Fore Your Retirement: What Golf Teaches Us About Financial Planning

Are you a golfer? Even if you're not, the game of golf can teach us valuable lessons about retirement planning. For example, hitting a hole-in-one might be thrilling, but it won't necessarily guarantee your overall success. And just like you need different clubs in your golf bag to play a round, you need a well-balanced approach to your investments in retirement. But perhaps the most important lesson from golf is the value of having a caddy. In retirement planning, a financial advisor can help you navigate the hazards and make the most of your financial "clubs." Tune in to this episode to learn more about how the game of golf can help you plan for a successful retirement.

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Transcript Of Today's Show:

Speaker 1: It's time to plan with the tax man once again here on the podcast. Tony Mauro from Tax Doctor Inc with me to talk golf. We're going to spend a little time talking what golf can teach us about our financial planning or financial strategy. We're calling this for your retirement, pun intended. F-O-R-E. So there you go. What's going on buddy? How are you?

 

Tony Mauro: I'm doing good. You're in the throws a tax season and as we were talking about earlier, thinking about golf, thinking about the spring.

 

Speaker 1: I know, right? It's like, yeah, well, it'd be nice to go play a little bit, but mother nature can't quite make up her mind if she's fully ready for spring or not. So it's like, all right, well while we're waiting, let's talk a little bit goof. And as my daughter and I like to call it, call it some goof. Of course, the way I play is probably is goofing. How about you? Are you a good player? I know you like to play.

 

Tony Mauro: Well, I like to play a lot. Everybody's got their own version of good, so wherever you're at, you think you should be better. Right?

 

Speaker 1: Right.

 

Tony Mauro: But yeah, I mean we play a lot and I've enjoyed it for a long time.

 

Speaker 1: Well, are you good enough to get a handicap?

 

Tony Mauro: I have a handicap. My handicap right now is 7.9.

 

Speaker 1: Well, then I would say that's good.

 

Tony Mauro: Call it eight.

 

Speaker 1: I would say that's good then. Yeah.

 

Tony Mauro: Well, like I say, it depends. Everybody, if you're an eight, you want to be a four. If you're a four, you want to be scratch.

 

Speaker 1: Right. Well, okay.

 

Tony Mauro: If you're a 20, you know.

 

Speaker 1: If I play 18, I'm shooting in the upper nineties, so you're better than me.

 

Tony Mauro: Well, I mean it's all about getting out there and having fun. And it's picked up a lot of popularity.

 

Speaker 1: Oh lord, yes. It's massive. Although pickleball is the thing that's took over everybody, I'm like, good lord. Pickleball's everywhere.

 

Tony Mauro: It really is. I can't believe the interest, even as people are getting a little older, they're wanting to go out and play pickleball just to get a little bit of an exercise in.

 

Speaker 1: Yeah. Oh yeah. No, they're digging it.

 

Tony Mauro: Yeah.

 

Speaker 1: Well, let's stick with golf for right now and we'll jump into it. And even if you're not a golfer, I think you can still enjoy the lessons. Most people have enough basic golf knowledge and of course, depending on the retirement. And of course it's perfect for retirement because how many retirees like to play golf. A lot. So let's start with just breaking down a couple points here. I got some fun ones. I want to chop them up and have a little fun with the analogies. And I'm going to tell a story along the way, Tony and I encourage you to do the same. I'm sure you've probably got several as well since you like to play. But we're going to start with hitting a hole in one and thinking about this from a financial standpoint. I mean, a hole in one is super exciting. I mean, even in putt putt we get...

 

Tony Mauro: It is.

 

Speaker 1: We're like, yeah, I got a hole in one. But here's kind of how I want to go with it. It has an interesting effect on it. So for example, I was playing golf a number of years ago with a couple, me and a friend of mine. We were in our early forties, I guess, maybe late thirties, and they were in their early seventies and we're on this par three. And he knocks the ball, he tees off, and lo and behold, he gets a hole in one. I'd never seen one live. It was awesome. And so I think it was maybe the third hole, it was a par three, something like that. And of course his wife and she was, the whole day, she was like 125 to 145 yards straight down the fairway. Every single shot she made, she'd chip up on one, she'd putt, she'd one putt, so on and so forth. But anyway, he makes this hole in one and for the rest of the day, the rest of the 18 holes, he is just super cocky, super arrogant. And this is a 70 year old guy. He's feeling it, right?

 

Tony Mauro: Yep.

 

Speaker 1: Well, my friend and I are terrible. We're all over the map. They're laughing. But at the end of the day, guess who won of the four?

 

Tony Mauro: One of you guys or his wife?

 

Speaker 1: His wife.

 

Tony Mauro: His wife. Yeah.

 

Speaker 1: Because she was slow and steady and rock solid the entire way, right?

