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Published on:

24th Jul 2026

How to Make Work Optional

Ryan Nauman hosts Zephyr’s Adjusted for Risk podcast with guest Phil Palumbo, CEO/CIO of Palumbo Wealth Management and host of the Palumbo Pulse, to discuss aging demographics and implications for retirement planning and advisors. Palumbo describes leaving UBS to go independent for fiduciary alignment, better economics, and broader investment access, and explains his firm’s focus on helping founders prepare for and execute business exits, then manage taxes, planning, investing, and wealth transfer. He contrasts “retirement” with “make work optional,” emphasizing saving discipline, compounding, and long-term exposure to risk assets (stocks, real estate, private equity) to combat inflation and longevity risk. They stress the need for written financial plans, tax-aware investing, appropriate risk during distribution, bucket-based income planning, diversification, and client education to avoid panic selling during market volatility.

Learn more about Palumbo Wealth Management here.

Connect with Ryan Nauman:

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00:00 Welcome and Sponsor

01:13 Meet Phil Palumbo

02:59 Going Independent RIA

04:54 Make Work Optional

07:50 Saving and Compounding

10:26 Spending and Longevity

12:14 Inflation and Risk Assets

15:39 Why Plans Matter

17:38 Tax Smart Investing

19:28 Exit Planning Playbook

24:14 Retirement Spending Strategy

29:14 Ignore Market Noise

32:05 Emotions and Marathon Mindset

34:13 Wrap Up and Where to Find

Transcript
Speaker:

Let's go.

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Ryan Nauman Market Strategist Zephyr:

Hello everyone and welcome to

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zephyr's adjusted for Risk Podcast

from the shores of Lake Tahoe.

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I am Ryan Amman, the market

strategist here at Zephyr.

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As most know, more and

more people are turning 65.

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In fact, research shows that more

than 11,200 Americans, we'll be

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turning 65 per day through 2027.

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These demographics are putting a

renewed emphasis on financial planning

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or specifically retirement planning.

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Well, I have on the perfect guest to

talk about the aging demographics and

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what it means for financial advisors.

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But first, today's episode is sponsored

by the award-winning Zephyr, which

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helps investment professionals

make more informed investment

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decisions on behalf of their clients.

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Alright, let's move on

to the star of the show.

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It's enough from me.

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I'd like to give a very warm welcome.

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To Phil Palumbo.

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Phil is a CEO and Chief Investment Officer

at Palumbo Wealth Management, and also

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host of the very popular Palumbo Podcast.

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Phil, thank you so much

for coming on the show.

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It's an honor to have you on really

excited about this conversation as

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it's a very timely and important one.

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Can you please tell us a little

bit more about yourself and

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Palumbo Wealth Management?

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Philip Palumbo CEO & Chief Investment Officer Palumbo Wealth Management:

Ryan, thank you for having me on as well.

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Yes, so my firm, Palumbo Wealth

Management is now on its seventh year.

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I launched out of UBS, which is a,

obviously a major financial firm.

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at the major financial firms for 20

years of my career and then decided

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to go independent, mainly to get away

from the conflicts of the major firms.

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And also to have that fiduciary

hat for my clients going forward.

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And, and, and also you have more

unlimited resources in my world.

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Everything on, on the alternative

investment side, direct access

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to privates as an example.

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So really been an, an, a great experience.

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The, the primary focus of my

firm is working with founders

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and helping them exit.

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So we work with founders pre-ex exit

to increase multiple, to get maximum

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value and get 'em to best in class.

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And we help them post exit in

minimizing the overall taxes of

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the actual exit event to 90%.

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then after that, we assist them with

all the advanced planning in terms

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of financial planning and helping

'em, making sure that they, they can

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live comfortably maintaining their

lifestyle and what I call U2 0.0.

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We helped them on the investment

management front as well.

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Everything as it relates to

the transfer of their wealth.

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So it's pretty comprehensive in how

we assist our clients all through

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the process of helping founders exit.

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Ryan: Yeah, Phil real quickly, let's

go back to when you transitioned

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from UBS to being independent.

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Seven years ago, that was probably

a little bit before it got

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really popular and the trend.

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Now it's like every time I

read wealth management.com

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or something, I never read

somebody on the Independence.

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I go on.

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Captive or going to a wirehouse,

it's always the other way.

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Do you think that's gonna continue that

shift from being, going from wirehouse

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or large broker dealers to independent?

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You think that trend is going to continue?

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Phil Palumbo: I absolutely do.

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It's because this, this world that you

are in, first of all the, the assets

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on the, on the management in the RIA

space is, is getting larger if not

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larger now than the wirehouse space.

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So to your point, I mean the

trend has been parabolic and

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I think that'll continue.

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And the reason why is because

you recognize that you don't

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need these big banks behind you.

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To bring in new clients.

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In fact, I've grown the most I've

ever grown since I launched up four x

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in just a short period of time, and,

and that's only growing from there.

