The Wiser Financial Advisor Podcast

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Conversations With Money – Guest: Richard Friesen

Richard Friesen quote: “We have disassociated and made wealth evil and bad and oppressive and made it racial even. I mean, people who come to me have really good hearts. They want the best for the world and they get all these messages and they don’t know how to do it. So my contribution and what makes a difference to me and why I am still working, (which doesn’t feel like work) is to help people be in rapport with success, with wealth, with themselves and their relationships.”

In this episode, Josh Nelson and Richard Friesen share stories and tips that present new ways to value your contributions as a trader and to free up all the subconscious voices that limit your upside potential.

We hope you will take a bit of time to rate, review and leave comments about this episode. We love feedback and topic suggestions.  Thanks so much! 


Hi, Everyone. Welcome to the Wiser Financial Advisor with Josh Nelson, where we get real, we get honest, and we get clear about the financial world and your money.

This is Josh Nelson, Certified Financial Planner and founder and CEO of Keystone Financial Services. We love feedback and we’d love it if you would pass it on to me directly at . Also, please stay plugged in with us and get updates on episodes and help us promote the podcast. You can subscribe to us at Apple podcasts, Google, Spotify, or your favorite podcast service. Let the financial fun begin!

Glad you joined us today. Recently I had the opportunity to sit down with Richard Friesen, the author of the book, Conversations with Money. Richard has a huge background in the financial industry going back to being a floor trader on the Pacific Exchange and with Merrill Lynch. Since then, he’s been a serial entrepreneur, building and selling tech companies, and more recently he is an author, a frequent guest on podcasts, and the creator of Mind Muscles, which is a psychology that trains traders on how to trade—in other words, he works with the emotions around trading.

During our conversation we talked about a couple main areas. One of those was the psychology of trading and money and how to keep from getting emotionally involved in manias and panics that would lead us to do something that we probably shouldn’t do during those types of markets. Then we moved on to talking about what happens after somebody creates wealth. After they’ve got the income, they’ve got the wealth, what happens then is where true fulfillment comes from, which is contribution and lifetime learning, adding value and continuing to add value regardless of what your stage in life is. I think you’ll find this is a really interesting conversation, one that’s not only helpful for people that are just starting out, but also for people who have maybe moved closer to retirement or financial independence and are thinking about what’s next. Enjoy.

Josh: Welcome, Richard.

Richard: Well, it’s great to be here and it’s always fun to talk to somebody who is dealing with peak money and other people’s money. As you know, that hits a lot of emotional triggers for a lot of people and I’m looking forward to a conversation where we start to sort some of this out.

Josh: Yeah, absolutely, glad you could join us. So much of what we talk about here on the Wiser Financial Advisor is about emotions and the psychology around money. Personally, I think for most people financial success comes down to the psychology they have around money, and so that’s why we go in that direction with this show. But a couple of different things I wanted to start off with. One of them is that you have experience as a trader. You’ve worked with a number of different companies and I’m sure you saw a lot of manias and panics. What’s the psychology? And how does the average person defend against getting caught up in one of those big manias or panics?

Richard: If you could just imagine the boom for example. Some of your audience may be a bit young for that, but what happened was that the technologies went up and up and if you missed out, there’s the thought of, “Oh my God, I missed out, I gotta get in. Oh my God, it’s going up higher.” And we’re rewarded emotionally with every uptick, but it’s not just the dollars. Sometimes it’s the dream. And the dream can be: “I’m worthwhile, I make good decisions. I’m a great investor or a great trader. This is going to get me my house, my Lamborghini. My parents are going to respect me. I’m going to get laid more often.” We have all these dreams and they get connected to every tick of the market. It goes up and we say, “Oh wow, I’m going to get my dream.”

We have this emptiness, this hole in our hearts, something that needs to be filled. And we ask the market and our portfolio and our trading and our investments to fill that empty hole. Now it goes up, and now it ticks down. It ticks down and we say, “Oh my God, it’s going lower. What am I going to do? My dreams are falling apart; I can’t lose my money. And I listened to the news and experts say it’s going to go lower but this isn’t the end. Oh no, I gotta get out.” And then there are 100,000 people who’ve had that same emotional reaction with the pain of every tick lower.

Josh: Yeah, they’re all going at the same time, going through it.

Richard: Yes, so there are no more sellers. I’ll give you a story. In 1980 to 1982, I worked for Merrill Lynch. I was a futures salesman. But next door was the bond department in San Francisco. So this was the time when their interest rates were going up to 20%. And long-term bonds were trading at 50 or something like that, to compensate for the higher interest rates. So, I went next door to the bond department and asked, “How are your clients doing? What’s up?” They said, “Well today is the day we finally got all of our clients out of bonds. We’re safe. It’s going to continue to collapse. We’ve sold everything.”

