Bridging the Gap Between Academic Research and Industry Expertise Where Do You Get Your Advice? (SB1397)

Where do YOU turn for true financial advice? Your family and friends? A CFP professional? Your bridge club crew? TikTok??? On today’s special Friday roundtable episode we’re thrilled to have an all-CFP lineup to each give their two cents on where to look for true financial advice. We’re happy to welcome back our friend CFP Michael Kitces after a long hiatus; we also welcome back the queen of Sensible Money CFP Dana Anspach; and finally, our in-house CFP OG joins the gang.

In the second part of the discussion, our panel shares their take on the positives and negatives of joining a good financial Facebook group; the pros and cons of signing up for financial webinars and masterclasses; and how psychology plays into the right financial plan for you – even when the pure math doesn’t make sense. Plus, we dive into the value of surrounding yourself with the right team by creating your personal financial “board of directors.”

Be sure to stick around at halftime for Doug’s trivia all about the business of basketball.

FULL SHOW NOTES: https://www.stackingbenjamins.com/friday-cfp-roundtable-personal-advice-1397

Deeper dives with curated links, topics, and discussions are in our newsletter, The 201, available at https://www.StackingBenjamins.com/201.

Enjoy!

Our Topic: Where should you turn for your financial advice?

Academic Research Vs Industry Experience: Evaluating The Value Of Practice Management Advice (Kitces.com)

During our conversation, you’ll hear us mention:

Different approaches are based on individual circumstances.
How getting various opinions can work to your benefit.
Who regulates what advisory professionals.
Differentiating true financial advisors from product salespeople.
Investor psychology’s role in assessing their need for a qualified advisor.
The cost of receiving bad advice.
Selling/product-focus vs. goal attainment.

Our Contributors

A big thanks to our contributors! You can check out more links for our guests below.

Michael Kitces

Another thanks to Michael Kitces for joining our contributors this week! Hear more from Michael on his show, Financial Advisor Success at Financial Advisor Success on Apple Podcasts, as well as Kitces and Carl at Kitces and Carl – Real Talk for Real Financial Advisors en Apple Podcasts.

Check out his website, Nerd’s Eye View blog for Financial Planners at Kitces.com.

Dana Anspach

Another thanks to Dana Anspach for joining our contributors this week! Hear more from Dana on her show, Control Your Retirement Destiny at Control Your Retirement Destiny on Apple Podcasts.

Check out her website, Financial Advisor – Scottsdale and Phoenix Financial Advisors (sensiblemoney.com).

OG

For more on OG and his firm’s page, click h ere.

Doug’s Game Show Trivia

Michael Jordan’s basketball career, how much did he earn in total from endorsement deals facilitated by Sonny Vaccaro?

DepositAccounts

Thanks to DepositAccounts.com for sponsoring Stacking Benjamins. DepositsAccounts.com is the #1 place to go when you’re looking to see if your rate is the BEST rate on savings, CDs, money markets, and even checking accounts! Check out ALL of the rates ranked from best to worst (and see the national averages) at DepositAccounts.com.

Mentioned in today’s show

Join Us Monday!

Be sure to join us on Monday for a fun discussion about our top 5 financial lessons from movie characters!

Miss our last show? Check it out here: Teaching Better Money Lessons – Our Back to School/Back to Work episode! (SB1396).

Written by: Kevin Bailey

Episode transcript

My God, Dukes are going to corner the entire frozen orange juice market

live from Joe’s mom’s basement. It’s the Stacking Benjamin Show.

I am Joe’s mom’s neighbor, Duggan. Today’s your lucky day. We’re exploring the places you find good advice. Do you dive into the internet? Hire advisors, ask friends, or some of each, do you dive into the nerdery or get your hands dirty here to give us the nerd’s eye view on this topic is the guy financial planners turn to for advice C F P, Michael Kitsis.

Also on our panel, a lady who makes her own luck while helping clients reach retirement. She’s the queen of sensible money, C F P, Dana Ospa and the man who’s always got a winning financial plan and a taste for the finer things our resident C F P. Oh gee. But that’s not all. Halfway through the show, I’ll share my high flying trivia.

And now a guy who owns thousands of board games and has never won a single one of ’em, it’s Joe Saul ci.

Well, hey, Doug, thousands might be overstating it. There’s quite a few in the collection, but you are right on with never winning. I just if, if I had to be lucky, I’m lucky in everything. I’d lucky I could just spend time today with all of you stackers. Hey everybody, let me be the first to welcome you to Friday.

I am Joe Sulci. Hi, average Joe Money on Twitter. And man, we have an all star lineup for you today. Let’s start off with a guy across the card table from me. First of all, Mr. OG is here. How are you my friend? I

take issue with the fact that you say you’ve never won. You usually do win only because you changed the rules halfway through the game.

I know. I forgot. There’s a new rule. There’s this rule I forgot to tell everybody at the beginning of the game, and it turns out I

win. It’s like every game of munchkin, ever.

Munchkin Michael, who will introduce in a second, brings up like the game from hell. Like that is just, and now Munchkin fans are all turned off, but, uh, I have to take issue with that.

Og I do forget rules, but I would win more often conveniently if I, uh, if I, if it was convenient. Uh, weird. Yeah, it is strange. Uh, also here, Paula Pant called in at the last second and couldn’t make it, but we were. So happy that this woman, she’s been on enough that we can call her frequent contributor to the show Data.

Oz Fox Back. How are

you? I’m doing great and I have to say, uh, board games aren’t really my thing either.

No, but last time you were here something, a game that is your game is, uh, walking while you talk. But I don’t, you’re not moving today for people not watching us on YouTube. You

know what? Let’s see. I can turn my under the desk treadmill on.

There we go. But I, I played three hours of pickleball yesterday, so I was like, I don’t think I need to walk while I’m at my desk today. But you know, my first day with the treadmill was the last episode I was on, so here we go. I’ll walk.

Well, well maybe no board games, but pickleball. So you’re into the real games.

The real games. Absolutely.

Yes, but did you just call all board games? Not real. That’s

I just, I just,

just offended my, I’m like, first we alienated the Munchkin players and now we just got everybody in the whole board games

community. I just offended all my people, Michael, all of my people. And that voice you hear, he hasn’t been on, we were just talking about, it might have been seven or eight years since he’s been here.

Michael Kites is back. How are you, my friend? I appreciate

the opportunity to join you. Doing well. Doing well. It has been a long time. Now we

know what Dana does at Sensible Money Helping Retirees. You have not one but two podcasts, one of which is with our, our friend of the show, Carl Richards. How do you and Carl, uh, start working

together?

So we originally crossed paths on the, the proverbial speaking circuit. So Carl does a lot of training out to financial advisors and client communication. I do a lot of training out to financial advisors on tax retirement. I, I do, I love deep, nerdy stuff, so I go deep on, on that. And so Carl and I started crossing up at a lot of conferences where we were both doing trainings for financial advisors and got to know each other as we would like cross paths at one city after another, uh, a number of years ago.

And so at some point Carl actually reached out and he was like, you know, we both really have this passion for seeing like the good advisors do well and the not really advisory people go away. You know, Carl calls them secret society of, of real financial advisors. I call them financial advisors. Like that subset of people who.

Aren’t in the sales business. Like they actually give advice. ’cause that’s a whole quagmire of our industry, maybe we’ll get to talk about later. But Carlos is like, look, we both believe in the same things, but we kind of approach from different areas. ’cause it’s like he wants to do everything with a conversation.

I wanna pull out a spreadsheet. Uh, and so he is like, we should do a podcast and just talk about like the things that we’re both dealing with because we are so completely different in how we approach everything. Yeah. Even though we have the same mission that other people will probably find it interesting to listen.

Uh, and he was right. We, we’ve done a hundred something episodes, picked up a million downloads and like it’s going

strong. That’s fabulous. And you have a second podcast, which is the Advisor Success podcast. Correct.

This was so my first foray into podcasting. We’re almost seven years into this now, which I guess is.

Not that early by podcasting standards, but was really early by financial advisor podcasting standards. ’cause our domain’s very, very regulated. We do everything like five years after the rest of the world. So I’ve been doing that podcast for a long, long time. We just, we bring on financial advisors, have them share their paths of success, what they’ve done, how they’ve built their businesses.

We’re kind of a long form, hour and a half similar to what, what you guys do here. So we, we really get deep into the details of how they built their businesses and it built up a, a really wonderful following in the advisor community. Just sharing out stories and trying to help advisors be more successful.

