This week on Make It Last, Mark and Victor will be discussing two crucial pieces of advice you need to know for holiday shopping, as well as the challenges the economy is facing and how they will affect you this holiday season.
They’ll also be discussing the psychology of money, both as a concept and as a book written by Morgan Housel. Victor explains the importance and value of having a financial advisor that will prevent you from making emotional decisions with your money.
Finally, Mark and Victor wrap things up with a little game of Taxes Trivia!
Click here to watch Victor’s latest appearance on PIX11 News
Sound advice for holiday shoppers worried about shortages and high prices featuring Financial Advisor Victor Medina on NY1 News
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Make It Last with Victor Medina is hosted by Victor J. Medina, an estate planning and Certified Elder Law Attorney (CELA) and Certified Financial Planner professional (CFP). Through his law firm and independent registered investment advisory company, Victor provides 360º Wealth Protection Strategies for individuals in or nearing retirement.
Full Transcription Below
Mark Elliot: Welcome to “Make It Last” with Victor Medina, I’m Mark Elliot. Victor of course has two companies ‑‑ The Medina Law Group and Palante Wealth. Victor focuses on traditional estate planning, asset protection, retirement distribution, proactive income tax planning and it is December. We are talking a little Christmas time. That is, you know what that is Victor, don’t you?
Victor Medina: I do. It’s enough track. It was sweet. I thought I was going to have to dance to this episode instead of being on the radio. I didn’t know there was going to be a show.
Mark: The nutcracker. I knew you would know that. You are right on top of that. Hey, we are going to talk retirement on this program today as well. If you have any questions, or concerns, you can always give the team a call. There is no cost, there is no obligation to share with the team, it’s 856‑506‑8300. I know you’ve been on New York television here lately talking about some of the challenges with trying to get stuff for Christmas, all the things with inflation and gas prices and all that. Tell us a little bit about your time on New York television.
Victor: I actually had two appearances. One was on New York 1, which is a spectrum channel. Then, the other one was on Pix 11, which is the old channel CW, I guess off of it. They had me on talking about the global supply chain, the struggles that are going on there, as well as shopping on Black Friday and Cyber Monday.
What I shared with them, which was interesting for me to find out about and then share advice is how well the general economy’s doing on this front, there’s a lot of concern about the global supply chain. There were some regulatory things that happened to open up and free up the distribution channels.
At the same time, there were also reports from Black Friday that the foot traffic was up over last year, clearly because people could go outside, and the expected overall spending was going to be a 10 percent increase over last year. I think that things are looking up.
I did share this piece of advice. I’m going to give it to you for free, Mark, because I like you. You got to be careful on two things. The first is, there’s going to be…It’s almost like a black box of shipping expenses. Because there is the public perception that things are going to be difficult to get, if you shop late, you’re going to watch shipping charges go through the roof.
Are they more expensive to get on a UPS truck? No, they’re not. UPS is not jacking up its prices, but the retailers are. The second thing is, behavior on websites is something that’s tracked to the nth degree. They know exactly where you’re looking, where you pause, when you scroll, where your mouse is.
One of the things that they’re doing is they’re tracking people that leave and then come back. If you want to get a great deal, what are things you can do is you can go shopping, put something in your cart, and then leave.
It’s like the old thing when you’re going to buy a car, you got to get up. You’re like, “No, I don’t need it right now,” and they come running until you take another. You’re going to get an additional discount from many retailers, an extra 10, 15 percent to induce you, because they knew that they were this close to hitting the buy button. Anyway that’s some of the stuff that I shared on TV recently.
Mark: You’re exactly right, too, because even the National Retail Federation, Victor, says American spent almost 790 billion with a B last year on Christmas despite the pandemic. They are saying exactly what you said, that the holiday sales will grow by another 10 percent this year than they’re expecting.
Now when it comes to Christmas shopping, and you talked about on TV in New York about the supply shortages, shipping delays and all those kinds of things. Do you remember this movie?
Rita Wilson: You got the doll, right?
Arnold Schwarzenegger: The doll.
Rita: That turbo man doll. I asked you to pick one up two weeks ago.
Arnold: I got it. I got the turbo man doll, the one that has those things to shoot out in front with the rock and sock and jade back, and the dead, realistic voice box that says “It’s trouble time.” I got it.
Rita: Good because at this point they’d probably be impossible to find.
Mark: Rita Wilson, Tom Hank’s wife, and Arnold Schwarzenegger in the 1996 movie “Jingle All The Way.” I believe that Arnold did not get the turbo doll and the rest of the movies. [laughs] I’m trying to find one. I would remember the Cabbage Patch craze. There was an Elmo doll or something that was a craze. Anything that your kids had to have?
Victor: They did. I think even more recently. Everything about this generation is all about gaming systems. We didn’t have one item like the Elmo doll, but trying to locate the latest X‑box or PlayStation is always an exercise and shopping the deals.
I remember when the last one came out, I was a mad man consumed. Almost put my business on the shelf refreshing pages on Walmart, Target, Best Buy. When they were doing drops into releases of the X‑box gaming system. I’m absolutely sympathetic to Arnold’s play.
I think in that movie he was tackling people in order to get the doll. That would have been me if I was able to get in the store last year.
Mark: Now, though, you got Aiden, that’s a senior. Lucas is now in ninth grade. Dylan is in third grade. Any of them a challenge at this time of the year for shop? Lucas and Aiden, Lucas may be a little easier than Dylan. Dylan is still super excited about it, I would think. Everybody is always excited.
Victor: He’s definitely super excited. Mario, our Elf on the Shelf, arrived recently because it is the Christmas season. We’ve got a season of that coming up. Of course, Mario, for those of you that don’t know the alpha child flies home and flies back the next day, and has to be in a different location.
When Dylan wakes up, he’s always looking for him in the morning. That’s always an adventure. I remember when we first got the Elf on the Shelf, Mark, I had to explain to actually Aiden because we got it back when he was a child, very young child, about union labor practices and how it was bad to ask Mario to work on the weekends.
Mario didn’t work one Sunday night, he didn’t move one Sunday night. I had explained to him he had a collective bargaining agreement. At that point in time, Aiden’s eyes glazed over. I could move on from that era but since then, there seems to be a reminder that comes on my phone on a regular basis with the 10:00 PM and Mario. I don’t know why it’s on my phone, but it comes up every day.
