283 | What If Your Money Bought You More Freedom? The Real Life Impact of Smart Tax Planning

[00:00:34] Hilary Hendershot: Well, hey, Money Lover. You know, over the last several episodes, you’ve heard a lot of really complex, in the weeds, tax lingo. We’ve been talking about capital gains tax, alternative investments, and a new term, Ultra Tax Efficient Wealth Management^SM.

[00:00:50] And if you’ve made it through that, first of all, thank you. I appreciate that. And if your eyes glazed over a little bit, I get it. I completely get it. And you know, what I tell myself is, when I go to the doctor, I really would like that person to be familiar with some medical terminology that I am not. And that principle holds true in my life. Hopefully, you could see that it’s probably the same when it comes to your financial, tax, and investments team.

[00:01:16] But I kind of want to bring it back to, what is this really all about? It really is all about getting you to be able to enjoy more of your money, okay? That can contribute to your progress in meaningful ways, toward real peace of mind, toward autonomy, toward a sense of being able to author your own life, right? And that’s what it’s all about. I mean, I say to people when they come to my office, often when we first meet, the first times, I say, “Look, we can have lots of technical conversations about what my team and I want to do with your money, what we’ve historically done, how it will probably go in the future.”

[00:01:57] But, ultimately, the real question is very simple, like anything else, when I go to the doctor, the question boils down to, “I’m in pain. How can I not be in pain? Or I don’t know if I’m doing this right, and I want to maximize my longevity. Like, let’s talk about what are the principles of health when it comes to this particular consideration.” And when it comes to sitting down with your financial advisor or your tax strategist, the real question is, how can I make sure that my money is going to outlive me, and how can I maximize my quality of life in between now and then?

[00:02:30] You’re working hard, you’re saving, you want to know you’re following best practices, and you want to know that the people working for you on your team are impacting your life in positive ways when it comes to being confident your money will outlive you and being able to spend a lot of it, right, and then potentially create a legacy with it. Do I want to give my money to charities? Do I want to leave my money to my children? Those are questions you get to answer for yourself with your spouse or partner and in partnership with your financial team. And you just want to maximize all of that. And so, all of those technical terms really serve to further you in those endeavors. And so, I just wanted to have this conversation. I wanted to zoom out a bit and kind of dig into what this would really mean for you in real life.

[00:03:17] As we wrapped up recording those fairly technical episodes on Ultra Tax Efficient Wealth Management^SM, I said to my producers, “What is the one thing we haven’t covered? What is the thing my listeners are going to be left wondering?” And so, here’s what they sent me.

[00:03:30] “Hilary, when you were at the financial planning conference you referenced in the first conversation with Robert, you had a visceral reaction to the possibilities of the particular solution that you found out about at that breakout session and the potential avoidance of paying capital gains taxes. We’ll say minimization of paying capital gains taxes. On paper, that can mean savings of seven-plus figures for suitable investors. But what do people actually unlock when they hire your team to implement Ultra Tax Efficient Wealth Management^SM strategies in their portfolios? Outside of the positive growth of numbers on a screen, what does it mean for their lives? And why is this strategy so exciting for you?”

[00:04:09] Well, I am excited to answer this question, and I think that I’ve set the stage for this. I’ve shared my business ownership journey over the course of the 280-some episodes of this podcast. And so, I don’t mind letting you in on the story, kind of the background of it for me, and hopefully that’s something that you’re still interested in hearing about.

[00:04:31] Over the years of my career, first of all, 25 plus years in this industry, I’ve really never met what I thought was a home run tax minimization strategy. Instead, and you heard Robert and me talk about it in the episodes, the collaboration episodes, but what I see is people contorting their lives around avoiding paying capital gains taxes. And we called that avoidance deferral, so I would use that word synonymously with deferral. But that means, literally, you invest in something and then you never, ever sell it.

[00:05:08] I mean, I can’t even count on my fingers and toes, right? Probably hundreds of people that have accumulated what turn into $10 million and $20 million real estate portfolios, and they’re terrified to sell them. And in some cases, they’re living on minimal rental income that’s inconsistent or whatever is leftover for them because their eye is no longer on profits. It’s not on maximizing their cash flow so they have a quality of life now.

[00:05:36] It’s really tax avoidance, and that has always felt like a very imbalanced strategy to me. It seems like if you’re going to have a $20 million real estate portfolio, you should be living like a queen today, right? And so, I never really got on board with those strategies. And then, over time, as my team and I developed more and more tax education and tax prowess, now, mind you, I came from a world where I trusted tax advisors, CPAs, and EAs to get it right every time, and a lot of them do. And we started to find mistakes on client tax returns, and like, expensive mistakes.

