Latest / Money Matters with Greg / Episode 156: The Power of a Plan: Why Financial Planning Creates Peace in Turbulent Times

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Episode 156: The Power of a Plan: Why Financial Planning Creates Peace in Turbulent Times · Money Matters with Greg

• 0:00
  Speaker 1: with a fresh perspective.
• 0:01
  Speaker 1: Join Greg and his guests each week to get inspired and take control of your financial future.
• 0:07
  Speaker 1: Let's get started.
• 0:08
  Speaker 1: Securities and investment advisory services offered through LPL Financial, a registered investment advisor.
• 0:13
  Speaker 1: Member FINRA SIPC.
• 0:23
  Speaker 2: All right, here we go, excited for another episode of Money Matters with Greg.
• 0:28
  Speaker 2: I'm Greg Farrell, ceo and President of Farrell Wealth, excited to be here today.
• 0:32
  Speaker 2: Here this week of April, here in the Midwest we finally have some great weather and we're very excited about that.
• 0:39
  Speaker 2: I hope you and yours had a wonderful Easter and I hope you have a great month of Easter going forward here into the spring.
• 0:47
  Speaker 2: It is spring in the Midwest.
• 0:48
  Speaker 2: We are all different people in the Midwest in the spring as things sort of come out of the winter doldrums and getting through things.
• 0:59
  Speaker 2: This show is Money Matters for Greg.
• 1:00
  Speaker 2: I'm Greg Farrell and we broadcast on WVLP FM 103.1 and also podcast wherever you pod.
• 1:09
  Speaker 2: So very excited to be able to be here today.
• 1:11
  Speaker 2: We are probably going to do about a 20, 25 minute podcast and get through this.
• 1:16
  Speaker 2: We've been really inundated with the market and the movements of the market recently, so the last few casts had been all about tariffs.
• 1:26
  Speaker 2: It's just amazing.
• 1:27
  Speaker 2: In my career I traded through the devaluation of the peso.
• 1:31
  Speaker 2: It was the first big black swan event that I had to go through.
• 1:35
  Speaker 2: Black swan event is, for those that don't know, something that really wrecks and disrupts the markets that nobody saw coming.
• 1:43
  Speaker 2: So devaluationofthepeso, dot com boom, dot com bust.
• 1:50
  Speaker 2: I also traded the pharma debacle.
• 1:51
  Speaker 2: That was in 1990s, with the Clintons coming in and attacking pharmaceuticals.
• 1:56
  Speaker 2: Pharma's were just hammered.
• 1:59
  Speaker 2: Many of the stocks were halved, if not dropped by 75%.
• 2:04
  Speaker 2: So traded through that Dotcom boom, dotcom bust.
• 2:08
  Speaker 2: I saw many, many things go all the way to 1,000 and come all the way back to zero.
• 2:12
  Speaker 2: So, traded through the Great Recession, decided to start a new business and go in the financial advising world and financial services world and start Feral Wealth.
• 2:22
  Speaker 2: Right about that time great time to start a a business when the stock market basically got cut in half and then went through the Great Recession in 2008.
• 2:34
  Speaker 2: So that was awesome.
• 2:36
  Speaker 2: And then a pandemic in 2020.
• 2:38
  Speaker 2: And nobody had ever traded through anything like that in the history of the universe.
• 2:43
  Speaker 2: No one was alive during the Black Plague, so that was about it to compare it to.
• 2:52
  Speaker 2: And now we've got to trade through a trade war.
• 2:54
  Speaker 2: So it has been nuts, it's been crazy, it's been volatile and investors have been asking lots of questions, and that's why we've dedicated the last two pods to those topics and we will continue to do that.
• 3:08
  Speaker 2: We try to, on this show, bring as many guests as we can so you don't just have to look at my face for radio here on YouTube, but also have to listen to.
• 3:19
  Speaker 2: So it's always nice to have great views.
• 3:23
  Speaker 2: We'll bring in more people as things sort of settle down here.
• 3:26
  Speaker 2: But today, as far as the topics I wanted to really talk about was the benefits of financial planning.
• 3:31
  Speaker 2: I think the one thing that has resonated with us are the people that have a plan and are working the plan are much calmer in times of stress that have been just recent with the tariffs and the trade war that we are ensuing or is occurring.
• 3:54
  Speaker 2: These are things that we really need to be concerned or thinking about, and so those with the plan have been much more calm, or at least sort of calm, and I just thought I'd go over the benefits of financial planning, preparing for your goals and kind of start from there, and then we're going to drop into millennials and some of the things that we see we can help with on the millennial side as far as growing your wealth as well.
• 4:26
  Speaker 2: Before we get started, though, I want to be able to say just a little disclaimer.
