Even in a small firm or for yourself, a financial plan is very important. It’s a road map, a guideline, and a reminder of what you want to accomplish.. But in this contemporary time, what is the optimal way to maximize money and maximize your life ?
In this week’s episode, Ascent Personal Finance Founder Zechariah Schaefer joins us to discuss the ever-changing financial industry for Gen Z and Millennials, crypto, retirement, and much more. Zechariah Schaefer is an Advice-Only Financial Planner for Gen Z & Millennial Crypto Investors & STEM/Healthcare Professionals. He founded Ascent Personal Finance to empower young people to build financial freedom.
Ascent Personal Finance empowers young people to reach their financial goals by helping them with their crypto investing, taxes, budget/credit, starting businesses, and more. Zechariah Schaefer ensures to have a methodical financial plan that is updated regularly for a successful life ahead.
If you’re interested in building your holistic financial plan, listen to this podcast on Actions Antidote!
—
Listen to the podcast here:
Podcast: Play in new window | Download (Duration: 45:32 — 41.7MB) | Embed
Financial Planning May Look Different for Gen Z and Millennials with Zechariah Schaefer
Welcome to Action’s Antidotes, your antidote to the mindset that keeps you settling for less. Today, I want to talk to you again a little bit about our finances. Finances, not always everyone’s favorite topic to talk about because we’re really talking more about our passions, but finance, first of all, can be a source of passion for some people and also can be a source of power for people if people are able to handle their finances properly. My guest today, Zechariah Schaefer, is in the business of helping the younger generation of people handle finances. As you know, there are generational differences and different groups of people like to handle things differently and Zechariah has his own unique formula of not only helping the younger generation handle their finances but also bringing the service to people who are usually not quite served as often by the financial planning community.
—
Zechariah, welcome to the program.
Yeah, thank you, Stephen. It’s an honor to be here.
So, Zechariah, tell me a little bit about your financial planning services.
Yeah. So what I do is I run Ascent and Ascent is a registered investment advisory firm with a sister tax prep firm, literally, it’s just a sister firm for legal purposes and what we do is we help Gen Z and millennial really high performers to manage their money well, to manage the life resources well, to pay less taxes, still pay their fair share but not leave the IRS a tip, and then to invest wisely. And really our specialty is working with crypto investors and with tech professionals, we have equity compensation and the reason for that is simply I’ve been in the crypto space for almost a decade and before I ventured into finance, I was well on the path to becoming either a dev or working in cybersecurity, which I’m still very passionate about those spaces, they’re really cool.
Yeah. So what makes someone a high performer? That’s how you phrased it, right? Yeah, so what are you looking for in a client? What makes someone that?
Yeah, so the people who I work with, which we’ll get into this later in the episode I’m sure, but my passion really is helping people who can’t yet get advice. Gen Z and Millennial high performers, people who are really high income earners, usually $200,000 and up a year. They, surprisingly, are actually part of a group who can’t get advice right now because the traditional financial planning models are either focused on managing investments or selling products. And so if you’re a 25-year-old with a $300,000 total comp package from Meta and you also have a whole bunch of crypto, if you go to a traditional financial advisor’s office, what they’re going to tell you, if they’re one of the really high quality firms is what they’ll mostly say is, “We’re happy to meet with you for an hour, give you some tips, but come back to us when you have $5 million or $1 million.” And the reason for that, they do great work but it’s extremely profitable when you work with those people so that’s why they don’t accept people who have less assets. The difference is that I simply — it’s basically a subscription and then, eventually, I do turn into that assets under managed model. The goal, eventually, however, is to — most wealth management firms, what they do is, as they get bigger, as they grow, they work with people who are richer and richer and richer and reject everyone below. Fortunately, I’m going to have to do that to a certain point but then, the goal, like you and I talked about is to use the free cash flow, maybe some debt, maybe raise capital through equity raise and build an AI or machine learning-powered financial advice engine which is funded by the $1 to $2 million in free cash flow that gets a team of data scientists and software engineers to really build out that minimum viable products and what actually would happen is that the single mom with two kids who’s struggling, who needs tailored advice because their situation isn’t cookie cutter but doesn’t have the assets and doesn’t have the income to pay for it should be able to get advice in that scenario. And that single mom was my mom that’s why I’m passionate about it. Yeah.