[00:06:14] I mean, if you have $100,000 of carry-forward losses, that has to be tracked every year. Your tax preparer has to put that number in your tax return every year, or you lose it. And if the tax preparer forgets to put $100,000 carry forward in your tax return, that means $33,000 in capital gains taxes that you’ll have to pay that you shouldn’t have had to pay. Those were rightfully yours. So, it’s like your tax preparer losing a four-carat diamond ring that you owned, right? And we’ve seen that happen.

[00:06:47] And so, I started to get a sense that there was something possible that we could do for clients that we weren’t, not that we weren’t doing then, but that I had I didn’t know about before. Okay. So, now we have this process where we review every single tax return and we do it against professional software with formal tax education, and we do find mistakes, right? So, that’s just one kind of turning point for me in terms of what I started to see. You start to see more and more tax-efficient investment solutions coming online, such as direct indexing that allow people to unravel capital gains. That means you don’t have to defer it forever.

[00:07:27] And so, I’ve started to pay attention, and we start to accumulate this suite of services that we offer. And it’s everything from estimating quarterly taxes for clients to, like I said, reviewing tax returns and making sure there’s no errors, to making sure there’s always tax-managed investments inside taxable portfolios, and doing direct indexing when it’s appropriate.

[00:07:47] And then I’m sitting there in this breakout session, and the separate account manager that we talked about, again, this is just one solution under the Ultra Tax Efficient Wealth Management^SM umbrella, and he starts talking about what this solution makes possible. And it uses the, we use the term, I’m trying not to be technical, but it basically comes down to producing tax losses that aren’t portfolio losses.

[00:08:14] So, there are losses on your tax return that don’t take your bank account balance or your investment account balance down. It’s miraculous thinking. And I got butterflies in my stomach. I mean, I got goosebumps on my arms, right? I was like, “Is this real?” That was my first thought, “Is this real?” I need to make sure. I need to do my due diligence. And of course, that started right away.

[00:08:37] I had my team start on that due diligence, literally before I left that breakout session. And then in between that time, which is October of ‘24, and now, which is May of ’25, we have developed a consultative package that we wrap around these solutions because, of course, anytime you want to spend your money, if you have an investment that’s in a taxable gain position, you have to sell that investment. You must. And I am committed that my clients be able to spend their money.

[00:09:11] So, we’ve got to figure out the timing of your distributions. We’ve got to plan with you for that. We have to understand what’s happening with the separate account manager, the direct indexer, and we have to make sure that not only are we deferring gains as we go along, but that your distributions, the cash that you use to live on, to spend, to see your children, to travel, to see your girlfriends, to donate to your favorite charity, to buy a name brand bag, or to take your friends out to dinner, whatever you’re doing with your money, which is what you have every dang right to do… that it’s as tax efficient as possible.

[00:09:49] And so, you know, we put our heads together. As you know, my husband came to work for me, and now, for the first time in my career, like I said, in 25 years, we’ve got something really huge, really significant to offer people. Again, coming from a world where tax minimization was kind of in the lap of the CPA, because I wasn’t interested in helping people roll over their investments forever and ever and ever, and then inevitably, the conversation on the part of the investor becomes–because when the mindset is, “I never want to pay tax”–the conversation on the part of the investor becomes, “I’ll never sell it, because when I die, I get a step up in basis, and then I’ll just give it to my kids.” And if you have plenty of money and that’s what you want to do, more power to you. I will absolutely help you do that.

[00:10:38] And I think that that kind of thinking is a result of the contortedness of the thinking that develops over years of just absolutely refusing to sell the investment and pay the tax, and now my team and I can offer you something so much better. And it’s exciting because what I’m really about, I mean, I used to run women’s circles, and I had live events at one point. And what I always say to people is, “I’m going to be honest with you. I don’t care about your money. I really don’t care about your money. I care about what it makes possible for you, right? I care about you being able to write the script. I care about you being the author of your own book. I care about you enjoying the fruits of your labor.

[00:11:25] There’s a dignity and a pride that comes from hard work. And I know through the cycles of business ownership that when I’m well compensated for that hard work, I am a lot more happy than when I’m not, and I’m guessing it’s probably the same for you. And if you’re being well compensated and rolling it diligently into taxable investments that you then never sell, what’s the point of being well compensated? You’ve got to be able to spend your money.” I feel like I’ve said that 100 times, but it’s something I’ve never really been able to say before because I’ve had to kind of keep it to myself.

