Another great podcast coming your way! Ross Brannon is a financial planner with a love of real estate! He works for North Florida Financial and understands the needs of High Income Physician and Dentist clients who love real estate!
Listen in to hear Ross and Dr. Bryant discuss topics such as:
- comprehensive financial planning
- real estate investing
- multiple buckets of money in retirement
- permanent life insurance and guaranteed retirement income streams
- investor behavior and importance of automated savings
And Much More!
Forrest Bryant: Three, two, one. Welcome to the Highspeed Podcast. This is your host, Forrest Bryant, and I am excited to have my good friend, Ross Brannon, on the line today. How you doing, Ross?
Ross Brannon: Well well. How are you, sir?
Forrest Bryant: I’m good. I’m good. I’m excited. We’re gonna have a hard time keeping this down to the time limit, because I know we could get on the line and just talk all day. Some people might enjoy that, and some others might get bored. I don’t know, but you and I will have a good time regardless. But appreciate your being on here today for our listeners. Thanks for tuning into the Highspeed Podcast. We’re here to help you on your journey to freedom and legacy. We do that by helping out with your business, finances, family, and lifestyle. We’re gonna talk about all of those things today.
Forrest Bryant: My guest, Ross, works for North Florida Financial. He is a financial planner and an investment guy and has clients all over the US. Ross, thanks for being with us.
Ross Brannon: My pleasure. Glad to be here. I’m a big fan of the High Speed alliance.
Forrest Bryant: Well, thanks, buddy. I know when we get into the securities industry, there’s certain things that we’ve got to do, and one of those is a pretty rigorous disclaimer. I’ll throw that out here for you, and then you can add anything you want to it. But I’m gonna read this verbatim, and then I’ll probably throw my two cents in here, but.
Forrest Bryant: Ross is a financial advisor and registered representative of Park Avenue Securities, LLC. Securities products and services and advisor services offered through Park Avenue Securities, a registered broker dealer and investment advisor. He’s a financial representative with the Guardian Life Insurance Company from New York, New York. Park Avenue Securities is an indirect wholly-owned subsidiary of Guardian. North Florida Financial Corporation is not an affiliate or subsidiary of Park Avenue Securities or Guardian. Park Avenue Securities is a member of FINRA, SIPC. This podcast is for informational purposes only. Forrest Bryant and High Speed Alliance are not affiliated with or endorsed by Park Avenue Securities, Guardian, and opinions stated are their own.
Forrest Bryant: Hopefully that’s going to appease the compliance people, and I’ll also throw in my disclaimer. I think we’ll have that on the front anyway, but. Ross and I are both in the business of helping people with their investments and their money and their lives. What we say is our opinion. Hopefully you’re smart enough that if you’re not a client of ours, you wouldn’t listen to anything you hear on a podcast and go take action on it. We’re not giving any tax information, accounting information, investment advice, anything like that, that it should be actionable to you. Hopefully we’re just giving some education, and you can trust your advisors that are familiar with your situation to make those decisions. How’d I do, Ross? Was that pretty good? Got anything to add to that?
Ross Brannon: Well, that sums up the podcast today, folks.
Forrest Bryant: Thanks for listening. We’ll see you next time. No. What did I miss?
Ross Brannon: Well, I think you covered it all. Unfortunately that’s the nature of our industry and it’s long, but we had to do it and it’s taken care, so I think we’re good.
Forrest Bryant: All right. All right. We’re good, so let’s roll on from there. Ross, why don’t you tell our listeners a little bit about yourself and what you do and your family?
Ross Brannon: Well, my name’s name’s Ross Brannon. I live in Tallahassee, Florida. I’m a financial planner like Forrest said. Married, four kids, ages 11, 8, 6 and 3. Former football player if you’re into sports at all. Played football at Florida State back in the late ’90s. I’m a pretty simple guy. That’s about it.
Forrest Bryant: Well, you and I have known each other for a while. I love Ross. He brings an alternative twist to financial planning. A lot of financial planners are all about selling products and selling different types of investments or insurance. I appreciate Ross because he always puts clients’ interests first. One thing we do with the Highspeed Podcast, obviously, and the High Speed Alliance we look at alternative investments. A lot of those are focused around real estate. Ross has a real estate background and has experience in those. He understands how those can be advantageous to a well-rounded portfolio.
