Guest: Rob Wilson: Financial Advisor
Originally Aired: October 4, 2017
The Lange Money Hour: Where Smart Money Talks
James Lange, CPA/Attorney
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- Introduction of Rob Wilson: Financial Advisor, Author, TV Star
- Engineering ‘Techie’ Changed Course to Pursue Career in Finance
- High-School Friend Who Made NFL Provided Insight into Pro Sports
- Understanding a Young Client’s Mind-Set Is Critical
- Enjoy Your Wealth Now, but Always Think About What’s Next
- Young Athletes Get Head Start Financially, But It’s Not Income for Life
- Curb Your Immediate Urge to Spend a Bonus or Big Tax Return
- Have Faith in Your Financial Advisor but Don’t Trust Him or Her
- Marriage Is a Big Life Step but Also a Big Financial Decision
- Young People Face Different Challenges to Building Wealth Today
- Thanks to Technology, Now Is the Perfect Time to Start a Business
- If You Live Up to Your Potential, Finances Won’t Be a Worry
Welcome to The Lange Money Hour: Where Smart Money Talks with expert advice from Jim Lange, Pittsburgh-based CPA, attorney, and retirement and estate planning expert. Jim is also the author of Retire Secure! Pay Taxes Later. To find out more about his book, his practice, Lange Financial Group, and how to secure Jim as a speaker for your next event, visit his website at paytaxeslater.com. Now get ready to talk smart money.
Dan Weinberg: And welcome to The Lange Money Hour. I’m Dan Weinberg along with CPA and attorney, Jim Lange, and this week, we are pleased to welcome a first-time guest to the program: investment advisor Rob Wilson. Pittsburgh native Rob Wilson is a financial advisor and television contributor who concentrates his practice on providing advice to, and managing financial affairs for, successful professional athletes, as well as entertainers and other young professionals. Rob’s work providing advice and guidance to prominent young stars has earned him the moniker “Hip-Hop’s Financial Advisor.” In addition to working with multiple platinum-selling music artists, Rob has worked with world-class athletes who have collectively signed more than half a billion dollars’ worth of NFL contracts. Over the course of the next 50 minutes, Rob and Jim will talk about how Rob went from getting a degree in industrial engineering to being a high-profile financial advisor and TV personality, how Rob landed his first NFL client, and the advice he gives when he first meets a young athlete. Plus, we’ll talk about some of the challenges that all millennials face when it comes to money, and we’ll talk about why Rob says there’s never been a better time in history to start a business. With that, let’s turn it over to Jim Lange and Rob Wilson.
Jim Lange: So, Rob, you have a moniker, “Hip-Hop Financial Advisor,” and we know that you represent a lot of young athletes, people who, probably, don’t have a lot of education regarding money, and you combine the issues of being young, not educated about money, and then, all of a sudden, they’re making huge amounts of money. What drew you into helping that type of population?
Rob Wilson: So, I’m going to take it a little bit back because I got to tell you how I got here. So, I’m originally from Pittsburgh. I pursued engineering undergrad. So I went to the University of Pittsburgh. I studied industrial engineering, and then I went to go work for Deloy Consulting, one of the largest professional-service firms in the world. While I was there …
Jim Lange: I put in a little time at those big firms myself.
Rob Wilson: A little bit of time, right? So you know how it is there! So, you probably also know that when I got the hang of the firm, the folks that I saw that were really being successful, the folks that were really making money, getting promoted, they weren’t necessarily the techie guys like me. They were the folks that could go out, bring in new business, build relationships, so on and so forth, and so I felt like I didn’t want to be the techie guy forever. So I went back to school, I got my MBA at Carnegie-Mellon, and then my interests changed a little bit. I started thinking about what Deloy used to bill me out at versus what I took home. Not that I wasn’t paid well, I took some nice vacations, all that kind of stuff, but I thought that I could get a little bit bigger piece of the pie. So I started pursuing the financial industry. So I did an internship in investment banking, and then I had done an internship with a financial advisor here in town at Merrill Lynch, and she was working with pro athletes and I said, “OK, well, I think this is cool. I think I could do that.” So I decided not to go back into consulting. I started my financial career at Smith Barney. Now, you know how the financial industry works. You go to these places, they give you a desk and a phone and they say, “Get to work.” So I had to decide, OK, who am I going to go after? What’s going to be my niche? Because you can’t be all things to all people, and I figured I was going to try this pro-athlete thing. No idea how I was going to do it, but I knew that those folks had a need, and what I liked about it is that they were identifiable. You know, if I go walking into a restaurant, I don’t know who has a need or has money or doesn’t, but I knew that these guys had a need and there was a process. There’s college season. There’s a draft. I know who they are. I can go after them. So I decided that that’s what I was going to do and I just started plugging away, and I felt like because I came from where a lot of these guys come from, I could speak that language, but I have an engineering degree and an MBA, too, so hopefully, they’ll listen to me at the end of the day.
