Episodios

  • A Framework For Multiplying Wealth

    A Framework For Multiplying Wealth
    Aug 14 2024
    In this episode, Brian Skrobonja breaks down a simple framework everyone can follow to build and multiply wealth. He sheds light on what most people get wrong about wealth building, the benefits of having multiple appreciating assets, and how wealthy people use other people’s money to build wealth. Brian goes over a simple framework for multiplying and sustaining wealth--the same framework he uses to build and scale his business.Brian reveals the rhythm to building wealth: Accumulate money, build assets, create passive income, then repeat.Brian breaks down the two main schools of thought about money: Lateral compounding growth and exponential growth through multiplication. The sooner you understand the differences, the faster you can choose your path and move forward.Brian uses the financial journeys of two fictional characters, Mark and Luke, to explain what people get wrong about building wealth.Mark adheres to a traditional approach to money focusing on compounding while Luke employs an out-of-the-box strategy emphasizing multiplication to build his wealth.While Mark’s strategy relies on steady growth through compounding, Luke’s multiplication strategy demonstrates the potential of using real assets to create wealth.According to Brian, investing is all about taking advantage of opportunities as they are presented.Brian emphasizes the benefits of having multiple appreciating assets and how to use them to generate passive income in retirement.What everybody needs to understand about real estate: the value of a house will always appreciate regardless of whether it has a mortgage.The loan has nothing to do with the house’s value or the asset’s appreciation. The house is an asset and will appreciate the same whether it has a loan or not.Brian reveals how the wealthiest people in the world use other people’s money to build and multiply their wealth.Brian talks about the benefits of recognizing that things need to change. The sooner you recognize that things need to change, the faster you can begin to forge that new path.The benefit of learning from other people’s experiences and avoiding the mistakes they made.Without knowing how to use what you’ve learned effectively, it amounts to nothing more than dinner conversation.For Brian, successful people are consistently successful because they are eager to learn and have a true desire to uncover their own blindspots.Always remember that there are inherent risks with all types of investing. Mentioned in this episode: BrianSkrobonja.com SkrobonjaFinancial.com SkrobonjaWealth.com BUILDbanking.com Common Sense Financial Podcast on YouTube Common Sense Financial Podcast on Spotify Who Not How: The Formula to Achieve Bigger Goals Through Accelerating Teamwork by Dan Sullivan and Benjamin Hardy References for this episode: https://www.reddit.com/r/Bogleheads/comments/1bj16az/what_are_normal_stock_returns_ben_felix_over_the/?rdt=52271 https://www.investopedia.com/ask/answers/052015/which-has-performed-better-historically-stock-market-or-real-estate.asp https://skrobonjafinancialgroupllc.sharefile.com/public/share/web-s9eba7b5a422a4447ac6b5ffad96742ce Securities offered only by duly registered individuals through Madison Avenue Securities, LLC. (MAS), Member FINRA & SIPC. Advisory services offered only by duly registered individuals through Skrobonja Wealth Management (SWM), a registered investment advisor. Tax services offered only through Skrobonja Tax Consulting. MAS does not offer Build Banking or tax advice. Skrobonja Financial Group, LLC, Skrobonja Wealth Management, LLC, Skrobonja Insurance Services, LLC, Skrobonja Tax Consulting, and Build Banking are not affiliated with MAS. Skrobonja Wealth Management, LLC is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Skrobonja Wealth Management, LLC and its representatives are properly licensed or exempt from licensure. The firm is a registered investment adviser with the state of Missouri, and may only transact business with residents of those states, or residents of other states where otherwise legally permitted subject to exemption or exclusion from registration requirements. Registration with the United States Securities and Exchange Commission or any state securities authority does not imply a certain level of skill or training. The views and opinions expressed here are those of the authors and do not necessarily reflect the official policy or position of Madison Avenue Securities, LLC This material contains forward looking statements. Forward looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Actual future results and trends may differ materially from what is forecast. Investing involves risk including the potential loss of principal. Consider your risk tolerance and specific situation before investing. Investments in securities are subject ...