So, that was your story growing up and I’m guessing that’s why you have the passion that you do for getting financial advice to people who are traditionally, as you say, ignored by the financial advising community because you said, traditionally, in the financial advising community, they are just looking for the person who has a million dollars in assets or above to manage as opposed to the people who are just getting up and earning it or something like that.
Yeah, exactly. And I started out with my business actually trying to help that group of people right away and I just realized that, really, there were two paths forward. It was either run a charity and help 60 to 100 families who are really underprivileged and do a great job for them and get paid pennies, which is very noble, if there’s anyone out there doing that, that’s great. But it’s either do that, which doesn’t fully solve the problem, or build this business and build something that is scalable where everyone wins. Because this AI advice engine that I’m talking about, this is years out and someone else may build it faster and that’s okay, but what it’s going to do, no matter who builds it, is it’s going to allow advisors to serve more clients and do a better more calculated job for them, and do it cheaper for the client while still getting paid either the same or more, not unlike travel agents, where people think the internet killed them. The Internet didn’t kill them, they just either specialized or the new era of travel agent, the virtual, one came in and that’s going to be the same thing I think with advice. You’re going to have this level of virtual advice with maybe a human touch and then, at the top end, you’ll still have fully human.
So I think this is a situation that a lot of people find in business where you have to pivot a little bit and move toward maybe something that wasn’t your initial target but keeping your initial target in mind for a longer term. Is there a certain feeling you have around that and saying, “Okay, I did a little bit, something different, I’m serving a little bit of a different client than what I initially intended but I’m keeping going by knowing that this is eventually gonna get me to the place where I’m having the exact impact that I want to have”?
Yeah, I mean, I think, for me, I just had to really work through it myself and just ask myself the question am I just selling out, because I don’t want to sell out, I want to help people who can’t get help. And so, right now, I am thankful that I still have the blessing of serving people who can’t get help, it’s just those are the 20- and 30-year-olds who are the most successful in their friend groups as opposed to the 20- and 30-year-olds who really need help but can’t get it yet because they don’t have high incomes. But the goal, eventually, with that end in mind, I’m comfortable with the decision that I made and I think it’s just necessary.
Yeah, for sure. I had no idea that the 25-year-old who’s making $200,000, $300,000 a year still is unable to get financial help services. Is that because your subscription model is different than the other models? Does that allow you to get your pay off of the income someone’s currently making as opposed to the wealth they’ve already accrued?
Yeah. So, essentially, if I’m an advisor that just manages assets and I just charge, let’s call it 1 percent, if I meet with that 25-year-old, the only way I’m going to meet with them is if I’m just starting out and just building my business. Because if I’m not, I already have 50 to 100 clients who have $1 to $2 million each, so $10,000 to $20,000 in revenue a year each or more and they’re sending me referrals so why would I meet with that young person? So if I do it, I’m still providing a really premium service with massive value and, therefore, I charge premium prices, my minimum fee is just under $5,000 a year, but if they’re making $200,000 a year, in my opinion, obviously, some people will disagree, but in my opinion, it’s a no-brainer because I’m going to do their financial planning, I’m going to do their tax strategy, their investment management. The tax preparation is included. Sometimes, that means me doing it, sometimes that’s my CPA doing it. And so the value is just massive there.
Let’s say someone’s making $250,000 a year, for example, and they don’t have a nest egg yet, as some people refer to it, but they’re going to spend $5,000 a year and then you’re going to handle all these things. Does this include like a return on investment or some kind of, like you talk about tax mitigation, you talk about some other disaster planning, some other types of areas, the full suite of what financial planning does?
It absolutely does. And so what I tell people is that we need to focus on what matters and what we can control, specifically, the intersection of those two. Where we take action, it’s not the investment stuff because, statistically, passive management investments for almost everyone out there is the way to go. Extremely hard to generate outsized returns, in general, and then do that consistently. And so with my clients, with their investments, we’re just putting them in the market, we’re doing nothing insanely special, but we’re focusing on, like I said, things I control and the biggest areas are the tax strategy and really the behavior management. And in the same way that the best athletes have coaches, some of my clients are — all of them are extremely smart. I joke, they’re all smarter than me. They’re really smart and so me there just pushes them to the next level. And sometimes that means they already knew all of the hard numbers but me having that conversation and saying, “Hey, have you considered saving more? Have you considered this?” just pushing them a little further,
...if they save even 1 percent more per year, the ripple effect, the compound effect of that 40 years from now is literally millions of dollars. Click To Tweet
Yeah, so a big part of it is planning for the future for these 25- to 30-year-olds that are making a lot of money.
