Financial Therapy Why Wealth Is Emotional Before It Is Technical with Jonathan Steele

[00:00:01] Welcome to Business, Finance and Soul. My name is Shaun Enders and I'm a curious entrepreneur. I love exploring business, personal finance and consciousness. I'll jump around topics, offer my opinions and occasionally interview interesting people. Looking forward to going on this journey. Let's be curious together.

[00:00:29] Hey John, welcome to Business, Finance and Soul. Thanks for having me. Very excited about the conversation we're about to have. Yeah, I am also and I want to put a just qualifier out there. You manage over a billion in assets and as I was looking at One Wealth Advisors, I was really impressed with the diversity of the types of clients that you focus on.

[00:00:52] So I think this conversation will be great for the audience because everyone is dealing with the same questions. Money, earning it, investing it, planning for the future and what's going to happen with AI and our finances and how does that all stitch together. So we'll talk a lot about those subjects and I want to start off with a question that you really coined the term financial therapy.

[00:01:21] And I wanted to find out what does that mean to you and also when did you realize that wealth management was missing something? Yeah, I'm not sure that I coined it. Yeah, I certainly use it regularly and it is definitely part of my reason for being in the world and my company's reason for being in the world. Financial therapy started early.

[00:01:49] The idea started early in our careers. My brother and I launched our planning practice in 1997. We launched it at Bear Stearns, which at the time was not necessarily considered a financial planning firm. It was really more a big trading house, especially for fixed income. But what we were realizing and we're in San Francisco, which is important to the story around financial therapy.

[00:02:17] What we were realizing when talking with mid-level engineers and lower executive employees of private technology companies or companies that had just went public, that they are missing a key element to what this new money can be doing for them.

[00:02:38] And the reality is that back in the 90s, the industry was very focused on institutional investment management. But what we realized was that was quickly becoming a commodity. And also when we looked internally, it was something that we felt were as very important. Obviously, having an investment portfolio that's diversified and paying respect to some goals and objectives.

[00:03:06] What we realized was that your relationship with money is way more important. And therefore, those clients that we were starting to get in the late 90s, we were changing the conversation from let's deploy a very good investment plan for you. But at the same time, what is it that you're trying to accomplish? And at the end of the day, you're just trying to be as happy as you can be. So what is it that this money can help?

[00:03:35] How can this money help you become happier? When you think of that question, and you've probably asked this many times as you sit down and you create framework for your clients, what are the most kind of unhealthy relationships that you see people have with money, even when they have a lot of it? Yeah.

[00:03:59] Using money for power, especially within the context of relationships, and especially within the context of family relationships. And so it can be a curse. When I say it can be a curse, having money, as much or as little as you're talking about, by the way, it doesn't necessarily have to be a lot,

[00:04:22] but using money for power is what I think to be the most challenging aspect of developing a good relationship with money. And so as a result, when you're starting to develop relationships with money yourself, you need to be at a certain level of peace with it and comfortable with it

[00:04:50] before you can start to develop relationships with others as it relates to how money can play a role in that relationship. Yeah, money is an interesting thing in terms of where you came from and your upbringing and how, you know, we're all little softwares running around and we have these beliefs that have been installed at an early age. And some of them, we can catch the code when we get older. We can see, oh, like, wait a second.

[00:05:20] That's not a behavior that I'm okay with. That's not the way I want to brand myself out in the world. And so we fix that code, right? You know, our parents said maybe money doesn't grow on trees. And so we had this code I, you know, installed that said money is scarce. It's hard to come by. And even if I have a lot of it, it's not going to be enough. There's not enough security. And so when I think about you sitting in front of someone, again, regardless of their balance sheet,

[00:05:48] I wonder how quickly do you start to realize that this relationship with this client is going to be more about emotional restructuring rather than just financial restructuring? The financial restructuring, I think, is becoming a commodity, candidly.

[00:06:06] So if we have conversations with prospective clients that the main focus and their reason for hiring an advisor is specifically to implement a good investment plan, and we can extract that there's something more, there's a greater role long term that we can play in their lives, then oftentimes there's actually not a fit.

[00:06:35] But there's a challenge there because our industry does a really good job of convincing people that our main reason for being, our advisor's main reason for being in the world is to help you build a good investment plan. True. It's very true. But like we realized early in the late 90s and through to today, a good investment plan has become a bit commoditized, in my opinion. And as a result, when we're talking with prospective clients,

[00:07:05] what we're trying to do is just understand some little nuggets where we can say, all right, there's some work we can do here. There's some work that this prospective client can focus on that can bring them more peace, a greater peace of mind and bring them more happiness. Yeah, because there's absolutely, there was at one point,

[00:07:32] softwares that existed within the financial industry, planners had access to them, they could run simulations, they could create Monte Carlos that, you know, would take in all these life events that were going to be forecasted, right? Retirement or injuries or weddings or, you know, all these things that could happen down the road with your kids or you. And it was a sophisticated tool.

[00:07:59] And so as we've seen, people can put into a software now on their own and do that planning. And they can look at it on a spreadsheet, but they can't get out of their own way. You know, you don't know what you don't know. And having someone that's third party, that's unemotional about a purchase or an investment that you can turn to and say, hey, what do you think?

[00:08:25] I know running a company, a CFO is very useful for us, you know, to be able to turn to and go, you know, this is what I'm thinking. Can we talk about it? Before I even say, let's talk about the ROI. You know, what do you think operationally for the business? And, you know, he'll come up with great ideas like, okay, number one, you want East Coast, West Coast clients. Let's talk about the time zones. Who's there?

[00:08:54] Who's covering those time zones? And you start looking at it from a different angle. I would imagine you get those calls, someone that's like, hey, I'm thinking about purchasing this house. That's definitely going to be a stretch. Or I want a boat. And we didn't factor that in. Do you work through those kind of problems? Like, is that something that's fairly common that people reach out to you about? All day long.

[00:09:20] Because people are oftentimes growing into their financial circumstances, just like any company. It's candidly not that different than a growing company in the sense that for relatively new money, as an example. They're just trying to figure it out along the way. They may have an outcome. And that outcome could bring them to a certain wealth plateau. We talk about wealth plateaus where humans go through.

[00:09:49] If you think about Maslow's hierarchy of needs, you basically can feed yourself. You put ruse over your head, which, by the way, is by far the most important thing. And then you reach a certain wealth plateau. And that wealth plateau could bring you a minimum standard of living all but guaranteed for the rest of your life. Right? That wealth plateau could be, let's say, I mean, God willing, a million dollars. And if you put a million dollars in treasuries, it's going to yield you 3% or 4%.

[00:10:17] And then you're not going to touch your corpus. Treasuries are the only thing we could say they're guaranteed. And so you've reached a certain wealth plateau. And if you could live off of $30,000 or $40,000 a year, then you're good. Right? But then there is potentially other wealth plateaus. There are wealth plateaus that could bring you greater financial circumstances, greater financial benefits. But the question is, it's a utility curve function.

[00:10:47] How much more happiness will this incremental dollar bring you? That is the fundamental question. And goals change over time for people. Like you said, the CFO, if you want East Coast, West Coast, there's a tradeoff, right? If you want this boat or this greater house, there's a tradeoff. Well, yes, you may have to work longer to afford that house. But let's put it into our system, right?

[00:11:13] And then let's talk about the emotional benefit that that house is going to be bringing you. Because that's the real conversation. The financial conversation is almost a yes or no outcome, right? Yes, you can afford it or yes, you can't. But really at the end of the day, how much more happiness is this going to bring you and your family? Yeah. And I will say that I don't own a boat. But this is a great example of a depreciating asset that can create memories for a lifetime.

[00:11:43] And so it's one of those weird things of where not everything, and that's why I love that you pointed out, you know, hey, what's the tradeoff here? Right? Are you okay with throwing money away for the tradeoff of fun? You know, is that is like, are you good with that? Because if you're going to struggle in that area, then that boat is going to just bring you misery. Because every time you look at it, you go, God, I got to fill it up with gas.

[00:12:09] Or it's got to, you know, go in and we got to flush it every time we take it out in the ocean. All these things that require, you know, more money to maintain. But at the same time, I've had friends, grew up on boats, their grandfathers did. And they're just, the families bonded out there on, you know, lakes. You know, I grew up in Washington State and Alaska.

[00:12:33] So in those areas, yeah, people used them for fishing and people used them for recreation and had a lot of memories there. So I love that idea that it's like, not everything is just, okay, we're just trying to hold on to our wealth, you know, and white knuckle through life without talking about what's the tradeoff of joy? What's the tradeoff of fulfillment? What does this create in your mind?

[00:13:03] And then having somebody like yourself to be able to go, you know, how do we get out of it? If it ends up not being the dream that you really, you know, we all kind of envision something. And then you're like, wait, I'm not having a lot of fun. I'm two years into it. We're not using it the way. Great. Okay. How do we unwind it? How do we pivot? Something I'm curious about is you work with your brother. And for the research I did, you raised by a single mother.

[00:13:30] How did you guys, I know what my mom did for me, but how do you guys create a balanced, healthy view of money together? Because you guys obviously have a similar philosophy. Yeah. Yeah. We're six years apart. And so what I would say is that there were, it wasn't linear with respect to how we viewed money and where we were in our lives as our mother was raising us was also not linear.

[00:14:00] In the sense that I was much younger when our parents divorced. I was three and my brother was nine. I knew less about what life was like with a father where my brother knew more, right? And so what I would say is that how do we develop relationship with money? I don't think it was linear. I think it was very different for a period of time. We did both live from a position of scarcity for sure. My mother didn't have a job. She trained herself to be a teacher. She got her teacher credential.

[00:14:30] Then she got her job. This was all essentially during and after the divorce. But fiscal responsibility, I would say, was always front and center for us. For me, I can't speak for my brother, by the way. We've never really actually talked about this, so thanks for bringing it up. This is a conversation that he and I will have afterwards. But I remember, I vividly remember going to Bamberger's, which is basically like a Macy's back in the day, right?

[00:14:59] It was just basically like a Macy's or like a Nordstrom of sorts. And my mother had a Bamberger's card. And for eighth grade, this is kind of the first time where I really remember. She went and paid with her Bamberger's card the clothing that I was getting for my eighth grade year. And then literally she went home and wrote a check for that Bamberger's card to make sure that she paid it off.

[00:15:27] And so in my mind, that is an example of what I think to be some of the real good fiscal hygiene that I was taught early on. In my sense, my brother was taught the same. Now, there is a potential challenge as being an investment advisor when leading with your own emotions, right? Because I have this certain sense of scarcity that I also need to be very mindful of when I'm advising clients, right?

[00:15:55] And so I'd actually like to go back to the prior question and conversation because we talked about buying a boat, right? And throwing money away and the trade-off. By the way, if somebody has the benefit and the fiscal benefit of being able to buy a boat and they may not have grown up in a boating environment, that's a risky proposition.

[00:16:22] But what I would say is that why not take the risk? If it's something that you feel could bring you joy and you have the fiscal ability to do so, then maybe it's worth the risk as long as you're thinking it through. And then also back to having a financial advisor to bounce these ideas off of. I think the financial advisor should be like the third or fourth magnitude person or team that you're talking to. You need to develop really good relationships with those that you're surrounded with.

[00:16:52] I talk about this idea of building scaffolding in your personal relationships and also scaffolding in your professional relationships and scaffolding in your financial relationships. You need to be able to communicate with your partner, maybe with your friends, your closest friends, with your family about this idea of maybe buying a boat. Even before you come to the financial advisor and say, hey, can I afford a boat? And then the financial advisor hopefully is well-equipped to say, hey, listen, yes, you can afford this. What's the ROI?

[00:17:22] Like what are you trying to accomplish, right? Like what's the emotional ROI? So back to being raised by a single mother. I just wanted to get that in there because I thought it was a really, really good thing that you brought up. We were taught fiscal responsibility relatively early, but that was from a position of scarcity.

[00:17:39] So what I would say is that as an advisor, we need to be very careful of giving advice to clients that has deeply rooted potential consequences of where you came from as growing up. Yeah, that general projection, being aware of that, like, wait a second, am I projecting my own stuff? Yeah.

[00:18:02] You know, onto this client that actually has no issue with any of these identities that I'm taking on. So I think that that's super important, being present in that space of going, okay, yeah, like where are you coming from? Like what's your background? How do you feel about this? There's some people that are just built for risk and they're okay with it. And they're like, yeah, it's not a problem. And that terrifies someone else. And they're like, wait, I'm sweating. I'm thinking about you putting all those chips on the table and I'm sweating.

[00:18:31] But, you know, I'm curious about money and kids because I think that you mentioned, hey, you got to have maybe I'm the fourth call, you know, but you got to have your family on board. And one of the things I have two kids, 13, 16, and I'm just we're at the stage where it's pretty awesome to be able to be transparent with them. My wife and I talk about this of saying, hey, we got to talk about a budget.

[00:19:00] We got to talk about, you know, hey, that's not in our budget, but that doesn't mean we don't have the money to go buy that thing. We're just not budgeted for it. And so we're going to talk about cash flow. We're going to talk about retirement. We're going to talk about, you know, what we call our hedge fund, right, which is hedging against anything. How often are parents in your world bringing their kids into their financial conversations?

[00:19:29] Are you seeing more of this these days? Is this and are people being open about it? How do you see it? This is the biggest I would say the biggest, if not the biggest trend in my career, one of the top three for sure. That those who are millennial, Gen X and the generation after that, or I would say before that, are sharing more about their financial circumstances with their kids.

[00:19:58] Not only are they sharing their financial circumstances, this idea of fiscal hygiene and developing a healthy relationship with money. They're also sharing their money, which is very interesting. So before those who were coming from the World War II era and before, it was generally, hey, you're going to get what you get when we die, right? And yes, maybe that brought happiness to the generation that was receiving the money.

[00:20:27] But I think I don't want to project my views or opinion on clients because that is their choice. But perhaps sharing some of your financial wealth or at least the way in which you think about financial wealth with your kids or even grandkids could bring you closer as a family.

[00:20:56] I like that a lot because I believe that. I don't need a study to tell me. I just, I know the difference between, you know, our grandparents era where money was taboo. We didn't talk about it. You didn't know what your parents or grandparents had. You could see what they had, you know, you kind of looked around.

[00:21:18] And that I think became why we are so consumer driven in the sense of like, oh, this person drives this car. They have this house that must mean they're wealthy because that's the only clues socially that we ever looked at. When we were looking at older generations, you just go, they have a big house. They must have a lot of money. But then over time, we realized like that doesn't equate, right?

[00:21:43] Like just because that dude has a big house, he very well may be leveraged to the neck on mortgages, credit card debt. That he's doing everything he can to live that lifestyle is where we now know, you know, the millionaire next door, that book. Right. And this idea of, you know, people that have very little on the outside because they don't need it. They don't want it. That's not what they're driven by. But they have a lot of wealth. That is so healthy to talk to your kids about.

[00:22:12] Like there's not one way like you can. You can want and have all that stuff. I love that. Go after it. Live that life. Or you can need very little. But let's talk about, you know, bringing that out into the open within the family. So there's no mystery about it. There's no punch. There's a whole I consider there to be a holy trinity when it comes to this general theme.

[00:22:41] It's spend, save and share. It's I did not come up with this. A client of mine actually talked to me about it, how they how they communicate to their their kid. And the the idea of trying to have a framework for discussion of what you do with your money. Well, it's like you said, there's no one way to do this. There's also no one way to communicate this.

[00:23:09] This is this is completely open for any family to choose the way in which they want to pursue this. But the general theme of spending some, saving some and sharing some tends to resonate with a lot of people. And so if people get stuck as to, hey, how should I start doing this? Well, just start with that. The percentages are yours. Right. And you don't even need to do all three or you don't even need to do any of them.

[00:23:35] But what I would say is if you need like a general framework for for discussion, consider using those three topics. And I would place a high degree of confidence if you brought that conversation to a 10 plus year old. Even before that. It would it would probably lead to at least an hour conversation and probably a healthy one. Yeah, they get it. They definitely understand this idea of like, hey, you earned a dollar weeding and 80 cents of it is yours. Right.

[00:24:05] We're going to, you know, maybe we're going to save 10 and we're going to give 10 away. Right. Like that's yeah, that's what we're going to do. But 80 cents, go spend it any way you want. No questions asked. You want to buy something absolutely ridiculous. It's all good. That part of yours. Either you're going to be more disciplined with this 20. You take the mystery out of the dollar and you just assign it a task. Right. And that I 100 percent kids are much more sophisticated.

[00:24:34] Now I see it then like, yeah, they just know more and they were they're curious and they want to be involved in the conversation. And it makes me very hopeful. Oh, yeah. Can't candidly. It makes me very hopeful. And what I would say about your the idea of the 80, 80, 20 rule, which is this general mindset, 80, 10, 10. Like maybe consider talking about what would the percentages be for you as a kid?

[00:25:03] Well, I want to spend 100 percent on the soccer ball, of course, but not necessarily. I would I don't know that every kid would say that, you know, if you if you present it in a different way, you could say something to the effect of, well, Jimmy down the street. Right. His mom is going through a tough time right now. And we're considering mom and dad are considering maybe giving a little bit of money to Jimmy's mother's cause or something like that.

[00:25:32] So so we're sharing with the local Girl Scouts or Boy Scouts. Maybe they're part of the Girl Scouts or Boy Scouts or maybe they're raising money. They're on a baseball team. They're trying to raise money for for helmets. Right. That could be an opportunity to the sharing element. Right. And then you say, well, how much we want to share? Maybe they say 80 percent share, which would be, you know, as a 10 year old, pretty, pretty incredible. But I, you know, maybe they would get to that point. That's I love that because it just what it does is it brings creativity.

[00:26:02] It brings community. Exactly. The mindset of like, hey, we have options on what we want to do. Yep. And parents that create options. Right. You know, parents that create these like that goes away. From the scarcity mindset of like, OK, gosh, you know, we've got to pay bills. We're paying bills. We're paying bills. It seems like every dollar that comes in just gets assigned to a bill and doesn't get into any dream bucket.

[00:26:28] Doesn't get into any any idea of like, oh, what is possible with what we can do with this money? Yeah. I think you grow up with that idea. You grow up with this idea of like. I earn a dollar and and, you know, sometimes I do this, sometimes I do that, but I'm always assigned to a different task. I love I love the direction of that. That leads to goals based investing, by the way.

[00:26:56] So we were talking about this idea of some basic best practices with investing and how it's been commoditized. Commoditize is maybe a little too crude because I think there is some level of sophistication with investing and it's deserving of something greater than it simply being a commodity. But at the end of the day, defining one's goals and how you're going to spend that money over time is key to developing a very good financial plan.

[00:27:21] So if you start planting these seeds with it, with it, with a child at 10 years old about developing, well, what are your goals? Well, think about spending, saving and sharing, right? You have the three and then you're developing goals. Well, I want to spend this and well, you can't. Maybe you don't want to spend it all at one time. So you have over the next year, you're saving some towards a spend. And so it just opens the floodgates with respect to developing really healthy relationships with somebody who otherwise wouldn't get that. Yeah, I love that.

[00:27:47] I think a question that I see online a lot where people focus so much on how much do I need? You know, what's the number? What's that magic number? And the reality of it is there isn't a magic number. It's all about your spend, right? I mean, if you have $50 million, but you like to spend $10 million a year, then $50 million isn't enough.

[00:28:13] And if you have $80,000 a year that's allocated, but you only really spend $60,000, you're doing better than the dude that spends $10 and has $50 million, right?

[00:28:26] So I'm curious, just a more technical, nuanced question of when you sit down with somebody and you're trying to secure their future, you know, because I think of when I'm putting a plan together, it's like, let's take care of your future self and make sure that that person is in a good place. And then let's talk about wants and current needs and desires and all that stuff.

[00:28:52] How do you lay out a framework with somebody to secure their future? Like, what's a formula that you go through? Is there an exercise that you do to pull out what do they think they're going to spend in 30 years? I mean, it's so hard. Yes, absolutely. And to be clear, I don't secure their future. They are in complete control of that, generally speaking, right?

[00:29:17] For those who make the most money and those who make the least amount of money in my client base, I will tell you that the clients that – the number one couple that is probably happiest of my client base is the couple that has the least amount of money. There are school teachers in San Francisco. They're raising a single kid in a condo that they bought a long time ago, and they are genuinely happy people.

[00:29:46] They just – they make it work within the confines of what they're given from a money perspective. And so I try to think about them candidly when I'm mapping this idea out for clients. And you can add numbers, right? Sorry, you add zeros, and it kind of starts to work itself out. If you have greater goals and aspirations, it just ends up being a zero – adding zeros game.

[00:30:09] But yes, the answer is what is it that you are trying to do through your life that is going to bring you the most happiness? Yes. Generally speaking, put a roof over my head, have a nice car, paying for my kid's college, retiring early. These are all things that are common themes, right? But then take the next step. Okay, those could be needs. Then what are the wants? Well, what do you want?

[00:30:39] Well, I want to be able to travel and spend some time, maybe a month, a year overseas, and I'd really like to help my brother out who is maybe not as financially well off as I am. That could be a want. And then you have a wish, right? The wishes can be grand, and they should be grand. It's a whole idea. And then you build a wish category. So you frame it in the needs, wants, wishes categories.

[00:31:06] And then generally speaking, how any financial plan works is you have a set of assets. You have potential saving over time. You have an investment portfolio that has a certain rate of return that should give you money coming in until you need to start spending it on specific goals. And then it's just a matter of whether your goals are too aspirational or not. And then that's where the conversation starts. That's nice.

[00:31:33] So you really work with, hey, let's dream a little and then essentially reverse engineer it. Let's extrapolate where we're going to be financially based on the assets that we have today. Let's look out into the future of what we believe returns can be, both from generous and then we can also limit those and what we think the future might be.

[00:31:56] And then we can see if those two intersect of where your goal of maybe stopping working in a traditional sense and now just doing project work or hobbies at 55. We don't see that happening based on this current trajectory. So if we're going to do that, we can get there if you're early enough in your career, but we're going to need to tighten your belt. We're going to need to earn more money or we're going to need to figure out how we bridge that gap.

[00:32:22] So it's really working with like expectations versus reality and then bringing those together, huh? That's it. Yeah. And maybe a want moves to a wish because it's just not a reasonable expectation based on your circumstances. And that's – we're here to tell you one plus one does not equal three. At the end of the day, one plus one equals two.

[00:32:42] And it's really just a matter of navigating – candidly navigating the tougher times through – because financial plans are static at a moment in time and they're rendered worthless as soon as you create them and present them because life changes as soon as you do. And like you said, life is not a spreadsheet.

[00:33:01] And as a result, part of the reason why you're building this scaffolding, building this team, which starts with your family and then starts with maybe your friends and then ultimately a financial advisor if you choose to hire one, is that when life changes, when you have particular circumstances that need you to bounce ideas off of, you have this scaffolding on retainer, right? And that's generally the role of advisors should be playing, especially during life's most difficult times.

[00:33:29] If an advisor is not picking up the phone and if an advisor is not reaching out to you during life's most difficult times, that's an advisor that candidly should reconsider. Yeah. It's funny because a lot of times there's an association of like a rainy day fund if things go bad or sideways.

[00:33:50] But what's really interesting is in my own personal life, we had a complete opposite event of where things went great. And I'll share in a moment what that is. But it came with a huge price tag. And so you're like, okay, this is wild. We hadn't anticipated this. And now we've got to change the way that we're looking at our current cash flow. How do we want to fund this?

[00:34:19] So like our daughter for a few years had wanted to go to boarding school and, you know, we had talked about it. We're like, okay, you know, we didn't come from that background. And she, when she was going into her sophomore year in high school, you know, as a freshman, she's like, I'm serious about this. I really want to go. And we supported that. She goes through the application process and testing and, you know, she gets selected.

[00:34:47] And she will be attending a very phenomenal boarding school starting in the fall this year. What it did, though, is it, you know, expedited the process of like the college savings. We were like, all right, hey, we're saving for college. This is what you've got. You know, this is where this is a path we're on. And all of a sudden it's like, oh, no, it's like college early. Right.

[00:35:16] It's like that type of college tuition and she'll be staying and it's full campus and all that stuff. And you go, okay, this is a really good thing. And I think about this with, you know, if your kid's amazing at sports or academically, they want to, they get accepted into a program that allows them to go abroad, even in high school. And you're like, wait, how much does that cost? And they're like, oh, 10 grand for them to go study in Spain. And you're like, uh, okay.

[00:35:45] And I think that sometimes these financial kind of, um, let's say inflection points can happen and they're good and they're positive and you want to go after it. But you got to kind of factor these in and get off the spreadsheet, you know, when you're thinking about life and being able to pivot. And I'm sure you've, you, you, you've had that of where people had a plan. They're like, everything's going great.

[00:36:13] And then it's like, wait a second. We didn't even expect this good or bad, you know? Yeah. All day, all day long. It happens all day long. And the things to be careful about are when circumstances are really good and your aspirations change, your goals change. Yes. The, the, the question often we, the, the question we often ask is, okay, what are you trying to solve for here?

[00:36:38] Just because you have an extra zero, is it really going to bring you the same level of happiness that you otherwise wouldn't have had the ability to achieve if you didn't have this windfall? Right. Right. The opposite circumstance is oftentimes unfortunate if there's a sickness or death in the family and that sickness could be for a period of time and you need to, then, then it's just, well, duh. You spend your money to take care of people for, for health reasons. Right. And then your situations. So I have actually a question for you.

[00:37:08] Who was your first line of defense when, when, when having to navigate this? Like how the, when I talked about at orders of magnitude and the scaffolding we all built, if you, to the degree that you're willing to share, how did, how did you handle that? A hundred percent. I always love to be transparent.

[00:37:25] And my wife and I really have, you know, we've been together 27 years and it's one of those relationships of where the two of us kind of go, okay, what, let's think about our future selves and put ourselves into the position of we're sitting here, we're having a glass of wine. You're 60, you know, uh, and would we regret?

[00:37:54] So we have the money now and our daughter was accepted into something she really wanted to do, but we said, no, going to the public school is fine. You know, it's, it's a great education. We're in a great school district. You'll be fine. Would we regret not having taken that, taken advantage of that? And we get that extra money now. And then we put it into an investment calculator and looked at it. It isn't, let's not look at it in today's dollars. Yeah. If, if that grew. Yeah.

[00:38:22] And then we went and talked to our daughter about it, said, okay, here's the cost of tuition for three years, just on, on that. Now we don't even know what's going to happen with college, with AI and everything else. So this isn't something like where you look at it and we're like, we need to be an Ivy league track. Would you prefer that we take that money? And if we invested it for the next 20 years, instead of tuition, here's what it would be worth. And it was a large number.

[00:38:49] It was a very large number of what that would be worth with compounding interest. Sure. You could add that money. And she's like, and then I give up the experience. She goes, but I just don't see life as, yeah, that, okay, that money gives me something. But at the same time, I think life is about experiences and life is about who you meet and traveling down that road and all that stuff. And I'm like, it's exactly the conversation I wanted to have.

[00:39:18] So to answer your question, my wife was the first line of defense. And then the second was putting out the facts in front of my daughter and saying, now you can take the money and it would be yours. And that shows me the difference of how she grew up compared to how I grew up, where I saw a little bit more limited money. She's grown up around anything's possible. We'll make it work. Life is about experiences. And then it showed up in the fabric of her decision-making. I was like, that's a nice life.

[00:39:48] I wish I grew up the way you're growing up with that mindset. Yeah, she stuck the landing clearly. And in what mom and dad was hoping to hear, and I think what any reasonable person would want to hear is like, if she said life is about experiences. By the way, she could triple the amount of that compounded number by getting these experiences and obviously benefiting from them financially in the future. We just don't know that.

[00:40:18] And as a result, this idea where you went to this kind of first and 1.5 order of magnitude in terms of your scaffolding was what I think any financial advisor would hope for is that before coming to a financial advisor where men in particular are making decisions in a vacuum without really communicating to a family. It also happens with women, but generally speaking more men. Hopefully that you're coming together and talking about this.

[00:40:45] And if you have an uncomfortable dialogue or it becomes challenging to do so, advisors can also step into that particular situation as well and help moderate a very healthy discussion. And so it's not uncommon for me to talk about and navigate and moderate a very healthy discussion that's otherwise very challenging for a couple. I love that you brought that up.

[00:41:10] I'm going to say one more point on my daughter because what you hit on was she put that out there where she goes, oh, I'll make more than that. I love it. You know, like, listen, life is about experiences and, you know, I'm not worried and, you know, all the rest of it. But she first was very bullish on herself. And I was like, I love that you have that confidence. And you said that. And I was like, that's exactly what our daughter said.

