Announcer:
It’s time now on KROS for Financial Focus brought to you by NelsonCorp Wealth Management. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representative, securities offered through Cambridge Investment Research Incorporated, a broker dealer, member of FINRA SIPC, investment advisor representative Cambridge Investment Research Advisors Incorporated, a registered investment advisor, Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. Now here’s today’s Financial Focus program.
Gary Determan:
Dave Nelson joins me in studio. He’s got a green sweater on as he walked up the hill. It’s just going to be a beautiful day today.
David Nelson:
It is.
Gary Determan:
Our weather man saying maybe 50, hard to believe.
David Nelson:
Like to get out and get on the bike. I wish I had time today but that’s not going to happen.
Gary Determan:
Did you walk the dogs?
David Nelson:
Walked the dogs this morning, got a good workout, had a little bite in the air. I didn’t dress as warmly as I thought. Well I felt it was warmer than it actually was is I guess the correct way of wording that. Anyway, but yeah, it was great getting out and I did not realize, we could touch 50 that’d be fantastic. That’s biking weather. I go down to about 38, 40 degrees somewhere in there.
David Nelson:
But yeah, we’ve got a big gathering tonight, a bunch of clients coming up, I think give or take 400 people that are going to be joining us up at Eagle Point Park. They’ll be coming and going. It’s a little open house type thing and a nice thank you. We’re so appreciative of everything that our clients have done for us. We’ve tried to do for them. And then in turn we’ve all done as far as for the community trying to make this a better place and so anyway, so we’re looking forward to it. The green is for tonight. I’m planning ahead. I’ve got early basketball practice before the event tonight, so the girls get out early. We’ll be in the gym by 2:00 o’clock today.
Gary Determan:
I just want to touch upon one thing with you, because you always talk about being in the community, Nelson Corp Financial is always going to be in Clinton. You’re up to the Eagle Point Lodge, you’re using Sweetheart to cater it for you, Homer’s Deli. And it is great that you use local people.
David Nelson:
Yeah. And to me, again, it’s kind of like where it really comes home to roost is when I see cars in front of me and they’re bought, purchased from the quad cities or someplace else and it just kind of, we got to take care of each other and I get it. I’m a business owner and I think differently. I know then I did say when I wasn’t a business owner, when I was 15, 20 years old, what have you. But understanding the importance of that, and there’s been numerous studies done when you buy local, what does it really mean, the ripple effect, et cetera?
David Nelson:
But the number that sticks in my noggin is 70% of that money will stay in your town. And if we’d all buy stuff locally the impact that it can have is just dramatic and they’re good people and they’ve got good products. Sweetheart Bakery, Homer’s Deli, holy buckets. It’s tough to improve as far as upon that. I’ve got dogs, man, I’m wandering all over the place here, but I got to put this in. They live in big cities and they have had an okay life. I don’t know how to word that nicely as far as to say that, they’ve been able to enjoy a lot of different things, what have you. They come back here, they can’t wait to get a Sweetheart Bakery donut because they said they’re the best. Best. And they’ve eaten at a lot of places in Milwaukee and Chicago and other places that they’ve been.
David Nelson:
Again, it just drives home that point that we’ve got a lot of stuff here local and if we want it, I know people bitch and complain, we don’t have any options. But the Targets of the world left for a reason, there just wasn’t enough traffic and so we’ve got to stay, we’ve got to spend our money as far as in the community and yeah, we’re going to continue to do that. I did a presentation yesterday down at Bettendorf, kind of transitioning a little bit into that and Bettendorf, if it’s like a business development group. There was 80 people give or take and they asked me to speak on a couple of different topics. But anyway, point being that these people were energetic, they’re fired up as far as protecting their community and business owners and it’s just good to see.
