More Knowledge, More Wealth - Ep 151: Planning Made Not So Simple

Radio Show 7/23

[00:00:00] Gabriel: Good afternoon, everybody. This is Gabriel Shahin certified financial planner, and your host of more knowledge, more wealth here on every weekend. Talking about all important topics of personal finance. Our goal is to give you the knowledge you need to increase your wealth. Now to the listener, you can always reach out to myself or any one of our colleagues here at Falcon wealth planning.

[00:00:58] Our phone number is eight five five. 9 6 3 25, 26 that's 8 5, 5 96, Falcon like the bird, or visit our website at Falcon wealth, planning.com. That's Falcon wp.com for short. Now I'm a principal of Falcon wealth planning. We are a fee only financial planning firm that also manages money as well, but we really specialize in everything that involves a dollar sign folks.

[00:01:22] That's where you are today. How retirement looks like talking about taxes, investments, insurance, and state planning, folks, you name it. Anything that involves a dollar. We can help. And if you want help relating this show to your specific situation, give us a call. We got offices all across the west coast and we help people all across the country.

[00:01:41] Our phone number is 855 - 963 - 2526 that's 8 5, 5 96, Falcon like the bird we can help put together a personal assessment to answer the questions that you have because things are ever changing in this environment. Right now, things are happening on a daily. Basis that it's really hard to keep up.

[00:02:02] This could be with the political climate, with the law changes that are happening with the international crisis. That's going on with invasions in Ukraine, with what's going on in China and Europe and you name it. Folks. There's always something going on. You have to think to yourself, no matter how smart you are, no matter how much you love current events, are you gonna know everything that's going on?

[00:02:24] Are you gonna be able to. Up with everything and manage your portfolio and make the changes necessary in your portfolio, because here's the crazy part. And this is from the best financial gurus in the industry. These are the individuals on a daily basis with teams of people that bring people together and make trades and analyze stock and do the investments and everything to say we're better than you.

[00:02:47] Because we do this every single. The irony for those that are actively managing a portfolio, versus when you compare how professionals do it, financial advisors, money managers, active mutual funds. They cannot over a long period of time over 10 year period. Well, over 95% of these active managers fail to beat the index.

[00:03:11] Think about that for a second. You, if you can't do it, Who and professionals can't do it. If they cannot. Outbeat the index. Why are people trying to do it? It's insane to think that you are putting your trust in somebody that nobody has proven they can do on a long term basis, which is two things. Number one buy and sell, know when to buy and know when to sell.

[00:03:38] That means to sell when things are high and buy when things are at all time low. So nobody can guarantee those two things. And number two, choosing individual stock on a consistent basis. Hey, Tesla was great, right? Well, look at the thousand percent return. So you buy at 1100 now it's at 700 you know what I mean?

[00:03:58] You just lost 30% plus in just a short period of time. So nobody can do this on a consistent basis. It just, hasn't been proven. You may get one or two, right. But I've had many and, uh, academics say you have to get five to 10 wrong to get one to two. Right. So is it really worth it? Because the average ends up being that same market, like return of five to 10%.

[00:04:22] So if professionals can't do it, if active managers can't do it, if you obviously can't do it, how could you do it? If they can. Don't trick yourself to say you've done great. When the reality is you really haven't, you're just, yeah, you made 200% on your money, but over 25 years, you, what I'm saying and you take that over all your accounts.

[00:04:46] Yeah. You doubled your money. Great. But that was since your purchase of 2000 and. , you know what I mean? You should be doubling your money every seven to 10 years. Assuming you get a seven to 10% rate return on your money. That's how you should be investing. That's how it should be working. And are you doing that over long periods of time?

[00:05:06] I'm telling you, you don't have to be a master investor to get this right. And I'll prove it to you because 95% of active managers cannot beat the index. Have you ever thought about just joining the index? I mean, why do you need all this? Hoo-ha these expensive hedge fund managers, these expensive, expensive private equity companies, these expensive, different ways of investing your money.

