Inflation And The United States Market With Kirk Chisholm

Foreign this is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property for panties on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now here's your host, CEO of We Close Nodes, Scott Carson. Hey, this is Kirk Chisholm with Scott Carson on the We Close Notes Show. This week we are going to discuss a bunch of great topics that are going to blow your mind. We're going to discuss inflation, we're going to talk about fixed first growth mindset, and we're generally just going to talk about how to make your life better. If you want your life better, you got to listen to the show. If you don't, well, maybe it's not the show for you. So join us this week for a tremendous episode where we talk about all the things that you're going to want to hear.

Good morning, good afternoon, good evening everybody. Welcome to this episode of the Note Closer Show. As always, Scott Carson jacked up to be with you today and we've got a very special guest. I guarantee he's going to probably answer some questions and maybe even spring a few in your mind. With the crazy world that we're living in these days, we love to bring the best. This guy, he's a wealth manager and principal at Innovative Advisory Group. He's also the host of the popular podcast Money Tree Investing, which I was just a recent guest on. You want to go out and listen to it on any place that you listen to podcast. But this guy, he's an interesting guy, in his own words even says that, which is good. But he's an outside the box thinker, provides a different perspective on many commonly held beliefs in personal finance. He has rare expertise in alternative investment, seldom self directed IRAs, which is what we'd love to have him on here for. And then also as he was recently recognized as one of the top 100 most influential financial advisors in the US by Investopedia. So we're honored to have the man, the Myth, the legend, Mr. Kirk Chisel.

Don't you?

On the nuclear show. Good morning, Kirk. How you doing today, man?

Hey, thanks for having me on the show, Scott. It's gonna be a real pleasure. I enjoyed our conversation last week on the podcast. No, this will be no different. So looking forward to it.

Yeah, man. I mean it is a definite. We had a great time talking a variety of things and we had to continue the conversation on here I've been binging your podcast and every guys go out, check it out. I really love one of the most recent episodes you had talking about kind of where inflation was going. We'll get to that in a second. Talk a little bit about your background and kind of what your focus is for those out there that are listening.

Okay, sure, yeah, I'll talk a little bit. My background. So I went to college. It was late 90s, and everyone was investing in Internet stocks. That was. You could do no wrong. You could throw darts at a board. And actually they were doing that on cnbc. They were having, like, birds poop on the paper, on the stock charts and saying, all right, this is going to be a winner. I mean, the kind of craziness went on there. It was just loopy. Anyway, so I decided, hey, I want to get into the stock business. And so I started at Pain Weber, back when they were Pain Weber, before they were acquired by ubs. And I got a job there. And I started in the business in December of 99. That was my first month in the business. Great time to start. Missed all of the upside of last 20 years prior to that. And so pretty much when I started, the markets went down for like three straight years. And you look at that and say, well, that sounds terrible. Well, it was. But one of the values I learned from that was the value of risk management is I didn't know what the upside was. I mean, I did when I was investing my own money, but working with clients, the markets just went down. So I learned really quick how to manage money in terms of risk management. So fast forward a little bit. Worked at a few other firms, Started a firm in 2006, I think it was, and then merged it with my current firm around 2008. And so the first time I learned risk management was the market was crashing after the tech bubble. So the next bubble we hit was 2008. And the funny thing was, I was a little bit more prepared for that because the first time around, I learned from other people, but nobody really understood. We outperformed the markets in the early 2000s by not losing as much, but it was still down. And I hated that. I was like, the market's down 40 and we're only down 20. That's not a win, that's still a loss. Right? That's terrible. So we did a lot of research and we came up with some strategies that helped for 2008. So 2008, we were entirely in cash for all of 2008. We got out in. In the summer of 2007, the markets cratered and then slowly they got put back together. But still I didn't like our risk management techniques because the market could have kept climbing. All sorts of things could have happened. You, right, because you can't predict the future. So fast forward to the last few years and we've done things very differently in terms of risk management. But everything in my whole career was colored by the first few years, which is risk management first, which has been our philosophy at our firm for many years, is risk management first. If you don't get that right, everything else doesn't matter, right? And this is the funny thing is reading some old quotes way back, some of the earlier writers about the financial markets. And it's funny because we all try to predict the future. We all think, oh, this is a great return. Like, okay, what can you lose, right? Nobody talks about that. But one of the things you can't do is you can't predict the future, right? So when you're trying to predict performance, you can't predict performance because you can't tell the future. And if you can, you should give me a call because I want to learn from you, right? But what you can do is you can manage risk, right? So I can't tell you what the stock market's going to do next year because I don't know, nobody does. But I can manage risk. I can tell you that if we do things this way, we won't lose more than X. Or if we do things this way, this is the most we could lose or here's how we're going to lose. Those are things that I can manage, but I can't manage performance. But everyone tries to focus on the performance nobody manages on risk. So that's a lot of the ways that we're very different as we think about the equation of investing in the risk to reward trade off very differently than most others.

