Interview with Todd Tressider, The Financial Mentor

Transcript

Unknown Speaker  0:01   The purpose of wealth talk is to educate, inform and hopefully entertain you on the subject of building your wealth. Wealth builders recommends you should always take independent financial tax or legal advice before making any decisions around your finances.

Christian Rodwell  0:19  
Welcome to Episode 69 of wealth talk. My name is Christian Rodwell, the membership director of wealth builders and I'm joined today by our founder Mr. Kevin Wieland. Hi, Kevin. Hi, Chris. Good to talk to you today. Good speeches. Well, Kevin, and today's episode, we are inviting a guest who's from America. His name is Todd Tresidder and is known as the financial mentor. And this is actually an interview that I conducted last year for for escape the rat race and we thought that it was relevant to bring to the ears of our wealth talk listeners as well today, Kevin because whilst Todd is obviously from America, it principles are exactly the same as as we teach on there.

Unknown Speaker  0:59  
Yeah, it's always good. When you hear somebody talk, who doesn't come from the same culture doesn't come from the same language, he doesn't use wealth builder language necessarily. But what he is saying, though, is exactly what we say. But with a slightly different twist. And you remember, we listened to Daniel Priestley. And he said, you know, wealth builders in here are the same, but with a slightly different angle. And this is the same with Todd. So what it's saying to me really, is the wealth builder principles are absolutely certain. And that this guy is a smart cookie, who's really got lessons and journey actually not dissimilar to mine in you know, creating his own journey, basically, ploughing his own field and then discovering other people reaching out to him for help. And then he helped him and that then he sort of realised he had gaps in his knowledge to to plug as people were asking questions that you really want. wanted to solve? And I think so he comes from shared values, shared principles, just a different country. And I think look out for those of you who are keen followers of Whirlpool the principles just listen for the lessons, as always, you know, listen for what you hear and see if you can if he gives you a different angle that syncs something in your brain, you know, get something there that perhaps I hadn't done, then you hadn't done, Chris, but Todd does. And if he can do that, then that would been a great result. And that's what I'm expecting to happen as a result of this interview.

Christian Rodwell  2:36  
Yeah, so Todd's got an engineering background. He's a former hedge fund manager. He definitely likes formulas and mathematics. And that comes through in the interview today, but let's head on over now and listen to a conversation with Todd Tresidder. So Todd, we are on escape the rat race radio today. Many of our listeners they are kind of juggling a full time job with trying to build their business. Trying To build their wealth, and time is of the essence everyone is short time. We know that we hear that a lot. And would you mind sharing? Todd? Was there ever a time when you were in the rat race yourself? Would you say?

Unknown Speaker  3:13  
Oh, absolutely. And, you know, to some extent, I mean, I remain in the rat race to this day to the extent that, you know, there's all these opportunities, all these really amazing things that I want to do and get involved in. And so it's not like I'm just sitting around laying on a hammock eating bond bonds, you know, I mean, there's a lot to do in life. And so I think the rat races you terming it those where you're stuck inside a job and you're like the, you know, the hamster on the wheel, just spinning, spinning the wheel. And so, yeah, I was in that I came out of college, I was not born with a silver spoon in my mouth. And so I had to work like everybody else. And but I just had this kind of crazy thought I said, well, supposing I just engineered my life to result in financial freedom, like, what would that look like? And so I just decided, you know, so I start Did studying people who built wealth and just trying to figure it all out? Like how would you design your life to result in financial independence? And so it worked. I was financially independent 12 years later.

Christian Rodwell  4:10  
Yeah. So a man with a plan and is it possible to build wealth without a plan?

Unknown Speaker  4:16  
Well, I don't think so. I mean, you know, you're you're basically giving me a layup to pitch my course, which is expectancy wealth planning. And the reason it's the first course I ever created was because what it I couldn't literally couldn't start coaching a client. So it came out. It was an outgrowth of my coaching, right? Because I didn't start with courses I didn't. I coached people one on one for 20 years. And in the process of coaching people, what I realised is you literally can't coach a person to financial independence unless you have a plan. The reason for that is the plan sets the backdrop. It's the context from which all decisions you make are made. And if you don't have a plan, and your decisions are haphazard, they're not cohesive. And so what ends up happening is, you end up approaching financial independence without a plan you end up approaching it Not strategically, not efficiently. There's tremendous amount of waste of resources, but time and money. And so the plan is critical. You have to start with a plan. So yeah, I agree with you fully on that. That's funny. You brought that up.

Christian Rodwell  5:12  
Yeah. And simply just too many distractions in the world right now, aren't they're not to have that plan and keep you focused?

Unknown Speaker  5:18  
Well, that's the thing. See, what happens was people would contact me and they'd say, hey, Todd, should I invest in XYZ? Or is it more important I start a business then do this investment. Should I quit my job and do this instead? And there was always questions. And I was always like, well, what's your plan? You know, because your plan determines how you're going to approach this because your plan is where you integrate. Here's the thing about proper wealth planning when you do it, right. You have to take those three asset classes you build wealth with, right you've got real estate paper assets that your broker and financial advisor could sell you and then you've got business asset class, so only one of them is normally included in a financial plan right, the traditional financial plan, but a wealth plan done right includes all three asset classes. Now, here's the rub, each of these three asset classes has unique characteristics. And so they're not all the same, and they don't all work for the same people. And that's why, you know, you see all these gurus out there, and they're all making the same mistake to say, Oh, you got to do real estate my way, you know, and you got it, you got to do a business. That's how you get rich, or you do the stock market. And you do it this way. Let's see, everybody's got their little secret to riches. Right? What they're not telling you is that each one of these strategies has its own characteristics. And so you've got to be able to match the characteristics of the strategies that you employ in the asset classes you use to your specific characteristics in your life, your timeframe, your goals, your resources, what your interests are, what your skills are, all these things will shape what asset classes and strategies will work for you. That's how you put together well plan correctly. And that's why you can't answer all those questions without it. Because that wealth planning process takes you through values clarification, it takes you through all these different issues you have to go through to integrate it into roleplay that will actually work for you. Does that

Christian Rodwell  7:02  
make sense? I love that it's it's so on the money there. Because I often say myself, you know, it's not that the strategies don't work, it's just that you're not the right fit for that strategy. And you can easily go to a weekend seminar and someone on stage is gonna sell you the next best thing and it sounds easy, and you just dive in. But if it's not right for you, if it doesn't fit your personality and all those other things you just mentioned, then, you know, you're almost on a losing streak from the beginning, right?

