Avoiding Financial Mistakes with Wealth Strategist Eunicia Peret
On this week’s episode of The Leadership Habit Podcast, I sat down to talk about that topic that some of us avoid– finances. I sat down with Eunicia Peret to talk about how to avoid the financial mistakes that you don’t know that you’re making. And before you turn this off because you think, I don’t wanna talk about money, trust me, it was actually kind of uncomfortable at points when I had to actually take an honest look at myself and think, yeah, I am making some of these mistakes. But before we go into the show, let me tell you a little bit more about Eunicia.
Eunicia is an accomplished wealth strategist and business owner with over 15 years of experience in the financial services industry. Eunicia honed her expertise by delivering significant financial improvements to the bottom line, Fortune 500 companies and renowned global brands across multiple industries. Her passion is to help multi-six and seven-figure individuals optimize their wealth-creation efforts by empowering them to leverage wealth and creating strategies that go beyond 401ks, IRAs, and other typical savings accounts in order to minimize taxes, maximize growth, and increase income in retirement. I hope you enjoy this important conversation on how to avoid financial mistakes that you don’t know you’re making.
Full Transcript Below
Jenn DeWall: Hi everyone, it’s Jenn DeWall, and joining me today is Eunicia Peret. She’s a wealth strategist. Eunicia, I’m so excited to talk to you. Our topic today, how to avoid the financial mistakes that you don’t know you’re making! Such an important topic, knowing that many of us, hey, we might be afraid to manage our money, or we just don’t know how to manage our money. And so we may not obviously, be aware of these mistakes and what could be setting us up for maybe more of a struggle in the long run just by making an adjustments for what we can do today to manage our money better so we can set ourselves up for success.
Because heck, you might be asking, what do money and leadership have in common? Well, money, Hey, we need that for our lifestyle. It impacts our stress, it impacts our quality of life. It impacts our worries. It impacts how we show up and solve problems at work. You might notice if you’re maybe more, I would say, loose with your money, that maybe you aren’t paying attention to some things in the same way as a leader, you might be a little bit more casual, and this is just another opportunity to add structure to something that you might already be doing. Or to add a new routine that will help set you up for long term success. So, Eunicia, thank you so much for joining us today.
Eunicia Peret: Jenn, it’s such a pleasure to be here with you and, and all of our listeners.
Jenn DeWall: Oh my gosh. All right, so I always have to ask it. I love a good origin story. Eunicia, tell me about yourself. How did you come to be a wealth strategist? What did your journey look like?
Discovering Financial Blind Spots
Eunicia Peret: Actually, it’s a very good question, especially for, for the folks that are listening to us. Whether you’re a rising leader or you are already an executive and, and you full rights. I, I used to be there. And one of the biggest things for me when we, my husband and I kind of took a step back and started looking at truly what our financial situation looked like, what we realized was that we were making too much money. We had been making too much money living the life, but frankly, when we were looking at our financial future, it wasn’t where we wanted it to be. And when we peel the covers back, what we realized was that the financial services as an industry is not necessarily suited for rising leaders, even for those that have already got into the multi six and seven figure income streams.
And the reason for that is oftentimes we don’t have the assets under management to bring to the table so that we get first dibs and we really get the red carpet treatment as we would all like. And so for, for me, it really was, I became a wealth strategist for two reasons. Number one, reason number one is I was a financial advisor, a strategy consultant for many, many years. I played in that industry. And my area of expertise was always in the finance function. So looking at what CFOs were doing and how CFOs were working in terms of growing the business, doing more with less, I start asking some of the same questions when again, it came to our personal situation.
So reason number two, when I started looking under the covers and realizing all of the blind spots and all of the loopholes that frankly we did not know existed, it was a big aha. And the deciding factor was, we need to do better. And other people need to avoid some of the mistakes that, frankly, I wish I could have avoided earlier on in life.
Jenn DeWall: Yeah, it’s, I feel like money is just that topic, right? Everyone avoids it. I don’t wanna talk about it. I don’t wanna think about it. It’s just going to be there for me. And I know I at 40 this year, right, of thinking, where do we wanna be? We probably actually need to have a better grasp on where we would want to land 10, 20, 30 years instead of saying, we make really, you know, we make good money now, so it’s fine because we’re not, we’re probably, I’m definitely gonna be someone that’s falling into some of these mistakes that we’re gonna go into. And it’s easy, again, finances, I feel like money can sometimes feel hard, like, or it can be, yeah, it can feel hard. And it could also be, I mean, I get it restrictive feeling like, do I have enough funds? Like I lived much of my life working two jobs, paying off student loans and feeling like I don’t even have money to actually be able to contribute to a long term savings plan.
