Latest / InvestBetter.™ Podcast / InvestBetter.™ — What does it mean?

Transcript

InvestBetter.™ — What does it mean? · InvestBetter.™ Podcast

• 0:00
  SPEAKER_01: I'm gonna tell you the things that the industry won't tell you.
• 0:02
  SPEAKER_01: The point of this podcast is we're gonna share things with you you've probably never heard from an advisor before, and we wanna wake you up to like, hey, there's a system at play.
• 0:08
  SPEAKER_01: We can be mad at it, or we can just learn how to operate within it.
• 0:11
  SPEAKER_01: The average plan out there, which is I'm gonna go buy mutual funds, put money in my 401k and buy some insurance, and maybe someday get a will, is not gonna serve you very well.
• 0:20
  SPEAKER_01: There was a moment where I'm just like, I know too much now.
• 0:23
  SPEAKER_01: When clients come to my office and I get on the whiteboard and I show them what's possible, over and over again I see this moment of like, why has no one told me this before?
• 0:30
  SPEAKER_01: And so on this podcast, I'm gonna share the best ideas that I give my clients.
• 0:34
  SPEAKER_01: We're gonna bring in experts to unpack really interesting topics.
• 0:37
  SPEAKER_01: Any advisor could sit in a room with somebody and overwhelm them with data.
• 0:40
  SPEAKER_01: The gift is like, hey, I'm gonna take something that's gonna be a little intimidating to start, and I'm gonna show it to you in a way where you're like, that makes sense.
• 0:46
  SPEAKER_01: I coach thousands of advisors across the country and I'm realizing they're not doing this yet.
• 0:49
  SPEAKER_01: The time is now to just start getting out to the world the things we get to say in an office setting that change people's life.
• 1:05
  SPEAKER_01: Man, this is it.
• 1:06
  SPEAKER_01: This is the launch episode of the Invest Better Podcast.
• 1:10
  SPEAKER_01: Wow.
• 1:10
  SPEAKER_01: This has been a year plus in the making.
• 1:12
  SPEAKER_01: I mean, I feel like it's been years.
• 1:14
  SPEAKER_01: Maybe that's how an idea happens.
• 1:18
  SPEAKER_01: Like it kind of falls out, you grab it, you gotta like run with it a little bit, let it mature.
• 1:22
  SPEAKER_05: I mean, we've been chasing, we've been chasing after this thing for some time.
• 1:26
  SPEAKER_05: I mean, it was about a year ago.
• 1:27
  SPEAKER_05: I remember sitting in the conference room at your office, and you dropped that like it was an anvil, and you know, uh and wily coyote chasing, you know, roadrunner.
• 1:39
  SPEAKER_05: You're just like, boom, here it is.
• 1:41
  SPEAKER_05: Yeah.
• 1:41
  SPEAKER_05: And I've thought about it every day since.
• 1:44
  SPEAKER_05: So this is gonna be awesome.
• 1:45
  SPEAKER_05: Love it.
• 1:45
  SPEAKER_05: Sten.
• 1:46
  SPEAKER_01: Yeah, I think the idea when I think we're primed for this now.
• 1:50
  SPEAKER_01: I think there's enough things going on in our world to where people are realizing I thought it was this, but it's actually this.
• 1:56
  SPEAKER_01: And yeah, we're we are we're movie guys, so you know, when I say like the Truman show, I laugh, Jim Carrey's hilarious.
• 2:03
  SPEAKER_01: But in the role, like for somebody to be so unaware, like he's like, This is my world, this is my town.
• 2:09
  SPEAKER_01: And then eventually you realize, like, no, I'm living in a bubble and I'm being watched every day.
• 2:13
  SPEAKER_01: Yeah, it's such an extreme example, but I'm like, I think that is what a lot of us are feeling right now in different parts of our life.
• 2:19
  SPEAKER_01: Like, great book I read, uh good energy book.
• 2:21
  SPEAKER_04: Yeah.
• 2:22
  SPEAKER_01: Where it was like a call-out of the healthcare system, you know, and it's not that the healthcare system's bad and shouldn't exist, but it's living in awareness of like what you're telling me doctors don't learn about nutrition in college.
• 2:33
  SPEAKER_01: Like you're just like, I made all these assumptions of like these systems that are here to protect me and serve me well, and I didn't know enough about like how is it incentivized, who's really making the decisions.
• 2:45
  SPEAKER_01: Uh, you think about social media now, where all of us are kind of waking up to our phones and realizing what started is like, hey, I want to share pictures with my friends, is actually consuming so much of my time and manipulating me to buy and do things, and I didn't even know it was happening.
• 3:01
  SPEAKER_01: And so as an advisor, I think there's an element of I'm just gonna run my business and serve my clients really well.
• 3:07
  SPEAKER_01: And then there was a moment where I'm just like, I know too much now by being in the system and trying to fight the system on my own, to where like the purpose of this podcast is like if you are listening, I'm gonna tell you the things that the industry won't tell you.
• 3:22
  SPEAKER_01: And not that it's because there's a group of 10 people sitting in a room like taking over the world, but the system has has kind of run away to where it's like, how do we make money while helping people?
• 3:32
  SPEAKER_01: But if your financial plan is made up of products you've bought over time from people, that's something I say to people, and it does not feel proactive, creative, strategic, there's a chance the person that's helping you run that is maybe not incentivized the right way.
• 3:47
  SPEAKER_01: And so the point of this podcast is we're gonna share things with you probably never heard from an advisor before.
• 3:51
  SPEAKER_01: Yeah.
• 3:51
  SPEAKER_01: Maybe you've been scared to ever have an advisor, and we want to wake you up to like, hey, there's a system at play.
• 3:57
  SPEAKER_01: We can be mad at it, or we can just learn how to operate within it.
• 4:01
  SPEAKER_05: I've heard you say you're in a cave and you don't even know it.
• 4:04
  SPEAKER_03: Yeah.
• 4:05
  SPEAKER_05: Okay.
• 4:05
  SPEAKER_05: And and so, you know, for a lot of folks, right?
• 4:08
  SPEAKER_05: You're talking about Truman's show.
• 4:09
  SPEAKER_05: So I was thinking of The Matrix.
• 4:11
  SPEAKER_05: And I was thinking of Neo waking up for the first time, and then he gets aboard the Nebuchadnezzar, the the craft, and um, you know, they're kind of trying to revive him, but it's kind of interesting, he's he's being birthed for the first time, you know, and and he makes this comment about his eyes hurting, and Morpheus says, It's because you've never used them before.
