Latest / The ROI Online Podcast / [Feature Friday] Bernard Reisz on Principles for Financial Success - The ROI Online Podcast Ep. 58

Transcript

[Feature Friday] Bernard Reisz on Principles for Financial Success - The ROI Online Podcast Ep. 58 · The ROI Online Podcast

• 0:03
  Bernard Reisz: If people may think of tax and financial as a science, as purely technical, you can put it in a spreadsheet.
• 0:12
  Bernard Reisz: And it can be nothing further from the truth. So it really begins with a discussion. And through that discussion, certain things begin to coalesce, right?
• 0:22
  Bernard Reisz: Because it begins with you.
• 0:28
  Bernard Reisz: Where are you financially? What are you open to? What are you doing? There are so many, there's no one right way. Now, once we kind of begin to flesh that out, things begin to coalesce, then we can drill down into the specific items. So we can look at your business and say, Okay, are you structured optimally for taxes?
• 0:52
  Steve Brown: Hi, everybody.
• 0:52
  Steve Brown: Welcome to the ROI online podcast where we believe you, the courageous entrepreneurs of our day, are the invisible heroes of our economy. You not only improve our world with your ideas, your grit and your passion, but you make our world better. I'm Steve Brown. And this is the place where we have great conversations with winners just like you while we laugh and learn together. Bernard Reese, welcome to the ROI online podcast.
• 1:29
  Bernard Reisz: Steve, thanks for having me. The first time we did this was awesome. And I'm sure the second time is going to be even better. Even better. It seems like
• 1:41
  Steve Brown: we get better at these things. But I think we've had, and we thought about that conversation. And so I think we probably can build upon it. I just was not happy with the audio. And I don't think that it would do you justice. And anyway, I appreciate you taking the time. So let's give folks since this is the first time they're meeting them, but not my first time meeting you. Let us tell folks a little bit about you. Your the statement you have is financial self determination, and empowerment. Tell me a little bit or tell us about what that statement really means about how you approach helping people get their act together.
• 2:25
  Steve Brown: No.
• 2:27
  Bernard Reisz: Air? Yeah. Yes, there's so much to unpack. I'd say there are primarily three principles really, that I'm trying to give expression to in that. The first one is, is that you cannot kind of shift the risk and reward for your financial choices. So no matter who you hire, and how many professionals you engage, as good as they may be, or as awful as they may be, the risk and reward, ultimately lie with you.
• 3:01
  Bernard Reisz: And so you have to remain, you're always at the helm, the choices are yours. So that's the first thing, you can't transfer that. So you've got to take responsibility no matter what you do. It's always about self determination. That's one part of self determination. The second thing is, is recognizing that you have your own financial journey. And the overwhelming majority of financial folks out there are trying to sell you what they've got an inventory.
• 3:32
  Bernard Reisz: So it may not be a physical product and inventory. But they've got a tax product, a life insurance, product and annuity product and mutual fund, real estate, whatever it is, they're kind of to sell you what they've got the price, you know the outcome of their journey, you need to take all of those and determine your own journey.
• 3:55
  Bernard Reisz: So you need to realize that, hey, these guys are selling me their thing. But what you need to do is say take a step back and create your own journey in alignment with your own values, your own goals, because everybody's got different goals.
• 4:09
  Bernard Reisz: The goal, some people yes, they want it, they think the one that dies with the most just not as the way to go. And some people there are more values. So it's kind of you've got to craft it yourself. So the second component of financial self determination is recognizing that it's your journey. And the others that are there are to provide you with the full array, the full context, so that you can choose and navigate. So that's the second part of it.
• 4:36
  Bernard Reisz: The third component is is more about the empowerment. Most financial professionals want to foster dependency. They don't want you to actually take charge, the way they're able to generate revenue when the way they earn your business is by keeping you feeling like you're Little in the dark, like you're a little you need them. Without them, you're stuck. And so ironically, they do not want to empower you. And what you need to be is empowered. Because again, it comes back to self determination, making your choices. And the only way you can do that is if you're given the knowledge and expertise, so that you're empowered to reach financial self determination.
• 5:27
  Steve Brown: So when you talk about all of those, those three things, responsibility, recognition, empowerment, there's, that really highlights that there's not one silver bullet that you can find. And I think that's kind of, for whatever reason, we're looking for that one guy, that one girl, to just give me the silver bullet, so that I can set it and forget it. And your whole system there says, No, no, that's wrong.
