Confluence Financial Partners — Estate Planning and Taxes | Episode #10

Greg: Only 15% of Americans earning more than $150,000 have an up-to-date will. Imagine that.

(Google Consumer Surveys, June 2016)

This is Greg Weimer, partner of Confluence Financial Partners. So, we are privileged to have two guests with us today. Frank Fisher is a Tax Managing Partner at Deloitte, and Tracy Zihmer, who has her law firm in South Hills — Zihmer Law Firm. And they do elder care and estate planning.

So, our goal today is to make this extremely informative. And when people are saying like, ‘Uh-oh, taxes, are we going to it’s’ — so, we’re trying to make it interesting also, right? Because if people hear like, ‘Oh my gosh, we got like estate planning and taxes. Can this be interesting at all?’ And I will tell you; it will be interesting if you’re looking for ways to make sure, during your life, you are effective with taxes so you can maximize your life. And then legacy is important to a lot of people, making sure that you actually have the legacy for your family that you want.

So, taxes have a huge impact on your life. They have a huge impact on your legacy. And as we record this, there’s an election coming up, and elections have a huge impact on taxes. So, these two brilliant individuals are going to give us some information to help us understand the facts, because a lot of people, in any election, a lot of people are really focused on the emotion behind the candidates. And I know there’s a lot of emotion, and that’s what makes America great, not even judging that. By the way, guys, we’re going to try to get through this and not be political.

Right. So, we’re going to try to go with just the facts. Just the facts, ma’am, right. Who said that? Just the facts, just the facts, ma’am, was that a movie or something? I don’t know.

So, I’m saying we’re just going to focus on the facts to help people make an educated decision and, along the way, find some things that can benefit them in their lives and in their legacies.

But before we do that, I’d like both of you to just give a quick overview, like, what do you do on a daily basis? Who do you work with? And a little bit of your background, Tracy has a practice in the South Hills. And I think I knew you as an attorney before I knew you as a neighbor. So, she’s actually also a neighbor. So, Tracy, why don’t you tell us a little bit about your practice and who you tend to work with.

Tracy: Absolutely. And thanks, Greg, so much for having me. So, I have an estate and trust practice in the South Hills, and a lot of people say, what does that mean? And that’s preparing wills for people, trust financial powers of attorney, healthcare directives, helping people get qualified for long-term care if they need it, and helping loved ones through that process when a family member passes away. So, I help clients of all different backgrounds, and that’s, I think, one of the biggest things I like about what I do; I help people that are just getting started and have young children. And they want to really make sure that if something were to happen to them, catastrophically, that their kids go to the right person.

And then a big bulk of my business is helping families, pre-retirees, and 
retirees that are really looking to protect the wealth that they’ve accumulated and pass it on to that next generation in a tax-efficient manner. And also protect it, if need be.

Greg: Yeah. And it’s important. So, we actually work with 2,100 families at Confluence across the nation. And it’s really important to make sure that they have their will set up. Like I saw a statistic, 71% of Americans do not have an up-to-date will, and wealthy Americans are no better prepared.

(SOURCE: Google Consumer Surveys, June 2016)

So, right. And so, do you see that? Are you usually changing wills or seeing people who come in, they don’t have a will?

Tracy: I would say a lot of times people might come in, they had a will that they did 25 years ago when their kids were young, they were concerned about guardians at that point. Well, everything’s different 25 years later.

Greg: It was different a year ago. Right? I mean, it’s literally changed in the last year. So, getting that done, getting that updated, you know, we see the other side of it. So, your work is very much appreciated, and you know, that’s why we enjoy working with you. We see the other side of it. We see families come in here that did not do a proper job. And we get to them when, God forbid, something happens to a loved one. They come in; their stuff tends not to be organized. And I can tell you; sometimes the heirs do not look at the estate as a blessing. It’s like a curse. It’s all

— this stressful thing. What would mom want me to do? What would dad want me to do? How would they want it to be distributed? What do they expect of me?

And the way to get around that is through trust and wills. So, then your children end up having a better chance of liking each other and not fighting, which I’m sure you see, correct?

Tracy: All the time.

Greg: All the time. And I think the numbers are like 70% of families squander the wealth in the second generation. 90% of them squander the wealth in the third generation, I think, is that’s. I think that’s how it goes.

So, what’s the advantage, I think a will, people get, but if you could, just give like a quick benefit of a will, what’s the benefit of a will, what’s the benefit of a trust?

Tracy: The will is a document where you provide your wishes on paper, on where you want your assets to go if something happens to you, and then you name someone to be in charge. And sometimes that’s the more important part because if you have children, a lot of times your assets are split equally between your children, but who’s going to be in charge of that? Who’s going to be the person that’s responsible for getting all of these assets marshaled into an account, paying all the taxes, doing all the legal filings, and making sure that everything’s distributed properly?

So, you need to be able to pick that person. And if you don’t have a will, then Pennsylvania law writes one for you. And a very common misconception is that all of your assets go to your spouse. And if they’re not jointly titled, if they’re not in there solely in your name, that doesn’t happen in Pennsylvania if you have children. So, it’s very important to put that on paper what you want. And the other big one is tangible property. So, if you have, you know, jewelry or heirlooms, that’s what, that’s what the beneficiaries fight over. It’s easy to split the cash. It’s not easy to split grandma’s engagement ring.

Greg: Right. Yeah. I also think a very important choice is the attorney you use. And the good news is there’s a lot of great ones out there. If I could give you a compliment, I think what makes you unique is not only do you know the law, but you’re empathetic and caring at the same time, and you can actually listen to the family and see what their wishes are.

So, you put it on paper; then we make sure you know that it actually happens when everything’s titled correctly, et cetera.

So, Frank — Deloitte, 20 years, tell us who you typically work with and what your area of expertise is.

Frank: Sure. So first, I want to say thank you for having me today. I did some due diligence. I listened to the previous podcast, and very energetic, very exciting. I don’t know if we can do that with taxes.

Greg: Well, if you make them go down, they could. Right?

Frank: But yeah. As you said, I have with Deloitte for 20 years, always in tax. You know, here in Pittsburgh, you have to be versatile and do it all. You know, we serve big public companies. We serve small companies, multinational companies; we serve individuals, high-net-worth individuals, maybe some retired individuals, you know, here in Pittsburgh, we got to do it all. And that’s what I like. I like being, you know, diverse as opposed to very focused and narrow.

Greg: Yeah. So, here’s how, here’s how diverse Frank is. You ever watch him watch a sporting event, and he’s overly energetic? One of the teams is his clients. I had that experience recently. I’m like, okay, this guy’s just a little too fired up about this game. So, it means one of the teams happens to be his clients, oddly enough. So, you’ll focus on the tax side of it and on the income tax side of it, and Tracy will focus on the estate tax side of it.

So, let’s go to the estate tax first, and let’s go to the election. Now we’re going to do this middle of the road. But I think it’s important that people understand the facts. And then, by the way, higher taxes on the wealthy. And I, you know, some people may view that as good — they should pay more. Some people may view it as bad — it will slow growth. However you believe, that’s your thought. We just want to make sure that you understand the ramifications. And actually, the different proposals of what it could mean. So, one of the big ones is on estate taxes and the exclusion.

So, Tracy, could you do us a favor and take the listeners through where we currently are, and then the Biden proposal and what Trump would do on estate taxes on the exclusion?

Tracy: Absolutely. And just to take a step back, because one question that I always get with estate taxes is there’s confusion on what that actually is.

Greg: Thank you.

Tracy: Usually, states also have a state estate tax. So, there are two taxes. We’re usually talking about the federal and the state, and the state is very specific to where you live. So, for example, Pennsylvania taxes you through an inheritance tax on the first dollar that you have in your estate. In a lot of states, you have to have so much money, like maybe $2 million, before you would pay any state inheritance tax. So then federal—

Greg: By the way, here’s —so I was with someone last night. So, here’s the game. And I’m not saying that they should do this. I’m not recommending it. We do not give tax advice. But so you said, well, then that would be more income for Pennsylvania, but people are mobile.

So, I was talking to someone last night; they will go to Florida, right? You guys see this, they live in Florida for six months and one day — and that qualifies them to absolutely remove themselves from the Pennsylvania estate tax. Is that true?

Tracy: Yes.

Greg: It’s unbelievable. So, actually by having that tax from dollar one, it could cost Pennsylvania money and, you know who’s able to do that? Wealthy people. So, wealthy people are able to move and have a second home where they can spend six months. So, you know, once again, the wealthy benefit from that, not necessarily the residents of Pennsylvania.

Tracy: Right. And the Pennsylvania inheritance tax rates are not very high. So, if it passes to a child, it’s only four and a half percent now; I say only because some people, they don’t want to pay four and a half percent either, but it’s relatively low compared to the federal state tax, which could be 40%. So very, very different.

Greg: Right. But someone has $10 million. That’s a lot of money that the state could use. Right?

Tracy: Yeah.

Greg: It’s a lot of money, so. Okay. So, go ahead. So, then the exclusion, the national taxes, and the exclusion rates.

Tracy: So federal estate tax is then at the federal level, obviously, and with federal estate tax, there is an exemption that you get. So that’s the amount that if you have money under that, you don’t pay any tax. Once you get over that exemption, then that’s when you start paying.

Greg: So right now, people under $22 million — don’t worry about it. Right?

Tracy: Right.

Greg: Done. And that’s most people, I mean, it’s like 20, that’s a lot of money. That’s most people. So, I’m from Johnstown, that’s everybody. So yeah. It’s most people, $22 million. That’s most people.

So, take me, take us through, like under Trump, what changes, anything?

Tracy: No.

Greg: Until 2025, right?

Tracy: Yeah.

Greg: So, under Trump, which he won’t be a president then,I guess, even if he gets reelected. So, under 20, that’s the law until 2025, under Trump, right now, 22 million.

What is Biden’s proposal?

Tracy: 3.5 million.

Greg: 3.5 million. So, 7 million per couple or 3.5. Is it 3.5 million—

Tracy: Per person.

Greg: 7 million per couple.

Tracy: Yes.

Greg: So, it goes from 22 million to 7 million. And anything you over have over 7 million is taxed at what?

Tracy: Roughly around 40%

Greg: Around 40 plus state. Okay. Well, state goes back to dollar one. So yeah. So that’s the difference?

Tracy: And a term that’s thrown around a lot is what’s called a “unified credit.” So that means you get that dollar amount, either during your lifetime or at death. So, you can gift money away. So, let’s say you gift away $3 million during your lifetime. That’s okay. But you don’t get another 3.5 at your death. So that money gets counted against you.

Greg: Comes off your exclusion.

Tracy: Yes.

Greg: Yeah. Okay. So, like, so in 2025, it goes back to 11 million, it sunsets, right? What if someone did an irrevocable trust and gave the money away, and took money away from their 22 million?

Tracy: Now?

Greg: Yes.

Tracy: As of right now, they’re saying there’s no clawback.

Greg: No, clawback. Yeah. That’s what I thought. So, just an example, that’s a huge window of opportunity to do some planning, but now, but if Biden would be elected, he has said that he’ll make it retroactive back to January 1st. So, some planning would have to happen relatively quick. And the $7 million. What does that count?

Tracy: You mean asset wise? All of it.

Greg: Including insurance, unless it’s titled in a—

Tracy: In an irrevocable trust. Yes.

Greg: In an ILIT (irrevocable life insurance trust).

Tracy: That’s the difference with Pennsylvania because Pennsylvania, life insurance is not counted for Pennsylvania.

Greg: Okay. But it is for federal.

Greg: So that’s big. So, Pennsylvania, it’s not counted. It is for federal unless it’s in an ILIT

Tracy: Correct.

Greg: You have the ILIT; own it. It’s amazing. We just have, like, we have people come through, and they have, they have a substantial net worth, when you add everything in, houses, everything, and their insurance is owned by them personally instead of the ILIT! And by investing, putting it in the ILIT, it’s out of your estate and—

You know, I just, I saw a million-dollar cash value, $2 million death benefit, this person’s over, so they’re over the 40% tax. There’s nobody; there’s not any insurance in that. Like, you’re going to get basically back your cash value. And, but it just was owned improperly.

Tracy: Right. The thing to keep in mind too that I always hear questions on is about gift limits for the year. People think that you can only gift $15,000 a year.

Greg: Right.

Tracy: And you can’t gift anything more. You can gift $15,000 without it going against your unified credit.

So, you can gift, you know, $15,000 to a child, and you don’t have to file anything. There’s no reporting. If you want to gift more, if you want to give a hundred thousand dollars, then you file a gift tax return. And it just reduces that exemption amount that you get.

Greg: And we see gifting a lot with 529s. So, a family may say like, ‘Hey, we’re going to fund, or in some cases over-fund 529s. So, then we can, you know, educate, help educate generations through, you know, continuing to give the money down. And in that case, you can frontload it for five years. So, you can accelerate the gifting for children’s education.

Frank, why don’t you take us through some of the differences between the current tax policy proposed by Trump going forward and proposed by vice president Biden and give us an idea of some of the changes. So, let’s start with income tax. What would it be?

Frank: I’ll tell you this time of year is our favorite time of year when there’s a presidential election—

Greg: You’re a weird human being!

Frank: Because especially in tax, because this is where we get all the phone calls. And we’re, we’re the most popular guy at the dinner table now because you know, they got the debates coming up. And what happens in every debate? They talk about tax policy. And I, my favorite is I always sit there and listen for the loophole. That’s the buzz word everybody uses. They close the loophole. What loophole? Congress says you get to deduct it; I don’t know where the loophole is!

When it’s quite fun for us because clients always want to model it out, they want to understand, ‘Hey, if this proposal goes through, what does it mean for me right now? What’s it look like?’ So, for the next three months, yeah, it’s gonna be fun for us, but you know, obviously, we’ll see what happens with election day and answer your question, Greg, on the individual side, right? The top individual rate right now is 37%. So, under Vice President Biden’s proposal, he would bring it back up to 39.6%, which it used to be. Right. I always wonder where the 39.6 — why not 39, why not 40? Where did point six come from? So, if you can find that out for me?

Greg: That’s to pay for the accountants.

Frank: So, that would be the proposal. Now, President Trump wouldn’t make any changes, but he has said that he would have a special tax exemption for the middle class. He has some sort of proposal. We don’t know what it is.

Greg: Yeah. I mean, the new proposal hasn’t come out, so it’s like, to be determined. So, I did a little math think that you may bring that up. So, I did a little investigating, because people say, should you increase the taxes on the wealthy? So, the highest income earners today, the top 5% of income earners, pay 59% of the tax—the top 10% pay 70. The top 50% pays 96.9.

So, the top 50% of income earners pay all the tax, like 96 or 97%. I’m not saying they should, or they shouldn’t. So, then I thought, okay, so is that fair or not? So, I went and looked, and I said, okay, the top 10% pays 70% of the tax. So, I thought, okay, but what percent of the wealth does the top 10% — and they’re a little different. And because one’s based on wealth, one’s based on income, but and that’s a lot different, right. But the top 10% of people that have the wealth, they have 69% of the wealth.

So, the question becomes, should — so, so that’s, that’s actually somewhat, if you line those numbers up, which, you know, people that make more have the ability to pay more, but then what does that mean? Like at what point do you have things like, you know, loopholes, right? Or whatever they are — they set up trusts, or they move to Florida.
 
Because your effective tax rate, you’re not just going to say, like wealthy people aren’t going to say like, ‘Okay, here’s 3%. That’s a good idea. Let’s go.’ No, they do things, right? They’re a little more careful. Maybe they cut their expenses. Maybe they cut their consumption, whatever those things are.

What about on the corporate side? What’s the difference?

Frank: So, on the corporate side of the court, the current rate is 21%. All right. And so that came down from 35%, several years ago. So, under Vice President Biden, it would go up to 28%. So, it won’t go all the way back to 35%, but basically, he’s gonna, you know, half of it’s going to go back, back up so, that’s his current proposal, which, you know, could be, you know, big dollars to the corporations.

Greg: Costs. So, yeah. So again, what does that mean? Right. So, when it went down to 21, that makes it more competitive with the rest of the world. It has been a tailwind for the stock market because less taxes, more profit, profit is how you price the share of a stock or potential profit is how you price those shares of stock, and then that is the value of your 401k. 401k goes up or down.

Now, could they cut some costs, potentially, to keep their profit up? Because at the end of the day, there has been a lot of money spent by the government. It was unanimous in the Senate. So, it’s not like some people could say it was Republicans; it was the Democrats — unanimous. This was a pandemic that was extreme, that needed caffeine straight to the vein, trillions of dollars into the economy, get things moving again.

That’s what happened. Got things moving again. When do you take the money back out of the economy would be the question, right? So, the corporate taxes would go up and then—

Oh, let’s go back to estate taxes. Cause not only is it increasing the exclusion — or decreasing exclusion, potentially of 7 trillion or seven million — million, billion, trillion — 7 million —

Tracy: Remember that seven million is for a married couple.

Greg: For a married couple, but it also, there’s a proposal to stop — I think it’s important that people understand this — to stop the step-up in basis. Do you wanna explain that?

Tracy: Sure. So just take a step back and explain the basis in general.

Greg: This is why she’s good. Like, we like this, that’s it — like what’s basis? It’s like, more than one base — bases. No, I’m just kidding.

Tracy: Let’s say you have Apple stock, and you buy Apple stock for 50 bucks.

Frank: Or 500.

Tracy: So, what is Apple stock worth now? I don’t even know.

Greg: Call it a hundred.

Tracy: So, let’s say it’s a hundred dollars. Your basis is $50. So then when you go and sell that Apple stock and you sell it for a hundred dollars, you pay capital gains on the difference between your basis and what you sell it for. So, in our case, $50. And for any capital gains tax, I know it depends on the income tax rate, but—

Frank: Basically, 20% now, plus the net investment tax on top of it, 3.8%.

Greg: Plus, state.

Tracy: So how the current law is, if you pass away, your estate and your family, inheriting your assets, get what they call a “step-up” in tax basis. So instead of you inheriting the person who passed away basis at $50 for that Apple stock, your basis now becomes a hundred dollars. So then, if you immediately turn around and sell that stock after the loved one dies, you do not pay capital gains. You pay zero. President Trump plans, if he was elected, he plans to keep that step-up in basis. If Vice President Biden was elected, then he wants to repeal the step-up in basis.

Greg: How long has that been around? I mean, is that like, I don’t ever remember there not being a step- up in basis, is that right?

Frank: I’ve always seen it.

Greg: Yeah. And I knew that; I was just curious.

Frank: It’s double taxation, right? You’re taxing the estate once. And so why the beneficiary.

Tracy: Right. So, if that’s eliminated, though, then you would inherit that basis. And then when you go to sell the assets, and a lot of times you have to sell these assets in order to pay either the federal estate tax or the inheritance tax in the state that you live in, then you’re going to then pay capital gains. You’re going to pay your federal state tax, Pennsylvania inheritance tax, and capital gains on that as well. So, it could be a very big tax consequence on that.

Greg: Yeah. That’s the part that hasn’t received much attention, probably because I don’t think most people are aware of the basis, and you know, but that could be more meaningful for dollars than the exclusion going down. I mean, that actually could generate more revenue. Now, whether it’s right or wrong is for people to judge. But that actually could be a huge revenue, a lot of revenue to the government.

Tracy: People don’t realize too, is that it’s a lot of times it’s more beneficial to inherit right now, either under the current laws, it’s better, more beneficial to inherit property versus to gift it to your loved one. I mean, I get calls probably once a week. Should I put my child’s name on my house?

Greg: Yeah.

Tracy: Well, if you bought your house in 1940 for $20,000 and it’s in, you know, some up-and-coming neighborhood and it’s now worth three or four hundred thousand, that answer may be no, right? Because right now, you get that step-up in basis after you pass or your family does after the loved one passes.

Greg: Right. And by the way, when we talk about step-up in basis, that is true of mutual funds also. But when you use stock or property, it’s also like people like own a lot of mutual funds. It kinda accounts for that also. So, you have to, just have to think of that concept more, a little more globally.

So, then the capital gains tax, so the capital gains tax, currently is good, Frank?

Frank: So, it’s 20%, yes. With the additional 3.8% for the net investment.

Greg: If you make over like 400 and some thousand, right. Something like that. Yeah. It can go down to 15 or zero-based. Is that right? Yeah. Yeah. So, that’s what it is currently.

Frank: That’s right.

Greg: And by the way, that’s up. So, just so you know, that was, I remember when it’s 15%.

Frank: That’s right.

Greg: It wasn’t that long ago when it was 15% capital gains. Because again, it is, sort of, double taxation, right? So, you’ve already earned money. You’ve paid taxes on the earnings, and now it’s your money you’ve already paid taxes on. And then that grows, and you pay a capital gain.

What are the competing proposals out there by Trump versus Biden?

Frank: Yeah. So, Vice President Biden’s proposal would be, if your income’s over a million dollars, your capital gains will be taxed at ordinary rates. So, back up to your 37, 39.6% tax rate.

Greg: Okay. By the way, there are things you can do. So, like, strategies that we did when COVID hit in March and the market went down like really fast.

I don’t care how long you’ve been in the business. Like, I’ve been in the business since ’86. I still don’t like that. I mean, it’s like, it still makes you — it’s uneasy — because anytime it happens, it’s based around an event that we’ve never really seen before or some aspect of it feels different. Right.

So, but when the ma— but what you do is, back to the Apple stock, it goes from a hundred to 50 (now Apple didn’t), but it went from 100 to 50, you can sell it at 50, buy another investment that is extremely similar. Apple would be a bad example, easier to do it in mutual funds.

And then you capture that $50 loss, so any future gains you can offset. So, we were able, we have right now, losses for our investors, on the sidelines, so if there are any capital gains in the future, which there will be, we can offset them — and they don’t have to pay tax. So, if your advisor didn’t do that —a missed an opportunity. Now it’s a lot of work. We did it. Wow, wonder what we did. We were able to do it. We were able to do it in March, and we were able to do it last time, in December of ’18. So, there are strategies that you can do.

So, you said, capital gains go up over a million dollars. The capital gains tax goes up over a million dollars. How are dividends treated differently based on the two candidates?

Frank: So qualified dividends and capital gains are both taxed currently at 20%. So, both of them under President, Vice President Biden, if you make over a million dollars, both of them would go up to the ordinary income tax rate.

Greg: Okay. But it is for people making over a million. So again, people say, ‘Oh, that doesn’t really affect me.’ And but, you know, but it does affect some of our listeners. And it, you know, it’s just taxes tend to be a headwind to growth, right? So, taxes tend to be a headwind to growth, but that one doesn’t seem like it’s that extreme. As maybe, you know, 22 million to $7 million, that one could hit a lot of folks when you add all of your insurance and everything in. I’m interested in this; in fact, we’re going to have a future guest on and talking about, you know, they’re opening up a private school for underprivileged children. So, do either of you want to explain the Pennsylvania EITC?

