Financial Goal Mapping for 2024

Speaker 1  0:00  
Hey guys, happy New Year to everyone. I am so excited to be doing this episode where we're going to talk about financial goal mapping for 2024. It's the beginning of a brand new year, lots of possibilities, fresh starts lots of resolutions, right? It's the perfect time to reset old patterns and build new ones. It's what I'm doing. I'm sure all of you are doing this. And if you have a goal for 2024, if this is the year, you want to take your finances to the next level, if this is the year, you want to start generating really meaningful passive income and really taking those intentional steps towards financial freedom. I know how that feels. And I'm so excited that you're motivated to do that. But it can also feel overwhelming. So what I want to do today is if you're thinking about taking your finances to the next level, I want us to do this with three steps, right, so let's get started. Welcome to generational wealth and these podcasts on financial freedom through investing in real estate. My name is Param Belinda pani, I'm a mom, radiologist, real estate investor and mentor to others looking to start or scale their real estate portfolios. Thank you for being here today. The goal of this podcast is to provide you with inspiration strategies and insight so that you can stop trading your time for money and live life on your terms. If you love the episode, don't forget to subscribe and leave a review. If you're thinking about taking your finances to the next level, I want us to do this with three steps, right? First, we're going to take a macroscopic view, and we're going to talk about the one shift, right, it's like The One Thing by Gary Keller, you have to have one thing that you're focusing on. And so we're going to start off by talking about the most impactful thing that you can do for your passive income in 2024, then we're going to go ahead and build your roadmap. And I've always said this personal finances is personal one size does not fit all. And so I'm going to help you build a custom roadmap for yourself, right? These are the steps you need to think about and then write down what makes sense for you. So we'll build a personalized roadmap for you for 2024. And then it's always about breaking it down into the next little step. Finally, we're gonna go and talk about the single next best step that you can take before the end of this month, that is really going to help you you know, change the trajectory of your investing and your financial journey. So let's get started. Okay, so I'm not sure how many of you read The One Thing by Gary Keller, I read summaries, I haven't read the actual book, but it's on my list. The one thing or the concept is how there is so much power and simplicity and prioritizing things when you're trying to achieve success. And the essential question that you need to ask yourself is always what's the one thing I can do and such that by doing it, everything else will be easier or unnecessary? Right? And so that's a very, very powerful question. If you actually think about it, when we talk about financial freedom, what I've noticed is that for physicians, right, most of us the way we've been trained to think about investing in financial freedom and passive income is, you know, working more, and saving more is the way to really accelerate to financial freedom, right. And I've always said this, I've maintained this, if you've heard me say this before, you know, you understand the concept I want, if that's where your focus is, I honestly believe that focusing on the wrong things, right, working more than saving more is the hardest way to get to financial freedom. And we want to be working smarter, not harder. And the biggest 90% Right of impact in terms of what your portfolio returns in terms of what your passive income is 90% of the impact impact comes from asset allocation, there are studies to show this, I'm going to run through a scenario to show you how impactful this can be. And that is the one thing that you should be focusing on in 24. If you're really trying to take your finances to the next level, now, ultra high net worth investors, if you look at their portfolio, 50% of their assets are in alternative assets, which is real estate, private equity, right? They have less than 30% in the stock market and the rest of us typically, and even this is what my portfolio looked like before I made massive shifts, right? Typically 90% of our assets are in the stock market, right. And that's a very, very different asset allocation. And on that, let's talk about how that really impacts your portfolio. Right. So if you had, say, $2,000, that you're putting towards savings every month, and you did this for 20 years, at the end of 20 years. And if you're investing it in the stock market where best case scenario, and this is giving the stock market the benefit of the doubt, you get a 10% annualized return, right? So if you're investing to get 10% annualized return for over 20 years, and you're putting $2,000 a month into that portfolio at the end of 20 years, you have 1.3 million. That's it. Now, if you do what is traditionally taught, which is work harder, take on more shifts, work weekends work the second job, how many times? I mean, so many I've seen so many physicians do this right? Which is not how do you double your savings? If I had to think about doubling my savings what that would take the sacrifices that would take that is crazy. I don't think anyone should be doing it. But if you were to do that, and you were to put 4000 a month into the same investment that grows over 20 years, right every month $4,000 and a 10% annualized rate of return for 20 years, at the end of 20 years, you have 2.7 million which is doubled, right, which makes logical sense. Now, I want you to think of a third scenario where you're doubling your ROI, right. So you, you don't double your your savings, you're putting $2,000 a month into that, you know, you're saving $2,000 a month, you're investing