In episode #7 Hari and Phil break down the question - What builds more wealth?
If you ever want to stump your accountant. This will do it. Sit back and listen as your hosts use simple math to show you what it really takes to build more wealth
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Welcome to the wealth and overdrive podcast. In this episode, we are gonna discuss, what do you think builds more wealth, taking more risk increasing rate of return, or decreasing the costs to build more wealth.Phil Bodine:
Welcome to the wealth and overdrive podcast, where we deliver you real life and proven f inancial strategies to help clear the fog. You've been misled to believe about your retirement investing a nd personal finances from traditional financial planning. So if you're ready to grow real wealth with less risk, fewer taxes and no fear of wall street, here's your host nationwide speaker elite consultant a nd author Phil B aldin and s on Harry.Hari Luker:
Hey guys, and welcome back to the welcome overdrive podcast. We appreciate you taking the time to be with us here today. I think today's topic is definitely gonna raise some eyebrows. You have Phil and myself here taking the, taking the reins. And it is a very, I would say simple concept or question yet raises a lot of concerns and I'm gonna say Controversial topic. And the question of the day of the podcast is gonna be, what do you think builds more wealth? Now there's gonna be a lot of topics that come to mind that we're gonna focus on just three of them. First one, taking more risk, number two, increasing the rate of return or number three, decreasing the costs to build that wealth. So before we move forward into today's podcast, I want you to think of those three. What builds more wealth taking risk, taking more risks, sorry, increasing the rate of return or decreasing the costs to build that wealth. So get a couple thoughts in your head. Write them down. If you want to, I'm gonna hand us over to Phil. This is one of the questions we always get on our questionnaires and go through the seminars and trust me, we're gonna break down each one as to why they either write or wrong Phil, over to you.Phil Bodine:
Thank you, Harry, for the introduction. Uh, we oftentimes in our planning sessions, we challenge the client by asking that very question. So what do you think builds more wealth, number one, just to reiterate, number one, take more risk. Number two, increasing the rate of return. Number three, decreasing the cost to build that wealth. And most oftentimes typically the client will say, well, I either need to take more risk or increase the rate of return on my money in order to build more wealth, which in our opinion, couldn't be further from the truth. When Harry, if I were to ask you, let's use an analogy here. If I were to ask you, which is more in the game of golf, the club or the swing, what would be your answer to that question?Hari Luker:
Well, I'd wanna buy more clubs, but the swing is way more important.Phil Bodine:
Absolutely. Uh, obviously I , we all know who tiger woods is probably one of the best golfers , uh , of all time. However, I believe , uh, he has perfected with practice and years of experience, he has perfected the golf's swing . And in fact, he could probably pull this a switch or a tree limb off of a tree and probably beat both of us at golf. <laugh> would you agree? <laugh>Hari Luker:
Yeah, I wouldn't wanna put money on that one. <laugh>Phil Bodine:
Yeah, you never bet against tiger woods. However, but he has perfected the swing, which most people are looking at the risk or the rate to return instead of decreasing the cost to build that wealth. So in the game of golf, you remember you've got all these club manufacturers and they're going to tell you that their club is better than someone else's club. Uh, we , in, in actuality, Harry, if I were to give you a thousand dollars, which would be better spent you going out and buying the best set of golf clubs that you could possibly purchase, or take that thousand dollars and go to a golf professional and have spend the money with him to perfect the swingHari Luker:
To professional all day long, as long as it's the right professional.Phil Bodine:
Exactly. So that's what we want to cover today. Um, so should we buy into the wall street game of taking more risks? Can remember when you take more risk, it it's not wall street, it's not your financial advisor. Uh, it's not , uh, the bank that's receiving your money is taking the risk it's you. And so we don't want to play the coulda , woulda should a game and, you know, in to create more wealth, we have to take more risks. When actually we believe that wall street and financial institutions had fed people misinformation and flawed formulas, which along with eroding factors in the economy have actually prevented them from achieving their optimum. So take more risk increasing the rate of return, or what do I mean by decreasing the cost to build that wealth? Well, there are a lot of costs in a plan , uh, that most people are unaware of and we, we call them wealth eroding destroyers, and those costs could be taxes, inflation, market fluctuation, and risk tax law changes, lawsuits , uh, technological change. I mean, look at my old iPhone of 10 years old is today considered obsolete because of better technology. And so technological change , uh, is a wealthy eroding destroyer. Imagine if , uh, the car that you bought today never broke down with that effect , your financial plan 20 years from today, if you never had to buy a new car , um , fees and or consumer financing, increased standards of living planned obsolescence, all those we eroding destroyers. If I could recapture those costs and put them back in your plan, would that make a significant difference in your future outcome?Hari Luker:
<affirmative> um, thank you for that response <laugh> but , um, no, so many advisors are out there showing you, Hey, I can get you a , a greater rate of return with less risk in your portfolio when they're avoiding the most important features, which is showing the client a better or strategy or a way to recapture the costs that they're currently losing in the plan. And it's much easier for me to strategize a way to recapture the client, the client that is losing money in their plan, unknowingly and unwillingly recapture those costs, put it back in their plan then to promise them a rate of return, which I can't do under compliance reasons. Mm-hmm <affirmative> so given that question again, which builds more wealth. Well, if you understand the strategies, if you understand our philosophies, the exact answer to that question, isn't taking more risk. Isn't increasing the rate return, which is all good and said more importantly, it's decreasing the cost to build that wealth is most important through a financial engineering approach or strategy based plan versus a product based plan. Makes sense.Hari Luker:
No, it truly does. And I think when, when either I've sat down with clients, I know Phil has over the years. I think the reasons for these primarily is why it's it's so, it's so new is a lot of times it just goes back to again, the wrong marketing, the wrong information, the wrong education, and not knowing where to focus. A lot of us. When we start a job, we sit down, the guy in the suit comes up with the 401k , says , Hey, look, you know , your employee would like you to go into this. They're gonna match it for you. Would you like a little risk, some risk or a lot of risk and the way they then explain it to you ? Of course, you know, you can take a lot of risk and chances are you. You could get a better return, but there's a risk involved, never break down really what that is or explain it to you. But that's kind of the two words that get embedded into our heads is risk and return. No one ever talks about increasing optimizing or making costs more effective, which in the long term plays into the compounding and the growth of that wealth over a longer period of time. So I really love this slide just on how basic, but yet how powerful it is. So again, if you didn't at the start we were looking at, what do you think big builds more wealth? Was it taking more risk, increasing the rate of return or decreasing the costs that builds that wealth? Now again, if you have any disagree or anything that is said within this podcast, please reach out to us. The comments are down there for a reason. We're an open book. We'll be happy to respond to anything that's put out there. We stand behind the work that we do in the information that we put out there. So at the same time, like share comment below, feel free to tell us anything that you made about your current , um, opportunities you have with your money. If you'd like any input specifically towards that. And by all means, if you gained value from this podcast today, share it with a family member , somebody love. So one, you can help also share the right information to the people around you. Phil, you got any closing words for today?Phil Bodine:
No, it's always a privilege to share and care and to serve , uh, other people by showing them better ways to build their, their wealth.Hari Luker:
It's been an honor been able to spend time on this podcast. We look forward seeing you on the next episode until then one for now.Phil Bodine:
This has been another episode of the wealth and overdrive podcast. For more information about taking your money into your control visit www dot Phil Bo , dean.com/4k . Also, it would mean the world to us. If you could hit subscribe, leave a review and share this with people, you know, and .