0:00 We are joined by Patrick Nagato, author of The Canoe in the Current. As a retirement strategist and chartered financial consultant, Patrick helps clients live fulfilling lives through intentional navigation, knowing themselves, understanding their environment and choosing their best path ahead instead of drifting. Get ready to learn how to help clients build their canoe and navigate the current on this episode of the Wicked Pissa podcast. It's time for a Wicked Pissa podcast. Wicked Pissa podcast. Wicked Pissa podcast. It's time for a Wicked Pissa podcast. Welcome to the Wicked Pissa podcast, a production of the Financial Planning Association of New England, intended for financial planning advisors.

0:45 Welcome to another episode of the Wicked Pissa podcast. I'm Kevin Williams, past president and current board member of the FPA of New England and founder of Full Life Financial Planning. I'm excited to be joined by Patrick J. Nagato, CHFC, a retirement income strategist and chartered financial consultant with a mission to help people transition from fear and uncertainty to clarity and confidence. After years of following traditional accumulation-based models, Patrick experienced a pivotal moment when a seemingly well-prepared client asked him, What if I run out? That question sparked a journey that led him to rethink everything he'd learned.

1:26 Today, Patrick specializes in helping pre-retirees and retirees develop income-first strategies that provide lifetime guarantees for essential expenses while still allowing for growth through market participation. His signature metaphor and the title to his book, The Canoe and the Current, has helped clients understand that true retirement success comes from balance, protection and participation, safety, and strength. With a passion for cutting through the noise of misinformation, Patrick offers a fresh, human-centered approach to retirement. His work empowers individuals to retire, not just with enough money, but with peace of mind, dignity, and freedom.

2:08 Welcome, Patrick. Hi, Kevin. Thank you for that introduction. Glad to have you too. I'm so excited to dig in a little bit and talk about what you've done with clients as a specialist in preparing for and surviving retirement and also dig into your book that was released this summer as it's a very exciting way to frame planning for retirement and focusing on what's important and how to navigate some dangers in retirement. How about tell us a little bit about yourself, your background, and how you got to where you are in your career today? Thank you. Yeah. So I entered the industry in 1997.

2:52 Prior to that, I was in high-end retail, but then I worked for a software company that worked with financial advisors. So that's how I got exposed to the industry. So in 1997, I got licensed. And when some of us kind of start with either brokerage firms or life insurance companies or life insurance financial services firms, I got started in life insurance financial services. So entering the industry, I was always the skeptic, the cynic, whatever you want to call it. I was a very uncoachable person. For some of us who entered through the life insurance channel first, before they'll let us get our securities licenses, they always want us to sell some life insurance first, preferably permanent life insurance coverage. But I insisted on getting my securities licenses because I didn't want to be pigeonholed into just being a life insurance salesman.

3:35 But with that said, between 1997 and 2000, I struggled quite a bit, had second jobs here and there to survive. For some of us, I don't know how people do it nowadays, but I did a lot of cold calling back in those days. Essentially in 1999, landed my biggest client that kind of got me to survive in the business. Then in 2001, I started my own RIA at that point, but did it, in my opinion, unwisely. I should have done it better, but I didn't know any better. And so I struggled. I mean, I did well, but I struggled to keep it up. And I decided to sell that portion of it in 2003. And essentially I wanted to get out of the business. I was kind of one of those people who most of us kind of don't make it.

4:19 And I was in the process of, I don't know if I want to stay or go. And so I ended up getting into wholesale. So I started wholesaling to financial advisors, in this case, life insurance wholesale. But then after I got tired of doing that, because I felt like I knew better than the bank brokers channels or the warehouse people on how to sell life insurance, I became essentially, what do they call it? Which was similar to a bank wholesaler, but I was working with an insurance company. So I was the financial services specialist for an insurance company's customer base. So we did that and then did really well. And then started to transition my practice more into investment management.

4:59 I got called by a recruiter to be a wholesaler, and that was a position I always wanted to give a shot. And so I got back into wholesaling, this time for a large insurance company. Did that for a few years, then went into management, had a branch that I was managing. And then I just realized I am just not a good employee, because as a branch manager, you're still dealing with a regional director. And my wife says, why don't we just go back into personal production? That's where you seem to be at your best. And so that's what I did. I went back into personal production, and that's where we are now. I mean, essentially my practice has evolved from the beginning as a life insurance person to now having assets under management and really trying to focus on retirement planning or retirement income planning for clients.

5:52 I guess as the old saying goes, you kind of mature into your market. And so I'm now in my 50s. These are the people I'm running into. So it's easy to specialize in the retirement income space. Not unlike many people that I run into in the business and many of our members at FPA New England is that a lot of folks in this business have had quite an interesting journey. It's not uncommon to have folks that started out in a different career and also who have seen a lot of different approaches to working in the business.

