Speaker 1: Welcome to another episode of the Chicks on the Right podcast,
Speaker 1: where we have friends and sponsor of our show, Zach
Speaker 1: Abraham from Bulwark Capital Management, on with us to talk
Speaker 1: about finances, money, the economy, all kinds of stuff. And
Speaker 1: today we're going to talk about inheritance because there's a
Speaker 1: recent article from MSN dot com entitled five reasons that
Speaker 1: boomers are spending their money instead of leaving it to
Speaker 1: the kids. So what's your immediate take on inheritance and
Speaker 1: how it should be managed?
Speaker 2: And do you think the boomers are mean? Because I
Speaker 2: don't think they're being mean. They want to spend it
Speaker 2: on themselves. They can just spend it on themselves.
Speaker 3: Yeah.
Speaker 4: You know what's funny from my perspective, I've actually had
Speaker 4: to I've had to step in several times and kind
Speaker 4: of grab clients by the shoulders and shake them and say, listen,
Speaker 4: your retirement savings.
Speaker 3: Are not for your kid, right, what is left over
Speaker 3: is for them. But you know it's in.
Speaker 4: One of the ways I explained it to him is
Speaker 4: I go, like a drowning man saves no one, right,
Speaker 4: So if you exhaust your funds, your kid's gonna end
Speaker 4: up being you know, trying to take care of you
Speaker 4: if if if they're not just a complete user, right,
Speaker 4: because there I've seen some of that too, which I
Speaker 4: mean I always, I always say the most disgusting part
Speaker 4: of this job is when somebody passes away. I've seen
Speaker 4: some really good situations and families that handle it correctly,
Speaker 4: but just watching the vultures come in and.
Speaker 2: Oh my gosh, I can only imagine people. Money changes people.
Speaker 4: Oh yeah, it just and it's just it's and and
Speaker 4: and the matters and the amounts really don't matter.
Speaker 3: Right, You're right, it turns into it, it turns into
Speaker 3: a blood fight, and it's just disgusting.
Speaker 4: Yeah, But generally speaking, so I've gotten to see a
Speaker 4: lot of different inheritances and and some of what my
Speaker 4: clients have done have greatly impacted what I plan to do.
Speaker 4: But but first and foremost, Yes, what you were saying
Speaker 4: is I think that the boomers, in some ways, the
Speaker 4: boomers are helping out their kids more than ever, more
Speaker 4: than any other generation. So I think that there is
Speaker 4: actually a lot of that going on. But I do
Speaker 4: also think due to the lack of pensions, right, remember,
Speaker 4: so like the makeup financially of this generation that's retiring
Speaker 4: is substantively different than any other major generation that's retired before.
Speaker 4: If you go back and look at retirement in the
Speaker 4: seventies sixties, most people had virtually no exposure to the
Speaker 4: stock market. They had a pension, and then they had
Speaker 4: additional income that they made off of CDs and bonds
Speaker 4: and things like that. The stock market was not considered
Speaker 4: a retirement.
Speaker 3: Vehicle the way it is now. So it's changed a lot, But.
Speaker 4: I still do see the boomers helping out a lot.
Speaker 4: But again, it changes the way you look at things
Speaker 4: when all of a sudden you're sitting there going, Okay,
Speaker 4: I am my pension, right, I got to stretch this
Speaker 4: money out and make it work. So I see both
Speaker 4: things going on. I see them helping out a lot,
Speaker 4: you know. I see a lot of people helping their
Speaker 4: kids out with first with first home purchases, especially recently.
Speaker 3: But then, yeah, I think.
Speaker 4: They got a button batten down the hatches a little bit,
Speaker 4: just because a lot of them are have the fixed
Speaker 4: income portion, so the portion of their retirement income that
Speaker 4: is coming in every month, regardless of what happens in
Speaker 4: markets or anything, that is a smaller percentage of their
Speaker 4: overall retirement spending than any other generation before. So by definition,
Speaker 4: they've got to be more mindful and watchful over their
Speaker 4: retirement assets because you know, it's not guaranteed.
Speaker 3: Isn't it.
Speaker 2: Like Warren Buffett or somebody who didn't leave money to
Speaker 2: his kids because he's like, I don't.
Speaker 1: Want to do slan to I mean he's live.
