Greg Phelps is a certified financial planner, investment advisor, and fiduciary. In 2005 he hated how Wall Street treated investors so much he formed his own registered investment advisor firm. Over the last 22 years he’s helped thousands of people define and achieve their financial goals and dreams.
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3 Value Bombs
1) If you believe in something, do everything you can to make it possible.
2) Always invest in yourself—it’s worth it.
3) You cannot rely on the government for your security; take your finances and future into your own hands.
(click the time stamp to jump directly to that point in the episode.)
[01:13] – Greg is married and has twin boys
[01:40] – As a CFP, Greg’s area of expertise is in retirement transition mode
[02:10] – One BIG and Unique Value Bomb: Most people today don’t understand HSA (health savings account) – it’s an overlooked retirement planning vehicle. You can build a million-dollar, triple tax-free retirement with HSA
[03:35] – When you spend money on prescription drugs, keep your receipts, save them for 30 years and reimburse it
[05:40] – Greg started off his career with brokerage firms
[06:10] – What he hated with Wall Street was that they were dollar-focused and not client-focused
[06:50] – There is a big difference in fiduciaries
- A fiduciary looks at every option available for the client
[08:45] – Worst Entrepreneurial Moment: 3 years ago, Greg decided to expand and reach a younger market. He made the mistake of delving into FinAcuity by changing his business name from Redrock Wealth. His new clients loved him, but his current clients never embraced it
[10:17] – One long-time client said, “If it’s not broke, don’t fix it”
[11:47] – Make a move at some point, but think very carefully before making that move
[12:28] – Entrepreneurial AH-HA Moment: Back in 2004, when Greg was working for a major multi-national accounting firm, there were fee-based advisors. In 2004, Greg’s ah-ha moment was realizing he could leave his job and start his own fee-only fiduciary firm
[14:55] – Do your own soul searching
[15:06] – If you can make it happen, do everything you can to make it so
[16:34] – “Invest in yourself”
[19:32] – The Lightning Round
- What was holding you back from becoming an entrepreneur? – “Leaving the 6-figure job and all the benefits… fear of the unknown”
- What’s the best piece of advice you’ve ever received? – “You cannot rely on the government for anything more than a trip to the movies and a box of popcorn”
- What’s a personal habit that contributes to your success? – “I am an insatiable learner”
- Share an internet resource, like Evernote, with Fire Nation – Mindjet
- If you could recommend one book to our listeners, what would it be and why? – Unshakeable – “that book will teach the average investor what they need to know”
[21:58] – Control your money or it will control you
JP: I am pumped and –
JP: I am ready, let’s light it on fire.
JLD: Greg is a certified financial planner, investment advisor, and fiduciary. In 2005, he hated how Wall Street treated investors so much; he formed his own registered investment firm. And over the last 22 years, he’s helped thousands of people to find and achieve their financial goals and dreams. Greg take a minute, fill in some gaps from that intro, and give us a little glimpse of your personal life.
Greg: JLD, well first I’ve got to say just thank you so much for having me on the show. Probably the biggest honor of my career, so far. So, thank you. I would like to explain just a little bit of my personal life. I am married to the most wonderful in the world who has the hardest job in the world because she takes care of me and our twin 14-year-old boys. And we’ve got two labradoodles running around and we live in Las Vegas.
JLD: All of those things sound like the American dream. And one thing that I kind of want to move into Greg, before maybe your dogs start yipping the background, which by the way, I love. What’s your area of expertise today? I mean we kind of touched upon in the intro, but where do you excel?
Greg: As a certified financial planner, our practice is relatively broad. I mean from taxes, to investments, to insurance. It’s very, very broad. I would say that our specific focus, or my specific focus, is those that are kind of toward that retirement transition mode. That’s probably where we focus the most, where we can add the most value. And part of that, I think, is being a great educator which I have a huge passion for.
JLD: So, what is something that we don’t know in that area of expertise that as entrepreneurs we really need to know?
Greg: Yes, okay. So, probably one of the biggest, biggest value bombs that I can drop today is most people, I think, today they kind of understand what a health savings account is. Have you heard of those JLD?
Greg: Okay, so an HSA. We also like to call it a medical IRA. People say, “What? What’s a medical IRA?” Well, the HAS basically is another overlooked retirement planning vehicle and most people just don’t – they’re not aware that it can actually be better than your 401k. Now here’s what I mean. So, you can actually build a million-dollar triple tax free retirement within an HSA. And here’s how that works. So, with an HSA you can actually put in about $6,750 this year and that goes up with inflation. So – and that’s your family – you’re a family so you can contribute that much.
