How to Think About Costs

Sean and Ben chat about a simple question with a complicated answer: How much does it cost to do a Roth conversion? There are many ways to answer "How much will this cost?" and they can become overwhelming .

Transcript

Sean 0:02

Okay, today, Ben, we are going to talk about our favorite topic, which is fees or cost of investing and using an advisor. So you had an interesting conversation or two this week, you said, with um clients and potential clients. Um, and that's a natural question that people ask us is you know, what's it gonna cost me? So why don't you uh lead off with your your case study, if you will.

Ben 0:30

Sure. So I'll say first, I think costs are important to discuss. So whenever I talk about this, I'm not making fun of a client or making light of the situation because they're important, but there are you know, reference back to our compared to what episode, and you know, there's gonna be some of that in this one. Um so I had two conversations, Sean, this week about fees. That doesn't come up every week. It certainly if we're talking to prospective clients, we're talking about fees, but with current or you know, somehow related in our world to us, doesn't come up every day. This particular client is sort of a new relationship. Um good people, really good folks, they have a lot of money. Um they were talking about rolling over some funds from their 401k to an IRA in order to do Roth conversions because you can't. My understanding is you cannot really do a Roth conversion in a 401k. I've never heard of that. I think I would have heard of it if we could do that. We can't do that.

Sean 1:37

I I don't know that you can, but even if you could, it's it's one of those things where it's probably good to have it's probably good to have some help with it one way or another.

Ben 1:46

Yeah, well, they're they're overly worried about, I I would say overly worried about what the government is going to do in tax rates going up in the future because they have to go up, right? We're spending too much money. Um, so they want to do these Roth conversions even while the husband is working. And her simple question, which I I wish that it was a simple answer, the simple question is what does it cost to do a Roth conversion? So, how do you answer that question if you're and this leads into business model? Unfortunately, in the email, I probably went into way too much about financial financial advisor fee models, business model. So if you're doing hourly stuff, there's one answer. If you're doing retainer or monthly subscription, there's one answer. If you're doing assets under management, totally different answer of like what does it cost to get this done? So I guess we'll address some of that.

Sean 2:46

Yeah, yeah, we could probably create separate episodes for just debating the merits, like we could argue for and against all these different ways that that advisors can be compensated for their expertise. Um, that'd be a fun exercise. But yeah, trying to encapsulate what's it gonna cost uh is very difficult because with a newer relationship, the way you've met these folks uh that worked with a former advisor that that we purchased to practice, um pretty much nothing's changing, but it's hard to we want to answer with as much detail as we can. But when you pull on that thread, it can be very overwhelming. And these are smart, smart people, as are most of our clients, or all of our clients, I think. Um, but it's like anything else. If you don't have any context or background for what all these pieces mean, um, it's easy for us to get um to see how people's eyes glaze over when we start talking about the parts of either what's in there or what could be in there in terms of end cost to the to the client. Um, because if I'm not mistaken, technically the answer is sort of zero. There's no cost to the Roth conversion itself, right? Or if it's it's a few bucks, it's nominal, right?

Ben 3:58

It is a nominal fee with at least with LPL, where we custody assets, they do charge a nominal fee. It's not very much, but it there is a cost.

Sean 4:06

What is it, 50 bucks, 100 bucks, something like that?

Ben 4:09

25.

Sean 4:10

Oh, yeah, okay. So uh a little nuisance fee, but normally doesn't move the needle for people. Um yeah, I thought your email were back was great. It's very detailed, very thorough. Um, I think for a lot of people it would have been overkill, but given your understanding and working with this this couple and and the the wife in in particular that you I think you've talked to more. Um, how did she receive the answer? What was her take?

Ben 4:36

The exact words were you're you're so honest, it's refreshing.

unknown 4:40

Refreshing?

Ben 4:41

Yes. So I love the the feedback, but um certainly whenever you're talking through this stuff, there's still a general sense of like I I don't know that I fully trust this answer, you know. I still feel like there's a a lot of financial advisors do bad stuff, so we get a bad name. I think we're trusted less than Congress, if you could believe that.

