This episode provides an insightful exploration of financial literacy, focusing on the pivotal role it plays in shaping one’s financial future. Joe Pantozzi and his new co-host Jason K. Powers engage in a nuanced conversation that delves into the intricacies of personal finance, underscoring the necessity for individuals to take charge of their financial destinies through informed decision-making and proactive engagement. Pantozzi expresses his concerns regarding the widespread disengagement from financial matters that he encounters in his professional life as a financial advisor, lamenting the emotional weight of witnessing clients fail to take the necessary steps toward financial independence. His reflections on this issue highlight the human tendency to avoid confronting uncomfortable truths about one’s financial situation, which serves as a catalyst for a broader discussion on the importance of cultivating a mindset geared towards action and responsibility.

Throughout the episode, the hosts dissect various aspects of financial management, notably challenging the common misconceptions surrounding tax refunds. Pantozzi provocatively reframes the narrative, suggesting that tax refunds are not merely bonuses but rather indicative of overpayment to the government. He advocates for a re-evaluation of personal finance strategies, emphasizing the need for individuals to retain control over their funds and to make informed choices regarding their financial futures. This dialogue serves to illuminate the disconnect between knowledge and action, as both speakers stress the importance of translating financial literacy into practical application. They contend that true understanding of financial concepts must be coupled with the discipline to implement sound financial practices in everyday life.

As the episode draws to a close, Pantozzi and Powers reiterate their commitment to fostering financial empowerment among their listeners. They advocate for a holistic approach to financial management, one that encompasses not only the accumulation of wealth but also its preservation and strategic utilization. By urging individuals to prioritize savings and sound budgeting, the hosts aim to inspire a shift in mindset that favors long-term financial health over immediate gratification. Their insights not only serve as a roadmap for personal financial success but also function as a motivational call to action, encouraging listeners to embrace their financial journeys with confidence and determination. This episode stands as a testament to the transformative power of financial education and the critical importance of taking ownership of one’s financial future.

Links referenced in this episode:

• alphaomegawealth.com/podcast

Foreign.

This is Joe Pantozzi with Make youe Wealth Work, and really pleased and somewhat relieved to be introducing you to Jason K. Powers, who's my co host on our podcast.

And this is absolutely a form of rebooting of make youe Wealth Work.

And Jason is going to be doing at least half, if not more than half of the heavy lifting with me when we tackle the subjects that pretty much everybody needs to tackle at some point in their lives.

So I'm glad you're here, Jason.

Thanks for being here.

Oh, yeah.

I'm excited about this new chapter for make youe Both Work.

I think it's going to be exciting as a ton of fun things coming down the line and.

And, yeah, I'm pumped.

I'm pumped up for it.

Glad.

You know, one of the reasons why I need Jason in my life is because he has this beautiful, positive attitude.

It's.

It's a fresh attitude.

Now, I am an optimist for 99 of life, but because I've been doing financial advising, coaching, mentoring, however you want to describe it, for so long, I get my heart broken a lot.

And it's not because of the clients that I have.

I get my heart broken when I talk to people and they wind up not taking action.

They.

They wind up not going anywhere.

I don't care if they wind up hiring somebody else and working with somebody else.

What I care about is people not being prepared at all, not taking ownership of financial literacy, not teaching their kids, God forbid, not having insurance of some kind or preparation when there's a loss.

And so the burden of that sometimes becomes heavy.

And, and I have to realize not everybody's going to take action.

And some people are just going to get sick or die or graduate or get disabled, and they're just not going to have what's in play, what's.

What should be in place.

They're going to die without a will, all this stuff.

And, and Jason has, I think, kind of a philosophical attitude that is.

That is refreshing for me.

That reminds me, hey, Joe, you know, there's a quarter, there's 300 million people in the US and we can't help them all.

So we can help the people we can help.

And fortunately, we're not the only podcasters on the planet that are talking about financial diligence and literacy and thriving.

There are many, many people who are, who are good at.

And there are many, many people who are just telling an ordinary story, which is good.

And I believe that the airwaves, if you will, are more saturated than they were 50 years ago with people talking about wealth and money and stewardship and the right things and inheritance, a lot more people talking about it.

I don't know necessarily that the percentage of people becoming more responsible is increasing.

I just know that we want to be available for the people who do want to take action, who do want to learn.

And I'll just say this before I shut up and let Jason talk for a minute, is we don't want to have these prepackaged solutions and have people pick up on them and just take them on and assume that they're fine.

We take, I believe, a little bit more difficult approach for us, which is taking an interest in transmitting financial intelligence, financial literacy, financial research, the data, the history, the economics to people.

