Episode 5: Interview With Student Loan Advisor Rob Bertman

There are 40 million people currently carrying student loan debt and about 3 million have six figures of student loan debt. Rob is one of our senior consultants who is a Charted Financial Analyst (CFA) and a Certified Financial Planner (CFP). He has done over 400 consults for Student Loan Planner® and specializes in helping people who have student loan balances between $200,000-$400,000.

After meeting me at the Cortex Innovation Community in St. Louis and listening to a few of my consultations, Rob knew he wanted to join the team. After graduating college in 2001 and working a few jobs including one he worked at for 12 years, Rob knew his real passion was helping people find more money in their budget that they won’t miss. Rob began his career with Student Loan Planner® in the Fall of 2017 when I started getting too busy with consultations and trying to produce articles for the website as well.

Rob has been an amazing addition to the team and friend, so I was super excited to interview him on the podcast this week.

In today’s episode, you'll find out:

• What type of careers Rob had before he joined SLP
• How starting his own business went
• How having a supportive spouse was beneficial when pursuing a new career
• How it's possible to raise a family and pay off your student loan debt
• His take on whether financial services should be free or come with a fee
• What he enjoys about working for Student Loan Planner®

Links Mentioned:

• Student Loan Planner® podcast episodes
• Help with student loans

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Rob Bertman: You could just hear the relief in people's voices knowing that they had a solid plan in place that they'd run through the numbers. You were so good at explaining not only why the plan makes sense but how to go and implement it. The price to me is extremely affordable. And so I thought this is something now. I want to be a part of I want to be a part of working with Travis and I want to be a part of helping this massive problem that we have out there.

Episode 5 Transcript

Travis Hornsby: Hello. and welcome to the Student Loan Planner® podcast.

Travis: I'm your host Travis Hornsby founder of Student Loan Planner®, and today I have one of the most critical people on the face of Student Loan Planer Rob Berman one of our consultants.

Travis: How Are you doing today Rob?

Rob: Good. That's quite the intro.

Travis: I know I said one of our consultants I meant to say Senior Head of Global Consulting for Student Loan Planner®.

Rob: That's better. I like that better.

Travis: What are the Goldman Sachs like titles? You know like Senior Head of Derivatives for the Asia Pacific or something right? Yeah, I'm just kidding.

Travis: So Rob how many consults have you done for us now Rob?

Rob: I've done close to 400.

Travis: OK. Golly that's a lot.

Travis: How much debt is that?

Rob: It's about 70 million.

Travis: That's almost like real money dude.

Rob: Pretty close

Background Story

Travis: So Rob is a CFA Chartered Financial Analyst, and a certified financial planner. So you have both of the designations that matter. I guess the only other one that would be great to have a like a CPA. But that's like crazy to have two of those. I only have one I only have the Chartered Financial Analyst designation so when I found out that Rob had both I was like shoot we need to get him on the team.

Travis: So Rob maybe you could just tell people. Tell us a little about yourself. Before we met and just what your life was like up until like 2016.

Rob: Yes sure. Life has been OK.

Rob: I graduated from college, I'm the senior member in more ways than just one I'm 39 which makes me the oldest person on the team probably. So I graduated from college back in 2001 and I always wanted to be a portfolio manager and I run a fund a stock fund and so I did everything I could in my power to make that happen and so I got my CFA. I worked starting at Scudder investments at a mutual fund company helping advisors find and pick the right funds for their clients.

Rob: That was in Chicago and then I moved to New York for a few years and did equity trading and sort of a way to get to know that side of the business. But the goal was always to go into investment and securities analysis. And so you know in 2005 0r 2006 I moved to St. Louis and started working pretty much the dream job I thought it would always be. I came in as a research analyst, moved up to senior analyst, got an ownership stake in the company, was involved in all sorts of things, we grew the firm at the time we were a smaller firm and then we grew it up quite substantially. Thought I'd be there forever working with great people helping out great clients and everything like that. So I did that job for about 12 years.

Rob: In the 11th year my wife and I usually after the kids go to bed we have three kids we usually come down to the kitchen and kind of recap after the kids go to bed. How is your day? You know what's going on in life.

Career Change

Rob: I remember one day we're having our ice cream which is a good treat for us. If you were sitting there in our kitchen talking to us you know you would have seen this look on my face like I just kind of felt lost and my wife is very practical. She definitely keeps me very well grounded and I remember it took me a while to get the courage to tell her what I was about to tell her.

Rob: Finally as like Anna I'm thinking about leaving my job and starting my own business. The look on her face I was expecting it to be like There's no way you're starting your own business. We have three kids we need a stable income. I'm actually at the time we only had two but stil,l you know we need a steady income like you know my job is going well I love my job but we need a dual income here.

Rob: What she ended up saying really surprised me. She said well I could tell I could tell you're ready to move on. I was like What how long have you known? And She said Well I've known for about three months now. How did you know that? I didn't even know that she's I know I could I could just tell you're doing a good job your heart was in it you love this job you love the people you love the clients but it just doesn't seem like that's where your mind and heart is right now. Yeah. So then she said Tell me about what you want to do?