 

Tony Mauro: Yeah.

 

Speaker 1: So, I thought that was an interesting lesson. And he got the hole in one. He was like, I am feeling it. I have got this game figured out today. And she was like, I'm going to go with the tried and true principles. And she ended up winning. And that made me think of financial planning, the hole in one, or I guess a big hit, I guess some sort of big windfall, picking a stock or something that does really well. It's exciting. But slow and steady or the tried and true principles is what's going to get you where you want to go.

 

Tony Mauro: No, it is. And I haven't had any hole in ones in my life. I know a lot of people that have, my father's had two, my brother Tim has had two, and I witnessed one of his. And it was the ugliest thing you've ever seen. It was a ground ball hole in one is what it was from tee to green. But it went in. But you ask the PGA players and they have multiple hole in ones, but they're out there playing for a living and doing it all their life. But like you were mentioning, I mean, even for them, most of the time you see it on TV, somebody will have one in one of those rounds on TV, but very seldom are they the winner at the end of the day. But they can control their games much more than the rest of us, obviously. But for us, I think as it pertains to financial planning, it is like that. Everybody's running around saying, I want the next big thing, or I want to really cash in on something. And every once in a while they'll get lucky and they'll make some money. But if they're going to follow that philosophy from start to finish until they retire, most of the time they're not going to end up very well off. And right now, it's even more prevalent. I mean, as we're taping, the Silicon Valley bank just went under and people were a little nervous and the markets haven't been doing very well lately again, and they're asking for the same thing. Now it's, well, what can we do that's safe? And I could still make money.

Speaker 1:

Yeah. Right. Well, yeah, that's an interesting point because the SVB thing, certainly a one-off and a unique situation I think. Do you see that as something systemic? No one's got a crystal ball. I don't think it will be. And they were not a traditional bank in the normal sense. They had a very select clientele, all tech heavy, tech companies laying off and they got into bond. They got... A lot of the stuff they did, it really burned them. And I think that's, actually, it's almost an interesting lesson in that itself, in still being diversified. They did, as a bank, they did a little too much of the same thing. And it bit them in the hind end. Right.

 

Tony Mauro: It did. And they did it probably at a bad time.

 

Speaker 1: Well, the perfect storm. Bad time. Yeah.

 

Tony Mauro: Scrap the fact that what were they doing and all that. I'm sure it'll all come out. But back to our analogy, I mean it really is the case for diversification and trying to develop an overall plan as we're talking about retirement planning and trying to stay the course and modify along the way, but not relying on hitting that long or in this case, the hole in one.

 

Speaker 1: Yeah, well I was going to say, yeah, you could jump metaphors here. We could go baseball. Same thing, right? The home run. The home run kings are also usually the strikeout kings.

 

Tony Mauro: It is. Yeah. So I mean, it's fun to play with. I think the lesson here is make sure that you're developing an overall strategy just like you would... As your golf game improves, you try to strategize your way around the course, not just try to knock it as far as you can. I think that it lends itself to a good plan.

 

Speaker 1: Exactly. Yeah. I mean, they're sexy. A hole in one is sexy, no doubt about it.

 

Tony Mauro: Oh it is.

 

Speaker 1: But hard to come by. And again, I love the lesson that I was taught that day. It was like, okay, you young bucks can hit the ball a mile. Of course you hit it in the wrong direction.

 

Tony Mauro: That's right.

 

Speaker 1: But she hits it nice and straight 130 yards and whipped our tails. So little fragile, little looking. She's a tiny little thing, little 70 year old lady. And she just beat us into the ground. If we'd have been playing for money, I'd have been broke because she didn't just beat us, she crushed us.

 

Tony Mauro: Yeah.

 

Speaker 1: All right. But so let's go on to number two here and what golf can teach us about financial planning. Unless you're Happy Gilmore, you probably want more than two clubs in your bag. You probably want more than just the driver and the putter because I think that's pretty much all he played with, if you've ever seen that movie.

 

Tony Mauro: Oh yeah.

 

Speaker 1: So you need that diversification of a couple of different kinds of clubs. So think about it in that same manner. You're probably not going to use your driver in the fairway, and you're certainly not going to use it in the rough.

 

Tony Mauro: Right. And I think too, and I've been through a lot of different clubs in my day, and remember when you first started golf, people can probably relate to this is you do only have a few clubs in your bag because you can't hit the other ones. And even now, depending on your handicap, some clubs are hard to hit. But nevertheless, if you're really going to get good, you have to have a full set to really bridge those gaps and distances. That's why we have 14 clubs and you see the really good players. I mean you could get a guy off PGA tour and probably beat me with two clubs. He probably could have two clubs and beat me.

 

Speaker 1: Oh sure. But he's a pro.