• 4:35
  SPEAKER_05: Whoa.
• 4:36
  SPEAKER_05: And so I think that there's an element to the folks watching where you might actually feel some strain.
• 4:42
  SPEAKER_05: Oh, yeah.
• 4:43
  SPEAKER_05: Because there's some muscles that you're gonna get introduced here that you're gonna start using for the first time.
• 4:47
  SPEAKER_05: As in, like, wow, that's what it means to use that equipment at the gym.
• 4:52
  SPEAKER_05: I didn't know, I didn't know that the lat muscles would actually hurt like that.
• 4:58
  SPEAKER_05: Oh, yeah.
• 4:59
  SPEAKER_05: And so it's there's an element of like you're gonna use muscles that you haven't used before.
• 5:04
  SPEAKER_05: So, you know, a word to the wise here, Sten.
• 5:07
  SPEAKER_05: What are some ways that folks can kind of prepare themselves for what we're about to get into with Invest Better?
• 5:14
  SPEAKER_01: Yeah, my mind goes to like we're not going full prepper here.
• 5:17
  SPEAKER_01: Um, I love a good conspiracy theory podcast.
• 5:20
  SPEAKER_01: And um I think at the end of the day, all of us need to operate well at home.
• 5:25
  SPEAKER_01: You know, like we we have so much to worry about.
• 5:27
  SPEAKER_01: I don't want to come and just drop a grenade and say, like, everything you think is true is not.
• 5:32
  SPEAKER_01: Uh but I do believe I want I want to tap into a desire in everyone watching to where it's like it feels like other people know something I don't.
• 5:42
  SPEAKER_01: Um you're probably overpaying on taxes and you don't even know it because it's a complicated system and like the people that know how to operate it pay less tax, and you may feel at times like, I don't even have the time and energy to find the right person to help me.
• 5:55
  SPEAKER_01: And we will help you with that.
• 5:56
  SPEAKER_01: You know, we're not gonna give you directly financial advice.
• 5:59
  SPEAKER_01: I need to know more about your situation, but I will share things with you on this podcast that are fully true, and then you have to say, okay, what does it look like to weave that into my plan in a healthy way?
• 6:09
  SPEAKER_01: And you won't be able to overhaul everything overnight.
• 6:11
  SPEAKER_01: But if what we can give, if the gift of this podcast is awareness to people, like, man, there are small things you can change in your plan that'll have a major impact, and you can no longer abdicate your financial plan fully.
• 6:25
  SPEAKER_01: I don't want you to go get your CFP or become an accountant, like we're not taking it that far.
• 6:30
  SPEAKER_01: But there's a layer of responsibility of saying, okay, I need to ask questions, I need to know where to go to get good information.
• 6:36
  SPEAKER_01: That the average plan out there, which is I'm gonna go buy mutual funds, put money in my 401k, and buy some insurance, and maybe someday get a will, is not gonna serve you very well.
• 6:45
  SPEAKER_04: Yeah.
• 6:46
  SPEAKER_01: There are people along the way that'll make money by helping you with that, but when clients come to my office and I get on the whiteboard and I show them what's possible, over and over again I see this moment of like, why has no one told me this before?
• 6:59
  SPEAKER_01: And so we will help wake you up in a healthy way and hopefully fall short of that line of like totally, you know, putting you into existential crisis.
• 7:08
  SPEAKER_01: There's not there's enough podcasts doing that.
• 7:11
  SPEAKER_05: We don't want to cause people to, you know, skip a beat with their with their ticker here, right?
• 7:18
  SPEAKER_05: Um that there is there is some comfort that comes with knowing, oh, there is someone that's kind of looking out for me.
• 7:25
  SPEAKER_05: That the message to to folks listening here is that um uh Sten has seen kind of what's happening.
• 7:33
  SPEAKER_05: It's like you remember that Chipotle uh uh short film that I showed the scarecrow.
• 7:40
  SPEAKER_05: And he's in the Emerald City, and it used to be this utopia and the shining beacon of innovation, and it's very dark, and all these like robots and things don't want you to see what's happening behind the scenes, how they're mistreating animals and and the and the power and the manipulation, and it's very dark and it's very sad, right?
• 8:03
  SPEAKER_05: Um that you know, without getting too cinematic or whatever, there are some things that we need to be aware of.
• 8:10
  SPEAKER_01: And I think you get to choose.
• 8:11
  SPEAKER_01: I'm either gonna stay fully unaware, and I think some people are there and they don't even know it.
• 8:17
  SPEAKER_01: I think in today's world, like there's enough information floating around that we bump into where we're like, okay, I'll I'll admit that I don't know enough.
• 8:26
  SPEAKER_01: But you can also just fully abdicate it to where you're like, oh, I have a person that handles that.
• 8:30
  SPEAKER_01: And over and over again, I'm like, they probably aren't doing what you think they're doing.
• 8:35
  SPEAKER_01: One because they never agreed to it.
• 8:36
  SPEAKER_01: Like if you have a CPA and you think you have a financial advisor, that's just not true.
• 8:39
  SPEAKER_01: Uh, if you have a financial advisor and they work at an insurance company, that's probably what they focus on.
• 8:44
  SPEAKER_01: You know, if your advisor only works at a firm that manages money and that's the only way they get paid, it doesn't mean all those people are not doing the right thing.
• 8:50
  SPEAKER_01: It just means no one is holding everyone to account to the best possible outcome.
• 8:56
  SPEAKER_01: And so for me being an advisor now for almost 20 years, yeah, there's something inside of me when I started in the insurance industry where I was like, man, this I don't know if I'd be a good client for this type of advisor.
• 9:06
  SPEAKER_01: Because like, there's no way insurance is always the solution to the problem.
• 9:10
  SPEAKER_01: And I I wasn't telling the client that, and I didn't believe that, but it was the only thing I had to offer them was like more insurance.
• 9:17
  SPEAKER_01: And so I went over and I said, Well, it's I'm just gonna do investments.
• 9:20
  SPEAKER_01: Like, I'm just gonna work at a big firm, we're gonna manage hundreds of millions of dollars, it's gonna be great.
• 9:24
  SPEAKER_03: Yeah.
• 9:24
  SPEAKER_01: But then at that firm, I was like, wait, the only thing we're doing is prescribing investments for clients.
