August 15, 2025 • 51 mins
Are your financial dreams feeling out of reach? What if I told you the secret isn't working harder or sacrificing more, but simply starting now and letting time do the heavy lifting?
In this eye-opening conversation with Chris Wilkens, Vice President and Financial Advisor at RBC Wealth Management, we uncover practical strategies that can transform your financial future regardless of when you’re starting. Chris brings unique perspective as both a Marine Corps veteran who commanded troops in the Battle of Fallujah and as a wealth management professional dedicated to helping clients achieve financial freedom.
The statistics are sobering: half of American households have no retirement savings whatsoever. But rather than focusing on the problem, Chris guides us through actionable solutions, explaining how compound interest works like magic for those who understand its power. Using the "Rule of 72," he demonstrates how your money can double every decade without you adding another penny. This isn't get-rich-quick nonsense; it's mathematical reality that too few people harness.
Perhaps most powerfully, Chris reminds us that successful retirement isn't just about money—it's about purpose. "Retirement is easier if you have something to retire TO as opposed to retiring FROM something," he notes, explaining why even wealthy clients often continue in meaningful work after formal retirement.
Whether you're playing catch-up with retirement savings or looking to optimize what you've already built, this conversation provides the compass you need to navigate the sometimes overwhelming world of personal finance. Your future self will thank you for listening today.
How to Contact Chris Wilkens:
RBC: https://us.rbcwealthmanagement.com/c.wilkens/
LinkedIN: https://www.linkedin.com/in/christopherwilkens/
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Resources from This Episode:
Don’t Retire Rewire: https://amzn.to/45mMPQk
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Todd Carswell (00:00):
This is the Cluttered Path, a compass for
midlife.
Do you ever feel like yourfinancial dreams are too far out
of reach?
What if the secret to achievingthem isn't about working harder
or sacrificing more?
(00:20):
Here's the thing Establishingsimple and achievable goals
today could be your ticket to afuture life you never thought
possible.
Today, James and I are talkingto Chris Wilkins, Vice President
and Financial Advisor at RBCWealth Management.
Chris Wilkens (00:33):
Chris, welcome to the show.
Thank you for having me Forfolks on video.
Todd Carswell (00:38):
You're going to see a brief disclosure here
Before we start the interview.
Rbc Wealth Management.
They don't provide tax or legaladvice.
Please consult your tax orlegal professional.
So, chris, let's start with abrief bio.
He grew up in Yonkers, new York.
He joined the Marine Corpsafter 9-11.
He trained as an infantryofficer and then Chris would go
on to command 3rd Platoon ofBravo Company, 1st Battalion,
(01:01):
8th Marines, in the SecondBattle of Fallujah.
After the military, christrained to become a financial
advisor and he's also heavilyinvolved in the veteran
community.
So, chris, would you want toshare some information on the
veterans organizations thatyou're working with?
Chris Wilkens (01:14):
Sure, there's a lot of them, and each one of
them focuses on a different areaof benefiting veterans.
So the ones I am primarilyinvolved with are in the New
York City area and within NewYork City.
I'm very involved with myAmerican Legion post, and the
reason I mentioned that one isbecause we are kind of like a
(01:35):
resource to a lot of differentnonprofits within New York City,
and not just nonprofits butalso affinity groups, commonly
called employee resource groups.
So at RBC we do have anemployee resource group for
veterans very common at otherbanks and organizations as well
and then you also have asignificant number of veterans
(01:57):
in the five boroughs of New YorkCity that are currently
students.
So these numbers are ballparkbut they're pretty close.
Throughout the past 15 yearsthere's been 12,000 veterans in
New York City schools withinColumbia, fordham, nyu, john Jay
Lehman, the City University inNew York, the CUNY system, and
(02:18):
so you have a lot of veteransthat are attracted to New York.
And then you have a lot ofcompanies that are looking to
hire veterans as well becausethey do value their unique
experience, and so we try and belike the glue that connects the
transitioning veterans that arein school with the
organizations that are lookingto hire veterans, and that being
(02:39):
just one example, because Ithink the area where I'm most
involved is helping thattransitioning veteran into a
career, because it's not oneconversation, it's a process
over many years, because youdon't really know what you're
good at.
So you have to kind of dip yourtoes in the water and find out
I got an internship for and I'mworking in, accounting.
(03:01):
You know some people mightreally like it, some people
might not, and then when you doit you kind of fine tune what
might be a more appropriate fitfor you.
So there's a lot of nonprofitsthat help veterans with that
transition from military serviceinto either college and or then
a career afterwards.
But then there's a lot of otherones that help veterans who
(03:22):
might be coming when they endactive duty.
Maybe they're overseas,somewhere in Japan or Germany
and they have a spouse that isnot a citizen and now they're
going to come back here, andthey had kids overseas, now they
got to bring them here.
So you're moving a family herethat needs some help with the
documentation and finding aplace to live and college and
(03:42):
job, and so there's a lot ofnonprofits out there doing a lot
of good things, but I'd say theones I primarily focus on would
be helping veterans with thattransition into the private
sector, because it's something Idid and also there were other
veterans that helped me with mytransition out of the Marine
Corps.
Todd Carswell (03:58):
16 years ago.
Thanks for doing that, man,because veterans need that help.
Man.
I remember a lot of times I sawa lot of guys that couldn't get
out.
They wanted to get out but theycouldn't because they didn't
have anything on the outsidewaiting or no one to help them.
So I mean not that they were inprison or anything, but you
know how it goes.
Chris Wilkens (04:16):
Well, it's whatever you're going to do in
life, whatever the endeavor isgoing to be, if you could talk
to someone who was in yourposition a couple of years prior
to kind of help you get startedor give a little guidance,
that's really what most peopleneed.
So I think you had said whenyou were in college was it a
former SEAL or a former Navy guylike, saw you a Marine, just
(04:36):
kind of pulled you aside andthat kind of helped you, kind of
lead your.
You ended up where you aretoday because of it.
Todd Carswell (04:41):
So yeah, Name is Bill Wiseman.
He was a SEAL team commanderand went to grad school at NC
State.
Dude hooked me up, man Justpointed me in the right
direction.
I was like, oh okay, that's howI met James.
And here we are.
So yeah, but side note, we justtook vacation in New York City.
I've been to New York City a lot.
(05:02):
I've never driven there.
So we drove up though, wentthrough the Lincoln tunnel,
stayed in Midtown East.
I've never driven to New York.
Oh, I'm cruising around.
It wasn't bad, but I'm cruisingand everybody's honking, you
know.
So that's a, it's new to me andI'm like cool, everyone's
honking.
So there was this dude.
Literally the light turns greenand this dude Jays in front of
(05:22):
us, he runs across andflip-flops and he looks like the
dude Dominic West, hischaracter in the movie 300.
He was the evil senator,anyways.
He comes flip-flopping acrossthe street and everybody's
honking, and so I was like Ijust laid on the horn, I just it
was a bit much.
And the guy looks over at meand he starts, starts yelling
(05:44):
all these obscenities and stuff,but then he sees my face and
I'm just like you know anyway.
So he was like he probably sawthe plates and we're like this
guy's from North Carolinafreaking bumpkin.
Anyways, that was my foray intodriving in New York, but we'll
go and get started in thequestions here.
In a previous episode, jamesand I talked about the
(06:04):
retirement crisis in America.
Now we've got way too manypeople hitting the retirement
age without sufficient funds toquit working.
So what recommendations do youhave for people in that
situation?
Chris Wilkens (06:15):
Yeah, that's an accurate statement.
Even according to the FederalReserve, in 2022, half of
American households had nosavings in their retirement
accounts, and the unfortunatereality is that, if you do not
have the funds to retire in thelifestyle you want, you really
only have two options, and thatis adjust your lifestyle or keep
(06:37):
working.
That's an unfortunate positionto be in when you're at an age
where you'd really like to stopworking.
I think some of the thingswe're going to talk about today
I'm going to come back to it iswhat we do is retirement
planning, and a lot of thethings we're going to discuss
today are going to go back tothat.
And ideally, if you are withinI'd say, within 10 years of
(07:01):
retirement, a retirement plan isan excellent tool.
It's a tool, but it's also likean exercise to go through,
because basically what it doesis you say here are the current
asset levels that I have If Icontinue to save at this level,
given this rate of return, and Iretire at this age with this
(07:21):
retirement lifestyle, like adollar amount, just say, 10
grand a month after tax, andthen you have to take into
account taxes and inflation,because 15 years later, say you
want to retire this year andyou're like I want to live, my
wife and I are going to live off10 grand a month after tax.
That covers our bills.
Well, 10 years from now that'sgoing to need $12,500 a month.
(07:45):
That's 10 years of 2.5%inflation.
It's actually more than thatcompounded.
So someone wants to retire at60, and they're like okay, I
have the assets to retire nowand I can live this lifestyle.
Well, in 10, 15, 20 years,everything's going to cost more
and you're going to need moremoney and you're retiring on a
portfolio at the same size.
So that's why the retirementplan is good, so you can kind of
(08:06):
forecast if you can afford tolive that lifestyle.
So, to bring it back to what Isaid earlier, if you can do that
about 10 years before you hangup the cleats, as they say, you
know, say you're 50 years oldand you want to retire at 60,
it's a good thing to do, becausethen you could say, oh well, I
don't have those assets to livethat lifestyle that I want.
(08:27):
If I saved an extra five grand amonth for the next several
years and then, a couple ofyears, an extra 10 grand a month
, could I actually live thelifestyle I wanted.
So going back to, if you do theretirement plan, maybe 10 years
before you retire, you havetime to make adjustments so that
when you get to retirement it'snot a surprise where you and
(08:49):
your spouse or whoever you areplanning to live a lifestyle and
then the day you retire if youhaven't planned for it, then you
find out you can't live thatlifestyle.
I mean, it's hard for anyone totake a step back in your
standard of living, especiallythe older you get and now I'm in
my mid-40s and it's hard for meto take a step back in your
standard of living, especiallythe older you get.
And now I'm in my mid-40s andit's hard for me to take a step
back in my retirement lifestyle.
(09:11):
So yeah, I hope that answersyour question.
Todd Carswell (09:15):
Yeah, I mean, I'm a proponent of radical
lifestyle change.
When you're young, Don't getinto that expensive lifestyle
and just keep saving money.
But when you get older, you'reright, changing lifestyle.
That's a hard thing.
I saw a video where this ladyshe was 60 years old and she sat
there talking about how shecan't afford anything.
She's living in someone else'shouse, she's renting a room in
(09:37):
someone's house, and then she'stalking about all this stuff and
then she finally goes yeah, andso my horse she's got a horse
and I'm like what?
Those things are expensive.
What are you doing?
You got to get rid of yourhorse.
Radical lifestyle change.
But you know I have a pet soit's hard to get rid of.
But, yeah, radical lifestylechange and then reducing
(09:58):
expenses however you can man.
That's my, that's what I wouldsay.
So you know.
Chris Wilkens (10:03):
I will just add a point to that being in wealth
management.
I will say my clients.
Generally they have thefinances to retire in the
lifestyle they want.
I don't have any celebritiesthat live, you know, extravagant
lifestyles.
But what?
Even they tell me the ones thathave been retired for a while
now they're like, even if youhave the assets to retire,
(10:26):
spending is different whenyou're retired because that
money's not being replaced, soany big purchase, it's more.
You think about spending a lotmore when you're retired, even
if you have the assets.
James Robinson (10:40):
Yes, that kind of leads.
My question would be so whatare the common mistakes you see
people making when they're doingtheir planning for retirement?
Chris Wilkens (10:47):
Say a couple things.
I guess it's just not beingrealistic about their spending
or about their savings.
As we all know, money is easyto spend.
It is easy to find things tospend on.
