SPEAKER_02 0:06

All right. Welcome to the Joe Delizi Financial Advisor Podcast. Uh today I'm I'm I'm happy to welcome Neil Brinsfield. Uh the thing I hate, Neil, is when people just read off a litany of things that don't mean anything to anybody. So the way I'm going to introduce you is how I know you. Um Neil has been in the business for, I don't know, 2007 or so, you know, almost 20 years. Who I know Neil to be is much more than just a financial advisor. This is really for my audience. Um he he is the guy that stands up in front of a thousand financial advisors and trains and coaches them on the planning system that if you're my client, you know. Uh Living Balance Sheet, he's been instrumental in the creation of a lot of the calculators that are in there. Um, very instrumental in, I would say, bringing Living Balance Sheet from what it started off in 2006 as just sort of an aggregation tool into something so much more, including the app, which um not many uh not not enough of our clients use, in my opinion. Um but it I think from my perspective, it's really uh it's been the tool that removes worry, which is really our mission. It's to remove worry from clients' lives. And it's really the tool that we've done that through. So uh thank you, Neil, for being here. Thank you for the work you've done on the Living Balance Sheet and with advisors generally.

SPEAKER_01 1:21

My pleasure. Thanks for having me, Joe.

SPEAKER_02 1:23

Yeah, I think we're gonna have some fun here. Uh I would also say Neil is a friend of mine, so I have to set aside the the friend hat for a second and be very professional here. So I don't. Although I will ask, um, you know, I'm a huge Vegas hockey fan. I know you're in Raleigh. Did you watch any of the Stanley Cup?

SPEAKER_01 1:39

Uh yeah, I watched all of it.

SPEAKER_02 1:41

You did?

SPEAKER_01 1:42

You remember how it ended, Joe?

SPEAKER_02 1:44

I I do. I do remember how it ended. I was in fact, I was at the last game at the uh Vegas Golden Knights won in Vegas where it was double overtime win, and I thought we had it in the bag.

SPEAKER_01 1:53

So um Yeah, it looked like it was going that way. I I do think we we we set a rarely set precedent in the world of hockey of like two two cities that historically have no business playing hockey being being the best in the NHL, at least at least for one season.

SPEAKER_02 2:09

So hockey's a strange one now. It's a a lot of the southern cities uh are are much you know, Tampa Bay, uh a lot of them, uh more so than Montreal, which you know, so it's it's it's where the best players want to live.

SPEAKER_01 2:21

They want to live in the warm weather.

SPEAKER_02 2:22

Uh not Carolina necessarily, but yeah, I get it. Fair enough.

SPEAKER_01 2:27

I'll give you that, Victory.

SPEAKER_02 2:29

You know, I I I wanna I want to start with this question because I I alluded to it a second ago. Really, I'm not one on mission statements. Um you know, you go to these different companies, you've done it, I've done it, Neil, and you know, people were re they'll reference a mission statement, but they can't tell you what it is. And so I don't have a mission statement, but I do have a theme, and it's just removing worry, you know, allow us to worry for you, removing worry generally. Um, and you're you know, you've you you've spoken to and dealt with many more advisors and and by extension of that, many more clients than I have. If I had to ask you, what is the number one? And I'm thinking I'm thinking of successful families now, you know, not not the 20-somethings that are just starting off, but people uh have some time, uh, you know, they they've they've done what they think is the right thing. What are they worried about? What what would you say? What do you think?

SPEAKER_01 3:19

Yeah, I love that question. I think that people almost regardless of net worth, um almost there's a limit at which maybe this statement won't always ring true. But generally speaking, I find that people anywhere on the income scale, they worry about cash flow. You know, the cash flow is always this thing that is the source of stress. When they are 20 somethings, it's like the cash flow worry is am I gonna pay my bills? And that's like the most fundamental, like bottom of the you know, pyramid of financial needs, probably. But your cash flow concerns just change, they evolve over time. They like, am I saving enough money? Am I saving enough for college? Am I saving enough for retirement? Uh, am I am I using enough cash flow to pay debt down? Like those are the worries people have. I find it keeps people awake at night. Like they're stressed out about it when they're in their working years, kind of going up the mountain trying to accumulate wealth for retirement. And then everybody worries about cash flow when it comes to whatever their perception of retirement is, or whatever that phase of their life is gonna look like. They're all worried about how they're gonna create passive income in a way that is sustainable. It lets them live free from worry, you know, to use your language. Um they're above and and insulated from like the risks, they're they're not gonna run out. Uh, they're gonna be able to deal with the unexpected events. Like, how do you create a cash flow strategy in that phase of your life that's gonna check all those boxes? It's a tough thing to do. And I just find that's what people, that's what people worry about. Um ultimately that's where all the worry goes. If if you're successful enough, then you get to upgrade to that type of worry.