• 9:30
  SPEAKER_01: Investments are great, people need that.
• 9:33
  SPEAKER_01: But as soon as I found myself sitting with a business owner, a real estate investor, and people were trying to do really good things with their money, and I was like, that's fine, but what about this?
• 9:43
  SPEAKER_01: And I felt like I was always steering them to something else, versus like, hey, if that's what you really want to do, as a financial advisor, my job is to help you do that the best possible way.
• 9:54
  SPEAKER_01: That what if, in order to be fully transparent, to put financial advisor on my card, I can't have one product to sell people, or I need to put on my card insurance salesperson or mutual fund salesperson.
• 10:08
  SPEAKER_01: Yeah, like that's the true title.
• 10:10
  SPEAKER_01: And I think you know, I get to speak around the industry and coach a lot of advisors too.
• 10:14
  SPEAKER_01: And I think a lot of us get frustrated at that because we do feel this immediate defensiveness because we kind of know it's true.
• 10:20
  SPEAKER_01: That my hope, and I think this is where we're trying to push the industry, is that it should be an advice-based system.
• 10:26
  SPEAKER_01: Yes, products are important along the way, but I think that the it's flipped now where it's like I need you to buy something from me first in order for me to be able to afford to then give you good ideas.
• 10:36
  SPEAKER_04: Uh-huh.
• 10:37
  SPEAKER_01: And that needs to change.
• 10:40
  SPEAKER_05: Well, perhaps this would be a pathway, right?
• 10:43
  SPEAKER_05: For for that.
• 10:43
  SPEAKER_01: And I'll say even now, my goal is not I have friends at all firms around the country, so many financial advisors doing great work.
• 10:49
  SPEAKER_01: Yes.
• 10:50
  SPEAKER_01: But there's an element of like doing it long enough and seeing it enough to your point to where I'm like, okay, I think it's time we talk about it.
• 10:57
  SPEAKER_05: Yeah.
• 10:58
  SPEAKER_01: And and I and the hope is to, I think, reinforce for everybody listening when you have that feeling, when you're like, I think I don't know the rules to the game I'm playing.
• 11:06
  SPEAKER_01: Or it feels like there's a special group of people that that get to know the rules and I don't.
• 11:10
  SPEAKER_01: I just have to kind of grind it out and do the best I can.
• 11:12
  SPEAKER_01: We work with a lot of business owners and they're so busy trying to like change the world, and consistently they get news from their CPA or somebody else, they're like, wait, no, no one told me that.
• 11:23
  SPEAKER_01: Yeah.
• 11:24
  SPEAKER_01: And I think there's just this hunger for just really clean financial strategy and less sales.
• 11:32
  SPEAKER_01: No, nobody likes to feel sold.
• 11:33
  SPEAKER_01: And if you're listening to this now and you're like, yeah, every time I meet my advisor, they tell me the same thing as the solution to my problem, and you don't feel like you're playing as creative and strategic.
• 11:40
  SPEAKER_01: There, that is possible.
• 11:42
  SPEAKER_01: Yeah.
• 11:42
  SPEAKER_01: You just have to figure out like, is the team not complete?
• 11:45
  SPEAKER_01: Are the right players not on the team?
• 11:47
  SPEAKER_01: And so on this podcast, I'm going to share the best ideas that I give my clients.
• 11:51
  SPEAKER_01: We're going to bring in experts to unpack really interesting topics.
• 11:54
  SPEAKER_01: And our goal is to be super generous with that stuff.
• 11:57
  SPEAKER_00: Yeah.
• 11:57
  SPEAKER_01: You can then take that information back, decide do I want to implement it on my own?
• 12:01
  SPEAKER_01: Do I need to find somebody to help me out to implement it?
• 12:03
  SPEAKER_04: Yeah.
• 12:03
  SPEAKER_01: But just the piece, just awareness in and of itself, I think, is a gift that I've gotten from people on the healthcare side, on different parts of my life.
• 12:11
  SPEAKER_01: And I'm like, wait, this is my superpower.
• 12:13
  SPEAKER_01: Like in this sphere that I've operated in, that I've now seen as I bounced around different firms.
• 12:18
  SPEAKER_01: Because when I was a young advisor and I started insurance, I was like, I don't want to be this type of advisor.
• 12:22
  SPEAKER_01: And I didn't even know there was a lot of different types of advisors.
• 12:24
  SPEAKER_01: When I started as an advisor, I was like, we all do the same thing.
• 12:27
  SPEAKER_02: Yeah.
• 12:27
  SPEAKER_01: Right.
• 12:28
  SPEAKER_01: And I was like, oh no, that advisor sells insurance.
• 12:30
  SPEAKER_01: Okay.
• 12:31
  SPEAKER_01: I'm going to go over here and manage investments.
• 12:33
  SPEAKER_01: And I was like, wait, all we're doing is managing investments.
• 12:35
  SPEAKER_01: And then eventually I had to start my own firm to say, okay, we're going to do financial strategy, financial planning.
• 12:40
  SPEAKER_01: Man, but we're also really good at managing investments.
• 12:42
  SPEAKER_01: And if our clients need help on insurance, we can help, we can find people to help with that too.
• 12:46
  SPEAKER_01: And it wasn't until I built that model in that firm that I was like, okay, this feels good.
• 12:51
  SPEAKER_01: Like this feels like the kind of firm that I would come to.
• 12:54
  SPEAKER_01: And I wouldn't frustrate them because I keep asking, like, why do you always try to tell me to buy a mutual fund?
• 12:59
  SPEAKER_01: You know, I'd push back enough that eventually, and this is true for a lot of business owners too, like advisors get frustrated with them.
• 13:04
  SPEAKER_01: It's like, just do what I'm telling you to do.
• 13:07
  SPEAKER_01: I don't want to have hard conversations with you.
• 13:08
  SPEAKER_01: I don't want you to look behind the curtain on what we're making back there.
• 13:12
  SPEAKER_01: And and I know I think most people, this is similar to the healthcare industry, like we just want to trust that it's doing the best thing for us because we don't even know what questions to ask.
• 13:21
  SPEAKER_01: And I know for me it was really hard when I realized, like, oh, that's not happening to the extent I want to.
• 13:27
  SPEAKER_01: I want it to.
