0:03 hello and welcome to business lessons from the military I'm your host Kevin bemel and we are here every Tuesday at 10: a.m. Pacific time to talk about military history military Doctrine the practices of great military leaders all by way of distilling from those lessons that we can apply to our businesses and our professions and this is a way for me and in today's case my fellow veteran Kyle to give back to you our fellow citizens who have been so supportive of
0:40 the American Military for you know these last 20 years or so at least and and the the military the military invests so much in our training and our schooling that uh I I I want everybody in the United States to be able to benefit from from that investment in us so so I'm I'm very happy today to introduce my guest Kyle Packard uh as I mentioned a minute ago Kyle is a veteran himself and he is the founder and owner of um
1:15 impact tell p well strategies pardon me Packard well strategies okay there you go uh sorry I I for a moment I had your actually I had your business confused with another another guest that's going to be coming on a little that's quite all right there there's there's a lot going on yeah and um so you know rather than doing a a big long introduction I'm gonna get right into uh you know talking to Kyle so first of all Kyle welcome thanks for coming on the show thank you thank you for having me Kevin and thank you to all the viewers that are that are tuning in and and gonna listen to us have a little conversation about
1:50 financial planning and how military planning good military planning translates across Industries not just a financial planning but if you want talk about business planning as well um so as Kevin mentioned I'm just wrapping up a 25y year career in the military the first 10 years or so were what I would call pretty typical of of what you might think a military career might look like I was an infantry officer that spent time in uh Special Operations did did about four or five tours uh split time between Iraq and Afghanistan and I did that for about the first decade and when
2:26 I got towards the end of that uh as you can imagine I was fairly tired and so I was looking for I was looking for a change and I found strategic planning and it was very interesting and so the next 10 years my career is very atypical and has more to do with what we're going to talk about today which is really about supporting strategic de decision-making both planning and then leading leaders through how they can make decisions with respect to what they want what they can have and the different different opportunity costs that exist and so let me just real quickly what branch of the for for the
3:02 people who are real military Buffs which branch of the service were you in army army army okay and and you were you were an officer or listed I was um I I enlisted first so I I started out my career as a 17-year-old in the the Iowa National Guard and I went to basic training in between my Junior and Senior year of high school and so in a lot of ways uh the military was my first real job and my first only job until my mid- 40s um and so uh I I joined the National Guard and then became an officer through the RC program at the
3:37 Citadel spent the rest of my time as an officer retiring as a lieutenant colonel uh this year okay great and so and so you you moved from being in in you know sort of active Combat special op Special Forces um you you moved into the strategic planning realm um to the extent that you can and and I I interrupted you in this but tell yeah tell us you know what really that involved being in in the uh strategic planning realm absolutely and and so what we do is it's actually a very small core officers in the Army it's only about 400 of us and what they do is they
4:13 they spend a lot of time in investing education which was one of the reasons that Drew me to the career field in the first place and so I ended up going and getting my masters here in Washington DC at John's Hopkin sise and then went to some other programs at the army war college and effectively what they're doing is it's twofold so first they want you to be uh generally informed of military history because as your podcast identifies there's so many things that we can learn through history additionally what they want to make sure that you can do I is truly planned in the sense of how the military means it
4:48 with respect to lining out a vision and taking an organization from that vision statement all the way through uh objectives planning and assessment and so I spent the better part of two or three years uh going through that Education and Training and then went on for the next uh eight eight to nine years to serve on uh three and four star general officer staffs and and help them um support decision-making oftentimes I was in a role where I was outside the staff working as a personal staff officer for one of the generals and helping them uh
5:23 make sense of what the staff might be bringing them advise the staff and then help everyone make kind of decisions and endpoint Us in the right Direction so so you actually weren't in one of the G shops you were you were working directly for the general officer I spent time doing both and so I ended my career in one of the g- shops doing uh army war plans which really ended up trying which really meant more of synchronizing uh Army budget to the war plans but the first uh I would say six years or so we all spent on on general staff that's correct okay great and um
5:58 talk if you would some of the lessons you learned you know being both a a you know a g-shop officer as well as working directly for a general because I think those kinds of lessons are applicable to us the general from from a business perspective was your client in a way right he very he very much was and so one of the things that I noticed right away I really got a baptism by fire when I first started out uh I was in United States Army Special Operations Command uh you know somewhere between 40 and 50,000 soldiers are assigned to that