And people have to take responsibility for owning that information and then applying it in their lives and executing it in their lives and their business and their inheritance, their heirs, their posterity.

So it's not just saying, we're financial planners, we know how this works.

Don't try this at home.

And then having people just follow us blindly, we take a longer path, which is helping people obtain, receive, and process the education so that it makes sense for them.

That's right.

Well, there's a, There's.

I think we have a propensity, right, as humans to.

We're constantly trying to take in information.

Well, especially today in the, in the social media world, right?

We have this, you know, what is.

We just joke about whatever it is, 38 characters or less, and I can retain that information, right?

But if it's anything more than that, then it's too much.

But so we have this constant feeding of information, which probably started, you know, more or less when we got into heavy advertising in our culture, right?

And this, this constant feeding of information.

And so we think we're learning.

I think a lot of us, we're constantly intaking information.

We think we're learning.

And we may, it may become head knowledge, you know, but we're not applying it, as you're saying, right?

We're not.

We're just taking it in, but we don't actually apply it.

So we know a lot, but we're not doing, you know, the doing is what we're, you know, it's like my mom used to say, you got to put feet on your prayers.

You know, we, we can, you know, hey, change my life, change my life.

But if you don't ever actually leave the house, how's it going to change?

You know, feed him.

And I think it's that way yeah, yeah.

So that's, I think that's our goal, right, is to just, we want to keep teaching people.

We want you guys to listen the listeners, to learn.

And, and then we want you to apply it.

Yeah, and apply it and go, okay, yeah, that's me.

You know, if you're like, this is me, man, you're totally describing my life right now.

And, and apply it.

Or, or call us and we'll help you apply it.

Yeah, for sure.

And, and get, get feed on your prayers, so to speak.

I hear a lot of people, I sense a lot of people responding to information by saying, okay, I get that, I understand what you're saying.

I know where you're going.

Tell me what to do.

How does this work?

Give me the, give me the 50,000 foot synopsis, finance for Dummies.

Well, man, you know, if you've been working any length of time, I don't care if it's 10 years, 20 years, 30 years, 50 years, you've had millions of dollars come through your hands.

And for most people, they're allowing it to slip through their fingers as quickly as, as it comes into their possession.

As soon as we, we spend a week, a month, a quarter, a year working hard for that money, we're letting it slip through because we're assuming that all these creditors and financial institutions and collectors cannot be changed, the formula cannot be changed, the proportion of money going out of the house cannot be changed.

And for many people, it's 100%.

They're taking in X and they're sending out all of it.

They're sending out 100% or in many cases more than 100% because they're in, they're in debt.

So wasn't it Nelson Nash that said, even, like he said, it's not about how much you earn.

Right.

But what's the second half, how much you keep?

Yeah, and I think that's it.

Right?

We can earn all day long, but how much of it are we keeping or building or growing?

Now, even though we're going to talk about some, some elements that, that, that cause unintended consequences, and I'll refer to a book by Len Rainier.

It's, and the book is called Unintended Consequences.

Ra going to refer to that.

But that also has an element of how, it has an element of process and we'll talk about some of those steps.

But at the very fundamental level, there are some people I know who have just taken the bull by the horns.

And for them, they say, you know, it's kind of Common sense.

If I make $100,000 and I save $30,000, then everybody else can have the rest.

I just got to make sure that I can take care of my family first.

And I think that balance has been lost.

I think that priority has been lost because our culture is so busy.

We're such a rich nation.

We're having to make sure that if our next door neighborhood got a new car or a newer car, that we now we're going to take a second look at our car and say, you know what?

It's time, you know, Harry next door got a new car.

Don't I deserve a new car?

And then the cycle continues.

And we apply that in every, every aspect of our lives.

And pretty soon we're forgetting that we want to have some, some money set aside in a pocket, hopefully a very large basket for future things, for future investments, for retirement, for the kids, college, et cetera, et cetera, et cetera.

So in many ways, I tell our associates, I think I want to change the title of my card to CRO, Chief Reminding Officer.

Because many of the things that we speak about with our clients has to do with reminding them of the things that they often already know.

Everybody knows in their gut that you should save first, you should put yourself first and then let everybody else, the collectors, the lenders, the finance companies, the automobile companies, they can all get paid second.

And so human nature being what it is, people will make all these excuses and say, well, I can't see daylight.

I don't have any, any money left at the end of, of my month.

I only have month left at the end of my money.

And so it's, it's reminding.

This is, it's not rocket science, but it does take, it takes habit, it takes routine, it takes diligence, it takes discipline.

And by the way, I hate all those things.

I mean, I hate discipline.

