Ep. 74 How Buddhism Can Make You Happier And A Better Investor With Jonathan DeYoe

Welcome to the Next Level Income show where it's our goal to raise your income, your investments and your life to the next level. I'm your host, Chris Larsen. You can get a free copy of our book as well as more information on our institutional quality assets@nextlevelincome.com just click on the Invest link and you can learn about our self storage fund as well as our other opportunities that we have for investors. You also get a free copy of our book by clicking on the book link. You're not going to want to miss today's interview with Jonathan Dayo. Jonathan shares how being a Buddhist hand it actually makes you a better investor and how starting with happiness is really the secret to success not only in investing, but also in life. Today's show is sponsored by Money Insights and their investment optimizer strategy. In my book, I share how I use the same strategy starting over a decade ago to invest my money in two places at one time. This strategy has been used by the wealthiest for generations for estate planning, minimizing taxes, preserving wealth and and increasing stability for their investments. Now you can do the same thing. In addition, you can build a plan to build an emergency fund, pay for college, fund a business plan for retirement, and ultimately optimize your total financial picture. To find out more information, check us out at the banking link@nextlevelincome.com on today's show we have Jonathan Dayo. Jonathan is the best selling author of Mindful simple practices for reaching your financial goals and increasing your happiness dividend. He writes and speaks about the intersection between love and money. And on the Mindful wealth podcast he talks about wealth in today's social context. He's been investing for 40 years and has been a financial advisor for 25 years. He's also been running his own financial planning firm for more than two decades and believes that financial education and planning are the dominant levers we can pull to improve client outcomes. Jonathan, welcome to the show.

Thanks Chris. Great to be here.

Yeah. And oh man, it's so cool. So last week I was on two podcasts talking to people in Spain and this week almost as far away, I got you on from California and I'm in Asheville, so you're in Berkeley. So two real, you know, kind of progressive hotbeds in the country but on opposite ends of the continent. And Jonathan, we're going to talk a lot about your story and your business and your book and your courses and so many things today with the audience. But before we jump into it, maybe you could share A little bit and catch the audience up with, you know, how you ended up where you are today.

Sure. That's not a short story. There's a lot of twists and turns on that road, but I'm happy to share. So the shortest version is I got really interested in money when I was a kid. We didn't have any money, so you always want what you don't have. And so I wanted the things my friends had. And so I was really interested in money. But then I went to school to study finance, and it bored me to tears. So I took a pivot and I switched to philosophy and religious studies. I ended up studying. I actually ended up going to grad school to be a Lutheran seminarian. So I was going to be a minister. While I was there, I was like, okay, not quite what I want to do. So I ended up studying academic Buddhism instead. Sort of Tibetan phenomenology, sort of Tibetan philosophy. And I did that for three years, and then I dropped out of that, and then I actually ended up getting a job at Dean Witter. So coming back to money. So 40 years, I've been investing in public markets. 20 years I've been investing in real estate. 15 years I'm investing in private markets. But underlying all of that is sort of this Buddhist phenomenology. How we experience the world, how we think, how we make decisions. And that really affects kind of the advice, the courses, the books. That's why the book is titled Mindful Money. That's why you get something like that out of somebody that's in finance.

Yeah. No, I think it's amazing. And really, when you study finance, so you and I have a lot in common on the religious side, also the financial side. I studied Buddhism just on my own in college. And it really is fascinating if you look at behavior, behavioral psychology or behavioral finance, when they talk about it, and what controls the markets. And I think a lot of people don't realize all these human emotions that are underlying these things. All right, so you come out and Dean Witter. Some people are like, oh, yeah, I remember Dean Witter. Like I do. I remember the commercials and everything. A lot of people don't realize that. So you start out with Dean Witter, kind of your traditional financial shop. How is what you do today different than that? Not just from a philosophical perspective, but how has the world changed in your personal practice from back then?

I think there's two or three different strands to that question. So what I was trained to do at Dean Witter, what I was trained to do was pitch a stock. And I was trained by a Wall street firm on how to cold call somebody that I'd never spoken to before and how to do that 300 times a day. Trying to create five to seven conversations a day and just be hung up on a lot and just play a numbers game until you get enough people to buy enough shares of what I pitch with Cisco Systems. And if they didn't like Cisco. Right. You remember Cisco?

Yeah, I owned it.

Absolutely. Of course, you probably still do in a final industry.

Yeah, I do. But yeah, it's still the backbone of the Internet.

