Author and Financial Planner, Marissa Greco-Reale Author of Bottom-Up Wealth
Your Host for the show is Floyd Saunders, Founder of Really Simple Investing.
Floyd's Book, Five Paths to Wealth.
Follow Marissa on her website. Greco-Nader Wealth Navigation. https://www.greconader.com/Marissa-Greco.e1007259.htm
Marissa on Facebook. Marissa on Youtube
In this interview we talks about the value of long-term investing and then we start the interview with Marissa and her six-step prosperity plan from her book Bottom-up Wealth.
Marissa is a licensed financial planner and we talked with her about her book and her six-step prosperity plan.
In Marissa’s book, Bottom-Up Wealth, she says anyone can become wealthy, but not everyone can maintain that wealth. You ready need a plan for that.
Step one is talking care of Risk Management. Which is taking caring of your insurance needs so you have protection. For Marissa, insurance should be insurance and investing should be investing so you have control over your money. If you don’t have risk management in place, all of the other stuff doesn’t really matter.
Step Two is Cash Flow Planning. This is about understanding what is coming in and what is going out, using what she calls reverse budgeting which is hitting your savings goals first. When you use a reverse budgeting, you can then enjoy some of your money because you have hit your retirement and savings goals.
Step Three is Investing Planning. When it comes to investing, Marissa watches what millionaires do and she follows that. Marissa favors mutual funds because it comes with professional fund managers that can actively manage the fund for you. It important to understand each person’s situation and plan for that situation.
Step Four is Retirement Planning. Talking about retirement planning. For many higher income people, a Roth is not a great option. But if you are in a lower tax bracket a Roth might be better.
Step Five is Proactive Tax Planning. Most tax planning occurs after the fact, making it reactive. Marissa favors proactive tax planning so you can decide if it is better to take tax deductions now or in the future.
We wrap up with talking about Step Six estate planning and the need for a will and perhaps a trust to help make sure your money goes to heirs you want to get money and/or a qualified charity.
Learn how to make investing simple for anyone and get on a path toward wealth.
Author and Financial Planner, Marissa Greco-Reale Author of Bottom-Up Wealth
Your Host for the show is Floyd Saunders, Founder of Really Simple Investing.
Floyd's Book, Five Paths to Wealth.
Follow Marissa on her website. Greco-Nader Wealth Navigation. https://www.greconader.com/Marissa-Greco.e1007259.htm
Marissa on Facebook. Marissa on Youtube
In this interview we talks about the value of long-term investing and then we start the interview with Marissa and her six-step prosperity plan from her book Bottom-up Wealth.
Marissa is a licensed financial planner and we talked with her about her book and her six-step prosperity plan.
In Marissa’s book, Bottom-Up Wealth, she says anyone can become wealthy, but not everyone can maintain that wealth. You ready need a plan for that.
Step one is talking care of Risk Management. Which is taking caring of your insurance needs so you have protection. For Marissa, insurance should be insurance and investing should be investing so you have control over your money. If you don’t have risk management in place, all of the other stuff doesn’t really matter.
Step Two is Cash Flow Planning. This is about understanding what is coming in and what is going out, using what she calls reverse budgeting which is hitting your savings goals first. When you use a reverse budgeting, you can then enjoy some of your money because you have hit your retirement and savings goals.
Step Three is Investing Planning. When it comes to investing, Marissa watches what millionaires do and she follows that. Marissa favors mutual funds because it comes with professional fund managers that can actively manage the fund for you. It important to understand each person’s situation and plan for that situation.
Step Four is Retirement Planning. Talking about retirement planning. For many higher income people, a Roth is not a great option. But if you are in a lower tax bracket a Roth might be better.
Step Five is Proactive Tax Planning. Most tax planning occurs after the fact, making it reactive. Marissa favors proactive tax planning so you can decide if it is better to take tax deductions now or in the future.
We wrap up with talking about Step Six estate planning and the need for a will and perhaps a trust to help make sure your money goes to heirs you want to get money and/or a qualified charity.
Learn how to make investing simple for anyone and get on a path toward wealth.
