Read The Transcript Here:

Steven Jarvis, CPA (00:54)
Hello everyone, and welcome to the next episode of the retirement tax services podcast, financial professionals edition. I’m your host, Steven Jarvis, CPA, very excited for this week’s episode. Joining me is the COO of Ritholtz Wealth Management, Nick Maggiulli. Nick, welcome to the show. Thanks for being here.

Nick Maggiulli (01:09)
Thanks for having me on, Steven. Appreciate it.

Steven Jarvis, CPA (01:11)
Yeah, we’re going to dive into several different things. But as we’re kicking off, I just want to make sure that I have a chance to highlight that you recently published a book, The Wealth Ladder. And you were just telling me that it’s doing very well. There’s probably people listening who’ve already read it. But tell us just a little bit about the book for those who are new to it.

Nick Maggiulli (01:28)
Yeah, so the book is just a new framework for thinking about your money and wealth. And the analogy I use in the first chapter is a fitness instructor would give very different health and exercise advice to someone who’s morbidly obese versus someone who’s a well-trained athlete. I think you can use that same analogy and apply it to our financial lives. And so I think your strategy has to change over time. So it’s a very dynamic type of guide where it says, hey, if you’re here, this level of the wealth ladder, and I define the six levels of wealth. If you’re in this level, you should do this. If you’re in this level, you should consider this, cetera. And so it kind of opens that up, opens up the different strategies, different income things to think about spending, investment strategies, all those types of things. And it just, it just touches on everything. It’s just a high overarching framework. It’s not very in the weeds of, or very detailed on one particular strategy. It’s just trying to be like a framework for all of wealth building in general.

Steven Jarvis, CPA (02:17)
I really like that, just how you’re describing that and the analogy to health and fitness because when we talk to people about taxes, which we do quite often on this show, that really resonates for me because there are some principles that are going to be true regardless of where you’re at, but what you should be doing on taxes or wealth or anything else looks very different depending on your current situation. So I love that. I definitely will go be checking it out myself with the Wealth Ladder is the name of that book for anyone listening. So Nick, one of the things I wanted to start out with. I’m sure a lot of our listeners are familiar with Rithotz Wealth Management. What I think people are not nearly as comfortable with is what the heck is actually a COO? Tell us about your responsibility at Ritholtz because I feel like every COO I talk to is doing a little bit different things.

Nick Maggiulli (03:00)
It’s very true. Every COO and not all RIS have a COO that sometimes that role is split amongst different people. Basically COOs do one of two things. At least there’s two types of roles I’ve heard of. One is very like HR recruiting, like culture heavy, right? And then the other type more of my style is more operations, data, technology type stuff. That’s kind of what I do. I mean, there’s, and there’s obviously everything in between there. So I came in as a data scientist originally. I was just trying to provide like the best information to the partners to make better business decisions. And I started doing more and more stuff. I started working with the investment committee to help figure out how we’re allocating money and stuff. I started working with the ops team. I now run trading. I do all the billing, right? So it’s just been one of these things where we’re going like step by step through the business and making it more efficient over time. And the question I always like to ask like for my thinking as a COO is like, if we doubled the size of the business, what would have to change? Or if we 10x the business like, what would we need to change to get there, right? And so like, would we need to hire another, you know, 10 CSAs? Would we need to hire another, you know, bunch of traders? Like how can we, and then how can we get there without needing to hire as many people or only hiring maybe start, you know, A players so we can hire fewer people that are much better than hiring a bunch of, you know, mediocre people. And so that’s what we’ve tried to focus on in terms of recruiting, in terms of scaling, et cetera. I think we’ve done a pretty good job at that.

Steven Jarvis, CPA (04:20)
That’s awesome. I really like that framework of, what would have to, if we were, I, most of us are in the business to keep growing and very few people are like, nah, I’m good. I never want to grow again. But that’s an interesting framework to say, okay, what would have to change? And this might feel like a little bit of a left turn just because we were chatting before we hit record, but like within that framework of what would have to change to 10X, how did adding tax prep, tax services into what you’re doing fit into that idea of how do we grow and what does that have to look like in the future?

