How Identity Shapes Money Decisions with Carl Richards

Speaker A: I've found that it's easier to help people make to say no to bad behavior if they have a much, much deeper and bigger yes. And the much deeper and bigger yes to me is the purpose of life.

Speaker B: The heart of Advice. It's personal. It's pragmatic. Here on the Emoney Heart of Advice podcast, we explore how to navigate both sides to help you take your financial plan practice to the next level. Join us as we speak with financial professionals to learn how they deepen relationships and improve client outcomes. This podcast contains purely educational information and nothing discussed may be construed as legal, tax or financial advice. Please consult a financial advisor for any financial, investment or money management questions. All views or opinions represented are solely the opinion of the speaker and do not represent those of Emoney Advisor or any of its affiliates or subsidiaries.

Speaker C: Welcome to the Heart of Advice podcast, presented by Emoney. I'm Sasha Grabenstetter.

Speaker D: And I'm, um, Connor Zung. We're your Emoney experts. Today's guest has spent over 25 years helping people make better decisions. Not necessarily by throwing around jargon or spreadsheets, but having real conversations about the role money plays in all of our lives. For more than a decade, he was the New York Times sketch guy, where his simple hand drawn sketches helped millions of people see money differently. His work has been featured in Harvard Business Review, Morning Star and npr, and his drawings have been taped to refrigerators and office walls around the world. Here, he's here to challenge how you think about money and maybe how you think about yourself. Please welcome Carl Richards. Carl, thanks for joining us.

Speaker A: Yeah, Connor, super glad to be here. Thanks for having me.

Speaker D: Yeah, of course. I guess. What's. So let's start there. Can you just tell us about yourself, some of the moments that maybe shaped your views on financial planning and led to the Carl Richards that we have with us today?

Speaker A: M. Yeah, such a. You know, it's always tempting, um, I think it's a human thing, but it's certainly tempting to me to look backwards and make up really cute stories, right? Like narratives about how all these things make sense and it was all part of a grand plan. But, um, anybody who knows my story knows it wasn't part of the grand plan. So I, I, I, you know, I literally applied to be a security guard during college. I thought that's what I was applying for. It turns out that ads had securities, not security, and I didn't know the difference. So I got into the industry quite by accident. And that was right before the big tech Bubble. And I. I. So I had early experience of being like, wait, I'm not a security guard. What is this? Oh, it's a math job. That's. I remember thinking, like, oh, I'm in a room. We're doing calculations. Like, this must be a math job. And then I walked into a, uh, you know, an early ipo. It was actually Netscape for anybody who remembers that. And I remember walking onto the trading floor at the big firm I worked at and realizing, this is not math. Do you know what I mean? Like, there was so much, like, energy. And so I was like, okay, it's not security guard. It's not math. What is it? And that led to this quest that's been going on for 25. Like, what is it? Like, how do we help people make better decisions with money? And. And the sketches happened because, really, out of an act of desperation, one day I. You know, I had clients. I was trying to explain a complex, uh, concept that I felt like they needed to know before they could make this decision. And I'd never done this. I wasn't a doodler in high school. I have no art. Background is, like, should be obvious by looking at my work. And I. I stood up late the day, I just got blank stares, right? And they were smart, successful people. I remember who they were. A doctor and a technology sales rep. And I, uh. Just out of an act of desperation, I, like, the first time ever, stood up at a whiteboard that was in this shared conference room, drew a thing, and they were like, oh, I get it now. And I remember being just, like, sort of addicted to that feeling of, like, clarity. Like something complex, something abstract, something intangible. Just became something somebody understood. And again, no grand plan with it. No. No grand realization. I just did it again, right? And then I did it again. And then one day I put it on the. The early version of the Internet. And, uh. And then I. You know, for two or three years, nobody was paying attention except my mom and my sister, right? And then one day, I got an email from. And I know how it happened, but again, it was just pure luck. A guy named Kent, an advisor named Kent sent an email to the New York Times, said, you guys might like this. And the time said, would you do this for us? And I said, yes. And that was a week. At the end of the week, we were like, should we keep going?

Speaker D: Yes.

Speaker A: So it was just this series of kind of playing in traffic. And the times led to the book, and the first book led to the second book. And here we Are Right. So um, the thread, the through thread to it was like a, how do you increase your luck surface area? Right. Like how do you play in traffic a lot? And B, this deep. I didn't know I had it but I've just realized the last couple of years like this deep passion for helping people like live lives of meaning. Like. And when you said 25 years helping people make better decisions. Yeah, it's better decisions of how to align our use of capital with what's really important to us. And that's been the through line of the work.

Speaker C: I really appreciate listening to your story. Um, I've actually seen you before, Carl, and met you in person a very, very long time ago at the Financial Therapy association conference in 20 2013.

Speaker A: Yeah, you were at the first event that I cried publicly at. That's right.

Speaker C: Oh, I don't know if I remember that part of it. I just remember meeting you and getting.

Speaker A: I remember. Can I just tell you real quickly? I remember going into that thinking, here's a room full of financial therapists for people who want to uh. And I need lots of financial therapy. And I was like, I'm going to go the whole way. And I was like, I'm going to treat this in 60 minute keynote as a therapy session. So that was the first time where I just pulled the whole thing open.

Speaker C: And um, Carl, you often really remind advisors that their real work isn't about crunching numbers. It's about behavior and meaning. And so I want to ask, in your view, what's the true job of a financial advisor?

Speaker A: Yeah, well, Sasha, that's such a great question. And I have, I have made a mistake over the, over the, over the years and I've been um, called out for it. And I really appreciate it that I've maybe overemphasized. Sorry, that's not the right word. I've de. Emphasized the, the math side of the job and I've never meant to, but because of my super enthusiasm for the sort of heart side of the job, sometimes it comes across that I'm de. Emphasizing the head side.

Speaker D: And I.

