Episode 151
Financial Advice, Rip Off Alert
Understanding your personal finances means treating them like a business, and that's exactly what this episode of Ditch the Suits emphasizes.
Travis and Steve dive into the importance of recognizing yourself as the boss of your financial situation, encouraging listeners to engage with financial advisors as if they were hiring employees.
They discuss the pitfalls of over-reliance on financial professionals who may not have your best interests at heart, and how to spot red flags in the financial services industry.
Throughout the conversation, they highlight the necessity of being proactive and informed, ensuring that you delegate effectively while maintaining oversight of your financial decisions.
This episode aims to empower listeners to take control of their money business and make informed choices for their financial future.
Takeaways:
- Understanding your finances as a money business can empower you to make better financial decisions.
- When hiring a financial advisor, ensure they communicate in terms you understand clearly.
- Don't let intimidation from financial jargon prevent you from being an informed client.
- It's essential to treat your personal finances with the same diligence as running a business.
- Being proactive about your financial planning can save you from costly mistakes down the road.
- Look for financial planners who prioritize your best interests over their commission-based sales.
Transcript
Foreign.
Speaker B:Welcome to Ditch the Suits podcast where we share insights nobody in the financial services industry wants you to know about.
Speaker B:We're here to help you get the most from your money in life.
Speaker B:So buckle up and welcome to Ditch the Suits.
Speaker B:Well, this is the last episode where we want to bring this one to a close.
Speaker B:You know, in our last episode we talked about our real experiences and really why we love helping people through the power of financial planning.
Speaker B:But you know, there's a many professionals you can go out and hire.
Speaker B:And so in this episode we want to really help you understand how to engage with the right financial planner.
Speaker B:You know, we're going to share what you need to be aware of how that spider sense can go off when you're dealing with somebody.
Speaker B:Because as you've alluded to, the financial services industry is one big marketing machine.
Speaker B:So how do you know when you're getting authentic truth?
Speaker B:How do you know when somebody is working in your best interest?
Speaker B:And what do you need to know to create that life giving experience that we talked about?
Speaker B:So, Travis, was there anything really?
Speaker B:Obviously our passion came through at the beginning, but anything for this one is kind of a teaser to get people excited for.
Speaker A:This is my favorite topic.
Speaker A:It's the money business.
Speaker B:There we go.
Speaker B:And I, and I think this is fun because you say money business, right?
Speaker B:We're tracking into year four.
Speaker B:This was what we alluded to and started Ditch the Suits with.
Speaker B:So we're kind of bringing it full circle here, you know, with this podcast to talk about money business.
Speaker A:And I'm a lot of gray hairs.
Speaker B:Ago, I'm gonna have you talk about it, but welcome to Ditch the Suits.
Speaker B:Obviously we've been starting here.
Speaker B:I'm Steve Campbell serving as your senior director at Seed Planning Group.
Speaker B:Travis, four years into this thing, you know, we're aging a little bit.
Speaker B:He serves as our CEO at Seed and this show is all about us bringing our years of experience working as a fee only financial planning firm about the things we talk about with people just like you every single day.
Speaker B:So it's our experiences and as you said, how fun right at the beginning.
Speaker B:Money business, it's your favorite topic.
Speaker B:Somebody might be thinking, I don't own a money business.
Speaker B:What in the world are you talking about?
Speaker B:Why don't you set the stage when you say money business, why you're passionate about this and what this really means.
Speaker A:Do you know that the vast majority of small businesses in the country make less than $1 million in revenues per year?
Speaker A:So if you have a million dollar portfolio, you have more going on as far as financial value than the vast majority of small businesses out there.
Speaker A:Yeah, we look at small business owners and we go, oh, you know, I have a friend, he's a, he's a really savvy small business owner.
Speaker A:That person must be really smart because they have a small business.
Speaker A:Or you know, we look at small businesses and we, we think about, you know, the opportunities with small businesses and what it takes to be successful in small business and everything like that.
Speaker A:And then we look at ourselves and we're like, but I'm not that, that person.
Speaker A:All a small business owner is doing is managing resources.
Speaker A:That's, that's what it, that's what a business owner or executive does.
Speaker A:They manage resources.
Speaker A:How they manage a resource will depend on how will, will result in the success of the business.
Speaker A:If they're not good at it, you're not gonna have good results.
Speaker A:If they are good at, you will have good results.
Speaker A:So if you have a million plus or if you're quickly accumulating, you have a high income, you have a half million dollar income and you're accumulating assets quickly, you, you are really no different than that guy who owns the business.
Speaker A:So you are running a money business.
Speaker A:And I think there's lessons to learn from that business owner that you know, that you can actually use in your own financial stewardship.
Speaker A:So that's why I love this concept because it says, look, you're not that different from that other guy.
Speaker A:You're just, you're seeing the, you're looking at the world through different prisms.
Speaker A:But if you, if you manage your money well, a lot of the same skills, it's going to make that business owner successful.
Speaker A:They're going to pair up a little bit.
Speaker B:Yeah.
Speaker B:So I mean, when we're saying that, right, you should own a money business or run a money business, I think now contextually we understand what that means, but we've also been kind of talking about the financial services industry too, and what, how they typically approach it.