I love that. I mean that's one of the big things that we emphasize here because we're buying distressed debt, there's all sorts of risk into the bar is going to pay or what's going to happen in the market. So that's what I love is you always have to look at what's the worst case scenario first and then kind of build on that foundation, okay, here's where the risk lies. How many of these potholes or minefields can we avoid in buying this asset or working through it and then building wealth from there? It might sound very similar on your side.

Yeah, absolutely. It's funny because when we started our firm, which we started in 2008, one of the things that we actually wanted to focus on was investing retirement accounts into alternatives, which is why you and I get along so well. Because one of our biggest assets that we focus on is private notes or private mortgages. That's where we got started as a firm, because we just love the dynamics of the investment. There certainly is risk, but you can manage it, right? You talk about this a lot on your show, and you help your listeners a lot with this, but you can manage what that risk is because you can lay it out and you can say, here's what it is, here's how we're going to deal with it, and here's how we're going to price it to be able to make sure that we're going to be okay. Right. There's a saying we always talk about, which is, there are no good or bad assets. There are only good or bad prices. Right. There's a price for everything, no matter what it is, or good or bad.

Management, if you're not paying attention.

True. Very true.

You've seen that in the business as well and on all sides of things out there for you. But it is a. What are some of the things that really kind of focused on right now with the market being kind of an unstable aspect class? I mean, for years, people have been talking about, oh, the market's going to crash, it's going to be Armageddon. I've been like, it's not going to be like 2008 all over again. There's going to be some issues. It's a different issue aspect of what's going on in the market, but there's a lot of folks out there worried about things. And I guess there's. I think there's a lot of bad information rolling out there in a lot of cases. What do you think, Kurt?

I think most of it is, and most of the bad information is out there because of what we call this cognitive bias, we call recency bias, which is look at the most recent thing, and we think everything else is going to be just like that. Right. And I think one of the problems is for the last 20 years, let's take 20 years as an example. Most people who are investing in the market have not been doing it for 20 years. Most people in the financial markets, and my side of it, haven't been doing it for the last 14. Right. So 2008 or 2009, technically, early 2009, was the bottom of the market. Most people in the market have only been around since then. They've only seen a bull market. They haven't seen bad times. And I go back for 20 years and I've seen multiple bad markets, but I have not seen personally what is going on right now. And I think. So if you look out there, you look at a lot of the information, it might show back like five years, 10 years, 20 years, but no one is showing you 50, 60, 70 years. That's the data you want to look at, because we're at a point where we're looking at the last 50 years. If you go back 50 years, you're going to start to see a lot of similarities to what we're seeing now. So basically the mid to late 60s until around 81. That's the period you want to look at, because while we're not going to repeat that, it's going to be very similar. And as they say, history doesn't repeat, but it does rhyme. That's a lot of what we're going to see now. You could say, well, the 1970s was a very tough time for a lot of people in many ways. And you could look back and you could say the Cold War. You could point to all these things. Well, we don't have that. Well, I don't know, do we? Russia's attacking Ukraine. It's kind of a cold war. You got similarities, right? It's not the same thing, but you definitely have similarities. You have high commodity prices, you have inflation, which is creeping up. You have interest rates which are creeping up. All of those same similarities lead to the same outcomes. Think of it this way. Right now, the markets aren't good, but they're not terrible. If you really look at them closely, they're not as bad as they should be. The economy's rough, but it's not as bad as it could be. So the Federal Reserve has this pretty much free lunch to go out and do whatever they want with the markets. And right now, what they're saying is interest rates are climbing and that's going to affect everything. And as interest rates go up, bond prices go down, which is, quote, unquote, safe. Bonds are no longer safe. They haven't been the last nine months, but they were for 40 years, but they're not now. So everything you think you know about finance is flipped on its head. And I hate to say that, because you're not going to really understand. I know you do, Scott, but most people are not going to understand what that means. That means every assumption you're making about investing in finance is going to change. Now, I'm not saying it's the opposite or it's wrong. I'm saying it's going to change. Right. So I'll give you a few quick examples here so that you understand what I mean. So for the last 40 years, bond prices have gone up and bond yields have gone down. Right. And what that means is no matter what, you're pretty much making money in bonds or worst case, you're losing very little. But bonds have been a great investment. Here's a quick question, Scott. Do you know what the best performing securitized asset was in the last 40 years?