So, if you make that contribution and let’s just say you’re 35, and you do that for 30 years, and it grows at market rates. Let’s just use eight percent for the sake of argument. That turns out to be a million dollars. But it gets a little bit better JLD, because not only is it a million dollar, but you got a tax break when you put the money in the HSA. So, now you’re reducing that off your taxes. So, that’s $6,000 is going to save you a big chunk of money depending on your bracket. It’s going to grow tax deferred and most HSA’s now, they allow you to invest those funds into things like S&P 500 indexes and so on.
And then when you pull the money out, if you use it for your medical expenses, it’s also tax free when you pull the money out. So, here’s the biggest trick of that whole process. When you actually – every day that you go and you spend money on prescription drugs, or medical, or dental, or anything for your family. You take those receipts, you scan, you keep them in your computer, you back them up every time that you possible can, and you save those for 30 years.
So, you don’t actually get reimbursed right now because what you want to do is get that tax free withdrawal of retirement. Then it becomes a triple tax free account. And the worst case scenario, let’s just say that you got a million dollars in there, and you’ve only got $300,000 of medical expenses that you can submit for reimbursement. Well, it’s not too bad because you’ve still got $700,000 that you can take out just like any other IRA. That’s why we call it a medical IRA. And your tax bracket in the future in retirement’s typically going to be a lot less than it is now.
JLD: Mind blown pretty early on in this interview. And one thing I will say, because I do have an honest question about this, being in financial services I was able to follow that pretty closely. So, if I was to have, let’s just $8,000. This will be a good example. And for just round purposes, let’s say you can match your Roth out at $6K and you can max your Roth IRA at 680. You can match this HSA at $6,000. What would you recommend? Should I max out my Roth IRA and then put the other $2,000 in the HSA or the flipside? Max out my HSA, then put the remaining $2,000 into the Roth?
Greg: I’m going to add one more caveat to that. If you have a 401k with a match. You want to get that match first.
JLD: Okay, so match first.
Greg: Match first. But then I would tell you, “Listen, the HSA is better than a Roth IRA.” So, I would do the HSA first because you get the tax deduction.
JLD: Yeah, you get tax on a Roth at first.
Greg: Exactly. So, yeah. Definitely do the HSA first, and then anything left over. That extra $2,000. Fund that into your Roth IRA.
JLD: Fascinating. Okay. Greg, before we move into the meat of this interview which is of course is going to your journey as an entrepreneur. What was the one thing that you hated most about how Wall Street treated investors? Now don’t be vague and airy. Let’s get grained, let’s get specific. What did you just hate? What turned your stomach?
Greg: That’s a great question. So, I’m not going to use names. But I will tell you that I started off my career in the mid 90’s with brokerage firms. And I remember vividly, whenever they would come out with a new mutual fund or a new product of some sort, the manager would be walking the halls. And he’d be saying, “Hey, did you sell any of this? Did you sell any of this?” They never asked me, “Hey. Did you do what was right for John and Jane Doe? Did you help them solve their problems and plan their retirement?”
They said, “Did you sell them the Japan fund today?” Or whatever the product, we joked around. We called it the product of the month. And that I just despised because they weren’t client focused, they were dollar focused for the shareholders.
JLD: You know I will say some knows, but I won’t get too specific, and I won’t’ ask you to do that Greg. But one thing that I hated when I was working at John Hancock was just everybody seemed to be in love with American Funds. With these massive front load, five, six percent and it just didn’t make any sense. The returns were not justified; it was all because – it was because whoever sold that fund was getting the most dollars and the most cents for it. When you could buy just a Fidelity or Vanguard index fund and you’re going to be getting incredible returns for an incredibly low investment rate.
So, for me Fire Nation, you just need to understand that there’s a big difference between fiduciary and between the others that are out there. And Greg, why don’t you just take a quick minute because you’re better schooled at this than I am at this point. I’ve been out of the game for well over 10 years. But kind of break that down because you are a fiduciary. How is that different than others that are in there that don’t have that tag?