Frank: So, the Pennsylvania EITC, the tax credit entices individuals to make a donation to a charitable organization and education organization. Let’s just use an example of, you know, $20,000. If you’re going to make an investment of $20,000 to this organization, it has to be a two-year commitment, first of all. Alright. And then once you do it, you will get a, I believe it’s an 80 or 90% Pennsylvania tax credit from your investment. So, you know, you know, if you’re making a $20,000 contribution, it could be an $18,000 Pennsylvania tax credit. And then your remaining $2,000 would be a charitable contribution for, you know, for your federal tax return.

Greg: So, think about that. Now you have to pay $20,000 in tax cause it’s so, because it’s like, it’s a credit, right? So, assuming you’re paying $20,000 and you’re willing to donate $20,000 two years in a row, you get a 90% credit. I think if it’s if you only do one year, what is it like 75 or something like that? It’s not the 90, but assuming you’re willing to say $20,000, I really care about this Catholic school or whatever. I really care about this place. I might as well take that money and donate it. And you have to do it through the credit, can’t do it directly to the school, and you get a 90% credit off your state. So, dollar for dollar. And then the 10% you write off your income tax. So, you could give away, you know, roughly $10,000 and it could cost you 700.

And if you really care about the school, that’s like a great thing. That’s one of those things. If you really want to maximize your life and say, I want to make an impact, that’s one way to make an impact. And the government, our state is really going to help you do it by filling the void in some educational facilities.

So, you know, let’s go back to tax, the current proposals between the two candidates because one that isn’t getting any attention — startled — is how it changes for the retirement savings.

So, one of the things that isn’t getting much attention, that I’m surprised that affects a lot of different people because so many people are contributing to retirement plans — that’s how they’re saving for their retirement. You know, it’s been a huge change, where you used to work for a corporation for 30 years, you’d have a defined benefit plan, meaning that they would define the benefit when you retire. And they’re really not near as popular as they used to be. Now it’s defined contribution plans. That’s how people are able to retire. They have their 401k. That’s why I keep mentioning the impact on 401ks. They have their 401ks; they have a defined contribution that they contribute X amount, and it’s their money, and they’re in control. And one of the proposals that I’m surprised isn’t getting more attention, maybe cause of the lack of clarity is, is the difference in proposals on retirement accounts.

Frank, would you just like to address what that is and what’s being proposed?

Frank: Sure. So, this is under Vice President Biden’s proposal. So, under President Trump, there are no changes under Vice President Biden, and I know no one could see me when I use air quotes on equalize. So, the proposal is, they will equalize the tax benefits associated with these defined contribution plans. I personally don’t know exactly what that means, and where does it go? I think it’s a, ‘Hey, maybe in the next couple of debates this might come out.’

Greg: That’d be interesting. Yeah. Cause I mean, I guess equalized means it’s going to be less beneficial for people of means to contribute, more beneficial for, you know, for people with less means to benefit and equalize. So, you know, more like a flat tax benefit versus graduated. Like it is on income, on the benefit. I think it’s more like a flat, you know, you’re able to do 22%, and I’ve heard it explained, but for me, it wasn’t clear, so I’m sure that’ll come out. So, everybody, listen for that. Listen for what the proposal’s going to be.

Frank: Cool.

Greg: Good. Tracy, I just want to, I want to go back to the 7 million because I just don’t want there to be any confusion when we say $7 million. That’s per couple, not per individual, and it’s only when you file something for portability. Do you wanna explain that?

Tracy: Right. So, a few years ago, well even back up even further, the traditional estate planning, years ago, was that you would have an A trust and a B trust because you could not add spouses’ credits together for federal estate tax. Well, they eliminated that with portability, which means two spouses, they can add their credits together. So, 3.5 and 3.5 under Biden or 11 and 11 under Trump. And then you get that as your federal state tax. Well, in order to preserve your spouse’s unused exemption, when they pass away, you have to file a federal estate tax return, and you elect what’s called portability. So, you follow return. It’s just for reporting purposes, that show the assets that they had in their estate. And then, most of the assets will get a marital deduction. So that then you get your entire spouse’s — they call it the DSUE. So, the decedent’s unused exemption. So, then that’s how you have to preserve that. So, the key is, if your spouse passes away, there’s a tax filing at that point.

Greg: Complicated. Right. But here’s the thing. If I were a listener, here’s what I would, all you need to think about is, “Okay, well, that one applies to me. I better call someone.” “That one applies to me, I better”— and as we’re listening to this, make a checklist. And by the way, we are happy to play point guard for anybody listening to this, to make sure — we will worry about all this for you. We will put the right professionals in the room or refer you to the right professionals. So, then we can, you know, we can just make it a little more pleasant for you and your family.

Frank, another tax that hits anybody that has a paycheck, right, is the social security tax. And there are some meaningful changes. They’re a little complicated. Could you talk about the potential changes under President Trump or potential President Biden?

Frank: Sure. So, President Trump, in August, he actually had a directive related to social security tax. And so, he’s made it very clear that he’s looking for a reduction in social security tax on the employees. Vice President Biden, his proposal is focused on the donut hole. The current law right now is a maximum of $137,700. So, if your salary is maxed out at 137,700 is the max that you pay your social security tax, and then that’s it. Now Medicare goes on forever as much as you make, but social security is capped out. So, under Vice President Biden’s proposal, his proposal would be to turn it back on when your income hits $400,000.

Greg: So, turn it back on. I got that. So that’s the donut hole. So, turn it back on for the employee and the employer?

Frank: That’s correct.

Greg: It’s not clear!

Frank: No, it’s not clear, but right now, you know, you pay half, right? Then the employer pays half; the employee pays half.

Greg: Wow. No more high-paid employees. Wow. Yeah. So, that’s meaningful. So that’s 6.2% additional tax on everything over $400,000, in addition to everything over 137?

Frank: 137,700.

Greg: Wow. Okay. That’s interesting. And then one of the other changes in the pass-through. So, you want to talk about the changes that may be happening.

Frank: Sure. So, when we had tax reform several years ago, the corporate rate went down, as we talked about 35% down to 21%. A lot of pass-through businesses were up in arms—

Greg: And they would be, such as?

Frank: So, a partnership, an S-corporation, anything where the entity doesn’t pay the tax, its income passes through to the owner, and the owner pays tax. So, they’re taxed at their individual rate, which is obviously much higher than 21%. So, as part of tax reform, there was a special provision put in the code, section 199A, that’s for domestic businesses to get a special 20% deduction on their income. So, that’s what we have today. So, there are some businesses that don’t apply to that; Greg, you, and I, we don’t get that. But if the company is a manufacturer, makes stuff—

Greg: An architect.

Frank: An architect, exactly.

Greg: So, tax is interesting to me. So, an investment firm, no; architect, yes — it’s crazy.

Frank: Better lobbyists.

Greg: That’s exactly what it is. It’s crazy.

Frank: So right now, that 20% deduction is taken on your tax return. But Vice President Biden, he’s proposing that he would start to limit that deduction once your income hits $400,000.

Greg: Okay. That seems like that’s an important number coming up, 400,000. Right. So that seems like we hear that number an awful lot.

If you were a listener and you were like, okay, and you’re like, okay, from tax, from wills, estates, trusts or elder law, right. If you could tell our listeners, each of you, here’s three things you should think about that you think would benefit the majority of the listeners.

Tracy: The big one is to find your dusty binder with your estate planning documents in them and read them.

See who’s in there, see what it says, and see if it’s still current. And if you don’t have an estate plan, then—

Greg: By the way, we will find beneficiaries of ex-spouses. Like, we see it, that’s usually — now some are very, some divorces are very amicable. My experience has been that’s not how most people want it but go ahead.

Tracy: Or a deceased sibling or, and then it just makes a mess for your family. So, I think that’s the first thing is, find, you know, where you have your documents, take a look at them, read them and just make sure that you’re comfortable with what they say.

Greg: And wait for our clients. You know, we do have a secure electronic vault where you can put them all electronic, so you can have access to them, in addition to in a safe somewhere.

Tracy: And then I’m cheating. Cause my number two is going to be building off of number one. I’d say number two; the big one is looking at the powers of attorney. I think those get glossed over a lot. A lot of people focus on their will. They focus on trust. They think that’s important, but with the aging population and we saw it a lot with everything going on with COVID. I had all these clients that were in nursing homes, and then the nursing homes were on lockdown. So, people were not going in and out. And you know, mom in the nursing home would always go out with her daughter to the bank, that was kind of their day out trip, Sundays. They went to, you know, Mondays, they went to the bank, got some money out. Well then, they weren’t able to do that. And mom didn’t have a power of attorney. So now, everything was stuck. There was nothing that they could do to help mom pay bills because nobody else was on that account. And they didn’t have a power of attorney in place. So, kind of building off of one is, I think, making sure you have updated ones, and if you’re in Pennsylvania, they changed the laws in 2015. So, you really want your documents to be later than 2015.

Greg: Number three would be?

Tracy: Now, I’m thinking of two! Look at that. I have two in my head. One, I think, is that beneficiaries, like you were saying, look at all those beneficiaries and make sure they align with your estate plan.

Because that’s one thing, I see when I’m doing the estate administration side. So, when a loved one passes away, and I help that family through the process, they either never updated beneficiaries to align with their estate plan. So, they might’ve had an old trust beneficiary of a retirement account, or something is in that trust that no longer exists where it really should have gone, maybe outright to a child. So, making sure that those beneficiaries are updated is really important. And then I think having conversations with your children, I think that’s really, or your family members, if you don’t have children and on who’s going to take care of your situation: one, if you pass away or two if you become incapacitated. There’s a lot of people that are very, very private with their assets and their information. And I think that’s great if you work with someone like Greg because he usually knows about stocks, you’re comfortable telling him all about the assets. Maybe your family doesn’t know about what you own or where your assets are titled, but having somebody know where those assets are, is so important. Because I can’t tell you how many estates we have where we don’t know even where the bank account is. If there are life insurance policies—

Greg: Oh, the kids, they get them based on what’s coming in the mail.

Tracy: Yes.

Greg: “Oh, we have an account there. Oh, there’s an account there. Or there must have been an insurance policy. Oh my gosh, we owe this.” It’s like every day they get the mail, and that’s how they figure out what’s going on.

Tracy: Yes. I had an estate once where it was a year and a half later, and they owned individual stocks, and that stock had not paid a dividend. So, there wasn’t any tax reporting. There was no dividend. And then it finally did, and it came out of the woodwork.

Greg: Where’s that? Yeah. So, we can’t encourage folks enough to do family meetings. We at our house, the Weimer house, we do it on December 26th. We have a family meeting, and that’s because we think family meetings are important. It also encourages them to be home for Christmas. So, if they want to be in the will, you gotta be there. So, what we do is we literally, we, I think we’ve done three, and they’re getting better. And, you know, I hope we’re going to do them for the next 20 or 30 years. And by the time 20 and 30 years come, they’re going to have a better idea of how to invest — the values, the expectations because I, I clearly don’t want any assets to be squandered, but more importantly than that, I want everybody to get along and have a relationship.

And, and the way you do that is: you communicate, I said earlier, 90% and 70%, you know, the second generation, third generation things are squandered. And it’s because of a lack of communication. They’re like, “Oh, I don’t want to talk to them. I don’t want them to know. I don’t want them to get lazy.”

Well, I mean, I’m only fifty— just turned 56. So, I’m going to be around for 25 30 more years. So, if my kids are waiting to get my assets, they’re going to be broke for like a really long time. So, but, when they do, I want to make sure that they’re handling them the right way, so they can pass them on to the next generation. I know there’s a belief out there that, “I don’t want my kids to get lazy.” You’ve done a great job raising your children; at the age of 40, your children are going to be what their children are going to be. And it’s not going to make them lazy if you do it in the right way.

So really important, and by the way, you can still communicate without being specific on all the numbers. But having a conversation among the children is really important. And we include the spouses because spouses can fight just like children can fight. So, we bring everybody together to talk about it. And I’ll tell you, the first one was weird. You know you got to get over that. And then over time, rightfully so, it becomes more comfortable.

Tracy: Nothing says Merry Christmas and happy holidays like talking about your will.

Greg: That’s it! Here we go, right, right. So, if my kids pushed me down the steps, we’ve had this conversation.

Frank: what, go ahead.

Frank: I’d say they’ll do it before the exemption goes down.
  
Greg: Right, right. Hurry up. So, Frank, three things, if people are listening, what should they be doing?

Frank: So, the first one is plan. There are so many times we see people just come around April 15th; here are all my tax documents—

Greg: In a shoebox.

Frank: In the shoe box. And it’s like, Oh my gosh, I owe $100,000. Like no planning. No thinking about the transactions during the year, the income, the taxes paid, just showing up on April 15th, and being just shocked and surprised.

Greg: Think about how long someone takes planning their vacation versus planning their life financially or taxes. I mean, if you spent more time on the tax side, maybe you could take a better vacation. Right? You wouldn’t have to go to the condo place. You can do whatever. Save a hundred grand.

Greg: So that’s one.

Frank: So, the second one, I’d say is, just be educated when it comes to taxes. So, we’re talking a lot about Vice President Biden, President Trump, but keep in mind, Congress has to be involved too, right? Congress is generally where tax policy starts.

Greg: Right. And by the way, you know, clearly, the house is Democratic, and it looks like it’s gonna stay that way. The Senate also looks like it could go to the Democrats. So, it looks like it. And that’s just, and I’m not political, you go on RealClearPolitics. You go under the Senate map, and you’ll see that it’s 47 Republican, 46 Democrat, and then seven toss-ups and six of the toss-ups are on the Democratic side. That’s polls. We all know polls aren’t always right. But if you listen to the polls, you’re right. I mean, you have to, you have to watch all of this as you’re anticipating tax policy.

Frank: So, so that’d be my advice. Just be educated and, and focus on what Congress is saying as well. Because a lot of times, that’s where policy starts. Right? I would say the third thing would just make sure you’re doing tax-efficient retirement savings. Right. Everybody’s working so hard, and you’re so focused on right now, right now, right now, but thinking about the future, right, then retirement, but having someone advise you, even if you can’t do it yourself of just, you know, “Hey, how do I do this in a tax-efficient manner?” Because there’s a lot of inefficient ways to save for retirement, but there’s also a lot of efficient ways as well.

Greg: I’ll tell you another virus out there that’s dangerous. The virus of defined benefit plans that I explained to defined contribution. Because what companies have said is, it’s now the responsibility of the individual to contribute, defined contribution plan in your 401k. And so, now it’s not like, okay, you work there for 30 years, you get 80% of your salary, and you stayed at the same employer the whole time. It’s not like that. Your retirement is going to be based on how much you saved.

And the virus is: not sure America is retirement ready. Right? So, America may not be retirement ready. And that’s why you have more of “soft” retirements where people at 60 or 65, they don’t really stop working; they tend to get a part-time job because they can’t really afford to be able to retire. So, the earlier you can start, the better. And couldn’t agree with you more, Frank, do it a tax-efficient way. Get the match from the company. It’s amazing how many people have a 401k, and they don’t contribute. It’s just; it’s truly remarkable.

Or, or we see it all the time. When we look at their allocation, they’re in; they’re in cash or bonds. Like, and again, that could be right (probably not), but it could be right. Because it’s the last money, you spend. So, it has the longest timeframe. So, it should be where you’d accept the most fluctuation, but for people to be in bonds when they have a 20-year time horizon or 30-year time horizon is unlikely to be the best option. It could be (hedge), but unlikely. Fair?

And by the way, we’re just trying to give information because what we’re trying to replace is facts with feelings. And some people may say higher taxes are great because we want to reduce the debt. And that’s the way to do it.

Other people may say lower taxes are better because they’re not increases growth, and that’s the way to increase or reduce the debt. Some people may; I shared the numbers on what wealthy people are paying today, you know, the percentage, some people may think they should pay more. You know, it would be disproportionate to what, you know, where, where the money is allocated. But it’s important that people just think about that and take the emotion out and come to a good, a good decision.

So Frank, Tracy, thank you so much. That was just a ton of information and truly just nuggets that people can use. And I know for our listeners, it’s like, “Whoa, that’s a lot,” but, but please reach out to professionals, get with someone you can trust.

Let us help you. Call Frank. Call Tracy, but let’s make sure that we understand the planning behind taxes during your life and then equally important for your legacy. So then, ultimately, we can make good decisions along the way.

So, thank you so much. I really really appreciated the time and enjoyed the conversation.

Tracy: Thank you, Greg.

Frank: Thanks for having us.

Greg: Thanks for listening. If you’d like to hear other subject matters that may be of interest to you, please check us out at confluencefp.com/podcasts.

Confluence Financial Partners — The Power of Perseverance: Chris Hoke | Episode #9

Greg: J.K. Rowling’s Harry Potter series was turned down by 12 publishing companies. Thomas Edison was called “stupid” and “unteachable.” Walt Disney was fired from the Kansas City Star for lack of creativity. Our guest today, Chris Hoke, went undrafted in 2001. Imagine that.

Greg: Why do I say that’s unbelievable? Cause Chris Hoke went on to play for the Steelers for 11 years. Play in three Super Bowls, win two Super Bowls, have a starting record, 17 wins, and one loss. Candidly, what he’s done since he retired is equally impressive. After the Steelers, Chris has gone on to have a successful business career and also make a wonderful impact on the Pittsburgh community and, at the same time, be a great husband and a great father.

Chris, thank you so much for joining us today. I’m really looking forward to this conversation.

Chris: This is awesome. I’m excited you asked me to be a part of this.

Greg: Oh, that’s so nice of you to say when we spoke, what was it, two weeks ago on the telephone, okay, what can we talk about? And I said, ‘Hey Chris, what do you think?’ And boom, an hour later, this may be the easiest podcast I ever—

Chris: Two high-energy guys! Just couldn’t stop talking, right? It was great.

Greg: Well, we appreciate it. I think the listeners we’re really going to learn from you. And, one of the things I’ve, as I’ve learned more about you and I’m going to tell you when I first met you, I have to tell you this now. Yeah, so years ago, and I wouldn’t expect you to remember, but years ago, I came in to speak to the rookies. And we were in an Italian restaurant, I think, over in like Fox Chapel.

Chris: Okay.

Greg: And I came in to speak with the rookies. And that was your rookie year. That’s how long ago it was. And that’s the first time I met you, and there was something about you. I mean, I remembered you from then. So, I was really looking forward to this and, and following in your career and

Learning more about you, what is really amazing is not only your success but how you have absolutely overcome adversity.

Chris: Oh, man.

Greg: And whether you’re in sports, business, as we’re finding out in the markets, you’ve got to survive adversity. You’ve got to be tough. Why don’t you help our listeners with, what are some of the things you’ve done to get through those difficult moments? 

Chris: Listen, life is filled with adversity, right? Everybody’s going to face it. Doesn’t matter how much money you have, how much money you don’t have. It doesn’t matter your circumstance of life. You are going to face adversity, and so it’s how you look at it, how you attack it. And there’s something, Coach Tomlin always said, ‘You’ve got to smile in the face of adversity,’ right? Smile at it and keep going. And the people that are successful, the people that achieve greatness are the ones that power through it and smile all the way.

You think of like Hines Ward, right? Where he would just blow someone up and just smile. That’s, that’s kind of, in my mind, that I see in my mind’s eye, when I think of someone’s smiling in the face of adversity. And in my life—that’s almost the story of my life, Greg is overcoming adversity.

You know, I came to the Pittsburgh Steelers like you referred to. I was an undrafted free agent, right?

Greg: I didn’t realize that. Tell them your signing bonus.

Chris: You see millions and millions of dollars being thrown around the NFL right now. In 2001, the Pittsburgh Steelers called me and signed me to an unrestricted free agent contract. My signing bonus was $2,500.

Greg: Unbelievable.

Chris: After taxes was $1700. I had a smile from ear to ear. I’ve got 1700 bucks, more money I’ve ever had!

Greg: And how many Super Bowls?

Chris: I got two Super Bowls.

Greg: Two Super Bowls and you played in three.

Chris: Yeah.

Greg: And I think I heard a stat that is amazing to me. What is your record as a starter?

Chris: Okay, so this is a great stat. So, you know, the majority of my career, I was a role player. So, I played all the games, I was a big contributor, but I started 18 games in my career. And of those 18 games, the Steelers were 17 and 1.

 And let me add to that, the one-loss that we had was out in Oakland, right? We held the Oakland Raiders; I want to say to 98 yards total offense. Total offense! And Ben had a fumble recovery returned for touchdown and had an interception for a touchdown. And we lost the game.

Greg: Blame it on Ben.

Chris: No, I’m just telling you! You can blame who you want. But the reality is, the defense came through. It was obvious to me. Listen, every NFL player, every professional athlete you play the game long enough, you’re going to have an off day. Ben’s had a zillion more great days than off days. That was his off day.

Greg: Well, I think in the season we just completed, we know how important he is to the team.

Chris: Absolutely.

Greg: Truly incredible. So, so you go from coming in 2,500 bucks, free agent, right? Not drafted. And then you go to winning two Super Bowls. Some, you had to do something in between there that was really important to help you overcome that adversity.

Chris: Yeah. I’ll tell you what Greg. It was a grind. It really was. And I had to be mentally tough.

Greg: Did you ever want to give up?

Chris: Absolutely, I did. But I didn’t.

Greg: Lesson learned, right? I wanted to give up, but I didn’t.

Chris: Absolutely. That’s a Kenny Chesney song, “But I didn’t.”

But let me tell you. So, I was in the first training camp, and it was, I mean, I came into camp, thought I had a great off-season training program, OTA as they call them. We come in, out of 10 defensive linemen on the roster. I’m 10. And luckily, Casey Hampton held out, and he held out of that camp, and it gave me an opportunity to get some more snaps. I was able to prove that I, you know, I got something inside of me.

Greg: Right.

Chris: And I remember after the first couple of weeks, I still wasn’t getting a lot of snaps. I really wasn’t, even though I had the section one from Casey — I worry about what it would’ve been like if Casey would’ve come to on time!

Greg: Right.

Chris: Right. So, I remember calling my wife and being in tears, ‘Hun, I don’t know if I can do this. I don’t if I can continue on because I don’t have a chance here. But there was something inside of me said that if you give up now, you’ll regret it the rest of your life. And so, I continued to move forward. Continued to grind. Continued to work. And there were a lot of sleepless nights. I woke up many times, Greg in sweats. Not sweat clothes, sweats, sweating.

Greg: So that’s a good lesson. Whether you’re a young athlete, whether you’re an entrepreneur, whether you’re an investor, whether you’re watching panic in the markets, right? I mean, and it’s not to suggest just because you keep going, the pain stops. It means if you look out five years, you’re going to be okay. But you have to look at the horizon and so many people in times of adversity like you had, right?

Chris: Absolutely.

Greg: The times of adversity, you shrink your time horizon. Instead of looking out, you looked out and said, someday, I’ll regret this.

Chris: Absolutely.

Greg: Investors that are long-term, if they act irrationally in the short term, someday they’re going to regret it.

Chris: Impulsively, right?

Greg: Impulsively.

I heard a stat on Navy Seals. 80% of Navy Seals that ring the bell quit before the physical activity. Not during or after, in the anticipation—

Chris: Absolutely! It’s in the anticipation!

Greg: It’s the anticipation of continued pain.