6:32 And as you noted, kind of found their way into the space that works best for them, where they enjoy it, where they can find success and happiness in their career, as well as providing value, obviously, to their clients. So that's fantastic. And excited to talk to you about it, especially because it sounds like your business, as we talked ahead of this call, you've really kind of created a practice, which sounds like your approach to working with clients and what you encourage them to focus on as they lead into retirement or navigating their way through retirement, much aligns with the approach that I've taken with clients focusing on what constitutes a life of purpose and reward over focusing just on assets and returns to really find that life that is meaningful to them and then work with you to find a way to make sure that they can financially achieve that.

7:46 Because I think I usually like to say, if we've been in this business, we're survivors, right? We managed to make it because the attrition rate is quite high, right? I mean, people just don't make it. I mean, when I was a manager, I was branch manager, we knew that the lifespan of a typical advisor is about two years. After that, they either make it or they wash out. As you're mentioning practice, I think our practices constantly evolve over time as we gain more experience, as we develop different types of clientele. And like I said, I just happened to be in my 50s now, and I was able to essentially fall into a more specific marketplace that I envisioned myself working years ago.

8:29 But let's call it, when you're 30, 35 years old, it might not be quite the same because you're meeting different demographics versus now, right? So I thought I'd just chime in with that comment. You've settled into kind of a focus on being a retirement strategist. What are you seeing as the biggest concerns for clients? Obviously, it's very uncertain times in a lot of ways, both in a short-term picture, but also a long-term picture. What types of concerns do your clients bring to the table?

9:10 What's the primary focus of trying to settle their fears? Well, I think that the main thing that's part of how I developed the book and essentially helping people develop also a retirement vision statement is there's two types of clientele, right? I'm oversimplifying in this case, but one is overconfident. And generally, they retire, they feel good about it, and then they start worrying, is it going to be enough? Then you have people who are not so confident. They don't think they have enough, but in some cases, they have more than enough. The reason we're in business, and despite of what people might think, our job is not to get you the best returns. I mean, our job is to help you make the right decisions when it comes to your finances, despite of how you feel about it emotionally.

9:57 So the one thing that I say when I'm talking to potential clients or clients is my job is to help you see what's around the corner, because you haven't experienced that yet. And I've dealt with enough clients who have experienced that, that I can at least, from a probability standpoint, be able to tell you this is what's around the corner that we have to plan for. So I think the majority of the people I deal with, they retire. And then the next thing they thought, or at least they plan to retire, and then they're thinking, I thought this would feel better. And they're either worried. One client in particular was overconfident after he read my book. And again, in the case of, I don't know about you, but in my case, sometimes clients go through the whole process.

10:39 Sometimes it's a little bit more transactional before they go through the whole process. But I try to accommodate as much as I can. So this one particular client, we had a conversation just a couple months ago, he's retired. He's been retired for a couple of years. And he said, Patrick, after reading your book, I don't know if I have enough. And so I had to reassure him. I said, I know your finances. I know your spending habits. You do have enough. Let me kind of reiterate what you have, and we can go over that again. So that's a common theme where people are like, I thought this would feel better from a standpoint that I'm worried about my money. In some instances, I thought this would feel better, but I'm really bored. And I don't know what to do with my time. So I don't know about you, Kevin, but that's who I run across is those types of conversations.

11:21 And so developing the book and developing the process, I realized that it's important for people to think about, now that you're about to retire, perhaps you should consider writing a retirement vision statement. So I developed a questionnaire so people can at least complete it and think about it with their spouses and maybe even their kids. What does retirement look like to them? Because most people, when they think about retiring, it's just a matter of, I want to stop working. I want to start enjoying my life. But they haven't really defined what that means. Are we going to travel a lot? Are we going to be babysitters to our grandkids? Are we going to play golf all the time?

12:01 So it's just a matter of being able to define that for themselves so that we can plan their finances around that and then help them see, based on what their vision is, what the potential pitfalls are with what could happen there. So that's kind of like part of the assistance process, so to speak, or helping them think things through. Because once somebody retires, there's no looking back. Chances are you can't go back to work. So we got to make sure that this is rock solid as far as your money goes, your paychecks, and what your lifestyle is going to look like. Not that retirement is any different in terms of this for a successful plan.

12:44 But as you said, just trying to get a vision for what they expect. If you're working with a couple heading into retirement and there hasn't been a lot of discussion as to what it's going to look like when they get there, I've seen situations where it can be very problematic because they both want to get there. They both have that general idea of, we can't wait to retire. But then they have a totally different vision of what that's going to look like. And that's a rough road when they get there to try to get on the same page. And sometimes they don't, just because they haven't planned for or they aren't on the same page as to what they will do.

13:33 As you said, one of them plans to golf and one of them plans to travel. Or one of them plans to relocate to warmer climates and one of them wants to stay around and local with the grandkids. So the sooner that they can communicate and be on the same page, obviously it helps. And you can only help with the financial piece, but having that questionnaire, which gets a couple talking or gets the, even if it's not a couple thinking about what things are going to look like, provides a smoother glide path into retirement. That's for certain. So here's an example of an extreme.

