Chasing Financial Freedom
Chasing Financial Freedom
Mastering Money and Time: A Journey to Financial Freedom with Chris Clepp
Master the art of aligning money with time and make work optional, as we engage in a compelling conversation with esteemed wealth management practitioner, Chris Clepp. With over two decades of financial expertise under his belt, Chris shares invaluable insights on the connection between financial decisions and business ownership. Listen in as we explore the importance of balancing business and personal life to effectively manage the most valuable asset - time.
In the thrilling world of entrepreneurship, financial roadblocks are inevitable. Join us as we navigate these challenges, stressing the critical factor of clear communication and the role it plays in aligning spouses with financial goals. We delve into the process of evaluating financial situations, setting goals, and the significance of creating a roadmap. Additionally, we underscore the need for professional assistance in estate planning and the crucial role of accountability in this journey.
Venture with us into the realm of financial planning tailored for small business owners. Chris exhaustively explains the process of crafting a financial plan that can make work optional by the age of 60. We also explore the various fee models for financial advisers and guidelines to determine when it's time to engage one. Wrapping up our conversation, we examine the concept of an abundance mentality. Discover why helping others and shifting focus from 'me' to 'we', is integral in creating a financially successful and fulfilling life. Tune in and embark on this enlightening journey to financial freedom in business.
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Guys, ryan Dement from Chasing Financial Freedom podcast. I hope you guys are having a great day. Today on the podcast we have Chris Klepp and this is his intro, and I like this helping business owners make work optional. He's a financial planner, but we're going to talk about a lot of different things and I know on the podcast we've spoken about time versus money and I think that will be one of the topics we discuss here with Chris. Chris, welcome to the show. Thank you for having me, ryan, you're more than welcome. I know it was a little bit of a wait, but thank you for coming on and I'm looking forward to having a good conversation about money versus time, versus business ownership, entrepreneurship. I'm sure we can get into a lot of rabbit holes, as I say.
Speaker 2:Absolutely as good things come to those who weigh right. So I'm ready, Cool.
Speaker 1:So, before we get started, tell the audience a little bit about who you are and what you do, and then we'll get into some conversations.
Speaker 2:Yeah. So I run a wealth management practice called Building Courts Wealth that serves Gen X and Gen Y business owners right. So our abundant wealth process. It really helps business owners align their money with their goals, just make smart financial decisions and then proactively manage the risks and taxes that come with business ownership. Obviously, the clients that I work with and business owners in general, they want less stress, pay less in taxes, want more time, and we're going to be able to help them with all three of those areas.
Speaker 1:Where are you at in the world? I'm in Chicago.
Speaker 2:Beautiful, sunny Chicago right.
Speaker 1:Yeah, Is it actually? Is it decent today, or is the weather we started turning bad for you guys?
Speaker 2:So we had about an inch and a half of snow on Halloween, but it's going to be in the 60s today. So that is Chicago weather in a nutshell for you Cool.
Speaker 1:That's awesome. So how long have you been in this space and what got you into it?
Speaker 2:Yeah, so I started in the financial services field 23 years ago now. I started in the insurance side of things, fell into it by a lot of interesting fate and circumstances that put it together that allowed me to be in that field. I was an agent, I managed, I owned, I went back to just managing for someone else, and what I found out, though, was that you can be the best insurance agent in the entire world, and you still are just viewed as an insurance aid. It is a highly transactional field, and that wasn't really where I was happiest. I was happy really making deep, meaningful connections with people, and being in the financial planning space allows you to be a real agent for change for the positive.
Speaker 2:For many people, there's a lot of anxiety that comes around money. People let the tail wag the dog when it comes to money and don't use it as the tool that it can be to actually get you the true piece of happiness that you want in life, and by being able to work as a holistic financial planner working with these clients, we're really able to harness all of the good things that they already have going in life and getting it all focused so that they get everything that they deserve from the hard work that they put in, both in their family and their business lives.
Speaker 1:So to set a level playing field, a real estate agent, you need to be licensed on the personal and the commercial side for what you're doing. How many series licenses do you have?
Speaker 2:So for what we do, because we do about an advisory field. So I have my six, my 63 and my 65. I'm finishing up my chart of financial consultant. Actually, probably by the time this podcast actually airs I'll have that finished up here, as I'm in the last class for that. But I'm always educating myself in all the different areas for what we're doing and a lot of it just comes with experience that even within the insurance world I started working with business owners for the last two decades and seeing the challenges and the concerns that they have and being a business owner myself a lot of times I'm just solving for my own issues. I'm a father of three in my late 40s trying to figure out how to balance being a really good father, being a really good spouse and then running a successful business and that can be a heavy lift for people.