6:33 command very large includes Green Berets Army Rangers and all the like and uh the minute I showed up the general pulled me into his office and said Kyle we need to write a strategy and so I got a a lesson in not only just strategy development but then how to operate at that type of level because it requires a lot of buying and so one of the things that I learned very quickly is is the taxonomy of strategy we have to be very careful in when we talk about planning and our terms and so often times the biggest mistake I see planners whether it's in the military or
7:09 business or with financial planning it's trying to do too much too quickly and strategy is not the same thing as plan a goal is not the same thing as an objective and almost always I hear them used interchangeably we have to be very careful with that and so when I Define strategy strategy is a theory of Victory it's a it's a theory of accomplishment it aligns uh assumptions an if then statement supported by a series of assumptions that if we do this series of things broad broadly speaking then we'll have we'll accomplish this outcome usually it outlines goals and it
7:45 prioritizes those goals and the difference between a strategy and the plan is really the level of detail if you do not have a guid stone a a intent document it's very difficult to do detailed planning and often times what I find is uh People Are People gravitate to the details but then you don't understand the why behind things and so it's very important uh this strategy document to explain the why it's the theory of the case if you will and then you know subsequently to that that strategy document you have a series
8:20 of plans and those plans arrange objectives in time space and purpose to accomplish a specific subtask of one of those goals that eventually lead to the strategy I think a lot of times when we do planning we expect some sort of certainty and one of the things we really have to embrace whether it's in business planning or military planning is uncertainty and and the fact of the matter is when you build a plan you don't know it's going to work but inside that plan you must develop you know those measures of Effectiveness measure of performance we call them kpis uh in
8:55 the business world and you need to track those because ultimately those are the bridges between those assumptions that we talked about in the strategy if we assume we can grow at this rate we're making an assumption about revenues and if the revenue if we aren't tracking Revenue this is a very simple explanation but if we're not tracking Revenue uh in a way that leads us um to accomplishing this Vision then we'll know we don't know when to change we don't know when to change our expectations we don't know if something that we thought was going to work actually works and so I really just kind of fell in love with this notion of
9:31 trying to solve complex problems and laying them out in a way that was easy for my my client to understand and so you know as I started to look around the landscape and and try to identify career Fields after after I left the Army financial planning really just stuck out to me uh with respect to the ability to take what I've learned in the military and apply it to people's finances in a way that uh I felt familiar with it's one of the reasons why I work with veterans and retiring service members because they understand the value of planning when I talk to them about you know when I give my a similar Spiel to
10:06 all my perspective clients and I talk about the level of planning that we're going to do they inherently understand it and I think uh frankly that's a growth area for for all planning in all different sectors is really looking at planning more as a a science that can be can be repeatable but that requires using precise terms precisely and then implementing a structure around it to assist with decision making which is what I don't see I see a lot of you know strategies that really are plans and plans that are strategies and there's not a connection to what people are actually doing and then assessing that
10:41 back to see if what you said you were going to do is even feasible once it hits real world so so let's let's take a if if we can a very simple example first on the military side so let's say um you know you're a you're a um um you know a theater commander and you you need to um you know win a particular battle right um so you're going to implement some kind of strategy for winning that battle um I
11:18 don't know if we want to take a real world example or not but but can you give us can you give us an idea of what would a what would a strategy be for winning a battle and then how would you from that strategy um create I I guess it's the plan to execute that strategy right absolutely well interestingly enough I don't think the military does strategy strategy is the purview of our elected officials the military advises on strategy but inherently that strategy must be a political document uh you know for
11:54 example um FDR said Northern Africa AFC First Europe first and so his theory of victory was that if we settle things in Europe first we'll have sufficient allies and momentum and that's what we need to do to keep the Coalition together so that we can turn to Japan and Def and defeat um the Japanese there oh okay okay that would be strategy and oftentimes it's a great it's a great point because oftentimes I I see that mistake made where sometimes the
12:29 military can be guilty of putting the uh military expediency ahead of political viability so it's incredibly important one of the things that I did a lot of work with is with political appointees particularly when I was uh working at the Pentagon was trying to understand what truly um the civilian masters of the of the military actually wanted to align those things because ultimately elected officials are going to get what they want anyways and so let's try to align before we get to the real uh the real brass tax and so then that that
13:06 military commander needs to develop and we call these campaign plans in in military Parliament particularly in the Army and campaign plans connect operational planning to strategy and So based upon the Strategic goals of the uh elected official what is the what are the military courses of action that would best align and accomplish the strategy because sometimes the best option might be
