Rocket Your Dollar Ep. 17: Living Wealthy with a Safe Money Strategy

Retiring soon? Just getting out of college? Regardless of who you are, you need the money that you can count on being there when you need it. Teresa Kuhn, Founder and CEO of Living Wealthy Financial Group, lives and works by the philosophy of a safe money strategy and shares how she applies it to herself and her clients' lives.

Book recommendations in this episode:

Who's In Your Room By Ivan Misner Ph.D.

Left to tell By Immaculee Ilibagiza

Transcription:

Today I'm excited and proud to have Teresa Kuhn on the show. Theresa was one of the first advisors to come on board when Henry, Rick and I started Rocket Dollar, as well as being one of my mentors since the very early stages of my career. Not only has she been a great mentor to me, but she's also been a great friend and is just one of my all-around favorite people. So thank you for being here, Theresa.

Theresa: Thomas, thank you. That is so sweet. What a great way to start a podcast. I am completely flattered.

Thomas: No. A little bit about Teresa. Teresa is the founder and CEO of Living Wealthy Financial. I think instrumental is not enough to say in regarding the financial health of her clients, working with them to ensure that they're not only getting the most out of their money but out of their planning, and setting them up to live the way that they want. Is that fair to say?

Theresa: Absolutely.

Thomas: So, tell me a little bit about Living Wealthy and what you do specifically.

Theresa: Well, I'll start with the philosophy because I do believe everything starts there and we'll work our way down. I've been working with money for many decades now and I won't say how many decades at the moment because you're so much younger. What I learned over the years is it was important for whatever I brought to the marketplace in terms of finance to be congruent with my understanding of money. I knew I couldn't just pitch and sell whatever. I am not good at risk. I chose a safe money strategy to work with my clients because if I had to pick up the phone and tell a client that they lost money based on some investment advice I gave them, it would be a horrible day for me.

So I chose a strategy that was focused on saving money, a safe place to park money, to save money. And regardless of who you are, if you're just coming out of college and starting working or starting a business or getting ready to retire or in your '70s or '80s, you need safe money. You need a safe money strategy. That's what I chose to focus on. So Living Wealthy, philosophically, is about saving money and we've got a couple of strategies that we use that works, that does exactly what we say it does. We have raving fans as clients. So I've had a remarkable career. Very, very blessed.

Thomas: Yeah. I remember before Rocket Dollar, I was working for you for a little while and I got to see some of those clients' stories and work in your back office a little bit and see a little bit about how you operate and how not only you treat your customers, but how you treat your employees. It is encompassed in that philosophy that everything starts from the top. We see that.

One of the things that were impactful for me when I was in my early twenties when I worked for you was this whole theory of saving. I think a lot of times, touching on the younger side of the audiences, everybody gets hung up about where their money is and how much they're making and not thinking about necessarily maybe their savings rate or earning and saving versus spending. That is so important I think, and oftentimes goes unthought about because you're more so worried about am I making 10% or 8% or 7% when in reality that's less important than if you're saving 20 or 25 or 10 or 15 or however much you can. Then combined with debt, right? Like how much you're spending in interest.

Theresa: Totally. Totally. So before the '70s and really around the '70s, Americans had this concept of saving money and it wasn't about return on their money. It wasn't casing the investment return. It was about it's just the right thing to do. You save money. You don't have a lot of debt. Just like in the '70s, I think, Frankenstein Food came into the mainstream. I think a lot of crazy investments or the whole concept of chasing returns became mainstream, especially in the '80s. The savings rate, not surprisingly, went down to 2% and today I think Americans save less than 2%. It's not to say that there's not a place for investing because there is, but from a foundation perspective, everybody needs to have savings. Everybody needs to have reserves. And so if all you do is focus on chasing returns, from an emotional perspective, because investing is very emotional, right?

Thomas: Absolutely.

Theresa: So from an emotional perspective, if all you've got is money invested and the economy shifts or your investment isn't going so well, you're going to go straight emotional. If you've got a great foundation from a savings perspective you become a better investor. And so Living Wealthy Financial is all about building that foundation. It's like the turtle and the hair, right? That is a very overused analogy, but it works great because if you've got a great savings foundation, you can meet all of your financial milestones and the investments hopefully that turnout only add to that wealth creation. If all you're doing is chasing risk you're going to end up really in a bad place.

If you ask most older people who have invested, who have been around the block, they will tell you that they wish they had every dollar back that they lost in their investments. If they were just equal, right, if they didn't make any money on their investments but had those losses back, they would be farther ahead. If you ask a lot of CPAs how their clients have done with their investments, they'll tell you they don't make great decisions because they don't have that foundation.