Speaker B:So you're saying approach it like a money business.
Speaker B:But we've also explained over two episodes what people maybe are getting or not getting.
Speaker B:So maybe where is the differences or where's the breakdown that people are experiencing?
Speaker A:This is one of the things I love about what we do at Seed.
Speaker A:We, we kind of have the Tesla approach.
Speaker A:This, it's, it's kind of like I don't care how, what the rest of the world says about outsourcing, we're going to understand how things are put together.
Speaker A:And things that we can put together better in house by cutting out middlemen, we're going to do that.
Speaker A:And things where we need outside expertise, like very, very high level subject, like legal advice and stuff like that.
Speaker A:Yes, fine, we'll go, we'll go get that stuff.
Speaker A:That's essentially what Tesla has done with a lot of their technology development, things like that.
Speaker A:They looked at the service providers and they said, look, you're telling us this is the only way to do it.
Speaker A:That's how you guys do it, that's how you guys get paid.
Speaker A:We're going to do it more efficiently by bringing it in house and figuring out a better way to produce it right through our production lines.
Speaker A:That is contrary to traditional business advice.
Speaker A:If you go get an MBA and you learn about business, everything's outsourcing.
Speaker A:Our entire industry, everything's outsourcing.
Speaker A:Steve, you're an asset gatherer.
Speaker A:You don't do the investment management.
Speaker A:You send the investment management to some SMA separately managed account or mutual fund company, they'll manage it for you.
Speaker A:That's not your job.
Speaker A:You outsource that because you shouldn't be spending your time on that stupid stuff that you're not an expert on.
Speaker A:You should be spending your time just smooshing people.
Speaker A:So what they're saying is, Steve, you don't know nothing about investing.
Speaker A:You shouldn't know nothing about investing, but go sell investments to people who are trusting you with their investments, but give them to us, we'll take care of them.
Speaker A:You still don't know nothing about investing.
Speaker A:And if you question us, we're going to tell you to shut up because that's not your job.
Speaker A:But you need to go back and tell the client to trust you because we got it under control.
Speaker A:Right?
Speaker A:So that's, that's the, that's the yin and yang in our industry.
Speaker A:It's like you're, you're getting pulled back and forth.
Speaker A:And the whole thing is about outsourcing.
Speaker A:Outsource your client management, outsource your admin, outsource your compliance, outsource this, outsource that, outsource this.
Speaker A:Right?
Speaker A:That's the industry.
Speaker A:The industry is so focused on that that what happens is, is that you get advisors who are working with clients and everything is focused on just whatever's easily quantifiable because there's not a lot of depth.
Speaker A:There really isn't, outside of generic kind of industry jargon filled, you know, this is the way it is, this is the way it should be type of stuff without, I Always love that a wholesaler would come in and.
Speaker A:And they'd be giving her spiel.
Speaker A:And I throw out like a curve ball and say, but what about in this situation?
Speaker A:And they would just glare at me because it's like, why are you interrupting me?
Speaker A:That's not how my spiel works.
Speaker A:And it's like, because that's how life works, right?
Speaker A:So we've got the.
Speaker A:The industry is focusing on things that are easily quantifiable, like, how big is your money?
Speaker A:You know, how big's that pile of money you got?
Speaker A:Right.
Speaker A:That's why when you see all these commercials and stuff, when you.
Speaker A:When you watch finance commercials and, you know, commercials are trying to sell you on investment management and stuff, they're always focusing on really, like, primitive concepts.
Speaker A:Like.
Speaker A:Like.
Speaker A:Like just.
Speaker A:They're arguing over all the same stuff, and it's really primitive stuff.
Speaker A:It's like, you know, don't you want to own a yacht someday?
Speaker A:You know what I mean?
Speaker A:Or.
Speaker A:Or, I don't know.
Speaker A:It's.
Speaker A:But it's.
Speaker A:It's really quantifiable, easy to understand concepts.
Speaker A:They have.
Speaker A:No.
Speaker A:Like, how much money should you have when you retire?
Speaker A:Right.
Speaker A:Studies show that you should have $2 million or something like that.
Speaker A:That doesn't make any sense.
Speaker A:If you have a $80,000 pension and you're in the state of New York and it's New York pension, what's that?
Speaker A:$80,000 actually.
Speaker A:$80,000 a year pension, actually, worth, in real dollars, maybe 2 million bucks.
Speaker A:You're already there.
Speaker A:You don't have a pile of money.
Speaker A:You have a pension, but you're there.
Speaker A:So that investment company who's telling you that you're no good if you don't have $2 million, that's misleading, right?
Speaker A:Or people who, oh, you could lose everything.
Speaker A:I knew this guy who lost all of his investments, right?
Speaker A:Let's help you avoid that situation.
Speaker A:We're talking about the pile of money.
Speaker A:We're talking about risk, but we're not talking about the nuances of the risk.
Speaker A:Like, yeah, he also happened to buy, you know, all penny stocks or something crazy like that, right?
Speaker A:Like, it's like, you know, come on.
Speaker A:Or he was undiversified.
Speaker A:The industry focuses on balances.
Speaker A:And like, like.
Speaker A:Like I said, the balances.
Speaker A:But the pie chart.
Speaker A:My pie chart.