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So I think advisors are nervous that

they need some big name behind them.

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The reality is my clients are

custody with Pershing BNY Right?

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Which is the largest

custodian in the world.

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And they all the, all the protections

you get these majors, you know, with

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strong custodial ship and safeguarding,

you know, and you do have some

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access to resources of these major,

you know, custodian firms as well.

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So, so for me, it's, you get.

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The best of both worlds where you

still get the strong custodial ship

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safeguarding, you get better economics,

you get to wear the, the fiduciary hat.

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And by the way, with the better

economics, you could reinvest back

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into the business to put together

and continue to put together a strong

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platform for clients And resources are

are like, are unlimited, unlimited.

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So you're no longer limited to

just whatever a single firm has.

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So for me, I think it

continues going forward.

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Ryan: Phil, that's a great point.

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And just gives you more options

also, especially like you said,

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on, on the investment side as well.

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You know, one of the primary

philosophies at Palumbo Wealth

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Management is, is make work optional.

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Found that very interesting.

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I love it.

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But what does it mean though, really?

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And how does it differ from just retiring?

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Phil Palumbo: Yes, it differs

from the standpoint that I, the,

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Phil Palumbo Palumbo Wealth Management:

my problem I have with the

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word retirement, I just feel

like it's very archaic, right?

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It's overused in marketing and

sales, these retirement type

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seminars and so on and so forth.

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When, and everybody's walking around

saying, I'm gonna retire at 60, 65

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because my aunt or sister, my brother did.

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When the main goal that everybody

should have, and they should say to

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themselves, how quickly can it get to

the point where work can be optional,

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where you are working because you want

to, not because you have to, you know

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where you're at the point where you have

enough money saved that will generate

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enough cash flow to maintain your

lifestyle and what I call again, you 2.0.

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for me that's the, it's the

race to financial independence,

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which could happen at 50, could

happen 45, it could happen at 53.

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It doesn't necessarily have to

wait till you're 65 or 67 or 68.

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When you receive social security.

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So it's that mindset

that's much different.

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Phil Palumbo: And that's the first thing.

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And the second thing is in, you

know, today's world, it's like my

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father, he retired at the age of

53 as a local three electrician.

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'cause he climbed ladders

and it was hard work.

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So in today's day and age, people aren't

just fully retiring, So it's like, I feel

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like I have to retire the word retirement.

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So the idea behind to make work optional

is you working because you want to now.

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'cause you have to.

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So maybe you.

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You are financially independent.

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So now you could get involved with

that industry or maybe do do that

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consulting job you always wanted to do.

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'cause now you have the flexibility.

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So it's a totally different mindset.

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But the idea is that from the day

you start working to think about

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financial independence and getting

there as quickly as possible.

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And what you need to do to

get there is the mindset.

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So my book make work optional.

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It walks people through

exactly how to do that.

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Ryan: I love that Phil, and nobody wants

to be forced to really do anything.

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Thing.

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Right.

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Especially, you know, like when

you get older, it'd be great

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to have the option to work in.

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And like I said, I, for me, I don't

think I'll ever like really retire.

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I'll drive myself nuts and

everybody in my household nuts.

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But like, you know, having the

option to work, maybe shoot, I'm

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being a lift at, at having least

ski resort or something, right?

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Where it's optional.

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I'm just doing it for fun

to keep myself mind my mind.

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Occupied and and busy.

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So I'm just not sitting

around watching TV all day

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Phil Palumbo: Yeah, there are many

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Ryan: or the news.

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Phil Palumbo: There are many times

I'd be in the mountains of Vermont

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and taking, and getting lessons

from various ski instructors.

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Those ski instructors were like 55,

60, 65 years old, and they were, they,

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they were financially independent.

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They loved to ski.

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It's something they always wanted to

do, and, and that was there, quote

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unquote part-time or full-time jobs.

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So that's the beauty behind it.

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Ryan: Yeah, that's fantastic.

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So.

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People love, probably love that idea,

you know, making work optional, but they

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might be a little bit concerned, right?

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Like, are we ready to make it optional?

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What are some of the biggest

obstacles to making work optional,

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and, and how can your clients or just

individuals overcome those obstacles?

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Phil Palumbo: Yeah.

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First of all, it's not an obstacle.

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The the the what you

need to, what you need.

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People need to understand first, right?

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Is Franklin Templeton, the way he always

thought about life is every dollar he

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made, he saved 50 cents and then he.

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Used the other 50 cents for his

lifestyle, his regular expenses, and

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obviously became super successful, but

always had this sort of mindset, right?

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So he always saved 50%,

invested 50% that 50%.

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And when you do that in compounds over

long periods of time, the power of

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compounding, which you always hear about

and, and we've always talked about.

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But Einstein said the most powerful

thing in the world, you know, if you

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start doing it at twenties and you

really learn how to manage your money

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properly by saving properly, not going

to a restaurant every single week,

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twice, three times a week, not not

going out to lunch every single day.