• 4:29
  Speaker 2: I always like to say here the opinions voiced in the podcast are for general information only and are not intended to provide specific advice or recommendations for any individual.
• 4:39
  Speaker 2: To determine which strategies or investments may suit you, consult the appropriate qualified professional before deciding.
• 4:47
  Speaker 2: Thank you for that.
• 4:49
  Speaker 2: I appreciate your patience In regards to that disclaimer, the benefits of financial planning.
• 4:54
  Speaker 2: Let's talk about how we can help you learn a little bit about financial planning and people, you know.
• 5:01
  Speaker 2: Let me just talk about why people say yes to financial planning more than anything else.
• 5:06
  Speaker 2: There are a lot of people that say no.
• 5:09
  Speaker 2: There's reasons for that, whatever they might be, but in our world with our high net worth individuals and ultra high net worth individuals that we work with, the families, we work with the institutions, we work with the business owners we work with we really want to be able to start talking about.
• 5:29
  Speaker 2: Like you know, in the hierarchy of where they see their professionals and their team, typically the top tier, the top person, is their lawyer.
• 5:39
  Speaker 2: Let's be honest, that's the person that they're going to call when their kid's in trouble, when they're in trouble, when they need something fixed, and that's usually the top tier.
• 5:52
  Speaker 2: Then it goes to an accountant right below that or, if not, right next to it, and I certainly regard that as those accountants are the ones that are going to help, obviously, minimize taxes, have tax strategy, come up with making sure that they're safe in regards to a tax strategy and making sure they pay their taxes on time all of those things to keep them compliant If they're a business owner or a family paying taxes as well.
• 6:21
  Speaker 2: And then we, as financial advisors, try to stay, you know, right in that world with that team and have conversations in regards to estate planning and all the other things that go about.
• 6:33
  Speaker 2: Now that is where we see our space, or where we see our spot, but most of the time it goes basically down to a Mercedes-Benz dealership or dealer or, you know, salesperson, and then we're considered below that at times in our industry, which is, you know, our job is to stay up in the top realm and show the importance and add the value to families and so grow that wealth, create that wealth, protect that wealth, distribute that wealth in life and distribute that wealth after death.
• 7:11
  Speaker 2: So that really comes with a plan, and before you get to that plan you really have to know the benefits of financial planning.
• 7:20
  Speaker 2: That's what I want to talk about today.
• 7:21
  Speaker 2: Financial planning really pulls together sort of all your finances and organizes them to help make the management easy and effective.
• 7:30
  Speaker 2: And the more you understand and better manage your wealth, the more prepared you are for the goals and the dreams and the unexpected events.
• 7:39
  Speaker 2: Hence the calmness has sort of come from clients that have a plan, and what a financial plan can do is help you see your finances so of how money relates to you in your life and your financial activities, you know what are those things that you really want in your life, that you want to be able to make sure you can do, that you can pay for, whether it be kids, college education, grandkids college education or any higher education, no-transcript.
• 8:50
  Speaker 2: Where does that money go?
• 8:52
  Speaker 2: You get a raise and really just sort of develop different perspectives in regards to all things that money, and that's why we started the show.
• 9:03
  Speaker 2: The show Money Matters with Greg is all about about money.
• 9:05
  Speaker 2: So how does money affect everybody's lives?
• 9:07
  Speaker 2: And what we really try to empower people is to take control of their financial future.
• 9:14
  Speaker 2: Um, as much as we try, as much as hard as we try to be the best we could possibly be, uh, to help, uh, clients, uh, it's not a, it's not a one-on-one street.
• 9:24
  Speaker 2: It has to be two ways.
• 9:25
  Speaker 2: The clients have to be willing to be able to have sort of accept the pace and the complexity of managing modern life and really sort of being prepared to not be unprepared to manage your finances as well.
• 9:41
  Speaker 2: And if you're feeling less confident about your future, having a well prepared financial plan can help that kind of be put in control.
• 9:50
  Speaker 2: I was related to cleaning your closet or cleaning your garage or being organized in your life.
• 9:57
  Speaker 2: Well, that doesn't, you know, financially is most important.
• 10:02
  Speaker 2: Might be okay to have a dirty garage, but you know, being not having a dirty or disorganized financial life really really hurts and it's stressful, it adds stress.
• 10:13
  Speaker 2: So to manage your income, your expenses, throughout your lifetime, it's really just.
• 10:19
  Speaker 2: You know it's not easy.
• 10:21
  Speaker 2: And to consider, you know, using a partner and having someone you have your lawyer, you have your accountant, you have your financial advisor it's not easy.
• 10:24
  Speaker 2: And consider using a partner and having someone you have your lawyer, you have your accountant, you have your financial advisor.
• 10:29
  Speaker 2: He really has experience to help you and ask the questions and also bring to you the laws that are changing, the ideas that are happening years in regards to benefits that many people don't even know about, in regards to new laws that can help you achieve financial success.
