EP. 143 More Knowledge, More Wealth: AM 590 Radio Show

Transcript:

Announcer:

This is More Knowledge, More Wealth, with your host, Gabriel Shahin. Gabriel is a certified financial planner and a registered investment advisor at Falcon Wealth Planning. This show is not intended to provide personalized investment advice through this broadcast and does not represent that the services or securities discussed, are suitable for any investor. Investors are advised not to rely on any information contained in the broadcast, in the process of making a full informed investment decision. More Knowledge, More Wealth, on AM 590 The Answer. Now here's your host, Gabriel Shahin.

Gabriel Shahin:

Good afternoon. This is Gabriel Shahin, certified financial planner and your host of More Knowledge, More Wealth, on every weekend, talking about all important topics of personal finance. Our goal is to give you the knowledge you need to increase your wealth. Note to the listener, you can always reach out to myself or any one of our colleagues here at Falcon Wealth Planning. Our phone number is 855-963-2526. That's 855-96-FALCON, like the bird. Or visit our website at falconwealthplanning.com. That's falconwp.com for short.

Now I'm a principal at Falcon Wealth Planning. We are a registered investment advisory firm. We are a fee only financial planning firm that also manages money as well. But we specialize in comprehensive planning, folks, that goes with where you are today, how retirement looks like, talking about taxes, insurance, investments, estate planning, folks, you name it, anything that involves a dollar sign, we help you with. And we are offering a free financial assessment where we can really help this show relate to your situation. Feel free to give us a call at any time. You don't have to wait, folks. I know you're busy. You might think you need more money. But this is the time where you need the help. The number one thing I hear from people is, "I wish I met you 10 years ago." I hear that all the time.

And so to help you achieve the goals, the wealth, where you don't feel embarrassed or whatever the case is, our goal is to help everyone. We want to help the aspiring become rich, not just the rich. We specialize. We have a lot that we help rich people with. More money, more problems, right? But still, we can help with that free financial assessment. Just give us a call. Our phone number is 855-963-2526. That's 855-96-FALCON, like the bird.

Now today, I wanted to go over just a few things with you guys. I wanted to talk about the markets, of course, I wanted to talk about types of firms that are out there. And then I did want to talk about just real estate, a lot of people having questions on real estate of what's going on. So really, the first thing I wanted to discuss with you is just really the type of firms that are out there, folks. And there are broker dealer firms out there that may say they're charging you a certain fee. They may tell you that the services that are offered are customized, but really, that broker dealer has limitations of the only thing that they can offer you is part of their service offering. They're not offering you everything in the investment universe because that's not always what pays them.

Some broker dealers won't do options. Some won't do futures. Some won't do for an exchange. Some won't do international investing into international companies. Some of them won't offer certain mutual funds that do not pay commissions that are called no loads. Some won't offer certain fund families in their holding. So certain firms out there, not every firm can do everything, and that's the issue with the broker dealer. Now your money would have to be held with a broker dealer. I mean, you don't want your money holding where the advisor is. Here at Falcon Wealth Planning, there's no Falcon bank. Right? Last person who did that was a buy named Bernie Madoff, who was the advisor and the bank, and that didn't work out too well. So your money does have to be at a TD Ameritrade, or Charles Schwab, or Fidelity, or whatnot, or Pershing.

So we know that your money has to be somewhere. That part makes sense. But you really got to see the type of firm that you're working with because those firms promise the world. Right? They promise certain returns that could be done. But returns, there are no secret with returns. All returns out there, it's going to get you between a 7% and 12% rate of return, and there's different volatility for each one, so the secret is not investing. Hell, you can just go to Vanguard and get for 0.3% if all you're looking for is investment management. Yeah, sure, they say they do planning, but they don't ask for any information from you, and then somehow magically say you have enough money to retire. So what real value are you getting out of that? And you could do that for 35 basis points. So the real value comes in how you could save money in other places. Let me give you an example.

