Business Innovators Radio - Interview with Mason Carhart, Financial Advisor

Episode Date: December 21, 2023

Mason Carhart is a Financial Advisor from Southern Oregon with a heart for small communities. Mason graduated from Crater High School, and then from the University of Oregon with a Master’s degree in Applied Economics. Mason spends his days visiting clients and working with local Community Leaders such as Eagle Point Rotary and Medford Parks and Recreation Foundation. He has a wife and two dogs. He enjoys working with leather, hiking, and camping in his spare time.Learn more:https://www.linkedin.com/in/mason-carhart-479346211/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-mason-carhart-financial-advisor

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 this financial advisor, Mason Carhart. Mason, welcome to the program. Hi, thanks for having me. You are welcome. So I want to learn all about what you do and how you do it and who you serve,

but get us started first with what is your story and background and how did you get into the financial services industry. Yeah. So I am Mason Carhart and I was in the University of Oregon getting my bachelor's degree in economics when COVID hit. And when COVID hit, things were pretty crazy, right? I lost my job and I needed a way to make money. And I had a little pile of cash set aside. So the obvious thing that I went and did was learn options trading. So I did cover calls and rolled positions and things to make enough money to make rent, basically. And then after things kind of settled down, I went and got my master's during kind of the peak of COVID.

And then I realized that I really had a heart for helping people and educating people on the topics of economics and finance. And now we're here. Now I'm in Rotary and I taught a class on economics. And of course, have done many seminars and educational events. Well, I love that story because you were being diligent and productive during downtime, you know, and then you notice, well, I really do like this aspect and that aspect. And let's turn that into how I can serve people. Now, economics, I'll tell you, that was a, that was a tough class in college for me. I just could not relate to that, but you give me some marketing. I'm all over that. But I love the fact that you can make, have people that are really good at one thing and teach other

people that aren't. So that's really awesome. And you've got that heart of a teacher. So I'm certain that in your financial services, you take the approach of, you know, these are topics that you're really adept at, but other people may not be. So talk a little bit about your approach to how you work with and serve your clients. Yeah. So I find kind of what their questions are and then we just go through it, right? Because as a financial advisor, you need to learn a little bit about your client before you can kind of answer them correctly.

Right. So you ask some basic questions and learn a little bit about their life. Their goals or hopes their dreams, kind of see where you can guide them. And then you just do your best to give sound fiduciary advice. You know, it's kind of like what's the old saying, a diagnosis without prescription is malpractice. So, you know, you go to the doctor and go, hey, my, my elbow hurts. And he goes, oh, here's this prescription. No, hold on. We need to ask a few more questions than just that. So I like that answer because you can't just say, here's this cookie cutter financial plan for

every human that I talk to because everyone's different. Everyone has different needs and goals. And so the only way to figure out what someone needs is ask them those questions. What are some of the clients, what does it look like? What kind of client do you work with? Are they typically people that are business owners, young couples, or everywhere in between? Well, yeah, honestly, it's everywhere in between. I see as a financial advisor you have kind of an outsized effect for the time that you work with a client on their total economic well-being in the long run. So the amount of time that you have to spend with somebody to give them sound advice, assuming that they act on it, to see how well they'll do in the world where they take your advice and they don't take your advice, it's day and night, right? You work with a couple that's 25. you explain what a 529 account is and a Roth is.

And if you, you know, in the timeline that you're explaining those things to them and the one that you don't, it's day and night at the end of the day when they're retired. Right. And it's also kind of the same when you're working with 65-year-olds who are looking to retire, right? Because if you make a, you know, even a small mistake with a million dollar account, it adds up really quickly. Right. So if you have sound fiduciary advice, then it's a lot less likely to, you know, happen. Something bad to happen that is.

100%. And let's go a little bit deeper. You mentioned fiduciary a couple times. I know what that means, but let's have people that are listening to this. Be clear on that. What is the benefit of you being a fiduciary to people you work with? Yeah. So I really pride myself on putting myself in my client's shoes and doing my absolute best to to give recommendations based off of their situation, right?

So being a fiduciary is basically, basically that you take, you take yourself out of the equation, you put yourself in your client's shoes entirely, and do your best to solve their problem with their means that they have, right? And it's kind of a little introspective because you got to accept that you're not perfect and you haven't lived their whole life and you're not going to be able to, to, you know, know, know their innermost thoughts. And you have to really trust your clients to be able to do that because if they don't tell you everything that their hopes and dreams are, then you might miss the target on some things.