• 10:52
  Speaker 2: So one of the things we say, you know we always get on the objections of okay, greg, you know financial planning, I don't really need it.
• 11:03
  Speaker 2: You know it's not really important to me or um, I've got, I can do it myself for sure.
• 11:09
  Speaker 2: You know it's really kind of if you're considering hiring a financial advisor or whether you're pursuing, maybe, financial planning in um in your career, you know the one big pushback we always get is it's too much work.
• 11:24
  Speaker 2: Your advisor is specifically equipped with tools and experience to help you sort of build a customized plan with the least amount of work for you.
• 11:34
  Speaker 2: Without a doubt, that is what we try to do here and where many advisors do in a very good job of what they do as well is to limit the amount of work for you.
• 11:45
  Speaker 2: You know there might be some things, that it's going to be a give and take early on, but there's going to be a lot of stuff that's going to be worked out over time and we always talk in our world as a wealth 360 process.
• 11:54
  Speaker 2: You know there might be one task that needs to get done and then you're going to go all the way around through five or six or even seven steps to get that done, but then, ultimately, we're going to start back with the next step and we're going to prioritize those steps that need to get done in your life as a customized conversation.
• 12:12
  Speaker 2: There might be things that you have not done in your life that you need to get done first, and they're most important in our opinion.
• 12:20
  Speaker 2: So we'll tell you look, let's get this done first.
• 12:23
  Speaker 2: We might not even get paid on it, it's just the right thing to do.
• 12:26
  Speaker 2: Let's get these things done.
• 12:27
  Speaker 2: Um and again.
• 12:30
  Speaker 2: Uh, that is another pushback is you know things are.
• 12:33
  Speaker 2: It's too expensive I mean fees for working for with your financial advisor to create, to monitor your plan, you know, maybe smaller when you compare to the opportunity cost.
• 12:42
  Speaker 2: If you're not managing your plan, you missing things, you being busy with your family when your advisor could actually do things for you, could change your investment strategy for you, could make sure that your estate plan is set and has reminded you to do so and set up meetings with lawyers to be able to do so.
• 13:00
  Speaker 2: Gotten you long-term care insurance that actually helps save you and your family because there's a dementia issue or there's an issue with your health or your parents' health, or whatever it might be.
• 13:12
  Speaker 2: These are things that we do.
• 13:13
  Speaker 2: That's what our job is to bring up, to be that person on your shoulder, to have a conversation with you on a daily basis, if not weekly basis, yearly basis, whatever it takes to be able to let's say you know what have we done these things and knock these things out.
• 13:29
  Speaker 2: We are your coach, we are your helper, we are your uh, your trainer.
• 13:34
  Speaker 2: We are all all the above.
• 13:36
  Speaker 2: Um, so you know, managing your money is like managing a business and financial planning is just a small investment in that business.
• 13:43
  Speaker 2: Um, many times as being a business owner, I have to a small investment in that business.
• 13:45
  Speaker 2: Many times as being a business owner, I have to come to the realization that, look, this is just.
• 13:49
  Speaker 2: This is something I don't want to necessarily spend money on, but it's just the cost of doing business and a lot of times, if you don't want to do your financial plans on your own and you don't want to have a plan and put something together, maybe it's just the cost of doing business.
• 14:08
  Speaker 2: Where you're having that cost of doing business with your lawyer, you're having that cost of doing business with your accountant.
• 14:13
  Speaker 2: Why wouldn't you do that in regards to your overall financial plan?
• 14:18
  Speaker 2: Because your financial advisor might actually save you money, more money than you can possibly imagine on any fees.
• 14:25
  Speaker 2: So it might make it very, very worth it.
• 14:28
  Speaker 2: One of the other pushbacks we get is it's too late.
• 14:31
  Speaker 2: It's never too late to start planning for sure, and it's never too late to start investing.
• 14:35
  Speaker 2: So whether you're just beginning in the accumulation phase, or we call the growth phase of your career, and you've already maybe established substantial savings and put money away, but financial planning can be extremely valuable.
• 14:53
  Speaker 2: Pre-retirees and those in retirement may find themselves struggling to kind of manage their wealth.
• 15:00
  Speaker 2: But I've seen a lot of people, we've walked a lot of people towards retirement in their careers and you know it's stressful.
• 15:06
  Speaker 2: You know people think going into retirement is just super easy and it's just a breeze.
• 15:10
  Speaker 2: Look, the first six months of a retiree's life I always say don't operate any heavy machinery and don't sign anything very quickly, like that's just.
• 15:20
  Speaker 2: You know you need to breathe.
• 15:21
  Speaker 2: You've been doing this every single day and just take a break for a little bit of while, and it's okay.
