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welcome to the best interest podcast
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where we believe Benjamin Franklin's
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advice that an investment in knowledge
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pays the best interest both in finances
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and in your life every episode teaches
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you personal finance and investing in
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simple terms now here's your host Jesse
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Kramer hello and welcome to episode 83
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of the best interest podcast my name is
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Jesse Kramer later in today's episode
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Carl Richards is going to be joining me
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Carl Richard is a certified financial
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planner the creator of a lot of
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interesting content perhaps most famous
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of which is that he wrote a weekly
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column in the New York Times for about
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10 years Carl's awesome Carl has a lot
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of cool stuff to share and perhaps
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what's most interesting is that a lot of
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what Carl shares isn't necessarily about
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money it's about the other side of human
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capital which to Carl has four sides
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it's money time energy and attention and
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I like that theory that idea permeates
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into a lot of what Carl does and I think
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by thinking of our human capital that
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way as more than just money as also as
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our time our energy and attention it
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leads to much better outcomes in our
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lives but as always we're going to start
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this episode with a quick review of the
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week this one comes from Doug Doug wrote
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into Apple podcasts left us a five-star
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review and Doug said the world of
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personal finance can seem super
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complicated and even a bit intimidating
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but the best interest podcast breaks it
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all down in a way that's actually
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enjoyable to listen to Jesse doesn't
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just talk about making money he talks
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about how to use your money to actually
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make your life better that's what keeps
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me coming back I've learned so much from
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this podcast but what I love the most is
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that the advice is clear and it feels
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doable Jesse has a great way of
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explaining things using real life
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examples making even the trickier
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Concepts easy to understand if you're
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ready to get control of your money and
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who isn't give this podcast a try it's
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the perfect mix of fun and super useful
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information thank you so much for those
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kind words and if you hear this Doug
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drop me an email Jesse bestin interest.
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blog and we'll get you hooked up with a
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super soft best interest t-shirt and now
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before Carl joins us today you'll kind
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of hear in the beginning of the
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conversation I start the conversation
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with Carl by quoting one of his daily
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podcasts where he talked a little bit
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about financial stress and about how he
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still feels some Financial stress in his
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life so I wanted to go back and read to
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you listeners an article I wrote on
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January 1st New Year's Day of 2022 so
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over two years ago and the title of the
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article is money still stresses me out
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and that this title was true at the time
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and I think to some extent it's still
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true today you know stress takes on many
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different forms I don't think I'm
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paranoid about money and I I don't lose
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too much sleep over money but yeah that
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that New Year's I decided to post
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instead of a New Year's resolution I
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wanted to post a New Year's confession
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and the confession is despite all that I
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do in the world's personal finance money
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still stresses me out out I write about
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money I think about money I podcast
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about money my household I think we make
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enough money I think for the most part I
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do smart things with my money and yet I
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still get stressed out about money and
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my personal goal at least isn't
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necessarily to eliminate this stress I
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think the stress will always be there in
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some form almost like a shadow a
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personal finance money Shadow following
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me around so I don't want to get rid of
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it necessarily or I don't think it's
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possible but instead I do want to expose
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that stress that shadow to as much light
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as I possibly can I want to give it a
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name and I want to understand it better
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I want to make it less scary you know I
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want to look under the bed and and face
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the monster hopefully in doing so reduce
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the magnitude of that stress but I think
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the place to start this conversation is
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to ask myself and maybe we can all ask
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ourselves where does my money stress
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come from so this goes back a ways and
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I'm I'm kind of reading this article
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back to myself live back to my time when
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I'm spending way too much time on
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Twitter which by the way if you're
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spending a lot of time on Twitter you
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might want to rethink that just my
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personal side here but apparently on
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Twitter I I tweeted something where I
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was talking about my financial stress
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and and someone else wrote in and they
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asked hey is there something specific
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about money that causes you stress and
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what a great question because there
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could of course be any number of causes
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and and most of us are intimately
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familiar with the various causes of
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financial stress whether it's debt I'm
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not saving enough not earning enough in
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the first place confusion you know
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financial literacy confusion housing
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instability or food instability
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something very basic to human
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flourishing that that isn't there
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because of finances a very common one
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that I'm dealing with that I see rather
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quite often is just not knowing where my
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money is going or people often they get
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to the end of the month and they say we
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know we're earning a good paycheck we
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just don't know where it all goes or it
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could be a thousand other things but
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none of the above actually stress me out
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thankfully Instead at the time and still
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somewhat right now I'm stressed out by
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what I perceive as an oncoming and
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challenging to quantify wave of spending
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an oncoming wave of spending so at the
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time I wrote this Cy and I were both 31
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I'm now 34 she's 33 we were very much at
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turning points in our career I was just
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starting my job in wealth management she
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was working full-time but she was in the
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middle of an MBA program which she has
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successfully finished go Kelly we were
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engaged not yet married but now we are
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married and then there was the big
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question of kids which at the time was
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just a a thought way out in the distance
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way out on the horizon but now all of a
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sudden it's directly in front of the
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windshield it's very much in focus in
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fact there's almost a guarantee at the
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time you hear these words that kids will
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be a reality for me and we'll have our
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first child which is super exciting
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don't get me wrong tiny bit scary but
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very exciting at the time my wife and I
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my fiance and I were sharing this small
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house small house which was great for
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two of us and a dog but we needed to
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upgrade especially if we wanted to start
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a family and at the time and and still
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somewhat to this day Western New York
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Rochester specifically is one of if not
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the hottest housing markets in the
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country my wife's car was 15 years old
