Building wealth requires a strong, coordinated financial team, with you at the helm as CEO. Your team—spouse, CPA, attorney, financial advisor, mentors, and insurance specialists—should act as a board of directors, helping you avoid costly mistakes and accelerate your path to financial freedom. By actively managing these relationships and ensuring alignment, you can create a strategy that turns your goals into reality. Are you leading your financial team, or letting your future drift?
—
Watch the episode here
Listen to the podcast here
Building Your Financial Team
What’s up, Money Masters? It’s Wade Reed here for another episode of the show. Today’s topic is your financial team. Many years ago, when I was first learning about personal finance, I didn’t have a clue about what my financial team should look like, nor did I get that there was such a thing as a financial team, but there is. It’s very important that you gather good people to be a part of that team.
There is such a thing as a financial team, and it’s very important that you gather good people to be a part of that team.
Let’s talk about this. Who are the members of your team? If you’re married, your spouse is the first and most important member of that team. You want to have a great coordination and an alignment with that person. They are a joint partner in the core relationship of life. If it’s a significant other, there should be some unification, some openness, and dialogue about money. On that though, you have kids possibly who are older, who may be participating in some of the big family decisions.
When you get beyond the family unit, then what? I’m a business owner. Many of you are business owners and if you’re not, that’s okay. There are still key players that you need to have. In a previous episode, I talked about a CPA, an enrolled agent, or a tax preparer. That I would say is perhaps the number one relationship, aside from your spouse or other family members.
The tax preparer is the person who you entrust to help you make sure all the I’s are dotted and T’s are crossed with regard to making sure your tax return is prepared accurately. If you missed stuff, that’s wasted money. If you overlook a deduction, you are giving away free money to the IRS that’s already wasteful as it is. We don’t want to do that. The CPA, the tax strategist, and you may even have a next level up. If you’re a business owner and you have quite a bit going on in your business, you may look at the next level, someone who is a tax attorney.
What’s the difference between a CPA and a tax attorney? A tax attorney specializes almost exclusively in business-related investment opportunities and tax-benefited investments. They can get pretty sophisticated and interesting. You’re looking for ways to further defer tax into the future on things that you might otherwise not be able to do. If you’re looking to deploy some surplus cash you don’t need for your business operations or your personal life into other things that can have great value in terms of tax reduction in the future, as well as some investment gains that can occur at the same time, a tax attorney may come into play.
You may need specifically an estate planning attorney. Most people want to have an estate plan put in place. They don’t know who to turn to and they don’t know the cost associated with that. They often put it off. So far, we have a CPA, a tax preparer, a tax strategist, a tax attorney, and an estate planning attorney. Oftentimes, that same attorney who does estate planning also does business entity strategy and planning. Why would that matter? If you have an LLC, you can set that up on your own. In the state of Utah, it’s like $22 to set up your LLC. They have a basic templated operating agreement. So what? Let’s just do that. Why would it matter if I have a business entity set up by an attorney?
This is especially important if you plan to do any sort of tax strategy with that entity. If you’re trying to do a partnership situation where you, a spouse, or a partner can have stronger liability protection, you have to make sure that it’s done correctly. An attorney can be a great help to guide you on what that operating agreement needs to look like.
An operating agreement is a legal document that defines what the role of that entity is, what it can do, and who the people are responsible for making sure the I’s are dotted and T’s are crossed within that entity. The annual meeting is done if appropriate, the bookkeeping is completed, the annual filings are completed for that entity, and there’s a little bit of stuff that goes on with that. If you’re going to have a side hustle, you have to know this stuff. You have to have people on your team that can support you.
Oftentimes, a state planning attorney or a business structure or business strategy attorney who does these business entities will also have support people. They may have paralegals that you can get to know and can help fill in some of the gaps on the basic things that need to be done without having to incur the higher cost of the attorney’s time.
Within that framework, if you are a business owner, you may want to have an HR or human relations attorney. You may want to have somebody who does specific contracts for you. You may want to have somebody who specializes in the industry things that you do. Uniquely, maybe in some states, you need to have a real estate attorney to do contracts for you if you happen to be in that business. You may need to have somebody to help you with the landlord rules, leases, entering the property, eviction notices, and things of that nature.
There are legal representatives who are part of your team. I would also suggest a very important member of your team is a mentor. These don’t necessarily have to be paid mentors, but you have people in your life who you can look up to and go to in times of stress, or maybe you need guidance on some growth that’s going on in your life. They are key members. You may have several of these.
