Navigating Financial Waters with Dan Moloney: A Journey of Trust and Planning

Have discussions with your advisors. If you're going through periods in your business or periods in your life where there's uncertainty, life events, changes, concerns, have those conversations. Because we can sit back and we can put plans in place, but we're probably not going to talk every day. I'm not going to talk every week or every month. But if things are coming up that we need to adjust, we can and will. And it's about continually having those discussions. There are clients that we meet with every couple of years. There are clients we meet with every couple quarters. And it's about having those conversations and making sure this very liquid plan, this moving document will change with you. Just because the, obviously the market uncertainty and a lot of what's going on out there concerns people. You have trusted advisors in your life that you can rely on, you can talk to, you can have those conversations with.

All right, everybody. So I've got my good friend Dan Maloney here with me in the studio. You know, I gave a great intro to Dan because he's a very special human being. Dan is one of my closest friends as well. I'm very grateful for the opportunity to have a Dan Maloney in my life. He also works with a lot of our clients. Super proud to. To recommend Dan for anybody. So we're going to talk a little bit today about financial planning and what that looks like. But if anybody's looking for a great resource, we're going to make sure that you have all Dan's contact info attached to this. And also I'll get him to share it at the end. But anyone who is looking for someone to help guide them with choosing investments, and we're going to talk about that a little bit. Dan is really someone that I Trust with 100%. For me, he's my financial advisor, and I also highly recommend him to my clients as well, because. And here's why before I bring you in. The reason is, is that I feel like the financial planning industry is one on trust. And there's so many variables that are constantly moving inside the market that you can't really predict. Right. Like the, the organizations. You know, Dan's affiliated with Sun Life. Sun Life has a lot of really brilliant people who are trying to predict where things are going and what options to choose. But really it is a. A bit of a guesswork, backed by a lot of intelligence. It's not a guaranteed sort of market. And, you know, you've got the Sun Lifes, the other larger organizations that are doing all this great work trying to predict it but ultimately, when it comes to a consumer standpoint or someone who wants to work with an investor, it's someone that you want to find, that you trust and that, you know, 100% has your back and your best interest. And for me, and again, very highly recommend working with Dan. He is that person for me and. And for the clients that he works with. So, anyway, happy to bring Dan in. Dan, I want to jump in here and maybe share a little bit of your story. So, again, Dan and I have known each other since high school. Sort of had a gap there in university, where we went and did our own things, but reconnected because we have a similar sort of vision in helping support people. So, Dan, give a little bit of background about how you started in your business, you know, the time that you spent there, and a little bit about your story.

Awesome. Thanks, Bob. Yeah, so born and raised here in Peterborough, and from there went to school and kind of got out of school, got out of Trent University here with a business degree, and then jumped kind of right into business. They're doing it now 16 years, which is fantastic and unbelievable all at the same time.

Did you start in 2008 too?

7.

2007. Okay, good on the math there. What a great time to start in the investment world.

Yeah, 2008, it was a little wicked right into the deep end, but, you know, it worked out well. It taught me a lot and obviously, lots of quick learning because it wasn't really happy times, but a lot of recovery happened quickly, so it was nice to go through that. But, yeah, so 16 years, obviously seeing a gamut of different things. Products, ideas, companies in and out. And, yeah, it's just been really wonderful. We've been able to build the business up significantly. We've got some staff, we've got a couple locations. It's. It's fantastic to know that, you know, we can give the support to people the right way. Covid kind of made us pivot a bit, probably similar to your business and a lot of other people's businesses in terms of more virtual, more E sign, that kind of stuff. So it's allowed us to, again, help more people and kind of get the right products aligned for the right people and the right reasons.

Yeah. And probably expand your service area as well.

Yeah, yeah. So, I mean, before it, you know, we were starting to get into some of the virtual appointments, zoom E sign, but it really wasn't front and center, probably for anyone up until Covid, and then there was a lot of driving. So I still do quite a Bit of driving, get on the road, see the people. It's how it works. But there are a lot of people just comfortable with Zoom. Like, you know, with your clients and your staff upstairs, they're jumping on these calls all the time. Right. And it's. It's just how we do business now. And, and some of it's great. Some of it's convenient, some that you do want to, you know, get down and see in the whites of people's eyes, but other times, it's a quick call, quick conversation, a couple of quick questions and some documents, and it can be very easy. It's nice to have that simplicity. And I think for the people, it gives them a little bit more of their time back. You know, we do talk about, you know, how they're doing and their kids and their grandkids and how work's going, but you still. You're able to get down to business. I think people enjoy that, where it's. It's still a relationship, but yet you still get stuff done. And it can be very quick in 15, 20 minutes.

I actually. I'm going to be honest, I actually like the Zoom meetings better. Not that. Listen, I love spending time with people, for sure. I just feel like our ability to impact more people, help more people, is so much higher. And to your point, you know, the savings, even people who, you know, our office is located in Peterborough. You've got an office in Peterborough. The savings of time for people to get to our office and then park and then do whatever they need to do a lot, man. You know, even in the same town, the amount of time that's saved by jumping on a Zoom call and you can still see their face and interact, which I think is. Is pretty great.

