The Checkers and Chess of Wealth Building with Freddie Rappina

 Freddie. Welcome to the podcast. Excited to chat with you today as a wealth advisor and kind of getting us to explore checkers and chess today. So before we jump into that, introduce yourself and let us know who you are and how you got to be where you are. Sure. My name is Freddie Rapina. I founded Opta Financial about 10 years ago, and I'm a little bit different than the No typical financial planner out there because believe that wealth building has many steps and takes many forms. And also depending on which game you're playing, which I call either checkers or chess. Will greatly determine on the capability of someone to advance their lifestyle. And that's the most important part for a lot of people. It depends on the lifestyle. It's not just like seeing a whole bunch of numbers on paper go up. It's about being able to afford. in my case, my daughter's cheerleading competitions and my son's travel baseball and those are the things that you enjoy life or so it's like, money is just money, but if we're not driving it we're not building wealth, not building income streams, it doesn't make a whole lot of sense. And you know, just here to help and, but I do want to shed the light on the fact that there are two different games in finance and people should understand and it shouldn't be screaming at the moon. Why do the rich keep getting richer? That's because you're not playing the same game. Yeah. When I was reading your application and you stating that, I'm like, wow, that is a perfect something to talk about. And understanding that we're in different, we're in different lanes, basically. Can you help us understand that better? Well, you get to choose. So I want to make sure there's, People understand it's choice. So checkers is the very standard financial advising models, save a bunch of money in retirement accounts pay off everything, live debt free. And hopefully one day your nest egg will be large enough. So you can draw an income stream out of that, that you won't outlive. And that can be, and that can be great for a lot of people. You can retire, you can be happy. So I'm not saying checkers is wrong. I want to be very clear on that with your audience. I'm just saying it's not chess and chess is, not just saving money, but also using leverage, taking out loans, buying to use those loans to buy cash flowing assets, such as real estate, such as businesses using good tax strategies and minimize taxes. That's chess. And and anybody can play either game. You might have to, or may want to play checkers first and get yourself a good foothold. But as, but if you have the mindset, Hey, I'm going to move over to. Then people generally will, but it's just a totally different way of understanding finance. Yeah, that is a great way to look at it and the traditional way is the most well known way and I agree that's like a foundation, but I always encourage and I share on my personal journey on my podcast that, I basically guided myself and I would choose a subject and I'd learn anything and everything I can about it. So I think that is. The model, not that I was doing it with investments, but that's the model of going from checkers to chess. Like you get good at that and then you can jump into chess. So say somebody is listening. They're like, Oh, I'm playing checkers, but I really would like to dive deeper into something. How do they then make that move? Or what are some thoughts they can start exploring to make that move to chess? It's a mindset shift. That is the biggest thing it is, it's a lot of chess flies in the face of checkers which is a little, for a lot of people, harder to jump over. So the biggest separator between the two games, in my opinion, is your attitude towards debt. If you're playing checkers, you want to be the hell out of debt and have everything paid off and all that. If you're playing chess, you want to be in as much debt as possible. But when I'm using debt in this context, I'm not talking about running your credit card up at, Walmart or Target. I'm talking about using debt correctly to purchase income producing assets. That's going to advance your wealth. So once people have that mindset, And they're like, no, we want to become more wealthy than switching over. It's you cannot save your way to wealth. It will not happen. In my opinion, you can save and save and save. You're only making chess players more wealthy by saving because they're not. Okay. They're like you, you put money into a bank. They're playing chess. You put your money towards mutual funds. The investment companies play in chess. You put money towards it. An insurance product, insurance companies playing chess. So understanding that not that the first part is wrong and that the first part is a probably a really good step, it's just the secondary thing that people aren't doing and, they have, they're watching financial grass grow and accounts for 30 years. And I call it the the golden wheelchair model. Because it's just eventually, hopefully you have enough money. And compound interest, in my opinion, and this is, one of the more controversial things I say compound interest, in my opinion, is the most oversold concept to the middle class. Not that it's wrong, that's, it's not wrong, it's math, it can't be wrong. It's just oversold. Because humans just don't live long enough for a compound interest to to really do what people want it to do. Now, if you lived 900 years like Yoda lived. Compound interest would be great by your 400th year, you'd be rich, but here in this galaxy, in this lifetime, while we only have so many sets of 10 for your money to hopefully double or whatever the case may be there's just not enough time and by, to do it, use it by itself, not have the other things that