Chad helps help people organize their financial life, clarify their goals & make decisions that lead them to a successful & fulfilling life.
Chad helps help people organize their financial life, clarify their goals & make decisions that lead them to a successful & fulfilling life.
CHAD WILLARDSON, AWMA®, CRPC® is the president and founder of Pacific Capital, a fiduciary wealth advisory firm he started in 2011 after nine years of climbing the ranks as an investment advisor at Merrill Lynch. Currently Chad also manages a $350 million investment portfolio as the elected City Treasurer in his community. He created and trademarked The Financial Life Inspection®, a unique process to remove the stress people feel about their money. He’s a Certified Financial Fiduciary®, and is featured in The Wall Street Journal, Forbes, Inc., U.S. News & World Report, Investment News, Entrepreneur, and Financial Advisor, and the bestselling book Who Not How by Dr. Benjamin Hardy, Tucker Max, and Dan Sullivan.
Chad is passionate about financial education and believes that with the right tools and resources, people can be empowered to make smart money decisions. Chad is the author of the book, Stress Free Money: Overcome the 7 obstacles to Find Financial Freedom.
Outside of his business, Chad loves sports, travel, and serving people in need. He served as a volunteer for a church service mission in Lithuania, Latvia, Estonia, and Belarus for two years and can speak, read, and write fluently in Lithuanian. Above all, Chad cherishes his family. A native of Orange County, CA, Chad and his wife of 19 years live in Southern CA with their five beautiful children.
3:36 Put People Before Money & Success
7:09 How to Attract the People You Can Help and Repel the “Wrong” People
10:19 Know Who You’re Best Built to Serve
13:35 The Biggest Challenge of Solopreneurs
15:14 Recruit Great People to Attract Great Clients
17:37 Advice for New Entrepreneurs - Investing in the Market vs. In Yourself
21:41 Have a Plan & Automate It
23:49 You Have a Goal, SO THAT…
27:36 What Puzzles Can Teach Entrepreneurs About Goal Setting
30:47 The Most Important Strategy to Consistently Build Wealth
33:21 How to See What You REALLY Care About
36:50 Financial Fast Food
40:22 How to Tell if an Advisor is Looking Out for You (Or Not)
47:23 The Problem with Only Investing in What You Know
49:16 How to Know Whether to Invest More in Your Business or the Market
53:18 How to Know If Your Feelings are Getting in the Way of Your Judgment
53:52 Defining Stress Free Money
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Shockingly, most people don't have specific goals. They might say, I want to retire early. That's not really a goal. It's not measurable. It's not specific. It's not clear. They might say, I'd love to go to the go on a vacation every year with our extended family. I'd like to take my kids and grandkids on a vacation every year. Okay. That's a start. Let's talk about where would you take them? Well, you want to go to Hawaii. That's where we always dreamed of going every year. Okay. Let's put some numbers to it. What year do you want to start? Let's get specific. And I believe once you have tangible and specific and written goals, you're far more motivated to actually do the things that will help you achieve those goals. It becomes real, you know, you see the purpose.
All right. Welcome, everybody. I'm excited today to have Chad Willardson on. Chad is one of those people that if you don't get to know him, you kind of get almost a little jealous of what he's done. He is an extremely talented financial advisor, and there's a few things that I saw when he had reached out to be on the show that I saw what he's doing work wise. It really excited me and wanted to share it with you. So I'm going to first give you a little bit about his background. Chad is an A. Wma. And a CrPC. I'll ask him to explain that shortly. He's the President of Pacific Capital, a fiduciary wealth advisory firm he started in 2011 after nine years of climbing the ranks as an investment adviser at Merrill Lynch. He currently manages a $350,000,000 investment portfolio. As the elected city Treasurer in his community, he created and trademarked the Financial Life Inspection, a unique process to remove the stress people feel about their money. He's a certified financial producer and is featured in the Wall Street Journal, Forbes, Inc. US News, World Report, Investment advisor, news entrepreneur and financial advisor, and the best selling book Who Not How by Dr.
Benjamin Hardy, Tucker Max and Dan Sullivan. That's sort of what he does. It's awesome. What I love that really attracts me to having him on was this part being passionate about financial education and believes that with the right tools, people can be empowered to make smart money decisions. He's the author of the book Stressfree Money, which we'll reference a little bit in this interview, how to Overcome the Seven Obstacles to Find Financial Freedom. And outside of his business, he loves sports, travel, serving people in need. He served as a volunteer for a Church mission in Lithuania, Latvia, Estonia, and Bolaris for two years and can speak, read and write fluently in Lithuania. Above all, Chad Church is his family. He's a native of Orange County, California. He and his wife of 19 years live in Southern California with their five beautiful children. So thanks for making that work. People won't see this, but I messed up like two or three times, but Congratulations to all you've done. And welcome to the show. Thanks for coming out.
Thank you. Thanks for having me. Really appreciate it.
Awesome. So one of the things that really got interesting for me about wanting to have you on here was when I not only looked at some of the people you work with, you work with Dan Sullivan, the approach. I got a chance to go over part of your book I just released today, so I got to receive part of it and really like the approach you take of putting people before money. A lot of people say they do that, and it sounds good. I mean, it's such a nice sound bite. But when I read what you said you do, and having been in the insurance and financial services field, sort of the other side of the spectrum from where you're at, I saw a lot of commonalities in how you do things. If you just tell people just in a simple way, what is it you do for people that is so special and what is it that you love about that so much?
I remember when I was almost 23 and I had made a career decision that I was a senior in College, majoring in economics. And I got the job offer in Merrill Lynch. And I was talking to my friend's dad, who was a very successful attorney in Orange County, and I said, what advice do you have for me? And he said, always put the people first and the money and the success will eventually follow. And it really stuck with me. And I feel like that's always been my passion. In the beginning, obviously, I wasn't earning much. I was brand new. I was in my rookie years, my early 20s at Merrill Lynch and had a young family. And I think that motto has really carried me. And now in the position of a fiduciary and really being able to, I guess, be in a position after 19 years of having some success and being able to really put the people first because we're not in a position to sell someone that doesn't need what we have, and we're not really in a position to take clients that aren't a good fit. What we do is really help you advance and progress into your own version of financial freedom.