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my car was 9 years old and those two
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would need to be replaced sooner than
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later and when I looked at that list a
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kid a house cars career change man
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that's a lot of potential money to spend
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over the next few years and some of
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those costs I had thought that the
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near-term costs would be as high as
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$200,000 in in the three years between
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when I wrote that article and now and
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the long-term costs when you think about
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mortgage amortization when you think
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about raising kids
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if one needs a car loan which we're
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trying really hard to avoid I mean the
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long-term costs of all these various
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things easily can repass a million
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dollars over 20 or 30 years life can be
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expensive I mean that's the real reality
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of it the hard reality of it even if
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you're making pretty good money which I
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mean I know where what our household
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earnings are and we're at a very nice
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percentile when it comes to household
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earnings we are making by any sort of
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metric we're making good money and yet
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life is still very expensive and if and
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when those expenses are either uncertain
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in magnitude or timing it just adds to
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the stress I still don't know exactly
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what our future income might be I don't
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know exactly what our future expenses
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will be that in itself is concerning but
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when I add in the high stakes of getting
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the planning wrong the housing wrong
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messing up the household finances for
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the kid yes that is certainly a source
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of stress but importantly important for
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me and hopefully important for you I'm
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finding ways to reduce the stress I'm
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doing my best to keep it in check and
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and the following four reminders have
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helped me out a lot first I'm reminding
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myself of where my wife and I are in our
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financial lives for example our only
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debt right now as I speak to you here in
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2024 is from a mortgage it's a
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relatively low interest mortgage I think
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in the big scheme of things it's granted
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it's not as low as it would have been if
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we got the mortgage three years ago I'm
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not in love with my mortgage and we
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might have a chance to refinance it but
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our housing costs are very doable in our
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current budget and when I think beyond
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that we have an emergency fund our
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budgets the fact that we're tracking our
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spending it gives us so much valuable
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information to plan our future our
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retirement accounts 401ks Roth IRA those
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kind of things are very healthy we've
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been good Frugal Savers going back you
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know 12 plus years now to the beginning
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of our career so there's a lot of good
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things going on there's some safety nets
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right there's some long-term savings
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that we've been building over time that
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even if some of the upcoming expenses
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don't quite go our way if it ends up
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being a little more expensive than we
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hoped we have those safety nets in place
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now second all of the spending that I
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talked about can be prioritized we don't
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have to spend all of that money over a
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short period of time we can choose which
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spending is most important and most
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urgent and a quick aside here you know
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here in 2024 something that my wife and
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I did at the beginning of this year was
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we talked about these big expenses that
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we knew would be coming so last summer
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we bought a house right so we thought
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about okay we've got 12 months of
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mortgage payments at the beginning of
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this year we were still driving our old
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cars my wife's car was a 2006 my car is
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a 2012 neither car is in the best shape
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my wife's car especially we agreed was a
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relatively urgent thing that needed to
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be replaced and we went ahead and we we
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did actually replace that car a couple
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months ago but we went through the
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various important things that we knew
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would be quite expensive that we could
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potentially spend money on but that we
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didn't have to and we prioritized that
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list and we said for the safety of our
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child for example Le we need a new car
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we need a family car and that's pretty
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high in the priority list because we are
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having this child and there's medical
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expenses involved and there's diaper and
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food expenses and cloth because children
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are expensive we're going to earmark
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this amount of money for the child and
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that's also as high a priority on our
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list as it comes whereas personally you
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know my car CU I'm also driving a
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relatively old car but mine still runs
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reasonably well it still has some miles
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in it left if we were made of money I
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would have replaced it but we're not and
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we had to prioritize where we spent
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money so that's pretty low on our
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priority list or at least lower this
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year there is a chance that by the end
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of this year we'll be in a position
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where I can replace my car but right now
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it doesn't make sense right now our
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priorities are elsewhere and we were
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applying our money elsewhere so the
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stress that I feel is a little bit
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better is made a little bit better by
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the fact that I know we have a plan of
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priorities in place now the third thing
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that makes me feel better is that hard
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work usually helps not always but
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usually you know if a magic Genie came
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to me today and said in 2 years you will
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both be earning enough money to
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eliminate your current stress well then
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I'd start relaxing today now what a
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pleasant Genie what a great Genie now
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unfortunately that Genie doesn't exist
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but I can try to make that Genie
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prediction come true and the easiest way
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to do so is through hard work consistent
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work valuable work I don't want this to
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necessarily be construed as some sort of
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equation where it says hard work equals
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wealth and therefore laziness equals
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poverty I I don't think that's true but
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I do think there's a bit of a
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statistical statement there which is if
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you work hard in your life you are more
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likely more probably going to end up in
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a better position than if you're lazy in
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your life I think hard work there I
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think it's a statistical probalistic
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statement hard work definitely is a
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factor that improves the odds of your
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cream rising to the top it's a factor
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that you can always control and this is
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something that I wrote 2 and a half
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years ago and I look back on that time
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and I I do think it's true for what it's
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worth you know I put in hard work during
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the day I try to put in hard work here
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on the best interest at night and sure
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enough over time that compounds and it
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grows and good things do start to happen
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the fourth thing that makes me feel
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better about my financial stress is that
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the trail before us isn't unblazed it's
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a blazed Trail right as in trailblazing
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the idea is that millions of people have
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taken similar paths before albeit with
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different incomes and expenses and and
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unique Financial plans but if they made
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it if they could all make it I'm betting
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that we'll make it too and that's