[00:12:02] So, what this really means for my clients and for the world at large, right now it’s the people I’m working for, it could be for you, is you get to enjoy the fruits of your labor. You get to spend more money. You get to have more money. You get to understand the pride and confidence that comes with being a multi-millionaire and knowing that you’ll always be a multi-millionaire, knowing that you’re not going to have to spend down all those assets in order to have a lucrative retirement and pay for your healthcare. Right?

[00:12:31] You know, for a lot of my clients, over the volatility and unprecedented times of the last three, four months. Well, I don’t know exactly when we’re going to air this episode but, you know, it’s been unprecedented times in 2025. And if you are surrounded by a moat of assets and investments that you have confidence in, it goes hand in hand with having a really trusting relationship with the stock market and, of course, your underlying investments.

[00:12:57] But if you have confidence that you’re going to be okay, there’s a degree of anxiety that you just never have to get to. Yes, I’m worried for the world, but I’m not worried about myself. And when I’m anxious, I can’t work or think or be a great mom or a great friend or a great wife, right? And so, we’re making all of this possible for people.

[00:13:19] For years, we’ve been having conversations about, “What kind of returns can I expect from my stock market portfolio?” I can’t tell you. I’ve probably had 10,000 hours of this conversation, right? Because it’s every new client I meet with. And the answer is like somewhere between 8.5% and 9.5% in a diversified portfolio. Or let’s just say if you just bought the S&P 500 index fund, just so I don’t have to put additional disclosures at the bottom of this episode. What can I expect to get from an investment portfolio?

[00:13:46] Let’s just say it’s 8% and then the rule of 72 says that your portfolio will about double every nine years. Take the return rate, divide 72 by that number, and then the quotient is the number of years it takes for your portfolio to double. Okay. So, it doubles in nine years, and then it quadruples in 18, and then eight tuples in, right, you get it. I’ll come back and re-record the numbers correctly if my producers tell me that I need to. But the point is you get exponential returns, but still, like 8%, 9%, 10% it’s never exciting.

[00:14:18] I mean, the S&P 500 does have 25%, 26% years, and that’s why we always say it’s time in the market, not timing the market that makes the biggest difference.

[00:14:28] But if you’re talking about you just went through an IPO with your company, and your company stock is now worth $5 million and you go to financial advisor tax Team A and they tell you, “Liquidate it, diversify it, because that’s the right thing to do. Concentration is super risky.” And you liquidate it and diversify it, and you pay a million dollars in taxes.

[00:14:55] Well, now your $5 million is worth $4 million. Versus you go to financial Team B–no big secret, that’s me and we have a way that you can, over time, diversify that concentrated stock. It doesn’t all happen in year one, and of course, nothing’s guaranteed, but we have a way you can unravel that and end up with the same $5 million. That’s huge, that’s meaningful, that’s life-altering, right? And so, it’s really exciting.

[00:15:31] Most financial advisors are, like, really committed to their clients. We’re really people people, and it’s the same for me and my team. I think some are bean counters, but we really care about our clients. And I do care about the difference between you having $5 million than you having $4 million and multiply those numbers up, like ratchet those numbers up.

[00:15:52] There are people in Silicon Valley who are worth $50 and $100 million, right? And depending on where you go, that’s maybe like not quite enough to get access to a family office. But let’s say we’re diversifying $100 million in stock. I mean, you’re talking about tens of millions of dollars that you, as the person who worked hard and earned that money, get to invest, spend, save, keep, build on, enjoy, be proud of, go to Disneyland with, pay for your mom’s health care, pay for your mother-in-law’s health care. Right?

[00:16:28] Money doesn’t solve all problems, but it really solves some problems. It really, really does.

[00:16:39] And so, my team and I are really excited to be able to bring you these solutions. And in this episode, I’m going to share some case studies. I’m going to do high level because Ultra Tax Efficient Wealth Management^SM has a lot of different applications.

[00:16:45] This all comes down to and back to and around to my team and I have a blueprint document. Most companies would call that a mission and vision statement. However, as you all know, all of you listening, most companies paint their mission statement on the wall, or like it becomes wallpaper, or like a mug that everyone gets at the team meeting and then never talk about it again. And that’s not the case with my team and I.

[00:17:11] We’ve really baked it into everything that we do, and it’s very touching and moving for all of us. And we’ve baked all of our own personal reasons for being on the planet, our purpose, our callings into that document so it’s personal. And we have an ultimate intent. And that ultimate intent, of course, it won’t surprise you, but it may surprise you, but it won’t surprise you. You know me and it won’t surprise you that our ultimate intent has nothing to do with money.

[00:17:37] Our ultimate intent is people are thriving. People are thriving. And so, that’s why we come to work. And with Ultra Tax Efficient Wealth Management^SM, it doesn’t need to be said poetically. You can thrive more. So, you can thrive more with us, and we get to thrive more because you thrive more. And it’s just awesome.

