Ep 215: Who is David Chudyk and what does he do?

All right, everybody, this is episode number 215 of the weekly wealth podcast.

And today I want to talk about some of the things that I do in my own private wealth management practice for my clients.

I'll talk about some things that all financial advisors do or should do.

I'm going to talk about some things that I do a little bit differently, too, and some of the things that might help me to stand out just a little bit.

So I hope that you enjoy this episode.

And here we go.

Welcome to the weekly wealth podcast.

I am certified financial planner David Chudick.

This podcast and my wealth management practice are both designed to help the mass affluent to live better lives by how they handle their money.

We talk about financial strategies, prosperous mindsets, and simply how to build true wealth.

So come on and let's enjoy this journey together.

Welcome to the show, and I want to give a little bit of an introduction of what we're going to do here.

Gonna play an interaction that might describe most new conversations that I would have with somebody at maybe a networking event or a party or something like that.

And this is where some of the misconceptions of what a financial advisor does might come from.

Hi there.

Are you enjoying this networking event?

Yes, I am.

My name is David, by the way.

It is nice to meet you.

What do you do for a living?

I am a financial advisor.

Oh, really?

That is interesting.

What do you think is going to happen with the stock markets?

And do you have any stock tips for me?

Well, actually, I do help my clients to manage their investment accounts, but that is only a portion of my work with them.

I also help them to identify goals, and I help them with tax planning.

I help them with risk management, and in some cases, I even work with business owners to look at their financial statements and help them to make spending decisions.

I really love helping business owners.

All right, so first of all, I hope that you enjoyed my AI generated voice little conversation there.

I just think it's freaky and scary and awesome of all the things that AI can do.

And I wanted to get an AI conversation in there just to make a point, but hey, yeah.

So what do financial advisors do?

Most people think that all we do is we help you to pick your investments.

We tell you that you should sell Nvidia or buy Nvidia, or we tell you that Apple's going to go up, or we tell you which cryptocurrencies to buy, and we tell you which way the markets are going to go and those kinds of things.

And yes, investment management is a portion of what we do.

But today we're going to talk about some of the other things that I do and other financial advisors do and some things that I do that maybe other advisors don't do or not all financial advisors do.

Oh, wow.

I thought that financial advisors just picked the hot stock of the day.

I didn't know that you do so much.

So during most podcasts, you've probably heard me refer to myself as a certified financial planner.

And let's talk a little bit about what that means.

The CFP Board, who is the credentialing body for the certified financial planner designation.

The CFP Board has a seven step financial planning process.

So let's talk a little bit about that and let's see if that's something that would excite you or is something that you've ever experienced.

So the first thing that we are required to do in a financial planning, in a financial advising relationship is we're required to understand your personal and financial circumstances.

So this means understanding your debt, your assets.

These are the quantitative data.

And then there's also qualitative, which are like, what are your values, what are your priorities?

How much market fluctuation can you stomach?

And we just want to listen to you and we want to learn about you.

A lot of the, the money decisions that we make in our lives really should be just geared towards giving us peace of mind.

And how do I know what's going to give my clients peace of mind unless I'm talking to them and listening to what they say will give them peace of mind.

And we also want to identify and we want to select goals, short term goals, long term goals, and we want to prioritize which are the most important and which ones we want to tackle first and which maybe go on the back burner.

So in some cases, maybe accumulating an emergency fund might be a really great short term goal.

And there may be a long term goal of retiring in 20 years with an account that will be able to provide, I don't know, $150,000 of income each year.

So we need to discuss what's important to the client.

Now what's important to me might not be what's important to the client and personally with my personal financial situation.

So I've had some clients say, you know what, I really want to make sure that I'm maximizing how much money I'm leaving to my kids when I pass away.

And that's a great thing if that's what's important to them.

I've had other Clients say, I've given my kids a great life and I want to live a great last chapter of my life.

And if there happens to be nothing or not much left over for my children who are adults now, I'm okay with that.

And you know what?

That is a great thing as well because that is that client's goal.

So one client in that example is looking to leave a legacy, a financial legacy.

The other client is, is looking to really maximize their experiences in the last chapter of their life.