that, but the ROI of his portfolio is, is 20%, not up 10% At 20%, over 20 years, at the end of those 20 years, instead of 1.3 million, you are at 4.4 8 million. So that's almost double of what you would be at if you had just doubled your savings. And you were sitting at the same ROI, as opposed to just doubling the ROI that of the of the investment vehicle that you're investing in, right. So I just want you to think about that. And think about how impactful it is, and how that's something that you can easily do with little shifts. And it doesn't require the massive action that would actually need to happen to double your savings. And so that's what I want you to think about when I when you're looking at a broader picture in terms of what 2024 is going to look like, I really want all of you to focus on asset allocation. And the difference, you know, is not in terms of gear 1.3 million portfolio versus 4.4. It that's not the difference, the difference is working 20 years to get to financial freedom. And we're not talking about retirement, right, let's just talk about financial freedom where you get to control your income and your time, right. So 20 years to financial freedom versus, you know, cutting that in half or even less. And we talk about strategies all the time, right? With short term rentals, you can get up to 200% ROI in your one. That's actually one of my free ebooks. If you haven't seen it, just go to the website generation wealth md.com. And you can see the ebook, I actually have the numbers over there, right. And as this is doable, 200% ROI in six months, right. But that shift between a 4% safe withdrawal, which is what you have for your stock portfolio, and what you can have when you really start allocating your assets differently, and boosting your ROI is the difference between getting to financial freedom in 20 years or less than five years. Right. That's that's what we're focusing on. So if there's one thing you take away from this, that's what I want you to think about right? The biggest shift you can make in 2024. And that's going to be thinking about your asset allocation. If you're interested in learning how to invest in long term and short term rentals the right way. So you can accelerate to financial independence with the support of mentorship community, and vetted investor agents and strong markets across the country, then get on the waitlist for the next cohort of creating generational freedom at www generational wealth md.com. You don't have to learn from decades of costly mistakes by yourself. The program is only open for enrollment in the spring and fall each year. In the last six months alone, our members have acquired over $16 million of real estate, and more importantly, they are living life and practicing medicine on their terms. You don't have to do it alone.

Speaker 1  7:52  
Okay, so now that we've covered the most important thing, let's move on to goal setting and specific steps. And I try to break this down into five separate steps that you can use to build your roadmap for 2024 As far as your finances is concerned, okay, and the first step, step one is going to be and it almost feels like I'm repeating this over and over again. But this is always step one, right? Where are you now? What is your financial independence number? How much do you need in passive income? Right to maintain the same lifestyle? How much do you need? What's your financial dependents number at this time, based on how you're currently investing, how many years to financial freedom, and what is your goal and what chapter you're going to make to get to that goal. That's it. That's step one. The best resource for this and I've shared this before is we have a financial independence calculator that you can use, you go to generational wealth, md.com resources, and under Resources, you have the financial independence calculator, it, it, you know, helps you figure out your financial independence number, it helps you figure out how many years to financial freedom if you're doing what you're doing now. And then you can plug and play different numbers as to change your asset allocation and see how you can get to your goals. But that is step one. Again, that's a macroscopic view, but I want you to start over there. This is the exact same calculator I used in 2019. When I at that point, based on my stock portfolio, I only had about 2000 and passive income. taking that step, that first step, once I made that shift, I was able to within 12 months go from 2k to 10k in passive income, okay, so the first step is always is always going to be this macroscopic step. Okay, where am I? Now, where do I want to go? What am I going to shift? Okay, so that's step one, step two, this is where I want you to really, really deep dive into your current asset allocation. Okay, where are you now? What's your goal? So when we think about asset allocation, that is how is my portfolio divided between stocks, bonds, bonds also includes everything that's fixed income, right? So money, market funds, treasuries, anything over there, that's fixed income, CDs, all of that, right? So keep that as one category. So fixed income stocks and then real estate if you have any. The other thing to remember is like cash, right? Cash is often a big part of our portfolios. I remember and and we're very skewed in that, I would say the W two earner, the typical w two earner, including us, as physicians typically has a large huge allocation in cash just sitting around, I am guilty of that. I've done that in the past. Honestly, even today, if I look at my asset allocation, that is the one part that I need to figure out. Because I like to hold liquid reserves, we're in a different position, right now we do this for investors, especially for GW capital. And, but most of us have a huge part of our portfolio in fixed income and, and in cash. And so I want you to look at that, because that's going to be the biggest drag in terms of your ROI of your portfolio, which essentially affects your years to financial