So I went back and I bought futures for my own account. Why? Because if Merrill Lynch doesn’t have any more to sell, who does? And that was the exact bottom of the bonds.

Josh: Yeah, the period of maximum pessimism, right?

Richard: Yeah, and unfortunately, I didn’t have the experience as a trader back then to realize that this was not just a temporary bottom, so I took a tiny profit.

Josh: And you know that people at those extremes cash out when they say, “I can’t take it anymore.” I’ve heard that from clients before when we get into those extremes—like the financial crisis in October of 2008 when financial institutions left and right were going broke. People were worried about the entire financial system collapsing, and a lot of people were at least contemplating that they were out on the ledge getting ready to jump. And of course, we know now, that would have been a very bad decision.

Richard: I gotta raise my hand here. I watched my retirement go down, down, down, and I got caught up emotionally. I told my financial advisor, “Let’s get out.” He argued against it and then got out. And it occurred to me that my own emotional pain was the best indicator that “this is it,” –so I went and bought a bunch of futures to get back in. Not enough unfortunately, but it was interesting that my own emotional state was one of the best indicators that we were in a serious market transition and things were going to change.

Josh: Yeah, we can be our own worst enemy—and on the upside too, when there’s a mania. A lot of people are saying that’s happening now. And who knows, this isn’t investment advice because we don’t know exactly when the top will be, but the stock market’s been running for a while. For example, cryptocurrency—and there are all kinds of areas where we could at least suspect there might be a bubble, and it it seems like people are continuing to pile into those investments. So that psychology kind of works on the high side too, right, where we can make some big emotional mistakes.

Richard: Oh sure. During the dot com boom, a whole bunch of people went into trading rooms. They started trading and making money and making more money. People turned $10,000 into a million and even several million. And I’ve asked all the traders and thousands of students: “Do you know anybody who went to a trading room and didn’t have any experience and kept that money?” And I haven’t got one report back saying yes. Because emotionally, it’s attached to a hole in our heart. “This means something. I’m going to be a worthwhile individual. I’m going to have my dreams come true.” Then when the market goes down, we’ve been so rewarded that we just get stuck in it and we ride it all the way down.

So I think the lesson there is that the market has different conditions, different moods, and if we get stuck in one of them, then when that market shifts, we’re in deep trouble. Now, I’m sure as you advise your clients, don’t get stuck in any particular emotion or any particular market condition or mood. Instead, look at the long term and be able to have a portfolio with risk management, diversity, and everything that removes that kind of emotional sting.

Josh: Yeah, I think there’s a natural tendency that when something is going in a certain direction, we tend to get into the illusion that it’s going to keep going in that direction forever. At least in my observation, that’s why some of these things happen—people get caught in manias and panics and think, “Well, this time it’s different.” I think either Warren Buffet or Sir John Templeton said that when you hear “This time it’s different,” those are some dangerous words. Because that could actually lead you to not question and get caught up.

Richard: Yeah, if you just look at the language, they’ll say, “It’s going up.” And when I hear one of my clients say, “It’s going up,” or “It’s going down,” red flags pop up and sirens go off—because the word “going” is an ongoing prediction. If you say, “It has gone up, it went up sharply in the past,” that’s one thing, but when we say “going,” we are making a subconscious prediction. So, when one of my clients uses the word “going,” I know right away that we have an issue to deal with.

Josh: Yeah, and of course in our business, we’re Financial Planners by trade, and so we believe in asset allocation. We believe in diversification. We don’t consider ourselves traders necessarily and we don’t want our clients to be necessarily either. But in a lot of cases, people kind of get put into that position. Some of our clients work for big high-tech companies and they receive a lot of equity awards. And if their company goes well, which many of them are right now, they could end up with a lot of wealth and a lot of concentration in that one stock. So they kind of find themselves in the position whether they want to be a trader or not, they kind of are. They’ve got to make some decisions. What would you say if you were talking to somebody who has a big, concentrated stock position? Sometimes they’re second guessing themselves and wonder, “Well, when should I sell? What prices should I sell at? Maybe I need to get to a round number.” You’re actually a trainer of traders, so what kind of advice would you have for lay people that find themselves in a position where they have to trade?

