(Ep. 44) Building Personalized Financial Plans That Speak to Your Values with Adam Dell

Welcome to the Ideas by Mike podcast with your host, Mike Milligan. I am excited today to introduce our audience to Adam Dale. Adam is a serial entrepreneur. Matter of fact, there's legends of him when he worked as a partner at Goldman Sachs, taking a hoverboard down the actual halls of Goldman. But he's also an innovator from OpenTable to Clarity Money to starting Marcus, the high-yield savings program at Goldman Sachs to now Being the founder of Domain Money. We're gonna dive into some key topics around financial planning with, uh, Adam. So that's next on the Ideas by Mike podcast. Welcome back to the Ideas by Mike podcast. I'm your host, uh, Mike Milligan. We're, uh, it's a pleasure. to have Adam Dell on the podcast today. He's the founder of Domain Money, among many other entrepreneurial adventures he's had over his lifetime. We're going to talk about some of those today. But Adam, first of all, I want to welcome you to the Ideas by Mike Show.

Thanks for having me.

Great to be here. Absolutely. Adam, let's start where we are today. Let's start with Domain Money and talk about what your vision was for creating Domain And then maybe how it's even morphed a little bit over the last couple years. So, let's start with Domain.

Sure. You know, Domain is a wealth management solution designed to serve the mass affluent segment that is traditionally poorly served or ignored by the traditional RIA sector. There are about 20 million people out there who are high earners but have not yet accumulated enough assets to be of interest to a traditional wealth advisor. And what are those people to do? There's obviously a litany of do-it-yourself tools out there, but there's a lot of folks who want bespoke human-led wealth management advice, and Domain is designed to provide that solution to that segment of the market.

So, but most people, when they hear the word wealth management, the first thing they think about is AUM model. Um, and but Domain is not AUM, it's more of a flat fee model. Why, why flat fee? Because I mean, we all know that a flat fee model may not be as profitable as an AUM model, but why, why a flat fee model?

Yeah, there's a generation of, of people out there who have grown up in an Uber, Amazon, Expedia world who are used to the idea of choice, transparency, and clarity about what they're getting, right? And so we believe that the flat fee model is part of the future of wealth management, particularly among the segment that we're targeting, which is again the mass affluent segment and below. You know, if you've got $5 or $10 million and you want really complicated asset allocation strategies, and you're looking for access to alternative investments, the AUM model might be right for you. But if you're someone who has, you know, half a million dollars of investable assets, quarter million dollars of investable assets, that 1% AUM fee really can be oppressive, particularly as it compounds over the course of And so, we think the flat fee model is very attractive to a large segment of the market, and that's why we pursued that approach.

Adam, there's probably not a door or an office in Manhattan or really anywhere in the country that you couldn't get into to talk about money, right? Because of your background as an entrepreneur and building companies. But one of the most interesting things about Domain is that you didn't even say in your answer there is there's this massive trend. Transfer of wealth that is coming over the next 7, 10, 15, 20 years. And that first transfer is going to go from husband to wife, and wife has different sets of values than husband has had. And then it's going to go from wife to kids or the next generation. The domain is not only about doing financial planning, it's also about educating too, right? Because it's a relationship model, if I'm not mistaken. So, talk about that relationship model and how it can prepare the next generation For this great inheritance transfer that's coming?

Yeah, you make a great point, Mike, that, that great wealth transfer is certainly coming. You know, my prior company, Clarity Money, was an app that competed with Mint. It was designed to help people manage their cash flow, expenses, bills, credit score, credit, savings, investing, all the things that are sort of related to cash flow. And one of the things that I learned through that experience is that it's one thing to give somebody generic advice. It's a very different thing to give somebody contextual advice specific to their life and their situation, and then to give them control and power to make choices by pressing a button. And we focus a lot on, to your point, education in the context of a person's specific situation. Let me explain what I mean by that. We really try to distill down a person's values and goals in our planning process and present them with options that are, again, contextual to their life rather than just generic. And so a good example is an emergency fund. There are a lot of people who have cash sitting in their savings account And the amount of cash that you should have there is really a function of your risk profile and what's comfortable for you around how much buffer you need should you have some perturbation in your income or some interruption in your income source. And so we believe that creating a relationship with the client, to your point, that is ongoing and understanding the client's specific values is a really important part of educating them in the context of decisions they make. And so that's very much part of the ethos that we employ at Domain Money.

