Life is made up of choices. In every aspect of it, you have to know how to deal with certain situations. In addition, you have to be equipped with the tools you need to keep moving forward. Chuck Omphalius of Max It Out (MIO) Retirement discusses the rationale behind his 930 Plan to create awareness for people. We also talk about tax-wise strategies for hedging against inflation, then we take a little tangent and talk about one of Chuck’s non-work interests: youth soccer. Tune in and learn how to live tax-advantaged!
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Is A 930 Plan The Right Tool For You? With Chuck Omphalius
I’m doing well, Mike. How are you?
I’m doing fine. We’ve got a lot of ground to cover and a lot of different directions that we could go with this. We might want to talk about hedging against inflation and the 930 Plan as a useful tool and strategy. We might want to talk a little bit about soccer at the end if that’s a relevant topic for you. Let’s start off with a real simple one. I was on your blog and I saw the post, 7 Simple Things To Help You Become More Financially Aware. Why don’t you highlight a few of the key points from this that you think the typical reader could benefit from?
Basically, the 930 Plan and Max It Out Retirement do the same thing but for different age groups. It’s a different way to market some tax-smart planning to the public in different demographics. Max It Out is focused on people who are getting close to retirement, maybe ten years out. 930 is more focused on people who are probably in the first ten years of saving. Some people are very astute and that’s when they get their first summer job at fifteen. Some people are 35, buy a house, have a kid and that’s when they start.
The name is pretty clever too. It comes from 401(k) and 529.
Those two plans, the 401(k) plan and the 529 plan are both based on deferred compensation. When you add 401 and 529, it equals 930. The idea is that those plans are antiquated. The IRS allowed us to start deferring money from our paychecks back in 1978. In 1978, the world was a different place. We had little to no debt to speak of. The stock markets were not a place that the average person was investing in. It was more corporate-type stuff and very wealthy people. In addition to that, our taxes were very high.
If you take a married couple in 1978 and they’re making $60,000 a year, which is a good living. That’s probably somebody making $120,000 now. A couple making $60,000 in 1978 had a federal effective tax rate of 53%. The couple making one $120,000 now has about 14%. It’s a different world financially. The idea of deferring your income if the taxes on the last $5,000 a year, were going to be up in the ‘50s or ‘60s, I want to defer that. To put it into a market that’s really depressed and is opening up to individual investors, it was a smart strategy.
The problem was, there are a lot of things from the ‘70s that looked good that in 2021 aren’t the same. That’s the case now. Our taxes are very low. Our federal debt is very high. Inflation is something we should be concerned about. The stock market is at all-time highs. The idea of deferring your money, I question people, “Let’s take a second thought on that.” That’s what 930 is about for the younger people. Be aware. The first thing in the blog post that you pulled up was being aware as a consumer. It’s not just, “My dad had a 401(k) so I want one.”
Why do you think that the 930 is lesser-known? The 401(k) has been around for a long time. It’s a perk a lot of people look for on the job market when they’re considering a new position. “Do you offer a 401(k)? Do you offer a Roth IRA?” Why is the 930 not as popular or at least not as well known?
That is 1,000% my fault. It’s because my team invented it. You can’t go to a bank and buy a 930 Plan. This isn’t a government tax code. 401(k) is a government tax code. 529 is in the government tax code. 930 is just a play on those words for marketing purposes to draw people’s interest in being an educated consumer. It’s trademarked. It’s my company’s intellectual property. We use it as a branding tool to create awareness for people.
This is a tough thing to do in New York and lesser so, you mentioned a few offices in Tampa, San Francisco, Baton Rouge, Boise, where it’s a bit easier to operate. New York makes it tough. Can you expand on that a bit?
The 930 stuff for the younger people, not as much so. We can do about everything we can do elsewhere we can do here in New York. The products are available. The strategies we use are employable. New York doesn’t inhibit what we’re doing for the people getting into the savings market. There are some great products for people on the Max It Out side, the people who are within ten years of retiring. There are some indexing strategies that are wonderful for people who want to access that money in the next 10 to 12 years that New York doesn’t support. There are some major financial institutions out there that have some phenomenal products that fall into the indexing category and New York doesn’t allow indexing.
Can you give an example of a few of those indexes?
There are a lot of indexes out there that we follow. In fact, people measure the market by indexes. The Dow Jones, the Russell 1000 and S&P 500 are indices. There are dozens, if not hundreds of them out there. The idea of having a fixed indexed product is investing in an index or a blend of indexes, where when they are up, you can participate in the upside, 50, 60, and 70% of the growth. In years where they’re down, you don’t lose any money. You’re not risking things when you’re that close to retirement.