And our goal is at Pacific Capital is to help you enjoy life by removing your stress about money. So everything is built around that. And that's our focus. And for everyone, it's very different. Our clients have very different personalities and different backgrounds. They have some things in common. Many of them are ambitious entrepreneurs, but they have different backgrounds. They've been raised differently. So really finding out what makes them tick first before we make any recommendations is a key foundation of our service.
Awesome. Thank you. And one of the things that I saw in your writing and you and I were talking is and you said a different way. It takes a while for you to figure out what you're doing. So initially, we come in any career and we're very excited. We're going to help people and God bless us. We do things that either maybe don't help as much or we're trying to be helpful or overhelping or whatever it might be. And a lot of the times, at least certainly when I grew up in the field, I was told that it was naive to want to help people and make money, that that was something that couldn't be done, or at least you'd have to compromise. And I was often shown the example of teachers or social workers or I have a master's degree in psychology or counselors or mental health counselors, that that's going to be a compromise. And certainly in some situations, maybe it is, maybe it isn't. But one of the things that really struck me and I had listened to some of Dan Sullivan's work years ago. My father's, a successful insurance agency, listened to Dan stuff gosh years ago.
It's called the 21st Century Agent. He wrote before the turn of the century. And a lot of it was about moving from this model of being a salesperson of financial products to an advisor, somebody that really is putting the client first and their dreams, their goals, whatever that's important to them. And I think that transfers to any business, whatever you're selling widgets. Well, is that the right widget for the person or should this person even be buying widgets? And you mentioned something about how it's really no longer really doable to not do people right because of the circulation of information. People find out very quickly. But it's also in my experience, and my guess is for you, too, easier to simply just align with people who already align with you. How do you tell if your clients are the right fit? Do you have a filtering process? What do you do so that you know that you're going to be hopefully attracting the people that are right for your model and then perhaps turning away to people that aren't?
I think that's really important. In all of our messaging, we use the words and phrases that we believe will attract the right people. And I think it's you've got to be confident enough to repel the wrong people and not to just say, hey, I'll take anyone that wants to sign up, I'll take them as a client, and we'll just bend our principles or we'll change our philosophy completely to fit every single person. That's a failing strategy. So our filtering process, first of all, we have a gold conversation first. That's like a free discovery process where we are going to talk to people and really understand what's important to them and see if there's a fit. One of the slides in the presentation we actually have on the left side, it says you're not a good fit for us if. And on the right side, it SaaS. You are a great fit for us if. And it's not demographics, it's not your age or where you live. And it's really psychographics. It's really how you think your mindset. And so people who are just really do it yourself first, I want to make a quick buck.
I want a transaction. I want hot tips. I'm smarter than the experts, those kinds of people. I want the cheapest possible advice out there. Those kinds of people are not a good fit for us. And that's okay. They can find someone else that will fit them. But someone who's like goal focused, who likes planning, who has people that they take care of, maybe in a business or a family situation, they really want to optimize their financial life. They're willing to invest some time and money into making that happen. Those are very good fits for us in that goal conversation. We really can dig that out and filter out the best fits. And hopefully in our messaging, we're attracting those people because the people who are just those quick give me some tips. I want to invest and make a quick buck today. They're not going to be attracted to the things that they read about us anyways.
Awesome. And that's something I found, and I've been told that so many times, and sometimes I would intentionally or unintentionally move a little bit away from it and I'd end up coming back to center. Is this idea of being so clear and about who it is that is the best person that you can serve, not in the sense of being closed minded, but being in a sense of really accurate about what it is that you do best? And like you say, being able to take that leap of faith, how would you say that has served you as an entrepreneur in growing your business and without naming people? But when you look at people who haven't, what would you say is the difference in the journey of when you've gotten clear about what it is or even in your history, when you were kind of more just learning, or when you made that sense of had that sense of clarity, of, okay, this is who I'm going to serve. This is how I'm going to serve him. What are the difference between those ways as an entrepreneur?
What was that like for you or what has that been like for you as an entrepreneur? You've got to know who you are built to best serve. You have to, because there are almost 8 billion people out there. You don't need a billion clients. You might need 100 or 1000 or $500. So let's design. Not only design our service model and our team to fit our best fit client, but let's also make sure we're putting our fishing poles in the right Lakes. We're really looking for the people that want and deserve and value what we're going to pay for. So as an entrepreneur, I feel like we don't want to be begging people to hire us. There's a huge difference when you're following up and really begging someone and try to convince them that we're the right fit. Whereas you meet someone else and you connect and they value what you do. And their first response is like, wait, that's it? That's all it costs? Oh my gosh, I'm a client for life. And they're referring friends. It's such a different feeling. And so the sooner you realize who you are built to serve, the quicker you will have success in finding more of those people.
That's definitely what I've learned.
That's awesome. And that's something. There's so many different articles that have been written about this. There's one you might have read. It called A Thousand True Fans, and I forgot the name of the author. He wrote the idea that if you're a musician, an artist, an entrepreneur, anybody, if you have 1000 people that really love what you do, he used the example of simply, if they'll invest $100 that you'd be fine. You could make $100,000. Then obviously people have different financial needs. But the concept is being that not only can you probably not be everything to all people, you probably don't want to be. And as somebody who's been an entrepreneur and worked with people, when it's not a fit and you feel how awkward, it's like being on a really bad, awkward blind date, or even whether it's blind date or not, we're just like, gosh, this is just not flowing. In fact, maybe it's not a blind date. Maybe it was the person you thought you were so into. But then you talk and you can't even have two or three sentences with either disagreeing or just awkward silence and crickets or whatever it is.
