Avoiding Mistakes, Managing Risk & Designing a Life You Love with Chad Hufford - Episode - 534

human beings do not have a good relationship with a future version of themselves. Allen, we treat the future versions of us almost like a stranger, as if, hey, I'm going to make a decision today, and Allen in the future, Chad, they can deal with the consequences. And in finance, we see that all the time. But that's why if you can, if you can be more future-focused, if you can connect the dots between where you want to be in the future, who you want to be in the future, And what you're doing right now, if you do that financially, it's much, much easier to do that in other areas of your life too, in your relationships and your health and your business.

What do moose, 6 kids, and a SmartVestor Pro have in common? We'll find out in From the Backyard to the Boardroom, an episode full of surprises, strategy, and a whole lot of heart. Welcome, enlightened investors, to Streams to Impact, the podcast where wealth meets wisdom. I'm your host, My name is Dr. Allen, psychology professor turned alternative investor, and I empower accomplished professionals create passive income streams that fuel both their freedom and their purpose. If you've been looking for more than just financial advice, if you're looking for meaning, mission, and momentum, you're in the right place. Our guest today, Chad Hufford, is not your average financial advisor. Raised in the industry, grounded in faith, and surrounded by moose in his Alaskan backyard, Chad brings an uncommon blend of financial clarity, coaching discipline, and generational wisdom. Welcome, Chad. We're so happy to have you with us today. So, Chad, you grew up steeped in the financial world, learning Under your father in Anchorage. But beyond the spreadsheets, what were some of your earliest life lessons about money, work, and responsibility that really stuck with you? So, we're going to get personal to start off with here.

Well, I was raised where money was a normal part of conversation, Alan, and I didn't realize that that was so weird. I was also homeschooled in the '80s, long before homeschooling was popular, and we didn't know we were weird in that area. area either. We figured it out pretty quick, but we didn't necessarily do things the way everybody else was doing them. But again, that was all I knew. We grew up talking about budgets and saving and spending habits and things like that. And you mentioned in the introduction, appreciate the introduction, but the Dave Ramsey SmartVestor relationship, we've been partnered with Dave Ramsey. But long before Dave Ramsey, there was a guy named Larry Burkett.

Yeah.

And he had a radio show and that's what my mom had us listen to. And I'm sitting there thinking like, Mom, I'm 6. Why do I— what do I care about budgeting? What do I care about saving for the future? You know, when you're 6 years old, the future is 10 minutes from now. And that's about as far off in the distance as you can think. But that was what I was surrounded with. And it was just normalized for me. And my dad actually taught courses in our church, in our community, personal finance courses.

Wow.

And so, 2 things. Number one, I didn't realize how abnormal it was to have healthy conversations about money. As I grew up, I realized a lot of people only talk about money when it's stressful, when there's not enough, when somebody lost their job, when mom and dad are fighting about it. And it's no wonder that people have maybe dysfunctional views around money when They're 25, 30 years old, and the only conversations they remember is money as a negative. And maybe that even caused mom and dad's divorce. I don't know. But that was an eye-opener for me as I got older. But I also saw the flip side of that. And as my dad was teaching these courses about people, helping people to control their finances so their money didn't control them, I realized that it didn't stay just in finances. When people start getting victory over financial frustrations, they start experiencing clarity and confidence in the money part of their life and the financial part of their life. That discipline, that intentionality, that confidence has a tendency to ebb into other areas of somebody's life. And I saw my dad help people change not just their financial lives, but the trajectory of their life. Because of how they handled finances. And I thought, what an amazing— I was so proud of him. I thought, what an amazing thing. And again, like, I still didn't love the dinnertime diversification conversations and asking my dad, hey, can we get this thing or that thing? And he's like, well, we'll buy some companies through a mutual fund instead of a new bicycle. Like, that still wasn't necessarily fun for me. But I learned to appreciate it more as I grew up, and now I just see that as absolutely priceless.

Yeah. Well, that is extraordinarily unusual, and I find it interesting that, as you had mentioned, it is very unusual, and that you're absolutely right that people typically do not talk about finances and money Until there's a crisis there and they talk about it. Even with, you know, high-income individuals who've worked hard to get to where they are, oftentimes they don't talk about it. What do you think is behind all that? Why is it that people don't talk about money?

