The Influential Advisor

092: From Fragile to Anti-Fragile: How to Become a Better Investor in Retirement

• Paul G. McManus

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Joseph Falbo has spent 30 years helping people navigate retirement, from the 1999 tech boom through COVID and beyond. In this episode, we explore his concept of the "functional retirement advisor" and why modern retirement demands a completely different approach than what worked for previous generations.

About Joseph Falbo

Joseph is the founder of Falbo Wealth and Amazon #1 bestselling author of Retirement Success: Hiring Your Functional Retirement Advisor. After starting his career at a penny stock firm (think Wolf of Wall Street), he committed to doing things the right way, completing Merrill Lynch's two-year training program before spending 14 years in the corporate world. He launched his own practice in 2009.

Key Topics Covered

The conversation opens with Joseph's investor framework: fragile, resilient, and anti-fragile investors. Most people think they're good investors until an extended bear market hits during retirement—when they're pulling money out rather than adding to it.

Joseph explains why he created the term "functional retirement advisor," drawing parallels to functional medicine doctors who take a comprehensive approach rather than writing quick prescriptions. A functional advisor starts with a plan, not a product, and uses exercises like George Kinder's three questions to help clients define what retirement success actually means to them.

The episode covers critical shifts in modern retirement: lifespans extending from 15-year to 30-year retirements, the disappearance of pensions, inflation eating away at purchasing power, and why 401(k)s shifted all the risk onto individuals without providing financial education.

Joseph shares client stories including a couple who started working with him at 62 with all their money in the bank, and how the planning process helped them retire successfully. He also discusses the dangers of being laser-focused on products (like tax-deferred REITs) without first understanding the full financial picture.

Connect with Joseph Falbo

Website: https://falbowealth.com/retirementsuccessbook/

LinkedIn: https://www.linkedin.com/in/joseph-falbo-cfp/

Claim your free audiobook copy at: www.theshortbookformula.com

Support the show

SPEAKER_01:

Welcome to the Influential Advisor Podcast. I'm your host, Paul G. McManus. Today I'm excited to introduce you to Joe Falbo, Amazon number one best selling author of retirement success, hiring your functional retirement advisor. Joe has been helping people navigate retirement for over thirty years. But what makes Joe different is his approach. He doesn't just manage portfolios, he transforms fragile investors, people who panic when markets drop, into anti-fragile investors who stay confident and even thrive during uncertain times. In his book, Joe reveals why modern retirement is nothing like your parents' generation and why most people are still planning without dated rules. He'll show you what to look for in a financial advisor and how the right plan can turn retirement anxiety into retirement success. Whether you're approaching retirement or already there, Joe's insights will change how you think about your financial future.

SPEAKER_02:

Joe, welcome to the podcast. We're glad to have you here today. I'm excited to be here. First thing, Joe, tell us about your background and why you do what you do.

SPEAKER_00:

Sure. So when I was little, I loved the board game, the bottom line. I don't know if you ever heard of it. It's like a monopoly game. It was about investing and how money relates to people. And I just I loved it. I was really good at it. So when I graduated from St. John's back in 1995, I wanted to be in the financial world. And I wound up starting, I don't really talk about this that much, but I wound up starting at a penny stock firm, right? Like if you've seen The Wolf of Wall Street, Boiler Room. Investor Center? Yeah, exactly. Exactly. I realized it was a scam. And once I did that, I did want to do it the right way. I wanted it to be like a win-win to help people. I looked around and I found Merrill Lynch had a training program for financial advisors, a two-year training program. I went to that, I graduated from that. I was a financial advisor in the corporate world, Wells Fargo, Wachovia, Merrill Lynch for about 14 years. And I started my own business, Falbo Wealth, in 2009. And I can't believe how fast time goes, but I've helped probably thousands of people to and through retirement. I'm doing this now 30 years. It's crazy. I've seen it all, right? I've seen all market conditions, the 1999 tech boom, the crash afterwards, the 2008 Great Recession, which rivaled the Great Depression, COVID, inflation. And the funny thing is, all these things going on, all these different markets and economies, people still have to retire, right? They can't be like, okay, I don't want to do this anymore. They still have to retire. They're still going to go through their life transitions. In retirement, people, most people don't know this, but people go through seven to eight distinct life transitions that takes planning and guidance to go through. So our goal is to help people thrive during the good times and thrive even during the bad times, too, and to live their life on purpose through planning, not trying to market time. I've seen people come to me after retirement, the stress melts off their face. It's a beautiful thing to see. I've seen people become snowbirds living up here, living down in Florida. I've helped people to live the same life they're living in retirement, living afterwards. Also help people to become a good investor. We talk about like fragile investors, resilient investors, and anti-fragile investors. We want to get them from fragile to anti-fragile as quick as possible.

SPEAKER_02:

Yeah. Paul would probably agree. That's something that I could use help with, moving from the fragile investor to the anti-fragile one.

