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“Failure is NOT an Option”—Retirement Planning for Real Estate Entrepreneurs with David Rosell

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While some people feel like traditional investments and real estate are like oil and water, others believe both can play an important and complementary role in financial planning and retirement. In this episode, Jeff interviews wealth management expert, author and podcaster David Rosell. David shares a wide range of insights and stories about the 8 major risks people face in retirement, different ways to overcome them, how retirement is like climbing a mountain, and much more.

David Rosell’s inspiration and zest for life have been shaped by a lifetime of international travel with a current tally of more than 70 countries on 6 continents. He’s the author of 2 informative and FUN books: Failure is NOT an Option: Creating Certainty in the Uncertainty of Retirement and Keep Climbing: A Millennial’s Guide to Financial Planning. He’s the host of a popular podcast- Recession Proof Your Retirement and he excels at making complicated financial planning topics easy to understand. Learn more at www.davidrosell.com

Episode Transcript

Jeff Stephens 

When you love real estate, you love real estate. And if you’re out there racking up rentals that’s a big part of your financial planning. But should it be the only part? In today’s episode I’m so excited to share with you an interview with David Rosell, who is a two-time author. He’s a professional wealth manager. He is a podcast host and he is an all-around great guy who is going to share some thoughts with us today about financial planning, retirement and give you a different perspective on how some of those things can fit into your vision for real estate. Let’s cue up the theme song we’re gonna dive right in.

Welcome to Racking Up Rentals, a show about how regular people those of us without huge war chest of capital or insider connections can build lasting wealth acquiring a portfolio of buy and hold real estate. But we don’t just go mainstream looking at what’s on the market and asking banks for loans nor are we posting We Buy Houses signs are just looking for quote “motivated sellers” to make lowball offers to you see, we are people-oriented dealmakers we sit down directly with sellers to work out win-win deals without agents or any other obstacles and buy properties. Nobody else even knows what for sale. I’m Jeff from a Thoughtful Real Estate Entrepreneur. If you’re the kind of real estate investor who wants long term wealth, not get rich quick gimmicks or pictures of yourself holding fat checks on social media. This show is for you. Join me and quietly become the wealthiest person on your block. Now let’s go rack up a rental portfolio.

Thank you for joining me for another episode of Racking Up Rentals. Show Notes for today’s episode, including a full transcript of the interview can be found at thoughtfulre.com/e55. Hey, please do us a quick favor real fast by hitting the subscribe button in your podcast app. It will make sure that you know exactly when the next episodes are coming out. And it also helps send a message back to the platform that people like you and I are enjoying the show. So those platforms tell other people how to find us onward with today’s episode. Today’s episode is a great interview with my friend and my colleague, David Rosell. And in this interview, which I know you’re gonna enjoy a ton we talk a lot about all sorts of things related to financial planning and the eight major risks that people face as they enter retirement different ways to overcome them. Why retirement and thinking about retirement and planning for it is actually a lot like climbing mountains. And I think you’re gonna enjoy this episode in this wide-ranging conversation between David and I. So without further ado, let’s get to our interview with David Rosell.

So most financial advisors, they do a good job of helping people accumulate wealth or get out of debt. But there’s not as many financial advisors who can really do a good job of teaching you what to do once you have reached the top. Because when you’ve reached the top, you have a whole new set of challenges, potentially devastating risks, and things like that as you enter and approach retirement. But my guest today, David Rosell is here to be that person for you. David’s inspiration and his zest for life have been shaped by a lifetime of international travel with a tally of more than 70 countries on six continents. Wow. He’s the author of two informative and I can assure you fun-filled books. The first one he wrote was called Failure is NOT an Option: Creating Certainty in the Uncertainty of Retirement. And the second one is Keep Climbing: A Millennial’s Guide to Financial Planning. He’s the host also of a popular podcast called Recession-Proof Your
Retirement
. And he excels at making complicated financial planning topics easy to understand, which is I think why his books are so great. So David, thank you so much for joining me on Racking Up Rentals.

David Rosell 

Oh, it’s great to be here, Jeff. Thanks for having me on your show.