Speaker A: So I'm trying to do everything I can to uh, to make sure people understand. I think the math stuff is incredibly important. Right. And it's table stakes at this point. Do you know what I mean? Like you have to be a technical rock star and everybody is. And the stuff's available outside. And so I think if we understand that context, the job to me is not your money or your life. It's your money and your life And I think understanding that, that if we don't help people get clear about why, like, why are you doing these things in the first place? Like, it's such a funny to me, it's such a funny thing that, like, somehow money has become this thing that sits over in this container that is called, you know, like spreadsheet or math over here, and it doesn't have any impact with our, uh. Uh, what are you talking? Like, every single fear, desire, dream you have is unfortunately, like, there's some funding with dollars. Like, maybe it just needs time. Well, time sometimes is bought with dollars. Like there's some element of. Of the current underneath everything. And so what I think the job is. What I think the job is to be a technical superstar, like, to understand, like, if you. Do you know how to build an amortization table? Do you know what standard deviation is? Like, do. Do you know what correlations and, um, standard deviations and rates of return that need to go into a Monte Carlo analysis? Like, do you know that? Yes. And help people understand that if it's not helping you towards your definition of a meaningful life, what's the point?

Speaker D: Right?

Speaker A: What's the point? So I think it's both of those,

Speaker D: which I, I completely agree with. And, uh, it's talked about, you know, recently, finding this true, deep passion for helping people live lives of meaning and that, you know, this connectivity between your money and. And your life and the financial planning, I think, is in the crux of that as well as just advisors in there too. What. What led you to rethinking about how advisors were delivering advice and building trust? I. I feel like it's. It's everywhere now where, you know, it's much more about the relationship, especially with the advancements of technology. But like, uh, you. You've been on this soapbox for quite a long time now, kind of preaching connectivity between money and goals or money and values. Can you just talk a little bit about that?

Speaker B: Yeah.

Speaker A: Yeah. Thanks, Clara. And preaching and soapbox is a nice word I would have used, like ranting and yelling into the wind. So it's been, um. You know, what it really was is it all started with the behavior gap. So it all started with seeing this really interesting behavior with investments. Like, it was a very, very small segment. It's like, oh, that's interesting. We often buy high and sell low. That's super interesting. And I remember, like, I had the best training. I thought I had the best training in the industry. You know, cfp. I had the SEMA designation. I was at a firm that provided fantastic training and I couldn't get people to behave, right? Like, um, and I wasn't even sure I could behave myself like my SEMA designation, right? I could do manager search and selection. And I figured out after a cycle or two, probably 18 months or so, without telling you the whole long story, but I figured after 18 months or so that I had built a very complex, really disciplined way to buy high and sell low and charge people money for it. I had the best training in the world. So I was ready to quit and go to law school because that's what my grandpa did, right? And then I stumbled upon some of this research that was like, it wasn't just kids from the hills in Utah making this mistake, right? This, this. And, and I, you know, the early Dalbar research, think what you want of it. But like Morningstar's later research that shows that this is a persistent problem, you know, And I don't care if it's half a percent or 7%, I don't think it's 7, but I think it's closer to Morningstar's number. Right? Um, and so then I was like, okay, well how do you solve that? Well then, as you probably know, about that time, this revolution came along where we were going to actually introduce portfolio design, Nobel Prize winning research, where we're, ah, instead of have a hunch, buy a bunch, we're going to consider each individual component of the portfolio. Then that was helpful, but didn't solve the problem. Then we had this crazy idea as an industry and a profession to tie the portfolio to goals. Goal based planning shows up, right? Like, oh, okay, this is getting better. The whole time I was just like, this is getting better. And then, and then I was like, man, I noticed this interesting thing with clients where humans, Me too. Where if you're scared enough, you'll just change your goals to give you permission to bail out in a scary market, right? If you're just, if you're scared enough. Oh yeah, nevermind, I don't care about that. Just get me out. Wow, that's fascinating. So I started thinking a lot about what's under goals, what was under goals. And we had some early work done by a whole bunch of really fantastic financial planners around values, getting clear about values. And I actually really loved and uh, taking I think a slight step further to purpose, this idea of purpose. So once you get down to purpose, suddenly you're uh, at like, oh, what's the purpose of like we want to link your portfolio to your definition of the Purpose of life. You know, now we're talking, you know, and, and I again why I've found that it's easier to help people make, to say no to bad behavior if they have a much, much deeper and bigger yes. And the much deeper and bigger yes to me is the purpose of life. If I can help you say, wait, wait, wait, wait. You're doing this so that you can spend time with your family, mainly outside and serve in your community. And then I can walk you from there to the planning process. I can walk you from the planning process to the investment, specific investment process. And I can walk you from the investment process to our specific portfolio choices and say these are all linked. Do you see? Now then you're more likely to say, okay, okay, I, I got it, I got it. Not, not foolproof, but more likely. That's how it happened.

Speaker C: I have a follow up question, please. Um, I am curious how you define purpose.

Speaker A: Yeah, it's, it's such a good question. I, I remember and I've been meaning to go back and do more of this work, get into the academic work around purpose because I remember where I was walking through. We moved to New Zealand for what was supposed to be a year, turned out to be four. And I remember the exact place. I was in a forest in New Zealand, listening to a podcast. Um, and I'm blanking on all of the names right now of uh, Scott Barry Kaufman, Scott Barry Kaufman's podcast. Back then I think it was called like Positive Psychology. And the guy who was interviewing was talking about purpose and like his whole academic career was around purpose. And so my, my definition is that it's something a little more enduring. It's, it's a, it's an active statement. Uh, I can give you statement examples. I remember Jerry telling me that he doesn't want to be, he just doesn't want to be a burden to the kids and he wants to make a contribution to his community. That's a, that that gives you a, a sense of purpose. I've got a friend who is deeply engaged with the, um, uh, it doesn't make much sense to people who don't live in the mountains, but there's a, there's a backcountry skiing sport called ski mo. It's where you race up the hill and down the hill and there, there I've got a friend who's sense of purpose is linked to the contribution he's making in Eskimo. In that community. You could say mountain bike community or trail running community, but it's not that.

Speaker D: Right.

