How to Create an Effective Team for Your Wealth Building

James Schramko and Charley Valher use professionals in their wealth-building efforts. In this episode they share the benefits, who you’d want on your team, and how to hire the best pros to inform your financial strategy.

Podcast: Download (Duration: 46:43 — 46.5MB)

Disclaimer: Neither Charley nor James are offering financial advice. This is a discussion and opinion only. Please consult a professional financial advisor for your own situation.

Editing note: Charley’s site is now Business & Investing

James Schramko and Charley Valher agree: when it comes to wealth-building, it pays to hire professionals.

In this episode, the two entrepreneurs discuss the important advantages of engaging financial pros.

They list the roles you’ll want on your wealth-building team.

And you’ll get tips for picking qualified, capable people to help you build wealth.

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Table of contents

1. Why hire a wealth-building team?

The things they know that you don’t

The payoffs in numbers

The protection you get

2. Who do you want on your team?

3. How to pick your financial professionals

Who else do they work for?

4. Are your team talking to each other?

Why hire a wealth-building team?

Neither James nor Charley profess to be wealth advisors, although they have in previous episodes shared their opinions and practices around the topic.

In this guesting of Charley’s, they list the roles of people who are qualified to help you in your wealth-building journey. The people you’ll generally want on your team are:

– Bookkeeper
– Accountant
– Financial planner
– Finance broker
– Buyer’s agent
– Business broker

Before going into who they are and what they do, however, our two entrepreneurs discuss why you would need professional help in the first place.

Download The 6 People You Typically Want on Your Wealth-Building Team (and the PDF transcription)

The things they know that you don’t

If you’re a business owner, it’s unlikely you’d want to take on a whole new field of financial planning expertise, just to manage your money. A professional investor, on the other hand, is already buying, selling and investing; they have access to data points and years of experience in the field – it just makes sense to get their help in areas where you’re not as strong.

Charley once thought he knew a thing or two about property. Then he sat down with a buyer’s agent, who explained their process.

Charley was shocked to discover he knew next to nothing about the steps and considerations of buying a property. It brought home to him how valuable it would be to engage someone whose day in, day out was doing just that.

The payoffs in numbers

James had a similar experience with a buyer’s agent, who helped save him a significant amount on three purchases. And because property transactions are big ticket, you could lose quite a lot if you get it wrong.

If you pay an extra $200,000 or $300,000 or $400,000 on a multimillion-dollar property, that could take you a few years of effort to pay back. It’s not a matter of losing a hundred bucks.

The protection you get

Charley has it from his buyer’s agent and mortgage broker that most of the work they do with clients is actually undoing previous mistakes. It’s fixing loans that were set up poorly, or selling properties that will never perform.

Good professional help can prevent such mistakes. And it can save you not just from financial loss, says James, but from reputation damage, or from breaking the law, things much harder to recover from.

One piece of advice James has is, when it comes to wealth creation, watch out for that greed gland. Beware of shady deals that seem too good to be true, because they usually are.

A good buyer’s agent can protect you, too, from your own avarice, working out your limits and factoring things into reality. They can make a purchase for you and save you, for instance, from overpaying in auction for the sake of one-upmanship.

Who do you want on your team?

Lots of people ask Charley, What do you do with your money? To which he answers, I use professionals.

The second question is, naturally, who do you use and what do they do? And what roles do they play?

The first thing Charley would like to highlight is, professionals in the wealth space are all different. It would be unwise to think one mortgage broker is the same as another mortgage broker, that one accountant is the same as another accountant – quality really matters.

With that in mind, you typically want the following people on your team:

Bookkeeper

Number one, a bookkeeper, is critical – they’re the person getting the data and keeping score. As you accumulate wealth, you want someone tracking it in the same way your books are kept monthly in a business.

Accountant

Just as you have an accountant in business, says Charley, you absolutely want one on your wealth team. And your accountant for your wealth may actually be different than for your business, because one is not automatically qualified for the other role.

