Lawyer Money Mastery: Crushing Debt, Building Wealth with Darren Wurz
Jul 23, 2024
Brian Glass
Imagine trading in those endless hours for financial freedom and a life you actually love. That's the reality Darren Wurz, a.k.a. The Lawyer Millionaire, helps ambitious lawyers achieve. Darren, a former teacher turned financial guru, knows the struggles lawyers face. He's here to smash the cycle and show you how to build serious wealth, even if you're drowning in student loans or yearning for early retirement.
Whether you're a fresh-faced graduate or a seasoned pro, Darren's got your back. He'll share proven strategies to conquer debt, so you can finally breathe easy. Worried about retirement? Darren will show you how to turbocharge your savings and unlock the secrets of IRAs. Law firm owners, take note! Darren dives deep into strategic financial planning and exit plan secrets, transforming your business into a profit machine.
Forget fancy suits and confusing jargon. This episode is packed with actionable advice you can use today. From finding your niche and dominating the market to mastering the art of balancing debt repayment with smart investments, Darren will equip you with the knowledge you need to succeed. He'll even explain why working with the right financial advisor – a fiduciary who puts your interests first – is crucial for your financial future.
Darren flips the script on investment fear, showing you how to view risk as an opportunity, not a hurdle. He'll also guide you through integrating your personal and business finances for ultimate control. This episode is your roadmap to financial freedom, a life beyond the endless billable hours. Hit play, design the life you deserve, and ditch the briefs for good!
Still hungry for lawyer wealth? Darren's got your back at lawyermillionaire.com! Snag his book, listen to his podcast, and conquer your finances. Hit play and win!
____________________________________ Brian Glass is a nationally recognized personal injury lawyer in Fairfax, Virginia. He is passionate about living a life of his own design and looking for answers to solutions outside of the legal field. This podcast is his effort to share that passion with others.
Imagine trading in those endless hours for financial freedom and a life you actually love. That's the reality Darren Wurz, a.k.a. The Lawyer Millionaire, helps ambitious lawyers achieve. Darren, a former teacher turned financial guru, knows the struggles lawyers face. He's here to smash the cycle and show you how to build serious wealth, even if you're drowning in student loans or yearning for early retirement.
Whether you're a fresh-faced graduate or a seasoned pro, Darren's got your back. He'll share proven strategies to conquer debt, so you can finally breathe easy. Worried about retirement? Darren will show you how to turbocharge your savings and unlock the secrets of IRAs. Law firm owners, take note! Darren dives deep into strategic financial planning and exit plan secrets, transforming your business into a profit machine.
Forget fancy suits and confusing jargon. This episode is packed with actionable advice you can use today. From finding your niche and dominating the market to mastering the art of balancing debt repayment with smart investments, Darren will equip you with the knowledge you need to succeed. He'll even explain why working with the right financial advisor – a fiduciary who puts your interests first – is crucial for your financial future.
Darren flips the script on investment fear, showing you how to view risk as an opportunity, not a hurdle. He'll also guide you through integrating your personal and business finances for ultimate control. This episode is your roadmap to financial freedom, a life beyond the endless billable hours. Hit play, design the life you deserve, and ditch the briefs for good!
Still hungry for lawyer wealth? Darren's got your back at lawyermillionaire.com! Snag his book, listen to his podcast, and conquer your finances. Hit play and win!
____________________________________ Brian Glass is a nationally recognized personal injury lawyer in Fairfax, Virginia. He is passionate about living a life of his own design and looking for answers to solutions outside of the legal field. This podcast is his effort to share that passion with others.
Law firm owners don't want to exit. We don't want to think about exiting. Maybe you do just love what you do so much that you do want to just die at your desk, but I doubt that you want to be billing 80 hours a week when you're 90 years old, right?
Speaker 2:
What's going on, friends? It's Brian, and I want to welcome you back to Life Beyond the Briefs. You ever feel like your bank account is perpetually on life support and your social life consists of arguing with clients and microwave meals? Well, listen, I've been there and done that, trust me. But guess what? Today's episode is all about financial freedom as a lawyer. I'm talking about ditching the grind and building a life that you love, one that doesn't revolve around billable hours and living paycheck to paycheck.