Speaker 2: Yeah, you know he's still live, but I'm like he
Speaker 2: but he doesn't give him money. He doesn't like dole
Speaker 2: out because he could be literally they could they could
Speaker 2: be living at daddy's house right now and not doing
Speaker 2: anything right.
Speaker 1: Yeah, well he doesn't even live in like a fancy
Speaker 1: house like he lives like in a seventies little Brady
Speaker 1: Bunch house. Yeah, he lives very modestly.
Speaker 4: Yeah, it's a five thousand square foot home in Omaha.
Speaker 4: But it's the same one I believe he purchased back
Speaker 4: in the late fifties or early sixties.
Speaker 3: Wow, he's remodeled it nice people have. Yeah. People have
Speaker 3: to remember though, with Warren that he is, first of all,
Speaker 3: I am convinced and it's not a this is not
Speaker 3: a controversial thought, but that he's probably he's a little
Speaker 3: on the spectrum, and he is obsessed with the idea
Speaker 3: of compounded interest. So for him, the house is not
Speaker 3: him being disciplined, it's the idea that that money is
Speaker 3: not compounding at a rate of like ten to thirteen
Speaker 3: percent a year. It just drives him nuts, literally, So
Speaker 3: where you and I'd be.
Speaker 4: Like, hey, when I get rich, I'm going to keep
Speaker 4: the house small because you know, I'm not going to
Speaker 4: overextend myself. That that's not his thinking, right, The byproduct
Speaker 4: is that. But he's just obsessed with compounding interest. And
Speaker 4: this is a guy that you know, had accumulated don't
Speaker 4: quote me, but I want to say it's something like
Speaker 4: between thirty to fifty grand by the time he was
Speaker 4: fifteen or sixteens, is doing odd jobs. And remember this
Speaker 4: is like back in the thirties, right, so he could
Speaker 4: pay cash for a nice new home, you know when
Speaker 4: he was in his teens, and it was just compounded interest.
Speaker 4: He was just obsessed with the concept. But what he
Speaker 4: said is he wants to give them enough money to
Speaker 4: where they can do some cool things, but not enough
Speaker 4: money to where they can do nothing. So yeah, I
Speaker 4: don't know what the amount is that, but he's leaving
Speaker 4: them a very manageable amount. Now I get this question
Speaker 4: all the time. Do I agree with that one hundred percent?
Speaker 3: Okay?
Speaker 4: We live in a period of time where culture glorifies
Speaker 4: money and wealth above all else.
Speaker 3: And as a guy that has been flushed and a
Speaker 3: guy that has been.
Speaker 4: Broke, I have found the correlation between money and happiness,
Speaker 4: and more importantly, money and a good family to be
Speaker 4: very loose, right, like, meaning, money magnifies what you are.
Speaker 4: If you're not happy without it, you won't be happy
Speaker 4: with it. If you got a bad marriage without it,
Speaker 4: it'll get worse with it. It just magnifies, right, And
Speaker 4: so we put so much stock in money that looking
Speaker 4: back at my own kids, I don't want money, you know,
Speaker 4: I don't want it to limit their potential, like you know,
Speaker 4: I want them to have the resources needed. But you know,
Speaker 4: my wife and I talk about this all the time.
Speaker 4: We had to fund our own way through college. We
Speaker 4: had to do all this stuff on our own, quite
Speaker 4: the hard knocks way, right, Yep. There's such a satisfaction,
Speaker 4: a sense of accomplishment, and also you know a closeness
Speaker 4: that that you know, that that breeds or that yields
Speaker 4: that you just can't get anywhere else, and that sense
Speaker 4: of satisfaction.
Speaker 3: I think to rob that from your kids is I
Speaker 3: think it's a crime.
Speaker 2: Yeah, there's definitely there's definitely a difference between a kid,
Speaker 2: I think, who has some skin in the game, like
Speaker 2: with college, and a kid who doesn't. But you know,
Speaker 2: with us, like we've always been like, okay, we we
Speaker 2: will help you out, like with our older kids, will
Speaker 2: help you out, make sure that your college is paid for,
Speaker 2: will make sure you don't have any debt. And then
Speaker 2: you are educated and you are capable, and you're not
Speaker 2: coming back to live here and then and then you
Speaker 2: know what I mean, And then you are you're you're
Speaker 2: capable of going out and making your money. And both
Speaker 2: of them have done that. Now our fourteen year old
Speaker 2: is our fifteen year old will have to have a
Speaker 2: little skin in the game when it comes to college.
