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: Well, first Wednesday of the month, so we welcome into the studio Dave Nelson of NelsonCorp. Was it now NelsonCorp field? Or NelsonCorp Wealth Management?
David Nelson: Still Wealth Management, yes.
Gary Determan: Okay, very good. Well, let’s talk about that because-
David Nelson: Sure.
Gary Determan: … I found that quite interesting and I guess it was something that just didn’t happen over yesterday. This is something you’ve been talking about for some time.
David Nelson: Yeah, I’ve been thinking about… the conversation started probably three years ago and when I was talking to Ted about… we were down the field and concerned about knowing what was happening with Ashford as far as the things were not moving the direction that we wanted as far as from a corporate perspective and the ripple effect of that as far as this expense, as far as having this big expense in Clinton, Iowa. And so anyway, so at that point in time, there was no hot prospects. And so thinking like a business owner, like I do, thinking about Clinton like I do, we’ve got to keep this thing going and a lot of things ran through my head as far as big employers, as far as in the area, would they have any interest as far as in stepping forward?
Literally, had no interest at that point as far as for us whatsoever. But as time evolved, I’d have conversations with Ted and there weren’t a lot of prospects and probably about three months ago, we we’re over at Krumpets Saturday morning, we strike up a conversation. I ask as far as who’s in play. He said he had one company in play that… but he didn’t know corporate, kind of like the idea of local, liked the idea, but they had just been dragging their feet on this thing. And so, I came back and started chatting with some of the folks in the office and saying, “Is this something that we would even consider doing? And does it make sense as far as for us?” Again, I know people can make statements and there are a few people I think in the area that really understand the importance of stuff like this and they’re committed to this area, but I’ll align myself with the best of them and say that there’s probably nobody that cares more about tomorrow than probably Mike Rastrelli. And I said, “I’ll be a close second.”
And I really do. I want this town to succeed and we’re doing whatever we can as far as to try to put our money where our mouth is as far as to try to help in a lot of different ways. But this came about and it brought back some memories. I know when I had the interview as far as with the Quad-City Times, they were asking as far as the history of that and without belaboring the point, it was playing at Jones field for those that have been around here a few years, they know what I’m talking about there out in left field now, pretty much.
Gary Determan: Right. Yeah.
David Nelson: And so, you’d get done with a game or even sometimes during the game, you’d wander over to the old metal outfield and you’d climb maybe those posts that kind of hold it in place and pull yourself up and watch a little bit of the game or you’d look through some of the rust holes as far as in the fence. And that was kind of the start. And I did that. Then, I’d shag balls as far as, you get paid a dime a quarter depending on the particular… the period of time. And so, we did that. And so, it’s had some real good memories from my standpoint. They put in the paper as far as going in and watching, well the money wasn’t there to go in and watch.
We had to do it through looking over the fence or through the fence. And I went to a couple of games when I was younger, but not very many. So, but I enjoyed the atmosphere. And so, you tell people that had been around, they get that. As far as those that haven’t been around in town very long, they don’t really understand as far as the role that I think that that place has played through the years. So, yeah. We basically decided that, “Let’s move forward. Let’s see the price tag.” And so, we’re hopeful that this has a positive impact as far as in the… we’re not saving the team. Don’t get me wrong folks, because we basically bought the rights to use the name. That’s really all that’s taken place here.
We’ve had people that kind of think it’s a bigger deal than that. It isn’t, but that extra cashflow for the place I think can make a material difference for as the organization. We’re going to get behind it. We’re going to try to promote this as well. Again, we care about this area and we’re going to put in the time as far as to see what we can do as far as to make this a real success in a small way that we can contribute to.
Gary Determan: Well, it’s got a nice ring to it. NelsonCorp field. I do like the sound of that.
David Nelson: Yeah.
Gary Determan: And you know, we have such a beautiful river front.
David Nelson: We do.
Gary Determan: And like you, I grew up in Clinton and I also would look through the rust spots to catch some of the ball game.
David Nelson: Yes.
Gary Determan: My first job was selling concessions in this stands-
David Nelson: Oh, it is. Okay.
Gary Determan: … in the Summer of ’69-
David Nelson: Okay. Wow.
Gary Determan: … down there. But you know, our river front is so beautiful with the trailer, the marina, the show… not the showboat. The band shell, the pool.
David Nelson: Yeah. Exactly.
Gary Determan: But you know, the stadium kind of is the entrance to it.
