Spellbound by Financial Reality

By John A. House ChFC CEPA

Why do successful entrepreneurs with dynamic skillsets become victims of financial chaos?

The reason is because proactive financial planning is not their priority. They profess to be too busy, and so they fail to protect themselves.

John House, the president and CEO of MasterTech Financial Advisors, shares true stories of real people in challenging situations in this business guide that delivers a financial reality check.
The compelling stories in each chapter will help you:

• safeguard what’s most important to you;
• identify business partners that align with your financial interests;
• incorporates finance, legal, tax planning, insurance analysis, and professional asset management into your business strategy;
• build a foundation to resolve numerous, mostly hidden, financial deficiencies to achieve a true sense of financial well-being.

Don’t be one of the many uninformed individuals who focus their expertise on entrepreneurial endeavors instead of strategic planning. Get intelligent solutions to complicated financial problems with the insights in Spellbound by Financial Reality.

• Language: English
• Publisher: Balboa Press
• Release date: Jan 18, 2022
• ISBN: 9781982278861

John A. House ChFC CEPA

John House heads a team of professionals who combine their in-depth skills, knowledge and experience to provide entrepreneurial clients with a personalized, approach to investment management, insurance analysis, business continuity planning, asset protection and retirement planning. “Our mission,” he says, “is to inspire proactive individuals to aggressively accumulate, protect and preserve assets, while minimizing income taxes and estate taxation.” John, a member of the National Association of Insurance and Financial Advisors (NAIFA), is well qualified to lead his team. A financial professional since 1983, he has the in-depth knowledge that comes from over three decades of experience guiding clients toward their financial goals through challenging economies. As a Certified Exit Planning Advisor, he helps business owners develop a viable transition strategy. John’s credentials include a B.S. from the University of Iowa, four securities registrations, and the designation of Chartered Financial Consultant (ChFC). Earning that elite designation required advanced coursework that trained him to help clients with virtually all their financial needs. He has offered expert witness testimony in insurance litigation and is registered to offer securities in 14 states and shares his experience on the subjects of advanced estate planning, legacy (philanthropic) planning, tax advantaged business sales and transfers and asset protection techniques in those regions. John has served the community as Board Member and Past President of Arizona’s Planned Giving Round Table (PGRT). In addition, he maintains active memberships in the Exit Planning Institute (EPI), the Association of Fundraising Professionals (AFP), the North County Estate Planning Council of San Diego (NCEPC), the National Association of Insurance and Financial Advisors (NAIFA) and the Family Firm Institute (FFI). John is a prior member of the Advanced Association of Life Underwriters (AALU) and has served as the Vice-Chairman of its nationally organized Charitable Planning Counsel. A gifted speaker and writer, John has shared his knowledge of financial issues through national speaking engagements, his own radio show, continuing education workshops, and articles for numerous publications including the Family Business Journal, AZ Business, Financial Playbook, the AALU Quarterly, and Financial Planning Magazine. His dedication to helping and educating others, as a gifted problem solver, has led to a loyal and growing clientele. John, as a founding Board Member, helped establish the San Diego Exit Planning Institute (EPI) Chapter, was an active owner and prior member of the Board of Directors of AdvisorNet Financial, a multi-faceted financial services firm supporting over 300 individual financial advisors and is President and CEO of MasterTech Financial Advisors, Inc. He is a past Member of the Board of Directors of NestWorth Inc., a San Francisco domiciled Residential Real Estate Investment Company, and is Chairman of the Board of Beyond the Ask, Inc. an Arizona based philanthropic planning organization.

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Copyright © 2022 John A. House, ChFC, CEPA.

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except in the case of brief quotations embodied in critical articles and reviews.

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expressed in this work are solely those of the author and do not necessarily reflect the

views of the publisher, and the publisher hereby disclaims any responsibility for them.

Any people depicted in stock imagery provided by Getty Images are models,

and such images are being used for illustrative purposes only.

Certain stock imagery © Getty Images.