Sean 5:07

Yeah, yeah. The tricky part is a lot of what we do, even if people don't trust, there's they may they may not understand, or there's people that maybe are trustworthy, but the the as in terms of their ethics and and the pricing is not that far off, but maybe the way they're compensated is not direct uh or obvious to people, even when it's explained once. You know, if you work with someone for years, I'm sure there are plenty of people that we work with that if we quiz them on demand, they would fail or not get the details exactly right. Because once they perceive value and they trust you and you're working with them, that that's not what they're focused on, which again, a lot of people would argue that's a bad thing because you should always know what you're paying for, which I tend to agree with. But um, if people don't care what they're paying, if they feel like they're getting value and they know the the their charges come out of their accounts somehow, um, it is interesting how people go one way or the other, complete distrust or almost too trusting about you know what's happening. Um the the analogy that I like, and I've never really formulated and articulated in a very consistent manner, is if if you have a good advisor, you're gonna be paying them something, right? And so whatever you're paying them, you need to understand how that works to the extent that you either there's as little or as much detail as you want. And I think that's a red flag in working with an advisor, if they're not um forthcoming or if they get defensive about that. Um, because even if you don't like the answer, um, there's no reason an advisor shouldn't explain it. Now, at some point, if if you're asking the same questions over and over, maybe there's a communication problem that can get frustrating. But the way an advisor, the tone with which they answer, hey, how do you get paid, or how what do I pay? Uh, I think that tells you something about where they're coming from and if it's a good fit, how you feel about the response, even if you can't um repeat that the answer perfectly to someone else. But I like the the idea of uh home improvement or home project, because I can't I think we've established you and I, neither one of us can do those kinds of things. Um, but if I'm gonna go get do my get my house remodeled or any kind of project and you go to Home Depots or Lowe's or whatever, I want the person I'm hiring to go in there and get the right stuff. Um, I don't necessarily want to get it, hire someone from Home Depot or Lowe's because you know, I want them people to go where they're they think they can get whatever stuff they want. And that's kind of what as an independent advisors we tend to do is we can go shop at Home Depot or Lowe's or the uh Ace Hardware or wherever else you would get that sort of thing. I don't know. That's why I'm hiring the expert. So there's gonna be a cost to that person being on your side and working for you. In an ideal scenario, that person knows where the values are in those stores, they knew they know what they need, they know what it should cost, they know where the best prices are or the best quality or the best value, and they know where to spend the extra money and where to not spend the extra money. Because if we need the best nails, is that something you would use if you were building something? A nail? I think it is. If you need nails, if any old nail will do, well, just get the cheap nail. If you need quality nails, figure out where they are and get those. Um, but don't overpay for everything, right? We want that person, our advocate, our advisor, selecting the right hammers and nails, and I don't know what else you need. That's about it. That's my knowledge.

Ben 8:40

I've never heard you use that analogy, Sean. And I I love it because the other part of that, too, is if prices on all these things go up or down, has nothing to do with this independent advisor, actually. And it's their job to know whether the prices are going up or down at all the stores and like kind of how things are moving.