Mark: We’re talking right now a little bit about the holiday season. One of the challenges I’m sure when you’re creating that Make It Last plan for the retirement is it’s easy to forget things that aren’t billed monthly, for example.
When you’re trying to put that spending plan together, whether you pay your insurance annually, or you do this annually, and you think of the month by month bills, Christmas, holidays, birthdays, those are things that are easy to forget as well, I would imagine.
Victor: They are easy to forget, especially because they’re not automatically deducted from your account the way they would set up bill pay. So much of our lives is lived on a monthly budget.
Our cell phones deducted that way, our Netflix subscription is deducted that way, but when we get to holiday shopping, you have to dig into our pocket. It doesn’t come out automatically.
A lot of the clients that we work with are generally frugal and prudent people, which means that they have extra money in the account. Part of what we have to do in terms of the overall plan for the year is first coach them through the idea that they don’t have to spend everything just because it’s there.
The idea that they can spend it doesn’t mean necessarily that they have to spend it. It might be a great year to focus on a smaller number of gifts, more meaningful things and not just spend it out of there.
At the same time, we’re thinking about how to generate the cash for them if they do need to dig in for some extra money that’s not part of their monthly budget. We want to make sure that we are well‑positioned from the standpoint of liquidity in the ability to rate access cash for them not to be dependent on market forces. Routinely, it’s volatile in the last quarter of the year.
We don’t want to be coming in and out of the market to pay for holiday bills because of that. You are even coming into January. The overall plan is important especially including expansion points for things like holiday shopping to make people comfortable.
We don’t want this to be an anxiety ridden event where you’re worried about where it’s going to be coming from and did you overspend. We want to know that it fits into the overall plan and that people are still going to be OK.
Mark: When you talked about shipping delays and shipping cost going to be a little bit more expensive this holiday season, we understand that there are going to be some challenges. Inflation is certainly a factor this holiday season.
Kid’s shoe prices, for example, are almost up 12 percent over a year ago. We know traveling is getting in the car, it’s costing us more than it did a year ago at this time. Is this something we need to be aware of as well? I still think people will go because they didn’t get to go last year, they’re going to be excited to go this year.
Victor: That’s much of the report that’s out there is that the increased in foot traffic is people’s desire to get out and to have an excuse to get out. While we’re still navigating health reports about whether or not it’s the best idea to be out in public, or to be out without a mask, or to get your booster shot, or be vaccinated.
That continues to be a source of discussion no matter where you are, and probably will continue to be that way. I think that the prevailing sentiment for folks is that they want to find an excuse to get out. Shopping for the holiday season gives them that excuse.
Everyone spent last year scrolling through their mobile devices and having all the packages delivered. This year, if shipping becomes a challenge for doing online related things, then traditional retail foot traffic might replace it.
I think that part of the struggle is that a lot of retailers aren’t carrying the breadth of things that they normally would. People are going to have to put that into their timing plan, Mark. If you’re going to go shopping using the traditional shoe leather method and find that you can’t find what you’re looking for, then in replace of that you can go back online.
If you’re doing that mid‑December, you’re doing in the last week or so, you should expect that your shipping charges are going to be much more expensive than you could have paid if you had done the shopping a little bit earlier.
Mark: We’re talking the holiday season. We wish everybody a super Merry Christmas and a Happy New Year, obviously. I want to give you a chance because before we got on the air, you were telling me a little Thanksgiving story. [laughs] That was humorous it happened this year.
Victor: We had Thanksgiving plan, but we were going to host it in our house, Mark. It wasn’t going to be a big affair, like lots and lots of people coming in but one of the most important people that were going to show up was my sister who’s in Connecticut.
I love cooking. It’s one of the things that’s a hobby of mine. I wouldn’t put myself at a super high‑level, but people like what I cook. For Thanksgiving, I take it on as my responsibility to essentially make everything, all the side dishes, the main bird this year.
We had a deconstructed Turkey. We made the dark meat separate from the breast meat. I was going to cook everything. The thing that I stink at and I asked my sister to make was a salad. I said listen, “If you can make the salad and bring that, that would be great.”
Wouldn’t you know on Wednesday before Thanksgiving she gives me a call in the morning and she says, “You’re not going to believe this, but her in‑laws, her husband’s parents, came down with COVID and they were around the kids.” She said, “We ought to quarantine and not show up. I don’t think that we can make it.” By the way, good end to the story, nobody was severely ill, they all recovered. The part that was amusing [laughs] is that our poor sister finds herself on Wednesday morning before Thanksgiving, when all of the grocery stores are out of anything that looks like a turkey, with nothing in her hands but salad.
She was swearing me up and I said, “I can’t believe that you only asked me to make a salad.” She said, “I’ve got nothing here.” She ended up going to the grocery store and found the most pathetic plastic turkey dinner for one bowl. It was like two slices of breast with some unappetizing gravy on top.
She said it was the most miserable Thanksgiving Day they’ve ever spent. [laughs] I feel horrible for her. I couldn’t even invite her for a Friendsgiving on Saturday, which is what we shifted towards. Hopefully, I’m going to see her for Christmas Day. She doesn’t know it yet, but I’m bringing a salad. I’m going to show up with a huge salad to repay her for that. [laughs]
Mark: There’s always things that happen, we have to be able to adapt. There is no question about that. At the end of the day, though, so many people that have confusion when it comes to retirement. If you’re worried about being able to afford retirement, you’re not alone. In fact, a SimplyWise Retirement Confidence Index indicates 44 percent of Americans are worried they will never be able to retire.
Charles Schwab’s latest Modern Wealth Survey says only 33 percent of Americans have a written financial plan, which Victor means nearly 70 percent of us do not have a written plan.
Victor: It’s so hard. When I meet with new clients, if you were to call and come in, one of the first things we do is look at our overall plan. It’s the first time that people have happened to see what an entire plan would look like for their retirement.
Too often, they’ll meet with a financial professional, is going to make recommendations about what products to buy. It’s very unusual that they’ve seen a plan that is for their entire retirement that has built‑in flexibility, the way that we create one.
The first pillar of that plan is creating income for people in retirement because people are worried about making sure that they have enough. The way that they are getting security about this, make sure that they’ve got a check coming in.
