EP88: Interview With CFP Mark Willis

Well, sure. And there's certainly a case to be made for needing someone. on multiple different tracks, different expertise. I certainly wouldn't want to try to do my own plumbing. So we can help each other out in many ways. But I think the power of the successful life is built around the mastermind, bringing in great people who are all on the same team to help see each other succeed. And that's one of the beautiful things about podcasting, to be quite candid with you. Here we are. We're having a conversation together in front of friends that are all wanting to be a better version of themselves. I think that's just a great way to spend my day, my morning. So yeah, I've had the great privilege of working with clients who are business owners, real estate investors, contractors, even NFL Super Bowl champions. But most people I work with are just wanting some more control and precision and an assurance that they're going to be able to meet their financial objectives. We spend a lot of time in our lives chasing the thing called money. We might as well have some assurance that what we're working toward is actually going to pan out. And this year, especially as we're coming to the end of 2022, as we're recording this, there's been a lot of uncertainty in the markets. Markets are down 25,30 plus percent. There's inflation that's higher than any time in our conscious lifetimes, as far as you and I might be. And then there's obviously the prospect of a softening real estate market, labor market. So there's a lot that we are seeing happen. And I feel like most of the clients I work with, when they first meet with me, they say things like, well, Mark, I just feel like a tennis ball floating down the gutter of life and I have no control or agency. And what they want is more control, agency, and a sense that they've got something that they can do to better their financial circumstance, not just for themselves or their business. but for their legacy as well.

Yeah, I think where we put our money makes it act differently. That's an obvious sentence, but it's such a true and difficult thing to really master because most of us don't really know what we want our money to do for us. And the other problem is that many other people know exactly what they want our money to do for them. So those are two headwinds coming right at us. We don't know what we want our money doing for us, and everybody else has a financial plan for our money. That is devastating. When you're trying to pull yourself up by your own bootstraps, when you're trying to run a contractor shop that's just trying to make it and feed your family and hopefully meet your financial goals, and money is the last thing you want to manage after you've worked all day and worked all week, the key questions that really come up. And most of my conversations with clients is, Mark, you know, I want my money to work for me, not for some banker, not for some Wall Street guy or gal, not for the government, certainly. And so having that conversation helps people feel like, hey, yeah, I can actually take a bit more control. That's the word that keeps coming up. And, you know, I think many people see a picture of what they want in their future. When you're a contractor, you know what you want your end goal to look like. But when you've got... People pulling your money in multiple different directions, whether it's the stock market, crypto, traditional 401k or IRA. When I started my business, I didn't get handed any of that stuff. It wasn't like it just fell out of the sky. You have to start thinking for yourself, which is what really encourages me to work with so many business owners, is that many times we business owners, entrepreneurs, weren't just handed our 401ks or whatever. We had to go think about what do we want our lives to look like. financial life to look like. And honestly, it creates much better solutions when we take back control of our finances from the Wall Street gurus to do it ourselves. Not to be our own investor, not to be less necessarily like a PhD in finance. I don't think you need to be your own personal money guru, but you definitely don't have to rely on some stranger who might just as well retire off your back before you can retire for yourself.

Yeah, trust is something I think that no matter what letters are after a guy or gal's name, CFP or whatever, whatever licenses or designations they have, you want trust. It's the same as true when you're building your house or you're talking to the architect or talking to the guy who's going to build out your bathroom or run over your kitchen. You need trust there first and foremost. And the design and engineering comes second to that. And so, yeah, we have long, ongoing conversations with folks where I really do much more listening than I'm doing on this show today. I have to listen carefully before I make any recommendations or make any judgments as to what's in someone's best interest. And so we'll have that one-on-one advisory conversation where we really listen to what their concerns are, what their goals are. And at the end of the day, if I cannot be a good help... or a good fit for someone, I have to be upfront and honest with them about that. As a CFP, I have to do that, but I also just happen to think it's the right thing to do. If we have a relationship of trust and openness, man, the sky's the limit. If you've got a good team around you, you can go far.

It doesn't do them any good to keep trying to drag them around, and it doesn't do your business any good if you're not a good fit to work with them. I actually heard someone once say, Mark, the people who are not your clients are just as important as the people who are your clients. Oh, yeah. That was a light bulb moment for me. Probably true with anybody's work.

There you go, man.

