REIA 161 Eunicia Paret: Are you using real estate to optimize your wealth portfolio?

Welcome to Real Estate Investing Abundance, the show for busy, fulfilled professionals like you to learn how to develop financial independence built on solid passive real estate investments. Now here is your host, Dr. Allen Lomax.

Hello, enlightened investors. I'm your host, Dr. Allen Lomax, and it is a pleasure to be with you today. As we look at using real estate to optimize our wealth portfolio. One of the country's top financial mentors, our guest today, Eunicia Perret, mentors, educators, and consultants. She has helped hundreds of families escape financial dependency and experience financial freedom with her Wealth Freedom Formula. So, Eunicia, I can't wait to get into the conversation here, but first start us off by sharing an experience from your formative years that brought you to be who you are today.

Well, first of all, thank you for having me here with you today. And for all of our listeners, I sat and I kind of pondered on the question that you are famous for, the formative years. And I thought, what makes up formative years? I'll tell you one of the big experiences that I experienced. It was actually in college, so not quite as formative, but we'll take it because it was part of the education. I was finding myself in a class that where the professor was very much known for throwing all sorts of curveballs. And it was at the tail end of a project. We were doing the readout and it was a group project. It was an economics honors course. And in that particular kind of project cycle and readout, we were the first team to go. We raised our hand and we said, we're going first. So naturally when that happens and it's the very first project of the semester, you don't know what you don't know. And not having ever presented with this professor before, we stood up in front of the class, everybody Did their part, even though some of the individuals, as we know, didn't necessarily pull their weight to bring it all together, but they did great on the readout part. So everybody was thankful for that. But then at the very end of the presentation, the class, everybody started applauding, and evidently we had to have done something right. But what we didn't know was that the professor would ask us a curveball question, and his question had nothing to do with the presentation. In many cases, other students, because we found out later, would tell you that they never could pinpoint why or any reasoning as to why the question would be brought up. So here comes this question out of completely left field, and everybody's just kind of looking at each other, and they're shrugging their shoulders, and nobody's gonna say anything. So I'm sitting there thinking to myself, we did pretty well. I know we covered and went far above and beyond from what the professor was expecting. If we don't take this, we're probably— there's no way we're gonna lock in a strong A. So I gather my thoughts as intelligently as one can gather them in such a short time frame. And I just started articulating some of the reasoning and some of the thoughts as a response to his question. And when it was all said and done, he stood up and he started applauding and he said, that was the best bullshitting response I ever got. And I thought to myself, well, that was wonderful. And he said, while it was completely a bullshit kind of response, it was full of thought, logic, and it was well thought out to the point where he said there was no right or wrong answer, but it was done so eloquently that congratulations. Congratulations, you guys locked in on 100. And that was not something that he normally would award for such a project. So the big lesson learned out of that was that oftentimes individuals, it doesn't matter who we are, we will have the tendency to get paralyzed when something comes at us that we're not familiar with, or it's not something that we're used to. And if we are willing and bold enough to step into that unknown space, you never know what can happen. For me, it wasn't just locking in the A for myself and for the team. It was also starting to really get recognized and known within within the broader university community for some of the thought leadership that I had done in other classes or shown in other classes as well, but perhaps not quite as bold. And so it really does pay to step into the field of unknown sometimes.

I think what you're telling us is fake it until you make it.

To some extent, but fake it not in a way where you're putting yourself in trouble. Fake it if you do have the grounds Stand on, right? It was somebody on your show, one of your recent shows, said something about the fact that he said I was too cocky for my own good. Don't get out there and be too cocky. But whenever you're in a situation, if you feel it's a good opportunity, and we're talking real estate, so real estate is naturally one of those areas. If your gut feeling is telling you you should take that step forward, take the step forward. If it tells you just back off and shut up and don't say another word, then do so just the same. Because listening to our intuition so often will take us that extra hundred yards. Otherwise, we probably would not be able to take ourselves on our own.

Well, just curious, what was the question?

I couldn't tell you. I could not tell you, but it was funny. I had a very similar situation when I interviewed for one of the top consulting firms in the world. I interviewed, it was my case interview was with a strategy healthcare partner, and he asked a question. My area of expertise has always been to define its operating model, and he asked a question about hospital optimization. He presented a topic and I had to literally put myself in the shoes of a patient to figure out, okay, when I was last in the hospital, what were the inconsistencies? What were the things that I saw that perhaps were costing the hospital too much money, were creating chaos, et cetera? And at the end of the day, at the end of the case, he said, have you ever worked in a hospital before? And I said, no. He said, well, how did you know these answers? I said, well, just common sense and logic. So, again, listen to your gut instinct. If my gut would've told me, Eunicia, don't step into that field. tell him you don't know, you don't know. But if we make informed decisions based on sometimes even our personal prior experiences, it can be huge.