Something to do with bonds, I'd imagine.

Yes, actually 30 year zero coupon bonds, Treasuries. Right. These are the safest of the safe 30 year zero coupon treasuries. They outperform the stock market by almost double. It's not even close. Right. So if you think about 1981, interest rates are 15%. Are you getting that in your stock portfolio? No, you're not. Right. And if you think about the paradigm for the last 40 years, bonds are safe. Well, they're not safe. Depending on the bonds you own, they're down between 15 and 30% so far this year. That's crazy. That's not safe. Buy and hold is another one. Buy and hold worked really well in the bull market, period. Right. Where the stocks pretty much go up for 40 years. They hit a few speed bumps, but they pretty much go up consistently. Buy and hold works. Did it work from 2000 to 2013? No. You lost money for basically 13 years from the 70s. Pretty much the 70s you were flat, market went a lot of places, but it didn't go up consistently for that 10 year period. So the market does have periods where it goes down a lot and then it goes up and it pretty much goes sideways if you look at it from a big scale. But do you really want to make no return on your money for 13 years or longer? Probably not. Right. So what are you going to do? And obviously we're going to talk a little bit about that on the show. But that's the kind of paradigm change that's going to change. And you're not thinking about that because you've built this into your psyche that buy and hold is the best strategy and low fees is the best strategy and bonds are safe. All of these simple rules of thumb that Wall street has beat into your head for 40 years, you now have to change. You have to go back and relook at your whole set of tools that you're using to invest and reassess everything you're not doing. That's where you're going to get yourself into trouble. And this is why we talk about this so much. You're not going to change your mind on this one episode. I wish you would, but this concept is so large. It's going to take you time. It took me six months to just try to figure out how to explain this to everybody. That's why we're talking about this in the show with your listeners, Scott, because you understand this stuff. This is really important stuff, and your listeners really need to understand it as well.

Yeah. You cannot apply basic. I won't say miss, but I say rules or things have been passed down because the market's always changing and things are. Our situations are always changing, our priorities are always changing, our focus is always changing. So it's, I won't say it's fuzzy math, but you've got to figure out where you land in the situation and then looking at what's going on around you in the different markets. Right?

Yeah. I mean, you remember the 2008 mark to magic accounting. Those are the days.

Exactly. Or we can all judge a company like how Enron did.

Yeah, yeah. That's the marker for success.

Exactly. We'll just go ahead and plan goals on potential future sales and we'll throw them on the books. We see so many, so much uproar out there right now, folks talking about, worried about inflation and worried about things going up and prices. I think, and I studied a lot of stuff, but I think you on one of your most recent episodes probably gave the best definition of how people really need to identify inflation and how you just can't take what the market says is one rate is a true rate of what an inflationary rate is going to be. Can you kind of recap that a little bit or touch base on that, Curt?

