Episode Transcript
[00:00:25] Speaker A: Welcome to Biz Talk. I'm your host, Ryan Herpin. And on this show, we really like to sit down with business leaders, entrepreneurs, entrepreneurs and experts to unpack the decisions, strategies and lessons that help organizations and people behind them build sustainable success.
Now, success can be like a flash in a pan, but unless you put the strategies in place to make sustainable, it's just a big waste of time. Now, the conversation today, right, is going to be focused on a side of business and life that no one can avoid. But we're really going to be looking at a blind spot that can truly affect even the most successful business owners. You can spend decades building a company, generating income and creating value without ever building a clear strategy for what your personal financial life looks like when the business is no longer at the center of it. Now, my guest today is Dominic d', Andrea, a financial advisor and wealth strategist with more than 30 years of experience helping individuals, families and business owners build sustainable financial futures. Now, his work focuses heavily on retirement planning, wealth preservation, financial security, and helping people think differently about what a fulfilling retirement can actually look like. So, Dominic, I'm so excited to have you on the show. Welcome to Biz Talk.
[00:01:50] Speaker B: Thank you for having me, Ryan. I appreciate it.
[00:01:52] Speaker A: Now, something that I've kind of seen over the years and it is continuing to evolve.
Entrepreneurs, a lot of the time when they're self taught, they've trained themselves to reinvest in the business. But if the company becomes the retirement plan, the investment portfolio, the income source, and the largest asset all at once, success can create its own concentration risk.
Now, kind of what I really want to establish today really is the difference between business success and personal financial readiness. I also want to explore why owners postpone retirement planning, how identity and cash flow become tied to the company, and why a strong business does not automatically translate into a secure retirement. Now, I've heard plenty of horror stories of poor financial planning that leads into poor retirement planning. But I really want to start off with a bit of a heavy hitting question here. And I'd like to get right down to the point. But after more than 30 years of advising people on wealth in retirement, what do successful business owners most often misunderstand about being financially prepared for the big word retirement?
[00:03:07] Speaker B: The big word. That's a first of all, great question. Thank you, Ryan.
The biggest thing I've seen is too many business owners overvalue their business, think that, you know, they overvalue the market. So they're like, okay, I'm going to sell my business in 10 years. I think I can get X dollars for it.
They haven't talked to a business consultant. They haven't talked to anybody. They just assume that's what it's going to be worth and they're going to find a buyer and they're going to be able to retire off that money.
The thing we don't know is how many businesses have gone under in your lifetime that nobody would have thought like Toys R Us. Did anybody think Toys R Us was not going to exist today? No, we didn't.
That's just to name one big company. So when I look at it, I want to make sure the business owner understands, look, yes, the valuation is good. Yes, you want to be able to sell your business.
But when you retire, if you have more money than you thought you were going to have, are you going to be better or worse in retirement? Obviously, they're going to say better.
So I always say, look, let's save for retirement. Let's build you a retirement plan in the business. A, you're going to get a tax savings. B, you're going to be able to have a hook in your employees. Because now instead of them looking to go somewhere else and you having to train someone else, now they're saying, okay, I got a retirement plan and they're matching or they're giving me assets or they're buying me life insurance. They're doing something to help plan, to keep the employees there.
And if you work the right employees out, you could end up having your successor already on your staff. So you don't have to look for somebody that already knows the business and wants to buy it. So it really has to be, let's look at how much do you need to know you have for retirement? And let's save for that personally and then know that if whatever we sell the business for is either going to be extra retirement money, a slush fund in retirement, or it's a legacy for your family so you don't lose in if you plan properly where. If you just count on the business to live on, you now are in danger of not getting the valuation you want and not being able to retire comfortably.
[00:05:12] Speaker A: You know, I. I could not agree with you more. And it's funny that you brought up Toys R Us, because that's always the first one that kind of comes to mind. Right? It's the big one that a lot of people recognize and know of, but it's all the same. Even if a company that scale can go that direction, I mean, it's possible with any size business but, you know, something that you brought up that I work with clients and customers all the time on, and it's exit strategy planning.
It really boils down to what is it you're really looking for? Legacy, a sale, whatever it is. A lot of the time people say, oh, they want to be able to sell their business. That's their retirement plan.
In my mind, I've gone through the acquisition process several times now, and it's not. It's very rarely what that owner is originally planning or what they think. You know, it's gonna be millions of dollars in this big deal. Well, is the market really ready for your business? Is the market already saturated with the type of business you have, the services or products? Is there a unique factor? You know, there's a lot involved in that that I think a lot of people don't necessarily understand.