Speaker 1:I think we all struggle with that. You have to balance all of that out and then making sure that you can effectively use time to get all those different aspects of your life put together. So from the financial piece, let's just dive right in. We have sole-punners that listen. We have entrepreneurs. We have small business owners. We have some larger businesses that are listening and watching. Where do we start at If we're struggling with time and being able to get that back on our side? How do we get back in that lane and take control of that asset?
Speaker 2:Yeah, I think the first step with that is really getting clear with what are your values, what are your visions, what are your goals that you have, what is your relationship with money in general? Not all of us come from the same backgrounds and that can affect a lot about how it is that abundance mentality, scarcity mentality, how it is that we view that. And I think a lot of times people think financial planning oh, you're going to tell me where I'm going to invest my money to get the maximum return, and that's certainly a piece of what we're trying to do. But we really can't draw a correct map unless we know what that destination looks like. And that begins by getting clear. And if you want to be able to create a multi-generational business, which is what I'm trying to create, I have a 26-year-old, a 5-year-old and a 3-year-old Rabbi, my 26-year-old. She works for Fideli. Hopefully she'll come work for me, so I'm working to pass this on to the next generation.
Speaker 2:But some people are trying to work for an exit, some people want to retire as soon as they can, some people want to be more involved in charitable work. Whatever that is, we want to get real clear what it is you're trying when you close your eyes and put your head down in that pillow, what does that look like? And then we can start filling in that plan. And that is going to be talking about how do you invest wisely, how do you do proper cash flow planning? What's your risk tolerance? And then we want to make sure that we're going to start managing some risk around all of that, making sure that we keep you off the landmines, because a lot of what we do is to more about keeping you off the landmines than trying to maximize those returns always, because there's always a math perfect answer or a math optimal answer. But you don't have to make all of your answers based on perfect math. You just have to make a bunch of reasonable decisions. And a lot of what we do is keep you off the landmines, and what happens a lot of times is that when you're married, you keep kids or just run in the business, you can be up to your eyes and everything that you need to do, and you take your eye off of some of the things that are necessary to prepare you for success to take tomorrow and far off in the future, and it's my job to work with that.
Speaker 2:And then, obviously, the business owners are dealing with a lot of different professionals.
Speaker 2:So if you think about running a business, you could be dealing with a real estate professional.
Speaker 2:You may have asset managers, you may have your lenders, you may have a CFO, you have your accountants, you have all of your attorneys, your estate, your corporate, your IP attorneys, you have your insurance agents, you have your M&A people.
Speaker 2:You have all of these different professionals that are working.
Speaker 2:So, in addition to having to run the business, in addition to having all of those family duties, then you also need someone that's going to be able to start having these conversations and making sure that all these other really talented professionals that you have on your team are all working and pushing you in that same direction. And having a really qualified financial professional gives you a partner there that speaks all these different languages and can help making sure that your account is talking to your estate planning attorney, is talking to this other professional and making sure they're all pointing in the direction so that you can have autonomy over your time and have the highest and best use of that which is again being more present today, for whatever is important for you be that family, be that charity, be that cause, be that the business. Whatever is the highest and best use of your time, you can focus on that and you can have someone else that is a partner with you, helping you give back more of your most valuable asset, which is your time.
Speaker 1:Those are all. It's great, but that's what we need it. I guess. The first question I'm going all the way back to the beginning. When you decide to start working with a client, how often do you have to really start from the beginning with them about vision and purpose and so forth, or do they come pretty much prepared, ready to go?
Speaker 2:I would say that a lot of our the majority of our clients need help with that right. When they come to us they are at this point of where they realize they have enough complexity to start working with a professional and they need some help. They can't just do it themselves. They are best served working with someone else to be able to do that. But very rarely have they mapped out at long term planning. That's not to say that you only have to think about if you're a 40-year-old business owner. You only have to think about what it is like when you're 65, because I'm much more concerned about funding my two younger children's college education right now and trying to get out of my business.