Sean 9:02

But if inflation happens, which has been happening in our country lately, if that happens, it's not the advisor that's like you know, charging more, you know, the the the nails are going up, wood goes up and supply chain issues or yeah, what have you. Yeah, they'll they're gonna know the hours because they go there every day. They're gonna know who's got the best service if they're looking for something really niche. They're gonna know uh, you know, when you have a when you need something fast, they're gonna know who's got stuff on hand because they've built the connections, right? So um, and maybe the Home Depot is the right place. Maybe, maybe um Ace Hardware or some local shop is better, right? For various reasons. I don't care. I just want, I mean, I care because it's my house and stuff, whatever. But um the price of yeah, the price of the supplies, they're not gonna have as much control, but they'll know the landscape of what to what to pick and where. And hopefully to the extent that the you know, some a lot of people that are spending money on a home project, they do want to know. And the the the contractor or the the advisor, the remodeling advisor is gonna be able to articulate why they did something. You know, again, as a as an amateur, I'm not gonna be able to evaluate their claims or their methodology very well. And that's that's kind of the only challenge with having, you know, hiring an expert is I can hire an expert and they can tell me whatever they want. And I'm gonna go, oh, that sounds smart. I don't know. And it can be completely bogus. That's a challenge I think a lot of people find in either working with their current advisor or fick uh picking a new one or deciding I don't want to, I don't want to deal with that uncertainty and feeling I don't know, I don't want to get ripped off, I don't want to pay fees I don't need to pay.

Ben 10:43

Um because where I pull that the most is cars. We don't have to get into it, but when I go to get my oil changed, even and it's like you need this. I'm like, hmm, do I do I really?

Sean 10:57

Do I really? Yes. This air filter, Ben, look at this air filter. Do you think this looks clean? I don't know.

Ben 11:04

I don't know.

Sean 11:05

I have no idea compared to what? Um yeah, that the the the cost for an advisor is tricky because um anywhere from free to you know 10, 15, 20, 30,000 a year is what a good professional advisor might cost. But how it's charged and and how much it should cost, man, that is that is in the eye of the beholder in a lot of ways. Um, what do you feel like people um when people get hung up, where where are they where's the most some ways they get hung up, or where are situations where people are missing the the forest for the trees or the trees for the forest, whichever one it is?

Ben 11:49

Well, the a lot of times the way I say it um is we're not the most expensive, but you don't want the cheapest. And I think the best place to start with an analogy that um I heard first from Carl Richards. I invoke Carl Richards and Michael kits us quite a bit on on our talks here, but they're just they're full of good stuff. So Carl was talking about buying ski boots. This is like 20 years ago. He wanted to buy this like$300 pair of ski boots. Like I guess 20 years ago that's even more than it would be today.$300 is a lot of money today for you know boots. Um but in his mind, he's going through this whole thing of like, well, you know, there's this 90 pair over here,$90 pair of boots over here,$300 over here, and you look at the 90 and you think that's being frugal. I I need to go with the$90. Like, why am I gonna splurge on this$300 pair of ski boots? And I guess that story stuck out because I when I heard this, I'd just gone through a move and I needed a recliner. Um and so I went to Walmart and saw this beautiful like leather recliner that was um displayed, and I thought, oh my god, only$250 for this leather recliner. Of course it was faux leather, and I knew that, but then not even a year later, that recliner was like peeling nasty, you know, um little bits of faux leather off of it. And I thought, yep, you know, I paid for the crap stuff, you know, like it was the value, you know, cheaper. Uh, but it didn't last. And the same thing with the boots. Carl Richards bought the$300 pair of boots, they've lasted 20 years. He probably would have gone through six pairs of$90 boots. And so, you know, the the value, what it seems like value up front doesn't necessarily pan out. You a lot of times you you know, a lot of times it's not true, but you get what you pay for sometimes, sometimes you don't, but buying quality matters and then keeping it for a long time sometimes in the end works out better.

Sean 14:12

Yeah, I um I think about that a little bit in the way I think of vehicles. I literally bought a car today, which I don't buy.

Ben 14:21

Congratulations, yeah.