Speaker A: Like, if you talk to them, it's actually, I just love passing stuff on to the kids in my community who love spending time in the mountains. But it's not even that. Right. It's deeper than that. It's like, I have a passion for the mountains. These places have changed my life, and I want to be involved with making sure that continues. And then you move up from there, like, oh, okay, I'll coach. What. What's. If I have that purpose, what's the kind of person who has that as their purpose? What would they do? And you pick a thing as a forcing function. It's not that you care about riding a mountain bike really fast. What you care about is the enjoyment of the mountains. Right. So that's kind of the work that I think we do. So let me give you another example. Client shows up and says, I need $5 million in a sailboat to retire. You know, like one of those very mimetic I saw on Instagram goals that clients often have. And I'm exaggerating it because the sailboat's so exaggerated, but $5 million in a sailboat, and with the work we do, we sort of over, maybe right up front, maybe over time, we unpack that a bit, and we realized, like, what they really want is a sense of adventure and a place to involve other people in that sense of adventure. Right now we're much closer to a sense of purpose, a sense of adventure, probably really cool experiences with the people that they love. That's much closer to a sense of a, uh, sense of purpose. Then we can layer on top. Well, it turns out you don't have to have 5 million a sailboat to do that. You could do it this way or this way. And we get into a bit of, like, how George Kinder's work helps with that. Right. Like an expression of the value, an expression of the purpose rather than the thing itself. Is that. Is that helpful?

Speaker C: I think definitely, for sure. And I. I also like the example that you gave the first one of, like, don't want to be a burden, like, knowing what you don't want, but also what you do want. I think obviously you went a little deeper underneath that, but I think even just knowing that first top level that you talked about is helpful for advisors to help their clients.

Speaker A: Can I just make one more comment on this?

Speaker C: Uh, uh, yes, of course.

Speaker A: I think for everybody listening, don't be too anxious. And I've caused part of this problem, and I acknowledge that publicly by saying I've said Um, the goal of my first meeting was somebody was going to cry, and it wasn't going to be me. And so, I mean that sort of as a joke, but not really. Um, and I actually still operate that way because it's how I'm wired. But I realize many m. People aren't wired that way. And so you don't have to be too anxious to get to this perfect thing you call purpose. I call it a statement of financial purpose. You don't have to. Like, this could take 18 months with somebody. Somebody could, say, sell. But $5 million, and you'd just be like, okay, cool. You know, like, let's. Let's work on that. And then. And then maybe the next meeting, you're

Speaker C: like, hey, you know what?

Speaker A: I've been thinking about it. Tell me a little bit more about that. Like, why is that. Why is that important? What would. Let's pretend you had it. What then, right? Like, you slowly. And maybe that takes not one meeting. Maybe that takes 18 months. And I think sometimes I get so fired up about it. There's this sense of urgency and this preciousness around it. I think it's the other way of thinking about this is just like, we want to help clients get clear about what they really care about, because it turns out they don't. None of us humans know. Especially with Instagram, right. As a metaphor. None of us humans really know what we want anymore. So goal clarification and purpose. Clarification over time is a massively valuable thing. And by the way, it will change my friend, who's very specific about his coaching. I promise you, in 10 years, you probably won't be doing the same thing, but he'll probably still have that same purpose underneath it, but he might be doing it in a different way.

Speaker D: Yeah, it's really cool. It is an amazing suggestion for advisors to continue to advance their thought process and how to actually help clients. Uh, circling back to the actual how, which I think is kind of the basis of the behavior gap, as I'm thinking about kind of where we're heading. And you talked about values. Maybe it was the next step towards bettering people, and then now this level of purpose. What do you think that advisors can do to continue to evolve, to try and help clients drive towards that? You talked a little bit more about continuing discovery, asking probably better questions to get to that level of purpose or understand that purpose, but what else can they do to try and help their clients?

Speaker A: Yeah, that's a great. I love that. Um, my friend Jerry Colonna often asks the question, what is it about your behavior that is complicit in the results you're getting? Like the results your clients are getting. So if you're getting, um, you know, for example, and I'm not saying you shouldn't do this, but if we're sending out quarterly performance reports and really emphasizing them with like a quarterly performance review, uh, is that helpful? I'm not suggesting it's not. I'm simply saying it's an interesting question, right? Like, we, we as an industry, we certainly did this to people. Like, nobody woke up. Nobody was born thinking they need to outperform a benchmark, right? Like, no, nobody had that goal until we taught them that they should have that goal. And so, and again, I think that one, that that example is probably less prevalent inside this thing we'd call the profession. But nobody else out there in the world, they don't know the difference between a real advisor and a fake one.

Speaker D: Right?

Speaker A: So that, that I would just start looking at things like what, what are the things on your, uh, what are the things in your background on your zoom calls? Are they stock certificates? Is it the Ibison's chart? What's in your office? What's. What's on the, on the coffee table? Is it, you know, Money magazine? Um, is CNBC on in the waiting room or the foyer like that? Like, don't let me catch you doing that, because then I get. Anyway, so, so, like, those are simple places we could be thinking. Like, when we send out a monthly newsletter, do we send out market commentary and economic data? Again, I'm not saying it's a bad idea. I'm just saying maybe we should deemphasize it a little bit, tone it down a bit and put more about living a meaningful life and maybe even some examples of good behavior. Should we look at everything we're doing and say, how can I reinforce the kind of conversations, the kind of behavior I want clients to be having versus encouraging it? That's one simple example. And then I think the other thing that we need to be aware of, to me, and again, I'm not in any way predicting anything. I'm simply saying it's been a long time since we've had scary, something super scary in the markets. Like, there's lots of scary news. It feels incredibly uncertain. But the markets have been like. Have been well behaved. Like, we haven't had anything prolonged. You know, we've had short, little scary things, but nothing prolonged. You know, like if, if. And so it leads me to believe that it's Always a good time. I don't think now's a better time or a worse time, but it's always a good time to be slipping in little conversations around risk. Because remember, risk is an arbitrary concept until you experience it. Right. And talking about getting punched in the nose is completely different than actually getting punched in the nose. And it helps to talk a bit about it. And how would you talk about that? You talk about it in the context of goals and purpose and values. Right. Remember, our portfolio was built this way to help you give you the m. The best opportunity, the highest likelihood of realizing these, this sense of purpose or meeting these goals with the lowest risk. Remember, that's why we built this portfolio. And by the way, we know there's going to be prolonged downturns. We just don't know when.

