 And welcome to this week's edition of Business in Hawaii. I'm Daelyn Yanagida, and we are broadcasting live from the Think Tech studios in downtown Honolulu. If you want to tune in live, we are at www.thinktechhawaii.com. While there, please subscribe to our programs and get on our mailing list. The theme of Business in Hawaii is to share with you stories of local businesses by local people, and our guests share with us their journey to building successful businesses right here at home. In the Think Tech studio today is ESA Kaja Hero. ESA is a financial thinker and communicator with the investor group Hawaii. ESA, so excited to have you. I've got to tell you, I've never met anyone with so much energy and passion for this unknown space that as individuals and as entrepreneurs, we always talk about. So I want to know how at the end of the day, you decided that your career space was going to be in financial advising. Wow, good question. So that's going to take me back 15 years where my financial career started at one of the bigger companies in the country, and really I think it was the normal way. Now you get hired to tell you what to do, and you go do it. In fact, you go do a little more because you're competitive and sort of afraid that you might not make it. And that's really where it started, I think, and as time went by, 12, 13 years later, I was still that competitor where it's like, man, in the game of financial advising for the most part, it's about bringing assets in. It's under management, AUM, it's all over the place. And in order to get it, you need to know something. I mean, Honolulu is a very competitive place. There are many, many great institutions and great financial advisors. So I was thinking like, what do I need to know to really attract some of the more successful behind-net worth people from a business standpoint? And that's where I did a little exercise and I came up with a thought and it was around protection and whether it was liability or taxes, that people were more interested in that than an investment where you could get almost anywhere. So that's where the magic started to happen as I then became creative in outsourcing my knowledge and that led me to start thinking different, asking different questions now I'm here. You know, I think what's a unknown space for a lot of us lay people is what is a financial advisor because what you just said was liability, taxes, investments. Now, I think synonymous with financial advising, okay, investments, they probably go together. When you say liability and taxes, some people might think, oh, I'm going to leave some of that to my CPA, to my broker. So how does that all get wrapped in together? Yeah. That's a really, really good point and question because I was told the same thing. Okay, leave the tax thing to the CPAs and tax preparers, leave the legal thing to the attorneys. Makes sense. Yet, we are empowered to open accounts, these qualified accounts called IRAs and Roth IRAs. That's a tax decision. So we need to think about that, but the whole point in learning finance, right, is financial advisor is to add value to the client relationship and experience. And so although I do not give legal and tax advice, if I study it and I can help people ask questions to our partners, the CPAs and state attorneys, tax attorneys, real estate attorneys, then together as a professional group, we can provide a better service for the household, for the business. And that really drove me because for many years, I made excuses in my head to not read the book because my company told me not to. But I just became very bored of talking about investments and the same thing over and over. I became intrigued with the tax code and reading it and asking questions to CPAs and tax attorneys to try to see where does it all fit in? To me, every part of the code is an opportunity for someone to take advantage of and put themselves in a better spot. What about the liability aspect? Yeah, so the same thing. If you sort of understand some of the terminology or some of the strategies and to say, estate planning, trust planning, you can do the same thing. You can ask the questions, for example, the adoption clause, because it sit well with you, that it may say that everyone adopted is considered family. And yet we see so many maybe second marriages or even first marriages where there's kids involved, there's yours, there's mine, and there's ours. And so then it becomes complicated with adoptions. And so sometimes the questions the clients are just unaware of. And so as you talk to attorneys, you learn some of the things that they're concerned about, then you can pass on the question in a form of knowledge so that they can perhaps get more information or better knowledge. Okay, so I'm going to try not to ask all my personal questions because we really want to know about you and about your passions. But before I do that, why don't you just get a quick background on the investment group, investor group Hawaii? What your role is there? Yeah. Okay, so investor group Hawaii is a company that I started back in September 2016. So just made three years. And I was inspired by my knowledge. I was inspired by math, my science, the universe. It sounds crazy, but it really makes me try to think of the most difficult financial questions that I cannot answer. And I sort of, I guess, outgrew the company that I started with, and I love them to death. And if they're watching, you know, I know you guys, and I think I'm still doing this for the people of Hawaii. For my old company, I feel like I can help them more by leaving in a weird way. But I got started, you know, with the knowledge and just sort of the math not making sense at a certain point. So then I got really confident in a different sort of breakdown of how money was being paid to me. So I thought that taking the leap of faith and starting my own business would be the best thing for me, even though I was helping lead this other company and