343. 5 Investment Pitfalls High Earners Should Avoid

Earning a high income can create opportunities, but it does not automatically translate into long-term wealth. Many professionals, executives, and business owners fall into financial habits that quietly limit their ability to build lasting financial independence. 

In this episode of A Wiser Retirement® Podcast, we discuss five common investment pitfalls high earners should avoid and how intentional planning can create more flexibility and clarity for the future.

Related Podcast Episodes: 

Ep 268. Top Financial Mistakes and How to Avoid Them

Ep 278. Avoid These Common Mistakes After Receiving a Large Inheritance

Related Financial Education Videos:

Common Mistakes to Avoid with Social Security Spousal Benefits

Financial Habits to Avoid in Retirement

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Transcript

Why High Income Still Struggles

SPEAKER_02 0:00

On today's episode, we're talking about why high income doesn't automatically build wealth in the costly investment pitfalls that often get overlooked. Stay tuned.

Welcome And What We’ll Cover

SPEAKER_01 0:10

Welcome to a Wiser Retirement Podcast, where we cut through the noise and bring you real, honest conversations about investing, retirement, and building lasting wealth. No sales pitches, no gimmicks. Just insights to help you stop guessing and start planning your financial future.

SPEAKER_02 0:29

Welcome to a wiser retirement podcast. I'm financial advisor Michaela Dowdy, and today I'm joined with Casey Smith, president of Wiser Wealth Management, to discuss five investment pitfalls that high earners should avoid. If you like our content, please leave us a review on Apple Podcasts or wherever you podcast today. Hi, Casey.

SPEAKER_05 0:50

Hello, Michaela.

SPEAKER_02 0:51

How's it going?

SPEAKER_05 0:52

Tables have turned. You're on the other side of the table now.

SPEAKER_02 0:55

I know.

SPEAKER_05 0:56

Well, thank you for uh putting this together. And I think this will be a great conversation.

Travel Talk And Real Life Costs

SPEAKER_05 1:02

Uh you still have a jet lag?

SPEAKER_02 1:03

I do have a little bit of jet lag still. Uh but yeah, I went to bed very early last night.

SPEAKER_05 1:09

Everybody here has been traveling internationally.

SPEAKER_02 1:12

Yes. We have we've had quite a few people traveling here recently.

SPEAKER_05 1:15

Did you enjoy your trip? Where'd you go?

SPEAKER_02 1:18

Went all over a little bit all over Europe, a little bit, um, which I know people that are Europeans are like, you don't claim you went all over Europe or a continent. Um, but went to London and also went to Paris and then finished off the trip in Italy. And so it was great, but a big time difference. So definitely coming back has been a bit of an adjustment. The jet lag on the way there though was not bad. Oh it was on the way back that I've had a little bit of an adjustment.

SPEAKER_05 1:45

But yeah, it takes me a couple of days. Uh, we were, as you know, we were in Italy for Christmas as a family, and that was um um going there. Yeah, it took a little it was a little weird. Um that's man, that's a long flight.

SPEAKER_04 1:59

Yes.

SPEAKER_05 2:00

Coming home, I was like, I can't like I need to walk around. This is this is getting a little claustrophobic. But yeah, it was um it was coming home. I loved it because I got up so early in the morning. I was going to bed at like eight o'clock, but I was I was up by 4 30 and I was getting so much done. And then uh I went on a like a guy ski trip out west and it just totally flipped me. I was I was gonna be a morning person forever, and then now I'm back to slowly rolling out at you know 7 a.m. thinking, oh, I missed two hours.

SPEAKER_02 2:36

Well, I feel like that's how it is, even when like we have time changes. I'm always, you know, like when we go, I guess it's backwards, like fall back, and I'm like, yes, I'm waking up so early now, and then and then it always adjusts over time. But no, definitely something what I was not expecting from the flight was I did not wear compression socks, which was like a major no-no, is what I've guessed I've learned because my legs have been swollen. Yes, yeah, so like finally, I think today they're getting back to where I want them to be. But they were sore, which I guess it's coming from, you know, walking 30,000 steps a day to then sitting on an airplane for 12 hours.

SPEAKER_05 3:15

Yeah, I that's probably more of more of that. But yeah, compression stocks, some some people just drink tons of water too to keep well hydrated. Yeah, there's there's all kinds of things for them. Some people go to the doctor and get pills and they just sleep through the whole thing.

