S4 • EP 3 The reason you feel broke on a good salary

Speaker A: By using five to six different applications to manage your money is actually making you poorer. The more point of entry you create,

Speaker B: the more exposure you carry.

Speaker A: We don't want to add the seventh app to the five to six that you're already using. We want to replace the stack one place where they all live together.

Speaker B: All right, welcome to another exciting episode of gwp. This is episode three of season four, and I'm super excited to continue to bring you these solo episodes. You may be asking, papa, where are, ah, your guests? And, you know, like, I've shared on the previous episodes, definitely plan to continue to bring on the guest, but at the moment, I'm just doing these solo episodes to, you know, educate you about what we're building with gwp, the Growing World platform, and also kind of share a lot of the things that I've learned through my time working as a portfolio and risk analytics specialist and, uh, some of the other experiences that I've had. So I'm super excited to continue to bring you these episodes. If you haven't listened to my previous episode, I encourage you to listen where I talk to you about why you feel like you're behind, why most young adults feel like you're behind. Despite making all the right decisions, quote, unquote, textbook right decisions with their finances, they still feel like they're behind why that is happening. And then in the episode before that, I also share with you some of my life transitions and, you know, what I'm building right now, what I'm looking to build, and why I had to stop the podcast for some time. I share all of that in those previous episodes. And so if you haven't listened to those yet, I encourage you to tune in and listen. It's super exciting and a lot of insight shared in those episodes. So I encourage you to, to listen to that. Now, today's episode, I definitely want to talk to you guys about how those five or six applications that you're using to manage your money are making you poorer. Yes. Even though you're using five to six applications to manage manage your money, those five to six applications are making you poorer because there is a hidden wealth tax in fragmentation. When your financial picture is fragmented, there is a hidden wealth tax that you're paying. And today I'm, um, excited to actually dive into this with you. So here's the main picture. Right, so you actually don't have a money problem. You, as a young adult, I don't think you have a money problem. I think you have a fragmentation problem and fragmentation is quietly taxing your wealth every single month and setting you back instead of helping you to build wealth. So this is the one thing I want you to think about, right? You don't have a money problem. Yes, I don't think you do have a money problem. I think you have a fragmentation problem. And every month this fragmentation problem is continuously taxing you. And so this whole episode, I think I've broken it down into kind of five forces, right? So there are these five forces of, of financial fragmentation that are basically taxing your wealth every single month, right? It's taxing your wealth and not helping you to build wealth. So instead of these five applications kind of being able to add value, they're not. They're not. You would think the more applications you have to be able to manage your money, the better you are. But I hate to break it to you, those five to six applications you're using to manage your money are financially taxing you. And you may be asking yourself, ah, uh, maybe I don't, I don't use five to six applications. I think you do. The first time I learned about this, I was shocked. I said, no, there's no way I, there's no way I'm using five to six applications to manage my money. And so I quickly went into my phone and I started to check just on my bank apps alone, I had at least four banks apps, which is four bank apps, four different banks with four different balances in these four different bank accounts, right? And then to count my cash app, right? And then my retirement account, then my

Speaker A: high yield savings account, and then, you know, all these basic, you know, fragmentations.

Speaker B: And then, you know, my, my investment account had its own, uh, account.

Speaker A: And so there's this fragmentation that's kind of taxing.

Speaker B: And I had no idea, right? I, when I, when I realized this, I said, no, I have to come back and share this with the listeners of gwp. And so that is what I want to talk to you about today. How those five to six applications you're using to manage your money is actually holding you back. And so I break down, I break these down into five forces. And number one is that cognitive overload. And I'll talk about it.

Speaker A: Number two is, is that micro leakage, right? These micro leakages that you don't really, you don't, you don't notice because it's so small.

Speaker B: Right. Number two is that abstract money? Hm. Ah. And I'll dive more into what I mean by abstract money. And then number four. Number four, sorry, number Three is the abstract money. Number four is the that data conflict. Right. Because I have all of these applications, they're all giving me different data points. Right. So we'll dive into that.

Speaker A: And then number five is the security

Speaker B: surface area, how much security you have to cover. Now that you have five to six applications with money everywhere, you kind of increase the surface of your risk and you kind of need to be able to cover that. And so super excited to dive into all of this with you on this episode today. So without much I do, let's, let's dive into it. So the average young adult in America is using between five to six financial apps to manage their money. As I've said, five to six financial apps to manage their money. Right.

