I had the opportunity to interview Lou Cannataro, ChFC®, REBC®, AEP®, CASL®, CLU® and partner Cannataro Park Avenue Financial (CPAF). I have met several advisors throughout the years, but never somebody who is ranked as one of the top 400 advisors by the Financial Times. We had a great meeting and discussed saving for the future, life during retirement and how to begin investing in the future NOW. Lou has a very direct approach and an attitude that screams get off your ass and go do it! He is very matter of fact but has to be in order to get his point across since he has witnessed both sides of the equation in his profession. Lou is all about providing personalized financial guidance to families and businesses seeking to achieve their economic and lifelong goals. Lou prides his company on the fundamental values of Commitment, Integrity, and Results in order to be a positive force in the lives of his clients. And may I say, Lou and his team at CPAF is the force I want behind me.

OR: Please share with us your back story.

LC: I was born and bred in the Bronx, New York. I have older brothers. Unfortunately, my dad passed away when he was 45 from diabetes and I was only 8 years old. My brothers were eight and ten years older than me so they soon moved on with their lives and left home. My wife to be back then, Colette, moved into the neighborhood a few years later and we started working in McDonald’s together. We have been together since we were 18 and now going on 37 years. We both worked through college. As I went to school full time, I was working at ABC TV as a Page working on various television programs and network events. Once I graduated, I obtained a full-time job at ABC where I continued on with my career and education. ABC paid for my MBA in finance and I also did a second MBA in marketing. 

OR: How did you form Cannataro Park Avenue Financial (CPAF)?

 LC: Once I finished my MBA, I jumped ship from ABC and I was looking to begin my own business. I began investigating different businesses and opportunities. I kept coming back to financial planning, not only due to the possible financial benefits for myself and my family, but I was going to build a business or more so an occupation where I can actually help others achieve what they wanted out of life. I could not do any of this without the help and support from Colette, especially in those early years. She not only provided the emotional support I needed, but also rolled up her sleeves to assist the firm when asked while working her own full-time job and of course, raising our children.  

I am in a field that if you are successful at it, one never really wants to retire from. My “job” is to be an effective catalyst helping clients achieve their life time goals. Think about what I do every day. I have the honor and privilege to share in my clients’ personal dreams, triumphs and unfortunately, their life struggles. I get to have real conversations and assist on decision making and execution of one’s planning that when we look back now over almost 30 years, we can see the difference we made in a person’s and their family’s life. How great is that!

OR: What do you think is one of the biggest challenges for people in the work force?

LC: I believe that the biggest challenge for people in the work place relates to savings. Most people in this country spend first and then save what is left over. Our goal is to turn that circle around. Save first and then go spend and enjoy! We want to make sure that we are not only having a good time now but prepare so we can have a good time in the future as well. One must remember that you are not saving for retirement. Retirement is an old-fashioned word that is associated with a goal many do not realize does not even make sense in our times. Years ago, people worked and their life expectancy was so short that they passed away within a few years soon after they stopped working or “retired”.  Nowadays, many will stop working at what they possibly have done for quite a while and are facing living possibly longer than the years they just worked. Most will find new “work” to fill their time and what they really want is financial control in terms of work and play for possibly another 30 years. 

 OR: Do you think most people are in control of their retirement?

LC: We looked to re-formulate and redefine the word retirement and refer to it as control planning.  Are you planning and investing for the future control of your life?  What you are truly saving and investing for is control. You want to be able to be in control of your life and do the things you want to do and possibly make changes along your journey. Many get a “job” and then get locked into a large mortgage, bills, family and they cannot afford to make a change and feel “stuck”. We do what we call FU planning! Now that stands for exactly what you think but to be politically correct, we refer to it as making sure your planning is Financially Unified to get to a position of control. That is a long-winded answer to the question. No, many do not slow down their world in the early years to give long-term or FU planning the proper amount of time, effort and consideration in setting up the proper tool and tactics to help them achieve their goals.

For those that are 5 to 10 years away from retirement, what we would call the “time when your assets are going to be called upon to provide control for the rest of your life”, there are some easy steps:

• You should truly figure out how much money is coming in every month and how much has to go out in terms of necessary bills. Of that difference, how much are you going to put away for the future. 

• Of the capital that you are going to save/invest, are you maximizing what you can do before tax in your company’s retirement plan especially if you are over 50. Not only putting the maximum amount allowed, but also the catch-up feature which totals $24k before tax.  
• If you run your own business and depending on your income, there are many different tactics in terms of creating retirement plans where you can put away over $200,000 before tax.

OR: Do you work with more than one family member such as multi-generations?

LC: Yes, CPAF advisors are now advising for multiple generations in each family. Quite often, grandma and grandpa, mom and dad, and now their grandchildren are clients as well. We are three generations deep for many of our clients. This is quite unusual in the industry. We have a retention rate of over 98%.  We also track those that have left. Over 80% have come back.  One of the major reason for the return of those that may have strayed away is the depth and importance of not only the planning and seasoned advice that we provide, but the deep meaningful relationships and level of service that we have created and provide to our clients. We never gained clients by touting that we are going to beat some index or another advisor’s returns or that there is some “special sauce” that is going to assist them in creating the “best growth” with their assets. We all know these in the long haul have been proven to be empty promises.   

