Podcast: A Conversation with Cody Garret About Financial Education

 In episode 76 of the NewRetirement Podcast, Steve Chen talks with Cody Garrett, a dedicated advice-only financial planner and educator.

Cody shares his journey from being a musician to becoming a financial planner and educator. He discusses his passion for empowering DIY investors and his focus on building comprehensive financial plans and providing personalized education.

He emphasizes the importance of clarity and intentionality in financial planning and the need for personalized education and advice. Cody believes that the future of financial planning lies in empowering individuals to create their own financial plans and using technology and AI to provide guidance and ask better questions. He also highlights the role of financial advisors as arrangers and orchestrators rather than conductors. Overall, Cody envisions a future where financial planning is accessible to everyone and individuals have the tools and knowledge to make well-informed decisions about their finances.

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Transcript of Episode 67 of the NewRetirement Podcast Featuring Cody Garret

Introduction (00:00):

This episode is brought to you by the NewRetirement Planner. Create a financial plan for free at NewRetirement.com.

Steve Chen (00:19):

Welcome to the NewRetirement Podcast. Today we’re happy to welcome Cody Garrett, a dedicated advice only financial planner and educator who is passionate about empowering DIY investors. As the founder behind Measure Twice Money, Cody specializes in building comprehensive financial plans and providing personalized education to help families make informed decisions on their path to financial independence. Welcome, Cody. Thanks for joining us.

Cody Garret (00:43):

Absolutely. Thanks for inviting me.

Steve Chen (00:45):

So I thought first we dive into your backstory a bit. Love to learn more about where you grew up. I know you were a musician, but your journey to financial planning. What led you here today?

Cody Garret (00:56):

I started music when I was a little kid. I actually grew up in an engineering family. Pretty much everybody else in my family works at NASA and did some engineering job. So we really grew up in an analytical data-driven type of family. With that said, I got into music when I was six or so. By the time I got to the end of high school, they were like, what do you want to do in college? I’m like, well, the only thing I’m good at at this point I think is music. So I guess I’ll just continue with that. So I ended up getting a bachelor’s degree in music theory, which is ironically, I guess it would make sense, is the science of music. So taking that data orientation and plugging it into music. So I have a music theory degree, and then I also went to Boston at the Berkeley College of Music to study contemporary music.

(01:36):

So I have my bachelor’s degree in classical music, everything from Gregorian chant all the way to Gershwin, and then I studied Gershwin all the way to modern jazz and pop music at Berkeley College of Music. After that, I moved back to Houston, Texas where I’m from, pretty close to NASA where my family works, and I had a 10 year career in professional music. Did pretty well, probably made around $75 – $80,000 a year, which is pretty good. As a full-time musician down here, I got really into the idea of adulting. I got married in 2015, it feels like a long time ago now, and as a professional musician, you don’t realize it, but you’re actually an entrepreneur, you’re a sole proprietor. And I was may or may not have done my taxes as accurately as possible, getting all my deductions as a self-employed individual, but I really wanted to learn more about really making well-informed decisions about my money, especially being married and being the sole income provider of the family.

(02:31):

So I started going deep into the weeds. I started listening to podcasts at two times speed on my way to work and back. I listened to two hours a day of podcast like ChooseFi, the Mad Fientist, Radical Personal Finance, a lot of good ones around there that are still there. Money Guy Show, for example, I drank out of the fire hose. I started learning as much as possible at personal finance. I was talking to my mom on the phone one day and she asked, Hey, what have you been up to? I said, oh, I’ve been learning a lot about personal finance. I love this stuff. It’s a kind of fun for me. And she said, oh, well, you should talk to our family friend Joe. He goes, I think he works in that space. And I go, oh, cool. So I called Joe and he’s a certified financial planner and he owns an investment management firm and provides financial planning to over a hundred households in his firm. And he said, Hey, if you really want to drink even more out of the fire hose and go beyond the basics in terms of your personal finance knowledge, go ahead and enroll in a CFP education program. So I signed up as a professional musician. I got my certified financial planning education and exam done, and then Joe actually hired me to work at his firm really starting from the ground up, completely dry sponge ready to just learn as much as possible about serving clients, running a financial planning business, and that’s where it all started.

Steve Chen (03:42):

How long ago was that that you were working with Joe?

Cody Garret (03:45):

That was September of 2018. And

Steve Chen (03:48):

How long did you work with him for?

Cody Garret (03:50):

I worked there for about two and a half years. Joe was amazing about not just, he didn’t just put me in a cubicle and say crunch numbers or go find clients. I didn’t do any prospecting effectively was I was a fly on the wall, not just a fly on the wall, but I sat at the table. He invited me into all the meetings to meet clients and prospective clients to really learn how the ship was, how he sailed the ship really. But effectively, I worked there for about two and a half years, gained enough experience hours to have the CFP letters after my name, which is required to get the letters. But then a really big shift happened as I was going through the CFP education program, I created a lot of educational content. I really found that the best way to learn is to teach.

