Podcast 67. The Importance of Cash while Investing with Rob Schulz

Average Joe Finances:
0:00

Hey, how's it going everybody? So today's guest is Robert Schulz and he is the founder and president of Schulz wealth, LTD. Named on Investopedia is list of top 100 financial advisors in 2019 and 2017. Rob is also a former instructor for the certified financial planner, the CFP certificate program at the university of Texas at Arlington and Texas Christian university. Born in Taylor, Texas. Rob attended the university of Texas on a Navy ROTC scholarship where he received his bachelor's in accounting while serving on board a ship as a surface warfare officer. Go Navy. He found his calling counseling sailors on desperately needed personal finance and money management issues. This is definitely something I want to talk about later because I see this all the time, too, in the Navy. Today Rob lives in Mansfield, Texas, with his wife, Shelly. He's a proud father of four and is an avid sportsman, woodworker and civic leader. For more than 25 years, Rob has been committed to helping everyday people take control of their money and attain real world financial success. So, Rob, I am super excited to have you on the show. Thanks for joining me today.

Rob Shulz:
1:09

Yeah Mike,it's great to be here. Thank you. Thanks for that great introduction. That's that's awesome.

Average Joe Finances:
1:14

Hey, you got an awesome background. So I got to talk about that a little bit, right? So speaking of your background, I'd like to dive a little bit more into that. And this is the same question I ask every guest that comes on the show. And I want to know a little bit more about you. So if you could share a little bit more about yourself and share your story, you maybe maybe go a little bit deeper than the background that I provided, but how did this all get started for you.

Rob Shulz:
1:36

Yeah., and, and really, it first got started and I tell the story in, in my book about when I was 12 years old, my dad taught me about the, the magic of the time value of money. And I remember. 12. And it was, it was kind of life-changing since that point forward. I always, always, if I had a calculator, I play around with it, put, put money in, put a return on it, see how many years it took to get to, , half a million or whatever it may be. But then I as he, as he mentioned, I was a Naval officer on a, on a ship, John Rogers. And when I got to my ship is in the yards and The really, the first thing I ever did as a, as an officer was I had, I had a young radiomen who had gone and bought a car, , tote the note at like, I don't know, it was like 27% interest and he couldn't afford it. So first thing I did, he and I went back to that, a tote, the note place and got his money back. And from that point forward, I started learning that that wow, , these guys are, are getting preyed on a little bit. And and having the background that I had, I was, I was able to find a way to help these guys. And, and that's when I really started thinking after I got out of the Navy, that maybe that's what I wanted to do was, was help people with their finances.

Average Joe Finances:
3:00

Right on you, , that story that, that you described right there with the young radio men, right. Getting a 27% interest rate, , would you be shocked if I told you that that's still happening to our young sailors today?, especially where, where was, where was the John Roberts at?

Rob Shulz:
3:15

The John Rogers class destroyer at the time we were in a Metro machine shipyards in Norfolk, Virginia.

Average Joe Finances:
3:24

Okay. Yep. So that is a very common practice in Norfolk because Virginia doesn't have any laws to stop these car dealerships from doing that.

Rob Shulz:
3:34

I can't believe they still don't have, I mean, I knew that at the time they had no usury laws whatsoever and they still don't. Wow. That's amazing.

Average Joe Finances:
3:41

At least let me see. The last I was stationed in Virginia was I left there 2018 and it was still like that, so, wow. But, yeah. And, and, and the thing is, these car dealerships, see these sailors come in and they say, well, there's a guaranteed, every two week paycheck, what can you afford? What's your monthly payment you can afford. And that's kind of the way that they go to sell it to them. And then they don't realize they get like these six, seven year loans at such a high interest rate. And they're paying to the point where they, , later on it's, it's so unsustainable that they wind up refinancing and they're paying on this car for almost 10 years. Yeah, I mean that you have, the sailors that'll go buy a car like that, but then you also have the ones, that just make a poor decision and they go buy a brand new BMW or something like that. That's pretty much their whole paycheck. So definitely still seeing stuff like that. Knowing that you were talking to these young men and women about, their finances and how to not do this is definitely great to hear because you probably save some sailors, a lot of pain.