freedom, right? So take a look at that, right? Take a look at that, that's going to be very, very important. See where you are now and then come up with a plan, okay, I want to have if you are, you're either at 90%, stocks and 10% and everything else, or 7060 to 70% in stocks, maybe 20% in fixed income, and then like a large amount of just cash sitting there, which, which right now, interest rates are good. So that's probably part of your fixed income. But you really want to be very intentional about this allocation. Alright. And like I said, I told you what the ultra high net worth individuals what they what their portfolio looks like, or they have about 50% in alternative assets, which is private equity, or real estate, right. And they have to present in everything else, which is fixed income and securities, stocks and look at where you are and see where you want to go and think about the actual impact that can have, especially from an asset allocation and return perspective, eventually affecting your years to financial freedom. So take a look at where you are now and come up with a plan. Just to get a little more microscopic here. For some of you. This is the time you're going to think about criteria, right? This is the time you're going to think about okay, in this in 2024. What am I going to acquire? If this is real estate? It's going to be okay. What kind of property? What's the property price going to be? Am I going to be joint venturing? Am I going to be doing this myself? Which market am I going to pick? Am I going to pick a hybrid market or a cash flow market? Right? What are my terms and criteria? This is where you go and start narrowing down your terms and criteria. If you're thinking about for those of you who aren't really thinking about real estate, I think you should this is probably the year you want to start out at least think about investing passively in syndications. And for that we have a free guide. It's generational wealth md.com/guide. It's probably a one hour read, where I tried to condense everything that you need to know if you're just venturing into real estate and want to invest possibly, terminology syndications. Even within that, how do you know what makes sense for you? It's all we're all about customizing and personalizing. Right. And so that's that's very useful guide, think about that at least try to get started. In terms of asset allocation. Asset allocation is for multiple things, we talked about returns, but asset allocation is also for diversification that's important from you know, how resilient is your portfolio can weather market volatility, a lot of these assets don't necessarily go up and down simultaneously. Right. So diversification is important return perspective, and then tax efficiencies, right? That's why you really want to think about diversifying out. But for those of you who aren't, aren't thinking about real estate. And if you aren't, you should, I will say a state that again,

Speaker 1  13:29  
you know, at the expense of being repetitive. But the other important area I want you to look at is your fixed income and cash, what percentage of your asset allocation is towards it? Is that a number you're comfortable with. And typically, I think for ultra high net worth people, there are about 10% in fixed income, I think 10 to 20% is the 20% is probably the max, you want to be in terms of fixed income. And so just really be intentional about that, especially if you're in the growing phase, right? Especially if you're going if you intend to be working for the next five to 10 years, then you need to be intentional about that. And that allocation can shift as you start getting closer to retirement or financial freedom or cutting back to part time, right. But that's another area I want you to focus on cash, you know, do you have lazy money sitting within your 401 K accounts within your brokerage accounts, but you haven't invested if you haven't, you know, move it around and start investing that but be very intentional about how much you've allocated to fixed income and cash and have a goal in terms of how you want to allocate that. So that was say that those be, you know, micro things to look at in the bigger picture of asset allocation. But then the third step, okay, now that you've thought about the bigger picture, right, and the third step is going to be optimizing. And whenever you think think about optimizing your portfolio, I want to I want you to think about two things. We're going to think about fees, and we're going to think about taxes, right? So step three is essentially to two little steps. I feel like I'm always saying three steps, five steps, and then they're like mini steps in there. But this is good because some of these things are going to be more impactful for a small section of you and others are going to help others and so the This is why we do this in terms of fees. Go back to your investments in, you know, in equities and stocks and take a look at how much you're paying in terms of fees. Because I mentioned this before, I'm going to say this again. You know, Jack Bogle said this excessive fees like going from a 3% fee in a managed fund 2.05% in an index fund, that can, over time the impact over a 50 year hold period that can have an impact of just having, you know, going from a point from a point oh five expense ratio to 3%, as a standard management fee can reduce your overall portfolio returns by 67%. Right 67%. That's like less than 3% fee, and that the impact can have can be up to 60% 67% of your returns can be wiped out. So this is not a joke, just make sure you're going and taking a look at your portfolio and making sure that you aren't paying excessive fees, right. And it's one thing to pay excessive fees for over performance, which is sometimes the case with certain funds, especially real estate funds. With the stock market, though, oftentimes that less than 4% of managed funds beat s&p 500. And so oftentimes you're overpaying for underperformance. So that's one thing