SPEAKER_02 5:01

Yeah, I get what you're saying. Now there's there's gonna there's always gonna be a number, you know, with which all relative the cash flow. Yeah, it's relative.

SPEAKER_01 5:08

Um half a million, five million, or whatever it is, there's you have a lifestyle that you want to sustain and a quality of life that like means something to you and to the people you're taking care of. And there's a lot of there's a lot of forces at work to prevent you from continuing that. And that that that is the to me, that worry is the same whether you're living off of seven figures or six figures. It's all relative to a degree.

SPEAKER_02 5:32

There's a phrase that I've coined, but I've heard it from clients over and over and over. Um, it's am I gonna be okay? That's really what you're talking about, right? And that that really does stem from cash flow. Um, that gets me thinking, you know, one of my favorite calculators that we have inside of the software of the living balance sheet is the cash flow simulator. Um, I I don't think I'd be remiss if I did if I said that's kind of your baby. I mean, that you that came from probably what we just talked about, where you saw people worrying about cash flow, but this is specific to retirement. Um what you know what what really drove that? I mean, did that come quickly to you? Did it come over a decade? I mean, talk to me a little bit about how you came around that idea.

SPEAKER_01 6:15

That definitely that came over time. You know, when it had to be built, it obviously had to be built kind of all at once with what felt like the right set of ideas in that moment. But it definitely came from lots of client conversations, lots of work with other advisors, lots of collaboration for my like my colleagues in my firm. And then, you know, at the at the living balance sheet level, lots of other really, really good advisors. That to me, though, the fundamental impetus behind it is clients at some point ask us the question what is my income gonna look like? Like how is this gonna work in retirement? And we have to have, we have to have the ability to show them um the big picture, of course. Like most people want the big picture most of the time, but to have real confidence that it's gonna work, you have to be able to get down to like ground level and show like this, these are the sources of cash flow, like these are the assumptions we're making, this is how it's all gonna come together, and this is how we might stress test it. And so I felt like we didn't really have a tool that made it easy to to tell that story and to like deal with all the complications that you have to be able to account for to really map out somebody's retirement life. So that's really where simulator came from at the end of the day.

SPEAKER_02 7:29

You know, it's um when I first saw it, I felt like it was complicated. Um, and it is, but there's a reason for that. I as you know, I'm in fact, this podcast really deals a lot with investing and investing behavior, and it's it's a love of mine. Every investment portfolio and client should have an investment policy statement. That's almost a compliance thing at this point. If it's not, I it probably is. Certainly, all of our clients have it. But what people didn't have in my mind is an income policy statement, which is really what you're talking about. It's a roadmap, right? You've got, you know, four buckets, eight buckets, ten buckets, and buckets aren't even a really good term for it, but different tranches of money. And it's it's amazing, and there's a there's a question on the back end of this, but it's amazing to me how many clients will come to us or new clients come to us and say their current advisor just tells them they're gonna be fine. They don't have a map. They certainly don't know when they're gonna turn one thing on and maybe not another and turn one off, etc. And so I guess the question I have, because again, this is you're you're a unique guest in that you not only deal with clients, but you deal with advisors, um, new ones, veteran ones. I feel like generally out there in the general population, advisors can sometimes be the weak link to a client. What mistakes do you see from your perspective when you when you're in front of the room or behind that microphone and training and coaching advisors? If you could, you know, one or two mistakes you see advisors making, it doesn't have to be necessarily on the income, but on but on any area.

SPEAKER_01 9:01

Yeah. I will tell you, it this does relate to the income. Probably the biggest consistent mistake I see, and I hope this is not necessarily something we see of our of our colleagues, you know, that would be at an event where we're doing a lot of training, Joe, but I see it from people that are new to our you know community of advisors. They're coming from somewhere else, they've been really successful somewhere else. The the number one mistake is when clients are asking their version of that question, am I going to be okay? That advisor is answering it with a Monte Carlo simulation that says we have a 75% or 80% degree of confidence that you won't run out of money. And that's like gold stamp for the advisor, gold stamp for the client. The client doesn't really understand it, but they're being told that it's good and everybody feels great about it. We move on. And what I find to be true is that that advisor rarely really understands what that like analytic, that simulation, that very complex mathematical thing like what is it actually doing? What is it not doing? To me, that what it's really doing is giving people a real an undeserved, very false sense of confidence about their strategy. We we may talk about it, you know, we we have a very clear perspective on when it's appropriate to do something like that. The problem with that is it's a black box, it just it spits out a number. It's like, oh, you got a 90% Joe. That's at University of Mar Maryland, like that's great, right? Like you feel really, really good about that grade.

