BiggerPockets Money Podcast - 41: How to Find the Best Possible Certified Financial Planner (CFP) for Your Needs with Kyle Mast

Episode Date: October 8, 2018

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Welcome to the Bigger Pockets Money podcast show number 41, where we interview Kyle Mast CFP. If you find a good financial planner that you pay them for one or two hours of their time and, man, you get some good information, I would do it every year because they're going to catch things every year. And they're going to be educating themselves as tax law changes like we just had, things like that, that they're going to catch that you won't catch until maybe two or three years later. and that compounding opportunity cost that you've lost may be a big deal. It's time for a new American dream, one that doesn't involve working in a cubicle for 40 years, barely scraping by. Whether you're looking to get your financial house in order, invest the money you already have, or discover new paths for wealth creation.

You're in the right place. This show is for anyone who has money or wants more. This is the Bigger Pockets Money Podcast. How's it going, everybody? I'm Scott Trench here with my co-host, Ms. Mindy Jensen. How you doing today, Mindy? Scott, I'm doing fantastic. How are you doing today? I am doing great. This was a incredible show, just a ton of information across a variety of topics

from a professional who does this for a living and offers some perspective that a lot of the folks like us, you know, the do-it-yourselfers, just maybe haven't thought through it trained for. So I was really excited to get to ask tons of questions about tons of specific things to a financial planner. Yeah, this was amazing. don't even want to talk to you about it. I just want to jump in and let Kyle do his thing. But one thing, I've never hired a CFP. I've never had any sort of financial advice in a formal setting like this before. And I still didn't get like specific financial advice from Kyle. We're talking about like overviews and just ideas of things you can do. And I'm so excited after

talking to him that I can't wait to talk to my husband and say, okay, we need to find a CFP who can give us this advice because we are looking to reduce our taxable income. Well, I don't want to reduce my income. I just want to reduce the amount of taxes that I'm paying. So somebody like a CFP can look at your tax return, look at the deductions you're taking, look at the things you're doing in your life and say, oh, okay, have you thought about this? Have you thought about that? Or, you know, what would be really nice is for him to say, hey, you're doing everything right. That'd be fantastic. But I'm probably not doing everything right. And I'm just so excited to have Kyle jump in and just share all of this amazing information. If you are on the path to financial independence,

this is a show you can't miss. Yep. And your goal as a person that's on the path of financial independence is to achieve retirement level of wealth within 10 years. So you have a different plan than everybody else. But really, it comes down to the difference between us, you know, the financial dependence movement and the middle class of America is the savings rate. So none of this stuff that we talk about here, all these advanced strategies, are going to materially move forward in a way that's dramatically faster than your savings rate. So there's no excuse to avoid the fundamentals. But if you're applying those things, man, you can save a lot of money and accelerate your progress, especially as your net worth grows larger and larger and you have a little bit more

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How's it going today? Good. It's going good. Great. Thanks for taking time out of your day to come chat with. us. Yeah, for sure. Well, yeah, let's jump right in. Kyle, you're a financial planner. Can you maybe just kind of introduce the subject to us by, you know, explaining how listeners are bigger pockets money or members of the financial independence community, people who are probably already pretty self-educated and aware of their personal financial situations. How would a member of

this community know when it's time to begin looking for a financial planner advisor? Yeah, it's going to be fairly specific to each person and how comfortable they are with the research that they've done on their own. So everything that I do is on the internet. You know, the whole IRS code is on the internet. There's a lot of amazing financial blogs on the internet. So this audience would probably be more inclined to have done a lot of self-education on their own. So I would say probably the most beneficial thing for bigger pockets money listeners would be to, at some point, and probably early on, get a set up like an hourly meeting with some sort of

financial planner. The reason being you don't know what you don't know, so there's a lot of different types of financial planners or financial advisors or financial representatives out there. You kind of have to bet if it's more of a salesperson or if it's more of an advisor who actually acts in a fiduciary role. But for your listeners, I would say getting, paying for an hour of an expert's time would be well worth it. You may manage your investments on your own. You may do your own real estate, your own stock investing, your own index fund investing. However, if you spend an hour with someone who day in and day out is looking through tax returns, looking over investment statements, they might find one thing, probably more, but one thing that's

going to save you five grand this year. And then if you compound that over 30 years, you know, that's going to be money well spent. You may not need an ongoing relationship, like some people who really want to offload most of their financial decisions. And you can save a lot of money by doing most of the stuff on your own. But just like anything, if you can pay to have an expert, give you a little bit of advice, that would be, that'd be very helpful, I think. Okay. And you said pay for an hour of a professional's time. What does that cost? Are we looking at $100, $500, $10,000? If you're doing like a, just kind of a consultation, like Q&A, hourly rates for a good financial planner, which when I say that I mean someone who's a certified

financial planner, a CFP, a fee only financial. planner, meaning that they don't take commission from any products that they sell. They are paid either directly or as a percentage of assets that they manage. So what it would cost is probably anywhere from $150 an hour to $350 an hour, depending on their expertise. And I would gravitate toward the higher end of that. It doesn't necessarily mean just because they're charging more, they know more. But if they've been in the industry for 10 plus years, they've probably seen a lot, especially

if they've been in kind of the fee-only fiduciary independent realm, they're much more app to just kind of look at your broad situation and say, these are things that you need to change rather than saying, hey, I recommend this really good investment product. That's not what you're looking for. You're looking for someone who can kind of pick out and say, you know, you should have taken $3,000 in capital losses this year to offset your ordinary income. Weird little things like that that they can pick out of your tax return or your overall situation in general. Okay. You also mentioned taxes, somebody who is looking at tax returns and this sort of thing. Does a CFP? do taxes? Like walk me through what a CFP does do and does not do. So people don't have any

unrealistic expectations. Yeah, it depends on the CFP. The CFP is kind of in your financial life is probably best thought of as a quarterback kind of, kind of overseeing several different things. So the CFP courses entail insurance, income taxation, investments, financial planning, estate planning. So all these things that kind of go together. So estate planning, for instance, you need a good eternity for most of that. You know, if you're going to set up a trust or some sort of advanced, CFP won't do that, but CFP knows enough to ask the right questions and be able to direct the client to an attorney to set it up in the right way.

Same thing with taxes. So some CFPs are also CPAs. They'll also get their CPA designation or the other way around. Some CPAs will also get their CFP designation. So CPA is certified public accountant. And some practice that way. They'll prepare tax returns and do that work as well. Personally, I don't do that.

I don't like just grinding down through the numbers. I like meeting with people and talking through things. I'd rather someone else run through the numbers and I can catch any mistakes that go through. But it's part of the coursework for CFPs to look over income tax. And depending on the experience of the CFP, the clients that they work with, the clients they specialize in, their income tax knowledge may be different. Some may be more advanced. Some may be more specific to real estate investing or to doctors or different things if they're specializing in a specific niche. But most CFPs should have a very good overview knowledge of taxation. Okay. And you have a stable of professionals that you work with regularly, it sounds like. So when I come to you and I say, hey, I need to do some estate planning, you're like, oh, Bob Jones is the best estate planner. attorney or this guy would be better. So am I correct in assuming that you have a stable of

professionals that you work with regularly? Yes, that's exactly right. So if I'm referring someone to a professional, I have a network of professionals that I'll refer to. Usually I work back and forth between them. So say it's an estate planning attorney that specializes with real estate investors. If that's the case, then I'll send him an email ahead of time or her email ahead of time saying this is what we're looking at for this client, can you prepare a proposal for this client to fit their needs? I am not an attorney. I don't do anything like that. I'm not a CPA, so I don't prepare taxes.

But I know enough to direct them to do it. And then we get the feedback back and forth between them. Does that kind of make sense? Does I answer the question? Yeah, no, that's great because Scott and I both come from a real estate background. So having somebody like a general contractor, I don't have to then go out and hire the plumber and the electrician and the roofer and all these other things, the general contractor already knows who's a good roofer, who's a great electrician, or who can, you know, fill in and do what we need

to do. And that's really important. When you want to do something, you don't want to take like a thousand years and try out all these people that kind of suck at it. You want to go with the guy who's great immediately. And you've kind of already done that or the CFP has already done that. You know, they know the good attorney. They know the good tax person. Yeah, and I'll chime in here as well when you're looking for this network, you know, one good person that you work with, one good professional, whether it's your lawyer, your accountant, your CFP, or, you know, any of these folks, that person can help you build the rest of your network, right? So just like a CFP can refer you to a good accountant, good lawyer, all that kind of stuff, a good lawyer at the same time, if you're happening to go through these other specific parts of your financial planning, like taxes, for example, and you talk to your accountant and say, hey, who's a good financial planner, they might be able to refer you. Is that right? Yeah, that's right. And it's, you know, depending on the relationship, sometimes it's a you scratch my back, I scratch your back. That's not what you're looking for. And like, you're looking for someone. If you're working for that professional, you want someone who is very reluctant to refer people. people, that they only refer people that they are very confident. And like right now, I don't have

an attorney that I refer people to. I have not found one that I had one that I was referring to people. And he's done a great job, but he's not, not the experience that I'm looking for at this point. So I actually, I've had a few clients recently asked me to refer them to an attorney and I have known that I'm comfortable referring them to at this point. And I won't until I find someone that really is doing good work. But that's what you're looking for. You really want to find people just like in real estate investing out kind of related to them. that a contractor refers you to a property manager that he's done work for. Usually you can go off the reputation of that contractor. If he is, you know, very honest and really reputable in the work that

he does, he's probably reluctant to refer a property manager unless they do a really good job and kind of are on the same playing field as him. Same principles there. Right. And that's why a referral is so powerful. So how do you find a great CFP? Great question. If you don't have a referral network, already implicit. Yes, yes. It's getting better than it used to be. It used to be where, you know, you could ask your parents, you know, ask your parents who their financial advisor is or a friend who they work with. But the problem is a lot of people haven't done a good job of vetting who they work with. They kind of fell into it. It's like the guy who comes in and does the retirement plan at their employer. And so they talk to him and then they set some stuff up with him. Now there are two

organizations that I'll probably mention NAFFA, the National Association of Personal Financial Advisors. It's a network of fee-only financial advisors, so there's no commission products sold. Very reputable organization has been around for a while. The other one is the XY planning network. So it's a network of also fee-only professionals that work more specializing with Generation X and Y, but it's growing pretty rapidly to service other demographics too. But those are where you want to start. That kind of search, and you need to maybe determine if you want to work with someone local

or any more now you can work with people virtually very well. So if you're looking for someone really specialized, maybe in your profession or, again, if you're a real estate investor and you want someone who is really specialized in that, sometimes you may need to work with someone across the country, but we can do a call or Skype call and do the same things that you would do in person, but you're getting a little bit more specialized knowledge at that point. But that would be where I would start to source the financial planner from. Okay.

