Colin Flewelling - Financial Strategist

01/31/2025

This one number could cost you thousands.

Do you know yours? 🤔

Management fees on AUM might be costing you more than you realize.

In this post I’ll break down the long term effect of annual management fees.

For the record, I’m not against fees! I’m for transparency and empowerment through education.

This chart illustrates what happens to a 1M investment over 20 years with fees ranging from 0-3%.

1️⃣ 0.25% - Lost earnings of 4.31% or $186k total. Average of 9.3k per year.
2️⃣ 1% - Lost earnings of 16.2% or $699k total. Average of 35k per year.
3️⃣ 2% - Lost earnings of 29.89% or $1,290k total. Average of 64.5k per year.
4️⃣ 3% - Lost earnings of 41.45% or $1,788k total. Average of 89.4k per year.

So, what’s my point?

What seems like a very small, almost insignificant fee amounts to a very significant amount of lost earning potential over time.

Here’s what you should do right now:
If you don’t know how much you’re paying in fees, figure it out.

Ask the questions, and don’t settle for deflections.

Once you know what your fees are, decide if they’re worth paying.

Identify what you’re getting in return, whether it’s peace of mind, advice, higher returns, or whatever. Is that worth the cost?

It very well might be for some of you.

For others, you might realize the cost is much greater than you realized, and you’re open to looking at other options.

If that’s you, let’s chat.

*NOTE: This content is for informational purposes only. You should not construe any part of this post as legal, tax, investment, financial, or other advice.
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💥P.S. What makes an advisor worth their fees to you?

01/16/2025

Three facts on how mutual funds are at a disadvantage. ❌

And if it matters.

Let’s start with some simple logic - say you invest 1M in an actively managed mutual fund, then invest another 1M in a passive ETF with an identical portfolio.

One year down the road, you’ll have the same growth in both funds, but you’ll have less money in the mutual fund because of the fees.

The takeaway is that mutual funds are starting at a disadvantage.

They must outperform the market just to break even with an index based ETF, let alone surpass it.

The question then of course becomes, can a mutual fund accomplish this, and how likely is the possibility?

✅ Fact #1: Most mutual funds don’t beat the market on a year by year basis.

From 2001-2024, only a third of mutual funds on average beat the market each individual year.

Even though that’s less than half, not all mutual funds are geared towards growth, so that seems reasonable.

That leads us to an assumption that it’s the same group of funds beating the market year after year, but is that accurate?

✅ Fact #2: Those that beat the market don’t do it consistently.

The funds that beat the market one year aren’t necessarily the same funds that beat the market the next year. Or the year after that.

Unfortunately, past history is not a guarantee of future success.

Studies indicate that anywhere from 88% to 96% of funds don’t beat the market over the long term.

That leaves us with a much smaller sampling of mutual funds to choose from.

But even if there were only one fund that could beat the market over the long term, we could just find it and invest in that one, right?

Nope. There’s another problem.

✅ Fact #3: We can’t know which will end up outperforming until it’s already happened.

So it’s a straight up gamble.

Now, of course, any investment is a gamble. Some have high risk, some very low, but there’s always an element of risk.

I’m not saying don’t take a risk. I’m simply asking, which risk makes more sense?

Let me present you with two options:

Path A is subject to volatility, yet still has a strong long term track record of averaging between 8-9% annually.

Path B tries to beat path A, but has an 88% or higher chance of LOSING that bet.

Which one seems more likely to win?

Most people would choose path A, and they would likely be better off for it.

The cost of lost earnings is greater than most people realize. More on that next.

Some would still choose path B, and that’s ok!

Just make sure it’s not a default choice because that’s the way it’s always been done.

Make an educated decision knowing there are alternatives.

*NOTE: This content is for informational purposes only. You should not construe any part of this post as legal, tax, investment, financial, or other advice.
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💥P.S. Would you take path A or B, and why?

01/13/2025

Active management is getting dethroned.

It seems Warren Buffet agrees.

ETFs are exploding in popularity, and for good reason.

Actively managed funds have fees ranging anywhere from about 0.5% to 0.75% on average.

That’s not to mention the sales loads, transaction fees, redemption fees, account fees, distribution fees, and brokerage commissions.