• 15:28
  Speaker 2: You've worked really hard for where you are.
• 15:30
  Speaker 2: You're going to have a lot of people coming at you left and right and you know what?
• 15:34
  Speaker 2: Just basically, you know Heisman them as much as you can and just take a breather.
• 15:39
  Speaker 2: But having a plan in place before all this transcends is especially beneficial and lowers the stress amount to you when you ultimately get to retirement.
• 15:52
  Speaker 2: And then the last one is my favorite is I can do it myself, and that may be true for sure there are many people that can do it themselves.
• 16:05
  Speaker 2: There are many online resources that will help you get started on financial planning.
• 16:10
  Speaker 2: There are many different softwares.
• 16:11
  Speaker 2: There's lots of different entities that can help you for sure, and some use this one-size-fits-all approach that doesn't really customize to your needs.
• 16:22
  Speaker 2: You might have a special needs child that needs some sort of help.
• 16:26
  Speaker 2: They're not going to necessarily even touch the conversations like that.
• 16:29
  Speaker 2: You might need, let's say, long-term care and a conversation that you saw your parents go through in aging process where they didn't necessarily have care.
• 16:39
  Speaker 2: Those are going to be things that they're just not going to cover.
• 16:42
  Speaker 2: I mean, you're going to be talking to an organization that's pretty much just going to talk about investments and investments as a whole in that situation.
• 16:53
  Speaker 2: So you know, in situations where you can test models as far as risk management on the investments and the changes of your situation Look, if you're doing it on your own, you might not necessarily see a train coming.
• 17:08
  Speaker 2: It's always nice to be able to have an advisor help you with that.
• 17:12
  Speaker 2: So, to the point of you can do it yourself.
• 17:16
  Speaker 2: Your financial advisor has the experience and the tools to prepare really any individual plan that maps your financial future and really, as a professional advisor, you can guide many people through implementing these plans and, again, being that person on your shoulder, you can provide advice on revisions of changes.
• 17:46
  Speaker 2: Have you thought of this?
• 17:47
  Speaker 2: Did you see that the new law came out?
• 17:49
  Speaker 2: Did you see that there was something to do about ross?
• 17:51
  Speaker 2: Uh, in regards to 529s, uh, you know, 529s now can be converted into roth.
• 17:57
  Speaker 2: These are wonderful things that just came about in this cure act 2.0 that many people don't even know about, or they're reading on kiplinger's but they don't really understand, um, so they're just trying to do it themselves.
• 18:08
  Speaker 2: This is why you have an advisor and all of these things are monitored by somebody else where they're watching over everything you do.
• 18:19
  Speaker 2: Look you most people certainly I hope you do.
• 18:23
  Speaker 2: You have a doctor, an internal medicine doc or any sort of doctor you're close with, or whomever it might be.
• 18:30
  Speaker 2: Hopefully, they're watching your numbers.
• 18:32
  Speaker 2: They're watching your cholesterol.
• 18:33
  Speaker 2: They're watching your blood pressure.
• 18:34
  Speaker 2: They're watching your you know gastric levels.
• 18:38
  Speaker 2: They're watching you know you're having your test.
• 18:42
  Speaker 2: They're watching your white blood cells.
• 18:44
  Speaker 2: You know your red blood cells.
• 18:46
  Speaker 2: All these different things that are very, very important and they're important to your health and they're important to your life.
• 18:51
  Speaker 2: You have a doctor.
• 18:52
  Speaker 2: You have doctors that watch after you all the time.
• 18:55
  Speaker 2: Why wouldn't you have a financial advisor who's watching after you as well.
• 18:59
  Speaker 2: So, really, what your plan should include.
• 19:04
  Speaker 2: So, okay, what's a financial plan?
• 19:06
  Speaker 2: How to you know who should, what should be in?
• 19:12
  Speaker 2: There is basically in the overall, you know, is the question.
• 19:16
  Speaker 2: So, first of all, you really want to determine your particular needs.
• 19:22
  Speaker 2: You want to spend time with your financial advisor to consider the options, your goals of what you have, evaluating your resources as well.
• 19:30
  Speaker 2: How much money we're talking about here, where's it going?
• 19:32
  Speaker 2: What's our plan?
• 19:34
  Speaker 2: Do we have charitable inclinations in life?
• 19:36
  Speaker 2: Do we have charitable inclinations after death?
• 19:38
  Speaker 2: Do we want to help our grandkids out?
• 19:40
  Speaker 2: Do we want to help our kids out?
• 19:43
  Speaker 2: Do we have a cousin or an uncle or a nephew that is very, very important to us?
• 19:47
  Speaker 2: Do we have an elderly spouse that is older than us that we need to be able to make sure that something is taken care of for them?
• 19:55
  Speaker 2: Do we have elderly parents that need to be having taken care of them?
