Business Innovators Radio - Interview with Mike Milligan, Founder of 1 Oak Financial, Discussing Exposing the Déjà Vu Traps

Episode Date: July 8, 2025

Mike Milligan, a Certified Financial Planning Professional, author, podcast and radio show host, and university lecturer, brings 26 years of experience to the financial planning industry. After beginning his career in large banks and insurance companies, he founded his first firm 15 years ago with the belief that “everyone is One of a Kind; and they deserve a One of a Kind Financial Plan.”Challenging the “One Size Fits All” approach to financial advice, which he refers to as “Retirement Déjà Vu™,” Mike developed The One of a Kind Financial Plan™. This comprehensive plan addresses taxes, retirement income, investments, long-term care, and legacy, enabling clients to live a “One of a Kind Life.” Recognizing the need for a clear retirement vision, he then created Retirement CHI™ to supplement the plan. This innovative approach focuses on community, health, and impact, further reducing stress for his clients. Mike leads a team of over 20 professionals across the United States, including Hawaii.Learn more: http://www.1OakFinancial.comThe information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Information is obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. Neither Mike Milligan nor his guests are liable for the use of information discussed. Always consult with a qualified investment, tax, or legal professional before taking any action or schedule a meeting with Mike Milligan. Annuity guarantees are based solely on the financial strength and claims-paying ability of the issuing company. Individuals should thoroughly review the contract for specific product features and costs. Income payments and withdrawals from deferred annuities are generally taxable as ordinary income in the year they are taken.Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-mike-milligan-founder-of-1-oak-financial-discussing-exposing-the-deja-vu-traps

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 back with us, Mike Milligan, who's the founder of One Oak Financial, and we'll be talking about exposing the deja vu traps. Mike, welcome back to the program. I'm glad to be here, Mike. Hey, so I love the title of this.

It sounds very curious and interesting. And before we go any further, let's define what is a deja vu trap that needs to be exposed? I think we've all had deja vu experiences in our life where it's like we get the sense that we've done this or been here before. And a lot of times when we're living life and we get that, it comes with like this eerie feeling. Like it's almost like in a horror movie of deja vu. And deja vu often happens not in the happiest of experiences. You know,

it's often done where, you know, our hairs will stand up on the back of our neck. And it's just a crazy experience. So the traps of deja vu, especially when it comes to retirement deja vu is

feeling like you're getting the same experience that others have gotten again. You just get the sense that you are not unique. You're not one of a kind. See, in my world, in the world of one

oak financial, one of a kind financial plans, we want to celebrate the uniqueness in the one that comes from the clients we meet with. We're not looking to give a deja vu experience. We're looking to give to make it truly about the person that is sitting beside of us, where we're trying to navigate or try to negotiate with Wall Street

and insurance companies in the financial markets on their behalf in a system that's rigged in favor of Wall Street firms. and insurance companies in financial markets. And so what we're trying to prevent is this deja vu experience where they get the same thing that maybe they've heard around the water cooler at work or around the country club or around church where somebody has this negative experience with the same companies over and over and over again.

We want people to avoid that trap. Well, it reminds me of something that I know you've heard many times before, but the definition of insanity, you know, doing the same thing over and over and expecting a different outcome. Well, if the same retirement advice is given over and over, you're probably not going to get money much different of a result. So I think that's an interesting perspective, that deja vu trap for retirement planning. So really, really powerful. What are some of those hidden dangers? You mentioned, you know, like time bombs and things like that.

That sounds like something we want to identify so we can avoid. What are the hidden dangers of those safe kind of things like the annuities, bonds, and, you know, the buy and hold strategies that you hear about that might be so deja vu? Well, we're just going to break this down with real numbers, Mike, because the numbers behind this are show the traps of the deja vu experience. So let's think, let's talk annuities for a second. The average variable annuity fee is around 2.3 to 3% annually, according to CBS News in the year, That means on a $500,000 annuity, a variable annuity, you could pay $15,000 in fees over 20 years, which equates the $300,000 gone just to cost, not to your retirement. Many annuities also have surrender charges.