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    23 m
  • Defining A Diversified Portfolio - Replay

    Defining A Diversified Portfolio - Replay
    Aug 7 2024
    In this episode, Brian Skrobonja breaks down ways to save, grow, and invest your money. He sheds light on what a well-diversified portfolio looks like, the true definition of financial freedom, and why you need different mindsets for spending versus investing money. We all want the same thing when it comes to money--we all desire to make money, grow money, and use the money that we have.However, most people have a belief system that is rooted strictly on growing money--which, on some level, makes sense. But this singular focus leaves out the idea of using money.Why is this important? Because how we grow money is not the same as how we spend money. Growing money and using money require different approaches and different ways of thinking.Brian reveals that many people spend money wrong. This is not about what people spend money on, but the source of the income being spent.If you earn a dollar and spend it, it's gone forever. If you earn a dollar and invest it for income, you potentially have income for life.Brian explains why it makes more sense to spend the money your investments earn versus spending the money you earn directly.Why is this important? If you want to grow your wealth over time, you should find ways to hang on to as much money as possible.What is the difference between making and growing money? Brian breaks down a brilliant way to use other people’s money to access cash while your money continues to grow. The definition of passive income and the benefits of making money with little to no effort. Better ways to generate income other than the stock market. Brian explains why the stock market is great for growing money, but it’s not the best option for generating recurring income.Ideally, you want to position assets so you have a tax-free, passive income to live on. You need to have the ability to spend money with uninterrupted growth while simultaneously investing long-term.Financial freedom is defined by how much passive income you are generating. Mentioned in this episode: BrianSkrobonja.com SkrobonjaFinancial.com SkrobonjaWealth.com BUILDbanking.com Common Sense Financial Podcast on YouTube Common Sense Financial Podcast on Spotify Securities offered only by duly registered individuals through Madison Avenue Securities, LLC. (MAS), Member FINRA & SIPC. Advisory services offered only by duly registered individuals through Skrobonja Wealth Management (SWM), a registered investment advisor. Tax services offered only through Skrobonja Tax Consulting. MAS does not offer Build Banking or tax advice. Skrobonja Financial Group, LLC, Skrobonja Wealth Management, LLC, Skrobonja Insurance Services, LLC, Skrobonja Tax Consulting, and Build Banking are not affiliated with MAS. Skrobonja Wealth Management, LLC is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Skrobonja Wealth Management, LLC and its representatives are properly licensed or exempt from licensure. The firm is a registered investment adviser with the state of Missouri, and may only transact business with residents of those states, or residents of other states where otherwise legally permitted subject to exemption or exclusion from registration requirements. Registration with the United States Securities and Exchange Commission or any state securities authority does not imply a certain level of skill or training. Annuity guarantees rely on financial strength and claims-paying ability of issuing insurance company. Annuities are insurance products that may be subject to fees, surrender charges and holding periods which vary by carrier. Annuities are not FDIC insured. Investments in securities are subject to investment risk, including possible loss of principal. Prices of securities may fluctuate from time to time and may even become valueless. Gas and oil investments are speculative in nature and are sold by Private Placement Memorandum (PPM). Carefully read the PPM before investing. Certain accreditation requirements may apply. Our firm does not offer tax or legal advice. Consult your tax or legal advisor regarding your situation.
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    13 m
  • Settling An Estate As An Executor - Replay

    Settling An Estate As An Executor - Replay
    Jul 31 2024
    In this episode, Brian Skrobonja sheds light on the complex and often overwhelming process of managing an estate after the loss of a loved one. This is a step-by-step guide from the initial steps you need to take after a loved one passes, to the intricate details of settling an estate. Brian offers valuable advice and practical tips to navigate this difficult time with grace and efficiency. Having a clearly defined process in place for managing an estate can help avoid the emotional drain of making important decisions through the loss of a loved one.Friends and family may wish well and provide advice on what to do, but without a proper plan in place, that can lead to more financial problems in the future.Setting expectations for yourself and the beneficiaries of the estate is a great first step to help minimize the confusion and questions around how long it will take to settle an estate. This process can take anywhere from two months to several years depending on the type of assets that are owned and the size and complexity of the estate.A funeral home director will often help obtain death certificates, which will be required before making any claims. It’s a good idea to request 10 to 12 original documents because, once submitted, you may not get them back.It's important to first locate the deceased’s will, trust, or other estate documents they have on file. If none of these exist, you could have difficulty settling a person's estate which will most likely require an attorney to assist you through the probate process.Check to determine if the person may have left a letter of instruction behind as well. A letter of instruction is not a legal document, but it's a letter that can provide more personal intentions and information regarding an estate.The next step is to begin