are amplifying it. So once people can understand that, then they can. Have a more clearer picture of like, wait, no, I do want to play chess, or I'm just going to stick with checkers. Happy with that, and that's okay too, but just don't be surprised that the chess players are advancing. that makes sense. So a couple different ways I could take this, but I'm thinking, What type of maybe money personality does somebody have? So you did talk about the mindset shift. But, this person might have the mindset shift, but is there a better personality to want to go after the chess game? I think it's gonna open somebody up there like, well that's too risky. That might be the declination for some people. What would be the advancement for other people? Yeah people who are just flat out sick of it are usually the ones that That can flip over. They're just tired. They may have, they have, might have a successful business, maybe six successful dental practice or something. I don't know. You pick the thing, doctors, lawyers, whatever. And, but, then, had a balance student loan debt and, this is going to be worth it when I'm making. 250, 000 a year and have all my student loans paid off or whatever. And then those years pass and they're like, man, good money. But I'm not feeling it. What is going on? I feel like I'm always on this treadmill and you are so that is the mindset. Like someone who's sick of that is a better candidate to switch over. But somebody who's happy as a clam playing checkers. I do want to say that I don't believe it's safer. I think the risks are different for sure. But there's risks in doing nothing too. So I think people are starting to realize that over the past five years with inflation and. job markets and everything else. So it's, those are the people that generally can flip over people who are sick of it. Yeah. Okay. So they decide they're sick of it. They meet with you. What's their next step? Going over the goals. Yeah, definitely going over the goals and making sure that they understand what they want. Because I think that is the most important. If you don't know what you want, it's really hard to Yeah. And, and and develop a strategy around achieving something when you don't know what you want. So just kind of having that discovery of, making sure people understand, like, okay, this is, these are my hope. These are my goals. Whether it be, I'm, I'm willing to go through the grind, but I do not want my children to go through the grind. Or, some people, I want to spend every dollar and I don't care if my kids inherit a dollar, like everybody's different, so once you get into that space where you are actually documenting the things you want, you're much more likely to achieve them. Yeah, so true. And I talk about that, that's creating that desire and that wish and that vision for the future. And getting detailed and once you do that motivation comes and I think that that helps that mindset shift up. Okay, let's do it. What's it going to take? So what are some options that they would have to take if they were to work with you? Are they in your in this example, are they a checkers player or are they a chess player? Because that's very. Well, they're just coming in to go chess. They've been checkers. Okay. If they're coming in and they have a good amount of money saved and they, they're, they've done a really good job playing checkers and they want to switch over to chess, We will likely talk about real estate and because that's, that's something people can kind of wrap their heads around a lot easier and something that doesn't take a whole lot of elbow grease for, like, if I say, Hey, we're going to go start a business and eat up another 40 hours of your life to try and get this business off the ground that, it's not, that can cause some pause. Right. So. But we would likely talk about different types of real estate investments, talking about how are we going to develop more cashflow? Is it even a good idea? Are you even there yet? So it's, it's really just understanding who that person is with a risk tolerance are with their debt capacity is and, and, and debt capacity is not the same as debt tolerance, debt capacity is like, okay, what can they actually do without, you know, letting the, the back end of the car, kind of swing out and lose control. But debt tolerance is like, well, I'm only comfortable with this. I know I could do this, but I'm only comfortable doing it. So just having those discovery meanings of just understanding like, okay, this is, this is what you can do. Let's talk about what you're comfortable with. But when I say comfortable, I mean, comfortably uncomfortable, like this, there's, if wealth was just easy to come by and people are comfortable just kind of achieving it, I think everybody would, everybody would be wealthy. So there, there has to be this, like, okay, I'm comfortable with this, even though I'm like, maybe a little bit uneasy. Yeah, yeah, it thinks definitely stretch goals. We have to have those stretch goals. And getting some support in, in our stretching is always good as well. So yeah, I like that. I love the compare. Well, the demonstration of like checkers and chess. And I think everybody understands. The financial game of checkers, we've done it at some point. Hopefully we've done it well, but yeah, if you're wanting to look for something, I did have a client and she was like, I've got to look at something outside of the box, and I'm like, okay, but you've got to be knowledgeable in it. You've got to learn about it and educate yourself if that's the right box you want to go to. Yeah. And I don't think there's anything wrong with checkers. I just, I just caution people. Like, is it working? So we have like roughly 300, 000 financial licensed financial professionals in some form or