Richard: Well, that’s an excellent question. I had a friend whose husband passed away and she had inherited around $4 million worth of IBM stock. She asked me, ”What should I do?” And I said, “Well, I have a question. What if the brokerage firm called you up and said, ‘oops, we accidentally sold you out of all your IBM stock. Some guy made an account error. Don’t worry about it; we’ll buy it back and if there’s any adjustments in price, we’ll take care of it—and my apologies if there are tax issues; we’ll manage all of that for you.’” And then I said, “OK, now you have four million dollars sitting in the bank. How much of that do you want to invest in a single stock of IBM?”

She said, “Oh, maybe twenty percent.” So our minds have an ownership bias. There have been tests with all sorts of silly things showing that if we own something, we value it more, especially if it was attached to someone and has a lot of emotion in it. We don’t make rational decisions about that. You know, I have two sons who are both in this category. They’ve made a tremendous amount of money and it’s just rewarded, rewarded, rewarded—and our minds keep thinking that it’s going to continue. But of course, you know, we’re always at risk. Things always shift. Markets revolve and cycles change, with everything from technologies to value, from foreign to domestic. There are all sorts of shifts in market patterns. There are some exceptions, of course, but they do tend to revolve. So the question then becomes, what do we do? And I think this is a really important question because it’s not just about risk and diversification. It goes deeper. Where is our heart? What really is meaningful for us? What do we want from ourselves for the future? And this kind of money gives us the ability to not only ask that question, but the resources to be able to amplify what’s really important and what’s meaningful.

Josh: I like how you framed that, asking the question as if you were sold out of the position, how much would you buy back? It makes people think a little differently as opposed to getting so emotionally attached. And before the show, we were visiting, so I know that two of your sons actually were in that exact position where they worked for tech companies and had a concentrated position, so you got the intimate knowledge of how that works.

Richard: Certainly, so with the deeper issue, when we say, “What is meaningful to you?” a lot of people, especially engineers, go “Huh?” My job is then to open some doors and invite them to look at what is their larger meaning and purpose. What are their goals downstream? Let’s say they have a net worth of 10 million, and almost all of it is in their technology stock. Then we can say, “So what would you like?” And if in fact the deepest meaning does not require a lot of resources, just free time, then you have it, you’re there. Then the question would be, “Do you want to risk that longer term?” If, on the other hand, you are an Elon Musk type person and you are shooting for Mars and boring tunnels and creating a whole new set of electric vehicles, what you may need for your mission in life may be a lot bigger. So, the question is really about where their heart is, where’s meaning and what’s really bigger for them. Then you can start to look at, “OK, at what point do we reduce the risk to your dream and to what you want? And at what point do we still leverage it?” And how do we keep ourselves safe so that we are not risking everything in our lives. We want to still have the resources to live out the rest of our life comfortably.

Josh: Yeah, and I think what it comes down to for most people with investments if you really drill it down is that people want income. They want income for the rest of their life, and that’s what we’re trying to solve for as Financial Planners—figuring out how to convert somebody’s wealth into an income stream. Whether that wealth was accumulated by starting a business and selling it, or in a lot of cases our clients do have those concentrated equity positions that they’ve accumulated. And hats off to them, they also do a really good job of saving and so forth. But it’s a big shift when people move to retirement or financial independence, whatever they want to call it. And you’re not retired either, you’re still going.

Richard: Oh, man, I can’t imagine being retired. I mean, I could quit. I have financial security. But again, we come back to, where’s my heart? And I feel an emotional rush as I say this: I want the world to be a better place for everyone. And how can I contribute? I have limited skills, very limited time. I have limited resources. So what can I do to make the world a better place? I can’t obviously solve the Middle East crisis or covid, but what I can do is invite people to a healthier, higher level of operating. And I do that with my clients and with my students. And now what I notice is that culturally there’s a lot of internal conflicts around money, wealth and success. So, one of my contributions now is my book. It’s currently titled Conversations with Money but my publicist is going to change that probably to something sexier. But I’m asking, “How can we reframe and define wealth and success in a way that matches our deepest values?”

We have disassociated and made wealth evil and bad and oppressive and made it racial even. I mean, people who come to me have really good hearts. They want the best for the world and they get all these messages and they don’t know how to do it. So my contribution and what makes a difference to me and why I am still working, (which doesn’t feel like work) is to help people be in rapport with success, with wealth, with themselves and their relationships.

Josh: I think that’s the reason why a lot of people don’t like the word retirement. Because for many of them, it’s just, “What’s next?” You know, “What’s my next mission? I might be done at Google or Hewlett-Packard or whatever company I worked for before, but now there’s a “What’s next?” I think we’re all wired that way: we need a reason to get up in the morning. A lot of it is contribution. People need to feel like they’re still contributing—regardless of whether they’re financially independent or not. I’ve worked with a number of people over the years that have sold a business or have accumulated millions, plenty enough to be financially secure. And there’s kind of an emotional high that ends up happening, especially when selling a business, when there’s a big chunk of money that comes in at one time.