David Nelson:
Rotary, we’ve got that. And again, my hope is that we can influence people just to spend a few extra bucks here. It’s kind of like filling up the tank with gas. I tell my kids, “Buy it here because we get the sales tax in Iowa and Clinton gets a little bit.” It’s pennies, but those pennies add up if everybody does it. Again, it’s really, really important. And yeah, we’re thrilled, Rotary did a nice job as far as we contributed a fair amount as far as to it, the lodge up there and we’re thrilled the updated look.
David Nelson:
People come through there, they’re just so impressed as far as how nice that place looks. And so yeah, anything we can do to get people out and about and expose them to some of this stuff. It’s very similar to the ballpark when we started that 20, 25 years ago, get them down there and everybody says, “Oh, this was such a great time. I need to do this again.” And my response is always saying, “Yeah, you really do. We got to support this or we won’t have a team.” And so same thing here, support the local businesses, the local charities. It does make a difference locally.
Gary Determan:
Visiting with Dave Nelson. Notice a little raspiness in the voice.
David Nelson:
There definitely is.
Gary Determan:
The Irish were in action last night out at Alburnett early in the season. But I know you would like to see a little more out of the girls, but coach, it’s only been two games.
David Nelson:
Yeah, yeah, and that’s the thing. And it’s expectations are fairly high certainly for the girls as well as myself. I know what we’re capable of. And after being around the game for a while, you know what people can do and what they can’t do. You know what they do in practice and then can they pull that off as far as in a game situation? As you said, it’s the second game. We’re two and O. If somebody would’ve said, “Would you be happy at two and O?” Yeah, I probably would have known the teams that I was playing. It’s not like the teams we played were awful. They weren’t. They’re good teams. It’s just that we’re not playing up to what we’re capable of and that kind of there but nowheres near there. That’s the frustrating part. And it’s not lack of effort.
David Nelson:
The girls are working hard, it’s just a chaotic mess out there and it shouldn’t be. And it is. And we have some really nice athletes and so last night we won because we had better athletes. It wasn’t because we’re better organized, we’re the most disciplined, it’s because we had better athletes. And we can get away with that with the good teams and the average teams. We can’t get away with that with the games that are coming up. We’ve got Maquoketa Valley, which is historically been just a powerhouse. And then after that it’s not historically, they are, a North Linn. We’ve got two really bone crushing games coming up here and at the end of the day, again being in two and two, if that were the case at the end, would we be happy at this point in the season? Maybe, but again, my expectations of myself as well as my players is high and when we hit that level, we feel really good when we don’t, we feel frustrated like I did last night.
Gary Determan:
Thought you’d be of interest of this last night, Clinton High School was hosting Cedar Rapids Jefferson. They have a first year coach who comes from South Dakota, had a very good coaching program on the high school level in South Dakota.
David Nelson:
Nice.
Gary Determan:
I said, “Well, we got a young man who graduated from Clinton High who’s now at South Dakota State as an assistant coach.” He knew.
David Nelson:
Holy buckets. No kidding.
Gary Determan:
He goes, “Yeah, I know Brian Peters in Kirkwood Community College.” Did a great job there.
David Nelson:
Nice.
Gary Determan:
Evidently he’s gone to a clinic or knows of Brian. Maybe like you he bought his video.
David Nelson:
Sure it could be. Exactly. Oh, that’s exciting. That’s great. Well again, for our area, I guess the greater area here, that’s good to hear as far as that. We had a strange one too last night, where we wander in and the gentleman that’s officiating wanders up and starts up a conversation and I don’t know if you’re, have you been from Clinton? Yeah, yeah, yeah. I know. He graduated Clinton High, blah blah blah, blah, blah. What year? I told him the year and he says his dad graduated two years before me and his uncle was in my grade, Scott Schoff as far as we went to school together. And I said, “What are the odds of that?” I’m out in Auburn Ed, which for those that don’t know, it’s north of Cedar Rapids.
David Nelson:
It’s quite a jaunt away. But anyway, stumbled into selling myself. You never know. It’s kind of strange. I’ve traveled a lot of places, Orlando ran into some people one time. I’m in Nashville, I have somebody yell across the street, “Hey David Nelson.” Oh my goodness. What are the odds of this? It’s really cool. But last night, great. And how’d we come out?
