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Financial Cruise Control by 40: How This Couple Mastered Wealth, Risk & Retirement Planning 🚗💰
9 Plays9 days ago
In this inspiring episode of The Future of Finance Podcast, host Marissa Wood sits down with power couple Sarah and Eric Taylor to explore how they achieved financial "cruise control" before turning 40.
💆 Sarah, a licensed massage therapist and founder of Stay Well Massage, shares her journey of launching a successful business from scratch. 🧠 Eric, a risk management expert, offers his strategic take on investments, wealth-building, and early retirement planning.
- Together, they talk about:
- Building wealth as a couple 💼
- Investing with intention 📈
- The power of cash value life insurance 🛡️
- Knowing your numbers 📊
- Their best (and worst!) financial decisions 🤦♀️🤓
Whether you're an aspiring entrepreneur, a young investor, or looking to simplify your finances, this episode is packed with wisdom, relatable stories, and actionable insights.
🔗 Book with Sarah at: https://staywellmassage.net
📅 Connect with Marissa: https://www.union-financial.com/
⏱️ Timestamps
00:00 – Intro to Sarah & Eric Taylor
01:12 – How Marissa and Sarah met: a fender bender and fate
04:04 – Sarah’s path to starting Stay Well Massage
07:16 – Must-know tips for launching your own business
08:50 – Customizing the client experience in any business
09:58 – Eric’s investment philosophy: “No risk, no biscuit”
14:09 – Why 401(k) rollovers matter—even if you're happy with yours
19:08 – Consolidating your retirement accounts
20:31 – Understanding Indexed Universal Life Insurance (IULs)
24:53 – Retirement analysis: Are you on cruise control or need a pit stop?
26:38 – The value of knowing your numbers
30:18 – Risk management and early retirement planning
33:41 – How to prepare for both “dying too soon” and “living too long”
41:13 – Worst financial decisions: a condo, a Mercedes & a case of beer
44:25 – Best decisions: hiding money from yourself + buying at the right time
48:07 – Final thoughts & where to find Sarah’s services
📌 Hashtags
#FinancialFreedom #EntrepreneurJourney #FutureOfFinance #MoneyMatters #MassageTherapist #EarlyRetirement #IUL #401kRollover #FinancialPlanning #StayWellMassage #InvestSmart #RiskManagement #KnowYourNumbers
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Transcript
Introduction to Future of Finance
00:00:09
Speaker
Hi, everyone. Welcome back to the Future of Finance podcast. I'm your host, Marissa Wood. And today we're going to be sitting down with clients of mine, Sarah and Eric Taylor, and discussing how they got on financial cruise control by the age of 40 and sharing some strategies to help you do the same.
00:00:26
Speaker
So welcome, Sarah
Building Relationships and Partnerships
00:00:27
Speaker
and Eric. Thank you coming. Thanks for having me Thanks for having us. Yeah. Absolutely. So, you know, you're clients of ours, but you're also, I'm a client of yours. You know, Sarah is a licensed massage therapist.
00:00:41
Speaker
Yes. And also we live in the same neighborhood. Yeah. We have a lot of intertwining in our paths. We both work out of 4&Co. um Yeah. it's been It's been a journey watching our lives intertwine.
00:00:56
Speaker
Yeah. And you guys, you know, i always say you are like golden clients of mine because you're really doing everything right along the way. And it's awesome to see we're laying such a really strong foundation that, you know, I think you're going to be lifelong clients and you're going to be really, really successful as well. You already are. And so i always like to start out with how we met.
00:01:17
Speaker
And I think we actually have a kind of funny story. i don't know if Eric even knows this story. Yeah. But I'll share it. Yes, go ahead. And so we were in the Bexley Working Women yeah Networking Group.
00:01:32
Speaker
Yeah, which is just our community that we live in. And couple women would get together for a happy hour or, you know, just a mid-morning brunch.
00:01:43
Speaker
And um just share kind of the struggles we're going through, some challenges, some ideas, just use it as networking. And The one event that they had was a happy hour event and i was running late the one day and my husband had just bought a new truck.
00:02:02
Speaker
And I'm you know rushing out of the garage to get to this event. I back my car into his brand new truck. And I'm like totally frazzled. I'm like, I don't know. Should I even go to this event now? I'm all worked up.
00:02:16
Speaker
I ended up going. And, you know, the first person I see is Sarah, who's just beaming and full of good energy. And I think you were telling us all kinds of really great stories and sharing your passion with your upcoming business launch.
00:02:32
Speaker
And it just completely changed my mood. And it really had such an impact. It really did. And like from that point on, I was like, OK, you know, there's a reason I met this person. There's a reason I ended up coming.
00:02:45
Speaker
And it's really turned into like a friendship and a nice business relationship. And so thank you for that. You're welcome. And I remember. Sorry, Matt, for your truck. Yeah.
Sarah's Business Journey and Insights
00:02:56
Speaker
I remember this um blonde hair coming through the doors of the hotel bar area because we were down at Spring Hill. And this wild look in her eyes. And I'm like, there is a story that goes along with that.