Speaker A: The financial stress is still number one

Speaker B: for young adults under 40.

Speaker A: So I want that to sit with

Speaker B: you for a second.

Speaker A: So the young adults have more tools. They have more tools. They're using more tools, five to six of them to manage their money, but they also have more stress.

Speaker B: That's not a coincidence. Right. This is a cause and effect. Right.

Speaker A: And that's what we're going to prove

Speaker B: on this episode today.

Speaker A: How come if I'm using five to six tools to manage something, why is that specific thing still stressing me? Why?

Speaker B: Why?

Speaker A: If I have many tools, if I have multiple ways to get to a

Speaker B: destination, why am I still stressing about how to get to that destination? Right. And we're going to talk about that.

Speaker A: So let's talk about the first force,

Speaker B: which I said, is that the cognitive load that this comes with. Right. So there's a phenomenon in behavioral finance called decision fatigue. You may have heard it before. If this is your first time hearing it, it's called decision fatigue. So it's not a productivity blog concept. No, it's, it's a documented, it's well documented. It's peer reviewed research, right. That's documented this whole concept of decision fatigue. So a study using over 26,000 real bank loan application officers found that credit officers, these bank loan, credit officers faced

Speaker A: too many decisions over the course of

Speaker B: the day and they stopped making active decisions. Right.

Speaker A: So anytime they're faced with making too

Speaker B: many decisions, in this research, what they

Speaker A: found was they stopped making any active

Speaker B: decisions, they defaulted to inaction. And researchers calculated the financial cost of

Speaker A: their inaction was more than nine times the average salary of all of these bank loan officers. Nine times the cost of their inaction.

Speaker B: So because they had so much information

Speaker A: to make these loan decisions, they ended

Speaker B: up not making any decisions at all.

Speaker A: And the cost of them not making any decision, the cost of their inaction

Speaker B: to their ability to make decisions because

Speaker A: of this decision fatigue that I mentioned. Cost nine times the salary, right, of

Speaker B: these, of these offices. Nine times.

Speaker A: That's what cognitive overload cost in financial, in professional finance, uh, context. And so you think about that for

Speaker B: yourself and you have to ask yourself, what does that mean for me, right?

Speaker A: Because if you're getting all of this information and you're being bogged down to not be able to make decisions, what does that mean for me?

Speaker B: So let's think about this in your own context, right? Let's bring this home, right?

Speaker A: So you open your banking app, let's

Speaker B: say whichever bank you have, you open

Speaker A: that app and there's a $500 surplus

Speaker B: sitting in there at the end of

Speaker A: the month, you open this app and

Speaker B: there's a $500 surplus sitting in there.

Speaker A: And, and you know, you should move it, right? You should probably move it into your

Speaker B: Roth ira, your High Yield savings account, or perhaps maybe your brokerage account.

Speaker A: But your investment app is about six swipes away. So you know, you should be moving this money from your bank app to

Speaker B: your investment app, right?

Speaker A: But your investment app is what, six swipes away, right? There's, you have to make another decision,

Speaker B: right, that requires a separate login, right?

Speaker A: And You've already made 17 decisions today. You've already made so many decisions today from the moment you woke up up to that point where you're looking at this $500 surplus that you should move

Speaker B: into one of these efficient accounts.

Speaker A: So guess what you do? You tell yourself, well, uh, I'll do it this weekend. And you don't do it. That money sits in that 0.01 interest

Speaker B: account, which is your checking account, which gives you a 0.01 interest, right?

Speaker A: You tell yourself you were going to

Speaker B: do it on the weekend.

Speaker A: And if that money was invested into maybe your High Yield savings account at uh, let's say 8% annually, it would double every nine years. But because of these decision making fatigue that you're experiencing, you end up not making that decision. You don't make, you don't, you don't

Speaker B: make the moves that you're supposed to make.

Speaker A: The cost of that one moment of friction, if we compound it over time, it's not that $500 that you didn't move, it actually compounds. It becomes a thousand, it becomes 2000. The difference between a version of, of your financial future that is comfortable versus one that is genuinely free, right? So the decision Making fatigue is causing you to not make optimal financial decisions. Why? Because you have these five to six applications that you have to manage across the board. And so you're making multiple decisions at the same time. And the average person doesn't make very quick financial decisions.