Jim Lange: Like Rich Dad, Poor Dad. I’ve seen that side; I’ve seen this side.
Rob Wilson: There you have it. So I thought that I could identify them and hopefully get to them and really provide something of value.
Jim Lange: OK. All right, so, let’s say you had some experience because you were, let’s say, mentored by somebody who had some clients. So how did you get your first one? Did you bang on doors? Did you write letters? Did you make calls? Did you go to the game?
Rob Wilson: All of the above, all of the above. But one thing I was fortunate is, I had a friend from high school who ended up making it to the league, and so, when I said, “Hey, this is what I want to do,” I reached out to him, called him up and said, “Hey, could you just tell me everything you know just about what it’s like being in the league? What are the challenges? What are you dealing with? What do you wish you had known when you first got to the league?” So I not only learned, but had him introduce me to some folks, and so that was, sort of, my way into the industry.
Jim Lange: OK. All right, so, let’s say that you meet some people, and let’s even say that you favorably impress, let’s say, a young athlete who just signed a big contract. I assume that you have nothing to do with the contractual negotiations?
Rob Wilson: No, I don’t do any of that.
Jim Lange: OK. So, you get them after they’re already rich, not help them get rich?
Rob Wilson: Right.
Jim Lange: Or, at least, their big contract.
Rob Wilson: Right.
Jim Lange: All right. So, obviously, these guys have a limited career length of time, and it could be interrupted at any moment. What kind of advice do you give somebody who is presumably young, not so smart about money, is making very good money, might get injured, you know, not very many, let’s say, even last beyond 30; what kind of advice and what kind of mind-set can you help some of these athletes with?
Rob Wilson: You know, it’s really important that you said “mind-set” because that is by far the most important thing. Look, I’ve had clients that are 19, 20 years old, who haven’t even written a check before in their life. Not one check. But then there’s a $2 million signing bonus in their account. I mean, what do you think is going to happen to that, right?
Jim Lange: Sex, drugs and rock and roll!
Rob Wilson: I mean, look, we read about that all the time.
Jim Lange: Maybe not in that order, though.
Rob Wilson: Right. So, the issue is, I can’t go and start talking about stocks and bonds and mutual funds and life insurance and annuities. I would sound like Charlie Brown’s teacher if that’s what I led with and started talking about. So what I have to do with a lot of these young guys is really get into their psyche, right? Because, look, they don’t want to go and buy a Bentley because it’s got 400 horsepower. That’s not why they want to buy a Bentley, OK? They want to buy a Bentley because their elementary-school teacher told them they were never going to do anything in their life, and this is a way for them to show everyone, “Look, you were wrong. I made it.” But what I have to get in there and say is that first of all, your elementary-school teacher might not be around anymore. So if you’re trying to impress her, it might not work, right? But beyond that, what difference does it make? You need to take care of yourself and your family, not show off for everybody else who you think may have not believed in you when you were growing up. So it’s 90 percent mind-set, and a lot of it is education in the beginning of it, and then, maybe after their first season, the off-season comes around, then we can start talking specifics. But it’s all mind-set in the beginning.
Jim Lange: Let me ask you this, because I actually have the same issue, maybe at a slightly different level: When you first meet people, you probably want to be getting people into the right mind-set, but frankly, you’re also a businessman yourself and you want to close the deal. How do you close the deal and not sound too much like Dad?
Rob Wilson: Well, I probably did sound like that in the beginning, but you know, when you get further into your career, that one deal isn’t as important as it was when I was talking to my first athlete, right? And this is the issue with a lot of people who are in the sports industry, particularly financial advisors, because a lot of these guys don’t want to tell them, “Don’t go do that,” or “You can’t do this,” because they don’t want to lose the business. I’m fortunate enough to be in a situation now where it’s like, I want to work with you and I know I can help you, but I don’t have to work with you. So, that gives you a little bit more freedom to say, “I’m going to tell you exactly what you need to hear, so I know that I can sleep at night, and I know that this is the best advice for you, but if it’s not something that you want to listen to, then maybe go find somebody else.” In the beginning, I’m sure I was preaching and I probably did sound like Dad, but I think more now, I can connect on a different level where I’m not just looking at these guys as another client that I need to bring in.
Jim Lange: So, do you have any … and I know that you don’t want to use any names, but if you could give us maybe some characteristic of maybe a success story, and then maybe one that didn’t work out so well?