SPEAKER_02 3:29

I know, knock yourself out. Um my goodness.

The Paycheck To Paycheck Shock

SPEAKER_02 3:33

But, anyways, today we're talking about investments um and the pitfalls that high earners kind of fall into. And I think one of the studies that really pinpointed this for us, and I think you've probably heard this stat if you've been kind of familiar with investing or anything here recently, but one in three households earning 250,000 or over are still living paycheck to paycheck on average. Um, and so that's just something that, you know, is really a bigger, you know, having a higher earning household in today's economy, but also still, you know, functioning as a paycheck to paycheck household as well.

SPEAKER_05 4:08

Yeah. So there's that's like a whole nother, that's like a whole nother issue. Um, obviously at a wealth management firm, we don't see too too many situations like that. Because they're they're coming here with uh usually with wealth, right? But I I could totally see that. Um so I I guess you know, the title is a pitfall of high

Pitfall One Lack Of Coordination

SPEAKER_05 4:28

earners. Uh so I when I think about this, uh I think one thing is outsourcing. So if you're a high wage earner, you're probably really good at whatever your craft is. Yeah. And what I find is our industry, financial services, is really bad about coordinating with other professionals. Yeah. They say everyone says they do it, but they don't do it exceptionally well. And that's because you know, you have an advisor who really just wants to manage money for you, and that's all they really want to focus on. And then uh some people, uh higher hiringers, especially, will have a separate planner because the asset manager doesn't do planning, and then they have a CPA, and then they have an attorney, and none of these people coordinate with each other. And what happens is the the client will uh assume that that's happening. And what happens is you have people pulling in different directions. The attorney wants us to schedule uh or to set up corporations in this manner for asset protection, but the CPA wants it done a different way for tax efficiency. And then the asset manager uh typically doesn't even think about taxes, says contact your tax person and is taking all kinds of capital gains that aren't necessary inside a portfolio or investing you in a very tax inefficient manner. Uh, and then you have a most people don't have planners, but if you had a planner, they would be screaming the whole time, going, none of this is working. So that's kind of what our model has been is we're planners first, and then we manage assets. We we do tax planning in-house, but then we also coordinate with CPAs. We have in-house legal counsel, but also um we use outside legal counsel in certain situations. So, so for us, uh, we see it as people come in. Uh, one of our newest clients uh came in. Everything was kind of a hot mess. I had had lots of different um uh business structures uh that didn't have any rhyme or reason, was had rentals that were getting paid to the wrong LLC, you know, and the CPA probably is trying to actually the CPA was terrible. Um in fact, uh no, we didn't do his tax plan. We brought in a CPA to do his tax planning. He found a $400,000 tax error. Oh he got a $400,000 refund because they've been paying overpay. It was just one year. They haven't gone through the other years yet.

SPEAKER_01 6:42

Wow.

SPEAKER_05 6:42

So so there's a lot of um the lot of miscoordination. And what happened, the the the problem is the client thinks that all these people are coordinating and they're actually not doing that. So I I I say that you have to understand why you're doing things, and the more complicated your life gets um as a business owner, uh, you have to have someone that that just knows how everything's put together. Yes. And the why uh of why it's put together. You can't you really should know that as the business owner. But but if you're just really good at building or selling widgets and you don't want to focus on that, you need to hire someone who could be on top of all that.

SPEAKER_02 7:20

Yeah, you need your quarterback or your head coach or whomever it may be to really be delegating and really be on top of everything for you.

SPEAKER_05 7:27

I always say the client is the head coach, the flight advisor is quarterback.

SPEAKER_02 7:31

Exactly.

SPEAKER_05 7:31

Uh, and that that's that's uh uh that that's a major pitfall that um that I see.

Pitfall Two Too Much Company Stock

SPEAKER_05 7:38

Um another one is being overexposed to your own income source. And what I what I mean by this is business owners, you don't have to be a business owner, you can be uh an executive or highly compensated individual. Um you you have company stock, you have uh high wage income, uh, but it it's all tied to what you're really good at.

SPEAKER_01 8:05

Yeah.