13:42 military militarily inefficient but politically required right and so you could think of something like well you could think of Northern Africa to to continue with this example the military commander certainly didn't want to go into Northern Africa first they wanted to do other things but you know that's what FDR wanted to do and So eventually that's what um the Allied commanders came up with and so sometimes there's not a congruency in that and that's kind of where you can
14:17 get the military civilian friction mil you know the military civilian divide a little bit because those things all often don't align and then what that Commander needs to do is is walk that line in between politics and Military expediency to do what's most efficient given his parameters to accomplishing that strategic goal and so it's outlining his own vision and so the plan the campaign plan really becomes a support document of the strategy it's the supporting Vision to the strategy if I do this military thing how is it going to support
14:54 achieving this vision of the strategy and then it's all about how do I measure what I'm doing to see if uh the theory of the of my case on the plan side did it actually accomplish or is it actually accomplishing what i s what I thought it was going to do when I when I set out in the beginning okay so now let's let's take this idea of you know strategy and then the campaign plan that's that's created to essentially achieve the strategy and it's act in reality they're being
15:29 performed by really two different yes people if you will or two different groups we'll call it maybe literally not one person creating all this it may be one person making the final decision but right now let's trans let's transfer that into the business World in your case you're you're helping people with their financial planning their wealth Building Wealth advisory that so so let's do a if you would translate how that work then when you bring it into you know your your business activities
16:05 absolutely and thank you for for giving me that opportunity because I think it's really it's an interesting case study in in what we need to start doing with respect to financial planning broadly speaking and so the first thing I start out with is actually not numbers it goes to more what is it that you actually value and how do we align what you value with your resources your time energy and ttention and ultimately your funds your money how do we align that because ultimately what I think
16:40 Kevin is there's a lot of different ways to live a very wealthy life it's not always about a number it it but what's absolutely important is to have that alignment between how you're using your resources and what you want to use those resources for and what brings internal happiness and so I start out with the client at the center of the strategy and what we really do is is not we don't start with what age do you want to retire it's why would you want to leave work early and if you wanted to leave
17:16 work early what is that for let's talk about those motivations to really find it find out what it is that you want because once we really understand what you want the follow through the savings the invest that all stuff comes really easy when you know exactly what you want I don't know about you but anytime I've had Clarity uh planning and execution gets pretty darn easy it's understanding what is your why with respect to what we're doing with finances because it's not all fun right we right it's just it's just not um and so we really need to find that why I start with that and
17:51 that is the strategy component of it simultaneous to that I am uh onboarding documents and different financial information because the technical component to me is is that campaign plan equivalent and and what we're doing is I based upon my expertise and my evaluation of the current financial situation I'm laying out what we need to do in time space and purpose in order to achieve whatever strategic Vision that client has outlined and the way I look at it is there's there's three prongs of
18:27 this campaign plan that that apply to everyone it's cash flow it's growth and it's risk management and across those three lines of effort if you will I line out based upon where the client is at the progress that we need to make over a period of years to start accomplishing that strategy of what they laid out and you know really important to that is outlining uh those assumptions that we think are going to be the drivers of that success and then monitoring those over long periods of time and making slight adjustments and so it's you know
19:03 a financial plan is not uploading documents to uh you know to some sort of software and getting a probability score that is simply uh that is papering over what planning ought to be planning is an iterative long-term process whereas oftentimes in the financial planning sectors what I really see is ways to gather assets and it tends to be okay this is my minimum standard that I need um in order to show that I've done due diligence when in fact um that's not planning at all and so one of the things I think Packer well strategies really brings to the table as a as a look as a
19:40 complete relook at what it means to do financial planning so what is the typical time Horizon that you're working with someone in helping them develop their strategy because I could imagine you know it's it's it's different for someone who maybe is they've got their first job um you know after college their first job out of high school whatever you know they're new starting out versus you know someone like me who you know I'm I'm I'm on I'm an older guy I'm on the latter part of you know my career and so my you know
