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Creating A Nest Egg So You Can Retire (Encore) · The Missing Secret Podcast

• 0:00
  Kelly Hatfield: Welcome to the Missing Secret Podcast. I'm Kelly Hatfield.
• 0:03
  John Mitchell: Hey, and I'm John Mitchell. So today our topic is creating a nest egg so you can retire. So Kelly, why don't you share with our audience sort of your approach to saving money and creating that that nest egg? What what has been your approach since you were young?
• 0:23
  Kelly Hatfield: Yeah, I was very lucky because my dad. This is something that was instilled in me from an early age, like as early as when I was getting allowance. Like I was taught this that you always pay yourself first, you know. And back in the day, I had just a little savings account that you know I would put it into, and then obviously, as I've become you know more sophisticated in how I utilize my money and invest money, you know that's changed. But that the one thing is never changed, which that's the first thing that happens is I always pay myself, and now I've automated that, you know, so that it's automatically going into the accounts that I want it to go into. But you know that's been my you know method from as early as I could start earning money.
• 1:08
  John Mitchell: So did you take the approach that you're going to put away say 10% a year? Is that were you that precise or how how did you do it?
• 1:16
  Kelly Hatfield: Yeah, it literally was, and that's changed and evolved over the year. But when my dad, you know, taught it to me, he was like, "You pay yourself 20% so you take 20% off the top, and that's evolved. You know, I'm more of like 15, you know, 10 to 15% But when I was, you know, younger and earlier, you know, it was 20% Like I never even saw it, so I never missed it because I was taking 20% of what I earned and moving it over into a savings account,
• 1:46
  John Mitchell: right? Well, you know that is a smart way to do it. You know, I I regret to say that I wasn't as diligent about saving money as I was an entrepreneur. You know, when I became an entrepreneur at 30, throughout my 30s and 40s, candidly, I always thought I was going to hit it big, and that would provide for my nest egg. And that is not an enlightened approach to it. I should have been doing what you did, which is you know saving 10 to 20% a year. And you know, there's a great book called "The Richest Man in Babylon, and you you read up.
• 2:27
  Kelly Hatfield: Yep, that was the one that I was that it was I was introduced to when I was I think I was like 10 years old. My dad brought that into my existence. That's a right with basic principles, but yeah, I love that. That's the book you mentioned.
• 2:40
  John Mitchell: Right. Yeah, it's it's powerful, and so you know, for our audience, I think the lesson is you got to embrace saving and embrace the compounding effect. And you know, the other thing I wanted to to share with our audience is when you have money, how should you invest it? And I'll tell you this: the journey that I went on. So when I sold my reverse mortgage company, I got a lot of money. And and you know, I being a CPA, you would think I would be pretty prudent about it and and pretty well versed on it. But I never really had big money before then, so I I wasn't all that sophisticated with it, and so I get a big chunk of money. And the idea was, you know, if I could earn, say, 5% a year on my nest egg, that would pay my my living expenses, you know, and so that was the theory, and it seemed to to make sense. 5% was not a unusual return to to anticipate. You would legitimately think you could get 5% on your your money, and so I start with a financial advisor, and and this is typical of financial advisors. They're like, well, the the market is defined by the S and p5 100, you know, and so you're always comparing your performance or the investment advisor's performance against the S and p5 100. Now, what is a reality though is that most financial planners and investors never do as good as the S and P because you know the idea is that the S and p5 100 can have over time big dips like a 30 35% dip. We saw that happen in in 2008 was really the the last time we saw a big dip. I guess I guess during COVID we saw a big dip, and those dips happen more or less every 10 years. But here's the fallacy that that I have come to appreciate. Is they'll say, "Well, okay, we're going to do a diversified portfolio of stocks and bonds, and you're not going to be risking losing 30%. I, as I got this money, you know, like 10 years ago or so, I saw that at first, you know, I would get, I don't know, an overall return of three or 4% for oh I don't know two or
• 5:27
  three years when the market went up say 15% and you know again the advisor would always go well yeah you made 4% and the market did 15 but you weren't exposed to losing 30% and after doing that for two or three years, I'm like, well, wait a minute. I'm taking that 30% cut after just in the opportunity cost. I'm I'm losing after three years. If if my returns are always 10% lower over three years, then there's the 30% that I'm afraid of of incurring, and so the lesson I think is it's best just put your money in the S and p5 100. That's what Warren Buffett says, and the logic of this is that the United States is the most innovative, productive country in the world, and the idea-if you're always investing in the S&P 500-you don't really have to pick the stocks. You just know that that over time it's going to outperform anything and everything, basically. And so I wish I so wish somebody had explained that to me 10 years ago. That again, do what the top investor in the world, Warren Buffett, says to do. You know, he he tells his own kids when he dies, don't put it in Berkshire Hathaway stock. Put it in the S and p5 100, and and that is the lesson I've learned. My good friend Bill Cunningham, who is the chancellor, former chancellor and president at the University of Texas, who's worth many, many, many millions. That's the lesson he's learned, and and that's essentially the path I have taken over the last few years is just to, you know, do that and not incur the fees, the big fees that the many managers pay you. And like last year, the S and p5 100 went up 26.3% which is pretty damn good. So I don't know. You think that's helpful to people?