Speaker 2:We work with that short term, but a lot of times you'd be surprised that when you sit down with a married couple they may not always be 100% on track with even I'm going to pay for all of my kids' college education. I'm going to pay for some of my kids' college education. We need to get real clear. We know I know from experience a lot of times when you have an entrepreneur and a spouse Mary's running a successful business, bob may not have that same entrepreneurial mindset. Part of what we're trying to do is bridge the gap and make sure that you might have the risk of taking entrepreneur, but that, at the same time, that the non-entrepreneur feels safe and protected and taken care of and their views are being managed when a lot of their net worth ends up being in this business. We're trying to work through that as well. A lot of times they don't have, they're not super clear. Before we can really start taking steps forward, we again have to make sure that we know the destination we're working towards.
Speaker 1:Sounds like you've also got to be somewhat of a counselor in that process. That's got to be somewhat difficult to be able to bridge that gap, but that is all-encompassing One of the things. God, who was I talking about? I can't remember who I was talking to about this, but we were talking about when you have a spouse, a spouse is starting a business. As entrepreneurs, the divorce rate is like less than 10%. But then when you have one spouse that starts an entity and the other spouse is not involved, I think it grows by anywhere about six or seven fold for the divorce rate. How often are you having to go through that type of process with a client when things go awry? No, I don't have a hard time. I don't know if I should answer. Thank you, thank you.
Speaker 2:I think that money is one of the largest problems that you have in any marriage, right, it is not having proper communication. So, ideally, the conversations we're having are minimizing that for us and, admittedly, by the time a client is working with a financial advisor, they typically have some sort of stability and hopefully we're keeping them off of the rocks as we go through here. So not necessarily dealing with a ton of that quite honestly, but that is true, like when you talk about being a counselor, right? So all of this revolves around their personal finances and I always say it's much more personal than finance and that's what people need to understand when we're having these conversations.
Speaker 1:So once you start helping the entrepreneur or the small business owner with that vision and getting that through and putting in writing and getting that, if you want to call it a flow chart put together what would be the next steps that you would help Johnny business owner with.
Speaker 2:Yeah, so once we get clear right, then we're going to start taking the, we're really going to start putting together all of the instruments that they may have going on in their life, right, and they may have some insurance policies, they may have an old 401k or an IRA or some other investments or real estate or some of these things in addition to the business, right. And so we're going to gather all of that information in and then we're going to assess that, we're going to get really clear on the details of that and then we're going to the next real step is educating the clients. And so some clients are very granular and want to get very in the weeds and understanding those things, and we want to make sure that they have enough information to do that. Quite honestly, more of the business, more of the clients that we deal with, they tend to be their CEOs of the business. They want to be CEOs of their personal life, and what we want to do is we want to provide them enough information so that they feel like they, they are good to make a final decision. We'll go this is what you have. If you want to do X, y and Z, this is what we recommend. This is why we recommend it. And if they have more questions, obviously we want to answer those. But we want to give them enough information to empower them to go yes, do this and a lot. And so then, once we begin educating, they make some decisions.
Speaker 2:We're going to begin implementing those plans and I would tell you that you typically cannot snap your fingers overnight to get everything done that you want to do. It is a process. The value is not in the actual financial plan, it's in the, it's in the planning process and, typically, the implementation stage. You're going to have an initial implementation stage. It could be three or six months, where we get a lot of stuff done upfront, there's a low hanging fruit, and then we'll begin turning this giant ship that you have that is your financial life, and it could take three to five years to do everything that we have on the initial punch list to do right. And we're going to create a timeline of what makes sense for that, because they still have to run their business and they still have to be great parents and great spouses and do all the other things that's important to them. They can't drop all those things for them to do the to go get the estate plan done and the business continuation and everything else that we need. That we identify upfront and so we're going to create a priority list. We're going to triage that and then begin to assist them to get that done, either through their own professionals or guiding them to qualified professionals that can help them get the estate plan done.
Speaker 2:So while we understand I understand estate plans, I'm not a turn. I'm tax. While I'm tax aware, I'm not their CPA right. So we have to work as part of this team to get all of these things done on their behalf and a lot of it's having some accountability to someone that they're going to do it right. So they said, hey, this is what we want to do, and a lot of business owners find a lot of value in coming back to it and going, oh yeah, I said I was going to do this, I didn't do this.
Speaker 2:Let's make sure that we you know like we get it done someone that's going to hold them accountable, because, as CEO of the company, a lot of times people nobody's holding them accountable except themselves around the house, you know, then nobody's holding necessarily holding them accountable to get that estate plan done. And that accountability piece I think is a widely overlooked value of having a good financial advisor. Now, certainly there are some people out there that go I'm going to do these 10 things. They get those 10 things done. Bless those who can just do everything that they want to do whenever they want to do it and don't need a little push every now and again. But that push can be super helpful for someone who's as busy as someone running a business.