Gary Determan:
Well, Jefferson won by 30.
David Nelson:
By 30 okay. How’d the girls do?
Gary Determan:
The girls were down at Davenport West and they lost their ball game as well.
David Nelson:
Did they? Okay, okay.
Gary Determan:
You wanted to talk about charitable giving, good time of the year to talk about that I would imagine.
David Nelson:
Yeah. We’ve been chatting a lot about this as far as, I’ve been doing a lot of different speaking gigs as far as for various organizations. We’ve done a couple in town here where we’re bringing people out. We’re talking to them about basically ways to minimize their income taxes and that amount that we dropped it by instead of giving to the IRS, we’re going to give it away to charity. And so it’s a big picture concept that I don’t think anybody can disagree with. The question I throw out to people as if there was a way, a legal way that you could redirect dollars from the IRS to charities that you care about, would you have any interest? And everybody says yes.
David Nelson:
The key is how do we go about doing it? There’s various tools that are out there. When people typically think in terms of giving away money to charity, it’s I’ve got a dollar and I give it to you, XYZ Charity, I get a deduction on that. You get the benefit of it. And it’s a very simple transaction. What we’ve been chatting about everywhere possible is to try to educate the charities from the standpoint of how to help individuals help them. And so oftentimes it centers around something that’s appreciated. I’ve got a farm that I bought and I paid $200 an acre and today it’s worth $8,000 an acre. If I sell it, I’m going to pay a lot of taxes so I’m not going to sell it. I’ll just rent it out and hopefully this’ll be a good decision over a period of time.
David Nelson:
Well, what if there was a way that you could sell that thing pay virtually no taxes on the transaction, get the benefit of the income from the whole asset? In other words, compared to what you’re currently getting as far as cashflow, you can probably double that. Oh and by the way, we’ll make sure that the kids get something too. And the charity is going to get a little piece as well.
David Nelson:
Again, we’re going to take it from the IRS bucket and we’re going to give it to the charities. And again, when people understand some of these tools that are available, they get kind of intrigued initially. And then again it’s drilling down. How does it work in my particular situation? And anybody that whines and many of us do as far as about the income taxes as far as that we’re paying, this is something that you should look into. There’s sophisticated tools for years that were only available to the really wealthy individuals. Today because the technology is driven down cost so dramatically and these have become more commonplace, so the legal profession and the accounting profession is now better equipped as far as to help in the transaction that people can do this.
David Nelson:
Average people can do this. And again, it works best with, as we call it, ugly assets. In other words, assets that have a taxes attached to them. When we talk to people about IRAs and 401Ks and they say, “Well, I got a half a million dollars in my plan,” then we have to be the bad guy and say, “No, you don’t have a half a million, you’ve got 350.” They said, “No, no, no, we have a half a million.” And then my response is again, “No, no, no, you have 350 because the IRS has a lien on that account. You haven’t paid any income taxes on that.” The IRS is basically signing themselves up for give or take, let’s say a third of that. At the end of the day, it’s understanding that most of us have tax issues that we’ve probably kind of brushed off that are real and are real significant. And what we want to talk to individuals about is that the concept and the idea of redirecting tax dollars to charities and to organizations that you care about.
David Nelson:
Keep in mind, and I should’ve made this point earlier, these are dollars. This is part of the explanation up front to clients. These are dollars you can’t keep, but you do have a choice. It’s going to go to the IRS if you do nothing or you can give it to charity, but we have to jump through a few hoops in order to make that happen.
Gary Determan:
Now, when you were first coming up with this idea or this idea of maybe just was presented to you, did you contact charities, contact individuals? How did that process work?
