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financial well-being for entrepreneurs

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FINANCIAL WELL-BEING FOR ENTREPRENEURS

Financial well-being for entrepreneurs often means having a successful business that lets you draw a steady paycheck with benefits.

But there is really more to it than that according to our guest, Wayne Titus III, who literally wrote a book on the subject.

Let’s find out what he means and what we can do to improve our own financial well-being.

Share this episode with someone you think will benefit from it.

Leave a review at Lovethepodcast.com/BusinessConfidential

What You’ll Discover About Financial Well-Being for Entrepreneurs (highlights & transcript):

Entrepreneur's Guide to Financial Well-Being* #1 Thing entrepreneurs need to achieve financial well-being 

* 3 Types of financial advisors every entrepreneur needs to know about 

* Most important thing to look for when selecting an advisor to achieve financial well-being 

* Dangers of financial advice not being coordinated and integrated 

* What entrepreneurs fail to take advantage of that can improve their financial well-being 

* Why financial well-being for entrepreneurs requires a team of advisors 

* And much MORE.

 

Financial well-being for entrepreneurs often means having a successful business that lets you draw a steady paycheck with benefits. But there’s really more to it than that, according to my next guest, Wayne Titus, the third who literally wrote a book on the subject. And when we come back, we’ll find out what he means and what we can do to improve our own financial well-being.

 

This is Business Confidential Now with Hanna Hasl-Kelchner helping you see business issues hiding in plain view that matter to your bottom line.

 

Welcome to Business Confidential Now, I’m your host, Hanna Hasl-Kelchner, and today’s guest is Mr. Wayne Titus III. He is a certified public accountant who’s also a personal financial specialist, as well as an accredited investment fiduciary analyst, who’s the financial adviser and managing director of Savant Wealth Management. In other words, Wayne knows a lot about how to create more wealth and also how to protect it.

 

He’s been involved in the financial services industry since 1991 and has a distinguished resume, working for some of the most prestigious accounting firms on the planet. And also, among his many accomplishments, is his book: The Entrepreneur’s Guide to Financial Well-Being. He says he loves to educate others on finance, tax and investment topics by writing columns and through public speaking. So let’s see what he can do for us. Welcome to Business Confidential Now, Wayne.

 

Hanna, thanks so much for having me. I’m looking forward to our conversation.

 

Me too, because financial well-being is just such an important topic, especially financial well-being for entrepreneurs. It’s important to peace of mind and overall financial security to meet our short term as well as long term needs. In your experience, what’s the number one thing entrepreneurs need to consider when looking at their and evaluating their financial well-being?

 

Well, entrepreneurs don’t often know what they don’t know when it comes to finances. And one of the reasons that I wrote my book was to help them understand that their needs are unique and that they should be looking for an advisor who understands and can support those unique needs.

 

So their advisor is the one that’s going to tell them what’s missing, is that the deal?

 

Well, I think, just to give you an example, we’ve been through a very traumatic part of our of all of our lives with COVID. Having that plan for that was not something that was on any entrepreneur’s mind or any advisors mind. But, having a plan to deal with the ups and downs of the economy or your personal financial situation, all of those things, it’s important to have that advisor that you can talk to about that; how you talk with an advisor, what they talk about and what they can counsel you on is important.

 

Entrepreneurs, when they run their business, they run usually pretty low and fast with things, and having the right advisor helps that entrepreneur to see around the corners to see where the pitfalls are to look ahead. Many times, entrepreneurs are engaged in their businesses and they’re engaged in their businesses because they’re passionate about their business. They’re not necessarily passionate about accounting, bookkeeping, their personal finances.

 

And so typically what happens is entrepreneurs can put things to the side that don’t seem very important right now because they’re focused on their passion or their kind of the unique needs of their business right now. And so many times that financial well-being for that entrepreneur suffers because those personal finances are on the back burner. I’ll get to that later. I can’t take care of that now. I’ll worry about saving for retirement later.

 

All of those things are just – it’s a competing atmosphere of competing needs for that entrepreneur right there at that time. What – what do I need to work on right now? Today, it’s the kind of where the fires I need to put those fires out before I can do anything else.

 

Well, that’s true. Entrepreneurs work at a very fast-paced challenging environment because they’re growing their business and that is their, as you say, sole focus. So, you come back to this idea of having an advisor. What advice do you have about selecting an advisor who can really help them see the big picture and step back and say, “Hey, look, it’s not just about, expanding your territory or your product line or sales. Let’s look at how you can have more financial security.”

 

Yeah, I think it’s finding that trusted advisor that can watch their back, which gives them the freedom to concentrate on their business – fit their business and their families. I think there’s really three different major types of advisors, and the duty of care that they have for their clients differs depending upon the type of advisor that they are.