Exactly, yeah. And the way that I phrase it is I’ll build them a plan, and we have a plan but the course correction is really what matters because when you’re in your 20s and 30s, and really life, in general, life’s moving in a million miles an hour, and back in college, maybe your car’s moving at 10 miles an hour, if you take the steering wheel and throw it to the left, you’re going to turn left, great, you’re going to turn left pretty fast too. If you do that and you’re in an F1 car going 150 or 200 miles an hour, you’re going to flip. And so it’s helping them to manage life’s twists and turns while not just completely going off path.
And then also when it’s so intangible, like what even is a financial planner? And so, quantifiably, to answer your question, the way that I show my value is either money earned or saved today and then money earned or saved tomorrow and so I’ll show my clients the action of whatever, this tax strategy. Like literally last week, I was meeting with some clients who live in California and their company gives them the option to either be a W-2 employee or to be a 1099 contractor and we just ran the numbers and figured out, actually, they’re going to save about $20,000 a year by becoming a contractor, turning that into an S Corp, and then doing their own retirement plan as opposed to going through the company and getting their W-2 wages. And so that’s a situation where money saved this year, $20,000, money saved in the future, $20,000 compounding every year. If we choose to invest that, that’s huge.
Yeah, that is major and that is something that a lot of people don’t really think about. Obviously, it’s not taught in our schools to figure out the difference between being an exempt employee, being a contractor, having your own S Corp versus C Corp versus LLC B Corp. This is all things that people need to learn and figure out on their own and we can say all we want about the reasons why this isn’t included in our education curriculums but it’s not and it can cost a lot of people a lot of money. At the time of recording this, there was recently an article about a, I think just over $2 billion Powerball jackpot and the very same day, I got an email, one of my email distributions had a news article that said why most wealthy people don’t have the lottery mindset. Probably an artifact of how our education system teaches people, but do you encounter some of these mindsets that are really not conducive to wealth? Because just because someone is good at whatever job gets you that $300,000-a-year salary doesn’t mean you know anything about how to manage money or how to do accounting even?
Yes, no, you’re absolutely asking the right question and I like to tell my clients and really anyone that I’m not an investment manager and I’m not just the tax guy, what it really is is that I’m kind of the happy medium between their financial CFO, their financial personal trainer, and their financial therapist. And you’ll notice two of those three things don’t have to do with the hard numbers, they have to do with the behavior. And the reason for that is, like you said, your mindsets, your attitudes about money, you really have to master them or else nothing else is going to matter because it’s not about how much you make, it’s about how much you keep. So, if you’re 25 and you’re making $300,000 a year at Meta and you’re spending $300,000 a year and your company just lost billions on the Metaverse and you’re switching directions and now you get laid off, you have nothing to show for it. And that’s so sad because it’s a wasted opportunity.
What are these mindsets around money that commonly cause people to have their limitations on their experiences?
So, it really is different for everyone but the way that I uncover them is really just having conversations with people and asking open-ended questions and then asking why. One of the best questions, one of my favorite questions is simply asking someone what was your earliest memory of money, and when they say that, it’s like, “My earliest memory of money is when I was five and six, I always wanted to buy stuff at the store and my parents never let me and now I find myself buying all these things at the store that I don’t need but I can’t stop because I can do it now.”
That’s the therapist part of it.
Exactly, exactly. That’s kind of the therapist part. And then the other part is someone walks into my metaphorical office, my business is virtual, but someone walks into metaphorical office and they say, “I wanna have $10 million,” and I’m like, “Great. Why do you want that?” and they’re like, “I wanna have $10 million so that I can retire.” Well, why do you think $10 million is the number that you can retire at? And it’s like, “Well, I read this random article.” Okay, great. Let’s talk more. We’ll get back to this specific figure later. Why do you actually want to retire? “Well, I don’t love my job but it makes me a ton of money and I want to spend my time working in nonprofits or working at my local garden center,” literally an example of a client of mine. And then we’re able to really uncover things.
And then, sometimes, it’s simply helping people to understand what they really want, like you don’t actually want $10 million, you just want enough money to make income off your investments so that work can be optional. And then that’s where we can really help people set — I call them like their financial finish lines because, sometimes, you don’t even know the target you’re shooting at is 100 yards further away from you than you need it to be, like what if you only need 2-1/2 million and you already have 6 million but you think you need 10. Things like that are kind of the conversations we have.