• 19:59
  Speaker 2: Are they divorced?
• 20:00
  Speaker 2: Is there a whole different situation where there's different kids on one side and different kids on the other?
• 20:04
  Speaker 2: You know, what would that estate plan look like?
• 20:07
  Speaker 2: And that's an evaluation of the resources.
• 20:09
  Speaker 2: That's not necessarily doing anything with it.
• 20:11
  Speaker 2: That's just having a conversation about the entire ball that is your life, especially financially.
• 20:19
  Speaker 2: The first thing we always talk about in any financial advisor is going to talk to you about is, first, cash flow, like what is the cornerstone of developing a comprehensive financial plan?
• 20:29
  Speaker 2: It's cash flow and I know it sounds like some you know ornate business thing that everybody worries about in regards to Fortune 500 companies and cash flow and whatever it might be.
• 20:42
  Speaker 2: But no, it's very, very simple how much do you spend and how much do you save?
• 20:47
  Speaker 2: So you know how much money is coming in the door and how much money is going out.
• 20:51
  Speaker 2: And it's very, very simple.
• 20:52
  Speaker 2: Universities go out of business every single day.
• 20:55
  Speaker 2: Companies go out of business every day because their cash flow is wrong and there's not enough cash flow.
• 21:00
  Speaker 2: So you got to be able to define what your spending habits are and figure out what they are now.
• 21:06
  Speaker 2: That will help you identify those cash flows in the future, certainly in retirement.
• 21:10
  Speaker 2: So failing to have a clear picture of your bills, your expenses, you know, dramatically reduce your ability to meet your financial objectives, without a doubt.
• 21:20
  Speaker 2: So cash flow.
• 21:22
  Speaker 2: Second, savings Fundamental to that entire core.
• 21:26
  Speaker 2: The foundation of any building is not built on sand.
• 21:30
  Speaker 2: How are you putting money away?
• 21:32
  Speaker 2: What is your emergency fund?
• 21:34
  Speaker 2: What are the conversations you have with yourself about putting money away and making sure that you have your zero?
• 21:39
  Speaker 2: When we talk about your zero being zero, many people's zero really is zero.
• 21:45
  Speaker 2: Many people's zero is negative and they're in debt and they have too much debt.
• 21:49
  Speaker 2: They have credit card debt.
• 21:50
  Speaker 2: They have negative $20,000 or negative $50,000, or maybe they owe taxes.
• 21:55
  Speaker 2: It's negative $100,000.
• 21:56
  Speaker 2: You just add up all the things that they do and literally their net worth is negative, so their zero is negative.
• 22:03
  Speaker 2: Many people's zero is $10,000 to $20,000, maybe $30,000 in cash, where basically, once you had that money away, you just put away.
• 22:12
  Speaker 2: You raise your zero to $10,000, where you raise your zero to $20,000.
• 22:17
  Speaker 2: You raise your grand to six months of living expenses in case you lose your job.
• 22:20
  Speaker 2: Whatever that zero is that gets you to sleep at night is your zero, and everybody's zero is different.
• 22:26
  Speaker 2: So that's cool.
• 22:27
  Speaker 2: Whatever, there's no judging here.
• 22:28
  Speaker 2: If I was in the business of judging, I would be out of business.
• 22:31
  Speaker 2: So there's, you know it is what it is.
• 22:34
  Speaker 2: You're zero.
• 22:35
  Speaker 2: We have one client wants to zero, wants to be a million dollars, he and it is.
• 22:39
  Speaker 2: It's a million dollars and if he writes a check for a million dollars out of nowhere, um, he he's told me you're fired, um and uh, so we keep it in very cash, like instruments, things that can be liquidated quickly, uh and necessarily.
• 22:54
  Speaker 2: So, um, this is just a hit, that's a zero.
• 22:57
  Speaker 2: I'm not judging, that's what he wanted to do and he just wants to be able to make sure that.
• 23:00
  Speaker 2: Look, as busy as I am, as you know, I'm a multi multi-millionaire.
• 23:05
  Speaker 2: If everything goes to crap and everything falls apart, am, as you know, I'm a multi-multi-millionaire.
• 23:07
  Speaker 2: If everything goes to crap and everything falls apart, I want to know I have a million dollars in the bank, I can start over again.
• 23:11
  Speaker 2: That's, that's it.
• 23:12
  Speaker 2: That's his wish and you got to take that and maybe change the numbers a little, take some zeros off of it.
• 23:18
  Speaker 2: But again, ask you that yourself, that question if the world falls apart tomorrow in your world, in your life, what's going to happen and how much money do I need to start over?
• 23:29
  Speaker 2: And failing to have a clear picture of your bills and expenses is absolutely the key.
• 23:34
  Speaker 2: With cashflow and saving is easier if you pay yourself first.
