149. Pre-IPO Stock Options Tax Planning with Aaron Rubin

Average Joe Finances: 0:00

Hey, welcome back to the Average Joe Finances podcast. I'm your host, Mike Cavaggioni, and today's guest is Aaron Rubin. We were talking a little bit off camera about a whole variety of random things but I'm really excited to have this conversation. Aaron, thank you so much for joining me today.

Aaron Rubin: 0:15

That's fantastic to be here.

Average Joe Finances: 0:16

Yeah, absolutely. Hey, I wanna start this off the same way I start every episode off, and we wanna know more about you. So if you could share a little bit about yourself, share your story. Who is Aaron rubin?

Aaron Rubin: 0:28

Sure. First thing to know is I grew up in the Chicagoland area. So my attitude problem, that's where it stems from.

Average Joe Finances: 0:32

That works.

Aaron Rubin: 0:33

But I got my degree in accounting too long ago from Clare McKenna College, and then I ended up going to law school. So I got my law degree and then After in law school and met my wife and decided to get married and her dad said hey, I'm in this wealth management business, you have a pretty good background for it. You wanna join me? And I said, sure. He said you gotta wait . Perfect. So I spent three years in public accounting after after I graduated law school. So I worked on some consulting there, and then I went into like the trenches and did a high net worth individual tax returns. And after that, I joined my father-in-law in 2009. Right after that recovery started. And I've been with him ever since. So it's been about 13 years, a little bit more, and and it's been great. I've loved every minute of it, except when the market goes down. Not as fun.

Average Joe Finances: 1:17

Yeah no. Nobody likes what that happens. Actually, so let's talk about that for a second. So you joined up with him in 2009, so that was right after, one of the worst crashes we've ever seen especially in the real estate market. So what was it like, working for that firm when that happened?

Aaron Rubin: 1:32

Yeah.

Average Joe Finances: 1:33

Actually not even when that happened, just to come on board. Right after that happened.

Aaron Rubin: 1:37

It was super interesting, right? Because obviously there had been. Other downturns before a lot of the, his clients had been through, the dot.com Bust. And our firm's, maybe I'm jumping the gun a little bit, but our firm's methodology is three factor model, which is, value investing plus small and so again, our clients weren't, as impacted by that 2001 bust because they were in value companies, they weren't allowed, they didn't have very much in iTech. But 2008 really it crushed everybody. And as I was meeting with these clients, for the first time and having no previous exposure to the industry whatsoever, They were all, abused , from 2008, where they saw their portfolios fall by 50% and their portfolios were still down, by 20 some odd percent, when they had met me. So it was really, it was a different time, to start, and see people react and. And what was really great is ever since then, right there have been down markets since, there's 2011. The third quarter was pretty bad there. The 2014, 2015, if you look at, the wider international markets, they were flat and 2018, the S&P was down by 20% I think in December of 2018. There's been a lot. downturns that have happened since, but it's almost, they got inoculated right before I got there. And so again, Af- post 2008 world people are like the market is not down 50%. So you know how bad could be.

Average Joe Finances: 2:56

Yeah, can't be that bad. Yeah. So basically you showed up, they're like, Hey, we just got punched in the face. Do you have any ice?

Aaron Rubin: 3:01

Sure.

Average Joe Finances: 3:02

You're showing up with the ice packs and saying, Hey, they're there. It's gonna be okay. We'll beat up that bully. Don't worry.

Aaron Rubin: 3:07

Yeah.

Average Joe Finances: 3:07

So when the smaller bullies come along, it's not that big of a deal. They could stand up to them.

Aaron Rubin: 3:11

Yeah. And you mentioned real estate and real estate in the Bay area was interesting in that time as well in, in that 2008, 2009 because we had moved here in 2006. And and so it's.

Average Joe Finances: 3:21

Did you guys buy in 2006?

Aaron Rubin: 3:23

So I will talk about and again, I'm jumping the gun on you again. The best investment decision we ever made had nothing to do with me, cause we did buy in 2006. We bought a condo in 2006 and we'd lived there for a year or two and we're like, you know what? We're, let's really start thinking about, the family thing, and the condos not really conducive to that. So we sold the condo in 2008 right before The crash like really happened. And we sold our condo in 2008. We and things had started to turn south mid 2008. And so we actually found a property. In San Jose that was foreclosed on. And so we picked up a foreclosure property, in 2008, and it was awesome. We got a great deal. And now of course the house had problems that the bank didn't need to disclose to us. Some things need to be fixed up, but man, talk about talk about fortuitous. It was fantastic.

