Speaker 1: 0:00

Welcome back to that's Delivered. Today we're talking about something every driver needs to think about how to make your money work for you, Whether you're planning for retirement or just trying to get your finances in order. This episode is packed with value advice. Joining us today is Brigham Ballard from Driven Investments, a company that specializes in helping clients build stronger portfolios and achieve financial freedom. Brigham, welcome to the show. How are you doing? Thank you, Ray, it's good to be here. All right, Excellent. So, Brigham, I'm going to start with understanding investment basics and portfolios. Let's start with some of the common things. I guess Many union drivers are hardworking individuals, but they may not be familiar with how investing works. Can you break it down for us? What is a portfolio and why is it so important to start one?

Speaker 2: 0:52

Yeah for sure. Well, starting off with retirement savings in general, typically, especially for drivers the main thing that you're going to be saving for retirement is your 401k plan, where you'll defer a specific percentage of your salary and it will go into this 401k account and it will be invested. And you may not know what it's invested in, but we'll talk about that and what your options are. But when you're thinking about making sure you've got money for retirement, there's really two big elements that go into determining how much are you going to have in retirement, how much can you live off of, and those two things are one how much you're going to contribute, so the percentage that you contribute and that UPS is going to give you as a match, but also that money, the way that it's invested.

Speaker 2: 1:39

So you might be invested super conservatively where it might not have a whole lot of growth but there's not going to be a lot of fluctuation when the market's down. You might be invested more aggressively where, over a long period of time, you're shooting for a higher rate of return. But in years where the market's down, your account's also going to be down quite a bit. And so your portfolio refers to the way that you're invested. If you're invested more aggressively, more conservatively, what kind of mix you find? And that really is individual to each person, and so that's what we're helping people do is find the right portfolio for them.

Speaker 1: 2:17

Yeah, so I think about you know, sometimes you hear about something really taking off. It's going bullish, it's going up, up, up up. You're like man. I wish I was aggressive right now, but it's probably the worst time to start dumping money into something you want to dump it in. When it's low, man, that gets confusing.

Speaker 2: 2:38

Yeah, there's always that you hear about something you want to jump on the train but worrying about maybe you're too late. The great thing about a 401k is it's something you're contributing to every single time you get paid, and so typically, if you're getting paid biweekly, you're putting money in what's that? 100 or 26 times a year or something like that, right, and so you're kind of buying in all the time. So it's really impossible to try and time the market. If we knew when things were going to be up and when things would be low, obviously we know exactly when to buy and when to sell, but since we don't, we can really smooth things out by okay, every two weeks, I'm going to contribute to these investments.

Speaker 2: 3:22

You want to find a good, solid investment mix that aligns with your long-term goals. Study after study has shown that, in the long run, the people who do best in the market are those who get in good investments for their goals, stick with it for a long time, versus those who fall into the temptation of trying to ride the latest wave Because it might go up. You know things also come down a lot too, and so we try and stick to the fundamentals hey, man, think about that.

Speaker 1: 3:52

I think about that bitcoin. I'm like, wow man, yeah, it's opportunity there, but that's not even that's a commodity, so that's a whole nother topic. So some drivers might have have pensions of 401ks through their union. How does that fit into the bigger picture of investing? You know it's not like they get a company match. That's where I'm in. You know, when you're a non-union, you can participate in a company match, but when you're not part of that, you know you're in a union. How does that fit into the bigger picture of investing? That as to what individual steps they should take in in growing their wealth um, possibly, uh, diversifying ETFs or something, or I'm not sure.

Speaker 2: 4:38

But yeah, that's a great question. And every everyone's 401k plan is a little bit different. So you might talk to your buddy and say, oh, I and everyone's 401k plan is a little bit different. So you might talk to your buddy and say, oh, I've got a 401k plan too, but the rules and the plan aspects could be different. Like you said, if you're a union employee, then you're not going to get that company match.

Speaker 2: 4:57

But am I understanding right? Do the union employees have the pension? Is that right for the most part? Okay, so most of your money might be coming through this pension. Is that right For the most part? Okay, so you, most of your money might be coming through this pension.

Speaker 2: 5:08

And a pension is something where you don't get to choose the investments. It's the company that's investing it for you and they typically have a formula that says, hey, when you retire, we're going to multiply your three highest earning years, multiplied by the number of years you were here, times 1%, or something like that, and they determine an amount that they're promising to pay you in perpetuity every month for the rest of your life once you retire. So if you've got that well, that's a good thing, because that's going to be money that is coming in for you in retirement. But the downside is, like you said, you might not have a 401k match, right? So you might not have quite as much benefit as some other employees when it comes to the 401k. But there are still other advantages of the 401k, even if you don't have a match. So one of those being, you know, you can contribute money to your 401k and it will actually lower your taxable income for this year.