And I think that's something that is so important and something else you said that I think people miss this concept of looking out for your team. So a lot of people are familiar with the idea of the financial responsibility to your family. If you're a family person, if you believe in that and a lot of people do, a lot of people, if you've not ever had an employee, then that's something you haven't experienced. And it's great if you have freelancers. And there's nothing wrong with freelancers. I hire freelancers sometimes, and they're awesome. But it's a different sense of responsibility when that person is counting upon you to perform at a certain level. How do you help entrepreneurs and what are maybe some of the different challenges that they have when they're looking at how do they stabilize their business? Because most entrepreneurs, if you've grown a team, hopefully you reach a point where it's not just about you and your income and you have a team of people that have worked with you. How do you help entrepreneurs? Perhaps with that, or what do you find that they say as entrepreneurs or what's most important to them and looking out for the people that serve them?
I'd say the first and biggest challenge is for entrepreneurs or solopreneurs to actually make that first hire and give up some control. I see that as an initial, like, early stage challenge. They're used to doing everything themselves, and they like that control. And it's kind of hard for them to give up. But the stage would be then to create a business where you've got the right people in the right seats, doing things that they love, functioning in their best ability, their unique ability and talents where they're not drained at work, they actually enjoy work. They get energized by what they do because you've profiled them to find the right fit and put them in the right seat, and you've trained them, and you've given the tools to succeed, and you encourage them. The better you treat your employees, the better they will treat your clients. There's no doubt about that. So as a Fiduciary adviser who serves entrepreneurs, I think one thing that our clients appreciate about working with me is that I'm an entrepreneur myself. So Besides Pacific Capital, I co own a sports facility here in the community where we host tournaments for basketball and volleyball and cheerleading and youth sports because my kids are on the sports.
And so I've built some businesses myself. I've gone through the struggles and challenges, and so when I'm giving advice, it's not like a financial advisor necessarily at the bank or behind the teller, the cubicle, who's just kind of talking from theory. I'm giving advice from experience, from what I've gone through. And so I work very hard to recruit and retain great people on our team who are thriving because they're doing what they love and what they're good at. And I believe that kind of teamwork will attract you have the right energy and the right positivity to attract great clients. They can see that you guys are unified. They can see that people are excited to work there. There's nothing worse than being in a restaurant and the waitress is dragging or the waiter is dragging. Right. And you can tell they hate their job and they're just kind of moping around the restaurant. It sucks the energy out of you, and it changes the experience. And so as entrepreneurs, we've got to keep that energy up, and we've got to keep everyone aligned and everyone rowing in the same direction. And when we do that, we're going to have so much more success in attracting and retaining great clients.
Yeah. One of the things you said just so aligns with me. I'm blessed to have watched and still work with the times of my father and his business. And probably the best strategy he's had is that he treats his employees awesome. He's had different stages of his career where he's been extremely involved in the business at times and at times when he's been much less involved as far as in the office, out of the office, and yet because he treats them well, because he compensates them well, but also treats them as individually with respect, well, even if we're letting them go, there's something that doesn't go away with that. And I think that's something that's so true with what you just said there of just making sure that the team is valued, not to mention what turnover costs cost you financially. Sure, even if you're selfish, you'd want to treat your team well. But again, if that's just how you try to treat people, it makes things so much easier. If you think about and I want to start pivoting a little bit into your book if you think about the typical entrepreneur and I'm going to make a distinction, let's say Solopreneur, who's just almost I remember this stage in my business where I was almost more of a self employed person who just happened to not work for somebody.
And I had not yet figured that I had to add another 10% for R and D or add another 10% to grow the business or some sort of as opposed to just paying myself and saying, okay, well, my gross income minus my expenses, that's what I keep, which is more of an employee's view of the world to starting to grow a business. What advice do you give for entrepreneurs who are perhaps in that stage of their balancing investing in financial instruments or mutual funds as opposed to investing in themselves? And how should they be balancing that in your experience? I know it might be different for individual people. Or what advice would you give them as far as how to even start that conversation? Because they're thinking, okay, Chad looks like he knows what he's doing. I'm probably not even ready for Chad yet. This person might be thinking, but I know I need to start something. I don't want to do anything foolish. How should they start?
I think there's two things that you would hire a financial adviser for. One is a fiduciary and comprehensive plan, and the other is to be more in a partnership where they're actually doing investments for you. They're managing investments. They're setting up retirement accounts, they're setting up College savings accounts, they're doing insurance, they're doing all these things for you. Those are two very different things. In both cases, I believe you really benefit from having a fiduciary adviser who is going to look at the whole picture and give you a plan that gives you some clarity. Because when you're running your business, even if you're in that early stage, you're swamped, you're overwhelmed, you've got so much stuff on your plate, you can't really see things from an outside perspective. You're just in the middle of the tornado and trying to survive. And so having that team look at everything from the outside and can give you a lot more clarity. They can help uncover questions that you hadn't thought about. You don't know what you don't know. So you're sitting here running your business, and hopefully you've got a Fiduciary team that says, We've worked with 100 other entrepreneurs just like you, and we know the next stages and we know how to help you get to that spot.
There's no reason to procrastinate or delay the planning. I think that's very important. You can do that from the very beginning. You may not need to pay for an advisor to manage your investments yet. It might be too early for that. But the planning part, I feel very strongly that you should do that no matter what stage you're at.
Perfect. I'm pretty clear on this, but I think the audience might not be that entrepreneur that says, Gosh again, I like Chad. Sounds like he's a great person to work with. I'm kind of insecure. I've just started my business. I've had money. I don't have a lot of money yet. That distinction of the plan. So you're saying they can still and correct me if I'm wrong, hire someone to help them create the plan without worrying about whether or not the person is going to steer them. I mean, the person could still be a good person or not the person that they hire. But in essence, the premise is they could still pay for the plan, still get first class help or very high level of help and not necessarily need to have 100,000 or $500,000 of assets. That person who said, I'm starting, I'm ready. My mindset is in the right place. I don't have a lot of cash yet that's going to be coming.