And so I wanna empathize for anyone that’s like that too, because hey, we’re all there. This is going to be something that’s going to help you. It’s information to be able to think and consider things differently. Right. You, let’s go into it. What are some of the mistakes that you see people making? I mean, I know like the joke that I kind of made before this, because we’re recording this in November, we’re going into a holiday season of spending, and I can only imagine how many purchases are made right now that people maybe don’t need. So they might be throwing their money out the door, but what are some of the mistakes that you notice that people make?
Having a Scarcity Mindset is a Common Financial Mistake
Eunicia Peret: Well, one of the big mistakes, actually, it’s funny because you mentioned it yourself earlier. It’s, it’s this idea of I, you know, I have, I have debt, I have student loans, I have all of these things, all of these, these people, these companies, these, these other individuals that we need to take care of, mortgage whatever it is that your, your financial commitments are. And oftentimes individuals keep putting it off. So one of the big mistakes is, is just acting from, from a scarcity mindset to say, I don’t have enough to pay myself. And one of the guiding things that I have for individuals is you gotta start small. Because when you start and when you see it accumulating our patterns shift, your mindset shifts the way that you purchase, the way that you think about your spending shifts. And so we must stop acting with that from, from that standpoint of, of we don’t make enough.
We don’t know enough, we don’t wanna see it. That’s another big, big thing that I see with individuals. It’s money. It’s so taboo. Oftentimes, you know, we, we grow in families and we come up through the ranks and nobody really talks about it. It’s, it’s been so taboo for so long that we just prefer not to think about it. And I feel it’s more of a risky proposition for those that are already making really good money. If you’re already in the six, multi six figure income arena, oftentimes you see a lot of money coming through, but you also see a lot of money going out, and you have this misconception, there’s this misalignment that we make really good money now. We’re always gonna make good money. And one of the things that, that I see with people is this, this fear of, especially when, when folks work for a company, work for somebody else’s, this fear of what happens if I lose my job?
Well, here’s the, the idea, when our finances are in order and we know we’ve done things right for ourselves earlier on, we don’t have those fears because now we know that even if something was to happen, even if that job gets to be lost or we get fired or let go, or economy hits, or another COVID comes around or whatever happens, we have the financial standing to be fine on our own and to look for better opportunities. But without doing things right on the forefront, and without putting aside those limiting beliefs, oftentimes individuals end up living a vicious cycle that is, is frankly too much to bear for most.
It’s OK to Start Small – Just Get Started
Jenn DeWall: I heard you say within that, like starting small, I mean, what house fall is too small because I think one of the barriers for me with that scarcity, yeah, it’s like, I don’t have enough, but then if I feel like I’m putting, you know, $5 away, I may not feel like, well, that’s not anything. So what do you, when you say small, how would you approach small to get us to like kinda embrace that?
Eunicia Peret: No, that, that’s a great question. And, and I love the fact that you mentioned $5, right? If we were to sit and just think about our spend, our daily spend and, and we were to, to assess where is it how much money we spend on a daily basis, how much money comes in, how much money we spend on a daily basis. Oftentimes I ask clients, well, you know, what, what would you like to set up for yourself, say on a monthly basis? Well, I’d like to set up a thousand dollars, but a thousand dollars. I’m just using really rough numbers, right? This, this may be for the individual that’s, that’s really saying, I really like, I really don’t have enough. So play with the numbers in your, in your mind, but let’s say a thousand dollars and they’ll say that’s too much. Like, I wanna do that, but it’s too much.
Okay, well let’s throttle it back. What, what do you think you could potentially do per day? Can you pay yourself $10 a day? Is that too much? What about $5 a day? Start somewhere. If, if $5 a day seems like it’s a stretch, think about it. Do you go to Starbucks? Are you buying two or three coffees every single day? Are you doing anything extra? Are you stopping at the gas station and buying that pop soda? That’s $2, $3. Is that something that maybe you could be buying at at Whole Foods? Not Whole Foods, sorry, at at Costco or at Sam’s and have in bulk at home. And if you like it, that’s awesome, but find different alternatives to spend that money so that you can free up whatever it is that’s $5, $7, $10, a hundred dollars a day. It really is relevant to the individual. And that’s one of the reasons why we shouldn’t, nobody should put themselves in a, in a corner to say, I don’t make enough. I don’t have enough. Because wealth is relative and how much you can save is going to also be relative to where you’re at. But without starting and without setting that money aside, you never know how much further you can push it because you’ve never started.
Financial Mistakes and Holiday Spending
Jenn DeWall: Oh my gosh, you said so much that I feel like, again, these are mistakes that I make. I can tell you that I know. Because lately I’m like, we have to be, I want us to be a little bit more confident and focused on a strategic financial future. And, but then it’s the holiday season, Eunicia. I mean, I of course need my Starbucks or I need a pumpkin spice latte. Of course I need to go and buy all of the holiday decor to make my house feel like a warm hallmark movie. I mean, this is honestly how I rationalize and spend. If you come to my house, it looks like Christmas exploded. I can’t help it. I love getting into it, but if I really think about it, and I do, because my husband and I just had this conversation and he’s like, I swear you get a dopamine hit every time there’s an Amazon package delivered.
