Processes and Pitfalls: Financial Planning and Building Generational Wealth
Jan 14, 2024
Todd Whatley
Unlock the secrets to generational wealth and astute financial planning with Todd Whatley and Ian Weiner, as your guides. Brace yourself for a deep dive into the critical importance of having a structured financial plan to navigate the treacherous waters of wealth management—without falling prey to common traps or lackluster advice. As we delve into the foundations of a solid financial strategy, we underscore the non-negotiable aspects of transparency, trust, and reviewing tax returns. The myth that a cordial advisor relationship equals expertise is busted wide open, reinforcing the truth that your advisor's skill in asset management should be proven, not just perceived.
This episode also offers a masterclass in the nuances of financial planning and the ongoing support necessary to ensure a comfortable retirement and true financial freedom. We discuss how a tailored approach—keenly attuned to your specific spending desires and potential income sources—can lead to a well-funded lifestyle without the sting of sacrifice. And for those perplexed by the ever-evolving tax code or the intricacies of investment advisory services, we shed light on the benefits of Exoswell Strategies LLC's expertise in navigating these complex waters. Join us on this enlightening journey to financial clarity and empowerment, where we aim to arm you with the knowledge and confidence to take control of your financial destiny.
Unlock the secrets to generational wealth and astute financial planning with Todd Whatley and Ian Weiner, as your guides. Brace yourself for a deep dive into the critical importance of having a structured financial plan to navigate the treacherous waters of wealth management—without falling prey to common traps or lackluster advice. As we delve into the foundations of a solid financial strategy, we underscore the non-negotiable aspects of transparency, trust, and reviewing tax returns. The myth that a cordial advisor relationship equals expertise is busted wide open, reinforcing the truth that your advisor's skill in asset management should be proven, not just perceived.
This episode also offers a masterclass in the nuances of financial planning and the ongoing support necessary to ensure a comfortable retirement and true financial freedom. We discuss how a tailored approach—keenly attuned to your specific spending desires and potential income sources—can lead to a well-funded lifestyle without the sting of sacrifice. And for those perplexed by the ever-evolving tax code or the intricacies of investment advisory services, we shed light on the benefits of Exoswell Strategies LLC's expertise in navigating these complex waters. Join us on this enlightening journey to financial clarity and empowerment, where we aim to arm you with the knowledge and confidence to take control of your financial destiny.
Speaker 1:
Welcome to Wealth for Generations, the podcast where you learn to grow, protect and preserve your wealth for generations. Our hosts on today's show are Todd Wattley, a certified elder law attorney, and Ian Weiner, a certified financial planner. Join us and our expert guests as we uncover the mindsets, tools and strategies to help you maximize your wealth and impact. Let's embark on this journey to secure your legacy. Please note this podcast is for informational purposes only and is not intended as financial or legal advice. Always consult with a professional regarding your specific situation.
Speaker 2:
Welcome to the Wealth for Generations show. We're just having a chuckle as we get going here. This stuff is heavy, but we ought to have a little bit of fun while we're at it, I'm your host, Ian Weiner, and I'm here with my co-host, Todd.
Speaker 3:
Wattley, hey guys, hey, thanks for joining us today. Yes, my name is Todd Wattley. I'm a certified elder law attorney and financial advisor now and this is our show, and today we kind of want to talk about get start getting into the weeds a little bit of this, and we want to talk about the process that we have, which came from some of the pitfalls that we had seen people go through with other planners.
Speaker 2:
I think it's very important to start here and have just some background about what to expect during the process. Now, everyone's situation is different, so we want to acknowledge that, but there are, there's a roadmap here that we want to walk through, and I think that's important to understand, because one of the big pitfalls that we see is we talk to folks and say, okay, hey, what's your, what's your process for X, whatever the whatever. The area of planning is, whether it's cash flow, taxes mainly we see this with investments. What is the process for selecting investments? And overwhelmingly, the answer is well, you know the guy that's our investment guy or the lady that's our investment lady. You know it boils down to they've got in the back office more. There's some analyst that's telling them, hey, this is what we should buy right now and that's not a long term winning strategy.
Speaker 2:
Not for the client at least yeah, not for the client. And so everything that we do is built off of process. We want the process to drive decision making, and the process is designed to bring transparency and clarity, and I think that's really, that's really, really important. Diversity helps to build trust, and trust is the foundation of confidence. If you don't have have trust and you don't have confidence, it's it's very difficult to make decisions Absolutely. But when you have those, when you have trust and when you have clarity and confidence, you can make those, these decisions, a lot easier, and one of the pitfalls is simply not making any decision at all.
