Lindsay Lohan’s Advice Could Save Your Retirement: Unlikely Financial Wisdom

Plan With The Tax Man

You wouldn’t necessarily expect Mike Tyson, Shaquille O’Neal, or Lindsay Lohan to dispense valuable insights about financial planning matters. In fact, you’d probably expect the opposite. But with a little bit of creativity, we can get some financial planning pearls of wisdom from even the most unlikely of sources.

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Transcript:

Speaker 1:

This week on Plan With the Tax Man, we're going to talk about unlikely financial wisdom you wouldn't expect from the likes of Mike Tyson or Shaquille O'Neal or even Lindsay Lohan. So let's find out what we're talking about this week here on Plan with the Tax Man with Tony Mauro.

What's going on everybody? Thanks for tuning into the podcast. We're dropping this about a week after the election, and we taped it ahead of the time, Tony, just in case the world was goofy. Plus you went out of town, so you were smart.

Tony Mauro:

Yes.

Speaker 1:

You ran away during the week of the election. You did your voting prior to, so very cool. And then you got out for a little trip and just tuned out the noise. I bet that was genius. I'm jealous. How you doing, my friend? You doing all right?

Tony Mauro:

I'm doing well, yeah. Well rested and yes, I didn't plan the vacation like that back when I planned it, but it kind of worked out.

Speaker 1:

It kind of worked out. Yeah. So since you're catching this after the election, but we're taping it beforehand because Tony is leaving, as I just mentioned, that we don't have a conversation for that. So, we'll probably save that for the next podcast to talk about what's going on in the world. So for now, we thought we would do one that was simple and easy and just do some unlikely financial wisdom with some characters we might not have expected financial advice from.

And look, they weren't saying these quotes to be financial advice, but with a little bit of creativity, I think Tony and I can turn those into some. So, let's start with a child actress who had some trouble as a teen, I guess, or a young adult or whatever, got herself into quite a bit of trouble and very scandalous kind of character in the Hollywood scene. And that was Lindsay Lohan, right? So, wound up making some movies when she was younger. Then she wound up getting into some trouble and kind of being very polarizing and so on and so forth.

Here's a quote, and it's a great quote, and it's especially when someone who's struggling with whatever they're struggling with in life, Tony. She said, "I'm my own worst enemy, and I know that." And that's key to fixing whatever problem you have in your life, be it your Hollywood career or your finances. If you know you're your own worst enemy, it can really help you not make more mistakes by maybe getting involved with someone like yourself who can help you battle yourself, if you will.

Tony Mauro:

I agree. And with Lindsay Lohan, I'm sure... Well, I think it's a profound statement by her because obviously I don't really follow her much other than what I used to see when she was in trouble, but obviously she must have found some wisdom to make a statement like that, to at least recognize that she had some issues. And hopefully, I think she's got them cleaned up now. I don't know. But in relation to financial planning, there's a lot of truth to this because most people are their own worst enemies because one, they tend to overreact, they tend to be very emotional, especially if they're trying to dive in and out of the markets and time it and things like that.

And then they become their own worst enemy because they overthink things and they really tend to over time, a lot of times if they're doing it themselves, they don't realize great returns or any returns for that matter. And it's generally because they're their own worst enemy and they're trying to do it themselves and they're messing it up.

Speaker 1:

For sure. And I think a lot of times we do that, right? Because look, we know that we're supposed to buy low and sell high, but often we panic and do the opposite. I mean, that's just the basic core fundamental that most of us screw up. Not because we don't know better, but because emotionally we freak out and we're like, "I just can't handle it. I just can't stomach it. The market's had a bad week and I've lost $10,000," or whatever it might be. And you're like, "Ah, get me out of here." And that's usually not the right thing to do.

And it could be a myriad of other kinds of situations financially speaking, where you just know that you're not supposed to do XY, or Z, but you do it anyway because your emotions get the better of you. And Tony, that's where you guys come into play. Some of the best value, the biggest value that financial professionals provide is being that sounding board to go, "Hey, look, I get it. All right, but here's why you're going to be okay, just to stay the course," or whatever. Or, "You're right, let's make some tweaks." You guys are that sounding board.

Tony Mauro:

I mean, you're exactly right. We have to be the sounding board. And sometimes that's not what people want to hear. But it's [inaudible 00:04:40]-

Speaker 1:

I mean, it could be as simple as calling you up and going, "Tony, talk me off the ledge. I'm about to do something dumb. I want to throw all my money into... Or I want to throw 20% of my portfolio into X or Y, or whatever." And you're like, "Okay, let's talk about that." At the end of the day, you're not the money police. If that's what they want to do, it's what they want to do. But again, you're going to give them the pros and cons of the situation and then they can make that informed decision.

All right, well, good job, Lindsey. And good job, Tony. Next one here is from Chuck. We got to go with Charles Barkley. Guy just says all sorts of great stuff. He's hilarious and has some pretty interesting quotes. He said, "I don't create controversies. They are there long before I ever open my mouth. I just bring them to your attention." And I think maybe you guys can do that too, right? It's like, "Look, I didn't create this tax problem you have. I'm bringing it to your attention, but let's now talk about how to address it."

