312. Expert Advice to Overcome Financial Anxiety and Worry with Michael Lewis

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This is happiness solved with America's happiness coach, Sandee Sgarlata.

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Hello and thank you for joining us today. I'm so happy you're here. Happiness Solved is the place where we explore everything you need to become the best possible version of you. This is Sandee Sgarlata, and today I've got some exciting news for our dedicated listeners. We've just launched our exclusive members only portal.

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Michael Lewis, such a pleasure to have you on my show today. How's everything going in your world? Oh, thanks for having me, Sandee. It's really awesome. A lot has changed in my world.

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I've recently accepted the opportunity to join a family practice, so tutor financial has now joined family legacy. It's a great situation for me and it's great for my clients. I can do much better service for them, and the family is great. Our son just came back from a trip to Israel to see firsthand what's going on in the Mideast. So a lot of things to be happy for, a lot of things to be grateful for.

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Thank you for asking. I love it. I love it. So, for the audience, Michael is a CFA, which is a certified financial advisor, is that correct? Analyst.

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Analyst. Analyst. Okay. You started your career on Wall street. You went to Duke University School of Business.

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You have your MBA in finance, which is so hard to do. So I am, like, applaud anybody that can actually get any sort of finance degree. And, yeah, I just love what you're doing. And I love having people on my show where we can talk about finances because it's such a. You know, everybody feels it in some way, shape or form.

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Right? And it's such a. As much as we don't want it to affect our happiness, it's hard for money and finances not to affect your happiness. And so what I want to. We want to.

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We're going to talk about that. But before we get there, just briefly, how did you get to where you are today? And what was it about finance that made you think, yeah, I want to do this? That's my colleague. You know, that's a great question.

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And, you know, my original draw to finance started at an early age. My father was interested in the stock market. I learned interest in the stock market, and I started my career on Wall street and learned from the inside how the products are built, how risk is managed. And my interest has always been on the technology side, how to bring technology and finance together. Right?

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So it's all about efficiency, and it's all about risk and control. That's always been my perspective when I manage money. It's about risk and control. But my family also, through this transition and life. Life sometimes kicks you in the teeth.

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And in our case, we found ourselves dealing with a family member who had substance use disorder. And later we found out it was more stemming from mental health disorders that were undiagnosed. The reality of that is your life has changed forever and you are forced to make some really important decisions under incredibly stressful conditions. And for us, we were making, you know, life or death decisions as related to our child. And I felt that we were alone and we didn't know where to turn.

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We spent a tremendous amount of money trying to figure this out. And we decided when I wanted to retire that I wanted to do something to give back. Basically, I wanted people to learn from our mistakes so that they could do better should they be faced with the challenges of having to take care of somebody who might be suffering from substance use disorder or other mental illnesses. As it turns out, the practice that I'm with, their passion happens to be Alzheimer's. So you can see why the fit works for us.

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But our whole purpose and reason for doing what we're doing is, one. I think Wall street splits the world in two. You either have a tremendous amount of money, in which case you get all the attention in the world, or you don't, in which case you get a 1800 number, and you hope and pray for the best. We think you deserve better. And as a result, the reason that we got into this business wasn't to make a living.

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It really was. As corny as this may sound to help others. Yeah, well, it's not corny at all, because, I don't know, when you come from a place of service, I don't know, you kind of sleep better at night, you know, knowing that you're. Don't get me started. My wife will be laughing when.

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My wife will be laughing. Your audience. When I say I'm having sleep issues, but I do sleep better. I do. To your point, I do feel that what we're doing is important and we can help people.

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And all we want to do is help people who want help. Yeah. Yeah. Well, because at the end of the day, you know, it does take a village. And when it comes to finances, I just remember taking.

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I had to take one finance class in order to get my bachelor's degree, and I'm like an accounting whiz. I mean, I could easily be an accountant. Like, it's something that I'm very good at. It's just not. I'm good at it, but it's not a gift in that it's not something I've ever been passionate about.

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And so I thought a finance cost would be easy. It is. It's complicated. It's like. It's complicated when you start getting into the numbers behind the scenes of a business and all of that, you know.

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So, you know, it's interesting. Is it complicated? Yes, it is. Does it need to be complicated? No, it doesn't.

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The fact that you're good with it and you recognize that you're good with it. When it comes to managing finances, we have to all know what we're good at and what we're not good at. Right. And if we're not good at something, then you shouldn't be forced to do it. And we recently were asked to contribute to a chapter for caregivers.

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Right, yeah. And our chapter deals specifically with financial caregiving. Well, you know, in our particular case, we talk a lot about financial caregiving with respect to somebody who is elderly or disabled or just unable to do it. But if you expand the definition of caregiving, I mean, a husband is a financial caregiver to a wife. Right.