00:03:12
Speaker
and little did I know how different of a demeanor you had that day than you normally do because you were not the reserved poised person that I have come to know.
00:03:24
Speaker
um And I didn't even know that I gave you what you needed. but I do vividly remember that moment of you just being like, and we had a good laugh about it. And I think that transition from stress to joy can be such a powerful transition for moving through an emotionally trying ordeal.
00:03:47
Speaker
So I'm happy I was able to help you do that. And it really has blossomed into a really great um friendship and partnership. And um we educate both of you ah each other on all of the things that we know um so well and live and breathe. So it's really been cool. Absolutely. And so, you know, Eric, we'll get to what you do for for work as well, because you both have, you know, a financial background, which, you know, is one of the reasons why you're such educated clients and successful.
00:04:19
Speaker
um But Sarah, you know, you have your own business, Stay Well Massage, and it's thriving. And only what, two years? It's been two years.
00:04:30
Speaker
It's been two years and a month since we moved in here. um And that was when I opened this business. Tell more about, you know, your passion behind wanting to open that and kind of how things fell into place. My massage passion started as a senior in high school.
00:04:47
Speaker
um So being 41, that was quite a while ago. And i did my senior thesis in high school on a local massage business. And then coming out of college, I went to school for massage um and really realized that I was kind of put on this planet to do this. It was more than just a passion. It was something that came very naturally to me.
00:05:11
Speaker
um And then, you know, 18 years of working in other jobs and always having that in the back of my life or in the forefront in some cases, I collected knowledge from people along the way on financial planning and business tips and tricks and everything. So As I was dreaming this business up for 18 years, all of those little thoughts were formulating in the back of my mind on what I wanted it to be, even who I was as a massage therapist.
00:05:46
Speaker
um And one of the reasons why... the passion has become such a successful business. What I believe is that I was very humble and almost in overwhelm at points in planning the business.
00:06:00
Speaker
And I realized that I knew a lot about the things I knew a lot about, but recognizing when I didn't and finding those like resources and the people um that were centers of those areas and leaning on them or outsourcing to them and putting my pride aside and accepting like, I don't know enough about this was really a powerful shift to being successful because you don't know the questions you don't know to ask.
00:06:30
Speaker
And a lot of the people that I leaned on, whether it was podcasts, podcasts were a big thing for me, um helped prompt me to ask those questions.
00:06:41
Speaker
And then once I asked those questions of myself, I was able to drill down a little bit more detailed on what I wanted that component of my business to look like. And when I launched, I hate change. I think everybody hates change.
00:06:54
Speaker
So when I launched... I had thought everything through very thoroughly. And to this day, i haven't changed anything.
00:07:05
Speaker
And that's not because i haven't, like, there's there wasn't any change that was necessary. was ah The only thing I've changed is added to my skill set. right Yeah.
00:07:16
Speaker
And hours. Yes. Finding that work-life balance. But yeah.
Eric's Financial Strategies and Risk Management
00:07:21
Speaker
So what would be some tips for someone that, you know, wants to go out on their own venture and and launch their own business?
00:07:28
Speaker
Do you have any things that you would definitely recommend them doing or definitely avoid doing that first year? Yeah. So definitely find a resource where it outlines like the steps to opening the business, like all the components.
00:07:42
Speaker
Do you want a website? Do you want online booking? Do you want um A customer facing storefront? Like, do you what are what do you want your business to look like? And write down the things within that landscape that you know how to execute and then put yourself into that when you need to feel that joy.
00:08:03
Speaker
And when you're starting to feel like. as if you need to look a little bit more towards the things that you don't. As soon as the overwhelm hits, you know to lean on a resource.
00:08:19
Speaker
But having an outline of all of the details that you need to have helps you to narrow down the areas where it might come easier to you and might be more difficult.
00:08:29
Speaker
And knowing that you just don't know everything. You know, some of the things that I've noticed, at you know, being a client of yours and And knowing a lot of people that are clients of yours, you really do try to customize that experience from the music to the aromatherapy to, you know, you want the shoulder heating pad ahead of time or after?
00:08:50
Speaker
what do you want to drink? You know, there it does feel really customized. And I think that's what everyone wants. We all want to feel understood and like, You know, in any business, even in our business, we want to feel understood and like we are an important client. We're not just another number or another transaction. Yeah, you're a person. And like just like financials need to be specific to that person. I feel like in massage...
00:09:16
Speaker
Too many times the provider is looking to do what they do for other people and they don't customize. That's the biggest complaint I have is that they feel as though the massage therapist is just going through the same routine that they did on the last person. And not only would that get boring for me, but that's not helpful.
00:09:37
Speaker
Absolutely. If you did the same investments for someone at a different time in their life, it wouldn't be appropriate as what you're doing for us. So everything in life needs to be a little bit customized to the individual or it ends up falling short of a need in some way.
00:09:52
Speaker
Sure. Absolutely. Now, you know, Eric, you work in risk management, kind of the financial sector. And I know Sarah always worked in the financial sector before moving into massage therapy. Tell me a little bit more about, you know, kind of your investment philosophy. where Are you more of a spender, a saver?