Rob Wilson: One name I’m OK to share is, I’ve worked with Shawntae Spencer for a number of years. Now, Shawntae played here at Woodland Hills, played at Pitt and then was drafted by the 49ers, played eight years with the 49ers, and then played one year with the Oakland Raiders. He, from day one, has always been a guy who was, like, “You know, I’m not sure how long this is going to last. Let’s do this the right way. I want to make sure my mom is taken care of and so on and so forth, but I don’t need the biggest car on the block.”
Jim Lange: By the way, I love the story when they take care of Mom. You know, they buy Mom a house.
Rob Wilson: Yeah, I mean, you have to do that. His parents, his mom, you know, they do so much for you trying to get you to that place, that he wanted to make sure that she was comfortable as well. But again, not something so wild and extravagant that it was going to be a drain on him and her and the entire family for years to come, something sensible that she could be comfortable in, and then, to that point, he was always thinking about what’s the next thing? So, he was a beneficiary of being out in the Bay Area, close to Silicon Valley, where you’ve got a lot of technology companies, and he decided to figure this out. “What’s all this about? What’s going on? People are making this money.” So, he started doing a lot of angel investments. He’s gotten into some really good early-stage companies, so he’s someone that had a long-term view. “I’m going to enjoy it while I’m here, but I’m going to be always thinking about what’s next.”
Jim Lange: One of the things that’s interesting to me is that that might be a more typical career, maybe even a little bit longer than average …
Rob Wilson: It’s actually much longer than average.
Jim Lange: You know, we think about (Tom) Brady, who wants to be a QB, making astronomical amounts of money until he’s 50, you know, married to a goddess, and that’s not the way it is for most of these athletes.
Rob Wilson: Those are the anomalies. Most guys are not going to make Tom Brady or Peyton Manning money, and so most of the guys that play, they’re going to make an income that’s a great start on life, right? You’re going to get a great jump start, you’re going to have some recognition, you hopefully will make some contacts while you’re there, and you won’t have student loans and all this other kind of stuff. But it’s not live-the-rest-of-your-life money, and that’s what I don’t like. You see these articles when they go, “Oh, well, these guys have to figure out how to make this money last the rest of their life.” No, they don’t! It’s never meant to last the rest of your life. It’s going to give you a great head start, but they cannot count on never being able to work again when you’re retiring at 30.
Jim Lange: Well, let’s talk about that for a moment because I’m going to guess that the average KQV listener has a net worth of probably less than even $4 million, maybe less than $2 million, maybe less than a million. So, they’re seeing guys with $10 million contracts, and if I’m one of them, I’m saying, “What do you mean, not enough? He’s getting $10 million a year for five years. All he has to do is just put away half of that and he can live like a king.”
Rob Wilson: Well, certainly. Again, somebody that has a big contract like that, but you’ve got a guy who gets drafted in the sixth round, you know, plays two years …
Jim Lange: So, what is the minimum, by the way?
Rob Wilson: $450,000, somewhere in that area.
Jim Lange: Oh, OK. So, you’re right. That is not income for life.
Rob Wilson: No, no way.
Dan Weinberg: Isn’t the average NFL career, like, less than three years, or something like that?
Rob Wilson: About three years. And so by the time you pay Uncle Sam, and by the time you pay your agent, you’re talking about, maybe you’re walking home with 40 percent of that. There’s a big article that just came out that analyzes pro-player contracts and what they actually walk away with, and the average is about 40 percent. So, you see a guy that’s, like, oh, $35 million contract, Steph Curry. After taxes and 401(k) and agent and all this kind of stuff, maybe a little less than half of that.
Jim Lange: Yeah, you notice Rob didn’t mention his fee! But he was an example of somebody who listened to you. Let’s say you invested a piece, then he did some other things, and it worked out well for him. Can you maybe give an example, and maybe it doesn’t have to be one of your clients, you probably have somebody in mind, who did stupid things? And, you know, we sometimes hear about that, you know, guys who made big contracts or guys … by the way, the equivalent in the non-sports world might be winning the lottery, or having a terribly successful business that has a limited lifespan or something like that. Are there stories of people who weren’t so smart?
Rob Wilson: Oh, story after story. There’s never going to be a shortage of stories, and every time I feel like I’ve heard it all, something else pops up and you’re saying, “Why don’t these guys learn from the folks that have come before them and learn from the mistakes that they already made?” I mean, we’ve talked about Vince Young, who was the first or second pick in the draft, who pretty much blew all of his money out of league; JaMarcus Russell. There was a story that just came out a little while ago about Clinton Portis, who played for the Redskins, made tens of millions of dollars. Now, he’s got a little bit different situation, had a spending problem also, but was working with somebody that he couldn’t trust and was actually sitting outside of this guy’s either office or apartment with a weapon thinking about, you know, “What am I going to do here?” because he had been defrauded out of some of his money by his financial person. And so, there is story after story.
