093: Ron Phelps On Values, Service, And Real-World Wealth Advice

Episode Summary

Ron Phelps, a wealth advisor with nearly 30 years of experience, joins the Influential Advisor Podcast to discuss his book Beyond the Sales Pitch: A Roadmap for Finding the Wealth Advisor You Deserve. Ron shares his journey from growing up in a tough Milwaukee neighborhood to military service to building a client-centered advisory practice. The conversation covers what separates a true trusted advisor from the rest of the industry, why jargon-free communication matters, and the questions every consumer should ask when evaluating a financial professional.

Key Topics Covered

Ron's Background & Origin Story — Growing up without means in Milwaukee, raised by a single mom on public assistance. A formative childhood experience at a grocery store shaped his drive to help others achieve financial security. After graduating high school at 17, he joined the Army during Desert Shield/Desert Storm, later earning an accounting degree and launching his advisory career in 1996.

The Philosophy of Giving Back — Ron rejects the industry coaching that says advisors should only work with multimillion-dollar households. He shares the story of Jack, an 18-year-old tradesperson who saved $30,000 and became a client, illustrating that giving back means meeting people wherever they are on their financial journey.

Ditching Jargon for Real Outcomes — Clients don't care about Sortino ratios or PE ratios — they care about retiring with dignity, building a legacy, and knowing they'll be okay. Ron's approach starts with understanding the person, their family, and their goals before ever discussing assets.

What a Trusted Advisor Actually Does — Comprehensive planning goes far beyond picking stocks and funds. It includes estate planning, tax management, legacy planning, charitable giving, and proactive problem-solving. Ron details his team's communication cadence: quarterly calls, monthly market updates, and webinars that now draw 50–70 attendees.

Creative Financial Solutions — Using the "Warren Buffett principle" of leveraging portfolio dividends and liquidity access lines so clients never have to permanently reduce their wealth to fund major life events like weddings or land purchases.

Working with Business Owners — Succession planning, business valuations (offered at no additional cost), tax-efficient retirement strategies, and connecting clients with business opportunity advisors for selling or franchising.

Legacy & Purpose — The story of Don, a client of nearly 30 years who went from being overleveraged on 400 apartment units to donating $22 million to a local cancer center — proof of what a long-term advisory relationship can accomplish.

Questions to Ask Your Advisor — Ron recommends asking for 10 client references (not just one or two), understanding how the advisor charges, whether they invest their own money the same way, whether they have a true team with continuity planning, and whether they have a network of CPAs and estate planning attorneys.

Guest Info

• Ron Phelps — Managing Director, The Phelps Group
• Book: Beyond the Sales Pitch: A Roadmap for Finding the Wealth Advisor You Deserve
• Website: www.beyondthesalespitch.com

Transcript

Meet Ron Phelps And His Mission

SPEAKER_00 0:00

Welcome to the Influential Advisor Podcast. I'm your host, Paul G. McManus. Today, I'm sitting down with Ron Phelps, a wealth advisor with nearly 30 years of experience in the industry. Ron specializes in retirement planning, wealth preservation, and working with small business owners and military families. Ron recently published a book called Beyond the Sales Pitch, a roadmap for finding the wealth advisor you deserve. It's a comprehensive guide written specifically for consumers who are navigating the often confusing process of finding the right financial advisor. In this conversation, we're going to explore what prompted Ron to write this book, the key insights he shares with readers, and the questions consumers should be asking when searching for an advisor they can trust.

SPEAKER_01 0:56

Ron, welcome to the podcast. We're so glad to have you here today. How are you doing?

SPEAKER_02 1:00

I'm doing fantastic. Thanks for asking, Gabe.

SPEAKER_01 1:03

It's good to see you, Ron. First, we wanted to ask you: can you tell us about your journey, about growing up in Milwaukee, and then what's led you to where you are today?

