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Money Matters , the podcast that focuses on how to use the money you have , make the money you need and save the money you want . Now here is your host , ms Kim .
Chapman , welcome to another edition of Money Matters . I'm your host , kim Chapman . Today's episode is all about increasing your financial confidence and achieving your financial dreams through practical and personalized financial planning . All right , so we have a special guest with us today , mr Jason Knapps . Jason is going to talk to us about financial planning .
He is a licensed LPL financial advisor . So again , jason , thank you for coming , thank you for joining us , but let's go ahead and get started . I want to know a little bit about your background in terms of what inspired you to become a financial advisor , because it's a little different than what I do .
A lot of times , I get calls that you should have , and you get calls that I should have . So just give us a little information about your background . Sure , yeah .
I started at a local bank , Hibernia Bank .
Hibernia . That kind of dates you ages you Long time ago . Good thing it's audio so nobody really knows the truth , that was a long time ago .
So when I started there I worked in a call center . We basically took in loan applications . We opened up checking accounts , things like that , and over time I wanted more , I wanted to grow and I heard about investment services and as a young man I figured , hey , that's pretty interesting Stocks and things like that , investments .
I pursued it and became a junior advisor underneath a senior advisor at the time and from there I went on to other institutions and did a startup at another institution and then neighbors called . At that point I did an interview with Miss Kathy Gill and Dan Robichaux at the time and it's been great since then .
Yeah , so you've been around for a while . So have you been ? I know it says you've been in industry . Is it the industry with 15 years , or has it been just neighbors for 15 ?
I got licensed in 04 . I started working at Hibernia in 2000 and then fully licensed in 04 . Came over to neighborsbors in 2006 . So I've been here since 2006 .
Let's talk a little bit about wealth management . I definitely like that first name , wealth . If we were to do a poll , I'm sure if we said , hey , who wants to be wealthy ? Everybody would raise their hand . But how do you define wealth management and what comprehensive services do you offer under that umbrella ?
So wealth management can be a lot of things Investment services , insurance planning , just trying to achieve what you can the best way you can financially .
I define this wealth may not be the same thing that you define as wealth , but we're just going to try to make the best financial decisions , that we can invest our money properly and grow our funds to the best of our ability .
So what kind of steps do you take to ensure that your client's wealth is managed effectively to meet their long-term goals ?
So what I do with everybody that comes in , the first thing we do is we sit down and we go through a profile . Okay , if you went to the doctor for the time or you haven't been to the doctor in a long time , he's going to ask you just some simple questions what have you been doing ? How do you exercise ? What are your eating habits ?
We do the same thing . So I'm going to sit down with that person and I'm going to get the full picture . I'm going to ask him what type of income do you make ? What type of spending habits do you have ? What type of debts do you have right now ? What have you been doing to save ? Do you save those type of questions ?
Just get a feel for what they're used to and from there , once I have that big picture , we'll send them a questionnaire or we'll talk about risk . Try to figure out what type of risk that they're willing to take , because everybody's risk is different . What you may think is risky , I may say , hey , that's not very risky .
So we all have different views as far as what risk is , especially when it comes to our money , and it doesn't mean that one way is right or one way is wrong . It's just how you feel , and that's really what that first appointment is all about . We don't really talk about a whole lot of products and investments . It's like that .
So , ironically , some of the same questions you say , you ask , I ask , and while they sound so simple as we're talking about them , I know you probably get that deer in the head like oh , what do I make ? Net gross , I don't know . How often do I get paid ? It's amazing sometimes that people are not prepared .
If somebody were to schedule an appointment to see a financial advisor , what types of concrete , maybe tangible , items should they make sure they can bring with them in terms of , maybe , proof of income , check stubs ? Absolutely , because , again , it sounds simple when you say what are you spending your money on ?
And they start looking up at the ceiling or looking at me as though I have the answer . So how can they best prepare themselves for an appointment with a financial advisor ?