Yeah, I think I know where you're going. So let's look at it this way. Let's look at four asset classes. Now, first asset class is stocks, okay. You look at stocks, they're basically companies and you're investing in the growth of the company. Right. So sometimes they go up, sometimes they go down. Right. But the risk you're taking is that there's volatility and that if you invest right. Like a Warren Buffett obviously did well for the last 50 years, if you invest right, you can make a lot of money over time. That's the thesis of stock. Right. A bond is basically you're loaning somebody else money in exchange for interest. You talk about this a lot in your show, Scott. Right. You're basically loaning money to people and they're paying you interest plus the principal back, right? So in normal times, if everything all is being equal, you should be making an interest rate of whatever you get when you're buying the bond, and that's your expected interest. Then you have cash, which cash is self explanatory. You're pretty much just sitting on cash. You can stick it under your mattress, you can throw a pile on your table and dive on it, whatever you want to do, but it's cash, it doesn't do much. And then you've got real estate, Right? Real estate's another asset class though. You understand real estate. You're investing in a property, you get rent, that's your quote unquote income. It's basically a business. But it's an inflation proof way of investing in assets and hard assets. Now, in normal times, let's look at the last 20 years, we've had very low inflation that has done wonders for every asset class across the board, except for cash. So stocks went up, obviously went up a lot in the last 20 years. Bonds did well because as interest rates have gone down, prices have gone up. So bonds, you're getting your interest and you're getting appreciation in the bond. Cash has pretty much been static and real estate has done well. Okay, now what if you have a situation like this year? So we just did an episode yesterday on this. If you look at assets across the globe, it's a bloodbath. If you want to look at negatives, everything was red except for oil, right? And natural gas. Pretty much everything else was in the red, they were in the green. Now if you look at what's happened this year, no matter what you're invested in is pretty much down. Commodity prices were doing well. Now they're not. Unless you're in oil, you're pretty much losing money this year. Okay, so it doesn't matter whether you're in stocks, in bonds, in real estate, everything virtually is losing money, right? Which is, oh fine, that happens, right? You don't expect it to happen often, but it does happen. So how do you look at that? Right? Well, so let's say hypothetically, because just going off top my head, let's say stocks are down 20%, let's say bonds are down 20%, let's say real estate's down 10. So that's what you've lost this year. Now you also have this impact of what we call inflation, okay? Inflation means that the value of your assets are going down by that percentage every year. So let's say inflation's at 5%, just for hypothetical. Okay? So that means that every year you have inflation at 5%, your stocks are declining in value 5%. And I'll explain this in a minute, your bonds are going down 5%, your real estate and your cash, everything is declining by 5% a year. Okay? Now, basically what that means is they're not technically going down 5%. It just means that everything else is going up 5%. So technically, in relation, you're not going up, but that is. Right. So that means the price of goods in the store is going up, but your assets are not, so that technically you're losing money in relation to these other things that you're buying. Okay? That's how we calculate inflation. Now, the problem is that most people are looking at inflation and they're saying, I can't invest in cash because my cash is going to lose. Well, right now it's 8.3% is inflation. So let's just stick with 8. Right. Just to make the numbers easy. So inflation's at 8%. That means your cash is declining at 8%. Okay, so what? So this year I've lost 8% on my cash. Let's say I'm a hundred percent in cash. I've lost 8% in my cash. Well, let's look at the other assets. Well, my stocks are down 20% on top of the eight. So that means you're down 28% in your stocks. Your bonds, how are they doing? They're down 20%. They're also down 20 plus the 8. They're down 28%. Your real estate's down 10 plus the 8, so you're down 18. So what's the best performing asset class this year? Cash. Right. Because you're only down 8%, it's not a great return, but it's better than everything else. So when we look at our calculations of inflation, you can pretty much take inflation, ball it all up and throw it in the trash, because it affects everything equally. So it doesn't matter what you're investing in, it's going to affect it equally. So you always want to look at things really relative to other things, not relative to inflation. Inflation is a static kind of metric, and because it affects everything equally, it doesn't matter. Right. It's across the board. So we don't look at inflation in that way. When we look at what we're going to invest in. We're looking at what is the best risk reward performance that we're going to get. So right now, stocks are not high in our list because we think they're going to continue to go down. We think they're way overpriced even now, which we can get to in a minute. We think bonds are also way overpriced, even though they've currently gotten hammered. Cash is static. It's going to keep you safe. Real estate, I think, is also way overvalued, and we can talk about that as well. This does not mean you should stick in cash, because I know there's going to be people out there, they're going to say, yeah, but cash over 100 years lost 97% of its value. Yes. If you're sitting in cash for 100 years, you're going to probably lose 97% of its value. I'm not suggesting that. I'm just suggesting today cash might be a good alternative. Now, six months from now, a year from now, two years from now, I might decide, hey, there might be a better alternative out there. Maybe the stock market goes down 40 or 50%. Okay, well, now things are looking different. Now the scenario is different. What, relative to other assets makes the most sense. Right. So if real estate drops 50%, which I think is highly possible given interest rates, maybe even more, then real estate could be a bargain. Is it today? Absolutely not, in my opinion, not certainly in the Northeast. So you have to look at things relative to what your opportunity set is. And sometimes cash is the best opportunity, sometimes it's not. Right. So if you looked at it in 2009, cash was probably not your best opportunity set. Equities were. Actually a lot of assets were back then. So was real estate. So you have to understand how things are relative to the valuation and relative to where they are. Inflation. So as we have high inflation for a long period of time, like if this stays where it is, and I don't think it will, I think it'll fluctuate. But if it stays where it is, then you have to look at what are the best opportunities, given the inflation where it is. And we'll definitely talk about the 70s again. But I think that's a marker that everybody should look at to contextualize where things could go based on human nature, based on how our politicians are going to react to what's going on in the world. I think all of that is why history repeats itself, is because people are still people.