20:17 whatever I decide it's it's probably not going to change so much in the future right because I've got whatever another 20 30 years at the most whereas someone who's in his 20s he maybe has you know these days another you know 80 maybe even 90 years to go right so the strategy can change so how do you how do you look at the time Horizon and and and work with with developing that strategy you're absolutely right time Horizon does matter in the sense of are you accumulating or are you
20:59 what I what I look at is how well do you know your cash flow so whether you're 25 years old or 65 years old if you don't know your cash flow you don't know your savings rate and you don't understand what is the difference between your essential and discretionary spending and what your savings rate is I would say that you're basically in the same position as a 25-year-old and I have to to take that plan uh from a really low perspective and build it up over a period of time because um whether you're 25 or you're 65 the first thing we have
21:34 to understand is cash flow because if we don't understand cash flow and we don't sequence that in a way that's prudent um it's really it's really difficult to plan it's really difficult to accomplish anything because oftentimes we talk about spending rate I you know one of the the things I I want to help propagate as a as a financial planner is I think we talk way too much about how much we spend um I tell clients I don't care what you spend I care what you save so if you save 30% of your income and you spend the rest of the 70% what do I care
22:11 you're saving 30% and so it's a much easier thing to control too because now with automation uh particularly with and the the low barrier to entry to ETFs and high high yield savings rates you know I can do more with a 23 threey old today than has ever been able to do in history where I can start that 23-year-old that if I got somebody new right off the street before their first job and I said hey we're going to get a 25% savings rate you're never going to change that the rest of your life and it might be difficult the first two years but then what you find out is oh wait a second uh 20 saving 25%
22:47 is just standard practice and we just tit trate that up and by the time you're you're 30 years old you don't even notice that 25% anymore and and what really allows you to do is not only does it you know control your your savings your ability to compound over time it also lowers the amount of money that you need to fund your lifestyle because yes it's about savings but also it's about how much is going out the door every month right because if you only spend one doll a year well you can retire pretty early um and you don't need much savings and so I really focus first hard
23:24 on cash flow and that's kind of where I look at clients because if a client you know somebody comes to me and they're 65 they don't understand cash flow well we really need it even though they're almost in that accumulation phase we have to start over and we're going to have to to build that out and so when you talk about time is you know I I really focus on training to standard not to time and so I have some clients that it takes six months to get through an initial plan because I also don't rush right I mean if we're if we're unaware of our current cash flow well then we probably should have two or three months of data before we make any Grand changes on how we want to automate things and so
24:01 you know I have a client I have several clients I'm working right now right now with that I said hey uh we're gonna get things in motion but I'm not gonna we're not going to make major decisions for three months because I need the data to tell us what we can do now that doesn't stop me from managing risk now I just go to another line of effort and I say okay let's look at the risk that you're taking and the vast majority of families are underinsured with respect to term insurance right um You have a lot of families that know Soul bread winner and they might have some group insurance at at their workplace for a couple hundred thousand dollars but the reality is you know the the present value of their
24:37 human capital is in several millions and uh you know most young families need more term insurance than they actually have and it's relatively inexpensive and so I'll do stuff like that where we'll manage risk at the same time as before we make decisions but I don't I don't rush making decisions I don't I don't think that needs to be done I think that's time it's it's situation based M and and what I like to tell folks is it usually takes somewhere between four to six meetings to kind of get things sorted out you know the first meeting is a get to know you the second meeting tends to be a lot of goals and and values oriented less money and then we'll have
25:14 one or two meetings where we're clarifying intent and basically I need to come back after I look at numbers and say this is what I see uh these are some of the options here's some here's some uh different directions we can go with what do you think about it because I treat my clients like they're my commander and and I'm the staff and I come back on a fairly regular basis and say hey hey boss what Guidance Do you have for me this is what I found out this is the update let's see if um you know here's some things we haven't considered and so ultimately that goes back and forth for a couple meetings and then at the end it's not a presentation
25:52 of a me of a plan it's it's it's a serious of decision that the client has to make so it's really about okay um you tell me you want to retire at 60 but your savings rate is this these are the options we have this is the type of Investment Portfolio that would support that um and I do a lot of uh liability matching so we're laying out everything in time space and purpose and then building the portfolio to that and so I need Cent I you know you I need client buying I need client decisions in order to to implement and so really it's it's a joint planning process between myself