14:14 I have this one particular client I can think of. They are now in their eighties. They worked really hard for tech firms and done really well. They have money just that's coming to them now that they're not even looking for it. Their investment returns are doing well. They're selling properties. They're doing quite well. And so until about five years ago, they were traveling on a regular basis once or twice a year to enjoy their retirement. Well, unfortunately their daughter had a stroke. And so now they've had to be caretakers for their daughter. And so their money is just, they're no longer spending their money.

14:55 They're spending money in some cases, but they're not spending nearly as much because they're not traveling anymore. They're taking care of her. It's both a nice problem and a bad problem because they would like to enjoy their money more. But they obviously love their daughter and they're taking care of her. But now that they're approaching the mid eighties, they have to have a plan on finding a caretaker for their daughter. But that's an extreme example. They've done quite well for themselves and they continue to do well. And I like to tease the husband and say, you're finding money everywhere where some people are losing it. You're enjoying it because we have to take care of our daughter, but we're going to try to fix that.

15:38 So anyway, I thought I'd just kind of share that because that's another extreme where they've done quite well for themselves, continue to do well. Again, what's around the corner. No one foresaw that coming where they had to take care of their daughter. Absolutely. And I'm glad that it sounds like financially they're in a good enough spot to make that work and hopefully things end up going well for their daughter. But things can change very quick. And that's why you have to be ready to reset that vision statement that you have, because as you said, nobody knows what's around the corner. You mentioned, as you said, that you have broadly one of two types of people entering or in retirement.

16:23 One is the overconfident and one is the underconfident. Their common denominator is they don't know what they don't know. What are you seeing? And obviously, as you mentioned there, you just shared with us an outlying event, but what do you see as the biggest risks up around the corner that tend to take people off of their retirement plan and get them off of a path of success? Well, I think a couple of things. One is, and this is often talked about, long-term care.

17:04 If you were to need long-term care or any sort of extended healthcare services as you get older, that would obviously affect your finances because those costs are just rising. The other thing is there are people who just fall in love with their investments. I mean, we've had a pretty decent run except for a few bumps here and there. And so what tends to happen is people tend to fall in love with their investments that have done well, instead of planning and saying, okay, now we need to start thinking about how we're going to make sure this accumulates properly. I call it the accumulation trap.

17:45 We're so used to saving money, saving money, and then investing it, investing it, and doing well with the investments. Once the investments do well, then it's time to start harvesting some of that to make sure we either build your canoe or at least protect it from any sort of market volatility. But there are people who just don't want to make any changes until something really bad happens in the market. And then that's when they make the change and realize the actual loss. And so I think those are the challenges I think most people that I've run across, the challenges I face with them, because I have to try to persuade them.

18:26 We need to start thinking about this in a different way. And again, that's part of the inspiration for the book, is to, I feel like I don't communicate that well enough or it doesn't resonate with them. So the book was kind of developed out of really frustration in most cases, and just to be able to say, why don't you read this? You can kind of get my thoughts on the matter, because it's not uncommon for people to say, I don't want to do that yet. I want to continue to ride this investment until I think it's the right time. So that's my experience with it. And there's definitely an argument to some extent to take the approach of let winners win for a little bit and not necessarily rebalance on a daily basis.

19:13 And I'm exaggerating there, but let things creep a little bit off of your intended asset allocation path to just ride out a little bit of success. But there's certainly, there's a timeframe where that marriage to the success a certain stock has had, very important to reign that in and make it an actual win, not just a win on paper for certain. And no, we see that a lot. And especially nowadays with so much market appreciation being in just a handful of stocks, it's easy for people to fall in love with those or just the ones that they see the headlines of, or the one that somebody recommended to them and it had a huge jump, but there isn't necessarily any rationale as to how that fits in their portfolio, but they just know that it's worth a lot more than it was when they bought it.

20:17 So they're reticent to have you. Yeah. And I'm sure you've run across this before on the listeners. You take on a potentially new client, they're very happy with their investments, you run an analysis and they say, well, I don't really do anything. It's done quite well. And you do the basic analysis and compare it to just what the S&P 500 index has done and it's underperformed it. And so you just have that basic conversation. I don't really like to necessarily compare returns, but I just usually like to tell people, listen, based on your profile, you should be performing better and you're not, but in your mind, you're performing better and you like it. But if you just compare it to the index, you're actually underperforming it.

20:58 And so I just make the argument, you might just be better off, notwithstanding working with us, just investing in the S&P 500 index and you would have done better. So people, they have blind spots because they don't know what, like you said, they don't know what they don't know. And that's where the value of working with us comes in, is we help them look at the things they don't see. And they never love the idea of selling out of something that's done very well and actually paying taxes on it too. That's the other sledgehammer over the head that usually leads them to push back even harder to not want to sell something because they don't want to get rid of it and they don't want to be out cash from it either.

