Episode 91 | Sean Gillespie | Military Millionaire Podcast

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What's up military millionaires today we have an exciting episode with Sean Gillespie of redeployment wealth. He is a fee only financial planner which means that he has a fiduciary responsibility to actually look out for your best interests, which is why I like fee only planners and we're gonna talk a little bit about whole life insurance, term life Insurance, real estate and cash reserves and what you should do as a young investor.

So this is good there's some good topics in here and it's just refreshing to hear it from a standpoint of somebody who's not getting a commission to either a little bit more, I don't know if honest is the word but transparent perhaps anyways, good episode definitely listened all the way through some solid resources at the end including some free courses for financial independence and stuff. So definitely check it out.

And as always show notes are found at Frommilitarytomillionaire.com/podcast.
Now relax and enjoy the show.



You're listening to the military millionaire podcast, a show about real estate investing for the working class. Stay tuned as we explore ways to help you improve your finances, build wealth through real estate, and become a person that is worth knowing.



Hey, listen up guys and girls, active duty and veterans. I have an important announcement to make. May 29 and 30th, It's going to be the first ever veterans live conference. Now what this is, is it is a military real estate investor conference hosted by military real estate investors spoken at by military real estate investors and attended by military real estate investors. Obviously if you are not military, you are welcome to attend. However, it will be geared towards veterans and service members helping veterans and service members, myself, the military millionaire community, Stuart grazer, the military investor network and Bill Allen of seven figure flipping are all going to be putting this on together and this is going to be an awesome event, May 29 and 30th. Check out below for a link to register and I look forward to seeing you there.


Hey, what's up military millionaires. I'm your host, David Pere. Alex couldn't make it today. But we have Sean Gillespie on the call who is a 20 year Navy veteran. And what I really like about this is he is a fee only financial planner, which we will get into in a little bit, but I think that's but well, you'll understand why that's important here soon, but Sean, welcome to the show.


Thanks, David, appreciate you having me on.


Absolutely. Why don't you give my audience just a little bit of background about yourself and how you went from the Navy to talking about money for living?



So I started getting enthusiastic about money or roundabout 1994, so I've been commissioned for a couple of years by then I escaped from the Naval Academy in 1992. In around 1994, I was starting to get all of my midshipmen and Ensign debts paid off and then I was getting ready to get promoted to lieutenant Junior Grade, and somebody dragged by the neck to a rubber chicken dinner on a Wednesday night. You know, where, you know, the first thing they did was feed us, and then while dessert was being served, they did about a 30 or 45 minute talk on here's, here's what your financial life looks like and you know, kind of like a you know, like the scales falling off my eyes and understandings like, “Oh I don't I don't have to spend my entire life playing defense with my finances”.

I'm actually allowed to attack with this stuff and so you know, I did that through a company, you know that that a lot of us military folks are familiar with for a while, you know, kind of outgrew it after about five or so years, but that was that was really where I learned, you know, the habits, you know, that got me on the path to doing this.

You know, while I was active duty, I was more of an enthusiast than anything else, I really didn't start, you know, really digging in and studying this stuff until after I had retired and, and had gotten licensed up to be a pro in the field and in 2013 you know, operated as a solo for about four and a half years and then July of 2018 partnered up with another retired sailor, join his his firm which which had been a fee only firm from the outset and and that was when I made the shift from from being a hybrid guy, I had done some some, you know brokerage and advisory and life insurance stuff and when I came aboard and joined Paul Allen here redeployment, wealth strategies, that was really his only hard stop was it's a fee only firm, it's gonna stay a fee only firm.

That was really, you know, an easy decision because that was how I was doing most of my work, anyway, at the time and so, you know, leaving those couple of other pieces behind, you know, it was an easy business decision. What I subsequently found out to my delight, was that it was a much easier decision in terms of how much time and energy I no longer had to spend, you know, managing some of the content looks of interest that come along. And I know you want to talk a little bit about that later, and so I won't,, you know, I'll keep most of that powder dry until we come back around to that, you know, in a more, you know, in a longer fashion. But that's, that's the short version is, you know, I was basically getting ready to retire in 2011. I had, you know, as in my last tour, and, and, and the guy who'd been our guy, you know, asked if I'd figured out what I wanted to be when I grew up yet, and I hadn't. And he said, Well, if you come work with me, you might not have to and so he and I worked together for about six or seven months. And then one day he chased me up a tree and said, Hey, Sean, I think you're going to do this better by yourself than you will with me, so go get busy doing that, you know, which was, which was a really nice way of firing me basically. But, but, but I understood pretty quickly that you know, that he had done that with, you know, with my best interest at heart. You know, and so, you know, have, you know, operated as a solo from you know, 2014 until Paul and I partnered up in 2018. And then, you know, one of two managing partners here now, along with Paul.

5:01 - 10:00


Awesome. Well, that is cool. And I'm glad that you didn't get into it just to sell expensive products for huge commissions and not tell people. So could you explain real briefly for the audience what the fee is for only financial planners and what’s the differences between that and I would imagine the overwhelming majority of financial planners?


Well, I don't know if it's a majority. Here's one of the things that is probably not especially well understood, I think it was in 2016 was fees, overtook commissions as the leading source of revenue.