• 7:40
  Kelly Hatfield: I think it's helpful to people. Obviously, we're not financial advisors, so I'm going to preface by saying that any advice we give you, you're taking it your own. I know if we get to
• 7:49
  John Mitchell: Sue us, let me give you Kelly's. I'm a banana president.
• 7:53
  Kelly Hatfield: No, no, no, no, no. But I will say I agree with you because I have invested in the S and P and specifically in index funds, but the one thing that my dad taught me early on that got me like excited, you know, about investing and how I first started to invest was that I wanted to have a piece of a company. So anything I loved, so like if I wore Nike shoes, it was like I want to be part owner in that business, and I looked at it as like I, you know, I want to be a shareholder and be part of that, you know. And so the things that I use all of the time, like Amazon and you know Apple and anything that I loved as a product myself, he's like invest in it, become part owner, and so I would buy some shares, you know, and so it was a whole mentality around you know that was taught to me around you know that piece and what kind of ignited my excitement about investing and looking at it kind of through that lens and I've done really well as a result of that. If it's something that I'm like, oh, that's a really cool idea, I love this product, or I love right, I love of course my dogs, and so you know, I'm looking at different products like Chewy, you know.com, and you know, those companies that I utilize on a regular basis, I will buy shares in just because that's worked out well for me, and it's just been a fun part of investing and has made it fun.
• 9:17
  John Mitchell: Right, that makes sense. Well, you know, I was just talking to Bill Cunningham about this last week. I was telling him, I said, you know, if you look at the S and p5 100, it went up a great deal this past year because Nvidia was the the biggest company, and it it like doubled or tripled in in value. And you know, I was thinking, well, how how are you ever going to pick the next Nvidia? Well, you never will. But you know, if you invest in the S and p5 100, you end up not having to pick the next Nvidia, and but you'll own it because it'll rise to the top, and that. So that's that's another reason that you know just. Investing in the S p5 100 makes sense.
• 10:03
  Kelly Hatfield: Yep,
• 10:03
  John Mitchell: And you know a couple other lessons that I would suggest in regarding money is never loan money, never loan money. I don't know Kelly if you've experienced this, but Gingen and I have. You know when we've loaned money, inevitably they don't pay it back, and we're the bad guy for asking it to be paid back. And and I'll tell you, I my attitude is is I we're just not loaning money. We just don't do it. We're not a bank. We hate that you're having a hard time, but you know we've been burned too many times, and we see that if you just embrace that hard and fast rule that I don't loan money, people accept it. They may not like it. That's been a good one. Do you agree with that one?
• 10:54
  Kelly Hatfield: I agree with that one, and I'll just put one little caveat: like I don't loan money. I will never loan money with the expectation like that. I'm going to get anything back. So I can give somebody money for something like somebody's got a problem, and I decide I want to help them out. That is what I'm doing. I'm helping out, and I have no expectation of being paid back.
• 11:16
  John Mitchell: Yeah, that that
• 11:17
  Kelly Hatfield: Yknow what I mean. Otherwise, no, I don't loan and say, okay, let you gonna owe me this back and put a nope. If I'm gonna give them the money, I give it with zero expectation of getting the money back.