Speaker 3:
Yeah, I think people, what I had seen in the past is people really trusted their financial person and as I was going through studying for the test and different things, I learned that a lot of these people number one their loyalty is not to the client, their true loyalty is not to the client, and they sell what they're told to sell and not really what the client needs. And that shocked me because I just assumed that financial advisors would sit down with the client and they went through the bazillion of things out there to sell and picked out the best ones, but they were selling things that their broker dealer has purchased and is now needing to sell and I was just. That blew me away. And you know, when your financial guy calls to say, not how are you doing, or is there anything we can do? They're like, hey, we need to look at this one investment and I would thank you, as the customer would think, oh, he's, he or she is doing this because they found this and it's in my best interest.
Speaker 2:
That's such a tricky thing because you know, if you ask any advisor, are you a fiduciary? They're all going to say yes, sure, right. And I'm going to be a little bit picky here, but that's kind of like asking your barber if you need a haircut, mm-hmm, like, of course they're going to say yes, yes you're going to say a haircut there is.
Speaker 2:
We'll do a whole show on fiduciary and suitability and that will be absolutely shocking for most people. Mm-hmm, I mean, the system is not designed to benefit you, it's just not. And we're not. We're not saying anything crazy, we're just telling you how this, how this world, works. But I think what's really important is being nice and being able to remember your kids' names and that you like. Playing golf does not equal competence or skill, and really those are what most people base their decision of their investment person on, and so we just want to encourage people to think critically about these things you know.
Speaker 3:
So what is our process for that? Okay, and when you call us, we're going to ask you for all of your investments and something that may surprise you.
Speaker 2:
At the very least, we need to see tax returns, two years of tax returns, two years of tax returns and if you're listening to this, you're probably going wait, hang on.
Speaker 3:
Why do you need tax returns? Tax?
Speaker 2:
returns are really private, you know. So I think the first thing to say is, at all times, obviously we are using the highest level of discretion with your personal information.
Speaker 2:
I think, it should go without saying, but let's say it anyway. But I think it's really important to understand this. Your tax returns have a lot of information on them that people don't realize, and that information is related to how their income works, what accounts they have, and we can see things like whether they have capital gains that happen every year. We can see things like what credits they're eligible for. I will say it as strongly as if your advisor has not asked to see your tax returns before giving you investment advice. You need to be very concerned about that.
Speaker 2:
They absolutely cannot be acting as a fiduciary, because they don't understand how all of the pieces work in your puzzle and if they don't, they can't be making recommendations that are in your best interest. There are issues that could be causing tens of thousands of dollars a year in taxes. And what typically happens? You go to your investment person, you go, hey, let's talk about taxes. And they go I'm not a tax person. You got to talk to your tax person about that. We don't give tax advice. Then you go to the tax person and you go, hey, I need to understand how my investments work with taxes. And they go, hey, we don't do investments. Go talk to your investment person and then you're stuck in the middle and no one communicates, and it's a disaster.
Speaker 3:
How do I get a decent answer on this?
Speaker 2:
And so what we've done is we've said, ok, what would we want to know before making any investment or planning decisions? What are the items that we would want to understand? And we designed the process to create that, and so what we create is a report that's called the peace of mind strategy report. Peace of mind strategy report. The idea is, if you have clarity and there's transparency, then you can have confidence, which leads to peace of mind. So we would want to understand where we are now and what is the opportunity. Where could we go if we make the right choices?
Speaker 2:
So the information that we have to gather is more than, I would guess, 95 plus percent of financial advisors gather, and the reason for that is because your financial life is much more integrated than most people understand or are used to. Investments and taxes are very well connected and integrated, but we also need to understand things like what insurance you have. Is it sufficient? We need to understand what estate planning documents you've created and what's the plan there. With most people, there isn't a plan. Sure, we need to see the retirement plans that you have. That's things like 401Ks, iras, 403bs. We need to understand how those work. That's a long-term tax implication, and so what ends up happening is we create a report that gives you insight into your picture in a way that you've never seen it before. It is extraordinarily comprehensive. Most people would probably call this just a comprehensive financial plan, just this one document. But that's just the starting point for us, and so we compile this report and then from there what we do is we identify what are the top areas that we would focus on and what it would it cost to address those.
Speaker 2:
So typically we'll start with kind of a 90-day sprint. What I found is there are typically a lot of things to address with most folks. Look, life is complicated. I mean, everyone is busy, there's a lot of stuff going on, and so it's easy to put this stuff on the back burner. But we're going to address the top issues first. They're going to have the highest impact for you.
Speaker 2:
It's typically a 90-day to 120-day sort of sprint, if you will, and so that may be things like OK, if you're young and you have kids and you haven't done a state planning documents or you don't have sufficient life insurance, those are going to be items that are high at the top of the list. Now what I want folks to understand is the power of the peace of mind strategy report is that we're going to outline exactly what we would do if we were in your shoes. We're going to walk you through a couple of options If you want to work with us. What is it going to look like, what are the steps and what's it going to cost? But if you want, you can take that to any halfway competent advisor and have them implement it or do it yourself. Wow, I think that's pretty radical frankly.
