What’s Your Financial Plan? | Joe McKissack

About Joe McKissack

Joe Mckissack has over 14 years of professional experience working in the financial industry as both a financial advisor and financial consultant. He specializes in working with clients of ultra high net worth. Joe received his Bachelor’s of Arts degree at University of California Santa Barbara.

 

Interview Transcript:

Alan
Welcome back. I’m here today with Joe McKissick. He’s a financial consultant here in the Bay Area. Joe, welcome to today’s show.

Joe
Thank you. Nice to see you, Alan.

Alan
So Joe, give me your background, you know, your journey through life, what brought you up to this point today?

Joe
In junior high or high school, we had a project where we had to select a stock. And so we did that. And that kind of got me interested in the stock market and investing. And ever since then I had a passion or a desire to learn more about the market.

Alan
I always admire people that can be financial consultants, I, I’m a CPA. And and so people will come to me, and they’ll have you know, tax issues and things like that. But but people coming to the financial consultant, they’re saying, Joe, solve my life’s problem, give me a good rate of return. Yeah. And it makes sure whatever I give you to manage doesn’t go down, right? And so how do you approach a person who is extremely conservative when markets are so volatile.

Joe
It’s important to kind of take a step back with that client. And first and foremost, talk about financial planning, retirement planning, I think every investor should create a financial plan. It’s your roadmap to financial success. And then you can figure out within the context of that financial plan, what should my investment strategy look like? What type of rate of return? Do I really need to meet my long term retirement goals? So it really all comes back to planning and having that that roadmap in place?

Alan
Now, is there is there a certain benchmark of net worth you’d like to deal with? In other words, do they have to have at least some liquid assets before they can really be involved in a fit in a financial plan?

Joe
I work with individuals who have a minimum of $250,000 of investable assets. And, and I work with a lot higher net worth clients as well.

Alan
And so when you’re when you’re walking through this, what are the what are the some of the greatest concerns that when clients come to you that they express what are they feeling out there?

Joe
They want to be financially independent. And not everyone has that ability to do that, where you have true financial independence, a lot of people, they rely on their investments to to help them maintain the lifestyle that they want to maintain throughout their lifetime. people’s concerns are not living a comfortable retirement, not living by the means that they’re used to living today. So I’d say that’s, that’s probably one of the greater concerns of them. And then obviously, the volatility in the market is a concern. You know, markets are up and down. People sometimes ask the question, Is now a good time to get into the market? Should I be getting into the market? You know, the markets all over the place? And then it comes back to planning. It’s like, okay, what is your financial plan? What type of rate of return? Do we need to accomplish to maintain your goals? And then within the context of that plan, you know, make your investment decisions.

Alan
Now, if, if the market is falling, falling hard and fast, and you get a client calling in a panic. Joe helped me right. Yeah. Yeah. What’s your typical approach to write you know, how you should react to it?

Joe
Yeah, that’s, that’s a good question. It’s a long term investing, we’re investing for the long term, okay, the markets are gonna go up, and they’re gonna go down. They’ve always done that. And they will continue to do that. I had a client that had that type of reaction. And we were systematically automatically investing into an index fund. Just you know, he was putting money in his 401k. He was putting money into just he had additional savings. And so we were dollar cost averaging into an index fund. He didn’t need that for a long time. He has plenty of liquid assets to cover any needs that come up. He had an emergency fund. So everything was in place. This was just a long term investment. He says, You know, I want to stop I don’t want to put in the market right now. And it was it was really bringing him back to this is a long term investment. And with this particular money, the markets going down but now you’re accumulating shares at a lower price. And you’re accumulating, accumulating, accumulating more shares at a lower price. Over time, 1020 years from now, when you actually, you know, maybe need this money, you’ll have accumulated a lot more shares at a lower price. So don’t stop investing. You know, when the markets necessarily down in volatile markets, people should make sure that you have your portfolio, your your target allocation should fit within your risk tolerance.

Alan
So I need to take a quick break. And when we get back, I want to talk about allocating portfolios and risk tolerance. Okay, sounds good, busy. We’re here today with Joey kissick, a financial consultant here in the Bay Area, we’ll be right back after these messages.

Alan
Welcome back, I’m here today with Joe McKissick. He’s a financial consultant here in the Bay Area. And Joe, in the first segment that we were talking, we got into this Allocation and Risk Management. And what exactly is that?

