Wiser Financial Advisor – Facing Financial Fears, Sarah Carlson Interview
Hi Everyone, Welcome to the Wiser Financial Advisor show 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, founder and CEO of Keystone Financial Services. Let the financial fun begin!
Josh: Today I am really excited to have our guest Sarah Carlson. She is the CEO and founder of Fulcrum Financial Group and also the author of Facing Financial Fears: 8 Steps to Financial Freedom for Women that comes out Tuesday, October 4th. Very exciting. Congrats!
Sarah: Thank you. I’ve learned so much through this process already, and book publishing is a fascinating business. I’m hoping Facing Financial Fears will make a positive impact on readers or listeners, one person at a time.
Josh: Yep, writing a book is quite an exercise. What’s that been like, going from scratch to actually publishing a successful book?
Sarah: You know, in a way I feel like this has been inside me my whole life. I was looking back on a Vision Board I did twelve years ago and I had the book on there. About five years ago I got serious with my blogging, and people that I didn’t even know were reading it would tell me how the ideas I wrote about would impact them. So that gave genesis to me to say, “OK, I’m going to write the book.” Writing it has taken about three years and it’s had three different versions. So now this is the final version and I’m really proud of it. It feels good to be at this stage.
Josh: If anybody wants to order the book, it’s very easy to find on Amazon if you go directly to www.facingfinancialfears.com , that will take you to the page. Check that out. Now, a lot of what you talk about is facing financial fears, and I think there’s no shortage of fear in the world, right? What was it that drove you to write about that topic, and how do you think that’ll be helpful?
Sarah: I’ve been in the financial industry for over 30 years and it’s been a privilege to be part of our clients’ journeys, you know, seeing ordinary people reach extraordinary lives through those years. I’ve consistently seen people that are anxious and worried and concerned. Seeing them develop peace of mind and comfort made me realize that I wanted to affect more people and I think one of the best ways to do that is with the written word or a podcast like you’re doing. It’s an opportunity to help more, but the genesis is to help the reader address the question: What are you afraid of? It’s an easy read. It takes the reader from fear to joy through steps.
I bet in your practice Josh, you also find that so much of it is putting actions in place. They don’t have to be big steps, but you can change the trajectory in a very positive way for people’s future. So when people are open and curious and willing to be coachable, there’s some real magic that can happen in people’s lives—not just financially. Money doesn’t buy happiness at all but having financial security certainly can put a smile on a person’s face.
Josh: Yeah, there’s a lot of good that money can do. And we hear that a lot—that money doesn’t buy happiness. But I always like to follow that up with, well, not having money also doesn’t buy happiness, right? Really, the decisions that people make can set them up not only to be financially secure in retirement. But ultimately, people can maybe use the latter part of their career and life to be giving and helping other people.
Sarah: Yeah, money doesn’t solve money problems, but good advice does. And so people working with professionals like both of us is definitely one way to help navigate and have a better success rate of reaching goals. It doesn’t take a lot of effort. That’s what people don’t realize. You know, if you really think how much grief money can cause in peoples’ lives; when you think of the divorce rate being so high and many times money issues are the number one reason for divorces, but money is controllable. Why shouldn’t we control the things we can control? Because there’s so much in life we have absolutely no control over.
Josh: That’s for sure. This year is a good example of that, going from an economy that was awesome and it was so easy to make money, to the exact opposite. I’ve noticed that the fear gauge in people has risen, anxiety levels naturally have gone up. So, when you talk to people right now, if they’re in a place of fear, what do you do to talk them off the ledge and get them back to a place where they’re thinking productively and their anxiety level isn’t quite so high?
Sarah: Well, I think it’s important that people be heard. I think some of the anxiety we face as a society is because of AI. As much as our iPhone helps us with new capabilities, new information, it’s very addictive and it creates distractions and not being able to get accomplished what we need to accomplish, which can build anxiety. So when clients come and work with us, it helps them when we understand where they’re at, not only in their financial life of assets, liabilities, cash flow, those things, but also psychologically.
What’s their money mindset? What’s their relationship like to money? What are their money values?