00:10:12
Speaker
What's important to you when it comes to saving and investing for your future? So from an investment perspective and as a risk manager, I feel like your typical risk manager is a is a no person.
00:10:27
Speaker
No, can't do that too risky. um My philosophy, and Sarah hates it, is no risk it, no biscuit. So the the instead of no, it's how. So for me, risk management is all grounded in strategy. What is my objective?
00:10:47
Speaker
Is this action going to help me achieve my objective or is this wasted energy, wasted resources? So really defining the the strategic objective and then how can I achieve that objective and what are the things that can prevent me from achieving that objective?
00:11:05
Speaker
So you are somewhat of a risk taker, but you want to make sure that you have a safety net or you have some risk mitigation tools laid out at least. Correct. So I understand the, based on the the strategy, the levels of risk that I'm willing to take and can optimize the the choices based on that.
00:11:25
Speaker
So when Sarah decided to, you know, start a business as a risk manager, did you say, you know, okay, well, we need to have x amount in reserves first, or we need to know, you know, exactly what your expenses are going to be. And can we cover that? Is that kind of how that conversation went?
00:11:42
Speaker
to To a certain extent. So I've i've been lucky enough that my my salary covers the necessities. So we had the the luxury of of her business of having the ability to fail without any material impact.
00:12:01
Speaker
So the that's good the threshold for that was cover your rent, you know, if you can cover the bar for me, I had a much higher bar for me than he had for me. He was like, just don't lose money. And I was like, really? You're like, you have no idea how good I am. You have no idea my plans here.
00:12:21
Speaker
um And when I finally did let him in on the plans, he was, I think, a little more surprised at how ambitious or how into my numbers I was.
00:12:33
Speaker
I mean, you you have the accounting background. So i knew that you would understand the things that go into operationalizing the idea. So being able to take that and – truly know where you needed to be at from a client supply perspective to be able to have threshold.
00:12:57
Speaker
Yeah, like I knew the number of clients I would need in my book to hit the numbers that I wanted to hit. I just didn't know how long it would take me to get there.
00:13:07
Speaker
Okay, but that's so important because I think a lot of people don't even know their own metrics. Knowing your numbers is one of the things I have listed. You have to know your numbers.
00:13:18
Speaker
and every And you have to look at them in different ways in every capacity, even as the business that is our household. Like knowing your numbers and like knowing how they change over time and what components are changing.
00:13:31
Speaker
Your biggest variables is a big thing to running a successful business, running so a successful retirement plan, et cetera. Absolutely. Absolutely. You know, recently i've I've started telling people that because people will, you pre-retirees and retirees will say, you know, well, can I retire? I want i want to retire by 62 or 65.
00:13:55
Speaker
Retirement is not an age. It's actually a number. It's a dollar value. Yeah. You know, you can be 65 years old and if you don't have enough assets, you are not retiring versus, you know, someone could retire at 50 if the dollar amount is there. um And so that's, you know, that really is the mindset. It's a number.
00:14:13
Speaker
It's not an age, really. um And so. you know, one of the investment strategies I want to talk with you both about, and it is one of the first things that we implemented together, is rolling over a 401k.
00:14:28
Speaker
Why it's important... Even if you like your current 401k or it's performing well, or you have, you know, a decent investment background, which Eric, you did, you still do.
00:14:41
Speaker
um And when we first spoke about this, you know, Eric had changed jobs a few years ago and you know We discussed the importance of repositioning that into something that's going to be actively managed.
00:14:54
Speaker
And one of the strategies we spoke about is having dividend-paying stocks inside of that and reinvesting those dividends to still take advantage of dollar-cost averaging.
00:15:06
Speaker
And for our listeners that are not familiar with what dollar-cost averaging is, that's when you're buying in on a consistent basis. Usually when it's a four ah one k you're buying in every two weeks.
00:15:18
Speaker
because that's when you're contributing to that 401k. So every two weeks, you're buying in shares. Dependent upon what the price of the shares are at that time, you might buy more or you might buy less.
00:15:30
Speaker
But throughout the course of the year, you're going to have an average share price that's going to be lower than someone adding to their account one time a year, subject to wherever the market is that day.
00:15:41
Speaker
Yeah, so I think the thing the concept of dollar cost averaging is so powerful because often you're putting in a the same dollar amount on a predetermined schedule. So when the price per share falls, you get more shares for the same money at the lower price. So effectively, your average price is better than...
00:16:03
Speaker
Because you're buying more. That is the the day the market falls. i'm like, oh, man, I hope it's payday. I hope I'm putting money in today to the 401k because that whole buy low, sell high philosophy plays really in your favor when you're putting money in on a consistent basis. Which is why it's a problem when someone leaves their job and they're no longer contributing to that 401k.
00:16:24
Speaker
And if it's not being actively managed, which I got news for you any one part of a big company, it's not. By having some dividend-paying stocks that are being reinvested rather than paid out to you, you're buying new shares on a consistent basis still. Even though you're not putting money in on a regular. Yeah.