And I think you bring up a really good case point there. But something you also addressed is the succession plan. You know, having certain things in place means it's a whole lot easier to step back, delegate, and step out slowly. You're also setting up that incentive plan for somebody to really step into that role, do a great job, and have their own retirement plan put in place. But, you know, to kind of dive into this a little bit more.
Why do so many entrepreneurs treat the business itself as their retirement plan? And. And what risks can that really create from your perspective?
[00:06:41] Speaker B: Well, from what I've seen, again, a great. Another great question from what I've seen is they, they create it as the business plan because they think it's always going to be successful, it's always going to be booming, it's always going to be growing. There's never going to be downtime.
And again, if there. The negative is, if there's downtime, let's just say, let's use Covid.
How many businesses do you think sold during COVID for a good valuation, if any?
You know, we don't know what's going to happen in the world that could change things. We don't know, you know, what's going to happen geopolitically. You know, right now, if you have a business that deals with oil and gas, your costs have gone up. With things going on geopolitically in the world, those costs going up is going to decrease the value of your business.
Now, five years ago, did you know that was going to happen? No, you didn't. Or Covid, you didn't know before COVID that was going to happen, that you planned on selling your business in that year and now the valuation plummeted because of something that happened in the world that was beyond our control.
So I'm always going to tell a client, okay, you think it's worth X, let's plan for it. Be worth, you know, some number less than X, because again, if you have more, your life's better. But if you have enough to live on through a proper planning strategy, now we know you can retire because you saved some money on the side and you undervalued the business.
So you know you can live on that lower number.
And again, you'll only be better off if you get more.
[00:08:14] Speaker A: Exactly. And you like, once again, you're dropping gold here. What you're saying is so real and it's so easy for a lot of business owners, entrepreneurs, just to overlook because like you mentioned, geopolitically, I mean, there's a lot of water there that you don't know exactly what is going to, what's going to be affected. There's always something that can happen that can derail a company, a business or whatever it may be. And you mentioned oil and gas. I have a very, very heavy background in liquid natural gas assets and the manufacturing of said assets. For the oil and gas industry that is heavily affected by politics. It's heavily affected by, by certain types of weather changes. There's a lot that goes on that can completely derail a company or cause the massive growth of a business. But with that being said, that volatility that is unexpected, it does create a lot of risk when somebody has their business as their retirement plan because what works now might not work 30 years later. And that's just the reality of. Right. So kind of briefly, while we have a few minutes left to dove in this a little bit deeper, how, how should an owner think about the difference between their business net worth, their personal net worth, and the assets that can actually produce retirement income?
[00:09:24] Speaker B: Another great question, mine, I'm always going to tell them, let's plan personally, let's plan this as you're the, you're an employee, not the employer. So let's save as if you need to have the assets built in a plan that we need, okay. You need X dollars to live on in retirement based on your budget. And let's save for that outside of the business. And again, as I've said a few times, if we have a more to funnel into it again, you're going to have a better retirement if you have another few hundred thousand or million or whatever it might be.
There's never a problem that too much Money can't solve. There's always problems that too little can't solve.
And I always want to make sure you save properly. So I'll always show you. Look, if you put away this much in your retirement plan, A, you saving in taxes, so off the bat you're helping yourself out.
B, now you're building the assets. So now you know, okay, whenever you're ready to retire, we build towards it. Because you might say I want to retire in 10 years.
But the other thing that we haven't talked about is what happens if something happens you health wise and you can't run the business anymore. Well, if we were saving for it, now you've got assets that have built up that maybe you didn't get the business valuation up to where you thought you could get it to because you had to sell sooner than you wanted to because of health.
So always personal should be to make sure you can retire. Business should be okay, let's see what we can get to help enhance it. Not be the only end all, be all.
The other thing is I've seen business owners where the landlord comes in and says, I'm raising your rent and it might be a rent that's so high that you've got to close the business because you can't afford to run the business. So if you didn't plan well, now you've got a few months maybe to sell the business where you thought you had years.
And again, these are all intangibles that we can't plan for. We don't know when they're going to come about.
So I'm always, always, always going to try to guide my business owners into a plan to save and know that we're protected because I always want to under promise and over and, and over deliver, then over deliver and under, then over promise and under deliver.
[00:11:40] Speaker A: Exactly. And you once again, man, you just keep dropping some of these incredible golden nuggets of wisdom that I think a lot of people miss.
Now with that being said, you really did highlight extremely well how, how when putting all of that focus into the business, you're setting yourself up for a lot of risk. Yes, it could work, yes, things could go great, sure. But I like the idea of setting it up personally as that's your retirement plan, the business can just add on to that. That's a big bonus, big plus something that you shouldn't base everything off. But we are going to move into a break and after that break we're going deeper into one of the hardest transitions for an entrepreneur moving from years of accumulating and reinvesting to creating income that no longer depends on showing up to run the business every day. We'll be right back with more Biz Talk.
