Million Dollar Producer Show

043: [Author Interview] "Effortless Wealth: The S.W.A.N. Approach to Unlocking Wealth for Busy Professionals" with Best-Selling Author Paavan Kotini

• Paul G. McManus

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In this episode, I welcome Paavan Kotini, founder of Kotini and Kotini, and author of "Effortless Wealth: The S.W.A.N.™ (Sleep Well At Night) Approach to Unlocking Wealth for Busy Professionals " a book that has quickly climbed the ranks to become an Amazon number one bestseller.

His book introduces a holistic approach to wealth management and financial planning, tailored specifically for the busy professional.

Paavan's Background:

  • Diverse Career Journey: The transition from a budding career in biomedical research to a tech enthusiast, and eventually a financial expert, demonstrates the author's adaptability and relentless pursuit of passion. This varied background provides a unique foundation for the financial principles discussed in the book.
  • Inspiration Behind the Book: Driven by a desire to share his accumulated wisdom and experiences, the author crafted "Effortless Wealth" to guide individuals through the complexities of financial planning, making it accessible and actionable for busy professionals.

Key Insights from "Effortless Wealth":

  • The SWAN Philosophy: Central to the book is the Sleep Well At Night philosophy, a concept coined by Paavan to encapsulate the essence of financial peace of mind through strategic planning and informed decision-making.
  • Virtual Family Office: A pivotal concept introduced in "Effortless Wealth" is the virtual family office. This approach advocates for a synergistic collaboration among financial specialists to offer bespoke advice, akin to having a personal CFO for financial guidance.
  • From Biomedical Engineering to Financial Expertise: Paavan's unique journey sheds light on the importance of embracing change, continuous learning, and the pursuit of one's true calling, especially when it leads to the realm of financial empowerment.

The Future of Financial Planning:

  • Personalized Financial Strategies: He envisions a future where advanced, customized financial planning is not just reserved for the ultra-wealthy but is accessible to professionals across various sectors, aiming to democratize financial success.
  • Raising Financial Literacy: "Effortless Wealth" is more than just a book; it's a mission to enhance the financial literacy of its readers. It encourages proactive engagement with one's financial health, promising a future where informed financial decisions lead to lasting wealth and security.

About our Guest:

Paavan Kotini founder of Kotini and Kotini, and author of "Effortless Wealth: The S.W.A.N.™ (Sleep Well At Night) Approach to Unlocking Wealth for Busy Professionals "

You can learn more about his work at:
www.effortelesswealthbook.com
www.kotiniandkotini.com
Paavan's LinkedIn

About Your Host:  Paul G. McManus is an accomplished author and expert in helping financial professionals grow their businesses. With over eight years of experience working exclusively with financial professionals, Paul has helped his clients generate tens of millions of dollars in fees and commissions.

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Speaker 1:

Havan, great to see you. How are you doing today? Doing fantastic. I am so excited for you. You just published, I believe, your first book. You, out of the gate, became an Amazon number one bestselling author. First and foremost, congratulations on all the work you put into writing the book, publishing it, but also in achieving that level of success.

Speaker 2:

It's a dream come true, a couple of years in the making, and something I've always wanted to do. There's a lot of information that I want to be able to share and propagate to everybody. This was the best way for me to be able to get this out and put my thoughts down, but for it to also not only be published but to be a bestseller is just another dream and milestone. I'm excited about that, thank you.

Speaker 1:

Now, before we get into the content of the book, I'd love just to ask you about who you are and what your journey's been, from where you were maybe out of college to where you are today as a financial professional, Because you know, in the book you capture some really cool stories about this.

Speaker 2:

I'm in the financial space now, but I didn't start off that way, paul. I actually was a biomedical engineer. I studied and I did seven years of research on cancer. My intention was to be an oncologist to help people with cancer. I'll tell you a quick story. I was at the Vanderbilt Cancer Ingram Institute and I was actually doing surgery on a monkey. When I was doing the surgery cut a vein and blood just started spurting everywhere. The next thing, you know, paul, I was like passed out on the ground. There's six other scientists there and they were like do we take care of Pavin or do we take care of the monkey? Five scientists said monkey's way more important than Pavin's. One scientist took me out, made me feel a little bit better, put water on me. This happened a couple of times and I realized I can't really see blood. It's hard for me to see blood. It's hard for me to continue my profession in medicine without being able to see blood.