 

Tony Mauro: Yeah, he's a pro. But for most of us it's the game's not enjoyable, but tying it into the financial planning is, you need some diversification, as we just talked about. You need to make sure you're into different types of investments, generally speaking, not just all cash or all a bond. It serves it itself well with the overall plan, which is what we do with people is once we get all of their financial data, it is saying, okay, based on this and when you want to retire and what you want to do, here's some suggestions. And it's fairly well diversified. I mean, there's some different types of investments because as we see right now in the market, bonds, the rates are up a little bit, more than they ever have been. But that doesn't mean rush out as a 30 year old put all your money into long term bonds. Back to Silicon Valley.

 

Speaker 1: Back to Silicon Valley. Yeah, exactly.

 

Tony Mauro: Maybe that's not the best case. But I think that's the main lesson here is you got to have different asset classes, you got to have some different types of things and then monitor those classes because something's always going to be in and out of favor. But by doing that, you really can set yourself up well for a lot less headaches and a lot less tinkering down the road.

 

Speaker 1: And I've got some interesting stats here on the SVB while we're talking real quick on this. We can, and we'll jump right back in. And these come from bankrate.com and Bloomberg and New York Post. But it basically said, if you're, it's for people that are really worried, a couple of things to just keep in mind, especially with one of the bottom line pieces here, and this is actually from a CFO as well. This is just kind of remember that most large national banks deposits, they diversify their deposits. We were just talking about diversification. And they have kind of a more regulated system and less exposure to investments. And that's really what hurt SVB. They had roughly 56% of their deposits were locked up in securities compared to somebody like Bank of America who only runs it around 28%. So completely different risk profile.

 

Tony Mauro: Yeah.

 

Speaker 1: Right. And you could take that lesson to your individual self. So if you are putting way too much, like if you work for a company and you get your paycheck there and they give you stock options there and you have a bunch of invested in the company, and let's say you've got 70% of your life, your income tied up in this company. Well look, think about Enron from all those years ago. Same thing. You have way too much tied up in there and it goes under, guess what happens to you? You go under too.

 

Tony Mauro: Yeah. It's no different than us. I remember, this actually happened on the golf course. This was before the collapse of '08, '09. I was out golfing in Arizona and I happened to get paired up with a guy who seemed very high up on the chain at General Motors. I mean, flying in the corporate jet. And you can just tell this guy was high up.

 

Speaker 1: He was fancy. He was rolling.

 

Tony Mauro: Yeah. And he was mentioning at the time he had all of his retirement and he was probably in the sixties at the time, invested in General Motors stock. And when we got back, it wasn't a year and a half later, I don't know what ever happened to the guy. General Motors filed for bankruptcy. Maybe he got out and was given some things, but couldn't help but think of that guy that's like, because that happened and who knows what could have happened to him. But that could happen to you in any of these types of different types of investments, especially if you're just concentrated in one particular thing.

 

Speaker 1: Yeah, absolutely. So again, clubs in a bag, diversification, SVB, we're trying it all together today.

 

Tony Mauro: That's right.

 

Speaker 1: We're bringing it all full circle in here. So let's do the last one. Have you ever had the opportunity to play with a caddy?

 

Tony Mauro: I have when I've traveled and it's fantastic.

 

Speaker 1: Everybody I've talked to that's done it said, wow, it's really impressive. So this one's a pretty easy analogy, right? Because you're paired up with a guy or gal who's a pro and knows that course or whatever the case is, and they help you do all these little things, like reading your line and reading the green and how the putts could break and best choices for this, that, and the other. Well, that's what you do in a sense, Tony, right? As a financial professional, you help with the hazards.

 

Tony Mauro: We help with the hazards, I mean, we are the financial caddy. And when I played golf at some of the, you go to some of these travel resort type courses and some of them make you get a caddy. Obviously most of us don't play with a caddy in our everyday rounds. But it is a ton of fun because like you say, they know the course like the back of their hand, they're going to be able to tell you from watching you hit two swings, what you should hit on this particular thing. And most of the time they are correct. Every time you say, ah, this guy doesn't know what he's talking about, I'm just going to do what I always do. And then you don't turn out so well on the golf course. I think a lot of it is the same way in the financial area is that can you do it yourself? Can you play without a caddy? Sure. But you're generally going to end up much better off and much more at ease with someone helping you, coaching you around a little bit in your financial life, however that may look for you. So not that you can't do it yourself, but I definitely think you're going to be much more efficient. You're going to probably end up, some people equate it, well, can you get me a better return than I can by myself? That's not really the gist of it, because I can't answer that. It's more along the lines, can we maybe do it or do something good for you in a tax advantage status? Can we make sure that you're on track to hit the goals that you set out to get?