Greg: Correct. And you bring up a really good point JLD. So, if I’m looking at what’s right for a client, and I see American funds at five percent front load, and I see Vanguard that’s essentially the same type of fund that’s going to give you a similar type of market exposure at zero commission, or zero front load, and this ultra low ongoing fee. Well, what’s best for the client? And is it the loaded fund with all the commissions and expenses or is it the no load, institutional fund. And so, that’s what a fiduciary does. A fiduciary would look at every option available out there and decide what’s best for the client with the client.
Versus being told what to sell the client or being, maybe not told, but forced in some ways – I guess, based off of bonuses, and commissions, and so forth. So, a fiduciary is definitely acting in the best interest. It’s in the highest level of trust. And when one of the industry leaders, thought leaders. I call them Michael Kipsis. He says like this – basically, if you go to Sears, and you get a suit or something like that, they’re going to give you one off the rack and it’s going to fit. But if you go to Nordstrom’s and get a suit. They’re going to tailor it for you, they’re going to make sure you look good in it, and it’s going to fit. That’s the fiduciary approach. It’s going to look good on you and for your retirement.
JLD: Greg, random question. Do you have a podcast?
Greg: I do not.
JLD: Well, I mean with your energy, audio quality, brother, and knowledge. I think there might be a little niche there for you to dive into. Just planting the seed, planting the seed.
JLD: Now, let’s move into your journey as an entrepreneur because I think this will be pretty fascinating for Fire Nation to maybe hear the tale of what you consider your worst entrepreneurial moment to date. Tell us that story.
Greg: Oh, JLD, at the risk of making myself seem a little foolish, I’m going to go ahead and share with you. I’ve been doing this for about 20 something years. And a few years back, I think it was about three years ago. I decided I really wanted to kind of expand my horizons and get a bigger reach into a younger market because most of our clients are a little bit closer to retirement. And so, I thought, “Well, the name of my wealth management firm is Red Rock Wealth Management. It’s kind a big, stodgy, corporatey type of name. And I wanted something fun and exciting.
So, I loved this word for years that I created on my own. Finaquity. F-I-N acuity. So, to me it just means financially sharp or being wise with money. So, I actually made the gigantic mistake of delving into the realm and changing the name of my company. And what I found was, I have some younger professional clients and they loved. They loved the concept and they thought it was just great, it was catchy. And my older clients that have been with me for years, absolutely hated it to the point where I had clients calling me saying, “I will not change the name of your company in my phone.”
JLD: Well –
Greg: I took a step back and I said, “Well, what am I really trying to accomplish here?” And granted, I never went all in on that name Finacuity. And I had done some basic due diligence, and research, and I had asked friends, “What do you think it means?” It all turned out well, but at the end of the day, JLD what I found was people couldn’t say it, they couldn’t spell it. Even if I was to tell you right to your face, Finacuity, they couldn’t repeat it back. So, it was just a huge faux pas and I think probably one of my long time clients said it best. He said, “If it’s not broke, don’t fix it.”
JLD: If it’s not broke, Fire Nation, don’t fix it. And one thing that I know a lot of entrepreneurs struggle is naming their company. And I think was a Jason Freed 37 Signals comment, now Basecamp. Where he said, “When you’re coming up with something it needs to be clear and hopefully clever. But you have to choose between the two, always go with clear. You want it to just be clear. And if people can’t remember it, they can’t spell it, they can’t talk to their friends about, then you’re going to be missing a huge opportunity there.” And there’s actually a great tool, Greg, that I would have recommended to you at the time that might have given you a couple of other ideas that would have worked.
And you can even pull our audience and stuff. It’s call the 99 Designs of Visual, but for naming your actual company it’s called Squad Help. Thousands of people potentially could be helping you build your company to come up with that name for that company which is a huge step in that right direction. So, just a little side note Fire Nation if you’re thinking about going down that direction. Now for you, Greg, what’s the one thing you want to make sure our listeners get from that story?
Greg: Well, I’ll tell you. I think you just hit the nail on the head. If I would have done a little bit more due diligence before kind of taking that leap, I could haves spent, like you said, $300 or $400 and had everything – all the data, all the roving data at my fingertips. And the fact is, no. I actually kind of leapt a little bit too – I got a little bit wrapped up in the whole process and I leapt too quick. And so, for Fire Nation out there, you’ve got to make a move at some point otherwise your dreams won’t come true. But you also have to think very, very carefully and methodically about big decisions like that.
