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In this episode, Founder of FitBUX, Joseph Reinke, talks about financial planning. Today, Joseph talks about financial planning technology, the three buckets of financial planning, and the importance of focus. How can FitBUX help people with financial planning? Hear about thinking about percentages, self-employed financial planning, and get Joseph's advice to his younger self, all on today's episode of The Healthy, Wealthy & Smart Podcast. Key Takeaways "Money is always relative." "The big takeaway is percentages." "If I focus on one, maybe two things, I'm going to accomplish things much faster." "The more you concentrate on something, the sooner you'll realize it." "This should be complementing your life, not dictating it." "Focus." More about Joseph Reinke Joseph Reinke is a Chartered Financial Analyst (CFA) Charterholder and is the founder of FitBUX. FitBUX has helped more than 11,000 PTs manage $1.6 billion in debt and assets. In addition, FitBUX recently partnered with the APTA to provide APTA members with awesome discounts on their technology. Joseph has appeared on numerous industry podcast, been an author for various industry publications, and has done over 200 student loan workshops at university graduate programs, SIGs, Conclaves, and annual conferences throughout the country. Suggested Keywords Healthy, Wealthy, Smart, Physiotherapy, Finance, Financial Planning, Income, Expenses, Debt, Money, Technology, Retirement, Resources FitBUX Investment Round: https://republic.com/fitbux To learn more, follow Joseph at: Website: https://www.fitbux.com LinkTree: https://linktr.ee/fitbux Instagram: https://www.instagram.com/fitbuxofficial Facebook: https://www.facebook.com/groups/FitBUXOfficialGroup Subscribe to Healthy, Wealthy & Smart: Website: https://podcast.healthywealthysmart.com Apple Podcasts: https://podcasts.apple.com/us/podcast/healthy-wealthy-smart/id532717264 Spotify: https://open.spotify.com/show/6ELmKwE4mSZXBB8TiQvp73 SoundCloud: https://soundcloud.com/healthywealthysmart Stitcher: https://www.stitcher.com/show/healthy-wealthy-smart iHeart Radio: https://www.iheart.com/podcast/263-healthy-wealthy-smart-27628927 Read the Full Transcript Here: 00:03 Hey, Joe, welcome back to the podcast. I'm happy to have you on again. 00:07 Yeah, I'm glad to be here. It's been a long time. It's the very first time. I think there's like a third time, maybe the fourth time. But yeah, it's been quite a journey. So glad to be back. 00:18 I'm happy to have you back. Especially because today we're going to be talking about financial planning. Now, I know a lot of people might be like, oh, gosh, this is so boring. But regardless of whether you own your own business, you're working for someone else, you have to have a good financial planning, because you want to be able to get through the rest of your life and have the security of knowing you're financially sound. Right. 00:46 Exactly, exactly. So we'll make it we'll make it exciting. We'll give you some, some tidbits that you don't hear anywhere else. So 00:54 yes, excellent. Well, let's let's start out with what are a couple of tips for the audience, that you counsel people on when it comes to financial planning? 01:06 Yeah, so a lot of us to help is all about the technology, and we're there to guide them through it. And it's really geared around a lot of stuff that I learned when I was in wealth management. You know, everybody always talks about, oh, the problem in financial planning and financial education, and this and that. And basically, what I look at used to look at is everybody in the financial industry, they just double down on using the same stupid stuff. And then when the technology comes out, they just put some cute interface to it, and it just doesn't work. Okay. And there's, there's two areas that I could, you know, illustrate on that. One is like, on these apps, so like these budgeting apps, I won't name any names, I won't pick on anybody, but there's a lot of big popular apps out there. Or maybe you just use Excel. And a lot of times what they do is they just throw a bunch of stuff in basically an Excel sheet, and they put a user interface around that. And it's like, okay, well, where does all my money go? Like, this doesn't make any sense. So that's the first issue that we've seen in the second one, I used to joke around about this, this is where financial technology that I used to have, like, you know, a 60 year old client would come in with like, a stack of paperwork with like, an inch or two thick and say, Okay, what am I supposed to do? And to me, all FinTech did was take that makes file and put it on the internet. And just make a pretty little graph around it. It's like, okay, this doesn't tell me anything. Like, what if I want to buy a house versus rent? What if I want to pay off my loans versus well forget? How am I supposed to look at these things? Like, am I supposed to decide this? And so those are the two big areas that is like, how do you do this. And so the first big tidbit on financial planning