Help People With Their Budgets

Rob: I told her I want to help people with their budgets because I feel like making money is a different skill set than keeping money and saving it. And so I started a business to help people save more money, find more money in their budget that they won't miss.

Rob: I started doing consulting with that and then before we met or maybe when we met Travis I was just started noticing and all this is going to be great I'm going to grow this business I want to make even more maybe twice more when to help more people it's gonna be great. And of course, you know the opposite happened where it was like a total flop in the first year.

Meeting Travis

Rob: Having trouble finding my way, having to face my wife, and say hey you know sorry I'm not even close to where I thought I would be. And I felt all disappointed and again to my shock she's like oh no you're exactly where I thought you would be. I mean you know you're into a business like this thing is kind of tough.

So you know it takes a while. Like I understood that you didn't know that Rob. I have a great wife. But anyway so then things started to pick up a little bit for me and then we connected down at cortex in St. Louis which is like this big tech and innovation hub here and then that's when I started to learn about student loans and the kind of help that people needed and the big problems out there and the struggles just to find the right information to help people save the most money paying these things back.

Travis: Yeah I mean I think that if you're trying to start your business as a listener you know one of the most important things is to have some sort of barrier to entry and to have some sort of pain point that you're solving. So for a health care practitioner, it's a little bit more straightforward. I think Rob right.

Travis: Because you have you know you have your degree and only people that have that degree can practice that particular field. So you have a little bit of protection from competition there at least. And then you know your pain point you're solving as you know somebody has an illness or somebody needs to be replaced because they just get hit in the mouth of the baseball then that's a pain point that you're obviously solving.

Travis: So it's a little bit more straightforward. But when you're trying to solve a problem in the financial world you know a lot of people who are having trouble with managing their money don't necessarily have an easy time paying for that help either. Right?

Rob: Right.

Travis: So that can be kind of tough. I think that I kind of got lucky because we're both working on similar things like helping people with their money without charging them an arm and a leg to do so. And I just kind of lucked out that I guess that you know that the pain was all the more obvious. I think with the student loans what do you think. Probably a lot of the times the people that you run into with the credit card debt like they don't even know necessarily how bad they have it.

Rob: Right. And I didn't really know anything about student loans I mean I knew there was a big issue and I'm a finance guy. And as I saw you starting to grow your business and helping more and more people and being able to connect in really the life-changing stuff that can happen in such a short amount of time you know in just an hour concept within the follow-ups you know and then I started listening in on calls with you and you know you can really see the pain and sometimes the pain isn't necessarily like oh my gosh my student loan payment is so huge I don't know how I'm going to afford it but a lot of it's just they don't have the clarity around what exactly to do.

Rob: Once they have a clear path and they know what to follow and they know what's going to look like when I saw that you help people that way. That's something that I thought was missing in my business I was a little bit too much of a generalist and not able to find how to tell people like hey I have a solution that can help you. And I know it works. And this is going to transform your life.

Rob: As you said I couldn't really articulate it in a way that resonated with them as well as you've been able to do with student loans.

Travis: I think that so for people that don't know basically Rob has this really amazing skill set of being able to identify how to cut at least $600 a month out of your budget and for you to not miss it right. Is that kind of basically what it is Rob?

Rob: Yeah exactly. I'm a big believer that budgeting doesn't work for most people and for anyone who's married. Budgeting definitely doesn't work for both. Which means it doesn't work for the couple. And so the question is if traditional budgeting methods don't work then what's the alternative?

Rob: Because what comes in and what goes out in terms of money is probably the highest predictor of wealth above and beyond the investment decisions that are made. It's more about how much comes in and how much you keep versus how much you spend. I think it's like three-quarters of wealth is explained by just that part of the equation. So and I've been helping people on the investment side but I thought this would be much more meaningful.

Travis: Yes so, in other words, one of the things that we do when we're doing a student loan consult is we try to make sure that your student loan plan is in place and it's really solid and it's amazing. But also we don't want you to bleed out on the table because you have another obvious money problem that's presenting itself that people aren't addressing.

Probably the most common ones that I've seen are people who have cars that are not paid for is one and then houses that are more than two times people's joint incomes as the other one at least for me. I'm wondering what kind of financial problems have you seen for our clients outside of their student loans?

Rob: Yeah. To me, it just seems more of a little bit of wandering around not as much clarity on what they want to do or what the purposes and with student loans that's the big elephant in the room right.

I mean most people that's their biggest thing that's the biggest thing. Or maybe they've got just got married and bought a house and trying to make it work with a family and getting it along with their spouse. We're also obviously a big pain point is when people have kids and just when you thought money was tight it gets even tighter.

Children

Travis: How much does it cost per kid?