But at the end of the day, it's kind of how I like to run my business and how I like to help people. Yeah, I mean, that's huge because the problem you see in the news or like the cliche, like I got taken for my whole life savings, that's someone not being a fiduciary. You know, the legal requirement of you having to recommend and explain things that are in the best interest of not your back pocket, but the client's retirement, that's a huge revelation. And when people realize that you are obligated with those fiduciary requirements, it kind of makes the stress levels go down a little bit, I would suspect. Oh, of course. And when you see stories like that on the news, it's so self-centered in short term. And narrow-minded because if you just did right by your client, you would be doing 10 times better. If you, you know, say you've been doing it for 20 years and you've kind of been a scumbag compared to doing 20 years and being a true fiduciary, you're getting a lot more referrals and more business and people trust you a lot more.

And people come to you and open up a lot quicker, right? And it's all good stuff when you just, you know, do right by your client. You know, even before we started recording this interview, you and I were talking about how of a small world that it. is, oh, we know this person and that person. And it really is. And you start doing the wrong thing by people. And that small world starts collapsing in. But then when you start doing right by people, that same small world goes and pays off. And, you know, a lot of times people really do want to go, oh, you need a financial help. I've got a guy. And people want to refer you. I know that I enjoy giving good recommendations to my friends at church or the gym. And now all of a sudden, if I'm

referring someone and that comes as blowing back on me in a negative way, that affects a lot of people. So yeah, it just makes so much sense to just do the right thing and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, and, it's, they're, it's, it's a good to give the, a recommendation to someone, like, about somebody that you trust, because that's actually, you know, really well put, because when I'm, you know, talking to my friends or something about, say, their, their, their catalytic converter goes out or whatever, I know, I know a great catalytic guy, right, who can work on it and is fair with the price. And I, I love recommending people to him because he's a good man who just cares about his family, works hard, does his job well. It's, it's hard to go wrong with him, you know. And here's something else in that same vein. If someone came to you and said, I,

I just bought my first car and I need help with this catalytic converter. And you said, go to this person. And that person did a great job. Your friend would appreciate that. And that's wonderful. But most of the time, your people have gone to a car mechanic and got bad service, bad service, bad service. And then when you make that recommendation and your friend does a great job, now it's a billion percent better of an experience because they've had that contrast. Same as many times at financial services.

Sometimes people just got wrong advice or confusing advice. And now when you can come along and say, let me explain, you know, the reasoning behind this or, you know, let me teach you about that. Let me educate you about this. And you're bringing your prospects and your clients along the journey so that they now are understanding. I think that that is the spotlight that people really want to be in and that approach that you're taking is just so powerful.

No, I totally, well, of course, I totally agree. But I think that financial advising is a really interesting intersection between interpersonal skills and a more analytical skill set as well, right? And being able to bridge that gap for your client, perhaps your client's a little more analytical or perhaps they're a little more emotional, right? Being able to bridge that gap to the other side and being able to explain it from both sides is really important. Yep. Now, you mentioned your personal journey of learning how to trade some options. And I know that the R word is involved with that risk.

So talk a little bit about, and not that you teach your clients how to do options, but talk a little bit about the importance of when you're, talking to clients about their retirement. That's about the time that you want to make sure everything is buttoned up and have as little risk as possible. We can never eliminate it, but you can mitigate it and keep it as little as possible. Talk a little bit about how you teach your clients to address and understand risk and then what you do to help them mitigate that. Yeah.

When clients are going into retirement or thinking about retirement, one thing that is seemingly always overlooked as sequence of return risk. And for me, if you're not discussing sequence of return risk, you're doing at least a partial disservice to your client. You really need to get those first like three to five years of retirement nailed down because that's where most of the stochastic risk kind of lies for your whole whole retirement, basically. If you're taking your 4% or whatever it is out of an account that's down 50% you're over here,

then you're, you know, you're looking in a worse spot than if you just were done. hold cash or anewitized part of it or have a whole life policy that you can you can look at pulling money from. So you're really, really making sure that they understand that having safety barriers and guardrails in place, while they might not be as efficient when things are making 18% of the market, it is in the long run. It's a lot safer to actually have that than not. Yeah. That's a huge observation. And here's the other thing that when I hear the risk or volatility. It makes me think about the fact that at times there is going to be that volatility.

But if you feel like, oh, I just took a dip in, you know, whatever percent. Now I need to get it back. And then you tend to start getting this mindset of taking even more risk to get back to the ground zero. And it becomes this vicious cycle because you took a little bit of a blip. But now you just need to realize, okay, how can we? insanely get back or make that progress forward, right? Yeah, of course.

I mean, without volatility, there's no up or down movement in the market, right? That's kind of the definitional. But the trap that you're talking about is very real for a lot of people that don't have the education or understanding of the financial industry, right? Because if you start compounding losses down, but you're also increasing risk over time, then you get to zero pretty quick. and having someone in your life that you can talk to about that's pretty helpful. 100%. So let's even now shift gears into looking further into retirement and looking at some of the kind of holes in the bucket.