Speaker 1:So how do you balance the 30,000 foot view as a CEO and then the intimate piece of being part of their personal life? Because I think there's. You said that some of them are looking for that 30,000 foot view or the CEO level view. But when it comes to your financial and this is just me personally, so I can be wrong I'm okay, but when it comes to your financial life and being, do you think that there should be some type of intimate touch other than just a 30,000 foot view? Say, okay, that looks great, let's go. I want to at least see some of the details to get me what got us there, but it sounds like there's more and more people that are not wanting to do that. Am I right?
Speaker 2:So if you're talking with someone that at the end of the day they tell me that I want to be able to walk away from my business and make work optional at 60. I'd say that way we talk. I want to be able to make work optional at 60. I want to be able to put my two kids through college, I want to be able to donate to charity, I want to be able to buy that vacation house in Hilton Head, whatever. All those pieces that they've told me are important to them. If they just know that they're on track to do that with everything that they're doing and we're handling the lifting, that we've made sure they have the insurance policies and the investment allocations properly and they're putting the right type of money into the right. They've set up the right retirement plan through their business and they're contributing the right amount of money and they have the right benefit plan and they have the right estate plan, the right legal documents.
Speaker 2:Behind all that, a lot of them just want to know that they're taken care of and that they can get what they want.
Speaker 2:And so we review that, we take them through our planning software and go you're on track.
Speaker 2:What we need to do to get you on track is X, y and Z, and then and it doesn't happen initially, but over one, three, five years of working together there's a level of trust that is established so that again, they don't have to think about oh, is my investment allocation exactly right?
Speaker 2:They just know that Chris has taken care of that for them and that they're on track and we've done everything. We're doing everything that we can, and it's a lot. It's a big conversation about making sure that the dream today is still the dream that they had three, four years ago when we talked about it. Right, and something that we've started working on more is trying to do more outside of our review meetings. That is, the more granular detail walk them through a portfolio review, stuff like that, and then making sure that our meetings are more focused on the big picture stuff and making and helping them get even more clear or make more adjustments as they get older. Because I know, if you would ask me, today versus six years ago, my goals are different than the even five, six years ago and we're continually changing and we have to continually change our map, accord.
Speaker 1:So another question is I'm a small business owner, me somebody. I'm just using an example. When do we really sit down and start engaging with somebody like yourself to help us on all these different aspects of our I would call it personal our whole life, it's all encompassing. Is there a specific point we should look at or start considering? I know sooner is better than later, but some entrepreneurs in the beginning two, three years first, several years are struggling financially. So can they one afford being able to work with somebody like yourself, but two can they not. Are they risking their business by not working with you? So that's a fine line that we balance. But what would be a good entry point for somebody like yourself?
Speaker 2:Yeah, and so I think that at least speaks a bit to the changing dynamic of what my profession looks like and the different fee models. We've changed our. I've personally changed my fee model to better align with business owners. That may just have a lot of the business owners I work with. They're sitting 90, 95% of their net worth is sitting in that business. The traditional financial advisor, where we charge you a percentage of assets under management but you only have $100,000 to manage, doesn't work for a lot of those financial advisors and but I think that there's enough complexity a lot of times in those business owners that they could need some help right For me there's a lot of.
Speaker 2:I love just talking to business owners. This is not just a profession, this is a calling for me and if their, if their lives are so, so simple to just be able to say, hey, do A, b and C, I will just tell them you can think about doing A, b and C, consider these things, and then, once you've gotten to to this point of complexity, then come back and then it makes sense to to work with. I don't know that there's necessarily a crossing point when you realize that there are things you feel like there are things that you should be doing. You just don't have the time or you just don't have the willingness to go do it Is, for example, I could go do my own taxes, right? It's not like there's not some magic book that CPAs have. The fact of the matter is, though, like I'm best used, the highest and best use of my time is hiring a CPA to do. I'm a big believer in trying to get and getting really clear on what it is that makes me happy in my highest proficiency, and then hiring people to do the rest of it, understanding that not everybody is there, right?
