Handling Unreasonable Requests

Certainly, none of our podcast listeners would be guilty of making unreasonable requests, but let’s talk about some of the unreasonable requests we hear from others in the financial world. We’ll explore what makes them unreasonable and what proper expectations look like instead.

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Transcript Of Today's Show:

Speaker 1: Hey, everybody. Welcome in to Plan With the Tax Man with Tony Mauro from Tax Doctor, Inc. hanging out with me once again to talk investing, finance, and retirement here on the podcast. Of course, don't forget to subscribe to us if you enjoy the content or would like to get some more episodes as they come out. You can do that at Apple, Google, Spotify, iHeart, Stitcher, all that fun stuff. Any of those platforms that you like to use. Most of those are already pre-installed on your phone. So feel free, excuse me, to subscribe to the podcast, Plan With the Tax Man.

 

Speaker 1: And we're going to talk about handling some unreasonable requests. Tony, certainly none of our podcast listeners would ever be guilty of making unreasonable requests. But that's what we're going to talk about this week.

 

Tony Mauro: Yes.

 

Speaker 1: How're you doing, buddy?

 

Tony Mauro: That sounds good. I'm doing good.

 

Speaker 1: Yeah?

 

Tony Mauro: I'm getting ready for the holidays.

 

Speaker 1: Yeah. We're into November now, yeah.

 

Tony Mauro: Into of November.

 

Speaker 1: Yeah. This is our early November episode. I kind of like this time of the year quite a bit. Except for the massive weather swings because then you get a little, I don't know, a little early cold or something. That's no fun. But other than that.

 

Tony Mauro: Right, exactly.

 

Speaker 1: The 40 degree weather swings are a little bit frustrating, right? You start the morning, and it's like, 37. And then by the afternoon it's like, 70, and you're like, okay, wait. How am I dressing today? [Crosstalk 00:01:17].

 

Tony Mauro: Yeah, I know.

 

Speaker 1: But it is what it is. That's okay. And it might be Mother Nature being a bit unreasonable, but rather than the white stuff, which we're not ready for yet, we'll take it.

 

Speaker 1: So let's do some of these unreasonable requests. I've got a couple here. Basically, these are statements and comments that we've heard people make through the years. I talk with advisors all over the country. And basically, just kind of give me a breakdown on understanding it, but at the same time, what kind of makes it unreasonable, okay?

 

Tony Mauro: Mm-hmm (affirmative).

 

Speaker 1: All right. So the first one, and we're all guilty of this. I want bigger returns with no risk. Well, that sounds great, right? I mean, everybody would like to get... We want to get as much as we can without sacrificing very much.

 

Tony Mauro: Exactly.

 

Speaker 1: But it's not really reasonable.

 

Tony Mauro: It's really not reasonable. And yes, everybody talks about it, especially when the market itself is doing fairly well, has been for a while now.

 

Speaker 1: Right. It doesn't help the argument, does it?

 

Tony Mauro: No, it doesn't help the argument. And we've talked about it before with news coming out so fast and you see people on TV, and we'll use Bitcoin and some of that virtual currency stuff.

 

Speaker 1: Oh, yeah. Mm-hmm (affirmative).

 

Tony Mauro: GameStop, things. And everybody wants a piece of that. And so everybody's looking for that larger return, but then they say, "Well, I don't really want any more risk." Well, there has to be something that gives there, if you want bigger returns. Obviously, we try to educate them that you're probably going to have to take more risks. There's probably going to be a lot more fluctuations. And we try to go into, with them, about the bigger picture, because it's inevitable that ... they're chasing something and they just heard.

 

Tony Mauro: In fact, I just had an email from one of my biggest accounting clients last night. And he's asking me, "What do you think of this stock?"

 

Speaker 1: Okay, right.

 

Tony Mauro: And it's like, well, my first response always is, "Where did you get this? I mean, did you just hear it on TV? Did you hear it from your barber? I mean, what brings this up?" And it's kind of out of left field for him, but probably just thinking like everybody does, "Hey, I want big returns."

 

Tony Mauro: And so a lot of people, when you do that ... well, when they ask me questions like that. I mean, they look at us advisors like we are the accountant on the inside. And they want us to sometimes go out and research this and that. And sometimes you can find companies that are undervalued, as far as that goes, but they don't really have any interest in that. They just want to know, "Hey, should I buy this?"

 

Speaker 1: Right.

 

Tony Mauro: So it gets back to that, "Hey, I just want a big return." So we try to slow them down a little bit. I think it's unreasonable to assume a bigger return for little risk. I mean, at the end of the day, that's not possible.

 

Speaker 1: Well, and again, this market doesn't help, because we're going on 12 years here of this basic bull run. There's been no prolonged downturn in 12 years, which I'm not sure if that's a record, but it might be.

 

Tony Mauro: Yeah.

 

Speaker 1: So typically it doesn't go this long. And you could get into the argument, we could go down into the weeds, Tony, of this whole thing. Is it propped up on toothpicks? Because it seems to be the case.

 

Tony Mauro: Yeah. Talk a lot about it. Yeah.

 

Speaker 1: There's a lot of conversation out there back and forth about, well, one of the reasons that they're keeping the interest rate so low is because, obviously, the debt ceiling is so high. If we raise interest rates, the money we pay on the 30 trillion we owe, is higher. Right?

 

Tony Mauro: Mm-hmm (affirmative).

 

Speaker 1: So there's all these kind of factors in this weird spot we're in working against and for and against each other. So it's understandable. We all want to get as much as we can get, but you got to realize that if you keep risking as much as you want thinking that this market's going to go on and, hey, you know what, we could be totally wrong and it might continue on for 10 more years.

 

Tony Mauro: Yeah. Love it.

 

Speaker 1: The second that it doesn't and you risk too much, then you're going to be upset that you've lost everything. So you got to take the good with the bad, so.

 

Tony Mauro: Yeah.

 

Speaker 1: It's like a Facts of Life episode, take the good, take the bad.

 

Tony Mauro: Got to do it.

 

Speaker 1: All right. So let's go to another unreasonable request. Can you reduce your fees for me? I got a lot of advisors. We talk about this, we'll hear somebody comes in and says, "Well, what are you charging?" Because we see these big commercials from these big box places.

 

Tony Mauro: Sure.

 

Speaker 1: And they're like, we're not charging anything or whatever. Is it reasonable to ask someone to reduce their fees?

 

Tony Mauro: I'd say, off the cuff, I jack around with people and say no, because I kind of put it back to them. And I say, well, let me ask you this. I ask them where they work. They tell me, I ask them, roughly what you make. I said, well, let me ask you if I were your employer, I came to you and said, well, will you take less and do the same thing? What do you think you're going to tell them?

 

Speaker 1: Right.

 

Tony Mauro: To shut up.

 

Speaker 1: I'm not happy with that, sure.

 

Tony Mauro: Yeah. You're not happy with that. Right? So, at the same time though, I guess it's not totally unreasonable because I think you need to know as a client, as an investor, what fees you're paying and are they worthwhile and are they reasonable, type of thing. And if they're a little high, it doesn't hurt to ask. But at the same time-

 

Speaker 1: Sure. And I think maybe what we're talking about is value, right? Because-

 

Tony Mauro: That is the value that you're bringing.

 

Speaker 1: Yeah. I mean, because yes. If there's always going to be the market's always going to be out there, and I mean by the market, I mean the business marketplace, to say, "Oh, I can do this for less," right?

 

Tony Mauro: Yes.

 

Speaker 1: That's kind of the nature of the beast in just about any industry, but at some point, are you scraping the bottom of the barrel because you're trying to get the lowest fee?

 

Tony Mauro: Yeah.

 

Speaker 1: And sacrificing service.

 

Tony Mauro: And it really comes down to the service. Do you feel like you're getting value for what you're paying for and it's taking you to your goal and you have regular updates and really our relationships, I don't want to say performance is not important because it is, but at the same time we try to keep our clients grounded enough to say, "Look, we're still on plan. We're going to hit our goals. And for the risk you want to take, that's what we're shooting for."

 

Speaker 1: Yeah.

 

Tony Mauro: And as long as they get there you kind of get their mind off that, which we're just talking about. I want the greatest return with no risk.

 

Speaker 1: Right.

 

Tony Mauro: Then they find a lot of value in that. But I do think too, that it's like anything else, most of the time you get what you pay for. And so if you're generally down there at the low end, you're really not getting a lot of service. If you are, you've got a great deal, but generally that's not possible.

 

Speaker 1: Very true. I mean, right now, obviously we know prices are getting out of control on a lot of things, but you can easily use just the McDonald's analogy. You can pop into a McDonald's and get a fairly cheap cheeseburger, but that's what it is, right? It's fairly cheap.

 

Tony Mauro: It is.

 

Speaker 1: So if you go to a nicer hamburger place or a fancier type of place and you're going to pay more for a bigger, juicy house burger type thing. So value. Value for what you're paying. You got to bear that in mind.

 

Tony Mauro: It really is.

 

Speaker 1: Yeah. Okay.

 

Tony Mauro: Yeah.

 

Speaker 1: Unreasonable request number three, Tony, how can I get out of paying taxes on that money in my IRA or my 401k? I want to get out of it. That's probably unreasonable. You can't get out of.

 

Tony Mauro: That is unreasonable. Yeah. I say sure. I always, again, I like to joke around a lot. So, you know, yeah, you can get out of it. Here's what you got to do. You got to break some laws cheat on your taxes.

 

Speaker 1: Right.

 

Tony Mauro: And hope you don't get caught. I said, illegally, no, you can't get out of that. And you could do some Roth conversions and you could do some things to plan around it, defer taxes and things. And I think that's where you need to plan it, but to avoid it?

 

Speaker 1: Yeah. We could get more efficient, right?

 

Tony Mauro: Yeah, get more efficient, yeah.

 

Speaker 1: We just can't avoid.

 

Tony Mauro: Yeah. But to totally avoid it, no. It's very, very difficult unless you have, again, the Roths, but there are some rules there that kind of limit that a bit. We do get that a lot. Especially during tax season, they want to get out of it. In fact, I, again, take an example, I had a discovery call the other day with some young businessmen and they just started business. And about the second thing out of their mouth was, "Well, we really don't want to pay any taxes, but we're starting to make money." Well, guys, that's impossible. I said, "There's some things you can do to be more efficient to keep your taxes low," but-

 

Speaker 1: Right, right.

 

Tony Mauro: You're asking for the impossible there, so.

 

Speaker 1: To your point, I mean, I guess you can do it, but A, I'm not the person to do it for you, right?

 

Tony Mauro: No. Nope.

 

Speaker 1: And B, do you really want the headache that comes with it?

 

Tony Mauro: Yes.

 

Speaker 1: Because that is, yeah. And that's always going to be an argument. Look, we want to stay as low as we can stay. We want to pay as little as possible. That's a given, but just realize that you're going to have to do it. And so when it comes to this money and we talk about it often that's sitting there in this IRA or 401k growing over the years, that's what they're waiting on. They're waiting on that big money that you owe them. So let's talk about ways we can be more efficient and reduce the taxes. Now, maybe that's paying some of that. Maybe that's doing some conversions that you mentioned, Tony, paying some of the tax now. At this rate, let's say it's 22% just for hypothetical, versus later on when maybe it's 32, right? Whatever the case might be.

 

Tony Mauro: Right, yeah. It's difficult to say to do. The main thing is just try to keep them as low as you can. That again comes back to the old takes some planning, and a little bit work.

 

Speaker 1: Takes some planning, yeah. Got to have a little bit of a strategy other than just, "I don't want to."

 

Tony Mauro: Yeah. Right.

 

Speaker 1: That's not a good strategy. Okay. Now, how about the kind of along that line, a little bit of that, "I don't want to deal with it." Look, we do podcasts. You do marketing, you do advertising because you're a business, you're trying to get clients in business. And sometimes you come across people who are just like, "Look, I'm finally talking to an advisor. I'm terrified of this stuff. I don't know what I'm doing. Just do it for me." And so, on one hand you kind of go, well how is that unreasonable? But Tony, there are some people who think, "Hey, let me just hand you all my stuff. And then you just fix it all for me. And I don't have to have any further kind of input from there." And I think that's the unreasonable part. You've got to still be involved.

 

Tony Mauro: You definitely have to be involved because, for one thing, what I kid them about too is I said, "You know, we do it for you. It's going to be my plan." And my plan's going to involve this, this and this. And do you want that? And they all say, no, gosh, I don't want to do all that. I said, well then, my point is, it's got to be your plan. You got to participate. Yes, it's a little bit of work, but it should be fun work. I mean, we're not going to give you anything that you can't handle. But part of the [crosstalk 00:11:42].

 

Speaker 1: Yeah. You're doing the heavy lifting, of course, but you-

 

Tony Mauro: Yeah. We're doing the lifting.

 

Speaker 1: Yeah.

 

Tony Mauro: But I think part of the value though, is... and we will not do it. When we get done kidding around, we say, "No, we will not do it for you." Part of the value we bring is we do a full financial plan with everybody here or at least a minimal one. We're not just going to come in and throw and pick some things off of a piece of paper because I want to know, and I want to have it down as to what your goals are, what you have now, what you're trying to do.

 

Speaker 1: Right, yeah.

 

Tony Mauro: So that we can work towards something. So, it doesn't take a ton of work for them. Most advisors these days have most of this automated and online where they can go in and start filling some of this out rather than having it. Used to be on paper, you get this big packet from your advisor and that petrifies them and now they can just kind of go in and pick it off and save it as they go. But they do have to, with us anyway, have to go through that step. Yes, so important.

 

Speaker 1: Yeah. And to your point a minute ago about, it'd be your plan. Even if it's not your thing, right? The math or the figuring out the best optimal time for this and alpha that and beta this. Sure, we understand it. That's not your thing, but you've got to be able to talk about what it is that you want out of retirement. What kind of lifestyle you're hoping to maintain? Is it heavy travel? Is it a lot of charitable giving.

 

Tony Mauro: Right?

 

Speaker 1: Whatever the case might be, that's where you come in, right? So that's where a lot of the... Hopefully those are fun conversations to your point.

 

Tony Mauro: Yeah. They're fun. Yeah. If you get it down to that level and where we're not talking about all that technical stuff, people start to open up about that kind of thing.

 

Speaker 1: Yeah.

 

Tony Mauro: And you know, some of that stuff they've been wanting to do all their lives and if they can have a chance to do that, then all of a sudden they're sitting up in their chair a little bit saying, "Well, yeah, maybe I can do this."

 

Speaker 1: Exactly. I mean, that's when at that point you've decided you wanted to fulfill your lifelong dream of making tiny marshmallow Elvises in your garage and selling them at Halloween or something, I don't know.

 

Tony Mauro: Right?

 

Speaker 1: Whatever crazy idea that you've got, the retirement could be the fun time to do that. And then you got to fund it with, the plan, the strategy to get it all done. And I don't know where that crazy little Elvis thing came from, but that's the point, right? You're like, "Yeah, I like that too." So that's kind of the crazy point of retirement is that it's hopefully this opportunity that we get to do some things we've always wanted to do, but also maintain that safety and security and that structure that we're all looking for as we're aging, which kind of comes back to the big returns with little risk, we want to chase the big money, but we don't want to risk anything.

 

Speaker 1: Well, you got to have a good strategy so that you can protect what you need to protect. But then also maybe take a few chances here and there, but that all comes back to having a plan and a good strategy. And hopefully that helps you out along the way. As we talk about this stuff on the podcast with Tony. So if you've got some questions, reach out to him, get on his calendar and chit chat about these things at 8 4 4 7 0 7 7 3 8 1. If you've got some questions before you take any action, always check with a qualified professional, like Tony. He is EA and a CFP, a certified financial planner of 20 plus years here to help you in the area. So give him a jingle 8 4 4 7 0 7 7 3 8 1.

 

Speaker 1: And as I mentioned earlier, don't forget, you can subscribe to the podcast on whatever platform you like using for your podcasting needs, and you can find it all at yourplanningpros.com. That's yourplanningpros.com. Tony, thanks for hanging out with me and my friend. I hope you have a great week. I'll talk to you in a couple of weeks just before Thanksgiving.

 

Tony Mauro: All right. Sounds good.

 

Speaker 1: All right. Well, have a good have a good week folks. We'll see you next time here on Plan with the Tax Man with Tony Mauro.

 

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