How the FaceApp Could Help You Save For Retirement

How the FaceApp Could Help You Save For Retirement

If you took a picture of your face with the FaceApp, the Russians now basically own you. Let’s just say you made a big mistake. But it’s over now and there’s nothing you can do about it. Now that that’s out of the way… Let’s discuss the positive impact the FaceApp can have on helping you save for retirement.

I’m sure you’ve seen the wave of people posting their faces on social media as old people. The first time I saw myself, it made my heart sink. I’m pretty sure that’s what I will actually look like.

Honestly, it was kind of depressing.

I couldn’t help but think what the next 50 years of my life will look like. What sort of impact will I have on the world and what will I be like when I’m 80! The reality is, we’re all going to get old and die.

Countless studies have shown when people become familiar with their future selves, their willingness to save goes up. ForbesCNBC, and US News have written articles about this in the past few years.

It’s hard to think that far into the future. But when we do, we accept the fact that we’re going to get old. Our thinking shifts from short-term thinking to long-term thinking.

How can the FaceApp help motivate you to save for retirement?

How the FaceApp could help you save more for retirment

FaceApp is an app developed by the Russian company Wireless Lab which uses artificial intelligence to generate highly realistic transformations of faces in photographs.

When people see themselves in a highly realistic picture of their old selves it can have a dramatic impact on their current behavior, such as increasing contributions to retirement accounts.

One answer to getting people to save more for retirement is introducing them to their future selves.

“The issue for many is we often get caught up in getting by today, at the expense of our future goals. But the more we can connect ourselves to our future self and goals, the more we will act in alignment with these goals.” Said Jamie Hopkins, Director of Retirement Research at Carson Group.

Research was conducted at UCLA by Professor Hal Hershfield on the healthy upside of thinking about an older you. His main finding was consciously imagining our older self can spur us to take better care of ourselves now. In one experiment, college-age students that were shown aged photos of themselves committed to saving more for retirement.

Some people who experienced this digital interaction basically doubled what they were willing to set aside for retirement as compared to those who did not. But it is not just seeing a future version of yourself that triggers this response, it’s getting connected to that person.

It starts by increasing your connection with the future you, so you are more willing to act on behalf of future goals.

How to become more connected to your future self

How writing a letter to your future self could help you save for retirement

Here’s an exercise for the day. I don’t want you to just read without taking some sort of action.

I’m challenging you to write a letter to your future self. Find 15 minutes of your time to sit down and write a letter yourself. You can choose to have it emailed to you in 1, 3, or even 5 years from now.

This was an exercise I did a few years ago and I’ve had some clients do as well.

I wrote myself a future letter on the day I graduated from the University of Utah. It was delivered to me one year later on May 4th, 2019.

A letter from May 4th, 2018

I graduated from the University of Utah today and I anticipate being in Texas by this time next year working on my Master’s degree. I don’t have a job lined up and I don’t know if I will be able to find one.

Here are my top 2 financial goals I hope to have achieved by this time next year:

1. Save up a $10,000 down payment by May 2019 and buy a house in Texas. ✓

2. Pay off our car loan of $13,000 by this time next year. (Still working on this one).

This letter came at such a surprise because I totally forgot I had written it. I promise you will 100% forget that you wrote this letter.

After you get your letter at some point in the future, I hope that you will let me know!

Conclusion

Get to know your future self. Write a letter to yourself. Look a digitally aged photo of yourself. Then think about how you get from where you are today to where you want to be.

You might get to know your future self and be more likely to save for retirement since that future you might no longer be a stranger.

Have a great week old pal!

If you would like to read more about saving for retirement you can read check out this article.

Visit our home page to learn more.

How to Uncover & Change Your Limiting Money Beliefs

How to Uncover & Change Your Limiting Money Beliefs

Money.

Some call it the root of all evil, while for others it’s their main pursuit in life.

Like it or not, everyone has a relationship with money.

We all use it.

We all need it.

And our experiences with money shape our beliefs and influence our decisions. 

I set out to analyze my limiting money beliefs and tried to discover why I act the way I do.

I’ve performed a few assessments to get a clear picture of my limiting money beliefs. And it’s been eye opening!

I’ll also share two experiences that were stepping stones in my life and the results from the four assessments.

How We Are Conditioned

We are conditioned in three primary ways in every area of life, including money:

    Verbal programming: What did you hear when you were young?
    Modeling: What did you see when you were young?
    Specific incidents: What did you experience when you were young?

You’ll be taking a deep look inside my mind to learn about me and some of my limiting money beliefs. It’s your lucky day!

I’m pulling the curtain back and sharing personal experiences that influenced my mindset and psychology. 

Last year, I wrote about the Inner Game of Personal Finance. I talked about 4 ways that personal finance is an inner game and how to win it. 