From Milwaukee Hardship To Military Service

SPEAKER_02 1:14

Sure. I'll just start off. I did not grow up with a silver spoon. I think there's a perception that everyone that does wealth management comes from some kind of larger money background. I was definitely not born from that. I actually grew up in a very bad neighborhood. I did not have put it this way I didn't take a vacation out of the city of Milwaukee until I turned 18 and joined the army. And vacation for us was grabbing a cane pole and going to the Fox River. And when you don't grow up with means, you might say, How did you get to where you are today? My personal story started way back. I was seven, eight years old. And unfortunately, where we were, my mom was a single mom raising three kids, and she was working three jobs trying to make ends meet, and that just wasn't happening. We were on public assistance and food stamps. We ended up going in between one of her jobs to go get food. And I'll never forget there was this brunette, very pasty white individual that was checking us out that had said, I'm sorry, ma'am, but your food stamps don't pay for that. Your kid needs to put that back. And so here I am running around the store trying to be as fast and efficient as I could, putting food back. I didn't know what embarrassment was. Like, how does a little kid know that? But I felt so bad for my mother. It just was terrible. I would never want that on anyone. And my mom, I can only imagine how bad she felt with three or four people behind us in the checkout aisle. But to have someone even say that to you is just so horrible. And I just said at an early age, I didn't want that to happen. So when I became a graduate of high school, I graduated when I was 17. My dad came, my stepdad, my mom had married my stepdad, who is absolutely my hero in life. He was not very well educated, but he would give you the shirt off his back. I learned a very strong value system from him and from my mother growing up. And due to that, my dad came and said to me, Look, I'd like to help you with college. I know a lot of your friends' families are helping them, and we just can't do it. He was a dock worker at a trucking company trying to raise a family of five. And I'll just say that was mildly challenging. And so I decided I was going to join the army to put myself through school. There was no wars. They were going to give me a whopping$10,000 for uh assistance. And lo and behold, six months after I go through my training and training school, which was rather involved, Desert Shield Desert Storm kicks up. I'm called two and a half weeks before the war. I served two and a half years after. I never saw any combat. We were supposed to go and support a tank battalion to invade Baghdad, and we didn't invade Baghdad. So we came back and brought everything back. I was put in a leadership role, so I learned such an unbelievable amount of authority and responsibility from all that. And I came back from all that. I stayed on as a reservist. I started my own tax and accounting practice. I put myself through a private school and got a degree in accounting. I had minored in, believe it or not, I minored in theology and economics. And those are just passions of mine. And then in 1995, decided to get out of all that, and which I did. And I moved to Madison, Wisconsin in 1996 and started this phenomenal practice of being a financial advisor.

SPEAKER_01 4:57

Ron, thank you for your service. And the question that I asked you is with that background, those early experiences that you had, what does it mean to you today to be a financial advisor and to help other people to make sure that their finances are secure and that they don't face situations like that?

Building A Career In Advice And Purpose

SPEAKER_02 5:15

This is just a core tenet of my belief system. And this stems largely from my stepdad. He was absolutely my hero, but I always firmly believe you should give back wherever you are, whenever you get there. And this isn't driven by economics, this isn't driven by status, this isn't driven by titles or what role you have in anything. I just firmly believe that whenever you get there, you should give back. Now, this can happen a variety of ways. It can happen like you could contribute time, you could contribute dollars, you could sit on boards. One great way that I give back is to help others. Our industry, I think, is challenging because if you have a coach in our industry, the coach will tell you, Ron, you only want to work with multimillion dollar households. Part of giving back isn't working with multimillion dollar households only. I'll just share this story from this year. I've brought on three clients with less than$100,000. As a matter of fact, all three had less than$50,000. One of them was 18, studying in the trades, started as a tradesperson, but at 18 saved$30,000. That is a, I think, fantastic feat. Yes. They were referred to me and they said they don't know about money management, they know the trades, but they want to get there. Who do I want to work with? I'll tell you right now, that person is getting there. No matter what. His first name is Jack. He is going to get there. And so why wouldn't I want to work with him? I call him every quarter, like we do all of our clients. He's on webinars when he can be on. That's one way to give back. Other ways to give back are you can sit on boards and do charitable activities, which I do all of that. I currently sit on four different boards. I consult to multiple other not-for-profits, but it's how you view this. It's why where can I move the needle to help clients to get there? And the stories are where it's all at. When a client says, I don't know your job, I get it. I have a client that actually repairs nuclear reactors on military submarines as a contractor. I couldn't do that. And so he says to me, I don't want to do what you do, Ron. I want to know enough to be dangerous, but I need help with that. If you take a look at some of the stories that I've said in the book that I wrote, these all happened and they're all really there. Most people don't know about what we do or how we do it. Most people think that they have to be complacent and deal with where they're at because this is just where they're at. They just don't know what to do. So I didn't write a book on how to manage money. I wrote a book on how to find someone to manage money and help you get to where you need to get to. That's my purpose doing that.

SPEAKER_01 8:17

Please tell us about the book and about the purpose behind writing it. Why did you feel now is the time to get that out into people's hands?