So you've mentioned fee only at financial advisors, And that's an important point, I think, because there is a distinction there. And I'd love to hear you kind of elaborate on that. But when I think of financial advisors, you know, I think of, hmm, I'm going to go there and they're going to try to sell me life insurance. And I know that this is not an investment that I need right now in my life, but I know they're going to sell me life insurance anyways. So can you explain the difference between fee only financial advisor and those that are not and why that's an important distinction? Yes. So there's kind of two ends of the spectrum. If you think of independent. and fee only would be the one side of the spectrum where you pay hourly for the advice of a professional giving that advice to you. Same thing with an attorney or a CPA. Same type of arrangement. Very similar. The other end of the spectrum is more of product sales. So it'd be more of a broker. However, a lot of brokers now call themselves financial advisors. So there's actually, in the 1930s or 40, there were two acts after the Great Depression that went into place to separate financial advisors from securities salespersons.

And those have kind of melded together. The SEC right now is working on some legislation to clear that up. We'll see how they do on it. But basically you have the two spectrums of an advisor and a broker. So if you think of it as you go to a car dealership and you go into Toyota and there's someone there who's a car advisor. So you go to him and you say, I'm looking for a car to buy, which one should I be? buy. He's going to say, he's going to recommend the best car at Toyota. If it's a Toyota dealership, he's going to say, you know, the Corolla, or are you going to say the Sequoia,

depending on his range of cars at that dealership? And it's going to be affected a little bit by the commission that he's going to earn on the car that he sells. So there's kind of an underlying piece there. However, he's not going to say, well, you know, I actually think the Honda Odyssey would be best for your situation because he doesn't, he's not getting paid that way. He's getting paid to give you good advice at the Toyota dealer. So if you go to a financial firm who they have certain products or certain mutual funds or investments that they sell in-house, that's the spectrum where they're going to come from. However, if you go to the corner to Scott Trench's car advising service, you're going to pay Scott Trench $150, sit down with him for an hour and say, hey, this is my situation. What is the best long-term car that I should buy?

And he's going to say, you know, Chevy Volt, you know, whatever it is. but you're going to look at the entire spectrum of products, investments, the financial situation of the person, and make a recommendation there. So that's the fee-only person. You're paying them for advice that has no dog in the hunt, I guess, has no subjective reasoning behind it. Whereas in the other sense, the commission salesperson, not that it's a bad person, there's just conflict of interest there that you just need to understand.

And then what makes it even in the financial industry, what makes it even more confusing as there's what are called hybrid firms. So they're right in the middle. So sometimes they put their fiduciary hat on and are selling certain products or not selling products and giving advice on an hourly basis, but they could actually potentially sell commission products also if they deem that's the right situation for you. So like life insurance. So currently life insurance or most insurance products are sold only on a commission basis. There's no fee products right now. And that's probably going to change in the next five to 10 years. But that's the way it is.

So right now, if I recommend someone, you know, the best thing for a young family may be a million dollar life insurance policy. In that case, say I recommended to them, being a fee-only advisor, I would not receive anything other than the hourly fee that I charge saying, I'm going to give you advice for your situation. However, if I was a hybrid, I could also receive a commission for selling that product. But in my case, I refer that to a good finance and insurance firm that I know that that's what they do. They sell products, just like Scott Trench and his car advising would refer to the Chevy dealership.

This is where you should go by. They're really reasonable people go there and buy the bolt from them. And I hate using used cars or new cars as an example, but it's just where the analogy comes out, I guess. I'm not as good as what's the guy's name, David Green on bigger pockets. That guy just rocks. That analogy. Yeah, there's no way. Anyways, does that kind of make sense?

I mean, that's the difference between in the industry right now. Fee-only independent is just you're paying for advice and you need to, you'll see what you're paying and it may seem expensive, but it's objective. The other end of the spectrum, you may not even know what you're paying. You may be investing in mutual funds. The advisor, quote, advisor will receive a back-end commission for how much you invest. Sometimes there's different pay structures, but it's not as transparent, I guess. It's probably the biggest difference. Nice. I think that's a great answer to the question. I think that that's a big fear of mine or just like a general kind of maybe stereotype I have of the industry is that I'm going to go there and I'm going to get sold life insurance from a guy who's obviously

trying to make a ton of money on a commission. But going to these fee only folks, that's where you get the quarterback is going to look at the whole situation and recommend things that are my best interest. Now, when I also think about this industry, it seems like a lot of financial planners are trained or, you know, my bias, I guess, coming into it is that there's a lot of information that's geared towards helping a middle-class family slowly accumulate wealth in preparation for retirement at 65, right? And maybe not a ton of information or study around this very new concept that's exploded over the last five years in the FI community. People in the FI community tend to have a very different financial picture, much higher savings rate. I'm going to be taking

advantage of tax deferred accounts, but I also have investable liquidity outside of that. I'll have real estate, side hustles, all that kind of stuff. Do you think that they're like, How do I go about as a member of this community selecting a financial planner who really knows my situation? Or is the general knowledge that you accumulate in studying applicable broadly across many different types of clients? To answer that last part of the question, yes, the study would apply to that. However, I would say, well, let me back up a little bit. Your stereotypes and biases, I wish I could say that they're not accurate. They're probably pretty accurate.

You know, this is one of the reasons I went into the industry to try to help change. this and there's a lot of amazing financial planners out there that are extremely honest and that's why they went into it a lot of them second careers because they have seen how it's been done wrong and they go into it to help people financially but the training does help with the financial independence community however i would go into it as a client asking or telling them what your goals are they're going to ask you what their goals are if they're a good financial planner because that dictates everything if your goal is retirement at 65 or your retirement at 35 you adjust accordingly and significantly in that case. But they will ask you what your goals are. You tell

them I would like to quote, retire or be financially independent in seven years. I have this side hustle. I have real estate. I have a blog. I have these things. This is my savings rate. What would you typically recommend or have you ever worked with anyone in this situation and how did that go? Have them answer that type of question and see if they've done it before. See if they even understand the concept. You know, like more. advanced concepts of Roth IRA conversion ladders, you know, things like that where you're retiring early but then converting some Roth IRA money so that you can pull some out before that 59 and a half retirement age where you have a penalty. You can definitely find the planners,

but there are fewer and far between. And I would say Google helps with that a lot. In that case, you may have to go more virtual. You know, you might not find someone locally that you can sit down with that is really specializing in early financial independence. But it's happening more and more as the financial independence community is exploding. And I would actually say that XY planning network, which I'm a member of. It's a professional network. They have conferences and continuing education that we do. But there's more advisors in that community focusing towards X and Y generations that probably have that financial independence bent a little bit more. Okay. You're answering all of my questions before I can ask them.

Sorry. Have me clarify. Keep asking. No, well, that was going to be my question. Does your CFP need to be local? Do they need to be in your state? And how is a CFP licensed? Is it just, are you a United States CFP or are you a your state CFP? So the CFP designation is international to my understanding. And however, the coursework is specific to the country that the CFP is in.

And what it entails, it's six exams on separate topics like income taxation, estate plan, financial planning insurance, things like that. And then there's a cumulative exam. It usually takes people about 18 months to two years to go through the entire amount. And that cumulative exam is the real kicker. That's the one that makes the designation a little bit harder than all the other alphabet letters that are out there for financial advisors. You'll see a lot of other like different specialties. There's a CLU, which is an insurance specialist, which is actually a pretty good insurance designation. But there's all kinds of, and I can't even name it. I can't even name them off. There's literally dozens and dozens of financial designations, everything from

retirement income distribution specialist and things like that, that a lot of them require one or two courses to pass and get the designation. There's no cumulative and there's no overseen body. The CFP Board of Standards has an extremely stringent ethical overlay that if a CFP violates it, your credentials are revoked. And it's more so even than the SEC's Code of Ethics that they require. So there's a lot more oversight. It's probably the most recognized. It is the most recognized designation in the financial planning industry. Okay.

So you can't just say, oh, I'm a CFP. You actually have to go through a boatload of classes and courses, 18 months of testing to become a CFP. Yeah. And 18 months is probably a little bit on the quick side of it. It probably usually takes most people two years to go through it. But yeah, there would be a lawsuit if you tried using them without having the designation. And there's continuing education that you have to do every year to maintain it.

You have to pay a due for it. It's not for the faint of heart. It really takes, it's a commitment. You know, early on in my career, it took a lot of time from family and work to study and do that, you know, before work after work during work hours to try to get through it. Okay. So my friend just became a CFP. Now I know why this is such a thing that she's excited about. Well, that's good.

