This Nurse is Optimizing Her Retirement Investing - Ep. 69
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TRANSCRIPT:
Naseema McElroy: [00:00:00] All right, Nurses on Fire. I am super excited, like really excited to have Chris Castello on from Blooom. You guys. I talk about Blooom all the time because I am such a huge fan. So to have Chris on here is a major honor. Hey Chris,
Chris Costello: [00:00:17] how you doing? Thanks for having me.
Naseema McElroy: [00:00:19] Of course. And I'm super excited because, Blooom just makes investing in your retirement a lot more, just accessible and understandable and affordable for people. But, a lot of times people just ignore it. And so I'm super excited to just dive into this topic of. Oh, so exciting retirement investing.
Chris Costello: [00:00:42] We'll try it. We'll make it exciting today. We'll try our best to
Naseema McElroy: [00:00:47] no, it really is exciting to me.
And I think it'll be exciting to audience as well. Once they realize how much control they have over it. and so Chris, before we start talking about this, I really just want to dive into your background. Like, how did you get started in financial planning, financial management services. And why did you create Blooom?
Chris Costello: [00:01:05] Yeah. Well, thank you. I love telling the story too, because I think , the company Blooom is very mission-driven. And so I think as I share my background, that story that will come out. So I started in the industry way back in the mid 1990s back when they used to call people stockbrokers, which they don't even call, they don't use that term fortunately anymore.
but I started in 95 as a stockbroker, but kind of quickly evolved into more of what a financial planner or financial advisor and, Worked for some of the big wall street based wirehouse brokerage firms, but then in 2004, my business partner and I kind of broke away and started our own independent fee, only wealth management company.
And , at that time, back in 2004, we had gotten pretty good about helping people plan for their retirement. And our target market was generally people that had at least a half a million dollars in their investment portfolio. And then, you know, as we got more experienced that number. Unfortunately like it doesn't a lot of cases.
It got higher and so towards the end of that chapter of my life, I was pretty much only helping people that had at least a million or a couple million dollars to invest at that point. And, and part of the reason why is that? You know, as a human advisor, you've only got so many hours in the day, you know, and obviously we're trying to build a successful business and I'm trying to take care of my family.
So it's like, it's not that I don't think that financial advisors are necessarily agree. It's just like you have the ability to kind of go up market. Well, here's the strange irony and problem with that is that had it not been for the fact , that I was in the business of being a financial advisor, my own mom and dad.
Would have never gotten in the door of a company like mine, they didn't have anything close to the kind of assets to get any attention from a financial advisor. And so I always kind of had that in the back of mind. I mean, they, obviously, they were clients and I was helping them, but I thought if I wasn't doing this, , that they'd be kind of left to their own devices.
And, And so that kind of always was rattling around in the back of my head. And then the other thing that happened that led us to start Blooom. The other thing that happened was for the first probably. 18 years of my career, anytime I would be out socially or standing in my driveway, talking to my neighbors or on the sidelines at my kid's soccer game.
And you meet somebody and the conversations are oftentimes, you know, what do you do for a living? And I would say I was a financial advisor, and I can't tell you how many times when I say what I did for a living. The conversation would go like this. I mean, it probably happened 50 times. It would go like this, they'd say, you know, Chris, I work at this company and we've got this thing it's called, 403B or something.
And I'm like, you mean a 403B? Yeah. Yeah. That's it. And I think at one point I was supposed to pick where my money yeah. Was going into, but I don't think I've looked at it in a while and I'm not. And I remember when I did, like, it was kind of confusing to me and they'd say, What can you take?
Like, is there anything you, can you help me with this? And I'd always say just almost as a pro bono offer, I said, just make a copy of your statement with all your options that you could pick from and send it over to me. And so, again, this probably happened 15 times pre Blooom. I bet you, in 90% of the time, I would look at this person's allocation, their setup and their 403B or a 401k or whatever.
And it was a mess. Like it looked like they had just like vomited random choices onto their paper, onto their sign up. Like, it was clear that they had not gotten any advice and it was just like a smattering. And so I'd send him back, you know, my advice on, on how to invest it and then kind of fingers crossed hope that they would take the time to implement that.
So basically. In 2013, Kevin Conner. Who's my business partner. And I were talking about how, in fact, . This was an email that actually went back and forth between this late one night in January, 2013. It's actually I'm in the Blooom office today and it's actually engraved up on the wall. And he said to me, he said, Wall Street has made a habit of running in the opposite direction of investors with small accounts. Maybe we should build something and run towards them. And so this is January, 2013, by the way, the hairs on the back of my neck still stand up. When I read that quote and I read it a thousand times. but at that time it was kind of the very beginning days of some of the online. Let's call them robo or digital solutions or starting to come out to help people with their finances.