Speaker A:Better than your pie chart, right?
Speaker A:So easy things to look at and say, wow, look, that pinwheel has got five sections.
Speaker A:This one's got six.
Speaker A:That one's got four colors.
Speaker A:This one's got, you know, Seven colors, therefore that must be better.
Speaker A:But they don't talk about correlation.
Speaker A:You don't see on your statement value of anything.
Speaker A:All you see is price on everything.
Speaker A:Why do they keep it like that?
Speaker A:Because if you don't understand price to value, you can't really make good decisions for yourself.
Speaker A:You can't really figure out if there's actual real value in your portfolio, right?
Speaker A:So there's a lot of things that I think are being done and a lot of things that are sold to people, you know, at surface level type of stuff.
Speaker A:Think about crypto and the meltdowns that we had and years ago with, with all the Ben Affleck and all the Tom Brady and the FDX thing and how it went under and those guys all got sued because everybody lost their shirt.
Speaker A:Think about that craze.
Speaker A:It was all about how you could just get rich.
Speaker A:You could get rich.
Speaker A:You could get rich without talking about the fact that it's not even a real investment, right?
Speaker A:Like.
Speaker A:Like you're trading baseball cards, but.
Speaker A:Because I can show you how fast your pile of money can grow and you don't want to miss out.
Speaker A:Look at my chart.
Speaker A:We're site, so we're signing up for really like it's.
Speaker A:It.
Speaker A:Everything's about how pretty something looks right now.
Speaker A:Without thinking about does.
Speaker A:Does beauty always age well?
Speaker B:Right.
Speaker A:If I only.
Speaker A:If I only get married for looks, am I really going to be happy 40 years from now?
Speaker A:You know, I talk to somebody who's been married for a long time.
Speaker A:You know, it's not the looks that are going to make you happy in 40 years.
Speaker A:You know, if it is, you're probably a little bit shallow.
Speaker A:But yes, certainly we want to be attracted to our loved ones.
Speaker A:But still, it's not the looks that are the most important thing, right?
Speaker A:If you, if everybody's beautiful, but you can't stand each other in a room, not gonna last very long, right?
Speaker A:If all the charts are beautiful but the darn thing doesn't perform, you're not going to get where you want to go.
Speaker A:Overly focused on index funds and complex.
Speaker A:This is a funny, funny thing.
Speaker A:Listen, Steve, nobody can figure out the markets, so you should buy an index fund, right?
Speaker A:You put it in there, it's cheap, you just get the average, no worries, right?
Speaker A:And overall the average goes up and nobody can really beat the average.
Speaker A:So you just buy that.
Speaker A:Or you should buy this really complicated product that's got 200 pages of legally in it and a disc so you could put it in your computer and learn about it or whatever.
Speaker A:Right.
Speaker A:This really complicated product that allows you to take risk in the market and it guarantees you a minimum amount of return in return for, for, you know, capping the amount of performance that you can make if you make, you know, so we'll give you a 4%, but if you really made, made 10%, you know, we're going to keep the extra, you know, type of thing like we, so we go from there's nothing you can do about it to you have to rely on our plain vanilla product and there's no, no reason you should ask any questions because nobody can do good, which is just a childish statement on its surface.
Speaker A:Right.
Speaker A:And it's just you can't support it statistically.
Speaker A:And the studies that they have where they go, oh, active managed fund versus index funds.
Speaker A:First of all, you have to take all the different share class, share classes into account.
Speaker A:You have to take the life cycle of the actively managed fund.
Speaker A:And then you also have to take into account the fact that there are more non registered actively managed portfolios out there than there are mutual funds out there.
Speaker A:So it's just, it's B.S.
Speaker A:it's junk statistics.
Speaker A:So we do that and then, or the complex products because you know what, you do need to take some risk so you can make some extra money.
Speaker A:Maybe you want to take more risk than that index, but it's not going to work out.
Speaker A:So if it doesn't work out, here's a minimum that you can have.
Speaker A:You're trading something for that minimum.
Speaker A:And.
Speaker A:But both of them make you reliant on the machine.
Speaker A:Both of them make you committed to helplessness and essentially, you know, the good graces of the product designer.
Speaker B:Let's take a quick break to hear from our sponsor.
Speaker B:This episode is brought to you by Not Quite Right Media.
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Speaker B:Their podcasts unapologetically broadcast genuine truth to whoever wants to listen.
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Speaker B:So start following their shows today at www.nqrmedia.com.
Speaker B:that's nqrmedia.com but I think sometimes when you're talking about money, it's so overwhelming that people don't want to go down that path because they don't understand it.
Speaker B:So they shy away.
Speaker B:You know, it's the new Year, people are thinking about their health and being the best versions of themselves.
Speaker B:Let's say you went to go hire a personal trainer.
Speaker B:If when you came to the trainer, you said, hey, I'm at this state, what should I do?
Speaker B:And they immediately did something they do with everybody else without ever doing some kind of fitness check or understanding your blood rate or how you consume food, what kinds of food you can eat, when can you train?
Speaker B:You would never sign up.
Speaker B:And so we have these senses when we go do other things in life where we're like, this isn't exactly what I wanted because you didn't get to know my unique situation, my health, what I have equipment at my house, you know, how I respond to food.