Rob: Well I was actually just looking at this the Economic Policy Institute has a really great calculator and regardless of where you live like whether you live in New York San Francisco or you live in St. Louis, or Canton Ohio or something like that the average family and household ends up spending about 40%more when they have their first kid than what they were currently spending.

Travis: 40%?

Rob: 40%.

Travis: Wow.

3'Ds of Parenting

Rob: And some of that comes from buying a bigger house bigger car. You know we get kind of into the bigger mentality and I we need more space we just don't have enough bedrooms we need the safest car and also daycare obviously. What I call it the three D's of parenting daycare, diapers, and doctor bills. Those things really eat into the budget and especially if you have a dual income household which my wife and I do.

You got to pay for daycare, you know especially if you want to pay for high-quality daycare. It's not glorified babysitting they're actually learning and developing their brains and growing socially and emotionally then you know it cost over a $1,000 a month and that's just for that. And if you live in New York it costs maybe like $2,0000 a month.

Travis: Wow.

Rob: They can get pretty expensive but they don't they don't have to be that expensive. And my wife and I figured this out after our third kid we're actually spending less with three kids than we did after having our first kid. So we've we've kind of figured it out we're not missing anything in life and that's kind of where I've applied the budgeting technique to our old life and gotten those kind of results. But yeah it's expensive.

Budgeting

Travis: I think that the keep cut back eliminate method for budgeting or not non-budgeting is really cool. Basically, you showed me how you kind of organize people's finances make people rank what's important to them, most important, to least important when you try to eliminate a lot of the stuff that does not fall very high on that list of priorities.

Travis: Then the cut back part. You're talking about OK maybe you know instead of going out to eat as much as we're going now maybe we cut back like spending by going to a little bit cheaper restaurant or maybe we got fewer times like we still do it. We don't do it quite as much.

And so we're we're not eliminating this part of our life. We're just downsizing a little bit. And then the key part is the stuff that's at the very top most important spectrum. So like you know maybe somebodies car is their most important thing, or maybe their children's private school tuition is the most important thing, or maybe they're a vacation with the family to ski every year, is their most important thing. So that actually you keep. You do not cut at all because of the high priority you place on in your life.

Rob: Yeah right so the budgeting technique I use It's called keep, cutback, and eliminate just like Travis said and it works really well especially for couples who don't see eye to eye with their mindset.

Keep Category

Rob: Because in the keep category you know we all have things that we enjoy and love doing and that we really don't want to give up no matter what. Like these are things that are really important to us. But if we're married typically our spouse has something that drives us crazy when they spend money on it and vice versa like we spend some money on something and it drives them crazy. So when we're working with couples what we say is they're really three categories of keep it's keep.

For me, it's a keeper for Anna. And then it's a keep for us as a family. And so if we can separate out those three categories and there's no veto power with the keeps of Anna came to me and said well I really like spending money on I really want a new pair of shoes a pair of frothy shoes or something like that I may not understand it like I'm a sneakers and sweat pants kind of a guy and a jeans kind of guy.

Rob: But if that's what she wants then that has the same emotional satisfaction as something like riding roller coasters for me which is kind of a childish thing. But I love it. You're going to see movies or something like that. And she doesn't like movies and I don't really care about shoes. But nonetheless, we both get to keep those in our budget because that's what's important to us as individuals. And then the cutback it's the experiences that we like doing together.

But you can do it for lower price, so maybe ordering one less appetizer, one less drink, but still having the same experience and eliminate our things that you look back and you feel guilty, on or sometimes people forget what they spent their money on, or they forget about monthly charges and it's about going through and canceling those.

Rob: So once we get agreement and the keep category it kind of disarms the natural arguments that happen and then we can move on. It kind of be like OK I like chocolate ice cream, my wife likes peppermint ice cream OK. I think peppermint ice cream to me it tastes like eating toothpaste. I don't understand why in the world anyone would love it but I know people love it.

Rob: Some people might say oh chocolate's just boring right. But when we go out to ice cream together she orders her peppermint I order my chocolate even though I have absolutely no idea why anyone could like peppermint ice cream because I don't like it. I don't say Oh you're wasting our money how could you even think about buying peppermint ice cream. I don't understand why you're spending that three or four dollars on that flavor of ice cream it's. I just don't get it.

Rob: They'll be like us arguing about that. But she's like, I like it. It's what I like. So once we can remove that kind of argument then couples tend to work together as to on their budgeting to cut back and eliminate together.

Sharpening

Travis: Yeah. And we first met. That was part of the sharpening that we came up with when we were having just conversations in the kitchen in front of the coffee machine. About like how to sharpen your business and then I started sending clients to you to get help especially if they were having marital conflict over money. Because I saw how effective that was to have you know a CFP, CFA person boiled down what the problems were financially in the relationship and try to get over that hump of disagreement. And really what I was very impressed that you literally saved a couple of marriages the people that we sent to you.

