New Year, New Money Habits: Setting Financial Resolutions for 2023

[00:00:00] Sara Lohse: Hi everyone! Welcome to our first webinar of the BFG Webinar series for 2023. We are so excited to have you here. I am Sarah Lohse, I am the host of these, and I’m the executive producer of the Don’t Retire Graduate podcast, and I have with me the host of the podcast and the CEO of BFG Financial Advisors, Mr. Eric Brotman. Eric, thank you so much for joining us today.

[00:00:29] Eric Brotman: Oh, Sara, it’s always fun and I love this topic. We’re gonna have a good time this morning.

[00:00:33] Sara Lohse: We are. So of course we have to start with our amazing disclosure slide and let’s get into it. Now, the topic for today is Financial New Year’s resolutions, but you don’t actually set resolutions, do you?

[00:00:49] Eric Brotman: No, because I think resolutions rarely get they, they rarely get fulfilled or followed. I, I know that when I used to go to a gym and I’m, I’m fortunate to have gym equipment at [00:01:00] home, but even then there’s this resolution thing where “starting this year I’m gonna get in shape” and it’s the perfect, the perfect example of this- but the gyms are full the first week or two of January, and then these folks taper off and sometimes you never see them again. And I think financial resolutions tend to be very similar in that a, a resolution is, is like this big pronouncement, like “I’m going to do this”, and it’s grandiose.

[00:01:25] Eric Brotman: Whereas habit changes can be very subtle. And so to me, changing your lifestyle is or changing your, your nutrition is better than trying to do some crash diet. And so for financials, I, I think there’s, it’s one thing to say, my resolution is “I’m never using my credit card again”. Whereas a habit change would be, “I’m not gonna spend money I don’t have”, or “I’m going to pay this in full every month”, or “I’m gonna make sure that I pay my debt down by $500 a month”. Or “I’m gonna start in, I’m gonna increase my [00:02:00] 401k contribution from 6% to 8%”, whereas a resolution is, “I’m going to max my 401k”, not realizing that means you’re gonna live on your visa card. So I, I, I don’t love resolutions. I do think habit changes are important and it takes time to form a habit. I mean, you, you form habits over months and years, not over, not over a, a cup of coffee and a and a sharpie the week before the new year.

[00:02:23] Sara Lohse: Completely agreed. I have 10 resolutions slash habit changes that I wanna go through with you that I think–

[00:02:32] Eric Brotman: okay.

[00:02:32] Sara Lohse: people listening these are 10 habits that I think everybody can adopt in 2023. So let’s get into them. The first one is pretty simple, break the bad ones. What do you how do you feel about this?

[00:02:45] Eric Brotman: Well in, in, in order to create better habits or or just to create good habits in general, it’s important to break the ones that you’re already in that are creating a cycle of problems. So financially that means if you’re an overspender, setting a [00:03:00] resolution to save more won’t help you if you’re still overspending.

[00:03:04] Eric Brotman: So I think breaking the bad habits, whether it’s overspending, whether it’s not tracking your, your income and your expenses, I think it’s important to know what’s coming in and what’s going out. That does not mean you have to have a budget. On Don’t Retire Graduate, we refer to that as the B word. And I think budgets are, are awful.

[00:03:24] Eric Brotman: Businesses need them for lots of reasons, but households to, to be forced to follow a budget is kind of like being forced to follow that crash diet. On the other hand, if you’re not tracking income expenses, you don’t know what’s coming in or what’s going out, it’s very difficult to change those habits.

[00:03:39] Eric Brotman: So I think that’s important. Another bad habit that’s real simple is not having a plan at all. If you, if you literally have no plan and you’re flying by the seat of your pants and hoping for the best, that is already a bad habit and you’re not gonna break it by suddenly having this perfect plan. You’re gonna break it by starting, by writing some [00:04:00] things down.

[00:04:00] Eric Brotman: A bad habit is procrastination. We all do it. I, I saw a funny meme that said procrastination is a good idea because it means you always have something to do tomorrow and you never have anything you have to do today, which I thought was very, very funny. But the, the, the fact is that procrastination financially takes away the most important variable in your wealth building journey, which is time.

[00:04:24] Eric Brotman: It’s the one thing that does the most either damage, or has the most benefit to you is using that time. So procrastination’s a problem and then another bad habit that people have is, is truly just underestimating the needs that the, that, that we all have and some of us confuse needs and wants. All, all guilty raise your hand. I’m there. Sometimes it happens. But underestimating your needs and underestimating what you, what life is going to cost, particularly when your income either is reduced because you go part-time or do consulting, or whether it’s because you are you’re [00:05:00] retired in, in full and you no longer have a paycheck and it is a, a habit that that is important to break early when time’s on your side.

[00:05:10] Sara Lohse: Completely agree. Now I, I didn’t say this at the beginning, so I’ll say it now. There is a questions tab. If anyone has questions as we go through, throw them there and we will get to them either during the presentation or at the end.

[00:05:22] Eric Brotman: Yeah. So if anyone would like to share, if anyone would like to share their bad habits with the group, you can do so anonymously and we can talk about them as long as they’re financial.

[00:05:31] Sara Lohse: Yes. I’m also gonna add in the chat if anyone has set a resolution. Let us know what your, what your financial resolution is, or just your New Year’s resolution and if you actually think you can stick to it.

[00:05:43] Sara Lohse: So now let’s go on to the second one. And this is having a written plan. People’s I’ve heard it said that a, a goal without a plan is just a dream. So I think having that everything written down is really important. Do you agree?

[00:05:58] Eric Brotman: Well, I absolutely [00:06:00] do, and I, I set various goals and various plans for myself on an annual basis, and I encourage people to do that.

[00:06:07] Eric Brotman: I certainly have a business plan for what I’m doing professionally. I have a personal plan for the things that are most important in my life. I call it a personal energy plan, and it’s things that, that sort of are really important to me, whether it’s relational or emotional or mental or physical.

[00:06:22] Eric Brotman: If you don’t reduce it to writing, it’s, it’s, it’s very much just a dream. It’s an idea. And once it hits paper, even if you’re the only person to whom it’s accountable, it doesn’t have to be shared with the world. It can be, but it doesn’t have to be. But you’re accountable, at least to yourself. And so I think if you already have a written financial plan, update it regularly because your, your life changes, your income changes, your expenses change. What’s important to you changes and your needs and wants shift sometimes. But if you don’t have a written plan, begin with one. One of the easiest ways to create one is to [00:07:00] use the workbook that that we published for Don’t Retire Graduate. That is, that is 20 steps, basically, to creating a financial plan.

[00:07:08] Eric Brotman: And if you go through those exercises, they’re very simple and they force you to think about things including the B word to an extent. But they force you to think about some different things in different ways, and you’ll wind up with a plan, even if you haven’t hired somebody to do it. But until you have a plan, you’re, you’re less likely to stick to it.