So when one of the moreimportant questions I asked my
so the retirement planning, it'sa questionnaire and it's quite
(11:09):
long, but there's one incrediblyimportant question on there
that kind of determineseverything else and that is what
what is your desired retirementlifestyle in today's after-tax
dollars?
And that takes a while toanswer that question and
normally it's a married couple.
You know that.
I've discussed that with myspouse, because when people
retire and again I'm basing thisoff the age 60, because that's
(11:35):
kind of a ballpark year whenpeople start to retire and a lot
of things change for a lot ofpeople around that time.
The kids can be going off tocollege and you have some few
years of big expenditures ortheir kids are about to get off
the payroll.
Sometimes you're going todownsize because the kids are
off the payroll and you have abig house and now you want to do
that.
Sometimes the mortgage is paidoff, sometimes you upgrade a few
(11:57):
years ago to a much biggerhouse and you really have to
keep the income going, and it'snot uncommon for people to do
some type of part-time work,gradually go into retirement
that as well.
So back to what you said.
What are common mistakes?
If I ask someone what's theirdesired retirement lifestyle and
they respond back with a quickanswer, it kind of implies that
(12:19):
they haven't really thoughtabout that question.
And the reason being is peopleare scared sometimes.
I mean, when you're in your midto late 50s, especially if you
have a job that's physicallydemanding and you're like man,
it's just my back is starting tohurt getting up early and I'm
on my feet all day and you'relike I just don't want to work
anymore.
And then you just start lookingand you're not being honest
(12:43):
with yourself.
I would say yeah, that's good.
Todd Carswell (12:46):
I've got family members who delved into
retirement like putting moneyinto a 401k without knowing much
about compound interest andstuff like that, and so they
just put money into a 401k notthat much money and then the
market would have a downturn andthey would get scared and just
pull it all out, pay thepenalties and all that stuff and
(13:07):
it was like, hmm, okay, that'sone of the mistakes I see a lot
is people don't understand howcompound interest over time
works and they'll go, ah, themarket's going down, and pull
everything out and they're likeI don't want my money in there,
the stock market is risky.
And you have politicians comeout, oh, the stock market is
risky.
And it's like, yeah, there isrisk, but it's a manageable risk
(13:30):
.
Anyways, that's just my input.
But moving away from theretirement crisis, what is your
investment philosophy?
Let's see.
Chris Wilkens (13:39):
Investment philosophy is that the things
that matter the most are theclient's goals and their risk
tolerance, and so I don't thinkany particular investment is bad
or good, it's more of whetherit's appropriate.
So, just as an example, if youhave a couple, say, in their
mid-60s and they're well to doand they're well off and they're
(14:03):
retired and they're relying ontheir portfolio for income,
their portfolio that's requiredfor retirement is not going to
have a lot of risk to it becausethey're interested in cow
preservation and income.
But then if they have agrandchild and they want to
invest some money in a collegefund for that grandchild, that
money is not going to be spentfor at least 18 years.
So it would be more appropriateto have an aggressive portfolio
(14:27):
for that money, right?
So the goals of what the moneyis for and the client's risk
tolerance is that's going todetermine whether an investment
is appropriate or not.
And there's an aspect of thiswhere some people just don't
like certain types ofinvestments because of something
they heard and like you I justkind of alluded to.
(14:50):
There's risk with everything.
So even if you don't want toinvest your money and you want
to sit in cash, if you do thatover a long time, the value of
your cash will drop due toinflation.
So even if you take no risk,there's a risk in that as well.
Todd Carswell (15:07):
Oh, that's yeah, that's right.
If you don't do anything,you're just hoarding cash.
It loses value.
Wow, yeah, Good point man.
James Robinson (15:14):
So would you say , would you recommend like stock
ownership for everyone?
Chris Wilkens (15:19):
Stocks, yes, but let me elaborate.
So, when you're looking at thetwo kind of most common types of
investment that people arefamiliar with is there's stocks
and there's bonds, and so stocksare relatively simple to
understand.
Stock is equity, it meansownership.
So say, a company has a millionshares outstanding and if you
(15:40):
own one share of that company,you are one millionth owner of
that company.
And if there's higher demandfor that stock, you are one
millionth owner of that company.
And if there's higher demandfor that stock, the value of the
stock is going to go up.
And if there's lower demand, ormore people selling than buying
, the value of the stock goesdown.
So over time, generally, thelonger you hold a stock, the
less risky it becomes, and thelonger you own a bond, the more
(16:04):
risky it becomes.
That's not my thoughts, that'sWarren Buffett's and I think
he's accurate.
And then, when it comes to abond, the unofficial comparison
is that's an IOU, it's you'reloaning someone money for a
certain period of time andthere's a set interest rate and
you will receive that interestin payments as long as that
(16:24):
money is lent out and whateverthe term of the bond whether
it's a two-year bond, afive-year bond or a 10-year bond
.
When that matures, you get thatmoney back.
So if you are a young personand in the example you just gave
, which was a 401k, so a 401k isa type of retirement plan that
(16:44):
you cannot pull the money out ofuntil you're 59 and a half
without taking a penalty inaddition to paying the taxes.
So if you are a younger personand you're investing in a 401k
or some type of retirementaccount, those assets have a
30-year time horizon and therewill absolutely be some downturn
(17:05):
in the market and whenever I'mtalking to clients that may have
not invested in stocks before,you do have to manage that
expectation.
The market does have some verygood years.
It also has some very bad years.
However, I think a good strategyfor investing in the equity
markets and a lot of people dothis in their 401k plan is a
(17:27):
strategy called dollar costaveraging.
So let's just say,hypothetically, you wanted to
say, put $12,000 a year intoyour 401k plan and you put in
$1,000 a month for each month ofthe year, as the stock market
over the long term has generallygone up.
It's going to go up, but it'sgoing to be volatile along the
(17:48):
way.
So if you're putting in thesame amount every month when the
market's down, you're buyingmore shares when they're less
expensive.
And if the market continues togo up, but you're putting in the
same amount, you're buying lessshares when they're more
expensive.
So it's the time horizon andthe goals.
And if someone is investingknowing that the market might go
(18:10):
down, as long as they're kindof prepared for that and they
better understand it, that overthe long term they will
significantly benefit.
But yeah, there is certainly apsychological component to
investing.
So to say what, I recommend?
Stock ownership for everyone.
That's a bit of an absolutestatement.
I would say there is certainlylong-term benefit.
(18:30):
If you are a long-term investorand I'll say more than 10 years
, then yes, I think stockownership could certainly
benefit you.
But I also do know other peoplethat frankly just don't trust
stocks.
They're very familiar with realestate.
It's a business they've been inand they feel more comfortable
investing their assets in that.
And I know people who own anumber of properties and that
(18:52):
rental income is their source ofincome in retirement.
So there is ways of doing itwithout investing in stocks.
But when we were talking aboutrisk earlier, there's a lot of
risk with owning real estate andthey're also not liquid.
So that is something aboutgenerally stocks and bonds.
For the most part, you can buyand sell them and get out of
them pretty quickly if you needto.
Todd Carswell (19:13):
Yeah, and for the listeners?
What does liquid mean for anasset?
Chris Wilkens (19:16):
Oh, you can turn it into cash, you can sell it.
Todd Carswell (19:18):
Right Now there are also funds that you can
invest in, like REIT investmentsor something like that, that
get you into real estate ifmaybe you don't have money to
buy a house or a rental property.
Chris Wilkens (19:29):
Correct, they're pooled real estate investments,
got it.
And a REIT.
It's a real estate investmenttrust REIT.
Okay, so when you said stockownership, you can buy an
individual stock, but that is abit of a concentrated risk.
So If you want to buy a morediversified portfolio without
buying all the individual stocksyourself, there's ETFs
(19:53):
exchange-traded funds andthey're passively managed.
They're low-cost Vanguard,they're not endorsing me,
they're just very well-known andthey have low-cost ETFs and
they just track and index.
And then you have mutual funds,which are also.
They have anywhere from 50 to100 holdings in that mutual fund
(20:14):
and they are going to activelymanage that portfolio and a
portfolio manager is doing thatand there's some fees associated
with that.
So you could buy an individualstock or stocks yourself, but
that's going to be veryconcentrated, or you could do it
with an ETF that's going to bemore concentrated, or you could
do it with an ETF that's goingto be more diversified among
more stock positions.
(20:35):
And then there's more of amutual fund where you have a
portfolio manager activelymanaging, buying and selling
those stocks for you.
Todd Carswell (20:43):
So related question do you typically
recommend that investors try topick individual stocks?
Chris Wilkens (20:48):
that investors try to pick individual stocks.
No, I have asset managers thatdo that For what I do.
To use a baseball analogy, sothe client say they're the owner
of the baseball team, theywould hire me as the manager of
the baseball team and the assetmanagers are the players on the
(21:09):
field.
So I'll have bonds managed bythis manager.
I'll have maybe this portion ofstocks by this manager, this
portion by this.
I'll have these couple privateequity investments and I'm
managing the managers and I'mmaking sure they're fulfilling
their particular slice of theportfolio, as they should be,
and diversifying the risk acrossthose asset classes.
Todd Carswell (21:28):
Got it.
Yeah, true story.
When I was down at 1-6 at CampLejeune every morning, my gunny
I was in 81 Splatoon, so ourplatoon sergeant was a gunny he
would come in every morning.
He'd pull out the newspaper andhe would look at penny stocks
and he would get on the phoneand call a stockbroker and buy
penny stocks and sell them whenthey doubled.
That took time, though, and youhad no idea that was guesswork.
(21:50):
He was kind of like okay, youcan't research these companies
back in the day because wedidn't have the internet, but he
would just kind of look at thestock ticker and go, hmm, okay,
it's like wetting your fingerand putting it in the air and
going, yeah, I'm going to investin this stock, but he was
making money over time For me.
I'm just like I don't have timeto pick stocks.
When I try to pick stocks, Iusually don't pick.
Chris Wilkens (22:12):
Well, yeah, I think what I do is investing.
I think that's more gambling inthe stock market.
But it's not uncommon though,because, frankly, trading stocks
and buying things is enjoyableand fun.
So it's not uncommon for aclient where I'm managing a
significant portion of theirportfolio.
(22:32):
But they may have a portion ofit, often in a self-directed
account, and they're like youknow, I wear a lot of Under
Armour clothes all the time.
I'm not endorsing it.
This isn't a recommendation,just saying it's a conversation
I have with someone, and theyjust wanted to buy shares of
Under Armour because they'realways wearing Under Armour
clothes.
So they kind of felt likethey're buying into it, Like
(22:55):
they're benefiting from thempurchasing the clothes, even
though they're probably not.
You know there's an emotionalaspect of investing it is your
money and you want to kind ofbelieve in it.
So it is fun to do, but no, Iwouldn't consider that investing
.
James Robinson (23:11):
So why is it important to start saving and
investing now, even if we'rebehind?
Chris Wilkens (23:18):
Todd had mentioned earlier, just compound
interest over time and a quicklittle calculation, like a back
of the envelope calculation, tohelp you plan how long it takes
you to double your money.
So if you divide into thenumber 72, that's how long it
takes you to double your moneywith the rate of return.
(23:39):
So if you get an annualizedrate of return of 7.2%, you'll
double your money in 10 years.
If you annualized rate of 10%,you double your money in 7.2
years.
Todd Carswell (23:52):
What I like to do is calculations and go what if,
and then over time I can seehow much money I put in versus
how much compound interest overthat time period has earned.
For me it's free money I'm nothaving to do anything to get
that, so I love that.
Chris Wilkens (24:07):
It's funny you said what if?
Because, for all the listeners,I had to get these questions
approved by my compliancedepartment and one of the things
they had mentioned was focus onour retirement plan, which I
use quite often.
It's a very helpful tool, notjust for me, but for my clients
as well.