And the great thing about what Blooom and other companies like Blooom has done for the last seven years is we have democratized access to really good professional money management. This was clearly something that if you were not wealthy, Prior to this, you had to figure it out for yourself. And some people do, some people are finance geeks and they dig this stuff.
And they'd rather be, you know, talking in Vanguard's chat forums versus watching the baseball or basketball or football game. You know? Not making fun of those people. There are out there, but most people are not finance geeks. Most people are contributing to 401ks and 403Bs.
We just need to get him help. And I think technology is a wonderful, when it brings badly needed services to a group of people that were previously not helped. And that is what's happened within FinTech, financial technology, financial services like Blooom. and so we, we wanted to build something. We kind of saw what was out there and we noticed that no other digital planet form had built an automated.
Investment advice solution for a super low cost directed. Specifically at retirement accounts, specifically 403B 401k type accounts. There's a lots of other solutions out there for non-retirement accounts. There's even a lot of solutions that are like, kind of give you a generic advice on your retirement accounts.
But what I've always said that Blooom does, the analogy that I use is that we built a platform or a tool that's kind of like. I'll use the analogy of a dietician. You know, a lot of dieticians, you may work with them or have them, you know, in the, in the place you work at occasionally. And they're great about giving advice and, and I think a lot people take that advice and maybe not always, you know, follow it exactly.
But imagine if that dietician, instead of just giving you the advice. He, or she actually went to the grocery store for, you bought all the food and then brought it back to your house and cooked it for you. It make it a lot easier to follow that specific diet. Well, that's what Blooom has done for people of these retirement accounts.
Instead of us just sending advice to you and hoping that you transact on it. If you hire a Blooom, we will actually do it for you. We will manage your retirement account for you in the same manner. That I used to manage accounts that were worth millions and millions of dollars for wealthy people. We built that advice into an algorithm that can repeat itself perfectly over and over for clients depending on their situation.
So we launched the company to the public in 2014. Today we manage four and a half billion dollars with a B for people all over the United States, specifically for their retirement accounts.
Naseema McElroy: [00:08:29] Wow. Wow. Wow. I am thoroughly impressed, but I, always recommend the tool because a lot of my audience are nurses or just people who would never have access to financial planning services.
I mean, They said, I mean, like there are very few people that have $500,000 plus let alone multiple million dollars in their accounts, but these are the people who need the help the most. And it's just something that a lot of people just don't think about, but a simple change can. Save them or help them build hundreds of thousands of dollars for their retirement.
and, a lot of what Blooom does is look at those fees that we're paying, as well as making sure that your retirement account is optimized for you. I think all too often when we start a job. We get this paperwork. First of all, we have all this other type of work that we have to deal with.
But then when we get hit with this paperwork, like you need to choose your retirement plan and you kind of just like check a box that you never think about it again until it's time to retire when you have to look at it. And oftentimes that's way too late. And so, I like to give people tools, to empower themselves, to be able to take control of their finances.
And Blooom is definitely number one in my toolkit for doing that. So I appreciate you for, having this platform, but. We haven't saying all of that stuff, but I really want to kind of dive into how robust your platform does and what it does specifically to help people in their retirement planning.
Chris Costello: [00:10:08] Well, I actually would like to thank you and your audience for what you guys do, especially this year in 2020.
you and I talked before we went online, before we went on the air, how much, you know, I have appreciated. The nurses that have been involved in my family's life in the past. And so thank you and your audience for what you guys do seriously. and nurses are specifically our demographics that I really wish , we reached more of, I wish we had more as clients because unfortunately you're all doing incredibly important work, but unfortunately you.
And that, and you and I talked about this before, went on to, I don't know the reason behind it, but you have some notoriously high cost retirement options to pick from which really frustrates me. so it's. Doesn't mean you shouldn't be contributing to these four Oh three BS, but it makes it all that much more important.
Like what balloon can do is kind of make the best of the high cost options that you might have. And what I'm talking about specifically are fees, oftentimes that you don't see, , the industry has done a really good job of hiding these, you know, and you got to read like the perspectives and on page 32, and really, really small print, you might find.
If you have a PhD in finance and have an extra a hundred hours to spend, you could research the cost of your 403B and maybe find out what these funds actually cost you. Instead. That's one of the services that Blooom is doing is that we can actually show you. For free. It takes about five minutes.
Literally it takes more than that. Email us, let us know. so five minutes and you can get a completely free analysis on the current state of your account of your retirement account. And one of the big things we do show is what your current cost situation is. And if we think just by changing. Not moving your money out.
You can't move your money out of your 403B while you're still working there. So we're not moving it out of the account. We have to optimize and make best use of what's available to you and your specific plan, but oftentimes by using some other funds that might be available to you, maybe we can build an allocation where the hidden fees are lower.