00:16:42
Speaker
So often
Exploring Financial Products and Protection
00:16:43
Speaker
under the 401k plans, you have a targeted fund that is set for your retirement age. And often in those targeted funds, because retirement is so far off, they are more aggressive, but they're not dividend-yielding stocks.
00:16:58
Speaker
ah securities. And you know one of the misconceptions is that a 401k needs to be reallocated the moment that you move it to someone.
00:17:09
Speaker
The reality is you often transfer it just the way that it is without selling anything until it's at the new location. So just because you've now put an an actual advisor and face to your 401k asset, which is now a traditional IRA when you roll it over,
00:17:27
Speaker
doesn't mean that you need to change any of your investments. It just gives you the ability to do so much more easily and with a person that you now are working with on stretch strategizing.
00:17:39
Speaker
Exactly. Not a taxable event, not necessarily even and event where you're selling anything or you know changing the funds that you hold. Absolutely. you know and And I appreciate that you both understand that because you know we all change jobs constantly. Well, not myself, but most of our clients change jobs constantly. And the other aspect is you know consolidation and organization jobs.
00:18:04
Speaker
all your company retirement plans, right? Right. So the culture that we're moving into with the younger generation, they're not staying at their jobs for 20, 30 years. There's no pensions involved that they're leaving behind.
00:18:16
Speaker
So every time you leave a job, presumably you're leaving your 401k behind. Mm-hmm. What's the likelihood that you're going to forget you have that money? Like you move, then you have to change all of those addresses on all of those little amounts.
00:18:31
Speaker
And if you have a financial advisor that can roll over each of those 401ks into one traditional IRA for you, You only have one account that you need to keep track of and they're not all in different places with different companies. It's an organizational thing as much as it is an accessibility to the money and a putting a face with it as well. And there's a financial impact too. Typically, the 401ks do have fees associated with them that a lot of times are picked up by the by the company. Mm-hmm. That when you leave that company, they're no longer paying those those fees. So if you're not paying attention to it, typically there is a quarterly management fee. And you can eat up a little 401k pretty quickly with fees and why pay fees. guarantee you 99% of our listeners did not know that.
00:19:20
Speaker
Yeah. So thank you for shedding some light on that. Now, another strategy that we've recently implemented in your plan is utilizing fixed index universal life insurance, permanent cash value life insurance that has living benefits you can use while you're still alive, the best kind of life insurance.
00:19:38
Speaker
Now, you know, you both felt as though it was it was a great fit inside of your portfolio. Can you kind of share with me why you felt that way, what you like about it So first, I think it's important to recognize that I was in the financial industry for 18 years eighteen years And this is one of the most powerful reasons of me acknowledging what I didn't know. I had been removed from the industry for five years when I met you, and I didn't know all of the new options that were available. The financial industry is constantly creating new products. And this is one of the things that I would have had no idea was available unless I came to you
00:20:21
Speaker
And admitted, hey, I haven't been connected to this industry. i know it, but I don't know it now. Okay. So you want to talk about why it's such a good fit?
00:20:32
Speaker
Yeah, so I mean from a from a strategy perspective, the as we ah age, we're collecting assets and being able to protect those assets.
00:20:45
Speaker
for For me, as the primary salary driver that covers the expenses, if anything happens to me, I want to make sure that Sarah and the kids are you know financially benefited.
00:21:02
Speaker
Well, not benefited, but they can stay afloat. Yeah. yeah um So that, you know, they they don't have to rush to sell the house and liquidate the assets if they're if there's a you know anything that happens to me.
00:21:18
Speaker
So it covers that that base. it It also sets the the groundwork for the the base layer of the retirement strategy. So having...
00:21:29
Speaker
A certain amount of income that I can count on forever that don't need to worry about market fluctuations, asset allocations. It's just there. It's a piece. It's, you know, taxes one leg the stool. No taxes was was a big piece of that.
00:21:47
Speaker
um And then the other, as that asset grows, we have the ability to borrow against that and pay ourselves the interest instead of to to a bank.
00:22:00
Speaker
Absolutely. Yeah. I mean, when we say risk mitigation, it checks off everything. You know, it's protected from creditors, lawsuits, taxes. It's also hidden under FAFSA.
00:22:13
Speaker
So as i mean, we're our kids will probably not. We're fine we're lucky enough that our kids will probably not have to worry about. And they're brilliant, so they might get, you know, the STARS scholarship. It's just helpful to know that a little bit of it is sheltered.
00:22:31
Speaker
Absolutely. I mean, yeah, for those with children approaching college age, um you know, not only can you use it to borrow against to pay for their college if you want to assist them with that, but, you know, it's an asset that you can – Yeah.
00:22:45
Speaker
Shield from that FAFSA. Analysis. Yeah, absolutely. um I mean, for anyone that's in their 30s and forty s using cash value life insurance to plan for retirement while build assets, you know, have that death benefit, it really checks off so many boxes. And we've been trying to incorporate it in so many plans.