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something something that again any of
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you listening out there with financial
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stress when I talk to say someone
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approaching retirement and I'm talking
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to them about their financial plan about
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their Investment Management portfolio
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design Social Security tax planning all
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these kind of things it is a lot right
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it's a lot and it's certainly a source
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of stress but something I like to remind
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them of is that the answers are out
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there right and this is a path that has
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been blazed before and you might be
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unique in your own ways when your own
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goals and your own asset base and all
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those kind of things but we can find a
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path that's going to work for you so if
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you're feeling Financial stress I think
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that's definitely something to keep in
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mind in the process of writing this
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article two years ago I found this quote
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that I really liked and the quote is
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stress is directly related to how out of
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control we feel and I completely agree
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part of my future then and part of my
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future as I speak to you right now is
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out of my control and yeah that does
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stress me out a little bit but the four
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reminders I just talked about I think
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they all Point towards different ways in
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which we can regain and retain a little
00:13:02
bit more control in our lives and a
00:13:04
little bit more control financially we
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can make smart choices we can choose to
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prioritize we can choose to work hard we
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can choose to emulate prior success
00:13:13
stories and in that way we can start to
00:13:15
regain and retain control so if you're
00:13:18
stressed about your finances if you're
00:13:20
stressed about something out of control
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it's completely understandable but that
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is the question to ask yourself what can
00:13:25
you do in your life to regain or retain
00:13:29
some if not all of your financial
00:13:31
control the answers to that question
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have certainly helped me and I think
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they'll help you too and before we get
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to Carl I'm going to read from another
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article only because I think this is the
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perfect article to kind of introduce
00:13:41
Carl with the title of this article is
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the friction is the message the friction
00:13:47
is the message and I'm going to explain
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what that means but part of the reason
00:13:50
why it has to do with the fact that Carl
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is a financial planner he's a financial
00:13:53
professional and you'll understand why
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that matters when I read this article
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but then the other interesting thing is
00:13:58
that Carl like me is a content creator
00:14:01
and his content is very unique he's very
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famous in fact for these Doodles these
00:14:05
little drawings these simple sketches
00:14:07
that he does and that's another reason
00:14:09
why this particular article is unique to
00:14:11
Carl and the article starts with the
00:14:13
idea of Marshall mclan Marshall mcclan
00:14:16
was a Canadian he was a communication
00:14:19
theorist like a academic a professor of
00:14:21
communication and he has this very
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famous line where he says the medium is
00:14:26
the message and by medium he means you
00:14:28
know like media as in there's hidden
00:14:31
meaning in the choice of media that we
00:14:34
use for example my choice to speak to
00:14:37
you in this podcast or to write on a
00:14:39
Blog it sets a certain tone like
00:14:41
regardless of what I'm saying the simple
00:14:43
choice of speaking into your ears in
00:14:46
this way long form content or writing
00:14:48
out articles sets a tone that's unique
00:14:51
and different than the tone that say
00:14:53
Instagram would set or the tone that
00:14:55
television would set and if you don't
00:14:57
believe me if you don't really
00:14:58
understand what I'm saying ask yourself
00:15:00
would you feel the same about Jesse if
00:15:02
everything I did was on Tik Tok right if
00:15:04
I'm there in these 30 second Clips I'm
00:15:06
waving my hands and I'm making it
00:15:08
exciting I think we can all agree that
00:15:10
Tik Tok has just a different feel than a
00:15:12
podcast there is a message hidden within
00:15:15
the medium itself and with Carl I I
00:15:17
think that's unique because there is a a
00:15:19
message buried with within his choice to
00:15:22
make these simple Doodles there's a
00:15:24
message buried within his choice for
00:15:26
example on Behavior Gap radio 's podcast
00:15:30
he does these little 3 to four minute
00:15:32
almost confessional style episodes every
00:15:34
single day like there's a message there
00:15:37
that you know I think of it and say okay
00:15:38
well personal finance and investing it
00:15:40
can be relatively simple right look at
00:15:43
his simple sketches personal finance and
00:15:45
investing it can be this slow steady
00:15:47
drip of short steps over time just like
00:15:51
Behavior Gap radio anyway so I think
00:15:53
that's kind of cool but the rest of this
00:15:55
article doesn't necessarily have to do
00:15:56
with Carl Richards in that way when I
00:15:59
hear Marshall mclin's quote and then
00:16:01
when I've had some of these interactions
00:16:03
in Wealth Management in this
00:16:05
professional world of financial planning
00:16:07
where there are some good actors and
00:16:08
there are some bad actors and it's a
00:16:09
little bit scary I have my own version
00:16:12
of Marshall mclin's quote which is the
00:16:13
friction is the message and a very easy
00:16:17
example to understand is has to do with
00:16:19
a client and I was helping this client
00:16:20
roll over their old 403b account which
00:16:24
is similar to a 41k into an IRA I I
00:16:27
thought back to this idea that in 202 22
00:16:29
I rolled my own old 401K which was at
00:16:32
Fidelity into an IRA at Schwab and it
00:16:35
was so easy you know even though
00:16:37
Fidelity was losing my assets and
00:16:39
whatever small Revenue they were
00:16:41
collecting associated with my assets
00:16:43
part of Fidelity's smart long-term
00:16:46
tactic was to make my rollover as easy
00:16:48
as possible and in my opinion Fidelity's
00:16:51
lack of friction sends a very clear
00:16:52
message to me and to all their other
00:16:54
clients and the message is hey it's in
00:16:56
Fidelity's best interest for us to help
00:16:58
all of our clients and we're so good at
00:17:01
what we do that we can afford to make
00:17:03
your life easy even when you're leaving
00:17:05
us so good work Fidelity I think that's
00:17:07
the right way to go about things but in
00:17:09
my specific case where I was helping a
00:17:12
client roll over their 403b which was
00:17:14
coming from a different custodian not
00:17:16
Fidelity it was ridiculously frictional
00:17:19
there were multiple forms with dozens of
00:17:21
fields involving four different firms
00:17:24
physical mail between those firms
00:17:26
something called a medallion stamp uh
00:17:29
notary public which are like these
00:17:30
official stamps that are relatively
00:17:32
challenging to get or at least a bit of
00:17:33
a headache to get just to make sure that
00:17:35
everything was official and thinking
00:17:38
back on it whereas my rollover literally
00:17:40
took 5 minutes on the phone this 403b
00:17:43
rollover was taking weeks of actual
00:17:45
timeline and hours and hours of
00:17:48
individual people's time it was a
00:17:50
serious headache and that's even with a
00:17:52
professional staff behind me here to
00:17:54
help out and I can't imagine the
00:17:56
frustration of someone having to go
00:17:57
through that alone and that's when I
00:17:59
realized and I thought about it oh
00:18:01
here's this case where the friction that
00:18:03
we're feeling this inter firm friction
00:18:06
during the rollover that's the message
00:18:09
and that particular 403b provider that
00:18:11
was bringing all this friction to the
00:18:13
table they were sending a clear but
00:18:14
subtle message and that message was hey
00:18:17
we don't exactly want your rollover to
00:18:18
be successful we want you to give up we
00:18:21
want you to leave your assets here so
00:18:23
that we can continue profiting off you
00:18:25
it's part of our business model and it's
00:18:27
important to our survival that's the the
00:18:28
message now 403b programs especially for
00:18:31
example for public school teachers they
00:18:33
are notoriously predatory when you
00:18:35
multiply that kind of friction across
00:18:38
thousands of attempted rollovers I am
00:18:40
absolutely positive that some people
00:18:42
will give up that frictional shoddy
00:18:44
custodian will profit off of their
00:18:47
predatory frictional practice I reached
00:18:49
out to a friend of the blog Tony Isola
00:18:51
to commiserate and he wrote back to me
00:18:53
and he said yeah that's deliberate
00:18:54
Financial friction implemented by
00:18:56
companies with a predatory business
00:18:58
model that it's the only explanation for
00:19:00
things like this in 2023 now there are
00:19:02
some similar stories when it comes to
00:19:04
one-on-one investment advisors and
00:19:06
financial planners there are different
00:19:08
levels of friction on the way in and on
00:19:10
the way out of an advising relationship
00:19:13
now in some cases I actually do think
00:19:15
the friction serves an important purpose
00:19:17
a good purpose like hey before we decide
00:19:19
to work together let's make sure all of
00:19:21
our services fit your needs let's slow
00:19:23
down or before we work together let's
00:19:25
set some expectations beforehand so that
00:19:27
we're sure this works work relationship
00:19:29
will benefit both of us or maybe let's
00:19:31
get all the facts on the table first and
00:19:34
then decide what direction to go in it's
00:19:36
almost like dating you know let's slow
00:19:38
down let's get to know one another now
00:19:40
when a couple gets married after a month
00:19:41
of dating we kind of question their
00:19:43
choice right like can they really know
00:19:45
that it's right a little bit of friction
00:19:47
up front that kind of due diligence
00:19:49
early in a relationship is almost always
00:19:51
a positive sign but when there's that
00:19:53
friction on the way out of a
00:19:54
relationship going back to the marriage
00:19:56
analogy not every couple works out and
00:19:59
are you going to make it hard and and
00:20:00
throw your your ex-girlfriend stuff out
00:20:02
on the front lawn well that's a bit of a
00:20:04
red flag isn't it early in my career I I
00:20:06
inherited a client from one of my
00:20:08
colleagues who was retiring and and she
00:20:10
came to me with news her grandson had
00:20:12
just started a career as a financial
00:20:14
adviser and she wanted to go support him
00:20:16
with her business and it was my first
00:20:18
professional breakup so I went to my
00:20:20
boss and just to make sure I understood
00:20:21
the upcoming Logistics and he said to me
00:20:23
you know Jesse a lot of advisers make
00:20:26
this difficult on their clients and I
00:20:27
insist we do the exact opposite so so
00:20:30
thank her for her business with us let
00:20:31
her know that we'll do whatever is
00:20:33
needed to make her transition as
00:20:34
frictionless as possible I love that
00:20:37
approach right the friction or the lack
00:20:39
thereof that sends a very important
00:20:42
subtle message now ideally just like in
00:20:44
this case we wanted to make her
00:20:46
transition as frictionless as easy as
00:20:48
possible to do the right thing to always
00:20:50
work in a client's best interest to take
00:20:51
the high road that brings me to a Warren
00:20:53
Buffet quote right take the high road
00:20:55
it's far less crowded there I am toting
00:20:57
my own horn I obviously am biased here
00:20:59
but I contrast that helpful approach
00:21:01
against some of the stories that you'll
00:21:03
hear around this industry of guilting
00:21:06
clients into staying of ignoring emails
00:21:09
from clients who want to leave of
00:21:11
accusing clients of betrayal for ending
00:21:13
a business relationship it's either
00:21:14
negligence or manipulation or
00:21:16
gaslighting and it's all just kind of
00:21:18
gross the predatory friction at the end
00:21:20
of that kind of relationship sends a
00:21:22
clear message in my opinion and that
00:21:25
message is I've always been predatory
00:21:27
even if you never knew it and when they
00:21:29
send you a message like that believe
00:21:30
them it's just like the Maya Angelou
00:21:32
quote right when someone shows you who
00:21:34
they are believe them the first time
00:21:36
people know themselves much better than
00:21:38
you do that's why it's important to stop
00:21:40
expecting them to be something other
00:21:42
than who they are the friction is the
00:21:44
message here's a quick ad and then we'll
00:21:47
get back to the show one of the more
00:21:49
common questions I hear is Jesse what do
00:21:51
you like in use books blogs podcasts
00:21:54
even Banks and brokerage firms what are
00:21:57
your recommendations so to answer that
00:21:59
question I put together a web page you
00:22:02
can check it out at bestin interest.