That emotional high hits and it lasts maybe for two or three weeks, maybe even two to three months. But then, you know, there’s something that’s missing. And in a lot of cases those people end up back at work or back starting another business, simply because that was where they were getting a lot of their emotional charge and energy. And certainly, you have found lots of ways to do that over the years through a multitude of careers. Now, you’re writing and doing a lot of training and mentoring for traders. And that’s really neat, you’ve been able to do that in your own family, right? You’ve got some very accomplished kids.

Richard: Yeah, you know you look back and you look at what’s worthwhile. And that shifts with time. I look back and I’m just so grateful for my family and friends and developing people with a value system that I feel is ethically and morally on the high road looking for solutions to bring a better life to others. That’s valuable to me. And I think that what you said was really important, that after you retire, and especially if you have a lot of money, there’s this emptiness all of a sudden. I’ll be a little sexist here, but you know, in the past it’s been mostly men who have driven hard. They’ve been really hard driven, and all of a sudden—kaboom!—and what are they faced with?

Josh: My observation would be that that’s true. Not always, but I think a lot of us guys do attach a lot of our identity to our careers, to our business—probably more than is healthy.

Richard: I certainly do. When I had my dot com business and the dot com market started to collapse, two weeks later, we needed like another ten million to bring us to positive cash flow. But during the dot com crash, there was nothing available. For two weeks I said, “Oh, no problem. I’m OK. I’m going to go out and I’ll be a consultant. I’ll do this, I’ll do that.” I was covering up. I was pretending everything was OK, but at my deepest levels it wasn’t—because I had emotionally attached so much of my well-being to this company. When it didn’t make it to IPO, it was so devastating to me that I kind of just quarantined that horrible emptiness so I wouldn’t feel it. As a result, it dragged on for about a year, rather than dealing with it. So, I really appreciate what you’re saying, and I think that your contribution and your awareness of this can really help clients that you’re working with.

Josh: I’m lucky, and I know not everybody can say this–I’m lucky in that I I feel like I get a huge amount of growth and contribution out of my business and out of working with clients. I think we make a huge difference in people’s lives. But many people can’t say that; many are stuck in careers they’re not fulfilled in. They’re there for the golden handcuffs. And with these big high-tech companies where they have a huge amount of wealth, much of it is contingent upon staying. Oftentimes, working a few more months can mean hundreds of thousands of dollars that would be left on the table if somebody left and pivoted to do something different.

Now if we look at the other end of the spectrum: we’ve talked a lot about people who have already accumulated wealth and maybe are further along in their careers or their businesses, or maybe they’re retired or financially independent. What about the opposite end of the spectrum? What advice would you give to a 20-something person that’s maybe at the beginning of their career? They’re hungry. They’re driven. What advice would you give them as their game started?

Richard: What I emphasize both in my book and with my clients is how can you deliver value. You know, you have the traditional vision board. People put on mountain homes and Lamborghinis and beautiful women or men. But on my vision board, it’s “How can I deliver value to others?” I have this concept in the book and it’s called certificates of appreciation. When I deliver value to you, Josh, and you give me some money, I look at it and I say, “This is a certificate of appreciation from Josh. I have delivered value to him.” The more value I deliver to the world, the more certificates of appreciation. And I have this radical notion, and this may give you a lot of blowback: the more certificates of appreciation you collect without fraud or dishonesty, the more value you have delivered to the world.

Josh: I think we’re all equal as people, as souls and everything, but in the marketplace, things are not equal. And not all occupations are equal. If you think about a teacher, for example; they may deliver enormous amount of value but may not get the financial rewards that somebody who works for Apple or Amazon or who started their own business might get. So, there’s no question that things are not equal in the marketplace.

Richard: Yes, if you look at Martin Luther King, Mahatma Gandhi, Mother Teresa, or as you say, you look at teachers—a teacher made a difference in my life and they don’t even know it. The value they have delivered has nothing to do with money. So, depending on where you want to go with your life, you can deliver a tremendous value that doesn’t have to do with money. And the world really needs a complement of all sorts of different things. It needs engineers; it needs lovers; it needs artists; it needs people with big visions like Elon Musk. It needs a whole group of people that are very diverse and come from different backgrounds and races and genders, because that mix is what creates real power. One of those parts is people who produce a lot of value and get a lot of money. There’s no need to apologize for that because you are delivering value with your particular skill set.