Speaker 2:

I was trying to figure out what to do. It's a long story. Essentially, I went from medicine and I worked into the tech space. Actually and not to be stereotypical, but a lot of Indians If you're not a doctor, you're typically in IT. I was in tech. I actually worked on the first iPhone project. I was out there in California.

Speaker 2:

When I was over there I realized I was trying to figure out my 401k. I had no much, paul. I was trying to navigate my 401k options and it didn't make sense to me. It was like a puzzle. I tried asking around. Not many people seem to know what to do. In fact, one of my colleagues I remember Marcus, what did you do? He said that I just chose whatever was a default. Then I asked another colleague of mine and he said I just chose whatever Marcus chose. This can't really be the way to financial security. Not me being in finance at that time.

Speaker 2:

I got into the interest of finance because I started to get curious. Let me ask my father. My father had helped build up Capital One. He was one of the executives and then retired as one of the VPs. After he left from there, he started up some several successful startups and companies, local companies. I thought let me ask him. He goes Pavin, I know how to earn money. I know how to save money. I'm too busy to figure out what to do with it after that. Welcome to look under the hood. Essentially I did Not.

Speaker 2:

Me being in finance at that time, I could very quickly tell I was disappointed For the amount of money we were earning. I felt like it could be better. But the hodgepodge of advisors. I got the interest to learn about finance, to really not pursue this career, but to actually just help my own family and to learn for myself. Very quickly I learned that multi-millionaires and multi-billionaires have access to tools and strategies that most middle and massive fluent don't have access to. That's when I realized maybe I can help my parents out, help my family out and a few family friends. After I helped out a few families In 2008, a crash happened and most people lost a lot of money, but this was when, whoever I had helped out, they were fortunate enough that we actually preserved their portfolio. In fact, many of them grew.

Speaker 1:

What you're saying is that during one of the worst market crashes and recent history, most everybody lost money, and that was across the board. But for yourself, your father and it sounds like a few other people that you're assisting with, not only did they not lose the money, but they actually some of them grew during that same time period, absolutely.

Speaker 2:

So that's when people started to reach out to me and say, can you help my brother out, can you help my sister out? Why are you not doing this full time? So that's the kind of thinking Like I really love what I'm doing. Initially I thought the only way I could help people was through medicine, which is a great way to help people, but I realized that another way I'm able to help is through finance, and I'm helping Protect people's hard-earned money and making more tax-efficient, and all of that for close to two decades. I'm still super passionate about what we do and we've expanded a lot since then. And pretty exciting that's how Transition from medicine to IT to finance.

Speaker 1:

I love the story, and how funny is that. Where you're, as you said, you're looking to pursue a career as an Ontologist and you discovered along the way that you can't, you don't like the side of blood.

Speaker 2:

Whenever I used to get blood taken out or anything like that, I thought I used to pass out because of the volume of blood.

Speaker 1:

It's just the blood itself. Yeah, that's a great story. Just reflect back and share for a second, because it will get into this as we keep talking. The book, really it's called effortless wealth, but it's all about what you describe as swan or the sleep well at night philosophy and approach to Investing. And before I ask some questions around, I can just tell you from personal experience is that I'm 48 and I've never been in the stock market, primarily because I don't want to go through the roller coaster. I don't want. The highs are great, but I'm scared of the lows, and so I'm really excited to have you expand upon what swan is, as well as the listeners of this, to be able to get a better insight into what that actually means. What is Swan? What is the swan philosophy that you talk about a lot throughout the book? What is that? How did you discover that? Tell us about swans.

Speaker 2:

Swan is something that I've trademarked and it's because and it stands for sleep well at night. Okay, so, just like you and me being a third person that's coming from the outside world of finance Into finance, it was really overwhelming, right. A lot of things started to sound good, but then, when you looked at it in real depth, there was fear of when markets going great, you're doing well, things will go down at some point. I didn't want to lose. For me, I wanted to be in a position where I put it on cruise control and just not worry about it every day. I used to see people that you know that got super excited it when the markets going up and then they were super depressed when the market was down and I didn't want my emotional to follow the marketplace right. To me, there's so much depth into the swan methodology and swan approach because it talks about Mindset, it talks about a strategy, and then there is actual specific vehicles and products that actually fit this model as well, too.

Speaker 2:

The idea Started off just like I was telling you in that story about the 2008 crash, right, the inception of it at that point, when I realized the importance of being able to sleep well, how depressing it was for people that lost so much of their portfolio during that time. And then I saw my clients that were initially, hey, if the market is down, you're not going to earn anything. When I, when we talked about it, it was okay, great. But then when it actually went down and it didn't go down and they in fact were, they preserved their portfolio they were like this is amazing. All right, everybody else was down 24 plus percent and they didn't. They were at zero at time, all right, or they did better, and so it really made me realize the value and the impact that finance has on our overall well-being.