Average Joe Finances: 4:12

Yeah, like that's some great timing right there.

Aaron Rubin: 4:13

Yeah. My, my wife gets all the credit for that one.

Average Joe Finances: 4:15

I bought my first property in 2007 and yeah. I didn't sell it before stuff happened. I wound up having to short sell it later on. It was pretty painful.

Aaron Rubin: 4:24

Yeah.

Average Joe Finances: 4:24

And bad first experience.

Aaron Rubin: 4:26

Yeah. That condo, we got. We sold it for 30,000 less than we paid for it, so it wasn't.

Average Joe Finances: 4:31

Oh wow!

Aaron Rubin: 4:31

But if we were selling it like, as like the market was like really melting down and like it was down by 33%. At one point, and it was like, talk about dodging a bullet because we wouldn't have been able to leave that place, until, probably 2014 we would've had to hold onto it. That would've been, that would've been really tight for us and three kids.

Average Joe Finances: 4:50

Yeah, no, definitely. That, that would've been a difficult thing to, to hold onto. I wanna kind of transition back to, you know what you do, right? Cause I know you are, like a big stock options guy, right? And I'm not I don't do too much of that myself. So I always, I like to ask questions about those things that I don't do too much about myself. Cause I wanna make sure that my listeners are getting all the information that they can use and, build their toolbox. Figure out what's gonna be the best route for them. So do you have any type of super secret sauce for when it comes to stocks option planning? Because, with what you've done being at the firm since 2009, you've got to see a lot of things. And you already mentioned a couple of these downturns, right? So the 2011, 2014, 15 and 18 just to name a few. You're, it seems like you have your investors better prepared for these than, if somebody was out there just going out and investing on their own. So what's like your secret sauce to that?

Aaron Rubin: 5:45

Yeah, so on the pre I.P.O. Side, for stocks that you can't sell right away or that you still have to buy, right? So a lot, again what a stock option is, right? It's a right to buy. The secret sauce is one, if you're early enough, you could do what's called an 83(B) Election. And what that means is you purchase your stock before it technically vests. And if you do it early enough, there's no tax difference that exists there. So you get a huge tax. Break, assuming that the stock goes up over time. Of course, if it goes down you're screwed. But, assuming that it's going up over time, you're gonna save yourself some money on taxes. You'll start, clocks for qualified small business stock, which you can get up to 10 million tax free. You can start the clock on capital gains. And there's such a powerful tool that 83(B) Election. So I'd say, when you join someplace early. Think about doing that sort of thing, and that is, doing the 83(B), exercising as soon as you can and then and avoid some tax. A lot of people don't do that. A lot of companies, it's been really interesting to me. Don't offer that as much as I think they should.

Average Joe Finances: 6:44

Yeah that's interesting. There was something that you said earlier on there that I wanna touch on that, if you do the 83(B) election, and the stock goes up, you're gonna avoid a lot of taxes, right? Because you got in before it was like an actual paper asset. What about, you said if it goes down, you're screwed. So do you not get to claim that as a loss if it goes down? Is that like the caveat to that?

Aaron Rubin: 7:04

Yeah. You can eventually claim it as a loss, your problem, so in the 83(B) let's say you can buy the shares for 10 cents a share and you do it the day you're hired. So sure enough, the fair market value is 10 cents a share. You. Hundred thousand shares. 10 cents minus 10 cents is zero times a hundred thousand shares is still zero. But you had to come up with the $10,000 to purchase the shares at that time. So let's say the company goes belly up. You're out, the $10,000, you don't get that back. Now, yeah, you do get capital loss treatment, but you still lost the $10,000. I'd rather not lose $10,000 . That's the problem, after tax savings is great. And certainly it'll help, buffer some of the loss. But again your tax benefit, might be depending on what bracket you're in, it could be 30%. So you still lost the 70%. That's after tax. So yeah, that's again.

Average Joe Finances: 7:55

That's good point.