But one of the functions of theretirement plan is they have
(24:29):
the what-if worksheet and youcould put in all these different
factors and change the rates ofreturn.
And again you're talking tosomeone who has a client, maybe
has a couple of girls andthey're like 10 and 12 years old
, and he's like, yeah, plan$50,000 in 2040 and $50,000 in
(24:50):
2042 for weddings.
He's like, okay, what if?
Make it $100,000 for eachwedding.
It's kind of some fun thingsyou can play with.
So, yeah, there is a what-ifworksheet in our retirement plan
that are all kind of becausethere's a lot of factors that go
into it.
So that is one thing we do tohelp people plan.
Todd Carswell (25:09):
Yeah, you guys have a lot of cool tools.
My stuff is just rudimentarystuff that I find online
Investorgov.
They've got a compound interestcalculator, but yeah, you guys
have a lot of tools to plan forthose unexpected or even
expected expenses.
So that's cool.
Chris Wilkens (25:23):
I like that.
I think we should have a morepersonal conversation about this
when this podcast is over.
Todd Carswell (25:27):
about your personal finances I love it, man
Moving on, yeah, so let's gointo wealth strategies Now.
How do you advise people onprotecting their assets from
unexpected events such as jobloss or illness, or even market
crashes?
Chris Wilkens (25:45):
Having a rainy day fund or some cash that you
can quickly access for thosetypes of things.
That is, I'd say, is absolutelynecessary to have before
investing in the stock market.
I'd say six months of cash isprobably a good baseline to have
before investing assets intotrue investments, because with
(26:07):
an investment you don't want tobe day trading it, you don't
want to.
If this is money you need for adown payment on a house in six
months, that's not somethingyou're going to want to invest
in the stock market, becausethere's a lot of people in the
world they're getting paid a lotof money to figure out how the
S&P 500 is going to opentomorrow morning and not one of
(26:28):
them has an idea.
Right, because there's so manyfactors outside of your control.
Well, the stock market I thinkwhat's great about it is that
the stock market is.
It's where all thesedecentralized sensors are that
show you what's going on on theground, whether it's the price
of oil, whether it's an interestrate, whether it's the value of
(26:49):
a company.
And my point is there's so manythings changing it would be
impossible to factor, becauseonce one of them changes, it
starts to change everything else.
It's kind of a chain reactionof things that are always
happening.
So yeah, if you were to say Ineed this whatever amount of
money for a down payment in sixmonths, you certainly don't want
to put that in the stock marketbecause you're going to be
(27:09):
looking at it every day.
I think maybe a high yieldsavings account under the FDIC
limits might be a better optionfor you.
From a risk reward standpoint,that would be a better option.
Todd Carswell (27:21):
Yeah, I mean for my family members that are
concerned about putting moneyinto 401ks or whatever for
retirement.
They're worried that it's goingto crash.
And I always point out that theS&P 500 index, that's the
benchmark for the marketperformance.
It's the top 500 companies andcorrect me on this, chris but
it's the top 500 companies inthe market today, right?
(27:41):
Is that the S&P 500?
Chris Wilkens (27:43):
Yeah, the top 500 publicly traded companies,
largest by market capitalization, which means value of the
shares and how many shares theyhave outstanding.
Todd Carswell (27:53):
Yeah.
So I like to point out thatthat index started in 1928.
Since 1928, that index hasgenerated an annual return of
8.6% over time.
Now we can't say it's going tocontinue doing that, but it has
generated that interest rateover time.
And that includes the GreatDepression.
It includes these big crashesthat we've had, like in the
(28:15):
1980s what was it?
Black Monday 1987 or somethinglike that.
But you can look back on thesegraphs and you can see years
it's up, years it's down.
And I look at it and I go, okay, the most it's ever gone down
in a bad year was like 30% orsomething like that.
That's a lot of money.
But if you just leave yourmoney in the market over time
(28:38):
it's going to come back up.
And if you're in an ETF orwhatever for the S&P 500, if a
company goes out of business,they're no longer in the S&P 500
.
Your money gets reinvested intothe next one that comes in.
I like that.
But there were years when themarket dropped 30%.
But overall they've seen 8.6%per year returns and you're
doubling your money in less than10 years with that markup.
Chris Wilkens (29:02):
Well, an individual company can certainly
go to zero, so that issomething to be mindful of,
which is why you don't want tohave all your proverbial eggs in
one basket, whereas if you aremore diversified in an index
fund, an index, an ETF or amutual fund, the probability of
(29:22):
all those companies in that fundgoing to zero is pretty
unlikely.
Todd Carswell (29:28):
Yeah, dude, this is a sad tale.
I knew this guy.
He was in his 50s at the timeand he put all of his 401k into
the company stock the companythat we worked for.
Every penny of it into thatcompany we worked for it went to
a penny stock.
The dude lost everything andI'm just like, oh, he's in his
70s now and he's still working.
(29:51):
I'm like, oh, don't puteverything in one Don't do that.
Chris Wilkens (29:56):
Unfortunately, I'm familiar with similar
stories and talk about when itcomes to managing risk as well.
If you have a significantportion of your assets in the
stock of the company that youwork at, well, if something
happens in the company, you loseyour money and you lose your
job, oh yeah, so that just seemskind of like a double whammy
that you don't want toexperience Right, don't put it
(30:18):
all in one spot.
Todd Carswell (30:19):
And I don't trust myself to pick stocks.
I'm not doing that.
James Robinson (30:23):
Yeah, so would you mind educating us just a
little bit regarding IRAs?
So what's the biggestdifference between the 401k and
the Roth IRA?
Chris Wilkens (30:34):
So an IRA, whether traditional or Roth, a
401k, a 403b, and for governmentemployees they have the TSP
Thrift Savings Plan.
Those are all forms ofretirement accounts and where
the Roth IRA is different isthat in that one the
contributions you make to theRoth IRA are after tax and then
(30:58):
they can grow tax-free.
And then when you pull themoney out of the Roth IRA when
you're retired, you don't paytaxes on it.
Then when a 401k, generallythat's pre pre-tax money and you
get the tax deductionimmediately.
So say, you make $100,000 ayear, you put $10,000 in your
401k, you get taxed on 90, andthat $10,000 can grow tax
(31:21):
deferred.
So the younger you are, thatmoney that you didn't pay taxes
on is now invested and again,compound interest really works
over time.
So if you work at a company,you have a 401k nonprofits and
teachers tend to have like 403bs.
The benefit of them is thatyou're getting the benefit of
(31:41):
not paying taxes on those assetsthat you're contributing to a
retirement plan.
You get that right away and thenthose assets grow tax deferred
and the rationale behind it isthat when you're working you're
believed to be in your highertax bracket.
And I'm up here in theNortheast, so New York, new
Jersey, generally the higher taxplaces and then when you retire
(32:04):
you move to someone with alower tax state generally
Florida or Texas or Arizona andthen when you're pulling the
money out you're at a lower taxbracket and a lower tax state
generally Florida or Texas orArizona and then when you're
pulling the money out you're ata lower tax bracket and a lower
tax state.
So for most people contributingto the 401k while you're
working, it benefits you thenand then it benefits you also
while you're retired.
(32:24):
So the Roth there are incomelimits on the Roth IRA and the
benefit of that one is do youpay the taxes up front, but do
you have enough time for it togrow compounded to where you
benefit on that tax-free growthand then take out more assets
when you're retired and not havea tax then?
James Robinson (32:46):
So do you recommend one over the other?
Is there a blanketrecommendation?
So do you recommend one overthe other?
Is there a blanket?
Chris Wilkens (32:49):
recommendation For most people that are
employed at companies.
If you can afford to,maximizing your 401k
contribution every year is agood start and then with the
Roth, you'll know if it was agood answer when you passed away
, when you're 90, if you had thetime, if you have time, to see
what the performance was, whatthe rate of return was and
(33:11):
everything.
So, because there is an incomelimit on the Roth IRA, most
people don't directly contributeto it.
But what some people or clientshave said to me is does it make
sense to do the Roth conversion?
And again, this is going to bea little more complex and not
apply to everyone.
This is going to apply to yourmore wealthier listener base.
(33:33):
But I recently had a client whoshe has multiple board seats and
she's going to be sitting onthis board for quite a while and
she's going to be gettingincome and then she has, like
these deferred shares that she'sgoing to get.
So when we significantly lateron, probably into even her 80s,
so we were looking at herretirement plan and looking at
(33:53):
what her withdrawals were goingto be and due to all the income
she was going to be receiving,and then on top of that, at age
73, she has to start takingwithdrawals from her IRA.
So these forced withdrawals inabout 10 or 12 years are now
going to be forcing her to pullmoney out and it's going to be
at a very high tax rate.
So they were asking me to dothe analysis.
(34:15):
Does it make sense for us tostart paying the taxes now and
converting and doing the RothIRA conversion on these
retirement assets?
That way, in 15 years I'm notforced to take out more money
and I have to pay more in taxes.
So that's some of the things Ido with the clients to see if
the Roth IRA conversion makessense.
(34:37):
Generally speaking.
Even if it does make financialsense, most people don't want to
do it Because to do a Roth IRAconversion with your retirement
assets, you have to pay thetaxes right away and you have to
write that check today, hopingyou benefit from it in 20 years.
And a lot of people don'tnecessarily want to do that
(34:57):
Right, but if they want thatanalysis done, I can do it for
them, does that?
Todd Carswell (35:01):
lady need a pool boy.
That's what I'm going to do.
I'll talk to you after the.
We'll talk later.
I'm kidding, I'm married, allgood, it's just kidding so, but
yeah, so just a side note.
What I like is that you're notformulaic in this.
You're not saying cause, if yougo to YouTube and this is I
(35:22):
warn people don't go to YouTubeto get financial advice, because
you're going to get randos outthere who really don't know what
they're talking about.
They're just doing internetsearches and they're going to
come out and say you mustconvert your 401k to Roth and
all this stuff.
Talk to a professional, don'tgo to the YouTubes to get your
financial advice, all right.
(35:45):
So next question For those whoyou mentioned wealth plan, as
when you're talking abouthelping people getting their
finances in place, but forpeople with a wealth plan, how
do they determine if they're ontrack to meet retirement or
other, whatever their long-termfinancial goals are?
Chris Wilkens (36:02):
When we do a plan , we do update it every year.
So let's just use the example,like I said someone who is 50
years old and want to retire at60.
It let's just use the example,like I said someone who is 50
years old and want to retire at60.
It's going to forecast, say,you're going to save whatever
$50,000 a year after tax, andyou were going to invest in this
and, based off your risktolerance, you're going to have
(36:23):
a moderately aggressiveportfolio.
So we're going to plan on a sixor half percent return
annualized.
So by the time you're 60, youshould have this amount Right,
something along those lines.
Well, each year we're going togo through that and says you
know, you said you were going tosave 50,000 this year.
You didn't.
Or we were planning for a 6%return.
The market actually returned 20.
(36:43):
Or you saved more and themarket did have a.
The market had a bad year, soyou had this amount of money.
Now you have less.
So the future is always kind ofthis dark path and when you do
the retirement plan, it doeskind of light the way a little
bit.
And as we're getting closer toretirement, so say, right now
it's 2025 and you're going toretire in 2035.
What the plan says about theyear 2035 is a bunch of
(37:06):
guesswork and assumptions, andthen, as we get closer to 2035,
it becomes more accurate.
So we really just kind ofmaintain it and it's the basis
for what the investments are,how they're doing.
Do we need to make changes?
Is there something we shouldadd?
Retirement plan is thefoundation and the house is the
investments.
Perfect.
James Robinson (37:28):
So I'm curious, given that, what are the common
misconceptions you've heard fromfolks about income sources in
retirement?
Okay, how do you educate folksabout that?
Chris Wilkens (37:38):
So similar to having a diversified stock
portfolio.