Two Events that Shaped My Beliefs

As a kid, no one was more excited about Legos than I was.

I spent hours sitting on the living room floor constructing cities and all sorts of things. Hours of intense focus trying to build something bigger and better. 

My favorite was the medieval time’s Legos with knights, dragons, horses, and castles. I loved swapping out the helmets with different plumes making my knights look better.

I was about six and loved going to the toy section at Walmart and imagining what it would be like if I could play with every single Lego. One day, I was there with my father. He was a big part of my life at the time and he wanted to make his kids happy. Often he would buy us whatever we wanted. 

That day, I saw a big box of Legos which was the coolest set I had ever seen.

It was well over $100 and I had to have it.

I pulled it off the shelf. He grabbed it from me and put it back on the shelf and said, “no, we’re not getting that.”

He said, “it’s too expensive and we don’t have the money.” I thought, “how am I possibly going to survive?”

I’m sure I caused quite the scene. 

How Do I Make Money?

From a young age, I learned that if you want something you have to have money. After being told no, I thought to myself, “well then, how do make get money?”

The other earliest memory about money was around the same time.

My mom took me to my cousin’s house to have a sleepover.

Apparently, I didn’t want to part ways with my piggy bank and so I decided to take it with me.

I’m not sure if I was scared of someone taking it, or if I was showing a little form of money status and wanted people to see the HUGE amount of money I had saved up (probably like $10). 

Either way, I had my little piggy bank with me at my cousin’s house.

My aunt thought it was great that I was concerned about saving money. She looked at me and said, “I wish I would’ve started saving money at your age.”

She said, “If you keep saving money you can have anything you want.” 

I felt empowered. My mom taught me the importance of saving money but this was confirmed after what my aunt said. This set the stage of the importance of saving money. I didn’t want to grow old and not have money.

Each experience has shaped my beliefs about money. Some causing limiting money beliefs and others helping me feel empowered.

Results from the four assessments

I also decided to run four assessments to learn more about my psychology. It’s clear to see that what happened to me as a child has influenced my money scripts today. 

Finametrica

Finametrica is a questionnaire that financial advisors use with their clients to get an idea of their risk tolerance.

Risk tolerance is how emotionally comfortable a person is with taking a financial risk.

For example, how much a person is willing for their portfolio to diminish for a chance to make bigger returns.

To learn more you can visit www.finametrica.com.

Finametrica | Simplifinances

Before I took the assessment, I guessed my score would be 80 and I was pretty close. 

“Your score is 76. This is an extremely high score, higher than 99.5% of all scores.”

As you can see from the bell curve, my risk tolerance is in the top 1% of risk groups. This is because I’m willing to take more risks now for higher potential gains in the future. 

An example question from this assessment is: 

“Investments can go up or down in value and experts often say you should be prepared to weather a downturn. By how much could the total value of all your investments go down before you would begin to feel uncomfortable?”

1. Any fall in value would make me feel uncomfortable.
2. 10%.
3. 20%. ✓
4. 33%.
5. 50%.
6. More than 50%.

The keyword here is “begin.”

I surely wouldn’t want my investments to drop 20% but it’s something I fully expect to happen in the near future, if not every few years.

But I’m fine with it because I’m investing for the long run and I know the market on average will rebound and rise over a long period of time. 

The Klontz Money Script Inventory (KMSI)

The Klontz Money Script Inventory (KMSI) was designed by Dr. Brad Klontz to give financial professionals insight into money scripts that may be influencing their clients’ financial behaviors and financial outcomes.

It’s open for anyone to take if you’re interested in learning what your dominant money script is. 

The four identified money scripts are:

  1. Money avoidance
  2. Money worship
  3. Money status
  4. Money vigilance

Money avoiders think of money as being bad and say money as evil. They tend to avoid responsibility with money and believe that it’s taboo to discuss money.

They typically have a lower income, lower net worth, and suffer from workaholism, financial denial, and not sticking to a budget. 

Money worshipers believe that more money will make them happier and solve all their problems. This script is associated with poor financial outcomes

People who hold the script of money status equate their self-worth to their net worth.

They buy the next big-ticket item and try to “keep up with the Jones’” in order to appear as if they have “made it”. 

The fourth money script is money vigilance. Those with this money script believe strongly in the importance of saving, avoiding debt, and being responsible, and are concerned about their finances. 

Scoring Key:

· Lower than or equal to 3: Suggest you do not exhibit the money script
· Between 3 and 4: Suggest you exhibit some characteristics of the money script
· Higher than 4: Suggest you exhibit many of the characteristics of the money script

My results are below:

1.    Money Avoidance = 3.40
2.    Money Worship = 3.14
3.    Money Status = 4.86
4.    Money Vigilance = 5.25

You can see that I exhibit some characteristics of money avoidance and money worship and then scored really high on the money status and money vigilance.