Now, where does the self-directed IRA come in? Right? Because I've been talking about saving money and it sounds like I'm not into the investing world. I'm totally into the investing world, but different than the traditional way of investing.

Thomas: Yeah and that's how you and I even met was I was already beginning to work in the self-directed space and one of the great things about ... We can touch on the solo 401(k) specifically, in terms of saving because like you said, investing is only one part of your financial life and saving is another one. Taxes are another one. One of the great things about the solo 401(k) is the ability to reduce your taxable income so much and save a ton of money on taxes, not just savings rates but taxes. Then that money can go work for you, which is exactly what it should do. Right? It should always be working for you, but that investing part that you just touched on, it shouldn't be your whole financial outlook.

Theresa: Exactly.

Thomas: It should be just a piece of the pie. Correct?

Theresa: Exactly, it should be a piece of the pie.

Thomas: So Theresa, you've been working with solo 401(k)s for a lot longer than Rocket Dollar has been around. I mean this is a product that you knew about and a lot of people don't know about since before the inception of Rocket Dollar. So tell me, how does the solo 401(k) fit into your strategy? Because not all financial planners, financial advisors, leverage a tool like the solo 401(k) for their clients. How do you do it?

Theresa: Well, I was familiar with the solo 401(k) before it became mainstream if you want to call what it is today mainstream, right? It certainly has a lot more adopters today than it did 10 years ago. But I went the non-traditional route when it came to financial planning. I worked for a Wall Street firm early in my career during college and before law school, went to law school, went back to working with money. Thankfully, I think outside the box and I'm very curious and so I didn't fall into the traditional financial dogma in terms of planning. I was working with clients and I was projecting out into the future where my husband and I would be based on what we were doing and what my clients had done traditionally and didn't like the outcome. I do have a gift for thinking out into the future in terms of consequences, right? Not just short term consequences but longterm consequences.

I call that third, fourth, fifth-order consequences. And I was able to project out into the future, hey, if I do what I'm being taught to do from the financial planning industry and I'm looking at my clients who have done this for 20-30 years and they're not happy with the results and why aren't they happy? Because they were stuck in traditional investments and didn't have control of their money and had qualified plans where they felt that money was in prison. If you want to be creative with your investments that money was trapped. So they didn't have that opportunity to be creative with their investments and they were locked into investments and had to give up other opportunities because again, they're not taught to save. So I learned about these different strategies like the solo 401(k) and started recommending it to my clients.

Yes, you need a savings plan, but if you can put some of your qualified money into a solo 401(k), that opens up a whole world that you don't have access to, right? Follow the money, right? Why didn't the traditional financial planning industry promote solo 401(k)s? They've been around forever. Right? But no one's heard of them except really only recently in the last, I don't know, five years is when they become more popular. Think about that. Why?

Thomas: Yeah. I think it comes down to incentives, right? It comes down to how do different firms make money? For example, at Rocket Dollar, we make money just on setting up the account. You go to Schwab, they'll give you an account for free, right? They'll pay you almost to set up an account, right? Because they're going to make their money on the backend. And so that's one of the great things about the self-directed space is that there has to be, I mean, companies have to make money, right?

Theresa: Sure.

Thomas: That's no secret, right? I think that aligning incentives is, for us, it's the best way to do it. So we're very transparent about how we make money. I'm curious, how did you align your incentives with your clients to make sure that not only you were incentivized to promote different strategies or whatever strategy was best for your client, but also made sure that you could at the end of the day have a business and make a living?

Theresa: Well, at the end of the day, my clients know I'm an educator. I mean that's really who I am. We set up the practice, our business, to educate our clients. If you come into my world, right, I won't have a long conversation with you unless you read. I give you the materials to read. We pay for the materials for our prospects to read, right? If they don't read, they're not going to pick my brain for an hour and me having to educate them on what they could have read in 15, 30 minutes. Right? So from an alignment perspective, if you come into my world, you understand that where I come from is from a place of education, but I make money on the core products that the strategies that we implement for our clients. If I see that a client has a need or has a use for a product like the solo 401(k), I'm happy to refer that strategy to my client.

I don't have any problems at all. And what Rocket Dollar has done is really from a transparency perspective, created the container for the client to set up their solo 401(k) so that they don't have to worry about the container and they're free to go out and invest their money wherever they want. Of course, Rocket Dollar has to make money doing that, right? Especially when you're providing services, et cetera. It's not the same model as a Wall Street firm where their model is about to let's accumulate the assets and we're going to make a percentage off of the assets. So a different model.