Okay, so one last thing, and then I'm going to let Scott jump in here. But you said a couple of minutes ago, you pay hourly for advice when you were discussing, you know, like the car salesman. How frequently does somebody need to consult with a CFP? And, I mean, is this like once a week, once a year? $150 doesn't sound like a huge thing. $350, let's go to the top end of that. It doesn't sound like a huge thing if I'm doing it once a year or once a decade. But if I'm every week paying you $350, that's like a car pay.

or that's more than a car payment. Big car payment. Yeah, that's a good question. And this is going to be like the terrible answer, but it depends. You know, it depends on the situation. So I'll give you what I do with with a typical client that I work with. And I work with kind of a specific complexity of a client, not too complex, but not too simple.

But I meet with my clients once a year. And that's just because a year is a good timeframe. People have kids. People move, change jobs. You know, there's a lot of things that affect financial life. And once a year check-in is usually enough for most people. The FI community, I would say once a year or less. If you find a good financial planner that you pay them for one or two hours of their time

and, man, you get some good information, I would do it every year because they're going to catch things every year. And they're going to be educating themselves as tax law changes like we just had, things like that they're going to catch that you won't catch until maybe two or three years later. And that compounding opportunity costs that you've lost may be a big deal. However, if you're very self-educated, I've met with clients where I meet with them once for an hour, and I say, you don't need to talk to me for three or four years. Like, you know what you're doing.

You could be a CFP almost. You know, if you went through the stuff, you are, it's a hobby for you. You enjoy it. It's just kind of the risk of not knowing what you don't know is what you're giving up when you don't meet with someone in full transparency. So I don't do one-hour meetings. I do two-hour meetings always. I never do less. So I charge clients $650 for a meeting plus prep.

plus follow-up. And I said this before we were recording here, but this is not a pitch for me. Please people don't call me. I'm like at capacity with a six-month waiting list. So this is just to help you get an idea. When you're hiring someone, these are the price ranges that you should be looking at for a good fee-only independent financial planner. You'll need to pay for it. Like they're worth the money that you pay for it. It's not someone who will just like meet with you for free and give you some pointers. You might get something out of that. But if you're looking for a good deep dive where someone's reviewing your W-2, your tax return, your whole life insurance policy that you got sold 10 years ago and whether you should get rid of it or keep it. A lot of these

different things that are financially really important, that amount of money is really going to be worth it. Can we maybe hear some anecdotes or some stories about times where you've maybe had someone that's on the journey to FI who comes in to meet with you and you're able to find a opportunity to add a lot of value in this two-hour meeting in a way that maybe our listeners or stuff, you know, wouldn't have expected these. I mean, I'm assuming these are smart people who generally have it all together and yet you're coming in and adding a time more value. So what are some examples of those that come to mind? Yeah. So one gentleman that I met with and he was probably an example that I said that he probably wouldn't need to meet with me for

three to five years. He's got a personal capital account set up. He's tracking his net worth. Optimized just about everything. I mean, I couldn't find hardly anything for his situation. Situation wasn't very complicated, which makes it easier. If you have a very simple situation in the fact that you have like a job you know you're working you have w2 you have a 401k and that's about it you're not like not too much real estate investing not too many kids nothing very complicated no inheritance coming you can usually self-educate really well and that's what this guy had done but what we found in Oregon he was missing out on a 529 state income tax deduction that was like one last optimal piece that he could fit in there and we also found he he could recognize the 3,000 in losses capital losses

to offset ordinary income. Every year you can offset your ordinary income with capital losses up to $3,000 each year. You can't do more than that. Like if you lost $100,000 on a real estate sale, you can't use that to offset your $100,000 in income for that year. You can use $3,000 of it, too. But in us finding that, he'll make up the cost of the meeting in less than a year. And then compounding going forward, that 10, 20, 30 years, that would have made a big difference for him. So that's one where we just, it's barely worth it for him to meet with me. But I would say that is very rare where someone has that together. And just to recap this, so I can understand this in my own words,

this gentleman had, was very self-educated, very, you know, tracking a situation, optimized in most of these places. But he was not setting aside money for his children's education in a 529 plan. So you set that up and invested that appropriately. And then he basically had some losses on perhaps individual. stocks that happened to go down that year. Hey, sell these now, offset your income by a little bit and then buy something different unless you really want to hold these stocks. You think they're going to go right back up in the next six months, which apparently he didn't. So you sell them,

offset your tax capital gains and move on and reinvest it elsewhere. Is that correct? That's exactly right. The 529, I'll clarify that a little bit. And anything that I say is definitely not a recommendation for people for their specific situation. I don't know what your specific situation is. Everybody's situation is different. In his case, usually I'll have people contribute to everything else other than the 529. It's actually not a very good college savings account. He already had kids in college. So basically what he could do is he could put money in the 529 and then a week later,

send it to the college and get an income tax deduction because he was paying for his kids college just directly and missing out on just this basically pass-through deduction that the state of Oregon gives. So he just basically put the max in that the state of Oregon allowed. to his 529 and I was able to tell him how to do it himself. I didn't do it for him. He just paid me hourly. So the state of Oregon has, he could go online and set up himself. So he sent the money in there and literally a week or two later sent it to the state of Oregon. So instant tax, income tax deduction with money he would be sending anyways. So yeah. That makes perfect sense to

me. Like, okay, 650 bucks. Like, you know, you could do all the self-education of the world and just not stumble across that tidbit until you meet with somebody who does this for a living and sees all these different types of situations. So this is kind of fun. Can we hear another anecdote, another story that, that. Oh, man, you can get me, see if I can think of another one. Someone who is doing pretty well overall, and there was a couple of tweaks to be made. Or, you know, what, what about somebody you looked at their documents? And you're like, oh, my goodness, this is a huge mess. Let's fix this. Like, what's one of the most common things you find when you're going through people's information, or is there a common thing that you find that people are maybe not

realizing they need to take advantage of? Yeah. So I'll kind of squish your two questions together. I think I thought of a client that maybe could kind of fit both maybe. So as a younger couple, they have a couple kids, not as financially phi educated, I guess. You know, like it's not a hobby for them. They don't read blogs, Mr. Money Mustache all the time. It's got trench set for life. You know, this stuff isn't on their their bookshelf. All these plugs. But they do self-educate. You know, they know enough to ask the right questions, which is really helpful. And they're situation, they had taken out a mortgage a few years back. The value of the home had increased. They had paid their mortgage down significantly. They still were paying mortgage insurance. Hadn't been taken off. They could get the mortgage insurance taken off, but they had put a lower down payment on that house. And they were well within the 80% of loan to value range to remove that. And that was right there, I think it was $150 to $200 a month that they were paying in mortgage insurance. So little things like that. And there are definitely more complicated things.

things that you run into, everything from long-term capital gains, harvesting, like filling up the tax brackets, things like that. But more often than not, it's these little things that in looking at the broad picture that get caught and are just kind of lying there, I would say that mortgage insurance is actually a pretty common thing that I've seen that people who have tried to get in with a lower down payment loan has been pretty common for the last 10, 15 years. Once they have been in that house for a while and paid it down or the values have gone up, which a lot of markets have now, you can either have it reappraised to knock that off, and that's a good investment to do that usually, or you can simply call the bank.

And they, I think they're supposed to take it off automatically at 78%. But if it gets to 80, you can actually get a hold of them and remove it from there. So, again, not a specific recommendation for people's situations, but it wouldn't hurt to look at someone's own situation. But those are the things that are found out. So this couple, I work with on an ongoing basis. We meet every year. They pay a monthly fee for me to have access.

They call me whenever they have financial questions. They want to offload the financial aspect of life. They don't enjoy spending a lot of time, making sure they're keeping up on things. And it's worth it for them to pay a little bit more. I charge a monthly, quote, retainer fee to be on call and pay for the annual meeting, which is a lot more in depth, a lot more documents that I gather, two hours of prep, annual meeting, two hours of follow up. It just takes a little bit more time to do that.

But when you're looking for a financial planner, you can find someone anywhere on the spectrum. And you just have to ask the right questions to find the kind of person that you want to work with. Okay. So one thing I really want to just hit home is that you don't have to enjoy spending time looking at your finances to still pursue financial independence. And like you said, they pay you a monthly retainer so they don't have to deal with this. Great. You don't have to deal with this. Oh, I don't like looking at this. I don't want to think about it, so I just won't do it. Financial independence, financial freedom is available to just about anybody you have to put in the time or have somebody put in the time. Like a contractor, Scott hires out the work on his properties because he doesn't want to do it himself or he doesn't know how or he doesn't feel like doing it.

Whatever. He doesn't have time. I do all the work on my properties myself because I'm cheap and I want to do it myself. And that's also like you're laughing like that's not true. It's totally true. But it's also hard to find a good quality person that can take care of this for me. By the time I've gone through 27 pre-interviews for a contractor, I could have just done it myself. So you mentioned PMI. You mentioned that this couple was paying out the PMI still.