[00:41:39] And what better investment, man? Like at the end of the day, what better investment when when someone comes to you and says, hey, bet on me. And one, I add it at a minimum guarantee is going to give me good experiences and potentially I could be worth financially more anyway. And if not, I'm probably emotionally worth more. 100%. And something I thought was really interesting. You said this. And I think a lot of couples run into this, especially if the one partner is the earner. Right.

[00:42:07] You know, where it's it's the husband or wife. And like you said, predominantly the role had been the husband and earning moms taking care of the kids. If you're fortunate enough, you know, Bay Area is really hard with that because of how expensive it's been. In Southern California, where we resided for 24 years. Same thing. We're in Boston now. Very expensive.

[00:42:28] But ultimately, I think those scenarios of where one person lives in the shadows of the financial plan and the assets and the other person is just like, hey, I got it. I'm taking care of it and carries that whole burden. I've seen it happen with buddies of mine where their wives just, you know, they got comfortable into that role. And they hadn't talked about this.

[00:42:57] How do you bring that subject up? How do you get someone interested? Because you did use the word commoditized earlier. And yes, I agree with you. The access to financial tools and financial acumen and learning, it's all out there. Right. You can watch YouTube. You can use your favorite AI platform. There's other tools out there where you can run simulations.

[00:43:24] But again, the ability to execute is what that's the value. So how do you get couples to talk about it? There's somebody listening right now where one of them has been the point person on everything finance for the household. How do you get someone that's maybe not interested in knowing to be interested? Yeah. It takes – first of all, it takes time.

[00:43:49] And when I talked about developing a relationship with a prospective client and presenting an investment plan, which our industry has done a great job of saying that's what an advisor should be leading with and that's their reason for being in the world. And remember that I said that you try to pick up some nuggets within that conversation to say, hey, there's maybe some work that could be done here. And so maybe there's a good fit to work with us.

[00:44:14] My one nugget could be that we're presenting only to one person in the family. Right? And there's potential opportunity over a period of time to introduce others in the family to the financial conversation, the financial plan, et cetera.

[00:44:34] But like any therapy session, typically when you sit down, you are unwilling to completely open up and talk about anything. And so how do you do it? How do we do it? How do we do it? You lead with love. I genuinely love my clients. We love our clients. We think of them as family. We are the hired help at the end of the day.

[00:45:02] So there's a line of demarcation. They are the CEO of this financial company. We are the support system. But anytime I sit down with them, I walk into a conversation only caring about their best interest. And if you can get the – if there's one person that you're talking to, if you can get them comfortable enough where they have a real good feeling that you are leading with love.

[00:45:28] And that you then say, hey, listen, have you thought about incorporating at least once in a while talking about like, hey, what if you get hit by the bus? Like what does he do? Like I'm talking to you as the primary breadwinner. What does he do in the event that happens? Maybe we should have a conversation. Hopefully they've gotten to the point where they're comfortable saying, hey, let's bring them in and let's talk about where the passwords are. And you can keep it very rudimentary initially. And then they become comfortable with you.

[00:45:59] And I've had this happen so many times where they become – they're like, this guy is not a jerk. Like he's not some financial dude in a suit and tie trying to tell us what to do with our money. But like he actually genuinely cares for us as human beings. Then sometimes they actually want to be on the call. And that to me is like the greatest achievement, you know, to say somebody who is out on the other side of the house while I'm sitting down in the office with the client all of a sudden wants to be part of the conversation.

[00:46:27] And it has happened through my career. Yeah. Actually, one thing I will highlight on that is the financial passwords. This is such a huge thing of where one person controls. My wife and I were just talking about this with updating our trust from, you know, California to Massachusetts.

[00:46:48] And we're like – one of the things that I fear the most is if our executor doesn't have access to where everything is because there's so many different, you know, buckets of data that you need to access. And I highly recommend if you're listening and you don't have some sort of plan in place to where someone gets your master password list to be able to log into all your accounts.

[00:47:17] I'm in the employment industry and I talk to people who have had a parent pass and they're a controller or CFO and they're literally like it has been a nightmare trying to figure out and get these financial institutions to give us access. Yeah. Yeah. Yeah. There is a plan. The industry has a plan. The problem is it's generally driven by the courts at that point in time and the courts can take a very long time and it can be very expensive. So you definitely want to have that plan in place. A hundred percent.

[00:47:46] Well, as we get closer to wrapping things up, I'm curious because there's – this is crazy. And this is a big question, but I'm sure that you've been mulling it over a little bit and it's something that's being floated out there. Elon Musk has been pushing, you know, really through robotics, the collapse of prices, the no need to save for the future.