21:44 So one of the challenges I had in the beginning of my career, I mentioned earlier, I had that RIA and I was doing the actual stock picking, all the research and all that. And like I said, I think that was a mistake on my part. Back then I was a little bit, probably a little bit more inexperienced than I am now. So I would do it a little bit different. I'm doing it differently now, what I'm saying. But back then I would have the conversation with my client saying, okay, we're going to buy these particular stocks because they're undervalued based on my analysis. And then we're going to sell them when they reach what we feel is our fair market value. And then that way we can kind of profit and then look for other undervalued stocks at that point.

22:24 So of course, what I didn't foresee at that time due to lack of experience is once you reach the fair market value to think it should be sold at and the stock ended up going up after that, your clients weren't happy with you. Why didn't we ride this further? Because we could have made more money on it. And then likewise, if you didn't sell it and decided to ride it and the market and that stock went down, then of course, you're the bad guy for not selling it. So it was one of those things where you don't win for losing or however you want to say that terminology. But even when you communicate that this is the target price you want to sell it for, because we believe that it will be overvalued after that and then the stock continued to rise.

23:09 And of course, those clients were unhappy about that. So it was one of those things where they just fall in love with the winners and they don't think about anything else. They do as much as you try to educate them and most of them understand. There are those that expect that financial advisors know exactly what's going to happen with the market and with every individual investment. And I try to tell them at times that if I knew exactly what was going to happen with the market and with every individual stock, I would just be able to do it for myself and I wouldn't have to do it for them. And you'll be very wealthy. Yeah, absolutely.

23:51 I'd have a lot more time to myself, but that is tough. And it's again, part of the value that we bring is trying to continue to educate them about the importance of diversification and sticking to a plan. And it sounds like you were doing the right things early, which was having a very systemic approach to what you were going to do, because that's how you keep everyone honest on the same page and on target with what you've agreed to try to do with them to make their journey financially successful.

24:34 Obviously in retirement, apart from trying to get on board with your spouse or significant other as to what your plan is going to be to enjoy retirement, is that difficult transition to going away from having a paycheck to having to become your own paycheck. As you advise clients, what is your best strategies for becoming that own paycheck to themselves? I can be accused of oversimplifying things, sure. But the general theme, or at least when we're having the conversations, and we all know this, let's figure out what your monthly expenses are.

25:18 What are the main essential things you have to make sure you pay for? Whether it's if you still have a mortgage, property taxes, health insurance, food, let's put that out of the way, let's cover that with some guaranteed income. That would be the canoe, part of the canoe in the current, right? The canoe. So what would constitute as guaranteed income? Obviously, social security. If you're lucky enough to still have a pension with your employer, that's going to cover that as well. And then really the third piece of it, that I know we can guarantee is using guaranteed income annuities. A lot of people have different opinions on annuities. The main thing that I tell them is what annuities will give you is the ability to have lifetime income that's guaranteed, that you never have to worry about running out, of course, at the claims paying ability of the insurance carrier.

26:08 But we have not had any experiences that I can think of that insurance companies stop paying. So if you can at least cover that for your canoe, then you can then navigate the current confidently. And the current, of course, is investing in the stock market still, or having managed money, or having structured investments, and things like that. You can confidently stay invested even when markets are volatile, because you have your, essentially, your guaranteed paycheck from your retirement assets paying you, from social security, to annuities, to pension, what have you. As the current makes money, or as the market goes up and makes money, you harvest. Harvest it for vacation spending, gifting it to children, grandchildren if you want to, or even replenishing your canoe if you want to, so that you can increase your guaranteed income for the future.

26:58 And then if the market isn't going down, you just don't touch it. You let it recover. As we know, as we financial professionals know, markets go up and down, but the common theme is it does always go back up again. And so we can be patient about it, because we're not worried about having to make sure bills are paid. So when I sit down with somebody and we have their initial framework, tell me what your monthly expenses are. Let's just say $5,000 a month. Okay, great. Let's pad that by another thousand. So now we need $72,000 a year. How do we find that? So we just if there are gaps to needing that from what they're getting from social security, and let's say pension, if they have it, then we fund it with using an annuity, a good income paying annuity.

27:45 And then whatever else they have left over, we invest it in the market and manage it based on their risk profile. Good framework, which focuses on making sure that what's needed first is essentially covered. And then from there, they can move on to kind of taking next steps, but hopefully puts your clients in a comfortable zone where they know that the mandatory, the must-haves are covered. When we talked leading up to you joining the Wicked Pissa podcast, we talked about a little bit about your career and about just kind of as advisors, trying to connect with clients and trying to, we're very familiar with strategies and markets and details of investment tools and products.

28:49 And a lot of times it makes a lot of sense to us, but what we're trying to do apart from the handful of clients that really want to dig in and get their hands dirty and understand it almost as well as we do, most of our clients just want to know that they can rely on their advisor to do what's right for them, to be fair, open, and transparent with them, and to help them achieve their financial goals and their life goals and make sure that their finances will provide for those. But it can be difficult to frame the what and the why for our clients in a way that's easy for them to understand.