Rob Shulz:
4:39

Yeah, and , let's not pick on sailors too much because since I've been, since I've been out of the Navy it's, it's very, , most people do that and , I'm a financial planner and I believe that the reason why people do this is because, I mean, we're just genetically made up to have what we call, I call it short-term bias. Where, , we're genetically made up to prioritize things that are close short-term goals over long-term goals, even when the short-term goal is not near as important as the long-term goal. And the way I like to describe it is, like a long time ago when their saber tooth tigers and that sort of thing. Well, that was, that was a short-term threat, right? If you didn't deal with that, then you, you didn't get to live to have kids and so forth past that. And so there's so many things like that in our modern world that that work against us when we're really trying to be financially successful. And that's just one of them short term bias.

Average Joe Finances:
5:43

Right. Absolutely. Yeah. And again, not trying to pick on sailors. It was just, it was a common ground that we both shared and, you're going to see that everywhere, no matter where you go, with these financial decisions that people make. And a lot of it has to do with lack of education, right? They, they just, this isn't something that you really get taught in school, which is probably the worst part about our education system today is they don't really teach personal finance and, and just financial responsibility to our kids. We homeschool our kids and financial literacy is part of their curriculum. So that is super important. I want to make sure my kids understand the value of the dollar and that it takes a lot of work to earn one. So you don't want to just go and blow it.

Rob Shulz:
6:28

Oh, yeah, Mike, and I think that's the answer, you and I are not going to fix the education system in the United States. But we can do is we can make sure that our kids are getting a good education in these things. I think that's, that's fantastic.

Average Joe Finances:
6:43

Well, and the other thing we can do, which is exactly what we're doing right now, having this discussion and the whole reason why I started this podcast is to get the message out there. There's a, my audience here, there's a lot of young men and women that listen to this show that are, in a spot where they're going to college and they're racking up student loan debt, or they just graduated college and they have student loan debt, and they're not sure what to do, what the next step should be. My hope is that they hear an episode like this one, especially talking with a financial advisor like you, that, it kind of pushes them in the right direction. And if you can make a small change every day in someone's life, then you're making a difference in the world. And to me, if I just affect one person, then I'm happy with that. So I want to talk about that, like, with what you're doing, because with you being named on Investopedia's list of top 100 financial advisors twice, , in 2019 and 2017, obviously you're doing something really good and you're helping a lot of people. So one of the big things right now, that's in today's environment is, we, we just had this pandemic, we're still going through this pandemic. Right? So a lot of people. Lost their jobs or they weren't able to telework or they, they had to cut hours. So they're losing some of their wages. What, what do you think is a good way? Or how can somebody like budget smartly during a pandemic like this? What would you recommend?

Rob Shulz:
8:06

Yeah, sure., the pandemic hit us all just straight out of left field and if you weren't prepared for it it could really have whacked you hard. And I would say that first thing we need to learn from, from it. And I think our generation will be affected by it for the rest of our lives is we need to learn that we need to be prepared for, , for things to happen like that. And that starts with having cash reserves. We talk about that constantly with our clients. I mean, every time they come in, first question I always have is all right, how much cash you got in the bank? Because, cause that gives you time, , when something bad happens, whether it's a pandemic or you lose your job or a combination of the two or whatever it may be. It's, it's how much cash that you have that gives you the time., to, to regroup, make decisions and, and figure out where you're going to go from here. And without that time, , you it's very, very difficult. So that's the first thing probably. Also along those lines is, , don't panic, , it's going to be okay. I think that that a lot of times, people will just throw their arms up in the air and just kind of give up and, , don't ever give up on your financial situation ever. There is. In my opinion, there is always a way out. Okay. It may take some time. It may take a lot of sacrifices. You may rack up a lot of debt because maybe you weren't prepared, et cetera, and so forth. But man, you can make this happen. And it's really, really easy to lose perspective about where you are. I have people come and meet me for the first time, all the time. Really, really smart people. And we'll go through. All their information, their cashflow, the financial statement, et cetera. And one of the biggest things I can do at that point is just provide them with some perspective, because it's really, really hard to see it when it's your own numbers and you're so caught up in it. So that's just kind of some thoughts along those lines , just don't give up, I guess.

Average Joe Finances:
10:14

Right on love it. I mean, so I wrote some stuff down that were, as you were talking like I said, I like to take notes when, when we're having these conversations and, key thing that you're pointing out here is cash reserves. Right? So one of the things I've talked about on my show several times and have had several guests talk about this too, is having an emergency fund put to the side, cause you never know when the next pandemic or family emergency or something will come up, that could change your life. That could, you can lose your employment. There's just so many different variables out there. And life is unpredictable. You can be as predictable as you want, and you can be as prepared as you want, but life is unpredictable. So the key thing is being prepared. Like you said but what you really, when you said that I really liked is don't give up on your financial situation. Like no matter what because you can make it happen and I get what you're saying. Right. So if you weren't prepared for it and you're racking up, like maybe a lot of credit card debt now, because you still gotta pay your bills. There is a way out in the future and that is the thing that you need to be focused on at that point, not that everything's all over. You need to be focused on, pushing the reset button, getting back on your feet and, and moving forward. So that's definitely a feeling that.