Speaker B: Right.

Speaker A: You kind of have to ponder over it. It takes time before you make the decision. And if you're fatigued by the time you make the decision, you just end

Speaker B: up not making any decision at all.

Speaker A: And by the time you make that decision, it's so late that you have missed the opportunity for your money to have compounded if that money was moved to an account that is more efficient and has a higher yield than that 0.01 checking account that your money was in. So that's one of the forces right

Speaker B: there, that decision making fatigue.

Speaker A: So now what do you think that second force would be?

Speaker B: Well, I uh, already give you, give you the hints in the beginning of the episode. I said it's the micro leakage problem. What does that look like? So here's the part where you should be genuinely annoyed.

Speaker A: Listen, so if you're using six financial apps and three of them are charging

Speaker B: you 499 per month, right, to maybe

Speaker A: just access the premium tier, and most

Speaker B: of them have at least one of these premium services.

Speaker A: If you think about it, you're spending $180 a year to track your money. You're spending $180 a year to track your money, just to track your money alone. You're spending $180 per year not to grow your money, but just to track your money.

Speaker B: That's $180. Now if you think about this, $180

Speaker A: if it's invested annually at 8% over

Speaker B: 30 years, yes, I know 30 years is a long time.

Speaker A: But you're paying $180 annually not to grow your money, but just to track it. And if this $180 is investing, invested right over 30 years, that's over $20,000 that you didn't have. That's over $20,000 that uh, you're paying thousands of dollars in future wealth for the privilege of watching your money stay still. That is what I mean by using five to six different applications to manage your money is actually making you poorer. Because between these five to six applications there are at least three of them that's requiring you to pay at least 499 to access the premium version. And that 499 compounded over time annually is $180. So you're blowing through $180 annually just to watch your money stay still. You're not managing your money. You're not paying $180 to manage your money as some people do. Right? You paid this sort of management fees and get your money managed. That's not what you're doing. You're actually paying $180 annually for your money to stay still. You're losing money. You're becoming poorer. When you think these financial tools are actually giving you control, they're actually taking

Speaker B: control away from you.

Speaker A: Now, here's what I need you to

Speaker B: understand about these apps.

Speaker A: They're businesses, right? They're. They're not financial advisors. These apps that are charging you 499 to access the premium tier, they're not financial advisors, they're businesses. Their incentive is not to get you

Speaker B: to financial freedom as fast as possible. That's not what they're looking for. No.

Speaker A: Their incentive is engagement.

Speaker B: Right?

Speaker A: They have a KPI. Their KPI that you're measuring is the time you spend in the app. Your daily active users, right? How, uh, that's how they raise their next round of funding. That's how they raise money for this app that you're using to manage your money. Their goal, again, is not to make you build wealth and grow your money

Speaker B: as quickly as possible.

Speaker A: These applications, these five to six applications that you're using are not financial advisors.

Speaker B: Again, they're not financial advisors.

Speaker A: Their goal, they don't have a fiduciary duty to help you manage your money. They have KPIs. They, they're tracking how many users, they're tracking how many times you open the app today. They're tracking how many people you share the app with. They're. They're tracking how many times you, you logged in. And research actually shows that amateur investors who often open, let's say the Robinhood app, end up making more trades, right? They end up making more trades. And so the more you're opening these apps, the more you're making these terrible financial decisions. Okay? So every streak notification, every confetti animation, when you round up that 47 cents, that's not a feature, that's a retention mechanism. These apps, they want you to stay on the app as long as possible. These apps are built like Instagram. These apps are built like TikTok. They want you to stay and engage and not leave the app. They don't want you to stay on the app to build your wealth. You're not staying on these financial five to six Financial apps that you're using to build your wealth. When you're staying on that Venmo app, you're not staying on there to build your wealth. When you're staying on that budgeting app, you're not staying on there to build your wealth. You're looking at these confettis. These are just retention mechanisms, right? You're being kept busy feeling productive without actually building wealth. They're keeping you busy on the app with all these bells and whistles, but you're actually not building wealth in actuality, right? There are algorithms that are built to keep you on the app, not algorithms that are built to help you to be able to build wealth. And that is why these five to six applications that you are using to manage your money, they're actually making you poorer. They're actually making you poorer. They're not helping you to be able to build wealth. Now, I said I was going to tell you about five forces.