Speaker B:I think when it comes to money, and sometimes when it's such big numbers, people don't feel comfortable pushing back against professionals because they don't always know what.
Speaker B:What to ask or what they should be looking for.
Speaker B:But I will say that in over a decade of speaking with people, you know, across the country, I would say that the average consumer is waking up and at least starting to ask questions of the fact that I love when people call in and they're like, hey, can I start by asking you some questions?
Speaker B:And I'm like, sure, what do you got?
Speaker B:And you can tell that they've been doing their research.
Speaker B:Are you a fiduciary?
Speaker B:Where's your form?
Speaker B:Crs?
Speaker B:Can I see your adv?
Speaker B:You're like, dude, I love this.
Speaker B:What?
Speaker B:Let's keep going.
Speaker B:And it's fun for me because you're like, you are.
Speaker B:You are along the right path.
Speaker B:And so I think there is a rise of, like we talked about in the first episode, the larger broker dealer numbers are starting to go down.
Speaker B:But also, I think the savviness or the awareness of consumers is also going up.
Speaker B:So there's this, like, sweet interaction that's happening right now where professionals are trying to put themselves in the best position to be able to do the right things for people, regardless of what's going on.
Speaker B:And consumers are also saying, hey, I'm looking for that type of planning from somebody who doesn't have conflicts of interest across the board and selling me products, but can really come alongside me and my wife because we got kids, we have passions, we have desires.
Speaker B:We want to make sure we're doing these things.
Speaker B:And this is kind of the money business, but this is not what's happening for most people.
Speaker B:So, again, I think there's been an overgeneralization, like you talked about, where it's about balances and accounts and investments.
Speaker B:But there are people that are saying, yeah, but what do I do about my taxes and some of these other areas?
Speaker B:So then, you know, how does focusing on the money business, right.
Speaker B:You just laid out these three areas, easily quantifiable.
Speaker B:Focusing on investment accounts or the overgeneralization of index funds or overly complex products.
Speaker B:How does money business help?
Speaker B:Like, focus our intentions.
Speaker A:It changes your perception of everything, helps you see through all this garbage.
Speaker A:So if you were running a business, if you wake up every day and you're in charge of making sure the lights are on in a business, it is important how you perform, and it's important if you show up on Monday, right?
Speaker B:Yep.
Speaker A:I mean, it's just that's, that's.
Speaker A:If you're running it and you're responsible for whether or not this business is open tomorrow, it's going to be obvious.
Speaker A:If you screw up on your personal finance stuff, it can take a long time to manifest, though.
Speaker A:It could take a long time to figure out if you screwed up.
Speaker A:Right.
Speaker A:So we could take lessons from, from running a business and kind of start to apply them to ourselves.
Speaker A:For instance, when you run a business and you need services, you need technology, you need supplies, you need products, you know, you need shipping, all that kind of.
Speaker A:You need.
Speaker A:You need somebody to answer the phone.
Speaker A:What do you do?
Speaker A:You go out there and you do your due diligence on vendors, right?
Speaker A:Which vendor, which payroll company you're going to use, who does the best job, what do they charge, what extra benefits do you get?
Speaker A:Right?
Speaker A:Can you get customer service, that type of thing?
Speaker A:What happens if your rep's not there?
Speaker A:Those types of things.
Speaker A:Anybody who's dealt with payroll providers knows, you know, there can be days where it's not very fun, and there's times sometimes where you know, the payroll provider you had, you got to switch, because that's no longer doing a good job for you.
Speaker A:You have employees, you're going to go out, you're going to hire an employee.
Speaker A:Now, employee.
Speaker A:This is where it's harder being in business, because when you hire an employee, it's a lot harder to fire an employee than it is for you as somebody running your own money business, AKA your finances, you know, your portfolio and that kind of stuff.
Speaker A:It's a.
Speaker A:It's a lot easier for you to fire somebody.
Speaker A:People don't understand this, right.
Speaker A:They're afraid to rip off a band aid.
Speaker A:But if you have an employee that doesn't show up, doesn't do their job, or their performance is poor, or they, they.
Speaker A:They literally can't explain what their job is.
Speaker A:Or every time you ask them a question, you get a convoluted answer.
Speaker A:Or, you know, let's say they're supposed to develop in order to get more compensation.
Speaker A:I want a raise.
Speaker A:I'll give you a raise if you get better at what you' if you had an employee that didn't deliver on any of those things, would you fire the employee?
Speaker A:Yep.
Speaker A:The only time you wouldn't is if it was like your kid or your girlfriend or something, in which case you just swear under your breath.
Speaker A:This completely sucks, but I'm going to get this owned if I do it right.
Speaker A:Also a bad reason to have family members in your business.
Speaker A:Different story, different day.
Speaker A:But that's the thing.
Speaker A:You want to keep a bad employee, you'd get rid of the employee.
Speaker A:So when you flip the script and you start looking at, you know, anybody that's going to help you with your finances as an employee or a vendor, you start to look at them and say, what are you bringing to the table here, man?
Speaker A:What am I giving up?
Speaker A:And when they say, you don't give up nothing, you don't talk to them ever again.
Speaker A:Guaranteed you.