gathering an itemized list of all known financial institutions where money is held and life insurance companies for filing a claim. It's a good idea to put the list together before jumping into making calls because you'll want to keep track of phone conversations and other instructions.Tip: A really good practice is to keep a journal or Excel spreadsheet of all the conversations to keep track of everything. You'll want to avoid writing on the back of envelopes or scrap pieces of paper as that can become really unmanageable.Checks made out to the deceased will require a bank account to deposit them. Avoid closing bank accounts too early because of this.You will have to notify Social Security that a death has occurred as well as any pension provider to have payments stopped and any eligible benefits paid to the estate.If your loved one served in the military, you may be eligible for veterans benefits. You can get more information about these benefits by visiting va.gov.Over the next one to three months, you will want to screen incoming mail, both physical and email, to look for and gather bills, statements, and notices relating to various types of accounts and insurance policies. You will want to review credit card statements to identify subscriptions or other recurring charges to follow up with the service providers about cancellation.Next, notify creditors and credit card companies that were a part of your loved ones credit history. You can notify the big three credit bureaus; Experian, Equifax, and TransUnion, of their passing, which can usually be done online over the phone or by letter.You will also want to locate where they filed important documents to find deeds, titles to real estate, car titles, or lease agreements as well as storage space keys and account records.Look for a computer file or printout with digital account passwords so you can disable any active social media accounts.If the person was still working, contact the human resources office at their place of work to inform them of what has happened, the HR officer may need you to fill out some paperwork pertaining to retirement plans, health benefits and compensation for unused vacation time.If your loved one owned a small business or professional practice, a discussion with business partners and clients may be necessary as well as consulting with the company attorney who has advised the business.If there was a child in college, it may be a good idea to contact the Financial Aid Office to inform them of what has happened. Depending on the school and the financial situation the surviving child may qualify for more assistance.Before rushing into this process, you should consider speaking with a financial advisor and attorney. There are so many areas where you can make expensive mistakes, working with a professional through this difficult time is usually the best decision. Mentioned in this episode: BrianSkrobonja.com SkrobonjaFinancial.com Common Sense Financial Podcast on YouTube Common Sense Financial Podcast on Spotify va.gov Securities offered only by duly registered individuals through Madison Avenue Securities, LLC. (MAS), Member FINRA &SIPC. ...
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    13 m
  • Tax Deferred to Tax Free: Navigating Taxes in Retirement - Replay

    Tax Deferred to Tax Free: Navigating Taxes in Retirement - Replay
    Jul 24 2024
    In this milestone 100th episode of the Common Sense Financial Podcast, host Brian Skrobonja delves into the critical topic of managing taxes in retirement. The episode focuses on strategies for minimizing tax liabilities, especially for retirees with tax-deferred accounts facing potential hefty tax bills. Brian emphasizes the importance of sustainable income creation during retirement and the role of tax optimization in this process. Most people envision their retirement to be built from predominantly tax-free income, but after many years of deferring taxes, retirees are facing a sizable tax bill on distributions taken from their retirement accounts that could be a third or more of what has been accumulated.When you’re saving for retirement, growth of your assets is the priority. But many people don’t realize that once they retire that’s no longer true. The priority is actually creating sustainable income to support you through retirement while minimizing taxes.A common issue I’ve seen is future retirees knowing they will owe taxes on their deferred accounts, but not realizing the extent of the problem since the rules change once they retire.Many retirees we work with tend to have the same income goals in retirement, yet with fewer deductions. They no longer have children or mortgage interest to help them offset their tax burdens, which makes the situation more complex.Delaying distributions isn’t an option either. Required Minimum Distributions will eventually force your hand.There are two tax problems facing retirees: taxes you will have to contend with today, and taxes that you will have to contend with in the future.With the national deficit continuing to rise, do you expect tax rates to go down in the future or go up? The most likely answer is that tax rates are on the rise, so we should be planning accordingly.There are two possibilities to help minimize the level at which you participate in paying your fair share towards the government's future revenue increases. You can either complete a Roth conversion or through tax deferred withdrawals contribute to an overfunded permanent life insurance policy.Making the decision of which strategy to implement is the easy part. The trick really is completing this process with minimal tax liabilities, which requires specialized knowledge.The progressive nature of the code makes understanding your tax burden complicated and miscalculating this could result in having a larger tax liability than anticipated.Depending on your income level, a taxable distribution can subject your Social Security to additional taxes. This is a separate calculation from the income tax brackets and uses a two step process to determine how much of your social security will be subject to taxation.This is important to know because a taxable distribution may