SPEAKER_00:

It's an important thing, it's an important thing because most people that come to see me think they're a good investor. But most people are fragile investors, they just don't know it yet. Everybody thinks that they're a good investor until a big extended bear market comes and you're in retirement, right? So all of a sudden, all that goes out the window, just like Mike Tyson was talking about. So we're like your cornerman. We're coaching you through, we're helping you, we're helping you be set up before that happens. And again, it's not about timing, it's about planning. And we want to get you from being a fragile investor to a resilient investor, which means you're not making mistakes many people out there are making, and then get you to an anti-fragile investor, which means even during bad times, you're thriving, you're making some black belt moves so that you're actually putting yourself, propelling yourself to be in a better position once things ultimately do get better.

SPEAKER_01:

Can you underscore the importance of that, especially during your retirement years as opposed to pre-retirement? And I'll just paint a little context here. So Gabe and I, we have these conversations all the time. Before Gabe, he's still relatively young. And so he has time to make up, and it's not quite as important in these years. But something that you said was that when you're in retirement years, it's that much more impactful. Can you just share a little bit why it matters so much in retirement?

SPEAKER_00:

A great way. First of all, Gabe, you're very brave because most people don't even admit that they're fragile investments. Oh no, I'm gonna know I wouldn't do it. And then all of a sudden, when the chips are down, they're doing it. I would say when you're younger, a lot of people will like ultimately they'll do the right thing and they'll add to it because you're in accumulation mode. So they start realizing, oh wow, this is actually what I tell young people is like this is like the greatest thing that could happen for you because you don't have that much money in the market. Keep adding to it, you're in accumulation. This is everything's on sale, but when you're in retirement, it's different. Like a lot of times, especially in 21st century retirement, people are going to need their money to start living off of it. So now you're pulling instead of putting towards it, you're pulling off of it a whole different ball game. You're in the distribution phase, accumulation phase, a lot easier to do. Distribution phase, not so much.

SPEAKER_02:

Joe, you're the author of a best-selling book, and you've just recently released your second edition. Tell us about the inspiration behind writing that book and then why the second edition now?

SPEAKER_00:

I love this question because what got me started was back in 2010. So it took me a while to put it all together. But back in 2010, there was a the Department of Labor came out with this thing called the fiduciary rule, which is you hear about it all the time now. And that really got me going because can you imagine that it's gotten so bad that the government has to mandate advisors to put their clients before their own interest? What do you need to tell me? Like people aren't born that way, that they're not automatically just doing it. I've seen the Wolf of Wall Street. I know about painting centers. This is probably a good thing. It doesn't even have to be that, though. That's the funny thing, right? It doesn't even have to be the Wolf of Wall Street, real bad guys. It's amazing to me, it's incredulous to me. And it really got me going with the book because I felt like I was living in a bizarre world. So there's all these advisors out there that they don't they must not believe in karma, right? They're gonna do the wrong thing by people eventually eventually it's got to come back and get you. Then let's top it off. Who was the biggest Ponzi scheme you've ever heard of in your lifetime? Bernie Madoff. He ran the biggest Ponzi scheme in our lifetimes, and he really destroyed lives. And he was labeled, obviously, he didn't act like a fiduciary, but he was labeled a fiduciary, technically.

SPEAKER_02:

It's actually scary to think about that you could walk in and think you have a fiduciary and you're getting wrapped up in a Ponzi scheme.

SPEAKER_00:

That's pretty obviously that's like the worst case scenario, right? That just showed me, like, wow, this is crazy. They said this guy was a fiduciary. Meanwhile, he's ripping people off left and right. I was really burning to show people what a real advisor looks like. I felt like I encompassed a lot of that. So I wanted to say, hey, this is what a real advisor looks like. And when you have one of the key things of the books, it helps you compare if you have a current advisor to what a real advisor looks like, or if you're in the market for one, you get to know what a real advisor looks like. And at the same time, it gives you basically everything you need to know about retirement as well. And you're not gonna have to wonder what a real advisor looks like. To me, that was the biggest reason why I wrote the book.

SPEAKER_01:

Give me some examples. What does a real advisor look like? Because I hear the word fiduciary thrown out all the time, but when you say that Ernie Madoff was a fiduciary, that gives me pause. Okay, maybe that's not the best mental checklist. Help expand upon that. What should people be looking for when it comes to choosing the right advisor for them?

SPEAKER_00:

Yeah, so I think there's a lot of red flags we talk about, but one of the biggest things I tell people is look for somebody that's gonna start with a plan. That is a huge green flag. They're gonna get to know you as a person, understand your goals, your needs, your wants, and then be realistic about how they could help you. Then I like Bernie Mirdoff was guaranteeing, I think it was like 16% a year. I'm a U.S. Treasury was paying at the time probably one and a half, two, two or three percent. So, like, where are you getting that number from? Realistic solutions and starting with a plan is a big thing to do.