Speaker 2:
It is, and really one thing that we'll talk about later. But if we get through that process and for whatever reason, you decide that it's not the right fit, we're not the right fit to help you to implement some of those things, we will help you find the right advisor. Exactly. We have a network of advisors that we work with. Because we can't help everyone, we will introduce you to them. I mean, I don't know how much more risk-free we can get here.
Speaker 3:
Yeah, I mean no pressure with us. We're just going to show you where you are and then let you choose. If we're the ones who found it and you want us to implement the plan, sure we'll be glad to, but if not, that's hey, that's fine.
Speaker 2:
More often than not. You know what that, what the creation of that report, what that provides is a glimpse of how we work, how we communicate and the ideas that we, that we bring to the table. You know, really, we get paid for our ideas and our expertise, and so what you'll find is we can actually quantify that and it's it's really powerful when you see, okay, what are the right things that we should be focusing on and how much money can that, can that save us? So that's, that's a brief overview of the process. There are lots of different areas that we could look at in that, so we're gonna look at your, your cash flow and your liabilities. Okay, that's also known as budgeting.
Speaker 2:
budgeting Yep, the horrible B word we want to understand your income, you know. But here's the thing that we should, we should say about budgeting, and we'll have a whole episode on budgeting. But Budgeting doesn't have to be a four-letter word, you know, and one of the big challenges with budgeting is it feels constraining.
Speaker 3:
But we typically do what's called reverse budgeting we're gonna prioritize what's most important to you and then what's left is what's left and that's what you just don't worry about well, and I shared this story with you when I first got married, wife and I went to a financial advisor and Maybe I just didn't look at it correctly. But you know we left there thinking, man, she's not gonna let us do anything, we've got to invest, invest, invest. And you know there was no vacation money, or very little vacation money. No, and we just felt, like you said, very restrained and we didn't do it and I kind of wish I had gone back.
Speaker 3:
Turns out Okay, look, we want to go on vacation, we want to do things. I'm pretty sure she would have Accommodated us, but we just left there thinking I don't want to do that and we don't want that with you. Okay, let's look at what you want to spend money on and let's figure out if there's any where we can cut that's not going to be painful, or how can we make more money so you can do the things you want. I think that comes into retirement planning, which you call financial Freedom, financial freedom, financial independence, financial independence. And so let's figure out what you want to do and figure out how to pay for it.
Speaker 2:
That's really all financial planning is sure is getting clarity on what you want and how we're gonna pay for it. Yeah, now you can do that yourself. I want to be abundantly clear. But the the situation that we live in, the country that we live in, I mean I don't know if you know like the tax code is very complex. You know, if you want to stump your financial advisor, just say, name all the stocks, I mean it's a joke, right, but you can do it yourself. But we all have blind spots and so when you bring in Specialists that have done this like a couple hundred times, you can get to where you want to go faster and more efficiently Without really expensive mistakes. You know, I mean there's For a while I did my own. You know I cut my own hair and you know there's a relatively low risk situation, you know worst case, it'll go back.
Speaker 2:
My gross. My hair grows quick. You know what's that? What's the downside risk there? It's not a lot, right? Yeah, the downside risk with all of your money is pretty high. It's worth measuring twice and cutting once and that in that situation. So that's you know, and that's the power of the way that we approach planning. We have a lot of flexibility in the way that we work with you. If you want to manage your own assets, we can create a plan that works with that. We'll give you ideas. We'll share some data with you that may make you go. Okay, maybe that's not. That doesn't make sense for me, but we are extraordinarily flexible in the way that we can work. But it all is centered around getting clarity about what you have, how it works and what opportunities are in front of you, and I think that's that's the, the cornerstone of the process. And and what? Um? Most people go their entire life not even understanding. Wow.
Speaker 3:
Yeah, so we're past the are we? We now understand the initial 90 days. We're going to work with you through this. What does the ongoing process look like?
Speaker 2:
So we, after the, the creation of the report, the initial, you know, 90 day sprint, what'll what'll end up happening in that time period is that, as we start to dig through some of the, the things that we need to get done and take care of some of those things, we're going to find more opportunities and more issues are going to come up. Um issue doesn't have to necessarily be a bad thing, sure, you know. But um, the the more that we get to know each other and the closer that we work, the more we're going to find. And so, typically, what happens after that 90 day period, um is we're going to get back together and we're going to say, hey, this is what we accomplished, these are the things that we did. We're going to review, let's say, there's some, there's some tax strategies that we need to implement. Okay, we implemented these tax strategies. We expect that it's going to save you, you know, $250,000 over the next five years. Great, um, you know, that's not a bad. It's not a bad, you know. Use of 90 days.