All together these can result in 1% or more per year in fees.

Enter ETFs.

They were created in 1993, but only began to gain traction and widespread acceptance in the 2000s.

So they’re not new, but not exactly old either. Especially in the often slow moving financial world.

And they're getting more popular every year.

Most ETFs are passively managed and have very low fees.

For example, Vanguard’s VOO - an ETF based on the S&P 500 - has a 0.03% annual fee.

Let’s compare. Put $1M in a mutual fund and you may be paying 10k or more in annual fees. In this ETF, only $300.

Clear advantage ETF.

But what if your ROI is greater in mutual funds?

Does it matter how much you’re paying in fees if your earnings make up the difference or more?

Great questions. More on those later.

*NOTE: This Content is for informational purposes only. You should not construe any part of this post as legal, tax, investment, financial, or other advice.
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💥P.S. What are your thoughts about ETFs vs actively managed funds?

01/04/2025

⛪️ As the pastor’s congregation began entering the church, one by one he handed a bullet to each person.

Later, in the middle of his sermon, he told them why.

You see, just like every other pastor, he was finding it difficult to motivate his people to serve.

Anyone who has worked in ministry knows that Christians are highly skilled in using God as a scapegoat.

When asked, people would come up with any number of excuses to not help. One of the most common he heard was, “I just don’t feel led to help in that way.”

So he decided to eliminate the problem.

As he preached about having a heart of service, he proclaimed, “Anytime you’re wondering if God is leading you to serve or not, just reach into your pocket and run your fingers over the bullet. Now you feel lead.”

The time to serve is now. If not you, then who?

I believe we can apply this to finances as well - I’m convinced one of the biggest problems in wealth building is procrastination.

1️⃣ Do you have a financial plan in place?
2️⃣ Is your income ideal, or would you like to earn more?
3️⃣ Are you actively protecting, saving, and investing?

Most people know they don’t have these things in place.

Most people won’t do anything about it until it’s too late.

When will you “feel led” to take action?

Let this post be your sign.
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💥P.S.What have you been putting off that you are going to take action on starting today?

12/23/2024

I got some heat on my last post. So I’m doubling down.

“You can use your money twice!” 🤑🤑 - Pt 2

Many whole life insurance enthusiasts make this claim.

Reality says otherwise. You cannot use any dollar twice at the same time.

Let me explain my point further (read my previous post for more context).

1️⃣ Example: Bob is buying a house. He has a good job, good credit, and 500k in his 401k, 100k of available cash value in a whole life policy, and 20k cash. He gets easily approved, the bank gives him a loan to buy his house, and the 20k cash is used for the down payment. Would we ever think that the 401k dollars are both earning interest in the market and also buying the house? How about the cash value dollars? Of course not. He has one set of dollars doing 401k things, one set of dollars doing cash value things, and a new, separate, and entirely unrelated set of dollars doing loan/house things.

2️⃣ Example: Jane wants to invest 100k in a real estate opportunity. She has a good job, good credit, 500k in her 401k, 100k of available cash value in a whole life policy, and 20k cash. She decides to use her 20k of cash and get a personal loan from a bank for 80k to make the 100k investment. Again, the loan is a newly generated set of dollars doing its own investment thing.

3️⃣ Example: Sam also wants to invest 100k into a real estate opportunity. He has a good job, good credit, and 500k in his 401k, 100k of available cash value in a whole life policy, and 20k cash. He decides to use his 20k of cash and leverage his cash value for 80k to make the 100k investment. Remember, the 80k is not actually removed from the policy - that’s why it continues to earn dividends “as if” it’s still in the general fund, because it is. The life insurance carrier creates a new transaction in the form of a loan. The cash value is collateral which is why the carrier can willingly provide the loan, but they are separate. The 401k dollars are still doing 401k things, the policy dollars are still doing cash value things, and there is a new, separate set of dollars doing loan/investment things.

NOTE: I’m not discussing any other advantages, disadvantages, implications, or anything else in this post other than if a dollar can be used multiple times.

And it can’t.

12/21/2024

“You can use your money twice!” 🤑🤑

Ever heard that before?

I’ve heard this in many videos and podcasts when talking about leveraging a permanent life insurance policy for infinite banking or similar purposes.