Sounds a lot like a one-of-a-kind financial plan, to be honest, which is—

We do not generate generic boilerplate financial plans. Our plans really speak to the core values and goals of clients, whether it's the new home, whether it's the second home, whether it's retiring early, whether it's not worrying about money, we really focus on what is important to the client. And it's not just lip service. The whole plan that we generate orients itself around the goals and values the client has told us they care about. We don't use eMoney, MoneyGuidePro, or RightCapital, which are the dominant financial planning solutions out there. We've built our own financial planning solution that, again, speaks to the Real values and goals of the client.

I want to come back to that and talk about the end product for the client as far as the interactions they come. But you mentioned something in that answer and you talked about building an emergency fund with a high-yield savings account. Guys, one of the things that Adam is famously known for is he built the product Marcus that Goldman Sachs uses as a high-yield savings account. And so this is an authority figure on high-yield savings accounts when he's talking about it. I always say, Adam, like the Warren Buffett of high-yield savings account investors right now are getting 4%, like the best, like in the current market. But we also hear the numbers that there's $10 trillion sitting in banks. What is the avenue to make people feel comfortable to relinquish some cash? That should be growing wealth, not feeding, in my terminology, not feeding the profits of Wall Street because they're leveraging that.

Yeah. Well, so 2 distinct points to be made here. One is that the vast preponderance of that cash that's sitting in deposit accounts is not earning a high yield. And so, if you are sitting on an emergency fund or a cash account at your bank that's not yielding in the 4% range, you're really eating away at your future potential because of the impact of inflation over time. Your cash needs to be earning a meaningful yield, and certainly a high-yield savings account from a place like Marcus by Goldman Sachs or other firms like Ally are great places to put that cash. So, being mindful of where that cash lives and the yield it's generating is really critical.

So, let's go back. That's a great response. It's what we talk about with clients all the time because people tend to go too conservative too fast in their life. They start seeing the numbers get bigger in their portfolio and one of the biggest opportunities lost in life and building wealth is Not staying invested over the long term. And it's, uh, and I mean, I see it all the time because especially in first-generation wealthy folks, they, uh, they, they took the risk to get there, whether it's in their business or in their portfolio. And then when they get to a point or they get to a perceived number that they think they've made it, all of a sudden they go ultra-conservative. And that's not like the heart of what a real financial plan is. A real financial plan is there to continue building wealth because the only way to keep up with real inflation is to build wealth. Which that gets back to the relationship side and the technology piece of Domain. You're bringing, I mean, you're not a financial planner. You're not, I mean, you're in by the, at the heart of it, you have done financial planning for yourself and your family, but you don't have like FINRA license and SEC license and all that. What, what is— so you partnering and building Domain is more about the tech piece and giving your team opportunities to build. But talk about that tech piece, because this is the part that people really don't get about how you talked about eMoney. You talked about a lot of other programs that financial advisors use, but talk about the customness that is built into, uh, Domain's platform.

Yeah, our financial planning solution is delivered digitally through our platform. And it's presented in a very straightforward manner. It's not 60 pages of charts and graphs and Sharpe ratios and Monte Carlo simulations. It is presented to the client, to the point I made earlier, in the context of the values that they care about. We want to buy a new home. We want to retire by 60. We don't want to worry about cash flow. So our plans live in the context of the client's values, and they're presented in a way that gives the client an actionable step to take to achieve that goal. So let's take, you know, purchasing a new home. We do a deep analysis of your expenses, your income, your liabilities, How much is reasonable to contribute to a down payment toward a home? What is a reasonable monthly payment taking into account insurance and other ancillary expenses associated with homeownership, including taxes, right? Property taxes. And we give people a realistic number that is achievable for both a down payment and then a monthly payment. payment to cover, recognizing that a bank will probably lend you more than you can afford to pay. Right. And so we, we try to craft home affordability again in the context of a person's real life. Hey, we want to take a vacation every year. Hey, Grandma has some medical expenses that we need to cover. Hey, our son has some special needs and needs some extra care after school. All of those things are essential to understand around something as ongoing as home affordability because of the monthly payments associated with your mortgage, insurance, taxes, all those things, maintenance, etc.