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Now that we get to dive back into this fun conversation with Dominic, a financial advisor and wealth strategist with more than three decades of experience helping individuals, families and business owners prepare for retirement, preserve wealth and create greater financial security. So, Dominic, it is such a pleasure having you on the show. This has been a great talk so far and I like diving into this. Perfect.
[00:13:43] Speaker B: Thank you. I'm enjoying myself too. So let's see what the next question is.
[00:13:48] Speaker A: You know, during the working years, the question is often, how much can I grow? Retirement changes that question to how do I turn what I have built into dependable resources for the life ahead without taking risks I no longer need to take?
Now, I know exploring that with people is sometimes a really touchy topic, but you know what changes psychologically and really financially when someone moves from receiving a paycheck or business distributions to drawing income from the wealth they have accumulated?
[00:14:24] Speaker B: That is a great question. And that is the hardest topic to get clients and prospective clients to understand how the world works in the distribution stage.
Because the biggest problem in a positive way is the last 10 years in the market have been, for the most part, almost straight up.
You know, there's been hiccups in there, but for the most part it's been a booming market.
So a lot of mindsets I'll get from clients is, well, the market's doing great. I can just take out X percentage and I'm going to still grow next year and I can take out X percentage and still grow. What they're not planning for is at some point in the next bunch of years we're going to have a correction, we're going to have a downturn in the market. Don't know when it's going to happen. I'm not, I don't know, crystal ball. But it's inevitable that we're going to have that happen. It's, it's history, it's going to happen. And if a client is drawing X percentage off of that larger number. And then we have a 20% or 30% downturn, which is not unheard of. It's happened.
And then they still need that same percentage. But what they don't understand is they have nothing to refill the money in because they're not working anymore. So now they're drawing off a lower number, the higher number, which is a higher percentage.
And when the market comes back, they're never going to recover from that.
So it's getting them to understand, yes, we still want to grow, we still want to build, but we want to make sure that whenever that time comes, there was still at least a dollar in your account that you were able to, you know, you were able to survive on. And obviously we'd like more and we want to grow, but the goal is to make sure that you never need for money. If the plan was laid out properly, you don't have to go back to work, you know. You know, because who wants to go back to work at 70 because they ran out of money.
[00:16:12] Speaker A: Exactly. And with that in mind, you know, it does raise a kind of a bit of another question for me.
That part of the process, to me, just always in mind, it's like I, I understand how people work. I understand how scary that can be. Plus the big change of when you see an account growing and then all of a sudden it's no longer really growing, it's only depleting. There's a completely different feeling you have with that. It's almost like there's an inevitable end that you have to come to grip with.
[00:16:37] Speaker B: Right.
[00:16:37] Speaker A: It's not just understanding that you're in the latter years of your life potentially, but it's also your resources are low.
[00:16:44] Speaker B: Right.
[00:16:44] Speaker A: But how do you help clients determine how much retirement income they may actually need when their future lifestyle can look very different from their working years?
[00:16:55] Speaker B: Great question.
Obviously, the first thing is I get to know them. I get to see what they're doing, what their budget is, you know, so we'll do a budget on what they think they need to live on.
Again, like I said before, I'm always going to tell them, look, if you say you need to live on 5,000amonth, let's plan to have 6,000 or 7,000 in reserve, because again, inflation can happen.
You know, gas prices were $3 or so at the beginning of the year. Therefore, I paid 435 an hour ago for gas. So $35 cents more times how many gallons, times how many weeks, you know, that's 50. That's a few hundred dollars a month that I might not have been budgeted for if I'm in retirement.
You know, I'm working now, so it's not a big hit. But later on in life that could be a big hit if I'm not planned properly. And that's really what I show my clients like, look, let's build your plan. Let's show you how you can live on this portion of your retirement, whether, you know, with pension, Social Security, part of your 401k. But then let's let this portion grow for maybe a slush fund where you can go on vacation, buy the grandkids a gift, you know, whatever it might be, home improvement, and then have another portion that we put aside that's growing that 5, 10, 15, 20 years from now you need a raise.
We're able to now say, okay, let's strip off some more money to give you income and still have more, still have the remaining balance growing for you. So we use a bucket strategy and really try to make sure clients understand this is where you're drawing off of, to make sure that you still have the assets when the time comes.
[00:18:29] Speaker A: I like that. And you know something that kind of stands out to me here a thought. I've worked with so many different business owners, and there are several that come to mind that they successfully exited their business.
