Trying to understand the financial industry can be hard, thus affecting your decisions and plans later on in life. There’s just not enough authenticity in the financial education around that people end up losing interest and unmotivated with taking care of their finances. This gap in the industry is what pushed Joe and David to take action and set up Thrive Financial Services. They advocate for better financial education that will help people navigate through their financials and retirement plans easily. Joined by Bret and Karen, they took it in their hands to provide people the education that they need. For this inauguration, we look back at the beginnings of Thrive Financial Services as we take your financial matters together hand in hand.
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Meet Thrive Financial Services!
David Bezar is with us along with Bret Elam. David, welcome.
Joe, thanks so much. I appreciate it. I’m excited about our show and looking forward to it.
Bret, I give you the same opportunity to welcome everybody into our show.
I’m looking forward to getting this show rolling.
We’re going to get into a lot of different conversation, but all meaningful conversation. David, let’s begin with an understanding for our audience. A little bit of information about Thrive Financial. How did it all came together?
Bret and I worked in the financial services industry for a long time. I’ve been in the business for 27 years. A lot of that career was spent in organizations where there were some controls in place with respect to how we do business, who we do business with, so on and so forth. After Bret and I met, a lot of our conversations always surrounded about how do we go out there and be true fiduciaries. How do we be independent and be able to bring quality information, great education, and value? If people want to implement those different strategies that we’ve talked about, how do we do it in a way that we’re able to give them the best? We can represent them, not the companies that are telling us what’s best to sell.
Bret started the company. We knew each other for a while. I got to Thrive. We sat down and started figuring out who we wanted to serve and how we wanted to serve. The common thread between Bret and I is we were focused on acting as advocates and bringing a tremendous education. We love when people get that a-ha moment. We try to talk with people, not at them. We try to engage them. Get them to understand what they’re doing with their finances. They’re able to communicate with us on an even playing field. They ask great questions. That means they’re engaged. They’re understanding it. We never want anybody walking out the door from our office going, “I’m not sure why I got that. I’m not sure how it works. I guess it makes sense.” We want people understanding it from day one.
To follow up on how it all started in the financial industry, in that big bubble or under that umbrella, there’s an incredible amount of misinformation that confuses people.
For years, there has been this nomenclature of high finance. For the years that I’ve been in the business, it’s a way of creating the need by financial advisors, insurance agents, and other financial professionals. Meaning they keep a gap between themselves and the people that they’re trying to serve. As long as that gap’s there and people are confused, they’ll need those financial professionals. We didn’t want that. We wanted to make sure people got the truth.
When you act as a fiduciary, you’ve got to be transparent. You’ve got to act as a prudent individual. You’ve always got to put the people you’re serving’s interest ahead of your own. That’s an easy way to operate. If you go do that, there is no misinformation. It’s good quality information. There are tons of misinformation out there. What’s hot this week? What’s hot next week? The truth is the fundamentals of being successful financially run true. They’ve been that way for a long time. Methods sometimes change a little bit but the core is always the same. That’s what we try to bring to people.
Bret, would you say that this is a fair statement? There are no quick fixes. There are no magic potions to the process. It’s all about being real. It’s about living within side your circle of which you do business with on a daily basis.
We take people through the exercise and trying to put all the puzzle pieces together. David said it when we first met when the company started. It was my a-ha moment in my career where all of a sudden, we’re being exposed to solutions that we had not otherwise seen before. It took a colleague of mine to explain how that independent space looks. It’s where David and I are thriving now. Where we never wanted to put ourselves in a position where we had to deny our clients to solutions they deserve simply because of the place that we worked for. Taking people through that educational advocacy process, making them feel comfortable where there is no stupid question, it’s why we take our time with everybody because there’s literally nothing we don’t do. Once people truly feel comfortable with us and the solutions that we talk about, along with that education and putting all those puzzle pieces together do we ever engage in that relationship.
[bctt tweet=”The method sometimes changes but the core is always the same.” username=””]
We don’t have Karen here. We had hoped to bring Karen and welcome Karen into the audience as well.
Karen will definitely be on the show throughout and brings a lot of value to the organization. She loves what she does. She loves meeting and engaging with people.
You’re going to meet a company who lives local, who works local, who serves the local community. This is all about education. It’s all about advocacy. David, we’re going to deal with education advocacy and that statement of no pressure, which sometimes is automatically assumed in the process.