So it’s like an evaluation of knowing where you want to go and why you want to go there.
Exactly, exactly. The whole name is ascent, comes from hiking, because I love hiking, I love the mountains, adventures, and I really view someone’s financial journey as the same process as hiking a mountain. And what do you do when you’re at the trailhead? You look at the map.
And that last bit, the plotting the course part, is the easiest part but we have to get there first.
Yeah. And so if there is the analogy of hiking a mountain, does the financial plan also include a lot of false summits?
False summits, I don’t know, but random twists and turns and meeting random hikers along the way and switching up the plan and switching up where you want to go, it definitely does include that. And that, again, goes back to what I was saying before about things that matter, things that we can control. With my clients, I like to build out like their key date timeline and, in a way, almost map out their whole life. But then, from the beginning, I’m training them and we’re always viewing that as open-ended. Because life changes. And I have clients who literally a year ago were child free, in different jobs than they are now, living in different states than they are now, and now they have foster kids that they’re adopting, they moved, and they’re at different jobs. And yet a year ago, we were sitting down and saying, “You know, we wanna do all these things. This is the finish line that we have.” And, yes, we plan for that but that’s where the control and the things that matter comes in where, okay, we’re going to go for that long term, but then what are the actions we can take this year that are going to have an impact? How can we just fine tune things this year?
Yeah, and for everyone, life is a journey, and so those things that matter can change as people progress through life. Is there an element of it that involves planning for that potential outcome, understanding that someone’s priorities might change and I can think of countless examples of people I know who said, “I don’t really have an interest in having kids, I don’t want kids,” but then whatever happens, I’m not a psychologist, suddenly, they want a kid and that changes your financial finish line quite a bit?
It definitely happens that way and this was a journey for me too where when I first started in the industry, I think that I held my own clients’ goals too tightly. Whereas now, I’m very open with them and, sometimes, they don’t know what they want and that’s great because blank slate, we can really work through things together.
Sometimes, they know exactly what they want and then part of my job is saying, “Hey, life might change, let’s not get too attached to this.” Click To Tweet
And then, next quarter, I’m meeting with them and they just decided to buy a house in this other town that they had thought loosely about living in. We hold things loosely.
And then I need to ask, if you have a top three or top five list of the stupidest things people spend money on.
See, that’s actually a great question and I’m going to give you a boring answer and the boring answer to that is that I don’t believe, well, with exceptions, but I don’t believe that, in most cases, something can truly be stupid to spend your money on. And the reason for that is that when I work with my clients, we’re figuring out their long-term plan, we’re figuring out their long-term trajectory and how to get there, and one of the biggest questions is simply, “How much do I need to save? And what is the manner in the most tax efficient way that I should save it?” And literally, I tell them that we can get super deep into their budget categories and everything else if we really want to, but at the end of the day, as long as they’re saving enough for their future so they’re not going to outlive their money or so they can achieve financial events when they want to, then they really should spend their money on literally whatever they want.
Even if it is a category of stuff that people say is a waste of money traditionally?
Exactly. And, actually, I have a great example of this. One of my clients, he spends probably hundreds of dollars a month on Hot Wheels with his son, like the Hot Wheels little like cars.
Oh, yeah, those little car toys, yeah.
Yeah. There’s like a whole industry out there about collecting them and everything else and he was a little bit reluctant to tell me because he thought I was going to say, “You shouldn’t do that, put it in your Roth IRA or whatever.” But, really, the fact of the matter is, is that him and his son really connect over these cars, they want to build a private car themselves one day, and the joy that him and his son get out of, when they go to Walmart or when they go to Target like rushing back to the Hot Wheels section and looking at the best ones, that’s so worth it. And so that’s where I came in and I said, “No, you should absolutely spend money on those, as long as it doesn’t interfere with the rest of your financial life.”
Earlier, you alluded to what people get intimidated by with financial planning. Is that one of them, the idea that your financial planner is going to tell you to stop spending money on the things that are bringing you joy?
Honestly, there are a lot of reasons why people I think are concerned or have a — what’s the word? I’ll think about the financial services industry. And really, it’s for a good reason. And it’s sad but I agree with them. And part of my process, I try to have it be as pain free and stress free and emotionally alleviating as possible. So, basically, I do a ton of work for them and prove them exactly how I’m going to help them before they pay me a dollar in fees or I manage a penny of their hard-earned money. And the reason for that is that the distrust comes from really intransparent fee models where you meet with your advisor and it’s free and they’re the nicest person ever and, somehow, every time you meet with them, you end up getting more insurance. It’s crazy it’s the answer to all your problems.
