George Grombacher is a consultant, writer, speaker, and the host of the Money Savage podcast. George and Brett Swarts talk about building and preserving wealth, focusing on the retirement planning space and how to create retirement income. Through promoting easy to understand concepts and information on financial planning, George shares how he helps others create and preserve more wealth with proper planning. Learn the importance of values and goal setting in financial planning that will set you up for the years to come.

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The First Steps To Building Wealth with George Grombacher

I’m excited about our next guest. Many individuals struggle with a lifestyle that not only fails them to bring them happiness, but it also puts them into debt. Our next guest believes there’s a better way forward. He’s actually a consultant, podcaster himself, writer and speaker. He’s the Cofounder of the Figure It Out Podcast and also the host of the Money Savage Podcast. He’s the Creator of Money Alignment Academy and the President of Financial Consulting Professionals. I was impressed with his background as well. He’s an Investopedia Top 100 Financial Advisors for 2019. His real passion is helping people lead happier and more content lives. He’s having a brand-new thing launched, it’s called StriveDetox.com. It’s an online boot camp to help you detox your mind, your body, and your money. You can find more about him at GeorgeGrombacher.com. Please welcome, George Grombacher.

Thanks for having me, Brett.

I appreciate you being here. Thanks for sharing some time with us here. Would you please give our readers a little bit about yourself, your story and your current focus?

We were talking a bit about how I’ve got a 2-month-old and a 3-year-old. The gray in my beard is attributable to the two-month-old but that’s a little bit of why I personally am a married guy with two kids. I live in Scottsdale, Arizona. I’ve been in personal finance for more than twenty years. The real focus on the retirement planning space, how you create retirement income and the reason I chose to do that is because, as Americans, not everybody is having a great time doing that. In fact, there are too few of us that are doing a great job saving money for retirement. I found that a lot of the wellness financial literacy that’s out there, it falls short for a variety of reasons. A more practical, easy to understand approach is what’s necessary to actually help people to make real and lasting change. That’s what I’m working on. You rattle off a lot of things that I’ve been spending time on over the past couple of years and it’s all designed to try to take difficult concepts and make them easy to understand.

 

Clarifying financial intelligence and literacy. Making it simpler is always helpful in this day and age with the amount of information that we’re facing. Before your success as an educator and as a financial advisor for years, who was George growing up? What gifts were you given and how does that help how you help others?

I grew up in Northern Minnesota. I don’t know if that necessarily means anything one way or another. Many kids played hockey growing up. While I certainly did that, I found my niche in playing tennis. That meant that half the year you were playing inside and finding indoor court time in Duluth, Minnesota was not necessarily the easiest thing. It meant early mornings or late nights to be able to get out and practice. Fundamentally, tennis taught me that if you are single-minded and focused on doing the work, you’re probably going to be successful at it. It also gave me a short memory because after a point in tennis, whether it went great for you or went bad, the next point is right now. You need to make sure that you’re able to move past a success or a failure and get ready to take advantage of the next point.

Back to that whole self-determination piece, I made the decision that I wanted to play Division I tennis. I made the decision of wanting to get a scholarship and I made the decision I wanted to play at a small Division I school outside of a big city. I made a VHS tape of myself playing tennis and sent that along with handwritten notes to 70 different schools, and this was in 1995 or 1996, around that time. It was a long time ago before the internet, certainly. At least I wasn’t using the internet.

I was able to find that D1 scholarship outside of a big city and went to Valparaiso University. I had a great experience there. It just taught me if there’s something you want, don’t wait around for somebody to give it to you. Don’t wait for somebody to tap you on the shoulder. Make the opportunity. Do whatever it takes to get there. In college, I can point to a couple of different examples of people who did put their arm around me and said, “George, I see you as someone who could be a leader in this organization,” or “I see you as somebody who could be successful in this area.” That has always stood out to me. If you can give somebody a great reputation to live up to, and maybe see things in them that they don’t see in themselves, that can help people go a long way.