Giving Back Beyond Millionaire Households

SPEAKER_02 8:24

All of my clients, all of them, 100% of them sit across the desk or at the side of me at the desk, and we have a face-to-face conversation, and all of the conversations are the same. You may think there's nuances. Oh my gosh, this advisor does better by one or two percentage points. Yeah, that that is true. I think we manage wealth exceptionally well because we are vested in it. We manage it. We don't pawn that off on someone else. That's fine, but that's not how we have individuals sit across the table from us to work together. Something has triggered where someone's not getting what they need and they know it. It doesn't matter where you are or what walk of life you are. You're talking about Jack who's got$30,000 saved at 18 versus an executive that is making$400 or$500,000 a year, that prior to working with me sits across the mahogany desk from someone who brings out a stack this thick of their financial plan and talks in fluffy terms and says, Oh, you're gonna be okay. Let's talk about things like Sortino ratios and sharp ratios and PEs. None of that matters as a financial professional. If I wasn't a financial professional, I wouldn't care about any of that. All I care about is, am I going to be okay? What's the end result from this? Am I going to be able to retire with dignity? Am I going to be able to start things like charitable donor-advised funds, instill with children and grandchildren a legacy that I've worked pretty hard to build? And then how to instill those values on them. I think it's one thing to say, I manage money. I think it's another thing to say we are going to work hand in hand together to do that. We take a vested interest in our clients. If you ask what's fun about the business, because you had alluded to that, and what do we do with our clients? Yeah, I have traveled when I say this, I'm minimizing this. 50, 60 of our clients I've traveled with to foreign countries. I traveled with one gentleman before he passed away last year. He passed away at age 92. I have traveled with this gentleman to five separate continents. I have done the most remarkable, amazing things. I have helped him set up a legacy that he will never be forgotten because of what he's done. This is where the rubber meets the road for all that. Notice what I didn't message in there was PE ratios, Sortino ratios, sharp ratios, how we're going to pick money managers. That's our jam. We as financial advisors enjoy doing that. That's what we do for our clients, but we keep them informed.

SPEAKER_01 11:19

Ron, when they start with somebody that's putting all of that jargon in front of them in the stack of papers, but then they get to you, are they surprised? Do they find this to be a completely new experience?

SPEAKER_02 11:31

If I told you how many times someone said, You don't talk like a financial professional, I don't think that I do. I'm more interested in the bottom line for everyone, but I'm not going to talk about here's what you've done as a percentage, here's what your rate of return. We can talk about all that. That's great. You want to mention it? You're going to see that. If I think none of my clients are looking at their statements, that is an absolute fallacy. I know they're all looking at their statements. The questions we talk about are things that are much more dynamic in nature. And when they ask that they want to understand something, it's my role and my responsibility to work in that capacity. So they do understand that. And it doesn't involve any of those fluffy terms. When they sit down with me and they say, You don't talk like a financial advisor, that's because I don't want to talk like a financial advisor. I want to talk to them about what's important to them. This is where most financial advisors miss the mark. They want to talk about what's important to the financial advisor. What's important to the financial advisor for me is my clients. And so this is why we don't work with 6,000 or even 600 households. I have a team of five. And my name's Ron Phelps. It's the Phelps group. I think we do a Hercules job for that. We manage 240 households. Why? Because we want to know breadth and depth for our clients. We want to know what's important to them. We want to know what moves the needle for them. That's the feedback we get, is that's why our clients stay with us. That's the true element of how do we know we're being successful or not.

Why The Book Focuses On Finding Advisors

SPEAKER_00 13:10

For someone that might be currently DIYing it, what are the benefits for them to hiring a financial advisor?