Transcript Marissa Grieco Reale
Follow Marissa on Facebook, Instagram, TicToc and her website. Greco-Nader Wealth Navigation. https://www.greconader.com/Marissa-Greco.e1007259.htm
Marissa on Facebook. Marissa on Youtube .
Floyd (00:00:11) - Thanks for joining the Really Simple Investing podcast. We have a great interview coming up in a few minutes with Marissa Grieco Reale , the author of Bottom Up Wealth, real People Can Build Real Wealth.
But first, be Sure and subscribe, like, and follow the podcast so you don't miss any of the episodes.
At Really Simple Investing, we have several basic concepts about investing that we think works really well for anyone who would like to invest really unsure how to start. One of them is investing for the long term. You need conviction for that. And one thing about our guest today that you'll notice right away is Marissa has conviction about the advice and guidance that she gives to her clients. If you're a long-term investor, and I believe you should be, you can get started in a number of ways. You can research and buy stocks individually and there's lots of really great stocks out there to buy.
Floyd (00:00:58) - Or you could go with a paid advisor like Marissa and invest in actively managed mutual funds. They're really simple approach. Just to start with passive index funds, and we'll talk about that with Marissa. If you don't have time or interest or research stocks and mutual funds, passive index funds is a good way to start building a core investment portfolio with very little effort. In my book Five Pass to Wealth, I discussed passive index funds and offer several suggestions for getting started. Links to my book and Marissa's book will be in the show notes and in the description. So if you want to do further reading, you'll have access to both books. Of course, there are other ways to get started building your wealth. And in upcoming episodes of the Really Simple Investing podcast, we'll be discussing those as we interview more authors of books on investing and other experts on investing, personal money management and financial literacy. We have great interviews coming up in season one of the podcasts.
I invite you to sign up for our newsletter@reallysimpleinvesting.com and subscribe so you don't miss out on any of the interviews. And now let's dig into the interview and learn more about Marissa's six step prosperity plan from her book Bottom Up Wealth.
Floyd (00:02:09) - This is your host, Floyd Saunders, and today we have as our guest, Marissa Greco-Reale who is the author of Bottom Up Wealth, how Real People Can Build Their Wealth. Thanks for joining us on the podcast today, Mar.
Marissa (00:02:24) - Yes, how are you?
Floyd (00:02:25) - I'm great. Now let's see. You're a, a licensed and certified retirement planning specialist and an educator and you do what you call holistic retirement planning as you manage the wealth portfolios of over 300 clients. I understand, I guess you're located in New Jersey, is that right?
Marissa (00:02:43) - Yes, I am located in New Jersey, but I'm working with clients really all over the US so a lot of people virtually as well.
Floyd (00:02:50) – Cool and you've been doing that for about nine years, using your six step prosperity plan. So, let's, dig into that. Let's talk about your book. Let's talk about what you do for your clients and how you help people build wealth. Sound like a plan?
Marissa (00:03:06) - Sounds like a plan.
Floyd (00:03:07) - Ok, so your six point financial action plan, point one. What is that?
Marissa (00:03:13) - So 0.1 is looking at insurance, which I like to call risk management because if you don't have your risk management in the right place, then nothing else you're doing really matters. So, this is really like the foundational stuff you need to get in place. And typically we've all heard about it, right? Like life insurance, disability insurance, health insurance, you know, umbrella coverages, which you may or may not have heard of, there's long-term care, right? There's business liability insurance, there's all different types of insurances, but if we don't have our insurance in place, then all the wealth building stuff we do doesn't matter, right? Because we could build a million dollars, but tomorrow, you know, we get food because we own a business and then that million dollars is gone. So
Floyd (00:04:03) - Or you're an employee and all of a sudden you lose your child because you've been disabled. And you know, you, you're more likely to be disabled in your working career than die. Disability insurance is probably a good idea. Not everybody has it.
Marissa (00:04:17) - Exactly. And also like even with life insurance, if you're working corporately and you lose your job, right, you no longer have life insurance.
Floyd (00:04:25) - In terms of the group life, group life insurance policies, right? So individual policies in addition to group life policy really gives you the kind of coverage that you need. Is that what you're saying?
