OoM 005： A Financial Plan in One Page with Carl Richards
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Summary
If you ve ever tried to create a financial plan or met with somebody to help you, you understand what a confusing and frustrating process that can be. My guest today, Carl Richards, shares with us how easy it can and should be to finally get on track with your money.
Transcript
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If you've ever tried to create a financial plan or met with somebody to help you, you
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understand what a confusing and frustrating process that can be.
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My guest today, Mr. Carl Richards, shares with us how easy it can and should be to finally
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You live life to the fullest, embrace your fears, and boldly chart your own path.
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When life knocks you down, you get back up one more time, every time.
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You are not easily deterred or defeated, rugged, resilient, strong.
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This is who you will become at the end of the day.
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And after all is said and done, you can call yourself a man.
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He's also the director of investor education for the Band Alliance.
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Carl has been featured on Marketplace Money, Oprah.com, and Forbes.com.
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And in addition, he has become a frequent keynote speaker at financial planning conferences.
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And in fact, he's keynoting in a financial conference that I'm going to be attending later
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Carl is known for his simple financial sketches where he makes complex financial concepts easy
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And those sketches, they serve as the foundation for his first book, The Behavior Gap.
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Simple Ways to Stop Doing Dumb Things with Your Money.
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Carl, hey, I'm so excited to have you on the show today.
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Of course, my background is in financial planning years as well.
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So I think we'll be able to have a good conversation that will serve our audience well.
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So I told you this quickly before we started this interview, but I actually ran across your
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I was in the airport and ran across The Behavior Gap, which is a previous book that you had
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And I flew through that on the plane ride home.
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I can't even remember where I was going, but I was so intrigued and I love the book.
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And now you've got this new book out, The One Page Financial Plan, which from my perspective
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is you're really trying to set out to simplify a financial plan or the financial planning
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Well, there are a lot of things that are really, really important in life that also seem or
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feel really, really complex, but I'm not sure if there's one that's, it seems like right
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now, making good financial decisions has gotten way more important and at the same time, sort
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of way more complex as we get thrown so much more information.
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So my goal here was just to help people cut through, like, what's the stuff that actually
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And, you know, let's just pretend like even if it's only 90% there, 90% is far better than
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You know, 90%, if you got this stuff 90% right, you'd be better than, you know, 100% of your
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So it was to get a really good answer out to people that they could use, even if often
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the search for the best answer causes so many problems that we just don't even get started
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So that was the goal, was to get people started on a really good answer.
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I mean, I think just sometimes we've just got to be real practical.
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At the end of the day, if we can't implement the best advice in the world, what good is
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And so why do you think, I mean, you mentioned financial planning is more important now than
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Well, it feels, well, it doesn't feel like, there's just a reality that the traditional
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structures that so many people have relied on are going away.
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I mean, you know, my, the days of working at the same place for 30 years and retiring happy
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And, you know, we're, so there's this shift, and I'm not saying this is a bad thing, by
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the way, but there's this shift towards personal responsibility, you know, 401k instead of a
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Um, and that shift to personal responsibility is putting more of the burden on each of us
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And at the very same time, we're getting more information thrown at us.
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And it's really becoming hard to navigate between just the noise and even more dramatic,
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like the circus of like the financial pornography network and, and, and actual, you know, valuable
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Why, why do you think, and I've got my, I've got my own ideas about why this is the case.
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Why do you feel like it's becoming more complex?
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Is it just that there's more products or more strategies?
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Is there, what was the reason for the complexity?
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Well, I think it's, well, at least a couple of things, right?
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There's more mutual funds now than there are actual stocks, right?
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More traded mutual funds than there are stocks.
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Um, but there's also just, I think it's a, it's a, it's a symptom of the quote unquote
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I can't remember what the number was, but it's just crazy.
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Like we deal with more information on a daily basis than most people used to see in like
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I can't even remember what that was astounding how much we have to sort through.
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It's everything like any health decision you have to make now suddenly, I mean, have you
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In fact, don't, if you actually want to make a decision, but just for fun, take out a
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prescription medicine out of your cabinet and walk over the computer and type it in a Google
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Like you'll come up, you'll come up for air like three hours later and be so confused
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and so concerned because you'll have read an opinion about every day.
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I mean, that happened to me the other day when I was trying to buy new mountain bike tires.
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But suddenly I've read 15 different opinions and they all sound valid.