00:22:04
blog reccommendations again that's
00:22:07
bestin interest. blog reccommendations
00:22:10
to check out how I'm improving my
00:22:13
financial life let's bring on a
00:22:15
financial good guy a certified financial
00:22:17
planner Carl Richards Carl is not only a
00:22:20
certified financial planner he's also
00:22:21
creator of the sketch guy column which
00:22:23
appeared weekly for a decade in the New
00:22:26
York Times Yes the New York Times Carl
00:22:28
has also been featured on Marketplace
00:22:30
Money on Oprah and on Forbes in addition
00:22:32
Carl has become a frequent keynote
00:22:34
speaker at financial planning
00:22:36
conferences and visual learning events
00:22:38
around the world Carl has a few terrific
00:22:40
podcasts Behavior Gap radio it's a short
00:22:42
daily morsel of interesting thoughts 50
00:22:45
fires is another podcast it's a series
00:22:47
of terrific money origin stories that's
00:22:49
actually ongoing they haven't all been
00:22:51
released yet and I've really been
00:22:52
enjoying 50 fires and then there's also
00:22:54
kitus and Carl which features Carl along
00:22:57
with famous Financial planning nerd
00:22:59
Michael kitus where they go deep on
00:23:00
interesting topics to help other
00:23:02
financial planners in their careers I
00:23:04
think and or at least what I hope you'll
00:23:06
enjoy in today's episode is what I like
00:23:08
about Carl's work in general where yes
00:23:11
money is important but money is not the
00:23:13
main course instead Carl thinks and I
00:23:16
agree with him that we should think
00:23:17
about our human capital as money but
00:23:20
also as time energy and attention so
00:23:23
without further Ado here is Carl
00:23:25
Richards
00:23:31
Carl Richards thanks for joining us on
00:23:33
the best interest podcast and this is
00:23:34
going to be a funny way to start but I
00:23:36
heard you woke up this morning with a
00:23:38
little bit of fear on your mind and that
00:23:40
fear was there for some financial
00:23:42
reasons so so what's going on yeah it's
00:23:45
it's interesting I was trying to think
00:23:46
of why but this has been a common theme
00:23:50
for a very long time and I'll I'll admit
00:23:52
this just because I think I'm not alone
00:23:55
I'm hyper alert and sort of hyper
00:23:58
Vigilant which means I'm always sort of
00:24:01
scanning the landscape and it does like
00:24:03
driving like I know at all times what's
00:24:05
going on in every mirror always right
00:24:07
like I didn't really understand until
00:24:09
maybe it's probably like 10 years ago
00:24:12
that it was largely me feeling this
00:24:14
interesting sense of the need to protect
00:24:18
my family and there's some tradition in
00:24:22
that this like protect and provide thing
00:24:24
that has been handed down for a long
00:24:27
time and then some of it I took on on
00:24:29
myself so I'm always sort of like is
00:24:31
there a ling in the bush is there a Lon
00:24:33
in the bush and that of course in
00:24:35
today's environment for most of us that
00:24:37
shows up around money like am I going to
00:24:40
be able to provide I'm going to be able
00:24:41
to protect and years ago probably five
00:24:43
years ago as I became more and more
00:24:45
aware of this that it was like impacting
00:24:47
and and I would say things even to like
00:24:49
my wife or kids like don't you
00:24:51
understand the reason I'm doing this you
00:24:52
know like that kind of stuff that we
00:24:54
it's almost like a it's almost like a
00:24:56
meme it's so commonly repeated that
00:24:58
people will say that to their and my
00:25:01
wife pointed out at one point she was
00:25:02
like do we look like we need you to
00:25:04
protect us you know like we want you
00:25:06
here but does your 25-year-old daughter
00:25:09
who's in distressed equity in New York
00:25:11
look like she needs you to provide does
00:25:13
your daughter that just got into med
00:25:15
school has got a biomedical engineering
00:25:17
degree look like she needs you to
00:25:19
provide or protect I was like no I'm
00:25:23
really glad you want me but and so it's
00:25:25
been the first time in a while where I
00:25:27
and your your referencing my daily
00:25:29
podcast Behavior up radio I and I think
00:25:32
it might have been we watched Dune too
00:25:34
the the night before so I was sort of
00:25:36
like I woke up just thinking like is it
00:25:38
all going to go away it's today the day
00:25:39
and it was reminding me of feelings I
00:25:41
used to have a long time ago everybody
00:25:42
whoever's worked with me is going to
00:25:43
fire me tomorrow right and none of
00:25:46
that's rational and it just needs to be
00:25:49
unw I just need to stop and realize that
00:25:52
right then I had no problems right then
00:25:56
and this idea that it might all go away
00:25:57
is a ejection of something that may or
00:25:59
may not happen in the future and that's
00:26:01
all a problem really is and what did
00:26:03
Mark Twain say I've had lots of problems
00:26:05
and some of them have happened so that
00:26:07
that's the explanation behind that that
00:26:08
made me think of another there's another
00:26:09
famous quote I think it's one of the
00:26:11
stoics some Roman guy or Greek guy I
00:26:14
think who said you know he who lives in
00:26:16
anxiety feels it twice something like
00:26:19
that right like the anxiety is it brings
00:26:21
on the emotions and then the actual
00:26:23
event of whatever you're worried about
00:26:24
will bring on the emotions again as
00:26:26
you're talking there Carl my wife and
00:26:28
we're expecting our first baby in early
00:26:30
June we sit here recording on April 30th
00:26:32
so we've got a baby that's 5 weeks away
00:26:35
maybe less depending on on what Mother
00:26:36
Nature has in store and I'm reading some
00:26:38
books about fatherhood and they talk
00:26:41
about that during pregnancy especially a
00:26:43
lot of expectant fathers start to feel
00:26:46
this acute Financial stress it's one of
00:26:49
the things that they're able to focus on
00:26:50
they don't know what it's like to carry
00:26:52
the baby they don't have that intimate
00:26:53
the baby's kicking me right now feeling
00:26:56
but they project their anxiety onto the
00:26:58
the finances in the household I've
00:26:59
certainly woken up with some fear in my
00:27:01
heart recently and some anxiety there
00:27:04
sure and you know I think some of that's
00:27:05
probably I mean it's certainly natural
00:27:08
and if you go all the way back to when
00:27:09
it wasn't about zeros and ones in a bank
00:27:11
account it was about shelter and food
00:27:15
and providing and and especially in the
00:27:17
scenario you're pointing to like at that
00:27:19
moment you're physically the one that's
00:27:21
able to go do that kind of thing at that
00:27:23
moment when somebody's you know about to
00:27:25
give birth they're not out hunting so
00:27:27
it's it's an interesting thing to unwind
00:27:29
it's also very interesting to think
00:27:31
about like what that means in an
00:27:34
environment where those roles if they
00:27:37
ever were traditional shift and change
00:27:40
in very good ways by the way like I'm so
00:27:43
gratified watching my older daughters
00:27:46
and they're preparing for careers in
00:27:48
ways that I you know 20 or 30 years ago
00:27:51
we didn't quite think the same way and
00:27:52
I'm really glad that change is happening
00:27:54
and with that change comes some
00:27:57
conversations that we have to sort
00:27:58
through and feelings we have to sort
00:28:00
through and and I think it's all good
00:28:03
and there's tension there and that
00:28:05
tension needs to be managed it's really
00:28:06
really fun to watch all of that puzzle
00:28:09
take place in so many people's lives
00:28:11
right now well as you were sharing these
00:28:13
stories with us Carl take a quick
00:28:15
sidebar away from anything financially
00:28:17
related at least I think so because you
00:28:19
share a lot of your stories and your
00:28:21
thoughts with the world in in a very
00:28:23
kind of fun useful fun useful way you're
00:28:25
very open and honest way about the way
00:28:27
that you share your thoughts and stories
00:28:29
with the world you do a lot of work in
00:28:31
public is what I'm driving at and in
00:28:33
some ways as I was thinking about
00:28:34
talking to you today I thought about
00:28:35
Seth Goden who does a lot of work in
00:28:37
public and I'm not sure if you're a Seth
00:28:39
Goden fan if you're familiar with him at
00:28:40
all but from a Creator's point of view
00:28:42
here it's something I'd like to do on
00:28:43
the best interest I mean why do you go
00:28:46
about sharing in public the way that you
00:28:48
do I wish I knew I wrote a column for
00:28:50