Travis: Then I thought well this guy does such a good job and so passionate about helping people. And the money you know in terms of your revenue is not really the most important thing it's really the purpose that you were exhibiting. And so I was like well this makes a lot of sense to try to get you to join our team with Student Loan Planner®.

Travis: So I remember back in the day I had one day where I almost just broke down because I had like 10 consults in a row and this was back in the day is when I was charging like 5 for like all the consoles you know regardless of the debt amount.

Early Years of SLP

Travis: The demand was very very high because people have a lot of problems with their student loan debt. So it was just me and I was just like well I don't have any time to write articles anymore because I'm just doing so many consults I only published like one article in the past two weeks at the time it was like This is not sustainable. I can continue raising my prices and slow down the demand.

But if I keep doing that then at some point you know a lot of people are not going to be able to access our services. So I thought a lot about adding somebody in general around that time. I think it was around the fall of 2017 I think yeah. Then I thought well you know I've always been impressed with you Rob so I was like I need to think about how I can get him on the team.

Travis: So I pitched this idea with basically allow you to keep doing your business doing the budget stuff but also the integral part of our team to basically have a full-time job that way. So that took the pressure off of you showing that the revenue from what you were doing. So I guess that's from my perspective. I love the fact that you had a passion for helping people that money was not your driver.

It was the results like both of us come from trading backgrounds where you know I was on track to make a lot of money as a trader. Portfolio manager one day, and bond trading and you were already I think making a massive amount of money doing equity trading and making rich people richer is not the most fun thing in the world. Transforming somebody's life is super rewarding it makes you feel like you have a purpose. So maybe you could tell readers a little bit about why you wanted to join the Student Loan Planner® team and do consults for us.

Rob: Yeah I mean I was always impressed with you too. I mean I could tell that you're passionate about it you're extremely well researched I mean you knew your stuff and here I am. You know I have some advanced financial degrees I've done a ton of business analysis and securities analysis and I was thinking looking at it from a numbers perspective like oh well you just you know a high-interest rate that you just refinance it and pay it off as quickly as you can.

Rob: But as I learned more and more what you were doing in the different programs available and you were such a great teacher to me and bringing me along I realized not only the significance of this problem. There's like 40 million people out there with student loan debt and there's almost 3 million with six-figure student loan debt. Those are huge numbers. And these people really need to help.

Rob: I knew that working with you someone who's passionate, someone who's well researched knows the business knows how to treat their customers like gold, and also run a successful business and learn how to grow it and just the fact that you asked me I was really honored that you asked me So then, just starting the journey was great. I mean my own business I'm still able to run it also at the same time because I have that flexibility.

But at the same time I mean there are weeks where I can help out 15 to 20 people with student loan concepts and really transform their lives and help them feel great not only about their school loan situation but normally in the calls too there's time for that you add you know we can cover you know if they're having kids, or they're getting married, trying to combine finances, or just looking for other general financial guidance and other areas of their life that we have that time to do that also. So we can help them not only get the student loan plan in place but also provide additional value on top of that with their other financial questions out there.

Rob: It just sounded really appealing and then when I listen in on calls with you I was really impressed and you could just hear the relief in people's voices knowing that they had a solid plan in place that they run through the numbers. You were so good at explaining not only why the plan makes sense but how to go and implement it and the price to me is like extremely affordable. And so I thought this is something now I want to be a part of and be a part of working with Travis and I want to be a part of helping this massive problem that we have out there.

Bad Financial Advisors

Travis: I'm going to go on a little bit of a rant. I think that there are too many financial advisers out there that are just clipping their monthly retainer checks or getting their fees and just not adding very much value at all. I would rather make one-tenth as much money and have ten times the impact than the reverse.

There is a lot of people out there and I'm sure you've seen this too in the financial planning industry where you know they find somebody that's willing to pay you do the job for them so it's not like you're not doing it at all and you are maintaining the financial plan everything but you might charge people are getting charged like $10,000, $20,000, $30,000 dollars in some cases per year for financial planning services.

Travis: If the service is really good. Well at least it's good and you're paying for quality. But I don't know. I mean to do something about just the absolute price of financial advice just really turns me off. I just think that it should be more accessible it shouldn't be free because if it's free you're not going to actually take it seriously. That's one thing that I've found is you know free advice is actually some of the costliest advice because you don't actually implement anything so you do need to feel a little bit of pain to feel like this is something that's worth investing in.

Travis: But I think that people out there that are charging you know your your two or three percent wrap accounts or you know your sales based financial advisory relationships or people that want to sell you a whole life insurance or sell you a variable annuity is or something like it's just garbage and it just really kind of pisses me off and that's one of the reasons I wanted to do Student Loan Planner®.

Travis: To be real honest with folks like the regulations on the financial advice industry are very intense right. So you were formerly running a lot of that compliance stuff for an advisory firm and I was really kind of turned off by just how many hoops she had to jump through to tell people what was really an obvious answer.

