How To Build a Successful Financial Team - Passive Income MD

How To Build a Successful Financial Team

July 3, 2024 • 10 Min Read

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There’s an old saying that you are the company you keep. I’m here to tell you that this is especially true when it comes to building enduring wealth. Why? It’s simple: Surrounding yourself with the right experts is a roadmap to achieving your financial goals. 

Especially in the world of passive income and real estate investment, you can accelerate your financial freedom by building the right team. Who should be on this team and why? That’s what we’ll talk about today. But first…

Why Do You Need a Financial Team?

It’s easy to be hesitant. I get it. The fees for CPAs and financial advisors can be scary. But the truth of the matter is that they are incentivized to help you build wealth efficiently. The more money you make, the more work for them. And in my experience, the costs associated with your financial team should be thought of as an investment. They will help you earn multiples of their cost, earnings you otherwise would miss out on. 

Why do they make us money? Because most of us are not expert accountants or financial experts. Even as physicians, success means depending on the expertise and reliability of others. At the hospital, you’ll have anesthesiologists, surgeons, scrub nurses, and techs all working in harmony for the common goal to help the patient. When it comes to finances, your team will be there to accelerate your financial goals. And I use the word “team” deliberately here because, at the end of the day, everybody will be working toward the same goal. 

Who Should Be On Your Financial Team?

Who you need on your financial team is dependent on your financial goals. As you continue reading, note which professionals might fit with your particular situation.

CPA

It’s never about how much you make but how much you take home. As I’ve often said, the difference between accelerated wealth and barely staying comfortable often comes down to whether or not you have a knowledgeable CPA on your team.

When meeting with potential CPAs, look for people interested in your situation and overall goals. Your goals should dictate a tax strategy that maximizes your tax savings

Keep in mind that financial goals are fluid. Ideally, you hit some of your goals early and then set newer, more aspirational goals for yourself. When our goals evolve, that’s when it’s time to reevaluate your CPA. There are times when our goals outgrow the expertise of our current CPA. 

It’s not that your CPA in this situation is all of a sudden “bad,” it’s just that they may not specialize in your new goals. It’s like medicine—there are specialists, and not every doctor does the same thing. It’s also true that not every CPA knows the same things. Personally, I’ve switched CPAs a few times to make sure they specialize in areas aligned with my goals and outcomes. Getting a second opinion can pay dividends.

Asset Protection Lawyer

In the real estate investment world, the risks of lawsuits are very real and, unfortunately, usually outside of our control. To hedge against this threat, you will want to safeguard your wealth through an asset protection lawyer. 

You’ve worked way too hard to build up your business, family, house, investments, and everything else. So make sure it’s protected. 

These lawyers vary in their approach, so it’s important to shop around. Talk to at least three. Understand the finances involved, make adjustments with them as needed, and go with the one whose strategies make the most sense for your situation. 

Sleep better at night knowing that you’ll keep as much of your wealth no matter what happens.

Insurance Agent

As physicians, we understand that insurance is absolutely vital. Malpractice insurance is something we want to get right. We talk to other members of our community who have had the best experiences with certain agents and continue the vetting process from there. 

When reaching out to prospective agents for real estate investments, the biggest thing to avoid is agents that want to steer you into products, mainly because they’ll make a better commission. 

And consider this. Because agents tend to have their own specialties, just like doctors, that might mean you would benefit from having multiple insurance agents on your team.

When it comes to life insurance, disability insurance, insuring your business, or even insurance on investment properties, find the most experienced people you can in that specific area. They can find the right policies for you according to your objectives. For you, it’s building and protecting your wealth. For them, taking care of you will mean referrals back to their business. 

And just like you tapped into your community of doctors to find your malpractice insurance, you can always resource your community of doctor investors here at Passive Income MD for leads on excellent agents. Come to one of our many events, get on the waitlist for the Passive Real Estate Academy, or talk with folks in our Leverage & Growth Accelerator Community.

Financial Advisor

Financial advisors help you evaluate your whole portfolio, zooming in and out to make sure that, when it comes to hitting your financial goals, every box is checked. They’ll protect you in the short term as well as in the long term. 

The problem, of course, is that most advisors are pretty cookie-cutter in their recommendations and come from one school of thought. I can hear them now, “Pour everything into long-term index funds.” But that doesn’t work for everybody. Real estate investors, entrepreneurs, and those looking at alternative assets will be at odds with the playbook of the traditional financial advisor.