It can be, can be important. Well, one thing that is a critical part of investing is, particularly when we're looking at real estate, whether it's passive investing or whether it's the general partners, we need to be sure we're getting our share of the pile of profits there. And that's not always extraordinarily transparent. But you think that that's a very important thing. How can we be sure that either experienced investors or certainly new investors, how can we be sure that we're getting our share of the profits and not leaving money on the table for someone else?

Well, that's one of those questions, Alan, that takes us into a territory that I'm not directly an expert on. Obviously, we want to make sure that if you're in any sort of investments, real estate or otherwise, especially if it's something that is creative and there aren't contracts already in place, make certain— it's very important for people to make certain that they do have a conversation with an attorney. The other thing that I would say is absolutely huge, and this is part of what we actually do as part of really being the quarterbacks for our clients when it comes to this notion of creating wealth, is making sure that you know who your partners are. Because if you know who your partners are and you trust those partners and they come with the right endorsements and you've done your due diligence and other people have done their due Due diligence, then you're probably not going to have to sweat bullets hoping and thinking of you know am I getting the right amount? Am I not? Am I being shortchanged? Is there something that I'm not seeing? It's very important. I've been in that situation where I was burnt by so-called partners, and what I realized when hindsight twenty is always twenty twenty, what I realized was that no level of contractual agreement made up for the lack of trust. That ensued. I had full trust and confidence in this individual and the team going into the process. But then what we learned subsequently was that that was not the case. And in my case, had I been in tune with what the market was telling us, was telling me, I would have known that I probably— it would have been okay to listen to the guidance of these individuals, but not necessarily to take them on as partners because other people had gotten burnt. And funny enough, it actually happens to be a real estate investor. And so it's those kinds of things where it always pays to be educated, always pays to have the right team on your side. And especially with the market the way that it has been, it seems like everybody is doing something real estate. So more than ever, I tell my clients if they want to be invested in real estate, which I feel is a wonderful way to grow wealth, we need to make sure that they're in partnership with individuals that they know, like, and trust very importantly, so that they don't have to lose sleep at night over questions that really should not even be there if those 3 elements are there from the get-go.

We'll be right back after a brief announcement. Are you a busy professional passionate about the work of your calling, yet realize that even though you love what you are doing, you're exchanging your time for money? You know that if you were to lose the ability to exchange time for money, your financial well-being will be in jeopardy. If you can relate, I have great news. Steve Tucker Capital is an investment company designed for professionals to develop financial independence built on solid passive real estate investments. Remove the anxiety of an uncertain financial future and go to stevetucker.com. Get your free one-page, 10-step guide to passive real estate investing. Well, there's a lot of options in the investing world. How is it that you work with your clients to help them to get a better grasp and a better understanding of What the viable options are for them, and they're going to vary from person to person and situation. So how do you work with clients to help them unlock that understanding?

100%. That's a great question. One of the big things that we do in working with our clients is we don't ever focus on a specific strategy or guiding them towards any one specific thing that they should be focusing on when it comes to building wealth. What we do rather is we truly understand the client, and that's not something that a lot of financial people can say because the goal of the financial services industry is to bring money money in so that that money gets invested through the traditional financial vehicles. What I realized early on in my career working with individuals one-on-one was that it's not just about where they invest their money. It's about what makes them feel comfortable, right? Life is too short. And if— what good is it that we're amassing millions of dollars if we don't have the freedom to be who we are and if we don't live at peace with the decisions that we've made? And so part of that actually As basic as it may be, it actually translates into the way that our money grows, right? For some people, they're willing to accept more risk. Others are not. Others want financial vehicles, others don't. And so as part of understanding what it is that our clients are trying to achieve, oftentimes real estate comes up like hot and heavy. I want to invest in a real estate portfolio, or I already have a real estate portfolio. And what I found early, early on in working with clients was that they came to me thinking that somehow I was going to banish them to the dark corner because they believed in real estate. Because what had happened before was every single financial person I always spoke with said, you know, if you want to invest in real estate, hard assets are not the way to go. You shouldn't have a brick-and-mortar. You know, you can invest in real estate different ways. But that's not what was at the core of them, their human being. And so they would kind of say, and I have this small real estate portfolio. And I'm thinking, why are you shrugging? Like, that's a good thing, right? It helps with taxes. It helps with growing multiple different types of income and ultimately building wealth. And so what I found is that by truly understanding where clients are coming from, then we can have more strategic discussions depending on what it is that they want to do. Sometimes we can help them, and if we cannot help them, we've built a team of very strategic business partners, people that we like, know, and trust, people that we've done our due diligence, our clients have done their due diligence on. And those are the individuals that then can help our clients get a sense of, hey, I'm comfortable with the decisions that I'm making because I know that I've got the right people to implement it. And they never should feel banished or put in the dark corner. So that's kind of how we go about clients and helping them decipher what is right for them.

