Dave Mull

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Category: Finance

  • Today’s CFO role is different…

    I used to have a very different perspective of what it meant to be a CFO while I was in college and even very early in my career. I mostly saw it as an accounting role that closed and books and helped the company see out of the review mirror. Being someone that really like to be involved in strategy, preparing for the future and using financial data to tell a story, I never thought it would be a role for me. Even when I finished my undergrad with a major in finance and started on my MBA, there was an opportunity to double up on the masters program for a more finance focused program geared toward future CFOs and I simply wasn’t interested. I’m very happy I kept on the track though because I sure ended up being very wrong!

    Pretty much my entire career has been spent in some type of financial role. Even my internships were financial and investing focused at Invesco and Aegon Institutional while also working in a local bank through college. I got my first salaried job before I even graduated at a local hedge fund as a trader on the European desk and then moved to the sales side trying my hand in financial planning at AG Edwards and Sons. I later moved on to be an analyst in the treasury and investment department at Humana before being asked to take on a consultant role working to revamp Humana’s cash posting operation. From there I had an opportunity to be a branch manager at National City Bank. I ended up back at Humana after a couple years in the Medicare Finance organization before being asked to help seed a new finance team tasked with standing up a new region within Humana. After getting that region going and growing it to 2 states, I was promoted to the divisional finance team where I worked to develop new reporting and analytics tools to help providers take on value based care. I was then promoted to regional CFO where I got to get really involved in the operations of a region. Everything from BIDs, budgets, value based relationship management, MRA, Stars and everything else that makes a Medicare Advantage plan perform.

    What happened next was really a culmination of all of that experience which was a chance to be CFO and COO for a Medicare start up inside of Humana. The role and opportunity really helped me see what it was like to build something from the ground up. And to see how a stategic thinking CFO that was focused on performance, culture and leadership can really play such a critical role in the success of an organization. After serving in that role for 3.5 years I took a chance at a CFO role at a real start up, Honest Medical Group where I am today.

    I’ve learned so much through my 20+ year career about business, leadership, finance and so much more. But what I’ve really come to appreciate about being a CFO is that it’s so much more than I ever thought that it was. Being strategic, knowing the operations, being a key leader of the executive team and getting to work alongside some amazingly smart people is really something that so very few get the chance to do. Being a CFO is NOT about looking in the rear view mirror, it’s not about just closing the books and handling accounting type work. It’s so much more than that. So if you have interest in becoming a CFO, learn the operations, learn what makes the company tick, learn about strategy and how all of these things impact the financial performance of a business. You will be better for it and have even better opportunities to reach your goals and help your business reach it’s goals.

    If you’d like to learn more about my experience or just have questions about your own path, reach out, I’d love to share, coach, consult or help in any way I can.

    Dave

  • Multiple Income Sources

    It’s taken me way longer than it should to think and learn about income streams, what that really means, what the options are and what it can do for me and my family. Over the last couple of years I’ve dove in on this topic to learn more and be more plan-full and purposeful about it. I recently saw an interview with Kevin O’Leary from the SharkTank talk about how a salary from a job can be so addictive. He said it’s like a drug that people get hooked to and they rarely look at or consider what that means for them. I’ve personally had a great career, I enjoy what I do, I’m well compensated, I feel connected to mission of the organization. I hope that is true for all of. But I also have a desire to create on my own. Something that earns money while I sleep and that may live on well past my corporate working days or even hopefully after I’m gone.

    There are many types and ways to add income streams. Some are more passive than others. Some are more straight forward than others. Some are more risky and so on. In todays post I’m going to touch on 4 that I spend the most time on. My professional career, dividends from publicly traded stocks, crowdsource real estate platforms and side hustle businesses.