Well, I take a little bit of issue, what you said, Michael, where years goes deep, if we ever get really deep, we run into trouble. ’cause that is not, that is not our job here. Our job is introducing people to stuff. But you know what’s funny is that you say you make, you know, these podcasts are really for advisors.

I don’t know when I’ve listened to them. I also think that if somebody’s just out there listening to us, if you’re looking for good advice, I’ve seen Michael, there’s so much. And we’re gonna talk about this a little bit today. There’s so much misunderstanding about what really happens in the good financial advice industry, just listening to a few of those.

Yes, we share a lot of those dynamics. A as well as I know, well, we may even talk about this a little bit today. You know, we, we cover particularly with the podcast I do with Carl, like the advisor version of some of these same challenges of how do we deal with challenging client situations? How do we try to navigate these scenarios where clients are not following advice that we believe is good advice, might really, really be good advice, right?

We’ve, we’ve all had those situations just in life in general, right? A, a family or friend or loved one is doing a not ideal thing and like you’re trying to give them advice to do the thing better and they won’t take your advice and they keep doing the thing that’s not so great for themselves. And from our end, like, yeah, my career is giving people advice and helping people and they pay me for it.

And they still won’t take the darn advice. Gets to actually like a whole interesting level of frustration for us as advisors. So we. We cover some of that end of it on, on Kites and Carl as well. It sounds like it’s

therapy. It sounds like it might be therapy for you.

Well, I think a lot of the episodes basically are Carl providing me therapy through my spreadsheet challenges.

So yes, there’s definitely a little bit of that.

All right. We got Michael here. We got Dana, we got OG and, and uh, Michael, you haven’t been here in a while and I don’t know if you know the rules to the Friday show. Have you heard the

rules yet? No. Well, you gotta get me up to speed. Alright, so what are, what are the rules now?

Yep. Okay, here we go. We’re halfway there. You got the first half, Michael?

Uh, yeah, I think so.

Okay, here’s, here’s the rest of them. Now you’re ready.

Right? Uh, sure. Let’s go with that.

Michael’s here. Data and OG and Doug. So let’s get rolling.

Today we’re gonna take some inspiration from a piece, Michael, that you wrote on your nerds Eye view blog that you’ll find@kites.com. The piece, uh, from late July is academic research versus industry experience. Mm-hmm. Evaluating the value of practice management advice. And I know Michael, what you were talking about here is advice for advisors and really how to run a practice.

I thought though, in terms of a construct for an episode, there’s a lot that the three of you can help us with here as people that often use financial advisors, because I wanna read from the executive summary as a financial advisor, there’s many potential sources of advice on running a practice and serving clients.

From fellow advisors to coaches to academic researchers and others. Sometimes it could be tempting to rely solely on the advice of those with quote in the trenches perspective as these individuals have actually lived out a similar experience. It can appreciate some of the nuanced challenges that an industry outsider might not.

And as I thought about that, Michael, I thought about the number of people I’ve run into since I went from financial advising to financial media, who now get all of their advice from community groups on Facebook. Yeah. From going to uh uh, well, we had Stephen Boyer here from Camp Phi, which is a fine operation, but people go there and I think they think that’s my financial advisor.

When you were actually putting this together, why was this piece important for you and why is it so timely today for financial advisors

in the domain of financial advisors? The challenge that crops up, look, we live this world where we have to both figure out how to give good advice to clients. And figure out how to run good advice businesses.

Uh, the advisory industry overwhelmingly and increasingly these days is more and more, uh, uh, channels of independent advisors that are running and building their own businesses. And so as small business owners, we have the proverbial, you gotta spend time working in your business as well as time on your business.

And so when it comes to like working on your business, we have figure out like, okay, what are the best practices about how to actually run my business? And the challenge that we have not unique to the financial advisor world is they’re basically like, there’s a lot of hucksters out there, right? There are, people are like, I’ve got the system, I’ll sell you the system to do the thing, and then you spend a bunch of money and buy the system.

And it’s, it sounds like

total junk. It sounds, it sounds like S S E O social media people for, for us. Yes.

So, so, so we deal with our, we deal with our challenges around that. And so what happens once almost any of us have kind of been taken in, in that version, at some point you tend to go one of you two directions.

You’re like, darn it, I just realized the person that sold me the thing like. All they do is sell the thing. They’ve never done the thing, so they have no idea what they’re actually talking about. So like from now on, I’m only gonna find people who’ve really done the thing and have treaded the path who can speak for real experience.

And that’s where I’m going with advice. Some people go the other direction and they say, all right, like, I got taken it by the person who doesn’t know anything. So from now on, I’m only going to the people who actually have the data and I’m gonna go find the data and the people who have the real numbers, who have done the analysis, who can give me the, the quote unquote the right answer.

And, uh, we sort of proverbially call that the academic route. And the interesting thing to me that I I see in our space is most people seem to have like a natural inclination of whichever of those two paths they go and whichever path they go, they tend to really not like the other one. Yeah. Right. Like if you like people who have got, you know, lived in the trenches and done it, we tend not to like academic experience.

Right? It’s like you, y’all are in your ivory tower, you don’t know how things are in the real world is usually the criticism. And then the folks that like the more academically driven approach, like yeah, you’re telling me all these things you did that made you successful. I’m like, You don’t actually know what made you successful.

Like you could be a case scenario of one. It could have been like 2% what you said and 98% luck. Like, it, it, you know, it reminds me there, there was an article that had come out a couple of years ago, not specific to our industry, but it was this like, profile on someone who had made this wonderfully successful entrepreneurial endeavor.

And the question was like, you know, what did you do? How did you do it? And I, I forget what exactly what the details were. It was something, the effect of like, I got up a day at 5:00 AM every day and hustled. I built a great team around me. I established a wonderful mastermind group. I borrowed 500, five $50,000 from my parents, and I drink green smoothies.

And, and it was like, wait, wait, wait, wait. Like did, was that like borrowed $550,000 for my parents in the middle of that? Right? And they’re like, Up on this platform of let’s look at like the amazing best practices of this person who’s built this business. I’m like, dude, you, you had someone to borrow $550,000 from that might’ve influenced the outcome more than perhaps you’re realizing slightly, because a lot of us don’t have quick parental access to half a million dollar loans.

Right? And so just that phenomenon, I don’t mean to knock that in people who’ve been successful, there’s a lot that goes into building business beyond that. But the, just this phenomenon that I, you will often see stories where people talk about like, here’s what I did to be successful. And it’s like, maybe that wasn’t the thing or the only thing, or maybe you’re not even recognizing what’s actually different about your experience versus everyone else’s that makes you successful.

Which for a lot of people then brings you back into the, okay, so I gotta look at it academically. Candidly, I tend to be a fan of a little bit of a both. And I think there’s a place for both. And not trying to equivocate just I. Yeah, I, I nerd out on both paths for their respective reasons, but that’s really why we were trying to queue it up, is I’m finding this in our profession.

This debate is starting to crop up more and just there’s some structural stuff around how the advice business has evolved over the past 10 and 20 years. That more advisors are not in the business of selling products now. They’re really building ongoing businesses with advice, which tends to make bigger businesses, which means more of the need practice management advice.

And so this is starting to crop up a lot in our industry. Well, let’s

take this because everything that you talked about happens, as you know, with people that take this advice. Mm-hmm. Our stacker community og, you were saying that it’s not just in that realm.

With your example Michael, you’re talking about the chain of events that help that person be successful.

I just saw an article in, um, I dunno if it was in Forbes or something, you know they have those little advisor profiles and it was like this, you know, this person’s super successful and you know, one of the youngest people in the universe to be really successful, manages billions of dollars, is really young and energetic.

Buried in the paragraph is inherited practice from dad who worked 30 years. And it’s like, yeah. Oh, okay. Might’ve, I mean, Uhhuh there, there that might’ve had an impact. Might have helped

like just a little. Yeah. That might have had an impact. Like look, you know, if you wanna look at what it’s like to run a business that size, like cool, I’d love your input.

If you’re gonna gimme advice on how to grow a business that size, like maybe that’s not gonna be the best source of advice. Right. Let’s flip this

and talk about the stackers, because I think there’s a parallel universe here that we’re getting advice from the wrong places that sometimes if we prefer one type of device, to your point, Michael, we poo poo the other side.

You know, as mom says, yeah, we go, nah, I don’t really like that. Michael writes, Dana, that it’s often tempting to talk to people in the trenches. Right? People going through what you’re going through. Is there any danger in asking people going through retirement or they’re paying for kids to go to college now?

