Local Market Monopoly

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Michael Watkins: As opposed to you got someone who's working a nine to five with a big company or whatever, you have a lot of retirement benefits available to you that you don't get on the small business side. Most popular is a 401k, stuff like that. Well, I always tell people my retirement plan when I own my training studio was my training studio. The 401k was me. So it comes down to, like I said, really just sitting down and having the conversation with a professional, someone like me, if you know somebody or whatever, hit 'em up.

Clarence Fisher: Welcome back to Local Market Monopoly. It's Clarence Fisher, your host, and today we're talking with Michael Watkins, uncovering the top life insurance mistakes that small business owners make your small business owner listen closely because the decisions that you make concerning your life insurance could be the difference between securing your legacy and losing everything that you've built. And this episode we'll uncover the single biggest mistake that small business owners make. And we're also going to explore the one thing that no business owners should ever assume about their coverage because this comment oversight could leave your family and your partners financially stranded and do not miss the shocking truth about why relying on your corporate life insurance could be a risky gamble. Most small business owners are never approached or hear about this from their providers, so stay tuned as we help you avoid these costly pitfalls and protect your family and your business.
You are listening to Local Market Monopoly with Clarence Fisher uncovering the tools, tactics, and strategies the most successful small businesses use to dominate their local market and own the block.
Welcome back to the show. It's Clarence Fisher back at you with the tools, tricks, tips, strategies that the most successful human beings in the world use to dominate their family fitness, not dominate their family. You don't want to dominate your family, but to win at Family, fitness, faith, what other else am I forgetting, Mike? Oh, finances.

Michael Watkins: There you go.

Clarence Fisher: Finances for sure. Which leads us to the reason, the entire reason of today's show. Special guest today, Michael, quote Mike, quote Watkins. Mike, welcome to the show.

Michael Watkins: Thanks, man. I'm happy to be here. And yeah, you say we've known each other for a long time, but we're aging like a fine wine though. We only get better with age as long as we've known each other.

Clarence Fisher: You're aging. I'm not buying into that. What's so funny is my wife, after 40 some odd years, yes, I gave everyone the Asia has finally gotten me to moisturize, right? I never did it before. I'm like, I'm a man.

Michael Watkins: I'm here, man.

Clarence Fisher: You know what I mean?

Michael Watkins: I don't know where to buy it, but it's on my counter and I'm using it. So

Clarence Fisher: That's what I'm saying. I got this killer kit for Christmas and I'm like, okay, so this is the hint, right? Anyway, I started using it and we were on date night the other night and she's looking at me, she goes, I can tell I'm really

Michael Watkins: The not so subtle hint too. I love you said that, right?

Clarence Fisher: Keep doing that right. To me, it just makes my two laugh wrinkles more pronounced, but

Michael Watkins: They're softer for soon.

Clarence Fisher: Exactly. Exactly. Alrighty. So what we're talking about today, man, is we've come off of a hell of a year with Covid, and one of the things that ran across my mind almost instantly is like, is everything are all my boxes checked? Are all my ducks in a row? You start thinking about your mortality and just life. So I can imagine you dealt with that. It was more heightened last year for you,

Michael Watkins: Right? Oh, absolutely. I mean, with the Covid and Corona and everything, whatever we're calling it now, we changed names every three or four months.
There was a heightened sense of just the unknown, right? I mean, we didn't know what we didn't know at the time when it hit. And then that led to businesses having to figure things out, struggles there led to the market, doing some crazy stuff up and down, up and down, sideways, whichever way you want to go backwards back to forward, which is nice. But yeah, it made people take a big look at where's my planning? And because of this crazy year we're having, am I still projecting to be where I want be when it comes down to it? And then also, like you said, we didn't know what we didn't know, and I'm going to die kind of started creeping lot. Maybe not today, but eventually. I mean, it's kind of a guarantee. So if I do go earlier than expected or earlier than I want to, is everyone else that I love and care about going to be okay. So yeah, definitely last year was crazy to say the least in our industry. It was very active. We'll put it that way.