 

There’s the kind of the paternalistic advisor, the person that says, just do what I say, but doesn’t give you much of an explanation. There’s the advisor that is informative, that understands what your needs are, but searches and gives you all the information that they can find because they’ve done so much exhausting research and gives you all the different alternatives that you could consider. But they don’t make a recommendation.

 

And then there’s the interpretive advisor, which I think is the most important advisor for an entrepreneur, and that’s somebody that is going to do the research, understand what your business is, your situation, help you anticipate problems and issues, and then come back to you and say, “Hey, based on this information that you’ve given me, based on what I’m seeing, here’s some alternatives that I think you should consider.”

 

 “I think the second alternative is the best, and here is why.” That’s an interpretive approach to things versus just providing information and the entrepreneur chooses. Or, not providing any explanation, giving any context to the entrepreneur about why a decision is important. You want to find that advisor that communicates well with you, but it is also interpretative. They’re on the journey with you. I think that’s a huge difference in advisors.

 

I like the way you’ve helped classify that. It – it helps people to know what to look for, but help us understand how you go about finding an advisor like that.

 

That’s kind of the challenge, right? Most people are referred to an advisor by a friend or a family member, or they go out and they do some research and say, “Well, that sounds like a pretty good advisor.” To me, you’ve got to look for and interview these different advisers before you actually make a decision.

 

So I think the most important thing is to explore the opportunity to work together, to go in with a list of questions about how they act with their clients; to understand their communication process, to understand their business process. One of the things that’s most important to me as an advisor is for my clients just to have a good business process.

 

A lot of businesses are silos, and there’s not a lot of coordination between different aspects of things. If an advisor doesn’t know and understand how important it is for an entrepreneur to integrate tax, financial and investment strategy, I’d say, right there, you’re probably going into a situation where you’ve got a silo.

 

You’re only – you’re talking to this one adviser that does investments, you’re talking to another person that’s putting together a financial plan. You might have an accountant that does your bookkeeping, all three or four of those types of advisors are really important for entrepreneurs.

 

And if those advisors aren’t talking to each other about your business and everything is going through you, something is going to fall through the cracks. And, the reason that’s going to fall through the cracks isn’t because the entrepreneur is going to drop the ball.

 

It’s going to be because one of these other professionals is pushing it off onto somebody else. I’ll give you a quick example, if you’re working with an investment advisor that’s making investment decisions for you. They may be buying and selling things in the – in your retirement accounts or your personal accounts, and they’re not considering what the tax implications are.

 

So they have no understanding of what the profitability of the business is or what your tax situation is, personally. And they could be causing you to actually go into a higher tax bracket and pay more tax than you really needed to pay. If that broker is not talking with the accountant and they don’t understand your situation deeply and consider that, it’s going to be like you’re running with ankle weights on. You’re trying to have an earned earnings in your in your investment portfolios, and that’s important.

 

But if those earnings are eroded by the impact of taxes, it’s not helpful. paying taxes is not a huge issue, in my mind, for many folks. Returns are most important in many people’s minds, but it’s how much you keep after taxes that matters the most. And so if you can lower the impact of taxes and manage that, that is most important.

 

So, if you’re dealing with advisors that are not talking to each other or don’t have a good understanding of your business overall, and how that interacts with your financial position, then that’s probably not the right advisor for you.

 

Those are some great points. That definitely sounds like some red flags; the inability to communicate. Who would initiate that? Would one of the advisors initiate, “Hey, let’s have a conference call or a meeting to sit down with you as the entrepreneur.” Or, the entrepreneur says, “Hey, I need you guys to talk to each other. Here’s the contact information,” and it happens behind the scenes. What do you think?

 

Well, I think it can happen behind the scenes. Many advisors can work well with each other professionally. I would say most times I actually see the opposite that many advisors don’t work well together, and it’s because they’re only interested in doing their thing.

 

I’m a CPA. I can be highly critical of the tax and accounting industry, but what I see it from a lot of CPAs is they want to – they want to just focus on the tax return, in preparation and tax return, the compliance aspect, and they’re not giving a lot of advice on how to mitigate or reduce the impact of taxes. They’re just saying, “Give me your stuff, let me prepare your tax return.”

 

The investment adviser is saying, “Talk to your tax advisor about this.” The tax advisor saying, “Hey, you were impacted by these investments.” If you are getting the back and forth or the finger pointing game, you know you don’t have the right advisors.