to satisfy that first problem, just one big thrill plus, you got to think of things in almost buckets when you start stretching out your plan. So you have things like your income and your expenses. And I'm not talking about like your debt expenses. I'm literally talking about your day to day expenses, like food and rent and utilities. So that's like, step one is your income and your day to day expenses that is happening today. The second step is to say, Okay, how much is going towards investments and how much is going towards debt? And that's the step two is over the long term. And then step three is, well, what am I doing to protect my financial plan? Those are things like insurances. So life insurance, long term care, insurance, disability insurance, home insurance. And so the way you can think about it is, this is day to day, this is long term. And and this is risk management, because protection. And when you start thinking about it that way, it makes life a lot easier to do it. And then you know, we'll pause there, and then go into also, you know, what happens like, Well, what about projecting? What about managing this over time? What's an easy way to set this up from there, but that's the primary the main component of in terms of just setting up the plan itself, of those three buckets when you start thinking about this stuff? 04:09 Yeah. And so you suggest people kind of sit down and look at all of those things and kind of write them out. So they have they know their income, they know what their expenses are. They know what they have asset wise, debt wise. So when you're talking debt, can you be a little more specific? Are we talking long term debt like loans or short term debt like credit cards, or bony 04:32 any real debt, I mean, credit card. So with credit cards, if you're paying them off monthly, we don't even consider it that we just consider that day to day stuff. But we're talking about where like you have a monthly payment, so car loans, student loans, mortgages, if you do have credit card debt, and you refinance it, for example, into a personal loan, and you're paying that off over time, if you have business debt, whatever it may be, that's the debt that we're that we're talking about in that step two. 04:56 Yeah. Thank you. Thanks for the clarification on that. And then of course, All the insurances and things like that, that we all need, that we all should have moving forward, I would say especially if you're a physical therapist, and especially if you're in private practice, boy, do you need those insurances to be on point? 05:16 Yeah, exactly the biggest, like the most overlooked one is disability insurance. Because it's like, what do you do if you go to say, well, I can't do my profession anymore. It's like your financial plan completely just ruined if you don't have that. And that's the way you can think about insurance is okay, well, I did my step one, I did my step two. Step two happens over time. What happens if I don't have time because of whatever it is. So like, what happens if I become disabled? My financial plan crumbles. What if I'm married, and I pass away or my spouse passes away? Like we have children like our plan crumbles? What happens if I have a car and I don't have the proper car insurance and I get in a car accident? I don't, I can't buy another car. Now my plan crumbles because I gotta get all this auto debt for another car. So that's what you can think about insurance is protecting just in case time doesn't happen? 06:03 Yeah, fair. Okay, so great. Tip number one, just to recap is to break up into three areas, income expenses, assets, debt, and the third protection, or, and that's where all your insurances come in. Okay, what other what other tip do you have when it comes to financial planning? 06:22 This one is one of the most important and this, this makes life so much easier, both when you're setting up a plan. And also when you're actually like monitoring your plan. Oftentimes, somebody will come to me and say something like, you know, I'm paying $1,500 a month on my student loans. Is that a lot of money? And it's like, I don't know, like, Well, what do you mean, you don't know you're an expert? Don't you know if that's a lot? It's like, well, no, what I mean by that is, do you make $300,000? Or do you make $30,000? Because it's all relative to your income. And money is always relative. Another example of that, like investments, somebody can't come to me and says, I made $10,000 on my investment. And it's like, okay, is that good? It's like, I don't know, like, Did you invest? 