Speaker B: That was the second force.

Speaker A: Now let's dive into the third force. The third force is that abstract money effect. And what do I mean by that abstract money effect? This is more of a kind of like a behavioral, economic science thing, right? It's this mental accounting that happens. So behavioral economists have a name for something you've certainly experienced before, and it's called mental accounting. It's the idea that your brain doesn't treat all money as equal, even if it is. So $100 on your Venmo balance feels fundamentally different from $100 in your brokerage account, even though they're identical dollars with identical purchasing power. You have this sort of mental accounting. Uh, you're managing your money mentally, right? Because you're not kind of giving these, these values the same amount of weight. Even though they're the same, you're not giving them the same amount of weight. So let's, let's think about, like, a real scenario.

Speaker B: Let's use Venmo, right? Because a lot of you guys are using Venmo.

Speaker A: Think about the last time you had money sitting in Venmo from a friend

Speaker B: paying you back from a dinner or brunch, right?

Speaker A: It's always nice to get that friend to pay you back. Did it feel like real money or did it not?

Speaker B: Right?

Speaker A: Or did it feel like bonus money? Like it didn't fully count? Usually it doesn't because research shows most people spend Venmo balances faster, more casually, and less deliberation when spending this money than they spend the same amount from the checking account. And the reason is simple. It's the abstraction. You're given these two values of money. You kind of compartmentalize in them. You're putting them in two different compartments. You think the money that's from Venmo is bonus money. So it kind of doesn't count. It doesn't matter how I spend it. I can just, you know, send it to my guy, m. My dealer for something for those new sneakers or whatever you'd be buying, right? Or you can just waste it haphazardly and it wouldn't really count. It doesn't really feel real. When money is fragmented around, you know, you just fragmented across six different interfaces. None of it feels real. None of it, because it's all in different places, and none of it feels real. And when money doesn't feel real, the pain of spending it is reduced. The pain of spending the money is reduced. You just. You just spend it anyhow, which means you end up spending more. I mean, why do you think more people spend a lot when they use their credit card? Look, I worked that Gap.

Speaker B: I worked that gap for a long time.

Speaker A: And when I worked that gap a lot of times, and even Old Navy a lot of times, people would come to shop and, you know, they would buy a lot of stuff, and their card may decline. And, you know, we had. We had a job to do, and our job was to sell those Old

Speaker B: Navy cards, the Old Navy credit cards,

Speaker A: the Gap credit cards. And so we'll offer the credit card to these people whose card, what, just declined their checking account, didn't have enough money to pay for the stuff that they just came to the store to purchase. But we will sell them this Gap

Speaker B: card, which is a credit card. And obviously, like, you don't need money to apply for the credit card, but

Speaker A: for us, our, uh, bonuses was tied

Speaker B: to the credit card.

Speaker A: And so we would help these people open these credit cards.

Speaker B: And today when I talk about it, trust me, I feel really bad that I actually help people open those credit cards.

Speaker A: But we had a job to do, okay? And we would help these people open these credit cards. And because the purchase declined when they got approved for the credit card, guess what? They would go back and grab more stuff and even increase the average transaction value of the stuff that they bought at the store, which is. It's insane, because, first of all, you don't have enough money to cover the purchase. But because you got this money, that doesn't feel real.

Speaker B: It's a credit card.