Tony Mauro:

Exactly. We do this all the time. This is a great quote from him because part of our job is to, not to tear people apart, but to tell them where we think they need to improve in their financial area of their lives. And so they create some of these controversies, whether it be taxes, whether it be they're behind on retirement planning or whatever else, they don't have any insurance. It's just our job to let them know this and how to fix them the best way so that they can get on the right track. And that's the whole reason for the financial planning process, is to get yourself and to try to stay on track. But like he says, and he does say some crazy things, but he is entertaining.

Speaker 1:

And he's got some pretty good wisdom too.

Tony Mauro:

He really does. He really does. And I think in order to solve these problems, first of all, you got to admit you have them and then you got to make a plan to get them fixed. It's really in its simplest terms.

Speaker 1:

Yeah. Well, I'm going to jump to the Shaq one because it really works well as the follow-up to the Chuck one here. Especially with them both being on a same show for a long time with the NBA on the TNT. So if you're talking about the controversy or the problem that Chuck was just talking about and bringing it to the attention, Shaq says, "I never worry about the problem. I worry about the solution."

And I think that's great advice financially speaking too. Maybe not the term never, talking in absolutes, but why worry so much about the problem? Because a lot of times we can't control the problem. We can't control what the government does for taxation rates or what's going on with inflation, but we can worry about the solution.

Tony Mauro:

You can, and just like with the election, half of the people in the country are going to be happy, half of them are not going to be. Doesn't matter where you're at. And we tend to focus on, like you say, these minute problems that are most of the time out of our control, all we can do is set up our process, so we're in the mode of trying to be successful. And it's all the time with taxes. I mean-

Speaker 1:

Oh yeah, it never ends.

Tony Mauro:

... everybody worries about, "Oh yeah, taxes this, taxes that." Forget about all that. Just worry about how can we take them and use them legally to our advantage to pay the least amount of tax possible. That's just tax avoidance. That's not illegal. [inaudible 00:07:58]-

Speaker 1:

Here's the rules of the chess board. We know the chess rules. Now what's the moves we can make with inside the game, right?

Tony Mauro:

Yeah. And it's the same on the financial planning side. Same way, they're constantly changing laws and putting new things into place about retirement when you can take money and the deductibility of money. So, you just have to come up with a plan that's best for you and work it to your advantage and really more focus on the process, I think, rather than some of these annoying little things you can't control.

Speaker 1:

And even if you feel like, "Oh, they're really big things," yes, but there are things that are never going to... I mean, even like this election, to your point, and well, what's going to happen with the market and what's going to happen with the economy and blah, blah, blah. This is what administration, if you're just now retiring, let's say, and you're retired for 20 or 30 years, guess what? There's only an administration for four years, eight tops. So, you're going to see multiple administrations, which means you're probably going to see multiple tax code changes.

Tony Mauro:

Exactly.

Speaker 1:

So, you might as well not stress too much over that and instead get a strategy and a plan together to help you weather whatever comes down the pike. Because again, we're all pawns on the chessboard. We have to move within the parameters that the chess piece allows us, right? Chessboard allows us. I think it's a good way of thinking about that. Don't worry about the problem, worry about the solution.

All right, final one here. We'll finish off with one more sports person. I realize we only did one actress or actor, but we were going to go a little bit more sports. Tony and I are sports guys as well, but they're just really good. Sports works so well from a coaching standpoint. Mike Tyson, everybody's probably heard this one and it's a fantastic quote, and it's dead on. "Everybody has a plan until they get punched in the mouth." And of course he said this back in the day when people were like, they're going to beat him. They figured out how to beat him in the ring.

And he is like, "Yeah, everybody's got a plan until I punch them in the face," and you get woke up real quick. And that's life, Tony. That's dead on for any aspect of life. We can all make a plan and then you get punched in the mouth and you got to change that plan. And so while we're talking about getting people to get a financial strategy and a plan together here on the podcast, you do realize that life is going to still life and throw you curve-balls. That's why you have reviews and that's why you make tweaks and changes.

Tony Mauro:

That's right. And I like Mike Tyson. You study him and his life and what a story that has been. Where he came from-

Speaker 1:

Had a lot of trouble too, but yeah.

Tony Mauro:

Yeah. He had a lot of trouble in his life, was on top of the world as far as money wise. Ended up losing a lot of it to all kinds of things. And I read an article about him when one of his kids were saying that they were to box, and he was telling them, "Why would you ever want to do this with all I've been punched in the face for you, so you wouldn't have to do this."

But taking it back to the financial arena. Yeah, it's exactly that, and we see it all the time. We ask tax clients, "What's your plan for retirement?" They say, "Well, I'm going to retire at 66." I said, "That's it, that's the plan?" And they have not taken it one step further than that. And that's really not a plan, that's just an age you're going to retire. There's all kinds of things that you need to think about is what are you [inaudible 00:11:19]-

Speaker 1:

Oh yeah, I'm going to turn on my social security at 62 and I'm going to start pulling out my retirement accounts at whatever, 67 or whatever it is that then they walk away from the job and hope for the best, right?