Chris: Yeah. It’s the fear of that pain, and people fear hypotheticals. People, that’s the problem is, you know, I look at this and I think, man, what if I don’t make the team? How am I gonna go home and talk to my friends? How am I going to go tell people I didn’t? I didn’t make it? Or what if I get into the game on Friday night and the first game’s against the Atlanta Falcons, which it was, my rookie year, and I don’t play well, and I’m embarrassed. It’s all the fear of what could happen.

Greg: What happens if the market keeps going down for three more months? I have no idea what’s gonna happen in the next three months. You didn’t have any idea what was gonna happen with the Falcons. You knew if you continued to work hard, at the end of the season, you’d be happy and someday, two middle-aged guys would look back and say like, Hey, it all worked out. Same with investors when they look at the long term. Another thing you said to me when you joined the team, you were very careful of the players that you spent a lot of time with.

Chris: Sure, sure. You know, one of the things is you surround yourself with greatness. I wanted to surround myself with guys who were been-there-done-that guys. Guys that had been successful in the NFL, so I like to talk to. Back then, it was the Aaron Smith and the Kimo von Oelhoffen, right?

Kimo had been around the NFL for a long time. I roomed with Kimo, and I would talk to him about his techniques. I would ask him what he would look at when he was in his stance, in a certain defense, or how he would react to certain blocks. I tried to be—

Greg: A student

Chris: I wanted to be a student of the game. In order for me to survive in the NFL for 11 years, I had to love every bit of football, not just playing the games. I had to love the preparation. I had to love the practice. I had to love that, you know, anticipation of the game. I had to eat it. I had to sleep it.

Greg: You had to love the process.

Chris: I had to love the process.

Greg: Right?

Chris: Yup.

Greg: I mean, and that’s true again in business. That’s true. It’s interesting how it is parallel, in that you just have to absolutely love the process.

Chris: You do. And, and you, you sent me in a comment earlier that I want to kind of expound on a little bit. You know, what keeps you going? How can you smile in the face of adversity?

I think there’s two things that come to my mind is number one; you have to have foundational principles. You have to stand on something. And if you’re standing on sand, if you’re standing on what other people want you to do, if you’re standing on what other people are telling you to do, you’re going fall, you’re going to quit. You have to have rock-solid foundational principles for you to stay strong in adverse moments. Right?

And number two then is having goals. I mean, goals are huge, right? I heard once that if you don’t write goals down, there’s a thought, and they come and go. They’re fleeting, right? So, right. Have these goals, long-term goals and when you’re going through adversity, when you’re going through

A downturn in the market, stay true to your goals, stay true to your long-term values and goals, and everything’s going to come out on top.

 Greg: It’s so true. It’s interesting how people say; I’m a long-term investor. My goal is to invest for 30 years from now for my great-grandchildren. And then it’s like, “Hey, what is going on in the market? Do you think we should get out?” It’s the goals.

And how do you go about setting your goals? How do you go about tracking them? Um, my family will tell you that we have goal days in the Weimer family, and I’m a little bit of a goal nut. So, I put them on a graph. I have five that I’m trying to achieve every quarter. I have daily things I want to do. How do you keep your, how do you set your goals, and then how do you keep them in front of you, and then how do you track them?

Chris: Well, I mean, I’m not as technical as you, I don’t have on a graph or on a spreadsheet or like that, but I’ll tell you I’m old school. But the way I do that, first, I tried to discover my goals. I tried to discover what it is that, what are, what do I want to accomplish? What do I want to do? What am I interested in? Where do I want to go? What do I, where do I want to take my family? So first I’m discovering that, right? And then I try to come up with a plan. How am I gonna achieve those goals? What are the steps I need to take to achieve the goal that I just discovered, this goal that I just set? And then you gotta go ahead and act, act on it, and move forward on your plan.

 And during and after you’ve got to reflect, you’ve always got to be in a state of reflection, reflecting, how am I doing? Where am I? Am I acting on the steps that I came up with, the plan, the game plan to ahieve my goals?

Greg: And did you do that when you were in the NFL?

Chris: I always had goals. I always, it was actually two days ago. I found my journals. I kept journals during training camp because I thought, I’m gonna keep it for my kids, now I’m excited I had them. At the start of every training camp on the first page. I had my goals for that year.

Greg: That’s awesome. So, I had read, I don’t know where, I listened to Lou Holtz, say like 116 things he wanted to do. So, what it may have been 120, I don’t remember the number. And so, I thought that sounds like a good idea, and so I did it. So, I wrote down, and I think I came up to 106, 107

Whatever it was. And just recently I found that notebook. Yeah, that’s amazing. Just by writing them down. Yeah, they happen.

Chris: They happen.

Greg: But you have to visualize them. You have to not only think about what they’d look like when you get there; you have to think about what it would feel like when you get there. It’s the feel thing.

Chris: There’s something powerful about sitting there and, and thinking about your goal and then imagining yourself achieving that goal and what that feels like when you achieve that goal.

Greg: If I do or don’t.

Chris: If you do or don’t, but for me, you want to achieve that goal. What I try to do is I, if I want to, you know, get a— I don’t know what it is — I mean, if I want to buy a certain car, I guess, right, or whatever it is, right. That’s the goal. You write it down. You ponder, I think about it. And then you think in the future, what would it feel like when I write that check?

Greg: That’s it.

Chris: Pay for that car. And that feeling, it seeps deep inside you, man. And it does something powerful that catapults you on the path that’s in that goal.

Greg: So, when we are helping people find their goals, cause not everybody is goal-driven like that. So, when we sit down with clients, we have to really help them think about “what they’re all about, is really all about.” And you can just see the change in their body language and their, just when you say like, okay, grandchildren’s education, or like, you know, creating a legacy, or making sure that my family’s able to go on fabulous vacations to create moments together, whatever those things are. And when we really talk about them and then put together a plan around them, at the end of the day, it’s how we help people maximize their life and maximize their legacy, which you and I have talked about.

 But some people aren’t, some people aren’t necessarily driven like that. But if you can be like that and you are an extremely intentional guy, if you do behave that way based on certain.

fundamentals, certain foundation, and then you really feel like what you want your life to look at; then, life just doesn’t happen to you.

Chris: Nope. You make it happen.

Greg: You make it happen.

 Chris: My dad used to always tell me when I was a kid, he said, there’s three types of people in this world. Have you heard this before?

 Greg: No.

 Chris: So, the first person makes things happen. The second person watches things happen. And the third person says, what the heck just happened?

 Greg: Right. Make it happen.

 Chris: He’d always tell me, my dad was a very successful businessman in Southern California, and he would always tell me, make things happen.

 Greg: Make it happen.

 Chris: Don’t let it just happen to you because it won’t happen very often.

Greg: Yeah. So, what rituals do you have? So, you put your goals together, and my guess is you have some, you have some big goals, and I know your morals, and I know the type of person you are and you — that are a great foundation. What type of rituals do you put together in a daily basis to make sure you’re in the right, you’re in the right state to achieve those goals?

Chris: I think it’s always getting up ready for the daily grind. Right?

Greg: And what time you get up?

Chris: I get up at 5:00 a.m. I’m at 5:00 a.m., down in my office. I do some deep thinking, pondering, I study the good word. And then I study other things in the morning.

I get up and get a great workout in. I always got to get that workout, and I don’t feel right during the day, Greg, unless I get that, you know, hour of exercise in the morning. But you can’t do that if you’re waking up at 7:00 a.m. The day’s gonna pass you by. Right. So, you gotta get up at 5:00 a.m. and get those things done. I read something I think two days ago that most billionaires get up at 4:00 a.m.

 I’m thinking; I’m starting, I’m starting to play. Do I get up at 4:00 a.m? Dad-gum! I gotta go to bed at like seven. My wife won’t like that with five kids at home. But you know, it’s, it’s um, so the daily grind, it’s getting up and being intentional with your day. I have an appointment—

Greg: Do you have a daily plan? Like, do you have a daily plan where—

Chris: I do. I have a notebook. It’s an old school notebook. Right? So, a spiral notebook, it’s not one of these, like these businessmen notebooks that are like the focus plan or whatever it is. It’s an old spiral notebook. And I was, I’m pondering, I think through my day I write down all the things my to-do list of what I want to do. What I like to do is, I love reading the book and listening to the audiobook of Seven Habits of Highly Effective People.

Greg: Oh yeah, Great one.

Chris: Awesome stuff, right?

Greg: Isn’t that the one that Covey, he said: “The main thing is to keep the main thing the main thing.”

Chris: The main thing. Yeah. And, and so he talks about, you know, things that are important and a priority and things that aren’t important, but a priority. You know, he talks about those different quadrants.

Greg: Urgent versus important.

Chris: Yeah. That’s what it is. Urgency. Yeah. Important.

Greg: Because urgency tends to take over rather than over importance. I’ll tell you; this may help you.

One of the things I do is I put my five goals for the quarter on top of my page every day. And then I

Think about, okay, they’re my five goals I want to have this quarter. And then I think, okay, what’s the one thing and the book, The One Thing, great book, if you haven’t read that one. Oh, it’s a good one. What’s the one thing I need to do today to make the biggest advancement on those goals? And then, what’s the next three, and the next five? So, if I showed you any of my days, I have them color coordinated based on my one thing, my three things, and my five things that I need to get accomplished every day. If I do that. If you total it up, it’s what, nine things?

Chris: Yup.

Greg: So, I could get nine things done. If I get my nine most important — forget about that, if I get my three — forget about that, if I get my one most important thing every day, it’s gonna make a big difference if I do that every day.

Chris: I like that.

Greg: And then, ideally, I’d have more than that.

Chris: Yeah.

Greg: But it just may help you. I mean to keep focus on the main thing.

Chris: Yeah, absolutely. You know I said I write in a notebook and it’s bound notebook, and I try to follow that every single day cause you know, I’ve seen too many people with, you know, their minds all over the place and they don’t have a plan. To me, a to-do list is a plan of how what, what’s important to you that day.

Greg: Right.

Chris: I like that, though.

Greg:    The One Thing, read the book, it’s a good book, The One Thing.

Chris: I’m going to read it.

Greg: So, father of five, you got a lot of energy. Your focus, how do you transfer that as a dad, to your five children?

Chris: Oh, listen, they’re everything to me. My wife is my best friend. Um, my five kids, everything I do is for them. And it’s important in my life.

 Greg: And it just came from, I wished, I wish this was videoed because your whole body changed. I mean, that was just so clear. So, that came from your heart.

Chris: Yup. They’re, they’re everything to me. And, I think, yesterday, you know, so many things are going on in our lives, right? And two nights ago, my 14-year-old daughter, who is just my princess, she says, ‘Hey dad, uh, you know, I have tomorrow off from gymnastics,’ because she’s a level, 10 gymnast.

Chris: And she says, ‘Hey, can you pick me up from school and take me to get a Cherry Limeade from Sonic. And you know, 2:30, right in the middle of the day. And I was like, ‘Oh man, it’s gonna…’ At first, I told her, I said, ‘I mean that’s a tough time for me.’ And when she walked away, I thought, ‘Oh, that was the wrong answer.’ So, I walked over and said, ‘Honey, I’m going to pick you up at 2:30 tomorrow.’ And I picked her up, we went to Sonic up in Wexford and grabbed the Cherry Limeade together. And that night, she came with me with a hug and told me, ‘Thank you for taking me.’ And it’s a special time, you know? And that’s what it’s supposed to be like, right? I mean, we can deal—

Greg: Children will never forget those moments.

Chris: I’ve told my wife, listen, I can deal with stress outside the home. I can deal with adversity outside the home. As long as our family is strong. And I think that everybody if they have a look deep inside themselves that say the same thing. You know, sometimes we get caught up in what’s going on outside the home. We get caught up in the ways of the world. We get caught up in trying to be rich or trying to be successful in our business. But really, I believe with all my heart, Greg, that the most important work that we can do with individuals, is the work that goes on in our home.

Greg: My guess is if you had a choice: successful entrepreneur, successful football player, all-world dad, all-world dad wins every day of the week.

Chris: 100%. I hate missing my kids’ events. I let very few things get in the way, and if I can help it, I’m there. I mean, I’m at all their rec basketball games or school basketball games or school football games. I mean, I’m at everything. Gymnastics meets soccer games. I’m happiest when I’m at their events.

Greg: That’s awesome. Congratulations on that. That’s inspiring. Um, so you have transitions, right? So, between being a dad, being a football player, now being a successful entrepreneur, how do you transition? Because it is about the transitions, right? So many people, we have transitions in our life. We have chapters to our life. How do you transition from being a football player … to a successful businessperson?

 Chris: Oh, man. A lot of the lessons that you learned as a football player can be applied to business, right?

And honestly, there’s a lot of “same as” and you’ve seen that. I mean, a lot of “same as.” In business, for example, we talk about overcoming adversity. There’s nothing like facing adversity in a sporting event, on a football game, in a season and overcoming it and taking that —

 And you’re always going to have adversity in business. It’s nothing like working with a team, right? Working with a teammate, working with a unit. You’ve got to do that. In most business settings, you got to work with a team. And, you know, listen, I have a lot of great friends that I played football with. We didn’t always see eye to eye. We had to work through some of our differences, right? We value each other’s differences, and sometimes there was some heated discussions, so we worked through it. But those valuable lessons that we learned working through those things together can serve valuable in business. Right? You talk about how about this one? How about winning a Super Bowl and then trying to come back the next year and stay motivated and working hard, right? And not getting complacent.

 How many people in business they have a wonderful sale, right? Or the market tanks like right now, and you infuse a ton of cash, and then a year later, the market goes back at 30,000, and you make several, you know, whatever, millions or hundreds of thousands of dollars. What do you do now? How are you gonna respond? What’s your next move? Right? It’s staying focused on the prize, which is your goals, which is what you set out to do.

 Greg: Yeah. It’s hard to break through those plateaus. When you say like you win a Super Bowl. It feels like a peak!

 Chris: Yeah.

 Greg: How do you turn it into a plateau where then you can take it to the next level?

 Chris: It’s goals.

 Greg: It’s goals, it’s A-number one. Couldn’t agree more: goals. And then you have to take like massive action, like not action, massive action, which comes with behavioral change, which is very, very difficult.

Chris: And here’s what happens. You win a Super Bowl, and your life changes.

Greg: Yeah.

Chris: People look at you differently. People treat you differently. How about this one, you start a business and all of a sudden, you’re driving, you’re driving a loaded Beamer, right? Or you’re driving a Tesla? You get this huge 15,000-square-foot home, and you’re living out where you live, in Sewickley, wherever you live, right? And you have these wonderful things, and people treat you differently, right? How do you handle success, right? How do you handle success, because as quickly as you earn that money, it can be lost!

 Greg: Right. Ideally, not if they invest with us. But I get your point.

Chris: But this for our listeners, how do you handle success? Is a big deal. It’s a big thing that you have to consider because if you can handle success like a champ, right? Not a chump, a champ. You can; you can achieve even greater heights.

Greg: Yeah. My partner, Jim Wilding, his one son wrestles or wrestled at Virginia Tech, and in their locker room, he tells me, and I won’t get the words right, but “it’s not only how you handle success, but how you perform on your most difficult day is what makes the difference.” So, like what we were talking about before, what defines you is what you do when you do not know when you do not know what to do.

 So, the difficult times also define you, right, when you’re down and out, and you’re, you know, you’re calling your spouse and saying ‘I can’t do it anymore. The market’s gone down and I can’t

 Take it one more day. I know I have a five-year time horizon, but I want to know what it’s going to be worth tomorrow.’

 So, what defines you is those difficult moments, in addition to your success.

Chris: Absolutely, it does. And it does, because, when the going gets tough…you know, and you don’t know how to respond…

Greg: Yeah.

Chris: …You just got it, you know, dig deep. And the ones that continue to go and continue to work hard, continue to work, are the ones that are gonna achieve that success. And a wrestler, I mean those guys, man —

Greg: Wrestlers, many of the listeners know, my partner is Jim Wilding, he has a couple boys that are going on to be Navy Seals. One is a Navy Seal; one’s about to be Navy Seal. One is on their way. And when you look at who makes it…

Chris: Yeah.

Greg: Number one, well, they have to be a high school athlete, they tend to make it, and wrestlers—

Chris: Well, wrestlers are mentally tough, it’s a grind, absolutely—

Greg: But being mentally tough—

Chris: Oh, it’s, it’s, it’s everything.

Greg: It’s everything.

Chris: Mentally tough, you cannot break under pressure. That’s another thing we talked about, what did I learn as a professional athlete? It’s how to perform under pressure. Right. You know, I think of the difference between the regular season of an NFL season and the postseason of the NFL season. Right. And a regular-season game, there is a lot of pressure and a lot of intensity in the first few series of the game and at the end of the game, right? So, it’s once you get through a few series in

The game, maybe it into the first quarter, things kind of settle down a little bit and you start to play and then it stays like that. And then once you get into the game, if it’s close, that’s when it seems like the intensity picks up, right?

You get in a playoff game. It’s, it never slows down.

Greg: Turn the volume up.

Chris: It is intense. It is. You look at, you think of like a speedometer. It is in the red, the whole game. And you’re trying; you have to be able to think under pressure. Right? And what you’re in, right now, with so much going on with the market and so much uncertainty, and so much volatility. We talked about this before. Those who make their names right now, those who—

Greg: Defining moment. Help clients through this.

Chris: And they can think under pressure,

Greg: We will get through it, help them work through it.

Chris: And we will help them work through it.

Greg: Yeah. And we also talked about the football season and how challenging it is to stay mentally tough. And I don’t know if you remember the conversation we were talking about Ken Nash.

Chris: Yeah.

Greg: And how he really helps a lot of players and—

Chris: He’s helped me.

Greg: He helped you get through the season, right? It’s that challenging.

Chris: Absolutely.

Greg: And the people in our firm, when we’re in down markets like this, every day can feel a little long.

Fortunately, we have great long-term investors. But to get through this, you have to make sure your rituals are good. You’re exercising, you know, you’re staying informed, you’re continuing to learn, you’re continuing to think long-term to get through the adversity.

 Chris: Absolutely.

 Greg: So, tell help the video listeners on some of the stuff you’re doing now. What are you, what are you fired up about to do it now?

Chris: So maybe besides investing with Confluence and being a part of their team, and I’m not really part of the team, I’m part of your book, if you will, right? Right now, I’m involved in a couple of land development projects. I got a large land development project going on in South Fayette. Which is a county south of Allegheny County? I’ve got a little small one in Franklin Park. And I really enjoy that, Greg. I really enjoyed doing it; it’s a lot of fun.

Greg: Yeah.

Chris: It can be intense at times when you’re working with contractors, and you’re working with different individuals, and the townships are always tough and the boroughs. But I enjoy that. So that, you know, when I—

Greg: How did you learn to do that?

Chris: I grew up in a home, and my dad was a general contractor. So I grew up watching my dad. He was general contractor, but he also did the development, and the building side, the construction site.

Greg: Okay.

Chris: So, I watched that. No, I didn’t get it. And I was that kid that, you know, I’d show up at the job site with my dad at 6:00 a.m. and he’d say, all right, Chris, I want you to go around and put rings on all of the toilets, you know, all around, you know, thing. And then I’d go find the bathtub in the farthest corner of this construction site, right, in the multifamily unit. And I would just fall asleep in the bathtub. Right. And then I’d hear them, the breakfast truck, and I’d come running out. That was me. But I grew up on the site. I grew up in a construction site. And then I had experiences. I started making money in the NFL; I started buying properties and selling properties. And recently I was

Involved in a project a few years ago where I was able to build some farms, some barns, and work through that process. And so, I gained experience over the years and then I

Greg: So, you learned along the way

Chris: I learned along the way. It’s all about learning.

Greg: I think some people make the assumption that you can’t do something until you’re the expert. I have found, and I’ve learned how to put it through words through the strategic coach up in Toronto. He helped me put it in words. But you have to have the courage to make the commitment to build the competency. So, then you have the confidence, there’s a bunch of Cs in there. So, you have to have the courage to make the commitment. You have to make the commitment. Then you have to have the courage to build a competency that will give you the confidence to make the next commitment.

Chris: Sure.

Chris: And it’s how it works, right? You just, you’d learn along the way. I think everybody’s looked, some people look for the perfect time, the perfect opportunity. They wait until they know everything before they go and do what you did. And start a company.

Chris: I heard it. I heard a saying once that, “You don’t have to be great to get started, but you have to start to be great.”

You don’t have to be great to get started; you get to start to be great.

Greg: Oh, that’s great. Yep. I get it.

Chris: Right. A lot of people want to wait until they’re competent, they want to wait until they’re great, then they’ll get started. But in order to be great, you have to start.

Greg: So, sort of like when you go to the gym. I find the most difficult thing about the gym is opening the door. Right? I mean, in our gym, we go down like five steps to get into the gym. Those five steps are the hardest exercise I have for the next hour and a half, going down those five steps. And then I don’t understand, you may, how you can go to a gym and go in there, like this evening I’ll go, just because it’s really important to, in all types of markets and days, but times like this, it’s really.

Important to exercise. So, I won’t have much energy going in there. I’ll go in there; I’ll spend energy, I’ll come out with more energy. It makes no sense to me.

Chris: Feel great.

Greg: Right? Yeah. But you gotta start.

Chris: You gotta start, you gotta start to be great. And that’s, that’s the one thing in life is, you just got to have a plan, right? And follow through with that planning to get, get going. Cause you can’t be great unless you get started. You can’t make a basket unless you shoot, right? You can’t hit the ball unless you swing.

Greg: You gotta understand you’re going to have adversity.

Chris: That is part of life. 50% of life is adversity.

Greg: Agreed.

Chris: And that’s when you grow the most. That’s when you learn the most. When you go through adverse moments.

Greg: You have to live through difficult markets to enjoy the up markets. If you try to avoid the down markets, I’ve done this now, holy cow, 33 years, I think. 34? 34 years. That’s horrible. So, 34 years. And to get the good long-term results, you have to live through some difficult times.

Chris: John Wooden once said—

Greg: Love, John Wooden.

Chris: It’s the struggle. It’s the test that gives value to the prize. Yeah, the prize is the upmarket, but it’s the struggle, it’s the down market. It’s the test of staying true to your foundational principles and your long-term goals that gives value to that prize.

Greg: So quick Wooden story, I was asked to speak now; this was a long time ago. My son was in fourth grade, so whatever that means, long time ago. And they asked me to speak with, and Coach.

Wooden was speaking also. And I didn’t really know at this conference; I didn’t really know who Coach Wooden was, this was before Google. So, I had to figure it out. And I thought that’s okay. I’m coaching the fourth-grade basketball team at St. Louis de Marillac. Once I learned who he was, I said perfect, so I said to him that day, I said I had lunch with them, I have the privilege of having lunch with him. And so I said to him, I said, Coach Wooden, what is it that you would teach the St. Louis de Marillac, fourth-grade boys? And he said, Greg, teach them to never try to play better than somebody else. And for me, I was expecting “stay low,” defense, you know, whatever. So, I said, help me understand that coach, I don’t really know why you’re telling me that. And here’s through adversity and here’s through difficult times. I just did it because we’re going through a difficult time. You write on the left hand of your — and you’ve probably done this many times — you write down the left hand of your notebook — here are the things I can’t control. On the right-hand side here, market fluctuation, right? Casey Hampton getting hurt, whatever those things are, there’s things you can’t control on the right-hand side.

What are the things I can control? Yeah, listening to the coach, being the first to practice, hanging out with the right people, following good fundamentals, whatever those how many times you call clients to make sure they’re okay. Making sure that your portfolio managers are sound, whatever those things are you can control. And that is the list of what you make your goals from. And if you focus in adversity on things you can control, you will increase your results, and you will reduce your stress a hundred percent. If you focused on the can’t control, you will increase your stress and reduce your results.

Chris: Yeah, because you worry, you stress out, you worry about things, you can’t worry about the weather. And how many people worry about the weather. Tomorrow it’s going to be cold tomorrow. It’s going to be rainy.

Greg: It affects our mood!

Chris: Oh, no! It just brings you down. And then you can’t focus on things that are important, the things that you can control. And so, I love that and make that list. And Steven R Covey talks about that too, in his Seven Habits of Highly Effective People. And it kind of, he has two circles. You know, these circles, right? But you focus on the things you can control.

Greg: Can. So, so for the listeners, if you’re going through challenging times, what can I control? What can’t I control? And one of the things, in difficult markets, and by the time this comes out, we may

Not be in one, we don’t know, but there will be another one. There always is. It is really important to control the clock in any sport. And when you invest, you have to control the clock. Great coaches control the clock, and great investors control the clock. It is easier if you think in five-year time increments than five days.

Chris: Sure. You better not get on that cruise ship anytime soon.

Greg: The cruise ship?

Chris: Not on the cruise on your—

Greg: Oh, that. Oh, no, no, no, no, no, no, no, no, no, no, no. Here’s why. Nope. Here’s why. Because it’s a plateau. That’s the Super Bowl. So, because for me,

Chris: That’s the secret, that’s the secret right there.

Greg: I don’t have that.

Chris: But that’s what you want, and so you see it every single day.

Greg: I don’t even know if I want it, I just want to know there’s another level.

Chris: It’s the secret. You’ve read the book, The Secret.

Greg: I did. Oh, that’s right, I did.

Chris: Absolutely. You put, you put it in your dream board, and every day you look at it.

Greg: Period.

Chris: Because at the end of the day, when you look at it again, you will have taken one step closer to that dream, to that goal.

Greg: You can feel successful.

Chris: Absolutely.

Greg: You can feel successful. But I think I want to, I want that, every day to look at, to remember that I could do better. I don’t want that boat, by the way. Seems horrible.

Chris: Listen, I feel like I’m the most motivated guy, but being around you, I’m going to go home and write all these notes. I’m going to go home and write my journal. Greg said this isn’t this; I gotta have two columns. I gotta have things I can’t control, things I can’t control. I gotta go home. I gotta read The One Thing.

Greg: My guess is you’re so far on the right side of things you can’t, or you can control. You’re a can control guy.

Chris: Yeah, but unless we check ourselves a lot, we can get ourselves caught up in worrying about the things you can’t control.

Greg: 100% and the thing I like about you, when the conversation’s over with you, just like we had the other day on the phone, you’re one of those people, and it’s really a gift, it’s a unique ability. You’re one of those people that, at the end of the conversation, you are more inspired, you feel better than you did when the conversation started.

Chris: 100% and I try to do that, and that’s what I’m trying to when I’m talking to you, even though it’s as a conversation, I’m trying to say, what can I learn from Greg? He’s successful. I’m looking at the way you dress. I’m looking at what you have there.

Greg: Sears. If you want it, just go to Sears.

Chris: That’s a custom shirt. But I’m looking at, I said, okay, what you know, that’s what it’s all about.

You’ve got to have those visions in your mind of where you go. And what you want to do. And then you talk about those steps about how to get there, but you gotta have a vision of where you want to go.

Greg: I watched, speaking of learning, I, I remember when JP Morgan had a problem. Jamie Dimon was in front of Congress. And I watched him answer questions and, at the same time, watch his stock go up for four points. And I’m thinking, ‘How can he be telling Congress how they lost $2 billion?’ And

Because he was straight with people. He was candid. He answered, answered honestly, and I just watched how he answered questions. I really, you can learn from everyone. Everyone.

Chris: I’m like a sponge.

Greg: Me too. You know what I’d like to know? Who through your time at the Steelers, what coach, and/or what other player did you find to be a great mentor, and what is the lesson you learned from them?

Chris: I’ll tell you who I was really close to had a huge impact on me. He’s still with the Steelers. He’s the assistant head coach now, but he was the D line coach, the defensive line coach for the Steelers for 25-ish years. John Mitchell, now, John Mitchell, is a man from Mobile, Alabama. He grew up in the civil rights era and um, he grew up in a very humble, modest home. Went to Alabama, was the first black captain, first black All-American for Bear Bryant, and just broke a lot of barriers. Man, he’s a great man. And um, I played for him for 11 years, and he was my position coach, and he and I became very close. He’s like a second father to me. Still talk to him now. And a very wise man and you know, he and I became really close and throughout my time with the Steelers. And there were some times during practice where they would have like special teams, kickoff team and I wasn’t on kickoff. So, I’d step next to him, and we would talk about life. We talk about what’s going on. I talked to him about social issues, like whatever issues were going on. Because he has such a great mind. He was super wise. He had seen so much in his life, and so I love to see, hear his perspective, and learn from him.

So, if you asked me who had a huge impact on me, not only did he teach me the game of football, he taught me how to play with great fundamentals, tell me how to play with a great technique, he taught me how to be better at overcoming adversity, but he also taught me how to be a better man. He taught me how he had to see the world through a different lens, and for that, I’ll be eternally grateful to him.

Greg: That’s wonderful. It’s interesting, whether it’s a teacher, a coach, the great ones, they’re bigger than the game, right? I mean they’re bigger—

Chris: Transcends the game.

Greg: Coach Wooden use to be asked, you know if he had a successful season. And he used to say; I don’t know, I’ll tell you in 30 years because it wasn’t about the wins and losses. It was like what he did to those young men and how they grew up to be responsible adults. Right. I had a great teacher. I wish I would have told him along the way. I had a teacher in high school that taught me calculus, and I don’t know if that had anything to do with calculus. He helped me believe in myself, and I remember that. So, you know, for teachers, for coaches, for friends, helping people believe in themselves and being bigger than the game. That’s a great lesson.

Thanks for listening. If you’d like to hear other subject matters that may be of interest to you, please check us out at ConfluenceFP.com/podcasts

Confluence Financial Partners — The Power of Education: Dr. Christopher Howard | Episode # 8

This session was recorded on December 19, 2019.

The views and opinions expressed herein are as of the date of its recording. The information may not be current and Confluence has no obligation to provide any updates or changes. There is no guarantee that any statements, opinions or forecasts provided in this podcast will prove to be correct.

This podcast is provided by Confluence for informational purposes only. The information contained herein does not constitute a recommendation to buy, sell or hold any securities and should not be construed as an offer to sell, or a solicitation of an offer to buy any securities. Confluence is not providing any financial, economic, legal, accounting, or tax advice in this podcast. In addition, the receipt of this podcast by any listener is not to be taken as constituting the giving of investment advice by Confluence.

Confluence Financial Partners — Driving Success: Greg Norton | Episode #7

Greg: One point six trillion dollars is lost by companies in the U.S. because of poor customer experience.

Imagine that.

SOURCE: According to Accenture, $1.6 trillion is lost by companies in the U.S. due to customers switching as a result of poor customer service.”

Welcome to the Imagine That Podcast. You should listen to today’s podcast if you are interested in any of the three following topics. One: how to excel in difficult times. Two: do you want to receive great service from automobile dealerships? Or three: you want to walk into the next car dealership, a little more educated so you can enjoy the experience.

Today we’re fortunate to have Greg Norton with us. Greg is the owner of South Hills Honda. So welcome, Greg.

Greg N.: Thank you, Greg.

Greg: Yeah, I’ve known Greg for a while and one of the things we were talking about actually before we started today is that sometimes owning a car dealership, or being in the car business, comes with a certain connotation that can be frustrating. I would argue that also in our industry, sometimes it’s the same connotation, and it’s frustrating. So, I’ve really enjoyed watching you grow. I’ve watched you setting a different standard in that business, and I’ve really enjoyed watching how you have helped people buy vehicles as more of a consultant than a salesperson. So, we’re delighted to hear from you today. We’re delighted to learn from you. And I think it’s interesting also that Greg came in from Philadelphia and started his business in Pittsburgh by starting South Hills, bought a previous dealership, changed the name of it, it’s now called South Hills Honda.

And he did that in December — correct me if I’m wrong— of 2007.

Greg N.: That’s correct.

Greg: Now, if anyone remembers — he bought the dealership and the next several years were very, very difficult. Right? We were hit by a recession. And Greg, I just want to share with you, I actually.

Went through and tried to determine and figure out, is it unusual that someone comes in and starts or buys a business in a difficult time and has success?

So, I’m going to share with you a couple of names. All of these organizations were started in difficult times, which leads us to the conclusion that in tough times, good companies make incredible headway. You may recognize a couple of these names. Apple, Chevron, Disney, Enterprise Car Rental, Exxon, FedEx, J&J, Microsoft, Southwest Airlines, and this little grocery store called Whole Foods. There’s something about starting in a difficult time. You did it in 2007 and in the first ten years, correct me if I’m wrong, you actually doubled the sales of the dealership.

Greg N.: That is correct. Even though in 2007, I didn’t realize that it was the first official month of the recession, but as ’08 became increasingly more difficult, and certainly in the early months, I started to wonder whether I had a just made a catastrophic mistake in leaving Philadelphia pretty decent a situation.

Greg: And you were COO of a couple of different dealerships.

Greg: N. Yeah. We were doing fantastic. Now I had an opportunity to go out on my own as a hundred percent. And while that was certainly the attraction, boy, I second-guessed myself for a few months until we got some traction.

Greg: Sleepless nights?

Greg N. Oh yeah. And it was making the commute either on a Friday night or a Saturday night back to Philly—

Greg: With then, a young family.

Greg, N.: Yeah. Yeah. So of course,

 Greg: When was that moment like, “Aha, I think we’re going to be okay.”

 Greg N.: I know exactly when it was. It was the middle of April.

 Greg: In ’08?

 Greg N.: Yes.

 Greg: That quick, you knew you were going be okay?

 Greg N.: Yes. Yes, absolutely.

 Greg: Okay. You didn’t suffer that much.

 Greg N. No, but each day, each day seemed like a week.

 Greg: Yeah. So, what happened in those, you know, those five months that caused you to be like, okay, we’re all right.

Greg N.: I’ve been involved in some turnarounds before, not as a part-owner, but not as a full owner. Complete. And the first thing you have to do is assess the talent that you currently have. It’s almost, I will say in every situation I’ve been in, this would be the third turnaround that I had been involved with — there was always someone that was overlooked. So, you come into a room like this, you have five people in the room, and one person has been overlooked, I guarantee it. And should be in a position of prominently prominence leadership helping you steer the ship, so to speak. And, sure enough, you know, you do your interviews, you talked to everybody, personally.

I’m talking everyone from the porters to, at the time, I had a general manager, and see if everybody is in the right position. And then you realign, of course, that comes with some stress. But you realign, and then you start building your culture from there. The first thing you have to do though is make sure that everyone is in the right spot. And then you build from there.

Greg: I’m sitting with my mouth open. It’s so, so, so true. Doesn’t matter if it’s a car dealership, an investment firm, a football or baseball team, right? You have to have the right players, and then you absolutely need to put them in the right position.

Is there any assessment that you guys do, and I know any assessment that you do to try to understand people’s strengths and weaknesses?

Greg N.: It was more just me personally interviewing. I know there’s a lot of personality profile stuff out there, but—

Greg: Not as effective as good conversation and looking people in the eyeballs.

Greg N.: Right. But of course, that takes a lot of time. I mean, you imagine we took over, I think we’re at in the low sixties for people now, took over, now we’re in the high thirties for personnel.

But talked to, can you imagine how long it takes? And I know you can talk to 30 or 40 people, nonstop. I mean, it’s exhausting, but yet there is no shortcut. You can’t shortcut that process and expect to get good results. And once you do that, I mean I had two people that were beacons that should be in positions that they were not, there was a lower position, somehow overlooked or whatever. And ironically enough, one is now my general manager, and one is my general sales manager.

Greg: For people that are listening. If you’re coaching kids, if you’re starting a business or you’re trying to grow a business, spend time with your people. Because the greatest thing you could do for your customers is have the right people, in the right chairs and then you’ll go on to get a result.

Let’s go-to service because I love it. Building that trust of knowing that if I come in to your business or we have a client coming into our business, we are going to do our very best and make sure people are buying the right things for the right reasons, and they’re not overpaying. Right? So, then you service people really well and build that trust over time.

So how do you get people to be more consultative in the in the service process than, “Hey, you just need another set of tires” or whatever the service du jour item is, how do you get them to the point where they’re more consultative?

Greg N.: That’s a very, very good question. And I like to believe that it starts with your mom and your dad and your coaches and teachers and clergy or all the people that have influenced you along the way. But we are okay; in fact, we like to hire people that don’t have a lot of technical experience in our business. Therefore, less bad, fewer bad habits.

Greg: Yeah.

Greg N.: So, if you hire the nicest people and teach them, try and train them the way of your culture. A lot of it sticks. Most of it sticks.

Greg: It’s odd how similar we bring, we are okay bringing people in from a different industry that we think have the right fiber, the right fabric too, and then training them. Because we want to be like, you guys do a different type of organization than the industry and set a new standard, whether it’s on vehicles or helping people maximize their life and legacy. The challenge is, you can’t hire everybody from your competitors. We can’t hire everybody from our competitors, and then try to be different than the competitors.

Greg N.: You can’t. You absolutely cannot.

Greg: Right? You have to bring people in and then grow them in the Greg Norton way of doing business.

Fair?

Greg N.: Spot on.

Greg: One of those, as you are explaining to me, and this is just to help people when you’re sitting in the dealership, and you’re in the service department, or the service manager calls you and says you need tires in 2,000 miles, you might as well get them today. You would say?

Greg N.: You need them in 2,000 miles. We’d rather see you in 2,000 miles. We actually try not to sell. All we want to do is, is help you make the right decision. We’d rather we don’t want to have you overspend on anything, and we’d rather build your trust by you knowing that we’re not trying to sell. All we want to do is help you make good, good decisions. A very consultative approach.

Greg: I said that at lunch in preparation for this to this podcast. So, I sit in with a group for lunch, and they all looked at me and said, (we are sitting around the table, I think are like five or six of us), and they said, we’ve all heard that.

If this is going to need to be done anytime, sometime in the next six months, you might as well do it now. And one person said, yeah, you’re sitting in the service, you know, waiting room. And they come in and said, “by the way, you’re going to need — you might as well do it now.” And you’re like, okay. But when you think about it, if you make that decision ten times in a row, you’ve just wasted a set of tires. Right? So, something just little like that builds the trust.

Greg N.: At least we believe it does. And, and you know, one of the things that I say a lot and I’ve got a lot of clichés: treat this customer as if it was your mother. What would you tell your mother? Would you say, “Hey mom, you need tires in 5,000 miles, let’s do them right now? No, I’ll find a way to help you maximize the life, bring you back in, you know, three or four months, and then we’ll do it then. Let me help you save some money. And you do that enough times. I mean, we, you know, we serve as 2,000 plus cars a month. You know, you hope that that permeates in the community, and people get a real good feeling, and the trust level goes way up.

Greg: At the end of the day. It doesn’t matter the business, car, investments, pictures, real estate — people buy trust.

Greg N.: I think so.

Greg: I think so also. So that other car dealership may get the new set of tires. I’d rather sell trust.

Greg N.: I would too.

Greg: Because in 10 years, they sold one set of tires. You have a whole community that trust you and comes in and wants to do business with you.

Greg N.: Well, that’s exactly right. “Do unto others,” you know, again, all of those sorts of clichés. But you know, I’ll tell everybody, look, I sleep like a baby. Yeah. I mean, I sleep like an absolute baby, every night.

Greg: I know you guys spent a lot of time on transparency and education for the listeners, you know, so we all become a little bit better buying a car. I know it’s like a major purchase for so many people. And when you accumulate all the purchases of vehicles you make, it’s a gigantic part of expenses for people. So how would you educate them? So, when you walk into a dealership trade-in, you know, car price, list price, how would you educate someone to make sense of all of those numbers, and are there any tips you can give our listeners?

Greg N.: I would. And I thought a lot about this because I thought we’d talk about this.

Greg: Yes.

Greg N.: The first thing I would do is use the internet for your research. Do a little homework on — that is, if you know exactly what you want, I’m talking the brand, the model, the trim level of the model. If you know exactly what you want, do a little research online and find out what they’re transacting for.

Greg: So, so any specific websites that you would recommend?

Greg N.: Kelly Blue Book, kbb.com, edmunds.com. Those are the two premier sites. They’ll tell you what we own the car for our invoice price, which is okay.

Greg: Is that for use new and used?

Greg N.: You can do both. But let’s, let’s stay new. New is a little simpler to explain.

Kelly Blue Book, for instance. Well, both of them will tell you what the average trends at transaction price is in your zip code. So, if it’s a $20,000 invoice, they’ll say the average transaction price maybe 20,500. So, if you know that, you can go into South Hills Honda or whatever other dealership and know that if you pay somewhere around there, I’m talking no trade-in, no anything, because they factor in incentives. They’re very up to date, within 24 hours of when a manufacturer’s incentives are posted. But if you were to write a check, you would know if you paid somewhere in the neighborhood of 20,500, be it 20,000 or 20,500 or 21,000; you’re going to do okay.

Greg: You’re in the range.

Greg N.: And you’re going to take a lot of stress out of your life.

Greg: To know that I, I just came out of that dealership and I, as one car dealer that sounds like they do business, very different than you. He said we were playing golf, and he said, “Never forget, Greg, you could’ve got it cheaper.” It’s horrible, right? It’s a horrible feeling. If you know, going in that 20,500 is the right number, 20,000, 700, 300, it’s, it’s close enough that it’s like, okay, there’s reasons for that.

Greg N.: Well, I can’t speak for every brand out there because the more expensive the car, even if the markup percentage was exactly the same from say, a Honda to a Bentley, that margin, that dollar

Margin is going to be higher. Right? But for mainstream automobile sales, the average markup is somewhere, or transaction is somewhere in the neighborhood of 1 to 2%.

Greg: That’s not what people think.

Greg N.: I know, they think if I bought a car for 20,000, you just made 5,000. Well, it couldn’t be further from the truth. And, and I’m hoping that our listeners will heed this advice, because the first thing I wrote down when I talked about, you know — the best, easiest way to buy a car? Try and have fun with it. Most people think that it’s like the worst experience in the world.

Greg: The exhaustion thing costs you money. You end up exhausted, and you end up getting a poorer deal because you just accept some deal that you could’ve had a better one earlier on if you’d have done a little research sitting at your home having coffee on the internet. Instead of running from dealer to dealership, like the Flintstones used to, right? Forty years ago, right? Just running around all over the place.

Greg N.: Well, one of the myths that exists also, I mean now that the internet is a full-fledged force, so in most businesses, you do enough research, you could literally say— my best advice is to try and do business locally. If you think that your local dealer, be at Honda, whomever is a fairly solid entity, by reputation, either online or referrals, try and do business with them. But it’s okay to send an email to that person’s, that dealership’s competitor, local competitor, might be up the road, down the road, whatever, send an email to them saying, “I’m interested in whatever down to the trim level, what would you sell the car for?” So now you have what you can buy it for through KBB or Edmund’s. You’ve got a quote from that other dealer’s competitor, and you’d have to say, I’m writing a check, I’m paying cash. What would you sell that car for?

And then you take that to your local competitor. And I mean to tell you, it can be the easiest transaction you’d ever want to do. But a lot of people, unfortunately, and I think as time goes on, they’ll realize that there’s not these gigantic margins. They’re not, really never were, but they’re certainly not now. It’s all volume. You could make this such an easy, fun process — because it should be fun. It should be very exciting. My God, how often do you do it? Three years. Every three years, five years, ten years? It should be more fun than a lot of people make it. And it’s fun when you see that people have figured it out and know, okay, you’re going to make a couple bucks? Great because you’re a business, you’re a local business. I’m patronizing the community. I want to do the right thing locally. And my gosh, we don’t ever forget those people!

Greg: What you’re saying it’s so refreshing. I’m looking at the people in the room, and it’s just so refreshing that, you know, do more research. Call a competitor. It’s transparency. It builds that trust that allows you to have the fun because you — What was that men’s — there was a store that sold suits or something like that?

Greg N.: Men’s Warehouse.

Greg: Was it? What did they used to say? “An educated consumer is our best customer.”

Greg N.: Yes, yes, yes.

Greg: That’s what I’m hearing, you say. We feel the same way, by the way. The more our clients learn, the better chance we have of doing business with them. So, the more, the more educated your car buyer becomes, the more likely they will be comfortable. And unlike that person that you were talking about this morning with this whole adversarial relationship.

I also, though said, embedded in your comments, you said a couple of times — if you’re buying cash. That leads me to believe that some people are, some dealerships may give you a different price that may be lower if you finance. Is that because there’s some money in the financing?

Greg N.: Yes. A lot of this can be a little confusing to people because there’s so many things, so many variables. So, say the selling price is one variable; the trade-in is another variable; the interest rate is another variable. So, you have to isolate certain things, and we help people isolate and educate so that they so that when they have gotten quotes from other dealers, we can compare apples to apples. Because a lot of people, say if we’re talking in your trade-in (and not to go off on a tangent), whenever you have a trade-in, and this is a very important tip for our listeners. If you have a trade-in, which say, 70% of our customers will have, maybe 80. It’s critical that you find out: “What can I buy your car for, mister dealer, and what will you pay me for my trade-in?” Not commingled. Two separate transactions.

Greg: So, I want to know what my trade-in will be, and I want to know what the price on buying will be and don’t put them together.

Greg N.: Don’t put them together.

Greg: So, let me ask this. If you say, I’ll take the trade-in for $10,000, but then, I decided not to buy the car from you. Would you still take the trade-in?

Greg N.: At South Hills Honda, 100% of the time, we will.

Greg: Wow. Is that normal?

Greg N.: Absolutely not.

Greg: So, okay, one more — ready? Buy or lease?

Greg N.: Lifestyle decision. It really is. I happen to be a huge fan of leasing. For Honda, Honda does most of their incentives by way of either lowering the interest rate or lowering the lease rate. It’s very subtle, very quiet, but it’s very meaningful. Most people are payment buyers, and it has zero effect on the resale value. So, if you’re, you know, rebates or incentives of a thousand, $2,000, $3,000, it will have a detrimental effect on a vehicle’s resale value. So, the interest rate discount or the leasing discount is real, and it’s tangible.

Greg: Okay. So, who shouldn’t lease?

Greg N.: I would say people that like to keep their cars for a long, long, long, long time. A good explanation for leasing, if somebody was to come in and say I think I’m going to trade every three or five years. Okay, if you trade in three years say, we’ll use a Civic for example, if you were to lease, if you were to buy your Civic out at the end of your lease, you’ll pay probably $1,000 more than the car is worth at the end of three years. Now is that thousand dollars, paying that thousand dollars more, is that worth it to you to have the option to not want to keep it? I’ve had a bad experience. Maybe with the car, it’s had, you know, lots of issues.

One of the other big, huge things on late model cars is this vehicle history report phenomenon. I don’t know if you, I’m sure everyone’s heard of Carfax. The two biggies are Carfax and AutoCheck. But a late model car, talking three to five years, or zero to five years old that has had some sort of an accident that’s been documented, could be perfect. I mean, like the most perfect repair you’ve ever seen, will be worth less.

Greg: I couldn’t believe it. So, I did that with my car. So, someone ran into me and, and we had to have the car fixed. And when we, and I went to trade it in, they said minus like five thousand dollars because it was an accident. And I’m like, “Whoa, what do you mean?” It wasn’t even my fault, and it went down $5,000 on the trade-in.

Greg N.: And it’s a real, real thing. And leasing, at least with Honda, I can’t speak for every manufacturer, but Honda, the bad auto or the bad vehicle history report, has no bearing.

Greg: All things being equal, there’s no incentive for you if they lease or buy — all things being equal. It’s just a lifestyle thing and the benefit of them leasing, you know, someone that holds your car forever, I think is probably less advantageous to you than someone that not, right?

Greg N.: It’s just another way of acquiring the car, and then we consult with them on, well, what’s your lifestyle look like? Does it make sense to either pay cash or finance or lease? And to your point, it makes no difference to us.

Greg: So, it’s just a consultative thing based on their lifestyle.

Greg N.: Exactly. Right. Yeah. I mean you get— your payment is less, typically, the payment on the lease.

And this is a good tip. A payment on a lease, a three-year, 12,000 mile a year lease normally equates to a zero down, 72-month payment on what you’re buying. Typically. It’s pretty close.

Greg: And if someone says, well, I drive 20,000 miles a year?

Greg N.: We can build it in and show you both ways. Because again—

Greg: Education.

Greg, N.: Yeah.

Greg: Yeah. All right, Greg. So, here’s the question. If I’m a great researcher or a great negotiator, who gets the better deal?

Greg N.: Well, there’s not much room to negotiate. Only because the margins are so small, in our business, we lead with our best foot right out of the gate. Which comes with some risk, because if we’ve

Done a poor job of educating that the margins are what the margins are, the trade-in values are, your trading value is in this range. And if we’ve done a, not a very good job of really showing you, not just telling you, but showing you how logical our proposal is to, you know, to do business with us. And you still think that there is a lot of room, well, we’re probably not going to do business.

Greg: For the listeners, they just need to be a little bit careful, right. Your offer, you lead with your best offer.

Greg N.: Correct.

Greg: That’s not true at all dealerships.

Greg N.: That is correct.

Greg: So, I just want to be clear for the listeners, like, not every dealership like that. So, let’s not do the, “Hey, I listened to the Imagine That podcast and so, no matter what number you give me, it’s good because it’s your best offer. And that’s not true everywhere.

Greg N.: But negotiating, it means something different, I think to almost everyone. I mean, some folks I think things believe that you have to be really rough and tough in order to negotiate.

Greg: I don’t expect you to remember this, but, so Elizabeth is 25. When she was 16, we came in, and I don’t think we knew each other very well back then. I may have known your name. I don’t know. But that’s it. And so, I came in and came in, because we knew someone in the dealership, and we sat down nine years ago. And when I was talking to the salesperson, you actually came in, and you sat down. And I don’t know if it was negotiating or not; I just remember having a conversation around the facts that led us to a conclusion that it was fair. If that’s negotiating, I’m not sure, but I remember you sitting down, and that was the first time I met you face to face. And I thought, “Hmm, that thought, you know, that felt different than, than the typical experience.” We’d looked at the facts. We understood the facts. You make sure we did. And we actually bought the Honda Civic for Elizabeth.

Greg N.: I don’t remember. I feel bad that I don’t know it as good, but maybe one of the best explanations of negotiating, at least in my world, that I’ve ever heard. And I, and I mean that. That is spot on.

Because to negotiate implies I think that there is all this room, and back and forth, and, you know,

smoke-filled, you know cigar smoke, and you know, we’re really going to struggle with trying to get to a common ground. And I still think that there are some businesses to do that. Like start high, and then let’s see where things shake out. Well, I hate that. Yeah, and I think most people don’t like that. And I think that’s one of the things that is perpetuating this feeling of anxiety every time you walk in. I mean, you can, you can see people, I feel so bad for them. They’ll come in and they’ll, there’ll be happy go lucky outside. And the moment they walk through the showroom, they’re as rigid as a board. Oh, I feel so bad for them. And you know, they don’t want to lighten up because that may be a sign of weakness and somebody’s going to take advantage of them.

Greg: They can’t say they liked the color and, my goodness, they can’t say they’re like the car because that means that you think they’re going to buy it, right?

Greg N.: I feel so bad for them. And then you know, we try and help as best we can. And you know, most of the time we’re more successful than not. But you still see how knotted up people get over all this. And I think, you talked about this, and to circle back, the best customer, the best client for us, is an educated client.

Greg: So, I guess the other “aha moment” or takeaway for our listeners, whether you’re buying a vehicle or you’re investing your money — work with someone that’ll help you learn the truth. And if we could get to the truth, it’s a lot easier to process.

Greg N.: Totally agree.

Greg: Okay. So now we talked to, we talked about a lot of different things, but let’s talk about, I can’t help drive up and down 19 or route 79, and I see that big bubble gum machine that distributes called cars called Carvana and I can’t figure it out. I’m sure it’s awesome. I don’t understand. But you know, all industries change. Our industry evolves also. In 10 years, is everybody going over to Carvana or carbuyers.com? Or how does that work? Where do you see the future going?

Greg N.: It’s a great question. It’s a lot of dinner conversation with your colleagues, right? I’ll be honest with you, all of all the research I’ve done, and I’ve looked into it just because I’m curious. I mean, it’s what we do for a living. I’m having a difficult time figuring out it as a business.

I don’t really believe our business will ever become truly an online business. I think it’s a component. I think you even talked about technology aiding, you know, technology for technology’s

Sake. I think we’re naive if we think that’s a solution. But if you use it to enhance some of your operations, some of the things you do, I think that’s a winner.

Greg: So, we look at it as, we don’t think in our industry, because there’s roboadvisors and all those things and there’s some advantages to them. But when, if you’re having someone to care for your family and something happens to you, the roboadvisors not showing up to be with your family or figuring out what you really care about and really managing your wealth to maximize your life legacy.

So, there’s a lot of technology out there. So, it’s sort of similar in the way we look at it. And I hear you saying the same thing, is we don’t think technology will replace great relationships and people. But we think that people that use technology and great businesses that use technology appropriately to enhance the customer experience as you are, and as we are, will replace those entities that do not.

So, an entity that does not, I don’t think we need to be a roboadvisor or Carvana or whatever, but we do need to stay up with the times, use technology to enhance the experience with our clients. And I hear you saying the same thing.

Greg N.: I agree completely, 100%.

Greg: Well, Greg, I don’t know how long we spoke, but I learned a whole bunch with a bunch of “ahas,” and hopefully, the listeners are going to go into car dealerships across America. And in your case, I hope you get some Honda clients also. And I hope they enjoy it. And when they leave there, they’re more educated walking in. So, when they leave there, they had more fun walking out.

Greg N.: Well, I hope so. Also, I mean, I feel bad when people are not having as much fun as they should doing this because I know they just, the majority of people dread it.

Greg: Yes.

Greg N.: And it doesn’t need to be that.

Greg: Yeah, you’ve really helped people think about, you know, if they’re starting a business, even if it’s a tough time, if you stay focused on your people and training and experience, it works.

And you help people think about buying cars differently and more educated. So, thank you so much. That was very valuable, and we appreciate your time.

Greg N.: Thank you for the time.

Greg: You bet. Thanks.

Greg: Thanks for listening. If you’d like to hear other subject matters that may be of interest to you, please check us out at ConfluenceFP.com/podcasts.

Confluence Financial Partners — Blessings: Kurt Kimmich | Episode 6

Greg:     If the world could see through the eyes of a person with Down syndrome, it would be a better place. Imagine that.

This is Greg Weimer and today I have the opportunity/privilege to be with a longtime friend and associate here at Confluence. Kurt Kimmich. Welcome Kurt.

Kurt:      Thank you Greg. Happy to be here.

Greg:     All right, so do you remember where we met? Do you remember when we met? Do you remember what you were doing when we met?

Kurt:      Yes, only because you reminded me.

Greg:     So, Kurt and I, we, it was 1987, and we worked for a firm back then — I worked for a firm back then, with Kurt’s father Ron, who is actually someone I looked up to a lot. He was an absolute gentleman in the business. And you were his date in Bermuda and I brought my current wife, Laurie, back then and I—she’s my wife now, she wasn’t my wife at that moment. It was 1987, we got married actually in 1989. So, we were in Bermuda and Ron brought his son, Kurt.

And here we are literally 30 years ago…

Kurt:      32 years.

Greg:     32 years ago. And we’re sitting here as associates. How’d that happen?

Kurt:      Yeah, I was still in college. I appreciated that trip from my dad, that’s for sure.

Greg:     That’s a cool thing, right? Although, I think you point out like, you’re in college, as if to suggest I was a lot older, which I wasn’t. I was actually one year out of college, just to set the record straight. So, you’re not that much younger.

Kurt:      No. I look younger.

Greg:     Yeah.

Kurt:      Much younger.

Greg:     So, I’ve had the opportunity to watch Kurt be a great financial advisor. I’ve watched Kurt grow his family to a — call it from a college kid to now. Six children, and he and his wife Amy have six children. And what we’re going to talk about today is maybe we talk a little bit about the business and lessons you’ve learned along the way.

But I’ve watched you do a lot of great things and I’ve watched a lot of your accomplishments. But I have to tell you, the one that stands out to me the most is how you’ve raised your children and how you have just a wonderful family. And specifically, Kurt and Amy have a son, Ben, who has Down syndrome. And you know, I think probably, when that first occurred, when you found out that you had a child that was going to have Down syndrome, you know, it may not have been viewed as much of a blessing, but watching you guys turn that into an absolute blessing and watch how it’s effected your family has been an inspiration. So, I think it goes to the saying, “What you dwell on, you multiply,” and I can tell you, the Kimmich family, they’re all about dwelling on the positives, which is cool.

So, Kurt, just want to take us through, you know, when you found out that you are going to be blessed with a child with Down syndrome and how you thought about that?

Kurt:      Sure. Happy to. And I apologize if I get a little emotional, but this is a near and dear topic to me.

Obviously, my wife, I would be in deep trouble if I didn’t start by saying she is, without a doubt, the cog that keeps our family wheel moving in the right direction. She is the strongest, most compassionate person I’ve ever met, and she is devoted 100% to her family at all times, which makes my life a lot easier. But we have six children and there is a 13-year age range between the six and two girls and then four boys.

And we knew all along we wanted to have a larger family. I think once we got to three or four, it just, you know, sort of started blending together.

Greg:     But, that’s a little aggressive.

Kurt:      That is a little aggressive in today’s world.

Greg:     We are more conservative investors then the Kimmich family was with how they grew their family.

Kurt:      That is an accurate statement. Yes. And when we found out that we were expecting our sixth child, as any parent does, they go through all of the doctor’s appointments, and the sonograms, and the different conversations that you have with medical professionals. One of them surrounded the results of our sonogram, which showed a slight dark spot in our son’s heart, which is one of the characteristics, possibly, of Down syndrome.

Greg:     Give me the, you shared the odds with me, so, if there’s a dark spot—

Kurt:      We were told that there was a 1 in 20 chance that our child was going to be born with Down syndrome. And as Greg alluded to earlier, I am the eternal optimist. And so I immediately was saying to my wife, well, that’s only a 5% chance, where she was looking at the opposite of that, and so, we went through our normal doctor’s appointments and, you know, I remember very vividly walking into the office of a very young healthcare professional. You know, again, young — I was almost 40 at the time when Ben was born and this young lady was probably in her mid-twenties, and I knew exactly what she was going to be talking to Amy and I about.

Greg:     How’d you know?

Kurt:      Well, because I had read, when I knew that there was a 5% chance, I knew that the standard procedure for medical personnel was to give you your options on dealing with a child with special needs. And, unfortunately, to not beat around the bush, they were prepared to talk to us about how we could end the pregnancy if we wanted to.

And so, I very politely, to the young lady, I said, I know what you’re going to tell us and I just want to very politely tell you that it’s our intention to raise this child just like we are raising our other five children. But if you need to tell me what you are required to tell me, go ahead. And she absolutely did that. And she spent 10 or 15 minutes letting us know exactly how we could terminate — who is now Ben — if we wanted to. And that was hard. That’s, that’s a hard conversation to have.

Greg:     Was her view that like, here’s all the challenges? So it wasn’t, it wasn’t a balanced view of a having a special needs child? It was…

Kurt:      No, it was not balanced at all. It was definitely “Here is how you can get rid of this problem.”

Greg:     Is it still like that?

Kurt:      So. no. No, actually that’s one of the really incredible experiences that Amy and I have had over the last, you know, Ben is 12 now, over the last 12 years, is so much information is made available to young parents who are in a similar situation to what we were 12 years ago.

And it’s all about information. You know, anything in life that you don’t understand, the more you research it and the more you a fact-find about it, the more comfortable you feel with it. And I think that’s, you know, if you’re gonna buy a car, you’re going to go out and you’re going to research all the different types of cars and which ones are good and which ones aren’t, and which ones need repairs and not. So, as you gather more information, you become more comfortable.

So, we are blessed now, as a society, where there due to the countless hours and days and years of effort by a lot of advocates across the country, where healthcare providers are now required to provide the positives as well as the negatives. But they allow the parent to make an informed decision with all of the information.

Greg:     Okay. So, in that moment, what was going through your mind? What did you and Amy talk about?

Because it had to be, although you are committed to raising Ben like you were your other five children, it had to be a “holy cow” moment.

Kurt:      Oh, absolutely. And I didn’t share, you know, I’m very private in many regards and I didn’t share initially how I felt inside about the news.

Greg:     You didn’t share to Amy or you didn’t share to anybody?

Kurt:      Not to anybody. Because again, you know, I’m the eternal optimist and I sort of pride myself on always finding the positive in any situation.

Greg:     You do. I mean, in a very professional way. You don’t take this wrong, you’re, you’re a little bit like Tigger, right? You just like sort of bounce around, you’re happy.

Kurt:      It’s a great analogy. I do have a high energy level, too and I don’t sleep much. And I do like Tigger sort of a cool character.

Greg:     He’s awesome.

Kurt:      When you have five children under the age of 13 already at home and you are told that your child may be born with a special need, you immediately think of all the negatives.

And obviously my mindset today is just the opposite. But at the time, and I’ll share this as sort of an interesting little sidebar. I have a dear friend of ours that lives in Murrysville where we do, and I’ll just refer to her as Kate. And Kate is an advocate for special needs children. And when Kate found out that Amy and I were going to have a child with special needs, she told me that she cried tears of joy. And I found that fascinating in many regards, but initially I was thinking, she’s out of her mind. I have five little kids at home and now we’re going to be… burdened, for lack of better word, with all of the challenges that go along with raising a special needs child.

And I struggled, for well over a year, with the fact that I felt that way, because once Ben was born and once we held him, and once we saw our children interacting with him, I had terrible feelings of guilt for a long, long time that I felt that way.

And only after the last 12 years of being Ben’s dad and sort of turning into somewhat of an advocate myself, because another interesting little side note is I have two friends of mine. You know, I went to a small college just north of Pittsburgh and you know, only about 1,500 students and two of my college teammates, two of my fraternity brothers, also have sons with Down syndrome. Which is really, the odds of that, statistically are mind boggling, which led me to think our chef at our fraternity house was feeding us something that caused this to happen because it’s just, it’s, it’s astronomical. One of my buddies had his son about six years before, five years before Ben was born. And my other buddy, his son just celebrated his fifth birthday yesterday. So, all three children are about the same distance apart.

Mike was a great source of guidance for me as I was going through all of the question and answer. And I feel like I’ve been a very good source to Rob as he’s gone through some of the challenges as well. And it’s sort of interesting that people were put in your life to help support you through what you think are difficult times, but they’re just—

Greg:     Yeah. Let me, let me back up a sec. Because today there’s people receiving news that they have a special needs child. Today there’s people receiving news that their son or daughter could potentially have Down syndrome. Or just receiving some type of other news that’s viewed as challenging and as you put it, quote burden. If you could tell those parents right now, go back to

— curtain, Amy, 12 years ago, you know, if you could tell those parents one thing, what would that be?

Kurt:      Enjoy it. You may not think it’s a blessing, but you will quickly realize that it is the greatest blessing that you’ve ever had.

Greg:     All right, let’s go there. So, you said quickly, I remember when you just said, “when, the first time I held Ben,” when you watched what it did to your kids. And I watched, you know, Katie just two minutes ago, Ben’s here today, by the way. I just watched Katie with Ben. I watched Ben and your whole family at Maggie’s wedding. I watched you guys all have dinner when my wife and I came out to have dinner with you and your family. And I watched how the boys interact and it’s just flat out awesome.

So, I believe you when it says, when you say it’s a blessing. Today, 12 years later, when did you realize, “Hey, this really is a blessing and we should have tears of joy”?

Kurt:      It took a bit. It, you know, because again, it takes your mind some time to sorta wrap your — just the enormity of, again, having six children in and of itself, creates a lot of a lot of challenges.

Greg:     Babies in general are—

Kurt:      Sure.

Greg:     A lot of work, stressful. It’s just difficult, for all the moms and dads out there. It’s tough now. It ends up being great, Right? But at first, you know, when they’re not sleeping and they’re fussy. It’s always a challenge. Are there more specific challenges when you have a special needs or Down syndrome, those first couple and difficult years?

Kurt:      Well, I think, I think you don’t understand or realize at first how big of a challenge it may be.

Because again, we’re very blessed. Ben is a very high functioning, interactive, healthy — he is by far been the healthiest of our six children. He’s never had an ear infection. Which again, is just, you

know, statistically it’s so unusual for, you know, children with Downs syndrome typically have heart issues, they have vision issues, they have hearing issues. Our son has none of those. Some of my older boys on occasion in a fit of frustration with Ben acting out at home, have exclaimed quite proudly or loudly, “I’m not sure Ben even has Down syndrome.” Because his mind works in a way that is not—

Greg:     You think he’s faking it?

Kurt:      Sometimes I do. And I’ll tell you one real quick story that absolutely signifies this. You know how cars have child locks on them? We were in the driveway one day and I forgot something in the house and my three boys were in the back seat and Ben was in the third row. And I said, guys, keep an eye on Ben, I have to run inside real quick. I was inside for no more than 30 seconds. And I came out, my three older sons are still in the car. My son Ben is standing in the driveway and the doors are locked. When Ben got out of the car, he knew enough to flip the child lock on the door when it was open, and he immediately shut it so his brothers couldn’t get out of the car. So, tell me that thought process, which I thought was ingenious.

Greg:     Yup.

Kurt:      And I am sitting there watching my 16, 14 and 12-year-old sons in the car locked in the car by a child with Down syndrome.

Greg: So, let’s talk about some of the blessings. I mean your family has certainly learned a lot over the last 12 years. What are some of the blessings of Ben and, you know, as you observe the impact he’s had on your family?

Kurt:      So, one thing jumps to mind very quickly is, you know, my father who you referenced earlier (and I thank you for all your kind words). My father has dementia and he has late-stage dementia. And so, we have him in a nursing home in Murrysville near us and he is just extraordinarily well cared for and he’s very happy and content. And I take Ben to see him quite often. And walking into a memory care facility is a difficult, sometimes, task. And when Ben walks in there, the whole place lights up. He walks around to every single patient and he talks to them and he holds their hands and he tells the women how pretty they are and that he loves how their hair is. And watching elderly people react to Ben the way that they do is — I’m convinced that God put him into our lives at that particular time for moments like that. Because you wonder whether or not these folks have

any family members coming to see them or to spend time with them or to interact with them and Ben sees no differences in people. And that’s one of the greatest lessons that I get from being his dad every day is to look at life through unfiltered glasses because Ben is truly unfiltered, good and bad. He says, and does what he thinks and wants to do.

And that’s very refreshing in many ways because you know exactly where he’s coming from at all times. So, when he gives you a hug and he tells you that he loves you, you know that he’s telling you the truth.

Greg: I was walking down the hall and I saw him, and he came over to give me a hug. And it wasn’t, I’m going to hug you because I felt like I have to hug you. It was, I’m gonna hug you because I want to hug you. Because he was patting me on the back as he was hugging me. It was just a warm hug.

Kurt:      Every day when I come home from work—

Greg:     You told me this.

Kurt:      —Ben’s waiting for me and it’s like Christmas morning when he hears my voice. And we joke within the house about “Who’s your favorite kid?” Amy and I, and of course Amy gives the, “Oh, I love you all the same.” And I answered no, I absolutely have favorites.

But Ben, when I come home and I kid you not, it’s every single day when I come home, he comes in, he jumps into my arms like it’s the first time he seen me in two years.

And he always says, “Dad, how was work?” And most days I say, “You know what? Work was awesome.” And he’s like, “Awesome!” He goes, “That’s great!” And I know that he genuinely wants to know how my day was.

Greg:     Right.

Kurt:      Now, on occasion, I say, “You know what, Ben, today wasn’t such a good day.” You know, the market was down 500 points or whatever. And the expression on his face drops and his shoulders drop and he’s like, “I’m sorry dad.” And just the genuine compassion for helping me through a difficult day, you just don’t get that from everybody and it’s — I can’t explain it, I can only live it.

And I just, I tell everybody I come in contact with, I wish you had the opportunity, for one day, to just experience what I experience every day.

Greg:     Yeah. But you, you took it one step further than that. When we were talking several weeks ago, you said to me you would give anything to live a day in Ben’s shoes, right?

Kurt:      That’s true. March 21st is a very special day in our house. So that is World Down Syndrome Day. So, children with Down syndrome have an extra 21st chromosome. So, March 21, 3/21, signifies World Down Syndrome Day. And I send an email out every year. I started this five or six years ago, I guess, maybe more. And I send it to everybody in my address book: clients, friends, relatives, anybody that I’ve come in contact with, just so I can share what is a very, very special day to me. And I put in there that it’s my favorite day of the year. And I have several bullet points that I put in the email that sort of encompasses my life with Ben. And I do put — and I actually have a copy of it right here in front of me — that I do put, “if I could only live one day in Ben’s world, a world with no jealousy, spite, or distrust, only genuine care for others.” And I put at the bottom, “think about it and imagine what a better world we would all live in if we all had this attitude.” And that’s Ben, every day. That’s his attitude. He’s not jealous. He’s not spiteful. He, you know, he will show anger every once in a while, but it’s very … few and far between. But he lives the way I want to live.

Kurt:      He’s just pure, right? And that’s, that’s obviously somewhat subjective, but I’ll make it quantitative by reading some statistics that absolutely back— that we found — that absolutely back up what you’re saying: 97% of people with Down syndrome like who they are. Let me give you some stats on why that could be: nearly 99% individuals with Down syndrome are happy with their lives. 96% are happy with how they look. 99% love their families. I assume Ben’s in that 99.

97% like they’re brothers and sisters in 86% say it’s easy to make friends with others. I’d be curious how that compares to the general population and as you and I were chatting about this before the podcast and you were saying that, you know, some Down syndrome children that went on to get married and go get their education and they get their college degree.

And we were saying, I’d be curious the percentage of divorce between two individuals that have Down syndrome versus those that don’t. Because they just, they love unconditionally.

Kurt:      They do. And I, I bet you cannot find any Down syndrome marriages that ended in divorce.

Greg:     Or we were talking about, right, crime and harming others and yeah, because they just have such a pure heart. In fact, to demonstrate that pure heart, I’d be curious to just, tell people about how you took folks to the Pirate game and what that was all about. And in the eighth ending, I remember you telling me this vividly, what Ben did on the way out.

Kurt: Yeah. So, a few weeks ago, the pirates had Down Syndrome Awareness Night and we were first introduced to this when Ben was maybe two years old. And so, two of the folks that work on my team, Jackson and Coleen, had come to me with the idea of, “Hey, let’s, let’s organize a night at Down Syndrome Awareness Night for the Pirate game.”

So, I said, okay, you know what, let’s put together a list of people that we could invite and see how that goes. Now going into this, I’m thinking, okay, you know, I’ll buy 15 or 20 tickets to this game and we’ll go and have a good time. And as I started thinking about all the people that are important to Ben, the list ended up being just north of 70 that we had, I think it was 72 was the final number, tickets that Amy and I purchased. And we invited people to come and just celebrate Ben.

And I asked Ben, he actually chose a Hawaiian theme and so I emailed everybody, and everyone wore leis or Hawaiian shirts or shorts or whatever it was. And we had a really, really festive night where he was in his element. And we had actually Charlie who I alluded to earlier, he was there and a good friend of mine, Kurt Kondrich, his daughter, Chloe, was in attendance.

So, we had a really awesome time. And you know, the game dragged on a little bit and we ended up leaving in the eighth inning. And as Amy and Ben and I were walking out of PNC park, all of the different concession stands under the park were starting to close down for the night. So, there was nobody in line except the workers behind the counter. And Ben stopped at every single concession counter and he thanked the workers that were working behind the counter. And Amy and I have learned that when Ben is in the middle of his acts of kindness, we just let him go. You know, at first, we would try to stop and say, “Oh, come on Ben.” But I just, I stopped and I just let him do his thing because the looks on the faces of the people as he shook their hands — and I believe, I even remember one of the women was out behind the counter and he gave her a hug — that I just wonder what’s going on in their world at that particular time. That maybe that interaction with a

12-year-old with Down syndrome or the pat on the back, or the hug was just what they needed in their life at that particular moment.

And so, I let Ben go.

Greg:     Let Ben be Ben.

Kurt:      With certain restrictions, because we would have been at PNC park till after midnight had we really let him do what he wanted to do. But, you know, Ben, when we’re in public, there’s not a person in a wheelchair that he doesn’t stop to say hello to. Elderly people. He holds doors. And I’ve tried to teach all of my sons to be gentlemen.

Whether or not Ben, he obviously has the capacity to remember that because it’s, it’s just uncanny.

Greg: People are just happier when he’s around. You, I noticed in the office, like you watch Ben, Ben’s in the office today, you watch Ben in the office. Everybody sort of has a smile on their face and people just are genuinely happy or when he’s around.

I’m very, very confident I know the answer to this, because I’ve experienced it firsthand, but what some people may think is, “Holy cow, is that fair to my other children?”

Could you just talk about the impact it’s had on the other five Kimmich kids?

Kurt:      Yeah. That, that that’s, you know, I tried to rank all of these positive attributes, and watching Ben make my other children more loving, more sympathetic. It’s opened their eyes to a lot of different things that I don’t believe that they would have been exposed to, had Ben not been their younger brother. It’s really heartwarming to watch, not only my children, but then my children’s friends become exposed to who Ben is.

And Ben has a very, very unique and special relationship with each one of his siblings in a way that’s very unlike any of the other siblings. And it’s, and it’s, again, it’s hard to explain, but it’s something that is so deep that it’s yeah — he has made, as I say in my email that I send out March 21st, Ben has made our family complete without a doubt.

Greg:     Well we just experienced that, right? So, we were in Kurt’s office and I said, “What are the concerns, what are some of the concerns you have?” And you said, if something would happen to you and Amy, you worry what would happen to Ben. And out of the corner of my eye, I saw this hand go flying in the air and it was Katie.

Kurt:      Katie.

Greg:     Katie’s like, I got it.

Greg:     And I’m sure if your other children were here, they would feel the exact same way.

Kurt:      Yeah. I think now that as with each year that passes and, you know, my oldest daughter got married in December and she and her husband or Katie is a senior in college, Matt, we take to Grove City tomorrow — that I know without a doubt, every one of my kids would step up very gladly and very — you know, I bet you they would actually fight over who got to have Ben, I think that there would be a lot of fights and arguments because the others were hogging him. And yeah. So now that my kids are older, it’s less of a concern to me, but it’s still, for any parent with a special needs child. Yeah. Life after us. That’s a big weight on my heart.

Greg:     So, in general, you and I were talking about just how people see the negative, and I apologize to you, because I hope you remember this story about your mom. And how when you found out your mom was sick — and this just shows you how, Kurt was talking about how he learned to look for the positive and things and how your mom was ill and how you looked at those days, instead of a burden of “I have to go to the hospital,” you looked at it as an opportunity to spend a couple more days with your mom.

Kurt:      That’s right. And now that my dad and his health challenges, you know, it really sorta brings full circle the saying of, “Hey, enjoy each day that you’re given because tomorrow’s not guaranteed.” And, it’s a cliche, but it’s really something that I try to keep in the front of my mind. Because you know, I can’t believe Ben’s 12 and I’m sure that it’s not going to be too long from now and I’m going to say I can’t believe I’m going out to have a beer with Ben. He’s 21 or 30. Or whatever.

Greg:     Enjoy every moment, right?

Kurt:      Enjoy every moment.

Greg:     So, I was talking to Jim Wilding, we were visiting last week about how we try to help people maximize moments. And we talked about how, you know how people say, well, “live your day as your last one.” I don’t know that — living everyday like it’s your last one. Maybe somewhat of a challenge, but if you could live only one more year, it becomes a little easier. Right? If you could

just live one more year and you live every year like it’s your last year, that’s probably a little more realistic.

Kurt:      Yes.

Greg:     And if you could live one more year?

Kurt:      If I was living today as my last, I probably wouldn’t be here with you. No offense.

Greg:     I think you would, I think you would! I think you would take your last day to be an advocate for people with Down syndrome, I do.

Kurt:      For Ben. To put it on a podcast for all of eternity.

Greg:     I do, because I can’t imagine receiving the news and hearing you talk about, first of all, being surprised that someone would say to you, you should cry with tears of joy. Sounds bizarre. And then for you to experience it, not only the positive effect that it has on your family, on you and Amy, but also your family. It’s been a delight to watch and I do believe it’s, it’s changed you for the better. Has made you a better husband, advisor, son, et cetera.

Kurt:      My friend Kate was 100% right when she said she cried because God sent Ben to us. I can’t imagine life without him, quite frankly.

Greg:     God bless Kurt. I’ve always found you to be an engaging and optimistic person, but I do feel like just watching your face as you talk about Ben and the blessings of Ben, I firmly believe it’s affected your family positively and have changed them for the benefit— for the positive.

What are some of the ways it’s changed you and how have you evolved as a person by experiencing and having the opportunity to be the father to Ben?

Kurt:      I’m sitting here sort of laughing inside because this, this just came up within the last week. My son Matt, who just turned 19, is heading off to college. Something was going on at home and I, like I normally do, I sort of handle it. I just like let it roll right off my back. And he goes, “Dad, how can you be so patient all the time?”

So, I will tell you that Ben has certainly helped me become a more patient person, because I just don’t let the little things bother me. I just, I can’t.

Again, because I think of not only Ben, but all kids with special needs. And the challenges that they have from their appearance, perhaps, from the way that they are perceived in public.

And I see it, you know, I, when I walk with Ben, you know, I, I see how people look and watch us interact. And I always use that as a learning moment for anybody that might be watching me. So, empathy, patience, I think I’m a much better listener than I ever have been.

Greg:     Were you always this positive?

Kurt:      I’ve always been a positive person.

Greg:     Yeah, I always remember…

Kurt:      I always have. Maybe this is just me taking it to another level when you think you’ve sort of

Greg:     You find the good in almost everything.

Kurt:      I try to. Because my attitude is, what good is it gonna do for us to focus on the negative?

Greg:     Right.

Kurt:      You know, again, at home I always joke that, you know, the glass is always half full with me. It’s not half empty, it’s half full.

And I think of, of you know, again, I as, as I just sort of glance down as we’re talking with, with some of the, some of the different bullet points that I’ve included in my annual email where I see here, you know, Ben’s hugs make even the hardest of days seem so simple, nonverbal communication or a smile on his face or a pat on your back. And I have here: his gentle spirit and passionate soul are infectious. And that’s absolutely the case with my family and our other kids is they see Ben and his genuine goodness, and they can’t help but mimic him and do what he does. And you know, and we live in a world that just has a mental picture of what is “normal.”

Greg:     There is no normal.

Kurt:      No, but it always revolves around physical appearance, but not who you are as a human.

Greg:     But life does become easier when you realize there’s no normal, everybody’s trying to become, there’s no normal, we all are unique in our own way. So, when you accept that, it becomes a lot easier. So, Kurt, thank you.

Greg:     At Confluence we learn from you also, we appreciate you as an associate and we appreciate the impact you make on all of us every day and we are delighted that your whole family and more specifically Ben are part of our extended family.

Kurt:      Amen.

Ben:      Hi Dad. You’re my best friend.

Kurt:      Best. Friends. Ever.

Greg:     Aww. Gave a kiss.

Ben:      Are we done?

Greg:     Yeah, thanks Ben!

Greg:     Thanks for listening. If you’d like to hear other subject matters that may be of interest to you, please check us out at ConfluenceFP.com/podcasts.

Confluence Financial Partners­­ – Investing in a Healthy Lifestyle: Mary Lamb, M.D. | Episode 5

Greg:    The best investment you can make in planning for your retirement is living your healthiest life. Imagine that. Right.

Greg:    This is Greg Weimer with Confluence Financial Partners and I have the privilege today to be with Dr. Mary Lamb, the owner and founder of Lamb Medical & Aesthetics. Welcome Mary.

Mary:    Thank you. Happy to be here.

Greg:    We are delighted you are here. So, Meredith, to start off, would you just give an overview of your model of care versus the typical family practice that people would be familiar with. You have personalized — comprehensive, personalized care. How would you describe that to someone?

Mary:    Yeah, so the way that I have the model set up is very different from insurance-based care. So, it’s called a direct care or concierge medicine. There’s a little bit of a nuance of a difference. But the way it works is that the patients, I treat many fewer patients. So, in a traditional practice I had over thousands of patients, over 3,000 patients. In this practice, you limit the patient population. Patients have a fee to be part of the practice where they pay a small amount, either monthly or yearly, to be part of the practice. For example, children are around $50 a month, adults around a hundred dollars a month. And different cities and different places vary in terms of that amount. But it’s a nominal fee to be part of the practice and what that gives you is unlimited access to your personal physician. So, everyone gets my cell phone. There’s HIPPA-compliant apps that we use to communicate. People can do virtual visits any time. There’s no limit in the number of visits that people can have. And they also participate in a comprehensive, executive physical exam every year. So, you get lots and lots of care, lots of access, lots of convenient, easy comprehensive care that is just undoable in the traditional practice.

Greg:    It is absolutely essential. You not only have a financial plan, but you also have a plan for your wellness. And just like financial planning, your advisor is your partner in your financial plan. It is essential also that you have a healthcare professional to be a partner in your wellness planning.

Mary:    If you don’t have your health, you can’t enjoy your wealth.

Greg:    Right.

Mary:    Health is the cornerstone of enjoying your life.

Greg:    Actually, we found a stat that confirms that. More than 80% of today’s retirees say good health is the most important ingredient for a happy retirement*. So, there it is. Right?

SOURCE:               *According to a Merrill Lynch study, more than 80% of today’s retirees say good health is the most important ingredient for a happy retirement. Imagine that.

Mary:    There it is.

Greg:    So, here’s the three things I thought we could talk about for the listeners. One is, you have a very different practice and I’ve experienced that firsthand at the age of 54. And understanding your practice more in the last year. It’s unique. And so, I thought we’d do a couple of things.

One, talk about the traditional practice. How you’re comprehensive, personalized care is absolutely different. Where we think the industry’s going on being a physician and family physicians. So, that’s one to wellness.

Two, and you’re right, it’s, you can’t maximize your life without wellness. So, what are some of the things we can do? There’s a lot we can’t control, but there are some things we can, we’ll talk about that.

And then diagnostics. I feel like the diagnostics and the tests that you can run, it’s really remarkable. And is there any innovation there? Which ones should we think about? Which ones shouldn’t we think about and where’s, where’s it going?

So, so first why don’t you just tell us the change of where you’ve been because you’ve had a lot of experience over your career and you’ve just made this change how long ago?

Mary:    Almost three years.

Greg:    So, what’s the difference, biggest difference between what you’re doing and the traditional family practice model?

Mary:    Yeah, I’ve done a little bit of it all, I think in primary care. So, I did, I did some teaching in a residency program and then I did urgent care. And then I tried to establish a comprehensive, progressive primary care practice. And in the traditional model, it’s just very difficult to give the type of care that I wanted to give. And it, it was apparent to me that in order to do that I needed to have a different model, different model of care, different way of actually engaging with patients. And so, this direct primary care or concierge payment model is different in that I don’t accept insurance. And in doing so it, it changes things dramatically. So, lots of my time, instead of being served by insurance companies and having to perform in their programs and provide their documentation, I can actually spend in patient care.

Greg:    So, like you just said to me, before we started, you just whispered, “Hey, did you get your stuff done?” I had a couple of things you needed me to get done medically. And so, it’s like, “Hey, did you get it done?” And I just think that interest that, and I remember what you said to me one of the times, “When you go to the hospital, the cardiologist may know about more about your heart, but when you go to the hospital, I know more about you.” So, so you can be the quarterback, which is interesting. That’s what we talk about, being the quarterback for our clients with their accountant and their attorney, their attorneys know a lot more about estate planning than we do. We can be the quarterback because we understand your family and what you’re trying to accomplish. And that’s what, in our family we’ve really been able to see.

Is that the new frontier? Do you think that’s the new trend? What you’re doing?

Mary:    Well, the, the medical system is broken. I think we can all agree about that. And the fix is not easy. I think that’s also the issue, but the big players are the insurance companies. They really do dictate so much of the care that, that we receive. And so, this whole direct primary care movement is, is a backlash against that.

Greg:    Is it a movement?

Mary:    It is.

Greg:    I still bring it up to people, and they are like “what?”

Mary:    Yeah, most people in smaller cities don’t know what it is, but larger cities they’re quite prevalent. So, New York, DC, especially Florida, there, there are several practices like these.

WHO:   And I’ve mentioned like what it costs typically around here for that versus other cities, and the delta’s gigantic. So, it feels like in Pittsburgh it’s still relatively new,

Mary:    Right, it is. You know, so for example, $50 a month for kids, $100 a month for young adults, $150 a month for older adults. So, it’s pretty affordable for the service that you get.

Greg:    It’s an entirely different service model. I mean it feels like, I mean the days of sitting in a waiting room for two hours with a bunch of other people, who could be germy.

Mary:    Right.

Greg:    To wait around and it just doesn’t feel comfortable. So, this really is different.

How does the single payer solution with insurance? How does this effect the typical patient and the care they’re going to receive from an ordinarily family practice?

Mary:    I think the difference is that you know that the, we’re in a traditional system, you’re required to see a certain number of patients in order to meet overhead or in order to meet insurance guidelines. And so, you really have about five minutes with patients, seeing 30 patients a day and trying to—

Greg:    So, wait, how many patients do you see a day?

Mary:    30.

Greg:    30?

Mary:    30, yeah. Most primary care doctors do between 25 and 30 a day. Yeah.

Greg:    So how much time can you prep going in? She’s just like read the chart you’re going in.

Mary:    I would try and get up very early in the morning and try to go through everybody’s chart and see what they need and do a lot of pre-visit planning just because you don’t have so much time during the visit. So, I tried to go in there knowing the plan and knowing what to do. But it’s the follow through and the details and the quarterbacking, talking to other doctors, arranging tests, making sure the patient knows where to go, what to do, all of that stuff just gets lost.

Greg:    How do you do that for 30 patients a day?

Mary:    Well that was it, you don’t.

Greg:    No, in that world.

Mary:    You don’t.

Greg:    But that’s the world, right? The new frontier of what you’re doing is different. But that’s the world.

Mary:    And that’s why there’s, no news as good news. That’s why there’s, here call this and you, you arrange all your testing. That’s why there’s a lot less follow through and support for the patient going through difficult things or going through diagnostic workup for something that’s important. So, the difference is, you know, in my practice I can, I can lead all those things. I can really guide the patient and then I can also see the patient in, in all avenues. I can do home visits if they need it. I do that for hospice patients. It’s one of the most meaningful things that I do. I haven’t been able to do that for years.

Greg:    Kid calls us from college and says like, “Hey, what do I do?” I say, “Skype Doctor Lamb.” Done!

Mary:    Right? There’s my cell phone, there’s virtual, there’s this, you text, you can call — you can actually get me for the needs that you have.

Greg:    So how many patients would you see in day?

Mary:    So now, I see approximately, anywhere from about 10 to 15, so half.

Greg:    Half.

Mary:    But I spend so much more time, like my time allotment is better. My follow-up is better. I can, I take time, intersperse that I can coordinate care.

Greg:    So that’s where our worlds are different. Like if I, if I would have three meetings a day — now we’re on the phone a lot. We’re doing research, we’re doing portfolio management. But like three’s like, that’s like about it.

Mary:    That’s a lot.

Greg:    Yeah. Just for like pre-work, follow up. Absolutely. It ends up being a lot. So now the, so the single payer though, is that going, I mean, does that help the situation of a typical family practice? Does it hurt?

Mary:    You mean you mean if somebody has insurance or—

Greg:    No, if we go to single payer. If there’s one insurance company owned by the government in the United States of America.

Mary:    Oh gosh. Well, there’s other countries doing that, right? And usually the care is just, is not the same for sick care. So, in the U.S. we’re very good at taking care of people who have illnesses. Right. We have great testing. We have great, we have great services, we have great treatment for very ill people. We don’t have great preventative care. That’s our, that’s our weakness. And so, some of those single-payer, the national health care systems, they’re very good at preventative care. But boy, if you get something bad, it’s not good.

Greg:    It’s interesting the folks that rely on insurance, I know some other family physicians and when I hear them talk about, and I watch them talk about their practice, some of them are not enjoying it as much as they should. They’re brilliant people. You don’t get to be where you are. Right. UVA, Princeton, you don’t get to where you are unless you’re brilliant. And then you get there and it’s not awesome. But then I see you talk about your practice and your face lights up and what you’re doing and it’s like really fun. Right. And what did I say to you? I said to you a couple of weeks ago, I said, what’s the biggest difference? So, what’d you say? Like freedom or something like that. What’d you say?

Mary:    Freedom to take care of people the way I think they deserve to be taken care of. And I did not have that freedom before, someone else told me how to take care of people. And I I’ve gone my whole life training, learning how to take care of people. And if you can’t join them and you can’t take care of the whole person and you can’t do it in the way that you feel is right, it doesn’t sit well morally with you.

Greg:    So, what you were saying is, if I’m not putting words in your mouth, you get to decide what’s right for your patient, not an insurance company from a faraway land.

Mary:    The patient and I get to decide. Because I have the time to actually talk with them about it. Right? So that, so it’s a shared decision making. It’s not like, this is what you need to do, because I’ve got 30 seconds to talk to you about them, right? It’s, it’s really about, Hey, what’s important to you? This is what I see. Let’s make some decisions together.

Greg:    Well, God willing, that becomes not only the new frontier, but the new standard.

Mary:    It would be great if it takes off.

Greg:    Wouldn’t it be great?

Mary:    There’s a lot of roadblocks against it, but, yeah.

Greg:    We’ll see. So, let’s go to the second — people want to maximize their life and the statistic I shared, that 80% of today’s retirees say good health is the most important thing for happy retirement. You know, we think about that a lot. If we just help people with their money, but then when they get to this magical time, which I think there’s a risk of waiting so much for retirement, you don’t enjoy your life, but that’s a different issue. But if someone gets to be 62 or 65 and retires and all of a sudden thinks they’re going to have fun and then they just don’t have the energy or the health to enjoy that. Let’s talk a little bit about wellness because you said something to me. I said, what’s the biggest thing? And what did you say? Like the middle years, if you could repeat that. The middle years of one’s life?

Mary:    Yeah, the middle years of one’s life, are, I think, are the most neglected in terms of their health. Because they’re so busy, they’re busy with their careers, they’re busy with kids, they’re busy with their families, they’re sandwiched generation of elderly parents. There’s so many demands on their time that they don’t have time to take care of themselves.

Greg:    You’re saying middle age, like—

Mary:    Gosh, 30 to 50, 30 to 55.

Greg:    Okay. So, I don’t need to take care of my health anymore. I’m 54. That ship has sailed. I’m actually wonderful. So, let’s go through a couple of things because, I know, I think people try, right? Right. Like this new diet. There’s the — I may mispronounce them — but there’s like the “whole 30,” the “Quito,” eat fruit, don’t eat fruit…

Mary:    Yeah, right.

Greg:    Is any of that sustainable? When you say things that control is die, a big part of it?

Mary:    Oh my gosh. So that, you know, the tenets of wellness really are, the habits that you create every day. You know? So, things like, having a regular schedule, things like, making sure you get adequate sleep. Things like, eating a healthy, well-balanced diet, things like, trying to fit in exercise as much as you can, you know, whenever you should.

Greg:    Meditation, is that something—

Mary:    Sure, well that, in my mind, that encompassing stress-relief so some kind of stress techniques to make sure that your stress level is controlled in a way that’s healthy, that isn’t in a way that’s not abusing drugs or alcohol or tobacco. It’s, it’s more meditation, exercise, you know, support with friends, time with family, things like that. Getting away from work and balancing your life in a way that, yeah, that helps you guide—

Greg:    What do you think of the diet stuff?

Mary:    So, some of the diet stuff is very faddy. Yeah, for sure. And I think it helps people focus on their diet again and focus on, on ways to lose weight. But a lot of it isn’t sustainable, but it brings it to the forefront of people’s minds. So, if they’re paying attention, they’re usually trying to improve their health. You really get in trouble — most people — when they’re not paying attention at all, and they’re just not watching portions and they’re not really making good choices because they’re busy and they, you know, frankly don’t have time to deal with it or don’t have the right resources in place to make sure they’re eating that way. So, I think it has a place in helping people. But gosh, for the long haul, I usually don’t recommend it. I, I definitely am more of a moderate approach, you know—

Greg:    And some of it’s confusing and some of it feels conflicting.

Mary:    It is. And, and some of it you just plain don’t like—

Greg:    Yeah. Like we hired a nutritionist, she’s like, “Don’t eat fruit.” I’m like, “Fruit! Can we not have an apple?”

Mary:    It’s about as close to nature as you get!

Greg:    I thought that’d be a good thing.

Mary:    Right.

Greg:    She’s wonderful by the way.

Mary:    I’m much more about moderation. I think people need to, you know, tracking tools, things on your phones now are very interesting. You can really gain a lot of information just by tracking what you’re eating and how many calories you’re eating and what food groups you’re missing. So, I do that. I sit down with patients and look over those things and try to find some strategies where they can actually reach their health goals. So, there’s lots of—

Greg:    What about water? Like, do you drink a lot of water? I hear conflicting information about that also.

Mary:    Water is important. I think people don’t, they under-drink because your thirst mechanism isn’t quite there in terms of telling you how much you need.

Greg:    Yes. I heard we were in the desert once and, and the person was like, you know it was a tennis thing — I don’t play tennis but, that happened to be a tennis thing. He said, “By the time you’re thirsty, it’s too late.”

Mary:    Right. So, your thirst is just a delayed and not really adequate measure for you. Especially as we age, it gets worse.

Greg:    So how many ounces of water a day? People say a hundred. That’s like a lot. A hundred ounces of beer is easier. Hundred ounces of water, somehow—

Mary:    If you had a hundred ounces of beer, you gotta do a hundred ounces of water you won’t get out of the bathroom if you’re doing that.

So, anything dehydrating, you’ve got drink something hydrating, right? And so, people think, Oh, if I’m drinking soda, if I’m drinking coffee, if I’m drinking something, then then that’s going to replenish my needs. It’s not.

Greg:    So, like if you’re drinking coffee in the morning, you have three cups of coffee, go coffee, water, coffee, water. Is that right?

Mary:    Yeah.

Greg:    Or if you’re out and you’re having dinner and you’re with your spouse and you’re having a mixed drink or glass of wine, have water also. Make sure you drink the water.

Mary:    Definitely. Yeah.

Greg:    Yeah. I do feel better when, as you and I both sit here with a glass of water. I do feel better, right when I drink water. And we actually read some statistics on, on alertness and productivity. So, we bought everybody in the firm these Yetis and we have them all drinking water and how many, how many ounces a day. And at least for me, I hope for everybody else in the firm, it was really, really helpful.

What’s the one, what’s the—

Mary:    Helps people feel better for sure.

Greg:    Then when you get used to it, you start craving water.

Mary:    Yeah! You’re more like, oh, I need it. And I think it helps with hunger. I think it helps fill people up, I think it helps in a lot of ways.

Greg:    Okay, so there’s a takeaway for the listeners. Drink water.

What’s the other big one you mentioned? Another big one. And I’ll say see if you say the same thing, if not, we have two more. What’s the biggest thing people could do?

Mary:    In terms of their, in terms of health?

Greg:    Their health.

Mary:    I think really paying attention to those years where they neglect it, you know, or go to the doctor, make sure you’re getting your blood pressure checked, make sure your vital signs are in check. So, your BMI isn’t too high. Yeah. Making sure you’re getting your screenings that are age appropriate. All that stuff is so important just to pick up things that we can treat quickly.

Greg:    So that’s very close to what you said to me. You said, “Get a physical.” And I’m sure there’s people listening right now, by the way, you’re very kind. We don’t like going to see you.

Mary:    I get that every day.

WHO:   So, going to see your doctor, it’s not, I mean it’s just, not— Now yours is a more pleasant experience given the environment —

Mary:    Yeah, we try to create a nice experience.

Greg:    —you wear a robe; you think you’re at Nemacolin. It’s all nice. You’ve got great music, but it’s still going to see a doctor. So, in fact, I said to my wife’s grandfather, I said — he died at 90 some years old — and I remember saying to him, “What’s the key to living that long?” He used some curse words, so I’ll take those out. He said, “Don’t go to a doctor.” Because they’ll find something. I’ll go find something.

Mary:    He rolled the dice and got lucky.

WHO:   But that’s it, right? So, how often do you suggest someone comes in and gets a physical?

Mary:    For my practice I do yearly, there’s so much that can happen in the span of a year in someone’s life that I think it behooves them to really talk with me and really go through how are they’re doing, things that happened, changes in their health status. I have so many questions I always like to ask, you know, there’s so many—

Greg:    That’s one of the things I appreciate about your practice in that you get paid whether we come in or not.

Mary:    Yeah.

Greg:    And you’ll get the email. Where are you for your physical, right?

Mary:    Yeah.

Greg:    And I mean it’s a lot of other good information on raising teenagers or you know, or if something’s going on in the community with, you know, a virus or something, you do a great job of keeping us up to speed. But the annual physical is something that so many people don’t — In fact, what we’re thinking about doing, what we want to do, is actually, in the next 12 months, give people bonuses in our firm, if they get their physicals!

Mary:    A lot of employers are doing that because they recognize there’s value in that.

Greg:    We want healthy associates that aren’t worrying about things or having nagging health issues. Do you see a lot of folks that go — I’m just the people listening to this, I bet someone’s like, “Uh-oh, I drink water, but I better go get a physical.” But it’s true. Right? Do you see a lot of people when they first come to your practice?

Mary:    Oh my gosh, and they haven’t been seen by doctor for years.

Greg:    I was one, I don’t know if you remember that. I was one and you looked at my chart and you’re like, where? Like what? Like what? You went off the radar.

So be moderate. Be careful in your middle years. In your middle years. it’s probably true that we still feel like we’re going to live forever.

Mary:    You have that mentality, yes.

Greg:    So, we still felt like we’re going to live forever. And so you just probably come a little less when you’re younger, maybe you’re more active and then when you get older, you become more aware of your mortality and then in the middle and you’re right, you’re, busy and you’re like, I’m gonna live forever. I got 30 more years now, I don’t have to worry about it. And then you get to be 60 years old and it’s too late.

Mary:    It’s too late.

Greg:    Unfortunately, as we’ve talked about before, there’s a lot of things you can’t control.

Mary:    Right.

Greg:    And that’s very unfortunate, but there are things we can control, so thank you for that information. The last thing I wanted to touch on is innovation and diagnostics. Yeah, I mean, you said when we were talking, you said, we should talk about cancer markers. And I’m like, or tumor markers. That’s right. No, no, no, no, no, no, no, no, no, no, no, no. We’re not talking about that. But just want to explain some of the new diagnostics and the benefit?

Mary:    And there’s some places, it’s interesting. It’s a catch 22, sometimes. There’s some places that will do, you know, full body MRI or full body CT scan. We have the capability of doing those kinds of things and there’s people that offer it at just, you know, pay out of pocket cost. Sometimes it just runs into some trouble. If you find some things that really aren’t that important in terms of your health and your future, it can lead you down a path of emotional turmoil. As you’re looking at those things. The body makes all kinds of benign things, cysts, lesions, things that aren’t really concerning. And so sometimes doing a lot of testing can be a problem. Other times there’s incredible value, valuable information that you can find. So, if you do tumor markers and they’re elevated, it just allows you to look at that area much more carefully and see if you can find a cancer before it’s spread, before it’s more of a problem.

We can treat cancer in its early stages very well and very easily. It’s always the later stages that’s the problem. So, we’re constantly looking for things to screen the population in order to find a cancer at a time where you can treat it. And that’s why it’s so important to get things like your mammogram and a colonoscopy. Prostate cancer screening is still controversial —

Greg:    Yeah, I remember you saying that.

Mary:    But yeah, but there’s things that we can do to look and see if people are at risk for the most common cancers. The thing I think that’s the most interesting recent development has been screening the genome. Just, just sequencing the genome. So, there’s all this genetic testing, there’s even genetic testing for cancer now. So, if someone is diagnosed with a cancer, treatment is actually based on the biology of the tumor and the genetics and immunology of the tumor. It never used to be.

So that’s a whole new advance that’s fascinating. But when you get your genome sequenced yourself, you can find out all kinds of information, things that you’re at risk for, things that may be troubling to hear. So, it’s a good idea to have a good relationship with your physician who can go through those kinds of things and watch out and come up with a plan for you. How do you, how do you deal with that information over time? You know, and what do you need to do in terms of follow up? The other thing that some of these companies do is once your, once your genome is sequenced, they will go back with new advances and new things that they find and re-sequence those people or re-test those people against a new mutation or some kind of disease that they uncover to see if they have it. So, I just got notified by a company just last week that a patient of mine was positive for a new genetic sequence that they didn’t know about.

Greg:    So, is that the thing that’s going to change medicine? Because that’s what I hear, right? The sequencing of the human genome. So, when I was over at Children’s Hospital, you know, I’m involved over there. And so, I had the privilege of being in the lab and they were talking about the advancements in treatment and the new standard of care based on being able to sequence the human genome. And I will get the numbers wrong, but I think 10 years to sequence once genome was tens and tens of millions of dollars and it took months and months, now it’s a thousand over the weekend.

Mary:    Right.

Greg:    Or it’s, it’s or hundreds over the weekend. That’s how much.

Mary:    Yeah.

Greg:    So, when people say like medicine’s changing like, right now, right?

Mary:    Right now, it’s changing absolutely.

Greg:    It’s right now. So, I guess the good news is if someone is diagnosed with something as you’re suggesting, there’s hope on the way.

Mary:    Oh, for sure. Yeah. And there’s so much you can do in terms of personalized medicine too, again, I feel blessed to be practicing medicine this way because I can practice really personalized medicine. It doesn’t have to be just population screening, which is what insurance does and what the traditional model does. It’s really about you and about what your risks are, what your needs are, and how I can best keep you functioning and living your best life.

Greg:    Like, like for example, just as a quick example, I mean, I know you were telling me about an blood test that actually you can do and it’s not 100% by any means, but it actually says, it’ll actually inform you on which foods are likely to agree with you and which ones aren’t.

Mary:    Right. Yeah, yeah. So, there’s a newer test that looks at inflammation rate based on the foods that you eat. So, it’s, it’s different than an allergy. So, there’s another other blood tests that can test for allergens in the blood. So that’s a true IgE-mediated sort of allergy specific test. This one is inflammatory based. So, you can measure inflammation in someone’s body, in someone’s bloodstream when they’re exposed to certain foods. And it’s really fascinating. I’ve had some real breakthroughs of it.

WHO:   So, I think it’s, it’s like, it gives you, and it’s just simple, right? It’s like, here’s the red foods, here’s your yellow foods, here’s the green foods. My red food was a banana.

Mary:    Yeah.

Greg:    Like if I had had an upset stomach, I would have ate a banana. And like that’s the one thing that not so good.

So anyhow, Mary, thank you so much. As always, wealth of information. I absolutely love your passion for wellness, your passion for creating a new standard of personalized care. So, thank you so much for your time. We truly do appreciate it. Thank you so much for having me. Appreciate being here.

Greg:    Thanks for listening. If you’d like to hear other subject matters that may be of interest to you, please check us at ConfluenceFP.com/podcast.

Confluence Financial Partners — Maximizing Your Legacy: Kate McKenzie | Episode 3

Greg: Over 95% of high net worth clients are generous in their support of various causes. Imagine that.

This is Greg Weimer with Confluence Financial Partners and I’m here today with Kate McKenzie, who’s the assistant director of development for The Pittsburgh Foundation. Welcome Kate.

Kate: Thank you so much for having me, Greg.

Greg: I’m looking forward to this conversation because I’ve met with you several times now and, I remember the first time actually, the first time we met was in this room. It was, and I’ve always been impressed with The Pittsburgh Foundation and what they have been able to, to accomplish for families and philanthropy and bend the curve on some really big issues for our society, but equally important, I have to tell you, when we met in this room, I was really impressed with your passion to help families find their values and what they really care about in their philanthropy.

So, we’ll get to that in a minute, but just for a little bit of a backdrop, could you just give us a brief overview of The Pittsburgh Foundation?

Kate: Sure. The Pittsburgh Foundation is a community foundation. We are one of the oldest and largest in the country, believe it or not. And we have just over 1.2 billion in assets. But really, what we do is we help individuals and families start individual funds under our umbrella. Those are named funds so they can be named after a family, or a family legacy, or they can remain anonymous if they so choose. And during their lifetime. And again, after dollars are continuously being granted out to the nonprofits that the donors care about most in the community.

Greg: And what I like about The Pittsburgh Foundation and working with foundations in general is one of the things that Confluence is, you know, that we think a lot about is, how do we help clients and families maximize their legacy.

For the listeners. Kate actually participated in an off offsite with us last week where we brought the entire organization together. And we talked about donor-advised funds and we talked about the difference that philanthropy can make in working with families. So, one of the things you said, and I don’t know if you remember this or not, about how you can set up a foundation, and you used the number 100, and you talked about your legacy in context of a hundred years. Do you remember that?

Kate: Yeah, I do. I think what I was really trying to get across is that I’m working with a community foundation can really help individuals and families, just like you said, create that legacy. And when we talk to our donors, your clients about their philanthropy, we ask them, “Mr. and Mrs. Client, what do you want this fun to look like a hundred years from now?” Because all of our funds are permanent endowments. So, we want to make sure that the things that the donors care about most in the community, that we’re really having a conversation that’s ongoing and capturing that intent to make sure that it’s always going to go to the place that they preferred.

Greg: So, it’s an interesting day. I’ll connect two dots for you because I totally agree with what you just said. And then this morning, I had a conversation with a very good client and he was talking about one of his concerns with some of the organizations he’s involved in — charities — and he’s a very generous human being — is what direction are they going and are they? Is he still going to be motivated in three years or four years or five years to be contributing to the same charities? What type of due diligence and expertise can The Pittsburgh Foundation lend and helping make that assessment?

Kate: So, we can help families in a lot of ways to give money strategically and to know that the money that they are giving away to nonprofits is going to go to great use. We have, once a donor starts a fund at The Pittsburgh Foundation, they have a dedicated donor services staff, that’s their person. So, they will be able to utilize our staff members to do research to know who’s doing the best work in a specific space within nonprofits. And we’re able to help that client make sure that their money is being put to good use. And in addition to that, if clients are, and your donors are, naming specific nonprofits in with their fund, when they establish it, we’re making sure that those distributions are always going to nonprofits who are in good standing with the IRS and who are using the money in the way that the donor intended.

Greg: Hearing you speak. I’m just wondering, Pittsburgh Foundation sounds really big, foundation sounds really huge… What’s the minimum you have to invest, or you have to contribute to open up a donor-advised fund, for example?

Kate: The minimum to start a donor-advised fund at The Pittsburgh Foundation is $10,000.

Greg: Okay. So, I know that’s not the typical one, but it just shows you, for a lot of families, having a foundation of some sort is very doable.

Kate: Absolutely. And it’s a great way to just start that legacy.

Greg: Explain to our listeners what a donor-advised fund is.

Kate: So, a donor-advised fund is an individual fund, a named fund, under the Community Foundation umbrella, that’s established to give money away and grant money to nonprofits as the donor recommends throughout any given year. So, it’s very flexible. And that the donor can send grants out to any nonprofit, any 501(c)(3) domestically. Usually grants from the foundation in Pittsburgh go to Pittsburgh-based organizations or a surrounding area, but they can use that money throughout the year to give donations and grants away to nonprofits. Of course, when they make that initial gift to The Pittsburgh Foundation, they get an upfront tax deduction by the end of that calendar year and then have the flexibility to give that money away as they see fit.

Greg: So, if someone had a very lucrative, lucrative year where they’re gonna pay a lot of taxes and they want to make the majority of their contribution in one year, right, you could open a foundation and get the write-off in that calendar year.

Kate: Absolutely correct. And that’s a very smart way to give to charity.

Greg: And then the other thing is, so then you can advise and maybe help explain the advisor role. You can advise where you would like the grants to be made, in perpetuity, either you or your successor advisor.

Kate: Correct.

Greg: If you could just explain.

Kate: Yeah, that’s correct. So, with the donor-advised fund, the client and donor actually has the ability to recommend those grants during their lifetime. And then it’s an ongoing conversation with us to figure out, “What is the future purpose of this fund look like again a hundred years from now?” “Would you like your family to continue the advising, as successor advisors on this fund, to make grants out to nonprofits or would you prefer to name specific charities to receive the distributions from this fund?” It can look a lot of different ways and it’s very customizable and individual to that particular donor.

Greg: Do people normally contribute stock? Could you talk a little bit about the advantages of that? Or cash?

Kate: Sure. Cash is always king, but appreciated securities make a whole lot of sense when you’re talking about charitable giving. The reason being, the client of course gets that a fair market value for the stock gift for tax purposes. And that’s the biggest bang for their buck because they don’t have to realize those capital gains. They use that to fund their donor-advised fund at The Pittsburgh Foundation. And then they can recommend those grants as they prefer throughout the years.

Greg: So, here’s what’s interesting, I remember last week you mentioned a couple of numbers. Over 90% of high-net-worth investors are inclined to give, right?

Kate: That’s right.

Greg: And then, what percentage of their financial advisors are involved?

Kate: About 6.6%

Greg: So that’s crazy.

Kate: Yeah.

Greg: Because well, two parts of that I find somewhat concerning.

One, that means sometimes they should be using highly appreciated securities and they’re not. So, there’s some people contributing cash that could be using highly appreciated securities and there are some tax advantages to that. So, that’s one.

And then two, just how does it fit into your financial plan? So, that is actually somewhat concerning.

The other thing we talked about, you talked about, and I’ll paraphrase it as: how philanthropy and a donor-advised fund can be a gateway conversation to have families talk about their wealth and what their wealth means and their values and their expectation. Could you talk a little bit about how The Pittsburgh Foundation works with families and helps them communicate about their goals and objectives around philanthropy?

Kate: So, bringing a family together to have values-based discussions about philanthropy is really important because it’s more than just money and it brings people together around the table to talk without having to talk numbers at all. And it brings people around for a purpose.

Greg: Did you know that, one of the challenges of a family, I shouldn’t say challenges. One of the opportunities of a family is to figure out what they’re all about is really all about.

Kate: Yeah.

Greg: Right? So, what’s their “why?” Any great company, any great individual, any great family figures out: what’s their “why.”

If you don’t mind, last week, you brought these pictures on those cards, those cards you brought to us. I thought they were fascinating. And could you give our listeners just a little overview of the exercise we went through and how it helped people really visualize what they cared about?

Kate: Absolutely. I would start by saying too that it’s important when you bring different generations of families together to have an understanding that everyone is coming from a different place. So, if you have two to three generations around the table, values and understanding of the world are going to be so different and also values around money, without a doubt. But the tools that we used with your firm last week are really helpful. We at The Pittsburgh Foundation have several different types of activities that we can facilitate with families around values, legacy and things that really matter that have really nothing to do with the dollars.

Greg: Yeah.

Kate: To talk about their highest ideals. So, in the case of last week, we use something called “picture your legacy.” These are cards that have photos of all different types of things on them, from nature photos, to old family pictures, to athletes, you know, in a race. And it allows for families and individuals to pick out cards that speak to them in some way and how they’d either like to be remembered as their legacy or just something that resonates with them. And then we ask the individuals who are in the activity for their feedback.

Greg: Yeah. It was really fascinating. So, we did that and then you went around, and I thought you were, were very skillful in getting people to articulate what they probably couldn’t have without the pictures. So, because of the pictures you would say to them like, “Why did you pick those three? What’s your favorite of those three?” And, knowing the associates as well as we do, hearing them articulate what they really cared about was fascinating. I will tell you it had such a great impact. Two things happened. One, we ordered those and we’re going to start implementing them with our discussions with our clients so we really can figure out what they care about. And then two, it was such a powerful discussion. We actually continued, we went to an associate’s house afterwards and the conversation continued. So, thank you so much. That was a valuable exercise.

Kate: Thank you, that’s fantastic. And it’s having something tangible in front of you to use as a tool to kind of share is a lot easier than just picking your most important things in your world, out of the sky. When you have something like an activity and something in your hands, it’s just, it makes it a lot more interactive and fun too.

Greg: So, Kate, clearly there’s a lot of benefits to the families, but I just know in working with you there’s also great benefits to the community. Give us an idea of the size, first of all, of The Pittsburgh Foundation and then the amount of grants that it made to charities

Kate: As one of the oldest and largest community foundations, we have just over 1.2 billion in assets at the foundation and we grant around 50 million every single year out to nonprofits in the community. So, that’s broken down by our individual donors. So, donors who have donor-advised funds or designated funds who are sending money onto the community.

Greg: So wonderful. It sounds like there’s great benefits to families, clearly; based on around $50 million in grants, great benefits to a lot of wonderful charities.

Above and beyond the money, is there an opportunity for donors to also get involved in the charities, beyond just the financial contributions?

Kate: So, donors to The Pittsburgh Foundation are able to learn more about specific pressing needs in the community and we’re able to connect them with nonprofits doing really great work in the space that they’re interested in. So, it’s a very individualized process in which they can get involved, not only from just giving grants out to those nonprofits, but also going to see where those services are provided at a specific nonprofit. Meet some of the staff who are doing fantastic work because there are a lot of great things happening in this area. And then also, to feeling good about giving those types of nonprofits a legacy-type gift when they’re no longer here, so they can support them during their lifetime with their donor-advised fund. But then also to know that their fund can continue to support those types of things when they’re no longer here.

Greg: You may not know this. I’m just curious, how many people work or working at The Pittsburgh Foundation, around?

Kate: Around 50.

Greg: Okay, so here, let me just put some numbers together. You’re saying because potentially you all have $1.2 billion, you have grants of about 50 million a year, and have 50 people to support you…

Kate: Yes.

Greg: …That you may get different access and have more resources with local charities than some individual would?

Kate: Absolutely.

Greg: Right, so there it is. So, there it is. So, that’s wonderful for someone that really wants to know or get involved in a charity and have that involvement financially go on for a long period of time in a prudent way with successor advisors.

You know what? I’m saying the word “successor,” I’m saying the words “successor advisor” and I’m wondering if people know what that is. Do you want to just touch on that?

Kate: Successor advisor is naming someone to take over the grant making of that fund. When the donor-establishers are no longer here. In many cases, that’s naming children and grandchildren as successor advisers to the fund and that can continue in the family to create that family legacy.

Greg: Let me just tie up some loose ends. So, if I have some highly appreciated stock and I want to get the benefit today, but have the impact for generations, I open up a donor-advised fund, correct?

Kate: Correct.

Greg: I’m the advisor.

Kate: Yes.

Greg: I can start to communicate with my family about how to advise on that fund.

Kate: Right.

Greg: Correct?

Kate: Correct.

Greg: And then if I want my children and grandchildren continue that legacy, they can continue to make recommendations or suggestions to The Pittsburgh Foundation on potential grants. Is that how it works?