Speaker 2:
Joining us today is none other than Darren Wirtz, the lawyer millionaire himself, and Darren is going to be our financial sensei, dropping knowledge bombs on how to crush student loan debt, build serious wealth and maybe even retire early. So grab a pen and paper, because this is an episode that is chock full of golden nuggets. Let's get financial and build your dream life beyond the briefs. Here we go. What's up everybody? Welcome back to the show. Today's guest is Darren Wurtz of Wurtz Financial Services. Darren is the host of the Lawyer Millionaire and the author of the book by the same name, and Darren and I are here to talk building wealth for lawyers inside your business, outside your business, and how we make that transition from active practicing lawyer to retired happy lawyer on the beach. Darren, welcome to the show.
Speaker 1:
Hey, thanks for having me. Brian, Glad to be here.
Speaker 2:
So how did you find lawyers as a niche? How did we end up?
Speaker 1:
here? Great question, it's kind of a long story. I wasn't always a financial advisor. In fact, my first career was in education and perhaps that helps me because it gave me some great tools for how to talk with clients and a lot of what we do is educating. But yeah, out of college I wanted to be a teacher, so I did that for five years. The family business is financial advisory, so my dad was a financial advisor, his dad was a financial advisor, so dad will always wanted me to come into the business. I resisted that for a little while but then, you know, as I kind of got a little bit older, I saw the wisdom and into coming into his line of work. So I did that. But I did that down in Cincinnati, started a local office there.
Speaker 1:
I was originally from Toledo, ohio, and I was a generalist for many years. I started. First of all, I started with nothing. I mean, you know, zero clients, so I can relate to law firm owners who've had to strike it out on their own, you know and have that courage to build a client base. I think my first year I made $28,000. So that was fun and it wasn't 1970.
Speaker 1:
No, no, it wasn't. It was like 2015, something like that. Anyway, yeah, so I can relate to the struggle. I've been there. It wasn't law firm owners until probably like 2020.
Speaker 1:
Started focusing in the legal sphere around 2017. And that came about because I, as a business owner, knew that in order for me to be successful, I needed to have a specific niche that I was focused on in order to stand out. I mean, there are so many financial advisors, there are so many investment advisors to choose from. It's very, very difficult to stand out and great. This is great wisdom for law firm owners.
Speaker 1:
You know I think you talk about this with your clients as well the importance of having a specific market that you're going after. There's a lot of reasons for that. We can go into that, but I basically just looked at my book of business once I had built a book of business for common themes and I noticed that many of my clients were lawyers. So I said, okay, let's do lawyers. It was really that simple. But the cool thing about it was when I actually dug deep and I actually learned. I was like wait a minute, no one is doing this there are no financial advisors talking to lawyers, I was like, okay, maybe there's something here.
Speaker 1:
So that was revelation number one. And then revelation number two came about. As I was getting more involved in the legal world, I found law firm owners and they're just such an exciting group of people to work with within the legal community because they're business owners and they have a lot of those business owner challenges but also business owner opportunities, and so the planning becomes a lot more interesting. It's a lot more ambitious, a lot bigger ideas and it's just a fun group of people to work with ideas and it's just a fun group of people to work with.
Speaker 2:
Well, and there's many more opportunities, you know, to structure something for a business owner than there are to structure it for the W-2 employee or the non-equity partner, right, so that makes a lot of sense. What I like about that story, Darren, is so many people who are in the legal niche, non-lawyers who are in the niche, be it coaches. There are not many financial advisors, SEO vendors, agencies, things like that. Like they picked lawyers because lawyers are a high profit niche, but you, you reverse engineered it out of. What does my book of business look like? Who am I already helping and then how can I help more people that look like them?
Speaker 1:
If I could just add a caveat there, not all lawyers I mean some lawyers do make good money, but I know a lot of lawyers that are still very much on the struggle bus, and so we're trying to help them not just grow their wealth, but also grow and expand. How do we queue it up to the next level? So it's easy to make that assumption.
Speaker 2:
Well, from the outside, right From the outside, it's like what kind of car do you drive, how nice are your suits and where are your vacations on Instagram? But you've been inside the books, as I have right, and you go. Dude, you are not who you are maybe portraying to be, or some of us need a little more help than others.
Speaker 1:
Well, you know, even if you have the nice car and the nice suits and the million-dollar house, what I have come to find and realize is you may not have the million-dollar portfolio, and there's where the problem lies, and so we try to rectify that and try to help those individuals. You might be making a lot of money, but you haven't been able to maybe accumulate a lot of money, and so we try to help law firm owners figure that one out.