SPEAKER_02:

Joe, in the book you talk about, there's this difference between a functional retirement advisors compared to a traditional one. Could you tell us about the differences? What makes it a functional retirement advisor?

SPEAKER_00:

I made up the phrase functional retirement advisor, and I got it from a functional medicine doctor. So I'll use the analogy. You go to a regular MD. Do you could go to a regular MD or you go to a functional retirement advisor? And that's where I came up with the name. You go to the regular MD, you're sitting there for two hours, it's waiting for him, and you're like, Oh, my appointment was at one. Why am I here at three o'clock still? Then you get in there and it's a 15-minute appointment, it's rushed. Then you write your prescription. Here you go, take this, see you later. Right. Yeah, you don't want that. So a functional medicine doctor is a much more deep dive into your lifestyle. What are you eating? Sometimes they'll ask you everything you're putting into your mouth, your habits. They do some extra blood testing, they're looking for gene mutations. It's a real comprehensive approach, looking for your exercise habits. And that's what an FRA does. FRA starts with a plan, they're not starting with a product right away. They get to know your life, your goals, your needs, what your wants are. And then by the way, they have exercises to help you elicit this information too. And then they find out where you are now and have a plan on how to get you to where you want to be. Our practice, we put a lot of time and effort into the upfront part of the financial planning with the new client. And clients are basically blown away. Like they're answering the questions and the exercises, and they say, I never did this before with a financial advisor. Really fun. It's actually fulfilling stuff.

SPEAKER_01:

How did you come up with this? It just the tying between the functional medicine and then the functional advisor. What inspired that?

SPEAKER_00:

So I actually, it was almost my own little health journey for me, where I had some issues I was dealing with, and I would go to medicine doctors. And for example, I had like sinus infections all the time. And I would go to regular MDs and they'd be like, hey, here's a prescription. I knew nothing better. So I just took my antibiotics. Over time, I was like, this stuff isn't working, this is bad for me. So I went a different route, I went more holistic route. I found a functional medicine doctor and acupuncturist, and it was basically dairy. I have a bad allergy to dairy. So I did like seven years of antibiotics where if I went to somebody, it was just it was a dairy allergy. So it got me comparing the two with the advisors. Interesting.

SPEAKER_02:

Joe, in the book, you talk about George Kinder's three questions. And I was thinking for Paul, could you walk us through that? Because I thought it was it was a fascinating thought exercise to be able to look at things this way.

SPEAKER_00:

Sure. I love the three questions. I have many mentors in this business. I'm doing it third year. So I have a lot of great mentors. And George Kinder is one of my mentors. He was called the father of financial life planning. And he had a thorough, like comprehensive course in school that I went through, I graduated from. And I just feel like these three questions are a great foundation for the plan. I always say if people ask me, hey, how do you achieve retirement success? The first step to achieving retirement success is actually to define what retirement success means to you. Start with the end in mind type of thing. And I think these three questions that you're asking me about, George Kinder's three questions, do just that. So first question is if you had enough money coming in every month, right? Just imagine that you have enough money coming in a month. How would you live your life? What would you be doing? Would you be traveling? Would you be with your family more? Would you buy houses different places? What kind of life are you? Would you be going back to school for something? Who would you become? Gee, how would you answer that question?

SPEAKER_02:

I think along those lines, that like the ability to not have to stress out over experiences that you can provide for your family traveling and just being able to do the things that sometimes we have to say no to be able to not say no as often and to be able to say yes to the good things in life for you and for your loved ones. I think that sounds so fantastic. Something it's fun dreaming about it when you put it like that.

SPEAKER_00:

Wonderful thing to start thinking about. And if you take five to ten minutes to write it out, it really starts getting interesting because you start writing things out. And when you write things out, you usually start accomplishing them. And then it's like a funnel. That's question one. So that's you can do anything you want in your life. Now you're question two, you're back to you. You're back to yourself, your current financial situation, and you go to the doctor, and the doctor says, Hey, by the way, you got five to ten years to live. Good news is you won't feel sick. The other good news is I think to take this as good news, you won't know when it's going to happen between five to ten years, but five to ten years or you're gone. So this just took it from infinity to like a finite time. We got five to ten years to live on this earth. So now, how are you living? What are you doing? Who are you spending your time? Who's who are you spending the most time with? What are you becoming? What do you find is a common response that you get? A pattern that you're doing. I I find that a lot of times you find what's really important to people by seeing what they answered in question one.

SPEAKER_01:

Yeah.

SPEAKER_00:

And then what they bring in from question one to question two.

SPEAKER_01:

Yeah.

