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Episode 201 | Investing and Planning for The Future with Tess Zigo

Episode 201 | Investing and Planning for The Future with Tess Zigo

WITH Tess Zigo

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Hey Group Practice Listeners! Do you ever imagine working forever? We are expected to dream alive to enjoy ourselves after retirement, which will only be possible if we start planning for the future. 

We are now bestowed with financial guidance as Tess Zigo is our guest for this podcast. She is a financial advisor of TruWealth Partners. Equipped with her passion for helping families and small businesses grow, she will share these tips to better plan our future. 

Episode Highlights:

  • Why did Tess shift from corporate finance to financial advisory? 
  • When can retirement accounts and life insurance be helpful to grow assets? 
  • What is the difference between simple iRate and 401(k)? 
  • How do age and time horizon play a role in calculating risks? 
  • Why can a financial advisory be the best choice in planning for your stable life status? 

To communicate with Tess:

Book a schedule with her through the website, https://truwealthy.com/

Direct to her Facebook, https://m.facebook.com/TessZigoCFP

This episode is sponsored by TherapyNotes. TherapyNotes is an EHR software that helps behavioral health professionals manage their practice with confidence and efficiency. I use TherapyNotes in my own group practice and love its amazing support team, billing features, and scheduling capabilities. It serves us well as a large group practice owner.

Do you ever wish for a financial therapist who could relieve you from the last few months of bookkeeping, talk you off the edge when you’re running into issues with Quickbooks, or help you work through a profit plan for growth? GreenOak Accounting does just that! GreenOak Accounting is an accounting firm that specializes in working with group practices. Their value goes WAY beyond bookkeeping; they can help you get on track for financial success. Schedule a free consultation by going to http://greenoakaccounting.com/tgpe

Transcript:

Maureen Werrbach

Hey everyone. Welcome to another episode of the Group Practice Exchange Podcast. Today I have Tego from True Wealth Partners on and we’re gonna be talking about investing and planning for your future. So I’m super excited cuz obviously all things investments and financial planning are not my strength and I love having people on who can talk about things that are their strengths.

Hi Tess. Hi. I’m so glad you’re excited to talk about investing in planning because I think it is such an exciting topic and very important at that. I know I feel like I have a financial planner who I’ve been working with for probably five or so years, and I definitely know that my money mindset, Came from my upbringing and I have this intense fear of retiring and not having enough money.

So I’ve always saved a ton for retirement and it’s just part of my, you know, my money dialogue is I don’t wanna be old and have to work forever. So I’m really excited to hear kind of what your feedback is on just investing and planning for the entrepreneur business. Totally. You know, it is so interesting to hear your money mindset growing up because I actually have the same exact thing growing up.

Really? Yeah, it was exactly. You know, the whole mindset around you always gotta save for a rainy day. Yep. So it was all about to save, save, save. And that’s kind of how I’ve always been. So it’s always like fighting that urge to be super frugal. Yep. At the expense of not enjoying the experiences ultimately we have to like find a balance between enjoying today and still being responsible and saving for tomorrow.

Yes, I totally agree. So tell my audience who you are and why we should listen to you when it comes to investing in landing for your future financially. Sure. So my name is Tego and I’ve been a financial advisor now for seven years. I was originally in corporate finance, so I always knew that I loved money and numbers

But being in the corporate environment, I also learned that I did not enjoy that environment and I really wanted to help people and work with families one on one. And I really love helping small business owners, especially females, because my mom was a small business owner growing up, and she’s one of my role models.

I mean, she managed a super successful daycare business in Africa that she still has to this day. And I’m a small business owner as well, so I think that’s why I really love helping other small businesses just like me to manage their money and keep more of their money. Because it’s not about what you make, it’s about what you keep.

And so the decisions we make with our money are super important so we can set ourselves up for the future and to be financially successful. Yeah, I love that. I feel like that’s something that is often on my mind, especially as I think about where I wanna be in the next 10 years of my life, and whether am I doing what is needed.