I have created a tool for people to evaluate how they’re going to create income in retirement. What you can do, if you’re interested in learning more, you can go to 920income.com. That’s 9‑2‑0‑I‑N‑C‑O‑M‑E.com. It’s going to give you a download about how to make your money last as long as you do, and you just enter your name and your email.
We’ll deliver that to you automatically. That’s a free resource for people. It’s a good beginning part for you to evaluate whether or not you’re on the path to having a very successful, comfortable retirement. Maybe you should have a conversation with us by reaching out and starting that process.
Mark: Again, you could always give the team a call, 856‑506‑8300. There’s no cost. There’s no obligation. There’s no pressure, either. The team would love to help you. They just don’t know if they can. 856‑506‑8300. It’s a great time to figure out where you are on your road to retirement, maybe already retired, maybe within 5 or 10 years of retirement.
The sooner the better, but it’s never too late. You could already be retired and have some concerns. Hey, the teams of Palante Wealth and Medina Law Group are here to help. 856‑506‑8300.
We’re getting started today with “Make It Last,” with Victor Medina. We got a lot to get to. Stay with us, we’re back right after this.
Mark: Welcome back to “Make It Last” with Victor Medina of the Medina Law Group and Palante Wealth. Medina Law Group, so Victor is a practicing estate planning and certified elder law attorney. It’s flat fees. It’s about client care and making sure that things are set up the way you want to have them set up, wills, trusts, powers of attorney, those types of things. We need to plan though.
Victor started this company, the Medina Law Group, back in 2006. You can find out more by going to the website, medinalawgroup.com. Because of Medina Law Group and the clients that Victor had, they said, “How come you can’t help me with the other retirement things that I have to deal with?” He said, “Well, I guess I could.”
Victor now is a certified financial planner professional, a registered investment advisor. Palante Wealth is really about holistic planning for your retirement. Started that company in 2014. It’s palantewealth.com, P‑A‑L‑A‑N‑T‑E, palantewealth.com.
Easy, though, to remember the number maybe, instead of both companies. Being certain, go to their websites, medinalawgroup.com, palantewealth.com. It’s 856‑506‑8300, if you have any questions or concerns. 856‑506‑8300.
Victor, if I googled retirement planning or investing or tax planning or budgeting, spending plans, those types of things, would I get quite a few hits?
Victor: Yeah, just a couple maybe. Maybe a few people that are looking to talk to folks that are about to retire.
Mark: You go online, and you google those things, you get millions of articles about all those topics. There are certainly important facts to know. When it comes to your financial future, knowledge is power.
There is more to financial success than books marks. There’s a psychology of money. Morgan Housel is a guy that Victor has heard speak. Morgan Housel is a partner at Collaborative Fund and a former columnist at “The Motley Fool” and “The Wall Street Journal.”
He’s the author of the book, “The Psychology of Money.” Morgan says there’s more to financial success than what you know about money and the world of finance.
Morgan Housel: There’s so much evidence that what matters in investing is not about what you know, it’s not about how smart you are, it’s not about where you went to school, it’s just how you behave. It’s about your relationship with greed and fear.
Your ability to take a long‑term mindset, who you trust, how gullible you are, who you seek your information from, that’s what actually matters. That’s what moves the needle. We tend to ignore that because it is not analytical.
Mark: My background is sports. I love the psychology of sports. I coached golf at Kansas State. I’ve coached college football. I enjoy. I coach quarterbacks.
The golfers and quarterbacks are really interesting when it comes to the mindset, because you have to get on them a little bit, but you can’t destroy their confidence. They’re important that, as a golfer every shot counts, as a quarterback, you’re in charge of the offense. You have to watch that.
The psychology of money is intriguing. That’s your bailiwick, I would think. What are your thoughts on what Morgan said about greed and fear? We have spenders and savers and all that, within a marriage. You got a lot of challenges on the psychology side, don’t you?
Victor: I like what he has to say, Mark, is the idea of the interplay between psychology and money is a very important one. I’m fond of saying that the investment strategy is something that a lot of people can come up with and be successful.
You could buy a portfolio, and it probably would work most of the time in terms of accumulating assets. There’s not a lot of secrets in that area. Part of the role that I have to serve in clients’ lives, is helping to keep their mind grounded on what is going on with money.
One of the things that both invoke fear and greed elements of it is people’s expectations on return in retirement, like how much their account is going to grow, and so the fear aspect of it. What happens when the account might have some market correction issues, we have to control for that.
The greed aspect is expecting that it’s going to grow as much as it did when they were accumulating assets for retirement. But neither of those things is entirely accurate once we get into retirement.
Part of my job is to help people set their expectations the right way. They can create a good psychology of their retirement money, if I could borrow a little bit from Morgan’s title. The goal there is to have them understand a few things. The first is that when we’ve created a plan for you, what you were doing is giving you the conditions that you can create confidence about what we’re doing.
Specifically, it’s not just telling you, “Hey, don’t worry about the market. If it’s down, it’s not going to be a big deal.” Because there’s going to be some dissonance. In your own mind, you’re like, “But I’m looking at the account, Victor, it’s down. I should worry.” It’s that we created an account of safe money that isn’t subject to the stock market.
When I say to you, it’s going to be OK, you shouldn’t have any fear about that. You will recognize that it’s being a statement of integrity, going to be reminded about our plan and say, “OK, you’re right.” and we can move on. It factors in very heavily even at the most fundamental level of creating what is the elements of a good retirement plan.
Mark: You think about it, things happen in our lives, we’re human beings, so we do get emotional. If we tend to make our decisions, the market went down, and we go, “We got to get out, we got to go to cash.” That’s an emotional decision, or, “Hey, it’s a great opportunity for me to make more money, maybe.”
The way we look at things is important. That’s why Victor and the team, when they sit down and talk with you, it’s about your picture. If you think about putting a crossword puzzle together, for example, the key is the picture on the cover of the box. You need an idea of what you’re trying to create. The picture on the box tells you.
That’s what Victor wants to know about your retirement. What does your picture look like? What is your perfect day? How are you going to spend your time? What are you going to do, get to travel, stay around the area? What’s your plan? It goes so much deeper than this.