SPEAKER_02 10:33

I would, yeah.

SPEAKER_01 10:34

Yeah, exactly. Me, hey, me too. So so great, a tool like your reference cash flow simulator that's a linear tool where we break things out into individual tranches, you can see it all, you have you actually in some ways have more clarity. You you can't be fooled by the the jumble of assumptions that when you put it on the black box creates this illusion of of safety. So over reliance on a on a on a big analytic like black box model like a Monte Carlo simulation to me is like the number one killer of a retirement strategy. Because you could go, you could go decades getting that type of feedback in the echo chamber of looks great, looks great, looks great, you're still on track. And it could be very wrong, and you don't find out until it might be very late in the game or too late in the game to to get on a different track.

SPEAKER_02 11:23

And that's scary. I mean, one of the things I so I had a few client meetings today before we jumped on the call, and all three of them actually were people either retiring this year or within the next two years. And so we're we're right there. And for me, having done this almost 30 years, you look, humans are gonna make mistakes, but one mistake I cannot live with is if if you're my client and I tell you to do this and you do it, and then you run out of money in retirement, like that's an unacceptable failure. You know, what you're describing is is scary because you're saying that, well, you can if you're if you're using these tools that are, I think our industry, if you look at the industry generally, holds out as the gold standard, as you said, and we put our trust in that, but we now we're 10, 15 years down the road that we're never gonna get those 10 years back, then what? You know, now it's too late almost.

SPEAKER_01 12:14

That's right.

SPEAKER_02 12:14

Um I know you do a lot of work too, obviously, as do I, in the area of protection. Don't we have the same kind of issues there? I mean, I don't want to throw a softball at you, but what what I guess put it this way, as people come into the fold uh in a more traditional setting, maybe from other places they've been, whether it be protection or maybe debt, what are some other areas aside from investing in just retirement that you see are big mistakes coming in the door?

SPEAKER_01 12:40

Yeah, I think the theme, the theme in in both areas, if you think like retirement income planning is this like complex, big topic that we we spent a little bit of time on there versus something as simple as protection. The theme is is like overconfidence and and maybe overconfidence derived from underestimating the magnitude of a risk and and and therefore not taking the appropriate action to insulate yourself from it. Um, so a simple example would be like not not appreciating that your income, your ability to earn the income and make good decisions with it and save an appropriate amount of money, like that is the the number one driver of financial success. Is that not nothing else comes even close? Second place is is a distant second place. So the the biggest mistake I see around that is people have really inadequate or like in some cases zero protection, like really high income earners who have this golden goose from an economic like resource standpoint. They don't have protection if they get sued uh and that income gets curtailed, they get sick or injured, they can't work, that income stops for for even like a couple of years, it could be devastating. Not to mention if it's long term, somebody passes away, obviously. Um not having the protection in place to ensure that if your your number one like fuel that fuels your economic engine, your your income, if it stops and you don't have a mechanism to replace it, liability insurance, disability insurance, life insurance, that is that is something that no no other financial strategy, no other wizardry is ever going to overcome because the magnitude of the loss is so is so great. And it's really it's like it feels, I think, to a lot of people like such a boring thing to have to consider and tackle that it's easy to overlook it. It's it's the most critical, I in my mind, like easiest, simplest step to take is just to ensure that you've got protection equal to uh the asset, and the asset is you. And so what whatever your income is, uh present value of your future income during your working years, your whole game is won or lost by by that number, you know, being available to you and your family. We want protection equal to the present value of that income. Um that that to me, I don't know if that's really the the line, uh, the the answer you're looking for, Joe, as far as that question. But that that to me is like the big mistake people make. It's such an easy thing to do. Yeah. DI, term insurance, liability insurance, your legal documents in place. You could knock that stuff out in like 30 days and feel feel really bulletproof and be really bulletproof, but without having to get into any sophisticated planning yet. And that's still there. There's still like way more we can do to like take that up to the next level, but that's like 95% of the way there. And most people just don't do it.