Mm-hmm. financially to. Make that happen. I feel like planning for your retirement or for your future, it’s not something you can do quickly. It’s like a lifelong thing. And I feel like with entrepreneurs, especially in the mental health space, there’s a high rate of burnout and we see a lot of people leaving business owners in our industry.

And I just think about how it’s likely that planning. Mm-hmm. actually was not a part of that story. And so I wanna be able to, you know, from a personal side, be able to be saving enough so that. I get to a place where I just wanna be done. That money isn’t what’s keeping me going, like staying in something that I don’t wanna stay in.

Absolutely. So I guess what are your thoughts on, group practice owners or business owners when it comes to. Exit planning and just the financial forecasting and saving process. Cause I feel like we don’t look at those two things as like hand in hand. We think of like investing as a retirement thing and then selling our businesses as separate from sort of financial planning.

Your thoughts on that? What are the suggestions you give to people who are kind of contemplating exiting their business in the next handful of years, from your perspective? Yeah. You know, so that’s a great point. And the two really do go hand in hand. Because you know, financial planning is ultimately about planning for the future, right?

And making sure you’re taking care of today. And when we talk about small business owners, the value of your practice and how much you’re ultimately able to sell it for. Is a big piece of your financial puzzle because ultimately the beauty of owning your own practice is that it’s an asset, right? It’s a financial asset that you can sell, and depending on how much you can sell it for, that can change your trajectory ultimately.

Mm-hmm. , And I think a lot of us as small business owners, we don’t think about the end goal in mind. Yes. I think it’s really important to think about how much am I gonna be able to sell my practice for. Is that gonna be enough to sustain the lifestyle that I like to live in the future? Or am I gonna have to supplement that with other sources of income?

And how do I plan for that? What retirement plan makes sense? Where else should I be investing money? Factoring all of that into reality is, can you answer those two questions? What retirement accounts should I be, uh, looking at? And what was the second question you just said? I was like, I wanna know the answer to both of those

So retirement accounts, I mean, there are so many different acronyms, right? Which mean a lot to someone like me, but they don’t really mean a lot to most people. , mm-hmm. . So, as a small business owner, the great thing is that we have availability of so many different retirements. So we start off with the simple options, right from an IRA to a Roth ira, but those have limited contribution amounts.

Usually it’s about 6,000 a year. So then we look at what other options are there, and there is a thing called the simple ira. A step ira, a solo 401k, and then if you have employees, So a lot of practice owners have W two employees. Some still have just 10 99 contractors. Right? Or it’s just them as a solo practice.

So if it’s just you with no employees, you have the solo 401k, which is very similar to your traditional 401k that if you’ve ever worked for a corporation, had access to that versus if you have W two S employees, you can just set up a regular 401k. And then if we get really fancy and we wanna put more than 61,000 a year into a retirement account, there are also cash balance plans where you can put hundreds of thousands of dollars into a tax-deferred account.

So it can get pretty fancy. . I was gonna say, I just started, what did I just start? I don’t know anything about it, My financial planner helps me with all this, but I maxed my things out and so have, Is it a life insurance Plan one kind that you take out money sooner for retirement? It’s not like the traditional 30.

Do you know what I’m talking about? Sure. Yeah. So permanent life insurance. Yes. Maybe that’s, That sounds like permanent life insurance. So yes. So there’s also permanent life insurance, and then there’s just a regular taxable investment account that you can put an unlimited amount of money into and take it out at any point.

Mm-hmm. . So for anybody who’s like, I’m not waiting until 59 and a half to retire. There are plenty of different options where you can invest your money and use it whenever you need. Mm-hmm. , this is actually something that I am having to make a decision on. Before January. We have Simple IRA and my financial planner years ago had said she wanted me to switch to 401k.

It was like too much anxiety to tell everyone that we need to switch and move things, and so I’ve always like had it on the back burner. In January, I’d have to increase our percentage in the simple ira. I think there’s like, after a certain amount of years, you have to like increase the percentage and so I’m trying to decide if I wanna increase to the 3% or move over to the 401k.