the New York Times every week for 10
00:28:52
years and a lot of those were stories
00:28:55
that I probably shouldn't have told
00:28:57
about my own wife and my wife used to
00:28:59
say to me like is this Hon or off the
00:29:01
Record and I would always be like you're
00:29:03
going you're going to have to wait till
00:29:04
Thursday when the column comes out to
00:29:05
find out I mean I worry that it's
00:29:07
because I'm you know like need some sort
00:29:09
of ego and I need to be out in the world
00:29:12
and people I need and and I can't say
00:29:15
that it would be cute of me to say that
00:29:17
that's not a piece of it but I what I
00:29:19
hope the story I tell myself and what I
00:29:21
hope is true is that this is just an
00:29:24
adventurer's Journal it's like
00:29:25
shackleton's Journal right like I'm
00:29:28
traveling through a landscape that I
00:29:31
think most of us are traveling through
00:29:34
I'm worried and scared and excited and
00:29:37
thrilled and stoked and and and it
00:29:39
sometimes has to do with money and
00:29:41
sometimes it has to do with how I invest
00:29:42
my attention my time my energy and I'm
00:29:45
trying to figure out what matters to me
00:29:47
in an Instagram world and like what
00:29:50
matters to me and what was really my
00:29:51
mom's goals or somebody else's or the
00:29:53
society's goals and that's getting more
00:29:55
complicated and we're all wandering
00:29:57
we're all sort of fellow adventurers on
00:30:01
the same journey and none of us are
00:30:03
talking about it and so I'm just sort of
00:30:06
writing a journal I think of my work
00:30:08
much more as an adventure Journal than I
00:30:11
do as a self-help book it's just like if
00:30:14
you happen to be walking this way and
00:30:16
it's hot and you're thirsty I notice
00:30:20
there's a spring over here if you're not
00:30:22
walking this way and you're not hot and
00:30:23
it's not thirsty then it doesn't really
00:30:24
matter like so that's kind of what it's
00:30:26
meant I that's my that's the the story I
00:30:28
tell myself is that that's what I hope
00:30:31
it's for is that somehow at the very
00:30:33
least we won't all feel alone cuz you
00:30:35
know I'm I'm on the same Journey how do
00:30:38
you as you're going along that Journey
00:30:40
or when you're telling yourself that
00:30:41
story I I want to ask you about impostor
00:30:43
syndrome I'm a late career changer at
00:30:45
least late by relative standards of
00:30:47
where I am in my life I spent six years
00:30:50
in college studying mechanical
00:30:51
engineering I then spent seven years
00:30:53
designing and building and launching
00:30:56
satellite telescopes into space M and
00:30:58
along that process or somewhere on that
00:31:00
timeline I started a Blog and this
00:31:02
podcast about personal finance and
00:31:03
investing and then kind of Ed them as my
00:31:05
resum to switch careers which now for
00:31:08
two and a half years I've been working
00:31:09
at this wealth management firm in
00:31:11
Rochester I have imposter syndrome
00:31:13
because well I'm an engineer I felt good
00:31:15
as an engineer I felt like I belonged
00:31:17
and it's not that I don't feel like I
00:31:18
belong but I just I'm late to this game
00:31:20
and so I I battle imposer syndrome a
00:31:22
little bit but I have to imagine you
00:31:23
know you're writing and speaking
00:31:25
publishing in the New York Times right
00:31:27
you've got this huge huge audience what
00:31:29
are your thoughts on impostor syndrome
00:31:31
or what are some of your personal
00:31:32
stories there forever it was a really
00:31:34
really big problem and my relationship
00:31:36
with imposter syndromes completely
00:31:38
changed so I'll tell you about that
00:31:39
change and and this version of impostor
00:31:41
syndrome that we're pointing to is just
00:31:43
sort of like a kind of a unique strain
00:31:45
of fear and there are people that have
00:31:48
like legitimate impostor syndrome and
00:31:50
that's kind of a different discussion
00:31:52
but the version that most of us talk
00:31:54
about in fact this was my most popular
00:31:57
column I ever wrote
00:31:58
in as a you know the your money section
00:32:00
of the times was about impostor syndrome
00:32:03
I'm a kid from the hills in Utah right
00:32:05
like I I didn't even take a writing
00:32:07
class I don't even know what that means
00:32:08
and I certainly never took any art
00:32:10
classes and through a series of just
00:32:13
really really honestly fortunate
00:32:16
accidents and luck just straight up luck
00:32:19
I end up doing this thing in in a
00:32:21
newspaper that a few people read and
00:32:23
every Thursday morning or whatever day
00:32:25
it was I think it was Thursday morning
00:32:27
when the column was due I was in my
00:32:29
little office in Utah looking out in the
00:32:31
Hills there was no like music playing
00:32:34
there was no sunlight coming through the
00:32:35
window there was no angels singing in
00:32:37
the background it was just like and I
00:32:39
was trying to draw things and I
00:32:41
sometimes i' just be like I can't this
00:32:42
is terrible and I I used to do it on
00:32:44
paper instead of my iPad and so there'd
00:32:46
be hundreds of pieces of paper over my
00:32:48
shoulder and just this whole sense of
00:32:50
anxiety and I'm up against the deadline
00:32:51
and and then I would scan it into the
00:32:53
Fujitsu snap scanner so like I didn't
00:32:56
even have a flatbed scanner right a
00:32:58
Fujitsu snap scanner I'd scan it in then
00:33:00
I'd go to hit send to the editor and
00:33:01
right about when I'd go to hit send I
00:33:03
would feel over my left shoulder cuz the
00:33:05
door was that way and I had I had one of
00:33:06
those frosted glass doors so if somebody
00:33:08
was standing outside you could tell
00:33:10
there was something outside you couldn't
00:33:12
tell who it was or what it was you'd
00:33:14
just see a shape and I'd see a shape in
00:33:16
my mind's eye I would look over there
00:33:18
and there'd be a shape and they would
00:33:20
open the door and it was always Homer
00:33:22
Simpson's boss Mr Burns would open the
00:33:25
door and he'd stick his head in and he'd
00:33:27
be like
00:33:28
what is going on in here like do they
00:33:31
know is that a Fujitsu snap scanner do
00:33:34
they know this is like you're not even
00:33:36
in Park City you're in the Hills out in
00:33:37
the country part like do they wait till
00:33:40
they find out like that would be the
00:33:41
feeling and I'd always just be like ah
00:33:43
was so scary and then one day I was in
00:33:46
South Africa one of the first really big
00:33:49
speaking engagements I did there was
00:33:51
5,000 people and stadium seating and I
00:33:54
walked out for the prep and I just like
00:33:56
turned around and walked back like I was
00:33:57
just like there's no way and I noticed
00:34:00
that same feeling I was like oh I was
00:34:03
like I felt like I look looking over my
00:34:05
left shoulder I felt like I could see Mr
00:34:06
Burns again I was like well that's weird
00:34:08
and it used to be that I would just feel
00:34:10
this tightness in my chest and this
00:34:11
anxiety and and and I would just push
00:34:13
through it a sort of like kick fear in
00:34:15
the teeth kind of pushed through like
00:34:18
that that approach and so but this is
00:34:20
when it changed I was like oh Mr burn
00:34:22
that's really interesting Mr Burns is
00:34:24
here and then I and then I was like I a
00:34:26
couple months later I was starting a big
00:34:28
mountain bike race that was going to
00:34:30
take me 8 to 12 hours and I was like I
00:34:33
honestly didn't know if I was going to
00:34:35
finish I knew I wouldn't die I mean it
00:34:36
was like I could it was going to be fine
00:34:38
but I I didn't know if I was going to
00:34:39
finish I was really ner and I remember
00:34:42
looking over my left shoulder and in the
00:34:44
group of people at the start line
00:34:46
thinking oh my gosh Mr Burns is here so
00:34:50
then I was like I had 10 hours to think
00:34:52
about that so I was on my bike thinking
00:34:53
about it and I was like at the birth of
00:34:54
my first child certainly at my wedding
00:34:57
like and I was like wait Mr Burns has
00:34:59
been at every cool thing I've ever done
00:35:02
like anything I've ever done they always
00:35:04
and this is a Seth golden line they
00:35:05
almost like may this might not work Seth
00:35:07
likes to say like of course like who am
00:35:10
I to have a kid are you crazy marriage
00:35:13
what I was 23 like like Mountain by
00:35:16
crazy so then I was like well wait if Mr
00:35:19
Burns was always at every cool event
00:35:21
some of them work some of them didn't
00:35:23
but if Mr Burns was always every cool
00:35:25
event why would I want to get rid of
