The Financial Mentor Podcast

 

Two years ago, I announced to my Expectancy Wealth Planning course community that we were about to enter epochal change.

Between the Fed's permissive monetary policy, near-zero interest rates, Covid stimulus, and supply-chain issues, it was clear the game had changed.

And here we are now, with a 20% stock market decline, historic bond market decline, the highest inflation in 40 years, and a slowing economy. The bad news is there's still more to come.

But more importantly, epochal change means the investment rules changed for the next 10-15 years. What worked for the last epoch (40+ years) cannot be relied upon for the next epoch.

I've been writing about this very topic for two years in my private course community to prepare my students, and I've published resources every month for more than a year in my public facing newsletter to prepare my free subscribers as well.

My goal was to provide the knowledge required so that every person following my work could protect and prepare their portfolios in advance. Forewarned is forearmed.

While my private course community responded to the education, protected themselves, and even prospered, I was surprised that only a small percentage of my public facing, free subscribers took action.

Even though I was providing academic level, third-party research proving every supporting point, people weren't responding. It was like they were asleep at the wheel, and didn't believe the regime change was fundamental in nature and would persist.

I decided to check in with my course community in our weekly office hours call.

The discussion that followed was so valuable  that I wanted to share it publicly. Fortunately, my private community students agreed.

This podcast episode is a nearly unedited recording of one my weekly office hours support calls with my private Expectancy Wealth Planning community as we discuss epochal change.

I hope this inside look behind the paywall helps you take appropriate action to secure your financial future.

And if you got great value from this episode, make sure to check out my Expectancy Wealth Planning course here.

In this episode you'll discover:

* What is epochal change?

* The signs I saw two years ago for epochal change

* Why I've been talking to my Expectancy Wealth Planning course students about epochal change

* How inflation was inevitable after the Fed's stimulus in the face of supply chain disruption

* The important role the Fed has played in creating epochal change

* What you can expect to see the markets do for the next 10-15 years

* How investing in this epoch will be different from the last 40 years

* How my course students were able to save their paper asset portfolios from the current bear market

* The best tool to manage your paper assets during the next epoch and beyond

* Why the investment strategy that worked reliably in the past won't work in the future

* How to avoid the insidious trap of “buy the dip”

* The signs for epochal change

* The best way to guard against volatile markets

* The dangers of recency bias

* Why most people don't understand epochal change

I love sharing FIRE case studies to inspire you.

They prove the dream really is achievable for normal people with no extraordinary financial skills.

They also unmask the dream to show how the reality of financial independence and early retirement differ from your idealized vision.

The truth is everyone hits potholes, makes mistakes, and questions if it's worth all the hard work.

Our guest, Chris Mamula, is no different.

He candidly shares his FIRE story in this interview – warts, blemishes, and victories as well.

Despite several costly errors he managed to achieve financial freedom in just 5 years.

* Chris paid excessive fees to a financial advisor

* He bought a variable annuity within a 401(k)

* He felt “less than” when comparing himself to other FIRE success stories

* But he got several critical factors right like keeping expenses low and saving a high percentage of his income, and that proved to be good enough.

Financial freedom isn't about luck, brains, or a single great investment. It's about having a valid plan based on proven principles and taking sufficient action with enough persistence to reach the goal (exactly as taught in my Expectancy Wealth Planning course here).

Anyone can do it, and these case studies prove it.

I hope you enjoy the example Chris has shared.

And if you got great value from Chris's story then please check out the other FIRE success case studies on this podcast.

In this episode you'll discover:

* What inspired Chris and his wife to become financially independent

* Why Chris is so debt-adverse, and how it worked to his advantage

* How Chris adopted the term “dirt bag millionaire”

* The important role values play for achieving financial independence (they matter way more than you think)

* Chris's personal definition of financial independence

* How the 25x Rule, Rule of 300 and 400, and 4% Rule can give you a rough benchmark of how much money to aim for in retirement

* The mistake that occurs when you get overly focused on retiring early

* How to balance spending now versus saving for the future

* What Chris did once he realized how unhappy he had become on this journey

* How to avoid the insidious trap of “I'll be happy when I'm retired”

* The benefits of continued work after financial independence

* How to redefine what early retirement and financial independence mean, and why it matters

* Abundance versus scarcity in early retirement

* How Chris's plan reflects the “new retirement“

* The surprising reason why most people pursuing financial independence will continue to work

* Risk management for early retirement

* The key to understanding mathematical expectancy

* Why it's paramount to become your own financial expert, lest you get taken for a ride by your financial advisor

* The danger of financial advisor fees. Chris was paying over $8,000 every year!