Speaker 2: 6:09

So just for round numbers, let's say someone made a salary of $100,000 and they contributed 10% to their 401k. So that's $10,000 that throughout the course of the year they'd be contributing. Course of the year they'd be contributing. When they go to file their taxes at the end of the year, rather than looking at $100,000 of income, they're going to get to deduct that $10,000. And then they're going to look at that Okay, you've got $90,000 of income this year. Now that $10,000, it will go into the account and ideally it's growing, right, let's say that 10,000 grows to 20,000 by the time you retire. When you start taking money out in retirement, you'll be taxed on it at that point. But if you're struggling with taxes right now, it can be a great way to lower your taxable income this year. So one benefit is, again, lower your taxable income as well, as you can put money aside for retirement that will be there on top of your pension.

Speaker 2: 7:12

And another route that you could go is you could put money into the 401k, but you could do what's called a Roth contribution. The difference between a Roth contribution and a pre-tax contribution, which is what we just talked about, is that you're going to put money in stuff, but you're actually it's not going to lower your taxable income this year. So same scenario say, someone made $100,000, they contributed 10%. They may have put $10,000 in their 401k, but when they go to file their taxes they're still going to recognize $100,000 of income. So they don't get that tax deduction.

Speaker 2: 7:42

But let's say that $10,000 grows to $20,000 in retirement. Same scenario when they start pulling money out. In this case they're not going to have to pay taxes on any of that money, no matter what the tax rates are in the future. That money would be tax-free as long as you're taking it out in a qualified way in retirement. So there's different things that can benefit you as far as saving for retirement, but also taking advantage of some tax opportunities through the 401k. That's there, even if you don't have a company match. So I still think it's a great idea to contribute to the 401k even if you don't get a company match.

Speaker 1: 8:18

Yeah, you explained that really well, those strategies, and it's nice that you know you can and we can listen to this over again if they didn't get it, like myself, and uh, yeah, that's nice. Um, I see the advantages of the roth versus the traditional um, and you explain that very well with uh, using a, a key figure of a hundred hundred um thousand earning potential. So that's's nice. Simply put yeah, great. Before we dive into any other anything here on my desk, what are some of the common pitfalls and how to avoid them? I'm not sure if I sent this over to you, but what are the most common mistakes people make when they first start investing? How can drivers avoid these mistakes for success when they start?

Speaker 2: 9:13

Yeah, great question. I think one of the biggest mistakes that people make is they don't have a plan in place, and for the most part, that's not their fault. Most people they say, okay, even if I wanted to put a plan in place, what does that look like? How do I do that? That's what we're helping drivers do is when we're working with them in a 401k, because time is your biggest friend when it comes to investments. The more time you have in the market, the more your growth can be magnified. And so when you start out, most people just say, oh, you know, I've got some random percentage. Maybe it's 3% or 5%. I know that's going in there. I'll take a look at it later and make sure that that's enough.

Speaker 2: 9:53

Life gets busy. It's easy to put off your retirement investments because it's not the most immediate thing on your mind. There's always different things vying for attention. But then it gets to the point where a lot of people are saying, hey, you know, I want to retire in a year or two and maybe now it's time to start looking at if what I have is enough, and at that point you're kind of left with what you've got. There isn't a whole lot of time to make some changes and so earlier on, when you're getting into it, that's the time to figure out okay, how much should I be contributing? Because the difference between contributing 5% and 8% if you're going to be working for 10, 15, 20 years before retirement, that can make a huge difference in the amount of money that you end up having.

Speaker 2: 10:41

So that's one of the big or the common pitfalls is just not really thinking about it until it's too late. I would say for a lot of people. If they do have a company 401k match I know a lot of the drivers don't One of the big pitfalls is they're not taking full advantage of that. So if you look at your company retirement plan and they're willing to match you up to, if you look at your company retirement plan and they're willing to match you up to, let's say, 4% or 5%, but you're only contributing 3%, well, that's kind of free money that you're leaving off the table. Your employer would be willing to give you more in your 401k, but you're not contributing enough to reach that limit. That's how I see it.

Speaker 1: 11:20

Yeah, so go ahead. How often do you see that one?