[00:05:31] Through active managers and portfolio managers and investment advisors. I mean, I'm a financial planner here telling you the value of finding someone that can manage the money better than you could be a fallacy. If they're trying to time the markets and be active with your accounts, that's crazy yet again, they can't even beat the index who to say that can, this one person can do it because if that's the case, why would they do it for you?

[00:05:55] Why wouldn't they just do it for themself. This is how it makes sense is if they're providing value to you, what value are these individuals providing by the way, folks, if you're just joining us, you're listening to Gabriel, Shahin certified financial planner and your host of more knowledge more. We here on every weekend talking about all important topics of personal finance.

[00:06:18] And today we are talking about just the value of these markets and all the crazy stuff that's going on, and you can be amazing. You could be some, somebody that's a finance professor, which we've got a lot of clients that have their PhDs and teach economics and finance, but you are not doing this on a daily basis, looking at the accounts.

[00:06:36] And then you have to think, do you even need to, as I was saying earlier, by being in an index that tracks it truly direct index, this could make the most sense for you. So then you have to ask yourself, why do I need a professional. let me just buy the Vanguard total stock market fund. I get what you're saying and listen for few of you, that may make sense.

[00:07:00] It makes sense until you get to a certain dollar amount. I recommend if you're starting off, whether you're saving a hundred dollars a month of 500, a thousand a month, or hell 10,000 plus a month, I do recommend just going into one of those index. Especially if it's for long term investing like the S & P 500 or the one I gave you earlier, the point I'm sharing with you of course, is when you start having north of, let's say a hundred thousand dollars, that's where the more money, more problems come in.

[00:07:30] Or if you start making over a hundred thousand dollars a year, this could make sense because of your tax bracket, because it's not. what to invest in, but where to invest it, depending on your income, you have to factor things like capital gains tax, qualified dividends, tax, ordinary dividend tax, normal interest tax, municipal interest as well.

[00:07:52] And if it's subject to the states, these are things that can affect your total return net of taxes. , this is where it makes sense to talk to a professional that can relate these investments, these specific key qualities to invest to your situation. I see people doing it on their time, on their own all the time, and sometimes it just doesn't make sense.

[00:08:16] I'll have a simple question for you. How is your account titled? How is it? Is it in just your name? Is it joints? Is it joints with rights to survivorship with entirety tenants in common community property? You get what I'm saying? It matters how it's titled. Especially if it's with a parent, a child, a spouse, a significant other, there could be intentional ways.

[00:08:39] You want to do certain things. But my point is, how do you know this? You're not supposed to know this. , this is why more money, more problems, depending on your situation and your income. That's where it makes sense to talk to a professional folks. There is no obligation to these type of conversations.

[00:08:57] We're offering one to two meetings, one to two hours of our time at no cost. All you have to do is pick up the phone and give us a call at eight five five 9632526 that's 8 55 96, Falcon like the bird, or visit our website at Falcon wealth, planning.com. That's Falcon, wp.com. For short, we can help answer those questions.

[00:09:21] Take a look at what you're doing and telling you, listen, I'm telling you indexes could make sense for a majority of you. That's what I'm telling you, but it's what indexes to get. Cause we only spoke about one. Really. If you think about it, then where to invest it. And when I say that you have a brokerage.

[00:09:38] A liquid brokerage account. We just talked about the titling of it. So that could be complex just with that alone. Number two is a tax deferred account. That's a retirement account. Well, that's an IRA where there could be income limitations to that. There could be 401ks. Well, there could be access restrictions to that.

[00:09:53] There could be 457, 403b, SEP, if you're self-employed or solo 401k, then you have the Roth account. There's a regular Roth. I rate. Well, depending on your income, you can't put. You might have to go a back door route. You could, if you're self-employed you could do a solo Roth 401k potentially, depending on your situation.

[00:10:09] And lastly, if your employer offers a Roth feature, maybe you could take advantage of there, but depending on your situation, depending on your goals, that's where you determines what makes the most sense for you. And I don't blame you. If something as simple as investing in an index. Is something you want to execute and you wanna do on your own.