The psychology of money plays into some of the plans and Make It Last plan, income, investment, taxes, estate planning, all of that Palante Wealth can help you with the Medina Law Group.
If you have questions you want to learn more, you’re like, “I don’t really have a plan. I think I’m gonna be OK but I don’t really know for sure. I would like to know more.” What a great opportunity to talk with the teams, 856‑506‑8300 is the number. 856‑506‑8300. You started Medina Law Group in ’06. You started Palante Wealth in ’14. I still think you’re going to be able to answer this question. If you go back to 2006 or 2007 through 2008, March of ’09, that was the banking and housing financial crisis. Then after March ’09, we go on the longest bull run in Wall Street history.
In ’08, people are losing 40, 50 percent of the money, and the market’s going, “I’m never going to be able to retire.” Then, you fast forward to 2020 pandemic, and well over a million more than expected retired because they’re like, “Holy cow, this is life and death. I better retire because I think I can. I better enjoy the time I have left.”
Two totally different mindsets, one, “I’m never going to be able to retire.” “Ooh, pandemic. I’m retiring right now.” Those are emotional decisions, aren’t they?
Victor: They’re emotional decisions. It’s said that people make a decision emotionally, but they rationalize it with logic to justify it off of it. The difference, of course, is that in 2008, we were barely recovering from setbacks that had happened before then. We had dot com related stuff. We had the housing crisis.
There were people that saw no light at the end of the tunnel. When we were in the throes of the bull run for almost 12 years, before the pandemic happened, and we had a reset. When where was a reset of the stock market in March of 2020, it resets to essentially 2018 levels.
What that meant for most people, is they look at their account values and said, “I’m pretty good.” “I am where I was just a couple of years ago.” They were able to justify an emotional decision to make the retirement decision to retire with logic. They looked at their account and said, “Well, this is where I was before. Let me get out, it’s going to be OK.”
If they work with somebody like us, or they come and work with us, we would give them the plan to confirm that they would be OK. I think that’s the how those two things work together, the emotional and the logical side of making decision as monumentous as deciding to retire.
Mark: We’re talking today about the psychology of money, both as a concept and as a book written by Morgan Housel. Again, Morgan Housel is a partner at Collaborative Fund. He’s a former columnist at “The Motley Fool” and the “Wall Street Journal.” He says we almost have it backwards with how we teach about finance.
Morgan: What is most important gets most ignored in this field. Even when we are teaching basic financial skills to people, it’s the math equations and how to balance a checkbook which are great skills. I’m not demeaning those in the slightest. There’s so much evidence that all that matters, that’s the right word to use, is your behavior with money.
I say that because you can be the smartest person in the world, you can have a PhD in finance from MIT, but if you lose your head during a market decline, if you panic during a market decline, none of your intelligence matters.
Mark: Your response.
Victor: The flipside of this is true too, Mark, that if you start to chase winners within a sense of greed, then none of your smarts matters. If you’re falling in emotionally, I like a lot of what he has to say on that.
There are metrics that you can control for, about how well‑diversified you are, how protected you are against downturns. There are academically grounded decisions that you can make, but the most important decision is the behavioral one that lets you stick to your guns and stick to that plan over that period of time.
We’re fond of saying in our office, we control what we can control and let the other things happen. Expect them, knowing that they’re going to occur. Sit back and observe. Observe. Enjoy what’s going on. Enjoy the journey of it and feel like we don’t have to react.
I think that’s the value in part of an advisor for folks who questioned a little bit, Mark, about their ability to do that. I serve in a role for clients as a backstop to making a bad emotional decision.
The most sophisticated or most psychologically advanced of our clients recognize that that’s the value that they bring. They understand that we are a backstop to the worst decisions that they could make an emotional setting because we stand between them.
The best conversations that I get to have are ones in which we take no action at the end because what I’m doing is I’m coaching clients through the questions that they have. Legitimizing those questions. Should we be in gold? Should we buy bitcoin? What’s going on with the market? What do you think is going to happen? Real, genuine concerns.
We speak through them giving them all of their academic deference and then we come out with a decision that says, we ought to do nothing right now, and continue with our plan. The client’s comfortable with that decision, I know that I’m comfortable with that decision. It’s a great conversation to have.
People have a tendency, Mark, towards action. Sometimes that’s a situation where that can end up biting you. Specifically, on a retirement plan where you don’t have the time, or the resources to make up a bad decision. You’re going back to work and your window for retirement, that may not necessarily cover that kind of mistakes.
There’s tendency towards action, and then because it’s charged emotionally, and then having an advisor like us in your life to prevent you from making a mistake is a good combination to ensure retirement success, to have a better chance for that.
Mark: We’re going to continue talking about the psychology of money, we got a couple more cuts coming from Morgan Housel in our next segment. Here’s the final question in the segment and you might have to think about this a little bit because it’s an interesting question of common sense.
Common sense is not related to our IQ scores. Are there other areas where our behavior matters as much as or more than our actual intelligence?
Victor: I can think of a couple, Mark, where emotional or common sense is better than intelligence, and where I’m thinking about is where intelligence starts to lead us down a path where we think we’ve got it figured out.
There’s a lot of confirmation bias where when we go seeking out research, we’re going to seek out the stuff that supports our particular view. It reminds me, for example, of a client that was in a particular industry, happened to be the pharmaceutical industry.
In thought, they had figured out something that was going on with a merger. I said, “Look, I get that you’re a little bit closer to this than I, this is your profession. You have some views on what’s going on, and you think those views are good.”
“I’m going to tell you what our approach suggests about your thinking on it, which is that common sense suggests that we shouldn’t be chasing after these types of urges. We should have a well‑diversified portfolio.”
Continue on with my conversation, but at the end of it, if you want to go try, go ahead, and you can lord it over me if you’re right. It turns out that they chase this with a small portion of it, at one percent of their total net worth, lost almost all of it. Came back and said, “Thank you for not letting me chase more than what we could withstand off of it. It was a fun exercise, but you’re right. We’ll go back to it.”
I think what we’re doing is when somebody gets so certain that their answer is going to be right, that intelligence overrides common sense and sometimes gets in the way.
I do see that, not just in the example that I gave you but somebody that’s familiar off of it, but also see recency bias. That somebody did something for a period of time to get them to the agreed net worth going into retirement, and believe that they have a superior strategy and they can continue on it.