[00:07:23] Eric Brotman: And I also really like the idea of having an accountability partner. And I think that makes sense too. I mean, I have accountability partners for just about everything. Not because I’m not self-disciplined, but because I’m motivated by not disappointing someone else, which I, that is just understanding myself, knowing that if I tell my personal trainer, “not only will I make our appointment, but I will not have had a cheeseburger first”, that’s already a victory.

[00:07:49] Eric Brotman: And, and it helps to have that kind of, that kind of accountability partner for me.

[00:07:54] Sara Lohse: Agreed. And now I want a cheeseburger.

[00:07:56] Eric Brotman: Me too.

[00:07:58] Sara Lohse: All right. So the third [00:08:00] one here, I it’s consider hiring professionals. How do you feel about doing things on your own versus hiring someone to do it? When should you consider hiring?

[00:08:10] Eric Brotman: In, in life in general, not just financially, we make decisions every day about what we’re going to do ourselves and what we’re going to hire others to do. Sometimes it’s, it’s, it’s basic. It’s things that maybe we can’t do. You know, you hire a dentist because you can’t do your own, your own root canal. That part is kind of obvious, but there are other things we’ll hire people to do that we could absolutely learn to do.

[00:08:35] Eric Brotman: You know, if you’re getting new tires for your car, you could learn how to do that, obtain the tires, learn how to do it, put them on the car, and some people do. But for most of us, that would be the greatest undertaking ever. And I’m guilty there too. And so at some point you have to determine what are you good at, what are you not good at?

[00:08:54] Eric Brotman: What do you enjoy doing? What do you not enjoy doing? And then what do you have time to accomplish? [00:09:00] See, I think financial planning, there’s nothing that a financial advisor does, abs– literally absolutely nothing that you can’t do yourself. That said, people don’t, and the reason that people don’t is some of the accountability we talked about already.

[00:09:16] Eric Brotman: It’s also because folks don’t know where to start or they’re busy. If, if you’ve got a, a full-time job or you’re running a company or a household, you’ve got three kids and pets and volunteer stuff and parents getting older and all this stuff going on, you’re busy. You’re not gonna look at your financials nearly as often as maybe you could or should.

[00:09:39] Eric Brotman: And even if you did, you might not have the same– you won’t– have the same acumen that someone who does it all day long will. So I think the benefit of working with financial advisors often is the behavioral and the accountability, but it’s also the abdication of the responsibility for doing your own heavy lifting.[00:10:00]

[00:10:00] Eric Brotman: It’s still your plan, it’s still your money. I, I don’t tell people, you know, put your head in the sand and hope that we’ve got this. It’s very much a relationship and a collaboration, and by, by structuring it that way, I, I think you, you can take folks you, you can meet people where they are, which we talk a lot about when you talk about financial literacy.

[00:10:19] Eric Brotman: And you can also make sure that you’re, that you’re, the shop is being watched, so to speak. You know, there, there’s plenty of things we can do ourselves in this life. If I didn’t do this for a living, I would surely have someone doing it for me because I’d be just as focused on what I am now in, in some other direction.

[00:10:36] Eric Brotman: If I was a a lawyer, I’d be focused on doing legal work and I’d have somebody else helping me with my financial. As it is, I’m in the financial world and I have somebody else helping me with my legal work. So, and accounting and all the other various things that, that play into this.

[00:10:50] Sara Lohse: Gotcha. So the next couple there, we actually are gonna be talking about some things that you can be doing yourself.

[00:10:56] Sara Lohse: So we’re gonna give some examples of what those things are that you [00:11:00] don’t necessarily have to hire a professional for. The first one of that, knowing your number what do you mean when you say someone needs to know their number?

[00:11:08] Eric Brotman: Knowing your number means what amount of resources, of working assets will you need to be truly financially independent, to have true financial freedom. And those words are heavy. They mean different things to different people. In fact, the word retirement is heavy. To some people, retirement means working two jobs instead of three. So everyone’s got a different definition. Some people think of retirement as a, a yacht in the Mediterranean, and other people think it’s part-time.

[00:11:39] Eric Brotman: So but knowing your number, If you had this much abundance, if you had this this type of working asset account in all the various places such that work became fully optional– to me, financial independence and even retirement are synonymous with work being optional. [00:12:00] It doesn’t mean sit on the couch all day eating chips and watching daytime tv.

[00:12:04] Eric Brotman: It means being in a position to do whatever you want to do. And to grow up and be whatever you want to be, and knowing your number is a fundamental, quantitative way to look at that. And people have no idea what this is. And especially young people. Sarah, I’ll pick on your generation because it’s so simple for me.

[00:12:24] Eric Brotman: But, but you, but, but young people have no idea what inflation will do to the value of a dollar. They’re learning it this year and the hard way, frankly. But over the next 30 or 40 or 50 years, the amount of money that you need to build in order to live financially independent, adjusted for a reasonable inflation rate is enormous.

[00:12:48] Eric Brotman: And the only way to get there is like eating an elephant, one spoon at a time. The only way to get there is to start early and to be consistent and to make sure that you’ve got that track and that you’re [00:13:00] on that track to know your number and work toward getting there. And that comes back to the written plan too.

[00:13:06] Eric Brotman: Yeah. I’m not gonna put you on the spot and ask you what your number is. It’s not like we, we, you know, we don’t walk around knowing our numbers. Half people don’t even know their phone numbers anymore– they’re all in the phone. This is a number that we should all be familiar with. You should have an idea of what that target is and hopefully a plan to how to reach it.

[00:13:25] Sara Lohse: Yeah, I have no idea what my number is, but I’m pretty sure it’s going to be more numbers than my phone number. And that’s terrifying.

[00:13:32] Eric Brotman: And it should be. It should be. It is. Yeah.

[00:13:35] Sara Lohse: And how, is this something that is easy to calculate? Is there a tool that you can calculate this for you?

[00:13:40] Eric Brotman: Well, there, there’s, it’s, there’s a, a calculation of it in the book.

[00:13:44] Eric Brotman: And, you know, functionally, literally we put a math formula in the book just to scare people. But it’s actually not a difficult formula. It’s, it’s that you put away X dollars, whatever that number is for Y number of years and you earn Z [00:14:00] percent on it over that period of time, and that’ll show you what your nest egg is.

[00:14:04] Eric Brotman: And that nest egg, you can then look at what is a, what is a reasonable withdrawal rate from that nest egg. And we use 4% as a rule of thumb, but rules of thumb are dangerous. For some people it should be 2 or 3%. For some people it can be more. It’s based on age and health and family and all kinds of dynamics.

[00:14:21] Eric Brotman: And which is one of the reasons why I don’t encourage people to try and do this themselves, but you can figure out what track you’re on and how much wealth you’re going to build. What you then have to figure out is what is your current lifestyle? And so we go through these exercises. It’s in the book, it’s in the workbook, and it talks about here’s what you earn and here’s what you’re currently saving or putting away, so this is what you’re living on.

[00:14:40] Eric Brotman: Then we inflate it and we compare the two, and I just, I just did algebra, calculus and gave everyone a headache. But the, the calculation’s actually not hard if you go through it on paper.