And so we can't talk specifically about investments like we can't recommend any specific investment products because of not wanting to register as an investment adviser because it's just to me like if you can go to Vanguard and do it yourself or if you can go to a digital advice company and get it done for you for like 0.25% a year. That to me is insane value.

Bad Advisor

Travis: What am I going to add necessarily by starting another investment advisory firm when the student loan problem is a $1.5 trillion problem. So it just irks me that folks out there are charged the price for value but done in delivering the value. And a lot of cases now there's a lot of advisors out there that do a great job that are worth every penny and then some.

And this is not a message directed at them but like one example I had an orthopedic surgeon on Facebook. Married to another professional and he's making a lot of money and he's probably got five years of credit towards PSLF and he's going he is attending jobs are going to be at a not for profit hospital and the financial planner told him to pay it down in two years.

Travis: Well the financial planner didn't realize that with his $300,000 of loan debt. He can cap out his payments on the standard 10-year plan and pay $3,0000 a month. Even though he's making like four or five hundred some thousand and you get projected loan forgiveness of like a $152,000 something like that.

Right. And so here's this adviser who's giving bad advice who is probably sitting at a mahogany desk with fancy leather seats for the chairs. You know we've got all the trappings of a successful advisor right to make you feel super confident in their advice. But the person just gave the orthopedic surgeon a hundred to two hundred thousand dollar mistake thing to do right by word.

Rob: Right just from my perspective too I mean I know a ton of financial advisors and there's plenty of good ones out there like you said and from my perspective, I was totally oblivious to it. I just thought that's what you do. I mean just pay it off as quickly as you can and if you can't then you kind of draw it out as long as you can. But the goal is to increase in income you know you take that extra increase in income and throw it at the loans to pay it off. There are two different things driving there. One is that advisors typically they want to manage investments and assets so they would rather typically have people who would invest rather than pay back debt if that's a prudent thing to do. And then the other thing is just that this stuff is so complicated.

Rob: Unfortunately I had you to train me over many months and then also sit on calls with you and then sit with me on my very first calls to make sure that I fully understood it. I'd like totally blew my mind. This whole how to approach student loans. I mean I I was totally oblivious and I'm a numbers person and I can do this stuff. A lot of the stuff in my sleep but student loans is a totally different animal now from the paying perspective it's sort of you know paying financial advisors the fee you know the budget guy right.

Rob: So I'd rather see people have a transaction without a recurring trailer to get the initial advice to implement it and then once they implement it if they still feel that they need help then come back and do some sort of recurring expense model. But a lot of times people will just sign up for something that has a recurring revenue and they never use it. And those are the things I usually end up going through and helping people cancel in the Budget consult

Rob: So that's what I think is so great about you know let's just get people to plan. The fee needs to be enough that they feel it and that they are gonna take the action and the advice and go do something with it and save tens of thousands and in a lot of cases hundreds of thousands of dollars paying back their loans if they want more help. And if they want to be on the right track that's when sort of a more recurring fee can come into play you know when they're much more engaged and they want that help on an ongoing basis.

Another Bad Advisor

Travis: Yeah. Yeah. And two examples of the people that call themselves financial advisors that just really made me angry when I was first starting to do this. So I had a veterinarian. She had only about one hundred fifty thousand dollars of loans she's making about a $120,000 a year. So she was in a pretty good situation.

And you know she could get some interest subsidies and beginning of her career but long term the right thing to do is to refinance but that hundred fifty thousand and grown a little bit. I think about two hundred thousand because she met this guy who wanted to sell her whole life insurance and she had 8% student loan debt and he sold her a whole life insurance policy and sold it to her as an investment.

Travis: The projected return I think in his whole life policy was like 4 or 5 percent and then he had sent her another email and she said what prompted her to reach out was that he came back to her and suggested that she buy another whole life insurance policy a couple of years later and for listeners I don't know like you know you get about I think it's on average 100% of the first year premiums as for selling a whole life insurance policy as your commission. And then 80% of the second year. Right. Exactly right. So so basically this guy had like gone to the watering hole got his money and then he was coming back for some more money.

Travis: Even if you don't understand student loans it's obvious that if you have 8% debt and you have projected returns of 4 or 5% with a whole life policy and this person did even have dependents you didn't even have anybody she had was trying to protect for the life insurance part of things. So this guy was basically doing this just to rip her off like he just didn't care at all.

Travis: I sent him an email I just got so upset that this guy would even think of himself as a financial professional that I just sent him an email and I just said I think what you're doing is disgraceful. And just so you know like you don't do this to anybody else you know if somebody has this kind of one balance do not sell them a whole life insurance policy or I will encourage them to contact the regulatory authorities for your profession and report you. And obviously, he was like Oh I've been doing this for 30 years how dare you say that I don't do things in my client's best interest. And I'm like You know I just I'm just like shut up. This guy just cares about money.

Travis: That's that's what he's about. You know he's not passionate about anything. He's probably passionate about what kind of car he drives or what kind of house he loves enter that you know vacations he can take with his family. Good for him. I don't have time for people like that. You know I don't know.