Speaker 2:If you're at that point where you're like I'm not sure I'm going to make it through the next six months, then working with a financial advisor maybe doesn't make the most sense. Right, because you need to devote all of your efforts towards getting that business. But if you've gotten to the point where you're past oh my God, am I going to make that? Am I going to make payroll the next six months, or I'm going to have a going concern over the next six months. Once you've gotten past that point, it's a good time to start talking with a financial advisor, and if you're talking with a good one. They will if you're not the right size for them. They have several referrals that they can go.
Speaker 2:Hey, do this Some people might do well with. Just like a coaching program initially right versus financial, before engaging a full financial advisor. And so there are coaches that I can point them towards. Hey, this might make sense for you now, until you get to get to this certain complexity, and then I also have a certain portion of my business where, if I just find someone I just really want to work with and doesn't my model, we'll figure it. We'll figure it out just because I think I'm excited about working with Because, at the end of the day, I want to make the highest investment use of my time I just want to get excited about the people that I work with. I'm fortunate in that every person that I work with you know really raises my energy level when I get it.
Speaker 1:That's awesome because you can truly see that it's a calling for you and you want to make sure small business owners, entrepreneurs, are being taken care of and planning. There's not a lot of people that do that, and I'm not just talking about in your space, it's just a lot of people don't find that calling, wrapping it back to the beginning and then we'll land this. But I know you were in insurance and you found your way into the space, but what truly drew you in as a calling? I mean, what got you there? Was there an event or something that happened that drew you into the space?
Speaker 2:Quite honestly. I ran I was partially ran in insurance brokerage and so it happened to be that our lead system was generated through what are called mortgage leads. So if you closed the market we can talk to them about. Did they want to buy life insurance to cover that mortgage? And then, as the great financial crisis hit in 08 and that caused a lot of problems for that sort of lead generation and that whole piece, I had made good money but I didn't do any personal finance plan. I didn't have a financial planner working with me at that point and I came out of that in really bad shape.
Speaker 2:It's understanding that the business owners get so engrossed in trying to run that business that they think that the faucet will never dry up and it could and other things could happen, whether it's death, disability, partnership breakups, all these different things. And so, again, for me it's like I like dealing, I like helping people, and so you can help people. I think much more fully in the financial planning area. Having made some bad decisions in my earlier life, I also understand that. So, again, I don't come from a wealthy family. Like I've gone up and down, like I understand how my money scripts growing up messed me up when I was earlier not identifying that. So really what we're just trying to do is help clients solve for a lot of these blind spots that it's easy for us to have or to ignore because things are going so well in here that we compartmentalize those other things and somebody needs to be looking over these things over here. We can't just push them in the closet forever.
Speaker 1:Yeah, putting your head in the sand is not probably the best thing to do in life. And then, just overall, are you currently taking any clients on at this point in time?
Speaker 2:I am taking clients on, and the Zoom world has allowed me, so I work with clients all over the country. There is no limitation on where or whom.
Speaker 1:Okay. Is there a particular place you'd like people to reach out to if they're interested in working with you?
Speaker 2:Yeah, they can go directly to my website, buildingtowardswealthcom, up in the right hand link. You can book a call with me directly. You can also read some of my blogs and videos on there to see whether or not there's a good feel for some partnership there. Right there List of the type of people that we're looking to work with those Gen X, gen Y business owners that want to have more control, more autonomy over their time. People that are in abundance mentality Like we want to be able to help those people and they just want to be able to again be more present in what's really important. Money is just a tool for us to get what it is that we really want out of life. It should not be the sole reason, and understanding what is enough and how to get to enough is, I think, super valuable for anybody in this life.
Speaker 1:But also being able to take that money and have that enough and be able to help others through that and know that good deeds are always replaced with another great blessing or a deed that comes back to you. I'm not saying to do it because of that, but it truly does the more you can give. I feel better when I give more than I take it just I guess maybe that's just a human reaction for me or whatever. But yeah, that's a beautiful thing to get there where you have an abundance and it overflows to help others.
Speaker 2:Absolutely. I think if we think more about we in this world and a little less about me, we're all going to be better off.
Speaker 1:Yes, sir, thank you for coming on. It's been a great conversation. I will put in the show notes the link to your website so people can get ahold of you. It's been a great conversation and thank you for sharing some insight because a lot of people are probably not. Probably they are looking for a financial advisor like yourself. That is a calling. It's just not a lot of financial advisors put it out there like what you're doing.
Speaker 2:Thanks for having me on here. It was a pleasure. You're welcome.