00:35:27
that so then I was like wait I want to
00:35:30
structure my whole life around Mr Burns
00:35:33
being there as often as I can he's at
00:35:35
every good party so that's when it
00:35:36
changed for me and I learned to be like
00:35:39
now I just look over my left shoulder
00:35:40
and I'm like oh like I feel the
00:35:42
tightness in my chest that used to be
00:35:44
like oh fight through it fight through
00:35:45
it instead of fight through it now I can
00:35:46
feel it and this I think is the big key
00:35:49
feel it and then I think personifying is
00:35:51
kind of cool and Elizabeth Gilbert says
00:35:53
that strain of fear is like like your
00:35:55
crazy uncle that you want to come on the
00:35:58
trip you just won't let them drive so
00:36:00
now I just look over my left shoulder
00:36:02
and I'm like hey Mr Burns I'm glad
00:36:04
you're back like let's get to work and I
00:36:06
know that feeling is just like oh that
00:36:08
means you're going to do something that
00:36:09
may not work this this is going to be
00:36:11
cool whatever happens is going to be
00:36:12
exciting this is going to be fun so
00:36:14
that's the approach that fear is driven
00:36:16
most of the good things that have
00:36:17
happened in my life i' that's the last
00:36:19
thing I'd want to kick in the teeth you
00:36:20
know like no fear like no come on in and
00:36:23
there's one more Story the Buddha was
00:36:27
teaching the Bodi tree and there's a
00:36:29
bunch of people out there and out in the
00:36:30
bushes there was Mara which is the like
00:36:33
mischievous devil one of the Buddha's
00:36:35
attendants came up and said hey Buddha
00:36:38
Mara's here like all worried Mara's here
00:36:40
and the Buddha said oh good invite her
00:36:43
in for tea and I was like yeah that's
00:36:45
what I say to Mr that's what I'm going
00:36:46
to say to Mr Burns I'm going to be like
00:36:48
oh good come on in for tea so that's how
00:36:51
it's changed for me well I'm drinking
00:36:52
some tea right here which is
00:36:54
coincidental that you brought that up
00:36:55
well selfishly for my own sake and also
00:36:57
for listeners sake I hope that reframing
00:37:00
takes effect the next time I feel
00:37:02
impostor syndrome and whether it's Mr
00:37:04
Burns or some other personification I I
00:37:06
hope I'm able to look at them with a
00:37:08
little bit more excitement and invite
00:37:10
them in and welcome them in because it's
00:37:11
a sign of they even say from a kind of
00:37:14
physiological scientific point of view
00:37:15
that anxiety and excitement really are
00:37:19
kind of similar emotions like
00:37:21
physiologically the way your brain and
00:37:22
your body react they're quite similar
00:37:24
it's just the framing of excitement is
00:37:26
something good and and anxiety is
00:37:28
something bad or the event itself is
00:37:30
good or bad but kind of underlying it
00:37:32
all it's it's just I like the idea that
00:37:34
there's something good on the other side
00:37:36
of that feeling and and your body's just
00:37:38
letting you know that and you have to
00:37:39
convince your your rational brain that's
00:37:41
the case yeah one one thing that's
00:37:43
really important to me that I've since
00:37:45
learned is that I want to expose myself
00:37:49
to Mr Burns as often as possible with
00:37:52
chunks of rest between and I didn't used
00:37:54
to realize the value of the chunks of
00:37:56
rest and so I'd end up completely burned
00:37:58
out and have to take time off or like we
00:38:00
ended up moving to New Zealand actually
00:38:02
as a result of one of those experiences
00:38:03
and so now I'm like Mr Burns Mr Burns Mr
00:38:07
Burns rest Mr Burns Mr Burns rest right
00:38:10
and I think that's a much healthier
00:38:12
approach here's a quick ad and then
00:38:14
we'll get back to the show a few of you
00:38:17
occasionally inquire about two different
00:38:19
topics that are actually related the
00:38:21
first type of question seeks out details
00:38:23
about my professional life and the
00:38:24
wealth management firm that I work for
00:38:26
here in Rochester New York the second
00:38:29
type of question involves the best
00:38:30
interest which operates with no
00:38:32
advertising no pushy sales no pay walls
00:38:34
and the question is how can the best
00:38:36
interest stay afloat well to answer both
00:38:39
of those questions I want to point you
00:38:41
to episode 78 of the best interest
00:38:44
podcast I intentionally recorded episode
00:38:46
78 to shine light on those topics and
00:38:49
inform you how you can actually help the
00:38:51
best interest if you're so inclined so
00:38:54
if you've ever been curious about the
00:38:56
business of the best interest please go
00:38:58
listen or download episode 78 and let me
00:39:01
know what you think Carl we were talking
00:39:03
earlier that the listener audience here
00:39:05
does skew towards the DIY investor and
00:39:08
you have a famous sketch there are two
00:39:10
bars on a bar chart one is labeled
00:39:12
investment returns and it's much taller
00:39:14
than the bar next to it which is labeled
00:39:16
investor returns and that difference
00:39:18
where investors generally have smaller
00:39:20
returns is labeled you you've labeled it
00:39:22
the behavior gap which I suppose led to
00:39:24
a a wonderful naming brand naming
00:39:26
opportunity for you can we talk a little
00:39:28
bit more about the behavior Gap but then
00:39:30
maybe we can segue into this bigger
00:39:32
broader concept of real Financial
00:39:35
Planning and and what that term means to
00:39:37
you yeah I mean listen I think the
00:39:39
reason to to get advice is not because
00:39:43
you don't have the technical skill or
00:39:45
you don't know how to do it yourself the
00:39:47
reason to get advice is because you have
00:39:50
blind spots and those blind spots lead
00:39:53
to behavior that produces a suboptimal
00:39:56
result
00:39:57
with the benefit of hindsight in the
00:40:00
moment it feels totally rational and
00:40:02
totally reasonable and so I think if
00:40:05
you're doing it yourself the most
00:40:08
important thing to protect against is
00:40:10
not the technical skill portfolio design
00:40:13
is actually up to
00:40:15
95% you know of it is actually
00:40:18
relatively simple it's in the really
00:40:21
smart people have outlined exactly and
00:40:23
John Bogle used to say that you know
00:40:25
like put all your money in S&P 500 index
00:40:27
fund and put 100 minus your age in S&P
00:40:31
500 index fund and put the inverse if
00:40:33
you're 20 you're putting 80% in S&P 500
00:40:35
Index Fund and 20% in a safe like
00:40:37
short-term Bond index fund and what he
00:40:40
used to say about that approach is that
00:40:41
there are ways to invest that are better
00:40:44
but the ways to invest that are worse
00:40:45
are infinite yes there are ways to
00:40:47
invest that are better the problem isn't
00:40:49
that that's not the problem the problem
00:40:51
is figuring out how to allocate money I
00:40:54
know plenty of people who do this on
00:40:55
their own and are totally capable of
00:40:57
doing it and often they're wired just a
00:40:59
little bit differently than most people
00:41:01
to be honest like long-term investment
00:41:03
results are not a function of skill
00:41:05
they're a function of behavior and
00:41:07
that's what the behavior G points to and
00:41:09
these are advised or non-advised this
00:41:11
isn't a diyi this isn't an indictment of
00:41:13
DYI at all it's humans most of the data
00:41:15
on on the behavior Gap stuff that we
00:41:18
underperform our investments which
00:41:19
essentially points to the idea that most
00:41:22
investors would be better off at an
00:41:23
index fund this is kind of like the
00:41:25
shortcut you could get to well those
00:41:26
were mostly people who had advisers so
00:41:29
this isn't an indictment against DYI at
00:41:30
all I'm just saying as a human if I was
00:41:33
doing if you're doing this on your own
00:41:35
the thing that you want to be most aware
00:41:37
of is the fact that you have blind spots
00:41:40
and figure out how to get really
00:41:42
important guard rails in place to force
00:41:45
yourself to do things that feel stupid
00:41:48
they feel against your wiring like
00:41:49
you're going to need to rebalance into
00:41:53
things that you want to sell that
00:41:54
everybody else is selling like you need
00:41:56
to rebalance when the market Market is
00:41:57
low the market is down and you need to
00:42:00
rebalance out of the market just little
00:42:02
around the edges by the way not
00:42:03
wholesale just little rebalancing things
00:42:06
when the market is high and everybody's
00:42:07
buying that's really hard and it's cute
00:42:10
to say now but it's really hard in 2007