00:23:10
Speaker
If, You know, the finances allow it and your health allows it because ultimately not everyone can get this because it is life insurance. But, you know, I'm thrilled that you both see the value. And, you know, I think you're going to really love it in the future when you can start pulling that tax free income. That's an awesome conversation to have. Yeah.
Achieving Financial Peace and Stability
00:23:32
Speaker
um Now, the other major thing that we recently accomplished together was doing your retirement analysis, cash flow projections for the future. And, you know, I don't know that everyone is even aware that this tool is out there for them.
00:23:50
Speaker
And you know just to give our listeners a little background, it's essentially a snapshot that we can project out into the future. we plug in what your expenses are right now, what your assets are right now, your income right now, so everything you know currently. And then we project it out with inflation to see, are you on track to be able to cover your expenses in retirement?
00:24:13
Speaker
Is there going to be a gap? When do we project those assets running out, if ever? And so that we know, you know, OK, we have the next 20, 30 years to make the changes that we need or not.
00:24:25
Speaker
Or we can go, we're on cruise control cruise control. And, you know, lucky for me, lucky for you guys, when we had that conversation, it was, hey, we are completely on track.
00:24:38
Speaker
If we just keep doing exactly what we're doing. So, you know, tell me about how that made you feel and what the experience was like putting together that plan. So um the experience of what it was like, I'll leave to Eric because he does all the work in getting all of the information to you, which I really yeah was that a challenge, Eric. I mean, it was it was a lot of info, I will say. It was a lot of information.
00:25:00
Speaker
if i didn't have it organized and already sort of structured myself, i it could have been a decent homework assignment. Because we send out an Excel document and you're plugging everything in, which...
00:25:15
Speaker
is good exercise, though. goes back to knowing your numbers. If you know your numbers, you know what you need to know at where find it. And if you don't know them, now you've got know them. And that's always a great exercise for people. It's like, okay, wow, I really could pay attention. And it can be your first step to organizing everything. Once you have it organized for you, it's organized for yourself as well. Yeah.
00:25:37
Speaker
Right. Yeah. And so, you know, so let's talk about how you me feel. um Accomplished. So starting in the financial industry, coming out of college, it was i was seeing all of these people that maybe, yeah, they were a ah a little ah older than we are. But getting to this point where they're like, wow, like all that work, all that hard work that I did, like has paid off. And like, here's what I have to show for it.
00:26:05
Speaker
And that sense of accomplishment. at our age was amazing. And it also made me feel relaxed. It takes the pressure off. So Eric didn't put any pressure on me with the business, but I put it on myself.
00:26:18
Speaker
And now looking at our finances, I can relax and enjoy this moment a little bit more. And to be able to enjoy the moment when our kids are still so young and not have to stress about it is really, really nice and relaxing.
00:26:31
Speaker
That's good. Because, I mean, we even overestimated some some of the expenses, which, you know, it's important to do that because some months you're going to spend more. um But, you know, it's a testament to starting early. You both started saving early.
00:26:45
Speaker
And so now you're not going to be in your 50s saying, oh, my gosh, we have to really play catch up, play catch up and start doubling down. No, you know, we have the benefit of time.
00:26:57
Speaker
You know, you're really going to have a lot of surplus in your 50s and 60s because you already put it away. And, you know, now it's just sitting there compounding. Yeah.
00:27:08
Speaker
The benefit of time. That was my biggest note was starting the 401ks young. And not even noticing the money missing. Yeah. I mean sort of that to that cruise control perspective is is having those things deducted as early as possible. So 401k, having it come out of your paycheck so that the only money that you see is already you know incorporates that you know savings into it.
00:27:36
Speaker
um So having that and a lot of 401ks will also allow you to increase your percentage contribution annually and typically tied to um merit increases. So where I want to increase it 1% every year.
00:27:55
Speaker
It might – my salary might increase 2 percent. So I'm still seeing a salary increase. I'm also in increasing my savings percentage and I'm not feeling the impact of putting more money into into savings.
00:28:11
Speaker
That's a good tip, you know, adjusting what you're saving as you start making more, you know, because a lot of us, we suffer from that lifestyle inflation where we start making more. And so we start spending more, but we're not saving more also.
00:28:25
Speaker
um And it's, you know, it's about that balance. You know, I want you guys to spend and live the lifestyle you're living. But just, you know, let's make sure that we're still hitting our savings goals, which I know you guys will. But there's always room for improvement, too. And there's always room to put yourself a little bit under a microscope or take a pause on the Amazon orders for like two weeks and just be like, you know what, let's see like if I pause.
00:28:51
Speaker
It's a challenge. It is. But practicing that is really, really helpful. um How did you feel? so from my perspective there's the the risk management aspect of it so at this point we have essentially the the coverage that we want to to retire comfortably at the age we want so now the bit the potential the likelihood of impacting that base is low.
00:29:23
Speaker
So my risk appetite goes through the roof and i i can see what asset categories am I not invested in? Are there things that might be a little bit riskier but have a higher reward potential?