They had a great sale, you know, a very fantastic, even a value. And it was great, don't get me wrong. But I remember seeing these individuals five and eight years later, and they're in a position where they're looking to either run another company or work a job because they didn't really have a plan in place. They didn't have somebody that was willing to sit down with them and actually help them understand what that money really is capable of doing and what it's not capable of doing. Because at the end of the day, after buying a three, four, five million dollars home and having roughly two million dollars wrapped up in cars and all these other things, they're not thinking about the fact that they could have another 20, 30 years or more of retirement that they now have to really cover with much less than they had before. But you know, what are some of those other big risks that people tend to underestimate when planning for a retirement that could last that 20, 30 or more years.
[00:19:37] Speaker B: That's a great question. I want to address one thing you said, and then I'm going to ask the Answer the question.
The biggest thing people do and most of the People that end up failing is they talk to a colleague, an associate that doesn't have any training. And they were phenomenal savers. I see it all the time. Oh, my buddy, he's living perfectly fine, but he saved millions in his retirement. You have 750, so you have less to live on. So you, your planning is different than theirs. So it's getting them over the hump saying, stop listening to the person that doesn't.
Isn't you in your shoes, doesn't understand your situation.
And knowing that once they see that, they're like, okay, yeah, that makes sense. Like they're different than me.
And are they going to call you and tell you to make a change?
You know, they don't know what's going on in the market. Most investors, you know, buy high, sell low.
Yeah, obviously you don't want to do that. And that's when you have, you know, having a professional in your corner. Yes, you know, you might pay a fee, yes, there's going to be expenses. But if that means that that professional is giving you a plan and a strategy now, you know, okay, I'm paying for something, but I don't have to figure it out. I don't have to get advice from somebody that may or may not know what they're talking about.
And I know that I'm going to be able to live that 20, 30, 40 years and not have to go back to work. I might want to do something because I might be bored, but I'd rather have to want to do it than have to need to do it.
[00:21:10] Speaker A: Oh, that was well said. You know, something I think is truly underestimated in the world of finances. It's the compound effect.
Right. Some of the best advice I've ever been given from financial advisors is don't touch it. I mean, honestly. And with that in mind, you know, there's. There also comes the idea or the reality of diversification.
So with that being said, you know, to kind of dive into another angle from this, how should business owners think about diversification when so much of their wealth is likely concentrated in one company or one industry or one major asset? Do you have a way of helping people understand diversification?
[00:21:49] Speaker B: Absolutely, 100%. We will sit down with them, we'll show them the plan and show them how the different assets work together to help them grow. You know, if you go into one investment, you know, I sit down with clients and I'll sit down, I'm like, why? You're over concentrated. You know, all their money's in One stock, I'm like, do you understand that if that one company goes under, you're done?
You know, it's, it's a good company.
You know, I met somebody, had $8 million in one stock. That was their whole retirement. They're like, well, it's been making me money. I'm like, yes, it has and yes, it could continue.
But if tomorrow they have a bad report and that stock goes down, your $8 million is going to plummet.
So my job is to, yes, we can leave that as a portion of your portfolio. You know, it's a good company, but a percentage. And let's see what else we can do to diversify. So in good and bad markets, you still could be making money.
And that's really what I need them to understand, is that we need to plan for different markets, not just for the booming market, not just for what's going on in the world. Like Nvidia, it's been growing, growing, growing, growing. Does that mean it's going to continue growing, growing, growing, growing over the next 5, 10, 15 years? They hope it is.
And people have money invested, hope it is, but I can't guarantee that and neither can you. So I'd rather say, okay, let's use Nvidia and any other companies and then let's pick some other entities that we can protect you to know that you'll be able to live.
[00:23:23] Speaker A: I like that. And it really reinforces something that I've kind of learned through observation.
I have seen partners exit a company and a lot of their payout was in stock. Tom, from obviously a publicly traded company and they're sitting on this large, large sum of money when things are going really well and instead of diversifying, it's left there. And I've watched that stock take a major dive and what was once 10, 20, 30, 40 million ends up being 2, 3, 4 million. At the end of the day, there's always risk. And I think a lot of people underestimate just how quickly things can change and, and to truly be able to predict it. Unfortunately, we're not privileged enough to know what comes around the corner. But to our audience, this conversation is really, really important. And I recommend grab a pen, a pad, whatever it is you got to do, because next we're talking about preservation. Once you've spent decades creating wealth, how do you protect it from the risks that can quietly derail a long term plan? So don't go anywhere. Grab coffee, popcorn, whatever it is you got to do. We'll be right back with more biz talk foreign.