That totally makes a lot of sense there. I love how you break that down and share that philosophy. Because you're right when you mentioned back that most people, especially most of Wall Street's only been around for 15 years. You date back to 2008. All the folks that were in charge left, they got their golden parachutes retired, and the folks that were underneath them or the newbies got hired are now in that spot looking for alternative investments or returns they should give their investors. I always make the joke that we live in with what we do. We're kind of like the big short part two in a lot of cases. Seeing the distressed debt and stuff that's like that. What are some of the things that you guys are doing over there? Especially in the alternative asset class size. I love that you think a little bit differently. How are you leveraging self directed IRAs or how are you advising your clients to take advantage of this?

Yeah, it's a good question. So we started in 2008 looking at alternatives because prior to that we saw tons of opportunities in real estate. Even though it was expensive, we were still seeing it other ways. Kind of like what you do when you find like opportunities, right? It doesn't matter what the price is. You can always find opportunities if you price it right. And we were seeing the same way. So we got into the self directed IRA space because you could see the opportunity set, right? And some of the stuff that our clients were doing, like they were taking properties and they were flipping contracts, right? And you put down $1,000 to wrap up a contract and then you flip the contract for like a 40 grand profit. You take a thousand dollars, turn into 40 grand, do that in your Roth IRA. You do that a few times a year and roll that over and you're going to be a millionaire really quickly, right? So, and then you think about if you were to do that with like a $250 million property, right? And then you flip it like the stuff you can do inside of IRAs. Look at Peter Thiel, look at Mitt Romney. Mitt Romney had like $110 million Iraq. Peter Thiel has $1 billion. He has over $1 billion in his Roth IRA tax free. You've got tons of these things going on. And we saw that opportunity and we wanted to be a part of it. So one of the easiest ways we got into it was through notes. Is real estate in itself is my, by far my favorite asset class. I'd say tax liens maybe a little bit ahead because it's based on real estate. But real estate itself as a core is My favorite asset class for so many different reasons. And every other alternative we have is pretty much based off real estate, whether it's notes or tax liens or whatever. But the point is, real estate is a phenomenal asset for tax reasons, for appreciation, for hard asset reasons, everything. Now, we got started with real estate in notes, in part because the real estate market was a mess. And we had opportunities with people that were basically just jumping on these opportunities and we were lending them money through hard money. They were fixing, flipping properties and then they'd sell it, and then we get paid back and we do another deal, right? So for us, it was a no brainer. We were making at the time, 13 to 15% yields for many years. And it was awesome. And the risk was really low because the way we calculate our risk was we only work with a handful of people. And we're not just taking anything. Our model is different from yours. Like, I love your model, Scott, but I don't know how we could scale it in at our level. I'm sure you've got plenty of tips you could give me. But at the time, we were focused on conservative income because that's what our clients wanted, was they wanted the income. They didn't want to play around with foreclosing and all that other stuff because they're simple people. They just want us to focus on getting them consistent income. So that's the model we chose.

