I wanted to give you a little insight on what a CERTIFIED FINANCIAL PLANNER does.
So I'm a CERTIFIED FINANCIAL PLANNER, a Certified Exit Planning Advisor,
and a Certified Value Growth Advisor.
There's a lot of credentials there.
You kinda mix a CPA, a finance guy, and an attorney together.
That's kinda what you've got in me.
What I do is I help business owners grow their net worth.
I'm not interested, so to speak, in growing a stock portfolio.
I think that's huey for the world that we operate in.
I'm interested in driving net worth, and for most of us, myself included,
our business is our number one asset.
How can we drive the value of our company through the roof?
That's what my focus is.
So Chris and I work together a little bit.
But a question I often ask folks is where do we get advice from?
Are we getting it from our peers?
Are we getting it from magazines, insurance agents, doctors - heaven forbid?
Are we getting it from someone like Chris and their firm?
Someone ultimately is going to fill a seat across from you and I as business owners,
so we're gonna look at somebody and say, "Hey, how do we do this - whatever "this" is?
We have to have a trusted advisor.
In the world of finance, you have three basic components.
I grew up on a farm, and I always - I don't know if anybody ever dealt with a 3-legged milk stool.
I don't know if anybody ever milked cows before.
It's a lot of fun.
But this is the 3-legged stool that I look at.
So you have a CPA.
You guys have a great organization here.
Like I said, Chris and his team here, as you well know, are top-notch.
You have a CFP, and you have a business and tax attorney.
Oftentimes, it's not the case with this organization that you're here with, but oftentimes as you
may have dealt with, CPAs are primarily addressing last year's numbers, which drives me absolutely crazy
because by the time December 31st rolls around, you've lost a lot of your tax planning strategies.
Some CPAs, some tax planners like Mahan and Associates,
will look into this year and even next year.
They're really good at that.
A lot of tax attorneys, they'll look at what's happening this year, and they'll worry about
the laws as they change from Congress or each state, and they'll make adjustments.
The planner's job is to look past, present, and future and try to help you grow to whatever
your goal is, whether it's to drive your net worth, whether it's to build your organization to where you can sell it,
or whether it's to gain assets like real estate, other businesses, etc.
So you can see the various roles that these professionals do day-in and day-out.
The average CFP - I'm gonna go ahead an knock on peers - the average CFP works for the big
name companies and they want to trade stocks, and I think that's a big
disservice to the industry.
They often have a lot of knowledge, but they sell out for commissions.
So that's kind of what the advisors roll play.
You would recognize that pretty easily.
Where it gets interesting is what should we do.
What should we do?
And I put a couple of scenarios up on the screen, but here's some things I heard today
from our clients.
"Justin, should I buy this building?"
"Justin, should I fire this individual?"
"Justin, should I buy this new piece of equipment; it's year end?"
"Justin, should I jump out of the stock market?"
"Justin, should I employ this in my business plan?"
"Should I use conservation easements?"
Should I?
Ultimately, we all have these questions, and with good advisors like Chris and his organization
or even some advisors that you have, they're gonna offer really, really, really
interesting advice.
At the end of the day, it boils down to - can we quantify it?
What are the results?
What are the results presently, and what are results long-term?
So here's a real live case.
This is the one that Chris and I worked on.
These are the actual ..... So this is a client that Chris and I are working on.
So this is not somebody we just started working with today.
We've implemented a lot of pretty good strategies over the last 2, 3, 4 years.
Based on the numbers, this gentleman wants to retire at age 55.
He'll easily do that, easily do that.
Based on the numbers, at the beginning of the year we were projecting $8.1 million in
net worth.
Now that's assuming selling the practice at a very discounted rate outside closing costs,
commissions, etc.
That's not including selling the real estate.
We didn't want to sell the real estate he owned.
We may look at REITs.
We may look at some other scenarios.
We may look at some long-term leasing, but in this case, he was at $8.1 million.
Chris and I began bounding our heads together probably in November last year and came up
with about 5, 6, 7 - I can't remember all the different strategies we came up with - and
we began quantifying them.
We said, Example number 1, an $11.9 million net worth at age 55.
So that's a significant swing.
Example number 2, $12.4 million and example number 3 was $12.5 million.
Various different tax strategies.
Various different strategies that we're gonna implement not only this year from the tax
world but also next year and two years from now from the financial planning world.
Using various structures, various entities, ultimately, the job is is to grow his net
worth to where he can reach his goal.
Now with that major of an increase, he can actually position himself to retire 5 years
earlier and still get these results.
He probably won't because his kids won't be out of college at that point, but nonetheless,
we're able to quantify exactly the results of the various recommendations.
The way I describe it often to clients is they say, "Well Justin, how do you differ
from the CPA?"
The CPA firm is often recording what's happened last year, and they're bringing some really
good scenarios for us.
I'm looking more in the future.
I describe it as I'm driving here to Oregon, and I say this on my Podcast all the time.
If I leave Knoxville, Tennesee and I drive to Oregon and I put in my Garmin or my TomTom
or my Google Maps my destination.
And it's gonna give me 5 or 6 or 7 different scenarios on how to get from Knoxville to
where ever I'm driving to.
Those are the, in this case, the 3 different scenarios.
The client, then, can choose a level that they want as far as risk, as far as reward,
and we can quantify out within a penny, what it should be.
In this one, this is the actual tax-adjusted value.
So beforehand, they were paying income taxes of roughly $165,000.
It dropped to $145,000 year one.
That was before we realized that their net revenue whenever we did our last assessment
was $300,000 higher than when we looked at it in January.
So their net revenue is rockin' this year, and that's because of Chris.... because we're
driving the value of the business up.
So their net revenue's almost $300,000 higher than it was last year.
But in year number, let's call it Age 54 - this individual is 37 - the difference is about
$30,000 every year.
We're making the recommendation...
So the difference being between a tax preparer, the tax planner, and the CFP (the financial
planner who deals with business) is how do you grow your net worth.
How do you grow your value, and how do you position everything long-term so that you
will not outlive your money and so long term you'll pay the least amount of taxes.
I'm going to challenge you to listen.
For those of you who like to listen to podcasts, we have a rock-star podcast - Financially
Simple.
Chris has been on there.
Actually, Chris's podcast is the #1 downloaded podcast right now, and it's for all business
owners.
We have a book coming out.
I can't wait until it comes out.
We've had it written for about a year.
We're working with editors and everything, but it's about the end of your business.
You know, everyone of us, we'll leave our business.
We will.
I've already sold 3 businesses for profit.
I currently own 2 businesses.
There's a way that you can build the value of your company so whenever it's time to sell,
you can get maximum value.
That's what this book addresses.
So with that, Chris, I appreciate you having me.
We're done.