leaving a lot of people that I love sort of behind or putting on them. But what pulled me through is that when I think about my career purpose, I think about everyone in Hawaii. I think about, you know, my upbringing, you know, from my mom and dad, they had a janitorial business that I worked in seven days a week from eighth grade to twelfth grade. You know, I think about everybody from, you know, they're Uber successful to rank and file, you know, whatever you want to say, and I just feel like everybody deserves to be helped. And yet, sometimes, unfortunately, the lower you are in the tax bracket sometimes is harder to get help because of the way the money flows. So I looked at this as an opportunity to create a boutique shop and to try to execute a vision of what I thought a financial advisor should be or strive to be and really try to make a difference in the world. But start with Hawaii. So what's amazing is that your passion is for helping people as opposed to building your own wealth, right? I mean, as a business owner, we all want to lead successful businesses and drive revs and those things. But your real passion is education and passing, paying that forward, if you will, to the general population. And I think what's really unique about you is you want to do that in a transparent way, good, bad, and ugly. Tell me about your passion and education. It's an obsession. I didn't want to say that. Yeah, I like that. You know, I like being around obsessed people like yourself even, you know, when it comes to HR. Like, to me, it's just contagious and I feed off of that. But it's weird, man. It's like this thing inside of me that I just cannot deny, you know? And it's like, if I come across something difficult like Opportunity Zones, and there's like this whole 150-page report, it's kind of hard when you come home, you know, after dinner and the kid is asleep and, you know, you kind of want to watch the Sports Center. But then, you know, what goes through my head is the people are counting on me, you know, that I feel protective over Hawaii. You know, when people come down, let's just say, from the mainland and do some education, you know, my expectations on them are very high. And I want them to bring it. I want them to bring value, you know? So I think what I've discovered is that there's two forms of education. You know, there's the kind that sort of define things and like, what is a mutual fund? How does it work? And then there's this other kind that sort of doesn't involve a product commission seller fee, but it involves knowledge that starts with a thought, then, you know, you say, wow, okay, I'm thinking different. And now I'm maybe going to take a different action. And then action could be a simple, you know, email my CP and ask them about, you know, why I should do a rollover to Hawaii. And why is that better for me? And then the action would be different because I understand that in order for me, it's nice to want to teach and do all this stuff. But unless people can change habit, then we're really doing anything. So part of the drive is not only to get knowledge, but to be creative, to be engaging, and to try to be a little bit entertaining, so that, you know, you can sort of manipulate it and knowledge so that people can understand it and just get the wheels turning a little bit. Maybe ask a question. I think of that. That's really fun. Like, I just really enjoy helping people and hearing their reactions. Man, I wish I met you earlier, or I didn't know that. That's a good one. I just love that. So who's your clientele? Are they individual people? Are they people like myself? Or are they businesses? Are they...? Who are they? Yes. All of the above. All of the above. People of any age, as long as they have a social security number. If they have income, that's helpful, but really, really anyone, you know, it's just money movement. So yeah, businesses, people probably have more fun with businesses. I think there's a misconception about financial advisors in that, oh well, if I don't have any money, I can talk to a financial advisor. What about that? Yeah, that's a very interesting point because now, let's just say for the most part, that's right, where some most financial advisors, if you don't have investable dollars going back to the assets under management, then they really can't help because nobody gets paid. However, there are other financial advisors, independent financial advisors that can charge differently, maybe more like an attorney, a retainer, something like that. So I think the point here is that we need to really ask ourselves, who are we paying, what value I need, if I know that, and am I right, am I with the right person, who should I interview, where can I look for answers? Now there is a million dollar question. Yeah. If I find the right person, we do need to go to a sharp break, but when we come back, our viewers are entrepreneurs, business owners, successful business owners, people who want to roll into starting up businesses, want to ask you what kind of financial advice the advisors in general would give and what advice they don't give, more importantly. Awesome. All right. We're going to take that break. This is Business in Hawaii. We'll see you back here shortly. Aloha. My name is Wendy Lowe, and I want you to join me as we take our health back. On my show, all we do is talk about things in everyday life, in Hawaii or abroad. I have guests on board that will just talk about different aspects of health in every way, whether it's medical health, nutritional health, diabetic health. You name it, we'll talk about it. And financial health. We'll even have some of the Miss Hawaii's on board, and all the different topics that I feel will make your health and your lifestyle a lot better. So come join me. I welcome you to take your health back. Mahalo. Hello. I'm Mufi Hanuman. I want to tell you about a great show that appears on Think Tech Hawaii. It's all about tourism. In fact, we