Oh, awesome!


In the financial services industry, in 2016. That's not a that's not a uniformly positive story. You know, we'll talk a little bit as well about, you know, the different kinds of fee only engagements that you can get into with planners. You know, but for starters, you know, the industry just has very, very deep roots and commissions. It started out there in a perfectly honest fashion. I mean, it used to be, you know, I mean, you know, literally 100 or more years ago, this was the only way to get anything done. And, you know, and it required people to do all of these things. And you know, so in order to pay people to do that stuff, you know, commissions was about the only way to figure out how to do it. Roundabout middle of the 20th century or so, and specifically codified in the 1940 Investment Advisers act.

You know, basically congress, you know, recognized and codified that people could do you know what Paul and I do here, you know, with a fee, you know, for a fee paid directly by their clients to them and and the important part of that legislation is that the caveat that came along with that was a specific legal requirement that anybody who charges a fee directly to a client do everything that they do recommend everything that they recommend to be in the best interest of the client. That requirement never existed before, still doesn't exist with commission work. And, and in particular, the life insurance world doesn't exist at all. There's there's no there's no any kind of fiduciary requirement, you know, implied or or specified when it comes to life insurance and so you know, when we military folks in particular you know, there's there are companies out there with with reputations for you know, for pushing expensive insurance products.

You know, that's the thing that we just don't understand is that in the insurance industry, there's no requirement of any sort for that. It doesn't mean that you shouldn't have life insurance. You know, I mean, if if you need life insurance to keep an untimely passing from being financially catastrophic for your family, then you should go get some of that, you know, but you know, the different ways that you can skin that cat you know, in the in the overwhelming majority of cases, you know, a term policy, you know, that gets you that coverage only for the amount of time that you need, it is far and away the most efficient way to do it. And that last piece is the piece that the life insurance industry. You know, some, some agents are very forthcoming about that, and then we'll specifically recommend to you, you know, that more efficient way to get yourself covered? You know, but not all of them do and none of them have that obligation.

You know, when, when I am walking a client through that, when I am shepherding them through this process, you know with, you know, with somebody that we typically refer out to, you know, this is basically part of my job, as a fee only planner is to is to basically be a watchdog on that process. And make sure that, you know that they're only getting the coverage that they need, and they're not paying a nickel more than they need to pay for it.

12:40 - 15:00


Yeah. Which is awesome, because as we were talking before we recorded the I am now going to have term life for half a million dollars for me and my wife, and it's going to cost the exact same amount that my wife, one whole life policy for $50,000 cost my wife, which is I mean that's ridiculous like we're talking 20 times more insurance between the two of us for I mean, I don't plan on, hopefully, knock on wood won't need life insurance past the age of 60. So we're both insured till then. And I get 20 times the insurance for the same amount a month. It's, yeah..


Yeah, typically when when we're, you know, when we're doing a life insurance need analysis with clients, we're looking for two n states out of that policy, you know, so the, the, the first end state that we're looking for is that we want that policy to to provide all the coverage that that they need for the 20 or 30 or so year period that we're looking at. And then we want that policy to expire without them ever using it. The other end states that we're looking for at the end of that 20 or 30 years if we want that client's life insurance needs to be zero. You know, and so and you know, when you hear people talking about, you know, buy term and invest the rest you know, when people when people poo poo that, you know, people who, who take the other side of that conversation, you know where they come from as well, what we find is people don't, people don't invest enough, you know, they don't invest that difference aggressively enough.

They don't invest enough of the difference, you know, to make, you know, to drive that future life insurance need to zero. You know, my question for anybody who takes up the other side of that conversation is why don't your clients invest enough to get to that zero life insurance needed 20 or 30 years from now? And then that's usually where those conversations stop.


Right. Because if you're not recommending, you know, enough, I mean, obviously, yeah, people are fickle, and don't always do what they know is best for them. But, you know, I mean, I wouldn't say that I've done everything right. But I know you know, as I look back and I'm like churning stuff as I'm building my business and bootstrapping, and I look at my crazy expenses and income on all that as I grow and shrink and grow and shrink and you know, whatever. Yep, sometimes I get to the point where I'm like, Oh my goodness, what am I like how much did I actually put away this month? And then I remember like, Oh, I'm looking at all this, but I put 25% of my paycheck in my tsp.

So yeah, regardless, I did that right, you know, yes, at least that's a grand a month or whatever that comes out to that is quite, you know, anyway, so it's just good to have a baseline and people just ended if you set it aside in a way that comes out of your account or whatever you never see it. You don't notice it's gone.


Yeah, I got a dirty little secret for not not too many financial advisors do everything right financially either. I think we're probably you know, if you took a cross section of the financial advisor community, you know, we're probably better than the typical, like, like a doctor in some high stress job who's a two pack a day smoker. But, you know, but none of us have done everything right either. You know, the, you know, the important part of, you know, what we bring to the table in any of these client engagements is not, is not so that we can tell clients, hey, look at everything I've done, right? It's, you know, in a lot and in fact, in a lot of cases, it's specifically to tell clients who walk in, you know, let's say, with a very Catholic mindset, you know, feeling really, really guilty about, you know, something that they thought that they didn't do, right? And they're like, hey, nobody does any of this stuff right? You know, you know, nobody does all of it right all the time. And so, you know, the important part at any, anytime we talk to anybody about this stuff is, hey, let's just take what is and let's make sure that we do it as well as we can from here on out, knowing that that's not going to be perfect either. By the way, I mean, you know, out of all the things that you could do, you know, financially, you know, across, you know, across our lives, I mean nobody's 100% fish efficient with all of that stuff all the time.