If you’re interested in learning about your money scripts you can take the assessment at www.yourmentalwealthadvisors.com.

Financial DNA

The third assessment performed was the Financial DNA assessment.

The graph below shows the 10 DNA Natural Behavior Styles in relation to one another.

My style is Strategist.

This helps me see my instinctive behavioral similarities and differences to other styles more clearly.

Financial DNA | Limiting Money Beliefs| Simplifinances

Based on the scores, my two strongest behavioral factors are:

  1. Reserved – Analyzes, has high propensity to reflect, guarded
  2. Pioneer – Sets direction, ambitious, committed to goals

Some of the behavioral biases that may naturally be exhibited with these factors are:

  1. Overconfidence – Can think they are more successful at investing than they really are (this is true).
  2. Mental Accounting – Likes to put money into separate buckets for specific purposes (this is very true)!
Financial DNA performance strengths and struggles | Simplifinances

The results from the Financial DNA are fairly accurate.

When I first saw the results, the section where it mentions mental accounting and how this type of person is more likely to place money into separate buckets for different purposes, I knew they hit the nail on the head because this is exactly what I do.

Read: The Jars Money Management System

If you’d like to learn more about your Financial DNA and discover what your Natural Behavior Style is, you can visit www.financialdna.com.

Myers Briggs

The Myers-Briggs Type Indicator (MBTI) is an assessment that measures psychological preferences in how people perceive the world and make decisions. According to the Myers-Briggs test, there are 16 different types of personalities.

My personality type is INTJ which means I exhibit the following characteristics:

  • Introvert (25%) iNtuitive (9%) Thinking (1%) Judging (22%)
  • Moderate preference of Introversion over Extraversion (25%)
  • Slight preference of Intuition over Sensing (9%)
  • Marginal or no preference of Thinking over Feeling (1%)
  • Slight preference of Judging over Perceiving (22%)

If you’d like to learn about what your personality types is you can take the assessment at www.16personalities.com.

Conclusion on Limiting Money Beliefs

From each assessment, you can get a clearer picture of what your subconscious limiting money beliefs are. 

Each of us has a personal money blueprint already embedded in our subconscious mind. And this blueprint, more than anything else will determine your financial outcomes.

Think of it as a blueprint for a house, which is your design for a home.

In the same way, your money blueprint is simply your preset program or way of being in relation to money.

As you can see my financial blueprint consists primarily of the information or programming I received in the past, and especially as a young child. 

We can see that past programming determines every thought that bubbles up in your mind.

6 Stages of Change

If you want to change, you can follow Prochaska and DiClemente’s stages of change model. There are six key elements of change. Each of which is essential in reprogramming your beliefs about money. 

Prochaska and DiClemente’s stages of change model | Simplifinances
  • Pre-Contemplation and Contemplation. The first and second elements of change are pre-contemplation and contemplation. With these, you can’t change unless you know it exists.
  • Preparation. The third element of change is preparation. You have to understand that your way of thinking comes from outside you and be willing to change.
  • Action. The fourth element of change is action. Nothing will change unless you take action. You can separate yourself from people or thoughts. Get rid of those things that no longer serve you and focus your time and energy on what does. 
  • Maintenance. The fifth element of change is maintenance. You have to be willing to maintain your new sense of direction. 
  • Relapse. The last element of change is relapse. You’re human and it’s ok to have setbacks or lose track of your goals. Remember to not let it destroy you or completely derail you. 

No matter what experiences you’ve had growing up, they don’t have to stay a part of you.

You have the ability to change your limiting money beliefs.

Hopefully, what I’ve shared with you will help you understand that you are in control of your financial outcomes and your money history doesn’t have to determine your financial success in life.

You get to choose. 

Now go take action!

5 Simple Steps to Achieve Financial Independence

5 Simple Steps to Achieve Financial Independence

Financial Independence can seem like a far distant dream that will never be reached — so how do you get there? Follow these 5 steps to become financially independent.

Financial independence can be defined in two ways. 1) the moment when your income from your investments covers your living expenses such as real estate income and dividends or 2) when you have 25x your annual living expenses saved up which will allow you to live off of 4% of your assets forever. For example, if you’re annual living expenses are $60,000 a year, having a portfolio of $1,500,000 will allow you to withdraw $60,000 per year. 

What this will allow you to do is be free from having to work. Be free from worrying about how to cover your living expenses. And be free from a TON of financial obligations. 

The question is how do you get there? I will let you in on the process that’s a simple concept but it can be extremely difficult to get there. More and more people are setting their goals and vision on financial independence but the truth is less than 1% of Americans are actually financially independent.

