Hello, this is Jane Gardner of Finding your Purpose, and today we’re on a mission to create awareness that being self-aware of your personality and your purpose in life, can you make you more intentional in your actions and bring you more success in your business, your relationships and your life. So let’s go. Welcome, everybody, to finding your purpose, and today it’s Spotlight, where we talk to purpose driven entrepreneurs. And on today’s show, we’re talking to Mitchell Kraus of Capital Intelligence Associates, and he’s going to be talking about leveraging your wealth and to create the world you want, which sounds like a wonderful thing.
Welcome, Mitchell. Please introduce yourself.
And I’m Mitchell Kraus of Capital Intelligence Associates.
I’m a wealth manager here in Santa Monica, and I’ve been doing this for twenty seven years now and really love working with people who believe their wealth isn’t just their financial wealth, that they’re trying to leverage that to create a better world and a better family and everything that they’re interested in besides growing rich.
Well well, Mitchell, what I like to do is to ask you how you got to where you are, how you found the purpose that is driving your business and creating your success.
So could you tell us a little history about your company? That would be great. Thanks, Mitchell.
Of course, I graduated in college and found myself in a job life insurance industry, and I learned very quickly that I was good at selling life insurance, but my job was to sell it to a lot of people who didn’t need it. And as a fourth generation in the financial services business, my father and I had a conversation and I went to work at a financial planning firm which really found some great passion for because I was selling life insurance to those who needed it or really I was helping individuals create financial plans and reach those financial plans. And it was very fulfilling. But what I learned is in financial planning, the end all be all is sort of helping people retire towards that retirement. And I learned that a lot of people had other goals and needs besides just building wealth so they could retire some day. That I had clients and friends who not only wanted to take care of their nest egg in their portfolio, but they want to help their family, they want to raise their kids in a socially conscious way, they wanted to help their parents more broadly. They wanted to help various organizations, whether it’s their church or their local non-profit. And their wealth wasn’t, in the financial sense, designed to really leverage for those causes. And then I have other clients who really cared about the world, whether it’s political reasons or environmental reasons. And I’ve learned that through the years that people can leverage the wealth they have their financial wealth to help create maybe it’s social wealth, maybe it’s community wealth, cultural wealth and leverage it. Sometimes I’ve helped friends with build their physical, their health through through their finances and realizing where they could leverage that or even build more time. And it’s really people are so concentrated on their financial wealth and trying to build the biggest portfolio possible, that looking at those issues and using their financial wealth as leverage might not build as much of a financial wealth, but will create a much more meaningful position for them.
So could you tell us a little bit more about socially responsible investing and health investing? I have not heard of health investing for your health, but of course, you know, we live in different countries. So maybe that’s one of the reasons. But certainly the social and socially responsible investing, I know that I have legacies in my will, but is there other opportunities where you work?
Yes, socially responsible, responsible investing, also known as ESG investing, so environmental, social governance investing is something that’s been around for hundreds of years in some ways. And early on, a lot of the Presbyterian’s actually decided that they would not invest in companies that supported the slave trade. The slave trade so goes back that far hundreds of years. And I think in a more modern approach to it, there’s two fold is first asking yourself, you know, if you inherited this company, would you feel good about the business they’re in? Would you want to be in this business when you buy out a business like this? And for some people, that’s very much environmental issues. I wouldn’t want an oil drill next door. To me, it might be more on a religious issue. And I have clients who are very religious who will not invest in companies that support certain certain things that they believe are against their religion.More on a social matter that lots of clients should not invest in for profit prisons and who doesn’t want to invest in GMOs. And it’s not my duty to tell an individual what their purposes and what their values are, but it’s to work with them, to figure out what their values are and make sure that their financial wealth matches those values and invest in companies or invest in types of investments that match those values as far as sort of physical wealth. When I talk about that, that’s more of realizing that a lot of people work so hard to build these other wealth. They don’t take care of their themselves and their own their physical nature, and they get into bad health. They’re worrying about these things and having these conversations and helping clients realize that everything is intertwined, that if you build, you know, millions of dollars, but then have all sorts of health problems and four hundred pounds, you’re not creating the world you want to live in. And so how do you take some of the wealth you’re building? And let’s look at ways that maybe you can afford that physical therapist or physical trainer or whatever it might be to really round yourself out as a person and to really do what is needed to help you help yourself. And then that allows you to help the world.
