May 7, 2025 • 46 mins
Financial literacy forms the bedrock of generational wealth preservation, yet remains strikingly absent from our educational system. This knowledge gap creates the perfect storm for the "shirt sleeves to shirt sleeves in three generations" phenomenon that plagues family fortunes—wealth created in one generation, enjoyed in the second, and squandered by the third.
George Stefanu, with over 15 years of financial advising experience, tackles this pressing issue head-on. Drawing from his book "Two Comma Wealth," he reveals the critical conversations families must have about money and the principles that extend wealth beyond a single generation. The timing couldn't be more crucial, as we stand at the precipice of history's largest wealth transfer from Baby Boomers to their heirs.
Stefanu unpacks the concept of "hitting your number"—that magical retirement figure that supposedly guarantees financial security—and why the traditional 4% withdrawal rule requires nuanced application. He offers a refreshing metaphor of investment "lanes" (from the emergency lane of cash reserves to the sports car lane of growth equities) that helps visualize proper diversification strategies needed to combat inflation while preserving capital.
The challenges of working with high-net-worth individuals receive special attention, particularly how their business success can paradoxically hinder investment discipline. Men and women approach money differently too—men often rushing to action during market volatility while women process information before making decisions, frequently becoming better long-term investors as a result.
Strategic tax and estate planning emerge as critical yet underappreciated aspects of wealth preservation. With potential changes to estate tax exemptions looming, Stefanu illuminates how proper asset location and distribution timing can save heirs significant money while honoring philanthropic intentions without "tipping the IRS" unnecessarily.
What about AI in financial planning? While technology will enhance data analysis and pattern recognition, the human element—behavioral coaching, accountability, and personalized understanding—remains irreplaceable, especially during market turbulence.
Subscribe now to explore how meaningful kitchen-table money conversations can transform financial education from a missing curriculum subject into your family's greatest inheritance.
Sign up to The Lead-Lag Report on Substack and get 30% off the annual subscription today by visiting http://theleadlag.report/leadlaglive.
Foodies unite…with HowUdish!
It’s social media with a secret sauce: FOOD! The world’s first network for food enthusiasts. HowUdish connects foodies across the world!
Share kitchen tips and recipe hacks. Discover hidden gem food joints and street food. Find foodies like you, connect, chat and organize meet-ups!
HowUdish makes it simple to connect through food anywhere in the world.
So, how do YOU dish? Download HowUdish on the Apple App Store today: Support the show
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
I think now, with people tending to have less and
less kids and there's more of aconcentrated wealth and I don't
have the numbers right offhand,but I mean this is the biggest
generational shift as far aswealth being passed on from the
baby boomers down we need tohave that education.
We need to have thosediscussions around money and
it's sad because really, one ofthe primary reasons I have a job
(00:20):
at all is because we don'tteach any of this in school.
A lot of it is kind of justbasic personal finance that
we're having conversations overday in and day out.
But there are really thingsthat should be talked about even
around the kitchen tableunderstanding and being ready to
share what you're ready, whatyou're okay with sharing at the
time, but also showing your whyand your how to how you got to
the numbers that you are sharingwith that second generation to
(00:42):
hopefully extend it further.
And it doesn't mean that youhave to be the Rockefellers and
set up some dynasty trust overthe generations in order to do
it.
It can start with principles inthere, and I think that
education is probably the biggerinheritance.
Speaker 2 (00:53):
At the end of the day , this is going to be a bit of a
different conversation thannormally I do, which are more
focused on market commentary.
This is actually more aboutwealth accumulation,
preservation, having to thinkabout taxes, taxes, financial
planning and all kinds ofinteresting subjects, with
george stefanu here my name ismichael guy, a publisher of the
lead lag report.
Joining me is george stefanu.
Uh, who's got a few lettersafter his name, kind of like I
(01:15):
do, but he's got more of them.
Uh, you know cfp, cpwa.
Uh, georgie, first time you andI are chatting.
Uh, appreciate that you hadreached out.
Um, introducece yourself to theaudience to me.
Who are you?
What's your background?
What have you done for yourcareer?
Where are you going currently?
Speaker 1 (01:27):
Yeah.
So I got into financialplanning a little over 15 years
ago.
I'm in my 16th year now infinancial advising.
I wrote a book and that's whatwe're here really to talk about
Two Comma Wealth.
I found there was kind of alittle bit of a gap there.
Lots of books out there on howto accumulate wealth Not a whole
(01:48):
lot of guidance, at leastholistically, in an
unapproachable format for folksonce they kind of hit their
number, so to speak.
And just throughout my careerworking with clients I've just
seen some commonalities of somegaps there and recurring themes
that I wanted to address andjust talk to folks a little bit
about and have them betterprepared on taking the reins and
(02:08):
where to seek guidance and whatkind of things that they should
be looking at in that nextstage once they hit their number
.
Speaker 2 (02:16):
We should talk about that hitting their number thing.
What does that mean?
I would think most people wouldsay well, I want to be a
multimillionaire.
Well, but why should I stop at10 million?
Why not 20?
, why not 100?
What does that mean?
To hit their number?
Speaker 1 (02:30):
Well, here in the US, obviously, it always seems like
more is better, and so you'rekind of coming up with that
number a few ways, right?
So there's the back napkin kindof traditional method of the 4%
rule and kind of backing intothat, right?
So 25X of your annual netspending or needs along the way.
(02:50):
Multiply that out, a relativelysafe withdrawal rate of 4%.
That should last you over, say,a 30-year horizon is what the
Trinity study came up with in apretty balanced stock and bond
portfolio 50-50 kind of a mixalong the way.
So that might be the number.
But you're right, the number isa little bit more nuanced than
that, right?
So when sitting down usingfinancial planning software et
(03:13):
cetera, you're going to haveother things to take into
account.
You're going to have socialsecurity income, maybe you have
some pensions, you have whateverit may be.
That's adding to those, and Ithink it was Fidelity back in
the day that had a, maybe it wasING, I don't remember.
They're all blending together.
But what's your number?
Everybody's kind of carryingtheir number throughout the
streets of it seemed like a bigcity or New York, wherever it
was in doing so and kind offigure out what that number is.
(03:36):
But once you get there, what Ioften find is there's there's
two kinds of folks that you knowthat can't spend it fast enough
, and there's others that reallyare scared just to spend it at
all.
And so really the book kind ofwalks through how to kind of
come over that scarcity mindsetas well as kind of keep yourself
in check and giving yourselfthat permission to spend, based
on some math, some numbersbehind the things and realistic
(03:57):
situations that they may affordthemselves, realistic
methodologies in which they cantake withdrawals from their
portfolio and feel a little bitmore confident, especially in a
world with a ton of volatility,as you know.
Speaker 2 (04:11):
And a ton of inflation, right, and I think
that's a big part of this right.
So I think the question, or atleast the concern you could come
from along with this a lot ofvery high net worth individuals
have, is I want to keep up mylifestyle, but at the same time,
I need to make sure I'm earningmore than the rate of inflation
.
That feeling has poured itselfover into non-high net worth
(04:34):
individuals who feel like theyalmost have to gamble in order
to preserve their wealth,because if they don't gamble on
a levered fund or on some optiontrade idea, their income is not
going to allow them to to keepup right with with rising prices
.
How do you think what inflationin the context of that?
Speaker 1 (04:56):
uh, yeah, I mean, it's a really good point, um,
especially as we talk to, I talkto clients in their, in their
next generation, um, their kids.
You know they may have I speakin the book actually the drive
that my parents had in movingfrom New Jersey to Florida.
They were told back in the 80sthat $30,000 wasn't enough for a
deposit on a doghouse in theneighborhoods they were looking
(05:17):
for in New Jersey at the time.
And yet they could put, youknow, over 50% down on a Florida
home at the time that was muchnicer than the homes that they
were even looking at up there.
And now it's only exacerbatedright.
So the next generation todaythey may have $80,000 or
$100,000, but in certain partsof the country that's not even
going to get them to eliminatethe principal excuse me, the
(05:40):
mortgage protection insurancePMI that's there.
So people do feel that gapthere, that it is harder for
certainly the incominggeneration to kind of keep up,
especially with housing pricesand then just baseline expenses.
We've seen record highinflation over the last few
years and so that thetraditional modeling that I did
(06:01):
perhaps at the beginning of mycareer, where the default in our
software might have been 3%,there may be a need to adjust
that on an ongoing basis,depending on where the economy
is.
And so you're right.
How do you get there?
How do you do it?
It's not going to be in yoursuper safe.
You know fixed incomeinvestments.
They're just not going to beable to keep up.
(06:21):
You've got to own some of thecompanies and the names that are
able to set the prices and topass on some of those costs of
inflation along the way.
And so we talk about that oftenwith clients the rising
principal from a rising incomekicking off a rising principal
when it comes to dividends, whenit comes to growth.
But you're going to have to ownnames and equity positions in
(06:43):
order to outpace inflation, aswell as perhaps thinking of
alternatives and things in thereto properly diversify your
portfolio.
In the book I talk about thepersonal lanes of finance, so
that there's a point to havingan emergency lane, that being
pulled off to the side of theroad.
If there's noise going on inthe car you want to pull off.
Maybe check out under the hoodwhat's going on on in the car.
(07:05):
You want to pull off.
Maybe you know.
Check out under the hood what'sgoing on, and in doing so
you're going zero miles an hour.
But if you're on the side ofthe highway in the emergency
lane you're not going to letyour kids get out of the car and
play on the sidelines, and thereason for it is because they
still can get side sweat andthat's where inflation really
comes into play to your point.
But the next lane over that Italk about, so that might be
cash or emergency lane of cash,money markets et cetera.
(07:26):
The next lane would be fixedincome, right, so I call that
the bus lane.
You know, go 45 miles an hour,maybe in a 70 as an illustration
there, but the semi-truck ofinflation is still going to be
tailgating even at that level.
So you're at least making someheadway, but it's not enough.
And so you kind of get it, kindof get into the equity markets,
(07:46):
start moving into what I callthe, the sports car lane, really
the minivan lanes.
The next one up, you know,large cap companies, then the
sports car lane.
I explained to clients of midand small cap companies and
potentially having some in theaggressive lane or the sports
bike lane of whether it becommodities, whether it be alt,
whatever it may be, in that areaas well, and it's not choosing
(08:11):
one lane, it's having adiversified portfolio across the
board and doing a basicrebalance right.
