B (3:17)

Good morning. Excellent, thank you. Great to join the show here. Really like you guys a lot. Thank you.

A (3:22)

Fantastic. Tell us what is going on? How can we help you out?

B (3:27)

Well, it might just be again, I guess is typical, a bit of educational. I've done a lot of investing throughout the years on my own, but the big assets as I've gotten older, I'm 62 years old, are my Sep and my wife Sep and so those recently I transferred them over to a advisory, so they're all under management. And I'm learning the quarterly fees that come out. And so I was a little bit taken aback with those fees.

A (3:59)

I'm just, I hate having to pay fees. That's the worst. I don't care if you're doing your job. I just don't want. Okay, we're going to get to this for a second. So you're 62. You mentioned a spouse. How old is your spouse?

B (4:11)

She's 61.

A (4:13)

Okay, are you guys still working full time or are you retired?

B (4:17)

We're still working full time.

A (4:19)

Okay, so you've got an active SEP Ira that you're still contributing to?

B (4:24)

Yes.

A (4:25)

Okay. I imagine you've got a small business.

B (4:28)

Yes, I do.

A (4:30)

Okay, great. And you both work at that business.

B (4:33)

Yes.

A (4:34)

Okay, so what's your game plan like in terms of just the business? Because it is small. I, I presume you have some sort of idea about what you're thinking about.

B (4:42)

Yeah, there's a couple of younger associates, so we're kind of in that transition phase now. We're trying to slow down more and more and do a lot more more traveling with, with the kids all over the country. But that's our plan, I think now is to really start to try to slow down and, and enjoy some of the fruits of our labor of sorts here.

A (5:02)

So, you know, in your early 60s, at what point do you want to kind of be done Done.

B (5:07)

Ooh. I mean, I'm not sure we're. I'm reading books, listening to podcasts, trying to kind of figure that out. I've got a lot of other outside activities, so I'm not concerned about kind of being bored. There's a lot of other things I'm involved with, and so I'm thinking next year is my thought.

A (5:30)

Okay, so why don't you tell us a little bit about those two SEP IRAs, as well as other assets that you have saved and scrolled away in anticipation of this in a year.

B (5:40)

Okay. The current SEP. My SEP is. Let's see here. Just over 4.7 million.

A (5:46)

Hold on. Mark, can you cue the hate mail right now? Okay, sorry. All right. 4.7 million in your SEP. Okay, fantastic. By the way, congratulations. And your wife also has a SEP. How much is in her session?

B (6:03)

Just over 500,000.

A (6:05)

Okay. Are these the only two accounts that you say are professionally managed?

B (6:10)

No, there's two more accounts.

A (6:12)

Okay.

B (6:13)

There's a brokerage, I guess we call. It's called a cash management joint account. Anyhow, that's. That's the one that was kind of the one I. I used to buy stock. I was a big. I'm a big Vanguard guy. And so that joint account is now just over 3.6 million.

A (6:30)

Yowza. Cue that hate mail again, Mark. Okay, continue.

B (6:35)

And then I have just a small inherited IRA of just over 16,000.

A (6:40)

Okay. And the brokerage account, is that just an account that's not really being managed as much as just sort of held? Because you said you bought a bunch of old Vanguard funds there from years ago. Is there other things that are going on inside of that account?

B (6:56)

I've got some. Just some relatively small. You know, every now and then I want to buy a stock or this or that type of thing. And there's some local. Local companies in the area that I've. That I've bought the stock with. And so. But that's the one it hasn't. The. I'm just the. The seps I can make trades with. Not that I'm not moving a lot of money or making trades, but that. That the advisor put that into. To where those accounts can be. We can make trades. And there's no tax issues.

A (7:26)

Right.

B (7:26)

That joint account still has. It's got about 1.7 million of unrealized gains. So that one is kind of like. We're still trying to kind of wrestle with that one to figure out what we can do.