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And I don't know what, I mean, you multiply that times a thousand or a million when it comes
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And I think that gives you a sense of why it feels more complex.
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And the thing is like nothing else, like the fundamentals haven't changed in the sense
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Now, not to be confused with easy, but there's only a few things we've got to get right.
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And part of the process is stripping away all the layers of the onion and realizing like,
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even though there's this huge symphony kind of playing this other store, this other song,
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like this matters and this matters and this matters and this matters.
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So it makes you feel like, well, because there's so much, you know, all the financial
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pornography networks and all the news are all saying this stuff, this, this, this, this
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It feels like because there's so many people saying it matters, it must matter.
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Like when you start to get down to the bottom, it's really, really simple.
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Because here's the thing, like you said, there's only a few rules, right?
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I mean, and they're not new, everybody knows them, you know, even in my practice, and I'm
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I've never run across somebody who doesn't really have an understanding of what they
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But why are we so horrible at what we should do, what we know we should do, and then what
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Well, I mean, there's just, there's a whole sort of, you know, there's a whole group of
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characters, if you will, and I'm using that metaphorically.
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I mean, there actually are some actual real live characters, but, but mainly there's this
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sort of group of characters conspiring against us.
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And again, not a conspiracy theory, but there's our own genetics, sort of our own just natural
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tendency as human beings to think that something that's making a lot of noise must be important,
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Like, that's just, you think from a long time ago, right?
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A lion makes a lot of noise, it must be important, you better pay attention, right?
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So you got that piece, and then there's a whole bunch of other stuff genetically, like
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just in terms of our habits and our own, that's why behavioral finance is so important to understand.
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There's a whole bunch of stuff, like if you were to design something to be a bad investor,
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to speak about investing specifically, if you were to design something to be a bad investor,
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So you've got, and we can talk more about that if you want to, but you've got that whole
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element, then you've got the element of, that we already talked about, just the complexity,
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then you've got this issue of just self-control, and this subtle little thing that like, we're
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so competitive these days, and we've replaced like, you know, I don't know, like old forms
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of competition, maybe running out and, you know, killing an elk or something, you know,
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like I'm going way back, but with a real simple shortcut of like, oh, look at that car the neighbors
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And then suddenly we're down this path, and nobody admits to that, like we don't say, oh,
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We'd never say that, but it's really, it's much more subtle than that.
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And so I think there's a whole bunch of reasons, which is why it's so important to get like
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clear about what matters to you, not what matters to your neighbors, your friends, your
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brother-in-law, like what matters to you, and then make your decisions based off that.
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One of the things that I think you're really good at, and I learned this from the behavior
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gap, but also this one-page financial plan is that from my perspective, you're really
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good at cutting through the noise and the clutter and all the chaos that's out there.
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And part of the way that you've done that is through your illustrations, which you're
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kind of known for is those illustrations you do.
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What's been the reception for the illustrations that you've done?
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Yeah, well, first of all, it's really nice of you to say that's the whole goal is to sort
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of like, I didn't know I was doing this, but just the way my brain works, I don't have,
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I like to joke, I don't have a lot of mental RAM, right?
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So I can only deal with one big complex issue at a time.
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So when I'm done dealing with one, like diving into it, trying to understand it, like life
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Like I'm the whole time, all I'm thinking about is, okay, what really matters here?
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Like, how can I get rid of 80% of this information and just store the 20% that mattered?
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And that's what the images are supposed to be is sort of they represent an icon of the
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You know, so when I'm done dealing with some big problem, like somebody called me about,
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you know, whatever, hedge funds, how come they, how come I'm hearing so much about hedge
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Well, I'll dive into it, try to understand it, spend it, you know, a lot of time understanding
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And then at the end, I'm like, okay, how could I wrap this up in one simple icon?
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And, and that's what the images are, are, are for is, and, and they're done with a Sharpie
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I don't know how to use an Adobe Illustrator or a paintbrush or it's a Sharpie.
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And the reception you asked about has been, uh, frankly, just sort of, uh, I don't, I
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don't know what they're astounding, astonishing, surprising because, but it's a lesson and it's
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And I hope more of us in the financial planning space can learn.
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People are begging for us to make this simpler.
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Like, please stop with all your fancy language and please, like people don't know, like you
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can't, like I've watched financial planners and journalists.
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Say things like, you know, they're trying to explain risk and they're getting blank looks.
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And so they try to fix it by using the word, oh, you, you know what I mean?
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People don't, this isn't complex to people because they're stupid, right?
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There's no way it's complex because we're all busy and we have other areas of our lives
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and we're, we don't have any more room in our heads for options.
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Like I, I almost had a, a, a, a mental breakdown at the veterinarian.
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And I write about this in the book when I, yeah, I went in to get my dog, you know, like
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he was having some stomach problems and I'll spare you the details on how I knew he was
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having stomach problems, but he was, I took him to the vet and, you know, I came back
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And I, I came back to pick him up and she, she sat me down and she said, okay, you have
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And I'm not, I'm, I'm like most of your listeners probably like we're all busy.
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Like if you have more than, if you have a single kid, even if you don't have a kid,
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you're really busy, but if you have kids, you know, you're busy, you're trying to figure
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And the vet says, you have three options and I could feel my head about to explode.
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So I actually told her, I was like, no, no, no, no, no, no, no.
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So that's again, like we need to understand, like I'm not dumb.
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Like I could have sat down and researched those three options.
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I could have gone on the internet and gone down that rabbit hole for a week.
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I could have, you know, I could have figured this out if I went to, so it's the same with
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Like it's not, people don't understand this, but not because they're dumb, it's because
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So I'm begging people like, please make this simpler because if they'll respond to a kid
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from the hills in Utah using a Sharpie and a Fujitsu scanner, it's pretty, it's pretty
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Well, and I think we become just in financial planning community as a whole, I think what
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happens is we become our own worst enemies because we want to sound smart, right?
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I mean, it's an ego thing, I think is what it comes down to.
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We want to sound sophisticated and knowledgeable and an expert in our field and it comes across
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And then we become our own worst enemies because our clients aren't implementing the confusing
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There's also a more subtle element, which is just, you know, to give us all credit,
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there's also this more subtle element and it's true in any field, right?
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As you become more and more knowledgeable and more and more experienced in the field, you
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often tend to get opportunities to deal with more and more complex situations.
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And you think, I mean, look at any attorney, like how many attorneys have you gone to that
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seem to be more interested in crafting a monument to themselves than a document to get the work
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And it's just a slippery, it's not like, yeah, there's this piece of it that's ego.
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There might be this piece of it in the financial services industry that's salesman, you know,
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But there's also this, just this piece that we have to protect against.
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It's just sort of this natural evolution of our experience and field.
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And so I think either way, whatever it is, whether it's just a good intention, you know,
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sort of subtle shift over time, we just need to protect against realizing that when it comes
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to money, at least, I know this is true of other fields, but when it comes to money, I
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don't think we can make this too simple because the real answers, the simplest answer is almost
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Like, if it's complex, you're not doing something right.
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Like, I always tell my kids this, my kids rock climb a lot.
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They, when they're on a climb that's a lot easier than they're capable of, and they're
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having a hard time, I keep having to remind them and remind myself too, like, that just means
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Like, there's a hold that you're not seeing quite yet.
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And when they find it, they're like, oh, yeah, there it is.
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You're going to break something if you force it.
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Just maybe back away a little bit, come at it from a different angle, because there's
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got to be a simple answer right around the corner.
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Well, and there's that quote that simplicity is the ultimate sophistication, right?
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And as long as you understand the difference between simplistic and basic, and elegant
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Like, if there's somebody listening and they're thinking, okay, yeah, I get that I'm going
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to turn to a financial advisor, I'm going to turn to whoever it may be for some additional
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How do you find the balance between personal accountability and responsibility, and then just
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pawning all your decisions off on somebody else?
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So the goal, I think, at least in my mind, if you're going to work with a financial planner
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or a financial advisor, the goal isn't necessarily to pawn all those decisions.
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The goal is to have a really good co-pilot, right?
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Like, it's still, what matters most is, like, your own values.
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And then the job of a good financial planner is to then help you go find the tools to populate
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Like, okay, I'll go look at all, based on, the goal of a good financial planner is to
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Based on everything you've told me, here's what you should do.
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A doctor doesn't say, I mean, normally, like, at least not an emergency medicine doctor, right?
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Let me go home and research them and come back and tell me what you want to do.
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They say, here's what we're going to do, right?
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Like, so I think that's the goal of a good, and your job is to make sure that you feel
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If you don't feel fully diagnosed, you've got to make a decision.
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And should you say, I'll tell you a quick experience.
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My wife and I went in to get some legal work done, kind of basic estate planning, not like
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a, not like mansion estate planning, just basic stuff, the wills, all that stuff.