Yeah. It's not just emails, right? Not just phone calls back and forth, which can be way more personal, you know, but, yeah, it gives you that relationship still. And I think it's just the ease, and I think now with society being more comfortable with it, it allows us to jump into that, to jump in and still retain those relationships and meet new people and still be able to have those good relationships going forward, for sure.

Now, I did not bring you in here to talk about Zoom meetings and how we like those, but I. I do like them. Let's talk a little bit for our audience again. Entrepreneurs who are either early infancy stage in their business or have got to the point where they're making good money or even later on where we're even looking at selling the business at some point. Let's Maybe look at the different stages of investing and what, what people should be thinking about now before it's really too late. Right. And, and maybe if we, we think of the initial business owner who's got, you know, 10 plus years left, starting to accumulate some cash flow and some earnings in their business, what should we be thinking about as an entrepreneur on our retirement plan?

Yeah, so a lot of it comes down to we talk about this almost every time we chat. It's personalizing that plan. It's getting something in place that allows that business owner, or business owners, if it's a couple or a team, to put something in place for the future. Whether it's you know, two or three years in the business, whether it's kind of mid stage where they're, you know, 40 to 50, trying to figure out what this looks like, getting the next generation involved, getting it key person involved, or like you said, the latter stage where they're getting ready to conform. Succession, exit, planning. It's a liquid document so it's something that's always going to change. But at least in the beginning, whether you start at 20, 30, 40 or 50, you've got something in place. You've got a, a financial, a hard copy financial plan that you can say this is how I'm working, these are what I'm working towards. And then it's personalizing it. So I always use the, the model with people. What are you saving for? Do you want to save? Some people purchase real estate, some people want to save, some people want to spend every penny they make. But the ones that want to save, are you spending, are you saving for Saturday night? Are you saving for your kids education? Are you saving so much you're going to change your family tree. What is your goals there in terms of what you're trying to accomplish? Your goals I know very well are very different from my goals. Just like the girls out here, their goals are very different from our goals. So it's about sitting down with a professional knowing that what can I do to make my future better? What can I do to make today better? And that's not only my involvement, that's your office's involvement, your lawyer's involvement, your banker's involvement and going through those strategies and ideas, say what do we need to work on to make sure your financial plan is proper and right for you at this stage in the game and then obviously continuing to work on that as we go along. So I meet with someone who's 30 years old and they've, they're that business that's just starting to get some momentum, some cash flow and how do we put that to good use? And then what happens year two, year three and year four? We continually work on it. It's not just a one stop shop where you're done and over with. We're not a transactional business. It's building that relationship and making it there for them for the future.

So you said something interesting that I, you know, hadn't really heard from a financial planner before, which is changing your family tree. Do I have options with that?

Yes, yes.

If I saving, if I save enough.

Change your family tree. I think you might have missed that, that point there.

If I get to choose to change my family tree, going down, down, not.

Up, not up, not up or sideways, all down, all down. But you know, what's the model? And I do meet with some people that look and you're a big proponent in this estate planning, passion planning and, and you know, planning for my kids future. How do I support them? And it's not all just how do I get them through post secondary or how do I get them set up in a house? Because now that's the front of mind for a lot of millennials or a lot of people in their early 20s. It's how do I make sure my legacy carries on. And I know for you, for an example, you're a big believer in that, where you have these conversations with people, including one with yourself, about how do I make sure this legacy carries on for my children and grandchildren. And yes, our kids, you know, technically aren't even old enough to drive right now. But in five, 10 and 20 years we're going to be having those hard conversations. You can set stages up today that allow to make sure that that legacy can carry on. And what does that look like? And that's where the personalization comes from is what do you want that to look like? How do you want that to look? How do you want to look for your wife? How do you want to look for your kids, your grandkids, et cetera, et cetera.

So, so two thoughts on this too. One, obviously, and we would agree on this, the earlier you start, the less you have to contribute on a regular basis to get to your goals. Right. Like there's so many different models out there where you know, if you're in your 20s and you're starting to get a little extra surplus cash flow, let's get it put away like a little bit of it. Even if it's, and I know I'm a huge advocate for this and you humor me with it. But I'm a huge advocate of regular pre authorized debit, so. And I've got this set up with Dan too, on and off as there's different investments or financial commitments that I have. But Dan pulls from a weekly basis from my business bank account, from surplus cash, puts it into investments for me so that I don't have to do it. Because I know you, the business owner, right. If it comes down to you actually physically writing a check or doing an E transfer or something that's manual, you won't do it because you're busy doing 500 other things. Next thing you know, it's three months later, you haven't made the one contribution. You get that set up pre authorized. And I can tell you with ease, whether it's Dan or it's anybody else, your financial advisor can set those up so that it just, it works like clockwork. Do you want to maybe talk about it?