Speaker 2:
Let me ask you this because, as I started this podcast, I kind of looked around the space and tried to figure out who is doing financial education for lawyers. And you're right, when you look at financial education for doctors or for dentists or for realtors, there's tons of people doing that, but there really are. You're one of the very few who are doing it specifically to lawyers. Do you have a sense of why that is? That's?
Speaker 1:
a great question. I think maybe there's an assumption that lawyers just they're smart so they can figure it out right and many do, and I've noticed that a lot of lawyers and law firm owners are kind of DIY people when it comes to their finances, and that's great.
Speaker 1:
But there are many who aren't, and there are many for whom it's overwhelming and it's too much and they don't want to deal with it right. They want to be focused on their law practice. I'm actually the same way. I would much rather be helping law firm owners with their finances than looking at my own finances. Just admit this right. So yeah, I think maybe there's an assumption that there are smart people and so they don't really need a whole lot of help, but that's not the thing about it. Doctors are smart too. I'm not sure.
Speaker 2:
You're kinder than I am, because I was going to say it's because lawyers don't listen and we go read the book when we assume that we know everything that there is to know about financial planning and tax right. Okay.
Speaker 1:
Okay, yeah, perhaps there are some like that, yeah.
Speaker 2:
All right. So listen, we've got a broad swath of listeners on this show. I have everybody from law students to recent law grads to law firm owners. So let's kind of start at the beginning. If you're getting out of law school, let's say you have $150,000 of student loan debt and you don't have a house, don't have any retirement funds. What are the first couple of things you should be doing when you're getting that first paycheck?
Speaker 1:
Oh, yeah, Okay. Well, if you read my book, I'll tell you all about this and we walk through this in the book, through the different stages, right. So we start at the very beginning and there's a couple things you got to get right right off the bat. Number one you need to understand your cashflow and you need to set up a budget right away, just from the very, very beginning. And you know, start early with good financial habits, right, Living a little bit below your means. Don't go and buy the best car you can buy, the best house you can buy on your credit, right. Just go a little bit under that and pocket the difference or put that difference into your retirement funds. Because, guess what, it's a lot easier to start there and not expand your lifestyle so aggressively than it is to, once you've expanded your lifestyle very aggressively, to then dial it back. That's very, very difficult. Very aggressively to then dial it back, that's very, very difficult. It's very difficult to have a conversation with a client where it's like, okay, you probably need to sell your house because you can't afford the $3,000 a month mortgage, right, that's a very difficult conversation to have. So, yeah, you have to be able to start with the good habits early on. That's number one.
Speaker 1:
Once you have that budget put in place, you've got to balance paying off the debts, because you may likely do have, as you mentioned, a lot of debt from law school with B investing Okay, and that's a very difficult balance. I see a lot of law firm owners make the mistake of neglecting investing completely until they've paid off all of their student loans, and you know there are pros and cons on each side of the equation. Right, If your student loans have a very high interest rate you know, at least you know 10% or more then you should probably be very aggressively paying those down in particular. But I just am of the opinion and of the belief that it's important to invest even while you're trying to pay down your student loans, and here's why the word is opportunity cost. So, yes, you could earn more in the market and there's a risk there that maybe you won't. But there's also the possibility that maybe the market does something extraordinary and you miss out on that completely. I mean, just look at what the stock market did between 2020 and this year.
Speaker 2:
Well, yeah, between 2020 and 2022, or March of 2020 and June of 2020.
Speaker 1:
Yeah, so there are aggressive moves that can happen, and the only way that you're going to really be able to participate in those things is if you're putting some money into your investments muscle proposition, because if I've got student loans that are you know, I think your federal loan is probably like 8% or something like that.
Speaker 2:
right, well, market historically is returning somewhere around 8%, which is basically a wash, and so, yeah, I mean there's upside opportunity, there's downside possibility. But I kind of think of that in terms of flexing the investment muscle, like just getting into the habit of sending $100 or $200 or $300 a month into an investment account. How do you think about that?
Speaker 1:
Yeah, I think that's a really great way. Yeah, get that habit, as I said earlier, the financial habits. Starting that financial habit earlier, early on, where you just have something going into your investments on a regular recurring basis, that's just, it's a great place to begin. Yeah, you mentioned 8%. Yes, that's the long-term right, but you have stretches of time where returns have been in the you know 12% range. You know so. Or you've also had time periods that was much less, you know so.