Speaker 2: 11:25

I see it pretty often. I was just meeting with some people yesterday where that was the case and sometimes they don't even know that they're not taking advantage of the full match. This person I was meeting with yesterday they were contributing 3% and their company would have matched them up to 6%. So we were talking about hey, you know, if you contribute an extra 3%, then your employer is going to put in an additional 3%. That's essentially an automatic. You can think of it as an automatic 100% rate of return on your money if you're putting in and then they're matching it. So it's more common than you'd think, unfortunately.

Speaker 1: 11:58

Yeah, I like the pension, but you got to live to see it Before it went K match. You can try to get that sooner rather than later, um, based on how you, how you structure it.

Speaker 2: 12:10

Right.

Speaker 1: 12:10

Both of them have their their um, their pros and their cons. Definitely Thanks for helping people with that. Man Um uh. Union workers they work long hours often have a lot of time to not spend. Spend, spend managing their investments. What are some strategies or tools they can use to make investments simpler and more manageable? What would you say to their listeners?

Speaker 2: 12:32

Yeah, that's a great question. I think when people think about managing their investments, sometimes they think they need to be like the people they see in the movies on Wall Street, where they're constantly making trades and this is down, buy this now and sell this here. Making trades and this is down, buy this now and sell this here. In reality, it's not like that when it comes to managing investments. We want to come up with a portfolio that aligns with our long-term goals. So we might talk with someone and say, okay, you're retiring in 15 years, you're okay with a little bit of fluctuation in the market, you can handle that and still sleep at night. So we might say, okay, we want 80% of your investments in stock type investments and 20% in bond type investments. We would go in with them and say, okay, we think out of that 80% that stock, we think 60% of that should be US stocks and 30% of that should be really big companies and maybe 20% should be those smaller companies and then some of the international funds. So we come up with this portfolio that aligns with their goals. But we aren't day trading and making changes constantly. We're keeping that investment mix and holding it for a long period of time.

Speaker 2: 13:49

Now, obviously, you're contributing to your 401k every paycheck and so money's coming in. But you can actually set it up so that it just automatically gets invested in that same investment mix, and then typically you're just making small adjustments over time. As you get closer to retirement, typically you're starting to make things a little bit more conservative. But if you're worried about that and what that looks like, then you can consider working with a financial advisor who can help you manage that over time, and so there are different ways that you can go about it. But I wouldn't be too worried about hey, I didn't make any trades in my 401k over the last month. I'm falling behind. As long as you're in good investments, it doesn't need to be a super active approach to make a lot of money in the long run not like it's a guarantee that you're going to be spot on, but you can point yourself in the right direction.

Speaker 1: 14:48

That's pretty cool. You guys get to help people with that. So when it comes to planning for retirement, let's talk retirement. Some drivers dream that the day they can hang up their keys and enjoy the time. What are the key steps they should take to make sure that they're financially ready for retirement? Um, maximize their benefits or, like you said, just kind of smooth things out and and be you know, uh, steady wins the race slow and steady wins. What would you say for their savings or additional savings?

Speaker 2: 15:32

Yeah, I think it all comes back to having a plan. There are some drivers who are going to want to retire at 55, and some who might want to retire at 65, and some who want to live more extravagant lifestyles, and some who might say, hey, I don't need too much, I just need the basics. And so everyone's retirement situation looks a little bit differently different based on what their goals are and a 401k and a pension. Those aren't even the only things to consider. You've got things like social security and determining hey, when do I take social security? How can I find out how much I can expect from social security? How much can I spend each month? How much can I pull out of my investments per month and feel confident that they're going to last me my entire lifetime, versus running out of money too soon? So there's a lot of different things to consider.

Speaker 2: 16:19

Everyone's picture is a little bit different, and that's why having a plan is so important. So, for example, if someone says, hey, I want to retire at age 62, I've got a pension that's going to make up that's expected to pay me a couple thousand dollars per month, or something like that, here's my social security benefit. Here's how much I've gotten my 401k. That's a lot of different things to try and figure out how they work together. So we work with people to put all that into our software that models it out. Hey, what's this going to look like in the future? And that can give us a really good idea of hey, if you were to stay on the track that you're on and retire in 10 years, here's how much you could expect to live off of per month in retirement without worrying about running out of money.

Speaker 2: 17:06

When we frame it like that, I think it's a lot easier for people to say okay, you know, this is where I'm at.

