Business Innovators Radio - Interview with Dave Barr, Founder of Barr Asset Management, Discussing Transitioning from Accumulation to Income Generation

Episode Date: June 11, 2025

45 years in business. Working with clients aged 55-75, approaching & in retirement. Retirement plans & Medicare coverages.Learn more: http://www.retirewithbam.com/Investment advisory services offered through Tucker Asset Management LLC, an SEC Registered Investment Advisor. Barr Asset Management and Tucker Asset Management are unaffiliated entities.Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-dave-barr-founder-of-barr-asset-management-discussing-transitioning-from-accumulation-to-income-generation

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 us Dave Barr, who's the founder of Barr Asset Management, and we'll be talking about transitioning from accumulation to income generation. Dave, welcome to the program.

Thanks for having me, Mike. Hey, you're welcome. So I want to learn all about how you're guiding your clients into these kind of phases. But before we dive into that, give us a little bit of your background and how did you get into the financial services industry? So in my early to mid-20s, I was a blue-collar worker. But I had an opportunity that came to me sort of out of the blue to get into the financial services world just short of my 25th birthday. And I found it it was a very interesting idea. And I was interested in bettering myself financially, of course.

I think everyone is. But the thought came to me when the opportunity presented itself. I thought, well, maybe others might have some interest in doing that and I could be helpful to them. And so I got started just short of my 25th birthday, and that was a little while ago. So. Yeah, time goes fast. You know, you look back and go, wow, it's been that many years, but time just clips along. And it's interesting that you use that example of you wanted to learn yourself.

And sometimes when you are so excited about something and interested, it becomes top of mind. You start telling different people, and it probably became very natural. for you to go, well, yeah, here's what I'm learning. And here's what people should be considering with their finances and investments. And then probably just one thing led to the other kind of built out, right? That's very close to exactly the way it went. So, yes. Yep, that was my suspicion.

So we're talking today about transitioning from accumulation to income generation. So obviously, accumulation is the years that people are building and growing. their money. Is there a specific age frame that you recommend your clients say, okay, we're going to have you accumulate and grow money from this age to this age before we start making that shift? Well, obviously, the sooner you start, the better. If you look at the growth curve on a compound interest chart, the line gets exponential after about 30 years. So the sooner you start, the better. but candidly, most people are somewhere in their late 30s to early 40s before they really get serious about it and get started. And then that process continues as long as they're working, earning, and have the ability to put money away and invest and so forth.

Yeah, I guess that's a you would call that, you know, that's just how we're wired or human nature. We all, it's kind of like a retirement is, is a faraway place called Someday Isle. You know, it's like, oh, someday I'll do that. And someday I'll start planning for retirement. And about the time that people start feeling maybe an extra acre pain or two, that's when they start going, man, yeah, I need to start thinking about retirement. And, you know, so I think that's a great, great point there. So talk a little bit about how this financial shift happened from transitioning from

accumulating that wealth to generating income during retirement because there has to be, you know, it's not really like a, you know, five, four, three, two, one, boom, we're going to change. It's got to be a little bit of a gradual thing, right, from accumulating to then starting to shift to generating income. Well, it is. There's an analogy that's often used, and it may not be new to anyone listening to this, but preparing for retirement is like going up a mountain.

but the goal is not really the peak or the summit where you've, but the goal is actually getting back down the mountain safely. So in other words, the goal or the peak is when you've accumulated that pile of money, but then what do you do when you get there? You've got to figure out how to take that pile of finances that you have and learn how to distribute it to yourself in an economic way, but also meet your goals and dreams and that sort of thing. So when you go from accumulating to distributing your wealth, the whole situation is reversed. You're young, you're working, you're earning, you're putting in way a relatively small percentage of your income to save toward the goal, if you will. But after you get to the goal, the date, the age, age 65, 7, whatever your end date is, or start date, if you will, for retirement.

then you've got to learn how to take those assets and turn them into income that satisfies your needs and wants and yet you have to do some precautionary planning so you don't run out of it. Yeah. You know, that's a that's a mouthful right there. And I think we could probably do about a three-day weekend seminar on that one statement. You know, how do you make sure you don't run out of money? Well, first of all, you need to understand how much money you're going to need every single month in retirement. And I would suspect that you become almost like a life coach of sorts where you're sitting down with the client going, well, what does retirement mean to you? And are you going to travel all the time? You're going to plague off all the time. You're going to

start a nonprofit. But you have to articulate that to go, okay, now that we've seen now what you want your retirement to look like, what's that going to require money-wise so that then you can put the pen to paper and make sure you don't run out of money, which of course, there's a a big unknown of how long we're going to live. We don't know that. You know, the Lord calls us home when he calls us home, but we don't know the age we're going to live to, but you can make some good calculations.