Well, that's a good question. It's sort of like, when does the fog start? Are we in the fog? Well, it sort of feels like it. The trouble I think most people have is that with regards to money, It's almost as if we walk into a movie theater like 45 minutes into the movie where you're not sure what's going on. Why is that guy yelling at that person? Why did that guy punch that other dude? Who's this villain character? What's going on here? We just don't know who the characters are, what they're doing, why they're making these moves. I feel like many times we're born into this world called money. And we don't know what's going on. We don't know who the players are. We don't know our own role in the financial realities. And it can often lead to disastrous results coming from just a sense of, I don't know if ignorance is the right word, because it's not. It's just, hey, we were born into the middle of the story. And we don't know exactly what we're supposed to do with this money we were handed. Let's say you were handed a bank account as a kid. Maybe you got a couple of credit cards in college. Maybe you got loaded up like I did with student loan debt. Maybe you heard somebody tell you that crypto was a good idea or that you should get a Roth IRA. And you start collecting all this stuff in your backpack, and you're just sort of lugging it all around with you on the journey. But it's weighing you down, and you're not sure exactly what you want to do with it. It's a lot like, you know, this is sort of a reprobate analogy, but imagine you got for yourself a handful of pebbles in your hand. Let's say it weighs exactly one pound, handful of pebbles weighing a pound. And let's say you're a true degenerate teenage kid and you just want to break a window at the factory downtown. So you take that one pound pebble mashup and you throw it at the window as hard as you can. If it's just a bunch of small little pebbles and you throw it as hard as you can at that window, is it going to break that window? Probably not, right? It's the diffuse effort that just sort of falls down. But if you had exactly one rock weighing exactly one pound and you launch that one rock at that window, it's going to, through sheer focus and force, it's going to shatter the glass and get you through to the other side. So I feel like many people, recession or not, can break through that glass, right? If you've got focus, if you've put your money into things that you can understand and control and have access to. If you're doing what you know you need to be doing, this is where diversification, I think, fails us. That big word. It's like that quote from the Princess Bride, you know, that quote where he says, you keep using that word. I do not think it means what you think it means. It's a pretty good impression, right? So the word diversification, most of the time people think, well, put your money into a couple of mutual funds, a couple of stocks, a couple of bonds, you'll be fine. And that's like saying, hey, you got all these eggs, let's put them in 12 different baskets and you'll be fine. But what most people don't realize is all of our eggs and all of our baskets are on exactly one truck. And that truck is about to go off a cliff. Whether we're in a recession or not, one of these days, that truck will go off that edge of that cliff. And the question is, what good did all those diversification moves do for you if all your eggs were on the same truck? So diversification does not mean what you think it means. The real way to diversify is to put your money on multiple trucks. And these are the fancy word here is non-correlated assets. So where can we put money where it has nothing to do with the stock market or the bond market? Because both of those, by the way, this year are down. Even bonds, people are losing money in bonds, hand over fist this year. Inflation is up, markets are down. And I don't know, but I can only foresee the labor market turning over, the real estate market turning over. We've seen a 90% reduction in refinances,90% reduction. and refinances you think that's going to impact the contractor market

yeah recession if we're not already in it the fog is coming yeah what are we going to do to prepare for it let's get some eggs on some different trucks so

Yeah, that's a non-correlated asset most of the time, although this time around, it appears that the Federal Reserve is absolutely hell-bent on pushing us over the edge with both the stocks, bonds, real estate. We've also seen in the pandemic the government's willingness to force us to stop collecting rent if we're a landlord during rent moratoriums. Now, that's an unprecedented move right there. So where can we hide, right? Savings accounts aren't really keeping up with inflation. Neither are CDs even these days, even so. So there's only a few places that I'm familiar with that lets me do what I want to do with my money. One of them that I stumbled across years ago is a modernized form of whole life insurance, of all things. Now, as a CFP, I'd be like, well, what's so cool about whole life insurance? Isn't that sort of what you'd leave your family someday when you croak? Well, as I come to find out, whole life insurance is different than term life insurance. Term insurance is what most of us probably know about, where you rent it for a little while and hope you never need it. If you croak, you leave it to your family, but you're not building up any wealth. It's like renting an apartment. As you get older, term insurance gets more expensive, and it's not building up any equity. That's term insurance. Whole life insurance, the modernized form, we call it bank-on-yourself type whole life insurance, if it's designed properly, can be really a nice way to put some money on some other trucks to protect yourself from market madness like we're going through right now. So I can explain a little bit about what that is, but that's been one tool that we found to be very helpful for our clients.