So the old adage of buying low,selling high along the way,
especially in distribution years, being able to pull from lanes
that are doing well, givenwhatever cycle that we're in,
and then further diversificationfrom there, broken down by
sectors, because even sectorsrotate.
(08:32):
So in a down market, you'regoing to see things that have
opportunities that erupt thatyou might be able to pull from.
I think what 2022,?
We saw the market down, butobviously energy was having a
great year.
The very next year, theopposite was true.
Energy had a really poor year,but we had a nice takeoff in
communication services andtechnology.
Obviously, we're going back tothat cycle again.
(08:56):
So leaders rotate and so properdiversification.
You know, the same thing thatmost financial planners talk
about holds true.
Especially in a time frame whenyou're not able to add money to
and you're pulling money out,how do you still buy low and
sell high?
Well, having that properdiversification have some things
that zig while others zag, andyou know if there is a you know
a traffic pile up on theinvestment highway that we're
(09:19):
talking about, so to speak,being able to rotate as needed
but also kind of stay in thecourse within parameters that
you've already preset withineach of those lanes and not just
jumping into whatever you thinkis going to go the fastest at
that point.
Because the worry there ofcourse, just like in traffic,
when there's a pile up there,you might be patient initially,
(09:41):
but eventually, when the lanenext to you keeps on going, by
the time you jump over, oftenyou know your lane starts going
and that one starts stopping aswell.
So all things there, I knowwith a lot of your audience
though, with traders et cetera,they're looking at some of the
short-term indicators.
But what I kind of try toaddress is, as we're getting
into higher net worth outside ofjust hedging strategies et
(10:04):
cetera, having properdiversification, knowing where
to pull from and having thingsthat are not highly correlated
and have some negativecorrelation to it and act
differently along the way canhelp them create a distribution
channel from their portfoliothat can be lasting and
hopefully outpace the inflationthat we're talking about.
Speaker 2 (10:24):
I'm sure you're dealing with a lot of high net
worth individuals,multi-millionaires, and a lot of
these people becomemulti-millionaires because they
are running businesses, sellthem.
You know things like that.
I find from experience thatdealing with very wealthy, or
even not very wealthy, but highnet worth in general can be
(10:47):
challenging, because they thinktheir success in their industry,
in their business, translatesover into the financial planning
side, over into the investingside, which means that sure you
can have guardrails, sure youcan have rules, you can have
asset allocation, but they maythink that they know more than
the person they've hired tomanage their finances.
(11:07):
How do you deal with that?
Because when you're dealingwith high net worth individuals,
it's their money.
Speaker 1 (11:17):
You're absolutely right.
So you are typically dealingwith a type A or an alpha
personality in that case, andthey do understand their
business and they were verysuccessful in that field.
It's funny you mentioned thatthis week in particular, one of
my first higher net worthclients was a business owner who
exited and he met with me.
(11:41):
He was a do-it-yourselfer onthe side and he came to me and
had a nice portfolio, quitefrankly a little bit
concentrated, more concentratedthan I would put it, but he came
to me.
But he came to me with his wifeand they both sat down and we
did some planning.
They really were interested inkind of Social Security claiming
(12:02):
strategies At the time.
There was more of them.
The loopholes hadn't closed atthe time that have today, and so
we just kind of did someforecasting and some
illustration on their financialplanning and the software that
we had at the time.
He was abreast.
He decided he wanted to workwith me Now he was going to be
paying me to manage hisportfolio and he did so with
(12:22):
pretty tight reins initially.
As we went on um, he realizedthat this side hobby of his that
he kind of developed um wasn'treally, uh, benefiting him any
more than um it could you know,because we made some comparisons
over just our basic models umthat uh, the firm I worked for
uh has and uh he's had decidedto kind of kind of ease up and
(12:43):
even made the mention of youknow, I guess I'm paying you a
particular price, right so?
But we went to lunch a fewyears ago it was actually toward
the end of COVID of it allthings had opened back up a bit
and we grabbed actually it wasjust a cup of coffee under the
lunch hour and I asked him youknow you were doing this before
(13:06):
For a while.
There you kind of it was hardfor you to let go of the reins
with it.
Why are you paying me to dothis?
And he said it's in Georgia.
I know what I'm doing and Ifeel confident when I'm doing it
.
Um, but I'm hiring you reallyas an insurance policy for my
wife and his wife.
Come in that first meeting, camein the second meeting and it
really didn't come ever again.
I speak to her in thebackground of the phones which
(13:27):
she'd pick up, you know, or youknow, talk a little bit about
her workflow, give her an update, but she has no interest in any
of this thing that thingsweren't looking great.
And we just got thenotification from her and we
actually just sent the flowers.
Today the client has passed,and that's what he was with
(13:51):
before.
In his eyes was really thatcontinuity of the plan that he
set in motion, his perspectiveon investing, really looking at
how he wanted his personalinvestment policy statement
managed in line with his wife's,and now we're going to be
(14:15):
finally acting on that, sadly,but I think back to that case
especially obviously timelytoday in doing so, but you deal
with these clients that, attheir level, they have to be
comfortable with whateverthey're they're doing.
So, um, you know, but givingthem some education along the
way, um, telling them, you know,letting them know some things
that they may not know already,um, in approaching things, um,
(14:37):
and perhaps add value around umthe fringes initially, um, and
then slowly kind of work into,uh, what you know, into what you
know to be the best course ofaction for them, and so that's
been really the case with meworking with such individuals.
It is difficult, though,because they do get in their own
way.
Sometimes you have some clientsthat just don't take advice,
and sometimes those aren'treally clients that really
(14:59):
should be working with you.
So there has been a cases wherewe've graduated a client to
perhaps having them do itthemselves or work with another
advisor.
Because of that mentality,because we don't want then
either their hesitation or theirextra methodologies, I guess
(15:20):
that they've come up withwhatever they read on it online
or somebody told them about toaffect their overall and they're
worth.
We're okay, you know, takingsome unsolicited orders or doing
some things that are smallpieces, or taking, you know,
some calculated risk or somebets here and there, but if it's
going to interfere with,ultimately, the projections that
we're having to keep themsecure and making sure that
(15:41):
they're going to actuallyachieve their goals, um, that we
need to kind of pivot.
And so we talk a bit about inthe book, um, getting um, your
why down and realizing, okay,what is it that?
Um, you're headed to?
So, in the case of business,exit, a lot of people, their
entire identity is tied up intoit, so they're used to being the
decider, the decision maker, um, at the end of the day.
(16:03):
So what is it that you want todo, what do you want to be known
as and what are you running to?
What is that next second act,what's that next thing that you
want to get to?
Um, and crafting your, your, uh, your identity around that um,
whether it's being a parent orgrandparent or spouse or
traveler or, um, you know,philanthropic goals or whatever
it may be, because otherwise, ifyou're sitting at home with
(16:24):
nothing better to do, you'regoing to just look, you're
really just going to look at thenews and you're probably going
to take some action that may notbe in your best interest.
And it's a fine line sometimeswith investing and gambling, and
so you can kind of get caughtup in some of those activities
if you're not careful as well.
Speaker 2 (16:42):
And in gambling, and so you can kind of get caught up
in some of those activities ifyou're not careful as well.
Speaker 1 (17:04):
When I look at the focus on their finances, that's
an excellent and very insightfulquestion, michael, and I don't
know if the clarity is from thefasting or whatever it may be,
but the self-recognition of it,men are they.
They, they do tend to be theones more fascinated with the um
, the decisions, or the thetrades um aspect of it.
(17:28):
It's interesting.
I think it kind of goes back tohow many times, if our, our,
our partners are um, if, uh, wehave a wife and we're a, we're a
husband, then, um, they come tous with a problem and we get
yelled at because we come upwith a solution.
We get in trouble for coming upwith a solution because the
reality is they never wanted asolution to begin with.
(17:50):
They just wanted to vent and beheard.
And so I find myself in aninteresting position when it
comes to men and women investorstoo.
When they come to me withconcern about the markets, a lot
of the times with the femaleinvestors, they they come to me
with concern about the markets alot of the times with the
female investors.
They just want to be heard andthey tend over time and I don't
have any published data on thisto back it up, but they do tend
(18:12):
to be the better investors overthe long haul because they don't
make emotional decisions withtheir money.
Um, you know, they get the badrap of being more emotional, um,
but the truth is it doesn'tmean that they they then make a
decision based on it, whereasmen, they want to take an action
.
They see something happen.
What are we doing about it?
What are we going to change?
(18:36):
How are we going to hedge this?
How are we going to, um, youknow, jump in and out of the
markets, time things, all thosekinds of things and concerns to
worry about as well, tradingcosts, all those kinds of things
?
But I think it was.
There was a study done Ibelieve I'm going to misquote
where, where it was from, butprobably read by Michael when
(18:56):
they looked back in accountsheld by deceased people actually
outperformed those that wereactively trading, and so, again,
not probably the platform tosay that out loud, on tough, but
nonetheless and sometimes thatcan be the case that the right
action is no action at all If wehave a good quality position,
and I'm holding it to fruitionthere and allowing it to do so.
(19:18):
So I think that's kind of thecase with men and women.
I think that's some of it thebehavioral psyches that are in
there in their approach to aproblem.
One is to kind of talk throughor walk through it and kind of
get back to kind of fundamentals, and for men, a lot of times
it's to take action, and maybethat's what the appeal is in
that case, and certainly amongstyour listeners too.
Speaker 2 (19:38):
By the way, you can absolutely say that, because
I've mentioned that myself.
That's the problem withover-trading in general,
especially when you're not doingit on a systematic way, right,
and discretionary work from adiscretionary perspective.
Speaking about disconnects,there's also a disconnect
between generations, or amonggenerations, right?
So I forget the stat, youprobably know it.
(19:59):
Something.
Um, I forget the stat, youprobably know it.
Uh, something along the linesof you know, the first
generation tends to, if theyinherit a lot of wealth and of
having a lot less by the end oftheir lives, and then the next
generation a lot less.
So it's like yeah, that's shirtsleeves to shirt sleeves, Uh
yeah, exactly Right, let's let'stalk about that, Cause I think
that's interesting.
Why?
Why is that the case anyway?
Speaker 1 (20:17):
Yeah.
So I think I'm kind of livingproof of it a little bit, right.
So my dad came over from Greece.
He was an immigrant with afourth grade education.
I saw his hard work.