Speaker 1:
A big function of that equation is how much risk are you willing to take versus how conservative are you? And I think therein is another thing, because I think a lot of law firm owners and lawyers are trained in law school to think about risk as as a problem and to find as many ways as possible to absolutely minimize risk. Well, in the investment world, risk is actually opportunity. Risk is actually good to a point. Right, there's some specific risk that may be not so great, but market risk is actually opportunity. Risk that maybe not so great, but market risk is actually opportunity and it it really is a function of volatility that you know.
Speaker 2:
The actual risk of true like total loss is pretty low unless there's, like you know, nuclear war or something right, in which case you know, if you don't have gold and guns, like it doesn't matter what you invested in.
Speaker 1:
Right, right. It's over for all of us at that point, so yeah.
Speaker 2:
All right. And so let's take the lawyer who's kind of in the middle where we got student loans paid off, Maybe we have a nice single family house. We're investing in our 401k at least enough to get a match. What things do you see a lawyer who's in their early 30s not looking out for and not doing when you start working with them?
Speaker 1:
Well, there's a couple of different groups of people, so we could first talk about lawyers, perhaps at a big firm or something like that. At this stage of the game, you should really be trying to take maximum advantage of your 401k, and everyone thinks about maxing it out, right? That's one thing, right. But then there's also different things you can do inside of that 401k. So many 401ks, in addition to the regular pre-tax contribution, have the option to do a Roth contribution, and I actually think that's very, very valuable over the long term to have as much of your money in the Roth side of things versus the pre-tax.
Speaker 2:
I know a lot of CPAs would disagree with me on that perhaps, but Right, right, well, because they're trying to show a better return in 2024 and you're thinking about 2054, maybe.
Speaker 1:
Right. So maybe you're kind of like your 30s or 40s You're not your thirties or forties, you're not quite at your peak earning years yet. You're not quite in those upper echelon tax brackets just yet. You should really be trying to max out those Roth opportunities. And then 401ks often do permit you to make after-tax contributions up above the employee limit where you know, in tandem with your employer's contributions, you can really be putting 70 000 plus into your 401k a year. That that is very, very doable. So I think that's one thing.
Speaker 1:
But behaviorally, once you get to that stage of your life, that's when people start to really expand their lifestyle. So once you've, you know, paid your student loans off, great, now try to redirect that stream of income into your investments. Perhaps this could also be the stage at which you have kids, so maybe you're thinking about college planning. One of the most powerful things you can do for your kids if they're working is to set up a Roth IRA for them and put money in that Roth IRA for them. Because if money can compound for your kids over a 30, 40, 50 year time period, it can experience 10 fold, 20 fold growth over that timeframe. So you could really be setting your kids up for tremendous success in the future by setting up a Roth IRA for them with their earnings.
Speaker 2:
Right, and I'm glad that you said with their earnings right, because as a bona fide Roth IRA contribution, they do have to be making some money.
Speaker 1:
Yeah, now you could swap it out. Right, let's say they earn 6,000. Yeah, you have them put 6,000 in a Roth IRA and then you know, you have them keep, you know, give them 6,000 so that they actually keep it. So you're kind of the one that's putting it in for them, you know, but they have to actually make that amount of money.
Speaker 1:
And that's where being a law firm owner is super powerful, because you could employ your kids in your practice. You know, have them come in and clean up, or you know, do some work, you know, throughout the year, and then pay them and here's the magic that's tax deductible to your business, it's tax free to them up to the standard deduction, and then you can put in the Roth IRA where it can grow tax-free and then get tax-free earnings.
Speaker 2:
Yeah, so you've made people's head explode with that one. So say that again slowly, so I can bring my kid on as an employee doing bona fide work right, copying, licking envelopes, that kind of stuff. I can pay them up to the standard deduction, which is.
Speaker 1:
It's tax deductible to your business, so you get a write-off. They report it on their taxes.
Speaker 2:
But they don't make enough money to pay taxes.
Speaker 1:
They're under the standard deduction, so they're not making enough to pay any tax on it. And then you turn around and put that money in a Roth IRA.