You’re younger, you’re 30 years old and you have a lot more threshold for risk. There are some times, in fact, that risk can be your friend because it creates buying opportunities. If what you’re investing in is down and you’re in your accumulation phase then you’re accumulating it at lower prices. The closer you are to retirement, the less it’s about accumulation and the more it’s about decumulation and future distribution. For those clients, I focus a little more heavily, in some cases, in the index world. New York makes that very hard.
We were talking a bit about inflation because there are some good reasons to think, “We’re entering an inflationary environment.” The question is, let’s look at this objectively and say, “How can we hedge against inflation?”
The core things that I focus on whether it’s the younger demographic or the older and remember Max It Out is a brand. 930 is a brand. Both of them lead you back to an office that has a team that overlaps greatly in personnel and works with a couple of key strategies. One is the idea of safety, particularly with markets at all-time highs. I’m not really a big fan of trying to jump into a market.
You speak of inflation. I’m not sure if it was May 2021 or June 2021 but it was the first month we went over 5% in a long time. I think ‘08 was the last time we had a month where the inflation numbers were over 5%. We had numbers down around 1% for a long time. To hedge against that, regardless of whether you’re starting out or you’re getting close to the end, we first focus on safety. Protect your money. Protected money is worth more later if the costs of goods are higher. That’s what inflation is.
The second really good fail-safe is to be tax-efficient, tax-advantaged. If we are facing inflation, the tool that our government has to combat inflation is to raise taxes. In fact, the 2021 administration is the first one in about 30 years to run on a platform where they told any demographic of the population that your taxes are going to go up. The reason why is because of that looming federal debt. It’s almost $29 trillion.
You gave a good graphical analogy about that before. Can you repeat that one for the readers?
Everybody knows how thick a $1 bill is. It’s very thin. If you were to take $1 bills and you wanted to get to $1 trillion, if you stack them on top of each other, it would bring it two-thirds to the moon. That’s just $1 trillion. Our federal debt is at $28 trillion and we carry a debt load of about 5%. Probably the most dangerous thing about inflation is because one of the key factors, particularly when COVID first came out, was that interest rates were so low that having some debt wasn’t a terrible thing.
If we could restimulate the economy with borrowed money at incredibly low-interest rates, that’s not terrible. You know as well as I do that when inflation hits, interest rates go up. Debt costs more money. If you look at the debt load over the last decades, the average number is 5%. That’s a good indicator of what debt costs. If we get to $30 trillion in debt for round number purposes and we’re going to soar past that probably. Five percent of $30 trillion is $1.5 trillion. In 2001, not that long ago, our federal debt was at $3 trillion. Now, our debt load, what it costs to pay the interest on the debt is half of what the debt was a few years ago.
There’s a magic number out there. If you get to $44 trillion and the debt load is at 5% then we’re actually accruing more interest than what our economy generates as far as tax dollars, tariffs and the other ways that our government collects money. Now, you’re living in abstract poverty. The government is essentially bankrupt. From an inflationary standpoint, my goal for most of the clientele that I work with is to invest in a tax advantage platform.You can't go to a bank and buy a 930 plan. This isn't a government tax code. Click To Tweet
Our IRS code has a wonderful loophole. People like to call things in the tax code loopholes when they’re in their favor. Our tax code is 21,000 pages. If something works in our favor and somebody uses it positively, they call it a loophole. I guess that has a negative connotation. I just look at it as, “It’s the rules. It’s the law.” If we’re following them properly and doing it right then we’re allowed to do that. One of the wonderful things about our country is that it doesn’t matter how rich you are or how poor you are. The rules apply to everybody. We’re not in a fiefdom.
There’s a code, 7702A. What it does is allows certain product categories and certain ways of saving to grow. You do it with post-tax dollars so you’re not deferring your money. You pay your ordinary income tax on it, you save money from your paycheck and then with post-tax dollars, you make an investment. That investment is allowed to grow in various ways. I’m not even talking about how to invest it. I’m talking about the product category.
Because you already paid taxes on the principal, that principal won’t be taxed and the growth itself also isn’t taxed. There are no capital gains. You’ve got no ordinary income tax. It’s already paid. The principal is tax-free. The gain is tax-free. Ultimately, when you reach retirement age and you’re looking to collect social security because it’s not ordinary income or capital gains tax, it also doesn’t trigger provisional income tax.