[00:14:53] Sara Lohse: Yeah, we, we both know my math skills are nonexistent. So I’m gonna let you do that for me one [00:15:00] day, but I’m not going to try to do it myself.

[00:15:02] Sara Lohse: So the fifth one we’re let’s talk about incremental changes. You had mentioned how do you eat an elephant, one bite at a time.

[00:15:10] Eric Brotman: Mm-hmm.

[00:15:12] Sara Lohse: I, I know we like to think of that kind of the same way with financial planning, and what are these incremental changes that people can start making?

[00:15:19] Eric Brotman: So when we look at a, when we look at a, a, a, an individual or couple or family’s financial plan and we look at the targets we will first build a current plan and say, this is the path you’re on.

[00:15:31] Eric Brotman: This is where you’re headed, given some reasonable assumptions. And then we’ll build the “ideal” plan. And I put “ideal” in quotes, but ideal is the plan that so long as you are able to follow it, it will get you to financial independence at a given age. Given the same assumptions. I mean obviously it’s not linear, it’s exponential.

[00:15:50] Eric Brotman: But if we put those two side by side and I say, “Sarah, you’re putting away $800 a month, but you need to [00:16:00] be putting away to, for a perfect plan, $8,000 a month”. That’s usually when I get a look of sheer terror and you say, “I can’t possibly do that”. And so I believe the incremental changes are, if you were to, to have a, a spectrum here and you started at, at the zero mark or wherever you are today, and you look at it with the X on that graph, if you will, and that’s perfect.

[00:16:25] Eric Brotman: You’re gonna be somewhere along that line. You’re gonna be somewhere between where you are now and what’s perfect. Inch forward on a regular basis every year, perhaps, to get closer to that. You, you can’t go from zero to 60 in one second without whiplash. This is no different. So if you’re at that 800 and you know, you have to get further than that, but you can’t do it overnight because it would rock the boat, it would bankrupt you to try and save or whatever it is.

[00:16:50] Eric Brotman: Get from 800 to 900 or 1000 or 1200 or whatever that math is. Always be moving in that direction incrementally. You know, you, you can’t do [00:17:00] all of this at once. You might walk away from a, a financial planning session and, and have 13 to-do items. You can’t do them all Wednesday. So prioritizing, figuring out what do we need to do first?

[00:17:12] Eric Brotman: And what do we need to do in full because it’s critical or urgent or time sensitive, and what would be a best practice that we’ll get to it, but it’s not happening today. And then how do we get closer to that, that ideal mark? And there are lots of ways to change that math. One of ’em is I could say, well, that’s because the reason you’re struggling with this is because you wanna retire when you’re 42.

[00:17:33] Eric Brotman: If you just work till you’re 93, you’ll be fine. And so now we’re somewhere between 42 and 93. And let’s try and shrink that to something you can live with. So same kind of idea, but do this gradually over time. You cannot immediately tackle all of this at once. Just, and, and I, I use a lot of I use a lot of exercise analogies because they just make sense.

[00:17:55] Eric Brotman: You, you can’t go from buying your first pair of running shoes to the New York Marathon in a [00:18:00] week. Doesn’t work. You have to, you have to start doing these things incrementally and financially is the exact same way.

[00:18:08] Sara Lohse: Makes sense. Also makes me terrified for my future. So thank you.

[00:18:13] Eric Brotman: Just go run the marathon, you’ll be fine.

[00:18:16] Sara Lohse: Mm-hmm. Yeah. I’m gonna run away from that.

[00:18:20] Eric Brotman: Uhhuh.

[00:18:20] Sara Lohse: So number six, you always say that you don’t have a crystal ball, and yet you’re telling people to read the tea leaves. So are we supposed to be psychic?

[00:18:31] Eric Brotman: Well, first of all, I do have a crystal ball. It’s broken though, and you can’t get parts for it. There is no….

[00:18:36] Sara Lohse: oh, okay.

[00:18:36] Eric Brotman: So I can’t fix it, but it’s there. I have it. Reading the tea leaves to me is not about predicting the future, it’s about understanding some trends. It’s about realizing where we are in 2023 and how that differs from 2022 or 2015 or 1984. And so for 2023, the things that are [00:19:00] on either on our plate immediately here as we start the year or that are clearly trending, there’s a few– 1) secure Act 2.0 just passed in in Washington and that’s changing significantly the retirement plan landscape for the United States and for American savers. And so it, it provides additional catch up opportunities for folks in their early sixties. It changes the way those catchups work. It changes the required minimum distribution years. It essentially, we’re, we’re working towards solving a, an interesting problem, which is that when the government set up most of these retirement rules, no one lived to 100.

[00:19:40] Eric Brotman: And so you know, your plan was meant, your required distributions were meant to have you broke at a hundred, and the problem is people are turning 111. Not a lot of ’em- I don’t plan to- but you just never know. And so having this new legislation does change some of the things that we can do or that we have to do.

[00:19:57] Eric Brotman: We had the largest increase in [00:20:00] contribution limits to various plans this year that we’ve had in my 30 year career. And so that’s an opportunity, particularly for folks who are trying to get closer to that ideal mark. There’s opportunity to do it. Another thing about 2023 is for the first time in decades, cash is an asset class again.

[00:20:19] Eric Brotman: You know, cash looked like a waste of time. Having money in a, in a money market or certificate of deposit or short term bonds or other cash type instruments felt kind of like you were burying it under the swing set in a coffee can. It made no sense because it paid nothing and you were falling behind. And that’s not to suggest that cash is going to keep up with inflation, but as an asset class, it now means that if you’re sitting on a bunch of money in a savings account somewhere, earning 0.01%.

[00:20:47] Eric Brotman: It is possible without taking on significant risk to have that earning 2 or 3 or 4%. And I remember the days when, when CDs were paying double digits, and I’m not [00:21:00] yearning for that. I just know that it, it’s a, it’s something that happens. And so being aware that some of your cash on the sidelines might be deployed now in a reasonably low risk way, but could still enhance your, your wealth building is a big deal. What else? 2023 Inflation. We haven’t had inflation in this country since Jimmy Carter was president, but here it is, and it’s in a big way. And so what does that mean? It means you’re spending more at the grocery store and the gas pump.

[00:21:27] Eric Brotman: I went out to dinner recently and couldn’t believe how expensive it was just to go out for a, for a basic dinner. And everything’s gotten more expensive, and as a result, that means our dollars are each worth less than they were before. The bad news is our dollars are worth less than they were before.

[00:21:42] Eric Brotman: The good news is we’re getting a better income on our cash. A lot of people enjoyed cost of living adjustments on, say, social security or, or even getting a raise at work. Some of the cost of living adjustments were bigger. So yes, inflation took a bite out of the value of a dollar, but lots of us [00:22:00] have additional dollars now, and that means doing some tax planning.

[00:22:04] Eric Brotman: And so that brings me to sort of the last thing in 2023. Looking at income taxes in a very, in a very sophisticated way. And that’s because we’re seeing unbelievable migrations in this country from states where income taxes are very high to states where income taxes are either very low or there isn’t one.