 

In our business, we try to integrate that and provide those services so that it’s kind of a one stop shop for entrepreneurs where they can come in and – and talk with somebody and integrate that approach, so that we’ve got the most efficient, effective tax plan, investment plan, financial plan. Those are the kinds of things you want to look at.

 

How are those things well-coordinated? Not, how are they disorganized? And to do that, an entrepreneur has their business that they have to run. If they’re also then trying to run their professionals, that also competes with what they’re really trying to do, which is to grow their business.

 

Okay, so we know what we need to do as far as finding the right skill set, but also the right mindset as far as these different types of advisors working together if we’re not fortunate enough to have someone like you who integrates it all under one roof as one-stop shopping. Let me turn to something that’s a little bit more granular. When it comes to financial well-being of entrepreneurs,

 

is there something – and an item that they overlook more often than not, and not – let’s not talk about it from the advisor point of view, but substantively; whether it’s retirement or whether it’s the type of investment that they’re overlooking, where they could benefit from more security. What are your thoughts on that?

 

I find that many entrepreneurs, when I first start talking with them, their personal finances are neglected. They are running their business, usually on a shoestring when they’re first starting up and if they’ve got a successful business, then they’re trying to figure out, “Well, how can I be more profitable?” And they may not be taking advantage of certain things that would help improve their financial well-being. So let’s kind of talk through that and unpack that.

 

Having a retirement plan in place is a good thing, but having the right retirement plan in place is really important. There’re many companies that will provide a, I’ll call it a cookie cutter 401(k) plan, where you’re doing a 3% safe harbor match. So, no matter what you put in for the employee – I’m sorry, whatever – if you’re going to pay 3% of somebody’s salary into their 401(k) plan, if they leave the company, that money goes with them.

 

So, you’re incentivizing somebody to get their benefit and then potentially leave with it. That doesn’t help the entrepreneur much. You want employees to stay. So, putting a plan in place that doesn’t reward bad behavior, but that actually rewards good behavior like sticking around and investing into that contribution would be more effective.

 

If you have a 401(k) plan, you might as an entrepreneur, maybe you are profitable and you can put more money into retirement. You could implement a cash balance plan, which would provide you the opportunity to contribute even more pretax to your retirement accounts than what you can contribute in a 401(k).

 

There’s ways to take advantage of putting plans in place, but if you’re going to do that, you want to have them customized so that they can support what your goals and objectives are, and not just costing the business money and not seeing the benefit of that longer term. So, I think it’s important to understand that you have that opportunity, but that selecting a provider that’s easy.

 

Many times these providers are payroll companies that have these plans available. They’re easy plans to put in place, but they don’t check the boxes as far as benefiting that entrepreneur as well as a more custom solution might. Now, there’s costs and benefits for all of that. But having the right advisor with you in that journey to help you figure that out is really important.

 

I can definitely see that now you’ve written this book, The Entrepreneur’s Guide to Financial Well-being. What inspired you to write that?

 

What inspired me to write it actually was the fact that I think that entrepreneurs don’t know what they don’t know, and they need time to focus on what’s important to them, and having that trusted advisor is important. When I started meeting with clients and talking about these concepts, I’m doing it on a one-on-one basis.

 

And what I realized is this is information that needs to be out in the world so that entrepreneurs can benefit from this information. Really, for me, it’s to impact that broader – that broader audience to do the greater good. And so we encapsulated a lot of the one-on-one information that we were talking to entrepreneurs about in this book in an easy-to-read format.

 

Well, that’s good to know. It sounds like a terrific reference volume for someone, regardless of what stage of their entrepreneurship they’re at, because I would imagine that somebody that’s in a startup or, just starting to get profitable really isn’t in a position to put in place necessarily all of the recommendations that you have. But, are there two or three things that you’d like people to take away from the Entrepreneur’s Guide to Financial Well-being?

 

I think the most – one of the most important things, as I said before, is to find that adviser that can walk with you on this journey that’s accompanying you in the process, that gets to know you and your business, and that has an understanding of what it means to integrate tax, financial and investment strategy. Those are the things that I think are most important.

 

When you’re looking for an adviser, you want to look at their business processes and get an understanding of what it would be like to work with them. There’s a book out there called The Checklist Manifesto. It’s authored by a guy named Atul Gawande, and he discussed the difference between someone with aptitude, which is really the natural ability of a person to be able to accomplish a certain skill set, versus [eptitude], which is the application of knowledge correctly and consistently, right? You can have aptitude.

 

But, if you don’t apply things well, that means things are falling through the cracks. You’re considered to be inept, right? Eptitude is making sure things don’t fall through the cracks. You might have the CPA, you might be an attorney, you might be a doctor, and you might have that aptitude to have those professional accreditations, but your application of that aptitude is eptitude. How effective are you in those roles?