1. Set Goals Based on the 4% Rule

The four percent rule is a rule of thumb used to determine how much you could withdraw from a retirement account each year. You’ll be able to pull out a steady income stream while also maintaining an account balance because the withdrawals will primarily be from interest and dividends.

Basically, this is the percentage of money you could take from your investments each year and not have to worry (for the most part) about losing your principal balance. 

Read: The Complete Guide to Achieving Financial Independence Through Simplifying

Most people have no idea how much money they would need to retire or become financially independent. I’ve you’ve never calculated how much you need to completely stop working it’s pretty simple. Like mentioned above, how much you need is entirely driven by your expenses. If you spend $40,000 a year, based on the four percent rule you will need a portfolio balance of $1,000,000. This can seem so far out for most people. But it is possible! The hardest part is the beginning and getting started.

If you didn’t have to work and you knew all of your basic living expenses would be taken care of, what would you do with your time? Would you help people, travel, or finally pursue your passion? Too many people get caught up in the 9 to 5 grind and forget about what they are living for. You need step one locked in before you can truly be successful with the next steps on your journey to financial independence.

2. Increase Your Income 

Almost everyone that I’ve worked with would like to learn ways to increase their income. I myself for the past couple of years have been looking for all sorts of different ways to increase my income. It all comes down to finding a skill and becoming really good at that skill. This is why I believe education is important because it will allow you to deepen your knowledge, increase your skills, and hopefully allow you to demand a higher wage from it. School is not everything and you shouldn’t expect that just because you went to college that you’re going to have a bunch of employers waiting to hire you when you finish. 

Be careful when you look for ways to increase your income because you could very easily spin your wheel wasting your time on things that aren’t going to move the needle very much. The purpose is to help you make more money in less time so you can spend time with your friends and family while getting to financial independence quicker. I recommend you check out the Side Hustle Show podcast. I met Nick Loper last year at FinCon and he does such a great job delivering a ton of content on how you can start making money on the side. 

For more specific ways to learn how to earn side income, I put together a huge list of ideas earlier this year.

Read: the Ultimate Guide to Earning Side Income

3. Decrease Your Expenses

The biggest thing that will slow down your journey to financial independence is how you spend your money. Do you spend more than you make? If so, you will need to cut out unnecessary monthly expenses and learn to say no to things you don’t need.

|”It’s not your salary that makes you rich, it’s your spending habits.”

If you don’t track your expenses you won’t have any idea where your money is going. Set up a system that works for you that makes it easy to track the dollars going out of your bank. Once you’re clear about where your expenses are going, then you can start to analyze and cut back on things you don’t want. Most people spend 70% of their expenses on these three categories: house, car, and food. Tackling these areas are going to have the biggest impact on your finances than anything else.

Decide what is a need vs. a want. Today, you need a phone, but is having the newest iPhone X more of a want than a need? We tend to needify our wants. If you’re spending more than you make, you will never achieve financial independence. It’s simple – spend less than you make. 

For ways to crush some of these big expenses, read this article I wrote last year.

Read: How to Crush Your Expenses

Earn More, Spend Less, Optimize the Difference | Simplifinances

4. Optimize Your Investments

What you do with the difference between what you earn and what you spend will determine your success of reaching financial independence. When it comes to investing, we’re looking for low-cost, broad-based, high-risk, and boring investments. Keep your fees as low as possible and only invest in something if you understand it. If you can’t understand it, don’t do it. 

Let’s say you have $20,000 to invest now and you can save $600 a month going forward, but you’re unsure where to start investing. Let’s take a look at two options. One investment charges 2% in fees for someone to actively manage it. Another option is a low-cost index fund that mimics the market that charges 0.04% in fees invested passively. Which one is better if they earn the same rate of return?

Let’s say it’s invested for 25 years and returns 10% annually. In the first example, $20,000 and $600 a month will grow to be $594,847. In the second example, it would grow to $811,219. How do you get a $216,372 difference when the investment earns the same rate of return?

Fees.

It’s one of the only things you can control. A simple 1.96% difference over 25 years could be the difference in reaching financial independence and having to work another 3 to 5 years.

Read: I Don’t Know How to Invest and I’m Scared I’ll Make a Mistake

|”Compounding interest is the 8th wonder of the world. He who understands it earns it, he who doesn’t pays it.” – Albert Einstein

5. Don’t Give Up

Once you decide to live this type of lifestyle you’re committing to live life differently. It will be hard at times. I’ve shared with you five simple ways to reach financial independence. But just because it’s simple doesn’t mean it will be easy. 

The beginning is the hardest. Once you’ve built up a decent amount of assets they will start working harder than you and will do more to increase your net worth than you actually going to work every day. 