Uh, how they did it,

absolutely. There’s danger. I mean, we each have our own perspective based on our circumstances. I mean, it’s the exact same analogy. You know, you talk about someone that got $550,000 from their parents, well, how they went about it is gonna be completely different than the next person.

You know, I remember running around my house unplugging outlets to keep my electricity bill down while I was starting my business. Right. It’s a completely different perspective. So when you’re talking about retirement, Yeah, you know, you don’t know their circumstances. You don’t know whether they worked or their spouse worked, whether they inherited money, the age of their children, whether they got lucky and went to work for Apple or Google or Microsoft at the right time, or you know, whether they got lucky and bought a house at the right time and, and had a, you know, incredible increase in home equity.

There’s all kinds of circumstances that flavor the way we think about money and whether we think it was easy or not easy. And of course, that’s gonna impact how we withdraw the money, whether we pay for the kids’ college, all of those things. So you’re only getting that one person’s view unless you went around and sampled lots of people.

And, and that’s one of the things we, ah, yeah. We talk about, you know, we’ve helped hundreds of people retire, so you get all these different perspectives. Then I think you, you can pick and

choose. There’s, so, there’s no law of large numbers and like colloquial evidence doesn’t equal truth, I think is kind of what you’re saying.

Yes. Yeah. But og I, I don’t think we should, we should tell stackers not to talk to people going through retirement. ’cause I do feel like, you know, hearing those stories, like the humanity of what you’re going through and how the road might be bumpier than you thought still can, can provide some helpful tips.

Yeah.

And I, and I think it’s also important just to think about like, the perspective Dana said this, about, uh, the perspective of what other people have done. And I’m thinking about this in the context of real estate investing versus equity investing, right? There seems to be like this pretty big divide between, I’m gonna be wealthy, financially independent by buying a whole bunch of single family houses and renting ’em out, or Airbnb, ’em, or whatever.

Versus I’m gonna take that capital and invest it in, uh, the equity markets and, and kind of go down that path. And the reality is, is that if you talk to somebody who’s been wildly successful with real estate, there was probably a lot of hard work there. There was probably a lot of fortunate timing, you know, if you were successful, some things just happen to go your way.

And so they’re gonna have that perspective that’s gonna, that’s gonna, I don’t wanna say cloud their judgment, but it’s gonna have that lens that they’re gonna be able to see their perspective and share that with you. Just like, you know, you can say, well, what about like Warren Buffett? Like he’s, he, he, he doesn’t own any real estate.

He has all anine equity, a hundred percent equity portfolio. Surely that’s a big enough proof to, to, to be successful that way. Well, one might argue that he happened to have some pretty good timing, you know, relative to some pretty cyclical bull markets as well. So everybody’s perspective is gonna be viewed through the lens of their own personal success.

And so if that’s one of the dangers of. The Facebook groups or the, you know, following somebody on Instagram or, I mean, you could do this for anything, whether it’s money or health. You know, you’re trying to lose weight, right? There’s 52 ways to do that. Eat less carbs. Eat more carbs, don’t exercise, you know, now you can just take a shot and lose weight.

You know, there’s like a thousand ways

to do it. I’m waiting for the Eat A Donut program. Yeah. Yes. I’m stuck on the more carbs. Eat a

donut, lose some weight, you know, but everybody’s body chemistry is gonna be different. So what works for you isn’t necessarily gonna work for somebody else. And so you gotta be careful what kind of, what kind of cir circle you have around you, because it turns into a pretty impactful echo chamber very quickly I think.

Well, and this is, this is where I love that, where that’s going, og, because I think this is where trust comes in. And, and Michael, as, as you well know, because you deal with this every week when you’re talking to these advisors, you’re talking to with Carl about servicing clients, there’s so much distrust of professional help out there.

There’s so much. Is that distrust deserved? And how do professionals, you know, if, if, if, if Dana knows the law of large numbers and yet people don’t want to talk to Dana because she’s a pro ’cause they don’t trust pros, like how do we start working around

that? Well, I, I mean, sadly, I think it is deserved for just our, I mean, candidly, our, our industry has a lot of issues, even aside from like general consumer backlash in the financial services industry.

You know, the, the financial advisor domain has some unique challenges. ’cause when you drill down to it, Like the actual, like the label financial advisor and holding out that way is not really actually regulated despite the fact we’re a ludicrously regulated industry. ’cause if you, if you go back to the roots of all of financial services, like a hundred years ago when a lot of the regulation was put in place, banks started coming up.

So states regulated the banks, then insurance companies started cropping up. So states regulated the insurance companies, then the stock exchange and markets started cropping up. Did some not so great things in the late 1920s, early 1930s. So we made some federal regulators around them, the S e c finra.

And so what we ended out with is, is this world where. One set of people regulate insurance. So if you provide advice that has to do with insurance, you answer them. Uh, one regulator handles investments. So if you manage portfolios, you have to answer them. Another regulator handles the sale of mutual funds.

So if you sell some of those, you gotta answer to them. And all these different regulators regulate the different things that financial advisors might implement. And nobody actually regulates financial advisors as financial advisors. And so the end result of what’s happened with that, particularly over the past 20 to 30 years, is the industry and particularly the, the, the product for manufacturing and distribution side of the industry, right?

The folks that make insurance and investment products have figured out that if you tell people you’re gonna give them advice, and the advice is to buy your product, it sells a lot of product, right? Like if you give people a comprehensive plan and it always results in your product, at the end of it, it turns out a lot of people buy your product.

And so 20, 30 years ago, everybody stopped putting insurance agents and stockbroker on their business card, and they started putting financial advisor, financial consultant on their business card. They legally, they never actually stopped being product salespeople. It’s still their job, it’s still how they’re regulated.

It’s still the standards that they’re held to. It’s still the educational requirements or lack thereof that they have. ’cause there basically is no material educational requirements to be a financial advisor. And so we go down this road where within the industry now, there’s basically this bifurcation.

There’s a subset of people who are really in the business of advice. They tend to pursue advanced education on their own. It’s not a requirement. You do it because it helps you actually give people better advice. Uh, they pursue some of the channels that have higher regulatory standards where you’re actually accountable for the advice.

’cause it’s good for consumers. And it turns out you get better advice when people are accountable for it. And then you’ve got a second segment of the industry that continues to live in the product sales and distribution side. They get paid to sell product. They work for companies that manufacture and distribute the product.

And they all call themselves financial advisors. And if you just look at like a total census of financial advisors in the industry, Literally the majority, like more than 50% actually still work for product companies that manufacture and distribute. And only a minority of them are actually in the business of advice.

So again, this is what Carl calls his secret society, real financial advisors. I call them financial advisors. And so for the average consumer who throws a stone and tries to find a financial advisor, like the mathematical odds is you are gonna find someone who is a product salesperson. And if you’ve had a couple of those experiences, you probably don’t think very highly of financial advisors for.

Good reason, like just if you need to buy a thing, I’m fine to find a salesperson to sell it to me. But if you go to a salesperson for advice, you tend not to be thrilled with it. Right? Like I know when I go to the clothes store and they say it looks good on me, like they’re not giving me fashion advice.

They work on commission on the floor. They’re

like, you should wear a blue

shirt. Yes. Which of course is always the right advice. ’cause all I wear

is T-shirts. Mike Michael, I’m a guy of a certain age and there used to be these stereo stores all over. And I remember job one was when the stereo sales dude said, I have this at my house.

That meant I wasn’t buying it. It was like, I don’t care what you have at your house. Like, no way guy at Best Buy comes up to me. Oh, I love this one. Okay, let’s go look over here then. Which by the way, Dana, we talked about maybe the bad news about a person with one story, but we’ve heard this phrase, the wisdom of crowds.

Right? The wisdom of the crowd. We also know that there’s value in surround sound. When I, we moved to Texarkana, at first I had never run a marathon. And then all my friends in Texarkana are marathoners. Now I’ve run 11 and I’m prepping for another half and hopefully my final full marathon coming up. But I wouldn’t have done any of that if I wouldn’t have had the surround sound.

It seems to me that with these Facebook groups there is some value there in in surround sound or are they more dangerous than good? You’re

not taking that as Okay. They said do this check, that’s what I’m gonna do. You know? Are you

saying just take what happens there with a grain of salt? Like maybe my buddy Troy shouldn’t be giving me, uh, workout advice just ’cause he’s in my marathon group.

Exactly. We get this on our webinars, so we do webinars about every four to six weeks, and we get all kinds of people that will ask very specific questions. You know, they’ll give us two pieces of information and say, what should I do? Well, we would need a lot more than those two pieces of information. And so we’ll try to guide them.