Key Financial Professionals You Need
You may have somebody who’s a mentor in your business life. You may have somebody who’s a mentor in your financial life. Maybe a spiritual mentor or a relationship mentor, people with whom you can develop a strong and deep relationship and who you can truly count on for soundboarding guidance. Not necessarily give you advice. Sometimes, but not necessarily the advice as much as somebody to talk to, run ideas through, and help you work through some of those decisions and feel more confident with what you’re doing so you can move forward faster.
A mentor is someone who helps you work through decisions and feel more confident with what you’re doing so you can move forward faster.
Who else? You may have a financial advisor, specifically. If you have a decent amount of cash that you’ve invested, you may want to have somebody who specializes in the investment world, who has licenses to sell investment products and give advice specific to investment-related products. You may back that up with tax support and the legal side. Let me give you a case in point of why that would matter. You are in a position where somebody brings to you an investment opportunity.
This came up with one of my other clients. He called me up and said, “I know you’ve had a lot of experience in the personal finance space. You’re my financial mentor and my coach, but I know you have some personal experience here. Can we go through a meeting with somebody who’s offering an investment to me?” I sat in a meeting with them. I said, “Before we do this meeting, make sure you get a copy of what they call their pitch deck,” which is a set of slides that typically tell what the offer is, what the basic risks are, who the key team members are on the opportunity, what the direction is of the company, what they think their unique selling proposition is, what makes them different in terms of the competition within the market that they are going to try to become a player with, the minimum investment, the maximum investment allowed, the time frame, what they expect to have a return on that investment, and what some of those risk factors are that may cause the delay in the investment returns or possibly a complete loss.
The pitch deck is more of the sales piece. It gives you more of the hype side of the investment, and then there’s something known as a private placement memorandum. I said, “Reach out to the person and see if they have a private placement memorandum set up yet.” That’s a document set up through a specific attorney. Now, this is one more layer of attorneys. You may have somebody who specializes in the investment world and SEC, Securities and Exchange Commission attorney. Someone who knows those rules deeply and can help write the legal document required to take on investor money for a business you may be participating in and you may be offering yourself to other people.
If you’re involved in multifamily real estate, you need to raise a bunch of money say, anywhere from five to a couple of hundred investors. You need to have that specific document, a private placement memorandum. This is typically followed up with what’s called a subscription agreement. That is the business entity document. Typically, a partnership LLC and each of the members of that LLC are subscribers to it. You need to be able to read through that document as well and see what the rules are.
Having an investment-specific person who understands these things. I don’t have the licenses to advise on what to do to invest or not invest. I do guide my clients on, the principles related to making that sort of decision. You may want to have somebody who has specific licensing to make specific recommendations for you if you’re super busy in life and you have a pot of money that is specifically allocated for these higher-risk things. Let’s say it’s 20% of your overall portfolio that’s available for this. You have an advisor who says, “I’m looking out for you. I know you’ve set your criteria for the types of things you’re looking for. I found a couple. I think this would be interesting to you.” If you want recommendations, that’s the type of person that I’m referring to right now, an actual investment advisor who knows the true risks of what are called alternative investments.
That person may also have specific skills in the stock market and everything related to that, and may able to make recommendations and help support you in making trades if you want to be proactive in the stock market. There’s somebody known as a financial planner. A planner is more of a broad-focused team member. They get the broad spectrum of financial life. I would fit a little bit more in that category of financial planner because of my knowledge after twenty years of being in this business. I get state planning, I get tax strategy, I get business entity structuring, I get the liability side of life with all the protection aspects of insurance, I get the value of having a debt reduction plan and cashflow plan in the financial statements, and all that comprehensive thing, the retirement income planning, and strategies.
I do fit into that, but oftentimes, you’ll find a financial planner is a fee-based person who gives specific advice. You may come to them and say, “I have this pot of money. I have this direction I’m headed in life. Could you make some specific recommendations to me regarding this specific thing I’m trying to accomplish, I’m willing to pay you to go and do the analysis for me, and come back with some sort of report that says, ‘This is what I see. This is the way I could see you accomplishing that objective with the resources that you’re offering me to take a look at.’”
I have a colleague in the industry who does that type of planning. He mostly works with pre-retirees, 55-plus year-olds who are looking for ways to do the last bit of planning to make sure that the income in retirement is going to be there and highly likely to not have risks of loss associated with them. Who else might be on the team? You might have a realtor if you’re involved in real estate in any way, shape, or form. Maybe you’re buying personal family residents from time to time, moving from place to place. You might need a realtor if you want to do any sort of landlord and find properties like duplexes and single-family residences, or flip a property. Having a good realtor who is aware of that market and can bring deals to you before they’re even on the market would be amazing.