Kate: That’s exactly right. And I think it’s important to know also that starting a fund at the Foundation and becoming a donor and a partner with us, we’re going to going to help you to create that philanthropic plan, so you don’t have to know everything right away. You don’t have to know exactly how you want this fund to work in perpetuity. We’ll help you today and we’ll be together with you for many, many years, to come up with a plan for your philanthropy to make sure that it does exactly what you’d like it to do — to create that legacy that you and your family are looking for.

Greg: Mm-hm. That’s good to hear. Because I think when people hear something like “The Pittsburgh Foundation,” it sounds big.

Kate: Yeah.

Greg: Right. It just sounds really big and is it right for me? How do I have access? So, do you want to talk about when someone makes that decision to open up a foundation, you know, what do they do, who do they call? I mean, other than Confluence Financial Partners, right? And then we help them through the process also, because the last thing we want to be is part of that statistic

Kate: Sure.

Greg: You know, only 6% of advisors work with their — holy cow! Only 6% of advisors work with their clients on philanthropy.

Kate: Your firm does a great job in talking with your clients about things that really matter to them.

Greg: Thank you.

Kate: And so, I think including you, if your clients include you in that conversation and then bring us into it as well. That’s when philanthropy works best. When we all work together.

Greg: We try to do a good job, but those cards are going to help more. Wait till we get the pictures and we have clients picking.

Kate: You got it! You know that. Sure.

Greg: It really does, it helps clients put into words what they really care about, which isn’t always easy.

Let me ask you this one. What would people be surprised — or maybe were you surprised — that people don’t know about The Pittsburgh Foundation? You know, I f I think

Kate: You know, I think that when people think about The Pittsburgh Foundation, they think about us grantmaking into the community. We have, you know, a lot of foundations in Pittsburgh. We’re a very philanthropic community, but community foundations are different than private foundations who are granting money out. And so, knowing that, we are made up of individuals and families who really care about Pittsburgh and want to start that legacy with us, no matter if it’s a $10,000 fun or larger than that, you know, we’re going to help them hand in hand, give that money away. We do, of course, have those unrestricted dollars that we’re granting out to the community, but that our donors are a huge asset to this community and can make significant changes where we have many pressing needs.

Greg: Kate, thank you so much. It was really, once again, great to have a conversation with you. Pittsburgh appreciates The Pittsburgh Foundation and I appreciate your passion for it, and we look forward to working with The Pittsburgh Foundation and working with our families that we serve to continue to create a legacy for the families, and ultimately, for the communities. Thank you so much for your time. I appreciate it.

Kate: Thank you Greg. It means a lot that your firm is doing such incredible work in this space. It says a lot about the people that you have here and your leadership as well.

Greg: Thank you.

Kate: Appreciate it.

Greg: Thank you.

Greg: If you think we can help you maximize your life and legacy, reach out at Confluencefp.com.

Confluence Financial Partners — The Importance of Communicating with the Next Generation | Episode 2

Greg: 92% of millennials believe business success should be measured by more than just profit. Imagine that.

Greg: Today we have an interesting podcast, at least from my perspective because we get to look in inside the mind of millennials and if you believe like we do, that part of happiness is really believing your future is going to be greater than your past. This gives us the opportunity to dig into the minds of the future.

With that thought in mind, I’d like to introduce to four of our associates that we have with us today and they happen to be four of our millennials.

Randy Holcombe, who’s been with us five years and we found Randy at Grove City College. We loved the institution. Thought we’d go up there and see if we if there’s any, if there’s any students that we would be interested in in obtaining. And we found Randy and it’s been a good choice. Randy’s been one of the MVPs here. In fact, you’ve been with us five years and have done almost everything and continue to be the — what’s it called in baseball? Dude comes in to— It’s the uh, it’s the uh—

Chuck: Utility.

Greg: It’s the utility infielder. Thank you.

And that takes us to our second associate. We have it with us today, Chuck Ziants and Chuck has been with us now for over two years and he comes from Bethany College. I’ll tell you what we liked about Chuck. He was working with the Pittsburgh Pirates in luxury ticket sales and we were his client and we absolutely loved the service he gave us and how he was always an advocate for us. And so, we talked to Chuck about joining us and he did that over two years ago and as a financial advisor and is working with clients and has made us better and has helped us on a, on a whole host of fronts.

Greg: Our third associate is new and his name is Gregory Weimer.

So yes, it is a Gregory Weimer. It’s my son and Gregory went to Virginia Tech and then he got his master’s in accounting at Pitt. And then he spent five years at one of the big four and is a CPA. And so, Gregory’s bringing a different set of expertise. It’s a different expertise to us and we’re looking forward to having, I assume you’re going to be around for awhile. So we look forward to the next generation.

And then, Katie Montagazzi, she came to us from a local bank and she was introduced to us from a mutual friend and he actually said, “I think she’d be great for the organization.” And I thought, “Wow, I’ll see about that.” So, we went and visited with Katie and her interest and passion for the business captured us. In fact, she was learning and studying for her CFP prior to even joining Confluence. So, this is just a small segment of the people that we have designed to take us to the next generation.

So, I’m just curious, millennials, here we go. What stereotype makes you crazy when people say, the millennials do blank or the millennials are blank?

Randy: Okay. I would say that millennials are lazy. I mean, I think that’s pretty general of all millennials that people think that, and I don’t know that it’s necessarily true. I think in any generation you could probably just find hard workers and some lazy people. And I think just depends on what they’re motivated by, maybe what their ultimate goals are. But I don’t know that they’re necessarily lazy.

Katie: So, for me something I hear often is that millennials are obsessed with technology and do everything online. But I disagree. I think face-to-face interactions are really important to millennials. Especially, I can speak for us for in the room, definitely not obsessed with technology here. I use it, learn it to be efficient and all of that, but I definitely need face-to-face interaction.

Greg: So, it’s interesting, right? So as far as “millennials are lazy,” if I were you, that would make me crazy. And in our organization, you guys sort of set the standard. It’s not unusual that all four of you have texted on a Saturday and Sunday and prior to seven o’clock in the morning. So, if I were you that I — I find that to be absolutely inaccurate. I’m sure there are lazy millennials, there are also lazy baby boomers. I totally agree. And Katie, I agree, you tend to be someone that is a face-to-face person as our organization is focused on.

However, one of the things I have to tell you that I think is interesting about millennials, when they say, “I’ve talked to someone,” that doesn’t mean they necessarily talked to them. Right? As you’re all shaking your head, like you’ll say to me, I talked to blank client and I’ll be like, “Did we talk or does that also mean an email or a text?” Which is sort of interesting.

Now let me, let me ask this. What do you think millennials bring to the table?

Chuck: A new perspective, new energy and a difference of opinion. I would say when it comes to millennials, we don’t lack our opinions, as everyone smiles in the room. I do think in our ability to work collaboratively, you know, working in a team is huge.

Randy: And I think millennials have a, almost a need to challenge or question the status quo, which, to Chuck’s point, I think can be a really good thing and help us to look at things differently, innovate. I know some baby boomers probably roll their eyes because sometimes millennials… see if we can do it better, it can be a real asset.

Greg: No, I have to tell you from our perspective that’s been wonderful because we want to have a diverse group of people from sex, ethnicity and opinion. And it really does challenge us. And if anybody has — and please don’t take this the wrong way — but if anybody has dogs,
the way you keep an older dog young is you buy him a puppy. Pretty soon — right? They tend to be happier and they challenge each other.

So, I’m curious what, what would you say millennials can learn from the older generations?

Gregory: I think communication skills is important. I mean, back to the technology versus face-to-face and some people, you know, being more comfortable with that. Just the way millennials grew up, they didn’t have to be as face-to-face, even making a phone call because of texts and emails. So I think just learning how older generations communicate and speaking to people I think is very important. Not that millennials don’t do that. They also had the benefit of text and quicker communications that they didn’t have to do the face-to-face.

Greg: As a father, and now a grandfather, one of the things I learned is if you want to communicate with a millennial and get a quick response, text them! Send them a text. So, you know, it goes both ways. We’ve also learned that the way you communicate is through podcasts and texting, not just through face to face. Both are important.

Katie: So something I think we can learn from the older generations will be patience. I think in the age we’re in, of abundance of information and technology and everything’s at your fingertips, literally being patient, whether it’s communicating with somebody, results from something, patience in yourself,if you’re working towards a goal. That’s definitely something I need to learn over time.

Randy: I think a big one is the first step is recognizing that there is a lot to learn from the older generation. And so, I think millennials benefit from listening more. I think we want to talk a lot, which is great, but I think it’s important to listen and recognize that those who are older than us have a lot of wisdom, and often, a lot that we could learn from.

Greg: One of the things as I, as I look at the four of you, that I think distinguishes you is your passion to improve. What are some of the things that you do to improve your skillset?

Katie: So, we’re sitting here making a podcast. I think everybody in the room listens to podcasts probably every day. We share podcasts and whether it’s like a crime podcast or something about personal development, that’s definitely one way. Second, we work in a team. So, I think we actually learn a lot from each other and we grow that way.

Gregory: I would agree with that. I mean, I can think of at least three times in the past three days, over the weekend that this group of the five of us shared a podcast for the others to listen to and everybody pretty much listened to it right away, which was pretty cool to see and helps you get a different set of podcasts that you may not find on your own.

Chuck: I would think too, what’s pretty uniform about everyone’s answers here is that the type of how we’re taking in information, right? It’s a world of convenience.

So, podcasts, you can listen to them at your convenience no matter where you’re at. I personally like audio books, so I’ll listen to podcast audio books in the car while I’m driving to and from the gym or to and from the office. It makes it a lot easier for me to digest information.

Greg: Humans are happiest when they’re growing and improving. And so, the fact that we are all sharing information throughout the weekend, I find that enjoyable. I find it interesting. I think that is something that distinguishes the relationships we have in our firm. In that we’re always challenging each other.

To your point, Randy, we’re always challenging each other to think differently and to improve. And, and Katie, to your point on teams, it’s not unusual in our firm where we have working on the same issue, someone in their 20s, 30s, 40s, 50s and 60s in the room at the same time thinking about an issue. And I can tell you as someone in their 50s, that’s been extraordinarily beneficial to not only rely on other people’s experience, but also to your point, Randy, rely on some folks, new perspectives on the industry.

So, a lot of the folks listening to this have children or grandchildren that are millennials. What would your advice be to them on how they should talk to those millennials about money, finance and wealth?

Randy: I know this is how this generation was, was raised, but I think a lot of money issues for older generations are pretty taboo. Not something maybe they’ve talked about with kids, grandkids, but I really think that it’s important to communicate, not only, maybe not details about money initially, but what’s the vision? What’s the legacy that that grandparents and parents want to leave?

We just talked about, you know, one of the things that the title of the podcast is, millennials are motivated by more than money and more than profits. And so I think you can really motivate younger generations by instilling within them the values, the goals, the dreams that you have for your money and how you want to see it treated after you’re gone.

Greg: So, as millennials, you would find it helpful if your parents or grandparents had more conversations with you about wealth and about money.

Millennial: Yes.

Greg: Thank you. They were all nodding yes, forgetting that you cannot see their faces, but they were all nodding, absolutely. Which is interesting because we had a focus group with our parents and grandparents clients and they said to us, one of the things that they would like us to help them do is have conversations with their children and grandchildren about their wealth.

So, somewhere there’s a disconnect, isn’t there? Because when you look at the statistics, 70% of wealth is squandered in the second generation, 90% in the third generation. Number one reason is communication. Parents want, the grandparents want to communicate more. Children and grandchildren want to be communicated with more and there’s a disconnect. Hopefully, we, together, can facilitate those conversations because many times inheritance is viewed as a burden on the next generation and not a blessing, because it wasn’t communicated enough. Why do you think that is?

Katie: So, to Randy’s point. I agree that talking about money also includes the vision and the values and what the grandparents and parents have in mind for their grandchildren or kids. So, beyond that, to formally start talking about money, sit down in a room and put numbers on a screen is really foreign to most people. Even for themselves, I think some people that come in, prospective clients, new clients, it’s new to them.

So, for them to get their children and grandchildren in a room to talk about money, it’s really weird. So, I think that’s where we can come in as advisors to facilitate those meetings and just put some formality around it and it’ll be easier to talk about.

Greg: Do you think there’s a risk? I think one of the things parents worry about is if they talk about money and let their children and grandchildren know that they have some wealth that they’re ultimately going to inherit, the concern is they’ll become lazy.

Gregory: I think can do the opposite, actually. Just personally, we’ve been doing this in our family for the past few years, around Christmas time, once a year, we all sit down to talk and it’s really helpful, to me at least. I think it shows everyone a vision of: you watched your parents or grandparents grow up, go through their careers, what did they do to get to where they are? And it gives you a vision. Okay, I want to do what they did. I want to do better. I don’t want to make changes. And it lets the younger person or the millennial see what it takes to get to a spot. So, really helps you see what’s needed to meet your goals.

Greg: I’m just, sorry, I’m just curious for the rest of you, have your parents talked to you at all about their money or have you talked to them about money and wealth and expectations?

Randy: For me, a little bit, especially since I’ve been in the business.

Greg: Yeah.

Randy: And so, I’ve actually been fortunate, I’ve been able to offer some advice and help there. So we’ve talked about it more. Growing up, not so much.

Katie: Growing up? Not really, but like the informal talking about the value of a dollar, hard work. You know, you earn money, you save money, spend money. That was kind of discussed. But again, since being part of the industry, those conversations have turned into more detailed and goal-oriented type of conversation.

Greg: And we want to be clear, it’s not just talking about wealth like, “Holy cow, I’m going to get this inheritance.” It’s “Hey, here’s the difference you can make with this portfolio” or “Here’s why you work so hard” or “Here’s how you pay your bills.”

It’s interesting, you can go through college and never really learn how to put together a portfolio or save money or what a 401k is. So I’m not, we’re not just referring to this chunk of wealth that’s being transferred. It’s also just “How do you handle finances and the responsibility in general?” And my experience has been that when you have those conversation, there’s no correlation to lazy. So, we just need to dispel that myth. You see folks with means that are lazy. You see folks that have no wealth, that are lazy. It has more to do with values than it does wealth.

Randy: And I think that’s actually a really good point when you’re thinking about how to start these conversations because I would agree with Katie that my parents did do a very good job instilling values and hard work and how to think about money. And I think that can actually be a really good segue into some more specifics if that’s where you’re looking to go. And I think most parents have had some of those conversations around values and that makes it easier to transition.

Greg: It’s interesting that some, some folks will say, “I don’t want to talk about it,” as if, when they pass it’s going to be easier. I can assure you it’ll be more challenging. Right?

So that to talk about it and just start the conversation is wonderful. And in another podcast, we actually interview someone on philanthropy and talk about donor-advised funds and talk about how, how donor-advised funds can be the gateway conversation to talking to millennials and heirs about wealth.

Katie: Not just talking about legacy and inheritance, but I think having those conversations with your children also sets them up for personal success. A lot of people I know that are our age, they know nothing about 401ks, IRAs or anything. So, it also affects their lifetime, not just inheritance they have down the road. So, I think talking with your kids and your grandchildren will also help them personally, for themselves, their spouses, their families.

Greg: So as an organization, if we want to help facilitate those conversations and we want to help clients maximize their life, the moments in their life, and maximize their legacy by clearly defining it — one of the things we need to make sure is that our organization continues to attract and develop young talent.

So, all of you and others are here to help the next generation of clients, make sure we’re maximizing their lives and legacies also.

What is it about Confluence that you think makes it a unique place for a millennial to work?

Randy: Greg and Jim had done an exceptional job of communicating the vision where we’re going in making us feel like we are absolutely a part of that vision. One thing that Greg says is, you know, we’re not here to participate in the success of the organization. We are we’re here to create it.

Everything we do, and this was communicated from day one until now, is about the clients. It hasn’t been difficult for me to connect what we’re doing with a greater meaning because it’s so obvious every day. And we talk about it and make sure that that focus doesn’t change.

Greg: I think just the energy in the office, all of the offices, everyone’s always trying to figure out a way to improve the client experience or better each other through the sharing of podcasts and just growth, sharing articles, books, everything like that. There’s just so much energy in the office that it makes it a fun place to work. You really care about what you’re doing.

Chuck: And in addition to Gregory’s comment the importance of challenging each other all the time that consistently get better, right? We don’t want to plateau or level off. We want to continue to level up our performance internally and also with our clients.

Greg: Yeah, I think we all agree, right? If you’re not willing to be challenged, probably the wrong spot, for all of us.

Katie: The vision for Confluence is, every day we’re talking about it, we’re thinking about it. So, if you have a long-term vision about anything, you’ll do anything to get to that goal, that vision down the road. So I think every day we know where we’re going, we know we have to do every single day to get there and like Gregory said, the energy in the offices and with everybody is like, it influences you every single day. On the weekends, during the week, anything.

We’re all totally focused on what we’re doing. And I think another thing to mention would be the older generations, from my viewpoint at least, they separated work and life: went to work every day, came home, forgot about work, like shut it off, went home, watched TV, went to bed, went to work again.

With our organization, with millennials, I think it’s important that we see working and life — you know, work-life balance isn’t a thing. We just, we work and we live. And it’s all the same. I think Confluence does a really good job of teaching us how to do that and enjoying it while we’re doing it.

Randy: You can almost call it work life integration.

Greg: Yeah, that’s a great point. That’s a good point. We communicate often when we’re not in the office, right through text or calls or whatever. And so we just live, I don’t know if we’re working or playing, we just live.

Having said that, I hope you would agree, that if you had something important in your families and it was a Wednesday at three o’clock — the other side of it’s also true, that you should be there. Would you agree with that?

Katie: Totally.

Chuck: Yup.

Greg: Yeah. I hope that would be the case.

Gregory: Yeah, the flexibility is definitely there if you need it.

Greg: Flexibility’s there. But, but just as far as the energy and the collaboration, does anyone want to explain the offsite we had on Friday, for example, just how everybody contributes to the future of the organization and really how much input there is into that.

Katie: Yeah. So last Friday we got together as a company. I think there’s 28 employees now. So, we get together and the focus of the offsites is usually, “What are we doing today that we need to improve on? What are we doing today that is good? And what’s working?” And then we also do kind of long-term goal slash vision activities. Like how can we innovate? How can we as a company beat the competition? It’s very collaborative and fun. The energy’s there.

Greg: I got to tell you, “beat the competition” was sort of an interesting drill we did. We split the room into two and we were going to do one half of the room was still at Confluence. The other half of the room was fired by Confluence. And the other half, the one side of the room that’s fired would have to create an organization that could serve clients better than we could.

And we scrapped that idea and split the associates into two and said, okay, you have to create a firm from scratch that would serve clients better than Confluence. What would you do? And it was interesting, right? I mean we had some things that became obvious that maybe we could work on, in the next 10, 20 and 30 years as we think long term.

So, based on some of the things you guys have said so far, the opening to the podcast sounds like it’s accurate, right? 92% of millennials do believe success should be measured by more than just profit. Do you all agree with that?

Katie: I agree, but it’s also a business, so it’s important to know where you’re going and know what you have to do.

Greg: Well, for us to, for us to be here in 50 years for our clients and for their children or grandchildren, we need to run a profitable, growing firm.

Randy: Because of all the negative stereotypes of millennials, I think sometimes you may read that statement, which is “92% of the millennials measure success by more than just profits.” They would read that to say, well, millennials don’t care about profits. They’re not realistic, but I think the reality is, we do care about profits, but we recognize that there’s more as well.

Greg: I guess I would think Jim and I would read the 92% as too low, because the fact that any business would be run for only profit is remarkable. Right? That’s not, that’s capitalist, but that’s not compassionate.

So, we have a lot of goals in the organization. I can assure you, a specific profitability number? We’ve never even discussed it.

Randy: Greg, here’s a question for you as we talk about the importance of profitability. You know, we’re on the investment advisory committee and we look at investments every day. Can you share a little bit about how that impacts our investment philosophy?

Greg: A great organization cares about profit as we stated, but equally important, if it’s an organization that is only focused on current profit and not also developing people, not innovating, not doing R&D, right? And investing back into themselves. That is a short-term success. So, I think our organization isn’t all that different than the portfolio managers or companies that we would feel most comfortable investing in. And that is, they absolutely understand the profitability of today, but they don’t sacrifice the future by maximizing their profitability today. And a key component of that is making sure you’re investing in the right people, the right products and the right technology.

Chuck: Well. And I also think too, if you build a team based on solely profitability, you’re going to get a bunch of people at the table and an organization that thinks the same way. And what I think Confluence does a really good job on is putting people in positions and building a team around people skill set, and developing and putting them in positions to succeed.

Gregory: Yeah. If a company was only focused on profits, we would not have the energy in the office that we do. Just wouldn’t happen

Greg: Yeah. We’re building it for the next 50 years, which brings up the next question. I may not be here in 50 years, or at least won’t be quite as active. You all, hopefully, will. What does Confluence look like in 50 years?

Katie: So, 50 years is a long time. I think the industry we’re in is going to completely change. I think it will always encompass what we do now, in addition to wealth management, I think it’ll become a more holistic picture of the person and the family. So, not just managing their assets, but helping them to be healthy, stay healthy, focus more on intangible goals. So, moments with their families, their loved ones. And I think we’ll just in 50 years, God willing, we’ll have a better way of making that happen for everybody.

Randy: Another note about millennials is, we talk about fees and you always hear about fee compression and millennials don’t want to pay. I think that’s not entirely fair. I think millennials appreciate good value and they’re willing to pay for services again that they find valuable. And to that point, I think the industry and Confluence, I think we’ll be on the cutting edge of this, is going to evolve, like Katie said, to encompass more things to make it so that we’re able to do more for our clients in a more holistic way. And again, I don’t think millennials have a problem paying for that kind of thing. They just want to know what they’re getting.

Chuck: And I do think that having difference of opinions on our team and having our age gap, that we’re going to be a firm that communicates with all ages in a way that they’re most comfortable. Right? Whether it is an office that is, you know, more conducive to the younger generation or text messages or podcasts or video meetings, whatever it is, we want to be based around the client, no matter what their age is, versus just being the older advisor that has a huge conference room with too many chairs and it’s uncomfortable for them. So, we want to provide our clients, an area that they’re going to be the most comfortable in.

Greg: Wonderful. I guess, I guess the advice and the challenge to all of us and then, to all of you will be, let’s never lose the value of the art values of the organization, of creating a new standard for clients, but let’s become absolutely flexible so we can evolve in helping them in many different ways over the next 50 years. And if we do that, we’ll continue to have a strong organization that’ll have an impact on families for generations to come.

Well, thank you. Thank you for your input. We continue to benefit from your association with Confluence and look forward to working with you for the next 30 to 50 years. I said that to be happy and to feel successful, you have to believe your future is going to be greater than your past. And based on the faces I’m looking at right now, there’s no question that’ll be true.

So, thank you so much for your participation. And more importantly, thank you for everybody that listened to this podcast. We look forward to sharing more podcasts with you in the future, and the way you access them is to get on ConfluenceFP.com/podcasts.

We look forward to speaking with you in the future, and if you have any topics you would like us to review, please let us know. Thank you.