SPEAKER_02 15:28

I think that's a great answer. I, you know, it's um it's important, I think, for people to hear it from multiple different areas. I the truth of the matter is I can't think, I mean, aside from commercials, every now and then you'll see an insurance company. Obviously, they're they're you know having a commercial of whatever product they're selling, life insurance, car insurance, whatever. But I I I really feel like, and and I don't know if you felt this too, but or seen that, but um when a new client or potential client comes in and I look at, you know, we talk about doing things like in order, right? Protection first, not because it's fancy or sexier, we like to talk about it, but because if we make a mistake in that area, you can't recover from it. No matter like to your point, no matter what the rate of return is, no matter how much you save, once you make a fatal mistake in the area of protection, it really is recoverable. I don't see that it's been addressed generally. Um in that traditional kind of planning mindset where protection is kind of put to the side, not because it's not important, because the advisors don't want to talk about it, because maybe clients don't want to talk about it. So, you know, if if there are clients of mine listening or pe people out there who aren't my clients, and and this is the first time and the last time they ever get to hear from from Neil Brinsfield. I mean, what is your message around that? Is it is it actually as critical as you and I are making it out to be, or are we are we just are we just saying it, we're just being a little bit dramatic?

SPEAKER_01 16:49

Yeah, I think it's fair. I get why. I to me it's like uh it I would couch these types of financial decisions, the the prudence around doing these things in the same vein as exercising, eating the right way, you know, getting enough sleep. Like we know, we know all the research, all the science tells us we know that those are the things that lead to a long, healthy life. It's like an easy thing to understand. And it's it's a really easy thing to not do. It's a really easy thing to put off. It's not always fun. You know, it's like boring, if if not painful in some cases. And I to me, these are these are of that same uh kind of a category. Nobody gets up in the morning and thinks, like, I really want to go button up these legal documents today. I want to go, I want to go talk to the person at HR that's gonna let me get like more group DI today. I want to go apply for life insurance and and get you know a couple million dollars more to be fully protected. And yet we we know, like the average person doesn't because you just you don't experience it like you and I have. We know how important it is, how easy it is for somebody to do it and get it right. But we also, you know, we've talked enough about different instances in our our careers for our clients. When somebody doesn't have the right protection in place and something goes wrong, it is it's devastating to them and to their family. There's no recovering from it. They'll never be where they would have otherwise been. And there's no there's really nothing that we can do after the fact to uh to improve, you know, where they are. We we can like we can treat the pain, you know, but we're not treating the like underlying issue, the underlying cause at that point in time. So you just you just gotta go talk to somebody who can help you get those things in place and make sure you got the full protection that's allowable. And there is a limit that anybody can get for life insurance disability and and liability, and then get the legal documents that wrap all that up. It it should be the first thing you do. Don't don't fund a 529, don't fund your 401k, don't try to pay off your mortgage or do any of those other like long-term financial wealth building things until you've got the the fundamentals, like the roof over your head. It's it's um I just can't think of anything more important to do. The rest of it is easy. This part tends to be tends to feel hard, but when you actually sit down and and do it with a professional, it's it's not hard at all.

SPEAKER_02 19:15

Yeah, I mean, I think I I think people like you and me and anybody else in this industry who who don't take that approach, I mean, really we're doing a massive disservice. And you know, to your point, I understand it. Like the emotions around the are around the investments because people see them all day long. They they can look on their phone, you know, they they they they log into Fox or CNBC, that's all they see. Nobody is seeing the uh the human life value of their life insurance or where they are on that daily. So it's just not an emotional thing in front of them, but um it's really I think our job to to bring it to the forefront. I I don't I don't see that in just general traditional planning. It's not it's certainly not the first thing people address. Um, oftentimes it's never addressed, and that that's kind of a scary thing.

SPEAKER_01 20:00

I to your point, Joe, it's something I I'll throw out there as like a parallel because you're right. We don't we see the the stock market movement, the economic, you know, news, that everyone's following this or that. There was this IPO, we're all talking about it at work. Um, we don't see you don't see that on the production side, but you do see the consequences of it sometimes. And the the best example I can think of that I know we've talked about a lot is GoFundMe. I mean, the fact that we see that in your in your social feed. Uh, it's getting, you know, links are getting emailed around, this devastating thing happened to this family, they need help. All of us as human beings, like, we want to help. And so I'm happy to, you know, we always want to like support somebody in need, but we also know that in almost every single one of those cases, the right planning would have made that crisis, financial crisis at least, like totally avoidable. Never needs to happen. It shouldn't exist. You know, if the right planning is in place, it just shouldn't happen, it shouldn't exist. Like that to me, every time you see that, that should be a wake-up call for you to go and ask like, have I taken the steps that I need to take from a planning standpoint to ensure that my loved ones or me personally, like I'm never in that position. I'm never putting anybody else in that position. Uh, because that that that to me is the is the evidence. That the fact that it exists and it's proliferated, and there's that many GoFundMe's out there is evidence that our industry is just failing people when it comes to protecting against these risks that are so known, they're so quantifiable, and they're so easily uh mitigated. But for the average person, they're just they're not being addressed.