Kiss, man. Keep it simple. Stupid, right?

Yeah, absolutely right. And there's so many ways you can play with notes. Like, you don't need to do them all, right? You just pick one that you're good at and you do that. And that's what we did. So we picked that. And we love the asset, and that's our main core alternative asset that we provide for clients is. And right now we don't have as many because we're still peaking in the market with real estate. And we've everyone said maybe mid next year we'll start to see a tidal wave. But we're mindful we're not just buying notes to buy notes. Like, it has to make sense, as you well know and what you teach your audience. So that's where we started. And we have clients who come to us for all sorts of random miscellaneous stuff. We have people buying dressage horses, they're buying minor league basketball teams, they're buying airspace rights, water rights, fishing rights, private company stock, get some people doing farmland. I mean, you name it, we've seen it and probably done it. It's amazing. Some of the stuff that people do and the returns they get, it's just a lot of. It's not scalable, like fishing rights. Like, you can't. Corporations can't buy it. It has to be done through individuals. I mean, I know people are making 80% a year on their fishing rights, and it's perpetual rights. It's crazy. And I wish I could box that up and sell that to people because it's just the opportunities are amazing, but most times the opportunities are amazing because you can't get a lot of people in there. Right? Like, motion picture film tax credits are a great alternative asset, but you don't know anybody who can do that. Like, everybody who gets it are these, like, insurance companies that buy them in bulk. And there's like one accountant in our state that does our whole state. If you don't know them, if you're not in the inside, you're not getting any part of it. So there's a lot of those assets that I love that I can't personally be a part of, but I would love to. And if we could do that, it would just absolutely be amazing. So I just love the fact that every day we see opportunity in amazing assets that most normal people don't see. And to me, it's like. It's just like this huge opportunity set that people don't realize they have their blinders on in their world. And they say, I only see. This is my opportunity. Opportunity is everywhere. And until you really experience, you really don't know that opportunity is everywhere. Probably most of the listeners, you have something you do for work or for a hobby that you could take and you could turn into an investment and you could make a killing on it, but you just don't see it that way because that's not how you're wired. And most people are wired that way. So I. I can't blame you. But that's just like. Until you see how many people take advantage of certain things, it's just. I love this. Like, to me, this is like Christmas every day.

That's the beautiful thing, is that when you have an open mindset, things come across your desk, things come across your inbox, or you see things a little bit different. Like, I kind of compare it. We were watching a movie the other night. Brad Pitt, Tom Cruise interview, the vampire. You know what I mean? There's that morning after Brad Pitt or Louie becomes a vampire. He wakes up and he sees the world in a different shade and sees different things. It's like that for investors. If you really Approach life a little bit differently and start evaluating things or being open to opportunities or being open to being educated, understanding things. So many people we talk with, they have such a closed mindset or I can't, or I'm not able to do that. I'm like, wait a sec. Yes, you can, if you will just be open to it. And a lot of times you can figure it out if you know who to talk to or reach out and touch somebody. Because a lot of folks are really willing to give up their information and help people succeed because there's enough opportunity out there.