Unknown Speaker  7:29  
Oh, yeah, absolutely. I've got I've got clients that are whole hog on real estate. I've got other clients that can't stay in real estate and wouldn't touch it. Right? Or like me, I did it with advanced paper asset strategies. And that works really good for like an engineering mind. I've got kind of an engineering mentality, even though I'm not formally an engineer. And so advanced process strategies be very effective for that type of mentality. Other people, brilliant entrepreneurs. I've got clients that are just brilliant entrepreneurs, and they made millions and just a few years off their entrepreneur work. And so it's just a You've got to figure out, like, what's going to work for you. And then you integrate and develop a plan around that, you've got to understand that there's not only three asset classes, but there's all these strategies within each asset class that you could employ. And then here's one more thing you have to understand is market opportunity varies over time. And so that's another dimension to the puzzle is you have to match it with market opportunity at the time. So, you know, it's like, there's dimensions to this. That's why, you know, people that come up and they oversimplify it. It's not complicated, really, I mean, I just explained it in two minutes, right. Yeah. It's not overly complicated, but then there's the implementation. How do you do that Todd? How do you bring these things down and integrate them into a plan that will actually work for me you know, that's that's the key issue. Well, I mean, if you take it back to

Christian Rodwell  8:45  
like one of the oldest books like Richest Man in Babylon, you know, spend less than you earn and invest the rest is kinda like the basic rules, right?

Unknown Speaker  8:52  
Well, yeah, but here's the funny thing. That's everything you need to know about finance in one sentence, write two sentences, whatever it is one or two sentences. And it's true. Everything you need to know about finance to build wealth can be contained in about two sentences. The question is, how do you do that? Right? So it's spend less than you earn, save the difference and invest it wisely. Bam, that's everything you know. But now you got to understand, well, how do you spend less? How do you earn more? How do you invest it wisely? You know, how do you do these things? That's the key. And then which ones are going to work for you? What's wise investment for one person won't be another because investments themselves are not inherently wise. They aren't inherently good or bad. It has to do with your plan, how you incorporate that strategy, because See, the thing I teach is investing done right is a process. It's not a product. And what everybody thinks is investing as a product. They they're looking for that good investment. They want to get Microsoft or Google in its infancy. Right. And that's not how it works. I mean, very rare cases. Will that work? You know, there's a few outliers where they actually got wealthy that way. Most of most people they don't do it that way.

Christian Rodwell  9:57  
Wow. Oh, we've already opened so many I have so many questions that I could help with here. But let me say, I want to ask you, Todd, you know, what's the difference between building wealth and investing? Because I think there's inherent difference in your mind. Right?

Unknown Speaker  10:14  
Huge difference. Yeah. So investing is just, you know, so first of all, everything built goes back to your expectancy equation and your future value equation, right. So in other words, the math that governs wealth building is governed by two equations, the expectancy equation and the future value equation. So expectancy is probability times payoff in its simplest form, and that determines your wealth growth rate. And then future value equation is expectancy times time, right? So it's how it grows over time. And so I mean, I'm oversimplifying it, but that's, that's intuitively how you understand it. All you really need is an intuitive understanding. You don't have to have formal mathematics. You just have to intuitively get this and be able to apply those rules intuitively. And so when you go into it, what you understand is that wealth is actually the compound growth of both your personal resources and your financial resources. And so when people hang up on just an investment strategy, what they're thinking is they're getting stuck in a box of thinking, they're thinking, Oh, it's just about my w two income or my wage income, how much I save from that income. And then I just need a better investment strategy because I need a higher rate of return. But they're not realising well wait a minute, paper asset investing, which is what most people think of when they think of an investment strategy, right, like stocks, bonds, mutual funds, ETFs, that kind of thing. When paper asset investing is the most limited investment class. So there's strict mathematical limits to the growth of a paper asset portfolio. And I go into that in the course it's probably beyond the scope of this interview, but just trust me on it. And intuitively, you know it you don't even have to trust me because if you look at the greatest investors of all time, none of them exceed 20% compounded right. And yet, you can find tonnes of real estate investors in tonnes of entrepreneurs where their their return on investment greatly exceeds 20% compounded Like that would be not even that great in the entrepreneurial class and entrepreneurial investor class. And so what happens is the paper asset classes extremely limited, but everybody thinks, Oh, I just need a better investment strategy for my portfolio. And then that's going to solve my investment problems. No, it's not. That's just one little tiny aspect of the whole thing. So it's not that it's wrong. It's just not the whole truth. And what happens is when you start looking at it that way, it limits your understanding of the different things you can do to improve your total return to improve your wealth to increase your security, diversification value, there's so many things that you can dig into, once you expand your understanding of it. Hmm.

Christian Rodwell  12:40  
So Todd, if I may, just try and strip this down and keep it real basic term, someone listening right now. And you know, they have they just haven't dived into this world, but they, you know, they are committed, they are committed to investing the time, the next 10 years and I know that obviously you've written books around retiring within 10 years and they say, Okay, I'm prepared. To commit to whatever it takes over the next 10 years to do this, where do you start with someone? If you're coaching a client at the beginning, what are some of the early questions that you would ask them?