I can break it down probably in three, four minutes to at least give folks the high level. And it's definitely something I think more people should be aware of, even if it's not a good fit for them. I'll break it down as fast as I can. It's an asset on your balance sheet, just like a savings account or brokerage account. The cash value is your money. And that cash value, if it's designed properly, now there's a lot of ways you can mess this up. And there's a lot of people on YouTube talking about infinite this and family banking that. And I would say the only qualified, you know, it's just like. an engineer, right? If you want to get into an elevator and feel comfortable to push that button, you want to make sure that that service technician knew what he was doing or she was doing when she designed and serviced that elevator. Same is true with these policies. So how is it designed when it's designed well? What does it do? One, it has a cash value that grows every single year, no matter what the stock market's doing on a guaranteed basis. That's awesome. Second, it has a long track record of paying dividends above and beyond that guarantee. For over 100 years, many of these insurance companies that offer this have gone right through multiple recessions, depressions, pandemics, multiple pandemics, Brad. So that's the second. The third, you can access the cash in this thing. It's not locking the money up like it would in an IRA, for example. You can get the money, use it any way you want, send your kid to college, buy yourself a car, business investment, get some equipment for your business. Whatever you might need the money for, it's there for you. It's a liquid line of credit for you. Third, it is life insurance, so we're solving that problem. If you have a family or other needs, should you pass? And then lastly, we can actually use the policy like a bank to borrow against the policy. And the policy itself will continue to grow even on the capital you borrow. So to say this a slightly different way, I know our time is short. When I have, let's say I've got 50 grand in one of these policies and I borrow out 40 grand to invest in my business, buy some equipment, get a new truck, whatever I want to do. That year, my policy will continue to give me a compound internal growth of the entire amount of money, the full $50,000, even though I'd borrowed 40 out to go buy my truck or whatever I did with the money. So this is a way to get your money doing two things at once. As an independent contractor, as a business owner. I can't think of any better way to make major purchases than to run it through one of those policies. And that has nothing to do with the stock market. So it's eggs on different trucks there. I didn't have to be a numbers whiz or an investment guru. I just knew, hey, plug my money in here and it's going to work. Contractually guaranteed.

Yeah, I hear you there.

It does not compute. I mean, we're taught from an early age that we just have to sit down and take what they give us, you know, hand out 401ks or hand out the social security and just be happy with our lot in life. But no, it's been a legal product and a financial vehicle for hundreds of years in this country. Many business owners have used their whole life policies to help start the business or grow it.

Well, I was definitely a Dave Ramsey disciple for many years, and I took his word like gospel, like he had just brought it down from Mount Sinai. It was just everything, hung on every word he said until someone came along and said, hey, Mark, is it possible? Is it possible that Dave Ramsey might be wrong about something? I almost didn't know how to respond to that. Never really thought critically about what he was saying. Just took it at face value. He's got a lot of good things to say. Got a lot to be thankful for, for his getting me on track with my wife and I on our budget. But he's dead wrong on this kind of whole life insurance. He's right about the old-fashioned stuff. But this new form, this modernized form, it's been around decades, longer than he's been on the air. So I don't know why he hasn't talked about it. Well, I have a few reasons. that I can imagine, including some of his sponsors, but that's all right. I get it. He's got a big show to run. And the main thing I'd say is look into it for yourself, think critically, and don't let somebody else tell you what to do with your money. Again, don't let anybody else have a financial plan for your money. You should be the one in charge of your own financial ship.

It's a book called Perpetual Wealth, How to Use Family Financing to Build Prosperity and Leave a Legacy for Generations by Kim Butler. Great book using the same concept we've been just talking about. And then right behind me is a book called Bank on Yourself Revolution by Pamela Yellen. New York Times bestselling book talking about this exact topic.

You know, I'd be honored to meet, sit down and chat. We'd be, we've worked with folks all over the country. And having a 15-minute strategy session, maybe to answer some of your questions about how this tool might work or how any of the other services we offer through our firm, Lake Growth, might work, go to kickstartwithmark. com. That's the website to go to. It's kickstartwithmark. com. And be happy to sit down and answer your questions and discuss maybe if it's a good fit for us to work together.