Yeah. I think there's a lot of people also that have even like, let's say a doctor who has been a doctor for a couple of years and they're buried in medical school debt. They have a good income. They don't have a lot of investment assets to have an advisor manage for them, but they have enough income where they could certainly it would be wise to invest that in paying for a financial plan and getting a Fiduciary to help them work through these issues and prepare for success. So at some point they won't have all that medical school debt. Their income will be more steady, and then at least they'll be on the right track.
Awesome. And then that person that doesn't even feel like they have a not a lot yet. Basic rules of thumb, I guess. Financial planning, advising books. Put aside 10%, put aside 20%. I realize you're a producer, so you've got to be careful what you say in a recorded situation. But in essence, have a plan is really what it sounds like.
Yeah. Have a plan. Be consistent, be Proactive, automate your financial habits as much as possible. I really like the idea of people having something that goes from a savings or checking account into a savings investment account every week, every two weeks, something that's just consistent and automatic. You don't have to manually decide if you leave it to chance at the end, you're probably going to be unprepared or saving a lot less than you could have if you've just been Proactive about it. And that's what a written plan will give you.
Absolutely. I think that's the thing that whether as an entrepreneur, we talk about this with business plans, if you're a life coach, you talk about this with people, with their life, with money, with anything. Having a plan certainly is going to be better than nothing. And having something written down is going to be better than nothing. And I think that's what, unless I'm mistaken, one of the first obstacles you find to somebody getting to a point where they have this stress for money. Would you hold up the books so people can see the picture? Like I said, I've had a chance to read a little bit of it because it just came out today. It's pretty exciting.
I bought it yesterday. I was like, if there's a pre launch, I didn't realize, like, Where's my book? I just put a little bit for my Kindle book. Where's my book? Damn it, this morning. Oh, God, I better read it. One of the basic things that's Bunny Young have a quote from Zig. Ziggler. I love ZIGG. He was one of the first people that I got one of those 18 cassette type sets. I'd be driving around and just everywhere I went.
Listen, I'm good.
We knew what was going on the news. One of the first obstacles you mentioned there, or the first obstacle is no clear goals.
How does that usually show up for people? Because I know in some ways when people write a book that has steps, they're so easily dismissed, because usually the advice, at least half of it is very fundamentally sound. What does it look like? Maybe for somebody who thinks, Well, I have goals because some people have wishes or they have ideas. What does the goal look like to you? So if somebody says to you, Chad, do I have a goal or not, here's what I've done. How would you describe it? Yes, you have a goal.
You actually have something shockingly. Most people don't have specific goals. They might say, I want to retire early. That's not really a goal. It's not measurable. It's not specific. It's not clear. They might say, I'd love to go on a vacation every year with our extended family. I'd like to take my kids and grandkids on a vacation every year. Okay, that's a start. Let's talk about where would you take them? Well, we want to go to Hawaii. That's where we always dreamed of going every year. Okay, let's put some numbers to it. What year do you want to start? Let's get specific. And I believe once you have tangible and specific and written goals, you're far more motivated to actually do the things that will help you achieve those goals. It becomes real. You see the purpose. So a lot of times people will say, well, I'd like to get let's say I'd like to have $15,000 a month in passive real estate investment income. Okay. My next question is, so that what I want to find out, the purpose behind the goal. Once you attach that purpose, it's like so that I can take care of my elderly mother who's struggling with this sickness.
And if I can't work, then at least I know I have that money coming in.
Well, now we have a specific goal and a purpose. Once you've got those clear goals and the purpose behind it, then you can really start to do some planning around it. Whereas most people show up and there's nothing they're aiming for. It's like going out into the forest and they're shooting a bow and arrow and there's no target set up. So they're just kind of shooting into the wind. And I hope it goes well. I think that was a good shot, and that's kind of how they go along. So you've got to have a target to aim for in order to really know what to do. That's how you measure your progress.
Awesome. And that's something I find so much when I work with entrepreneurs on the income goals, they have you've probably seen this, too. I want to make a million dollars a year.
Why? Because it's more than $999,000 and change. Well, what would that mean? And very often I find a lot of people and you might see this, too. They have a number that's so much bigger or so much less. It's almost never that they've nailed down what that number would be.
Very often there's this high number. Oh, you didn't need that much to do what you need to do. And so that part that you mentioned, why do you want to do this? Well, so that I can do this. Okay. Well, sometimes is there another way? One of the examples that Tim Ferriss mentions in his book Before Our Work Week where he talks about how he always wanted to drive forget the exact model car, let's say a Lamborghini. And at some point he realized, I could just rent a Lamborghini. I don't have to buy a Lamborghini. And it's still not cheap to rent a Lamborghini per se, but it's a heck of a lot cheaper than buying one. And so he wanted to have that experience. And just that idea of, again, being very clear of what you're looking to do, I think, is something so big. I know in the fitness world, it's very clear or a lot of people it's even clear. And maybe that's why it's so easy for people to sell stuff in the fitness world. There's this picture of this person or at least you think you want to look like or the six pack ABS or whatever it is.
But at least there's even a somewhat clearer picture. And even then, you still struggle with will people execute? Will they do it? That sort of stuff. There's something you mentioned in the book about entrepreneurs, and it really hit a chord with me because it's something that took me a while to figure out, even though I come from the insurance and financial advising background. And you talk about entrepreneurs sometimes having a fragmented financial life where the business is in one area and the personal stuff is in one area, and they're not really integrated. Can you talk a little bit about that and how you help people with that?