15:00 - 20:00


And I don't want anybody to be. I mean, if we wanted to be, you know, efficient and smart around every, you know, every money decision that we ever made, none of us would ever have kids. None of us would ever take a vacation. You know, I mean, you know, the...




The things, the things that you do, you know, were, were, you know, for example, you know, that 25% of your base pay going into tsp, we do those things so that we can goof off when we want. Yeah, you know, I don't specifically do not subscribe to any view of financial planning. That that consigns you know, me or anybody else to a lifetime diet of nothing but broccoli. You know...


I concur. I just had that discussion with a friend of mine. My meals are super healthy, like chicken, broccoli and rice for a week. I stuck to it and I felt great. And then at the end of it, he's like, yeah, that was awesome. I'm like, dude, I'm not doing that again. I'm and I literally I literally went and bought. There's a video of me doing this but I went and bought four meals of not breaded but Chinese meals with rice. And I split each dinner into three portions and portioned out with rice and made 12 meals out of it, for the whole week. He's like, what do you do? And I was like, Look, it's rice. It's chicken and stir fry. Sure their sauce. Sure it's not perfect, but I look forward to this meal. So I'm going to stick with it. Because If I don't look forward to it. Like last week. I'm going to eat junk food because this is not like... Sorry, it's blatant.


Listen to Hugh Jackman sometimes talking about eating nothing but boiled chicken breasts for months, while he was training up for all as Wolverine you know, x men roles. It's just I mean, it's just misery. And so yeah, I mean, you know, we want to, you know, we want to be good stewards of our money but we want Do it to enable us to do the things that we want to do. You know, every one of us is doomed. And tomorrow is not promised to any of us, you know. So I think an important part of this is encouraging people to live now.


Yep, I agree. All right. I have one more insurance question before we get it. I do kind of have another question for you, but I have several, but I'm curious. What are your thoughts on and we don't have to talk on this too much, but I'm just curious what your thoughts are on the infinite banking whole life fit concept that people discuss? Because I hear that all the time and my thought process on it, where I'm at with it is, I have yet to see a video that explains it to me in a way that I understand in less than, like, five minutes.

There has never been anything I've ever seen where the concept can be explained where I understand it simply and efficiently. And to me, that's a bad sign. So by that alone, I'm kind of but I was just curious, you know, for the audience because I know that seems to be a hot topic these days, what are your thoughts as somebody who is not going to, you know, be trying to sell me on it, it might be?


Well, and so I would describe it this way, and I'll try to keep it to one minute or less. When we're talking about infinite banking, essentially, what we're talking about is some kind of cash value life insurance policy. So, like that whole life policy that you just talked about for your bride. And, and in order to make those kinds of things work, we have to fund those policies very, very aggressively.

And so, you know, it might be 100 or $200,000, whole life policy or you know, a universal life policy or something, something that stores cash value, inside the policy. Now, those policies are normally written with the acknowledgement that we're going to die, okay, so when, when you take out a term policy, you're placing a small bet every month that you're going to die before this contract is over. The life insurance company that has the other side of that contract is placing a very large bet that you won't.




Okay? They're right about that often enough, that even though they pay out big when they lose, they still win, because people in you know, people who are called Life Insurance actuaries, you know, if you give them a 10,000 person sample of, you know, whatever, you know, gender, height, weight, you know, family health, background, etc. They'll know to an astonishing degree of accuracy. How many of those 10,000 people are still going to be with us in five years, 10 years, 20 years. And, and, you know, they won't know who, but they'll have a pretty decent idea of how many people out of that group expired from natural causes. How many people were in automobile accidents, etc, etc, etc, and so on.

20:00 - 25:00


Because of that they can price life insurance very, very accurately, over that 10 or 20 or 30 year period. without, you know, however long the policy is that you wrote for that term policy. The term policies do not store any cash value. That's not the purpose term policies are for purely for protection. When we do any kind of permanent life insurance policy, whether it's, you know, indexed universal life or whole life or whatever, we are taking out that policy knowing that we're going to die one day and, you know, that policy is priced accordingly. You know, basically for that policy to be paid up, typically at age 100. Maybe a little sooner, maybe a little bit later.

The people who are advocating the infinite banking concept, are looking at these policies as being something that you can over fund early. And, and so instead of getting this thing paid up, when I'm 100 and get paid up when I say 35. Okay, so I fund that policy very, very aggressively. My monthly premium might be 500 a month, but I'm going to drop 1500 a month in there, so that it's paid up much, much sooner than that. And once it's paid up, I don't have to pay premiums into that policy ever again. And most of these policies are constructed so that you can borrow money from them, either at very low interest rates or maybe even interest free, depending on the carrier and what they'll, you know, what they'll write and what they won't.