Speaker A:I have people who say, well, I bought that annuity because I don't pay anything.
Speaker A:Or I bought that, you know, structured note because I don't pay anything.
Speaker A:You honestly think that there's banks and finance companies, insurance companies that are selling you a product where you can make money and you don't have.
Speaker A:They don't make anything on it, you don't pay them anything.
Speaker A:There, there's a mutual fund that you can buy with no fees, and the mutual fund company doesn't make any money.
Speaker A:That's that.
Speaker A:No, that's not, that's not how that works.
Speaker A:That's literally.
Speaker A:That's just.
Speaker A:You would never have an employee that works for you for free.
Speaker B:Correct?
Speaker A:Right.
Speaker A:Or a good employee, Let me put it that way.
Speaker A:Right.
Speaker A:That's just not how that works.
Speaker A:So when you can look at the people that you're engaging with and say, what are you doing?
Speaker A:How are you developing?
Speaker A:How is that benefiting the business?
Speaker A:How's that helping the business hit its goals?
Speaker A:All of a sudden you look at people as real professionals and you say, I expect you to be a professional, not an asset gatherer.
Speaker A:Don't come in here every single day.
Speaker A:Every time I see you, if you ask me for a raise, I don't want to see you anymore.
Speaker A:Right.
Speaker A:But that's what an asset gatherer does every time they see you, they sell you an insurance product or they sell you another thing that they make a commission on or another trade that they get a commission on or you got to bring in more assets or something like that.
Speaker A:You wouldn't put up with it with an employee.
Speaker A:Don't put up with it with your financial people that are in your life.
Speaker A:Get the right voices around you.
Speaker A:When you run a good business, you want subject matter experts that can tell you when you're doing something stupid.
Speaker A:Right.
Speaker A:A couple episodes ago, we used the quote, you are where you deserve to be.
Speaker A:No, no, I'm sorry.
Speaker A:Everything happens for a reason.
Speaker A:Unless you made a stupid decision.
Speaker A:Right?
Speaker A:Yep.
Speaker A:I think.
Speaker A:I think you could also say that.
Speaker A:Well, yeah.
Speaker A:No.
Speaker A:So anyway, that's a quote.
Speaker A:So if you've made a stupid decision.
Speaker B:And you knew, or if you knew that something was wrong and you didn't do anything about it, which may be what these first two episodes of Help keep going.
Speaker A:Yeah.
Speaker A:So you need to get the right voices around you to tell you when you're making a stupid decision.
Speaker A:If you still want to make it.
Speaker A:Make the decision.
Speaker A:After they voice concerns, that's on you.
Speaker A:I've had that conversations with clients before.
Speaker A:Look, I will.
Speaker A:I will voice my concern.
Speaker A:Like you're doing stuff.
Speaker A:Okay.
Speaker A:It's kind of on the edge of what you probably should be doing, but it's not going to jeopardize you if it gets to the point, it's going to jeopardize you.
Speaker A:I'm going to step in and say, you got to choose between me and that action.
Speaker A:Basically, we're not.
Speaker A:We're not going there.
Speaker A:We're not doing that.
Speaker A:You're going to hurt yourself too much, and I don't want to be a part of it.
Speaker A:Or, look, you can do that, and this is the ramifications of that, just so you know.
Speaker A:And we're signing off right here saying, I've told you not to do that because I don't want you coming back in two years saying, hey.
Speaker A:And we had people who did that during COVID We learned a valuable lesson during COVID Next time a client calls me up and says, I know unemployment rates, 40%.
Speaker A:This time's different.
Speaker A:The world's going to hell in a hand basket.
Speaker A:Sell all my investments.
Speaker A:I guarantee that client will call in about three months and say, why didn't I make any money when the market recovered?
Speaker B:Yeah.
Speaker A:Because that's what happens over and over and over again.
Speaker A:And what you really need is the advisor that says, no, we should not do that.
Speaker A:Now, it's your money.
Speaker A:If you want us to do it, we'll do it.
Speaker A:But we're going to stomp our feet every step of the way because it's not good for you, right?
Speaker A:Or at least we're going to try to articulate why it's not good for you.
Speaker A:And if you hire good employees, you listen to them, right?
Speaker A:You want to help avoid shiny objects.
Speaker A:Some of the best business leaders out there will tell you, it's not what I said yes to, it's what I said no to, right?
Speaker A:It's not the opportunities I took, it's the opportunities I didn't take.
Speaker A:In finance, there are a million things you could invest in.
Speaker A:Should you buy gold today?
Speaker A:I don't know.
Speaker A:Should you buy crypto today?
Speaker A:I don't know.
Speaker A:Should you buy Apple today?
Speaker A:I don't know.
Speaker A:All I can do is put discipline around you and structure, right?
Speaker A:So that when all these distractions, all these different directions you can take.
Speaker A:When a new direction pops up, you don't blow up what you're doing to chase that shiny object.
Speaker A:And then it doesn't work out.
Speaker A:Right?
Speaker A:Like you, sometimes you just need somebody to say, yes, you could go that way, but you don't need to, right?
Speaker A:Yes, you could cheat on your spouse, but you don't need to.
Speaker A:You need somebody that's going to tell you that if you're in business, you know, yeah, we could launch a new product, but we don't need to, or it's not the right time to, or we don't have the expertise to do it.