David Nelson: It is. It is and has been and will continue to be. And it’s just such a great asset. And again, as we move through this process, a lot of the history was shared with me as far as what’s taken place and it’s… again, this was a proud town one day and I think can be again. And again, we’re trying to make a difference. We’re trying to make people richer through our day to day hard activities as far as managing their portfolios, trying to help them as far as from a tax perspective, hoping that then, maybe some of that stays in this area. Shopping locally and giving to local charities or what have you, and again, it’s kind of this, this utopia world that I would like to create. And not that things were perfect years ago, but very few people know that at the turn of the prior century, there was more millionaires in this area than any other city in the United States.
And that’s just a shocking statistic to most people when they look around now. And so again, I don’t know what we can do in the next 20 years, but I’m sure the heck gonna try and I think this is just the start and we’re going to try to, again, I think we picked a great partner. Ted is a very energetic, ambitious, big thinker and we want big thinkers. You know, I don’t know, follow through, he probably suffers from like I do, follow through sometimes as a real problem. So, you have to have good people around you as far as to make sure that that stuff gets taken care of. But at the end of the day, this is going to be a really exciting thing as far as for us, our organization and, and hopefully for the folks at a head to the game. And you know, maybe there’ll be a few extra things down there because the extra money that’s flowing in the door as far as via the commitment we made to them.
Well, thank you. And congratulations.
Gary Determan: Thank you.
David Nelson: We’ll more with Dave Nelson, but let’s take a break for the weather brought to you by the Clinton Midas.
Eric Sorenson: Good morning, everybody. Continuing to follow some showers and thunderstorms for the first part of our morning. Then, we’re going to be dry for the middle part of our day. High temperatures will go up into the low to mid 80s as we head through the day. An isolated storm this afternoon, I think mostly dry, and we’ll be mostly dry until new storms arrive Saturday and Sunday. Our weather coverage continues now at wq80.com I’m storm tracking meteorologist Eric Sorenson.
Gary Determan: Some cloud cover out there. Temperature now is 71 degrees. Our update brought to you by the Clinton Midas.
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Gary Determan: NelsonCorp Wealth Management of course brings you Financial Focus Wednesday mornings, first Wednesday we go to the bottom of the hour. You were just in New Orleans, right?
David Nelson: I was. I was at a conference. It’s become one of the premiere spots as far as for conferences being held. So educational type stuff, ease of getting there, and a lot of the gatherings as far as in the financial services industry, they’ll have them at places that again, relatively easy to get to as far as that people can come to as far as to learn or whether they’re going to be presenting, what have you. And so, New Orleans has become one of these spots. And so, I guess it’s number two next to Las Vegas as far as for handling conventions. We were there probably a little later than we’d like to be. I mean, the temperature was 95 and humid. So, I mean, you didn’t do a ton of stuff outside. We walked to pretty much everything. I brought my wife this particular time.
Normally, these type of gatherings are pretty quick. You get in and get out. We added one extra day. So we were there three nights, but had a great time. The food is spectacular, by the way. I’m driven by my gut. I think like most guys, we’re all driven by our gut, and so they have fantastic restaurants down there, fantastic food. The prices are less than you would expect for the quality of some of this food. So, it was a really good time. It wasn’t just that. I mean, I had to work. I had a presentation to do down there as well as to sit in and try to learn from some others as well. So, it was pretty cool. I enjoyed it and got to see a little bit in the city. We did a two hour tour of the city and went to various spots and that was pretty cool. So, some great history down there as well.
Gary Determan: Yeah, no doubt. And I asked you if you ran into Dan Roushar because he is a yes, an assistant coach with the New Orleans Saints and Danny’s probably around your age.
David Nelson: Danny is one year older than me.
Gary Determan: Yeah.
David Nelson: Yeah, exactly. And again, for those that don’t know that haven’t been around a while, the Roushar family, very significant family going back, 20, 30 40 years, and his father was a coach for a long, long time and Dan was a spectacular athlete, you know, just unbelievable and went on and played big time ball and then became a coach here and here and here and ended up making his way to the New Orleans Saints and being part of that program. So, yeah. Honestly, never even entered my head. If it had, I probably would have tried to pick up the phone and see if I could track him down and say hey to him, you know, just a great guy. He was kind of in the vein… I had an older brother, my oldest brother Steve was a nice athlete, both a decent size, those guys, and whatever.
And I always told people they… you know, I was Little Nellie and that was the nickname.
Gary Determan: Little Nellie.