29:40 You came up with a way that made sense, so much so that you released a book this summer that I referred to in our opening. It makes perfect sense that as you've discussed some of the work you do with clients and how you make for a successful retirement financially for them, you've referred to the canoe and the current in sharing some of those strategies. But you released what, in August, your book, The Canoe and the Current, is that correct? Yes, August 1st. Oh, that's fantastic. So having gone through it, The Canoe and the Current is a very cool metaphor in the book that you use of a canoeist navigating a river.

30:30 And obviously from what you've touched on, that's your clients kind of navigating their journey and trying to stay on a safe path and knowing that there's unseen risks that they're unaware of up ahead down the river. Tell us a little bit more about what led you to that book and to coming up with that story and how to frame things for clients and really what the story tells in the book.

31:10 Well, so part of the inspiration for the book too is there's a lot of, there's so much information out in the marketplace today with different opinions and biases that I thought that it just really, the consumer is paralyzed by information. So they can't make decisions. So the way I looked at it was, if we can just simplify things, right? I mean, we're taught the two different ways to have retirement planning. You have the flooring, the flooring strategy and the buckets, the time segment strategy.

31:50 But I thought it'd be better to talk about it in a form of imagine you built a canoe. This is going to be part of your retirement plan. And then you're going to, your retirement plan is going to ride down this river down, up from this mountain. And you're just going to, you're going to ride the current down and the current is a stock market, right? But if you have a solid enough canoe, you're not going to worry about what the current is going to do for you because your canoe will withstand any of the obstacles that comes your way. But what you want is you want a current that's smooth at times, maybe rough at times, but because it's rough, it gets you to your destination faster, but then also avoid some of the obstacles that come along, whether they're little rocks and things like that. I wanted to oversimplify the retirement talk and in doing so, that's how the canoe and the current came up.

32:35 You build your canoe, make sure it's solid. Let's build your essentials. Make sure that you have that paycheck that comes in to just cover all your expenses. And let's pad it a little bit so you're not pressured. And then whatever's left over, let's invest that in market type instruments because that's where we're going to get the best gains as far as keeping up with inflation. And then as you gain, we harvest. Not all of it, we harvest some of it or all of it based on that. And then like I said, you use that for your vacations, for pleasure expenses or gifting to children and grandchildren or replenish your canoe so that you increase your income in the future.

33:18 Because there's so much information, I wanted to oversimplify things for people. That way, it makes it easier for them to make the decision. And so in that case, once they say, I get it, great. So what are we going to put in the canoe? Boom, we give them the ideas that should be funded in the canoe. And then how are we going to handle the current? Boom, here's how we're to invest that money in the current. And I think that just separates it for people and gives them clarity so that they know that they're going to have this guaranteed income coming in regardless of what happens in the market. And then if the market is volatile, they know based on how currents are, currents will be smooth and rough at times, but they can then withstand any volatility primarily because they have the guaranteed income coming in.

34:05 And that just simplifies it for them it's easier for them to make it to say, great, I get it now. Do you have clients that ask about or raise concerns about social security and what that might do to the viability of their canoe? So it's funny. I think I said earlier, I'm kind of a cynical person when it comes to our industry a little bit. So I've been doing this for almost 30 years. And there's a common theme in my career is we don't know if social security is going to be there when we retire.

34:45 And so clients, they voice that concern. But at the end of the day, I say, I don't see how it's going to go away without a revolution happening because this was money that was, hate to say it, forcefully taken out of our paychecks to fund it. So the government would have to figure out a way to either pay us back or in the case of the solve for them as they're just increasing retirement age. I probably should worry about it, but I don't make that a concern because I say, it is an obligation based on how you've already funded this in the past. Now, if they decide to take it away, then I think we're going to have some major problems.

35:30 But at the same token, call it a marketing tool in our industry or call it a way to engage people in conversation to create value that, hey, we have to plan for if social security goes away. I just don't see that happening. The same thing they always talked about throughout my career. Taxes have to go up because of our deficit. Well, have taxes gone up? Not really. I don't think we're going to see taxes going back to 90% back in the fifties and sixties. I'm a little more cynical about what we're hearing. So I always tell people, we're dealt a set of cards, play with that set of cards and be cautious about what's around the corner, but we can't worry about something that may or may not necessarily happen.

36:21 We just have to be cautious about it. Yeah. And unfortunately it's, I work with a lot of clients who social security is by no means a make or break to their financial success in retirement. So oftentimes their question is more about when should I claim it because I don't want it to be gone. It gets shorted my money. But I do also have clients that their ability to collect on social security and sometimes at a very specific level, the level that their social security statement says that they anticipate being paid out as is important to them.

37:10 So I much prefer the clients that, that I can say, let's plan for no social security at all. And, you know, let's look at how things are going to look and you're still going to be successful. And they're very happy and they can grumble a little bit about down the road. They think the government's going to screw them over for the money they paid in, as opposed to the people that clients that it really makes a difference to. But yeah, I just don't think the politicians have the appetite to rock that boat. And at best, they might have to, there might be tweaks to it, but it's not, as you said, it would be, we'd probably have bigger problems if something happened and it went away entirely than the lack of getting repaid social security.