Aaron Rubin: 7:55

And depending how much cash you have to come up with. Anyway, we're not talking about, $10,000. It could be a hundred thousand dollars, it could be a million iep, depending how many shares and depending when you get on the company. So again, if you have to remember that stock options, ultimately they're an investment. It's an investment in your company. And if you don't think your company's gonna do particularly well or if you think there's something better out there, maybe you gotta think about that too.

Average Joe Finances: 8:16

Yeah. No, that that's a great point. Now I'm curious because of the way you mentioned that, there's these times where things like that can happen, right? Where you're going into a new company and you're getting that option to, to purchase these stocks. Pre I.P.O. because you're an employee right? Now, have you seen any type of horror stories with with some of these situations where, new startup happens and the people come on, they get onboarded and they're buying up their shares, right? And they're like, okay, we're ready to go. And then boom, nothing happens.

Aaron Rubin: 8:46

Oh, it happens. That's all the time. Most companies that's startup, especially those seed companies where those really small ones, they don't make it. Most companies don't make it. And you have to do the 83(B) election, you could save a lot of money, but again, the chances are it's not gonna make it. So you see that all the time. And it sometimes it hurts more than others. . You have a WeWork situation, right? They got their S1 out there looked if they were gonna go public, and then what, a week or two beforehand. It's oh, this whole thing doesn't really make sense. And now all of a sudden all those people that were buying the shares in anticipation, they now have a, they don't have a problem. And it could be a big tax problem potentially, depending on what they did. There's a lot of that, or there's gosh, one of, one of the worst was what Skype did to its employees They had their share plan and everyone's getting, vested shares and all that. And there was a clause in the plan that said, oh, by the way, we can buy it back for par whenever we want to, like how much you paid for it. And sure enough that Microsoft goes to buy them out and they turn around to all their employees and they say, okay, we're buying you back for what you paid for it. We're gonna pocket like the huge sum that Microsoft is gonna go and you're not really have that benefit. Wow. That, that was pretty, pretty poor. And then What Uber did to its employees, again, not as nefarious as that. What I think, Skype did to its employees. But what Uber did is, they said, okay, for your RSUs for stock units, we're gonna say that the day they vest is the first day that trading's available. So what they do is they say, okay they look at your W-2 they withhold tax from it. But the price is whatever that I.P.O. Price was, and then Uber, and then six months later, at that point, people could sell the shares. So what happened was Uber went down, and so all these people, they actually incurred a tax liability. On day one, which it was somewhat covered, but because RSUs are considered supplemental income, they weren't taxed at the right rate. And so people still had to come up with all this tax money and their shares were depressed. And so there were a lot of really angry people at Uber over that one. So it, it happens a lot and it's in the news. Yeah, you gotta be careful.

Average Joe Finances: 10:47

It's important to read the fine print, right? Because each option that comes up, like they're, it's all different, right? Everyone has different rules and standards really when they go live, right? About how they want to, look like, so it's Skype as an example, right? They, in their fine print, it was, we can buy this back at par. So it's that's a punch in the face when when Microsoft came and said, Hey, yeah, we're gonna buy you guys out. And they said, all right, scoop them up, everybody. Let's go. Yeah that's really tough.

Aaron Rubin: 11:12

I'm working with another client right now who's they're working for an L.L.C., and they're giving out profit shares and one of the things is we get to we can abide back these profit shares, the vested ones at fair market value. What's the fair market value of an L.L.C.? , that isn't public and isn't making enough money to make distributions yet, it's pretty much zero. So I have a client and I know other people at that company who've all just been said, all right, we're here. We're gonna buy your shares from you, and we're paying nothing for it. That's it. There's nothing to say. So again you really do have to read that fine print and know what your rights are.cause sometimes you don't have money.

Average Joe Finances: 11:45

All right. Hey, look, Aaron we talked about some of the scary stuff, I guess the quote unquote horror stories you can call them, Let's talk about some stock option wins. What are some of the better things that you've seen happen throughout your time since 2009?