Rob Shulz:
11:23

Yeah, yeah, you you've got to solve the problem. What I mean? You can't hide from it. A lot of people will do that. They'll just go, oh, I don't want to look at this. I don't want to deal with this. And that's a mistake. I mean, look at square in the face and just know that , You're a smart person, as human beings, we solve problems. That's all we do. And, and, and it's, it's a solvable problem. If you, if you work on it and stare at it.

Average Joe Finances:
11:46

Absolutely. Now I mentioned like, one of the things that we talked about on the show is an emergency fund, but do you have like other ways that people can prepare their finances for the unexpected?

Rob Shulz:
11:59

Yeah. I mean, cash is really important, but then also maybe even having, additional resources, like if you own a home and certain states, you can have a home equity line of credit. It doesn't mean that you have to draw on it, but, you have that money available at a very, very low rate. Compared to consumer debt. And that can be something you can kind of keep in reserve. If you're in business for yourself it's called a line of credit and it's the same thing, , all, all, it's really smart from a business standpoint to always have some type of ready credit had at a low rate that you can, you can turn on just in case something, something kind of just doesn't go the way, the way you expected it to. And yeah, I really do. I think it just comes down to cash and then having, , some good credit reserves, the biggest mistake people make is they, they get on a course, they go, okay. And there's, this is preached a lot, that. Okay. No debt, right? I'm not a no debt guy. Okay. I, I, that doesn't make sense to me., debt is a tool. If it's used properly, you can use it as a tool in your finances and it can work out great. Okay. So what people will do is they'll, they'll hear, oh, I'm not supposed to have any debt. And all they do is I pour all their money into paying off debt. And next thing , something comes out of left field. They don't have any cash. Guess what has. It goes on the credit card. Right. And they're never get out because you never focused on that other priority. The other thing that happens 10 years goes along and that's awesome. You got, you had everything paid off, but you don't have retirement plan. You have no, you have no money to send your kids to college. So and I know a lot of the people that listen to your show are young and have kids, and that's the time. When I think a lot of folks will make that mistake though. They'll get blinders on and they'll focus on one thing. And man, life is not like that, especially when it's your cause you're in that stage, I think right now, Mike,, everything's coming at you all at once. You got to deal with it all, , and I'm sorry, it's hard, but that's what you have to do.

Average Joe Finances:
14:12

Yeah. But the thing is, , being prepared for that, so you, you mentioned cash a lot, right? So I want to know what are your thoughts on making purchases with cash, like actual physical cash dollars. I know people don't really know what those look like anymore. But like going to a store to making a purchase and you're using cash instead of just swiping your debit card. What are your thoughts on that?

Rob Shulz:
14:37

Well, it can work, ? Cause another concept that I talk about are net savers, net spenders, and a net spender is not a bad person. Okay. It's just somebody who enjoys spending money. I'm a, I'm a net spender. Okay. I mean, I, I enjoy buying stuff for all my crazy, hobbies that I have. Okay. So if you are a net spender, you have to have tools. Okay. That you use to keep things in check so you can meet your other goals and so forth. Okay. And one is, is to, , have a certain amount of cash and that's what you're supposed to use. It's there was a guy a long time ago. I can't remember what his name was. He wrote a book. He talked about the envelope system. think it's Charles Gibbons or somebody like that. Yeah. And that, and we used that when we were young, actually we used an envelope system. You'd put in an envelope, , how much you're gonna spend on groceries, how much you're going to spend, , Hey, whatever works, , if that works, that's great. There are lots of different ways to all you're trying to do is trick yourself. Okay. You're trying to trick yourself that, this is all you have. What needs to be used for other resources is there, it's that simple really.