David Nelson: So, six kids in the family and I was number two from the bottom, so not quite the baby, but close to it. And for those that don’t know me, I peeked out at 5’9″, and in high school I was a buck 35, 135 pounds. So needless to say, I wasn’t doing the football action at a high level. My last year of playing was 10th grade and I had Marty Paul, that was 270 pounds, wipe me out one day. And I said, “That’s it. That is it.” He just got chewed out by coach. And so, we called it the student body sweep. And I was playing cornerback at that point. He knocked me out cold. I literally went flying and I was out cold. So I said, “I better find a new vocation.”
So as I would tell the family, I said, “I can beat everybody in foosball.” I was really good at that, but not football. So anyway, but yeah, Dan was spectacular and yeah, it’s just great to see as far as down there, had a couple of siblings that were nice athletes as well, some golfers, whatever chucked in there and so, so yeah, pretty pretty cool stuff.
Gary Determan: Now you said you did a presentation. Talk about that.
David Nelson: Yeah. So, we go on the road a fair amount and we talk about different things, and a lot of what we’re doing these days centers around creative planning and that creative planning typically centers around people that have tax issues. They have a tax problem that they may be aware of or may not be aware of. And you know, they have this asset that they bought at a fairly low price and it’s grown in value over the last 10 years, 30 years, whatever the case may be.
And so, there are tools that people can use, legal tools that they can use, to minimize their tax liability and or avoid it. And so, one of the instruments is what we call, it’s a special trust that allows you to be able to sell your asset and not pay any income taxes on that transaction. And that special trust is legal and available and has been utilized by wealthy people for many, many, many years. We’re talking about generations and the average person on the street isn’t aware of it. Where we’re seeing more and more traction is farmers that want to sell, but they don’t want to pay taxes. They were told by somebody a long time ago that if you sell it, you’re going to have to pay the taxes and you’re going to lose all that money. And so, it’s not true in every situation.
There are some instruments you can use as far as to get around that. So, I’ll give you one example. It’s a family down in Indianapolis. We are referred to them as far as from a friend out in the middle of the state of Iowa. And this person is the one that actually invented Dawn dish soap. And so, the Dawn dish soap, he created that when he was with Proctor and Gamble, he left there shortly thereafter, went out on his own and put together all these various products and they’re on the shelves now. You go into a store, you find many of his products that are there. Well, he’s at an age where he wants to sell and this is a pretty good size asset and we’re talking north of 20 mill will be the price tag as far as for this. And so, we came in and basically start talking to them in terms of, “If you did this, here’s what your tax liability will be. If you did this, here’s what it’ll be.”
And so again, once we get closer to an actual sale, it’s out there now as far as that he’s open to selling. He has two individuals that he’s talking to, we’ll decide whether we create this trust that I mentioned earlier that will allow him to be able to minimize the tax. There’s trade offs obviously, always folks as far as with this. It comes back probably the easiest term would be control, and most people like to own. We like to control. When you own stuff, you have tax exposure. When you control stuff, you can minimize that tax exposure. So again, there’s techniques, pretty cool stuff. So more often than not, that’s what we do. Now ironically, on the way back, I’m in Atlanta and I’m trying to make my way back to Molina with the storms down in around Atlanta, we had them here to driving back last night at 11:15, coming through that storm was pretty intense.
But anyway, down there, we ran into two people that are from the Quad cities. They work for Palmer College. They’re just visiting the college, Palmer College, down in Florida. They have three different ones, one in California, one in Florida, and the one here. And any way, these are the individuals that are in the area that we basically work with, which is the development area. And so, we we’re chatting with them about a few different things. They attend a lot of meetings. Actually, we have a meeting tomorrow as far as down the Quad cities, but what we talk about is this type of stuff, and there’s a lot of ways that people of modest means, I won’t say big net worth, big net worth obviously, it’s applicable. Tiny net worth, the stuff is not going to apply in your situation. This is for the middle and up, but the middle and up have a lot of taxes that they probably pay that they kind of are oblivious to.
And again, what we want to do is we tell people if there was a legal way that you could redirect money from the IRS to a charity and/or charities that you care about, and to keep in mind, these are dollars you can’t keep. You have a choice, give it to the IRS or give it to charity and/or charities that you care about. Guess what everybody always says? They’re going to give it to the charities. The problem is, they don’t know how to do it. So, that’s basically what we help them do. We educate them in that area. We work with other professionals as far as CPAs, attorneys, and we put together these transactions, some small, small being meaning probably about 250 grand, upwards of one over in the Dekalb Dixon down to Princeton, that pocket right there, we have a client that owns 8,000 acres of ground over there, and bottom line, he sold 4,000 at $12,000 an acre. Do the math. That’s $48 million that this guy basically was looking at. With that, he bought it all in the ’80s at very, very low prices, depressed levels, bottom line, a huge tax exposure. So, there’s some tools that people can use to minimize that tax liability.