Forrest Bryant: Some of you guys have found that out. You run back to your financial advisor and tell him, “Oh, yeah. I’m gonna get involved in real estate,” and they look at you like you got three eyes. They realize they can’t make any money off of you, and it kind of goes sideways after that. I’ve seen Ross in action, and he always tries to help the clients do the best thing for them and their families, so I appreciate that about you, Ross.
Ross Brannon: Well, thanks, Forrest. You just told a dirty little of our industry, that financial advisors don’t like real estate. Well, many of them don’t understand it, but they don’t get paid on real estate unless it’s a non-traded real estate investment trust, which those generally are not advisable.
Forrest Bryant: Mm-hmm (affirmative). Yeah. Fortunately at this point, I can say what I want to say and I can share my opinions. When I worked for a bigger company and I had to say what they wanted me to say, and I don’t mind saying this out in the public. But I had a nice real estate portfolio, and they weren’t very happy about it. They really discouraged that when, in fact, that company was a huge investor in their general fund in real estate, but they didn’t think it was okay for their agents to do it, but the company did. That didn’t make sense to me, but it does make sense, but it didn’t.
Forrest Bryant: But anyway. Ross, let’s talk on the planning side first. Let’s kind of go how are you different from other planners? I alluded to it a little bit earlier, but how is your philosophy a little bit different as far as comprehensive, holistic planning for the clients that you work with? I know you work with a lot of medical and dental and small business owners, and that’s why I like having you share with our listeners and with our clients. But what makes you different along those lines?
Ross Brannon: I find that most people tend to make their financial decisions in a vacuum or in a silo. They’ll make a decision to do something with a dollar, but they may or may not be aware or take into account the repercussions of that decision. They tend to have a few accounts over here, a few insurance policies over here. There tends to be a lot of financial disorganization and not a lot of coordination. I find a lot of people, they may have one or two or three advisors, but in that sense they just have one or two or three products, and there hasn’t been a lot of coordination.
Ross Brannon: When I work with a client, I use a planning tool, and it helps me to take a wide-angle view. Helps me take a 30,000-foot view and look at the financial decisions that we make as individuals and look at the repercussions they have. I like to use the analogy of throwing a rock in the pond. Instead of focusing on the splash, let’s also take into account the ripple effects.
Ross Brannon: Forrest, you live in Huntsville, Alabama. The view is probably a little bit different driving down Main Street than flying over town in an airplane. I would submit to you that most people make financial decisions like they’re driving down Main Street instead of making a decision like they’re flying over the city. You just get a different perspective when you’re flying over the city of the roads and the traffic. It really helps you to take a bigger picture, macroeconomic, wide-angle view of one’s finances.
Forrest Bryant: Yeah. No. I love it. You and I are speaking the same language, and that’s where I like to sit, too. I like to really look at that high-angle view, that 30,000-foot view where you can look. Everybody, they get lost in that day-to-day, like you said, like driving down the road, they sometimes are in survival mode and they’re just looking at today and tomorrow and today and tomorrow and just trying to survive. They don’t understand things the way that you and I do about looking 10, 20, 30 years down the road and how things are gonna change. Very good. Everybody wants to know about investments, so what does that look like to you as far as helping clients put together a portfolio?
Ross Brannon: Well, investments generally, people view them as the sexy part of financial planning or financial advising. I would submit to you good investing is boring, because Fidelity did a study a couple of years ago. They found that the accounts that had the best performance are the ones the clients forgot about. Many times we react emotionally to things when in the big picture they matter. Generally human nature is to buy high and sell low and repeat until broke. Obviously, Forrest and I are not advocates of that philosophy, and that’s not what we would advise our clients to do.