(04:31):

So anytime I learn something, I go find somebody to teach it to because I found out that the more you teach, the more you learn, or really when you teach, you learn. Twice I taught the people at my firm. I actually created an educational blog called Measure Twice Money back in the day, and I just started sharing education, not expecting anything in return. I just wanted to learn more. But then I started receiving about five prospective financial planning clients per week. About six months into doing that, just creating educational content without expecting something in return. After doing that, I realized that there were a lot of consumers looking to hire a financial advisor, but not to manage their investments. They were really looking for a financial advisor to give them personalized education and advice, but without requiring them to move their money under a UM assets under management. So I just said, Hey, if there are five prospective clients coming in or sending me messages every week, maybe I could launch a firm and just do that. Maybe I could launch a firm that only serves DIY investors with no investment management. So I did that in 2021, I think it was in 2021 I launched my firm had 17 clients sign up on day one and pretty quick to full capacity, and now it’s just a few years later and I’m really expanding out from there.

Steve Chen (05:43):

Yeah. What is Joe’s full name?

Cody Garret (05:46):

Oh, Joseph er. He’s a CFP. He’s at Legacy Asset Management in Houston, Texas. Fantastic firm, awesome educator. Without him, I probably would’ve gone a completely different route.

Steve Chen (05:57):

Nice. We’ll give him a little shout out here. That’s cool. That’s awesome. And I wonder what he thinks now because it’s been interesting watching you coming from nowhere to, we should call you the Brock Purdy of Financial Planning, which 49ers found. We’ve got the Super Bowl coming up, but I think coming on the scene in the big way and getting a lot of press coverage and stuff like that, it still feels like you’re early in the journey here about what’s possible. It’d be great to hear more about how you’ve evolved, because I know you started with your own firm and then you started educating financial advisors themselves, and now you’re starting to get into educating consumers at scale outside of your firm. So I’d love to hear you describe how you see that evolving.

Cody Garret (06:37):

Yeah, it was kind of funny. I mean, a lot of people know me for launching my firm, which is advice only, no investment management got a lot of press for that because it’s very different. Probably only 1% of firms even will provide financial planning without managing your investments. So a lot of people assume that I launched my firm first, but before that firm, I actually started my educational stuff for consumers. So I actually have three companies now, three businesses within Measure, twice brand of this umbrella in a way. I have Measure Twice Money, which is so far as free education for consumers. Just as I learned something, I just taught others. Then I launched my firm Measure Twice Financial, which now I’m not accepting any new clients. So if you’re listening to this looking for advisor, I’m not the one for you, but I can help you find one if you want.

(07:23):

And then the third one was kind of funny, measure Twice planners. It’s actually now it’s an educational platform, but specifically teaching other financial advisors how to become more comprehensive financial planners, whether they’re career changers or even been in the industry for decades, really showing them how to go beyond the basics and really tilt toward more of a financial planning focus rather than just an investment management focus. The reason I started educating advisors is the one thing that kind of sets me apart is the financial services industry does not have a wonderful history in terms of transparency. There’s been a lot of hidden fees. And even if the fees are transparent, they’re not salient, they’re not talked about, and not even just the fees, but the services. Financial advisors are not known for sharing how they do their work in the public. They’re not sharing their process and their templates and even their biases toward certain planning areas.

(08:17):

And I just gave it all away. I was just like, Hey, this is how I do it. Everybody can duplicate what I do. There’s no competition. I always say, you’re only competing if you’re copying. So since I’m doing something different and I serve different people than others, I just gave it all away. So as I was giving stuff away, advisors were like, Hey, can you show me how you do financial planning in more detail? So rather than trying to have one-on-one conversations with hundreds of advisors, I actually had Zoom calls with over a hundred advisors in one year trying to learn my process. Let’s go ahead and just make a community and a comprehensive video course. So I made an eight hour video course sharing my entire financial planning process, my templates, my everything. That launched Measure Twice Planners almost exactly a year ago. And now there’s about 400, 500 advisors that I teach financial planning to.

Steve Chen (09:04):

That’s awesome. Yeah. We’re also big proponents of this one to many approach, which is we introduced classes for our community, and that’s been a huge success. And one of the things that we do in our business, we free software, paid software classes, coaching that, and then we have access to a CFP, a flat fee basis. He’s actually started doing Bruce one to many meetups with consumers that are just like, do I want to get a financial advisor now? So instead of meeting him one at a time, he’s meeting with a bunch of ’em like a lot at once, and apparently that’s going pretty well. So yeah, it’s cool to hear about that. Quick question. Back to the CFP. As a person that’s gone through essentially not knowing much about personal finance to being a enthusiast and learning, and a lot of the podcasts you mentioned, which we’ll cite in the show notes, there are great resources for individuals to learn. And then going from that to becoming A CFP, how would you characterize the difference? How much more did you learn becoming A CFP and how does your thinking change? And I got my series 65, but I’m not a CFP, but we have CFPs here and obviously we build a lot into our software. But love your take on this.

Cody Garret (10:15):

I really think the CFP education is really learning the rules and the concepts, which kind of ironically, I think that the CFP, yes, it’s comprehensive in terms of the knowledge base and learning lots of numbers and rules and administrative things and IRS publication terminology. But at the same time, you learn the rules and concepts kind of going beyond the basics that, but effectively everything in the CFP program, you can Google and you can find on YouTube for free. It’s a nice cozy space where you can get it all at once, learn all of it in nine months, at least. That’s how long it took me. As we found out, knowing the rules and concepts is really not enough. So I always describe financial planning as two islands, right? You have your quantitative, you have your comprehensive financial ecosystem. I call that everything your life with a number on it.