Provisional income tax is when somebody passes over a threshold of income in retirement that causes their social security to be taxed. If you’re doing it smartly and you can pay attention to 7702A with your planning and you can get to your retirement years, not only are the assets that you’ll be using in retirement no longer showing up on the tax grid. In addition, it won’t trigger taxes against your social security. That allows you to maximize your money in an inflationary world.
If we’re going to face a 5% inflation and maybe 6% for the next decade then the dollar is not going to be worth as much in ten years than it is now. I heard an interesting stat. Seventy percent of our currency has been printed in the last few months. Seventy percent of the currency that’s on the street has been printed in the last few months. You talk about inflation so to protect against it, be safe. We’re in high market environments. I would have loved to have gotten into Google and Bitcoin before Google and Bitcoin were anything anybody heard of. To find the next one and count on that as a strategy, I don’t find that to be smart.
I like indexing strategies. I like things that are safe. More importantly, if we take that example of the middle-class couple being taxed in the ‘70s compared to those same wage earner level nowadays. If we believe that a middle-class couple could be paying in the ‘50s percentile for effective tax rates for retirement or when they reach retirement then why wouldn’t we stop deferring the money, pay the taxes when it’s in a lower environment and let it live in this tax-advantaged world.
A great example of a product that’s allowed within the 7702A that a lot of people are aware of is our Roth IRAs. A Roth falls into that tax code. In a Roth, you pay taxes and then you put money in. That money is allowed to grow. The principal and the growth are not subject to ordinary or capital gains tax. When you get to retirement, if you’re using Roth money in retirement, as opposed to a traditional IRA, it’s not going to count against that threshold for social security, taxation or provisional income tax.
We love the Roth for the same reason. It’s a fascinating time to be talking about these topics because a lot of different industries are experiencing a bit of a labor crunch. Employers are asking themselves, “If I can’t necessarily offer a significantly increased salary, what can I offer a potential candidate to entice them?” There are some intangible things. You’ve got to have a good work environment and if you can, you can offer them a hybrid workforce so they can work remotely if they need to.
Something like a Roth is another attractive thing that an employer can bring to the table to make the package a more attractive deal. People are really crunching for good candidates especially in the white-collar world where if it’s remote, you might be competing with someone in a completely different state where commuting is not doable. This candidate, if they’ve got a good raise, they’ve got good experience. They’re a strong candidate. A lot of people are going to want to attract this person. It’s that much tougher to get someone to sign on.
When we talk about deferred compensation and I talk about it potentially not being a good avenue, I want to make one thing very clear. If you have an employer that’s matching your IRA, 401(k), 403(b), 529, 457 or whatever the numerical soup or the codes are, if somebody’s matching it, that’s free money. Whether you’re differing in a low tax environment to something that’s eventually higher, you take the free money.
You have the ability, literally the following tax year to do, what’s called a backdoor Roth and you can convert that to Roth. You got to pay the taxes on it next year but there are other ways to do it but free money is free money. Roths have their limitations. I believe it’s like $5,500. It’ll catch up if you’re older than 55 of $6,000 a year.
In addition to that, if a married couple, the number’s right around $200,000. I guess, $197,000. If you make more than that, you’re not allowed to contribute to a Roth. If you find you’re being limited by Roth contributions, either on an annual basis or you’re ineligible because you’re a high earner, there are such things as backdoor Roths where you can defer the money and then very quickly start to do Roth conversions. There are no guideline limitations to Roth conversions. That’s your own threshold for when you pay the taxes.
I do a lot of focusing on getting people closer to retirement, like the Max It Out group, to do a lot of, “Let’s get this money converted to Roth before you retire.” Let’s try and do it may be in that 22% or 24% bracket without reaching 32% because that’s a big jump. You got 10%, 12%, 22%, 24% and then 32%. At 24%, I believe you can earn up to around $320,000 as a married couple.
Most middle-class people, even as a married couple, they’re making $250,000. They can convert $100,000 worth of IRA that year into a backdoor Roth and still keep it at 24%. If you’ve got another five years for that to grow and it’s doing it under the 7702A code and tax-free, all the growth is free. Years from now, you start taking income from that. Now, you’re hedging against inflation.
