Transcript
Intro
Stephan Shipe: Welcome back to the Scholar Wealth Podcast. This week we begin by discussing whether a Delaware statutory trust can be a practical way for real estate investors to step away from rental properties when deferring taxes through a 1031 exchange and the trade-offs that come with moving from direct ownership to passive structures. Next, we look at how entrepreneurs whose wealth is concentrated in their business can begin correcting the imbalance between illiquid assets and retirement savings during the years leading up to a potential exit. Finally, in our From the Field segment this week, we’re joined by Blake Sutton, owner and president of Est Est Interior Design, for a conversation about what distinguishes truly exceptional luxury residences, how families approach second and third homes differently, and where thoughtful design decisions have the greatest long-term impact. So let’s go ahead and get started with question one.
Question 1 – Is a Delaware Statutory Trust a Viable Path for Getting Out of Rental Properties?
Stephan Shipe: We have four properties, our primary home, a vacation home in Colorado, and two long-term rentals. We’re 61 and starting to simplify. We’d like to get out of the rentals without writing a massive check to the IRS. Is a Delaware statutory trust a viable path?
The classic issue of depreciation coming back. And the benefit of real estate is always touted as this whole write off the depreciation, you can offset gains, you can do all these things. But as you’re seeing in these cases, as we’ve seen before, that depreciation gets recaptured. So if you’re trying to sell these properties, for those who are unaware on the real estate side, you have to pay tax on all of that gain. And it’s not just the gain from where you bought it, right? There’s depreciation. Let’s say this, you had bought the property for a million dollars. Now it’s worth 2 million. You’re not only paying tax on that million dollar gain. If it’s already been all depreciated, you pay tax on $2 million. So a very serious concern.
A 1031 exchange is how that typically happens, or how we typically defer those gains even further. In other words, you go take the property, sell it for 2 million. And then go buy another property worth 2 million. And you can defer your gain into that. And the IRS allows that exchange to be relatively clean. And we’ve had some discussion on the podcast about that before of how these 1031 exchanges work, but it allows you to just continue to kind of kick the can down the road on that gain a little bit, allow this new property to continue to expand. The problem is you still have to manage that property. So in your case, when you’re talking about doing this and getting out of these rental properties and trying to kind of maybe shift into retirement, sounds like, without having to worry about the headache of the rentals. A Delaware statutory trust could be useful there. And the reason for that is a Delaware statutory trust, sounds fancy, it’s really just a 1031 exchange, but into another type of vehicle. Think of it like a real estate fund that’s a lot more passive, and you could sell the $2 million property and go take that 2 million, invest it in this passive ownership fund that owns apartment buildings or something like that. And that allows you to defer that gain.
The problem you have with that, or well, before we get into the problem, let’s think advantages. The advantage of this, as you’re nearing retirement, you’re not having to worry about the properties anymore. You’re not managing the rentals. Somebody else is managing the real estate. So you’ve effectively pushed that gain away from you and the responsibility. And so that works out as a nice thing. You’ve passed on the tax bill and you’ve passed on having to actively manage the properties.
The downside of the DST, which is where I think you have to weigh in, and it’s really easy to look at the tax bill and say that makes no sense, I don’t want to pay that amount of money, but you still want to get out. I’d first look at whether or not that tax bill is going to significantly derail your future plans. If it’s not going to derail the future plans, then maybe it’s worth paying the tax on that sale, depending on what the value is in your future plans in general. And being able just to move out of this and invest in stuff that’s more passive. And the reason I say that is sometimes it’s easy to look at the tax side, see that tax bill and say, I’ll do anything not to pay this tax. And sometimes the I’ll do anything turns into investing in things that are not ideal for your situation. So we need to see whether or not it still makes sense for you to own a significant amount of real estate.
If it does make sense for you to own the real estate, is it a DST that you should be going into? Can you take the two rental properties and consolidate them through a 1031 exchange into one property that’s less for you to manage? That’s a really common way to go. So you take two, maybe they’re two residential properties that are constantly having renters move around, you’re always doing all this stuff. Could you take both of those and convert them into some sort of triple net lease or a property that’s more commercial that you don’t have to worry about as much overhead from a time commitment to it. Could you, if you have kids, could you pass this on to them to manage and to open that opportunity up? So there’s ways you can still own the real estate and still be active from an IRS perspective but not actually have an important role managing it, right? The time commitment could be dropped significantly. So that’s always one option.