Speaker 2:
That's really powerful. And then, because the Roth IRA is quote post-tax, even though they haven't paid any tax on that money, it now grows tax-free into perpetuity or until the requirement and distribution at 70 or so. Right, that's right. That's a crazy tax hack.
Speaker 1:
It really is Triple quadruple. I don't know something like that. The other really powerful thing, as you start to make more and more money. So let's talk about law firm owners specifically. One of the big struggles that law firm owners have is that their income fluctuates, right, some years are great, some years are not so great. Well, this is actually a tremendous opportunity, and here's why Because you can time your income and let me explain what that means for taxes right?
Speaker 1:
So when we do tax planning, it's all around the timing of income and the way you manage your income is through whether or not you're making these different retirement plan contributions. So if you have a really, really tremendously great year that's a year where HSA, other tax things you can do In the year, then that you have is terrible, right? Thank God you had a terrible year. And here's why because you can then, in that low income, also low tax bracket year, take money from those pre-tax accounts and convert it to your Roth accounts. So a Roth conversion. What happens when you do a Roth conversion is you take money in your pre-tax accounts. You're going to pay the taxes on it now to be able to put it into your Roth. But the advantage is if you had left it in the pre-tax. It's going to grow, grow, grow, but then it's all taxable down the road.
Speaker 1:
In the Roth. It's going to grow, grow, grow, but then it's all tax-free down the road, so that's a huge opportunity. So those bad years are actually really, really great for that reason. Depends on who you ask.
Speaker 2:
For that reason, yeah Right, so using using real dollars like, let's say, you have a um. To flesh out this example, if you have a year where you're earning 500,000, right, your effect, your, your those last dollars are coming in at like a 39% tax rate, and so you can shelter some of them by putting them in a 401k. But then if the following year I only make 80, right, a really, really bad year I can pull that money out. And what tax rate am I paying on the money that I'm pulling out of the 401k in a crappy year?
Speaker 1:
It would depend. So I mean, if you pull out 500,000 from your IRA, then you're going to go up back to where you were.
Speaker 2:
But let's say you were Right, so you wouldn't do that.
Speaker 1:
Right, let's say you only did like 20,000 or so. Then you're going to be I think that's either depending on if you're single or married, filing jointly you're going to be in the 15 or 22% bracket, so you could essentially put it in the 401k. In that year you're in the, let's say, 37 percent bracket, that you're going to save 37 cents on the dollar, and then in the year you're in the 22 percent bracket you're going to pay 22, 22 cents on the dollar.
Speaker 2:
To put it in your roth, well, you just basically made, uh, 15 cents on the dollar, basically in that equation this is one of the things that's wild about the tax code is if you earn a dollar on December 30th, it can be treated just incredibly differently than the dollar that you earn the next year on January 2nd. And as law firm owners you know January 1st you're always starting back at zero. There's no revenue and there's no profit in the business, and that very first payroll on January 2nd or 3rd or whatever now we've lost money for the year.
Speaker 1:
Right, and that's why it's so critical to be up to date on your numbers and to be constantly reviewing your numbers. Do you have a profit and loss that you are reviewing on a regular basis? Because then in December what you can do is you can say, okay, we've made enough money, let's bill the clients in January right.
Speaker 1:
Let's push it off into January, let's accelerate the income into next year or for expenses. We've made too much money this year. Can we prepay our marketing company for next year? This month your marketing company is going to be like yeah, heck yeah, you can prepay for the next 12 months and meanwhile you're going to be shifting expenses into the current year to try to lower your tax burden in that high income year.
Speaker 2:
All right, now let's go super advanced. Let's talk about the law firm owner that's doing well and they're thinking about doing some other things. They're thinking about buying the office space that they're in for some tax relief, thinking about maybe doing an MSO or something like that and running the marketing over here. Where is the tipping point for?
Speaker 1:
you where somebody should be spending time, energy and money on an advisor to be thinking about all of these level 400 things. Yeah, it's really a cash flow question because once you have the cash flow, you should be able to pay for the team, to have the team in place and the team's going to be able to help you. I was just talking with somebody about this last week and one of the things I've noticed the really successful law firm owners have a team. They have a team of advisors. They've got business coaches, they've got sales coaches, they have accounting people, financial people, they have multiple financial advisors. They have that team in place and do it early. One of the biggest things to think about is exit planning.
Speaker 2:
Okay.
Speaker 1:
You've got to think about exit planning. I know exit law firm owners don't want to exit. We don't want to think about exiting.