you want to optimize, that's a quick, easy, easy win rate. Second thing is going to be taxes, I want you to go and look. And oftentimes people don't understand this, I have a lot of friends who do day trading short term trading options, when you're doing all of this, you're not paying taxes, you know, within your brokerage account, it seems like your returns are higher than they are you paying taxes on the back end, when you're filing your taxes, right. And that's where it comes out of. So I want you to go into your tax return. If you've if you filed it, or at some point, whenever you are filing your taxes, I want you to actually take a look at how much you're paying in terms of taxes. Right, I want to I want you to know how much you're paying in terms of taxes. And the goal when you're optimizing your portfolio is start jump to jump start generating, I want you to think about generating better income, what is better income, tax free income, this can be income from you know, if you are a sole proprietor, if you are a consultant, if you have a business, what happens in businesses is that when you're a W two employee, when you're a W two employee, you're getting your income, you're taxed on it. And then you have all your expenses, right, which is nuts, if you actually think about it, when you have a business or your you get 1099 income, you get your income, you take out all your expenses, and then you get taxed on it. So that's that's a massive difference, right in terms of how efficient your income is. That kind of income, you want to generate better income when you have real estate, your because of depreciation and this is true even for syndications. Your income, your distributions are tax free because of depreciation. Once your property appreciates in value and, you know, in 2021, my portfolio increased in value by a million dollars that you can tap into that tax free, right, so the income you're generating, from businesses from real estate, even within real estate, if you have short term rentals, having it on a schedule E versus a Schedule C right getting income on a schedule E, you're not paying self employment taxes, those are things you need to start thinking about. Because that can have a huge impact on your overall portfolio performance, your passive income, right? So start thinking about what your taxes are, and how you can start investing and take making shifts to start generating better income, which is tax free income, income, or you don't have to essentially, if you have a 1099, and you're above a certain number, I believe it's if you're making over, you know, 40 to $80,000, it makes sense to have an S corp. Because then you're getting distributions where you're not paying self employment taxes, right, so a portion of your income comes out of the distribution. So multiple different ways where you can start thinking about efficiency in terms of taxes, but this is the time to be thinking about it right? The beginning of the year is always the best time is this the year where you want to buy a short term rental, you want to acquire short term rental because even in 2024, you have 60% bonus depreciation, so you can still if you if you're an entrepreneur, you want to own a short term rental, you can still strategize around that where you can shelter your W two or 10 unearned income from taxes by virtue of depreciation from that if you are materially participating in that short term rental. So this is the year you want to start thinking about that right? Do I want to really optimize my taxes? And how am I going to do that? Right? So fees and taxes are things you think about in terms of optimization. So just to recap quickly, we talked about the first step being, you know, financial freedom number and yours to financial freedom, and then what your goal is and coming up with a plan. Second thing is going to be asset allocation. We talked about over there, how what your current asset allocation is how you're going to pivot and what you're going to do in terms of, you know, your criteria for acquisitions, be very clear about that. And then taking a look at your fixed income and cash and seeing if you're heavily weighted over there, and that's dragging down your portfolio and how you can you know, allocate that better. Then we talked about optimization, where we're going to look at how do we generate better and which is tax free this year? How are we, you know, being more efficient in terms of fees in our portfolio? Okay, that's for optimization. Now, step four and five may not seem like they're very tactical, but they are, in my opinion, going to have the biggest impact in building your roadmap and staying on track. Okay, so step four is going to be learning to de risk your portfolio. And I am forgetting Warren Buffett's quote over here, but it is to the fact that risk comes from not knowing what you're doing. And I think that is the actual code. But this is the time you also want to really plan about how you're going to educate yourself to lower risk, right? I always said real estate. If you look at Sharpe ratios, real estate is actually significantly lower risk than the stock market stock market tends to be more volatile real estate is lower risk. But again, I feel like the more you educate yourself, you're really able to then think about highest risk adjusted returns, right? Because that's how you're, you're lowering your your risk profile. And so I want you to come up with a plan in terms of how you're going to educate yourself what resources you're going to use to educate yourself. For those of you in less interested in investing in syndications, the guy generational wealth md.com/guide is a great resource. But for all of you on here, anyone thinking about taking finances to the next level, I'm super, super excited to talk about the physician freedom Summit, which we're hosting again in 2024. In March, you can sign up for free, it's free, it's virtual, this is the way we get to impact more physicians, right? We have 1000s of physicians