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And the attorney, who was a friend of ours, had us fill out this long questionnaire.
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Like, we had to sit in the foyer and fill out a questionnaire like we were at a doctor.
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We went in a few minutes later, and he said, okay, I've reviewed this.
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And based on this, there's two ways you could go.
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And my wife interrupted him and said, hey, listen, and she was mad.
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She said, listen, I didn't come here to have you tell me two different options so I could
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I came here for you to ask me enough questions to get to know our situation and what we wanted
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to do well enough, which you have not done, so that you could tell us what to do.
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That's what we're paying for, is you telling us what to do.
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And of course, you know, like that meeting ended relatively quickly.
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So I think if you're in a situation where you have somebody, a financial advisor, you
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Do you care enough to have that conversation, or do you just need to find somebody new?
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And if you care enough to have that conversation, tell them.
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Like, so your job is to make sure you feel thoroughly diagnosed so you can implement the
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Well, so you talk a lot about in the book, a big majority of, I think, even the first
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section, you talk about finding out why money's important to you, finding out about your values.
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Like, how do you find out what's important to you?
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Because I think there's a lot of things we might think that are important, that at the
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end of the day, we have some underlying things that are more important than what we think.
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And that's that framework for the first chapter in the book.
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Um, I try to give people this sort of framework for having that conversation.
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And the conversation just stems around one question that you sort of either ask yourself
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or even more importantly, have somebody else ask you, walk you through.
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So, um, that, and that question simply, and it sounds funny, you got to read the book to
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understand it, but why is money important to you?
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That's the question you're going to ask yourself.
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But I always like to point out to people, like, it's the, it's the process of comparing
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what you said was important to you with what you're spending your money and your time on.
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Like, I love that old saying that the checkbook and the calendar never lie.
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I mean, I do care, but I don't really care what you tell me is important to you.
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Let me see how you're spending your money and your time and I'll tell you what's important
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And so then what happens is you often are going to uncover that what you said was important
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to you is not matching up with what you're spending your money and your time.
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And, and here's the really critical part of this process, right?
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I'm, I'm imagining sort of, if you're looking at a piece of paper, like two boxes, right?
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Here's what I said was important to me and here's how I'm spending my money and my time.
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Just, just, I want your new favorite word to be, your new favorite phrase to be, isn't
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Just look at the gap and say, isn't that interesting?
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And so now the question is to start getting those things aligned.
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It may be that what you said was important to you.
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Or it may be that how you're spending your money and your time is out of, out of alignment.
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And so, and it's always going to be out of alignment.
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So slowly over time, you want to try and work at getting those aligned.
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What you said was important to you and how you spend your money and your time.
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So you're just going to keep, you got to be committed to the process, not committed to
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So what are some of the reasons that we do get out of alignment?
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Why, why is it that we have these underlying or underpinning values and then we are spending
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money and time on, on things that we don't truly value at the end of the day?
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And we just, I think we need to give ourselves a little bit of a break and just say, hey,
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We're just going to, but what's, what's really powerful is just getting to the point where
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Not judging it, but just at least noticing it and saying something like, oh, well, that's
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I just spent money on this and yet I'm saying no to that.
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And so that's the process, but you know, it's a little bit longer answer than just
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I mean, first of all, we may have never had the conversation to really take the time to
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We're just running through life so fast, you know, we're essentially running through
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And, and, and, and that's, that's, that's, that's hard not to do.
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I mean, it's just sort of what everybody's doing.
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We also could be just so addicted to the urgent that we don't have any time to think
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about the important and, and that's important too.
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And then, you know, we may just be, and this sounds a little harsher than I mean it, but
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It's, it's so subtle to be like, you know, then we wake up one day and go, you know what?
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Buying more unnecessary plastic crap is not making me any happier.
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And, and, and it turns out the research on happiness tells us that the stuff that actually
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You can also have pretty basic, like an evening walk with your wife.
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It's a massive, a little bit of time with your kids.
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When's the last time your kids cared where they were when they spent time with you?
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You want an interesting experience after, you know, 12 months, ask your kids what their
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I mean, yeah, it's, it's, go ahead, go ahead, sorry.
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I mean, we went to France one year just because it happened to work out.
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And at the end of the year, I asked my nine-year-old daughter what her favorite thing was.
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And she was like, hey, remember that time that we were out in the backyard and we were collecting
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And I was like, wait, wait, we went to France this year.