Jeff Stephens 

Oh, I’m honored. I’ve been looking forward to this for quite a while. So let me just start with this. You know, you and I, we’ve got a lot in common. We both guide our clients to accumulating wealth so that they can live the life that they’ve imagined. I do that using rental real estate. And you do that with traditional investments. Now I know a big focus for you and your team is the planning that you do right, not just the trading and all that but the planning. And you begin your book failures on an option by sharing a really profound story from an experience you had in the Himalayas. Would you mind sharing that with us too?

David Rosell 

Oh, I’d be happy to so we go back to the early 90s. And I always dreamed of visiting Nepal and I landed in Kathmandu. And on the airplane, I met this gentleman who is of similar age, in our young 20s. His name is Ashley Turberfield from Stratford upon Avon, England. And little did I know we both have, we’re flying there to do our own self-guided track called the Annapurna circuit over 21 days. And I tell in the book, you know, the fun the tribulations, the challenges we had, but we ended up doing this 21-day trek together and climbed up over a pass called Thoron La at 19,000 feet. And it was one of the hardest things I’ve ever done, but certainly one of the most rewarding things I’ve ever done from both a physical and a mental standpoint. And years later, I had an opportunity to meet and spend some time with a gentleman named Ed Viesturs. Have you ever heard of Ed? Ed is I will probably go down is the best mountain near to walk the planet Earth, or maybe climb the planet Earth in this case. And Ed has summited Mount Everest seven times, and every time doing so without supplemental oxygen. And then he went on to summit 14, the 14 8000 meter peaks, also without supplemental oxygen. And I remember him sharing his story with me saying, you know, most people think that the goal is to get to the top. And he says, “That’s really not the goal, the goal is to summit. But get back down alive to your friends and family”. He went on to say, you see, David at 80% of the accidents in the deaths happen on the descent, you’re fighting sunlight and fatigue and hunger and just descending is harder on the body than ascending. And so he shared that it’s the second half of the journey that takes most of the amount of planning because it takes on most amount of risk. And that was my aha moment Jeff, because I realized that it’s the same thing for my clients when they’re approaching the financial summit, or let’s call it financial independence. And it’s the last day that they’re adding to their 401K’s and their IRAs, and now they’re going to live on those funds for the next two to three decades. Well, I realized that it’s the second half of their financial journey, that also takes on the most amount of risks and needs the most amount of planning.

Jeff Stephens 

Yeah, what a powerful metaphor, and people can just be so fixated on the ascent. Right? That seems like the exciting part. That seems like the hard part, right? I mean, people downhill are even got like a metaphor for, oh, it’s gonna be easy. But you’ve seen that it’s not going to necessarily be easy. So you know, on the note of that metaphor, I think that probably a lot of people, you know, if you surveyed them would feel like the idea of reading a book about financial planning is going to be dry. But I can I can attest that these books are absolutely not to dry. So how do you manage to make these topics fun and relatable?

David Rosell 

Well, I’m gonna blame it on red wine. What I did is I took a list of some of my more riveting travel stories from traveling around the world, mostly to third world countries over a decade, and kind of found a way to associate them to some key financial lessons for the distribution of wealth. So one of the many examples but one of them in the in failures, not an option is my life’s always been guided by serendipity, unexpected good happenings. And in 1989, November 13, a very big event happened. And I just serendipitously was there for it. It was the falling of the Berlin Wall. In the 1980s, growing up going to school, the number one fear for children was the fear of a nuclear holocaust. And we learned about the Cold War. And we’ll never forget when Ronald Reagan said, Mr. Gorbachev, tear down this wall. And really never in our lifetime, did we ever see the Iron Curtain falling, and certainly the Berlin Wall and I share the details of being in Berlin, which has to be the biggest party that has the world has ever experienced. But really, the impossible became a reality. So after sharing all these really amazing and fun details of being there for that experience, I then say Who would have thought 20 years later, the impossible would become a reality again, when the financial walls came tumbling down and how the large financial firms in every sector either declare bankruptcy or no longer exist, and the type of planning that we do now, since the great recession and that happened.