Just as a little break from the more detailed content and to give it more of a personal touch, we have a few things in common. First, you’re working with Impact PR, Filomena Fanelli and the team. They are friends of ours. That’s basically how we connected here but you’re also a client of our firm. We had both of those things in common. When Impact approached us, we said, “We’d love to have the interview.” We mainly want it to keep it financial but I really also wanted to touch on soccer. You told me some interesting news about what was formerly FC Malaga, which was your brainchild.
Not necessarily my brainchild, just what I got involved in after it started.
You brought it to Salt Point in New York, though.A risk could be your friend because it creates buying opportunities. Click To Tweet
Correct. It’s the brainchild of Colin McComb, a local guy in the Beekman area. He, John Forbes and a few other guys started a European-style soccer academy for boys where it can be residential. Local kids commute and they have competitive teams that don’t play in scholastic leagues but instead play in very highly competitive, amateur leagues throughout the country.
They do their schooling at the academy. They have a soccer environment that their educational platform is conducive to not disrupting their training. One of the biggest keys is in the nine-month school year, they break it up and trimesters. In the first and third trimesters are right on their property at the Boy Scouts camp up in Salt Point. In the middle trimester, they do it in Spain. Previously, they spent three months in Malaga, Spain and they operated with a club affiliation over there called FC Malaga.
The school itself was called Pathfinder Academy. They found more avenues in Spain that were interested in our players and us bringing more players. We expanded beyond Malaga as an outlet for our players in Europe. They’ve rebranded here in America to Pathfinder Academy, back to the original name of the school. That is what soccer is also being branded under. The boys will spend a few months in a beach town, a little south of Barcelona.
I want to say it’s filling a void here. It’s not something I had heard of around here. I could be mistaken. Is there anything else like that around here?
There are a lot of soccer clubs that call themselves academies and there’s no education involved whatsoever. There are a couple of academies around the country. You have IMG Academy down in Bradenton, Florida, which is multi-sport. It’s been around forever. Tiger Woods went there. Serena and her sister Venus Williams went there. They do have soccer programs.
There are comparables but to be soccer-focused and to have it in the Hudson Valley, is amazing. The boys get to play in top-notch competitions. They train like professional athletes. They start their day with training. It’s supported by nutritional training and by strength and conditioning training. That all follows them to Spain when they go over there and play.
What it does is it creates pathways here in America to play collegiately. There’s also a lot of exposure over in Europe because they have a different outlook on things. There are no high school sports in Europe. If you’re 14, 15 and you want to pursue athletics seriously, the way they operate and soccer is their big sport, football. The way they do it is the way that Pathfinder is doing it.
The model is to focus on the sport and then customize the education around these higher-level athletes. When they get to the ranks where you’re ready to reach potentially playing professionally, here in America, the MLS has, I think, 32 teams. There are minor leagues. There’s USL Championship, there’s USL League One and Pathfinder has USL League Two.
We have a professional minor league team that operates out of the academy through the same group of people. That’s actually where I come in. I’m a partner in Malaga in the USL League Two. There’s no real financial way. The guys that are playing on the USL League Two, they’re compensated with room and board. They’re playing a competitive sport, sometimes beyond college and it’s fun but they’re not earning a living from it.
Whereas over in Europe, you’ve got 20, 30 countries that have professional leagues that also have these minor leagues. The minor leagues pay a lot like a job would here, where somebody is an intern in something or somebody is an apprentice. That’s a great word. Think about it like a plumber’s apprentice. It might take you eight years to move out of your apprenticeship in a lot of careers here in America. When you get to be at the top of your craft, that’s when the real money gets made. A lot of people are apprentices for life and make a good living doing that.
Soccer is built that way over in Europe. Not everybody’s going to make it to the English Premier League. There are guys that play until they’re 35, 40 years old. They might’ve played in the Second or Third Division, earned a good wage, paid their bills and hopefully had a backup because you’re probably not done earning at those lower wages at 35. You probably can’t play much beyond that.
It gives our American athletes who are participating in this program the ability to not just either, “I made a college team or I’m done with my sport.” No, “I can go over there and spend three months a year in my high school years getting exposed. I can get trials. I can have the potential of another avenue to continue to pursue that passion.”
Ronaldo, Messi, everybody knows the big names that are making €30, €40, €50 million a year. No, you might make €35,000 a year. If you’re passionate about something and you love it and that’s what you want to do when you’re 25. There are a lot of people out there doing jobs that they don’t like for as much or less money. We don’t have that same system in America. Now in New York, we’re creating that system.
That’s really interesting. It’s a totally different format. That’s right in Salt Point.