Sean 14:22

Glad it's over. I don't like buying cars. I don't, I don't like, I don't like change, but I certainly don't like spending money and uh on cars at least. And so we have a third driver in my house as of four months ago, and it was probably time to buy a car. We tried to share, but it's just easier. Turns out we have three drivers to have three vehicles. So I could have found a car for probably a third or a fourth of what I paid today, and it wasn't outrageously expensive by normal standards, but um it's the most I've ever spent on a car for sure. Um, maybe not inflation adjusted, but still don't like it. But it's quality, it's only two years old, it's gonna last a while. So it's a Toyota. It's uh, you know, it's it's I know it, you know, you got cars are cars. So if you have a good car, it'll last a while and they help you get places. So it was expensive, but compared to what? Compared to Ubering and waiting around or having to do massive coordination between my daughter and me and my wife at times to uh get places, you know, it's I'm glad that we could do it. Um, you know, when it comes to the the fee, the part of the cost equation that's just using an advisor. There is a massive spectrum on, you know, there are plenty of people who love this stuff as much as we do and do it for themselves, and they could probably help other people and do help family members and friends because they're just really into it and are uh probably could pass the CFP if they took it, the certified financial planner uh exam. So that's on one end. The other end is people who there's no way they should be making their own decisions because they're not willing and able to invest the time. Um, and you know, if you compare having a professional advisor sometimes with a CFP, Vanguard or Schwab or Fidelity, they've got some great programs that can give you the basics at a fairly relatively low cost, let's say 30 basis points or 0.3% per year if they're managing your money. And, you know, depending on the advisor and depending on the platform and the program, that might be better than doing it yourself if you're not um, if you just have no idea, you're throwing darts or picking stocks based on what you see on the news uh or what your friends say. Um but how would you compare like going to Vanguard Fidelity Schwab at 0.3% versus using someone like us at closer to 1%? Like, how would you compare and contrast those offerings as two examples?

Ben 16:51

Yeah, well, in my analogy, I wouldn't say that uh Vanguard or Schwab or Fidelity is like the cheap faux leather sofa of Walmart because these are big institutions, they're good folks. I guess um, I'm not sure if in Jarvis, Matthew Jarvis, another guy we listened to, calls it the 1-800 CFP or whatever. Uh you don't really have one person that you can reach out to quickly anytime um to kind of hold accountable. I don't I don't know if you have a dedicated CFP on those lines right, but yeah, I don't know those programs well.

Sean 17:29

I I'm I think you do in some cases, but um probably depends on how much you're putting in, I bet. Yeah. My guess is I I my understanding is they're they're fairly limited, more limited scope on what they can offer in terms of the tools they use. Typically, the the advisors that are the planners that are working at those places, they have a different ambition level. They're not going to be as in the weeds on every part of your planning, not gonna develop relationships with the state planning attorneys or accountants or uh insurance experts. Just they're more there to make sure the money is invested prudently. And, you know, again, for 0.3%, let's say a third of what a full service professional advisor might cost uh with an independent practice that can, you know, decide who they work with. Maybe it's a good value for that person who's willing to handle the other stuff on their own.

Ben 18:23

But um, I would also say very reactive. So, like they're gonna answer your call and probably give you prompt service, but they're not gonna be proactive versus um, you know, somebody like us that's trying to anticipate what the next move is and what we need to do. They're certainly not gonna be as it's not gonna be as sort of white glove type of service as you'll get with uh a shop like ours.

Sean 18:48

Right.

Ben 18:49

Um some people don't want that, like it's kind of using your car analogy. It's like uh the Lexus versus Toyota, or you know, one of the even like Mercedes or BMW, even though I don't know that they last as long as Toyota's anyway. Um but they certainly have a reputation for like you know, like Rolex or something.

Sean 19:16

Um yeah, yeah, there's a functionality versus um versus uh experience. And so some of the stuff that we I think were helpful with another, you know, a big box place could do. Check, you know, calling people once a quarter if it's a if it's a relatively reasonable number of people that they're taking care of, they've got a massive company behind them to do other things. Um and so they don't have to worry about making their staff gets paid or keeping up with um, you know, they're gonna be a limit on what they can do. So that reduces the they don't have to make decisions so much on the investment allocation. That's usually gonna be made at a program level, not an individual advisor level. So if you're trying to customize a certain stock you own that has capital gains, that you're trying to make sure you manage your tax exposure. I mean, we we can do that in a heartbeat. It's gonna be, I think, a little less likely at that uh kind of the big brand name uh discount place.