Marissa (00:04:35) - Yeah, I mean, it's always good to have an outside policy outside your company because you control it. If you don't want to pay it tomorrow, you don't have to. But if you want to keep it enforced and you have a 30 year term, then you keep it enforced, right? So, an outside policy gives you a lot more flexibility.
Floyd (00:04:52) - And when you mentioned term a second ago, are you more of a buy term and invested difference kind of person or do you advocate other kinds of life insurance policies?
Marissa (00:05:01) - I am a buy term and invested difference. I personally like splitting my investing and insurance. Insurance should be insurance. Investing, should be investing. So, I'm always trying to, you know, get the max amount of insurance I need at the time.
Floyd (00:05:16) - I knew we were going to get along. I knew I was going to like talking to you. This is fantastic because a lot of people don't necessarily buy into that idea of buying term and investing the difference, but if you invest the difference over a 20 year period, you're going to have that money for yourself without all of the stipulations that come with a life insurance policy. You know, that all the restrictions. And that's a, to me that's a better approach. Okay. So, your next, your next step in your plan, your prosperity plan is the cash flow planning. So, talk about that for a minute.
Marissa (00:05:47) - Yep. So cashflow is all about what's coming in, what's going out, right? So we obviously need to livey, you know, below our means. We need to avoid something called lifestyle creep, which is as we make more money, we tend to spend more money. And if we can live below our means and we can consistently pay ourself every single month using something called I call reverse budgeting, then we're going to, we know we're going to hit our goals. Right? So, in reverse budgeting, what you do is, instead of paying your taxes and your utilities and your mortgage and getting to the end of the month and then being like, oh shoot, I have no money left to put in my 401k or my IRA or my Roth. What you do is you actually fund your 401k, your IRA, your Roth, whatever it is, your retirement account first from your pay
Floyd (00:06:35) - Yourself first.
Marissa (00:06:36) - Exactly. I'll the first of the month and then whatever money's left over, now go spend that as you want because you already hit your savings.
Floyd (00:06:45) - Right. Of course, for some people budgeting means that there's no money left over, right? and that's a, that's a problem for a lot of Americans because for one thing you mentioned lifestyle creep, but so many people just ha happen to live beyond their means. Cause credit card debt is so easy.
Marissa (00:07:02) - Yeah. I mean the, you know, the, we're sold this American dream and it's like, okay, go take out a $300,000 mortgage, go take out a $50,000 car loan, go to school and take out $200,000 in school loans and by the time you're 35, you now have $700,000 in debt. And so you need to now repay that $700,000 in debt just to get back to zero. And that's just to get back to zero. Right? So I mean, avoiding toxic debt is really important and you know, really trying to build wealth instead of take away, which that does.
Floyd (00:07:38) - So, so describe that term toxic wealth. I mean toxic debt because, that's not something that a lot of people refer to debt as. What's the toxic part?
Marissa (00:07:48) - The toxic part is the interest rate. So, the higher the interest rate, uh, the more toxic its, in my opinion, anything over a 5% interest rate need to pay down as fast as possible.
Floyd (00:08:00) - So that means get rid of credits.
Marissa (00:08:02) - Yeah.
Floyd (00:08:03) - And the average American has over $8,000 in credit card debt regardless of what their income level is. Uh, do you advocate the, uh, snowball effect that
Marissa (00:08:12) - I think whatever method at the end day is going to work is the one you should go with. The one that you're going to stick with? And actually, do I personally like starting with the highest interest rate? Cause that's where the most leading is. Um, if you have a credit card at 20% and then you have school loans at nine, I'd rather get the credit cards gone cause 20% is insane, you know? Correct. So, I really would rather start with the highest. Well it's, listen, if you're going to do the snowball, the avalanche, whatever, you know, winter, uh, anomaly you want to talk about, as long as you're going to get it done, that's what counts. Um, but the more and more toxic that we have, the more bleeding that happens and the harder it is just to get back to.
Floyd (00:08:50) - That feeling that you have when you get out of debt. That's pretty darn amazing. Come. What's the best advice you have for getting people on a point of where they're managing their, their debt and reducing that debt and, and keeping their budgets working for them?