Joe
There’s a few different philosophies, investment philosophies, there’s your stock pickers or security selectors, there’s market timers. And then there’s asset allocation. And I believe in asset allocation for long term investment. And basically what that is, is just having the right mix of asset classes that fit your tolerance for risk. So a more conservative portfolio might have an asset allocation that has more exposure to fixed income as opposed to equities, a more aggressive investor or a more aggressive asset allocation model would have a portfolio that has more exposure to equities. So essentially, asset allocation is just how your assets are allocated amongst different asset classes. And that’s, so it’s important to get that right for long term investors. Because as the market goes up and goes down, when the markets going down. You want to make sure that you’re comfortable, no one’s happy when the markets really going down. But you want to make sure that you’re comfortable with, with, with how, you know, can you stomach or tolerate the decline that you’ve seen in your portfolio, and that’s really a function of how your assets are, are allocated or diversified.

Alan
Now when when we’re looking at retirement today, I hear all sorts of things out there everything from don’t plan and having social security to plan and working much longer. And and I realize for every US financial consultant, it becomes more of a personal opinion or issue. Right? And but as you approach to philosophy today, when when we’re moving out and looking into the future volatility of markets, the there’s just a lot of paradigm shifts out there with all the baby boomers exiting, how do you how do you help someone to navigate all these rocky, rocky waters? Or?

Joe
Yeah, well, I really try to listen to my client’s needs, and what’s important to them. Every person, every client is different. People have different goals, they have different objectives. So I really try to understand what are you trying to achieve what’s important to you? And I think that’s, that’s the first thing is partnering with my clients. So that we’re in this together to try to achieve their short term midterm long term goals.

Alan
And so when when we’re looking at long term, are we looking at two years, five years? 15 years?

Joe
Well, I mean, that’s, I’d say long term would probably more 10 years or greater. Yeah, I’d say 10 years or greater. In the short term, and on the there’s probably like, two years or less would be short term kind of intermediate term would be two to five years and then longer term, you know, gets into the five to 10 plus range. You know, people are living longer though, so it’s important to invest for the possibility of having a longer lifetime. I don’t know if Social Security is gonna go away or not. That’s not my job to make. those predictions are really have an opinion on that. But if my client feels that I don’t think social security is going to be there, well, then let’s plan for it not being there and save more money.

Alan
That’s a good, good way to look at it. No one really knows where the markets are going. And I think everyone has entered feeling inside themselves, right? Would you agree that if the person was having to watch the stock market every day, they probably have too much money in it? Or they’re investing money that they can’t afford to lose?

Joe
If they’re watching the market every day, constantly watching the market? Yeah, I mean, that’s some people just love watching the stock market. That’s what they do, and they enjoy it. For people who are doing long term investments, in my opinion, you don’t need to watch the market every day.

Alan
Call Joe.

Joe
Call Joe, do you have a concern? Let’s talk about it.

Alan
Yeah. Okay, do I need to do a quick break and visit here today with Joe, because he’s a financial consultant here in the Bay Area. Stay tuned, we’ll be right back after these messages.

Alan
Welcome back and visiting here today with Joe McKissick is a financial consultant here in the Bay Area. And Joe, in the past segments, we were talking about risk management and allocation of portfolio. And, you know, all this is well and good. But let’s say that I’ve never had an experience of talking to a financial advisor before. When is a good time to know whether I should be working with one versus not? That’s a good question. I mean, because you’re not going to just work with anybody that comes to your door are you?

Joe
No, there is there needs to be a good fit. For both a person looking for a potential financial advisor and the financial advisor has to have a good fit with that person. That’s what I feel. I think if you’re starting to have that question like should I be talking with a financial advisor, then I think, I think that’s probably a good time to go. Talk to one interviewer. Maybe one, two or three, speak with your if you don’t know where to start talk with a friend of yours asked, you know, who do they work with? Some people like to mention their financial advisors or their friends? Some people don’t? You could ask your CPA they often know a lot of financial advisors, as I’m sure you do. But if you’re having that question, Should I be talking to one, then find out a few to go interview or talk to come up with brainstorm, come up with a list of questions that.

Alan
Like what what’s a good question? Is the stock market going to fall?

