Transcript

Wiser Financial Advisor – Interview with Mark Willis

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!

Recently I had the opportunity to sit down with Mark Willis, a fellow Certified Financial Planner. He is a man on a mission to help you think differently about your money. He is also a 3-time #1 bestselling author and the owner of Lake Growth Financial Services, a financial firm in Chicago, IL and the cohost of Not Your Average Financial Podcast. It was interesting talking to him because we are of the same cloth in that we are here to help people as Certified Financial Planners. We talk about the profession and also about how to get into the business and still make ourselves uniquely human, as ChatGPT and other artificial intelligence tools come online. We also talk about retirement income planning and how important it is, especially in today’s world of uncertainty. I think you’re going to enjoy the conversation. Have a great week and God bless.

Josh: Welcome, Mark. You and I have a similar passion for the industry and helping people. What was it that got you interested in this business and what keeps that fire burning in you now?

Mark: I didn’t grow up with any awareness of money. My mom and dad did their best, but we didn’t as a family know much about money. I went through college and Graduate School, never really caring too much about balancing that checkbook or budgeting. I stumbled through college, did a good job there, but ended up with a bunch of student loan debt totaling in the six figures. And in 2008 when I graduated. the degrees I had weren’t exactly marketable. So I started getting very interested in this thing called money. Because wouldn’t you know, the student loans wanted to be paid back every single month!

After getting my big fancy masters’ degree, my first job getting paid was with a wet and dry vac shop, sucking rainwater out from underneath a broken elevator. That was for the property management job I got in the middle of the recession. It didn’t pay much in dollars, but it paid me a lot in terms of wisdom and lessons learned.

Josh: So you were digging out of that financial hole, and what would you say to somebody listening right now, somebody that came upon hard times or is maybe just starting out; what advice would you have for them as far as what to do first to dig out of that hole?

Mark: Well, understand that you’ll be OK. Realize that it’s temporary and you can build yourself a better platform with slow, predictable and directed wealth accumulation, rather than just trying to scratch off the Lotto ticket to get out of the thing quickly. Be comfortable with the process.

I stayed in that job for about a year and a half and worked three other jobs along the way. I did some tax prep for a CPA. That was what got me at least aware of this thing called the financial industry. But Josh, it was just out of the 2008 crisis, and this CPA was wonderful, nationally recognized, good at what she did. She did investments, but she was having to make those phone calls: “I’m sorry, Mr. Client. You’re 62 years old, but I just lost you a third of your life savings.” And that devastated the clients, but it terrified me. So here I am, looking into the abyss of my debt. My wife and I are throwing extra cash at it every chance we get. Eating beans and rice, and on Fridays we’d switch it up and eat rice and beans just to keep things interesting. And then on the other side of the equation, I’m seeing these moderately affluent clients losing their shirts and not able to retire the way they planned. I looked at the whole thing and almost gave up on money and the financial industry. That was the dark point for me. I really thought this whole thing is just pointless. I began to feel like a tennis ball floating down the gutter of life and almost just let bygones be bygones with money, which would have wrecked my credit and wrecked my life in many ways.

There’s a book out there on this, called Debt, the First 5000 Years by David Graeber. Check that book out if you’re interested. The title says it all. The title is scary and reminds me of just how pervasive this problem of debt is to have. It’s as old as every human institution, but what’s also interesting is that somebody’s debt is somebody else’s asset. And slowly but surely, I began to realize that if I owe money, I owe it to something or someone, and that means I’m their asset. I’m their annuity, right? The borrower is servant to the lender, right? Which is straight out of proverbs. So I started to think, “Well, somebody out there is making a buck off of me. Somebody’s getting their retirement coffers filled up and it’s guaranteed.” There was this stream of debt flowing into somebody else’s pocket; it just so happened to be this lady named Sally Mae. I wondered how I could sit on that side of the banker’s desk, and that’s where I got my start in the financial industry.

Josh: There are a lot of good educational resources out there. Do you have any favorites, by the way, for somebody who’s trying to get a good foundation? You’re a fellow podcaster who’s got a great one: Not Your Average Financial Podcast. But what are some of your favorite resources besides your own podcast?

Mark: Well, there’s that book on debt I mentioned. It’s a great history lesson on debt but it doesn’t exactly give us a lot of practical strategies or anything. Another really great book is by Pamela Yellen, (no relation to Janet), called The Bank On Yourself Revolution. That book opened my eyes to the idea that I could become my own source of financing. I could bank on myself rather than using some other bankers, whether for my student loans or my car loans or my mortgage. I could become my own banker and pay myself an interest rate rather than paying it to some other institution or whatever. I’d recommend that book for folks that just want to get a different take on the financial options you have available in addition to all the incredible things that Josh is doing and that folks are doing out there. Take a look at strategies that help you think differently about banking, which is a little known asset class that most folks maybe just take for granted.