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If you are working in Manhattan

spending 25 to $30, all of that

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compounds over a 20 year career.

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If you invested that money,

it makes a big difference.

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So people really have to

really grasp their arms around.

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I mean, I got clients who have 10,

20, 30, 40 million, 50 million,

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a hundred million, me that.

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have like a, a, a lifestyle spending

problem, which sounds crazy 'cause

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they have all this money, but it's

all relative at the end of the day.

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So it's learning this mindset

like any type of other habit

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that you have, and then getting

into that groove is number one.

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It's saving.

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Saving is the hardest thing

because people love to spend money

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and it's so hard to save money.

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So saving is absolutely number one.

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If you have that habit built

in, then you have to put your

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money exposed to risk assets.

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have to aim for 10 to 15% average returns

over a long period of time, and the

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only way to do that is to investing in

stocks, real estate and private equity.

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Those are the three main ways

you can compound growth of 10 to

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15% over long periods of time.

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So those, those are the two main

focuses that people have to think about.

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Ryan: I love that you

brought that up, Phil.

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Being April April's Financial

Literacy Month, we're doing some

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good things in Zephyr just about

educating, you know, creating a budget.

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But part of that, one of the

biggest pieces is saving and

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compounding interest, which.

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You know, people I think often

forget about just how powerful it

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can be, but how important it is.

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But also you talk about saving, but I also

have a lot of conversations with people

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about the risk of their clients just

not spending enough come retirement too.

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They, they're so used to saving, they're

worried about, you know, running outta

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money so they're not spending enough.

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Phil Palumbo: Yeah, so this

is another point that I bring

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to the table all the time.

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So when people come in to visit

with me, I mean, focusing on

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retirement has been my entire

career for the past 25 years, right?

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So I've met with hundreds of people and

going through this scenario and, and

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the first thing people are concerned

about, there's two main things that

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people are concerned about, right?

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Number one is being able to

maintain their lifestyle.

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Everybody loves their lifestyle.

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They just want to be able

to maintain that lifestyle.

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And the second thing is the

fear of running out of money.

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And being depending on their children.

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So those are two main, main,

main goals that people have.

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what I tell people all the time, by the

time you're getting ready to stop working

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or retire or make work optional, right?

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By the time you're ready for that,

whatever your habits have been

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for the past 30 years, or greater

or less, that's not gonna change.

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So if you were spending 200,000 a

year, now that you're retired, you're

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not gonna go and spend 500,000 a year.

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because you're just used to a

certain lifestyle and that's, it's

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habitual, and that will continue.

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You're not gonna go out and buy

three Ferraris, two Lamborghinis,

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and then and two additional vacation

homes, one in the one in Aspen, and

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then one in the Hamptons, right?

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You're just not gonna do that.

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You may have desires above and

beyond whatever that may be, but most

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likely you'll stay at the spending

level that you're going to stay at.

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Now, that may increase 10% to 15%.

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For various reasons, right?

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So that's where, that's why you have

to have a little bit of a buffer.

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So if you think you're spending $200,000,

think like 2 20, 2 30, just to give

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yourself a little bit of a buffer.

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Ryan: And you also talked

about just investment returns.

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Now you've gotta, you know, trying to

achieve 10, 12, 15% over an extended

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period of time, and there's a.

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Only really a few options out there.

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And you mentioned them, you know,

people are living longer than ever

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and that probably is putting a bigger

emphasis on the 10, 12, 15% return

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for an extended period of time.

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Does that also, you know, that mindset

for your clients too, because I'm gonna

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age myself here, Phil, when I started in

the industry 20 years ago, it was like.

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And very simply, your allocation

to equity should be what?

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A hundred minus your age, and that

should be your rough estimate of

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what your allocation equities.

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That can't work anymore because

people are living longer.

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They need, is that hard to

get over to is like you're 60.

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You can't just be in 60% bonds.

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Phil Palumbo: Yeah, so that formula

stuff is so ridiculous to me,

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by the way, I always thought it

was even before I became, and to

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really understand the industry.

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And the reason why I say that

right is a couple of reasons.

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Fir, first of all, the two major

risks that people are exposed to,

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which relates to what you just said,

obviously, is number one I always

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thought was inflation risk, right?

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Inflation risk is the risk of

your purchase of power eroding

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over time, and that is a major

risk that people are exposed to.

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That's why, that's why whatever assets you

have right now, you can't just grow it and

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put it all in CDs and fixed income and get

four or 5% because you factor in taxes.

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Inflation, your return on that

money is zero to negative.

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So that's the problem with putting a

good party of money in fixed income

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and bonds, fixed income and CDs, and

a lot of advisors out there half a

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client's money or more in doing that.

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That's a tremendous risk to the

disruption of a client's lifestyle, and

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that's what we're trying to prevent.

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So that's number one.