SPEAKER_05 8:06

And and that's how you become very wealthy. So there's this fine line. It's this fine line of making sure that you know as a business owner, what really should be happening, and Donald Miller does a good job of talking about this, um, is it becomes your cash cow. And so you have money coming after you've built your business to like a mature, mature stage, you're taking those earnings and you're and then you're investing in other things. And that's how you diversify your um your your investments. So it could go into a brokerage account and be invested there. Um, you can be invested in real estate, it could be invested potentially if you're crazy into another business, right? See, start another business and it's not related to the first business, and you diversify, diversify like that. Uh, but you we have to be really careful. Um, there's research from J JP Morgan that shows that a single stock concentration is one of the largest sources of portfolio risk. Yet it's very, very common amongst higher earners.

SPEAKER_02 9:03

Absolutely. Now, what about for clients that maybe don't own a business, but they're, you know, receiving like employee stock, or you know, they just are, you know, they work in the tech sector and they're like, you know, tech's going to continue to outperform and continue to perform and all that. And so then they continue to just purchase stock within the same sector that they're working in. You know, where is that fine line kind of for them?

SPEAKER_05 9:25

Buying the stock versus giving the stock, I think, are two different things. Buying the stock is you are doubling down and people say, Oh, I get that 15% discount if they if they get it. Yeah. And I don't know. I think that's something you don't do until you've exhausted all other areas of saving and maybe you come back to it as an as an added uh added bonus. Uh now, if it's 15% off a private stock that could IPO, that's a little different story. But if it's 15% off a stock that's already being publicly traded, I don't I don't I don't know if that's such a big deal necessarily. Depends on what your company does. I mean, if you were working at Cube, which was Square, they laid off 10,000 software engineers because AI took their jobs.

SPEAKER_04 10:03

Yeah.

SPEAKER_05 10:04

And that stock hasn't performed well anyway. So just because just because you're at a company and it looks like it's growing doesn't mean the companies won't actually grow. You could have a disruptor uh come in. And uh what what what about uh spirit airline pilots? Do you think if they were compensated as bonuses with spirit stock, how that'd be worth anything right now? Now you're out of a job and you don't your stock is worthless, right?

SPEAKER_04 10:26

Yeah.

SPEAKER_05 10:27

So that's kind of an extreme example, but I would just say just be cautious. In some companies, they're you buying the stock as a sign that you really believe in the mission and you might get a promotion or it helps with a promotion potentially. So you do have to play the game a little bit. And so we have to acknowledge that. But when it comes to single stock concentration, I would say you want you don't want that to be any greater than 10% of your total liquid assets. I think that's a good rule of thumb uh to stick to.

SPEAKER_02 10:56

No, absolutely. And we've even had clients come in where you do have to play that game of, okay, well, we want to balance not having too much of our net worth, you know, established into the same entity that we're already earning our income out of. But also at the same time, you know, because we are, you know, the director of growth here at this company, I do have to show that I believe in the future of this firm. So I do have to, you know, have stock in it and that sort of thing. So you do definitely have to play that ball game, but also, you know, protect yourself in the long run as well.

SPEAKER_05 11:24

Yeah. Yeah. Don't don't like triple down. Don't have it in your 401k and your brokerage account and right, and you get maybe RSUs or something like that. It at some point you have to realize you have to diversify.

SPEAKER_02 11:37

Exactly. And I mean, I think that's something that too, like even just seeing out of you know, clients sometimes they receive that you know their 401k match is with, you know, company stock or something like that. And sometimes uh we've found that clients don't even realize that's what's happening. And sometimes it works out really well. Other times, kind of, you know, like we're saying here, you know, if there is a worst case scenario, it can end up, you know, depleting your retirement savings alongside you know, not only your job. Yeah.

SPEAKER_05 12:05

Yeah, really after Enron happened, um a lot of companies shifted away from employee stock and government pressure. The ones that kept doing it, I I kind of shave my head. I'm like, did you not get the memo? Um but it depends on depends on what what the company is too.

SPEAKER_02 12:21

Definitely. But just taking a good holistic approach to it.

Pitfall Three Side Bets Snowball

SPEAKER_02 12:25

Um, but it looks like your pitfall number three here is letting side investments get out of control.

SPEAKER_05 12:31

Yeah, I think this kind of goes back to uh you think about crypto, um uh angel investing, option trading, um real estate deals, things of that nature. Uh what happens is you have a well-diversified portfolio, you're, you know, I mean it's focused on growth, uh, but then you decide to dabble and you have you put $100,000 in crypto. And next thing you know, that's $500,000 in crypto.

SPEAKER_04 12:59

Yeah.