Speaker 2: 17:18

If I want to make changes, say I want to retire a little bit earlier, or maybe I want to travel a little bit more in retirement. Now I know that I need to contribute a couple percent, a couple percent more, or things like that. That gives them the time to plan for something Again, rather than just hey, I think I want to retire at this age, but I have no idea whether or not that's feasible. So I think without a plan in place, it's really really hard to tell if you're on track or not, or it's really hard to plan for a successful retirement Because, again, a lot of the times people wait until right before they want to retire and then at that point they're just left with what they've got. There hasn't been any time to make changes along the way to get them to where they want to be. Rather, they're kind of just reaping the fruits of what they've sowed, and hopefully it's enough, which we don't want to get to they've sowed and hopefully it's enough, which we don't want to get to.

Speaker 1: 18:07

You think, at a, at a union shop. We all try to think the same because we all get paid the same. A lot of us sometimes work the same hours, have the same routes, so we think maybe our investments, retirement, should be kind of the same about the same time but everybody's different. So once somebody chooses to retire, when they choose to retire, you know, that's uh, that's their, that's their plan. Um, I like how you said that it's uh, that's a little more detailed to the individual. Um, you know, so that's that's great that they got to have a plan. They need to talk to somebody.

Speaker 1: 18:43

Right, some, I like how you got it. You know where it's really easy to talk to you. Uh, right, it's like how you got to. You know where it's really easy to talk to you. I mean, you seem like a guy that's less intimidating and easy to follow. So all they got to do is reach out to Brigham or someone there at Driven Investments or you know, for Nine Union, I think they work mostly with you guys, but for union drivers I think they go with empower. So we can have that direction too yeah, you're for a ups maybe.

Speaker 2: 19:15

I've seen it two different places. So if you're non-union, typically your 401k is going through empower, voya financial, whereas if you're a union employee, it it's typically going through Empower. That goes to what I said earlier. Everyone's retirement plan is a little bit different, but we work with different employees to figure out, okay, in your situation and based on your goals, what are the best things that we can be doing. So, yeah, if you have questions or just want to have a chat, you can always reach out or visit our website at driveninvestmentscom and schedule a call if you think it'd be helpful to have a chat.

Speaker 1: 19:54

Yeah, what's the background with Driven Investments? Tell us a little about the company you work for.

Speaker 2: 20:00

Yeah for sure. So Driven Investments we're in the Salt Lake City, utah region, so that's where I'm at, and Driven Investments were in the Salt Lake City, utah region, so that's where I'm at. And Driven Investments started around five years ago and all of us come from different backgrounds. So before working at Driven Investments, I worked at Northwestern Mutual Insurance Company in their financial planning division, and insurance is a great part of financial planning, but it isn't where I I tend to enjoy or it isn't the way that they did things as far as financial planning didn't align with what I would personally do for myself, and so I didn't like, you know, having helping others do something that I wouldn't do. Essentially, um, some of the other people uh, the firm started their careers at places like Fidelity, if you've heard of them.

Speaker 2: 20:48

They do a lot of 401ks, but typically kind of the history of a 401k, for the most part, in a 401k, when you start it off, they give you a list of about 20 mutual funds or so that you can pick from and they say there know there's a lot of investments out of out there, but we're going to limit you to these 20, 25 mutual funds that you can pick from. But in more recent years, a lot of 401ks have included a benefit. It's called a self-directed brokerage account, where it's still part of your 401k, but it expands your investment options so it allows you to invest in. You invest in different funds that you don't currently see in your default lineup. And a lot of these companies also allow for advisors to be connected to the self-directed brokerage account within their 401k so that they can help manage it for the employee. And so, as this started to become a bigger thing, we decided, hey, this is a way to work with people while they're still while they're still working, while they still have a lot of time, because most people can't get connected to 401k accounts. So most financial advisors they say, hey, you know, I'm going to wait until someone has retired or left their job, because at that point point you can move money out of the 401k into an account they could manage.

Speaker 2: 22:13

And so this is kind of our niche where, hey, we're able to work with several different companies 401ks not just UPS, but we work with a lot of different companies that allow advisors to be connected to their 401k, advisors to be connected to their 401k, and so it's a great way to work with people who still have time to put a plan in place and make sure that they're on the right track, and so that's kind of how we got started and that's a lot of what we do is helping people with their 401ks. But we also help people say they've got old 401ks. They say, hey, I used to work at this company. It's my 401k is still there. I don't really know what to do with it. We talk with them about what's the best thing to do. Do we move it into your current 401k? Do we leave it there? Do we move it into an IRA account? What? We're helping people with all those kinds of things. So we don't just work with 401ks, but that's where we get started with a lot of people.

Speaker 1: 23:06

Is it a family-owned business?