SPEAKER_00:

So, like now, okay, this is the stuff that's most important to these people. Because question one, they're saying, Hey, listen, I really want to spend the most of my time with my family, I want to help them, I want to do this. They still want to do that over the, you know, they want to make sure they're doing that because who are you spending your time with? What are you spending your time daily doing?

SPEAKER_02:

Yeah. I felt like when you said it with that time frame in mind, then it just made everything more important that if I want experiences with my family, well, I want to do them right away. I don't want to start right.

SPEAKER_00:

Because you have to realize too, like most people are putting stuff off, right? They've saving, saving, which is great, but they're not going on the vacations they want to do. Then I I want to go back to school to become this. They're not doing that. There, I had a client that actually went back to school to become a doctor, believe it. He wasn't a doctor, is all that, and he wanted to go back to so he went back and did that. What are you not doing? That would take me to question three, which is the final question, is his okay, you go back to the doctor and they say, Hey, listen, you have 24 hours to live, by the way. It's not about okay, going around saying, What am I gonna do? I'm gonna party like crazy for these next 24 hours. It's more, okay, I got cut short. This I thought I was gonna live for this. I even thought I had five, 10 years, but you know what? Tonight's my last 24 hours. So, what didn't you get to do in your life? Or what didn't you get to become? What's on your bucket list? These questions, I try to do it annually for myself because it's like exercise, right? If you do it more, you get better at answering the question, you get better at realizing what's important to you. Like at the first the first time you do it, you you might, a lot of people, especially men, with oh, we're doing everything. And I I feel that way too. Oh, I'm doing everything I can to do. Yes, in a lot of ways, you probably are, which is great. But if you start really looking at this more often and start answering it and start thinking about it more and putting pen to paper, you start realizing, oh wow. And your answers are supposed to motivate you. No, they're supposed to get you excited, and that takes a little time to get to that point. The first time you answer them, you're not going to get so motivated by it unless you're really good at doing that kind of stuff. So it's like you want to answer, make it motivating, makes you want to work towards something.

SPEAKER_02:

How often, Joe, do you put yourself through that exercise and answering?

SPEAKER_00:

I try every year at the end of the year, I basically do my business planning, and this is part of it. This is also my personal life planning and my business planning. This is part of it so I answer these three questions every year. And we have to realize too, life changes. So not only getting better at answering the questions, your life changes, your perspective changes. Like for me, I'm 51, I have a four-year-old and a two-year-old. So think about that for a second. So my life was totally different before, and now my perspective's total totally changed. Is your life not totally changed once you have is that a life transition or what absolutely it is. Your whole perspective, the world changes. So that happens to everybody, not just kids. It's there's all different things people go through that that you wind up having a different perspective as you go through life.

SPEAKER_01:

Yeah. Do you do these questions and you're planning with couples? And I would imagine there's probably some interesting conversations that happen as a result.

SPEAKER_00:

I can't tell you how many people will go through our like first interview and stuff with people, and then we start going through the three questions when they'll look at each other and say, Well, I didn't know that was important to you. You know, and hey, listen, I'm not a shrink, I'm not a psychiatrist. This is just more, but it's great. It's great because when your advisor knows this stuff and the husband and wife both know it about each other, too. This is a great foundation for a plan.

SPEAKER_02:

Yeah, that would bring a lot of clarity for couples, and so that at least they know which directions they want to head and can hopefully make it align a little bit more as they go down the road. Correct. Correct. Joe, you mentioned helping over the course of your career so many people get to retirement and beyond that goal. Tell us about the changes that you've seen. So, what's different about when you were thinking about retiring today versus back with our parents and grandparents, which seems like it was a totally different world. Right, a different world that they were dealing with.

SPEAKER_00:

It's a totally different world, and people are still planning, like looking in the rearview mirror, looking at what their parents and grandparents' retirement was because most people we get our financial education for what our parents did or what our grandparents did. The modern retirement is a whole new world, as you mentioned. You know, for example, they're living longer. So it used to be parents or grandparents a 15-year retirement. Today it's a 30-year retirement. And today's medical science, that's if medical science doesn't get better over the next 10, 20 years. I expect it to get better. I expect people are getting living healthier lifestyles. Over time, that could be a 30, the 30 years could go to 40 or 50 years. Who knows? And we talk about cancer and heart problems. That's the main thing. If they come up with some sort of solution for that, I think it's going to be a massive. And of course, you want to make sure that's quality of life too, not just quantity of life. And the biggest challenge with longer lifespans, that's a great thing, especially if we have the quality, is everything you buy costs more each year, right? So every year, everything you buy costs more. Look at what a how around here a house cost 30 years ago. Average house was probably, I don't know, three, four hundred thousand dollars or so, I guess, around in New Jersey area. Yeah, now it's like a million bucks for a normal house. Yeah, I'm going back to 1995, right? Say uh say a car, an average car. I think the average car back then was like 15 grand. Today it's 30, 35, 40, 45 grand. I'm not talking luxury, I'm talking like a normal regular car. Yeah, and then you got the whole, hey, people worked for a company, one company for 30 years. That's the way it used to be for parents and grandparents, and they got themselves a pen, they got the gold watch and they got themselves a pension. The pension pays you from the day you retire to the day you die. And now, what did they change that with? I think back in the 70s is when Arissa made all the changes, they moved that to a 401k. So, where's all the risk when you have for your retirement to pay you from the day you retire increasing every year to the day you die? Where's all the risk? It's on us, it's now on us, it's on us, and how much financial education did they give us with that? Who said they say here's the 401k, all the risk is on you, but there's no financial education. So we have the responsibility, but no education on that. So they changed the rules on us. It shifted now from the pension company guaranteeing it to basically us. And today you wind up having to have a plan and you need to be a good investor to overcome those kind of challenges. And that's why I think most people are going to need a good advisor to help get them through it.