Oh, wow. Okay.
And so that type of thing breeds mistrust. Or, simply, people like Bernie Madoff and Ponzi schemes, that breeds mistrust. Or, simply, the concept of where are the clients’ yachts? In the sense of there’s an anecdote about a boy and his father walking down, I think in like the New York Yacht Show, let’s say, and the boy sees all the yachts and he says, “Dad, where’s that from?” and Dad says, “Hedge fund manager.” Next one. “Where’s that from?” “Portfolio Manager.” Next one, “High performing financial advisor.” Next one, “Real estate investor.” And the boy’s like, “Aren’t they supposed to help other people manage their money well and build wealth?” and he’s like, “Yeah,” and then the son’s like, “Well, where are the clients’ yachts?” Just the concept of that really ringing true so prevalently in most of the industry, that’s why it’s fearful and it’s emotionally taxing for someone to hire an advisor, aside from simply the fear of, “Am I doing everything wrong? What are they gonna say to me? It’s gonna be embarrassing.”
This seems like an aversion that a lot of people have in business, which is the idea that the person that you’re bringing on doesn’t have your best interest at heart, which this could be true for coworkers, this could be true for the people you start your business with, this could be true for partners, this could be true for anything, and I think one of the things that anyone that’s starting any business right now or trying to scale up any business right now needs to do is somehow build the confidence in their clients, their potential clients, the people around them that, say, it’s your business, you are the one, you have your clients’ best interests in heart, you want that client to succeed, and, of course, you’re going to succeed too and there’s nothing wrong with doing well for yourself if you serve people really well, but it’s about instilling that confidence and, anyone I do business with, I want to feel like that person has my best interest at heart as well.
Exactly, yeah. There’s a saying that one of my clients actually taught me and it’s that good is profitable and I genuinely believe, I can’t think of a scenario yet where doing the right thing, even though it may be costly in the short term, not only is it just the right thing and you should do it but also it’s pretty much always the best in the long term, business wise. And what you’re talking about with like is someone acting in your best interest, that alludes to the fiduciary standard, if you’re familiar, which is, for everyone listening, fiduciary just means you are legally obligated to put the client’s interests above your own. And another reason for legitimate mistrust in financial services and financial advisors is that there’s that question looming of does this person really have my best interest at heart? Why are they talking so fast? Why do they keep on throwing around all these big words? Why is it so confusing and complicated? And let’s say they’re more educated and they’re aware of the fact that not all advisors are fiduciaries, which is crazy to me that someone could call themselves an advisor and someone could tell you that, “Hey, I’m your trusted partner, I’m gonna help you achieve your dreams in life,” at the same time as them not being legally held to act in your best interest. It blows my mind. And so for anyone listening who’s thinking of hiring an advisor, I would make sure you hire someone who not only do you like and trust, because that’s the first thing, but then also make sure they are a fiduciary at all times, because advisors, actually, they can be fiduciaries while they’re giving you investment management and financial planning advice and then when they start talking about insurance, the fiduciary hat comes off and now they’re a product salesman, which is crazy that that’s how this is.
Yeah, I mean, it depends on the structure, and if anyone listening wants to talk to you, what will be the best way to get ahold?
I mean, if they want to Google me, that’s a great way for them to find me. And then aside from that, I’m all over LinkedIn. And my website is just simply ascentpersonalfinance.com, and I will say, I do really stick to that niche of crypto investors and tech professionals but if someone wants to reach out and you’re not in that niche, feel free to send me an email and I know tons of other advisors who are also just as specialized as I am but in different areas. So, odds are, I know someone who’ll work with you specifically. Yeah.
That’s wonderful. And so we were talking about understanding a client and having their best interest at heart and I guess I kind of misworded that and I was going to say is that is part of that actually understanding of client? Because there are people who go out there and give your general advice and your general advice would say something like these things are a waste of money, these things are a terrible way to spend money, but really a terrible way to spend money is kind of more individually focused, it’s more what is not bringing you joy but you’re spending money on it so maybe you don’t need to be spending $3,500 on rent when you could be just as happy living in this other neighborhood where the place will be $2,100 a month, or maybe this particular obligation is costing you $100 every weekend and you’re not actually enjoying the event versus just generally saying, “Oh, you spend too much money on restaurants,” or, “You spend too much money on toys,” or something like that. So, part of it is understanding the client and you have to really instill this confidence in the client that you know who they are specifically as opposed to just giving this generic advice.