Speaker A:Right?
Speaker A:You need somebody like that on your personal finance side too.
Speaker A:Yes, you could do that, but maybe don't put everything you have into it.
Speaker A:I know it's the greatest idea in the world.
Speaker A:I know you've done your research.
Speaker A:Doesn't mean it's going to work out.
Speaker A:There's lots of great ideas that died.
Speaker A:And then last, I mean, it gives you a framework to make a cost benefit analysis on.
Speaker A:If you're running a good business, you have people who bring up ideas that are different than yours.
Speaker A:You have people who open your perspective to things, that type of stuff.
Speaker A:What does that do?
Speaker A:It helps you weigh the risk of things.
Speaker A:We are subject to our environments and our experiences.
Speaker A:Right?
Speaker A:I talked to a farmer when I was very early on in my career.
Speaker A:He had a million dollars in one mutual fund.
Speaker A:And I said to him, I said, you got to diversify.
Speaker A:He goes, why?
Speaker A:I said, because too risky.
Speaker A:You have all your money in this one stock based mutual fund.
Speaker A:And he goes, dude, I am a dairy farmer.
Speaker A:What do you know about risk?
Speaker A: rket crashes, is right before: Speaker A:And he goes, so he goes, there's days I have to empty my milk tanks because nobody's coming to pick it up because the cost of milk is too low or whatever.
Speaker A:He's like, and I lose everything that day.
Speaker A:He goes, that's risk.
Speaker A:He goes, that mutual fund, I'll just leave it there to come back.
Speaker A:I'm not worried about it.
Speaker A:I was like, oh, okay.
Speaker A:You know what?
Speaker A:That's perspective.
Speaker A:That's a perspective that somebody's watching their statement.
Speaker A:You know, I've had a client with 5 million dollar account.
Speaker A:My account went down 3, 3, $600 yesterday.
Speaker A:That was so much.
Speaker A:Why did it do it?
Speaker A:That's not even a rounding error, man.
Speaker A:You know, if you have a well diversified portfolio, that, that, that like why are you watching it to that, that, that's not a healthy relationship between you and, and your supervision of your accounts.
Speaker A:It's a really, really unhealthy relationship.
Speaker A:You need somebody to tell you that and then explain why, and then you can make the decision that you want to make from there.
Speaker A:But you at least deserve to give yourself the opportunity to have, have somebody say, hey, this, this, don't do that.
Speaker A:That's, that's gonna, that's gonna come back to bite you down the road.
Speaker B:You and I have talked about now, last two episodes, what financial planning is, what it's not.
Speaker B:It's not just managing investments and having a couple of investment reviews.
Speaker B:And I think if you've never actually had financial planning, there's no context for what does this actually look like?
Speaker B:So you're, you know, alarming to people or alluding to them.
Speaker B:You should have a money business.
Speaker B:This isn't one meeting for six hours where you tackle everything.
Speaker B:When we look at financial planning as how we work with people, it's a series of meetings every two to three weeks apart.
Speaker B:Very specific focus so that you can have digestible pieces that you're looking at and have like workflows like you would have in your business.
Speaker B:You wouldn't sit down with your business partners or whoever and have one long meeting about everything you should be doing.
Speaker A:Yeah.
Speaker B:You would have segmented meetings where you can make decisions together.
Speaker B:And so I think it is helpful to help people understand that financial planning should be A process where you can understand a concept, see what you should do, make a decision, then tackle the next one.
Speaker B:So then if we understand that what financial planning is a series of meetings, workflows, moving along, making project management.
Speaker A:It's project management.
Speaker A:Yeah.
Speaker B:Talk to us then about your money business.
Speaker B:What are, what are the elements?
Speaker B:What do we need to be good at?
Speaker B:Hey guys, Steve Campbell with Digital Suits.
Speaker B:Want to take one quick moment to make a big ask.
Speaker B:If you haven't already.
Speaker B:Travis and I would love for you to subscribe to this podcast, but if you haven't, also we would love for you to leave a five star rating and review.
Speaker B:Your rating and review will let other podcasters note the show is worth their time.
Speaker B:So let's get right back to the episode and thanks for listening to Ditch the Suits podcast.
Speaker A:So the first thing that you have to.
Speaker A:And a lot of people for some reason lose this agency, they become over reliant or subservient to the people selling them stuff.
Speaker A:Honestly, they become intimidated or scared, you know, because they don't understand the language that's being used.
Speaker A:When a lot of times the people using the terminology doesn't even understand the terminology.
Speaker A:Right.
Speaker A:It's just, it's just jargon.
Speaker A:But you are the boss.
Speaker A:And your money, business, your personal finances are going to be as successful or as much of a failure as you allow it.
Speaker A:So if you have people working for you and you're intimidated because they're using terminology you don't understand, you're the boss, you tell them what terms to use.
Speaker A:You say, look, if you're going to talk to me about this and you want my business, you want to be here with me, you want to be working in my business, you're going to use terminology that I understand.
Speaker A:I don't, I don't need to get to your level.
Speaker A:You need to get to my level.
Speaker A:And I will try to level up.
Speaker A:I'm going to try to educate myself on some of these terms.