It's still something that's a really important company. It was a blue chippy, techy stock when I started in 96. So it was easy thing to talk about. If people lean towards, you know what, I'm not that aggressive. Or I would go towards municipal bonds. If they said, you know what? That's not aggressive enough, I would go towards Juniper Networks, which is another networking company that was smaller at the time. I had a script, I followed the script, and that's how I was trained. I went from Dean Witter to, well, and then Dean Witter, Morgan Stanley merged, and then I left that firm and went to Paine Webber, and then Paine Weber and UBS merged. I left that firm and went to Smith Barney. And then I did not like Smith Barney at all. And so I left and went to Prudential and Prudential Wachovia emerged. So I went through, like seven firms, three choices, three, four mergers. And finally in 2001, I. So that was five years in, so seven firms in five years, which is an impressive undertaking. I said, you know what I need to ask. Like, I had 300 clients, 300 customers. I needed to ask, like my favorite six or seven what they thought was the most important thing. And every single one of them said the same thing in some version. They said, planning is critical. We really appreciate your help in planning. We would like to see more financial education. And so from that, I said, you know what? It's not about products. And, you know, frankly, I already knew that. Right? I already knew it wasn't about the products. It wasn't the thing that I sold. It was the thing that helped people be successful. It was something else that I couldn't sell because as a broker, you couldn't sell education. You couldn't really sell planning back in that day. And so the thing that shifted for me was first the move from the Wall street firms to an independent practice where you could actually charge for planning. You could actually do the thing that was beneficial. The other strand though is the industry shifted. The industry was changing at the same time and the product availability was shifting. So I started off pitching stock. Probably the first five years I was there, mutual funds became important and today it's ETFs, just new products, new commission structures, new fee structures for everything. The media shifted. Like what was the important decision that people made? People came to me at that time because they wanted information, because there was no Internet to give you. What was Cisco, what was Juniper, what was Microsoft doing? You couldn't get that information. You had to get it somewhere. So you had to come to me to get it. And they wanted that information. Today it's ubiquitous. That information is everywhere. So people like me had to change what they do. And I've been a little bit ahead of the curve and I think mindfulness is me staying a little bit further ahead of the curve. I think I'm in front of the curve. I'm trying to say that.

No, I absolutely love it. And the reason that I think we aligned initially looking at your website, financial freedom begins with education. And that's like our next level income, all about education. Obviously we talk about financial freedom through education, investment opportunities, but very well aligned. And I love what you talk about, Jonathan. And we're going to share with the audience how to get a free copy of your course or your free course and really talk about values. So instead of stealing your thunder, you said something great in the lead up to our show today. You talked about it all begins with what you teach in that course. And so I'd love for you to talk about why mindful money, mindfulness and how really you have to begin with the end in mind.

So I think you go to the financial planning website, the fpa and you ask them, it shows you what's the process of financial planning. It starts with, according to the financial planning website, it starts with understanding the assets that you have, understanding some of your goals, those kinds of things. And I would say it actually starts before that. The most difficult thing I think that people determine is what matters to them. So values comes before purpose, purpose comes before goals. And if you don't figure out your values, then your goals are going to be just like everyone else's goals. Like I want to have a retirement income, I want to send my kids to school, I want to make sure my parents get the care they need when they're older. And maybe you get to something like legacy. So there's like four or five very, very common goals. But if you don't know your values, then you don't know which one. You don't know how to prioritize that. You don't know if, I mean, education is a value. You know, relationships is a value. And so you don't know where to spend your time. You don't know where to focus if you don't know your values first. So that's. That's what the course does. The course starts with an exercise that helps you figure out, like, what are the five or six most important values that are your values. And then you. Then you build purpose. Your personal life goals, your personal purpose, the meaning of life stuff. And then you go, okay, 10 years, five years, three years, two years, one year's goals. And then what am I doing the next three months to actually get closer to those goals? And that process undergirds every review you do on an annual basis. It undergirds everything because it's not about how you're doing relative to a neighbor or to an index. It's about how you're doing relative to your goals. Like, are you true to your values? Are you getting closer to the things you want to accomplish? And that's everything. And we get distracted. You mentioned behavioral biases or behavioral finance. We are so distracted in our culture by every headline right now. Especially you hear things like inflation, not inflation. Tapering, not tapering. Bitcoin, not Bitcoin. Actually, the new Bitcoin ETF is in line today.

That's right.