You know, we would need a lot more, if your situation looks more like this, here’s the things to consider. If your situation looks a lot more like that, here’s the things to consider. And I think that’s what you can get from these Facebook groups, from, from these online communities is what are the considerations in some of these decisions?

But it’s completely different than having a one-on-one conversation with someone who knows your financial situation inside and out. And we talk a lot about, it’s not just the spreadsheets. Like I’m a spreadsheet geek like Michael, like spreadsheets make my heart sing. They really do. But there’s also the value side so we can run through all the numbers in the world.

You know, I was on with a woman the other day, but she is just terrified about what happens if her husband passes away early and she’s gonna be okay. But. You know, you can’t address that emotional concern with a spreadsheet. There’s, there’s value to having a conversation and, and so many factors that go into these decisions with money aren’t really, you know, logical.

We’re not all like Spock. We, we have an emotional component to them.

It’s funny, OG Dana brings up a great point that, that over the last 25 years, I feel like there’s more psychologist in the good financial advisor space than there used to be from the

advisor end. We literally added it to like the official C f P curriculum two years ago.

Like there’s a section of client psychology that did not exist as part of the core curriculum is and is getting added in now, wasn’t there? Yeah,

OG. It’s

interesting your perspective of 25 years. ’cause July 1st was my 25th year, and I was just talking with somebody about how this has changed over the years.

Michael was talking about how financial advisors, air quotes used to give advice and it just kind of, as long as the advice sold the product that you, you had access to sell it was it That was the, that was the intent of the advice. And I started, uh, working like you did Joe at American Express, and I think we did a pretty fair job of providing that advice piece, but a lot of times it kind of fell right into the, the products and services that were super easy for, for the advisor to sell.

But the reality is, is that now products are so ubiquitous and, and it’s so easy for consumers to. To shop these different things. I mean, you can look at all the commissions that have gone away and, and trading costs and all that other sort of stuff that’s kind of gone through the industry, that it has to be more about advice and it has to be more about that personal, uh, relationship or the personal experience that, that, that that individual is working through for their, you know, their unique goals.

Because at the end of the day, there’s no right answer and it’s really, I think it takes a, a pretty big person to say, you know, there’s 15 ways to solve

this problem. And I think that’s almost a great place to leave it before we go to the break. And everybody in the second half of this, we’re gonna start talking about what we look for in good advice and really the traits of good advice and when to trust good advice.

And we’ll talk about the different channels where people find advice. But before we get there, I wanna ask you guys about, Just individual stories that, you know, will, will retract names, but of where somebody got bad advice and really about how much money it costs them. I remember when I was leaving financial planning, and I’ll go first, I had somebody who decided, because I was leaving and we were in the middle of, uh, of just coming outta the 2007 2008 crisis and things were just starting to rebound.

They decided that they wanted to completely get outta the stock market ’cause they didn’t know about anybody else giving them advice. And they took all their money out of all their IRAs. And I called them and I said, what did you do and why didn’t you call me first? And they said, well, you’re leaving.

And we just think that, you know, we don’t need the stock market up and down. Like we just went through. We lived through it, we’re through it. We just took all the money. And I said, you, you could just move it to CDs inside the ira. You didn’t have to take the, they took $300,000 guys out of their IRAs.

Because they didn’t wanna be in the stock market anymore. And the person at the bank, by the way, who was doing the CDs, absolutely let them do it, right? All these people just let them do it. And I tried to explain to them, you earned $300,000 this year. That’s gonna be this, it’s gonna be ordinary income on your, on your, and, and they said, well, the horse is already outta the barn.

I’m like, no, it isn’t. You’ve got this timeframe where you can put it back in. I swear you can. And they wouldn’t do it. Bad advice cost them. I don’t know how much money in taxes. I mean, just maybe multiply that by 30%, just maybe 90. Maybe they thought you were like the

stereo salesman and there was something in it for Oh, it was horrible.

That’s still out of my entire career in financial planning that gives me the biggest pit. But Dana a, a story names retracted of somebody getting bad advice and it cost them a lot of money.

Yeah. I mean, I don’t know if it’s exactly advice, but I, I definitely see clients that will listen to political things one way or another.

We had a client a year and a

half ago ago now. No, that never happened in this, in this climate. That doesn’t

happen.

Never. Right. I don’t know what she was listening to, but she called us up a year and a half ago and, and said she was terminating services. Because, you know, fiat currency was going away and whatever she was listening to, you know, had said like she needed to get her money out.

So, you know, it was really odd conversation. Like, I was like, well, what are you gonna do with the money? Well, I’m gonna, you know, just put it in cash. And I’m thinking, but if fiat currency is going away, like what? How is that going to work for you? But there was

no logic. So I’m gonna put it, Dana, I gotta put it all in Fiat currency then.

Exactly. I gotta put it all

exactly. It’s going away. So I’m gonna take it out as. Stocks and put it all in fiat currency. So that’s what she did and, and terminated services. Now, I don’t know, you know, how that played out, but I know the portfolio she would’ve had has, you know, obviously done quite well over the last year and a half.

And so, you know, I, I’ve seen so many things like that over the years where people, you know, I’ve, I have some horror stories. I have one person who lost $4 million. Oh, you know, just truly horror stories. Signed it all away on two promissory notes. It turned out to be bad real estate investments and poof, it, it was all gone.

And so, yeah, I, I mean, I could go on and on, but it, yeah, you have to be really careful about letting the things you’re listening to completely skew your point of view where you’re not being objective and balanced anymore.

I feel, I don’t know. We have a member of our team who said that her, uh, grandparents just sit in front of, uh, political TV all day and are angry, like all, all day long.

And I just can’t imagine Michael a, a horror story about bad advice.

Uh, so mine comes from the, the very start of my career. So I started 23 years ago in spring of 2000. It’s like the absolute peak of the tech bubble. And so the number one Perfect starting time, by the way. Oh yeah. Fantastic. Starting time.

So the number one advisor, air quotes in the office in the agency where I joined it was, it was a sales organization. His big thing, like he was bringing in more assets than anybody else by a country mile. And the reason was everybody he met got the Mund net net fund. Nice. So anybody that does know Mund net net fund was like the absolute high flyer of the peak.

In the late 1990s, tech bubble, I forget what the number was, like Mund net. Net fund was up something like 150% just in 1999. Like the fund went up 150% in one year because tech stocks were going to the moon. And so everybody he met, it was like the thing sold itself. Like my fund went up 150% last year.

What are you invested in? So that got the money. So he wa he was on a pedestal in that office. ’cause this was a sales organization that literally had a whiteboard that had everybody’s name and how much they’ve sold. And you tried to get to the top of the board and then the board would reset every month.

So what have you done for me lately? Number one agent drove an immense amount of money. Everybody went into the mund net net fund and munder that fund, I think lost something like 90% in the next three years. When the market crash came in part, like that’s where some of my, I guess like particular jadedness around salespeople who call themselves financial advisors comes from, like he, he was literally next to my cubicle.

He had very, very nice office. My cubicle was on the end next to where the offices were. He was right next to me. And I would just watch him, like client after client walk into his office and phone call after phone call, and everybody left with them under net net fund and his name was at the top of the board every month.

And all those people lost 90% of what they invested with him in less than three years. Just sell and returns. Yeah. And he doesn’t have to give back anything he made. Right, right. That’s the commission gig. Like he kept a hundred percent of his commissions. While his clients lost 90% of everything, they invested with him and there were literally zero, zero consequences.

Like you signed that brokerage form that says you acknowledge what you’re doing. He at least found people who agreed they were willing to tolerate some level of risk, and so he had literally zero consequences because he wasn’t actually accountable for it for advice. Even though he said, you’re gonna be able to retire early on this.

Like that was not really retirement advice. It was a sales pitch. And so to me, like that’s what drives off this, right? Is the person you’re talking to actually in the business of advice, or is the reality that they’re in the business of sales? Like, look, if I wanna buy me a internet funds, like go talk to the dude.

He’s really good at doing the paperwork. He’ll get it for you. Right? Nice and quick, but like people weren’t going to him to buy the fund. They were going to him to figure out what to invest in and what he sold ’em was the thing that made the commission and made the money train run for him.

Og, how about you?

Cost of advice. Well,

the story that comes to mind for me is, More of a third party perspective during C O V I d I had a really good friend who was working at a, uh, local bank in their financial advisor department, whatever you want to call that. And we talked almost every day, you know, from the beginning of Covid on.