Than what you've had before. And the best way I can describe hidden fees inside of retirement account is , think of them like termites. I don't think I've ever seen a termite, like, like what it even looks like. But just because you can't see them doesn't mean that if they're left unchecked, they can't cause massive damage to your house.
Same thing in your retirement account. These fees are like termites. And if we don't understand and maybe try and reduce them a little bit over your working career from age 25 to age 60, Those fees could add up to be not just tens of thousands, sometimes a hundred thousand dollars difference. And we're talking about this is your money.
Like this is your money. And if we're just smarter a little bit smarter about the fees in your account over that long of a time period, it'll add up to a lot more dollars in your account in a year. I mean, if you're talking about, in some cases, a hundred thousand dollars difference , that might allow you to stop working. One or two years earlier.
Naseema McElroy: [00:13:16] Yes.
Chris Costello: [00:13:18] We wouldn't want that today. Like, if you knew that just one small change, let's just, we don't know what the, what, what, what the investment or the stock market's going to do, but we can control our expenses of a work at it a little bit. so to your point, yes, that is one of the things that we do is we are trying to reduce those hidden fees in our client's accounts, as much as we can.
Naseema McElroy: [00:13:39] Yes. so somebody can log on run this free analysis. I do a challenge a couple of times a year, and I have people go through the Blooom analysis and it takes just a couple of minutes. So you basically just put in your login information as you would when you're logging on to your company's retirement site and then it runs this analysis, and then it gives you like how much you're paying in fees, how you're invested, how you can better diversify and then.
Blooom offers to manage that for you. Right. And so, okay. People are like, okay. Yeah. So you get this free analysis, but now Blooom can also, like you said, like that dietician go to the store and pick up your groceries, serve your meal, like do all of those things for you, which is phenomenal, but it seems like it would be so expensive because just the nature of it.
All the things that you're doing, but you're not
Chris Costello: [00:14:35] right. Right, right.
Naseema McElroy: [00:14:38] Affordable. And that's what I love.
Chris Costello: [00:14:42] The big thing was to make this accessible, you know, there's no, you know, like in my old firm and most traditional financial advisors that have high minimums, there's no minimum here.
Anybody with a retirement account can be a client. It doesn't matter where you work. It doesn't matter where your accounts is held. Anybody can come get that free analysis for five minutes. And then, and only then after that point, after they get the free analysis, can you decide if you want to be a client.
And the price is to be a client for a year. Start at like $95 a year. Most clients pay us 120 bucks a year. That's the average across the board is 120. we charge annually, but think of it. It's $10 a month,
Naseema McElroy: [00:15:21] $10 a month. You guys.
Chris Costello: [00:15:24] Yes. And we are doing the same portfolio management that I used to do and charge clients tens of thousands of dollars a year. If you had $5 million and where my client at my old firm, you're probably paying somewhere in the order of $30,000 a year to have your account managed. And we. Took that investment advice, that those investing strategies, which by the way, investing is not super super complex wall streets made it very hard.
It's not that hard. We built some simple concepts into an algorithm and technology. The reason why we can charge $120 is because there's not a lot of costs embedded in that. It can repeat itself perfectly. The thing I want to point out too, that I think is one of the most overlooked services of Blooom, because I do think that.
Today. There's an elegant blend of technology and still access to a human when you really need it. And so Blooom included in, let's say $120 bucks a year. You actually have access to a human advisor at Blooom that you can ask any money-related you could ask a question about refinancing a mortgage. You could ask a question about saving how much to put down on a house.
You could ask a question about paying off student loan debt or credit card debt. You could ask a question about what's my HSA. Should I be investing that? And you could ask a question about. Just about anything that has a dollar sign associated with it. We tell our clients is fair game. If you're curious, if you're concerned or you have a question message, Blooom and a human, not a robot, a human will get back with you and we don't charge extra for that service.
And so I always tell people like some people that try and do their retirement accounts by themselves, you know, That's great, but you don't include it in that you don't have access to a financial advisor like you do with Blooom.
Naseema McElroy: [00:17:10] And, you know, I think people underestimate like how much that's worth cause if you were paying out of pocket to work with like a fee only financial advisor, that's hundreds of dollars a month at minimum and you usually do have to have a minimum balance. And so like, First of all. I didn't know that, more advertising for you.
Chris Costello: [00:17:35] Yeah, we need, well, we need to do a better job of making that known to people too. Yeah. Because it is a very, very valuable service. I mean, I think about all the people we talk to in March and April this year that were scared.
To death about their retirement accounts. And we don't have a crystal ball here, so we can't predict the stock market. But what we do know is panicking and selling has historically always been a really, really bad idea. Yes. And we had it, we had a lot of clients that were messaged messaging us, you know, young people.
Upper twenties or thirties, and they'd say, should I get out of the market? Should I stop contributing? And we were able to tell us, no, in fact, this is the one time where you actually should be doing more like the market is on sale. But I think about like had that Blooom not been around. There's almost 25,000 people out there that are our clients today that probably would have been trying to do it on their own.