If you are single-minded and focused on doing the work, you're probably going to be successful at it. Click To Tweet

First and foremost, I guess one of the greatest lessons I learned and still employ is don’t wait for somebody to give you permission. If you have something that you want to do, especially in this world, you can learn about it, you can do the work to get there. Don’t let somebody stop you. If you’re in a position where you have influence over people, and you can help them along, you should be doing that. That’s if you’re an employer, a dad, a big brother or whoever. If you’re in a mentorship, if there’s an opportunity there, give people a hand up.

Division I college athlete, but it wasn’t easy when you started out. You had every excuse not to play tennis. Early mornings, late nights, indoors in a tough environment when it’s cold outside and a lot of people playing hockey, but you loved it, you focused on it. You learned how to bounce back from the game of tennis. Your success, your failures, you have another step to move forward. It’s a lesson that we can always be reminded of, too. It’s not necessarily what happens, it’s how quickly you can bounce back and what you can learn from it moving forward. That’s fantastic. Tell me now about what you do. What’s the most rewarding part about what you do?

When you get up in front of a roomful of people, people are never quite sure how they’re going to react to you because, “Is this just another financial guy who’s pitching me something or wants me to buy something?” “Is this a person I can relate to?” At the end of that meeting, having people come up to you and say, “Thank you so much. I get it. This makes sense to me now. I have a clear path,” and/or “Can we talk further because you’re somebody that I think can help me get to where I want to go?”

It’s the relationships and it’s breaking down those barriers of either not knowing or the skepticism. Actually relate with people, connect with people and then of course, help them out.

 

There’s so much confusion surrounded when we start talking about financial services, financial advisors, financial planning or confusing abstract concepts. The world you work in is incredibly complicated. I imagine that you would probably say the same thing that you find it rewarding to be able to break down these complicated, complex concepts into information that’s easy for people to understand. Take action on it, do something about it. You could have the greatest information in the world, but if people weren’t able to absorb it and then use it, it’s a waste of time. I’m fond of saying that I would rather be useful than be brilliant. Why would I want to do anything other than that? If I’m the smartest financial person in the world but I don’t have any impact, that’s a total waste of time.

Simplifying and clarifying it, and applying it to the particular client’s situation, challenges, and needs. What I like to do and I like to say is, “We’re a broker of information,” meaning, we’re connecting the best ideas from oftentimes the best clients that we have and sharing all of those. Saying, “This might be a good fit for you, but let’s explore the top 1, 2, or 3 options and then you decide what’s best for you. We’ll work together as a team to help you with that.” I have a similar approach. Will you give an example, perhaps how your services go into more of the practical or the technical part of what you do? How it helps others create and preserve more wealth and/or save in taxes?

There’s certainly a lot that goes into that. The first step that you have to take and I’m reticent to talk about goal setting, values, and finding your why because there’s a lot of that going on, but that’s where people need to start. To clarify and crystallize what is most important to them because that’s going to inform how it is that they’re going to use their resources. How are you spending your time and your attention? How are you spending your money? If you can answer that question, if you tell me that, I’ll tell you where you’ll be 5 or 10 years from now. You need to start with that.

We all know that but so few of us do it. Making sure that you’ve done that work in advance of having real conversations about financial planning, get that done first. Understand what’s most important to you. Understand what those goals are, what those values are, and do it as a family. That’s going to inform your cashflow and what changes you need to make if any. You can then talk about, “Here’s where we’re interested in going.” Because I know where I am, I can then look at where I want to be and then it’s a matter of closing the gap. People, when they think about financial planning, it’s abstract, but it’s as simple as it can be. “Let’s talk about where you are. Let’s talk about where you’re interested in going,” and once we’ve done that, then we can talk about important tools like working with trusts, ETFs, or whatever it might be. Qualified plans or pensions, commodities, and all of those things, but the first step is doing the important work of setting that foundation.

You need to make sure that you're able to move past a success or a failure and get ready to take advantage of the next point. Click To Tweet

I couldn’t agree more. In the Good Book, it says, “Where there is no vision, the people perish.” I can’t think of a more practical way to make sure you have a vision and a plan for your wealth and your income. At the end of the day, it’s a mathematical equation. Where are you spending your time, your energy, and your talents? How much is that producing? What are you living off of or how much are you saving and investing? Of course, where can we put the best work to achieve those goals?