Ditching Jargon For Outcomes That Matter

SPEAKER_02 13:18

The benefits are that you can do it yourself, but then that's a full-time job. This is our full-time job, and we do this ourselves. There's no doubt in my mind of the hundreds of millions of dollars we manage in wealth for our clients and for separate corporations, that it is a large responsibility, but we're taking something off of the table to give our clients the ability to have more time for themselves. Now, let's just say full and encompassing, meaning that as an advisor, it's not as simple as saying we're going to choose you some stocks, bonds, and mutual funds, and that's it. We're just going to go home for the day and we've done our job. This is a coordinated effort about you, a true trusted advisor is going to assist you with estate planning, tax management, legacy planning, charitable management, and in most cases, accomplishing what you want to do in retirement or what you want to do pre-retirement to get there. None of this is an easy undertaking. And it doesn't come down to choosing this fund over that fund. It really comes down to having someone that works on your side sits on your side of the table. Most clients, and I'll segue here, don't know what they pay their financial professionals. You want to know how we charge? It's on my website. You want to know how we charge? Make a phone call. I can regurgitate to you in two seconds. It's that easy. It should never be something that's ambiguous. How about communication? Here's another thing. Most clients say, I sometimes get calls if my financial professional wants to do a trade or make a transaction, and I don't have a clue on why they're calling me them, but that's usually when they call. How about if I ever call any of my clients, it is never to do a transaction. We are fiduciaries, meaning I sit on the same side of the table with my clients. We have discretion to do that for our clients. Do I want them to be involved? Absolutely. So if they want to be involved, great. I can set that up to do that. But moreover, we call all of our clients at minimum every single quarter, every January, April, July, and October. Why those quarterly months? Because earnings come out those quarterly months. The markets swing on those quarterly months. There's big things that usually happen, like it's October, the Fed just met. There's other elements that come into play. And it's not talking about let's micromanage your strategy. So let's talk about the specifics. How about let's talk about you quarter to quarter? What's new? What's going on? What are you doing? If we need to do some tax management or tax planning, we're going to already suggest that to you. It's literally, has anything else come up that I don't know about? Maybe things you want to inform me about. One of the things we do, even separate above and beyond all this, that I don't know any other advisory teams that what they do is we say every single month you're going to get a market update from us. And that's drafted by me. I'm the senior portfolio manager for the team. That same first business day of the month, we send that out to all of our clients. We do a webinar at 2 p.m. that afternoon, 30 minutes. We get QA. We used to get five to 15 people on these calls. We now get 50 to 70 people on these calls. Why? Think about it. The markets are doing phenomenal. And people just want to know what's happening. There's some crazy things going on. The government is shut down. The markets are hitting all-time highs. We have multiple regional wars throughout the earth. And yet someone's navigating this. All I want to do is be a resource for our clients so they don't have to worry about navigating that. When you say what helps clients have a trusted advisor is a rock solid relationship. I can tell my clients' goals, their plans, what they want to do for charities. We're proactive about all this. If someone needs funds, I just had this morning a fantastic individual that lives about an hour away from me say that she just bought some additional land, farmland, because part of her legacy, she owns a farm. She wants to give even a bigger farm to her sons that are managing the farm. Her sons don't know that she's buying this land. She's like, How can I do it and not create such an impact to hurt me? I said, This isn't gonna hurt you at all, Jane. It's all good. We walk through the practical measure of how it's gonna happen. She says, Great, then I'll trust you'll get this done. That's what a trusted advisor does. And now I don't just leave it there. As soon as it's all done, tomorrow I do my checks and balances. I'll be calling Jane up and saying, a check's coming out to your bank. This is exactly what you got to do. You'll have this taken care of by Monday next week. All done. One less problem she's thinking of. What do you think she's thinking of right now? Only her legacy, only the farm, only her sons. And I'm looking at the bigger picture for all of that.

SPEAKER_01 18:29

Yeah. When you talk about legacy and about those future plans, Ron, when your clients come in, when do those conversations begin? And how do you help them to get to the point where they are thinking about and then realizing what is most important for them as they're looking down the road?

SPEAKER_02 18:46

I think it starts right away. And I think from feedback from our existing clients, I can share with you how things would look. Let's just say Gabe came into my office, and why Gabe's in my office, a variety of factors, but let's just say you weren't given what you were promised with your existing advisor, you weren't getting good conversation, you don't know what the strategy is, you've got burned on taxes. Take all that off the table, just shelf all that. Let's just assume someone said you really gotta talk to Ron.

SPEAKER_00 19:19

Now, before you run, I'll make this even more real world for you. Gabe should not be managing his own investments. Stock market goes up, he gets greedy, stock market goes down, he gets fearful. So add that detail too.