So if you can afford to very aggressively overfund these policies, then, once you've done that, it can be super efficient for you. You know, because, you know, this is the banking piece of it. I don't need to get anybody to underwrite a loan. When I go to my life insurance policy for it. That's my money that's inside that policy. So I just asked for the money and I get it, you know, and I get it on much more favorable terms than I probably would in a bank, for example, you know, if it's going to be some kind of unsecured loan, I would anticipate at least a five or six or 7% interest rate on something that doesn't have some kind of collateral up against it.

Here's the problem with that concept, and why I am not a subscriber to it, I'm not an advocate for it, for most of our tribe. Most of us military folks don't have 100 or $200,000 laying around to very aggressively fund these policies, without having some kind of adverse impact on our grocery bill, or being able to make car payments or being able to pay rent, or anything like that. The typical whole life or you know, universal life policy takes a minimum of six years seven years, if you're just paying the base premium, before the cash value in that policy is equal to the premiums that you've paid into that policy.

Okay, so from an investment standpoint, and this is where, you know, this is where some of the folks who pushed these policies acquire a bad name is when they start talking about this being an investment. And you know, and for example, this, this policy will return a guaranteed 1% or 4%, or whatever, and it might give you, you know, some portion of market gains, that's all great. But from a strict math perspective, when we look at one of these policies, if you pay the base premium, it's going to be six or seven years before your rate of return on that policy gets all the way up to zero. And so for the people who are either able or willing, you know, to rearrange their financial lives to, you know, or not, you know, not just rearrange, maybe just arrange, you know, for folks who have the means to set themselves up to do that. And the discipline, that's fine.

For a great many of us, we don't even have the means and and in any event, any way you slice it, there's no way that this is efficient. The most efficient thing that we know, in terms of, you know, having an ability to grow wealth is just investing in the broad economy. You know, and so, and I know, you know, we're going to talk a little bit more about how to stitch real estate into that as well. And, and there's, you know, there's, there's sound arguments, you know, very much in favor of that, you know, but, you know, how we, you know, how we stitch that into a plan matters, as well.

You know, because you have to take extra measures to manage risk when we start Talking about pulling real estate into your portfolio as well. But that's, you know, that's all the long way around, you know, describing, you know, I wouldn't say my gripe with the infinite banking concept, but by no means is that for everybody and by no means should it be for everybody.

25:00 - 30:00


Yeah, my theory from it was always it makes sense or it can make sense if you have a lot of money to put into it very quickly, otherwise, so as just a numbers example, I mentioned the half so I'm getting right now for my wife is like 20 to $25 we're not totally through the process, but the it's, it's looking like it's gonna be around 20 25 bucks for my wife a month for a term life insurance policy for 20 years at $500,000. The $50,000 policy that we've had since 2015, maybe, 2016 maybe, cost me 60 something dollars or three times as much a month for two. Half the coverage. And we have less than $500 in cash in that account. So, right? I didn't, you know, I didn't know what I was doing that was through, I'm gonna go ahead and say it because it's my podcast, and I can say it was through first command, which is the bank that I believe has been alluded to a little bit here.

But we don't need to confirm that. I am quickly pulling all my stuff away from them at the moment. So I did have some stuff with them. I've closed all but one account out and I've got a phone call tomorrow or Monday to liquidate that, so...


Yeah, well, I mean, the important part of that is, that's, that's the same across, you know, across whole life, you know, or any kind of cash value life insurance policies is that's just the way it is, I mean, even for the folks who have the means to get into the infinite banking piece. You know, the, the, the broad market approach is still going to be the most efficient, you know, long term approach, or at least always has been and so this is, this is where the people talk about it. Life Insurance as it's like, well, it has guarantees to protect value and all that is all completely true.
But the efficiency to be gained by just getting directly into the market and you can do that at much lower cost than we could a generation and especially two generations ago. And certainly before mutual funds, you know, became more common, you know, when you had to have the thousand plus dollars to buy one share of Amazon stock. You know, so I mean, you can get into the broad market $25 at a time through Vanguard now. And there's no reason why most people should.


Which is consequently where I'm moving those funds. I'm opening up VTS ax accounts for both my kids.


Big, big fan of Vanguard.




Whoo. We'll be back with the show in just a minute. But I wanted to take a brief second and say that look, you are already obviously investing in yourself by listening to this podcast. But if you can't figure out how to get past all that daunting crap that you just don't know how to sort through and you're trying to get started in real estate investing, and you're just stuck. I mean, it happens to all of us.

It's daunting, you don't know what you don't know, you don't know everything there is to know and you don't know really where to find all the information. So that is why I created the real estate investing for beginners zero to one course, which is solely designed to get you from, “I want to invest in real estate” to “Holy crap, I have a rental and it's cash flowing.”

And this course is not gonna be anything super complicated that you won't be able to understand is just designed to teach you how to build a team, find investments, finance investments, conduct due diligence, close on the investment and then operate it so that you can enter the real estate investing world smoothly. So if that sounds like something that interests you, definitely check out the link below and it's cheap as hell right now.


Alright, so we alluded to it, we'll rush into it.