That might have made that big mistake, but at least they had an opportunity to message us and a human like me or one of the other advisors got back to them. And, you know, I have 25 years of experience to impart upon people. And I remember the.com bubble that burst in the late nineties. I remember the financial crisis of 2008, and this is like historical perspective.
That's so helpful to tell people about, and I'm so thankful that our clients messaged us before they did something rash and bailed out or stopped contributing or something.
Naseema McElroy: [00:18:59] Yeah. I saw that a lot too. Like a lot of my coworkers were like panicking and saying, I need to stop investing. And I'm just like, please don't
Chris Costello: [00:19:10] if people, if one of the things I say all the time is that if we could wire people's brains in the same manner that you're wired as a consumer.
So what I mean by that is like, when I go look for a car. A new car or you, I like to buy them slightly used. When I go to talk to the person, working at the dealership, I don't say, Hey, can you show me the most overpriced car on the lot? You know, I'm trying to get the best deal possible. So the lowest amount I can pay for that car is good.
If we could take that same approach. And use it with your investments. There'd be a lot more wealthy people in this country. Every time. If you're a young person under the age, I'm just going to say under the age of 50, even every time the market tanks, you should be licking your chops. Yes. Buy more because it's on sale.
The same thing we do when we go to the grocery store and we see our saver, favorite box of cereal, it's on Fay on sale. You know, we might buy more of it. Do that same thing with your, sorry to get off on a tangent here about this, but
Naseema McElroy: [00:20:16] no, I think it's super important to talk about because that's real. And that's what a lot of people do.
A lot of people like sell, sell it's low and they buy high. And when, when the market is crazy, they're like, okay, Should I be in the market now I'm like, girl, you should have been in the market like two years ago when everything was on sale. Cause now it's mega high. So people don't understand that, but it's because most people weren't taught about money.
So when they start seeing that red, when they start seeing balances, go down a little bit, They, they naturally freak out, but they don't understand that the reason why the market has a higher returns is because that risk is baked in and that volatility is there. And so by just understanding that little piece, I feel like it gives people a peace of mind to know that just continue dollar cost average puts your money in there.
Even if you don't have a little extra money to throw into the market, when it's low, just continue to contribute. And you'll be fine. You'll be fine. it's, you know, time in the market, not timing. The market is what I love to tell people. So, yeah, but if you have a resource that you're only paying $10 a month to manage your account, I feel like you're already miles ahead of your colleagues of most people just in general.
Chris Costello: [00:21:40] Well, if you think about it, like we, we have tried as a country and , as a financial services industry to encourage people to save, start saving early for retirement. And that's a very mature thing to do for the listeners that are right now saving money for retirement. Like , that's a very adult mature decision to make because it's like you're choosing to part with money that you could enjoy today.
We all have things we'd love to buy, you know, that we're interested in today and you're choosing to forego that, to put it into an account that you're probably not going to touch until, you know, years, decades down the road. , that's a big, important, mature decision to make. But that's also the hardest part.
We, we say like, if you're saving the money, you've run a 25 mile marathon. Let's get. Let Blooom help you run the last mile of that marathon. You know, if you're taking your hard earned dollars. You've worked very hard for and not enjoying them today. Instead, you're putting them into an account to save for way down the road.
Let's at least make sure those dollars are working for you and making as much as you can. And things that go into that are a let's make sure we're not paying more in crap fees and we need to be paying number two. Let's make sure the allocation is appropriate for you because if you're 48 versus 28, your allocation should probably look right.
Different. And we know what that needs to look like, and we know how to make use of the options in the account to make sure you're diversified. So you're not taking too much risk. You're not making a, you know, a lot of people don't realize like that maybe they had all their money , in a large cap fund or something inside of that.
Well, that's not very spread out. Let's get some other exposure, maybe some small company and some international kind of blended altogether. that's what Blooom can do. We, we say, let us help you run the last mile of the marathon and make sure that money's working for
Naseema McElroy: [00:23:28] you. Yeah. I love that. I love that.
It's just that we just don't know what we don't know. Right. But now, you know, so no excuses.
Chris Costello: [00:24:00] That's right. Yeah. And that's a challenge for Blooom too, which I appreciate, you know, getting a chance to come honest, speak to your audiences. That there's a lot of people out there that don't even know something like Blooom exists because before five years ago, I didn't.
I mean, literally the only option before Blooom was either figured it out yourself, or if you had enough money, you might get to work with a financial advisor. I mean, that literally were, that was the only to do it yourself or go get help from a financial advisor. And I think that there are some things in this world that should not be forced DIY.
