Sunday, January 8, 2017 – Wealth Strategy with Bryan Rigg Radio Show – Every Sunday 1-2:00 on KLIF
RIGG Wealth Management offers securities to Broker Dealer Financial Services, Member SIPC and advisory services through Investment Advisors Corp and SCC registered investment advisor. RIGG Wealth Management is not a subsidy area of Broker Dealer Financial Services. Neither RIGG Wealth Management nor Broker Dealer Financial Services offer legal advice.
Clients should consult their attorney of choice on all legal matters.
Welcome to “Wealth Strategy” with Bryan Rigg for every Sunday at one o’clock on KLIF. Bryan is a celebrated Yale graduate, adding a PhD from Cambridge, a former officer in the Marine Corps, a man of profound integrity and honor, and your wealth professor.
Please, welcome your host for the next hour, Mr. Bryan Rigg.
LISTEN TO THE SHOW
Bryan Rigg: Good afternoon, ladies and gentlemen. Thank you for listening to us today. We are on the station of KLIF, every Sunday from 1:00 to 2:00. My name is Bryan Rigg. I’m the owner of Rigg Wealth Management, a privately owned financial advisory firm.
I’d like to wish you all a Happy New Year. I’ll be talking to you today about my firm and my background. I’d also like to talk to you about the importance of using a financial advisory firm who is independent.
I was born and raised right down the road in Arlington, Texas. I went to Yale University for my undergraduate degree. I went on to Cambridge and got my Master’s and PhD there.
Soon thereafter, I went into the Marine Corps. I was a Marine Corps officer. After being in the Corps for a few years, I got out and was a professor at SMU and American Military University and have written several books on World War II and the Holocaust.
Over 10 years ago, I had a sea change and joined the ranks of Wall Street. I started out at Credit Suisse and learned an awful lot about financial management there. After a few years of being on Wall Street, I realized that the best way for me to take care of my clients was to be part of an independent firm.
I went off and set up my own firm and started learning about how I could service my clients in the best way I could and keep their needs always at the forefront. The wirehouses have sometimes struggled in giving unbiased advice. Being associated with an independent advisory firm can help an advisor do this for his or her clients.
One of the reasons why independence is so important is that a lot of the firms that are out of Wall Street, they have their needs put forward before the clients. We’ve seen this quite often in a lot of the headlines. We’ve seen this last year.
That is something that is very important to look at any financial institution that you’re working at and see how they best service your needs. Are they selling you product? Are they sitting down and listening to you and finding out what your goals are, and then finding instruments to support those goals?
When I went into the independent space, I quickly learned more and more about how beneficial that is to the end client. You’re seeing more and more financial advisors going into this space right now, because many of them have seen how the wirehouses, the very well‑known financial firms that are out there, a lot of them are not doing a very good job of taking care of their clients.
One of the main reasons why independence helps clients is that it allows an advisor to utilize a term that we call open architecture. That is that one can go out and look at several different financial instruments and find the most suitable one to service the client with.
Quite often when you’re at a traditional wirehouse or a traditional financial firm, they will have in‑house products, or they will have proprietary relationships with certain institutions. They will only sell those products, even though those products may not be the most suitable or the most efficient instruments for a client.
When you’re working with an independent firm, you can go out and look at the whole spectrum of different products. You can pit those firms against each other for the benefit of your clients.
That is one thing that has given me a breadth of fresh air, being able to take care of my clients and sitting down with them, looking at what their goals are, not selling them a product, but developing a strategy for them later on, once I have heard what they need to do with their portfolios.
Right now, with the New Year, we’ve had a lot of political change. We have had a lot of things going on in the world. This is a good time to be looking at your portfolios, seeing what changes you need to be making, also, looking at the instruments that you have right now at your disposal and questioning whether they are right instruments for working towards reaching your goals.