Jim Lange: Yeah, don’t kill your financial advisor. That’s not a good thing!
Rob Wilson: No, that is not something that we would advise!
Jim Lange: You can call them up on the phone and yell at them, or, if he really did something terrible, report them.
Rob Wilson: Yeah, call the cops. Let them take care of it. So it’s serious, and I’ve worked with clients, too, who just didn’t want to listen, and I’ve had to fire clients before because look, I get paid to give my advice, OK? I don’t sell any products or anything like that. So if you don’t want to listen and you want to do your own thing, then we’re probably not a good fit. And I’ve been fired, too, right? I’ve been fired by clients as well because maybe they didn’t necessarily want to deal with what I was telling them, and you just have to be OK with it, right? And it hurts, don’t get me wrong! You get that e-mail, text, whatever it is, it hurts because you built relationships with these folks, but as long as you feel like you’re doing the right thing, you’ll be OK in the long term.
Jim Lange: All right, so, one analogy that I might give that might not be all that uncommon is, I was asked to give a course for divorce attorneys that represent women in divorces. So this might be a typical situation where, let’s use the old paradigm where the husband was making a lot of money and he was supporting the whole household and they had a big house and maybe a couple kids with a big income, and she was, you know, let’s say, used to a nice lifestyle, and let’s even assume that she gets a decent settlement that is maybe 60 percent or 70 percent of the marital assets, and then the issue is what to do from there, and there’s some pretty bad statistics about women in that position, and there are a lot of financial advisors who actually avoid them just because they do what some of your young athletes do and blow the money. So, for example, I’m the conservative fuddy-duddy, “No, don’t keep the big house. Keep the retirement plan. Let him have the big house,” things like that. What are some of the lessons that, perhaps, some of those people could take from what you have seen in the sports world?
Rob Wilson: You know what? I think a lot of us have the same issues with money. Some of the issues just come with an extra zero or two. But even for folks who are getting a big tax refund when they file their taxes at the beginning of the year, or a bonus at work, it gets challenging when you’ve got a nice lump sum there and you’ve been thinking all year about what you would do with some money if you just had it in your pocket. So, generally, what I tell folks is you got to chill out for a while, because if you let your impulses take shape, that money will be gone before you know it, and no matter what amount it is, it can go quicker than you actually think it can. Interestingly enough, in addition to the athletes, I have a client that won the lottery, another thing that I’ve been fortunate with in my career, and the thing that I told him when we first started working together is that my only goal is to keep you out of USA Today as another lottery winner that lost all of their money. If I can do that, I’ve done my job. And so, most of my work has been trying to pump the brakes, you know? Once you have the money and you know it’s secure in your account, just take it easy for a little while, relax, don’t make any rash decisions, don’t go running to the dealership because they’ll see you coming a mile away, don’t go calling a realtor, just chill out and try to think about what’s really important to you. We think a big house and a big car, we think that’s important to us, but at the end of the day, that’s not what’s really important. So, you need to take some time and get intimate with what’s really important to you, and then I think you’ll make some better decisions.
Jim Lange: Well, it’s interesting you say that because another guest that we had on the radio is Jonathan Clements, and he made the point that happiness from money does not come from buying things, it comes from buying experiences. Now, he’s advising a different group of people, probably the parents or even the grandparents of some of your clients, but he’s saying, “Hey, take everybody on a trip to the beach, or to Disney, or to Europe, or to buy experiences, not things,” and that is a different way of, let’s say, enjoying things.
Rob Wilson: Yeah, it totally is because you’re going to remember that. Your family is going to remember that. Whoever you take on the trip, they’re going to remember that much longer than the trinket that you bought them that’s going to end up in the back of a drawer somewhere. So, those things are going to be longer lasting. That’s actually a good piece of advice that I advise them, as well. Experiences are going to have you create a better relationship with your loved ones, but the car or the jewelry is just not going to do that much.
Jim Lange: So, Rob, you were talking about mind-set earlier, and I think probably our listeners are as interested in football players, although any athlete, as anyone else, and in order to play at the highest level, if you’re Antonio Brown and there’s two defenders right on top of you and the ball’s right in between, they say that one of the things that he does better than just about anybody is the ability to concentrate and be in the moment. If somebody is having concerns, financial concerns, marital concerns, but let’s stick with your area of expertise, financial concerns, that might be very hard for them to focus. Is that one of the values that you bring to the table, which is you let them focus on the game and you focus on their money?