You’re absolutely right.
There’s a reason it’s called personal finance and it’s because it’s personal.” Click To Tweet
The only thing that I define as a bad financial decision is something that does not bring value to the person in the present and then also detracts from their financial future. It’s not those rules of thumb out there like I, a financial advisor, running a wealth management firm, buy $7 lattes, probably daily, maybe more than once a day, but the thing is, I get so much joy from exploring coffee shops and working in them that I choose not to pay for an office and to instead do Zoom calls at home and go to coffee shops every day. Now, if I were to read a Yahoo Finance article or some other finance editorial, they’d probably say that I’m really stupid and destroying my future for that. But the thing is, I get a lot of joy from it and that’s okay. I tell my clients, and I think all good advisors do, that the more information and the higher quality information that I have about the client and the better that I know them, the better advice that I’ll be able to give them and the more that I’ll be able to generate the result that they want. And that’s why, for me, personally, I am capping the number of clients that I’ll accept and then I also cap the number of clients that I onboard at one time. So I only onboard two clients per month just because it is so time consuming and I do need to be able to invest a lot of time and thought into it and then I won’t be accepting more than 75 clients. Once I get to the 50 mark, I’m going to hire so that I have the time and thought to prepare and educate that hire well and train them, and then once I get to 75, I’m not quite sure what I’ll do but I expect that I’ll, hopefully, that hire will turn into a great lead advisor and I will be feeding them clients.
And so does it help with this whole mission to get to know clients? The fact that you’ve niched pretty much to, you said, crypto investors, millennial and Gen Z and tech.
It does help, very much so. And another thing that I tell people, if you’re thinking about hiring an advisor, if you don’t look like 60 to 90 percent of their other clients, then you probably shouldn’t work with them because, yes, working with advisors or generalist, okay, yes, you can give good advice to a doctor and good advice to a business owner and executive and a lawyer and an engineer, but the thing is is that it’s really hard to give excellent and great advice to a specific set of people, to anyone, if you don’t work with them every day. And in the same way, you think about doctors, yeah, you don’t want some random person off the street doing your deviated septum surgery, if I’m talking about things the right way here, but also, you don’t want a knee doctor working on your nose either. You want a knee doctor working on your knee and an ear, nose, and throat doctor working with your ear, nose, and throat system. And it’s the same way with finances.
So you want to have someone that understands your specific circumstance in life pretty well. In the case of your clients, they’re people who are I’d say under 40, in general, and people who are making that good amount of money in some kind of tech space. What is it specifically about those clients? Obviously, it seems like you’re likely one of them but also, is it a very different experience than someone who, say, makes a similar amount of money but is in a completely different industry?
I’ll answer that question in two parts. So, the first thing is I’m able to serve them really well because I’ve been in the crypto space almost a decade myself. I’m really passionate about blockchain technology, cryptocurrencies, digital assets. At the same time, I also have the mathematical background in finance and so I understand the implications of blockchain while also understanding the fact that there’s basically no fundamentals in the space and so it’s extremely hard to actually value those products. So I can talk the talk with my crypto investor clients and I can share my experience with them of the psychological mountaintops and valleys of crypto investing that I’ve gone through and the immense euphoria followed by immense anxiety, like a lot of people are going through literally this week —
Right now.
— the Celsius and Luna and all these other collapses that are going on. I can relate to them and talk the talk while also bringing in the mathematical side of things. And then with the tech side, I’m just a huge nerd. Literally, in sixth grade, I started getting into tech and software and building computers and things like that on top of just the fact that I wanted to go into the industry, was really seriously considering in networking within it. So like, at a, let’s call it qualitative level, I love connecting with those clients but then, yes, great question, like is it actually different? Sometimes, yes. Sometimes, no. Oftentimes, people in the same group have similar goals so a lot of tech professionals, sometimes people are engineers because they just absolutely love thermodynamics and sometimes people are engineers more often, in my opinion, because it’s a means to an end and what they really want is not to be the best engineer in the world, what they want is to FIRE, to achieve financial independence, and they want to do it by age 39.