00:29:38
Speaker
Those are the sort of things that we can do to say, OK, I have my set age. By the time I'm this age, I'm going to have this kind of income.
00:29:50
Speaker
can I move that needle earlier? Can I go from 65 to 62? Can I go from 62 to 59? Like how how far can we push that needle? And what are the things that we can do with that?
00:30:03
Speaker
and So it kind of motivated you to to do badger better. Yeah. Which is cool. It's funny that he even says that because that was my entire drive to hitting my numbers more.
00:30:15
Speaker
Because he's like, okay, we'll just break even. Because we did an analysis
00:30:20
Speaker
six years ago, similar to this. And we saw that we were basically there already. But I'm like, but if I make more than break even, i can move his retirement age earlier. I'm like, i want more time.
00:30:34
Speaker
Or you could spend a little bit more now. You can do... Yeah. You know, those extra cruises you can do, you know, those extra trips with your family and spending. And we're doing about 50-50 of that. That's good. but No, that's really good. Because tomorrow's not guaranteed. And I think that that's also an important component of this financial plan – Yes, planning the best, but also mitigating the risk of if tomorrow, unfortunately, is not promised, everything's going to be okay.
00:31:04
Speaker
And that is where the value of the life insurance was for me. I didn't realize how much I was worrying about what ifs until I didn't have to worry about it anymore.
00:31:14
Speaker
Yeah, the perfect plan prepares for what if I die too soon? Okay, and what if I live too long? You know, like we have to find that balance of saving and spending, absolutely. And and now that we have that plan in our software, every year we can update it based on you know what you've saved that year or how well the market's done, you know we can adjust it and update it and tweak it now that it's it's in there.
00:31:40
Speaker
And so you know making little changes are easy now. And you know for anyone that is a visual person and wants to see, am I on track? What will I have you know if I keep doing exactly what I'm doing 20 years from now, 30 years from now, you know, it's just a projection, of course, but it can give you that peace of mind to enjoy today a little bit more.
00:32:02
Speaker
Or the drive to make some changes. Or it might be a bad forecast. I've seen some of those. yeah But the empowerment of knowing where you might be hemorrhaging more money, like knowing that a pause on Amazon needs to be longer than two weeks. Yeah.
00:32:20
Speaker
like is a powerful tool to not sticking your head in the sand for too long. The sooner you do it, the sooner you can make the changes to shift everything in the right direction.
00:32:32
Speaker
Absolutely. Yeah. And I mean, yeah, I thank you guys for for shedding that light because – Although you are very successful, I think a lot of our listeners will relate to you and and feel like, okay, you know, I'm in a similar situation. How can i
Reflecting on Financial Decisions
00:32:49
Speaker
get on that cruise control too? yeah um And so now what I'm going to start doing on all of our podcast episodes with guests is I want to ask two questions.
00:32:59
Speaker
You know, your best financial decision you've ever made and your worst. And you can answer this together or you might have separate ones. um And of course, you know, we're not going to judge you for your worst. Oh, no. This is a relatability question. Yeah.
00:33:12
Speaker
I'll go first with my worst because it's interesting. So one of the big things we talk about with financials is time. Taking advantage of time, managing time, like it's a constant.
00:33:23
Speaker
um So it's very easy to look at as something that whether or not you can control. But timing is another component. And my worst financial decision ended up not being as terrible as I had initially thought because of time.
00:33:39
Speaker
So I bought a condo in 2007. in 2008, the mortgage happened. not only – this is – the – so not only and this is so the Short is I use an interest-only mortgage to get into my first property.
00:33:58
Speaker
And at that time, I was very young and much less educated than I am now. And i look back at my 20-something-year-old self, and I wonder how I didn't understand interest-only mortgage was me paying interest only. Yeah.
00:34:13
Speaker
Like, how did I miss that? A lot people were doing that though at that time. Well, it was a good way to get in to a what was presumably a rising real estate market.
00:34:25
Speaker
um And the assumptions were that the value of the home was going to rise, that my income was going to rise, that I would be able to pay more on principal. separately, but trust was the barrier for me there.
00:34:38
Speaker
um And trust but verify is now my new motto. So trust but educate yourself. Yes, I can lean on you because you're the you know subject matter expert, but I'm still going to do my own due diligence.
00:34:54
Speaker
um So buying the condo, the bottom falls out, but time and time is a beautiful thing. We still own the condo. And the benefits that we've gotten from that um going through COVID, I ran a 401k from my first job.
00:35:12
Speaker
Basically started it right around the same time that I bought the condo. And I ran that 401k parallel and I forgot about it until it paid off the condo. wow So I got out of what I had refinanced into a 30-year mortgage by just wiping out my 401k under the COVID withdrawal parameters Which important to know, the 10% early withdrawal penalty was waived during COVID. It is no longer waived. Yes. And that, like I said, the benefit of timing.
00:35:43
Speaker
um We had refinanced out of the interest only before that, but I was still in a 30-year mortgage chipping away at something. And it was our highest interest rate for loans.