Aaron Rubin: 11:58

So I had a client at Coinbase. And I talked to many people at Coinbase actually, and everyone that I talked to at Coinbase basically told me as soon as I can sell these shares, I'm selling them. And Coinbase was a direct listing, so that means that they could sell them day one and a lot of Coinbase people did, and including my client and, ended up, selling for a lot and. And it was, and now Coinbase of course, has since just gotten trashed in the market and probably for good reason. But part of that is knowing your company and being realistic about it. And people at Coinbase understood, Hey, we're really heavily tied to this crypto thing. And if crypto becomes as popular, that could really hurt our shares. And a lot of people bailed. Is that sounds bad. A lot of people took the advantage, of that day one price. And that turned out to be the right call and that.

Average Joe Finances: 12:47

This still kind sounds like a horror story.

Aaron Rubin: 12:49

Here's the thing.

Average Joe Finances: 12:50

Or for the people that.

Aaron Rubin: 12:51

Yeah, the people, the people that stayed or they decided not to sell for whatever reason. And here's the thing. If you look at I.P.O.s as a group, over the first five years, they tend to underperform the market, right? They have great day one performance, right? That's the hallmark of an I.P.O and then from there on out over the next five years, they tend to underperform. Some people, they make the right call and they find, the one that, that doesn't. But I think the smart money is, you take a look at your life and you take a look at the choices you have upcoming and you say, okay it's possible that you know this stuff's gonna go up by, 300x whatever it is but if I can secure my retirement today, or I can buy my house today, or there's other things that, or I can secure my family's future today, let's do that and there's gonna be other shares that I can sell later on, and maybe I'm gonna kick myself, but I don't think you'll ever really kick yourself by securing your financial future. I just don't.

Average Joe Finances: 13:44

Yeah.

Aaron Rubin: 13:45

And that said, I have friends that have they call their Honda Civics, their $3 million car because they sold $30,000 worth of Apple shares to buy their Honda Civics, 10, 12 years ago. And of course it would've been worth like $3 million today. But for the most part, for an I.P.O. Company, again you're likely not gonna be kicking yourself that hard, but it's a risk.

Average Joe Finances: 14:07

Yeah. I mean, with any investment that, there's always risk involved no matter what you go into, whether it's the stock market whether it's real estate whether it's crypto I've had a couple people come on and talk about that, which I still don't know enough about. It's just, it's any investment you're taking a risk, right? It's about how you mitigate that risk. So when you're looking at I.P.O. So actually let's talk about that. How do you mitigate risk with with I.P.O.s? Like what type of indicators are you looking for when you're making a decision to say that this is an I.P.O. I want to invest in?

Aaron Rubin: 14:36

So again when you're an employee at a company, you, the expectation is that you're gonna purchase these shares and then they're gonna be worth, 10, 20 times what you paid for them. Again, depending on how early you got into the company. So you're assuming the company doesn't go bust, you're probably gonna end up ahead, no matter what you do. Again, with exceptions, . . And it's always a good idea to, to have some sort of regimented, at least some sort of regimented buying strategy, while you're doing it. So if you have incentive stock options, right? They're, you don't have to buy them all once, you don't have to do the A three B if you're not as comfortable with it because again, most companies fail, but what you can do is you can start to buy them on. We'll an A.M.T. Free basis, so A.M.T. Altern minimum tax. It's a part of the tax code that, that basically. It takes your taxable income that you have on your tax return that you know about, and it starts adding stuff back. And one of the things it gets to add back is the paper gain on incentive stock options. And and then the tax regime is different than what it is on the regular income tax. And so you have to compare your regular income tax to this new tax calculation they do in the middle of your return that you probably don't see and you pay the higher of the two. But if you're stock options and you have the control over how much tax you can realize in any given year what you do is you work with a tax professional and you say, okay, what can I buy this year that's not gonna at least cost me tax? And so starting to depending on how big the burden is starting to eat that elephant slowly makes a lot of sense.

Average Joe Finances: 16:07

Yeah. Actually, that was one of the things I wanted to ask you about too. How can someone. Invest like tax efficiently, cause I feel like, I know how you can do it in real estate. It's pretty nice. There's this wonderful thing called depreciation on the asset itself. So if you're going in with the company that you're a part of and you're buy, you're buying in with the I.P.O.. How do you avoid some of that? Because like you said too the A.M.T., which I'm not too familiar with. So I'm glad you brought that up. You said whatever amount is higher, that is what you'll get tax on. Is that based off of how much you made versus the the paper gain on the stock? Whichever one's higher, that's what you'll pay the taxes on.