38:01 Yeah. But like I said, it's been said throughout my career, you can expect social security to be gone by the time you need it. And I just know that my maximum age has just increased. That's all. So. Right. There will be tweaks. So it's a very cool story. And I love the, you know, the metaphor of the river and the canoe. Have you found that it's been helpful to you in framing the discussions with clients using those metaphors? Do clients seem to understand it? Can you see a light bulb go on over their heads? Yeah, absolutely.

38:43 Because I think we're all guilty of this. We fall into the trap of jargon. So having this metaphor as a conversation piece removes that. You know, it just basically, like I said, oversimplifies it. When you're talking to somebody who's getting to retire, their main objective, if they haven't articulated it, is to make sure you don't run out of income. And it's a different approach versus making sure that we grow our assets. Now, we still want to grow some assets for sure. But the main objective now is to make sure you don't run out of income. And that's a different mindset and a different conversation. Most people don't necessarily think of it that way.

39:23 What they think of is running out of money. Take too much of our assets. At some point, we're going to run out of money. Okay, that's a different subset. But the main thing is making sure that first and foremost, that income comes in regularly and you don't have to worry about it. And so that's why I said, instead of industry jargon, like, oh, let's do this and make sure that we have your dividends paying out, excuse me, where we're getting enough yield from bonds and blah, blah, blah. So we just oversimplify it. Let's make sure that you have a solid canoe that gives you the guaranteed income you need. You'll now be able to invest confidently and knowing that as long as you have your guaranteed income coming in, you can take some small risk or some risk investing in the market because we still need to grow your assets.

40:05 So yeah, a light bulb does come on. I'll give you a great one example. I often refer to this particular client when I'm doing interviews. And you may or may not have had this experience. But with her, I've worked with her for about six years now. And throughout that six-year process, she still continued to engage other advisors. And I knew she was, and in fact, she withdrew some money from my accounts, put it with another advisor, so on and so forth. When I finally wrote the book and gave her a copy and she read it, she says, oh my gosh, I think you finally, I finally met, now I know you understand my situation.

40:48 And I was like, wait a minute, I've always understood your situation. So it took this book to make you realize that I understand your situation. She's like, yes. So she's like, she likes to listen to financial talks, but she now runs everything through me and she's getting ready to retire and she's concerned about does she have enough income? I said, yes. And again, we're going to finalize this plan for once you have a specific date in mind. But it took her six years and my book, really it took my book to help her understand that I understand her plight or her situation. I don't want to say it's weird.

41:30 The book certainly is an eye-opener for me because the reviews I've gotten from people who have shared their thoughts after reading the book, you've made this so much easier to understand. And so, yeah, light bulbs do go on when people read it. It's amazing how it took something this simple versus, like I said, making it more complicated or sophisticated with jargon or with charts and numbers and stuff like that. If we just say, listen, here's what you need, you need $5,000 a month, just an example, boom, here's how we get it. Now that we have that, what should we do with the rest of what you have?

42:13 That's great. It sounds like it definitely landed with her. And as we discussed, it's easy for us as advisors who are in the weeds with this stuff to slide very quickly back into a lot of details and minutia, whereas clients, as you said, want to be understood, want to know that we care and want to know that we have a plan. They don't need to know all the details of what that plan is. They just want to know. And in this case, she understood that she needed a plan for income, that you understood it. And that gave her comfort that you were on the same page to move forward in that retirement journey.

43:01 Yeah. She has more than enough, by the way. And she's still worried she doesn't have enough. And I told her, you will be just fine once we set this in stone. So she says, okay. But I said, don't worry. She's finalizing a date and then we can set it in stone as far as the actual plan. But I told her, I said, you have more than enough. You'll be fine. That's great. So in the book, there's obviously the major metaphors of the canoe and the river, but there's canoeing related types of metaphors used in the book.

43:45 One of the things that I looked at, picked up on was you referred to drifting in the book and early in the book. Explain kind of how you define what drifting is. Well, I think just going blindly. You're just going blindly going along. I mean, not understanding what you're going through. So that's why I said part of the reason for the metaphor is to give them some clarity. So you know exactly what the canoe is doing. And then you're going to have some ideas. You may not understand everything because it's an investor in the market, but basically it's just going along without knowing what you're really doing. And as I said earlier, we have some, I've dealt with people who we want to stay invested where we are because this particular mutual fund is doing quite well.

44:31 And we don't want to move it just yet. I would call that drifting. And that's some of the people that oftentimes are the overconfident ones. They're drifting and think that, and sometimes they do, but oftentimes they don't have enough and aren't aware of what the potential risks are ahead that can derail what their success might be. But they don't think that they need it. So there they go overconfidently drifting down the river. And you know what? And sometimes you have to let them go through it. Not because you're going to tell them I told you so, but because they just need to experience it to kind of realize that you have to have a plan and not just ride the current, not having a plan.