• 6:08
  Bernard Reisz: Yeah, there is no silver bullet or golden toilet.
• 6:14
  Steve Brown: Golden toilet there, it's just came out right there, it's hard to say that without smiling
• 6:20
  Bernard Reisz: really big in it.
• 6:20
  Bernard Reisz: It's awesome. Since you've introduced me to that it kind of runs through my mind a couple of times a day. Because it is such a great metaphor. It is so true.
• 6:33
  Bernard Reisz: We are surrounded by golden toilets. And I mentioned, I think I shared this with you.
• 6:39
  Bernard Reisz: And perhaps you already aware of it, somebody created a sculpture. An actual golden toilet, I think was on display at some point Museum of Modern Art in New York where I am. So golden toilets, we all got to think about that. And I think I would love to hear you know, I've, you wrote the book. But if and I've got, I've tried to I've shared this online and my feeling about golden toilets.
• 7:06
  Bernard Reisz: But if I can ask you even though you're the host, if you can kind of put it into a sentence or two, what's a golden toilet?
• 7:14
  Steve Brown: A golden toilet is this iconic representation of all this wasted money and effort. It's universal across all cultures, and we we fear wasting money on something and wasting time. And yet it happens all the time, especially in the marketing world. And I just found that it was a great way to stop the business, people's minds, their stop their brains, because they come in with their own prescription already written. And it's like this toilets got to be really pretty this website's got to be pretty searchable, and social media bowl. And if we hurry and give it to them, we failed them. And we, we don't prevent them going into the future and going, man, I put all this money on this, and it's not doing what I want it.
• 8:17
  Bernard Reisz: Yeah, that's and what's the beauty of that is how really universal it is. In the marketing space. I've, as a business owner, I have personally experienced that. And I've learned a lot about marketing, not enough to become an expert, but enough to have seen lots of golden toilets in marketing. And then when I saw that metaphor, and read your book, like this thing clicked in my mind that I'm like, well, in my industry in the financial space, there are golden toilets everywhere. And what I think if I can add a little bit of context, or maybe a little bit, perhaps the mentality that leads to this. I think there's sometimes, you know, things take, there's more nuance to everything, things take some effort, and we want to latch on to something almost like a lottery ticket. Like we think if we do this one thing that's gonna solve all our problems, and maybe trying to take the easy way out, rather than really thinking things through and taking an approach that's more integrated, more, you know, well thought out, well informed. So, ironically, I think trying to take kind of this easy ticket, but it you know, may disappoint.
• 9:42
  Bernard Reisz: The challenges, I think, with a lot of these golden toilets is that it takes us time to recognize that we've just flushed the whole lot down the toilet. So the sooner we recognize that, ironically, the better position we'll be in
• 9:59
  Steve Brown: Yeah, I think it's inherent in every industry.
• 10:03
  Steve Brown: There are the folks that go, Okay, I'm gonna be a dentist, or I'm gonna be a financial guy, or I'm gonna be a marketer. And part of your journey at the beginning is, I just need to make some money, I need to get some accounts, I need to get it in here, I need to pay some bills. But in that journey, if you don't start to go, Wait a minute, I've been This is not like I imagined, I need to address some things. That means that you, you stopped and backed up and started looking at the bigger picture about what's going on. And you're developing a perspective on your expertise that you could apply and make it more valuable to the people that you work with. But if you just stay in that, they asked for it.
• 10:50
  Steve Brown: So I'm going to give it to them.
• 10:54
  Steve Brown: Here's the menu, what do you want pick one. And there, I got that one done next. That's, that's, you know, the conversation that you had with me, it was like it really is inherent in many applications in many domains.
• 11:12
  Bernard Reisz: I'll get share an incident. Again, I've had these daily. And that's what's driving me to perhaps even free create the kind of services that I offer, because I perceive there's a huge void and a huge need in the financial marketplace. So for example, something that I've been dealing with over the last couple of days, is somebody that got in touch with me, he was about to put money into captive insurance, not captive insurance is a broad area. But when you're going to encounter small business owners, successful small business owners that are getting into this thing called captive insurance, it's all about the tax deductions. It's supposed to be a tax play. And the people that will introduce this most often to business owners will be a life insurance agent. And occasionally, their account will or somebody that cold bills himself as a financial advisor. So this fellow was about to put his money in here, he needs some big tax deductions. And he just wanted to get a second opinion.