Yeah. And, and, and there's actually two sides to it all. So number one, obviously the ease. So setting it up and it doesn't even, you know, business orders are great because they either use their whole core, they use their operating account and it's, it's just setting it aside just like you would, you know, paying your car insurance or your cell phone bill or your gas bill. You can set it up where you put in money every week or every two weeks or once a month, whatever your comfort level is. So there's the ease side of it. Like, like Bob had said, that's easily accessible. And then we obviously take a look at a variety of plans that are right for you and your business, but it's also the actual returns. So when you look at someone who puts in a check and this used to be historically when people used to go buy their RRSPs. So January and February, RRSP time where people look, okay, I made so much money the year before. Now I'm going to go ahead and I'm going to buy a $2,000 RRSP or $10,000 RRSP and they put in the check in January, February. What happens when the market takes a bit of a correction? March and April, not too comfortable for a lot of people. But if you're able to dollar cost average in. So instead of that, say you put in a check for 12 grand. Instead of doing a check for 12 grand, maybe put in $1,000 a month and you put in those varieties over those 12 months. Historically, any which way the charts are dollar cost averaging investors generally do not huge But a percentage more on an average return going forward. So it's, it's not only for cash flow and ease purposes. Accountants like that a lot more that I see when we send statements over because it gives them a chart of when and if the money will put over how much. But it gives people the ability to know that they can dollar cost average in. So if the market's always going up, it doesn't really matter. But as we know, the market doesn't always go up. There are hiccups along the way. And obviously you want to buy low, sell high. So you maybe are buying in at better times if you were to dollar cost average it in. Yeah.

Which is great advice. And of course, as the accountant side of me, cash flow management side of me, I really love the weekly. Because cash is coming in the business on a weekly basis. Typically you probably want to match, you know, if you're a real estate agent, for example, and you get a monthly deposit that comes in for your commissions or even bi monthly, you probably want to match it up with that schedule. You know, we want to look at the cash flow of your business and match that sort of contribution up. But honestly guys, you Even if it's $100 a week, which is 50, $200 a year, start there. If you feel like you still have surplus cash, make it 200, make it 300, make it 500, make it a thousand. All of a sudden you went from 5,200 to 52,000 of contributions a year. Dollar cost averaging rates of return. Hopefully, you know, if the market, especially with what the future really holds for us here, the market will continue to have positive returns. Especially since we're in an economic downturn, starting to make those contributions now. We should be able to realize some great returns along the way as well. Now, I do want to make one note, and Dan sort of brought this up in passing. As a business owner, you know, looking at the different stages of where you're at in your business. I just want everyone to just listen to this for a second, all right? The statistics around you actually selling your business are not what you think they are. And this is not me sharing my opinion of whether you've got a great business or not a great business. Statistics show that less than 50% of people actually sell their business for getting a check in exchange. And which is scary, right, because there's.

Lots of known to the public that's, that's good.

Lots of entrepreneurs who are just building their business thinking that that's going to be your paycheck we can't rely on that. You know, especially if you've got a business that's under a million dollars in revenue and you're doing a lot of the work yourself, the ability to replace yourself in that business is going to be a challenge. And somebody has to be willing to pay you to essentially buy your role in that organization. When you get a little bit bigger, you know, when you've hired yourself out of the business, it's got a consistent sort of return. We've got eight factors that we look at in the saleability of a business. It starts to increase the probability of you selling. But what I want you to understand is we need to have. I don't like Plan Bs, but this isn't even a plan B. This is a supplementary sort of focus for you as a business owner. You need to start planning to have some cash resources available for you for your retirement. So Dan, if we've got a, you know, a 30 year old, let's say 30 to 40 year old business owner who's just in the midst of starting to make good money in their business, they've got surplus cash flow, what are some of the things they should be thinking about when they're thinking about their retirement, should they be thinking about, you know, this is how much we have to get to as far as a net worth value to give us X amount of income a year. Right. So if you're making $100,000 a year and you want to get yourself to a financial freedom standpoint, you know, do we have to be looking at a certain contribution level on a regular basis? How many years, what types of investments? So what would be a. Before we get into what types of investments, what are some initial considerations for anyone at that stage to say this is what we need to start thinking about?

Yeah, so great question. So a lot to unpack there. So when you take a look at what people do, it's an emotional thing. So it's about savings. And when you, you turn that towards a business owner, it oftentimes has to actually personalize for that owner and then it actually has to personalize for what the business is. So there are people out there that, and I don't know the stats and you might know this service business owners versus maybe a product based business owner. So that product based business owner might own a shop, they might own real estate, they might own patents, they might own that. So when you talk about, you know, people wanting to succeed their business and looking for a check up front, they are probably more slanted to getting that versus the service side, the service, at.

Least for the physical assets.