If you need access to your money early, and these contracts can be so complex that even season investors get tripped up. And if you buy fixed annuities without an inflation rider, you're locking in today's dollars for tomorrow's expenses. And high inflation can erode your purchasing power by 30% or more over two decades. And so annuities, if properly structured, can be one of the greatest assets for your retirement dream, but they could also be one of the biggest nightmares for your retirement if structured wrong. Well, then we go on to another safe experience. And this is one that's probably used more than others, and that's bonds. Bonds have long been sold as safe, but in 2025, the landscape is shifting.

While yields are up, the risk is too. Long-term government debt and inflation worries have driven up the interest rate or the yields on these bonds. but that also means bond prices are very volatile. If you're holding long-term bonds and rates rise, your principal can take a hit. And if you're relying on bond income, remember, inflation is inflation at 4.9%, which is the average from 2000, 2025. They can wipe out any gains from bonds yielding 3% or less, leaving you. with less real spending power. And Mike, don't even get me started on bond mutual funds.

Because a perpetual bond mutual fund, the principle can be so volatile like it was in 2022. I don't even like to talk about those in great details. I just like to, but I will when people want to break the mold of this deja vu retirement. And then there's the buy and hold strategy. This is the Warren Buffett strategy. It works until it doesn't. Market downturns can cut portfolios in half,

and if you're withdrawing during a bear market, you're locking in losses you may never recover from. Diversification helps, but it's not a silver bullet. The NASDAQ reminds us that companies can fail, industries can decline, and buy and hold requires discipline. and nerves of steel. Bottom line here is what safe old paper can be risky in practice, especially if you're not

accounting for fees, inflation, and sequence of return risk. You know, you said a mouthful there, and we probably can spend about the next three hours in that one point alone, but suffice it to say what I heard was there are hidden dangers that we might not know about. and the word, the phrase resonated with me properly structured. Because some people might hear, oh, permanent life insurance, oh, annuity, good, bad, indifferent, whatever. But properly structured is the key. And if one element of any of those things are left out or put into place incorrectly,

it would probably severely lessen the benefit, right? That's correct, right? You know, it's just like the foundation of a house. you know, even a foundation of house requires properly place and structured support. And if there's the support on a foundation of a house is improperly shifted to one side or the other, the house can crumble down. And it's the same thing with somebody's portfolio that they're depending on for their retirement. Huge. So talk a little bit about how some of the external kind of risks like inflation or taxes or whatever kind of can make some of these safe things you're talking about be impacted. You know, so there are some things that we can control, like making some good decisions on properly setting things up, but there's some external things that might impact these aspects as well, right?

Yeah. We find that there are six major risks that people have. in their total financial plan, inflation risk, market risk, tax risk, the risk taxes will go up, mortality, liquidity, or longevity risk. Those risks are all, if they are addressed, we cannot eliminate them completely because we don't have the ultimate,

we're not the wizard standing behind the curtain managing us. But what we can do is mitigate risk. And, you know, everybody mitigates, you know, a large Wall Street company or an insurance company is going to mitigate risk across the board for their shareholders, for the managers of the people that work there, and broadly across a large swath of clients. What we do would we build a one-of-a-kind financial plan is take those six risk, and we try to mitigate those risks for that person. See, we all have a different, we all have a different amount of sand in our life's hourglass. And, you know, two people born on the exact same day, the probability of them dying the same day is basically zero. Yeah. Right.

I mean, we all have different lifespans. We all have different health spans, too, by the way. You know, your ailments are not my ailments. Your future battles with health are not my future battles with health. And so when we mitigate risk individually for people and then come back and build a portfolio that matches your unique one-of-a-kind life to mitigate those risks, it just creates a calmness. like that he's that will allow you to then go out and truly live that one of a kind life. Perfect. I love it. So you talk about several of the risks like taxes. How can poor tax planning kind of chip away at your retirement?