Well, number one, I think it's exactly what you said. It's Often they are reactive conversations, not proactive, and they're emotionally charged. And as you mentioned, I've got 6 kids. We've got a few teenagers. You don't have to spend a lot of time with a teenager to know decisions made in the midst of heightened emotions usually aren't the best choices. So you have this tendency growing up to experience money in a very negative context. And I think our culture also makes it somewhat taboo. Um, I think there's shame behind mistakes. You know, if, if, if I did something stupid with my money, if I, you know, maybe I'm buried in debt, or maybe I got scared out of my investments because of, you know, the news stories or whatever. And, um, you know, I, I maybe I invested with somebody who was a shyster, and, uh, and I, I, I lost a bunch of money. Like, there's, there's pain and shame associated with that. And I think the tendency is to hide and bury those things. And I think even on the flip side, when people do well with— when they make good decisions, it might feel— they might feel like people are, you know, is this going to come off as arrogant or will people think I'm bragging? So, so the problem is people hide their failures and nobody can learn from their mistakes. But people also downplay their success so nobody can learn from their victories. And again, I grew up in a house, we just talked about that stuff normally. My parents were pretty open about the dumb things they did with money, but they were also pretty open about good financial stewardship and the decisions they made that helped them. And again, it was one of those things where my parents took the taboo label off of money. So, I think those are several reasons. That doesn't get into all of it, but I also think the complexity of it. My industry does a really good job of making money more complicated, making finances more complex than they need to be. And I'm not saying it's easy. A lot of the most pivotal areas of your life have relatively simple answers, but they're very, very difficult to execute.

Yeah.

But with money, I think a lot of times, people add complexity. to the situation to give themselves distance from the responsibility of acting, distance from the responsibility of doing the right thing. They're downloading spreadsheets and apps and all these different things instead of just simply putting— you put a budget together on the back of a napkin if you want to. It's not sophisticated, but it will work. But I think the intimidation of that complexity keeps people from discussing it openly. I just remember a calculus class from years and years ago. And if you're familiar, Allen, with power series, there's these— there's horrible, horrible equations that would take pages sometimes to solve a single problem. And I remember my professor who used to work for NASA, so he was no chump, but he was explaining this to us and he asked the class like, hey, does anybody have any questions? And I look around, I'm looking at my fellow students like nobody has a blessed clue what's going on here.

Yeah.

But nobody wants to be the guy that says, hey, yeah, I'm confused right now. I have a question. To raise their hand, that feels really vulnerable. And I think the same thing happens with money. It can be frustrating, it can be intimidating. It's very hard to raise your hand and say, Allen, I'm struggling in this area, or Allen, I'm confused. I need some help. We pretend like we've got it all together until we can't hide anymore. And exactly what you said, there's a crisis. Our mortgage is about to be foreclosed. We lost our job, we're buried in debt, we cannot hide it anymore. Now we're desperate, and maybe then we reach out, but it's not under— it's not under proactive circumstances. So those are just a few ideas.

Well, Chad, I, I think this is a really cogent, uh, conversation because in, in some of the research that I have done from the psychological perspective on this, I There are very, very few researchers who are researching from a psychological perspective economics and finance. You have to go out to the economic and finance researchers and investigators to find anything on this, and they're not including the psychological aspect in in their research. And so it seems like just gathering from that, that it's not just typical ordinary people who some— for some reason or the other, we have this intimidation around money, but it's psychological researchers who don't want to touch this topic either. And in terms of the Research that is done in conjunction with particularly positive psychology, they talk about all of the things that help us to flourish and to grow, and they never talk about finances. And yet, as you just mentioned, you have seen people who find their way financially. They gain clarity on their life and their purpose. They gain confidence. And yet, it's not a topic of discussion in psychology. I find that interesting.