Wow. I didn’t even think of that. I mean, I’m certainly I’m making plans for my retirement because I’m getting there soon. And there’s always the possibility I have to go into a nursing home. But I didn’t think of it. You can actually, you know, invest in certain companies that will help you in the future. Certainly. And so you’re thinking of understanding your wealth beyond your bank account. The part about that is, of course, you’re thinking I would call you a holistic approach, actually. What would you say? Holistic investing.
And in a way, yes, I think holistic is a word that I’ve used a few others in the industry that work like me have used to really look at the whole person any time with me. Start before we start talking about their bank accounts and our investment accounts. We sort of talk about their values and their goals and understanding what they’re trying to accomplish and what’s important about money to them and understanding that will allow them allow us to figure out what needs to be done in these other areas as far as their financial wealth is concerned. A lot of my clients are more concerned with their family and how do we leverage that financial wealth to take care of their family? And for a lot of people, that’s just paying for their kids college. But if you look at surveys of the wealthiest in the United States. Most really wealthy people would rather their kids inherit their values over their finances and their wealth, their financial wealth. So how do you teach your kids and your grandkids maybe your values and what’s important to you? And how do they how do you help them inherit that? And I think that’s part of the holistic picture.
Yeah, for sure. Yeah, they definitely and I as I was mentioning, of course, I have a few legacies in my will. And I’m sure you speak a lot to your clients about leveraging their wealth in order to make the world better. And I was just wondering, so besides religious organizations, do you do a lot of research on on charities to make sure that when they are, you know, actually investing in things that it will actually help that charity? Or, you know, you must have to do a lot of research on things other than the stock market.
My expertise isn’t picking the greatest charities, I’m probably better at it than most people because I do spend a lot of time thinking about it, inviting clients to know how to do that, depending on the client and their needs. Most come to me with sort of causes they care about. They really have a passion for and they know who they want to give to. And I help them leverage those gifts. So when they are looking at how much they give, how much impact, they really leverage it after taxes, how they leverage it against their portfolio, making sure that there’s enough money for the organization and for them. And when a client really wants to do research, there’s a lot of organizations and consultants that we help them find and hire if they have a lot of wealth and they really want to. It on a very specific cause and trying to find the best of those causes. I can find a lot of great places to start, but. Going down and interviewing charities on a big picture level, I’m pretty good at and I’ve done that a lot to get into the very specifics. That’s not my expertise. And we believe that part of working with a client is no matter how smart I am, no matter how many designations I have, I have an Ivy League degree. There’s so much more I don’t know than I do now. So working with other experts, finding the people who fit the needs of our individual. Clients that can bring in whether it’s tax help, whether it’s again bringing in and helping them find that perfect charity to really do what they want to do and really say, you know, you give a little bit to a big charity. You’re drop in the ocean, you give a huge amount to a small charity. You can. Override them and overwhelm them. So it’s finding that balance of what you’re trying to do, how you’re trying to do it, and there’s so many great organizations out there and the bigger questions I have with donors and clients is, what are you trying to accomplish? And if and that’s the hardest question for most people, because they don’t really know that they they want to help. Here in Los Angeles, the homeless situation, but what does that mean in asking people more and more questions? You get very, very different answers.
Yeah, that’s great. That’s great. Could you get so detailed and in, you know, down into getting them way to use the most return for their money? Because that’s obviously what I try and do, is look at all my charities and make sure that they’re using, you know, less money on the administration and more for their cause. And because I want to get a better return. So. So. And then so what obviously the charity is, is how the money is, as they say, given away.