[00:48:13] Money as a system will completely change. Now, his timelines are very ambitious of where he says these things, but let's just say his trajectory is right. His timeline might be off, but it's 30 years from now. Somebody's 30 years old might experience this literally when they're 60.

[00:48:34] Where do you see the industry as advising and where do you see things going as money, as a tool for saving and believing in a system today that we know is absolutely changing tomorrow? How do you have your feet in both sides of this?

[00:49:00] Yeah, I think the industry is kind of at this inflection point and just follow the money candidly at the end of the day. Where the industry thinks that this is going is one, personal investment empowerment by offering products that allow people to implement a basic investment plan all the way to gambling. Gambling is a big thing.

[00:49:21] We have these leveraged ETFs and leveraged products that don't require any more somebody to show suitability to a custodian or a financial institution that they have the financial fortitude to purchase something in a leveraged capacity. Don't worry. The industry has already solved that for you. You could just buy one investment and it's leveraged for you already, which I think is challenging to say the least.

[00:49:51] And that could lead to some serious issues. But the other side of it is the industry has recognized this idea of fiscal hygiene, fiscal responsibility, emotional connection to money and solving for those types of things. And so I think the financial industry also recognizes that there is a role for humans to play.

[00:50:14] But those humans should be empowered less by having financial tools to show that there's great access to financial vehicles because I think that's going to kind of be commoditized over time. But this idea of what is it that can bring peace of mind to the end climb, creating a sense of coordination.

[00:50:42] So you talked about where the password is like, okay, our industry should be helping you with that. That's generally an estate planning thing. But our belief at One Wealth Advisors is long term, we don't think estate planning and tax planning and insurance planning and investment planning should all be these different silos. At the end of the day, a client just wants to come to you and say, hey, figure it out for me. I have all these things. Help me coordinate. Be my coordinator.

[00:51:06] So I think the industry and technology in particular is doing a really good job of trying to become the coordinator for clients. And so that's where it's basically like gambling and financial coordination. And we're essentially on the financial coordination side. Yeah. So I like that. So it's like it's a piece of the goal is peace of mind. So regardless of whether or not, you know, a tech trillionaire says, hey. You're not going to need anything. Don't worry about it.

[00:51:35] If that doesn't bring you peace of mind. Then we're not on a good path. But if you're a person that says, oh, I'm all in with this guy. And I'm not going to have to save anything. And we'll just figure out what universal basic income looks like after the machines take over. I'm peaceful with that. Then, OK, cool. That's on you. But you more start with what's the peace of mind look like? And then how do I help you facilitate that entire process? Yeah. And then also, what are you trying to pass on?

[00:52:04] We talked about the third year old becoming a six year old. Well, that six year old has a 20 year old kid. What are the types of things that you're trying to communicate to your children or your community? Right. There's people that are very powerful in their community. They could be pastors. They could be many things.

[00:52:24] And they have a sense of they have a certain responsibility that as we go through this impact that AI has, which, by the way, we spend a ton of time in the AI apps all day long trying to figure out what this is going to look like. Yeah. Those who are not doing that, I think, should be encouraged to do so, not because there's this idea of a dystopian society in the future. I can't predict that.

[00:52:45] But as we navigate more and more the usage of AI, the more you can understand how it works, I think the better equipped you will become in the event that there are changes in any industry. Yeah. Yeah. I agree totally with that because it's not this giant step when things finally hit your front door. You've been taking the steps with them and it's much more manageable to see where things are going because there's sensationalism and then there's the reality.

[00:53:14] The reality, of course, is everything is incremental. Now, you can't offload just an all one foul swoop, just like you can't hire a financial advisor and just throw everything on your plate. And tomorrow we've solved all the problems. Everything's kind of bite size and you want to be on the cutting edge of like what is happening out in the world and how do you make it work for you instead of against you? Yeah, I'm here to tell you that the financial advisor will not solve all your problems, period. End of discussion.

[00:53:43] The financial advisor or at least how we think about our role in our clients' lives is to just help incrementally bring you a little bit more happiness, a little bit more peace of mind. Right. And then hopefully it's a long game at that point in time. Right. It won't happen overnight. I can guarantee you. And as a result, like the scaffolding that you've built, like if I could close with the scaffolding that you build in your personal life and the scaffolding that you build in your professional life. Right.

[00:54:11] Is no different than the scaffolding that you build in your financial life. Right. It could be different people, but you're empowered to surround yourself with tools and human beings that are there to support you. So invest in those things. Invest in the tools and invest in those human beings and they will be there for you when the moment gets tough. Yeah, I love that. But John, where would you like people to go to engage with you and OneWealth?

[00:54:41] I appreciate it. That's very, very kind of you. OneWealth.net. O-N-E-W-E-A-L-T-H dot net. Perfect. And yeah, thanks for sitting down with me and spending some time. I'm always fascinated. I like to bring in personal examples and I'm always learning as I meet great people like yourself. So thanks, John. Appreciate you. Thank you. All right. Until next time, everyone. As always, stay curious.