ROY GAGAZA, RFC, CFP, of Journey Wealth Management, LLC, has a successful advisory practice in the high-tech haven of Manteca, Calif. As if one paradise was not enough, Gagaza has a successful practice in Waipahu, Hawaii as well. That's right, Gagaza, a retired military officer who served a year in Kuwait during his tour of duty, really is living the dream as a financial advisor. Senior Market Advisor editor Daniel D. Williams met with Gagaza in his Manteca office to discuss his unique (and enviable) advisory practice.
Senior Market Advisor: You have a very interesting story. Talk about your journey to financial services and what led you to this industry?
Roy Gagaza: I retired from the military on Sept. 30, 2008 after nearly 25 years of service. But about 10 years into my career I started thinking about what I would do outside of the military. I began thinking, if I stay in too long, I won't be marketable and it was at that time I started looking for something I could do where I could help people. Also, I had been a marketing major at San Jose State so there was a business background. Eventually, I looked at financial services. For 10 years I was able to remain in the military (which included a year in Kuwait in 2004) while seeing clients and conducting seminars. During that time, I got my credentials, including my certified estate planner and a registered financial consultant.
SMA: Seniors make up a key part of your practice. What is it about them that led you to this demographic?
RG: The main thing is I find I really like working with senior clients—that 55-plus market. I get along better with older people. They've gone through so much and seen so many things in their life. And, with the seniors, they're the ones that need more help. They have bigger assets, but they're not putting more in. For them, it's about preservation. A lot of people know how to get the money in the first place, but not preserve it.
SMA: So, do you see a disconnect in their retirement planning?
RG: Yes. Even with the 55-plus clients, they still don't know that they should be preserving. They're still being aggressive when they need to be reallocating. The biggest mistakes occur five years before and after retirement. People get in their "red zone" where they believe they've made it. And they begin to say: "Let's go on that cruise. Or let's go on 12 of them." But there needs to be a fine balance and there needs to be a plan in place before doing that.
SMA: At that point, what do you do to help them?
RG: The key is to develop spending plans instead of developing a retirement plan. Most people have too high of a projection when taking out 10 percent of their assets per year. That's too high. You have to give them the facts. You can say, "Yes, you can do that, but here's the reality: If you do what you're doing, you could be out of money at X date." By the time they realize what's going on, they're in panic mode. So they either go super aggressive or they go super conservative. Usually the extreme they take is of the total conservative approach of CDs, which puts them in the hole. It does not outpace inflation. If you look at 20 years of CDs versus the last 20 years of inflation, CDs have been outperformed. It's a negative. Your dollar has shrunk. And that's not even taking taxes into account. If you want to keep your money safe, there's only so many options and I'm a firm believer in putting a percentage of that savings in FIAs (fixed indexed annuities).
SMA: Was there a particular client or event that led you to emphasize FIAs?