• 23:39
  Speaker 2: We always talk about this, every advisor, you hear about it all this time, pay yourself first.
• 23:43
  Speaker 2: Build your automatic savings up into your budget, add those numbers into your budget and say, look, $200 just went out to the bank every paycheck, $50 went out, whatever it might be, and put that money away and pay yourself first.
• 24:00
  Speaker 2: Third is risk management.
• 24:01
  Speaker 2: Look, risk can take many forms.
• 24:04
  Speaker 2: We talk about risk in many, many conversations and the two buckets of risk that we talk about to all clients is your investment bucket of risk and then your risk bucket of risk.
• 24:16
  Speaker 2: So you have investments that are at risk and they are growing.
• 24:21
  Speaker 2: They are doing their thing, they are doing what they're supposed to be doing.
• 24:23
  Speaker 2: Then you have a risk bucket and in a risk bucket you can actually take on that risk, like any business owner might or any person might say look, I got this, if that happens, I'm just going to, I'll figure it out, I'm just going to take on that risk.
• 24:36
  Speaker 2: Or you can transfer that risk to other people, to other companies, to very large businesses with big buildings and big cities that sell insurance.
• 24:48
  Speaker 2: Those are things that you can offlay that risk onto other places for a very minimal fee or cost.
• 24:58
  Speaker 2: So many of these forms of risk talk about illness, you talk about accidents.
• 25:01
  Speaker 2: You can talk about liabilities, you can talk about natural disasters.
• 25:05
  Speaker 2: Those are all risk for sure.
• 25:07
  Speaker 2: But failing to manage that risk properly can really jeopardize the investment bucket of things.
• 25:14
  Speaker 2: So the investment, you know, that risk bucket can take away from the investment bucket.
• 25:21
  Speaker 2: You can get sued because you didn't have the proper liability insurance.
• 25:24
  Speaker 2: You can lose that bucket because that investment bucket, because something happened on the risk side that took it away.
• 25:33
  Speaker 2: So you really want to be cognizant of the fact that you're protecting yourself as much as possible in the risk bucket so the investment bucket doesn't disappear.
• 25:42
  Speaker 2: And that's why smart financial planning evaluates like the evaluation of that on all those different levels and the types of insurance you carry to whether you're aligned as far as your overall goals and needs, whether you have an umbrella policy, you know, do you have an alternative revenue stream that comes in?
• 26:01
  Speaker 2: Is there a hedge against inflation or Are there riskier types of investments that you could basically stay away from?
• 26:08
  Speaker 2: And life insurance policies include.
• 26:12
  Speaker 2: They contain exclusions, limitations, reductions of benefits, terms for keeping them in force.
• 26:18
  Speaker 2: As a financial advisor that can be provided for you, you don't have to worry about all that stuff as far as making sure that they are taken care of, so highly recommend.
• 26:33
  Speaker 2: Everyone has risks in their life.
• 26:34
  Speaker 2: Everyone has risks in their family.
• 26:36
  Speaker 2: Everyone has.
• 26:36
  Speaker 2: You know it's how they're set up properly and are they set up properly so you don't lose the investment side of your world and someone comes after your cash.
• 26:43
  Speaker 2: So you don't lose the investment side of your world and someone comes after your cash, your hard-earned money, your house and your liabilities take over from your assets.
• 26:52
  Speaker 2: The third is or the fourth is, is education funding.
• 26:57
  Speaker 2: I get this all the time with many people and great parents.
• 27:02
  Speaker 2: So my kids are great, your kids are awesome too.
• 27:05
  Speaker 2: I'm sure every kid is amazing, right, hopefully, and as a coach and I've been coaching you know obviously football for coach football for over 20 years I've coached baseball, of course, track.
• 27:19
  Speaker 2: I've coached soccer, I've coached you name volleyball, I've coached you name it wherever I can to help and for the most part, every single kid is great.
• 27:34
  Speaker 2: The cost of education for children and grandchildren can be absolutely staggering and many of the parents are very altruistic in their thoughts that they really want to be able to provide for their children and save for their college futures.
• 27:43
  Speaker 2: Able to provide for their children and save for their college futures.
• 27:47
  Speaker 2: So that is absolutely wonderful and that is a great goal to have.
• 27:49
  Speaker 2: That is a goal that you plan for, that is a goal that you think about and you work on and you put away money.
• 27:54
  Speaker 2: I always make sure that you're paying yourself first and then you can pay your kids towards that goal later.
• 28:01
  Speaker 2: They can get loans, they can get grants, they can get scholarships for their education.
• 28:06
  Speaker 2: You can't get loans, you can't get grants and you can't get scholarships for your retirement.
• 28:11
  Speaker 2: All right.
• 28:13
  Speaker 2: So focus on yourself first and then we'll start talking about education planning.
