Introducing the "1% Solution"

ABOUT THIS EPISODE

The top 1% get a lot of flak... but you'll love this "1% solution." Plus: Learn the secrets Dan uncovered during his 10 hours within a private bank's inner sanctum. 

Welcome to the don't play retirementroulette, podcast with Dan Sullivan. You were hard for your money and youshouldn't risk losing it and jeopardizing your future. Listen asAmazon, the best selling author and retirement planning, expert DanSullivan, shares his strategies to lower your rest and secure your future. Well, I have joined it today by DanSullivan Dan is an international best selling author of the book. Are youplaying retirement rue and this chapter is called the one percent solution, soI want you to explain a little bit how you open this chapter. You starttalking about the private bank, and can you explain exactly what a private bankis and kind of how it differentiates from normal banks absolutely goodafternoon tephany? How are you I'm?...

Well, I'm now I got you right. So aprivate bank is, I guess, and it's its simplest form is a private bank for rich people oraffluent people, and they generally concentrated in very affluent areassuch as Manhattan, downtown Boston. In this case, the one that I wasinterviewed at was in Naples. Florida. One of the things that's differentabout a private bank is that where you and I or or anyone, can go to a bankand open up an account with any amount for a deposit in a private bank. Backwhen I interviewed there was a minimum of assents on deposit of over tenmillion dollars. Now today, that number is actually much higher. Most aretwenty. Five million of some actually have a fifty million dollar minimum to becomea member of that private bank. Interestingly enough is that many ofthe banks that also take accounts for...

...regular people do have a separatedivision with their private bank division. So in your experiences, you'veinteracted both in the private bank industry and then, of course, with justyour regular experience. What are the main differences that you see betweenhow the top one percent and kind of US regular folks invest our money andmanage it great questions? So in my story, I actually went down out quite a some time ago. So, fifteenyears ago I was recruited by a prominent New England Bank that had aprivate bank office down in Naples. Florida and I went through a very longtwo day interview process. They ended up offering me the job. However, Ididn't take the job, though the fact that I didn't want to live down inNaples, Florida and...

Cathy want to see people to say thatyeah well, I would well Cathy, my wife took my three children took. It was onSt Patrick's Day week to the playground just because they were killing time.While I was doing the interview, they came back with burnt hands because it was so hotdown there on the on the on the Metal Jungle Gym so yeah, so yeah Florida isa Florida is a very nice place, but we decided that we new Englanders at heart.They were going to stay up here. Yeah, maybe a good place to vacation, notlive absolutely well. For some people, Yeah what I learned down there was. Ithink they are the important part. So private banks focus their attention on what's calledtoday. The one per centers and what I found was very alarming and that people who are in the top of the foodchain economically invest differently...

...than most people do in this country,and it's not the ways that you think some people think that they're outthere that for today's example, loading up on bit coin or doing privateplacements in all this crazy stuff. But the answer is just the opposite. Whatthe person and the UPEST will do is that they'll put action with the bulkof their money in the very conservative investments to provide them with incomethat will allow them to achieve their goals and aspirations and retirementand pre retirement, and then they'll take a portion of their money and theywill aggressive. It invest obody more aggressively, but he is a distinctionso, instead of just going out and buying over the counter stocks or veryaggressive et F, for instance, I...

...they'll actually go out and buy somepretty conservative portfolios with that money and what they want do isthey won't go out in by the largest mutual fund companies? What they'll do is they will invite,invest in smaller individually, managed port folios, and what the differencebeing is that when I learned down in Naples, Florida is that in the branch that I was going to workat, there was actually a money manager who managed the stock portfolios forthe clients within that branch and the total investment at. I don't rememberexactly what I was about three hundred million dollars, so they managed thestark portfolios for three hundred million dollars they weren't going outand putting their money into these large hundred billion dollars. One Abillion dollar three hundred billion...

...dollar mutual fund port follies. Youknow when you can invest on on a smaller level like that meaning nothaving a amount of money in a huge portfolio. You have more control overthe portfolio in that, if, in fact, the portfolio becomes overvalued, forexample, the Money Manager Caus then convent some money to catch, but you'renot going to be able to see if someone's, managing three or fourhundred million dollars, which we discussed early in one of the previouspodcast. So the main difference being is that that rich people like you andme, but they do invest differently. The investor Lo will conservatively thanyou think in the remaining money that they do aest tends to be invested onmore of a smaller portfolio rather than putting money into these large beamesmutual fund companies that are out...

...there today. So then, from a retirement standpoint.Maybe what lessons have you learned in your experience of private banking thathave kind of helped you help clients, get their dream, retirement and thinkthink responsibly and think about what's the best option for them? Howhave you been able to help those clients sure so my clients aren't inthe in the super affluent arena, but one body of them have put away enoughmoney that if they allocate their assets correctly, they can live a veryfree retirement. So what that means is that we take a large portion of theirinvestment portfolio and invested in vehicles that will provide them withthe guaranteed income for the rest of their life, so they do not outlivetheir money. The second thing we do is that you don't want to be out of themarket totally. We take a portion, and this all depends on the individual,some people still more aggressive than...

...ut and others, and what we can do is wetake their money and then, but being a a independent fiduciary. I willintroduce them to a individual money manager that can manage theirportfolios on a discretionary basis to assess the risk in the markets enactaccordingly, rather than just putting it into a large portfolios of thesebehemoth virtual fire companies. So it really sounds like something that canbe tailored to each person and what you know their personal goals are really paying attention to what whatthe client wants. Not necessarily what box can they fit into right? Yeah? Well,absolutely, but one of the things at that that Iguide people on say that there's two to these often times that the customerneeds to be educated on some of the...

...alternatives that they did not know asavailable out there and to say someone, someone wants to go out there andinvest all their money in Bidcot. They have that option to do it, but theywouldn't be a clined to buy right. Okay. So what I do, what the what I get to dois really get them to assess their own risk, tolerance andthe way I do it often times, for instance, if they have a a milliondollar portfolio, and I asked them to how much of a loss could you endure andstill sleep at night hung it answers like thirty or forty percent. So thenI'll ask them. I said, Oh so you so your portfolio is down three to fourhundred thousand dollars and you can still be able to sleep at night thatputs it all in in a different perspective. So this Oisin, a questionis yes and no it's individually tailored, but it has to be within theparameters and an investment strategy...

...that allows them to achieve their goalsand aspirations and retirement. Investing it and and Benton or orchecked a hundred percent technology portfolio might work in the short term,but more often than not the long term wouldn't be the answer. Well, you mentioned that you, you know,wanted to educate people and clients being educated, and so I think a greatfirst step is to pick up a copy of your book. It's by Dan Sullivan he's a best,sell international best selling author and the book is called. Are you playingretirement rubet be sure to pick up a copy on Amazon Dan? Thank you so muchfor your time. Thank you very much. Thanks for listening to the don't playretirement roulette, podcast with Amazon, best selling, author DanSullivan, learn more or get a copy of Dan's book, and you reach out to himand Sullivan Retirement Com. That's SULIVAN RETIREMENT COM,...

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