How to create significant financial success and fulfillment

0:00how do you balance that human nature to strive with you know also giving heavily and not having that voice say oh you should have more you should have more yeah I can just tell you what works for me because I am very ambitious and I have literally been so driven I've driven over others and and that's something I definitely combat with still this day is how do you balance that ambition so I I believe in goal setting it's what I mean I woke up when I was 21 with the goals that I had made when I was 14 and so it's kind of weird how goal setting absolutely does work but I think it's making sure that you not only create Financial physical health goals but also identity statements I took that from Craig Rochelle when I had him on the podcast is

0:48building an identity like I yes I have philanthropy goals but I also have the goal of the identity of becoming a philanthropist and so I have the goal of being in shape and I will say well here's the steps and the habits and the things I want to obviously accomplish but it's that identity statement second I would say living in the gain versus The Gap there's a great book about this and so many times we look to see where we want to go and we live in that Gap in the future we we're operating in the present but we're thinking about the future so much that it makes us unhappy and what we need to do is from time to time just say look how far I've come in the last five years look how far I've come 10 years ago I couldn't imagine where I am today 10 years ago and I think we should operate in

1:37that gain of how far we've come along from time to time and it's okay just like it's okay to have a cheat meal it's okay to say hey look how far we've come along not from a prideful stance because you should be taking people with you it's like what look at what we've done and then I would say that that's the second one and then third is you asked about how do we balance giving for me again I go back to the Bible it says to give 10% so that's where I started but that's like the floor not the ceiling to your giving so I believe everyone should give 10% invest 20% into long-term savings and then learn how to live happily and fulfilled on 70% but as your income of your business your rental income as your traditional salary job continues to grow as you get promotions and bonuses because you should be the best worker

2:26you know you should be the best in your office you should be working harder you anyone you know what's going to happen as a result is your income is going to increase and when your income increases what I did back then and I still do today as my income increases I just increase my giving percentage and my investing percentage instead of increasing my expectations on my earnings where I'm spending more because I mean again I'm just this is not a brag but the more cars I accumulate the more jet skis I I can't even I can only be at one place at one time and they start to collect dust and you think wow why did they even buy that and so when you start saying wow look at how much we've given more and look how much we've invested more now that's more fulfilling than just trying to buy another car yeah absolutely so I want to I guess peel it back then to to because I

3:14Think a lot of people would love to get to a place where they're giving a lot more obviously you like you said percentage wise you can start with the 10% and that's that might be a lot for for people initially to get to a point where you know you're you're doing you're able to give a significant amount and it's you know not impacting your your overall lifestyle that much A lot of people would like to get there so I'm I'd love for you to like kind of walk me through what that looked like for you initially you said you were buying these duplexes triplexes in these rougher neighborhoods and then I believe you transition right so can you kind of walk us through your journey of how you what what your initial goals were and what were doing and then how that transitioned to what you're

4:02Doing now yeah I mean 10% of someone that's making six figures is hard to go from Z to 60 like go from I'm not giving anything to giving something is very hard I mean again I I do think that people can live Health in a healthy lifestyle from 10 20 and 70 but like I was saying more on a practical standpoint as an example like if you get a 6% or a 5% cost of living adjustment what I would do is I would say you know two for me and three for future me I would do maybe of that three and the remaining 3% Cola I would do 1 and a half% to savings one and a half percent to my my investing I I sto using the word saving because this generation of genz in Millennials they they keep on saving and more and more in their bank

4:50Account but what I've noticed is they're not investing so I stopped saying save 20% of your income invest 20% of your income and that that's that's the actual like good step for you to do is every time you get a pay raise every time you get a bonus is split the difference so I don't know if that answered your question perfectly but that that's the tangible advice I would give to someone I love that advice yeah absolutely and then from like an investment standpoint then so for that 20% what would you recommend like what did you do what did you learn along the way and and what does that look like now yeah I mean I'm a big fan of real estate so I think I love real estate more than any other financial advisor out there I've definitely put my money where my mouth is but I believe in a diversified portfolio so real estate for example is

5:38Tax advantaged but it's not taxfree a Roth IR raise taxfree I've got on to I will leave the innocent I won't say the big name real estate a guru that I got on a podcast and we had to cancel the show because we had such a disagreement about how he said that we should never invest in the stock market and I said I disagree with you completely and so we are just too opposing methodologies I believe that someone should have money in capital markets I believe some people should invest in private Equity I believe they should invest in real estate they should have passive real estate and they should have active real estate so like I built our Signet fund which is a real estate fund that invests in apartment complexes storage units and that is a passive real estate invest that means you don't have to have Blood Sweat and Tears like I did with

