The course starts with an exercise that helps you figure out what are the 5 or 6 most important values that are your values, then you build purpose, personal life goals, personal purpose, the meaning of life stuff. You go, “10 years, 5 years, 3 years, 2 years, 1 year’s goals, what am I doing in the next three months to get closer to those goals?”

That process undergirds every review you do on an annual basis and everything. It’s not about how you’re doing relative to a neighbor or an index. It’s about how you’re doing relative to your goals. Are you true to your values? Are you getting closer to the things you want to accomplish? That’s everything. We get distracted.

You mentioned Behavioral Biases or Behavioral Finance. We are so distracted in our culture by every headline. Now, especially, you hear things like inflation, not inflation. Tapering, not tapering. Bitcoin, not Bitcoin. Actually, the new Bitcoin ETF is inline but that’s a distraction. What do you value? What are your goals? Focus on that, that’s how you get there.

A lot of the investors we work with invest in “alternatives” which is funny. We’ll talk more about real estate and how you incorporate it into your client’s portfolios. Insurance and real estate and these things were called “alternatives” when they were around before the stock market. It’s just funny how the industry has changed these things. We all get distracted. “Why is the stock market up? Why is it down?” You turn on CNBC and these pundits are coming up with all these things.

One of the things I love to point out, even from people who aren’t big fans of financial advisors, is that a financial advisor provides value by helping their clients stick to a plan. As humans, maybe you can share a little bit more about this. Why is it that the average investor underperforms the market so poorly, in your opinion?

In my opinion, there’s a ton of research on this. The reality is they don’t follow a plan. They’re shooting from the hip on a regular basis. There’s a choice. My favorite industry guru talks about it this way and says, “It’s goal-focused, planning-driven. If it’s not goal-focused, planning-driven, it is market-focused and performance-driven.” You think about the headlines. The headlines always tell you, “This is going up or this might go down.”

That’s the underwritten message. The underlying message is, “Do this now because this thing is going to happen soon.” No one has any clue what’s going to happen next. That is a lie. It’s a motivated lie. Someone’s trying to sell something. They’re lying to get you to buy something or they’re not smart enough to recognize that they’re not telling the truth. It’s either motivated or it’s stupidity.

No one knows what’s going to happen next. The whole idea of trading on headlines or even paying attention to financial media as anything more than entertainment is a mistake. You said this right, 20% of an advisor’s job is writing the plan or helping a client write the plan. Eighty percent of the advisor’s job is helping them stick to the plan, stop shooting from the hip.

It’s anything we recognizes. You go to the gym, you have a coach. My coaching clients, I tell them the big piece, you got the plan, you got the system, you have the resources but it’s the accountability. It’s so important. If you’re reading and you’re like, “I don’t know about a financial advisor,” know that it’s just any other coach. You mentioned much of that value, 80%, is that accountability, making sure you stick to that plan.

The reason economics snake oil sells is that people want to buy it. People want somebody to tell them what’s going to happen next.

I might not be right.

There’s plenty of people that will tell them, “This is what I believe. This is what is going to happen. This is what’s going to happen.” That they’ll use all kinds of phrasing to make it seem they know what they’re talking about, but they don’t because it’s not predictable. The future is not knowable in any way. That doesn’t mean that advisor doesn’t provide value. An advisor that says, “We know that volatility is real. We know the things that zig and zag. We know how to build a plan that incorporates the zigs and zags. We know how to stick to that plan,” that is enormously valuable.

You talked a little bit about your progression throughout your career. I’d love to start to talk a little more about your book, why you decided to write it and specifically, as I was reading through it, your happiness pillars. Why on Earth did you spend time writing about happiness in a book on finance?

First is the source of the book. The reason the book exists at all, as I was sitting with a client and you might remember 2008, 2009 Great Recession, there’s talk of the world economy never recovering. This is in the middle of that. This conversation is toward the tail end of that. A client who said to me after I chatted with her for about an hour and a half sitting in our living room and going into the call was like, “I’m not going to make my contribution this year to my SEP IRA. You can deposit the max contribution.” She’s going to deposit. She’s done it every year for a long time. It’s never been a coincidence with the worst financial disaster she’s ever experienced.