I was gonna ask what your thoughts are on cash reserves for real estate investing, because I know there was a Facebook post in a group that we're both in not too long ago that basically people saying, hey, so with all this stuff going on in the world with COVID, so this is April 11, so that will keep the date on when we're recording right in this area people will know that basically saying like, should I have cash reserves? Or should I have more cash reserves? Like what are your guys thoughts on having some cash? And I know that that could seem like a no brainer to some, but I would like to hear your thoughts on it. Because I know that it's not an easy topic to answer. tactfully per se online.


Yeah, well, and the short, the short answer and as tactfully as I can put it as is that always should have been a consideration.




And so you know, for most of our time getting into real estate, you know, whether it was an accident or on purpose. You know, there's a lot of folks from our tribe who get into real estate, you know, basically one PCs at a time. You know, buy a house when I get there. And then and then keep it and rent it out when I leave. That is an approach, I will leave it to the real estate pros to describe, how that's not necessarily the best investing approach, you know how you know how we buy a house, when we're going to live in it is different from how we buy a house, when we buy it with an eye toward renting it out.




Yeah. And so that's, that's one of the first things that we we try to caution all of our clients on, you know, when we're making those decisions, and some days, you know, when when we get, you know, we get a couple of layers of that onion peel back, and we realize they just want to live in a better place, it's like, that's fine. You know, then, you know, this is going to be one of those lifestyle choices that we make where we just spend a little bit more money on a place but when we leave, you know, you know, our two or three year look on this property is to sell it.

You know, and that's there for a couple of different reasons, you know, not least is you know, owning a property is not as passive and income as some organizations who have passive income in their names, for example, might want you to believe, you know, owning a property that you rent out his work, you know, either because you were paying a property manager to do that work or because you were doing it and, you know, to draw an analogy between a real estate portfolio and an investment portfolio.

31:36 - 35:00


You know, people ask us if, you know, should I buy stock? And our answer is typically, yes. And, you know, naturally the second question is, well, which one? And the answer is all of them. You know, so you know, the fun that you just talked about that VTS ax mutual fund, you know, there's 3500 and 51 different companies. You know, that that, that fun, owns, you know, shares in, you know, north of 3000 publicly traded companies in the United States. When you own a real estate property, you only own one of those companies. And, you know, the whole point to diversifying a stock portfolio is so that you don't have to worry about whether you bought winners or losers.

You know, the important part of that, is that you, you know, you know, you're going to have some losers in there. And so, you know, you buy enough stuff. I mean, you know, Nick Murray does a lot of writing for us advisors, and the way he describes diversification is if you own enough of any one thing to make a killing, you own enough of it to kill you. Okay, yeah, the way my partner Paul describes it is, if you don't hate at least part of your portfolio, you're not diversified enough.


I like that.


But This is the whole point is when you own shares in 3500 different companies it doesn't matter which one of them are winners and which one are losers? You know, you're just invested in the broad economy. When you own a real estate property, you own one company. And so the minute you don't have renters or the minute you know, the minute I mean, this is like the worst horror story from you know, so Paul, you know, a partner Paul here is also a tax Pro, he's an enrolled agent. And he had some tax clients who found out that the property that they had rented out from a previous PCs had been employed for the last number of months as a meth lab.


Oh yeah, that's a good time.


And so you know that first off…


Like an Arkansas property.


I don't know if it was Arkansas. I don't know how like, like, you know, with you know, if it was within 15 miles of, you know, whatever was going on at the tiger king or whatever. But, you know, most people who are cooking meth full time aren't aren't too worried about keeping the property in great shape. You know, so the property was trashed with a high degree of doubt whether the insurance policy that they had on the property was going to cover them for that kind of activity.

You know, and and, and, you know, don't care whether or not you knew this was going on, this is your property, this is your problem, we're not going to cover that. You know, we're here to cover things like tornadoes and floods, not not activity, that's literally illegal. And so, you know, long story short is, you know, yeah, you gotta have you gotta have a good bit of cash set aside. You know, for any of these properties, I mean, for the properties that you own, David, how much cash Do you keep in reserve per property?

35:00 - 40:00


At this point at least 10 grand, right now I've got my entire TSP, I consider cash reserves because that way I'll never touch my cash reserves unless I absolutely have to. And then I currently have on top of that, while I'm waiting on tax returns and stuff, once all that comes in, I'll have about 50 grand in a savings account too. But I am about to spend half of that on another property, but I'm going to buy that thing by the time I close on that I'll have purchased it, my loan on it will only be about 60% loan to value on it. And I'll have another 10 grand set aside for that one. So...


Yeah. And so when you set aside that 10,000 per property, do you calculate that 10,000 as part of the, you know, what's the property returning? Because that 10,000 in cash is returning nothing for you? Or maybe at a percentage point in a high yield savings account or something like that?


Yeah, it's it's Yeah, maybe a percentage point. So I calculate, you know, honestly, I probably could do that math on that. I generally really just leave it there and just pretend it doesn't exist, because otherwise I'll get the itch to use it for another property.