The other option is the DST. The problem with the DST is you’re losing a lot of control. So if they decide to sell those properties and pass those gains on to you, you no longer get that choice of saying, all right, well, this property I could hold on to. I could gift it to kids. I could open up a family LLP, right? So there’s options that you’re giving up. You’re giving up the optionality, you’re giving up that control and you’re increasing your fees, which may be worth it for the lack of headache that you’re having to deal with on the current real estate. So you’re going to pay some sort of management fee, generally around 1% or so. And that would be the fund management fee. You’re still going to be paying management fees on the profitability of the actual property ownership that’s going on. So that never goes away. You still have a property manager there. You’re just paying an additional sponsor fee to handle doing this for you. And there’s sales fees upfront that generally are your onboarding fees, you’re probably looking at that 10% range to get in to any of these. So you have an upfront fee.
And then you have an ongoing fee and you have a significant loss of control for all of this. But the advantage, you’re not worried about anything anymore from this and you get the tax deferral. Be careful about which ones you get into, just like any type of property ownership. As you know, from owning different properties, you had to do a lot of due diligence to buy the two properties that you had. You still need to do that same level of due diligence when it comes to the DST or the Delaware Statutory Trust to know whether or not the investments you’re getting into are still going to produce a return that makes sense. Because if they’re not, maybe it’s worth just paying the taxes, avoiding all those fees and investing into some public market equities or something that’s a little bit more liquid.
Question 2 – Building Retirement Assets Outside a Business Before a Sale
Stephan Shipe: I’m 45 with a net worth of $12 million, mostly illiquid real estate in a business I still run. I have very little in traditional retirement accounts because I always reinvested back into my business. If I want to fix that in the next 10-ish years before I sell, what are my options?
Classic entrepreneur problem. You have started the business, you’re investing in it, you’re growing it. So all the cash is going where? It’s going to the investment you feel has the highest ROI. And you’re investing in yourself, investing in the business, so that money keeps getting funneled right back into the business and continues to grow. Then you hit the problem that you’re at is retirement’s around the corner, you’re thinking about selling and you realize you have no investments other than the business. So you’ve created this business, but it’s this massive illiquid business that’s out there. So it’s not a unique problem, which is good because that means that we have some solutions for how this potentially could work out. But it is a problem, and you recognizing it at 45 is important because a lot of people don’t realize this until 55 or 65 and sometimes have unrealistic expectations of what their business is worth.
And that becomes a problem because then what ends up happening is they go to sell. And I see this happen all the time where I say, well, do you have an idea of what the business is worth? And the response back to me is, the business is worth however much you tell me I need to retire. Right. And that is a really big problem. In other words, what’s happened is the entire retirement plan, their entire retirement goal has to be, let’s say $10 million. But if the business isn’t worth $10 million, what are you going to do? There’s really not a lot of exit options out there. Maybe it’s only worth six and you pay the tax on it. Now you’re looking at three or four and you have this big gap until retirement. So being able to start looking at this concentration issue that you have and starting to think about balancing that is really important.
So one of the ways you can do this, and we really have two ways. One is that we can start diverting cash from reinvesting back into the business into some tax advantaged accounts. So while the income is still doing well. So you could use a defined benefit pension plan, which may work out really well depending on age of employees and your age and everything, really high limits on that, like a cash balance plan, put hundreds of thousands of dollars in there. So those would be, if you wanted larger pre-tax contributions, if income is really high, you’re in a high bracket and we’re looking to funnel this out. But I’d say first step would be, depending on what you have that’s not liquid right now, is building up that taxable investment account. I know that’s not the most ideal tax situation. The best tax situation is going to be some tax deferred account. But the taxable investment account is still going to give you the flexibility. So that way, if you need that cash for the business, if you see some economic downturn, if something happens in your industry or your local environment, and it pulls down the business, you still have access to capital that’s not going to give you a penalty like you would getting into a cash balance plan or a 401k. So we want to build up that taxable investment account first in a pretty sizable way. I’d make sure you have six months to a year worth of cash in there, not as much for you, but for the business. Seems like a lot, depending on how much you have in the business. From what it sounds like, you and the business are one, right? You’re just all linked together anyways in this situation. So we’re having to handle liquidity planning there. So that would help you build assets outside the business, whether it’s tax deferred or taxable.