And so let's, let's use another example. I'm a King of analogies, but let's, so you're a labor and delivery nurse. Okay. Think about the thinking how crazy this is. If I'm about to tell you think what if before or somebody could come in and have their baby in the hospital that you work at, let's say that they had to show you a statement of their net worth.
And if their net worth wasn't big enough, you were standing at the door and you'd have to you'd hand them a manual. Okay. A brochure even. Okay. And it says here's how to give birth at home on your own. That's I know some people do that. Some people, but the vast majority of people do that at least have a midwife.
Right. And getting help from someone. But they get about how crazy that is. Like you would, they could, like you would not do that. You're not going to let somebody in the door because they have a certain amount of money, not in to have their baby. Cause they don't have enough money. That's what we're doing.
With employer sponsored retirement accounts, like 403bs and 401ks. It's like, you gotta figure this out yourself. Or if you've got enough money, you can get help from financial advisor is crazy. Your future financial well-being. Should not be forced DIY you should have an option like Blooom where anybody, regardless of account size, regardless of background, regardless of where you work, regardless of where the account's held, you have the ability to come get help and you can get the free advice from Blooom with no strings attached.
And , that advice you'd have to do a little work on your own. You actually could take that free advice. And actually, yeah,
yeah. Or you could do it yourself, even with that advice, you know, but if you want us to help you, then that's the next step.
So yeah, I think that personal financial security should not be something that some. People in this country are forced to just figure it out themselves. That's not fair.
Naseema McElroy: [00:26:27] Yeah. It's all about access. And I love that you're breaking that barrier. Like it's like a lot of people just don't have that access.
And like I said, it's the people that needed the most, the people with all this money usually have people at their fingertips. That they can access to help them, but it's the people that need it. The people that need to know how to manage their money, the people who need every single dollar in their retirement, just to live, just to get by that need this and it's accessible to them.
So I think this is a phenomenal tool. I don't understand why anyone. Okay. Would it wa use Blooom. I mean, unless you say it, like, you're the kind of person that hangs out in Vanguard forums like me, I have a couple.
Chris Costello: [00:27:14] I did certainly I did too. Yes.
Naseema McElroy: [00:27:20] Few and far between definitely not a lot of nurses that do that.
What about people who are saying, you know, but I haven't contributed, at this point are, I don't even, I may have been contributing and I don't know, but I don't even know what that looks like. What's the first step use help people like that.
Chris Costello: [00:27:40] Yeah. So I'll, I'll say this there's actually some cases that actually makes sense for you not to contribute to your retirement account.
And one of the big ones is if you are still trying to pay off debt, You still have a few stuff, credit card debt or student loan debt, and then the, and is important. And do you work at a company or organization that does not offer any matching funds? , so job, number one, find out if you don't know, find out if your employer will match any of your contributions.
Okay. If they do. Everyone needs to be doing it at least enough to get the free money from their employer. Imagine if your employer came to you at the end of the year and said, I want to give you a bonus. And you said, no, thanks. That's all right. You keep it. Okay. No one would ever in the history of mankind ever do that, but a lot of people, yeah, unfortunately, are not even contributing a small amount to their retirement accounts to get that free employer match.
So job, number one, find out if your employer makes a match. If for some reason your employer does not match your contributions and you have credit card debt. Or student loan debt. My advice to you, my strong advice to you would be to not contribute to the retirement account or stop contributing. If you are, and work to put every dollar you can towards paying off that debt, get that out of your life.
As soon as you possibly can. so if somebody is not contributing, I think to, to answer your question, let's number one, find out if your employer does a match. If they do, please find a way to put enough money into your account. So you get that free money.
Naseema McElroy: [00:29:28] Chris, but I do have a counter-example of that personal one.
So I'm a nurse in California and I actually make a pretty decent income just being a nurse. And so that backfired on me. So you and I was paying off on my dad. I was doing my Dave Ramsey and my baby steps, and I stopped contributing to my retirement. At the same time I was going through a divorce. So the way that I had to file change, right?
I have to file married, filing separately, which you get no, any kind of exemptions with that. And so I wasn't contributing to my retirement accounts. So my taxable income was through the roof. So I ended up having to pay $30,000 in taxes a year. So. there are cases where I should have been, throwing every single dollar into my retirement account at that point to drop my taxable income.
But yeah, that's one counter example, but that's why, even if you, Work with Blooom, or you could talk to a financial advisor, which I didn't have access to at that time. They could have told you that.
Chris Costello: [00:30:38] yeah, that's right. And that that's, I'm glad you mentioned that because it's, it is sometimes hard to give advice that's general because you're right.
There are so many times where there certain situations, which might make a difference. And so to your point, , as I mentioned earlier, anybody who's a Blooom client. If you're paying $120 a year to have your account professionally managed, you can message a human advisor and we can talk about that stuff specifically and work out a situation that might be more appropriate given your unique set of facts.