When it comes to retirement,you want to have your retirement
income come from diversifiedsources as well.
You won't want to buy, like,just one or two bonds and just
collect the interest from them.
You don't just want to buy adividend paying stock and rely
on just the dividends from them.
So it is diversifying thesources of income that you are
(38:02):
getting in retirement.
And one thing to that there'salso understanding the risks
associated with each type ofinvestment.
So, Todd, you had mentioned how, when you may go to YouTube and
someone says you should do thisbecause you'll get this
guaranteed rate of return,Sometimes there's a product that
(38:23):
can give you a guaranteed rateof return but you kind of give
up your access to the money andyou give it to an insurance
company, Whereas you'll get thatconsistent income until the day
you pass.
But if you get into, have atragedy happen in a year from
now, that money's gone In somecases, right, there's annuities
(38:43):
and there's insurance andthere's stipulations with each
contract.
But also, if you own, maybe, acertain private equity
investment that's paying thisenhanced return, then maybe
that's paying more than thetraditional bond market might
pay, but you might not haveaccess to it.
It might not be liquid.
So for some people theyinherited some money from their
(39:04):
parents who had passed and thenthey inherited all these stocks
and then it was a volatile yearin the market.
He's like I can't handle thevolatility, I want something
guaranteed.
And in this particular case hewanted the annuity.
He wanted that guaranteedincome and he was happy to let
the insurance company have it.
So in that instance he washappy with it.
(39:24):
So I would say, justunderstanding the risks
associated with different incomesources and the fact that it's
not necessarily a liquidinvestment isn't necessarily bad
.
Like a home is a goodinvestment, but a home's not a
liquid.
You can't sell it like rightnow and get cash for it.
You know it's a process.
So sometimes these otherstrategies that certain
(39:46):
investment managers might do,it's just really understanding
the risk associated with eachinvestment and having
diversified income sources.
Todd Carswell (39:55):
Now, what about?
Have you seen any dangerousretirement planning fads out
there that people need to beaware of?
Chris Wilkens (40:04):
It's not necessarily a fad, but there's a
lot of people in my industryand when it comes to an advisor,
it has to be someone you trust,like any type of trusted
advisor, whether it's anattorney, an accountant or your
doctor.
It does need to be someone youtrust.
I wouldn't say a fad, it'sreally any investment.
(40:27):
They're not good or bad, it'smore whether they're appropriate
.
Really any investment.
They're not good or bad, it'smore whether they're appropriate
.
And if you're going tointerview a financial advisor,
you should be asking a lot ofquestions and the answers should
be, in my opinion, based onyour client's situation and what
they're saying, the things thatare important to them, the
(40:47):
goals that they want toaccomplish and also sometimes
being very honest with them,because sometimes they may have
unrealistic expectations.
They want a high return butthey're not willing to accept
any risk Something along thoselines.
Todd Carswell (40:59):
Right, yeah, if you're talking to a financial
advisor and they're just saying,hey, here's what you need to do
, blah, blah, blah, they'regiving you formulas and all this
stuff and they're not talkingto you about your situation,
that's where, to me, that's ared flag.
But yeah, I like that you saythat you got to meet with the
person and see what theirsituation is and then you create
the plan.
So pay attention to that folks.
(41:19):
So what non-financial factorsplay into your approach to
financial planning?
I mean things like lifestylegoals, mental health, personal
fulfillment, things like that.
Chris Wilkens (41:35):
So how do you incorporate that into financial
planning?
It happens over the course of alot of conversations, because
all my clients who retire arewealthy enough to retire and
live the lifestyle they want.
So the money's not a factor andretirement is.
For a lot of people it's justthis abstract thing.
You know, we talk about it andit's at some point in the future
, and then that's it.
(41:56):
And then you get to a pointwhere it just hits you and it's
like, oh wow, I'm not going tomake any money anymore.
The hell, am I going to do, youknow?
And then it finally does kindof hit them.
And then I start asking thequestion, like what's your
desired retirement lifestyle?
Into days after tax dollars,and they're like I don't know.
Is my kid going to med school?
(42:17):
Am I selling the house?
Am I going to work part time?
Like what am I going to do?
Are we going to buy a beachhouse?
You know there's all thesethings that do kind of come
rushing.
And I would say a good piece ofguidance to anyone that is
retiring retirement is easier ifyou have something to retire to
(42:38):
as opposed to being you'reretiring from something.
Like if you just hate your joband I understand there's plenty
of people that don't like theirjob.
But if you just want to stopgoing to work because you hate
your job, I understand that.
But you do have to stop goingto work because you hate your
job, I understand that.
But you do have to havesomething to look forward to and
I feel like you spoke aboutthis on other episodes of your
podcast.
But it is a bit of a sense ofpurpose and meaning and
(43:01):
something that does interest you, because as much as people,
especially guys, they'll saylike I want to retire and I'm
just going to live on the golfcourse, I think that that's good
for maybe a month or two, and Ilove golfing too.
I'm not knocking the sport atall.
You spent 40 years in a careerand you established
(43:22):
relationships with them.
Maybe you went into an officeor you're interactive members of
a team and you just can't.
You can't just end that one dayand you know I'm going to tour
wineries and live on a golfcourse, like you've had this
life that you've built over overdecades and it's not just going
to change when you retire.
Now I'm not saying don't havefun plans or don't be afraid to
(43:44):
move somewhere or go on moretrips or do those things.
But my clients are fortunatelyin a position where they're able
to continue working in a mannerthat fulfills them.
And I understand you don't wantto get fulfillment from your
job.
But if you've been there for 40years and then you could still
(44:06):
do it kind of part-timeafterwards and there's younger
people who maybe appreciate yourexperience, so you're still
valued, you still feel relevantin your industry, you're still
solving problems or people arecoming to you with advice or you
get to mentor the new people,those clients who do retire and
still kind of have that.
(44:26):
They still have something to doand it could also just be
spending time with grandkids.
I mean that gives a lot ofpeople purpose too.
So back to I'll wrap it up withwhat I said earlier like having
something to retire to asopposed to retiring from
something, that's a good path tohead towards.
Todd Carswell (44:44):
Yeah, I saw a video.
It was a cardiologist.
He said I'm dealing with peoplethat living living into their
80s and 90s.
He said the people that are themost healthy, with the best
mental health, are the peoplethat continue doing some sort of
work after they've officiallyretired from their careers.
Maybe they're working a job,just something to keep their
(45:07):
minds going.
Because I mean, if you juststop working and you think
you're just going to live on thebeach and just live a life of
leisure, that's going to be deadin a few years.
Chris Wilkens (45:19):
I'll give them.
I'll give the example of myfather.
We had a tragedy in our familya bunch of years ago.
We had a couple members killedby a drunk driver and shortly
after that my father had retired.
And now my family's not wealthylike my clients are, but still,
like the whole, like I'm notgoing to work anymore, I'm going
to retire, what am I going todo?
(45:40):
And so I got him this book thatI do give to my clients when
they retire.
It's called Don't Retire Rewire.
And I know the authors it'sJerry Sedler and Rick Miners
wonderful people.
Rick actually served in the army.
He was a tanker back in the dayand he went through the book
and there's exercises and hesaid what he realized was that
(46:01):
he wanted to do something, buthe didn't want to get paid.
And yeah, my parents and otherpeople have a ton of money, but
my dad's, like I, don't want toget paid because that means they
can tell me what to do.
So he ended up doing a lot ofwork with mad mothers against
drunk driving, as well asinitiatives in my hometown,
right, and that kind of gave himhis sense of purpose.
But but no one could force himto be anywhere at at any time or
(46:24):
force him to go to a meeting.
It was just on his terms andit's something he really enjoys.
I mean, he's been doing it.
He's been doing it for over adecade now.
So yeah, so it's not like a lotof non-financial factors do play
a part in do you enjoyretirement?
Is life fulfilling?
But I will say that thefinances do help.
(46:45):
There's this comedian, AnthonyCumia, and he said it on Joe
Rogan's podcast, where he saidmoney doesn't buy happiness, but
it pays for a lot of sadness togo away.
And that is one of the mosttrue statements I've ever heard.
Todd Carswell (47:02):
Love it, you got to have money.
It costs money to live.
So, yeah, it's not a bad thingto have money either.
So, chris, do you have anytakeaways you'd like to leave
with our listeners?
Chris Wilkens (47:12):
I'm thinking of a lot of things based off the
questions you asked.
I guess for your listeners whoare considering talking to a
financial advisor, feel free tointerview a bunch of them.
And if you don't feelcomfortable with them because
for financial advisors we allrun our own book of business
under the umbrella of a largerfinancial firm.
(47:32):
So the financial advisor in theoffice next to me, I don't know
who his clients are, I don'tknow his investment philosophy,
I don't know what they do andthey don't really know mine, and
you have to trust the person.
There's a bit of a personalityfit and every advisor is going
to have a familiarity withcertain types of investments or
processes.
So, just as an example, I havea lot of clients who have
(47:56):
investment restrictions, right,Whether it's attorneys who do
merger and acquisition work,whether it's financial people.
So if they work at another bankbut they want to have their
assets with me, there's acertain process with that.
Or you deal with the big fouraccounting firm partners like EY
, Deloitte, KPMG and PriceWaterhouse.
They have restrictions basedoff the audit work they do.
(48:17):
So I have kind of aspecialization in client
reporting with outside firmsjust to simplify their
compliance reporting, becausethat could be a headache for
those types of professionals,like I said, in law, finance or
accounting.
So that's just something I'vepicked up on because I've been
doing this for 15 years.
But for anyone who is interestedin speaking with an advisor,
(48:39):
interview as many as you canuntil you feel comfortable.
If you don't feel comfortable,no need to invest.
So where can people get intouch with you?
I'm pretty easy to find.
My name is Chris Wilkins.
Last name is spelledW-I-L-K-E-N-S and it's RBC
Wealth Management.
There's an RBC page for me andthen there is a LinkedIn as well
(49:01):
.
Todd Carswell (49:02):
Yeah, I'll go ahead and put links in the
description.
But yeah, we'll get that out.
I appreciate your time, brother.
Chris Wilkens (49:07):
All right, well, I appreciate being invited back.
It's not like I go on a lot ofpodcasts.
I'm not in high demand as muchas I expected I would be.
Todd Carswell (49:16):
We get a lot of people financial advisors asking
us to be on the podcast.
We're like, no, not, everyepisode is going to be about
money, so you know.
And yeah, you know, we don'tknow them.
James Robinson (49:25):
So it's like, oh , yeah, no, we just appreciate
your time and your advice andwisdom and sharing that with us
and our listeners.
And yeah, we'll be sure and addthe link.
We'll link that book as well.
Todd Carswell (49:42):
And it'll be our Amazon affiliate link.
Oh great, yeah, affiliate link.
You don't pay any extra price.
We do get a small commission ifyou buy through that, so it's a
don't retire rewire.
I'll put a link for that.
And also, if you're looking fora financial advisor, trust is a
big thing.
So I will say that I heard ofChris before I met him in person
, and I'm friends with a Marinethat served in his platoon
(50:05):
during the Battle of Fallujah,and his troops spoke very highly
of him, so he's trustworthy.
So that's from a lot ofdifferent people.
So give Chris a shout.
He's a good dude.
But here's my takeaways.
Whatever your stage of life, nowis a great time to start saving
and investing.
You can achieve financialsuccess, and the starting point
(50:25):
it's got to be getting a handleon the spending, what's going
out the door.
And then you need to make aplan.
You need to plan to set aside apercentage of your income.
I would recommend getting witha financial advisor to make a
plan for that income that you'resetting aside and don't try to
live like other people because,honestly, if you're seeing
people that have a lot of cooltoys and stuff, they're probably
(50:47):
broke, except for that ladythat I'm going to be her pool
boy.
But all that aside, finaladvice let compound interest and
time do the work for you.