Average Joe Finances:
15:48

Yeah. So it's, it's funny. And I, I, I jumped in there because before we moved to Hawaii, when we were focused on getting out of consumer debt, we wanted to get all of our loans, paid off credit cards, paid off, and we wanted to have zero consumers debt. And we wanted to have money in the bank for any down payment that we might need or renovations or repairs to the home that we were going to buy in Hawaii. Now, fortunately, I was able to use my VA loan, so I didn'thave to put any money down. So we had 40 grand in the bank at the time to just be able to use towards whatever repairs or renovations we wanted to do and how I was able to get there. Because just two years before that I had over $27,000 in credit card debt. Right. And we, we did the envelope system. So we said, okay, here's the budget. Here's what we're allowed to spend on groceries. Here's what we're allowed to spend on this, that whatever, money for taking the kids out or going out, which was a lot less than what it used to be. And we would put it in the envelopes and say, okay, and the leftovers would carry over to the next month. So if you did really good, that money can carry over. And then towards the end, any leftovers we just took and we dumped it into the debt to pay it off faster. And we were able to pay off that debt in a two year period and have$40,000 in the bank before we moved to Hawaii, which was absolutely awesome. So I am a fan of the envelope system for somebody who's really struggling because for me, I was not very disciplined at all. So using that system really helped me, move forward and stick to a budget.

Rob Shulz:
17:21

Yeah, it was Charles Gibbons, by the way, I always like to give him credit his wealth without risk was his, was his book way back, way back when I read it. And it had all that stuff in it. Just amazing, , putting your credit card in the freezer. That was his idea , in the class

Average Joe Finances:
17:37

We didn't dothat, but we did, we hide them. Yeah.

Rob Shulz:
17:40

He he'd say, just put it, , you've got to keep one, he'd say, put it in the freezer and a cup, and then,, if you really needed it, you had to wait for it to thaw and using the microwave was cheating. I thought that was hilarious.

Average Joe Finances:
17:53

The microwave, you, you might have another problem.

Rob Shulz:
17:55

Yeah. You might have another problem. Another really cool tool that I don't think he came up with, but I learned, while all this was going on, , just kind of learning how to, how to save money. I was, we have, so we have a checking account and we usually have the savings account in the same bank. And then we have like this link between the two, like, even like a link. Like if you, if you go negative on your checking, it, it dumps it in from your savings. Terrible idea. Okay. That is a terrible idea. The best place to keep your cash money is in another. Where it's really hard to get to there, like these sleepy credit unions that have no technology at all. That's the perfect place. Cause then you have to go in during working hours, , during banking hours and get your money out and it makes you wait and think about other other options. It's pretty awesome.

Average Joe Finances:
18:43

No, that's, that's fantastic way to do it as well. Especially for somebody who's not disciplined. Right. Yeah. And there's not, even if you're not disciplined, there's nothing wrong with that. Right. Everybody, , has their own spending habits. And like you said, you're a net spender. Right. I also am. I've actually had a conversation with another guest about this about the difference between spenders and savers. Right? So my wife and I we're polar opposites, I'm a spender, she's a saver, right. So what I do now is I look at, , I changed my mentality. I changed my thought process. On what I spend my money on. So now, , I feel good about when I spend my money on bills. I feel good about it when I spend my money and pay myself by putting that money into an investment. So I look at it that way, like, Hey, I'm still spending the money. I'm still getting, I'm still scratching that itch. Right. I'm still able to do what I gotta do, but I'm paying myself and I'm paying my bills. I'm paying myself and I'm paying my bills. once you can flip that, switch, everything changes.

Rob Shulz:
19:43

Man. I love that. That's really good. Mike, I'm going to use that. That's a great way to think about it. That yeah, absolutely. I'm saving. I'm not saving I'm I'm allocating, which is what I love to do.

Average Joe Finances:
19:55

Paying yourself right. If you, and that's the other thing too, pay yourself first, then pay your bills. So, if you're committed to invest a certain amount of money every month, you want to invest that money first, then pay your bills because if you pay your bills first. And then you're like, oh, well, , this came up and I need to go get that. Or I need to spend a little more grocery shopping. You're going to do that. And then at the end of the month, you're like, well, I don't have enough to invest my set amount that I set out to put. And now you're investing less and you just took away from yourself. So don't take away from yourself, pay yourself first, then pay your bills. Then what's left over is what you have to do, whatever you got to deal with. Right? So you put your money into your savings. You put your money into your investments and then move on from there. That's, that's the way that we currently do it. It's it's working out pretty nicely. The other thing we do right now. And I've talked about this a bunch before is so it's kind of like the envelope system, but we've kind of upgraded now to bank accounts. Right. And we have sinking funds. So we know we spend this much a year on the vet, bill, dog, food, cat food, things like that. So we have a set amount that we put into this other account every month. And that account is strictly for the pets. Right. We know that we spend this much on the holidays and birthdays. So we put this much a month into that account, which is the holiday and birthday account. So we have several different accounts with different things tied to it, and we just allocate the money to those accounts. That has also been super helpful. It's kind of, I guess, like the digital envelope. Right. But it's called sinking funds.