But how do you get them to increase their returns and you make a plan so you create a legacy plan. What what would you say in general? You would say a legacy plan is for them because of course, the charities, the money being given away and not being made, as they say.
We see when we look at any client’s legacy as three main areas of concern. First is their immediate family, how they handle money, how to prepare the next generation for inheritance. How do you teach them your values? How do you take care of your parents and older generation? That’s what’s needed to instill in profit planning. When we have plans for each of these and we sort of create a sort of like a stoplight system here. Green is what we’re accomplishing. Now, here’s yellow, which is sort of the next step along the way. And red is part of the long term plan. And we try to leverage all three of the aspects to each individual to make sure they’re always making progress. So the second step with the charities when we look at is sometimes to look at different assets and say, OK, these assets are a good deal now, that by giving the stock you want 30 years ago now you can get a great tax deduction and not appreciation on that sort. That means so much money or they’re willing to give later on. A lot of retirement plans, by the time they get to their heirs, might be worth pennies on the dollar. But if you give that to a charity fund, death while you’re alive, the charity gets every single dollar. So looking at the different situations of what you’re trying to do and weighing taxes, weighing immediately versus future needs, weighing all the all what you’re trying to accomplish, we’re always looking to refine and create a plan, a written plan of where you are now and always trying to prove that there are so many little aspects that it’s impossible to set sail on a ship across the ocean to your destination and not make little changes along the way, more little changes because the world changes, the climate changes, there could be on that ship. There could be a storm ahead of you. But also people change over time and creating. And when I ask clients about investing with their values, most people I talk to about that say this is the first time anyone’s ever asked me about that. Let me think about that before I get back to you. And we create a plan to start based on them not knowing, but the more I ask them and the more they think about it, those plans change over time, so their investments will change over time. There are charities that they care about. Change over time, how they want to give and how much they’re able to give changes over time, so it’s a never ending process that. We love to create a financial plan with all this information, but it’s almost out of date by the time we give it to a client because the world changes and they change. And that’s sort of the fun part of what I do, is helping clients define who they are and what their wealth can help them create and help them be. Yeah, for sure.
You have a long term relationship with them for sure, because I know with our we’ve had a long term relationship with our financial investor. And you’re right, things change. And so I’m going to ask the question about the pandemic and how you’ve managed to ease everybody’s fears about what’s been happening this year. And I think you have no problem doing that.
It’s been an interesting time. And here in the US, the market dropped huge amounts in March and then came right back. One of the things about what I do is that we are, by nature as humans, not rational.And my job is to help people make rational decisions in irrational times. I mean, I like to describe it sort of you know, I know people who have driven home drunk and made it perfectly safe, and I have known people who’ve driven hands on the steering wheel at 10 and two and drove in the speed limit and some friend accidents. Bad things happen if you do the right thing and good things happen if you do the wrong thing. More often than not, you do the right thing over and over again. You’ll get better long term results and study after study says you can’t time the markets. You can’t. You know, figure out what it’s going to be at the bottom and when it’s going to be at the top, and the biggest thing for me to do for a lot of my clients as far as building their financial wealth is having them do what is very uncomfortable. At the right time, because it’s logically is the right thing to do statistically, the right thing to do, no matter how bad it feels, every day, it seems that a client comes to me and says the market’s going to fall apart. Let’s sell out now. And I can tell you a couple of my biggest regret in the industry in my 20 something years is the couple of clients who sold out during the crash of 2008 who I told them, look, be patient. They sold out in 2009 generally. And those are the people who had a really hard time recovering. Those who rode through it were unhappy, but they built that wealth from there and it continues growing and you just can’t determine what that is and when the bottom from the top saw and writing through proves to be the right answer. But also with covid, I have found that many of my clients have been more and more concerned about different causes when you’re talking about charities earlier and things that they thought were important before, maybe it was their university or or something in their community, they’re more they’re giving has changed. And they might be giving more to food banks or they might be more worried about the homeless situation. Or they might be more worried about medical research and various things that can change in this world. I know a lot of people as they’ve seen their communities and the people they care about at the restaurants they go to or other causes, realize that social inequity is more of a cost that they care about as they see their friends who are professionals doing just fine through the pandemic. But then to the others who are struggling to begin with struggle even more so. So the causes they care about have changed through the pandemic. And it’s been a very interesting time to work with people, revisit their plans, revisit their goals, both both on a financial and on a community level to relook at those those those items and try to keep them doing what is. The rational thing to do to and not let their emotions sweep them away, which is really easy to do right now, and I think that’s also a matter of them trusting you.