If you have a vision board of delivering value, then you work backwards and you say, “What knowledge do I need? What skills do I need, what behaviors? What do I need to believe about myself and the world to be able to deliver this particular value now?” And all of a sudden, the vision board isn’t about Lamborghinis. The vision board is about how I can contribute and make the world a better place. Now for some people that is going to mean being a teacher or working in the inner city or working in the Peace Corps, and they’re using their skill set to deliver great value. For others, it’s going to be more of a commercial venture, but still deliver value.

Josh: Financially, we’ve seen study after study say that after about $75,000 of household income per year, the happiness level doesn’t go up a whole heck of a lot, because our basic needs are covered. At $75,000, we’re able to pay our basic bills and have some health coverage, things like that. But after that level of income, it does turn into Lamborghinis and stuff like that. It depends on how high the dollar amounts go, but when you get into the millions and billions, the studies show that people’s happiness level doesn’t go up just because of money. It does have to be other stuff; it does have to be us delivering value and contributing the other things that are part of our life besides building wealth.

Richard: Yeah, indeed. People say, “Wow if I can buy that mansion or if I can get that house in the hills or that sports car or whatever it is, then I’m going to be happy.” But if you look at the actual process, the process says, “Yes, I am going to be happy,” So they get that thing they wanted and there’s a thrill, as you pointed out after they sell a business, there’s that thrill—and now what? OK, now they have established a process of “going to be happy.” So then they repeat that over and over and over again.

My job with my clients is to work with what I call the Golden Keys. That is, first get awareness of your current situation and acceptance of it. Then ask, “Now what do I want?” We start with where we are. I include physiology as a big part of my coaching: breathing and muscular tension —because we hold so much of our emotional state in the body. We look at emotions and then at the quality of our thoughts. With that awareness of physical sensations, emotions, and thoughts, we can now increase awareness of where we are now. Then we can look at how those things drive us. And then we can ask what we want. Once we can do that in the present right now, asking, “What am I aware of? What do I want?” It’s possible to develop that sensation of happiness right now; it’s not a process of going out there and getting the next thing.

Josh: I believe that as well—that regardless of circumstances we can all choose to be happy. I love the way you say: “I’m going to be happy. I’m going to have this or that.” It assumes that it’s always off into the future. And of course, we see the litter of celebrities and people that were chasing fame and fortune, and just ended up with a mess of a life—because it was always off in the future and they were never able to figure out how to be happy in the moment.

Richard: Oh man, what you said is so important, I would like to underline it, highlight it, ring sirens around it. Because if people can understand that and you can bring that to your clients and help the world with that concept, it will make such a difference.

Josh: I think it’s a useful thing to think about for people out there that are somewhere along the path, whether they are the young, hungry college student just getting started or whether they’ve already built up wealth and now they’re really on to the fulfillment and the contribution that they’re going to be able to do in their later years. And I like it that you haven’t retired. That’s good. I think retiring is overrated. There is always a new mission to go on. And, you know, in a lot of cases the cool thing about being financially independent is that the income is optional as far as earning money for doing what’s next. It could be volunteering. It could be speaking. It could be mentoring. There are lots of opportunities that the world is seeking as far as having value added to it, and so you’re a great example.

Richard: And when you think about contributing, a lot of people think of soup kitchens and doing stuff like that, but I encourage people to look at their knowledge, their skills, their beliefs and their behaviors, and to say, “I don’t have to solve all the world’s problems. What am I specifically good for?” It doesn’t have to be a downgrade to something that is a waste of your talent and skills. It’s about asking, ”How can I now reframe my talents and skills in a way that is really exciting and makes a contribution?”

Josh: All right, well thank you so much Richard, I do appreciate you taking the time to spend with us today. I think people are going to get a lot of value out of what we’ve talked about. Also, your book Conversations with Money is a great resource around the psychology of money. And for anybody who is a trader or interested in being a trader there’s the Mind Muscles Academy.

I thank you so much for taking the time today, and I hope you’ll come back. There are all kinds of different offshoots here that we could go on that deserve their own episodes.

Richard: Oh my gosh, there are so many more topics we could drill down on and I really give you an appreciation for looking at the important stuff rather than just looking at symptoms of problems. I really appreciate the depth that you bring to this, so thank you.


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I hope you have a great week, and God bless.

The opinions voiced in this episode of the Wiser Financial Advisor with host Josh Nelson are for general information only and not intended to provide specific advice or recommendations for any individual. Investment advisory services offered through Keystone Financial Services, an SEC Registered Investment Advisor.