A (7:39)

All right, well, maybe you don't have to sell anything. Okay, so you got a bunch of money. Now you're paying a fee for that. You're probably not used to it. So it is. And these are big numbers. So is the new professional charging you for the brokerage account or just the SEPs? Because if the brokerage account is just holding stuff and there's no activity, maybe they're nice and they say, let's not include that in the fee. Or are they including that in the fee?

B (8:07)

They are including that in the fee. We did kind of have a gentle talk a couple of weeks ago, but. Right. That's still. That's part of the fee. So. And I think if I look at projected now annual fees, because we've been with them for about six months, it looks to me like the annual fee for all of those accounts would be just over 51,000 a year.

A (8:30)

Okay, so what's the fee that they're charging you? Is it a half a percent? What are they charging you on this? So 5. It's $8.8 million, right?

B (8:39)

Yes. 0.6 is what I thought.

A (8:41)

Yes, that's what I got. Okay, so they're charging you 6, 10 of 1% on this $8.8 million. However, I just want to underscore this so everyone hears this. The reason why I'm asking these questions, sometimes when somebody gets a brand new account, if there's an old account like a brokerage account, where there's not a lot of trading going on, and I'm not saying that they're not keeping track of that, but sometimes they'll exclude it because it's not something they're actively managing. Okay. So I'm just going to point that out that that is something that is possible. Okay. So we have the two steps. The brokerage account, an inherited ira. Tell us more about what's going on in your financial life. Are there other assets that you have, you own a home or rental property?

B (9:29)

We do have a. Just a separate Schwab or another separate brokerage account that has just over 335,000. My. I'm in. I've been a member of investment club for 20 some years. I've got. My share is 80,000 of that.

A (9:44)

Okay.

B (9:44)

And then I'm. I'm just looking our cash, you know, the liquid accounts, checking, savings. We have about a hundred thousand with that. And then with the real estate, we have a home, a cottage, office building and some other vacant land.

A (9:57)

Hold on, hold on. Let's just do separately. So the primary, primary residence, how much is it worth?

B (10:02)

I would say $650,000.

A (10:05)

No mortgage, correct?

B (10:06)

No mortgage.

A (10:07)

Okay. Then there's the cottage. How much is that worth?

B (10:10)

I would say 500,000.

A (10:13)

Again, no mortgage, Correct.

B (10:14)

No more.

A (10:15)

Okay. Now, commercial property, which is where your practice is, right?

B (10:19)

Yes.

A (10:19)

How much is that worth?

B (10:20)

I put that at about 4. I put 400,000.

A (10:23)

Okay. And is there a mortgage on that?

B (10:27)

No.

A (10:27)

Okay. You said you've got some grown kids, right?

B (10:30)

Yes.

A (10:31)

Are they okay. Are you in a situation where they can take care of themselves or some of the money you have, you would like to try to help them out?

B (10:40)

Thankfully, they're all, they're all squared away. Independent. Two are married, one's a free agent, but they're all good. Yeah.

A (10:47)

Okay, great. So how much do you think you'd like to be able to spend on an annual basis? Silent partner whisper.

B (10:58)

Exactly, exactly. My silent partner is a little lower than me. I'm. I'm thinking around 100,000 a year.

A (11:06)

Okay. She. Yeah, let's not, let's round this up. Okay. So I already, I already put a. Wrote a number down, so I wrote down 12 grand a month. So that's more. So, right. That's 144 or 150. Let's just say it's 150 a year. Okay. Reason? Because if you're going to travel more and you can do this, like, why not, right? What, are you building a dynasty for somebody? No.

B (11:31)

No.

A (11:31)

Okay. So obviously you have more money than you're ever going to spend based on this. So your kids are going to be rich. Your three kids, perfect, Great. They're going to have a great, great situation. Is the reason you got in touch with us? Because this fee is bugging you.

B (11:49)

And it seems so silly talking.

A (11:50)

No, it doesn't. It does not seem silly. I'm not going to. I am not going to. There's no judgment because I want to peel it back. Okay.

B (11:57)

Yes, that's why. Exactly.

A (11:59)

Okay. Now, the person that you hired, what do they do with these two SEP accounts? I'm mostly interested in these because I really feel like the brokerage account, you came in with this and it was what it was. But the SEPs, that's probably where there was a little bit of activity. So there's more than 5. $5.2 million in these accounts together. What did the advisor do with those assets?