Gary Determan: We’re speaking with Dave Nelson and NelsonCorp Wealth Management. I would imagine you probably just open some eyes when you talk to these people.
David Nelson: It is because the average person’s kind of accepted it. You know, there’s two things that are certain in life, death and taxes. And so, we say no, taxes are not a certainty. It’s a voluntary tax system. The key is to understand the tax law and be able to use it to your advantage. And there’s nothing illegal about that. And the tools we’re talking about, again, in most situations, they’re swapping an asset for another asset or it’s going to be some type of charitable vehicle that’s going to be in play.
Now, most people, when they think of charitable vehicles, they think in terms of the way that they do it as far as going to church, throwing the 50 bucks, the 10 bucks, whatever it happens to be in the basket and it’s passed around, picked up and that money’s gone. Well, these tools basically give people the advantage of retaining the benefits from that. So, you get the income flow and you get pretty much all the benefits from it. And so, it’s a great mechanism in the right situation. For farmers, it’s fantastic. “Hey, I’m fed up with the farm. I want to sell. we need to sell. Whatever the case may be, but we don’t want to pay taxes.” It’s absolutely terrific in that situation. So, there’s a lot of different tools that people have access to. The problem is most don’t know about it.
We’ve got… Now, I’ll be quick on this, but we’ve got a presentation coming up. We’re going to be doing as far as in September, and in September we’re going to be educating the educators. In other words, we’re going to be putting on a workshop down in the Quad cities for CPAs, attorneys, financial advisors, et cetera. We’ve done those before. We’re doing this through the community foundation down there. This is a big organization non for profit down the Quad cities that that we’re kind of linked to as far as in various areas. So, it’s a community foundation. But the other thing they’re going to do that they haven’t done is they’re going to do a public gathering. So, we’ve got a couple of attorneys, myself that are going to be putting this presentation on, going to be inviting people to come out and again, just rethink how they operate.
And again, controlling the assets is a better solution than owning the assets for people of medium net worth and up. And so, the key is to educate people. How do we do that? What’s the advantages? What are the disadvantages? Because we’ve got to know that as well. And does it make sense in my particular situation? We’ve got one in town that we’re working with that’s very significant, probably in the neighborhood of three, four mill that will end up going to charity. Then we’ve got one right now, it’s a gentleman selling, I won’t say what particular franchise, but he owns 13 of these franchises, all valued at roughly 3 million a piece and he’s going to be liquidating those and I think it’s going to be in the neighborhood of probably 5 million that will use these types of transactions on. So again, instead of giving it to the IRS, we want to give that to charities that he and his wife care about. The University of Iowa will get a chunk and Saint Ambrose is going to get a big chunk. So again, down the road, 20 years, 30 years down the road when these folks pass away.
So really cool, exciting stuff to me, probably puts many people out there to sleep. I don’t mean to, but hopefully-
Gary Determan: I’m on the edge of my seat over here, Dave.
David Nelson: … Good.
Gary Determan: Yeah. So we’ve got a couple of minutes left in the program.
David Nelson: Sure.
Gary Determan: We’re getting into the the Summer months. I know that saying, you know, leave-
David Nelson: Sell in May. Go away. Yes. Exactly.
Gary Determan: … That doesn’t happen anymore, does it?
David Nelson: Yeah. It really doesn’t. You don’t see that in any significant way. You know, markets have been extremely volatile. We’ve had day after day after day down, yesterday, we’re up 500 points as far as for the Dow. I think this morning, it was up when I looked at the futures this morning, so who knows? It just a crazy period of time. Our feelings are like most of the folks that we buy information from, I would not, not be greedy right now.
Things are pricey. And yeah, things could go up incrementally from here, but they’re not going up in any significant way from here. We’ve got a lot of headwinds and these headwinds, again, China’s just one of them. Mexico, we’ve got interest rates concerned. The Federal Reserve is pulling a juggling act, just not a time folks to get greedy. So, be cautious right now would be the overriding message from me. Obviously, this isn’t specific information to your particular situation. I got to get my disclosures in here so I’m not giving any individual advice, but the bottom line is generally speaking, probably more risk than return at this particular point in the cycle.
Gary Determan: Alright, very good. Dave, thanks so much. We’ll see at the ballpark.
David Nelson: Sounds good. Thanks. Gary.
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 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. For more information, visit our website at www.NelsonCorp.com.