Speaker 2:

The number one cause of Diverses or health issues tends to be around financial stress. This is the best medicine you can have, right? I didn't want to just treat the surface, I wanted to be able to treat the problem, the root cause, and so the result is, if you follow this, to be able to sleep better at night. Whether it's talking about specific Financial scenarios or taxes or whatever it is, there are strategies that can be put into place that allow you to not have to worry about it continuously.

Speaker 1:

So in the book called effortless wealth, it's really geared towards busy professionals. They might have a business. Why did you write this book specifically for them?

Speaker 2:

it's interesting why I have focused on busy professional and, as I was thinking about it, part of that was going back to one of my root causes, my father. I mean, it's a busy professional. It's sometimes you could say workaholic type and just passionate about their career. And these people, like my father. They worked hard, they did the right thing in many places, but then, at the same time, when it came to their own personal finances, they didn't put enough attention to it. No, they devoted their life to a career or to an organization or anything like that, and so I wanted to be able to help them out. One if you're being successful, I think you deserve it. Right, you deserve that type of assistance. You're doing a great job in your profession and helping your organization or your clients, but who's helping you?

Speaker 2:

We wanted to be the who for a lot of these people, and what we found out is just take, for example, a lot of doctors. They're super knowledgeable about medicine, but when it comes to finance, some of them think they have a lot of knowledge, but some of them don't. Right, but it's all over the place and it's never comprehensive, right? You know what we found, so I think it's okay for everybody to be in their own lane right. Even though I studied medicine, I'm not going to try to treat myself in areas that I don't know. I'll still go to a doctor for my checkup. I'll still go to a dentist, and so on. If somebody is really being successful in doing their own thing, they should also be able to go to a financial person. In our case, we introduced the concept of a family office.

Speaker 1:

Really thinking back to what you said about your father is this successful person makes good income, knows how to save. My own sense and I can speak about this from my own personal experience is that we get so busy and good at what we do we don't have the bandwidth of the time or the expertise to really figure out how to maximize the money that we are saving. That leads me to the next question, which is you also in the book, introduce a concept of what's known as a virtual family office. What is a virtual family office or what's a family office, and how do you use that to help your clients.

Speaker 2:

Actually, john D Rockefeller he's a friend. Rockefeller, in many cases, was really one of America's first billionaire industrialists and growing up, building up as well. As he was doing that in Nepal, he realized that he was talking to a number of financial professionals, whether it's real estate people, stock people, insurance people, tax attorneys or whatever it is. He realized that all of them worked in their own silos. The real estate person is the real estate's the best thing. Stock person says stock's the best thing. Insurance guys is the best thing. None of them are actually working together and corresponding together to identify what's the best way to do it. But when you look at the bigger picture, it may not make sense for that person.

Speaker 2:

It's really important to have collaboration, correspondence with all the professionals. In medicine, if somebody, if the doctor, tried to prescribe something to a patient, but the nurses and the doctors, they didn't collaborate together, that could potentially to malpractice In the same case. That's exactly what was happening in the financial arena is that all of these professionals were not talking to each other. But anyway, rockefeller decided hey, let me hire the best experts in each of these areas. He did. He said that, okay, you guys all have to work, just for me and my family, the Rockefeller family, he created the first essential family office, and with only one objective, which is to grow and protect their wealth. Now you have to be a billionaire to be able to afford that caliber of expertise and just to work for that one family. Over time, other people wanted to be able to leverage the same type of strategy. That's where the concept of multifamily office came about, and a multifamily office manages anywhere between five, 10, 20 ultra high net worth families, families that are typically above $300 million to a couple billion dollars.

Speaker 1:

Essentially, in that scenario, they're pooling resources. So instead of Rockefeller hiring everybody paying all the expenses, now you have multiple families that are still really rich, but they're pooling those resources for their own benefit.

Speaker 2:

That's right. Yeah, exactly. So maybe for each family it's 10% of the time or 20% of the time or 50% of the time, yeah, and then the purpose of my organization was to be able to bring that same type of intellectual capital, same type of tools and resources and relationships that the ultra high net worth families have, to families under 300 million, to families earning above 300,000. This is the area that we found as the most underserved community, because these are the hardest working people too, and so I felt that they deserved that type of attention that the typically the ultra high net worth have as well too. So that's been what we've been doing, and a lot of our clients call us as their personal or their family CFO or like their fractional CFO, and that's essentially what a family office is that they're to be able to help address multiple areas of concern in our organization. We're a multidisciplinary firm, so we do advanced tax planning, wealth management, risk management, legal services and business advisory.