And it's really not for me to say which one's better for or worse.

They're both good.

Okay, we want to analyze our clients current courses of action.

So what would happen if they kept doing what they're doing now?

Would that bring them towards the realizing of their goals or would they end up pretty far for their from their goals?

We also then, number four, we need to develop financial planning recommendations.

Now these are strategies, these are not one time all fits all type products.

So when you see people that claim to be financial advisors posting on social media and recommending like one specific strategy for everybody, that's not custom, that's somebody who's trying to sell you a product.

Now can that product potentially be a good idea for you at times?

Sure, but it's not financial planning.

So we then need to present our recommendations, explain in plain language and answer questions.

And then number six is implement the plan.

So we need to actually do the stuff.

So writing down that a client needs to get some more life insurance doesn't actually help anything unless we actually get more life insurance.

Now during these steps, I might collaborate with the client's cpa, attorney or other advisors because we do need to make sure that the other professionals in your life are involved.

And remember, financial planning is not like a theoretical thing.

It has to happen.

So action is essential.

We need to work with our clients to make sure that the right action happens, not just the planning.

And then finally we're going to monitor progress and updates.

So life changes, laws change, markets change.

So your plan needs to be liquid as well.

So those are part of the certified Financial planner board of standards financial planning process.

And as you can see, it's not like a one day deal.

It's something that can last a long time and it does include a lot of work, both for me and the client.

For my clients, I can't make good recommendations unless I have your financial facts.

And I can't have your financial facts unless you get them to me.

So oftentimes clients are maybe unaware that they're going to have to upload some of their documents and things like that so I can have access to them.

But that is part of the financial planning process.

Now let's look at some differences between, like, financial planners and product salespeople.

Like I said, salespeople lead with a product.

And financial planners, really, they lead with questions that, that ultimately lead to solutions.

So insurance, a salesperson might push insurance.

Now, again, I'd love life insurance.

I think in a lot of cases, permanent life insurance has a great place.

But if somebody ever approaches you and starts talking to you directly about insurance, life insurance as an investment plan, when they don't know anything about you, they're not planning, they're pushing a product.

If somebody suggests any investment products before assessing your risk tolerance, that's someone trying more than likely just to sell you something.

So a real financial planner has a process, not a pitch.

This is something that takes a while.

And we integrate tax planning, estate planning, risk management planning, retirement planning, and life goals.

And while acting as a fiduciary, we put your interests first.

So that is what, generically speaking, all of your CFP certificants, your certified financial planners should be doing.

So let's talk about some of the problems that I've helped solve or some of the problems and issues and solutions that the financial planning process has uncovered when I've been working with clients.

So the first one is generally speaking, a lot of people, and especially business owners, but not always only business owners, they just don't really have a good grasp of what their financial reality is.

So you might ask a business owner, what is your profit normally?

And typically you're going to get an answer that I don't know, a lot of times it's just not accurate.

You can ask what debt is and they may not have an accurate answer.

Where is your 401k invested?

Well, I'm not sure how much is in it.

I think it's X amount.

One of the things that we do, and it's really one of our first few steps, is we put together a balance sheet for our clients.

So this will include their debts, it'll include their assets, and it'll include a statement of net worth.

So we can just at least start with the baseline.

Let's know where you are now.

If you're hundreds and hundreds of thousands of dollars in debt, maybe that's not the greatest thing in the world, but we need to at least know that before we get started.

If your net worth is well in the positive, let's know that as well.

So we make every attempt to learn as much as we can about clients.

We learn about where their assets are, we learn about where their income is.

Now, a lot of business owners, they don't have clean books and they may have some issues with actually having accurate financial statements.

And that's something that we can help them to fix in with the help of their bookkeeper or accountant.

Because the numbers really do matter.

We need to know where we are, numbers wise.

And that's one of the first things that we do, is we help people to know where they are.

Sometimes the truth is depressing.

Sometimes I've had people say, wow, I didn't realize we had that high of a net worth.

But we need to know the truth.

And that's a big part of getting started.

One of my favorite authors who helps financial advisors to be great at their job is Nick Murray.