We are back with more Biz talk and I am continuing a conversation that we've been having with Dominic. Now, Dominic is specializes in retirement planning and wealth preservation with a big focus on helping people create greater financial security and a better quality of life in retirement. Now I know this is a topic that we can push this off. We can try to act like it doesn't exist. We can always have these high hopes that, you know, maybe we're going to win the lottery, whatever it may be. But through my experience, talking about this sooner rather than later is a no brainer at this point. But this segment here, right, you know, growth gets attention because it is exciting. I understand preservation is a whole lot quieter. But for someone approaching retirement, avoiding a major financial setback can matter just as much as finding the next big opportunity.
So diving into this, hopefully you're ready to take some notes and, and really pay attention to some of the wisdom that Dominic's gonna be sharing with us. So Dominic, thanks for being on the show. I'm excited to dive into this topic with you.
Perfect.
[00:25:50] Speaker B: Thank you again, Ryan.
[00:25:52] Speaker A: So just to get right into the thick of it, how should someone's approach to financial risk evolve as they move from building wealth to. Depending on that.
[00:26:04] Speaker B: Great question.
The accumulation stage.
You know, it's great to have a professional on your side to help you pick your investments and make sure you're choosing the right things.
But if we're in a booming market, odds are you're going to be able to make money if you didn't have a professional helping with the 401k.
But where we're going to come in is helping you mitigate the risk and making sure that when you're no longer again funneling the money into a retirement plan, you're no longer bringing that paycheck. How are you going to make sure that, that you can outlive that. And there's a whole bunch of great vehicles and products out there that can do this. Again, you got to find out what's suitable for you. But you know, there's income annuities, there's income investment products, but you want to find something in your portfolio that at least you know, on the first of the month or whatever day you pay your bills, that you got that check coming in consistently no matter what's going on in the world. Because the last thing you want to do is be in retirement and again have that 20 or 30% downturn.
And now you're used to living on 5,000amonth for rent. First random number and now if you want to take five, you're going to destroy your number.
So now maybe you got to take three.
Where's that, where's that other 2,000 coming from? If you don't want to damage your retirement, I don't want you to live that way. The other thing is you could destroy your retirement by not protecting on the, on the back end, you know, so we'll look at long term care because that could destroy your retirement or destroy your significant other's retirement because you could be, you could lose, you know, if you go into a long term care event, that's two, three, four years, that could, that's hundreds and hundreds and hundreds of thousands of dollars. That's got to come from somewhere. If it comes from your retirement assets, well, now your significant other, how are they going to live after you're gone?
Or is your legacy going to be there after you're gone? So it's really looking to plan on making sure your income is locked in and your assets are protected as best as possible, you know, moving forward to know that your family's going to get, your legacy is going to get and you're going to be able to live as long as God has us on this earth and know what paycheck's coming in.
[00:28:17] Speaker A: That's a really, really good point. It's extremely valuable information because, you know, even I, I, you know, it kind of escapes me sometimes thinking about the fact that, okay, there's going to be a point where potentially my spouse is without me in that stage and what does that look like? How does that dynamic change? What really needs to be adjusted based upon that? And to our audience, I've got to highlight that working with an expert or professional in this field really does make sense. Is it really worth the risk leaving behind a mess for your family to have to pay for and to try to cover?
To me, no. But we know that emotions and reality are often at conflict a lot of the time. So with that in mind, Dominic, what is the difference between being emotionally comfortable with risk and, and actually having the financial capacity to absorb a major loss?
[00:29:08] Speaker B: That's a great question. I'm going to bring a story in when it comes to risk. I had a client years ago with long term care. He bought it, had it for a year, canceled. They got another one, canceled it and he's like, I'm never going to use it, I'm never going to need it. I feel bad. He needed it, got diagnosed with Parkinson's and would have needed it, ended up dwindling down assets that his family's now not going to get because he passed away this year. They're not going to get those assets. But if he would have had the long term care, he would have left a larger legacy to his family because that would have covered his need.
And that's what people don't get, is everybody thinks I'm not going to be the statistic and that's not going to happen to me. The market's never going to go down while I'm using the money.
Again, like you said it before, if we had a crystal ball, we'd know what it is. Like, clients will ask me, oh, should I buy term or whole life?
I always try to get them as much whole life as I can because they're going to need it later on. Life and planning. But I said, look, if I had a crystal ball and I knew you were going to pass away young, I'd sell you every dollar in term you could afford to buy.
But we don't know that. So I'm always, again, going to always look at a plan and be conservative in the planning strategy because again, I'd rather you have more at the end than have nothing at the end because I promised you something that was unrealistic.