Rob Shulz:
21:26

Yeah. Yeah. And credit unions have gotten really good at that. That, and they'll do that for you and you don't have, I don't think it's even like a separate account. I think it's like sub-accounts or something and it works great. Yeah.

Average Joe Finances:
21:38

We, we opened separate accounts also in different banks.

Rob Shulz:
21:41

There you go. Okay.

Average Joe Finances:
21:42

It's funny that you had mentioned that, so we know specifically that it has to come from that account on that card from that bank. So that definitely works out.

Rob Shulz:
21:52

Another thing people get really caught up on, it's just, it's going to be a cash show. That's what it sounds like to me, we're going to talk about cash is I'll get people. They get so frustrated, especially now, , like, well, I have all this cash. I'm not making any money on it because they see what they can make and their investments obviously. And , we're all about that, right? But they're like, man, and there are any way I can make any money on this. And , short answer is no, there's not, , that's your cash and you can't lock it up, ? And in order to make money on money, you have to take risks. And most of the time in the marketplace and the market, , that risk is associated with. something can happen and you could, you could lose it. So, , I always just don't worry about it. You're not going to make any money on it. The best, one of the best investments I ever had. We're talking about Navy stuff to this. I just reminded myself of this. My first house that I bought, , outside of the Navy, I did want to put some money down on I'm scrambling around looking. I can't figure out, , I don't have the money to put it down on this house. And then I kid you not. On cue. I get these envelopes from BUPERS and I think Cleveland, Ohio, or something like that. And it's these stacks of series doubly savings bonds. I had decided the whole four years that I was just like, kind of. Put them in savings bonds, which make nothing. Okay. But if you do that incrementally before that paycheck ever hits your checking account and it goes off somewhere, it's going to be there. And it was awesome. I mean, it was, it was a lot of money. It was cool.

Average Joe Finances:
23:27

I mean, you kind of set it and forget it, and then you got rewarded at the end, right? Yeah. Yeah, they, they have when you go on deployment too, they have like the savings deposit program that I did as well, where you put like up to, you could put a certain amount of money. I think it's up to 3000 a month and you can put that away while you're deployed. And you actually, it could sit in there up to 90 days after you get back and it's collecting 10%. The entire time that it's sitting in there. So if you put a nice chunk of change in there, which, which I was doing, and I, I let it sit until 90 days after I got back from my last deployment and all of a sudden it comes back and you're like, oh, wow. I almost forgot about that. Because once you get back in your pay returns to normal, you kind of just like, oh yeah okay, cool. I'm back. And my pay is good. I took all of like my. Family separation allowance, hazardous duty pay all the tax free stuff. So I made it, so my paycheck just looked the same and all the extra stuff went into program and when I got it back, it was, it was a nice little penny. So it's little things like that. You kind of set it and forget it and just let it work. Its magic. That's one of the beautiful things about , investing in compound interest. Right. There's a reason why Albert Einstein called it the eighth wonder of the world.

Rob Shulz:
24:37

Yeah. it isamazing.

Average Joe Finances:
24:39

Yeah. So , one of the things I want to talk about too, because cause we are talking a lot about cash, but I do want to talk about investing, but you had mentioned , somebody when they have their cash and they they're upset that they can't invest it or they can't spend it. Well, , when you look at it from the point of view that, , it's, it's there for an emergency, if something was to happen and then that emergency actually happens, you're going to be happy that you have that. But at the same time, it almost feels like that when you save that money and you're prepared for an emergency, it never happens. But the minute you go and spend it on an emergency happens and now you don't have it. So yeah. It's super important to have that emergency fund for sure.

Rob Shulz:
25:18

But , I'm glad you mentioned that because I mean, we're seeing more and more people right now, especially post pandemic that have way too much cash. Yeah. And , that pendulum swings, it's like, oh my gosh, that was scary. I'm just going to keep all my money in cash. And , now you're really shooting yourself in the foot too. You can't do that either because your money has to work for you towards your long-term goals. Cause you have to beat inflation. Inflation is something we didn't have much of. And now all of a sudden we have a lot of, you have to be able to beat that with your money over time and you can't do it if it's all sitting in cash. So

Average Joe Finances:
25:58

Absolutely you, you can't keep up with it. You're if you're just holding on to cash, you're losing money, right? Because if you, if you think about it this way, I think they said right now this year, and this is being conservative, that inflation's 4%. Right now, if your, if your money is sitting in there and a checking account, that's getting .025% return. But, , inflation is 4%. You're paying a 3.75% interest to the bank, keeping your money in there.

Rob Shulz:
26:25

It's a guaranteed loss., you're like, oh, I don't want to lose any money. Oh, well, the best way to guarantee that you're gonna lose money is to keep it in the bank. And you're going to lose money compared to inflation.

Average Joe Finances:
26:36

So there's, I mean, there's several different ways to do it. Like, especially for folks that are scared of investing to keep it safe. I like index funds, mutual funds and things like that. That's pretty much what I invest in myself. I'm not really like an individual stock guy. I do have a play account that I mess around with and I do that in, and it's actually doing well. It's it's right now, a little over 30% return for this year. But that's just stuff that I'm actually paying attention to and investing that way. When it comes to money, I'm putting away for retirement. That is like a set it and forget it. And it's in different index funds that are. Pretty safe. They generally get an 8 to 12% return just depending on how the year goes. But so far I'm pretty happy with the way that those are going and it's, it's one of those things that I was able to put the money into it and not worry about it and just let it do it's thing.

Rob Shulz:
27:29

And it's funny, people think that if you're a professional, this which I am that you do all this like super fancy schmancy stuff and all that, but really at the base level, a series of ETFs or mutual funds at very low cost and an index level cost is a fantastic way to go you really, you really, it's hard to screw that up, ? So that's, that's a great way.

Average Joe Finances:
27:53

Yeah. And, and, , I, I do it that way because I am super busy. Like I don't have the time to sit down and research all these different individual stocks and things like that. I mean, I still have my day job in the Navy. Right. On top of that, on the side, I'm also a real estate agent. And then I also do this podcast. Right. So, and trust me, the podcast takes a significant amount of time away from my, my week. So. I like the fact that I can, I can set this up where it's kind of. I set it and forget it. I look at my quarterly statements and I see where it's going, I'm happy. I'm not going to change anything. I have a financial advisor that I use that takes care of those accounts. And, and it's nice because , when you're, when you're busy, like this is one of those things for like busy professionals that, you don't have the time to sit here and individually do it yourself. Where you could actually sit down with a financial advisor, go over your plan, go over what your goals are, which is kind of like, Hey, talking to someone like you, right. And saying, Hey, this is what I'd like to do. This is my ideal retirement age. This is how much I'd like to have. And then you build a plan and you go from there. So so how, how do you create like a great financial plan for somebody who's like a busy professional, like one that can kind of balance their life and their long-term goal.?

Rob Shulz:
29:13

Yeah. And when you say a busy professional, that's just about everybody. I see. And we're just all really busy and so a financial plan. So you, so everybody understands what a financial plan is. It's where, first of all, you take a big snapshot. Okay. So you got to know where you are before you can figure out where you want to go. So it's a financial statement and the cashflow always starts with that with the. And, and so we get that, then we get an idea of what they want to accomplish the couple. And they'll just tell us, , if they have kids that need to go to college, , we take that in and other, other goals they may have. And then of course, retirement which has gotten more and more complicated because we, we don't really retire. We just kind of transition. In life, it seems like. So we make, we have these big transitions and as a financial planner, it's our job to go look on the horizon and see where those are and then see how the income flows or outflow. Are going to be, and then we put all that together and a series of cashflows. And it really is. I mean, you look at, it's just a series of cash flows of all these different things happening money accumulating, for instance, for college than going out for the kids for college money, accumulating for, for the first retirement, going out social security, , different medical costs, et cetera, and so forth. Buying and selling homes, you name it, it all gets thrown in. And then you have to be able to read all that and be able to sit there and go, okay, we're good here. It looks like we stayed positive all the way through. Whoa, we've got a problem here. If we try to do this at this age is not going to work very well. We need to tweak that a little bit and, or we need to. invest differently over here, different like from qualified money to non-qualified money and stuff like that. So, , it's a very complicated deal,, it's it takes years for me to train a financial planner, it took me a long time to learn how to do it. And, and we do that simply because yeah, everybody really is busy and they just want to know., how much do I need to put away in my thrift savings plan or 401k? How much do I need to put away for this and that? And whatever, if we read that all the way out, we can come back to the present and we can, we can tell them how to, how to allocate that money efficiently.

Average Joe Finances:
31:40

Yeah, absolutely. And part of that too is, , the, the individual that's making the plan with the financial advisor, right? Like what, what are your actual financial goals. But when you transition into retirement, right, as you said, like it's a transition phase, not really retiring, right? It's just a, the, the way you, you get your income now is different, , all that money that you put to the side that is now what's, what's paying you in the end.

Rob Shulz:
32:03

Yeah.

Average Joe Finances:
32:03

So for somebody that is, working with a financial planner or a financial advisor, and they as time goes on, they hit these different milestones in life and they're trying to figure out when is the right time for that transition as they're going through all these different things, how frequently should someone speak with their planner or advisor?

Rob Shulz:
32:26

Yeah, that's a great question. Because I can come back with somebody and I can give you. That, that sheet of do this, this, this, and this. And then the next day it's out of date because we have different goals or something changed, et cetera. Different people, different advisers, do it different ways., you hear quarterly lot in the RIA, registered investment advisory kind of fee, only fiduciary world. Like what I'm in you hear about quarterly updates. That is way too. Okay. If I called my clients, , every quarter they'd be like, what didn't we just talk? Was that like last month? So that never happens. Even, even when the financial advisor says we do quarterly stuff, it doesn't happen. Okay. Just we're too busy. Every six months is the sweet spot for most of my clients. Okay. They just come in, we call it the big meeting. They're about to start coming in next week and first quarter, third quarter. That's when we do it. So every six months seems to be just about right. Some people can probably go year in between, , everybody's kind of different.

Average Joe Finances:
33:33

Yeah. So I, quarterly, quarterly could be a bit much, , when you cause every three months, especially with this past year, the way it was, how time seemed to sit still, but it passed by super quickly this past year. I know it feels like. It's been forever since we've been outside and everything. But when you think about how fast 2020 came and went and how quickly we are into 2021, it's, it's absolutely crazy. And part of that is because of the environment we're in today, right? Time hasn't changed, time still flows the same way. It always flows. It's just, it just feels different because the world was turned upside down.

Rob Shulz:
34:14

Yeah. And along those lines, , everybody, all my clients got an extra one last year because, March 23rd was the awful day right. In the market. And that next week pause. And I looked at each other like, man, we going to meet with everybody. This is, this is a big deal. And of course that second quarter. So we did, and boy they've, they zoomed, they didn't come in. And and we met with them and ran their plan. just because they were so concerned. I mean, the market had dropped almost 40% it's crazy though. This even surprised me. Okay. I don't get surprised easily on financial planning numbers. Okay. But it shocked me. How on track they still were, even with their retirement accounts, just practically getting decimated. We ran all the probability, Monte Carlo stuff. Right. And they were good. It was amazing. I couldn't believe it.

Average Joe Finances:
35:13

Well, yeah. I mean, just look at what happened over the past year and up until now. I mean, the market came back with avengeance almost, , it was we're we're now, above what we were pre pandemic, which is amazing., and, and just to, , it also, it goes back to say to that you can't obviously there's always risk when you invest, right. There's always going to be a risk no matter what, but for those who decided to get out after that crash, they really hurt themselves a lot. If you would have just stuck it out and stayed in, same thing happened in 2008. Right. So when, when everything happened in 2008, 2009 timeframe, , those that got out suffered the consequences and those that stayed in, , made out better than they were before the crash. So it's, it's one of those things you gotta, you gotta stick it out. Right. And if you, if you stay in it, it's going to be fine. Cause if you look at the history of the stock market and just look at the chart, you'll see when it's going up, going up, going up, drops down. Well, what does it do after that? It goes back up. It goes back up. So It's pretty safe when, when you look at it from a long-term perspective, but if you're trying to get in and get out, that's where the biggest risk is. Right. So if you're investing, it should be for the long-term.

Rob Shulz:
36:26

Yeah. Time, time in that type of time, significantly reduces the risk of investing. It's perfectly correlated. You're right.

Average Joe Finances:
36:36

Well, that's why they say. Time in the market is more important than timing the market. Right. So that's, that's huge. That's huge. Right. So speaking of investments and, and everything like that, I want to kind of tie it back to you personally. What, what asset classes do you personally invest in yourself?