Speaker B: Right.

Speaker A: Uh, there'll be a surprise to us too, but it won't be a surprise they happened. It will just be a surprise when and why. Like we're starting to blend that language in. To me, I think it's really, really important now and probably always, actually.

Speaker D: Which leads me to a, uh, follow up question which is like, we, we are the change that we need to effect. Right. I think a lot of clients come to financial advisors still, even real financial advisors, and that is the expectation or the experience is that they just want returns because that's what their, you know, their peers said is, I'm, um, you know, I got X amount of alpha. They don't even know what alpha means, but they got it and then you want it. So what, what do you think clients actually want from their advisor? And how does that differ from what we feel like we're offering as advisors?

Speaker A: Yeah, look, Connor, you're pointing to a real, real problematic paradox here. And the, the problem is nobody shows up in your office asking to cry on your couch. Right? Like, no advisor has ever had anybody show up and say, help me live a meaningful life. Uh, as far as I'm aware, it's never happened. Even the ones that, even the ones that have branded and marketed themselves that way, like, gone full life planning, like, I still don't think. I can't imagine. I have never heard, uh, maybe it's happened. I've never heard of people showing up like, hey, uh, so they typically show up with a presenting problem. And that presenting problem is often acute. And I sometimes compare it to an arrow in their arm. It's a long story in terms of how that analogy showed up in my mind, but an arrow in their arm, like, and if you show up at the emergency room with an arrow in your arm, and the doctor wants to talk to you about ankle flexion or your diet. Like, you're gonna be like, bro, get the arrow out of my arm. You know? So I think how. What we can realize is that when advisor, like, we greet those presenting problems with empathy. This was really hard for me at first. I just remember thinking, why in the world are we having this stupid conversation about performance? And I think I could go toe to toe with anybody around investment performance. Like, again, back to our head thing. Like, I felt like you, like, put me in any room, any institutional consulting room, any room, and I can go toe to toe about investment performance with the investment process that I used. And I was aware that it didn't matter at all if we couldn't. If we couldn't fix the behavioral problem, which leads us all the way down to purpose, like we've talked about. So I think what we have to do is greet it with empathy, like, hey, I. Connor, I get it. Why performance would be important to you and why you'd be nervous right now.

Speaker D: Or.

Speaker A: Or I get it. Why perform it like you, uh, show up. The guy next door, the guy I ride my bike with, told me about this. I get it, why that's important to you. And it's actually really important to us too. It's a key driver in your overall success. Performance investment performance is a driver of your overall success, and it will be incredibly important. Right. Would it be okay if we back up first, right. And then we slowly move back to sort of whatever your questions are on. Why does this matter and how do we build if it's a client who's coming in complaining about performance? Okay, why is my portfolio just doing, you know, only did 17% this year because my buddy got 42. Uh, then. Then, like, we've got some. I call it vitamin C problems. Like, we haven't done the work in advance to help them understand, but sometimes we have to say, look, I. Look, I get it, man, when I hear those stories too, I wonder. In fact, at least once a week, our whole investment committee probably hears a story like this and we go check it out like. So you, um, you're implying here that you take it seriously. Would it be helpful if I walk you through why? Why? What you're hearing from your. And then we have to have really good stories. Not stories, but examples, data around a. We don't even know if that guy really got 45%. Did he get it on his whole portfolio to get it on 10 bucks that he lent his buddy. It's a sports bet. Like we don't know. And B, it doesn't matter anyway because here's what we're after with you. And we take them from. So I'll wrap this up right here. Like, I call this the scary markets conversation. But it can be the greedy markets conversation too. It enters at the product top of a pyramid, is what I'm pointing to. For those of you who can see. This is a sketch, one of my sketches. The top of the pyramid is sort of product market economy news. Almost all those phone calls come in at the top of the pyramid. But what we don't realize is that that's the least important, incredibly important part, but least important part of the pyramid. Like, as we move down, we've got investment process or planning process. We move down, we've got the plan. We move down, we've got purpose. So what we want to do is, with deep empathy, greet them at this phone call. Because they've been spinning around it for two weeks. You know what I mean? Like, they knew what you were gonna say, they didn't wanna call you. Cause they knew they were gonna get this tad little bit of a lecture. But if you greet them with empathy there and say, hey, I get it. Could we back up real quick? And then you pull back out. Let me go grab my file. I call this the please hold method. So greet with empathy, step one, number two, please hold. It's just creating space between the stimulus and response. Hey, can you hold on a sec? Like, I hear you, Connor. I understand. Da, da, da, da. Can you hold on a second? Let me go grab my file. Grab the file. What do you do when you have the file? You say, hey, before we get to that, can I just check in on something? You told me time with your family mainly outside and service in your community and your church is really important to use. I, uh, just want to check before we move on, is that still true? So we're trying to pull them out of the branches where the wind is blowing to the roots. Then we can move up from process to plan, plan to investment process. Sorry. From purpose to plan, plan to investment process, all the way up to the product.

Speaker C: What is really the relationship between money and identity? And does adjusting one impact the other? And let me also emphasize, I feel like you've done a lot of really deep work with both. And so I think you come from a place. This is going to. You come from a place of experience to tell advisors, hey, you know, I, I've done this as years, how it's. It's easy. And you do make it sound very easy, but I feel like for them, maybe it might be harder. So, uh, again, the question is, what's the relationship between money and identity? And does in, uh. Does adjusting one impact the other?