We’ve now reached an all-time record high on our credit cards as a country. At the end of 2020, we were at an all-time record high in our savings rate. Some people might wonder how that is possible? Many people believe it was the stimulus checks that we received during COVID that allowed us to save upwards of 30% of our incomes. We hadn’t done that since the 1940s. But now it’s flip-flopped. We’re now spending almost 30% of our income on debt. We’re saving in the ballpark of 2.8% of our income on saving. Now, saving includes investments, emergency fund retirement, college savings. Is 2.8% of our money really gonna cover all that? I mean, it’s hard to meet our financial goals when we’re only putting away that small amount.

Josh: Let’s turn to our profession of Certified Financial Planner. What differentiates us from people out there that might call themselves a financial advisor or investment advisor or whatever their title is?

Mark: My take on this is the grocery store. When you go to the grocery store and you want to buy the nicest type of steak, let’s say you can get an all-natural or a USDA organic. You can get all-natural granola bars or USDA organic granola bars. Which one has the quality control? All-natural means nothing. OK, maybe there’s some emphasis toward health, whatever, but it means literally nothing. USDA organic means that the food had to go through rigorous quality control checkpoints. That’s what a Certified Financial Planning professional is. We had to go through the gauntlet. It took me a long time to get through those courses, to take that test, to prove that I’m a fiduciary with each of our clients and that I act in their best interest. And we all have different perspectives; we all have different markets that we serve. We probably need about 10 times as many of us as we have. At the same time, I have to say that while the Certified Financial Planner designation matters and I’m glad and proud to wear that label, words like CFP and fiduciary are only as good as the people who represent them. You might know this, but Bernie Madoff was a fiduciary. What good did that do his investors? So how about yourself, what would you say to why it matters to work with the CFP?

Josh: I think that the other part is that we’re looking at things holistically. It’s not just about the market. It’s not just about retirement planning. There are so many other things like taxes and estate planning, that have a profound impact on people’s financial lives and the lives of their survivors. That’s a big part of planning.

Mark: Yeah, how do your college planning goals impact your retirement goals or your estate plan? How does it impact your insurance? That’s a great point.

Josh: And if I was to send, say, a family member, to someone who wasn’t me, I would be telling them to make sure to work with a Certified Financial Planner who is actually delivering financial planning and doesn’t just have the letters after their name, because there are a lot of people in our industry that may be an insurance salesperson or a great investment person or something like that, but you really want somebody who’s looking at everything.

Mark: Yeah, like a doctor. We walk away from our first meeting with folks with 10 to 20 pages full of notes, and usually it’s several hours of processing those notes to prepare our best sets of recommendations. This is not just a churn and burn type situation. We’re carefully considering someone, so learning to listen is one skill set that I think we were taught as CFPs, but it’s not explicitly named. You must learn to listen if you’re gonna be acting in someone’s best interest.

Josh: Yeah, that’s one thing that differentiates us is that we care and actually take the time to know the person’s situation. That’s another thing to be asking if you’re interviewing a planner is what kind of technology they use. Do you use AI? How are we adding value as humans and using those things as tools.

Mark: Well, I asked ChatGPT why anyone would ever want to use it for financial planning. It was like asking a barber if you needed a haircut. The software said that generally speaking, it can do a fine job at analyzing portfolios. However, there’s no way for AI to understand individual financial concerns and goals and empathize with clients. I’m not seeing too many softwares giving courage to clients or giving those aha moments when the client says, “Oh, wow. I didn’t know you could do that with money.” These are things that the human relationship brings to the picture that AI hasn’t figured out yet and maybe never will.

Josh: Yeah, ultimately, even though a jet airliner right now can pretty much fly itself, I don’t know many people who would get on that plane if there wasn’t a pilot in the cockpit.

So, let’s talk about retirement planning. A lot of people come to us wanting to plan for income they can rely on. When you first sit down with somebody, what are some of the key questions that people really need to ask of themselves?

Mark: Well, have you ever climbed a mountain? Ever done any backpacking or anything?

Josh: I have. Not Everest, but I live in Colorado, so we’ve got lots of good mountains here.

Mark: OK. So well, the beautiful mountains of Colorado can attest that going up the mountain is hard. (I’ve climbed a few fourteeners and climbed Mount Fuji when were there.) It’s the hardest workout of your life. You feel you’re gonna have a six pack for days afterward. But then you get to the top and you’re loving life, and then you start going back down. And going down, I felt like I was going to die multiple times. Going down was much harder and scarier than going up. Apparently, National Geographic did a survey, and 85% of deaths are coming down Mount Everest, not ascending. So this tells me that there is a dramatic change in our assumptions in our muscle groups when we’re coming down. Maybe we’re really tired at that point after reaching the top. It could be a lot of reasons, but let’s compare this now to retirement planning. We spend 30 plus years climbing up the mountain and we’re doing a good job and we’re making smart allocation choices and we’re tax loss harvesting and we’re rebalancing as we want to. All this is fine. And then we get to the summit. And where do we plant that flag? Do we plant the flag on the summit? No, no. The goal is not to plant the flag at the summit on retirement day. The plan is hopefully to descend the mountain successfully and plant your flag back down at base camp. Or even better, hand your flag to the next generation. What you cannot spend, you can give to the next and watch them climb.