(11:02):

The CFP program teaches you all about those things. It teaches you all about the numbers and the quantitative details and all these time value, money calculations of how does compound interest work and should I choose a pension or a lump sum, things like that. But there’s this whole other island, it doesn’t really make sense to make a bridge, which is a financial plan. It doesn’t really make sense to make a bridge to something that doesn’t exist. So we have to understand this whole other island, which is a family’s qualitative, unique values and desired outcomes. So even though the CFP program teaches you all the rules and concepts, it really doesn’t teach you what you need to know about the person. It teaches you the what and the how, but it doesn’t teach you the why. For example, when people are using NewRetirement, right? When people are creating their scenarios, the output is only as good as the input.

(11:46):

That’s a big thing I’m a big proponent of is tools without education can be dangerous. Imagine just somebody handing you a power saw without understanding safety and understanding. What are you even building to begin with? Why are we just cutting wood? I think it’s really important that the Ccfp education is incredible in terms of giving you tons of knowledge, but then you have to filter down that noise and figure out who do I want to serve? How do I want to serve those people? And then how much of that information is actually applicable? So I’ve actually narrowed down nine months of education in the CFP program down to a five hour video course of saying, here’s all the things that I actually think that I need to know to do my job well.

Steve Chen (12:24):

Okay. So you feel like the CFP really framed up, especially the number side of it. How about in terms of the personal side? Yeah, eliciting the goals, understanding values, and really aligning someone’s money to their values and where they want to get to. Do you feel like it gave you a good grounding for that?

Cody Garret (12:40):

When I took the CFP education program in 2018, they actually did not have that element. They’ve just recently added a psychology of money psychology of financial planning element. But when I did it, it was solely quantitative. You really didn’t have any knowledge about how to have conversations, how to ask better follow-up questions and some of those softer sides of money.

Steve Chen (13:00):

In terms of going forward, you’re not taking new clients, you’re educating advisors already. Now you’re adding the consumer side. Where do you want to be in three years, five years, 10 years? What do you think your own long-term vision is here in this space? And do you think that you’ll stay, I mean, you already had a 10 year current in music. Do you think it’ll be like, I’m going to do 10 years in financial education and then to switch gears again, or how do you think that unfolds?

Cody Garret (13:22):

Yeah, maybe 10 years here and then it’ll become a master plumber and it’ll become a lawyer and maybe just keep, I didn’t realize how much of an entrepreneurial spirit I have, and it’s not really about how can I scale a big revenue business, but I really define what my core value is and my core values of generosity and transparency. I personally define success as the ability to give to others without expecting something in return. So I’m trying to scale all three of my businesses, my financial planning business, my advisor education business, and my consumer education business. I’m trying to scale those in a way that, well, yes, the revenue will support our pretty low living expenses lifestyle, but how can I scale impact not just revenue? So to answer your question, financial planning, you know how you were talking about you have a free option, you’ve got a paid option, then you can pay a little bit more, you can work directly.

(14:12):

I really think that way about business where the closer people get to you, the more expensive it is. So my blogs, my free educational videos and blogs, that’s all free because those people do not have any direct access to me. One level closer to that is measure twice planners. They can meet with me in a group setting and ask me questions and get some of their q and a done. Then there’s one step closer to me is one-on-one, I’ve realized that one-on-one, financial planning is very difficult to scale unless you delegate and create other advisors. So on the financial planning side, I’ve decided to cap my capacity. I’m only working with between 10 and 15 families per year mostly. Of course, I love working with those families, but also I want to keep my mind sharp and be ahead of the game and understand what’s happening in financial planning.

(14:57):

The second part, measure twice planners three to five years from now, I would love for, if I were to 10 x or a hundred x what I’m doing in that business, it would really be plugging in the measure twice process teaching the measure twice planning process within CFP curriculum. I’ve already been talking with different university programs and adding measure twice planners as part of their curriculum so that hey, you learn the rules and concepts now learn how to apply real application. And then on the consumer side, I really want to blow up the education side from a aside, really changing the public perception of financial planning. If I ask most DIY investors, by the way, anybody who’s not working with an advisor right now is a DIY investor. So there’s a lot more DI investors than there are people being served by advisors. I really want to teach DIY investors that you can manage your own money successfully, that you don’t need to hire an investment manager or even an ongoing financial advisor to be successful with money.

(15:54):

Changing the public perception really means showing consumers, Hey, I’m a financial planner. I’m at full capacity. I’m not going to work with you, but I will teach you everything that I do as a financial planner so that you can create your own financial plan as a family. And then at that point, you’ll realize, first of all, you’ll have gain clarity and confidence in your own financial situation, but you’ll also now understand what financial planning really is. It’s not choosing investments. Choosing investments is probably 5% of the financial planning process. So I’m teaching consumers to effectively do their own financial planning so that they gain clarity and also know, hey, if I am going to hire a financial advisor in the future, at least I know what to look for and I know enough to ask the right questions.

Steve Chen (16:40):

This obviously begs the question, okay, you have taken the time and spent years becoming a CFP. Now you’re building education for the main purpose of telling other people that maybe you don’t need an advisor. Do you think that there is a use case for financial advisors? I mean, I do, even though we’re in the business of helping many DIY folks, but I still think coaches and advisors I believe are a key part for many folks, but I love your perspective on their role.