Ross Brannon: When it comes to investing, there’s a million different opinions. There’s a million different philosophies. I personally feel like when you deal with stock market investing, I feel like it’s overcomplicated a lot with some new fancy style. That’s just my opinion. But when I work with clients, there’s two things that I’m really cognizant of is: one making sure we keep costs low. Because whatever cost we save, it’s added to the client’s bottom line. Number two, let’s have an evidence-based investing strategy. What does the research show where our returns are driven from? I don’t want my gut instinct to tell me I need to buy this and sell this or do this or this. I want to follow a plan that mirrors where the returns have historically come from in regards to the stock market and the bond markets.
Ross Brannon: When we talk with clients, we talk about that. We also talk a lot about the difference between risk and volatility. Many times people consider volatility risk. I would submit that in the ups and downs of the values of a stock portfolio are not the risk. That’s the volatility, and that’s what allows us to get a historical higher rate of return than say on a bond portfolio, which is gonna have less volatility generally speaking.
Forrest Bryant: Now, that’s really great information. You mentioned … I don’t know if you used the term, but you used the phrase but … investor behavior. Explain to our listeners when we’re talking about investor behavior and how that affects returns. What are you referring to there?
Ross Brannon: Well, let me give an extreme example. I know a husband and wife who at the bottom of the market crash in first quarter of 2009, they sold their accounts and they went to cash. They stayed in cash for probably five to seven years after that. In that situation, they let the emotions of the situation dictate a financial decision. At the time, they seemed like they were doing the right thing. But waiting five or seven years to get back in market, not only did they miss getting their money back to square one or 100% when the market got back to the original point, but the astronomical climb from the bottom in March of 2009 to where we are today, they missed out on a substantial majority of that.
Ross Brannon: It’s really important that we put ourselves in a position to win, whether it’s building our allocation that’s gonna give us a volatility and basically ups and downs of value of our account that we can emotionally manage. That’s part of my job and your job, Forrest, is to help our clients manage their emotions through these cycles. Because these cycles, they’re happening all the time. They never stop. There’s studies that have come out that says the average investor under-performs the market by over 4%. Human beings, generally speaking, are not wired emotionally for stock market investing much less cryptocurrency investing.
Forrest Bryant: You had to go there, didn’t you? Just along those same lines in investor behavior, let’s talk about time horizon a little bit. You’re talking about committing to a portfolio. Just talk about two extremes. Say you’ve got somebody who’s 30-years-old, and they have a portfolio that’s built-out for them. They’re looking at 30, 35 years before they start needing to access that money, versus somebody who’s maybe 60 or even 65 that’s really close. Let’s make it a little more real like what if somebody is 60 or 65 today, and they’re looking at the market where it is today. The time horizon is much shorter, so just, in general, we’re not telling anybody to go make any actions on this. But just in general, just differentiate the time horizon.
Ross Brannon: Well, if John Doe has a million dollars and he’s 65-years-old and that’s his only bucket of money, that’s a dramatically different situation than if Joe Doe has $3 millions and he can divvy that up. Now, that’s obvious. Everyone understands that. If John Doe has a million dollars and he needs to live off of that, he’s likely not going to be in 100% stock allocation because that’s gonna have more volatility. Now there are people who would argue he should be in 100% bond portfolio. There are people who would argue he should be in 100% stock portfolio, and they both would make very compelling arguments backed up with lots of data and numbers and make us all say, “Wow.”
Ross Brannon: However, a lot of it’s gonna depend on what’s his tolerance in the volatility, and by volatility I mean the change in account value. Is he gonna be looking at his iPhone every hour at his account balance? Because if that’s the case, then maybe he should consider some sort of vehicle that guarantees income and where he doesn’t have to worry about stock market fluctuations. Or maybe he should consider some alternative investment that maybe he should buy a rental property or something, just get the cashflow off of that. There’s all sorts of ways. But ultimately, in the older person’s example, it depends on how much emotional stress they can handle if that stresses them out.
Ross Brannon: Now as for someone younger, if we’re talking about a stock market portfolio, most people are gonna recommend they be incredibly heavy on the equity allocation, probably generally around 80 to 100%. Some people would say as time goes on maybe you should scale it back. Then some people are gonna recommend that a good old 60/40 portfolio, which has kind of been the standard example for a long time. Some people are gonna argue 100% equity or stock portfolio for the next 30, 35 years. Of course, there’s some people who are gonna say, “You’ll never do anything in the stock market. Go buy a bunch of real estate.” Ultimately, all of those will work in some level. We don’t know what the future holds, so we don’t know what’s gonna outperform.