Rob Wilson: One hundred percent, because I’ve seen it. I’ve seen guys come into my office on a Tuesday on their day off and worried about their financial situation. “Am I going to have enough money? My parents want this. My girlfriend or my wife want this. I got all of these people tugging at me.” They cannot focus on the game, on training, on film sessions if they’ve got all of these other things that they’re worried about in their mind. And think about it. Even anyone that goes into an office and works every day, if you’re worried about paying your mortgage or your car note or whether the check you wrote last night is going to bounce, if you’re worried about those sort of things, you can’t focus on what you need to do on a day-to-day basis in the office. And so, I think it’s the exact same thing with these athletes. Needing to perform at such a high level, if they’re worried about their money, I don’t think they can do it.
Jim Lange: Well, that which we think about expands. So if they are thinking about their money or anything other than the game, that certainly has to have, let’s call it, mind share that will reduce their ability, and sometimes I think that that’s one of the things I provide clients also is to say, “Well, you can think about your grandkids or your vacations or your relationships or whatever else it is, and you’re not going to have to worry about money.” So, to some extent, maybe you’re a little bit of a psychologist in allowing them not to have to worry about money.
Rob Wilson: Yeah, and one distinction that I want to make is, is because where some of these players go wrong is that they have the unscrupulous advisor that says, “Just go play football. I’ll handle everything else,” meaning they don’t want their client to really be engaged in what’s going on. And so, I want them to be engaged but not worried about it because they need to be on top of their stuff, where you read the stories where guys have been defrauded or they’ve lost money one way or another. It’s because they didn’t pay attention to it. All they wanted to know is, “Is there enough money on my debit card to do what I want to do today, and I’m not really going to focus on the other stuff, mostly because I don’t understand it.” They don’t understand it, and so they’d rather just leave it to somebody else instead of feeling inadequate because they don’t know some of the terms, or they don’t understand the documents or whatever. So I don’t want them to just be totally tuned out. I want them to be engaged but feel like so much that they’re on top of it, they don’t need to worry and obsess over it.
Jim Lange: Well, I think the happiest relationships, certainly in our profession, is probably what I would call a collaborative effort where they are involved. So you think back in terms of guys like Billy Joel, whose agent more or less took everything and wiped him out, and no, you don’t want to be like that. On the other hand, you don’t want to be worrying about every single detail. That’s one of the reasons they hire you.
Rob Wilson: Yeah, you know, I would sum it up like this: There was a big story about Tim Duncan, again, who had an advisor who allegedly took $20 million in one way or another, and one of the things that he said was, “Well, I trusted this guy.” And so what I tell people, whether they’re working with me or not, is that I want you to have faith, because if you don’t have faith in somebody, then what are we left with, right? I want you to have faith, but I don’t want you to trust. Have faith, don’t trust, meaning you need to have systems in place that you can verify that what they say that they’re doing for you is actually what they’re doing, that where they say your money is is actually where it’s at, that there aren’t any other miscellaneous accounts out there. So have faith in people but don’t just blindly trust. Make sure that you have a system set up so that you know where all of your money is.
Jim Lange: Well, speaking of systems, I think one of the issues that a lot of young people have, and I would imagine that it might even be worse with athletes, although maybe not, is, you know, these days, if a young person’s getting married that there’s about a 50 percent chance that he’s getting divorced. So one of the things that I like to talk to my clients about, and my clients, again, tend to be older than your clients, I kind of have the opposite problem in that many of my clients that have two, three, four million dollars are still spending $5,000 to $10,000 a month when they could afford to spend a lot more. So despite the fact that they don’t necessarily like their kids’ values, who have bigger kitchens and bigger houses and smaller retirement plans than them, they are going to end up leaving their kids a fair amount of money, and what they don’t want to do is to leave their future ex-son- or daughter-in-law, so this is the daughter-in-law or son-in-law where maybe things are a little rocky, maybe things are OK now, but ultimately ends up in a divorce and they walk away with a lot of Mom and Dad’s money. So, I’m picturing a 20-year old who just made a nice signing bonus, and, at least under Pennsylvania law, that’s earned income that would be a marital asset, and let’s say that he has a couple years like that, and let’s say that he’s even being prudent, he piles up a lot of money, and then there is a divorce and she says, “Hey, I don’t really have an income ability. You do. Therefore, I want 70 percent of that.” Do you get into those kinds of discussions and talk about prenuptial agreements and those types of ways to protect your clients?
Rob Wilson: So it’s definitely a part of the discussion, and a lot of it is, you know, like, “Hey, don’t cheat on your wife. That’s probably not a good career decision or a financial decision for you.” But I’m not an expert. I’m not an attorney in those sorts of things, so I will definitely bring in folks who specialize in that area to give them the advice. But it’s definitely a part of the conversation of the overall plan in saying, “You know, you have to be smart.” If they’re not married yet, “Are you sure you’re ready to get married?” I mean, because this is a big, not only life and love decision, and you hate to put it in these terms, but it’s a financial decision as well, and if you don’t think you have the maturity to handle that responsibility of being with somebody for the rest of your life, then maybe it’s not quite time to do that.
