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Travis Makes Money
INTERVIEW | Make Money by Building Wealth That Lasts for Generations with Andy Baumann Lustig
00:25:41
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- [00:02]
FX The Bear Promo Voice
I'm not giving up.
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Andrea Bauman Lustig
I am selling the building.
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FX The Bear Promo Voice
The final season of FX is the Bear.
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Andrea Bauman Lustig
The restaurant is flooded. Everything's either gonna be okay.
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Venmo Ad Voice
No.
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Andrea Bauman Lustig
Stop. Or not.
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Venmo Ad Voice
We are outgunned and we are outmanned.
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FX The Bear Promo Voice
But we have each other. FX's the bear, the final season, all episodes now streaming on Disney plus.
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Podcast Host Intro (Travis)
You're listening to the Travis Makes Money podcast presented by GoHighLevel.com for a free 30 day trial of the best all in one digital marketing software tool on the planet, just go to gohighlevel.com travis.
- [00:43]
Travis (Podcast Host)
What's going on, everybody? Welcome back to the Travis Makes Money podcast, where it's our mission to help you make more money on this episode of the show. I have a new friend. Her name is Andrea Back Bauman Lustig, but she goes by Andy, so I'm going to call her Andy. She's the author of Legacy on the Line. As a managing partner of Fisher Strelum Advisors, a wealth management practice within Hightower Advisors, she's been recognized as a Forbes Top women Wealth Advisor Best in state for numerous years. 2022 to 2026. Andrea brings deep experience in wealth and investment management to help clients create lasting legacies that reflect their values and their vision. Super stoked to have her on the show today. Andy, what's up? Welcome.
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Andrea Bauman Lustig
Thank you so much for having me. I love listening to you talk about me. That sounds good.
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Travis (Podcast Host)
Yes, ma'. Am. I do my best. I do my best. I appreciate you taking the time, Andy. Obviously you built yourself an incredible career within the finance and wealth building space. But I want to know where this all started. So tell me the first time that you ever made a dollar that really excited you, that, that, that shocked you almost where you're like, I cannot believe that I'm getting paid to do this.
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Andrea Bauman Lustig
Well, I was shocked by my first paycheck, which, you know, now was probably something like $18,000 ages ago. I thought at this on one hand, I thought it was so much money, I couldn't believe anybody was paying me to do something I would have done for free as an internship. But also I couldn't believe how expensive it was to support myself. So, you know, it was a double, dual edged sword.
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Travis (Podcast Host)
Where were you based at that time?
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Andrea Bauman Lustig
I had just started at Morgan Stanley in mergers and acquisitions.
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Travis (Podcast Host)
Okay, so this is like right after college then?
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Andrea Bauman Lustig
Right after college. Right.
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Travis (Podcast Host)
What made you want to go into the financial space?
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Andrea Bauman Lustig
Well, believe it or not, I thought I wanted to be an international diplomat. My father was born in France and I had traveled a lot as a result of that. And my dream was to one day be ambassador to France, which now I realize would never have happened. But then I was able to get internships in a bunch of multilateral organizations, oecd, undp, where I thought I could help save the world. And the pace was just so slow. And nothing felt to me like it was getting done quickly enough, so I had to pivot. And that's when I pivoted to the private sector and I tried mergers and acquisitions, fortunately, at Morgan Stanley.
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Travis (Podcast Host)
And did. Did you do this all post college or did you, like, switch your major in college?
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Andrea Bauman Lustig
All those internships were in college, and then the pivot was post college.
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Travis (Podcast Host)
Okay, got it. So you almost accidentally ended up here just because you had a few internships that taught you that the thing that you thought you wanted to do is probably not the thing that you were meant to do.
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Andrea Bauman Lustig
Yeah. I mean, I will also say that in the back of my mind, I. I had. I knew what my father did, and he was the fifth generation, and I'm now the sixth generation to be in wealth management and wealth enterprise.
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FX The Bear Promo Voice
Oh, really?
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Andrea Bauman Lustig
But we were two things. We were never allowed to talk about business at the dinner table. So it's not like I grew up fluent in the language of finance or fluent in understanding what his business did. I was a young lady, and one simply in those days did not talk about business at the table. And the other thing was I would never in a million years have wanted to join him, which I never thought about, frankly, at the time. But I would never have wanted to join him without being able to stand on my own two feet. So I needed to go and explore and figure out what my purpose was before I did anything with it.
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Travis (Podcast Host)
That's also what I love about the idea of internships. It's really not even. It's not even just practically internships. It's basically for any young person the ability to just go. Go out and try things without. Without the pressure of feeling like you have to be successful in this thing or you have to take this path that your parents or your teachers or your coaches or your mentors or your culture forced you to think that that's what you should be doing. You just. You're not. You're not going to know. You're not going to know until you go out and do the thing. You can study it all day long, but then day one, you're going to get more information and more valuable feedback on your first day of actually doing the thing than you will by five years of studying in school. You know.