[00:22:23] Eric Brotman: And as a result, it, it allows American taxpayers to create their own arbitrage. Arbitrage is a big, fancy word for a way to game the system legally. So what that means is that means that you can be in a high earning state with, for example, a high income tax, take deductions for your, for your savings, and then retire in a place where you’re not paying taxes on the growth or on the on the withdrawals.

[00:22:49] Eric Brotman: And you’ve created a savings of what could be as much as 13 or 14% depending where you live. So that is something, migration is something that’s very, very real. Figuring out where [00:23:00] tax rates are around the country is a, a, it, it’s, it requires some planning and it doesn’t mean everyone should start packing.

[00:23:06] Eric Brotman: It does mean we have to think about it. And federally, you know, our income tax rates right now are still very close to all time lows in terms of their brackets. But almost nothing’s deductible. You know, as of 2020, just about 90% of the population doesn’t, doesn’t itemize their deductions anymore, which means some of the things that we’ve historically been trained to do because of tax benefits, like mortgage interest might not, might not be deductible now. Real estate taxes some of the things, charitable deductions in some cases aren’t deductible. They’re not even charitable deductions, they’re just charitable contributions. And the good news is people are still being… philanthropy has not gotten hurt by that tax change. It, it appears that people who are charitable are still charitable regardless, which is lovely.

[00:23:58] Eric Brotman: But there are strategies to [00:24:00] use to group various things and to do some real tax planning. And so I see the tea leaves as income tax rates are gonna be higher, federally and in a lot of states over the next 5 to 10 years, or beyond. Yeah, income and inflation. I don’t know where inflation’s going. I don’t have, like I said, the crystal ball has no parts.

[00:24:18] Eric Brotman: I don’t know where it’s going, but I know we’re, we’re approaching sort of a normal scenario here with interest rates. I mean, if mortgages are at 7%, that’s historically pretty reasonable. That’s pretty normal. It’s just that we’ve been spoiled by 2.5 and 3.5% for so long we’ve forgotten. But the house I grew up in was financed at like 15%. It’s like buying a house-

[00:24:39] Sara Lohse: Ouch.

[00:24:39] Eric Brotman: It’s like buying a house on a Visa card. Fortunately, I wasn’t old enough to pay that, but my parents were, and it was absurd when you look back on it, and of course that creates a refinancing about every three years, you refinance and so forth.

[00:24:52] Eric Brotman: But nonetheless, the the tea leaves, it does not mean predicting the future. You’ll notice nothing here was about the markets. [00:25:00] I don’t want to predict what equity markets are doing. No one can, and in fact, if someone tells you they can- run. Because they can’t. If anyone could do that, number one, they’d be on a beach with an umbrella in their drink right now.

[00:25:14] Eric Brotman: And number two, the giant investment firms would’ve already hired them and had them on the front of every magazine in the in the world. It can’t be done. It can happen occasionally, but it can’t be done with any kind of predictive way. So none of this is about markets. It’s all about trends and directions that we’re in though.

[00:25:34] Sara Lohse: Yeah. When I bought my house earlier this year, I closed at a 4.9 interest rate, and I felt like I was getting personally attacked. So I, I miss being spoiled with the 2%. I would’ve liked that a lot better. But I cannot imagine a 15%.

[00:25:50] Eric Brotman: Well, and and what’s interesting now is folks who are in homes that are 2 or 2 1/8 or 2.5 percent basically can’t move. Because to sell a house with a [00:26:00] mortgage on it to then buy a house that requires a mortgage, since the mortgages aren’t assignable, they can’t move with you.

[00:26:07] Sara Lohse: Yeah.

[00:26:07] Eric Brotman: No one wants to sell a house at 2 1/8 and then go buy one at 7%. So it’s really affecting the real estate markets. The only folks buying houses right now are either folks who have to, for one reason or another, relocations or what have you, or folks who are paying cash, who don’t care what the mortgage rates are, cuz they’re not borrowing. You know, so folks are leaving new New York and California, selling their homes for absurd amounts of money, and then going and paying cash someplace else and having money left over.

[00:26:33] Eric Brotman: That’s great for those folks. But for the rest of of America, that doesn’t work.

[00:26:38] Sara Lohse: True. Now I’m gonna pause here cuz we did get a question.

[00:26:42] Eric Brotman: Okay, great.

[00:26:43] Sara Lohse: And it makes me think of something that you say all the time, which is “financial advice is not one size fits all”. And it sounds like this person may have gotten some of that one size fits all fits nobody advice.

[00:26:55] Eric Brotman: Uhoh.

[00:26:56] Sara Lohse: So she, she says, “some people think that putting 2000 per month or [00:27:00] week in the bank is a good idea. What do you think about that? And what if you don’t have enough to put that 2000 away?”

[00:27:07] Eric Brotman: Well, I think the 2000 is arbitrary. For someone making $3M a year to put away $2,000 a month would be kind of an epic failure. For somebody making $30,000 a year to put away $2,000 a month would be extraordinary and basically impossible.

[00:27:23] Eric Brotman: So I, I think that anytime you quantify something like that, it won’t fit anyone- it’ll fit one person maybe, but it won’t fit the masses. I think it’s better to look at your savings rate as a percentage rather than a dollar figure because the dollar figure will mean so much different. You know, the dollars that Sarah puts away and the dollars that I put away if they were the same number of dollars would be different to us cuz we’re at different stages in our lives and careers.

[00:27:48] Eric Brotman: So I think it starts with a percentage. And and I, I really despise rules of thumb, but if pressed, I would say getting to at least 15% [00:28:00] where you’re living on 85% of what you make is a, an admirable goal. It doesn’t mean you’re gonna hit your number. We talked about that before. It means that if you’re doing that long term, particularly if you start when you get your first job, if it means having three roommates instead of two, so that you can put some money away when you’re young– do it. Because the, the way that that will work with all those years behind you makes a huge difference. But, you know, $2,000 a month to some people sounds like all the money in the world and to other people sounds like their Verizon bill. Like, I, I don’t, everybody’s different. So I, I, I think it should not be a, a, a number figure so much as a percentage of what’s coming in.

[00:28:43] Sara Lohse: And we’ve talked about this before, there are ways to make that 15% a little easier to reach. She also, she says, thank you.

[00:28:51] Eric Brotman: You’re welcome.

[00:28:54] Sara Lohse: And so that’s, when we say 15%, that’s not necessarily all coming out of your pocket. That can [00:29:00] also include some other things. Can you talk about that?

[00:29:03] Eric Brotman: Sure. If you’re, if you work for a company that has a 401k, for example, that offers a match– let’s say you put away 6% and the company puts away 3% of your compensation for you, well, that’s 9 of your 15. It doesn’t mean that you have to necessarily put away 15 cents of every dollar you actually take home.

[00:29:24] Eric Brotman: And you’ll notice we’re not necessarily talking about gross income or, or net income. It, it, it’s really from all sources. So if your employer has a match on a health savings account or on a 401k, or if there’s some gifting happening, intrafamily gifting or other things, and every family’s different. I, I, I think getting to that number matters. If you have a stock purchase plan and you’re able to be buying shares of stock in your, in your company at a discount.