DIY Vs. Trusted Advisor And Fees

SPEAKER_02 19:34

I need this advice. So you would sit across from me, or I would sit right next to you, and all I'm gonna do, I have this really cool device called a remarkable. It's like an iPad, it just takes notes, and I write everything down. And here's the very first questions I ask. So tell me about you. Let's talk about your family, let's talk about what all of that looks like and means to you, because that's very different than someone else. If you asked me about my personal family prior to my getting married seven years ago, I have a younger brother, a younger sister, and an older sister. I don't like the term, but what's called a broken family. I didn't have a rosy childhood. I can't tell you how awesome it is that my stepdad came into my life. And so he brought us out of that, but that didn't change the numbers. That didn't mean my family got wealthy. Almost the exact opposite. We treaded water for a whole bunch of years. What my background is I have a brother who I can't trust with any money. I would be asking you, Gabe, tell me about your family situation and tell me about you. If you're married with kids, are they important to you? Do you have an estate plan? I haven't talked about assets at all yet. Then I'm gonna go into you telling me about all the things you've put in place already. Tell me about the things you have and what you owe on those things. Is debt a concern? Do you want to pay this debt off? Is that where we should structure the conversation? The last thing we're gonna talk about is your assets. Oh, this is a big story to find out about you. Exactly how I started the conversation today with you was telling you a little bit about me. So you're already gonna know that, but you're also gonna know that I probably speak a little differently, and then I'm going to then say specific to you, okay, now tell me where you've come from and how you got here. Like, what about your prior relationships with financial professionals? Have they done what they said? Do you have a CPA? Do you have an estate planning attorney? Do you have this trusted sphere within your circle? And here's what happens you're gonna come back and you're gonna think your mind is already spinning, but you're gonna say, Okay, Ron, it sounds like You have a great grip on this. But you know what? What happens if something happens to you? And so I'm then going to talk about how it's not just me, that I have a team. And this is a real thing, but we have a real team. Because someone has on their business card they're part of XYZ group and they've got four advisors or six advisors or 20 advisors and they've got 10 assistants. That doesn't mean they're a group or a team. They may be 20 advisors in what's called a team of convenience. If something happens to your advisor or her, heaven forbid, something happened to me, my business partner, Forrest, Forrest is close and intimate with the entire business. Why? Because we're managing all the money the same. We have two assistants and an intern on the team, and they manage all the money the same. There is no separation of church and state. Oh, we don't have to know how Forrest business is because Ron runs his business differently, or vice versa. We are a true team, a dynamic team that shares everything. These are important things so that, heaven forbid, I actually do things like this. I go on vacation. If I go on vacation and someone needs something, all of my clients have my cell number. I want you to call my cell number. But if you don't get a hold of me, it doesn't mean the whole ship has to stop dead in the ocean. It means that I have three other individuals that are actually making decisions for our clients that can handle any of those conversations. And so I hope I answered that question, but that would be the start.

SPEAKER_01 23:44

Well, and what I wanted to ask you is so once we've sat down, we've talked about goals and we've thought about the legacy, what happens if the resources can't stretch far enough to accomplish all those goals? Where do we go from there?

SPEAKER_00 23:58

And I'll add a little bit of clarity to that. So Gabe has three teenage daughters that all have hopes and ambitions of going to college and having to paid for them. So he's really asking for himself how do I pay for my daughter's game?

SPEAKER_01 24:13

And still double like you do.

Proactive Communication And Quarterly Touchpoints

SPEAKER_02 24:17

To answer that is pretty easy, in my opinion. So you have to start somewhere. Just using today's conversation, the 18-year-old that saved$30,000 is going to have a pretty easy time getting there. Why? Because they already have that mentality. It would be disingenuous of me to say that, oh, guess what? All of our clients are solvent. All of our clients, not one of them, is going to have that problem. But that's not the case because unforeseen events come up. See, you talk about children that are gonna need to buy houses and want to do things and get married, and there's costs associated with that. Let's talk about some things that could be elephants in the room that no one wants to see. Heaven forbid you're a primary caregiver for a parent, or maybe both of your parents, and now one of them has dementia and the other has Parkinson's. I have this situation going on right now. If you can believe this, with three separate families, and they're now living in the house. You first the stress that goes with that, but then what happens is the financial directive that goes with that. How do you afford all of that? You have to start somewhere. Now there's an easy solution to it. You throw your hands up and say, I'll just run out of money, I'll just do it like that. If you work with a financial professional that is on your side of the table, that is looking at your situation, they're going to explore opportunities maybe you haven't looked at. Let me give you a great example to this. Let's just say that Gabe has$500,000 sitting in four or five mutual funds, and it's taxable money. And you know that three daughters of yours are going to get married next year. You gave them$25,000 for their wedding, but you still wanted to do more. You wanted to give them something as a foundation to start this marriage off. So you want to give them another$25,000. Just do the mass, that's$150,000. You might say, doing this on your own, I'll just take it out of my stocks or bonds or mutual funds or whatever. How about let's look? If you do that's okay, but you've permanently reduced your financial security for the future by$150,000 permanently. It's gone. Yeah. If we are in a decent market right now, imagine this is a different solution. How about we say, all I want you to do is not use any of your own money? We'll have a strategy that has dividends coming into it every month, and we're going to give you a liquidity access line that doesn't go on your credit, and we're going to give you that$150,000. How about I don't even care what interest you're paying on it? I don't, I do care, so we're going to negotiate to get that low, but you're going to keep all$500,000 of your money working for you, and we're going to use the dividends that are generated from your portfolio to pay off the$150,000. You're never going to use your own money to pay that wealth down. You know what that's called? The Warren Buffett principle. You know why? He started his first business as a lemonade stand, borrowing money to start it, paid the money back within a month, and then used the profits from that to hire six more kids to have six more lemonade stands.