Yeah, yeah, it's. It's easier that way, especially in your world. But when it comes to a service level business owner, it's harder because again, you're just hoping on a book of business. You're hoping on, you know, a lot of goodwill. You're hoping on what you've built up with or without real estate. Those are the ones that I feel like need to save more. Historically only because like you said, it's not. We're not looking for plan B, but we want to make sure that if this doesn't happen, if you don't get that check at the end of the day, how are you going to keep going? How are you going to support your family? How are you going to have your retirement dreams accomplished? Right. So in saying that, it's all about personalizing it. Do you want to save? How do you want to save? Do you need to work with an advisor to say, you know what, if you are really geared up for what you're trying to do and you want to buy real estate, how can an advisor help you with that transaction? Do you need to save up for that down payment? Do you need to put so much in place and start working with a mortgage broker? I often tell people, if you've got a goal in three to five years of buying real estate, great, I'm not going to stand in your way. But let's start making some mortgage payments to an investment account to make sure that you can handle that. Because if you're going to put money in and six months later pull it out, well, you're not going to be able to really do that with real estate. You're going to still need to make those mortgage payments. And you can't really, you know, call up the bank and say, I need this brick to eat every week because I don't have any money. You need to make sure you can afford it. So testing yourself, it's kind of like a young person when you're saying, oh, I want to go out and get a house, I want to go to this great start jamming a couple thousand dollars a month into your home savers account or your tfsa. I don't know if I can afford to do that. Well, you're going to have to because that's how much a house costs, that's how much a mortgage costs. So for a business owner, it's all about that savings. And oddly enough, to go along with your line, it is about Those routine savings. Because that's how people are doing this. That's how people are able to save anymore. And it's. And it's probably more mentally than anything because it does allow them to just set it out and forget it. And they feel like we're another bill payment, which is great. And then we have those saying, what are your goals here? Are you just saving to save? Is there. A lot of business owners that I deal with seem to always have this threshold. I want to save a half a million dollars, I want to save $5 million, I want to save this target. And it's like, okay, well how come? What are we saving for? And then obviously I get to do the math. The fun part saying, okay, here's what we got to do to get there. Here's how we, what do we got to do to get there by 60, get there by 55. To get there by 50, what do you have to do to increase your net worth? What do you have to do to increase your cash? Liquid savings within a corporation? It's lots of different ideas. And that's where the fun part for me comes in. Because I'm allowed to get into those people's minds and say, why are you trying to do this and what are you saving for? And then I get to do the easy part, which is really just some paper pen and a calculator figuring out how we do this. And then obviously long conversation about what we invest in to make those dreams happen.

And so just a couple points to add. One, for those investors who are ready to get started. And guys, you should be thinking about getting started, whatever. Even if it's a hundred dollars, right? When we're starting to make that savings plan happen, we need to be considering our organizational structure for a couple reasons. Okay, so one is if we start accumulating savings, for example, we get Dan to set up a pre authorized payment for investments that goes into our operating company. If we start building up too much, it could actually have a tax issue for us in the future. So we want to make sure that our structure is planned properly. Like for Dan, when he pulls money from me weekly, it goes in my holding company. So he pulls that money from my holding company, my holding company owns that. It's not going to jeopardize the tax value or the tax benefit of having or not having those assets in my operating company. Because if I have too much cash, if Dan's makes too much money for me and my operating company and that cash gets too high, it could cost me tax down the road that I don't want to otherwise have. So just make sure that when you do start this that you have a conversation with your tax advisor, which should be us. Feel free to reach out to our team and we'll come out with the best structure for you to set this plan up. Right. We just want to make sure that that's in your best interests. I will also say, and Dan has kind of commented about this, as entrepreneurs, we aren't as consistent as maybe what we want to be as far as our targets go. So is it savings for savings sake? Is it saving for real estate? I can tell you I'm probably the most frustrating person that Dan works with. In that case, we start to get some momentum. Not quite okay, but there I'm there. We start to get some momentum, we start to get some investments built up. All of a sudden opportunity arises whether it's real estate. Like I remember when we bought the real estate that our office is in. I remember saying to Dan, hey Dan, you've done some really great work here. We've got some great returns. We've accumulated a nice little amount. I'm going to take that all now and put it into a real estate investment. And he was very quickly like, absolutely, if that's what makes sense for you, this is how we get it to you. And I think I had it within 48 hours into my personal account. So not in my personal, in my holding company account. But this is the power of it, right? That forced sort of savings plan that can be repurposed if an opportunity comes up. And you know, again, when I talk about having a trusted advisor, someone that you know is out for your best interest, I, I know when I pull my investments from Dan, that's not necessarily helping his bottom line income. But without question he was very focused on what's in the best interest for me and how we get that working towards building my future. And of course we go back to ground one and we start building up again. But again, having that advisor who's going to have your best interest and be looking at what's best for you is really important as well. So. And the flexibility of being able to pull those payments out if they need to be repurposed is super valuable and again start that force saving sort of plan. Now let's talk about investment options. I know there's lots of questions out there. There's lots of probably too many options to be, to be real, frankly, for.

For general people who are just trying to put away money and invest. Yeah, there's probably way too many options out there.

Yeah. Can we talk about maybe the different buckets that people might be presented with and maybe some pros and cons for each.

Yeah. So. So when you look at, you know, that savings, so you've done, you know, 90% of the work and saying, I want to do something. Okay, well, how much do you want to do? Who should own it? You know, is it personal, is it corporate, is it a whole co. And then what do you want to do? So we've done, you know, 90% of the work, deciding kind of the logistics of it all. Then it's okay. What are we doing with it? Well, there's options and like Bob said, there's for, for Canadians and probably people across the world. There are too many options out there. What we do is we succinct it all down and we have a conversation about risk and we have a long conversation at risk. Okay. Do you want any risk, yes or no? Because that can lead us two different ways. No risk. There's lots of options out there. Now We're August of 2023, so interest rates are nearing peaked, if not already there. So we're seeing some great returns and some GICs that are locked, some high interest savings funds that aren't locked. People have the ability to.

Sorry, GICs. And this has been something that we've seen this year that I haven't seen in 16 years.

Never seen these returns.

Right.

In a GICB, 5% on two years right now. It's, it's wicked. It's, it's.

Which is really like the only guaranteed investment that you can get access to. And it's guaranteed at over 5%.