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And then number two,

this is incredible, Ryan.

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This is something I'm

talking more and more about.

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Is longevity risk is now a bigger

risk, I think, than inflation risk,

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is the risk of you living long and

your money not keeping up with that.

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And the only way for your money to keep

up with that is to invest in what's

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called risk assets, which are stocks,

real estate, and private equity with

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at least 60% or greater of your money.

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Now let's roll it real quick.

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As it relates to this, I get it.

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Well, like I don't wanna take that risk.

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The volatility.

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You gotta ask yourself two things.

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Here's volatility and here's

inflation and longevity risk.

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If you wanna run a, if you run a

one, if you want to run away from

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volatility risk, that means you're

running into inflation and longevity

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risk, which is the real problem.

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'cause volatility is just

short term in nature.

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Right.

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Meaning that when stocks go down,

if you don't sell, it will go

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back up over long periods of time.

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And don't get me wrong, you could have

long periods of time where markets are,

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you know, three 4% that can happen.

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And I get that argument.

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volatility risk is not the

risk, it's the inflation.

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And longevity risk is the true risk to

the main concern that our clients have,

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which is maintaining their lifestyle

and the fear of running outta money.

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Ryan: Yeah, I think that's

fantastic, Phil, and feels as if

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too many people they focus on.

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Like you said, volatility or just losing

their money and they forget about, you

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know, they've still got 20, 30 more

years yet to make this money last, so.

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Great point there.

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Let's talk a little bit

about the financial plan.

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You know, I'm, as I'm assuming,

and I'm sure having a comprehensive

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financial plan in place is the most

important piece to making work optional.

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We gotta have that plan work,

that plan to making work optional.

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Is there part of that holistic financial

plan that might be underutilized?

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We've just talked a lot about

investment management piece, but is

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there something else that may be.

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Isn't considered enough for retirees or,

or folks that are thinking about retiring

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or, or I should say, making work optional.

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Phil Palumbo: So regards to financial

planning, about 70% of people out there do

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not have a formal written financial plan.

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It's back in the envelope writing things

down saying, Hey, I need 10 million.

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I need 20 million, because I, I think

that's my number without any type

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of formal written financial plan.

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That's a tremendous mistake, and

I understand why people don't take

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financial planning as serious as they

should, because in their mind it's all

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about the investments and their return.

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And I get that.

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Yeah, that's a important part.

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But the foundational element of

everything is your financial plan,

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because it's a roadmap for you to

follow along with year after year

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after year to see if you're making

progress towards your goal, number one.

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Number two, it keeps you

accountable to your goals, right?

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So if you're saying you're spending

200,000, the year is up, well, did you

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spend 200,000, number one, number two.

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The goal objective in terms of

return performance is six to 8%.

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If it is, how did we do right?

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If we're we, if we're in a bear

market, is that factored into the plan?

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Right?

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So, so the, the planning aspect is,

is really important to help people

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to, to help people first understand

do they have enough money and can

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they achieve their financial goals?

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Number two, it's a game plan to

be able to follow on a playbook,

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to follow on a consistent basis.

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You know, that's really important

to the accountability of the

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professional that you're working with.

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And then you as the client.

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Ryan: Yeah, very, very good point.

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So, when we're recording this, it's

tax season, what, how does taxes play

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a role in the whole overall plan?

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Do you, you know, it feel as if

tax management, tax planning is

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becoming a hotter topic than it

was maybe five, 10 years ago.

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Is it still underutilized right now?

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Phil Palumbo: Yeah, so Ryan, one of

the most important thing too, I talk

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to clients about all the time is,

you know, I'll give you an example.

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Even besides talking to a client, I

have many money managers that knock on

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my door, hedge fund managers, private

equity, and they say, Hey, my average

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return is 14% a year since inception.

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I said, great.

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I said, what's the

after-tax return of that?

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Well, it's seven because it's

all short term ordinary income.

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The s and p has done 15 over

that same period of time.

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With no extra fees and

less risk, et cetera.

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after tax returns is the most important

function is the most important

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part of of performance, right?

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again, if you have 10% returns, but it's

all extraordinary income there at five,

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that's, then you put inflation in there

at three, you only grow any money by two.

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:

That's a problem.

361

:

So when it comes to construction

of a, of a portfolio, it's really

362

:

important to put in play ways that

you're gonna harvest losses over time.

363

:

Number one.

364

:

Number two, being a long-term investor,

besides the benefit of not touching

365

:

your portfolio, making stupid mistakes,

and just owning great investments

366

:

in great companies over long periods

of time, there's tremendous benefits

367

:

in understanding that philosophy.

368

:

By you doing that.

369

:

You're not turning the portfolio over by

you not turning the portfolio over, you're

370

:

not creating taxable events for yourself.

371

:

So it's, it's, so, it's having a strategy

for harvesting losses is really great

372

:

strategies out, out there today that

can really help you create these losses

373

:

to offset against gains and in being a

long-term investor and that helped defer

374

:

your taxes over long periods of time.