Speaker A: That's such a beautiful question. Thank you. Um, and thanks for the, you know, explicit and implied compliment. And I'm. I just want to be super clear. Like, I'm a. I'm a mess, right? And, like, I like trying to figure this all out. Like, all my work really is. Is an adventure. It's not meant to be prescriptive or advice in any way. It's just meant to be. Like, I've been walking on this path I found this spring. It was really hot. If you happen to be hot and you happen to be walking past this spring, there's water there. And so money and identity, to me, is one of the coolest subjects. Identity is so amazing. Like, such an amazing discussion. So I. I think that we, um, are often more interested in being seen as the type of person. So, like, for example, we're often more interested in being seen as contrarian, for example, than we are as actually being contrarian. Right? We're more, uh. I'll circle this back to your question, but we're more interested in being seen as creative than we are interested in actually being creative. Right? And I think this shows up with clients. Like, we're more clients in our own work. Like, we're more interested in. And you find this. As you slowly uncover this sense of purpose, you find that sometimes we're more interested in being seen as the person that owned Bitcoin, right. Than actually doing the hard work. We're more interested in being seen as a disciplined budget person than we are actually being. We're more interested in owning the Wake surfing boat. Sorry. We're more interested in. Sorry. The idea of something. The idea. Second homes. This really hits with second homes, right? How many clients have bought second homes and then a, uh, year or two later, been like, man, that thing's an anchor.

Speaker D: Like, we.

Speaker A: That thing drives me crazy. Like, I hear that more with second homes than maybe anything else other than other than maybe boats. Boats are the other thing that people are like, it's much better to have a friend that has a boat than actually have a boat. So I think when we start to, uh. Like, when we start to unpack. I was in this fascinating conversation on my podcast, 50 Fires, with Austin Kleon, who wrote Steal like an Artist, and he said Like Austin's done really well, um, really, really well for himself and he lives very frugally. And he said, you know, you're talking to the guy who still drives a 25 year old Honda and sometimes my feet get wet when it rains when I'm driving the car. Like, like, like and but he said I'm the person, I'm the type of person who drives a 25 year old car and we spend a bunch of time on like okay, that's so interesting. What do you mean? What does it mean to be the type of person? And so I think all of that's preamble for the idea of if we get more clear about our, our own self belief as advisors of our own identity. It turns out you can kind of just decide that if you want, for instance, if you want to um, if you want to do more work in public, whether that's have a newsletter, write a book, do a podcast, like whatever, you can kind of just decide. I'm the kind of person who, I don't know which ones comes first, identity or behavior. They're a circular function to me because if I behave a certain way, I start to identify as that kind of person. If I identify as that kind of person, I start to behave a certain way. So like, what do writers do? I'm a writer. What do writers do? They write. Why are you producing a podcast every morning? Because that's what uh, a podcaster, and my definition of a podcaster does. Why are you investing on the 15th of every month? Why do you invest on the. I just invested yesterday.

Speaker B: Why?

Speaker A: Well, because it was the 15th. Because I'm the type of person who is disciplined. What does the type of person who's a disciplined investor do? They set up an automatic investment on the 15th. Like I. That's a bunch of different examples of. I'm not sure if it's the behavior or the identity, but I also love last bit on this. I love the idea of picking forcing functions. Uh, a forcing function that will force you to become the kind of person that you want to be. Let me give you an example. I've got a friend at uh, age 49, sold a tech company, did decent for himself, but he realized his intention was totally fragmented and he didn't like that. And so he said I want to be the kind of person who can think deeply about a single problem for a long period of time. That was his goal, that was a sense of purpose, if you will. And he said what would a, uh, kind what, where do those kind of People hang out. What do they do? He's like, well, you know what? One thing they do is the type of person who can think deeply about a single problem for a long time often gets a PhD. So he got a PhD. He doesn't care about the PhD. He cares about what it did to the old version of him had to die and a new version had to be born to become that thing. So I love with clients like, man, I'd love to spend more time with my f. My kids. Ah, uh, what would be something we could enroll ourselves in? Like, I love that word, enroll yourself in to become that kind of person. Well, my kids love soccer. Gol what if you signed up to be the soccer coach or the assistant coach? You don't have any skills, so you just be the assistant coach. Then you have to drive them to the thing. You have to be at the thing at practice. You have to go to all the games. It's a forcing function to become. Do you care about being the assistant coach? No. You cared about time with your kids. So I love designing those sorts of things with clients and ourselves to become the kind of people we want.

Speaker B: Talk about.

Speaker A: Sorry about this rant. Bain. Bain on their pyramid of value. This is crazy. Bain is like, this is. I thought this was just patchouli oil and drum circle stuff. Bain is buttoned down as they get. The top of their pyramid of value for our profession is self actualization. You can find this. Just search Bain's period pyramid of value. You'll see self actualization. That's the job of an advisor. Now at the base of the pyramids, all the stuff we all think we have to do. And we do have to do it. But the whole reason we're doing it is to get to the point where we can help people become the type of person that they have, the identity that they want. And that that's going to change. We're going to keep doing it. We're going to keep doing it. And a new version, a new version, a new version and they're going to wake up and just be like, are you kidding me? You know, are you kidding me? That's what my advisor does. Good luck. Cold calling against that. Right? Plug that into your little algorithm and see how that works.

Speaker C: But you know, I think a lot of, uh, a lot of clients, people, humans in general, they really live their life, you know, kind of programmed. So what you're asking essentially is to like flip the program. Uh, that's what you're asking though. Like you're asking them to say to sit down and really get to know who they are so that they can help others. Like, that's a, that's a whole different ball game.