Speaker 2: And so she's already like well versed in Okay, I've
Speaker 2: gotta I gotta do, like she knows in the back
Speaker 2: of her mind, I gotta do this. I gotta get scholarships.
Speaker 2: I gotta have it like she gets it. And and
Speaker 2: they're all hard workers. But I think you know a
Speaker 2: lot of that lies with they're not going to be
Speaker 2: handed everything, Like they're definitely not handed everything, because we
Speaker 2: weren't handed everything because we my husband and I both
Speaker 2: were not We didn't come from people with a lot
Speaker 2: of means, and so it's so so good for you.
Speaker 2: And I think it's good because a lot of times
Speaker 2: I look around and it's not all the time, but
Speaker 2: it shouldn't be a blanket statement. But I think, you know,
Speaker 2: I look around and I see some people, at least
Speaker 2: people who I have known throughout my life, who if
Speaker 2: they were given like a hefty inheritance, or if they
Speaker 2: knew they were going to get an inheritance, they were
Speaker 2: freaking lazy.
Speaker 1: They were lazy, well, fear right, Like, there's so many people.
Speaker 1: One of the things I thought was so interesting about
Speaker 1: this MSN article is that they talked about, like these
Speaker 1: reasons that the boomers are spending their money instead of
Speaker 1: leaving it to their kids is not necessarily about a
Speaker 1: plan for like when they died and the kids inherit
Speaker 1: all this money, but instead they wanted to be alive
Speaker 1: to see their kids enjoy some of it. So they
Speaker 1: were like living and it wasn't really an inheritance. It
Speaker 1: was really like, hey, we want to help you pay
Speaker 1: for college. Hey we want to help you pay for
Speaker 1: this house because we want to help you understand the
Speaker 1: value of money and also enjoy watching our loved ones
Speaker 1: have a great life, like a have a new house
Speaker 1: or have a whatever college paid for, you know what
Speaker 1: I mean. So that was interesting, But the super rich
Speaker 1: was the most interesting because the super rich also the
Speaker 1: people I think that we're doing it right, were the
Speaker 1: ones that were saying, you're just like Warren Buffett, You're
Speaker 1: going to get enough to be comfortable, but the billions
Speaker 1: of dollars I have beyond that, you're gonna help me
Speaker 1: decide what charities are going to right right?
Speaker 3: Cool?
Speaker 4: Yeah, And I think that going along, one of the
Speaker 4: easy or one of the things that I've gleaned from
Speaker 4: this is that if you're gonna give money to kids
Speaker 4: reward activity, give give help them in things that they're
Speaker 4: already attempting to do right right and to see progress, like,
Speaker 4: for instance, well I help my kids out with the
Speaker 4: down payment on a house if I am so blessed
Speaker 4: to be in that position at that time, probably, but
Speaker 4: I'm gonna want to see some money saved up first, right, exactly,
Speaker 4: and and and does it have to be a certain percentage? No,
Speaker 4: but let me see the effort, right, let me see
Speaker 4: the and and and let me and let me help
Speaker 4: you and let let's I want to help you on
Speaker 4: your way.
Speaker 3: But helping you on your way kind of implies you
Speaker 3: already started, right, like, I'm not gonna get you out
Speaker 3: the door.
Speaker 4: And I think that the delineation I'm gonna help you
Speaker 4: do things, I'm not gonna help you do nothing right.
Speaker 4: And and I had a very wealthy client that came
Speaker 4: up with what I thought was an ingenious plan. And
Speaker 4: it was very very detailed and very structured. And he
Speaker 4: was a self made guy, you know, bootstraps type story.
Speaker 4: We all know it, working class guy, construction type company,
Speaker 4: specialty niche. But it worked his way up to where
Speaker 4: he's probably forty fifty million dollars net worth, right, and.
Speaker 3: He has two daughters.
Speaker 4: And what he did with his estate attorneys and a
Speaker 4: little bit of help from us, but they had most
Speaker 4: of this put in place.
Speaker 3: And what they did.
Speaker 4: What he did is he delineated out like life goals,
Speaker 4: so if they got married, they would receive this. If
Speaker 4: they stayed married for ten years, they would get this.