SPEAKER_02:

Along those lines, since you need to have that plan in place, what about for somebody like myself that maybe procrastinated, put things off? Joe, what do you say to them? If they come in and they've waited a little bit too long, they didn't start early. What's the outlook? Is it still possible to catch up and for you to help them, or what do you tell them at that point?

SPEAKER_00:

It's a great thing to say because I feel like a lot of times people come to me that way. But the fifth 50 years old is like the old moment with oh my god, I didn't do any planning, I got to start. But I heck, a lot of people come to me in their 60s. So I have the cliche answer. Best time to come to me was 10 years ago. Second best time is right now. But like I said, I have a heck of a lot of people come to me at 60s, and I've even had people come to me in their 70s. Now, I will say you're much better off if you came in earlier, but it's never too late to start and set up a plan and start working towards your goals. Because once you start acting and working towards your goals, it really starts helping. First of all, once you define your goals, what they are, and then you really start and then you start working towards them. I have clients I'm just thinking now, they were 62 years old. They came to me like 10 years ago. They had some money saved, it was all in the bank, so they weren't taking, they were afraid to take any risk. She was really scared of the markets and she wanted to keep her money safe. But once you go through the planning and the data and you show them that, hey, listen, you're safe where the market's not going up and down. However, you're getting eaten up by inflation. So inflation every year, everything costs like 3% more a year. It's not keeping up in the bank, especially after you pay taxes.

SPEAKER_03:

Right.

SPEAKER_00:

And they weren't focused on really on savings. They had good incomes, they had a large mortgage, they just redid their house, they made it beautiful the way they wanted it. Of course, their property tax went up, but they had the uh oh factor, it's time for retirement, and they started putting more money to work for them. We started getting rid of some fluff in their expenses, started adding to their accounts, adding more to their 401ks. He wanted to travel a lot, she wanted to start an online business. She was getting stressed out from going like back and forth to Manhattan for work, and she's I don't want to do it anymore. But after doing the plan, it took a little longer than they probably would have liked. But she retired at 67 years old and launched her internet business. And over time, they built up a nice sizable retirement account. They have their mortgages paid off now. He retired about 70 years old, I think, if I remember 71. If they have the part-time business is actually built up now, so it's helping them. They go on their nice trips, they help out their children, they're able to stay in the house, their beautiful house that they just redid. Transformation is possible, even if you're starting late. Again, much better if you came in earlier, but you can still do it.

SPEAKER_02:

Yeah, that's actually comforting to know that not only that they started late, but that with that intentionality of the plan, that they were able to do good things that you would want to do in retirement, like travel, and to be able to accomplish those now in their 70s, they're doing everything they want to do. Yeah, that's fantastic.

SPEAKER_00:

And they equated to actually coming to us at 62 years old, and we talk about how fun they were nervous back then. Again, they did have good incomes, they were savers, they did everything, they just they needed a lot of guidance and and needed to become good investors.

SPEAKER_02:

Joe, I want you to tell us the story of this is in the book about Frank and the 2.2 million dollar real estate story. Because sometimes people they get things stuck in their head that this is the way that they want to do it, but maybe the benefit of coming to a financial advisor and getting a different perspective.

SPEAKER_00:

Yeah. Yeah. So sometimes in our business, I'm trying to think of a nice way of saying it, but it's like bringing a horse to water. You can only bring the horse to water. So sometimes people and I blame our business, I blame our industry on this because we are laser focused on products and we're telling people, hey, about this product, that product, and they come in laser focused on products. It's in the pharmaceutical world where they're constantly flashing pharmaceutical ads for you. So they're going to the doctors asking for these pharmaceutical drugs that they've seen. The same thing with the financial products. So yeah, that that instance was something I try to show how people are laser focused on products. Like his name was Frank. He was introduced to me by an accountant that I know. When I met him, he was like carrying a prospectus. If you ever seen a I don't have a if you ever seen a prospectus, it's this thick, has all the legal ease in it. And he was in his 70s now. He had a nice piece of real estate in New Jersey that appreciated a ton of money. And he would his income, he was looking staring down at$600,000 income capital gains tax. And that's not like the profit of it. The profit was much more. That's the actual tax he was gonna have to pay. He was in a bind. He didn't want to take, he was older, he was in his 70s, he didn't want to take care of it anymore. So father time, he was taking care of it all the time. He couldn't take it and take it care of it anymore. And when he sold it, he didn't want to pay a$600,000 tax bill. Obviously, I don't blame him for that. He was laser focused on avoiding that$600,000 tax liability. He wanted to know if I had the same complex real estate investment where you can move the money to a REIT, which is a real estate investment trust. And he was at one of the big firms as a client, he had sticky notes all over these things, and he wanted to know, hey, can you do the same thing? Is this a good one? Do you have a better one for me? And my role as an advisor is slow down, right? Let's I just met you, right? I don't even know what you're trying to do. Let's look at the whole picture. This is the first date, right? Plenty of other advisors. Oh, yeah, I have that read. I could do that same thing, right? When you asked me before, what's a good advisor look like? That's what a good advisor looks like. Oh, slow down. Let's step back a couple of feet and let's look at this whole picture. Because sometimes, believe it or not, sometimes taking that tax hit and investing the difference makes more sense than deferring it. Now, I'm not saying that's definitely the case here. I didn't know any yet, but I was trying to redirect him. But all he wanted to do was talk about the complex real estate product, and well, he wanted to defer those taxes, defer the taxes. And then I even said to him, Are you sure you want to read? Have you looked at these things? I wouldn't want one of those. You need to have a plan and see all the different outcomes and probabilities. Real estate, regular real estate has been doing phenomenal over the last 15-20 years. How has REITs been doing? Let's look into that first before you just go to defer the taxes. My whole point is to slow down. That's my whole thing with those stories. Look at the whole big picture. But he was focused on one thing tax deferral.

SPEAKER_02:

Yeah. Joe Paul mentioned that if he didn't have work and he was retired, he'd probably sit and watch a little too much cable news. I wanted to ask you this is from the book you talk about it, about financial news media. Why shouldn't I just sit and watch CNBC all day long?

SPEAKER_00:

I don't think you would be, you wouldn't be American if you weren't doing that, right? I will tell you from my experience, financial news is not your friend. You have to look at their goals versus your goals. Their goals is viewership, clicks, eyeballs. That's how they make their money, right? That's how they sell their ads versus enduring principles of long-term financial planning.

SPEAKER_03:

Yeah.

SPEAKER_00:

Which, by the way, is boring and it's not gonna, it's not gonna sell ads continuously anyway. You're not gonna be able to put that on every day and be like, oh, this is so interesting. So you won't be able to sell it continuously. I remember people panicking around COVID, which obviously that was a scary time, it was something which was thrown on us and we didn't know anything about it. Um, people would call me up and say, This time is different, this is a deadly disease, this time is different, and the news was not helping me out at all because that's all they were saying. It's crazy, but they were laugh, they even had a COVID death counter in the corner of the screen to scare the heck out of everybody. That's how you get eyeballs. That's how you say you get eyeballs. That worked. That is good.

SPEAKER_02:

I feel my finger going over the sell button just thinking about it.

SPEAKER_00:

Fear really sells really good. So people that didn't panic during that ultimately worked out really well. During 2008, one of the worst crashes in our lifetime, people would come in with a beautifully diversified portfolio suited to their long-term needs and wants of their plan, especially the newer people call me with CNBC buzzwords. Oh, it's a global panic, the bond market has frozen. This time is different. That's the investor death. I've heard you say this a few times. This time that's different.

SPEAKER_02:

Right.

SPEAKER_00:

That's the song of the death march for the investor. It's the fragile investor's death song right there.

SPEAKER_01:

In my case, I so going back to an earlier what we're talking about earlier where Gabe, I think he's driven by fear and greed, and he makes investment decisions accordingly. Whereas I have a nice balanced portfolio. Um for the most I have an advisor. Um I just delegate that decision over because I realize in my case, if I was in charge of this, I would be so tempted just to put all my money in Tesla and just believe that I'm still buy AI stocks and just forget about it right now. That's my natural inclination. I know my strengths, my weaknesses, and so on. I have an advisor, I just delegate that decision making. Talking about when it comes to finding the right advisor, just that role of I don't know if the word is behavioral coaching or delegation or some form of that. Because I because I know that's a powerful reason to have not just an advisor, but an advisor that you trust and who you know has your best interests at heart.

SPEAKER_02:

Which and in the book you talk about, Joe, that this can actually add 3% net to returns annually. So can you tell us how does that work?