call it Tourism 101, where we talk about the issues and challenges that faces our number one industry throughout the state. We'll have some interesting guests, very informative dialogue, and allow you an opportunity to maybe learn a little bit more about why this industry is so important for our state. It's been great for us in the past. We need it today, and especially going forward. That's Tourism 101 on Think Tech Hawaii. Mahalo. Welcome back. This is Business in Hawaii. With us today is Isakaja Hero, who is a thought leader in the financial planning space. More than a thought leader. I love that you bring transparency to an issue that might be pretty gray to a lot of folks. And what I want to pin you down on is, recently we've heard of wealth managers, wealth management. Is that the same, or is it different than financial advisors, financial planning? Great question. I think the answer is it could be both. A financial advisor could be a wealth manager, and there are different wealth management services. So what comes to my mind are investments. When I think of wealth management, it's about investments, and typically in the financial advisor arena, you're talking about securities, some of security. And I think the term became more popular as the investment that the advisory type investment service became more popular, where you'd invest in a large platform, whether it's stocks, bonds, mutual funds, ETFs, and it sort of rebalances it for you, and it's very inexpensive. And so the wealth managers that represent that service are partnering in a lot of times with financial advisors like myself to then deliver to the public. So what's interesting on the difference, and the way that I would say it's different, is that wealth management, investment-based value to grow money, protect money, more tax efficiency. Financial planning, advising, as I would define it, would be the coordination of much more than that, as that would be a piece of an IRA or a trust account. But there are real estate assets, other business assets, passive income, LLC, business entity type structure and design strategies that I think are just so different. When do I use an S Corp or a C Corp? How should I write my operating agreement? And should it be member management, manager management, like all these things that are part of finance that I'm not 100% confident that advisors like myself are really doing. So it's okay, but I think that to be inspired as a financial advisor to think a little bit differently and to perhaps partner with some of the local professionals to add something greater would be a way to tie in more value, more services than wealth management, because then it becomes this sort of competition of who can get the cheapest fee sometime. And the market's been strong for 10 years, so people are doing really well, but you see our margins are shrinking, shrinking, shrinking. So how do you add value? How are we going to add value in the face of a recession? When we, if we lose 20, 30, whatever percentage, will our clients still value us? Will we be able to sleep well at night? What's our added value? What are we reading? It's a great question. What are you reading? What are you excited about? Wow. Okay. I'm not going to ask you what you're reading because I know that this will be, that will be long, but I'm going, I'm going to cross the gray area a little bit. I know that you can't give financial advice, but I really want to get your thoughts on some of the things that entrepreneurs should think about in terms of financial advice or what they should look for from their financial advisor, because as entrepreneurs, we have so many options. Yeah. And I, I want to get your take on that. Yeah. So entrepreneurs, it's a very broad term, right? You could be, the business could be really big, it could be really small. So for this sake of discussion, I will talk about entrepreneurs like myself where, where, you know, one person, no employees, sort of taking this leap of faith and, you know, maybe some, some questions to ask. Because I kind of give advice, maybe we'll, we'll ask the questions. And let's say that I'm going to leave my employer. This is my employer. I'm going to leave for whatever reason. I just feel it's a calling to me, right? And I got this, this, this, this 401k plan and I got, you know, the company is so generous, they match me, my pre-tax, you know, and now, you know, I got to do what people typically have to do, which is a rollover. Let's think about this business people. Okay. Let's think about saving money on taxes. First, then we're going to lead into some other stuff. But in the state of Hawaii, pensions are not income state taxable. But for income tax, federal, state, state of Hawaii does not tax Social Security pensions or any free money a company gives you. So let's say I've been matched 3% or, you know, whatever. So in my 401k or like two buckets, the employer money and my contribution are the employee money. When I leave and do a rollover, what typically happens is that we commingo these assets into one IRA is why open two. I have to pay two fees. I will open one. In fact, I'll put it in with the other stuff. And that's where a lot of mistakes happen because now we're, now the CPAs, when you take the money out in the future, don't know what is what. So I call it the dual IRA rollover strategy. And the question would be, hey, Mr. CPA or tax preparer, should I open two IRAs when I leave my company to start a business so I can put my contributions in one and the employer money in the other without save me state income tax when I take the money out in the future. And that would be tip one, state income tax in Hawaii can be as high as 11% on the highest bracket. And in my opinion, taxes save his money made, which is controllable through knowledge, thinking different with a different course of action. And that would be one. Okay, well, I know for a fact that there are a number of options that that could be an option