That is some of the most common remarks that we get from people. It was by design. We wanted to be in a place where we didn’t feel we had to push people into decisions. That’s not being authentic with our goal. Our goal is to educate, empower, and get people to understand specifically how to navigate retirement. During the 27 years that I’ve been doing this, I’ve spent a lot of time with young families and basic financial needs. As my clients got older and their needs changed, we ended up seeing a significant difference in the type of information that they needed. We changed that course and correction. We went in a different way in the sense that we wanted to work with retirees because the needs that they have are different.
As you’re in the accumulation stage of life, most financial professionals could probably give you decent advice. As you go into retirement, you have to start thinking about, “How do I get this money to last my lifetime with taxes, Medicare, and Social Security, long-term care needs, medical catastrophe situation?” It’s a whole different way. The thing about it that’s most important, you don’t have a do-over. This is a time where time becomes important and you’ve got to get it done right. That’s what we’ve definitely focused on. We want to get people to understand it. We want to show them the different paths that are out there. Bring to their attention the challenges that might present themselves. We encourage people not to be the ostrich who’ll stick their head in the sand and hope things go away. We knew because people have had experience with financial professionals for years. If we were going to have a pressure approach, it wasn’t going to be successful for them and it wasn’t going to be successful for us.
How difficult is it? How challenging is it for you when you enter into a conversation for the first time with somebody who doesn’t know? Sometimes that’s a barrier in itself where the individual almost feels intimidated because they don’t know. They’re smart enough to know what they don’t know but yet intimidated by that fact.
We start our conversations when we sit down with our prospects and people that we engage with. We do a lot of workshops, too. We focus in on what your concerns are. We always want our client’s plans to be their plans, not our plans to be their plans. We laugh a little bit and call it dental pain. We take people through a little bit of dental pain, of identifying what it is that keeps people up at night both from a concerned standpoint but also what makes them exciting and trying to help them achieve those goals.
David and I, we’re honest with people. Fortunately, a lot of times we’re saying, “Things are looking pretty good. We might want to tweak this or tweak that.” Being a fiduciary, we have to be brutally honest with people too when their wishes aren’t realistic. We may have to work a little bit longer. We might need to cut back our standards a little bit. A lot of times, it’s sitting down with people. People aren’t necessarily as bad off as they think they are. Sometimes people aren’t as good off as they think they are. It’s putting people through all those different what-ifs of life and making them feel comfortable with them all.
[bctt tweet=”We want to be in an authentic place where we don’t have to push people into decisions.” username=””]
David, give me an example of brutally honest.
It goes on both sides. It is fortunate that a lot of the folks that we happen to see in this area are close to having a successful retirement. It’s like Bret said, “Some minor tweaks.” More often than not, we’re giving two thumbs up and saying, “It’s a minor carburetor adjustment. If you do this, we’ve got some assurances that retirement’s going to be fine.” There have been times it becomes blatant to us. We see many people. We get an idea where somebody says, “My monthly expenses are $10,000 a month,” and they may have $700,000 set away in a nest egg for retirement.
When you do the calculations, the ratio doesn’t work. They’re going to spend out of money over their lifetime. That’s not even taking into consideration any hiccups along the way. That’s somebody that we’ve got to be honest with. We’ve got to talk about delaying retirement, bringing down expenses, and not being at that higher number. Doing some things that are going to make some sacrifice in the situation, if you want it to work. Nine times out of ten people want to hear that. They recognize it. They may not be smiling but they at least walk out knowing and having solutions on how to make sure that it gets done.
Bret, let’s go back if we can to the story of Thrive. Let’s explain to the audience a little bit of how Thrive started so we can bring them to the present.
This is my 19th year. Back when I started in this business and as much like David, I grew up in that environment where that box was tight. You had to operate within that. When I left and met David and inevitably taken the entrepreneurial spirit of what I learned for the past two or three years and starting Thrive, just trying to focus on the injustices that were out there. The hard cells that were out there and taking people through that education advocacy type of approach where in the beginning stages and inevitably meeting up with David and saying, “How can we spread this message?”
The things that we all take for granted, it’s like being an auto mechanic or being an attorney. They’re good at what they do. Generally, we took for granted the things that we were good at. When people were leaving our office, dating back to when we first started saying, “I’ve never had this dialogue before,” inevitably now, once or twice a week, David and I are doing workshops around the Delaware Valley. They’re focused on libraries, community centers, township buildings, and people genuinely looking for an education that’s out there. The various topics in retirement, whether it is taxes, income planning, Social Security. We ’re trying to get our message out there as much as possible for people that genuinely are looking for help. That’s what we love to do. My mother grew up as a calculus teacher. My father was a swimming pool owner and a coffee machine owner. I feel providing that educational soft approach and genuinely building relationships with people.