With common sense suggests, what brought you here may not be what you need to take you home.
Mark: I like that. The recency bias. It’s like the Patriots are going to win every Super Bowl. Oh wait. Brady went to Tampa Bay. That may slow down their Super Bowl run. There are certainly things that we look at the past, and it doesn’t necessarily forecast the future, and that’s true when it comes to retirement planning. You think about your legal needs, estate planning, and those types of things ‑‑ wills and trust.
Medina Law Group can help you in that area, your financial needs. Palante Wealth is here to help you with that. It’s really about you. In your situation, what do you want?
What do you want your puzzle picture on the box to look like when it comes to your retirement? 856‑506‑8300, to chat with the team. There’s no obligation for this. There’s no pressure. It’s all about you.
Can the teams of Medina Law Group and Palante Wealth help you accomplish what you would like to accomplish, when it comes to the legal end, the financial end of your life? 856‑506‑8300. It’s as if the entire world of finance is putting the cart before the horse when it comes to how we learn about financial concepts, and how we implement them in the real world.
We’re going to talk more about the psychology of money with Victor Medina right here on “Make It Last.” We’re back right after this.
Mark: Welcome back to “Make It Last” with Victor Medina of Medina Law Group and Palante Wealth. We’re talking about Morgan Housel’s book, “The Psychology of Money.”
We got some sound from Morgan as well. If you’re joining us, Morgan Housel is a partner at Collaborative Fund. He’s a former columnist at “The Motley Fool” and “The Wall Street Journal.” He’s the author of the book, The Psychology of Money.
Victor’s heard Morgan speak. It’s like the world of finance is putting the cart before the horse, when it comes to how we learn about financial concepts. We talk a lot about financial knowledge and know‑how, but today we’re learning there’s another side. There’s the psychology of money. Here’s what Morgan said about that.
Morgan: If you get caught up in the excitement of a bubble, none of your intelligence, none of your academic credentials, none of the fact that you know the formulas, none of that matters if you’re going to lose your cool when it matters most.
That’s why the behavior is not just an important part, it’s the base of the pyramid. Until you’ve checked that box of figuring out your own financial psychology, none of the analytical skills matter until then.
Mark: Do you think when you sit down with people for the first time…They’re coming in because they’re getting ready to retire They’re not sure about all. They’ve never retired before, so they’re coming to seek some advice.
Is that one of the most important things you find out about, let’s say, a married couple, for example, is you find out where they are thinking‑wise, risk‑wise, retirement‑wise? You have to get a feel for the people themselves, not necessarily IQ and dollar amounts, and that, right?
Victor: I think it’s even less…Exactly right. I’m sorry, Mark, you’re right. It’s even less important than, for example, their net worth of the balance sheets that they’re coming in with, is making sure that they have an appropriate psychology that works with our approach.
Sometimes we have to massage them along the way to get them comfortable because not everybody comes in perfectly ready for retirement or what our strategies are. There are people that still come in wanting to do what it is they did before, bullheaded about the returns that they can expect or what a retirement plan looks like. Those are folks that we excuse and say, “Listen, we can’t work with you.”
Thankfully, we’re blessed enough to be busy to pick and choose the clients that we work with. For those people that are coming in with a cool head about retirement, understand that they’re going to be working with us as the experts in their world because this is what we do day in and day out.
Now, sometimes we got to have to invest a little time in getting their heads around the concepts of retirement. They’re just a little bit different. We see it so many different ways. I am gauging what the experience is going to be like because I think it’s a little less important. What they did before is to…
That’s why we talked so much on the show about there’s no being no judgment when somebody comes in. I’m not focused on what people did before. It is a little bit of a precursor, but I am very focused on what they’re going to be like going in the future. Morgan’s quote, by the way, in person, he is great, he is fantastic in person too.
He’s hit the nail on the head, when he talks about having people react emotionally to things that are going on. He gave his example and immediately thought about people chasing a winning streak, the casino.
When we’re in the casino, we recognize, “Hey, the chips are stacked against us, literally in that world. Maybe we ought not to be chasing an emotional decision off of it.” There are going to be so many other ones that don’t come with the atmosphere of being in a casino, chasing housing prices as they come up, looking at emotional turns that are coming in, an unexpected bill.
How it comes and affects, what’s going to be going on in the stock market, how that happens, what’s going on with your kids. All of those things are going to come with emotional reactions. If I have a client that is not going to work well with us guiding them through that, I need to know that ahead of time. We need to make sure that that’s OK.
For the individuals that are more level‑headed going into an understanding, there are going to be things that happen, that are going to be struggles, “I’m going to turn to you, Victor, to make sure that you can help us on that.” That is a great client for us.
I’ll tell you one other thing that I think is instrumental, my back, I don’t spend a lot of time as people know, who listened, stocking myself up as an advisor. I think that one of the things that makes me such a valuable partner in people’s lives is the background as a lawyer.
Because one of the ways we help control for this, is the legal training is part of what allows me to look at a situation, analyze it from so many different sources, and come up with strategies to navigate against the best results, kind of what we do as lawyers.
We help assess risk, we help strategize on best ways through, and we do that at a very high level on the legal side. I take that same technical skill and apply it to people’s financial lives in retirement.
Where what we’re doing is looking at what potentially could come down the road and creating a plan that allows us to help them navigate that, so that they’re not forced to deal with it emotionally. If there is a downturn in the market, we can point to the protected money that’s in there. If there’s something that’s going on with respect to housing costs, we can look at the rest of the plan.
Say, we budgeted for a second home and what that was going to look like, and here was the range, and here how it affects the plan. We can continue to work with you through the whole journey of retirement.
That’s one of the best skills that we can bring, is that marriage of this legal analysis onto something as straightforward as a retirement plan, and coming up with an overall relationship strategy and counsel that helps people be successful in retirement.
Mark: Victor, tell us a little bit about…You gave us the opportunity to go to 920income.com for that white paper, but you also have 920checklist.com to get the white paper on our retirement checklist. Can you give us a little forecasting of what foreshadowing maybe, of what that 920checklist.com white paper is about?
Victor: Absolutely. I think that one of the things that is helpful is for people to have some form of template to layer their life on top of the structure and compare it against the best practices to know where they stand.