Even if you're in your 50s, youmay have to work a little bit
later in life, but you also mayhave to significantly change
your lifestyle.
And that's not necessarily abad thing, because my mom she
(51:09):
lived on just her socialsecurity.
She just downgraded herlifestyle and she got to a place
where she can live on $2,000 amonth.
She was very happy doing that.
She was very socially connectedand she's very happy.
It doesn't take money to createthat sense of fulfillment, but
you do have to have money to paythe bills.
So make a plan, change yourlifestyle, set aside money, get
(51:31):
with a financial advisor to helpyou put things together for
retirement so anything else,james.
James Robinson (51:37):
I strongly encourage you to talk to a
financial advisor.
Todd Carswell (51:40):
Yeah, thanks again, chris, and we will sign
off there.
Thanks guys, take care Chris.
This is the Cluttered Path, a compass for
midlife.
Do you ever feel like yourfinancial dreams are too far out
of reach?
What if the secret to achievingthem isn't about working harder
or sacrificing more?
(00:20):
Here's the thing Establishingsimple and achievable goals
today could be your ticket to afuture life you never thought
possible.
Today, James and I are talkingto Chris Wilkins, Vice President
and Financial Advisor at RBCWealth Management.
Chris Wilkens (00:33):
Chris, welcome to the show.
Thank you for having me Forfolks on video.
Todd Carswell (00:38):
You're going to see a brief disclosure here
Before we start the interview.
Rbc Wealth Management.
They don't provide tax or legaladvice.
Please consult your tax orlegal professional.
So, chris, let's start with abrief bio.
He grew up in Yonkers, new York.
He joined the Marine Corpsafter 9-11.
He trained as an infantryofficer and then Chris would go
on to command 3rd Platoon ofBravo Company, 1st Battalion,
(01:01):
8th Marines, in the SecondBattle of Fallujah.
After the military, christrained to become a financial
advisor and he's also heavilyinvolved in the veteran
community.
So, chris, would you want toshare some information on the
veterans organizations thatyou're working with?
Chris Wilkens (01:14):
Sure, there's a lot of them, and each one of
them focuses on a different areaof benefiting veterans.
So the ones I am primarilyinvolved with are in the New
York City area and within NewYork City.
I'm very involved with myAmerican Legion post, and the
reason I mentioned that one isbecause we are kind of like a
(01:35):
resource to a lot of differentnonprofits within New York City,
and not just nonprofits butalso affinity groups, commonly
called employee resource groups.
So at RBC we do have anemployee resource group for
veterans very common at otherbanks and organizations as well
and then you also have asignificant number of veterans
(01:57):
in the five boroughs of New YorkCity that are currently
students.
So these numbers are ballparkbut they're pretty close.
Throughout the past 15 yearsthere's been 12,000 veterans in
New York City schools withinColumbia, fordham, nyu, john Jay
Lehman, the City University inNew York, the CUNY system, and
(02:18):
so you have a lot of veteransthat are attracted to New York.
And then you have a lot ofcompanies that are looking to
hire veterans as well becausethey do value their unique
experience, and so we try and belike the glue that connects the
transitioning veterans that arein school with the
organizations that are lookingto hire veterans, and that being
(02:39):
just one example, because Ithink the area where I'm most
involved is helping thattransitioning veteran into a
career, because it's not oneconversation, it's a process
over many years, because youdon't really know what you're
good at.
So you have to kind of dip yourtoes in the water and find out
I got an internship for and I'mworking in, accounting.
(03:01):
You know some people mightreally like it, some people
might not, and then when you doit you kind of fine tune what
might be a more appropriate fitfor you.
So there's a lot of nonprofitsthat help veterans with that
transition from military serviceinto either college and or then
a career afterwards.
But then there's a lot of otherones that help veterans who
(03:22):
might be coming when they endactive duty.
Maybe they're overseas,somewhere in Japan or Germany
and they have a spouse that isnot a citizen and now they're
going to come back here, andthey had kids overseas, now they
got to bring them here.
So you're moving a family herethat needs some help with the
documentation and finding aplace to live and college and
(03:42):
job, and so there's a lot ofnonprofits out there doing a lot
of good things, but I'd say theones I primarily focus on would
be helping veterans with thattransition into the private
sector, because it's something Idid and also there were other
veterans that helped me with mytransition out of the Marine
Corps.
Todd Carswell (03:58):
16 years ago.
Thanks for doing that, man,because veterans need that help.
Man.
I remember a lot of times I sawa lot of guys that couldn't get
out.
They wanted to get out but theycouldn't because they didn't
have anything on the outsidewaiting or no one to help them.
So I mean not that they were inprison or anything, but you
know how it goes.
Chris Wilkens (04:16):
Well, it's whatever you're going to do in
life, whatever the endeavor isgoing to be, if you could talk
to someone who was in yourposition a couple of years prior
to kind of help you get startedor give a little guidance,
that's really what most peopleneed.
So I think you had said whenyou were in college was it a
former SEAL or a former Navy guylike, saw you a Marine, just
(04:36):
kind of pulled you aside andthat kind of helped you, kind of
lead your.
You ended up where you aretoday because of it.
Todd Carswell (04:41):
So yeah, Name is Bill Wiseman.
He was a SEAL team commanderand went to grad school at NC
State.
Dude hooked me up, man Justpointed me in the right
direction.
I was like, oh okay, that's howI met James.
And here we are.
So yeah, but side note, we justtook vacation in New York City.
I've been to New York City a lot.
(05:02):
I've never driven there.
So we drove up though, wentthrough the Lincoln tunnel,
stayed in Midtown East.
I've never driven to New York.
Oh, I'm cruising around.
It wasn't bad, but I'm cruisingand everybody's honking, you
know.
So that's a, it's new to me andI'm like cool, everyone's
honking.
So there was this dude.
Literally the light turns greenand this dude Jays in front of
(05:22):
us, he runs across andflip-flops and he looks like the
dude Dominic West, hischaracter in the movie 300.
He was the evil senator,anyways.
He comes flip-flopping acrossthe street and everybody's
honking, and so I was like Ijust laid on the horn, I just it
was a bit much.
And the guy looks over at meand he starts, starts yelling
(05:44):
all these obscenities and stuff,but then he sees my face and
I'm just like you know anyway.
So he was like he probably sawthe plates and we're like this
guy's from North Carolinafreaking bumpkin.
Anyways, that was my foray intodriving in New York, but we'll
go and get started in thequestions here.
In a previous episode, jamesand I talked about the
(06:04):
retirement crisis in America.
Now we've got way too manypeople hitting the retirement
age without sufficient funds toquit working.
So what recommendations do youhave for people in that
situation?
Chris Wilkens (06:15):
Yeah, that's an accurate statement.
Even according to the FederalReserve, in 2022, half of
American households had nosavings in their retirement
accounts, and the unfortunatereality is that, if you do not
have the funds to retire in thelifestyle you want, you really
only have two options, and thatis adjust your lifestyle or keep
(06:37):
working.
That's an unfortunate positionto be in when you're at an age
where you'd really like to stopworking.
I think some of the thingswe're going to talk about today
I'm going to come back to it iswhat we do is retirement
planning, and a lot of thethings we're going to discuss
today are going to go back tothat.
And ideally, if you are withinI'd say, within 10 years of
(07:01):
retirement, a retirement plan isan excellent tool.
It's a tool, but it's also likean exercise to go through,
because basically what it doesis you say here are the current
asset levels that I have If Icontinue to save at this level,
given this rate of return, and Iretire at this age with this
(07:21):
retirement lifestyle, like adollar amount, just say, 10
grand a month after tax, andthen you have to take into
account taxes and inflation,because 15 years later, say you
want to retire this year andyou're like I want to live, my
wife and I are going to live off10 grand a month after tax.
That covers our bills.
Well, 10 years from now that'sgoing to need $12,500 a month.
(07:45):
That's 10 years of 2.5%inflation.
It's actually more than thatcompounded.
So someone wants to retire at60, and they're like okay, I
have the assets to retire nowand I can live this lifestyle.
Well, in 10, 15, 20 years,everything's going to cost more
and you're going to need moremoney and you're retiring on a
portfolio at the same size.
So that's why the retirementplan is good, so you can kind of
(08:06):
forecast if you can afford tolive that lifestyle.
So, to bring it back to what Isaid earlier, if you can do that
about 10 years before you hangup the cleats, as they say, you
know, say you're 50 years oldand you want to retire at 60,
it's a good thing to do, becausethen you could say, oh well, I
don't have those assets to livethat lifestyle that I want.
(08:27):
If I saved an extra five grand amonth for the next several
years and then, a couple ofyears, an extra 10 grand a month
, could I actually live thelifestyle I wanted.
So going back to, if you do theretirement plan, maybe 10 years
before you retire, you havetime to make adjustments so that
when you get to retirement it'snot a surprise where you and
(08:49):
your spouse or whoever you areplanning to live a lifestyle and
then the day you retire if youhaven't planned for it, then you
find out you can't live thatlifestyle.
I mean, it's hard for anyone totake a step back in your
standard of living, especiallythe older you get and now I'm in
my mid-40s and it's hard for meto take a step back in your
standard of living, especiallythe older you get.
And now I'm in my mid-40s andit's hard for me to take a step
back in my retirement lifestyle.
(09:11):
So yeah, I hope that answersyour question.
Todd Carswell (09:15):
Yeah, I mean, I'm a proponent of radical
lifestyle change.
When you're young, Don't getinto that expensive lifestyle
and just keep saving money.
But when you get older, you'reright, changing lifestyle.
That's a hard thing.
I saw a video where this ladyshe was 60 years old and she sat
there talking about how shecan't afford anything.
She's living in someone else'shouse, she's renting a room in
(09:37):
someone's house, and then she'stalking about all this stuff and
then she finally goes yeah, andso my horse she's got a horse
and I'm like what?
Those things are expensive.
What are you doing?
You got to get rid of yourhorse.
Radical lifestyle change.
But you know I have a pet soit's hard to get rid of.
But, yeah, radical lifestylechange and then reducing
(09:58):
expenses however you can man.
That's my, that's what I wouldsay.
So you know.
Chris Wilkens (10:03):
I will just add a point to that being in wealth
management.
I will say my clients.
Generally they have thefinances to retire in the
lifestyle they want.
I don't have any celebritiesthat live, you know, extravagant
lifestyles.
But what?
Even they tell me the ones thathave been retired for a while
now they're like, even if youhave the assets to retire,
(10:26):
spending is different whenyou're retired because that
money's not being replaced, soany big purchase, it's more.
You think about spending a lotmore when you're retired, even
if you have the assets.
James Robinson (10:40):
Yes, that kind of leads.
My question would be so whatare the common mistakes you see
people making when they're doingtheir planning for retirement?
Chris Wilkens (10:47):
Say a couple things.
I guess it's just not beingrealistic about their spending
or about their savings.
As we all know, money is easyto spend.
It is easy to find things tospend on.
So when one of the moreimportant questions I asked my
so the retirement planning, it'sa questionnaire and it's quite
(11:09):
long, but there's one incrediblyimportant question on there
that kind of determineseverything else and that is what
what is your desired retirementlifestyle in today's after-tax
dollars?
And that takes a while toanswer that question and
normally it's a married couple.
You know that.
I've discussed that with myspouse, because when people
retire and again I'm basing thisoff the age 60, because that's
(11:35):
kind of a ballpark year whenpeople start to retire and a lot
of things change for a lot ofpeople around that time.
The kids can be going off tocollege and you have some few
years of big expenditures ortheir kids are about to get off
the payroll.
Sometimes you're going todownsize because the kids are
off the payroll and you have abig house and now you want to do
that.
Sometimes the mortgage is paidoff, sometimes you upgrade a few
(11:57):
years ago to a much biggerhouse and you really have to
keep the income going, and it'snot uncommon for people to do
some type of part-time work,gradually go into retirement
that as well.