Nick Maggiulli (04:47)
I think tax prep in particular makes the product, makes the rest of the product that much better. It’s obviously not the only thing we do. It’s considered an add-on service, but so many clients love it because we can work with not just your financial plan, but now we’re thinking about the tax side. And I think one of the reasons why, you know, wealth management kind of has their hands tied a little, if you’re not helping on the tax side at all it’s a little bit harder to make some of these bigger changes. If you’re working with another firm and the other firm’s great to work with and easy to kind of communicate back and forth, that’s great, but if we’re doing, it’s like the right hand doesn’t know what the left hand’s doing, and so it’s nice to have that all in-house so that the advisor can work with the tax team. We have these big calls with everyone together and the client, and we’re saying, hey, here’s what we’re thinking about your money, and they might say something that the tax team’s gonna pick up on and say, hey, the best tax planning we do is, is beforehand, right? It really sucks to come around to April and be like, well, it would have been great if we did that before, we can’t do that now, right? And so you wanna kind of, the planning really needs to work with the advisor and work with the tax team. So we find that, at least what the clients say, just, it makes the relationship stick here, it adds a lot more value, people are happier with it, taxes….No one really loves to do taxes, at least from client perspective. I know tax professionals, I’m assuming love it, but it’s tough because it’s like there’s so many things like, what do I do about this? Or these like little weird edge cases we’ve never heard of. right. And every state’s different and so complex. And what we were talking about earlier, like I’m trying to give as much generalized advice as I can. But once you get to taxes, it’s really, really difficult because the advice changes so much based on your situation. And so the wealth ladder is like a simplified way of doing that on for financial advice, but once you get to tax, it gets way too complex. And I think it’s, that’s why there’s no really one amazing, super amazing tax book that’s like, is a best seller and it’s sold out everywhere because it’s such a difficult topic to write about. And all the best selling tax books are usually this thick because they cover basically everything you could ever talk about, so.

Steven Jarvis, CPA (06:39)
Well, Nick, I mean, you’re clearly familiar enough with the book game and the tax game both to know that a lot of people are surprised and probably aren’t nerdy enough to ever check. But if you go to Amazon and go to the best selling list of tax books, they’re all just like the annual updates. Because for the most part, the only people buying tax books are tax professionals, tax nerds. And the books they’re buying every year are just, hey, here’s everything from last year with the current year dates on it. To your point there, there isn’t that one, like true guide of for the average taxpayer, here’s how this works. Nick, talk a little bit about, I mean, how long has tax prep been a part of what you’re doing at Ritholtz? And then when that decision was made, because you talked about a couple different things in there as far as why it’s valuable, but was it more of a to help drive growth or was it to solve client pain or some combination thereof?

Nick Maggiulli (07:24)
We’ve realized that, like there’s really two ways you can go. It’s like, know, fees are coming down in general fees have come down. I’m not saying this is true in like the last year or two, but like in general fees have started to come down. So it’s like you have one of two options. You either bring your fee down or you value up. And we decided, and I think a lot of firms have decided correctly to value up and they’re saying, Hey, we’re going to go in and add more value over time. And that’s kind of the way we do that. So we hired our director of tax services in 2021. And so we kind of had our first run through in 2022, first full tax year. And then we’ve just been expanding since then. Like the team’s quite a bit. They’re located in Pennsylvania, which we call Taxylvania. And yeah, I know it’s going great. mean, it’s just been, obviously there’s a lot of like learning and growing pains with getting that, you know, adding the tax practice, getting more clients in on it, like seeing how it’s evolving, like running that business. So I’m not the one that runs that business, but I help them a lot with like a lot of the technical backend, everything we do in Salesforce, et cetera.

Steven Jarvis, CPA (08:17)
Nick, is that a separate service that clients pay separately for? You talked about value expansion as opposed to fee compression. So was that to continue to charge the same planning fees or are you individually invoicing and billing for the tax prep itself?