[00:10:27] But my goodness, some of these decisions can be irrevocable. I've seen the situation where somebody put their money into a mutual fund, a large cap, you know, S and P 500 type mutual fund. And that's paid tens of thousands of unnecessary tax. And they had to pay capital gains tax on that. And all they really started with was a hundred dollars a month, but you extrapolate that out out for 20, 30 plus years.

[00:10:53] It becomes a substantial asset. This person had well over seven figures and now to take that money out would have to pay a ridiculous amount in capital gains tax, not including all the taxes they paid on the capital gains that they had from the mutual fund. Just kicking it out without them even knowing plus the interest plus the ordinary and qualified dividends.

[00:11:14] These are the things that you have to take a look into versus if it was just put into, for example, a Roth IRA. No, taxes. At all take the whole thing out, depending on your age and you pay zero taxes for you and your heirs forever. Yet. Again, it depends if you're saving for a house, it may not make sense.

[00:11:34] But then again, how much do you need to take out of that savings? When do you need it? When are you gonna purchase it? You know, because you could potentially take it out. Penalty free depending on the situation. This is why there's no substitute depending on your income situation and your asset situation. of talking to a professional that does this daily, no matter how great you are, have you done this tens of thousands of.

[00:11:59] right. Have you done this thousands of times on an annual basis, even if you did this before, even if you're an old stock broker, there are so many old financial professionals that hire other professionals to do it. I'm gonna go over more examples for you for what makes sense for you. But if you need help, give us a call.

[00:12:16] Our phone number (855) 963-2526. That's 8 5, 5 96. Falcon like the bird stay with us. We're gonna have a few words. We'll be right back. Shortly.

[00:12:29] welcome back folks. This is Gabriel Shahin, certified financial planner, and your host more knowledge, more wealth here on every weekend. Talking about all important topics of personal finance. And today we are discussing just how simple it is to invest, but reality is of the complication that could arise from it.

[00:12:47] So we are gonna discuss today other forms of complications with the account. We talked about just the registration of the account. We talked about where to invest the money. Do you invest it in tax deferred into a Roth, into a brokerage account account. These are items that could be very important for you to discuss of what makes sense for you.

[00:13:08] I talked about people who have finance degrees or people that even teach this stuff, or just simply you were in the industry before. And I was talking about how even people that were in the industry, even professionals that are do it, it's crazy how this works its they're smart enough to realize they can't do it themselves or on a daily basis in an efficient.

[00:13:29] Now the question you should be asking yourself is define efficient. What do you mean by efficient? It's such a vague term. It sounds really good. How does that affect me? The efficiency as we discuss could be the titling of the accounts. Number one, number two, where you invest the money. Number three,

[00:13:45] playing the game of, depending on your tax situation, where to invest it, do you get the tax right off today or do you put it into a Roth to, for of that, that's why when you start making over a hundred thousand dollars or have a hundred thousand in assets, it's very important to analyze those options because you could also be looking at maximizing retirement accounts at work or whatever qualified accounts that they offer you.

[00:14:08] This could be important depending on your situation and your goals that you have. This is why we continually say there is no substitute to talking to a professional yet. Again, we have professionals that used to do this, that hire professionals that hire us to do it on their behalf because they know this is cumbersome.

[00:14:29] They know this is nervous. They know that there are new things, new tax laws, new situations, new investments. New strategies that you could be taking advantage of. Heck these just change in 2020 change again, 2018 change again in 2017. Change again in 2013. Change again in 2010 changed again in 2009. Change again in 2008.

[00:14:50] changed again in 2004, changed again in 2002, change again in 2001 and 2000, get what I'm saying. What is that? 12 times out of the past 20 years you get what I'm saying? This is overwhelming. talk to a professional, if nothing else get a free financial assessment. And that's why we are offering one to two hours, one to two meetings of our time at no cost, we all be able to tell you what you have.