• 12:21
  Bernard Reisz: So, you know, I just had the conversation with him. The first thing we identified, which I was shocked by, was that nobody told him that this is an IRS listed transaction, which means to say, if you engage in this transaction, the IRS has identified this as an abusive tax shelter. And if you engage in this, the IRS says, You got to tell us that you're doing this so that we're on notice that you did this doesn't mean it's illegal. But you got to let us know, if you don't let us know the penalties are severe.
• 12:52
  Bernard Reisz: And if you do, let us know. All right, that's a kind of an order red flag, nobody wants to be in that position. So I was kind of blown away that nobody even informed the business owner of the inherent tax risk. And that's not why I'm necessarily opposed to it. But my problem with that is that you have to share the information with him, so that he can make a well informed decision. So suppose he gets into this captive insurance arrangement. he's thrilled, right? Because on his tax return this year, he's going to report that he took a $200,000 tax deduction. And for some business owners, it's 2.2 million tax deduction, and he is thrilled.
• 13:41
  Bernard Reisz: But he doesn't recognize that he's walking around with this huge liability, the IRS may become an after him. Now, when you think about your financial world, you want to think about your risk, adjusted return, right ROI. It's about risk adjusted ROI. And again, your ROI online because it's all about ROI. And it's all about risk adjusted ROI. And, you know, with that perspective, we take this risk, would he say, all right, this is a Can I just say $500,000? in taxes, but at what price? So, these these kind of things like captive insurance. They're sold as like this easy thing you buy into the product. But in my opinion, this is an example of a golden toilet because people think they've gotten this silver bullet, when in fact they have not.
• 14:41
  Steve Brown: Think about that decision that sounded great.
• 14:45
  Steve Brown: Your business owner, you're trying to maximize every advantage that you can take advantage of legally. And I would imagine most of those people. They don't want to be are miles close to something potentially penalizing like that. And so not only if he would have taken advantage of it, here he is. He's increasing all this hazard on the other end of the fulcrum, if you will. I like your I like your risk reward. I'm picturing a, like a teeter totter.
• 15:29
  Bernard Reisz: Yeah, like a seesaw.
• 15:30
  Steve Brown: Yeah, that's. So that deal in him sounded like a slam dunk, why wouldn't I do this, but if he doesn't get the whole picture, and how it fits in with the rest of his business, I'm sure there are other implications that happen that he's not aware of,
• 15:48
  Bernard Reisz: Oh, yes, we just scratched the surface. And it, there's a void, part of the issue here is, is there's a void in the financial and tax advisory space. So the people that are selling these things, are just earning commissions, they're not the advisor. And so there's nobody that is really providing advisory services. And to a great extent, these are, you know, your accountant, usually does not have the expertise to actually analyze this. So your accountant will tell you that there's some risk associated with it. But beyond that, he does not have the specialized knowledge to really review the structure. And then if your accountant says, Okay, I'm gonna charge you $10,000 to review this and analyze this.
• 16:41
  Bernard Reisz: Alva sudden, it's not as attractive. So the, it ends up getting sold by people that are earning Commission's that don't even that will not they've got the conflict of interest. So they're not going to share the risk. But even more importantly, the people that are selling it aren't even aware of the risks, or the intricacies of the tax structure, they become a product that gets marketed. You buy it almost like buying a shirt. The difference is when you buy a shirt, you kind of you can touch it, feel it, what you see is what you get with financial and tax products. What you see is not what you're getting. So there's there's a real challenge and a real void in this space.
• 17:28
  Bernard Reisz: And frankly, I've been thinking a lot about this. And I don't even have a good response. You know, how do we fix this? It's like a systemic issue. And, and I don't even have the resolution for it. I'm thinking like, okay, Bernard can go out there. And we can do business that way. And we can say, all right, we have the expertise in all these spaces.
• 17:50
  Bernard Reisz: But Bernard is just one person.
• 17:55
  Bernard Reisz: You know, we can't, you know, how do we fix this? I don't have a good answer.