And it’s, when we have that conversation, I’m like, I don’t need any of this. I genuinely don’t need it. It makes me happy because I love the aesthetic of the holiday. But in terms of money, yeah, it’s a big waste. And I have to probably face the music a little bit more and challenge myself to say, Jenn, but you don’t really need this next ornament or a third tree. I don’t need a third tree, Eunicia. I just love Christmas. I know it’s there, but really it just does not make economic sense.
But maybe some of our listeners can relate to some of those impulsive spending habits that we have or the little moments of joy. And also being curious about what are we also trying to cover up when we do that, right? Because there is a little bit of like, when we spend that is tied to our mental state of how we wanna feel or thinking that we buy that thing, it’s gonna take away our pains. And I do that a lot. I don’t know, maybe that was too much. What are additional mistakes that you see people making or where they get it, where they might get, you know, their financial approach wrong?
Eunicia Peret: Well, I think if we sit and, and kind of think about, there are so many, but it, because we’re around the holidays and a lot of people out there are probably feeling the same way that you do, right? Whether it’s Christmas or it’s Easter or it’s some other holiday that people celebrate, there is this impulse to just, and and frankly the stores don’t make it any easier. Amazon doesn’t make it any easier to just say no, right? But what I, what I tell folks is, is sit down and think about what truly makes you joyful. Is it that extra pillow? Is it that extra Christmas tree? Is it that extra decoration? Maybe you can put yourself on a schedule where you don’t buy major decorations, but every two to three years, maybe you can soften things up by just changing up the type of music that you play in the house.
Maybe you can play music consistently. By the way, that’s actually something that I’m trying myself. And the reason I do that is because instead of the music playing just in the office, when I work for my home office, I like hearing the music in the whole house because then whatever I go, there’s just that ambiance. Or same thing with the office, right? If you’re, if you’re at an actual office, it’s about changing the culture. It’s about starting to look at what are the things that make us truly happy internally? And what we find is that spending more on things isn’t getting us there. What people see though on the other side when they start truly building wealth is that as they see their wealth accumulating, their spending habits change. I’ll give you myself as an example. I am, I can be very dangerous when I go shopping, and I know that.
So for that reason, I have learned to govern the way that I spend it, the way that I look at things. And I’ve gotten to the point where every time I see something, there’s this question and rationale that goes through my mind of do I really need it? And if, if I’m looking at an extra $150, it’s really, it’s just $150, but then $150 plus another $150 plus whatever else you throw at it, talking about wealth. And when I say wealth for those, those individuals that will say, well, but I really don’t strive to be uber wealthy or wealthy, wealth is relative. Once again, it’s, it’s building that financial independence.
I know that $150 will go so much longer, so much further. If I don’t really need to spend it today, it’s gonna go much further for me in the long run. And especially with inflation going through the roof and everything else that we’re battling with, we just really need to think about how do we want to live our future? Because it’s not just about today. If we can focus on the future, we’re gonna get not just the future benefits, but we’re gonna get more of that peace in our heart that, hey, we’re in a really good place. Even if something does happen, we’ve got that peace, that extra blanket or that extra pillow or Christmas or whatever it is that we get is not gonna, we’re not gonna be able to chew on that and it’s not gonna be able to feed us if worse comes to worse.
Jenn DeWall: Yeah, it definitely won’t be able to feed me. Absolutely not. It will take up storage space at my house and this is our first house. Right. So I, I think I get, I overdo it for that, but I love what you said, but I’m curious, how do you– because maybe I do need the fear, right? I need the, like understanding what it could look like, the cost of not, right, the cost of inaction. When you see people nearing maybe the end of their working time and thinking about their wealth or their financial future, what does, what’s maybe a good example that you’ve seen of someone feeling being able to maintain their lifestyle? And what’s an example of someone that maybe their whole, like everything kind of had to shift because they just didn’t, you know, focus on it then. And so now that they’re out of work, they actually have a more restricted budget. Do you have examples of kind of both sides of those spectrum? I think that’d be helpful to place that.
Understanding Retirement Savings to Avoid Financial Mistakes
Eunicia Peret: Absolutely. So one, one really good example is individuals kind of working and going through their careers. And if, if you are the type of individual and you’re listening and you’re already contributing to your 401k, congratulations, you’re probably doing more than a lot of people are. But here’s what happens. Even for individuals that set money aside in the traditional retirement types of accounts, what they don’t realize is that when they get to retirement, their tax situation is actually going to potentially harm them. So oftentimes people go through their careers and they go through life and building their businesses with this idea that when I retire my tax bracket, I’m gonna be in a lower tax bracket. But what they forget to think about is they’re not gonna have the children at home. They’re not gonna have all the deductions that they’ve had building their career, you know, pay mortgage on their house, building their business, et cetera, et cetera.
And so even a small incremental shift in taxes is going to ultimately put a huge strain on how they live their retirement lifestyle, right? Or, or if people don’t like to think of it as retirement when we stop working for money. And so one of the big, big issues that we see is that people don’t plant accordingly. Again, just setting money aside in some account is not enough. If that account is not built with a true purpose in mind, starting early. Really being able to think of what do we want to, what do we want to be in the future? And how do we work things backwards? Simple quote-unquote, financial planning is not enough because most financial planning is just focused on put money here or put money there and hope that it’s gonna be fine. But even in those situations, the numbers and the percentages are going lower and lower every single year it seems.
So for example, for individuals in years past when they retired, it was okay to say, Hey, we’ll be drawing out, you know, five to 6% out of our retirement income. Then that number went down to 4%. Well, now a lot of financial planners will say, oh, no, no, no, no, we cannot draw 4%. We really need to be down in the two to 3% range. So now you are taking even less money out of what you’ve accumulated. That’s even gonna be even more impacted by taxes in the future. And it’s a recipe for disaster. But in order to flip that around, we need to really start focusing and looking at what do we want the end to look like or the future to look like? And if we work it backwards, then we’re able to make changes and implement tactics and solutions today that are going to enable us to have that financial independence and financial lifestyle in the future that we so desire.
Jenn DeWall: Oh my gosh, I, there’s so many things that come to mind for me. I might have a more of a unique perspective from just from where I sit because it actually was hard for me to think about long term wealth because when I was in my twenties, my dad had a stroke that put him into a nursing home. But it was during the 2008 recession. So he was laid off and he didn’t have insurance. And so ultimately that pushed him into what the United States has Medicaid and Medicaid, that then to make him eligible for Medicaid, we had to sell his house. We had to cash out all his pension, his annuity, and the only income that he has is the a hundred dollars a month that he gets and everything else goes back in, right? So even though he planned for it, once you hit Medicaid, and I say this because people don’t plan for like, also the other pieces of life, like it will happen.
Jenn DeWall: I don’t wanna say it’s going to, but like you don’t know, my dad was 54 when he had a stroke that altered his life. And on the flip side, my mom was also 50 and she went through a mental health crisis, or she was 54 as well, and with schizophrenia and lost everything just by nature of the disease. And so she lost everything that she had worked for, she had spent down and she had paid that. Like, and not to say that that example is likely for anyone, but just to understand that there are things that are gonna happen that you’re gonna bank on that aren’t necessarily going to come to fruition in that way. Like, you have to be able to understand that life is gonna take you down different paths and you have to set yourself up for success. And I’m not sure if that was too, I guess too much to say, but really when I got, I think when I was younger, I first had the notion of like, well, what the heck am I saving for if, like, if my life is gonna turn out like this, why try now?
Jenn DeWall: That was honestly my first kind of way to look at finances was just because I saw that it didn’t really matter. But, you know, the, on the flip side of it, I want to be able to do the things that I do right now today. I know that life is gonna throw me some curve balls and some wrenches I need to get ahead of it. That’s probably the long, the long winded way of saying that to anticipate for that stuff and not just to assume that it’s gonna be easy. Every, there’s nothing that’s gonna go wrong, no light will have ebbs and flows, and we have to make sure that we’re setting ourself up for success.
Preparing for the Unexpected
Eunicia Peret: 100%. And you know, your, your parents’ cases is definitely unfortunate, but it’s not unique. It happens. I mean, as we age, I’ll never forget, my mom used to tell me that she was having a hard time driving at night, right? And I used to think, I mean, I didn’t discount and I did not say that she was not telling the truth, but I just couldn’t see it until not long ago. I was driving at night and I thought to myself, wait, it just feels like it’s much harder to drive. I’m just having a harder time perceiving the lights and everything else. And I’m, I’m not my mom’s age. And I call her, I said, I think I understand. And she, she just kind of giggled. And she said, you still don’t understand. I mean, sure, you may have noticed something, but the reality is that as we aged, there are things that we really can’t anticipate.
And, and you mentioned something that’s beautiful that sadly we don’t really look in retrospect, it’s, it’s the idea of learning from those that have gone before us, right? We may not experience the same exact things that they experience, but we’re gonna experience similar things. And even in your parents’ case, right? How beautiful would it have been if instead of having to liquidate everything your family could have actually enjoyed the fruits of everything that they have saved for versus having to go through a fire sale just to appease what it is that our government is saying in order to be able to qualify for that, for that support. It’s really sad. Unfortunately, things have to be done well in advance. We can’t do it when we’re already there and things would’ve needed to already shift,
Jenn DeWall: My gosh, transfer those assets, get past the look back period. You can Google that. That’s not my financial period. That would be my financial advice of what I’ve learned of like transferring assets, getting your power of attorney lined up, you know, setting up who’s gonna handle that and where they’re gonna go. But that’s not the focus of today. We are gonna talk about how we can take a different approach. And I know that you have the three pillars of financial planning. It’s the methodology, it’s how we can look at this to apply a different approach to hopefully maximize what our long term savings looks like. So let’s dive into it. Eunicia, let’s go the three pillars of financial planning. What are they?
Three Pillars of Financial Planning to Avoid Financial Mistakes
Eunicia Peret: So before I go into the three pillars of financial planning, let me just preface it by saying that when we started looking at what are the different blind spots, what are the different pitfalls that frankly I was missing out on that I didn’t see. But so many others, executives and, and leaders, rising leaders unfortunately, are facing day in and day out. What became very a big eye opener was that it, they were kind of in my mind, and based on everything that we’ve seen, they’re focused on kinda three different areas. And those three different area, consequently are those three pillars that we’re talking about. The first one is taxes. One of the things that I had no idea I really, truly could have had so much more of an impact on was minimizing my tax exposure legally and, and doing things basically in accordance to the tax law.
But unfortunately, so many other people are trapped in that same exact situation. And especially for those that are w2, the whole idea for many of them is I cannot legally reduce my tax exposure. The reality is that you can’t, is it easy? No, it requires work, but it can be done. So one of the things that we do, one of the, the first pillar is focusing on how do we minimize our tax exposure because of the businesses that we have or because of the, the jobs that we have and, and our passions today so that we can enjoy the fruits of those, of those savings down the road. And oftentimes what we see is that people leave as much as 30 to 50% more, they pay more in taxes than they truly should.
Jenn DeWall: Wait. How, how does that happen though? Cause I mean, does it, if you’re a w2, is it that you’re not claiming your exemptions? Like how, how are we paying more in taxes?
Eunicia Peret: Well, as a2, technically you cannot claim those exemptions, right? So you have to technically change your tax status. And that changing of tax status comes not only with, with some work, it requires support, but at the same time, it’s a, it’s a total mindset shift, right? I, I can’t tell you how many times I speak with, with high paid individuals, whether it be doctors, whether it be pilots and their whole, this whole idea of I don’t qualify for Roth. I mean, it’s something as simple as Roth account or Roth 401k. I don’t qualify for Roth because I make too much money. Hello? Who in the world gave them that idea? Whether they heard it internally in their company or they spoke to somebody that gave them that idea, the reality is that they’re leaving money. This is future taxes on the table without knowing that they could be doing something about it. Now, there’s also this idea of minimizing taxes in the present here, but a lot of, especially they’re W2 s a lot of W2 employees don’t understand that there are ways and what are the ways in which they can do that? So we focus on taxes for, for, for today, right? And that’s where our team of experts are exceptionally well suited to work with individuals that historically did not know that they had options. The second pillar, as we move,
Ask More Questions to Avoid Financial Mistakes
Jenn DeWall: Wait, can I ask the basic question? Sure. What’s a Roth IRA? I’m gonna do it. I don’t know. I mean, I’ve heard of it, I know the term, like I’m not fluent in it, but it sounds like there’s a tax shield, but it also sounds like there could be an income. What, what is a Roth IRA?
Eunicia Peret: So a Roth IRA or a Roth 401k, if, for those that are contributing to their 401k, is a savings plan where you pay taxes on the income today and that money as it grows, and that Roth account will not be taxable down the road. That Roth account will also position individuals, the Roth money, at least based on the current legislation. It’s not going to go against your social security income and other types of income that you have, which are going to put you, A lot of people also don’t know that social security can be taxed up to 85%, 80 up to 85% of your social security benefits can actually be taxed. So now we’re talking about double taxation. Congratulations. If you’re making a lot of money today, there’s a likelihood that you’re going to be paying even more in taxes than you anticipated because you are gonna be making better money in the future. And so those are a lot of the different things that people don’t know. But I hope that that answers your question regarding that
Jenn DeWall: No, thank you. I’m, I don’t, I will ask all the questions that people may or may not know, or maybe everyone can get a good laugh by saying, oh my gosh, I can’t believe she doesn’t know what that is. I, I mean, I’ve heard of Roth IRA, I just don’t, I’m being honest, I’m probably one of the your targets right now of people that aren’t doing these things. And I’m just trying to be transparent to say to our listener, don’t go into the shame and bury your head in a hole. We’ve got to, you know, face it head on and take responsibility. So I’m just trying to be a little vulnerable in that approach. All right,
Eunicia Peret: So the first, here’s what, before we go into the second, the second pillar, here’s what I wanna tell you specifically on that. Roth versus traditional, there are a lot of books out there. Because obviously we, we stay on top of what’s happening in our industry. There are a lot of books out there that will tell people, Hey, it’s set more money aside in a traditional account because you don’t pay taxes on that money today. You’ll pay taxes in the future. But what a lot of individuals don’t understand is that a lot of those books are written for the people that are never gonna rise above a certain level. So if you are that individual that says, I really, I want to live the same lifestyle in retirement as perhaps you do now because you make really good money, then you’re gonna, what, what those same authors and those same books will tell you is, oh, by the way, down the road you can do a back Roth conversion.
Well, why in the world would I choose to do a back Roth conversion down the road and pay more in taxes because I’m going to be making more money? Versus thinking strategically today to figure out what should that portion of traditional versus Roth accounts look like for me? Because it’s not to say that you have to do one or the other, you can do a mix, but a lot of individuals don’t know that those options exist or how to think through them. And because of that, it’s gonna end up costing them potentially hundreds of thousands of dollars down the road and just taxes a little.
Jenn DeWall: Wow. That’s, I mean, I love that. I hope that that was a great tip for everyone and just thinking of considering and how you start to evaluate these.
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Common Investment Mistakes
Jenn DeWall: All right, let’s, let’s dive into the second pillar now.
Eunicia Peret: So the second pillar is, it’s really a continuance of the first pillar, but focuses more on how do we grow our wealth, right? Where, where does money get ultimately invested? And a lot of individuals have this anxiety about the market. Sure, the younger generation, not so much. But as we get into those forties days into those fifties, people start asking the question of, can I truly afford a downturn? Can I afford a 30% of 50% or even higher downturn in the market? And the answer for many people is no, they not only can’t afford it, they can’t stomach it, they cannot go through it emotionally, it’s too draining. But then the question becomes, what else can we do? Because historically they don’t know that they have options. And so one of the things that I’m a huge believer in is this notion of people need to understand what their options are when it comes to investing.
And investing can be in, in the, in traditional financial vehicles, non-traditional financial vehicles, which are truly not exposed to the market. But then there’s this whole other aspect of investments, different types of investments that have nothing to do with the financial services industry. And that’s a lot of the same things. Those are the same strategies that no one is really talking about. Why are they not talking about, because frankly, the investors that are out there, they want to know that they have people that they know, like, and trust coming in. And so if it’s just somebody off the street saying, Hey, I’d like to be part of this fund, or this, this investment, or whatever it is that the opportunity is, the likelihood that they’re gonna be able to get in is nil. But the biggest challenge is people don’t even know that they have access to these opportunities.
And so when we looked at the blind spots, one of the big things that I said is, boy, I wish I would’ve had access to know how the angels angel investors work. It doesn’t take millions of dollars to become an angel investor. The risks can be much higher, but guess what? The rewards are also likely much higher as well. And if you know what you’re looking at, then it gives you, again, the sense of this new renewed sense of I’ve accomplished and I’m doing really well for myself because I’m truly diversified. And when I say diversified, I’m not talking about that pie chart that you see in your 401k statement or your investment statement. Okay? So that’s, that’s a big thing, is really that second pillar is focused on giving individuals the empowerment to understand what are the different options and figuring out what are the options that actually resonate with who they are with how they see money so that they can ultimately not only build wealth, but sleep better at night.
Jenn DeWall: Yeah, I mean there, I think their ignorance is bliss, right? Like I honestly can tell you that statement. Oh gosh, I’m really just, I guess I’m really, maybe this is my financial confession during this podcast today, because I have not looked at my 401k statement from my old job that I was, that for 10 years. I’ve not looked at it in like years. Cause I don’t wanna see how much it’s dropped over the last few years. I’m just ignorance is bliss, right? I’m that person where I’m like, I don’t wanna know. But on the flip side, I also think it was really oblivious to some of the alternatives to the market, that it’s not just out there. And maybe I’m not saying you’re saying this, but even I worked for a brief period with a company that, a private equity firm. And so taking your 401k and rolling that into real estate a rolling that into a business, understanding that there are many different ways to actually invest your money than what you might traditionally think.
Jenn DeWall: And so I appreciate you saying that because I honestly had no idea. I mean, I knew that like private equity existed, I just thought that was for some super wealthy people that were out there doing stuff, like I had no idea that actually a typical person could actually do it depending on, you know, the type of investment you’re going to make. And so when I realized that, I was like, oh my gosh. So if you can tell I’m not, I’m multimillionaire, I’m a normal person just like you or just like the people listening and yeah, I think it’s just, it helps to realize that there were other options. And you can take a 401k and you can, you know, roll it in and invest it, and you can do different things with it. But the thing is, you have to start having these conversations. You’ve got to start to think about it differently,
The Economy and Learning from Past Financial Mistakes
Eunicia Peret: 100%. And it’s not just the conversation, it’s also who do you trust? Because yeah, we’re right, wrong or indifferent, we’re, we’re not nobody. I’ve not heard one person that, that have said that 2023 is gonna be easier on a financial spectrum than 2022 has been. On the contrary, everybody’s thinking that 20 we have to brace for 2023. So then what do we do? Considering that a lot of the alternative investments, you know, people have really made a lot of money when the economy was really good. But the question is, who’s been out there? Who was out there in 2008, 2009 that rode the waves? They did not end up losing everything. Because when you are thinking about setting, putting your money somewhere, you don’t wanna put it with individuals that completely lost everything in 2008, 2009, unless you want to repeat the same process. So one of the big things is who do we trust and how do we go about that to make sure that, as you said, that money aside in those alternative types of investments, that again, it’s, it’s with people that you know, like, and trust if they come through trusted referral sources, et cetera, et cetera.
And they have the trajectory to prove for, for the actions that they’ve taken in the past.
Jenn DeWall: Okay, so I wanna add like a follow up question to that, because I think that it is true when you have, I know you know this, I know you know this, so it’s not gonna be offensive, but like financial planners, like all of a sudden you’re like, oh my gosh, they’re gonna sell it to me. I don’t know what to do. They’re go like, and sometimes it can feel like, and I don’t know cause then you’re talking about a topic that I’m already uncomfortable talking about because I’m not sure I wanna talk about my financial period, so or my financial fur future. So how do you kind of assess that? Because I think initially there is, unless you’re proactively like, Hey, I wanna do this, I’m more inclined to distrust someone because it’s my money than I am to trust. So how, what are things I’m not alone, right? This is how other people are, or I’m <laugh>
Eunicia Peret: You are not alone. As a matter of fact, remember at the very beginning, I, I, I learned to distrust the financial services industry for that reason. Everybody unfortunately has something to sell, and the incentive in the industry is not for there to be collaboration across the financial team. Think about your cpa, think about your attorney, think about your financial planner. One of the biggest things for me, which, which really led me to this distrust was actually after I started working with individuals where I was a fly on the wall. And I cannot tell you how many financial advisory kind of interviews I, I just wanted to observe. Again, that was my, my strong suit as a financial a strategy consultant and, and financial in the financial world to say, you know, I just wanna observe, and I cannot tell you how many situations there were where clients would come in with a real estate portfolio and the conversation would go something along the lines of real estate is wonderful.
Here’s all the reasons why you should stay away from hardcore assets. Oh, by the way, you can still reinvest in real estate if it’s through a REIT or through some sort of a fund. Because that’s how the financial planner was getting incentivized, is to have the clients there at their disposal versus in the hard assets. Well, when I realized that, hey, by the way, my husband’s in real estate, we’ve been in real estate for a really long time, and I happen to be very passionate about real estate. Not to say that everything has to be in real estate, not at all. But it’s, it’s a it’s an area that I know that I trust that we’ve made money in, et cetera, et cetera. And so one of the different approaches that we take with our clients is I don’t ever want a client to be in a situation where they feel like their questions are stupid, especially when they talk to financial planners or financial advisors or anybody in the financial services industry.
Eunicia Peret: And so after clients end up working with us, they know that there’s no question and there’s no statement that is gonna get thrown their way, that’s going to make ’em feel tiny as a human being. Why? Because they’re empowered with the knowledge. They don’t have to know how to do it themselves, but they’re empowered with the knowledge to know that, as one of my coaches would say, they no longer will be bamboozled because they know better. They know that they have options. And so when somebody comes and says, well, this is best for you, because… Immediately the answer can be, well, I don’t think it fits me. Here are the reasons why. Whereas historically, people don’t know how to come back with that answer because they don’t understand the different options.
Financial Planning by Working Backwards
Jenn DeWall: Yeah, I love that. Giving people permission to not know, being supportive and trying to build that collaboration that is absent of that feeling like, I don’t know, you’re just trying to get something from me and I don’t even know if I like you. I, I really appreciate your approach because I, I feel like that’s, if people responded like that, like I would build trust a lot faster and feeling like, yeah, I actually wanna do this and thank you so much that I feel like I actually understand what we’re doing or what these fees look like or what the consequences are, that nothing is going to come outta the blue. That’s going to surprise me. Like I really appreciate that approach. All right. I know that we have, I love, I love this conversation, but I know we still have to get to our final pillar. What is the final pillar?
Eunicia Peret: So the final pillar is what I would call the, the strategy, right? Whether it’s we’re we’re working on W2 job and we are looking at retirement, or we may be our business owners, or we want to build a business and we want at some point in time think about how do we, how do we pass that business on? Or how do we, how do we get to enjoy the fruits of our labor when it comes to the financial side of things, right? When it comes to being able to extract the money that we’ve set aside or the wealth that we’ve built. And so when we focus there as I mentioned earlier, we really start looking at both forwards but also backwards. We have to look backwards in order to understand where we’re at. And this is where I have a, a great example a client that came to us, and it’s funny because I just met with husband and wife two weeks ago and when the very first time they came to us one of the things that she said is, I, we talked about what, what do you think you you’re gonna wanna be when you retire?