Because if we can understand where they’re coming from and understand more about where they’re going, we can deal with the here and now to address some of those issues and get people closer to where they want to go.
Josh: Yeah, emotions and psychology play a huge part, don’t they, as far as people’s financial success and what their outcome is. It’s funny: once in a while after a meeting, clients will say, “Well, you should have a sofa in here. I could lie down and you could play Josh, the psychologist.” But you’re right, often it’s a matter of listening and asking questions. In a lot of cases people are able to solve their own problems, but they do need somebody to be able to listen and help them get into a place where they can think productively and not be in fear, right?
Sarah: Right! Well, there’s so much shame around money, especially for women. As practitioners, you and I have a certain amount of curiosity. We think money is fun. It’s interesting. But many of our clients that come to us for the first time have as much anxiety and stress as they would getting naked in front of a medical practitioner for the first time. And we forget that it’s a very vulnerable place especially for a lot of the women that I’ve worked with through the years, because there’s a certain amount of shame and blame. They feel that this is something they should know, they should have it figured out. And yet, statistically most of us don’t.
It would be no different than if we had chest problems and tried to self-diagnose. You can have some indications, maybe some understanding of some of the things you’re doing to contribute to what’s going on but ultimately if you go to a doctor to actually get diagnosed and figure out a path to live a healthier life, it’s a lot better proven choice for success.
Josh: You’re right. People often say, “I should be further along; I should have known to be doing this years ago.” In fact, I think I’ve heard that one more than anything–that everybody, no matter how successful they are financially, says, “Well, I wish I would have started earlier.” The financial planning process will be designed around taking them from wherever they are now. Forget about the past.
It’s what we do going forward and having a plan can put us into a better chance of success. We can’t guarantee anything, but having a plan is better than no plan. And in a lot of cases, people end up being so much further along and have way less stress if they have a plan in process. What do you think about that? What would be the first step? Where should they go to start looking for a great advisor?
Sarah: Especially in this day and age, there are so many influencers on Instagram giving financial tips, yet they’ve never passed an exam. Some of them have never gotten a degree and they’re just repurposing things they see. They usually are very attractive people and look like movie stars. What they’re doing is entertaining. If you’re serious about getting to a better financial future, having someone that’s invested in the industry and educated like you are, Josh, a Certified Financial Panner is a great place to start. I’m one of them as well. To become a Certified Financial Planner, you need to have five years of industry experience .
Why is that important? Because 98% of people who go in and take the test don’t end up making it. This is a tough business. It’s a stressful business. You’re constantly having to work hard at your craft. So, look for duration; getting an advisor that actually has been in the business for a while is important. They’re going to give you a level of perspective. They’ve seen these situations before. You and I both have been in the industry for over 20 years, and I feel like I’ve been 50 different kinds of recession or pullbacks, right? I personally don’t think that this one is that special. It’s nothing like 2008 and it’s like economics 101: After a growth period and if you pump that much cash into society, it’s reasonable to have inflation. And what’s the Fed going to do? The only tool the Fed has is raising interest rates to help curb borrowing. That’s what the Fed is doing now. People get really fired up over that, and yet it’s so predictable.
So, having an advisor with some experience would be opportune. The government provides Broker Check, which is a great avenue because you can search and see whether or not someone has any complaints on their record. That’s a due diligence thing you can do. Also, if there’s someone who seems successful in their financial life, find out from them who they use for financial advice.
In this day and age, your advisor does not have to be in your own community. We have tons of clients that don’t live in our area. We do business all over the country and so many times we meet with them electronically just like you and I are now, via zoom.
Josh: Yeah, exactly. Especially after COVID. People might be 89 years old and never done a remote meeting, and now they’re doing it. So it really did open up the world dramatically. Now, let’s talk about the book a little more. 8 Steps to Financial Freedom for Women is the subtitle. So the focus is more on women—and I think the content is relevant for everybody. What makes you more interested in focusing on that side of things?