I would encourage many of you right now, with all your new years’ resolutions, to be looking at one thing in particular, and that is to make sure your financial house is in order. Quite often, I have found throughout the years, some of the things that are most important in life, we don’t pay enough attention to, estate planning, making sure your wills are put together, make sure your power of attorneys are put together, a living will, health care surrogates.
These are very important for a lot of people to get in order.
Some very famous people, just recently, Prince died, and he died intestate. He didn’t have his will put together. Rockefeller Senior and Rockefeller Junior died without wills.
As you’re looking into the new year, I would encourage many of you to look at these aspects of your overall financial health, because how you have your estate set up quite often will also direct how your financial portfolios should be going and what your goals are.
That’s one part that I always like to do with my clients. I don’t benefit at all financially getting people’s estates in order, but that’s something that is very important to look at. As an independent firm, I can focus on those issues, and I can get people in good hands, legal hands, and help them take care of their overall estate.
People, with the New Year, with all the changes and so on, we need to start helping them. The independents, I really like to take my academic background as a professor and help people get educated about how they can be a good partner with me in building out their portfolio, understanding how they can generate wealth, preserve wealth.
Those are the two key components of our mission statement, is to help preserve wealth and work to grow it according to the risk appetite of the clients.
A lot of the terms that I’ve been using today is familiar to my world. If a lot of them sound foreign to you, that is something also that should be an indicator that there’s a lot that you need to be learning about, a lot that you need to be educating yourself about in order to reach your goals, to build out that portfolio and make sure your financial house is in order.
You can take care of yourself, take care of your family, and work toward having a secure retirement, which is usually the end goal of looking at how you replace your salary today to be able to maintain your lifestyle later on when you no longer want to work or no longer are able to do so.
Right now, some of the stats that I have been reading have shown us that 50 percent of all people who retire today have 50 percent less than what they need. Not than what they want, than what they need.
That’s something many people need to take to heart and look at what they have in their portfolios, and then start thinking about what they need when they retire, and then start having a game plan. Like Plato, the famous philosopher said, “When people do not have a vision, they fail.”
With my independent firm, I have two partners that are also brother Marines, that we try to bring our values from the Marine Corps of honor, courage, commitment, and dedication, hopefully we’ll bear hug our clients, help them understand what they need to do, help them get educated, and then, hopefully, implement a plan to reach those retirement goals, have that vision that everyone needs for their individual goals in order to accomplish what they need when they retire, whenever that time is.
In looking at your retirement strategy, one thing a lot of people do not look at very closely is their 401(k)s. Several decades ago, a major company started shifting away the responsibility of helping people to retirements, pension plans. Basically, you didn’t have to think about it. The company would set it up, and when you retired, then you got your gold watch, and you had your pension.
Now, we have self‑directed plans, which are called 401(k) plans, and a lot of people don’t know very much about these plans. They don’t know how to manage them. The responsibility is put on their shoulders for the 401(k) allocations and the diversification of the plan.
That is something that I think is very important to have a financial advisor to help you with, with general financial advice in massaging the plan, learning about the plan, and developing a strategy for the plan.
However, they need to work with the plan itself before making final investment decisions. That’s something that most people do not do. Many of these plans are set up with a default that is not in line with the risk appetite and the goals of the participants.
That is something extremely important, I think, that everybody, especially going into this new year, need to look at and be students of, what their plan is all about, how they’re diversifying it, what their strategy is.
Moreover, many people are retiring. When you retire, you may find it advantageous to roll this 401(k) plan into an individual retirement account, a rollover IRA, and that is something we can help you with. It’s very important to look at all options, and advantages and disadvantages for each.
In the next segment that we’ll have on the show, we’ll be talking about what a financial advisor is, what you should be looking for, how I got involved with the financial wealth management world, and the importance of having a good financial doctor, if you will, on your shoulder and working on looking at your portfolios, analyzing your 401(k)s, ascertaining what your estate planning strategy should be, and other pertinent issues that help you with your overall financial health.