Unknown Speaker  13:08  
Well, as I said before, I would go straight into designing their wealth plan. Right? So that would be the starting point. So first of all, I'd find out, I'd assess their situation today, because their situation today, and they're going their timeframe implies what's possible and what isn't. Right. So for example, if I have a anesthesiologist who makes $500,000 a year, and only has accumulated two or $300,000 in savings, I've got one very, I've got a clarity in what the situation is right? He doesn't need any help with earnings capacity, there's no way he's gonna have higher earnings capacity than his current career, right? So there's no need to bring in entrepreneurship. Instead, what he needs to do is figure out how to channel more of his income earned into his asset category, and how to compound the asset category more effectively. And so just those couple numbers of things How much he makes, how long he's been at the career and what his savings are, will pretty much determine his plan. And I can go straight into that with them, right? Or you take somebody, like, let's say you got a school teacher, and they're making 40 or 50,000 a year, and they have summers off, and they're really good with hand tools and love working on stuff. Well, they're never going to really build wealth on a teacher salary, right, because they're already at kind of a minimalist living standard off the teacher salary. And so it's, it's pretty hard to save your way to wealth or to accelerate your wealth plan. So they're gonna have to look at both real estate and the entrepreneurship class. In order to do something, they have to break out the math of compound returns that are limited in the paper asset category. So if you notice what I'm doing in each of these examples, is I'm stepping right into what I opened the conversation with, which is matching the characteristics of the person's life, their goals, their skills, their resources, and I'm matching them up to the strategies that are viable given their goals. Does that make sense? Yeah,

Christian Rodwell  14:58  
it certainly does. Yeah. And, again, keeping on that topic of kind of knowing yourself, we use a tool called wealth dynamics. It's one of the many psychometric tools out there, but it's really great and points people in the direction of their natural path towards wealth. Do you have any tips for people who really just don't know where to begin and, you know, need that little bit of direction, almost like pointing the compass

Unknown Speaker  15:23  
for them. For me, what it is, is the narrowing process. You know, you take the you take the whole sphere of what's possible, which is almost unmanageable, it's so large, right? And that's why they can be confused and everything. There's just so many possibilities, so many angles, you can go, but there's only a few it's going to work for any one person or it's going to make good business sense for any one person in their situation. So you just start narrowing down until you can get to something and then they design a plan around it. If it gets them excited, and it moves them into action, then great, you're on track, if they find it stifling if they're not if they're running into trouble, then you know, you're off track and you have to revisit the plan because it should be very motivating and exciting.

Christian Rodwell  16:00  
Yeah, like, I guess that, you know, rewording my question, if we told you if someone's working with you, they have the added benefit of being able to leverage your knowledge. And if they're kind of approaching this by themselves, and they're overwhelmed by the number of choices, you know, the process for kind of just just saying, No, that's definitely not for me.

Unknown Speaker  16:21  
Well, I mean, there's three asset classes, right. So you can just start looking at eliminating them. If you have no entrepreneurial experience and no entrepreneurial desires, you could throw it out the door, right? If you don't have if you don't want to save your way to wealth over a lifetime of earning and compounding, then paper assets may not be a viable strategy. Unless you have a very high income or you're a very good saver if you're really into frugality. Right then paper assets can be workable. So you can eliminate that unless you know you're frugal or you have extremely high earnings and you don't feel desire to live a lavish lifestyle, right because in order for paper assets to work in a reasonable frame of time, you have to save a very high percentage your income so you can meet you have a very high income like I did when I ran the hedge fund, or you spend very little. So that's the paper asset category. If you want to do it in 10 years, like you were saying, if you otherwise you have to go to real estate in business. And so some people get are very open to business and business entrepreneurship. Some people aren't. So you close that one, the single highest probability success category is real estate. And that's because it's intuitive. You know, the average person who lives in a house can look at a neighbourhood know if it's good or bad. They can look at construction without great construction background and know if there's deferred maintenance or not. They know what makes a good home a good floor plan. So it's very intuitive, whereas paper assets are very counterintuitive. They work almost opposite what your intuition does. So, again, you know, you kind of have to look at what you can bring to the equation and then start eliminating based on what your predispositions are. Is that helpful. Does that narrow it down? Some does, it does indeed. And that brings me on to This word leverage. So I'd like to understand from you, Todd, you know, what is what is leverage in, in, in in your definition? And what are the different types of leverage what different things that can be leveraged to help you build wealth? Yeah, so you're referencing my book leverage equation, which was an outgrowth of this literally two lessons in my course that each contain, I don't know, there's like 10 videos or something like that 11 videos in there, around leverage. And so, what I, I got to back up a second to explain this, okay. In conventional financial planning, paper assets and paper assets, they have very limited risk management capabilities. You mainly have diversification with conventional assets, conventional financial planning, but there's some more things you can do with advanced paper asset strategies, but very limited risk management. And then you've got almost no leverage opportunities. You could only apply financial leverage which is very dangerous. It's the only type of level That cuts both ways and is dangerous. And I wouldn't, I wouldn't encourage anybody to use financial leverage in traditional asset allocation. So basically, there's no leverage opportunities for practical purposes. So then what happens is you go into what I call the advanced planning framework. That's where you bring in the other two asset classes, which is real estate and paper in an author business entrepreneurship. Now, the characteristics of that is, when you bring these other two asset classes, there's all kinds of creativity you can do to apply them. And that includes leverage. And so what that does is that changes the expectancy formula. So the whole idea in the advanced spanning framework is that again, your wealth growth is determined by your expectancy for the right so it's probability times payoff. Well, real estate has the single highest probability of a positive payoff. Business entrepreneurship has a low probability is everybody knows is a high failure rate in business, but you can manage it in a way that the payoff equation is extraordinarily favourable. And that's through like Lean Startup principles and other ideas. You're probably familiar with. And so if you approach it from an expectancy framework and you understand how to do it, you can manage in the advanced planning framework, extraordinary high probabilities and high payoffs, which results in rapid wealth growth. And so when I teach leverage, what I'm doing is I'm teaching the positive payoff side of the equation. So it's how you multiply what you can do in those two asset classes. So you're going beyond just the limits of your personal resources of time and money, right. So you, you apply other people's money, your play other people's time through employment, you apply other people's networks, you apply advanced marketing principles. So you're leveraging other people's sphere of influence, and on and on. So there's five, no six total types of leverage that are covered in the teaching. And it's all about how you build wealth by using resources other than your own, and sets the principle behind leverage is going beyond On your own resources.

Christian Rodwell  21:02  
So I know you have two children. And I've listed some of your other podcasts where you've, you've talked about passing on some of the principles and the information and sometimes they want to listen, maybe sometimes they don't, right. But for many of our listeners, Now, of course, they will have children and, and bringing this knowledge at an early ages is, of course really important. We hear so many people talk about why is this not taught at school? What was your opinion on this?

Unknown Speaker  21:28  
website, home school?

Unknown Speaker  21:30  
School is not designed to make people rich schools are designed to serve that function. I mean, schools designed to create a functional educated class of kids. I don't know the reason why it's not taught. You know, I mean, I had my thoughts on it, but I don't think they're all that relevant or important. I think the more important thing is how do you pass on this education to your kids, and the only thing I've ever seen that works is to walk the talk. Your kids learn from what you do and they will They learn far more from what you do than what you say. And they will pick up on any contradiction between what you're saying what you do very quickly. As an example, my use of the phone, I may not like what they do with the phone, but then I sent I tend to overuse it myself, and so they will call me out on it regularly. But in terms of walking the talk with finances, I guess I've done pretty decent with it because the kids do it. And so I've seen them like and how they purchase clothes, how they build their wardrobe, how they shop for an airline ticket, how they do things, they're pretty savvy about it. And even like now, we had four drivers in the household with two cars over the summer because my daughter came back from college and my other daughters a teenager, and we managed with two cars and nobody was complaining, you know, it's like, we just worked it out. And with four drivers in the household, that's kind of crazy. But then everybody managed and occasionally use Uber and I rode my bike a bunch I walked some places you know friends would pick us up, we just made it work because I didn't want to pick up cars for the summer. It's just a waste wasteful thing to do. And they understood that. So I don't know is that isn't answering it, you walk the talk, you just, you go through decisions with them in real time, and you work through them, and they build a pattern of how they think about money and how they value it.

Christian Rodwell  23:18  
Yeah, and I guess it's just simplifying the principles which you've shared already today. And, you know, embedding them to some degree without preaching to your children about you, this is what you have to do.

Unknown Speaker  23:30  
Well, some of it's not even applicable yet, because they're not even in the wealth building. part yet. I mean, one's a sophomore in college and the other is a junior in high school as a record this. It's not part of the framework, so I don't shove it down their throat. The The only part of the that's part of their mental framework right now is spending money and how you get good value for spending money and how you equate the amount you spend with what it costs you to earn it and create it. So like all that really basic personal finance stuff is where their head is at now. It's rather interesting. My daughter is a video production major in college. And so she was actually producing the video testimonials for my course over the summer, which was really interesting, right? Because, right? What's that leverage? Well, and she's earning money and it's, you know, it's deductible to the company and she needs some money and it's all good business right and good experience for her because now she has product to show. But it was funny. The point of the story was not that before the story was she came back to me. And actually, so that is one of the story right? Because I'm walking the talk. She's she knows exactly what I'm doing. That's tax deductible. It's a way to get money to her. I get value for it from the business, blah, blah, it's flexible job for her so she can have fun for summer. And you know, because she doesn't have to report it to me each day as a boss. Anyway, so yeah, she got a lot of principles that way. But then the other thing was funny. She came back to me, she goes, Hey, Dad, she was and I've been in those testimonial videos in your course. Sounds pretty interesting. I think Want to take it some time? And I was like, Oh, wow. Okay. So you know, who cares what dad has to say. But what these other people said about dad has got an interesting made any big secret out of my discontent for the financial planning profession on average. I mean, there are exceptions. There's some extraordinarily good financial planners, people who do hold their clients best interests at heart and have true knowledge of how the business works. The wealth building business that is, but by and large, that's not true. And so the whole reason I got in this business was because when I ran a hedge fund, I was dealing with clients and I saw what was going on with the financial planning side of stuff and it was atrocious. And it's never really resolved itself. Even to this day. There's been some improvement with the only financial planning and there's been some other changes that have helped. But basically, the whole reason I built a financial education business was to balance out what was going on financial planning, say, you know, financial planning Here's the thing, don't you do business with people that add more value to life than they costs, if they put more money in your pocket than they cost you then great. And so take that filter to your financial planner, and just see if he's gonna add more money than he costs to your portfolio. Most people fail that, you know, and that's unfortunate. And that's one of the reasons I got in this business and why sell education only not financial planning or investment products? Is that, you know, I believe that's just a valid thing. You know, you want to add more value to your clients, then you cost them and so when you charge annual percentage of assets under management fees, and you have cookie cutter management systems and things like that, which you have to have to run a business like that. You know, it's just it's tough. So, did I answer your question basically, be careful there. their financial planning as a whole is a sales business, not an investment management, they, they present themselves as investment experts, but in general they farm out the investment may Management underneath them because they're busy gathering assets. So they get paid is they get paid by the amount of assets they manage as a function of the assets they manage. Again, I'm generalising right? There's there's exceptions. So just have your eyes wide open, understand what the business is, it's a sales business, their job is to gather assets, they are generally as a whole, not investment experts. And they can be helpful. There's some things they can be helpful with. But be careful, there's a lot of conflicts and biases and things that you have to watch out for. So is that helpful? Does that get it?

Christian Rodwell  27:34  
Yeah, sure. And and link to that, again, is also just really looking at in terms of the costs of the people around you, but also the cost of the investments and charges and how much that can eat into your returns. Right?

Unknown Speaker  27:47  
Yeah, and I've written on the subject, you could probably find the article on my site, the link to where it's not the it's not obvious, all the fees you're paying a lot of the fees are hidden right and so you've got understand all the layers of fees involved in The Financial Planning version, both were overtly shown to you, and what are hidden behind the scenes and built into other fee structures, you know, so you've really got to become an expert on the fees realise how much they cost you, I've got a video I give away on my site for free, you can link to it. It's called how how your financial advisor is costing you 75% of your retirement income dot.or more. In other words, it's actually conservative that the cost you 75% of your income. And I just go through the really simple math that explains why that's true. And it's shocking to people, they just don't understand how this stuff works. And so when somebody says, you know, your financial advisors costing you 75% of your retirement income, I can't be possible, right? I mean, how could that work? You go through the math, and it's obvious, it's simple. And so that's all explained a free video on the site. Again, you just got to understand the stuff and learn and educate yourself,

Christian Rodwell  28:53  
all of these resources that you're referring to Todd on. Definitely making sure that these are going to be available in the show notes. notes for today. So anyone listening now just check those out click links. And, of course, I'm sure you'll share some more information at the end sort of how people can get connected to you, but then want to talk about the word debt. So someone who wants to build wealth, but maybe they feel like they've got this ball and chain around their ankle of debt, what can you advise and help? And in terms of managing that?

Unknown Speaker  29:21  
So when I teach this stuff, not just this topic, but almost all topics in finance, I teach both the art and the science, right. So the scientific answer to your question would be, you either pay off your debt or build wealth depends on what's going to give you the highest after tax return. Right? So that's what you focus on is the highest after tax return. That's the science, not terribly useful one because you don't actually have a crystal ball in the future. So you don't actually know what the after tax return on the investment side will be. But you do know the architect's return on the pay off debt side because you know what your debt is costing you? Right? So tough to wade out that equation, but that's the science answer that gets you the highest wealth, growth. Promise It doesn't really work that way. We aren't robots. We are perfectly rational beings, we're emotional human beings. And so it varies person to person. What the correct answer is, for some people, it really makes sense to pay off the debt because they just feel that debt like such a burden on their shoulders, they can't even think with it, it messes all their decisions, they have to have a clean slate to move forward and accept financial risks and do different things. So for that person paying off the debt might make sense for another person, they might care the least about the debt. Right? And so what they feel is they've got to that they want to move forward, if they're not moving forward, and they're not building assets. And they they're not playing the game offensively. And offensively. I don't mean like offence, like rude, I mean, offensively like offensive defence, right, paying down debt is defence, paint building wealth is offence and so some people they have to be moving on the offensive side of the game in order to be excited by it. And so for that person, you go straight to building wealth because that's what excites them, and you figure out how to build the pay off debt and you behind it. And so for people that want more on that I've got an entire article on the subject that goes through in detail, including all the tax ramifications and everything. It's like excruciating detail. It's called pay off mortgage earlier invest and it's on the site. And so that one is just like it goes through every little detail the decision process. And he even explains how I've been on both sides at different points in my life. Like I had a house with a mortgage when I didn't have to I had the assets, but my assets compound faster than the mortgage cost me right. So I was playing the math equation on that one. Now I'm older you know, you can tell from the video. I'm an older guy now. And so I prefer to take a knee so like this house, we remodelled I'm in right now. It's an old 1940s house downtown that we remodelled and fixed up. That was paid off. We just paid it free and clear. And so I still don't want them. I don't want the financial leverage. I don't want the mortgage. And so it's emotional decision. It's not a rational decision in that case. So I've been on both sides of the fence and disclose it and explain it and go through the whole detail. Is that helpful? Does that explain it?

Christian Rodwell  32:04  
That's great. And I'm gonna link to the article as well. So that'll be very useful for people. And thanks for referencing the fact that we are recording this on video as well, Todd, because I often forget, I know a lot of people are listening kind of through iTunes on the podcast, just through the headphones. But yeah, we've got the video going on today as well. So you see Todd, over in Nevada, I'm here in London. And, you know, the beauty of technology connecting us up here. So amazing on that note of technology. So here, I'll throw

Unknown Speaker  32:29  
that that's another good one is just to be like, amazed by things, right, because it just makes the day more enjoyable. I mean, it's amazing that you're in London right now. I'm in Reno, we're talking real time in a conversation. You know, it's just, I mean, it's a video and it's getting recorded, and the cost is almost I mean, it's phenomenal. And then right and so that's Yeah, it makes the day more interesting right to just appreciate being gratitude over the insanity of that how cool it is.

Christian Rodwell  32:56  
And then you know, we've got over you know, listeners in over 145 countries that are going to be checking this out over the next week or so. So it's pretty amazing the spread that that this can achieve. Yeah, yeah. Yeah. And so Todd, another thing that I think a lot of our listeners will be interested in is actually how you've built this as an online business over you know, over recent years and when you started out you know, did you have any idea that it was going to grow to the level it's at today and the reach that you are now achieving?

Unknown Speaker  33:28  
No, I did no, I had no idea at all. It started out it was just a kind of a weird question I had in my mind is, could it so when I when I quote unquote, air quote, let's put air quotes around my head here when I air quoted, retired at age 35, which obviously was a long time ago is over two decades ago. You know, I was still fascinated by personal finance always have been it's just I'm a junkie for it, you know, investing personal finance wealth building. And so I was still reading books on it and studying it even though I was quote unquote, retired. And so I was like, What am I going to do? And so I wondered if I could actually help ordinary people create extraordinary financial results. That was like the question it was in my head is, was I just unusual or did the principles that I had learned and applied that I'd figured out back when I decided I wanted to engineer my way to wealth, right? And I did it in 12 years. And I was like, could those principles be applied, and it turned out about three quarters of it could, and some of it couldn't, and I was missing a whole bunch of stuff. And I didn't know that until I started coaching people, right, I started finding all the holes in my teachings because the thing about coaching that's phenomenal, is when you're on the when you're on the phone each week with the same person over and over your stuff either work so they fire you, right, they're not gonna get on the on the phone and work with you. If they're not producing results and pay the bills. It's just not gonna happen. And so it's not like with a book where you're an author and you get up on a podium and you lecture and people applied and, and you can walk away and you're stuck. Sick and nobody really says anything because it all sounds good. With coaching. It has to work. It has to be effective. And so I started working with it, is it just a boutique coaching practice? That's what's called financial mentor. Right? I tried to get financial coach, it was already taken. And so it's financial mentor. And that's because you know, it was going to be just a boutique coaching practice. And then the coaching practice took off, and I was oversold, and I had, I kept raising the rates, raising the rates, and there was a waiting list and the whole thing, it was a good problem to have, but it got out of control. And then so I shut it down. I literally just shut the coaching practice down because there's no way for me to leverage it. There's nobody else that can that has the same knowledge and understanding background. And so I'm trying to productize Todd, right. So I'm trying to put Todd in the box and the knowledge I developed over the two decades of coaching and the decade of hedge fund investing, put in a product form to where it can reach more people at a better price point. And that's where growing the platform really kicked in gear. Right. So originally it was just going to be a little more You know, a website for a boutique coaching practice. And then it just expanded from there as the vision for it expanded.