• 13:28
  SPEAKER_01: And that's the same when it comes to financial advice in our country and maybe world, whether it's banks, advisors, insurance companies, like all of them are trying to make money, and you know, a lot of advisors are trying to win trips and hit award tiers.
• 13:41
  SPEAKER_01: And I'm like, there's enough of that conflict floating around that as a consumer, if you're aware of it and can ask the right questions, you can reduce how much it impacts you.
• 13:53
  SPEAKER_05: There's a question, we've talked a lot about this, and we gotta give a shout out to Simon Sinek on this.
• 13:59
  SPEAKER_05: You gotta lead with why.
• 14:00
  SPEAKER_02: Yeah.
• 14:00
  SPEAKER_05: Okay.
• 14:01
  SPEAKER_05: And so why invest better?
• 14:03
  SPEAKER_05: Invest better, one word with a period at the end.
• 14:07
  SPEAKER_05: All right.
• 14:08
  SPEAKER_05: Why invest better, Sten?
• 14:11
  SPEAKER_01: I know when I hear that term now for us, it means so much because we've put so much time and thought into this, like what it means.
• 14:19
  SPEAKER_01: My hope is very quickly people realize like, man, this is a powerful movement.
• 14:23
  SPEAKER_01: Like it's it's it's it's a call out, but it's also a call up.
• 14:27
  SPEAKER_01: And and I feel comfortable being in this position because I've been a very successful advisor, run my own practice, but then spent years also speaking and coaching to other advisors to I realize like they're looking for this too.
• 14:37
  SPEAKER_01: Like the industry is open to a change.
• 14:40
  SPEAKER_01: It's just sometimes the the machine will fight to survive at the end of the day.
• 14:44
  SPEAKER_01: It's like don't change it.
• 14:46
  SPEAKER_01: And so that change can take time, it can be uncomfortable at times.
• 14:49
  SPEAKER_01: But I do see behind the scenes because now I get to coach advisors, it's really big firms.
• 14:54
  SPEAKER_01: I get to talk to leaders of some really large firms that like they see it going this way.
• 14:58
  SPEAKER_01: I just wish it was happening faster.
• 15:01
  SPEAKER_01: So the the invest better piece of it is that the industry would get people to feel, man, it is so generous that at times advisors are giving the advice that doesn't help them.
• 15:11
  SPEAKER_01: This is what we're supposed to do, but it's what's best for the client.
• 15:13
  SPEAKER_01: Even if that means a client says, I want to buy real estate, it's always been my dream to have a lake house or a beach house, whatever it is.
• 15:19
  SPEAKER_01: Yeah.
• 15:19
  SPEAKER_01: And if their advisor responds by saying, Hey, sounds good, but you should put your money in this mutual fund versus I love that, let's come up with a plan for it.
• 15:27
  SPEAKER_01: So you're you're not reckless with your finances living in the moment, but you have a voice of reason in there.
• 15:32
  SPEAKER_01: And so my if invest better will be the voice of reason.
• 15:35
  SPEAKER_01: It'll it'll have some edge to it because we're gonna say some stuff and call some stuff out that's just not true, or you know that people are out there trying to make money giving subpar advice.
• 15:44
  SPEAKER_01: Like I we will be honest with you in that.
• 15:46
  SPEAKER_01: But at the end of the day, it's like, hey, I know where I can go to just get my curiosity peaked and keep the awareness alive.
• 15:54
  SPEAKER_01: So we never again fall asleep to the forces that are acting on us.
• 16:00
  SPEAKER_01: And that that's the role we're gonna play.
• 16:02
  SPEAKER_05: Why you?
• 16:04
  SPEAKER_05: Sten, there's a lot of there's a lot of very successful, very bright thought leaders, entrepreneurs.
• 16:12
  SPEAKER_05: Uh, they they have a lot of miles under their belt.
• 16:15
  SPEAKER_05: Yeah, they built some companies, they sold some companies, they've made some poor investment decisions, they made some good investment decisions.
• 16:22
  SPEAKER_05: But why Sten Morgan uh for this invest better vision and mission right now?
• 16:30
  SPEAKER_01: Yeah, the idea had didn't come to me 10 years ago.
• 16:33
  SPEAKER_01: You know, I think there was an element where I'm just like in the moment, grinding out, growing my business.
• 16:37
  SPEAKER_01: I have a lot to prove to myself and other people.
• 16:39
  SPEAKER_01: Um and I think when the time is right, you know, that like the opportunity comes.
• 16:44
  SPEAKER_01: And and I could have done it sooner.
• 16:45
  SPEAKER_01: I think there was an element where I would have wanted to for the wrong reasons.
• 16:48
  SPEAKER_01: I think it's like, oh, is this for business development or marketing of some kind?
• 16:53
  SPEAKER_01: But after being in the business and getting to a point now to where people look at us from an advisor standpoint and they're like, hey, will you coach us?
• 16:59
  SPEAKER_01: Will you tell us what to do?
• 17:00
  SPEAKER_01: And so there's an element of like a lot of people are saying, Hey Stan, how do I become a better advisor?
• 17:05
  SPEAKER_01: And we get to spend time helping people with that.
• 17:08
  SPEAKER_01: But then as an active advisor with my own book of business, I get to see day in and day out when I'm on a whiteboard with a client and they're like, I wish I heard this sooner.
• 17:19
  SPEAKER_01: Why hasn't anybody told me this before?
• 17:22
  SPEAKER_01: And so we've also had practice with podcasts and creating content, and that would have been something that scared me in the past.
• 17:29
  SPEAKER_01: And I used to not be the best communicator, and I've been able to work on that a lot.
• 17:32
  SPEAKER_01: And so I think there's a lot of things to your point where it's like the time is now, and there's always so many reasons not to.
• 17:38
  SPEAKER_01: Great quote.
• 17:39
  SPEAKER_01: Like if you're always if you're waiting for the perfect conditions to do something before you do it, those will never come.
• 17:44
  SPEAKER_01: And so for us, it's like the time is now to just start getting out to the world the things we get to say in an office setting that change people's life.
• 17:52
  SPEAKER_01: And now, because I coach thousands of advisors across the country and I'm realizing they're not doing this yet, it's like okay, part of us playing a small part in that change is getting this message out to more people.
• 18:06
  SPEAKER_05: Awesome.
• 18:07
  SPEAKER_05: Well, let's give folks a taste.
• 18:09
  SPEAKER_05: Let's do it, shall we?