Nick Maggiulli (08:30)
So the AUM fee is its own fee for the investment management stuff and the tax stuff is optional. It’s absolutely not required. But to get the tax services, you need to be a full-time wealth management client. It’s one without the other. But that is invoiced separately, right? And so that’s a completely separate service that’s done. But it’s like having that service is what makes it great. And you’re getting on these calls with multiple people, and you have people who know each other who have worked together in different client situations. So, I think that makes it a little bit better than just getting on with a random person you don’t know how they operate. I think that can make it a little bit more difficult. So we have that kind of seamless transition between the teams.

Steven Jarvis, CPA (09:06)
Yeah, there’s so much potential value when the wealth manager, the financial planner is collaborating with the tax professional, whether that’s in-house like you guys are doing, or even, I mean, we have a few dozen advisors we work really closely with, and we’ve just designed our model so it’s hand in hand. Mean, this might seem like a silly example, but it totally changes the client outcome. Literally just today, we’re recording this on October 14th, had a client that was late getting us some things, so just trying to help him get it across the finish line, and they couldn’t tell if they had made their subcontribution yet and I don’t have visibility into that. And I was on the phone with the client and they’re trying to go through their records and they can’t really figure it out. But I’ve got a relationship directly with the financial advisor. And so instead of having the client play a game of telephone to try to figure out what the heck happened, it’s a quick message to the advisor. We’ve got it all sorted and we all move on. Like what could have what historically can be this really complicated game of back and forth on a simple question gets solved like that if that collaboration is going on.

Nick Maggiulli (09:59)
Yeah, exactly. And the other thing too, because we share data systems, like the tax team could go look into that individual’s like, cash sharing. They look, I can see for this individual, here’s all their cash sharing, all the money movements they had for the year. there’s the SEP contribution right there. Right. So they would, they could see that without even having to contact the advisor. Right. So that’s because it’s all integrated.

Steven Jarvis, CPA (10:19)
Yeah, that’s amazing. That’s amazing. Are you seeing that, does that then get incorporated into your prospecting and your marketing as far as how you’re seeing growth continue with the firm or is it more just something you’re offering to existing clients?

Nick Maggiulli (10:27)
No, we offer it obviously to new clients coming in and it’s obviously dependent on how much we can take on. So usually there’s a period where we have openings, and then at some point if once it gets full, like, we think we can get to this number and then we shut it down. So that’s usually how it is. It’s not like, my gosh, like no one can get in. We’re not trying to make it super, super scarce. But at the same time, like at a certain point we’ve like, hey, we’ve put out the message, we’ve gotten everyone, and then we’re like, hey, we’re capping it at this number. Once we get to that number, that’s it. Right. So. But yeah, we’re trying to, and we’re expanding, we’re gonna see how it works, and every year we’re trying to get better with it. But yeah, that’s one of those things where we do tell clients about it is used in marketing efforts, because I think clients really love it I see it in, we know we send client surveys, and we see it kind of in how they talk about this in that particular product.

Steven Jarvis, CPA (11:09)
Yeah, I’m huge advocate for we need to make good life decisions and then figure out the tax efficient way to go about them. Like even though I’m the tax guy, like taxes very rarely lead the conversation. But in my experience working with clients and then talking to hundreds, if not thousands of advisors at this point, taxes are disproportionately painful and emotional for the average consumer. And so being able to be part of that solution, whether you have it in house like you guys do, or whether you’re just an advisor who thinks proactively about this and is helping coordinate the discussion with the third party tax professional, that’s a game changer for how the client sees the value that you’re adding because all of the planning that we do really doesn’t count for anything until it’s reported to the IRS correctly.

Nick Maggiulli (11:46)
Yeah, yeah, I agree with that.