• 18:02
  Steve Brown: You know, you think, all right, I'm gonna, I'm gonna buy my products, my resources, and the best I can I'm gonna hire and manage my labor the best I can. And then it comes to these conversations here. And I'm totally feel like, I have my pants down. When I'm walking around. In that area, I have to depend I have this person that does check over my books, right, and make sure everything's squared away. But that I've never expected of them to have all this tax experience that would really optimize or, or present. Ah, Steve, did you know you could have been taking advantage of this? I wouldn't know where to start. I don't know who to go to that would be someone totally different.
• 18:54
  Steve Brown: Looking over a lot of the same areas. That's, that's in play with every business out there.
• 19:04
  Bernard Reisz: Yeah, it's very true. And this is something that I've been implementing gradually been moving away from actually doing tax returns and accounting work. And if people ask me, you know, prospective client, do you do tax work? And the odd what I tell them is I've the emphasize that, for the most part, no, not taking on new clients for tax work. I'd rather work hand in glove with whoever your tax accountant is, will provide kind of that higher level of insight.
• 19:35
  Bernard Reisz: And will navigate the niche areas of tax code for you and have your, you know, have your account, keep doing your tax returns because you can't do everything as much as as much as I would love to. And you can only spread yourself so thin.
• 19:54
  Bernard Reisz: And that's and what you've described is excellent. Actually the approach that I've been taking recently,
• 20:05
  Steve Brown: tax codes change drastically, and often don't think
• 20:11
  Bernard Reisz: it's insane, right? We got Trump totally revamped the tax code. And here's the thing about and now Biden, if he becomes president, he's already said that he's gonna rewrite the book again.
• 20:25
  Bernard Reisz: And the irony of the Trump, which is his Trump tax changes as an example. So the the Trump administration and the republicans and not have enough control over the legislative branch of government Congress to permanently rewrite the tax code. So a lot of the changes that they made, were were written to be temporary, because they couldn't rewrite it completely, it doesn't have enough votes to do that. So now we've got like this tax code, that's always changing. But even the they've added new sections, that we're going to be sunsetting, you know, even without anybody going in there without a President Biden, candidate, Biden, without a bite administration, the tax code is set to automatically change, because the Trump changes, many of them were temporary. So it is always changing. And part of the challenge is that they can actually to certain extent, rewrite it even kind of retro actively. So it is definitely a moving target.
• 21:32
  Steve Brown: Wow.
• 21:34
  Steve Brown: So is it a hard I mean, I can imagine that conversation with my CPA. Hey, I've got Bernard, he's gonna look over your shoulder and check in on your work. That presents a little bit of territory, we're stepping on some toes. What if you find these big mistakes? What if you don't, I don't know that that's like, I can imagine that's a little bit of a difficult conversation.
• 22:03
  Bernard Reisz: That is a huge, huge kind of elephant in the room that you've touched upon.
• 22:08
  Bernard Reisz: One thing that I tried to emphasize is that we really don't want the tax preparation work. It's we're different areas that we're focusing on. So there's really should be no business competition. On the contrary, we complement each other perfectly. The other component of it is really kind of doing a bit of a reset in the account, and client expectations and relationship. One thing that I think that has not that it's not in anybody's best interest, people always think All right, any tax question, any financial question, asked my account. Now, the account accounts are amazing, because as far as financial professionals go, accounts are generally just wired personality wise, to try to do the right thing, to try to do the right by you to pay attention to detail. And I think accounts would be more amenable to saying, Hey, this is not that's outside my realm of expertise. If the consumers not have this unrealistic expectation, that accountants are kind of tax omniscient, that they know everything. Frankly, it is in possible that is an unrealistic expectation. So we need to be do a reset, understand that your account is amazing at keeping the books.
• 23:41
  Bernard Reisz: He's amazing at getting your information in your books into the right place in your tax returns. And that is requires incredible expertise. By the way, these forms. If you've ever tried to look at your tax returns, you may think I got a civil business and you'll see your tax returns are 200 pages long. So it is it requires a lot of diligence to do that correctly. And it doesn't really leave space and time to go read tax code. as shocking as this may sound 999 out of 1000 accountants have never seen tax code, right? They have their get certain accounting resources that they may subscribe to read.
• 24:31
  Bernard Reisz: You know, they're better positioned to digest what Google feeds them. You know, if they're doing a Google search, but for the most part, they have never seen tax code. They don't look at tax code. So the expectation that they have, the knowledge about every single tax question that you have, is not is not realistic, and it would be better for everybody. If we kind of clarified that
• 24:58
  Steve Brown: on a pause here just for a month. moment and talk to you about a program that we have just released called ROI quickstart Academy for authors.
• 25:05
  Steve Brown: Every day, I talk to business owners just like you who struggle with quickly getting their fundamentals in place. We want to create a great foundation, and we want to grow our business. But the things that are in our way, our lack of knowledge about the specifics, we should put in place, what kind of technology what kind of messaging and what kind of campaigns, and that problem exists for authors as well. And we just chill so good with authors because, well, I'm an author, and I understand everything that you struggle with, you have a great idea, you have a great book, but what do you want to do you want to get your book in front of more people, you want to make it easy for them to find you learn how they can schedule a time to talk with you, how are you for a conference, or maybe sign up for the services that your book promotes? So what is the Quickstart Academy for authors?
• 25:58
  Steve Brown: Imagine working with a small group of like minded authors, and the experts from the ROI quickstart team, it's a great way to get your messaging clear to be confident with the technology in your marketing automation, and how to run a strategic campaign to get you more of what you want from the investment of your book. To learn more about the Quickstart Academy for authors, you can visit ROI online.com or click in the link in the show notes below. And now back to this episode. My book, The Golden toilet, I realized that the fundamentals were assumed to be in place, but term most often not. And then the fundamentals are disparate. They're not connected necessarily. One's conceptual, the other technology and then then your messaging so you need to like these four things are really get squared away and healthy. And I'm that's the framework that I present in the book. And I'm curious what's what's the framework to get me responsible and to recognize and empower me what what's your framework here to get our fundamentals in place.
• 27:24
  Bernard Reisz: So the way we kind of begin this is almost with the initial discussion, that is not really guided.
• 27:33
  Bernard Reisz: Because people may think of tax and financial as a science, as purely technical, you can put it in a spreadsheet, and there can be nothing further from the truth. So it really begins with a discussion. And through that discussion, certain things begin to coalesce, right, because it begins with you. Where are you financially? What are you open to? What are you doing? There are so many, there's no one right way. Now, once we kind of begin to flesh that out, things begin to coalesce, then we can drill down into the specific items. So we can look at your business and say, Okay, are you structured optimally for taxes?
• 28:24
  Bernard Reisz: We can look at your investments, we can look at retirement accounts, do you have them?
• 28:27
  Bernard Reisz: Don't you have them? You know whether or not you have the we can look at various tax shelters. We did speak about captive insurance. I'm not against captive insurance. I'm against ill informed and misinformed decisions, right?
• 28:41
  Bernard Reisz: syndicated conservation easements, I'm not against those. That's another example of kind of tax deductions in a bottle that has a lot of risk associated with it. It's heavily marketed. Many people out there think I'm against cash value life insurance. Absolutely not, I'm not against any of these.
• 29:03
  Bernard Reisz: I'm in favor of making well informed decisions about all of them. So then it's once we have kind of the basic framework of where you're at, and where you want to go. And that's part art part science, because it's very much about what you want to do where you're at your family situation, then we can drill down into kind of each of the sub topics individually. And most importantly, then we can see how they all come together, how they integrate, because you cannot view any one aspect of your financial life in isolation. What's needed is an approach that's multi dimensional and integrated. And so the approach that we take is kind of begins with getting to know you and then from They're exploring the full realm of financial opportunity that's available. Something that people are on that are very surprised to hear me say because people think our Bernards a CPA, so he's primarily a tax guy. And I tell people looking for current year tax deductions is, is oftentimes myopic, and one dimensional. Sometimes the better strategy for your wealth will actually require you to pay the taxes today, people and that surprises people. But when you have this kind of integrated approach, anyone to stand, the full realm of tools that are available, it can read lead to some pretty startling, but illuminating conclusions.
• 30:50
  Steve Brown: If I was consulting him, I would say we need to get a name on that there's commonalities in every process you go through. And we need to put a name on it, or an acronym, to help people start to grasp.
• 31:04
  Steve Brown: And because of folks that you work with, they go to journey, they go through a transformation during that process. I said, if you can help, Alright, here's our first step part of the journey. We're going to figure out this, then we're going to start to evaluate, then we're going to start to, to risk reward way over here. I think that would be like, Okay, so we're going to do this step. And I'm going to come out with way more knowledge than I ever have before. Because Truthfully, I go sit down, and they they talk about whatever that easement thing was. I don't know what that is, and then much less do I want to dig all into it? I'm just wanting to know, where does it fit in here? And if that is going to be and but guess who asked to make the calling? And guess who's on the hook? Me? So that if I was consulting you, I would help you figure out what that that little pieces there?
• 32:07
  Steve Brown: Because I think that would be extremely powerful.
• 32:12
  Bernard Reisz: That it that is pure gold? Not golden toilet, just pure gold?
• 32:18
  Steve Brown: So um, this golden toilet metaphor? Do you have a recent story where that fit in really well to other than the one that you shared? Yes,
• 32:31
  Bernard Reisz: there are.
• 32:31
  Bernard Reisz: Unfortunately, or fortunately, I've got a lot of these stories.
• 32:35
  Bernard Reisz: So that life turns people think I pick on them. Maybe it's because I do. The and again, it's not about the individual, there's a systemic issue. So the dealing right now with somebody that is not financially knowledgeable, a widow. And she collected life insurance proceeds. And now she has a lot of investable assets. And the question is, what do you do now?
• 33:13
  Bernard Reisz: What do we do with these assets.
• 33:17
  Bernard Reisz: And so her go to person is a life insurance agent. And he is advocating take all this money and put it into life insurance policies. And, you know, the pitch goes like this, put the money to life insurance policy, it's a cash value policy, the money that's in the policy, your cash value is going to grow. And that is tax free growth. And when you need money from the policy, you can pull out that cash as a loan, which will be non taxable. So life insurance is kind of the be all end all.
• 34:01
  Bernard Reisz: One size fits all solution to all your financial needs. It provides death benefit, provides investment, it provides everything. That's the pitch.
• 34:11
  Bernard Reisz: Now, the hardest thing to combat is things that have a, you know, part of that are partially true.
• 34:21
  Bernard Reisz: But, you know, I think the way that I'm thinking is the most effective way just people's people's attention about this is do you think life insurance companies and then we'll get to what the alternative is? Right?
• 34:31
  Bernard Reisz: And I'm not saying the alternative is the way to go.
• 34:34
  Bernard Reisz: The problem here is that the life insurance people are presenting a golden toilet, which is kind of you buy this ticket and then you're set when there's more room for a lot more nuance with Far, far better outcomes. So life insurance companies don't provide they don't have printing presses that print money. They're not giving charity Where do you think they get their money from? Right?
• 35:02
  Bernard Reisz: When they give you money? Where do they get it from? Right, so they take in your money. And they keep, they're making profit for themselves, right? They're paying the insurance agent 100% Commission, the first years commission is usually all that you pay in. And then in some states, it exceeds that I'm in New York, which puts a cap on that. So the insurance agent can only get 90% of the commit, you know, the money up front, other states are getting 110%. So, and some of these policies are very expensive, people are paying hundreds of thousands of dollars per year in premium. Now, some insurance company took on a couple hundred thousand dollars, they gave it to the agent, they're paying out death benefits, you get what's left, right, they're not it's all comes from the policy owners, there are no miracles here, there's no printing press, they take the money and they invest it, they pay their expenses, and they give you what's left. So it's highly unlikely that this is the best deal in town for you, because what they're doing is they're giving back your money. And your money is yours, and really means collectively, policy owners minus their expenses. So it's just impossible that this is the most efficient structure. So in this scenario, we're talking about the widow, you know, maybe she's not so objective, because she actually got a payout for of the death benefit, right. So there was a policy on her spouse, and he passed away unexpectedly, very young. And she collected millions of dollars.
• 36:47
  Bernard Reisz: But nobody buys a life insurance policy as an investment, thinking, hey, let's buy this policy, and then kick the can next year, and then we'll make Listen, I only paid $100,000 in premium. And now my beneficiaries get $2 million.
• 37:03
  Bernard Reisz: That's not the plan. So we have to kind of put that aside, and say, let's just look at the pure investment fundamentals. And in most scenarios, you know, the, once you have the fundamentals in place, and understand, hey, I'm not planning to die tomorrow, right. And unless somebody knows that they have a terminal illness and are committing insurance fraud, the insurance companies know your health, right? They have armies of underwriters whose job is to assess, and to make sure that we're taking in more premium than we're paying out in death benefit. Right. So you're not dying, you're not making money.
• 37:46
  Bernard Reisz: That way, you're not monetize the policy by dying. So you're going to put $100,000 in premium into this policy, how much cash value you're going to have tomorrow, it can be done a couple different ways, but you're gonna have a lot less than hundred thousand dollars in there, in your cash value, you may be 5000, maybe 10,000.
• 38:02
  Bernard Reisz: Technically, it could go as high as 85,000, depending how the policy is structured. But that's a lot of expertise to determine the best way for you. So what will normally be, the better way to go is to consider some form of investing, like real investing, don't give it the insurance company so they can pay expenses, they can invest it, and make profit and give you the leftovers, invest it yourself and see what that returns you. And then when you come here and try to approach it from a multi dimensional perspective, you're going to arrive at a whole other suite of options. That's not one size fits all. But again, you'll explore bonds, stocks, mutual funds, and how to do that. But we what we have now, is the life insurance persons promoting this golden toilet, which is not in this widows or anybody's best interest.
• 39:05
  Steve Brown: Yeah, she's endeared to the insurance agent who delivers the death benefit.
• 39:09
  Steve Brown: It's, you know, this found money so to speak. And so she's going to be like, what, how, what can I lose? That's an easy way that I'm I'm, I'm upset over this death. And it's nice that he can just help me like, flip this and get it going and get that worry out of my hair. I can see how the easy silver bullet option would just make sense when I really don't want to sit and think about all these different considerations. I wouldn't want to consider these other considerations a little bit down the road instead of Oh, why why did I do that silver bullet option when I'm now it's my perspectives different
• 40:01
  Bernard Reisz: Yes, it's, it's all about To what extent we're ready, ready to engage and think. And the question is, how do we put things? And this is this is a question that is not real. This is a real question.
• 40:14
  Bernard Reisz: How do you put this in perspective for people? And one of the biggest challenges is, is that the cost of all the things we've discussed, are costs that they do not see, right with the captive insurance and syndicated conservation easement, or the QR p that they shouldn't have that cost the IRS risk. The the potential penalties, it's not there on their account statement, right. So the costs that you don't see, those are the most pernicious. And those are the ones you have to think about that with the life insurance. Okay, you can see a certain amount of policy costs built into the statements, if you have any, if you know how to read them, you got you got to be a, again, I don't even life insurance agents don't know how to read those. But the but the bigger cost is always is actually the cost of missed opportunity. Right? In this route. Your your net worth and net wealth is going to be x in the other route, it could go, you know, it can be 10 times or 100 times as much. That's, that's totally realistic. And but that missed opportunity, that opportunity cost doesn't show up in the statement. So people don't see it, they don't see like, hey, if I would take this hundred thousand dollars, and put it into a reasonable investment, and it would compound over time, that can turn into 10 times with the life insurance policy would be worth.
• 41:57
  Steve Brown: That's excellent.
• 41:57
  Steve Brown: to somehow be able to show the opportunity cost as a line item on that policy. That would be huge. And would be like shocking. So Bernard, what's, what's the kind of what's the perfect person that would enjoy working with you? Help us envision who that would be.
• 42:29
  Bernard Reisz: It would be a thoughtful person. I think that's the key thing, if I had to put into one word, be somebody that is thoughtful. You know, people don't.
• 42:40
  Steve Brown: That's everybody that listens to this podcast, by the way.
• 42:44
  Bernard Reisz: Okay, so bring them on. It is I'd be amazed with the people that want to, I've learned that there are certain people, there was a time where I used to think like, wow, I lost that. Right, that person, I could have helped them so much. And we spoke and maybe I lost it somehow it slipped through my fingers. And and it's their loss and my loss, because could have been so much value added to them. But then I realized that you have to work with the I didn't lose those people. They weren't really a good fit. So right, the people that are like minded, that want to take responsibility. But again, take responsibility doesn't mean that you're not going to have the support. It's the responsibility that you have, regardless, it's just that somebody else may be, you know, or allowing you to delude yourself, that it's not your risk reward, it is your responsibility. And so somebody is going to recognize that, hey, this is your risk reward. And my role is just to support you as well as possible. And I think that it's recognizing that there are certain kinds of people that are a great fit, and some that aren't, and looking to work and help those that are really going to derive the greatest benefit and appreciate the value.