00:35:54
Speaker
And we just decided, you know what, this was a good trade-off. um So not as bad as it could have been thanks to time. But I'm grateful that that was my worst. yeah If that's the worst, that's right. Buying real estate at 20 something, it was my worst decision. Like, I don't think that's necessarily such a terrible decision. But yeah, time heals a lot of those, ah those bad choices. If you have the grace of time, can I mean if if you have the luxury of time, you know it goes back to some of the things that we've touched on before like with the dollar cost averaging.
00:36:31
Speaker
Looking at the market now, you know it's been – will say volatile. um So having – looking at that – if I were to check my 401k balance and be like, oh my gosh, I lost $7,000 today.
00:36:45
Speaker
you know Well, you didn't because you didn't sell anything. you know the The value is down. When we refinanced the the condo, the market that was available to ah assess against ah came back with an appraised value of $56,000 for a three-bedroom, one-and-a-half-bath condo. Wow.
00:37:08
Speaker
on the the bridal trail in Connecticut, beautiful complex for $56,000. And you know at the time I'm like ah beside myself with like,
00:37:20
Speaker
My car cost as much as that. how you know How is this possible? And it this ah at the time, it didn't matter because of the tar plan. We were able to refinance it even though it was underwater.
00:37:36
Speaker
The rate, like Sarah said, wasn't great. But it was something that allowed us to where if she were to try and sell it, she would have gotten a lot more than $56,000, but not nearly what it's worth now. yeah So being able to sort of weather the storms and base extremely important. We have the luxury of doing that, yeah.
00:37:59
Speaker
Eric, what would you say your worst? The worst – I thought about a bunch of different things and there were some cars that I bought that were not the the brightest decision. it's like, oh, I got a Mercedes. Like, yeah, it was like just a money pit.
00:38:17
Speaker
But I think the worst financial decision I ever made was I bought a case of beer. and that case of beer cost me like $100 because it it was – this was in college. hadn't paid attention to to anything.
00:38:37
Speaker
didn't really understand how banking worked. So that case of beer overdrew my account, caused another caused another check to bounce that wouldn't have bounced if I hadn't bought that case of beer. my gosh. And that $20 case of beer ended up costing me $100 because not only did I have to pay the bank for the bounce check fee, I had a fee from the the person that the the check was for.
00:39:06
Speaker
So like that just, you know. That $80, you'd be retired now. You know. I'm thinking, seriously? Yeah. The Mercedes was definitely a worse word.
00:39:20
Speaker
That is funny though. it it it boiled it boiled down to that like willful ignorance where – it's irrelevant at the time. It is. yeah Should I have known that I didn't have the money for the beer?
00:39:33
Speaker
you know Yes. um Should I have known that there would have been other consequences? Absolutely. um But it was just that – you know Concept that, you know, it it that doesn't matter. Let me pay for it. I should be fine. And then, you know, not paying attention to all the things that are that are happening.
00:39:56
Speaker
That's amazing. I love that. I love that story. Me too. I think it's a good thing to note, though, that early in your life is the time to make those mistakes. And as long as you learn from them,
Advice for Young Adults and Future Strategies
00:40:10
Speaker
you can end up.
00:40:11
Speaker
Clearly, I were still thinking about it all these years later. When he said I remembered my similar one. So we all do it. yeah um But overdraft line of protection on a checking account is not something to scoff at. Have you heard about this? So some banks will allow you to have um a line of credit that is linked to your checking account that it will draw from if you overdraft.
00:40:37
Speaker
And you have the same interest rate on it as you would like I mean, ah it's typically a lot lower. It's a lot lower than a credit card. OK.
00:40:48
Speaker
But it buffers you from those $25 to $36 overdraft And you just ask the bank for that? Yeah, you just ask for an overdraft line of protection on your checking account. and Because what we do is we don't put all of our money in checking. We have it in savings because it's yielding money.
00:41:05
Speaker
So you need that buffer if you're going to thread that line and and approach that zero. But yeah, and ODP. ODP. ODP. Overdraft line of protection. That's a great tip that i'm sure majority don't Every college student should have them. Yeah.
00:41:20
Speaker
And it should be in the payoff of the overdraft line should be linked to their parents checking account. Just a tip. tip. OK, so those were not too bad.
00:41:31
Speaker
um Now, what would you say your best is? And you might not have made your best decision yet, but so far in life.
00:41:40
Speaker
There's a lot, I'm sure. the For me, it has to be if I would make a recommendation to anybody else, something that they could mimic that we did, it would be hiding that 401k money from yourself in your early 20s.
00:41:51
Speaker
Looking back, you don't necessarily realize when you get your first job at 15 or 16 years old, you don't necessarily realize how long low your expenses are at that point.
00:42:04
Speaker
And you do end up spending a lot of that money on what later is perceived to be frivolous things. Like my DVD library when I was like 21 years old was like on point. Do we even have a DVD player right now?
00:42:18
Speaker
Are all those DVDs still sitting in boxes because of the investment I made in them? If I had been had access to a 401k when I started at my first job at 15 or 16, or my parents had set me up with a savings plan that went into something that later I can make, let's say, Roth contributions with, I would have been...