And Nick Murray says that the primary job of the financial advisor is to be a behavior modifier.

So what does that mean?

It means that we actually encourage and hold our clients accountable to do the things that we both agreed were essential for them to do in order for them to reach their goals.

What if we have a client and what if we decided, you know what, this client has $100,000 in their emergency fund, but they have $30,000 of credit card debt?

And what if we discuss that it makes a lot of Sense to take $30,000 from that emergency fund and pay off that credit card debt.

This would help them by paying less interest and it would help their credit score and we agree to it.

But what if they just never do it?

What if they get busy, they have family, they have kids, they have jobs and so on.

And so the thought of paying off that debt is not actually as good as actually paying off the debt.

So we have to hold our clients accountable.

Now think about this.

If you are trying to lose a few pounds, a lot of what you need to do maybe isn't rocket science.

You know, you need probably need to eat a little bit less.

You probably certain things that you should be eating and certain things that you shouldn't be eating, and then you need to exercise.

But if you're paying a trainer and that trainer is expecting you to show up at the gym at six in the morning so that they can train you, you're going to be darn sure to show up.

So a big part of what we do is we help our clients to stay accountable and make sure that the things that we agree need to get done actually get done.

Now this might Sound mean.

This might sound crazy, this might sound interesting, but I make my clients cry.

I don't make them cry.

But we talk about things that are bigger than just dollars and cents, just bigger than just rates of return.

So we'll talk about legacy.

We will talk about.

We will talk about the things that are truly important to the world, not just, hey, did my investments beat the S and P, or did I outpace an index fund?

Because ultimately, does that really matter?

Because what we're talking about with financial planning is making our lives better, making the lives of those around us better.

So we have to think about what will we feel like when we meet that goal?

Maybe what will we feel like when we pay off that last debt?

Or what will we feel like when we sell that company for the amount of money that we get, but it took us a lot of hard work to get that get there.

What will we feel like when we write that last tuition check for our children's or grandchildren's college, knowing that we had to make some sacrifices in order to do it?

So I do elicit emotions because I think emotions are really important.

And yeah, that's part of how we modify behavior is we talk about emotions and we talk about things that are almost eternally important.

And you knew I couldn't go a whole episode without talking about the business owner, because I love the business owners, because I am a business owner.

So let's talk about some ways that I can help business owners and some things that I do for business owners.

So first, business owners are people, right?

They have all of the same needs that your individuals have.

They may need life insurance, but to protect them, they may need some investment help.

Of course, they have some tax issues to look at.

And then they just need to know that they're saving the right amounts of money for retirement, and they have their estate planning in order and all of those things.

So we have to look at the financial planning process, and we have to work with traditional financial planning items with the business owners.

Now, in addition to that, I help business owners to increase the value of what their biggest asset is, and that's typically their business.

So many business owners and many individuals stress out about the stock market.

They worry about their portfolio values.

And yes, those are things that can be concerning.

But the business owner's biggest asset typically is their own business.

And the business owner has a lot of control over how much their business is worth.

So a few years ago, I started with working, working with business owners to help them to improve each of the eight drivers of Business value.

So there are eight things that if we get these things right, it could make our business more sellable when we're ready to sell it.

Or we can really just have a, an easier and more profitable life today because a sellable business is a more profitable business.

Now some of the drivers of business value are something that we call the hub and spoke, which is the business owner being involved with almost every area of the business.

So if the business owner is dealing with customers and if the business owner is also responsible for generating revenue and everything else, then that's a decreased business value.

Because when, if I bought that business from the business owner and when the business owner leaves, the odds are a lot of those clients and customers are going to leave as well because they were just dealing with the business owner.

The other thing with the business owner being wrapped up in just about everything is that growth is stunted because the business owner is just one person.

Now another one of the eight drivers of business value is recurring revenue.

So if we can help a business to figure out a way to change their payment structure, change the way that they receive revenue to where it's not just a one time sale and they can receive recurring revenue, then that can make the value of a business much higher.

And it can also give you easier life today because if you know that you're selling a subscription based product or something like that, you could estimate how much money you will have coming in each month to take care of your expenses.