Cody Garret (17:03):

Yeah, I think that that term financial advisor, it’s not only unregulated, but it really doesn’t. It means something different to everybody you ask. So I kind of think of three different people. There’s an investment manager, there’s a financial planner. If you push those two together, that creates a financial advisor. I do think that everybody would benefit from a financial planning relationship, but I don’t think that everybody needs an investment manager used to need an investment manager to buy, at least from what I was taught, you used to actually need a broker to facilitate trades for you. I can rebalance my entire portfolio in five minutes on my phone. I think investment management is a commodity in terms of the trading of securities, but knowing which securities to trade, how much that’s really the role of a financial planner. So I think that everybody could benefit from a financial planner, whether hourly, project based, ongoing, but or without investment management. And of course, I have a bias toward aligning the compensation model with the service provided. So I’m really a big fan of the flat fee models, whether you have investment management or not.

Steve Chen (18:08):

Yeah, a hundred percent. I think one of the framings that I’ve carried around with me, and I’d love your perspective on this, is that a third of the world is DIY. A third of the world is do it with me, and a third of the world is do it for me. I agree. Do you think that’s roughly right or do you think it’s the mix of slightly different?

Cody Garret (18:26):

Well, I think it’s funny. One of the phrases I use all the time is just because somebody’s a do it yourself investor doesn’t mean they’re a do it alone Investor, DIY to me means you have to ask what are they doing themselves? The DIY to me is clicking their own buttons. They’re logging into the custodian. They’re the ones clicking to trade to buy and sell. That’s the doing it yourself, but it’s everything else. It’s the ongoing guidance. Anytime somebody talks about a DIY investor, they’re not talking about somebody who does their own financial planning and does their own social security analysis, what they really mean, it’s somebody managing their own investments. If I step back a minute, in a financial advisor who manages your investments, the only thing they can do for you is trade securities. They can’t spin for you. They can’t give to charity for you.

(19:17):

They can’t change your daily behavior when you’re not in the meeting with them. So pretty much everything outside of trading and investments, you have to do yourself whether or not, whether you have an investment manager or not. So this framing of a lot of advisors like to just tell people what to do or do it for them, whereas I think there’s a big shift happening where people, they don’t want the advisor to be the hero of the story. They want to be the hero and they want the advisor to be the guide. Kind of building a StoryBrand kind of framework here, Donald Miller, which is people want to make their own well-informed decisions, but they want to be able to ask somebody for guidance as needed, but not necessarily hand over all of the implementation by force.

Steve Chen (19:58):

Yeah. One of the analogies we’re drawing with our work when we’re sharing our story about what we’re building is the parallels between physical wellness and health and money where it’s physical wellness. We didn’t know that exercise was good for us until 1949. And once we discovered that, which it is an interesting backstory, it’s like, Hey, there was a doctor in Britain, he’s studying the outcomes of double decker bus drivers and ticket takers, and the double decker bus drivers died way younger. They’re just driving the bus all day. Well, he is like, why is this? And the ticket takers are living way longer. He’s like, why is this happening? What’s the difference? And it’s like, well, the ticker takers running up and down these stairs and moving around all day. And so once that happened, people started becoming way more involved, their health and exercising more.

(20:49):

And the whole culture of education, I mean, of exercise happened, and I think, so something similar could happen here with financial wellness, which is, Hey, we realize we’re our own best agents. Essentially. We have to act for ourselves and look out for ourselves. We can use other experts along the way, but we have to get some baseline literacy. And by the way, we should be teaching a shout out to next generation personal finance. We should be teaching personal finance to every high school student in this country, hands down. And it’s slowly starting to happen, but then become educated, find the tools, and then figure out the folks that are aligned with you be. And I think there’s also this regulatory changes. Yeah, we got to be really clear. Who’s a fiduciary? Who’s actually aligned with you? How do people get paid, have more transparency, and that will lead to way better outcomes. But it’s a journey to get there.

Cody Garret (21:36):

It’s been difficult historically for consumers to learn about the benefits of financial planning without being sold something, right? It’s kind of like going to a Ford dealership and asking, Hey, do you think I should buy a car? Right. So similarly, one great thing about me not accepting future financial planning clients and not accepting new clients is that when I provide education to people, it’s not a bait and switch. It’s not like, Hey, here’s some education, and by the way, if you want to set up a free consultation now I can just give it all away without them feeling like, Hey, is Cody actually giving me good education, or is he just using this as a marketing tool? So at this point, I feel really, I’m not financially independent. I can’t just not work again financially, but I have that freedom right now that I can effectively spend my time on efforts that are really benefiting others. And by the way, I can get paid along the way too, but it’s nice to be able to have a business framework where I can just give a ton away and that actually leads to more success financially.

Steve Chen (22:35):

Yeah. Well, I think that’s needed. I mean, there’s so much. Before advice was gated and education was gated by the financial advisors who had a great innovation around their business model, which is like, let’s get paid AUM, which I mean does, I understand it’s an incredible business model for them, but the incentives there lead them to help people that already have money. And that’s why we started our company. We couldn’t find a financial advisor that would help our parents because they didn’t have enough money. So we’re like, okay, well, they can’t get access to help, so maybe we needs to get healthcare.

Cody Garret (23:05):

Yeah, we can’t help you be successful until you’ve already been successful.

Steve Chen (23:08):

Exactly. That’s exactly right. So what’s an unpopular opinion that you have and have developed in the course of building out your offerings that you think is an insight?