Man, I could talk about poor tax planning for so long. The taxes are the silent killer for so many people's retirements. we have been we've almost been we were like consistently being delivered these sucker punches from the IRS and from our elected politicians

because every dollar you pull from a traditional 401k or an IRA is taxed as ordinary income in 2025 that means 22 to 37% is going to taxes

depending on your bracket. If you withdraw early, maybe before, you know, before 59 and a half without an exception, you can tack on another 10% penalty. And even like we're missing the whole, the point of what retirement asset should be. See, we've been told for the last, almost 50 years now, to defer taxes, defer, defer, defer, defer. Lower, you. your income tax bracket for today. See, in this whole context of the deja vu that you see over again, people have been told by their account of it, lower your taxes today, lower your taxes today, put more money

in pre-tax accounts. And then when you get into retirement, you realize that the government has a withdrawal plan already in place for you. It's called required minimum distributions. And this required minimum distribution trap is basically saying that you're going to exhaust that account over your life. And then if your kids inherit your money, 10 years of their life. And so you're going to get that account balance that, you know, if you've been fortunate enough to put a million dollars into a 401k and you didn't do it right like using Roth or other strategies, then you're going to be pulling a million dollars out over your life,

which, by the way, one of the biggest traps that when it comes to, like the deja vu, is this trap of thinking tax rates can never go up. They can. They absolutely can. And this is a, nobody, Mike,

whatever, nobody who would want to buy a house, whatever walk into the bank and say, Mr. Baker, I'm going to buy a million dollar house. And then they would never sign a mortgage that didn't have the interest rate listed.

If the interest rate was blank on the mortgage, nobody would ever sign that agreement. But that's what we've done in this pre-tax world of 401ks and IRAs. We've given the business partner, which is the IRS and the federal government, the ability to name their price on what they're going to take from that. Now, if you let that go, like many of the deja vu planning techniques that are out there now, like just defer, defer, defer, defer, well, you're not going to maximize what the benefit your family is going to receive off of those benefits. So taxes aren't just a line item. They're a major risk. And without a plan, you could lose a quarter or more of your retirement income to the IRS every year. You know, I want to clarify two words that start with the letter P that you've mentioned here, tax preparation and tax planning.

And it sounds to me like tax prep is like the surface level, fill in the blanks, and tax planning. That's when you roll up the sleeves and dive in. So talk a little bit about that difference between tax prep and tax planning so that that can help close that gap with some of those tax issues that could creep up. Well, tax preparation is taking historical information and memorializing it. It's taking things that have happened in the past, putting them on paper, reporting them to the IRS, and then settling your bill with the IRS. Tax planning is forecasting and looking forward. It's looking ahead and saying, this is based off the code, this is what I could pay. but if I plan, this is what this is,

this is a lower amount that I could pay over my life. And so the difference between preparation and planning is history. That's really what the difference is. One happens in the past. It's a current action of things happened in the past. Planning is looking into the future and determining your own fate for where you're going. Yeah, that's a great, that's a great comparison.

So let's talk a little bit about kind of like when we think about deja vu. We tend, you know, like in marketing, brand loyalty is a big deal. Like, oh, my dad drove a Honda, so do I. Oh, my family. Well, I feel like a lot of times people do the same kind of investment things like, oh, I set up this, that, or the other because of what following the crowd is done. So what is following the crowd in a downturn, you know, like, ooh, here's what I did. Why does that maybe not a good idea and could lead to even bigger losses?

Well, 2025 is a great indication of that. You know, in the stock market at the beginning of January, 2025 was positive. And toward the end of February, the market's peak before. major announcements about tariffs and government furloughs and government downsizing went into to happen. The market

continued to go down in March and April to where it bottomed around April 7th. But then by the end of June, the markets had not only fully recovered what they had

in parentheses lost, but they were back positive for the year. A hundred percent of the time, Mike, markets that go down come up. Now, if you look at the history of our stock market, dating back to before the Great Depression, every time the stock market has gone down, it has recovered and it has gone to new heights.