Jeff Stephens 

So if most people would put a label on what you do by using the word retirement, right, that’s the word that we relate to a lot. But yeah, I’ve heard you say that it’s, it’s not even your favorite word. Can you tell us a little bit about why does that not feel like maybe it’s the most common word but doesn’t feel like the right word for you?

David Rosell 

Yeah, interestingly enough, the word retirement comes from the Latin word ruttere, which means ‘to end’. No one wants to end when they enter their years of financial independence. And the reason why I think it took on this name is our grandparents and great grandparents would, generally speaking work for the same company, their entire careers, they would get a gold watch. And they’d enter their golden years. And three to four years later, they were no longer with us. And social security, or as I like to call it social insecurity was there to help supplement their three to four-year retirement. Today, you know, statistically, 80% of 80-year olds are getting 80% of their income from Social Security. It’s, it’s not a good statistic. So many people, and certainly the people that we work with, are entering chapter three of their life. They’re not ending, they’re just getting started. So we use the term independent of the paycheck or financial independence in our practice.

Jeff Stephens 

Yeah, that makes a lot. A lot more sense. I think in today’s, you know, modern world and our life expectancy what people want out of their life. Yeah, when I think of the word retirement, I think have to be taken out of service, and that when I “retire”, that’s the last thing I want to do I want to be probably taking my service to another and different type of level.

David Rosell 

Yeah, you just mentioned life expectancy, you know, that’s another one of the key risks that we all face. The great news is, we’re living longer and longer. The challenging news is we’re living longer and longer. And what that means is in the second half of the financial journey, it costs a lot more to live.

Jeff Stephens 

So speaking of risks, you know, so much of what you help your clients do is about risk management. And one of the big frameworks in the book is, is one where you share the eight major risks that people face as they’re entering retirement, different ways to help and overcome those things. You know, I remember studying Maslow’s hierarchy of needs, you know, Psych 101, and college? Can you just share with us how you kind of relate what you’re doing to that philosophy help guide your clients?

David Rosell 

Yeah, that’s about as far as I took Psychology was 101, freshman year in college. And we all learned about Maslow’s hierarchy of needs. And a quick review of that is, you know, in the base of his pyramid, he says, we all need food. without food, you can’t think of anything else. And then you go up the hierarchy. And the next thing is once your stomachs full, you could start thinking about a shelter in a home. And once you have taken care of your need for food and nutrition, and then a shelter, you could start thinking about relationships and involvement in the community and you keep going up this hierarchy. And I don’t know if you remember the term if you do everything in order that the top of the pyramid, you become actual actualized exactly self-actualized. So after 2008, when all the world’s largest financial companies were in peril, I decided to borrow Dr. Maslow’s hierarchy of needs to create one’s financial hierarchy of needs, with the goal of getting people financially self-actualize. as they approach her into retirement, and in a nutshell, what we do is we look at all their expenses, the breakdown of what their expected expenses will be in retirement. And we divide those expenses between what are considered necessities food, shelter, clothing, taxes, transportation, health care, insurance, and the once travel, helping grandchildren with their education. A new car, red wine, red wine, thank you. You know me well. And we believe that in the second half For the journey with the eight main risks that we all face that I described in detail in my books, and how to overcome them, that in today’s crazy world, all of our clients have their necessity, expenses, guaranteed for life, we don’t care how they’re guaranteed, but we just think that it’s so important, regardless of whether there’s a trade war with China, or a nuclear war with North Korea, or presidential election, that those core expenses are guaranteed. So quick example would be, let’s say someone had $100,000 of necessity expenses every year. And they had $30,000 coming in from social insecurity. And they had $30,000, if they were lucky enough to have a pension. So that’s $60,000, or 60% of the $100,000, what we’ll do is we’ll take a small portion of their overall portfolio and put it with a triple A rated company that’s been around since the Great Depression, that will guarantee us the remaining $40,000. So between their social security, their pension, and now their own personal pension, we’re able to say to them for the rest of your life, your core expenses are guaranteed. And then everything else to cover their wants are the joy expenses. You know, we highly recommend things like exchange traded funds, which are very inexpensive to own offer a lot of diversification and are also very tax efficient.