I think I think that your relationship is the most important part with with them. And, yeah, with this time, I know it’s there are polls to to help others. So it’s great that you can change their plans for them so quickly and, you know, get them if they’re concerned, reassure them and all that kind of thing. I know we’ve had a few reassurances here, but. Yeah.
And just just like the cheerful driver who gets in the car accidents, I won’t always do what I recommend to clients, won’t always work. They need to know that. But I’m going to do for them to know that they can trust me to do what looks to be the right thing. And if I keep on doing the right thing more often than not, over the long term will get the right results. And that trust is there to keep them calm and to help them keep that final going back to the ship analogy that keep them reminded their final destination and there might be a storm along the way, there might be winds and there might be calm periods where the sails won’t work. But if they keep the long view on their destination will help them get there.
Wow, that’s a great analogy, and if I had that analogy with my financial investor, yes, they would be really reassuring me. Thank you much. All that’s that’s wonderful. You’ve given some great things to think about because I don’t think anyone ever thought about values and trust and purpose and legacy and all this when when they’re thinking about money.
So I hope that you will be successful and continue and remind people that they need to have legacy planning. I think that’s probably the first thing they think about when they talk to you anyway. So is this you always try to do that with them? Mitchell.
Yeah, you know, I think, again, when waiting for practice about 10 years ago, we legacy planning our practices very generic 10 years ago and we sort of tried to be all things to all people. And I think where we are now is that we are great advisers for a select few who have these concerns. And I’m not the right person for a lot of people. And I don’t try to be the right person for everybody. I really try to find people who have things that they care about. And I get referred to people who have lots of financial wealth but don’t care about much anymore. And I generally tell them to go elsewhere. And I sympathize with less financial wealth, but really want to change the world. And that’s what’s important to me, is working with people that I can take my skill set and really make a huge difference to them and really to those they care about because they care about.
Well, I’m so pleased that you came on today, Mitchell aand that we could talk about purpose and value and legacy. I’m so pleased because sometimes it’s one thing you don’t think about with finances. And so I’d like to thank you for for coming on. And and I’ll be putting up your information for anyone who’s interested at the end of the call. So thank you, Mitchell. It’s been great. Great. And you’ve made me hopeful, hopeful for my planning. I didn’t even think about, you know what, I maybe I should actually put some of my will charities into my planning rather than just sticking them in my will. So thank you very much, Mitchell.
Thank you. I always love talking about this with people. And even if they’re not the right clients, sometimes it gets them started down a road. And I’ve gotten calls years later saying I’ve run into people at a social events. And, you know, I thought you were a little off when I first met you, but I thought about what you had to say. And I really get that. And one of the great things of giving now and sort of just in your will as you get to see a sea change made from you and you know, not everybody can afford to give immediately, but if you can give a little bit and see what change you can make, it’s just so much nicer than knowing that all those changes we made after you’re gone, which is still very important.
Thank you, Mitchell. This has been finding your purpose TV. And thank you very much for coming on today. And I’ll be showing information on how to contact you in a minute. Thank you, Mitchell. Thank you, Jane. For financial planning with thoughtful outcomes, because it’s your legacy, you can contact Mitchell at Capital Intelligence Associates.
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