I hate the word economics because as soon as I say the word economics, I think half the people's eyes glaze.

Economics.

What in the world has that got to do with me?

Well, it has to do with your managing the resources that come into your house or your business, right?

It's always ultimately your house, the resources that come into your house and how to allocate them to all the things that you've already decided in advance that you want to spend the money.

And that's economics, right?

It's, it's the, the production, the conservation, the distribution of limited resources.

And we can, you know, we can, we could use fancy language, but I'm not A fancy language guy.

Let me remind you of the things that you said you wanted to do 20 years ago.

Well, and even spinning off of that, I think that's a good segue to our conversation today.

We have this idea of what our money's doing, but how often is it really?

Like we just talked about Nelson Nash saying it's not about how much you earn, but how much you keep.

And there are so many ways that money is just constantly coming in and then leaving the household.

Right.

And it's a one way street now.

Some of it you write, what choices do you have?

Groceries and standard bills.

But a lot of it is well within our control, but we just don't realize it.

You know, often, I think more often than not, as you and I explain this to people, it's, you know, you don't know what you don't know, right?

Yeah, it's, it's helping people.

I didn't know about this.

I mean, 10 years ago I was, I was just hearing about it and, and it was like this light bulb went off and I was like, what in the world?

You know, what am I doing?

And I was like, oh, okay, okay, okay, I get it, I get it.

Let me.

And you know, but it's a process, right?

So learning, learning, learning and growing and applying it and, and trying to turn that around.

So, so I think let's, let's, let's dive into a few examples.

Joe, maybe, you know, the first thing that comes to mind, which is a big one for people, and there's a lot of different opinions, are taxes.

Like if we tackle taxes for a second you mentioned years ago, and it never occurred to me until you said it about getting a tax refund.

And I was like, when you first, I think when you first mentioned it, tax refund, right now, as I say, the listeners right now, what's the first thing you think of?

You think of, oh, sweet, I get some extra money at this time of year and, and we go, okay, great.

And that's the way I always saw it until, until Joe, you said something along the lines of, right, you're, they're giving you back money that was yours to begin with.

So you just, you overpaid, you gave them money to hold onto for you throughout the year, and now they're giving it back and could you have better utilized it yourself instead of giving it to them to hold for the year?

Oh, my goodness.

You know, and this light bulb went off and I was like, what, what?

I never thought about it that way.

You know, so Typically the refund comes in the spring, Right.

If you file your taxes by April 15th or thereabouts, you're going to get the refund at some point within a few weeks or so.

And isn't that great?

My refund is going to come along right in time for me to spend it on summer vacation.

Great.

So like Jason said, what you just did was you gave an interest free loan to the government.

Now, the same people that love tax refunds often are the same people that say, okay, hey, this financial deal or this financial vehicle or this financial tool you're talking about, what's the rate of return?

Well, why is rate of return important to you if you don't mind lending money out at zero?

So if you were a banker, and we're encouraging our clients to learn how to think like bankers, think like business owners, think like entrepreneurs, think like owners.

If you're any one of those, you never want to put money to work at zero.

If, if that's going to happen, well, then keep it home, right?

So why wouldn't I keep that money in my own bank?

At the very least, you lent it out at zero.

Why wouldn't I want it sitting accessible in my own account at the same rate at zero, but at least I have access to it.

What you did was when you sent the money out to the government and prepaid your taxes or you had withholding taken.

And some people do this intentionally.

I have extra money withheld so that I can have a savings at the end of the year and then I'll use that savings to pay off a car loan that's close to being paid off to, to pay the kids tuition, to use, use it for a getaway, to use it for vacation.

Well, why wouldn't you want that money earning at least a few points of interest when you're so concerned about rate when it comes to other things?

You want your savings account to earn you something, you'd like your, your retirement or your investment account of some kind to earn you something, but you don't mind lending money to the government.

And no offense.

Well, yeah, it's offensive.

I want to be offensive.

The government's the last thing on the planet that I want to send money to.

Look what they're, look what they're doing with the money that they take from us to begin with.

And we won't go down that road because that'll be a six hour conversation for starters.

So taxes, you know, think about what you're having withheld.

Look at what you've had withheld and refund it back over the last several years and determine whether you could lower that number, use that money more efficiently.

Because very often the same people who are getting a tax refund are the same people who are paying interest costs on car loans and credit cards.

You're paying interest, excessive interest, sometimes toxic interest on loans that if you had had that refund money in your check on a regular basis, you could pay off those debts sooner and save yourself interest.

So if you saved your self interest on a credit card, that's the same as earning interest, right?

Was it Ben Franklin who said a penny saved as a penny earned?

So gee, when, when credit cards.