Most firms out there will not advise on real estate unless they bill on it. Here at Falcon Wealth Planning, our goal is to increase your net worth. Isn't that what you should what in a financial advisor, a financial advisor, a financial planner, to help in your overall financial situation? Shouldn't that be priority? Shouldn't that be the most important concept that you do is increase your net worth? Sometimes it comes in tax savings. Sometimes that happens in real estate. That is not in your investment portfolio. And there are strategies available for that to also help in taxes and to choose the right investments. But our industry doesn't do that. What do they say? Please consult with a tax advisor and please talk to a real estate professional, which is logical to do. At the same time, the real estate professional only gets paid when you buy. They're commissioned based. So is it truly 100% unbiased?

So the point that I make to you is very few firms out there are fully, truly holistic, that look at everything that you have going on. It doesn't really exist that's out there, folks, so this is why it's important to get a holistic [inaudible 00:05:58]. And these financial advisors, financial planners, they should call themselves investment advisors, investment planners. That's what they should call themselves because they're only focusing on the investment piece.

By the way, folks, if you're just joining us, you're listening to Gabriel Shahin, certified financial planner and your host of More Knowledge, More Wealth here every weekend, talking about all important topics of personal finance. And we're talking about firms out there, and it doesn't matter who we are. We're not picking on these firms. These firms are okay firms, whether it's Merrill Lynch, Morgan Stanley, Edward Jones, Ameriprise, UBS, Wells Fargo, whatever the case is, I mean, these firms focus on investments and are limited to the offerings that they can get. A lot of these firms all make commission. Every one that I mentioned makes commissions in addition to fees. So couldn't there be a conflict of interest there? Can't we agree if there's a conflict of interest if they only get paid if you buy? And they're offering products as well, commission based products.

All I'm trying to say is we have conversations on a daily basis with people comparing us to other firms that we are blessed. We are blessed. We are blessed. Why are we blessed? Because we're always in the winning seat. When you're an independent registered investment advisor that's fee only, you're not making commission. Your fees are always cheaper, even on the high ... If you were to say on the front end, "What's your fee?" Oh, it's 1%, 2%, whatever it is. You're like, "Oh, that's high." But compared to what? You compare to commission based advisor, what their fees are, what their management fees are, with their fund fees are, and what the commissions are, it's not more expensive. It's ridiculously cheaper, and you're getting no advice or value from it. So know what you're getting before you say a Ferrari's expensive, drive the Ferrari. And when you find out the Ferrari is actually cheaper than Ford, you get what I'm saying. So it just depends, can't look at everything on the front end, you have to look under the engine as well. That is extremely important, but we don't see a lot of people doing that.

So sometimes we have to go through this whole explanation process and education process of understanding the true value and the true benefits that you should be receiving from your advisor and how to evaluate the true cost of an investment advisor. And you have to see what their initial costs are and what the fund costs are underneath it. You have to ask. And then you have to ask a question. Can you ever make commissions? Here's another way to ask it. Do you have your series seven? Do you have any series license, any? If the answer is yes, then you know they have a broker dealer affiliation, which means they're legally allowed to get commission. Here at Falcon Wealth, we're series seven license. Or excuse me, we are a CFP only. That's how you know you have live recordings going on right now.

We are CFP, no series license, no series seven at Falcon Wealth Planning because we're not a broker dealer. We're an independent registered investment advisor. We only have CFPs. We are only all certified financial planners, so we sell brain only advice. These are the things you should look at when getting an advisor and seeing the value that they're providing. If somebody can holistically give you advice, consulting advice, tax advice, on your business, on real estate, on your work stock option plans, or restricted stocks, or ISOs, or whatever it is that you have, this is value that's hard to quantify. How much more would you have saved getting professional advice 10 years ago? Where would you be today? Heck, if you get professional advice today, where would you be 10 years from now? These are the things that you have to look at.