• 28:19
  Speaker 2: However, arming yourself with the current information across the board as far as a wide variety of proactive educational savings vehicles can really help plan those funding goals.
• 28:32
  Speaker 2: So grandparents can start first, because you've got your.
• 28:36
  Speaker 2: How to get your house in order, if you're fortunate enough to be able to put enough money away and you don't have to worry about your cash flow and worry about your expenses, great.
• 28:46
  Speaker 2: There are some wonderful places to put and very nice tax benefits as well.
• 28:51
  Speaker 2: That are certainly.
• 28:54
  Speaker 2: I'm not going to go into every single one today or endorse one or the other, but there are a number of ways to be able to put money away the right way tax-wise for your kids and your, for grandkids and anyone else, let's see.
• 29:11
  Speaker 2: So that's one, two, three, four and now we're going to retirement planning.
• 29:16
  Speaker 2: Uh, look, social security benefits, uh employer sponsored plans, um personal retirement savings, including, you know, investments, iras, even annuities, typically combined and comprise retirement income for most americans.
• 29:32
  Speaker 2: Um, deciding which of those uh retirement choices will serve you uh, retirement choices will serve you uh, you know which will serve you best can be uh daunting.
• 29:43
  Speaker 2: For sure, financial advisor can guide you on that, without a doubt, and bring you options that can help and support and enhance your overall investments and overall tax strategies.
• 29:53
  Speaker 2: Uh, for sure that, all of those things.
• 30:00
  Speaker 2: Do you contribute to your retirement plan at work?
• 30:03
  Speaker 2: How much are you contributing?
• 30:05
  Speaker 2: Is there a match?
• 30:06
  Speaker 2: Is there a Roth mechanism inside of that?
• 30:09
  Speaker 2: Are you able to contribute to a Roth 401k A Roth 401k, not a Roth IRA, roth 401k?
• 30:16
  Speaker 2: Does that?
• 30:18
  Speaker 2: What is that?
• 30:18
  Speaker 2: You know all of these things can be answered with the conversation with a financial advisor tomorrow.
• 30:25
  Speaker 2: And then the lastly is your estate plan.
• 30:28
  Speaker 2: Look, I ask people all the time do you have a will?
• 30:30
  Speaker 2: And you wouldn't believe it's probably over 80%.
• 30:34
  Speaker 2: Most of them say no and it's incredible to me, but I always say we're in the state of Indiana.
• 30:42
  Speaker 2: The state of Indiana has a will for you.
• 30:44
  Speaker 2: Everyone has a will.
• 30:46
  Speaker 2: In the state of Indiana.
• 30:47
  Speaker 2: It's all mandated by the state.
• 30:48
  Speaker 2: They're going to decide where your stuff goes, they're going to decide who gets what and they're going to decide how much they want to be able to take.
• 30:56
  Speaker 2: So if you want to be able to change that, you want to get a will.
• 31:02
  Speaker 2: It's real simple.
• 31:04
  Speaker 2: There's lots of ways to do it.
• 31:05
  Speaker 2: We certainly have a way to be able to do it through our organization.
• 31:09
  Speaker 2: You can contact us today and we can bring a very you know, a very reasonable process that we have with that.
• 31:19
  Speaker 2: There's also a number of other mechanisms out there as well, if you just look at any software out there overall.
• 31:29
  Speaker 2: But you need a will.
• 31:30
  Speaker 2: You need a medical power of attorney, which is who signs the mortgage check or who sends a mortgage check, and then you know the electricity and the phone and all these other things that go on with life while you're incapacitated in the hospital because you got, you know, in a car accident or something terrible happened.
• 31:51
  Speaker 2: You're getting better, but you need to keep the lights on back home, whether it be for the kids or for the dogs and the cats or whomever but life needs to go on while you're getting better.
• 32:04
  Speaker 2: Who does that for you?
• 32:06
  Speaker 2: That's your medical power of attorney, and then living will is any sort of like.
• 32:11
  Speaker 2: What are my wishes?
• 32:12
  Speaker 2: Obviously, this is a grownup conversation, but what are my wishes if I'm incapacitated?
• 32:17
  Speaker 2: On machines?
• 32:17
  Speaker 2: What do I want the hospital to do?
• 32:20
  Speaker 2: What do I want my caretakers to do?
• 32:21
  Speaker 2: What do I want my executors to do?
• 32:23
  Speaker 2: I have all these things.
• 32:25
  Speaker 2: I'm not a lawyer, don't play one on TV, I didn't sleep on a holiday and express last night, but we're not giving legal advice.
• 32:34
  Speaker 2: We're telling you to get these things done.
• 32:36
  Speaker 2: However you want to get them done, okay.