SPEAKER_02 21:33

Yeah. Yeah. And that's that goes back to the worry thing. I think um, I think a lot of people, well, you mentioned waking up in the middle of the night, you know, and am I going to be okay? I think people do think about insurance generally. They may ignore some of the or not remember some of the uh more nuanced pieces like liability insurance or disability insurance, which you've referenced, but um you know, they do think about it generally and they get worried.

unknown 21:56

Sure.

SPEAKER_02 21:56

Um I want to switch back to retirement for a minute. Uh again, a lot of people listening to this podcast, it's it's right there in front of them, or it's it, or they want it to want it to be right there in front of. What this is this could probably be a difficult question because it's so different in how to quantify it. But in your estimation, the happiest people in retirement that you've met or the people with the least amount of worry, what do they have in common, if anything? Can you put your finger on something that you would say is kind of universal to all those folks or or not?

SPEAKER_01 22:29

I I think it's really clear, and this is, you know, I don't know if people are going to love this answer or not, but the happiest people in retirement are the ones that aren't worried about where their paycheck is coming from. Like nothing, they're not worried about something external threatening their quality of life. And the to just to be practical about what that means, that the opposite of that is the person who is in retirement. And I've had clients who are this way because they this is what they they said they wanted, and I probably should have done a better job of like talking them off of this. They're relying on on the market uh to deliver good news to them on a consistent basis, like month in and month out. And it and the market doesn't do that. It's just not it's not inherent to the market. So they're relying on on variable assets only to provide for their fixed income wants, their fixed requirements, their even their needs, their basics, those are unhappy people. I just promise you, if like check in in any given quarter, odds are high, they're unhappy. The people who have the same investments, but they've got those investments buffered by a floor of income that covers the essential social security, pension, annuity income that they they can't outlive. It's totally market independent. They got liquidity, like stable value, true liquidity, whether that's cash or it's cash value or it's equity line or whatever it is, they're free from worry. You know, they're just like living their life, they're having a great time. They're thinking about what they want to do with their time, the time they have left, instead of thinking about what will I do, you know, if if my portfolio continues to have this kind of volatility or this kind of slide. Like to me, the that that freedom from worry around what the market or the economy is going to do is the number one correlator of like happiness in in retirement. And there's a lot of research that that I know you you are aware of, Joe, that like agrees with that. Um it's it's an obvious thing, but it's not the way most of our industry actually plans for people.

SPEAKER_02 24:34

I I love that answer. I think you're first of all, I think you're right in the answer in that when people don't have to worry about where the source of the paycheck, so to speak, is coming from. But what's interesting is that I would be willing to bet, and I'm um, I I think you're with me on this, that if the last five years in the market were the opposite of what we actually got in the last five years of the market, in other words, massive fear, bear market, lots of red, not green. I bet you people would love your answer because you said I don't think people are gonna love this answer. And because really what you're talking about is more guaranteed income and less reliance on the stock market. I'm a stock market guy, I love it. Um, you know, my clients pay me to worry for them in a lot of regards, but like I'm following 17 different markets around the globe all the time. That's not the average bear out there. You know, they're they're not following that, they're relying on, in some instances, an advisor to navigate them through that. Um to not have floored income, I think is a mistake. But I think we're fighting an uphill battle when markets do nothing but provide you know incredible rates of return, like we've seen. I mean, do you do you find that to be true too? I mean, you've been through many, you know, downsides too. I mean, yeah.

SPEAKER_01 25:49

I mean, Joe, to your point, like you I love the example of the last five years. Um the only people that are like really truly feel that way are the ones who are not yet retired. Even in the last five years, there's amazing upside. Like only been a couple of blips in the last five years. Generally, it's been just a lot of upward movement and enthusiasm across like all those different markets that you're you're talking about. And if you've if you've stuck in for the ride, you've been rewarded for it. If you're in distribution mode, though, you've had some pretty unsettling moments. So I just think about the conversations I've had with clients who are worried in the last five years, and it's been moments like uh Russia invaded Ukraine, market went berserk, um, tariff, you know, tariff policy uncertainty, market went berserk. Uh this year, you know, uh war with Iran, market went berserk. And like in all cases, things evened out, and like once the panic was over, and the initial panic was over, we ended up right where we were and and better. And if you were taking withdrawals through the panic, you lost. Like you locked in losses. Right. Um, you're you're you did the opposite of what we know we're supposed to do when we're managing an investment portfolio, which is is invest and and don't sell. You know, just don't sell, like manage emotions and don't sell. The reality is like that's gonna happen pro it, it has happened in the last five years. Like one quarter in a year, generally, at least one quarter has been a little bit topsy turvy. And that's a problem. If you're in retirement, you're making withdrawals. It's a real problem. It's gonna happen. It's gonna happen, and it's gonna happen consistently on like small-scale blips, and every one of those is causing you to lock in losses. There's also gonna be 2008s, there's gonna be 2022s, there's gonna be these really nasty market years through the course of like a 20 or 30 year retirement. And I hear you say this all the time, Joe. You don't you want to not sell your investments, you want them to grow. That's what they do. They grow. So if you have a big enough floor of income that you can build your portfolio on top of in retirement, you can still be in a position where generally all your investments have to do is grow. And that is the thing they're like they're born to do. That that's like what they are as a species. Don't try to make them into an income vehicle. There are other tools that do that really, really well. So yeah, I want to underscore that point. I love that example.