 

And so I think that’s important to know when you start to talk with or understand advisers. What are the processes that they have in place to identify and understand your needs to monitor those processes and make adjustments, and to make sure stuff doesn’t fall through the cracks and to provide you the clarity in that relationship of what’s important for you to consider when making choices.

 

Those are definitely important things to keep in mind and perhaps speaking to some of those advisers, other clients as far as recommendations and their experience in whether those processes are in place and providing the necessary safety net could also be helpful to ensure financial well-being. And just this peace of mind, that, “Yeah, we got it covered. If something comes up, they’ll let me know. We’ll have a discussion. We’ll make a decision and we’ll keep moving forward.”

 

That’s exactly right. I think the most important thing, as we said and talked about, is communication; getting to really know the person, the person’s business, helping them see around corners and avoid pitfalls.

 

Do you find that some of these advisors are more knowledgeable about certain types of business, say, retail versus manufacturing, versus different industries?

 

There’s many advisors out there that concentrate in a specific niche, like being an advisor for dental practices and things like that. But, what I also find is it’s – again, it’s back to kind of the silo mentality. They might actually be in that niche, but not considering these other things.

 

I’ll give you a quick example, like when they built pyramids or cathedrals in Europe or wherever, these big things that they built years and years and years ago, there was really probably one master builder. They knew how to do it and then they told people what to do. What entrepreneurs need is a team of master builders, right? They need – and they need to be well-coordinated.

 

When you think about – I think a tool I’ll go on to use is the example of the skyscraper. You’ve got multiple teams of experts that are working together to raise that skyscraper out of the ground and make sure it doesn’t blow over or that the plumbing doesn’t leak and the wires are well-connected. There’s a lot of complex systems within one of those structures.

 

It’s the same thing with an entrepreneur. There’s a lot of complexity in our tax laws and the financial world, as well as the investment industry. All of those things and the team of experts is really important. It’s not just one master builder, it’s a team of master builders that most entrepreneurs need

 

And finding somebody that you can trust to do what they say they’re going to do is probably the linchpin here. So, Wayne, I appreciate your tips on how to improve the financial well-being for entrepreneurs. I think it’s – it’s so important because so many people rely on entrepreneurs for their future; the families, the employees that they hire and their families, and what their futures are being hinged on.

 

So, if you’re listing and you’d like more information about your financial well-being, Wayne’s contact information is going to be in the show notes at BusinessConfidentialRadio.com, along with the link to his book, The Entrepreneur’s Guide to Financial Well-being. It seems to cover a lot of ground in that book.

 

And if you know an entrepreneur who’s looking for more financial security, tell him about Wayne Titus and this podcast episode. Share the link! Leave a positive review so others can benefit from his advice as well. And you can do that on your podcast app or come on over to LovethePodcast.com/BusinessConfidentialNow.

 

This is Business Confidential Now with Hanna Hasl-Kelchner. I thank you for listening and hope you have a great day and an even better tomorrow.

Best Moments

Most Important Thing Entrepreneurs Need to Achieve Financial Well-Being

3 Types of Financial Advisors Every Entrepreneur Needs to Know About

Missed Opportunities that Hurt Entrepreneurs’ Financial Well-Being

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Guest: Wayne Titus III, CPA

Wayne Titus III, CPAWayne Titus has been involved in the financial services industry since 1991. He served as the founding partner of AMDG Financial and AMDG Tax & Accounting from 2002 until it joined with Savant in 2021. Before founding AMDG Financial, Wayne was a senior manager for PwC, where he was responsible for developing and implementing the information technology and business process audit approach in support of both financial statement audit and consulting projects for various Fortune 50 clients. At the time of the Price Waterhouse and Coopers and Lybrand merger, he worked at integrating these approaches on the international team in London. Wayne also served as financial audit and systems control manager for Ernst & Young.

Wayne earned a bachelor of arts degree in business administration from Grove City College in PA, a bachelor of science degree in accounting from the University of South Florida, and a master of science degree with honors in employee benefits from John Marshall Law School (now University of Illinois Chicago School of Law). He is a Certified Public Accountant and earned the Personal Financial Specialist credential, and he is an Accredited Investment Fiduciary Analyst® (AIFA®). He is past chair and member of the Michigan Association of Certified Public Accountants’ Financial Literacy Task Force.

 Wayne is a member of Rotary International and served as the district governor and club president for Rotary District 6400. He volunteers as an accelerator coach for Entrepreneurs’ Organization. Wayne authored the book, The Entrepreneur’s Guide to Financial Well-Being, and loves to educate others on financial, tax and investment topics by writing columns and through public speaking.

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