Christian Rodwell  36:07  
Yeah, and obviously now creating intellectual property for your courses and books and those, you know, generating streams of income, you know, that says just the compound effect. Isn't that and the reach it's, it's, it's incredible. So yeah, once again, thank you for all of the content that you share. It really is phenomenal.

Unknown Speaker  36:25  
Thank you. Thank you. I try. You know, it's, you know, some people really resonate with it. And so that's what keeps me going.

Christian Rodwell  36:32  
Yeah. And I know, I know, for you, Todd, you set personal goals, 12 books, how many are you currently at so far?

Unknown Speaker  36:38  
The seventh one is almost done. So it's, it's at just about 50,000 words, it needs one more really tightening at it before I can take it to the most difficult part of the whole process, which is the content edit, because that's when you set it to professional content editors, and they come back and they tell you everything you did wrong, and it's like you're done with the book and emotionally the baby is born. Then the contractor comes back and says your baby's ugly. And these are all the problems with it. And so it's really a difficult stage. But that's where it's at now is it's basically written, I got to do one more edit myself. And then I go through two rounds of content edits, and then it all improves from there. So that'll be a seventh book that'll be on risk management. And so the the titles, risk management or investment risk management, and then the subtitle would be how to make more by risking less. And that's going to be the companion book to leverage. Because leverage is about how you make more, right, it's about how to ramp up the return. Risk Management is how you control the risk. And that's what tilts your payoff equation. Those two books are like bookends, if you will flip sides of the same coin, and they're how you control the payoff equation in expectancy analysis.

Christian Rodwell  37:47  
Well, it's clear for everyone listening today is solely a man who knows what he's talking about. Tada, and if people would like to go and check out your website and obviously start downloading some of the resources I know we've got a whole bunch of calculators there. For them, where do they head to top

Unknown Speaker  38:02  
so it's financial mentor calm is the website so two words financial and then mentor put together financial mentor calm. And there's a tonne of free resources. The only paid stuff is the books and the one course it's available. Now referred to at the beginning of the interview on net, everything's free. So there's like 80 financial calculators because wealth is math as I alluded to earlier, but a lot of people don't like doing the math or they're not comfortable with it. So these calculators online, do it for you. So 80 financial calculators all free. And then there's, I don't know, thousand 2000 printed pages of content, all free educational content that you can get. So yeah, just come over and there's a mini course 52 weeks to financial freedom. So for new subscribers, I give away a book called 18 essential essence of a self made millionaire. And then I also give away a mini course which is 52 weeks to financial freedom. And now you won't get rich in 52 weeks. It's just like it's a 52 week process to set the stage for it. You know, set the foundation for it.

Christian Rodwell  39:00  
And obviously, you know, we're talking to people who are in different countries around the world to the principles to the strategies that they translate, you know, across all continents.

Unknown Speaker  39:11  
Yeah, I get that question a lot, actually. But 95% of it goes for Commonwealth countries. You know, the thing that doesn't translate is like, you know, US tax law, things like that. And even then, a lot of us tax law is similar. So, you know, Canadians have an RSP we have an IRA, you know, I'm not sure what the British have. So, you know, it's it's 95 99%, translatable, the important stuff is the details might get missed. So, you know, somebody just has to read it with their own twist. I've got people from all over the world in the course and I've never heard one complaint of it being too us centric. I've tried to be conscious of that. The books are more us centric, because that's where the bulk of the sales are. But even then, the principles are universal. So

Christian Rodwell  40:00  
While I can vouch for the articles, and as I say, the huge amount of, you know, wisdom and knowledge that you share, Todd is incredible. So thank you again, thank you for being great guest. But I've got one last question before I let you go tomorrow, which I always asked my guests and that is, for those people listening right now, there may be a squashed up on the tube or they're sat in the traffic jam on their way to or from work. And they really know that something bigger and better inside of them. They're really, really driven to achieve that financial and personal freedom. But something holding them back was just something stopping them. And most likely, it's fear. What would you like to say to those people listening right now to

Unknown Speaker  40:39  
say Nike said it well just do it. I know that sounds cheesy, like so Cavalier, that's not going to get the guy off the off the couch. But here's the reality, okay, we're all gonna die. Some of us sooner than others, right? You know, I'm way older than you. And so you're gonna die anyway, so you may as well live the adventure of life. Right? And so yeah, you've got fears, you know, fear of what people will say fear how you're going to screw it up fear of how you lose fear that you're not good enough fear that you're not worthy. And all these fears, screw it, you know, I had all those fears, I still have a lot of those fears. You just do it anyway. You just start doing it. And over time you kind of learn that you're actually halfway decently competent. But it comes I mean, I started out with, I mean, here's, here's the disclosure. The whole reason I built wealth in the first place is because of lack of self confidence. And, you know, just I was looking on it, hey, I'm going to be successful in society's terms. Now prove how good I am. I was trying to like, prove I was worthy. And of course, once I got through that, I realised I didn't prove anything at all. But that's, you know, side note. So, you know, when I say everybody has those fears me included. I do, um, you just have to step into it and do it. And the whole reason I can do it is two things. One, it's the adventure of life. I want to go to my grave with regrets of, oh, if I'd only tried this, if I consider doing this, if I gotten off the couch that day when Todd said that crap rather than, you know, continuing to sit there, right, if I take an action rather than not, I don't want to live with those regrets. And so I'll just go take the action, because you're going to work anyway. Right your life, you're going to spend life working either way. So you will work towards what you want to create. And then on top of that, the other thing allows me to take action is risk management, right, which is why I'm coming out that other book, if you're doing careful risk management, then your wealth is just a function of sample size. I mean, once you understand how to set your expectancy, positive expectancy, how to manage risk, you will get the end result if you play the game aggressively enough and long enough, you will get there. It's a function of sample size. It's just a mathematical truth. And so get going now and start your sample size now don't waste any more time.