375

:

Ryan: Yeah, so like you mentioned at

the opening part of Palumbo Wealth

376

:

Management, you help your clients and

individuals, business owners exit.

377

:

Doing a successful exit

of their businesses.

378

:

You know, like we said, America's aging

and business owners now are more than

379

:

ever looking for upcoming liquidity event.

380

:

Liquidity events like

selling their business.

381

:

What should these owners consider to

set themselves up for a successful exit?

382

:

Phil Palumbo: A couple of things.

383

:

Really, the, the first most important part

is if you're looking into exit, right?

384

:

You have to give yourself time.

385

:

You can't say, I want to exit,

and you look to sell tomorrow.

386

:

Or you get that phone call from a private

equity company or a strategic buyer and

387

:

they say, Hey, let's sit down, have a

conversation, and then you do, and they

388

:

give you a certain number and you're

like, wow, that number sounds great.

389

:

When the reality is, if you gave

yourself two or three years to

390

:

clean up the, clean up the business,

professionalize the business, right?

391

:

Build in strategic thinking

as an example, right?

392

:

Take away the owner

dependence of the business.

393

:

So just a few examples of

what I'm talking about.

394

:

If you do those types of things, you

may turn the multiple by 2, 3, 4 times.

395

:

So the number of somebody comes to

you, 20 million, right off the gate,

396

:

right out right out of the gate.

397

:

That number may be 30 or 40 million.

398

:

If you didn't, if you went

through a few steps pre-ex exit,

399

:

that could help tremendously.

400

:

So that's number one as it relates to the

after ta, the before tax dollars that you

401

:

would receive after selling your business.

402

:

And number two though, is

the, the estate planning part.

403

:

So the estate planning part is going

through a planning process and saying

404

:

to yourself of this sale, how much

did I put into some type of trust?

405

:

At a discounted price that now

if I sell my business, that asset

406

:

is now outside of my estate,

which grows outside of my estate.

407

:

So when you die, there's no federal

estate taxes or state estate taxes

408

:

depending on what you state you live in.

409

:

So that alone can save

millions of dollars.

410

:

And then post exit, you say to yourself,

well not post, but pre-ex exit.

411

:

You say to yourself, okay, well if

I sell my business for 20 million,

412

:

what am I gonna net in taxes?

413

:

is that number, the number that I

need to live financially independent?

414

:

And which strategies can I

implement to reduce my capital

415

:

gains from selling my business?

416

:

And there are strategies today,

which I talked about before of

417

:

what we do is, is we could help

save up to 90% in capital gains.

418

:

Would, that would give the client more

after tax dollars that they, that they

419

:

could actually live on comfortably

and maintain their lifestyles.

420

:

So these are just a couple of

things to think about that could

421

:

make tremendous difference.

422

:

But the number one question,

Brian, real quick one, one thing.

423

:

The one number one thing that

you gotta ask yourself is

424

:

if you think about exiting.

425

:

Do you think your company's

operating at best in class?

426

:

Do you really think your company's

operating at best in class?

427

:

And if you're, and if versus your

competitors, and if you feel like you're

428

:

not, then you gotta ask yourself is what

can I be doing to get to that level?

429

:

Ryan: That's a great, great point.

430

:

Great advice there.

431

:

And do you think, like you said right

at the beginning, their PE firm walks on

432

:

into your door, offers you $20 million.

433

:

Do you think one of the biggest mistakes

business owners make is they just jump at

434

:

it right away and be like, $20 million?

435

:

Give it to me.

436

:

Phil Palumbo: Oh my gosh.

437

:

I get so excited about what we do here

at my firm, not to sell myself right

438

:

now, but it's just a, it's, it's math.

439

:

It's the reality of things.

440

:

You're a hundred percent right?

441

:

Yes.

442

:

That's like the biggest mistake because

are you le how much money are you leaving

443

:

on the table If you waited a year or

two and be, and if you're a little bit

444

:

patient and clean things up, may be able

to get five, $10 million more, which is

445

:

Ryan: Mm-hmm.

446

:

Phil Palumbo: real money.

447

:

So that's what a lot of business

owners are leaving on the table.

448

:

Now, listen, there are situations,

Ryan, where business owners

449

:

may be completely exhausted.

450

:

They could be health issues, a divorce,

which by the way are reasons, this

451

:

is the most important thing I can

tell you about exit planning, right?

452

:

Right now, of the reason why people

exit is because of what I just said,

453

:

death, health issues, and divorce.

454

:

What does that mean?

455

:

So that means that your business should

always be operating at best in class

456

:

in the event one of these situations

happen, which happens 50% of the time.

457

:

That is so important.

458

:

So if you're a business owner, listen,

just a founder and you're walking around

459

:

and you company's not tightened up,

that be a potential issue where you're

460

:

leaving millions of dollars on the table.