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We actually do that every night at the dinner table.
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I asked my kids, what was your favorite part of the day?
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And it's always intriguing to hear their answers because it's, yeah, it's, it's not what money
00:25:01.560
It's all about just spending time together or just some small experience that they really
00:25:07.200
So I think that's how we get a little out of alignment is we just, we may have never been
00:25:11.320
there in the first place, but then we often forget and that's, that's being human.
00:25:14.980
And we just need to create a system for reminding ourselves.
00:25:19.380
So the premise of the book, one page financial plan, obviously the premise of the book is
00:25:26.540
I know that there's people, whether it's advisors or investors that are thinking in
00:25:33.620
But I don't see that being done because we're trained to believe that a financial plan is
00:25:37.720
this, you know, thick three ring binder and it's got, you know, all kinds of different
00:25:42.180
reports, Monte Carlo simulations and all of that fun stuff in there.
00:25:46.460
So my question is, can it really be done and what does it look like?
00:25:50.640
And, and again, it's, uh, you know, look the, it's true.
00:25:54.140
There's a lot more research that goes into all the decisions you're making, you know, like
00:25:58.220
there's going to be 20 pages worth of stuff about your life insurance and there's going
00:26:01.800
to be a mortgage document and there's, you know, and, and, and so the, the idea behind
00:26:08.600
the one page was if I've, I've found people get so committed to the plan that they forget
00:26:20.220
And that leads to a lot of disappointments because I can't tell you how many two inch
00:26:25.300
thick financial plans I've seen used as doorstops, right?
00:26:28.600
Like you did, like, cause everybody knows the moment you walk out the door, that plan
00:26:33.340
is wrong because it's full of assumptions, right?
00:26:37.280
It's full of assumptions that are clearly going to be off.
00:26:41.440
Like every pilot I know, every pilot I've ever asked, do you create a flight plan?
00:26:45.980
Every one of them says, yes, pretty detailed flight plan.
00:26:49.160
And then when you say, how many times has the flight gone exactly according to plan?
00:26:53.700
And every single time the answer is zero, right?
00:26:56.720
Like you take off, the wind was a little different than you thought, you know, whatever.
00:27:02.340
So the idea of the one page financial plan is sort of the, it's, it's kind of the picture
00:27:08.640
It doesn't mean that there's not a 20 page instruction manual inside the box.
00:27:14.520
Like when you're putting together a kid's toy, the 60 page manual may be helpful, but what's
00:27:19.120
most helpful to, in fact, it's incredibly helpful.
00:27:21.560
What's most helpful to me though, is the picture on the front of the box, because it tells me
00:27:28.880
So on the one page, like on my wife and I's, our one page financial plan, which I have here
00:27:34.600
in the office, it just simply says, spend time outside with our kids and serve in the
00:27:41.880
That's, that's our most important, that's why we're doing everything else.
00:27:45.420
But underneath it, it just has three things right now.
00:27:48.040
And these things change, which is why I think one page with a Sharpie is important.
00:27:54.500
It's not like you carved it out of stone, right?
00:27:58.540
And, and it, it, it, it leads us to, it, it suggests to the mind that this is a process
00:28:07.420
Our three things are right now, fully fund our retirement accounts.
00:28:11.040
That's one of our goals, put money away each year for the kid's education and save money
00:28:18.640
Now, 10 years ago or five years ago, or even three years ago, those, those were different.
00:28:25.720
And I bet they'll be the same for another couple of years.
00:28:33.340
Now is the underlying stuff on our life insurance that are, you know, do we still have the other?
00:28:38.060
Yes, of course we still have the other documents.
00:28:39.760
So don't, don't get confused in terms of, I don't think all that other stuff can be reduced
00:28:45.580
But to me, this is the document that I'm committed to.
00:28:49.860
It's the one I'm committed to changing and updating and looking at.
00:28:52.760
So whenever a major decision, hey, should I invest in that business?
00:28:58.260
My wife just says, hey, pull out that one page plan you have on the desk and tell me what
00:29:03.100
And I tell her and she goes, oh, sounds like we shouldn't invest in that business.
00:29:07.440
Yeah, it's a good, it's a good measuring stick, right?
00:29:10.720
Against some of the decisions that you're going to be making in your life.
00:29:15.100
To ground you when you're thinking of doing something stupid.