I was like, “I don’t know what happens next.” Like I said before, nobody knows. It’s not predictable. You can’t tell. I do have good confidence that eventually, this thing will turn. When it turns, this moment in time, March of 2009, will have been the best possible time to put any money to work, whether it’s in real estate or the stock market. This will be the ideal time. I don’t know how long it’s going to take to get there. I don’t know when it’s going to stop going down. I do know that ten years from now, we’re not going to remember this as a critical juncture for our portfolios. It’ll be a nice piece of history.

They’ll write books about it. It’ll be important but it’s not going to be a critical thing for portfolios ten years from now. Markets fall, markets are self-correcting. Companies are always every single day working to improve things. The fact that markets go down doesn’t change how companies work. These are businesses and businesses work around problems. That’s what they figure out. The source is this conversation and she said to me, “Jonathan, if you ever write a book, I’ll write the forward.” She wrote the foreword of the book, and it was fantastic. The second part of the question was?

We talk about your pillars of happiness in the book. As I was reading through it, I just noticed that a big chunk of the book is talking about happiness. I was curious what motivated that in a book about personal finance.

No matter who you are, where you’re born, what your circumstances are, life is always going to give you challenges and you’ve got a choice. You can focus on those challenges and you can get mired in them. The challenges can be the thing that you spend all your time on. When you do that, that affects how your brain works and your brain will then see all the reasons those challenges hold you down. You can replace that conversation with that thought process in your mind with things that you want and things that you hope to accomplish.

That’s not stuff to buy. That’s relationships, generosity, positivity, all the things that we know that research has shown, not just academic research but thousands of years of religious studies, students, monks, nuns, psychologists of now, all the behavioral finance literature, we know what creates well-being. This isn’t the mystery.

The first part of the book, there are 6 or 8 or 10 things you can ignore. The middle part of the book is the happiness pillars. This is the stuff that you should build a life on. The easy part is the math. That’s the last part of the book, where, “Here, if you do this and this, this is the order. This is what you do. You can build your own financial plan if you just start at the beginning, ignore this crap, engage this, embrace this positive stuff that is the source of well-being and do a little bit of math around planning.”

I spent a lot of time on this. I’ve incorporated it as a gratefulness practice. You can read it, you can see it, you can see the research. I love that it talks about if you’re focused on what you’re grateful for, you can’t be angry. You can’t be upset. It totally changes. That’s one of the things I’ve done at the beginning.

One of the important things about that is not just the gratitude practice but all the mental energy you spend is your brain creates grooves. You have synapses that connect, and form thought processes. If you have a daily practice of meditation, mindfulness, gratitude, and willingness to be open, you are creating a groove in your mind to support better decision-making, less reactivity, and more awareness of what you want out of life. That awareness brings it to you.

If you create that groove, instead of the woe is me groove or the, I have this and this obstacle groove, it can do nothing but improve life to the extent that it affects the gray matter in your brain. If you meditate, if you’re mindful about these things, it changes the actual heft, the weight of your amygdala, which is your fight or flight center, versus your frontal cortex. If you meditate on bigger frontal cortex, which means less reactivity, smaller amygdala, seems a no-brainer.

I’ve read multiple books now in meditation and I’m reading Becoming Supernatural by Joe Dispenza. If there’s one thing you take away, if you’re reading, from what Jonathan said, it’s that the fact that we all know those people in our lives, they complain they talk about, “I have a friend from Collins.” You got to stop it with the complaining because it does wear those grooves in your brain. Walking the same path every day or having that wagon that rolls down the road, and then you’re stuck in that rut.

If you want to get unstuck, it’s just been amazing to see that. Coming back around, we talked about Buddhism and one of the key tenants of Buddhism is being present. How has Buddhism contributed to your financial advisory now? At the core, we’ve talked about a lot of different stuff but what can someone expect that’s going to be different than your traditional advisories out there?

Everyone in my industry, you’re going to sell yourself. They’re going to say, “What’s different about you?” I will say that there are a few things that are different about us but not in an absolute sense. There are great advisory firms, RIAs, fiduciaries that are planning first, that focus on goals, planning and will tell you that they don’t have a crystal ball when it comes to investing. I would say any one of those kinds of firms is a great place to work, is great a place to find an advisor. Anyone that’s not trying to pitch and believe me, if you come to them with the desire for performance, then many of them will talk to you about it.