Speaker 2:
Lawyers want to die at their desk.
Speaker 1:
Yes, yes, well, that could be two things. Number one maybe you do just love what you do so much that you do want to just die at their desk. Yes, yes, well, that could be two things. Number one maybe maybe you do just love what you do so much that you do want to just die at your desk, but I doubt that you want to be billing 80 hours a week when you're 90 years old, right? So exit planning does not necessarily mean oh crap, I can't be a lawyer anymore.
Speaker 1:
Exit might mean you exit from the day-to-day operations into a leadership role or into an ownership role, and you have a leadership team in place. So, yeah, you can have a CEO. When, why shouldn't you? You know you you're running a business. You can have a CFO, a CEO, a COO, right, you can have a whole leadership team. You can have a board of advisors, a board of trustees. There's no reason that you shouldn't run your business like any other business.
Speaker 1:
And one of the things that I want to really emphasize for law firm owners is that exit planning is now. The reason exit planning is now is that businesses that are transferable, that are transition ready, are the most profitable businesses and the most enjoyable businesses. If you've set up your law firm in such a way where you have systems and you have teams in place and the work is being done and you have freed up your time, you're going to be more profitable and you're going to enjoy life a whole heck of a lot more. So exit planning starts now. It doesn't start when, oh you know, I'm 70 and I think I'd like to retire next year. It's too late for exit planning. Exit planning needs to happen much, much earlier.
Speaker 1:
And exit planning isn't just about I'm getting ready to leave my firm Exit planning. The process of exit planning isn't just about I'm getting ready to leave my firm Exit planning. The process of exit planning and thinking about setting up your business as a transferable asset. That process, in creating an entity that is transition ready, is going to position you either to exit or to grow. Really, if you want to hit the next level of growth, you really have to establish an infrastructure and a machine that could be transitioned to another owner, whether you transition it or not.
Speaker 2:
Well and that's the beautiful part is creating the option right, because the last thing that you want to do is wake up at it doesn't have to be 70, wake up at 50 and decide I don't want to do this anymore and not have the systems and the financial reporting and the processes in place where you even have something that's saleable. Yes, so, okay. So I'm a couple of years into my practice. I own my, my firm, and I'm hearing for the first time ever like I should have these structures in place. What is apart from reading your book? What does one-on-one look like for working with somebody like you? How do I even vet a guy like you?
Speaker 1:
Oh yeah, vet, a financial advisor, yeah, okay, I'll give you some great things to look for. Number one most fundamentally is and there are exceptions, right but here are some general things that generally, I would advise people to look for. The first thing is make sure that whoever you're talking with is a fiduciary. You may have heard that word before, but fiduciary means someone who is legally, legally obligated to act in your best interests alone. The old way of doing things was that financial professionals would sell you a product, they would sell you a mutual fund, they would sell you an annuity, and there are still some people who do that, and some of those are great people. You know, I don't want to. You know bad mouth people who still operate under that model. But there's inherent conflicts of interest because they are inherently incentivized to sell you products.
Speaker 2:
That's it. There's no commission Commission-based Right. They're selling you an insurance product and raking a commission and sometimes not disclosing that where there might have been a better product fit for you but they would have made less money. Is that what you're talking about? That's?
Speaker 1:
exactly what I'm talking about. It irks me to no end that people are still buying annuities Stop.
Speaker 2:
What do you buy instead? So let's say, I want a steady stream of cash and we'll come back to how do we vet. But I want a steady stream of cash flow, but you don't want me to buy an annuity. What else should I buy?
Speaker 1:
There are fee-based annuities, so there are yeah, yes, you could buy an annuity from XYZ insurance company and they're going to have a 10 year surrender period where all it's completely liquid from day one and instead of a commission being you know, instead of well, in addition to the commission, there's usually like two or 3% mortality and expense charge. That's happening every year. So, like, nationwide has a product that's $25 a month, no matter if you have 50,000 or 5 million in it. So, yes, there are. There's just so many better products available out there. If you're looking for that, if that's a part of your financial plan and maybe it is, there are a lot of great options, and one of the great things that annuities have often offered is this idea of you know, well, you're going to get the S&P up to a cap, you know, but there's going to be a downside buffer. You can do the same exact thing with a buffered ETF or a structured note, and it's liquid. There's just no need. Anyway, I'll get off Got it.