And then we have the real question. You say that you’re looking to sell in the next 10-ish years. This creates the classic dilemma in the dichotomy of growth in a business. If over the next 10 years, you just continue to invest heavily in the business, right? Everything’s being reinvested back. It’s growing, it’s growing. You’re constantly taking profits and reinvesting them. The risk you run into is that the business isn’t profitable. I want you to think of some of the largest companies that have grown. You look at Amazon backwards, sorry, it ran a loss for a long time because burning cash, they’re trying to reinvest back in the company. They’re growing, growing, growing. That’s okay early on to get you to where you’ve been. But if you’re looking to exit in the next 10 years, we’ve got to change that story. The story needs to be this is a profitable business that has a steady growth rate that doesn’t burn cash on the side.
That’s where the shift is. And this is the balance that you’re going to have to do. I don’t know if it happens right now at 10 years out, but with your question of 10-ish years, if that means five to seven years, then I’d say that changes the dynamic because what we need to start doing is focusing on the business being stable and throwing off a high amount of profitability. So that way, when you go to sell it, somebody’s going to pay higher and give you a higher multiple for your business if it’s really profitable and it’s throwing off good cash flow and has decent growth. You’re going to be looking at a different type of buyer who’s interested in buying a business that has a lot of risk because you’re growing so fast and it’s going to require a lot of cash inflow to keep it going. So I would start there first and look at what type of multiple, what type of business am I wanting to sell? And then look back. Personally, I think if you’re looking at 10 years out and you have this issue anyways of really needing to pull money out of the business, then I would focus on high profitability, solid growth instead of big growth that eats up a bunch of cash. And the reason for that is it’s going to look good on paper. So you have a good track record of three to five years of really good profitability, but also it’s going to throw off a lot of cash for you in profitability that you could use to start building out these other types of investments that are not your business. So I think that’s really the win-win situation there is let’s turn this business from a cash eating machine to a cash generation machine. So that way you start diversifying away from the business and the business looks good, both in reality and on paper to a potential buyer to get you that high multiple, which is going to lead to even more success for you later on down the road when it comes to retirement savings and goals.
From the Field – Designing Legacy Homes and What Makes Custom Residential Projects Succeed
Stephan Shipe: In our From the Field segment, we explore what distinguishes exceptional residences and how thoughtful design decisions shape the way families live across multiple properties. We’re joined by Blake Sutton, owner and president of Estest Interior Design, a firm that works with families on luxury residential projects ranging from primary estates to multi-property portfolios.
Blake, welcome to the Scholar Wealth Podcast. Tell us a little bit about your background, what kind of work you do.
Blake Sutton: Well, I appreciate having me on today. Our firm focuses primarily on residential, as you mentioned. We work with homeowners to design properties for them in all different phases of life. My background, I actually started off in construction, got an engineering degree in construction management and got to work on the build side for a number of years. So I have an intimate understanding of all sides of what it takes to build a custom home from the construction side, as well as the design side now. I joined Estest in 2010, working alongside my father who ran the business for nearly 40 years and took over the business three years ago when he passed away. I work with homeowners from all different walks of life from all over, primarily doing homes here in Arizona, custom tailoring every property to meet their needs and their lifestyle.
Stephan Shipe: So when somebody hears custom home building, there’s different emotions that tend to come along with that. And a lot of times, it’s a lot of fear that goes along with it. When you look at property, clearly from the work that you’ve done, beautiful properties and a really great job with them, when you look at different projects and you’re looking back on them, for the projects that went really well, what are the common themes?
Blake Sutton: I guess the first thing is to really talk about some of the fears that people have when they go into this process. The reality is when you build a custom home, there are thousands of decisions to be made. And because you’re not defined by a box that’s put in front of you, like you would in a production home, you have to provide a lot more input to the people working with you in order to come out with an outcome that’s going to meet your needs. The biggest fear typically though leads to budget. When you walk into a production builder, they can tell you right when you get started a pretty good idea of what your house is going to cost. A custom home, you know, the world is your oyster. You can do as little or as much. There’s a wide range of where you can land. So a lot of times the biggest fear is the unknown of what is it going to cost me to build this house. And to answer your question on what do I see as a common denominator for clients for success? The answer really is planning on the front end and assembling a great team before you ever get started.