[00:15:18] And what you should be doing if you decide to work with us or not, that's up to, you always say spread the good word of what we do. We grow ridiculously off referrals folks, and we'll tell you what it looks like to work with us, but there's a no obligation. One to two hour, one to two meeting process that we're more than happy to help you with folks.

[00:15:38] Give us a call. We help people all across the country. Our phone number is eight five. 9 6 3 25, 26 that's 8 55 96 Falcon like the bird, or you can visit our website at Falconwealthplaning.com that's Falcon, wp.com for short. And you wanna make sure who you're getting the advice from, because if you're getting your advice from an insurance agent, they're gonna try to sell you on some index, universal life insurance policy and claim that it's tax free for you, which is ridiculous.

[00:16:08] Yeah. It's tax free, but can you go ahead and die for me first, please? You get what I'm saying? It's crazy when people talk like that. So that's number one. Number two. If you talk to a stock broker, they're gonna try to sell you. Excuse me for saying, listen, there's some good ones out there. And I apologize for saying that, but the point is, is they're commission based.

[00:16:26] Okay. So you're always gonna have to worry about the complex of interest. It's reality. I'm sorry. There's no other way to say it. So you have to be able to lookout for that. Also, if they don't have the, the, the, uh, designations, if they don't have the credentials, if they don't have the experience to be able to give you, for example, tax advice.

[00:16:48] The what value are they really giving you just what to do with your money? How are they supposed to tell you where to save your investments, which you count if they don't even understand your full tax situation? They can't just ask you the question on how much you make. Because what if there's other assets?

[00:17:02] What if you're married? What if there is rental income? What if you're self-employed you see there is more to this industry than just managing your. Falcon Wealth. Ironically, the company I work for has a saying and has a trademark of planning made simple kind of funny. If you think about it, it's planning made simple, but the irony is there's really nothing simple about this.

[00:17:26] It's as complex as you wanna make it, but if you wanna do it right, and if you have assets, if you have money, this is why people hire attorneys. This is why people have accountants. This is why people have financial professionals. This is where we would like to. , this is where we can add value by the way, folks, if you're just joining us, you're listening to Gabriel, Shahin certified financial planner, and your host more knowledge, more wealth here on every weekend.

[00:17:49] Talking about all important topics of personal finance. And today we're talking about your overall assets and net worth and your situation. And I make the commenting more money, more problems. Now, it's not my comment. We've heard that a lot, but I'm here sharing with you ideas throughout this episode of examples.

[00:18:07] we talked about registration. We talked about taxes. We talked about your situation, liquidity. These are all important factors of when it makes sense for you of when you may need to seek a professional, because if you plan in advance, you could be avoiding penalties. If you plan in advance, you could be avoiding taxes, legally avoiding taxes, not those weird games that you hear.

[00:18:35] People they get caught up and thrown in jail with the IRS. We're talking about legitimate strategies available, but some of these need two years plus planning, some of 'em needs five years plus planning. And if you're looking to retire in the next three to five years, people say, well, I'm not. well now could be the best time to do it.

[00:18:54] It could be as something as simple. If you're looking to acquire another company, there could be a better and cheaper way to do it. So there could be other strategies that you could sell other entities to put into another entity and pay no taxes on that either. There's just no shortage of opportunities.

[00:19:12] And God bless our tax laws for giving us all of these different ways to help people like you save money, our tax code. is thousands of pages, long There is tens of thousands of codes that could help you. We're not here to say we're gonna help you. evade taxes. No, no, no. You know, that's a different type of retirement plan.

[00:19:34] If you know what I'm talking about, , we're here to say there are different tax strategies to help you avoid taxes and all these are legitimate. Very simple. There's no tricks around it. There's just strategy. And some of it requires planning could take two years planning with something like real estate.

[00:19:52] It could take five to 10 years of planning for something like taking money outta your tax deferred retirement account. It could take maybe another three to five years for liquidation of your business, or to get a higher valuation for it. There is multiple different things that are out there I'm suggesting is we started this conversation talking about an index account, an index.