A realtor can be a value add to your team. How about a mortgage officer? If you’re specifically doing long-term holds on rental properties, you need somebody who knows your financials and keeps them on tap as you are updated on a quarterly basis. You can drop that off to them through email and say, “Here’s my current financials.” In case you need to get a loan quickly, you have that handy. You get to know them personally. They know your unique situation. This has been a big deal for me to have a good mortgage broker because several times, I’ve acquired mortgages or refinanced mortgages. I’m in the small business industry. You have to have at least two years of tax returns to be able to get a good mortgage, even be offered a mortgage.
I found somebody who specialized in working with small business owners and self-employed people as my loan officer. She’s done an amazing job being able to get me through that process in a streamlined way without a bunch of time wasted. As you think about the team that you have around you, think of it like a board of directors. The team that you want to have, think of you sitting at the head of a boardroom table and you filling the seats on either side of that table with amazing specialists, people that you trust intrinsically.
You have to know them. You trust that they have high moral values. They have similar ethics to you. They share values with you, but they can have competing views so that there can be good dialogue that occurs. If you were to have them all in a team meeting and you’re looking for guidance on something, you would have a good healthy dialogue and be able to come to a conclusion because everyone is willing to coordinate together. That’s the ideal scenario.
It takes some time to do that. You may not need every single position on that team, but you need to know that that team is very important. When you have that good team supporting you, you’re way more likely to have better outcomes faster. I also will give a warning. There are times when you might think your CPA and your attorney are getting along when in fact, they’re not. One way may say, “I’ll reach out to the other person,” and they don’t do that.
One of my mentors said that this occurred to him. He had one recommendation to do his entity. I think the CPA said to an LLC. The attorney said to do an S-Corporation. In the end, it got filed incorrectly. When the tax returns were being done, it was filed based on one entity type when in fact, it was a different entity type. Because they hadn’t coordinated properly, there was a two-year scenario where things were messy. They wasted a lot of time.
Insurance And Risk Management Strategies
You are the key person on that team. You’re getting familiar with this stuff, reading books, listening to podcasts, having conversations, asking good questions, and asking about their willingness to coordinate with one another and helping be proactive with them. I promise you, even though some may say they’re willing to be proactive, they’re busy people. Unless you are willing to step up and take control of your personal financial life and make it truly a personal endeavor for you, you will always care more about your finances than anyone else. We have to take that personal responsibility.
You will always care more about your finances than anyone else, so take personal responsibility and lead your financial team.
If something that you asked for is not being done correctly, you ask for accountability for that. You set up standards with the people that you bring into your team, whether they’re team members or commission-based team members, they need to be in coordination with you and in alignment with you. The other team members you need to have are your insurance professionals, the insurance people, life insurance strategists, and disability insurance strategists.
Sometimes those are the same person. Sometimes they’re different. On my team, it’s different. You may want to have somebody who specializes in property and casualty insurance. That’s your homeowners and, your auto insurance. If you have rental properties, you’ll have what’s called fire insurance on your rental properties. You may want to have an umbrella insurance policy on top of that, and then you may also want to have some business-specific insurance. You may have a different insurance broker for business-specific insurance.
One layer deeper is if you are in a business situation with several million dollars a year coming into your business, you may want to have a specialist in the risk mitigation area known as a captive insurance specialist. That’s a more advanced person to have on your team but that may make sense. The team that you have does matter and I encourage you to start thinking about who that team is.
If you don’t have a place to store that, go grab my Personal Finances Essentials Course. It comes with a bonus of my total worth organizer, which includes a section specifically for who your team is, what you last did with them, and how to contact them. It’s already built-in. I’ve done this for you. I’ve done the work. Go grab that and let me know how it’s helping you.
I’m going to wrap this up. Thank you so much for participating in my life and letting me add value to your life. I love you for being here. I love you for making an investment in your future. If you like this content, please like it on YouTube. Subscribe to it. Go to iTunes and Apple Podcasts. Do a review for me. Share it with your friends, colleagues, and family members. This message has to get out to thousands of people and I need your help with that. If you’re finding any value at all in this show, please share it around so that more and more people can get the same value you’re getting. Have a great day. We’ll talk to you in the next episode.
Episode Resources
- Personal Finance Essentials Course – Personal Finance Essentials is a comprehensive online course designed for individuals who want to take control of their finances, eliminate stress, and build lasting wealth. Packed with practical tools and proven strategies, it equips you to save more, pay off debt, and confidently achieve financial independence.