Well, and here's where finance, I think, is so difficult because we typically, human beings, do not have a good relationship with a future version of themselves. Alan, we treat the future versions of us almost like a stranger, as if, hey, I'm going to make a decision today, and Alan in the future, Chad, they can deal with the consequences. And in finance, we see that all the time. But that's why if you can be more future-focused, if you can connect the dots between where you want to be in the future, who you want to be in the future, and what you're doing right now, if you do that financially, it's much, much easier to do that in other areas of your life, too, in your relationships, in your health, in your business. Daniel Kahneman won a Nobel Prize in economics as a psychologist. And basically, what he figured out is, yeah, we don't make rational decisions about the future. That's the gist of a lot of his research. And in finances, though, it is so much more apparent, I think, because of all these other things, all these other emotions and complexities that get wrapped up in it. And we simply, Alan, you and I both know, we are simply not designed to be good long-term thinkers. We were thousands of years ago when we were walking across the savanna, nobody was thinking about 20 years in the future because the guy that was planning for 20 years in the future probably got eaten by a lion later that day. Like, you had to worry about surviving. You weren't thinking about where are my kids going to college? You were thinking about, I wonder if I can find food today or fresh water. Or I wonder if I can find a tree that will get me off the ground so when I fall asleep, I don't get eaten. You know, those were the things that we were designed to, to kind of have our survival mindset. We were designed to, to get through the day and to hopefully pass along some of our genes. This whole idea of thriving and flourishing for the long term isn't something that we are— our wetware is not necessarily equipped to do. So, we have to very much re-engineer how we think and how we even see the world around us. Otherwise, we get caught very much, like you said, in that reactive mindset. We get caught in that survival mindset. High stress hormones, cortisol, all those different things make it very, very hard to think about what I want to be doing and who would I want to become 20 years from now.

Yeah. Excellent, excellent points, Chad. And yeah, as you mentioned that, that just caused me to think, you know, in terms of working with people from a psychological perspective, there just really isn't much emphasis upon our future selves. It truly is— I mean, even now, psychology is, I think, coming into the importance of the present moment. But for the history of psychology, it was always a looking backwards and looking at where we've come and what's wrong with us. And I think it's new to the field of psychology to really start looking out to what it is that we can become. I mean, there were psychologists, humanistic psychologists from the '60s and '70s who were looking to Human potential, but in terms of the whole entire field of psychology, it really has been a field of looking backwards, not forwards. So yeah, interesting there. Well, in terms of you personally, you have you've talked to us about your childhood and how that was steeped in finance and how. Obviously, that rubbed off in ways in which you weren't conscious of at that particular time in your life. But what is it that you have found in your own life that has allowed you to actually put these things in place so that you can, can look at your future life, you can look at your future finances and— Well, And design the life that you want from those perspectives.

Well, you already mentioned the psychological aspect of it, and I think that's important to bring up because so often people— some of this intimidation, some of the frustration about finance— people feel like, well, it's maybe a lack of education, maybe even a lack of intelligence. And the people who I see, they're the most successful, in finances aren't the most knowledgeable investors. And when I say successful, I'm not just saying wealth, because if you, if you have an 8 or 9-figure net worth but you still feel scarcity, you don't feel like it's enough, then you're not wealthy. So having, having this idea of, of being Simply enough. I think it is really important. But the people, when I, when I say successful, the people who get to a place of financial independence where they feel like they have enough, they're content. It's a, it's a struggle for people to get there, but they're actually content and they get to a place where they can live off their investments like you talk about all the time, Alan. So they never need a paycheck ever again. And they know the purpose for their money. They use money as a tool to pursue passions and purpose in their life. That's how I look at wealth. The people who have accomplished that—they're not necessarily the smartest; they're not necessarily the most educated—but they're high character. Not always, but the people I work with are. So it—they have discipline; they have grit; they have perseverance; they're patient; they're usually very generous. Those are all character qualities, and I think so often we focus on the educational aspect rather than the. the character aspect of investing. And I think to my parents' credit and by the grace of God, they raised us to be high-character individuals, to be disciplined, to work hard, to have that work ethic. And we were always surrounded with this idea of— my parents never phrased it like this, Alan, but essentially, You're going to meet your future self and give an account for how you've lived your life. And you're building, you're sowing a field of consequences that you will reap at some point. Again, they never use this language, but this is how we were raised. You will reap the consequences of what you're sowing today, tomorrow, and next week. What is that going to look like? We all do it. We're all going to reap The fruit of our consequences. Some of that fruit might be poisonous, and some of that fruit might be amazing. But what we do today matters, and and that was just that was the environment I was raised in. That was the environment I'm trying to raise my own kids in. And like I said, it has is carried well into other areas of my life, into my my fitness and my relationships, how I even parent because it's it's that mindset of. What I'm doing today, am I stealing from or am I serving the future version of me?

