Business Innovators Radio - Greg Welborn, Principal with First Financial Consulting

Episode Date: October 1, 2024

Greg Welborn is a Principal at First Financial Consulting. He works with individuals and privately-owned businesses on financial planning issues including investment, retirement, and tax planning, among others. With more than 35 years’ experience, he has developed a strong track record of providing 100% objective advice, always focusing on the client’s best interests.A pioneer in the development of investment consulting services for individual investors, Greg is a respected authority on personal financial issues; he has lectured extensively, written for the Wall Street Journal, Orange County Register & The Los Angeles Daily News, and has assisted NBC’s Today Show in their weeklong series, “Money for Women.” Greg is also a member of the Forbes Finance Council and Kiplinger Advisor Collective.Greg Welborn received a Bachelor degree from Occidental College, an MBA from the University of Southern California, specializing in finance and investments, and pursued a Masters degree in Economics, studying under Art Laffer, an advisor to President Reagan. He and his wife, Irene, have been married for 30+ years, have 3 adult children, and remain active in their church and community.Learn more: https://firstfinancial.is/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/greg-welborn-principal-with-first-financial-consulting

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of Influential Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have with as Greg Wellborn, who's the principal with First Financial Consulting. Greg, welcome to the program. Well, thank you, Mike, for having me.

And just start off with kudos to you, your site, your podcasts. I've listened to many of them. They're all great. It's hard to pick a winner from among so many great ones. Well, maybe someone will be saying, oh, here's a winner with Greg. So thank you for the kind words. I always love just getting people's background. You know, before we dive into what you do, how you do it, and why you do it,

what's your story? How did you get into the financial profession in the first place? Oh, that's a great question. The 25-minute version brought down to, you know, a couple sentences. You know, my dad was a dental surgeon, so he did a lot of delicate, reconstructive stuff. And he, when he was going through dental school, one of the professors took him aside and said, look, you know, dental school is going to teach you how to be a good dentist, but they aren't going to teach you how to run a dental practice.

And most dental practices are terrible business models. So he really focused on that and specialized on that and had a great practice from a medical perspective, if you will, but also just from a financial perspective. But it's a very tough job. It's very physically demanding because you're putting yourself an odd angle. So he finally hung that up. But then put out his consulting shingle and kind of said, well, I know how to run practices. And whether you're a dermatologist or a surgeon or a dentist or fill in the blank, if it's medical, I can help. So he was doing that for a while.

And he wanted me to join him. but as many sons do, I said, you know, I want to go cut my teeth somewhere else. I don't want to just come in right out of school under good old dad and not have credibility. So I went out and joined Bank of America for a while, and I did that, excuse me, and kind of proved myself and left and ran a couple companies for some of my clients. And finally, he wooed me back in to the fold, but I had one condition. I said, look, I grew up with a bunch of dentists and doctors at the family table. I am not going to limit myself to just dealing with this segment. We got to be able to let me expand it.

And so he said, yep, and from there, we started taking this model of, you know, how you run your business, small entrepreneur run your business to, well, wait a minute, one of the biggest risks that entrepreneurs face is Uncle Sam and not preparing for retirement and then the end game and all that. And it just over time kind of morphed into, hey, the bigger need out there is on the personal, private financial consulting side, if you will. And as you and I both know, the industry was changing at the time and leaving the wirehouse model, transactional model to more of the, you know, we really are or should be advisors because we claim to be advisors. We ought to start giving advice. So everything kind of came together in this morphing that we went from medical practice management to then, if you will, overall business management consulting to now we're really, it's about the individual and helping them accomplish their personal goals. whether they're an entrepreneur or they're working for somebody else. But they just have the same issues. I want to be able to retire.

I want to be able to do it well. And God's given me some gifts. So I'm seeing to be particularly well suited to doing that. I love it. I think that is just unbelievable. It's not just like, hey, I wanted to get into an industry to make a lot of money. So here it is. No, you're in there going, I'm digging in from a systems approach, from a foundational approach.

You can't just do whatever industry of business. You've got to do it right. And I think that is just amazing because there's layers within that. You know, you've got a strategic consulting layer. You've got business operations layer. You got to handle your money right. And then when you do a really good job as an entrepreneur, you might have a buck or two that you got to set aside. What are you going to do with that to make sure you can provide for employees or provide for retirement for you personally?