Speaker A: It doesn't feel like it's coming out of your checking account right away. They ended up spending more. They ended up spending more. And so when money doesn't feel real, the pain of spending it is reduced. The pain of spending is reduced. You're swiping in, it doesn't feel like you're losing money. So the end of the month when it hits you and you're like, wow, believe I spent that much. So here's the version of this that actually matters for wealth building. If you don't have one place that shows you your total net worth in real time, right? Your 401k plus your Roth, plus your brokerage, plus your high yield savings account, plus your check in, your brain cannot properly wait financial decisions. It cannot. This example that I just gave you shows you that these people that were coming to these Old Navy stores, these Gap stores, their brains were not weighing these financial decisions that they were making. They were just making haphazard financial decisions. You might genuinely believe you're having a good month you might genuinely believe you're having a good month when your financial picture is actually in the red. So this person is getting approved for the credit card. They might just believe, you know, I have a good credit score. That's why I'm getting approved. But you're, uh, actually putting yourself in the red because to begin with, you just couldn't afford it. But because the money doesn't feel real, there's no pain of spending it. Not because you're irresponsible, it's because the data is scattered and your brain is filling the gap with the most comfortable available interpretation. The data is fragmented, the data is all over the place. The data is in five to six different apps. And so your brain is filling this, this gap of scattered data with comfortable available interpretation, which means it's telling you you're doing well, you're having a great month, you should spend more. Meanwhile, if you had a, uh, two total portfolio view and had all the data in one place to make that better financial decision, you probably wouldn't have made that decision. And so that is another thing that keeps, you know, um, young adults that are using those five to six applications, financial applications, to manage your money, that is one of the things that makes them poorer. So let's go to the, the, the fourth force, which is the conflicting data problem, right? So this one, it kind of hits, uh, a little, a little different because, you know, some of you guys are great with your money. You're, you're doing really, really well, right? Your savings is great, your emergency fund is great, you know, and not all, all of us Are, are in the same brackets. But some of you are doing really, really well. But here's the thing I want you

Speaker B: to think about, right?

Speaker A: So you're checking your apps and you feel responsible, right? You're on top of it.

Speaker B: You're always checking your apps. You feel responsible.

Speaker A: But if the apps are giving you conflicting information, right? If app a says you're 20, you know, uh, 2,000 or $200 over budget this month, and a, uh, B, which synced four days ago, hasn't refreshed to reflect that $2,000 or $200 that you're in the green and. But then it says you're fine because

Speaker B: it hasn't synced, right?

Speaker A: It says you're fine. Now you have two conflicting data points. When you have two conflicting data points, what do you think is going to happen? What do you think you're going to do when one is telling you you're in the green and then one is telling you you are in the red?

Speaker B: Both.

Speaker A: One of these five to six financial applications that you're using is tracking your money, but one is giving you a conflicting data point as, uh, compared to the other one. Uh, research on confirmation bias tells us that when we receive conflicting information, we don't resolve the conflict rationally. We just don't. We tend to believe that the interpretation that is more comfortable. So in this case, because these two applications are given as two different data points, we're going to go with the one that is more comfortable, right? We're going to go with the one that is more comfortable, not the one that is least comfortable, that is telling us we're in the red, but the one that is more comfortable. And in financial terms, you believe the app, um, that says you're fine, right? You believe the app, um, that says you're in the green not because you're lazy, but because your human cognition doesn't. It doesn't, it doesn't understand and doesn't want to go through that uncertainty. It doesn't want uncertainty. Us as humans, we don't want uncertainty. And so we use these, what psychologists call heuristics, these shortcuts to make the

Speaker B: quickest possible decision, right?

Speaker A: And so we take the path of least resistance. We take that confirmation bias, right? What actually confirms that we're in the green is the one that we're going to go with. And again, this is not because you're lazy, but because you want the most comfortable decision. You look at data and you feel like you're managing your money, but looking at the data is not the same as changing your behavior based on accurate data. Based on accurate data. The accuracy of the data is so important, man. When I worked at Bloomberg, the amount of time clients would spend to just make sure a data point that didn't seem right would be corrected. They might ask for approval of a formula, you know, if you're tracking the performance of your portfolio, for example, and let's just take one metric that could

Speaker B: track, track the performance of your portfolio. Like a sharp ratio.