So we're—

And so we try to present those concepts in context and give people the ability to track their progress toward their goal. So if the first step in that home affordability goal is to save enough for a down payment, we give you that number. We give you basically a tracker to see the progress you've made toward that goal. And that presence of mind, being able to pull up your dashboard, see all of your accounts in one place, see how you're spending each month, see how much you have excess to contribute to that home affordability goal, that's a real accountability. resource rather than just, hey, let me call up my financial advisor and talk to them. What is financial planning at its core? It's really discipline in action, right? It is the application of sticking to a goal and sticking to a set of behaviors that allow you to achieve that goal and monitoring your progress toward it. Much like dieting or exercise, it requires ongoing ongoing attention. And so our plans are designed to be interactive and help you track your progress toward those goals rather than being static one-time events that, you know, you're delivered this written document and you go off and your job is to figure out how to achieve it. We view our job as one of a relationship with the client to help them stay on track, And coach them along the way to achieve those milestones to ultimately get to their end goal.

Amazing. That's financial planning being a discipline, right? To get you to your goals is an absolutely amazing concept. We're kind of on this cusp of, as we're looking down into 2026, we're on this cusp of like in the financial advisory, financial planning world of like who really brings value to the relationship? That question is being asked more and more and more because Over the last 25, really 30 years when assets under management's exploded, the real value has been the client's assets. And then the fee has been like, you know, we'll diversify you, we'll add some bonds to provide some safety. But the investment management has been like, has not provided as much real value as like what you're talking about. I want to talk about one area in particular where The AUM or financial advisory world has gotten it wrong, and that's tax planning. But it's one of the most neglected, uh, talked about items. And people are feeling that now because with people turning 65, more and more people turning 65 every day, they're starting to hear these terms like RMDs and Roth conversions. And, and they're starting to see, wait a minute, my tax rate's actually not going down in retirement. So, can you talk about how tax planning plays a role with Domain and how the financial planning team there addresses tax planning? Because there is an option to have your tax return done with Domain, but doing your tax return and doing tax planning are 2 totally separate things. So, talk to that. Talk about that a little bit.

Yeah. You make a great point. A well-articulated and executed investment strategy must take into account the tax implications. They are essentially integral to a well-constructed investment plan. And so at Domain Money, what we provide is both financial planning, tax planning, and tax filing as an integrated service to ensure that there is that tight alignment. If you are not taking full advantage of all the tax-advantaged accounts available to you, you're really leaving a ton of money on the table. Not just your 401, but an HSA, a Roth conversion, all of the things that are available to people to take advantage of. Those opportunities compounded over the course of a lifetime are massive. And it is the difference between financial independence and not having financial independence. And so, we take tax strategy and tax planning as an essential pillar to our investment strategy and our financial planning strategy, whether it's direct indexing, tax loss harvesting, or as I mentioned, taking advantage of all the tax-advantaged accounts available to an individual or a couple.

And it goes deeper, like for entrepreneurs, like if you guys have ever listened to the podcast before, you know, We've talked about the Savannah rule. We've talked about Section 179. We talked about bonus depreciation. There's so many things that are lost along the way. You mentioned HSAs, right? We are huge advocates for people to, um, first contribute all the way up to the match, then max your HSA next, then come back to your 401 if you've got the ability to do that, because that HSA is that thing that has Triple tax advantages, pre-tax going in, tax-deferred growth, tax-free coming out. And many people forget that. And it's, and it can be invested in the S&P 500 or any investment long-term. And the great thing is if you keep the, you keep those receipts, right, over the years, if you don't take the money out and keep the receipts, oh my gosh, you got this tax-free pile of money sitting there that can be used to buy that vacation home in retirement. It can just do so much for you. It can leverage your child's business. You know, you can do so much with that. And so, I'm glad to hear that Domain is taking a stance that tax planning should be part of the whole financial planning. I'm going to go to the other side of it, though, because tax planning being the biggest expense, the biggest wealth drain is long-term care, end-of-life expenses. How does the financial planning kind of address that? Because we're not talking about long-term care insurance, we're talking about real planning here. Yep.