I consider you a financial advisor because you absolutely are, but you’re more than that. You’re a wealth advisor not only for the person’s finances but also for contentment and more of a holistic approach, which I appreciate. After helping countless investors, business owners, entrepreneurs and your clients over the years and interviewing them on your Money Savage Podcast, what is the single best practice to implement to be successful in investing and/or building wealth? You’ve touched on the why, but maybe something that’s a little more hands-on. You’d say, “These top 5 or 10 investors have done this to accelerate their wealth accumulation and preservation of their wealth.”

I do think that there are true lines and are relevant to if we’re talking about a business owner, generational wealth, or whatever it might be, what are the characteristics of people that are successful with money? I definitely want to get into that. To close the loop on the last question, and it goes into this question as well, is pursue truth. When I say that, I mean don’t necessarily take somebody else’s word for whether a certain strategy is right or wrong for your situation. For example, if you were to Google annuity, you would get 80 trillion results and you would get results for people who all they wanted to do was sell you an annuity and you would get information about how terrible the annuities were. An annuity, like a trust, is neither a good thing nor is a bad thing. It is a tool that could be perfect for your situation, depending on what it is that you’re trying to accomplish or it could be absolutely terrible for your situation.

It’s not going to be easy in this world where we have the world’s lifetime of information at our fingertips in the form of a smartphone, but that’s such an important thing. The majority of intelligent people probably know that, but you need to figure this out for yourself and do research and talk to smart people in order to figure out if these solutions are right for you. To get back to answering your question, there are different stages of our financial lives. The first stage is what I refer to as protection. That’s people who are getting started. You need to factor in your cashflow, you need to get the right insurances, you need to pay yourself first. Start putting money away, you need to get out of debt, which is obviously a key thing. You need to set up your emergency fund and then you need to start socking money away. Once you get there, then the second stage is accumulation.

 

How do we start saving money? Rules of thumb and cliché stuff tell us we want to get to 15% of our income going to long-term savings goals. We want to have liquid money for the next ten years, midterm goals. We need money for the short-term as well. Once you get past that, you want to start looking at legacy planning and all that good stuff. The third stage of our financial lives is all about decumulation or using the money that we’re saving. How do you design that retirement income? Many of us are interested in passive income. How do I make sure that I’m making money as I sleep? How do I make sure that the money that I’ve saved will be there for as long as I need it? You can’t have that conversation if you haven’t already saved money. It’s impossible to do financial planning if there aren’t resources, but those are the three stages that we talk a lot about.

Let’s focus on the legacy one because a lot of our readers are high net worth or ultra-high net worth followers who are selling a highly appreciated primary home, business, or commercial real estate. They’re looking at large capital gains tax, but more so, they’re looking at not only tax deferral, but they’re looking for preservation of that and becoming more passive. The stat is now that there’s about $17 trillion that will pass from one generation to the next in the next twenty years. This is the largest wealth transfer in the history of the planet. These are known as the Baby Boomers, and they’re looking to get rid of the toilets, trash liability, employees that they’re having to manage, and all of those things and retire. Take those illiquid assets and make them, hopefully in a tax-deferred way, liquid assets. What are you doing to help educate the Baby Boomers and what tools would you say are, “Now that you’re in the legacy play, here are 1 or 2 things you should consider,” that maybe they’re not looking at?

The answer to that question is, the sooner that you can start having these conversations, the better. It takes time to actually put plans like this together. Tools like the strategy that you’re most focused on is obviously an incredibly valuable tool in helping people to accomplish their goals. When I say it’s important to have a time horizon for this, it’s because strategies like making gifts out of your state to lower your tax liability, certainly take time. Looking at strategies using life insurance certainly takes time. Like anything else, it depends on the client’s situation. It’s important to be able to take all those into consideration and have that complete plan when you’re talking about deferring capital gains, and you’re talking about making sure that you have money to support your current lifestyle. Those are all important considerations and making sure that you’re not tying up too much of your money in strategies where you become illiquid. That’s a horrible result as well. The liquidity, the market risk, leaving money to kids, not leaving money to kids, and all of those estate considerations that are going back to the whole thing. It’s important to be able to find the right resources in order to make good decisions because it’s incredibly complex. If you don’t have good guidance, then you’re probably not able to make decisions because you don’t want to make the wrong decision.