SPEAKER_05 13:00

And your portfolio might be worth $3 million. And you're like, you've got way too much in crypto, but then you're emotionally involved in that investment. Uh same with same with the sandbox for for individual stocks. People will say, Oh my, well, okay, you guys are going to manage all this for me, but I'm gonna take care of this and manage it myself. And that's fine. Um, I say a lot of our clients do have a sandbox account that they they trade stock in, but sometimes they'll keep putting more and more. And next thing you know, um, it's it becomes a problem. Uh problem in a couple areas. One, uh, they have gains that that they never really tax, they never tax harvested, right? They have losses that they're, oh, this will come back because they're emotionally attached to that investment. Absolutely. And and you you look it up, and it's like, there's not one analyst in America that believes that stock's gonna come back.

SPEAKER_04 13:46

Yeah.

SPEAKER_05 13:48

You're like, okay, well, we're just gonna we're gonna move this over to your brokerage account now, and we're gonna filter through this and we're gonna sort this out, and then you just this reduce that account back to where we started. Um, real estate can get sometimes out of hand. Uh, real estate really, I feel like goes really well or really poorly. We've had people say, okay, I want to do some real estate stuff on the side, and that's fine. They and they do long-term rentals, and they have people that leave or I'm sorry, just quit paying but stay. Uh, it takes a little while to get them out, legal fees and such. Uh, and we have people who have great experiences. Um, the great experiences keep wanting to add more. And what happens is, and that's fine. Uh, real estate and stocks are the two things that will keep up with inflation just fine. Uh, but but the issue becomes they become real estate poor and that they don't have enough liquidity to actually live their life, and they have all this money in real estate and it's generating a positive cash flow, whether there's um a mortgage attached to it or not, but it doesn't it it it doesn't you're like why can't I live on more in retirement? It's like well your net worth went up really well over the last 10 years, but you you can't you can't get any of that.

SPEAKER_02 14:58

Exactly.

SPEAKER_05 14:58

Uh and so it might be time to liquidate a property just to create liquidity in your portfolio so you can have monthly income that that allows you to do good, do fun things. Definitely. Um so you just have to be careful that you don't let side things uh get out of control to where their their um the the value uh is is you can't you can't get out of it, basically.

SPEAKER_02 15:20

Yeah. And I feel like the kind of common theme between the last two that we've talked about is really just kind of keeping that level head mentality of what is best for the entire picture, not getting too honed in um on a single specific, you know, entity or decision or anything like that. Um, and knowing, you know, when is your time to kind of cut the loss or continue to build on that growth and you know what makes the most sense for your entire portfolio.

Quick Note On A New Book

SPEAKER_03 15:46

Not all financial advice is created equal. Coming June 10th, everything your financial advisor won't tell you. An eye-opening book that reveals what's really happening inside the financial industry and what it takes to build a plan that actually works. Because what you don't know could be costing you.

Pitfall Four No Plan For RSUs

SPEAKER_05 16:05

Another pitfall I see a lot is highly competent individuals don't get paid just a W-2. They're getting bonuses, uh, stock options, restricted stock units, deferred comp. All these can be incredibly invaluable, but typically I don't see a plan with them. And it's almost like that's part of their investment strategy, if that makes sense. Uh well, I have all these RSUs. Oh, I have all these well, there's no there's no cohesive plan, especially a tax plan. There's no cohesive plan to figure out how do I take these, receive these, and then and then grow my wealth with it. Uh what will happen usually is it becomes a lifestyle. So they have to cash those in to pay for school, yeah, uh tuition. They have to cash it in to go on a family vacation, they have to cash it in to do whatever. Um so we what you want to make sure is that that if you're a highly compensated individual with a complicated pay structure, that you've mapped all this out, uh, even in our own software. Is our are RSUs a part of retirement planning? And usually you have to say no because you realize that, oh, these people are just cashing these things out and just spending them. And maybe that's fine. Maybe you have other compensation that's going other places and your retirement plan works out just fine. I like using RSUs sometimes to eliminate debt, especially on mortgages. Uh so that's not a bad thing, but is it intentional? Do you do you have an um or is it just kind of haphazard? Right. So so that that's a big uh thing for highly compensated individuals uh is uh or families is not having um a strategy. Your compensation um is is more of a tool.