[00:29:50] Eric Brotman: The amount of the discount, frankly, is part of your savings rate as well, because it’s money that immediately goes to your balance sheet without you writing a check for some of it. [00:30:00] And so, not to get overly complicated, but the, the, the amount that you put away should be coming from the cash inflows into your household, not the household income.

[00:30:13] Eric Brotman: And the difference there is income might be, this is my gross salary, this is my check. But cash inflows would then include all of those other sources, matches, or incentives or, or other things. And so you want to do a percentage of the cash inflows, not a con, not a percentage, just of your income, but for, for a lot of people, the, you know, you’re talking 3 or 4% of the 15 and that, that certainly makes a difference.

[00:30:39] Sara Lohse: And I also wanted to mention there it’s not necessarily that all that 15% has to go into a savings account. We’re also talking things that go towards debt payment. Is that correct?

[00:30:49] Eric Brotman: A hundred percent. So, and it’s not the debt service, it, the interest doesn’t count toward this savings rate, but excess principle does.

[00:30:58] Eric Brotman: So if you have a, a [00:31:00] student loan and your payment is $400 a month and you decide you’re gonna send $600 a month to chip away at that, the 200 a month that you’re putting towards that excess principle counts toward your savings rate, in my opinion, because it’s money that could go elsewhere. And now it comes down to an interest rate conversation.

[00:31:20] Eric Brotman: If your student loan is at 0.8% and everyone just rolled their eyes, cuz that doesn’t exist, but if it did and it was at 0.8 or you could put that money someplace growing at 3%, you’re better off doing the 3%. But if the student loan is at 7% and you’re earning 3% in the, in the money market, you’re better off paying down the loan.

[00:31:38] Eric Brotman: So that’s, that’s why we absolutely would count that because that’s still growing your balance sheet. It’s just instead of making your assets larger, it’s making your liabilities smaller, which has the same, same exact dollar for dollar impact on your net worth.

[00:31:54] Sara Lohse: Great. So that question actually set us up for the next one on our list.

[00:31:58] Sara Lohse: Cause when we talked about [00:32:00] putting money away, this isn’t something you want people to think about every month or every week. This is something you wanna automate, correct?

[00:32:08] Eric Brotman: At all times. Because there is, especially when you’re talking about buying something that involves volatility. If you’re talking about, you know, adding to a, to a, a 401K or a brokerage account or these other things– if you have to decide if this is a good month to do that or not it, it will freeze you in your tracks and it will cause you psychological torture. And so I beg you not to put yourself through that. When you’re, when you’re doing regular deposits, whether it’s that your paycheck is being split and $500 a check is going to savings and the rest is going to your checking for your bills, or whether you’re putting 6% into your 401k or other things, or whether you’re just adding $500 a month to a, a college plan for your kids or your, or your own savings– automate it.

[00:32:58] Eric Brotman: Let the time work on your [00:33:00] side and don’t torture yourself. If you’re saving that 15% and you’re living on the 85% and it’s automated, then it feels like you’re living on a hundred percent of what you bring in, even though it’s only 85% of what you’ve earned. And so that’s, that’s definitely a good thing.

[00:33:14] Eric Brotman: The psychological torture is not worth it. It, it, it, I can tell you any day of the year, any year of my life, why it’s a good day to invest or why it’s a bad day to invest. It’s a silly, silly exercise to try and engage in and understanding that it’s, it’s always better to invest today than it is next week or next month or next year, simply because time’s on your side, and there’s certainly exceptions to that.

[00:33:41] Eric Brotman: And that goes back to the tea leaves. There are certain times where you don’t wanna do certain things, but generally, if you are in a reasonable portfolio and have a reasonable plan and you’re dollar cost averaging and adding to it every paycheck or every month– make it automate. I would also do the same thing with certain bills.

[00:33:59] Eric Brotman: Some people hate [00:34:00] this because if your bank balance is low enough that you’re frightened that some of the bills will bounce, don’t do this. I understand that. But if you have enough of a, of a cash cushion, that emergency fund that I like to think of as a false horizon. So if your, if your goal for an emergency fund, let’s say it’s $10,000, and right now you have $12,000 in your bank account I would look at that false horizon, like a pilot in training that says if I drop below $10,000, it’s like hitting the ground and the plane blows up, right? But of course it’s not real. It’s just sort of that trial area. Whereas if you only had $2,000 in the bank and you spent three, you would in fact bounce something. So paying, paying your bills automated is helpful if you have either predictable deposits or a comfortable safety net. If you don’t, then sometimes you have to time it.

[00:34:53] Eric Brotman: I know there are folks out there sort of robbing Peter to pay Paul or deciding which bills to pay first or, or which ones can be paid the first week of the [00:35:00] month or the second week of the month. And I don’t downplay the reality of that. Not everyone can automate everything. Despite what it says on this slide, automate everything you can that’s right for you.

[00:35:11] Eric Brotman: And in keeping with that, we talked about sort of that 15% and we talked about automating things. Paying yourself first is one of the tennets, one of the very first tennets of building wealth. And that means rather than saving whatever happens to be left at the end of the month after you’ve paid your bills, it means peeling that off at the top and sending it to your retirement plans, or savings plans or excess debt or whatever it is first. It’s called paying yourself first, and it forces you to learn to live on less rather than to hoping there’s something left over at the end of the month and then deciding what to do with them.

[00:35:49] Sara Lohse: Yeah, it’s definitely something that’s important and that also goes back to one of the first things we talked about, which was tracking and keeping track of what you spend and what you’re, what you have incoming, what you [00:36:00] have outgoing, so that you don’t get to that point that it bounces cuz it wasn’t in your account.

[00:36:06] Sara Lohse: So definitely an important thing to remember when you’re automating is make sure you are also keeping track of what you’ve got and what you’re spending.

[00:36:13] Eric Brotman: And I can tell you quite, quite candidly that during my life as an adult person for a number of years, I felt close enough to the vest that I was afraid to automate any kind of bill paying because I was so close to the vest and because I didn’t know what was coming and, and when.

[00:36:30] Eric Brotman: And tracking systems definitely help. But it also helps to have built that, that safety net. So we talk about sort of the moat around your castle a little bit. We talk about the, the, the, the things you do to protect yourself. One of the simplest things you can do to protect yourself is just maintain a bank balance so that that stress and anxiety doesn’t have to be there when a bill comes in.

[00:36:51] Sara Lohse: Absolutely.

[00:36:53] Sara Lohse: So that brings us to number eight. Paying attention to credit. Credit is something that very few people, [00:37:00] understand or check or anything. So why is it important to pay attention to it and what should you be paying attention for?

[00:37:10] Eric Brotman: Credit, the, the credit card companies and the credit bureaus, there are three major credit bureaus in the United States.