Speaker A: Um, I think. Look again, let's back up for everybody listening. Like, be gentle with yourself. Be patient. Like, you don't have to. Like, you may. Maybe this isn't what you want to do and it's not the job you signed up for. And I think you're going to be fine. Right? Like, just help people have goals, build great portfolios, have plans. You can get your kicks elsewhere. Like, go, go do something after work. It's all totally fine. Totally fine. But for the people who this resonates with and you feel sort of this like, weird little. I. Sometimes I call it Dancing with Dragons. This weird little feeling inside where you're like, that's what I've always wanted to do. Just, just start practicing. Because you're right. It's, it's, it's not. Nobody signs up for this. Nobody. Uh, is. What's so fascinating to me is I've done this, I don't know, hundreds of times now when you talk to clients, because I do a lot of speaking engagements for like, kind of client appreciation events or gatherings of small family offices or, you know, small family meetings or whatever. I've talked to lots of your clients and then I've gotten thousands of emails because of the weekly column. What they will. What they tell me. The clients who've been with you for, uh, some period of time. The clients who've been around a while. When I asked them what I like, why do you like, why do you like Julie as your advisor? They never tell me the things we all. They never tell me what they came for. Right when they showed up at your door. They, they, they don't tell me those words. Oh, man, she picked the best investments. Oh my gosh, her performance is so great. Oh my gosh, this financial plan. I mean, this 30 year line is incredible. And they never tell me that. They never tell me that. They tell me things like, they tell me things like, I don't worry about this anymore. They tell me like, I used to be worried that I was gonna end up like my dad. And Julie's helped me realize, like, I don't have to think about that anymore. They tell me things like, I spend quality time with my kids every summer because we've set aside the time and they made that. They tell me things like this, uh, we bought the ranch. My family's always wanted to move to a ranch and get back because that was what my grandpa did. And we did it this year because Julie helped us. That's what they tell me. So you've got this really weird flipping of switch thing that happens. And I think, to me, my approach has been show up as what they're expecting,

Speaker D: right?

Speaker A: Because I, I understand you can do this differently. You can be like, I am, um, this person who's going to change your life and give you meaning, and I'm going to use money. And I'm. People do that successfully and I applaud them. I'm a huge fan of those people. I know a bunch of them. But I think it works better for more of us to show up as they're expecting you, and then slowly pull a series of righteous tricks. I call them righteous tricks, not bait and switch. They're in service of the client. Slowly pull a series of righteous tricks in front of them to help them realize they're gonna wake up 18 months later and go, oh, my gosh. Like, they wouldn't even be able to tell their. This is why referrals are sometimes a problem. Like, they don't even know how to tell their friends what you did. Right? They don't even know. They don't even know how to talk about it. That, to me, is the approach. Like, yes, you're flipping the switch for me. I, like, often show up the way they want, and five minutes later I'm pulling the huge racist trick. It's a giant punch in the nose and a big, deep, empathetic hug and everything's gonna change. Probably not a good idea. Like, probably the better idea is slowly pull a series of righteous tricks to help them wake up one day and go, oh, my gosh, I don't even worry about that anymore. Hey, can you believe that? Like, we, we have a financial planner. I'm sorry to get emotional about this, but we have a financial planner who we dared last week tell a dream that we haven't dared tell anybody. And she stopped the zoom meeting, looked my wife in the eyes and said, so are we messing around or are we going to do this? And I, the feeling was sort of like, are you kidding? She's like, because if you're going to do this, I know how to help you do it and to even open that possibility for us. I mean, how do I tell? Like, I get like, what are you talking about? When you send me a text message saying that you've got a great portfolio. Like, I don't even know what the. What to do with that. Sorry. So anyway, Is that, hopefully that's helpful.

Speaker C: I love your vulnerability and I really appreciate it.

Speaker D: So, yeah, it is, it's endearing. The, the transparency and the, the openness. I, it brings me to, uh, another question, which I, I think we've talked about quite a bit. But the real financial advisors, I think are often not just the, the mathematician or, you know, the, the spreadsheet guy, but they're part planner, they're part coach. Sometime. How do you see all of those different roles kind of complement each other? And you know, what mindsets do advisors need to continue to move towards, to continue, uh, to thrive, learn, evolve in order to help their clients to, to get to that level?

Speaker A: Yeah, yeah, it's a great question. I, I, um, I think there's room for all of us. Do you know what I mean? Like, I, I, I, and again, I'm trying to emphasize that I get so fired up about one aspect and, and I don't want that to come across as it's the only way. I don't, I, I don't. Who am I? I don't know. I think there's room for all of us. And so I think what you should just think about as a, as a, this audience, you know, a real financial planner, real financial advisors, is if you're feeling pulled in one direction or the other, because it, it very well could be, hey, I'm really good at the, getting people to cry in my office side of this business. I kind of need to shore up my tactical, my tactical acumen, right? Like, I'm not like, somebody asked me how to calculate a mortgage payment or build an Ambit or how, how, what would, what would the balance of my mortgage be in 17 and a half years? I don't know how to do that. Right. Like, I, I do know how to do that, but if you're feeling, you don't know how to do that and it's important to you, well, then learn. You could say, I don't know how to do that and I don't really want to. Awesome. Find somebody who does. Right? Like there's, so there's all sorts of room, like, become the thing. Uh, my personal thought is go all the way with the thing you're really good at and find people to compliment around you the things that you're not. That's my personal belief, but I'm not saying it's the right choice. So, like, what that could look like is, let's say you're the opposite. You are you, man. Give me a calculator. I'll run circles around anybody. I can explain the investment process, but I have to leave. I don't know what to do when somebody shares a vulnerable story with me. You know, somebody will tell me about their spouse passing away and I'll be like, well, so is the will in the right place? You know, like, like, you know what I mean? Like, and, and that, that's a real example and I have deep empathy for that. Uh, it's not my problem, but I can understand. I've talked with so many people so that, that's their problem. So you have a choice. Intentionally practice what you're bad at. Get better at eq. Practice it. You can do it with your spouse, your kids, your friends. Look for opportunities when there's a chance to go, hey, can, can I ask you about that? How did that feel? Or hey, you know, uh, that must have been hard. Like look for chances to practice and, or find somebody who's really good at that to compliment what you're, what you're not good at. And I think any of those options, there's like, that's the whole range of options. And I just want to repeat, I'm a big fan. If I was a hardcore analytical guy and didn't have an emotional bone in my body, I would probably go all the way with that. Right? And if I was who, uh, what I've been trying to get clear about is who am I? Who, who. Be who you really are and go the whole way is my preference. So that's how I'd answer that question.