26:28 the client I just don't go into my office and come out with a plan with a tablet it's it's a it is a joint experience and you know somebody who wants to work with me is goingon to want to have to roll up their sleeves a little bit and that's okay uh you know I'm going to do the heavy lifting but uh you know the best type of planning is participatory sure so going back to the military realm for just a moment let's say um you know we I'll just use the the term the president because in the end he's the commander-in-chief of the Armed Forces
27:03 right so right from a strategy standpoint presumably it's the president making the okay so so let's say the president as a strategy he wants to you know contain China he wants to contain Russia right he wants to um you know support uh you know an active war in the Middle East and he wants to support you know um drug interdiction in Central and South America and he also wants to um I don't know protect Filipino Waters and and Taiwan right he has this whole long what doesn't he want to do
27:39 Kevin strategic objective right and then he turns to you and he says he says all right you know colonel colonel Packard um make your plans right to to me at at some point you know the military would kind of throw their hands up and say you know Mr President um we would have to expand the military by you know factor of two three four to you know accomplish all these objectives right so same too in in the financial planning right so how do you help someone who maybe their strategy vision is you know far in
28:16 excess of um you know the the resources that they have available to them right because that's a great line of questioning and I and I'm glad you brought that up because it outlines what I think is the most important um characteristic a a planner can have and that's the ability to speak truth to power or cander and one of the things that I think is incredibly important particularly when you know when we're talking about life and death and we're talking about National Security but even more so when we're talking about people's life savings is it's very
28:51 important to just be honest with folks and uh and lay out what they can do given their resource is and let them make a decision for themselves and you know one of the the things that the president always gets very upset about is when when the military kind of tries to move resources around to make the decision easier when in fact it's just a shell game uh you know you saw that uh a lot in the the debates around Afghanistan when to pull out when to Surge troops and and you saw a president get very upset with the military and I I
29:26 think as a financial planner I have to be very careful with my clients I mean I'm always a you know when it comes to personal finance given the amount of time people usually have to your point about you know a 20-year-old having you know decades to to grow their wealth I'm fairly optimistic uh that being said at some point it becomes just simply a math equation and it's about what are you willing to do and what are the tradeoffs you know a a family of eight probably is not going to be able to afford to send all eight children loan you know student
30:02 loan free to college absent some sort of uh you know family windfall type of inheritance situation that's just the ma the fact of the matter and so you what you can do is you can prioritize effectively you can do education to a certain extent maybe 60% of what you asked for or you can secure your own retirement what do you want to do Mr or Mrs client because we're only going to do one of two things and you know I want to be there to be that support system during that decision making I might not always agree with the decisions my clients make and that's
30:37 fine I don't need to necessarily agree as long as it's financially prudent and it's in their best interest you know there's always some things like let's not you know take all the 401K assets and put it in a in a crypto ETF or anything like that I get a little upset about those things but but generally speaking I you know I don't have a I don't a dog in that fight so to speak in the sense of what decisions people want to make I really care about people understanding what the opportunity costs are and letting them make the most informed decision as possible so I I'm I'm curious um because
31:13 like you I've had a lot of experience both in and outside the military and um I would say the highest compliment that was ever paid to me in my career was when a Marine Corps Colonel at a at a ceremony said you know Kevin or Chaplan bemel he speaks truth to power right like wow you know because because I felt like that is something that we're required to do especially in the military where we can be talking about you know people's lives right it's certainly a power of the chaplain Corps and and to your point about that one of the reasons they made my job field um
31:49 non-c command track was for that exact reason was so I could progress in the military um doing jobs that took me away from things and I could say controversial things and not get penalized and and frankly uh I think the value there's a lot of value in having you know because at the lower levels that's what the chaplain does you know when you talk about smaller units the chaplain is the one that can uh you know speak speak more truth to power uh you know on larger staffs you kind of have a different Dynamic but uh that it's
32:25 incredibly important so in your experience and and and I don't know that this is an issue but um who who seems to be more comfortable in accepting the the reality of a situation you know is it people with a military background is it you know civilians who maybe because they so respect the military are willing to you know listen to to to you know what a veteran says I'm just curious about that
33:01 dynamic because I think there's a lot of misunderstanding about it certainly among our fellow Veterans as to how you know our our our fellow civilian you know citizens May deal with that yeah and frankly Kevin it's one of the things I've avoided and so i' I've been derel in that Duty as a veteran to try to expand this now I I certainly take clients who aren't veterans that out but one of the reasons why I wanted to focus on Veterans and retiring service members is I knew that there was an expectation of that level of planning
33:37 and that level of cander and one of the things that um I wanted to try to avoid is trying to acculturate clients right I I wanted to find a niche that was um amable to me right out of the bat now if if someone is listening and they like this I don't turn people away but you know I I also don't want to spend my time marketing to folks that I don't think will be interested in the service and so one of the things I'd like to do is is this is really a test case with veterans and see
34:13 how this goes and see if your Packer well strategies wants to expand and service more individuals as we as we grow and add advisors and the like so it's certainly something I'm considering but um I I think I didn't want to I didn't want to test that to begin with as long as testing a new business just be completely Frank with you yeah no I I mean it certainly makes sense I I I will say that um I found in my own practice that um when I go in and I I as you as you know I'm a um essentially an independent trustee a professional
34:48 fiduciary when I go in and and and start figuring out what's going on in a situation when people find out I've been in the military um you know they they they kind of smarten up a little bit you know in term civilians do because that there's kind of this expectation that um somehow I'm gonna hold them to a higher level um and and and have you know have those kind of expectations um but but it but the other the flip side of it that's so interesting is um I tend to be much more teamwork oriented yeah um and and that
35:26 too is a grow you know outcome of of being in the military and I find that civilians really like that they they feel like they are really part of something um you know as opposed to what may have gone on before where they felt more you know disconnected so it like I said that that Dynamic I think is is an interesting one for us as veterans to to consider and and such so we're we're um we're getting you know close to the time that we have to wrap up I it zoomed by it was a fun conversation so we can keep going I've got some time if I mean yeah
36:02 so I just want to see what what what else can you tell us about the the um principles that that you learned as a military strategist that you've pulled into your business kind of open up the aperture real wide now and that's great thank you for doing that because the one thing I didn't really get an opportunity to discuss was the the difference between uncertainty and risk and that is something that is absolutely applicable to the financial planning world it's applicable to the business world and it's certainly
36:37 something that both you and I dealt with when we were still in the service uh I I think it's a common misconception uh we use risk almost universally when actually we mean uncertainty so risk is is something that be Quantified I we understand what the standard deviation is of the S&P 500 to a point where a reasonable degree of certainty I know how much money I could lose how much money I stand to gain within a pretty fair confidence I think you would agree with that however absolutely I I don't know with any degree of certain certainty
37:12 what the world's going to look like 12 months from now and and simply our financial lives are just a byproduct of whatever the world looks like and so to say that a retirement plan has a 90% probability of success success is is ridiculous I think uh it it has there is no probability of what uh I I find that very concerning that we even discuss that because to say that we're going to be able to predict 90 years out or 60 years out or whatever it is five years out we just don't know but what we do know is what we have at the
37:47 moment and we we know what that would provide us given a certain level of of of return and so that's why I focus my practice almost exclusively on uh building portfolios that are liab that match to liabilities and rather than some sort of risk probability and so what I what I ask my clients is and that's why I I focus so much on cash flow it's because one of the first things we want to do when we're in retirement is wouldn't we want to immunize that spending if you tell me you spend $60,000 a year on essential spending so that's you know if if the depression happened and you needed 60 you could live on
38:24 $60,000 wouldn't we want to immunize that why would we want leave that to chance you know and and and to what date so what I like to be able to do is tell my clients hey we we've your counterpart risk is the United States government we're going to use this in we're going to use a mixture of inflation protected and nominal bonds we're going to invest those in the United States government and you know over a period of 30 years I can look at you and say with reasonable amount of certainty you're going to have $60,000 every year okay that makes retirement very different I think because a lot of people they look at it well hey I have a
38:59 80% probability of not running out of money I don't know what that means and I to me that doesn't it's not very helpful right and so I like to look at things in the moment what we have and what our projections are uh with respect to returns you know it's just a present value calculation really is of looking back and trying or looking forward and trying to estimate out with a reasonable level of certainty again uh where our resources are going to take us and so I don't I do not make the assumption that there's risk in financial planning now
39:35 to a certain extent when we're talking about portfolio construction of course right and we're talking about you know kind of at the very tactical level it's uncertainty and how do you build a plan that deals with uncertainty one of the uh illustrative examples that I like to use and it's on my website is talking about building boats and so if you're familiar with Lake Powell in Utah the water tables change upwards of a couple hundred fet every year and the shoreline can change miles and so the thought experiment is if you wanted to build a house to enjoy Lake Powell would