Speaker 1:
Got it Okay, back to how do we vet you?
Speaker 2:
So make sure we're dealing with the fiduciary number one. What else?
Speaker 1:
That's number one. So some other things to look for potentially is making sure. So, even though some people are fiduciaries, they still maybe sell products and this might be nitpicking but I would make sure that they're not selling products. My insurance license just expired. I chose not to renew it. I hadn't sold an insurance policy in six or seven years because I don't want to sell any products.
Speaker 1:
Somebody has an insurance policy they want me to review. I want to come at that from a completely unbiased perspective, and then I have partners I can reach out to if I want to actually help you shop your policy and find something better, so make sure that they are maybe not selling any ancillary products. You know, if I want to actually help you shop your policy and find something better, right, so make sure that they are maybe not selling any ancillary products. The other thing when it comes to compensation is, most financial advisors are paid on a fee basis, as a percentage of your portfolio, and that becomes very popular, and there are some great reasons why that's a good model. It does align the advisor's interests with yours to some degree, because they're going to be paid more as your investment portfolio grows, so they are incentivized to grow your portfolio, your portfolio.
Speaker 1:
But there's also a problem with that because their number one goal is to get all of your assets under their management. And if you say, if you come to them and say, hey, brian, I want to pull, you know, a hundred thousand dollars out of my investments because there's this great opportunity business-wise and I really want to jump on it, they'll say, oh, you know, I don't think we should do that. And they're going to say that because to them that's a loss of income.
Speaker 2:
Yeah, I mean it's interesting because it really is almost a classic agency problem right when if?
Speaker 2:
I know I'm being paid 1% of assets under management. I'm less incentivized, I think, to try to get your portfolio to do 10 instead of 8% than I am to try to find some other portfolio to bring under my umbrella right, or to get you to keep your 100,000 here rather than cash it out and go buy a bigger house. So those assets under management models, yeah, I mean, there's almost nobody who is pitching that this is the better model now.
Speaker 1:
Yeah, and let me talk about models for a second, because you should never be paying an investment manager to manage your portfolio if they are not actively trading, because there's no reason for an ongoing fee, right. So a lot of advisors are charging a management fee, but they're not really managing the portfolio. They're sticking you in a model and then you know, maybe they're rebalancing it once in a while, but it's mostly staying the same. That's a problem. It's actually a red flag for the SEC. This is they're not supposed to do this problem. It's actually a red flag for the SEC. They're not supposed to do this.
Speaker 1:
I mean, the better option would be to just have them set the portfolio up for you for a one-time fee, right, let's set it up and then boom and you're done. And the other thing is what value are they really truly delivering? And you really have to ask yourself that question, because if I'm paying somebody a 1% fee on my portfolio, it is going to reduce my returns by 1% Every year, Permanently, yeah, and that could be thousands, tens of thousands, even hundreds of thousands of dollars over time in lost wealth. So I say all this to say my preferred approach to working with a financial advisor is to find somebody who charges on an hourly basis or somebody who's going to charge their services on a flat fee basis.
Speaker 2:
And what is it like?
Speaker 1:
working with your firm? Great question, thank you for asking. So we have. That's what we do. We have four different packages that we offer, depending on the complexity of planning work. Our work is planning focused, and so we go through all areas of your finances, from cash flow to tax planning, to investment planning and even business planning. So one of the really unique things about the way we work with clients is that we integrate the personal financial planning with the business planning, and the way our fees are structured is based on the size of your practice, and they are flat monthly subscription fees. So, on a very basic level, we have a foundational package which we meet with our clients on a quarterly basis. We're doing work for you on a monthly basis, so there's a monthly planning deliverable, and then there are all kinds of other services that we provide as well, and then there are tiers higher above that if you need more in-depth, detailed work. But that's kind of the basic structure.
Speaker 2:
Awesome and Darren, as we bring this to a close, where can people find out more about you?
Speaker 1:
Yeah, it's very simple. Just go to thelawyermillionairecom. There's a video there. You can learn about what we do and how we work with law firm owners. You can also learn about the podcast the Lawyer Millionaire about the podcast the Lawyer Millionaire and the book the Lawyer Millionaire.
Speaker 2:
What a brilliant. Url for you to buy Right. Very, very smart. All right, darren. I appreciate you coming on today, my man, thanks.