attending the summit, every time we host it. generational wealth md.com/summit I want you to go and sign up we are the summit is always a place where we bring together physicians who are seven and eight figure entrepreneurs, right, who are changing the way medicine is being practiced experts and burnout intervention experts and financial freedom people who have who became financially free in their 30s and 40s. Right, who will talk about strategies, not just for real estate for the stock market, right? How do you streamline your portfolio? What are the strategies that they used, right? That we talk about alternative assets, private equity, passive real estate, active real estate investing, short term rentals, long term rentals investing in apartment complexes, right? The speakers at the summit, collectively have over a billion dollars in assets under management. That is how much knowledge is coming to the summit. So I want you to tap into it. This is the best way to really de risk your investing, right? Staying in the right space, educating yourself. So education is going to be a big part. And so I really want you to start thinking about, Okay, what am I going to do to take my investing to the next level, I think the summit is a great place to really stay in the same space as these amazing entrepreneurs, and, you know, trendsetters, who have taken their investing to the next level. So definitely put that on your list of things to do. And then step five is community, I always say this, you are the what is the saying you're the average of the five people you surround yourself with, I want you to now write down the five people you spend the most time with every every single day and see if they are you know, who earners their investors or entrepreneurs, right. And if you want to change things around for yourself, then the best way to do it is to surround yourself with the community of people who are doing the same thing that is going to be super, super valuable. Educate yourself, but more importantly for accountability, right? And to help you to have the right mindset. Okay, so community is going to be great again, at the summit, we are expecting 5000 physicians, that will be your tribe, people who are also looking to the same thing in 2024. So definitely sign up for the summit. And so finally, that, you know, we talked about, we talked about the one thing that is going to have the most impact for you in 2024, we talked about five steps for your to build your own roadmap to financial, you know, taking your finances to the next level in 2024. And finally, I want you to think about the next step, the single next step right. A lot of this, a lot of these steps that I talked about are things you can do right away. Nothing Is it nothing is to you know, it's going to take you a lot of time. But I want you to think about one single step, right. And this is going to be really important, you can time block for this. But give yourself a deadline, this is something you I want you to do before the end of the month, right? That is really going to have a massive impact for you. So that could be something as simple as I'm going to go and take a look at the fees that I'm paying in my stock portfolio, and I am going to make sure that I'm optimizing it for some of you it may be I'm gonna go and work on the financial independence worksheet and come up with you know where I am right now what my goal is and what I'm going to do, right. So it could be something as simple as that. For some of you it may be as easy as saying, I'm going to go to generational wealth md.com/summit and sign up for the summit. And that's the one step I'm going to take. I'm going to attend the sessions I am going to learn and educate myself and that's going to be your one step. Then that's going to help you with creating With all this recruiting better income, really learning to optimize on taxes, learning how short term rentals can give you a 20% ROI, you're one, right? Well, if that's not your cup of tea,

Speaker 1  25:09  
what can I do with syndications? How do I learn to I'm actually gonna be talking about vetting syndication deals and going over your due diligence checklist, Rick, really simplifying that and giving you a roadmap over there. A lot of you are thinking about the current market, and it can be scary with the interest rate environment with just talks of recession. But for most of us, I didn't tap into the oh eight, you know, slump. And then the, the, the the subsequent boom, I didn't happen to it. I was training till 2010. And, you know, I don't think it was even focusing on these things. But for many of us, the next few years are going to be when we really make our fortunes and they say fortunes are made and downturns downturns are scary times. Those are times where people really think about being on the sidelines. That's, you know, that's what most people think about and that aren't, I'm going to talk about that next in a separate episode, but they're actually tremendous opportunities for wealth building financial freedom and passive income. And I don't want you to be sitting on the sidelines. And so I think this is, you know, the physician freedom Summit, we will be hosting it annually, but this is probably going to be one of the most impactful ones for many of us, because the next few years, if you really take action, if you really know what you're doing you take action, the impact that can have on your portfolio and returns is just just tremendous. And so I am super excited, and I hope that this was really helpful for you. And I'd love to hear from you in terms of what your next step is, or what which of these things that we touched upon you think would have the most impact on you. I'd love to hear from you. But I hope this was helpful. Take it. I love January. I love goal setting. There is so much impact and actually writing this down putting pen to paper, so do it and I am so excited for what 2024 holds for you. Take care

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