ISBN: 978-1-9822-7885-4 (sc)

ISBN: 978-1-9822-7887-8 (hc)

ISBN: 978-1-9822-7886-1 (e)

Library of Congress Control Number: 2022900530

Balboa Press rev. date:  02/17/2022

CONTENTS

Preface

Chapter 1     The Cactus Beer Haven

Chapter 2     Pinnacle Sign and Design

Chapter 3     Veterans in Need

Chapter 4     Smashing Elevators

Chapter 5     Seattle Eye

Chapter 6     James Elevator Company

Chapter 7     Kool Hot Tubs

Chapter 8     Restore Collection Agency

Chapter 9     Prunes Galore

Chapter 10   Murphy’s Plumbing

Definitions and Disclosures Appendix

About the Author

PREFACE

F inancial advisory services appear everywhere, often with the outcome of financial confusion. Banks, law firms, brokerage houses, accounting firms, and financial planning organizations comprise the offering. Consumer ignorance and ambiguity abound. Unlike a broken bone that requires surgery, catastrophic financial consequences can hide. How does one know when to seek the help of outside expertise? The financial world becomes even more treacherous when the human elements of procrastination and denial occur. Why do you think the following financial deficiencies are rampart in our American society?

1. A frivolous lawsuit becomes a reality and judgment creditors seize all assets.

2. Death occurs without testamentary documents that result in financial chaos and emotional stress for loved ones.

3. Insufficient life insurance results in family poverty after the breadwinner’s premature demise.

4. A viable business is forcibly liquidated due to the owner’s mental or physical incapacity.

5. The IRS becomes the largest single beneficiary of an estate.

6. No business continuity or contingency plan exists.

7. Inadequate income tax planning - paying too much in taxes.

8. No effort to mitigate the financial and emotional impact of Long-Term Care (LTC) qualification.

9. No Investment Policy Statement (IPS), resulting in an ‘a la carte investment approach whereupon assets are directly subject to market volatility.

10. No effort to protect assets from the risk of civil tort litigation.

11. Business assets subject to a confiscatory estate tax lien.

12. No plan to prepare for increased life expectancy.

13. Inadequate assets to accommodate a reasonable retirement.

14. A business owner fails to consider the establishment of an Exit Plan.

The answer is obvious: Uniformed individuals focus their expertise on their entrepreneurial endeavors rather than strategic planning. They don’t know what they don’t know!

Therein (not to be harsh or judgmental) is the purpose of this book—-to educate and inform, but not with analytical dogma and complicated words; rather with real life stories about real people in challenging situations. As humans, we consciously strive for our true meaning in life designed to make some sense out of our earthly experience. Intrinsic to that meaning for most successful individuals is a strong desire to give back, develop a significant legacy, experience meaningful relationships, and protect loved ones. The stories contained in each chapter will help you decide what is important to you and we hope serve as the catalyst to take pro-active action.

It is important to remember that there are no simple solutions to complicated problems; just intelligent ones. Accordingly, I strongly believe that well-informed financial decisions are predicated on understanding the moving parts of each planning strategy or technique. To accomplish the utmost results, you will require a strategic business partner who aggressively pursues your best financial interests. Next is the mandate of a team approach that incorporates finance, legal, accounting, consultants, tax planning, insurance, and professional asset management.

Never ever underestimate the importance of the subjective factors in life: emotional stability, values, goals and objectives, past experiences, and risk tolerance. Each needs to be carefully addressed and evaluated in the development of your own Master Game Plan®!

The names and places of the clients represented in each chapter have been changed to protect the confidential elements of each family and to honor the integrity of my fiduciary planning role. I have incorporated into each chapter a succinct understanding and complete explanation of the take-a-ways and bottom line results that either resolved or mitigated the identified planning deficiencies, achieved a sense of financial well-being, and helped our clients create a dynamic family legacy.

CHAPTER ONE

The Cactus Beer Haven

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S everal decades ago, Elmer, a Montana native, decided (based upon his patriotic beliefs) to enroll in the army for World War II. He was immediately rejected because of tuberculous and an injured knee. He would not accept defeat, found a way to convince the Army medical officer, and was ultimately awarded acceptance. His perilous experience and survival during the war as a D-day veteran could be it’s own separate book! He did share with me, as a former intelligence officer, what he called the secrets of D-day and why deception was the key to winning the invasion of Normandy.

Secret 1

According to Elmer, all of southwestern England was an armed camp. From Cornell to Southampton, in the green valley of Wales, the men and machinery of the planned invasion were assembled and waiting. Piles of ammunition crates were stacked ten feet tall under the hefty branches of oak and chestnut trees. Half-tracks, armored cars, two-and-a-half-ton Dodge trucks, and Sherman tanks lined up bumper to bumper as far as the eye could see, ready to embark for the Normandy shore. On the other side of the Thames, in Kent, in East Anglia, and behind the white cliffs of Dover, the scene was repeated. Olive drab Army tents with their cookstoves pumping smoke into the skies were rampant. Here too were thousands of jerricans, row after row of Sherman tanks concealed beneath the protective awning of their camouflage netting.