Speaker A: Maybe the guy comes and he's like, man, my Sharpe ratio looks off. And they're not going to accept that their Sharpe ratio looks off. Right? Because that sharp ratio, right, or that Jensen ratio, whatever ratio they're looking at is going to determine whether their portfolio is performing or underperforming. And they need to make sure that data is accurate because they're making financial decisions, uh, based on this data. They're not using confirmation bias to say, well you know, because it looks green, I'm going to take the green number. No, they're going to ask you for a proof out and guess what? Sometimes some of these prove outs can take a day, hours, whatever just to come up, just to come back with it. Sometimes this would have to even go to engineers for engineers to be able to look into the data and figure out what is going on with this. Why is this value coming up the way it's coming up only for the client to feel comfortable and say, okay, I'm going to use this data point to make a decision. Why do we as young adults that are looking to build wealth, why are we not applying the same kind of institutional level rigor to our finances? And we allow ourselves to use these five to six financial applications to manage our money where the data is fragmented and sometimes some of the data is not even accurate and we're allowing that data to guide our financial decisions. That is not right. So think about it. The act of checking can actually create false confidence. Just checking your accounts, just checking any of these five to six applications doesn't necessarily mean you're, you're managing your money. It doesn't mean you're changing your behavior, doesn't mean it's making the data any accurate.

Speaker B: Right?

Speaker A: And, and it creates this, this false confidence. A ah, feeling of financial responsibility. That isn't supposed to, it's supposed right. It's not linked to reality. It's not the reality because you feel like you're in control because you're checking these, these applications. But in reality you're not in control. In reality you're looking at data that is inaccurate, and you're looking at this inaccurate data across multiple, um, applications.

Speaker B: Cool.

Speaker A: Let's keep going. So the fifth and final force that

Speaker B: I want to talk about is kind

Speaker A: of the, the security area, surface. So the security area problem, because you're exposing your finances into these five to six different applications. All of these applications have your financial data. You're exposed.

Speaker B: Right?

Speaker A: Again, I spent years in working in portfolio and risk analytics, and one of

Speaker B: the core principles of risk management is surface area.

Speaker A: Right? The more points of entry you create,

Speaker B: the more exposure you carry.

Speaker A: The more areas where attacks can come from. The more exposures you have.

Speaker B: Right.

Speaker A: The more open you are to attacks.

Speaker B: Right.

Speaker A: Six financial, uh, apps means six set

Speaker B: of credentials to manage, six set of

Speaker A: passwords to manage six companies with access to your financial data. While they all claim to use anonymized data, the anonymization is imperfect. And often your data gets sold to advertisers and more importantly, six potential breach points gets open because you're using all these six applications to manage your money. The average unauthorized, uh, transfer dispute, right, takes two to six weeks to resolve. During that time, you may have limited access to your funds, right? And here you are, you're exposed to this risk, right, that compounds with every app that you add. And so think about it. You're using these five to six applications to manage your money, which is supposed to give you more control, is supposed to give you more peace of mind, is supposed to give you more clarity. But here you are being exposed. Here you are getting inaccurate, uh, data and so on. And so these five to six applications that young adults are using are not necessarily making them richer. It's not necessarily making, helping them to make better financial decisions. It's actually making them poorer.

Speaker B: It's doing the opposite of, uh, why we use these applications.

Speaker A: Okay, so, you know, when I started building gwp, I kept coming back to one question. Why does institutional wealth management not have these problems? You know, when I worked in portfolio and risk, I, I, I worked with a lot of institutional wealth managers, a

Speaker B: lot of asset managers, a lot of asset owners.

Speaker A: And I don't think they had this problem. I don't think they necessarily dealt with these five forces that I, I, uh,

Speaker B: have addressed to the level of the

Speaker A: way we, we deal with it. So why does the professional portfolio manager not suffer from cognitive overload when reviewing a client's asset, which could have millions and billions of dollars in it? Why do they not get overwhelmed? Why didn't, why do they not get to this decision fatigue that we, we, we struggle with because of these five to six applications that, that we use. The answer is structure. They have one view. And with that one view, every position, every account, every allocation is in one place. It's updated in real time with one score that tells them what matters. Do you think a professional portfolio manager is looking at their portfolio performance from seven different applications, from six different apps, just to be able to tell their clients how, how well they performed or if they underperformed?

Speaker B: Uh, no.

Speaker A: They have one specific view as source of truth where they can see everything in one place. That's what we built the total portfolio view to do. Not to add another app to your

Speaker B: stack to replace the stack.