[bctt tweet=”Our goal is to educate, empower, and get people to understand how to navigate retirement.” username=””]
David, you made a statement that you’ve aged with a lot of your clients. You met your clients at a different space, at a different time period, and you are aging with them. That tells me that you have connected with them. That tells me that it creates for you an opportunity through their network to reach people and to get into those conversations.
It’s an evolution of life. It needs change as time goes on. Young families have different needs than people who are close to retirement. It dictated to me, it was glaring that my business model had to change. I never liked being a jack of all trades. I didn’t want to be the person who, as a financial advisor, that whatever you need I’ve got. I wanted to specialize. I wanted to become someone who could provide tremendous value in a different space than most other financial advisors were working. We were able to do that at Thrive. A couple of years preceding retirement and then obviously during retirement are critical. The two biggest areas of concern that we hear from folks that visit with us are, “Do I have enough money to retire?” Number two is, “Will it last both of our lifetimes?” if they happen to be a married couple. That’s constant. We have it on a questionnaire, “What are your primary financial concerns?” Without fail, those are the two 99% of the time that pop up.
What if the answer’s no to the first question?
It’s challenging. One thing I’ll tell you about Thrive is we will meet with anybody. A lot of people put major criteria on who they want to meet with. We joined an organization called The Society for Financial Awareness and it’s a nonprofit 501(c)(3). Some of the mandate for that is bringing awareness to the communities out there. Our practice is doing incredibly well. We feel, we want to and we enjoy the process of going out and talking to people, and sharing this information. When somebody does come in who don’t have enough money saved for retirement, most times they would tell each other they know it, but they’re looking for some advice. “What could I do?” and we’re able to help. There are different things. There are some cost-cutting things that we can come up with. Sometimes it’s putting an arm around them and saying, “You got to cut back on a few things. You can’t live the same type of lifestyle. You may have to work longer than you anticipated.”
Because of how we do our business through these educational classrooms, these workshops that we do, most people who come into those are looking for education information. They’ve got money but they’re not sure exactly what to do. They go to their financial advisor and they’ll ask about forward tax planning and they won’t get clarity. They’ll ask about Social Security and most financial advisors are not educated on how Social Security works. They’ll tell them, “Go to the Social Security office.” I have to be careful what I say, but it’s probably the worst advice you could possibly give somebody. We educate people on how to go ask correctly to get the biggest benefit out of Social Security. We talk about Medicare surcharges. These are things that people are wondering but they can’t get that answer. That’s why we think Thrive is a wonderful place for people to go get that information. That’s what we specialize in.
Bret, what strikes me most about David’s reference to these workshops Is these are not workshops that you’re doing one workshop every sixteen weeks, signing up, and spending an incredible amount of time planning for a workshop four months from now or three months from now. These are as real as the week in front of us because you do them with some incredible frequency.
David talked about our focus on educating people as they’re getting ready for those retirement years. Conventional wisdom has you in a job for twenty, 30, 40 years where you’re used to doing the same thing over and over. You have decisions to make. What’s the right pension election? What’s the right choice that I should take for Social Security? Not understanding that retirement income is taxed differently than your everyday income that’s out there. Knowing it’s a significant number of people, of Baby Boomers who are hitting the age of 65 and 70 every single day. The reasons we do the frequency of them are people who are retiring every single day all around the Delaware Valley. It’s true in that non-threatening environment. We’re not serving filet mignon and crab cakes. We’re in libraries. We do have homemade cookies and coffee. It’s taking people through conversations that they have not necessarily thought of before.
Sometimes they’re leaving a little bit with a brain sprain or they’re drinking out of a fire hydrant because of the information that we go through. The people that are genuinely looking for that next, “How does all this information apply to me?” It doesn’t matter how much or how little you have, everyone’s situation is different. We try to take those broad brushstrokes that we’re talking about during those workshops.
You have a workshop on tax efficiency on retirement? What will people learn from that?
This workshop will be about tax efficiency in retirement. The rules are a little bit different. Social Security income is taxed like no other income that you’ll receive over your lifetime. When we go through what’s called the provisional income calculation, I’m glad Bret’s mom was a calculus teacher because it came down to Bret because it does take a lot of explanation. You can see that look on people’s faces in these workshops. The neat part about our workshops that we witness is people don’t run out afterward. We stick around typically a half hour, 45 minutes answering questions.