Speaker D: As a current learner of this society, can you just explain to our audience a little bit about the Society of Advice? I do think that that's a huge opportunity for folks to continue to expand their horizons and gets some, uh, some breadth and depth of new topic areas.

Speaker A: Sorry, I can't talk about it. I'm just kidding. I, that's actually, here's what's funny about this Society of advice is I don't really know how to talk about it. So this like, I've been accused of being sort of like secret or maybe even like exclusive. And it's not that at all. I literally don't know how to explain it. So let me try though, because we've been working on this. Um, I think there's, there's a lot of really good people in our industry teaching tactical stuff. You know, tactical workshops, tactical courses, programs.

Speaker D: Right.

Speaker A: Year long programs, month long programs. I like, I have a bunch of names popping into my head right now. We all, it's not hard to find them. Marketing, how to have a good first meeting, you know, email, uh, marketing, like really good people. And I don't, uh, they're doing a great job. And I don't feel like that's my unique contribution. And so what I feel like my unique contribution is, is how many places do you know where you can go and be in a space where you can be quiet and hear a thoughtful conversation that will spark insight. And here, here's the problem I was trying to solve. We built some of those tactical workshops and everybody bought them. Like we built online courses back when it was before it was cool and everybody bought them. We had a great business around it. But I noticed after 6 to 12 months of doing it that no one did anything with it. So I wondered again, sort of like the behavior gap problem, Is it just a problem for kids in the hills of Utah? Like, I must be doing something wrong. And then I looked like. The completion rate is in the single digits of online courses generally. In fact, most people, more than 50% don't even open them right, don't even start them, let alone completion rates. I was a bit frustrated with that. We had a great business, though. So I was like, oh, no, what do you do? And I didn't care. We blew the whole thing up. And we said, I want to talk. So if you are listening to this and you recognize this feeling of like, you bought a thing, you didn't do it, you bought a thing, you didn't do it, you bought a, like, welcome, like, deep empathy to you. I'm the same way. I wanted to create a place where we were more interested in the part of all of us that already has the tactics or knows where to find them and is still not doing them. Uh, what's that about a place where you get more in, in connection with who you really are. Uh, align what you want to do next with that because you're more likely to do it. Because I want a group of people who are going to change the world. Well, the only way we're going to change the world is if we stop hiding. You know, like, uh, and these places to hide. We're also good at it. We call it research. That's what we all call it, research. It's just a, like, if I could just look, if I could just watch one more video about how to deadlift, I don't have to go to the gym and deadlift. If I can just watch one more video about how to 10x my business, I don't actually have to do anything. To 1x my business, you know, So I. We've created a place where you. We're not worried about any of that stuff. What we're worried about is like, so here's how it shows up once a month. We have. We create a space. There's no chat, there's no forum, there's no email newsletter. This is all on. These are not flaws. These are features. There's no. There's no archive. There's no homework. You show up once a month for 90 minutes, get quiet, and listen to a conversation between me and somebody amazing. There are always people amazing. Some of them you've all heard of, and some of them none of you have heard of. And then you pay attention because this is my last bit about this. You pay attention because what will occur to you will be different. You two could be sitting next to each other on the zoom meeting with 200 other people, and what occurs to Connor will be completely different than what occurs to Sasha.

Speaker D: Right.

Speaker A: And all I want to do is create the space where those insights will occur. That's what the Society. So we do that every month. Thanks for asking.

Speaker C: I have this question, and it really goes back to kind of where you started being the sketch guy. And I heard a little earlier when you said, you know, like, it gave you, like, almost like a dopamine hit is what it sounded like to me, is saying, like, hey, I got them to understand this concept because I drew it out. So when you sit down with the cardstock and a Sharpie, how do you take this really complex idea and distill it down into, like, this one simple, powerful drawing? And as you think about describing the process, what can advisors take from it to bring that same clarity and connection to their clients?

Speaker A: Yeah. Yeah. Well. Well, having just, um, sort of talked about my deep allergy to tactics, let me give you some specific tactics about this, because this is one area that I do like to talk a bit about. Um, so, uh, the process of taking something that seems relatively complex and making it simpler. That's probably the. The. The most common email I got from Times readers was, will you please tell the advisors to speak in a language I can understand? Some version of that. Please make it simpler. Please make it simpler. So here's a couple things you can do. Um, if. If you have a piece, let's just say you have like an educational brochure or a marketing piece or even the about page on your. Oh, your entire website. Like, take your entire website and just for a minute. Largely, we've given these things these Marketing, brochures, educational brochures, websites, email, um, news, anything we produce. We've given them too many jobs. Like, like, I feel bad for these poor websites. They're like beasts of burden and they are always disappointing us because they can't do that many jobs. So what is the one job you want this thing to do? You can do this in speaking or visuals. Let's just stick with visuals. You've got a visual in one of your, uh, educational pieces that you hand out to clients. Look at the visual and think, and you can do this with anything. But we're gonna stick with visuals. What's the one thing you want people to remember from it? One. You only you. This, uh, is a pretty hard, fast rule. You only get one. Like, I know you want two or three, but you only get one. These are single idea. That's all they can do to, to move out of visuals from. Imagine you're gonna give a, give a, a talk to. You got invited to speak to. You know, you work with dentists. You got invited to speak to a dentist conference. Like, they, you only. They. You only get one thing they're gonna remember. And so the way I visualize that is if you hand that graphic or that marketing piece or that educational piece to a hundred people, they all read it. And as they're. You have them all in a room, they're quietly reading it, and they one by one, start filing out the door. And if you were standing at the door and said, what's the one thing you remember? What's the one thing you hope? They would all say, okay, so if you can get that in your head, then you go back to the piece and say, okay, let's remove everything that doesn't reinforce that one thing. Now, uh, this editing and distillation process is really hard. It often it is opinionated, right? It's like you're. You have an opinion that you're going to say, I think I can remove that sometimes. I get this wrong all the time. Sometimes I remove the wrong thing and then I get feedback real quickly. Like if you were standing at the door and 50 people told you the not, you were like, what? That's not even. I had no idea you'd take that. Okay, you got it wrong. Great. Now, you know, go back to the thing and say, wait, how do I fix that? I've had single words like for instance, uh, anything that distracts from the one point, remove it. I find this is a pretty general rule. I find that any number on the page will distract you'll look at my sketches, there's no numbers on any of them. I don't think, um, any number will distract. People want to debate the number and they'll miss the point. So remove numbers. Generally speaking, um, remove any reference in a marketing piece to gender. Unless gender's the point. I have no problem writing something where gender is the point. But if it's not the point, remove it. If politics is not the point, remove it. If religion's not the point, remove it. Anything that would distract people, you remove it. And then just think, perfection's not. This is a, um, the Little Prince, I think, um, profession is not achieved. Perfection is not achieved when there's nothing left to add, but when there's nothing left to take away. So take stuff out and see, like, on a written piece, I literally copy, um, a sentence and I'll remove it and see if I lost anything. Like, what happens if I pull that out, what happens? So that's the process that I go through sometimes. That's literally like, 50. Back when it was card stock and Sharpie, it was just, like, over my shoulder, you know, like fifty to a hundred pieces of it. Um, it's a lot of work. I have things I've recently removed. There are words in some of the sketches. There's one word I can think of, one specific example that I was thinking about for 10 years. It wasn't quite right. Just wasn't quite right. I removed it and it was like, oh, uh, that's right. That's right. So between 10 minutes and 10 years, just whatever you want to spend to, like, work on. What's the point? What are you trying to get across? I know you want to cram everything into that graph. It's not going to work. Have multiple graphs if you need to, but it will not work. Your clients will just go, I don't know what's on here. I don't know.