6:27my duplexes and triplexes but I do think think that people should have active real estate they should maybe have a condo they should have a cabin in the woods that they rent out because it gives them an appreciation for the passive but the nice thing about having stock market Investments and real estate Investments fixed income Investments is that they're all tracking different headwinds and Tailwinds like my guaranteed Investments are tracking interest rates then I have real estate Investments then I have passive real estate and then I also have the stock market Investments that are obviously are doing really good now might not do good in the next years but they're doing great right now and so having that blend is what I think true diversification should look like and we can get into what those specifics looks like but that's my opinion got it okay so when you sold off

7:16A lot of your personal you know like I mentioned in the beginning you know you exited that eight figure personal portfolio that's when you really that's when you started your fund right and and that's when it became a lot more Diversified is that is that what happened spot on I mean I could tell you all the War Stories I'm happy to do so like with those duplexes they were in CD neighborhoods they were not HUD housing they were but right next to it I mean they were really tough I mean I had someone burn my house down intentionally I had someone burn it down accidentally I had someone murdered inside left for two weeks I had someone murdered in the front yard I've walked into a renovation where there was just a stripper pole and a mattress in one of my Apartments you name it I've seen it and so that stuff is you know interesting for

8:04The first few years but it does get tiring because you have to you have a lot of decision fatigue and so I was at a point where I would have to go to 200 houses and build out an entire property management team instead of Outsourcing Property Management I was going to have to have you know two or three employees that work exclusively for my properties to get to 200 houses and I could have done that but I decided hey my business is wealth management my business is Swan Capital let me not forget my first love let me go back to what I'm really good at but let's bring clients along with us and let's invest in a more Diversified fashion let's have storage units Flex industrial apartment complexes as well as short-term rentals and so let's bring in those four different types of real estate but let's do it geographically this time like when a hurricane shows up like they oftentimes do in Florida it'd be nice if I had you

8:53Know assets in the Midwest and friendly west coast states and the southeast and that's what we built with signant and our goal is to accumulate maybe about $2 million on an annual basis where we buy roughly around a hundred million do with the real estate on an annual basis wow yeah yeah so in terms of building out a a fund that you know you're raising that much money I you know to to purchase a $100 million worth of assets how do you make decisions on what to purchase and also how do you how do you raise how do you build it so that you can raise that much funding on an ongoing basis yeah so our investment thesis is obviously tied to the client our client

9:41Avatar which our client Avatar is a retiree that has three kids they're all grown kids they are five years from retirement five years into retirement so we want to prioritize yield we want to prioritize really I would say institutional class syndications we're not you know working with someone one that this is their first apartment complex that they're buying you know someone's got to be the first investor but it can't be me because we're bringing other clients assets and making that investment we want to see them having a really nice track record of friends and family way before we ever get to them we want to see that they've followed their business plan that they continue to follow their business plan that I mean anyone can put a PowerPoint and a slide deck together but that they've had a business business plan

10:29And that they didn't overachieve too much over the business plan but they didn't underachieve their business plan either I mean you want someone that says hey we ran the business plan and we've executed on multiple times we've had some Cycles go through and this is how our business plan is going forward and we have a niche in short-term rentals we have a niche in vertical integration in apartment complexes and then what my team does my portfolio management team is we make sure that we don't have too heavy in any of these categories or any too much in one geographic area which really just lowers that risk profile over time for our clients now how do we raise that much assets that's a huge question our firm will probably do somewhere between1 and $120 million of new assets of clients that are investing with us on

11:18An annual basis so Signet is just one part of an overall financial plan so like I was telling you earlier you know if you're building your own financial plan I do believe that you should have blend of asset classes and this is what we're recommending to clients and we actually charge clients a a financial planning fee up front to build that plan for them and so I've built a reputation here on the Gulf Coast when you retire in the Gulf Coast that they think of us first and so that was very hard to do it took us a decade and a little bit more than a decade and I think it's being laser focused on that client Avatar who you want to and enjoy serve serving and taking care of and then building out the marketing methods so that they have to choose you or someone else like I my

12:07Biggest concern is not that they choose us is that they don't know us like that's my biggest concern in my market is that when someone goes to retire they say I've never heard of swan Capital that would be a tragedy in my eyes like I want someone to say hey I I really don't like Andrew because he's bald but I mean I've heard of them yeah and I've heard you say in the past you know you don't try to convince investors to invest in your deals you give them a peek around the corner can you kind of explain what that means yeah I mean my advantage point is is I've helped you know 600 families retire and so when you sit down with a family I'm I'm trying to look around the corner for them they've only retired once in their lifetime i' help people do it five or six times a day so my job is to say Hey you like a parent that knows their child shouldn't play in the street but the child doesn't know that they haven't been there