Steven Jarvis, CPA (11:48)
Nick, this is going to surprise no one since we already talked about the fact that you’ve written a book, but you produce a lot of content. And I went and cherry-picked an article that was, geez, over a year old ago now, or year old, It’s almost a year old at this point. talking about, so this is in August of 2024, wrote this article that the only, I think it was the only certain things are debt and taxes, but you’re talking about kind of the sub headline on there was taxes rates are definitely going to go up. And so for advisors, for people I talked to who, especially in 2024, were like, hey, Tax Cuts and Jobs Act is about to expire, like tax rates are clearly going up. Like, I like to come back around and this conversation of, has your attitude changed at all? Is there anything you’re messaging differently now that those tax rates have been extended?

Nick Maggiulli (12:25)
I mean, I think you write something at a given point in time with the information you have. And at that point in time, I was thinking, remember, this is August last year. So things have obviously changed. You’re thinking, OK, I don’t know if Donald Trump’s going to win the presidency. I think the Democrats might have it this time again. And so if that happens, then guess what? Like the taxes are probably going to go up. They’re not going to go down. So I was expecting that outcome. I don’t think it was the most shocking thing when Trump won. I don’t think it was like in 2016 where people were really not predicting that. So I don’t think maybe my prior should have been a little bit more in tune with, hey, well, if Trump wins, there’s that probability. So I think I was hedging in my mind, said, if this happens, it’s likely that taxes are going to go up. And so when that happens, here’s what you need to think about. And I’m not just talking, most of the time when we talk about taxes going up, we really just talk about the highest rates. like, okay, yeah, the people making over 500,000, those taxes go up, et cetera. I think we’re gonna eventually see a time where even on the lowest brackets are gonna see those rates go up. And people say, well, how? Like, that’s never happened before. I talked about it in this post, nothing is except debt and taxes. Go back to like 1993, which was about 30 years before when I wrote it. Going back 30 years in time and the effective tax rate was much higher. The effective tax rate, right? Not the marginal, the effective tax rate on the lower income brackets, someone making $100,000 a year, was much higher in the early 90s than it is today. So yes, I agree that the higher brackets are gonna see those marginal rates increase, but I could also see the lower brackets see a slight increase as well because it’s a part of history. It was already there. We’re not talking about getting the top bracket to 80, 90%. I’m not even making that argument. I’m saying the first few brackets, know, instead of 10%, like, let me see, what was it in 1993? I actually have it in here. Give me one second, I apologize.

Steven Jarvis, CPA (14:12)
Well, Nick, while you’re looking for that, I want to call it a couple of things that you’re describing there, because I really love how you’re framing this. And one of them is you made that comment of, hey, you wrote the article based on the information that existed at that point in time. And that’s really how we have to approach tax planning. So I’ll have advisors push back on me sometimes and say, hey, you know, I’m going to hold off because we’re not certain what’s going to happen next. But that’s never going to be the case. The tax code is written in pencil. What I tell clients all the time is we’re going to make the best decisions we can based on the laws as they’re currently written and the information we have today. So I love that that’s the way that you approach it. Did you find the number you’re looking for?

Nick Maggiulli (14:42)
Yeah, yeah. So in 1994, the rate on the lowest bracket was 15%, right? The rate on the bracket above that was 28%. Right? So there’s a bit higher than the 10 and 12 % brackets of today, right? So as I say here, you know..The effective rate in a first a similar size withdrawal I’m trying to do a hundred thousand dollar withdrawal over time right and so Back then your effective rate was closer to 20 % You know was today it would be closer like 14 % at pulling out a hundred K a year So it this with the standard deduction all the standard things you would do so like back then the effective rate was higher So imagine saying hey, I’m gonna contribute to my 401k in 1994 you avoid, you know the paying those rates and then today you’re paying a much lower rate, right? You’re paying 13.84%, right? On that withdrawal, right? But let’s say you did Roth back then, right? You would have Roth back then paid the higher rate then, and then you would have missed out on the lower rate today. That’s because effective rates went down. I think the opposite. I think those old effective rates can come back. I think it’s gonna be very likely that pulling out $100,000 a year, you’re gonna be paying a 20 % effective rate, which right now you’d only be paying 13.84%. So that’s kind of the shift I’m talking about here.