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So there's always that dynamic that you are financially responsible for someone else. And that responsibility shouldn't just be given to somebody just because they're local or they're, as you said, they're good with numbers. It's a good skill, but it's not a complete skill. Here. I know what I'm really good at.

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My specialty, and I actually have a title here, it's called chief behavioral officer. So part of what we do here in this practice, and we believe strongly that the actions we take and the decisions we make have more of an impact on your financial success than skill and knowledge combined. Okay? So looking at the behaviors is essential to what we do. Now, I also happen to be fortunate.

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Even though I have my CFA, I'm surrounded by, you know, Todd. He is our chief investment officer, and he specializes in building and constructing portfolios. And then Josh is the chief planning officer. Well, he takes all the data that Todd and I provide, and he puts together a long term plan. It's a team, you said it before, you know, it takes a family, right, or a village.

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I forget the exact quote. But the point is here, we can't all do things on our own. So when it comes to finances, the skills that you're really good at are probably very good at organizing your data, as an example, which is fundamental. If you're going to make financial decisions, you ought to know. And this is where I think some people just don't.

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Are unable to really take control of it, is they don't have all the information. Right. And if you make decisions with partial information, you know, you get a result that may not be what you're really looking for. Talking to you, I'm guessing you're really good at organizing it and understanding whether or not the numbers, the data itself is accurate. But you don't know how to interpret what the numbers mean.

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Well, that's. That's what we do, right? We interpret the numbers. Financial advisory, in the broadest sense. When you're talking about helping people, it is our way of basically hearing your story through your numbers.

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Numbers never lie unless you lie about the numbers. Right. But at the end of the day, the numbers just tell a story. And the problems that we see is that when people try to interpret the story themselves, they introduce this cloud of emotions and filters that they bring to it. So by the time the numbers come to you, you've already built in a series of assumptions and biases on how to interpret it, that your conclusions are unfortunately, you know, not grounded in fact.

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They're grounded more in emotion. And when we make decisions based on emotions, they tend to not be the right ones. So our job is to take. Yes, I see. I know.

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I was just gonna say, what you just said is true in every facet of our life, right? Because we put our own perceptions and we make up stories about whatever has happened around us, whether or not it be true. We see what we want to see, we hear what we want to hear, and then we act on that. So it's no different. Right.

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When you can take any situation in life and what you were saying, like, people do that with their finances, we do that in life anyway. So what is your remedy for trying to look at things with neutrality?

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Wow. So I'm struggling with the word remedy because the word remedy implies. No, no, no. It's fair. It's fair solution.

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When we talk about finance, sometimes we need to address what the common belief is, because some of the things that I do and what we do as a practice is not always generally widely accepted throughout the community. We believe behavior is fundamentally important, but we believe that every problem that we're trying to face is unique. Therefore, when you come to us with a problem, it's a little bit different than when you come to a doctor. Let's say my arm is broken. All right, we know the protocol.

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The protocol is, you said it, you do physical therapy and you recover. When you come to us with a financial problem, you could have a debt problem that is due to the fact that you are a reckless spend thrift and you just are out of control. You could have a debt problem that is the result of a catastrophic accident that you've incurred, and as a result, you are unable to work, and so your income has dried out. You can have a debt problem because you had to make a conscious decision to go to school, and now you have to incorporate debt. So I come to you with the problem debt.

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But if I offered a solution just based on that problem, and this is why I'm reacting to what you said, right? Well, each one of those solutions, the problems that they came to me with, are going to require a different solution. Right? I can't just put each of them in a cast and then come back in six months because that won't work. So what we do, and I think this is why the aspect, and this title of chief behavioral officer to me is very important, is we need to understand fundamentally, and we're not here to pass judgment.

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We're here to dispassionately just review the evidence and make recommendations on how best to proceed. And typically, as you probably know, you can tell somebody what to do, but that's not the same as them doing it. And so we can say, you need to do better spending control. And most people will say, yeah, yeah, I know that. But, you know, what am I doing?

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I don't do it. People know, and I'm looking at your smile, and I think, you know where I'm going with this. People don't. People know what they need to do, but they don't do what they know they should do. And it's not because they're stupid, okay?

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It's because there's something going on in the way that they were thought about money and their relationship with money that either compels them to take a destructive action or an overly cautious reaction. As examples. In behavioral finance, there are all sorts of these kinds of examples. To us, it's fundamental that we understand it and help them understand it, because to solve financial problems, you have to make decisions. You have to assume a certain level of risk.