Christian Rodwell  42:55  
Hey, so I guess starting point would be you need a plan. Kevin. We actually did a podcast episode a few weeks ago on that very topic as well. And there's different routes to financial independence, that you've got to have a plan and you've got to work out the right plan for you.

Unknown Speaker  43:10  
It's like a different route to any destination. You know, once you know the destination, you could take the slow luxury route up mountain down, Dale, you know, the scenic route, or you can go directly, you know, the fastest route possible. And that's your choice over how long you want to take in order to get there. But absolutely certain, you know, you need a plan. And I think I would concur with that, because I think he says it not quite in the same language, but that's going to be a common thread is similar languages, Nick, Chris, which he says, you know, when people started asking him questions, Todd, should I do this? Should I do that? should I invest in this or that? Should I consider this or that? And he said, they're always the wrong question. Here's the question, and I haven't got a clue what's right for you. Well, that's, I know what your plan is. And then that's the same thing here. So, you know, no doubt, nobody likes planning. We know that it's sort of easier to drift, isn't it and just to react to whatever wind acts upon us, and we've had that quote before the old Jim Rohn. Quote, but I think, absolutely without a plan, it's possible to build wealth you could do by accident, can you if you've got a high income Christian, and you save a lot of money in the stock market, and the stock market works for you, you can probably do it in well, so years, 2030 years. But if you want to do it less than that, you absolutely can definitely need a plan and then combine the different assets.

Christian Rodwell  44:41  
Absolutely. Well, you've mentioned assets there and of course, we have our plan, which is the seven steps to wealth which we teach our members and of course, that's looking at seven different assets. And Todd talked about three today, which I guess are the core three, which paper assets being investing and business entrepreneurship. And then probably As the third one,

Unknown Speaker  45:01  
yeah. And then you know, that's similar, that's good principles, they are the main ones, you know, we widen it a little to give us a greater degree of focus on what you want to do. Like, for example, we, we talked about your use of the, you know, value in your home and the use of the value in your pension. And he doesn't talk about those as different assets. And that's okay. That's the whole point, isn't it, you see what you see and, and react to what you like, but I think the principles are there, you know, if you think about what he was saying there is, if you like paper assets, which is stocks and shares and investing and however the language you'd use for that, it's the journey there is going to be slow. It's going to be kind of, well, it's going to be volatile. And but you can get there if you've got a high level of investment you want to make and if you can make that on a regular basis from your income. So high income, no time, you know, then that can in no time spare time, I mean, then the paper asset strategy or the investing strategy can work. And that's what most people do Chris don't know, they start a job, and then they build up their pensions, or they build up their ISIS or they build up their savings. However they do that, and hope that, you know, by the time their working life is over 3040 years later, there's enough money put by to keep them going for the next 30 or 40. I just think it's a very dangerous strategy, but it's it's doable. But I think he doesn't just talk about that he talks about the combination of investing in paper, what he didn't go into detail, but CRISPR he talks about kind of advanced risk mitigation techniques, which is all very highbrow, but basically meaning, you know, if you're going to invest in something that's fundamentally volatile, then you need to put in some risk mitigation in there and we teach that as well. And there are a number of different strategies or tactics, rather that you can use with paper assets with investing to minimise your risk. So you know, we teach those. So I would agree with them. So finding myself almost every time I listen to Todd, just kind of nodding and saying he's actually saying exactly the same thing is we're saying just got an American accent.

Christian Rodwell  47:17  
Yeah. And, again, another thing that we talk about often is overwhelm. And we know the things that hold people back from building their wealth. The first is not having a plan, right? And we've we've talked about that. The second is simply, where do I begin? There's so many different ideas, so many strategies. How do I know which one is the right one for me, and it's a matter of knowing yourself, which is where wealth dynamics comes in. And we obviously use that as a tool with all of our members right at the beginning to help focus you on the things that are your natural strengths. You know, you shouldn't be spending time on things that are not right for you. And Todd said that as well, right? If you're not interested in business and entrepreneurship, then you know, just eliminate it and sometimes it will emanating things is the best way forwards.

Unknown Speaker  48:02  
Yeah, I think that's an interesting one. I definitely think that's a lesson that we could pick up from Todd, which is that, that process of elimination? Because if you eliminate you're reducing overwhelm, you know, so that's a smart point. No, I like that very much. And I think we try and do that wherever we can when we're looking at leverage. But I think we come at it from which is your best form of leverage, rather than, which is the ones to completely eliminate from your plan. And maybe we could do that, you know, maybe we could start to introduce that concept of getting rid of things that just simply are not a right fit for you or not a right fit for you right now. And something else

Christian Rodwell  48:43  
that Todd said was wealth is compound growth of both personal resources and financial resources. And I think, again, that touches on leverage, doesn't it? Kevin? We're often saying that so many people are sitting on assets which they're even not aware of, or certainly not leveraging to the extent that they could be

Unknown Speaker  48:59  
well mean. leverage is the great powerhouse that that kind of gives rocket fuel to all kind of wealth plan rather than the just the paper asset where there's no leverage at all. So you heard him say that right? There's no, there's no leverage in paper. I mean, you can't go to the bank and say I want to buy these shares, will you lend me some money? They'll laugh you straight out of the door. No, you can't do that. But but other assets you can and and I think the use of leverage, not just personal leverage, you know, using your right wealth dynamic, using what you're interested in all those things, because we know, actually, that when it's done over time, that the whole wealth building journey, Chris is transformational. It's transforming finances, but more importantly, it transforms yourself. You become different. As you can see things experience things, participate in things. And as you do that, you become different because you see more. And when you see more and you look at it you You know, he called it a big adventure. You know, I like that. I think that was great. language. We talked about the ROI.