And we'll get to that later, when credit card rates are 29%, if you have a bill of $10,000 that you owe to the credit card company, 29% means you're paying the credit card company $2,900 this year.

That's serious real money.

So you got to put these things together.

I want to have money saved up in taxes so I can get the money back and spend it on something.

Spend it on what?

Well, paying them off my credit card.

Well, you wouldn't have that credit card debt if you had gotten the money periodically and spent as you earned.

Another thing on taxes is, is making sure that you do understand what tax bracket you're in.

And this again, it's connected to retirement plans.

A lot of young people will say, hey, I want to put money into an IRA or into my 401.

Aside from the match, Separate discussion.

I get a tax deduction.

And I say, oh, you get a tax deduction, great.

That relates to taxes.

What tax bracket are you in?

Well, I don't know.

Well, let's take a look.

You made $14 an hour or whatever you made.

Shouldn't you know what tax bracket you're in in order to decide whether you should put your money in a tax deductible program to see if it's going to be of any value to you.

So please don't look at taxes as something that comes out of my check.

Something I have to pay, something I have to pay quarterly, and there's nothing I can do about it.

I mean, you're in control of your own economy within your own home, and no one's going to look after that money more diligently than you should.

Well, and like you mentioned, I mean, one of the thought processes that people have is I'm going to, I'm going to try to avert taxes a little bit.

And so I'm going To pump more into a tax deferred qualified plan, for example.

Right.

Master unmatched.

Right.

Without getting into that.

But a qualified plan.

And then again, not knowing your tax bracket, not knowing, is this advantageous for me?

Is this even in, do I even have other options?

You know, so many people, we've talked about it, don't know what they don't know.

I didn't know early on, right.

When you have options to put money in a qualified retirement plan, I was like, well that's the only way I can ever build for retirement because that's what we do.

You know, I wouldn't got a job here.

And they're saying, hey, you can put money into this retirement plan and whatever it is, right.

401k or IRA or 403b or SEP, get her, you know, and, and not knowing, you actually do have other options if you want them.

And why would you want to consider other options?

Well, here's a couple of reasons.

Do you know how much you'll be earning going forward in that account?

Of course you can't know, right?

So there's no certainty that you'll have a specific amount of money in the future.

There's no certainty that you'll have a particular income coming out of that account in the future.

There's no certainty that inflation won't decimate the money that's in that account.

There's no certainty that inflation won't be greater than the rate that you're earning.

There's no certainty that your tax bracket in the future will be higher or lower than it is today.

Now, what's my opinion, what's my suspicion, what's my fear?

The, the government is spending our money like, like there's no tomorrow.

And they continue to take, to increase the rate at which they take our money and they're spending money that they don't have.

Great discussion on the money supply and the economy.

Economy and the, and the fraud that the, that the Fed is perpetrating on us.

But for all those reasons, the government is going to need more money in the future.

Now if somebody says to you you'll probably be in a lower tax bracket in the future, they're probably selling tax deductible retirement plans.

And that's one of the, one of the carrots.

They're going to stick it in front of your face to get you to put money into that thing.

Because guess what, if I'm an advisor, a money manager, I'm going to get paid a fee based on how much money is in the account.

If you're putting the money in the account, remember pre tax, that means I get to manage your money and the government's money, which means I get a higher fee.

So at the very least there's an ulterior motive there.

You may be able to make more money by just suggesting you put money in a 401k or other deductible plan so I can get more money to manage.

What will it be worth in the future?

No one knows.

Why would I, why would I invest in any, any program whatsoever where I had that many question marks?

Yeah, it becomes a hard pill to swallow for a lot of people.

And I think it goes back to.

Everybody kind of starts to.

Once you understand your options, you start to fall into one, we'll say school of thought or another, right?

One philosophy or another.

And that's what happened with me was I was my past career.

There was absolutely no way I was ever going to retire or comfortably at least.

And I was like, there's no way, man, I can stick all this money in a qualified account and hope it grows.

It was risky for me.

And, and then I was even more hesitant to put money in, into those types of accounts.

And that's just my story, right, and, and how it unfolded.

And then I found this, this thing, right, this, this vehicle called the infinite banking concept.

This, this concept that, where you can really redeploy that money.

And that has become my school of thought, that's become my strategy for myself because I've just seen the negative effects personally on the other side.

So some people like it, some people want to stick with it.

It works for some people.

But I think it's important, like you said, you don't have guarantees on that side.

It's if this, that and the other if, right.

Throw whatever in there you need all these things that line up, right?

So let me just add one more point.

At the risk of beating this thing to death, and I don't think you can possibly beat it to death in a very short period of time.