not only push you into a higher income tax bracket, but it could trigger additional taxes on your social security, which could result in a higher effective rate.You should also be aware of the impact a taxable distribution can have on Medicare premiums. The impact of any possible premium increase is typically delayed by two years. This is one of those things that often comes as a surprise when people make decisions about distributions.The antidote to taxable income is deductions, credits and losses which can help reduce the net income subject to tax. There are a few options that can help offset the burden of taxes and make the transition from tax-deferred to tax-free easier, but they don’t work for everyone, which is why we recommend working with a professional.The first thing is a donor advised fund or DAF. This allows you to contribute future charitable donations into a fund that you control when distributions are made that can also receive the tax benefit of the donation in the year you make the contribution into the fund. By making multiple years of donations in a single year into that fund, you have the potential of helping offset a taxable distribution from your retirement account in that year.The second is a Charitable Remainder Trust (CRT), where you can contribute future charitable donations into the trust and receive the tax benefit of the donation in the year you make the contribution. You can also receive income from the trust while you're living within IRS limits. A CRT is a more complex arrangement than a DAF with many options and requires an attorney to draft the trust.The third is a qualified charitable donation or QCD, which allows for anyone over the age of 70 and a half to make a direct donation from a qualified account to a charity.The fourth is something known as IDCs, or intangible drilling costs, which allows accredited investors to participate in the drilling expenses of an oil and gas company that could provide reportable tax losses that can help offset all forms of income, as well as the potential for cash flow back to the investor once the wells are operational. Mentioned in this episode:...
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    18 m
  • Are You Prepared for the Evolution of Retirement? - Replay

    Are You Prepared for the Evolution of Retirement? - Replay
    Jul 17 2024
    In this podcast episode, Brian Skrobonja takes us on a thought-provoking journey through the evolving concept of retirement. As we dive into the past, present, and future of retirement, Brian helps us unravel the complexities of this modern-day concept which, though deeply ingrained in our society, is relatively new in human history. This episode is essential for anyone planning for retirement, offering a fresh perspective on how to approach this significant life stage in the context of rapid societal shifts, economic developments, and increasing human longevity. We start off by exploring the concept of retirement and its transformation from ancient societies to the modern era.The Industrial Revolution marked a significant shift from agrarian societies to industrial ones, influencing how people viewed work and retirement. It even shaped the way that families and communities lived together.The change in how work was done over the centuries resulted in the creation of a retirement system based on pensions, which was the precursor to modern-day retirement benefits.In the 1900’s, Social Security was introduced which shifted the responsibility from families and communities onto the government.In a relatively short period of time, the concept of retirement has changed drastically, and the pace of change is continuing to accelerate. Based on the way technology and healthcare are developing, it’s very likely that retirement will look very different in the future as well.As the Baby Boomer generation progresses toward retirement, it will put tremendous strain on programs like Social Security and Medicare due to a considerably lower worker-to-retiree ratio than ever before in history.The programs and retirement paradigm will change, similar to the way that pensions underwent change. Pensions used to be the default vehicle for retirement but have become scarce and relegated, mainly for those with government jobs.According to the Social Security Administration, benefits are projected to run negative by 2033. And according to the Congressional Budget Office, the national debt is projected to reach $52 trillion in 2033.Life expectancy also continues to rise, which puts pressure on the current retirement paradigm from another angle. With new breakthroughs in human longevity, the concept of retirement will have to adapt.Retirement was once considered a necessary transition when a person was no longer productive in their work and had a short life expectancy once retired. Today, people retire when they're still fully capable of working. That reality is widening the chasm between the number of workers and retirees, as well as the financial resources needed to sustain retirement for longer periods of time.Retirement needs to be redefined, since the reality of shorter lifespans is no longer the case for most people.There are three factors that contribute to success in retirement.The first is contribution. The longer you contribute, the better. Perhaps redefining expectations after the age of 60 and looking toward a second half of life with a meaningful career or business may be called for.The second is prevention. The longer your retirement is, the more risks are amplified and can have a significant impact. Finding ways to move things into your control helps prevent unforeseen problems that put your retirement at risk. Examples of this include: insurance, annuities, and tax-free investments.The third is delegation. Retirement planning is a team sport. You can delegate the heavy lifting of a retirement plan to financial advisors, attorneys, insurance agents and CPAs and then use that collective wisdom to implement the actual plan. Mentioned in this episode: BrianSkrobonja.com Common Sense Financial Podcast on YouTube Common Sense Financial Podcast on Spotify References for this episode: https://www.washingtonpost.com/technology/interactive/2023/aging-america-retirees-workforce-economy/ https://www.ssa.gov/OACT/TRSUM/index.html https://www.cbo.gov/publication/58946 https://www.econlib.org/library/Enc/IndustrialRevolutionandtheStandardofLiving.html#:~:text=On%20the%20other%20hand%2C%20according,come%2C%20it%20was%20nevertheless%20substantial https://www.ssa.gov/history/lifeexpect.html#:~:text=Life%20expectancy%20at%20birth%20in,and%20paid%20into%20Social%20Security https://www.macrotrends.net/countries/USA/united-states/life-expectancy#:~:text=The%20current%20life%20expectancy%20for,a%200.08%25%20increase%20from%202020 https://www.diamandis.com/blog/mark-hyman https://www.kiplinger.com/taxes/what-to-do-before-tax-cuts-and-jobs-act-tcja-provisions-sunset Securities offered only by duly registered individuals through Madison Avenue Securities, LLC. (MAS), Member FINRA &SIPC. Advisory services offered only by duly registered individuals through Skrobonja Wealth Management (SWM), a registered investment advisor. Tax services offered only through Skrobonja Tax Consulting. MAS does not offer Build Banking or ...
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    16 m
  • The Three Retirement Mindsets That Could Have A Negative Impact On Your Retirement Plans

    The Three Retirement Mindsets That Could Have A Negative Impact On Your Retirement Plans
    Jul 10 2024
    In this episode, Brian Skrobonja goes over the three main retirement mindsets that could negatively impact your retirement plans. He sheds light on what most retirees get wrong about retirement planning, why being confident doesn’t eliminate investment risks, and what to consider when hiring a financial planner. Brian goes over three retirement mindsets that have the potential to derail even the best-laid retirement plans.He starts by explaining that there is more to the conversation around retirement than just having a permanent vacation.Retirement is not a destination; it’s a transition into a new stage of life.The different mindsets you need when saving money and growing a nest egg versus spending and withdrawing money from your retirement accounts.Mindset #1 - The Idea That Annuities Are Bad. For Brian, retirement is about having a steady stream of income you can rely on no matter what Wall Street throws your way.Brian reveals that most retirees want consistency and predictability in retirement--they want to know exactly how much money they have coming in each month.Annuities are designed specifically to deliver this predictability and remove guesswork out of producing income for retirement.Remember, stock market risks are real and they don’t disappear just because an investor is optimistic about what could potentially happen. Mindset #2 - The idea of the status quo of the stock market in retirement. Some people believe that a well-diversified portfolio will predictably turn out enough profit to sustain them throughout retirement.According to Brian, what is missing from this ideology is that the market doesn't go up in a straight line. If you experience a 50% loss, 50% in earnings will not get you back to even; you need 100%. And if you're making withdrawals, that only compounds the problem.Brian reveals why the stock market is a great tool for wealth creation--but only if you allow the money to grow and aren't making withdrawals for income purposes. Mindset #3 - Fee anchoring. What is a fee anchor? It's the amount someone has in their mind for what they should pay for financial related advice.When considering a fee for an advisor, it's important to understand that it’s less about the fee and more about what you're getting in return.A fee is only an issue when there is a vacuum of value.For Brian, if you try to get an advisor to cut their fees, the more experienced and valued advisors will not take you as a client.Brian explains why finding the right advisor can be invaluable, especially when it comes to navigating complex financial products like annuities, private markets, or selling a business.Fees are important and you should understand them, but Brian encourages people to not use them as the primary consideration for making a decision. Mentioned in this episode: BrianSkrobonja.com SkrobonjaFinancial.com SkrobonjaWealth.com BUILDbanking.com Common Sense Financial Podcast on YouTube Common Sense Financial Podcast on Spotify Securities offered only by duly registered individuals through Madison Avenue Securities, LLC. (MAS), Member FINRA & SIPC. Advisory services offered only by duly registered individuals through Skrobonja Wealth Management (SWM), a registered investment advisor. Tax services offered only through Skrobonja Tax Consulting. MAS does not offer Build Banking or tax advice. Skrobonja Financial Group, LLC, Skrobonja Wealth Management, LLC, Skrobonja Insurance Services, LLC, Skrobonja Tax Consulting, and Build Banking are not affiliated with MAS. Skrobonja Wealth Management, LLC is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Skrobonja Wealth Management, LLC and its representatives are properly licensed or exempt from licensure. The firm is a registered investment adviser with the state of Missouri, and may only transact business with residents of those states, or residents of other states where otherwise legally permitted subject to exemption or exclusion from registration requirements. Registration with the United States Securities and Exchange Commission or any state securities authority does not imply a certain level of skill or training. The views and opinions expressed here are those of the authors and do not necessarily reflect the official policy or position of Madison Avenue Securities, LLC This material contains forward looking statements. Forward looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Actual future results and trends may differ materially from what is forecast. Investing involves risk including the potential loss of principal. Consider your risk tolerance and specific situation before investing. Investments in securities are subject to investment risk, including possible loss of principal. Prices of securities may fluctuate from time to time and may even become valueless. Carefully read all of ...