Then we encourage people to come to our office, completely complimentary, to continue that education. No pressure. You have questions that we can’t answer because of time constraint, so come on in the office. Spend an hour with us. We’re not going to charge you anything. We’re not going to push anything. We’ll answer your questions. We want to make sure you walk out the door. At the end of the day, from a business perspective, we believe if you do well by people, people ultimately do well by you. That’s our goal and role. That’s what’s worked out for us. We love doing them and will continue to do them.
[bctt tweet=”The individual almost feels intimidated because they don’t know they’re smart enough to know what they don’t know.” username=””]
That’s the benefit of being local, living local, working within the community, and providing good, local information. Remember the tagline, some of the bullet points that we’re hitting, education, advocacy and no pressure. Give us a little bit of a preview, give the audience a little bit preview about these workshops so we can understand and I’m fascinated by the ability to just gather and get information. No expectation other than learn something you don’t know.
During the tax workshops, we’re starting to find how taxes work, going through the differences in marginal effective tax rates. Then we have our crowd thinking about what’s going to be different. Those twenty, 30, 40 years working in a job, realizing that taxes in retirement are going to look a lot different than it did a during our work in a year. We take people through a demonstration through one of the software that we utilize every single day, where it’s the difference between forward tax planning and reporting what happened yesteryear. We’re all used to and we have lots of accountant clients and accounting professionals that we partner up with. They’re a lot of times simply notating and record keeping of all the 1099s and W2s that happened where we’re sitting down with our clients.
We go through a demonstration of planning for that next year that’s out there. We go through a demonstration talking about the Johnson’s. This is a couple that needs, for example, $4,000 a month and the Johnson’s are made up. They’re able to get all that income from Social Security. David talked about that provisional income calculation that’s out there and educating people that Social Security is going to be taxed like no other income you’re ever going to receive. If I said, “Joe, if you were making everything that you had but you did a great job putting money away in your retirement account, you’ve got a 457 City retirement plan or a 401(k) or a 403 plan that’s out there.” I said, “Joe, what if you had an opportunity where you were putting money away pre-tax but you had the ability to pull that money out tax-free? Is that something you’d be interested in?”
David, is that an example of an a-ha moment for an individual that attends the workshop? If there are 35 to 50 people inside the workshop, there are 35 to 50 people that have a completely different set of circumstances and a completely different perspective to the seminar.
You’d be a little bit a surprise. We’ve seen thousands of people. We’ve been doing these workshops with that type of attendance. We’ll go through some examples like Bret talked about. We’ll poll the audience. There will definitely be common ground. Even though everybody’s situation is a little bit different, most situations are pretty close to being the same. It’s the type of clientele that we deal with. They have about the same expenses. They have about the same needs. They have about the same amount of money saved. They have the same concerns, t“Do I have enough to retire? Will it last? How much will taxes erode? When should I take Social Security? What happens if I become ill and needing some type of care facility? How do these work into the plan?”
One of the things where we’ll see those a-ha moments is what Bret talked about. There are some unique times if you’re looking for them. In a client’s 60s prior to taking, having to take money in a required minimum distribution from their IRA accounts where if they tax plan correctly, even though they may not need the money to come out of the IRA accounts or the 401(k), they can take the money out and not pay taxes on it. Why not? If you have the opportunity where you had pre-tax dollars coming out without having to pay taxes, and you can build up the emergency funds or go have some fun with it, that’s a big deal. We see that as an a-ha moment a lot of times from the audience.
If there is an interest in attending, (800) 516-5861 and you can be part of that workshop.
If people are interested, they can go to our website, which is www.ThriveFinancialServices.com. We have a page on there that lists all the workshops that we’re doing throughout the community. We’re in five counties. We’re all over the place. We opened an office in Miami, Florida. We had somebody come to one of our workshops who wants to come in and visit with us, but they’re going to be down in Miami. I’m meeting them there. People can go to the web page and see all the different workshops. If they’re interested they could either call us at the number or they can register online. They’ll get a call from somebody in our office confirming. We give out lots of materials at the workshop and a lot of good takeaway items.
The best thing about it is there’s no cost for the information. Any stories resonate with you, Bret? I’m sure you have many stories or examples of found success before it started and then an example of great success when it ended.