And just to recap the 80% and 78% of the purchase price of the home, when you put less than 20% down on a property, you're going to pay PMI or private mortgage insurance. And once you get to 20% of the home price paid down, you can ask them to remove it if it's a conventional loan. If it's an FHA loan, you actually have to refinance out of that FHA loan into a conventional loan or another FHA loan to get rid of the PMI. But when you hit 78% of the purchase price paid down, the bank automatically has to remove it again if it's a conventional loan. But the difference between 80% and 78% can be a couple of years. Yes. These home purchase prices, $300,000, $500,000, 2% of that is still a lot of money to pay down. And it's not just, you know, your mortgage payment is made up of your principal and your

interest and taxes and all this other garbage. So that can be a huge amount of money that you're spending every month that you don't need to. I really like that tip a lot. And let's talk about paying off the mortgage or keeping it. Do you recommend people pay off their mortgage? Do you recommend they keep the mortgage for as long as they have it? Can I jump back real quick? I'll come back to that question, but you made a really good analogy with your, like, channeling

David Green right now with Scott and his contractors and offloading the work. So just because Scott is offloading the work to his contractors doesn't mean that he doesn't have responsibility to understand what they're doing or understand what the costs are or to research and know the trade-off between courts countertops or tile countertops or certain types of flooring and how that is going to help with the rents in his units. So if you're hiring a financial planner to offload more of the financial work, maybe on a retainer fee, paying more per year, you still have the personal responsibility to know the right questions to ask, to get enough detail. And this just comes down to you need to do a little bit of research on your own.

even if you don't want to do the work, you need to understand it enough to make sure that they're doing a good job, just like Scott Wood with a contractor. Just offloading it to a property manager. Also in real estate, it's another thing where you can get into trouble if you just offload it and you have no idea how they do their work or how they treat tenants. Same thing with financial planners. You still need to understand what they're doing, why they're doing it. And they should always be willing to answer your questions. That's our job. That's what we need to be able to do.

and ask them the tough questions like, why did I pay you this much? Why are you charging me this much? If it's someone who's good at their job, they're going to tell you why and they're okay if you don't pay them anymore because someone else will. So there's a responsibility there that definitely you have to keep in mind that even though you may be offloading it, you're still in charge of your own destiny, not them, especially in the five community. Those habits of high savings rates, those are up to you. Those aren't, you know, I can tell you what's going to work, but you've got to do it. Like, that's basically where it comes down to. So when you're talking about that one client that had the 529 college savings plan,

you're just like, yeah, well, you don't have to necessarily use that as a savings vehicle, but at least dump the money in there, take the tax deduction, and then immediately pay the school. That's just clearly tax optimization that you should be doing. Those are things that I think a lot of people in the community aren't thinking about just in general when it comes to their overall financial plan. These are just tips and tactics that you've come across that we wouldn't have. So I want to know if we can maybe go through a couple more of these categories, I guess.

For example, with life insurance, what are some things that people in the FI community probably aren't thinking about that's to their disadvantage in their overall financial planning picture when it comes with regards to life insurance? That's a tough one because it's actually not, there's not a lot of depth to it in the FI community. I would say it's pretty bare bones. You know, very rarely will a whole life policy make sense for the FI's. community because the five community is getting started so early life insurance is meant to cover things that you can't self-insure is basically you know that you can't cover something happens if you're the

main breadwinner and something happens to you how does your family survive you know how do you pay for daycare or does the other spouse have to go back to work those types of things long-term life insurance is the way to go I would say most people underinsure early on and a lot of times what you can do is you can kind of stack life insurance policies on each other some people get like one life life insurance policy for 30 years, million dollars. You know, the good example, will produce 40,000 a year in income roughly with the 4% rule if something happens to you. However, if you're on the journey to FI, likely you're going to be self-insured in 10 years. You know, if you're seriously getting to a place where your investments are going to kick off enough income for you to stop working if you want to,

you don't need that insurance after 10 years. So in the FI community, I'd say truncate that a little bit. you can kind of maybe get a 30-year policy of 500,000, but then get another $500,000 policy for the next 10 years, which will save you money significantly. A 10-year policy with term insurance, regardless of age, almost, you know, as you get older, it always gets more expensive. But if it's age 50 and younger, the insurance company is going to look at their stats, and they're going to say, odds are you're not going to die and we're going to keep all this money that you're paying us in premiums.

So you're going to save a lot on those premiums for that 10-year policy. So if you do where you really have the high risk of something happened to you as you're on that FI journey, make that your life insurance plan. However, still have some probably beyond that just because life happens. You know, you don't know, you might not hit those goals. And if you try to get life insurance later when you have a medical condition or you're just older, it's going to be prohibitively more expensive sometimes. Okay.

That was a great tip. Yeah, that's an excellent tip. I didn't know you could stack life insurance policies and they don't have one, but I do have a family. So it is a little more important or important's not the right word. It's smart. It's, hey, I got a family. And like you said, I'm going to, I'm going to retire in 10 years and I'm going to produce all the income that I need to to support my family in a large likelihood. So therefore, I just need a shorter term life insurance to keep things going. And just in case things don't work out, I also have that 30 year that's pretty solid for that time. And then after 10 years, I don't need it anymore.

Great. And even halfway to your 10 years and five, years, you may be almost to half of your covered income if something were to happen to you. So if things don't work out quite like you want them to, that longer term term policy, even though it's smaller, it'll provide something. It'll save you money now, but still provide something if things don't work out. This is what I do personally. I personally have three stacked life insurance policies for different time frames, very similar to this.

I have 10, 20, and 30, actually. But it saves money instead of doing it all 30 year. Yep. That's a great. That's a great tip. Excellent tip. I've never heard that before. What tips do you have for health insurance?

None. None. Right. Moving on. That's a really hard one, especially because it's so specific to people's situation. If you're close to, quote, retirement age 65, you know, there's things like Medicare that you take into account. Right now with the Affordable Care Act still being around, there's a lot of potential change

in the near future, which is tough, but you just have to act on what you know now. the five community already kind of knows this, but ways of keeping your income low as it pertains to qualifying for health insurance through like healthcare.gov is a way to save significantly if you can. You know, if you're self-employed or you have side hustles, there's ways if you have a high savings rate and you're doing a lot of pre-tax savings like a solo 401k, you and your spouse could throw away 100 grand a year if you were making that enough money to be able to do that and keep your taxable income way down and probably pay just about. nothing in health insurance with the subsidies that you would get from the Affordable Care Act.

So keeping your income down, however, you don't want to let the tax tail wag the dog. I mean, that's kind of not always the best way to go. And if you want to do things like harvest long-term capital gains to fill up a tax bracket at 0%, and I know I'm kind of getting into the weeds here, but that is more valuable than trying to keep your income down just for health insurance savings. So I don't have a good tip there. I mean, that's something that is really, really tough and specific. And your employer, you know, what depends on what your employer offers.

Yeah. Yeah. So I asked that question, kind of hoping that you would have a great tip or to be able to hear you say, yeah, there's nothing really to go on right now because the health care system is kind of up in the air. And I'm really waiting in the next couple of months to see what's going on. This is the number one question that I get is, what do I do about health insurance once I retire? So I'm glad that you don't have an answer.

I wish you did have an answer, but it's good to know that I'm not the only one that doesn't have an answer. I am looking for somebody who can speak intelligently on this subject. I just don't think that there's anything to talk about right now because nothing's been finalized, right? Yeah. So I guess I'd maybe add to that. And this is how you deal with uncertainty. So all of financial planning is managing uncertainty. You don't know what's going to happen in the future.

And health insurance right now is just a really good example of that. You can save a little bit more, you know, to try to. hedge against higher health insurance costs. I mean, that's an easy way. You know, if you think your premiums are $1,000 a month now, you know, in five years when I retire, they might be $2,000. Well, you know, maybe significantly save or look at buying another piece of real estate that will cover that amount per month and hedge against that. There's always something that you can do. You just don't know in the health insurance case. You don't know exactly what it's going to be. And I think a lot of times people think that health insurance is just going to break their financial

plan completely. It very rarely does. It very rarely just, explodes it, as long as you can pay for a premium of some sorts. Usually there's other adjustments you can make to your lifestyle, especially in the five community. If you have a high savings rate and you're in your head of the game, it really makes a difference. It's when you haven't saved as much and you're closer to retirement in your 50s and you're really trying to figure out, you know, if you're trying to jump from a job that has health insurance to do your own thing and now you have to pay for it and you're trying to plan a few years out, but you don't have a nest egg that you've built up already, then it gets tough.

But if you're ahead of the game, time really heals a lot of things. If you can get ahead of it and save well, and the high savings rate is just like the silver bullet that can really, really help anything. I just think it's so interesting that the answer to this question is there is no real good option for someone who's generating a healthy retirement income other than shield your income so that your income is below the poverty line or close to it so that you can qualify for government subsidy, which I think is a real shame. I think that I have a real problem with, and I'm sure I'll get some flack from this from people listening, but I have a real problem with

the ethics behind that. Hey, I'm going to generate a million dollar net worth or more in less than 10 years, and then I'm going to qualify for poverty line subsidies from the government. That's just against the intent of the program. But then also from a practical standpoint, relying on the government, that is not what I consider to be financially free, right, for a benefits perspective. So this is a real problem with our health insurance system. And I think this is a big reason why a lot of people who are FI work a job. Yes. I polled the Choose FI Facebook group, by the way, plug for them, plug for those guys. They got a great Facebook group. I pulled them and I was like, of people who are FI, you know, how many of you actually live off of just stock dividends? How many

of you work a part-time job and how many of you work a full-time job or whatever. And almost everybody was working at least a full-time or part-time job who was FI. And I think that this is a big part of the reason. Yeah, I agree with everything you just said. So hopefully I don't get a lot of flack too. The incentives just, you know, it's hard to line incentives up when you create a law like that. And it's just people will always figure out ways to do basically what the government's telling

you to do, what they've incentivized you to do. Same thing with real estate depreciation. telling you to do certain things by the tax code that they've created. I'm moderately excited about the Amazon, Berkshire Hathaway, another company that they have a tool go on the-J-P Morgan. Yeah, JP Morgan heading up their health experiment, I guess maybe you call it. But that guy, I don't know if you've read any of his books. No. The Checkless Manifesto is an excellent book. Just a top-notch surgeon, but he's, when I heard he was the head of what they're trying to do, I really think there would be some good things that come out of that that can be applied elsewhere.

You know, either other companies or nationally, I don't know, but maybe there's a little bit of, try to give people a little bit of hope on this podcast rather than just saying it's hopeless. I'm so excited for that. This is Warren Buffett and Jeff Bezos and Jamie, I never know how to pronounce his last name. Diamond, Demon. Yeah, Diamond. Diamond. We have decided we don't like the health care system.