Speaker A:But you've been doing this for thousands and ten thousands of hours.
Speaker A:I've been doing this for hundreds of hours.
Speaker A:Right.
Speaker A:You know, as far as looking at this stuff, I am not going to get to your level.
Speaker A:So you have to get down here to my level and help me progress and move forward.
Speaker A:You're the boss.
Speaker A:Your conversation to have with people.
Speaker A:Right.
Speaker A:That being said, you can't be a micromanager and be silly about the fact.
Speaker A:Well, I don't understand that.
Speaker A:So we're not, you know, we're completely not going there like there's going to be concepts you don't understand.
Speaker A:So that's where the.
Speaker A:The who's on your team, the structure of the team and that kind of stuff I think really comes in important.
Speaker A:You have to be good.
Speaker A:Are you good at hiring and firing?
Speaker A:How many people who are listening that have a financial advisor have ever actually hired or fired anybody?
Speaker A:It is hard to hire and fire people, right?
Speaker A:Yep.
Speaker A:You're hiring somebody, so you're trusting them, so you want to believe they do a good job.
Speaker A:So when you start to see that they're not doing a good job, do you fire them right away or do you wait?
Speaker A:Right.
Speaker A:Or let's say that they were doing a good job in the beginning, but as time goes by, they not performing very well anymore.
Speaker A:And I'm not talking investment performance.
Speaker A:I'm talking about all this other planning stuff.
Speaker A:You know, you said you were going to be my planner.
Speaker A:When do I take Social Security?
Speaker A:I don't know.
Speaker A:What's your statement say?
Speaker A:What do I do about the Roth conversion?
Speaker A:I don't know.
Speaker A:That's a tax question.
Speaker A:Okay.
Speaker A:That's a performance issue.
Speaker A:That's you saying, not my freaking job, man.
Speaker A:Beat it.
Speaker A:And I'm saying, well, that's what I thought I was paying you for.
Speaker A:Right.
Speaker A:So at that point, you say, hey, look, this tour duty came to an end.
Speaker A:I got to get rid of you, and I got to get somebody in here can do a good job.
Speaker A:Doesn't mean I have to, like, do it.
Speaker A:You know, I can still give you dignity.
Speaker A:Basically, I say, look, we're going to go through a process.
Speaker A:We're going to transition.
Speaker A:I really thank you for what you're doing.
Speaker A:Or I'm going to limit the work that you're doing just to this area where you're good at it.
Speaker A:And I'm going to take this other work and I'm going to go someplace else.
Speaker A:If you can't play well in that sandbox, you don't get to play at all with me.
Speaker A:Right.
Speaker A:But you are the boss and you get to do that.
Speaker A:You got to be good at delegating.
Speaker A:You got to let people do their job.
Speaker A:Right.
Speaker A:So as much as you want them to talk to you and make sure that you can understand what they're doing, you still got to let them do their job.
Speaker A:You're hiring them for a reason.
Speaker A:If you don't understand investing, don't think you understand investing.
Speaker A:When they're doing the investing, make sure they explain it to you.
Speaker A:Right.
Speaker A:But their job is not to make you an investment expert, it's to make you aware of what they're doing.
Speaker A:There's a difference between discretionary and non discretionary.
Speaker A:If you hire an advisor, that's a discretionary advisor.
Speaker A:What you're saying is, here's my money, you invest it based on the parameters that I give you.
Speaker A:I don't need to know all the details because that's not what I'm an expert at.
Speaker A:Versus non discretionary, which is where you hire somebody and you say you need my permission before you can do anything.
Speaker A:Who's the expert then?
Speaker A:Yep.
Speaker A:Right.
Speaker A:They got to come here and they got to make you an expert before you can sign off on stuff.
Speaker A:And the problem with that is you say, well, I just want them to explain it to me.
Speaker A:Once you sign off on it, you're signing off that you've accepted their explanation and that you understand it and that it's in your best interest.
Speaker A:That's dangerous.
Speaker A:Right.
Speaker A:One is obligated to work in your best interest and one is getting you to sign off on the fact that you're saying that you completely understand what they're doing.
Speaker A:So even the nuance in how you hire people and the contracting and the scope of work is going to be really important.
Speaker A:Are you good at managing a team?
Speaker A:A lot of people have one person.
Speaker A:You got to let more than one person play at this.
Speaker A:If you've got a couple million dollars, like at our firm, we normally pair clients at that level with at least two people.
Speaker A:And then there's admin staff to support them and investment people support them and tax people to support them.
Speaker A:And some of those clients, you know, at the beginning get really frustrated.
Speaker A:Why am I talking to this other person?
Speaker A:Because they're your tax person.
Speaker A:They're, you know, they're, they're the expert on the investment part of your planning and they work with the financial planner.
Speaker A:But they're the ones who can really get into the nuances of how it all works.
Speaker A:Like, why are you pushing people away?
Speaker A:That's the expert on the paperwork.
Speaker A:Let them get the paperwork done for you.
Speaker A:You know, don't be like, I'm not talking to you because you're not so and so, right?
Speaker A:You don't go into the doctor's office and demand, I'm only going to talk to the doctor while I'm here.
Speaker A:Sometimes you're going to have a nurse come in and take your blood pressure.