• 18:10
  SPEAKER_05: Yeah.
• 18:11
  SPEAKER_05: So bring us into this is one of the kind of milestone um uh you know, concepts, teachings that you have when you work with your clients.
• 18:23
  SPEAKER_05: Yep.
• 18:24
  SPEAKER_05: And so uh our are folks listening right now, watching this podcast, they're gonna get to kind of come into the room, yeah, so to speak.
• 18:31
  SPEAKER_05: So kind of bring us into that.
• 18:32
  SPEAKER_05: You bet.
• 18:33
  SPEAKER_01: So there's a fear among advisors that if you give your best stuff away, somebody's gonna take it and implement it themselves, and then you'll lose out on the client.
• 18:40
  SPEAKER_01: I've found that is not true.
• 18:42
  SPEAKER_01: If you can lead with ideas and be generous, most likely people are gonna be like, oh, I think you probably have more of that to offer.
• 18:49
  SPEAKER_01: And so part of our firm is like if you ever get in a room with us for 45 minutes or an hour, I will blow your mind.
• 18:56
  SPEAKER_01: Because I just know the things that you probably don't know, and we've practiced a lot on how I can communicate it.
• 19:00
  SPEAKER_01: I think simplicity is a gift.
• 19:02
  SPEAKER_01: Any advisor could sit in a room with somebody and overwhelm them with data.
• 19:06
  SPEAKER_01: The gift is like, hey, I'm gonna take something that's gonna be a little intimidating to start, and I'm gonna show it to you in a way where you're like, that makes sense.
• 19:13
  SPEAKER_01: And I see how that actually benefits me.
• 19:16
  SPEAKER_01: And so, as we've done this over and over again, one concept that kept landing, and I think it was a gift that I could give somebody, like if you meet with me and even if you don't become a client, I want you to leave changed in some way.
• 19:29
  SPEAKER_01: I want to wake you up to something and give you like a practical tool.
• 19:32
  SPEAKER_01: And so, one we use all the time with our clients is called the investment decision filter.
• 19:36
  SPEAKER_01: And this came out of the idea of like, what if I was able to live in your head a little bit, even when I couldn't be with you all the time?
• 19:43
  SPEAKER_01: Like, what's a what's a framework I can give you?
• 19:46
  SPEAKER_01: And so, for everybody listening, this is something before you make an investment decision from this day forward, you need to have a process.
• 19:52
  SPEAKER_01: I work with a lot of clients, whether they're doctors or lawyers or business owners, every single one of them has a story where they're like, I shouldn't have done that.
• 20:02
  SPEAKER_01: I put money into that thing that sounded good, but I didn't really know what I was doing.
• 20:05
  SPEAKER_01: I wish I wouldn't have done it.
• 20:08
  SPEAKER_01: So to make good investment decisions, you have to pause.
• 20:10
  SPEAKER_01: Like there has to be some process in place.
• 20:12
  SPEAKER_01: You don't live in fear and not take action because usually great opportunities don't hang around for too long.
• 20:19
  SPEAKER_01: But if you can go through these four filters before you ever make an investment choice, you will make better investment choices.
• 20:25
  SPEAKER_01: So the first one is risk.
• 20:27
  SPEAKER_01: Most people do not understand what their risk tolerance truly is.
• 20:30
  SPEAKER_01: We all have a bias to where we put more hope and expectation on the upside.
• 20:35
  SPEAKER_01: Like we're a little too optimistic sometimes.
• 20:37
  SPEAKER_01: And we're like, oh, this thing's gonna be great, this is gonna work out great.
• 20:40
  SPEAKER_01: And we don't pause to say, okay, what is going to be required for this to be great?
• 20:44
  SPEAKER_01: What's my experience gonna be?
• 20:47
  SPEAKER_01: It usually takes a third party to sit with you to ask the questions to truly understand, like, am I an aggressive investor?
• 20:53
  SPEAKER_01: Well, most of us want the outcome of an aggressive aggressive investment, but if we can't tolerate the experience and we're gonna bail before the outcome happens, it would have been better if you never started in the first place.
• 21:05
  SPEAKER_01: So you need to understand what is the level of risk associated with this investment and doesn't match my risk tolerance.
• 21:12
  SPEAKER_01: There's a term called asymmetric risk.
• 21:15
  SPEAKER_01: And this is where the outcome should be higher probability of being in your favor than not being in your favor.
• 21:21
  SPEAKER_01: If an investment came to you and you're like, hey, it's a 50-50, it's like, well, you're gambling.
• 21:25
  SPEAKER_01: You should know enough about that investment and the people running it that you can say, no, there's a higher probability this ends up well that it ends up going poorly.
• 21:33
  SPEAKER_01: So that's the first filter.
• 21:35
  SPEAKER_01: The next filter is performance.
• 21:37
  SPEAKER_01: How much do you know about the potential upside of this investment?
• 21:42
  SPEAKER_01: Are you basing it off of what your buddy said in the break room?
• 21:45
  SPEAKER_01: Or have you truly asked the right questions and compared it to other investments?
• 21:49
  SPEAKER_01: If you buy certain stocks, you can look at the track record and say, wow, this industry has done really well, and this stock has been one of the best in that industry for a long time.
• 21:57
  SPEAKER_01: So there's something about that company.
• 22:00
  SPEAKER_01: Wait, is that is the same person leading that company that used to?
• 22:03
  SPEAKER_01: There was a Fidelity Magellan fund back in the day.
• 22:06
  SPEAKER_01: It was one of the top performing mutual funds for a long time.
• 22:09
  SPEAKER_01: Then the money manager, the person making most of his decisions, left.
• 22:14
  SPEAKER_01: Oh wow.
• 22:14
  SPEAKER_01: Do you think that Fidelity like put out a press release right away and said, hey, he left?
• 22:18
  SPEAKER_01: No way.
• 22:19
  SPEAKER_01: They were like, no, it's the Magellan fund.
• 22:21
  SPEAKER_01: It's the Magellan fund.
• 22:22
  SPEAKER_01: And you should have known, like, no, the person that was responsible for a lot of those results is now no longer available.
• 22:27
  SPEAKER_01: I should be aware of like not what past returns have been, but I should be more concerned about where do I think this thing is going.
• 22:34
  SPEAKER_01: So the risk performance relationship is really important.
• 22:36
  SPEAKER_01: Typically, the more risk you take, the higher the performance should be.