SPEAKER_02 28:11

You you said something uh in a way I haven't heard you say before. You probably have said it, and I just didn't listen to you. Um, but it's a to your point that that the investment, the only thing the investments do well is grow. That's it. That's the only thing investments do well is grow. And in order for them to grow, is you can't sell them in in bad markets. So of course my clients they're rolling their eyes right now, they hear that all the time. However, what you said is that, but we're talking retirement. And if you have a bucket of variable money and they are down 10% in a quarter, which has happened recently, sure, and you're automatically selling them, then you're doing the exact opposite of what we've all talked about, which is you don't sell when the markets are down. And I don't think people think in terms of that. I don't think advisors think in terms of that. So that's that's something I wanted to underscore.

SPEAKER_01 28:55

Uh I think that's right.

SPEAKER_02 28:56

Yeah.

SPEAKER_01 28:57

When you look at the big picture and you run again, Monte Carlo, like mathematical simulation a thousand times and it worked 85% of the time, then it all makes sense. Like it's easy. It's you've you've taken into account all those little blips on the radar. If you're one of the thousand times, like that's you, that's your life. That that it feels like a roller coaster that you're riding, right? It's not a smooth ride. It's like it's real life, it's your experience. And I've never encountered a single client who's comfortable with it, right? So this whole like 85% of the time it worked, like zero percent of the time it works for people in reality because it is your money, your life. You only get one shot at it, and you're like having to live through that. It's not, I just I've never encountered somebody who's actually comfortable doing it.

SPEAKER_02 29:40

Well, you put it in an interesting way. So a lot of investment and only advisors will talk in terms of years, and and we've done that, yeah. You know, 08 and 22, and even the COVID year. But what you actually started with, and I do this a lot too, is you didn't bring up the year, you brought up the event. Uh, so whether it's um, you know, Hamas attacking Israel or Russia attacking Ukraine or the tariff or Brexit to go back a little further, or even a weird election, 2016, where nobody was expecting the outcome of that election. Um, the events are scarier than the numbers. You know, the numbers tend to rebound quickly. But man, those events that come along with those negative numbers can lead clients to make some really, really bad mistakes at the wrong time. And sometimes the advisor is the weak link, you know, and they're the ones facilitating the bad behavior, which is which is always scary. Um yeah.

SPEAKER_01 30:33

I wonder your your your bills don't uh like they don't adapt to that moment.

SPEAKER_02 30:38

Like you're oh, they go up sometimes.

SPEAKER_01 30:40

Your costs are your costs, and and it's funny, like we talk about other uh other advisors in the industry. There's a school of thought that says you adjust your lifestyle based on your portfolio returns in retirement. And it's insane. And yet it's it's an idea that's floated out there. It's what a convenient idea for the the general like financial planning investment industry that people can just magically change their mortgage payment or their medical bill or their utility bill. You don't decide what those things are, not not once it's all locked in. Um, so you there it's an it's it's crazy to think that you're gonna take something that is the most variable asset on your balance sheet, and that it all by itself is gonna be the engine that pays for these fixed expenses that you you can't wave a magic wand and make them go away.

SPEAKER_02 31:24

Well, as you're talking through that, you know, we've got I I know that the the current tax law is supposed to be permanent, but Congress views permanence very differently than you and I might, right? It's permanent until it's not. Um, so potential tax increases scare people because they've got an income in retirement that they're thinking through, and then taxes go up and they didn't they weren't prepared for it, or it could be um there's so many different things that pop up. Social security cuts that are in the news right now, potentially. Sure. You know, the CBO talking about reducing across the board. And so if you've got uncertainty around Social Security payments and unsecurity and uncertainty around taxation, and then we throw in a variable only bucket, I mean, it's a recipe to your point of not being happy, right? The happiest people you said in retirement are the ones who who who aren't completely reliant on variable numbers. Um yeah, that's uh it's a scary place to be in a in especially if you get five or ten years into retirement. I mean, it that changes too, because you can't exactly go back to the workforce, right? And just start collecting that big paycheck again.