461

:

Ryan: I, I, if I had you asked me that

question, I would've never thought

462

:

that, you know, again, it goes back

to, you lose, it's not an option.

463

:

In those cases, you're

forced to look to sell it.

464

:

So you always have to be prepared, right?

465

:

And, and probably have a plan in place.

466

:

Continuing along with the

aging demographics theme here.

467

:

How does, and you mentioned earlier

too, we talked about earlier on the

468

:

investment management side, you're.

469

:

Employ more risk, more

volatility probably.

470

:

And you shouldn't be afraid of volatility

because of long longevity, but how

471

:

does investment or portfolio strategy

need to shift as clients move from the

472

:

accumulation stage to spending phases?

473

:

Is there, and what are the biggest

risks there in that that shift

474

:

from accumulating to spending?

475

:

Phil Palumbo: So it's, it's the

obvious shift where clients say,

476

:

well, I'm no longer working.

477

:

I don't wanna take risk anymore.

478

:

And I completely,

completely understand that.

479

:

Listen, I'm not a robot, I'm human.

480

:

And so I understand that, and I'm sure

I would feel the same way, but the, the

481

:

client just has to educate themselves,

themselves and really understand.

482

:

Where they stand financially and how much

risk they do need to take so they can

483

:

continue to maintain their lifestyle.

484

:

They really need to understand

the math behind that.

485

:

Ryan, I say all the time that if, you

know, if you retire with 10 million as

486

:

an example, and your spending habits

are only a hundred thousand a year, then

487

:

you could afford to be conservative.

488

:

'cause you're pulling 1% of the 10

million to live on, All math says 4%

489

:

or less, you're okay even five, right?

490

:

But if you're pulling one, and

then obviously you know, every

491

:

year if you factor inflation, you

could put the $10 million in fixed

492

:

income and most likely be okay.

493

:

So it really depends on what your asset

level is, what your spending level

494

:

is, and that dictates how much risk.

495

:

You should be taking.

496

:

Now you may say that client who has

10 million and spending a hundred,

497

:

they may still want to take risks

because they want to provide legacy

498

:

to family members, et cetera.

499

:

So everybody's different obviously.

500

:

risk is predicated on how much risk

you should take is predicated on

501

:

you as an individual, number one.

502

:

number two, what the plan

dictates and how they converge.

503

:

really the advice of the professional

to help guide the client along.

504

:

Ryan: That's a great point, Phil.

505

:

It just goes back to planning too

and, and really understanding what

506

:

you want as an individual and goes

back to making work optional too.

507

:

What do you want, not what you're forced.

508

:

But what do you want when you know

maybe you're working part-time

509

:

or not working and, and what

type of lifestyle do you want?

510

:

I know what my lifestyle is and I'm

gonna have to probably save a lot

511

:

more Phil than what I am now, but.

512

:

It.

513

:

It's one of those things that's

really comes down to what you want

514

:

and expressing that, and like you

said, having a professional help

515

:

you address those needs to align.

516

:

I talk a lot about alignment,

making sure your investments are

517

:

aligned with your objectives, so

518

:

Phil Palumbo: add one

other point if I can.

519

:

So the, the, the part that people

get confused about is how am I gonna

520

:

receive my income from my portfolio,

let's say 10 million, right?

521

:

And what I try to explain to people

is that if you take 10 million and you

522

:

put it in a CD like people did 30, 40

years ago, and you get 4%, 5%, right?

523

:

And so that gives you, let's say

it's 5% that gives you 500 grand.

524

:

But let's say you need,

let's say you need 500 grand.

525

:

If you do that over 10 and 20

years, what does that mean?

526

:

That over 10 and 20 years, you're

getting your 10 million back every year.

527

:

So if you go out five years, so every

five or 10 years you're buying a CD

528

:

you're getting the same cash flow that

you've been getting from the beginning.

529

:

not a practical way to think about it.

530

:

So when people, clients say to me often,

well, how am I gonna receive my income?

531

:

your income is gonna come from a

what we do, a bucket approach, a

532

:

bucket approach, where you have

liquidity bucket, core bucket, and

533

:

we have what's called plus bucket.

534

:

I won't get into details of that, but, but

the bottom line is, is your income's gonna

535

:

come from your interest, your dividends.

536

:

Plus principle appreciation or

sometimes principle depreciation.

537

:

But over time, as long as I'm

pulling out something less than

538

:

4% to give you a distribution.

539

:

Right.

540

:

You, the, the chances of running outta

money over 30 years are extremely low.

541

:

And that's been very well researched

and tested over long periods of time,

542

:

and that's how people should think

about their income distribution,

543

:

which is a big concern on people

that people think about a lot.

544

:

Well, how am I gonna actually receive

this income from this money I have.

545

:

Ryan: Yeah, that 4% rule, it's

amazing how it's withstood

546

:

the, the test of time, right.