Naseema McElroy: [00:31:09] Yeah. Other also, I have had a couple people that they're. Company that they work with. Couldn't be connected with Blooom.
Chris Costello: [00:31:18] Yeah. It's rare. I think it's usually like tiny, tiny companies or like really, really. Random 401k or four Oh three B plans, but like all of the top major ones, you know, the, the top institutions that do 401k and four Oh three B plans we can work with.
Naseema McElroy: [00:31:38] What about TSPs?
Chris Costello: [00:31:39] Yep. Yep. We've got a lot of TSP government, clients as well, too. Same thing. Yep. . TSPs are actually a really well-designed plan. They're actually super, super low cost. I mean, there's, there's a lot that could be said that other plans could model themselves after how the TSP plan was designed.
Yeah. I mean, simple choices. super low cost straightforward, much easier to understand. Like I remember, I remember my sister sent me, this was years ago, sent me her, her brochure or did a screenshot of the choices in her, 401k plan. And I remember I'm like, I've got 20 years of experience in this business.
I can't even figure out. Like what some of these choices are. It's crazy. They're like abbreviated and they're hard to understand. , and I eventually, I figured it out, but I'm like, there's almost no chance. The average person is going to understand this. again, it's frustrating, but more reason why, why we wanted to start Blooom.
Naseema McElroy: [00:32:38] Yeah, I just, yeah, for me, it's a no brainer. what about past retirement accounts? If you're, if you have a retirement account with the companies that's still existing, they're like you didn't pull it out and put it into your IRA. can you still use Blooom for those accounts?
Chris Costello: [00:32:55] Yes. And those are actually, I'm glad you brought that up.
Those are questions we get all the time. So somebody, what will happen to somebody will come to Blooom. We'll get the free analysis. And they'll decide to sign up one of their accounts, then they'll message us and say, Hey, I've got like two old 401ks, you know, at my previous jobs or companies or what should I do with those?
And that's a great question to ask a human at Blooom because what we'll do, the advisor will actually go look at. Your last two plans, you've got three choices you can do with them. You've actually got four, but I'm not going to tell people the fourth one is I don't like it. anytime you have an old plan from a former employer, you can do one of the three things.
You can leave it where it's at, and sometimes you can roll it to your current employer's plan. Or the third thing like you mentioned is move it into an IRA. The fourth one is cash it out, but that's a bad, we're not gonna, we're not gonna talk about that. We're not
Naseema McElroy: [00:33:50] please. Don't please down. Just down. Yeah.
Chris Costello: [00:33:53] But he's out. So yes. Again, repeating, repeating that old 401k or four Oh three B, you could leave it with your former employer. You can move it to your current retirement plan with your current employer or three, move it to an IRA. But that's one of the things that our advisors will actually tell you what's in your best interest.
And we have no conflicts at Blooom. So like we're not conflicted to give you certain advice. Like our, the only way that Blooom makes money is the annual fee. Annual costs that you pay us period. Like there's other hidden, you know, we're not making money off of the funds or somebody else isn't paying us. It is literally what you decide or what you sign up to pay us.
so once you become a client, we can absolutely advise you on what's in your best interest with those old accounts.
Naseema McElroy: [00:34:36] So if you do have an old account somewhere, could you under the same plan, have multiple accounts under there.
Chris Costello: [00:34:45] Clients that have multiple accounts. they might have an IRA and a 403B and a Roth IRA. And, it's $120 a year per account or $250 for unlimited accounts. So once you've got, if we're going to manage two accounts, It's $240. We usually say, just sign up for the two 50 plan, because it does actually give you some priority access to advisors.
if you've got three accounts, obviously no brainer, just pay two 50 a year and be done with it. but we will, we tell our clients oftentimes if it makes sense, To consolidate and reduce the number of accounts do you have? It just makes it easier, easier to track stay on top of, you know, you don't want to be messing with it three or four different log-ins and you know, money in different places.
So if it makes sense financially, and cost-effectively, we usually tell people to consolidate.
Naseema McElroy: [00:35:38] So. Am I right. That you guys can help manage your IRAs as well. I didn't know that.
Chris Costello: [00:35:47] Yeah. Yeah. So if you've got an IRA at fidelity, Schwab or Vanguard, or we can actually manage it for you. We're about ready to expand so that we can give advice, not actually manage, but give advice on many more IRA platforms.
But today yeah. If you've got an account somewhere and, and sometimes people will come to us and they'll say, Hey, I've got this old 401k or old 403B we'll look at it. And let's say it's a high cost four Oh three B plan. We'll say, Hey. Go to fidelity, open yourself up a rollover IRA account.
You can do it all online. It's super easy. Get that money moved over from your old four Oh three B into that fidelity IRA. And then once the money's in there, you can come back to Blooom and sign it up and we'll start managing it for
Naseema McElroy: [00:36:31] you. That's awesome. Yeah. That's pretty incredible. I didn't know that. Oh my God.