JLD: Yeah. And hey, sometimes you are going to come up with the right name yourself. Like when I was sitting there, five years ago, folding my socks and listening to Sports Center. And Stuart Scott said, “He’s on fire.” And then, all of a sudden entrepreneur on fire just popped into my mind, you might have that moment. But there’s great opportunities out there. Do the due diligence, rely on your friends, do the polls. Make sure that you have that outside of the box thinking. Now Greg, let’s move into another story. This one being one of your greatest ideas to date. One of those, “Ah ha,” moments. Tell us that story.
Greg: JLD, we’ve kind of touched on it briefly. But the whole fiduciary concept. So, it really hasn’t taken effect or really hasn’t taken hold until the last several years with the Department of Labor Fiduciary rule which kind of makes the news and some people may have heard of. But back in ’04, ’03 when I was working at a major multinational accounting firm. And they were what we would call a fee based advisor.
So, they were – the advisors would sell commission products and they would also do services for fees or charge an asset based fee. And the fiduciary concept was just starting to really take hold in the industry. And it really kind of nailed to – on a granular level, as you like to say JLD, it was about being a fee only advisor, meaning we accept no compensation from anybody, but our clients. So back in ’04, my, “Ah ha,” moment was I’m looking at this local market place here in Las Vegas.
And I’m saying to myself, “Wait a second. Everybody is fee based, or commissioned based, or whatever it is. But there is literally only one other fee only fiduciary in town.” And I said, “Gosh. What if I left my six figure job with benefits,” then they were infant twins at home and a home, major spouse who – God bless her – she actually supported me every step of the way. “What I left that safety environment and I started my own fee only fiduciary advisory firm?” And my, “Ah ha,” moment was I just have to do it. And so, I did.
JLD: Let’s kind of talk about that leap because I think that’s a big step for a lot of people. I mean and you just had, what a lot of people might consider a weakness which was the infant twins and the wife at home. But in a lot of cases, and this something that I’ve been saying actually for years now, the baby effect is a real thing. There is no way, Greg, that you weren’t going to succeed when you had those two young mouths to feed and your family to support. Like your back was against the wall. You were going to make those calls. You were going to hustle. You were going to put in the extra hours to make that happen. And that’s not a bad thing, Fire Nation.
So, just – when a lot people take things and they kind of put them in a potentially negative light, you can twist that, and instead make that a positive thing “Hey, this is going to be the reason why I know I’m going to succeed.” So, for those that are listening out there Greg, that are in a similar situation to what you were – where they see this opportunity, they’re excited by it, and they’re like, “Man, should I make this leap?” What do you want to say to them? Of course, I’m not saying dive in without any parachute at all. But I just kind of want it to come from you to say what do you think that process could be?
Greg: For me, it was really just a lot of soul searching. I was miserable working for the industry. I was absolutely miserable and I really wanted to get some quality of life. And I would tell Fire Nation out there, if you can make this happen, do everything you possibly can. And like you said JLD, the baby effect, I burned the boat. I mean I left them at the shore and burned them down. And there was no way that I was going to fail. And it took 60 hour weeks, 65 hour weeks. But that was okay because now I’ve got a great quality of life and a wonderful family.
JLD: What are you most fired up about right now?
Greg: Oh, JLD I’m so pumped up about wealthsumit.com. I am actually, since I love and I’ve got this huge passion for being an educator. I’ve done this for 22 years. I decided to take about four months over the summer on 2017 and interview 30 other family fiduciaries, accountants, attorneys, you name it. These are money experts on current topics. And our mission statement is to give everybody actionable tools, tips, and tactics. And I kind of stole that a little bit from you maybe because –
JLD: No problem.
Greg: I hear you say it all the time. But basically, to help people maximize their personal wealth. I mean I want to help people do it themselves and make good decision. So, wealthsummit.com. That’s where you’ll find a free ticket and all the information you need because I just want to get the word out that you don’t have to fall prey to the brokers of the world who want to sell you these high commission annuity products or front loaded mutual funds. You can do it yourself or you can find a great advisor to help you do it.
JLD: Now what’s the story behind that domain. I mean that domain’s just too good to have been available.
Greg: It wasn’t, I just paid a lot of money for it.
JLD: Hey, when you see something, and you it, and you believe in it Fire Nation. Invest in yourself. And Greg, I knew you had that interview skillset in you and it’s very obvious now that you’re running these summits and stuff. Next step, pod cast. Hey by the way, you can turn those into a podcast, by the way. Those virtual summits you can just pull up the audio, the mp3 version, make it into an audio thing after the summits over, and everything’s gone through. And just make that a season of awesomeness. So, just planting a little bit of a seed there.