Speaker 1:

Let's unpack each one of those a little bit more. So you said advanced tax planning. What is that? How is that different from me going to my CPA and getting my tax return done every year?

Speaker 2:

That's a great question. First of all, there's a difference between tax filing and tax planning. There's over 80,000 pages, paul, of the IRS tax code and traditional CPAs, which is 95% of CPAs. They know about one to 2% and nothing against them is just they're so busy and they live in about 150 to 200 pages of the tax code.

Speaker 1:

And, in fairness to them, that's their job, that's their expertise, that's why people come to them. It's go those core things to file the tax return. So they're doing everything. Just going back to the idea of silos, they're in their lane, they're doing their thing appropriately.

Speaker 2:

Absolutely yeah. They're following all of the compliance that is necessary for tax filing, and that's what they're there for, and that's where we have other areas of experts that understand other 98% of the tax code. We're able to partner with CPA firms to actually help CPA firms provide proactive services to their clients as well, too.

Speaker 1:

I think this really highlights it is that here you are, in your expertise, in writing, your virtual family office and I would maybe describe really being the quarterback of any ways for all these different things. As it become appropriate, you work with and in glove with CPAs and between the two of you still, as appropriate, need to bring in additional experts. It could be a tax attorney, it could be someone that has specific expertise and you're just from my understanding of what you shared is that your average busy business owner. Not only do they not have the time to investigate this typically, but there's such a level of expertise that goes and silos above what you do that you bring to the table that they would never necessarily even be aware of.

Speaker 2:

It's interesting that you mentioned that, paul, because a lot of our clients they keep mentioning Paven. I feel like I'm in Star Trek because you're constantly opening new frontiers for us. There's no way that any one person understands 80,000 pages of the IRS tax code, and it's constantly changing and evolving, so you have a team, essentially, that's willing to geek out.

Speaker 1:

I would even go back to the analogy that you used earlier about almost like the doctor's office and you have maybe your general practitioner, but then you have that person makes out referrals to specialists as appropriate. How does your model work? Are you simply referring other people, or what's different or unique about the family office or virtual family office?

Speaker 2:

Yeah.

Speaker 2:

So one of the things that we recognized early on in the industry is that if we gave a referral there was something called referral risk Never knew if the client was actually being taken care of, whoever the person that we referred to, and if they followed up, if they had the same type of level of customer service and they have the same type of ethics and all of that, whatever it was.

Speaker 2:

So we started moving away from the traditional referral. When we've developed this virtual family office, some people are in-house, but then others are actually fractional in the sense that they may have their own organization but at the same time, they're working in tandem with us as part of our team to take care of our client. It's really valuable because I'm in Richmond Virginia. I don't believe Richmond Virginia is going to have all the best experts in the world and I don't think any one organization does but now I have a team of people that they typically address and take care of clients that are also high net worth, but they're able to take care of clients that are under the 300 million mark just because of the long-standing relationship that we have with them.

Speaker 1:

If you could share a little bit more about really how the virtual family office version came into effect and in my understanding, has a lot to do with technology, maybe in the past 20 years, but really today, especially after COVID, I'm in one state, you're in a different state, here we are talking, having this interview, I didn't have to fly out to see you, you didn't have to fly out to see me, et cetera. I believe it's really true with what you're describing is that you could have a client say you're in Virginia, the client could be, we'll say, in Virginia, but the people and the team and the experts that you bring in are the best at what they do in their lane and they might be living in California or New York or wherever, and you're able to meet with them on a collaborative basis, say on a Zoom call, like we're doing now. Can you share just a little more about that process?

Speaker 2:

Yeah, In fact I'll share your story, just something that's on top of my head. As you mentioned it Just last Friday, we had a call for one of my clients. We arranged, put a team together for this client. We had experts all the way from Alaska to California to Chicago, to Florida to Virginia, all there taking care of this one client and talking to them and addressing different needs. But these are experts that are spread out all across the country. We're able to work and collaborate together. Because of the advent of technology, we're all able to get onto a Zoom call, collaborate and converse. We're able to share information, share and all of that. It was just awesome. The client in no way would have been able to find this level of expertise on their own.

