Rebalance 360: A Financial Investment Option

Mitch Tuchman grew up in the drycleaning industry. His father, the legendary Sid Tuchman, founder of Tuchman Cleaners in Indianapolis encouraged Mitch to develop his abilities in the area of business and finance. Mitch owned Clean Look Dry Cleaners in Mill Valley, California. He ultimately sold that business in order to pursue other interests. His award-winning company Rebalance 360 is highly regarded. This interview offers insights as a way to secure financial security for your future.

Q: Your firm Rebalance 360 just won a national award. Why the honor?

Every year, Charles Schwab & Co., Inc., and a panel of independent judges — all leaders in financial services — recognize firms that have made the greatest impact on the financial industry. Rebalance 360 won the 2018 Pacesetter IMPACT Award – for visionary leadership, operational excellence and innovative use of technology. My partner, Scott Puritz and I started our careers as entrepreneurs before moving into wealth management. As outsiders we felt committed to doing business differently. Our firm advocates for the average investor and uses a combination of robo-investing and personal advice to deliver high-quality service at a lower cost. By the time Rebalance 360 launched in 2013, the firm had a national reputation as a consumer advocate, with management often speaking out about the importance of the fiduciary standard. Scott testified before the U.S. Senate, the Office of Management and Budget and the Department of Labor about the need to protect consumers and make retirement investing safer for all Americans. We use lectures, articles, blog posts, radio and video-tutorials to educate potential clients about the basics of investing. For these reasons and because of our success to date in building an increasingly national profile, we were recognized with this national award.

Q: How did this all get started? You went to Harvard Business School but did not go into money management until recently.

I had two events in my life in the 1990’s that shaped the way I invest. First, our son Jack was born 1996 and a year later, we learned that he was severely disabled. We discovered that for his entire life he would need care. That is very expensive, and I thought, “OMG, I am going to have to fund that, not only throughout my life, but 50 years after I am six feet under.” The second event was I had been an entrepreneur for many years and we sold a company shortly thereafter, so here I was dealt a disabled child — a huge financial obligation, among other obligations and commitments — and financial potential for lifetime financial security — if I don’t screw this up. I took this task very seriously. This was during the dot-com boom, in which where more people were doing a lot of wild, stupid things with money. And I wanted to be absolutely sure that I did not do that. So I began seeking the best investment advice that I could, and it was investment advice that was not just for my own retirement but for my son’s life, which could continue 50 years after my retirement.

Q: Where did that quest lead you?

It took me to looking at foundations and endowments that think about investing for perpetuity. This informed all my thinking in terms of how I invest for our clients. It is a very different way from the way the world tends to think about retirement investing. It made me think in perpetuity as opposed to an end point. I had to think about how assets need to continue growing as opposed to diminishing over time. I thought about how not to lose, how not to make a mistake. If I just play not to lose, what happens? I learned very quickly that if you play not to lose in investing, you can actually do better than 90% of the people because most people’s returns suffer from the mistakes caused by greed, overextending themselves and overconfidence. It is a paradox, as most people are out there trying to beat the market. If you settle for market returns and ride with the market trend you will do better than 90% of investors.

Q: Can this really be applied to ordinary people, not foundations but just mom-and-pop savers trying to retire?

Absolutely! Retirement investing is a difficult topic for many, and not just because of complexity. Our emotions tend to get the better of us. Like starting up a mountain, the work of creating a retirement nest-egg seems impossible. We tend to shut down and think about other things instead; kids, debts, home improvements — anything but planning to succeed at retirement. The other reaction, also common but equally useless, is to pick a number, “I will retire when I have $1 million in savings,” or some other big-number goal. Most people then stop thinking about retirement and just hope their savings grows into that number. They feel like setting the goal is enough, or at least enough to unburden their mind of the overwhelming prospect of retirement. It all feels so out of our hands that many of us abandon the process. It is a “fight or flight” survival reaction. “I will never make one million dollars, so why worry about any number at all?” It is important to set goals and to say them out loud. It is also important to decide how to achieve these goals and what actions to take to get there. A risk-adjusted portfolio goes a long way toward smoothing out a retirement investing experience. You can retire on less than a million — perhaps far less — if you judiciously manage all the pieces of a total retirement plan. Keeping investment costs low and getting solid, unconflicted advice is the first step toward truly addressing your own retirement and feeling good about it too.

Q: What do people miss when they think about seeking the help of a financial advisor?

Ask 100 people what they want from a financial advisor and nearly all would say, “Um, advice?” Too bad: that is not what most financial advisors do. In fact, most are not even qualified to give advice.

Sure, they take exams to be licensed as advisors, but those exams are not designed to test knowledge of real-life problems. These tests are designed to ensure that financial advisors understand the limits of securities law and prevent fraud.

The fact is that most people actually do need advice. They do not need someone to pick a mutual fund for them or to recommend stocks once in a while. Increasingly, there is not much to know about mutual funds. Data going back decades shows that picking among funds is a fool’s errand at best. That is because this year’s winning funds often turn into next year’s dogs. The vast majority of mutual funds today struggle to keep up with the indexes they are supposed to beat due to fees. Once you subtract the cost of employing mutual-fund managers, lawyers and marketing people, there is not much left from the investor. Most people go with whatever fund is recommended and forget about it. They look at a statement 10 years later and wonder why their portfolio has not grown. The answer plain and simple is the fees. A true financial advisor recognizes the problem of fees and, in the view of Rebalance 360, sticks to low-fee index funds that simply track the total market.

Q: Sounds pretty easy, just buy index funds. What does Rebalance 360 do differently?

Hundreds of millions of dollars have moved from actively managed mutual funds to index funds over the past few years. You still might want or need some advice. For example, how should you think about risk, ways to deal with taxes, kids and eventually retirement and social security. Try asking your stockbroker about social security. You will probably get no answer, just waffling, as they are not trained to answer these questions. What you need in a financial advisor is actual advising. Our advisors at Rebalance 360 are exactly that: direct, honest and thoughtful. As we are fiduciaries, your interests always come first. If you have a question about your money future, we can help you find the answer

About Ellen Tuchman Rothmann

Ellen Rothmann has 30 years of experience in sales and marketing and utilizes these skills to support and facilitate seminars for Tuchman Advisory Group (TAG). Prior to her role with TAG, she was VP of Operations for Richard Wolffer’s Auctions that specialized in sports and entertainment memorabilia. As an Account Manager for K101 – a San Francisco Bay Area radio station – she worked with small businesses to build unique and profitable advertising and promotional campaigns for her clients. Growing up in the dry cleaning business, Ellen worked in numerous capacities at Tuchman Cleaners. She also held sales positions at Apparelmaster and Tuchman Cleaner’s Home Carpet and Drapery businesses. Rothmann earned her B.A. in Marketing from Indiana University. She lives in San Francisco with her husband John, they have two sons For more information contact Ellen Tuchman Rothmann, President, Tuchman Advisory Group. e-mail: ellenrothmann@yahoo.com