It is possible to reach financial independence. It takes a little bit of clarity and a lot of motivation. It’s easy to give up on goals after a few months, but it’s really hard to stick to one goal for an entire decade. But if you do stick to it, you CAN have the life you’ve dreamed of having!

You get to decide the life you want to live.

Now go make it happen. 

Leaving a Legacy: A Letter to My Most Regretful Self

Leaving a Legacy: A Letter to My Most Regretful Self

Here is a letter to my most regretful self. What I wrote soon after hearing about my father taking his own life one year ago from today.

Dear Scott, 

You did it. You made it to the end of your life. Did you accomplish everything that you had hoped to? I’m sorry to hear that you didn’t. All the hopes and dreams that you had as a teenager never became a reality. Life didn’t turn out as you had planned. You got married young, had a big family early, but didn’t do the things in your marriage to make it a sustainable one. You were too concerned about making money so you could buy dumb things to impress people and keep up with the Joneses. You decided to walk out on your wife and kids. Your kids were too young at the time to realize what was going on but they grew up without a father. Those teaching moments and quality time they never had growing up impacted them for the rest of their lives. Even after walking out on your family responsibilities that you decided to create, you worked and worked but were never able to pay off your debt and build a future. You stopped believing in God because you couldn’t understand how he could let something like this happen to you. You neglected the people in your life that should have been the closest to you. You spent your life pursuing things that would not last. Now here you are, on the last night of your life and what do you have to show for it? 

When all is said and done, your life has come to an end and you’re about to take your last breath, what legacy do you want to leave? 

This moment will come to each of us at some point. 

I was forced to ask myself this question one year ago from today. Christmas Eve. The day I found out that my father had committed suicide. After hearing about it, I asked myself what kind of legacy did I want to leave for my family and friends when I die? 

One thing’s for sure. I’m not going to get to the end of my life and wish I had more money. My biggest regret will be not spending enough quality time with my family and the ones I love and truly making a difference in other people’s lives. I don’t care how many zeros are in my bank account but I will care how many people show up to my funeral. 

This is why my dad decided to take his own life. His life was filled with regret and loneliness. 

The reason I want to be smart with my money now is so I can spend quality time with my kids and wife, which is something I didn’t get growing up. This gets to the root of a lot of my insecurities around money because we didn’t have any growing up and I don’t want to have to go through that again. 

The reason I want to help people achieve financial independence is for them to decide what really matters so they can do more of those things. I don’t want people to work their entire life chasing this pile of money and have nothing to show for it and nothing to leave for the next generation. 

So with that being said, here is what I wrote a few days after I learned the news about my dad. 

12/27/17

We each know someone who left an impact on us before leaving this life. Typically grandparents and parents. Some, we remember what they did and others because of what they didn’t do. I recently found out a few days ago that my father shot and killed himself on Christmas eve. The news was difficult but it wasn’t the news that hurt the most. What hurt the most was when he walked out of mine and my siblings lives 17 years ago.

I was 8 and I remember the last time hearing from him. My older brother and I had our bags packed waiting for my dad to pick us up for our annual September hunt. We waited all day and he never showed up. We cried going to bed that night because we were supposed to be hunting. 

He didn’t make an effort to be in our lives. I’m sure he wanted to be but for whatever reason, he wasn’t. He left no legacy for his kids. When he vanished from our lives and the divorce was final, the only thing he left was debt which put us in a hard financial situation. My mom had to file bankruptcy and we lived in our house until the bank knocked on our door and kicked us out. My father struggled with money his whole life. When he took his life he had many outstanding debts, creditors after him, and no money to even pay for funeral expenses. 

My point is that my father did not leave a legacy. He worked his entire life and had nothing to show for it. He spent his entire life running from people. He spent his entire life avoiding the people that should have been closest to him. He spent his entire life hiding and lying to people that tried to support him. 

My first son will be born in February, which is only a few weeks away and I couldn’t imagine not being in his life. If you’ve heard of the book “The Last Lecture” by Randy Pausch, that is what a father should be. He knew he was going to die soon with cancer and recorded videos of himself that his kids could watch at different stages of their lives. It was the only thing that he could do to stay in their lives.

The people that needed him the most did not see him. By not having him in my life I feel it benefited me because it has helped me to be a stronger man and learn what kind of father not to be. 

This has been my experience with my father and from it I plan to do everything I can to be the best father that I can be. To leave a legacy that people, my kids, and my wife will remember me for the good that I did. I hope to be able to provide my kids with everything my father didn’t.

Everyone has their own struggles and circumstances, but how do you want to be remembered?

What legacy do you want to leave?

If you knew you were going to die, would the people closest to you know that you loved them?

Have you planned out what would happen after you die?