Speaker A: We don't want to add another app to your stack. We don't want to add the seventh app to the five to six that you're already using. We want to replace the stack one place where your 401k, your Roth IRA, your brokerage account, your high Yield savings account and your checking account, they all live together. And one score, the GWP World score. And what does this score do? This score tells you not what your balance is, but where you actually stand. Your savings rate, the money you're making versus what you're spending versus what you're saving. What is your savings rate? Is it 38%? Is it at a rate that is going to allow you to be able to buy a home in the next five to six years, if that is your goal? Is it at a rate that is going to allow you to buy the condo that you wanted to buy or to be able to buy that car? Is it, Is it, Is it at, uh, a right? Is it, Are you on the, are you on pace to hit your financial goals? Your diversification. The GWP World Score tells you about your diversification. What is this? What does your diversification profile look like? Are you well diversified, or are there some exposures that you should kind of rebalance that portfolio in order to make sure you're limiting your exposures to certain, um, assets? Your diversification. What does your risk exposure look like? Are you overexposed to the crypto industry where if there's a shock of 10%, you might lose half of the value of your portfolio? Or what does your exposure to, you know, financial or the tech stocks look like? So when that sector of the market moves, what is going to happen right to your portfolio? What is going to happen to your overall portfolio? Being able to see what the diversification looks like. Your debt structure, what is the Structure of your debt? What does the structure of your debt look like? Right? What is that student loan you're carrying and not paying off? What is that doing to your overall wealth picture?

Speaker B: Right?

Speaker A: That credit card that you're making only the minimum payment on, how much is that dragging you from being able to build wealth? So you're making minimum payments and you're paying this interest on the credit card, but your portfolio, on the other hand, your investment portfolio is returning only 8% while you're paying 22% on that credit card. What does that look like, your trajectory? Are you on par to be able to build wealth? Are you on track to build wealth? What does that look like? So a number that means something. Instead of five apps that each mean a fragment of something, they all mean something different. We're giving you that a GWP World score, a number that means something, not a number that means a fragment of something. So we hope that you know by creating this view, because, you know, on this podcast I've been talking about building wealth and building wealth and building. It is the fourth season, I'm still talking about building wealth, which is what all. That's all this podcast is about. But what is the point of building wealth if we're not able to make measure what we're doing? We need to be able to measure the world that we're building. Okay, So I kind of want to give you a scenario of how some of these things that I'm, um, um, explaining to you come into play. So I want to walk you through a real pattern that I hear constantly. So someone, let's just call him Marcus, right, is a 31 year old. He earns about $78,000 a year. And he's genuinely trying.

Speaker B: You know, Marcus is working really, really hard. He's trying. He's trying to build wealth.

Speaker A: He has a Robinhood for his brokerage account. His 401k is through his employer's portal. His high Yield savings account he opened a year ago, he has Venmo and He also has CashApp for peer payments. And he's using one of the budgeting

Speaker B: apps also, which he checks most mornings. Right?

Speaker A: So he has five apps he feels on top of his finances. In fact, he's opening these apps as frequently as possible. And he's checking his balances and he's locked on. At least he's logging onto at least one of them every single day.

Speaker B: Right.

Speaker A: But here, uh, is what Marcus doesn't know, right? His budgeting app syncs in 48 hours, so it's delayed by 48 hours. And so all his decisions that he's making are, uh, lagging. It's kind of like using a lagging indicator to tell how the economy is doing. A lagging indicator for the namesake is lagging. You need a leading indicator, something that is real time, something that can tell you how markets are doing today, like the s and P500. If you looked at it, it's not a lagging indicator. It's a leading indicator.

Speaker B: Right.

Speaker A: Looking at unemployment data is a lagging indicator. Unemployment data is stale. It's picked up from, uh, some time ago and then reported. By the time it's reported, it's lagged. It's not a leading indicator. Okay? Now, speaking about Marcus, his High Yield Savings account has $1,400 sitting there, right. And that he moved temporarily six months ago and forgot to reinvest it. So this money is. Is sitting in. His High Yield savings account hasn't been reinvested. His Robinhood portfolio hasn't been rebalanced in 14 months. And there's talks of a recession that's coming. His Robinhood portfolio hasn't been rebalanced in 14 months. And so there's a profile that Marcus wants his portfolio to have, and it currently doesn't have that profile because he's overweight somewhere else and underweight somewhere else,

Speaker B: and his portfolio has not been rebalanced. Okay?