 

Speaker 1: Yeah, how's your income going to play with social security? What's the best social security strategy for you? How are you going to be tax efficient? Right? It's so much more than just, well, like I guess if you were playing with a caddy and you just wind up saying, Hey, what's the best club for me to use on this hole? Well, there's so much more he has to offer you than just that. If you ask him that same question every time, you're not really maximizing what that caddy can do.

 

Tony Mauro: No, absolutely not. And like I said, on the course, those guys are fantastic. Besides having a lot of fun, they know the game. They're in the game every day just like we are as planners rather than just guy coming out a couple, well, in my case, traveling.

 

Speaker 1: Yeah. It's not your cousin Eddie walking out with you going, all right, here's what you want to do.

 

Tony Mauro: Yeah, no, no, these guys know the game. And if you let them hit a ball for you, generally they're really good players. So I think it goes back to the financial case. It's just like everything else, the people that do it every day are probably going to be better at it than you. And it might be wise to listen and come up with a plan and to work with an advisor.

 

Speaker 1: Yeah, absolutely. So there you go. There's a little analogy with golf. We even touched on the SVB thing a little bit. And of course folks, if you do have concerns about what's happened this past week, the time we're taping this, we're in the middle of March, we'll be dropping this podcast here this week. With what's going on with these banks, before you take action, don't panic that. That's one thing we don't need to do is people start panicking and running and taking money out of any banks. And that can certainly be what causes issues. So make sure you reach out to your advisor and just make sure that things are okay and have a conversation. As always, there's no crystal ball, no one knows what the future holds, but we want to also not make things worse by creating more panic than it needs to be. I think that was also where they kind of shot themselves in the foot. The minute they reached out to their investors and different tech companies and said, don't panic, that's essentially the time to... That's when they panicked, right?

 

Tony Mauro: When they panicked. Yeah. And I've been telling all of our tax financial monthly accounting clients and wealth clients that same thing. Don't panic. I mean, yeah, everything's good until it's not. But most of us don't have, I mean, as an accountant, I like to look, but most consumers aren't going to go and review and understand the bank's financial statements. But I'm telling clients, talk to your banker. Just ask them, Hey, what do you think I should be doing to mitigate my risk if I've got over $250,000 or whatever. I don't know if you want to go in and say, explain all your financials to me, they're not going to have the time to do all that.

 

Speaker 1: Right. Right.

 

Tony Mauro: And even if they're not in good shape, they're probably not going to be, Hey, we're in real bad shape. But I think proactively, like you say, keep an eye on it, ask your advisor, ask your banker. And I don't think you should be running out and just pulling all your money out. Absolutely not.

 

Speaker 1: No. And I think based on, I've talked with a bunch of advisors already this week, Tony, and they've all said the same thing. There doesn't seem to be any evidence there that this is a systemic problem.

 

Tony Mauro: No, no.

 

Speaker 1: Yes. We've had two at the time we're doing this, one on the west coast, one on the east coast, but they are both very specific banks to very specific things. I think the New York Bank really being hurt by the crypto, being too heavily heavy leveraged in crypto. And of course, SVB wound up being too heavily leveraged in bonds they took out, and then they didn't have the stock assets to cover it. So.

 

Tony Mauro: Nope.

 

Speaker 1: Yeah, and bank failures, folks, they happen more often than you realize.

 

Tony Mauro: They do. They do.

 

Speaker 1: Yeah. It's an interesting chart. We've actually had like 300 plus since the great financial impact of '09. We've had about 300 plus bank failures, and you don't really hear about all of them. You only hear about a few at a time. Especially the really big... You heard it around the financial crisis, obviously in '08, '09, that's what most of them were.

 

Tony Mauro: Yeah.

 

Speaker 1: But I think there's been 12 since 2019, and I don't think you've heard about any but this one.

 

Tony Mauro: Yeah, I've only heard of one other one since and well, it's probably been, yeah, four or five years. And that was just a minuscule little thing. I mean, you could ask clients about it. They'd never heard of it.

 

Speaker 1: Yeah, exactly. So again, you never know. There's always chance for things to happen. We certainly want to keep our eyes and ears peeled, but we don't want to panic. So if you do have questions, definitely reach out to someone and have a conversation before you take any action. And of course, Tony's here to help, he and his team at Tax Doctor Inc. You can find them online at yourplanningpros.com. That's yourplanningpros.com. He's got 27 plus years of experience as a CPA, CFP, and an EA. And he is, well, he's a tax doctor. Tax Doctor Inc. So check him out online and we will see you next time here on Plan with the Tax Man. Thanks, Tony.

 

Tony Mauro: All right. We'll talk to you later.

 

Disclaimer: Securities offered through Avantax Investment ServicesSM. Member FINRA, S.I.P.C. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency.