S3E8 – Rob Cook – 7 myths of the financial industry

Key Timecodes

• (00:41) – Show intro and background history
• (02:23) – Deeper into his background history and fintech business model
• (04:22) – Understanding his SaaS model
• (05:7) – How much did he charge in this SaaS business
• (06:51) – Understanding the features and benefits of that model
• (09:25) – How about the scalability of that business?
• (11:09) – Does the platform have a trial period?
• (12:07) – What are the money myths within that industry?
• (23:01) – Why life insurance isn’t investing
• (29:47) – Why it’s hard to find those who have achieved financial independence
• (31:35) – A message from the guest
• (42:20) – The worst advice he ever received
• (44:40) – The best advice he ever received
• (49:30) – Guest contacts

Transcription

[00:00:04.090] – Intro

Hey, this is Sean Tepper, the host of Payback Time and Approachable and Transparent podcast on business investing in finance. I’d like to bring our guests to hear authentic stories while giving you actionable takeaways you can use today. Let’s go.  

[00:00:18.850] – Sean

Passive income, life insurance and diversification. We cover all these topics and more as we discuss 7 minutes of finance and investing. My next guest is a certified financial planner who left his job as an advisor to start a tech company that serves the financial industry. This episode flips some of our thoughts on finance on its head. Please welcome Rob Cook.  

[00:00:41.270] – Sean

Rob, welcome to the show.  

[00:00:42.640] – Rob

Thanks, Sean. I appreciate you having me on.  

[00:00:44.320] – Sean

Yeah, thanks for joining me. So why don’t you kick us off and tell us about your background.  

[00:00:48.510] – Rob

Yeah, so I have a really random background. The short answer is now I am a CPA and a CFP. I have my own business doing some financial consulting on the side. But by day I worked as a shareholder in a fintech company trying to go out and change the world. But that all came from years of starting off thinking I was going to be a dentist or an orthodontist in school and then moving into accounting. They got into public accounting and realized this sucks. No one really wants to be an accountant. I really like knowing accounting, but I don’t want to be an accountant. Worked in public accounting at the highest levels in the Bay Area for a couple of years and got some great experience and then transferred into got an opportunity to wealth management. Moved into wealth management at a regional Rea that has been bought up by national Rea. Had some great experience. Worked about three or four years there. Loved the people that I worked with, but realized very quickly that because of my background and some experiences as a kid growing up, I grew up in an entrepreneurial type of family.  

[00:01:43.820] – Rob

My grandfather was a small business owner and family and real estate and different things that I just have a different perspective than the traditional advisor coming into the industry, especially with my CPA background and having worked on what we call private client services. So I started to see this disconnect between what I saw was the way people really created wealth versus what was being propagated. And it was really hard for me, me to kind of marry those two. And eventually I couldn’t do it anymore. And I decided to make this jump to the fintech company because we were solving some of those problems I felt like I was seeing in the industry. And it gave me an opportunity to go out on my own, kind of do things that I felt like was the right way. Helping people as they’re trying to create wealth over time. So that’s who I am. That’s a little bit of my background.  

[00:02:23.210] – Sean

Yeah, I think so. The high level there I like to talk about the fintech a little bit, because that’s my main business model, is the team, and I building Tykr, obviously a fintech, a SaaS software as a service for consumers. But what is your company?  

[00:02:39.240] – Rob

It’s called elements. It’s actually the logo here on my shirt here, elements Financial Planning and Monitoring System. Our entire purpose is to give you a quick elevator speech here. The idea is we’re trying to enable advisers to have the freedom to profitably serve anyone that they want. For a lot of the financial advisory industry, it’s all hooked on this 1980s, 1990s, maybe even early 2000s model of it. You got to give me a bunch of money to manage. You’re going to buy this really expensive insurance policy, but that forces them to only serve a very small demographic. Even though a large chunk of consumers need access to good advice, there’s just no way to do it profitably. Simple example here. When I was a financial advisor, I like I said, I started off working in the Bay Area in public accounting. So I had lots of great contacts amongst the kind of tech space there. And I had a prospective client come to me worth $12 million, but all their net worth was tied up in their Apple stock options and some real estate that they owned and then a little bit in their 401K there at Apple.  

[00:03:39.130] – Rob

But otherwise it would have been a fantastic client. You want to pay me $12,000 a year to do planning for him? So yeah, you maybe twelve grand to do planning free. That’s equivalent of like a one and a half million dollar portfolio. Sure, let me just go get that approved by compliance instead. My compliance department said, no, he’s got to pay you $5,000 for a one time retirement plan that I already knew he didn’t want. Or he’s got to sell half a million dollars of those stock options so you can manage half a million dollars. I thought that was absolutely ridiculous. So Elements is a tool that gives advisors the ability to create scale within their planning solutions so they can create a different service offering that enables them to be able to serve anyone that they want, not just be tied to this AUM type model. So that’s kind of what we do there at Elements.  

[00:04:22.760] – Sean

Got it. I know before that we didn’t tee up Elements, but I want to dive in a little further. Is this like a b to b SAS?  

[00:04:34.010] – Rob

Yeah. We sell predominantly to financial advisors. A lot of those advisors who are looking around and going, this model isn’t quite working like it used to, or a lot of times, honestly, younger, independent, RAA type of advisors who are trying to do things differently than they’ve always been told, you have to do things. And then just for those that are looking down the line and going, hey, consumers are demanding access to great advice. Consumers are demanding a better technological experience. Most of our technology is still built early. Two thousand s and hasn’t been updated. And at least it’s user interface in the last 15 years. We got to have something better. And so that’s who we prominently to, advisors and advisor institutions.  

[00:05:17.370] – Sean

Got it. Before we drill into the features and benefits a little bit, can you tell us what do you charge for this fast product? Is this like $100 to a $300 per month range?  

[00:05:28.400] – Rob

$300 a month product we sell to the advisors, and then advisors can charge whatever they want to their clients. So, like, for example? Correct. I use elements myself in my own financial consulting because I believe that it’s such a wonderful powerful tool to provide clarity to people around their finances that’s designed first and foremost with the client experience in mind. If you want to go with my lowest level option, I call it my inner circle. It’s $20, $20 a month. Dirt cheap. Right. But then there’s other options after that if you want to dive a little deeper and get more access. But yeah, we charge 300 to the advisors on a monthly basis, and then they can charge whatever they want to their clients.  

[00:06:03.190] – Sean

Got it. I figure you’d be in that range from my experience within the SAS world, and I’ve got a lot of b to c and a lot of b to b. And at that b to c level, I found it you want to go like $50 or less per month to make it attractive to the consumer. At the b to b level, especially small businesses I consider financial advisors, they’re running small business attention.  

[00:06:24.370] – Rob

Most of them are. The vast majority of the space is composed of independent we call raas registered investment advisors.  

[00:06:30.330] – Sean

Exactly. And typically at that level, you’re charging between 100 and $300 a month. And then if you start getting in an enterprise world, that’s where you do go that route and serve mutual funds or large financial institutions. That’s when it becomes five figures to six figures per year for contracts. Numbers get really fun at that level. But good to know about the structure of your model. Let’s dive into the features and benefits. What do these RIAs get?  

[00:06:59.270] – Rob

Well, the short answer is they get scalability for a lot of advisors. One of the main reasons why advisors stick to the AUM model is just because it’s really easy to do. Just give me a bunch of money. I’m going to take a little bit off of it. Every single quarter usually is the way they charge for it, and I’m going to manage your money. That’s this perception. That’s why I have an advisor, because they manage your money. Where in all reality, that’s actually not the value proposition for most advisors. One of the money myths that I kind of referenced to in our initial conversations, like, advisors aren’t there to make you rich. They’re not there to manage your money and make it grow a ton. Yeah, a good advisor will do a decent job of keeping with a benchmark, maybe slightly beating it some years and probably being underneath it most other years. But really their job is to preserve and protect that little bit that they’ve got there but to keep you from making bad financial decisions which is the financial planning. And in our business so much of the financial planning mean takes a lot more time and energy and effort on the part of the advisor.  

[00:07:58.160] – Rob

For a lot of advisors the biggest time stacks are things like how do I just get the data from my clients to be able to know what’s good advice, what’s the things I should be telling them to be doing. And then once we have it, how do we analyze it and kind of keep it up to date and stay on top of changes in clients lives over time? Our lives don’t change dramatically day to day as it pertains to our finances but when they do change it can have really big ripple effects long term in our finances. And so we give advisors the ability to quickly and easily and seamlessly collect the data by focusing first on that client experience and using an app like experience and on average takes about well data shows us 8.4 minutes and 82% of the time people do it the very first time getting us the information we need. So they have a great financial planning conversation and enable advisors to go okay, here’s how I can help you. Here’s the specific things we got to work on together. Do you want to make this a paying relationship? It’s just so much better than like hey, I’m going to do a little peacocking here and give me all this money William manages for you.  

[00:08:58.840] – Rob

I’m so smart at my stock picking when everybody knows that’s not true anymore. It’s a commodity at this point so it’s really really powerful. So advisors get that scalability ability to make it a lot easier to do that stuff. That’s really the value add for most people when you hire a financial advisor so that they can do it profitably because for a lot of funds they charge the au because this really isn’t a profitable side of the business even though that’s where the value is and so we’re able to help them do that.  

[00:09:25.510] – Sean

So it sounds like from a scalability standpoint I put that in the category of time savings.  

[00:09:31.370] – Rob

It sounds like a tool that can.  

[00:09:32.570] – Sean

Save them a lot of time.  

[00:09:34.230] – Rob

A lot of time.  

[00:09:35.620] – Sean

Do you have any charts and graphs like information that you’re presenting like they can present to their clients that just make the experience a little more exciting?  

[00:09:46.630] – Rob

Oh yeah. So the heart and soul of the element system is actually what we call the element scorecard, the scorecard of your financial health and it’s got twelve metrics that an advisor would use with their client to demonstrate, well, how are we doing financially? And it covers everything from there’s three different types of metrics in the twelve, there’s risk scores, there’s cash flow scores, and then there’s asset scores. And so they’ll cover everything from like, okay, what does our allocation look like? Do we have relative generally about enough insurance coverage, how much are we actually saving of annual income, how much are we actually spending? And 99% of us listening to this have no idea what we’re actually spending. What are we actually paying in taxes? Not just what’s our bill due or how much is a refund at the end of the year, but what do we pay as a percentage of our annual income and then how much is actually going towards our debt over time. And then the asset scores are all kind of breaking down your net worth and showing you where are we actually creating wealth over time. Because wealth is a function of both growing the assets, investing, as well as controlling our spending.  

[00:10:46.840] – Rob

Because even if you’re the greatest stock picker in the world, if you’re freaking Warren Buffett over the last 60 years, but your spending is out of controllable matter, you’re not actually really creating wealth. So the asset scores enable us to quickly assess where are we creating wealth in our bucket, whether or not we’re actually moving towards some sort of financial freedom goals that we might be having. And we might need to make tweaks and adjustments over time depending on our long term goals.  

[00:11:09.830] – Sean

That gives me a very vibrant picture of what this platform can do. So financial advisors, wealth managers, if you’re listening to this, I definitely recommend a call to Rob to check it out. They’re going to ask this question, do you have like a trial period, like a seven day or 14 day or one month trial?  

[00:11:28.530] – Rob

Yeah. So we as a company Elements, don’t do free trials of the software. We actually will do a demo together and we jump in and let you play with it hands on, kind of answer your questions on the fly instead of having to just do it yourself or anyone who wants this for themselves. Personally, I personally offer a free complimentary 20 minutes session. If you want to sit down, get access to the software, put your information in and see, hey, how am I doing on my finances? How does this fit based on my long term goals? You can just go to contenderswanted.com free and you can sign up for a free 20 minutes session and get access to the software. Got it.  

[00:12:01.370] – Sean

And of course we’ll make sure we got all the links when we promote your episode there.  

[00:12:06.650] – Rob

Thank you.  

[00:12:07.240] – Sean

Well, good. This is really good perspective on Elements. I’d like to switch gears a little bit and talk about I love some of the highlights that was able to extract from your website before we met. And one of them is, what are some of the money myths within the industry?  

[00:12:22.670] – Rob

Yeah, okay. So I got at least actually, I wrote down seven different money myths even before we were talking here because I figured you’re going to want to talk about this because in my head, so much of our modern financial system is kind of there, but kind of not as it pertains to actually creating wealth. Like I referenced a few minutes ago in the beginning of this interview, I came from a background where, number one, I grew up in an entrepreneurial home and then investing in real estate. That was kind of my initial frame of mind around investing in wealth creation and what does that actually look like? And then I spent four plus years in public accounting, where I worked in what was called private client services, where I served CEOs and business owners and professional athletes, all these things and that. So I saw how they created wealth and what that was like, and I meld those two together. And then when I got into wealth management, it was like a completely different version of wealth creation was being sold to the masses. I was like, that doesn’t make sense. Why are we providing slightly different advice here?  

[00:13:23.330] – Rob

And ultimately, it just comes down to what is the purpose of hiring a financial advisor? But I felt like so many of these misguided perpetuated. So let me give you a simple example here. One of them is the obsession with the financial services industry around the value of your stock. Not value, stocks. But I’m saying what is the current price of your shares? Wealth was never actually measured in net worth for the longest time. Wealth was measured on income streams. Like, if you think of, like let’s take a simple example here. Mr. Dossy in Pride and Prejudice, his wealth was measured in £4000 of income a year. Right? It was measured in the amount of income he got every year off of his assets that he owned. And so much of our financial world is obsessed with and focused on picker prices and stock market changes day to day. And frankly, to the detriment of most of us because we have no control over that. We can’t do anything about that as it pertains to creating wealth over time. Yes. Generally, stock marketing, a long term average return tends to be between eight to 10% before we account for fees and inflation in various things.  

[00:14:31.830] – Rob

Yeah, but that’s in the long term. And most people are not thinking long term. We’re constantly having to fight that bias. And so wealth was always focused around creating cash flow. Because even if you focus on creating value and investing in, say, value type stocks and hope that they’re going to grow long term, ultimately, at the end of the day, for most of us, when you reach some sort of financial freedom goal, you need an income stream off of those assets. And if your focus has only ever been on creating value, you’re going to have to sell those assets to generate that income and therefore could be forced to sell in a down market, which no one necessarily wants to do. And so there’s lots of ways in which we try to get around that from like a portfolio allocation perspective. But the idea here is that we’ve been focused on the wrong things. We’re becoming obsessed with one part of wealth creation. Yes, net worth is a good score to help us determine how we’re doing, but it’s really the income we’ve actually get off of it that really determines how wealthy we actually are.  

[00:15:28.830] – Rob

Yeah, so that was an example of one of the money myths. If you want, I can keep going here, Sean. I’ve got others. I got I want to make a.  

[00:15:34.360] – Sean

Comment and then let’s definitely keep going. So I love that because you could have 10 million in the bank, but if you’re constantly working like 70, 80 hours a week, what’s the point? Right? And so you want to put yourself in a position where you don’t need 10 million. What do you need to enjoy life? Like to enjoy your hobbies and time with your family and friends, all that kind of good stuff. That’s the number. You got to figure that out. And you know, people like this too, and I know people too, they are working around the clock, yet they can in a conversation at the country club say, hey, I’ve got I just passed 10 million.  

[00:16:13.610] – Rob

I make half a million dollars a year. Wonderful.  

[00:16:17.570] – Sean

What are you doing in your free time? You don’t have free time.  

[00:16:21.510] – Rob

Got it. Yeah. And that’s actually one of the other money myths I feel like is out there, is just the attainment of some arbitrary number. Right? There’s always this emphasis on, I got to get a 10% return, I got to make X amount of money, or I need to get X amount portfolio value. When at the end of the day, money is just a tool. But if we focus on the tool, we lose sight of what the tool is actually used for. So, like, for example, whenever I meet with a client or prospective client, let’s say, for example, if anyone wanted to get their free assessment, one of the questions when you book a call with me is first, why is money actually important to you? Why do you even care about it? Frankly, there are some people that can show us that you can live on almost nothing, so why do you care about it? But then, number two, what is your actual goal with this money? Is it to take your family on a lavish vacation? Is it to be able to have the freedom and flexibility to take whatever job you want?  

[00:17:14.990] – Rob

Is it that fu money for that boss that you hate? So you could leave if you needed to. Is it the ability to pay for a college education for your grandkids? Is it the ability to give back to an all modern that you feel like really blessed your life, whatever it might be, that is the purpose of the money, not $10 million in my bank account. That doesn’t matter. That’s just a number. Yeah, that’s a big one for me personally.  

[00:17:41.110] – Sean

Let’s keep moving here. Am I counting correctly? Was that 3 minutes?  

[00:17:44.980] – Rob

I think I hit on well, yeah, three, if we’re talking the advisor one that I kind of referenced to earlier. So, number one, value the net worth, not necessarily your wealth. Number two, money isn’t the focus. Number three, your advisor isn’t there to make you rich. They’re there to help you stop making dumb decisions as it pertains to your finances.  

[00:18:03.950] – Sean

I want to make a comment on that, and thanks for pointing that out. There’s people that come to Tykr, and they’re in this mode where they want wealth protection, and I tell them I back up a second. I like to say I call it. There’s four categories of money management, and this can be argued, but category one would be debt removal. Category two is increasing income. Category three is increasing wealth. Category four would be wealth protection. And I always tell people, if you want to protect your wealth, go working with a financial advisor. They’re going to help you protect your wealth. But if you want to increase your wealth, like, if you’re way behind the eight ball with your investments, like, let’s say you’re 55 years old, you get $100,000 in your bank account. We got to put the pedal to the metal here and speed things up, right? And that’s where Tykr, we’re all about individual stock, solid stock, to get those bigger returns. You can get ahead of the ball game. So I’m glad you said that. Your experience is wealth protection.  

[00:19:07.710] – Rob

Actually, it’s funny as you just made me think of another myth that I hadn’t even planned on talking about. It’s this idea of diversification. Everyone always thinks, oh, you got to diversify, diversify, diversify, diversify. And there’s nothing wrong with diversification, but diversification is a protection strategy. It’s a cover your aid strategy that most advisors use because that’s their job, is to protect your money. But wealth creation is not done through diversification. It is done through concentration. And that’s what actually buying individual stocks, is you are concentrating more of your money into one particular investment with, hopefully, the hope that it would go up over time and create a larger return for you. You look at anyone who’s created any substantial wealth in their life, they’ve done it through concentration. Steve Jobs, how did he do it? He owned Apple. Warren Buffett, how did he do it? He owned Berkshire Hathaway. How did the Rockefellers, the most, you know, the wealthiest family that ever lived, how did they do it? Standard oil. They concentrated everything in one thing. Andrew Carnegie, Carnegie Steel. Right. The idea is not all these are entrepreneurs, they all own businesses. But the idea is the same thing can be done in a singular investment.  

[00:20:17.920] – Rob

You look at Warren Buffett, the vast majority of his wealth was created by purchasing Coca Cola, something like 40 something years ago, right? And now he’s done a bunch of other things since then. But that was his first initial big bet, right? The idea being here, wealth is not created through diversification. Diversification is a protection strategy. Concentration is how you create wealth over time. You can go about doing it in ways that can still protect you, but at the end of the day, it’s only the concentration that’s really going to create wealth over time. Right? Love it.  

[00:20:45.970] – Sean

Let’s keep going.  

[00:20:46.720] – Rob

Okay. This actually kind of goes along with this as well. This is one of my other myths here, is insurance is not an investment. There are so many people that are sold on this idea that, you know what, if I buy this index universal life insurance policy and IUL or a whole life insurance policy, I’m going to invest in that. I’m going to get free money and I’m never going to pay taxes, and it’s going to be the most amazing thing in the world. Yes, it all sounds amazing and in theory, yes, you can get those things, but you bought insurance, so don’t forget that because at the end of the day, it is still just insurance and you’re playing a bunch of games with it to try and get all this other stuff out of it. If you’re not careful, you’re going to get burned playing those games. Because the tax man watches those things very closely and the insurance company wants their skin because they’re not only going to charge you the management fee like you would get with a traditional financial advisor. But you’re going to get all sorts of appraisal fees and closure fees and withdrawal fees, and you’re going to get fees for the actual insurance itself, which, by the way, is going to grow throughout your life, become more and more expensive.  

[00:21:51.720] – Rob

And before you know it, all that extra money you thought you’re going to have is suddenly not nearly as big as you thought it was, or it might be gone because it was for insurance. If you want to invest, don’t invest in an insurance policy. There are some cool things you can do with insurance. I’m a CFP and a CPA. I know what you can do with it. But the people that can do that generally tend to be very few and far between. It’s not for everybody. So that’s one of my biggest myths out there because I feel like there are so many, I call them fearmonger insurance salesmen who are selling you this. Whether it’s the fear that the market is going to just evaporate aid and everything is going to be gone or it’s going to be the apocalypse and gold is the only thing that matters for the gold bugs or the insurance guys, they’re selling you on this, like, worst case scenario, which, by the way, who knows if the insurance company will ever keep their promise if that’s really the case, right? Or on this impossible dream of all these incredible benefits that you’re going to get from this insurance policy.  

[00:22:50.460] – Rob

I say it’s impossible because for 99% of the population, it probably is impossible to have those types of outcomes. They just show you the best case scenario in any of their analyses that they run for you. So that’s another one.  

[00:23:01.950] – Sean

This is music to my ears. I love that I’m hearing this from the CFP, because I do know quite a few financial advisors, and that’s fine if they’re pitching life insurance, but I know certain companies, that’s all they pitch, and they bring as many financial reps into their platform and into their model as they can. And I heard a statistic, some of these companies, they’ll throw 100 guys at the wall hoping one will last the next three years. Just pitching life insurance. And I tell people, like, if you really need it, like if your debts are super high and you’ve got a family and you’re going to leave them nothing or leave them a bunch of debt, sure, maybe consider life insurance otherwise.  

[00:23:43.230] – Rob

And if you do get some term because it’s a lot cheaper.  

[00:23:47.990] – Sean

Yes, thank you.  

[00:23:50.870] – Rob

Because if you have your eyeballs in debt, you don’t have the cash flow to pay for a whole life insurance policy or an index universal life insurance policy. You don’t. I’m sorry. Thank you. Right? Yeah, 100%. All right, so let’s talk about some more kind of like one more specific one. And I’ll talk a couple more general financial rudiments here. So another specific one here revolves around 401 KS, and this might come as a surprise to a lot of people listening to this because like, oh, my financial advisor always says I should max out my four one K. Your four one K sucks as an investment vehicle. I’m sorry, it does. There are so many strings attached and there’s so many reasons why it likely sucks. Get the free money if you get home. A company has to match. Get the free money for sure, but only put more in there if it actually suits your long term goals. If your goal is to invest in real estate, why would you be maxing out your 401K? If your goal is to start a business, why would you be maxing out your four hundred and one K?  

[00:24:44.940] – Rob

And I know everyone says, well, my CPA says that’s because I can save on taxes. And that’s true, it is tax deferred, but in a typical 401K. But I’m going to ask you the question right now. Do you expect your spending in your life to. Be the same or higher later in your life? And do you expect your taxes to be the same, lower or higher than they are right now?  

[00:25:10.950] – Sean

Right for higher in both regards, exactly.  

[00:25:14.050] – Rob

And both of those things make it maybe not the best choice for you if you’re going to put money in your four one K, put it in a Roth. Like every I’ve got, I put a little bit of money in me in my 401K every month because I want the free match. Why? I put every dime that I put in there into a Roth right now.  

[00:25:28.320] – Sean

Pay your taxes now.  

[00:25:29.680] – Rob

I’m paying my taxes now because I don’t know about you guys, I don’t think Uncle Sam is going to just be benevolently, be like, you know what, I think that we’re going to cut the tax code in half. When Trump tried to do that in 2017 with the Tax Cuts and Jobs Act, what happened? The whole world went to bringing hell in a hair basket. We pissed off this corporations are not going to make so much more money and they’re the worst and how dare we try and cut taxes? Yeah, I only see them going up from here. And our national debt tells me that there’s no way we’re going backwards at this point. So anyway, yeah, 401 KS are good if they match your long term goals and if we can do it in the right way as it pertains to our taxes, which more than likely probably means Roth. Just think about it before you just throw someone there.  

[00:26:10.700] – Sean

I love your perspective there just a few comments. My wife, we do go into her 401K. She’s a really nice match and that’s the reason why. But with our model together we have various streams of income. So that’s why we do keep that. We call it that machine moving forward on its own. Don’t really think about it, but it’s not like everything is going towards it.  

[00:26:31.930] – Rob

Yeah, and like I said at the beginning here, I’m not saying that it’s a bad thing. I’m just saying it’s not the end all, be all here. Think about it. Make sure that it makes sense in context like you clearly have with your wife. Right? Like we need to think in terms of where we are today and where are we actually trying to go and is the path that I’m on actually going to take me there? Because if Mount Plenty 401K is going to put you in some other realm doing something else when it comes to let’s just say let’s just use the term retirement, which that’s a whole another myth that we could talk about. But if it’s actually going to take you to your version of that, then great, that’s the right tool for you. But if it’s not, why are you putting the money there? There’s a lot of other options. There’s a lot of other things that we could do. Right.  

[00:27:14.030] – Sean

Good call.  

[00:27:15.080] – Rob

Okay, a couple more general ones here. Some of these I know are not going to be as sexy, but I still think that they’re true. Number one, passive income is a lie. I’m sorry, guys. Even if you own a piece of real estate, if you own it directly, you’re a landlord, you’ve got work to do, whether that’s to keep an eye on your tenants or when you have to deal with tenants and trash, right. The three teams of real estate. And even if you try to go the most hands off approach to investing in real estate, I invest in real estate, syndications, real estate, private equity to call it or whatever it is, because I’m an accredited investor. Well, that’s great, but you still had to do the work to determine whether or not that limited partner was someone you actually wanted to invest in. Whether or not that offering actually provided the right terms for you still had to do some work before it became more passive. Either way, passive income is not passive. There is no, hey, I’m just going to lick my thumb and whatever investment company that I use is going to do it.  

[00:28:10.760] – Rob

Everything for me, it’s going to be permanent, it’s going to be amazing. No, even if you use a financial advisor, I’m sorry, you should still be talking to that financial advisor, meeting with them regularly and ensure that they’ve got things set up the way that you want them set up. Even that isn’t completely passive. I’m sorry. The truth, and this last one that I wanted to hit on here is that financial freedom. I think there’s a lot of factors that play into what I’m about to kind of describe here, and that is for a lot of people when they think of creating wealth, when they think of financial freedom, when they think of all these things, when you’re at the very beginning, you imagine it as if it’s this Mark Zuckerberg at 25 years old, in his apartment, in college, at Harvard, that all of a sudden he’s worth billions of dollars just a couple of years later because his company. And you think that the only way you get there is if you get the big hit, the big shot, the sexy. I find the right stock, and all of a sudden I’m making tons of money.  

[00:29:04.220] – Rob

Like, I’m sorry, but in all reality, creating wealth is not a very sexy process. In fact, it’s a pretty monotonous daily decisions, daily grind, where 1000 little good decisions can be negated by one terrible bad decision. And it’s just this slow, continuous improvement, slow continuous growth over time. There was some great hits every so often. But if you’re doing it right in a way that’s actually going to protect your wealth over time, you’re likely not going to hit a lot of home runs. You’re going to hit a lot of base hits, a lot of doubles, and that’s good, that’s great, because if we’d rather have steady progress and win the World Series, then hit five homers in a single game and then never even make it to the pen race right?  

[00:29:48.330] – Sean

I love your comments there and I actually give you context. We just started season three here with the Payback Time podcast and season one, my objective was to interview people on financial independence. And believe it or not, it was really hard to find people who achieved that. Really hard. And what I found was the people that achieve this sense of balance in life, where they can leave midday at 02:00 p.m or 230, pick their kid up from school, take them to the Ball Diamond or go ride bikes or, hey, it’s a Thursday afternoon, we’re going to call it and we’re just going to have a long weekend. It was the people that structured a business that had some kind of revenue stream, I found, were the ones that.  

[00:30:33.290] – Rob

Really.  

[00:30:36.250] – Sean

Yes, so it could be a service business, it could be a product business, but they structured it in a way that they’ve got systems in place, some kind of reoccurring revenue. And I’ve talked to people I’ll keep this short, but people who either have an agency or maybe as a CPA firm or do they have a staff business where their clients are paying them on a monthly basis in some way, shape or form, and they could put in 20 hours one week, maybe 40 the next. Maybe 50 the next. But they had that lifestyle and that was like the happiness they had in life was really achieved with those type of business models, which was encouraging because some people like you’re, right? They’re like, oh, I got to go build that tech company and sell it for a billion dollars. You’re swinging for the fences the first time you play baseball, you’re not going to get out of the park, let’s be honest. So it’s a lot harder to do that. But, yeah, it was really encouraging. And then, of course, season two, I’m like, no more of that. Let’s just interview investors, entrepreneurs, hear real stories and we’ll take it from there.  

[00:31:34.510] – Sean

Cool. What I’d like to do next is ask one more question before the rapid fire round, or is there one key action or takeaway our listeners can do right now, today?  

[00:31:48.290] – Rob

Yeah, actually, for me, as soon as you said that question, I think the most important thing that a person can do that I think will immediately begin to help their investing, that will help their wealth creation journey, all sorts of things, is to actually get really clear on two things. Number one, where am I today? If you can’t tell me what you actually spend on a monthly basis or you can’t tell me where your wealth creation buckets are or where your holes are in your financial life right now, you don’t know clear enough yet. And number two, where do you really want to go and why? And I’m not talking like an arbitrary number. I’m talking about, like, what is the type of life that you want to live? A great exercise here it sounds a little bit morbid is imagine your eulogy. What do you want them to actually say? No one ever says it. Well, in my eulogy, I hope that they say that I’m worth $5 million and I spent 80 hours a week at my job, and I created this great company that no longer exists. Like, no one wants that.  

[00:32:45.970] – Rob

You always imagine what what do you imagine? For me, I imagine a life of service. I imagine a life where I have an incredible relationship with my wife and my children. I imagine a life where I could actually give back to so many people that were in need that I saw around me. I imagine a life I discovered as a life worth living. So what does that look like for you? And it’s good to look at it 50 years in the future. It’s good to look at it 20 years in the future. It’s good to look at it ten years in the future and five years in the future and figure out, okay, I know where I am now today, and I know where I want to go. Is what I’m doing today going to get me there? Because, you know, maybe investing in single stocks is going to get you there because that’s going to help you figure out, you know, the type of life you want, and it fits with your predisposition and your the things you like. Cool, great. Maybe it’s going to be starting a business. Maybe it’s going to be investing in real estate.  

[00:33:40.220] – Rob

Maybe it’s going to be any of the thousand other ways in which you can think about making money. Maybe for you, maybe it is just I work my job. I go home at the end of the day, I put a little bit of money away and kind of slowly get there. And that’s okay. There’s nothing wrong with that, even if it’s not sexy and glamorous. But what will make you happy? Figure out where you are today and where you actually want to go, and that will inform everything else you do in between.  

[00:34:03.730] – Sean

I love it. I love it. Great advice there. Thank you.  

[00:34:07.280] – Sean

Let’s take a quick commercial break. Investing in the stock market. I’m sure the top questions that come to mind include how risky is it? And can I actually make money? Everyday, people like you or I or otherwise known as retail investors, are flooding to the stock market because a friend told them or maybe they saw something on YouTube, heard something on a podcast, or maybe read something on Reddit or Twitter.  

[00:34:29.980] – Rob

Really?  

[00:34:30.230] – Sean

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[00:35:15.730] – Sean

All right, well, let’s transition to rapid fire round. This is the part of the episode where we get to find out who Rob really is.  

[00:35:22.260] – Rob

All right, go for it.  

[00:35:23.430] – Sean

If you can, try to answer each question in 15 seconds or less, you ready.  

[00:35:27.240] – Rob

Okay, go for it.  

[00:35:28.460] – Sean

All right. What is your favorite podcast?  

[00:35:30.740] – Rob

My favorite podcast? Okay. So I am a podcast nerd. I love podcasts. So the first two that came to mind were number one, I love The Art of Manliness with Brett McKay. If you want to know everything from how to fight off a bear to the proper tuxedo to wear, it’s an awesome show and I love it. He’s a great guy. Philosophical background type thing. The other thing that came to my mind is I love history podcasts. So I’ve got two of them. I love one called Revolutions with Mike Duncan, and the other one that’s called Our Fake History. I’m speaking on the guy’s name right now, but all sorts of cool stuff. I love Greek and Roman history and I love War history, all sorts of stuff. So there’s a lot of that mixed in those two. So those are kind of my top three podcasts that I love.  

[00:36:13.640] – Sean

Nice. I actually artemand with popped up and I had to click the little plus sign on my Apple app. I just haven’t got to an episode yet. So you pushed me over the line here. I’m now going to check it out.  

[00:36:24.860] – Rob

It’ll be worth it. Brett, if you’re listening, shout out to you. I’ve been listening to you for over a decade.  

[00:36:31.550] – Sean

That’s awesome. All right, next step. What is a recent book you read and would recommend?  

[00:36:38.750] – Rob

Okay. I am a prolific reader, and I have books all the time. There’s a reason there’s a bookshelf right here. A recent book that I read is actually this one in here, business is Brilliant by Lewis Schiff. It’s a fascinating have you heard of Lewis or heard of this book before?  

[00:36:55.600] – Sean

I have, yeah.  

[00:36:56.600] – Rob

Okay. So for those of you that don’t know what it is, the subtitle is Surprising Lessons from the Greatest Self Made Business Icons. And basically what Lewis did. Lewis is one of the writers for Ink magazine. He went in and he interviewed a bunch of self made millionaires and compared the mindsets of self made millionaires versus those who started off middle class. Just like the self made millionaires, but who stayed middle class. What was the big mindset differences? What was the approaches that were different between them and the self made millionaires? And it was just a fascinating breakdown between them, honestly, a couple of times the self incriminating to read it and go, oh, I definitely have more than middle class mindset. I grew up in a middle class family. My dad worked for Caterpillar. Like I said, my grandfather was a small business owner. So I got a little bit of both there, but definitely had some self incriminating moments. But that was a very fascinating book. And there’s all sorts of cool exercises he does at the end that I did, which I thought were very enlightening. So that was a good book that I read.  

[00:37:48.490] – Rob

Recently reading another one currently called The Income Factory. It’s all about how do we create cash flow with stock market investing. So that was very interesting. Beyond just like a dividends approach, I like to read stuff that kind of pushes the boundaries slightly, different perspective. A lot of times it pertains to my field just to kind of see the other side because I feel like you can’t really make a really informed decision unless you can see all sides.  

[00:38:10.720] – Sean

So that’s what I totally agree. I like to push myself outside my comfort zone in some cases, too. Real quick here, what is the title of that book? I’m in Amazon as we speak.  

[00:38:21.330] – Rob

I think it’s called the income factory.  

[00:38:24.290] – Sean

The first one you mentioned.  

[00:38:25.250] – Rob

Oh, the first one. Business brilliant by Lewis. Business Brilliant.  

[00:38:29.210] – Sean

Got it.  

[00:38:29.880] – Rob

Okay.  

[00:38:30.640] – Sean

Business Brilliant. Actually, I do this all the time. My listeners have to be annoyed by me, but I’ll be like, what was that book again? And then I’m adding to my wish list as we speak on Amazon almost every day. All right, good recommendation.  

[00:38:46.460] – Rob

Thank you.  

[00:38:47.530] – Sean

All right, we got another fun one here.  

[00:38:49.130] – Rob

Go for it.  

[00:38:49.550] – Sean

Yeah, you got four hour work week. Is that in the center there?  

[00:38:52.730] – Rob

Orange. If you’re a small business entrepreneur just starting to get going. Twelve Months to a Million by Ryan Daniel Moran. That’s a really good one as well. Can read that one.  

[00:39:07.230] – Sean

I’ve got that right on my shelf. I just picked it up. Yeah. And I see you’ve got Russell Bronson’s books over in the far right.  

[00:39:12.820] – Rob

Oh, yeah, over here. And then Alex or Maze is 100 million dollar offer. So good.  

[00:39:18.210] – Sean

All the usual suspects, all the usual.  

[00:39:20.550] – Rob

Ones that you can’t expect. But then there’s like, The Intelligent Investor by Benjamin Graham. That’s warren Buffett. Dale Carnegie’s. How to Win Friends and influence people. We’re disciplined of execution by the Covey Institute. This one was fantastic for goal setting. Actually, if you haven’t read that one, I would highly recommend that one. Or Profit First by Mike Mccallowitz. If you’re a small business owner that struggles with cash flow. This will solve all your problems. In fact, my wife and I use this as our personal cash flow management system in our own finances. This is the profit first system. Positive wealth. That’s another really good one for kind of a day to day investor. How to measure your life. If you want to talk about the more ethereal, like, why am I actually doing what I’m doing? How To Measure Your Life by Clayton Christensen. That’s a real one. He was a Harvard Business professor.  

[00:39:59.990] – Sean

So first he’s been sitting on my shelf and escalate that one to the service, too.  

[00:40:05.030] – Rob

That’s a good point.  

[00:40:06.850] – Sean

All right, movie question. What is your favorite movie?  

[00:40:10.690] – Rob

He warned me that you’re going to ask this question. And that’s such a hard answer, frankly, because my wife and I are the kind that, like, at the end of the day, after I’ve been working my 10 hours here at Elements, and then I’m working three or 4 hours at night, I just want to decompress and watch show and turn my brain off and chill. So I love watching a good show or a good movie with my wife. And there’s so many good movies. I’m a sucker for the great sports movies. So I love remember the Titans or Rocky. Rocky four, specifically. Like, I would break you like the Russian thing to Rocky. He was like, I heard like, oh, I just love that scene so much. Right? I’m a sucker for great sports movies, but I’m also I love stuff that will make me laugh. So my wife and I love watching Romcoms, like our date night type of thing. So stuff like hitch, right? Or how to lose a guy in ten days. But then also because I love my wife, I watch stuff like Pride and Prejudice. There’s a reason why I know that Mr.  

[00:41:12.810] – Rob

Darcy has £4000 a year as his annual income because I may or may not have watched the long BBC version with my wife more than once. I’m in enough to admit it. It’s okay. So it’d be really hard for me to just use one movie that I love.  

[00:41:27.800] – Sean

I’m thinking of putting the two together. You can take the comedy and the rotten. Well, maybe not rob comedy. There’s a little bit of relationship in there. But sports and comedy.  

[00:41:37.700] – Rob

Happy Gilmore, that’s also a classic. That’s a great one, right? Yeah.  

[00:41:42.690] – Sean

Before we move on, a few business questions. One that I recently saw on Netflix with Adam Sandler is Hustle.  

[00:41:49.450] – Rob

Yeah, I saw that. That looked really intriguing.  

[00:41:53.010] – Sean

Check it out. It’s inspirational. It’s a different take on the sport of basketball leading up to getting into the pros. Not like actual games as we seem like remember the Titans is classic, where it’s game after game and win loss, win loss.  

[00:42:07.440] – Rob

Right?  

[00:42:07.740] – Sean

This is that process leading up and recruiting somebody outside the US. It’s inspirational. It’s very good movie.  

[00:42:15.520] – Rob

Yeah. I think I saw a preview a little while back and it was on my watch list to definitely go and check that one out.  

[00:42:20.270] – Sean

You’ll love it.  

[00:42:21.200] – Rob

Cool.  

[00:42:21.600] – Sean

All right, business questions. What is the worst business advice you ever received?  

[00:42:31.650] – Rob

Oh, gosh. The worst business advice I ever received? Honestly, the first. OK. There’s a little caveat that comes with this. In all things in life, there’s a need to be delicate balance between overthinking and overacting. Right. I tend to be on one extreme or the other. I hate to call this, like, bad business advice because really it’s actually been a great blessing in a lot of ways, but, like, just go for it. Just jump in. Just give it a shot. Right? Because it’s really not bad advice. But I say that just because it led to a specific outcome, it was really not that great from, like, a business perspective. Because one of the things that I’ve learned as an investor, as an advisor, as a professional is that, yes, speed, money flows to speed. So we’ve got to be fast, but create systems and processes and metrics by which we can assess quickly the situation so we don’t accidentally step on a landmine. Because like I said before, wealth is created through thousands of small good steps that can be negated by one large, big, bad mistake. So we’ve got to act fast, but we have to be disciplined in that speed.  

[00:43:57.220] – Rob

And sometimes in my earlier career, in the beginning of my own investing journey, just acting too quickly can also have its own detriments. So I’ve had to learn to have a little bit of balance there. Hopefully I answered that question. Failure is my friend. It should be your friend. But we don’t want to fail too many times. Like, learn from our own failures. Let’s set up processes, systems, metrics, things that can help us out over time.  

[00:44:22.450] – Sean

Yeah, I like the phrase fail forward, fail fast.  

[00:44:25.810] – Rob

Amen. Yes. That’s why I was trying to say, like, this isn’t bad advice, but for this particular moment, it’s made me think of it was bad advice. It’s because I didn’t have those other things to kind of help me and that’s okay. You learn. Mike was on.  

[00:44:41.210] – Sean

Absolutely. And make sure you learn fast. Now, what I want to do here is flip that equation. Is there a definitive moment for somebody out there giving you really good business advice? Was there a specific moment in your life that stands out?  

[00:44:59.790] – Rob

Honestly, there isn’t one particular moment that kind of standing out in terms of the greatest advice that I ever got. It was actually probably the flip side of that same advice that I got that was kind of bad advice at one time because the phrase that keeps coming to my mind is what do you have to lose? Like I said, I tend to be sometimes on some extremes right. Act quickly or go too slowly. And I feel like I said, I’m a CP and a CFP. I have an analytical mind. I want to look at the numbers and run the numbers and deep dive all the time. But eventually you got to make the move. And a lot of times our own analysis makes us see all these demons that really aren’t there. And so having a mentor one time telling me, what do you have to lose? For example, take a simple example. Here me making this jump to Elements. I was working at a national RAA, fairly successful, actually, kind of growing my own book of business, doing fine by myself, and actually sitting in a position that if I just sat there and just wrote it out, I would probably financially have been really pretty comfortable within a couple of years wasn’t happy.  

[00:46:05.380] – Rob

And I knew that I wasn’t living true to what I felt like was what people needed or wanted or what I thought was real wealth creation. And so when Elements came, I say our way towards our family, this opportunity to make this jump, I had a mentor say, well, what do you got to lose, Rob? Yeah. You can always come back. Like, yeah, you’re walking away from a great opportunity and there’s some serious opportunity costs there. But what’s the potential upside and what do you really have to lose? Is this going to be gone forever? No. Could you come back? Yeah. Do I have great relationships to still follow those people? And would they take me back today if I said I wanted to come back? I know they would. Right? Right. So I just jumped and went for it. So sometimes the best advice is to just actually think about what do you have to lose? All right, get out of that analysis paralysis and go for it.  

[00:46:55.810] – Sean

I love that so many people sit and they sit and they sit, and it’s like if you were just thinking about just think about what do I have to lose? A few hundred dollars, few thousand bucks? It’s just money. It makes it back.  

[00:47:08.150] – Rob

Exactly.  

[00:47:09.350] – Sean

All right, another good question for you, time machine question. If you could go back in time to give your younger self advice, what age would you visit? What would you say?  

[00:47:19.050] – Rob

So I’d go back to my college self. I think when I was in college, I had a very one dimensional view of a career and of life. I thought that I had to get a good degree and a good school and to go get a good job. And then I would do that thing and maybe I’d start a business as a result of it type of thing like my grandfather had. But it all started there and if I didn’t do it perfectly there, I was going to mess up everything later. And I realized as I’ve gotten older, quote, I think Marie Fellow is Hayes last name. Everything is figure out, right? Like be a bit more flexible. That’s not the end all, be all. If you don’t quite exactly know what you want to do, that’s okay. Explore, figure it out. Learn as much as you can. Find out where your interests and what makes you excited and what bores you. And yeah, still be disciplined, still do a good job, still do good work. Don’t waste time, but also don’t stress about it too much. And recognize that, like I said at the very beginning here, my life in terms of where I was going to go and what I’ve been doing has changed so much.  

[00:48:31.360] – Rob

I went into college thinking that I was going to become an orthodontist eventually on my own practice. I almost have a minor in chemistry, taken almost all the dental school prerequisites. But then I found I had an interest in accounting, and I kind of struggled for years, a couple of years in college, of trying to walk both paths for a long time. And then when I got into public accounting and I realized I like accounting, but I don’t really love it. I don’t want to do this long term, but I really like this whole investing and wealth and all this sort of stuff. Personal finance, how do I get out of it? Where do I go? And then another couple of years of struggling and trying. Just roll with it, man. You’ll figure it out, make the most of the situations in front of you, and you’ll be fine. Just don’t stress about it so much. I think if I could, I’d go back to that guy, try and give him a perspective, be like, hey, your career has changed four different times since you graduated from college, and it’s great, but it’s nothing like you even think it will be.  

[00:49:25.700] – Rob

Just chat like most the options in front of you.  

[00:49:28.780] – Sean

I love that. Great advice. All right, where can the audience reach you?  

[00:49:34.040] – Rob

Yeah, so you can reach me a couple of different ways. I’m actually only exclusively on LinkedIn. Technically, I kind of have a Facebook profile, but don’t even go there because I haven’t updated forever and I will not respond. If you want to find me on LinkedIn, probably LinkedIn. Comcontenders wanted, I believe, is what the link is. You can look me up. Rob cook cfpcpa. If you want to, feel free to email me directly, Rob@contenderswanted.com. That’s my own little personal business email. And if you want to get that free assessment and sit down and kind of get my thoughts on what your financial situation looks like, go to contenderswa.com free and you can get the app for free and check it out. Play with a little bit, and you can sit down, have a conversation together. We’d love to meet anyone who wants to learn a little bit more.  

[00:50:15.000] – Sean

Awesome. Rob, thank you so much for your time.  

[00:50:17.540] – Rob

This is great. Well, thank you, Sean. I appreciate the invitation on the show.  

[00:50:20.740] – Sean

All.  

[00:50:20.900] – Rob

Right. We’ll see you.  

[00:50:22.340] – Sean

Hey, I’d like to say thank you for checking out this podcast. I know there’s a lot of other podcasts you could be listening to, so thanks for spending some time with me. Also, if you have a moment, could you please head over to Apple podcast and leave a review? The more reviews we get, the more Apple will share this podcast with the world. So thanks for doing that. And last thing, if you do hear any stocks mentioned on this podcast, please keep in mind this podcast is for entertainment purposes only. Please do not make a buy or sell decision based solely on what you hear. All right, thanks for your time. I’ll talk to you later.  

[00:50:56.180] – Sean

See you.