SPEAKER_01 27:35

Right.

SPEAKER_02 27:35

He never used his own money. So why wouldn't you think like a high net worth individual? Now, you could do that on your own, but not in the same capacity. Now, I'm not even talking about the other tertiary things that come into place. What happens if Gabe is no longer employed? What happens if Gabe becomes sick? What happens if I start the conversation as I did a few minutes ago with maybe your mother-in-law is going to move in with you and she has advanced stages of Alzheimer's and needs you to put$50,000 into the house to make it safe? Again, these are tough conversations. And notice I'm not talking about money management, I'm talking about providing solutions. That's what a money manager should do for you. If someone says, What do you do? Now, first and foremost, I'm mostly a psychologist, but what I do is I'm a wealth advisor, but I sit on the same side of the table with my clients to come up with solutions for that. The money management, that's the easy part. I know most individuals think that's challenging, but as you could tell, I'm pretty passionate about this. That's the easy part. Let's get the difficult things out of place first.

SPEAKER_01 28:46

Now let's shift to business owners. What's the conversation that you wish that you could have with every business owner that nobody else, from what you're seeing, is having with them?

SPEAKER_00 28:56

Let me add some context to this because I'm a business owner and I've been fortunate, especially in the past couple of years, where in my case, I hired an advisor and I feel that I outgrew my CPA, and my advisor did something I think perhaps similar to what you've been talking about, which is he coordinated and actually helped me find a new CPA that is a fair match for me. And so I definitely benefited from that. Now, I will say though that the one disconnect, if you want to call it that, that I feel currently is that while I get a lot of benefits from my advisor, the the one thing that it doesn't really address is the fact that my business itself is my biggest asset, right? It's a little bit more focused on growing savings, investing, growing my wealth, and those are all good things. But I also feel like there's a little bit of a I could benefit more from a little bit of a focus on okay, how are we going to increase the valuation of your business so that it becomes this growing asset that I have the most leverage and influence on? So I just want to add that.

Defining Legacy From Day One

SPEAKER_02 29:58

Absolutely awesome question, but and I don't mean to say but it's just what is not being discussed is truly you. And I'm not saying your advisors missing the boat, they may just not have experience in this. Right now, in my career, I have had the luxury of having clients buy and sell businesses, have succession for their businesses. If you were a client of mine, we would be having a discussion about how much longer do you want to do this? What's your succession plan? What are you doing to make sure that you don't have to worry about doing this again? And that means what are you doing to put in place that you have a proper retirement established from the business and being tax efficient with that and getting tax deductions for that? So you're not getting taken from the federal government in taxes. I tell everyone this I want Uncle Sam to get every nickel they can in taxes from everyone except my clients. And how do we do that? We do that by doing the right things the Fed has in place. I would say, are you starting a retained earnings account that's paying you, that's paying your business at a reduced tax rate? You can do this through individual equity ownership and dividend ownership, making sure you keep your capital gains in check. If you sell something that you've owned for less than a year, that's short-term capital gains. That's ordinary income. That could be as high as 36% to you. How about wait one year and one day? Boy, we cut that in half, 18%. That sounds like good advice. In addition to that, not only has it come down to succession planning, but what do you want the business to do? Do you want to franchise it? How about it's to the point where if you said to me, Paul, I think I really only have two years left in this business, if you think it's normal to wait two years and be under crisis management to now think about selling your practice or monetizing your practice, how about let's look at that now? Let's look at putting in place. We have tools that cost you zero to do business valuations for your business. Is there some work? Sure, there is. It's work on your behalf, it's work on our behalf, but we don't charge for this. This is all part of what we do for our clients, all part of that 1% or less fee that we do. And so maybe you should get a valuation for your business. Maybe we should explore through a business opportunity advisor, which we will connect with you that works nationally or even in some cases internationally, because you may have operations in Canada or England or wherever. But let's see, is there a market to actually sell your practice or franchise your practice? These are things that the average individual is probably just every day doing, and they don't know about this. Let us know about this. And unfortunately, I'm not saying anything about working with individuals that are 21 years old, but someone I just turned 57 in October. I started my 30th year doing this. I have been around the block and seen this in action. We right now, before now and the end of the year, have two of our clients that are selling businesses, and these are not small dollar value transactions. And what's the biggest concern to our clients? How do I pay as little in tax on that as I can? How do I turn it into an income stream? And how do I not use my own money if I don't have to? Yeah, and it's exactly what I talked about, some of the things in here.