[00:17:55] In terms of some of the investor situations my team and I can help people avoid now, I hate to use negative examples, but the possibilities of Ultra Tax Efficient Wealth Management^SM do come down to helping people avoid some of the mistakes I’ve seen people make in the past, right? So, in my role as financial advisor, I come across detailed case studies often, and I get to watch it over time because I stay in contact with these people.

[00:18:22] So, for example, this is a real scenario. She worked at the Apple Store for many years in her youth, and she doubled down on the stock purchase plan. She bought as much Apple stock as she could, and she went through life, worked hard, had some tragedies occur in her life. Always had kind of what you might consider an average income, high living expenses, but she kept that Apple stock. And if you’ve followed what’s happened with Apple, I mean, 25 years ago, people thought Apple was going out of business. So, Apple was not a darling of Silicon Valley. It was way undervalued. And since then, that stock has just mushroomed in value.

[00:19:02] So, now she’s in a position 25, 30 years later, and kudos to her. She held on to this stock, but she can’t spend it. She can’t spend it. So, she’s still working to live. She may take some dividends here and there from a portion of her portfolio. Like, I’m not saying it’s completely locked up, but she’s terrified to diversify it, terrified to do anything with it than she has done. Why? Makes perfect sense. Because her actions up to now have led her to where she is. Is Apple going to continue to skyrocket in value? Maybe. I mean, being that it’s already at the top, it doesn’t have far to go, and I’ve published on that before. But at her age, is it worth the risk? And she’s the sole breadwinner and she doesn’t have a partner or spouse. At her age, is it worth that risk?

[00:19:48] You know, mathematically, it’s not. It’s a matter of getting over an emotional hump because to her, Apple is the reason she is where she is, and so diversifying means sort of divorcing herself from that successful partner she’s had for so long. So, those kinds of situations make me sad.

[00:20:05] Also, there is someone in my social circle so this is not a client, but a woman who made her money in Silicon Valley real estate. So, she bought properties that were dilapidated. She and her husband renovated them. They rented them out, made money that way, sold a couple, 1031 them into a new real estate portfolio, and they’ve made massive wealth.

[00:20:26] Now, the one thing people don’t realize is that when people make massive wealth in residential real estate, it’s typically because they got lucky and caught a tailwind, and she started investing in Silicon Valley real estate before it was Silicon Valley. It was Santa Clara County or San Mateo County or San Francisco County, right? When I was born… Am I going to tell you the year I was born? Let’s just say it was in the mid-70s. That area and I lived there, that was not Silicon Valley, right? And so, as soon as the tech companies started coming in, clustering there, and it started being called Silicon Valley, of course, the value of real estate went through the roof. It grew way faster than residential real estate normally does. So, that tailwind explains a lot of her wealth. It was luck. Yes, they worked hard, but they also got lucky, and that probably doubled or tripled their numbers, okay?

[00:21:18] But now, of course, she doesn’t want to sell, doesn’t want to do anything different, doesn’t have any experience with stock market investing. She’s in her late 70s, so it’s hard to do something new. And she had a property where the next-door neighbor’s tree fell on the house. It almost killed her tenant. The tenant sued her. The next-door neighbor has some mental health stuff, like, not all there, not making totally rational decisions, but like no one’s taking over power of attorney or anything, and that person won’t pay to do the right things with the tree. So, the tree stays there. The tenant now moved out. The tenant is suing her. So, the property is uninhabitable. It’s completely income-free. I mean, it’s vacant. Nobody’s renting it and not going to rent it for a long time, and she’s got almost seven figures of lawyer bills, right?

[00:22:09] So, these are the kinds of things that people don’t think or know to expect or worry about, and the kinds of things that would be very difficult to insure against. So, it’s not like she didn’t have the right insurance. It’s just like some losses go to the property owner, the investment owner, right? She’s the principal. She had the risk. Her butt was on the line. She was the one taking the risk. She was the one enjoying the proceeds, and now she’s the one paying the price. Her husband died a few years ago, and this thing is just a massive money pit.

[00:22:39] One thing you could say ties these two women together, you know, one woman invested in stock, one woman invested in real estate, is I do think it’s appropriate when you’re in your saving and investing years, when you can afford the losses to swing for the fences, to sometimes take what would otherwise be really significant risks, right?

[00:22:58] To some degree, there are aspects of life that are a gamble. I mean, an example in my life, I mean, I went back for my MBA. I paid $100,000 for my MBA. That was a gamble. That was a gamble. I didn’t know what would come after it, or if I would earn $100,000 more than I was on track to earn before. But it’s just an example of you probably don’t have many people in their 60s going back to their MBA. It’s appropriate to do that kind of stuff when you’re young, 20s, 30s, that kind of time frame, right? I don’t want to set specific limits, but they did that.

[00:23:27] One woman went all in on her company stock. Another woman went all in on real estate. And then mathematically speaking, and it gets probably an eye roll for you to hear, but concentration in your investment life? At some point, it becomes intolerable risk. You don’t want to have all your eggs in one basket, and whether that’s Apple stock or NVIDIA stock or residential real estate, the risk is the same. The ways that that risk comes to bear may be different for those two different types of asset classes.

[00:23:59] For example, I was just talking to my friend. She said, “Oh, I had $10,000 in Bitcoin. It got stolen.” Someone just hacked her account, right? So, it was concentrated. It was one asset in one place, and she suffered a total loss. You can afford a few of those over your lifetime. And when I go to the blackjack table, I bring $200 or $300 and I can afford a total loss, but that total loss of the money that I brought to the table represents nothing in my overall financial picture. I do not risk and will not risk anything that would hurt me, that could leave me worse off than I am today, right?

[00:24:37] And so, again, you’ve all heard the financial people admonish you not to have too much concentration in your portfolio, but you just don’t want your life, your quality of life, your financial prospects, to rise and fall with one investment.

[00:24:51] And so, what Ultra Tax Efficient Wealth Management^SM can make possible, let’s say, for both of these women, right? We could take the Apple stock. We could diversify it over a period of years and provide a stream of income. I’m being vague. Later in other case studies, I’ll be able to provide specific numbers, but we could provide a livable stream of money, of income for her that is totally tax-free. So, she would end up with a diversified portfolio, and she could let the portfolio grow for a good amount of time, and we would still be building up losses for her that would make it more tax efficient. But if she wanted to start improving her own quality of life today, we could do that in a very tax-efficient way, thus alleviating the concentration risk and improving her quality of life.

[00:25:43] And the same thing for my friend in real estate. Let’s say I get to meet her with Ultra Tax Efficient Wealth Management^SM before the tree fell. Just to kind of simplify that, because the real thing we’re dealing with here is unwillingness to sell, the emotional need to defer, to defer and not pay taxes by not liquidating. That’s ultimately why she’s still a landlord at her level of wealth and at her age. She shouldn’t be working. She’s rich enough. She shouldn’t be working.

[00:26:20] So, we’re rewinding. We’re taking the tree out. We’re going, you know, doing that thing. We’re going backwards in time. And I get to meet her with the Ultra Tax Efficient Wealth Management^SM solution. Again, just like the Apple stock person, I get to say, “You’ve got millions and millions of dollars in Silicon Valley real estate. We can unravel that over time. You can maybe sell a property every two or three or four years, and we can amass enough losses, taxable losses, to allow you to diversify that, to avoid much of the tax.” You know, there’s some strategy to it, a little complication here because, obviously, if you sell a piece of real estate, 100% of the tax is due in that tax year.

[00:27:03] So, it’s a little bit different how our strategies would work, but it does allow her to potentially strategize amassing losses in the years before the sale of the property, sell the property, use those losses to cancel out the gains from the property and sort of rinse and repeat over a period of years, saving her meaningfully on the capital gains taxes that would otherwise be due in the year that she sells the property.

[00:27:30] So, again, we’re unraveling that concentration risk, getting her out of having to manage real estate. We use this phrase, “You don’t need to be cleaning toilets.” And then everyone always says, “Well, but I hire a property manager to do that.” But it’s a figure of speech, right? We all know if the property manager doesn’t show up, you got to show up and you got to fix the doorknob, you got to replace the windows, you got to clean the toilets. It’s a figure of speech, right?

[00:27:56] So, at her age, she should not be cleaning the toilets. She should not be managing tenants. She should not be collecting rent checks, right? So, we’re getting her out of all that in a very tax-efficient way. And so, it’s absolutely a meaningful way to improve people’s quality of life.

[00:28:11] We’re going to keep talking about Ultra Tax Efficient Wealth Management^SM and I’m going to transition from stories of people I know or knew and could have helped in the past to some case studies that my team and I created. So, I have more specific numbers to share, and these are illustrative of scenarios that are very real, and they’re just not people I already know. They’re probably not people I already know. They might be. But anyway, we have more specific numbers.

[00:28:38] So, first case study is concentrated stock risk, and we see a lot of this in Silicon Valley. For this case study, we’re using a woman’s name, Marla. So, Marla is an engineer in Silicon Valley, and she’s got $10 million of company stock, okay, and it’s all highly appreciated. Now, she’s worth $10 million and she wants to work less. She wants to work by choice, not necessity. Imagine. And she’s aware of the risks of not diversifying because, I mean, we’ve talked about concentration risk.