Some people say, "I can't afford a professional." Well, try it as an amateur. You'll see expensive. We say that at our firm. It's expensive to hire all these certified financial planners. Well, try an amateur. See how expensive that is. You won't get any clients. Nobody wants to work with an amateur. So we pride ourselves in getting the most skilled workforce here. It's expensive. But the reality is, our industry averages for every one employee, they have 150 clients per employee, not advisor. Why? Because they're just meeting with you once or twice a year. That's it. Here at Falcon Wealth, we have a staff of over 30 and we average with clients over 1000, we average one employee per 30 clients, so the service side has to be much stronger, especially when you're doing in house everything, in house management, in house planning, in house tax, in house estate planning, in house everything. It's more costly to do so.

So my recommendation, guys, is to take advantage of this, or at least work with a firm that's fee only, that does more than just investment management. I mean, these firms are skilled to handle more than just managing money because, folks, the secret part, the easy part is with investment management is it's simple. It really is. The reason we do it and other people don't is they don't have the time to do it, they don't like to do it, and they know have the knowledge to do it. They don't have the bandwidth to do a rebalance. They don't have the software to do it. It's time consuming. It can take 30 minutes to a couple hours to do it, depending on how many accounts you have and if you're treating each account separately or treating all your portfolios one big pie chart. It can take time.

And so that's why people hire a professional. When I started to make over $20 an hour, I stopped changing the oil in my car, simple as that. I didn't mind it. It's just a screw, by the way, guys. But that's just how I thought. So my recommendation is get a free assessment. Number one, see if you see value. Number two, see if you could be helped, actually be helped. And number three, see the opportunities that you have in your situation. There's things you didn't know about, I assure you. We've never met anybody of the thousands, tens of thousands of people we have spoke to, we've never had someone that said, "I already knew all this." We've helped PhDs in accounting. We've helped people all across the board. We've never had anybody say that.

Give us a call. We can help, folks. We'd be happy to, and there's no cost. We'll give you one to two hours, one or two meetings of our time. Our phone number is 855-963-26=526. That's 855-96-FALCON, like the bird. I'd be happy to put a personal questionnaire for you to answer all the questions you have and to see what you can be taking advantage of. Folks, we're going to go on a quick break. We'll be right back. We have a lot more to talk about. We'll be back after a few words.

This is Gabriel Shahin, certified financial planner, your host of More Knowledge, More Wealth. That's on every weekend. We're going over all important topics of personal finance. We're going over retirement planning, making sure you're prepared for retirement, social security and strategies, real estate, taxes, avoiding them now and in the future, investments, reducing fees, commissions, and so on, insurance, and estate planning. Folks, we are offering a free financial assessment that you can take advantage of. We have offices all across Southern California, including the Inland Empire. Give us a call to take advantage. It's a $500 offer. Our phone number's 855-963-2526. That's 855-96-FALCON, like the bird. Or visit our website, falconwealthplanning.com. That's falconwp.com for short. Enjoy the show. We look forward to serving you.

AM 590, The Answer.

Welcome back, folks. This is Gabriel Shahin, certified financial planner and your host of More Knowledge, More Wealth on every weekend talking about all important topics of personal finance. Now we are talking about right now just in general, just finding value in people you're working with. Your doctor, if he doesn't prevent you from being sick, or being able to diagnose you with a problem that you may have, or be able to get you the proper medication to help relieve those infections or problems that you may be having, you're going to fire your doctor and get another doctor. Same thing with a lawyer, if they don't help get you out of trouble and keep you out of trouble, or at least help just make ensure that you're protected if issues were to arise, they can't do that, you're going to find somebody that does.

An accountant, if they can't properly input your information, they can't properly find new strategies that make sense to your evolving situation, then you've lost money over time by not doing that. And most accountants, you just meet with them once or twice a year. That's not a tax planner. That's a tax preparer. And it's the same thing with an advisor. And people freak out, advisors freak out right now because they don't know what they're doing when the market drops. Everything's dropping. They're hiding under their table. You're calling your advisor, hope you're getting that call back. It's making sure that you have a strategy for when the market drops, whether it's tax strategies, whether it's investment strategies, selling something else and buying something else, selling what's at fair market or arguably overpriced and buying what's under-priced. Most firms don't have that strategy. They don't know what they're doing. They don't understand because they sold you on the wholesaler that told them what to sell. That's what they did.