Steven Jarvis, CPA (15:50)
Yeah, and there’s two sides of this we have to think about because you’re talking about the macro level of here’s how the rules could change. That’s, geez, mean, it’s such a common political football by both parties to play with tax rates. So absolutely, I’m with you. If I had to guess right now, I would bet money right now on whether tax rates by law will be higher or lower in the future, I’m betting on higher every time. And then the other piece, too, is then taking it down to the individual level and saying, OK, for this particular client I’m working with, looking at their income streams, looking at their assets, looking at what five, 10, 20 years from now is going to be for them, then we also have to say, relative to today, do we expect to be in a higher or lower bracket? Even if Congress doesn’t do anything, it seems unlikely. And so there’s kind of these dueling pieces to it. have to understand the macro environment as well as how it applies to specific clients.

Nick Maggiulli (16:36)
Yeah, and the thing is, you can control your individual choices. You can say, hey, you know what, I know I’m going to retire like five years earlier. I’m just going to take all my, let’s say my traditional money converted all to Roth over the course of a couple of years and just pay a lower rate because I’m not going to have any income. Great. But what if you know you’re going to have income? What if you have a business? What if you have royalties or like, who knows what you could have? You could have other money coming in. You could have money shooting off of your brokerage account. And you’re like, you know, I can’t stop those dividends from coming in. I have to pay tax on that. Right. So even there’s all sorts of weird things you can’t even anticipate. And then the tax law could also change in the interim, which is very difficult.

Steven Jarvis, CPA (17:10)
Yeah. Yeah, you mentioned in there that all we can control is the pieces that we have choices over. And I try to reinforce that as often as I can, that really the best tax planning considers the long term. It’s proactive. And really what it is is it’s focused on understanding the places in the tax code where we can make choices. Because the tax code is lacking in anything resembling logic. But if we know what the rules are and how they apply to us, then we can intentionally and proactively make choices when they come along, whether that’s how we convert to Roth or the types of deductions we make or when we’re making pre-tax versus Roth contributions. Basically, for all of us, there are choices along the way that we can make. It’s just a matter of are we letting those happen by default or are we being intentional?

Nick Maggiulli (17:51)
Exactly.

Steven Jarvis, CPA (17:52)
Yeah, and that complexity that then comes in there with those choices available to us, it kind of brings us full circle back to where we started, which is having that relationship between a financial advisor and a tax preparer so that we’re seeing the full picture, that we have those kind of different ends of the spectrum talking to each other so that we can marry up the financial planning with what are the tax implications along the way.

Nick Maggiulli (18:13)
Yeah, it’s exactly what you gotta do and that’s what we we’ve tried to do what we’ve tried to do over time as well

Steven Jarvis, CPA (18:16)
So you’re four years into having taxes in-house. What are some of the surprising things you’ve, from an operational standpoint what are some of the surprising things along the way of what did work well or what you had to adjust as you’ve tried to integrate what traditionally are very different types of business models?

Nick Maggiulli (18:29)
I’m not as familiar with every single thing that’s happened with that. And so I don’t really think I’m a great answer for that, to be honest with you. I think the one thing that we realized we had to do though was we had to get all of our workflows on the same process. So the tax team was kind of doing their own thing originally and they said, no, we got to bring them into Salesforce. We got to have everything linked. Everything’s got to be integrated. That was one thing that I think was a huge win for us was getting their whole tax workflow is now like we basically built all the logic out of like a tax workflow software into Salesforce. This is not going to have all the other things that like a professional tax, you know, like taking in documents and all that. It doesn’t have all that. It’s not client facing, but in terms of the CRM information that we have about the tax client, it’s all in Salesforce and it’s integrated with the rest of our practice. So I think that was the biggest value add because as myself, if I were an advisor, I could go and see the entire tax history and then the tax people can go see the advisory relationship and everything that’s happened there, the history there, cash hearings, when the money was brought on, how it was allocated, any changes to the allocation. All that is now being shared and that just makes it so much easier for both teams to do their jobs effectively.