Speaker 4: If they got their master's degree, they would get this.
Speaker 4: And so there was money there to help out for things,
Speaker 4: but every portion of money required them to accomplish something
Speaker 4: to get it right. And so it was like, even
Speaker 4: when I'm not here, I will help them, but there
Speaker 4: have to be things that there's got to be progress evident. Right,
Speaker 4: I'm not just going to hand them a million dollars
Speaker 4: because they got married.
Speaker 3: And I remember the conversation with him. He goes, A,
Speaker 3: they haven't earned it, and B I want the marriage
Speaker 3: to work.
Speaker 1: That's good.
Speaker 4: Yeah, And you know, I think about so many times
Speaker 4: where you know, I don't I mean, I don't think
Speaker 4: this would have been the case. But a lot of
Speaker 4: times going through those hard times, those broke times when
Speaker 4: you don't have enough money to get a divorce, right,
Speaker 4: like you don't have it of money, you got to
Speaker 4: learn how to work through things. And I think we
Speaker 4: as parents, they have a term for it now, snowplow parents. Right,
Speaker 4: everybody knows helicopter parents, but snow snowplow parents go ahead
Speaker 4: of the kid and knock down every obstacle.
Speaker 2: Right, Yeah, that's so bad.
Speaker 3: And then they will why isn't my kid strong, and
Speaker 3: I'm like, he hasn't had to be.
Speaker 2: They have to and they have to eat the ramen noodles,
Speaker 2: they have to period of time, they have to have
Speaker 2: the apartment where they have cinder blocks is furniture for myselves.
Speaker 3: And it's fun.
Speaker 2: It's fun, you know, it's fun.
Speaker 3: It's you hungry, and that's good. It's a good thing.
Speaker 3: And it makes you scared. It makes you scared out
Speaker 3: of your bloody mind, and it makes your paranoid. I
Speaker 3: was listening to a Joe Rogan interview recently and he
Speaker 3: talked about being growing up and being paranoid, being a loser,
Speaker 3: and I was just laughing because I was like, I
Speaker 3: still have that paranoia. I remember I worked on a
Speaker 3: fishing boat and I took a bunch of books with
Speaker 3: me because I was so afraid I wouldn't go back
Speaker 3: and finish college.
Speaker 4: Just paranoid I was going to be nobody. And that
Speaker 4: little fear is good. It drives you, it's you up
Speaker 4: early in the morning. It makes you work harder.
Speaker 3: And you shouldn't feel a little PTSD is good for you,
Speaker 3: right you just everything shouldn't be easy, and and you know, nobody,
Speaker 3: nobody climbs to the top of a little knoll and
Speaker 3: stands there and head. They do it when they get
Speaker 3: to the top of a mountain, Right, that's.
Speaker 4: An accomplishment, And I just feel like we're flattening too
Speaker 4: many mountains for our kids.
Speaker 2: Yeah, I love that. I love them. That's good.
Speaker 1: That's good stuff right there, Zach. You always have good stuff.
Speaker 1: And I know you have lots and lots of good
Speaker 1: advice for people who are either looking for a financial
Speaker 1: advisor or maybe already have one but would like a
Speaker 1: second opinion. You have these free webinars that people can
Speaker 1: sign up for. Where can people learn more about you
Speaker 1: and your services.
Speaker 4: Yeah, we've actually got one coming up, so you can
Speaker 4: go to Buworkcapitalmanagement dot com. Know your Risk Radio dot com.
Speaker 4: You can just google us Bullwork Capital Management takes you
Speaker 4: right there to our website. You can sign up and
Speaker 4: the other nice things. You know, when you're investing with us, lending,
Speaker 4: your money is going to black Rock or Vanguard or
Speaker 4: any of those other places too.
Speaker 3: So love that. Not a bad deal. Love it? Thank you, Zach,
Speaker 3: Thanks ladies, thanks for having me. Reservices offered through Trek
Speaker 3: Financial LLC and SEC Registered Investment advisor.
Speaker 4: The opinions expressed in this programmer for general informational purposes only,
Speaker 4: and are not intended to provide specific advice or recommendations
Speaker 4: for any individual or on any specific security. Any references
Speaker 4: to performance of security so thought to be materially accurate
Speaker 4: and actual performance may different.
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