Later on in the show, I’ll have both my partners come in, who are also Marine Corps officers, and we’ll discuss more issues about the market and what people need to be thinking about, especially in this new year, and their portfolios and how they should manage them.
Bryan: Good afternoon. This is Bryan Rigg, and welcome back to the show. I am the owner of Rigg Wealth Management. In this segment, we’re going to be talking about what a financial advisor is, and what you need to be looking for in a financial advisor.
A financial advisor, you might want to think about is as, like I mentioned earlier, a financial doctor. Think of him as looking at the health of your financial stat of well‑being, and where you need to go to make it stronger and make it more in line with the goals that you want to accomplish of good health, so to speak.
With a financial advisor, there’re many things that different institutions are doing with portfolios, but quite often, people are not being true fiduciaries, true stewards of people’s wealth.
You go into a lot of offices, they sit down and they already have a plan for you to stick you in, instead of listening to your goals, finding out what your needs are, and then trying to find instruments that will help you in that pursuit.
It reminds me of an analogy that a friend of mine who’s in the industry has given. He says, “A lot of people can go into an office with a financial advisor, and there might be something that’s suitable for them, but it’s not in line with their goals.”
By way of illustration, if you have a child, and you’re getting them ready for school, if you tell the child to go and dress himself, he may put a rain boot on one foot, put a shoe on another, may have a blue sock, red sock, and he may have weird clothes on. He may put on his Halloween costume, even though it’s May.
It may be suitable. He will be dressed, but it’s not appropriate for his needs. It’s not appropriate for what he’s going to be accomplishing that day in school. He needs to have some coordination. He needs to have some balance, and he needs to know what month he’s dressing for, and so on.
As a financial advisor, if you’re a true fiduciary, you’re not just putting somebody into an account with a whole bunch of investments and mutual funds. What you’re trying to do is you’re trying to find what instruments will best service their needs to accomplish their goals.
As an independent financial firm, I and my partners at my firm are in a unique and qualified position to really fulfill the goals of our clients of really finding an absolute solution for the portfolios that they want to build.
Quite often in other firms, when you’re beholden to quotas, when you’re beholden to certain instruments that the office wants you to sell, when you are beholden to the office to produce a certain level of revenue, a lot of times, that is not in line with servicing your clients the best.
There was a story at one of the main private banks on Wall Street of the firm pushing a certain hedge fund on their clients, and many of the clients were not suitable for this. Later on, the hedge fund went down 75 percent, and many people lost their wealth.
We hear the stories quite often. One of the most famous ones in recent memories is Enron when the officers of the company were telling people to put all their retirement in Enron stock.
Even if it was a good company, which we know it was a criminal company, but even if it was a good company, you don’t put all your eggs in one basket. You don’t put all your holdings in one stock.
As an independent financial firm, I have no one looking over my shoulder telling me what I should do for my clients to benefit the office or benefit the firm. I am truly in line with my client, listening to him or her, and what they need for their portfolio without having any pressure from above me to push them into an area that they would not feel comfortable with.
A financial advisor is not only a financial doctor, but a financial advisor should be somebody who is totally independent with his advice and is doing his best to be as objective as possible.
You do not want to have a financial advisor who, after he has met with you or she has met with you, is going back to their office manager. The office manager is putting pressure on them to sell certain products, because they haven’t earned enough money for the firm. If they don’t earn enough money for the firm, quite often, they are fired.
I was horrified by some of the firms that I first were interviewing with when I first started on Wall Street that I would go in there, and they told me that their class from the year before, 90 percent of them had left.
When I asked why many of these advisors did not make it at the other firms, the wirehouses, quite often, the conclusion that one could draw is that they ultimately did not make enough money for the firms, not that they were doing the right thing by their clients.
Whether I put my client all into cash or put them all into ETFs or index funds, Exchange Trade Funds, I have total flexibility to decide what is most appropriate for my clients for the strategy that they need to fulfill the obligations of their portfolio.