Aaron Rubin: 16:42

Well, I'll walk through the calculation super quick and I don't wanna get too much of these cause I can talk about tax like all day long. But essentially what happens is you, if you look at page one of your return, right? Or actually technically be by page two, I go to page two, your return it gives you your total taxable income. And so you, you take that number and you, let's say you set it aside on a piece of paper and you say, okay what other things. Are the government gonna make me include that I can't include here? So one of the things that again, was the paper gain and stock options. So you take, let's say you made a hundred thousand dollars, just normally, W-2 income. You put a hundred thousand dollars there. And of course you had deductions as well, so your taxable income was a hundred thousand dollars. But you wouldn't it, you also recognize a hundred thousand dollars in paper gain. So now for A.M.T. Purpose your income is not $100,000. It's now $200,000. Also not as big as it used to be. Was the state and local income tax deduction. So if you were, which is limited to $10,000 now on your itemized deductions, but that $10,000, that also gets added back to your income. All right, so now let's let's forget about that for a second. So now you have $200,000 of income. Now here's the interesting part. There's a large exempt. That goes into the A.M.T.. . So you take your A.M.T. Income and then you less your exemption, then you get your A.M.T.. What's called taxable income. That gets multiplied by, it's a flat tax, either 26 or 28%. And then, and that gives you a new tax number and you compare that tax number to what's on page two of your tax return and you pay the greater of those two.

Average Joe Finances: 18:10

Okay. So Now that's making more sense. Yeah. It's not too they don't count them as two separate. It all comes together as your taxable. And then it's gonna be that flat tax versus whatever your normal tax rate would be, whichever the higher one is, that's what you pay.

Aaron Rubin: 18:22

Yeah. I'm glad you see it makes sense cause I think it's crazy. But again, you can plan that out. Cause you can control income when you buy your I.C.'s in terms of trying to get your tax down, again, let's say you go to eventually sell the shares. The big thing that we try to do is to take advantage of individual stock movements within a portfolio. So when you go to, to invest your money again, Mutual funds are perfectly fine. ETFs are perfectly fine. There's nothing wrong with them. And usually they're a really good vehicle. But if you are gonna have a massive capital gain, they're not the best vehicle. The best way to do that is to essentially construct your own portfolio. Again you go by an ETF for, if it's an S&P 500 ETF you're gonna pay like 0.05%. It's nearly free. But if you constructed your own portfolio of the S&P 500, essentially, even if the S&P 500 is going. There are dogs, there are gonna be bad stocks in there, and so if you can sell those stocks as they start to tank and repurchase somewhat similar stocks, just not substantially similar. If you purchase somewhat similar replacements. You can take those tax losses and start to offset some of the gains that you have for your company stock. So it's a way to offset some of that and if your burn time's a little bit longer. If you can wait, you start to ladder. those sales so that, you're constantly getting more losses to offset more gains over time. So that's one way that you can start to do, to shelter some of the income.

Average Joe Finances: 19:50

Yeah, Aaron, that, that's a great pointcause like if you had your money in an ETF, right? You can't just go in there and say, okay, I'm gonna solve off the portion that's tanking, right? That's not an option because the ETF is the actual quote unquote fund right? Itself. That is, your money's divested into these different stock options with the ETF where. Built your own where you said, okay, this ETF invests in, ABCD company. I can just do that myself and I'll just put the same amount and just portion it out, right? Because now, with a lot of brokerages, you could do fractional shares. You can essentially build the same type of portfolio and you're not paying the fee anymore. But then for the stuff that starts to, to go down in that portfolio, so what you're saying is, you can liquidate, take the loss to go against your gain, right? And then reinvest the money that you know, when you sold those shares into something similar. That way you still have that well diversified portfolio that you built but you're also able to offset the loss. That's what I was picking up from that. And I think that's.

Aaron Rubin: 20:48

Yeah.

Average Joe Finances: 20:49

Freaking awesomecause I don't think a lot of people think of it that way.cause now when it comes to the. Stock market myself, like I invest in ETFs. I do have mutual funds. , and again, it's like you said, they are great vehicles. But my focus has been mostly on real estate, right? So the stuff that I have in the stock market, I said it and forget it type deal. But for somebody who's very active in the stock market, this is probably a better option to look at versus just going out and just buying ETFs, like just constantly buying ETFs where you can just diversify it yourself and create your own portfolio to offset your taxes.