SPEAKER_00:

That's a Vanguard study, Vanguard who loves advisors. That's not my claim, it's an interesting study. I have it, it's in the book, but you could look it up. It's a Vanguard study, it's claiming that 3%. Paul, you hit the nail on the head. Investment behavioral coaching is the main value, I believe, that advisors do once you're doing the planning, because obviously it's the planning, rebalancing, going through life transitions, just somebody helping you, guiding. But really taking the emotions out of investing is key because human nature constantly wants to blow it up on us. Like I was mentioning before, like people come in, I just want to buy AI stocks. Why not? That's all that's going up.

SPEAKER_01:

Exactly.

SPEAKER_00:

The video that sounds like 1999 to me. I lived it. I helped people through it. So people would come in again with their beautifully diversified portfolios. They're on goal to their plans, and they'd be like, I want to put everything in Mundar Net Net. That was like one of the funds back there, which was up like 85% a year for a year or two. It's really helping people not mess up their whole plan, which human nature wants to mess up so bad. It does. You wouldn't be human if you didn't have this. So it's not like people are stupid or dumb. It's just we're emotional creatures. And especially if things last for a long time, and it either happens while markets are going up, which we're talking about like crazy, or during really bad, prolonged crashes. That's the big things. I had a client during COVID. We just did a whole planning piece. We had everything set up, we had a diversified portfolio, and they just retired. I think it was like February of 2020, and bam, I think March of 2020 happened, and that 1.5 million was like 900,000 or a million bucks during COVID. So obviously, thank God we had a plan. Thank God we had a backup plan for when that happened. And I had to remind them about that. I helped them stick to the plan. They recovered quickly. They were prepared for it with the plan, not market timing, it obviously it was down, but but we had some tactics for when the bear market would come, not knowing when it would come. And of course, we didn't know what was going to happen the next month. And they were able to stick it out. And we got a whole lesson from COVID, which most people, I hope they realize. We got the whole investment lesson in one year, 2020. You usually usually that plays out over a couple years. Something out of no nowhere, nobody could actually predict, knocks them down drastically. People panic, they sell and made some awful decisions, and then it all came back, and nobody knew why it was going to come back, nobody knew when it was going to come back, nobody knew how it was going to come back, but it did come back. And like I said, you got the whole investment lesson in one. And the people that stuck it out and had the plan and had the advisor guiding them were much better off afterwards.

SPEAKER_02:

Joe, I think that's the perfect example because it looked like, especially if you're listening to financial news, that it's dark days ahead for a long time. And so a person thinking, I can get out now and I'll get back in much later. But if you came back so quickly and for no reason at all, like it didn't look like there was something. And so people could have missed out completely by that if they and there are plenty of people that have.

SPEAKER_01:

They don't tell you about that. Yeah, I think a lot of people face this where they they're transferring money maybe from one account to another, and then they stay out of the market because they think it's either too high now and it I don't want to buy it at this rate. I'm gonna wait for it to go down. And I know also from similar research studies, I think you cited one, is that's another reason why the research shows that people with an advisor tend to out to do better, is because they don't sit on the sidelines like a person by themselves would.

SPEAKER_00:

Yeah, correct. Happens a lot, yeah. That happens a lot. You have to realize like the market's up 75% of the time. Like at a 10 years, it's probably up seven, usually. So if you go back every 10 years, so if you're betting that it's gonna go down, you might be right, but you got a 30 30 chance that it's right. I would rather say, hey, let's not try to time this. It really works, is let's get a plan around. So even if it does go down, we're okay. That's not timing, it's just having a backup plan, plan B when the bad markets come, not if they come, because they're gonna come.

SPEAKER_01:

Yeah, one of the things that stood out to me in you releasing the new edition of your book, and congratulations becoming a selling author, yeah, was how much your clients appreciate you. And I know that because within days of publishing your second edition, you had something like 55-star reviews. And I also know how difficult that is to achieve. And so just in in talking to your clients, engaging them about your new book, what's some of the feedback reaction that you've got gone from them that either maybe reinforce something that you knew about yourself or something that you weren't quite sure of, but it was nice to hear.

SPEAKER_00:

A lot of things like you start realizing how sometimes like everybody you're doing this business over time, you start thinking, okay, but you start realizing when you talk to your clients about it and they and you start asking them for this and they and they start telling you, hey, listen, you helped me so much during this, during 2008, during 2020. You forget because because to us, it's like a it's like a surgeon, right? If they're doing surgeries all the time, get used to it. So it's the same thing in this way, where you get used to helping people through bear markets because they come so often. People don't realize it almost common, like dirt. The extended ones are a little bit longer, but every maybe five to seven years we're dealing with one. But every year the market's down 10 to 15 percent. People tell me how much they valued the planning and how we I helped them stick through it and how I educated them over time. That they're one of my favorite things when they tell me, Joe, you know what, I'm not afraid of bear markets anymore. That makes me like brighten up because it's before they really were, they would have lived their whole life that way. And then from going through our financial education, giving them financial vitamin C, doing the planning, they get it.