00:42:40
Speaker
even more ahead of where I am now. So starting early 401k, like from the moment you sign those paperwork for your first job, sign the paperwork before you even get it. You can start an IRA.
00:42:55
Speaker
Yeah. You know, that pulls. Yep. Yeah. Start something young and start just hiding that money from yourself. You will never miss the $25 per paycheck. Eric, what would you say your best choice has been?
00:43:09
Speaker
So far, it's been the capitalization on timing. So when we bought our house, we signed the contract in November 2019. This was before COVID. So the prices in this area were still relatively reasonable. You're going to make sick right I'm sorry. I'm sorry. I know.
00:43:35
Speaker
um the The prices were still relatively reasonable. yeah the The interest rate at the time in in November 19 when we signed it was still was still great. I think when when we had gone under contract, it was like three and a half.
00:43:50
Speaker
um Then COVID happened. We... were impacted by the to impact on the builders because we're the builders in communities like this normally have like 10, 15 houses going at a time.
00:44:07
Speaker
So they'll they'll be they'll have all the trade workers, you know, sort of bouncing around with COVID. They had implemented a rule where you could only have one trade at a time.
00:44:18
Speaker
So they had to go in and do the plumbing. Then they had to go in and do the electrical. And then they had to go back and do whatever plumbing needed the electrical. And then it was a very critical path dependent process.
00:44:31
Speaker
So it ended up. benefiting us in that even though it was completely different than anything that it had ever done, we ended up getting into the house about two weeks earlier than they had planned the bill to be done, which had a perfect overlap of two days with the apartment that we were renting. So it was out of the apartment and into the condo.
00:45:01
Speaker
Not to mention your property value has doubled. Well, that's icing on the cake. the The best part from the time that we signed the contract to the time that we closed was that with COVID, rates had gone into the basement. we So I was happy with the three and a half rate.
00:45:21
Speaker
It had gone down to two and a half by the time that we closed. So that's just $80,000 to the bank that I don't have to pay. wow. you know It doesn't impact the property value or anything like that. That's just more more money in our accounts.
00:45:39
Speaker
Then like you mentioned with COVID, everybody wanting to get out of the city, wanting to have more of the suburban sprawl and and space. And you know the property value has gone up quite quite a bit since since that in ah in a very short amount of time.
00:45:59
Speaker
And i just look back that that is is part of that base. That's the the essential piece of housing and comfort that we're paying ridiculously low amount for that even if we were to try and replace, I think if if we were to purchase our house now, the the expense would be quadruple what we're paying now. yeah Yeah. Thank you. That's going to be me.
00:46:30
Speaker
It's Eric Taylor luck. I just hitched my cart to the right horse. It's amazing. And I mean, you know, and no one can time the market, whether it be the real estate market or the stock market perfectly.
00:46:40
Speaker
But there's going to be points in your life where things do work out perfect. And that's awesome. We got to celebrate that. And, you know, it couldn't happen to better people. You know, you both deserve it. And so that's kind of, you know, rounding out.
00:46:55
Speaker
your current strategies that have gotten you on financial cruise control. And, you know, I hope to our listeners that this inspires you. And if you have questions or you want to, you know, see if we can implement some of these strategies for you, we'd be happy to have that conversation.
00:47:12
Speaker
Now with Sarah, with Stay Well Massage, if any of our listeners, you know, are local to the Tampa Bay area and want to get in touch with you, how can they reach you? So I have a website that kind of details a little bit about me and all of my services and who I really customize so best to, who my ideal client is. And it's staywellmassage.net.
00:47:33
Speaker
And there's book here buttons all over that website that will launch you into my online booking. And you can see my schedule. um Just know I book out in advance. So plan. If you're not a planner, you're not a good fit for me, unfortunately.
00:47:49
Speaker
um But there are always those last minute available options. And I do have a wait list. So um if you want a last minute appointment, I have a wait list as well. Great. Well, thank you so much. You're welcome. So thank you both for coming. And for everyone that was listening today, thank you so much for tuning in to another week of the Future of Finance podcast.
00:48:08
Speaker
If you have questions or want to schedule a phone call or a meeting with me, feel free to go to our website, union-financial.com. You can click the book a meeting button and it'll take you right to my personal schedule and we can schedule a time that works for both of us.
00:48:24
Speaker
And I'm your host, Marissa Wood. Thank you, Sarah and Eric. We look forward to seeing you all next time.
00:48:31
Speaker
investment advisory services offered through brookstone capital management lc registered investment advisor bcm and union financial services are independent of each other insurance products and services are not offered through bcm but are offered and sold through individually licensed and appointed agents the opinions expressed by marissa wood and guests on this show are their own and do not reflect the opinions of this radio station All statements and opinions expressed are based upon information considered reliable, although it should not be relied upon as such. Any statements or opinions are subject to change without notice.
00:49:03
Speaker
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00:49:42
Speaker
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00:50:01
Speaker
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