Would you rather have unpaid bills, debt collectors, no life insurance and no savings when you die?

Or would you rather have no debt, plenty of life insurance for the people closest to you, and plenty of financial resources to cover the cost of funeral expenses and more to leave to your kids?

Would you rather work your entire life with nothing to show for it but debt and no time?

Or would you like to have the time to spend meaningful time being there for your family?

If you haven’t thought of these questions before, now would be a good time to focus on the things that really matter to you and how you plan to leave a legacy.

Why This Couple Quit Their 6 Figure Jobs To Travel In A Van

Why This Couple Quit Their 6 Figure Jobs To Travel In A Van

I had the opportunity to meet Alli and Matt from OwenYourFuture.com and learn about their story at FinCon back in September. They have an incredible story and did something only a few people would dare to do. Which is quit their 6 figure jobs and travel the country in a van. I hope you enjoy today’s guest blog post! 

My husband Matt and I were living the quintessential American dream – we were homeowners, we were newlyweds, and we each earned six figure incomes. But in April of this year, we quit our jobs, rented out our house, and self-converted a van. In May, we moved into that van fulltime and have travelled 15,000 miles since. So, what caused us to turn our lives upside down?

It all started in 2014, when I ran across a Mr. Money Mustache article “The Surprisingly Simple Math Behind Early Retirement,” I immediately sent it to Matt. After he binged all 200+ blog posts on that site, the wheels were churning and they couldn’t be stopped.

At that time, we were maxing out our 401k’s, but other than that, we were spending everything we earned. I didn’t blame us though – we were just doing what everyone else did!

Once we discovered FIRE (Financial Independence, Retire Early), we spent the next 4 years ramping up our savings rate, eventually saving 70% of our after tax incomes. We had planned to save up 1.2 million and then retire early, but we never made it there. As Marketwatch put it, we were FIRE failures.

So what happened? A few things:

  1. We got really clear on what we wanted our ideal life to look like. We realized that when we reached FIRE, we didn’t want to stop working. We just wanted to work on things that brought us more joy. So, we thought to ourselves, why couldn’t we start working on those joy-producing (and hopefully income producing) businesses, now? Why did we have to wait until we had 1.2 million in the bank?
  2. We both didn’t enjoy where we were living (Bakersfield, California) and our mental health was struggling working 12+ hour days in our 9-5’s and then spending nights and weekends on our two side-hustle businesses. We also wanted to start a family and plant roots somewhere we could see ourselves living long term.
  3. We realized that even though we were on the fastest path to FIRE, if we continued down that path, we actually wouldn’t be creating the ideal life we wanted to live. So we became FIRE dropouts. Matt wrote this post diving deep into evaluating the risk when leaving our jobs.

The funny thing is though, leaving our jobs was actually the easiest part. The hard stuff came after. (the Marketwatch article above talked about some of it)

Since then, we’ve had numerous days where we doubted our decision, where we regretted leaving only halfway to FI. We questioned if we made the right choice, and we’ve talked about going back to work. Our businesses haven’t grown as fast as we expected (this is not surprising to anyone who has started a business), and mentally it is challenging to watch the numbers on our bank account drop every. single. month.

Owen Your Future | Simplifinances

But we’re giving ourselves more time. We’re going to go “ALL IN” for the next 3 months before we consider going back to work. And if we do end up going back to work, it will likely just be one of us. We don’t want to give up on the businesses just yet, but we also have to consider our own personal risk tolerance and what’s best for us.

So if you’re looking to make a big change in your life or career, I hope our story inspires you or at least opens your eyes to some of the challenges we’ve faced! While Instagram might glamorize the entrepreneurial lifestyle, it is still life, which means there will be the inevitable ups and downs.

If you’re interested in hearing more from us, subscribe to our YouTube channel or hang out with us on our blog or Instagram.

An Interview With a Financial Coach of 36 Years!

An Interview With a Financial Coach of 36 Years!

Last year, I met with a financial independence coach who has been helping individuals with their finances for over three decades! I’ve had the notes tucked away but I decided to share it today because it’s so full of little nuggets and takeaways I think you will get a lot of value from it if you’ve ever wanted to help people with their finances. 

I met with Greg Kesten who is a financial coach. He wrote a book called “Financial Freedom” and lives a life of simplicity and purpose really helping other people. 

Check out our interview!

Do you know other financial coaches?

I have never found anybody, yet, and I’ve been looking and I’ve kept my eyes open to who really does financial coaching. And the main thing is because they haven’t figured out a way to make a living. It can be done, but it has to be done with the right combination.

What value do you feel you bring to your customers versus a financial advisor?