Speaker 2: 23:09

No, so there's three partners Aaron, christian and Cole. They're not family but we're all pretty good friends but all here in the Utah Salt Lake area. When you book a call you might get attached to one of them, or to me, or to Jack or Kyle some of the other guys we got at the firm, but we're all pretty close. So it's a good time, fun place to work.

Speaker 1: 23:32

Yeah, I was looking at the website and it's like it says meet the experts. And all the pictures look like family oriented pictures and everybody looks happy. So it's nice that you get to work in that environment. That energy transpires into how you're helping people with their families. I think that's key man, that's awesome. You know. Smile on the face and putting people in good places, that's good, Thanks. So educating is a big part, so I encourage everyone to reach out to wherever their portfolio is and speak with someone. Hopefully, I can try to reach out to empower, empower and see if I can get someone also to speak on it, but I want to make sure that that you know people can get set up on that as well. I think there'll be just fine to speak with someone just like yourself. So, before we wrap it up, one piece of advice that you like to give drivers anything you want to say to them when it says that you know, hey, take control of your financial future. What would you say, though?

Speaker 2: 24:45

Yeah, I would say reach out and talk to someone, whether it's us or someone else you trust. When you're looking for someone to work with, I'd say the biggest things are you want to be with someone. Just because your friend does their own investments doesn't mean that they are qualified to give you investment advice. Look for someone who's licensed, who has some experience, someone you trust and also someone you enjoy working with. I think that's a big thing. You know, I might not be the best fit for everyone, and that's okay. If they're going to be better served by someone else that they connect with more, that's great. But I would just say reach out and talk to a professional. And the big thing I see is there's so much detail out there Retirement planning can be very complex that sometimes we just don't know what we don't know.

Speaker 2: 25:32

And so talking with someone who has some experience working with people in this, in retirement planning, can open your eyes and just get you on the right track. And so my advice talk to someone, reach out, be proactive about making sure you're on track for retirement. Don't wait until you just get sick of your job one day and you're saying, oh, can I retire today? Right, you know, have a plan in place and work towards that and work with someone where, as your plan changes, they can help you adjust your plan along the way as well.

Speaker 1: 26:02

Nice. How hard is it to get that license.

Speaker 2: 26:05

So, as far as investment licenses go, the biggest one that you'll see people getting is what's called the FINRA Series 65 license. So that's a license that allows you to legally give investment advice to people, and so there are tests that you have to study, or there's a test that you have to take. There's what's called continuing education credits, so every year you have to do a certain number of hours of qualified education and submit that to renew your licenses and to keep them present. One other designation to look out for this isn't a license but a designation is a certified financial planner designation you can receive after getting a qualified degree, passing what's called the CFP exam, which is a really long, big exam that covers a lot of topics, and then having a certain number of years in the industry, and so I'm actually working towards that right now. I just recently passed the CFP exam and I'm working towards getting that certification.

Speaker 2: 27:08

But if you see someone where they're a certified financial planner, that's a good sign that they've at least they've got some education, they've got some experience, and it takes a lot to buckle down and pass that test. So that shows that they know, at least to a certain degree, what they're talking about. So whenever you're talking to someone say, hey, are you licensed to give investment advice? What kind of designations that you have? Because, again, the crazy thing is, a lot of people can call themselves a financial advisor without really any qualifications and so you want to look for yeah, it's pretty crazy, you know you can get. You can go get your life and health insurance license just to be able to sell life insurance and there really isn't a whole lot of regulation around calling yourself a financial advisor, even if you're just selling people whole life insurance.

Speaker 1: 27:55

So come on, there's no police out there checking on this stuff.

Speaker 2: 27:59

Not, really not with that kind of stuff. When it comes to investments and actually managing people's investments for them, there are some, there are laws in place, like you have to be licensed, but pretty much anyone off the street could say, hey, I'm an, I'm an investment advisor, you should go invest in this, um, and that. That may or may not be a good thing. So just just make sure you feel comfortable with the person that you're working with.

Speaker 1: 28:27

I like it. That's why I got you on the show here. Spread the word, I like it, you know. Help people out, especially those truck drivers, man, you know. Sometimes they're looking into getting out of the truck man, and it's it's. It's hard to give up the keys, you know. So this is one way you could do it in a responsible way. So, um, I want to thank you for coming on the show, joining us. I think your advice has been incredibly insightful and I know our listeners will walk away with a lot to think about. And for those who want to learn more, you can contact yourself, check out Driven Investments I see your name on there with the nice picture and Brigham will help you, or anyone else there too, or point you in the right direction. So don't wait. Start making your money work for you today. Thanks for joining us. Tuning in Well until next time. That's Delivered.