Tax Flow vs Cash Flow with Brad Gotto
“As long as the client understands that it's not about, ridding yourself of taxes, but minimizing them, that's the first real thing that people I believe need to understand.”
Raised in Iowa, Brad moved to Minnesota to attend Bethel University in St. Paul, MN, where he received a degree in Youth Ministries. Brad’s business journey began in 2006 as a financial advisor. Brad finds his motivation in finding a proper outcome for each client and case. He finds it most rewarding when a case comes together and goals are achieved. Brad has been in this industry for 15 years. He started with a big box firm when independent in 2009 been rocking the independent world ever since.
Brad is the owner and Wealth Manager at Fiat Wealth Management. They specialize in the grey areas of Financial Planning. Where most advisors say they can’t or won’t help, they dive in. Focus on the tax side of investing and helping people learn how to spend their money.
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Brett:
I am excited about our next guest. He's out of the Great State of Minnesota. I say that with a little accent there because I got some friends in Minnesota. He and his group, specializing in the gray areas of financial planning, where most advisors say they can't or won't help they dive in. They focus on the tax side of investing and help people learn how to spend their money. The specialties are financial planning, business planning, implementation, Business Development for startup new businesses, and so much more, please welcome to show with me, Brad Gotto. Brad, how are you doing?
Brad:
I'm good, man. How are you?
Brett:
I'm doing so well. Thank you so much for asking our listeners to get to know you for the first time. Would you give us a little bit more about your story and your current focus?
Brad:
My story. How long is this podcast supposed to be? I've been in this industry for 15 years. We started with a big box firm when independent in 2009 been rocking the independent world ever since. Probably three years ago decided that we were going to do not do I guess more focusing on the tax side of financial planning because we were kind of sick of sending our clients off to CPAs to get tax advice and having the CPA go file their taxes and work backwards, but not have a plan to go forwards. As I was taught the big box firm, we always told our clients we can't give tax advice. I was just thought that was funny. Because if I tell a client to put $1 in an IRA, there's a tax impact. If I tell him to put in a Roth IRA, it's the opposite tax impact. We just decided to dive into the tax code and make sure that as we worked with our families that we serve that taxes were an important part of their overall life. Taxes and health care are the two biggest expenses for that kind of bloomer segment of the population that we tend to work with. I guess that's it. I'm married. I got a couple of kids. I got a dog. I don't have the white picket fence.
Brett:
The most important question is, what kind of dog do you have?
Brad:
I have an English Cream Golden Retriever.
Brett:
English cream. That sounds.
Brad:
He's white. His name is Kinnick and if you're a really good sports fan, you'll figure out by that name, I did not grow up in the state of Minnesota.
Brett:
Very cool. I love how you said, most CPAs work backwards. Do you guys like to prepare and move forward and pre-plan? And you're absolute. I couldn't agree with you more. The professional who's helping the high net worth individual. It's more and more about tax flow than it is even about cash flow. I mean, it's always both. It's always been both. But the way things are moving the way we're at here with over $29 trillion of debt and growing, the government is looking for ways to raise taxes, and they're going to give legal loopholes for us to work through these things to incentivize the economy and grow everything else. But we've got to know about it, we got to pre-plan we got to take advantage of before. We're gonna dive into all of those things of tax versus cash. Before we go there, Brad before we geek out on some taxes here with our audience. I want to take one other step back, I believe we've all been given certain gifts in this life. These gifts are given to us to be a blessing and help to others. Some people call them strengths, some people call them superpowers. I'm curious, what are those one or two gifts that you believe you were given? How does it help you help and bless people today?
Brad:
Well, if one of them was humility, you've just screwed that one up, because now you're gonna make me talk about myself. It's not one of them. I am educated. I think that I love educating people, whether it's, we get paid to do it or don't get paid to do it. My actual college degree is in ministry thought I was going to be kind of educated, the rest of my life and in a religious capacity and ended up in this field. that desire to educate people to live their best life, I think is a superpower of mine. Outside of that, I just have I have a motor type A, I got an ego and when you can harness that, and I don't always but I have a wonderful bride that helps me do it. I got a great business partner that helps me do it. You can get to some pretty powerful outcomes for people. Hence our diving into the tax code because, to be honest with you. I, three-four years ago, I know about as much of about a 1040 or tax strategy as average Joe lunch bucket down the street. What we know and what we do now is just built out of necessity as we felt for our clients.
Brett:
We're gonna be in good company here. Let's dive into the number one secret to helping your clients right, think differently about spending money and taxes. What's the number one secret to creating a forward-thinking tax flow money spending plan?
Brad:
I think I get answered that a lot of ways. But I think the most practical way to answer that question is that the only way to get out of the bill is to commit a felony. As long as the client understands that it's not about, ridding yourself of taxes, but minimizing them, that's the first real thing that people I believe need to understand is like, we can try to minimize their impact. But at the end of the day, the law is the law. My job isn't to abate the law, my job is to weave you through the tax code in the most efficient way possible. Sometimes that means that we're purposely bringing taxes into your life now so that we don't have to have them later. Other times, that means we are not only putting legal structures in place for generational type, tax planning, but we're purposely kicking the can down the road. Both of them can make sense. It just depends on what your situation is. Got it.
Brett:
The first secret is making sure you're staying legal. You're not going outside of bounds, but you're using every available tax deferral or minimization or handle perhaps is paying taxes if they're a little bit lower now if it makes sense, and or you have maybe some harvesting to be able to do right. Is that a fair summary so far?
Brad:
Yes, absolutely.
Brett:
Number two, what's the next secret, or step? How are you guys aiding in helping future clients to do this?
Brad:
I think two things one, building out kind of a lifetime tax Performa for them, and not looking at it on a year over your basis. Anytime you get into the micro and you lose a picture of you're looking at the tree and not the forest, you can make decisions that feel really good today from a tax perspective, but are building a big problem for you down the line. That's the first thing, the second thing would just help them understand the impact of their pile of money, or whatever assets it is that they have, and how they're actually taxed. It's blown my mind over the last handful of years as we started to focus on this tax thing, people's lack of understanding of the different types of accounts that they have, how they're taxed, how it's different, and how it actually hits their 1040.
Brett:
Let's dive into the lifetime tax program. I love that I have a commercial real estate background, we're always underwriting looking at pro forma. We do the same thing with our tax strategies for different capital gains taxes, we're looking at the pros and the cons, the ROI. Break down that lifetime tax performance, and then also throw in one of the biggest may be pitfalls people should be a think they should do it. But you're like, actually, if you look at the forest from the trees, we would do it differently.
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