We caught up with the brilliant and insightful Brandon LaValley a few weeks ago and have shared our conversation below.
Brandon, appreciate you joining us today. Let’s kick things off with a hypothetical question – if it were up to you, what would you change about the school or education system to better prepare students for a more fulfilling life and career?
I think the public education system does a real disservice in providing even basic financial education to our students. I was recently giving a guest lecture to a group of seniors at a local high school. Out of 24 students, 22 of them could not correctly fill out a check. Only one said they had ever filled out a budget and only two said they help with the budget at home. Only about 1/2 the class had a basic understanding of how credit works and how it gets reported. Less than half could tell me anything about how the stock market works, how a bond price is calculated, or the basic process of a mortgage. Some of them were doing differential equations in their AP math classes but don’t know the very basic things about personal finance.
This is evident in the real world when someone comes to me in their 50s and wants to retire early but hasn’t been saving aggressively or the couple that calls and wants to buy a house. They have great incomes and they know the neighborhood where their colleagues live. Should be pretty simple until you realize they have a ton of student loan debt, they both financed their cars, they have a boat or an RV (or both) and they can’t figure out why they can’t qualify for a house in that neighborhood. People making a fraction of what they make are buying nice houses. They don’t understand the concept or practice of Debt-to-Income ratios. It’s elementary-level math, they’ve just never been taught how to apply it to their financial situation. It’s one of the reasons Dave Ramsey is so successful. Aside from being a brilliant marketing machine, he’s teaching everyday easy, basic, personal finance and fiscal responsibility to adults who never received that education in the current education system. When I look at all the “silly” electives available in high school, I find it sad that most of our graduates are going to have to learn basic finance the hard way. (I do not endorse and am no way affiliated with Dave Ramsey or Financial Peace University).
As always, we appreciate you sharing your insights and we’ve got a few more questions for you, but before we get to all of that can you take a minute to introduce yourself and give our readers some of your back background and context?
I’ve always been interested in finance. When I was 14, I walked across the small town where I grew up with a fist full of lawn mower money, into the broker’s office, and said I wanted to buy one share of Coca-Cola. I knew the broker pretty well and he handled the situation very professionally. He called my grandmother (one of his clients) and explained what was happening. She drove down and later that day I walked out with a paper certificate of Coca-Cola, which I still have today.
Fast forward almost 20 years and I’ve graduated from the US Air Force Academy, I have a couple of master’s degrees (one in financial planning) and I’m winding down my full-time flying career as an Air Force instructor in the F-16 and AT-38. I met my business partner in the Air Force. We were both approaching the end of our commitment (10 years for pilots) and wanted to work in finance. I was pursuing a client-facing role and he was more interested in back office and portfolio construction/management. We were both being recruited by multiple firms and one day, on the plane ride back from a recruitment event, we decided to try it our own way and see if we could do better for our clients. With lots of support from our friends and family, we launched Targeted Wealth Solutions about a year later. We’ve been a fee-only, fiduciary, Registered Investment Advisor, for almost 10 years now. Only about 11% of financial advisors can claim they are fee-only, and fiduciary in everything they do and we’re pretty proud of that designation.
As you can imagine, a big part of financial planning, consulting, and management involves discussing real estate. It’s often the largest asset or liability for many individuals and business owners. About 3 years ago I helped launch Trailhead Mortgage. We currently have 13 employes and are licensed in 11 states and expanding. If you check out our webpage you will see the Air Force fighter pilot theme in out employees.
Let’s move on to buying businesses – can you talk to us about your experience with business acquisitions?
Hopefully you’ll find this wild card funny. I did buy a business. I was a full-time AF instructor pilot and I bought this business 50/50 with another full-time instructor pilot. The business was pool cleaning and maintenance. The business model seemed foolproof. We could pay employees almost 1.5x what the average pool company was paying, provide trucks to our employees, and still make a very acceptable profit margin. Enter all kinds of lessons learned about labor expectations and management. In the 1st week, we lost 30% of our clients to the guy we bought the company from (he started a new business with his grandson). A No competition agreement would have been nice. We also lost another 20% in the first week because the clients didn’t like the new crew. In week two our team lead wrapped the 1st company vehicle around a tree and went to the hospital and then jail for being under the influence of just about everything. It’s not all doom and gloom. It took a lot of time and effort to find good/reliable employees but we eventually did. We were able to take the company from a 50% loss in the first 2 weeks to a 5X multiple in just over a year. We sold that business for about 8X what we paid for but it cost a lot of blood, sweat, and tears. I still to this day think that if you can find good help that’s a great business model.
How about pivoting – can you share the story of a time you’ve had to pivot?
The life pivot for me was intertwined with business, life, and career. If you know anything about the airlines you know that the United States is dangerously short of qualified pilots. You probably also know that airline pilots get paid really really well for a job they self-proclaim as simple….and they only work half the time. There is a reason every single one of my friends and former colleagues is flying for an airline. I can think of only one other person in my core group of 100+ pilot buddies from the Air Force that hasn’t been hired by an Airline. So for me, it was a big leap to start a business from scratch, no real experience, and walk away from a very lucrative, very easy job. The main reason I left active duty flying was because I was sick of being gone all the time. I also have a deep-rooted passion for helping people achieve their financial goals and if I can spend almost every night at home doing that I had to give it a shot.
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