SPEAKER_02 17:48

Yeah, and I feel like that's something common that we see as far as you know, clients will allow kind of debt to accumulate over time, we're just with this thought process of, oh, well, the bonus is gonna come in and we're just gonna pay it off. Or oh, the bonus is gonna be here and we're just gonna, you know, take care of it. And uh in some ways, yes, that's fine. But in other ways, it's something that you've now allowed this debt to kind of accumulate on credit cards or whatever it may be, because you're really living beyond your means on a monthly basis. But it's something that you know that this bonus is gonna come in, it's gonna be nice, and you're just gonna use that to completely pay everything down. Um, but it's just being more intentional, kind of knowing exactly where your dollars are going, um, because it can, you know, be then you're just having more costly dollars because they've accumulated that interest over time as well.

Pitfall Five Losing Flexibility

SPEAKER_05 18:31

Yeah, that's exactly what my point five is. Um is probably the most overlooked. It's it's really ignoring flexibility. So it's ignoring ignoring the ability to be able to pivot. Um, you've got too much tied up in illiquid investments, not enough assets, uh sizable capital, golden handcuffs, which is high income, low freedom, uh, no clear definition of when's when's enough as far as as far as um earnings go. Um I guess I guess another way to say it is uh I tell my kids this all the time, you're rich.

unknown 19:11

Yeah.

SPEAKER_05 19:11

I hate that I hate it when people say they're rich. It just sounds so uneducated.

SPEAKER_04 19:15

They're rich.

SPEAKER_05 19:16

Uh but you can be a rich person or you can be a wealthy person. And rich people um have really high incomes, but they spend everything uh and they're not accumulating wealth. Every year their little their little chart, little bar chart of their net worth doesn't go up. Yeah. Um wealthy people, so rich rich is very obvious because of lifestyle. Wealth is hidden, you don't really see it. Uh maybe some people would say old money, right? You know, the old plantation home. You know, the 200 acre in Toyota Camry. That 20 acre statement. That's old money. That money's been there for generations. That family hasn't worked in generations. Somebody did something really big a long time ago. I'm not talking about that. I'm I'm talking about um your millionaire next door, multi-millionaire now next door now.

SPEAKER_04 20:05

Yeah.

SPEAKER_05 20:06

But yeah, they're they're driving a modest car. They live in a uh probably a nice neighborhood, but mod more more of a modest home. And they deposit three million dollars in their bank account, you know, or in their brokerage account. Definitely. Um they can live, they can do anything they want to do, uh, financially speaking, uh, but they have a lot of flexibility and they have no debt or very little debt. Uh that's wealth, or people who younger people who are living below their their income uh source, or they're they're below their like living on 50% of their income. Like one spouse could lose a job and it'd be just fine.

SPEAKER_02 20:42

Yeah.

SPEAKER_05 20:43

Uh those people are are slowly building wealth, um, which will compound over time. But in in today's society, we don't we don't we don't see that. We don't almost it's almost like we don't really value value being physically conservative.

SPEAKER_02 20:57

Correct.

Rich Versus Wealthy In Real Life

SPEAKER_02 20:58

Yeah. And I think that's also just kind of speaking to the, you know, just I think the keeping up with the Joneses is no longer become you just keep up with your neighbor. It's now no, I need to keep up with the person that's across the country. TikTok and Instagram. Exactly, exactly. And so it's just you're constantly being fed this cycle of what you have is not enough. And it's, you know, when you actually really get beyond it, it's something that most of the people that look like they have all this stuff all the time, they take it and then they return it. You know, like they buy it, they make a video with it, and they take it back. Like, you know, it that's their game because it's part of their job.

SPEAKER_05 21:31

But I saw on the news recently there was some lady on social media that that um she got arrested for fraud, but she was she was doing something. Oh, it was she was taking government money, it was like uh PPP loans or something. Wow, and then she was buying all this stuff and she's all famous on social media. Uh her her bentley was rented. It was a rented bentley.

SPEAKER_04 21:52

Yeah.

SPEAKER_05 21:53

It's even really her. She's just renting the car. Um, she lived in this big place in LA. It was all All rented. None of it was hers.

SPEAKER_02 22:02

Yeah.

SPEAKER_05 22:02

And she was using stolen money from the government.

SPEAKER_02 22:07

It was so bad.

SPEAKER_05 22:08

And you think about all these people that follow her on social media. You're thinking to yourself, oh wow. You know, people like, well, look at this successful person. It wasn't success at all.

SPEAKER_02 22:16

No. It's very easy to fake a facade for social media.