Joe
Yeah, I mean, that’s that’s that’s a good question. There’s there’s no bad question. Yeah, there really is no bad question. I think the more questions you ask, the better off you are.

Alan
So if I can say that what you’re trying to do is trying to identify with somebody who can be a check and balance to you. Yes. So if I say the market is going to fall that you’ll say, Well, wait a minute, maybe not. Maybe, maybe not.

Joe
Right? Yes. So exactly. So I can I can work with my clients to talk them through situations or volatile times. You know, hold their hand when things get tough help them take the emotional part out of investing, because it can get emotional for people in their money. Yeah. And consultants, advisors, they have the they’re your soundboard. The ask them questions, get their opinion, if you have a major life or financial decision. Ask your financial advisor.

Alan
That’s a good that’s a good point there. But when when should people I mean, you can have life events such as large inheritance. But let’s say it’s a new kid coming out of school. Yeah, they finally got a job paying him a W two. Should they think about investing?

Joe
Yeah, I think so. I think the earlier the better. Really, time is your friend when it comes to investing.

Alan
What’s a good place to start? Should they, you know, go pick up a magazine and look at the top five stocks for this next year. Should they do an approach to putting money into an ETF or some type of managed fund what what do you think?

Joe
Yeah, well, I think if you can start you know, contributing to some type of retirement account and Ira Roth IRA company 401k. That’s good. In addition to that, you know, investing in ETF, an index fund, something like that, where you’re automatically maybe putting, you know, say 10% of your salary, you’re just automatically on a monthly basis investing that money in some type of index fund or ETF. It to me, the vehicle itself, it matters, it’s important. You know, how much does it cost is a tax efficient, there’s certain questions that become a bit more detailed. But the sooner you start, the better. And you know, if you pick a couple similar funds, in my opinion, 10 years from now, 20 years from now, provided those funds are somewhat similar in nature, you’re gonna get to the same place. Yeah, the path might look a little different, but you’re gonna get to the same place. So just find the right investment that fits your preference, your timeframe, your risk tolerance.

Alan
Do you have a special type of client, that you are the type of client that you specialize in?

Joe
I work with professionals, okay. Approaching or in retirement. And I like to work with folks who like to make investment decisions within the context of a plan. So we’re planning base, we’re have a retirement plan, we have a financial plan, and all investment decisions come you hear me say this over and over again. But I think it’s important. They’re made within the context of that plan. So people professionals in near or in retirement who like to invest within that type of philosophy is who I enjoy working with.

Alan
Does working with a high net worth individual differ than working with the common? Everyday W2?

Joe
Yeah, well, yeah, no, that’s, that’s a, that’s a good question. Also. Yes, and no, I mean, high net worth individual as a few more zeros after their after their, you know, account statement. But everyone has high net worth individuals, or just, you know, your everyday average, Joe, you know, we all have financial needs. Everyone has goals.

Alan
Yeah, I love the way you put that. Because, you know, so often in life, you have the guy, or the girl or, you know, they’re looking for, I need to save for retirement, I need to save, and then they get to retirement. They got the savings and all sudden their health fails. Yeah. And like, well, what just happened? You just went through life, to get to retirement, only to find out that you got other challenges of, you know, how long you’re going to be around? Right. So when we’re looking at consulting, and and assisting people, isn’t it about helping them also accommodate a lifestyle?

Joe
Yes, yeah, definitely. Definitely. That’s why I think it’s really important to to, to try to learn and understand what is important to your clients. So the more time I spend with them, and face to face meetings, or over the phone, or just hearing what’s important to them, it just helps me get a better understanding of who they are, and what’s important to them, and how can I partner with them to help them achieve those?

Alan
Now, I’m going to throw your curveball, okay. I want to know at the end of the day, yeah. At the end of the day, how are you going to define success in your life?

Joe
It’s not how much money you have. It’s are you happy with yourself? Are you doing what’s important to you? Do people look up to you do people respect you? Do you make other people better? Are you honest, ethical person? It’s, it’s to me it’s really hard to define success, but there are certain words that I associated with.

Alan
Define attributes before you can. If a person possesses those attributes, then that’s what success means. Yeah. Okay. Yeah. Joe, appreciate having you on the show today.

Joe
Thank you. Appreciate being here.

 

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This transcript was generated by software and may not accurately reflect exactly what was said.

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