40:12 you put it depending on your risk level we would place that house either close to the shore hoping that it doesn't get washed out or we might put it way back where you wouldn't enjoy the lake and rather than build a house I want to build you a boat so it's something completely different right but it still solves the problem and so it's accepting the fact that we don't understand how the water table is going to change so let's just change our plan so it moves with the water
40:47 table that's that's that's my Approach and you know I I I I take that look at things after five combat deployments and understanding the unpredictability of things I just I laugh when people try to you know make predictions and and about risk and probabilities I just don't think it's I don't think it's much value particularly the longer you look out and the more something is um qualitative instead of quantitative right well and and if the events of the last several years haven't shown that you know the unpredictability right who predicted
41:24 covid who predicted you know what the response would be the impact on our lives not just our financial lives but our our our our overall lives right there and and who would have predicted how the recovery from covid would have been yeah the way it was right I mean no the the stock market's a great microcosm for that it's a great case study because what you see all the time is all sorts of different movements that you can't explain within several years but over 20 25 year periods you you see a a lot of consistency and that's the difference between being an investor and being a
42:00 Speculator and uh you know Packard wellth strategies we just invest we don't do any speculation right right yeah and indeed if you look at whether it's the Dow Jones Industrial the S&P it really you know the long-term trend is is a a growing economy and um you know increasing wealth Etc and and so you know we we can become a part of that if if we choose to rather than find a time you know oh get in the market now and jump out and all all that kind of craziness I think the flip side too is there are you know funds out there that
42:37 um they they they feel they can manage the risk so well that they they have features that will protect on the downside and and and things like that so those wouldn't be offered if you know you couldn't predict with some sense of standard deviation Etc you know what those if iable risks are right uh to a certain extent yes uh the the problem with funds like that often are the taxes and the fees and so uh and their ability to be uh repetitive over time so it's not that they don't exist but as a as a
43:12 financial planner or trying to select different funds for a client's asset I have to look at it in the sense of what's the what is the return after fees and after taxes and oftentimes um taxes will be a big bite particularly in in funds that manage the downside risk because they're using options and and then additionally we have to select the right managers at the right time and so to to me is there value in it if you want to make that your life's purpose in trying to find a manager that can do those type of things
43:48 and outperform uh after fees and taxes uh that's that's fine I think there's better things to do with our time M and I you know when I look at it over a 20-year period uh the amount of volatility that we can tamper down a portfolio with just using fixed income uh over a 20-year period uh there's you know oftentimes the investor comes out better with a rather simple portfolio and so I I try to keep the portfolios fairly simple I I make sure that the portfolios I build I can explain to my
44:23 clients and I feel very confident that anyone who's interested will can understand their portfolio in about 15 minutes and that's really important it's very important to me very good well you know what we're we're we're coming up on our our time uh now so um I I really appreciate great conversation and yeah I enjoyed it it was a lot of fun yeah so um you know love to have you back um you know again and and we can delve into maybe some of the the deeper aspects of this um and and and keep keep building on this
44:58 knowledge but but Kyle I appreciate you coming on the show today and anytime Kevin I enjoyed it great so I'm gonna have you just hang tight here while I wrap things up then we can speak offline for a minute great folks thank you so much for joining us um if you are interested in getting in touch with Kyle his contact information will be in the show notes after this episode posts on YouTube so his his website email address Etc will all be there and you know feel free to reach out to Kyle um and as as as he noted you don't have to be former military but but you know like like all
45:35 of us I think and this is this is this is smart you know we want to work with people who are comfortable with our style and we're comfortable with theirs so I would I would uh encourage you to keep that in mind uh so that having been said tomorrow at 10:00 a.m. Pacific time is my show people making money and we will be talking about um it's what you build not what you were born with that counts so I'm actually going to be talking about one
46:10 of my favorite books it's called um um Talent is overrated and it's particularly I think applicable to to our professional and business lives so I invite you to tune in then and then next week Monday at uh 10 am is my show um uh trust and Estates weekly and my guest is going to be my very good friend Bill gross and bill is going to be talking about the changes that are happening in the real estate business due to the um
46:47 the the lawsuit against the National Association of Realtors so the way that we work with real estate agents changed um roughly a couple of weeks ago and so I invite you to tune in and hear uh Bill's thoughts on that he's one of the most knowledgeable people in the country on that subject and then a week from today we'll be back for the next edition of business lessons from the military so again I thank you very much for joining me Kyle once again thanks so much for coming on the show and signing off as I always do Marie darling you are my bell
47:23 courage at all times