What are you doing with your clients to help them kind of start to really bring that into clarity? Like, how much are you really going to need in retirement? What are you going to be doing in retirement? Well, the fact of the matter is when you get started and theoretically, based on the dates that I gave, retirement is somewhere in the neighborhood of three decades away for most people from when they start.

Well, it's an impossibility to project with accuracy what the situation is going to be at the time. Tax laws change. I understand that currently we're looking at a situation where the current administration

wants to make Social Security not taxable. a number of different things like that. And yet we know this. We get a new Congress every so often and those laws change. So we do not know three decades in advance what the tax picture is going to look like. We don't know what inflation will be like. We know there will be inflation.

There's no way of getting around that. So what you have to do is start with what can you save? Save as much as you can as soon as you can. and pick investment strategies that are most well-suited to the way you see the world. Some folks just have to sleep well at night. Other folks say, you know what? It's a long ways off, and I can handle it, whatever risk there may be. But once you get through retirement, longevity is, it's a big, that is one of the biggest risks that we faced is longevity.

You know, everyone's life expectancy is somewhere in the neighborhood of, 80 to age 85. But it's nothing anymore to hear of people who are turning 90. And everybody knows of someone who's 100 plus. My father to age 97. My mother, who is still with us, is 104. So you have to plan for those, you know, what is the eventuality going to be? How do we make our money last?

as long as we do. Because no one wants to be a problem in your old age, right? Yeah. Doesn't it sound weird to say longevity is a risk? You know, because you're like, that's a good thing, but it really is a good thing. But then it presents extra additional layers of planning. And it makes sense when you think about this. We're all as a society taking better care of herself.

We're exercising a little bit more, eating a little bit better, They're taking some better medications. Healthcare typically is a little bit better. So back in the 40s, 50s or so, people weren't living as long, and now we're living longer. So guess what that means? We need an extra penny or two to make sure we're going to last through retirement. And then you layer in the statistic that research shows that women live longer than men. So how do you work with your clients to help them understand that longevity and then also the staggeredness to make sure that maybe the, the, the,

the female is taken care of because she might live a little bit longer than the man. Well, you make a good point there. I might add, just as an aside, the statistics show that 45% of retirees go broke, sometime in retirement. That's heartbreaking to think of. And by the way, the vast majority of those people are women. So that's a heartbreaking. statistic, but there it is. So how do you, how do you plan for that? Well, everybody is unique.

And you just have to look, they come with their own unique frame of mind, their own unique attitudes. They have their own unique amount of savings and requirements. Everything is a, I must tell you, it's a custom fit. So. Well, I love that you say custom fit. I don't hear that often, but I often would ask you this question. Isn't it true that when you're thinking about what the topic of today, transitioning from accumulation to income generation, there is not one templated cookie cutter solution that you present to every single client and say next, because everybody's different. Everyone has a different idea of what they want, what they need. They're going to live this time. They're going to retire here. So talk a little bit about how you're making

sure that you're asking the right questions and really formulating the recommendations based on that client's needs? In general, we get the basic data, but it is, again, I want to know about them. I want to know about their family. I want to know about their interaction with their family. I want to know about their outside interests. I want to know about things that are dear to their heart. Do they have some charitable...

I apologize, some charitable organization that's important to them, their church, the American Cancer Society. You know what? Many people, I had a family member who died from cancer, and it affected me deeply. So I want to give to something like that. Some folks want to leave a legacy or a bequest to those kind of things. And that's really important. So longevity often affects legacy. I hope I'm answering your question here, Mike, and the question that...

100%. So, yeah, I mean, you have one person that wants to, you read the news, wants to leave all the money to their cat. You know, I mean, things like that. And then other people are like, oh, well, I had someone that dealt with ALS or cancer or this or that or the other. So all of those mean, Dave Barr cannot sit down with someone and say, oh, well, here's what I give to all my clients. So I'm going to put you into this plan. That's not the way that it works. No, it can't.

So you've got, it just can't. So let's talk a little bit about that income generation. Once you get to the aspect of, okay, I've accumulated X number of dollars, I feel like that's going to be the number that I need. Now we need to start getting that cash flow or that income generation. What does that look like? So there's a, there's another, a bit of an analogy or a description of retirement years. and it goes something like this.