Something that’s on top of my mind, especially talking about the taxes, is its educating people about how long-term capital gains works. People have in their mind that 15% is how much I’m going to pay. I have a philosophy that the shortest line in the world are people lined up at the poorhouse to pay capital gains tax. It means that we made money, but understanding the rules in retirement look a little bit different than while I’m working. Knowing how the tax brackets work today, where people are falling into those first two tax brackets where sometimes it was impossible to do during my working career. People have a good diversification of their monies, monies in Roth IRA buckets or traditional IRA buckets or after-tax money. That’s the communication network that we talk with our clients is when does it make sense to withdraw from which bucket.
[bctt tweet=”People aren’t necessarily as bad off as they think they are. Likewise, people are not as good off as they think they are.” username=””]
For example, I have a client who had retired and he had moved to Florida. He’s getting ready to sell his house. We had the conversation. We’ll call him Joe. I said, “Joe, we need that house to sell because of the diversification of some money that you have you were able to sustain your cashflow. The cashflow you need for all of 2018, you’re able to take that from certain buckets of money.” When he sells his house, it’s going to create a long-term capital gain down in Florida. We played the cards right and we collaborated with his accountant. He was going to have a $100,000 capital gain from that house and pay zero long-term capital gains tax. As opposed to if he sells it this calendar year, it was going to be an extra $15,000 out of his pocket.
How did the individual that you referenced in that example came to you? Was it through a workshop?
We met them at one of our first workshops out in Chester County. They put their heads down, blinders on, saved as much money as possible thinking that everything they were doing was right. Going through the process of putting all those puzzle pieces together. There are many times that people are sitting down with David and me. We’re having conversations with people. People are saying, “I’ve never had this dialogue.” It’s our belief. We believe the easy part of our business or easier, are the stocks to bonds, the mutual funds, the annuities, the actual financial products themselves. Where things get a little bit trickier, complex, is putting those puzzle pieces together of Social Security, taxes, Medicare pension. Things we did not have to think about for the last twenty, 30, 40 years.
David, I want to come to you and follow up out of the example that Bret used. There are many examples of success that start with a conversation under that heading or under that umbrella of education, advocacy, and no pressure.
A lot of times, out of these workshops, we have a lot of success with people that we share this information. Sometimes also, we get enlightened as well. We see circumstances that occur that we end up bringing into these workshops. We talk a lot and do a lot of planning oriented around the death of a spouse. There’s no way to imagine the pain emotionally but it also has a dramatic impact when it happens for finances as well. We see sometimes that a Social Security check is going to go away because that’s the rules to Social Security. What it plays into with taxation, depending on the income that’s coming into the household. When you have a couple married and filing jointly, that’s one set of rules. When that first spouse passes away and they’re filing as a single individual, they’re still making relatively the same amount of money. There’s a dramatic impact related to their taxes. We have to preplan for that as well.
In addition to that, we’ve seen it where Medicare has five different surcharge levels. The income, again, and the taxation, the brackets they’re falling into. How Medicare works are based upon what you make. Sometimes these folks are falling into a surcharge where their Medicare Part B costs can go up two or three times. These are things that we try to bring as we learn more and more. We bring more and more into the education at these workshops. When new people come in to get their consultations done, we’re able to address those things. Everybody benefits from it.
[bctt tweet=”We take for granted the things we are good at.” username=””]
Bret, is it a fair statement to say that most, if not all, are not aware of that?
Much of the planning is done thinking about, “What’s it going to be like when we’re retired?” We have to take people down the path of these decisions that we’re making that you have a one-time chance to do, especially talking about pensions and Social Security where many people are thinking about making these decisions about how it is going to help me. Statistically, with actuarial table updates, is that you have a couple aged 65. There is a 50% chance that one of the spouses makes it to the age of 95. Do we need to think about what’s my dollar worth? What’s it going to be worth 30 days from now? It’s going through that exercise of everything looks great, and then we have that awkward pause. I’m saying, “What’s life look like when the first one of us passes away?”
David, let me give you a moment to close to the show.
Joe, we encourage people that as they see these workshops on our website if they want to come out and spend an hour and fifteen minutes with us and get a great education about taxes, Social Security, Medicare, risk management, investment planning, we’re happy to do so. I want to put a plugin for Bret’s wife, Heather, who does make all the home-baked goods that we serve. She does a great job. She’s an integral part of our business as well.
We begin the conversation that will encourage you, our audience, to stop and imagine the end, to think and wonder what you can do or force you into accepting the reality of where you are while providing an outline for you to change the narrative. This is our promise made on behalf of Thrive Financial Services and made from accompany who is local, works local, live local, and serves the local community. Until next time, stay protected. Keep your future a priority and ask us anytime. On behalf of David Bezar, Bret Elam, I’m Joe Krause. See you next time.