What many don’t know is that there are financial advisors out there who know how to put together a great financial plan for somebody with a business, who likes to invest in real estate, and wants to explore any number of alternative assets. These advisors tend to dabble in those very investments themselves. So instead of letting a traditional financial advisor tell you what your strategy should be, find one that understands some of the strategies you bring to the table.

Real Estate Investment Team

While we’ve covered the major players of the financial team, there are some specialists you’ll want to consider if you invest in real estate, especially if you plan on buying your own investment properties.

Owners who enjoy being completely hands-on may not need many people. At that point, though, managing investment properties amounts to a full-time job. So for those who want to leverage passive income to take back their time for friends, family, hobbies, or to practice medicine on their own terms, you will need to build a real estate team. That will include lenders, agents, contractors, and property managers.   

You can also create a real estate team for the more passive forms of investing such as syndications or REITS. These opportunities allow you to invest in a property with other people, usually with a sponsor with extensive experience. You can work with companies or you can join a group of individuals that you decide to invest with. It’s private equity, and these groups require that you trust them with your money. Because you need to diversify to protect your wealth, that means building a roster of many sponsors or operators you absolutely trust. In the long run, having this group will save you on the due diligence required to figure out who’s trustworthy—meaning who has a good track record, alignment of interest with you, and has similar financial goals. 

Speaking of diversity, make sure to build relationships with experts in different asset classes. Mineral rights, Airbnbs, apartment buildings, single-family homes—these all have their unique markets. Just like you should diversify your portfolio, also diversify the expertise of sponsors you work with. 

You won’t build up your real estate investment team immediately. It comes with time and experience. That’s why getting your first property can sometimes be the hardest. But don’t worry, Passive Income MD is here to help! We’ve spent years connecting individuals in knowledgeable and trustworthy communities. Our community and groups like my own real estate private equity group, Ascent Equity Group, can cut down on the time it takes to build a great team. 

How to Build Your Financial Team

So, how do you start finding and vetting your team? It’s not the phonebook. It’s about joining communities—communities like Passive Income MD—and networking within that group. Engaging with community members will generate referrals, recommendations, and true-life experiences that can align with your interests and goals. 

With the names in front of you, your next move is to interview all of them. Would you hire anybody at your practice without interviewing them? Of course not. And, you’d interview multiple candidates, too. The same principles hold true for your financial team. 

During the interview, ask about their experience, track record, approach to investing, and how they provide amazing service to their clients. Favor those who you can call on for support. No one-time transactions here. 

Also, make sure your personalities match well. After all, you’ll have to be working with them on your financial health. Rely on your intuition.

Next, complete a background check on finalists. That means checking their credentials and looking for any fraud or bankruptcy in their history. Sometimes a quick Google search can be your best friend. 

When you do hire somebody, consider it a trial period. See how they do on a small project before committing to something bigger or long term. Give yourself (and them) room to grow together to forge a lasting working relationship rather than putting all of your chips in blind. 

Let’s quickly recap the boxes you need to check when building your team:

  1. Were they referred to you in a trusted community? Can you vet the person making the referral? 
  2. Do they seem like a fit for your team after an interview? And did they answer hard questions well? 
  3. Have you checked their credentials, track record, and any possible issues in their history? 

If you can check these off, you’ll be building a financial team built to succeed. 

Start Forming Your Team Today

As you add experts to your financial team, keep them accountable and hold to a standard. If anybody falls below that standard, be willing to switch if necessary. 

Having the right financial team on your side can elevate everything that happens to your finances. It’s as true in sports as it is in finances: a strong roster makes all the difference. If you surround yourself with trusted financial experts, you will get to the winner’s circle more than once.

But never rush the process and do your proper due diligence. There’s somebody out there right now who could help you get to your goals faster. We here at Passive Income MD hope you take the actionable steps to find them, continue to build your allstar financial team, and achieve financial freedom. Here’s to living your dream life! 

Peter Kim, MD is the founder of Passive Income MD, the creator of Passive Real Estate Academy, and offers weekly education through his Monday podcast, the Passive Income MD Podcast. Join our community at the Passive Income Doc Facebook Group.

Disclaimer: The topic presented in this article is provided as general information and for educational purposes. It is not a substitute for professional advice. Accordingly, before taking action, consult with your team of professionals.

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