B (12:24)

You know, I mean, long term, they, that company, they, they administered my set, you know, so every year I made my. Maxed out. The contribution.

A (12:34)

Yes.

B (12:34)

And then they had, you know, you had your menu of stocks you could pick within the sep. I just would pick all those. Yeah, it kind of just time took care of it. I just, we didn't do anything except put money into it. Every year right now grown to this, to this size of sorts. So there was no active training. I'm not, I'm never like calling off and saying oh, buy this, this or that kind of thing.

A (13:00)

But they, are they doing anything for this fee? I guess that's my question. Because if, if it's just like they're sitting there, then you don't need them. I mean, I think of an advisor in a few different ways. One is, look, I don't trust myself to actually manage money. I don't like it and I'm scared as I get older that there's not a, there couldn't be a time where I just blow it. Okay. I don't think that's you. I'm just saying. But that's a lot of people will hire somebody to manage money for that particular reason. The reason I like the advisor relationship establishes because it's usually beyond money management. It's, it's financial planning. It's saying, hey Mark, here's all that. You've done an incredible job with all this money. Let's develop a strategy for how we're going to manage the money that's in the sep, the two SEP accounts that hasn't been taxed yet. Because we have a ticking tax time bomb. Right. We have tons of money that's going to be forced out when you guys turn 75, when you each turn 75. So let's develop a strategy for that. Let's also maybe think about a strategy for this brokerage account. $1.7 million of unrealized gains. Is there something that we can be doing with that? Should we be gifting to your kids because they're in a lower tax bracket than you are? Should we be using a donor advised fund because you're charitable. But all these would be questions that we would actually address in the planning process. Which by the way, you know, do I think that 60 basis points, 0.6% a little high for 8.8 million? Yeah. Especially because it doesn't seem like they're doing too much. But it doesn't mean that somebody isn't worth a fee to do that kind of work. If they're giving you real customized financial planning solutions.

B (14:53)

They definitely, with the brokerage account have discussed the donor advised fund. Just because of all the unrealized gain.

A (15:00)

Yeah.

B (15:00)

And the benefits of that. Now to I say to our fault we have not done that but, but we certainly want, want to continue to be charitable. And so I think that donor advised fund makes a lot of sense with regard to the seps. There hasn't been a lot of activity because you know they're, they now I did ask them to move money around so that was less, less equity exposure with where the market's at and so they've adjusted that downward and so they, they. I don't want to be critical of.

A (15:34)

Them because they, no you can be because we haven't mentioned anyone's name or the name of the company. So be as critical as you want.

B (15:40)

It just, it just, I, I'm just not used to this fee. I know I was charged a fee, you know throughout the time this, these seps have been growing, I just didn't see may be bliss, you know, Maybe.

A (15:52)

Maybe, but you weren't charged, listen, six tenths of 1%. The assets that are inside of this SEP. Let's just say you never put any more money into the sep. Okay. Because next year you're done. Now we have all this money. I think the question is what is the efficient way to actually have a plan to get it out and what is the efficient way to invest? Inside are the funds like you'd mentioned, Vanguard. So are you in low cost index funds inside of the sep?

B (16:22)

Those, those are a bit different than Vanguard because they fall within the, you know, the company's, their, their menu of sorts. And so it's a bit different. But that's my understanding is that they are low cost funds that we're supposed to be, be able to move money within that SEP with, with minimal costs or you know, those types of things.

A (16:43)

The question is do you and your wife will want to manage this money on your own? So just pretend, you know, let's just pretend at the end of next year, see, you know, in 2026 you're done working and now you've got 5 million bucks, 5 more $5.2 million in seps, all this money in a brokerage account. Do you want to do that yourself? I mean that of course is something that many people choose to do. Does that scare you?

B (17:09)

Part of it scares me. Part of it, I enjoy it. But, but the other part is God forbid, if something happens to me, I don't want to leave a mess for my, my, my wife. And so that's where I'm thinking I should have somebody else managing it.