• 22:39
  SPEAKER_01: But that's not always the case.
• 22:41
  SPEAKER_01: So if it passes your risk filter and you say, okay, I understand this enough to know that it matches my risk tolerance.
• 22:47
  SPEAKER_01: I understand the performance upside here because most people don't want to do good things.
• 22:51
  SPEAKER_01: You need to do great things.
• 22:53
  SPEAKER_01: Your plan probably won't do great if you're making 3% to 6% a year when inflation is 3% to 6% a year.
• 22:59
  SPEAKER_01: You need to really get some good returns.
• 23:01
  SPEAKER_01: Then it's time.
• 23:03
  SPEAKER_01: So risk, performance, then time.
• 23:05
  SPEAKER_01: I see people running this all the time.
• 23:07
  SPEAKER_01: They get into an investment and they don't realize how much of their time it's going to take in order to be successful.
• 23:13
  SPEAKER_01: I see this with starting businesses.
• 23:14
  SPEAKER_01: I see this with real estate.
• 23:16
  SPEAKER_01: The idea is great.
• 23:17
  SPEAKER_01: There's definitely potential there, but if it requires more of you than you have to offer, you need to know that up front.
• 23:24
  SPEAKER_01: And just say, that's a great idea.
• 23:25
  SPEAKER_01: I'm going to set it aside.
• 23:26
  SPEAKER_01: But until it can have all of me, the chances of being successful are really low.
• 23:31
  SPEAKER_01: And then the final one is fees.
• 23:33
  SPEAKER_01: I don't think the cost of something should drive your decision.
• 23:36
  SPEAKER_01: I think there's a lot of fee sensitivity in today's world.
• 23:39
  SPEAKER_01: But the saying of fees are an issue in the absence of value is fully true.
• 23:45
  SPEAKER_01: Most people I talk to is like, would you pay 2% a year?
• 23:48
  SPEAKER_01: This is like hedge funds will at times charge 2% a year if they make you 30% a year.
• 23:53
  SPEAKER_01: Most people would say that sounds pretty good.
• 23:55
  SPEAKER_01: Would you pay 1% if they're going to make you 3%?
• 23:58
  SPEAKER_01: At some point you might be saying, like, that doesn't feel as good.
• 24:01
  SPEAKER_01: So we can't avoid fees.
• 24:03
  SPEAKER_01: Everybody has to get paid for something.
• 24:05
  SPEAKER_01: But there's also a reason that filter is last.
• 24:08
  SPEAKER_01: It's not first.
• 24:09
  unknown: Yeah.
• 24:09
  SPEAKER_01: Like if the risk matches, the performance is there, and the time is like, no, it doesn't actually require any of my time to be successful.
• 24:16
  SPEAKER_01: Great.
• 24:16
  SPEAKER_01: And then the fees are like just live in awareness of what you're paying for something, but don't let that dictate your decision.
• 24:23
  SPEAKER_01: So for everybody listening now, if from this day forward, before you invest in a stock, your buddy's business, a real estate transaction, stop and do take 10 minutes.
• 24:34
  SPEAKER_01: Yeah.
• 24:35
  SPEAKER_01: Write each filter down and sit in each category and say, Am I aware and educated?
• 24:40
  SPEAKER_01: The alternative is that you're going into something reckless that could affect your family.
• 24:46
  SPEAKER_01: I've seen people get into day trading, options trading, because it sounds so good and they saw a course online and they lose half their retirement.
• 24:54
  SPEAKER_01: And I think the the emotion I get to experience from people when they have like the regret of why did I do that?
• 25:02
  SPEAKER_01: I just had a client say they lost over$200,000 in a bank stock because somebody said, Man, this is a sure thing, this bank's gonna sell and flip.
• 25:09
  SPEAKER_01: And I was like, hey man, like just you sure?
• 25:12
  SPEAKER_01: You know?
• 25:13
  SPEAKER_01: But to him, he's like, I got some cash, it's kind of burnt a hole in my pocket, I'm gonna throw it in there.
• 25:17
  SPEAKER_01: The 200 something thousand is now worth$9,000.
• 25:20
  SPEAKER_03: Oof.
• 25:21
  SPEAKER_01: And you're gonna take swings sometimes and it's not always gonna work out.
• 25:24
  SPEAKER_01: There's people that start businesses, like, and it's like you you gotta take on some risk.
• 25:29
  SPEAKER_01: I think where the regret comes from is when we recognize that we were reckless in it.
• 25:34
  SPEAKER_01: And I've even had those things where I start a business really quick with somebody because it's a great idea, and I did not stop to think how much money is this gonna need?
• 25:40
  SPEAKER_01: How many people are we gonna hire?
• 25:41
  SPEAKER_01: Like, what is truly the risk of this venture versus just living off of pure excitement?
• 25:46
  SPEAKER_01: And so the investment decision filter is a process we give people.
• 25:50
  SPEAKER_01: Even in the first meeting, if you were to come sit in my office, I would use that as a framework.
• 25:54
  SPEAKER_01: So my hope is if I never see you again, that framework lives in your head.
• 25:59
  SPEAKER_05: Let's get a real scenario here.
• 26:01
  SPEAKER_05: Yeah.
• 26:01
  SPEAKER_05: Right.
• 26:02
  SPEAKER_05: Um, and so that we can walk through this, and and this might even be the time where folks that are watching and listening to this kind of go through the exercise with us right now.
• 26:12
  SPEAKER_05: Sure.
• 26:13
  SPEAKER_05: So you're presented with an opportunity, you know, I've got an opportunity, somebody approaches me uh uh about you know investing into the startup.
• 26:23
  SPEAKER_05: Sure.
• 26:23
  SPEAKER_05: Okay.
• 26:24
  SPEAKER_05: Um that's a that's a big thing.
• 26:27
  SPEAKER_05: It's very exciting.
• 26:28
  SPEAKER_05: Yep.
• 26:28
  SPEAKER_05: Um, I've been presented over the years with, you know, uh over a hundred different startup opportunities.
• 26:35
  SPEAKER_05: And um, you know, the question is how many of them uh should have ever become an actual business?
• 26:43
  SPEAKER_05: Yeah.
• 26:43
  SPEAKER_05: And the answer is uh 0% of them.
• 26:48
  SPEAKER_05: Um there wasn't even one.
• 26:49
  SPEAKER_01: There wasn't one unicorn in there?