He did end up getting to whatwe call that two commonwealth in
the book, but he did it throughthe grind method, right, just
putting away, putting away,saving, saving.
I thought we were really reallypoor growing up.
(20:38):
Turns out we were, you know,very lower middle class kind of,
or maybe upper lower class kindof thing, but I thought we were
much more impoverished.
It was just the fact that theywere incredibly frugal with
their money and then puttingmoney away.
I think that leads and there'skind of a phenomenon in the US
that first generation Americansyou know those that kind of come
from, those immigrants that aregiven the opportunities, like I
(20:59):
was, to have education etcetera, but still seeing that
work ethic that's there, tend toelevate that success even
further.
And that's usually where thatbig two comma wealth kind of
comes in the next generationafter them.
Because you've, you know, myparents' generation, for
instance, kind of grindedthrough, did all those kinds of
things, and that's inherent notto kind of squander wealth.
But I also want my kids to havewhat perhaps I didn't have and
(21:23):
so I start to maybe spend alittle bit more of it.
But in that generation, thenext generation.
So I look at I got two teenagedaughters and I've done my best
around kind of giving themaccounts and showing them you
know money management techniqueset cetera, and letting them
know about just spendingpatterns and how much stuff
actually costs.
And letting them know aboutjust spending patterns and how
(21:43):
much stuff actually costs and infact actually giving them a
sizable budget.
We just started doing this alittle while ago and allowing
them to actually pay forbasically all of their
discretionary expenses.
But they have a set budget andthat's what they have to do, is
necessary, because it's easy tospoil and to give them a
disconnect, simply out of love,out of trying to give them
something more, but notinstilling in them the values,
(22:04):
not just hard work, but reallywhat money means, how it is a
tool and that it doesn't justgrow on trees.
So a lot of that phenomenondoes exist where the generation
that creates it starts spendingat the second generation quite a
bit and completely squanderedusually by the third generation
that's there down.
So I think it begins ineducation I talk about in the
(22:26):
book.
You know having family meetings,the older generations not so
much the boomers, but thegeneration just before them.
You really didn't talk aboutmoney.
You didn't know what yourparents had or didn't have, and
certainly in some of theimmigrant population I know the
Greek culture, et cetera.
You didn't have um, andcertainly um in some of the
immigrant population.
I know the greek culture, etc.
Um you didn't share um the.
(22:47):
It was a surprise what youinherited or didn't um.
I think we're seeing a changenow where people are becoming
more open um and discussing umwhat they have, especially as
parents have grown older.
They're not just passing away,they're, they're living longer,
but they need more assistance indoing so.
So they're putting their kidsas powers of attorney, they're
adding them to accounts, thosekinds of things.
We talked about some of thedisclaimers, and why not to add
(23:09):
people to accounts but put themon as power of attorneys for a
whole different set of nuancedissues that go on there in the
estate planning section of thebook, I think, having
discussions around money andthen when the next generation
doesn't see this as a windfallbut as an accumulation of the,
the life's work of your parents.
Um, it changes the narrative.
(23:31):
Um there, so it's not just hey,I got this inheritance from mom
and dad, I can finally pay offthe cars and the credit cards
and maybe, maybe, the house.
Um, and it's just poof, it'sgone as opposed to okay.
They were strategic about it.
They had it set up this way sothat it would generate this
amount of income for a month, sothat they could supplement a
lifestyle that did this.
I want to do the same thing andI think now, with people tending
(23:54):
to have less and less kids andthere's more of a concentrated
wealth and I don't have thenumbers right offhand, but I
mean this is the biggestgenerational shift as far as
wealth being passed on from thebaby boomers down.
We need to have that education,we need to have those
discussions around money, andit's sad because really, one of
the primary reasons I have a jobat all is because we don't
teach any of this in school.
(24:14):
A lot of it is kind of justbasic personal finance that
we're having conversations overday in and day out, but they're
really things that should betalked about even around the
kitchen table understanding andbeing ready to share what you're
ready, what you're okay withsharing at the time, but also
showing your why and your how tohow you got to the numbers that
you are sharing with thatsecond generation to hopefully
(24:35):
extend it further.
And it doesn't mean that youhave to be the Rockefellers and
set up some dynasty trust overthe generations in order to do
it.
It can start principles inthere that, and I think that
education, is probably thebigger inheritance at the end of
the day.
Speaker 2 (24:47):
You don't have to set up trust, sure, but you do have
to be very mindful of taxes,and I think we need to talk
about that, especially in anenvironment where there's a lot
of uncertainty on policy ingeneral.
There is a lot of validity, Ithink, to the idea that, given
how much debt the US governmenthas, one way that you can fill
(25:08):
the coffers up at least a littlebit is through the estate tax,
the municipal side, the stateside.
People will literally leave tostates that have better estate
tax rates, right, just so thatthey don't have to pay a large
(25:29):
amount for the next generation.
I want you to talk about theimportance of tax planning from
that perspective, because Ithink it's really
underappreciated.
Speaker 1 (25:37):
Yeah, so, and you make a good point Each state is
different too.
Some states have a lowerthreshold than others when it
comes to the estate tax and whatcan be given, and right now not
as big of a conversation, butit is going to come to the fore
here very, very soon with theending of the tax cut and jobs
(25:58):
act and the likely extension andwe'll see what happens
ultimately at the end of the day.
But right now the inflationadjusted return on the state tax
is, I think, 13.99 million thisyear per person, so pretty
large estate for it to beeffective now.
But if it resets it'll go downto 5 million inflation adjusted
(26:18):
per person, which might be morein the realm of where people
could hit.
But there are, to your point,in local governments the state
governments anyways there aresome that are far lower than
that A million dollars.
Some, depending on who theheirs are, can go significantly
lower, even into just a fewthousand or $25,000, whereas the
tax may set in and it may be anarea where, depending on policy
(26:43):
and depending on, you know,party, that comes back into
focus as far as where to resolvesome of the national debts.
I don't know that it's allthere, but there's lots of
nuances in it.
Especially when it comes toinheriting things like property
or businesses, it becomes reallydifficult because you have
liquidity issues and how do youpay the tax, and it becomes very
cumbersome to do so.
(27:05):
Nonetheless, you're not wrong.
There is thing, or there arethings to consider with it, and
we talk a lot about it again inthat estate planning chapter of
my book, in where to keepcertain assets, how to title
things, etc.
Because sometimes people justdon't kind of think it through.
I talk about an example in thebook that maybe we are a
(27:26):
philanthropic rechargeablecharitable client.
So some people they might titheto their church so they say,
okay, well, not just during mylife, I want to do that at the
end of my life too.
And someone put 10% across theboard to my church.
Well, that's all well and good,but a much better way to
approach.
It would be okay, what is thatdollar amount or that figure?
(27:47):
And either set a separateaccount or put it in a
percentage rate as a beneficiaryto your church, only with your
taxable, your excuse me, yourpre-tax accounts, right, so your
traditional IRAs, your 401ks,et cetera, because they're going
to inherit that tax free as atax-free organization, why would
you give the church your Rothaccounts or even your regular
taxable accounts that have astep up at cost basis upon debt,
(28:09):
so not to squander that wealthaway, right?
So I talk about that's likeleaving the IRS a tip
unnecessarily, so how do youavoid doing that?
So sometimes it's juststructuring where to keep your
beneficiary designations to.
Another thing to kind of thinkabout is what kind of assets do
you own?
So some things become tax bombs, right?
(28:32):
Or they don't get a settlementbasis at all, or stretch an IRA
to your beneficiaries, with someexclusions, obviously your
spouse, depending on age of thesibling, and their close, if
they're disabled.
There's some exceptions to it.
However, if your kids inheritit, under most circumstances
(28:54):
they're going to have 10 yearsin which to liquidate the
account and take thosedistributions out from your IRA.
If your kids are successful orlikely they're to inherit that,
perhaps in their late earningsyears, right before the
precipice of them going intoretirement or at the beginning
of their own higher income years, it can be an effective tax
(29:17):
that's much higher than yours inyour late years where you're
not spending that much orperhaps don't have the income
levels that are there.
So how do you deal with that?
Well, educating again the nextgeneration around taxes and how
that's handled.
I give an example of a book ofa client who inherited some
money from an uncle and in theircase was sizable a few million
dollars and the initial advicethey got from the advisor that
(29:40):
they sought out was to just waitto the end of that 10 year
period, let the taxes defer andthen take it all out the end.
Well, the problem is thatthrows them, for the majority of
the assets, to the highest taxbracket.
It was a huge tax burden.
The more current way in doingso is talking about, you know,
topping off your tax brackets,finding a more favorable rate in
(30:01):
which you could deplete theaccounts to keeping within that
rate over that 10 year period,at least utilizing in your favor
so that you're only paying, intheir case, the 24% taxes as
opposed to 37% tax rate.
In their case it was severalhundred thousand dollars in tax
savings they projected over justthat period of time, not to
mention that we amplified it alittle further and they happened
(30:21):
to young and a low earner,first jobs at a college, that
kind of thing, being able tohave them fit all of their
income into Roth assets actually, and then live off of some of
the non-qualified accounts thatthey inherited.
So it keeps them at that 24%level along the way, fully
(30:44):
funding their Roth IRA, superfunding it, so to speak, and
allowing for another tax-freeasset for them in the future and
perhaps the third generationafter that.
So there is an approach with it.
Obviously, there's also justestate tax techniques, whether
it's using different vehicles,like prepaying it through a
local, like insurance trust,whether it's setting up methods
to exclude assets from yourestate during your lifetime,
(31:07):
whether it's.
There's all kinds of tricks andtips that we talk about in the
book, and certainly you'd wantan attorney to sit down with you
and kind of find out the bestpath with it.
But taxes are complicated.
I mean you want to work withyour accountant along your
lifetime and I do find that thatbecomes an issue, right.
So we just had the tax deadlineright yesterday and more often
than not I find that accountantsare tax preparers but they
(31:31):
don't prepare you for taxesright.
So they're the ones filling outthe forms, but they're not
doing forecasting, they're nothelping you plan along the way.
So we talk a bit about that.
How can you create arelationship between your
financial advisor and your taxprofessional in which they can
collaborate and think forward,because your financial advisor
is typically looking out forwarddecades, but you judge your CPA
(31:51):
based on the return or theamount of money you owe each
year.
What tricks can you do?
What can you do in that case toget a deduction or amend your
return a little bit to make surethat your taxes are a little
lower this year?