I mean I just got really upset about that one and another one. There was another person who I think she was like another professional she had like a hundred thousand dollar inheritance instead of putting that down on the student loan debt. And at that point, she would've had like forty thousand left to go. She'd put all the money up front under student loan debt instead.

Travis: This this financial quote unquote financial advisor told her to put all the money with the class a mutual fund shares which are loaded mutual funds that carry like a 5.75% commission for the adviser upfront. And so this person got like close to I think like a six thousand dollar commission for a very short conversation. And she could have saved tons of money on her seal on interest instead.

And what happened was you know she put her into these high fee funds and these funds went down in value like 10 or 15%. And so she was like negative $30,000 compared to what she would have been if she had just put the money into her student loans. That piece of advice for that $,6,0000 payday for the adviser. That's what happened when I explained it to her about why the advisor told her to put the money into the investments instead of the debt. Because she gets the payday.

Travis: This person was really shocked and like she's like I'm a health care practitioner. I would never do that to one of my patients like Are you kidding? Like you know I would give somebody advice and makes me money instead of like what's best for the patient. That would be terrible.

Travis: You know but financial professionals do it all the time.

All About Culture

Rob: Right. I mean it's all about culture. I mean there are some firms and advisers have the culture of helping the client to the best of their ability keeping the fees as low as possible I mean there is a cost of doing business and helping people but then there's a ton of excess and you know sometimes a lot of financial advisers.

Rob: Number one there's a very low barrier to entry to become a financial advisor. You have to pass a series 7 which you can pass within 90 days if not sooner for most people. And then you can practice a lot of these people they don't know what they're doing they're just trying to raise capital and build their practice rather than treating people the right way and their clients the right way.

Rob: Life insurance they are not even regulated by the same standards as financial advisers are they're operated they have like a totally different standard. And with a whole life to I mean, a number one follow the money right. If you know that someone's going to make 150% over the first two years of whatever your annual premium is then they're going to have to be incentivized even if they're the best people in the world they're gonna be incentivized to do that. So that's that's number one. Number two is that this whole cash value thing is a total sham because I'm not gonna go into too much detail but you know the cash value is supposed to grow.

Rob: I've seen a ton of whole life policies where after 10 years the cash value is less than what their premiums were a lot less than what their premiums were, in other words, like let's say that someone put in $20,000 over a ten year period into whole life their cash values are like $12,0000. So they lost $8,0000 and then let's say that it ever does get above what they put in. Well, they have to take out anything above what they put in.

They take it out as a loan for like 7 or 8%. So it's no different than going to the bank depositing $10,000 in the bank. And then if you need extra money you would say Hey can I get a line of credit for 6 or 7 or 8%. Now that's the same thing that cash value is there's the investment return is like a total sham. You take it out you have to pay taxes if you cancel the policy and if you take it out without canceling the policy at to pay interest on it it's a total sham.

SLP Passion for Good Service

Travis: Well yes. People call it the payday loan of the middle class. But right now we could do a whole podcast episode on that maybe we will but since we're not your financial advisor I'll just say if you do want to find your own financial adviser make sure that they are a fee-only fiduciary fiduciary is that key operative word you want to get that in writing that there are a fiduciary for your interests and they have to sign that and if they do that you're probably going to be OK. You're probably not going to get taken to the cleaners.

That's a big piece of free advice there. So moving the conversation on a little bit more to what we would do with this to the long piece of things. I just wanted people to know how passionate you and I are about getting people good value for what they're paying and making sure people are taking care of and treated the right way.

Travis: That's very important to us. And that's just something that I'm very passionate about and I just hopefully because there are so many scams in the student loan space there's so many people making up all these things that sound too good to be true and promising these things that they should be promising we are operating on uncertainty we can't know a lot of things about this deal on space but what we can't know is there are probabilities and if we have a 90% probability of certain outcome happening like public service loan forgiveness.

Travis: Then you have to prepare for that and the best way possible and prepare for the downside risk by having a side account you're putting into an investment account that you could pay into your bonds if you had to. Right. So so we talked a little bit about how you transform people's lives sometimes within our conversation Rob. Do you have any specific examples for conversations you might have had recently where people's eyes were totally opened with what they were doing with their finances?

Rob: Oh yeah so many it's hard to pick one. Well, I would say that let me think about that.

Client Conversations

Travis: I have one. If you need some time to think there was this couple that the husband was in default on his loans are about to be in default and the spouse. The wife was a physician together had about $500,000 student loans. She was filing taxes separately because she thought that was the smart thing to do. And she was also on income-based repayment which is like 15% of your income.

So they were doing the wrong tax filing status costing them probably about $5,000 year and she was on the wrong repayment plan where she was paying about $6,000 a year more than she would have had to pay on the revised pay as you earn in this case. She also could have included her husband's loans into that payment on the revised pay as you earn as well.