So important to individuals with high income and the people we work with. I mean, they know how to postpone gratification. I mean, they've gone through 8, 10 years of training before they even step into their careers and start earning an income. And yet a study I was looking at indicates that even people in 6-figure incomes, even sometimes 7-figure incomes, they're just like you mentioned, they still experience that feeling of scarcity. That, and certainly, I mean, that particularly if they're just relying upon income, that can be wiped out in a minute.

Yes.

And, but I think there's something else to that feeling of security other than just that aspect of that, yes, that income can be wiped out. Because they feel like they're on a treadmill. Many of them just still continue to feel like they're on a treadmill. But anyway, what I also want to ask you, you're a parent, you have 6 children, and what are the lessons that you have learned as a parent that Helps you to deal better with the clients than what you could do so before you became a parent.

Can I go back? I want to answer that question. Can I go back to what you said earlier though about this treadmill?

Sure.

So a couple things on that, and this is just from my experience the last 2 decades working with fairly wealthy individuals. But people who don't have objectives beyond the wealth, it's like chasing a horizon. Like, to use another metaphor, the goalposts can always move. You can always make more money, and you'll always meet people that do make more money. If you're a surgeon, you hang out with other surgeons. There's going to be a guy that makes a little bit of money. Now, if you go to— you go hang out with a bunch of baristas at Starbucks, they're going to be like, oh my gosh, that guy makes more money than I can even dream of. But in your world, it doesn't seem like a lot because everybody makes— Makes about as much as you do, and somebody, at least one guy or gal, makes a little bit more. So, if we don't have finite, specific goals for not just our money, but its objective and how it's going to better our lives, it's easy to just chase that horizon, to just continue to go after this goal line that gets pushed out further and further. And we're usually the ones that move the goalposts. We're the ones that said, hey, I want to hit a net worth of whatever. It's going to solve all my problems. Now, I've hit that number. I still have all these issues. And we just keep pushing the goalposts back. And I think part of the problem is we try to solve money problems with more money. So, if I don't have a good relationship with my finances right now, or if I'm not a good manager of my money, and you cannot outearn Bad financial decisions. You know that. I know that. We've seen it. People that do make 7, maybe even 8 figures, and they're still in a financial mess. We hear about athletes and celebrities going bankrupt all the time that have made hundreds of millions of dollars in their career. And like, how can this guy be— Allen Iverson, just, they said the guy made like $200 million, a quarter of a billion dollars in his career. And when he was filing for bankruptcy a few months ago, like, how does that happen? But Just in the same way we can't fix money problems by adding more money, we can't fix bad driving by adding more horsepower. I've got a 16-year-old daughter that's wrecked 3 cars in the last few months. I'm not gonna buy her a Porsche thinking that, okay, if she just had— if she had a faster car, that would solve all these issues. And you chuckled when I just said that, but we kind of do that with money. Like, this person keeps on getting Or maybe it's me. I'm looking at, man, I keep on having these money struggles. I need to add more horsepower. I need to add more dollars, more zeros before the decimal place. That is going to fix the problem. And it simply doesn't. That's why when we talk with people, we're managing the individual. We look at this more as coaching than anything else. The financial industry has a tendency to focus on the tool. What is the tool that you're using to build wealth? Well, you can— any tool you want to talk about, whether it's a scalpel in the hands of a surgeon, a car in the hands of a driver, the tool is only as good as the person operating it. So, my industry keeps swapping out the tool. Oh, you don't like your mutual fund or you don't like the performance? We're going to swap you out with new investments. But the operator, the operator of that tool has to become more proficient with it so they can wield it effectively. Because a lot of people in our culture right now, it's not that they don't access the right tools, whether that's investments or budgeting software or financial software. It's that they don't utilize the tools that are available to them. So just a quick thought on that. When you asked about, you know, how does parenting help? I think, number one, it showed me a lot of my own weaknesses. For those parents out there, you never knew how selfish you were until you got woken up by your precious little baby at 2 in the morning screaming and crying. And Parenting exposes a lot of your flaws and exposed a lot of mine. So I think I've learned empathy. I am a fairly intense person, Allen. I can come across harsh. That is usually not my intent or my nature, but it's in my face. It's how I carry myself. I've been even told sometimes I got off the stage one time speaking, and the professional speaker who was coming up after me was like, hey, I know you love this stuff. And I can, I can tell the passion coming out of you, but maybe you should let your face know because you look angry up there. So, but that, it has helped me. It's helped me, and I'm still working on it. I've not got this figured out, Ellen, but to be more gentle and tender and empathetic. 2 people last week came in. One guy I've been working with for a long time, another, another gal, relatively, relatively new family that we're working with, relatively new client. This guy I've known for almost a decade comes in and probably the last time I'll ever see him. He's dying of lymphoma and he needed to pick up some paperwork. And we just, we had what might be our last face-to-face discussion. And then the next day, this lady comes in. She retired last week and she has this whole life planned. But 6 weeks ago, her husband passed away on the operating table. So everything that she had planned for in this new life that she's still excited to step into looks completely different than it did 2 months ago because the man that she was planning on spending it with isn't there. So like those 2 situations, again, both were just last week. There's no graph or chart or spreadsheet or analysis that's going to help people feel comfortable. The guy with cancer that came in, like what he really wanted to know is, is my wife going to be okay?