12:55Before they should know that you know people can get really hurt playing in the street so my job is to say hey I I know that you want to have all your money in the stock market that's not going to play out really well for you if you have all your money in real estate because I have a lot of real estate professionals that say Hey I got all my money here well that's probably not a good idea I meet with business owners all my money is tied up in my business that hasn't worked out for a lot of business owners it's I mean it's age-old for a reason I mean it's literally in the Bible 2,000 years ago talking about diversification because it's age-old it's not going away it's not going anywhere any else you know anytime soon got it yeah and what's that process for creating that plan what does that what does that look like from a a tactical standpoint is it I guess how long does it take like you

13:44Know what what does it look like yeah I mean what it looks like is when you know we specialize again in retirement so what we're looking at is everyone's telling them that the older you get the less risk you should take and that's actually not what I believe I believe believe from experience that it's based on when you need the money because I have clients that retire at 52 and 72 so if you're building your own financial plan of how much you need in various asset classes you have to ask yourself when am I going to stop working or start taking income from my investments number two is where we're at economically like right now the market is at all-time Highs at the time of this recording probably won't last like last like that for very much longer so you have to think about that and then third is I could talk to him blue in the face how someone should take less risk or they should take more risk but you need

14:32To know thyself like being self-aware as an investor is underrated like people should talk more about self-awareness like if you can't ride the roller coaster ride don't jump on because you're not fooling anybody but yourself and your family when things go AR you're going to be looking at your statement you're going to be an unpleasant spouse to be married to and you're going to drive your kids crazy because you're constantly checking the news and that's no way to live yeah absolutely and your your company helps people with their Estate Planning and legal structures as well can you share a little bit about what that looks like AB so what's unique about our firm is that we have a CPA in office we have an estate planning attorney in office and I would encourage you if you're listening that you need to make sure that your estate

15:20Plan is tied to your Investments and so I talk about this all the time on my radio show how many families they have Investments they have a self-directed IRA yet the beneficiaries may or may not be right they have an IRA over here they have a bank account that only has one of their children listed as a beneficiary and so it's really handy having a estate planning attorney in office to say Hey you do need a trust you have property in multiple different states and because you have property in multiple different states you could go through multiple probates and so if something happens to you that would be terrible for your spouse and your kids and so it's very important that there's an integration so many of our professionals like our CPA they want to swim in one swim Lane they just want to do their thing but it doesn't work that way when it comes to financial planning it's more like house building like if the plumber is not

16:09Talking to the framer we're going to have issues we're going to have holes through 2x4s that never needed holes through them because the plumbers just having to retrofit after the framer yeah and and are there certain areas that you see like the most common mistakes for people when it comes to this yeah on estate planning typically a lot of families they don't have their beneficiaries done they have maybe one power they oftentimes don't even have a power attorney which is sad because if you have a 401k a self-directed IRA an IRA stands for an individual retirement account so it's not a joint retirement account so if you get demented or disabled your spouse may be a beneficiary but they're not a actual signer on the account and they can't be so they have to have a medical and financial PR attorney to access the account to pay the bills

16:58And so would say that's a mistake I have a lot of families they live very disorganized lives financially so we build every client a binder that has all their legal tax financial insurance documents in one binder because you may know where all of it is but your spouse that doesn't really care about all this stuff they don't know where it's at and your kids definitely don't and from a tax standpoint there's a lot of Mis conceptions and holes that we expect our CPA to do the tax planning most CPAs are great tax preparers but not so much good on the tax planning and so I've had to fire two CPAs because they constantly wanted to tell me about last year's taxes and I'm like I don't need a mortician I need a doctor that keeps me healthy and says here's how you can legally and ethically reduce your taxes in the future and so when you start doing

17:47The the homework for yourself and you start asking better tax questions I bet you'll get better tax answers like again I'm always trying to continuing to learn I mean the most proud thing I am about my house is that there's a two-story library in it and people say why is that your favorite room because that two-story Library paid for the whole house and I still continue to go look and say is there any tax strategy I'm not using oh the Augusta rle that well that's smart I'm going to need to rent my house out 14 days a year so I can write off those 14 days help pay for my house and those are just Tax Strategies that if we don't utilize them we lose as the taxpayer oh