But sometimes that can beshort-sighted, just like in that
illustration with the 10-yearwaiting to take the distribution
.
There's actually more proof forthem to take it along the way,
and they worked with theiraccountant to make that happen
(32:13):
and do it the right way.
And then even for an investmentstrategy, not to bag on things
like annuities, but some thingsdefer taxes during your lifetime
, which sounds great, but thenbecome a big tax hit to your
heiress Annuities.
That's all growth that has thepotential.
That's all based on incomeincome and we don't tax income
(32:35):
like we do investments a lot ofthe times.
So you have capital gains ratesavailable, you have step ups
and bases, but when it comes toputting an insurance wrapper on
things like an annuity.
Sometimes you can lose some ofthat and you think you're being
safe, you think you're being taxefficient during your lifetime,
etc.
But you may be exacerbating anissue along the way.
So we talked about that and wetalked about during your
(32:56):
lifetime if you're in a lowertax bracket rough conversions,
topping off the tax bracket thatyou're in, putting some money
in Roth but making sure it growsas well.
So that's where you want tohave a little bit more of your
higher speed investments, yourmore aggressive or
(33:17):
growth-oriented investments, sothat it has that opportunity to
grow.
Otherwise, what was the pointof putting it in a tax-free
vehicle if it's not going togrow?
We talk a lot about healthcaresavings accounts.
I think that's going to be moreand more part of financial
planning going forward as thatbecomes part of the component
and how to utilize those theright way, instead of taking
your HSA debit card and using itall the time.
We talk about in the bookno-transcript we don't talk
(33:56):
enough about it.
You know you get the taxdeduction going in and potential
.
You know the tax deferral whileit's in there and then
potential tax free distributionfor healthcare at the end.
Under current tax law, though,you got to worry even about that
, because if it's inherited, theHSA becomes taxable all in the
year of the inheritance.
So it all becomes a big gain tothem and a problem.
(34:17):
So we talk about methodologiesin which to either reduce that
or roll it over to your IRA, etcetera.
So at least there's a stretchthere.
It gets very complex.
Obviously, I'm not a CPA or astate planning attorney.
So see those ones, you seethose ones, but your advisor
(34:39):
should have some understandingof the nuances there and be able
to kind of approach those withthought, because it's not about
what you earn, it's about whatyou keep at the end of the day,
and that tax alpha can besignificant over the course of
your lifetime.
Speaker 2 (34:45):
I'm curious to get your thoughts on the
proliferation of some of theseservices that use AI for
financial planning.
Are those fraught with issues,errors?
I mean, is AI going to replacea lot of the types of things
that you do?
Speaker 1 (35:03):
You know, I think it's going to disrupt a lot of
industries, but I thinkultimately, it can be a source
of real good.
I'm excited for AI in thefinancial planning space because
I think it can be leveraged.
The problem is, though, whenyou put in inputs, a little
nuanced output can or input canlead to a pretty messed up
(35:25):
output.
Right now, ai, depending on howyou phrase a question, et
cetera, can kind of spit outresults that might be what you
wanted it to say or what itthinks you want them to say
along the way.
So being careful with it, Iknow it's something that I think
a proper advisor can utilizeand leverage.
I think large firms are usingit in a way that's pretty
(35:46):
interesting.
I've heard lots of talks withinthe industry that AI will be
allowed us to take advisor notesfrom perhaps thousands of
advisors across the country andmaybe they work all with a
certain nationwide employer andgive you kind of the insights
and outsides of the plan Ifthere are a certain level of
(36:08):
executive, what their stockoptions look like, what the best
methodology is to kind of spitthat out.
So I think it can enhance therelationship.
But I think the whole idea ofhaving an advisor is to have
that human interaction, to havethat behavioral kind of coaching
along the way, and there'snothing like that, especially in
volatile markets, to kind ofkeep you invested, reminded of
what the plan is, et cetera.
But there are components, likeyou said basic asset allocation,
(36:31):
maybe even basic asset locationwhen it comes to taxes, etc.
A lot of that is going to startrelying more on AI, but there's
going to be some nuances inknowing you, your family makeup,
what your goals are and trulykeeping those top of mind from a
human-centered standpoint.
But I think it complements theoverall plan and doesn't
(36:52):
completely disrupt it either.
But I don't think it'ssomething that can be ignored by
advisors.
But I don't think it replacesadvisors and it's kind of like
you know, even just with basicasset allocation we've talked
about, you know, robo advisors.
Before that they were going totake over everything and that
has not been the case.
But there is a space for it.
But as people's wealth becomesincreasingly complex, they do
(37:14):
want to sit down and talk with ahuman.
As much as they like theirphones and talking and
double-checking things orlooking at things.
They want to have that humaninsight to make sure.
Is this really how it works atthe end of the day, and do I
have somebody that's human,that's accountable and that
could be that accountabilitypartner along the way too?
So to your point.
You know, michael, I know wewere talking about before this
(37:36):
podcast about kind of yourjourney with fitness, right?
So there's lots of AI fitnessesout there.
I have an anatomical.
I think it's great, you knowall those kinds of things, but
the truth is I don't think itcompletely replaces personal
trainers, because having thataccountability, having that
person to coach you on thingsthat you already know and should
be doing, but helping to kindof bring it to the fore, and
again that accountability role Ithink still has a lot of merit
(37:58):
and a lot of value.
So I think it's a compliment,not something that completely
replaces.
Speaker 2 (38:03):
Talk me through the process of writing the book.
Somebody once said to me thathaving a book is like a very
expensive in terms of timebusiness card.
I think there's some degree oftruth to that.
But you know, is it one ofthose things where, as you were
writing it, you had to doresearch beyond what you already
knew?
I mean, how easy was it for youto do?
(38:23):
Talk me through that wholejourney.
Speaker 1 (38:24):
Yeah, it was a pain in the butt, the whole thing was
insane.
So it's something I alwayswanted to do, you know, and I
had thoughts that I wanted toput together.
I didn't know how to puttogether them.
I'd never written a book before.
So initially, you know, you goto some conferences, advisors,
and they talk about, you know,companies that'll help write the
book for you, help do this orthat, based on a series of
(38:47):
interviews, so I said, okay,well, that'll help kind of
confine things, et cetera.
Um, I said, okay, well, that'llhelp kind of confine things, et
cetera.
So I started down that path, um, in working um with someone to
so first create just thatdetailed outline.
And that part was great.
Um, she had helped, uh, severalauthors in this uh, and and
wealth management um put somebooks together, kind of new
(39:10):
issues out of things, and so, um, we went down that path and
helped with kind of a detailedoutline on the construct.
Um, after a series I think itwas 10, 10 interviews that I did
, the third kind of came up witha thread um of things that that
she thought would put togetherwell for a book.
And then, um, I started thatand then, um, it's like, okay,
we'll go to the next phase andand even do so, that kind of
(39:30):
help write the book as well.
The actual book itself, um, thatdid not work for me, um, though
, because, as it got nuancedbeyond the outline, you have to
have somebody this, this isn'tjust a book of feelings.
There are certain parts of that, of course the eq component,
the stories about my dad, etc.
That that were helpful in kindof constructing the storyline
with it, but when it gets to theactual financial plan, the
(39:52):
advice, the um, uh, the thingsthat we talk about on the
strategies, I should say, um,there's not any direct advice in
the book, but, um, the nuancesthat are there, um, and even me,
when I read the book now,there's like maybe I should have
included this, maybe I shouldhave tapped this at a certain
point.
Just kind of have to let go andsay, okay, let's go forward.
But there was a hiccup alongthe way too, because we were
(40:13):
going to release this book inOctober.
Then it got delayed untilJanuary and then by then tax
laws had changed and numbers hadchanged.
It was right up to the deadlineto make sure I could get it
resubmitted and hopefully, thebooks that went out on Amazon
and Barnes, noble et cetera,made it out with the right
numbers in there.
We made numbers in there.
(40:34):
We made it just in time.
Um, I think there's only uh oneedit that the word currently has
one hour instead of two hoursthroughout the whole book.
But those little things, as aperfectionist, kind of eat away
at me.
But, um, I would say thedifficulty is keeping it in a
fashion that's um relatable,somebody to read and walk away
with some understanding and sometips and and actionable ideas,
um, seeing how it can pertain totheir personal situation,
(40:58):
regardless of level of wealth inthere.
Um, and that's been thefeedback that I've gotten a lot
of is uh, that's that's comeacross um as professional.
Though when I read it likeagain, again, I over, over
worried and analyzed I shouldhave said this, or if I should
explain it with one more wordhere, this or that or another
sentence here to kind of recapit.
But it can easily kind ofbecome overwhelming.
(41:18):
So the idea behind the book isit to be just enough where you
get the idea of things andunderstand that you don't know
what.
You don't know perhapsresources and the tools so you
can understand some of theindustry jargon around it and
how to really consult with yourteam of advisors in order to, um
, to, to enact, uh, some of theand implement some of the things
(41:40):
that pertain to you in the book, yet also be able to kind of
judge your current set ofadvisors and say you know, if
they're not talking to me aboutthis, why do they understand
these concepts?
Are they doing it, um, or arethey just kind of doing a very
bland and generic advice and Ihaven't done any drill down?
So, um, there's some of that inthere.
Um, I try to recap it withsomething that quirky but fun
for me, I call the swim lessons.
(42:01):
So, stefano, welcome investmentmanagement lessons.
Kind of a nod to my dad whocame over from, from greece, who
you know, country known for allits speeches, but he never
learned to swim himself.
But but he did learn to swimfinancially, um, and so we kind
of recap each chapter with someactual ideas, some questions
that are posed, some examplesthat um, hopefully take the
material that can be a snoozefest for those that are not, you
(42:23):
know, fully, uh, into the worldof financial planning and, um,
really kind of circle back andsay, okay, this is the stuff
that pertains to me, perhaps,and this is stuff I need to do
and take some action with.
So it was a fun journey.
My wife is certainly glad it'sover.
I'm glad to have that time backand not waking up in the middle
of the night.
So you're not going to editthis for that.
(42:44):
And then also, it was hardcutting things out but to try to
keep it around 200 somethingpages so that it's not
overwhelming, doesn't become afinancial you know, phone book
but has enough meat to it whereit makes sense.