SPEAKER_05 22:19

Oh, tons of uh plastic surgery. Just tons of plastic surgery. I was about to spin on that too. Uh which is in LA, right? I guess that's a normal thing. It's like gas station. Yeah, I feel like it has to be.

SPEAKER_02 22:29

I feel like it has to be in LA. They're probably very frequent, actually.

Younger Clients And The Balance Question

SPEAKER_05 22:34

Um so when you work with young people, do you do you feel like that uh because you you you see good incomes. Do you do you feel like that they're uh thinking a little differently? I I would assume that since they're paying us for a financial planning fee uh to go through the process that they are thinking differently.

SPEAKER_02 22:50

But they are thinking differently, I would say, for the clients that are coming in, because I think it's something if you're going to come into a financial advisor or a financial planner, you know, at the time of, you know, you're in your early 30s or even you know early 40s and that kind of timeline, that's something where you're making a very conscious decision that a lot of your peers aren't making, quite frankly. Um, and it's something that typically those are the ones that, you know, really are trying to make sure they're setting themselves up for success. Um, and it's something that they're really trying to make sure that, okay, hey, uh, we've dotted our I's and we've crossed our T's and we're saving adequately. But we're also, I think the bigger question that I see more out of a shift of younger clients than I do necessarily, some of our clients that are kind of maybe more so approaching retirement is more so of this wanting to how can I balance enjoying today, but also making sure I'm providing for the future. And it's, you know, how do I make sure that, you know, I am saving enough for, you know, what I want to accomplish for the future? Because retirement might be 30, 40 years away. Right. But also at the same time, how do I make sure I'm not saying no to the things I want to be experiencing now? And I think that's the bigger question. And I think that's a hard question to answer in some ways. Um, because it's hard too when you're having, you know, clients that are, you know, newlyweds and, you know, they're about to have their first kid. And, you know, it's something that it's okay, let's talk about retirement a little bit here, because that is your end goal.

SPEAKER_04 24:16

Yeah.

SPEAKER_02 24:17

You know, that is what you're here for. Because you are wanting to say, okay, yes, we we are, you know, about to buy a home and yes, we're going to do all these other things. But at the end of the day, we also want to know when do we get to walk away from the workforce? And so I think the big question though is just, you know, finding that balance. And I think that's different for every family, um, you know, what their lifestyle is going to be. Because I have some clients that, you know, they could live and somehow they can travel the world on like $3,000, you know? And I have others that they're like, no, we're gonna need a minimum of $10,000 a month.

SPEAKER_05 24:50

Every family is so.

SPEAKER_02 24:50

You know, every every family's just a little bit different and they just have different expectations and that sort of thing. But it it is really fascinating kind of to have those conversations and just to see that there is, I think that's the bigger question at this time is how do we balance both?

SPEAKER_05 25:05

Yeah. But I don't think that changes because I I'm picturing picturing some of my review meetings recently, um where we have families on the other end where they've already retired, but they want to help the next generation. Yeah. But they also you know, they also have all these places that they wish they could go, but they can't because they have to make sure they preserve their assets for the kids.

SPEAKER_02 25:26

True. Yeah.

SPEAKER_05 25:27

And you're like, no, no, no. This this is you can do both. There's always something. This is why. Yeah. So I feel like there's always there's always a balance. It's always, there's always something. The people that are who want to live today, but also save for their future, the kids, yeah.

SPEAKER_02 25:40

But I would say there's a bigger trend, I would say, just on social media and that sort of thing, of people choosing to kind of forego the future.

SPEAKER_05 25:50

Yeah.

SPEAKER_02 25:50

Um, and to say, no, just live in the moment. You're making a good salary, just live in what you're doing. And I it kind of that YOLO of, you know, way back. Um but you know, kind of going back to that mindset of, and I think especially in the younger generation, I feel like especially even with like news cycles and that sort of thing here recently, there's just a lot of negativity in the younger generation as far as what the future is going to look like.

SPEAKER_04 26:16

Yeah.

SPEAKER_02 26:16

And so I think there's a lot of, well, this might be the best it ever gets. So I'm just gonna enjoy it now.

SPEAKER_01 26:23

Interesting.

SPEAKER_02 26:24

And I think that's a really fascinating. I'm not saying that that's clients that are walking in our door because most of our clients are planning for the future. The trends you've seen, but I would say that's the trends we're more so seeing on social security.