Ben 20:16

Uh or even like what about social security? Because you know, I'm I'm helping uh client, a couple of clients, even this week with Social Security timing. We referred them to a Medicare um specialist as well. So like I'm not sure how robust their retirement planning or like when to turn on income streams, pensions, you know, if annuities are part of the plan. Like, I don't know how deep they get into the weeds there either.

Sean 20:43

Yeah, my guess it's limited because they're they don't want to be on the hook for a vast number of advisors giving advice on things that unless they verify the training, it's sort of the the nature of the beast, those larger organizations are gonna tend to be uh pretty narrowly focused, especially uh on investments, because that's how they get paid, and and that's the nature of the investments is of the of those firms is to put assets on the platform. And to some degree, that's how we get compensated as well, but we're able to to be a little more uh a lot more uh global in how we look at someone's situation because we're we're not looking to work with hundreds and hundreds of families.

Ben 21:22

Um definitely more cookie cutter, right? So you're saying they're way more cookie cutter, you get kind of put in the the growth, the growth uh investment model, and that's kind of you know, you might hear from them once a year.

Sean 21:36

Yeah, and and and again, depending on the size of the account, I've heard good things or read good things about certain some of those programs that you know, if you have more money, that the the check in every three months or whatever can be, you know, do you know have you a person? And again, it it's probably the minority, but I I think it's a very limited scope of what's being addressed. Um, I'm gonna tick off. Some of the ways that I can name that people pay for investments andor planning, and maybe we can just touch on how we think about how we explain this stuff to people. Um, because it while we want to give as much information as possible, I think we also pride ourselves on not overwhelming and confusing the heck out of people unless they're sort of asking for it and really want to. So we've got, you know, in the old days you used to pay and sometimes still with transaction costs or commissions on trades. You've got um uh markups or spreads on fixed income or insurance where there's there's a you know, you can buy it at the back office buys it for 99 and we sell it for 102. So that's a markup. You don't see an external expressed cost, but it's in there. Um, kind of much like a grocery store would make money. You know, you don't pay a fee for your milk, but certainly they're paying, you know, 50 cents for it and selling it for a dollar or whatever, however much milk costs. Um, you've got the asset-based charge, like a percentage of your assets for an advisor. So if you pay us 1% a year as an example, um, but but the internal cost of the investments are are also based on the value of the account. So we use extremely low-cost internal investments. So you know, if we're going to look for nails, as long as it's a suitable quality nail, we're looking for the lowest cost nail, because that's we don't think we, you know, in that particular arena, we don't think that's where it's going to drive the value. Uh, you have advisors now that will charge a flat consulting fee instead of an uh instead of a percentage of assets. So you know it's gonna be$7,000 a year, whether you have zero dollars with them or$100,000, a million, or$10 million. It's a flat dollar amount. Um back in the old days, almost 20 years ago, when I worked at Edward Jones, and I'm sure there's still firms like this, there were these uh contests where you could go on reward trips. And you know, if you hit certain categories in growing your business, you got to go on those. And I think that's less common than it used to be, but you know, people have these incentives that uh don't really align perfectly with the client's best interest. So whether that's you know, selling a certain type of insurance product or you know, uh getting a certain amount of people to open checking accounts if they work for an investment advisory firm attached to a large bank. Um all kinds of incentives for making sure people keep their job or get get a more economic incentive or rewards out of their practice if they work for someone else. Uh luckily we don't have those because we're completely independent. So we have almost zero that I can think of, none that I can think of, uh influence on the back end to drive our behavior or our recommendations. Uh, you're gonna have account, small account fees, you know, IRA fees are 40 bucks here or there, or$25 for the Roth conversion. Normally those don't add up, but you know, those do exist. Um, where you, if you have, if you get advice that ends up not working out, like get out of the market, it's gonna crash, or the market goes up a lot, that's an opportunity cost. You don't really pay it directly, but indirectly, it can be honestly, that's some of the most significant costs we see some people incurring, really, which is kind of disappointing. Um, whether that's because of their decisions or their advisors.