• 32:38
  Speaker 2: So whether you want to establish trust and, you know, regular review those legal documents, all those other things, I highly recommend you discuss that with a lawyer and have those conversations.
• 32:52
  Speaker 2: As far as beneficiary designations who gets what on my IRA or my 401k those are things you can discuss with your financial advisor and I certainly highly recommend you do and really just sort of you know.
• 33:06
  Speaker 2: Also consider the tax implications towards survivors that are, just you know, basically going to get hit either with a death tax.
• 33:14
  Speaker 2: That is, you know your exemption that you have per person is $5.9 million per spouse as far as gifting in a lifetime.
• 33:23
  Speaker 2: If you're over that, there's conversations you need to have in regards to death tax, because the death tax is 50, 5-0% over that $12 million round out a $12 million number.
• 33:36
  Speaker 2: So all of these things need to be discussed to give you greater confidence with your loved ones, security with your loved ones and to make sure that you are thinking about and calming your nerves overall.
• 33:52
  Speaker 2: So I highly recommend having a conversation with a financial advisor, asking the questions that I talked about and of getting into, you know, just to have the conversation.
• 34:03
  Speaker 2: The conversations are free Nine times out of ten.
• 34:06
  Speaker 2: No advisor is going to charge you for those conversations.
• 34:08
  Speaker 2: At least you can kind of get a game plan.
• 34:10
  Speaker 2: You can see whether you like them or not, whether they like you or not, which is really really important, because that that is important as well.
• 34:18
  Speaker 2: You know you don't want to just necessarily be um they.
• 34:22
  Speaker 2: You want them to like you as well as you like them, because that that, ultimately, is the trust that you need to have a partner that you walk through life with, that helps you on a daily, if not monthly, if not annually basis um, not annually basis to achieve your goals.
• 34:39
  Speaker 2: I hope that was some sort of help.
• 34:41
  Speaker 2: As far as why you need a financial planner, I'm going to have to table the millennial conversation and millennial savings.
• 34:47
  Speaker 2: I'm sorry I went a little bit long today.
• 34:48
  Speaker 2: We'll do that in our next episode.
• 34:52
  Speaker 2: For sure, barring something in the market doesn't go crazy and we need to pivot, but the show's Money Matters with Greg.
• 35:01
  Speaker 2: I'm Greg Farrell, ceo and President of Farrell Wealth.
• 35:03
  Speaker 2: It's a wealth management firm located in Valparaiso, indiana, where we have our families in this wonderful small town that's in the northwestern area of Indiana and right up by Chicago, and we want to thank WVLP FM broadcasting today.
• 35:20
  Speaker 2: We'd broadcast on Thursdays at one o'clock central and then also on Saturdays.
• 35:26
  Speaker 2: It's replayed as well and WVLP 103.1,.
• 35:30
  Speaker 2: You're going to also go to their website and check out other programs as well.
• 35:37
  Speaker 2: I highly recommend their multiple different programs that we're all fascinated with and we all try to listen to here locally, and then podcast here on Spotify, apple, wherever you get your pod, and then, if you have questions and you want to be able to ask some of the stuff we talked about today or you have more questions in regards to anything that's going on in life.
• 35:57
  Speaker 2: It's greg at farrowwealthcom.
• 36:00
  Speaker 2: It's like Will Farrell, but he spells his name wrong.
• 36:01
  Speaker 2: It's F-A-R-R-A-L-L.
• 36:06
  Speaker 2: Wealthcom Really funny guy and we love him, but he spells his name wrong.
• 36:11
  Speaker 2: So, greg at farrowwealthcom, email me anytime and you can always find me on socials as well.
• 36:17
  Speaker 2: Greg at fairwealthcom, email me anytime and you can always find me on socials as well Facebook, linkedin, x.
• 36:24
  Speaker 2: We do have an Instagram page at fairwealth, so check us out there.
• 36:27
  Speaker 2: I hope I was some sort of help today and some sort of value add to you in your life, and I hope I created some questions and certainly here to answer them and also, you know, reach out to those advisors out there in your life to be able to ask these questions as well.
• 36:43
  Speaker 2: So thanks for being here today, thanks for listening, and I hope you have a wonderful week and I'll catch you next week, see you.
• 36:52
  Speaker 1: Bye.
• 36:53
  Speaker 1: Thanks for tuning in to Money Matters with Greg.
• 36:55
  Speaker 1: We hope you gained some valuable insights today.
• 36:57
  Speaker 1: Remember your financial journey is personal, but you don't have to go it alone.
• 37:02
  Speaker 1: If you enjoyed the show, be sure to subscribe and share Until next time.
• 37:06
  Speaker 1: Here's to making your money work for you.
• 37:09
  Speaker 1: Securities and investment advisory services offered through LPL Financial, a registered investment advisor, Member FINRA, SIPC.