So I think that is huge. And you call yourself an advisor, not even. necessarily a financial advisor, right? So, I mean, you've got some hat you wear. What are the benefits of working with someone like yourself as an advisor? Well, you know, that's a great question. And everyone, not everybody, but I guess a lot of people are, since you're focused on money, you're focused on retirement. Am I going to make it, et cetera, et cetera. They tend to be very numbers oriented, but there's a lot more behind that. But, you know, if we do want to just quickly look at the numbers, okay, there are a couple studies out there. There is a Vanguard study that said,

look, the advice alpha, they always have to come up with some great term for it, don't they? But the benefit of working with an advisor is roughly 3% over each year on average. But then there's another study that the Journal of Retirement did, and they came to the conclusion that it can be 15% difference by the time you get to retirement. So by working cumulative all these years, you're going to have 15% quote-unquote more. But it isn't just about the numbers, because there is that great personal component of this. You and I both know that the best laid plans, if they're not followed, if they're not really felt to be yours, well, you're not going to implement the well and it's not worth the piece of paper that it's written on. So I say that the real benefit of working with the advisor, which can lead to these measurable components, but is I think the confidence that you get, all right, I know that if I stay on this plan, I'm going to be able to achieve this goal that I'm working.

for. Look, most people don't come and say, I want to have a gazillion dollars. Help me get from point to point B. I want to be fantastically stupidly rich. No, they come and they say, look, we're hard working, you know, middle class Americans. We want to do better for ourselves. We want to be better for our kids. We want to be able to work hard and have a really nice retirement. How do we do that? And having the confidence that you've got a plan in place that you've bought into because you've participated in the building of it. It's not Plan 52J pulled off the shelf and stuffed in their throat. It's something we built together. Next point is, is there accountability, predictability in that? And by definition, when you put a

plan on paper, there's some degree of predictability. I'm saying, hey, Mike, you're going to have bang numbers in 10 years, X numbers in 20 years. You can retire on this lifestyle. It's all numbers predictability. But there's this sense that there's now accountability. Because that plan, working with the advisor allows you to come back in every two to three years. and say, hey, we thought we'd be here three years down the road. Where are we? Do we need to make some mid-course corrections? And it becomes this self-feeding, self-correcting loop that reinforces that confidence and that I'm going to get there.

I'm going to be able to enjoy what I'm working hard for. That's the real benefit of working with an advisor. Yeah, I think you're exactly right. And two things come to mind. You said it's not about the numbers only because it is, but it's not just that. It comes from your personal experience, life experience, business experience that you can bring to the client, whether they're just, you know, W2 employees and you're giving good advice or maybe they're entrepreneurs and you can help them with some scaling or some operations things. And it kind of makes me think of something too. I read and reread and reread and read and go to seminars and events.

And sometimes you're spending money on these things. And it's like, you know what? If I were to boil it down to what did I get out of this book or this question? course or the seminar I went to, sometimes it's one thing. Sometimes you went to that and it's like, here's the epiphany needle moving moment and it's this and I didn't expect it and I implemented it in my personal, professional life and wow, it made a difference. Did it 10x my numbers? Probably not. But I think that that's one aspect of what you're saying is you might be assessing someone's situation going, you know what? From what you said, here's something to consider. And then the other thing

that goes hand in hand with that thought is accountability slash those annual mid-course reviews because many times the numbers will change not because the plan was bad, but because some external force hit it like, oh, let's see here, inflation numbers or taxes or any number of things that could kind of start rocking the boat. So we need to be prepared for it and see what impacted us. And then what little small pivots do we need to do? Absolutely. We tell people the numbers are. wrong the minute we put them down on the paper because you're predicting something down to like a dollar who can predict what they're going to have one week from now to the dollar let alone what they might

have 10 years from now but the process is building or should build in margins for error and building what you're looking for are the trends are the trends in your direction and it looks like you're going to achieve what will sustain you with a sufficient margin for error and whether that ends up being $500,000 or $1 million or $2 million. There is this number. Okay, so there is this sense of predictability and there is this sense of accountability. But that accountability is not, gee, I got to $2 million versus I got to $1,999. The number's wrong in a certain sense the minute it goes on a piece of paper.

But the order of magnitude, the vicinity, the margin for error, those are the things that determine this is going to work, this is not going to work. Those are the things that you're revisiting every couple of years to say, are we still on track toward this general number? Does that general number have to change a little bit? Because as you say, something hits you, life changes, whatever. But you're looking for, am I moving towards through with margin for error to this number that allows me then to enjoy this? So you've got to bring in the real world, as you've said. You've been very wise about that because it can't just be academic theoretical.

It's how do you want to life? How concerned are you going to be? And two clients will answer that question very differently. And therefore, their plans have to be different because one person may be very tightly wound and very nervous and other may be more nonchalant. The margin for errors for those two people just psychologically are going to be different. And a good advisor has to recognize that and help them get to their point of comfort, going back to the first question you asked me. If you don't have that comfort and that confidence, there's probably no benefit to work. with that advisor, but maybe with another advisor, there's just, you've got to be able to have that.