A (17:22)

Okay. Or at least having somebody available who your wife likes. Okay?

B (17:27)

Yes.

A (17:28)

So I understand how you chose the, the current manager, but I think you would absolutely benefit from interviewing a couple of other people. I know it's a pain in the neck to think about doing this again. The whole like, oh, I don't want to deal with this again. But I actually think it would be worth it for you and specifically Mark, for your wife to be able to feel comfortable working with an organization that is doing the planning, helping with the management, getting her, like we're onboarding her, you know, in terms of the process. And it may be that you've done an awesome job, you've done a great job together of managing and, and creating this wealth. It's incredible, everyone listening. I know the company that he's dealing with, and it's not that they're bad people. It's just that I think that you could benefit from talking to a certified financial planner who's not associated with some big, huge firm that has a different lens through which to look at this kind of wealth. Okay, that's what I think. I would love it for you and your wife to talk to a couple of different people about really doing a full financial plan and investment management outlook. You gotta have a plan for this sep. I mean, this SEP money is going to be a bear for you. It really, really is. I'd love it if you had a little bit more of a strategy. What kind of, you know what, what kind of planner you choose, whether it's just a flat fee or someone who is an asset under management kind of person. I think it's just worth making sure that you both really like this person and see how the different approaches that people take resonate with you and then you can make a better decision that makes sense. Does that make sense? Good, I'm glad.

B (19:16)

Yeah, it does. It does.

A (19:17)

And you know, for everyone listening, you don't have to have $8 million to call in. You know, forget about the numbers. The total numbers are different for each of us, but the situation is quite common. So it's, I've accumulated some money, I have someone managing it or not, but maybe I should have someone manage it because my partner and I are maybe not going to be living forever and that we both want to be on top of this and we want a game plan. And while we know we have plenty of money, we don't really understand that we have a working strategy that's going to maximize that money or at least minimize some of the tax impacts. So I think that if you're listening and you're feeling like, oh, My God, these are such. They are huge numbers. If you lop off a zero and it turns into you, it's the same situation. Okay, so if that's you, and if you feel like you've got a spouse who's maybe not as involved or you're paying a fee and you're not sure it's worth it, or you maybe want another set of ears and eyes on the situation to determine whether or not the person that you're working with is on track with where you want to go. Give us a holler. Go to Jill on money dot com, click the Contact Us button, write us a note, and if you would like to join us live, check the box. Mark will do everything else. You can subscribe to us on the other Odyssey app or wherever you find your favorite podcasts. Please leave us a rating and review wherever you listen. Hey, it's Friday. We do a little business on Fridays. Our music is composed by Joel Goodman. Mark Tularsio is the executive producer and king of all things Web. And as I noted, we are distributed by Odyssey. Try to do something nice for someone else today. Change your work, change your wealth, change your life. Thanks for listening and we'll talk to you on Monday. Hey gang, here's the thing about wine. Some of the best bottles are not sitting on a store shelf. They're being crafted at small independent wineries. But those wines can be so hard to find sometimes. I wish I had a personal sommelier to guide me to find the best wines I normally wouldn't be be able to access. Where's that handcrafted pinot that I've been craving? Well, Psalmsation's expert team seeks out incredible wines from top independent producers. These are bottles that you will not find in stores and on shelves. They aren't mass produced wines. They're handcrafted with care, using pure ingredients and meticulous winemaking. Whether you want a single bottle, a guided tasting experience, or an entire wine club membership, Psalmsation makes it easy to elevate your wine experience. Shop their wines@psalmsation.com jillonmoney that's somsation.com jillonmoney.

B (22:05)

Three judges, one bench, zero room for nonsense. I'm Judge Dan Mentzer. Joining me are Judge Rachel Juarez and Judge Yodit Towelde. And on Hotbench, we don't just hear cases, we take debate. What she's asking for is for the payments that she made on his car. But there's still payments to be made. Correct and we deliver justice. That is the verdict of the court. Follow and listen to the Hot Bench podcast on the free Odyssey app or wherever you get your podcasts.