Shifting a little bit to more of the business profession. Some of the readers are financial advisors themselves, commercial real estate brokers or syndicators, operators. What would you say they’re missing if they’re missing anything? A better way to put it, not so much what they’re missing, but what is it about what you do and the folks that you connect with that are your outer team, the commercial real estate broker, business broker, estate planning attorney and CPA. How do they best leverage working with you? How do you collectively educate the client base to help give referrals and just share the information? Each one of us is a specialist in our area, so how are you best working with other professionals?

If there's something you want, don't wait around for somebody to give it to you, make the opportunity. Click To Tweet

It’s a matter of challenging the status quo. When it comes to me making the introduction to professionals that I work with is exactly how you described it. People have misconceptions about all these different strategies and all these different products or whatever it might be. A great financial advisor, a great commercial real estate professional, a great tax professional, they are not simply handing off or creating an email saying, “Brett, meet Steve. Good luck to both.” It is a matter of, “Let’s make sure that we have a cohesive plan for what we’re going to be trying to do. I’m going to stay an active participant in this planning process because it’s my job to help not only clarify and crystallize what you want to accomplish, it’s also my job to drive this process for actually getting it done.”

Frankly, if we’re talking about selling a business, or we’re talking about making a large transaction, what will stop it are the emotions. My fear of making the wrong decision, my fear of what am I going to do next? A lot of the value of a professional advisor is providing great information, making great relationship introductions, but then making sure that the whole thing gets done. So often I see in people that I talked to, you get all the way to the finish line, but it never totally gets done. It’s the emotions that come into play.

What’s the best way to accomplish not having the emotions come in the way?

It’s making sure that you’re starting with the end in mind. We talked about doing the important work. Since we’ve already done that work, we’ve already talked about why it is that I am putting money into this investment or why it is that I’m selling all my business or a portion of it. I already know this is what I’m going to be doing afterward. This is the benefit that this trust is going to give me. When we get to the end of it, we’re not going to get cold feet, we still might, but we can already then go back and revisit and say, “Brett, we talked about this. Here’s why we decided to do this. Here’s why you decided to sell the business.” Let’s assume that tomorrow, once you’ve actually sold your business, “Here’s your plan.” It’s doing the upfront work.

 

Reminding him of the why, the goal, the problem, and the pain points and then saying, “You’re in the point where it is emotional.” It’s tough, it’s challenging. It’s new. It’s a new tool, a new strategy, or a new relationship with the new person. “Let’s clarify again why you’re even here, what you’re trying to accomplish, and then what it looks like after we’re on the other side of this.” Whether you’re selling a business, real estate, the new financial advisor, new tax deferral strategy, such as the deferred sales trust, or whatever it is you’re saying, “Let’s remember where we came from, where we’re going and what it looks like after.”

Life is all about expectations. It’s the expectation about how this relationship is going to go when we get started. “Brett, here’s what you can expect from me over the next two weeks as I’m going to educate you on why this might make sense for you. Once we make a decision that this is a strategy that makes sense for me and my family in my situation, here’s what the implementation is going to look like. Here’s what we’re going to expect after it’s implemented and into the future. You can count on me that I’m going to be there to guide you along every step of that process. Does that sound reasonable?” It’s not a magic bullet that’s going to eliminate emotions, but we had the conversation upfront. We can at least manage through those emotions. If you don’t do that, you’re going to have a bad experience with anything.

It comes through of why you’re such a good advisor and a helpful resource for your clients. Shifting a little bit here, how do you stay centered on your values? What are some habits or disciplines that you’ve implemented in your life to stay centered on your values? More importantly, to stay encouraged to charge forward to reach your goals.

A couple of important things, the practice of gratitude is an incredibly important and extremely valuable tool underutilized. Every morning, I think about three things that I am grateful for. It could be anything. It could be in relation to my family, it could be in relation to my ability to get up and exercise or the fact that I live in an amazing place. We have so much to be grateful for.