And he had no real decisionmaking uh, abilities in terms of client relationships, but was privy to all of the stuff that was going on. And at this small regional bank, they managed something like about $600 million of client assets. And, you know, the problem with merging financial advisors air quote with banks is that generally speaking, the, the people who are at the bank who are interested in financial advice, generally don’t want anything that’s.

Risky, right? But again, kind of you think about the history of 2010 through 2020, the spring of 2020, before Covid market went pretty much straight up. So like to Michael’s point with the Mund fund, you could do, you know, you’d say, Hey, I mean, hey, you’re somewhat conservative. It’s 60 40, it’s 70 30, whatever.

And so a lot of the, uh, consumers or customers of this bank’s financial advisor department were invested in more than conservative investments. Anyways, uh, they got, everybody got pretty freaked out. As you might recall. Mark went down 34% in 17 trading days. And the bottom of it was March the 23rd. And we were talking at noon.

My, my friend and I, and you know, that day the market was down 11% and it was just kind of a really rough day. And I had gone on a walk with my wife that day and I was thinking, my goodness, this is like the third one of these, right? The 2000, uh, timeframe, the, the 2007 to 2009 and now this, and, and we were just kind of talking about it.

My friend said, well, the VP here has decided that everyone is going to cash by nightfall because oh Lord, we’re going, we’re going down like crazy. Everyone, everyone’s going to cash by nightfall because the, you know, I mean the world is gonna end. It’s pretty obvious at this point. It’s down, you know, the market’s crashing today.

Uh, and he told me that and I said, I said, well, just so you know, today’s the bottom, anecdotally when, when professionals capitulate at that level, $600 million all to cash in one trade, you know, wow. You kind of knew that, that we are kind of just had to be sort of toward the bottom. Interestingly, so they did this, and interestingly, most of it was mutual funds.

So mutual funds close at the end of the day, right? So you don’t get to trade it throughout the day like an E T F and go, well, you know, I was only down 5% that day ’cause I sold at 11:00 AM. Nope. They sold out at the end of the day, down 11% for the day. Maybe you guys know, but what do you think happened the next day?

Rebound. It went up 10%, $600 million sitting in cash. I’m pretty sure that there were some lawsuits that kind of transpired from that. But, um, back to kind of the overarching theme of a lot of this is that when you’re in a relationship that’s, that’s driven around selling and it’s driven around products and, uh, not around goal attainment and not around how do I help this person, or how do we collectively get to the thing that’s most important to you, then the only thing you can do is work on the day-to-day.

You know, like look at the day-to-day stuff. And so that was the impact of those decisions, you know, roughly, you know, a 40 or $60 million. Miss, basically that’s a big, big, big bad day. Just if they would’ve waited one day, right? Wait one day and you would’ve seen a recovery and maybe that would’ve, you just had enough of your lips above the water at that point.

Yeah, and I also think, I just go back to Dana’s point about everybody’s different and when we’re calling our shot for everybody across the entire branch, no matter what your financial situation that we’re all getting out, like how crazy, how bad is, is, is that advice? And you’ll see the same stuff in online forums.

I’m like, what? What are you talking about? Using gold as your cash reserve. Like that’s, that’s ridiculous.

I can shave a piece off it we’re, I actually saw talking about, talking about the gold real fast, Joe, I actually saw a video. ’cause you know, one of the arguments that we talk about is, well how, how, you know you’re gonna take a slab of gold.

And, and go sell it. There’s actually videos now on YouTube about this and how, quote, easy it is to go cash in a sliver of gold off your gold bar. You just kind of chisel a little bit off if you need some money, and then you, you go into this, you know, place in New York City and they weigh it and they give you cash.

So,

That’s how you do. It’s way better than going all fiat currency. That’s what Dana, your person should have gone just about gold bars and a little chisel to chisel some off. Hey, coming up in the second half of this, I, I really wanna start, uh, seeing if we can solve some of these issues that we brought up.

But before that, we have our year long trivia competition going on among our three frequent contributors. Len Penso, who has the week off, Paula, who I mentioned earlier, had, uh, a last minute obligation. So Dana, nice enough to sit in. So your team Paula Pant today. Michael, you are as our guest of honor your team, Len Penso and og of course, playing for himself.

So, Michael, you haven’t played this game before? I have not, not which means I should go over. You’ve got some good news and some bad news. Do you want the good news first or the bad

news? I’ll take the good news first. Well, the good, I’ll take the good news first. Build me up a little. The good news

is you are tied for first place, my friend.

Sweet. ’cause the score is you have 11 team Paula, which is Dana today has 11 and og, who’s our two-time returning champion. Point to the for people on YouTube. Point to the trophy og. That’s our dollar store trophy we’re playing for right there guys. Karen got the ugliest trophy we could possibly find that goes house to house.

He’s had it twice, two years in a row. OGs got seven. He’s down by four. So getting woke, OG falling behind him. By the way, Paula Pant is usually, everybody knows Paula is one of the smartest people on earth. She’s always in last place. So how the hell you guys are in first? She doesn’t know. Nobody knows.

She’s had a great string of winds, so. No pressure Dana. No pressure at all. No pressure.

I’m kind of feeling like we’re in an equal pressure bucket here at a at a dead tie, so

Well, and the bad news is, is because team lended better than team Dana last year. That means, unfortunately, Michael, you’re gonna have to guess first, which I don’t like our guest having to do.

But for that we need a trivia question. Doug. What do we got on tap today? What’s going on?

My goodness. I thought we’d never get here, Joe. Hey there, stackers. I’m Joe’s Mom’s neighbor, Doug and big moment alert. I am currently in the process of wooing the new manager down at the tasty freeze. She and she alone has the power to free pour that twisty, creamy goodness who needs US Senators.

Now that’s a powerful person to have in your back pocket. It’s futile for her to resist my charm. It’s only a matter of time until I have free ice cream on demand and envy, envy of all local men. Hey, speaking of getting wooed on this day in 1949, the Dassler brothers were the talk of their town when their bitter feud led to the split of their footwear company and the founding of their rival shoe brands, Puma and Adidas.

Both went on to go viral with Adidas becoming associated with hip hop music, run D M C wooed an endorsement deal with the company by having attendees at their Madison Square Garden concert. Hold up one shoe. An Adidas executive was so impressed they gave run D M C A $1 million endorsement deal on the spot.

Also, why I’m holding up my shoe as I read this. You never know. Hold mine.

Yeah.

Come on Adidas. I’m right here. Another legendary endorsement deal with a shoe company is back in the news because of the movie Air Courting. A legend directed by Ben Affleck. The movie is about Nike’s sports marketing executive, Sonny Vaccaro, who corded a shoe partnership with Michael Jordan that would make Nike forever associated with basketball.

The Air Jordan would go on to earn 126 million in revenue in its first year and begin a lucrative relationship between Jordan and Vaccaro. So here it is. Now that you’ve got all that background, my trivia question for you today is during Michael Jordan’s basketball career, how much did he earn in total from endorsement deals facilitated by Sonny Vaccaro?

I’ll be back right after I spray myself down with Cologne. I want Ms. Tasty freeze to know when I’ve arrived and the scent of me to linger long after I leave. That’s how you keep ’em talking about you.

Yeah. One way, one way or another that ruffler and Polo

bottle’s getting low for

me. If that doesn’t, if that doesn’t work, I know what I, no idea What will Doug, uh, Michael, unfortunately, you have to go first here.

So Sonny Vaccaro and, uh, Michael Jordan. How much money did that partnership make? I’m

just trying to make sure I followed all the names of who was where Can I ask follow up questions for clarification? That was like dug through a lot of, are you

related? Are you related to og? ’cause that’s his department usually.

Yeah,

that’s his deal. I try to give you so much info to like throw you off

the scent. I know, and I’m sure you had it before that, Michael. So Yes. Follow up away.

Yeah. So I’m worried around, I think I’m hearing is that the company did the split into Adidas and Puma and Adidas says thing with run D M C and Sonny Vaccaro tried to get.

Michael Jordan on with, with Puma to do his thing. And my recollection is Michael Jordan kind of did a thing with Nike. So does that mean he didn’t do with Puma? And the answer is zero.

Well, the question’s about Sonny Vaccaro who worked for Nike? Oh,

who worked on the Nike side? Yeah, he worked on the

Nike side, so there was some cash there.

So I will say that Zero. You can, I

like his answer of zero though.

That would help me. I’m like searching for the trick here because although I

we’re not above the trick, Michael, we’ve done that before, but I, first thing you said, sorry, you’re locked in dude. But I will tell you there, there, there was somebody here.