[00:30:35] Speaker A: You know, outside of market volatility, what other risks deserve more attention that a lot of clients might be completely missing or a lot of people in general?
[00:30:49] Speaker B: Well, inflation, interest rates, you know, you don't know, you know where right now if you wanted to move houses, like, I don't know what you're paying, but I have a three and a quarter percent mortgage because I got my house years ago.
Right now, if I would want to sell this house, I'm going to pay 7% on the new house.
So my mortgage is going up 4%.
You know, even if I just kept the same mortgage amount, which means I'm spending a lot more money a month for a new house on equal ground. Forget about if I'm upgrading the house and if I'm downgrading, I still might be spending, I'm still gonna be spending more, just maybe not as much more. So it's real, you know, there's a ton of risks involved without proper planning, without proper making sure that we're going to be there.
What about again, if you live way longer than you think, you know, everybody's like, oh, well, my family died young.
We don't know when you're, when you're gonna die. Like, people are such a good point. People are living longer. Like, even mortality Tables in my career have changed where life expectancy is way longer than it was, which in turn has lowered costs on some stuff because you can buy insurance today cheaper per thousand than you could could 10 years ago because mortality tables have extended. So companies know that you're going to potentially live longer but always plan to live.
Because again, if, if you leave more to your family, is that the end of the world if you didn't, if you died young?
[00:32:17] Speaker A: Exactly. It's. Would you rather leave more or risk leaving significantly less or not?
[00:32:23] Speaker B: It's, it's or not have anything to live on?
[00:32:25] Speaker A: Exactly. And, and once again, to me it seems like a no brainer type option and you know, not to everybody. A lot of people that I've run into, especially in the earlier stages of entrepreneurship, they've got this big belief that this thing is going to hit, it's going to take off. You know, having a strong belief is, is very much required in being successful in business. But there's also a part of us that has to, we have to have contingencies. We have to plan for worst case scenario and hope for the best. Yeah, it's easy to get into a position where we are blinded by potential rather than understanding the risks that are likely to have to come.
Now there's so many ways that we could try to say that and it's still going to be missed by some people. But something I kind of want to dive and shift into here is how important is liquidity for a retired business owner who may look wealthy on paper but still have a significant amount of capital tied up in liquid assets?
[00:33:27] Speaker B: You said liquidity and liquid assets. I'm trying to figure where you want me to go with this question. I'm not trying to.
[00:33:33] Speaker A: Right. So let's say you got a business owner ready to retire. They look really, really successful on paper. They've got a lot of assets.
Do you have any kind of thoughts or strategies on what it looks like to turn that into actual usable funds for their return?
Absolutely.
[00:33:49] Speaker B: 100 great questions.
Like I said, the first thing we're going to do is sit down with them and do a budget because that's the main thing. What do, what is the major expenses that come no matter what happens in the world? You got to pay your mortgage, you got to pay your car payment, you got to pay your phone bill, whatever the bills are. Let's find out what that bottom line number is. Whatever that bottom line number is. Then we're going to look at the assets and say, okay, well here's the ways that we can take, we can peel off this portion of your assets and we can cover that guaranteed number on a monthly basis that you know every month you're going to be able to pay all of those expenses again, no matter what's going on in the world. And then again then try to park some away that can let it grow, but in a diversified manner that you're not taking on the simple risk of owning that still having 100% in that one company stock because again, you sold your business if you still own the stock. Well, who was the key asset in that business? You were.
You're hoping that the person that buys your business is going to be as successful as you. They're obviously hoping they're going to be as successful as you were.
But what if they fail and your stock was you still had the stock. I would not want to trust another person managing a business that I still a major stockholder and that I no longer have any deciding factors on how the business runs day to day.
So I'm definitely going to guide, obviously look at the taxes, look at all the things, figure out what we can do to help them save tax. So you don't want to sell off all the stock if there's a huge capital gain and kill the client with a major tax bill. But we're going to try to diversify it and use different strategies that are out there to start diversifying and paring down an over valuation of one particular entity.
[00:35:39] Speaker A: Now, before we move on to the next segment, I want everyone to understand that this is stuff that is worth writing down, taking note of and, and really contemplating and working with somebody that, that actually understands what needs to happen. But coming up in our final segment, I want to move far beyond the numbers. If, if retirement is not simply the day you just stop working, what are you actually retiring toward? And how do you design wealth to support a better life? So don't go anywhere. We'll be right back with more more Biz Talk.
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Now we are back in a fun conversation with Dominic, a financial advisor, a wealth strategist. And his mission is to help people redefine retirement with strategy. Really, strategy is designed to protect wealth, strengthen financial security, and support a better quality of life. But not only that, it is to also support the next step in your dream, in your fulfillment in a stage of life that is unknown to everyone until they're there.