fashion in the United States. So, just logically, if there were 300, 000 people giving awesome wealth building advice, wouldn't the wealth gap in the United States shrink because people are advancing? But, they're not. The wealth gap is getting wider and much wider over the past 20 30 years. So, and I feel like there's a big do as I say, not as I do element in the financial world, where they're telling you to play checkers and then they'll turn around and play chess, but it's almost like a paternalistic element and like a systematic paternalism where it's like, no, chess would be too hard for you, leave chess to the adults. You just keep giving us money every two weeks into that 401k. And and don't worry about chess because you would, you would mess it up and, so it's, it's, I feel like there's a lot of that too, they're in my opinion is even like financial personalities going around teaching checkers like it's the greatest thing ever. And, but they're playing chess and making a fortune doing that. So it's, yeah, just watch how people's feet move instead of just what they say. Yeah, that's a great, reach out. And I, I didn't have a financial advisor till I actually retired and. I had earmarked my two different buckets and I said, okay, I'm needing to maybe move this out. He's like, but you want it to grow and I go, I did an earmark it for that, and so it's like important as the individual to really understand what it is you want and understand what you have tagged your money to do for you. And I think that's That's also the point in going to chest, like, okay, I'm going to go, but go with that boundary that, okay, I'm going to try this, I'm going to do this, this is the effect, I don't want to go, I'm going to stretch myself, but not too much, and really hopefully they can come out of it being that bigger, better person. So, I love how we're, Opening listeners, eyes and ears to possibilities. And I know everybody says real estate. And when you say real estate, there's more than one option, yes. There are some that I like better than others, of course, but there's definitely options , it's your point. Like you earmarked this bucket of money for something and now it's like time to use it and someone saying like, well, it can grow, it's like, yeah, but I am getting older and I want to enjoy life now. So so there's gotta be a, There needs to be a strategy where you can do both where you're growing the investment and also in obtaining income where you can put that money in your pocket and actually go to France or travel, whatever your thing is. Everybody's got a thing. I want people to enjoy. Whatever makes their heart sing, but probably not great to have 20 things. Whatever your thing is, no matter whether it's boating, like, people say like boating buying a boat's a terrible investment, well, it is if you're not a boater. But if that's something that you enjoy and enjoy life, if you're in the right position, you, we can, and we can purchase an asset to cover the liability of it. Well, that's great. So it's not all black and white. It's about enjoying your life. But it's, I feel like the middle class has been beaten down with this whole save thing. And though it's important and it's a part of the equation, it is not the equation if you're looking to build wealth. I agree. I believe that saving is the number one skill and habit to have. But then once you have that bucket of savings, that's a whole different beast, and that's what you're talking about. So hopefully listeners, kind of understanding that you can explore that, but I'd love for you to share about your book. You recently published a book. Let us, yeah, let us know about that. Sure, it's called Playing the Wealth Game. You can find it on Amazon or Bonds and Nobles, wherever you get books. It's a self discovery book. By the end of the book, I wanted to stay away from the financial mumbo jumbo as much as possible, and by the end of the book, you should know whether you are a a chess player at heart, or you're a check, you're a checkers player at heart, and whether you want to stay a checkers player, whether you want to switch but your eyes will be open to the differences, and understanding that things, if you open your eyes, and look, and look at it from an evidence based mindset, like, so one of my examples is like life insurance companies, how can life insurance companies have great years in 2020, 2021 and 2022? Like what you insure is life, life is dying. CNN's got a scoreboard on every night. How can you have great years? Well, they're playing chess and they're playing it very well. So, and I'm not saying they did anything wrong. I'm saying they're doing everything right. And you can play the same game, but it's just going to be on a much smaller scale, than a bazillion dollar insurance company, but the games aren't, aren't different. Yeah, I love that. Playing the wealth game. So listeners, go grab that book. I love that it's a self discovery. I think better understanding who we are with money sets us up to make those bigger jumps and leaps. So before we finish, is there anything else you would like to share with listeners? Well, if people want to contact me, they can go to optofinancial. com and schedule a complimentary consultation. We don't charge for consultations and have a conversation with us and see if we're a good fit for them. and let's see how it goes from there. I mean, it's low pressure. All of those links will be down in the show notes. So go connect if you're interested. If you want to learn more, if you want to. Go play the chess game and, pick Freddy's brain and then book that consultation. So, thank you for being here, Freddy. I appreciate the interview and the wisdom that you've left with us today. No, thanks for having me. I really appreciate it. Thank you.