Nobody else is changing it, so we're going to change it. We're going to look into, I mean, How much money does Berkshire Hathaway have? Aren't they getting ready to do a stock buyback? Because they have so much money just sitting in cash and there's nothing else to do with it. It's ridiculous. I'm so excited for that. And I didn't know the checklist manifesto guy was heading it up.

That's even better. I'm sorry, Scott, I talked over you, but I am so excited that this is happening because you need smart people like this to figure it out. I just want to say that, you know, thanks to the Bigger Pockets Money podcast, you, the listener now have hope. There is no current solution to health insurance. Paul. One of these experiments may work one day. There you go. There's your hope. There you go. Tax season is one of the only times all year when most people actually look at their full financial

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gains that I want to harvest. And that, I can't really do that unless I reduce my taxable income. And we could get way into the weeds with capital gains harvesting. We'll talk about that later. But I want to ask you about reducing your income. Five seconds ago, I discovered that the 529 plan, which I also don't take advantage of, is a way to reduce your taxable income. What is the limit for that? And what are some other ways to reduce your taxable income? I'm glad you brought it to the 529 so that hopefully we don't have other people maybe get confused on it.

So if you live in Oregon, you can reduce your state income tax by contributing to the 529. And some other states are similar to that, but a lot of them aren't. So a lot of states, and this is why the 529 is just not very amazing, in my opinion, is that you put the money in. It grows tax deferred and then comes out tax free if you use it for education costs. So it's like a Roth IRA, but way worse. But in Oregon, there's like $4,600 you can put in a year and you can deduct that from your state income taxes, which in Oregon, our state in top bracket is not. 9.9%, which is that's a good hit. So we pay a lot in tax between federal and state. So anytime someone can kind of reduce that, it's really helpful. But the capital gains loss, did you want me to go into that at all, the capital gains? Yeah, yeah. Can you explain the concept here and at a very high level? So on your tax return, on the second page of your 1040, so on the back page of your first, the first page of your tax return, line 43 shows your taxable income. And that's what you pay tax on. That's that's after your IRA did.

deduction after your standard deduction, all that boils down to you have your income, you take away those things, you get your taxable income. So up to about 77,000 in change currently, you pay, you fall into that 12% bracket federally for your ordinary income, which means wages, things like that. So most of that money, there's a 10% bracket below that, but you fall into that 12% range. Anything above that 77,000, you start paying 22. percent federally on it. It used to be 15 and 25. The tax law reduced it a little bit. So most people, middle America this year, will see probably a reduction in taxes. And that affects a lot of people that kind of middle range there. So that 77,000 is the mark you're looking at.

So that refers to your ordinary income, wages, if you think just wages is the best way to think of that. But then you have capital gains. So if you own a stock for any period of time, less than 12 months. It's short-term capital gains if you sell it before 12 months. If you sell it after 12 months, it's long-term capital gains. The short-term gains that you have, that gets added to your ordinary income normally. So that would just make up that 77,000. So if you ended up with 50,000 and taxable income from your job and you had 10,000 in short-term gains, you'd basically have 60,000 of ordinary income and taxable income on that line 43. However, the long-term gains is the difference. you had 50,000 in taxable income from your job, but then you had a Berkshire Hathaway stock or

a S&P 500 index fund that you had held for at least more than 12 months and wanted to sell it, you could harvest that as a long-term capital gain. And you could use that to fill up that bracket up to the 77,000. So you have two different pieces. You have your ordinary income taxable income and your capital gain taxable income. If you have 50,000 in the ordinary income and say you had 20,000 in long-term capital gains, that would be a total of 70,000. So as long as you stay below that 77,000 mark, which is current law, adjusts a little bit for inflation each year, that 20,000 that you have in long-term capital gains is taxed 0% federally. So anytime you can keep your ordinary income down in a year that you're harvesting long-term capital gains,

can usually get a huge chunk of that tax-free, which is just amazing. So if you sell a real estate property and somehow you work for yourself and you can take a whole bunch of your own income into solo 401k, for example, and reduce your income by a whole bunch, then you can use that part of that 77,000 amount that you have and put a lot of long-term capital gains in there and get tax at 0%. It also helps if you live in a state that doesn't have its own state income tax, because then you pay 0% on those gains as well. So in Oregon, where I'm in Portland, Oregon, I have clients in other states too. So I have clients in Oregon and Washington.

Let's use that. Oregon has a state income tax. So if we did the strategy of long-term capital gains, you wouldn't pay anything federally, but you'd pay it state. Washington does not have a state income tax. So you wouldn't pay federal tax or Washington state tax on those long-term capital gains. And this is something probably that you'd either want to. want to talk to the financial planner about or your CPA, your certified public accountant,

just to make sure nothing is being missed. I'm really going broadstroke here and there are other things that factor into it. But in general, that's how it works. You have this amount of your taxable income bracket. If there's anything left over when your ordinary income is accounted for, to harvest long-term capital gains is a huge deal. And you should probably do it every year that you can. So every year that you have long-term capital gains to be harvested, Because you can harvest an index fund and buy it back the next day, capital gains. There's no wash sale rules, which now I'm really getting into the weeds. So if you harvest a loss, you have to wait 30 days to buy the same thing back.

Harvest a gain, you can buy the same thing back the next day. You can do it right away. So those are easy ways to do that. And you'd have to do that in a non-retirement investment account. It's harder to do with real estate because it's such a big asset to move. And the gains tend to be a lot bigger. so you need to have more room in that, that long-term capital gains bracket to do that. But hopefully that wasn't too confusing.

But it's definitely something that people need to look into because you're losing money every year that you don't do. And it puts your cost basis higher for the future. When you do want to pull that money out, you pay less tax in the future. Yeah, a good example of this, one that might be applicable to people listening to the Bigger Pockets Money podcast is buying your first real estate investment property. Suppose you make $80,000 a year and you buy your first real estate investment. property. Well, because you make less than $150,000 a year, and because it's the first year you

purchase this thing, you know, you're going to be paying all sorts of closing costs. You know, let's say you buy in July, right? You have all these closing costs. You're going to have some rehab costs that might be expensed that year. You'll have some things that you capitalize and depreciate over a long period of time. But the end of the day is you may produce a loss on your income statement in the year you buy an investment property on your taxes. It may reduce your total taxable income. And if you do that, that's a good year to maybe claim a capital gain and another asset is what you're saying here, basically. That way you minimize and the impact that tax burden. Yes, you can do that. So we're talking about two different things actually. So that's

offsetting the loss with a gain. So that allows you to harvest with an offset that gain. However, you can keep going up higher. You can harvest more gain than the loss if the tax bracket allows it. If you stay below that 77,000, you can go above it. You'll pay still a lower rate than ordinary income tax, but the sweet spot is to stay below it and pay that 0%. You offset your losses first, but then use up the rest of that bracket to pay 0%. And what's interesting is as you move towards FI, you begin having the ability to control your taxable income in a way that middle class family that contributes to the 401K and has a single family home and saves less than 10% of their income, there's nothing they can do other than contribute to the 401k and pay their mortgage that's going to have any impact on their age adjustable gross income, right, AGI.

But as you have that first 25, 50, 100k and liquidity outside of these vehicles, now you can get started getting creative by buying businesses and assets in ways that will reduce your taxable income and offer you the opportunity to harvest capital gains and still stay below that limit you're talking about at 77K. So with a combination of those approaches. That's exactly right. And you touch on something good too, is having the tax diversification, types of accounts, types of income so that when you do reach financial independence, you can cherry pick where you take and how much you take from each one of those to stay below certain brackets

and maximize the amount of money that you retain. Okay. I want to talk about this because this, I'm going to use this for my own personal. I want to cherry pick. I am no longer comfortable having that much of my total value in this one stock. So I want to sell it this year. But my taxable income is knocking on the door of the next tax bracket. What are some ways that I can reduce my taxable income?

There's the obvious ones, the 401k contribution, which has the limit of $18,000 a year. But then when I contribute that, let's say I make $68,000 a year, I contribute $18,000. a year, and now my taxable income is only $50,000, correct? Actually, it's less. So if you make $68,000 a year and you put 18 into your 401K, only 50 shows up on the top line of your tax return right at the top. And then you've got some other deductions below that. So before you even get to your taxable income, which is on the next page, so say you're married

and $68,000 is the income. So on the next page, regardless of some other deductions like HSAs and $1,000. things like that, you'll get a standard deduction of 24,000. So you're going to take 24,000 off that 50 also. Okay. So your taxable income is going to be 26,000. So that gives you a ton of room up to that 77,000 mark where you could harvest that different than long-term capital gains. Okay. What are some ways to reduce that 26? Let's get me down to zero. And this is all hypothetical. I chose 68 because it's easy to subtract 18 from. Yeah. So you said HSA.

Yeah. So the financial independence community probably is going to know a lot of this stuff, but the lowest hanging fruit, 401K contribution, HSA, probably one of the best tax preference accounts you could possibly contribute to. And what is the limit for that contribution? 6,900 or so for a family. It adjusts by inflation every year. That's why I'm not sure exactly what it is.

I haven't looked at it just in the last little bit. but it's, and I believe it's half that for individuals. Okay. So there's that IRA deduction depending on what your income is. And if you're covered by a plan at your employer, there's some limitations on how much income you can make and take an IRA deduction, but you could do that for both spouses. Scott, you know, depreciation on real estate properties. You know, you were talking about the cost in the first year of buying a property.