The cost of college is ridiculous.

You can give your child a top quality education or s/he can have a home free-and-clear plus retirement fully funded instead.

That trade-off doesn't make any financial sense.

Sure, I'm a huge fan of education. I believe in the importance of the college experience as a valuable launch-pad into adulthood, but the cost of college shouldn't be so outrageously high that you're literally making a decision between higher education versus a debt free home plus retirement security.

That's outrageous.

Adding insult to injury, college education is the only business that demands all your financial statements before deciding what they're going to charge you. Just imagine buying a car from a dealer who demands full disclosure of every detail of your net worth and personal finances including tax statements before deciding how much he should charge you for the car.

Absurd? Yes! But that's exactly how the college business operates.

Even worse, the system is rigged against most of my readers.

For example, some quality schools are running $70K per year for all-in costs meaning $280K total if you child graduates in 4 years, and $350K if s/he takes 5 years. Even if you round that number down to $250K to be conservative that's still $500K total if you have 2 kids. That's a big nut to swallow for anyone, even if you're reasonably successful. Only the very wealthy can afford to be cavalier about such a large number, and only the very poor qualify for enough financial aid that they don't have to worry about how to pay for college.

So the purpose of this podcast is to help you figure out how to afford the high cost of college when you don't qualify for need-based financial aid. It's a tremendously important subject because paying for college is one of the biggest financial issues you'll face – right up there with buying a home and funding retirement.

I invited two experts in back-to-back interviews that will share two different perspectives on how to pay for college. The goal of this podcast episode is to provide you with a complete education in college affordability for the affluent all in one podcast episode.

My first guest is Brad Baldridge, a CFP specializing in helping middle and upper-middle class families afford college.

My second guest is Jocelyn Paonita, who secured over $126,000 in scholarships to cover her tuition and graduate debt free. She will teach her complete system for getting enough scholarships to pay for college without ever borrowing a dime.

In this episode you'll discover:

* The six different categories of schools and the financial advantages and disadvantages of each.

* Why college is just a business, like any other, so you can properly assess the costs vs. benefits of different school offers.

* How you can attend certain out-of-state schools at in-state tuition rates.

* Why you have a better chance at scoring merit aid at a private school than a state school.

* The critical difference between merit and need-based aid.

* How your children can get free scholarship money even when they're not academic or athletic rockstars.

* A behind-the-scenes peek at colleges marketing strategies so you don't fall for their tricks.

* How the bottom 25% of an incoming class pays for the top 25%  of students.

* The four dimensions of paying for college.

* Brad's favorite strategies for reducing the burden of paying for college, including business and tax strategies.

* How to figure out your Expected Family Contribution (EFC)

* What you need to know about FAFSA and the CSS Profile.

* Why you must complete the FAFSA and CSS Profile even if you think you'll never qualify for need-based aid.

* How to use net price calculators that colleges must provide (and their downsides).

The business entrepreneur path to financial freedom has many advantages over real estate and paper assets.

* You can grow your wealth faster in business than any other asset class.

* You can achieve personal freedom, the real goal of financial freedom, long before you're actually rich because your passive income is not connected to equity. It's driven by business systems instead.

* You get personal benefits besides just financial wealth including purpose, community, contribution, and a creative outlet.

Unfortunately, the business asset class is the least-discussed path to wealth, even though most people who make the Forbes 400 list are there because of it. The same is true for people profiled in The Millionaire Next Door.

If you want financial independence earlier than old or you need to catch-up on retirement savings because you don't have enough, then this episode is for you.

However, there are risks to growing a business as well. That's why it's important to choose the right business model congruent with your values. The right model will support your success, but the wrong model will leave you feeling stressed and resentful.

To show you how fulfilling business entrepreneurship can be, along with the upsides and downsides, I invited Brennan Dunn, owner of Double Your Freelancing, to the podcast.

Brennan has a long entrepreneurial success streak. He dropped out of college, freelanced as a web designer, started his own agency, then started a SaaS (software-as-a-service) business, and now has a very satisfying lifestyle business.

While Brennan loves his business now, he had to learn many lessons the hard way. These lessons are typical of what most entrepreneurs go through, which is why it's better to learn vicariously through Brennan's experience rather than reinvent the wheel.

So if you've been interested in starting your own business, or you want to accelerate your journey to financial freedom, then this podcast is for you.

In this episode you'll discover:

* How Brennan went from being a college dropout to having a six-figure business, to ultimately having two seven-figure businesses.

* What drives Brennan's entrepreneurial streak.

* The idea of community and why it's so important to a fulfilling life.