Tony Mauro:

That's right.

Speaker 1:

And it's like, well, that's really not... That's just the basics. That's just the age requirements that you're allowed to do stuff. You got to strategize, man.

Tony Mauro:

Exactly. I have a client right now that I'm meeting with in November that is right along these lines. He's 63, she's 62, and they've kind of played a lot in their life, bought a lot of toys and whatnot, don't have a ton of income, just the average American family, but they all of a sudden want to retire and now all of a sudden, they're scared because they didn't have a plan. Now, retirement, in essence is kind of punching them in the mouth saying, well, it's here now. And they don't know if they've got enough money to do it. I don't think they do, I think-

Speaker 1:

Which is a lot of people. A lot of people fall into this category.

Tony Mauro:

A lot of people, yeah. I mean, that's what I'm talking about. They had a plan, but they didn't really have a plan. They said they did, but they really don't.

Speaker 1:

Well, yeah, the back of the napkin stuff, which we all do and there's nothing wrong with it, but at some point you've got to put it into play. I think you said they were in their mid-60s, right? Or early-60s.

Tony Mauro:

Right. Is it too late to start planning then? Maybe not, but sometimes it can be. To your point, Tony, you just said, they may not be able to pull off what they want to pull off. They may have to make some tweaks to get it done. So, the sooner you can kind of start... And I think most of us, and I've talked about this a million times, but I think it's a good analogy to think about, even though we're now into November, is that at the age of 50, I think we start waking up a little bit more to the idea of, "Oh crap, it's going to be here quick. When did I get to 50?"

And so you start maybe getting a... And there's a lot of things in place to help you do some of that. Contribution limits get raised and there's hopefully the kids are coming off the payroll, all these things we've talked about before. And so you can hopefully start stocking away more. And that's a great time to start talking with a professional. Have a five, seven, ten-year window to get some planning done, right? It makes a big difference.

It makes a huge difference. And I tell the young people, even if you are not working with a planner in your 20s and 30s, the best advice I can give you is just start saving. Use the Roth IRA. Use your 401(k)s. A lot of them have Roth options now.

Speaker 1:

Oh yeah, for sure.

Tony Mauro:

Just get in the habit so that when you do start getting a little more serious about it, I'm not saying you shouldn't be early, because you're ahead of the game, but-

Speaker 1:

Yeah. 50 bucks a month, man, would make a huge difference if you started in your 20s, early 20s.

Tony Mauro:

Yeah. Just get the ball rolling so you've got something. So we're not sitting here when you are 50 and you say, "I really don't have much in anything. Help me out." And we can help everybody, it's just you may not want to hear, which we just talked about, what I have to say. I'm just pointing out some of these gaps and what you'll have to do [inaudible 00:14:23]-

Speaker 1:

You can't magically make the money appear that's not there, right?

Tony Mauro:

No. I can't just magically create it.

Speaker 1:

Yeah, exactly. But you can lay out a strategy to go, "Okay, and Mr. and Mrs. Smith or Mr. and Mrs. Jones, whatever, you wanted to retire here in the next, let's say two years. Based on what we've got, based on what you've put together, it's not going to happen. However, if we do XY, and Z, we might could get this done by the next five years," kind of thing or whatever that looks like.

Or the opposite also happens a lot, Tony, which I think people are terrified of, is that people come in to see you for that first time and they're afraid they're going to hear some of the news like you were just talking about, but they actually hear, "Yeah, you guys are in really good shape. With a couple of minor tweaks, you guys are right on time." Or even better, "You guys could actually retire sooner." So, it happens a lot.

Tony Mauro:

It does happen a lot. A lot of times people underestimate what they have coming in and they're in better shape than they thought, and they are relieved when they understand not only we have a good nest egg, but that we can live a long time and it's not going to deplete. And now we can start thinking about what are we going to do for our kids and some other thing, grandkids and things when we're gone.

Speaker 1:

Yeah, exactly. So what do you do, right? You take these quotes from these unconventional folks, and you listen to it for a second and you go, "Yeah, you know what? I need to get a plan. I don't want to get punched in the mouth by life," or any of these other little fun quotes we had this week. So do yourself a favor, do your retirement a favor. Sit down with qualified professionals, somebody like Tony and his team. He's a CPA and a CFP and an EA with 30 years of experience.

So, get on the calendar with the team at Tax Doctor Inc. at yourplanningpros.com. That's where you can find them online, at yourplanningpros.com. Check the show note descriptions in this week's podcast for information and links, and don't forget to subscribe to us on Apple or Spotify or whatever platform you like using and catch new episodes of Plan with the Tax Man. Tony, my friend, have yourself a great week. Thanks for hanging out and I will see you just right before Thanksgiving.

Tony Mauro:

All right, sounds good. Have a great one.

Speaker 1:

We'll catch you next time here on Plan with the Tax Man.

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