Well, and so, you know, I will, I will bet the bar tab anytime, anywhere, that the people who are putting on $40,000 seminars about how you can get rich in a hot hurry doing real estate are absolutely not calculating that $10,000 and how little it's earning for you, if they even bother to tell you to put it in reserve in the first place. You know, but if you own individual properties you sure need it, because there are things that will happen that insurance policies will not cover.


And that's the beauty of, I like the fact that I you know, like I said, I have cash sitting on the side for sure, but I also calculate or use my tsp a lot and that's much less guaranteed per se and I don't ever want to take a loan out from my tsp for a property, but that's why i fund I justify funding right now. I think I mentioned I'm at 25%. My tsp, well, an extra I was at like 10, and I started throwing 15% in instead of throwing 15% more into my cash reserves, because I have my cash reserves at a substantial rate. Like if I overfunded the TSP, then I will earn interest on it, I will get tax benefits from it. And ultimately, I hope that I never use my cash reserves anyway, so I'd rather have it somewhere like that, then. No, you know, and then if I need it.

So for example, I lost $30,000 on a flip not too long ago, some of my listeners have probably heard the story enough that they don't need me to retell it, but essentially, the contractor didn't do what I paid him to, and yada, yada, yada. So I lost, essentially 50% on this flip. And at one point, I was sitting there, and I was like, I could finish this, and I could do this, this and this, and I probably would have which was the wrong decision, except that the money I would have had to take was from the TSP and when I did the math, I realized, I'm gonna lose more money long term if I do this, so I sold it, which was the right time But I think if the money just been sitting in reserves, I might have blown it, which might have worked out, you know, but anyway, so I like the fact that I keep a lot of it in the TSP where I'm not willing to touch it, because it keeps me from using my reserves for, quote, justifiable expenses that aren't actually emergencies.


Yeah. Well, and so, you know, by no means, by the way, is this me saying nobody should ever get into real estate, in fact, and there are really important, you know, reasons and again, these, these these reasons are just math, you know, for why, you know, you might very specifically want to have some real estate in your portfolio. You know, when we talk about, you know, how we put a broad investment portfolio together. You know, the technical term that we're talking about is that it's, you know, the real estate market is not correlated to the stock market.

That's just a fancy way of saying that it doesn't always move in the same direction, or it doesn't always move as much in the same direction. You know, if the stock is up a hill You know, real estate might only be up five, you know, 50. But, you know, if the stock is down 30% and real estate is just holding its value, real estate looks really, really smart right about now. And, and it's not that and it's not that that's always going to be the case but we know, as a matter of historical averages that we're going to see a bear market, like the one that we're in the middle of right now, on average about every six or seven years. And so, you know, real estate is a thing that you can put inside your portfolio that can iron out some of that volatility. You know, and, and, you know, ironing out that volatility, you know, smoothing out that ride a little bit. Also, again, this is just more math.

You know, that, that kind of, you know, smoothing out the ride can do better things for your gains in the long term. You know, we know that the stock market even With the volatility, you know, the good and the bad part of the volatility, we know that that's a long term winner. Some people aren't cut out for that volatility.

And so, you know, some of some of how we put this stuff together for folks is just straight math. But some of it is, is, is done with, with a specific understanding that the right half of your brain doesn't always care about the math.

You know, sometimes the right half of your brain is just gonna wake you up at three in the morning for no reason. You know, and when that's the case, then it's time to get back inside your plan and figure out if we need to tweak anything or even make, you know, really significant adjustments.

You know, the important part of it to us, you know, when we look at this stuff is to understand, you know, that we're doing it according to a plan. You know, and, you know, ADP told me this was going to be easy, and I was going to make a shit ton of money is not a plan.

And, you know, and I mean, it might work out that way for you. But But you know, a sound plan is one that takes into account things like a $10,000 cash reserve for every property.
A sound plan is, it is a thing that takes into account, hey, you insure a property differently when you are renting it out to people than you do when you are living in it as the homeowner, you know, all of those things. And so you know, that's kind of how we look at it, you know, so that I mean, you know, job one for a plan is just that you have one job for the plan is that that plan is rooted in reality.

You know, not every renter that you ever have inside a property is going to be cooking meth inside that house, but some of them might. And so you know, a combination of insurance and cash reserves and that sort of thing need to take into account things that you can't control because you not being able to control them is not going to get you off the hook for it.

42:00 - 45:00


No, absolutely I agree. Okay, so normally as we get closer to the end of the show, I asked a question that everybody's heard me ask a million times where if an 1819 year old estate walked up to you ask them for advice. So my question for you is a little bit different if I was 1819, and just joined the military, and we were to sit down, what would be like the first two or three things that you would tell me I should do to get my foundation laid up?


So the first thing would be and so this is this is a nod literally, to the to the, to the name of your show here. You know, so the show's military to millionaire. The book that I'm going to talk about is one called The Millionaire Next Door. And as you know, at the time, it was groundbreaking research but but the the main, you know, the main upshot to the book is, is that the strongest correlator that they found to people becoming millionaires later in life was not that they made a bunch of really smart, aggressive investments or that, or that they made a bunch of dumb investments and drew the inside straight and and struck it rich anyway, the people who are millionaires later in life are the people who get their spending under control.