Yeah, yeah, pretty good. We got a high interest savings fund over 5% right now. A lot of people with cash are going to that because obviously no risk. We can't, we can't guarantee the future returns if interest rates get lowered similar to a mortgage. But it's one of those things where people can park their money. So that gives people the flexibility to know there's no risk. And then you look at something with maybe a moderate risk where we look at building certain portfolios for people that, you know, if you're investing more longer term, you probably can afford to take some of that risk, some of that equity risk or stock. If you're more short term, you might look at more safe bonds, you know, going more towards that cash it all again. And it's a bit of a cliche word personalizing that portfolio. What makes sense for that person, Bob, sitting Down with you. Are you saving to buy another building here soon? Sure, in the next couple of years. Great. That investment model that we put forward to you is going to look different than if you said, nope, I'm not touching this money for 20 years. This is for my retirement. I will never call you, I will always add money. I'll never do anything. Great. That investment model will look very different from the one who's saving to buy a house in the next couple of years. So it's all about personalizing it. And we can go high risk. We can look at some really good equity funds that perform, perform well. We can look at your pricing in terms of what you want to save. And then there's people that just want to take kind of more balance, more middle of the road where they have a combination of both, which is great. It really just comes down and it comes back to working with a trusted advisor, whether it be a financial advisor, an accountant, a lawyer, whoever. You've got to have trust in that person that they're making the right decisions for you. People that, you know, I've been doing this long enough and you'll, you'll see it as well. There are people out there that are very in tuned to their annual returns. They're very in tune to their financial plan, they're very in tune to their investments, but they're a very small portion. Everyone else has a lot of faith and a lot of hope and a lot of trust in dealing with someone that is able to kind of use what they have going on in here and put it on paper. And that's where you and I come in, is that we're able to sit down and put pen to paper and say, here's what we're going to do for you. And I think those people, that's okay because that allows, they're paying for a service. So why not allow someone to take that worry off you and put forward? As long as you're communicating really well, they tell you what you want, you tell them what's going to happen, that they can put their plans to work and their money can start working for them. But it comes down to a lot of what their comfort level is. There are people out there that are very aggressive investing. There are people out there that are ultra safe. Business owners have different slants in terms of what kind of business they're in. Some are very conservative investors because they feel like their investment is their, their business. There are other ones that say, you know what, I've, I've had a lot of risk in my life. Why stop being risky now? And so they keep going. And again, it's, it's not only timing of the market, it's time in the market. So you need time to kind of sit there and go through these cycles of, of ups and downs and recessions and corrections and interest rates. And there'll always be something. There's charts out there of the last 60 years of reasons why not to invest. And we've got, you know, 60 years of returns. So I mean, we've, we've done something right. It's just deciding on what's good for you, your family and your business at the end of the day. Yeah.

And maybe we'll use a case study in here, which is my parents. And I don't know if my parents actually tuned into the podcast. Here's open, but if they do. Hi, Doug and Sue. Yeah, you've been plugged. Anyway, again, Dan, being a trusted advisor helped encourage my parents to move their money over. We're talking about time in the markets. There needs to be a shift though. Right. And I think you had brought this somewhat to my attention. You know, when my parents move their stuff over, they were still in a fairly growth sort of investment. And I believe it was my parents, we're going to say it was because that's the. I'm not going to say this is a case study. Whether it's Dug and Sue or not, I don't really remember. But they were in a fairly, you know, growth focused investment portfolio where maybe 20 years earlier, that was the right fit for them. But as you continue to get closer to that retirement plan, you know, time in market might be shortening, so that balance needs to shift. Do you want to maybe talk about that a little bit?

Yeah. So what I remember when I first started, you take all these courses and you go through these classes and it's a lot of conversation on risk and how to gauge people for what they should be in. And, and there's a theory there that if you're, if you're 1 years old or you're 0 years old and you're going to invest money, you should be 100% in equities. And if you're 25, you then should shift that equities down to 75%, trying to basically get to cash at age 100. So when people age and they get closer to either succeeding their money to their kids or using it for retirement or A, B, C and D, the closer you get to that end point, the more safer and conservative you Get. So we get a lot of pre retirees similar to your parents when, when we first met that they had those years of risk there. They were our age when they had amassed a decent portfolio and they were saving, doing all the right stuff.

Young. You mean they were young at one point.

Yes, they don't take back bills day. They were young, young ambitious people and they got to the point where, you know, they took on lots of risks, had some really good returns, but now they've amassed a portfolio that, you know, they feel uncomfortable with that principle fluctuating as much as it did. And so you sit down with people generally like, you know, if they're going to retire at 60 or 65, they look at those and they say, I don't know if we want to take this risk anymore, you know, but yet we still need to get, you know, a 5, 6, 7% return because we're going to retire, we're going to use some of this money A, B, C and D. So now it's like, okay, maybe we de risk this portfolio. And that's where a lot of retirees come in, where they say, okay, how do I, how do I do that? And it's just the click of a button. It's switching from, from, you know, M to L. We're able to kind of downsize the risk in that portfolio and make it more customized for them. Just because you and I might be aggressive investors doesn't mean that our parents should be or.

How dare you share the detail of my personal investment choices.

Just kidding.

And it allows a good assumption.

Yeah, it allows people to know that it's, it's customized for them because, you know, they may have their own ideas. Some people are, have an ultra conservative their whole lives. And then there are other people that it's just changed as they age, change for whatever they're saving for and change for that time horizon.