Sure , if you really want to be prepared , I would say bring in your most recent tax return , maybe two years back if you can , or even further , whatever you have at hand . But that would certainly help because that tells me a lot . Okay , I can look through those papers and I can see what investments they have , but also most recent check stuff .
That would help as well , because then I can see how much , what percent , they're taking out in their 401k , if any at all . Also , most recent statements on any investment they have . A lot of people will come in and they'll say yeah , I've got an investment with XYZ and I'll ask well , what is it ? Do you know what type of investment it is ?
And nine times out of 10 , they have no idea . Or they'll try to explain and I have to read between the lines . So the more information you can bring in , the better .
You don't necessarily have to bring it in , but any type of statements , any loan documents that you might have so I can get a look at that interest rate , or credit card bills that you might have , just so I can dig in a little bit and see what's going on . Don't necessarily have to bring it in , but it does help . It helps things go slowly , absolutely .
I think it makes a more impactful meeting when you're sitting with someone , because I know that definitely works . In terms of me , it's like the more you can bring in , the more helpful it is . So let's talk a little bit about who are your primary clients , who do you work with and what unique financial needs do they typically have ?
Because when you think of investments , that can be somebody as young as 18 and all the way up to somebody that's post-retirement .
Absolutely . We work with all ages . I've got clients as young as 18 years old and I've got clients as old as 89 years old , so everywhere in between , because we all have different stages of life . But as far as what type of person comes in our office , of course we're a teacher's credit union originally , so naturally we have a lot of life .
We have pharmacists , we have retired Exxon workers , we have carpenters , we have self-employed , we have nurses , so forth . There's probably not an industry I haven't dealt with , so it's very diverse .
I guess you could say , obviously , maybe that college kid or somebody is getting their first time job , and then you have the family that's growing and getting settled . And then I know I get a lot of phone calls that again that I usually have to transfer or shift around because it's that person that's getting ready to retire .
Is there any particular stage of life that you see more often than the other ?
Sure , yes , I would say the number one member that comes in is someone that's probably five years out to retire . That's when people say you know what ? I need to see a financial advisor if they haven't seen one before . That's probably not the most efficient time to come see a financial advisor .
I would love for everybody to come into my office when they're 23 years old , just out of college or just starting their career out of high school or so forth , and say hey , jason , I want to get on the right track , and then we can build that together .
I've been here 20 years now , so I do have clients that I've seen grow and I've seen clients that started off and I look back at their driver's license when they started I'm like , wow , this is fun to see someone progress over the years . So obviously we'd rather get someone early , but that doesn't mean it's never too late .
It's never , ever too late , and I get that a lot . Unfortunately , people that come in and I get it it's easier to come in and save and start saving more once your kids are grown they're out of school , you've got they have their own money and they stop spending yours . That's right .
And then their house is probably close to being paid off , if not paid off . So they have more funds than they've ever had in their life .
And that's when they start really getting serious about SAIT . And when it comes to money such a finicky , funny topic , whether it's investing , whether it's trying to find your financial stability what would you say to somebody that's really apprehensive about coming in to see a financial advisor ?
They may feel like , oh , I don't have two nickels to rub together , why would I go see a financial advisor ? What can they do for me ?
I think that's very important and I think that comes to education . People need to be more educated about their spending habits , how they spend , because it's all relevant . It doesn't matter how much money you make . You can make a million dollars a year . You can make $25,000 a year . It's all relevant how much you spend and are you living within your means .
Do you have an emergency fund built up ? Are you overspending , outside of your means ? And I think that's 90% of the problem out there with people that don't come in to see a financial advisor .
I think they're maybe a little embarrassed because of that , but you got to get that straight and once you get that straight and you get on the right path , you're going to have a good retirement . If you live within your means and if you prioritize your goals , you're going to set those goals and you're going to achieve .
And I'm listening to what you're saying because that's usually a question I'll get Anytime they I do a presentation about money , they always want to know investment and you were mentioning I think you made the statement saying get some of those things in order .