Speaker A: And because every time he opens it, he sees the positions but doesn't know what to do about them. He sees that the portfolio for 14 months hasn't been rebalanced, but he doesn't know what to do about them, so he just closes it. That decision fatigue comes in, right? Because he's made so many decisions already. We talked about that decision, uh, fatigue earlier. Marcus closes the app for 14 months. He hasn't taken action. Right? And his 401k is still sitting in the default target date fund from when he enrolled in the 401k when he

Speaker B: was 24 years old.

Speaker A: From when he was 24. So he hasn't. He hasn't changed it. He hasn't made changes while his life circumstances, um, are changing. He's not making that update. And Marcus is not financially irresponsible, as you can see. He's pulling all the right levers. He's doing all the right things, and he just. He's doing all the right things, and he's experiencing these five forces that I've already talked about of, uh, financial fragmentation, and he's experiencing all of them simultaneously at the same time. He's experiencing all of them at the same time. And he has no idea. He has no idea. He's experiencing all of them at the same time. So how can we help Marcus? Do you think we should add a 6 app to the 5 apps that Marcus is using already? I don't think so. He needs one view that shows him his total net worth, his savings rate, his drift from local allocation. Right, his drift from his target allocation. So something that shows him his diversification, his allocation where his portfolio is kind of allocated, where he's put in the funds, where he has exposures. So he needs a score that tells him where to focus next. And that's not complicated. That's just what the current app ecosystem is designed to give. Okay, that's not complicated. The current five to six applications that he's using are not designed to give Marcus that kind of view. So, you know, here is your one move this week. I want you to actually do this.

Speaker B: Okay?

Speaker A: Don't skip it. Don't wait for 14 months like Marcus. Here is your one thing this week

Speaker B: that I want you to actually do.

Speaker A: Don't just think about it, Actually do it. So open every financial app on your phone. Open it. For each one, ask a single question. Has the app prompted me a meaningful financial action in the last 30 days? The five to six applications that you're using to manage your money are, uh, making you poorer.

Speaker B: I'm telling you that they are.

Speaker A: So this is what I want you to do right now, okay? Open all, every single financial app on your phone, and for each one, ask this question. Has the app prompted you to make any meaningful financial decisions in the last 30 days? Has it prompted you to make any meaningful financial decisions in the last 30 days? Not a notification, not a balance check, a, uh, real action, a, uh, transfer, a trade, a contribution, a real decision. If the answer is no, delete the app right now.

Speaker B: This week, right now.

Speaker A: Delete the app. You're not losing access to your money. By deleting the app, you're reducing the cognitive overload that these five to six apps are costing you. And some of them are costing you thousands of dollars in inaction. And the action starts right here.

Speaker B: Delete the app.

Speaker A: So in this week's GWP score corner, I want to explain one component of the GWP World score that connects directly

Speaker B: to everything we talked about on today's

Speaker A: episode, and that's the portfolio consolidation component. When GWP calculates your wealth score, one of the inputs is how unified your financial picture is. Not because Having multiple accounts is wrong.

Speaker B: It's not.

Speaker A: But because fragmented accounts with no unified view are measurable indicators of lower financial decisions. We've already talked about this. It lowers the financial decision quality that you make. The research backs this.

Speaker B: Right.

Speaker A: The score that we've created penalizes fragmentation. Not to judge you, but because consolidation is one of the highest, highest leverage moves available to any wealth builder at any income level.

Speaker B: Okay.

Speaker A: If your accounts are scattered, your score reflects that, and fixing it is one of the fastest way to move your number. And that is one of the ways you can actually move your GWP score into the positives. Okay, so if you want to see how your current financial setup scores get early access to the total portfolio view we've been building, the wait list is open, the link is in the show notes.

Speaker B: Right. And it takes only 30 seconds. Awesome.

Speaker A: So I've shared with you the five forces. I've shared with you how the GWP World score is able to help you use, um, move away from using those five to six applications to manage your money that are making you poorer to actually get in that total portfolio view that we're building. I'm super excited to continue to bring you all these exciting episodes of GWP

Speaker B: and stick along and, you know, we'll

Speaker A: continue to share with you how we're

Speaker B: building the growing world platform. And as always, thank you for joining. Thank you for listening. I hope you found this episode helpful.

Speaker A: Please share this episode with someone that's using five to six applications to manage their money and still saying money is

Speaker B: their number one stressor. Share it with someone. Peace.