* Why being an employee wasn't satisfying to Brennan,

How will you define yourself after you retire?

Who are you without your career?

The unfortunate truth is most people attach their self-definition to their professional life.

This results in unexpected emotional difficulty when you achieve financial independence or retire early.

You're not alone in this mistake. I did the exact same thing. It's a common problem.

I incorrectly believed retiring early meant living the “pro-leisure circuit” with endless vacations and eternal bliss – no worries in the world.

I wish life was that easy, but that's not how it works.

Tess Vigeland is the author of Leap and former host of NPR's Marketplace Money. She lived her dream career for 20+ years, never giving thought to what might be next because she never expected to quit.

When it came time to take the leap she was completely unprepared.

Tess and I both learned the hard way what stands on the other side of career and share our research and experience so you don't make the same mistake. It doesn't have to be a problem as long as you know what to expect and how to prepare for it.

In this interview we give you the inside scoop from direct experience so you can avoid the obvious potholes we stepped into.

I've coached many of my clients through the process of financial independence, and I went through it myself. Figuring out who you are and what you stand for when your career isn't in the picture is key to your fulfillment, and the sooner you do it the happier you'll be.

In this episode you'll discover:

* How to deal with your fear of risk and uncertainty following career change.

* How to define yourself without a career.

* What will be your new success metric, and why does it matter?

* The three common signs that tell you when it's time to leave your job or make a change.

* Why your career must honor your values, and what happens when it doesn't.

* The insidiously dangerous role of self-doubt when your career ends, and how to stop it.

* How to find balance when you're personally identified with your work.

* How Tess coped with losing her identity as a celebrity public figure.

* The critically important role community plays in your life, and how to find it after financial independence.

* How career gives you a sense of purpose, and where to find that purpose after you achieve financial independence.

* How to overcome the challenge of creating your life from a blank canvas.

* The key differences that separate financial independence from simply making a career change

* The one mistake you must avoid after your leap.

* What the “adjacent other” means for your career.

* Several case studies, including how one woman left corporate America and reinvented her career.

* How to deal with the expected fallout from family and friends.

Your spouse can make or break you financially.

That's no surprise, given how money is one of the leading causes of divorce.

But there is much more to the relationship and money question than just divorce or marital bliss.

Unless you plan on being single forever, this is an issue that should concern you. It's important to know how to talk about money with your spouse, and it's equally important to be on the same financial page.

Just think about all the important financial goals you share with your spouse and how they affect the outcome of your lives together:

* Will you retire early by building a lifestyle focused on saving and delayed gratification?

* What house will you buy and how much of your income will you dedicate to a mortgage?

* Is your car for self-image, or is it just transportation?

* Do you like to camp on vacation or stay in 5 star hotels?

* Would you prefer to spend that money on an investment property so you can retire faster?

All of these decisions have long-term financial implications, and they're much easier to accomplish when you and your spouse are working together as a team.

In addition, there is much more to this than just financial goals. Gone are the days where men are the sole breadwinners in society. Women are climbing the ranks, and that means learning how to overcome the traditional gender roles society has imposed on us for so long. This can cause marital stress if it isn't handled properly.

That's why I asked Farnoosh Torabi on as a guest for this episode of the Financial Mentor Podcast. Being a female breadwinner, and the author of When She Makes More: The Truth About Navigating Love and Life for a New Generation of Women, Farnoosh is able to share many valuable insights gained from her personal life and research from the book.

Listen in as we address the complex financial issues couples face today, and get her best tips and solutions to ensure your relationship is a happy and thriving one.

In this episode you'll discover:

* How to talk about money with your significant other in a constructive way.

* The importance of understanding your own money story, as well as your spouse's.

* Why you need to be open and transparent about your financial habits.

* How to foster a supportive dynamic in your relationship, regardless of who has the bigger salary.

* How women and men can embrace female breadwinners in the family.

* The critical importance of making your financial values conscious.

* What to do when you're in relationship with your financial opposite.

* Why it's actually not a bad thing to have differing financial viewpoints in a relationship.

* Why you might want to think about bringing in a third party to mediate financial discussions.

* The surprising research showing how women are becoming more successful than men.

* How you can overcome the unconscious gender biases of our society.

* How you can make sure you're on the same financial page as your spouse.

* Why disagreements about money aren't always about dollars and cents – money issues go deeper than that.

* Different techniques for how couples with dispar...

Everyone wants to know how to get rich, but few ever get there.

The answer is surprisingly simple, but most people seem to have a passion for making things needlessly complicated.

The first step to achieving financial success is you need a rock solid financial foundation. Otherwise, you could have all the money in the world, but no clue on how you should manage it.