Speaker 3:
Sure yeah.
Speaker 2:
And you know, at the end of that we're going to review what we did and we're going to say, okay, here's some other things that we found. Should we take a look at those? Should we put? You know we're going. There's going to be some other things that come up, um, and typically one of two things happens at that point we might start another 90 day sprint If it's, you know, things that are going to need to be addressed in in that type of order, or we may say, look, there's not a ton to do right now, but maybe through the process you found that you want some help.
Speaker 2:
You know managing assets, or you want some help with, um. You know, implementing an insurance strategy? Um, that's when ongoing planning will come into place. Um, not everyone needs ongoing planning. Sure, you know some people need, you know, some, uh, a surgery, if you will, um, and then you know they need to do the physical therapy afterwards, um, and some folks need to do that, that physical therapy guided for for a period of time, or they get to the end of that 90 days and they go. You know, this has been incredible. I've never realized how good it would feel to not have to worry about all this stuff, um, what is it going to take for us to get together a couple of times a year? And anything that comes up, I'll give it to you and I don't have to worry about this stuff every day Again. So we might reengage for 90 days, we might part friends and and revisit in a year or two, or we might do some ongoing work together and ongoing.
Speaker 2:
So twice a year. Typically, we'll get together twice a year. Um, these are these tend to be for folks who are either in the very beginning like grow stages, where accumulating assets, um, or these are folks who are, um, maybe already retired. They have some assets that they don't want to manage and they want some help with that. And so what?
Speaker 2:
What I want to emphasize is and we'll talk about this in later episodes um, sometimes doing nothing is the best thing, and what you need is someone who understands your situation, who sees things unemotionally and can tell you hey, the action you need to take right now is to not do anything, and over the past couple of years, we've seen that a lot and um, so you know, our investment philosophy is relatively simple. We're not trying to. You know, really time stuff all the time. If you're looking for someone who's going to give you the hot stock tips, that's, that's not us, right, um? But if you're looking for someone who is going to help you really not stress about money and apply data-driven principles to grow and stay wealthy for a long time, then we should have a conversation about that.
Speaker 3:
Yeah, sweet, okay. So I think it's good for people to know exactly what the process is, and the process came about because of pitfalls, things we had seen that were done wrong, and so now here is our solution for this. And so, if this does interest you, if you just want to sit down with us and talk, you call my law office, which is Generations Legal Group, and that number is 479-601-4119. 479-601-4119. And tell Fabiana that you want to talk about financial stuff and she'll probably set you up with Ian. But if you need documents or need anything done regarding legal stuff powers of attorney, which are crucially important I'm sure we will do a HOBE show just on that. But, yeah, give us a call and you can meet with either Ian first or my intake coordinator first, and let's get you in this process and avoid the pitfalls.
Speaker 2:
We should say one last thing, which I'm kicking myself for not saying earlier. The entire point of the report is that we're going to find so much there that it's going to be extraordinarily valuable to you. If we don't if we don't find 10 times what it costs to put the report together, I'll refund your money. Sure, it's never happened, Okay, but so that's why I'm so confident in doing it. There are so many ways to save money, to optimize investments, to reduce taxes, that we're going to find 10 times your investment in the report. So I just I want to make sure I need to emphasize that more. But look, I'm not. Nobody's perfect right.
Speaker 2:
But I need I need folks to know that. So call the office, let's get your report created and find out how much you can save.
Speaker 3:
Yeah, exactly yes. Thank you for listening. Please subscribe and tell your friends about us, and we can see folks pretty much wherever we're in Northwest Arkansas, but we can see folks all over. With Zoom and phone calls, we can do a lot of work across the country. So thank you all very much and we will talk to you next time. We'll see you next time.
Speaker 1:
Thank you for joining us on Wealth for Generations. We hope today's insights inspire and guide you in your financial journey. Remember, the path to wealth and legacy is unique for each of us and we're here to help illuminate your way. Before we part, a quick reminder this podcast does not provide financial or legal advice. The content discussed is for informational purposes only. Please consult a financial planner or legal advisor for advice specific to your situation. Visit us at wwwwealth-the-number-four-generationscom for more resources and don't forget to subscribe to Wealth for Generations. Until next time, keep building your legacy, one decision at a time.
Speaker 2:
This material is intended for educational purposes only. Nothing in this material constitutes a solicitation for the sale or purchase of any securities or insurance product. Investment advisory services offered only by registered individuals through Exoswell Strategies LLC. The firm is a registered investment advisor and may only transact business with residents of those states or residents of other states or otherwise illegally permitted, subject to exemption or exclusion from registration requirements. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values, and the information contained on this website shall constitute an offer to sell or solicit any offer to buy a security or any insurance product.