Sometimes you can, it makes sense. If that's part of your long-term financial plan anyways, that may, may make, sense to buy a property in that year. I would be careful on that one because you don't want to buy a bad investment just because you're trying to make a good tax decision. Buy something that is, you know, you've run the numbers on and it's really good. So that's a little bit different. So maybe back to the 401k, a lot of people aren't maxing their 401k. So if you're, if you're halfway through the year, it may make sense if you have a large amount of money in a stock to put most of your paycheck into that 401k and have it maxed out for the remainder of the year,

it may not be enough for you to live on, but you could use some of the proceeds from the gain on your, on your sale to live off of while funneling your paycheck into the 401k to max it out. If you're not maxing it out already throughout the year. Yeah. And something you pointed out earlier, which I'll just rehash here is, again,

it's a saying in accounting, don't let the accounting tail wag the biggest business stock. Don't attempt to lower your income by making less money, obviously, right? More money or earning more is great. Yeah, you pay taxes on it, but you have more money.

even if you didn't earn more money, right? But if you can, reduce your taxable income, if you can just diversify these sources or defer it, and in a year where you have very low, adjustable gross income, taxable income on a federal level and whatever is applicable to your state, that's the year to play these other games

like harvesting capital gains. Or another good one is that's a good year to backdoor Roth, right? Because let's suppose you have money in your 401k and you have a very low tax. year. You have $20,000 in adjustable gross income. Well, that might be a year to roll over $57,000. If you have $20,000 in AGI, what was it, 57? So you get to 77. You hit that limit. All of that rollover is now taxed in a fairly reasonable bracket. And now you can put that into your Roth IRA and have it grow

tax-free in the future. These are the kinds of things that happen when you start having control over how much income is showing up on your tax return, and you're not just doing the W2, and that's your only source. Yeah, maybe a couple things real quick on that. Back to Mindy's question about things that you can do. One other thing you can do is you can give money away. You can itemize. So if you are planning on doing big gifts anyways,

or there's an organization that you want to give to, or you can do what are called donor advised funds, and this is getting a little bit more specific and depends on person's situation, but you can give into a donor advised fund and take the deduction in the year that you give it and then have it distributed to certain charities that you choose over time to get your itemized deductions higher. But a lot of people in this new tax law, it's going to be hard to get above that standard deduction because we're losing the state and local taxes are being capped and the standard deduction has been bumped up quite a bit higher.

So yeah, just one, maybe one comment there is a possible another thing that popped into my head. Yeah, not sure where you're going to give yet. Put it into this fund and then you'll have to give it at some point in the future. But yeah, take the tax deduction now. But again, don't let the tail wag the dog. I mean, if that's not because it locks it up to be giving funds later. So yeah, you know, if you can make more money, that's the goal. And then retain as much as you can.

And that doesn't always mean paying less tax on it. There are other ways to retain as much as you can, reducing expenses for your business. like that, but tax is one of those expenses. Yeah, no, this really was fantastic answering my question, just even these few things that we've done, I wanted to use an easy number, but $68,000 isn't an unusual number for people who are listening to this show. So you start off with 68, you max out your 401k over the course of the year, over a course of a few months, however you do it. At the year end, now your top line is only $50,000. But then you've contributed to your HSA. So now you're down to, you're down

to $43,000. And then you've contributed to this and you've contributed to that. And you've got, we didn't even talk about the 24,000. I completely forgot about that, the standard deduction. So now I'm at like $10,000 of taxable income, but I've still made all that income. I've just diverted at other places. Right. This is fantastic. And really what got me to the capital gains harvesting was I have had some fortunate stock purchases a thousand years ago that I still want to hold. but I don't want to pay all these capital gains on it. So I want to sell it, grab those capital gains in a low taxable year, and then buy it back because I still believe in the company and watch it grow.

All right. So can you actually do that with the same security? Can you sell the same security, harvest a capital gains tax and then buy it back? Or is that there's a rule against that with capital losses. Is that true with capital gains? Yeah. So before I answer it, let me just make sure that we're telling the audience that, you know, this is Mindy's situation.

and I actually don't know Mindy's situation very well. So just the very, very little amount she's given me. So everyone's specific situation is unique. This is not advice that I'm giving to anybody. And you should definitely, this is kind of a tax issue that you should check with a CFP or a CPA. But yes, in the tax code for harvesting losses, you have to wait, usually you have to wait about 30 days to buy the same thing back. So a lot of times people will sell something and buy something kind of similar

to it because it's kind of a gray area in the tax code, they'll buy that right the next day. So you're kind of still in the market, exposure to growth, things like that, rather than waiting in cash for 30 days to buy back the exact same thing. However, when you sell at a gain, the IRS has no problem with that because they want you to pay tax on the game. So they'd love you to sell gain, buy back, sell gain, buy back. So you can sell, harvest that gain, buy it back the next day. And there's no issue with the tax code.

but if you're doing it just right and filling up the brackets like we're talking about, then hopefully you're not paying much tax or zero tax as you're doing it. But you just kind of kind of watch those brackets. But yeah, Mindy, go see your CPA. I will. And that all assumes that the asset's going to continue appreciating. So it goes down, then you're harvesting a gain on something that you wouldn't have had to pay it in the first place. Yes.

Past performance is not indicative of future gain, yada, yada. And that actually brings me to a good point. in the show notes, we will absolutely discuss this that this is just general, high-level conversation. None of this should be construed as advice or, you know, recommendations of any kind. Definitely talk to a CFP. This is just, hey, what are some options available? But we'll definitely put some disclaimers in here all over the place. But this is fantastic.

So a couple of weeks ago, we released an episode, how to increase your income. It was episode 31, I believe, how to increase your income. And a listener tweeted me and said, listen to this episode of how you increase your income and thought there is a lot of recency bias against bonds. If I am correct, Minda BP is also a home note investor. That worked out for her, but other debt's unacceptable. So first let's talk, what does recency bias mean and what is your opinion of bonds? Because I don't do anything with bonds right now. So it's a good point. So recency bias means that we're just kind of more subject to what has happened more recently

or that influences our decision making. So recently, I would say, and this is a really good point, actually, especially for the financial independence community. And everyone who considers themselves a part of the financial independence community, if you have become a part of the community in the last nine-ish years, you really need to pay attention because these nine years have been one of the best bull markets we have have ever seen. So it's really easy to invest in aggressive stocks emotionally because they have been going up and up and up and up. And then they dip and they come back up again. That is not always the

case. The decade before was almost a flat decade. If you started from the beginning of that decade to the end of it, you most likely didn't gain a whole lot. If you were adding during that time, you did. So that's the recency bias. The recency bias means that people are probably more biased to being okay with investing in stocks and emotionally think they're okay with it, whereas bonds don't fluctuate up and down as much. There's an income stream off of them. They don't pay as much, but they're usually based on either a company's assets or a city's assets or a state's assets, things like that. So that's probably what he's referring to there. My opinion on bonds, I don't know if I have an opinion, whether you should invest in it or not. It really depends on your risk tolerance. This is something

that you'll hear from financial planners, good ones, they want to find out how okay you are with risk. And this has been really hard recently for financial planners, myself included, trying to really figure out what people are okay with because now people think they're okay with a lot more risk than they are, because they've seen the market do so well, we're okay with my account going straight up. So bonds, when including a portfolio, generally reduce volatility, the ups and downs. And some people would say that reduces the risk of the portfolio. That's kind of a philosophical debate. I think risk is also a function of how long you have in the portfolio. So if you're looking for investments that are going to perform the best in the long run, historically speaking, it's going to be stocks.

However, in 2008, there was a thing that happened called the Great Recession, and you would have lost 40% if you were in an aggressive portfolio. And some people right now may think that, oh, I can do that. You know, I can weather that. I'll stick it out. I'll run through it, you know, because look what happened this last time. It is a whole different ballgame when you're actually experiencing it. If you have a $200,000 401k and it goes to $100,000, it is very hard to stay the course with those aggressive stocks. You don't know if it's going to go to 50 or 40 and keep going down. So that's the function of the bonds. The bonds produce some income. and they reduce that fluctuation.

So if you think that might be hard for you, you might want some bonds in your portfolio that make that reduction from 200,000, maybe it only goes down to 150. However, when the market takes off like it has in the last eight years, you're not going to get nearly the appreciation that you did, but maybe you're okay with that.

You know, I'd rather have a smooth ride than an aggressive ride. That's referring to thousands of bonds being a part of a portfolio in a mutual fund or index fund. Individual bonds, schools sell them to the community or to investors or to pension funds to expand their campus. Cities do it to create a community center, and they'll pay out a certain percentage for individual bonds, and people can buy them straight from those institutions sometimes,

and there's some tax incentives to those as well. There's more work, there's more vetting to see if that municipality will actually pay out. You know, what's their financial condition? You know, will they honor that bond? In general, probably for the audience listening, the index funds are the way to go, and you can have bonds be a part of that portfolio. However, it may reduce the long-term performance of it, but if you think your tolerance for risk is going to be pretty bad, like if the market goes down by 40 percent and you're going to

move everything to all cash, it'd be much better if you had some bonds in your portfolio that made you not freak out so much is basically the idea behind it. Okay. Moving on from this topic, first of all, are there any areas where we should be asking about that we haven't asked about yet? Well, maybe just right on the tail end of that bonds and volatility and risk thing, one thing that if you're not sure what your risk tolerance is or if you, it's kind of scary to just go all aggressive in stocks. And I'm talking about stock investing, not just, you know, real estate investing is another

really good avenue and business, having your own business. I have my own business. I own real estate. I own stocks and bonds. So full disclosure on all of that. But if you don't know your risk tolerance, sometimes it's good to think of a bucket strategy for the different times frames that you might need the funds. So if you need funds 10 years from now, because that's your financial independence date, perhaps if you go to Vanguard, you could

choose one of their target date funds that is diversified between bonds and stocks 10 years from now. So say, just to make it easy, the 2030 target date fund and put enough in there for a few years of income at that point. So you know that as you approach that date, that bucket of your money will become more and more conservative so it's ready there, even if the market crashes or it could still go away, I guess, but it'll be a lot more conservatively invested. So if the market plummet's right when you need it at financial independence date, you'll at least have some. Gotcha. So you talked about estate planning earlier. And estate planning is interesting. It seems that people in the FI community are almost torn about estate planning. Half of them are like, I don't want to leave any money to

my kids. And the other half are like, yeah, I want to leave money to my kids. And there's no right or wrong answer that that's a personal choice. But if you are thinking about leaving money to your errors or otherwise giving your estate away to charity or whatever, there are some things you should be thinking about early on in your FIA journey, not just once you're old and rich, right? Yeah, definitely. Yeah. Well, maybe I'll just give some kind of high level as far as like accounts and different types of investments and it depends on what people's goals are. Estate planning is super complicated because it really depends on the person's individual situation, how many kids they have, if they want to give their kids anything like you said,

if they want to give anything to charity, if they don't care. You know, there's, there's a lot of that stuff. You know, some people say, I want my last check to bounce. You know, those are the comments that you hear. So things to keep in mind, if you want to give money to your kids, the Roth IRA is a phenomenal account for inheritance for kids. They can do a stretch Roth IRA, which basically means that the IRS, when they inherit it, will require your kid to start taking.