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    19 m
  • My Story - Replay

    My Story - Replay
    Jul 3 2024
    In this podcast episode, Brian shares his remarkable journey from his parents' middle-class immigrant background to achieving financial freedom through decades of learning and building businesses. He recounts his early aspiration for an opulent lifestyle and the pivotal moment when he realized the importance of creating income-producing assets. Through content creation, including three books and the Common Sense Financial Podcast, Brian's financial wisdom and expertise have garnered recognition and awards, providing valuable insights into wealth, financial freedom, and the pursuit of life's true riches. Join us as we explore Brian's wealth-building principles, the significance of faith, family, and relationships, and the pursuit of genuine financial freedom. It was over 30 years ago when Brian got started in business and he’s spent this time building his knowledge while building teams and companies.Brian begins by telling the story of his parents and how they came over from Croatia and lived a middle-class life.His father worked evenings and weekends as a lab engineer while also running a business on the side. His work ethic greatly inspired Brian as he grew up.As a teen, he always dreamed of having expensive things, but his only model for getting that done involved trading time for money, which is exactly what he did throughout his early 20’s. This led to him working harder to keep up with his increasingly expensive lifestyle.After doing it wrong for years, Brian had an epiphany where he realized he needed to create income-producing assets that would pay for his lifestyle.He set out to create a passive income stream to support his lifestyle and successfully accomplished it. That’s when his focus for what he was really trying to do for his clients came into clarity.Brian began producing content back in 2010. And out of that came three books: Common Sense, Generational Planning, and Retirement Planning, which can all be found on Amazon.This led to the beginning of the Common Sense Financial Podcast, which has since been recognized by Forbes as a top 10 podcast by financial advisors. Brian also became a regular contributor for Kiplinger magazine locally in St. Louis. He’s gone on to win numerous awards for his work.After 30 years of helping clients create the passive income they need to create real financial freedom, Brian regularly hears clients say that his process has really opened their eyes about how money works and how to think about wealth.In his personal life, Brian has been married to his wife Carrie for 30 years and has three kids, who have also grown up and had families of their own.Throughout their lives, Brian and his wife have taught their children two main things. First, most importantly, for them to pursue a close personal relationship with Jesus Christ and to live out their faith in their daily walk. Second to that, is to understand that a worthy pursuit in life is the things money can't buy: building relationships, investing, and creating memories and experiences with people that you love.A key lesson that took Brian a long time to figure out is that the pursuit of things never brings satisfaction.Real wealth is not found in things but in the freedom to live your life free from having to work for a paycheck or trade your time for money, which is another lesson he tries to impart to his kids as well as his clients. Mentioned in this episode: BrianSkrobonja.com Common Sense Financial Podcast on YouTube Common Sense Financial Podcast on Spotify SkrobonjaFinancial.com SkrobonjaWealth.com BuildBanking.com Common Sense: YOUR Guide to Making Smart Choices with YOUR Money by Brian Skrobonja Generational Planning by Brian Skrobonja Retirement Planning: Have A Plan So You Can Live Your Life by Brian Skrobonja Investing involves risk, including the potential loss of principal. This is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. Securities offered only by duly registered individuals through Madison Avenue Securities, LLC. (MAS), Member FINRA &SIPC. Advisory services offered only by duly registered individuals through Skrobonja Wealth Management (SWM), a registered investment advisor. Tax services offered only through Skrobonja Tax Consulting. MAS does not offer Build Banking or tax advice. Skrobonja Financial Group, LLC, Skrobonja Wealth Management, LLC, Skrobonja Insurance Services, LLC, Skrobonja Tax Consulting, and Build Banking are not affiliated with MAS. Skrobonja Wealth Management, LLC is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Skrobonja Wealth Management, LLC and its representatives are properly licensed or exempt from licensure. The firm is a registered investment adviser with the state of Missouri, and may only transact ...