Clarence Fisher: Yeah. So one of the big problems that you solve that you specialize in solving for people,

Michael Watkins: Well, I get that question a lot because you hear financial services, you hear financial advisor, there's a lot of ins and outs and different ways to say things that all kind of mean the same to some respect or another. But when I get asked simply, what do you do? My first answer is I take away people's fear of money. And that's about as simple as I can put it. Whether it's the fear of is my spouse, my business, my family, my kids, if I don't make it home from work today or the other extreme, hey, it's time for me to not work anymore. That's why we're all driving so hard right now, is my lifestyle going to be what I want it to be? So if I can help people just take an introspective look at that and help them put in plans and strategies and things in place to where we can take away that fear, what can they do?
Then they can get back to living life. They can get back to enjoying their day-to-day work, back to enjoying their family, not worrying anymore. And again, going back to last year, that was a big question, what's going to happen? If you remember, we've had this conversation for over a year now. We had no idea what was going on half the time out there, depending on which news you're watching or what article you're reading or who you're listening to, it was all over the place. And so when there's unknown out there that typically in everything I've had conversations with leads to fear, unknown leads to fear. So best way to do it is, Hey, let's talk about where you're at. Let's talk about where you want to go and let's talk about the what if.

Clarence Fisher: Yeah, I think one of the things that kind of opened my eyes when we spoke about this the first time was realizing, I don't know how many people think that they actually have enough insurance, but they're underinsured, which I realized was the case for us. But that's probably the case for a lot of people, more than I'd like

Michael Watkins: To admit, honestly. And I don't always talking about that or leading with that. And just because I am a life insurance agent, and if I'm saying you're underinsured, let's going to throw up a red flag for people, they're think you're trying to sell us right numbers. I mean, that's simply put. And most people don't take time to calculate those numbers to make sure, hey, everything is covered if I'm not here tomorrow. So I run into this a lot, especially it's kind of one of the pitfalls of the industry itself where people think they're covered and until they run those numbers that they realize they're not. And let's take for example, if you will, a lot of companies out there will give you life insurance as part of a benefit. Typically, it's about, I don't know, one to two times your salary. That makes sense. Let's just use that.
If you don't, I'm going to go into a case study. But if you work for a company that's given you that, that's great. I mean, that's a great benefit to have. It's usually super cheap, but if you start doing the math on that, it'll throw up some flags. For instance, let's say you have two times your salary where we're at, okay, we're talking about our area local here. Good paying job in our area is, I looked it up about 70,000 a year. So if you got two times that, you got about $140,000 of coverage, right? Okay. Now where I live here in South Tulsa, Jenks, average home value is about 195 $200,000. Okay? So if you owe anything on that house, let's just say it's a brand new house and you pass away and all the coverage you have in place is that 140,000, you're not even paying off the house.
And now let's say you're the primary breadwinner in your family or the sole breadwinner in your family, where does that leave? If you have a family, wife, kids, what does that leave them to have to do? One they got to go back to may have to sell the house. I mean, it can snowball effect from there. So really what I always tell people is just take another look at those numbers, calculate 'em out. We have some formulas we use. We have some equations we use. Very simple to help people kind of figure out what their value is, their economic value and their risk value, and then compare the two. If you were to not make it home from work today, is everything going to go on as planned, financially speaking, obviously.

Clarence Fisher: Right, right, right. Yeah. The day's going to be a little different for sure. If you don't work, make it home.

Michael Watkins: That's another deal. I hope I never come off when I'm sitting down with someone saying or making them feel like I'm trying to replace a person. We can't do that. Your life's turned upside down and it's crazy. A lot of the conversations I have is kind of that doom and gloom conversation. I wonder why people don't want to talk to me, but they're important. I mean, most necessary conversations aren't the easiest ones.

Clarence Fisher: But even after we spoke and then I started doing digging, and even with the most conservative people like Dave Ramsey, Susie Orman, I think Susie recommends 20 times whatever your salary is or something. I mean just something. Basically it was like, yes, you are underinsured. And one of the things that I ran into in talking with my wife, and I am just saying this because probably a lot of people run into is like, well, we already have more insurance than probably what anybody in your family has seen in your life. You know what I mean? We don't come from any money. We got good jobs now, but it's basically like, dude, if something happened to me, you already have enough. And I'm like, well, but it's not enough really. You know what I mean? And so end up having that conversation once you start getting past the, I don't know, you start getting into the million dollars of insurance or stuff like that.