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Andrea Bauman Lustig
You know, I used to coach people on job interviews. And I would say there's really one question that the person has for you is what led you to be sitting opposite me today? And why do you want this job? You know, what makes you qualified? How'd you get here? What was your critical path and what makes you qualified? And I used to tell them that it was just as important to share the mistakes they made along the way and what they learned from those mistakes and. Because that's how the path is formed. Not just by making the right decision, but sometimes by making the wrong decision and learning from it.
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Travis (Podcast Host)
Yeah. And it's also something that everybody has done. Like everybody's made mistakes, everybody's done things incorrectly. And so if you, if you try to make it seem like you've never done those things, then it's almost like, oh, you get a point docked here because you're not being honest about this. Because I know you've failed.
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Andrea Bauman Lustig
You don't come across as authentic.
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Microsoft Windows 11 Ad Voice
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Andrea Bauman Lustig
And that's, that's the kiss of death.
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Travis (Podcast Host)
Yeah, absolutely. So, okay, so back into your, your career now. So first paycheck ever was $18,000?
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Andrea Bauman Lustig
Yep.
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Travis (Podcast Host)
I mean, it's pretty substantial paycheck. What was it for? You landed a client or something like that?
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Andrea Bauman Lustig
No, no, I just was in full time analyst in mergers and acquisitions at Morgan Stanley. Wow. And it may sound like a lot, but I pulled more all nighters there than I had ever pulled anywhere in my life. And we worked regularly, worked 80 hour weeks. So the.
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Travis (Podcast Host)
You earned it.
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Podcast Host Intro (Travis)
Yeah.
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Travis (Podcast Host)
You earned every dime of that.
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Andrea Bauman Lustig
Yeah, definitely.
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Travis (Podcast Host)
Okay, so. So tell me, tell me how you felt when you had the realization that the 18,000 was just not that much money. Right. Like that's a, it's a, I mean, it's a big paycheck for anybody who's in their early 20s. But then you start doing adult stuff and realizing that, well, this is like, where did all the money go? It's vanished, it's gone.
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Andrea Bauman Lustig
Right. At some point after I had pulled so many all nighters and everybody was sort of commiserating about working 80 hours a week, I realized if I calculated it, it wasn't very much money per hour. But on the other hand, I would have worked for free because I loved what I was doing and I wanted to be there. And I thought it was so cool to be in the thick of things that you read about in the papers. And it was a fabulous job.
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Travis (Podcast Host)
What a part. What, what Part about it did you really enjoy the most that made you go? I would work. Like working 80 hours for free is a crazy thing to be willing to do, but obviously there was something about it that made you feel a certain way. What was that?
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Andrea Bauman Lustig
You know, what I really learned from that job, and just looking back over everything that motivates me is that I like to solve problems, and I'd like to solve problems for other people, and I like to solve problems for myself. But I've always liked jigsaw puzzles and I like being of service. And in a way, we were. We. We were doing a lot of analysis to figure things out, and that's. That's what was fun. Yeah.
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Travis (Podcast Host)
So where did you take your career next after that, and why?
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Andrea Bauman Lustig
So I went to business school after that to get a broader base grounding in economics and finance. And there I had a summer internship with a management consulting firm, Booz Allen, and I ended up getting an offer, and I stayed there for 11 years. And that was a problem solving job. We were solving major questions for America's largest corporations. And the. The industry changed, the team changed, the nature of the problem changed. I loved that. But then when I realized that maybe I could be doing it to help families, I moved over to Sanford Bernstein, which is a wealth management company. And that's where I began to really learn about wealth management. And I did that for five years. And that's after that I joined my father's company. And I felt like I could stand on my own two feet and contribute and add value. And I was there. And I got to work with my dad for 10 years before he died in 2012. And then his partners looked around and said, no, no, no, you're going to be president of this firm. You're the future. And then I became president of Strehlum. And finally, in 2020, we merged with Fisher and joined the Hightower platform. And now we're Fisher Stralom Advisors.
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Travis (Podcast Host)
I mean, congrats to you on all the success. Congrats to you on the early realization and awareness to think about the idea that you wanted to make sure that you could do this on your own without your dad's help at the beginning, and then being able to come back, you know, almost two decades into an illustrious finance career yourself, to be able to join him, work with him for a decade, and then for the partners of that business to recognize something in you to the degree where they ask you to be president of the organization. So many cool parts in that story, indeed. I thank you for sharing some of that.
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Andrea Bauman Lustig
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Travis (Podcast Host)
NA for anybody listening, can you give just like a quick overview on what the day to day of a wealth manager looks like?
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Andrea Bauman Lustig
You know, I'll give it to you in a nutshell, which is I work with people who have done the hard part. They've either built businesses or are building businesses or have worked to accumulate wealth. And my job is to help them grow it, protect it, and pass it on. And that often involves opening their eyes to things they may be missing. That's the challenging part. But again, every client is different, every situation is different, every problem is different. And that's what keeps me motivated and it makes it so much fun.
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Travis (Podcast Host)
What are some principles that work for each stage of wealth building? So I know you're mainly working with high net worth individuals, but for anybody that's listening to this who's just kind of like, they want to start thinking more about their financial future, they're not exactly sure, like, what they should be doing or where they should be putting their money, can you kind of break down a few of, like a few of the core principles that you think apply regardless of if you have a hundred million dollars or if you have, you know, 10,000?
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Andrea Bauman Lustig
You know, let me just go back to saying my clients are very busy. Usually they're building and growing businesses. And my job is, is to make sure that what they're building and growing lasts.
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Travis (Podcast Host)
Yeah.
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Andrea Bauman Lustig
So people are focused. I think of it in three phases. There's sort of an accumulation phase. And then we all think far down the road, will I be able to support myself in retirement? And in general, people think if they have good returns and good documents and good intentions, it's going to be good enough to protect their legacy. But when you turn and face wealth transfer, it turns out you need different skills. And the earlier you can back the truck up and build those structures in, the better off you're going to be. So core principles are reverse engineering that path. It's making sure that the accounts that you have, every account you have is titled in a manner that gives me clues as to how it's going to be taxed and how it's going to be able to grow. So when you work with somebody who can guide you, you're going to learn to balance your assets between taxable accounts and tax deferred accounts so that the tax deferred accounts can grow compounding on a tax deferred basis.
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Travis (Podcast Host)
So, and real quick too, can you. Sorry to interrupt. Can you define tax deferred?
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Andrea Bauman Lustig
So a tax deferred account means you don't have to pay taxes on it. Now it's an IRA or a 401k or a SEP IRA if you have a small business or a 403b if you're working in a hospital. Any account where you're contributing to it and it is growing and you don't have to pay taxes, income taxes on, or capital gains taxes on what's going on inside that account. Those are tax deferred accounts and other accounts are taxable. You have to pay taxes on the income or if you sell a security on the capital gain that's inside them. So core principle number one is looking at the structure of your wealth and trying to identify what your goal is there. Is it to put, try to get more into tax deferred? Is it. Try to accumulate more in taxable. There are different strategies for how to allocate your wealth in those accounts and there are constraints on what you can do.
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Travis (Podcast Host)
Yeah, I was going to say. Sorry, I was going to say there's limitations on what you can put into tax deferred accounts on an annual basis.
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Andrea Bauman Lustig
But you know, if possible, you want to try to maximize your contributions to your tax deferred accounts.
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Travis (Podcast Host)
Real quick, this is a question that I've had for a long time and I'm so sorry I keep interrupting you, but I have so many questions for you. Is it on A tax deferred account. So basically you're, you're getting away with not paying income tax on the money that you're contributing to that account. Now today, it takes it away from your tax liability at the end of the year. But then when you pull the money out of that account, would you not end up paying more of a percentage of taxes because of the wealth that's accumulated in that account over that period of time?
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Andrea Bauman Lustig
No. And let me explain two things. First, you get, before I get to your exact question, you get the benefit of earning returns on a bigger base because you haven't sliced off a piece of your account and given it to the tax man. So the account is growing faster on a bigger base over time. Then when you go to take it out, you're absolutely right. Then taxes have to be paid, but you aren't required to take out but a small, tiny piece of it every year. So you have a required minimum distribution. Could you take out more? Absolutely. And would you have to pay taxes on that? Absolutely. But by then you may have accumulated enough wealth in other areas such that you only have to take the required minimum distribution. And if you're now in retirement, your tax bracket may be lower. So it's almost always a great idea to try to funnel as much as possible into any retirement account you have access to.
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Travis (Podcast Host)
So, so you're paying income tax on that money, not capital gains tax.
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Andrea Bauman Lustig
Correct. You don't, you are in anything that's being sold inside the IRA to give you a distribution you're not paying capital gains tax on. You're paying income tax on the portion that you take out. And what's more, now we have Roth IRAs there. You're contributing after tax money and that's growing tax three until you take it out. So that is a fantastic option for many individuals. But thinking these different options through is really something that needs to be done with an advisor to help you understand all the implications.
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Travis (Podcast Host)
Yeah, yeah, okay. Sorry. Okay. I cut you off too many times. So that was step one. What's step two?
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Andrea Bauman Lustig
Okay, so step two, now you have these taxable accounts, you have tax deferred accounts. Maybe you have something you've inherited from a parent, you have your business, it's in a different account. Now the question is, what is the goal for this money over time? What are your needs? What are you going to have to draw down over time to support your lifestyle? What are you going to grow? And how much risk can you stomach along the way? And have you built in inflation and have you built in taxes. And so what we do is we take this and we model different investments allocations for you. And this is what you want any advisor to do for you. If I'm, am I 60, 40, 60% in stocks, 40% in fixed income. What if I was willing to take on more risk, 80, 20, what if I'm not? And I just want to be very, very cautious. We have terrific models today that allow you to sort of pre experience how your wealth can grow over time. And once you do that, you begin to see opportunities that you would never have seen before. So core principle two is you're going to pick an asset allocation as a result of looking at these models. And core principle three, you're now going to populate your accounts. Let's say you've picked 70% in stocks and 30% in fixed income. Now you don't want to be 7030 in your taxable account and 7030 in your tax deferred accounts. That's suboptimal. So you work with an advisor who helps you roll all the way up to that 70 30, but will most likely have more of the fixed income in your taxable account and have more of the growth in your tax deferred account. And so these are all bedrock principles to building wealth. But all of that growth accumulation, retirement planning changes when you start to now put the veil of transferring that wealth one day over the package we've just talked about. So you're an entrepreneur and you think, hey, listen, don't talk to me about wealth planning. If I grow my business as much as I can, I'll deal with wealth planning in the future. That's one of the blind spots in my book.
- [19:49]
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- [20:47]
Andrea Bauman Lustig
it's early on that you have the opportunity to set up stream structures that will enable you to both grow the business more effectively and transfer wealth to your spouse, to your kids for your own retirement much more effectively. So the earlier you begin to think about the legacy, the smarter you're going to be and the better it's going to turn out for you.
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Travis (Podcast Host)
Can you talk about your experience or lack thereof with insurance products? Have you, do you, do you use these at all? Are you kind of like a term and then invest the rest type of person? Is there use cases for, you know, shielding money in whole life policies or iuls or any of these other fancy insurance products.
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Andrea Bauman Lustig
So Travis, you asked me about six questions there. So let me, let me, let me grab onto one. Insurance is very important for risk protection, not so much for an investment product, although it can be both. And so what you want to do is you probably, as you're starting out, are going to buy term insurance to cover your, to replace your income for your family if you need to. You know, if, God forbid, something terrible happens to you and then over time you may actually convert that into a whole life policy and have a long term care option in it and an investment option in it. But there again, if you're just doing this on your own and not bringing your insurance agent into the wealth management conversation with your wealth management advisor, you could be missing an enormous opportunity. So what many of my clients do is create what's known as an irrevocable life insurance trust. That trust, an ilit, owns the insurance policy. So when the death benefits are paid, they're paid to the trust which is outside your estate. You may not realize it now, but by the time something happens to you, you may have a very large business and you may have an estate tax problem. The last thing you want are for the death benefits to flow into your estate and be cut in half by estate taxes. If they're owned in this outside trust, they are not part of your estate and they flow to your beneficiaries who can use them either to pay estate taxes or for inheritance purposes. So yes, of course we involve insurance in everything that we do. But look, what I say to people is think about when was the last time or when have you ever sat around the table and had your investment advisor, your estate planning attorney, your accountant and your insurance agent and you all around the same table? Because if you haven't done that, you could be leaving many, many opportunities untapped. And the earlier you do that, the earlier you put a great structure in place, then it can go on autopilot and the better you've protected your legacy. I mean, we work with entrepreneurs who, you know or or people have built brands and and have never realized that they actually have a real business. And if they haven't seen an estate planning attorney and haven't put all this into place, if something happens to them, their assets are tied up in probate forever and ever and or not ever and ever but for a long time and may not flow the way they would have wanted them to flow. So take your legacy seriously as early as you possibly can.
- [24:23]
Travis (Podcast Host)
Legacy on the Line is Andy Bauman Lustig's book that she wrote to talk more in depth about all the things that we've been sort of discussing here on the podcast today. And of course, if you are curious about working with Andy and her team, if you're listening and you are a high net worth individual that wants a good wealth manager, Andy, where can people go to connect with you more?
- [24:45]
Andrea Bauman Lustig
Go to fisherstralem.com, go to legacyonthelinebook.com and both of those websites will lead you right to me.
- [24:52]
Travis (Podcast Host)
Fisherstralem.com that's F I S C H E R Fisher Strahlum S T R A l e m fisherstralem.com Go check out some of the stuff that Andy and her company are working on. Andy, I appreciate you taking the time to come on the show and share some of your wisdom with everybody listening. I do not take your time for granted. Everybody else that's listening, remember, money only solves your money problems, but it's usually easier to solve the rest of your problems when you got some money in the bank. So let's start there here on the Travis Makes Money podcast. Thanks for tuning in. Catch you guys next time. Peace.
- [25:23]
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