SPEAKER_01 33:35

Ron, you wrote about with some individuals that money starts to pile up with no purpose. How do you address that to make sure that they are being intentional about the way that they're saving and spending?

When Goals Outrun Resources: Creative Solutions

SPEAKER_02 33:47

When I talk about legacy, it doesn't really matter who you are or what net worth you have or any of that. It's what mark are you here to make? Everyone, if you give$10 to someone holding a sign on a street corner saying they're looking for food, that person has an interest in something bigger than where they are right then and there. It could be as simple as I just want to get there, I just don't want to worry about food. It could be I want to own a home, I want to start an entrepreneurial practice, I want to give money to charity, or maybe I want to go to Africa and build a well system for individuals that have no water in the desert. Think about what I just talked about from zero to 60. That's everything in between. How about let's define that together? What you want that to look like? This individual I had talked about just previous in this conversation that passed away when he was one day before his 93rd birthday, he was 92. I had seen him one day before that. And he was not doing well. This gentleman came to me almost three decades ago and said he couldn't work with me. He said there was another advisor in the office, said he only works with million-dollar households and above. And this gentleman's first name was Don. I said, Don, that is not the case for us all. Now, here's what Don had. Don had 400 apartments, like not apartment buildings, but apartment buildings that had 400 total apartments. But he was levered to the gills on all of it. That means he owed more than he had coming in. And I said, Don, if you think you're not high net worth, you already are there. Let's help you resolve this. Some almost 30 years later, Don's legacy was to donate to a local cancer center here in Madison, Wisconsin,$22 million. And if you think Don even had the capacity to think like that when he was in his 60s, he had none. And we assisted him getting there. We helped him define it, we helped him create a foundation. And you know what it cost Don? Zero. You know why? Don was a friend of mine. I was sad when it comes across now when Don passed away. Don was one of my first clients. I have been there for Don's whole life. I traveled to five continents with this gentleman. If you think it wasn't personal, it was all personal. This is what it should be for everyone. And that's how you know you're working with a trusted advisor. They're on your team, they are an extension of you. They're like another limb. And so I don't know if I exactly answered that, but that's how you go about defining what it means and why you're doing this to begin with. That's part of our role is to help define it. It's not to, oh, bring your money in and will management and charge you a fee. And then when you get upset because we did or didn't do something and you leave, now I'll just go and find someone else. You work with us, that is forever. We do not lose clients. That's a relationship in my book.

SPEAKER_01 37:04

Ron, if a person that's listening goes in to see their current advisor tomorrow, what are the questions that you say should be in their head to make sure that they're getting treated in this way and having everything looked at from the way that you do it?

SPEAKER_02 37:20

It's a little more involved than what I'm going to say right now, but I have this outlined in the book. Beyond the sales pitch is what I wrote. And I named it that because I really mean that. It shouldn't be you sit across from someone and they give you some song and dance about what they could or should or maybe won't do. It should be defined. Ask about their clients, ask to talk to other clients and don't ask for one or two referrals, ask for 10. And go down the list and blindly pick three or four and call all of them. If it's serious to you, be serious like to them. First, you're not doing them any favor by saying, Oh, this sounds good. I'll just do this. You should do your homework. You have to take a little bit of time, effort, and energy to do it. So sit down with them and find out are they passionate about the business? Do they have a team in place or are they a solo practitioner? How old are they? And do they plan on retiring tomorrow? I'm 57 and this year I had half a dozen, maybe even more than that. Individuals asked me, Ron, are you retiring anytime soon? I said, if you consider soon another 20 years, maybe, but I love what I do. This is my jam. I'm passionate about it. But not only do they do that, but do they employ what they say? If you ask me, Ron, what about your money? My money is invested just like my clients' money. And I mean that we'll show it to you if you really wanted to see we own the same stuff as our clients, that we pay the same fees as our clients. Most advisors ask how the advisor charges themselves. They'll say, if I don't have to charge myself, I wouldn't. I start at 1%. That's my fee, my family's fee. And so why wouldn't I do that? If I'm going to do that for my clients, I sit on the same side of the table. What's the easiest way to say that? Yeah, we believe in what we do. We've got conviction. I do this. What's their sphere of influence? Do they have CPAs and estate planning attorneys they work with? They should be able to rattle this off right off the tip of their tongue. Do they do donor-advised funds? Yes, guess what? I do it because I have one. And it's in the name of my trust. And if you want to know how to set it up, it's pretty darn easy. I'll show you how to do it. Do you want to start a foundation? We got three clients with them. And now foundations are becoming out of vogue and they're giving way to donor-advised funds. But let's tell you the difference. Let's talk about what happens if someone's in the late stages of Parkinson's. I because I've got maybe half a dozen clients like that right now. What are the fiscal burdens? What are the family burdens? What about choosing a trusted family member to be your trustee? Is that the right decision? Oh my goodness. How about I could trust my older sister to be my trustee? I could trust my younger sister to be my trustee. I could not trust my brother to be my trustee. Let's just say that. So it's not as easy as saying, yeah, I could have any of my family do this.