20,000? I'm like, Yeah, I'll just do that. But if you invested a million and only made 10,000, like, that's horrible. Like, don't quit your day job, like, what are you doing? Right? So it really just depends on percentages. And you can take that knowledge and apply it to your financial plan. So when you're actually setting these things up, especially on step two, where you're saying, where's What am I investments? Or what am I debt, when you look at percentages of where your money is going and allows you to say, hey, like, I want to focus on, you know, paying off my mortgage? Well, if that's not your biggest percentage of where your money is going, and you're not focusing on that, okay, and this is like, it's funny, because people like, how did you come up with that percentage thing? And I'm like, well, one of the ways I did was when I first started working, I put all the percentages there. And I realized how much money was going to taxes. It was like, Holy crap, like, what can I do to reduce that? So I'm the financial dork that I am, I went and read the IRS tax code. But it's like, those percentages that I assume realized, from a financial planning aspect, it makes life easy, not just setting up your plan, but actually following it. Because if you say, Look, I have 20% going towards my student loans, I have 5%, going towards savings for a down payment for a house, I have 4% going towards my 401k. Over time, your income should be going up. So it makes it very easy. You don't have to think about how much of my money should be going where you just keep the percentages the same and increase how much you're doing in those categories. Or if you get a bonus or a tax return, say great, I take the percentage, I put it to those categories. If I want to do more, I'm fine. But I don't need to I can go out and actually enjoy this money if I want to and not feel guilty about it. Cuz I know I'm following my plan. And then once you're following that plan, let's just say you have a good life event happened. Like let's just say you paid off debt, you paid off a student loan, you paid off an auto loan, well, then great, you just look at the percentage and say, Okay, where do I move this now to meet my next goal? Very quick and easy. Or maybe you have a negative life event, like you get a car accident, You wrecked your car, and you need to buy a new one, where it's like, okay, well, I have I was focusing on this. But if I've moved this percentage and this percentage here, I'm good to go. And that's it. And then you can actually go out and simulate that and I'll talk about simulating that in a minute. But that's the key thing. One of the biggest takeaway that you can take from this podcast as percentages, what percentage of my money is going where and then from there, instead of tracking your dollars and cents, every single place that goes track the percentages are my percentage is going to where I said they're going to especially going towards your investments and your debt. Some people really like looking at those percentages on their day to day expenses too. That's fine if you want to go that into it for me, as long as you're following the assets and debt sureselect don't enjoy. That's the way I look at it. Because that second floor of the building assets and debt, that's the financial plan. So that's the key thing. There's that percentages, percentages, percentages. And, you know, I wish I could talk to everybody that's like 40 and 50 and 60 that have been doing like the dollar amount their entire life. And it's like, I just switched to this. It's easier, like, do that. Yeah. So that's the big takeaway is percentages. 10:26 Yeah, I switched over to percentages a couple of years ago, and it's like a no brainer. You know, so like, when, like you said, for example, a tax return comes in. So I had a tax return. I know it was last year, the year before. And I knew exactly where all of that money was going. Because it was in my percentages. Yep. So it just makes life so much easier. And you'll see you'll accumulate wealth in the places that you need to, because that's your plan. 10:53 Yep. And you'll realize, while if I focus on one, maybe two things, I'm going to accomplish things a lot faster. And so that's where the the behavioral side of finance comes in to. And it's a proven fact that more you concentrate on something that the sooner you're able to realize it. And so one of the big mistakes that we see people make, especially on that step two, they're like, Alright, I'm going to save in a Roth, I'm going to save in a 401k, I'm going to save for my child's 529 plan, I also need to save for a house and I want to save or pay off my student loans. And it's like, you're going to do none of those. Like, if you're trying to do all that good luck. Like seeing the percentages and how thin they are, and how long it's gonna take you to accomplish those is a red light to a lot of people, it's like holy cow, like, will instead I just focus on like, paying off my loans, for example. And your my retirement for the time being, you're gonna be able to accomplish a lot more sooner. And then you can get to those other things down the road. So that's another big takeaway is focus, focus, focus, focus. 11:55 Yeah. And it's okay to move those percentages around as your life changes. And as things change in life. It's good. Yeah. Okay, cool. Yep. So now, yeah. What I mean, this all sounds great. And I'm sure a lot of people are wondering like, oh, okay, how am I supposed to keep track of al…
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