Jeff Stephens 

Okay. So, you know, that makes me think a little bit about some, some of the differences maybe in perspective and opinion between sort of real estate people and stock market people, financial planners, and I think a lot of times, you know, one side looks at the other and doesn’t necessarily understand them, you know, maybe it’s a little bit of the jets and the sharks kind of a of a thing. What are your thoughts on that? Are those compatible ideas? Are they different? What do you think about that?

David Rosell 

Yeah, I agree with you. It seems like so many people in the world of real estate are down on the stock market. And all the stock jocks out there investing in securities are down on real estate. And the reality is diversification. diversification, diversification. And real estate is a very important asset class very often, when one asset class is the winner. Another is not doing so well. And vice versa. And, you know, strong believer in owning real estate through real estate investment trusts, internationally, nationally, as well as in my own portfolio having investment real estate.

Jeff Stephens 

So, you know, you mentioned a little bit ago, an election, right, so we’ve just had an election that we think it’s over, you know, who knows for sure, really anymore these days? But you know, that’s, that’s another that’s a different episode. But when things like elections come along, you know, everybody likes to pull their trusty crystal ball out of their back pocket and make some good predictions. And I, I know that you had a whole episode recently of your show, right, that you were kind of talking about what might happen or, you know, different thoughts about what people think might happen with this outcome or that outcome? So what are your thoughts kind of on what we might expect?

David Rosell 

Well, I’d like to start off answering that question by telling you what most people expect, you know, leading up to the election months before, I would hear clients talk, I’d hear it on the streets, things from, whoa, if there’s a blue wave and Biden wins, I’m out of the markets, the markets are going to tank. And then other people say, you know, if the incumbent were to stay in office, we’re going to have this COVID wave and the markets are going to tank. In the answer is, the markets can care less which party has the presidency. Historically, Americans have always wanted checks and balances. They always want one party be running the presidency, and a split Congress. Historically, we’ve gone back and looked, especially with the help of JP Morgan has done extensive research on this. And it shows every combination of what parties in office for the presidency, and whether it’s the opposite party, the same party or split for the Congress. And it was the research shows that it almost doesn’t matter. Interestingly enough, the highest returns have come when you’ve had a democratic president in a split Congress, it’s averaged 16% per year. You know, just earlier today in my office, I heard a client talking about his next-door neighbor who got out of the market all together the day that Biden’s specifically one. And, of course, are, interestingly enough, I should say, the markets continue to hit an all-time high, and the Dow broke 30,000 points today. Wow. So I think it’s best to just take the emotion out of investing, and, and never bet everything on just because someone one party or the other is going to be running the presidency.

Jeff Stephens 

Yeah. I was going to ask you about emotion next. And I think it’s definitely one of these things that real estate and traditional investments have in common is that it’s, it’s easy to let emotion you know, affect how you might make decisions. And from what I’ve seen, you’ve got a lot of good ways of helping your clients, you know, avoid the traps that might come with that. So do you have any tips you could provide for people to make sure that they’re thinking with their head appropriately?

David Rosell 

Yeah, you know, probably the, I love to tell stories, whether it’s travel stories or other stories. And here in beautiful Bend, Oregon, we have buttes, which are rock outcrops formed by volcanoes. And there’s one pretty much in the center of our town called pilot view. And there’s this access road that people walk up or even drive up and visualize a cute boy with his baseball cap on backwards. And he’s walking up this access road. And while he’s walking up, he has a yoyo, in the yoyo represents the stock market or the real estate market, let’s say and the mark, the yoyo falls down and people lose sleep. And then immediately the yoyo retracts and goes up and people are elated. It immediately drops again and people’s stomachs are churning. But we try and teach people to focus not on the yoyo. But the boy carrying the yoyo because they get to the pinnacle of the Butte overlooking our beautiful city of Bend at exactly the same time. But if you focus on the yoyo, you’re gonna have a coronary. And so at the end of the day, what I like to preach is that it’s not timing the markets, it’s time in the markets.