It's almost like you become a life coach of sorts because when you sit down with someone and say, hey, tell me what retirement looks like to you, you're going to get a different answer from every different client. And to help guide that response, I would suspect that you get responses like, okay, well, here's what we're going to do and we need X number of dollars to do this. And then when you start digging deeper and going, well, hey, you might need a lot more than because, you know, and I think a lot of misconception is like, oh, well, we're not going to need as much as we do now because we're going to be retired. But in reality, it could be the flip side of that and go, no, no, no, you've got way more time in your hands to go do those hobbies, nonprofits, start this, that or the other travel. You might have so much more time on your hands that you're spending more than you think you would.

And you need to help people realize that so they're prepared, right? Absolutely. Well said. So there are aspects of, you know, planning for retirement. And I'm looking at your website and it's like, wow, financial planning, investment, retirement, taxes, state wealth insurance, other, where do you start? So when you sit down with someone and they might have seen that, you know, that layout, where do you start with someone? Well, it'll sound cheeky to say, and I don't mean it that way, but we start where they want to start. They come in typically with something that's bothering them.

Now, if it's already about I need to have a plan, I got a lot of balls in the air, and I'm trying to juggle them and figure that out, okay, right off the bat, they're saying, I need a holistic plan. I need to bring all these balls together, and we have a fairly good process that takes you from the big goals down to the details, the strategies, and then the implementation. But other times people come in and they don't think. they need a big plan or maybe they don't need a big holistic plan right now, but they've got one issue. I don't know how much insurance that I'm going to need. I've got this benefit

at work that I'm being asked to decide about. I don't know whether to exercise my stock options. And we'll help them with that. We're going to help clients will do as little or as much as the client needs because it is about the benefit to the client. It's not about, gee, I need to make 10 grand from this client or I need to make 5 grand, so I'm going to layer in whatever. No, you tell me what you need, and we're going to help you accomplish that. And for those clients, oftentimes one issue leads to another, which leads to another issue. And then there's this light bulb that goes on and they say, you know what, I probably ought to look at all of these kind of in some general sense tying them together. Bingo, yeah.

Now they're at the point of saying, I need to have a holistic plan. And this is all circular in the sense that how you earn your income. income obviously affects your taxes and your taxes affect the net income and whether you're going to get to your retirement and then how you want to manage your money and how much margin for error do you have and therefore do you need insurance and that impacts your cash flow. So there's this sense that there's a revolving wheel and we're we're optimizing in the sense of balancing all of these areas simultaneously and there are tradeoffs. What would be the perfect plan to allow you and your spouse to put the kids through Harvard for eight years if they become lawyers or doctors may not be the right plan that also allows you to retire at 55.

But the right plan that lets you and your spouse, your significant other retired 55 might not allow you to fund the kids college. So we help point out the tradeoffs. And there's where the subjective factor comes in. You know, as you know, Mike, we're objective advises. We're there to provide objective advice. But that doesn't mean that we're preaching from on high. Everyone's going to take that. Every client's going to take that objective information, look at the trade-offs and come up with

their own subjective sense of, okay, and I'm, of course, making up an example here, we're willing to retire at 60 rather than 55 because that allows us to put the kids through four years of college. And if they want to go to grad school, the grad school's on them. That's a perfectly fine compromise for a family to make, but they get to make it, not me. I lay out the conflicts and say, okay, both these things aren't going to work. So which one do you want to emphasize, not going to work? Which one do you want to emphasize first, second, third, et cetera, and putting together a plan that balances sometimes, oftentimes competing goals and objectives?

You know, I love how you started off that with saying, well, we start where they want to start because that's important to them. If you already have a preconceived idea of where they should start and then they say something different, you go, oh, no, no, no, what you want to do is start over here. Now all of a sudden they feel offended and it's like, no, no, I've got this concern. So I love that you say, we start where you want to. And then we fix that and build a little plan around that. And then we start widening it out and going, okay, now the next step would be to look at something, like this. And let's evaluate if that first place we wanted to start really is going to impede kind of like what you're saying about the Harvard eight year versus retired 55.

So that is so powerful. And it reminds me of the benefit of working with someone like yourself because I see on your website, you guys are fiduciaries. And I think that sometimes people don't realize the import what that is. So talk a little bit about why someone would want to choose a financial advisor who is a fiduciary. Well, it gets down to what does the word advice mean to you? And for most people, they'd say, oh, I'm getting somebody who's advising me, and the assumption behind that implicitly is, well, they're wise, they're good, it's honest. You know, pick your adjective, your noun, whatever. There's this sense of, I'm going to get something that really, really helps me.