SPEAKER_01 32:28

Yeah, there's the this is the challenge to me with retirement is there's no there's no reverting back, there's no attaining the average. Like we we we think about it, people think about it all the time. And and when you're sort of in that accumulation mode, it's like, ah, this was a tough year. We say it's a client, so don't worry, uh it's gonna revert to the mean. You know, you're gonna be back, you just gotta stay steady. That doesn't apply anymore once you're taking money out, like every single month that goes by that you're making a withdrawal, you're you're getting that experience and you're locking it in. You you never revert back to the mean. You don't you don't get the mean, you don't get a market average anymore. You just get your result.

SPEAKER_02 33:03

Yeah.

SPEAKER_01 33:03

And that that I just find is a as a concept that certainly clients are of course they're not equipped to understand because they've never they've never had to live it. Right. Unfortunately, most advisors don't understand it either. And that's that to me is like the real source of the issue because now it's like people without that perspective giving others a false sense of confidence about you know what their plan is or isn't going to do in retirement.

SPEAKER_02 33:27

I have two last questions for you. One just came to my mind. Um, I don't know if you've put a lot of thought into this, although knowing you, I think you probably have. You know, I feel like, of course, I'm not objective. I feel like my clients are, if they've been with me for any period of time and they know me and they've experienced how we do the planning and the calculators that we use and the living balance sheet and the app and the vault and all the things that they've got available to them, they feel pretty, they feel pretty secure. They know Joe's leading the way, they they know they've done the right things. I guess my question is, you know, I'm 51. As the Joe's the world become 71 and the clients are still retired, you know, as our industry ages up, Neil, I guess is my question. Yeah. What do you see behind? I mean, what how how do how do how should people feel when their advisors retire? Is that something they should be? We were just doing a podcast on this. Is that something they should be asking an advisor before they start working with them? Um, have you given much thought to that? What do you what do you think?

SPEAKER_01 34:23

I it's funny we because we've never talked about this, but I've definitely thought about it a lot and I've had a lot of conversations around it. This to me, this actually ties back to a lot of what we discussed. It's this is like a this is one of the fundamental risks that as an individual out there, a client of ours, like you, you have this is on your shoulders, you got to manage this too. And to me, it comes down to this, Joe. It's like I know I have to expect that my advisor, there's a high likelihood that when I'm retired during some course of my retirement, my advisor is going to be retired too. And and they may retire, you know, depending on on age, like they may be hanging it up before you are ready to go into retirement as a client. So what I can't do, what I can't like be willing to buy into is a strategy that requires that person, that professional, to manage a complex plan that they're probably not gonna be there to execute all the way through the journey. All the more reason why what we have to have, like what I want for anybody that I care about, any of my clients, like I'm telling them, I'm not gonna be here. I probably won't be here. Like, I want to retire one day too. And in a lot of instances, you know, I'm working with somebody who I'm 46. Um, you know, they're they're 26. I'm not gonna be there for them when they're 70 years old walking into retirement. That is like never gonna happen. I have to implement a plan for them that is clear enough and solid enough that doesn't require me to be there with like my hands on the wheel for them month in and month out. Obviously, there's succession plans, like we we have those in place. We're gonna have somebody else to pass it on to, but it can't, the succession can't be this like fantasy that I'm gonna download everything I know about all the nuances of all the conversations we've had with that client and pass it on to my successor. The plan has to be resilient enough that it doesn't require that to happen. And that's where guaranteed income, stable value assets, you know, risk management, and then a portfolio that only has to do one simple thing, which is what it was born to do, grow. That is a strategy that is timeless. Like that's a strategy that can transfer to another equally equipped, you know, like-minded kind of a professional. The I'm I'm the wizard, I've I've got the right uh you know angle on the market. That that probably is totally false to begin with, and it definitely doesn't transfer to the next generation. So I I I actually see that Joe as like a big retirement risk for people to not be thinking about how resilient their plan is when that baton gets passed to to somebody else.

SPEAKER_02 37:01

Well, first of all, it's definitely untrue that there's a advisor who's a wizard on the markets. I mean, I always tell people like the last person that knows the future is your financial advisor. They can't predict anything. Um, yeah, I I I really like the way you you framed that because the way my mind is is thinking through that is that if if the plan is um elegantly complex, right? Like it obviously there's there's all these different pieces that you have to deal with, but not in a way that is required upon one person. Then really the only thing that you have to download to the next generation advisor probably is philosophy around markets, which is a relatively easy thing to train, right? The 26 rounds.