But that's a distraction. What do you value? What are your goals? Focus on that. That's how you get there.

Yeah, no, it's fantastic. And the thing is, a lot of the investors we work with, they invest in quote, unquote, alternatives, which I think is funny. We'll talk more about real estate and how you incorporate into your clients portfolios. But I just think it's funny that things like insurance and real estate and these things are called alternatives when they were around before the stock market. It's just funny how the industry has changed these things. But, yeah, it's like, yeah, we all get distracted. And it's like, oh, why is the stock market up today? Why is it down today? And you turn on CNBC and these pundits are coming up with all these things. But one of the things I love to point out, even from people that aren't big fans of financial advisors, is a financial advisor provides their value by helping their clients stick to a plan. And that's as humans. And 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?

Oh, it's not my opinion. There's a ton of research on this. And the reality is they don't follow a plan. The reality is they're shooting from the hip on a regular basis. And they are, they're not. So there's a choice. And my favorite industry guru talks about it this way. He says it's goal focused, planning driven. And if it's not goal focused planning driven, it is market focused and performance driven. And so you think about the headlines. The headlines are always telling you this is going up or this might go down or this. And so that's the underwritten message or 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 just. That's a lie. And it's either a motivated lie, someone's trying to sell something and so they're lying to get you to buy something, or they're not smart enough to recognize that they're not telling the truth. Right. So it's either motivated or it's stupidity. No one knows what's going to happen next. So the whole idea of trading on headlines or even paying attention to financial media as anything more than entertainment is a mistake. And you said this right? 20% of an advisor's job is writing the plan or helping a client write the plan. 80% of advisor's job is helping them stick to the plan. Stop shooting from the hip. Absolutely.

And it's like anything we recognize this, it's like you go to the gym, you. It's like you have a coach. You know, my coaching clients, I tell them the big piece, like, you got the plan, you got the system, you have the resources, but it's the accountability and it's so important. So if you're listening and you're like, I don't know about a financial advisor, just know that it's just like any other coach. So much of that value, 80%, like you mentioned, is that accountability, making sure you stick to that plan.

So, I mean, the reason economic snake oil sells is because people want to buy it. People want somebody to tell them what's going to happen next. And so if there's 5,000 people, I.

Might not be right. What's that? I could say it, but I probably won't be right.

No, exactly. And there's plenty of people, though, that will tell them, this is what I believe, this is what I think is going to happen, this is what's going to happen. And they'll use all kinds of phrasing to make it seem like 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 an advisor doesn't provide value. Right. An advisor that says, you know what, 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. And we know how to stick to that plan. That is enormously valuable. Enormously valuable. Absolutely.

So, Jonathan, you talked a little bit about your progression throughout your career. I'd like to talk a little bit more about your book, why you decided to write the book, and specifically, as I was reading through it, your happiness pillars. And why on earth did you spend so much time writing about happiness in a book on finance?

Great question. So first, the source of the book, the reason the book exists at all is I was sitting with a client and this, you might remember, 2008, 2009, Great Recession. There's talk of the world economy never recovering. This is in the middle of that. Actually, this conversation is towards the tail end of that. And I had a client who said to me, after I chatted with her for about hour and a half, sitting in her living room and going into the call, she 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 period of time. It's never been coincident with the worst financial disaster she's ever experienced. So I was like, I don't know what happens next. Just like I said before, nobody knows. It's not predictable. You can't tell. I do have pretty 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. I mean, this will be the ideal time. I don't know how long it's going to take to get there. I don't know how long it's. I don't know when it's going to stop going down. I do know that 10 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 10 years from now because 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. So the source is this conversation and she said to me, jonathan, if you ever, if you ever write a book, I'll write the forward. And so she wrote the forward book and it was just fantastic.

That's her.

Yeah, that's her, exactly.

Excellent.

And then the second part of the question was.

Oh yes. So we talk about your pillars of happiness in the book. And as I was reading through it, I just noticed that's a big chunk of the book is talking about happiness. And I was curious what motivated that in a book about personal finance.