00:42:13
and8 it's really hard when the everybody
00:42:15
on this TV is yelling so that's what you
00:42:18
need to be aware of right is that it's
00:42:20
the blind spots there's equally as many
00:42:23
ways to deal with that as there is the
00:42:25
investment problem the like tactical
00:42:27
investment problem you just have to be
00:42:29
aware of it there's a a story I've
00:42:31
written about there's a Lumber Town like
00:42:33
a mill toown in Northern Pennsylvania
00:42:36
they built a highway bypass kind of like
00:42:38
over and around the town so the highway
00:42:40
is elevated it's it's 40 ft up above the
00:42:42
ground and for like a mile there's this
00:42:44
bypass there was this problem after the
00:42:47
bypass was built for like a number of
00:42:49
years where these deer would get quote
00:42:51
unquote stuck on the bypass would kind
00:42:54
of freak out and the only option that
00:42:56
the deer knew because they're just deer
00:42:58
they would jump off the bypass down to
00:43:01
their death and into someone's you know
00:43:02
backyard and so the problem was I think
00:43:04
in the New York Times even wrote about
00:43:05
it they're like all these citizens of
00:43:07
the town are saying like what the hell
00:43:08
these deer are raining down on us from
00:43:10
above it's kind of a weird analogy but
00:43:12
when I read it I thought of the fact
00:43:14
that obviously to us smart humans we say
00:43:16
well why don't why doesn't the deer just
00:43:17
walk off the bridge and it's like well
00:43:18
it doesn't know better and that fight or
00:43:20
flight Instinct kicks in and the deer
00:43:23
thinks to itself this is my only option
00:43:25
and it panics right the deer panics and
00:43:27
jumps there is some sort of parallel
00:43:29
maybe not to every human but every human
00:43:31
has that amydala right we have that
00:43:33
fight or flight and that irrationality
00:43:35
that kicks in in the midst of a a market
00:43:38
panic and that ability to say despite my
00:43:41
fear I still know I need to do the smart
00:43:43
thing and rebalance right now that's
00:43:45
really hard it's a different kind of Mr
00:43:47
Burns looming outside your frosted glass
00:43:49
window saying what are you stupid how
00:43:51
why why are you going to rebalance right
00:43:53
now it's it's counterintuitive too like
00:43:55
in NBA 101
00:43:57
you learn if you have three divisions
00:44:00
and one's doing poorly and two are doing
00:44:02
well you kill the one that's doing
00:44:03
poorly and you reallocate those
00:44:04
resources the one that's doing well to
00:44:07
hire a basketball coach it would make no
00:44:08
sense to not look at their record and
00:44:11
have some reasonable expectation that
00:44:12
might continue I just think like if my
00:44:14
hands on a burning stove I don't really
00:44:16
care what you tell me about not taking
00:44:17
it off I'm going to take it off and so
00:44:19
you just have to be aware of that and
00:44:20
most people are wired Buffett said that
00:44:22
he was just born in the right time that
00:44:24
if he had been born any other time he
00:44:26
would have been eaten by lions
00:44:27
right and he just happens to be wired in
00:44:29
a way where he's comfortable with that
00:44:31
and I I've talked to plenty of people
00:44:32
who are they're just like I don't get
00:44:33
the whole emotion about this well that's
00:44:36
rare and that research is clear most
00:44:38
people we're mostly hardwired to get
00:44:41
more of what gives us pleasure and
00:44:43
security and run as fast as we can from
00:44:45
stuff that causes us pain totally now
00:44:48
the next thing I just want to ask a
00:44:50
little bit about some of the real value
00:44:53
ad of real financial planning so Carl I
00:44:55
mean going maybe a step deeper on on
00:44:57
real financial planning as opposed to
00:44:59
just Investment Management which you
00:45:01
know we kind of spent the last couple
00:45:02
minutes talking about that it's
00:45:03
something that I've spoken to recently
00:45:04
with my audience about the the value ad
00:45:06
of real financial planning now it it
00:45:09
might not be there for all DIY investors
00:45:11
sure but I think we need to realize and
00:45:13
admit to ourselves that for many people
00:45:14
out there people who we know you know
00:45:16
our great aunt Ethel or the guy at the
00:45:18
barbecue who we always see they might
00:45:20
not have any sort of DIY bones in their
00:45:22
body and so there's real value and
00:45:24
there's a real value ad to the work that
00:45:26
that we do so how do you go about
00:45:29
explaining that idea or maybe how do you
00:45:31
differentiate between the real Financial
00:45:33
Planning and the value there as opposed
00:45:35
to maybe some of the bad precedents set
00:45:38
in this industry where maybe there isn't
00:45:40
a value add to what all financial
00:45:41
advisers do yeah I mean listen the
00:45:43
problem is that that's mostly true that
00:45:45
most of the industry is worthless and
00:45:48
that's the problem and that's why we
00:45:50
call I used to call it the secret
00:45:51
society of real financial planners like
00:45:53
it was secret it was hard to find and we
00:45:55
don't even as humans we even know like
00:45:57
it's hard for me to figure out what goes
00:45:59
on in our industry speaking broadly it's
00:46:01
hard for me to figure it out try
00:46:03
figuring it out without 20 years of
00:46:04
background like it's hard and as humans
00:46:07
we don't really even know like we've
00:46:08
been trained that it's all about solving
00:46:11
very it's almost like I'm going to self-
00:46:13
diagnose I've got this pool of money or
00:46:15
I'm not sleeping well because I need
00:46:17
life insurance like I'm going to go and
00:46:18
I'm going to find somebody to buy it and
00:46:20
they're going to sell stuff to me and I
00:46:22
got to treat it like a used car sales
00:46:24
experience and it's G to be adversarial
00:46:26
and and the reason most people feel that
00:46:28
way is because that has been their
00:46:30
experience and so many people are doing
00:46:33
it themselves because they realize they
00:46:36
could lose money on their own without
00:46:37
paying
00:46:38
somebody and I don't mean it that way I
00:46:40
just mean like they could do a better
00:46:41
job on their own now what separates that
00:46:44
from what I call real financial planning
00:46:46
which absolutely exists and is
00:46:49
lifechanging if you can find it and it's
00:46:51
worth every penny you'd ever pay it's
00:46:53
just hard to find and real financial
00:46:55
advisers or planners
00:46:57
have a real problem because they can't
00:46:59
really tell you what it is they do
00:47:02
because it doesn't really make sense
00:47:04
until you experience it because it's a
00:47:07
feeling and you when you think of like I
00:47:10
need financial advice you don't think I
00:47:12
need somebody to make me feel a certain
00:47:14
way you think I need somebody to figure
00:47:16
out how to invest my money well that's
00:47:17
easy I can read a book so it's really a
00:47:19
circular problem so here's the
00:47:22
difference to me this is the most common
00:47:25
question I'm getting asked these days
00:47:26
and it's typically age cohort of like 40
00:47:29
to 55 and they'll say hey can I you know
00:47:32
I'm going to be in Park City where I
00:47:34
live can we meet for coffee or something
00:47:35
I read one of your books or your column
00:47:37
and I I I know what's going to happen we
00:47:39
we end up sitting down and these are
00:47:41
typically really successful people who
00:47:43
will show some proof of success they'll
00:47:45
say look I and they'll show like
00:47:46
probably not physically but like a
00:47:48
balance sheet like I've made this much
00:47:50
money or I sold my business or I'm
00:47:51
retired or or they'll show an income
00:47:53
statement like I make you know 800,000 a
00:47:56
year as an anesthesiologist or whatever
00:47:58
and then they'll look around to make
00:47:59
sure nobody's listening and they'll say
00:48:02
what's it all for like is this really
00:48:04
all their like I did I did all the
00:48:06
things I I like I won the whole thing
00:48:09
and is this the prize I think Steven cvy
00:48:12
said something along the lines of the
00:48:14
last thing you want to do is spend your
00:48:16
whole life climbing a ladder only to
00:48:18
find out it's leaning against the wrong
00:48:20
wall and I think what a real adviser
00:48:22
does is help you not just make sure
00:48:25
you've built a really great ladder
00:48:27
but make sure that it's leaning against
00:48:29
the right wall and those things are
00:48:31
actually harder than they sound as
00:48:33
humans to get clear about what we really
00:48:35
want I would imagine some of your