The academy itself started its second year full-time. The club has been operating since 2014, developing youth players. One of the key components is obviously having a boarding school that spends time abroad with room and board, coaching, training, teaching and everything that goes along with it. There’s a cost associated with the academy. Compare it to IMG or even a private school locally. It’s a fraction of those costs.
I think the biggest key to the program is around the academy. First, there’s a non-pay for the play club program. You’ve got youth boys programs where the academics aren’t there. These are just kids developing. These are not 8, 9, 10, 11-year-olds that aren’t yet in middle school, high school or attending the academy. The Pathfinder Club is non-pay for play. They’re playing in the best leagues with the best coaches and the best facilities. They’re playing against teams that parents might be paying $3,000 to $4,000 a year for that kid to play. Our youth program is at no cost.
Plus, you also have to add in the social component. They’re young kids and they might be exploring soccer. Some of them may be passionate about it. Some of them may not be, ultimately. At least they’re learning what you get from being on any team. You’re learning about teamwork. You’re learning about camaraderie. You’re experiencing that. You’re hopefully building good relationships with people. You’re learning that there are rules you have to follow in that game. You have to win within the rules. Hopefully, you’re learning all those good things that will be useful outside of soccer.
My introduction to the program is my son Max. He’s a sophomore and he attends the academy. He went full-time as a freshman and went off to Spain for three months. The idea that they were able to do that in the pandemic was amazing. I’m not a parent that thinks that, “My kid’s going to be a professional.” I know there are a lot of those out there. I see this as a wonderful life experience for him to learn discipline, teamwork, communication skills and independence.
There are twenty-year-olds out there that can’t live without mommy and daddy. My fourteen-year-old went and lived in Spain for three months in a structured environment but had to deal with currency exchanges and doing his own laundry. I’m going to tell you the truth. He came home and the maturity level was through the roof. That’s the experience that we’re looking for. You’re 24 and you get to that job interview. The person who’s interviewing you asks about your background.
Pathfinder Academy has college options too. If you want to continue to play in Europe and explore and you get picked up by one of those minor league teams, you can take American university classes through Pathfinder and play over there. Potentially, Max could spend all eight years of secondary and post-secondary school, finishing this curriculum, getting an education, playing soccer here and abroad.
You get to that interview where, “I’m not a professional soccer player but I’m being asked questions.” You explain what you did for the past few years. Everything else just becomes the background. People are interested. You’ve got bilingual skills. You’ve dealt with different cultures. You’re dealing with currencies.
That’s fourteen. You’re a kid. That’s working your kid. Speaking of Max, it’s really a play on words. Max It Out Retirement. You’ll max it out and make the most of it but it’s also for your son.
Max is adopted. We adopted him from Russia when he was two. I have a 32-year-old, a 30-year-old and a 15-year-old. We adopted Max when he was two. I also have five grandkids now. When Max was about eight, they discovered a cyst on the mitral valve in his heart. It was a third of the size of the chamber of the heart that it was in. It was causing a very irregular heartbeat. It was a problem and they didn’t know what to do. The doctors we were going to, the questions we were asking. We were googling and we were getting the same answers from the doctors that we were getting from Google.
It turned out that there had only been four known cases of this cyst prior to Max. For all four of them, the only way they thought survival was realistic was surgery to remove the cyst. The youngest of the four was 27. Max was the fifth. He was eight at the time. Two of the four didn’t live through the surgery. Max had the surgery. They told us to be prepared to be in the hospital for up to 30 to 45 days of recovery. He was out in four days. He had the surgery on October 10, 2014. On Thanksgiving weekend, he played in a soccer tournament.Protected money is worth more later if the cost of goods is higher. Click To Tweet
What prompted you to even investigate? Was it the irregular heartbeat? It seems like it could be undetectable.
When he was really young and he came over from Russia, we started integrating him into some of the early education programs. He had to learn English and he had what was called a hypersensitivity disorder. Things like dogs barking, the doorbell ringing and the garage door would set him off. He never knew those things before. He lived in a very serene environment in the first two years of his life in an orphanage in Vologda, Russia.
As we were getting him help, a local neurologist put him on a blood pressure medication called clonidine. It was to slow down his heart rate so that when he got hyper over something, triggered, his heart wouldn’t race and it would give his brain a chance to catch up and learn. The doctor explained to us when he was about three when they put them on it. The doctor explained that when he gets to be about 6 or 7, we’re going to wean him off of this because he’ll have gotten over a lot of this stuff.