Ben 25:24

Um, the behavioral costs. I like that one that you're bringing that up. That's a good one.

Sean 25:29

The behavioral stuff's well studied, but it's really squishy because it's hard to, it's not a hard dollar amount in your account, right? Um, some people, some advisors say, I get paid in two or three ways. And one of those ways is one of the ways you pay me is referrals. I don't know that we'd ever like that uh that line of of uh telling people that's how we get paid. Hopefully, as a natural, I mean not hopefully, it happens over the course of a career. You do good work for people and people you know, hear their family, friends, whoever has a need, they they make the introduction and we're grateful for that. Um, but that's not a cost of doing business, it's it shouldn't be something that's demanded or expected out of a client. We should earn that, and when it happens, it's wonderful. But we've never uh really asked for that, and I don't think we would ever plan to.

Ben 26:17

Um, did you hear on the most recent Kitsus and Carl, where Carl tried that? Like, I get paid in two ways, and the guy says, No, actually, you pay me one way, and I can pay somebody else that one way if you ask me that again. So nice, yeah. That's probably how I'd respond.

Sean 26:35

Like, no, yeah, like if those I'll pay extra if that's one of the ways I have to pay you, just just raise my price. I don't I don't want to have to uh I'm notorious for not liking the uh not keeping track of like the the cards or the clubs, the the grocery store. Everybody's got a club and wants your points. And no, I don't want your free sub. As always, there's a good signfill when Elaine's trying to get a free free submarine by getting 24.

Ben 27:00

I don't even like yeah, I don't even like filling out the the uh feedback requests. Like everybody has the feedback, give us feedback, tell us what we're doing. We we like serving you. It's like, oh my god. Yeah, why don't you just see if I'm annoyed?

Sean 27:16

Watch my face.

Ben 27:17

No, I came back from I liked it.

Sean 27:20

Survey. Can you fill out our survey? No. Um and then you know, your your trust and your attention are ways you indirectly pay your advisors, and and honestly, when we think about the people we've worked with for a long time, that's really the most uh kind of the most valuable thing anyone can can give us, if you will, is their trust. And of course, there's some level of attention, and you as you develop that relationship, that's important. And so when we're trying to help someone with a thorough plan, um why don't you talk through sort of how it's you know, if we don't get the appropriate attention and response, how does that affect our planning?

Ben 27:56

Well, the the output's only going to be as good as the input, right? So um if it's hard to it's hard to get quality info, if it's hard to get quality info, I can't really spit out a plan that means much. And I'll tell you, it's funny, we were just talking about this at some point today. Um and it typically comes around people's budget or their their monthly cash flow, they they don't know um what they're spending, and so yeah, you have to be engaged in the process to get anything out of it, and I know it costs time to do that, and I think that's one of our biggest value propositions is that we're saving you so much time, stress, worry, that type of deal. But if you're not helping me help you, so please help me help you.

Sean 28:45

Yeah, the the how much do you spend seems like a simple question, and a lot of people know vaguely, but um it's it's not it's ideal if people know exactly what they're spending on an annual basis, you know, monthly fixed stuff that's easy to that. We know everyone can kind of name off the top of their head, plus the the one-offs or the unexpected, like, oh, my credit card bill was higher because Christmas was in December. That must that was a surprise. Well, luckily, our our clients usually are past the point of being surprised that they had, or if they are, they've got enough buffer in their their what their income is versus their outgo that they've kind of got that correct that code. Um, but even when people don't have it perfectly, and this happens a lot in retirement planning, we can we can usually um uh bracket in what we call that, triangulate, sort of narrow down what the range of what you're spending is.

Ben 29:44

But that's we use proxies kind of like you know, whatever your net income is while you're working, if that's you know, probably what you're living on, roughly.