Several things set those encampments, speckling the countryside of southwestern England, apart from their sister encampments on the other side of the Thames:

1. There were no troops inside those tents.

2. There was not a single round of ammunition in those wooden crates.

3. There was not a drop of gasoline in those jerry cans.

The Sherman tanks were not made of steel but of rubber and were inflated by air; they were totally harmless! They all belonged to the an army of ghosts" was designed to convince the Germans that England maintained a superior army.

According to Elmer, that phantom army was the proudest creation of Colonel John Bevan, the British officer who was responsible for Fortitude, the plan designed to deceive the German High Command about the Allies’ real intentions on D-day. It was all a charade, but it was a deadly serious charade that actually worked.

Secret 2

Another fascinating story concerned Rommel, the chief field officer of the German Army stationed in Normandy. According to Elmer’s sources, through a combination of interesting events, mostly because of adversarial weather reports, Rommel decided to return to Germany for his wife’s birthday with a special gift of high heeled shoes and actually missed the opening Normandy invasion. The consequences of his absence were deemed significant, based upon his stellar military expertise.

Secret 3

Deception, according to Elmer, won the war for the Allies. So many double and secret agents were consumed with diffusing and mixing up the intelligence on when and where the Allies’ invasion would occur. Ironically, in a famous meeting with Hitler and his generals, an unknown report came in that identified the exact day and the location of the Allies’ actual planned landing. It was rumored that Hitler told Albert Speer that the information was another trick and should be disregarded, when in reality it was accurate.

On a quiet night, in a private section of the Cactus Beer Haven, Elmer told me a story that I will never forget! He shared with me a near-death military memory that he claimed to think about every day of his life. After the Normandy invasion, amid massive fatalities, Elmer got separated from his platoon. He sought refuge in an old vacant house in a small French village in an upstairs bedroom, where he sought to recover from complete exhaustion. Deep into the early morning hours, he woke up and discovered that a small group of Germans (he had learned some German) were searching the house. As he shared the story, I could sense his emotional challenge. He began to perspire and stutter a little as he described the treacherous events that followed.

He knew that he would be shot! That was what German officers did to their enemies. He was totally petrified! When a young German officer entered the bedroom and discovered Elmer standing in the corner of the room shaking from fear with his rifle on the floor, something amazing happened! The officer readied his pistol and then smiled slightly as he loudly exclaimed to his compatriots that the room was clear and left Elmer standing there.

That experience conditioned the rest of Elmer’s life with something he called daily gratitude, a practice he exercised nearly every day from that moment forward.

When Elmer returned to Libby after the war, he elected to use a Federal Education Grant to attend law school. With his unique military background and his perception that Libby would become a much larger city, he chose civil tort litigation as his specialty. Getting started was not easy, yet Elmer’s life had been built upon tenacity. He could not fail! After two years of financial turmoil, amid the difficulty of competing against much larger and better established law firms, he decided to open a retail store in Old Town Libby. His game plan would be the resale of military equipment and clothing to the cowboys of Montana. With his legal background and some old connections in the military, his business boomed. He expanded to other locations in Montana with similar success. Next, he decided to open a rustic bar in northeast Libby. He incorporated a military theme with tanks, jeeps, and anti-aircraft guns on one section of the forty-five-acre property that he had acquired. He decided to section off the bar into special divisions. After completing his military section, he brought in mining and farming equipment, including a corral for live mules, designed more for local residents. Next was the cowboy section, where he acquired a large inventory of historical artifacts, including the construction of a barn and horse corral with horses! As the final component he decided to build a Harley bar section for his motorcycle friends.

At the center of The Cactus Beer Haven was a dance floor. He discovered that selling beer was much easier than both law and retail sales of military clothing and equipment. His establishment, when I was introduced to Elmer, held the record for the most beer sold by any bar in Montana on an annual basis. Elmer acquired additional properties and became a major player in the Libby real estate market place. He owned property all around Pelican Peak Mountain, a famous landmark in Libby.

Unfortunately, Elmer and his wife became their own best bar customers and developed an excessive demand for alcohol. Lucy, Elmer’s wife, had passed away from liver failure several years prior to my introduction