Jeff Stephens 

Gosh, that makes that makes perfect sense and is so well aligned with, you know how we think, here on this podcast in this group of people about having a much longer-term perspective. And of course, there are people and strategies and ways to get involved with real estate as well as the equities markets and stock market and whatnot that are very short term. But that’s a completely different game, right? I mean, it’s just apples and oranges. Is that right?

David Rosell 

Yeah, absolutely. I mean, when we take a historical perspective, we know that there’s never been a down real estate market. There’s never been a down stock market that hasn’t rebound to hit an all-time high. In Failure is NOT an Option: Creating Certainty in the Uncertainty of Retirement, I tell a story about a person that entered my office wanting to work with us. And they were so elated because they got out of the market at the market height. And then the markets the S&P lost over 50%. And they were all excited that they sold out at the height. And by the time I asked him the question, when did you get back in the market in his responses. The market is up almost 200% since the low it’s too expensive to get back in. Now the markets up over 440% since the low and he’s still stuck in cash. So you really have to be lucky twice when you’re timing the markets. You got to be lucky when to sell and he was lucky when to sell. But being lucky twice and knowing when to get back in is very, very challenging.

Jeff Stephens 

Yeah, that does not sound like a game that I want to be involved in myself. So I think it’s safe to say that the year that we are wrapping up now has been Interesting one by any, any measurement, it’s been kind of a one of a kind year. And I think a lot of people would say it’s been a bit of a heavy year, right, we’ve had, clearly, we’ve had a lot of social tensions, we’ve had a contentious election, not to mention a global pandemic, the likes of which, you know, none of us have ever seen. How do you manage to stay positive? Right? Are you are leading your clients you are; you’re guiding them through things that are very important to them, right, then they have concerns and probably fear sometimes? So how do you stay positive and keep the right frame of mind?

David Rosell 

And this might be the most powerful question yet? Well, first of all, a lot of people I come across good people that have worked hard and accomplished much are struggling right now, they’re not able to see their family for the first time over Thanksgiving, probably the same thing is going to happen over Christmas, it’s hard for them to get out of the house. And here in Oregon, all restaurants and bars are shut down. Younger parents have their school their children home, 24/7 as the schools are shut all year. So this is real. And I don’t mean to add light to that to that struggle. And there’s other people I speak to, and they’re like having a great year. And, and they’re experiencing the same challenges. And so what I’ve realized is that the people who are getting through these challenging times, with the best attitude, are grazing on good grass. And what I mean by that, whether they lean to the left and watch MSNBC to one extreme or lean to the right and watch the other extreme of Fox News, or any news coverage in between, the reality is, is that fear sells. And all these broadcasts are really selling fear. And fear is my least favorite word in the English language, f-e-a-r. And so often that stands for false evidence appearing real. So for speaking for myself, I’m just very, very careful what I let inside I want to and I feel in my occupation, I kind of need to know enough to be dangerous of what’s going on in the world. But I’m very careful how I tune in to a podcast that gives me five minutes of news in the morning and five minutes of news in the evening. And then it’s off. If I come home from work and turn on the television, for me, it’s just chewing gum for the mind. And so I need to be very careful with that. There’s another thing that I that I implement in my life. And I share this every time I speak around the country to audiences. And it’s as simple as this little stone that I’m holding right now that I keep in my left front pocket at all times. And I call it my gratitude stone. And you know, life isn’t easy for anyone. Even those of us that say, oh, life’s great. It’s, it’s challenging. And so what I do is, in the morning, when I’m rushing off to my office, or to the airport, I put my wallet in my pocket, my cell phone for good or for bad. And the other pocket, my earpiece, and my car keys. The last thing I put in my pocket is this Black Onyx stone. And I stopped for 30 seconds. And I say to myself, what am I grateful for right now. It could be that kind of busy day at work and people that actually want to speak to me, I get to, I’ve got plans this evening to play with my son who wants to play pool with me. And I’m gonna go downhill skiing this weekend. And I find that when you’re grateful and show your gratitude, it’s what you think about that expands in throughout the day. If ever, I’m having a tense moment, or someone says something on the phone that just agitates me, let’s say, I’ll just reach in and just grab that stone for just a second and somehow has this calming effect on me. And at the end of the day, when I get home, and I take out my wallet and my cell phone in my car keys and put them on my desk. The last thing I grabbed for is this Black Onyx gratitude stone. And I stopped for 30 seconds. So now invested one whole minute into the day with this. And I say, David, what are you grateful for right now. And I just think about the good things that happened to me that day. And I put that stone down. And it just has a way of raising my vibration and keeping it as high as possible.