Sean 29:51

Yeah, or or less if if all's going well. But if you're yeah, if you have 10,000 a month net from from either one or two incomes in the household, you're probably sitting and you're accumulating money, you're not going to debt. You must be spending that or less over time on average, or that wouldn't work, right? So we can we can whittle in and and help you uh fine-tune the plan. Um, but that attention, that time, and and answering the questions and helping us, um, you know, we do our best not to be condescending or uh any noser than we have to be. Hopefully, people are comfortable with us when we work together to share sort of what's what's on their mind and what they're spending and what could change, what won't change, what bugs them, what doesn't bug them. That kind of attention and trust that that naturally evolves when you uh when when it's done well, when it's a good two-way relationship, that is, you know, it of course we can't use that to pay our bills, so we do charge an advisory fee, but that sort of is a natural follow-on, you know, for for a good advisor. I think that when you hire someone, you're happy, you're happy that you're paying them, right? You're happy when they have success, you're happy that they can send their kids to college or buy a car or play golf. I mean, gosh, you gotta play golf. Um how what what what things are called, how they're charged is interesting. I think uh fees are what we usually call you know the advisory cost or investment cost. But um it's always been interesting to me that uh one segment of our profession that that uh wants more transparent and uh direct compensation from advisor, from client to advisor, they they wear this badge of honor called fee only, which just means they're you're not paid by some other back-end way, other commissions or other ways that are not from the client. So it's a very admirable uh fiduciary approach that look, you're the only one that pays me. I don't take outside commissions, I don't take any back-end incentive trips, I don't, and um, while technically we cannot call ourselves that, um I guess Ben, you could as an individual, but if there's a lot of weird regulations on it that we're attached to a firm that could, I have the licenses where I can earn commissions. So, anyways, technically I'm not fee only, but the idea is 99% of my revenue is directly from the clients I work with.

Ben 32:21

But well, not here fee only, I hear we can't help you do certain stuff.

Sean 32:26

Well, yeah, that's the downside. If if you need life insurance or long-term care insurance, those are not really built to not have a commission, so it does complicate things a little bit. But I think the sentiment is great, but the term fee only as a as a badge of honor is ironic to me because fee only sounds like that's all I care about. It's it's only fees, like that's the only thing that matters, and that's not what they mean. It's not what that term means, but it's an ironic twist of how we use words.

Ben 32:53

Yeah, but there are some radicals I would say about it. I mean, I kind of liken that I've I get into political discussions too much, but I'm just gonna say it. I I think about this much like I do the climate change folks, where they're so dug in that climate change is a result directly of the United States human action. Like, no concept of this world being millions of years old, and that you know, like kind of like homeostasis happens that goes up, it goes down. We've had ice ages. Like, I'm not sure that I'm ready to like kill the United States economy over this, but much like the climate warriors that are out there, the fee-only people are digging in and they are gonna down the hill for sure.

Sean 33:41

I read a I read a post in one of the groups I followed today about um an anonymous member said um anonymous poster, hey, I got this insurance agent who's wanting to do a um a life insurance uh policy and then an annuity to fund to generate income to fund this life insurance policy. The life insurance policy would be in an ILIT, L I I L I T. Didn't didn't define what that is, but I L I T is an irrevocable life insurance trust, which would only be used for estate tax planning. So this should be someone with a lot of money. It didn't say that directly, but the responses were very interesting because they it appeared to me they didn't know what an islet is, and therefore should have no business um answering the question. And I kind of I made a comment that hey, this is probably not the right form for that because it depends on the estate, because they're focused on the commission on the insurance, the commission on the annuity, which again may be maybe egregious. I don't know. But I don't know what the number is, but if you have a hundred million dollar estate and you're gonna be subject to 40% estate taxes, again, I'm making these numbers up, but the commission on you know a$2 million life insurance policy is insignificant compared to if you can remove that from the estate and save, you know, 40% on a big chunk of$100 million. It's so again, it's it's and the commission might be huge, but compared to what? And life insurance and that kind of estate planning could remove so it that's something that we don't do that on a daily basis, but I know it exists, and people are happy to say everything they know about something that has nothing to do with or completely misses the point of what the what the real focus of the matter should be. And that's where I think you know costs and fees are very important. Ben and I are not people that like to spend money uh needlessly or advocate it, but um you know, cost is the only thing that matters only in the absence of value. What do you like to spend money on?