When we started to wean him off of it, his blood pressure and irregular heartbeat started to go crazy. It triggered an ultrasound. I wanted to know what’s going on. They found this cyst. If you take the bottom of a 16-ounce Coca-Cola bottle, that’s about the size of an eight-year-old’s heart. If you drop a quarter in the bottom and look at it, that was the size of the cyst in his heart. They were like, “First of all, we don’t know where it comes from. We don’t know if it’s growing and there’s no way he’s going to live safely without it. He’d never play soccer. We’d have put him in a bubble.
They discovered it and as it turns out and we’ve had this conversation after the fact they put them on that blood pressure medication to keep his blood pressure under control for ages three to seven, which probably saved his life. We had no idea that cyst was probably there for the majority of that time. It probably was the medication controlling the heartbeat that saved him. When we took them off and the heartbeat started to get a little nuts, that prompted us to have the surgery.
The Max It Out community really stepped up. At the time, I worked for a company and you know how health insurance can be. The very first pass through my company’s health insurance of getting this surgery approved was denied. That’s health insurance companies’ MO. If it’s something that’s not common, you’re first denied and then you appeal. Not getting the surgery was never an option but it was tens of thousands of dollars. At the first stretch or the first attempt, the insurance company was denying it.
As a dad and a single-family earner, my wife is home taking care of the kids, I did okay financially but this looked like a huge burden. The community jumped in. The Beekman Fire Department did a boot drive, the Marist Men’s Soccer team donated a whole home season to him. He was an honorary player on the team and they did 50-50s during home games. I coached a college soccer team. I was a member of the staff at Dutchess years ago. Two brothers who went to Spackenkill dedicated an alumni game to him and raised some money.
The community stepped up. They sold wristbands and t-shirts that said “Max It Out” on them because they wanted to max out that cyst out of Max’s heart. We ended up raising about $26,000. The good news was through appeals before the surgery happened, the insurance company ended up covering it. We had a deductible. What Kim, my wife and I did was we paid the deductible with some of the proceeds that were donated to Max, to this cause. In Max’s name, under the brand Max It Out, we donated the balance of the money to the Boston Children’s Hospital where he had his surgery. A couple of years later, when I went on my own and started my own financial planning firm, it was a natural fit to call it Max It Out.
Where can readers go to find out more about either 930 Plan or Max It Out?
Both of them are their own websites. It will lead you both back to the same parent company, which is Max It Out. The930Plan.com or just 930Plan.com. MaxItOutRetirement.com or MIORetirement.com. Either one of those will get you to each homepage of individual websites. A big key to the way I work with anybody is education. You’ll see if you go to either website, one of the first things we’re going to do is offered to buy you a book.
There’s a great book out there called The Power of Zero. It was written by David McKnight. It was originally written in 2014. There’s a version that was updated for the Tax Cuts and Jobs Act in 2017. It’s amazing because he talks about inflation, the rising debt and the inevitability of taxes going up. He discusses the debt load and how that can play out when it comes time to pay back all this money that we’ve been run on up as debt. It talks about living tax-advantaged and the latest version is from 2017. The federal debt at that point was like $18 trillion, not $28 trillion.
He’s foreshadowing what he thought we were going to be facing in the 2030s and the 2040s. Quite honestly, in 2021, we’re already $10 trillion higher, more than 50% higher than we were when he wrote the book. That’s usually a great start. It costs my firm about $15 to buy that book and send it to someone on Amazon. It’s the greatest investment in the world. If someone doesn’t read the book and we buy it for them then they’re not a candidate.
They’re not somebody who I’m going to spend any time with. My team’s not going to waste their time. If you’re not going to invest time in understanding your own education, creating that awareness of what’s going on in the world and how these different pieces of our economic society, taxes, inflation, the federal debt and market conditions. If you’re not going to be aware of those things and think for yourself then we don’t want to think for you. I want to work with like-minded people. I want to work with people that want to invest in themselves.
We’re a smaller firm. We don’t have the ability to take on millions or hundreds. We like to take on dozens of clients. When we do, we want to do the best job for them. You go to either one of those websites with a simple questionnaire of how we get the book to you. We don’t bug people. We get you the book and the most you’re going to get is a link to our calendar saying, “Do you want to follow-up with us?” I found that to be a great strategy because, in the financial world, a lot of times doing the planning itself isn’t the hard part. It’s client acquisition that can be time-consuming and difficult.
People worry. You put your email address into a database and it’s like, “Once in a while, even really good databases get breached.” Barnes & Noble had one a while back. All their email addresses were released and many were exposed. People think about that. It’s like, “Your email address is something in a lot of ways you protect. A lot of people even have a junk email address as bail. “This is the one I’ll give out but I’m not going to connect it to any sensitive purchases or any sensitive information.” The right to be wary of putting it in there.
We respect our client’s privacies, particularly the candidate, not the client. I have a podcast that’s on iHeartRadio’s app. If they listened to that podcast, I do a feature here in the Hudson Valley on Q92’s morning show with Annie OnAir. There are a lot of different ways where I’m out in the community talking to people. If somebody comes to us, I want to educate them. I want to buy them a free book. That’s a good gift.
I’ve had clients say, “My grandkids didn’t give me a $15 gift for my birthday and you did.” It’s a great approach to have a marketing tool where, “Here, I’m going to educate you. It’s on my dime. That’s on our company’s dime. We’re going to educate you on something that we feel is very important.” The ball is in your court whether you want to come back. We’re not going to bug you. I’m not going to chase you down. If I had to chase you down, you were probably not that client that was going to be worth our time anyway.
It’s tough. With the client relationship, it’s intangible to say, “What is a good fit?” You look in our world to accounting, there are plenty of providers in the Hudson Valley who offer the service. When I’m referring out for whether it’s a banker or a financial advisor or attorney, my common play is to give three names and say, “Look, here are three people I know. Meet with all three or at least do a quick phone call. It’s so easy. You can hop on Zoom. You can do a phone call, whatever you want to do. Give them each five minutes and you’ll probably get an idea of who feels like the right choice.”If you're passionate about something and you love it, do it. Don’t stress yourself by working for a job you don’t like. Click To Tweet
Especially when you get three people who are offering a very similar service, there are some intangibles that come into play or it’s like, “Who are you comfortable working with? Who’s built some good rapport for you?” Maybe all three were very good but hopefully, one person stands out and you say, “This feels like the right choice for me.”
The average consumer doesn’t understand that if you’re working with a successful business and whether it’s in your field, the accounting world, my field, some tax-free retirement planning, what a lot of individual consumers don’t understand is on those initial calls, they think they’re interviewing the professional. What they don’t necessarily understand is the professional is also interviewing them.
As a professional, you only have so many hours in a day and you only want to work with people who are like-minded. They’re going to be working on the same path you are and not working against the current. That’s how I met you guys. I have a corporate law firm that helps me with establishing entities and doing some of the things that I do in other states, partnership agreements and things like that.
A few years ago, I asked that law firm to introduce me to a good accounting firm. I had been using a tax preparer who was doing my individual taxes. For the first few years, I had a business, it seemed sufficient. I outgrew my tax preparer. What I loved about the guy who did my taxes was he told me I outgrew him. You got to go find a firm that handles multiple corporations and the different things that you do. The law firm that referred you gave me a couple of options. I did the same thing you said and we meshed. I liked your firm and you guys do a great job for the various entities that I have. That’s important.
I appreciate that. You’re right. It’s not even sour grapes sometimes. It’s just like, “This isn’t the right fit. We recommend you move on to someone who offers a different skill set.” I’ll give you one interesting example. We’re part of the BDL Alliance. Sometimes we will refer out work that isn’t exactly the right fit for us or maybe it’s something that geographically doesn’t make sense for us but we have a member that can do the work.
We have an affiliate and they’re called Aviation CPAs. It’s such a nuanced topic. That’s their whole bread and butter. They only do CPA work for aviation. That’s the one industry that they work in. They stay in their lane. That’s their specialty. You might think, “Why specialize? Why’d you choose that one topic?” It’s nuanced enough where they have professionals who just do that one thing. If we get a client like that, we’re happy to refer them to Aviation CPAs where we know if it’s not the right choice for us, we’ll happily refer it out. Everyone wins that way.
I operate my businesses the same way. When I launched 930, Impact PR, did a wonderful job of getting the word out. The Westchester Fairfield County Business Journal reached out to me for an interview. While I was conducting the interview, there was a reporter that was going to write a story. He said before we even got started, “From the questions I’ve asked and the things I’ve learned, you sound very much like a one-trick pony.”
He made that sound like a bad thing. I’m like, “You mean the opposite of Jack of All Trades, Master of One.” He’s like, “I guess you could look at it either way.” He goes, “I’m not sure if I feel comfortable writing to my audience if the person I’m writing about only has one solution.” I’m like, “It’s not one solution.” What I do is tax-efficient planning. If that’s the one trick then yes, I’m good at that trick. That’s what our firm does. We help people be as tax efficient as possible.