Yeah, that doesn't surprise me that many people come to you a little bit sheepish about sharing the fact that they're real estate investors, because And 99% of the time, a financial advisor, if they are talking real estate at all, they're probably talking REITs, which are okay, but it's not, in my opinion, the best way to invest in real estate and probably the lowest yields you're going to find in real estate. So it's refreshing to find a financial advisor who has a much broader perspective on that. Well, you say you don't have a specific strategy for your clients, but you do have methodologies. And approaches that have been successful for clients over time, and you share with them those various different methodologies. So what are those methodologies for long-term financial success?

Absolutely. So I'll share with you 3 kind of pillars, if you will, that we typically focus on with our clients as part of our broader approach. First and foremost, what we're finding is that a lot of individuals are leaving way too much money to taxes. Individuals that coincidentally enough might actually have a pretty hefty real estate portfolio. They're doing well, they're perhaps working still, but they do have that real estate portfolio or they do have other types of investments or different types of ventures and they're leaving money on the table. Some are W-2, they're making in, they're high-income earners and they're leaving even more money on the table to taxes. So what we do is we focus, we help clients understand what are the pitfalls. We go through a very detailed approach to figure out You know, how much money are we paying in taxes now? What are we looking at later? And is any of our money servicing us to where we won't necessarily have to face taxes down the road? In conjunction with that is how do we minimize our tax exposure for the current year? Because that's something that a lot of individuals unfortunately do not know that they have access to. And just because they work with a CPA or a tax pro or a bookkeeper does not necessarily translate into savings year over year. So taxes is a big thing that we do in working with our clients because We've identified it to be one of those blind spots. The other thing that we work with our clients, oftentimes they don't know that they have options, and because of that, their portfolios are not optimized. They might be in some of the most expensive financial strategies or financial types of portfolios because nobody has advised them that, hey, you might have an option outside of your super expensive 403 or 401 or any sort of retirement plan. Not to say that they shouldn't take advantage of the employer contribution or employer matching, but rather to say, how can we maximize the extra money that we want to put forth and where should that money go? And then a big, big question as part of that pillar is how much control do you want over your money? Do you want to have control of your money or do you just want that money to be there for when you're going to reach retirement and IRS is going to say, congratulations, you are now retirement age, you get to choose and use your dollars? Especially for folks that are in real estate, they want that flexibility, right? If an opportunity comes up, you want to know that you have options. You want to know that you have access to your money. But if the money's locked down and it's not accessible to you, or it's accessible at fees and excessive taxes, is that the right answer? And so we help clients find that freedom when it comes to how the money comes and works for them. And then last but not least is there's this golden age, right? When we all want to perhaps not retire, but no longer work for money. And for most individuals, they kind of fall into one of two categories. Category number one, they love to retire early, but they don't necessarily know what it will take or how to get there. So we work with those clients on putting together a game plan that's going to optimize their income in retirement from whatever different income sources that we're looking at. Of course, retirement real estate being a huge component for most people, or for many. And then the other category is individuals that they have worked hard and they are perhaps within that 5 to 10 years from retirement And they have these numbers in their head, right? They're thinking, well, if I could only bring in this amount of money per month, I'll be fine in retirement. But guess what? They don't have the confidence that that is even an option. And so what we do with those folks is we work it backwards again, but for them with a little bit of a different slant to show them how the wealth that they have built can actually help them maximize income in retirement. And then we look at what are the different options from that standpoint. And oftentimes what we find is that if individuals have done something for themselves, have started investing, have invested in them, in themselves, in their financial future, in most cases they're going to be in a better position than they initially thought. But that requires a mindset shift in order to get there, because the same way that the money grew is not the same way that they're going to be taking it out in retirement. And so those are kind of the 3 major things that we work with our clients on. And we found that when we pull them all together, the clients get the sense of relief because they know that just about everything that touches money has been addressed and no stone has gone unturned.

Well, that sounds very impressive because I know a lot of people getting to 5 and 10 years from retirement oftentimes are very, very surprised when they get to retirement to realize that a lot of that retirement income is taxed and they were not counting on that. And if they, you know, even 5, 10 years out from that, you can prepare for that. If you wait until you retire, sometimes it becomes much more difficult to adjust to that.

Right. And not to say that it cannot be done, it certainly can, but the costs are higher and the level of strategic planning just goes through the roof at that point in time because any specific move can easily have a huge impact on current taxes. And so we don't want clients to pay unnecessarily on the tax side when the whole idea is how do we minimize So it's doable, but it's much, much harder for sure.