547

:

And

548

:

Phil Palumbo: It has, it has,

but when interest rates were

549

:

lower, you know, that number

550

:

Ryan: yeah.

551

:

Phil Palumbo: Now that

rates have normalized.

552

:

It's, it's, it's been up to, it's been,

you know, in line to where it should be.

553

:

Ryan: Yeah.

554

:

Yeah.

555

:

It's nice that finally the savers are

getting benefited from, from decent,

556

:

somewhat higher interest rates, right?

557

:

Phil Palumbo: right.

558

:

I agree.

559

:

Ryan: awesome.

560

:

Phil, you know.

561

:

There's a lot of noise

out there in markets.

562

:

Headline risk.

563

:

You would think based on the headlines,

market should be in a correction.

564

:

In a bo, in a bear market, they're not.

565

:

What is your framework to helping

clients ignore the noise and

566

:

focus on the long term win?

567

:

One of the biggest risks to long-term

success is that panic selling, selling.

568

:

During times of distress, how do you help

your clients ignore that noise and, you

569

:

know, focus on 20, 30 years down the road?

570

:

Phil Palumbo: Yeah, so with repetitive

communication and helping 'em understand

571

:

that we gotta control what we can

control, so we can control is the

572

:

diversification within your portfolio to

mitigate the risk when markets go down.

573

:

Meaning that if s and P goes

down 20, you're not gonna go

574

:

down 20, you're gonna go down.

575

:

Something less than that, depending

on how we structure the portfolio

576

:

and what we're gonna actually do when

volatility strikes is we'll take,

577

:

we're gonna take advantage of that.

578

:

By selling the winners at that time,

which is cash and fixed income.

579

:

For example, gold, which we

have in a portfolio, and we have

580

:

commodities too, you know, in this

environment that's doing well.

581

:

And you take that and you buy more of

the stocks that we own in a portfolio

582

:

that are down because of the volatility.

583

:

And so that's the second thing

and really most important thing.

584

:

So those two key things, Ryan, over time,

you're gonna have tremendous success.

585

:

were times a perfect example of a

client during COVID that called me up

586

:

and said, Hey, Phil, they wanted to

sell completely out of their stocks.

587

:

And I said to them, I said, well, if

you sell outta your three and a half

588

:

million dollars retirement account

and we go to cash, like, and, and

589

:

things really greater, what do you

think you're gonna be able to do?

590

:

If I give you the check of three

and half million dollars of your IRA

591

:

account, do you think anybody to go

to bank and they can give you three

592

:

and a half million dollars of cash?

593

:

Right.

594

:

They're not, you know, that's

that, that we can't even get 10.

595

:

We can only get, like, we can only

get $10,000, you know, per day.

596

:

So I just, people should just, you

know, you just gotta continue to educate

597

:

them, understand and make, make sure

they understand they're long-term

598

:

investors who we're not traders, and

what do we do when volatility strikes?

599

:

We know we're gonna do, we're

gonna buy things cheaper and

600

:

then sell things that made money.

601

:

So it's buy low and sell high, which

is like the old Dodge that, you

602

:

know, we've talked about for so long.

603

:

Ryan: Yeah.

604

:

I love that you brought up education.

605

:

I think it's so important, just educate

your clients, investors out there,

606

:

the importance of staying invested

during times and, and it make it.

607

:

It's an opportunity too.

608

:

Valuations come down, opportunity

to buy, like you said, and also

609

:

glad you brought up diversification.

610

:

It's crazy this year based on headlines,

you would think, like I said, everything

611

:

is down, but that's not the case.

612

:

There's a lot of, you know,

sectors, areas of the market right

613

:

now that are up year to date,

despite everything that's going on.

614

:

So diversification is so important

despite people always just,

615

:

you know what I want Nvidia.

616

:

Right.

617

:

So

618

:

Phil Palumbo: That's right.

619

:

Ryan: Bill, last thing, let's stay on

this Emotions be, you know, we know

620

:

investing is very behavioral emotions.

621

:

It's hard to control those

emotions, like you said earlier.

622

:

Why is controlling emotions when

it comes to investing, you know,

623

:

so important and being emotionally

prepared, so important when investing.

624

:

Phil Palumbo: Because it's gonna,

it's gonna allow you to stay on

625

:

track to achieving your main goal.

626

:

So you gotta ask yourself,

why are you investing?

627

:

I'm investing because I need my

money to keep up with inflation.

628

:

I need my money to last

if I live a long life.

629

:

So that's why I'm dealing with

this headaches of volatility.

630

:

And it is a headache.

631

:

I mean, it, it is.

632

:

I wish clients didn't have to deal with

stocks and you know, the up and down

633

:

movements of stocks and all this political

nonsense that's going on, that's driving

634

:

people crazy, that's making people

ask themselves, should I be in stocks?

635

:

So it's almost like, it's

like anything else in life.

636

:

It's a marathon, right?

