Speaker: Mel McMurrin TEST
What is an example of Intentionality in a wealth management context?
Paul J. Brahim: I can give you an example of what intentionality is and what it's not. Winston Churchill. We all know him. He saved the world. He was an incredible statesman. But there's another side to his story. He was truly adept at making money. A lot of money and then rapidly becoming broke. His expensive tastes included carefully selected fine wines, hand rolled cigars, custom tailored clothing. And he was also fond of gambling both in the casino and in the stock market. And as a result, he became rich and subsequently poor several times in his life. And that continued all the way through his time as Prime Minister of England. In fact, during the bombing of Britain, he was on the telephone on a daily basis trying to secure a loan from the editor of the Economist magazine to pay his wine and cigar bill while he was building strategy to save Britain from the Nazis. It's truly extraordinary. We can contrast him on the other side to paypal co-founder, Peter Thiel, he's a billionaire tech entrepreneur and a venture capitalist. And over the past couple of decades, he turned his Roth Ira intentionally right into a multibillion dollar investment by taking just $2000 of his paypal stock and putting it into his wrath in 1998. Now it's worth today $5 billion. By comparison, the average Ira account in the United States is about $40,000. If Phil times his withdrawals carefully, he's gonna pay zero taxes on billions. And that's because he was an intentional investor. So passive about money, make it, spend it intentional about it in both investment and tax. Which one are you going to be?
What does that mean to non-billionaire investors?
It's a great question. Intentionality frankly is important to all investors no matter where they are in their financial journey. So for example, I think about business owners and how they think about their lives linearly start a business, build that business, grow, that business exit that business. Oh, now I have money and I can focus my effort and energy on what's really important to me in life that we think for business owners. This needs to be a parallel track. We build our personal wealth, we unlock the value of that business, transfer it to our liquid balance sheet all along the way so that an exit is optional because you were intentional, right? That's the whole idea. Intentionality creates optionality. You get to decide when and why you want to exit that business and even how you wanna exit that business because you can't, you have enough personal wealth to support the lifestyle that you want for your family. So the way you structure your company, that your timing of when you sell, the way you structure your goals, all can have an enormous impact on outcomes. This truly is the difference between success and failure
What about non-business owners?
Well, we also work with executives and many of them have complex compensation packages. There's incentives and bonuses and stock options and deferred compensation. Those things also need to be managed intentionally because how you structure them and how you exercise them has a huge impact on how much of that compensation that you've worked so hard for. You actually get to keep how much of that goes to your retirement, to your family, to your heirs or to the government in taxes. If you're planning ahead with intentionality, you can make the task of turning that hard earned savings into something that's a secure and comfortable retirement. So to pull all of this together for everyone. Intentionality creates optionality and optionality is empowering. Optionality allows you to be the best version of yourself. Optionality allows you to experience and be fulfilled by what's really most important in life to you. So be intentional.