So many, so many things that Blooom does, I didn't even know. And I'm like your biggest fan, like how is that possible?
Chris Costello: [00:36:45] Well, hopefully it's because we keep evolving. Sandy, what we can do. So we've got it. We're always trying to make it better and provide more services to our clients.
Naseema McElroy: [00:36:53] Yes, yes, yes. So this is some things up who is Blooom for and how can people access Blooom?
Chris Costello: [00:37:01] Yeah. So, so one of the things we haven't yet. Said so far as Blooom is spelled with three O's. Yes.
Naseema McElroy: [00:37:08] Wait, wait, wait, wait, we need to talk about that.
Chris Costello: [00:37:11] Yeah, I know that's kind of a sore subject because I do feel like we spend a lot of time correcting the spelling of that name. We thought it would be very memorable.
And I think, I think once she kinda. You know, it kind of hooks into your brain that there's three O's. And I think people remember it from that point, but yeah, there's Blooom with REOs. And the reason why is Blooom with two O's was already taken, you know, when we were looking for names for the company. but Blooom is for, this is how I would say blue Blooom is for gloom is for anyone.
That does not feel confident that they've got their, for their retirement money, working the best for them as possible. They understand how dang important that money's going to be at some point. And maybe they feel like they don't have enough money, or they've been told by a financial advisor. They don't quite have enough money to really get their time and attention.
if you feel super confident, That you know what you're doing with your, with your money, or you're already working with a financial advisor, maybe not a Blooom client, but that's not most people, most people would. Yeah. I'm not totally sure. I feel confident with what I've got my retirement money in. I don't want to go work with an advisor.
I don't think I have enough then that's, that's who Blooom was built for. And there's so many people in this country today that make up that demographic. I just described our, our, our median. Client age is 37 years old, but we've got clients that we've got. We've got super, you know, I would say I would call them very, like just, you know, money conscious people that are in their early to mid twenties that are already Blooom clients.
And I think we've got some people that might be in their upper sixties that are, yeah. Blooom clients, but definitely it's people. I think our sweet spot has been, you know, kind of 30 to 50 kind of in that demographic where, you know, you've kind of reached a point in your life where you know, how important this money is going to be.
You want it to be working for you. and maybe you've accumulated enough in your account where you're like, you know, I need to, like, this is a chunk of change. Now I need to, I need to make sure this is. This is working for me. Like it can that's the type of client that we we've done well with.
Naseema McElroy: [00:39:16] It's super empowering to me because like I said, it's all about increasing that access and, I just feel like this tool is so powerful that. Everybody needs to know. Oh
Chris Costello: [00:39:30] yeah. One of the things I tell people too, it's like PLU is not, you know, Blooom can't predict the future. You know, we're one of the things that we're never supposed to make guarantees in this business.
But one of the things I will guarantee someone is that when you sign up for Blooom, at some point, you're going to see your account value decline. I promise you that I absolutely promise you that. And it's not, if it's when and how many times, like, especially somebody that's 30 years old, that might be a client of ours for 20 or 30 years.
Like the market is going to decline several times between now and then. And you know what that matters to you? Nothing. Absolutely nothing. Leave it alone. Just. There's never, ever been a time in the history of the stock market, where it is crashed and not recovered 100% of the time when it has gone down, no matter how negative and scary and bleak things sound.
Even in the financial crisis. When we thought we were at the end of like, Money, as we knew it in 2008, 2009, it's still came back. The market has always recovered. And I sometimes I think sometimes people falsely sign up for Blooom thinking that we're like, we've got crystal balls and we'll take people out of the market before it goes down and we'll put them back in before it goes back up.
It couldn't be farther from the truth. We are going to put together a smart allocation. That makes sense for you and your age. We're going to do whatever we can to use the lowest cost funds, which are oftentimes index funds in inside of your retirement account in there. We're just going to do our best to help you behave properly.
And when you're scared messages, don't do something rash. Don't don't dial one 800, get me out. Don't press the sell button. At least message us first. Let us least talk to you. One of the things I told people a lot back in April was listen. This is your money that we're managing. You've trusted us to manage this money for you this, but this is your money.
So you're always going to get the last say in the argument. If ultimately you want to get out by God, it is your choice, but at least let us talk to you first and give you the advice first and then make a decision from there. Don't just panic first, which is what so many people had. I remember seeing the stats, how many people panicked and sold everything in March.
I don't know if those people can ever recover from that.
Naseema McElroy: [00:41:50] No, no.
Chris Costello: [00:41:52] And they thought they were doing themselves a favor. They thought they were being smart or conservative or protecting themselves. Those things. Just leave it alone. Let it recover time. Will tell message your advisor, get some perspective. If most people would follow those types of things, learning that when the market goes on sale, those are the times to buy, not sell.