for entrepreneurs leaving or not being a W2 employee anymore, right? And going into a 1099 world, no employees like we were talking about, what are our options to because it's still important for us to plan. So what are those other options? Because as as a single entity, I in my layman's knowledge, I can't open up a 401k, right? Well, I think that's what most people think. You don't even think about it because it's it's really unknown. And then as soon as you start to maybe research it or go down that road, you'll see the cost of administering one, which then it could be sort of disengaging. And and so I think, you know, moving forward. So this is separate from a rollover. This is like, okay, I started my business. I still want to save for retirement. And so now I what should I do? Should I do the 401k or potentially a set by area or nothing? But let's say we're looking for a tax shelter, a tax strategy. And it's going to be one of the two things. And I think for the most part, business owners are choosing to do the set by area for several reasons. It's very simple. It's very inexpensive. And it's as easy as making a phone call and setting it up. The 401k is a tremendous opportunity for 1099 business owners, especially with no employees. And it's that's not what we know as as entrepreneurs, as 1099s. Single single single person LLC. Yeah, yeah, that's not what we think. Right, right. And for good reason. The knowledge is not really going around town. And we do not need to feel bad, Hawaii, because it's really not going around the whole country. So and I found that out because I had this question that came up in my head. It was, you know, for 401ks, there's three ways to put money in. There's pre-tax, there's Roth, and there's this thing called after-tax. And one of my teammates, Gavin Nohara, who is an absolute rock star. We sat at Leakey Leakey Drive-In and we were like, why is this there? So anyway, long story short, it got me to to the 401k with no employees. Getting back to that versus the set. And what makes us the solo K so unique solo K is just a nickname. It's really just a 401k plan is that when there are no employees, the plan is not subject to Department of Labor rules, not subject to that, which then means, and for a lot of the viewers who do self-directed IRAs, which is very different than a regular IRA. When there are no DOL requirements or no employees, 401k with no employees becomes self-directed, which means for the delays out there that I can invest in alternative assets like real estate, private businesses, tax liens within solo K. So that presents a unique opportunity because some of us don't like the stock market. We're better business people. We want to invest in private equity or different things as possible in that space. The other thing from a tax planning perspective is if you are in the boat of, Hey, Roth is the greatest thing since sliced bread. I really want to take advantage of this Roth program, which is tax-free earnings over time. It's better to compound tax-free than taxable, obviously. One of the problems is, well, if I make only, if I make too much money, if I make more than 180,000 filing jointly, 190 something is around there that I cannot contribute, which is true for Roth IRA rules. There's backdoor ways, another shelf, but it's not true for 401k. So you can make as much as you want. And on top of that, you can do what's called the mega backdoor Roth IRA, Google that mega backdoor Roth. It allows you to put in up to $56,000 as a contribution into your 401k plan. $56,000 every single year, even if you're making a billion dollars a year, there are no income requirements. Imagine that for 10 years, right? I'm fortunate enough to save $56,000, which is a huge amount, right? I mean, it's not for everyone, but there's somebody watching that can do that. Maybe I can do that for 10 years or so. Now they got half a million bucks, hopefully more than this. And now they can get creative and invest in property. Imagine a rental and a Roth tax-free. I think it's a beautiful thing. I think anytime you can change the math, where now instead of having it taxed at whatever bracket as far as passive income, that it stays within the Roth world and it compounds in there, it's distributing tax-free. The numbers change in time. You just made something boring, really sexy. That is entertaining. You know, I knew this was going to happen and we are out of time. But I know that you got some new stuff going on. And I want you to tell us about... Yes, I started a company called Think Now Financial Education. And it sort of came about from doing educating folks for 401ks, which I helped advise on. And just taking a different twist, people started going, Aisa, can you come out and just do the education? Can we just pay you for that? We don't want you to manage our 401k. And that's sort of how it started. And I googled it, financial education in Hawaii. Didn't see anything. And I thought, man, why not do something? And this way I can reach more people. Myself, with a team, we can handle so much. But if we have a platform with many people, like this platform, and then maybe we can help one person. So tell us how we can find you then. Yeah, you can find me. I have a really weird name. It's Aisa Kajihiro, A-S-A. Kajihiro, you can Google me and find me. You can reach me, my website, Aisa, at investorgrouphi.com. Or you can call me at 808-425-5035. We've got to have you back, because I got a number of questions for you, including what questions should we ask of financial advisor owner interviewing them? I mean... That would be a great next show, yes. It will be, so I'm counting on you. Thank you. We are out of time. Thank you to Aisa for joining us. A huge thank you to the amazing production staff here in the studio. If you would like to be a guest on our show, please like us and subscribe and leave a comment below. Business in Hawaii airs every Thursday at 2 p.m. Look forward to seeing you here next week.