I talked earlier about bringing the bear or the legal analysis, to this whole overall retirement problem, and coming up with what was the best strategy going forward. That’s been distilled in this checklist that we created, this checklist challenge that is available for people to download at 920checklist.com.
What it will give you is the opportunity to layer your own life on what we believe are the best practices in retirement, the ones that are vetted by the best research and our experience, and our clients’ experience for you to compare how it is you are doing.
You might arrive at a couple of different conclusions. You might arrive at a conclusion that you are doing fantastic, and that you don’t need extra help when you compare to what’s in there.
You might conclude that you are on the path for doing well, but there’s some things that you need to attend to, and you may want to reach out to us to help with that, or you might conclude that you are so off base that these two things don’t even look like they’re coming from the same source that they’re not even comparable off of it.
If you’re in that last category, I don’t want you to despair, because it’s never too late for you to be able to make changes to help you get on the path to be successful. If you’re in those last two categories where you’re on your pathway to use a little help, or you’re way off path, and you want to get onto the right path, that’s when we can encourage you to reach out.
The very first step that you should do is download that checklist at 920checklist.com. Put a name and email in there, we’re going to deliver it to you. You’ll be able to compare where you stand so that you can get a little bit more comfortable about your psychology on your retirement picture and see how you are doing compared to the very best practices out there.
Mark: I like that, 920checklist.com. If you’d like that white paper, you can just go in and download it. 920checklist.com. Of course, you want to just talk to the team, 856‑506‑8300.
We’re talking about the psychology of money. Here’s the last soundbite I’ve got from Morgan Housel. He says one of his first jobs, Victor, was as a valet at a fancy hotel in Los Angeles. He said he learned a lot from being around a lot of very wealthy people all the time.
Morgan: What was interesting to me was getting to know some of these people who are driving Ferraris and Rolls Royces. Some of them actually were not even that wealthy. They were like mediocre successful people who spent half their income on a car lease payment.
That to me was astounding, because that blew apart all of the impressions, my first impressions that I had of these people. That was a formative experience that taught me a lot about the psychology of money.
Mark: Victor, I was from the sports world, in the ’90s, for seven years, I coached golf at Kansas State University and the Big 8/Big 12.
Bill Snyder came in 1989. My first year was his second year. Coach Snyder has the, kind of, built the greatest turnaround in college football history at Kansas State. He’s a legend, certainly in the Midwest and in the college football world.
If you think about the biggest donor that there’s buildings on the campus, and in the football complex named after this gentleman. If you were in a room of 20, or in a room of 100, you would never ever suspect that this is the wealthiest individual standing there.
He might be in overalls, might have a dirty cap on. He was a farmer and he loved Kansas State University. That is one of the challenges, is kind of weak, sometimes pre‑judge. You can’t judge a book by its cover, can you?
Victor: You’re a golfer, Mark. One of my favorite stories is around Arnold Palmer. If you ever went to Bay Hill in Florida, that whole community is set up where there are very ostentatious houses around the course.
They’re also a set of these little two bedroom, one levels that are dotted around there that were built essentially when the course was built. I remember playing the course with my dad, and my brother driving around. I remember asking about the very biggest house that we saw on 18, “Is that Arnold’s house?” They pointed over to one of the two‑bedroom concrete lenses.
Now, one of those is Arnold’s house. Then, the only difference is that he dug out a basement for him to work on his clubs, but he would show up in the club room for breakfast. He’s the most unassuming and normal guy that you would meet.
It’s similar, I think people’s values follow them. The outward appearances of wealth are not the best determining factor on whether or not you are going to be successful retirement, or if in fact, you are actually wealthy.
Those outward demonstrations where you have to show off what your wealth is, speaks to a need that you have and even an insecurity. Most of our clients, there would be unassuming in the amount of wealth that they have.
If you lined up all of my clients across a table, and you had them set up in there, you wouldn’t be able to determine the net worth of them as a whole, which was the wealthiest of them, because they’re not demand shadow off of that.
If you’re similarly situated, if you’re in a situation where you’re like, “No, that’s not me. I’m not one that’s driving the most expensive car off of there.” “Is this still something that I need help with or can’t get help with?” You might be a great candidate for us to work together, because our best clients are inwardly focused with their wealth.
They’re looking about what good they can do. They want to make sure that they’re not being frivolous with what they’re doing. They want that extra help to know that they’re going to be OK.
That would be a great opportunity for you to reach out to us at 856‑506‑8300. Just start the conversation and have that beginning talk about how we can help, because we find that the very best clients that work together with us, that we can be the very most successful with, are those folks that are not outwardly demonstrative with their wealth, but are very private about that. Somebody that wants to make sure that they’re OK. They’re most unassuming of the folks.
The best part is that the entire client family is made up of individuals like that, families are like that. They’re the easiest people to get along with and some of my favorite people even if we weren’t their retirement advisor.
Mark: You think about, there’s a two‑way street. You’re the CEO, it’s your retirement. Look at Victor’s teams as the CFO, your chief financial officer to help guide you. At the end of the day you’re making decisions, but you need some more knowledge and more information about certain areas of retirement.
That’s what Victor’s teams come in to do, to help guide you along the way. We need to get along, we need to like each other. It’s part of the deal because it’s a long‑term relationship. You’re going to be retired 20, 30, 40 years. This is a long‑term relationship.
Don’t forget, the Medina Law Group and Palante Wealth serve the Pennington, the greater Mercer County area as well as Bucks County. Clients in New Jersey, clients in Pennsylvania, for the teams of Medina Law Group and Palante Wealth.
They can certainly help you, hopefully. We don’t really know, I guess. I can’t say they certainly can help you. They might be able to help you. Everybody’s situation is different. Everybody’s needs are different.
Victor and the teams would love to sit down and talk about your picture for your retirement. 856‑506‑8300. No cost, no obligation, no pressure. 856‑506‑8300. We’re headed to our final segment right after this. This is “Make It Last” with Victor Medina.
Mark: Welcome back to “Make It Last” with Victor Medina, I’m Mark Elliot. Victor, of course, two companies, Medina Law Group, medinalawgroup.com, M‑E‑D‑I‑N‑A. Medina Law Group, practicing estate planning, certified elder law attorney is Victor Medina, also has Palante wealth.