Hell, they don't even know how it works. They're just happy they got paid from it, and that's why you mostly don't see any pro-activeness in the account. And that's where you have to question the true value. That's where you have to think, "Can I do it myself?" More importantly, what value can I find somebody else? It's sad because as the good guys in this industry, sometimes you get people that have been tainted. They're like, "The last guy did such a bad job. I just can't trust anybody else. I can't just ... I paid fees for so long that I don't want to pay another percent management fee," or whatever it may be. And so then they don't, they disengage. And it's sad because they've been scorned to the positive interaction with us by negative experience that they had.

And so just always try to find the value and always have an open mind. We say that as a successful financial planning firm. We always have an open mind and try to question our process. And I recommend that for any business owner that's out there because if you're not always trying to be better, you can easily get passed up. So my comment to you is please always try to be better. That should be your main focus.

So if you need help, if you wanted to reach out, if you wanted to make sure you just understand who you're working with, who we are, and what we can offer, I'm just trying to say just be careful what's out there. We see people making mistakes all the time, not move forward, even when they see and know that there's money to be saved, they don't do it. We're just in a society right now that is just different than before. Logic doesn't always make sense. You see people actually even get upset more than other times before, more rapidly. This is just what's happening in today's day and age. But if you want help, [inaudible 00:16:36] can plan together that could save you money, hopefully that could find some opportunities for you, give us a call. Our phone number, 855-963-2526. That's 855-96-FALCON, like the bird. Or visit our website at falconwealthplanning.com. That's falconwp.com for short. I'd be happy to build a portfolio, build recommendations to help relate this show to your specific situation.

I did want to reach out to you on just some kind of information that's recently come out. CNBC kind of published this on May 25th. Really, it had to do with just where real estate market is right now because I know some people uncomfortable with the market. You can't afford not to do anything with your money, so you do have to do something with your money, so what to do. You can't buy gold. That doesn't pay dividends, doesn't do anything. I mean, that's underperforming inflation right now. I mean, gold is still sitting around 1800 an ounce, literally has done nothing, arguably, lost money because everything else has gone up in value. So what else is there? Bitcoin, well, that's down 50%. Nobody really knows what this is. It's unregulated. That could be an issue. I know some people are thinking it's going to be growing at 1000% return. I mean, yeah, talk to those people in more detail. They think we have to overthrow our government first for that to happen, number two.

And number three is invest in the stock market. Some of you don't know how to invest in it. You're too over-weighted in tech or large caps, and so you're seeing what's happening now. Your portfolios are down 15%, 20%, up to 30 plus percent, so that's not good. You need professional help for that. And some other people are saying real estate. That's why you should invest in real estate, because you can't lose air. Well, for someone who is a real estate investor, there are maintenance. There are things you have to pay for. There are vacancies. And it's one of the few investments, if it's not rented, you're still paying for insurance and property tax, and if you have a mortgage. So there is still associated costs with real estate. And it does go up and down, real estate. You can actually see that. There was a mild drop in 2018. Right now, you can see real estate slowing down.

And let me tell you why real estate is slowing down a little bit. By the way, before we do that, you're listening, for those of you just joining, this is Gabriel Shahin, certified financial planner, your host of More Knowledge, More Wealth, here on every weekend, talking about all important topics of personal finance. So we are talking about real estate right now. I just want to kind of share with you some startling news here about real estate. In 2019, this is nationwide, evolution of a normal investment home, which you would've bought for $300,000. Have $300,000 house, might've been able to get you, we'll call it $1200 to $1500 a month. But back then in 2019, the mortgage rates were at about four and a quarter at that time, which means your monthly mortgage payment was roughly $1200, about $1190 a month on a $300,000 home. Now in 2020, homes appreciated by about 5%, so that $300,000 home was $315,000 nationwide.