Yeah. To me, actually, that example of the fitness person is a great example. A really simple, basic example is having a puzzle. My youngest, I have five kids, and my youngest is five years old, and he is like a puzzle obsessed little boy. He's been doing puzzles since he was two. And I did a little less than one time with the kids, with the younger ones where I dumped the puzzle box out and took away the box. And I just said, okay, put it together. And they didn't know what it was. They didn't know what they were actually putting together. And I said, okay, now I'm going to bring the box in. And so I pulled the box out from behind my back and I set up the picture and I said, okay, why is it easier to put the puzzle pieces together when you can see the picture? And of course, the kids were like, well, I know what we're building, and I know what color goes where, and I know what it's supposed to look like in the end. And so many of us as entrepreneurs, our financial life and our business life and all the different things and components of what we've done over the years are like all those different puzzle pieces, and no one's ever put the picture on the box in front of us.
We've never had that conversation. And so we're just basically carrying around this bag of puzzle pieces with no real clear plan of what it's supposed to look like and how it all fits together. And so our job at Pacific Capital is to find which puzzle pieces belong and which don't. Some of them need to be thrown out. Some of them need to be cut and adjusted so they'll fit better. And we certainly need to help craft that picture on the front of the box so we know what we're actually aiming for in the end.
Awesome. Thank you. The other part you mentioned, and I love that. Well, first of all, I love that example because I just had a visual Linus from Peanuts carrying around a blanket full of puzzle pieces. It's so interesting. Again, the parallel to also growing a business what parts of your business or assets. A lot of the times I've had to figure this out, and now I'm able to share this insight with the people I work with. There are things you might love to do, this whole concept to do what you love and the money will follow. And maybe it will, maybe it won't. My son loves playing video games. He could perhaps, but he loves playing them and join them, not studying them, not becoming the greatest in the world at them.
But one of the things that I've had to make the distinction of, is it a hobby or is it work or is it making the distinctions? Well, okay, I might love it, but it makes no money for me. And I've now tried making money at it for X amount of time and now I'm good. Okay, great. I put in the hobby category. And for me, that would mean I do it on my Friday, Saturday or Sunday, gladly still happily do it, but I don't expect money from it. It kind of changes the expectation versus, okay, this is supposed to generate an income or this has a specific purpose, a specific idea of where it's going. And I think sometimes we're afraid to do that because then there's that possibility of disappointment.
What if I set ABC goals? I can't get there.
That's true. That happens.
So this other part you mentioned, which I really found interesting was the approach that entrepreneurs sometimes take to pain themselves. And I actually unintentionally referenced it of this idea of saying, okay, I'm just going to pay myself and not really being intentional about whether it's their wages, whether it's their financial advisor or even just not even paying themselves first. What do you find are some of the challenges for entrepreneurs or people in general, and how does that help getting clear on people's goals of what they're looking to create?
I think people pay their bills first, and that's a mistake. You should pay yourself your future self first and then your current bills second. And it sounds cute and I know people have maybe heard that before, but I think it's extremely important. You've got to save money off the top. You've got to have a percentage or a dollar amount that you're very intentional about, and you make yourself stretch. We have clients who've come back and said, I'm so glad we set up that direct automatic savings plan, because I look back over the years, there's no way I would have put that much money away had been left up to chance. So people spend their money first. And if you don't tell your money where to go, it'll tell you where to go. And then it just goes out. It goes out. So if you prioritize it first and fill in the expenses later, then you're going to have a much greater success in building and accumulating the wealth that you really should be putting away.
Absolutely. I don't know why this just hit me, but something about the way you said this really landed for me. That's a lot of what I teach people and other people, too, about also what you do with your time. Decide where you're putting your time first. If you don't put your whatever it is. I'm not looking to tell people what's important. But you'll hear people say, well, my family is important, but I don't see enough time or my fitness is important or whatever it might be, and they find themselves not doing it well. And it doesn't necessarily mean and this is for me, sometimes the perhaps tragic part or maybe a tragic tragic might be strong or maybe it's the right word, that it's not that these people are lazy or bad people or ill retention, they just aren't retention about what they're doing. And so they either don't have the time or the money or combination of both, because like you said, it's just kind of it happened, or whether not to mention all the marketing or advertising or other things that are out there that are not inherently of themselves bad. But if you don't mean that old saying, if you don't know where you're going with it from Alice in Wonderland, where are you going?
I don't really know. Well, then you're not late. It doesn't really matter because you have no idea where you're going.
That's one thing I tell people is if I can look at your calendar and your bank account, I can tell you what you actually care about because it's where you spend your time and where you spend your money. That's what you actually care about, no matter what you say or what you post about on social media. Let's peek into that calendar over the last month and let's look at where your money is going. And then let's rank by percentages and we're going to see what you currently value. And that the internal discomfort will come from not spending the time and not spending the money on the things that you know are most important. Yes.
And for me, I think with a lot of people, when they really want to know, it just becomes, okay, what sort of tool are you going to have that creates awareness? Because some people might really want to know they don't have an awareness tool. So whether it's are you going to look at your quick in your QuickBooks talk to your adviser or whatever it is, if it's money, are you going to look at your schedule to have something that creates that feedback loop that allows you to then realize, okay, I'm not on target with this obstacle to just want to know obstacle to hurt my feelings when you well, I talk about financial fast food a little bit about and you can talk more about a little bit about timing. And I have all these letters after my name from the insurance and financial services profession. And I was one of those smart kids that I left a Corporation. And this is right around the turn of the Millennium. It sounds dramatic when you say it that way, not just the century. And I can still remember my portfolios and the stuff I was in.
Really good stuff. Microsoft, Dell, AOL, Ebay, just solid companies, Amazon and was taking one of the big ten or Select Ten approaches that one of the companies used. And then I got into one of these things a friend of mine shared with me, one of these things that when it's three green lights, you Wade it. And so I took my money out of this steady investment that was making 10% to 15%. Because that's for losers. I'm way better than that.