Ben 35:54

Well, by now hopefully people kind of know it. I'm I'm a golfer. I don't spend money on uh on the kiddos or on the wife.

Sean 36:04

So it's like it's like you ignore them almost.

Ben 36:09

Yeah.

Sean 36:11

Yeah, I like spending money on eating out any conveniences. Uh I like the magic of Uber, which is one one reason I could go without a car or share a car for four plus months with my with my 16-year-old.

Ben 36:22

Uh I wish I could do that. I don't have Uber anymore.

Sean 36:26

It's too bad. There's no way you can ever get it back. That's true. Um, I like, you know, I like now having to wait in line. So if there's a way to spend a little bit more money to save me time, I'm happy to do that. I don't like spending money on cars, despite what I did today. Um, so you know, that's where I think we all have to determine what's most important to us, and and each of us is free to decide how to get professional help. But um, and again, it's hard to determine who's who's the right professional help. But um, you know, as much as we'd like to work with everyone, we can't. But if you if you come across a situation where you're trying to figure out what you're paying and if it's worth it, uh, we're happy to give you our two cents. We can charge a consulting fee if we need to, uh, but that will be nominal relative to the peace of mind that you're getting a good good advice, or we can at least point out some things or interpret what some another advisor has told you to tell you if we think it's straightforward or not. Because I read what each of us write, and sometimes I'm thinking, man, we're confusing. So I get that it may not be um, or if someone tells you the whole truth and nothing but the truth. If you have all this info, you don't know what to compare it to, right? So much like with a doctor's prescription or some some drug, like, is this good? I don't know. So we're happy to provide a professional second opinion because we love this stuff.

Ben 37:52

Yeah, good.

Sean 37:54

Just don't ask me to go to Home Depot.

Ben 37:57

Yeah, me too. Me too.

Sean 38:00

Anything else that we want to touch on?

Ben 38:02

Um I can't think of anything else. Um, you know, again, I love the quote. I don't know remember where it's from, but the the cost is only an issue in the absence of value is just a beautiful quote. Um if you like what you're getting, it it almost doesn't matter. And also to what is the cost of feeling comfort and security with your situation? And I'm not saying that you should just get ripped off, but you know, compared to what matters.

Sean 38:36

Um yeah, sometimes people will tell us we can probably charge a little bit more than we do charge, but you know, we're not trying to be the cheapest. But I also, if if someone asks around and says, hey, you know, our guy or our team, they charge us this. And a lot of times, compared to some of the colleagues that I'm aware of, you know, we're gonna it's gonna be a pleasant surprise that we charge a little bit less. That's not what we're shooting for. We're not promoting that, we're not trying to attract people based on where the cheapest. But you know, we also don't have to, it's this this profession provides us a good living, and so it's great work. We get to have flexibility in how how and when we work with people. So um, again, if we can be of help, we're happy to. One of my favorite movies ever, uh, Hoosiers, with um Gene Hackman plays the coach, Norman Dale. And when the best player in this town that he goes to coach, he's not sure if he's gonna play. And uh Gene Hackman's characters goes out to his farm, and you know, he's kind of an old school hard-nosed coach, and he says, You gotta do what's best for you. And then he he says, I don't care if you play on the team or not, because he wants them only if he wants to play on the team. So that's uh a very inelegant way of saying, you know, we're our practice is um in good shape. We're happy to help our existing clients. So if we can help you out and answer questions, be happy to. If not, um thanks for listening and watching.

Ben 40:05

Cool. Good to talk, man. See ya.

Sean 40:07

All right, see ya.