Christian Rodwell  50:09  
Yeah,

Unknown Speaker  50:10  
no, I mean, I mean that one specific, Chris, the ROI of being curious, you know, the, that you're you're never more than one relationship opportunity or idea away from a complete transformation, your wealth, which is why I love to listen to other people because they give you great ideas, but he said, you know, you were talking to him about the technology, right? And you were saying, isn't a great that I'm talking you from London, he's in Reno. You know, we can just do this and that was whatever it was a year or 18 months ago. And he's saying yes, it's just, it's just, you know, fantastic. Life's an adventure. And that's the whole point. You know, when you go on and on an adventure, it's, you know, implies you're going to enjoy it and implies you're going to be testing yourself, and you will be changed as a result of that. And so I like the idea that Wealth is an adventure. And wealth is a journey of personal change and financial change. And actually, more importantly, I think, Chris, in the end, when you are confident on your journey, that your journey now becomes predictable, you can't be blown off course, because you've got expertise because you've got assets behind you. And then you can teach those assets to the next generation. And he likely touched on that too, didn't he? When he talked about his girls, and they're following just some basic habits of walking the talk, I think he said it was, you know, he does things in a certain way. It doesn't sound to me like he lives a lavish lifestyle. You know, we talked about cars and having a couple of cars and not a car for each member of the family. So it sounds like you know who's got a set of principles which is which is great, and his family are living those principles too. And this is true. When you determine to become completely financially independent, you will be able to pass on life lessons to the next Generation so they can not just accept what you've done and say, Hey, Dad, or Hey, Mom, thanks. But actually, you know, they can take on some of the wisdom and then go on to expand this for the next generation and the generations to come. And I think that's a, that sort of family adventure is a wonderful thing, which is why we ask people don't be Chris at the start to think about naming their wealth plan. Naming, you know, that plan becomes a business in its own right, you know, has a name to it. And then that name gives you the reason why, which is the thing that keeps you going. When, as always, when you're on an adventure, you're going to be, you know, you're going to be stretched in some way or other other stretched intellectually, financially, physically, mentally. You know, we know building wealth is not easy. It's doable, but it isn't easy because it was easy. There'd be 95% of the population will be wealthy, not 5% of the population.

Christian Rodwell  52:54  
Absolutely. all comes down to having that plan again, doesn't it and the accountability, the support All of these things which we know are important to help you achieve those goals. And one final thing I, I smile, because I know that this is a, shall we say bugbear sometimes of yours, Kevin, and this is, you know, financial advisors and are they adding value to your life? Or are they you know, as you say, putting that syphon in and actually taking more out there they're putting in?

Unknown Speaker  53:21  
Well, I think it's a very smart point to say that if you're going to engage with someone, and what I mean by that is professionally pay somebody some money to do something for you. Please, please make sure they're adding more value than they're taken away. And that, you know, in and I agree with him, you know, some financial advisors will add more value, the vast majority sadly, will not because they are selling a product that somebody else invented. And as a result, you know, that they're selling for their funds under management and we, we know this to be true. It's not like we're Trying to say something that's unusual here. You know, we know it's true. And what a shocker is, you know, he has written, I think it's an E book, which says the financial advisor will be taking 75% of your income over time. And I would encourage anybody to go download that because it's a shocking read. And while I'm not going to jump on the bandwagon and say, all advisors are bad, I'm not. However, you know, not all advisors will be adding more value than they're taking. And this is true wealth builders. You know, we don't want to encourage anybody to invest time and money with us unless we're actually adding value and it's a condition of doing business with us, Chris, isn't it that we adding value or, you know, we don't want the money? because the whole point about what we do is to help people achieve more wealth. It's called wealth builders, you know, could have surreptitiously named a business wealth reducers so that people pay Us Weekly. Which and then, you know, they get, you know, they suffer by being frustrated for their life. And that's absolutely the opposite of what needs to happen. So, you know, thanks for bringing that point up, Chris. A couple of other points just to make sure we don't miss them just on the fact that he talks about three assets. And not seven is I think he makes two good distinctions as well. So he did so on the paper one, he said paper slow, but can work but you need risk mitigation. property or real estate obviously, has the highest probability of success, because it can be replicated. And that's certainly true. within our community, Chris, isn't it people go for the high probability of success with with property in the UK? And but business has got the highest potential payoff. So yes, there's risks and he talked about that. But the thing that we do and we'll be focusing on that very soon, Chris in a master One session that I'll be running called the enterprise club here at wealth builders is to encourage business owners or would be business owners to be thinking about how to build businesses with recurring income from day one. And so the more you can build a business that builds recurring income, which means creating recurring value, if you go back to the same point, you want a business that adds value doesn't take value away from people, then if you can build a business that creates recurring value for your customers, then they will save you for many, many years to come. And then that gives your business incredible predictability and gives you the highest possible potential payoff. Life Changing sums of money are possible in in business, which is the reason why I like to focus on it because it forces you to think about value. It forces you to think about the end user and the problem, you know, solving a problem for somebody as opposed to being in a business type, you know, so I don't tend to worry about, well, what business are you in? And what's the problem you're solving? And can you solve that problem in a recurring way? So these are common themes, Chris, that run through probably every podcast from one to 69, the continual process of adding more value, the new taking away, and seeking to get that for yourself and seeking to pass it on to others.

Christian Rodwell  57:23  
Yeah. And hopefully, we continue to add a little bit of value every week through these podcasts. So if you're enjoying them, as we always say, please do share it with some