

(32:45):
we're going to finish most of our conversation this morning,
is having a financial plan, having a written roadmap. And
so you know, our process is one that we ask
all people to complete a planning questionnaire and and that's
really if you need it or not, I mean, what

(33:07):
do you think the true benefit is? At least from
a process perspective, it's a great way to start a relationship,
potentially with an advisory firm.

Speaker 3 (33:17):
Well, at the least it puts it puts both parties
on the same.

Speaker 4 (33:20):
Page, right, because sometimes you know, you can say, well,
you know what, what what's your risk tolerance? That always
comes up as a question when you're, you know, first
working with a financial advisor or somebody that's going to
be handling and managing your assets, is what's your risk tolerance?
Are you aggressive? Are you moderate?

Speaker 3 (33:40):
Are you conservative?

Speaker 4 (33:42):
And that person can say, oh, I'm I'm conservative, but
I've had conversations with with clients or prospects and saying yeah,
I'm conservative, And then we start discussing further.

Speaker 2 (33:55):
But are you going that Well, there's there's, there's.

Speaker 3 (33:59):
That is that.

Speaker 4 (34:00):
But then they said, well, what do you think is
going to be like in the portfolio? Like the blue
chip stocks and you know, uh, maybe like Dow and
S and P five hundred And I said, well, I
thought you said you were conservative. And I said, yeah,
but I want to I want to have like, you know,
blue chip stocks, maybe some dividend paint stocks. I said,
so like one hundred percent stock portfolio, yes, but dividends,

(34:21):
I said okay.

Speaker 3 (34:23):
I said, okay, So.

Speaker 4 (34:24):
We need to align here because a conservative portfolio is not.

Speaker 2 (34:27):
One hundred percent stocks, not even close. It's not there.
Think their they're.

Speaker 4 (34:32):
Thinking, I want to go one hundred percent stocks, but
I want to be more conservative. I don't want to
be like small cap you know, smaller companies or high
flyers or very volatile stocksting. I'm thinking, yeah, I'm thinking
of like Procter and Gamble and Johnson and Johnson and.

Speaker 2 (34:46):
So on and so forth.

Speaker 4 (34:47):
So to the least, what put you know, going through
the exercise of putting a financial plan together and having
that dialogue and interaction with a client or prospect.

Speaker 2 (34:58):
Is number one.

Speaker 4 (34:59):
We sent out a question That questionnaire goes out to
that individual or a couple or family, and then they
go through a series of questions that they answer and
we tell everybody there's no right or wrong answer right,
it's not a test, and they go through that process.
It comes back to us, and then we can open
it up on our end, see all the answers, and
then go back to them and ask them questions. If

(35:20):
there's things that we have, you know, we see discrepancies
on we need to make some adjustments or tweaks, and
then we start fine tuning it and then we can
have a better a better time as far as having
that dialogue and finally getting on the same page, because
one of the parts of the financial plan is going

(35:42):
over risk. But it actually shows you, you know, hey, your
risk scale from zero to one hundred. You know, this
is where you would be at if you were at
a twenty five. This is the type of portfolio and
assets that you would have in general. And then what
would happen if you had this type of portfolio allocation
in two thousand and eight with a recession? How much
would it have gone down based off of the investment

(36:04):
assets that you have that are able to be invested.
It gives them a good perspective of oh, yeah, okay,
I'm comfortable with that, and another market's going to come
back up, or yeah, you know at this certain point here,
that's just going to make me worried and stressed out
and I'll probably calling and tell you to sell everything.
So what it does is it gives us a very
good idea of number one, putting both parties on the

(36:26):
same page to the least, but then moving more into
the details. It's looking at all the goals, right, not
only just retirement in general of how much do you
want to spend in retirement to cover all your needs?
But then maybe you want to travel budget right, and
separate that out because most people want to travel. They
have more time in retirement, but they're not going to

(36:46):
travel throughout all of their years until the day they died.

Speaker 3 (36:50):
Maybe they will.

Speaker 4 (36:50):
If you're lucky, but most clients that we see, they travel,
you know, maybe ten fifteen years, a little bit heavier
in retirement to really enjoy the retirement years, and they
start slowing down.