Travis: So based off of the math in this case they were able to lower their student loan payment by $6,000 a year cut their tax bill by like about $5,000 or so a year and then on top of that. It just so happened Rob that the husband had FFEL loans that were not set up for public service loan forgiveness but he was in a not for profit job full time. So also he was able to get his loans consolidated and put on to PSLF under the right repayment program. So that loan forgiveness projected for him was like a couple hundred thousand dollars.

Travis: So it's like well we fixed an $11,000 a year mistake on a recurring basis. You know in terms of pointing out that this is something you probably should be doing. And then on top of that showed them how hey if you do PSLF and this works out the way we expect it to. This is $200,000 that you're expected to be forgiven that you thought you had to pay. And then also his credit was in the trash right out in the dump.

Travis: So now that he's no longer in default his credit now is on the slow path to getting better.

Rob: Yeah that's great.

Travis: So that's like $200,000 in savings you know in 10 years on top of like $11,000 in savings every year. So most of our calls are not like that. Right. I wish they were but like probably nine out of 10 calls I'd say I'm no way your stats are. But like for me about nine out of 10 of my calls I show somebody something they just haven't thought about before that you know if you projected under the loan rules that exist today is something that could probably save them at least five figures which is a multiple of what a consulting fee is.

Travis: So one of the 10 people out there we kind of confirm that they're doing everything the right way so I look at the consult. There's more of an insurance policy rather than paying for specific results because that is in the consumer's best interest I believe like you and I could charge a contingency fee where it's like a percentage of the savings that we find. That's what attorneys do for lawsuits right.

They take 8% of the lawsuit. But the savings that we find are projected over 20 to 25 years. It's not necessarily savings. It's all upfront. And then also I believe that people should be able to get honest professional advice for a transparent flat fee. Yeah, that's kind of just one of my passions that I have. And so that's why we kind of have it set up the way we do you know instead of having it where it's a percentage.

Rob: Right. I mean I've had a few of the sort of confirmation calls making sure I'm on the right track and it's worth it to pay. They found that it was worth it to pay for the console so that they could stay on the plan and not make any changes or and if they heard any other advice they know the numbers behind it they know this is the right path and instead of doing things the wrong way we're talking like tens of thousands or maybe even hundreds of thousands of dollars of mistakes. And so to just confirm that they're on the right path I've had a lot of people get a lot of relief from that.

Feel-Good Consult Story

Rob: I thought of an example and this is a little bit different than saving money but it's sort of I think one of the beauties of the consults too is talking one on one with people rather than just looking at the numbers is that we can really get a feel for what they want out of life you know not only in terms of their career goals but also their life and family goals and stuff like that and how to have the student loan plan fit within the context of what they want to accomplish.

Rob: So, for example, I was talking with an attorney. She was working for a nonprofit and she just did not at all of the work she had about $220,000 in student loans and she was making about $80,000 and going for PSLF. The only reason that she was doing it she had just been on it for less than a year on the PSLF track for less than a year had another nine years to go. But the only reason she was doing that is because she thought that she would be able to save a ton of money doing that. But she wasn't taking into account the extra money she can make doing the job that she loves that it can more than compensate for giving up the PSLF benefit.

Rob: So we talked about what her income looks like in her current job versus in private practice. And she'd be making $150,000 a year doing that in the PSLF benefit. Kind of goes away because she's making more money. So she was able to feel better about getting out of this job that she does not like because she felt like she had to work on it for her student loans so that she can make a ton more money more than enough to compensate giving up the PSLF benefit and just refinance and pay off the debt as quickly as possible.

Rob: So that's sort of like a I hate your life for 10 years or do what you can have your loans paid off in three years and do what you love from an income standpoint. She is in a much stronger position and much better off as a result of having the console and giving up PSLF. That was kind of an unusual circumstance. The lifestyle is really important.

Travis: Have you had a case for somebody feels like they can't have kids and that still ones prevent them from doing that but you show them how thinking about it in a different way makes that possible.

Rob: Yeah. I think the hardest thing for people to understand is why I shouldn't say the hardest thing for people to understand but something that's hard to wrap their head around is that these numbers are so big when we're dealing with six-figure student debt the numbers just seem so insurmountable that they feel like this is the only thing that they can do.

Rob: They don't want to have kids because they know it's going to be expensive just like we talked about earlier right. And I know from experience having three and outright that they're not cheap but there are ways to make it work and it's all a matter of prioritizing what that looks like. And so when we talk about starting a family but or putting it off because of loans to me it's kind of a sad situation.

So we talk through know would you rather have kids or would you rather we have to sort of like re-contextualize having kids versus what else they're doing with their money because like from my personal experience having kids there's so much love and much more purpose in life. But at the same time energy and money become a lot more scarce.

Rob: So there's that tradeoff and it's helping people kind of understand that they can do it and sometimes they're on the 10-year standard plan or maybe they have private loans that they feel like they need to pay those off. And it's gonna take them forever and just prioritizing either getting rid of the debt quickly so that when they have kids they don't worry about it or being on a payment plan that they didn't realize how low the payments could be and that they could actually afford to have both. There's a lot of transformation there for sure.