What is the difference between those two things? You know that is a great question. So I will say that the simple ira, like its name, is super simple to set up. That’s why typically most small business owners go that route, to begin with. And the big difference is that in the 401k, you need a third-party administrator to help with the compliance filings, the 55 hundred that are required every year.

And because it’s a more complex plan to administer, you are gonna be paying. A thousand dollars plus just for the administration of the 401k. Yeah. So it is going to be more expensive to administer the 401K plan than it is to administer a simple IRA plan. But the benefit of that is that you can put more away in the 401k.

Exactly. The benefit is that everybody can contribute more. So the limit is 20,500 this year. . So I say once you get to a point where the simple IRA is no longer cutting it for you, meaning you’re like, Man, I wanna put more than that 14,000 a year. I really wanna get to that 20,500 mm-hmm. , that’s when I would consider it if I’m okay paying that admin fee.

Yeah. You mentioned other ways to grow your net worth outside of just your business. Yeah, absolutely. So, Yes, our business is one of our biggest assets, typically as a business owner, but I think the whole concept of don’t put all your eggs in one basket, definitely applies to us because, you know, ultimately if you’re not selling your business in the short term, You never know what the future holds, right?

So ultimately your projection for how much you are gonna sell your business is just a projection. So I think things like your retirement accounts or your investment accounts are a great way to have money and investments outside of your business so you can invest in things like stocks and bonds, and real estate.

Res real estate, investment trusts, and real estate. I mean, there are a lot of practice owners who love buying their building because they no longer wanna pay rent, and that is an asset that you can also sell, or you can lease one day and make money off that, or buy other real estate assets and you know, rent them out.

I know a lot of people are doing short-term rentals now. They buy houses and rent them on Airbnb. That’s kind of huge. Right now it is. So looking at all those different ways to invest your money really depends on your goals and how much risk you’re willing to take and how much work you’re willing to put in as well.

Right? Because with Airbnb I think it’s a lot of work. I think so too. And if you don’t wanna do the work yourself, then you’re paying. A good amount for like a building or a house manager or whatever. You mentioned the word risk and I know mm-hmm. , that comes up often with me. Sure. My financial planner. How do you define what is, I know a healthy amount of risk is really dependent on the person, but I know age plays into that too, right?

Sure, yes. Age plays into it, and the biggest thing really when it comes down to risk is the time horizon. Because you can take different levels of risk depending on when you’re gonna need that money. Right? So when we talk about investing for retirement, if you’re not retiring for 30 years, that’s a huge time horizon.

Mm-hmm. . So you can take on more risk with your investments, especially when it comes to the stock market. We know based on trends, you know, the chance of you losing money over a 30-year period is very low, whereas the chance of you losing money over a five-year period, Yes. Is much higher. Right? I’ve been told, I think everyone has lost money in the past year or two.

My dad was like, Oh my God, I don’t even wanna look. And I’m like, Lucky I don’t look at mine, Right? I mean, sometimes looking at it too often really doesn’t help you. It just increases your anxiety, right? And I like to tell people, you buy a house, right? You don’t look at the Zillow estimate of your house every day.

So don’t do that with your stock account. . Okay, so for those practice owners who are, you know, really haven’t been focusing on retirement, maybe beyond like just matching their 2% that their business might be putting into it, what are some suggestions for business owners, for practice owners to like initial steps?

That will set them up for success when it comes to retirement. Yeah. Here’s one oversimplification that I really like. They say, to take your current lifestyle expense number for the whole year. So let’s say you need a hundred thousand a year. In order to live the good life, right, And you multiply that by 25, and that gives you a good estimate of how much money you need.

So you know, a hundred thousand times 25, that would be 2,000,500 that you need to be saved and invested. And so depending on how far you are from that, you really need to work backward and figure out, am I saving and investing enough? Am I growing my money at the rate of return that I need? You know, there are some calculators online that you can kind of use to get started.