• 26:51
  SPEAKER_05: And the re and really ultimately it came down to there was just no financial literacy.
• 26:56
  SPEAKER_03: That's fair.
• 26:57
  SPEAKER_05: Yeah.
• 26:57
  SPEAKER_05: There was no, can I can I use a term uh here, maybe I'm making it up, investment English.
• 27:03
  SPEAKER_00: Sure.
• 27:03
  SPEAKER_05: Okay.
• 27:04
  SPEAKER_05: There was no invest better English in those conversations.
• 27:07
  SPEAKER_05: And so the it was all idea and it was all vision, and it was very exciting, and the story was really exciting, the product was interesting, all of these things.
• 27:17
  SPEAKER_05: But when you got into the dollars and cents of it all, it was like this is really not a good investment.
• 27:23
  SPEAKER_02: Yeah.
• 27:23
  SPEAKER_05: And so kind of if we were to walk through this idea framework here, I'm presented with an opportunity to invest in a business.
• 27:31
  SPEAKER_05: Yeah.
• 27:32
  SPEAKER_05: Okay.
• 27:32
  SPEAKER_05: So let's walk through that.
• 27:34
  SPEAKER_05: Sure.
• 27:35
  SPEAKER_05: The r you know the risk.
• 27:36
  SPEAKER_05: Starting with the risk.
• 27:37
  SPEAKER_01: Yeah, as I heard you explaining it that way, this is I've seen so many reps of this with clients.
• 27:41
  SPEAKER_01: And so I have a pretty good instinct of let's get a lay of the land.
• 27:45
  SPEAKER_01: And what's what's tough is most of the time you'll get pushback.
• 27:49
  SPEAKER_01: Like you don't want to be the kind of the killjoy of people's great ideas.
• 27:52
  SPEAKER_01: So if every time somebody brings you something, you shoot it down, that's probably not the advisor they want to bring their ideas to.
• 27:57
  SPEAKER_01: And so I will get up on the whiteboard and say, okay, let's flush this out together.
• 28:00
  SPEAKER_01: Let's have this kind of live strategy session.
• 28:03
  SPEAKER_01: Whether you're buying real estate with somebody, whether you're starting a business, or if you're investing money through somebody like our firm, part of the risk conversation is the personnel.
• 28:14
  SPEAKER_01: And most of the businesses I see fail is not because it wasn't a good idea, it's because the person that was in charge of executing wasn't good at their job.
• 28:23
  SPEAKER_01: I've seen people go into her, it's like, oh, I got a buddy who wants to flip homes.
• 28:26
  SPEAKER_01: They're just asking me to put money into it and he's gonna manage the whole project.
• 28:28
  SPEAKER_01: I'm okay.
• 28:29
  SPEAKER_01: How many rehab flips has that person done successfully in the last five years?
• 28:35
  SPEAKER_01: Well, none yet, but man, he's gonna give it everything he's got.
• 28:39
  SPEAKER_01: Okay, like they may be pretty optimistic, they could pull it off, but like that is much riskier than if you're like, no, this person has done 50 of these successfully.
• 28:47
  SPEAKER_01: I'm like, okay, we can de-risk it by knowing the right people are in charge.
• 28:51
  SPEAKER_01: If you said, hey, I'm working with this advisor, I'd say, okay, what is your goal?
• 28:54
  SPEAKER_01: I want to just save money and I want my money to grow more than the average investment could.
• 29:00
  SPEAKER_01: Okay, show me their portfolio.
• 29:02
  SPEAKER_01: And really quickly, I could say, no, they're pretty much owning the same things as you could own through Vanguard for half the cost.
• 29:08
  SPEAKER_01: That feels riskier because you're not getting really rewarded for the higher fee you're paying.
• 29:12
  SPEAKER_01: And then if it's with a business, and this I see this all the time, and a story comes to mind with a client to where he had been a W-2 employee his whole life, and his wife had inherited some money.
• 29:25
  SPEAKER_01: Um, and it was about a million bucks.
• 29:28
  SPEAKER_01: And the their goal or their dream, his idea was like, I'm gonna use that money and go start a business.
• 29:34
  SPEAKER_01: And I was a younger advisor at the time, and so I've gotten better at like how I can sit in the tension with somebody and be a little more direct without, again, it's their money, they're gonna do what they want.
• 29:43
  SPEAKER_01: But at the time I was like, but you've never done this before.
• 29:46
  SPEAKER_01: And a lot of times the reason people start a business is so they could eventually have a million dollars in the bank.
• 29:51
  SPEAKER_01: So you're gonna spend your million dollars to then start a business with all the risk to probably eventually hopefully make a million dollars to have in the bank, but we have no idea or clear path to that because you've never done it.
• 30:02
  SPEAKER_01: He ended up doing it, starting a business, it failed, and they lost everything.
• 30:06
  SPEAKER_01: And I look back at that and I'm like, could I have been a little more direct?
• 30:10
  SPEAKER_01: Maybe, but it's hard for somebody to hear, like, hey, you do not have the tools to do this.
• 30:15
  SPEAKER_01: This is reckless.
• 30:17
  SPEAKER_01: You haven't showed me a business plan.
• 30:19
  SPEAKER_01: And in this case, and this is this, we'll do an episode about this at some point, the franchise world is tricky.
• 30:25
  SPEAKER_01: Yeah.
• 30:25
  SPEAKER_01: Because it's like, hey, it's in a box, you just do it.
• 30:27
  SPEAKER_01: And the franchise companies make most of their money when they sell franchises.
• 30:31
  SPEAKER_01: Even if that means they sell it from one person that failed to somebody else that might fail, to somebody else that may eventually be successful.
• 30:37
  SPEAKER_01: And then usually in those franchise models, there's like a few players around the country that have figured it out and they just buy up the distressed franchises from people that tried and failed.
• 30:46
  SPEAKER_01: And so it's like, I think people are making decisions like that all the time without a process, and there are huge repercussions for that for a lot of years.
• 30:54
  SPEAKER_01: You lose your life savings, all the emotional stress and anxiety that comes from it.
• 30:59
  SPEAKER_01: And so the personnel that's involved is really important.
• 31:04
  SPEAKER_01: I think that's the risk conversation.
• 31:05
  SPEAKER_01: That's good.
• 31:06
  SPEAKER_01: The performance side, when I look at that, was like, what is going on right now in the marketplace that shows the potential upside here?