Forrest Bryant: Yeah, great. Great commentary. A lot of times we like to have lots of options. If you got lots of options, you’ve got a lot of control. I like to look at my clients when they get into retirement and look and see that they’ve got lots of different buckets of money. You mentioned guaranteed income earlier. There’s several different ways where insurance products can fit into that, permanent life insurance, and we could talk on that the entire podcast. Annuities, different types of real estate such as private lending or, like you said, owning a rental property or owning a portion or even a whole apartment complex. Let’s go there just on a high level. We can’t get too deep, but let’s just talk about guaranteed income in retirement as it relates to real estate and insurance products.
Ross Brannon: In the insurance product world, you have annuities. Now annuities kind of have a bad name out there in the marketplace. But the reality is there’s several different types of annuities. But if you’re receiving Social Security, you have an annuity. If you have a pension from a company or a government, you have an annuity. An annuity is merely just a stream of cashflow that’s guaranteed.
Ross Brannon: For example, a fixed annuity is basically very, very similar to a CD, which is a certificate of deposit. Not exactly the same. There are some other moving parts to it, but it’s very, very similar. But from an income annuity standpoint, you have what’s called a traditional annuity that a lot of folks think of. It’s called a single premium immediate annuity. You give the insurance company your money, and you get a check for the rest of your life. That’s a basic annuity people think about. A lot of people don’t like those because you give up your principal. When interest rates are higher, they tend to have higher payouts.
Ross Brannon: There’s a lot of research out there about mortality credits … which we don’t have time to go to in this podcast but … on how really there’s a lot of benefit to a single premium immediate annuity or a deferred income annuity, which is the same thing except you’re just delaying your income because of the power of mortality credits.
Ross Brannon: Then there’s the variable annuity, which has gotten probably the most negative attention in recent years. What that is is that is mutual funds kind of invested with an annuity wrapper. Most of them have some sort of guaranteed income component or guaranteed growth component for income purposes. Then there’s an equity-indexed annuity as well, which has a few more moving parts and, quite frankly, would take me a little longer to lay out the explanation of it. I’ll just save you the boredom.
Ross Brannon: But the reality is is some people annuities are appropriate for, some people they’re not. Everyone’s situation is different. But you said something really important is you said multiple buckets of money. Ideally when you and I work with clients, our goal is for them to have multiple buckets of money. It’s not ideal when we meet with someone and they have $2 million to their name and $1.7 of it is in a qualified plan. By far it’s better than nothing but it’s not ideal, because you’re really limited in what you can do.
Forrest Bryant: Mm-hmm (affirmative). I’m not bashful about saying it, but I am a big fan of permanent life insurance, cash value life insurance, if it’s done properly. It gets a bad rap from a lot of people. There’s a lot of people out there that bash it. They say, “Buy term and invest the difference.” You and I both know the real hidden power there, but just share with our listeners a little bit what your thoughts are on it.
Ross Brannon: Well, I’m a proponent of permanent life insurance. When I speak of permanent life insurance, I’m speaking of whole life insurance from a mutual company. Now there is a couple cash value life insurances out there that sometime are mistaken as whole life insurance. That would like universal Life or variable universal life or equity-indexed universal Life, but we’re speaking of whole life insurance from a mutual company.
Ross Brannon: It has gotten a bad rap. Obviously with life insurance, the primary purpose is death benefit protection. But it’s very important to understand the advantages that cash value accumulation can provide to people when they own permanent life insurance. It can include, like you said earlier, supplemental income during retirement. Probably the most misunderstood things about permanent life insurance or whole life insurance is that having a whole life insurance policy during retirement, it gives clients the opportunity to spin down their retirement assets while knowing the death benefit they have is going to be passed on no matter if they spend all their money during those distributions years. It really allows you to access those moneys more efficiently.
Ross Brannon: In many states, it creditor-proof. I know in Florida it’s creditor-proof. The cash grows on a tax deferred basis. Many times, if you use it properly, the cash will never be taxed. It’s lawsuit-proof in Florida. In many states it is as well, every state’s a little bit different. But what’s funny is someone could file bankruptcy in the State of Florida and they could have a million dollars in cash in their life insurance policy. But they file bankruptcy, and literally the creditors can’t touch the cash in that policy.
Forrest Bryant: Yeah, that’s good. That’s a great point for our listeners that are physicians and dentists that the money that’s in there that creditors or lawsuits can’t touch that. It’s viewed very much like a retirement plan money. They can’t get to it, so that does provide an extra layer of protection.
Forrest Bryant: Ross, we didn’t really get into your real estate background. Why don’t we spend a few minutes and just kind of share a little bit about that?
Ross Brannon: Yeah, so I mentioned earlier that I played football at FSU. I started as a freshman. I was a starter on the 1999 National Title Team. But I had six knee surgeries on my right knee while I was playing. As you can imagine, that ended my career early. As I’m in the training room, rehabbing at the end of my career surgery number six, I end up befriending a guy who was a senior at FSU. His senior year was the year before I got there as a freshman. I was a senior in high school, he was a senior in college. He ended up being drafted in the third round in the 1996 draft and played five years in the NFL.
Ross Brannon: Before you think he was wealthy, just to give you some context, this current year, 2018, the league minimum for a rookie in the NFL it’s $465,000. Most rookies aren’t getting that, but some of them are. The league minimum in 1995 or ’96 was $119,000. He played five years in the NFL. He was a starter as an offensive lineman probably three of those years. He didn’t make a ton of money, but he had a little bit of money.
Ross Brannon: We befriended each other and we started hanging out and talking. He gave me the real estate bug. We went out and we bought a little townhouse near campus and rented it out. Then we really liked that. That was cool. Then we went and bought a duplex. I’m like, “Well, that’s kind of cool.” Then we went and bought a couple more townhouses. Then we ended up buying a 19-unit apartment complex. Then we ended up buying some more houses and some more units. Then after a while, we had 44 units. He did the books. I did the management. I think he got the better end of that deal. I’m managing these rental properties, and these are college student rental properties. Two lessons that I learned right there. Don’t do college student rentals. They tear the properties apart, and there’s an incredibly high turn over. And number two, hire a property management company. I learned those lessons. Then out of pure dumb luck … pure dumb luck … we sold very close to the peak of the market.
Forrest Bryant: Wow.
Ross Brannon: We did really, really well. Now can we run a podcast? This is gonna be all over the world, but can I be brutally honest with you, Forrest?
Forrest Bryant: Sure. That’s what people what to hear. They want to hear the truth.
Ross Brannon: We then rolled all those profits and said, “Hey, let’s go buy some speculative land at coast. Tallahassee’s 30, 40 minutes away from the coast. We’re two hours away from Destin and 30A. Some of you have heard of 30A, Panama City. We go plow all the money into there. Then not long afterwards, the bottom falls out so we gave all of our profits back. We learned the hard way, and so I definitely learned some experiences there.
Forrest Bryant: Well, I’m so glad you told that story because it’s different this time. It’s different this time and I guess I can get on a diatribe here-
Ross Brannon: Never different.
Forrest Bryant: … and go off into a little bit about where we are now versus the difference in there. It is different this time, but there’s a lot of the same things, a lot of the same big picture things. You hit on a couple of things right there that are really critical. You made some really wise investments that you had cashflow. You had appreciation. You learned not to be your own manager. You created a job for yourself. You learned that that asset class and a lot of people invest in student housing and if it’s done properly with proper student management or proper property management, it can be incredibly lucrative and it can be a very good asset class. But you got to know what you’re doing there.
Forrest Bryant: But you exited beautifully and then you went into a very speculative market at the peak, and so I want our listeners to make sure that you caught those things. Just let me tie a little bow on that that maybe we’ve got some guys that exiting some properties. Now it’s a good time to look at portfolio, your rental portfolio or your investment portfolio. If you’ve got some investments that have done really, really well and you’re thinking about exiting those positions, make sure you make smart decisions and understand where we are in the market.
Forrest Bryant: We know where we’re not. We know we’re not in the trough. We know we’re not on the down. We know we’re on the up, but we don’t know where the top is, so just make sure you make good decisions about the future. Be very careful about speculative investments towards the peak, because I see it all the time. I’ve seen it today, so just be careful. But good lesson, good story there.
Ross Brannon: Well, I think most people aren’t really cognizant of the difference between speculation and investment. If I buy a rental property and it’s cash-flowing, that’s an investment. Sure it’s going to appreciate, but I’m getting positive cashflow. If I go buy a vacant lot, especially if I finance it, that’s speculation. In my experience I would not suggest financing vacant land. Do you want to land bank it, pay cash for it? Good for you. You got time on your side because all you’re paying is probably some inexpensive property taxes. But I would not finance speculative real estate. I would just pay cash for it. That’s my opinion. Once again, that’s not an official recommendation. That’s just my opinion.
Forrest Bryant: Good stuff there, and I’m not an expert in land, but I do know that the time to do that … the time to put options and time to control that land … is when things are depressed, not when things are at the top of the market. If you’re out there and you’re planning that space, just be careful. All right, so bringing it back. We got to wrap up the public session here, so, Ross, do you have a favorite quote or a favorite book you want to share with our listeners?
Ross Brannon: There’s two books that I’m really a big fan of. I’ve read them both probably a year or two ago. Gosh. Mindset by Carol Dweck. If you have not read that book, I highly suggest it. And Grit by Angela Duckworth. Both of those books and they really pair well together, and I think they’re both phenomenal books.
Forrest Bryant: Great. What about a quote?
Ross Brannon: Well, I’ve got some friends that we banter back and forth with. One day I just said this from the hip and I liked it so much I put it in my back pocket. I like to tell someone when I’m debating them I’m like, “Never let facts get in the way of a good opinion.” I think all talk show hosts probably live by this as well as all politicians on both sides of the aisle. They all live by this, but so I like to say, “Never let facts get in the way of a good opinion.”
Forrest Bryant: That’s a good one. We can attribute that to you. That’s a Ross Brannon original?
Ross Brannon: Well, I’m claiming it because I never heard it before I said it, but maybe I should go trademark it.
Forrest Bryant: Yeah. Yep, yep, yep. That little intellectual property right there, you can go trademark that. Build-out a website. Well, good stuff, man. Well, if you’ve been listening, thanks. I hope you got a lot of value out of that. Ross really brought a lot of really stuff. We could go so, so deep on all of those topics so we’re just trying to keep it. We went longer than we were supposed to. But just a reminder on the disclaimer there. Don’t go and take any actions based off anything you heard here. Make sure you talk with your advisors that know your situation. If you would like to know more from Ross, Ross, how could our listeners get in touch with you if they want to know some more?
Ross Brannon: Well, the best way to get in touch with me is just a phone call, because my email is too long to spell out on this thing right here, so 850-566-7999, 850-566-7999. If you have a question, give me a call. Working together may not be a fit, and that’s okay. I’m more than happy to answer a question regardless.
Forrest Bryant: Now that’s good, and we’ll put that in the show notes. Thanks, Ross. Don’t go anywhere. We’re gonna over to our Members Only section and we’re gonna go a little bit deeper in a couple of those topics. But if you’ve been listening to the Highspeed Podcast, thanks for listening. Hope you get a lot of value out of that. Thank you, Ross for being here, and we will talk with you soon.
Forrest Bryant: All right. Good job. You feel good about it? I thought it went great.
Ross Brannon: Yeah, I think we stayed compliance-friendly on that.
Forrest Bryant: Yeah, I think we did good. I think we did good. Okay. We went a little long. We went about 41 minutes, but-
Ross Brannon: You and I always go long.
Forrest Bryant: … I was trying to keep it high level, but we still went long, but all right. Let’s roll into the back section. Anything particular you want to hit or not hit back here?
Ross Brannon: Man, it’s your show. You lead the way.
Forrest Bryant: Okay. All right. We’ll figure it out as we go. Okay. Here we go. Three, two, one.