Thomas: Well and I mean the proof is obviously in the pudding because we don't pay you to refer us business to Rocket Dollar.

Theresa: You don't. No.

Thomas: I mean we don't. Yet, you are a source of referrals for us and we see or I see how you practice what you preach because it is true. You do recommend the right product regardless of whether you make money on it or not. I mean, as you said, you have that foundation of your core business and then everything else is for the health of your clients. One of my favorite things and also when my stomach drops is when I get a text from you about someone's account asking me, "Is this person being taken care of?" It's proof that you are out there watching out for your clients because I do get those texts at 10, 11 o'clock at night asking me about very specific things about very specific customers of ours that I frankly am not totally up to date on that exact thing. So that's always fun to see.

Theresa: Right. Right. That is funny. No, we're wired. I don't know why but I've attracted an amazing team and we are wired in a way that we just want people happy. I don't know, we probably all need to go to therapy. That's why I chose safe money, right, as the core of my business. I knew I could not handle a client that would be angry because I lost the money based on my recommendation. At the end of the day you know that we're responsible for our investment choices. Even if you're working with a Wall Street firm, at the end of the day you're the one that pulls the trigger. I think there are certain clients that we attract that Rocket Dollar attracts, that Living Wealthy attracts. It's a client that wants to be educated. A client that takes responsibility, right? Doesn't want to fall under the traditional dogma and maybe they do, but there's a part of them that says, "I want to take responsibility for my money and I just need the container from which I can create."

That container is Rocket Dollar. Right? It gives them that ability to go create. There's so much education, there's so much fantastic information today out there on different investment strategies. Buyer beware because there's a lot of bad information. If you become educated and you want to specialize in a certain investment strategy, like investing in apartment buildings or real estate or gold, silver or whatever, the sky's the limit. What an amazing time to do it in. Having a mentor, 15, 20 years ago or hiring a coach 10 years ago or really in the last 10 years, really people would think, well, go figure it out. It's really only in the last decade where people are realizing I can go hire somebody and not have that learning curve. So having the container of Rocket Dollar and having somebody to mentor you. Oh my gosh.

Thomas: Yeah. Yeah. I was going to ask you, but I think you answered the question, is how do you filter noise and how do you filter bad information? It seems like through mentorship, through coaching.

Theresa: Totally.

Thomas: Same question. There's so many. There are tons of gurus out there, right? If you're listening you can't see my air quotes, but there's a lot of people that tout themselves as expert. How do you filter noise?
Theresa: That is a great question. I think that's the challenge. The challenge today is not information. The challenge today is filtering out really who the real deal is. Right? And I've been very, very fortunate in my life that I've had a lot of real deals and I've had the experience of having relationships with people who weren't the real deal. You've got to look at the big picture and say, "All right, this person wasn't the real deal or didn't give me great information, but what did I learn from that experience or that relationship and how can I make a better decision as to who I'm going to mentor with or who I'm going to have a relationship with?" I've found I like going deep when it comes to working with a mentor. I like taking a general class, if somebody has something to offer, I'll take the general class and if I feel there's a connection, there's an alignment with our values, then I'll take it another step, right? Go deeper with them.

Theresa: So about 10 years ago, that was a strategy that I implemented and going really deep with my mentors instead of just taking a lot of different classes from a lot of different mentors. It's in alignment with the concept and I'll say a book, Who's In Your Room, which was written by Dr. Ivan Misner and Rick Sapio.

Thomas: We'll put that book in the show notes if anybody wants to check it out, too.

Theresa: Oh, it's a great book. It's fantastic book. Really it talks about whoever you allow in your mind space really stays with you for life. So in terms of information and gurus and whatever it is that you choose to invest in, just think about it is going to be an experience you're going to have in your mental room for the rest of your life. So be picky about it. Be discerning about who you allow in your room, right? They could take you down some rabbit trails. You could lose a lot of money and well, it's the famous saying that you're the five people that you surround yourself with, but that's talking on an all the time basis. But even one off interactions can leave you in a bad financial state, a bad emotional state. I mean, a bad experiences can hurt for a much longer time than the experience lasted.

Thomas: I like what you said about going deep because you can spend your life going to seminars. I mean, it's easy, right? There's one on every corner, every weekend, you can spend millions of dollars going to seminars. I think once you find sort of your guru, your mentor, your whatever theory that you want to subscribe to, I think that that piece of advice to go really deep is really powerful because that's where you get the good stuff, right?