So elder care is a major component to what we do. Now, if you're 32 and you don't have aging parents or you have parents who have, you know, provided for their elder care themselves, it's less of a consideration. But if you're 55 and you have elderly parents who have not, you've got a potentially meaningful obligation on your hands to help take care of your parents, not the least of which you then have to deal with your own elder care. And so, that is a major expense long-term in a person's life. And there's a lot of things that people don't get right. One of the things that I'm deeply interested in is behavioral economics. Dan Ariely, Kahneman and Thaler, who are really leaders in behavioral economics, I've really tapped into those networks of thinking. And people are essentially irrational about their money. They wildly overestimate their chances of success and they radically discount the odds that they will fail or that they'll have some major life event that will set them back. Nobody wakes up and says, one day I'm gonna break my leg and I'm gonna be out for 6 weeks. I'm not gonna be able to earn, or I'm not gonna be able to, you know. And so there's just an inherent optimistic view that people have about their future, which is a good thing. But at the same time, it's not always taking into account the realities of what their life will look like. And Invariably, we're all going to get old, we're all going to get sick, and we're all going to die. As uncomfortable as that is to acknowledge and plan for, we should. And so our financial plans, to my points earlier, really address, okay, well, what are the needs of this individual or this family, given the dynamics of their parents and given the dynamics of their retirement and given their health? and their likelihood for the need for, you know, an additional level of elder care beyond what their health insurance would provide. And we do a deep dive into that. So we look at disability insurance, we look at, you know, overall coverage provided by your general provider and determine whether or not you need additional coverage to offset those future expenses that are likely to come. And if you plan right, you can really provide for elder care by contributing a little bit of money early on to essentially give yourself a nest egg to give you that elder care that you're gonna need later in life. And that level of planning, especially if done early, is massively alleviating to the overwhelming costs of elder care when they sort of balloon upon you as you get older in life.

I'm fascinated that you said you're really diving into behavioral economics a lot because there's one thing that I see time and time again is people will go out and they'll buy, like go on Black Friday and they'll buy a TV that's discounted 30%, or they'll buy last year's model car when there's some incentive to do so. But boy, when the stock market goes down, their first inclination is to sell. It's not to add to it. And the people that I see constantly taking advantage, buying when there's fear in the market, like Warren Buffett says, the people I see taking advantage of that, people who have a plan, they actually have things in place. And I see the opposite for reaction, that people are trying to use a piecemeal effect. They've maybe got this guy at the bank who's doing a little bit, this guy over at the You know, down the street who work with their parents doing some, they got some at this account they're trying to do themselves, and maybe they're dabbling over here in Bitcoin. Those people don't take advantage of when opportunity really repeats itself. I'd be interested to explore maybe another behavioral economic trend that you're kind of looking into. Are there any that, uh, that are intriguing you right now?

Well, I mean, emotions don't make skilled workers, right? And people who react to market fluctuations emotionally don't do well in the market. Now, it's very difficult to look at your retirement account and see it drop by 10%, 12%, 15%, and think, okay, everything's going to be all right here. I need to stay the course. But in fact, that's exactly what you need to do. Because trying to time the market is a surefire way not to get optimal results. The best thing you can do is time in the market, right? Because over the long period of time, over a long period of time, you know, fluctuations will smooth themselves out and the general trajectory of the US economy, particularly across the S&P or other large indexes, is overall growth. And that has historically been shown to be true over many, many, many decades. And so, you know, whether it's Warren Buffett or Mark Cuban or any well-respected financial thought leader you can find, they will all tell you for the average investor, you know, broad-based market exposure, low-cost ETFs, and time in the market is the best strategy coupled with Taking full advantage of your tax-advantaged accounts. That is a recipe for success. Trying to jump in and out of the market, or to your point, Mike, having a piecemeal approach of, well, I'm going to do some crypto over here, I'm going to do some stocks over here, I'm going to do some bonds over here. That is not a good recipe for success. A cohesive strategy, taking into account tax opportunities and having a long-term perspective rather than a short-term one. independent of the emotions you may feel on any given day based on what the market is doing is the way to go.

Adam, we're going to end with 3 quick questions and answers. So, when I ask these questions, I just wanted you to give like your initial thought in 30 to 90 seconds. What's the biggest mistake you see high earners making right now? as they look 12 months out into next year?

High earners don't put enough away. They have good lifestyles. They are earning good income. They expect that trend to continue. And so, they're living within their means, but they're not thinking long-term enough. And so they're not socking away enough consistently. That's a significant mistake we see a lot of high earners make.

Okay. We're now getting toward the end of football season and what we're seeing now is like in the Kansas City Chiefs, I don't know if you're a football fan, but like what we're seeing is like people have caught onto the Kansas City Chiefs a little bit, right? They've caught onto like Patrick Mahomes and their playbook. But in the financial space, we also have a playbook. Such as like the 60/40 rule, the 4% safe withdrawal rule, right? Rules around life insurance. For the entrepreneur or executive building wealth, is the playbook broken?