Speaker 2 (37:00):
You get heavier when you travel, are you?

Speaker 4 (37:04):
Are you?

Speaker 2 (37:05):
Especially if you go on a cruise, you get you
get heavier. Sorry to interru but I could resist.

Speaker 4 (37:11):
Yeah that could be the case, right, But but it's
finding all the right or hey, I want to help
my my daughter out, she's going to be getting married soon.
Or maybe a down payment for a house for one
of my kids, or education, you know, funding education or
helping to fund education for my grandkids, on and on
and on, and we can we could separate all these

(37:32):
little goals out and then put in all, right, here's
all your assets that you have to contribute towards retirement
factor and inflation right, factor in taxes two and.

Speaker 2 (37:42):
A half as our inflation measure, right.

Speaker 4 (37:47):
And that could be adjusted depending on higher or lower Yeah,
depending on how inflation continues on these these coming years.

Speaker 3 (37:54):
And then we factor in taxes as well.

Speaker 4 (37:58):
Some some questions we have from client and so are hey,
should I do a wroth conversion or what's a backdoor
wrath conversion?

Speaker 3 (38:04):
We can talk more that maybe in future episodes.

Speaker 2 (38:06):
Do you do calculations on that as well?

Speaker 4 (38:08):
And so those are the things. You know, what happens
if both of us pass right? What happens with you know?
Should I collect solid security at sixty two? Should I
wait until you know? Full retirement at sixty seven? Should
I defer it until seventy? What happens if you know
your you pass away, you have a pension and your
social security weppens to your surviving spouse. So all of

(38:28):
these things we dig into, and we also can create
what if scenarios? Right, Okay, here's perfect plan. This handles retirement.
You got a high probability success. But then what if
you have a long term care event, you get sick
and your expenses go up, you have to go live
and assisted living, and now you're you know, spending six
or ten thousand dollars a month for that, how does

(38:49):
that impact all your other goals that you want to achieve?
And then from there it really lays the groundwork and
foundation and then all these different things that we talked
about alternatives and real estate, in stocks and bonds and
different opportunities to put your money to work and invest.
What's going to be the rent mix up of what
you need? And it's really what it's telling us is
how hard your assets need to work in order to

(39:11):
achieve your goals and have a high probability of success.
So we're not worried about you running out of money
at some point in time and retirement.

Speaker 2 (39:18):
Keep in mind once again that we include planning with
our advisory fee. We don't charge separately for it, and
in fact, we do a base financial plan for clients
just coming in to meet with us for a no
obligation consultation, so then you have some good ammunition to

(39:42):
decide you know what you need to do or what's
next with your investments in your financial life, and then
decide whether or not you want to hire us. So
again call nine one six nine six seven thirty five
hundred for a no obligation consultation and we'll do we'll
send out a free financial planning questionnaire and then we'll

(40:04):
create a plan for you so you can get a
better understanding of where you're at. But more importantly, putting
in those risks that Giuseppe talked about, putting in the inflation,
putting in taxes, so on and so forth, to see
that Okay, hey I'm sixty five, i'm sixty seven, whatever,
I'm in my late fifties. Will I run out of

(40:26):
money if I live to age ninety ninety two or
more living the same lifestyle that I'm living right now.
That's the goal basically of the plan is that you
don't have less means in retirement, but hopefully the same

(40:46):
or more. Sometimes. You know a lot of our clients
have more, especially when rmds.

Speaker 4 (40:51):
We just we just had a conversation with a client
and you were literally telling them, go buy a new car,
go on more vacations.

Speaker 2 (40:58):
Oh yeah, they have millions of dollar or you won't
buy a car.

Speaker 4 (41:01):
You have more income and assets than you than you're
than you're needing.

Speaker 2 (41:06):
Yeah, and no, enjoy life, yeah, and enjoy kids to
pass it on to so enjoy the heck out of it,
so that might be our advice, so again to meet
with us. Give us a call at nine one six
nine six seven thirty five hundred. I hope you enjoyed
listening to John Scambering to Seppi Visconi the wise money guys.
Have a wonderful weekend. Well