If you want to call that one trick then I’ll live with that but understand we’re marketing to a very specific set of demographics who we believe benefit greatly from this. When they come to us, the first thing we do is offer out free education, things that cost us money, to get them educated. A lot of times, it’s in the form of a book. We asked them to come back to us if they fit. If they think that our services are right for them.
Sometimes when we’re doing that initial discovery, even after we’ve met them, if they don’t fit, I have my own Aviation CPAs. I have my own, “You’re not a fit for me. I can’t help. This isn’t something that’s in my purview. You’re going to fit more with and I’ll introduce you to somebody.” What I liked was how that satisfied that particular reporter’s question. He was like, “Now, I’m really comfortable interviewing you and telling my readership that you’re somebody that should be looked into. At first, you sounded like you were only doing one thing.”
I’m like, “We do.” I don’t want to do 100 things because I probably wouldn’t be good at 99 of them. We focused on safe tax-efficient planning. We have branched out in the demographics of who we do it for. It’s not that there aren’t other people out there doing it but in the financial services world, the people on my side of it are fewer and further between and we do provide something that’s more on the unique side.
Even if that question threw you off guard in a way, that honesty and what he’s thinking gave you an opportunity to address what may have been an audience member’s question. If he had just written the story, not said anything and just written it exactly as he interpreted the interview, you might’ve had dozens of readers reading that story and coming to that same conclusion. It’s great that he asked you the question because it’s like his way of saying, “I’m predicting what a reader might think and I’ll give you a chance to address it.” It’s kind of cool that he did that.
I’ve been working since I was fifteen years old. When I got out of school, I spent the first fifteen years of my life in marketing and advertising. It makes me good in the financial services industry because the hardest part of the industry is marketing yourself. I’ve been in this industry for many years. When I was a young man in the marketing world, I thought that I had to be somebody that somebody else wanted me to be in order to work with them. You tend to put on this persona or you tend to try and be what other people want you to be. When I truly found a successful practice and being able to help people that need and want your help was when I learned that, “Be transparent. Be you.”
If you can make a one-on-one connection with somebody and you’re being you then they’re going to respect that and then you can apply your craft. If you’re good at your craft then you’re good at your craft. I don’t take on hundreds of clients, only dozens a year. I create great relationships. There isn’t a client I work with that I would be afraid to tell a new potential client, “Here’s so-and-so’s phone number. Use them as a reference.” I’d ask the existing client first but anytime I’ve ever done it, the existing client is like, “I’d love to give you a reference.” That comes from that lesson I learned. I didn’t start off thinking transparency was the right approach.
It’s kind of like, “I’ve got this key and it opens a lot of different locks. It doesn’t open every lock but I’m going to stick with the key I’ve got and whatever locks come along that I can unlock, those are the ones that are good for me.”
It’s weird. I have five grandkids now, they’re all under six but they’re the most honest. They say whatever’s on their mind whether it’s appropriate or not. Somewhere in our teen years, we learn how to put up these boundaries and these barriers and we stop telling the truth all the time. We started hiding things. In my world, the business, there’s no reason to hide anything. Be truthful with people. If it wasn’t going to be a good fit, I’d rather learn that early in the relationship than later on.
It’s like Liar. Max was the little boy’s name in that movie. He blew out the candles and said, “I wish my father couldn’t lie.” That’s how it went. Thanks for coming on. It was a great conversation. We could probably keep going on several different topics but I really appreciate everything we’ve covered so far. I hope the audience has gotten a lot of different things out of this interview. Thank you for your time. I appreciate it.
Thank you for having me.
- 930 Plan
- Max It Out Retirement
- 7 Simple Things To Help You Become More Financially Aware
- The Power of Zero
About Chuck Omphalius
I’m a big picture thinker who is driven by helping people who work hard for their money keep more of it. My specialties include identifying smart ways to limit taxation and maximize retirement savings (fancy way to say this = tax-advantaged planning), without the risks most people believe are par for the course (spoiler alert: they’re not!).
Combining my entrepreneurial and senior management experience with a studied approach to keeping dollars where they belong – in the pockets of my clients – I value relationships and believe that building wealth for the future means we can spend more time with the people we care about and doing the things we love with them.
Tax Smart Retirement Strategies
Reaching “The Power of Zero” taxation
Social Security Planning
Special Needs Planning
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