Well, the playbook is a guideline. And depending on the dynamics of the play on the field, you need to adjust, right? There's not a one-size-fits-all rule that I think you can apply across the board. These guidelines are helpful, 60/40, or taking your income and spending half of it on what you need and 30% on what you want and 20% on your savings. Those are good guidelines. But of course, when you're in the arena itself, And in a given month, you have a major medical expense or you have a change in job or you decide that one of you in the couple wants to take time off to focus more on the kids. Those dynamics require careful consideration. And I don't believe that there is one size fits all. I believe that people have individualized experiences and their best approach is to work with someone to figure out what plan and playbook will work for them and their life. Because for many, they like the idea of, well, I'd like to retire at 55 from my current job, but I still want to work and I'm going to earn a little less income, but I'm going to do something more meaningful in my community or something that's more enriching to me and I'm going to take a pay cut, but it's going to be because, you know, it's going to improve the quality of my life. That is exactly the kind of nuance that playbooks don't do well with, right? Because they don't take into account the individual preferences of a person. I know that was longer than 90 seconds, but that's my answer.

It was good. So I got a 2A to that. When Adam Dale decides that building business is not what he wants to do, what's he going to do in retirement?

Well, you know, I've had a very fun career. I'm very thankful for the opportunities I've had as an entrepreneur. And you might not know this, Mike, but I spent quite a bit of my career teaching. I taught at the business school at Columbia for nearly 10 years, and I taught at the University of Texas Law School for 5, where I went to law school. And I plan to return to teaching when I'm done with Domain. I find it to be a very rewarding thing. You know, I've had an interesting career involved in a lot of different startups and have learned a few things along the way. And if I can impart some of the knowledge that I've been lucky enough to, you know, accumulate into the next generation of bright young minds, that's a privilege I'd really like to return to.

I actually didn't know that you were on college campuses teaching. And something you probably don't know about me is I'm an adjunct at Old Dominion University. I teach, uh, I teach principles and ethics of financial planning, and I do the capstone for graduating seniors who are looking to qualify to take the CFP exam. So that's, that's intriguing. I mean, no, no wonder, no wonder we're starting to like each other so much. We have this education slant. Guys, if you want to learn more about how you can, uh, if you want to learn more about the financial planning offerings through Domain, you can reach out to us at One Oak Financial. That's the number 1, oakfinancial.com. On the Contact Us page, just send your contact information and we will— one of our team members will be happy to connect you with one of the highly trained certified financial planners so that you can build that one-of-a-kind financial plan that's unique to you, that's meant to have a purpose-driven life or give you a purpose-driven life. Adam, thanks for coming on the Ideas by Mike podcast today. I appreciate you and I appreciate the partnership. Thanks, Mike.

Thanks for having me. I appreciate the time.

Thank you for joining us today on the Ideas by Mike podcast. This has been Mike Milligan, your host, where I look to bring real-world conversations with you of people changing the game in the financial planning, investment, and retirement income space. If you want to reach out to our firm to learn more, you can go to oneoakfinancial.com. That's the number one oak financial dot com. One Oak Financial is a nationwide firm here to help you build a one of a kind financial plan for your one of a kind life. CFP board owns the marks CFP certified financial planner and CFP in the United States. As a reminder, Mike Milligan certified financial planner is an investment advisor representative of Advisory Alpha. LLC, an SEC-registered investment advisory firm. All opinions expressed by me or our guests are solely our own opinions and do not reflect the opinions of Advisory Alpha. This recording is for informational purposes only. It should not be relied on for investment, tax, or legal decisions, and it's in no way intended to communicate or guarantee specific performance or suitability of any security interest. Instrument or product as we may have discussed. Investment advisory and financial planning services offered through Advisory Alpha LLC, a registered investment advisor. Insurance is offered through Ideas by Mike, a Virginia-based LLC here to serve you in all 50 states and the District of Columbia. Ideas by Mike is a separate and unaffiliated entity of Advisory Alpha LLC. While tax and legal issues may be discussed in the general course of financial and investment Planning Advisory Alpha does not provide tax or legal services. Please consult with your tax or legal professional prior to making decision relative to those decisions. Any and all statements of purported or observed general practices of non-affiliated firms and advisors or conditions of the broad financial services industry are solely the opinions of Mike and are not intended to be offered as factual. The validity of these statements has not been verified, and as such, no representation. of their validity are made. An annuity is a long-term financial product designed largely for asset accumulation and retirement needs. All guarantees are backed by the claims-paying ability of the issuing insurance company. This podcast is produced in conjunction with Mike Milligan, LLC. Thank you again for joining us today. We'll see you on the next podcast. Be one of a kind, take the flight. Mike's the guide, you shine bright.