[00:20:13] That you can get cheap as anything are almost free. If you hear what I'm saying, but it's where do you invest it and how do you invest it? And what type of liquidity do you need? I love everything. Liquid always. That's what I recommend you do. There's a lot of people saying, oh, you want an index account?

[00:20:30] Call me and I'll get you this index account. They're gonna sell you a life insurance folks. Be careful. You can get a bullseye on your back. If you buy something like that, it's insanity. I do not recommend it. Please do not do that. and if you are gonna talk to anybody, make sure you get a second opinion, whether you want to talk to us or any one of our colleagues, or just get a second opinion off somebody that you're about to sign the dotted line on folks.

[00:20:53] We are feet only. Non-commissioned true fiduciary. What's the difference between a fiduciary, a true fiduciary, 100% of the time we have to do what's in your best interest versus somebody who's fee-based. Not fee only like us, but fee base that don't always have to do. What's in your best interest, they make commissions on it.

[00:21:12] And unfortunately there could be conflicts of interest. They disclose 'em to you. But do you really wanna be put in that situation because I'm telling you there are alternatives that don't charge those high fees. You just have to look for 'em and because they have more money than firms like us at a fee only why?

[00:21:29] Because we're not commissioned. They can make up to 10 to 20 times more than us. . I mean, we joke to ourselves say, man, we're, we're the idiots over here. Not taking commission, but we also sleep well at night because of it. Give us a call. We'd be happy to help. Our phone number is (855) 963-2526. That's 8 5 5 9 6 Falcon like the bird or visit our website@falconwealthplanning.com.

[00:21:57] That's FAL. wp.com for sure. We can help put an assessment together yet again, to relate this show to your specific situation, come with those questions that you have come prepared to share with that information because that information can help get a customized plan for you. And we are giving that assessment and we help people all across the country.

[00:22:17] And we'll tell you exactly what you need to do. We're not gonna charge. The only reason we'll charge is if you want us to do it on your behalf, that's when we'll charge you or we'll implement it on your behalf. But we are offering that one to two meetings, one to two hours at no cost. And think about this.

[00:22:32] We're not gonna say, wow, we found like 15 things and we're not gonna tell you what they are and tell you high risk. No, we will tell you talk to the thousands of people that we've discussed. Go and look at our Google reviews and all the positive reviews that we. There we will be able and you'll be able to see all the positive feedback we have and the impact we've helped on multiple people.

[00:22:53] Yet. Again, our phone number is (855) 963-2526. That's 8 5, 5 96, Falcon like the bird. I want you to take a moment to just analyze your situation and. Based on what you have. Do you feel there could be opportunities that you could have taken advantage of in the past and what you could be taken advantage of now?

[00:23:17] And then you gotta think if the answer is yes, what could there be in the future? This is why. We would like to help because it's not just where you are today, but because we've seen where you are today and yesterday, we know where you will be going. So those opportunities that will be coming up, we could share those with you now.

[00:23:33] So you can start planning. Now that could save you tens of thousands. If not hundreds of thousands of dollars throughout your life. Give us a call. We would love to help our phone. Number's (855) 963-2526. That's 8 5 5 96, FAL. Like the bird, we can help put that together for you folks. We'd be happy to, like I said, we got opposites all across the country and we do help via.

[00:24:05] As well in person, if you would like to do that as well. So please take that into consideration folks. That was a fast, fast show. Always a lot to talk about with you guys. I mean, as you can see anything involves a dollar sign could be complicated. It was easy. Everybody would do it and everybody would be rich and we don't just help those with money.

[00:24:22] We help those who wanna become rich, become financially independent. Folks. We want to thank you for tuning with us this weekend, you can always reach out to myself or any one of our colleagues at 8 5 5 9 6 3 25 26. That's 8 5 5 96. Falcon. Thank you for joining the show. Enjoy your weekend. Have a great week.

[00:24:43] And God bless.