CFD 439 – The Truth About Money

January 11th, 2018

Ric Edelman, Founder & Executive Chairman of Edelman Financial Services, has been ranked the #1 Independent Financial Advisor in the nation by Barron’s three times.1 His commitment to teaching consumers about personal finance has established him as a popular and trusted financial professional in the country. A #1 New York Times bestselling author, Edelman’s eight books have collectively sold more than one million copies and have been translated into several languages.

He also hosts his own award-winning radio show, The Truth About Money with Ric Edelman, heard throughout the U.S. In addition to being an acclaimed public speaker, Edelman frequently provides his expertise to major national media, including CBS, FOX, CNN, CNBC, The Wall Street Journal, The New York Times, Family Circle, Reader’s Digest and many more.

Podcast Highlights

  • Who is Ric Edelman?

Ric started off as a journalist in the financial press. After his experience of going through the process of applying for a mortgage where he was asked to lie on his application, he realized that he and his wife should go out and learn how to do this on their own. They went on to teach others what they learned about the industry.

Business class basically brainwashes people. Ric gives people common sense advice that they don’t teach in school.

  • What happened during the 2008 crisis?

2008 was a wwake-upcall where everyone realized that the people they were listening to didn’t know as much as they were claiming.

  • How do you know if your advisor can be trusted?

Most advisors only know a certain area of the industry and don’t have the expertise to help you in other areas. You should look for an advisor that does exactly what you need and don’t be afraid to ask them questions about their work.

Ask your advisor “Please describe your typical client.” They should work with people who are generally like you. Check out ricedelman.com for a list of 18 questions you can ask your potential advisors so you know you’re getting into business with the right person.

Retirement is a relatively new concept and chances are if you are in your 20’s, 30’s, and 40’s, you will likely never retire. Exponential technology and improvements in healthcare will completely change the way we work and live in the future. The idea of “retiring” at age 65 won’t make sense in the future.

  • How do we handle inflation?

Inflation is the insidious silent killer of money. You should invest in assets that grow in value and not assets that have a fixed value.

We fear that which we do not understand and most people do not understand money. Fear and lack of education has people investing in assets that don’t make sense in terms of growth but seem like safe, reliable investments.

  • Isn’t there as much fear of doing something different from everyone else?

The reason we express fear is because we have never done the thing before but we always feel that way when doing something new. It shouldn’t stop you.

Work with someone that has the experience of what you want to accomplish. Everyone should have a financial plan and you don’t have to put one together alone.

  • Does real estate make sense from your perspective?

Real estate is a great option for investing. The trouble with real estate is that you need to have considerably more capital to get started compared to stocks. Real Estate Investment Trusts (REIT’s) lower the barrier to access so that virtually anyone can start investing in real estate.

  • Does entrepreneurship make sense as part of a retirement plan?

The internet and technology is enabling developments like the sharing economy and more people are getting involved. The model of how work is getting done is changing from the New York model to the Hollywood model. The notion of getting a single paycheck from one employer is going away.

  • What would you say to young people who are planning for the future?

Focus on the occupations that will survive and thrive in the future. Thinking, communicating, and creating are the areas that people will find the most success in. Obtaining a degree that will still be valuable in an exponential technology world is the key. Pay no attention to your professor, the majority of the fields they teach will be obsolete in the near future.

Get educated on money and how it works, you have to take control and accept your personal responsibility for your financial future.

  • How do you know when to sell?

You should only own an asset if you know why you should and how it fits into your financial plan. Work backward from your goals and take to an advisor to help you figure out the steps you need to take to get there.

Most people have a retirement account, not a retirement plan. Where are you trying to go with your life, if you don’t know you will probably not end up where you are hoping.

  • Ric’s Takeaway

Create a business plan. A lot of people have great ideas but you need to articulate it within a page or two. What are you going to sell and how are you going to sell it? What’s it going to cost? Writing a business plan will create clarity of thought and error check your plan before getting in too deep.

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