And then getting out of my ownhead about other professionals
reading the book and me beingtoo technical in there just to
try to appease an audience thatreally the book isn't, is not
(43:06):
intended for at the end of theday, and you're always going to
have your critics out there, soof course says that all three.
You're worried about your firstnegative reviews, but I guess
you don't make it until thathappens too.
So we'll see how all thatunfolds, but I'm excited about
the launching and how it's allgoing so far.
Speaker 2 (43:22):
George, for those who want to get in touch with you
because they're intrigued byyour knowledge set and who want
to potentially buy the book,where would you point them to?
Speaker 1 (43:34):
Go to 2comoweltcom.
You can spell with the number 2or space out 2comowelt.
You can also just Google myname and I'm sure I come up that
way too.
Feel free to reach out.
The book's on there.
You'll be able to buy the book.
There's a contact site aboutcontacting me.
As far as an offer to keep upwith where the book's at and
some of the accolades and thingswhere we'll be featured at, so
(43:56):
I appreciate it.
Thank you, michael.
Speaker 2 (43:58):
Appreciate those that watch this Again.
This will be an edited podcastunder LeadLag Live and all your
favorite platforms.
I am now going to take a break,given that I have done two
other ones of these back to back.
Appreciate the knowledge herefrom George and thank everybody
for watching.
Cheers.
I think now, with people tending to have less and
less kids and there's more of aconcentrated wealth and I don't
have the numbers right offhand,but I mean this is the biggest
generational shift as far aswealth being passed on from the
baby boomers down we need tohave that education.
We need to have thosediscussions around money and
it's sad because really, one ofthe primary reasons I have a job
(00:20):
at all is because we don'tteach any of this in school.
A lot of it is kind of justbasic personal finance that
we're having conversations overday in and day out.
But there are really thingsthat should be talked about even
around the kitchen tableunderstanding and being ready to
share what you're ready, whatyou're okay with sharing at the
time, but also showing your whyand your how to how you got to
the numbers that you are sharingwith that second generation to
(00:42):
hopefully extend it further.
And it doesn't mean that youhave to be the Rockefellers and
set up some dynasty trust overthe generations in order to do
it.
It can start with principles inthere, and I think that
education is probably the biggerinheritance.
Speaker 2 (00:53):
At the end of the day , this is going to be a bit of a
different conversation thannormally I do, which are more
focused on market commentary.
This is actually more aboutwealth accumulation,
preservation, having to thinkabout taxes, taxes, financial
planning and all kinds ofinteresting subjects, with
george stefanu here my name ismichael guy, a publisher of the
lead lag report.
Joining me is george stefanu.
Uh, who's got a few lettersafter his name, kind of like I
(01:15):
do, but he's got more of them.
Uh, you know cfp, cpwa.
Uh, georgie, first time you andI are chatting.
Uh, appreciate that you hadreached out.
Um, introducece yourself to theaudience to me.
Who are you?
What's your background?
What have you done for yourcareer?
Where are you going currently?
Speaker 1 (01:27):
Yeah.
So I got into financialplanning a little over 15 years
ago.
I'm in my 16th year now infinancial advising.
I wrote a book and that's whatwe're here really to talk about
Two Comma Wealth.
I found there was kind of alittle bit of a gap there.
Lots of books out there on howto accumulate wealth Not a whole
(01:48):
lot of guidance, at leastholistically, in an
unapproachable format for folksonce they kind of hit their
number, so to speak.
And just throughout my careerworking with clients I've just
seen some commonalities of somegaps there and recurring themes
that I wanted to address andjust talk to folks a little bit
about and have them betterprepared on taking the reins and
(02:08):
where to seek guidance and whatkind of things that they should
be looking at in that nextstage once they hit their number
.
Speaker 2 (02:16):
We should talk about that hitting their number thing.
What does that mean?
I would think most people wouldsay well, I want to be a
multimillionaire.
Well, but why should I stop at10 million?
Why not 20?
, why not 100?
What does that mean?
To hit their number?
Speaker 1 (02:30):
Well, here in the US, obviously, it always seems like
more is better, and so you'rekind of coming up with that
number a few ways, right?
So there's the back napkin kindof traditional method of the 4%
rule and kind of backing intothat, right?
So 25X of your annual netspending or needs along the way.
(02:50):
Multiply that out, a relativelysafe withdrawal rate of 4%.
That should last you over, say,a 30-year horizon is what the
Trinity study came up with in apretty balanced stock and bond
portfolio 50-50 kind of a mixalong the way.
So that might be the number.
But you're right, the number isa little bit more nuanced than
that, right?
So when sitting down usingfinancial planning software et
(03:13):
cetera, you're going to haveother things to take into
account.
You're going to have socialsecurity income, maybe you have
some pensions, you have whateverit may be.
That's adding to those, and Ithink it was Fidelity back in
the day that had a, maybe it wasING, I don't remember.
They're all blending together.
But what's your number?
Everybody's kind of carryingtheir number throughout the
streets of it seemed like a bigcity or New York, wherever it
was in doing so and kind offigure out what that number is.
(03:36):
But once you get there, what Ioften find is there's there's
two kinds of folks that you knowthat can't spend it fast enough
, and there's others that reallyare scared just to spend it at
all.
And so really the book kind ofwalks through how to kind of
come over that scarcity mindsetas well as kind of keep yourself
in check and giving yourselfthat permission to spend, based
on some math, some numbersbehind the things and realistic
(03:57):
situations that they may affordthemselves, realistic
methodologies in which they cantake withdrawals from their
portfolio and feel a little bitmore confident, especially in a
world with a ton of volatility,as you know.
Speaker 2 (04:11):
And a ton of inflation, right, and I think
that's a big part of this right.
So I think the question, or atleast the concern you could come
from along with this a lot ofvery high net worth individuals
have, is I want to keep up mylifestyle, but at the same time,
I need to make sure I'm earningmore than the rate of inflation
.
That feeling has poured itselfover into non-high net worth
(04:34):
individuals who feel like theyalmost have to gamble in order
to preserve their wealth,because if they don't gamble on
a levered fund or on some optiontrade idea, their income is not
going to allow them to to keepup right with with rising prices
.
How do you think what inflationin the context of that?
Speaker 1 (04:56):
uh, yeah, I mean, it's a really good point, um,
especially as we talk to, I talkto clients in their, in their
next generation, um, their kids.
You know they may have I speakin the book actually the drive
that my parents had in movingfrom New Jersey to Florida.
They were told back in the 80sthat $30,000 wasn't enough for a
deposit on a doghouse in theneighborhoods they were looking
(05:17):
for in New Jersey at the time.
And yet they could put, youknow, over 50% down on a Florida
home at the time that was muchnicer than the homes that they
were even looking at up there.
And now it's only exacerbatedright.
So the next generation todaythey may have $80,000 or
$100,000, but in certain partsof the country that's not even
going to get them to eliminatethe principal excuse me, the
(05:40):
mortgage protection insurancePMI that's there.
So people do feel that gapthere, that it is harder for
certainly the incominggeneration to kind of keep up,
especially with housing pricesand then just baseline expenses.
We've seen record highinflation over the last few
years and so that thetraditional modeling that I did
(06:01):
perhaps at the beginning of mycareer, where the default in our
software might have been 3%,there may be a need to adjust
that on an ongoing basis,depending on where the economy
is.
And so you're right.
How do you get there?
How do you do it?
It's not going to be in yoursuper safe.
You know fixed incomeinvestments.
They're just not going to beable to keep up.
(06:21):
You've got to own some of thecompanies and the names that are
able to set the prices and topass on some of those costs of
inflation along the way.
And so we talk about that oftenwith clients the rising
principal from a rising incomekicking off a rising principal
when it comes to dividends, whenit comes to growth.
But you're going to have to ownnames and equity positions in
(06:43):
order to outpace inflation, aswell as perhaps thinking of
alternatives and things in thereto properly diversify your
portfolio.
In the book I talk about thepersonal lanes of finance, so
that there's a point to havingan emergency lane, that being
pulled off to the side of theroad.
If there's noise going on inthe car you want to pull off.
Maybe check out under the hoodwhat's going on on in the car.
(07:05):
You want to pull off.
Maybe you know.
Check out under the hood what'sgoing on, and in doing so
you're going zero miles an hour.
But if you're on the side ofthe highway in the emergency
lane you're not going to letyour kids get out of the car and
play on the sidelines, and thereason for it is because they
still can get side sweat andthat's where inflation really
comes into play to your point.
But the next lane over that Italk about, so that might be
cash or emergency lane of cash,money markets et cetera.
(07:26):
The next lane would be fixedincome, right, so I call that
the bus lane.
You know, go 45 miles an hour,maybe in a 70 as an illustration
there, but the semi-truck ofinflation is still going to be
tailgating even at that level.
So you're at least making someheadway, but it's not enough.
And so you kind of get it, kindof get into the equity markets,
(07:46):
start moving into what I callthe, the sports car lane, really
the minivan lanes.
The next one up, you know,large cap companies, then the
sports car lane.
I explained to clients of midand small cap companies and
potentially having some in theaggressive lane or the sports
bike lane of whether it becommodities, whether it be alt,
whatever it may be, in that areaas well, and it's not choosing
(08:11):
one lane, it's having adiversified portfolio across the
board and doing a basicrebalance right.
So the old adage of buying low,selling high along the way,
especially in distribution years, being able to pull from lanes
that are doing well, givenwhatever cycle that we're in,
and then further diversificationfrom there, broken down by
sectors, because even sectorsrotate.
(08:32):
So in a down market, you'regoing to see things that have
opportunities that erupt thatyou might be able to pull from.
I think what 2022,?
We saw the market down, butobviously energy was having a
great year.
The very next year, theopposite was true.
Energy had a really poor year,but we had a nice takeoff in
communication services andtechnology.
Obviously, we're going back tothat cycle again.
(08:56):
So leaders rotate and so properdiversification.
You know, the same thing thatmost financial planners talk
about holds true.
Especially in a time frame whenyou're not able to add money to
and you're pulling money out,how do you still buy low and
sell high?
Well, having that properdiversification have some things
that zig while others zag, andyou know if there is a you know
a traffic pile up on theinvestment highway that we're
(09:19):
talking about, so to speak,being able to rotate as needed
but also kind of stay in thecourse within parameters that
you've already preset withineach of those lanes and not just
jumping into whatever you thinkis going to go the fastest at
that point.