[00:37:16] Eric Brotman: You have Equifax, Experian, and TransUnion. And you have a credit score, and that credit score essentially is measuring your credit worthiness when you go to borrow money, whether it’s at at at a store because you want to finance a computer, or whether it’s a car or whether it’s a house or or anything else. Your credit worthiness is important because in the absence of good credit, if you’ve missed payments or you’ve been late or you’ve defaulted on something, and your credit score is low it means you will pay more for credit when you get it, if you can get it at all. And so paying attention to your credit score matters, but it’s more than just your credit score. And, and by the way, I couldn’t calculate a credit score for you if I had to, because to [00:38:00] me, it’s, it, it, it feels almost arbitrary.

[00:38:03] Eric Brotman: Mine goes up and down every month just based on what I spent on MasterCard that month, even though I pay it in full- it still impacts my credit just because the day they decided to snap it, there was X amount of X amount of, of, of balance on the, on the credit card. So don’t get so hung up on the score.

[00:38:19] Eric Brotman: They’re important, but more importantly is to make sure that number one, there’s no fraud. Number two there and, and, and no major mistakes or errors. Also that you are doing the things you can control. You are managing and monitoring the credit that you do have, you are treating it very carefully. And by the way, the time to borrow money– and this is gonna sound really fun, but it’s true– the time to borrow money is when you don’t need it. Because once you need it, no one wants to lend it to you.

[00:38:48] Sara Lohse: Yep.

[00:38:48] Eric Brotman: And so if you have the ability, if you own a home and you have equity in your home, having a, a line of credit on your home is a wonderful best practice as an emergency vehicle. Not because you’re [00:39:00] gonna go out and spend it, and you have to have the discipline not to.

[00:39:03] Eric Brotman: The idea here is it should cost you nothing or almost nothing to establish, but it means there’s a place you can go if you need money quickly, because suddenly there’s a leak in your roof. And so having a home equity line of credit, having a line of credit maybe against your securities portfolio. A securities back line maybe against your life insurance.

[00:39:22] Eric Brotman: There are ways to do this, and the time to borrow is when you don’t need the money because it it, people can’t wait to lend you money when you don’t need it, because that means you’re worthy of it. But if you’re in a bind and you need money, they’re either gonna prey upon you or they’re gonna tell you thanks, but no thanks.

[00:39:38] Eric Brotman: So establishing not only a good credit score, but making sure you have enough of a credit line to handle what potential emergencies could arise for you, whether it’s housing or healthcare or otherwise.

[00:39:52] Sara Lohse: Absolutely.

[00:39:54] Eric Brotman: Oh, and just, just to add to that, if I can, Sarah…

[00:39:56] Sara Lohse: Go ahead.

[00:39:57] Eric Brotman: A couple of things that you can do to pay [00:40:00] attention to this.

[00:40:01] Eric Brotman: You’re allowed to pull your credit scores from the bureaus every year and every year for free. You can also use credit monitoring services that will send you updates when these change. Some of them cost money, some of them don’t. So if you have a credit card, your credit card company likely will offer you one of these at no cost.

[00:40:18] Eric Brotman: If you are gonna pay for one, don’t worry about so many of the bells and whistles, they will try and upsell you and you’ll wind up with this, this, this crazy package that actually costs a bunch of money. The idea here is just to get updates. I, I tell you, I like Credit Karma because it’s a free solution as a, but, but, if you are, if you have a family member or someone close to you, maybe an ex-spouse or maybe a a, a, a grown child with maybe a gambling issue or a substance issue or other things where there could be some risk to you, then having additional protection there might make sense.

[00:40:53] Eric Brotman: You might want to, for example, freeze your credit report so no one can steal it. You might want to have you might wanna set certain limits or [00:41:00] other parameters on it. You can also get identity theft insurance coverage. Through your homeowners or renter’s coverage. It’s really inexpensive and it just makes sense because unfortunately this is happening to folks every day and it’s not necessarily because of their own bad behavior.

[00:41:16] Eric Brotman: I figure if somebody wants to badly enough and they can hack the Pentagon, they can hack you or me or anybody. So it sometimes it’s bad luck, not bad planning, but at least make it difficult and at least insure yourself and protect yourself if it happens to you.

[00:41:33] Sara Lohse: Great point. So everything that we’ve talked about so far has been very just kind of simple and fact based.

[00:41:40] Sara Lohse: But let’s talk a little bit more about things that are more mindset. So don’t retire, graduate. One of the questions that you ask every single guest is, what do you wanna be when you grow up? And I know the last time someone asked me this, I think I was seven. My answer was, princess, if you [00:42:00] ask me today, my answer is still princess.

[00:42:01] Sara Lohse: But no one seems to ask. So why do you like to ask people this when they’re in their fifties or sixties or any age?

[00:42:11] Eric Brotman: For so many reasons, the the biggest of which is that, that we aren’t asked this anymore. And if you think about retirement, in its traditional sense, retirement is retreating, surrendering, disappearing, becoming irrelevant.

[00:42:26] Eric Brotman: It sounds awful. So we liken it to a graduation and we liken it to the next chapter of your life. We liken it to the next form of maturity. I use that word loosely, but we, the, the next step of your development in whatever way, and figuring out where you want to go and what you want to do, and having it be moving towards something rather than the absence of something.

[00:42:48] Eric Brotman: The, the retreat. And so when I ask people what they want to be when they grow up, they, they, there’s a, a universal reaction from adult humans which is first to sort of laugh about it cuz [00:43:00] they can’t believe they’ve been asked that. And second to then really get pensive about it. And, and to opine a little bit.

[00:43:05] Eric Brotman: And I’ve heard some in incredible answers on the show and sometimes it’s, you know, I wanna be the best version of myself,

[00:43:14] Sara Lohse: mm-hmm.

[00:43:14] Eric Brotman: which is true, although I think it’s a cheap answer for the record. Some people have said they wanna be Tinkerbell.

[00:43:21] Sara Lohse: Yep.

[00:43:21] Eric Brotman: I don’t know how true that is, but I also am not a hundred percent sure that that’s relevant to the rest of us.

[00:43:27] Eric Brotman: So there, somewhere in there there’s this idea you have for yourself and it’s intensely personal. And so I, I don’t mean to, to put down anyone’s answer to that cuz they’re all awesome. And I thought the Tinkerbell answer was especially cool when I heard it, cuz I was like, okay.

[00:43:40] Sara Lohse: Oh, that was the, that was the Queen Tamra Andress. That was one of my favorite answers we’ve ever gotten.

[00:43:46] Eric Brotman: I, I, I think very highly of her and I thought it was a great answer and I didn’t know what to do with it, so she stumped me, which is always fun. But thinking about what your next chapter of life is going to be, it doesn’t matter whether you’re 20 or 40 [00:44:00] or 83.

[00:44:01] Eric Brotman: If there’s something that you want to do or something you want to evolve into, you’re still growing up and I, I don’t think growing up and adulting are the same. I think adulting means paying bills and standing in line at the DMV. I think growing up means evolving and so let’s not confuse the two. I tell my 13 year old daughter regularly not to grow up cuz it’s a trap.