Marissa (00:09:03) - Yeah, again, I mean if you have low interest rates, you can really even leverage that debt. Like I personally have a mortgage, it's not like a 3% interest rate. I'm not that concerned because my extra money is going into investments and trying to earn 8, 9, 10. Right? Right. Um, so I'm leveraging my debt to have extra money to go put in other things and make more money. Again, it's that toxic debt. If that's where you're struggling, then yeah, you really got to focus and you got to get that paid down and off the books because that's going to hurt your finances in the long run
Floyd (00:09:34) - And it makes it harder to start doing the investing. Right?
Marissa (00:09:37) - Oh yeah. When you're, when you have so much debt and that's taking all the extra money, it's like now there's not a lot left to start building one.
Floyd (00:09:45) - So now you're at the point with your clients where you've helped them with their risk management, you've helped 'em with their budgeting, you've helped 'em get out of debt, now they have some money available to start investing. Is that the next step?
Marissa (00:09:57) - It is.
Floyd (00:09:58) - And, and what are your recommendations around investing?
Marissa (00:10:01) - Well, listen, there's all different types of vehicles, right? If you think about it, like in, in actual traveling, you can take a car, you can take a plane. Mm-hmm. , you can take a boat. The question is what one, do you really need and what one's going to get you there in the fastest destination? I hate when people are just like, blanket, you should be in a Roth ira. How do you know that? What's your tax bracket? What's your tax bracket going to be in retirement? There's different stipulations for every single account, right? So, you really need to be working with someone who can help guide you on what is the best vehicle for you and how are you going to get there in the fastest way possible.
Floyd (00:10:36) - And you cover investments in your book. I think that's chapter eight, right?
Marissa (00:10:41) - Yes and I talk a lot. I mean the main principles, you know, I have principles that have been around for decades. I don't try to reinvent the wheel, right? Like I just watch what millionaires are doing and I follow. Um, plus my education will tell me that, you know, one, diversification is key and we know this, don't put all your money in in one basket, right? Like um, and put it into things that have reasonably given you a nice rate of return over the long term. And for most people, there's two things that do that. It's either real estate or the stock market.
Floyd (00:11:14) - So do you help people with doing any kind of investing with options and futures and things like that? Or do you have them just stick to buying stock?
Marissa (00:11:26) - So I personally believe in mutual funds. Mm-hmm. . And the reason I believe in mutual funds is because you have to understand there's money managers managing these mutual funds and these money managers for eight to 10 hours a day on your behalf are deciding should I put Apple in? Should I put Walmart out? Should I put in Netflix? Right? So they're deciding what stocks to choose. They have teams of people who are helping them make decisions. They have a lot more money than me and you put into tech, into systems and all this stuff to decide what stocks to be buying. And not to mention they can get meetings with CEOs that you know mean and you can't. Cause we're not managing billions of dollars per apple. Right?
Floyd (00:12:05) - Yeah. One of the things they do is they go out and they kick the tires at these companies, actually visit the companies and talk with managers. Exactly. And walk the factory floor, make sure that the products are being produced and shipped out the door and, and being sold. Right.
Marissa (00:12:18) - Exactly. That's my point. So, this is a problem in America is that you have this like new generation who's trying to be the money manager, but yet they have a nine to five, yet they have no education, they don't have teams, they don't have more money, they can't get meetings with CEOs and so they're trying to beat the money managers and it's never going to happen at the end of the day. You can try all day long, but it's not going to happen. Mm-hmm. . So why go through that whole process and stress yourself out, put your money consistently on a monthly basis into diversified mutual funds and buy the entire market. That's my strategy.
Floyd (00:12:54) - Uh, when you say buy the entire market, are you referring to the s p 500 or are you talking to a broader market?
Marissa (00:13:01) - Well, the S& P 500 is a piece, but it's just a piece. There's mid cap, right? You want to buy mid-size companies, you want to buy small size companies. People don't understand that small cap value is the highest performing category of all time at 12.4 is the average rate of return in that category. And no, a lot of people I see have no money in that category.
Floyd (00:13:23) - They think small companies are riskier.