And she said, well, based on everything that we’ve been told, again, by however many other people they’ve spoken with, we would be happy if we’re looking at somewhere around $5,000 per month. And I thought, okay, that’s, that’s not a bad number, right? Especially for people in retirement based on their lifestyle, et cetera. Well, here’s the deal. When we work things backwards and we made just a couple of small shifts in, in terms of their financial portfolio, not all of it, but some of the things shifted at the very onset on a very minimal basis, they were looking at a projected $8,000 in income. And that was very conservative. Wow. Can we honestly say that their life has ar automatically changed that their mindset is now in a totally different place. Because instead of thinking if I can get $5,000 now they know that at a minimum we’re gonna have almost a guaranteed $8,000 coming in.
Jenn DeWall: Yeah,
Eunicia Peret: Well here’s the beautiful thing. This was a few years ago when we met just a couple of weeks ago and we looked at, of course they’ve gotten better jobs and they’ve gotten better salaries and they’re setting more money aside and their, you know, their, their financial platform continues to evolve. Now, eight thousand dollars is gonna be there, but it’s gonna be a whole lot more than that. And so as we, I’m sure everybody that’s listening can think to, well, if I could, and the idea is you can, but you have to have the right strategies in place. And without working things backwards, there is no way that that’s gonna happen. Unfortunately, to work things backwards goes against the grain of what the industry as a whole does. And when we realized that that was one of the big blind spots for people, we just said, you know what?
We have to focus on it. We have to work things backwards as hard as it is. Because then we know we’re gonna, we’re either on the path to achieve the results or we’re veering off path and we need to come back to course. And it’s just a beautiful thing because that gives us that sense of we’re gonna be okay. And that sense of, of confidence in what the future is gonna hold is so powerful regardless of what happens in life with our careers, et cetera, they will bounce back. But if we don’t do things correctly on the financial side, we’re gonna constantly play catch up. And catch up is not a pretty thing to do.
How to Connect with Eunicia to Learn More
Jenn DeWall: Oh my gosh, catch up just sounds, we have less time and we’re not as energetic as we used to be. So catch is gonna be hard at that point in time. Work it backwards, be open to a new approach. Check your scarcity mindset. Talk about those three pillars of reducing and minimizing your taxes and optimizing your financial portfolio. And of course just retirement planning. You’ve shared a lot today. I have really enjoyed our conversation. I think probably because it felt like confession for me, I really had to own some of the mistakes that I’m making. But how can people get in touch with you?
Eunicia Peret: The easiest way is to check us out on our website, empowerfinancialplanner.com. We’re also on social media. You can find us under Eunicia Peret we’re quite active, especially on LinkedIn for our listeners, I’m sure you guys are all on there. Reach out to us, message us and it would be our pleasure to help you out. And we also have a, a giveaway for you guys. The five biggest pitfalls that we see in individuals. They’re a very easy read. I encourage every one of our listeners to go in there, check ’em out, and after you have a chance to read them, it’ll also give you an opportunity to schedule a call with one of our team members. It would be our pleasure to just answer some questions that you guys may have and you can find that at empoweredfinancialplanner.com/pitfalls. And it’ll also be, I think in the meeting notes.
Jenn DeWall: Yep. It’ll be in the show notes. Thank you so much, Eunicia, for just sharing, stopping to give us your expertise, your time even to probably entertain the random questions that I asked. I just really appreciate your approach to financial planning and really thinking about how can we maximize our future so we can live those best years in the best way possible. Thank you so much for coming on the show.
Eunicia Peret: It was my pleasure, Jenn. Thanks for having me.
Jenn DeWall: Thank you so much for listening to today’s podcast. I know that there were so many insights that I gained. I know that I obviously have a big opportunity to maybe be a little bit more assertive in how I manage my finances and even if it is just starting small, just like Eunicia opened with starting small. Now, if you want to get in touch with Eunicia, you shared a resource, the Five Pitfalls to Avoid in Retirement. So if you wanna connect with it, it’s going to be in our show notes. You can find that resource link at empoweredfinancialplanner.com backslash pitfalls. And of course, if you enjoy today’s podcast episode or maybe you know someone else that could benefit from hearing this message, share it with them, leave us a review. We would love your feedback.
And in closing, if we could do, do anything for you or the leaders to help you develop, let us know. In January, we’ll be doing a free webinar open to the public, all about growth mindset. And of course we offer a complimentary two hour leadership skills workshop that we will be willing to come in virtually or in person to any of your organizations because we are so committed to developing and making the world a better place by developing better leaders. Thank you so much for listening. Until next time.