00:48:37
listeners especially ones that have a
00:48:38
little bit more experience and are in
00:48:40
their late 40s early 50s or maybe even
00:48:42
in their 60s are like yeah you know like
00:48:45
I thought I wanted to retire to the
00:48:46
sailboat have you ever been on a
00:48:48
sailboat you like you don't really know
00:48:50
and having somebody clarify and then
00:48:53
align your use of capital in an ongoing
00:48:57
way with what you said was important to
00:49:00
you and as the thing that's important to
00:49:02
you refines and changes we need to make
00:49:04
sure the alignment of capital refines
00:49:06
and changes so what I would say is a
00:49:08
real financial adviser can help you in
00:49:10
ways you don't even understand and how
00:49:12
do you find one like yeah you just have
00:49:15
to interview people see here's the
00:49:17
problem most financial advisers don't
00:49:19
take time to understand to help you with
00:49:22
that conversation and where do you want
00:49:23
to go so we're all just arguing about
00:49:26
whether we should take a plane a train
00:49:28
or an automobile and we're going to
00:49:29
debate the merits of a plane a train or
00:49:31
an automobile before anybody stopped to
00:49:33
say where do you want to go and then
00:49:35
that's a never ending process like what
00:49:38
I thought I wanted 5 years ago is
00:49:39
different this morning my wife said
00:49:41
something like hey maybe we should take
00:49:43
a year and work from one of the you know
00:49:46
Spain Italy or Portugal because they're
00:49:48
offering these digital Nomad visas I was
00:49:50
like the guys are outside doing the
00:49:51
Landscaping right now like we're almost
00:49:53
done with this you know so and and so
00:49:56
all I'm saying is a year from now what
00:49:58
is really important to me will be a
00:50:00
little different and I'm going to have
00:50:01
to go back to my planner and say hey
00:50:03
we're kind of thinking this how would
00:50:04
that change oh well then we should be
00:50:05
thinking this and this and this and
00:50:07
that's what a relationship with a real
00:50:09
planner looks like and I have deep
00:50:11
empathy for anybody listening going yeah
00:50:13
I where do you find that because it's
00:50:14
hard it's hard but here's what I tell
00:50:16
you just because you have ever had found
00:50:18
one they do exist like I've seen them in
00:50:20
the wild it's kind of like a a little
00:50:22
Adventure hunt you like got to go out
00:50:24
like there's one over there they're out
00:50:25
there I really like that answer Carl and
00:50:27
I'll be honest to the listeners what you
00:50:30
described is immensely valuable it's
00:50:32
also hard I mean I've sat on the the
00:50:34
opposite side of the table from a client
00:50:36
and I get nervous sometimes or I feel
00:50:38
impostor syndrome or whatever you want
00:50:40
to call it about kind of asking them to
00:50:42
open up asking the right questions right
00:50:44
getting deep in their lives and and
00:50:46
really trying to understand what makes
00:50:47
you tick I mean the easier thing is to
00:50:50
kind of stay on the surface and stick
00:50:51
with the numbers and say I'm going to
00:50:53
help you optimize your numbers that's
00:50:55
kind of the easier part it's a b bit
00:50:56
more of a commodity and there are
00:50:58
probably a lot of advisers out there who
00:51:00
can do that but it is harder but so much
00:51:02
more impactful when I've been able to
00:51:05
really dive into what makes a person
00:51:08
tick and help them align their time
00:51:11
energy money attention I hate to
00:51:13
interrupt you but it's so interesting
00:51:15
like when as soon as we say like it's
00:51:16
easier to optimize I'm always asking the
00:51:19
question optimize for what for what yeah
00:51:21
what are you solving for like what are
00:51:23
like well the portfolio needs to
00:51:25
generate a return why for what it's the
00:51:28
we're always confusing the the means
00:51:31
with the end it's really crazy that this
00:51:33
industry has existed this long without
00:51:35
this kind of dialogue being more direct
00:51:37
like what do you mean performance
00:51:40
portfolio performance or return is not a
00:51:42
goal it's not a goal just a means to a
00:51:45
goal yeah yeah so anyway that's the
00:51:48
important part that applies to me so
00:51:49
much or that hits the right tone with me
00:51:51
because as I alluded to earlier I spent
00:51:53
the first 15 years of my professional
00:51:55
Life After High School school being an
00:51:57
engineer the equation always has two
00:51:59
sides to it right you're doing
00:52:01
everything on the left side of the equal
00:52:02
sign because you want to get to
00:52:04
whatever's on the right side of the
00:52:05
equal sign and what we're talking about
00:52:07
here is that this kind of relationship
00:52:09
with real financial planners has a
00:52:11
specific right side of the equal sign
00:52:14
for whatever the the client's unique
00:52:16
desires are and you know what are we
00:52:18
solving for if we don't know otherwise
00:52:21
it's just a question mark on the right
00:52:22
side of that equal sign and we don't
00:52:24
know if we're really hitting the Mark we
00:52:25
don't know if we're driving towards the
00:52:26
the right answer for sure anyway Carl
00:52:29
thank you for joining us today and and
00:52:31
making us think you know I don't know if
00:52:33
you spent any money to be here today but
00:52:35
you definitely spent your time your
00:52:36
energy and your attention yeah and then
00:52:38
that's some Capital that I really
00:52:40
appreciate and I think our listeners
00:52:42
really appreciate you you spending with
00:52:43
us so if anyone wants to either reach
00:52:46
out to you or really I mean I listen to
00:52:48
you and I I read your stuff through
00:52:49
multiple channels and so I'm not even
00:52:51
sure which of your projects to be most
00:52:54
excited about and help you promote but
00:52:55
if you had to Point listeners right now
00:52:57
to to something that you're doing where
00:52:59
would you point them to yeah it's either
00:53:01
if you like to read it's the weekly you
00:53:03
just go to behavior app.com and sign up
00:53:05
for the weekly letter so we send out a
00:53:08
letter each week with a one of the
00:53:09
sketches that I draw in as few words as
00:53:11
possible and if you like to listen you
00:53:13
can go to it or apple podcast And
00:53:16
subscribe to behavior app radio or 50
00:53:19
fires which is also super fun so that's
00:53:21
Behavior app radio or 50 fires both of
00:53:24
those podcasts are fun yeah 50 has been
00:53:27
great I've been listening to every
00:53:28
episode so far what was your favorite
00:53:30
one well you know I I really like the
00:53:32
Josh Brown Episode cuz I'm a fan of Josh
00:53:35
and I really liked His Name Escapes me
00:53:37
but tank from uh oh breaking bad Dean
00:53:40
Dean Dean I really like that episode
00:53:42
that was really fun but yeah listeners
00:53:44
be sure to check out 50 fires really is
00:53:45
they're fun conversations they're kind
00:53:47
of like money origin stories is that is
00:53:49
that a fair way to describe yeah it's
00:53:51
almost like this is for your listeners
00:53:53
to know this is I was trying to recreate
00:53:55
what I think a really good first meeting
00:53:56
with the financial advisor is about and
00:53:59
so yeah we've had chip gains has been on
00:54:01
my my favorite episodes was the one with
00:54:02
my wife I've had my daughter on I just
00:54:05
recorded with Scott blue who created all
00:54:07
the yeti films we just Dexter Fowler who
00:54:10
was a major league baseball player
00:54:11
baseball player so fun so there's
00:54:13
there's a bunch of really great ones
00:54:14
coming out soon very cool well listeners
00:54:17
be sure to check out that we'll put
00:54:18
links in the show notes and Carl
00:54:20
Richards thanks again for stopping by
00:54:21
the best interest podcast cheers Jesse
00:54:23
thank you thanks for tuning in to this
00:54:26
episode of the best interest podcast if
00:54:28
you have a question for Jesse to answer
00:54:30
on a future episode send him an email at
00:54:33
Jesse best. blog again that's Jesse at
00:54:37
bestter interest. blog did you enjoy the
00:54:40
show subscribe rate and review the
00:54:42
podcast wherever you listen this helps
00:54:45
others find the show and invest in
00:54:47
knowledge themselves and we really
00:54:49
appreciate it we'll catch you on the
00:54:50
next episode of the best interest
00:54:52
podcast
00:54:56
the best interest podcast is a personal
00:54:58
podcast meant for education and
00:55:00
entertainment it should not be taken as
00:55:02
Financial advice and is not prescriptive
00:55:05
of your financial situation