If you can avoid bringing it to them and understand, be open to the idea of, “Let’s set some real values out. Let’s talk about goals,” and there are lots of advisors out there that will do this. They’re all great. We’re not a perfect fit for everybody. We like to see face-to-face with people. We like to work with people that want to delegate, that run small businesses and that isn’t seeking to spend every penny before they die. They want to leave some legacy. There are certain things that we will look for in a potential client.

We refer tons of people to other advisors. We had a team meeting and we changed the advisors to whom we refer because we discovered that one of the people that we used to refer to, we thought she was only doing financial planning but turns out she’s selling insurance at the same time. Nothing wrong with that but you can’t be a fiduciary. You can’t just look at the values and the plan if you have a product in your back pocket. We want to encourage people to find advisors who focus on that thing. That’s what we do in essence.

I want to end by talking about your three life-stage courses and what people can expect. Before that, we talked a little bit about real estate earlier. Our readers, a ton of them, are real estate fans out there. It’s a huge part of what we do at Next-Level Income. How do you guys look at that? Financial advisors, talked to us and they’re interested in what we do. Maybe we’ll say mainstream financial advisors, a lot of them don’t know what to do with real estate because it doesn’t fit into their box.

They don’t know what the price is on a regular basis and don’t know how it fits into their compensation schedule either. For those clients that come to you and say, “Jonathan, I have 25%, 50% of my portfolio in real estate.” I know the answer starts with the why but how do you take that into consideration when you look at someone’s financial plan and how it all works within the general financial scope of things?

At the beginning, I lay out my history. I’ve been a real estate investor for twenty years and I have no problem with real estate investing. It fits in. I operate with two fundamental investments, there’s equity and debt. Everything we can invest in is some formulation of equity and debt. That includes real estate. Real estate is a business.

It has a cashflow like a business selling widgets, whether you approach that by independently owning and managing a duplex or investing in a REIT that’s publicly traded. Also, investing in somebody’s multiunit or if you invest in somebody syndication, these are all ways of being an owner of equity that has a cashflow that comes from real estate.

It’s not that much different than other things depending on how you hold your real estate. There is a misnomer about the passivity of it. If I own rental real estate, “It’s a passive investment.” No, it’s not. I’ve been sued by somebody that was a tenant that fell down on the steps and that’s not passive when you’re in a court case. I have had trees fall in the backyard of these places and you end up having to call people out. It’s not passive or getting the chainsaw out yourself.

Answering phone calls on your honeymoon, not passive.

It can be a wealth-building tool, not passive. It’s understanding that it’s just another investment that any other investment can fit in. One of the advantages of not being a broker, I don’t have a product that I’m selling. I’ve got a client who has a software business and we talk about running the software business. Real estate is just running a real estate business and it’s part of the plan. It’s an asset, it has debt on it. It should be just part of a plan.

I love your experience in real estate and your past history, especially for people that value that as part of their portfolio. It makes it not only easier but also more valuable when your advisor, your coaches, the people that you work with understand how it fits in. A lot of investors, they get a kick out of having some time that they spend on that, whether it’s swinging a hammer or it’s just looking at a financial balance sheet.

Not me. I’m not swinging the hammer.

I spent enough time doing that myself as well. Let’s wrap up. I was looking the courses that you had and we can’t wait to tell the audience how to get one of them here but why are your three life-stage courses, and what can one expect if they go on and check out these three different courses that you have?

The idea is there are financial planning or financial literacy topics that fit based on if you’re a college student, early career or late in your career. If you just think about that might be you as a college student. The things you are going to be worried about are our debt credit score. “Do I want a credit card or a debit card? What does that mean?” It’s just basic financial literacy and that is our Foundations program.

The Pathways program is a little bit larger than the foundation’s program. It includes a lot of substance and foundations but also includes a simple investment education. The last one is Legacy. It strips out a lot of the debt and credit profile and adds in philanthropy estate planning. “What’s a trust? What’s a will? How do you give money? What’s the CRT?” these kinds of questions. That’s something that happens late-career, late 60’s, maybe 70’s. The point is, there’s something that’s specific to an individual and that’s almost always a life stage. What I found though, is that most people never see any of this stuff.

Even if you’re 60, you may know because you’ve read a lot of magazine articles and you’ve cobbled it together yourself, which you may not know what the difference is between a debit card and a credit card. You may not have ever checked your credit profile. Plenty of people have never checked their credit profile, which blows my mind. These lessons are important. One can purchase the package, which has all 18 of the modules, or one can choose one of these smaller 7 to 8 module courses.