Cody Garret (23:20):

I don’t really like rules of thumb. I say that one size fits all, advice hardly fits anyone. Imagine you’re talking about the Super Bowl. You know how they shoot those free shirts into the stands every now and then at football state. How often does that shirt actually fit you? It’s like the extra, extra arch. I like to go beyond rules of thumb. The most unpopular opinion for me is I believe that the gathering and the review of financial information is one of the most important parts of the financial planning process. As we talked about earlier, the output is only as good as the input. When I was a professional musician, if you went into the studio and you had a really bad guitar player, record the guitar parts, and then you went in and tried to mix and master that song, it would never sound good as hard as you tried. Financial planning to me is we think about financial documents as just being black and white. How often do people review their pay statement or their tax returns or their mortgage statement? I believe that every financial document tells a story, not just about the numbers, but tells a story about you, your family, your values. If you showed somebody your credit card statement and they reviewed your transactions of how and where you spent money, do you think that they would be correct if they assumed what your values are as a family?

Steve Chen (24:34):

I think they would have, I dunno if they’d be correct, but they would have insights into what I’m like as a person, A lot of insights. So I think it does reveal a ton about you,

Cody Garret (24:42):

The surfboards behind you. This guy must like surfing, he buys surfboards. Yeah. So yeah, effectively I think that nobody can give you financial advice in your best interest until they understand your interest. So I think people need to spend a lot more time asking questions, including of themselves rather than just trying to find answers. It’s just like how people are going using ai. They’re going to chat GPT, they’re trying to get answers rather than asking, Hey, which questions should I be asking? Ultimately, my unpopular opinion is that if you ask somebody for advice, the first sentence out of their mouth should actually be a question, not an answer.

Steve Chen (25:21):

That is a really good insight. We see this too, where a lot of users come to us and they then say, oh, this is really getting me to be aware of what I should be thinking about. I hadn’t thought about this stuff. And it’s kind of that progression from being one of the, I guess stages of thinking I love is like, Hey, you can be unconsciously incompetent, then you could be consciously incompetent, then you could be consciously competent and ideally you’re unconsciously competent. And I’ll walk around and be like, well, we were unconsciously incompetent about this and our business building new things we’re like, oh, we didn’t even know. We didn’t know. As you deal with and educate folks, which I think it is great, it’s important as you do your education to keep serving other folks. So you learn firsthand. But what are some of those ahas that you see people having when they get into this process?

Cody Garret (26:11):

The biggest one, of course, is that they realize that financial planning goes beyond choosing investments. Choosing the best large cap growth mutual fund is not going to make you financially successful. For example, in the first 10 years of investing, your contributions should be growing faster. You should be contributing more to your accounts than your accounts are growing. In the first 10 years, usually the compound interest everybody talks about doesn’t really start exceeding your contributions until 10 plus years. So the big part is that it’s more about financial planning in terms of realization is there are so many more things within your control than you think you can typically control. How much you spend, how much you earn in a way, how much taxes you pay, how much taxes you don’t pay, right? There’s strategies there, but I think a lot of times we focus on the things out of our control.

(27:01):

We focus on inflation and some of the assumptions that matter in NewRetirement, these assumptions like inflation and investment returns. We focus so much of our time trying to control the things that we should realize are out of our control. Rather than be like, Hey, there’s all these things that I can do in the next month that would be way more impactful. Get the 90% rather than trying to chase the 10% of optimization. One thing that it’s been fascinating to me to realize is how difficult it is for people who spend decades learning how to save and invest for them to flip that switch and suddenly be intentional with their spending. I’m realizing that there’s a lot of financial media out there, great personal finance media. Pretty much every post is, Hey, make sure you save, make sure you invest, make sure you save. But nobody teaches you how to spend money with intention. I’m really passionate right now about what I call value-based spending, which is actually you look at your spending without looking at the dollar amounts at all, only looking at the transactions, not looking at the dollar amounts. If you put the dollar amounts next to where you spend money, you’re immediately going to feel guilt and judgment and shame about how you spent your money, rather than just asking, Hey, how much do I value that thing that I purchase?

Steve Chen (28:16):

Yeah, it’s so interesting. I mean, by the way, I love this framing of, I mean, I see this in life where, yeah, you hit this point where, yeah, you’re starting to produce more from your investment returns versus what you’ve contributed. I’ve always been a pretty good saver and kind of thought about my orientation’s always been how much am I saving? And very often through defined contributions. So saving money in taxes versus, and I wasn’t as smart and good about investing. I’ve gotten way better at that now in terms of, hey, low fee, simple portfolios, just set it and forget it. But I think having that as a step where you’re like, let’s orient you around, understand this could be 10 years saving, savings, savings, but then at some point you’re going to hit this magical point and then after that you’re producing more than you save, which is great.

(28:58):

You can keep saving, which is you should, but this compound growth is going to take off. How do you break it down for people to make it approachable? I think a lot of people, they come to this and they’re like, retirement. We were doing an interview and someone’s like, retirement’s just not for me. I can’t do it. And some people, they don’t really save a lot of money. I mean, a lot of people unfortunately don’t save a lot of money, and then they walk in and they’re like, oh, I’m 60 years old. My friends are getting laid off. Now I have to figure it out. But it’s a little bit, you’re kind of doing emergency surgery at that point versus all the preventative stuff you could do early in the process.