Financial planner/advisor

This is someone you likely won’t have in your business, but financial planners play a wide role in wealth. They’re particularly helpful in insurance and estate planning, and, speaking to financial products, can potentially manage funds, shares, or other investments.

Finance broker

You’ll often hear of these as mortgage brokers, but because you can get finance in various things – property, shares, home loans, business sale – Charley prefers “finance broker”.

Charley had an experience with his own broker where he got his borrowing power assessed. One bank was willing to lend him only $400,000; another, $2.8 million.

The critical role there of the broker was to understand the financial landscape and which lenders would be better for the client’s situation, and which terms would be more or less favorable.

Buyer’s agent/property buyer

This was something James hadn’t considered previously, and what put him off at first was the fee – a percentage of $10,000 or more on a property purchase.

The property he wanted, however, was going to auction while he was overseas. So he engaged someone to acquire it for him.

The buyer’s agent saved James $180,000 on the property – 10 grand well spent.

Buyer’s agents acquire property, sometimes businesses. They’re worth their weight in gold, says Charley – he himself has used a buyer’s agent about 10 times now, maybe more.

Working with a buyer’s agent impressed James so much with the results-based outcome that he took it back to his work. It was a good lesson to him on charging not for the cost of goods sold, or the hours he worked, but the result he could get for someone.

Business broker

This is particularly for business owners whose wealth creation strategy includes selling their business.

It’s a good idea, years before you’re even ready for the sale, to engage a business broker and ask them critical questions – who the buyers might be, what would make the business sellable, what circumstances would make it attractive to someone…

Though James didn’t actually use a broker when selling his businesses, he did interview business brokers on the podcast about how to buy a business, and how to sell one.

A good broker can tell you for instance what sells well, and help you plan perhaps a two-year lead-up prep that can let you double or triple your asking price.

How to pick your financial professionals

Charley’s first experience with financial professionals wasn’t the best. He’d meet with someone local, and based on the meeting, decide if he wanted their services or not – it didn’t go well.

His aha moment was thinking, why not approach his search the same as he would recruiting an employee for his business? Then he got much better results.

Asking around

The first thing Charley did was speak to people in his network who had done well with professional help: Who do you use? Who helped you the most? I’d love an introduction.

Are they doing well?

Then when he spoke to a professional, Charley would find out: were they doing well? He would never work with someone who was flat out broke, or who had a record of bankruptcy.

Accreditations

Third was making sure the person had their licenses in place, and accreditations in the areas for which they gave advice. Granted, Charley couldn’t be sure how good that education was, but just going through the process of getting it gave some credibility.

The magic question

Importantly, when Charley sat down with a professional, he’d ask what results they’d gotten for someone like him, in his circumstances. He’d ask to know of someone specific, and to speak with them.

The first thing that did was eliminate poor quality advisors. Secondly, he started getting much better communication and an understanding of how the candidate could help him specifically.

Who else do they work for?

All of the people listed above usually work with both business owners and employees or PAYGs. And very importantly, says Charley, when you’re getting your wealth team around you, you wouldn’t want to be the only business owner they work with.

The circumstances and needs of business owners are different from those of employees or people in corporate. So make sure the professionals you hire are working for, and getting results for, business owners like yourself.

Are your team talking to each other?

There’s one more thing Charley would like to throw in.

Once he’d brought his team together, one of the things he did initially (and wrongly, he now realizes) was kept his accountant away from his buyer’s agent. It was not intentional – he just thought, why would they have to talk?

When Charley started having the people on his wealth team work together, and communicate and align on the common goals he was trying to hit, it unlocked something.

James agrees, it’s good when your team can talk to each other. Certainly his accountant and bookkeeper are like a hand-in-glove fit, which gives him confidence.

And of course your finance broker or mortgage lender will want to speak to your accountant for financial records and statements, or to vouch for what you’ve earned and can afford. So it’s a good parting tip.

Now of course, your wealth team may have more or less of the roles James and Charley have outlined. But hopefully the episode has driven home the importance of professional help in your wealth building.

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