That is one thing that people need to look at when they’re looking at a financial advisor to be their quarterback for their portfolio is who do they answer to, how do they select their funds, and how do they go about developing a strategy for their clients.
Being an independent advisory firm, I’m able to practice what’s called open architecture. I can go out to Wall Street and I can look at several firms. I can look at several portfolio managers. I can literally put them next to each other, compare them with each other, and let them compete against each other for my business.
That is what is very important for a financial advisor in the future to become.
What’s interesting is we are seeing more and more financial advisors leaving the traditional wirehouses, and going off and setting up their own firms and being independent, because they see that as the best way to service their clients, the best way to learn about the industry and find other opportunities to help clients with their portfolios, other financial instruments to help their clients with their portfolios.
I recently heard 50 percent of all millionaires in the Dallas‑Fort Worth area are using independent financial advisory firms. If that’s true, I believe it’s because they are seeing more and more that these people are able to bring true solutions and unbiased solutions to the table to help their clients work towards achieving their financial goals.
In some respects, financial advisors who are working in independent financial advisory firms have more tools in their tool chest to help bring the solutions that people need for their portfolios.
A financial advisor is somebody who listens, who doesn’t come with a huge packet of different products, but comes with a notepad and tries to find out what you want to accomplish, and then tries to educate you as much as possible about what you’re about to do.
A good financial advisor is also a good teacher. I am consistently surprised by very sophisticated individuals with their lack of knowledge about basic financial instruments, mutual funds, ETFs, indexes, annuities, IRAs, Roth, traditional, the differences.
It’s not, I don’t think, because they are not well‑educated. Most of the people that I’m speaking about are extremely educated. It’s because the financial advisors they’ve been with have not taken the time to explain the financial landscape in such a way that they can then become a good partner in developing strategies.
Another role that is extremely important for a financial advisor to be and at Rigg Wealth Management, this is something I and my partners focus on, is not only being a fiduciary, but being an educator as well, and sitting down with people and going over their statements, going over the instruments we’re using.
If they are willing to, even read books with us and go over different strategies and different concepts that are very important, because one of the most important things to look at in a person’s life is how they’re going to take care of themselves later on medically, financially, and with their families.
In order to do that, quite often, people need, like they need a good doctor for their health, they need a competent attorney for their estate planning, and they need a good, financial, competent advisor for their portfolio. One interesting tidbit to keep in mind, a large majority of all people who try to self‑manage their own portfolios often underperform the market.
In my opinion, having a financial advisor help you along, can help you at least obtain the market, or hopefully get a little bit better return than the market, using the research from Burton Malkiel, especially in his book, “A Random Walk Down Wall Street.”
That is something that, in the next segment, we’ll talk about, and some of those strategies that people can analyze for their portfolios to help them do so.
If you want more information about myself, my partners, and the firm, please look up www.riggwealthmanagement.com, or call us at (972) 383‑1210. We will be back for another segment here soon on KLIF. If you’re interested in this program, you can always get us every Sunday from 1:00 to 2:00 here at the station.
Bryan: Welcome back. This is Bryan Rigg of Rigg Wealth Management. During the commercial break, one of our listeners asked about some estate issues. It brought to mind a story of one of my clients and what happened to her.
It will illustrate how important it is to get your estate in order if you haven’t done your estate planning. I had this lovely lady come in. She had just gone through a divorce. She had a liquidity event. She had a lot of cash that came to her. She had three young children and she was the primary parent.
She didn’t know what to do with the money. She didn’t know how to organize things with her portfolio. The first thing I did with her was make sure that she got her legal documents in order. We worked with an attorney and got a will together. We got a trust.
We got plans for her power of attorney, her health care surrogate. We got plans for who was going to be guardian of the children in case she passed away. We got her goals down on paper and analyzed them. We got her portfolio up and running, and got her investments up and running.
Unfortunately, four months after all this happened, she died suddenly of a heart attack. Because we had done all that planning, it was seamless. We’ve taken care of her kids, we knew exactly who to go to, who was going to be the trustee of the trust and help with the children and with their education.