Yeah. And super important to continue to modify that. Right. And I think 100%. You know, I know Dan, he talked about this as well, jumping in the car and going and meeting with clients or on Zoom, since we can do that now. But the idea of continuing to communicate with your financial advisor about what your plans are. Right. So my parents, again, I think it was them, you know, that hadn't necessarily had the conversations with their advisors or maybe they did and nothing was changed about, you know, here's the time frame of where we're going to be able to start pulling this money out as investments for our retirement. You know, we need to continue to know what that timeline looks like. And for someone who's looking at, you know, maybe some of the areas that I get into where we stockpile money in a short period of time, pull it out for a real estate. Although I'm done with real estate, Dan, I'm telling you.

Sure, sure.

Where we start pulling it out, I probably shouldn't have it in a high growth market. Right. Because the chances of me even putting, you know, 20, $30,000 in, in a high growth, volatile market, I might come out with 15. And that's just the choice where if I have a more conservative, because that's my objective, to pull that money out in the short term, I can have a more conservative approach to it, which allows us to maybe get smaller returns or give us smaller loss opportunity. And that's the risk profile that we're really talking.

Yeah, I actually, you know, sitting down with people and it's business owners included, it's, it's the roller coaster park. What kind of roller coaster do you want to be on? You know, if you're going to go on the most aggressive one there, you're going to see great heights, but you could also come down very quick as well. Right. So it's, it's about, you'll enjoy the ride. You know, when you get to that end, you'll have had a good time or do you want to stay on kind of the teacup ride where you might have a good time just not very exciting and it's a little boring. So the, the returns are a little bit more boring. They're very vanilla. And that's.

I might be sick, I might be sick of. Yeah, yeah.

So, so maybe you need to go a little bit more. But it's that discussion of risk. It's that risk and what people are comfortable with and what makes sense not only for them, but their, their goals. And, and that's where the time horizon comes in.

Yeah. Let's talk about. So hopefully that's some good perspective on investments, you know, risk profiles. Let's talk a little bit about insurance for a minute. So from my perspective, I'll give you my, my thoughts on it and then jump in and correct, I'll correct them. Please correct me. But the idea with insurance is especially for people who are younger, right. Who haven't had the ability to build up that portfolio of investments or, or have that sort of security net. An insurance policy for me is more of an estate plan where we're looking at saying, okay, we don't necessarily have it now, but we want to guarantee for our family that they're at this particular level should something happen to me. So, for example, you know, my family has become accustomed to a certain lifestyle in the way things are right now. Something were to happen to me, I need to make sure that there's enough insurance there so that they can continue on that life. And my removal from existence is not having a negative financial impact. Because what I don't want to have happen is if something were to happen to me, that my family has to essentially liquidate everything just to survive. So when I look at insurance, I look at it and saying, okay, maybe I haven't had the ability to accumulate enough yet to create a financial freedom, which I want to talk about in a few minutes, but that I have that safety net there should something happen, that they're protected. What's your approach to insurance and insurance planning?

Yeah, so different avenues people can take with it, but you hit the nail on the head when the worst time in a spouse's life comes. We're the only one with a check. We're the only one with a check. Everyone else has their hand out needing a bill payment, needing the mortgage paid. You know, the funeral home needs to be paid. There's lots of different people there waiting for a bill to get paid. We're the only people coming with a check. And I think that gives someone like yourself, and not only business owners, but just people on a whole a little bit of security. I was once a great client of mine not too far from here. He. He recently got diagnosed a couple years ago with very severe case of leukemia. And he bought a great big policy before it happened, luckily, and he's still with us, him and I had a long conversation. He said, you know, I had to go through these treatments, and they were awful. And he got sick and this and that and everything else. And he said, but you want to know, one of the only things I didn't worry about was money. He said, because if I'm not here, they get that. And I confirmed yet that was the case. It was a $700,000 policy. And he says, they get that, right? And I said, yeah, if you're not here, I'm paying that out, Rob. Like, this is what's going to happen. And he said, then that's one worry I don't have to think about when I'm sitting in that chair getting these infusions, when I'm going to doctor's appointments, when I'm being hospitalized, when I'm going through A, B, C and D. I don't have to worry financially what's going to happen to my family. And I thought to myself, I've never thought about that. I always think of like, oh, here's what's going to happen, you know, not during that period of if you're sick before you pass that worry, that concern, because then it's usually too late to get insurance. Right? But this was the ability to know that you've given your family peace of mind where they can focus on what needs to be focused on right now. And hopefully it's recovery. And this gentleman, luckily still with us, that it's that recovery he can focus on. Because if it wasn't, then it's another worry onto his plate and you know, catastrophe could happen. So when it comes to insurance, it's easy. What, what are you again, it's similar to saving. What are you saving for? Are you buying insurance for yourself? Because there are products out there, disability, critical illness insurance. We can look at a participating a whole life plan that can give you a dividend each year. Are you looking to just cover some debt for a spouse or for your kids or just to make sure there's a legacy provided? We can look at term insurance. There's lots of options. It really comes down to people's preference in life. I have people that buy policies to donate to charity. I have people that buy policies to make sure their grandkids have something set up in life. I have people that buy stuff for their spouses. I have people that buy stuff for their exposes because of court orders. The one thing that you had mentioned on earlier, just to speak to that business owners and the succession and getting a check, 50% I think he said, basically don't get that check up front this year. We've written a few cases basically on that current business owner because basically this transition from 100% owner of the business to 0% owner of the business, but trying to sell those shares, if something happened to them, how do those shares get paid in, where do they get paid out? Versus if you buy a life insurance policy, maybe the the new owner pays for it, but the beneficiaries are the family. To know that during this time period and you see it every day, is it a two year buyout, is it a five year buyout, Is a ten year buyout, is it a lifetime buyout? It's to make sure that there's always something set in place. Because what you've worked really hard for, whether you're trying to protect a mortgage, whether you're trying to protect your business Whether you're trying to protect your income, your biggest wealth building tool, those can be taken away, but you need something to make up for that or someone else is going to have to be there picking up the pieces. And I know most people don't want to have their spouse and their children worry about that. So they put something in place. And again, it comes down to personalize. What are you trying to ensure, what are you trying to protect, what are you trying to do for the future? And that's where we generally get into some estate planning and some legacy planning. And then really for a lot of business owners, we can look at some, some passive income options with a dividend policy, we can look at some really great stuff and knowing their business will always have protection. For a keeper, someone that's working in the business today, there's some really good stuff out there and it's about just sitting down again, talking your goals, what's important, what are you trying to do here and go through the full plan. And luckily when we do sit down with, with new people or people that haven't worked with someone in the past, we put together a full plan. So it talks about the insurance model, it talks about how to save, it talks about corporate savings, it talks about how are we working with the business. Do you have an accountant in place and their team that are going to help you? Do you have a lawyer you're working with and just going through the whole gamut? Because we need to make sure all the bases are covered because that's what they trust us to do, is make sure them and their business and their family 100%.