Sure, certainly. And of course, I mean, all financial planners always tell us start early, but I didn't. I was very satisfied in my career and I was not too concerned about what comes after that. So I didn't, but yes, everybody should start early. It makes a big, big difference there. Well, what are some of the immediate steps that individuals can take right now To give them a sense of empowerment over the growth of their wealth?

First, I would say every single person has that thing, that one or two things that they know that they should be doing. They've had that inkling that I should be talking to someone, or there's an opportunity, or there was an opportunity to do something with the money. Is listen to your gut instinct. If your gut instinct is telling you that you should be doing something, take action on it. Make sure that you surround yourself with the right team and really start just Just start doing something. Not taking any action is just going to procrastinate and make it worse and harder to start actually doing something for yourself. And on the opposite side, the sooner you're going to start doing something, taking action, the easier it's going to be to increase the table stakes and as a result, see your wealth grow that much more.

Well, Eunicia Paray, you have a great deal to offer individuals. So tell us, how can we take advantage of that? How do we get in touch with you?

Absolutely. So we are on just about everywhere on social media. You can find us under Empowered Financial Planner on Facebook, on LinkedIn, or under my name, Eunicia Brett, on LinkedIn and on Instagram. And then of course you can also go to our website, www.empoweredfinancialplanner.com, and you can just message us there and it would be our pleasure to make sure that we address your questions. And if there's an opportunity for us to be of support, it would be our pleasure to do so.

Sounds wonderful. Well, Eunicia, we have time for one last question, and that is, what was one of your most difficult setbacks in life, and how did you come through that time, and what was the big lesson you gained from that?

I'm not sure that I would necessarily call it a setback, but something that came to mind earlier was an incident from early, early on in my career where I found myself caught in between 2 leaders. One was a technologist, so strictly technology, and the other one was a strategist. And both of them in their respective roles managed to upset the client. The CFO was ultimately sponsoring that particular project. And in my role, I was leading one of the work streams, which had multiple projects underneath it. And one of my colleagues was handling another work stream and all of the work streams were really looking for the guidance that was set as a result of the work that myself and my team directly were doing. And the intrication came with the client asking those 2 leaders, why aren't all of the marching in the same order that my teams were marching in, because if they would have, then the stakeholders from within the company would not have been as tasked with additional meetings and whatnot on their calendar. And so of course, as any good leader would do, they should have kind of assumed responsibility, but instead it came tumbling down like a ton of bricks on my head and it somehow became my fault. So because I knew that it wasn't my fault, I started presenting the situation so that they understood what we were dealing with and why Really, the client wasn't necessarily right, but we could have been doing— the other team could have been doing things a little bit different in how we were going to go about it. And next thing I know, I got a call from one of my mentors who said, Eunicia, why in the world did you try to argue your case? And of course, being very junior in my career at that point in time, I thought, well, if I was not at fault, why would I have to just bow my head and say, absolutely, I assume responsibility? We had tried to instill this level of order across the different work streams, and the fact that the other leaders weren't taking it on was not something that I can take responsibility for. And my mentor said, Yanicia, you are one of our rising leaders. You are an exceptionally smart individual, but here's something that I need you to learn. I need you to learn to bite your tongue when somebody accuses you and just ask for more insight. Ask for it. Ask 'em if they could provide examples. So that you can internalize them and then be able to provide a solution. And I thought, that's complete— a bunch of BS. Why would I do that when we already know the solution? And, you know, it was one of my mentors that I love, and she's just been amazing. And she said, Eunicia, just trust me. If you do this, you will get so far ahead. And I remember years and years and years later when I was in that position, giving my coachees and my mentees that same guidance. And every single person that took that guidance of just when you get feedback, internalize it and see what's good and what's bad, just leave it behind. But what's good, even if there's just a breadcrumb in there, it could help you truly excel so much faster and so much further ahead. And so I've taken that. We— part of the reason why we've been so successful is because we care about what our clients are saying. We care when they say, hey, I'd love to learn more about this, or what about that? We take that, we internalize it, and if it's not already part of something we discuss, we try to make sure that we have the right stakeholders at the table to address those questions. So that lesson went very far for me. It was a hard pill to swallow at the time, but it worked magic.

What wonderful advice, and all of us can certainly benefit from that. It's so easy for us to become defensive in just about any situation because our egos are right there always and ready to get into our way. But it fairly, it rarely, rarely ever serves us to act defensively. So excellent, excellent advice there.

Very true.

Well, Enlightened Investors, it has been a delight to be with you again today, and I look forward to being with you in our next episode. And Eunicia Paray, thank you so much for being with us today.

Thank you so much for having me, Allen.

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