So the biggest change that we need to make as an industry is how do we reorient ourselves now that 10,000 baby boomers a day are turning 65. We need to think about ourselves as income planners, not just financial planners. Let’s think about ourselves as income strategists or income planners. We need to know how to preserve what we’ve accumulated, and we need to know how to distribute what we’ve preserved.

Josh: Yeah, I think that’s a great analogy because the fear doesn’t go away. A lot of times people are afraid of not being able to retire or once they retire, they’re afraid of running out of money. That’s the primary fear we hear over and over. So we want to make sure that we’ve got a plan that gives them confidence, right, that they can, not just survive, but actually do what they want to do. Most people don’t retire for physical reasons unless they have to. Most people don’t retire because they want to go sit there. They want to go climb Mount Fuji or have all manner of adventures.

Mark: That’s right.

Josh: So let let’s talk about your podcast. What are some of your favorite topics you’ve covered or areas that people should look at? And by the way, what’s the best way to find you right now?

Mark: Go to www.notyouraveragefinancialpodcast.com The topics we cover are, as the title suggests, not so average. We focus quite a bit on how do we strategically turn this big blob of money into a stream of income that can never run dry. How do we do something that is more efficient than even the 4% rule in terms of how we distribute those funds in an effective way? We talk about how to become not just debt free, but better than debt free. We talk about how to become your own source of financing and how to bank on yourself and become the bank. So we talk about some strategies that are not so average, not explicitly talked about on CNN money or any of the squawk boxes or whatever. We try to keep it light, we keep it within about 25 minutes or so, and it’s based on a lot of the content that we share with our clients as well.

Josh: Very good. How about for younger folks, people that are about to graduate? It’s that time of year and we’ve got people graduating pretty soon and we’re hearing that people are stressed about finding a job, getting their career started, getting going during a potential recession. What advice would you have for a young, driven person, regardless of what their major is?

Mark: Your body and your mind are your greatest assets at this time, so insure both of them. Educate your mind and train your body. Get some disability insurance if you don’t have any. If you’re a young person, this is not sexy. It’s not fun to talk about. It’s not like getting a great 12% rate of return on an index fund or anything, but one in four people will have a disability of over a year before they’re 65 years old. One in four. That means it’s either you or your spouse or your mom or your dad. One in four of you will have a disability before you’re 65 that lasts over one year. And nobody’s got disability insurance, or almost nobody. So I don’t like talking about it. I don’t like encouraging folks to get it. It’s not fun. You don’t build wealth with it, but that is a big deal for folks that are young, and it’s cheaper when you’re young. You can usually get it for 30 bucks a month, less than your cell phone bill most of the time. That’s one piece and the other piece is invest in your mind, give yourself all the tools that you can, read all the cool books. (Josh, you’ve got amazing books on your bookshelf.) So keep reading and investing in yourself because you are your greatest asset.

Josh: I would agree with that. Learn like crazy. Be a sponge. We’ve got plenty of content out there, right? Listen to podcasts and things from people who have walked before us. You’re a great example of giving back by having a free resource for people that are getting going, whether they’re in our profession or not. There’s certainly a lot of demand for young financial planners. In fact, they say that the average financial advisor is about age 58 or so, which is not to say 58 is old, but 58 is an average, which means there are a lot well into their 70s who will probably be retiring soon. So a lot of need there for younger people to jump into the industry.

Mark: We do have several different training apparatuses for new advisors. I’ve done several online courses and helped train several folks to become successful as financial advisors. I’m doing what I can. All of us as Certified Financial Planners can do better. I know I’m trying to really help the next generation. Only one percent of America has a financial planner. What if we could get it to 2%? You know what would change about America, what would change about the divorce rate, what would change about the credit card debt rate? A lot would change about all the troubles that a lot of Americans face if we could just help a few more people think differently about money.

Josh: Yes. I certainly appreciate you sharing your wisdom today. I love what you said before about the fact that it’s not just crunching numbers. It’s empathizing, asking good questions, listening. Those are all key skills and just caring. Fundamentally, that’s why we’re in this industry, to help people. And if you’re somebody who cares about other people and wants to help them improve their own life, that is a great impetus for you to get into this industry, or at least check it out. So thank you for the time today, Mark, and thanks for being a great resource.

We love feedback and we’d love it if you would pass it on to me directly at josh@keystonefinancial.com . Also, please stay plugged in with us, get updates on episodes and help us promote the podcast, and subscribe to us at Apple Podcasts, Spotify, or your favorite podcast service.

The opinions voiced on the Wiser Financial Advisor show with host Josh Nelson are 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 your attorney, accountant, financial or tax advisor prior to investing. Investment advisory services offered through Keystone Financial Services, an SEC registered investment advisor.