Last Comments on Consults

Travis: Yeah and a lot of things that we'll do in the value added section at the end of the last 15 minutes of a consult will usually be Hey did you know that you can buy a car on Craigslist for $5,0000 and get rid of your $400 a month Car lease you know.

Travis: Did you know that you could house hack your situation and consider buying a duplex and living at one half renting out the other or taking so that positive equity that you have with your home because you locked out you bought in California at the right time and take that capital gain free return then downsizing potentially and finding a place that fits more of your you know your budget if you want to achieve all the things that you want to achieve or have you ever consider renting instead of buying. I have a ton of those conversations like if you're inS.F. like maybe renting a house for three thousand dollars is a better decision than buying a house for a million and you know you talk through that math and help them realize hey this is like actually, an option is legitimate.

Rob: Yeah. A lot of people feel like they have to increase their lifestyle or not increase your life to have a buy bigger house bigger car when they have kids. But with the first kid, I think it's really important to stay put stay put in the house stay put with a car almost any car unless it's a couple you know or like one of the smart cars or whatever can fit a baby seat in the back. It's about the change in lifestyle. Getting used to that before deciding to spend extra hundreds of thousands of dollars on a bigger house or tens of thousands on a new car because a lot of times we don't look at the big numbers that we're going to be spending we look at the monthly payment.

Rob: But if you take the actual cost of buying these things and we can forego that while they kind of figure out the student loan planner get that underway first. So at the end of the calls maybe two more succinctly it's your question. Once people have a really solid understanding of what their loan repayment looks like what's going to be best for them then they feel like Oh we could have kids. Now this isn't a problem these payments are going to help us do that. We just have to save up for the tech bomb and we can totally do this a lot of times there's just that uncertainty or lack of clarity that when they see the numbers they can actually do it.

Travis: Yeah. It's about clarity and having a plan to know so that when Great Lakes or no matter Fed loan or somebody maybe it gives you bad information on the call you actually know when to push back and tell them hey actually that's not correct. I want to talk to a supervisor because you just give me bad information that's only possible if you have the confidence knowing and understanding these plans very deeply so that we do have that moment where they give you that information that doesn't go unchecked and that you actually make sure that that mistake is corrected.

Travis: You know there's all kinds of mistakes where they double count people's incomes or they don't put people onto the right payment program or they don't take into account your adjusted gross income correctly and unless you understand the math and the why behind all those two to one stuff that you're doing then you're probably gonna mess that up. So we're coming close on time because you actually have a console in like five minutes or so.

Who Does What

Travis: So basically Rob you're in that $200,000 to $400,000 student loan debt range. That's the folks that you primarily work with. Right. I guess a lot of people in the veteran dental world but also medical space people that are probably chiropractors attorneys you probably see a lot of it. So if you're interested in getting a plan and you know that you want to do that then you can go to studentloanplanner.com/c/book to schedule a time.

Travis: So Rob is going to be that $200,000 to $400,000 debt amount. Justin and Lauren are the zero to $200,000 and I'm above $400,000 household debts. So you just pick what category you fall into. The most important thing to do is to get a plan. If you do it on your own fine. If you hire us. We love to make one for you but don't stick your head in the sand and do nothing. I heard a new excuse on why they needed the car payment the other day Rob somebody said that. Well, motorcycles don't come with baby seats. But no matter what you're going through like we can figure it out I don't think we've run into anybody yet. That's beyond help.

Rob: Right, and that's the beauty of the team in the six months of email support after the fact is that if there is a question we can answer pretty much every question. But if there is a question that we can't we have a whole team now that you put into place that we can talk through we can do research you have other resources in the legal area of student loans and if you know other areas that we can rely on and get you the answers that you're looking for in the six months of e-mail support helps so that when you're implementing the plan if you get some misinformation from Fed loan about PSLF for example that you can say hey Fed loan told me this is this right Rob and I can say either. Usually, it's no but. Exactly. But it's nice to have someone run it not only get the plan in place get the clarity to save the most money but then also have someone there by your side as you're implementing the steps to bounce the ideas and questions and off of you after the fact.

Thanks for Listening

Travis: Right. Right. Well, Rob thanks so much for coming on the show. If you have questions or comments or you have ideas for a podcast episode or just want help contact us at podcast@studentloanplanner.com And if you are interested in learning more about our consult service go to studentloanplanner.com/help. Thanks, Rob for being on the show and go crush it with this next consult and save them some money.

Rob: OK will do. Thanks.

Travis: Thanks for listening for today's show. If you're ready to schedule your custom student loan plan visit studentloanplanner.com/c/book and pick a time that works for you. The show notes are available at studentloanplanner.com/ the number of Today's episode. Finally, if you love your student loan planner podcast. Help us out. Leave us a review or share it with someone who owes more than you.