One distinction you might be interested in is a financial advisor is a financial salesman, a financial coach is a financial educator and counselor, very different. One gets paid by commissions, AUM, or fees. As a coach, I get paid for doing sessions. Just like if someone were to come to me for personal development. So, the value I create is a lifelong value of helping someone from where they’re at to where they want to go as long as I’m going to live.

I’ve got an old ROTC buddy who I’ve known for 42 years. And he’s been a client ever since he got out of the air force and started flying for American Airlines since 86. So that’s probably my longest client right now. I’ve outlived all my clients who started out with me back in 1982. But what happens is now I get 4 or 5 referrals a year. Then I’ll have 3 or 4 or 5 people pass away. Or will disappear. So I’m not trying to grow my practice. I just keep going along and I have 45 clients. And they’re the best people in the world. I know more about them than even their spouses because I work with them on a very personal basis. And that’s very fulfilling.

As a coach, I go way deep. Where financial advisors or salesman go very wide. They’re just trying to get money to manage and sell stuff. We don’t have a relationship like that. The relationship is with a counselor over the decades. A lot of people have been with me 20 years plus. I’m like part of their family. And that’s very fulfilling but you have to have the right personality and you have to be very open on how you can stay in business. The main thing on personality is the value, I really create the value of being a counselor to them. Like an outside third party, totally objective person in their lives. Which no one else is. That creates a lot of value. A lot of times in my hour sessions, we’ll spend 50 minutes of that hour session talking about personal development, family relationships, health issues, family issues, and 10 minutes on how their money is doing. I have to be flexible with that. I am also a certified coach with 7 habits of highly successful people. Which is a Steven Covey book, a great book.

I coach that and I am big on personal development and people sense that. People sense when you can create value in their lives as opposed to what do you got to sell me. Big difference. Long answer, short question.

How have you been able to sustain this business for such a long time and provide a living for you and your family?

A couple of ways. One. I am always looking for opportunities to coach. I’ve gotten several clients when I go on a cruise, when I travel on an airplane. People say, “what do you do?” “I am a financial coach and educator.” They pause and you can see the wheels turning … “Is that like an advisor?” “No actually an advisor is a salesman and they sell life insurance, mutual funds, and annuities, those are salespeople. But I actually educate, coach and tutor my clients on how their money works.” “Oh really, tell me more about that.”

So I’m a product of the product. I walk the walk and I talk the talk. I never ask clients to stretch financially in ways that I haven’t stretched. I’m a living breathing example of what I teach. So they will sense, as a salesman you can get away with being a hypocrite because you’re just a salesman. As a coach, you’ve got to really dive into what’s in their heart and in their mind. And the way that they will let you into their heart is when they can trust that you are not trying to sell them something and you’re sincerely interested in what’s going on with them, and you’re a been there done that kind of guy.

So for instance, you will be able to build your practice with people in your generation. Someone like myself who is 64 years old, my generation won’t allow you to coach them because you are the age of their grandchildren. And I discovered that. I started in this business when I was 28 years old fresh out of the air force. And when I told people who were in their 40’s and 50’s that I was in this to stay and this was my professional calling to be a financial educator, some of them literally rolled their eyes. It’s like, “ah yeah, ok kid, what are you selling?” But I stuck with it, and I’ve been doing this for 36 years.

So you have a passion, you have an objective, you don’t let anything discourage you from that passion and you build your practice and you just maintain it.

And that’s where I’m at right now. Now, I haven’t found anyone to take my practice when I die. Now, I’ll be working my practice until I die. Because there is no reason to give up my goose laying the golden egg or the cow giving the bucket of milk every day. As long as I have my mental capacities I will be working with my clients until I am 90 years old. And that’s extremely unique because most people will say, “when are you going to retire?” “Oh, I’m going to retire when I am 60.” “What are you going to do when you’re 60?” “Oh I’ll just sell my practice.” Because, it’s about me, not about my clients. Where for me it’s about my clients not about me.

However, what I do is I have narrowed down my clients over the years to where I am much more discreet to who I spend my time with. Because there are clients that I just absolutely love like a brother and sister, and then there are clients that I don’t want to walk away from but they’re not the easiest people to coach.

How often do you normally meet with your clients?

Once we get them up to cruising altitude (35,000 ft), which typically takes about 12 one hour sessions. Then we do a maintenance session once every 3 months. And every quarter, every three months, boom, we got a financial plan in place. They send me the updates to their financial plan, we talk about it, we go over their macroeconomics, microeconomics and how it affects their plan, what their investments have been doing, cash reserves, liabilities, financial risk, cash flow management, financial vision statement.