SPEAKER_05 26:34

We definitely can't let Social Security fail because all these people are gonna be living only on Social Security.

SPEAKER_02 26:39

I do think you have two um areas. I think you just have one end of the spectrum, which always happens. I think there's always just one end and one's the other. Yeah. Um, because I do think there's also statistics on the the younger, you know, Gen Zs that are entering the workforce now and have been in the workforce for a few years, um, that they're actually have been saving more than millennials or saving more than is it Gen X above that? Yeah. Um, and have more money than anyone has had before prior to them and being able to save. Yeah. Um, but also you talk to them and you know, at different points, it's like, no, I'm broke, you know. So, you know, it kind of depends. Um, I so I think it just depends on, you know, what sector they're in, where they're working, um, where they're trying to live too. Yeah. Um, because I think you just have such a disparity between the cost of living in places as well now.

SPEAKER_05 27:30

Yeah, that makes sense. Yeah. I mean, if we could get um 20-year-olds just to max out a Roth IRA, think how much money that would be for 10 years. And you never saved again after your 30s, never saved again, think how much money that would be. No. And that would compound to be millions of dollars.

SPEAKER_02 27:47

It would be.

SPEAKER_05 27:48

But uh people forget that.

SPEAKER_02 27:51

Yes. Yes.

SPEAKER_05 27:52

Or at that age, you're not really listening to your elders anyway. But um Yeah. Yeah. I I I find that really good savers though tend to have parents who are not good savers.

SPEAKER_02 28:02

That that's another great point. I almost mentioned that.

SPEAKER_05 28:04

Um that is that is a thing. If your childhood was strapped for cash and you saw your parents making bad decision after bad decision, you're like, this can't be my life. Like I went out of this life, and those tend to be spreadsheet budgeters and super strict with their money because they grew up in a terrible financial environment.

SPEAKER_02 28:22

Exactly.

SPEAKER_05 28:22

And usually other things go along with that.

SPEAKER_02 28:24

No, and that that is very true. I think that is honestly a majority of the younger clients that we see that that's their story.

SPEAKER_04 28:30

Yeah.

SPEAKER_02 28:31

Is that they have had whether it's one spouse, both spouses, um, you know, whomever it may be, it's someone's coming in, and that is the main reason is that they're they've watched something happen in their own family, even if maybe it wasn't their own immediate family, they've watched it happen in their own immediate circle. Right. Um, and they just want to make sure that that's prevented.

SPEAKER_05 28:49

Well, I think getting back to um the pitfalls, uh we kind of we kind of went to a different gener generation there.

Bringing It Together Under One Plan

SPEAKER_05 28:55

But I think getting back again back to the pitfalls is number one is just you're really good at what you do, but you need coordination. You you need your tax plan synced with your uh financial plan, synced with your or your I'm sorry, your retirement plan, synced with your tax plan, uh synced with your estate planning. All these things run together. I think that's what we're really good at as a firm as planners and uh piecing all that together. So it's it's all under one roof.

SPEAKER_02 29:20

Exactly. No, and you want everyone communicating with each other because if they're not, then it can just lead to, like you were alluding to earlier, just a lot of complications later down the line. And you just want to make sure everything's buttoned up.

SPEAKER_03 29:30

Correct.

SPEAKER_02 29:31

You want it to create clarity at the end of the day. You want your entire portfolio and everything that you're doing to provide more clarity, not more confusion at the end of the day.

SPEAKER_05 29:39

Yep, and that gives you a lot of confidence uh moving forward. Um

A Probate Story And Why It Matters

SPEAKER_05 29:44

we're headed down uh I'm headed down on a uh trip, a day trip down to Florida this week, actually, in a situation where my husband passed away very early. And it's not a complete upside down mess. It could be a lot worse. But being in Florida, we're gonna have to go through probate. And this is not a client, this client came to us after um this happened. And I d it's just like a case study, and like you gotta have you gotta have things buttoned up. And I don't know that they would have had enough known enough information if they hadn't gotten with a if they gotten with a planner, hopefully.

SPEAKER_04 30:19

Yeah.

SPEAKER_05 30:20

Um but but yeah, it just it's just a reminder of me of why podcasts like this are important. Because we want to tell our clients and the people who maybe haven't even met us yet, hey, get you need to get organized, you need to get your stuff together. Um I'm I'm having to do a lot of cleanup in a not so nice situation. Uh and and um you know that's our job, it's what we do, but it was it was all preventable.