Had she not done all that, her estate would have been locked up in probate, there would have been a lot of confusion about who should take care of the children. It would have been an absolute disaster.
I can’t reiterate enough of how important it is to get your estates in order. Like I mentioned before, some people who are extremely sophisticated and very wealthy, like Prince, who just died, died in testate, died without a will, and some of the most famous pillars of the economy in finance, Rockefeller Senior and Rockefeller Junior both died in testate.
Remember, as Shakespeare says, “Every man owes God a death, and we need to prepare for that in order to take care of our families and to take care of our legacy.”
Another issue that I would like to discuss right now is insurance. I’m joined here by my partner, Gary Bilyeu. He’s also a marine in the Marine Corps. He’s still in the Reserves. He’s a colonel. I’ve known him for almost a decade. We’ve been working for the last couple of years.
I’ll be turning it over to him here in a second. He’ll give you a little background why he got into the financial industry with me, then talk to you about the importance of insurance and how that fits in with some of the things we’ve been discussing today with estate planning, with retirement planning, and then also looking for a good financial quarterback for your portfolio.
Gary, thanks for being here.
Gary Bilyeu: Bryan, when you asked me to come in and talk about insurance, I started my career in the insurance business. When I was young, just married, no kids, and investing, I knew that was important. Insurance, I knew was important, but there was no one there to guide me through the process to put it all together.
Getting my start in the insurance business, insurance was my focus. I helped clients when they had insurance needs. Every single one of us have retirement needs, and that’s not just solved by insurance. It’s a bigger picture.
The things you were talking about, the estate planning, I had an advisor that told me that. It made me look at the bigger picture not just from an insurance perspective, not just from an investing perspective, but as the big picture.
I had a very successful career in the insurance. We still offer insurance, but I knew that there was more to offer our clients than just insurance. You’ve been my advisor. That’s how I got to know you. Obviously, there’s the Marine Corps connection, but it’s advising me on the investment piece and seeing the bigger picture that was the biggest help.
That’s what’s unique about us. Of course, we’re financial advisors first, but we have the opportunity, with our connections and our relationships with individuals, to actually build the entire plan for our clients. We usually have a need that’s investment‑related. We always get to the insurance piece.
The listening audience needs to know that it’s more than just putting a few dollars away every paycheck. There’re other needs. We all have budgets. We do. We want to protect our family the best we can within our budget.
One of the difficulties is with the rising cost of health insurance with the Affordable Care Act, that’s placed a lot of families a burden, an unnecessary burden. It’s real challenging when we develop these relationships over many, many years. We have these clients, and we help these clients, and now they have to make a decision. Do they put money towards their retirement or do they provide health insurance?
Bryan: How do you think we can help clients? What should they be thinking about with Obamacare if it doesn’t get repealed? What should they be looking at as far as us helping them out in those goals?
Gary: One thing they can do is they can ask us about their health insurance. I sleep very well at night when I can have our existing financial clients ask me about healthcare or life insurance, and I can advise them on the choices. Understanding, we have that relationship with our clients where we know their needs. It’s developed over time, those relationships.
We understand their needs. We can explain the options and help them make the best decision. Can we offer those products? Yes. We still focus on the financial side. We have the ability to educate them and guide them in other areas. I think that’s unique to what we offer.
Bryan: Can you give some stories of some people you’ve helped that really stand out that might help them think about issues they need to address with their insurance needs?
Gary: Healthcare in its current condition or current state, it is what it is. The options have…they’re limited. It didn’t exactly pan out the way that we thought it was going to rising deductibles, rising monthly premiums, and lower coverage, quality of coverage.
People don’t understand those details, but it’s not their job to understand that. That’s what we do every day. The fact that if they have choices whether with their employer or in the individual side, if they just want an opinion instead of reading all of that very difficult information.
If they just want an opinion, we can give them that opinion. We’ve seen the industry, I’ve seen the industry. I’ve seen it change over the years from what it was to where it is now, but we can help them make an informed decision. That’s what we offer best with our clients.
Bryan: A lot of people have talked to us throughout the years about whole life versus term life, and why they should use it. A lot of people have asked me about that. Can you describe both of them, and why people might use one over the other so people can start thinking about that for their estate planning and for their families?
Gary: That’s a great question. We get that quite often. There were people that say that you should do one versus the other. Always buy permanent, or always buy term and invest the difference.
I’d say that there is a need for both types of insurance. The problem with when you say only buy term and invest the difference, most people follow the first part of that advice. They buy the term, but they fail to invest the difference.
I understand the logic behind it, but just like we approach our invested clients, our financial clients, it’s what best meets their needs. We can explain each one of those products. Everything we do, there’s pros and cons.
Bryan: Explain for our listeners what the difference is between a term and whole, and how that actually functions. Let’s just take a million‑dollar policy.
Gary: Let’s keep this very simple. I’m an infantry officer. We keep things very simple, and we can be very sophisticated, but let’s start in so we’re all speaking the same language. Term insurance is temporary. It’s for a specified term.
If you buy a 10‑year term, you have coverage for 10 years. A 20‑term, 20 years. A 30‑term, 30 years.
Bryan: Usually, it’s focusing on taking care of, if I die, kid’s education or paying off the house, or something of that sort. Correct?
Gary: That’s absolutely correct. For young couples starting off, husband and wife, maybe a young kid, sure that’s important, but usually there’s an income. There’re some challenges with income. They want the coverage, they need some protection, but they may not have unlimited resources. Would you agree with that?
Bryan: Yeah, absolutely.
Gary: In most cases, and I say most cases, rarely is there something different. In most cases, a term policy satisfies those needs. When I was young and got married and had my first child, I purchased a term policy and I did a 20‑year term.
I use this as an example, because that’s my situation. We need to visit with our clients, understand their situation, and make the best recommendation. I did a 20‑year term thinking that 20 years would, if something happened to me along that period, my wife would be taken care of and my kids’ education would be paid for. It was very inexpensive.
Life insurance is a young person’s game. The older you get, the more it’s going to go up year after year. When my second child was born, I bought another 20‑year term. There’re some staggered policies there.
With permanent insurance, I’m going to switch gears on…
Bryan: Permanent is also called whole life, or cash value life insurance. Of course, the policy is only permanent so long as the premiums are paid consistently.
Gary: It can be. Understand, we’re talking concepts here. When you say permanent insurance, there’re many forms. Whole life is just one. There’s universal life, variable universal life. Those all have meanings and they can get very confusing, I realize that.
When you’re talking whole life or permanent, let’s call it permanent, the intent is you’re not going to outlive your policy. Many of the permanent coverages will cover you until age 100, 110, 120. I may be bulletproof, but I don’t think I’m going to live that long.
Permanent policy would be rated on my current age and current health. It normally stays the same for the duration as long as the premiums are paid. As well as I do, being around investments and insurance, it can be very complicated, the formulas they use and how life insurance is funded.
Bryan: Whole life is basically just for legacies, it’s for inheritance. It’s leaving something to your heirs versus terms, since legacy mortgage is taking care of a particular need in case you die.
Gary: 20, 30, 40 years ago, there really were limited options. You had a term policy and you had a whole life. A whole life had that permanent coverage, but the other benefit was there was a cash value. A lot of people treated that as a retirement, but really it was more of a savings.
I’m not trying to give historical data. It’s just that it grew at a very small rate.
Bryan: We’re going to have to wrap up this session here. This is an example of what Rigg Wealth Management can do for you. We look at different issues and we bring years, if not decades, of experience to the table to take care of our clients and help them find solutions for their portfolios and their goals in life.
Insurance is a very important issue to look at. Gary is highly experienced in his field has had over a decade and a half working in it.
If you want to know more about us, please see our web page, riggwealthmanagement.com. Our telephone number is (972) 383‑1210. If you’re interested in this program, you can always get us every Sunday from 1:00 to 2:00 here at the station, KLIF.
Bryan: Welcome back. This is Bryan Rigg of Rigg Wealth Management. If you want to see more information on our firm and learn about myself and my partners, please see riggwealthmanagement.com. That’s riggwealthmanagement.com.
Our telephone number is (972) 383‑1210. Again that number is (972) 383‑1210. Please feel free to call us if you’d like to get together and go over your portfolio. We hope to hear from you.
We’ll be discussing some of the reasons why I and my partners got involved with the financial wealth management world. Next week, please tune in. We are on every Sunday from 1:00 to 2:00. Next week, we’ll be talking about some of the current events and some of the historical events that we’ve seen the last couple of months, and what that might mean for your portfolio.
Getting to the reason why I’ve got involved with financial wealth management, there’s two things that played a huge role in my life and my family that really impacted me, and has influenced me to try to be the best financial advisor I possibly can.
I have a great grandfather, who’s in the cowboy hall of fame. He was a brilliant cattleman and he amassed an awful lot of land in Oklahoma. He died in testate. He had nine children, and this caused a lot of chaos and lack of focus for the homestead. As a result, there were a lot of problems.
The more I’ve learned about the family and the problems that have happened, because there was no estate planning, I realized the importance of putting together a good estate plan. That’s one thing I want to reiterate to a lot of people, the importance of doing.
Also, my father was a big businessman here in Dallas‑Fort Worth. He was Vice‑President, Human Resources at South Incorporation. He had amassed an awful lot of wealth. He went into some other business ventures, and instead of taking a segment of his wealth, setting it aside and preserving it, what I like to call the sacred cow, he deployed it all in new business ventures. He basically died bankrupt.
The one thing that has taught me is that it’s very important that once you have amassed your wealth, amassed what you need to secure your retirement, you do not touch it.
I’m joined here today with one of my partners, who is very dear to me. He’s my brother, David Rigg. He influenced me to go in the Marine Corps. He was a Harrier pilot.
I wanted to talk to him and hear what he has to say about what he’s been motivated by getting into this industry, and also hear his thoughts about what I just said about our family, how that motivated me, and how maybe it motivated him and has influenced him in different ways.
David, thanks so much for being here.
David Rigg: Thanks for having me, Bryan. I sure appreciate it. A Happy New Year to you.
Bryan: Yeah, Happy New Year.
David: Despite the two examples that you have given, which greatly influenced me as well, we’ve also had some very good examples in our family of people that did plan correctly. One would be our grandmother.
Lived very frugally, invested her whole life, was very much a saver. When she passed away, she had a fairly large estate that she could pass onto her daughters. That made a big impact on me of the example of our dad, and then the example of our grandmother. This is what drove me to get involved into this business.
Bryan: Yeah, I hear you. The thing about Ganny ‑‑ Ganny, we called our grandmother ‑‑ she and I actually did have a will. Everything went through perfectly. I wonder if she actually thought about what happened to her father in that whole mess that influenced her.
The interesting thing that I’ve read with a lot of stats, there’s another stat that 50 percent of all people who pass away do not have their wills, do not have their estates in order. I’m sure there are many people listening today that have not done so.
Even if you feel like your estate is not big enough, there are so many things about estate planning that are important about who’s going to be your health care surrogate, who’s going to take care of power of attorney if you have problems that you are not able to function, if you’re in a coma or whatnot. That’s something that I think is very important, because our great grandfather never thought he was going to die.
David: No, and what brought it home to me was when I was in the Marine Corps and flying in a Harrier squadron, the airplane had a fairly high accident rate. We lost a lot of people. I saw a lot of people get killed in the Marine Corps at a very young age.
We were all in our 20s. This is the age when you don’t even think about anything like that. I saw families that, all of a sudden, were thrown into this situation. Was there any planning? Probably not. Probably not when you’re 24 years old.