Those are some of the simple things that anybody can do to make a big difference in their life.
Naseema McElroy: [00:42:17] Yeah. So all people have to do is go to Blooom that's spelt with three, and that's actually what I always say. The hardest part of using Blooom is remembering that it's spelled with the Os, but go to Blooom with 3 Os, run your retirement analysis.
Now for those people, those. Percent of people that their accounts don't sync up. Why would you recommend this like contact support and see what's going on? If there's something in the back end? .
Chris Costello: [00:42:45] Yes. Yes. Our client service team. Our superstars. I used to joke that sometimes I wish our clients would have a problem just so that they had to interface with our client service team.
Because usually when they're done talking to our client service team, they they're, they're raving fans, such good people with huge hearts, big, a sense of humor. You know, we try not take this stuff too seriously. And so yeah, if you ever have any problems linking your account. Okay. Message us. I mean, if it's during work hours, we usually get right back to you.
Oftentimes the hardest part of this is, is just remembering what your login credentials were.
Naseema McElroy: [00:43:23] That's the part. No, because you know what though, most people have never even logged in and don't even know it. Like they have to contact somebody, they have to contact HR. So yeah, that that's it right there.
Chris Costello: [00:43:37] But if you get it signed up, then guess what?
Then you don't need to worry about it after that, like just spend five minutes with us, get the account signed up. We'll take it from there. We'll we'll we will take it from there.
Naseema McElroy: [00:43:47] Yeah. So to sum it all up, you guys, I want you to utilize this, like, and I'm going to spend more time talking about the importance of making sure that you have your retirement plan all together. even if you do have debt, there is still a possibility that you should be , contributing to your retirement, especially if you're a high income earner.
but. If you don't know your login for your company's retirement accounts, please let's do that today. Like not tomorrow. Let's do that today. Get that together, honey, go to Blooom with three 0s, put that login information in there, and you will be shocked by what you see, especially like. I, I do a challenge.
Like I said, a couple of times a year and I have people screenshot how much they will be paying in fees over the life of their retirement and people are astounded. So take that and take action. And working with Blooom is super duper affordable. So why wouldn't you do it? this is not a Blooom ad as a, by the way, even though affiliate,
Chris Costello: [00:44:53] we should, we should put you on staff though.
If you keep this up.
Naseema McElroy: [00:44:58] You know, I'm down, but
Chris Costello: [00:45:01] nurse by day and financial advisor for Blooom at night. That's right.
Naseema McElroy: [00:45:06] That's right. But yeah. so pretty straightforward. At the very least for free, you will know at a glance, how you're performing. If your retirement account is optimized for you personally, not the 70 year old next to you, not the 20 year old behind you, but for you.
And you can make a choice in whether you want to work with Blooom. And like you said, it's just like having a personal chef going to the grocery store and making sure you're . Eating the most optimized meal for your body. And so why wouldn't you again, thank you so, so much, like I've had so much fun.
If you guys aren't excited about talking about retirement funds, are you weren't before you should be now because it's super exciting to me. And just by. A simple tweak. You guys are already putting your money in these accounts anyway, why not maximize it? So thanks again, Chris. You're such the bomb.
Chris Costello: [00:46:04] Well, thank you.
Oh, I appreciate it. You've done a great job of, you know, describing the value in this and I appreciate all you've done for us. And we have tried to make this. So easy and simple, no jargon, no wall street jargon. We speak to people as human beings and we try to make it as simple as possible. So yeah, anybody, that's the one thing I say, anybody, who's got one of these accounts take the five minutes to just get the free analysis.
And then after that, you can decide if you want to sign up, but thank you for what you do with this podcast. We are reaching a very important demographic. It's not oftentimes the funnest topic, but is absolutely something that can change your life. It really can. You make a couple good financial decisions in your lifetime and it will change your trajectory.
I don't mean to be too overly dramatic, but it is absolutely true. It's not, you don't need to become a finance nerd. But you need to get a little bit of help along the way and kind of just make sure you're kind of pointed in the right direction. You know, especially if you're still young, thirties and forties where this can you have time to make a difference.
So thank you for doing that. Thank you to your audience again, for what they do for all of us. when we really need the help, especially this year when there's been so much warmer at risk as well too. So thank you.
Naseema McElroy: [00:47:20] Yes. And thank you all, you know, I love my nurses, but yeah, the. Take the work out of building wealth.
Like it doesn't have to be hard. You just have to put in a couple of little things to optimize your finances and it can be really, really simple. And, you know, we need to focus on our patients. We need to focus on our own family. So why not? Like invest in something that's going to serve you multiple times over.
So that's why I love Blooom. Thanks again, Chris.
Chris Costello: [00:47:56] Thank you.
Hey there I’m Naseema
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