    Professional Career as an Employee

    I’ve been very lucky to have experienced the majority of my working life in a field that I am passionate about and that I have found success in. I use my degree and my many years of experience to continue to climb the corporate ladder and add value for my employer but also as a leader and coach of my team and others around me. I’ve always strived to be the hardest worker in the room. That means I’ve also many times been the first one in the office and the last one to leave. This has also meant that personal life, time and balance has been sacrificed over the years. Whether that was because of late meetings, business travel, project needs or leader expectations. With all of that said, that hard work and dedication has helped get to where I am today. Even if I would have spent all these years as a business owner, that balance would have also been heavy on the work side. I’ve always believed if something is worth doing, do it all out. One other thing I’d like my younger readers to really understand is that hard work alone doesn’t guarantee success (based on how you define that). You communication style, your presence, the relationships you build, your trustworthiness, being a person that others like to work with and know they can count on are ALL just as important if not more so. You are your own personal brand. Make it something people want to buy and invest in.

    Dividend Income

    Another form of income that we hear a lot about is income via dividends payments from stocks we own. Many stocks (like AT&T) pay monthly, quarterly or annual dividend payments. These are typically at some defined $ amount. Say $.50 per share as an example. So for every share you own, you would get this payment. This type of income is often popular with people in retirement living on income being produced from their investments since they are not working generating a paycheck any longer. I believe that even before retirement, dividend stocks should have a place in your portfolio. These stocks usually don’t have the big gains in price but that isn’t what you buy them for if looking for income. They are typically more stable and if you do your homework and choose proven companies can be a reliable source of income. If you are younger and not in need of the income, a great option for owners of these stocks is to set them up with a reinvestment option. So instead of getting the dividend payment sent to you, it’s reinvested to buy more shares that then will produce more income. This is a proven long term approach at adding an income stream to your life. Many investors only believe in buying dividend paying stocks.

    Crowdsource Real Estate Platform

    This is a fairly new one and I’ve only been investing for a little over a year now but the returns have been pretty good. Platforms like Fundrise.com allow you to invest and they, the real estate experts pool your money with other investors to make real estate purchases, fund projects etc. You then receive dividend payments from those deals in addition to value increases of the underlying properties. Fundrise is a private REIT with an underlying stock price, since they are private your investment is not very liquid but its not subject to the daily swings of the stock market. Similar to Fundrise is a platform call Crowdstreet. Crowdstreet on the other hand allows you to directly invest in properties via pooling your money with other investors. They share their targeted IRR, you do your research, understand the terms, the structure and then receive your monthly payments. This is a great way to put your money to work for you. You buy assets that produce more income. You can use that income to support your lifestyle or reinvest it to continue building for the future.

    Starting or Buying Businesses

    I definitely don’t want to make this one seem easier than is really is. This is hard, business is hard, most businesses especially start up don’t make it over the long term. But the hardest thing are often the most rewarding. I recently launched www.connectcoffeecompany.com as a first experience in starting my very own business. There are so many tools offered today to get Ecommerce off the group. Platforms like Shopify make this incredible easy. There are still lots of steps and things to do, but they do a great job with resources to help people with each of those steps. I chose to work with a drop shipper, so I hold no inventory, I don’t do any of the manufacturing, sourcing, packaging or shipping. That is all done by vendors I’ve selected as part of my product offering. I evenly want to get into all those parts and own the E2E, but this is a great first step in the process and with the primary goal to learn, grow and encourage others to get out there and try things. I’m not in a big hurry to take it deeper. I share this as an example of starting your own business, that although it can be small can help produce some additional income sources. You can launch and run many Ecommerce businesses as part of your portfolio. Do something you are passionate about that adds value to the world. There are also ways to buy business or act as an Angel investor where you put up money and help with your experience in a consultative owner perspective. This is risky of course but also rewarding and potentially lucrative from a return perspective.

    Just do it

    It really doesn’t matter how you choose to build multiple income streams. Get out there and try some things, have some confidence in yourself, your drive, your experience and embrace a growth mindset. You might just surprise yourself and change your life in the process!!!

  • Kids, Money and Their Future

    I’ve long wondered why we as a society do not talk much about or teach our kids about money at a young age. Of all the subjects taught in school, it’s rare to find places that focus on personal finance and investing. Not only are we not purposeful about talking about it, in many cases we do the opposite. We tell kids not to ask what things costs, or how much we make or how much money we have. We as adults grumble about going to work and earning it, we grumble about not having enough of it, we stress about it, we fight about tit and do we really think our kids aren’t learning from our attitudes around it? It’s no wonder that kids often grow up not only with a misunderstanding of money but also a tainted view of it. I think it’s time we do our kids a favor and make real change about how to discuss money, finance, investing and wealth.