Greg: And I know exactly where to find the right podcasting clerk.
JLD: You’re the best.
Greg: It’s right into your fire.
JLD: And Fire Nation we are going to be dropping some more value bombs as soon as we get back from thanking our sponsors. Greg, are you ready to rock the lightening round?
Greg: Let’s do it JLD.
JLD: What was holding you back from becoming an entrepreneur?
Greg: I would like to say that my entire life I’ve been kind of entrepreneurial oriented, but really, I had that comfort of the corporate world. And so, I would say the biggest thing that held me back was leaving that six figure job and all the benefits for the unknown. It was just fear of the unknown.
JLD: What is the best advice you ever received?
Greg: Well, my grandfather who raised told me when I was probably six, maybe seven years old. He said, “You cannot rely on the government for anything more than a trip to the movies and a box of popcorn.” And what he meant by that was when you’re on social security, you just can’t rely on it. And what I took out of that, being six, seven years old. I took out of that is, “I’ve got do it myself. I’ve got to be self reliant. Nobody’s going to make this happen, but me and I’m not going to rely on anybody else.”
JLD: What’s a personal habit that contributes to your success?
Greg: JLD I’m insatiable learner. I don’t have much in the way of down time. And whether I’m going for a run or walking the dogs, I’m listening to podcasts. The EO Fire podcast and Harry D. I mean I am always learning. I figure I’ve got to stay on that cutting edge. And if I don’t stay on the cutting edge, I’m going to fall behind.
JLD: Can you share an internet resource like Evernotes with Fire Nation?
Greg: I am a big fan of Mindjet Mindmanager which is kind of like Evernote. But basically, it takes and it kind of lays out in a kind of a flow chart fashion content that I’m going to create. So, maybe it’s a webpage, or a blog post, or something like that. It just puts it in a real easy to see visual format where I can arrange it. So, I like Mindmanger.
JLD: If you could recommend one book, what would it be and why?
Greg: It’s fairly recent, but my favorite book is Tony Robbins Unshakeable. He is amazing, JLD. And I know you’re a fan of Tony Robbins too. That book will teach the average investor what they need to know at the very core. Now it’s a lengthy read, I did it on a really long mountain bike ride. I listened to it on the audio, but it teaches you down the core what you need to look out for when you’re planning your finances.
JLD: Yeah. He does a great job talking about fiduciary on that and it’s Tony Robbins. Just one of those people that you just keep listening to. I hope you guys – just the energy and the vibe is coming. I’m actually going to my first ever Tony Robbins event Date with Destiny this coming December. So, Fire Nation, the interviews that are going to be at that event. I will see you there. And Greg let’s end today on fire with a parting piece of guidance. The best way that we can connect with you, and then we’ll say good bye.
Greg: Excellent, okay. So, part of piece of guidance. I always like to say either you control your money or it will control you. And what I mean by that is you’ve got to take the time, especially entrepreneurial minded people. We get so focused and wrapped up in, “What’s the next step for my business? What funnel do I need to create?” You need to stop and take a second to actually plan out your finances as well. You need to plan out ahead for your retirement. Think about the HSA, and the Roth IRA’s, and things like that. If you don’t go that, you’re going to find yourself retired with less money than if you were putting a little bit of effort all along the way.
So tiny hinges swing doors, you’ve got to control your money or it will control you. As far as connecting with me, wealthsumit.com. You can contact me right there, I get every email, I will read every email, and reply to every email. And also, I’ve put up some free gifts. I wrote a book a couple years ago. It teaches investors how to create their own investment portfolio. So, there’s a free digital copy at wealthsummit.com/fire. And a HSA check list, so it’ll walk you through the process of building your own triple tax free million dollar retirement plan.
JLD: Wow. Well, I’m going to be checking that HSA stuff. And Fire Nation you are the average of the five people you spend the most time with. You’ve been hanging out with JP and JLD today. So, keep up the heat and head over to EOfire.com. Type Greg in the search bar. His show notes page will pop up with everything that we’ve been talking about today. Best show notes in the biz, timestamps, links galore, and of course head directly over to wealthsummit.com. And if you want that gift, /fire will get you there. Greg, thank you for sharing your journey with Fire Nation today. For that, we salute you and we’ll catch you on the flip side.
Greg: Thank you JLD. It’s been a pleasure.
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