Steven Jarvis, CPA (19:36)
I love that you highlighted that because I’ve talked to so many firms of various sizes that have, and whether they were a legacy tax firm that is now doing financial planning or vice versa, you articulated it from the operational side of it, but it reinforces a theme I’ve seen over and over again of when you have tax prep and financial planning under the same roof, but you’re still running two completely separate businesses. I mean, you may as well just have completely different, like name them something different. It doesn’t really matter that they’re under the same roof. It really comes down to, how are you managing those relationships? So I can only imagine how much more effective that is for your team and then how much more valuable it is for your clients that you’ve really just fully integrated the two. Because that’s really where the most value comes out for the clients because just like financial planning as a whole, the more these different pieces of a person’s plan are interacting and talking to each other, the more powerful each piece is going to be.

Nick Maggiulli (20:25)
Yeah, exactly. And so that’s been the goal the whole time.

Steven Jarvis, CPA (20:30)
Yeah, love to hear that. mean, the tax world is certainly interesting as we have so many CPAs retiring, we have so many CPAs not taking on clients. I think for a lot of advisors, that’s a good portion of the motivation to even explore this kind of thing. But I love being able to talk to people who are seeing success with this, because there absolutely is a way to do this that’s going to be valuable to the clients, that’s going to be profitable to the business, that’s going to be a win for the teams involved. But it definitely takes some real intention, some real effort. mean, you describing getting everything into your CRM to build all those workflows. I would imagine that that was not just let’s click a couple buttons and move on. Like there was a real commitment to how is this gonna get built out and implemented.

Nick Maggiulli (21:07)
Yeah, and you have to have the people that are like, because I’m not a tax professional. I don’t know all the little things that need to be done. Okay, after the client signs this, then we need to send them this link to this portal, or I need to send them this, then this person needs like, someone needs to build out the what I’ll call the tax logic, like what’s the steps. And then from that, then I was the one that translated all that logic into actual things that the system was going to do. And you can hire a Salesforce developer to do that. If you understand how to do flows and stuff, it’s not too difficult. just, it’s if then statements, a lot of logic. if this is true, then do this. If this is true, do that. So most people can understand this like logically what’s happening. They just, know, you need to know where do I click in the system to do all this stuff and other CRMs as well. I’m not just trying to talk Salesforce. That’s just the one I know, but like that’s the whole idea is taking all this and integrating everything together.

Steven Jarvis, CPA (21:53)
Yeah, we use Zoho for our CRM, you’re absolutely right. It’s being willing to take the time to build out those blueprints, and so you can have all that logic and you can walk people through the process. I mean, you mentioned having people on your team that could help with the tax logic, but that is such a critical piece to it. If you’re gonna have this in-house, you have to have somebody who really understands how that tax piece works, because it’s a different business model, it’s a different process. And it’s one of the reasons that I so often recommend to advisors that they’re getting their hands on actual tax returns. If I could wave a magic wand, I would make every financial advisor prepare at least one tax return once in their life, even if it’s their own. In fact, if you’re listening to the podcast and you haven’t done that yet, geez, pay the 20 bucks to use TurboTax this next year, prepare your own tax return, don’t file it, still go back to your own CPA, but then you’ll really get a better understanding of what your client goes through, what your tax professionals you collaborate with go through. It’ll help you, help elevate the way you collaborate with other professionals.

Nick Maggiulli (22:45)
Yeah, I used to I’ve filed my taxes for many years I haven’t recently because now you know my firm does it but Yeah, I know exactly what that’s like going through that and you know mine was not that complex I mean the most complex thing I ever do is multi-state, but outside of that like yeah, it was pretty straightforward It’s gotten more complex in recent years with an LLC and now I’m K1 and there’s like a lot of other moving parts there

Steven Jarvis, CPA (23:04)
Yeah, it’s kind of that double-edged sword. mean, I definitely appreciate when my tax returns getting more complicated because it usually means growth and excitement and those kinds of things. But I’m a bit of a tax nerd, so I’m probably more OK with it than most people. Nick, tell us where we can find the book and then other ways that advisors can follow along with the great things that you’re doing.