    Why It Matters

    A study done by TD Ameritrade showed that 41% of divorced generation Xers said that money was a driving factor. Another recent study by Nielsen suggests that between 50% and 75% of all Americans are living paycheck to paycheck. Which means that if you miss just 1 pay check you will have bills you can not pay. So for everyone that says money isn’t everything, I completely agree but it sure as heck is something and that something needs to be talked about. We also know the importance of starting young, not only in habit forming and understand but also because of the compounding effect that exists from how growth and interest work. For all these reasons and many more our youth deserve to get a better baseline understanding of how all of this works and not have to figure it out on their own in their 20s, post college with a lot of debt and stress already hanging on their shoulders.

    What Can We Do

    First, let’s take the stigma away by having more open, regular conversations about it with our kids. Share with them what you make, share with them what things cost, share with them the things you wish you knew when you were younger. Admit your mistakes and the things you learned from them throughout your life. You can also talk about work as a positive thing, something we should be thankful for. Instead of I HAVE to go to work lets flip it and say we GET to go to work. We GET to create something today, do something that adds value, earn a living to support your family. These are things to be grateful for.

    Second, let’s get tactical about sharing things like how a personal income statement looks and works. Have a personal balance sheet and help them understand the differences between assets and liabilities. Help them understand how credit cards work, the good and the bad and how easy it can get out of control. Share with them how discipline in life applies to financial decisions. Help them establish financial goals early and teach them about the effects of compound interest. Help them set up a custodial brokerage account or savings accounts and see what saving and investing looks like. Watch some YouTube videos, listen to podcasts or read blogs on the subject. Make it fun!

    Lastly, let’s put pressure on and talk to school administrators to bring in proven curriculum around finance and investing. I sometimes struggle to understand why we put our kids through hours of learning of the periodic table but almost zero on how to balance a checking account, how to buy stocks, how business works or the markets. We set our kids up with a primary focus of going into a job market, working 40+ hours a week for most of their lives until they can afford to retire without giving them tools to make that easier. Then if they are lucky they get a handful of years to be free to enjoy life living on social security, a pension (which few seem to get these days) and the money they worked hard to save along the way. That just doesn’t sit well with me these days. We should be teaching our kids how to build the life they want, how to chase their dreams, live with passion. How to create, innovate, add value and enjoy all of their days. Learning how money works early can make all of this easier.

    We can do this, our kids and the next generation deserve it. We will all be better for it.

  • What’s With the 401K?

    What is a 401K, how do I use it and why does it matter?

    A 401K is an employer sponsored account that is funded directly from payroll deductions. With traditional 401Ks, this money is taken out of your pay before it is taxed. This means it also grows tax free until you take it out in retirement. Many employers will work with a brokerage firm like Charles Schwab to set these up. The employee then goes in, selects how much of their pay they want to go into this account and how it should be invested within the account. In many ways it automates your savings/investing so you are paying yourself first.

    401Ks for most people are a great way to save for retirement. The automation allows you to purposefully move money into your investments before you really have control to spend it. Many employers pay packages include some matching on these dollars also. As an example, you may put in 5% of every paycheck and your employer would match that 5%. So I put in $200 and they also put in $200. I would strongly encourage anyone that has an employer match to make sure they are taking full advantage of this benefit. It’s a 100% return on your money that you could be missing out on. I’ve been very shocked at the number of people that do not do this.

    I understand that many people in America live pay check to pay check. The thought of taking 5% and setting it aside feels like something they cannot afford. I believe that you cannot afford NOT to do this. There are disadvantages to 401ks and I’ll get to those in a bit. But to not take advantage of employer matching will hurt you for the rest of your life. Downgrade your car, downgrade your phone plan, downgrade your lifestyle. Do it now, take advantage of this benefit and thank yourself in 20 years.