So really, the ultimate purpose of a financial strategy is not simply to produce a larger statement, right? It's to give people more choices about their time, family, work, purpose, generosity, and the next chapter of life. So diving into this, Dominic, I want, I want to ask a bit of a different kind of question here. Do you have any advice or guidance for those that are transitioning from the stage of life where they're building, building, building, building to a stage of life where they're no longer obligated to work on this thing. They've got this, this money now to live off of.
Can you help people understand what's it like to move on to the next thing and to find purpose and fulfillment in this stage of life?
[00:38:10] Speaker B: That is a great question, and that's the crux of a true retirement plan.
Because what you don't want retirement to be is a chore. You don't want it to be aimlessly, just working through the world. What so I always ask a client, when they're telling me they're ready to retire is what is your dream retirement? What do you want to do with your dollars? Not how we're going to spend them, but what do you, what is your goal for them? I will, I'll work out the numbers on how to help it work, but what you know, because I need to know what they want to do. Because some clients want to travel a lot. Some clients have hobbies, some clients have grandkids they want to see.
So I need to know what their picture of that perfect retirement is.
Because I want to make it the best vacation of their lives.
And I can only do that if I know what they want. Because, Ryan, you're going to tell me what you and your wife want. I'm going to tell you what me and my wife want.
I'm going to bet they're going to be different. Some way, shape or form, they're going to be different. We're both going to be retired, but it's different.
That's what I get clients understand. What do you want your retirement to be? How do you want to live it? You know, I met, I had a couple the other night. You know, client there, he's retiring in the next six months and basically he's like, look, I'm not You know, he doesn't have the greatest health. He's like, I want to retire, I want to live my life and I want to travel as much as possible for as long as I can.
So we're going to front end, load his retirement, make sure there's enough, you know, for his family on the back end. But he wants to travel as much and, but I only got that out of him by talking to him, asking questions. Because again, we can always, we, you know, everybody assumes I'm going to retire.
Let me just plan everybody the exact same plan. Never, never going to work. Because if the client doesn't understand what they want, the numbers mean nothing.
Because if I could say, oh, I'm going to get you 5,000amonth, they might only need three, they might need seven, they might, you know, they might need five to live on, but they might want to know that there's a budget, that there's 10 to 15,000 to travel with a year.
So I need to know what they want. And once I know that, then and only then will I build them that plan to show them where each dollar will come from to accomplish each one of those enjoyments and goals in retirement. Because look, I hope one day to have grandchildren. I hope to take them on trips like I've done with my children, you know, so that's a goal of mine.
I know grandparents that either don't think they're ever going to have grandkids or they think it's their kids responsibility to pay for the vacations and they just want to visit them every once in a while and give them a trinket. There's no right or wrong answer to that, but there is a right answer for the person I'm sitting in front of to make sure that what they want is most important. So I need them to answer the question of what they want in a dream retirement.
And then only then can I make sure that we can help them plan for it.
[00:41:11] Speaker A: I love how you put that. There's no right or wrong answer. It's, it's individual. It is not one size fits all. Everyone wants something different. And the fact that your interest, your passion is to help them understand what it is they're really after, what it is they really want out of that stage of life and how to turn that from what some people think is a really scary part of life.
Turning it into an exciting time, a time of experience, joy, and just being able to really focus on some of those things that matter most. Now I've had the privilege of working with people in the later stages of their life and consistently, I can say it always boils down to they wish they spent more time.
It's not they wish they worked more. It never, never heard that some, someone say they wish they worked more in that stage of life. It's always, I wish I would have spent more time with family or traveling or pursuing this hobby or passion or whatever it may be. And I think what you do, one of the most important parts of what you do is help people understand what they can actually accomplish in that part of life. And it's easy to misunderstand that, overlook it, because frankly, a lot of entrepreneurs, their identity is tied to their company. And when that company is gone or when they step out of it, it changes a lot of stuff. And maybe they struggle with who they are. But one question I do have, because you talked about, you know, you and your wife might like something different than my, me and my wife. What happens when a couple kind of wants something different from each other? You know, how, how should couples and families talk about retirement goals when they may have very different expectations about lifestyle, spending, work, travel and, or legacy?
[00:42:48] Speaker B: You don't understand how great. I love that question.
I actually have some great insights on that because I actually was in money wise a couple months ago talking about the exact same question you just answered about the wife says no, the husband says yes, and they don't get it. So what I'll do is I will sit down with both of them because both opinions matter. And that's a big misnomer. You know, people like, oh, they're, they're the one, they're the ones that have the money, so they matter. No, husband and wife, no matter who has the money, both are important in a decision.