Rob Shulz:
36:56

I invest the same way my clients do. And we're spread out all over the place. More asset classes, the better looking for new ones all the time, because you don't want all your eggs in one basket. And we just love allocating. Now we're a value shop. Okay. Has been out of favor for a while, but it, it still works for that base level, but then we also have some momentum type allocation as well. I'm a big fan of international, both emerging and domestic. I think you have to be there and,, we're starting to get rewarded there., a little bit of real estate. What we do is we peel the rates out of our, our stock, our like our S and P stuff. And then we invest in at separately. With our, with our larger clients, alternatives, which are alternatives, anything but a stock. So like real estate or oil and gas, things like that start to become more and more important to have, have some things you're just looking for stuff that's maybe a little bit different to add in. Cause if you go like all, excuse me, all S and P 500. Yeah. That's 500 stocks. Okay. And , so you're, you're going to be up and down a lot more than if you get, it gets spread out a little bit more and you're going to miss some opportunities. If you do that.

Average Joe Finances:
38:11

Yeah, absolutely. Now I like, so you're, you're definitely very well diversified and it sounds like, , you treat it the same way with the way you treat your clients. So that's, that's awesome. So there's, , there's a lot to take away here and just a lot of great information. But I want to ask you because there there's, , for somebody who's just getting ready to get started, and this is something that they're looking to get into. They, they finally got themselves out of debt. The, either did the envelopes or they're doing sinking funds or something. And now they're at a point where, Hey, I've got this cash and I want to start investing. I want to start paying myself. Do you have any like tips or tricks you would recommend for somebody who's getting ready to get started on this journey today?

Rob Shulz:
38:52

Yeah, I think the first tip is to use your employer, , and make sure that, that you are socking away. Some qualified money. First qualified just means it's tax deferred, it's in a 401k or something like that. And go big, , I think, we get tempted that oh three percent's enough because you get matched to that. Let's say that's pretty common. You get maybe matched dollar for dollar to 3%. That's not enough. I'm talking 10, 12, depending on your situation, but it should be, it should be a big number and you should feel it. And then from there you do have to have that intermediate money that I like to call that it doesn't have any strings attached from the government. No, no tax benefits or anything like that. But you don't get taxed that bad on it, so you need to have it. And you can get a financial advisor for that, cause this is what I am. I recommend a fee only financial advisor because I'll work for you and not for the big company. But any rate rewrite, you can do that. Or you can use some of the robo advisors. We actually use betterment. I like. They, they do a really good job of setting up a a full allocation and ETF allocation. And what's cool is we can use betterment and use our models inside of their technology. And, it's, it's all it's stuff you would expect. It's, , you can look at it on your smartphone and all that. It's really low, low, low, low minimum initial investments. And I'm, I'm a really, I'm a big fan of all that technology that starting up

Average Joe Finances:
40:20

Yeah, that's that's awesome. Great advice for somebody who's looking to just get started. I really appreciate that. So listen, we've, we've talked about a bunch of awesome things, especially for folks that are getting ready to start investing or for those that are in debt. And they're trying to figure. How to get out out and get this how to save their money, how to get that cash, how to have an emergency fund and everything. So it's, I really like when we can talk about things like this, cause it's kind of like a back to the basics. Right. And , for a lot of people that have been following my show, like, , we get deep into other things and sometimes we forget about like coming back to where you should be at to start. Right. So I really appreciate your take on all this it's definitely been super informative. Right. And and I really appreciate that. So for people that want to find out more about you about Rob Schultz where can they find out more about you and, and your financial advisement firm where can they find out about you guys?

Rob Shulz:
41:14

Yeah. Well, You can go to my website, which is schulzwealth.com spelled weird. It's S C H U L Z, no, T Schulzwealth.com. A lot of really good information there. I write all the time. I have a book it's called Thoughts on Things Financial we put out last year that is also like this it's like that base fundamental knowledge that a lot of people are looking for. So you can buy the book on Amazon or where. It's called Thoughts on Things Financial, and then in Facebook, I have a Facebook group called thoughts on things, financial. And if, if you want to, you can join in there. It's a closed group, but I'll, I'll let you in and we can talk about stuff there and you can get kind of some resources there as well.

Average Joe Finances:
42:00

Awesome. Hey, so I'll make sure I have links to all that in our show notes. When this episode airs to make it easier for those that are listening, you can click it or copy and paste or if you, if you're driving right now, take that mental note of the websites that that Rob just, just gave you. And. And check it out when you're done with your commute and hey Rob, it's been an absolute pleasure talking with you from everything, from what you've done, , in the Navy, helping some of our junior sailors out to what you're doing now over the last 25 years, mind you doing some amazing things and helping a lot of people out. So I really appreciate you and everything you're doing, and I really appreciate you taking the time to, to chat with me.

Rob Shulz:
42:38

Oh, I really enjoyed it. Thanks for having me, Mike.

Average Joe Finances:
42:41

Absolutely. And from Hawaii, Aloha.