Sarah: I believe that people’s relationship with money is many times a reflection of their relationship with themselves. So I’m going at it with a money angle because I’m a money expert. It’s a financial empowerment book and through eight steps it helps the reader address what are they really afraid of. We all have our own issues and it’s important to start from where you are, wherever that is. First is helping the reader get curious about where they’re at and to learn some systems and exercises. I do old school and new school techniques to help the reader move through some different points and then help them develop self-empathy, no blame or shame. It’s really about moving past that and then putting in some things to help them get organized. It’s making it so simple that it’s easy for the reader to make progress in getting control of their financial life.
Then I move into helping the reader chart their course. Where are they going? Explore why that’s important to them, and then help them add up the different pieces. Help them understand the different buckets of money for different goals that they have and then how they fit together. Then ready, set, go to take those actions and take those first steps.
It helps them understand and appreciate the connection between love and money. And the final part is really to help them feel self-actualized; that they’re moving along on their journey, because we’re all on a different journey. Success means something different to all of us, and these eight steps are applicable to everyone, wherever you are, at any stage that you’re at.
Josh: Let’s say that we had a young recent graduate just getting started in her career. Maybe this is the first time that she’s really been faced with some of these decisions as far as 401K and how to budget, you know, all these things. And by the way, that’s a wonderful position to be in for those of you who are young because time can be your friend for sure. But what advice would you have? Where would you say to get started?
Sarah: Someone starting out at a first job, you want to help them understand the difference between short, medium and long term goals for money. Short term, having an emergency fund, and if they have to take on debt, understand the responsibility of what that means to them. Medium term goals covers things such as buying a house or going on a dream vacation or someday educating their kids. Setting money side for that needs to have a thoughtful, tax efficient strategy tied to the duration. Long term, you just mentioned a 401K. Every young person should sign up right away for their employer retirement plan and then treat that money as being for your future. It is not a piggy bank to rob to buy a new car or pay off your credit card debt. Treat it with respect because it’s worth it. You are worth saving for yourself and your family’s future. That is probably the most important advice I can give.
Josh: Yeah, I’m sure you’ve heard this from your clients as well—that there are so many people that have accumulated a lot of wealth but did not get lucky, didn’t win the lottery or get some huge inheritance. They just started early with the investing. And so many of those people say, “The reason I have what I have is because this coworker or this manager or somebody told me to sign up for the 401K.” Somebody told them to start early, start right away. So for those of you who are listening to this, we are the ones telling you, if somebody else hasn’t told you already, get started early. You definitely won’t regret it because it makes the lifting a lot lighter when you stop working.
How about the other end of the spectrum or maybe middle of the spectrum—a woman who’s been through a divorce? And that happens a lot. Statistically, a large percentage of people go through a divorce. Usually somebody in the marriage tends to take the lead on the finances. If it was the husband that was taking care of the money, now she’s landed in this situation. What advice would you have for her to get started again and rebuild?
Sarah: We help a lot of people in transition. People going through divorces and women in particular need to realize that these could be the most important financial decisions they’ll ever make in their lives, and they need good representation. If there are assets involved, get an attorney that can help you navigate and understand your rights because if you go to mediation or come to terms and you don’t have the full picture, that’s treated as a business contract and you are bound by it. Getting good advice from an attorney coupled with advice from a financial advisor, you can do some forensics so that you have a very clear understanding of where the assets are and what type of assets–because assets are not created equal. During a divorce, it’s important that you understand options and have some recommendations on how to put yourself in the best situation to get to your new life and springboard to what the next chapter is.
I went through a contentious divorce and it was very painful. I spent way too much money on attorneys. Thankfully, that investment in my attorney fees has meant that a lot of our clients have not had to go through anything like what I went through.
Josh: Painful experience, but they get to learn from you. And a lot of what we do here on the Wiser Financial Advisor is to learn from each other and learn from people who have walked before us. That way, we’re not having to go out and learn by trial and error because that is painful. So, what about the other end of the spectrum, say somebody who’s near retirement right now. If she feels like she’s behind on financial planning, what would you suggest for a woman in that situation, whether married or not?