So in order to properly design a home, you need to have an architect, going to give you kind of the guidelines of what works in your municipality. There’s a whole bunch of different rules. It really changes from city to city, community to community, even within those cities. And the architects are really the experts when it comes to that. They’ll be able to tell you what you can actually build on the piece of land that you own. The second is a builder. It’s really important to have someone alongside you in pre-construction to advise you on just some of the guidelines of what you’re going to be experiencing. Conditions vary drastically. There’s a really big difference between a hard dig versus simple soil. And a builder’s going to help alleviate a lot of concerns that can rise there. And then what we do is we focus on the interiors. Understanding how everything is going to come together is really going to bring the design and the budget into focus. So having the right team in place is going to alleviate a lot of those fears on the front end and is going to allow you to plan properly with all the disciplines that’ll be involved in the process to make sure that everybody’s on the same page from start to finish. And it’s really a cohesive experience for the client.
Stephan Shipe: You see someone go through this process and they go through it the first time, I’m sure there’s a bit of overwhelm that goes through. What changes for the second and third custom home that’s being built? Do you see certain design choices change or is it just that the pressure’s off a little bit because they understand what to expect?
Blake Sutton: The first time through is definitely a learning experience. When you talk to a homeowner and they have to pick out things like grout colors and what kind of edging they want on their walls when you turn corners, there’s so many little decisions to be made that there can be analysis paralysis. There’s too many things for them to have to focus on at once and it can be overwhelming. A good team is going to help guide them through that process, break it down into bite-sized chunks in a way that makes sense so they can feel great. An experienced buyer who’s been through this multiple times, who’s assembled a great team, there’s a lot of joy in the process, but they also have a better understanding of what’s important to them. Every person that we work with, there’s different things that they focus on. And it’s funny cause we never know what it’s going to be when we meet a client for the first time. Some people are very tuned into technology. We work with audiophiles where sound is like the most important thing to them. Some people, there’s certain rooms that are where they’re going to spend the majority of the time. It could be an office, it could be a living space. Sometimes it’s the bar setup. It really depends from client to client. And the ones that are experienced, they know what’s really important to them and they focus a lot on those spaces and then they trust their team to help fill in the gaps. They don’t stress out about the details. They provide an overarching design style that they’re looking for, whether it’s through inspiration photos or some sample projects. And then they trust their team to help put together a plan that’s going to make sense for them.
The Details That Get Overlooked
Stephan Shipe: I could see people coming in and having like certain aspects of what you’re saying, if I want to make sure the kitchen’s like this or the garage has to look this way. Are there certain areas that get overlooked though, that you look at and say, it’s never on anyone’s list, but this is the area that you need to be focusing on.
Blake Sutton: From a planning perspective, one of the things that’s often overlooked when it comes to technology is where you’re actually going to house the equipment. So when we work with a homeowner on the front end and they want to have a home theater and entertainment system, they’re going to control lighting throughout the house, they’re going to have security cameras, et cetera, et cetera. All of that stuff requires equipment that needs to be housed somewhere. And that equipment puts off a ton of heat. So when we’re in early design phase, you want to make sure that we plan not just a closet that goes into, but something that’s properly ventilated and is pumping cold air in there to keep everything running for years and years to come. We also try and future proof that, so that as technology changes over time, they can adapt. Those kinds of things are huge. As far as individual rooms that are often overlooked, one of the spaces is the garage.
Stephan Shipe: What do you mean by that?
Blake Sutton: A lot of times garages are treated like closets were 20 years ago. You’ve got fluorescent lights and melamine cabinets and it’s not an attractive space. Well, today we do closets that are showpieces. There’s projects in town right now where they’re spending a million dollars on a closet package. Garages are starting to become the same way. So garages are showpieces, especially for car collectors. The ability to house your cars is one thing, but to make it an entertainment space where you can have friends over and really enjoy a conditioned space is becoming more and more common. So that’s something that’s also frequently overlooked.
Stephan Shipe: Well, you got me on the million dollar closet. There’s some design aspects on that closet. What is going into the closet that sets it apart from the fluorescent lit, three or four pieces of drywall and a door closet that’s out there?