Yeah, you got to get better than that. That's weak.
Exactly. And so started out, okay, I'm smart. I'm only going to take 10% of my 401. I'm going to play with it. So, of course, just right out of the textbook, 20% in a week, 40% in a week trading stocks. I have no idea what they're about. No fundamentals. If I were Warren Buffett's kid, he disowned me. And then, of course got greedy and then like a pig got my butt handed to me. And it was just one of those things like, Gosh, I knew better. And you mentioned later in the book a couple of things. But for me, it was a fear. It was still a fear, Ironically, with money that I wouldn't get to my goal quickly enough. I was so impatient and still didn't know fully what I wanted it for, but I did that. And so I guess where I'm going with this is in my mind, dumb people made those decisions, and I had enough feedback from school or other people telling me that I was smart say, okay, no, I'm not one of those people. And yet here I was losing. How do you help people understand that concept of it's?
Not that I'm telling you you're dumb or you're stupid, but you focus on this. They don't. It's not their profession, whether it's real estate or different things where people sometimes jump in thinking that they've learned enough. And yet you've got a couple of years in it, you've got more than a couple of years in it, you got a couple of decades into it. How do you help people see that difference between whether it's something that's just really true or just something that maybe they're not aware of or not wise about?
I think the misinformation and the over insurance of up to the second alerts is something that really harms people because they're getting the phone alerts, they're getting the headlines, the scary headlines or the greedy headlines, whatever it is, and it causes them to want to react. I put this quote in the financial fast food chapter. It says, make no mistake, the financial entertainment news media is your enemy, not your friend. If you let it, such media will distract you from your goals and destroy your ability to differentiate what is important from what is not. And so I feel like that's extremely important for people to understand and that's what we try to help you do is realize what's important and what's not, what information matters. With the retention coming up with Covet and the business shutdowns, with rumors of trade wars or geopolitical risks, like what actually matters, let's focus on what you can control and what you can influence an impact and not focus on the news headline of the day, you know, apocalypse, Theoret, whatever's going on out there. So I think that's the financial fast food, it's easy, it's convenient, it's not healthy.
Yeah, I like what you said about what you can control. That's one of the things sometimes friends, mine on both sides of the spectrum will pass me an article about a theory or an idea and I'll just simply say, Look, I can't prove it and I can't control it. So I'll just either say a prayer or not and just go about my day because I'm not getting to make that decision and nobody's coming to me to say, hey, wait, what do you think about this? And at the end of the day, I still have to help my clients, pay my bills, take care of my family, that sort of stuff. So like you said, it can be very tempting, it can be very engaging, and I think that's the right word for it. The entertainment part. One of the things that when we talk to our kids when they were growing up and they'd be watching cartoons or stuff, and you get in this conversation of how violent of a cartoon should a kid be watching? Remember my kids got in in Jago, and we're really kind of at times perhaps a little too sensitive about some of these things.
For me, it was like, okay, this is a cartoon, their Lego looking like, in case you Google Ninjago if you haven't seen Ninjago. But for me, it was very clear that this was not real life and so it was easy for the kids to see this entertainment. And so that was something that in their mind, they could easily distinguish the two. And yet when you look at a lot of the financial news stuff, man, that's really hard to tell because there are real implications. And yet in some ways, it's no different than my son on Minecraft or Fortnite or any of the currencies of these video games on the app where they just kind of arbitrarily come up with something and then people are getting stressed and they're freaking out.
Just trying to get people excited. They get paid from the clicks and the eyeballs and the views. So if we can stir up some emotion and feelings and get people fired up, then that's what we've got to do. So let's find the most extreme potential outcome that is unlikely but dangerous and scary, and let's roll with it. And that's what happens.
Yeah. Like you said, they get paid off of movement and clicks. My kids like, but what if they say something stupid, like people forget quickly or they move to another channel, they come up with another name? This is a really interesting one for me. I think it's the fourth one. If I have this right biased advice from financial salespeople. Now, I'm going to qualify this one first, and I think you'll definitely get this. I've seen books written from both perspectives. I've seen books written that anybody who is paid a fee, well, of course, then they're just double charging you. And I've seen, of course, that anybody who's not paid a fee while they're trying to sell you, it's all about them looking out for themselves and not you. And I've certainly seen examples of both that are great people that do great work. I've seen great examples or horrible examples of people that don't. How does a person tell if an adviser is really looking out for them? Because again, somebody can say, well, if you're a fee based advisor, then you're great or you're bad, or if you're a Commission based adviser, you're great or you're bad.
And I've seen so much of the marketing that just simply says by label. And that's like saying, well, if you're a Lakers fan or a Celtic fan or a Heat fan or whatever or whatever else, how do you sift through that to help somebody say, okay, here's how I know you mentioned you do your goals conversation. So for me, that's something. If I were working with you. Okay, I feel good about that. This person is investing time in me to see if there's a good fit or to see what's important to me. Is that one of the main ways? Or how do you help somebody that maybe doesn't work with you? What should people be looking for?
That's a great first part of it. What is the process? The advisor you work with has got to have a process. And the process can't be only leading to one quick conclusion, which is a sale. Today, everyone is out here in business. Obviously, we're not all running charities. We're all hoping to earn money from the people that hire us and trust us. But there should be some listening, some discovery, some planning, some interest in what it is I'm trying to accomplish. Before I'm told, hey, this is what I really recommend. It's almost like going to the doctor. And the doctor doesn't do the health exam. You don't fill out the paperwork, they don't test any vitals. You go in, you sit down on that little cold bed, and the doctor pulls a bottle of pills out and says, I really think these are the pills that are going to help you because it helps. Mr. Smith, and he just left my office. And I really think you should now try these. And it's like, wait, hold on a second. You don't even know what I'm I got pain in my elbow. What did that guy have?