Marissa (00:13:26) - I just don't think the understanding, the basic knowledge is there and small companies are riskier, right? There's more volatility when you're dealing with small companies, but that is where you make money. I mean, think of Amazon when they're a small little bookstore like 30, 40 years ago, no one knew who they were. Imagine you bought them and you held till now like think how much money you would've made from small to large. Right?
Floyd (00:13:50) - You wouldn't be a millionaire, you'd probably be a billionaire.
Marissa (00:13:53) - Exactly. So small cap value and small companies can add value to your portfolio over time. Yes, there's more volatility, but they should have a place in your portfolio. And then not only should you have US markets, but there's international markets, there's emerging markets, and in these markets the middle class is set to double over the next 10 years. So that means that the more and more people in India, China, Brazil, they're going to have more checkbooks, they're going to start more businesses, they're going to buy more computers, more iPhones, all the things they need. And that, what is that going to do?
Floyd (00:14:32) - There's a lot of opportunities in these small c uh, small stocks as you mentioned. And in foreign investing. I agree with you on that. So we've talked a bit about investing. Uh, we didn't really talk about the idea, uh, e exchange traded fund over a mutual fund, uh, a passive fund over an active fund. Do you have a perspective about that?
Marissa (00:14:50) - Of course I do. .
Floyd (00:14:52) - So what is it?
Marissa (00:14:54) - So I personally like keeping a blended approach with 50% of my portfolio and active 50% in passive. And I'll tell you why. There's two different time periods where the funds work, right? Like, so a passive fund works best when everything is going up, right? Everything's going up and you have less fees, so you make more money. Where passive funds don't do as well is times like now where it's more volatile and active funds tend to do better because you have a money manager that says, Hey, interest rates are really high, so we should probably get out this and do this. Or Hey, I should hedge a little bit because the market's going down. Or Hey, there's a war in Russia, so maybe I should do this. Right? Where the passive funds, they are making no decisions on your behalf in time periods like this. So I like keeping both in my portfolio because in good times the passive funds are going to do great and they keep my portfolio cost down. And then the active funds in times like now where we're more volatile, um, are really going to add in some extra returns for.
Floyd (00:15:56) - Me. I like to think of passive index funds as my core portfolio that I'm not going to trade in or out of for a long period of time. I'm going to let the effect of compounding, uh, returns work for me. I'm going to keep my dividends reinvested in my core portfolio and I'm just going to let it sit there until I retire. Moving right back with more great ideas for investing in building your financial security, if you're seriously interested in building your wealth, join us every week on the really simple investing podcast and check out our website@reallysimpleinvesting.com.
You'll find more great podcasts, our blog on investing and some great books from Floyd Saunders books like Investing for Beginners and find a Path to Wealth Sign up for our newsletter so you don't miss listening to our guests and learn even more about the simple things you can do to become a successful investor.
Floyd (00:16:59)You're listening to the really simple investing podcast and now more investing ideas As we continue our interview, let's talk about the retirement planning. I mentioned the Roth IRA, which is, a good investment vehicle for a lot of people, but you have to qualify for it.
Marissa (00:17:04) Yeah, I mean the Roth, unfortunately, if you're, if you're high-income earner, it's not going to work, right? Um, unless you're doing a backdoor Roth, um, you're going through your 401K plan into the after-tax bucket and then converting it into the Roth, right? Um, after the fact.
But for most people, the Roth is, you know, not a great option if you're a high-income earner, if you're a low income earner, good option. Um, so for high income earners, it's like you want tax deductions now. So that's the 401k, that's the IRA, that's the step IRA. Uh, you're on a low tax bracket though, you might as well pay the tax and go into the Roth now and then have the money come out tax free in the future,
Floyd (00:17:42) - Right? Are, I mean, would you do the Roth for the average employee that's a worker that's making an average salary, but he has some money that he wants to put aside, would you do the 401K before you do the Roth?