It drove home to me that we truly never know. We truly never know what could actually happen to us. The quicker we get prepared, the better off we’re going to be.
Bryan: What do you think is most important for people to think about when they’re doing their estate planning?
David: What they want to happen to their assets, and how they’re going to protect the people that they want to protect whether it’s through insurance, or whatever other vehicle you use, doing nothing is the worst course.
As we saw with our family in Oklahoma, doing nothing, some people, worked out very well for them, some people, it did not work out very well for. There was no say. There was no direction from our great grandfather how he wanted that done. Therefore, everybody had to just guess and go with it. It created a lot of conflict.
Bryan: Yes. We’ve heard many stories in this area. One thing that comes to mind that people should be thinking about with estate planning, besides doing the wills, the trust, and the power of attorney, one thing I would encourage many people to think about is how they’re setting up their accounts with their portfolios.
If it’s a retirement account, you can have your beneficiaries listed on it. That’s one form of estate planning, obviously, that we can do. For those elements of estate planning that requires an attorney, we would help you find an attorney to work with to build out your estate planning.
One part of estate planning that a lot of people miss out on that I have found with many of the clients that we deal with is that on the individual account, if you know it’s going to go to a certain person, a lot of people don’t know that you can put a Transfer on Death on the account.
What that enables you to do is, when you pass on, if you have a Transfer on Death on an account, that account will bypass probate and go directly to whoever you want.
That’s one thing, as financial advisors, that we can help people learn about, that I feel, from my experiences over years, a lot of these people don’t know about.
David: That also brings into the question that the way the entire financial landscape has changed over the last few decades. Before, with a defined benefit plan, somebody worked here 30 years, they got their gold watched, they got their pension, they passed away, the wife got the pension.
There was very little planning involved with that particular issue. Now with a divine contribution, the individual is responsible for all of his financial decisions. He may get some guidance, maybe some outlines. If they’re in 401(k), you can pick from these funds. Ultimately, they are responsible for their financial well‑being, their retirement, and everything that happens after that.
That has changed quite a bit from earlier time period.
Bryan: A lot of people are not planning for the retirement. We’ve about a minute left, say when we here before we have to close. Why do you think a lot of people don’t plan accordingly?
David: Because they’re not exposed, they don’t think about it, just like you were talking about your great grandfather. He never thought he was going to die. Even though he lived well into his 80s, he never planned for that. Most people are in the same. It’s comfortable.
It’s comfortable to sit down with somebody and say, “When I pass away, this is what I want to happen.” Nobody likes to think of that. Nobody wants to make those decisions. Nobody wants to go to their wives, and say, “You know what, I may not be here tomorrow. Let’s go make some plan.”
They’d rather go watch the game.
Bryan: That’s reality.
David: That is reality and people don’t like to face it.
Bryan: Thank you again for listening today. Wish you a Happy New Year. Next Sunday, I’ll be here again from 1:00 to 2:00 on KLIF. Please, tune in. We’ll be talking about some of the enduring issues that last couple of months historically for our country tells us so that we could be looking forward to and then also hopefully some of the new realities that we’ll have to be dealing with.
Bryan: Please, tune in. Have a good day.
Securities offered through Broker Dealer Financial Services Corp. (BDFS), Member FINRA & SIPC. Investment advisory services offered through Investment Advisors Corp. (IAC), an SEC Registered Investment Advisor. Rigg Wealth Management is not affiliated with BDFS or IAC. This site is published for residents of the United States only.
Registered Representatives of BDFS and IAC may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a request for information may be delayed. Not all products and services referenced on this site are available in every state and through every representative listed. BDFS and IAC are not involved in the practice of accounting or law. Accordingly, any tax advice contained in this website is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing, or recommending to another person any tax-related matter. Please contact your legal or tax advisor regarding your personal situation. The products offered by BDFS involve investment risks, including possible loss of principal amount invested.