Theresa: Absolutely. Go deep and establish an expertise. We see so many people that jump from opportunity to opportunity, investment idea to investment idea and they never go deep. Really, learning and being successful is not a linear journey. It's not a hockey stick.

Thomas: No, as much as we'd like it to be, but it's certainly not.

Theresa: As much as we'd like it to be. It's not. It's up and down, up and down, up and down. But hopefully, right, the trajectory is up. If you're just jumping from investment opportunity or learning this, learning that and not going deep anywhere, you don't establish any expertise. So if there's another piece of advice that I would offer to your listeners, it's choose one thing or maybe choose two but then go really, really, really deep and seek out mentors that have decades of experience. Not to take anything away from somebody in their 20s and 30s and not that they couldn't offer anything, but there is something to be said for wisdom and experience and deep experience. Not taking anything away from a 20, 30 year old. I swear I'm not, because what you've got in energy is fantastic, right?

Thomas: Well in energy and time and then using that time by seeking out mentors that have seen it before is a great place to be standing. A great opportunity. Because energy and time are a powerful combination if used in a focused manner, like you're saying.

Theresa: In a focused manner. I like working, if you're going to choose ... When I was learning the strategy that I work with, I chose several mentors, right, that were completely different. It was in one specific strategy. So I had those mentors that I went really, really, really deep with. Totally different personalities. Totally different people. Then over time I expanded my circle of who was influencing me. So if you have the luxury of choosing different mentors, but going deep in a strategy.

So let's put an example on the table. Apartment buildings, right? Decide you're going to focus on apartment buildings and seek out multiple sources of information and then choose one or two mentors to go really, really, really deep with. I would say make sure one of those mentors has a lot of experience, right? Maybe they're in their 40s or 50s and they've been doing this for 20, 30 years. Then maybe to somebody younger who's been mentored by somebody else who's super experienced and may not have as much personal experience, but has been taught by somebody and has a lot of energy and has a lot of creativity. Right? That would be ideal.

Thomas: Yeah. Well, and then you can hold yourself accountable to them. You can become accountability partners and you guys can come up together.

Theresa: Accountability is the secret sauce to success.

Thomas: So Theresa, because your background is so nontraditional and the way that you approach finances and savings in life is not necessarily mainstream you must have seen some crazy things. Tell us just a story of a client or something that you've seen or something that was either scary or terrible or fantastic or something that you saw that that is just something that sticks out in your mind having worked with so many different people.

Theresa: so I don't know if this is a crazy story, but one of my mentors, Nelson Nash, who I absolutely adore, he passed away this year and I think one of the most beautiful tributes to him is the legacy that he's left. He was a longterm thinker. He was a forester and he thought out, if you're planting trees, you can't be a short term thinker. Right? You've got to be thinking out decades into the future. I didn't appreciate his wisdom then. I certainly do now. I was a part of a tribute that they had him in February of this year in 2019. His closest friends, closest family, came together to just celebrate what he had accomplished and the strategy that he taught people to really embrace and love I think he was responsible for billions and billions of dollars of wealth that otherwise would not have been created.

He was this little guy, maybe five foot six, five foot seven. Southerner. Southern gentleman from Alabama. An economist, self-taught, a writer, a thinker, a speaker. Taught so many great concepts. One of the concepts that he lived by, I mean he was the epitome, was whatever you're excited about, whatever is your passion and whatever your purpose is, you just want to beat that drum and beat that drum and beat that drum. That's your only job, is to just keep beating that drum, beating that drum, beating the drum. It wasn't really until his 80s that he saw, I think, maybe mid 70s, he really saw the success of him beating that drum. When I saw him in February at this celebration, at this tribute, he kept saying goodbye to me. He was so happy to see me and he just kept saying goodbye.

He's like, "I'm not going to see you again. I'm not going to see you again." I'm not great with that and great with thinking about that. I'm like, "No, you're great. Look at you. You're great." I could tell that physically he wasn't very strong and mentally he wasn't very strong unless he was thinking about or talking about his strategy. Right? When he went to his strategy he was on. If he wasn't talking about a strategy, you could tell that he had declined mentally. So that's just one of I think the most beautiful stories that I will live with and remember for all of my life.

