Why Investors Shouldn't Wait to Enjoy Their Money

Photo by by Samantha Zauscher.

Editor's note: This article first appeared in the Q2 2022 issue of Morningstar magazine. Click here to subscribe.

For all the complexity of financial planning, Dustin TenBroeck reminds clients that it all boils down to basics. The financial planner and president of San Diego-based Presidio Capital Management says personal finance is really just a matter of math, with two overarching variables.

"We have two things in this world: our time and money," he says. "Everybody wants to save time, save money, spend time, spend money, manage their time, manage their money."

He counsels clients to view dollars differently. "We want to educate our clients that money is not real. It's a means to an end. We have to do things with the money to have it matter."

In that vein, he finds that people are often too conservative with their money. Under the guidance of TenBroeck, 40, some clients discover they could have already retired. And TenBroeck sees clients who die before they get to live out their dreams. He says people get caught up in the grind to earn money and save it and lose sight of the passage of time. "You are going to run out of one of these two things, and I bet you it's not money," he says.

Do the Math

To better prepare, he gets clients to focus on four variables: assets, liabilities, income, and expenses. TenBroeck and his team will make projections for each, mapping out a financial picture that helps clients crystalize what's possible and what life goals to prioritize.

"We educate people about the importance of just doing the math to find the right answer and help give them the guidelines into what the future looks like, so that they can make decisions with their life today," he says.

When TenBroeck started his firm in 2012, he noticed there was an abundance of information available to help people plan for retirement and help them invest for the long run and defer taxes.

But there was a dearth information available to help people near or already in retirement. So, he started offering seminars to bridge the knowledge gap for his clients.

Now Presidio offers clients a suite of modules dubbed Retirement 101 to help them along the journey. Topics include whether to pay off a mortgage, how not to run out of money, when to take Social Security, whether to buy long-term-care insurance, and whether to buy a rental property.

TenBroeck uses Morningstar Workstation to evaluate client portfolios and compare them with benchmarks. He also uses it to analyze exchange-traded funds and mutual funds in the portfolios. He uses the screener to have a list of alternate funds at the ready.

TenBroeck's strategies have helped build a steady business composed of about 200 households as of late February 2022. Assets under management were about $250 million, up from less than $100 million three years earlier, and the firm employs about a dozen people. Most clients are retired, or close to retiring, and most have already experienced some success in their careers, with assets between $2 million and $4 million.

From a B to an A

Successful financial advisors need to be good with people, and TenBroeck learned some key interpersonal skills growing up in Mountain View, California, in Silicon Valley. His parents were divorced but unified on the importance of education. Get the grades, they said, but more importantly, develop the tools and strategies to stay on top of school.

His dad gave him tips on how to negotiate a B grade to an A when TenBroeck was in high school. TenBroeck would often go to his teacher to do extra credit. "If they said no, you did it anyway," he says. "You would hand it in and be surprised what would happen." He would also offer to help teachers during his lunch to curry favor.

TenBroeck had good motivation to get the better grades: keeping the driving privileges for his 1986 Ford Mustang convertible. Often his dad required him go to his teachers on Fridays to sign off on a form that said he had completed his assignments and indicate his current grade. Anything less than a B, and he would lose the rights to drive the car.

The networking and discipline developed in high school proved to be good training for the financial world. So did college. He majored in finance at San Diego State University. A portfolio management class enhanced his interest in investing. Through his involvement with various business clubs on campus, he got to meet alumni who came back to speak, including investment managers, financial advisors, hedge fund managers, and bankers. He was enamored of investing, and of the then-nascent concept of socially responsible investing. After graduating in 2005, he took a job selling retirement plans to teachers, helping them save more cash to invest.

Family Time

He lived at the time in Pacific Beach, a San Diego seaside haven that back in the day was a magnet for young people, college students, and surfers. Renting a bottom apartment in a duplex, he started dating a woman named Heather in the apartment upstairs. They would later get married, and Heather TenBroeck is now director of client relations at Presidio. Heather TenBroeck's father owned the building they lived in. "My father-in-law was my landlord first," Dustin TenBroeck says.

TenBroeck later worked for a firm that served high-net-worth clients, then he struck out on his own in 2012 with only about $3 million in assets in management. He held weekly calls with his dad and stepmother, who served as de facto marketing consultants. As a way to get clients, he rented space at universities and libraries to teach the retirement seminars. When the coronavirus suspended in-person classes in 2020, TenBroeck moved the topics online, branding the modules Retirement 101. (Nonclients can pay $79 for the set.)

TenBroeck, of course, stresses the importance of financial planning with clients, but he and Heather make sure they do it themselves. The two meet every other Friday morning for three hours to talk about their own needs as individuals, a couple, and a family. The planning ranges from date nights to vacations to their own personal finances.

"We set all these goals for our business and clients, and we set strategies to accomplish these goals," he says. "You have to do the same thing in your marriage. That's our time to plan, because life can just pass you by."

Bio

Dustin TenBroeck, CFP, president of Presidio Capital Management.

How he caught our eye: Puts a focus on financial education with clients.

Career path: Graduated from San Diego State University with a business degree in finance. He first worked as a financial advisor at AXA Equitable, then as a relationship manager at Centara Capital Management, a San Diego firm that serves high-net-worth clients. He launched his own firm, Presidio Capital Management, in 2012.

Personal: Lives in San Marcos, California, about a half hour from the office in San Diego. Married to Heather TenBroeck, director of client relations at the firm. They met in the 2000s, when both rented separate apartments in a duplex. They have two sons, ages 10 and 14. For exercise, TenBroeck likes to run in the hills near his house with Dash, his golden retriever, a dog so adored that clients sometimes offer to take care of him when the TenBroecks take vacation.

Favorite funds: Likes using exchange-traded funds because of their cost and tax efficiencies.

Charles Keenan is a freelance financial journalist.