He’s the Nike

guy. Alright. Um, man, I don’t know. Uh, I feel like this is either a really big number or a not very big number ’cause he didn’t sign a good deal. But Michael Jordan seems to have done well. So like, is this a, like get closest without going over? Are we like prices, right? Style? Just closest.

Just closest. Not without going over, just

closest. Got it. Then it’s gotta be a big number. Nike kind of, kind of did well over the years is my impression. So, Let’s go with $200 million,

$200 million for Team Kit’s Penso. Alright, Dana, you got 200 million as the starting gate. What do you think about that?

Well, I’ve seen the movie Air. It’s phenomenal. There’s this scene with, um, played by Ben Affleck, who plays Phil Knight, the founder, and c e o of Nike, where he really frames how your risk decisions change from a startup company to a more established company. Oh, this fabulous movie, um, has to do with some of the conversations we started off with on

success, but were the spreadsheets in the, in the movie.

Dana, you’re getting really getting excited about this. I’m guessing there’s some

spreadsheets. No, there probably was spreadsheets in, uh, Sonny’s mind, I would

guess that’s

right. Yes. It seems like though Ja, Jason Bateman was more of the spreadsheet guy. Sonny was kind of the seat of his pants guy played by, um, um, Not Ben Affleck, uh, the other guy.

Oh, you know, in the movie it was Jason Bateman, who was the, the most influential in getting Jordan to sign?

No, it was, it was, uh, not, not Ben Affleck. It was, it was who’s, who’s the guy who does movies with him? He did The Martian. He did, uh, Matt Damon. Matt Damon. Matt Damon. Oh,

oh yeah, yeah. Matt Damon.

That’s right.

Sorry. Matt Damon. Yes. So Sonny Vaccaro was Matt Damon. So that’s kind of a seat of the pants kind of guy. But Jason Bateman came across like your spreadsheet guy. Yeah,

he did, but he was all for the decision, I believe. Oh, he totally, maybe I’m remembering you wrong.

Nope. I think he was once it worked out.

Yeah. But anyway, let’s work out your

answer. So I’m gonna guess, Ooh, this is hard. Do I go over a billion or just under a billion? I’m gonna go 900 million.

$900 million. So significantly more than Mr. Kit’s. So, oh gee, you got 200 million, you got 900 million. Is

this, the amount that Jordan received?

How much did Jordan earn in total from endorsement deals facilitated by Sonny Vaccaro?

We don’t net

We didn’t, we’re not netting it out og. We’re not backing out his lunch receipts and all of his

expenses. Well, I, you know, I just didn’t know if it was the total deal and he gets a part of it, so,

well, no, I’m assuming there’s an agent who did really well on this. ’cause you know, you only get the net.

Yeah. Alright. So 900

million. He had an agent in the movie’s Hilarious

too. 900 million, 200 million. Uh,

I feel like I’ve just read something that said that Tiger Woods was about to be the second billion dollar person, which would lead me to believe that Jordan was the first. I just gotta take the over, there’s statistically more numbers, over 900 million than between 900 and 200. So 900000001 cent.

And, and that’s the way we ca cap Dana at the knees right there.

All right. Uh, we got our numbers locked. We’d love to tell you who wins. We’ll be right back with that. Michael, you opened up the bidding here with 200 million. It looks like both Dana and OG said, screw that. Like it was more than that. You feeling confident though? If it’s a number,

it’s Honestly, I’m, I’m not feeling confident at all.

Like if you give me a chance with the spreadsheet, To go through numbers and do some projections of Nike’s growth over time. Like I would, I would come back to this, but you know, I’m, I’m the, I’m the spreadsheet guy, so I will confess, I’m also not the pop culture guy, so I will confess. I, I am not feeling terribly confident, but I do at least like the spread you do that we’ve got here.

Right. I feel like, like Dana’s kind of boxed in. I at least have a multi-hundred million dollar range to cover here, so I’m, at least I’m liking my options, but I’m not feeling very confident. Yeah. Dana,

900 million, you were feeling good for about, I think about three minutes. Yep.

Yep. Till OG beat me out by a penny.

Do you think it’s he over you feeling good?

I think so. Again, there’s

more numbers above 900. You feel pretty good all year and it’s not been your year though.

He’s got the trophy. Don’t call the comeback.

All right.

Don’t call it comeback season. Well, let’s see

if there is a comeback. Doug

pay there Stackers. I’m envy Endorser. And Lady Wooer Joe’s mom’s neighbor, Doug. And in 1984, Sonny Vaccaro began courting Michael Jordan to partner with Nike to produce what would become the iconic Air Jordan. The partnership has lasted decades and has been a cash cow for the shoe brand and basketball legend.

My question was during Michael Jordan’s basketball career, how much did he earn in total from endorsement deals facilitated by Sonny Vaccaro? Well, I will say this. Mike slash Len was off by just 1.1 billion. Dana was off by about 400 million and OG was off by like 399,000,999. You, you get the point.

Throughout his basketball career, Michael Jordan earned over $1.3 billion from endorsement deals. Wow. With Sonny Vaccaro. I wonder if he’s in relation to Brenda and. Sonny did Michael. A solid. That means OG is our winner.

Wow. Og. Wait, do do we say that Now? Don’t call it a comeback. Don’t call it a comeback.

Been here for years. He now has eight. Only three away. But, uh, yeah. Great movie. Michael. I’m assuming that you haven’t seen the movie here yet. No.

No, I have not. I’ve got young children. We’re a mostly Disney household these days.

Well, I, I will give it if you ever get a chance to just get away. Big Thumb up.

I think og you’ve seen it. Dana’s seen it. Doug. You’ve seen it, right? No, never saw it. Oh, you haven’t seen it? Oh, you’d love it too. Og. Yeah. Good stuff. Haven’t seen it. I’m putting it on my list right

now. He already won. He doesn’t need to see it now. That’s, I already know what happens. It’s,

that’s in the past.

Hey, uh, let’s move into the future. Let’s talk about better advice. The second half of today’s show is brought to you by deposit accounts.com. Dana, you know what happens when you go to deposit accounts.com. Well, you can make a

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Stack you Benjamins dot com slash deposit accounts, or just go to deposit accounts.com for more. Alright, let’s dive into advice and where you get it. I wanna talk about all these different platforms. Dana, let’s start off with Facebook groups, with groups. What type of good things I wanna go through the good things from these groups.

I got three CFPs here. People are gonna go get professional advice, get good professional advice, but I wanna talk about what the good is that you can get from these things. All right. So let’s talk about Facebook groups. What’s a good thing that you can get by joining a financial Facebook group?

I think like a lot of groups, you feel like the kind of questions you’re asking are normal.

You, you know, you think, oh, I’m not the only one wondering this. Wow. There’s people that think about these things. I also think it can give you context. A lot of people are afraid to come talk to a financial advisor ’cause they don’t feel like they understand the lingo or they don’t feel like they even know enough.

You know, that shouldn’t necessarily be a reason. But if that’s the way you feel and you’re trying to gain some background knowledge, you start to dive in and ask questions. There’s lots of people willing to point you to beginner articles and things where you can learn and you’re just gaining context. I think that’s one of the positives of these types of groups.

We did talk already about the negatives. If you take this and go, this definitely applies to me without. Any second, uh, follow up buyer beware. Absolutely. Uh, Mike, I wanna ask you about masterclasses. Like I have a subscription to masterclass. I I learned a bunch from it. These are people that have done the thing before.

They, they know and you’ll see some of these very responsible courses online. Dana talked about, she has webinars. So if I just sign up for webinars, I take the masterclass. What’s the good I can get outta that and what’s the buyer beware.

Well, and so I, I mean, think the good around masterclass is just the opportunity for the, the pure education.

I mean, first of all, it’s just the pure education, right? I’m gonna learn about things that I, I just literally don’t know about. Ideally, I maybe even gain some perspectives about it from someone who’s tread the path. And to me, like in an even more ideal world, like I’m actually getting someone that can essentially role model what it looks like, right?

Not just, I’m giving you perspective on the other side, but I, I have done the journey. I. And you can see what my journey was like and, and learn from it. And I mean, like all, all of those are valuable perspectives. I don’t call any of them advice in a literal, like, you should do this based on your situation.

But education to me is very relevant. Getting perspective, just like I wanna know what it’s like on the other side of the mountain, I’ve never been there before, is incredibly powerful for us. And, and finding role models I do think is very powerful for a lot of people. Right? There’s, you know, it, it, it’s hard to visualize what it would be like to do the thing successfully if you haven’t seen other people that have done it successfully.