Jim Lange: Is there an argument the other way? I was kind of under the impression, right or wrong, that the Rooneys actually were encouraging Ben Roethlisberger to get married and have a kid or two because here he is, he’s the star quarterback and he’s running around on a motorcycle without a helmet, and I thought the Rooneys sat him down and said, “Hey, son, time to grow up! You have these crazy stories with motorcycles and girls. You might want to consider finding somebody and having a kid or two,” and he seems to have settled down. Is there something like that in there, or would your preference be, “Hey, wait until you grow up and then get married.”
Rob Wilson: I think it’s a case-by-case basis. I definitely think it’s better if you can find somebody who is right for you, who you can commit to for the long-term, start a family, have roots somewhere, absolutely. It’s one less thing to worry about when you’ve got that stability at home. Certainly, that would be the best-case scenario, but the problem is, don’t just go rushing into it just because you want to check a box and say, “OK, I have this now,” if you’re not truly, truly ready to make that commitment.
Jim Lange: Well, your advice about don’t cheat on your wife, it’s not only a stupid thing in many other ways, but it’s a terrible financial move, is actually great advice because, for whatever it’s worth, and I deal with literally thousands of clients, I can’t think of any where there has been cheating and then the marriage continues and everything’s fine. A lot of times, I know plenty of times, that that causes the marriage to end, and there’s other times that maybe it doesn’t end, but it’s, frankly, wounded. So that is actually a great lesson.
Rob Wilson: Yeah, and these guys have a lot more pressure and they’re in much more different environments than we’re in on a day-to-day basis.
Jim Lange: Well, they probably have young, you know … I’m a 60-year old guy. I don’t have young, beautiful women throwing their bodies at me!
Rob Wilson: Are you sure about that?? Are you sure? I don’t know.
Jim Lange: Tempting me, where if I was like a 22-year old stud, I think I might have a little bit more opportunity, and I would imagine that there’s all kinds of women that these guys would have access to, married or not.
Rob Wilson: Sure, and unfortunately, they’re targets for some folks who may not have their best interests in mind, and so you have to be careful with that as well. There’s a lot of things that they have to deal with that, fortunately, we don’t have those problems.
Jim Lange: I notice the ring on your finger, so hopefully not. So, let’s say that we’re talking closer to the people who I serve, who have children of the people that you represent. What is some of the advice that you would give to a parent of a millennial who, maybe they’re an engineer, and some of the salaries now for some of these engineers are even out of sight. On the other hand, engineering could be up and down. They’re not guaranteed a job for 40 years. In fact, in today’s job market, I suspect that careers are going to be more like a series of jobs in some contractor gigs. What kind of advice would you give to the parents of their children, or even grandchildren, because I’m sure you have seen some of the parents try to give advice to their kids, your clients, who might not necessarily appreciate the advice.
Rob Wilson: Well, this is an important question because I do work with “regular folks” as well, right, so your engineers and your attorneys, accountants, so on and so forth. A lot of young people are just now, maybe first generation, in a position to maybe start to try to build some wealth, right? And so what I would tell the parents of maybe some of those folks who are coming up right now is that the millennials and younger folks right now aren’t going to be able to build wealth like they did or like their grandparents did. Work is changing. You’re not going to be somewhere for 30 or 40 years and there’s not going to be a pension on the other side of that. A lot of things that I’m trying to sound the alarm on now, too, is even if you somehow are lucky enough to have a pension, you have to worry about whether it’s actually going to be there when you go to retire. You’ve got states whose pension funds are underfunded by the billions, and I think the Teamsters union in New York just had to cut pensions by about 30 percent. So, you’ve got to tell your kids. “If you went into work tomorrow and they cut your salary by 30 percent, how happy would you be with that?” So you’ve got to think about building multiple streams of income. You’ve got to think about ownership as opposed to just going out and buying things, so buying a rental property, starting a business, having some sort of recurring income. You’ve got to do those things in order to build real wealth because we just don’t have access to the things that our parents and grandparents had.
Jim Lange: And by the way, you can find Rob at his website, www.robwilson.tv. There’s a lot of good information on there, and it’s in story form, and Rob is amazing with the media and he has all types of media stories and some of those are on his website.
Rob, we have mentioned mind-sets several times in the show when we were talking about the mind-set of a young athlete who has come into a big signing bonus, or somebody who has a limited career. Do you think that there is a mind-set about money that is different by generations? Now, so I’m not necessarily talking about just athletes, but let’s say a money mind-set for a millennial versus a Baby Boomer?
Rob Wilson: You know what? It’s funny because a lot of feelings about money, I think, have prevailed through generations. I think money has been a very taboo topic that people don’t necessarily like to talk about or ask folks about or how much do you make, and so on and so forth. People are very, very guarded with that type of thing, and I think that goes for Baby Boomers and millennials alike. I think when it comes to investing, I think you see a lot of fear of it and a lot of lack of understanding throughout generations. I mean, you had Baby Boomers who saw folks go through the Great Depression, and so that sort of shaped their fear of getting into the market, where you have the millennials, who saw their parents have to deal with the Great Recession, the dot-com bubble, and so that has made them a little bit more reluctant to get into investing as well, and reluctant to even spend the time to understand it and learn about it, and one of the big deficiencies I feel is I’m not sure why we’re not teaching this stuff in schools by this point. Two of the most important things in your life are your health and your wealth, and it doesn’t seem like we’re spending very much time on either of those things in school, and so, I think, because of that, in my experience, I tend to see a lot of those attitudes and fears and feelings about money prevail.
Jim Lange: Another piece of advice that you have for young people, and by the way, this happens to coincide with mine, is that you said earlier, it’s going to be very hard for people to, you know, let’s say, in the old days, a guy like you who joined an engineering firm like Westinghouse, and you work 30 or 40 years, you build up a big 401(k), and, depending on the situation, maybe a nice pension to go with it, and you’re saying that, “Hey, that’s not the way it is anymore.” And then you had mentioned, at some point, multiple streams of income, perhaps starting with a rental property, and then you also, in your literature on your website, you say, “It might be a great time to start a business.” So, why would you recommend … and you even mentioned your client that got involved in some of the Silicon Valley businesses. Why would you recommend young people start a business, and why do you think that today is a better time than any time in the past to start a business?
Rob Wilson: Yeah, not only just good, I think there’s never been a better time in the history of this planet to start a business, particularly due to technology. Look, if we would’ve done this interview 10 years ago and I said, “You know, at some point in time, I’m going to be able to take this machine out of my pocket, and it’s going to have a 1080p movie-style video camera built into it, and oh, by the way, I’m going to be able to go live to broadcast to anyone on the planet, and I’m going to be able to do all of that stuff for free,” you would’ve called Western Psych and they would’ve promptly hauled me out of here and pumped some medicine into my veins. But that’s where we’re at. The barrier to entry is almost zero. You know, if you want to write, you don’t have to wait for the New York Times to call you; you go start a blog. You want to be on TV, you don’t have to wait to get discovered; you go start a YouTube channel. All of these things are available to us largely for free. We couldn’t have predicted this 10 years ago, but it’s here now. No one can stop you. The gatekeepers don’t have the key anymore. And so I think because the costs are low, the barrier to entry is low, you can start things quickly, you can make some mistakes you can change. I just don’t think there’s ever been a better time, and particularly because you can start this stuff on the side. You don’t need to go tell your boss, “I’m leaving now to go start a YouTube channel,” or something. You can start this stuff in the evenings, weekends, and hopefully build it up to a point where now you’ve got a decision as to whether you want to stay at your day job or you want to really go start to grow this business. You can sell things on Amazon, eBay, Etsy, I mean, the connected nature that we have now just makes this stuff more available to the average person, and so I think we’ve really got to take advantage of it while we can.
Jim Lange: So, you mentioned the easy access, or ease of entry, and you mentioned that people could start a blog. They could start their own TV show, in effect, on YouTube, of which I have both. What would you recommend to, let’s say, a young, maybe, college graduate, or person starting their career, maybe they have a job but it might not be the kind of job that they picture themselves being in in 10, 20, 30 years, and you mentioned starting a business on the side. You said something about selling something on eBay or Amazon. Are there any other pieces of advice that you would give to a millennial, or, for that matter, even a retiree who’s interested in a side business that they might want to grow?