Michael Watkins: Yeah. Well, I mean, I've heard 20 times your income. There's a guy, I've been in my office a long time there, and if he's really having someone just kind of having trouble trying to connect with that number, he'll just say, add a zero to your annual salary. Maybe that's the starting point for some, but you're right. And I never want my clients paying for anything they don't need. The idea there is let's put strategies and policies if you will, in place for the right timeline when you need it most early Now, as the kids grow up and they get out of the house, we're going to need less. So let's formulate a plan and a timeline. So we're only paying for things we need and also that are important to you. Because going back to what you said a minute ago, Hey, my family never had this much.
We don't come from money. We've all made a due. And I have those conversations a lot. It just comes down to the individual and their goals and what's important to 'em. I think most people care about their families, care about their finances, obviously. I mean, all my clients are because they wouldn't be talking to me if they weren't. But are you extremely legacy driven? If you're not no longer here, do you really want to make a huge impact? Your kids, your grandkids, maybe even your great grandkids, who knows? But that all factors in it starts with the right number. That's kind of the baseline measurement. Let's make sure everything is in place just baseline, everything's covered. And then we start talking more about goals, dreams, aspirations. What do you want your legacy to be and what can we put in place to make sure whether you're here or not, that goal and that legacy lives on.

Clarence Fisher: I love it. I love it. I want that picture of me above the fireplace where it's old and it's creepy, right? But it's like that's great. Grand Pappy.

Michael Watkins: I think I'm going to do that with the George Costanza pose though.

Clarence Fisher: Oh yeah.

Michael Watkins: Oh yeah. Oh yeah.

Clarence Fisher: He's the reason you're going to private school. So you've covered some of the advantages of insurance, but let's talk about this strategic planning and all that stuff. What are some of the other advantages that a person has when they step back and say, Hey, let's be strategic about all of this. We talked about with the whole covid thing, I know at least for me, it just became top of mind, I imagine for a lot of people. And then after things kind of calmed down a little bit, it's like, okay, well we were actually being reactive. So now since this is top of mind, let's be strategic about this. What should we be doing? What are the advantages to be had from that?

Michael Watkins: Yeah, and again, simple way to answer that, Clarence is what I said a minute ago is you got to figure out where you want to go when it comes to financial planning and strategic planning, if you will. First thing is you got to know where you start. So most people don't even take time to do that. What do my accounts look like? What do my bills look like? All that. You got to know where you start. You got to have a starting point. And then from there, you got to paint the picture of where do I want to be in the next, depending on your age, 20, 30 years or shorter in some cases, longer in some other ones. So you got to paint that picture and you got to my opinion, what is it? Feel it, taste it, see it, smell it, everything. You have to really have that in play. And then you can to the nuts and bolts as far as different strategies to put in different policies, if you will, investment opportunities that may come up. So that's kind of a generalistic thousand foot overview, but that's really where I spend a lot of time with my clients is painting that picture, helping them to really put it all together and then addressing where they're at and then what is it going to take to get us there?
Okay, how are we going to go from point A to point B? And then it's just about working the plan. So if you want to get super detailed, it really comes in today's day and age, you're looking to mitigate risk and you're looking to maximize return, right?

Clarence Fisher: Yeah, for sure.

Michael Watkins: That's what everybody wants to do in some shape or form. So there's a lot of stuff out there though that we work with our clients on a daily basis that most people don't even know is available to 'em. And a lot of my clients, I mean, I was in a small business owner myself before I switched over to this full time for about 17 years. And I work a lot with small business owners, and as I said, you are too, right? So there's a lot of things that are available to us that we can take advantage of that most guys don't know is out there because they don't have someone like me calling on them, which is kind of where I found my niche to begin with. It was like, Hey, I didn't have a whole lot of people in this profession I'm in now calling on me. And there's a lot of opportunity here as a small business owner that I could really put myself in a good situation. And so I guess just they don't know it's available to 'em as opposed to you got someone who's working a nine to five with a big company or whatever, you have a lot of retirement benefits available to you that you don't get on the small business side.
Most popular is a 401k, stuff like that. Well, I always tell people my retirement plan when I own my training studio was my training studio.
The 401k was me. So it comes down to, like I said, really just sitting down and having the conversation with a professional, someone like me, if you know somebody or whatever, hit 'em up. I don't know if that quite answered your question, but I think that what I'm trying to get to there is most people just don't know exactly three things in my mind. They don't quite have a grasp on where they're at because they haven't taken time to really nail it down. And then from there, they don't quite know exactly where they want to go until you help walk 'em through that to paint the picture of what they want it to look like. Once you have those two, you can start piecing the puzzle together. It's funny, I just met with a couple this week who my original meeting with them was two years ago. It took 'em this long to really, and I'm not judging anything or not bash, I'm just saying that's what I'm saying. Most people don't know exactly where they're at. It took 'em two years and then things happened in there. I'm not saying they worked on this for two years straight, but it took 'em two years to get back to me to have the second meeting of, okay, here's all of our, what can we do now?