SPEAKER_02:

Yeah. Joe, you said earlier that sometimes clients they're surprised that you're working to really get to know them, and it's not just about the numbers. Tell us a little bit more about that, about why that's so important and what you do.

SPEAKER_00:

Initially, when I first started this business, I really thought it was about numbers, but then over time I realized it's about people. It really is, and it's fulfilling for both clients and advisors when you do it the right way. I think of all the time, I always talk about is one of the things I didn't know about this business when I first got into it is you wind up becoming friendly and close with your clients. And over time, the clients do they pass away. People might we die eventually, so they pass away and you get close to them. But it really is about people. And I think of my client that just sold a business when they first came to me. He had a nice life. They had a home in Florida, big, huge, gorgeous house in New Jersey that they loved. He had a Porsche that his wife wanted him to get rid of so bad. She kept saying, Yeah, it's worth a lot of money, but let's sell it and get the money. And he was like, No, I love my Porsche. They were getting up there in age, and most of their money was tied up in things, things that didn't produce income for them. So we either had to let go of the Florida home, or I don't particularly like telling people this, but they had they were in a position where they had to downsize, especially when they loved their house. They had family parties there, they had a beautiful yard, big, huge pool, they had a gorgeous garden that they would take care of themselves. They take care of all the flower beds every year, they put the mums in every year. They had when I first told them they had a downsize, they didn't like that, especially he didn't like that at all. But the plan really helped them realize over time, because the data starts showing them. And when you do a plan, you start realizing what you have to do. And then they started working towards their goals and acting towards the goals, and they wound up selling it. It didn't happen right away. It's not like I said, hey, but over time, it was like maybe a year and a half. They sold the house, they also sold his business, and they bought a small home right around where they were, it wasn't too far where they were already. And they tell me all the time it's one of the best moves I ever did is selling that house. I had it was too much maintenance. It was like, and now they bought a small home which they they love and they make it very homely and nice, and they say it's much less stressful. Happy ending to the story, and they kept Florida, and they kept Florida, they were able to keep Florida too, and Florida, perfect. That was part of the plan, right? Yes, yes, and we helped them through some tough decisions. It was tough to sell that house for them, but they were much happier afterwards.

SPEAKER_01:

Yeah, I think change is hard for anyone, but just what you described was that you're facilitating helping them come up with a plan that's based on their goals, their desires, what they actually want for themselves.

SPEAKER_02:

But Joe, I'd like you to give us some advice because you mentioned that about the fiduciary rule and not being really sure. For somebody that maybe is feeling a little unsure about their current advisor, what would you recommend? What should they what questions should they be asking and thinking about? And so they can determine if it's a right fit for them.

SPEAKER_00:

I would read the book. I cover this completely in the book, and I would say, I know exactly what you mean because when I go to a mechanic and they start throwing around like jargon, oh, yeah, you need a new catalytic converter. I'm like, what? Yeah, but you're not sure the advice is right. So you have to have a certain amount of trust too. So I I would say it's like the best way I could, I'll use an analogy, best way I could explain it. It's like the counterfeit bill. They don't tell you what every fake bill out there looks like. They don't tell you what every every bad one looks like. They study what a real bill looks like, what a real, what real money looks like, not the fake bills. So you could recognize what a real bill is. That's how they teach people how to identify it. And once they know how what a real one looks like, it gets easy. But it's the same thing here with the book, you're gonna be studying what a real advisor looks like. Look for an advisor that starts with a plan, not a product. Of course, the product's gonna come eventually, or strategy is gonna come eventually, but they're looking to seek to understand first. And I think just from having that kind of study, understand what a real advisor looks like first, which I go over a lot in the book. I think that'll really go a long way.

SPEAKER_02:

Yeah. Joe, tell us how listeners can get in touch with you and get a copy of your book.

SPEAKER_00:

Sure. For me, it's foulbellwealth.com. You could schedule a 15-minute phone call with me for my book. It's foulbowealth.com backslash retirement success. All we discussed here is in there, and I go more in depth in the book. You have a choice, by the way, the physical book. If you like to read a physical book, audiobook, there's a Kindle version as well. And with the book, remember, modern retirement is not your parents' or grandparents' retirement. When you read my book, you're gonna learn the rules of the 21st century. How do you win the game if you don't know the rules? That's what I will put out there. The rules have changed drastically. People don't realize it because it happened slowly over time. Yeah, and most people are going to need a good advisor because they're gonna need to be a good investor. You'll learn how to look for the five criteria laid out in my book.

SPEAKER_02:

Thanks so much for joining us today.

SPEAKER_00:

We've enjoyed it. I had a great time. I enjoyed it immensely. Thank you guys. Thanks, Jeff. Thanks, thanks, Gabe. Thanks, Paul.