    Now 401Ks are not something everyone loves. They are often limited in what investments you can choose within the account. These are typically chosen by someone at the employer with support from someone at the broker. They are mostly mutual funds that to offer some diversification options but also can have hefty management fees. The limitations on these accounts make them not as appealing for many that like to be more active in managing their investments or who like choices. And one of the biggest selling features to them is that the money is put in before tax and grows tax deferred. The benefit of this is fueled by the idea that you will have a lower tax rate in retirement than you do in working years. So it’s better to pay tax then vs. now. A flaw to that could be that our government is growing and society is evolving in many ways and many believe it’s naïve to think that taxes will not be much higher in the future.

    Some employers also offer a Roth 401K. Much like a Roth IRA this is funded with after tax $ and therefor you pay your taxes up front and not when you withdraw in the future. Many see these as a better alternative based on future tax assumptions. I believe that everyone has to make the right call for themselves. There are benefits to both. I actually have some of my 401K in traditional and some in Roth.

    Another thing I have seen that I would like to caution people on is not speaking to a professional at the brokerage or someone else to help you learn about diversification within your 401K. Many people follow the set it and forget strategy. This means that when you first set up your account, you pick your investments (which mutual funds) and you go on never to really look at it again. This can be a problem based on how your matching goes, are there targeted stock funds included (like a fund that solely investments in your company’s stock), are some of the mutual funds performing way better than others, etc. etc. This can lead to your account becoming very “unbalanced” and not match what you originally set out as your strategy. Also, as you age, as your income increases, as your lifestyle and or goals change, you will want to review your allocation and account to ensure it’s still on the right track. This is another place a professional investment adviser can really add value for you. I would recommend at least an annual checkup to ensure all is still on track.

    At the end of the day, if your employer offers a 401K and especially provides a matching contribution a 401K is a great way to automate your savings/investing plan for the future. It’s really easy to say that you will do it on your own, but it’s even easier for life to get in the way. Those funds get spent, used up and never saved. Then you get to retirement and you have nothing put away to support the life you want in your later years. Social Security is often NOT enough to support your lifestyle desires. You can’t even access SS dollars until you are least 62 and with how long people are living and how few people are being born and paying into the system. Something is gonna have to change in a big way for SS to be able to support your retirement at all. Do yourself a favor and automate your saving/investing. Do what you have to do to make it work and maximize any benefit your employer is offering. Your future you is dependent on it and YOU ARE WORTH IT.

  • Real Estate For the Busy passive real estate for busy people and diversification

    I’ve long been interested money and investing. As someone who has had a steady job since 14 and enjoyed having a little cash in his pocket. Understanding how money works is something I’ve been on a learning journey with for over 25 years. From those first paychecks, to working in a bank through college, majoring in finance, interning at large institutional investment companies, being a trader at a hedge fund, working as a financial advisor to then working in finance at a fortune 100 company, things with dollar signs have always been around me.

    Real Estate was something until recently I hadn’t paid much attention to. Primarily because I wasn’t around anyone involved in it, it seemed like it was either for the super rich, shady people selling get rich quick scams or really handy people that could do some amazing flipping work. I’ve since learned that all of those are true in some ways, but there are also lots of other good people and good ways to be involved in real estate investing.

    I believe most people should have real estate as part of their investment strategy and there are lots of ways to do that. Given I don’t have the time, talent or desire at the moment to dive into physical real estate. I’ve started learning a lot about passive options. 1 of those that I have come to really like is the emerging crowd sourced options. Platforms like FundRise have opened up real estate for everyone and given people an option for investing in private deals through pooling money that used to be reserved for the ultra wealthy.

    What I love about the FundRise platform is how simple and transparent it is. You can see exactly what properties your money is being invested in. You can set your strategy, whether it be income or longer term growth and they do the rest. Real estate is a longer term investment and it is considerably illiquid. You should only invest in it with money you do not have a short term need for as it will be harder and sometimes costly to get it back out.

    Real estate is a way to help offset inflation and add some diversification to your investment portfolio. It’s been a tried and true way to support people in their path to building wealth for many many years. If you are like me and have interest in real estate but not interested in physical ownership and would like some diversification away from the equity market and reits, give crowdfunding a look. There are several very interesting options out there to consider.

    Let me know what you think and if you have any questions. Would love to share more about by experience. Passive Real Estate passive real estate for busy people and diversification