SPEAKER_00 40:25

And just in the final few minutes that we have, two questions, and I'll just give them to you in advance. One, is there anything that we haven't talked about so far today that you think is important for this interview? And the second question is where can people get a copy of your book?

Business Owners, Valuation, And Succession

SPEAKER_02 40:39

Sure. So the big takeaway from today would be everything is experiential in our lives. It doesn't matter what you do or how you do it. I say this somewhat gutturally. If you like to travel, you may not want to travel to go great white shark cage diving. Travel to you may be to go to your local farm and pick sunflowers or grow vegetables. That could be travel to you, or maybe going to Arizona to hike on Camelback Mountain. Your jam may not be going to Mount Everest. I think the takeaway is you have to do your homework. If I asked both of you, would you ever enjoy partaking in a cocktail with me? Now, I'm a wine guy. I could tell you a lot about wine. Why? Because my clients have told me a lot about wine. That's how I became an expert on wine. But it doesn't mean I like all wine. If you ask me about a French Beaujolais, I don't like it. Why? It's too sweet and watery. Get me something big, bold, and tasty. I may not be the solution to what everyone's looking for. If you just get how passionate I am and you're not looking for someone that wants that, if you want someone that just doesn't want to pay attention or is much more concerned about paying nothing to have their wealth advised, on I'm not that person. We charge a fee for this. I don't know an industry that starts at 1% and goes below that, but that's my industry. That's my fee. If it's not worth it, I can give you a list. We have 240 households of clients. I could give you 240 individuals to talk to that will tell you they find very high worth in that. That may not be for everyone. I'm also a little bit of a bull in a china shop. I was an introvert till I graduated high school, no joke. And when I went to college, I my dad, my stepdad, would not let me get a car till I turned 18. And I was 17 when I started going to UW Milwaukee before I realized I had to join the army to pay for it. And so I was riding my bike there, my not a motorcycle, a bicycle there. And it was about 15 miles away from our house. And I pulled the bike over and I said, this is my opportunity to either stay where I was or emerge from this. And I decided I should emerge from this. And now I sit on a variety of boards, I do a lot of public speaking, and I'm a bit, like I said, of a bull in a china shop. I'm opinionated, I'm not going to tell you what to do, but I'm not going to also sit back and say, yeah, that's good. Let's just do that if it doesn't make good fiscal sense. We're going to have a conversation about it. It's just how I work. I wouldn't expect that from anyone. And I'll give you a scenario. If you have an insurance agent, everyone does. I don't care who they are. You may have it online because it's cheap until you get the online version back when something happens, and then you're like, maybe I should pay it a little bit more to get someone who talks to me. So I want someone to talk to me. My insurance agent is not me. I don't want my insurance agent to be me. I ask of my insurance agent, all I want you to do is this call me every single quarter, check in with me. I don't care what I'm paying. I do, don't get me wrong. I'm fiscally conservative, but I care about the relationship because if something happens, I need to know you're there. We just had our roof replaced because of hail that happened in April. I didn't have to worry about a thing. Why? Because in April she called me and said, Hey, we know these storms came through. She was proactive with me. Said, I think we got to put something in place. Our roof just got replaced. I didn't have to worry about that. What's the value to me there? I don't have to think about it. That's how your advisor relationship should be. I certainly might not be what everyone's looking for, nor do I want to be. I said when I started this, we don't have 6,000 nor 600 clients for a reason. I'm not in this to be the biggest. I'm in this to have the best relationships possible. If you go to www.beyondthe sales pitch.com, you could find this recording and all the other information you need to know about myself and how we do this.

SPEAKER_01 45:02

Fantastic. Ron, thank you so much for joining us today. We're glad to have this conversation with you. That is wonderful. Thank you.