Blake Sutton: The quality of the cabinetry. You know, the same guys that are making the custom cabinets in the kitchen, we have making the closet spaces. So you have a much better level of finishes. A lot of times in closets like that, you’ve got islands, you’ve got display storage with backlit glass cabinets. You know, sometimes they’re multi-story with spiral staircases going up to the second level, you know, shoe displays. These closets, when you’re talking hundreds of thousands of dollars up to a million range, they’re larger than some houses. They’re designed for collectors that keep pristine pieces that want to be displayed, not just hidden. And lighting, I think, is the other one. You have chandeliers, sconces, beautiful pieces to make it a great space.
Designing for Multiple Generations
Stephan Shipe: So when you start to put in that much custom work, obviously, and with the work that you do, you’re working with the client and trying to figure out what exactly fits with them and also trying to future proof all this. How do you balance that for someone who wants to build kind of a legacy home? This is going to be a home that we’re going to build and multiple generations are going to keep this home. Is there a different type of future proofing on the design side besides, I know we talked about obviously like wiring and everything is important for technology future proofing. But what other types of future proofing have to go into that?
Blake Sutton: So one of the first things that we chat with clients about is their goals for the home. People buy homes for all different reasons. We make very different decisions for a client who’s building an investment property or a vacation home versus someone who’s doing a legacy property that they could hold in their family for generations. So that’s a very important question to ask before you ever get that far. As far as how do we future proof a home? One of the first questions I typically get asked by people is what are current design trends? And when we’re future proofing a home, we take those design trends and we throw them out the window. They don’t matter at all. What we try and do on all of our projects, but especially ones that are going to be held for a long period of time, is put together a timeless design. So we try and recognize the architecture and pick timeless materials that are going to further that vision. And it sounds challenging, but the reality is when we use natural materials and we use historical reference points, it’s really easy to see what things last versus things that don’t. I had the pleasure of going to Europe a year or two ago, traveling through Rome, and you see a casual display of natural materials, marbles and stones. These are buildings that were built thousands of years ago, and they still look incredible today.
The reality is when we use natural materials in an authentic way and use them properly, they’re going to stand the test of time. Our company has been around for almost 70 years now, and I’ve had the pleasure of walking properties that we designed decades ago. And when they’re designed properly, you walk them today and they still look fantastic. Now there’s things that wear over time, fabrics are going to wear, carpets are going to wear, and those are things that we reupholster and replace over time. But the natural materials, they are timeless. They last for generations.
Stephan Shipe: If you have any top of mind, what are some examples of that that you’ve seen when you go back to homes that were designed decades ago and they still look just as good and you would still keep those design choices today for the next 50 years?
Blake Sutton: The easiest material that comes to mind is limestone. Limestone is timeless. It works in all different design styles. It’s a neutral material. So even as color palettes and styles change, it’s a timeless backdrop that works with literally just about anything. And it can be used inside and outside. The other thing I would say is just quality craftsmanship. So when we get into cabinetry, when we’re using custom cabinet doors that are hand carved with intricate details, those are things that show care and thought and they last. You know, right now trending, you see slab panel doors on cabinetry. It’s something that’s trendy right now. But 20 years from now, 30 years from now, it may not stand the test of time where custom carved doors that show character, they’re going to last forever.
Stephan Shipe: How do you recommend someone starts to kind of explore those types of ideas? Is it a trip to Rome? Is it going to some of these architecturally important cities and getting ideas there? How do you go through that process?
Blake Sutton: It’s a combination of those things. I’ve had some clients who come to me and they say, hey, I love this drawer liner, it makes my life way easier, design everything else, I trust you. We have others who are very, very meticulous and they’re well traveled and they love European cabinetry and specific types of light fixtures that you see in Europe that you don’t see in the United States. And they want to integrate the things that they’ve seen in their travels. The answer is not one size fits all, but the reality is if you have a great architect that you work with and a great interiors team, and you have just a general idea of the design direction that you want to go, it can be something as simple as, I love the idea of a Spanish mission style home, and then you let the experts guide you through that process. Sometimes it’s touring other properties. Sometimes it’s traveling to other countries to see the authentic stuff so we can pull specific inspiration points in. It really just depends on the style of the home, but there’s nothing better than people being able to experience those spaces. A lot of what we try and create are experiences for our clients. And so the atmosphere that they feel in certain spaces as they travel, we try and recreate for them. And that’s a big part of what we do.