Yeah.

And that's where, like, and I just looked him dead in the eyes and I told him, I said, you know, Barbara is going to be fine. And he's like, I do. And he had all these questions, but that's what he wanted to know. He didn't care about the questions. It was, when I'm gone, will my wife need to worry about money? And so the need for empathy, it was— has not been a strong suit, but I'm getting better. And parenting has made that so much better. And I think just patience in general, giving me patience for the unexpected. You know, as a parent, you plan out how things are going to go. With 6 kids, they never go the way you think they're going to. We had a kid flood a toilet a couple of weeks ago and didn't tell anybody about it, went about their day. It's flooding. It's pouring into the bathroom and it starts dripping through the ceiling. And it's just like, okay, I was supposed to officiate a wedding later that day. And I'm trying to get ready for that. And this is what I'm dealing with. But one of the, one of the things that we try to help our clients work with is a tolerance for ambiguity. This life is crazy. There's things that hit you from left field all the time. And as a parent, you deal with a lot of ambiguity. So, I think those are just, there's a few areas where parenting has, has changed my character. It's made me a better person to allow me to show up. better for the people that I work with? Nobody's ever asked me that question before. I'm serious. Really? Yeah. Nobody's ever— I love that. Nobody's ever asked me that question before. And I don't know until that moment that I've thought specifically about that. I really appreciate that question.

Sure. We've had a brilliant conversation, many things to take away from this, but one of One of the real takeaways for me is that you can't fix money problems with more money. Brilliant statement there. Wonderful conversation here. I've got one last question for you, but before we go into that, share with us how it is that we can get in contact with you and really what it is that you do.

Well, what is it we do? Um, we make sure people don't run out of money or purpose in retirement. That's really the essence of, of what Veritas Wealth Management does. And we do that— one of the big ways we do that is the accountability and the planning to help people avoid financial mistakes. And I'm not saying that I'm above it. You're not above it. We're all human beings. But it's the accountability to, to keep people on their plan when they don't feel like executing anymore and getting ahead of mistakes. So, people, I've made enough mistakes. The folks we work with have made enough mistakes. Let us make the mistakes so you don't have to. And again, kind of keep this stuff out in the open so we can learn about it. So, that's what we do is helping people stay on the right path to where they want to go, making sure they don't run out of money or purpose in retirement. We're on Instagram, veritas.alaska. Website is veritasalaska.com. And don't let the URL fool you. We work with folks all over the US, but we were founded here in Alaska. We got some cachet to it, so we kept it in the web address. And yeah, we're happy to help if people have questions and want to have more intentionality around what they do with money.

Well, brilliant. And so, all of that information, of course, will be in The show notes, but for those of you who are listening, that is how you can get in touch with Chad. So Chad, last question, another personal question. So suppose you have come to the end of your journey and you lay on your deathbed. What do you look back on as your most satisfying and fulfilling experiences in life?

It would be laying there knowing that I've left a legacy through the people that I've impacted, most importantly my children. So, if my 6 kids are living a life of service, well, they're actively making the lives of others around them better because of the lessons I taught them, not just while they were kids, but while they were adults. That's what I want, where there is a population of people out there that are living lives better because they knew me. That's the legacy I want.

Well, brilliant. Thank you so much, Chad, for being with us today. And Enlightened Investors, I know you've enjoyed today's conversation. It's been enlightening, and I've enjoyed it very much, and I expect you have as well. So take a moment to like, share, and subscribe, and we'd be very appreciative if you could give us a rating and a review. So until next time, live abundantly, and we'll see you in the next episode.

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