So back to what you said.
What are common mistakes?
If I ask someone what's theirdesired retirement lifestyle and
they respond back with a quickanswer, it kind of implies that
(12:19):
they haven't really thoughtabout that question.
And the reason being is peopleare scared sometimes.
I mean, when you're in your midto late 50s, especially if you
have a job that's physicallydemanding and you're like man,
it's just my back is starting tohurt getting up early and I'm
on my feet all day and you'relike I just don't want to work
anymore.
And then you just start lookingand you're not being honest
(12:43):
with yourself.
I would say yeah, that's good.
Todd Carswell (12:46):
I've got family members who delved into
retirement like putting moneyinto a 401k without knowing much
about compound interest andstuff like that, and so they
just put money into a 401k notthat much money and then the
market would have a downturn andthey would get scared and just
pull it all out, pay thepenalties and all that stuff and
(13:07):
it was like, hmm, okay, that'sone of the mistakes I see a lot
is people don't understand howcompound interest over time
works and they'll go, ah, themarket's going down, and pull
everything out and they're likeI don't want my money in there,
the stock market is risky.
And you have politicians comeout, oh, the stock market is
risky.
And it's like, yeah, there isrisk, but it's a manageable risk
(13:30):
.
Anyways, that's just my input.
But moving away from theretirement crisis, what is your
investment philosophy?
Let's see.
Chris Wilkens (13:39):
Investment philosophy is that the things
that matter the most are theclient's goals and their risk
tolerance, and so I don't thinkany particular investment is bad
or good, it's more of whetherit's appropriate.
So, just as an example, if youhave a couple, say, in their
mid-60s and they're well to doand they're well off and they're
(14:03):
retired and they're relying ontheir portfolio for income,
their portfolio that's requiredfor retirement is not going to
have a lot of risk to it becausethey're interested in cow
preservation and income.
But then if they have agrandchild and they want to
invest some money in a collegefund for that grandchild, that
money is not going to be spentfor at least 18 years.
So it would be more appropriateto have an aggressive portfolio
(14:27):
for that money, right?
So the goals of what the moneyis for and the client's risk
tolerance is that's going todetermine whether an investment
is appropriate or not.
And there's an aspect of thiswhere some people just don't
like certain types ofinvestments because of something
they heard and like you I justkind of alluded to.
(14:50):
There's risk with everything.
So even if you don't want toinvest your money and you want
to sit in cash, if you do thatover a long time, the value of
your cash will drop due toinflation.
So even if you take no risk,there's a risk in that as well.
Todd Carswell (15:07):
Oh, that's yeah, that's right.
If you don't do anything,you're just hoarding cash.
It loses value.
Wow, yeah, Good point man.
James Robinson (15:14):
So would you say , would you recommend like stock
ownership for everyone?
Chris Wilkens (15:19):
Stocks, yes, but let me elaborate.
So, when you're looking at thetwo kind of most common types of
investment that people arefamiliar with is there's stocks
and there's bonds, and so stocksare relatively simple to
understand.
Stock is equity, it meansownership.
So say, a company has a millionshares outstanding and if you
(15:40):
own one share of that company,you are one millionth owner of
that company.
And if there's higher demandfor that stock, you are one
millionth owner of that company.
And if there's higher demandfor that stock, the value of the
stock is going to go up.
And if there's lower demand, ormore people selling than buying
, the value of the stock goesdown.
So over time, generally, thelonger you hold a stock, the
less risky it becomes, and thelonger you own a bond, the more
(16:04):
risky it becomes.
That's not my thoughts, that'sWarren Buffett's and I think
he's accurate.
And then, when it comes to abond, the unofficial comparison
is that's an IOU, it's you'reloaning someone money for a
certain period of time andthere's a set interest rate and
you will receive that interestin payments as long as that
(16:24):
money is lent out and whateverthe term of the bond whether
it's a two-year bond, afive-year bond or a 10-year bond
.
When that matures, you get thatmoney back.
So if you are a young personand in the example you just gave
, which was a 401k, so a 401k isa type of retirement plan that
(16:44):
you cannot pull the money out ofuntil you're 59 and a half
without taking a penalty inaddition to paying the taxes.
So if you are a younger personand you're investing in a 401k
or some type of retirementaccount, those assets have a
30-year time horizon and therewill absolutely be some downturn
(17:05):
in the market and whenever I'mtalking to clients that may have
not invested in stocks before,you do have to manage that
expectation.
The market does have some verygood years.
It also has some very bad years.
However, I think a good strategyfor investing in the equity
markets and a lot of people dothis in their 401k plan is a
(17:27):
strategy called dollar costaveraging.
So let's just say,hypothetically, you wanted to
say, put $12,000 a year intoyour 401k plan and you put in
$1,000 a month for each month ofthe year, as the stock market
over the long term has generallygone up.
It's going to go up, but it'sgoing to be volatile along the
(17:48):
way.
So if you're putting in thesame amount every month when the
market's down, you're buyingmore shares when they're less
expensive.
And if the market continues togo up, but you're putting in the
same amount, you're buying lessshares when they're more
expensive.
So it's the time horizon andthe goals.
And if someone is investingknowing that the market might go
(18:10):
down, as long as they're kindof prepared for that and they
better understand it, that overthe long term they will
significantly benefit.
But yeah, there is certainly apsychological component to
investing.
So to say what, I recommend?
Stock ownership for everyone.
That's a bit of an absolutestatement.
I would say there is certainlylong-term benefit.
(18:30):
If you are a long-term investorand I'll say more than 10 years
, then yes, I think stockownership could certainly
benefit you.
But I also do know other peoplethat frankly just don't trust
stocks.
They're very familiar with realestate.
It's a business they've been inand they feel more comfortable
investing their assets in that.
And I know people who own anumber of properties and that
(18:52):
rental income is their source ofincome in retirement.
So there is ways of doing itwithout investing in stocks.
But when we were talking aboutrisk earlier, there's a lot of
risk with owning real estate andthey're also not liquid.
So that is something aboutgenerally stocks and bonds.
For the most part, you can buyand sell them and get out of
them pretty quickly if you needto.
Todd Carswell (19:13):
Yeah, and for the listeners?
What does liquid mean for anasset?
Chris Wilkens (19:16):
Oh, you can turn it into cash, you can sell it.
Todd Carswell (19:18):
Right Now there are also funds that you can
invest in, like REIT investmentsor something like that, that
get you into real estate ifmaybe you don't have money to
buy a house or a rental property.
Chris Wilkens (19:29):
Correct, they're pooled real estate investments,
got it.
And a REIT.
It's a real estate investmenttrust REIT.
Okay, so when you said stockownership, you can buy an
individual stock, but that is abit of a concentrated risk.
So If you want to buy a morediversified portfolio without
buying all the individual stocksyourself, there's ETFs
(19:53):
exchange-traded funds andthey're passively managed.
They're low-cost Vanguard,they're not endorsing me,
they're just very well-known andthey have low-cost ETFs and
they just track and index.
And then you have mutual funds,which are also.
They have anywhere from 50 to100 holdings in that mutual fund
(20:14):
and they are going to activelymanage that portfolio and a
portfolio manager is doing thatand there's some fees associated
with that.
So you could buy an individualstock or stocks yourself, but
that's going to be veryconcentrated, or you could do it
with an ETF that's going to bemore concentrated, or you could
do it with an ETF that's goingto be more diversified among
more stock positions.
(20:35):
And then there's more of amutual fund where you have a
portfolio manager activelymanaging, buying and selling
those stocks for you.
Todd Carswell (20:43):
So related question do you typically
recommend that investors try topick individual stocks?
Chris Wilkens (20:48):
that investors try to pick individual stocks.
No, I have asset managers thatdo that For what I do.
To use a baseball analogy, sothe client say they're the owner
of the baseball team, theywould hire me as the manager of
the baseball team and the assetmanagers are the players on the
(21:09):
field.
So I'll have bonds managed bythis manager.
I'll have maybe this portion ofstocks by this manager, this
portion by this.
I'll have these couple privateequity investments and I'm
managing the managers and I'mmaking sure they're fulfilling
their particular slice of theportfolio, as they should be,
and diversifying the risk acrossthose asset classes.
Todd Carswell (21:28):
Got it.
Yeah, true story.
When I was down at 1-6 at CampLejeune every morning, my gunny
I was in 81 Splatoon, so ourplatoon sergeant was a gunny he
would come in every morning.
He'd pull out the newspaper andhe would look at penny stocks
and he would get on the phoneand call a stockbroker and buy
penny stocks and sell them whenthey doubled.
That took time, though, and youhad no idea that was guesswork.
(21:50):
He was kind of like okay, youcan't research these companies
back in the day because wedidn't have the internet, but he
would just kind of look at thestock ticker and go, hmm, okay,
it's like wetting your fingerand putting it in the air and
going, yeah, I'm going to investin this stock, but he was
making money over time For me.
I'm just like I don't have timeto pick stocks.
When I try to pick stocks, Iusually don't pick.
Chris Wilkens (22:12):
Well, yeah, I think what I do is investing.
I think that's more gambling inthe stock market.
But it's not uncommon though,because, frankly, trading stocks
and buying things is enjoyableand fun.
So it's not uncommon for aclient where I'm managing a
significant portion of theirportfolio.
(22:32):
But they may have a portion ofit, often in a self-directed
account, and they're like youknow, I wear a lot of Under
Armour clothes all the time.
I'm not endorsing it.
This isn't a recommendation,just saying it's a conversation
I have with someone, and theyjust wanted to buy shares of
Under Armour because they'realways wearing Under Armour
clothes.
So they kind of felt likethey're buying into it, Like
(22:55):
they're benefiting from thempurchasing the clothes, even
though they're probably not.
You know there's an emotionalaspect of investing it is your
money and you want to kind ofbelieve in it.
So it is fun to do, but no, Iwouldn't consider that investing
.
James Robinson (23:11):
So why is it important to start saving and
investing now, even if we'rebehind?
Chris Wilkens (23:18):
Todd had mentioned earlier, just compound
interest over time and a quicklittle calculation, like a back
of the envelope calculation, tohelp you plan how long it takes
you to double your money.
So if you divide into thenumber 72, that's how long it
takes you to double your moneywith the rate of return.
(23:39):
So if you get an annualizedrate of return of 7.2%, you'll
double your money in 10 years.
If you annualized rate of 10%,you double your money in 7.2
years.
Todd Carswell (23:52):
What I like to do is calculations and go what if,
and then over time I can seehow much money I put in versus
how much compound interest overthat time period has earned.
For me it's free money I'm nothaving to do anything to get
that, so I love that.
Chris Wilkens (24:07):
It's funny you said what if?
Because, for all the listeners,I had to get these questions
approved by my compliancedepartment and one of the things
they had mentioned was focus onour retirement plan, which I
use quite often.
It's a very helpful tool, notjust for me, but for my clients
as well.
But one of the functions of theretirement plan is they have
(24:29):
the what-if worksheet and youcould put in all these different
factors and change the rates ofreturn.
And again you're talking tosomeone who has a client, maybe
has a couple of girls andthey're like 10 and 12 years old
, and he's like, yeah, plan$50,000 in 2040 and $50,000 in
(24:50):
2042 for weddings.
He's like, okay, what if?
Make it $100,000 for eachwedding.
It's kind of some fun thingsyou can play with.
So, yeah, there is a what-ifworksheet in our retirement plan
that are all kind of becausethere's a lot of factors that go
into it.
So that is one thing we do tohelp people plan.
Todd Carswell (25:09):
Yeah, you guys have a lot of cool tools.
My stuff is just rudimentarystuff that I find online
Investorgov.
They've got a compound interestcalculator, but yeah, you guys
have a lot of tools to plan forthose unexpected or even
expected expenses.