Clarence Fisher: Oh yeah. I mean, I totally relate. I mean, you and I had a meeting and then I called you when covid hit

Michael Watkins: What I'm saying. Yeah, that was about a year and a half

Clarence Fisher: Or so. Yeah. It's like, Hey, remember that thing we were talking about? And which brings to, before I ask this, I just popped in my head this, I don't know how blasphemous this slogan would be, but gain the world without losing your soul. I might get struck down for that. I don't know, tons of,

Michael Watkins: I dunno how you interpret it, I guess

Clarence Fisher: You're right, right, exactly. Exactly. tm, I better TM it. Let's hit on some of these. There are tons of myths and misconceptions about your industry. What are some of the biggest that you run into?

Michael Watkins: I think we touched on the biggest one, and you actually brought it up earlier in the conversation was I'm covered for that.

Clarence Fisher: You know what I mean?

Michael Watkins: I have enough. Hey, there's a fine line there between over-insured and underinsured in a gray area there. We've already discussed it, but I think that's the biggest myth that as I'm covered for that.

Clarence Fisher: Oh, okay, cool.

Michael Watkins: And then the other thing there is that I think people, they lump everything into one, meaning there's not a perfect strategy or solution for every single person that I talk to. You know what I mean? Everything that I do and my team does is customized to each person for sure. Whereas most people, again, they may not under all available to 'em. So what do we do if we don't know something? Kind of just lump it all together. And then if you do that though, you're at risk of someone telling you that's a bad idea. Okay, well, everything's a bad idea now. Or if that's great, okay, I need to do that. Well, maybe that's not the best solution for you. So again, just the all or nothing mentality. And I think that's the biggest myth. And the other thing is cost. I mean, I get it. We don't want to ever want to break ourselves. We don't want to worry so much that we're paying so much for insurance that we're actually not living life, but most people are typically surprised to see what types of coverage and what types of strategies I can get them on the budget they've given me.
Yeah. So I think, like you said earlier, a million dollars coverage, there's a lot of people out there think it's going to cost you about a million dollars, right? I mean, honestly, but really it's pennies on the dollar for if you're not here, your family's getting a million dollar check,

Clarence Fisher: Which really, when you think about it, is not that much when you're talking about somebody living, well, I guess if your spouse just continues to work, for sure, which most people are going to work just for fulfillment, but that's pretty much a retirement. And so like you said, take care of the house if you got kids that need to finish school and all that stuff.

Michael Watkins: Well, I mean, I do walk people through that whole checklist as far as when we're looking to numbers, is your house going to be able to get paid off? What about, do you have any car loans? You got credit card debt, children's education, is that important to you? Final expenses, do you want your family to have to throw up a GoFundMe account to put you in the ground? I mean, that's pretty common these days. And again, it is what it is. And the last one is I think the biggest asset people have is their ability to earn an income. And if you're no longer here, you lose that ability. So we have to have something in there for some type of income replacement. If you start thinking about all those things I just listed even in your own life, cars, kids', final expenses, home income replacement, I mean, what does that number start doing in your own head?

Clarence Fisher: And it is kind of crazy how long it takes to get, what is the typical time period it takes to kind of get a strategy together and wrap your mind around this. I imagine most people don't want to stay in this mental space for too long.

Michael Watkins: Well, absolutely not. I mean, you don't need to be worrying about this. That's why you work with me because you want to go do what you do well, right? That's why you hire professionals, why people hire you for their marketing in those types of strategies. Because you're the professional at it. Hey, I want you to do it so I don't have to worry about it and I can go get back to doing what I do. Well,
But the way I look at it from no matter who I'm working with, I mean it can be a multimillionaire, doctor, lawyer, whatever, a specialist or just someone who's just getting started out. Maybe they've opened up a business and they're getting a ball rolling there. We look at protection. I call it protection based planning first, protection first based planning. Basically, we're going to make sure all of your stuff is protected. Whatever is important to you, let's make sure that's protected first. Because at the end of the day, that's the foundation of your financial house. And just like any house, if the foundation's cracked, no matter what you've done as far as accumulating assets, this, that, and the other, I don't care where they're at or what they are, they're at risk. If that foundation is cracked, right, it can come tumbling down into one way or another, and I don't only went on that road, but you kind of get the picture there, I hope. So we start there and once we've really set that foundation, the worry's gone. You know what I mean? Yeah. We're not in that negative space anymore. We're not worried anymore. We're, I mean, not that I want to, but if I didn't make it home, got hit by what I call the proverbial bus and the way home from work today, I really don't have to worry. Cool.
So then we get to the funnel, or I like to call the sexy talk. Hey, let's start looking at how we can move from protection to accumulation. What are some opportunities available to you? Some different strategies that may fit the bill here to start really accumulating true wealth.

Clarence Fisher: And so what do you find is you could start withdrawing, I think, what at 59 and a half, or is that the earliest or no? Is that

Michael Watkins: True? Yeah, that's on your qualified accounts, so your Ross and stuff like that.

Clarence Fisher: Okay, alright, cool. But most people are trying to leave it in there as long as possible or no?

Michael Watkins: Well, it depends on where they're at. I mean, if you need it, then at least if you're 59 and a half, you can withdraw it with no penalty. If you withdraw it before that, you're paying a hefty penalty. Or if you start taking stuff out of a qualified account or a 401k or something like that from work, you're hit with the taxes and some penalties depending on how it's set up. But here's the deal. So that's one of the things that I spend a lot of time with our clients on. When I say diversification, most people think of risk diversification. They're thinking an aggressive moderator, safe type investment.
And that's absolutely, that's correct. But at our office, we take it a step further and we start looking at tax diversification. Okay, so what are on all this money you're accumulating? And then when you do start to withdraw it or start to distribute it in one shape way or form, what are the tax implications when that happens? You have to look at both sides of the equation. It can't all just be risk diversification. You have to take into the tax side of things too. So we look at it on three buckets. You got taxed now, you got taxed later and you got tax never. You got those three buckets of money. Clarence, if I were to ask you that, where do you want some of your money? Most of your money, all of your money out of those three buckets,

Clarence Fisher: Never.

Michael Watkins: Yeah, exactly. Now, I wouldn't tell people to put all their money in that because basically without going too far down the rabbit hole there, those tax nevers, they're typically not going to grow or accumulate as fast as some of the stuff where we're going to tax later, right? So thinking of your 401Ks, I keep bringing that up, most people are familiar with that and long-term, as far as money growth goes, nothing's going to beat the market. I don't care what happens. It's a long-term game, but over time and over the same timeline, nothing's going to beat the market on growth. However, you're going to pay taxes on it eventually, depending on how it's set up and what vehicle it's in. So why not diversify and have some guarantees and no risk type investment? Not really investment, but strategies in there that are never taxed. You got to look at it from, I have some stuff that's built to grow no matter what, and I have some stuff that allows me to invest a little riskier, if you will. I know this down here, it's going to grow regardless what happens. So it's just a play. And again, again, there's not a one solution fits all, but if you don't look at it from all three or four angles, you might miss an opportunity.

Clarence Fisher: And I think now is a great time to say that we are not giving any advice. Absolutely no advice. I'm just having a conversation.

Michael Watkins: Yeah, I mean the biggest thing to take away from that is don't pigeonhole yourself, right? I mean, you talked to some of the brightest minds and business people on this podcast. I feel like I don't talking to you, I I'm upping my game here for sure. But most of those guys, and whether they're local or you read about 'em, whatever, they don't just have one play for everything. Typically. They don't have one business play. They don't put all their eggs in one basket just to make income. I mean, they're diversified. So why would you not do that with your savings, your protection, your accumulation strategies? Why would you not look at everything that may be available to you?

Clarence Fisher: Absolutely.

Michael Watkins: I think that's all we're saying, right?

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And it all starts somewhere though. And in order to get started, I know my probably irrational fears in the very beginning, what are some of the fears that you run into that people have and just getting started with strategic planning and their financial goals? Maybe especially if my parents didn't do anything. So it was really just kind of asking people and seeing really what I did not want to end up how things to be and say, okay, so how do we change this? But there was still this kind of, I don't know why now, I don't know why, but what are the fears that you run into where people just to get started?

Michael Watkins: Well, I think we've touched on a few of 'em. We said people don't understand things and most of the time, if fear what you don't understand. The other one we mentioned earlier was it's going to cost too much. There's no way I can do this. I think one that I run into quite often, which surprises me, but again, it's just because people don't quite understand it is is there's going to be a gotcha moment within this. I'm going to do this and it's not going to pan out or whatever. I had a gentleman I sat down with who basically just told me, I hate insurance. And he is like, basically, there's a gotcha in there and it's not going to benefit me. And so we had to work through that. We had to have conversations about really, okay, where's this coming from? I think one of the biggest fears is people don't really want to know where they're at. Maybe they think they're better off than they are, or maybe they know they're not as good a spot where they want to be and they don't want to admit it. I mean, when I sit with someone, I mean, I tell 'em right off the bat, Hey, we're going to talk about things. Everything's confidential obviously, but it's a tough conversation sometimes. I think that's a big fear is people, I don't really want to know where I'm at. I know I'm either under planned or maybe I'm shooting for the moon here, and I know I'm not quite doing everything I could to get there, but I don't want to know that either.

Clarence Fisher: You're not going to tell me to change anything, are you?

Michael Watkins: Yeah. Right. So not if you don't want to, it's your plan, not mine.

Clarence Fisher: Right. Very

Michael Watkins: Cool. It boils down to it, right?

Clarence Fisher: Yeah. And I don't want anyone listening to think that at all that I'm talking down on anybody. Or sometimes I find that some people, this is just something that they know, but for me, I didn't know anything about financial planning or strategy or taking care of care of tomorrow. So it's been a long, long road and thankfully I've had people in my life and of you being one of them to kind of break down, Hey, this is where you should be. I mean, it was when I came to your office and we did the whole thing. It was an eyeopening, it was an eyeopening thing for me,

Michael Watkins: But you take this seriously, I don't know. Back then maybe you didn't back when, maybe you didn't, but I mean you've done so much, not only in your personal life, you get it now. You taught yourself. I think there's a lot of us, I would say majority people have seen both sides of the coin. Good planning and bad planning and the cascading affects the consequences of both, and you just got to decide what's important to you.

Clarence Fisher: That's real, brother. I mean, that's what I'm saying. When I left her office, I got on the elevator like crap.

Michael Watkins: Now no one's going to want to sit down with me. Thanks, Clarence.

Clarence Fisher: Well, no, I mean, here's the thing. Here's the, there's the oh crap moment, and then there's the praise God that somebody pointed that out to me. How far would I have gone? And I was making money, man. So it's kind of like the business was well, so I'm good, but what happens, number one, if I don't show up because I am the business, it just could have been bad. So let's talk about moving past those fears because that brings us to this. I mean, you talked about the cost, which is so crazy. It doesn't cost near as much as even I thought, which makes it absurd not to do if you care. You know

Michael Watkins: What I mean? There you go back to that

Clarence Fisher: And then time and you kind of covered that. It doesn't take much of Well, not take much of my time.

Michael Watkins: No, I mean, I think when I sit down with someone the first time I tell 'em to block off about an hour. I mean, if you can't give up an hour during your week to really take a look at this, at least a first glance look. You know what I mean? Just kind of a superficial look. Let's touch on some broad stroke numbers type conversation. It gives them an opportunity to kind of fill me out. I take 'em through the process I use as well as me to see if there's going to be any way I can help them when it gets down to it. Meeting to and beyond is kind of where the meat and bones is. Just like with anything though, I mean that's where you really start diving into strategies. You start diving into putting things in place, anything like that. That's kind of where that all happens.
But still, everything is so not the word automated, but so technologically advanced these days. I mean, instead of having to drive to an office, take an hour of that person's day, drive back to my office, we're jumping on Zoom and finishing up what we left off from last meeting that would normally take an hour to an hour and a half, including drive time in a 30 minute window now. So things have just really technology and actually the Covid era and how we all had to stay apart for so long has really sped the process even upping even faster. Now when it comes down to actual strategies and planning, like you said, it's not like we're going to do everything all at once anyway. We're laying the foundation and then we're going to step and after we're done with step two, we'll go to step three. It's an ongoing process and it can change along the way. That's why you have someone like me overseeing it all, but between step two and step three, it could be a year, it could be five years, it could be 10 years, you know what I mean? It's just as long as you're staying in touch and reviewing it on a regular basis, you may not do anything differently, but at least you have your finger on the pulse the entire time.

Clarence Fisher: And I've got someone in my corner,

Michael Watkins: Right? Yeah. That if something pops up, I'm calling you, Hey, we need to take a look at this or something changed here. We need to take a look at this or you know what I mean? It's like that way you don't have to get to go back and do what you're good at. You get spend time with your family, work on your business, grow your business, live life.

Clarence Fisher: So let's talk real quick about situations where people are doing it kind of on their own or maybe they do work with another agent or something. What are some of the pitfalls that need to be avoided?