A poor financial foundation will cause you to get lost in debt, going through the motions in life without a clear goal, or ignorant as to how you can effectively use every dollar passing through your hands as a tool to build wealth.

That's why I was excited to interview J.D. Roth, founder of Get Rich Slowly. In this podcast, he shares how bad financial habits and early mistakes put him in credit card debt at the beginning, and how good financial habits turned everything around so that he achieved financial independence at an early age.

You can do the same.

These lessons are simple and timeless, and are consistent with my teachings in both Step 1 and Step 2 of the 7 Steps to 7 Figures course I offer. They can work for you also.

Starting off on the right financial foot is crucial if you want to build wealth. You need to learn how to avoid consumer debt and manage your money like a business, because no one cares more about your money than you do.

In this episode you will discover:

* The importance of mastering your emotions when it comes to finances.

* How to manage your money as if it were a business.

* How you can pay off your debt using the snowball method.

* Why we need to define our own personal mission statement and goals.

* The critical role that living consciously plays in achieving financial freedom.

* How focusing on generating cash flow, and avoiding debt, will bring you financial success.

* How boosting your savings rate can accelerate the time it takes to reach your objectives.

* How you can retire quickly, even on a lower salary.

* Why you should align your spending with your values.

* Why tracking your numbers is essential to building wealth.

* Why J.D. believes there's no one set path to paying off debt.

* How goals can set context for your decisions and guide you toward financial success.

* Why you should focus on being proactive with your finances, as opposed to reactive.

* Why educating yourself is the best thing you can do to improve your financial situation.

* How to take responsibility for your situation, even if factors are outside of your control.

* The reason you shouldn't be aiming for wealth for the sake of having money.

* How J.D. used several types of leverage to build Get Rich Slowly.

* How J.D. came to the conclusion it was time to sell the blog and start enjoying life and the wealth he had accumulated.

* J.D.'s definition of financial independence – is it different from ...

Wealth is math.

That's bad news for math phobics, but it's great news for the rest of us because it means there are rules and science behind how wealth building works. It isn't random luck.

In Episode 19 of the Financial Mentor podcast we'll explore the most essential math principle to wealth building – the expected value formula.

This essential principle eludes most people because we inherently think in terms of probabilities – the likelihood of something occurring. It could be an investment going up or a business going bust. Either way, you most likely think in terms of the probability of the event occurring, and that is unfortunate.

Why? Because wealth is built according to expectancy – which is probability times payoff.

It's an entirely different way of thinking that produces surprising results. Discover how expectancy will literally determine the financial outcome of your life, and how you can use this uncommon knowledge to make smarter, more profitable investment decisions.

In this episode you will discover:

* How a career as a professional poker player shaped Billy's view on traditional investing.

* The difference between gambling and investing.

* Why variance is a dangerously misleading measure of risk that can cost you a fortune.

* The concept of “edge” in investing or “competitive advantage” in business.

* How increasing sample size can lower risk, but only if you have positive expectancy.

* The essential difference between asset wealth and cash flow wealth.

* Why EV, or the expected value formula, permeates all forms of wealth building – paper assets, business, and real estate.

* How to use the expected value formula for every business and financial decision you'll make.

* The many dimensions to risk management revealed by a deep understanding of expectancy.

* How to make more by risking less.

* How diversification, when done incorrectly, can become di-worse-ification.

* How the pursuit of safety can put you at even greater risk.

* Why all expectancies are not created equal, and how that spells opportunity for you.

* The dangerous illusion of results, and why expectancy is actually more important.

* How recency bias causes you to make losing investments.

* The two essential skills you must develop to invest with greater profit and reliability.

* How to use risk management skills to raise your expectancy.

* The right (and wrong) time to avoid analysis-paralysis in the due diligence process and just pull the trigger.

* How to test any investment using the “cocktail napkin test”.

* How missing a positive EV investment is mathematically equivalent to negative EV, and avoiding negative EV is mathematically equivalent to positive EV.

* Why insurance makes good business sense, even when it has a negative expected value.

* The right and wrong way to use insurance to manage negative expectancy risk.

* and much more….

Resources and Links Mentioned in this Session Include:

* Billy's web site is ForeverJobless.com

* Billy's poker web site is BlueFirePoker.com

* My financial coaching information

Success is about people first.

If it was just about how-to's then we would all be thin, rich, and happy because all the knowledge you need to attain anything you want in life already exists. You just have to learn it and implement it.

But it doesn't work that way. You aren't a perfect, rational computer.