David Nelson:
It goes back 35 years. I’m down in Charlotte, North Carolina, and I’m learning about these tools that I’ve heard about, but I really don’t get them at that point in time. One of the speakers that was at this forum, breakout sessions that I went to. The breakout session, here’s the title, this is the quote, I’m not exaggerating. “God wants you to be rich.” And I said, “I got to listen to this one.”
David Nelson:
And the idea was with it is that there’s a lot of people that can work for the charities. There’s not a lot of people that can write the checks as far as to support the charities. We want you with your skills and your ability to go out and make a whole bunch of money so you can give it away. And basically from that day forward, that was what I consider my calling in this world. I’m really good at what I do, but I’m really good as far as in one other area too. And that is helping charities as far as do a better job packaging the word. If I were to come to you and say, “You know, I’m XYZ Charity and I’d like a little money from you.”
David Nelson:
A typical cold type approach, and yeah, yeah. And I’ll give you 50 bucks and hopefully you go away and leave me alone. With this, we’re not talking to people about the checkbook, we’re talking to them about assets that have tax liability attached to them and understanding that if they do nothing, they have a big problem. And some will say, “I don’t care. The kids can pay it. Tough luck.” And then my response is, “You’re a liar. You don’t mean that. The bottom line is you work too hard to get what you have just to throw it out the window is crazy. If there was a way that we could do something about that, would you have interest?”
David Nelson:
And so now you’ve got to have the expertise as far as understanding tax law. You have to understand as far as the estate planning ramifications that this is going to have. You’ve got to understand as far as how to manage those assets so that they can generate the income that people are interested in. And all these pieces have to come together. Again, on the surface sounds really complex and robust and probably way over most people’s heads so it’s not worth tinkering around with.
David Nelson:
But we’re not talking about in most situations, saving $1,000. We’re talking about saving hundreds of thousands of dollars for many individuals. We’ve got give or take clients in 40 plus states and I get a question from people, “How in the heck did that come about as far as all these various places?” Well, a lot of it centers around what we’re talking about right now is somebody knows somebody that’s thinking about selling a piece of property that they bought years ago and they have a big gain and somebody told them that there might be a way to minimize that tax liability. Again, we try to help consult with charities as far as that regard.
David Nelson:
Hav Life, I don’t know if you’re familiar with it. It’s down in the quad cities. That was two nights ago. I’m down there. There was a kid, he was 15 I believe he was in the pool as far as it was on I80, those pools that have the waves and whatever, it’s now closed down. He ended up dead and this is mom and dad, they started this charity, it’s H-A-V, Hav Life. Well that’s his initials. They asked me to come down and speak to them and talk about it as far as different things they can do as far as fundraising. And I said, “The key to understand to be successful in this area is everybody out there has an issue. They have a tax issue, they just don’t know it yet. What we have to do is we have to do a good job explaining that people don’t have what they think they have in their 401K. They don’t have a net worth that they think they have because the IRS hasn’t attacked it yet they’re going to, but they haven’t yet.”
David Nelson:
Getting that being the starting spot and then from there we build from there and say, “If there’s a way we could do something about it, are you open minded to it?” And so again, it’s a lot of work. Don’t get me wrong as far as from our standpoint, other people’s standpoint, but when we’re talking about 20 grand, 50 grand, 200 grand, as far as the tax savings and having a simpler, better life going forward, give me a break. Farmers are been probably one of the biggest ones that we’re coming across. We see what’s happening as far as the turmoil in their line work and it’s who knows if it’s going to get better for a while.
David Nelson:
And again, some of them are, being the good soldier and saying, “This is the price we have to pay. We got to make changes.” Some aren’t so open minded to that, but regardless, prices have come down pretty dramatically as far as in the rural arena as far as ground. And again, some people like to ring the register and maybe go another direction, but somebody told them, “Hey, the taxes are going to kill you.” Well that somebody is uninformed. There are ways to minimize it. Wrapping up this concept, and I know you’ve got a couple things you want to touch on as well, but I tell people, “Turn on PBS and at the end of the program I want you to watch who paid for that program.”