Marissa (00:17:55) - Yeah, I mean, it depends in the 401k. Are you getting a match? Because if you're getting a match that's free money. So, let's go where free money goes first because that's a no brainer. So, if you have a 401k, you getting a match, that's a no brainer, right? A agreement
Floyd (00:18:08) - Big. Yeah. A big mistake I see people doing with their 401k is, well, I'll put 2% in. They put 2% in and they don't get the match. Right? So they get that free money. That's a big mistake. Right?
Marissa (00:18:20) - Well, that's a nightmare for me and you, but Yeah I mean for, for most people, you know, they don't teach you about 401ks, they don't teach you, and let's not even get started on the target date funds because I really don't like those. Yeah. Um, but you know, this education is like the missing piece. We're not taught about putting into our 401ks, taking advantage of the match, how to invest in our 401ks, how to put money in a Roth. If you're a high-income earner. These things are just, you know, the information unfortunately was not taught to us.
Floyd (00:18:51) - Right. I mean, in, in your book Bottom Up Wealth in the introduction, you talked a little bit about your own background and how you came, uh, to the United States from a background of not really having a lot of money. Explain that a little bit for people. That's kind of your motivation for what you do, right?
Marissa (00:19:09) - Yeah. So my father's parents grew up in a small town in Italy and to make money, they tried to sell olive oil and, and certain things and weren't very successful. So they made a decision when my dad was about six years old to come to America, basically to try to have a better life. And so, they came over here and my grandpa started working like three jobs and he put, he ended up getting the three kids through college, including my dad. But my dad was pretty poor his whole life, um, which made him motivated to want to , he's a cpa, a cfp, and a C R P C like I am. Um, and it made him motivated to want to one, get money and then teach people how to get money, right. And then me, you know, I was lucky that I get to learn from him and, and everything he built. So, I worked corporately for a number of years and realized, uh, I can't continue in the ratrace . So, um, I quit and then I started helping my father. Um, so, you know, uh, for those of you that have a main job, but maybe you can get a side hustle or are looking into passive, you know, income, that's always, uh, a, a great thing to do.
Floyd (00:20:23) - Right? And common form of passive income of course is real estate rental properties, right? Yeah. Uh, so do you recommend that to customers? Do you help them with that or, um,
Marissa (00:20:33) - Yeah, I, I evaluate real estate properties is a lot for my clients. Um, I just did one this morning actually, and so I'll look at the income that's coming in. The expenses are going out and like what's our cap rate and basically what your cap rate is that determines the rate of return that you're getting on this rental property. Typically, if your rate of return is five or less, probably not a good investment, five or higher, probably a good investment that you want to keep. So yeah, I am looking at real estate properties and I do think real estate is a good way to diversify. Do you have to do rental real estate to get exposure? No. You could buy real estate funds, you could buy a reef, right? There's different options when it comes to real estate, but I do think it has a place in your portfolio.
Floyd (00:21:19) - With real estate investment trust, you don't have to buy a trust that just invest in single family homes. It could be commercial property, it could be apartment buildings, shopping centers, data centers. There's all kinds of real estate using REITs, which are really simple to invest in. Just like a mutual fund, right?
Marissa (00:21:37) - Yeah. I mean, you can buy a real estate mutual fund, right? So, this is liquid, you can sell any time res not as liquid. You need to be careful with that. Um, but yeah, I think real estate definitely should have a portion in your portfolio, whether it's rental real estate res or real estate funds. Obviously talk with, you know, um, experts in this area about what might make the most sense for you, but it definitely has a portion in your portfolio
Floyd (00:22:06) - When it comes to building wealth. We haven't really talked about that much. Your book says anyone can become wealthy, but not everyone can maintain their wealth. How, what do you mean by that? How, how would you explain that?
Marissa (00:22:21) – I truly believe that if you just like let's say tomorrow you pay everyone's debt back, right? Everyone in the world, all of a sudden you have no debt. I think in five to 10 years from that point, the people who were in debt will most likely be back in debt. Mm-hmm. , because I think a lot of times it comes down to habits, it comes down to financial education and habits, right? So, if you're in the habit consistently creating debt, just because you pay it off doesn't mean you're not going to go back there.