Thomas: Yeah, no, that's a good one. It's great whenever you are gone and people are still talking about your work, your legacy, the impact that you left. I think that's what any one of us would aspire to. Is being able to depart and then have people talking about the impact that we made on their lives and how we changed outcomes for them or how we changed their way of thinking or how we made their lives better. I think that's just just about the most noble pursuit.

Theresa: He impacted so many people. So many people. I know for a fact that he knew he was dying. He was having a procedure in March and he died during that procedure and he called me that week before the procedure and he says, "I just want to let you know I love you and this is probably goodbye." After now looking back, I know he went into that surgery knowing that he was not going to wake up. I think he was tired. I think he felt that he had done his work. The legacy was there. That drum didn't need to beat anymore. Gosh, I get so emotional thinking about this. Yeah, that's my story. That's going to be my beautiful story for a long time.

Thomas: I think that that's a great place to leave our episode, but before we do and we're going to do something new that we haven't done on the show yet.

Theresa: Oh, no.

Thomas: It's going to be a quick fire round. I'm going to ask you just a few questions. Leave us with some last things that we should be thinking about. Then we'll wrap up. I want to ask you before we wrap up, too, is how people can get in touch with you? So we'll do that. We'll do that in a minute.

Theresa: Awesome.

Thomas: But real quick, what are you reading right now?

Theresa: So a book that I absolutely highly recommended. It has everything to do with business and it's not going to seem like it has anything to do with business. It's the book Left To Tell by Immaculée Ilibagiza. Oh my gosh. I've met this woman three times this year. She's stunning, gorgeous, beautiful, survivor of the Rwandan Holocaust.

Thomas: Oh boy.

Theresa: Her message is of forgiveness. Such an amazing woman. I emphasize how gorgeous she is because when you meet people that have been through hell and back, they wear that on their faces, right? There's such a thing as face reading and you can see people's anger, people's sadness on their faces.

Theresa: When you read and learn about her story and know the hell that she's been through, and you look at her and she's just a walking angel on this world. Her book is an absolute must read because in business you know what? Crap happens. People don't always show up that well. Right? Forgiveness or lack of forgiveness holds us back.

Thomas: Yeah, I totally agree.

Theresa: If you think in your life you're entitled to not forgive because what someone did was so horrific, if you just pick up this book and read it you will no longer have the excuse or the reason to hold on to that anger.

Thomas: Yeah, no, that's fair. I think that that's certainly going on my reading list now because I hadn't heard of it.

Theresa: You'll thank me.

Thomas: It's going on the Amazon cart. Second question, what are you listening to right now? It could be a podcast or music.

Theresa: I like my old favorite. I do a lot of learning about health and fitness and stuff that's out there. So I love the Abundance 360 podcast. I love anything that is Tim Ferriss and Dave Asprey. I know everybody says that, right? Right now I'm doing a new deep dive into my strategy and reading and learning and listening to a lot of podcasts and videos. I'm picking up on nuances that I've kind of forgotten. That's where my learning is these days.

Thomas: I mean, I think that that for me personally, I mean sometimes I go back and I read our own materials, our own educational materials for Rocket Dollar. There's always a new insight or a new piece or new way of thinking, a new way of talking about something. So I love rereading and re-listening to different things. So totally, totally understand that. Who inspires you?

Theresa: Right now? I've got to say Immaculée Ilibagiza. She is an absolute angel walking on this world and just the epitome of kindness and love. So right now she inspires me.

Thomas: Awesome. What is the best piece of advice that you've received?

Theresa: I've been so fortunate to have amazing mentors and so to think about the best advice, that's a really, really, really tough one. As I get older, this was something my mom told me when I was little, right, and I think all moms tell their kids this, right? Be careful who your friends are. Who's in your room is just another way of saying that. Be careful who you allow in your orbit and your mind and your world because people really leave an imprint. That's really I think if I was to go back and really appreciate that advice that my mom gave me, I think I'd probably do a couple things different. I have no regrets. So, I think that's the advice.

Thomas: Totally fair. Then the last one, what is your biggest goal for 2020?

Theresa: 2020. So, many years ago I wrote down that my goal for my financial company was to have 100,000 people living wealthy. Right? 100,000 clients. We're a far off from from that goal. Right? Things are happening where I think it might be possible really. I think it might be possible. Also for 2020 my family started a home services business here in Austin.

Thomas: Who I also worked for.

Theresa: Yes, you did. Yes you did. That has been a labor of love and really it was a legacy business that we decided to build with our son. Amazing story. We can talk about that another time. We have a goal to have 10 trucks out the road by the end of next year and I think we are on track to have that.

Thomas: That's awesome.