Because the worry there ofcourse, just like in traffic,
when there's a pile up there,you might be patient initially,
(09:41):
but eventually, when the lanenext to you keeps on going, by
the time you jump over, oftenyou know your lane starts going
and that one starts stopping aswell.
So all things there, I knowwith a lot of your audience
though, with traders et cetera,they're looking at some of the
short-term indicators.
But what I kind of try toaddress is, as we're getting
into higher net worth outside ofjust hedging strategies et
(10:04):
cetera, having properdiversification, knowing where
to pull from and having thingsthat are not highly correlated
and have some negativecorrelation to it and act
differently along the way canhelp them create a distribution
channel from their portfoliothat can be lasting and
hopefully outpace the inflationthat we're talking about.
Speaker 2 (10:24):
I'm sure you're dealing with a lot of high net
worth individuals,multi-millionaires, and a lot of
these people becomemulti-millionaires because they
are running businesses, sellthem.
You know things like that.
I find from experience thatdealing with very wealthy, or
even not very wealthy, but highnet worth in general can be
(10:47):
challenging, because they thinktheir success in their industry,
in their business, translatesover into the financial planning
side, over into the investingside, which means that sure you
can have guardrails, sure youcan have rules, you can have
asset allocation, but they maythink that they know more than
the person they've hired tomanage their finances.
(11:07):
How do you deal with that?
Because when you're dealingwith high net worth individuals,
it's their money.
Speaker 1 (11:17):
You're absolutely right.
So you are typically dealingwith a type A or an alpha
personality in that case, andthey do understand their
business and they were verysuccessful in that field.
It's funny you mentioned thatthis week in particular, one of
my first higher net worthclients was a business owner who
exited and he met with me.
(11:41):
He was a do-it-yourselfer onthe side and he came to me and
had a nice portfolio, quitefrankly a little bit
concentrated, more concentratedthan I would put it, but he came
to me.
But he came to me with his wifeand they both sat down and we
did some planning.
They really were interested inkind of Social Security claiming
(12:02):
strategies At the time.
There was more of them.
The loopholes hadn't closed atthe time that have today, and so
we just kind of did someforecasting and some
illustration on their financialplanning and the software that
we had at the time.
He was abreast.
He decided he wanted to workwith me Now he was going to be
paying me to manage hisportfolio and he did so with
(12:22):
pretty tight reins initially.
As we went on um, he realizedthat this side hobby of his that
he kind of developed um wasn'treally, uh, benefiting him any
more than um it could you know,because we made some comparisons
over just our basic models umthat uh, the firm I worked for
uh has and uh he's had decidedto kind of kind of ease up and
(12:43):
even made the mention of youknow, I guess I'm paying you a
particular price, right so?
But we went to lunch a fewyears ago it was actually toward
the end of COVID of it allthings had opened back up a bit
and we grabbed actually it wasjust a cup of coffee under the
lunch hour and I asked him youknow you were doing this before
(13:06):
For a while.
There you kind of it was hardfor you to let go of the reins
with it.
Why are you paying me to dothis?
And he said it's in Georgia.
I know what I'm doing and Ifeel confident when I'm doing it
.
Um, but I'm hiring you reallyas an insurance policy for my
wife and his wife.
Come in that first meeting, camein the second meeting and it
really didn't come ever again.
I speak to her in thebackground of the phones which
(13:27):
she'd pick up, you know, or youknow, talk a little bit about
her workflow, give her an update, but she has no interest in any
of this thing that thingsweren't looking great.
And we just got thenotification from her and we
actually just sent the flowers.
Today the client has passed,and that's what he was with
(13:51):
before.
In his eyes was really thatcontinuity of the plan that he
set in motion, his perspectiveon investing, really looking at
how he wanted his personalinvestment policy statement
managed in line with his wife's,and now we're going to be
(14:15):
finally acting on that, sadly,but I think back to that case
especially obviously timelytoday in doing so, but you deal
with these clients that, attheir level, they have to be
comfortable with whateverthey're they're doing.
So, um, you know, but givingthem some education along the
way, um, telling them, you know,letting them know some things
that they may not know already,um, in approaching things, um,
(14:37):
and perhaps add value around umthe fringes initially, um, and
then slowly kind of work into,uh, what you know, into what you
know to be the best course ofaction for them, and so that's
been really the case with meworking with such individuals.
It is difficult, though,because they do get in their own
way.
Sometimes you have some clientsthat just don't take advice,
and sometimes those aren'treally clients that really
(14:59):
should be working with you.
So there has been a cases wherewe've graduated a client to
perhaps having them do itthemselves or work with another
advisor.
Because of that mentality,because we don't want then
either their hesitation or theirextra methodologies, I guess
(15:20):
that they've come up withwhatever they read on it online
or somebody told them about toaffect their overall and they're
worth.
We're okay, you know, takingsome unsolicited orders or doing
some things that are smallpieces, or taking, you know,
some calculated risk or somebets here and there, but if it's
going to interfere with,ultimately, the projections that
we're having to keep themsecure and making sure that
(15:41):
they're going to actuallyachieve their goals, um, that we
need to kind of pivot.
And so we talk a bit about inthe book, um, getting um, your
why down and realizing, okay,what is it that?
Um, you're headed to?
So, in the case of business,exit, a lot of people, their
entire identity is tied up intoit, so they're used to being the
decider, the decision maker, um, at the end of the day.
(16:03):
So what is it that you want todo, what do you want to be known
as and what are you running to?
What is that next second act,what's that next thing that you
want to get to?
Um, and crafting your, your, uh, your identity around that um,
whether it's being a parent orgrandparent or spouse or
traveler or, um, you know,philanthropic goals or whatever
it may be, because otherwise, ifyou're sitting at home with
(16:24):
nothing better to do, you'regoing to just look, you're
really just going to look at thenews and you're probably going
to take some action that may notbe in your best interest.
And it's a fine line sometimeswith investing and gambling, and
so you can kind of get caughtup in some of those activities
if you're not careful as well.
Speaker 2 (16:42):
And in gambling, and so you can kind of get caught up
in some of those activities ifyou're not careful as well.
Speaker 1 (17:04):
When I look at the focus on their finances, that's
an excellent and very insightfulquestion, michael, and I don't
know if the clarity is from thefasting or whatever it may be,
but the self-recognition of it,men are they.
They, they do tend to be theones more fascinated with the um
, the decisions, or the thetrades um aspect of it.
(17:28):
It's interesting.
I think it kind of goes back tohow many times, if our, our,
our partners are um, if, uh, wehave a wife and we're a, we're a
husband, then, um, they come tous with a problem and we get
yelled at because we come upwith a solution.
We get in trouble for coming upwith a solution because the
reality is they never wanted asolution to begin with.
(17:50):
They just wanted to vent and beheard.
And so I find myself in aninteresting position when it
comes to men and women investorstoo.
When they come to me withconcern about the markets, a lot
of the times with the femaleinvestors, they they come to me
with concern about the markets alot of the times with the
female investors.
They just want to be heard andthey tend over time and I don't
have any published data on thisto back it up, but they do tend
(18:12):
to be the better investors overthe long haul because they don't
make emotional decisions withtheir money.
Um, you know, they get the badrap of being more emotional, um,
but the truth is it doesn'tmean that they they then make a
decision based on it, whereasmen, they want to take an action
.
They see something happen.
What are we doing about it?
What are we going to change?
(18:36):
How are we going to hedge this?
How are we going to, um, youknow, jump in and out of the
markets, time things, all thosekinds of things and concerns to
worry about as well, tradingcosts, all those kinds of things
?
But I think it was.
There was a study done Ibelieve I'm going to misquote
where, where it was from, butprobably read by Michael when
(18:56):
they looked back in accountsheld by deceased people actually
outperformed those that wereactively trading, and so, again,
not probably the platform tosay that out loud, on tough, but
nonetheless and sometimes thatcan be the case that the right
action is no action at all If wehave a good quality position,
and I'm holding it to fruitionthere and allowing it to do so.
(19:18):
So I think that's kind of thecase with men and women.
I think that's some of it thebehavioral psyches that are in
there in their approach to aproblem.
One is to kind of talk throughor walk through it and kind of
get back to kind of fundamentals, and for men, a lot of times
it's to take action, and maybethat's what the appeal is in
that case, and certainly amongstyour listeners too.
Speaker 2 (19:38):
By the way, you can absolutely say that, because
I've mentioned that myself.
That's the problem withover-trading in general,
especially when you're not doingit on a systematic way, right,
and discretionary work from adiscretionary perspective.
Speaking about disconnects,there's also a disconnect
between generations, or amonggenerations, right?
So I forget the stat, youprobably know it.
(19:59):
Something.
Um, I forget the stat, youprobably know it.
Uh, something along the linesof you know, the first
generation tends to, if theyinherit a lot of wealth and of
having a lot less by the end oftheir lives, and then the next
generation a lot less.
So it's like yeah, that's shirtsleeves to shirt sleeves, Uh
yeah, exactly Right, let's let'stalk about that, Cause I think
that's interesting.
Why?
Why is that the case anyway?
Speaker 1 (20:17):
Yeah.
So I think I'm kind of livingproof of it a little bit, right.
So my dad came over from Greece.
He was an immigrant with afourth grade education.
I saw his hard work.
He did end up getting to whatwe call that two commonwealth in
the book, but he did it throughthe grind method, right, just
putting away, putting away,saving, saving.
I thought we were really reallypoor growing up.
(20:38):
Turns out we were, you know,very lower middle class kind of,
or maybe upper lower class kindof thing, but I thought we were
much more impoverished.
It was just the fact that theywere incredibly frugal with
their money and then puttingmoney away.
I think that leads and there'skind of a phenomenon in the US
that first generation Americansyou know those that kind of come
from, those immigrants that aregiven the opportunities, like I
(20:59):
was, to have education etcetera, but still seeing that
work ethic that's there, tend toelevate that success even
further.
And that's usually where thatbig two comma wealth kind of
comes in the next generationafter them.
Because you've, you know, myparents' generation, for
instance, kind of grindedthrough, did all those kinds of
things, and that's inherent notto kind of squander wealth.
But I also want my kids to havewhat perhaps I didn't have and
(21:23):
so I start to maybe spend alittle bit more of it.
But in that generation, thenext generation.
So I look at I got two teenagedaughters and I've done my best
around kind of giving themaccounts and showing them you
know money management techniqueset cetera, and letting them
know about just spendingpatterns and how much stuff
actually costs.