Aaron Rubin: 21:21

Yeah. And there's great ways to outsource it because, it, we made it sound easy, but it's not because you can get the dogs and you can sell the dogs and then, but what you reinvested in is very important because if you end up tilting your portfolio unintentionally to a particular you need to be careful about that. So again we outsource that the actual trading mechanism to another group that specializes in that. So there are some cost effective options out there. So I know Wealth Front has a tax loss harvesting individual stock. Thing, you need to be careful because they also have tax loss harvesting on ETFs and mutual funds, which isn't the same thing. You want the individual stocks and they have higher account minimums for stuff like that. If you're gonna do your own, again it's a little bit harder. You really have to do a lot of research.

Average Joe Finances: 22:08

Be like a full-time job essentially.

Aaron Rubin: 22:10

I would assume. And the fact, is you'll probably get it wrong. The big players out there in the space, aside from like a wealth front, so parametric aperio, they, they're the big dogs and they have very sophisticated models. Dozens of people working for them and research this all the time. And if you think you're going to outdo those guys, you're crazy.

Average Joe Finances: 22:28

Yeah.

Aaron Rubin: 22:28

We can't, we outsource to them because they're the experts.

Average Joe Finances: 22:31

Yeah. No that's a great point. It I think, part of, no matter what you invest in part of the I guess one of the biggest parts of being successful is, One, you need to have the education piece, but two, you need to have the right person helping you, right? Whether it's a coach, mentor, or financial advisor, right? You need to have the right people on your team as you go out and no matter what you invest in, right? and trying to do everything solo. While it can work at the same time it's how much time do you wanna put into this? How much you know are you gonna go and get yourself to the point where you're financially independent and you're gonna leave your 9 to 5 job and be able to say, Hey, I'm retired. I could spend more time with my family. But instead, you're gonna be focused on, what you're investing in and moving your stuff around. Are you really retired at that point? So that's definitely some great stuff to think about and and outsourcing. I love to outsource. Especially when it comes to certain things like my podcast some of the things that I do with my team here. I think it's important, right? And it frees up time for me and it adds to that independence piece that I love so much.

Aaron Rubin: 23:31

I'm gonna say I think it's perfectly fine that you use ETFs and mutual funds and you don't always need an advisor. It depends on the complexity and, and as you said, how much time do you spend it on it and how much time should you spend it on it? And getting that right mix. And so again, I don't dog on mutual funds with people who don't use advisors at all. Typically you're gonna end up ahead of, but at the same time, again, it's not oh my gosh, if you're not working with advisor, you've gotta be, outta your mind again, need, you take a look at what you got.

Average Joe Finances: 23:56

Yeah. And you work with what you're comfortable with. That's one of the things is one, one of the things I like to do with this podcast is just make sure that, we're putting great information out there so that people can make an educated and informed decision with what to do with their money. Because there, there's too many people in this country right now that. Live paycheck to paycheck and have no idea what they're gonna do in the future. They feel, I'm trying to stop people from working until they die, to be able to go out and enjoy and live life. Talking to, Awesome people like you, Aaron. It helps because I get to ask you it's a selfish thing, right? But I get to ask you the questions that I want answers to because it provides value to me. But at the same time, it's providing value to the people that are listening to this podcast right now as well. That's why I love doing this, man. And that's why I really appreciate you coming on and sharing this stuff with me. I wanna transition this to something that we call the final round.

Aaron Rubin: 24:46

All right.

Average Joe Finances: 24:47

And this is gonna give our listeners a good idea of who Aaron is when he's, in a tough situation and having to make tough calls. If you're ready to go, we'll get this party.

Aaron Rubin: 24:56

Let's do it.

Average Joe Finances: 24:56

All right. Awesome. I know you've been doing this since 2009, even before that, you were talking about your background, how you went to law school and everything. So you've got a good plethora of information behind you. Now you've seen a lot of things happen and you've also probably witnessed a lot of mistakes that people have made. But I'm more curious now for you, what's the biggest mistake you've ever made in investing?