Floyd (00:22:50) - I, I think there's a really great book out now. It's about the habits of millionaires. Uh, and you know, they're really simple habits. They're not things that are things that most of us shouldn't do. It's really basically having a budget living below your means, living modestly. Most millionaires as we as is in the book, millionaires next door, live next door, right? Yep. But they just don't spend all their money on new cars and fancy vacations.
Marissa (00:23:17) - Yeah. My clients, you would never know. They have millions of dollars. Like they have an average house, you know, they dress like a normal person. They don't have Maseratis, they're not like you know, they don't have these like insane cars. They're really just like average people, you know? Like you and I, it's just they've worked really hard, they've installed the right habits, as you said, they consistently invest money and put it away, um, and make sure it's invested properly and that pays off.
Floyd (00:23:47) - Yes. That's the magic of compounding interest. I mean, a 25 year-old person, if they just saved a few hundred dollars a month and did that consistently all the way to retirement, they would have an excess of the million dollars. And in fact, most self-made millionaires become millionaires between the age of 50 and 60.
Marissa (00:24:06) - Exactly. Yeah. Yeah.
Floyd (00:24:08) - So to you, wealth is much more than simply earning the significant income. It's, strategies and behaviors that can be repeated year after year. So, what kind of strategies and behaviors do you try to teach your clients?
Marissa (00:24:20) - We talked a little bit about the reverse budgeting. So, paying yourself first like has to be implemented in your portfolio, right? And then every single year we need to be reevaluating what's going on. This is, I think a key piece that not a lot of people are doing is they're not going back through the year and saying, how much do we save? What's our savings rate? Um, how, what do we earn on our investments? Should we tweak our investments? Right? Do I need to be putting more away in X account? I don't think people are doing this analysis. You could call it on a yearly basis. And I think that's what's hurting people in the long run. And it's whether they don't have the education or they're not in the habit of reviewing and analyzing and tweaking,
Floyd (00:25:03) - Is it because they're afraid of money?
Marissa (00:25:07) - It might be, you know, I think a lot of us come from childhood with different money beliefs and a lot of them aren't good. Right. A lot of us have heard or parents say like, don't put your money in the market, or that's too risky. You'd watch your parents be in debt over and over and never create wealth. and now you're just in the same cycle, right? So, money beliefs definitely have a little bit to do with it.
Floyd (00:25:32) - And it seems to me that most of your clients have already gotten some wealth going and they're doing that kind of annual checkup with you, so you don't necessarily see that individual that hasn't started doesn't have any education around money and finances and investing or, or do you, do you have a mix or,
Marissa (00:25:50) - I have both because, so I have like 300 clients, like I said that I work on a one-on-one basis. Some of them have started with nothing. Some of them have a lot, but I also have led an all-woman investment club and there was 150 women in that. A lot of the women in there were just getting started. Mm-hmm. , the principles when you're just getting started are very similar to even when you have millions, it really, I mean, there's a little more strategies that come into play, maybe tax strategy, right. And legacy planning, right. When you have more money. But they're really similar strategies no matter where you are.
Floyd (00:26:27) - And you mentioned tax planning, that's, number five in your six-point financial action plan, right? So what kind of things do you do to help people plan for their taxes? Because you know, you earn money, you pay taxes.
Marissa (00:26:40) - Yeah. So the problem is, you know, a of people go to their CPA and they, they, file their tax return. And this is called reactive tax planning, right? Once you're at the point where you're talking with your CPA, there's not much you can do.
Floyd (00:26:54) - And CPAs are not necessarily well versed in investing either.
Marissa (00:26:58) - No. So, what a lot of I do is proactive tax planning. So, what can we do right now to see the most amount of tax? And usually you, you're looking for a few things. One, how can I max out retirement accounts that's going to gimme a tax deduction now, right? For some people though, we might want to tax deduction later. If you're that person that's got pensions eventually in social security, um, you got social security pensions in retirement, and you think your income's going to be really high in retirement higher than now, well then we might want to save tax later, right? That's where the Roth comes in. So do you want to save tax now or you want to save tax later that comes into it? Then we would be looking at different types of deductions and I'll give you an example. Like a lot of my clients are taking required minimum distribution. What is that? Well, When you're 73 years old, the government basically forced you to take money out of your qualified accounts like IRAs, 401ks, that kind of thing, right? So, a lot of people don't know that if you don't need the money, which some of my clients don't, cause again, they've done the right thing. And you send the money right? To a qualified charitable institution of your choice, well actually you pay no tax, that saves tax. That's a tax strategy. Right.