Michael Watkins: I think the biggest one we've already touched on, Clarence, to be honest with you, is that there's not a one size fits all when it comes to this. Now, there's certain things that are pretty universal across the board. Everyone should have a little bit of life insurance. Everyone should have this, that, and the other, whatever. But the amounts, the costs, budget, goals, all that's completely different from one-to-one. So if you're doing it on your own or you're working with someone and you're questioning whether they've really put time into your plan versus just kind of a cookie cutter, take a step back and ask the right questions. How is this going to serve me?

Clarence Fisher: Without mentioning any names, of course. Can you give kind of an example of we brought up all of these obstacles and fears and myths that people have. Can you share an example of when you've helped someone overcome those and get set up on the right track?

Michael Watkins: Yeah. One comes to mind and obviously with no names. I've known the guy for a long time, but he works for the state. I mean, basically he's a firefighter, also owns businesses outside of that. And he goes back to your typical person who thinks they're covered for that. They got some life insurance in place from, I believe his wife at the time had some from her work, but also he got some from the fire department, and he's a small business guy, so he didn't have anything outside of that. Between it all though, I mean he was making a good over $200,000 a year, but he also had four kids. And if you think about it, four kids, multiple businesses, fire department, I mean, his job is the first responder. He's the first one in,
And at the time he had about $250,000 of coverage, which covered one year of his income had he not been there to make it. We do something called human life value where we calculate a person's economic price tag. It's a legal term, you can look it up and see what I'm talking about. But we did this gentleman's, his human life value came out to about 5 million, meaning between now until the years that he basically retired, he's going to make about 5 million within those years. Okay, so think about that. He's worth about 5 million from now until retirement, but he's only got $250,000 of coverage, which is right at a year, maybe a year and a quarter of his income if he's no longer there. But no one had broke it down for him in that manner. Again, he goes back to I got 250, man, that's more than I'm making right now.
So that gave us the number to shoot for. There's another factor we had in there. So we actually didn't do 5 million of interest. I'm not saying that, but we found his number, got the right amount of protection in place, and then we strategically planned it to where over time we're rolling that into his accumulation model as well. So not only is his protection in place now, we've got some pieces in there that are within his budget that are going to protect him for the rest of his life, and it's also accumulating things on a tax favored basis. He's got his pension from the fire department, he's got his 401k or whatever they call it over there, four oh one b maybe from the fire department as well. Now he's got this on the other side of the equation, and then the next step is he's a legacy driven guy and he's like, what can I do for my kids?
So we put some policies in place on them that if something were to, they're young, I mean they're elementary and then he's got a younger one. And if anything were to happen to them health wise where they couldn't qualify for insurance as an adult, we've locked in their insurability for the rest of their lives and it's actually jump starting some accumulation for them. Not on a grand scale, but on something that's important to him. Like, hey, so if you thinking about it, he's not only affected himself, he's put things in place for his kids and from there it's going to affect their families and their kids. He's impacted three generations of his family.

Clarence Fisher: That is awesome. That is awesome. All within the budget he wanted that is even more awesome. And you think about a $250,000 payout, even if his wife could have invested the entire thing at a modest 5%, that's what, 10 15 grand a year? Did I do that right? A thousand dollars a month, 1200 bucks a month, probably not enough to replace what he was making.

Michael Watkins: No. And I mean if anything, we're not trying to replace a person. You and I both already said that we're trying to make things easier while you're going through that process.
We're trying to keep you or keep your spouse from having to go fire, sell everything in order to make things meet until she can, he or she can bring it to terms on what the next step is. We're buying time, we're buying time for your loved ones to grieve, to get it out. They don't have to make rash decisions. They don't have to throw up a GoFundMe account again. And if you're in that position and family or friends that have done that for their loved ones when they pass prematurely, I'm not making fun of you or judging by any means. I'm just saying my clients are putting things in play where they don't have to make those decisions. They're buying their family time so that way they can make the right decision for them at that time.

Clarence Fisher: Yeah. Very cool, man. What inspires you to do this?

Michael Watkins: People, I like people. I've always been a, or I guess I consider myself, and you can tell me otherwise if you think so, but a servant leader of sorts, and this just puts me in a position to really make an impact on people's lives. Some of 'em I'll never meet. You know what I mean? Like I said, there may be that case study I just told you about, I may never meet this person's grandkids, but I made an impact in their life just by sitting down with their granddad. So it's kind of the Go-Giver mentality, right? Find ways to be a servant to others and be a resource for 'em. They may not need you right then, but when they do, if you do it often enough, they're going to call you. And I like to be, if I can't be that guy for somebody, I always like to be the guy who knows the guy.