Aaron Rubin: 25:19

So when I was a kid I was really in comic books and so I decided that I was going to invest in Marvel corporation, which was, which was big in the nineties. And I did. And now of course, I had like little kid money, so it was like you. A couple hundred bucks from, by bar mitzva, whatever it was and sure enough, within I think three years, the company went bankrupt. And I lost all of my initial investment. So that was by far the worst decision that I ever made. Teaches you about individual stocks.

Average Joe Finances: 25:46

Yeah, absolutely. And look at Marvel now as being part of Disney and look at what's going on there.

Aaron Rubin: 25:51

Yeah. My God. Disney's taking over the world. Star Wars and the whole thing.

Average Joe Finances: 25:54

They are, yeah. Darth Mickey, right?

Aaron Rubin: 25:56

Darth, Mickey.

Average Joe Finances: 25:58

The empire right there. All right. Awesome, man. No that's, and that's a good point. What, and a great lesson learned, right? Even at such a young age that you gotta be careful with individual stocks, right? You gotta make sure you're picking. That you're doing your research right before you go and pick these stock options. Because again, any C.E.O. can come in and mess things up, and before you know it, a company's going bankrupt and you just lost everything that you put into it. Yeah, be aware of that.

Aaron Rubin: 26:21

Their annual reports were awesome. They're all like they were totally, their comic book style and like, all drawn out. It was cool looking.

Average Joe Finances: 26:28

No way.

Aaron Rubin: 26:28

Yeah. Yeah.

Average Joe Finances: 26:29

That's one reason just to stay . Just keep one share. Just keep one share. Even if it's going downhill, just keep one share so you can get an annual report now. That's awesome, man. All right. So the next question is what is something that you've learned that you wish you knew when you first started?

Aaron Rubin: 26:42

To me, I think when I first started, I was trying to be the version of an ad, what an advisor should be, rather than being myself, and so I think as I became more comfortable with things, with the advisory business, I was able to put more of my own personality, into it. But I spun my wheels for a few years trying to be who I thought I was supposed.

Average Joe Finances: 27:05

No that's really honest and and I appreciate that. I think a lot of people struggle with that. I really do. And it's yeah. No I just appreciate that, man. That's awesome. Okay, this next question kind of ties into that as well because, you were able to learn a lot as you came through and you've got to experience and see what other people have done. You probably have a couple of these, and I think we talked about some of these throughout this episode, but do you have any tips or tricks that you would recommend to someone that is just getting started today?

Aaron Rubin: 27:34

Can you start in getting started as a financial advisor or in the the pre-op world.

Average Joe Finances: 27:37

Just getting started investing. They got themselves they paid off their quote unquote bad debt and they're like, I've got this money that I'm saving up and I don't want to keep it in the savings account. What do I do?

Aaron Rubin: 27:47

Yeah I would say, this goes back to ETFs and mutual funds. Go find a really well diversified ETF and each other. There's so many out there right now. There's, I don't know how many tens of thousands, 20 scores of ETFs right now. So for our we use a lot of ETFs for our taxable portfolios that don't need the loss harvesting as attached to it. And so like Avantis, which is run by American century is a great family of ETFs. Love them probably I probably like them more than Vanguard. And they don't pay me to say this, by the way. I really like those and I'd say they're coming out it was just a conference call. They're coming out with a new global series. They'll basically do all of, the world stocks and one particular fund. And 1 ETF it to be really good. I'm excited about it.

Average Joe Finances: 28:26

That's that sounds very interesting. Wow. Get a full global piece of the pie.

Aaron Rubin: 28:30

Yeah. And it's either, I think it's in one and it's not out yet. And they were just saying that they're playing with it, and they might be out in the next six months to a year. But yeah, I'd keep eye out for that one. Really. It's gonna be super cheap and it's gonna be super well diversified. And I would, I'm gonna be a huge fan when it comes.

Average Joe Finances: 28:44

Nice. Okay. Be on the lookout for that. And that's coming from Avantis, right?

Aaron Rubin: 28:47

Yeah, Avantis. They're an American century company.

Average Joe Finances: 28:50

Okay. All right. Awesome. Appreciate that. Okay, next question, and the final question of the final round is, do you have a favorite business investing or real estate related book or podcast or both?