SPEAKER_01 37:36

That's the moving part. At the end of the day, that's still gonna be the moving part to your point. Like that's where we got to be aligned. Yeah, it's an easy thing to do.

SPEAKER_02 37:42

Yeah, I love that. Okay, last question. Um, I'm gonna put you in the seat of uh to I will not name the uh radio talk show host who's out there speaking to millions of Americans for decades and may or may not provide great advice, but the benefit of this person is they get time with millions of Americans. If you had five minutes to sit down with every American family out there, um, but you could only pick one thing for them to pay attention to, what would you do? What would you leave with them? You've got five minutes with all these different American families. What would Neil Brinsfield tell them to pay attention to?

SPEAKER_01 38:16

Do I get the whole five minutes right now? Or do you what's the headline?

SPEAKER_02 38:19

You gotta give me a headline.

SPEAKER_01 38:22

That is a great question, Joe. I I think I would I would spend five minutes talking about how to protect and manage income. Like high level, protect and manage income from wherever you are today until retirement and then retirement until death. High level, if you got a plan to do that, generally not only are you gonna be okay, all the other decisions get easier, they fall into place. But let that be like the driver, let that be the tail that wags the dog instead of some totally off-the-wall, ridiculous buy term and invest the difference thing. We're gonna like you know put a stake in the ground there. Like it's a mistake, and it's also not the big picture. That's some return-focused investment strategy. It's probably a mistake to think that way, and it's not the big picture. To me, the big picture is always how do I manage and protect my income in my working years? How do I manage and protect my income in my retirement years? And if you do, but if you focus on both of those things and you do the things that are necessary to make both of those areas like A, the rest of it is just details. I think the rest of it's gonna fall into place.

SPEAKER_02 39:32

So I think that's great. I I I actually didn't expect uh that good of an answer from you, Neil. No, I think that was a great answer because I get it. I always start with O expectations. No, I mean, again, to your point, you mentioned like a buy term invest the difference, or or hey, everybody pays off every debt that they've ever owned, no matter what, first thing before you do anything else, or eat beans and rice. You know, rules of thumb, generally speaking, are are bad. Um but I I try to make you give me a rule of thumb, and and truthfully, I think you're right, because no matter your age, your income bracket, and where you wind up, age and income bracket, if you protect the income source, if you if and that could be with insurance, or it could be just protecting the income source in terms of how it comes out later on down the road. That rule of thumb of starting there, I really think makes a lot of sense. I I love that answer. It it really is elegantly complex, really. And I think it would remove worry, which is what we're trying to do.

SPEAKER_01 40:23

Um I'm glad I'm glad I could surprise you.

SPEAKER_02 40:25

Yeah, you never cease to surprise me. Uh, you still drive a Rivian, which bothers me a little bit, but that's okay. We're gonna I had to I had to sneak that in the screen.

SPEAKER_01 40:32

I can't win them all. I can't win them all. Can't win them all.

SPEAKER_02 40:35

That's a it's very well put. Neil, I really I really appreciate uh the time you spent. You I mean, people don't know this of you. I do. You've got multiple businesses really you're operating in and different compliances you're dealing with, and home office people and guys like me, and and and to take 30 or 40 minutes out of your day is a big ask, and I appreciate that. And um thank you for joining us today.

SPEAKER_01 40:56

My pleasure. Thanks, Joe.

SPEAKER_02 40:57

All right.

SPEAKER_00 40:57

Joseph Lisi is the director of representative and financial advisor parking securities, LC, which five two eight oh Carol Kanye Road 210, California, 921216, 486640. Guardian, New York New York. PASS is whole subsidiary of Guardian, West People partners' LC is not a photo or subsidiary of PS or Guardian. Insurance products of the West People Partners and Insurance Services LLC, and B A West Power Partners LLC Insurance License number zero D34103. This pack has for information purposes only is not construed as tax legal or investment advice. All the information has been gathered from sources believed to be liable. Please don't individual situations can vary. Therefore, information should be upon only coordinated with individual professional advice. Guardian subsidiaries agents and employees can provide taxally or accounting advice. Guardian and subsidiaries is an issue advice to regard mortgages, property and casualties insurance and or carnage. All investments and investments strategies contain risk and may lose value. This material is intended for general use, but providing this content property to be LSC or fancy representative of an united provide investment advice or make recommendations for individual or situations, which otherwise active fiduciary capacity. Guardian, New York NY. Copyright two thousand five to two thousand point six Guardian.