Rob Wilson: Yeah, I think one of the biggest opportunities right now, in terms of starting a business, would be to teach, or getting into consulting, and let me explain. What I’ve been working with a lot of young professionals now is trying to teach them how to create a business where they can leverage their unique combination of knowledge, education, experience and expertise. Folks out there are hungry for knowledge, but the internet is both the gift and the curse, right? Everything’s on the internet, but you can find yourself searching for hours and hours and hours going to the ends of the internet trying to learn something or gain a skill, and then you’ve got to decide who’s right. There’s competing opinions. Do I do this or do I do that? So I think there’s a huge opportunity, if you’ve got some unique skill that you can impart to other folks, whether it be how to earn more money, whether you’ve got some sort of health expertise where people could get in better shape, lose weight, that’s always a big opportunity online. If you’ve got advice on how to find a mate, find a husband or wife of your dreams, you know, those are the sorts of things that are going to be big online. So if you’ve got some sort of unique expertise that you know people are searching for and they need to learn how to pick up this skill, I think it’s great, because, again, you’ve paid for the expertise already. If you’ve got a student loan, you’ve already paid for that already. So the costs are low, you start it very quickly, just pop up a website and start posting, put some things on your Facebook page, and then maybe start an online course where you can teach people, or a membership program where you’re teaching folks a different lesson every month. So I think that this is just a fantastic way to use what you already have, not have to spend a lot of money and be able to make more money.
Dan Weinberg: I was going to say, how do you cut through and get your message across? The downside of the internet, I guess, as you said, is there are a lot of people out there and a lot of information out there. How do you make sure that people understand that you really are an expert, that you really have something to offer?
Jim Lange: I think I want to take this one, if it’s OK, Rob? So, here’s my idea: I liked everything that you said, but I want to demonstrate true expertise, and I will tell you what I would be doing in that position. I would start a blog and do maybe a series of white papers, one white paper a month. That’s not too much to ask, basically an article or a white paper, one white paper a month in your particular area. You had mentioned health. I was just talking with a guy who has expertise in helping train diabetics, all right? So he’s a trainer to diabetics. I wanted him to do one article per month with various aspects of training for diabetics for 10 months, and he posts them on his website, asks for comments, tries to improve the quality of them, and then guess what? He takes the next two months after he’s done 10 months and he writes a book. So now you have a book. Then you send the book to different experts in the field and you try to get some testimonials for the book. So now, instead of being some joker who’s in his parents’ basement writing a blog, he’s now the author, and frankly, one of the reasons why I’m saying that is because that is what I have done, and I’ve now had seven books, five of them being best-sellers, and it has just propelled my career, and I would recommend that to anybody, even Rob, who has a very unique special skill in working with athletes and working with, let’s call it, hip-hop and young people. If I was Rob, I’d do the exact same thing that I’m talking about, notwithstanding the fact that he’s already achieved financial success.
Are there any last words of wisdom that you want to offer our audience, Rob? And I think you have about a minute.
Rob Wilson: Yeah, one thing that I typically tell people when they’re trying to figure out, “What do I do? How do I build wealth? How am I going to live the life that I want to live?” A lot of financial advisers and gurus will tell you, you know, stop going to Starbucks, or eat lunch at your desk and cut back everything out of your life. I’m more of the “make more money” guy, and I say if you focus on living up to your potential, then you’ll never really have to worry about living within your means. So do the best that you can out there. You won’t have to worry about the rest.
Jim Lange: Well, I think we’ve had some great information from Rob Wilson. He has regular clients, too, even though he is probably better known as the hip-hop financial advisor, advisor to the stars and the football players and the athletes, and he can be found at www.robwilson.tv. Rob was mentioning that it is much easier today to have reach. You don’t have a gatekeeper. One of the things I wanted to mention before we end the show is that I also have some reach. I have 10,000 e-mail subscribers, and right now, I am very concerned about a tax that Washington is about to assess on your children after you die, your IRA and your retirement plan, which, under the current law, can be stretched for their entire lives, is going to be probably taxed … well, with the exception of an exclusion, is going to be taxed within five years of your death. We are trying to do something about it. We actually have a petition. Already we have more than a hundred signatories, and I’m going to give you a website for it, and there’s going to be a free book, which is our latest and greatest book, on what you can do, because we believe that this law is coming. The website is www.stopthesneakytax.com, and you can find places within the website and the link to the website where you can both sign a petition and download a book for free that will help you. Again, Rob’s idea is, “Hey, today, you can just put up anything. There’s no gatekeeper.” There was no gatekeeper for me, but I wanted to put that on. Thank you so much for being on the show, Rob.
Dan Weinberg: Yes, thanks Rob, and thanks, of course, to Jim, and listeners, if you’d like to meet with Jim Lange in person, give the Lange Financial Group a call at (412) 521-2732 to see if you qualify for the Lange Second Opinion service. That’s (412) 521-2732. You can also connect with Jim’s office through his website at www.paytaxeslater.com. And while you’re there, you can also get a free digital copy of Jim’s latest book, that’s The Ultimate Retirement and Estate Plan for Your Million-Dollar IRA, including how to protect your nest egg from the pending death of the stretch IRA legislation. For now, I’m Dan Weinberg. For Jim Lange, thanks so much for listening, and we will see you next time for another edition of The Lange Money Hour, Where Smart Money Talks.