You can go to palantewealth.com as well, P‑A‑L‑A‑N‑T‑E, palantewealth.com. Palante Wealth is about holistic planning for your retirement. Victor is a certified financial planner professional. He’s a registered investment advisor.
They can help you come up with a plan and it’s called the Make It Last Plan. Income strategies, investment strategies, tax efficiency, moving forward estate planning, all of that as a part of the Make It Last Plan at Medina Law Group and Palante Wealth. The Make It Last Plan with Victor Medina.
We’re going to do a little trivia today on the program. Kind of fun. We’re going to do taxes. Before we get into our little game, taxes was the biggest concern that people had in 2021 it seems, when it came to their finances.
We know the Trump tax law, that’s easy way to say it, is ending December 31st of 2025. 2026, we revert back to 2017 tax rates in brackets. We know the Biden administration is talking about changing our tax structure, if you will. Taxes seem to be a big topic this year, Victor.
Victor: They are a big topic. I’m fond of saying to clients that your business partner in retirement is the federal government. It comes in the forms of the income taxes that you have to pay, as well as other kinds of taxes that are a little bit sneaky.
For example, your Medicare premiums, how much you have to pay and those elements of it. That business partner gets to tell you how much of your earnings that year, how much of the business revenue they get to keep. They get to change the rules whenever they want and you have no control over it.
Taxes are one of the most important elements to putting a successful retirement plan together, and one of the most overlooked. The majority of people go through life saying taxes are what they are. I can do a little bit between January and April to make sure that I am saving or deducting or doing those things, but there’s nothing I can do preventatively.
One of the biggest values that we can bring into your retirement life is to let you know that we can help you do better. Most of the time we’re finding clients we can help them with plan on taxes that will help them keep more of their own money. If you’re in a situation where you want more of your own money, it’s probably a good opportunity for you to reach out and talk to us.
If you want more information on this, we’ve got a download paper for you. We’ve got something to help you through that. It’s at 920taxes.com. You can go to 920taxes.com. It will help you plan for what kind of taxes you can expect, how you might think about avoiding them, and then it might spark you to have a conversation with us.
That’s the preamble. That’s about as good as I’m going to sound because now you’re going to go into the trivia, Mark, and make me look foolish. Please take it away.
Mark: Give you a little bell there for nice work. 920taxes.com. You can always call the team if you have questions about any of this, 856‑506‑8300. You heard the correct bell, if Victor gets the answer correct. We do have the buzzer that I do enjoy playing from time to time.
This is a trivia game on taxes. Pay attention because there might be some things you can throw out to your friends and see if they know the answers to these. Some of these are fairly difficult. We’re going to start out a little harder because we’re going to go way back in time, then we’re going to get a little bit more up to date.
Victor, here’s what I did, I didn’t want you to get start off on the wrong foot. My first question, and every question has unless it’s true or false, but typically are going to have four answers. This first one though, I’ve given you the opportunity.
I’m going to give you four answers, but know that two of those will be acceptable. You’ve got a chance, you got a chance right out of the gate. All right, here we go. Trivia time taxes on “Make It Last” with Victor Medina. When was the federal income tax created, Victor? 1776, 1804, 1861 or 1913?
Victor: I’m not going to go with 1776. None of them felt like they were familiar.
Mark: They were leaving England at that time because of tax. I think so.
Victor: I don’t think we put the tax in immediately afterwards. I’ve seen Hamilton on the stage. We didn’t put the tax and structure in exactly in 1776. I’m going to go ahead and I’m going to guess 1913. That’s going to be my guess.
Mark: That was one of the two acceptable answers because it’s a two‑part option you had here. 1861 is when President Abraham Lincoln signed the Revenue Act in 1861 that imposed the first ever federal income tax to generate funds for the Civil War.
You think back to our highest tax rates and brackets, World War I, World War II. It makes sense that the first Revenue Act was during the Civil War. That Act was repealed 10 years later in 1871, but in 1913, which is why you got the correct bell.
1913, the 16th Amendment established the federal income tax system that we know today. That first federal income tax bill, 1913, had 400 pages. This is a free one for you. Do you think the tax law of today has more than 400 pages?
Victor: I’m going to go ahead with yes. I think we probably have more. You can give me the ding on that one if you’d like.
Victor: It’s so long now. There’s not a chance that if it’s in 400 pages, and it’s so convoluted, and there’s so many exceptions upon the exceptions upon the exceptions to get through that. I’ve been doing this for a very long time.
There are codes and provisions that are lay‑ups for me, things that I know about, especially from the estate planning world. I still have to go look up the other half. It’s why the code exists in my shelf is that I can look it up because it’s always changing and there’s so much of it.
Mark: I think, about 5, 10 years ago, there were over 70,000 pages in the tax law. We can figure there’s more than that in today’s world. All right, I’m going to stay back in that time period, 1913, for the next trivia question for Victor Medina.
When was the first tax deadline when the modern federal income tax was established? Today, it’s April 15th unless there’s a pandemic, or we back it up a month. It’s April 15 today. When this started back in 1913, was that tax deadline January 1, February 14, March 1st, or April 1st?
Victor: I’m going to go by process elimination. I’m probably going to be wrong, but I don’t think it was the 1st of the year. I don’t think it was Valentine’s today. I sure hope it wasn’t April Fool’s Day. I think the last one was whichever day you gave me in March, that’s going to be my guess.
Mark: I liked how you got there. I liked how you got there because you were absolutely correct. The original deadline for filing income taxes starting in 1913 was March 1st, but by 1919, the government pushed it back to March 15th to help people crunch for time.
March 15th remain the filing deadline until 1955 when the IRS said it would help their employees and tax filers to have an additional month to get all the paperwork done moving it to April 15. So good. You’re two for two. Good job.
Now the next two are going to be true or false. I feel good about your options here. The next one is this. The job of tax repair is female‑dominated. True or false?
Victor: I’m going to go with false. I think the most of it are men, that’s going to be my guess.
Mark: Sorry. I can see why you’d say that even though my tax repair has always been a female. There is an online research firm Zippia has found that 65 percent of all tax repairs are women, and the average age for tax repairs is 47 even though I think my average age of my tax repairs is about 65.