You know, the short version of it was they found that the people that they surveyed who were millionaires, or much likelier to drive a Ford Taurus than they were to drive a Mercedes. So that's, that's job one. And and, you know, once you get your spending under control, then we can start talking about, you know, going on the attack with your finances. And for the 18 or 19 year old who just joined the military, you know, right out of the gate, make sure that you are contributing at least enough to your tsp every month to maximize that DOD match inside the new Blended Retirement System.

There's a couple of different ways to look at that. You know, whether it's free money, whether it is a guaranteed immediate return on your investment, however you choose to look at it. I don't think that there is a sound argument against, maximizing that match.

Unless you're at a point where that 5% difference, you know, that 5% contribution that you make to maximize that match is the difference between, you know, enough groceries to feed the family or not. And if that is the case, then we need to have a different talk.

You know, we need to go back to that first talk and get your spending under control. Yeah, absolutely. You know, but, but that, you know, that would be the first two things that I would tell any young and right now as you know, first, first get your spending under control, and then you know, right behind that, you know, take advantage of that match. You know, your 20 year career is not guaranteed.

You know, the shortest term argument in favor of maximizing that match to me is, just don't work at a discount. You know, anybody who hires you, who has to match inside their 401k You know, that's a hiring cost.

I do not ever advocate relieving any employer of a hiring cost. You're not going to get a bigger bonus for the end of the year, we already know inside the military, we're not getting any bonuses anyway, you know, you might get a patent ahead from your from your gunny or your Chief Petty Officer, you know, or the Master Sergeant who, you know who supervises you and the rest of your unit. But it's not gonna, it's not gonna redound to any kind of financial benefit for you, you know, so take advantage of every one of those things and then and then put them to work for you in the best manner possible.

45:00 - 50:00


You're not going to get a bigger Christmas card, for it, you know, none of that stuff. You know, they're, your employer will be perfectly happy to just pay you less than what he agreed to pay you.


I agree, Okay, so the next question I usually ask is, what is one resource book course website, whatever that you recommend, and you mentioned Millionaire Next Door. Is there any other book you recommend?


Yeah, so there's a couple. One of them is an old favorite of mine that the agent that I talked about a little bit earlier, Nick Murray, who's been in the financial services industry for 50 years, started his career as a, like fresh out of college. You know, a broker sitting at a desk making 200 cold calls a day trying to get people to buy stock, you know, from someplace in Manhattan.

You know, over the course of his career, he began to understand that you know, that the real value that we human advisors add is in the advice that we provide, in the planning that we do with and for our clients. And, you know, so more and more of what he's written over the years, has oriented toward that.

Most of the books that he has written, he's written for other advisors, he has written one for consumers called “Simple wealth”, “inevitable wealth”. Not least, you know, one of my favorite parts of that book Is that nowhere in his definition of wealth, do you see $1 figures? You know, he basically describes wealth as the ability to to live a life, you know of meaning, you know, worthwhile pursuits.

Even if you know, or especially if you no longer depend on work for income.
There's no dollar figure anywhere in that definition. And so and and you know, so it frees up all of us to figure out what that dollar figure is, but the dollar figure doesn't become the goal of the planning the dollar figure becomes the enabler, the dollar figure becomes the thing that makes the things that we want to do possible.

You know, for some people $500,000 to retire on is an unimaginably princely sum. For some people, I feel bad for these people, but for some people, you know, five million dollars won't even begin to scratch that itch. You know, they have to have the boat that's big enough to land a helicopter on the back of it. Most of us aren't that guy. Yeah. You know. So you know when Suzy Orman, for example, says everybody needs $5 million to retire on. Not everybody needs $5 million to retire on.

You know, certainly we military folks, you know, who have a pension sitting underneath us. That's the functional equivalent of one or $2 million to begin with, you know, just the effect of that, you know, that guaranteed inflation adjusted income.

You know, so, so right out of the gate, you know, I mean, it's not a hard asset, you know, but it's an income stream, a guaranteed income stream, and it takes a big bite out of what would otherwise be a $5 million figure.


Absolutely. All right. Before we wrap this up, where can people get a hold of you?


Oh, before I answer that question, one other one other resource that I've seen very recently. As a matter of participating in a couple of Facebook live sessions with a couple other gents. I think most people here have heard of Doug Nordmann. Many have probably heard of Daniel cop, who was another fee only advisor. And, and the third, or rather the fourth guy so I was the third with the fourth guy in on some of these sessions was a he's still an active duty Air Force pilot named Steven haptic. And Stephen has developed a free online course called FI 101. And, and so, do you have show notes that you do for this? David?

Okay, so I'll get you a link that you can get the FBI one on one, you know, posted in the show notes. Totally free resource. It's like 11 or 12 modules that you know, you step through on your own you know, and it's part of the broader chuza phi community. You know that they've sponsored putting this together and posting the material, all that and said something great, great, great free resource and really good in terms of you know, it's not purely about investment, it's about how to put together your broad financial plan.

50:00 - 53:04


Awesome. Well, I know Daniel and Doug very well, I have yet to meet Stephen in person, but I'll definitely check that out as well. Yeah, after we put it in the show notes.