We look at what is the growth potential of the business, how likely are they able to be able to grow?

Are there some other product lines that they might consider getting in and so on and so forth.

And just another one that we look at is their financial performance.

How clean are their books?

Now we don't do bookkeeping, but we can point you in the right direction.

And we also can help you to make decisions, spending decisions, and all of your business decisions based on your financial statement data.

So we can look at your P and L statement, we can look at your income statements and we can help you to know, can I afford to hire this new person?

Can I afford this new piece of equipment?

And so on.

So we do a lot of things for business owners and I always use the analogy with the business owners of the world.

They typically are really good with their trade.

They get into business because they enjoy that trade.

And then as they begin to grow their business, then they spend less and less time on their trade and more and more time struggling with the ownership of the business.

And let's say, being a doctor and physically helping patients and managing a medical practice.

Those are two vastly different skill sets.

The business owners in the world also sometimes need accountability, and they need to make sure that they're setting up their own benefits systems.

If a business owner doesn't set up a 401k or a simple IRA or anything like that, it just simply doesn't exist.

If a business owner doesn't find disability insurance and maybe some other type of insurance benefits for their team, it simply doesn't exist.

And their team.

It's hard to retain talent when you don't have the best benefits.

So I do a lot and we have a great offering to the business owners of the world.

If you're one of them, make sure to email me davidarallelfinancial.com and we can decide if there are any places where you might need help.

But if you are a business owner, here's what I ask that you do.

Go to www.weeklywealthpodcast.com valuebuilderscore so www.weeklywealthpodcast.com ValueBuilderscore spend between 10 and 15 minutes completing the value Builder Questionnaire.

You'll then get a report that gives you how you rate on 8 on each of the 8 value drivers for your business.

It'll tell you where you can improve and it'll also give you an estimate of the value of your business.

Now, this is not a certified appraisal, but it certainly is a great starting point because it'll give you a range of value of what you might expect your business to sell for now.

And then we can also talk about what your business might sell for if you improved it, made it more sellable and if you can get a higher multiple and if you become more profitable, you're getting a higher multiple of a bigger number.

And that that can be a double whammy when it comes time to sell.

We also have some ways to just help you to understand, like from a, from a.

From an intangible aspect.

Are you ready to sell?

What would you do if you didn't own your business?

Where would you spend your time?

Where would you spend your money?

Are you financially ready to sell your business?

Do you have enough money to support yourself for the rest of your life?

Lots of cool things with business owners.

I'd love it if you emailed me davidarallelfinancial.com so that wraps up this episode.

Every once in a while I just like to talk about some of the things that I do.

I am a podcaster, but really I put the weekly wealth podcast out on a weekly basis because I believe that how we handle our money should positively impact our lives and the lives of those around us.

But I'm not selling ads, I'm not generating any revenue directly from the podcast.

But it is, honestly, it's a marketing tool.

It's a way for me to put myself out there.

And I hope that anybody who hears it, that thinks, you know what I think I would like to work with that guy as my financial advisor.

I hope if you're that person, you'll email me davidarallelfinancial.com or go to my website, www.weeklywealthpodcast.com, click on the contact us button and from there you can schedule a 30 minute appointment.

@ that appointment, we'll just talk about the things that are important to you, talk about some of your finances from a 30,000 foot level and we'll just decide if there are any next steps, really is that simple.

And there is no cost for that appointment.

All right, everybody, so that wraps it up.

Tell your friends, tell your family, tell your colleagues, tell your coworkers, and don't forget to check out our social media.

Check out Instagrams, check out YouTube, check out Facebook.

We're putting a lot of content out, we're trying to just get the word out.

And we're trying to help you to make the best financial decisions for you for the reasons that are important to you.

So until next episode, I wish everybody a blessed week.

Thanks, everybody.

Investment advice offered through Parallel Financial and SEC registered investment advice advisor able to conduct advisory business in states where it is registered or exempt or excluded from registration, contents contained herein or for informational purposes only and should not be construed as an offer or solicitation for investment advice or for the purchase or sale of any security, insurance or other investment production.