Sarah: Regardless of how much money people have in the bank, especially women can tend to have what I refer to as Bag Lady Syndrome, where you’re worried you’re going to run out of resources and potentially become a bag lady. That fear and concern is real. Going into retirement is another really pivotal point of transition. Ideally you have two years to set it up and plan. Too many times, people take more time to organize and plan a vacation than they do their own retirement. You and I have tools, we have software that we can ask, “OK, what if you sell the house and move to Arizona? What if you have this life event and you need to have some medical care?”
It’s important to take a look at those what-ifs. If you have two years, it gives you an opportunity to practice as-if. Many times people will come to me who make $150,000 a year and suddenly they think, “Oh yeah, I can live off of $50,000, no problem.” And I say, “Well, if that’s the case, let’s try it. Let’s live off $50,000 and bank the rest.”
Josh: That’s a good exercise to go through.
Sarah: And the other thing is that people forget how valuable a lot of income sources are. Whether it’s a former employer, pension plan, Social Security, you have some options as to how you take those benefits and set yourself up with what makes the most sense for your needs and your life. That’s also where professional advice and a game plan can be very helpful. Something like Social Security goes up with the cost of living each year, and if you take it before your full retirement, you take a discount and any additional earned income has tax consequences. But if you wait to your full retirement or beyond, you get a multiple factor more than your full benefit. The Social Security website certainly has some good information. Advisors like you and myself, we can show those different what-ifs. That’s powerful information for people to know before they retire.
Josh: Yeah, I think it’s important for people to have optics, but why do you think so many people wait or just don’t do any planning?
Sarah: A lot of them are fearful. Women in particular tend to give our time and energy to our children or partners or bosses or clients. And we always think we’re going to have time and energy at the end of the day to deal with it and we just keep kicking it forward. It’s a combination of running out of gas and being scared. It goes back to that whole thing of how there’s a lot of shame with that. Women think, “Oh, I know I should,” or “Oh, I have enough to worry about,” or, “Oh, it will just work out.”
Josh: Yes, I’ve heard all those things word for word from people over years and years. So yeah, anybody who’s thinking this, you’re not alone. There are other people feeling the same things, but you’re much better off working with a Certified Financial Planner. That’s the gold standard as far as somebody who can guide you through this.
Sarah: Most advisors will give a complementary consultation where you can meet with that person and find out how their practice works. Some charge an hourly rate and others charge a percentage of assets under management. So I would encourage your listeners to ask around, make some appointments and shop. Check it out. Have some “exposure therapy” getting in front of someone and talking about it because that’s an important first step.
Josh: A lot of us do pro bono work, especially for young people that are just getting started, who may not be at the point where they need our services or could even afford our services, but we love to help people, so definitely don’t shy away from sitting down with somebody. Sit down with several people to find out, because you’ll learn something from each person, but also you’ll figure out who you click with.
Sarah: Exactly. And there are a lot of advisors that don’t have minimums. We don’t. One of our options is a subscription model designed for that young professional that needs help and maybe has an issue of debt that they’re dealing with. You can get coaching at a nominal rate. There are a lot of good resources out there, but you have to be willing to take that first step. Check it out.
Josh: Yeah, well said, and I get excited about your book coming out.
Sarah: www.facingfinancialfears.com will take you right to the Amazon page and then also I do a lot of blogging on financial fear and strategies to a better financial future on my website, which is at www.fulcrumfinancialgroup.com.
Josh: I certainly appreciate that you’re putting a lot of good out into the world, not just with your clients, but also doing stuff like this and writing and being a great thought leader. So thank you so much for doing what you do and for having a great impact on the world.
Sarah: Well, right back at you, Josh. It’s really just a pleasure to be associated with you.
We love feedback and we’d love it if you would pass it on to me directly at firstname.lastname@example.org
Also, please stay plugged in with us, get updates on episodes and help us promote the podcast by subscribing to us on your favorite podcast service.
Have a great week and God bless.
The opinions voiced on the Wiser Financial Advisor show with host Josh Nelson or for general information only and are not intended to provide specific advice or recommendations for any individual. To determine what may be appropriate for you, consult with your attorney, accountant, financial or tax advisor prior to investing. Guests on the Wiser Financial Advisor are not affiliated with Keystone Financial Services. Investment advisory services offered at Keystone Financial Services, an SEC registered investment advisor.