Let's talk a little bit about that in terms of I have individuals that come that are looking just to find their financial stability . They're not able to live . They're not there yet in terms of living within their income . Is that too soon ? Should they not see you before they get to that stage ?
I think you have to get it cleaned up . If someone has a lot of debt out there and they want to invest , you're spending your wills . So let's just say , for example , you have a credit card and you're carrying a $5,000 balance and you don't have an emergency fund , that credit card's probably charging upwards of 8% or more , right ?
Maybe 10 , maybe double digits , right .
Yeah , you should probably go a little bit higher . In spite of the fact that the Fed's just lowered rates , we're probably seeing double digits .
And chances are they may not have very good credit . So it's probably higher than that . So it's very hard for me to get a double digit return guarantee OK . So why would we waste our time trying to invest when we're already losing over here on this ? So we have to clean that end up first .
It's really important and , don't get me wrong , nobody can live debt free . That's impossible these days . I know we have a lot of shows out there like Dave Ramsey and so forth . They want you completely debt free . That's very fairytale land for me . But credit card debt , that's dangerous .
Credit cards have a reason , don't get me wrong , but they can get you in a lot of trouble . You have to clean that up first before we even start talking about investments .
I'm so glad we touched upon it because again , that seems to always be that million dollar question , no-transcript . So let's switch gears and talk about early on , because that's always the goal . If we can catch you young , I believe in youth financial literacy . If we can catch them young and establish those good financial habits , it makes it a whole lot easier .
So what is your professional advice that you would give to someone just starting to take control of their financial future ?
Referring to someone that's starting their first job , correct , yeah . So I would say first of all , sign up for your 401k . I know we have a law now where it automatically signs you in , but don't opt out . Sign up and a lot , and I say this in every young class that comes in through neighbors .
When you're young , usually it takes you a few jobs to figure out where you're going to fit in .
So it's very important when you do switch those jobs , take care of that 401k when you do swap back and forth , Because a lot of times what I see is they have that gap , so they'll all right , I'm changing jobs , but I'm not going to start this one for about two more weeks or three more weeks , so forth .
What are they going to do to survive during that three-week period ? They got this 401k money . A lot of times they cash it out , pay the taxes , pay the tax penalty and so forth . I think that's the biggest thing for young people . Try not to do that . Try to have that emergency fund built up .
That way , if you do have that gap , you've got those funds that can hold you over and you can roll that 401k into your new 401k . Let that snowball begin , because that's when it's important . Once that snowball starts , it gets bigger and bigger and bigger . It gets bigger and bigger and bigger .
So what are the benefits ? You're touching on a little bit Because , like you said , try not to cash in that money . I guess we need to wonder I almost want to reiterate , the penalties , the taxes that individual has to pay , that sometimes they don't realize they're looking at .
Oh I could , I can have this money now , I can go on vacation for two weeks before I start my new job . But can you maybe expand a little bit more on the advantages of rolling that money over ?
People ask me like how do I grow my money ? What's the biggest way ? And people always think what rate can you get me ? What return can you get me ? What investment can you get me ? That's important , don't get me wrong . That is very important . But the biggest growth of your money is time , time , say that again Time .
So the less time you have , the less your money is going to grow . The more time you have , the more it's going to grow . And it's very important when you're early . If you can start that snowball while you're young , it's time is going to make that thing grow , no matter what the interest rate is . That's the most important concept is time .
So what are some key elements of a solid retirement plan and how do you help your clients prepare for retirement ?
Well , a solid plan is someone that starts early and prepares and knows exactly what they want . A lot of people come in and they want to save , but they don't really know what their goal is . What is your goal ? I want to retire , we all want to retire right , yes , tomorrow . Exactly how ? Do you want to retire ?
Do you want to make more than what you're making now ? Do you want to make less ? Do you want to make ? You have to have that goal and it has to be realistic , and that's what makes it solid . A lot of people they don't really think about it . They think I have social security that's going to take care of me . That's only a small part .