Role models have impact in lots of domains, and I think it absolutely applies in the context of a lot of our, our, I’ll just say our financial lives overall. Because the reality, again, if you wanna bring the, the psychology back into it, right? Part of it is knowing what to do, and part of it is having the confidence and belief that if you tried to do it, you would actually be able to succeed.

Right? The psychological construct of self-efficacy, if we don’t. Have confidence and believe that trying it would lead to success. We don’t bother to try. We give up or we self-sabotage. We don’t go down that road. And so seeing someone who’s done it and being able to see it and saying, wow, they tread the path, they made it through.

I think I can do it because I’ve seen that it can be done now is incredibly powerful for lifting self-efficacy when tied to education. Like now you know what to do. Or at least you know more information about it and you know how to, you know, that it can be done. And that’s incredibly powerful for helping a lot of people move forward.

I, I think that’s why masterclasses often get the momentum they do. Yeah.

Seeing the top of the mountain before you climb increases the efficacy of getting there, I would think. Absolutely.

Absolutely.

Og I wanna pivot just a little bit because at the beginning of this, in Michael’s piece for financial advisors, we talked about people that have, that are on the path right now, right?

The groups that we talked about, or maybe even the masterclass stuff that we were just talking about, but then also the scientific advice and people prefer one way or the other. How do we start to discern which way to go? Like as an example, we’ve talked before on the show that, um, you know, you’ve got a, if you’ve got a mortgage at a 3% interest rate, the math says, That, you know what, I should probably arbitrage and invest money and get higher than 3%, but the behavior shows the happiest retirees, and I see Dana smiling.

The happiest retirees are ones that don’t have any debt. So how do I start to parse between the tried and true payoff, your debt versus the spreadsheet math of three percent’s a great interest rate. Don’t mess with it. I

think ultimately it just depends on what kind of person you are, right? I mean, this is the same thing as like as, as it relates to, uh, let’s say you have credit card debt and you go, do I need the motivation of the snowball method where I’m like seeing progress every six weeks where I’m lopping off bills, even though it’s not the most efficient way of doing it?

Or do I find the most, uh, success in my life by following a rigid, very specific plan? I think personally that financial planning is so much behavioral above and beyond all of the data, because we all know what to do. My, my favorite phrase recently is if, if information was all that was required, we’d all be millionaires with six packs.

I don’t, I don’t know where I heard that from, but I love it and I say it all the time because we all know what to do, right? Spend less than you earn. Save some money, invest it. Don’t touch it. You know, diversify, like all of these kind of buzzwords, we know what to do. But it’s the act of actually doing it.

And sometimes we need a group of like-minded people. You know, we were talking, you were talking about like Facebook groups or whatever, online groups. One of the benefits of that is just the pure motivation. I know when I had a ton of debt, I remember listening to Dave Ramsey going, this dude’s motivating me to pay this stuff off.

And now I listen to Dave Ramsey and I go, man, he’s kind of a jerk. You know? But it was the messaging messenger at the right time. And so a lot of these decisions, I think are around your personal motivation and around what, what will drive you to be successful. And that’s gonna be different for everybody from a professional standpoint.

We’re working with somebody who’s like Michael and Dana, super analytic into the spreadsheets and, and graphs and all that sort of fun stuff. We better come with it, you know? ’cause I can’t just talk about rainbows and sunshine with those two and go, it’ll be fine guys. And you know,

right. They’re not gonna be super excited

about that.

They’re not gonna believe, let’s just hug it out and it’ll be okay.

Yeah. But by the same token, and we’ve talked about this, I don’t know, Wednesday, on Wednesday show, if you have a partner or or somebody in the planning relationship who’s not that, and that’s all you do is just jam spreadsheets down, you know, Adam, then you’ve lost them too.

You know? So I think the best way to handle this from a personal standpoint is quite literally to go know thyself. What gets me going? Is it the analytic very specific stuff? Or is it the motivation and the, the, the view from the other side of the mountain, like Michael said, that somebody else can provide me.

You know, do I need somebody to pull me or am I gonna push it

myself? I think you did a, a great job, OG of setting up what I want our guests to help us with and which I think is a question that you already answered, which is ultimately around us, we’re trying to make better decisions, which for me has always meant I wanna have this board of directors on my team.

Right? I want these people that are smart people. And it’s funny, whenever I read the non-financial media people talking about this, the people that are talking to the, the people that listen to Stacking Benjamins, they always talk about, okay, make sure they’re fee only. Make sure that they’re, uh, they’re a fiduciary.

And I’m like, that crap is all fine, but I want people I know who are in my corner, who seriously have my back. And that’s gonna be my, my, my team. Like, I look at advisor even more, I guess more, uh, holistically than just this checkbox thing that the industry provides. Or you know, how they’re, Michael, you talked about how they’re regulated.

Yeah. That’s all fine and good. I need deeper than that. What is a thing I, I’d like both of you and Dana, we’ll start with you. Give us a trait that I should be looking for, for somebody who’s gonna be on my board of directors. If I’m starting to put that together, what’s the trait I really want on my team?

I think you wanna

be able to know they’re gonna communicate to you in a way you can understand, so we actually say this, that I have in some of my articles or materials, like you should go into an advisor with a set of questions, some of which you know the answer to. I mean, it could be something simple like, you know, how do you decide my ratio of stocks to bonds?

Or should I pay off my mortgage? Or something that you have some perspective on and you just wanna see how they answer the question. And, you know, are, are they answering in what you consider a, you know, a broad way? Are they covering all of the bases? Are they talking in language you can understand or are you kind of thinking, wow, they just went spinning in circles?

I don’t really know what they just said. You know, we talk a lot in terms of, you, you do the math. A lot of financial questions can be answered analytically in a spreadsheet. We can come up with an answer, but that’s not always the answer. Sometimes the difference between paying off your mortgage or not might make $5,000 difference over a 10 year period, right?

You go, well, really, does that move the needle? No. So then, you know, you have to be able to separate that from the emotional side and, and you want someone that can communicate across those different dimensions and, and someone that you can understand. They’re not just talking lingo and talking down to you.

always got frustrated when I would hear people say, you know, I meet with my financial advisor. I have no idea what the hell they’re talking about. Like, I have no idea. They’re showing me these charts and graphs and I just kind of nod my head and, Hey, it looks like we’re doing good. Looks like we’re great.

’cause I, I

feel stupid. Fine numbers are up to the right. That’s like good. Right. Exactly. Up to the right is good.

I feel, you know, and, and definitely you should be in a, in a situation where you don’t have to say, well, I don’t wanna feel stupid, so I just nod my head like, that’s horrible. But I also think, Dana, while you’re talking, you know, when you’re bringing up those examples, I like it when the person on my team answers my question with a question because that means they actually wanna know more about me.

Right. Uh, should I pay off my mortgage or should I invest? Well, let’s talk about you first. Oh

yeah, that’s a great perspective. You know, if, if you ask a question and they just spout off an answer without having gathered any data about you at all annuity, well,

mund net net funds, right?

Exactly. Does that think reverse mortgage? Reverse

mortgage? No. I think it got like merged out of existence a long time. I mean, it lost basically all its assets after it lost 90% of its value. It’s not, and I,

that’s like a blast from the past. Like the one hit Wonder bands that you’d see and you’re like, what happened Tom net that he,

he literally had like a poster on his wall.

’cause he was one of their Sure. Big selling buyers. Like m send him a poster. I think he had like a giant, like a three foot poster of this thing that’s on his wall. Fabulous. Like, I still remember the vision of

it. Michael, what’s another trait we should look for in, in people that are gonna be on our board

of directors?

Well, Dana took my primary ones, like everything she said. I’ll add to that by saying education and expertise matters. So again, like from the legal perspective for financial advisors, like we need a two to three hour regulatory exam you can study for in a couple of weeks, and that’s it. You don’t need any classes in finance or advice to be a financial advisor.

Like that’s the really sad, actual truth of it. So if you’re finding someone to get advice from, like to be on that team, you need someone that actually chose to go get some additional education beyond that. So that starts with designations like C F P certification. There are now a growing crop of, I call them like the post c f P designations for advisors that go even deeper in that direction.

You know, retirement folks have things like R M A or R I C P folks working with ultra high net worth have a C P W A designation for them. Uh, investment nerds go after C F A or cma. So there’s a lot of different, uh, additional designations out there. But to me it starts with sort of two pieces. One, Like, do I see some education that says they’ve gone above and beyond the the regulatory minimum?