• 11:27
  John Mitchell: Right. You know, the other thing I would say is never do private investments. Bill and I were talking about this. If we had never invested in in deals where people came to us private people and said, "Boy, I've got this idea. Put money in it. We've all done it. And if we just had many years ago said, 'No, not doing it. I'm only investing in publicly traded stocks, and in particular the S and p5 100. We would have been better off to do that than to never do a private investment, you know, where somebody maybe they're they're doing a a limited partnership or that type of thing. So that's another lesson that I wish the younger John Mitchell had learned at an earlier age. So you know, to sort of turn the page, I got another topic I'd I'd like to sort of talk about that I've been thinking about this weekend. So I was actually talking to one of our listeners over the weekend, and she's about 40-eight years old, and and she's sort of been an entrepreneur. She's sort of now going away from it, try to figure out what she's she's doing, and you know one of the things I thought about in terms of you know being successful in life, and and maybe in particularly in the career side, is you've got to create clarity, and obviously our methodology is all about creating clarity. You know exactly the person you want to be, exactly what you want to accomplish and precisely how you can achieve your clearly defined goals. So it's this is this methodology is all about creating immense clarity. And I've come to realize that I think that the average person probably lives their life with about, and I'm spitball spitballing this, but I'd say about 40% clarity. They sort of know the person they want to be, but you know they've never really fleshed it out in in detail with their health. They're probably above 50% They know what they need to do. You know, so in that area they're a little above 50% but then in their business, I think that they're under 50% You
• 13:48
  know, they're not completely clear about what their strategy for success is or what moves the needle. They probably can't succinctly articulate their business plan. But I'm curious, from your standpoint, do you buy that that people probably are have about 40% clarity about their life as a as a general rule?
• 14:12
  Kelly Hatfield: Yeah, I would think so, and and I might even think I don't know in today's maybe that number was five or 10 years ago, but I wonder whether even in today's day and age, it's even less than 40% Only because of how much our attention, of how much attention is stolen, or how much of our attention we give to things outside ourselves, with just you know the developments of technology, social media, you know how we consume news, all of those things. I wonder if we're even more disconnected with ourselves, and therefore have even less clarity than that.
• 14:47
  John Mitchell: Yeah, it would not surprise me. And but that's interesting that you see that it's probably about 40% but it could be be less. And you know, as I was talking to our list. I was thinking about this whole idea about you know creating a nest egg, and and again she's 48 so I can so so relate to what's going on with her. I see that in creating wealth, the first thing you got to do is figure out what your unique talent is. Understand what that is. I see how powerful it is. Like mine is, I take the complex and make it simple. And I saw how that played out throughout my my life. And I discovered it when I was like 28 years old as a CPA. So that's sort of the first thing: is what's your unique talent, and then you got to figure out your why. What you know, we were talking about this the other episode about your personal mission statement and and your your why. Like my why is that I I feel life is so precious and God for whatever reason gave me the ability to figure out the The full secret of the top book in the world on success, and to honor the great life I have, and to play the precious gift of life to my full potential, I need to share this with the world to the best of my ability. Well, you know, I'm that drives me. It's emotional, you know, and so that's the the second thing is you got to understand your why, but you get those two things in terms of clarity. You're well on your way to figuring out how to create that nest egg. You buy that?
• 16:34
  Kelly Hatfield: Yep, I do. And and one tip I have for people because this is hard sometimes, and this is that clarity piece where you're having trouble figuring out what that one thing is about yourself, you know your superpower or whatever. Ask the people who are closest to you that you trust. Hey, you know if you were to describe, you know what you think my superpower is or what my what would you say? Most people, like your closest friends, that kind of thing, will right out of the gate be able to tell you, you know, or start. You'll start to see trends and information shared, you know. But again, it has to be people, you know, that you trust and you know that you feel safe asking that question of and everything. But if you need some direction to kind of start to spur that those juices a little bit, because again, we most of us are not thinking at a very deep level, and so need a little bit of help. That oftentimes can spur that exercise and help you go. Oh, you know what? They're right. That is, you know. And I would go even one step further and say this. Like, so again, it can help prompt some of that if you're having a if you're being challenged by not having a lot of clarity around, you know what you're really good at, what you're intrinsically good at, what that superpower
• 17:52
  John Mitchell: Now I know you have many superpowers, but if you had to nail it down to like the top one, which what would you say?
• 17:59
  Kelly Hatfield: I think it would be my communication skills and and the ability to to make people feel seen and heard.
• 18:07
  John Mitchell: Right. Yeah, I'd agree with that. And share with everybody your why, basically.