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And you have to be pretty clear about the goals you're trying to achieve. If your behaviors are stopping you right, then there's nothing that anybody on this planet can do short of taking it, taking all responsibility from you and basically treating you like you're on a, you know, like Britney Spears. I was just about to say Britney Spears. Which is not doing her, and we can talk about that, too, and my thoughts on it. But short of doing something like that, then the best way to deal with it is identify the situation, identify the way forward, and the behaviors that are needed to support that behavior going forward.

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And we think, and me in particular, that there's too much of an emphasis on just returns and there's not enough emphasis on holistic. How are you thinking about money? How are you thinking about your relationship with money and how it impacts other people? So to us, behavior is fundamental to coming up with a problem. I guess we're more of a psychiatrist than we are a doctor.

00:16:39
Yeah. And I love that you said behavioral finances. I've never really heard that term. And as you were talking, I'm like, this makes so much sense. So I want to talk about the fears that people face, but before that, I want to finish up what we're talking about right now, which is you're talking about those behaviors.

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How do you identify those behaviors and what are things that people can do? Because if you're an alcoholic, like, you know, I'm an alcoholic. Yeah. It's bad for me. It's causing me all sorts of issues, blah, blah, blah, blah.

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Right. If you have a money with, if you have a problem with money, it's a little bit different. Like, sometimes it's hard to really grasp, like, what can people do? What are just, are there any, like, initial steps that people can take. Yeah.

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To start shifting that behavior. Well, you know, what do they do? You mentioned you're an alcoholic. So what's the first thing they tell you? You stand up and you go, hi, my name is Sandee and I'm an alcoholic.

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The first thing you do is you admit that you have a problem that you have. So the first thing you have to admit is, all right, I'm not great at it. More times than not, the biggest problem we face is people just feel that they're either too embarrassed to ask for help or they're afraid that they're going to be perceived as weak if they ask for help. And the natural reaction is to try to impress others that you're smarter than they are. Right, right.

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This isn't a contest. I mean, I'm sure before you admitted that you were alcoholic, you probably went through, I got this. I'm better. You know what? That's not me.

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I was using that as an example. Just so we're clear. I was using that as an example. I don't need to single you out. Right.

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All right. But I've seen it enough, and you've probably seen it enough to say that, you know, most people will, before they seek the help, think that they're different, special, and they can do it on their own. And some can. Some can. Most can.

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But the first step you need to do is admit that you want the help. If you want to help, the next thing to do is understand what you do well and what you don't do well. So when you work with us, the first. One of the first things we do is we administer a questionnaire. And if you want, I can provide a link separately to it.

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And what it does, it just gives you a 15 minutes questionnaire to help you identify some of your subconscious attitudes and biases towards finance. And what that does is it just allows you to take a step back and go, oh, okay, so I'm not hopeless. There are things I do well. Recognizing the strengths that you have then allows you to be a little bit more open to improvement. Right.

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It's a lot easier for people to go, I want to be here. I'm here. You know, I can't get there, versus, I want to be here. Oh, I'm here. Okay, well, you know, I can deal with that.

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And in cases where there are couples. Right. And all of a sudden, and we see this a lot, where couples fight, well, what do they fight over? More times than not, it's over money, right? Yep.

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And you would minister the same questionnaire when you realize that the two of them are not on. I don't want to say the same page. And that was about to say, but what I'm. What I really meant to say was their attitudes and perceptions about how they view money and how they hear and listen to issues around money are different. And so when they start to appreciate there are significant others strengths and weaknesses, the conversation becomes more cooperative versus competitive.

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And so we administer that. Once we identify that, then as we build the plan, we start looking to see where in the plan are there opportunities to improve behaviors. Maybe we see your budgets way out of line compared to what we see in other people. We might start to ask about, you know, what's going here, what's driving it. Maybe you have an inordinate amount of cash saved up under your pillow.

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And we might want to then probe about why are you so conservative? And it's not about blame or dispersion. It's just about understanding and therapy. So it's an ongoing process that we incorporate in our practice. Love it.

00:21:25
Yeah, no, that was great. So what would you say, and can you give me an example of what a healthy relationship with money would look like? Yeah, sure. A healthy relationship with money is the ability for you to live a lifestyle that you want spend according to, I'm going to say, your short term and long term needs. Right.

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And be comfortable making decisions. It's a lot. And most of us say, oh, I do that all the time. So maybe it's better to look at an example of what I would say is an unhealthy situation that could very well look like a healthy situation. Right.

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Okay. So I knew of a couple, I worked with a couple, and they were tremendous savers. They were very suspicious about everything and everybody. Not surprising. You know, the generation was, you know, the great generation.

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So they lived through World War Two and the depression, but their retirement positioning was not great. And the reason it wasn't great was because their conservative approach to investing made them fall behind in inflation. Right. And so their perception of risk was the risk of losing everything, which you can understand if you were in the Great Depression and you saw people lose everything and you, so your responses, don't give it to brokers, don't give it to banks, you can't trust anybody. And you could understand that.