Cody Garret (29:30):

You have to really consider the words people are using. So at my last firm, at my previous firm in doing investment management, people would say things like, Hey, just do this for me. And as a financial advisor, we love when people tell us what to do. We love when people give us permission to do things for them, but we miss that word just when they said, just do this more for me. That word just is so powerful. That word just typically means maybe frustration, maybe a limited belief about their ability to gain the talent. I call it the time temperament and talent to do the thing. When somebody’s frustrated or someone says, I just can’t do retirement. I think two exercises really help. One is, as I mentioned before, putting on one page a list of the financial variables that are within your control and then the variables that are with outside of your control.

(30:18):

It’s very much like a stoic, mindful type of exercise. And I always say simplify the things that are out of your control so you can spend more times with the things you can control. And then the next step to that is actually simplifying kind of sounds funny, but simplifying your financial life. So when financial planning clients come to me, they often have, I work with clients who have over 99 mutual funds and an etf, 81. So they come in with 90 mutual funds, and upon working together using tax optimized approach, being smart about it, not throwing out the baby with a bath water or tax wise, coming in with, Hey, you have 10 investment accounts. You have hundreds of mutual funds and securities, and then transitioning to a place where each of you has one IRA, each of you has one Roth, IRA, you’ve got a checking account, a savings account, a taxable brokerage account.

(31:09):

That is your financial ecosystem. I would encourage anybody here who feels frustrated, how can you simplify? Because usually people add complexity. Financial advisors typically what I call, they add complexity for the sake of job security. The more complex they can make it, the more it’s worth the fee. But even if you’re not working with an advisor, sometimes your complexity is either because you didn’t corral things or consolidate things early on, or you’re trying to over optimize, right? You’re trying to optimize for the 10% rather than getting the 90% right by just simplifying and saying, Hey, each account has a specific purpose. Every dollar has a job and a use by date. Once you can see your whole financial picture on one page rather than 50 pages, then you’re like, oh, I feel like I could actually do this now because I can actually interpret what’s on the page.

Steve Chen (31:58):

That’s super interesting. That’s definitely a theme for our work, and we definitely have work to do there, but totally agree. If you can simplify and make it more approachable and kind of lower the barrier for folks, then it can be become way more accessible. And I actually wanted to loop back on one of the comments you made about becoming an intentional spender. I think one thing folks should realize is that the financial services industry, which I’ve grown up in is line behind people doing a couple things. So one is it makes money two ways. One is debt. So when you’re young, why are credit cards so easy to get and all that stuff? I mean, and why do people get in trouble with credit card debt? They’re given out candy to people that might not be well educated about it. And then we see lots of folks gotten in trouble with credit card debt, student loans, let’s give everybody, I’ll take out a hundred thousand dollars and go to school and you’re like, holy.

(32:46):

He smokes that. Actually someone has to pay that back. I got to have a job that makes a lot of money to pay this back. But that’s one way, and it’s not well educated about that. The other way is, yeah, you accumulating money to your point about the message is always how much do you need? It’s always more, I mean, if you ask a hundred people on the street, how much money do you need to retire? They’re just going to say just a little bit lot and probably more than I have. And why do they think that way? And I think that’s one of the things that is big lot for folks. Oh, I actually have enough money or I can make certain spending changes or lifestyle changes or where I live or whatever, and I could be done. They’re more aware of that.

Cody Garret (33:22):

What’s funny here, I think sometimes we make the assumption that people already know what they spend on the street. If you ask people, how much more money do you need from retirement? They’ll say, oh, just a little bit more, a lot more. But if you ask them, how much do you spend a year after tax? They have no idea. I always say that clarity precedes confidence. Meaning before you can have the confidence to say, Hey, I have the confidence to retire. You first have to have the clarity, which requires two things, knowing the island of what you value and your desired outcomes, but you got to know your numbers. My friend, financial planner, Jenga, she says, cashflow is the wellspring of your financial plan. If you don’t understand how money’s coming in and money’s going out, it’s kind of trying to learn calculus before you know how to do one plus one equals two.

(34:07):

Or I guess in terms of money, it’s like three minus one equals two. So it really comes down to just slow down. I need to do sometimes slow down, simplify and say, what are the next three things that I can do to improve my situation? And sometimes it really does require working with somebody like a financial planner, financial advisor, to help you gain, first of all, to keep you accountable, to actually do the thing. But also the name of my brand is Measure Twice. You might’ve heard that phrase, measure twice. Once we have blind spots and we call them blind spots, we can’t see them. So going back to if you should hire a financial advisor, if you feel like you don’t have the clarity and confidence to move forward with your money, hire somebody to help you measure twice. Say, Hey, you’re doing a great job. Here are some possible places you can improve. And then they can keep you accountable moving forward if you have a hard time staying on track.

Steve Chen (35:00):

One of the things that I have wanted to do forever, and we have not yet done, but now this is reminding me we totally need to do this, is just create a methodology that people can follow. A recipe order of

Cody Garret (35:11):

Operations, an

Steve Chen (35:12):

Order of operations. Today our platforms are a little bit more, sometimes they call it Grand Theft Auto. You can come in and you can go all over the place, which a lot of people like. And then through the app process going all over the place, people actually do start to put it together. So there is an educational approach to that’s very freedom oriented, but I think there’s also like, Hey Cody, here’s the situation. You’re like this. I looked at you do these things, these three things, 1, 2, 3 next, and then just let’s look at that done first and we’ll do that next. But that has not been made totally obvious to people yet.