Just for everyone listening out there, FIRE is an acronym that stands for Financial Independence, Retire Early.
Yes. And so, a common planning item for the tech people is that. Another common planning item for tech people, so much so that I’ve included it in what I say when I say who I specialize in, is the equity compensation. A lot of them have equity compensation and there’s a lot of really unique tax and employee benefits strategies you can do with it on top of simply dealing with the psychological implications of potential sudden wealth.
Because a lot of tech people, as you mentioned, are in that startup space, and the startup space is where you have those equity agreements so there are certain things that if someone were to become a young doctor where they’re making, say, you’re a surgeon specialist and you get to that $250,000, $300,000 a year salary but it’s still going to be quite different because you don’t get equity in a hospital and you don’t have the levels of ups and downs and probably less of them are a means to an end because if you’re saving lives, you’re probably getting a certain level of fulfillment out of that that some people may not be getting out of those specific things. So I think that makes perfect sense in like understanding that these are the common experiences of people in this industry in this age bracket. And I want to ask you also about the age bracket because we see a lot of people talk about generational differences, we have different experiences. The Gen Z-ers grew up with the internet all over the place, millennials had it happen to us pretty early on in life and that’s very different than some of the other generations out there today.
Yeah. Do you mean like is the age gap just as important as the affinity or profession niche?
Yeah, as far as understanding your client, because your clients are people, you mentioned the tech, you mentioned the cryptocurrency, you mentioned the ups and the downs, the equity agreements, some of these other things, the Financial Independence, Retire Early movement, is there specifics about the age bracket that make a lot of the things that you deal with oftentimes not applicable to someone that’s, say, 55 or 60 years old right now?
Yeah, yeah, there are. In the same way that talking about the very unique and specific tax strategy available to crypto investors is a lot different than what an advisor who works with retirees is just the age difference is just the same and so that’s why it’s called Ascent because it’s about climbing the mountain and climbing the mountain is a lot different than descending. And so we’re talking about 30, 40, 50 years from now, in the same way that a hurricane can be out at sea and you can think it’s going to either land in Charleston, South Carolina, or in Miami, Florida, that’s what we’re doing. Whereas with the adviser who’s working with 60-, 70-, 80-year-olds, the hurricane, not to compare someone’s financial situation to a hurricane, but the hurricane’s like a day or a few days from hitting the coast.
Yeah, the evacuation orders have already been made and people, whatever state governors are making their preparations.
Exactly. And so, while we’re having some similar conversations, I’m really helping them kick things into high gear and develop excellent habits early on so instead of paying for their decisions later in life, they get paid by them, whereas the advisers who’s working with 60- and 70-year-olds, they’re helping them as everything’s slowing down and they’re helping them to get their money ready to pass to their heirs in the best way possible and in a way that actually aligns with their wishes. And while I do a little bit of that, there’s just not as much of a focus on it. Or they’re helping them with the timing of their social security activation, when to take social security and they’re helping them get all the money out of their accounts in the most tax-advantaged way, whereas I’m helping them get all the money in in the most tax-advantaged way. Yeah, so it really is very different. On top of simply the dynamic.
And they’re willing to pay more money for that. Where maybe that’s not as much of an emphasis with retirees and pre-retirees. Yeah, so the quantitative and the qualitative differences are pretty big.
Yeah, it’s that portion of the journey and we’re all in a certain part of the journey, there’s the early part, the middle part, and then the retiring part. One last topic I want to ask you about as a blockchain, crypto, Web 3.0. enthusiast, I’m wondering what you see Web 3.0, meaning for — I don’t want to say the future of humanity, but what can we expect as people who understand Web 3.0, what it is, understand what cryptocurrency is on a very rudimentary basis, what it means for life 10 years down the road?
Great question. So, this is one of those things that we can’t control but that does map. And so I, like I mentioned, am so passionate about crypto and blockchain. I think it’s not only the coolest thing ever but could do some real good for the world. That said, cryptocurrencies could go to zero, most of them will, maybe all of them, and blockchain could still be the infrastructure the future of the world is built on in that scenario where cryptocurrencies go to zero. And so I think — I have no idea what’s going to happen, I don’t have a crystal ball, but all that said, that is part of what I help my clients plan for, not in the sense of saying, “Sell all your crypto, the sky is falling,” but in the sense of saying, “It’s not a sure thing.” The tech, in my opinion, is about as close to a sure of a thing as we have in the space just because blockchain tech and distributed ledger technology, anyone who’s educated about it, believes, almost without a shadow of a doubt, that it’ll be the future. But the problem is is that there’s a lot of parallels to the 90s dot com bubble right now and we just don’t know what is pets.com and what is Amazon. And even if you invested in Amazon in the 90s, it took 15 years to make your money back so there’s just no way to know what the future is. But to answer your question in a way that doesn’t answer your question, I do believe that blockchain or distributed ledger tech is the future, I just don’t know what it’s going to look like. And anyone who is making really, really broad statements about what it’s going to look like, I would be careful of because they don’t know either.