And letting them know aboutjust spending patterns and how
(21:43):
much stuff actually costs and infact actually giving them a
sizable budget.
We just started doing this alittle while ago and allowing
them to actually pay forbasically all of their
discretionary expenses.
But they have a set budget andthat's what they have to do, is
necessary, because it's easy tospoil and to give them a
disconnect, simply out of love,out of trying to give them
something more, but notinstilling in them the values,
(22:04):
not just hard work, but reallywhat money means, how it is a
tool and that it doesn't justgrow on trees.
So a lot of that phenomenondoes exist where the generation
that creates it starts spendingat the second generation quite a
bit and completely squanderedusually by the third generation
that's there down.
So I think it begins ineducation I talk about in the
(22:26):
book.
You know having family meetings,the older generations not so
much the boomers, but thegeneration just before them.
You really didn't talk aboutmoney.
You didn't know what yourparents had or didn't have, and
certainly in some of theimmigrant population I know the
Greek culture, et cetera.
You didn't have um, andcertainly um in some of the
immigrant population.
I know the greek culture, etc.
Um you didn't share um the.
(22:47):
It was a surprise what youinherited or didn't um.
I think we're seeing a changenow where people are becoming
more open um and discussing umwhat they have, especially as
parents have grown older.
They're not just passing away,they're, they're living longer,
but they need more assistance indoing so.
So they're putting their kidsas powers of attorney, they're
adding them to accounts, thosekinds of things.
We talked about some of thedisclaimers, and why not to add
(23:09):
people to accounts but put themon as power of attorneys for a
whole different set of nuancedissues that go on there in the
estate planning section of thebook, I think, having
discussions around money andthen when the next generation
doesn't see this as a windfallbut as an accumulation of the,
the life's work of your parents.
Um, it changes the narrative.
(23:31):
Um there, so it's not just hey,I got this inheritance from mom
and dad, I can finally pay offthe cars and the credit cards
and maybe, maybe, the house.
Um, and it's just poof, it'sgone as opposed to okay.
They were strategic about it.
They had it set up this way sothat it would generate this
amount of income for a month, sothat they could supplement a
lifestyle that did this.
I want to do the same thing andI think now, with people tending
(23:54):
to have less and less kids andthere's more of a concentrated
wealth and I don't have thenumbers right offhand, but I
mean this is the biggestgenerational shift as far as
wealth being passed on from thebaby boomers down.
We need to have that education,we need to have those
discussions around money, andit's sad because really, one of
the primary reasons I have a jobat all is because we don't
teach any of this in school.
(24:14):
A lot of it is kind of justbasic personal finance that
we're having conversations overday in and day out, but they're
really things that should betalked about even around the
kitchen table understanding andbeing ready to share what you're
ready, what you're okay withsharing at the time, but also
showing your why and your how tohow you got to the numbers that
you are sharing with thatsecond generation to hopefully
(24:35):
extend it further.
And it doesn't mean that youhave to be the Rockefellers and
set up some dynasty trust overthe generations in order to do
it.
It can start principles inthere that, and I think that
education, is probably thebigger inheritance at the end of
the day.
Speaker 2 (24:47):
You don't have to set up trust, sure, but you do have
to be very mindful of taxes,and I think we need to talk
about that, especially in anenvironment where there's a lot
of uncertainty on policy ingeneral.
There is a lot of validity, Ithink, to the idea that, given
how much debt the US governmenthas, one way that you can fill
(25:08):
the coffers up at least a littlebit is through the estate tax,
the municipal side, the stateside.
People will literally leave tostates that have better estate
tax rates, right, just so thatthey don't have to pay a large
(25:29):
amount for the next generation.
I want you to talk about theimportance of tax planning from
that perspective, because Ithink it's really
underappreciated.
Speaker 1 (25:37):
Yeah, so, and you make a good point Each state is
different too.
Some states have a lowerthreshold than others when it
comes to the estate tax and whatcan be given, and right now not
as big of a conversation, butit is going to come to the fore
here very, very soon with theending of the tax cut and jobs
(25:58):
act and the likely extension andwe'll see what happens
ultimately at the end of the day.
But right now the inflationadjusted return on the state tax
is, I think, 13.99 million thisyear per person, so pretty
large estate for it to beeffective now.
But if it resets it'll go downto 5 million inflation adjusted
(26:18):
per person, which might be morein the realm of where people
could hit.
But there are, to your point,in local governments the state
governments anyways there aresome that are far lower than
that A million dollars.
Some, depending on who theheirs are, can go significantly
lower, even into just a fewthousand or $25,000, whereas the
tax may set in and it may be anarea where, depending on policy
(26:43):
and depending on, you know,party, that comes back into
focus as far as where to resolvesome of the national debts.
I don't know that it's allthere, but there's lots of
nuances in it.
Especially when it comes toinheriting things like property
or businesses, it becomes reallydifficult because you have
liquidity issues and how do youpay the tax, and it becomes very
cumbersome to do so.
(27:05):
Nonetheless, you're not wrong.
There is thing, or there arethings to consider with it, and
we talk a lot about it again inthat estate planning chapter of
my book, in where to keepcertain assets, how to title
things, etc.
Because sometimes people justdon't kind of think it through.
I talk about an example in thebook that maybe we are a
(27:26):
philanthropic rechargeablecharitable client.
So some people they might titheto their church so they say,
okay, well, not just during mylife, I want to do that at the
end of my life too.
And someone put 10% across theboard to my church.
Well, that's all well and good,but a much better way to
approach.
It would be okay, what is thatdollar amount or that figure?
(27:47):
And either set a separateaccount or put it in a
percentage rate as a beneficiaryto your church, only with your
taxable, your excuse me, yourpre-tax accounts, right, so your
traditional IRAs, your 401ks,et cetera, because they're going
to inherit that tax free as atax-free organization, why would
you give the church your Rothaccounts or even your regular
taxable accounts that have astep up at cost basis upon debt,
(28:09):
so not to squander that wealthaway, right?
So I talk about that's likeleaving the IRS a tip
unnecessarily, so how do youavoid doing that?
So sometimes it's juststructuring where to keep your
beneficiary designations to.
Another thing to kind of thinkabout is what kind of assets do
you own?
So some things become tax bombs, right?
(28:32):
Or they don't get a settlementbasis at all, or stretch an IRA
to your beneficiaries, with someexclusions, obviously your
spouse, depending on age of thesibling, and their close, if
they're disabled.
There's some exceptions to it.
However, if your kids inheritit, under most circumstances
(28:54):
they're going to have 10 yearsin which to liquidate the
account and take thosedistributions out from your IRA.
If your kids are successful orlikely they're to inherit that,
perhaps in their late earningsyears, right before the
precipice of them going intoretirement or at the beginning
of their own higher income years, it can be an effective tax
(29:17):
that's much higher than yours inyour late years where you're
not spending that much orperhaps don't have the income
levels that are there.
So how do you deal with that?
Well, educating again the nextgeneration around taxes and how
that's handled.
I give an example of a book ofa client who inherited some
money from an uncle and in theircase was sizable a few million
dollars and the initial advicethey got from the advisor that
(29:40):
they sought out was to just waitto the end of that 10 year
period, let the taxes defer andthen take it all out the end.
Well, the problem is thatthrows them, for the majority of
the assets, to the highest taxbracket.
It was a huge tax burden.
The more current way in doingso is talking about, you know,
topping off your tax brackets,finding a more favorable rate in
(30:01):
which you could deplete theaccounts to keeping within that
rate over that 10 year period,at least utilizing in your favor
so that you're only paying, intheir case, the 24% taxes as
opposed to 37% tax rate.
In their case it was severalhundred thousand dollars in tax
savings they projected over justthat period of time, not to
mention that we amplified it alittle further and they happened
(30:21):
to young and a low earner,first jobs at a college, that
kind of thing, being able tohave them fit all of their
income into Roth assets actually, and then live off of some of
the non-qualified accounts thatthey inherited.
So it keeps them at that 24%level along the way, fully
(30:44):
funding their Roth IRA, superfunding it, so to speak, and
allowing for another tax-freeasset for them in the future and
perhaps the third generationafter that.
So there is an approach with it.
Obviously, there's also justestate tax techniques, whether
it's using different vehicles,like prepaying it through a
local, like insurance trust,whether it's setting up methods
to exclude assets from yourestate during your lifetime,
(31:07):
whether it's.
There's all kinds of tricks andtips that we talk about in the
book, and certainly you'd wantan attorney to sit down with you
and kind of find out the bestpath with it.
But taxes are complicated.
I mean you want to work withyour accountant along your
lifetime and I do find that thatbecomes an issue, right.
So we just had the tax deadlineright yesterday and more often
than not I find that accountantsare tax preparers but they
(31:31):
don't prepare you for taxesright.
So they're the ones filling outthe forms, but they're not
doing forecasting, they're nothelping you plan along the way.
So we talk a bit about that.
How can you create arelationship between your
financial advisor and your taxprofessional in which they can
collaborate and think forward,because your financial advisor
is typically looking out forwarddecades, but you judge your CPA
(31:51):
based on the return or theamount of money you owe each
year.
What tricks can you do?
What can you do in that case toget a deduction or amend your
return a little bit to make surethat your taxes are a little
lower this year?
But sometimes that can beshort-sighted, just like in that
illustration with the 10-yearwaiting to take the distribution
.
There's actually more proof forthem to take it along the way,
and they worked with theiraccountant to make that happen
(32:13):
and do it the right way.
And then even for an investmentstrategy, not to bag on things
like annuities, but some thingsdefer taxes during your lifetime
, which sounds great, but thenbecome a big tax hit to your
heiress Annuities.
That's all growth that has thepotential.
That's all based on incomeincome and we don't tax income
(32:35):
like we do investments a lot ofthe times.
So you have capital gains ratesavailable, you have step ups
and bases, but when it comes toputting an insurance wrapper on
things like an annuity.
Sometimes you can lose some ofthat and you think you're being
safe, you think you're being taxefficient during your lifetime,
etc.
But you may be exacerbating anissue along the way.
So we talked about that and wetalked about during your
(32:56):
lifetime if you're in a lowertax bracket rough conversions,
topping off the tax bracket thatyou're in, putting some money
in Roth but making sure it growsas well.
So that's where you want tohave a little bit more of your
higher speed investments, yourmore aggressive or
(33:17):
growth-oriented investments, sothat it has that opportunity to
grow.