It doesn't help, though, in the interim while the market is going down because when the market drops, human nature says do something, but the data says that's a recipe for regret. So Dalbar's 2024 quantitative analysis of investor behavior show that the average equity fund investor

underperformed the S&P by 3.5% over 20 years, mostly because they bolt high and sold low during the downturns. But there's also buy and hold risk. The NASDAQ notes that market volatility is an inherent risk and panicking during a downturn can lock in losses that takes years to recover. If you're withdrawing during a down market, you're compounding the damage, a phenomenon known as sequence of return risk.

And so bottom line here is following the herd, it often means selling low and missing the recovery, turning temporary declines into permanent losses. Yeah. It's kind of like the herd mentality, huh? Like, I guess if everyone's doing it, you know, I was, you think of like a school of fish. They tend to all go in the same direction. One of my favorite podcaster says you can have anything, but you can't have everything.

Yep. I love it. part about following the herd mentality is if you if you see what other people is doing and you're in viness i mean the bible talks about coveting thy neighbor's assets right um so you know don't covet what other people have don't follow the mentality be bold and think different during challenges in times that's where having a professional beside you who you know is not really fallen for the deja vu traps that so many other firms has, we can help you from losing in down markets by talking ups and downs of any market.

Yeah. You know, it makes me wonder this too, like, am I in that herd? And am I in that, you know, school of fish where I'm just doing the same thing because that's what I heard online, my friends, my family, whatever? What are some of the red flags or warning signs to notice that I would say it might be time for me to challenge the status quo? Well, if you're paying high fees or the products are too complex that you can't clearly articulate or you don't understand what you're paying or how your account works, that's a potential red flag. another one is if your safe income isn't keeping pace with your inflation, you're losing ground every year. That's because inflation is outpaced your income.

The other one is if you're shocked by your tax bill or your Medicare premiums, that means your plan isn't tax efficient. Those are tax surprises that come up. And then if your advisor never ask you about the things that make. matter, your health, your family, your dreams. It only talks about products or model portfolio performance. You're not getting a plan built for you. That's just simply generic advice. So the bottom line is if your plan feels like it could fit anyone at any time, it's probably not the right plan for you. So we have to challenge the status quo before it costs you your future. And to do that, we have to get you out of the loop of the retirement

deja vu. Yeah, that's huge. You know, I think that's a lot of times people don't pick up on the nuances of what you just said. So what are some of the subtle indicators, like maybe a lack of proactive communication that clients often overlook until it's too late? well you know the the interesting thing is about like just some subtle hints that come along the way is if you're not you know if if there's

if there's a lack of consistency where you're not being notified of major changes in your portfolio the only time you hear from your investment company is through the US Postal Service mailman who delivers a statement to you if if you're if you're only connection to your investment accounts is through the millman or through a dual authentication

code that you get on your cell phone by logging in, it's probably time to seek some myself. If you're, if you're, if the, if the, if the only tax planning you get is when you're filling it out every year, you're filling your tax return out on turbo tax and the prompt, the AI bot says to you, you should consider this. It's probably time to seek some tax advice. And one of the bigger parts of this, too, is if when you're standing at the grocery store line and your card gets declined because your grocery bill is too high or you have

to take out some items on that, it's probably time to do an inflation and income check with a financial professional. Yeah. Huge. I'll tell you, Mike, this has been real educational, helpful eye-opening, some great points to keep in mind. If someone is interested in learning a little bit more and reaching out and connecting with you, what's the best way that they should do that? Well, at One Oak Financial, a number one, oak financial.com, you can reach out to me and my team won't get you on my calendar or on a member of my team's calendar so we can begin the conference. In order to build a one-of-a-kind financial plan, we have to break some generational and some generational curses about money, and we have to break the cycle of retirement deja vu.

We have to stop having the same exact experiences over and over again that have continued to fall short for millions and millions Americans. So if you want to break retirement deja vu, reach out to us and we'll help build a one-of-a-kind financial plan for your one-of-a-kind life. Mike, thank you so much for coming back on. It's been a real pleasure talking with 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. influential entrepreneursradio.com.