Yep, yep, yep. So if you think about, no matter who you are, where you're born, you know what your circumstances are, life is going to give you challenges. Life is always going to give you challenges. And you've got a choice. You can focus on those challenges and you can just get mired in it. And the challenges can be the thing that you spend all your time on and you're, you're. And when you do that, that affects how your brain works. And your brain will then see all the reasons those challenges hold you down. Right? That's, that's how the brain works. Or you can replace that conversation or that thought process in your mind with things that you want, things that you hope to accomplish. And that's not stuff to buy. That's relationships, that's generosity. That's positivity. That's 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 today, all the behavioral finance literature we know what creates wellbeing. This isn't a mystery. And so the first part of the book says, hey, there's the six or eight or ten 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. And then the easy part is the math. And that's the last part of the book where here, if you do this and this and 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 you know is the source of wellbeing and then do a little bit of Math around planning.

Yeah, no, it's fantastic. And you know, over the past five years I've spent a lot of time on this. And one of the things I love is, and I've incorporated is a gratefulness practice. And you know, you can read it, you can see it, you can see the research, but I love, you know, it talks about if you're, if you're focused on what you're grateful for, you can't be angry, you can't be upset. Like it totally changes. And that's one of the things I've done at the beginning. Buddhism. I'm sorry, go ahead.

I was going to say, and one of the important things about that, 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. And if you have a daily practice of meditation, of, of mindfulness, of gratitude, of just a willingness to be open to, if you have that daily practice, you are creating a groove in your mind to support better decision making, to support less reactivity, to support more awareness of what you want out of life. And that awareness brings it to you. And if you create that groove, instead of the woe is me groove, or instead of the, you know, I have this and this and this obstacle groove, it can do nothing but improve life to the extent that it actually 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. Right. If you meditate, bigger frontal cortex, which means less reactivity, smaller amygdala, that's a, that seems a no brainer.

Amazing. It's amazing. Yeah, it really is. And this is, you know, I've read multiple books now in meditation and actually I'm reading Becoming Superhuman by Joe Dispenza. And look, if there's, if there's one thing you take away, if you're listening today, from what Jonathan said, it's that, I mean, the fact that we all know those people in our lives, right? They complain, they talk about, I have a friend from college, like, oh, dude, like you gotta, you gotta stop it with the complaining because it actually does wear those grooves in your brain. Just like walking the same path every day or having that wagon that rolls down the road and then you're stuck in that rut. So if you want to get unstuck, I mean, it's just been amazing to see that and kind of coming back around we talked about Buddhism, and one of the key tenets of Buddhism is being present. So how has Buddhism contributed to your current financial advisory today, Jonathan? And at the core, we've talked about a lot different stuff, but what can someone expect that's going to be different than your traditional advisories out there?

So there are. So I want to say that everyone in my industry, you're going to sell yourself, right? You got to say what's different about you. And I will say that there are a few things that are different about us, but not in an absolute sense. So there are great advisory firms, RIAs, fiduciaries, that are planning first, that focus on goals, that focus on planning, and they'll 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 are a great place to work. There's a great place to find an advisor. Anyone that's not trying to pitch you that. And believe me, if you come to them with the desire for performance, then many of them will actually talk to you about it. But if you can avoid bringing it to them and understand and be open to the idea of let's set some real values out. Let's talk about goals and let's. So there's lots of advisors out there that will do this, and they're all great. So 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. We like to work with people that run small businesses. We like to work with people that aren't seeking to spend every penny before they die, like they want to leave some kind of legacy. So there's certain things that we will look for in a potential client, and we refer tons of people to other advisors. We had a team meeting this morning and we talked about, 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 actually 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're also if you have a product in your back pocket. So we want to actually encourage people to find advisors who focus on that kind of thing. And that's what we do, in essence.

Yeah, no, it's fantastic. Okay. And okay, so I want to end by talking about your three life stage courses and what people can expect but before that, we talked a little bit about real estate earlier. So our audience, ton of real estate fans out there. Obviously it's a huge part of what we do at next level income. So how do you guys look at that? Because I know financial advisors, they talk to us and they're interested in what we do. But 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 they don't know how it fits into their compensation schedule either. So for those clients that come to you and say, hey, Jonathan, I have 25%, 50% of my portfolio in real estate. I think I know the answer, starting with the why. But how do you take that into consideration when you look at someone's financial plan and how it all works with, within the general financial scope of things?