• 31:13
  SPEAKER_01: You know, is it like, hey, we're in a real estate boom, and so if you can buy a property at this price right now and flip it in three months, there's a really high probability of making 20% on your money.
• 31:22
  SPEAKER_01: That's great.
• 31:23
  SPEAKER_01: I think a lot of people are satisfied with like 8 to 10% a year, which is what they say the stock market has done over 80 plus years.
• 31:30
  SPEAKER_01: But also, I know a lot of investors that it has to be 15% or more to even like turn their head because they know those kind of returns are possible if you know what you're doing.
• 31:40
  SPEAKER_01: So that's a conversation I sit with somebody.
• 31:42
  SPEAKER_01: I'm like, what is the timeline to have a positive outcome here?
• 31:45
  SPEAKER_01: And based on everything around us, like, is this this the is this the best way for you to make money?
• 31:50
  SPEAKER_01: Or is there a less risky, easier path to that?
• 31:54
  SPEAKER_01: So that's the performance conversation.
• 31:56
  SPEAKER_01: So if somebody offers you a business opportunity, like who's running it?
• 31:59
  SPEAKER_01: What's their experience?
• 32:02
  SPEAKER_01: Prove to me that there's upside here.
• 32:04
  SPEAKER_01: Yeah.
• 32:04
  SPEAKER_01: And I don't think enough people, when they're like, hey, invest in my business, I'd be like, give me a pro forma.
• 32:08
  SPEAKER_01: Like, yeah, show me some assumptions and show like in 12 months, what could this look like?
• 32:12
  SPEAKER_04: Yeah.
• 32:13
  SPEAKER_01: An experienced person that is used to asking for money from people will have that.
• 32:16
  SPEAKER_01: Because they're like, I know I need to show you like with reasonable assumptions, we're gonna break even in 12 months, and then at 24 months, we're in the money, whatever that looks like.
• 32:24
  SPEAKER_02: Right.
• 32:25
  SPEAKER_01: Time is a less tricky one, um, but it's an easy one to skip.
• 32:30
  SPEAKER_01: Yeah.
• 32:30
  SPEAKER_01: Because I think all of us are like, oh, we'll figure it out, this is great.
• 32:33
  SPEAKER_01: Right.
• 32:33
  SPEAKER_01: And we don't factor in, we're typically optimistic about it, and then it takes more time than we think.
• 32:40
  SPEAKER_01: On the one side of the spectrum, if you came to our firm and invested money, I don't want you to never talk to us.
• 32:48
  SPEAKER_01: Like, I will initiate at least two meetings a year for us to strategize on like how are we optimizing the things we're doing?
• 32:53
  SPEAKER_01: So that requires some of your time.
• 32:55
  SPEAKER_01: I need you to be engaged to some degree.
• 32:56
  SPEAKER_01: We even tell our clients before they start like, are you willing to engage when we need you?
• 33:01
  SPEAKER_01: Wow.
• 33:01
  SPEAKER_01: Because if I'm pursuing you and you're not giving, like, we will not get the results we need if we can't talk to you and know what's going on in your life.
• 33:08
  SPEAKER_01: Then on the other side of the spectrum, it's like, I'm gonna launch my own small business.
• 33:11
  SPEAKER_01: It's like, okay, buckle up.
• 33:13
  SPEAKER_01: Like this will consume you.
• 33:15
  SPEAKER_01: And if you don't know what it's gonna take to get a business off the ground, you shouldn't do it alone.
• 33:21
  SPEAKER_01: Because anybody that's ever started a business and whether it was successful or not, realizes like, wow, this is needs all of me for 12 months.
• 33:28
  SPEAKER_01: And if you have a family and kids, that conversation is like, hey, are you guys on board with it?
• 33:32
  SPEAKER_01: Because there's probably no version in the first 12 months of launching a business to where you're like, I'll be home by 4 30 and here till eight.
• 33:39
  SPEAKER_01: Like it just requires so much of you.
• 33:41
  SPEAKER_01: And so I think a gift we give a lot of people is just like, I'm gonna give you a place to have this conversation, to live in reality.
• 33:48
  SPEAKER_02: Yeah.
• 33:49
  SPEAKER_01: I might I might bum you out for a little bit, but hey, it's okay, we're gonna end on a high note.
• 33:54
  SPEAKER_01: And so the time one is really important.
• 33:56
  SPEAKER_01: And finally, fees.
• 33:57
  SPEAKER_01: Most of the time, people you're working with do not like this question.
• 34:00
  SPEAKER_02: Yeah.
• 34:01
  SPEAKER_01: But if they do a great job, it's like, hey, everybody has to get paid.
• 34:04
  SPEAKER_01: And if it was me and a client came in, they're like, I want everything you have to offer, but I don't want to pay you.
• 34:09
  SPEAKER_01: I'd say, Well, we're not a good fit.
• 34:11
  SPEAKER_01: Because the clients that work with us, they're like, No, I want your outcomes, and of course I'll pay you for that because it's so in my favor.
• 34:18
  SPEAKER_01: Yeah.
• 34:18
  SPEAKER_01: Like that's the goal at the end of the day.
• 34:19
  SPEAKER_01: Yeah.
• 34:20
  SPEAKER_01: And so I can do that in 45 minutes with somebody, whether it's like, I want to buy a piece of real estate or a business.
• 34:25
  SPEAKER_01: And typically by the end of it, they are either convinced that it's a great idea, or more often than not, they're like, Okay, you gave me a lot to think about.
• 34:33
  SPEAKER_01: Yeah.
• 34:34
  SPEAKER_05: Well, what this has been an awesome first episode, great way of kicking this off because um I think that that gives our listeners and our viewers so much to think about.
• 34:46
  SPEAKER_05: Folks, engage with this stuff.
• 34:48
  SPEAKER_05: Uh, your future self will say thank you.
• 34:50
  SPEAKER_05: Um, but Stan, this is great fun.
• 34:53
  SPEAKER_05: And uh, I think this was an awesome way of kicking it off.
• 34:56
  SPEAKER_01: You bet.
• 34:56
  SPEAKER_01: Yeah, hang out with us, more to come.
• 34:57
  SPEAKER_01: We're just getting started.
• 34:58
  SPEAKER_01: Uh, it'll be fun, and we'll share our best stuff with you every week.
• 35:03
  SPEAKER_01: Thanks.
• 35:03
  SPEAKER_01: Thanks, both.