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Right. But the reality of it was, is as horrific as it was, you know, long term, it was more of a blip than it was a significant and fundamental change in the way we ought to do things. So somebody who was adversely affected by that, I'll use the word traumatized, I can't come up with a better one. Is doing the best they can with the knowledge they have, but they're hurting themselves. So they think they have a healthy relationship with money because they're protecting it.

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And I'm saying your relationship with money is over protective. And I understand why. But do you understand that by doing what you're doing every year, you're actually losing money? So the very thing you're trying to protect is eroding. That is, I think, a very reasonable example of what I would call.

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It's not unhealthy. I mean, when we think of unhealthy, we think of borders. Right. We can go to the extreme with people. Right.

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But we don't have to go to the extreme to find opportunities to improve. Right, exactly. So let's talk about fear, because I think fear is one of the things that can really debilitate your ability to make money and attract more money into your existence because of the resistance that you're pushing.

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What are some. Are there any tips for people when it comes to the behavioral finance world to help them to ease those fears so that it doesn't become overwhelming for them? All right, so that's a great question and doesn't have the easiest answer because it's almost like telling somebody, if you're afraid to go swimming, what can I tell you to ease your pain so that you'll become a swimmer. Right. Right.

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Jump in the water. So that's the advice you give them? Jump in the water. Right. And.

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And most people, most other advisors, that's what they would do. But there's a process. You have to get to jump in the water. Right. You got to get comfortable with jumping in the water.

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So if you have a fear, and we just talked about it, the first thing you have to do is recognize what that fear is. Right. And if you can recognize that, you're. Wow, you're so far ahead of the game. Most people just know they're afraid, but they don't even know of what.

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And I would say most fear when it comes to finances. Most. Yeah, I think I can be comfortable using the word most are out of ignorance, and ignorance can be fixed. Ignorance can be fixed. You can learn about finances.

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You know, I don't want to sign an insurance policy because I can't read it. Never mind that. It's the right thing for you. Right. But you can fix that.

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Right? You can hire somebody to read it for you. Yeah, we'll do that. Or you can learn about insurance and understand how it works. So get educated.

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And there's all sorts of ways to get educated. You know, my company, due to financial, we named it. That's what it was before I joined you. We named it because part of what we do is we educate you. So if you want to deal with your fears, there's no quick fix for any of this.

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But what there is are things that you can do, you know, to identify and address them, and we think that's important, and that's part of what we, you know, it's an important part of what we do. So just facing it like anything else, you got to face your fears. Just face it. I can't. I wish I had a quick answer for you.

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I mean, there are a lot of people that would love that magic pill or what have you, I've never found it. And so, yeah, base it, understand it, and commit yourself to working at it and you can overcome it. Yeah. And education. I think that was the big thing that you said that I heard.

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That is one of the most powerful things. I mean, they always say knowledge is power. It is. And just understanding it totally, totally is. Couldn't say it better.

00:28:02
Yeah. I love this because I hadn't really, until we started having this conversation, thought about finances from a behavioral standpoint, and it makes complete sense that our behaviors are going to drive the bottom line for it's going to drive our bottom line. That's awesome. So where can people find out more about some of the services that you provide and, yeah, and provide your website, email address, whatever you like to provide. So, yeah, I'll give you our website, which is www.familylegacync.com.

00:28:49
My email is Michael@familylegacync.com. I'd love for anybody who wants to talk about behavioral finance. I don't like leaving my cell number, but if you reach me via email, I'm happy to provide you a link to that questionnaire that we talked about. And yeah, we're here to help if anybody wants it. Awesome.

00:29:17
I will make sure your email and the website are in the show notes so people can easily have access to that and anything else that you'd like to share. Before we wrap this up today, the. Only other thing I would like to share for anybody who thinks that this is a topic that they just can't master, I'm going to tell you that you will never master it, but you can get comfortable with it and don't fear it. Get comfortable with it. At the end of the day, it's your money.

00:29:55
No one's going to care about it more than you, except for us. Shameless plug. But more importantly, it is your money. Okay? So if you're going to seek someone's advice or you're going to take control over it, then get the information, get the knowledge, and do it right.

00:30:15
But don't be afraid to do it. Nice. Love it. And managing your money, your finances, is just like everything else. You know, I always say happiness is a choice and the choice is yours.

00:30:26
Well, having that healthy relationship with your money and your finance is also a choice, and the choice is yours. So there you have it. All right, folks, thank you for having me. Thank you. Thank you, Michael.

00:30:43
It was a pleasure seeing you again and take care. Thank you so much, everyone.

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