Aaron Rubin: 29:02

This one's super easy. It's called Financial Adulting. And it's written by this guy named Aaron Rubin. And it's pretty entertaining. . Average Joe Finances: Okay. Besides your own, I should have pressed that. Besides your own. Yeah. Oh, geez. Okay. That one's, that was tough. Now I make it tougher. Yeah. I'll tell you what got me really got me going in the financial industry. The first book I read was called A Prudent Investor's Guide to Beating the Market. , and it was written originally like in the late nineties, no, maybe early nineties, and it's a great introductory book that has lots of graphs and it's a little encyclopedic at times, so it doesn't read like a narrative, but it's changed the way I thought about investing from when I was a younger, younger guy.

Average Joe Finances: 29:41

You said it's got a lot of graphs, so to me it's got a lot of pictures. That's good. I like pictures. . Aaron Rubin: No I'm with you. No, that's awesome. Okay. Great recommendations and I definitely appreciate that. I do wanna give you a chance to talk about your book as well. That's what I'm gonna do right now, Aaron, because that's it for the final round. But I do have one more super important question for you, and this is probably the most important question that I'm gonna ask you throughout this entire interview because the folks that have been listening to this show today are saying, Hey, I really like what Aaron's talking about. This is different than some of the other financial advisors that we've had on this show before. Got to learn a different side of things, especially on the I.P.O. Side that we've never really talked about before. And I want to know more. Where can people find more information about you? Do you have a website, social media? Tell us about your book as well.

Aaron Rubin: 30:25

Yeah. Oh gosh. All right. That's a lot. I thought you were gonna ask me like Star Wars or Star Trek, and that was like, if I answered wrong this interview.

Average Joe Finances: 30:31

I mean, those are important as well, but not as important as this question.

Aaron Rubin: 30:35

Yeah. All right I'm gonna, I'm gonna, I'll answer the question you didn't ask Star Wars , but.

Average Joe Finances: 30:39

Who's your favorite Star Wars Character?

Aaron Rubin: 30:40

Oh, yo. Gosh, that's awesome. Hey, there we go.

Average Joe Finances: 30:43

See, I'm putting you on the spot now.

Aaron Rubin: 30:44

I love the Mandalorian, the series, the TV series. I thought it was freaking awesome, man.

Average Joe Finances: 30:48

It was amazing.

Aaron Rubin: 30:49

And I really liked the Mandalorian. I thought it was really cool. Anyway the. So the book I wrote the book several years ago at this point before the Covid thing for sure. And it's basically a guide for young professionals to start making good decisions. So the whole thing starts out with budgeting, how to create a budget. The importance of budgeting goes on to tax, goes on to life insurance, real estate, it talk, it talks about all those major things. That somebody who's just starting out to somebody who's, let's say in their early forties, really needs to think about. And then the best part is that if you really, if it's boring you, the last page of it has like the three high level things you need to take away. So it, it can be a reference guide, it could be also, a good financial book. And I pepper in personal stories, about myself and family members along the way, although I can't be family members. Everything's fictional or something like that. But.

Average Joe Finances: 31:36

Yeah, there you go. . Aaron Rubin: Yeah, and it's, yeah, it's or may not have known anyway, but the as to where to find us obviously financial adulting is available on Kindle, Amazon E-Book and all those great places. For Werba Rubin Papier Wealth Management. We have wrpwealth.com, great blogs if you're wanna know a lot more about pre I.P.O. Stock. And then we just started our TikTok account, which I'm really excited about. So it's I.P.O. Graphs is our TikTok handle. So I try to put something out every week if I can. And then Twitter is @wrpadvisory, obviously Facebook and LinkedIn. The whole nine yards. The whole gamut. Awesome. Oh, I'm gonna go follow you on all those and I encourage all my listeners to go check out Aaron. Go check out his book, check out the website, check them out on social media, go follow their TikTok account. They just started a new one. They need some love. So go see, swipe past some of those cat videos and some of those other things, and add something to your F.Y.P. That is actionable and that will help you succeed in your business and in life. Aaron, this has been awesome, man. I truly, genuinely appreciate you taking the time to talk with me.

Aaron Rubin: 32:43

All right. No, I love being here.

Average Joe Finances: 32:45

Yeah, absolutely. And hey, to my listeners, thank you so much for joining me and our special guest, Aaron Rubin on the Average Joe Finances Podcast. Make sure you go leave us a five star review and tell us what you liked about today's episode with Aaron. Aloha from Hawaii and have a great rest of your day.