David Nelson:
And what you’re going to find is it’s the Rockefeller Foundation. It’s the Firestone Charitable Trust. It’s things like this, of very wealthy people that I want to believe with all my heart really care about me in kind and I think they might, but I also believe that they understand tax law and so they did this. I think they had smart people working for them and they too are smart and I believe they did it for selfish reasons as well as for mankind reasons. It’s okay to get both. And in those situations they got both and again, it made a fantastic difference as far as the world and as far as those individuals are concerned, their particular situation as well.
Gary Determan:
Again, visiting with Dave Nelson, always a pleasure. Dave, now you have added people to your staff for just that reason, their expertise in the various categories you were talking about.
David Nelson:
Yeah, it’s key. Again, in the old days you could have a one man shop and probably get by with it. Today you can’t. And again, we’re not of the mindset as far as to get somebody from far away. Some business models are, you’re just a local person and you’re going to interface with people. And again, I think maybe you got away with that. That’s kind of when I turn on Little House on the Prairie and I see the doctor there that takes care of everything, no matter what your problem is, he can handle it. That’s how it used to be. It’s not that anymore. It’s a complicated world.
David Nelson:
Look across the street from us, they got specialists for this, that the other thing. You got a toenail issue, we got somebody that handles that. It’s so different. It’s so complicated today, so to believe some one person can handle this is nonsense. And so as you said, yes, we’ve got CPAs, we’ve got access to competent attorneys, we’ve got MBAs, we’ve got a PhD, we’ve got CIPs, we’ve got CLUs, CHFCs, we’ve got a retirement specialist, RICPs. Lot of really, really smart people. I just happen to be the talking head as far as that’s out front, but we’ve got a lot of good people as far as behind the scenes that can help people.
Gary Determan:
Good talking head.
David Nelson:
Sometimes.
Gary Determan:
And you’ve got a lot of initials behind your name as well. Well we got a couple minutes left as you pointed out at the start, you’ve got your Christmas gathering, but you’re trying to make it a better Christmas for those in the community as well. How’s that effort coming along?
David Nelson:
It’s going great and tonight it’s going to be a big boom. This is the night where we fill up multiple cars as far as trucks, as far as the goodies. Again, we’re the upfront people handing off the product but it’s essentially our clients that are the ones that are bringing it. We match, don’t get me wrong, but if it wasn’t for the kindness and the generosity of the terrific people that we work with, we couldn’t do what we do.
David Nelson:
We’re very appreciative of that. And we’re excited tonight. The toys, the Toys for Tots tight type. I don’t know if that’s still what we’re doing. I just show up. But anyway we are collecting toys and we’re collecting food, I guess is the conclusion of it. And both vehicles, multiple vehicles will be filled up tonight. We’re thrilled about that and again there there’s a lot of people in need. My wife tells me I lecture too much. I apologize if that’s the way it comes across, but I really, really believe that there are a lot of good people out there that just need a helping hand and that’s all we’re trying to do. We don’t want to have people feel bad about it. We’ve all been in a position sometime in our life where we needed somebody to reach out to us. That’s all we’re trying to do and hopefully tonight with the generosity of many of our clients, we’ll be able to do that.
Gary Determan:
And a great message to close on and a Merry Christmas to you.
David Nelson:
You too Gary Gary. Thank you. I’ll see you in a month.
Announcer:
Financial Focus is a production of NelsonCorp Wealth Management in Clinton and Davenport. The opinions voiced in this show are for general information only and are not intended to provide specific advice or recommendations for any individual. Any indices mentioned are unmanaged and cannot be invested into directly. Registered representatives securities offered through Cambridge Investment Research Incorporated, a broker dealer, member of FINRA SIPC, investment advisor representative Cambridge Investment Research Advisors Incorporated a registered investment advisor, Cambridge and NelsonCorp Wealth Management are not affiliated. Cambridge does not offer tax advice. For more information, visit our website at www.nelsoncorp.com.