a certain amount out based on their age. It's a life expectancy percentage. However, all the other money that's in there can remain in there and grow tax-free during that entire time. So it's like a mini pension that they can have for their entire life. So that's a really easy one that I usually direct clients to any portion that you want to give to your kids, start with your Roth IRA money. Any pre-tax money, IRA accounts, 401Ks, 4-3Bs, if giving is something that's important to you and you want to do that later in life, after age 70, and a half, the government requires you to take required minimum distributions every year to pay tax on that money. So it's based on your age and a life expectancy table. So it's like 3% or so at age

70 and a half. So you have to take that out and it's added to your income and you have to pay tax on it because you've never paid tax on it. It's gone in pre-tax and grow tax deferred. So they want you to pay tax. However, there's a part in the code that's now permanent that you can give up to 100,000 a year from those pre-tax accounts directly to charitable organizations and it not be taxed, which is a huge benefit. So if someone is in retirement and I'm trying to think examples from current clients, so if you have an organization like local food bank that you really support or your church and you tie 10% all the time, once you hit age 70 and a half, have that money coming from your pre-tax accounts first because it hardly even shows up on your tax return.

It's above the line deduction. And it's just a really good. way to make those funds go as far as possible. And you're able to give more, really, because you're saving on a tax. You could give more to the organizations if you want to. Other things like step up in basis, you need to think about whether it's real estate or non-retirement investment accounts. When you pass away, your heirs receive a step up in basis, which means they could sell it the same day and pay no tax on it, basically. Or they could wait a year later and sell it if it's gone up a little bit. But their basis is the day that they receive it. These are all based on current tax law. So it's really hard. That's the hard thing about estate.

planning, you need to save and plan for it, but things will adjust, you know, the amounts, the limits on these things, but those are some real high-level quick ones that I can think of. Now, I think the listeners are probably more clear on the Roth and the 401K and the, you know, tax deferrals. The step-up and basis in real estate is particularly applicable to, you know, folks that are listening to Bigger Pockets because it's a real estate thing. And what you're saying here basically is suppose I buy a four-unit property for $500,000, right? And I, over 30 years, pay it off completely, and it's worth a million dollars, right? This is very simple.

And then I die, right? Well, instead of, I have two choices. I can sell or die. This is a very morbid example, right? So if I sell a thing for a million dollars, I'm going to pay tax on a million dollars, right? Not 500,000 because I depreciated the property, right? And I'm down to zero. So I have, I pay a million dollars in taxes.

If I die, Scott Trench Jr., now inherits. the property to a million dollars, he can sell it for a million dollars and pay no tax and just collect the entire thing right into his bank account. Is that right? That's it. Yep. You should have been the guest on this show. That's it right there. So I just want to explain that to people because I think that that step up basis, you know, that that's a different language, right? But what I just, I try to explain something in a way that hopefully is understandable. That's unbelievable to be. It's like, it's like a cheat code. Yeah. It is legal. Yeah. It is legal. The government said, you can do this. Yeah, it's a good point. And that's what Scott just did explaining

in layman's terms, what I was putting in financial planner terms. When you meet with a financial planner, call them out like, you know, like that. Like make them explain. If you don't understand something, don't, don't let them, they might not be trying to, but just don't feel bad about asking for clarification of any professional you work with, but especially when it comes to investing like this. But yeah, that's a great example. And it's a huge thing in the tax code. A lot of times people want to give a property before they pass away. And you just have sometimes maybe the situation is very unique, but you need to talk with

professionals if you plan to do that. Usually it's best to let them inherit it. Okay. I want to make a point. And I love that you said, call them out on this and ask them to explain it. I talk about real estate all day long. I say, PMI, it just rolls off my tongue. It's way easier to say than private mortgage insurance.

if you don't know what I'm asking about, I'm happy to explain it. And I think that most people are, and quite frankly, if they're not, they're not the person for you because you don't want somebody thrown on all these terms that you don't understand. So if you don't understand it, they're not going to think you're an idiot because you don't know what CFP stands for. That's just part of their vernacular that they use all the time. Make them explain it and let them really make sure you know what they're talking about or you should really make sure that you understand what they're saying. paying them $350 to talk to you for an hour. Wasting that money by not understanding 97% of the things they said because they thought you understood, isn't going to do anybody any favors. So, exactly. Quick questions, since you are the guest, I'm sorry for going into that expedition.

No, no, that's good. Yeah. Suppose a, you know, a billion dollar property and I don't die yet. And instead I try to give it to Scott Trench Jr. What happens? It really depends on your other assets. I'm going to defer that question because if I answer that, we're going to get people with bad ideas on things. I don't want them to go too far enough. It's a good question, but that's why you need to check with someone on that estate planning stuff. It's very, very important to get it right. Because it's possible that that's a gift that they receive and then they have to pay a lot of tax all of a sudden and they have they have a big cash problem, right? Yes, yes.

You can unintentionally produce a problem for whoever you're trying to give money to. It's usually for the donor is actually where it could produce the bigger problem. It's usually the gift tax goes to the donor. But it really depends on your state too. So there's federal limits, which are really high on the lifetime gift amount. It's over $10 million now. But some states have really low amounts that are exempt from any gift tax. Like Oregon is a million dollars, which is actually pretty low.

So anything above that, you end up paying pretty significant gift tax when you do something before you pass away. But that's where I don't want to get into it too much because it's just it's, it's, very, very specific, but a good question that needs to be asked. All right. Well, then in that case, let's move on to one quick question before the famous four. You have a resource, I believe you put together for questions you should ask when finding a financial planner. Can you kind of give us an overview of that and where we can find that? Yeah. So I didn't personally put this together. This is just something that I got interviewed for by the people at NerdWallet and they interviewed me and I think three or four other financial planners.

But literally, if you Google top questions to ask when you're hiring a financial advisor, this is like the top one that comes up. But it's on nerdwollet.com. And if you just Google something along that phrase, it'll be one of the top ones that comes up. And it's a good list of 10 questions to walk yourself through as you're trying to find a financial planner. The first one is, are you a fiduciary, which we didn't really dive into that too much? A fiduciary is someone who has to act in your best interest, not just sell you something that's suitable. So if you go way back to the car dealership analysis, the person working at Toyota just has to give you a suitable car because it's from Toyota.

They can't even if the best thing for you would be a Honda Odyssey. And I'm sorry, I'm choosing American cars and not foreign. Well, no, just foreign cars, not American cars. But if that is in your best interest, they might not be held to that standard. So a fiduciary has to do what's in your best interest and offer that advice. So that would be the number one thing. And along with that, I would say, do you have to act as a fiduciary in all the advice that you give? Because we run into that hybrid.

Sometimes I do. Sometimes I don't type of thing. And some advisors or planners fall into that timeframe. But it's a good list of 10 questions that the people at NerdWallet put together. They did a really good job. Got some good information from other planners a lot smarter than me. So I would recommend checking it out. Okay.

And we will include a link to that in our show notes and the other things that we've discussed in this show. Okay. So now it is time for the famous four. These are the same four questions we ask everybody at the end of the show. One of my favorites is what is your favorite finance book? I'm getting a lot of really great books recently. This one is really hard. And I think I have to go to Rich Dad, Poor Dad, which is just like all.

over the bigger pockets, real estate podcast. And it just reframes how you look at businesses and assets and investments in a really good way that's not taught in school or in finance classes in universities. So I think that would be the one that I would recommend to people if I had to recommend just one. Okay. And well, you can recommend another one if you'd like. But that, you know, I think it's really important to see everybody recommends this book. If you have not read this book, you should probably we go pick it up and see what everybody's talking about. I mean, it's one thing for somebody to say, hey, I found this really great book.

It's called, you know, Bob's great advice, and nobody else has ever recommended it. That doesn't make it a bad book. But when people keep recommending over and over all across the bigger pockets, real estate podcasts, all across this podcast, all across all podcasts, anybody who asks this question,

Rich Dad, Poor Dad comes up the most. There's got to be something good at it. I'd like to add to that, though, too, Scott Trench's book. And I'm not even, this is not a plug, but it is, I guess. It ends up being a plug. Very well written. Very good book. It's the book that I give to guys that I'm mentoring,

kids that are coming out of college. I give this book away like crazy. So just kudos to Scott on that. I mean, it's very, the fact that there's a timeline written out really well that can guide people long really kind of, I think helps people overcome the analysis paralysis. You know, set for life was the first book that I read that wasn't just, hey, stop going out for coffee and use coupons at the grocery store, which are great tips. But he's like, hey, you know what? Your housing is your biggest expense. He's got a pie chart in there.