[00:44:26] Eric Brotman: What I really don’t want her to do is take on adult responsibilities or burdens before she has to. But growing up to me is different than growing old. I, none of us wanna grow old necessarily, but I think all of us wanna grow up a little bit and try that next thing. So that’s why I think one of the resolutions, if you wanna make a resolution you can stick to, it’s to think about this question because this doesn’t require a radical, a, a radical set of action steps necessarily.

[00:44:55] Eric Brotman: This allows you to dream a little.[00:45:00]

[00:45:00] Sara Lohse: Someone did send kind of a what they wanna…

[00:45:03] Eric Brotman: okay.

[00:45:04] Sara Lohse: Kind of more what they wanna do when they grow up, but,

[00:45:06] Eric Brotman: okay.

[00:45:06] Sara Lohse: She wants to learn more about trading in the stock market cuz she has no idea where to start. And I think that is true for most of us.

[00:45:14] Eric Brotman: Well, it, it is true for most of us and most of us shouldn’t do that in the first place.

[00:45:19] Eric Brotman: So while it’s interesting to learn about, it’s, it’s actually, to me it’s a form of gambling and speculation. And so I, I think it’s great to educate yourself on various things. I actually think trading is, it’s something that’s become gamified by all the robo-advisors and I, I actually think it’s not particularly good for people.

[00:45:41] Eric Brotman: In the same way, social media can be great or it can be bad for you. Trading can be great or it can be bad for you. And I, and I think if I was going to, and I don’t do my own trading, we have an investment committee and we, we manage money a certain way. But before I would start buying or selling individual securities myself and just picking stuff, I’d rather go to Atlantic City. It’s more fun.

[00:45:59] Sara Lohse: [00:46:00] True. And can I go with you?

[00:46:01] Eric Brotman: No.

[00:46:03] Sara Lohse: Darn. So that brings us to our final habit on our list, and that is to give yourself grace. So just go into that.

[00:46:15] Eric Brotman: All of us, no matter what resolution or goal or target we’re thinking about, whether it’s financial or otherwise. We’re going to err, we’re going to slip, we’re going to… mistakes are going to happen.

[00:46:28] Eric Brotman: And you know, it’s kind of like going back to that diet concept or nutrition concept. If you eat nothing but broccoli for a month and then you have a chocolate cake, you have a tendency to beat on yourself for that. You have a tendency to, to really harp on the one bad day when 30 of ’em were pretty darn good.

[00:46:47] Eric Brotman: And so I think on the financial side, if one of your objectives is maybe to spend less or to to pay things down sooner or to increase various things or to work more overtime, or whatever it is [00:47:00] financially, it’s not gonna be perfect. And so I think it’s important to give ourselves grace and to allow for things to not go perfectly.

[00:47:08] Eric Brotman: They’re never gonna go perfectly. And you know, we’re going to have tough months or tough years, or something’s gonna come into our world that changes our plan. And you’re gonna say, “wow. I said I was gonna put away 15% every year, but this year I suddenly needed four wisdom teeth extracted and a new driveway.”

[00:47:24] Eric Brotman: Well, life happens. And so while we, we aspire to do the right things and we aspire to do them all the time and be consistent with them. When it doesn’t happen, pick yourself up, dust yourself off, move forward, but don’t beat on yourself. It’s just not worth it.

[00:47:44] Sara Lohse: Absolutely. I completely agree. We had another question come in.

[00:47:48] Eric Brotman: Okay.

[00:47:48] Sara Lohse: And it’s a great question. Someone did ask… this one’s, this one I can even answer this one.

[00:47:55] Eric Brotman: Oh, good.

[00:47:55] Sara Lohse: And I, I do love this question. How much does it cost to [00:48:00] consult with you?

[00:48:01] Eric Brotman: Well, to consult with us costs nothing. Initially we, we will do a, a phone call or a Zoom with folks just to get to know each other and figure out whether we could be the right firm for, for you or your family or, or not. And you know, some of it comes down to matching what you are looking for and, and what we do. One of the things that we pride ourselves in is not having asset minimums and working only with ultra wealthy folks. We work with all kinds of families all over the country.

[00:48:29] Eric Brotman: And so we can talk through what it would look like to engage. There’s also a ton of information on the website and if, if you’d like, you can give your contact info to Sarah. She can send you a link that will allow you to schedule a call with, with one of our financial advisors. It won’t cost you anything.

[00:48:46] Eric Brotman: You’ll get a chance to kick our tires a little bit and get to know us and, and we’ll see what we see. And you know, obviously that’s a, a lovely question and you know, we… if we engage for financial planning or for wealth management, we engage on a flat fee basis so that it’s [00:49:00] predictable, you know what it is in advance, that it’s not required that you buy anything or there’s no product.

[00:49:05] Eric Brotman: It’s just the advice and you’ll know exactly what’s involved and we can talk you through that when we, when we have the opportunity.

[00:49:13] Sara Lohse: I did include that link in the chat as well if anyone wants the book. And I will say that was an actual question. I didn’t even set that up.

[00:49:20] Eric Brotman: Well, how about that? No, we, we’ve, you know, we, we have a, a link that allows for any of our advisors to be to, to, to have things scheduled and you know, we’ve, we’ve found these conversations to be helpful, even if it’s not a match. Sometimes what folks are looking for is something we don’t do, but we’re happy to point you in the right direction. So so yeah, no, we’d love to chat with you.

[00:49:42] Sara Lohse: And so we do…. That was all 10.

[00:49:45] Eric Brotman: Okay.

[00:49:45] Sara Lohse: We talked about all 10 of our habits, but we have a bonus. So let’s talk about that.

[00:49:52] Eric Brotman: You mean an extra credit assignment? I love extra credit.

[00:49:55] Sara Lohse: We, we do not give homework here at Retire University. We give [00:50:00] extra credit.

[00:50:00] Eric Brotman: Correct. So, correct. So you can enroll at BFG University and learn some of the basics. We call this freshman year. It’s the first semester from the book, so it basically takes the first four chapters and brings them to life and it, it’s a way to it’s a way to start this journey wherever you are. And right now I believe we’re offering everyone on this webinar, a partial scholarship. Is that true?

[00:50:24] Sara Lohse: We are, we are offering it for more than 80% off.

[00:50:29] Eric Brotman: What?

[00:50:29] Sara Lohse: So if you…

[00:50:31] Eric Brotman: I’m only kidding.

[00:50:31] Sara Lohse: I, I didn’t get your, I didn’t get your permission before I did this.

[00:50:34] Eric Brotman: No, that’s fair. That’s fair.

[00:50:36] Sara Lohse: If anyone does want to enroll at bfguniversity.com in the Retire university freshman year, we are doing a special right now in honor of 2023. If you use the code 2023, you’ll save more than 80%. It’s going from $119 to $20.23 cents. So,

[00:50:54] Eric Brotman: Wow.

[00:50:55] Sara Lohse: Really leaning into this whole 2023 thing.