Cody Garret (35:41):

Well, I do think that idea of even gamifying it, I think it’s really easy to get caught up in the complexity and say, I want to learn about Roth conversions. I want to do backdoor and all these Roth conversion things. I love the idea of saying, we’re going to go through this order of operations so that by the time you get to the Roth conversion part, you actually know enough and have enough information involved that you can actually make a well-informed decision around that more complex area.

Steve Chen (36:05):

That’s awesome. Alright, well, I want to shift gears back to how you see going forward here. Are you a solopreneur right now, individual person doing this? Yes. All

Cody Garret (36:15):

Yourself. I have a hard time delegating, so it’s just me.

Steve Chen (36:17):

Do you think that’s going to stay the same,

Cody Garret (36:19):

At least for financial planning? It will be, but in terms of my one to many education, I might hire two, not necessarily employees, but I might delegate some parts of the process out.

Steve Chen (36:31):

And how far do you think you can scale doing this?

Cody Garret (36:34):

In terms of my financial planner education, probably scale to five to 10,000 would be I guess how I envision a ceiling being, especially in terms of new financial planners joining the industry in terms of one to many education closer to the 100,000 people actually creating their own financial plan within the next five years.

Steve Chen (36:53):

Nice. Do you do your own YouTube channel or not?

Cody Garret (36:57):

I’m planning to actually release most of my financial planning process for free on YouTube. I have videos on how to review a tax return on YouTube. I actually have a video. I walk through an entire financial plan, which again, you’re not going to find that from very, very many advisors out there, but it has over 10,000 views. There’s over 10,000 people interested to learn what a financial plan looks like at this point. But I do plan to go more video in the future. Yes.

Steve Chen (37:20):

Do you know Rob Berger?

Cody Garret (37:21):

I do. I love Rob. He’s awesome. Yeah,

Steve Chen (37:23):

I mean it’s pretty interesting watching him, right? So he started as a blogger and then he sold that and he had a community and other stuff, and then he like, I’m going to do YouTube. And I just looked, he has 180,000 subscribers. We worked through some stuff with him and also Joe Kuh. But it’s interesting watching, I don’t want to say Rob is like a lay person, and Joe really isn’t either. They’re both into this. Rob is, even Rob is a very technical person and deeply into his own money or into how to do planning and just kind of giving it away. But there’s definitely a massive audience out there and I think he’s grown to this in a couple of years. So I think that there’s a huge opportunity out there.

Cody Garret (38:01):

Well, and the retirement planning education Facebook group, which I helped moderate, it’s gone from nothing to over 50,000 members in the last two years. There are a lot more DIY investors interested in going beyond the basics than we might think.

Steve Chen (38:16):

I feel like Rob is more on the power side of this. People that are more closely aligned and familiar with their money and then someone like Joe is like, Hey, for people that are coming in and just getting started. And I think there’s actually a much bigger space to help folks that are just make this approachable and how do you start with baby steps and stuff like that. So it’s good. So I’m excited to see as you start doing much more on your own channel,

Cody Garret (38:42):

What’s funny is Dave Ramsey has baby steps. I think of what I create as toddler steps. Like, Hey, you have your emergency fund, you don’t have credit card debt. Now my content is really good for you. Now you’re at that place where you’re like, how do I invest? How do I set up my estate plan? If you want to go beyond the basics, that’s really my sweet spot. I guess you’d call that mass affluent effectively after the baby steps, move on to Cody stuff.

Steve Chen (39:06):

That’s awesome. I’m just curious with Andy Panko and term planning education, you’re involved with that, but how would you compare what you do versus what Andy does? And I think there’s a lot of value in both places, but kind of interested in your take on that.

Cody Garret (39:20):

Yeah, we’re very similar on one-on-one financial planning. We both really focus on tax optimized retirement planning. Andy is more focused on traditional retirees like 60 plus, and I’m more focused on the early retirees who are retiring in their forties and fifties. So in terms of demographic, a little bit different. Also, I like to show people things. I share my templates and Excel calculators, and he teaches probably a lot of auditory and visual learners. But I’m teaching a lot of people who actually want to get in the sandbox and be more tactile with their planning. So I would say we’re very aligned philosophy and investment wise and how we think about retirement planning and tax optimization, but we’re serving different people with different learning styles effectively.

Steve Chen (40:02):

Right. Yeah, it’s interesting. I mean, there’s education, then there’s giving templates and doing stuff on spreadsheets and stuff like that, and then there’s building around software or contributing or using tools like ours. How do you see this unfolding over the next few years? How do you think financial planning and reaching and helping a lot of people is going to evolve?

Cody Garret (40:23):

I think that it’s going to be not one or the other, but a combined effort. So I think that people are going to be provided personalized education, but they’re also going to be provided the tools with the education on how that tool should be used correctly. So when you think about NewRetirement, it’s actually very similar to how you have it set up and what you’re moving toward. Now. You have the NewRetirement classroom, you have the digital coach is really cool. I think the future too is that financial planning software isn’t just going to give people answers. It’s going to ask better questions or it’s going to tell you which questions you should ask yourself. And by the way, but questions that go beyond the money, it won’t just ask you like, Hey, how much do you spend? How much money do you have?