When you think about working with a client and teaching them how to plan for retirement, what are some of those holes in the bucket that you need to help them plan for? Like taxes or risk, things like that. Yeah, taxes is a big one. people don't understand how, on average, people don't understand how social security tax, right? And there's some, there's some interesting ways that you can try and work around getting all of your social security, or most of your social security tax potentially, right? So being able to educate on how social security tax works and what income is counted towards that, right? Because interest free or interest income, right, that's tax free. It's still actually counted towards the cumulative amount for social security.

taxation, right? And not a lot of people know that. So it's just little things like that, making sure that the important nuances are kind of being illustrated is key. Yeah, I think that's huge. And you think about taxes. And I know that one of the cliche comments that you hear is like, oh, well, in retirement, I'm going to be in a lower tax bracket. Or, well, we don't know that. You don't know what the brackets will be in 5, 10, 15, 20 years because no one can predict the future. But we know one thing, taxes most probably will be going up. And the only reason I know that, and I'm not a financial guy, is because the deficit keeps going up by the second.

And the only way to close the gap on the deficit is to reduce government spending, which probably won't ever happen. Or the government has to implement taxes. So I feel like when you are working with a client talking about taxes in retirement, it It's a real thing and it's not like it's going to get me better, right? No, yeah, it's, you put it really well. It's, if the deficit spending increases, then the only way the government has to get money besides printing it is from its people, right? So they're going to have to increase taxes to match it at some point.

At least that's kind of how the theory goes. But the, the thought process that you have, there's pretty spot on. And then if they print it, quote, you know, air quotes, then guess what that means? Inflation. What's it mean? Yep. You know, so it's like, it's like a seesaw. You know, if you push down on one side, it's going to go up on another.

So it's not like, oh, well, we'll fix this problem by doing that. It seems like every little thing has a domino effect. So let's print more money. Well, then that's fine. It solves one little problem maybe, but then it creates another potential problem. And that's another hole in the bucket. So here comes someone thinking about their retirement. And they don't fully factor in risk, volatility,

taxes, inflation, how far there's dollar is going to go. And then another thing is like, you know, you almost become a life coach going, well, what does retirement look like to you? Oh, well, we want to travel. We want to. Well, now you might need a whole lot more money through your retirement than what you thought of on paper. So I think that's, that becomes part of that coaching guidance education, right?

Yeah, exactly. And one one other big thing that is important to kind of talk about. And the reason I said, I'm happy to and live. with working with people that are 25 to 65, right, is maybe like 10 to five years before retirement, you know, depending on your situation. If you're not filling up your taxable income bracket with Roth conversions, for example, you might be doing something wrong. Roth conversions are extremely powerful because like we're talking about,

one of the only tax-free tools that we have in our toolbox that's truly tax-free for withdrawals anyway is a Roth. And they're super powerful because what happens is, is you can fill up your tax taxable income bracket, but then later down the road, when you have less certainty over what your taxable income will look like or what your tax bracket will look like, you will have already paid taxes when you knew and could account for it,

which is really helpful. And you can still invest it like a traditional IRA. And I know, I know that when I hear Roth and conversion, there is a potential strategy that's helpful for some people, Again, like I mentioned earlier, there's never one thing that's cookie cutter perfect for everyone. So talk a little bit about the viability of maybe converting some other accounts like IRAs that haven't been taxed yet, taking it on the chin and maybe tax paying the taxes now and then looking at the

benefit of putting it into a Roth so that it can grow tax free for years to come. I mean, yeah, you've kind of covered all the bases. It depends on your income. It depends on your expected income down the road. And that's also something that you can try, you can think about doing kind of when you are retired. You can start to convert depending on how much cash reserves you have. It's all extremely dependent on the individual situation. So it's extremely variable.

And the time. You know, like if you only have five years before retirement, you might not have time to recoup the hit you take for paying taxes to then start getting the gains. So it all depends on everyone's situation. But when you're talking with someone, And you're seeing that they're looking at retirement planning. How many years out would you recommend someone start doing some really good planning? Two years out, 20? Yeah, if I'm being honest, if you are even thinking about doing this kind of financial planning for converting IRAs into Roths,

doing it as often or as much as you can, you're over a year is ideal, right? So even if you're 30 and you have an IRA and you don't have a Roth, filling up your taxable income bracket for the year, kind of a no-brainer in the long run. Assuming you don't end up needing to withdraw all the money from all the accounts, right? Yeah, you don't put all your eggs in one basket. You don't use all your cash assets in one type of thing, but it's a balanced approach.

It's different for everyone. And it all depends on your situation. So Mason, I would just say, if someone's listening to this, wanting to look at some of their options, what's the best way that they can reach out, to connect with you and see if some of your ideas and strategies may be a helpful benefit to them. Yeah, you can look me up on LinkedIn under just Mason Carhart, of course, and then my phone number is actually 541-8263434-34.

Excellent. Well, thank you so much for coming on. Today's been a real pleasure talking with you. No, of course. Thank you very much, Mike. I appreciate the time and kindness you've given me and appreciate talking to you. 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.