45:20 You may be going down the river, but you still have to navigate. You don't just drift. You still have to navigate. You still need your oar. And so some people just, they don't bother to navigate because let's say they've done it on their own. Oh, my 401k plan has done great. I'm going to keep it there even though I'm retired now, just because I know it's done great. They're not rolling it over to an IRA. They just want to keep it there at this point. Or at least if they do, they're going to keep it to within the same funds and the same strategy without really adjusting anything. And they just drift along. Again, like I said, in the last few years, besides COVID, markets have done quite well.

46:04 So it's easy to be overconfident. So you just mentioned the oar. And my recollection was the oar in the story represents my ability to be part of that plan and have control kind of over where the canoe goes, whether or not that gets me into some form of peril or not. But I do have some control over that. Is that correct as to what the oar, it might've been the paddle represented in the book? So basically, like I said, as long as you have a solid canoe, you can take risks with what part of the current you want to ride.

46:49 So some people will say, I never want to get into any rough. And some people say, I sure, I don't mind some of that because it's a little bit exciting. It's a the canoe is the main piece. You navigate the current based on obviously how we're investing that. And then it allows us to pivot if we need to. It allows us to make changes as necessary without compromising your ability to cover all of your essential expenses. So that's where people still want obviously a level of involvement and control. And so we just help them navigate through those things and make sure that number one is once the canoe solid, we will invest your money in instruments that we will help you understand better.

47:36 Now you may not understand it fully, but here's what we expect from it. And here's what it could potentially do from a positive standpoint. And here's what the potential negatives are. And then we'll just navigate through that based on where we are at that time. So if it's positive and we're doing well, we'll harvest. If it's negative and not doing well at that time, we hold off on harvesting so that we don't realize a loss. We wait for it to bounce back. The book you referenced about the ability of if you have a solid canoe being able to take advantage or choose to ride in some more risky areas of the river.

48:19 What about rapids? The book talked about rapids at one point, I believe. I think that was something a little bit different than taking on just some more risky parts of the river. What were rapids? I don't have anything. I don't recall writing anything about rapids. Crises, things like that were unexpected. Maybe something along the line of your client with what happened to their daughter that was very serious as well as unexpected as opposed to just something as treacherous as just being invested in the market. But my notes might have been incorrect.

49:02 I call them silent killers in the book. And perhaps I probably should have used rapids instead because that actually would be a little bit, now that you mention it, that's more in line with the metaphor. But the silent killers, of course, are more long-term care. If you have to take care of somebody, in this case, in the case of my client that I referred to, they don't have long-term care issues with each other, but now they have a long-term care issue with their daughter. That was something that no one expected. That was, let's say, a rapid or shall we say a rock that's in the way that your canoe is going to hit. But again, their canoe is solid, so they're not necessarily worried about that.

49:47 In their case, their concern is we're not... And this is not meant to sound like they don't care about their daughter. What I'm trying to say is this is not what they expected at retirement. They expected to travel as they were doing prior to this happening. So in essence, going back to this example, they traveled for the first time this year in five years because they've been taking care of her. And so they finally found somebody, a caregiver that they can use for their daughter, so they were able to travel this year. But again, it wasn't extended travel like they're accustomed to.

50:29 It's a short travel back to their home state to visit old friends and family. So yeah, I would say that would be an example of a rapid in the case that you mentioned or the silent killer that we mentioned, healthcare costs, things that are unexpected. And like I said, long-term care is probably the biggest one just because... I mean, the statistics have been the same ever since 30 years ago. 70% of seniors are going to experience some sort of long-term care event. That hasn't changed. You can use rapid in the second edition release.

51:09 Yes. I really like that terminology better. I'm surprised my editor and I didn't catch that. No need to give me credit, but maybe I came up with that as I was making my notes about it. So perhaps you can write the forward on the second edition and take credit for changing some of the language. So the important piece for all of us as advisors is to provide, to be that guide in the canoe. Overconfidence, lack of confidence, not knowing what you don't know.

51:50 Part of what we do and what we provide is through our many years of experience is kind of knowing what they have to look at or be mindful of is risks around the corner down the river, correct? In essence, we are the guide for the river rafting canoe trip, right? We are the guide. One of my clients said, your book came in just in time. I was in a river rafting excursion with my children and the guide, she showed me a picture and there's a guide in the back, making sure the back of the raft, they're staying safe and stuff like that.

52:30 So we are essentially the guide to the canoe. It's a great, great story. I think it provides a nice visual for clients to understand what they're doing, what your role is, what their role is, how they can visualize retirement and what it takes to get there, both in terms of planning and visualizing their own retirement as well as to what are the tools to help them get there in terms of making sure they have that steady stream of income to cover their most needed expenses and then to responsibly be able to take on some potential risk to live some of the goals that they have beyond their basic needs.