Nick Maggiulli (23:20)
Yeah, so my book can be found on Amazon, everywhere else books are sold, and Barnes and Noble. This is the, I have a cover over here, so that’s the book there. Not much tax advice in there, if I’m being honest, but there is a lot of higher-level framework thinking about, like, it’s more like, okay, if I’m in this, you know, I’m in this level at SANS, I’ll just talk about one of the levels real quick. Level four, which is one to $10 million in net worth, right? So you take all your assets, minus all your liabilities, that’s your net worth. Let’s say you’re in the one to 10 million range. With lot of people that get in that range and they say like, hey, like what should I do? Like you’re not going to get past 10 million unless you own start your own business or something, or you have like an investment that 10 X is like, or maybe more than that. Right. So most people aren’t going to get out of that level without something else. And so then the question is like, do I even want to go for that level? That amount of wealth? Does that even matter? Does that make me happy? And then you can think about like, okay, well given I’m in this level, like Do I want to take a step back? Can I like kind of relax a little bit, coast fire? There’s a lot of different ideas out there and I kind of discuss a lot of those in the book. And so depending on where you are financially, every level is going have a kind of different strategy for you to think about and different trade-offs I would say as well.

Steven Jarvis, CPA (24:23)
Yeah, such great reminders in there. I love how you’re illustrating that framework. then I guess the tax piece I’ll tag on to that. And this might seem unnecessarily self-deprecating, but Nick, I would imagine you’d agree that no one ever got to the next level strictly through tax planning. Tax planning is valuable. It can help you hold on to more of what you’re doing, but it is not the magic way that people are moving up the ladders of wealth.

Nick Maggiulli (24:45)
Yeah, in general, yeah. mean, there’s probably someone, mean, maybe Peter Thiel putting his early PayPal shares into the IRA and then not having to pay tax on it or something, something like that. Outside of that, but even then, like, it wouldn’t have mattered. He’d be a billionaire, just how much of a billionaire he would have been, right?

Steven Jarvis, CPA (25:01)
Even then, I think the number that I saw is like five billion or something. So even if he had to pay 37% tax on that, he still would have been a billionaire because of the investment he made, because of the business he started, all those kinds of things. So tax planning is super valuable, but we can’t look at it, even though I’m the tax guy, we can’t look at it in this vacuum of, well, if I get tax planning right, everything else will be fine. No, taxes is one piece of the puzzle, not the puzzle itself.

Nick Maggiulli (25:24)
Yeah, but I do like to say that people should start paying for these services, especially as they get into higher wealth levels because of the cost of a mistake. mean, if every so often the six wealth levels, they’re all like they’re all 10X from each other. So level four is one to 10 million. Level three is 100,000 to one million, et cetera. So every level you go up, like the cost of mistake gets 10 times larger. Right. So like someone in level five, if you don’t have a tax person, that’s insane. Like you have over 10 million dollars, you don’t have a tax person. I would almost guarantee you’re leaving money on the table, right? And so if that’s true at the 10 million, it’s still true just maybe a little bit lesser extent in one to 10 and a little lesser extent 100,000 to a million, et cetera.

Steven Jarvis, CPA (25:59)
Yeah, yeah, that’s a great reminder there. Well, Nick, I appreciate you taking the time to come on and share your expertise and the great things that you’re doing. So for anyone listening, sure and check out Nick’s book and the great stuff that he’s doing. I follow him on LinkedIn. He puts out a lot of great content there. Anything else you want to make sure that we hit on Nick?

Nick Maggiulli (26:12)
Yeah, you can follow me on LinkedIn, follow me on Instagram if you ever want to. Send me a DM. I respond to every DM, by the way. So if you send me a DM and it’s not absolutely unhinged, I promise I will respond.

Steven Jarvis, CPA (26:22)
That’s awesome. Good for you. Well, Nick, again, thanks for being here. Really appreciate it. And to everyone listening, until next time, good luck out there, and remember to tip your server, not the IRS.