Floyd (00:28:24) - And you feel good about the money that you contributed to some worthwhile cost.
Marissa (00:28:28) - Exactly.
Floyd (00:28:29) - I mean, that's one reason why a lot of people want to become wealthy is because they want to be able to do something with their money. Right. I agree. And that's another habit of self-made millionaires is they actually give back. They, they either spend their own personal time working in charities and nonprofits and non-government organizations or they contribute to them or both.
Marissa (00:28:47) - Exactly.
Floyd (00:28:48) - Okay. So, we've covered five of those six points. What about estate planning? What would you advise people about estate planning? What's the key there?
Marissa (00:28:57) - Yeah, so the estate planning really comes down to do you want to be protecting from the grave or not? A lot of people say to me, Marissa, if I die tomorrow, I do not care what happens with the money that goes to anyone. And I'm like, okay, well then we make a simple will. No big deal. You don't care, right? You're dead but
Floyd (00:29:16) - Simple wills have to go through probate,
Marissa (00:29:19) - Correct? Yes. You will have to go through probate, but again, they don't care. They're like, I don't care if my kids have to wait nine months to get the money, you know, or if they have to go to probate or whatever. So that's what that, it really is based on feeling when it comes to legacy planning. But a lot, most people, especially if you're family oriented, um, they care, right? So they don't want to go through probate. They want to save as much tax money as possible so that uh, the kids inherit more money and they want to pass money on.
Floyd (00:29:51) - Okay. So, is there a better vehicle than a will to do that?
Marissa (00:29:56) - No, the will is the right vehicle. It's just how you set it up in the will. So, I do a lot of trust planning work with my clients, and we create something called the revocable trust. And so, what we do is when one of them passes away, let's say both spouses passed, trusts are set up, the money goes into trust for all the kids. There's trustees that distribute the money to kids, you know, in the way that the will says. But what this does is when the money's in a trust, it's protected. So, if the child inherits this money in a trust, they get divorced a day later, the money can't be pulled into the divorce.
Floyd (00:30:33) - Right. And it can't be pulled into a lawsuit either. Right?
Marissa (00:30:36) - Exactly. If you happen to run a business, it won't be pulled into the lawsuit either.
Floyd (00:30:42) - . Well this is really great stuff, Marisa. I appreciate you taking the time to talk with me today. I want people to make sure that they pick up your book Bottom Up Wealth and they should be following you. I think you do a lot on TikTok and Instagram and other kinds of social media, right?
Marissa (00:31:02) - Yeah, I mean, you can find me on Facebook. I also, like I said, you can get my book on Amazon. I have a website as well if you want to check me out there. but yeah, I'm, I, you know, my goal at the end of the day is simple. I want to get education about all these different topics. And so I'm always hosting webinars in different learning environments that are completely free so everyone can learn, you know, the principles to build wealth.
Floyd (00:31:28) - We'll get all of the links for social media and all that website and all that sort of stuff on our website for the post that we're going to do about Marisa Greco-Reale. So you'll get all of your information and be able to contact and follow up with more information. It's been great talking to me today. We look forward to learning more about what you're doing.
Marissa (00:31:47) - Thank you. Thanks for having me on here
Floyd (00:31:49) – Thank you for joining us for the really Simple Investing podcast. Every week we bring you fresh ideas for investing and really simple ways to invest and build for your financial security. Be sure and hit the like button, subscribe. Follow us on our social media channels and tell your friends. And if you'd like to be a guest on really simple investing, just go to the contact page on our website and send us an inquiry. Thanks. We appreciate our audience so much.
You can get yer book Bottom-Up Wealth from Amazon.
Follow Marissa on Facebook, Instagram, TicToc and her website. Greco-Nader Wealth Navigation. https://www.greconader.com/Marissa-Greco.e1007259.htm