Guess what? ❌ They’re WRONG.

The concept comes from the practice of overfunding a permanent life insurance policy to maximize early cash value, borrowing against the policy, and then putting the borrowed money to work somewhere else.

You then have your money working for you twice: once in the cash value where it earns dividends, and a second time in the additional investment.

From a functional perspective, you can see how they could come to that conclusion. But the argument fails once you break down the mechanics.

Let’s play follow the dollar.

It starts in your hand. You purchase a whole life contract and pay the premiums. Your dollar is now in the cash value (this is over simplified, I know).

Next, you borrow your own money… Wait, nope. This is where they get it wrong.

You actually borrow the life insurance company or bank's money using your cash value as collateral. Your dollar stays in the policy and continues to earn dividends.

A new, separate dollar is created via the loan, which you then put into whatever you were going to do.

You now have a second dollar providing a second function, NOT one dollar doing both.

Truth: You can only use a dollar one place at a time. Period.

Make sure they count.
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💥P.S. What catchy financial idiom drives you crazy?

12/17/2024

The largest target market for MLOs is finding it increasingly difficult to qualify.

And it's not likely to improve much any time soon.

First time home buyers are the most sought after market in the mortgage world.

Unfortunately, the primary obstacles to home ownership are larger than ever - kind of like the U.S. Government - they just keep getting bigger.

The predominant hurdles are: coming up with the down payment, and general affordability due to rising home prices and interest rates.

I see two options. First, external contributing factors. We bank (get it?) on home prices and interest rates changing in favor of the buyer. I don’t know about you, but that seems about as likely as Garfield on a diet.

Second, internal contributing factors. This means getting prospective buyers into a more favorable financial position by buckling down on saving, reducing debt, and raising credit scores.

Now we get to the real problem, because everyone knows what they need to do. Most just won’t.

That’s where having a financial partner can be an incredible asset!

➡️ Clients get the financial help they need
➡️ Clients get into a home faster (or at all)
➡️ MLO closes more business

"You can have everything in life you want if you will just help enough other people get what they want." - Zig Ziglar
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💥 P.S. - What are the biggest challenges your clients are facing that you can directly or indirectly help with?

12/12/2024

Why did 72 real estate agents just partner with us?

It wasn't because of our good looks... 😎

They wanted to:

1️⃣ Offer more value to their clients and in turn their personal brand

2️⃣ Grow their network without doing the heavy lifting themselves

3️⃣ Educate their clients about real estate investing, and position them financially to take action

Have you elevated your value proposition to your clients yet?

Let's chat to see how we can help.

📖 “Two people are better off than one, for they can help each other succeed.” - ‭‭Ecclesiastes‬ ‭4‬:‭9‬
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💥 P.S. - If you aren't actively referring to a financial professional, why not?

12/05/2024

One of our greatest defense mechanisms is often our worst enemy.

How many times have you determined the right course of action, conversation that is needed, or accountability required for you to get to your desired result; yet, you don’t do it?

I’m talking about human nature’s resistance to change.

We like things the way they are, even if they aren’t great. Simply because we are familiar with it.

New environments of any kind - mental, physical, emotional, societal, spiritual, etc - are possibly the scariest thing in this universe. 😱

So we avoid them. Sometimes at all costs. Literally.

The very things that could have the greatest positive impact on our lives are often the things we avoid the most.

What’s one thing you’ve been putting off that you can do today? Share below 👇🏼
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💥P.S. - If you’re scared of change…

“That’s okay, it just means you’re like the rest of us. We are hardwired to resist change.

Part of the brain—the amygdala—interprets change as a threat and releases the hormones for fear, fight, or flight. Your body is actually protecting you from change.

That is why so many people in an organization, when presented with a new initiative or idea—even a good one, with tons of benefits—will resist it.”
https://www.emersonhc.com/change-management/people-hard-wired-resist-change

💥💥P.S.S. - If you’re in real estate, a CPA, or a P&C agent, there’s a good chance my team and I can boost your revenue by 15-30% without you having to find more clients. Let’s have a conversation, or are you scared to find out?

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Does your organization resist change? Blame their brains--we are hardwired to resist change. It’s ok though, we have a non-surgical solution.