Still, it’s a woman, and the majority are located in New York and Chicago, which makes sense because they’re big cities, but actually, the job of tax repair is female‑dominated. Let me give you another chance. I feel good about your chances to get this one correct. True or false, your Social Security benefits are the only source of income guaranteed to be tax‑free?
Victor: Yeah, that’s absolutely going to be false.
Victor: Thank you. Hey, you know what’s interesting about that too, Mark, is it was at one time guaranteed to be tax‑free when it was put in place. They said this will never ever be taxes as your tax is coming in. It will never ever be tax going out.
I gave a presentation recently where when I said that to the room, they all chuckled because I said how many people here are currently paying taxes on their Social Security and everyone in the room put their hands up. There was nobody who was getting their Social Security tax free.
There is a category of people who don’t pay taxes. Once you get over that provisional income number, which is barely $25,000 for single people, you’re going to be paying tax on some portions of your Social Security.
Mark: Yep, FDR started Social Security back in 1935, saying now we’re never going to tax this, but you had to be 65 to get it. The average age, I think, was men died at 60, women at 62. They didn’t expect that many people to get to it.
1983, they then decided, “Well, we need to get a little bit more revenue in our coffers, so we’re going to tax Social Security up to 50 percent.” Then 10 years later, 1993, “Hey, we’re going to tax Social Security up to 85 percent,” which is where we are now, [laughs] and it might even move again.
Victor, you’ve done really well. I would definitely get this one wrong, if I didn’t have the answer in front of me. I know which state I would guess. Which state offers an exemption from income taxes for people of the age of 100 and over? Is it Texas, Kentucky, Hawaii, or New Mexico?
Victor: This is a terrible question, and I blame you for it. There is not a chance of getting this right. I’m not guessing. I would guess Texas, but I think that that one is a red herring. I’m going to go with Hawaii because I think Hawaii should win there on everything. I’m going to go with Hawaii.
Mark: Hawaii is where we all should be able to go retire. It’s actually New Mexico. They started this in 2002. People over the age of 100 who are not dependents of others are exempt from filing and paying New Mexico personal income taxes.
To me, Victor, you should run for office and try to get that where everybody that hits the age of 100 no longer has to pay taxes.
Victor: It gets good and if I could couple that with guaranteeing the people could get to 100, I would get elected. Is basically saying not only you’re not going to be taxed, but I can guarantee that you’re going to get to 100. That would get me elected in every jurisdiction that I ran.
Mark: Yeah, I like that though. New Mexico. I think that’s good. People that are age of 100 and over don’t have to pay personal income taxes. I like that. All right, you’ve done so well. I’m going to give you a final one. We got a couple of minutes left, so I’m going to give you a little extra credit.
This one is, we all heard of the term Uncle Sam, right? The question is, where and how did this happen? The American symbol, Uncle Sam, is allegedly based on, businessman Sam Wilson, founding father Samuel Adams, General Sam Houston, or Sam I Am from “Green Eggs and a Ham.”
Victor: [laughs] I’m pretty sure that the symbol of Uncle Sam came out before Dr. Seuss wrote his fantastic book. I don’t think it’s the founding father. I’m going to go with the businessman, Sam Wilson. That would be my guess. By the way, that’s a complete guess.
Mark: You got it. Now, here’s the backstory. Sam Houston was a businessman during the war of 1812. He supplied barrels of beef to the army. They were stamped US to indicate government property. That identification led to the widespread use of the nickname, Uncle Sam, for the United States. I like that, kind of good to know a little history.
Victor: I didn’t do so bad, this time. I’m going to tell you, you can bring it back again, This one made me feel good, it was a holiday gift, maybe I won more than I lost. All right, you can bring the segment back in the future. It wasn’t a complete disaster. I reserve the right to change my mind later.
Mark: Taxes are certainly a big concern that a lot of Americans have today. Today’s federal income tax rates might be the lowest that we will see for the rest of our life. Don’t forget, the 2017 tax cuts and Jobs Act ends at the end of 2025. Then we go into 2026 with the new tax rates in brackets, it’s a big deal, ain’t it, Victor?
Victor: It’s a huge deal. We have an expiring window. We’ve also seen all of the policies that have come out recently to help support the reaction that’s going on to the pandemic. Those are all bills that need to get paid.
You don’t want to assume that you’re not going to be impacted at all by the current tax laws or what those tax laws might be in the future. Just because you’re not a big corporation, or you’re not in their high‑income individuals or how they’re defining it, it’s likely to come and visit you.
By the way, the ones that are coming in 2026 require no action whatsoever from Congress for you to end up paying more taxes. I would imagine that if you’re listening right now that you probably would admit that there are some areas that you could do a little bit better with your tax planning, specifically, how to get a more tax efficient retirement and I want to help you.
I want to help you get there. I want to help you understand what the potential impacts of taxes have on your retirement savings. I want to help you learn about ways that you could possibly reduce or even eliminate taxes in retirement. I want to help you create an income strategy for your retirement income that lasts as long as you need it to last while also getting the very best and most optimal tax picture.
If you’ve saved, let’s see, about $400,000 for retirement. You’re in a category want to know how to make that work best for you, you should give us a call at 856‑506‑8300. That’s 856‑506‑8300. Write the number down, give us a call so that we can help you go over your retirement accounts.
Go over your guaranteed income. Also, help you uncover what kind of tax liabilities you have, and what might be coming down in the future. Maybe when one spouse dies, maybe when you have to take required minimum distributions.
We’re going to talk about some of these strategies that can help you reduce your taxes down the road, and help you put together a plan so that you know that you’re getting the very most out of your retirement dollars.
It could be tens of thousands of dollars back in your pocket for you to spend it the way that you want to in retirement. There’s no cost. There’s no obligation. You should call us now. That number is 856‑506‑8300. 856‑506‑8300. Don’t delay.
This is the opportunity for you to do the plan that you know is possible to help you get the very most out of your retirement dollar.
Mark: Palante Wealth Advisors are an independent financial services firm that utilizes a variety of investment and insurance products. Medina Law Group is an independent estate planning and elder law firm. Investment advisory services offered through Palante Wealth Advisors LLC, a New Jersey and Pennsylvania registered investment advisor.
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Transcription by CastingWords