[00:50:58] Sara Lohse: But in this program, you’re going to [00:51:00] learn about cash management, debt management, risk protection and management, some of the basics of financial planning. And it’s hosted by yours truly, Eric Brotman, walking you through this, and you actually do get his book along with this. So it’s just a really great opportunity to learn some of more details about some of the stuff we’ve talked about here and that we’ve talked about in the other webinars that we’ve done and on the podcast.

[00:51:24] Sara Lohse: There is also the option of a free course on BFG University that is aimed at high school and young adult level. That’s just an introduction to personal finance that is always free at bfguniversity.com. So if anyone wants to enroll there, please feel free. We would love to have you as a student.

[00:51:45] Sara Lohse: And we do have a few more minutes for more questions if anyone has any more questions to send in. There was one that…

[00:51:53] Eric Brotman: I have a question. oh, you have one? I was gonna say, I have a question.

[00:51:55] Sara Lohse: No, go ahead. Go ahead.

[00:51:56] Eric Brotman: I have a question for you because I get to put you on the spot now on our webinar.

[00:51:59] Sara Lohse: Oh, oh [00:52:00] God.

[00:52:00] Eric Brotman: Which is to ask you what your resolution or habit change is going to be in 2023- financially- what is your, what is your habit financially?

[00:52:08] Sara Lohse: Financially?

[00:52:08] Eric Brotman: Yeah, we’re talking money here. What’s your…

[00:52:10] Sara Lohse: ok,

[00:52:10] Eric Brotman: What’s your resolution?

[00:52:11] Sara Lohse: Non-financially my resolution was to pet more dogs and I’m doing great so far. I have really stuck to it. I’ve pet many dogs. Financially, so as you know, this is my first year as a business owner and a full-time consultant. So my resolution is to actually continue putting money into retirement accounts since it’s no longer taken out of a paycheck every two weeks. I have to do this myself and I have to keep up with quarterly taxes. So my resolution is to figure out how to do that.

[00:52:47] Eric Brotman: So you’re adulting.

[00:52:47] Sara Lohse: And I’ll figure that out by calling you.

[00:52:49] Eric Brotman: You’re adulting. I’m so proud.

[00:52:51] Sara Lohse: I’m doing my best.

[00:52:53] Eric Brotman: So proud.

[00:52:54] Sara Lohse: So, shameless plug: favoritedaughtermedia.com.

[00:52:57] Eric Brotman: Yeah, there you go. Shameless plug. Any, any questions [00:53:00] from the audience?

[00:53:01] Sara Lohse: So one of the things that we had talked about with I think it was having a written plan.

[00:53:06] Eric Brotman: Okay.

[00:53:07] Sara Lohse: What are a few things that you should start with that I know you like to talk about some softwares that you like, or is it something that you should just put in a spreadsheet?

[00:53:15] Sara Lohse: How do you think people should start getting that written plan?

[00:53:18] Eric Brotman: Well, there there are two different pieces of that. One is the tracking of your income and expenses, which I think is best handled by software. And I use Quicken, which is an Intuit program. It’s not expensive, and it allows downloading of your credit card charges and your bank transactions and, and your investment portfolio, and it allows you to track where things are.

[00:53:41] Eric Brotman: So, excuse me. So I think that’s a worthwhile investment because you can set that up to track your categories and to figure out what you’re really spending your money on. In terms of a written plan, it always starts with the same thing, and that’s inventory. You have to be brutally honest with yourself and write down [00:54:00] exactly what you have, what you own, what you owe, and start with the, “you are here” sticker.

[00:54:08] Eric Brotman: Any journey that you take, financial or otherwise, begins with wherever you are.

[00:54:13] Sara Lohse: Yep.

[00:54:13] Eric Brotman: So start with inventory and be brutally honest with yourselves. It makes no sense to lie. You know, if you go into a weight loss program and you give the wrong number when you start it, it, you’re only hurting yourself. So be honest with yourself.

[00:54:27] Sara Lohse: I feel attacked. I just did that.

[00:54:29] Eric Brotman: There you go.

[00:54:30] Sara Lohse: I always subtract 10.

[00:54:32] Eric Brotman: Excuse me.

[00:54:32] Sara Lohse: They don’t need to know. And well, you asked me.

[00:54:36] Eric Brotman: Mm-hmm.

[00:54:37] Sara Lohse: So let’s put you on the spot. What is your financial resolution?

[00:54:41] Eric Brotman: And I’m sorry, but we’re out of time. No, my, my financial resolution, it’s a great question and I, I I will, I will honor it with an answer.

[00:54:50] Eric Brotman: My financial resolution this year is to diversify my sources of income. You know, I, I’ve been doing financial planning for 30 years [00:55:00] and love it. I started a consultancy two years ago working with financial advisors and their firms and their clients and absolutely love it. And so doing a little bit more of that this year is going to, to bring me not only some joy, but some, some different forms of revenue.

[00:55:15] Eric Brotman: And, and so I consider it that’s part of my graduation plan for when I retire. And I’m starting to do it now, and I I love it already.

[00:55:26] Sara Lohse: So is that what you wanna be when you grow up?

[00:55:29] Eric Brotman: Boy yes. For right now, what I want to be when I grow up is a an influencer. I want to, I want to change as many lives as I can financially, and some of that will be, through our individual work.

[00:55:42] Eric Brotman: Some of it will be through media, where it’s mass you know, you’re reaching the masses. Some of it will be through consultancy where, you know, I might be able to impact a thousand families by working with one firm. And so that’s, that’s kind of neat. And, and just getting people prepared for what is a complicated scenario is [00:56:00] exciting to me.

[00:56:00] Eric Brotman: So, yeah, that’s, that’s what I wanna be when I grow up. And I, and I, I think I’m always evolving, getting better at it. So it’s, it’s fun.

[00:56:07] Sara Lohse: It’s a good answer. I like that answer. So you did mention media and some of the stuff we’re doing. If anyone wants to look into some of the other resources that we have, cuz we do have an entire website just dedicated to financial literacy resources.

[00:56:21] Sara Lohse: There’s more webinars. There’s the podcast that we mentioned, Don’t Retire, Graduate, and there’s just all of this different content available for you. It’s at brotmanmedia.com. So feel free to check that out. Watch some of the pre-recorded webinars that we’ve done over the past…. I think we’ve been doing this for over a year now.

[00:56:40] Eric Brotman: Yeah, no, at least.

[00:56:41] Sara Lohse: So we have a whole bunch of webinars that y’all can watch at any time. And that brings us to the end. That is, that is all we’ve got for you. So again, if you wanna enroll at bfguniversity.com, use that code 2023 and you will save over 80%. This is the biggest sale we’ve ever done. And we [00:57:00] just want to help people get off on the right foot in 2023.

[00:57:03] Sara Lohse: Any closing words from you, Eric?

[00:57:05] Eric Brotman: Just Happy New Year. Make 2023 great in every way: financially and otherwise.

[00:57:11] Sara Lohse: Absolutely. Thank you guys all again for joining us today, and we will see you in a couple weeks on our next webinar. Everyone have a great day.