Sourcing Materials Globally
Stephan Shipe: When you’re looking for different types of materials and pieces, are you able to source most of that in the United States or are you having to do a lot of global shopping to match the same look or feel?
Blake Sutton: We work with vendors from all over the world. So I’ll give you an example. We had a client this last year who had a specific slab that they fell in love with, but they needed like 24 slabs of that material and it just was not available domestically. And so we connected them with a quarry in Brazil where it came from so they could actually fly down there and see the stone as it was coming out to pick the slabs for their home. Different materials come from different regions of the world. You know, sometimes we have to travel to see things. A lot of times we can work with our vendors to bring stuff in. The benefits of working with a professional design firm like us, we have this vast depth of knowledge on what resources are available and we can connect you with the right resources based on design style to fit not just aesthetics, but budget as well.
Stephan Shipe: What do you find is the hardest thing to source?
Blake Sutton: Oh man, that’s a great question. It probably depends on design style. We’re blessed. Our vendors are unbelievable. Natural stone changes a lot. I think that might be the hardest one only because it’s not a manmade product. So from the same quarry, the same type of stone can differ from month to month and year to year in what that looks like. So when a client falls in love with a picture, they saw a certain kind of marble that simply might not exist anymore. So we deal with things like that, where they’ve seen something in person that they want to replicate and it’s a natural material, that can be tough. A lot of times you have to hand cull through product to find the right blend to make it work for the client.
Advice for Getting Started
Stephan Shipe: And as we start wrapping up a lot of these topics, I keep going back to this idea of where we started, when you have this kind of concept that it’s this blend of excitement of building something custom and truly having all of those touch points, but then the nervousness of getting into all of that decision, the paralysis by analysis type of scenario, what advice would you give them as they’re going through this?
Blake Sutton: There’s a couple of things. First and foremost is don’t be afraid to talk budget. You should do it early and often to make sure that people that you’re working with have a clear understanding of those expectations. That’s one of the things people doing it for the first time tend to be shy about. They’re really not sure what they’re comfortable spending. Having those conversations with the experts is going to make your life a lot easier. You know, it doesn’t make a difference to me whether you’re spending a million dollars or $10 million. I want to help you to achieve your goals. And if I know what those parameters are, it’s going to make it a lot easier for me to give you the best experience possible. The second is, don’t be afraid to ask questions. You’re surrounding yourself with experts. We’ve been there and done that. If you’re not sure about something, don’t hesitate to just have a sidebar conversation and say, hey, can you explain this to me in a little more detail.
It can be simple things like how does a demolition process work if we’re taking a home down to build a new one, and what are my options, to what options do I have to open up views in this area? Can we get rid of some of these columns or adjust ceiling heights? Or sometimes it’s little things like, hey, listen, I don’t like to have technology in my bedroom, but I need to make sure that I have a good charging station that’s nearby. Where can we incorporate something like that into my life? It doesn’t have to be big things. It can be the small things that make your life a lot easier. Me personally with my kids, I want to have a place where they can drop off their backpacks when they walk in the door, but I don’t want to have to see it. So how can we make an organizational space that’s easy for the kids to use, but I can hide it so I don’t have to look at backpacks and book bags and those kinds of things. There’s no question that you can ask that’s going to be inappropriate, and we’re here to help guide you through that process. So ask lots and lots of questions. I guess that’s the best advice I could give is don’t hesitate to ask.
Stephan Shipe: Well, that is great advice. Thank you very much for joining us today and sharing some of the inside scoop. Hopefully we can alleviate some fears there around the home building process, and love seeing your work. Looking forward to talking in the future.
Blake Sutton: Yeah, I mean, it’s a process that you should enjoy and look forward to, so don’t be afraid. Just surround yourself with great people and enjoy every minute of it.
Stephan Shipe: Sounds great. Perfect. Thank you, Blake.
Blake Sutton: Have a great one.
Outro
Stephan Shipe: And that’s our show. Thanks for listening and we’ll see you next week!
Disclaimer: The information provided in this podcast is for general informational and educational purposes only, and is not intended to constitute financial, investment, or other professional advice. The opinions expressed are those of the hosts and guests and do not necessarily reflect the views of any affiliated organizations. Investing in financial markets involves risk, including the potential loss of principal. Past performance is not indicative of future results. Before making any investment decisions, you should consult with a qualified financial advisor who can assess your individual financial situation, objectives, and risk tolerance.