53:31 One of the things that I think is great too is kind of envisioning in the book talks about kind of create, for lack of a better term, I guess I would say is creating what their river is going to look like and kind of what that purpose in life is. Is that kind of part of the vision of it? So basically, the analogy could go, or the metaphor could go, I want to ride a river down as I retire. I want to build my canoe. Now let's select which river we cruise down from. So that's kind of the idea. So you get to select based on how solid your canoe is built, which river to sail on.

54:13 If you have a solid enough canoe, then perhaps it can take more risk. If you don't feel as solid about it, then obviously you take a slower current type river, right? I didn't use this in the book, but imagine you're climbing up this mountain. So you want to ride this river down and you have your canoe with you. You've built a solid canoe. Then you ride the river and guide yourself through the river based on the current you want to, the risk you're willing to take, so to speak, which currents you want to ride, or you want to avoid the tough rapids and you want to go for the smoother rapids, whatever it might be. But certainly that would be the concept.

54:53 I love the story. It's a very, very cool one. And as we said, it's always great to try to find a nice way to help our clients very easily understand what we're trying to do for them. And this is Landing for Clients, and you are able to really find a nice way to help frame retirement planning into a cool framework and visual and a nice story as well. Anything else about the book or kind of how you came up with it or how it applies to retirement planning that you'd like to share before we jump off?

55:39 I think it comes down to, at the end of the day, the one common theme that I've learned throughout my career when I worked early, and it's still common, is people are worried about running out of money. Even wealthy people, they're running out of money. The other thing is, the first firm I was with, I remember the founder of the firm said, it doesn't really matter what you know. It's being able to convey the right message to your client first. The tools, the tactics come next. But really, what you want to communicate is how you can help them achieve their goals and objectives in a simple and concise and clear manner.

56:22 The tools will come after that. But if you talk about the tools, oftentimes, people are just not going to get it. So you need get them to make sure that they understand the strategy and then the tactics come next. So really, that's kind of how I designed the book. For people in our business, they might say it's oversimplified. But I think it's really simplified for a purpose. It's to just get the concept down, build your solid canoe. That way, you don't have to fear the current, the market. And so I think most people fail in some cases with their finances because they lead with fear and not confidence. So if you have a solid canoe that's going to pay you a paycheck for the rest of your life that you know will not run out, then you can invest in confidence.

57:07 What's going to give you your financial security is being able to do that. Now, the second piece of this is, obviously, the idea is let's help you build the canoe that's solid, a retirement plan that's solid. So once you've done that, part three of the book talks about how can you be a better steward of your money at that point? In which case, what sort of legacy would you like to leave behind to your children and grandchildren? We talked about this before the call and I just mentioned it. I do have a second book that's ready to publish. It's really going to complement this first book. And it's really about what sort of values do you want to leave behind for your family?

57:51 And in that case, perhaps creating a family financial philosophy so that your children and grandchildren know how you've built your wealth, at least the money that you have, and then how you would like that to be treated once you're gone. And then how would you like the next generation to be stewards of the money you've built and the wealth that you've built? It's the idea there is to encourage people to not hide what they've done with their money. Because whenever I do speaking engagements, I always refer to my favorite term, people are funny when it comes to money. People are funny when it comes to money. Some families, they don't want their children to know anything about how they built their wealth.

58:33 Some families, they want to make sure they're sharing. But I think in a lot of cases, I think based on my observation, the more you share, the more you build values with your children and grandchildren, the more they can appreciate what you've done. And hopefully, when you're gone, they treat whatever's passed on to them with better stewardship than if they just got it without any purpose. At the end of the day, you build money with a purpose, you use it with purpose, and you transfer it with purpose. Look forward to that one coming out as well, Patrick. You've been busy.

59:13 Where can our listeners find your book? The book's available on Amazon, The Canoe and The Current. You can also look them up by author if you want to, Patrick Nagato. I also have a website for the book called canoeandcurrent.com. If anybody wants to reach out to me directly, I'm available on LinkedIn. I am the only Patrick Nagato on LinkedIn that I'm aware of. It's a very unique name, but feel free to reach out on LinkedIn as well. That's great. What are the chances of that? Even with a somewhat unique name, the chances of that seem crazy. I look forward to hearing from anybody who wants to reach out. I'm more than open in welcoming comments, conversations, and stuff like that.

1:00:00 Kevin, thank you. I appreciate being able to speak to your audience. And to all our members out there and others listening, if you are interested in learning more about FPA of New England, upcoming educational and social events, or resources available to you as an advisor, you can learn more at financialplanningassociation.org, where you can find information on our chapter under the networking tab. Also, please connect with us on LinkedIn if you haven't already, where you'll find the latest news and updates. And we look forward to connecting with you on the next episode of the Wicked PISA Podcast. If you'd like to learn more about the Financial Planning Association or FPA New England, visit our websites, financialplanningassociation.org for the National Association or fpanewengland.org.

1:00:52 You can learn more about our organization and all the upcoming chapter events. We hope you'll join. That's fpanewengland.org. Until next time, have a wicked good day.