Welcome to Retire Smart Austin. My name is Cynthia De Fazio and I’m joined today by Phil Capriatti Sr of Empower Wealth and Tax. Phil, how are you today?
I’m feeling great today, Cynthia, how about yourself how you been?
I feel great as well. I’m always excited to see you and be in the studio with you. Because your shows are always so informative. The viewers love them. And we’re always talking about very important and timely topics. So, what I’d love to start off with today, if you don’t mind, we’re gonna get right into it to save time. I love it. Financial Advisors, obviously, there was a study that was done recently by Vanguard, and I want to read the numbers because it’s quite surprising. Quite shocking. It says financial advisors can double gains. So why don’t more people use them? Specifically fill a recent Vanguard study found that on average, a self-managed $500,000 will grow to 1.6 9,000,025 years by following your typical saving and investment rules. According to money talk news, however, with a financial advisor on board, this is where it gets staggering. That same 500,000 would grow to an average of 3.4 million by using a financial advisor Phil Oh my gosh, that is staggering. With that number in front of us. Why don’t people reach out to financial advisors more often? Why do they think they can be do it yourselfers?
Well, you know, there’s a number of different factors that go into that. Okay. Okay. But first of all, we believe in our hearts and souls that we can do anything better than anybody so why pay someone to help us do what we can do ourselves. So, I guess really, when, when, when you take a close look at it, it’s, it’s lack of education and overconfidence. Okay, that’s a part of it. Okay, one of the benefits of working with a financial advisor is their expertise and their experience. See many times, you simply, okay, if my plumbing is broke, I’m not going to go in. Now, when I was younger, I went in, and I tried to fix the pipes. Guess what happened? Normally, I ended up having to call a plumber. And it cost me three times. Okay, and so it’s really kind of very similar analogy, really, when we take a look at it, but many financial advisors and here’s the key, you really have to choose the correct financial advisor. So, it comes down to expertise and experience. So, for our children, for instance, I have five children. Every single one of my children has a Roth IRA, my youngest son we started contributing to he started contributing to his Roth at three years old,
oh my gosh,
we had him working up at the ranch with his grandpa’s. Grandpa would pay him $6,000 A year and that $6,000 went into his Roth IRA, we paid, we paid the taxes on the earned income. They’re allowed. There’s no age limit. Okay, as long as you have earned income, you can do it. So, this is again, that comes down to experience and expertise. I had the expertise, I had the knowledge to exercise that strategy with all my kids, but especially the youngest. The older you get, the more intelligent we like to think we become but at any rate for most of us, yeah. The other thing is you emotional, okay, okay. You get too emotional when you’re managing your own money. I have folks that have come into my office, and they’re like, Well, last shot been sitting on the sidelines for the last year and a half. And I’m like, why? You said, Well, I’m afraid I’m too close to retirement, I do not want to lose another 2030 or 40%. I got dinged really bad during COVID. My Portfolio dropped 24 or 25%. Within a five-week period. I know what’s going to happen again. I don’t want to take the risk. I said so where’s your money sitting? Oh, it’s sitting in a sitting in a money market fund. I’m like it’s sitting in a money market fund. So, here’s the thing you become too emotionally attached. When we manage a client’s portfolio, we have a wealth of resources Cynthia, we have analyst we have seen your portrait Aleo managers, we’re working with advisors and, and, and, and analysts across the country. So, we have a lot more information especially by the way, if you’re working with a licensed fiduciary who’s independent, many times when you work with a firm, you know, a, you know, an E firm or a C firm, I won’t mention the names, you’re and you’re more of a broker dealer. In other words, you work for the company, okay. And the company has planned a paint by number of portfolios that you that you plug people into, and certain investments that you plug people into, because that’s what the company wants you to sell indirectly and directly. So many times, getting back to this topic is a great topic, we get too emotional, it but if you’re working with a licensed fiduciary, who has experience, also a tax advisor, also can handle your trust your wills, and I’m talking about a registered investment advisor. Okay, someone who is a licensed fiduciary, it’s extremely important. And I would venture to say that returns can be even much higher, because many folks when they manage it themselves, they sell it the wrong time, and they buy at the wrong time, why they simply don’t have the analytics or the expertise.
Well, I think also, Phil, something that you mentioned earlier, when we were speaking about when someone has a paint by numbers portfolio that they’ve been just that this is what’s going to work for you. It’s worked for Mr. Mrs. Jones, Mr. Mrs. Smith, it’s going to work for you, you being an independent, licensed fiduciary, if you will, obviously can shop around different, different scenarios, different products to realize what’s going to be perfect for that individual. There is a such a blessing to that, Phil, because you don’t have that box that you’re staying within, you can think outside of the box,
we have the whole universe of products to choose from. So, the very first thing I want to do and when an individual comes into our office for a complimentary consultation, is I want to get to know you. Yes, I want to get to know you. I want to know you if you’re married, I want to get to know your wife, I want to understand your children. I want to understand what’s important to you what your goals are an answer I know about you, I can help craft the right portfolio for you and your family. Many times, folks, we don’t know ourselves as well as we think we do. But the point is, you don’t have that objectivity. So, you might be doing a great job. But the fact of the matter is, if you’re working with the right financial adviser, chances are with what you save in taxes, and what you earn and the additional value that is brought by managing this portfolio properly, you’re going to have a much more successful retirement because we understand we have the knowledge, the expertise and the wisdom to help you grow and to accomplish your goals. So, get to know the client as well.
Sure. Well, Phil, I know that you’ve set aside five spots for new viewers today, let’s talk about what that looks like. Exactly. Before we open up the phones for the first time.
Yes, give us a call. You know, I have five spots. And you know, one of the things that we talk about, we don’t talk about enough is when I build a portfolio for a client. So, first of all, I want you to call in for your Morningstar report and your portfolio observation. You may think you have a retirement income plan, and you may, that’s fine. But let’s dig into your portfolio. What I like to do with my clients, and they absolutely love it is I like to work with several different portfolio managers. I want to work with a portfolio manager that specializes in sector rotation. Let’s say I want to work with a portfolio advisor that specializes in large cap growth. I want to work with a portfolio that maybe specializes in muni bonds. The fact of the matter is we have the experience and the expertise to show you it’s not just one company that you want to work with one group of or one specific portfolio manager. So let us run a Morningstar report and portfolio observation call 888-818-6557. Click the QR code if you’re a little apprehensive or you have a call fright. Yep, that you have. All right, go ahead and click that QR code and come on in and let’s sit down. Let me get an opportunity to get to know you and give you some recommendations whether you work with us or you don’t. These are complimentary consultations. Maybe I can give you some pointers to help you manage your own portfolio a little more. Let’s say intelligently.
Phil, thank you so much to our viewers at home the number to call to meet with a financial find it fiduciary, fiduciary advisor, that number to call is 888-818-6557. We know that you have a lot of questions that perhaps you’re wondering if you need a second opinion? I want to talk to Phil in detail about what that looks like. Do you need a second opinion from a fresh set of eyes? We’re going to take a very short commercial break here on retire smart Austin, don’t go anywhere. We’re talking all about working with a financial advisor how that’s a benefit to you. And do you need a second opinion? Stay tuned.
For most folks who are getting ready to retire, they’ve spent 30, 40, 50 years paying into Social Security, and they haven’t a clue on what claiming strategy best works for their plan, you should feel comfortable, you should feel safe. You should be educated by your financial advisor in all aspects law, taxes, inflation, your wealth management, including your insurance products as well, working with a financial advisor that has their own tax firm, has their own legal arm and their own wealth management and insurance firm really ties it together. What folks enjoy most of all, is working not only with a fiduciary, but they want to work with someone that does it all. They want to come in they want to do their Roth conversions. They want to do their tax returns. They want to update their wills and their trust, and they want to come to one firm that has all of that expertise inside of it. That’s Empower Wealth.
Welcome back to Retire Smart Austin. My name is Cynthia De Fazio joined today by Phil Capriatti Sr of Empower Wealth and Tax. We’re talking all about working with a financial advisor. And if you’re doing so already, do you need a second opinion? Phil, I want to open with that and ask you a lot of people in the viewing audience, they may think that they’re working with a financial advisor that’s doing okay for them, or we’ve heard before getting the job done. Yeah. So, in your opinion, is it important to have a second opinion from a fresh set of eyes just in case something may have been missed along the way?
Just like if you were diagnosed with a severe medical condition. Okay, we’re going to seek a second opinion. Well, I have news for you, folks, your retirement planning your retirement investment planning is extremely important. You only get one shot to go through it. Many times, folks will tell me Well, I meet with my financial advisor three times a year. And I’m like, where are they? Where are they? Oh, they’re up and see, how do I move down here five years ago? Well, how do you meet with that? Well, we do teleconferences. We do zoom calls, that’s all well and good, but it’s still it’s much in my professional opinion, it’s much better to get it to I meet with your financial advisor, and just talking with them two or three or four times a year isn’t enough. We want to make sure that your portfolio has customized strategies based on your financial goals, your risk tolerance, your time horizon, we want to take a look at a lot of different variables. Do you have home health care long term care? What happens when we get into our radius? Did you realize that I know this a little off topic? Well, we get in our 80s. Three out of every four people. Okay, as soon as you hit become an octogenarian reach age 80 need home health care of some sort, or long-term care of some sort. And more than 70% of them have never planned for it. Wow. They never planned for it. So, one of the questions I’ll ask is, okay, you have account A account B, account C, you don’t have Long Term Care coverage, okay? The premiums are too expensive. You say and the premiums go up, okay. Which account are you going to take it to take out of, if God forbid, something happens, you have a heart attack strokes, and you need home health care? And I’ll ask, and they’re like, Well, I’m not sure. Right. Okay. So basically, that right there tells me there’s not proper planning. I agree. Yeah, we didn’t have proper planning, because we’re not looking at all of the different variables that can happen like Murphy’s Law right. plan for the worst pray for the best. It’s just that simple.
Okay. And I believe that this IQ Phil actually 70% have not planned for it. Age 80 and above will need it. But my question is, is it because a lot of people are sometimes confused. They feel that Medicare is going to cover all of their long-term care needs. We’ve talked about that before. A lot of people say, Well, I don’t have to plan for that. I don’t need insurance because I have Medicare. That’s not true. It’s
even worse than that. I have people say I have Medicare and Medicaid. They put it together like they’re two of the same.
They’re the same program don’t want Medicaid. I mean, no.
Folks, let me let me clear the air and that’s great. Great. Yeah, Medicare is not Medicaid. Yes, Medicaid is a program for folks who are indigent and have no financial resources. Yes, they have Medicaid, and they have Medicare. For those of us that have worked hard, saved hard. pay taxes for the last five decades and have resources, we’re responsible, unless you have Medicare will cover limited rehabilitation care limited. But when it comes to having someone coming in to help you, or if God forbid, you’ve developed, like some of our, some of our elected officials diminished mental capacity, if you find yourself in a situation like that, you have to have a plan, whether it’s long term care, home health care, or a certain plan or a certain account, you need to have a plan. So normally, what happens is that comes down to coaching, yes, their financial advisor really hasn’t really had that candid conversation of what happens if God forbid, you have to go into a nursing home or need extended home health care. And then ask the client, what do you have? What is your plan, that has to be part of the retirement plan, and for many, they don’t touch it, the wider don’t dwell on it, it’s too negative of a topic to touch. So, they don’t want to talk about it. But the fact of the matter is, we have to talk about all topics, The Good, the Bad, and The Ugly.
When you’re designing a plan, Phil, you definitely do. And I think one of the other parts that we should probably point out would be if someone is working with an advisor that specializes in more of the accumulation phase of life, that’s a different animal altogether. We’re talking about your retirement years, and things that need to be structured accordingly. I’d love to loop back, Phil, and ask you more about the customized investment strategies for your clients. Let’s paint a better picture of that. What does that look like? Exactly, because that sounds very interesting.
These are tailored approaches that we create for each individual client, every single client’s retirement income need is different. Their risk tolerance is different, their appetite for market exposure is different. So, what we want to do is customize strategies. And this is one of the benefits of working with an experienced advisor licensed fiduciary who’s also a tax advisor as well. What we want to do folks, is we really want to customize your portfolio into a plan that limits your downside risk, we’re going to see 2000 eights happen, we’re going to see COVID situations happen. One of the one of the things that many folks don’t look at is in retirement, where and Cynthia mentioned that distribution planning is different than accumulation planning, why we’re no longer working, we no longer have that steady income coming in. So, we have three hands that go into your retirement accounts, folks. Three, it’s not just yours. Number one, if it’s an IRA, 401 care qualified plan, you don’t own it. You have a partner, and the partner is coming close to bankruptcy, the partner has a $35 trillion debt. Okay. And so that partner is the federal government in the IRS. So that’s one hand taxes go into it. Absolutely. Second hand that goes into it is market gains and losses, I’m going to focus on losses. Many folks don’t structure their portfolio to have limited drawdown or limited market volatility. One of the customized approaches we use one of the first conversations is we’ll talk about how much are you willing to see your portfolio lose. And I don’t want to hear don’t worry about it, it’ll come back because in retirement, you have taxes coming out of it, you have your own personal distributions coming out of it. So, we want to limit drawdown, I like to put plans together that limit drawdown anywhere from 0% drawdown to 10 15%. If when we run your Morningstar report, in your portfolio observation, we find that your portfolio has the propensity to potentially lose 3035 40%. And you’re in retirement, the proper changes have not been made, because the last thing they’ve had that can happen is when we see severe market downturns and they’re coming. If the portfolio is not, if you’re if it’s not being actively managed, or you don’t already have a preconceived notion, Phil, I don’t want this portfolio to lose more than 5% more than 1015. We’ll sit and have that conversation. And this is what we talk when we talk about strategic planning with respect to portfolio management. This is what we’re talking about. I want to work around what’s your risk tolerance, and then we’ll build a portfolio. Many of these portfolios we build portfolios with folks that have a maximum drawdown of 10%, we’re going to say give or take, you know, 812 in that 10% range, that are averaging eight 9% of your return. But we’re tactically and strategically managing it amazing not passively managing it.
Phil, this is the perfect time for us to reopen the phones. Would you agree I would. The viewers at home there is the number to call on your screen 888-818-6557. And if you’re in the viewing audience stay in, you’re asking yourself, do I have the right plan for my retirement? What Phil and his team have done, they have set aside five complimentary consultations, five spots for you to come in and take a look at what they do that’s a little bit different. Perhaps you need a fresh set of eyes a second opinion. Remember, there’s only five spots for you to claim one per person, please that number 888-818-6557. Or if you have your smartphone handy, go ahead grab it, click on that QR code at the bottom corner of your screen. This is your chance to meet with a fiduciary advisor. Don’t miss it. We’ll be right back on retire smart often stay tuned.
The work never seems to end until the day it finally does. After nearly a lifetime on the job. You should be rewarded for all the time you spent working. Whether that’s crossing off items on your bucket list, learning a new passion or rekindling the love of an old one. After all, life isn’t over when you stop working. It’s the start of an all-new chapter, the one where you’re the writer and you get to choose how your story will go. A way to achieve that is by having a clear financial plan to sustain your golden years. The biggest fear most retirees have is if they’ll have enough money to maintain the lifestyle they’ve always enjoyed. Having a plan to help protect you against the curveballs life often throws will help to maintain your lifestyle. Call today to get your free written financial plan. See me live every day to the fullest and enjoy the retirement of your dreams.
Welcome back to Retire Smart Austin. My name is Cynthia De Fazio joined today by Phil Capriatti Sr of Empower Wealth and Tax and we’re talking all about working with a financial advisor, and why some people might be nervous or apprehensive to do so. So, Phil, great question I have for you obviously that’s how we started the show today, when we read the Vanguard study, which is so shocking at how much more money you could make if you were working with the right financial advisor. Let’s talk a little bit more in depth about some of the reasons why people try to avoid working with a financial advisor. We’ve talked on commercial break one of those big things come up a lot of times trust, let’s talk about trust,
Trust is one of the major issues I’m going to say it’s one of the top five issues. Folks simply do not trust financial advisors. We read a lot of you know, you never read the good things in the paper anymore. It’s all negative drama. This is what we hear. We hear about financial advisors in the scandals, they absconded with the money they did this. So, a lack of trust folks, many folks, if you feel as though you do not want to work with a financial advisor because of trust, or maybe you’re working with a financial advisor, that’s doing a mediocre job. One of the things one of the ways you get over that as you come in, and this is what we like to do come in for those complimentary consultations. Let’s build a relationship. Let’s build a report. Look at what we’ve done with other financial with, with other portfolios and other clients to help develop trust. Normally, we’ll meet with a client four- or five-times Cynthia, before we even consider taking them on as a client, why we want to get to know them, and we want to build trust. So that’s number one. Number two, what I’m starting to see is folks think it’s too complex, too complex. Yeah. Yeah, so perceived complexity. It’s too complex for me to come in and work with a financial advisor. So, they feel overwhelmed by the idea of handing their portfolio over to something and helping them and, and, and helping and asking that person for help. Okay, so with that, if we do not ask for help, okay, many times we will not receive it. But what I would say is one of the other things that we look at is, is confidence. I have much I’d have much too much confidence in my own skills and ability. I don’t need your help. So basically, what they’re saying and it kind of reminds me I have a very good friend and my mom I grew up growing up this individual was we used to call we used to call cover on in Italian it means dense head. Very thick, very thick head okay, meaning stubborn. Okay. My grandmother used to say in Italian strong willed, they’re not stubborn. They’re just strong willed. Okay. If you’re one of those individuals great, but why would you not want to have backup? Yes. Why would you not want to have that second opinion that third opinion and say hey, you know what, what do you think of my portfolio? I’m doing this myself. Give me a little gig. Throw me a bone here. Give me a little bit of something, or am I doing a great job? Many times, what we’ll do, and I like to be proactive when we run your Morningstar report and portfolio observation, many times we’ll come back. And when we look at areas that we can improve, I’ll look at them. And I’ll say, many times, we come back with five areas to improve six areas. And this is being done by certified financial analyst and planners, many times I’ll come back with these individual portfolios, folks, there’s only one area to improve, you’re doing a great job, wow, there’s only two areas to improve. Now, on the other hand, if your portfolio observation comes back, and there are five and six different areas to improve, at least you’re getting the advice on what areas need to be addressed true. Okay. So even if you do not want to work with them, or you have a lack of trust, get that second opinion, okay. Why we have the experience, we have the analytics and by the way, you always work with a financial advisor who you have vetted, true one to always vet your financial advisor. Okay. And you can always vet a financial advisor by a snappy, by a snappy Google read Google. Yeah, Google reviews. Yeah. Or, yeah, you can’t always judge what you see, when you click on weight when you, you, you click on their name, and you know that it comes up with their you know, what they do and so forth. So, come in, meet, talk, great, get a portfolio review, get a complimentary portfolio review. And by the way, I see a lot of folks that leave their money in their 401 K, and they think the administrator of the 401k is going to manage it. We don’t realize anything is broken, Cynthia, until we see a market correction. Because there’s an old saying a high tide floats all boats term. So, when the market is going up, and it’s a high tide, we don’t know that there’s something broken. But however, when we start to take distributions or when the market starts to take a large chunk of our portfolio, it’s many times it’s too late to fix the damage. So come in for that review. Many times, to last but not least, don’t be overconfident. Click the QR code. Come on in. Let’s have a conversation.
Phil, thank you so much to our viewers at home just like you wouldn’t attempt your own surgery. You shouldn’t be attempting your own financial planning that number to call is 888-818-6557. We know that you have a lot of questions for Phil and his team. This is your opportunity to claim one of those five spots with a Fiat fiduciary advisor. Be safe, be happy and be blessed. We’ll see you back one week from today on retire smart Austin. Take care.
Specializing in private wealth management, we provide education, guidance, and strategies to help you achieve a tax-efficient retirement income.
Specializing in private wealth management, we provide education, guidance, and strategies to help you achieve a tax-efficient retirement income.
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