Jeff Stephens 

Gosh, thank you for sharing that. It’s a beautiful, beautiful sentiment. And yeah, it gives me so many so many thoughts. But you know, as, as you know, and where you and I first met, Strategic Coach, one of the things they tell us is to not be focused on the difference between where we are and where we want to be, but instead to be focused on looking at where we are in relation to where we’ve come. And I think that that that stone and what it represents, and the gratitude and everything is really a powerful way to remind ourselves that on our journey, there are places we want to go. And, and that’s fine. And that’s great. But we’ve got so much to be thankful for exactly where we are, we need to acknowledge how far we’ve come. And that, you know, I’ve got a mentor who often reminds me that the pleasure of being out in the arena of life and investing, whether it’s real estate, or stocks or anything is it’s an honor, and sometimes we you know, it’s still stressful, and we let it let it get stressful or get us down. But this is living, you know, and that there are people who don’t get the opportunity to think about these things, and that it’s a growth opportunity. And there’s so much to be grateful for even in the journey, when it seems difficult.

David Rosell 

You bring up a great point, it got me thinking that you’re a coach and mentor to so many in the world of real estate, a coach and mentor to those in the retirement space. And yet you and I have two amazing coaches, the famous Dan Sullivan, who is just an amazing human being and also Adrian Duffy. And I remember once someone saying you have a coach, what do you mean you a coach, and my response was at the time, Tiger Woods was the best golfer in the world. And I said he has two coaches. And so I just think the power of mentorship and being coached. And we can all learn more. And I just think it’s hard to get through this world without some guidance.

Jeff Stephens 

I absolutely agree. So I know there’s gonna be a lot of people who are going to want to figure out where they can learn more about you and your work and find failures on an option and all that stuff. So where is the best place for people to go to learn more about you and what you do?

David Rosell 

Oh, thanks for asking. You know, there’s two sites: one’s www.davidrosell.com, which talks about the books and the speaking and all that. And then my financial website is www.rosellwealthmanagement.com. And of course, books are available at Barnes and Noble and Amazon.com, as well as local bookstores here in Oregon.

Jeff Stephens 

Fantastic. Well, thank you so much for taking time to share your perspective with us at racking up rentals. I so appreciate it.

David Rosell 

Thanks for having me, Jeff.

Jeff Stephens 

Well, I hope you enjoyed that interview. As much as I enjoyed conducting it. David is not only a wealth of knowledge, but he’s just a great teacher. And he has got such a nice, easy, understandable way of conveying and explaining important concepts so that we can really wrap our heads around them. I am so grateful that you chose to join us for another episode of racking up rentals. Again, Show Notes for this episode, including a full transcript of the interview are at thoughtfulre.com/e55. Please do us a big favor by hitting the subscribe button in your podcast app. And please just take a second to rate and review the show it’d be so appreciated.

Did you know we also have a Facebook group for thoughtful real estate entrepreneurs as well? It’s called the Rental Portfolio Wealth Builders. And we would love to have you join us over there. Just go to group.thoughtfulre.com and it will redirect you right to the page where you can hit the Join button. If you liked this episode, please take a screenshot of it. Post that screenshot to Instagram and tag us @thoughtfulrealesate. I will see you in the next episode. And until then this is Jeff from a Thoughtful Real Estate Entrepreneur. Thanks for listening to Racking Up Rentals where we build long term wealth by being a win-win deal makers. Remember solved person to unlock the deal and solve the financing to unlock the profits.

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