And again, if you need help, I think it’s okay to reach out to a financial planner. Yeah, I was gonna say, tell us where they could find you. If someone’s looking for their own financial planner, uh, maybe they have an accountant. I’ve talked about this a lot. There’s a big difference between having an accountant who helps with your profit and loss statements and your books and having a financial planner is looking at the whole picture, not just your business.

How can they learn more about you and reach out? Absolutely. So the best way to reach me is on my website. It’s www dot True Wealth. That’s t u wealthy.com, and they can literally schedule time on my calendar. I always give a 30-minute free consult so we can see if you know if we’re a good fit. Because I think personality is huge when you work with a financial planner.

Just like if you work with a mental therapist or counselor, you gotta feel comfortable sharing personal details with that person. Yes, exactly. Well, I appreciate you coming on and sharing some tips and pieces of wisdom on retirement future planning and how people can reach out to you. And I’ve said that having a financial planner has been a hugely positive part of my own financial growth, and I think it’s something that not a lot of business owners use until they’re thinking.

Selling their business. I’ve been really proactive with that. I’ve had my person, Mary Beth, for like I said, 6, 7, 8 years now. She works hand in hand with my accountant and then works with me personally on how all of my businesses and my assets in my personal life are all playing a role in the success of my future and ability to.

Live well when I decide not to work anymore. And so for those of you listening who do not have a financial planner, now this is the calling for you to at least talk to someone. And if it’s tested, you know now her website to see what it all entails. There’s so much more. I learned that financial planning entails outside of retirement accounts.

I think people think like, Oh, just investing my person, Like she initially wanted to know what my car insurance information was like, how much was I paying towards car insurance? What were the premiums like? Things where I’m like, Why do you care what my premium on my car? And she made me increase it, and I’m like that.

I can’t believe you’re having me increase my car insurance premium. She really looked at like the whole picture beyond what I thought financial planning had anything to do with. So, you know, Can I just mention one thing? Yeah. I think it’s super important to check the credentials of the financial planner you reach out to.

Okay. And I always encourage people to seek out a certified financial planner and I have that designation. You know, financial advisors traditionally only look at your investments, but as you said, there’s so much more to your personal finances than just your investments. So we look at the whole picture.

So what acronym or what abbreviations should they make sure these people have? Sure. So the abbreviation is, The cfp, which is the Certified Financial Planner. Perfect. Awesome. Well, I appreciate you coming on and sharing your wisdom and taking up time on your Monday to talk about financial planning. Thank you so much.

It’s been a great Monday. Have a good one. Thanks for listening to the Group Practice Exchange Podcast. Like what you heard. Give us five stars on whatever platform you’re listening from. Need extra. Join the Exchange, a membership community just for group practice owners with monthly office hours, live webinars, and a library of training ready for you to dive into.

Visit www.members.thegrouppracticeexchange.com/exchange. See you next week.

Thanks For Listening

Thanks for listening to the group practice exchange podcast. Like what you heard? Give us five stars on whatever platform you’re listening from. Need extra suppor? Join The Exchange, a membership community just for group practice owners with monthly office hours, live webinars, and a library of trainings ready for you to dive into visit www dot members dot the group practice exchange dot com forward slash exchange. See you next week.

Resources

Here are the resources and guides we recommend based on this episode

* I am an affiliate for some of the businesses I recommend. These are companies that I use in my own group practice, and make recommendations based off of my experience with them. When you use some of these companies through my links, I receive compensation, which helps me continue to offer great free information on my podcast, blog, Facebook group, and website.

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Meet your host

Maureen

Maureen Werrbach is a psychotherapist, group practice owner and group practice coach. Learn more about her coaching services here:

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The podcast is structured so that you get practice building tips in small doses, where an episode can be listened to (and a group practice building lesson can be learned) in a single car ride.

Episodes are structured into categories: coaching sessions where I coach a group practice owner on a specific topic, tips of the day by yours truly, real talk where you get to be a fly on the wall while an established group practice owner and I talk about the highs and lows of ownership, and trainings done by experts in the field.

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