You don't just process information, make plans, and produce results in a logical, perfect way because you are an emotional human being. Your emotions and beliefs are a filter that either serves you in achieving your goals, or they hurt you.

I overlooked this essential reality in my early years of coaching and made the same mistake nearly all experts make. I believed that if I just showed people how to do something that they would go out and implement it to produce the same results I did.

BOY, WAS I WRONG!!!

There is much more to achieving success than just how-to's. And there is a lot more to teaching success than just dispensing how-to information.

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There's a second layer of knowledge explaining how humans work that you must understand if you want to  break through your limiting beliefs and rise to new levels of achievement with the least friction and effort possible.

This knowledge is critical to your success…

In this episode you will discover:

* Why how-to's are not enough to succeed.

* The common, yet critical, mistake nearly all self-help gurus make.

* How results take care of themselves once your limiting beliefs are removed.

* The surprising role your community plays in achieving success.

* Why financial freedom is ultimately about giving – not getting.

* How any lack of abundance in any area of your life can be traced back to a limiting belief. Amazing!

* An exact step-by-step formula for building your own business today even if you have no experience, no idea, and no money. It really works!

* How to travel for 90 days, do only 4 hours of work, and come home with $100,000 more in the bank than when you left.

* The 3 key words you must know to build an abundant life.

* The 4 essential principles of a lifestyle business so that greater success results in freedom instead of just more work.

* How “The Work” effortlessly removes limiting beliefs without any psychological mumbo-jumbo or needless drama – and, it only takes a few minutes.

* Why limiting beliefs are the cause behind lack of success and how that is actually an empowering reality.

* How to know the exact time when limiting beliefs are THE next required obstacle you must clear to achieve the next level of success.

* and much more….

Resources and Links Mentioned in this Session Include:

* Dane's web site at TheFoundation.Com

* “The Work” by Byron Katie

* My financial coaching information

* The 7 Steps To 7 Figures group coaching curriculum.

* Podcast episode 11 with ...

You've heard it repeated so many times that you no longer question if it is true.

In fact, the career success literature is so overwhelmingly dominated with this dangerous myth that almost nobody disagrees with it.

The only problem is, it's not true!

What is it, you ask?

It's called “the passion hypothesis”. The premise is you should do what you love and the money will follow. If you want to succeed then you should follow your passion.

It's one of those artifacts of conventional wisdom that seems to be right and passes the smell test so it slips under our radar. It is an example of superficial knowledge that appears true but is actually false.

This is not just an idle concept. It is a major source of disillusionment and career dissatisfaction. It also illustrates many concepts taught in Step 3 of my 7 Steps to 7 Figures wealth building curriculum.

In today's podcast were going to unmask this dangerous illusion. We're going to set the record straight by digging deep behind the facade of the passion hypothesis and revealing how a remarkable career and an enviable life of freedom and autonomy are truly built. Surprisingly, it's not what most people believe.

This interview will also introduce a guiding principle behind all teachings on this site – the idea that there is a second layer of knowledge just beyond the superficially obvious first layer that gives you a competitive advantage and helps you build wealth. This second layer of knowledge is based on research and reality – not meaningless platitudes.

Make sure to listen carefully because the truths revealed in this episode will turn conventional wisdom on its head.

In this episode you will discover:

* The important difference between first layer knowledge and second layer knowledge so that you can develop a competitive advantage.

* What the passion hypothesis is and how it works.

* The dangerous premise behind the passion hypothesis that is causing job satisfaction ratings to decline.

* Why career passions are rare, but that doesn't mean you're stuck. There's a smarter way to find passion and fulfillment through work if you just know the proper steps.

* The unexpected connection between career passion, skill mastery, and self-determination theory.

* The 7 traits proven by research to create career satisfaction.

* The surprising reality reversal – It's more important what you can offer your job than what it is offering you.

* Why it's not about finding the right work: It's about working right.

* The important parallel between investing your financial capital into crafting a life you love and investing career capital into work you love.

* Why you should stop focusing on self-promotion in social media and instead focus on producing something worth talking about.

* How skill leads to passion instead of passion being a precursor to skill.

* Why success is hard… by definition. There is always a hard phase so get over it.

* What the “courage culture” is and why you should avoid it.

* The two dimension of commitment that lead to success – what you do before you commit and what you do after. (Hint! They are as different as night and day.)

* The two different types of goals and the diametrically opposite ways you should achieve them.

* Why your most important career strategy is to compound career capital. (Notice the parallel to wealth building and the importance of compounding equity. This is not a coincidence.)

* Discover how the deliberate practice technique is the most efficient and certain path to compounding career capital.