And it is, what, 33%, 78%, I can't remember the numbers. But this huge amount of your income, your outflow goes to your housing. Look at cutting that cost. Because when you don't go out to coffee, you're saving $5 a week or 50 or whatever it is. But when you don't pay $1,000 extra on your mortgage, that's $1,000. your pocket. So I loved how that book took kind of a higher level look at your expenses. Well, thanks, guys. I appreciate it. Yeah, it's good. And not just because Scott wrote it. I mean, it's a great book even if somebody else wrote it. Yeah. Well, question number two here.

What was your biggest money mistake? Or we can also reframe it if you don't want to talk. We can hear your personal mistake and then what's the most common money mistake that you're seeing some of the clients you have. So mine would be probably student loans. However, I don't know if I would do it differently. I came out with probably 45,000 or so in student loans from college. I went to two private universities. However, the experience and what I learned was really good. I may have gotten that somewhere else or if I would have planned better for those student loans somehow.

But my first job came from a connection with one of the universities. And that was with a financial planning firm, which then allowed me to buy some clients, launched my own firm six years ago. So it all kind of led through. So that investment has actually turned out well for me in my situation. But there are things that I could have done that really would have reduced that student loan amount and sped things up quite a bit. Okay.

A couple of weeks ago, we spoke with Andy Hill from Marriage, Family and Money. And I was listening to his podcast. He interviewed somebody who helped her son get $700,000 in scholarships and grants and things like that, which led to conversations with other guests that we've had, you know, did you try to get any scholarships? Did you have any scholarships, or was this all loans? I had scholarships and had a couple of academic scholarships and a baseball scholarship, but very little. Like, you know, I say baseball scholarship, like, no full ride, that's for sure. Just very minor amounts. And I would say that I just didn't discover all the opportunity that there

was in scholarships until I was well into college. It just really would. have helped ahead of time. My poor son, he's going to be like financial just pounded into him for his whole life. So that'll be a different story. But yeah, I wouldn't change it, but I would. Yep. Okay. I really think we do need to have a how to apply for scholarships episode because a couple of hours of time, you know, 10 hours of time, 20 hours of time can get you a whole boatload of money. But again, you have to know about it. So you don't know what you don't know. This is something that you've been saying throughout the whole show as well. Okay. What is your best piece of advice for people who are just starting out? Read Scott Trench's book. Ah, another plug. I'm sorry. I can't

stop. I mean, I'm all about stealing other people's work when it's good. So I, you know, like if I can give one piece of advice is the high savings rate. I mean, that that would be where I start. Like, realize that you can save a lot and you don't need as much to live on as you think you do. you don't need everything the Joneses have. The savings rate, like I said earlier, it's this silver bullet. You know, if unexpected things come up, you lose your job and you have to take a job where you get paid half as much, you're fine. You know, if you were saving half of your income, you're not going to be saving anymore, but you're fine. You can have the same lifestyle.

And that's a huge reduction in income to be fine with. So that would be the biggest thing. But then you got to know what to do with those savings, where you go from there. So I, you know, just read set for life. Well, thanks. Thanks for the plug. And to comment on the savings rate, though, like, that is the key. All the stuff we just talked about today, you know, that stuff gets interesting once you start having some assets to invest.

But if you're saving five grand a year, you know, you're just not going to have an interesting portfolio that's really capable of moving you towards financial independence regardless of how you invest it. I mean, there's just nothing to really do. even if you can get 20% returns as $1,000 a year. It's not interesting. It's not helpful. It doesn't even move the needle in some of these areas that we're talking about. So the first step is getting that huge savings rates that you can begin accumulating material assets and investments capable of moving things on. Yep, exactly.

All right. What is your favorite joke to tell at parties? Oh, I was just dreading this one terribly. So I have one joke that I don't tell jokes ever. My sister that's 10 years younger than me, she used to always. tell this to me when she was like five years old. So why did the toilet paper roll down the hill? I don't know. I. To get to the bottom. Oh. That was a crappy joke.

Oh, God. Sorry. You did actually make me laugh, though. All right. Younger sister, courtesy and my younger sister, Carly. Thank you, Carly. Thank you, Carly. Carly, you made me laugh. Okay. I actually liked the joke, Carly, in case you didn't.

Never mind. All right. So, Kyle, where can people find out more about you? You're welcome to come on my website. It's just financial Kyle.com. It's my financial planning firm's website. I also letters torandon.com, and there's a link to it on my normal site, too. I write letters every now and then to my son.

He's 18 months old. on financial independence and just living intentionally in general and just post them on there. Everything, it could be something from a high savings rate to relationship stuff. It's something that I have not done it for a little while. This will make me put another one on there. I haven't done it for a couple months, but that's just been a fun thing for me. But yeah, and there's a if people want to email me, there's an email link on the website. But like I said, I'm pretty much at capacity.

So don't expect a really quick response. I'll try to get back to people if they really want one. but I'm here just for like informational purposes more. I'm not trying to grow a big firm or anything like that. Well, this was huge. I'm super excited because now I'm going to go home and share this with my husband before it comes out live and say, look, we need to talk to a certified financial planner. We're doing a great job.

We're, you know, on the path. But we need to talk and make sure that we're taking advantage of all of our, like, I really want to reduce my taxable income. I want somebody to say, okay, this is what you could do to get it down to as close. to zero as possible. And I don't really want to share all of my financial details right now, but I really want somebody to look at that and give me some clues on what we should do. Okay. Kyle, this ran super long, but this was fabulous. Thank you so much for your time today. This was unbelievable. This is going to be a huge episode.

For sure. Good being here. You guys ask great questions. Thanks a lot. Oh, thank you so much. Okay. We will let you go now and enjoy your day. Thanks. And see you guys. Okay. That was Kyle Mast, who just blew your mind with all of those amazing tips and tricks for ways to further you down the path to financial independence. Again, I want to say that none of this is specific advice that you should do right this minute based on what he has said. You definitely need somebody to come in and look at your specific situation, which is not going to be the same as anybody else's.

But there are a lot of things that you can be doing to tweak your finances and just help you grow your wealth faster or, you know, reduce your spending. Yeah. No, I think I think that the point of this is not to say, oh, that specific tactic or whatever that was discussed today applies to me. I find it really interesting and fun to talk about those things because I am a huge finance nerd. But the point of today's show was to say, there are probably some things that you need to do more research on or think through or things that are. you're going to be very specific to your situation that are impractical or not exciting to think through for yourself. Those are things that you can go out and hire a financial planner that is competent that you know, you're listening, you're self-educating by listening to the Bigger Pockets Money podcast. I'm sure you're doing other types of self-education and reading other types of books.

You know what kinds of questions to ask and what you need to look for and when somebody's talking sense and can actually help you move forward versus somebody who's just trying to sell you a term life insurance policy for the highest possible commission. Go out and decide for yourself, hmm, am I so perfect in my financial plan that I can't afford to spend 150 to 300 bucks for quality advice? Or could that potentially help me? And I think the answer for a lot of folks is going to be, yeah, you know, one meeting a year with someone who really knows their stuff could really maybe give me some new ideas that could save me thousands or tens of thousands of dollars over the next couple years. Yeah, I'm happy to pay $350 to save $1,000. But if he can save me $10,000 or $20,000 or $100,000 over the course of my

financial life, $350 is a drop in the bucket. And I've just never considered hiring somebody to help me. But all of these things he's talking about, I'm like, I'm not doing that. I could be doing that better. I'm not doing that. There are lots of things that I'm, it's too bad he's got a six-month wait. Yeah, I think for me, I have a bias against this too because I'm a do it yourself or I manage my own finances. Exactly. Right. And it sounds like what you heard today is there are people that are financial planners that specialize in helping do it yourselfers. Oh, you're not doing this. Go learn about Oregon State 529 plans and see if that applies to situation. Here's how to run it yourself. I'm not going to do it for you. Like that's something that I could really benefit from if there's something specific to Denver and something that I may go out and do in the next couple of months in later. of this podcast. Yes, I'm so excited to go in and, you know, find a CFP. I'm going to go to his, that article that Nerd Wallet wrote about how to find a CFP. I want to go in and ask all those questions. Go to today's show notes and check out the link or just Google. How do you vet your

financial planner? Go to the show notes because I don't know what he said to Google. I can't remember. And by the way, we have no financial relationship here at Bigger Pockets with either Kyle or any of the things that we're linking to in the show notes aside from the show's sponsor today. So we're not trying to push you to a financial planner that's, you know, someone that's an affiliate of bigger pockets. We're just saying, go check it out the industry in general and see if, see if there's a way that you could potentially benefit and save some money by learning from one of these folks. Yes.

Kyle reached out to me. He said, you know what? I'd really like to share with your listeners all about financial planners and what they can do for you. And I think you did a really great job today. Awesome. Now I have a personal request. Both Scott and I have received emails that are telling me that when I say over and out at the end of the show, that's actually the wrong thing to say.

I was never in the military. I didn't know this, but I guess over means I'm waiting to hear more from you. And out means I'm done. So literally what I'm saying is from episode 38 of the Bigger Pockets of Money Show, this is Mindy Jensen. I'm waiting to hear from you goodbye. And so I need. a new end. I need a new way to end the show. If you would please tweet me, Mindy at BP, that's M-I-N-D-Y-A-T-B-P. Let me know how you think I should end the show because apparently over

and out is not the way to go. So I'm just going to say from episode 38 of the Bigger Pockets Money podcast, this is Mindy Jensen and Scott Trench. Thank you for listening. But I really want to know. See you later, alligator. After Wild Crocodile, there's like a whole X, Y, Z. I don't really want to do that one, though. So please let me know what you think I should say at the end of the show. Otherwise, from the Bigger Pockets Money podcast, this is Mindy Jensen and Scott Trench. Thank you for listening.

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