SPEAKER_02 30:43

So definitely.

SPEAKER_05 30:44

And that uh but on a happier note, we're all here ready to help.

SPEAKER_02 30:49

Yes, exactly. We're here. But oh yes, no, definitely something though that you want to make sure everything's buttoned up. I think that's something too that even just having conversations with clients on making sure things are getting done. It's you almost have to think of it as especially clients that have kids, like you're doing this for your children. And I think that like sometimes shifts the perspective a bit.

SPEAKER_04 31:09

Yeah.

SPEAKER_02 31:09

Um, because I just feel like parents, um, you're so much more like apt to do something if it's for your child and not necessarily for yourself, it's just a natural selflessness that comes from parents.

SPEAKER_05 31:20

I think I've used that trick one time. I I had I was about to I was about to come out of the conference room chair and just like strangle this husband one time, but but he was like, Why should why should I get estate planning done? He's like, I'm not here. Like it doesn't, it doesn't affect me. I was like, Whoa, whoa. And you just you can see the wife kind of sitting there kind of looking at me, and I'm I'm just like, oh my gosh. Um, but yeah, I was like, Well, you have children, you have responsibilities. Yeah, you got married, you have responsibilities. So it's your responsible, you, it's your your it's your responsibility to do these things.

SPEAKER_02 31:53

Yes, right?

SPEAKER_05 31:54

It's your job.

SPEAKER_02 31:56

No, exactly, exactly.

SPEAKER_05 31:57

And yeah, within the year we're able to convince them that uh he should pay for his own.

SPEAKER_02 32:01

Yeah. Oh my goodness. That's funny though. Um, but overall, um, everything kind of today, just making sure that you're making the right decisions, making them with a clear head, making sure everything's, you know, buttoned up and you know, you're still creating that flexibility that you need at the end of the day as well for living. And so overall, though, any last thoughts from you, Casey?

SPEAKER_05 32:26

Um I think I just made them, but uh basically just you know make sure that as successful as you are, that you have a you have a comprehensive plan in place addressing your estate, addressing your tax strategy, your savings for the future, and then how how you're building wealth. Yeah. Um, and you know, if in if you're listening to the podcast and you wish to be in that in that phase, then I'd say focus on eliminating debt. Focus on you still need the basics. You probably need life insurance, make sure something happens to you, your family's gonna be okay. Um, but the the important thing is is that you're you cut expenses, you do some hard things for for a little bit, and then you'll start, you'll you'll eventually make your way to this position.

SPEAKER_02 33:13

Definitely,

Resources Consultation And Final Reminders

SPEAKER_02 33:14

definitely. And if you want to hear more about kind of what we're talking through, we have some other episodes that are similar. So episode 268, top financial mistakes and how to avoid them. And then episode 278, which is avoid these common mistakes after receiving a large inheritance. We also have some financial education videos, so common mistakes to avoid with social security spousal benefits, and then financial habits to avoid in retirement. So thank you for listening to today's episode. If you're interested in learning more about wiser wealth management or want to schedule a consultation to meet with one of our fiduciary financial advisors, you can do so by going to wiserinvestor.com or you can click the link in the episode notes. Don't forget, again, if you like our content, feel free to leave us a review on Spotify or Apple Podcast or wherever you podcast.

SPEAKER_00 34:05

Thanks for listening to a Wiser Retirement Podcast. We hope you enjoyed today's episode. Make sure to subscribe wherever you're listening. That way you don't miss any new episodes. We'd also appreciate if you could leave a rating and review. If you have any questions about anything that was discussed today, head to WiserInvestor.com and reach out. This

Disclosures And Closing

SPEAKER_00 34:23

podcast is strictly for informational purposes only and is not to be considered as investment advice or solicitation to buy or sell any financial products, securities, digital assets, or any other investment vehicles or a basis to make any financial decisions. Wiser Wealth Management Incorporated is a registered investor advisor with the SEC. The host and or guest may personally own securities, digital assets, or other investment vehicles mentioned on this podcast. Neither the host nor guests of the show are compensated for their participation, and no referral fees are paid to or received by any host or guest for clients, listeners, or similar interests. Investments involve risk, and unless otherwise stated are not guaranteed. Be sure to first consult with a qualified financial advisor, tax professional, insurance professional, andor legal professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.