00:29:20.080
So you talk a lot about in the book, not, not a whole lot of need for precision when
00:29:26.020
And I think there's a lot of us who tend to be more analytical.
00:29:28.500
And how do you come to come to terms or come to grasp with, hey, maybe you don't need to
00:29:33.860
be as precise and get this paralysis by analysis and just focus on getting the basics, the simplistic
00:29:46.640
Because this false sense of precision we all have in the financial planning industry is
00:29:53.540
Because at the end of the day, these are guesses.
00:29:57.860
And I think calling them that, again, suggests to sort of the mind and ourselves, like it
00:30:05.620
Like, what are your utility bills going to be 20 years from now?
00:30:09.520
Like, we're going to make the best guess we can.
00:30:11.760
I mean, we've got to put a date of death in your financial plan.
00:30:15.420
Like, tell me how anybody's precise about that.
00:30:27.220
What's the best guess of future interest rates?
00:30:29.360
It turns out the best indication of future interest rates are today's rates.
00:30:35.240
So like, what are stock market returns going to be?
00:30:37.500
Well, let's use the last 84 years as a guide, right?
00:30:39.920
Like, I don't know how to be any better than the weighty evidence of history.
00:30:43.580
You know, like, we don't need to get all tied up in this.
00:30:45.800
Let's make the best guess we can and move forward.
00:30:47.720
Because I run into, I mean, I've got a lot of really, really smart friends.
00:30:53.180
And all of them, I mean, the problem we all have often is we want the best answer.
00:31:01.260
And we don't realize that, like, look, a good answer might be good enough.
00:31:05.500
So is guessing, in your opinion, then, just us trying to get comfortable with the unknown, the future, and the uncertainty of it?
00:31:15.440
I mean, I use that word really, really unparalleled.
00:31:18.220
I love replacing forecast, you know, analysis with guess.
00:31:22.300
And just thinking, now, that doesn't mean we don't need to guess.
00:31:26.940
And it doesn't mean we should make the best guess we can.
00:31:29.100
But it means we should be committed to the process of guessing, realizing we're going to be wrong, updating the guess, realizing we're going to be wrong, updating the guess.
00:31:39.780
I mean, if you want to just double check what I'm saying, make somebody, you've got to have somebody hold you accountable.
00:31:54.620
And if you can find something, like, in your journal or anything, and tell me what you thought you would be doing today.
00:32:01.700
Like, or in other words, like, right now, why don't you write down what you think you're going to be doing 10 years from now?
00:32:08.480
Based on your experience the last 10 years, how likely do you think that's going to turn?
00:32:12.280
I mean, I had no idea what I would be doing 10 years ago.
00:32:17.680
And that's what makes it exciting, too, though, right?
00:32:21.300
Like, sometimes we get so scared about it, like, the uncertainty is just overwhelming.
00:32:25.100
I think the cool part is if we learn to accept it as what it is, which is life, it's the beautiful piece of life.
00:32:31.660
Like, does that mean we sit in a cave and meditate?
00:32:38.440
Let's move with all of our intention and energy towards that guess.
00:32:43.200
And then let's realize, like, let's not be too terribly disappointed when the guess changes.
00:32:49.240
Turns out I didn't want that as much as I thought.
00:32:55.800
I think that's a beautiful, wonderful way to live life.
00:33:01.700
You know, what's interesting is I had a conversation.
00:33:03.520
I was on a podcast being interviewed earlier in the week, and the person interviewing me
00:33:08.600
said something along the lines of, you know, what are you going to be doing in five years?
00:33:12.980
And my first and knee-jerk reaction was, I don't know.
00:33:16.960
And I think it kind of took her by surprise a little bit because she anticipated, I'd say,
00:33:21.000
some great plan with my business or whatever it may be.
00:33:23.260
But I think when we allow ourselves freedom to explore different options and different avenues
00:33:28.400
and don't pigeonhole ourselves into a plan, it allows us to explore things that maybe we've
00:33:34.580
always wanted to but never had permission to do it.
00:33:38.480
Yeah, I really, I mean, I've got a mentor who's just an amazing guy.
00:33:49.360
The second one is, actually I can't, show up, embrace uncertainty, and ask yourself what
00:33:59.980
And I think if we live our lives that way, like right now I kind of have a sense of what's
00:34:05.900
Like I know kind of what the next project is after the book comes out, and I want to head
00:34:10.720
that direction, and I'm just going to say what's to be done next.