637

:

I dunno if you ever ran a marathon, but

when you run a marathon, you know, in

638

:

the beginning of the marathon it's okay,

you're feeling decent, all of a sudden you

639

:

start to kind of go through hell, right?

640

:

Because it's like mile

13 and mile 17, then 20.

641

:

And then, but you, but you push

through it, cross the finish line

642

:

and, and that's the best example.

643

:

What I can give with people is

that investing is a marathon.

644

:

Unfortunately, you're gonna

go through pain at time.

645

:

But the reason why we're going through

that pain is so we can cross that

646

:

finish line for you and your family,

and that's why we do what we do.

647

:

It's like anything else in life,

Ryan, and you know, nothing.

648

:

It's, you can never get

a cake and eat it too,

649

:

Ryan: phil, that's a great point.

650

:

I'm really glad you brought that up.

651

:

And diversification, focusing on

the long to term investing, like you

652

:

said, it's not, it's not a marathon.

653

:

One thing I talk, especially like my mom.

654

:

Who has retired.

655

:

It's like, put the phone down, turn

the TV off for a while, stop following

656

:

the news for a little while, because

all the headlines, doomsday headlines,

657

:

it just adds to, like you said, that

volatility, that angst a lot of times.

658

:

So, Phil.

659

:

Thank you so much for coming on this show.

660

:

Great insight, very fun conversation.

661

:

I loved all the information you shared and

tips to, you know, achieving, I would say

662

:

retirement, but, or making work optional.

663

:

I love it.

664

:

Where can our audience get more

information about Palumbo Wealth

665

:

Management, as well as your

podcast, the Palumbo podcast.

666

:

Phil Palumbo: Yes, so my website is www

dot palumbo, P as in Peter, a LUM as in

667

:

Mary, BOW like William, M like mary.com.

668

:

You could find all

information about my firm.

669

:

My podcast is Palumbo Pulse.

670

:

The Palumbo Pulse.

671

:

A you'll see that there as well,

which has some great information and

672

:

insights and that's, that's where

you could just Google me and you

673

:

could see various interviews I've had

on major networks and and whatnot.

674

:

So it'd be easy to find me if you

put in my name, Philip Palumbo.

675

:

Ryan: Perfect.

676

:

Perfect.

677

:

Awesome.

678

:

Phil.

679

:

Thank you so much and thank you

everyone for listening to this episode

680

:

of zephyr's Adjusted for Risk podcast.

681

:

You can watch all of our other episodes

on the Zephyr YouTube channel and

682

:

all your other channels that you

watch your favorite podcasts on.

683

:

Please be sure to like and

subscribe to those channels

684

:

and give us follow on LinkedIn.

685

:

Thank you very much and have

a great rest of your week.

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About the Podcast

Adjusted for Risk
Your weekly guide to timely market analysis, investment strategies, wealth management tips, and engaging discussions to empower investment professionals
Hosted by Market Strategist Ryan Nauman, Adjusted for Risk brings together financial markets, investments, economics, wealth management, and life to help investment professionals make sense of what's happening—and prepare for what's next.

Ryan sits down with industry leaders, investment experts and thought leaders to explore the trends driving markets and influencing investor behavior, from ETFs and SMAs to portfolio construction, AI, the economy, and the evolving wealth management industry.

Expect insightful conversations, actionable ideas, and a fun, engaging approach to the topics that matter most to financial advisors, wealth managers, portfolio managers, and investment professionals.

Cut through the noise. Gain perspective. Make more informed investment decisions.

Subscribe to Adjusted for Risk and stay ahead of the trends shaping markets, investments, and wealth management.

Adjusted for Risk — Cut Through the Noise. Invest With Perspective.

About your host

Profile picture for Ryan Nauman

Ryan Nauman

As Zephyr’s Market Strategist, Nauman provides thought provoking analysis and research on market trends across asset classes, sectors, and regions to help empower better asset allocation strategy decisions. His ability to navigate complex market dynamics and identify emerging trends has made him a trusted voice among investors and industry professionals alike. He is an accomplished investment strategist who has spent the last 22 years in the investment management industry ranging from working with plan sponsors, managing the investments of retail investors, and providing actionable thought leadership to investment professionals.
Ryan Nauman is the host of the popular Adjusted for Risk and Inside SMAs podcasts. He is a well-respected investment industry strategist regularly featured on Charles Schwab Network, Yahoo! Finance, Bloomberg TV, Bloomberg Radio and Chuck Jaffe’s Money Life podcast. His opinions and market expertise have been published in Reuters, CNBC, Bloomberg, MarketWatch.com, Yahoo! Finance, and the Wall Street Journal.
Prior to joining Zephyr, Nauman served as lead Investment Manager for a large financial planning practice. He also spent several years as an investment analyst conducting manager due diligence and creating mutual fund lineups for over 100 Plan Sponsors while overseeing $1 billion in defined contribution plan assets.