[00:29:11] I mean, we’ve just lived through a 7, 8, 9-year period where it seemed like tech stocks did nothing but go up. But let me just point out to you, it has not always been that way. From the year 2000 to the year 2010, bonds outperformed the S&P 500. I mean, those were brutal years to keep people invested in the stock market. And now everybody thinks they’re smarter than me because they own the S&P 500, but this too shall pass. And let me just point out to you that Intel company stock is down 60%, okay, so nothing is a sure thing.

[00:29:46] But the thing Marla knows is that triggering, if she sells $10 million of company stock, she’ll owe, assuming a 25% effective tax rate, $2.5 million in capital gains tax. But she doesn’t want to pay that, and she also doesn’t want to potentially ride her company stock down.

[00:30:05] So, enter Ultra Tax Efficient Wealth Management^SM. We meet Marla. She can gradually sell down her $10 million of company stock over time using what we’ve referred, these solutions. Okay. It’s a long-short tax-aware, long-short overlay. It really doesn’t matter what it’s technically called. I did describe that in great detail in Episode 281 and this strategy would be able to diversify 50% of her portfolio within four years and fully diversify within 10 potentially completely eliminating the $2.5 million tax hit.

[00:30:47] So, Marla gets to keep those funds and they compound instead of paying them in taxes so she has $10 million instead of $7.5M. So, instead of remaining trapped in a concentrated stock portfolio, and really, like, if you’re really internalizing the risk of that, it’s affecting your quality of life, right?

[00:31:09] I would not be comfortable with my money in one stock. $10 million of my stock, I don’t even think I could make it to the end of the trading day. I would be out of my mind with anxiety.

[00:31:18] So, instead of remaining in this concentrated portfolio of company stock where she can’t enjoy the fruits of her labor, Marla is able to unwind her portfolio without forfeiting $2.5 million to taxes. I don’t know that I have to say the emotional benefits of that; the quality of life benefits of that, but I will. I will give it a go. I will try. From there, she’ll have real financial security in reality, and in her heart and her soul. She’ll have freedom, she’ll have pride, she’ll have confidence. She’ll be able to work if she wants to.

[00:31:53] Some of my clients come to me. The thing a lot of my middle-aged female clients spend a lot of their money on is to look younger, not because they’re trying to hook a man or because they’re just vain, but because they’re afraid of ageism. She gets to forget that ageism may or may not be real, that she may be losing her ability to earn money, just through the natural progression of becoming a more and more successful human being on the planet and living longer. So, she can hang her hat and be done with that. She can go do what she wants. It’s real, it’s meaningful, and it’s powerful.

[00:32:31] The bottom line is that Ultra Tax Efficient Wealth Management^SM, it’s about more than saving you on taxes. I mean, that’s great. It’s a great benefit, but it really unlocks the freedom to enjoy it.

[00:32:43] I also want to position the importance of this under the header of really securing your lifestyle and potentially a meaningful legacy. When I started in this industry, the concept, the word ‘legacy’ really referred to minimizing estate taxes, what a lot of people call death taxes, so that you could get your heirs kind of the most money. You would not pay Uncle Sam. You would leave your money to your kids.

[00:33:13] But more and more, there’s this really inspiring conversation of generational, sustainable wealth. And I see it all the time. And people talk about how much money they’re saving so that their kid will be a millionaire by the time she’s 30. And you don’t need particular investment accounts to do that. That is the magic of compound interest.

[00:33:34] So, if you are saving and investing and letting that compound, you can keep it for yourself and pass it to your heirs at your death or you can give it to your kids as they grow. But really, like, ask yourself, I think about the amount of anxiety I suffered under the heading of money, like I suffered about money. Those of you who listen to the show, you know I wrecked myself financially. I was homeless, living on my mom’s guest bed, and that was shameful for me. It was embarrassing. It hurt my dating life. I mean, of course, it did. And more than that, it took me years to recover.

[00:34:10] So, I got into a hole, and then it took me years to recover. So, it’s been a learning lesson for me, but really like, what can I make possible for my daughter if I’m able to alleviate that stress and anxiety from her life?

[00:34:23] Now, of course, you have to have the conversation with yourself, how to do that responsibly, right? But let’s just say that’s a different podcast series. So, if you can give money to your kids, should you? How much do you want to? What other skill sets do you want to teach them or lessons do you want to teach them to make sure they still end up to be responsible, empathetic, good citizens? I’m there with you. It’s just kind of out of the scope of this particular conversation.