I have no idea. When I talk about biased salespeople, I think it's those experiences that have given us a bad rap where a lot of people feel they're just high pressure salespeople trying to get me to do something that's not going to help me. And so some kind of an established process going through goals, discovery, giving, pros and cons, that's another thing I would say. And then every recommendation you take from an adviser should have both upside potential and downside potential explained to you. The cost should be explained to you. You should understand basically, like, what are the pros and cons? Why do you recommend this? Can you show me two or three different strategies and tell me why you picked this one over the others? So those are some things that I think you could really benefit from looking for when meeting with an advisor.
Awesome. Thanks. Yeah. One of the things I tell people is look for how many tools they have in their toolbox. If they only sell one thing right, then at least they should be clear. So if you say, hey, I only sell one thing, I only sell one thing, I sell ice cream. Okay, great. You don't want ice cream. You don't. There's nothing wrong with that. I know you've seen this. It's those we're going to do some planning for you. And here's this 20 step webinar conversation, and you and I both know where it's going. It's going to a very specific result, and they're just trying to prove to you the whole time it's really just persuading somebody. And people can be very persuasive. But to your point. Yeah. If there's no listing, it's like an architect telling you, well, you're going to have this house here's what it's going to look like. No, I'm supposed to tell the architect what it looks like, at least if we're building a house or the realtor if we're looking for a house.
Exactly right. Okay.
So I just love this because it's a great chapter title, the F word. Tell me about the F word.
The F word is fees. And so many times people first of all, I think the Fidelity study said like, 71% of people think that their 401 investment funds are free. Over 90% of people have no idea. I've seen that study with no idea what they're paying for financial advice and services. So fees, the effort. You've got to know what your costs are. Great work is not cheap, and cheap work is not great. So I'm not saying, go get the lowest Vanguard index fund, robo advisor, and don't ever talk to anyone because you should never pay an adviser. That's not what I'm saying, obviously. But you should be aware of what you're paying for and what you're getting. So the cost should be transparent. They should be upfront. And I do believe that quality advice and services is not going to be probably the cheapest option in the world. But you should know at least what you're paying. So there are a lot of people in our industry that would prefer that you have no idea what anything costs and just kind of sign here and take my word for it. But I just think that if you can keep your costs in a fair range for the different advice and services, if you know, if it's an insurance policy, if it's an annuity, if it's in a retirement plan, if it's College planning investments, you should kind of know what the range is, what's fair, and know what you're actually going to pay.
Absolutely. Awesome. Thank you. Number six is an interesting one to me. Taking on too much risk are not enough. And I think of the entrepreneurs I've worked with over the years, and I think some people would say, well, if it's entrepreneurial, they must all be high risk people. And a lot of entrepreneurs I know are not high risk people. How do you in general, help a person get clear on that? And is there a correlation in your experience of, well, if my business is more risky, should I be investing more securely or more conservatively? You mentioned the book that there are two main things to invest cash flow today and cash flow in the future. How does risk relate to those and maybe even share a little bit about I got a little bit about the three Buckets, and I've heard of that approach. How do you advise people on that?
I'd say a common mistake we see is that people invest in only one area because that's all they've ever known. So, for example, here's a simple and common example. You have a realtor who does real estate for a living. They buy and sell homes and their whole entire investment nest egg is in real estate because that's all they've ever done. So they have nothing to spread out the risk. They have no diversification, but they're just focused on the one thing they know. You have a medical doctor who is only interested in buying pharmaceutical or medical stocks, and they hear tips from their colleagues at the hospital. And so that's all they're interested in doing. So I see a lot of people who are over concentrated in one area because they just don't know enough about the other opportunities to invest in when it comes to too much risk, not enough, too much risk. That's the over concentration or that's people swinging for the fences, taking risks with retirement money that should be more secure, and they're looking to hit a Grand Slam on every single bat, which doesn't always work out, and then not enough risk.
I see that a lot too, people who have just a lot of cash sitting in the bank and right now they're earning zero 1% or whatever it is. And the money is just sitting there idle, losing value to inflation because they're nervous or they're looking at the headlines and trying to predict, well, I got to wait until this Coronavirus thing is over. I don't know who's going to win the election and therefore I'm going to let my money earn nothing. And so they kind of always have this excuse of not to make a decision because they're overtaken by fear and uncertainty. So I'd say those are the two common scenarios that we run into that relate to that chapter.
Awesome. Thank you. And then to go a little further into that, as the business owner, as the entrepreneur, they own a business or they're a solopreneur. What are some of the questions? You'd go into them with them to determine the balance of how much should I be putting back into my business versus how much should I be? Because I know I don't know if you've ever done this. I've definitely done this. Okay. Entrepreneurial gods. I'm about to spend some money on paid advertising. I've heard if I do, that stuff is coming back. And 5000 10,000, it's like, Whoa, that went really fast. And all of a sudden the five of the 10,000 you were so certain was going to come back. I mean, it's at least got to come back at 6000 or seven. There's no way gosh all of a sudden now mutual fund looks pretty good or savings account heck looks good. How do you help people? Are there stages? Are there different ways you look at the business's success or its consistency? What would be some of the questions? You'd explore them to balance that out?
We would look at stability of cash flow. How much money came in over the last three, six and twelve month periods? How much money stayed? Is all the money turned over in the operating account? Is it $100,000 comes in, but then over the next month or 200,000 goes out. So there's not really any money that's staying that's leftover because where the expenses are. So we would also look at the debt to asset ratio, money coming in, money going out, where the owner is taking dividends and distributions, how they're paying themselves. We're going to try to optimize that for tax purposes as well as retirement planning. But really having that stability of income, what kind of a business is it? Do they get paid weekly? We have one client who's got major accounts receivables. So we understand that he's always got to wait until he has at least some of those big payments coming in before he can do some investing, some new investing. So some of them the recurring income obviously is ABC goals for most business owners. That's obviously where we love to see our entrepreneurs is somehow monetizing their business in a recurring income stream, so they're not out becoming a collections firm.