Yeah. Well, I read the book Life After Google, I don’t know if you’re familiar with it.
Actually, I’m not. I probably should be but…
Oh, it’s a futurist named George Gilder and he’s famous for having written Life After Television back in 1993 and predicting a lot of like, “We will have tiny pocket computers,” which is our smartphones today, and this book was written in 2018 and it essentially outlines what he believes the new value system of the Web 3.0 world and how it’s going to be different from the value system that the Web 2.0 world was all about and I think the number one takeaway I got is that Web 2.0 was all about give everything away for free and then make money off of advertisements and his belief is that the Web 3.0 world is going to be more about micro payments for everything and that’s going to create a very different incentive for how we use our time and also how we look at a lot of the services we do, such as even journalism, something that is kind of in crisis now.
I don’t know what the future is going to look like but that seems like a legitimate possibility. Just like in a lot of areas of life, like politics, religion, other things. Sadly, people’s thoughts about Web3 and blockchain and crypto often are pretty extreme and, really, the reality is it’s often in the middle. I personally have a lot of friends who are Bitcoin maximalists and, well, honestly, I don’t hate the world that they paint, the ideal that they paint, just the realist in me doesn’t think it’s going to happen, even though a world where the individual has all of the power and the tables have turned sounds nice, realistically, I just don’t see it. But I do think that somewhere in the middle could happen, the microtransaction is very legitimate, things where taxis are self-driving and they pay for their own gas and the customers pay them automatically when they get in and things like that seems entirely possible.
Yeah. Well, as kind of a little bit of an amateur futurist, I can speculate on this for quite a bit of time, but I will let everyone out there, the listeners, figure out. I think the main thing that I’ve gathered from everything I’ve read is that most people speculate the future, they either take current trends and extrapolate them to go forward or they just pick like a thing that’s going to disrupt everything and say, “Oh, all of a sudden, we’re gonna go there,” and both are kind of traps in a way to fall into. I mean, we did all adapt these smartphones quite quickly, quite suddenly to be everywhere and we all have our thoughts and feelings about how that’s worked out. But, yeah, keep an open mind to like everything’s just really a distribution of possibilities.
Yeah. Taking one tech and expecting it to disrupt everything, that doesn’t sound like the Web3 or crypto space at all.
No. Well, Zechariah, thank you so much for joining us today on Action’s Antidotes, sharing a little bit of your story, your passion about bringing financial planning to people who are traditionally overlooked by the industry, a whole new set of people. The hope is that more people will get access to more services as other people take on different particular sub-niches of people as you’ve done. And I’d like to also thank all the listeners out there for tuning in to Action’s Antidotes, whether this is your first or 75th episode, and I hope you all have a fantastic day.
Yeah, thank you, Stephen, and thank you to all who have listened to this point.
Important Links:
About Zechariah Schaefer
In his role, Zechariah loves the challenge of communicating complex financial information and the joy of building long-term relationships with clients. He begins each of his partnerships with a series of conversations to discover and prioritize his client’s goals and interests. Zechariah is dedicated to his clients and works hard to provide high-quality service to ensure they remain on track to reach their financial goals. Zechariah also does a bit of consulting work helping other advisors start excellent, efficient firms. He’s currently working with Daniel Colston at Upward Financial Planning.
During his schooling, Zechariah discovered his passion for empowering others to achieve financial freedom through tailored education and mentoring. He completed his financial planning degree at Liberty University and has worked at several premium boutique wealth management firms. He recently passed the Certified Financial Planner exam and is expected to be completely satisfy the education, experience, and ethics requirements of the CFP board by early 2023. He passed the series 65 exam in July of 2020.
One common theme that he noticed during his time working at those firms was the immense challenge that finding excellent, personalized financial help is for young people. He founded Ascent with the objective of providing this group of people with the quality financial help they need.