In today’s episode, we will speak to my friend Stephen from Navalign (A financial planning and investment management services firm in LA).
Stephen is another one of my friends whom I’ve met at Fincon last year. He is a well-spoken Certified Financial Planner and helps his clients to cover their financial planning needs by advising them on: Investing their money, providing financial advice and tax and estate planning among others. He mainly works with high-income entrepreneurs or independent contractors in the entertainment industry. Some have been saving and investing long before I was born while some are just getting started on their personal finance journey.
We will discuss a few lessons learned based on Steven’s experience with his clients and see how we can apply these even though we do not make millions. We will cover Stephen’s approach to investing in equities (stocks), how the rich invest and in what specific assets they do invest, why it is important to plan your taxes well (Do the rich use all the tax loopholes in the book?) and finally how to develop a positive money mindset.
This episode is for you if you are curious about how the rich manage their money and more importantly what their money mindset is and how you can develop that positive money mindset regardless of your current situation.
- The coronavirus outbreak is not the first pandemic, nor the last we will see. A pandemic leads to a lot of volatility in the stock markets (large price movements). Stephen’s advice here is to not try to react too emotionally with quick moves: Do not pull out too quickly from the markets nor go “all in” hoping to buy the dip. Instead, keep a steady and disciplined approach and invest over time by Dollar Cost Averaging (invest a fixed amount on a regular basis).
- You invest in companies, not because they will be good in one or two months. You invest because you believe they will do well for many many years to come. Keep a long term perspective.
- You and I as retail investors can also invest in commercial real estate through companies called REITS (Real Estate Investment Trusts). These companies are stock-listed which makes them much more liquid than buying properties with a group of fellow investors.
- Asset location: Figure out which type of tax-advantaged/tax-deferred accounts you can use to minimize the taxes on your investments. The rules and types of accounts differ in each country, so consult with your local professional.
- Some of Stephen’s clients earn a couple of million dollars a year, yet some of them still do not feel wealthy. They do not flash fancy stuff, nor spend their money frivolously. They made their fortune by themselves, they value that dollar and understand the sacrifices. They focus on their goals, not on stuff. And I really like what Stephen said: Nobody on their deathbed said I wish I had more stuff, I had more money,…
- Develop a positive money mindset: “It’s not how much money you make, it’s how you save and spend it that’s most important”. Automate your savings, increase your savings when earning more, and make it a game with yourself: How much more can I save? When you reach your goals, set the next goal. Stephen started with saving as little as 50 USD/month and this has increased over time, if he can do it, anyone can do it. Start to develop that positive money mindset today. (I know times may be tough today, but keep a long term perspective)
Who is Stephen?
Stephen Rischall is an award-winning Certified Financial Planner and public speaker.
He started investing when he was 13 years old and has been recognized as one of the top financial advisors in the USA.
Stephen is one of the co-founders at Navalign Wealth Partners in Los Angeles, California, managing over $350 Million dollars of client assets.
He mostly works with clients in the entertainment industry and business owners
In his free time he enjoys being outdoors – backcountry skiing, mountain biking and hiking. You can find him online @smartmoneysteve on Instagram, Facebook and Youtube.
- Website: Navalign
- Twitter: @smartmoneysteve
- Instagram: @smartmoneysteve
- Facebook: @smartmoneysteve
- Youtube: @smartmoneysteve
- Book recommendation: Don’t sweat the small stuff – and it’s all small stuff
- Best purchase under 100 USD: Gym membership
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