[00:34:47] But securing your legacy is something you’ve thought about. Really, like getting through to the end of life knowing that you can handle any health care costs that might come up, right? People talk about health care costs that come up at end of life, and then having the choice, do I give money to my favorite charity? Do I give money to my kids? Do I give money to my friends? I give money to my friends. I do it now. And that’s something I wasn’t able to do. In the past, they had to give money to me. So, I’m like paying them back.

[00:35:19] I have clients that do that. You get to make the choice of how you dispose of your hard-earned money. And the idea that you can have a plaque on a park bench or a foundation that carries forward your mission, or some kind of entity that really makes you — what is the word for living forever? Immortal. Immortal or eternal. I mean, this is a meaningful conversation, and Ultra Tax Efficient Wealth Management^SM is a strategy that backs that up.

[00:35:54] It also backs up the core pillars of my firm’s blueprint. Your wealth is more than money. It really is. And our guidance with your money will enable your experience of trust, well-being, and freedom. We’re contributing to communities that continuously contribute to each other. So, there’s that idea of sustainability and regeneration again. We contribute to each other’s wealth and empowerment, and we experience appreciation and gratitude. So, I think you could see that this is all very, it’s really emotionally rewarding for me. It really feels like the culmination of a lot of years of wanting and not having strategies that I now have for clients to make your life better.

[00:36:37] One of the things I want you to take from this conversation is that tax strategy and tax efficiency, like taking on the goal of being tax efficient in your investment life, isn’t conceptual. It’s not abstract. It’s very real. It’s a much bigger lever than worrying about the difference between paying 1% per year to a financial advisor and not paying 1% per year to a financial advisor. This has huge ROI, right? Depending on what your tax rate is, we’re talking about the difference of 25%, 33%, 38%. It is real numbers. And so, it’s worth your time, it’s worth your investment, it’s worth your money, and it will make, assuming these strategies work for you, will make a meaningful difference in your financial life overall.

[00:37:34] Let me say it because it needs to be said, everything I’m talking about under the Ultra Tax Efficient Wealth Management^SM umbrella is absolutely playing by the rules, 100% above board. You probably know this from listening to me, but I would never leave you astray, never in a gray area. So, if you’re wondering, again, we’re playing by the rules. And I think it’s probably obvious to you at this point, but one really meaningful value benefit that this can provide for you is lengthening your retirement.

[00:37:54] I mean, you could retire for the same amount of time and live on a much higher income. You could retire and it could be the difference between spending down your principal and having principal or nest egg left at the end of your years, or you could just retire earlier, right? I mean, I don’t know what you want to do with your one and precious life, and a lot of people have really meaningful work, right? But for a lot of people, retirement is the goal. Let’s get you out of the rat race and get you to doing the things that are meaningful and inspiring and fulfilling for you.

[00:38:27] Okay, under the header, under the umbrella of Ultra Tax Efficient Wealth Management^SM I want to talk with you about a case study we created. If you have any questions about the math, you can go to the show notes for today’s episode.

[00:38:40] But I want to talk to you about a married couple, and we’re just going to call them Spouse 1 and Spouse 2, or we’re not even going to go husband and wife, right? We’re just Spouse 1 and Spouse 2, and they inherited from Spouse 1’s parents $3 million in a taxable account. And they’re 45 years old and they would really like to retire early. They’d like to retire in 10 years, so at their age, 55. So, let’s talk about what’s possible for them without Ultra Tax Efficient Wealth Management^SM.

[00:39:10] So, in 10 years, assuming a 6.5% return and 2.5% inflation, and a 36% tax rate, they could start spending $200,000 a year. They could spend $200,000 a year. They’d have to withdraw $240,000 a year to spend 200 because they’d have to pay 40 in tax every year. Again, simple numbers, but after 35 years, they’re at zero. So, that’s it. End of game.

[00:39:33] Again, that’s not how we do retirement plans in my practice. My clients don’t run out of money. But it’s worth talking about because it elucidates; it’s an example that is illustrative of the benefits of Ultra Tax Efficient Wealth Management^SM.

[00:39:49] Okay. So, in Scenario A, no Ultra Tax Efficient Wealth Management^SM. It grows for 10 years to $5.6 million, then they distribute $240,000 a year. They spend $200,000 for 35 years, and then that’s it. They’re out of money. Scenario B, in this case, Ultra Tax Efficient Wealth Management^SM can shield our married couple’s retirement income from taxes on investment gains.