So that's cool.
Chris Wilkens (25:23):
I like that.
I think we should have a morepersonal conversation about this
when this podcast is over.
Todd Carswell (25:27):
about your personal finances I love it, man
Moving on, yeah, so let's gointo wealth strategies Now.
How do you advise people onprotecting their assets from
unexpected events such as jobloss or illness, or even market
crashes?
Chris Wilkens (25:45):
Having a rainy day fund or some cash that you
can quickly access for thosetypes of things.
That is, I'd say, is absolutelynecessary to have before
investing in the stock market.
I'd say six months of cash isprobably a good baseline to have
before investing assets intotrue investments, because with
(26:07):
an investment you don't want tobe day trading it, you don't
want to.
If this is money you need for adown payment on a house in six
months, that's not somethingyou're going to want to invest
in the stock market, becausethere's a lot of people in the
world they're getting paid a lotof money to figure out how the
S&P 500 is going to opentomorrow morning and not one of
(26:28):
them has an idea.
Right, because there's so manyfactors outside of your control.
Well, the stock market I thinkwhat's great about it is that
the stock market is.
It's where all thesedecentralized sensors are that
show you what's going on on theground, whether it's the price
of oil, whether it's an interestrate, whether it's the value of
(26:49):
a company.
And my point is there's so manythings changing it would be
impossible to factor, becauseonce one of them changes, it
starts to change everything else.
It's kind of a chain reactionof things that are always
happening.
So yeah, if you were to say Ineed this whatever amount of
money for a down payment in sixmonths, you certainly don't want
to put that in the stock marketbecause you're going to be
(27:09):
looking at it every day.
I think maybe a high yieldsavings account under the FDIC
limits might be a better optionfor you.
From a risk reward standpoint,that would be a better option.
Todd Carswell (27:21):
Yeah, I mean for my family members that are
concerned about putting moneyinto 401ks or whatever for
retirement.
They're worried that it's goingto crash.
And I always point out that theS&P 500 index, that's the
benchmark for the marketperformance.
It's the top 500 companies andcorrect me on this, chris but
it's the top 500 companies inthe market today, right?
(27:41):
Is that the S&P 500?
Chris Wilkens (27:43):
Yeah, the top 500 publicly traded companies,
largest by market capitalization, which means value of the
shares and how many shares theyhave outstanding.
Todd Carswell (27:53):
Yeah.
So I like to point out thatthat index started in 1928.
Since 1928, that index hasgenerated an annual return of
8.6% over time.
Now we can't say it's going tocontinue doing that, but it has
generated that interest rateover time.
And that includes the GreatDepression.
It includes these big crashesthat we've had, like in the
(28:15):
1980s what was it?
Black Monday 1987 or somethinglike that.
But you can look back on thesegraphs and you can see years
it's up, years it's down.
And I look at it and I go, okay, the most it's ever gone down
in a bad year was like 30% orsomething like that.
That's a lot of money.
But if you just leave yourmoney in the market over time
(28:38):
it's going to come back up.
And if you're in an ETF orwhatever for the S&P 500, if a
company goes out of business,they're no longer in the S&P 500
.
Your money gets reinvested intothe next one that comes in.
I like that.
But there were years when themarket dropped 30%.
But overall they've seen 8.6%per year returns and you're
doubling your money in less than10 years with that markup.
Chris Wilkens (29:02):
Well, an individual company can certainly
go to zero, so that issomething to be mindful of,
which is why you don't want tohave all your proverbial eggs in
one basket, whereas if you aremore diversified in an index
fund, an index, an ETF or amutual fund, the probability of
(29:22):
all those companies in that fundgoing to zero is pretty
unlikely.
Todd Carswell (29:28):
Yeah, dude, this is a sad tale.
I knew this guy.
He was in his 50s at the timeand he put all of his 401k into
the company stock the companythat we worked for.
Every penny of it into thatcompany we worked for it went to
a penny stock.
The dude lost everything andI'm just like, oh, he's in his
70s now and he's still working.
(29:51):
I'm like, oh, don't puteverything in one Don't do that.
Chris Wilkens (29:56):
Unfortunately, I'm familiar with similar
stories and talk about when itcomes to managing risk as well.
If you have a significantportion of your assets in the
stock of the company that youwork at, well, if something
happens in the company, you loseyour money and you lose your
job, oh yeah, so that just seemskind of like a double whammy
that you don't want toexperience Right, don't put it
(30:18):
all in one spot.
Todd Carswell (30:19):
And I don't trust myself to pick stocks.
I'm not doing that.
James Robinson (30:23):
Yeah, so would you mind educating us just a
little bit regarding IRAs?
So what's the biggestdifference between the 401k and
the Roth IRA?
Chris Wilkens (30:34):
So an IRA, whether traditional or Roth, a
401k, a 403b, and for governmentemployees they have the TSP
Thrift Savings Plan.
Those are all forms ofretirement accounts and where
the Roth IRA is different isthat in that one the
contributions you make to theRoth IRA are after tax and then
(30:58):
they can grow tax-free.
And then when you pull themoney out of the Roth IRA when
you're retired, you don't paytaxes on it.
Then when a 401k, generallythat's pre pre-tax money and you
get the tax deductionimmediately.
So say, you make $100,000 ayear, you put $10,000 in your
401k, you get taxed on 90, andthat $10,000 can grow tax
(31:21):
deferred.
So the younger you are, thatmoney that you didn't pay taxes
on is now invested and again,compound interest really works
over time.
So if you work at a company,you have a 401k nonprofits and
teachers tend to have like 403bs.
The benefit of them is thatyou're getting the benefit of
(31:41):
not paying taxes on those assetsthat you're contributing to a
retirement plan.
You get that right away and thenthose assets grow tax deferred
and the rationale behind it isthat when you're working you're
believed to be in your highertax bracket.
And I'm up here in theNortheast, so New York, new
Jersey, generally the higher taxplaces and then when you retire
(32:04):
you move to someone with alower tax state generally
Florida or Texas or Arizona andthen when you're pulling the
money out you're at a lower taxbracket and a lower tax state
generally Florida or Texas orArizona and then when you're
pulling the money out you're ata lower tax bracket and a lower
tax state.
So for most people contributingto the 401k while you're
working, it benefits you thenand then it benefits you also
while you're retired.
(32:24):
So the Roth there are incomelimits on the Roth IRA and the
benefit of that one is do youpay the taxes up front, but do
you have enough time for it togrow compounded to where you
benefit on that tax-free growthand then take out more assets
when you're retired and not havea tax then?
James Robinson (32:46):
So do you recommend one over the other?
Is there a blanketrecommendation?
So do you recommend one overthe other?
Is there a blanket?
Chris Wilkens (32:49):
recommendation For most people that are
employed at companies.
If you can afford to,maximizing your 401k
contribution every year is agood start and then with the
Roth, you'll know if it was agood answer when you passed away
, when you're 90, if you had thetime, if you have time, to see
what the performance was, whatthe rate of return was and
(33:11):
everything.
So, because there is an incomelimit on the Roth IRA, most
people don't directly contributeto it.
But what some people or clientshave said to me is does it make
sense to do the Roth conversion?
And again, this is going to bea little more complex and not
apply to everyone.
This is going to apply to yourmore wealthier listener base.
(33:33):
But I recently had a client whoshe has multiple board seats and
she's going to be sitting onthis board for quite a while and
she's going to be gettingincome and then she has, like
these deferred shares that she'sgoing to get.
So when we significantly lateron, probably into even her 80s,
so we were looking at herretirement plan and looking at
(33:53):
what her withdrawals were goingto be and due to all the income
she was going to be receiving,and then on top of that, at age
73, she has to start takingwithdrawals from her IRA.
So these forced withdrawals inabout 10 or 12 years are now
going to be forcing her to pullmoney out and it's going to be
at a very high tax rate.
So they were asking me to dothe analysis.
(34:15):
Does it make sense for us tostart paying the taxes now and
converting and doing the RothIRA conversion on these
retirement assets?
That way, in 15 years I'm notforced to take out more money
and I have to pay more in taxes.
So that's some of the things Ido with the clients to see if
the Roth IRA conversion makessense.
(34:37):
Generally speaking.
Even if it does make financialsense, most people don't want to
do it Because to do a Roth IRAconversion with your retirement
assets, you have to pay thetaxes right away and you have to
write that check today, hopingyou benefit from it in 20 years.
And a lot of people don'tnecessarily want to do that
(34:57):
Right, but if they want thatanalysis done, I can do it for
them, does that?
Todd Carswell (35:01):
lady need a pool boy.
That's what I'm going to do.
I'll talk to you after the.
We'll talk later.
I'm kidding, I'm married, allgood, it's just kidding so, but
yeah, so just a side note.
What I like is that you're notformulaic in this.
You're not saying cause, if yougo to YouTube and this is I
(35:22):
warn people don't go to YouTubeto get financial advice, because
you're going to get randos outthere who really don't know what
they're talking about.
They're just doing internetsearches and they're going to
come out and say you mustconvert your 401k to Roth and
all this stuff.
Talk to a professional, don'tgo to the YouTubes to get your
financial advice, all right.
(35:45):
So next question For those whoyou mentioned wealth plan, as
when you're talking abouthelping people getting their
finances in place, but forpeople with a wealth plan, how
do they determine if they're ontrack to meet retirement or
other, whatever their long-termfinancial goals are?
Chris Wilkens (36:02):
When we do a plan , we do update it every year.
So let's just use the example,like I said someone who is 50
years old and want to retire at60.
It let's just use the example,like I said someone who is 50
years old and want to retire at60.
It's going to forecast, say,you're going to save whatever
$50,000 a year after tax, andyou were going to invest in this
and, based off your risktolerance, you're going to have
(36:23):
a moderately aggressiveportfolio.
So we're going to plan on a sixor half percent return
annualized.
So by the time you're 60, youshould have this amount Right,
something along those lines.
Well, each year we're going togo through that and says you
know, you said you were going tosave 50,000 this year.
You didn't.
Or we were planning for a 6%return.
The market actually returned 20.
(36:43):
Or you saved more and themarket did have a.
The market had a bad year, soyou had this amount of money.
Now you have less.
So the future is always kind ofthis dark path and when you do
the retirement plan, it doeskind of light the way a little
bit.
And as we're getting closer toretirement, so say, right now
it's 2025 and you're going toretire in 2035.
What the plan says about theyear 2035 is a bunch of
(37:06):
guesswork and assumptions, andthen, as we get closer to 2035,
it becomes more accurate.
So we really just kind ofmaintain it and it's the basis
for what the investments are,how they're doing.
Do we need to make changes?
Is there something we shouldadd?
Retirement plan is thefoundation and the house is the
investments.
Perfect.
James Robinson (37:28):
So I'm curious, given that, what are the common
misconceptions you've heard fromfolks about income sources in
retirement?
Okay, how do you educate folksabout that?
Chris Wilkens (37:38):
So similar to having a diversified stock
portfolio.
When it comes to retirement,you want to have your retirement
income come from diversifiedsources as well.
You won't want to buy, like,just one or two bonds and just
collect the interest from them.
You don't just want to buy adividend paying stock and rely
on just the dividends from them.
So it is diversifying thesources of income that you are
(38:02):
getting in retirement.
And one thing to that there'salso understanding the risks
associated with each type ofinvestment.
So, Todd, you had mentioned how, when you may go to YouTube and
someone says you should do thisbecause you'll get this
guaranteed rate of return,Sometimes there's a product that
(38:23):
can give you a guaranteed rateof return but you kind of give
up your access to the money andyou give it to an insurance
company, Whereas you'll get thatconsistent income until the day
you pass.
But if you get into, have atragedy happen in a year from
now, that money's gone In somecases, right, there's annuities
(38:43):
and there's insurance andthere's stipulations with each
contract.