But again, the same people who are interested in the benefits that they perceive in a 401k are also the same people who have toxic debt, credit card balances, and they're losing money hand over fist in the monthly outlay with all the expenses that they have to pay out because they don't have, we'll call it, sufficient income to live their life.

So they're making a sacrifice to put money into a retirement plan.

And the greed factor sets in because, number one, I get a tax deduction.

At what rate?

I have no idea.

And number two, I get a match.

I get an employer match.

Okay, how long will that employer match be there?

Oh, well, I assume it'll be there for a long time.

No, not necessarily.

An employer can change the match.

All they have to do is ask permission from the IRS to change their match.

They can change the plan, they can terminate the plan, your company can close, you can change jobs.

And now you're left with a plan that you have to manage in some other form.

Maybe it's rolling it over to a new employer, maybe it's rolling it over to an ira, but it's still an account that has handcuffs on it.

You can't use it unless you paid all the tax that's due and a penalty.

And so the benefit that you thought you were going to gain by putting the money in, well, I get the match and they get a tax deduction is going to be wiped out.

If you need the money because of some emergency that maybe should have been foreseen, maybe you should have been playing for and maybe should have been accommodated by having money locally in an account that you have access and control over.

So I'm sorry to say the greed factor does come into play when people say, I want the employer match, I want the tax deduction.

Well, how are you doing with your monthly budget?

Well, I got no debt, got no car loans, my house is paid off.

Well, you know, maybe that's a situation where 401k might be.

Might be valuable to you.

I don't know.

It all depends on the individual circumstances.

But I call it silo thinking where people are looking at one element, they're looking at the attractiveness of the element, and they're not taking into consideration anything else in their life.

For example, let me get these credit cards paid off first.

Maybe that will actually put more dollars in my pocket presently and in the future.

Then, then gaining that match that might benefit me, might not.

That's right.

That's right.

So give us one possible alternative to look at in.

And I'm going to, I'm going to pinch you on this one in, in two minutes or less.

And then what's going to happen is we'll show, we'll tell you guys how you can connect with us.

We have no problem talking for hours on this subject, you know, and so we're going to.

We'll go into part two on the next episode for you guys and just continue this conversation and then, and then bring it back around and what can we do about it?

You know, we've got all these, these issues and these, and these problems.

Right, that we're discussing.

And, and, well, what are we gonna do about it?

And so stick with us in that next episode.

But Joe, give us a short synopsis of what they have to look forward to on possibilities.

There's a couple of buckets that you can put your money into, right?

The main bucket that people have their money flow through is the taxable bucket.

So your earnings, your paycheck goes through a taxable bucket.

It's all fully taxable.

The second bucket is tax deferred bucket that we just talked about having all these chains and handcuffs on.

You can put it in, you can maybe get a tax deduction and you'll have all these restrictions and possibly penalties for accessing the money.

The third bucket is the one that rich people know about, and that's the tax free bucket.

And there are only a certain limited amount of things you can put in there.

So tax free municipal bonds.

Who owns those?

Rich people.

Okay.

If there is a municipal bond, muni bond that you could buy in the state in which you live, then you can get interest on that bond that, that's tax free under certain circumstances.

Gotta have that caveat there.

Number two, you could put money into a Roth IRA.

A Roth IRA or a Roth 401K.

Again, it has certain limitations and certain restrictions.

And the third thing, and this is the bucket that wealthy people love to put money into.

Right.

Muni bonds.

Roth.

Roth doesn't apply that much to wealthy people because they want to put money in huge amounts.

The third item you can put into that tax free bucket is cash value dividend paying whole life insurance.

It's also called generically permanent insurance.

So rich people, Fortune 500 companies and banks own that asset in the billions.

And they use it to subsidize and to finance, to capitalize the other assets that they're buying to create more income.

So it's an asset that creates more income that helps finance other assets.

So what we do is we help our clients understand how that works.

Again, you wouldn't care about how it works unless it was important to you in the first place.

Well, is it important for me to build up money?

Yes.

Save money?

Yes.

Protect money?

Yes.

Pass my dad to our kids intelligently and efficiently?

Yes.

Take care of my family?

Pay off all my debts?

Leave an inheritance?

If, if I graduate, when I graduate when I die.

Yes.

Well, we can show you how that works.

Great.

So if you guys want to learn more and talk with either myself or Joe Pantozzi, head on over to Alphaomegawealth.com podcast.

You can check out some of the other podcast episodes as well.

There.

You can schedule an appointment with me or Joe and we can help you unpack this a little bit further.

But meanwhile, stick with us and check out the next episode and we'll keep diving in.

Thank you.