 What we do offer is experienced advice coming from advisors that are not only credentialed in all the areas of planning, but also some, like myself, having almost 30 years of experience and over 25,000 hours of face to face meetings dealing with marriage, divorce, children, death, disability, great financial success and everything in-between. It’s hard to put a value on that but when our clients stop and look back at our body of work over the years, they come to realize that we are a trusted voice that provides knowledge and perspective to assist them in making good long-term decisions for themselves and their families.

 OR: What do you think of the Millennial generation that have entered the work force? Do you think that they are conscience about investing?

 LC: What do I think about millennials?  I do despise all of the names different generations have been given, for I was at the very end of the baby boomer generation. I hated the attributes that were attributed to the baby boomers, which I felt that I did not represent. I am sure that is true with the millennials and any other name or attribute given to other generations. Are there individuals within the millennial generation that are wealth conscious people? You bet!  There are wealth conscious people in all generations.  Some people live check to check and may not be able to save each month just because of their basic bills match their income.  And either they have to increase their pay or find a significant other to add to the family income. However, there are many that will continually increase their spending as their income increases, for they simply want to enjoy the funds now. Their problem is that they will not be creating and investing assets to gain control of their future when their incomes slows or stops.

The uncertainty and volatility in the investment market might cause individuals to shy away from putting money into an investment account or retirement plan, but I do not think it is the volatility that holds them back. I just simply think it is a lack of education. Especially for the younger generations because many feel that all of the answers are available online and a simple Google search on any financial topic, will be great a tsunami of information and opinions.  The reality is the internet is a fire hose of information flooding your world. The answers and wisdom on what are right for each individual, needs to be hammered out through internal reflection and thoughtful planning. Once somebody is taken through a very detailed and simple introspect on their lives and their goals, what needs to be done can easily be identified. The even bigger trick is to continually stay on course even when that course is changed due to the ever-changing realities of one’s life.

 Especially in my family, discussions around money, investing and planning were nonexistent.  Since my father passed away when I was eight, there was never any discussion around the topic of money for quite frankly, there was not much to discuss for there was no money.  Whatever my brothers or I needed or wanted, we had to make it on our own. Which by the way, was great training ground to get up on your own two feet and make things happen. 

What I find now for my clients, we are the ones that bring up multi-generational planning and try to get the children involved early on. Many of my clients may have the attitude that the children are on a “need to know” basis about their mom and dad’s thoughts on money and investing and “they don’t need to know now”.  That is a recipe for disaster for the children because when they finally do hit their working years, they will have no concept of investing and saving. Furthermore, when their parents begin to get old and/or pass away, the children now take charge.  Now we have the children taking over the reins and are uninformed.

The Wall Street Journal (WSJ) wrote an article that CPAF was discussed in covering this topic, “The Best Way For Wealthy Parents To Talk To Children About Family Money,” by Cheryl Munk. The WSJ discussed with us how we work with families in multi-generational planning. For our practice, this is a very important concept that we like to bring to light as Mother & Father’s Day approaches.  Keep in mind, it’s just not a dad topic. Mom quite often can be the larger breadwinner and even if not, she is very influential in teaching and nurturing their children, which should also include the topic of finances as well. 

OR: What tips can parents provide for their children?

 LC: Parents need to discuss money to bring their children into their world of finances and what they have done right and more importantly, what they have done wrong. Many parents do not want to admit to their children their financial mistakes. It is funny, for parents will gladly tell their children about the mistakes they made in other areas of their life in hope they do not repeat the behavior. However when it comes to finances, they tend to go silent. Maybe they possibly didn’t save as well, or started late, or had the wrong philosophies and how they had to change gears later on in life. This financial knowledge, experience and advice must be handed down to the children. What you do not want is to hand these mistakes down to your children in terms of them seeing what you have done in the past.  Which by the way, you now know were incorrect and the children may just simply imitate the wrong actions or decisions. We need to break those habits and teach our children the good habits from the beginning. This provides them the ability to confidently make decisions in terms of savings and investing in the future.

OR: Should investors focus on the stock market as their primary investment option?

 LC: The stock market is not the only investment option, nor should it be. One should invest in themselves in terms of education and advancing their careers and abilities, invest in their homes and real estate, invest in life insurance, annuities and utilizing tax-efficient plans such as 529’s and Roth IRA’s. There are numerous tools and tactics that go into putting together a well-diversified and supervised strategy in creating your asset base that will provide that control one looks to achieve for their future.

OR: What about investing in real estate. Is that a good option for those who can afford to?

 LC: Real estate can be a good investment. However, the effectiveness of that investment is quite overblown. Many will say they bought a home for $500k and 30 years later, they doubled their money selling for $1M. One should check their math. If they look at the interest that they paid on that mortgage for those 30 years, they are probably pretty close to spending $1M. Never mind all of the maintenance and real estate taxes paid over those 30 years. The effect of owning your own home and providing continuity for your family is priceless. But that’s a different type of return. If you cannot afford to own your own home and still want to invest in real estate, it should be part of your investment strategy and there are many different funds, ETFs and/or types of investment properties to consider.  

OR: Thank you for your stellar insight and saving strategies. This is certainly a real eye opener for all of us.

LC: My pleasure and thank you for your time.

For more information, please visit http://www.cannataro.com and interact on https://twitter.com/CannataroParkAv and https://www.facebook.com/cannataroparkave/