So you have to have a plan . You have to say am I going to invest in real estate ? Am I going to use that real estate as a source of income ? Am I going to have a 401k ? Is that going to be another source of income ? Planning is very important and having that goal .
You'd be surprised how many people come into my office and they really don't have a goal .
I wouldn't be surprised .
But their goal is I want to make money . That's pretty obvious . You wouldn't be in my office if you didn't want to make money . But what is your goal ? So that's setting those goals and I can help you get to those goals and I can tell you what it's going to take to achieve those goals . And sometimes they say that goal is not achievable .
Okay , and that's fine . But let's see what is achievable , let's see what you can afford and let's try to work with it . And now we know what to expect so we won't have any surprises 10 years down the road , 20 years down the road .
Yeah , you're absolutely right , though they do a lot of times , like I said , the goals may be very general . I want to be debt free . Let's start with paying off your first credit card . Let's start with building an emergency fund and then seeing what's feasible , what's really realistic .
So how do you address concerns clients may have about outliving their retirement savings ?
There's a lot of things you have to consider to not outlive your savings . It goes back to that goal question what do you want during retirement ? And also you have to address life expectancy .
It's not a topic we want to talk about , but you know how your health is , you have an idea of what diseases you're prone to through your family history and so forth , and do you have longevity in your family and that sort of thing . What type of lifestyle do you live ? I have some clients .
They'll come in and they'll say you know , my mom's 95 years old , she's still alive . You might want to plan Good news , bad news , good news , bad news . That's right . You're going to live a long time , likely , but you better have a lot of money saved up because it has to stretch a lot further .
So you have to consider those factors and also , what percentages do we want to withdraw from our assets ? And that's those conversations that a financial planner can help you with . That's the kind of questions I answer all day , every day .
And just on that note , you know we're saying you want to make sure that they have enough and it's and this is probably a question maybe you can't even put into perspective but it's like , how do we stress how much is enough ?
I remember doing an exercise in a class where we look at maybe half a million dollars and we look at a person that's going to live to be 92 past retirement .
That gives them about 25 years and when you do the math on that on half a million dollars , I think it comes out to about $1,067 or something a month that they would live in , have to live on for retirement . And somebody may say , oh , in one point in time a million dollars was a lot of money .
It sounds like a lot of money , but is there a number that you could even put on in terms of bare minimum that somebody should be striving for in terms of retirement ?
Yeah , yeah , look , I use that same situation when everybody comes in . Because it's easy math . I use a million dollars . So a million dollars is very simple to comprehend and it seems like a lot of money . But you're right , today's day and age it's not a ton of money . You have a million dollars and you want to retire early .
Okay , depending on life expectancy I'm just throwing raw numbers out there you can expect about a $50,000 a year income . If you retire early . You might be able to stretch that to 60 , maybe 70 , but now you start risking outliving your money . So that's the things you have to consider .
So somebody may come to me and say $50,000 , I make $80,000 right now , or $60,000 right now . I can't live off of 50 . Maybe we need to plan more . I think that's a good starting spot and everything's relevant .
So if you're making $30,000 a year , $40,000 a year , chances are , if you're young , when you retire , you're going to be making a lot more than that . Right , you're going to be making inflation and everything else . Just , your job in general is going to go up over the year . So you got to plan for that as well .
So for someone that's 20 years old right now , or 30 years old right now . A million dollars . That'll go like that in 30 years , right .
So , keeping in mind with that , what are some common misconceptions that maybe you have to deal with and how do you handle them ? And I'll just give an example . We were talking about OK , maybe you're going to have $50,000 a year to live off of .
That might be OK today , because somebody may be saying , oh , I'm going to have $50,000 a year , that may work today , in 2024 . But if you're not going to retire for 10 years or 20 years , $50,000 may still keep you in the soup line .
So what type of misconceptions do you typically face when somebody is saying , oh , I don't need this , or what type of barriers do you have to help them overcome ?
It's easier today than it probably was three or four years ago , because three or four years ago our inflation was roughly under 3% , so people didn't see it as much . Older people saw it , but younger people really don't . They didn't get a grasp of it .
Now everyone is getting a big taste of what inflation is and what it does to your money Vehicle , for example . Today you're not getting nearly the same vehicle that you were , say , five or six years ago at the same price . A $30,000 vehicle today doesn't give you very many bells and whistles , right ? No , it does not .
But five years ago you could pretty much get any kind of vehicle within range for leather seats , everything else , the whole nine yards , the dollar stretched a little bit further . That's right and that's real and that slowly happens over time . Slowly happens over time Usually . We just got into a situation after COVID where it increased tremendously .
But I think that it's easier to have that conversation now than it probably was before COVID , because it was more of a silent killer of your money , Whereas now it's in your face killer of your money .
I know , of course , interest rates have a lot to do with investments . I'm not sure when this is actually going to air , but I know that it was just this week that the Fed dropped rates , and so for people that are savers , that's not really good news for us . But how does that impact individuals that may be listening ? Oh , are rates dropping ?
Should I run and run fast to hurry up and throw my money into some types of products before rates start to drop ? How would you address ?
that you have to have different strategies for different purposes . If it's your safe money , of course that's the area you're speaking of your CDs and savings account rates , things like that . That bucket of money yes , those rates are going to change . They're more than likely going to go down , and hopefully they do and they stay down .
But that means the economy is doing well . But you have to have your money diversified . You have to have other areas so that you don't have to strictly worry about interest rates . That's why it's important to see a financial advisor Make sure that you're .
I don't want to make the assumption that you should never have CDs , but you shouldn't have all your money in CDs . That's not very diversified .
So let's talk a little bit about diversification , because you hear that all the time . That's probably the one question that I can ask at a presentation what does diversify mean ? And people say , oh , to have your eggs in a different basket .
Talk a little bit about what diversification really means and how important it is when we're talking about investing or preparing for retirement .
Sure . So I'll have people come in my office all the time and they'll say , yeah , I'm pretty diversified . I don't like to put all my eggs in one basket . I've got three different advisors , I've got you such and such . So I say I would like to see those statements . Let's really compare to see how diversified you are .
And then I look at the statements and all three advisors are invested in the same mutual funds . That's not very diversified . So I think people have the misconception of diversification . It's more of making sure we hedge our bets . Certain sectors are going to do better at certain times bond sectors versus stock sectors versus large cap , small cap , cds , so forth .
So it's good to have a good range of everything . Now your risk is going to determine how much , what percentages and so forth that we put in each of those sectors . But you should be diversified .
You should make sure that you're not counting on just this one specific investment to reach your goal , because it's probably not going to happen if that's what you do .
In a meeting . How technical do these terms get ? Should I bring a thesaurus with me ? Is I try ?
to make sure you understand what we're talking about and make sure I'm not talking over your head , because I think it's important that I know . If you're a pharmacist and you come into my office and you start talking about this drug interacts with this drug and so forth , and you shouldn't take that , I don't know what you're talking about .
I don't do that every day . I just tell me what pill to take and I'm going to take it . So I understand when someone comes into my office , they don't really do this every day and it doesn't mean that they're ignorant . They just don't do it every day and that's OK . So I try to bring it to a level where they'll understand .
And if they want to go and get into the weeds , I'll get into the weeds . But if they don't and they want just a broad overview , I try to keep it as broad as I can .
Keeping in mind that we have a broad audience and we'll definitely get your contact information for our local folks . But for somebody that's not local to Louisiana or they're looking for a financial planner , what are the qualities ? What should they be looking for ?
Because I know that you want to get somebody , obviously that's trustworthy , but you can't necessarily just look in the yellow pages of Google and discern that information . What should they be looking for in terms of picking out a financial advisor ?
I'll just tell you this 90% of the financial advisors out there are looking for the best interests of their clients . Unfortunately , there's probably 10% out there that are looking for the importance of their self , and I think it's important . Though , when you go into an office , we all of us financial advisors pretty much have the same tools .
Okay , now , we might have different strategies they may differ a little bit as far as I think you need to go into this versus that and so forth but they're pretty close to the same and we have the same tools available . I think the most important thing when you sit down with an advisor is can you relate with that person ?
Is this somebody you want to do business with ? Because this isn't just a one-time fix . This is a lifetime commitment that you're going to be working with this person for a long time , and I don't want to work with someone I don't like .
So you need to make sure you can relate to that person and , on your gut , if you're speaking with someone , if you have a good feeling about them and that you can do business with them , and if they're trustworthy . So I think that's important but also to ask around . You don't want to know .
Someone's a really good salesman and he can tell you everything he wants to hear . He might be one of that 10% that isn't looking out for your best interest . So ask around . Have you worked with this guy ? Have you worked with , have you heard of this guy ? What's your impression of him ?
But I think , ultimately the biggest thing and I tell everyone that comes in my office they tell me they're shopping around . I said that's great . Just make sure , whoever you go with that you're comfortable with and that you want to work with . No-transcript would recommend , if you are dealing with a financial advisor , check their record .
Go to the FINRA website , see what their history is , see how long they've been in the industry . Where are they job hoppers ? Have they been to one place ? Or have they jumped around to different firms and so forth ? And why is that ? Ask those questions . Why have you moved 17 times in your career ? Or why do you have all these complaints ? And the complaints ?
If someone has been reported , it's going to be listed on that site , so you'll know if they have issues or not know if they have issues or not .
Awesome , all right . So what's the one final piece of advice you would give our listeners who are just starting out on their financial journey toward financial independence and they're looking to build a healthy future in retirement ?
I think you need to at least schedule you an appointment with a financial advisor .
Talk with them , go see multiple financial advisors , get a feel what's out there and you're going to find that most of us probably think alike and then just find that person that you connect with and , if you like that person , I would recommend following their advice or at least getting started .
And I know there's somebody out there thinking do I have to pay for this initial consultation or to meet with you , or to meet with any financial advisor ? What should I expect ? I know it's going to vary , maybe , but let's talk about neighbor's wealth management .
A neighbor's wealth management . We don't charge for that initial appointment . Okay , but there can be fees depending on what you do . Okay , so , and we'll discuss that . It'll be full disclosure Certain products have certain fees that cost for you to get in . Some are ongoing fees , but we'll disclose all of that .
But to come in to sit down to have that discussion of are you on track , that sort of thing , we're not going to charge for that . There's no fee for that .
You shared a lot of good information . I'm so glad that I was able to force you to come on in here and sit down with me .
I know you're busy and we didn't really I didn't really have to break his arm to get in , but you've shared a lot of good information and I know , at least for our local partners or local members , they definitely may be interested in taking this conversation a little bit further . I know I'm going to have you come back .
As a matter of fact , I'm going to have you sign a contract saying you're coming back before you leave , but in the meantime , how can you be reached ?
Sure they can reach us online , wwwneighborswmcom , or email me at jason at neighborswmcom . Or they can call or text . Office line is 225-819-5790 . Call , text , email . Any way you can get in touch with us . Or you can call the credit union directly and someone there can get in touch with us .
And one last thing what type of appointments do you set ?
Virtual in-person phone that's right , yeah , yeah , sometimes I know we're all busy and a lot of people don't want to come in , and that's fine . We can do a virtual meeting if they want , and we can also just do a phone appointment just to talk about . Actually . I had a phone appointment yesterday . Went really well . Any kind of way is fine .
Eventually we'll have to meet face to face and I would hope they would want to meet me face to face .
Again , thank you so much for coming and sharing this information , really appreciate it and we'll have you back really soon . Thank you .