So at the beginning it sort of laid out my history. I've been a real estate investor for 20 years and I have no problem with real estate investing. I think it fits in. I operate with two fundamental investments. There's equity and there's debt. And pretty much everything we can invest in is some formulation of equity and debt that includes real estate. In real estate. Real estate is a business. Business has a cash flow just like a business selling widgets. And whether you approach that by independently owning and managing a duplex or investing in a REIT that's publicly traded, or investing in somebody's multi unit, there's a word for it I'm trying to come up with. It's like a privately held syndication. That's the word. Thank you. If you invest in somebody, syndication, these are all ways of basically being an owner of equity that has a cash flow that comes from real estate. It's not that much different than other things. I do think that there is depending on how you hold your real estate. I think there's a misnomer about the passivity of it. Like if I own rental real estate, it's a passive investment. No, no, it's not. You know, I've been sued by somebody that was a tenant that fell down on the steps. And that's not passive when you're, when you're, you know, in a, in a court case or something. 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, you know, getting the chainsaw yourself or fix the, you know, so it's not Passive.

Answering phone calls on your honeymoon. Not passive.

Not passive.

Yeah, not passive.

Can be a great wealth building tool. Not passive.

Right.

So it's understanding that it's just another investment and it fits in like any other investment fits in. One of the advantages of not being a broker, I don't have product that I'm selling. So as an investment, I've got a client who has a software business and we talk about running the software business. So 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.

Yeah, that's fantastic. And yeah, I love your experience in real estate, your past history, because I think especially for people that value that as part of their portfolio, it makes it so much, not only easier but also more valuable when your advisor, your coaches, the people that you work with understand how it fits in. And a lot of investors, they, they get a kick out of having some time that they spend on that, whether it's swinging a hammer or whether 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. So. Awesome. So let's wrap up. I was looking at the courses that you had and can't wait to tell the audience how to get one of them for free here. Jonathan, but why your three life stage courses and what can one expect if they go on and they 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, if you're early career, if you're late in career, if you just think about what that might be as a college student, the things you've got to be worried about are debt, credit score, do I want a credit card or a debit card? What does that mean? So it's just very basic financial literacy. And that's, that is our foundations program. The Pathways program is a little bit larger than the foundations program. It includes a lot of stuff that's in foundations, but it also includes a simple investment education. And then that's pathways. And the last one is legacy. And it strips out a lot of the debt and credit profile and adds in philanthropy, estate planning, you know, what's a trust, What's a will, how do you give money? What's a crt, These kinds of questions. And that's something that happens late career, late 60s, maybe 70s. And 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 I found that most people never see any of this stuff. So even if you're 60, you've actually never. You may know because you've read a lot of magazine articles and you've cobbled it together yourself, but you may not know really 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 is all 18 of the modules, or one can choose one of these smaller seven to eight module courses.

No, I think they're fantastic. And one of the things that we did is we started a course here for one of the local nonprofits that's really similar to your first course, like that foundations course. And what's interesting is this is for teenagers. So this is teenagers, underprivileged teenagers. They come in and you know who was sitting in the back of the room every. Every week when we did the course? Their parents. Yeah, they were sitting back there because they haven't heard about this stuff. And it's. It really, it really is amazing. I think it is the one thing that we should absolutely add to our education system that's out there for everybody. So I love what you've done. If somebody wants to get one of your courses for free, Jonathan, we're going to link it. Can you tell us a little bit about how to find out more about your book Mindful Money? If anybody's interested in learning how to work with you and your group?

Yeah. So the best place to go is to go to Mindful Money. That's where you can find everything. The course is there. Education is there. Me as a public speaker, is there. All that stuff is there. The one thing I would say is, is there's a price tag on these courses. You know that. And if a group wants them, for example, my kids, faculty and staff in their schools wanted to take the courses. I give it away to a group. So if there are groups that want to go through this, that are interested in financial literacy education for their membership, I give it away. I don't care if it's a for profit group, a nonprofit group. This is built and designed as very basic financial literacy that I want to give it away anywhere. I think it's really important. And just like you said, it's one thing that we don't teach. We have nothing practical about money. So I say, hey, let's give this away. Individuals can pick it up. Go to the website, you can log in, you can pick it up yourself. A group lets me do a. Sometimes I'll do a one hour intro to the course for a group. It's harder to do that at scale with individuals, which is why we give it away to a group.

Yeah. Amazing. Amazing. And I also love it. I didn't even know the the DOT Money moniker was out there. And Saul's like, oh, this is really cool. So if you heard that, remember, it's mindful money. Mindful money. I really encourage you to check out Jonathan's book, his courses, what he does. And Jonathan, you may have noticed we don't have a bunch of financial advisors on this podcast because there's a lot of salespeople out there. So we really value what you do. We thank you so much for sharing everything we do with the audience today and thanks so much for your time, Chris.

It's been a pleasure.