But also, if you own, maybe, acertain private equity
investment that's paying thisenhanced return, then maybe
that's paying more than thetraditional bond market might
pay, but you might not haveaccess to it.
It might not be liquid.
So for some people theyinherited some money from their
(39:04):
parents who had passed and thenthey inherited all these stocks
and then it was a volatile yearin the market.
He's like I can't handle thevolatility, I want something
guaranteed.
And in this particular case hewanted the annuity.
He wanted that guaranteedincome and he was happy to let
the insurance company have it.
So in that instance he washappy with it.
(39:24):
So I would say, justunderstanding the risks
associated with different incomesources and the fact that it's
not necessarily a liquidinvestment isn't necessarily bad
.
Like a home is a goodinvestment, but a home's not a
liquid.
You can't sell it like rightnow and get cash for it.
You know it's a process.
So sometimes these otherstrategies that certain
(39:46):
investment managers might do,it's just really understanding
the risk associated with eachinvestment and having
diversified income sources.
Todd Carswell (39:55):
Now, what about?
Have you seen any dangerousretirement planning fads out
there that people need to beaware of?
Chris Wilkens (40:04):
It's not necessarily a fad, but there's a
lot of people in my industryand when it comes to an advisor,
it has to be someone you trust,like any type of trusted
advisor, whether it's anattorney, an accountant or your
doctor.
It does need to be someone youtrust.
I wouldn't say a fad, it'sreally any investment.
(40:27):
They're not good or bad, it'smore whether they're appropriate
.
Really any investment.
They're not good or bad, it'smore whether they're appropriate
.
And if you're going tointerview a financial advisor,
you should be asking a lot ofquestions and the answers should
be, in my opinion, based onyour client's situation and what
they're saying, the things thatare important to them, the
(40:47):
goals that they want toaccomplish and also sometimes
being very honest with them,because sometimes they may have
unrealistic expectations.
They want a high return butthey're not willing to accept
any risk Something along thoselines.
Todd Carswell (40:59):
Right, yeah, if you're talking to a financial
advisor and they're just saying,hey, here's what you need to do
, blah, blah, blah, they'regiving you formulas and all this
stuff and they're not talkingto you about your situation,
that's where, to me, that's ared flag.
But yeah, I like that you saythat you got to meet with the
person and see what theirsituation is and then you create
the plan.
So pay attention to that folks.
(41:19):
So what non-financial factorsplay into your approach to
financial planning?
I mean things like lifestylegoals, mental health, personal
fulfillment, things like that.
Chris Wilkens (41:35):
So how do you incorporate that into financial
planning?
It happens over the course of alot of conversations, because
all my clients who retire arewealthy enough to retire and
live the lifestyle they want.
So the money's not a factor andretirement is.
For a lot of people it's justthis abstract thing.
You know, we talk about it andit's at some point in the future
, and then that's it.
(41:56):
And then you get to a pointwhere it just hits you and it's
like, oh wow, I'm not going tomake any money anymore.
The hell, am I going to do, youknow?
And then it finally does kindof hit them.
And then I start asking thequestion, like what's your
desired retirement lifestyle?
Into days after tax dollars,and they're like I don't know.
Is my kid going to med school?
(42:17):
Am I selling the house?
Am I going to work part time?
Like what am I going to do?
Are we going to buy a beachhouse?
You know there's all thesethings that do kind of come
rushing.
And I would say a good piece ofguidance to anyone that is
retiring retirement is easier ifyou have something to retire to
(42:38):
as opposed to being you'reretiring from something.
Like if you just hate your joband I understand there's plenty
of people that don't like theirjob.
But if you just want to stopgoing to work because you hate
your job, I understand that.
But you do have to stop goingto work because you hate your
job, I understand that.
But you do have to havesomething to look forward to and
I feel like you spoke aboutthis on other episodes of your
podcast.
But it is a bit of a sense ofpurpose and meaning and
(43:01):
something that does interest you, because as much as people,
especially guys, they'll saylike I want to retire and I'm
just going to live on the golfcourse, I think that that's good
for maybe a month or two, and Ilove golfing too.
I'm not knocking the sport atall.
You spent 40 years in a careerand you established
(43:22):
relationships with them.
Maybe you went into an officeor you're interactive members of
a team and you just can't.
You can't just end that one dayand you know I'm going to tour
wineries and live on a golfcourse, like you've had this
life that you've built over overdecades and it's not just going
to change when you retire.
Now I'm not saying don't havefun plans or don't be afraid to
(43:44):
move somewhere or go on moretrips or do those things.
But my clients are fortunatelyin a position where they're able
to continue working in a mannerthat fulfills them.
And I understand you don't wantto get fulfillment from your
job.
But if you've been there for 40years and then you could still
(44:06):
do it kind of part-timeafterwards and there's younger
people who maybe appreciate yourexperience, so you're still
valued, you still feel relevantin your industry, you're still
solving problems or people arecoming to you with advice or you
get to mentor the new people,those clients who do retire and
still kind of have that.
(44:26):
They still have something to doand it could also just be
spending time with grandkids.
I mean that gives a lot ofpeople purpose too.
So back to I'll wrap it up withwhat I said earlier like having
something to retire to asopposed to retiring from
something, that's a good path tohead towards.
Todd Carswell (44:44):
Yeah, I saw a video.
It was a cardiologist.
He said I'm dealing with peoplethat living living into their
80s and 90s.
He said the people that are themost healthy, with the best
mental health, are the peoplethat continue doing some sort of
work after they've officiallyretired from their careers.
Maybe they're working a job,just something to keep their
(45:07):
minds going.
Because I mean, if you juststop working and you think
you're just going to live on thebeach and just live a life of
leisure, that's going to be deadin a few years.
Chris Wilkens (45:19):
I'll give them.
I'll give the example of myfather.
We had a tragedy in our familya bunch of years ago.
We had a couple members killedby a drunk driver and shortly
after that my father had retired.
And now my family's not wealthylike my clients are, but still,
like the whole, like I'm notgoing to work anymore, I'm going
to retire, what am I going todo?
(45:40):
And so I got him this book thatI do give to my clients when
they retire.
It's called Don't Retire Rewire.
And I know the authors it'sJerry Sedler and Rick Miners
wonderful people.
Rick actually served in the army.
He was a tanker back in the dayand he went through the book
and there's exercises and hesaid what he realized was that
(46:01):
he wanted to do something, buthe didn't want to get paid.
And yeah, my parents and otherpeople have a ton of money, but
my dad's, like I, don't want toget paid because that means they
can tell me what to do.
So he ended up doing a lot ofwork with mad mothers against
drunk driving, as well asinitiatives in my hometown,
right, and that kind of gave himhis sense of purpose.
But but no one could force himto be anywhere at at any time or
(46:24):
force him to go to a meeting.
It was just on his terms andit's something he really enjoys.
I mean, he's been doing it.
He's been doing it for over adecade now.
So yeah, so it's not like a lotof non-financial factors do play
a part in do you enjoyretirement?
Is life fulfilling?
But I will say that thefinances do help.
(46:45):
There's this comedian, AnthonyCumia, and he said it on Joe
Rogan's podcast, where he saidmoney doesn't buy happiness, but
it pays for a lot of sadness togo away.
And that is one of the mosttrue statements I've ever heard.
Todd Carswell (47:02):
Love it, you got to have money.
It costs money to live.
So, yeah, it's not a bad thingto have money either.
So, chris, do you have anytakeaways you'd like to leave
with our listeners?
Chris Wilkens (47:12):
I'm thinking of a lot of things based off the
questions you asked.
I guess for your listeners whoare considering talking to a
financial advisor, feel free tointerview a bunch of them.
And if you don't feelcomfortable with them because
for financial advisors we allrun our own book of business
under the umbrella of a largerfinancial firm.
(47:32):
So the financial advisor in theoffice next to me, I don't know
who his clients are, I don'tknow his investment philosophy,
I don't know what they do andthey don't really know mine, and
you have to trust the person.
There's a bit of a personalityfit and every advisor is going
to have a familiarity withcertain types of investments or
processes.
So, just as an example, I havea lot of clients who have
(47:56):
investment restrictions, right,Whether it's attorneys who do
merger and acquisition work,whether it's financial people.
So if they work at another bankbut they want to have their
assets with me, there's acertain process with that.
Or you deal with the big fouraccounting firm partners like EY
, Deloitte, KPMG and PriceWaterhouse.
They have restrictions basedoff the audit work they do.
(48:17):
So I have kind of aspecialization in client
reporting with outside firmsjust to simplify their
compliance reporting, becausethat could be a headache for
those types of professionals,like I said, in law, finance or
accounting.
So that's just something I'vepicked up on because I've been
doing this for 15 years.
But for anyone who is interestedin speaking with an advisor,
(48:39):
interview as many as you canuntil you feel comfortable.
If you don't feel comfortable,no need to invest.
So where can people get intouch with you?
I'm pretty easy to find.
My name is Chris Wilkins.
Last name is spelledW-I-L-K-E-N-S and it's RBC
Wealth Management.
There's an RBC page for me andthen there is a LinkedIn as well
(49:01):
.
Todd Carswell (49:02):
Yeah, I'll go ahead and put links in the
description.
But yeah, we'll get that out.
I appreciate your time, brother.
Chris Wilkens (49:07):
All right, well, I appreciate being invited back.
It's not like I go on a lot ofpodcasts.
I'm not in high demand as muchas I expected I would be.
Todd Carswell (49:16):
We get a lot of people financial advisors asking
us to be on the podcast.
We're like, no, not, everyepisode is going to be about
money, so you know.
And yeah, you know, we don'tknow them.
James Robinson (49:25):
So it's like, oh , yeah, no, we just appreciate
your time and your advice andwisdom and sharing that with us
and our listeners.
And yeah, we'll be sure and addthe link.
We'll link that book as well.
Todd Carswell (49:42):
And it'll be our Amazon affiliate link.
Oh great, yeah, affiliate link.
You don't pay any extra price.
We do get a small commission ifyou buy through that, so it's a
don't retire rewire.
I'll put a link for that.
And also, if you're looking fora financial advisor, trust is a
big thing.
So I will say that I heard ofChris before I met him in person
, and I'm friends with a Marinethat served in his platoon
(50:05):
during the Battle of Fallujah,and his troops spoke very highly
of him, so he's trustworthy.
So that's from a lot ofdifferent people.
So give Chris a shout.
He's a good dude.
But here's my takeaways.
Whatever your stage of life, nowis a great time to start saving
and investing.
You can achieve financialsuccess, and the starting point
(50:25):
it's got to be getting a handleon the spending, what's going
out the door.
And then you need to make aplan.
You need to plan to set aside apercentage of your income.
I would recommend getting witha financial advisor to make a
plan for that income that you'resetting aside and don't try to
live like other people because,honestly, if you're seeing
people that have a lot of cooltoys and stuff, they're probably
(50:47):
broke, except for that ladythat I'm going to be her pool
boy.
But all that aside, finaladvice let compound interest and
time do the work for you.
Even if you're in your 50s, youmay have to work a little bit
later in life, but you also mayhave to significantly change
your lifestyle.
And that's not necessarily abad thing, because my mom she
(51:09):
lived on just her socialsecurity.
She just downgraded herlifestyle and she got to a place
where she can live on $2,000 amonth.
She was very happy doing that.
She was very socially connectedand she's very happy.
It doesn't take money to createthat sense of fulfillment, but
you do have to have money to paythe bills.
So make a plan, change yourlifestyle, set aside money, get
(51:31):
with a financial advisor to helpyou put things together for
retirement so anything else,james.
James Robinson (51:37):
I strongly encourage you to talk to a
financial advisor.
Todd Carswell (51:40):
Yeah, thanks again, chris, and we will sign
off there.
Thanks guys, take care Chris.
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