Now rates dropped because remember, that was during the COVID crisis. Dropped to about 3.5% at that time. Your mortgage payment was actually less than before. It was about a little over $1100 a month. Very good. Now 2021, home prices jumped from the previous year 15%, so the average home price want from $300,000 to $315,000, to now $365,000 nationwide. Now the mortgage even dropped more. It was at the low threes at that point. And your mortgage payment, even though the $300,000 home before was about $1200 a month, now it's only about $1240 a month, $1245 a month in 2021. Now home prices today in 2022 are up 21% from before, so that $300,000 home is now $440,000. Now mortgage rates now are 5.5%, which means it wasn't $1200, like back in 2019, or $1100 in 2020, or $1250 almost in 2021. Now it's almost $2000 a month for that mortgage payment.

What's my point that I'm making is that this is why you have seen a slowdown in real estate transactions. This is why ... Inactivity, I should say. So homes are still moving. But you are about to see a slowdown, and it's a natural occurrence when interest rates rise. And this is why one of the first things we learn when entering this industry and getting our licenses and certifications is governments are in control of inflation and deflationary periods. They truly are in control, and so they know what they're doing and they control recessions and expansion periods. And you could see this with what's happening now is what's called monetary policy. They're messing with money supply and interest rates. And so it's now more expensive to own homes because of the interest rate alone has gone up.

If interest rates have gone up 2% from two years ago, 2%. Well, that $300,000 home, what's 2% of $300,000. 2%, $300,000, what's two times three? Six. So $6000 more in interest on an annual basis. That's $500 a month more in interest that you're paying because interest rates have gone up. That's assuming it's only gone up 2%. I mean, there's people that have 2% mortgages. Now people are not happy right now with the 5% mortgage. Back in my day, which by the way wasn't forever ago, back in my day, an under 5% mortgage was good, so that was back in the early 2000s. You would've been happy with that. My point with you guys is real estate, you can see is a slowdown approaching. You don't have to be a rocket scientist to figure it out, so proceed with caution when you're looking to be a real estate investor because right now may not be the best time to go into real estate. I don't care if you're an all cash buyer as well, might not be the best time. You will see a slowdown. There is still a supply issue. And when there's not a lot of supply, that means demand is high, and so there are people still wanting to buy a house, but be careful.

If you're wanting help with that, if you want conversations to really see what you should do with your money, right now you can afford to wait, especially with the market so cheap, the way it is right now, the stock market, could be a good time to get in. Not saying it can't drop more, but just saying if you liked the market six months ago, you should like it today. It's on sale. But give us a call, we'd be happy to help. Our phone number is 855-963-2526. That's 855-96-FALCON, like the bird. We'd be happy to help put an assessment for you, where we can really just point you in the right direction and let you know what we should do. And we've got offices all across California, including in other states. We'll be happy to help, folks. Folks, that was a fast, fast show that we had. We really went over a lot. And like I said, if you have questions, feel free to reach out to us. Our phone number's 855-963-2526. That's 855-96-FALCON, like the bird. Or visit our website at falconwealthplanning.com. That's falconwp.com for short.

We'll have a confidential conversation to really help this show to your situation. That's what we'll do. We're on every weekend, folks. We go over all important topics of personal finance. You can find us on Spotify podcasts, or on the radio at your local station here at the Inland Empire. That is from 12:30 to 1:00 every Saturday. Feel free. Give us a call when you have any questions on it. We'll be happy to help. But we want you to enjoy your weekend. We want you to have a great week. And really, just God bless, and especially with all the turmoil that's happening recently in the world. So a special prayer goes out for the state of Texas and the sad events that's happened. So hug your loved ones a little closer now, sad events that's happened. But outside of that, look forward on your financial situation, reach out if there's anything we can help with. God bless.