00:34:16.340
I mean, I had this idea has been rattling around in my head for a couple of years, but
00:34:22.480
But it's becoming more and more clear, like, and some things are falling into place.
00:34:25.980
And I'm like, oh, okay, yeah, I guess that is what is to be done next.
00:34:29.000
And then I'll feel that for a while, and it will be great.
00:34:33.220
And then I'll wake up and say, okay, I don't really know, but what is to be done next?
00:34:37.260
And I think if we show up that way, really cool things happen.
00:34:41.460
And we let go of the, oh, but what if, what if, what if?
00:34:49.840
So one of the things you said a while back is you said that if you were to create a bad
00:34:58.680
So I've got some of my own ideas on some of the pitfalls or things that we fall into
00:35:06.260
When you say that, what are some of the things that people are doing to become bad investors?
00:35:12.900
And I don't think you have to do anything to become one.
00:35:22.720
Like you, we take, we have a tendency to take the recent past and project it indefinitely
00:35:28.460
Like we, we've had a terrible snow year in Utah.
00:35:30.840
And so for sure, the next 10 years are going to be terrible.
00:35:38.360
But, but I just know that we take the recent past.
00:35:44.600
So I, therefore, for sure, I'm going to get a bonus next year.
00:35:48.700
In fact, I'm so sure of it that I can buy this new house that I can only afford if I
00:35:54.280
get that bonus, because I know I'm going to get it, right?
00:35:58.620
Like we'd never say it that way, but we're doing that.
00:36:06.460
Like right now, it's so crazy to hear how excited everybody is about real estate again.
00:36:13.500
Oh my gosh, it was just five years ago that it was never.
00:36:16.680
I mean, it was just, yeah, five, six, seven years ago.
00:36:19.100
You would never buy real estate again, like ever.
00:36:25.500
I keep a financial pornography file and I, I, I cut out quotes of people.
00:36:29.920
I have, I have a whole file full of quotes saying, I will never invest in the stock market
00:36:36.380
From, and then I, I, I know those people are excited again.
00:36:40.300
In fact, they're not only excited, they're getting over exuberant.
00:36:44.080
Because everybody else is around us and the recent past has changed.
00:36:51.960
We naturally want more of the things that give us security or pleasure.
00:36:56.600
And we want to get away from things that cause us pain as fast as possible.
00:37:04.820
Like that would be getting away from the lion, but it's not good when it comes to investing.
00:37:09.380
What that leads to investing, can you imagine going to buy a new car and you show up, like
00:37:16.100
And you show up and the dealer says, great news, Carl.
00:37:28.400
But we do that in the equity markets all the time, the stock market.
00:37:34.280
And it's just, it's just because it's, it's kept us alive as a species, but it works against
00:37:43.080
So one of the thing, I guess three of the things that I see a lot is people trying to
00:37:46.400
time the market, when to get in, when to get out.
00:37:48.920
They also look at, you know, what's done well over the past year or five years or 10 years
00:37:53.480
and assume that it's going to continue to do well.
00:37:55.100
And then the third thing I see a lot of is people picking individual stocks, not because
00:37:59.520
of some knowledge they have, but just because they like their iPads, they want to buy Apple
00:38:08.760
Ask your, ask your favorite friend with his BlackBerry, how well that goes.
00:38:16.020
Like there, but there's, you know, the, the, the world is littered with the exact opposite,
00:38:20.680
you know, um, of, of things just because it, so yeah.
00:38:26.240
That last one's a misunderstanding of Peter Lynch's book.
00:38:29.520
Um, cause he always, you know, he talked about knowing, owning what you know, what you own
00:38:36.260
But that, and, and Buffett's talked about the same thing.
00:38:39.000
And the dilemma of course, is that for those guys, that was a starting point, you know,
00:38:45.540
Like it piqued his interest that he went to Dunkin Donuts every morning and he thought,
00:38:51.340
And, and so the question I have for you, if you're buying something based on like the iPad
00:38:57.560
Have you even pulled up, I mean, you shouldn't be buying individual stocks anyway.
00:39:04.040
So it's not like if you can answer yes to this, you should feel good about yourself.
00:39:06.880
But have you pulled up their Apple's annual report, right?
00:39:10.240
And 99% of the people that buy Apple stock because their iPad is so awesome, haven't even
00:39:16.380
So to say that you think the company's good because you love the iPad is just totally crazy.
00:39:22.280
Well, you know what I think is interesting is, is that's exciting.