And I really like the idea of using insurance for different purposes, like on a succession plan. That's a great value add conversation. Right. To make sure that if a vendor take back sort of situation, which I'm kind of reading into, a vendor take back sort of situation where they're not getting money upfront, sort of guarantees the family that they will be paid. Love that idea. Right. That's a, that's a pretty creative way to guarantee the eventual payout for that policy. So that's fantastic.

It was an old expression that I always remember and it's, you pay 1% to cover 100% of the problem. So then there's no risk. There's no risk, there's no concern, there's no nothing. You're either going to get paid at your shares. Terrific. Or something happens, there's going to be a payout from the insurance company.

Yeah, no, that's great. Now turning Away from succession planning for a moment. If someone were to be thinking, okay, great, you've got me thinking. Now we want to talk about insurance planning, estate planning for our family. When is the best time for people to invest in insurance?

Right now.

Exactly, right now.

So call me right away, quick.

No, but it's true, right?

And it's obviously the younger you are, the rates are lower, so that, that's a big benefit. But it's also, it's also, you know, as life changes, we can adapt to that. So I mean, you buy something today and I've got people all the time saying, geez, I wish I would have done this even with investments, really, I wish I would have done this five or 10 years ago. And it's like, well, maybe you weren't at that stage to do it, but if you're at the stage now to even have a conversation, there's stuff out there that you can buy that people don't even understand how cheap it can be. And you can put good stuff in front for your family tomorrow. Like we can get stuff set up very quickly. It's really just about making sure you're ready to make that step, ready to make that commitment. And what does it look like for you? Yeah, there's no pressure. It's sitting down, going through a full fledged plan. I come back to you with some recommendations and you decide to go from there. It can be very quick.

And I would say too, you know, we, we acquired a company back in the fall, last year. You know, one of the things of acquiring businesses is if you don't have the cash to be able to fund that sort of purchase, you're borrowing money. And you know, in that instance, and for anybody who's got debt, whether it's mortgage, whether it's business debt, you should be looking at some sort of term policy because term is very inexpensive.

Cover temporary debt.

Yeah, for what you, what you have. So for me, I took on a fairly substantial policy to make sure that, you know, if something happens to me before I pay this debt off, that my family has the funds to pay that money off so they're not stuck with debt. And I think of this a lot with estate planning for business owners. We take on so much risk. And I, I love actually the perspective of your client who was going through the leukemia treatment where he was like, I, you know, there's so much in my mind that I have to worry about, like us in, in business and risk and economic crisis and interest rates and everything. But the one thing that's taken care of should something happen to us in our ability to continue to manage all of that risk. If something happens to us, my family's.

Taken care of thousand percent. And, and, and this goes for actually both of us that, that people have said to us before. It's about knowing that someone can pick up the phone and get a hold of Bob, someone can pick up the phone and get a hold of Dan and have those conversations because they need someone at that time. They have lots of questions. Sometimes spouses are very much not involved, not, not naming our spouses or anything like that, because I'm sure they're listening to this call.

They're so supportive. I guarantee both of our spouses are not listening to this, nor involved in their financial plans.

But either way, it's about knowing that they can pick up the phone and they can call that trusted person to have those conversations. And they're going to need some clarity. And it's about making sure. Am I comfortable in my conversation if something happens to you with Jen? Am I comfortable knowing that I did the right thing for you? And just like if Amy has to call Bob and ask questions about our, our books and our year ends and the corporations, is she going to be comfortable talking to Bob and what he set up for us? So it's, it's a bit of selfish liability on our end to make sure people are set up the right way because there could be times in our lives we have to deal with a grieving spouse or a grieving child. And I want to make sure that we did our best job possible.