When a person retires in their 60s or 70-ish, early 70s, those are termed that period of time is termed the go-go years. You're excited, you're free from your job, you get to go do things you've been always wanted to do, you've been putting off, so you're traveling, you're pursuing this, pursuing that. And as time goes long, you get a lot of those things done, you get your bucket check, bucket list checked off, if you will.

The following years of mid-70s, late-70s into your 80s are what they call the slow-go years. So you kind of slow life down a little bit. And it isn't that you'd never do anything again. You can still play your golf and you still travel and go see somebody. You just don't do it as much or as often. And then as you age into your late 80s, into your 90s and so on, the folks. the place where my folks were and my mom still is, they call that your no-go years. Yeah.

Okay. Those folks live very quiet, quiet, reserved lives. And so to think about where is the largest piece, if you will, of finances needed, it's early on. And yet, because of the cost of care as you get older, which is something that, older people experience. I know a lot of us will. That needs to be provided for two. That's not inexpensive by any means. It's easily $7,000, $8,000, $10,000 a month for people that need full-blown care. You know, that again, I kind of tongue in cheek said, oh, that topic would be a three-day

conference on the weekend. Same with what you just mentioned, that long-term care. We won't go into the details of that but you said a mouthful there and it all gets down to having that as one of the bullet points in planning to make sure that you're going to have enough money in retirement to get to and through retirement and if you plan for long-term care of whatever amount per month and you end up not needing it yay the money can be deployed somewhere else but if you get there and you didn't plan for it boy you're just behind the eight ball so that's a really really big point that you bring up. What about thinking about, you know, once you have those numbers in place and they come in

once a year, just make sure the plan is moving forward and, you know, taxes, inflation, whatever is still, you know, working for the plan. How do you help your clients determine a sustainable withdrawal rate from their portfolios to make sure they're not going to outlive their money and also make sure they're going to be living the lifestyle that they want? Because we don't want to deplete it too fast. So Morningstar Services, which is an investment advisory organization, has said in the past that a 4% withdrawal rate is a safe withdrawal rate. They've revised that in recent years to 2.5% withdrawal when assets for income.

So when you think about, okay, 2.5% of whatever, how much money is that, how much income is that annually? it gets to be a pretty significant pile of money that's needed. There are other instruments which money can be placed in, which will give a guaranteed income for life, either to an individual or a couple, and those should be considered also. And there's a variety of those, and they all work essentially the same, but they have different features and that sort of thing. So an investigation of other instruments that guarantee income for life is an appropriate approach for that.

You know, I think that you make such a good point. We've said it over and over. There's not one plan for everybody. And there's all kinds of products to consider. And there's not the right one for every single person. There's annuities. There's dividend paying investments and insurances and bonds and all these things that people can look at. And, you know, the temptation would be to be at, you know, the pool or the rec center or the church and go, oh, well, you know, I heard for my friend that they did X whatever, you know, product or whatever a strategy.

I want to do that. Well, you don't know what they needed or what their situation was. And so you can't just hear what someone said and go set me up with one of those things, right? I mean, you've got to come to someone like yourself, sit down and say, you know, help me understand what some of these options would be. Well, I do think that's correct. It's a little, you know, you would expect me to say you need a professional, but it sounds a little self-serving, perhaps it is. And yet, one of the things that you get when you've been doing this for,

I mean, I just had my 70th birthday, so I've been doing this for 45 years. So getting close to half a century, and I'm not planning on stopping. Yeah. Hopefully, when you get to a point like this, you've got some knowledge. You certainly have some experience where you've helped guided other people through the process. And you've seen a variety of situations. And hopefully that means something to be helpful to the next person that's coming into the office.

100%. And I think that's the big thing. No matter who you end up talking to, talk to someone. Don't go to Google. You know, don't go to online and go, oh, I heard my friend did this. Let me get that thing because it just might not be right for you. So, Dave, this has been really helpful understanding some of these key points on this transition from accumulating to making sure you've got enough in retirement to then make sure you've got enough when you're drawing out a certain amount to make sure you maintain your lifestyle. If someone is interested in learning a little more and also reaching out and connecting with you, what's the best way they can do that?

Well, the best way they could connect with us, it would be through our website, and that is retire with bam, BAM.com. So that's bar asset management. It has nothing to do with Batman and Robin. So retire with Bam.com. Awesome. And our e-no is there. We have a contact page. Phone number is there also. So feel free to do that. Excellent. Dave, thank you so much for coming on. It's been a real pleasure chatting with you. Mike, thanks very much. Appreciate it. 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.Influentialentrepreneursradio.com.