[00:40:15] So, this means their investments grow to $5.6 million–same as before because we did tax deferral in Scenario A–before their 10-year retirement date, but the distributions are not taxed. So, under my assumptions, they’d be able to spend $200,000 a year. So, that same, $200,000 a year, they’re not paying tax, so they’re not distributing 240 and that makes the difference between them running out of their nest egg and them not touching their nest egg.

[00:40:47] So, the bottom line here is that the real goal is enabling people to author their own lives and hopefully pass that legacy on. Because wealth is more than money, and the redistribution of resources is one of the ways we can contribute generously to each other’s empowerment and experience of abundance.

[00:41:04] At this point, you’re undoubtedly wondering, “Who is Ultra Tax Efficient Wealth Management^SM for? Hilary, I would like to get on board with this.” Some of you are thinking, “My parents should get on board with this.” Well, let’s talk about who are suitable investors for Ultra Tax Efficient Wealth Management^SM.

[00:41:23] First, ask yourself some simple questions.

[00:41:26] Are capital gains taxes a big part of my financial life? Am I sitting on appreciated investments or assets that I’m afraid to sell? Am I making decisions from the fear of tax implications? And am I more focused on avoiding a tax bill than I am on creating a life I love? So, if the answer to any of those questions is yes, this strategy might be the thing that helps you stop sabotaging your own wealth and start living your life.

[00:41:56] Ultra Tax Efficient Wealth Management^SM is for founders, employees, executives, early retirees, real estate investors, folks who have accumulated a large amount of wealth but who aren’t sure how to move forward without incurring a huge tax bill. If you want to unwind a concentrated stock position without getting crushed by capital gains, if you want a strategy for turning a liquidity event, say you’re selling a business or getting paid out as a shareholder of a business, if you want to turn that into lasting freedom, and if you want a way to spend and share your money without fear or friction, this could be for you.

[00:42:33] It would mean working with my team and I as your wealth management and tax efficiency strategy team. It requires, of course, there’s a minimum account size, and it’s $1.25 million in a taxable account. The limitation on that is if you have sell windows, so if you have blackout periods and you’re not able to sell your company stock, and those are sort of unplanned, that’s not good. But if you have taxable assets elsewhere, we can help you unravel those gains over time anyway.

[00:43:02] We’d love to talk with you. We are happy to do a custom analysis. If you think you might be right for Ultra Tax Efficient Wealth Management^SM, we recommend you reach out, and we’ll be able to tell you within a few questions or a few conversations. Of course, it’s no obligation, no commitment. So, the best thing to do is raise your hand by going to the contact form on my website.

[00:43:25] Let’s talk about what would happen if we were to meet Ultra Tax Efficient Wealth Management^SM. So, our Ultra Tax Efficient Wealth Management^SM qualification process is a lot like our standard onboarding for a wealth management or financial planning client, and what we do is we just layer in these questions that help us know if these kinds of solutions are going to be important for you.

[00:43:49] So, first, we’ll have a 20-minute chat. We’ll just talk with you about your goals and values. You’ll get to say to us, “I’m really interested to know if UTEWM^SM is right for me. Assuming we all like each other and think we’d work well together, we’ll schedule what we call a Discover Meeting.

[00:44:03] Before that Discover Meeting, we’ll ask you to upload investment statements, tax returns, right? These are the things we need to actually look at to know if we can help you with this consultative service, then we’ll have a longish 45 to 75-minute conversation about you, your goals, how you got to where you are, and where you’d like to go, talk about the things that are most important to you, the people, your parents, your siblings, your kids, your grandkids, your great grandkids, your colleges, your temples, your foundations, your charities. We love to know about all that stuff.

[00:44:34] Assuming all of our conversations are going well, we’ll schedule the Investment Plan meeting, and that’s when you’ll get to see an actual strategy plan for how Ultra Tax Efficient Wealth Management^SM can be customized to your situation and the estimated benefits it would provide.

[00:44:48] At that time, you’ll have the opportunity to decide whether that’s something you’d like to move forward with. Okay. So, it’s a very friendly consultative process. Yes, it does take time. Yes, we need to see your financial documents. I don’t go to the doctor and expect her to work on my body without sharing my medical history with her. And the same is true when it comes to financials. So, it’s a deep dive into your life and our skill set, and we see where we might meet in the middle for a very profitable relationship going forward.

[00:45:16] So, at the end of these episodes, I’m always asking the people I interview, “If your money were writing you a love note or thanking you for something, what would that be for?” And maybe Ultra Tax Efficient Wealth Management^SM is something your money will thank you for in the future. But how we know, how we find out, is you reach out to talk. So, if you’ve made it through this episode, thanks for listening, Money Lover. I look forward to taking this out of podcast land and into the real world where we can talk about the benefits my team and I might be able to make possible in your life.