• 44:20
  Steve Brown: Like that, you know, when people ask me who's the best client, you know, they, they're the thinking industry.
• 44:30
  Steve Brown: But I'm thinking progressive minded leader that realizes I need to really embrace this because it's a big competitive advantage, but we're going to have to be responsible and recognize what we need to do and we're going to empower them in the end. With them being competitive advantage. It's it's I love how you've taken the concept of my book and applied it to the other domains, but There's a common theme and many of these challenges that people face.
• 45:05
  Bernard Reisz: It is true. And because something that I say, and avoiding the politics behind this, the National Rifle Association, the NRA, right, they say, guns aren't dangerous people are. And people are people. We're humans, whether you're an accountant, you're a marketer. Whatever you are, we're just humans. And so the challenges and the tribulations, the victories and triumphs, if you kind of strip away the superficial layers, they're, they're gonna, there's gonna be common themes, like people ask me, What are you? And too often, I just want to be human. Like, they're expecting an answer.
• 45:54
  Bernard Reisz: Like, I'm an accountant. I'm a financial advisor. No, I'm a human. We're all just humans.
• 45:59
  Bernard Reisz: And that's like 99.9% of, of it.
• 46:06
  Bernard Reisz: You know, what we are particular calling is, is just so such a small, infinitesimal component of what defines us.
• 46:16
  Steve Brown: There's a golden nugget for folks. We're only human and working with other humans. So Bernard, you're on LinkedIn? Where else can folks find you have a conversation with you maybe go to this framework with you.
• 46:38
  Bernard Reisz: Yeah, I can give you a partial answer, because I think some of that answer has to be created. The right now, certainly on LinkedIn, and I tell people, you can just Google my name, Bernard Reese, that's Rei z. Got lots of stuff out there lots of different topics.
• 46:55
  Bernard Reisz: You got to be you have to enjoy technical stuff and thinking. So it's not Kool Aid or fluff. A lot of substance. You can find a lot of page of those, most of them at 401 k checkbook calm.
• 47:11
  Bernard Reisz: And that's a website where that's dedicated to helping people use tax sheltered retirement accounts, IRAs 401 Ks q RPS for alternative investments, that's real estate, cryptocurrency hard money loans.
• 47:30
  Bernard Reisz: And that is really in line with so much of what we've discussed.
• 47:36
  Bernard Reisz: Your financial advisors and sales people are looking primarily to sell pre packaged products. And in align with my philosophy, I believe in giving people to control if you've got an angle on real estate, you should have a financial professional that knows how to serve you and knows the tax code that applies to that. not restricted to mutual funds. So at 401 K, checkbook calm, reserved financial, lots of resources for you.
• 48:06
  Steve Brown: Norden, Reese, you've been a great guest, this was, you know, you think we're going to talk finances, it's going to be boring. Spin.
• 48:13
  Steve Brown: Excellent. I've enjoyed it very much. Thanks for being on ROI on my podcast, man.
• 48:23
  Bernard Reisz: Steve, thank you for having me. There's everything about what you do.
• 48:25
  Bernard Reisz: Just resonates with me, ROI. I love that ROI. It's got a focus strip away. You know, it's all about ROI and finance in business and marketing, and the golden toilet thing. I just love that. So everybody, you're listening. If you don't have Steve's book yet. You should get that book. Not for marketing necessarily. Of course, you should get it from marketing.
• 48:53
  Bernard Reisz: But you should get it kind of learn about life, because golden toilets are everywhere.
• 49:00
  Steve Brown: I love that. What a great episode. That's a wrap.
• 49:07
  Steve Brown: Thanks for listening to another fun episode of the ROI online podcast. For more be sure to check out the show notes of this episode. And feel free to connect with me on LinkedIn where we can chat and I can help direct you to the resources you're searching for. To learn more about how you can grow your business better. Be sure to pick up your copy of my book, The Golden toilet at surprise, that golden toilet.com I'm Steve Brown, and we'll see you next week on another fun episode of the ROI online podcast.