00:39:25.740
Like it's exciting to do that, or it's exciting to say, I'm an investor, you know, and do those
00:39:33.560
You say that, I think I read in the books or maybe even saw an illustration that you
00:39:38.880
compared successful investing to watching grass grow.
00:39:45.760
Tell me why successful investing should be boring.
00:39:47.820
Yeah, I think when you understand, when you understand the difference between speculation
00:39:57.800
and entertainment and investing, then you, then you get an idea, right?
00:40:04.720
Investing is about buying something at a, investing is about buying something at a low price
00:40:16.920
I'm using those words very carefully, low price, expecting it to go up in value so that
00:40:21.260
you can sell it sometime way down in the future at a higher price.
00:40:26.680
Speculating is about buying something at a certain price and expecting it to go up or
00:40:34.540
It has very little to do with the underlying value.
00:40:37.620
So when we understand, when we understand that, then we start to sort through like none
00:40:44.520
I mean, all that matters is we buy a broad swath of the world's greatest companies, you
00:40:50.920
know, a very diversified mutual fund, something akin to a low cost index fund, something like
00:41:02.040
Right now you can focus on making the money to put in the investment.
00:41:04.700
I think sometimes we confuse action with prudence.
00:41:09.800
I think sometimes we think, hey, if we make decisions or we're buying and selling and doing
00:41:13.440
all these things, then we're being prudent with our money.
00:41:17.180
Yeah, I think we confuse action with results, right?
00:41:22.960
Well, Carl, this has been such a good interview.
00:41:24.760
We went through a ton of financial information.
00:41:26.820
If those that are listening today want to learn more about you, what you're doing, I know you're
00:41:38.840
And if they want to get the book, how do they get in touch with you and how do they do that?
00:41:42.540
So the best place is to just go to Behavior Gap, behaviorgap.com.
00:41:49.220
And, you know, there's plenty of information there, but people always ask, like, how do I
00:41:54.620
We put out a weekly newsletter, which is just highly curated ideas for people who use money.
00:42:02.340
And we always put links into stuff that I think is interesting and stuff I'm doing.
00:42:06.060
And then the book, of course, One Page Financial Plan is on sale.
00:42:15.300
I mean, it's actually published on Tuesday of next week.
00:42:21.380
I'm a huge fan of local bookstores, but Amazon's open 24 hours a day as well.
00:42:26.800
Well, Carl, we appreciate you being on the show.
00:42:28.720
So glad to have you here and provide all that valuable advice.
00:42:31.860
And we'll make links to the show notes with how you can contact and reach out to Carl.
00:42:35.880
Yeah, you can get the book and how you can get the newsletter.
00:42:38.300
I know I get the newsletter, and I get that every couple of days or whatever it may be.
00:42:47.080
And it's really, really clear that you put a lot of thought into the work you're doing.
00:42:51.260
As always, guys, another amazing episode with an incredible guest.
00:42:55.220
This one was jam-packed with steps that you can take to get your money on track.
00:43:00.720
In talking a bit more with Carl, he has generously agreed to give away two copies of his new book
00:43:05.040
to you, our listeners, The One Page Financial Plan.
00:43:08.340
I've read both of Carl's books, and they are both must-reads if the world of personal finance
00:43:14.520
So in order to qualify for that, all that I ask is you leave us a rating review on iTunes,
00:43:18.260
and then shoot me an email or post on our Facebook page with a screenshot of your review,
00:43:23.220
and you're entered for our drawing on the 28th.
00:43:25.620
The winners, I will mail those copies of the book, The One Page Financial Plan.
00:43:29.760
Keep in mind, guys, that you can find all of the show notes from this episode, including
00:43:33.120
the links and resources mentioned at orderofman.com slash 005.
00:43:37.760
Now, next week, I've got a great interview with a man who is living a life of influence,
00:43:41.900
and he's going to share with us how we can get more of what we want by improving our
00:43:48.060
So make sure you don't miss that by subscribing to the show at orderofman.com slash iTunes.
00:43:52.960
And of course, if you know of any man you think could benefit from the ideas and the
00:43:56.520
strategies we share, please feel free to share.
00:43:59.440
Thanks again for being here today, and I will look forward to being with you next week.
00:44:04.380
Thank you for listening to the Order of Man podcast.
00:44:07.360
If you're ready to take charge of your life and be more of the man you were meant to be,
00:44:11.380
we invite you to join the order at orderofman.com.