So when they've got that recurring income, it's much easier for us to predict stability of cash flow and know what percentage we can move into investment accounts versus leaving it in the operating business.
Awesome. Thanks. Yeah, I remember when I made that switch and I literally changed the account and ended up, I guess, technically starting a new Corporation when I went from more of the accounts receivable to the cash received. And it wasn't just from the accounting standpoint, but even just the way I operated, I guess I got okay with people waiting 30, 60 days and that sort of stuff. And maybe some of it was based on even the technology at the time, credit cards were less prevalent. People would actually this was 20 years ago. People would write checks for services. Now people for the most part, I have a software company is one of the things that most people expect they're going to pay with credit cards. Well, yeah, I'd rather pay the two and a half or 3% and know that the money's coming in. Yeah. Then be a collections firm, which is such a waste of time. One of the things that I think you've addressed, and I think it's part of the title of your book. What is the title of your book? But then also the letting the feelings getting the way, and then just stress in general.
How do you find that sometimes feelings cloud people's judgment? And then I guess it's a two part question, and then what would you say your clients or you would define as a stress free relationship with money? That's not. Well, I've got 100 million in the bank for most people. Okay. I've got 100 million in the bank, but that's stress free. Yeah, sure. That's not so bad. What does that look like? Actually, sorry, I have two questions.
So first, how do feelings get in the Wayne Dyer feelings get in the way because you become attached to whatever you're doing or you're fearful, you're overcome by fear. You're so excited about an investment. Think about a house. A couple is buying their first house and they're so excited, they fall in love with a specific home, and it's way out of their price range, way out of their budget. But their emotions are involved. Their feelings are involved. They're so excited, they're going to pay whatever they have to pay just to get the house. So financial decisions without emotions are typically Mitch Creasey, and you look at things more objectively. I define stress free money, stressfree relationship with money as not worrying about all the different money decisions and the anxiety, basically removing that anxiety from your life because you're prepared and you have a plan, not because you can predict what's about to happen, but because you've done enough work to get yourself prepared. No matter what happens, you're going to be in a good, comfortable and confident position. So I think it's extremely important to understand that stress free money is possible regardless of your income level.
It's not about I just need to make a little bit more, and then I'll be in a good position that I don't have to worry anymore. That's not true. People who make a lot of money still have anxieties they have different problems, but it's still going to be there. So it's not about just increasing my income and then I'm fine because then it's like that never ending walk to the Mirage in the desert. You're not going to get there. So it's really about being in a position of confidence and knowing that you don't have to worry about all the financial challenges that you used to worry about because you've prepared and you've done a lot of great things to put yourself in a great position.
Awesome. Thanks. That's the biggest thing I've seen, both in business and finances. It's very often the relationship between your expenses and your income, the relationship between your expectations, as you've mentioned, in different ways. And can you be happy with it at a certain level that it has to always be that one step further. Right, man, thank you so much. I've actually gotten a lot out of this, more than I even thought I was. Like, I've been in this field learn a lot. So thank you for that. I got a lot of this today. If you're an entrepreneur in this, hopefully you've gotten a lot out of this. Anytime somebody has something that feels to me like it's really insightful, I always try to tie it back. But in Chad's case, I didn't have to. Chad's an entrepreneur. This is something that just flows with what he's doing. If people want to learn more about the book, where can they get that?
Yeah, the book is available today on Amazon. So if you just go to Amazon, stressfree money. Yeah, here it.
Done. It's uploaded. We're waiting for Amazon to approve it. So hopefully very soon.
Okay. Well, I got the Kindle version today. I've been enjoying it. And like I said, I took a couple of things from it and I got reminded of some of the fundamentals. So that was really great. If somebody is interested in working with you, how would they get in touch with you?
Best place to schedule a time to talk is on goalsconversation.com. So if you just go to goalsconversation.com, pick a time and we can chat.
Awesome. Thank you so thank you so much for taking the time to share what you know with our audience chat, or at least part of what I'm sure you know, a couple of other things. Thanks so much for taking the time to share this with us. I'm looking forward to seeing how the book goes just from what I've seen and what I've experienced. And I don't need to tell you, you're on the right track. Obviously I know you're on the right track and your business is showing it. I think of the fact that the budget you're managing and what you're doing and how much it validates that but the thing that really led me to want to have you on is when I read a little bit about and solid about your involvement with your family and how you're involved with that and what you do when you told me that you're involved with an entrepreneur says yes, I'll put my money involved into a gym because my kids are going to be playing sports.
So thank you for that and for sharing that. I'm sure there's a lot more you can share. I'm actually looking forward to your second book to be honest with you, a little bit more than your first book. No offense because I'm actually looking to hear all the stories about some of the wisdom of the puzzle pieces and that sort of stuff.
I actually think you have a second book in you but I know right now my second book my second book coming out next year is going to be about teaching children about money not raising entitled kids what to teach kids about money so it's already in the works that I've been writing down and recording a lot of stuff for. It.
Nobody'S going to believe that. I didn't know that.
I thought you knew that. Honestly, I was like how did he totally knew that but I guess we never talked about it.
I see these things I'm not so bad thinking I got a couple of things going on. Anyway, thank you so much for coming out. Anybody. If you have questions reach out to Chad and as always look forward to helping you make more money in less time. Do what you do best so you can better enjoy your family, your friends and your life. Have a great day, everybody.
I help HNW entrepreneurs enjoy a lifestyle of financial freedom 🌴| ⚖️Certified Financial Fiduciary® | 📖2X Best-Selling Author
Chad helps people enjoy life by removing their stress about money.
He is the founder of Pacific Capital, creator of the Financial Life Inspection, author of the best-selling books "Stress-Free Money" and "Smart, Not Spoiled” and co-owner of multiples businesses.