• 18:13
  Kelly Hatfield: I think that my why stems back to I'm very very grateful and lucky, you know, to have had a couple of key people in my life that saw me and heard me, and I don't know if I had not had those two people in my life early on in my formative years, what how I would have turned out if I had not had those people in my life, and I understand the just from the feeling of either feeling special or feeling seen and heard, and what that can do in a young person's life, in any person's life-that's all anybody really wants is to feel seen or heard or understood. And so, I think at an early age, and just as I've grown and interacted with so many people in in my business and as team, you know, with with hiring, and I've recognized that oh my gosh, you know there are a lot of people out there that feel invisible, and if I can be that one person where people walk away and are like, man, I feel better just having had had a conversation with her,
• 19:16
  John Mitchell: right?
• 19:17
  Kelly Hatfield: And it's only because they feel like they were heard and seen or understood, then I feel like I'm fulfilling my purpose,
• 19:25
  John Mitchell: right?
• 19:25
  Kelly Hatfield: And just that one thing that if just that one person is like, oh, I feel so much better, then I did my job and what I was put here to do.
• 19:35
  John Mitchell: Right, right. You know, I tell you, I had an interesting experience last week with my class, I was we were talking about this and figuring out their why and doing their personal mission statement, and it made me think about about my why. And I, you know, I some of our audiences heard the story about you know my mom when I was turning 50, she was dying of pancreatic cancer. And every day after work, I go see her, and I'd end up crying my eyes out. And I ultimately, you know, and this goes on like for every night for for six weeks or eight weeks, and it's 45 minutes a night, and it's gut wrenching. And I felt like I was letting my mom down with my life because they had given me all the advantages, and so that was a big part of the why. But the other sort of why component, and I I don't know if I ever told you this, I may have, but you know I lost my best friend at 40. Did I tell you about this?
• 20:38
  Kelly Hatfield: Yeah,
• 20:38
  John Mitchell: And so and of course, I found him after he had died, and I'm holding him in my arms. And you know, I went to high school with him, and he was my best friend. And how devastating that was to to see you know life leave him, and you know, we've grown up together, and it made me appreciate how precious life is, and so you know, getting at your why is so important. And one of the things that I think you'll see-we're going to do this with my class-is once you create your personal mission statement-that that 100 word statement that is the why behind your life, then you you take it and put it in Chat GPT and ask Chat GPT to make it more emotional, and it'll blow you away by what it what it does. And now this is sort of standard procedure in our methodology in the AI algorithm. When it comes down to you know asking people to create their their mission statement, they create it and then they're instructed now to give it to ChatGPT and make it more emotional, and it'll blow you away what you get. It's just really cool.
• 21:57
  Kelly Hatfield: That's awesome. I love that and helping get more emotional because again, if you are not tapped into yourself and this is new to you of of thinking this deeply about your life, I think that's kind of sometimes too what scares people away from sitting and doing because finding the words or finding a way to express that maybe the way you're feeling or identifying exact. So having some of these tools to help you do that is so cool. You know, even if it just ignites sparks and ignites something in you that helps send you, you know, helps give you the words or the, you know, feeling perhaps that you're feeling helps you identify that. I think that that's awesome,
• 22:36
  John Mitchell: Right? You know, you gave me that Dean Graciosi YouTube video where he goes what seven levels deep on asking them why
• 22:45
  Kelly Hatfield: Yeah
• 22:45
  John Mitchell: And and I showed that to my class a whole video you know it took 15 minutes but it was so worth it because you know all of them were coming up with whys that were in their head not in their heart because that's that's the process that's normal, but you know I think now it's interesting in the academic environment. A year or two ago, everybody was afraid of ChatGPT because the perception was students would use it to to cheat on exams, and now the push is to make them use ChatGPT any any chance we get because I see personally that it's literally an extension of my own brain and you know there's a ChatGPT version that can do it all audio you just say it it repeats it back I don't know do you use that version
• 23:41
  Kelly Hatfield: nope I haven't used that version. I just enter all of my prompts in, you know, and I'm taking a couple of classes in AI stuff with understanding, you know, just how specific and intricate you can get with prompts, and it's amazing
• 23:54
  John Mitchell: how it
• 23:55
  Kelly Hatfield: can help. So yeah,
• 23:56
  John Mitchell: yeah, yeah. Well, that's all I have today, and unless you have anything else, I guess we'll see him next time. What do you think?
• 24:05
  Kelly Hatfield: Sounds good. Yep, let's do it. We'll see you next time.
• 24:08
  John Mitchell: Okay. Thanks.