Speaker 1:

You mentioned different key aspects that the Virtual Family Office really talked a little bit about advanced tax planning. Can you share maybe one more area that you help clients with under the umbrella of the Virtual Family Office?

Speaker 2:

Sure, I think one of the other areas is you can talk about wealth management, for example. Wealth management is traditionally your stocks and bonds and things like that. You have so many people that just follow the traditional means. A typical traditional wealth manager will just talk about wealth. You have your CPA that talks about taxes, but then this medium in between that could be potentially about certain types of investments that have some tax benefits and tax efficiency. The traditional wealth manager is not going to touch it and talk about it because it's not in their lane. The tax person is not going to talk about it because it's not in their lane. So typically the massive fluent gets ignored in the space. This is where we're able to bring in the right experts that have that expertise in that area. That overlap. That, I'll add, just even, for example.

Speaker 2:

Another area that's overlooked is risk management. Risk can mean several different things from a business. It could be managing risk in certain areas in certain ways, but then on an individual level as well, whether it is life risk, disability risk or long-term care risk. It could be even managing market risk or inflation as well, too. So there's a lot of different things that risk management is really important for it's a critical component of the SWAN methodology, because the whole SWAN methodology is focused on plan for the best but prepare for the worst. So you can't just look at one side of that and just plan for the best and ignore the risk of it. Only when you're able to manage the risk properly and appropriately that you can sleep really well at night.

Speaker 1:

Just from my own experience you don't know what you don't know right here. I am in my middle-late 40s, I have a family, I need to be responsible and get some life insurance, and so that, I believe, is an example of what you're talking about, of risk management. So if something happens to me, my family is taken care of. But what was interesting in just learning from you there's other kinds of risks. What happens if, in the next decade, something happens to me where I don't die but I'm unable to earn the same income that I was? How am I going to provide for my family? And really, the answer is I have no clue.

Speaker 1:

I don't have a backup plan. It's really up to me to perform and to produce, and so we're going to have a conversation about other types of tools available to help me plan for that risk. But at the end of the day, it really goes back to sleeping well at night. I want to make sure that my money is working efficiently for me, I'm getting the best return possible. I want my money to grow as avatageously as possible. If something happens, I want to be taken care of.

Speaker 2:

I want to make sure that I'm getting the best advice for me, that I'm not relying solely on, say, my local CPA, or even maybe a local advisor, because they're in their own lanes, the concept of who, not how, phrasing it in that way I mentioned in the book and the credit goes to Dan Sullivan we want to be the most proactive advisor that our clients can go to, and so really we become the who for them to open the realm of finance. There's a whole world out there. In most cases, like you said, people normally know what we know, and that's true for advisors. They only know what they know, but they don't know the spectrum that's out there, and there's so much to learn that's out there.

Speaker 2:

I've been in it plus 18, plus years and I'm still learning. We allocate a percentage of our time to constantly just learn. I think it's really important to find the right who for your financial space, and that's actually the key aspect of the word that we put in here effortless. It's not that you're not going to put any effort to it, it's we make it as effortless as possible to make it successful. You're going to have to put effort into it, but we can do the heavy lifting for you.

Speaker 1:

I love how you explain that because I think that's exactly right, I think, really embracing the who, not how, approach and you mentioned that, dan Sullivan he's a fantastic business coach and author, a very wise person in the book who, not how. So, just in the context of this conversation, I think it's really identifying who is the right fit for you, who can bring the right solutions and identify the problems and bring the right solutions to the table. This has been fantastic. Thank you so much for spending your time with us. Congratulations on the book, congratulations on the Amazon number one bestselling author success. For someone listening to this, what's the best way for them to get a copy of the book If they don't already have one, and or to reach out to you if they're interested in learning more about your services?

Speaker 2:

Absolutely. I think Amazon is pretty easy. So right now you can get the Kindle format, paperback format and the hardcover format should be uploaded in the next day or two. We'll have the audible version pretty soon. So there's four formats for people to be able to access the book, and whichever way they feel comfortable, and then soon enough, maybe down the road in the local library and Barnes Nobles as well too. But for right now, somebody wants to reach out, they can go to cotiniencotinicom, and my email is pawvinatcotiniancotinicom. Happy to see if our services are a fit or if there's another who that we can allocate them to or have them associated with as well, too Perfect.

Speaker 1:

Awesome. Thank you so much for your time today. I really appreciate it. This has been very informative. Thank you, paul, I appreciate it.