Speaker A:Right?
Speaker A:Like, you gotta allow the team to be a team.
Speaker A:And you really want to be working with practitioners to have a team.
Speaker A:Right.
Speaker A:I mean, like, think about that for a second.
Speaker A:If you're working with just a solo thing and that's all you ever see, what could go wrong?
Speaker A:You know, just leave it at that.
Speaker A:You have to build that team around yourself or you have to hire somebody.
Speaker A:A lot of people say, well, I'm the quarterback.
Speaker A:I coordinate everything.
Speaker A:That's a big term in our industry.
Speaker A:I'm like your financial quarterback.
Speaker A:What that is is that I want to control all the sales.
Speaker A:To me, a financial quarterback is somebody who takes accountability for everything.
Speaker A:Right.
Speaker A:Who says, look, you need to get your estate plan done.
Speaker A:We're going to coordinate that for you.
Speaker A:We're going to put the outline together, we're going to talk to the estate plan attorney before you get there to answer any questions before you get confused.
Speaker A:Once you're done, we're going to do the recap.
Speaker A:We're going to then take that and we're going to come up with your beneficiary designation updates and we're going to tie that into what the will says, which by the way, is the step that 99% of people out there that I've ever met miss.
Speaker A:But we're going to do this, this and this.
Speaker A:We're going to do this because it lowers your legal fees.
Speaker A:We're going to do this because it lowers your accounting fees.
Speaker A:We're going to do this because it improves your long term tax projections.
Speaker A:That's the quarterback, not somebody who says, I don't do the taxes.
Speaker A:Call the cpa.
Speaker A:That's the difference between you running a money business and somebody running you.
Speaker A:Yep.
Speaker B:Well, and if I think back to the question we asked in the first episode of this series, should you do business with a financial advisor?
Speaker B:Right.
Speaker B:We've told you that financial advisors are throwaway term.
Speaker B:You want to look for a fee only planner.
Speaker B:And if you came in, you've never worked with somebody before.
Speaker B:We've given you enough things that you be aware of if you've considered a second opinion.
Speaker B:We've raised some concerns as to what might consider that.
Speaker B:And if you were ever burned and duped and you've been doing this by yourself, but you know that there's still some things missing.
Speaker B:I think if I could summarize, you know, kind of what we've been talking about here, there is value in hiring a financial planner, but you want to make sure that they're working in a fee only capacity where it's transparent, they have a fiduciary.
Speaker A:And that's our bias.
Speaker A:In all fairness, that's our bias.
Speaker B:That is our bias and that's what we've learned and the experience that we've tried to create for people.
Speaker B:But there are fee only planners all over that you can go find.
Speaker B:You want to make sure that you're actually getting advice, right?
Speaker B:So it's not we don't do that or that's some guy over there and nothing's ever moving forward.
Speaker B:You want to make sure that it's transparent so you can put a value to what you're paying for.
Speaker B:It's contractual, you know, kind of where it starts, where it begins, when does the time stop?
Speaker A:And then you know when you can fire somebody, right?
Speaker A:If they're violating your contract, you get.
Speaker B:Rid of them and it's coordinated.
Speaker B:If you're going to run a money business, right, just like your own business, you want to know what marketing's doing, the back office is doing, the sales team is doing.
Speaker B:You would not turn a blind eye and not paying attention attention to it because it all has to work together.
Speaker B:You have people that are important to you.
Speaker B:You have financial tools like Social Security, your pension, your retirement accounts.
Speaker B:You have an estate that has to be managed.
Speaker B:You have taxes you pay every year, you have taxes you pay over your lifetime.
Speaker B:You have children, you want to leave money to charities.
Speaker B:Someone should be helping you address these areas in coordination together.
Speaker B:Because how you make one decision on one area is going to impact the other one.
Speaker B:And so if you have somebody who says I don't do tax planning, then you really don't have a financial plan.
Speaker B:You got somebody that's managing money for you.
Speaker B:So if you've had these question right and you want more information like this, you know, you can go listen to other episodes of Ditch the suits@ditchthesuits.com post questions to Travis and I comment on our YouTube videos, comment on our reels, get in contact with us.
Speaker B:But these are the things that it is your money and it's your business.
Speaker B:You operate a money business.
Speaker B:And who would have known four years later we'd be coming back to kind of episode one, Full circle that don't.
Speaker B:Don't let the things that you do every day in a day to day stop when it comes to your own personal life and your money.
Speaker B:Because I'm sure many of you are very qualified at what you do.
Speaker B:You lead to teams, your executives, your managers, their skills you've learned along the way about delegating and hiring and firing.
Speaker B:Don't let that stop when it comes to your money just because you don't understand.
Speaker B:So we've tried to give you a lot of information as to where you can go find individuals that can serve you.
Speaker B:We've given you terms of the industry to set your spider sense off.
Speaker B:Travis and I are here to help.
Speaker B:This is going to be exciting.
Speaker B:2025.
Speaker B:We got a lot in store for you.
Speaker B:That's going to be new elements, bringing in team members and special guests because we really are passionate about this and we want to give you the best experience possible every time you, you choose to listen to us here at Digital Suit.
Speaker B:So thanks for being our guest, as always, and until next time, enjoy.