I do something that I don’t know of anyone else who does it or the way it could be done and that’s a financial vision statement. If you were to ask 100 people on the street, “what does your hard copy financial vision statement say?” They would say, “I have no idea,” right? Which is not an indictment against people, it’s just the way it works. I carry my financial vision statements with me. I have a statement for my own life, my marriage, my family, being a son in my family, business, being a teacher, being a financial coach. My financial vision statement which is my wife and I: “We enjoy the abundant life and are generous in sharing our money with others. We are financially secure, independent, and free. We contribute to the lives of others giving them greater hope and faith in the Lord.” And also my health vision statement. That’s what we do with our money and that is what we’re about. And that’s why we don’t live in a 5000 square foot home and pay $5,000 a year in property taxes.

“You live simple, and you simply love life.”

We live a life of quiet inspiration. As Ralph Waldo Emerson said, most people live a life of quiet desperation. It doesn’t have to be that way. But most people don’t have an interest in learning about the gospel, and most people don’t know if they did, where to find it. So they’re the fate of life. The people I coach, there is a fate in their life that brought us together.  If people stay with me, they become millionaires, financially, plus they get their life together. And if they don’t they had every opportunity for me to give some observations and suggestions.

What do you think of the industry of financial coaching in the future?

Financial coaching is not going to grow. Because the financial services industry does not want it to grow. The financial services industry is inherently corrupt. It’s all based on what they can sell people for commissions. American Express, Merrill Lynch, UBS, on and on and on, the money flows to the top. And Fidelity, Vanguard. It’s about being able to build their buildings, and whether their customers make money or not is not important. Now they don’t advertise it that way. But the financial services industry really is corrupt, therefore, why would it change its way? It’s worked out very well. They make billions of billions of dollars a year by charging people fees that the people don’t even know they’re getting charged (hidden fees).

The financial coaching industry will always be a very thin market. 30 years ago I would have said only a fraction of the people out there want to be coached. 30 years to today, it’s exactly the same statistic. 20 – 30 years it’s only going to be a fraction of a fraction. The way that I have been able to make this a full-time job, which people cannot figure out, is I have a unique personality to be a financial coach. I am very engaging. And I am very empathetic and sympathetic, and I have compassion for where people are at in their lives. Salesman don’t. They can come across as being that way, but after being around salesman for a while you go, that guy’s a salesman.

The financial coaching industry will be jealousy talked about, and it’s been attempted in many cases, and I’ve coached for other companies, but they are inherently corrupt. The money goes to the top and they can’t keep good coaches.

Out of all the coaches that I have hired over the years. There is only one who comes close to what I do. And he makes a living as a financial salesman, good guy, sells life insurance, mutual funds, annuities. 56 years old. I can’t think of one other person besides myself and him who understands financial coaching, and I’ve been in this for 36 years. I know a lot of the players.

So does that make me better than anyone else? No. It’s just a very vertical niche. Just like someone who represents multimillionaire performers. If you were to say to the agent of Steve Young, “hey I want to be like you, how do I do it?” However, with the young people that come here and talk to me about what I do, they have good hearts, but it will take a lot of work to find their niche to coach.

You’re doing exactly what you should do, and that is being a financial counselor at the U, if you could even stay on with them after you graduate and make a decent living, something, you have to pay your dues. You gotta pay your dues. Then you graduate to a company that needs you to be a junior planner for them. Where you can start to see how they manage money, and how they work with their clients, etc. And you spend X amount of years there. And then you start relationships, and then you can imitate what I do and say, you know folks, I’m sorry this didn’t work out, would you still like me to be of service?

Are you a part of any communities or organizations?

There is no organization that does what I do. There are planner organizations, sales organizations, but there is no viable financial coaching organization. So I resigned all of my licenses, I was a CFP, I had my 63, 22 and 7, then life and health, I had all those licenses and I resigned them because I decided I don’t need them. So I am a boutique guy. And my overhead is $10 a month for my website. So I can do a lot of great things for people.

I want to live my life in quiet inspiration, and I do. I’m not looking for fame or status or title or notoriety, or any of that stuff. Because I’m living the way that most people want to live, but they haven’t figured out how to. I don’t say that bragging, I say that as I’ve learned that vicariously from multi-millionaire people to people on the brink of bankruptcy. I’ve learned vicariously what a person needs to do to live a life of quiet inspiration.

So I haven’t had to learn painfully. Learning vicariously is a lot funner. Learning experientially is painful. But I have made some financial mistakes, my biggest financial mistakes over the years is I’ve lent money to people and they turn out to be gifts. That compassion I have in my heart to help people out, “Can I loan you a little bit of money?” oh yes, yes, yes, and in almost all cases it ends up being a gift. But you know what, I don’t owe anything. My life is a stewardship.  So I don’t mind sharing. We are very generous in our tithes and offerings and other things because that’s part of a sharing life.

If you’d like to become better with your finances and help others to do the same. Sign up for my 7 Day Financial Fitness Email Course!

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