So that’s either degrees, right? You can get financial, you can get undergraduate and graduate degrees in financial planning. Now you couldn’t 20 years ago. So more experienced advisors probably won’t have them ’cause they literally weren’t around. But do they have degrees or do they have designations that show material effort of study above and beyond the regulatory minimums?

I distinguish that a little bit from expertise. Expertise is okay, like I’m glad, I’m glad you have the book knowledge. You do need that. Like, I want my doctor to have gone to medical school, but I also want them to actually have experience working with people like me. So to me like the, there’s an education and expertise component.

Education is essentially if you got in the book knowledge and invested that far. ’cause it’s sadly not a requirement. The expertise question is, tell me about other people like me. That you’ve worked with. Can the advisor answer that question? And like, it’s not because you are supposed to do what their other clients do, right?

The nature of advice is, is individual to person. But when we get back to those comments earlier of like, I go to my Facebook groups and my master classes in part because I want education, I want perspective of people who’ve gone the journey. So if I’m getting an advisor, like I want an advisor who’s actually had the perspective of seeing lots of people, yeah, do this journey.

So they can actually be a meaningful guide for me as I go on this journey. So beyond the communication and that, that Dana highlighted, like that’s where I would go next is do they have both education? Have they invested in their learning to know more advice, things to be able to share and, and they actually have expertise in working with people like you?

Because there is a wide range of folks out there. There are a wide range of advisors and there’s, there are wonderful advisors. Who don’t know about your situation and your needs and problems, right? Like I know a wonderful neurosurgeon. I’m not gonna ask him to operate on my knee. If I hurt my knee, like I’m gonna go find a knee doctor.

Not the most brilliant brain doctor. ’cause they just do different things. They can be really, really good doctors and not be able to help you with your problem. The same thing applies in

financial advice. Well, like OG said that it really, if it starts with you, right? And then Dana communicating, and then you’ve got the background and knowledge.

So I love all three of those. I’m gonna add a fourth of my own that I really like. I think that your advisors should challenge you and challenge your thinking without disrespecting you. Like where you clearly know they’re on your team, but they go, I think you’re messing this up. ’cause the last thing I need is another person going, Joe, you’re brilliant, Joe.

That’s great. Like I, no, that doesn’t really help. You don’t hear that very

often, Joe. So you could use actually one

or two people saying that. I can’t, I you can’t tee that up for

us, man. I just gotta tell you guys. I could hear that a little more frankly, but I think that’s a great place to leave it. Um, and by the way, we’ve had other, uh, episodes where we’ve talked about hiring advisors and things to look for.

We’ll have those on our show notes page at Stacky. Benjamins. Let’s find out what’s happening with all of you this weekend. Oh, gee, you and I are headed for podcast movement. We’re going to Denver.

Ooh, that’s right.

To we’re, uh, feeling the jet as we speak. Well, may, maybe not,

hopefully Monday

morning, we’ll be few.

Hopefully Monday, Monday morning we will be there. We’d love to have a meetup, but unfortunately we’re not gonna be able to do that. So Denver, next time, we will hit you. When, when we’re there, uh, we’ll have our guest of honor Michael, go last. Uh, Dana, that doesn’t mean you’re not a guest of honor, it just means you’re the frequent flyer here.

I. What’s going on at what’s going on at Sensible Money right now?

Well, since you brought up masterclass, I will say I have a course on the great courses. I think of it as like masterclass. Yes. Before there was masterclass,

right? The OG

Masterclass. Sometimes I’ve called the great courses like masterclass, but not quite as cool.

They just, they just, their branding is, you know, it wasn’t quite there. But yes, it’s called How to Plan for the Perfect Retirement. And uh, so if anyone’s looking for more, they can find that. And I will also add, I am getting married September 1st. What? Yay. Uh, if you ever wanna do an episode on prenups, we’ve made it through that process and, uh, fascinating.

And so, uh, I would highly advise it. And it’s, it’s kind of a cool topic, Dana.

I’ll indicate it on my, uh, response card, but chicken for me and my plus one, we’ll do the chicken, not the seafood. Just

have now that you had Doug are BFFs. Yes. His plus one is the Tasty freeze, uh, manager. Yes, by the way, just letting you know, Michael, thank you so much for joining us again.

It’s been too

long, man. Yes, it has. It has. We’ll figure out how to do this in not quite seven year interval. That’s right. I, we can get this going a little bit more frequently. I hope so. ’cause

I think our stackers got a lot out of you being with us today. And thank you very much. What’s going on on your two podcasts?

Let’s talk about it. Oh

man. Um, we’re just continuing to chug along, uh, you know, kites and Carl end of things. Just one episode after another. Digging deep into, uh, as you said, like we, we are sort of bordering on, on business owner entrepreneur therapy at this point is, is I think a little bit of what the, the podcast is morphing into and all the, all the challenges that we face on the, uh, on the advisor end.

Um, you know, financial advisor success. We’re coming up on episode number 357 plus years. Freaks me out a little bit. You know, we have hundreds of hours now, uh, for folks that are exploring financial advisor world. If you heard like the good version of this and you’re actually curious about. More of what it’s like, just a, a big piece of the podcast for us is to what you said earlier, it’s that perspective piece of, if you really wanna know what it’s like from people in the trenches, just that’s what we do.

One conversation after another for you. Really get to see other,

other side of the desk. You get to see the life from the other side of the desk. It’s super interesting. We’ll link to both podcasts on our show notes at at Stacking Benjamins dot com. You haven’t had the best advisor on yet, though, og You’re, you’re saving OG for like the 400th episode or

something.

Absolutely. Like, we gotta save, but you gotta do big milestone guess on milestone. You run a podcast, see how this works. Like big guess on milestone episodes.

Absolutely. All right. That’s gonna do it for today. Uh, Doug man. Lots of takeaways, but, uh, what are our top three? Well, Joe, first

go with what works.

Behavior wins the day every time, even if the science tells you something else is optimal. Second, eating a dozen donuts every morning might have helped that one guy lose weight, but it doesn’t mean it’ll work for your lazy butt. Same goes for financial advice. Make sure you weigh the advice against your unique goals to see if it’ll benefit you.

Now, what the hell? Go ahead and eat the donuts. Third. Joe, you’re brilliant. I could listen to your sage wisdom all day long, but the big lesson, okay, look, I, I know this has nothing to do with today’s episode, but learn from something I just learned. Speaking of air, it’s probably a good idea to ask before hanging clothes to air dry in the neighbor’s line.

Some people get a little itsy when they come home to another man’s clothes drying in their yard. I’m like, look, lady, the wind and the sun were better in your backyard. I don’t think she would’ve been so upset if she didn’t have a guilty conscience, and I think it was the size of my inseam that upset her husband.

Oh my God.

Thanks to Michael Kitsis for joining us today. You’ll find Michael Kitsis and Carl’s podcast. And is Financial Advisor Success Podcast wherever you are listening to us right now. Thanks to Dana on SPA for joining the fund. Today, you’ll find dana@sensiblemoney.com. We’ll include all the links for Dana and Michael in our show notes at Stacking Benjamins dot com.

Thanks also to OG for joining us today. Looking for good financial planning. Help head to Stacking Benjamins dot com slash OG for his calendar. This show is the Property of SSB podcasts, LLL C, copyright 2023, and is created by Joe Saul-Sehy. Our producer is Karen Reine. This show was written by Lacey Langford, who’s also the host of the Military Money Show.

With help from me, Joe, and Doc G from the Earn and Invest podcast, Kevin Bailey helps us take a deeper dive into all the topics covered on each episode in our newsletter called the 2 0 1. You’ll find the 4 1 1 on all things money at the 2 0 1. Just visit Stacking Benjamins dot com slash 2 0 1. Tina Ichenberg makes the video version of this show.

Once we bottle up all this goodness, we ship it to our engineer, the amazing Steve Stewart. Steve helps the rest of our team sound nearly as good as I do right now. Wanna chat with friends about the show later? Mom’s friend Gertrude and Kate Youngin are our social media coordinators, and Gertrude is the room mother in our Facebook group called The Basement.

So say hello. When you see us posting online to join all the basement fun with other stackers, type Stacking Benjamins dot com slash basement. Not only should you not take advice from these nerds, don’t take advice from people you don’t know. This show is for entertainment purposes only. Before making any financial decisions, speak with a real financial advisor.

I am Joe’s Mom’s neighbor, Doug, and we’ll see you next time back here at the Stacking Benjamin Show.

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