(41:02):

How much money do you save? It’s going, Hey, it’s going to say, Hey, have you had this deeper conversation with your family about this topic? It’s going to move to more of a collaborative approach, but consumers are going to have the same access to tools that advisors have, and that barrier between advisors and consumers will be very in the best way, very much mesh. So anytime a consumer says, Hey, can I use like, oh, I want access to your financial planning software. I’m like, you can’t use the one I use. But NewRetirement looks and has better inputs, outputs, and looks better than the ones that advisors are using at this point. So I just, I’m not paying to say any of this stuff, but the more I look at it, I’ve realized NewRetirement is not just the consumer version. It’s actually just as good or better than the ones that the advisors are using.

Steve Chen (41:50):

Oh, thanks. Yeah, I mean, it’s interesting. I mean, I still think we have a lot of work to do, but I think where you and I are so aligned is that it’s really about opening up access to, I love also clarity, getting clear first and then building towards confidence. That’s exactly how we’re framing what we’re doing. But yeah, it’s opening up access through mass media, giving the materials away, letting people get educated, and then making it really efficient for them to interact with experts. Because a lay person is not a CFP. You’ve been through a lot of training. You also have seen so many different cases, a user building their own plan, and they’re thinking about their own situation. You’ve helped hundreds and then through mass media, thousands and thousands, tens of thousands of people that you’re going to be able to see these patterns way quicker.

(42:31):

We have the exact same orientation, which is let’s let consumers start, and that’s what makes this really easy or more accessible, and then have the same platform serve both in a completely transparent way, but the advisor knows more. So they’re going to be able to help inform this thing quicker, and there’s still a lot of value for them there. But through that model, we can scale this. I mean, our vision is how do we help a hundred million people? So that is a very ambitious number. I know it sounds ridiculous, but there’s 8 billion people on this planet. I mean, who knows? Maybe it’ll be bigger, right? In the future, there’s a lot of people that could do way better and achieve way better outcomes.

Cody Garret (43:07):

And just to cap that, I think that the future of financial planning is actually DIY investors, or I don’t even call them DIY investors, just people and families. They’re going to have the tools to create their own financial plan together, and then they’re going to go work with a financial planner or advisor to help them adapt. So rather than having a financial advisor compose their financial plan, they’re going to be the composers and they’re going to come to the financial advisor or financial planner to help them arrange their composition. So thank you. From a musician standpoint, people need to be conducting their own financial orchestra, but the financial advisors is not going to be the conductor. It’s going to be the arranger and the orchestrator who makes sure that the right people are in the right seats, playing the right instruments effectively.

Steve Chen (43:50):

That’s awesome. I love that analogy. How do you think technology and ai, but also education, do you think this comes together? Do you feel like there is in five years or whatever? I mean for 10 years, I think for sure, but I would love your take on how you think, what it looks like.

Cody Garret (44:06):

Yeah. I think the funny thing about AI is, even though, of course it’s not real human, but in a way, AI has been built to have ego. What I mean by that is AI has been designed to always have the answer, even if it doesn’t know the answer, again, it doesn’t know what it’s actually saying, but I really do think that making AI more humble, if you could make AI know when there’s more information needed before giving the recommendation, here’s a really fun example for your listeners, is type out some of your financial information. I mean, keep out the confidential stuff, but put some of your financial information into chat GPT and say, what should I do?

(44:44):

And they’ll tell you, I’ll probably invest a little differently or whatever. But rather than that, ask Chat, GPT say, what questions should I be asking myself about my financial situation? You’re actually going to get some pretty awesome questions. So I think AI can give you great frameworks to think about. We either need to learn how to use AI in that way, or AI needs to be aware of our ignorance and take away its ego to start asking. I would love AI to ask us follow up questions rather than just giving us answers to our not quite solidified questions.

Steve Chen (45:16):

No, that’s awesome. Yeah, I agree. Asking it to pose questions that you should consider is great. Also, what’s your confidence level in this answer,

Cody Garret (45:27):

Or how much more information would you need to make this a better answer?

Steve Chen (45:31):

No, I was doing that too. I was like, well, if I’m a 50-year-old male and I have this, what should I do? And then I was like, and if I have this, this, and this and this, and it was producing some more insights and ideas that I hadn’t considered. So there’s definitely something there. But what that looks like, we’ll see. I mean, who knows? Maybe we’ll all have little avatars that’ll know everything about what we would say and just spit out all of our answers. We’ll see.

Cody Garret (45:53):

Well, just last thing here is that AI is not going to replace the human element. It’s actually going to help us become even more human in what we do. So yeah, I think AI is going to be a part of it. Regardless of whether you want it to or not, it’s going to be here,

Steve Chen (46:06):

Right? For sure. Yeah. The more the technology emerges and helps people automate the stuff that’s like, okay, investment management can be automated now, so maybe the future taxes can be automated. Or, Hey, you can generate an estate plan, or let’s size your insurance coverage better. It leaves more space for, okay, what are you trying to get accomplished here? What do you want to do with your time, purpose, all that stuff. That’s hopefully what we get to net

Cody Garret (46:34):

Positive. Yeah,

Steve Chen (46:35):

Net positive. Exactly. Alright, well, Cody, this was fantastic. Thanks for coming out and sharing all these thoughts and putting all the energy into this. I think it’s really good. And what you’re building with Measure Choice Financial is awesome. We’ll definitely link to this in the show notes. For everyone else, thanks for listening to this NewRetirement podcast and all reviews for what we’re doing or for what Measure Choice Money is doing, or welcome. And if you need a financial plan, definitely check out what we’re doing. If you need education, check out what Cody’s providing and hope to be able to join us at the next podcast. Thank you.