Clarence Fisher: Right? Right. You plant a lot of seeds for sure. And that brings me to my next question of you've been in business for a long time, is can you share a lesson that you learned maybe early on that still impacts the way that you do things in this business?

Michael Watkins: Don't get stuck chasing the dollar. I think I did that early in my businesses when I was trying to figure it all out. I think if you treat people the right way, if you serve people, if that is your goal, if your goal is to be a resource for somebody, one, it's more fulfilling than any dollar amount that can come through. But two, it'll lead for you to be profitable in your area of expertise. And so just find ways to be a servant of others. Find ways to be a resource for others. It always reminds me of that book, the Go-Giver. You know what I'm talking about. You read that one? Yeah. No, it's on the shelf. I have not read it Well, I mean it's basically what it's saying in a nutshell is don't get caught on the hamster wheel chasing profit, chasing this. Find ways to be of service in a resource and give without expectation and give just a give. Everything else will work itself out. And just like that. There's no need me to read the book. There you go. Michael's cliff notes.

Clarence Fisher: Absolutely. No, that's great. And I do know that you enjoy people. You spoke earlier about making sure that you're not getting a cookie cutter solution that is being tailored to you. Is that the most important question or is there another most important question that a person needs to ask a planner?

Michael Watkins: I don't think it's the most important because I think the two questions that I like to answer in the first real conversation with clients lead to that answer you're asking or the question you're asking, right? Is this cookie cutter, is it tailored to me? And those two questions are, am I covered for that? Meaning that is a huge spectrum. That could be, obviously if I don't make it home from work tonight, the other side of that equation could be if we covid hits or we have what I say, our world famous ice storm here in Oklahoma and things just shut down, can I keep the wheels spinning on stuff? So that is a huge spectrum, but am I covered for that? Go into defining what that is and make sure, like we said earlier, your number and if you are, second one is, am I saving enough?
It starts there. My goal is to have this much based on my income now. I want to have this much when I retire for this type of lifestyle to be able to do these things I wasn't able to do when I was working all those years and then work it backwards in order to get there. I have this much now. Am I saving enough to reach that goal? Once you're able to answer those two questions, at least get a broad stroke idea, right? We're not looking like exact dollars and cents yet, but a broad stroke idea. Then you can get into the customization. Okay, here's the type of planning strategies, policies we want to start looking at and eventually get towards those.

Clarence Fisher: So are those the questions that I need to ask, even if I'm trying to decide whether to even use the services of an agent, are those the questions that I need to ask as well?

Michael Watkins: Yeah, like I said, again, I don't care if I'm sitting down with a multimillionaire or Mr. And Mrs. S Jim Smith over here. We're going to answer those two questions first and then we can go on. But if we can't answer those, there's no reason to keep moving on. And if you've done some of this stuff, if you've sat with an agent or a professional or an advisor, you should be able to at least have an idea of what that looks like. And if you haven't, it's never too late. That's the cool part. It's never too late.

Clarence Fisher: I love it. It's never too late. We're going to We'll keep that one. I know, man, if you're listening to this, Michael, I'm so grateful that he carved out time in his day because he is literally booked back to back to back to back to back. How does someone find out more about you in order to maybe have a quick conversation with you and get on your calendar?

Michael Watkins: Well, one, I'm on social media, I'm on LinkedIn. You can find me on there. And I always tell people too, honestly, because that's where the world is and we want to make sure who we're talking to is a real person. And you know me, I'm not real bashful on social media. You pretty much you get me on there. So the other one there is you can always call my office. We have a great team of people there. Or just call Clarence. He is my number.

Clarence Fisher: If you Google Michael Watkins, Tulsa is how I got a bunch of the information today. So you're there, and please do sign up for every single thing. Friend him, like you said, he is who he is and you get that. And he really does love people and he teaches the heart. Not to plug Ramsey, but you do have the heart of a teacher and for people and for that, I am grateful.

Michael Watkins: Oh, thank you man. I'm so happy to be on here. This was fun.

Clarence Fisher: Alright, my brother, I will talk to you later. Thank you

Michael Watkins: Thank you.

Clarence Fisher: Thank you for listening to this week's episode of Local Market Monopoly. I appreciate you. Listen. The show notes include contact info for Michael Watkins, today's guest. If you love this episode, take a screenshot, share it on Facebook, Instagram or LinkedIn, tag me hashtag own your block and please subscribe to the show. Go over to iTunes. If you have time, leave us a rate review. Well, that's it for today's episode. Until next time, remember, take action and do what you need to do to own your block.
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