Otherwise, what was the pointof putting it in a tax-free
vehicle if it's not going togrow?
We talk a lot about healthcaresavings accounts.
I think that's going to be moreand more part of financial
planning going forward as thatbecomes part of the component
and how to utilize those theright way, instead of taking
your HSA debit card and using itall the time.
We talk about in the bookno-transcript we don't talk
(33:56):
enough about it.
You know you get the taxdeduction going in and potential
.
You know the tax deferral whileit's in there and then
potential tax free distributionfor healthcare at the end.
Under current tax law, though,you got to worry even about that
, because if it's inherited, theHSA becomes taxable all in the
year of the inheritance.
So it all becomes a big gain tothem and a problem.
(34:17):
So we talk about methodologiesin which to either reduce that
or roll it over to your IRA, etcetera.
So at least there's a stretchthere.
It gets very complex.
Obviously, I'm not a CPA or astate planning attorney.
So see those ones, you seethose ones, but your advisor
(34:39):
should have some understandingof the nuances there and be able
to kind of approach those withthought, because it's not about
what you earn, it's about whatyou keep at the end of the day,
and that tax alpha can besignificant over the course of
your lifetime.
Speaker 2 (34:45):
I'm curious to get your thoughts on the
proliferation of some of theseservices that use AI for
financial planning.
Are those fraught with issues,errors?
I mean, is AI going to replacea lot of the types of things
that you do?
Speaker 1 (35:03):
You know, I think it's going to disrupt a lot of
industries, but I thinkultimately, it can be a source
of real good.
I'm excited for AI in thefinancial planning space because
I think it can be leveraged.
The problem is, though, whenyou put in inputs, a little
nuanced output can or input canlead to a pretty messed up
(35:25):
output.
Right now, ai, depending on howyou phrase a question, et
cetera, can kind of spit outresults that might be what you
wanted it to say or what itthinks you want them to say
along the way.
So being careful with it, Iknow it's something that I think
a proper advisor can utilizeand leverage.
I think large firms are usingit in a way that's pretty
(35:46):
interesting.
I've heard lots of talks withinthe industry that AI will be
allowed us to take advisor notesfrom perhaps thousands of
advisors across the country andmaybe they work all with a
certain nationwide employer andgive you kind of the insights
and outsides of the plan Ifthere are a certain level of
(36:08):
executive, what their stockoptions look like, what the best
methodology is to kind of spitthat out.
So I think it can enhance therelationship.
But I think the whole idea ofhaving an advisor is to have
that human interaction, to havethat behavioral kind of coaching
along the way, and there'snothing like that, especially in
volatile markets, to kind ofkeep you invested, reminded of
what the plan is, et cetera.
But there are components, likeyou said basic asset allocation,
(36:31):
maybe even basic asset locationwhen it comes to taxes, etc.
A lot of that is going to startrelying more on AI, but there's
going to be some nuances inknowing you, your family makeup,
what your goals are and trulykeeping those top of mind from a
human-centered standpoint.
But I think it complements theoverall plan and doesn't
(36:52):
completely disrupt it either.
But I don't think it'ssomething that can be ignored by
advisors.
But I don't think it replacesadvisors and it's kind of like
you know, even just with basicasset allocation we've talked
about, you know, robo advisors.
Before that they were going totake over everything and that
has not been the case.
But there is a space for it.
But as people's wealth becomesincreasingly complex, they do
(37:14):
want to sit down and talk with ahuman.
As much as they like theirphones and talking and
double-checking things orlooking at things.
They want to have that humaninsight to make sure.
Is this really how it works atthe end of the day, and do I
have somebody that's human,that's accountable and that
could be that accountabilitypartner along the way too?
So to your point.
You know, michael, I know wewere talking about before this
(37:36):
podcast about kind of yourjourney with fitness, right?
So there's lots of AI fitnessesout there.
I have an anatomical.
I think it's great, you knowall those kinds of things, but
the truth is I don't think itcompletely replaces personal
trainers, because having thataccountability, having that
person to coach you on thingsthat you already know and should
be doing, but helping to kindof bring it to the fore, and
again that accountability role Ithink still has a lot of merit
(37:58):
and a lot of value.
So I think it's a compliment,not something that completely
replaces.
Speaker 2 (38:03):
Talk me through the process of writing the book.
Somebody once said to me thathaving a book is like a very
expensive in terms of timebusiness card.
I think there's some degree oftruth to that.
But you know, is it one ofthose things where, as you were
writing it, you had to doresearch beyond what you already
knew?
I mean, how easy was it for youto do?
(38:23):
Talk me through that wholejourney.
Speaker 1 (38:24):
Yeah, it was a pain in the butt, the whole thing was
insane.
So it's something I alwayswanted to do, you know, and I
had thoughts that I wanted toput together.
I didn't know how to puttogether them.
I'd never written a book before.
So initially, you know, you goto some conferences, advisors,
and they talk about, you know,companies that'll help write the
book for you, help do this orthat, based on a series of
(38:47):
interviews, so I said, okay,well, that'll help kind of
confine things, et cetera.
Um, I said, okay, well, that'llhelp kind of confine things, et
cetera.
So I started down that path, um, in working um with someone to
so first create just thatdetailed outline.
And that part was great.
Um, she had helped, uh, severalauthors in this uh, and and
wealth management um put somebooks together, kind of new
(39:10):
issues out of things, and so, um, we went down that path and
helped with kind of a detailedoutline on the construct.
Um, after a series I think itwas 10, 10 interviews that I did
, the third kind of came up witha thread um of things that that
she thought would put togetherwell for a book.
And then, um, I started thatand then, um, it's like, okay,
we'll go to the next phase andand even do so, that kind of
(39:30):
help write the book as well.
The actual book itself, um, thatdid not work for me, um, though
, because, as it got nuancedbeyond the outline, you have to
have somebody this, this isn'tjust a book of feelings.
There are certain parts of that, of course the eq component,
the stories about my dad, etc.
That that were helpful in kindof constructing the storyline
with it, but when it gets to theactual financial plan, the
(39:52):
advice, the um, uh, the thingsthat we talk about on the
strategies, I should say, um,there's not any direct advice in
the book, but, um, the nuancesthat are there, um, and even me,
when I read the book now,there's like maybe I should have
included this, maybe I shouldhave tapped this at a certain
point.
Just kind of have to let go andsay, okay, let's go forward.
But there was a hiccup alongthe way too, because we were
(40:13):
going to release this book inOctober.
Then it got delayed untilJanuary and then by then tax
laws had changed and numbers hadchanged.
It was right up to the deadlineto make sure I could get it
resubmitted and hopefully, thebooks that went out on Amazon
and Barnes, noble et cetera,made it out with the right
numbers in there.
We made numbers in there.
(40:34):
We made it just in time.
Um, I think there's only uh oneedit that the word currently has
one hour instead of two hoursthroughout the whole book.
But those little things, as aperfectionist, kind of eat away
at me.
But, um, I would say thedifficulty is keeping it in a
fashion that's um relatable,somebody to read and walk away
with some understanding and sometips and and actionable ideas,
um, seeing how it can pertain totheir personal situation,
(40:58):
regardless of level of wealth inthere.
Um, and that's been thefeedback that I've gotten a lot
of is uh, that's that's comeacross um as professional.
Though when I read it likeagain, again, I over, over
worried and analyzed I shouldhave said this, or if I should
explain it with one more wordhere, this or that or another
sentence here to kind of recapit.
But it can easily kind ofbecome overwhelming.
(41:18):
So the idea behind the book isit to be just enough where you
get the idea of things andunderstand that you don't know
what.
You don't know perhapsresources and the tools so you
can understand some of theindustry jargon around it and
how to really consult with yourteam of advisors in order to, um
, to, to enact, uh, some of theand implement some of the things
(41:40):
that pertain to you in the book, yet also be able to kind of
judge your current set ofadvisors and say you know, if
they're not talking to me aboutthis, why do they understand
these concepts?
Are they doing it, um, or arethey just kind of doing a very
bland and generic advice and Ihaven't done any drill down?
So, um, there's some of that inthere.
Um, I try to recap it withsomething that quirky but fun
for me, I call the swim lessons.
(42:01):
So, stefano, welcome investmentmanagement lessons.
Kind of a nod to my dad whocame over from, from greece, who
you know, country known for allits speeches, but he never
learned to swim himself.
But but he did learn to swimfinancially, um, and so we kind
of recap each chapter with someactual ideas, some questions
that are posed, some examplesthat um, hopefully take the
material that can be a snoozefest for those that are not, you
(42:23):
know, fully, uh, into the worldof financial planning and, um,
really kind of circle back andsay, okay, this is the stuff
that pertains to me, perhaps,and this is stuff I need to do
and take some action with.
So it was a fun journey.
My wife is certainly glad it'sover.
I'm glad to have that time backand not waking up in the middle
of the night.
So you're not going to editthis for that.
(42:44):
And then also, it was hardcutting things out but to try to
keep it around 200 somethingpages so that it's not
overwhelming, doesn't become afinancial you know, phone book
but has enough meat to it whereit makes sense.
And then getting out of my ownhead about other professionals
reading the book and me beingtoo technical in there just to
try to appease an audience thatreally the book isn't, is not
(43:06):
intended for at the end of theday, and you're always going to
have your critics out there, soof course says that all three.
You're worried about your firstnegative reviews, but I guess
you don't make it until thathappens too.
So we'll see how all thatunfolds, but I'm excited about
the launching and how it's allgoing so far.
Speaker 2 (43:22):
George, for those who want to get in touch with you
because they're intrigued byyour knowledge set and who want
to potentially buy the book,where would you point them to?
Speaker 1 (43:34):
Go to 2comoweltcom.
You can spell with the number 2or space out 2comowelt.
You can also just Google myname and I'm sure I come up that
way too.
Feel free to reach out.
The book's on there.
You'll be able to buy the book.
There's a contact site aboutcontacting me.
As far as an offer to keep upwith where the book's at and
some of the accolades and thingswhere we'll be featured at, so
(43:56):
I appreciate it.
Thank you, michael.
Speaker 2 (43:58):
Appreciate those that watch this Again.
This will be an edited podcastunder LeadLag Live and all your
favorite platforms.
I am now going to take a break,given that I have done two
other ones of these back to back.
Appreciate the knowledge herefrom George and thank everybody
for watching.
Cheers.
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.