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    11 m
  • The 5 Key Performance Indicators To Help Measure The Health Of Your Retirement Plan - Replay

    The 5 Key Performance Indicators To Help Measure The Health Of Your Retirement Plan - Replay
    Jun 26 2024
    In this episode we talk about the importance of using key performance indicators beyond just investment performance to gauge the health of one's retirement plan. There are five crucial data points that form the foundation of a successful retirement strategy: passive income, effective tax rate, cash flow ratio, banking capacity, and horizontal asset allocation. By focusing on these metrics, you can adopt a comprehensive approach to retirement planning that factors in various financial variables and bridges the gaps in your financial plan. Business owners use KPIs or key performance indicators to track and understand the health of their business and marketing efforts. Those planning for retirement should consider their retirement KPIs to help measure the health of their financial situation.People often make the mistake of substituting investment performance for more meaningful key performance indicators. ROI is not the only KPI you should be paying attention to.People often view their finances in silos and tend to make standalone decisions about what to do while leaving out other important variables concerning their situation, which can result in having gaps in their overall retirement plan design.For example, the stock market can go down, but that doesn’t necessarily mean your plan should change. The flipside is also true: the market may be up, but that could mean you need to make adjustments.Knowing what KPIs to use and how to use them can help measure the health of your overall financial situation, not just track portfolio performance.A KPI is simply a collection of data points that helps provide a consistent method for measuring and monitoring the health of your retirement plan.In my experience, there are five key data points needed to measure the effectiveness of a retirement plan.The first is passive income. Income is an obvious component and the central theme of a retirement plan.Income is not growth of a share or unit of a particular investment. It is the income generated from the share or unit of an investment.If there is a retirement income gap of $5,000 each month, the goal of the retirement plan is to not simply cash out investments each month or spend down savings to meet the goal. It is to create passive income sources that can consistently provide the cash flow.Missing this point can be catastrophic to the longevity of a retirement plan. The second is the effective tax rate. Tax rates in the United States of America are progressive. The more you make, the higher the marginal rate is on portions of your income. Marginal rates have their place when filing a return or making decisions about asset positioning.The effective tax rate is a single rate that's calculated using the total taxes that are paid against the gross income. This percentage gives us a better overall understanding of the impact taxes are having on retirement income.If the retirement income gap is $5,000 each month and the effective tax rate is 30%, we can determine the additional amount of income required to cover the tax liabilities.The more tax mitigation techniques you incorporate into a retirement plan, the less pressure there is on your assets to generate additional income just to pay the tax. The third is cash flow ratio. People often define cash flow too narrowly and often exclude things like taxes, retirement savings and health insurance premiums, which leaves gaps in understanding.It is also important to know the ratio of income to bank payments, taxes, savings insurance, as well as fixed and variable expenses.It’s also important to know the earned income versus passive income ratio along with the number of different income sources you rely on to fund your lifestyle. The fourth is your banking capacity. When it comes to asset allocation, there is often the out-of-the-box structure where assets are divided up between investments and bank accounts. This approach oversimplifies a more complex situation and overlooks the realities of life and how people actually use and spend money.There are many factors to consider outside of just growing assets and covering emergencies, such as big ticket purchases and other family needs, that could benefit from incorporating a family bank into the financial plan.A family bank, aka Build Banking, is a specially designed life insurance contract that enables a family to have banking capabilities within their own financial ecosystem without relying on an actual bank outside of their financial situation.This piece is usually missing from most retirement plans. The fifth is horizontal asset allocation. Most people think of diversification as a vertical landscape of public market investments such as stocks, bonds, and mutual funds or ETFs, but that’s the wrong idea.Asset allocation is similar to gardening. It requires diversity in many different forms to help manage growth, produce income, minimize risk and mitigate taxes.Adding things such as real estate businesses, private equity, ...
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