So I will sit both of them down, have both of them draw up their retirement goals and dreams and their budgets individual, what they think is needed.
Then we'll sit down and we'll put together the pros and cons of both answers and build a plan based on parts of what both want and show them that, yes, you're important for this, you're important for this, but ultimately you're getting in the retirement age. So let's figure out how you both can be happy. Because you can't address just one. You can't look at one answer like, my wife is retired. She's a teacher. She wants to retire in two or three years.
I love what I do.
I can work from anywhere almost. I make my own schedule. I've got a sophomore in college And a sophomore in high school. Right now I'm probably going to want to work another at least 10 years, if not more.
So I'm going to work longer than she is. But we crunched the numbers, we looked at how it can work, and I said, yes, honey, we, you can retire. We're going to be fine, we're going to be good.
She might do some consulting on the side because she, because of her age, she would be bored staying home.
But she's going to do it on her peace of mind and her timeline because we looked at the numbers and sat down and crunched everything. And that's what I would suggest with any couple is get a third party person if you can't do it on your own and let them help you figure out which way to go, because that's critical.
[00:44:46] Speaker A: You know, I love that because really there's so many reasons why I love what you just said, but one in particular is, you know, being able to get on the same page and see the same vision is not always a guarantee and it's likely not going to happen right away every single time.
People want different things all the time. But getting on the same page and seeing what's possible in working as a team, you mentioned, you know, maybe one made more of the money. So it's like they're more important. No, if it's a husband and a wife, it's a, you're both important. It is. You're doing this together, you're in this together. The decision needs to be made together. And you become an advocate for making sure they get what they're looking for. And I think that is so undervalued in not only just financial life, but in relationship.
Now, it's kind of interesting because you said, you know your wife's teacher. My wife is a charge nurse at a pretty big hospital here in Houston. And I know she's gonna want to retire me. I can do what I do until I die. I'm actually hoping when I'm old and probably decrepit, I am still standing on a stage somewhere motivating, inspiring, and helping people overcome barriers and boundaries because I can do it anywhere. I can travel around the world and still do my job, no problem. Now, my wife, she doesn't necessarily think so, but getting on the same page for stuff like that is extremely important. But you know something? I am kind of curious because inheritance, the word inheritance can cast a lot of shadows and concern. And I know we don't have a lot of time left in the segment, but what can you say to our audience that's listening in a way of how to understand, how to not let inheritance become a problem in a family dynamic in the retirement stage, when your family knows you've got a lot and you're planning on leaving some inheritance, how do you handle that with a couple?
[00:46:32] Speaker B: Well, I talked about it earlier. That's a great question. First of all, you know I will especially, you know, I will always try to gear my clients towards having long term care because you never know what family's going to decide when they're going for care. If it's paying for this really cheap carer getting you the best care possible.
You obviously want to get the best care possible because it's your money.
They might say we could save a few bucks and get a larger inheritance.
So I'll always address that and say, look, we can get you long term care and then your dollars don't matter to what they're, how they're going to decide how they spend it and take care of you because you've already pre taken care of it on your own.
Also make sure everything is written out appropriately with documents because that can be the biggest nightmare because then family's like, well, they promised me that or they promised me that.
So always have beneficiary laid out, have your wills, your trust, your health care proxies, power of attorneys all in place because then, you know, whatever you want to be dispersed to who and how is going to get done.
[00:47:38] Speaker A: Yep.
[00:47:38] Speaker B: And you're not having your children not talk to each other or your beneficiaries, if there's not children for the rest of their lives because they're fighting over something that you could have easily laid out properly while you're alive. And that's something we address with all of our clients. Whether it's something we help them with through an estate planning platform we use or if they're more detailed, we go to a state lawyer. But we want to make sure, because that's the biggest fight I see is the families that when they're trying to disperse the assets and the valuables because nobody, you know, everybody said, well, they told me this and they told me that if it's all legal documents, there is no, they told me that there is nobody.
[00:48:15] Speaker A: Exactly. Documentation is king when it comes to something like that. Like you said, it's not worth having a family tore apart over. I know I've seen it many, many times and families and, and people I've met throughout business life, but it's, it's just not worth having that event turn into a death match between your family members. But, Dominic, I want to. I want to thank you so much for being on the show today and for helping us look at retirement not as an ending, but as another strategic transition that deserves the same clarity and intentional planning we bring to building a successful business in the first place. So, for everyone watching, building a successful company is an achievement, don't get me wrong. But building a life that gives you choices after the company is the next challenge. Again, I'm Ryan Herpin. This has been biz talk. And understand, success is not given. It's earned. We'll see you next time.