Yeah, absolutely. Guys, there's so much in here that I want you to, to take away. And I'm hopeful Dan will continue to come back and join me always. But I do want to talk like there, you've, you've brought up some ideas of some creative sort of policies. And I know just recently we were approached with maybe an opportunity with a, a, a charitable organization to make a fairly substantial contribution to them. And normally that wouldn't necessarily be something based on where I'm at in my life and in my business right now to consider, but it was a very interesting opportunity. And I got to tell you, the first person I called to say, hey, are there any creative ways that we could come up with a plan to financially get people what they want and also do it in a fairly economic way? You know, and I reached out to Dan and he had a list of ideas and options to help support that sort of initiative. So, you know, whether it's insurance, whether it's investments. Again, having those conversations with those trusted financial planners and advisors is so important because then they can give you the insights. You know, otherwise I would have thought it was impossible. But Dan gave me a handful of reasons that may or may not work with the organization, with me, but the fact that I have options available to me is, is super important. Any last sort of thoughts, Dan, based on the fact that we're, you know, we're fall of 2023, when this is going to be coming out or close there to August, September, and we're in this sort of economic downturn, We've got a real estate market that's continuing to get a little bit hit. Prices are starting to drop. You know, businesses are having maybe more of a challenge getting to consumers. People are buying less. That's sort of setting the context for our challenging market. What are things that people should be doing right now from a financial planning perspective to make sure that they're putting themselves in a good position?

Yeah, and, and you know, it's a very simple answer. It's discussions. Have discussions with your advisors. You know, if you're going through periods in your business or periods in your life where there's uncertainty, life events, changes, concerns, have those conversations. Because, you know, we can sit back and, and we can put plans in place, but we're probably not going to talk every day, probably not going to talk every week or every month. But if things are coming up that we need to adjust, we can and will. And it's about continually having those discussions. There are clients that we meet with every couple years. There are clients we meet with every couple quarters. And it's about having those conversations and making sure this very liquid plan, this moving document will change with you just because the, obviously the market uncertainty and a lot of what's going on out there concerns people. You have trusted advisors in your life that you can rely on, you can talk to, you can have those conversations with, you know, Bob, Bob is an accountant by trade, but he's learning all these, or has, has been told all these bits of information from his business owner clients because he cares and he's involved and he gets this and he knows and maybe him on his side, he's, he's seeing some of that economic fallout coming on his feet as well. So it's, it's, everybody's in this together and it's about making sure. How do we work on this as a team, how do we work on this going forward and nothing set in stone and how do we, how do we adjust for this. So I have people right now making very aggressive payments to their corporate investment accounts and their businesses are changing. Their businesses are having to pivot, they're having to do things differently. And it's about, okay, what do we need to adjust on our end? Because we are part of that. We're a part of that change. You know, if you're having to change things in your business, well, we can be part of that. We can be part of that business. And again, personalize, customize. We go through it all. And just because you've got a plan in place doesn't mean we can't change it. And if you don't have a plan in place, probably more so now than ever as we go through this uncertainty, hopefully a very shallow recession, that people do take the chance to get a plan in place and start some of the things that could be better off. And the one thing I, I talked about someone earlier this week, no matter how you think you have things wrapped up, no matter how well you think you have things planned, there's always someone that can influence something and say something to better off yourself. So the more conversations you have with your advisors, your tax accountants, your lawyer, your mortgage brokers, all these people will give you, if you're dealing with the right people, will give you the idea that you're in a good spot or do this adjustment and you'll be okay. And that's where we come in, is your trusted professionals and how we make sure you're set up properly.

Guys, Dan Maloney, financial advisor, my personal financial advisor. Thank you. First off, thank you for all of your wisdom. A few takeaways. Start early, right? The earlier you start, the less you have to consistently put away to get to your goals. Insurance provides protection and certainty for your family should you not be able to do what it is that you know you're going to be able to accomplish on your journey. And if you, if something were to happen to you, insurance will help achieve that goal even without you there to put your family in a position where you want them to be that's financially secure. Dan Maloney, how do people get ahold of you if they want to reach out to you?

Yeah, call, text or email, we've got, I'm sure Bob will pass along our details here after all this is done. But yeah, just reach out and we'll have a conversation, book a time, whether it's in person or virtual, where get either way. And it's about having those conversations and just getting pen to paper and seeing what that looks like and what we can do to help.

Guys, Dan Maloney's contact info will be around this podcast, above, below, wherever it is, depending on the platform. We'll make sure that you have access to that. Dan, my friend, thank you. One more time, guys. This has been the Wealthy Entrepreneur podcast. Super excited to have you here. If you liked this episode, make sure you give a. Like, throw a comment in there. Even if you're thinking that there's more financial planning topics that you would like to hear from us about, make sure you drop that in the comments. We will make sure that we bring Dan back. Dan is always one of my. One of my very dear friends. Always a very engaging presenter. Make sure you're following us. Share this out. If you have somebody that you feel could benefit from some of the information in here, share this out. We want to make sure that we're impacting as many people as we possibly can as we help them achieve financial freedom. Thanks, guys, and we'll catch you next time.