Yeah. So in terms of where to find me so Paul, and I run redeployment, while strategies here, you know, basically the, the the animating spirit behind the firm was to make sure that you know, the the financial advice in your best interest, not just investment advice, but, you know, an investment plan that fits inside a broader financial plan that serves your life plan. You know, part of our, you know, our touchstone you know, first principles when we stood this outfit up was to make sure that, you know, a staff sergeant and are first class Petty Officer or a Technical Sergeant, you know, basically an e6 in any of our services, you know, would be able to afford this service. And it's a fee only fee only outfit. And so, you know, by definition by legal requirement, everything that we do here is in the best interest of our clients.

The where to find us online is really easy, It's just redeploymentwealth.com. And I would imagine you'll probably have a link for that in the show notes too. So I won't belabor it by spelling it. It's still a long, yeah, it's still a long web domain. We couldn't avoid that because our ws.com was already taken. So redeployment,wealth was so..


Perfect. Well, Sean, I really appreciate you joining me today.


Yeah, likewise, I appreciate having you on and, you know, for those of you who know, inside a couple of these different Facebook forums, just Like Doug, just like Daniel, you know, I spent a decent amount of time inside these forums just just talking about stuff. So, you know, if you've got an odd question here and there, I can usually be found inside those as well.
You know, probably only one question at every hundred that I answer, you know, results in a client coming in the door. That's okay. We actually kind of baked that into, you know how we wanted to be doing business here.


Perfect. Well, I really appreciate it and I know that Doug, Doug, was the first person ever to recommend you to me and any friend of Doug's is absolutely worth talking to, especially about finance, so...


Well. Yeah. Doug's a national treasure. I don't know how much of the nation knows this, but I'm happy to be part of the nation that does...


Yes sir. Awesome. We'll have a great day.


Thanks, David!


Thank you for listening to another episode about my journey from military to millionaire. If you liked it, be sure to visit Frommilitarytomillionaire.com/podcast to subscribe to future podcasts. While you're there, we'd love for you to rate the show. Give us a review on it.

Now get out there and take action.

Sean Gillespie on The Military Millionaire Podcast

Episode: 91

Sean Gillespie

Join David Pere (The Military Millionaire Podcast) with Sean Gillespie (Redeployment Wealth) as they talk about his experience of being a fee-only financial planner. Sean explains the differences between fee-only and commission-based financial planning and how fees have overtaken commissions in generating revenue in the financial industry. Among many topics, they touch on insurance, infinite banking, cash reserves, and diversifying your portfolio. He also goes deep into the volatility of the stock market versus real estate and the importance of considering things that insurance policies don’t cover.

By the end of the episode, you will get your spending under control, prepare for the future, and take some time to enjoy the things you’ve worked hard for. Enjoy the podcast!


About Redeployment Wealth:

Each of us served a career in uniform before moving on to become financial planners. And we each sat in the mandatory transition course wondering how we’d trained for our entire careers to perform dangerous tasks and missions with skill and confidence, only to arrive at the end of our careers and be told we should be afraid of everything coming next. The financial aspects of military retirement, in particular, were delivered through a fire hose in a few hours…except for the parts that weren’t covered at all.

At that point, we each knew what our next mission was, and we each spent the next several years pursuing it separately until meeting in 2017. Not too long after that, we determined we’d be better at it–and our clients would be better served–if we worked together. So now we do.


Advice to an 18-20-year old:

1. Get your spending under control

2. Contribute to your TSP (at least 5% match)

3. Don’t work at a discount!

Recommended resource(s):

Millionaire Next Door: https://amzn.to/3aksOeC

Simple Wealth, Inevitable wealth:  https://amzn.to/2XWomAz

FI101 by Steven Heptic: https://academy.choosefifoundation.org/

You can find Sean Gillespie on…

Website: https://www.redeploymentwealth.com

Facebook: https://www.facebook.com/Redeployment-Wealth-Strategies-208595006502320/

LinkedIn: https://www.linkedin.com/company/redeployment-wealth-strategies/about/

Veterans REI Live: https://veteransrei.com/home

Real Estate Investing Course: https://military-millionaire-academy.teachable.com/p/from-zero-to-one-real-estate-investing-101

Recommended books and tools: https://www.frommilitarytomillionaire.com/kit/

SUBSCRIBE: https://bit.ly/2Q3EvfE

Website: https://www.frommilitarytomillionaire.com/start-here/

Instagram: https://www.instagram.com/frommilitarytomillionaire/

Facebook: https://www.facebook.com/groups/militarymillionaire/

My name is David Pere, I am an active duty Marine, and have realized that service members and the working class use the phrase “I don’t get paid enough” entirely too often. The reality is that most often our financial situation is self-inflicted. After having success with real estate investing, I started From Military to Millionaire to teach personal finance and real estate investing to service members and the working class. As a result, I have helped many of my readers increase their savings gap, and increase their chances of achieving financial freedom! – Click here to SUBSCRIBE: https://bit.ly/2Q3EvfE to the channel for more awesome videos!


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David Pere

David Pere

David is an active duty Marine, who devotes his free time to helping service members, veterans, and their families learn how to build wealth through real estate investing, entrepreneurship, and personal finance!

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