Don't wait for somebody to give you permission. Click To Tweet

Arizona, right?

I do live in Arizona. I specifically mean the United States. We live in the best country that’s ever been around in the best time that any human being has ever lived in. I practice affirmations on a daily basis, “I am” statements. I say them out loud every morning. That is something I’ve been doing over the past couple of years. I could not encourage people to do that more, such a powerful thing. To remind ourselves that, “This might not have been going as great as I want it to or whatever. Life is tough.” Consistently reminding ourselves, “This is who I am. This is where I’m going. This is why I’m doing these things.” We’re all well aware of the responsibilities that we all have, but it’s more a matter of, “I’m making the sacrifices on a daily basis because of this future life that I’m working for.” Gratitude and affirmations, those are two things that really helped me a lot.

The practice of gratitude and the I am statements, clarifying your vision, where you’re going, what your values are, and saying those out loud. I love that. The Miracle Morning comes to mind, a book that I read years ago. I’ve tried to practice a similar practice every morning of silence, of meditation, of affirmation, of reading. I read the Bible. Focusing on what the day lies ahead. Visualizing the day which has helped me stay encouraged and stay centered on my values too. Thank you for sharing that. George, can you remind our readers again where they can find you and also, I want you to plug the StriveDetox.com. We touched on that briefly but give our readers what that’s about and where they can join that group.

People could find everything that I’m working on at GeorgeGrombacher.com, specifically the Strive Detox. It’s a strive online two-week Bootcamp. It’s everything we’ve been talking about. It’s easy for us to fall out of whack with things. It’s easy for us to fall into the trap of too much screen time, social media, fantasy football and gaming. It’s easy for us to fall out of the routines of our exercise and our diet. All of a sudden you wake up and you put on 5 or 10 pounds or whatever the case may be. It’s also easy for us to fall on the trap of losing track of our cashflow and spending a little bit too much.

Just like meditation, our minds are going to wander. Whenever that happens, we pull it back to center. They wander again, we pull it back to center. With your mind, body, and money, every once in a while, we just need to hit reset and pull things back to center. That’s what the Strive Online Bootcamp is designed to do. It’s a two-week period where you examine on a daily basis how you’re spending your time, how you’re spending your attention, and how you’re spending your money. If you’re not intentional about that, there are a lot of forces far greater than us in the form of marketers and the internet who are trying to take those things. It’s important to be intentional about it. That’s the reason I created it. It’s StriveDetox.com.

George, I want to thank you again for being here. I want to thank our reader for reading another episode of the Capital Gains Tax Solutions Podcast. As always, we believe that most high net worth individuals and those who helped them struggle with clarifying their capital gains tax deferral options, hopefully, they had a chance to learn a little bit from George. The approach to building wealth, accumulating wealth, and leaving a legacy in a way that’s going to bring you contentment. Clarifying your vision for moving forward so you can have more wealth to give and to save and to live off of. As always, we believe not having a clear plan is the enemy and using a proven tax deferral strategy is the best way to grow your wealth. Until next time, make it a great day.

Important Links:

• Figure It Out Podcast
• Money Savage Podcast
• Money Alignment Academy
• Financial Consulting Professionals
• StriveDetox.com
• GeorgeGrombacher.com
• The Miracle Morning

About George Grombacher

A 20-year finance industry veteran, podcaster, writer and sought-after speaker, George is working to help people lead happier and more contented lives. He spent 10 years with a Fortune 100 company as an advisor as well as in leadership positions where he impacted thousands of lives and developed training curriculums. He then founded a financial firm and upon recognizing the need for a different kind of financial literacy program, George launched Money Alignment Academy. It’s his desire to help people become the best possible versions of themselves. “Financial Peace of Mind Allows Us To More Fully Pursue Our Passions.” If a passion of yours is money, investing and following the markets, great! For the rest of us, George wants to help people gain control and have an understanding of their finances so they are free to focus their time and attention on the things that bring them joy.

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• capitalgainstaxsolutions.com
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