Unfortunately, the word advisor is not a regulated word in the sense that some government authority, comes and make sure you really are giving good advice. Anybody can use it. So what is instead a legal word and therefore a requirement is this word fiduciary. Yeah, big legal word. Essentially means that someone is not only morally, but they're legally obligated to work only in your best interest. So now you know that the conflict of interest has been removed. You don't have someone, and I don't want to pick on any particular industry, any particular product,

but you don't have a sales rep pitching a particular financial product who says, well, I'm an advisor. Well, lo and behold, their advice is always going to lead to the purchase of the product that they're selling. Yeah. That is not. If you sell, if you've got a hammer, everything in your eyesight looks like a nail. And you've heard the horror stories out there of these firms in whatever industry that go, all right, guys, we've got to push this product this month. go, go, go, go, go. Well, they're just out there like robots pushing that product, and it doesn't benefit necessarily

the client. So that, I think, is such a huge thing is it's not like, oh, yeah, yeah, I'm giving you some good ideas. This is, I am legally, but most importantly, morally and ethically, you know, focused on doing the right thing, telling you great advice. And this piece of advice I gave you right here, actually, this doesn't make me a dime. It's just the right thing you should do. So I think that's really important for people to keep in mind.

And then, well, let's just kind of wrap up with this, Greg, because I think this is just a huge point that people need to realize. Sometimes when you think about, you know, planning for a good financial future, you've got this domino effect that can affect things negatively. But then we'll circle all the way back around with what you said at the beginning with the 3% or 15%, you know, like the compounding effect of working with an advisor. You can make some bad decisions and all of a sudden that bad decision has a domino effect negative. for your retirement. But when you make some good moves and that good move leads to another move and you didn't lose money when everyone else did. So now you're starting from a better spot. Talk a little bit about having that momentum working in your behalf because it's coming from good, solid financial decisions. You know, if you ask most people how significant 3% is, they would probably say

not that much. Because 3% tomorrow is, you know, if you ask most, you, if you ask most, you, if you ask, just 3%. Everyone has a sense, it's not much. 3% after that, well, looks like it's just 6%, right? Well, no, it's not because it's 3% on the original 3%. So there's now a little bit of an additive, a multiplicative effect. And if you keep doing this year after year after year, small incremental positive things, you know, at the 3% level, if you will. Over 24 years, that will represent.

a 2x, two times better outcome. So in other words, if you've got 100 grand today, you're going to have at 3%, 200 grand tomorrow. If you got a million today, you're going to have 2 million tomorrow in 24 years. And it was just 3%. How many moves. It reminds me of that book.

Have you ever read the compound effect by Darren Hardy? I haven't, but I'm writing that down, as you now say that. I'm a book reader. And as you know, I've mentioned, that before, but the compound effect, Darren Hardy, spectacular book, but it's the same exact concept, whether it's personal, professional, financial, it doesn't matter. I think he uses, like, the idea of 1%. Hey, if you make 1% improvement in this area of your life, and then 1% of that area of your life, and then you keep doing it over and over, it's dramatic. It's the compound effect

positively. But if you sit on the couch with your remote and eat and chips, you're probably not going to get in the best shape of your life and make great financial decisions because you're making the compound effect in the opposite. opposite direction. So it doesn't have to be make big moves, quantum leaps. Nope, 3%. Man, I can do that. You know, so I think that's a huge mindset that, you know, that people need to keep in mind. And I think what we'll wrap it up with here is what 3% is the best 3%. And wow, you know what I'm saying? That is the black hole. You can go to Google and ask whatever questions. And now you're even in worse shape. So having that advisor to guide the process,

show some options. There's where it is. So I think that is just spectacular. Greg, I think that this conversation has gone so, so well, and I think people might go, well, maybe I need some guidance on my 3%. Where's the best way they can learn more about you guys and reach out and connect with you? Well, you can Google us. You can go to the yellow pages if you still have some of those or you can go online. Our website is firstfinancial.I as in India, S, as in Sierra. I know, That looks strange, but phonetically it really is. Firstfinancial.com. So spell it out, firstfinancial.

I dot is, and we're right there. Call us, email us, look at some of our guides, some of the blog articles and all these different points. You know, kick the tires, as they say. There's a place where you can request a complimentary consultation. We don't start charging the minute you pick up the phone or send us an email. We want to get to know you. You get to know us. And at the end of that little process, we want to be able to say, look, we can provide a benefit.

Yeah, there's a cost. We've got to put our kids through college. We've got to retire ourselves. But we're very mindful of that cost benefit analysis. So here's the benefit we believe we can bring you from the conversation we've had and you haven't paid a dime yet. And here's the quote on what it's going to cost to help you get from point A to point B. And that you make the decision comfort of your own home, no sales pressure, no hype here, no commission sales, whether or not working with us as an advisor makes sense.

And if great, it's so great, if not, and it's somebody else, bless you on your journey. We want people to succeed. We hope we can do it. I love it. That's awesome, Greg. Well, thank you so much for coming on. It's been a real pleasure talking with you. You as well.

And keep up the good work. Again, lots of great stuff on your podcast. Thank you so much. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, Visit www. www. www.

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