Speaker C: That kind of leads me into my next question, because I know your new book is coming out. Your Money Reimagining wealth in Simple Sketches. Um, I would love for our audience to hear just a little bit about it and how the advisors can use it to work with their clients.

Speaker A: Yeah, I've been kind of resisting writing a new book for. I think it's 11, 10 or 11 years since the last book came out. And mainly because I was like, I want to make sure it has a real purpose. And I got really focused on conversations. My work has really become largely about conversations. And, um, then I noticed something that over the years, people were using and you mentioned it in the intro. Like, these sketches are taped up on refrigerators and conference room walls all over the world. I never get emails saying it's visually so impactful. Or what I get is, I had this on the wall and my client saw it and they asked about it. Or I get hundreds of those emails, like, describing the conversations that got started. So I started thinking of them using my friend Hugh McLeod, his term conversation grenades. It's like you kind of toss them in a room and conversations break out. So then I was like, well, gosh, how do we. I don't really care about a book. I care about conversations. But I got convinced over the years that, like, if we could design it right, and this is really important to me, if we could design it right, this could be an artifact. The book could be a thing that got passed around that generated conversations. I had this weird, humble little goal of starting a million conversations, like a million meaningful conversations about money. So that's what the book is. It's 101 Conversation Grenades. 101 Sketches, 101 Short Essays. Some of them are two sentences, but none of them take more than three minutes to read. Um, the design of it. And I wouldn't do it unless I could find a publisher that would have allowed me to do this. Lots of white space. The physical piece, I think the digital version is going to be cool. The audio I'm working on right now, and I actually describe all the sketches, which is really fun. Audio will be great. But I think the physical book for advisors is going to be the most valuable version of it. It's seven by seven, so it feels like a approachable coffee table book. It's seven soft, soft cover. Not paperback, but soft cover. So it feels approachable. It feels like something you'd use. And it's much closer. It's. I'm not saying it's poetry, but I'm saying it's much closer to a book of poetry than it is to personal finance. Lots of white space, lots of questions, and very little, very few answers. So I think it's exactly what advisors. So we've been overwhelmed by the number of, like, bulk order sort of happening because people just want to use it as a. As a. As a client tool. So that's what I wrote it for, is to just compound conversations. It's called your money reimagining, uh, wealth through 101 simple sketches. And you can get it now. My favorite suggestion is buy a copy at Amazon and a copy at your local bookstore.

Speaker D: How much? You put thought you put into even just like, the covering of the book.

Speaker A: But can I tell you one more thing?

Speaker C: Of course.

Speaker A: Here's the level of thought. You know, all that front matter in a book. It's like the copyright stuff and the legal stuff and this, Uh, I was like, man, does that serve the reader? Does any reader want that? Like, no reader wants that. And I did not. I was like, there's no way that my publisher will let me do this. But I'm like, hey, could we. Could we. In service of the reader, could we move this to the back? And they were like, we've never been asked that. We've never considered it. And yes. So, like, that's the level, like the. Every single piece of this book I've thought through to be in service of the conversation that I'm hoping will happen around dinner tables, on road trips, in coffee shops around the country.

Speaker D: I guess just to wrap us up, our final question, which we ask all of our guests, is how would you define the heart of advice when it comes to financial planning?

Speaker A: To the degree that each of us is comfortable doing it. Helping people align, uh, their use of capital with what's important to them.

Speaker D: Nice and succinct.

Speaker A: Yeah, I worked on that for a long time. Yeah. So fun. Thanks for this conversation.

Speaker D: Yeah, it's been amazing. Thank you again for joining us. Well, number one, I'm glad that you didn't end up becoming a security guard. I'll just. We'll start with that.

Speaker A: I would be really good at it. Like, really, I mean, uniquely qualify for that.

Speaker D: Yeah. But thank you. Thank you for sharing so much about your adventure journal, your perspective on the head, and the heart of advice and financial planning. I think your. Your work continues to remind us that being a real financial advisor is both about the numbers and mostly about guiding people through their most important decisions and finding some of those force factors towards their, uh, their true purpose. Again, I appreciate your time and your perspective.

Speaker B: The Heart of Advice podcast is produced by Emoney Advisor, a leading provider of technology solutions and services that help people talk about money. Learn more@emoneyadvisor.com where you can find additional resources for Advisor success, including the Heart of Advice blog, as well as eBooks, CE webinars and events.