Yeah, no, absolutely. And by the way, it's good touch, not bad touch, right? If you can go down and touch somebody.

Yeah, exactly.

But no, I love that the way you're putting it, because we talk about that a lot with, with our clients and with advisors we work with. It's like fixed versus growth mindset, right? And we all have our own version of fixed first growth mindset. There's a great book by, I think it was Carol Dweck, it's called Mindset. And it really gets into that. We all see the world in different ways. Like, there are parts of the world we see with abundance, right? Growth mindset. It's like there's tons of opportunity over here. I can see it all. Like, I love it. I'm just going to spend all my time here. And then we have other parts of our life which are fixed mindset, which you're not going to change, right? It's like, let's say you're religious, you're Catholic, you never going to change, right? You're always going to be Catholic. That's just the way you think of things. Let's just say some other religion came up and they were able to prove that they were the right religion. You would still say, nope, nope, I'm fixed here, right? That's the fixed mindset. We all have that in parts of our life. I have it. I work really hard at getting growth mindset in all parts of my life. But I also know there are things that I grew up with. My parents raised me with certain principles. I grew up with certain money. Scripts that I look at the world through a lens of money are probably not going to change easily. I would love to change them, but I'm okay with them being fixed. So we all have these fixed versus growth. The ideal is to have more growth mindset because that's where opportunity is, right? If you don't look at the world like, there's always this story about the diamonds Right? The guy who finds diamonds, he sells his property, goes around the world looking for diamonds, and this other guy buys his property and he finds him 10ft from where he's digging. Like, I love that story, but it's just about, like, where is the opportunity, right? If you look at the world as, oh, it's all great, but you don't see the opportunity for what it is. You're just fixed in your mindset. You're going to miss all of this great stuff over here. So I love the way you explain it because it plays into investing, right? If you look at investing and say, I'm only an index investor because that's what I know, or it has to be low fees. You know what, let me tell you another paradigm shift that I think people need to understand. What talks about fees. I'm all for the lowest fees, right? I get paid by fees, right? And I'm telling you lower fees is better than higher fees. That's a mathematical certainty. However, let me give you an example. If you were to invest in the Vanguard s and P500 index and they charge you, I think, whatever it is, eight basis points, now it's something ridiculously small. Let's say it's five basis points. Let's give them the benefit of the doubt. So they're charging five basis points a year. Now, let's say, for the sake of example, because I don't want to get myself into trouble, let's say they're going to get 10% a year, return four or five basis points. That's great, right? That's an awesome return. And if you want that's probably better than anything else you're going to find because it's the lowest fees. So all else being equal, if they're lowest fees, you should go with them, right? So if you're comparing them to another s and P500 index and they're the lowest, that's your choice, right? Now let me give you another choice. Let's say you're investing one of the notes that Scott invests in. Let's say you're getting like 20% return, right? But you got to pay somebody 5% a year to get that 20% of return. Well, that's 5% a year. Why would I invest in that? That's too much. Well, okay, what's your net return? Well, your net return is 15%, right? You're getting 20. You have to pay 5. Your net is 15. Would you rather have 15% or 10%? Which one would you choose? Oddly enough, a lot of people would choose the 10% because the fees are five basis points. I don't know, maybe they're not teaching math in school anymore, but I know for a certainty, all us being equal, I will take the 15% every day of the week and twice on Sundays. So if you want to take the 10, that's fine, you go do that. But my point is that people get fixed in their thinking that fees are the most important thing. And I will agree, all else being equal. That's true. But rarely is all else equal. And so you have to decide what are the fees going to be worth to you, all else being equal. These are just dynamics you have to think through. So if you're in a fixed mindset, you're going to miss a ton of opportunities because you think the fees are too high. We have these conversations every day and mind boggling. I mean, people get it, they get it quickly, but no one's explained this. There's just vanguards pumping your head full of low fee, which is true, but it's what we call a half truth, which to me is my favorite term that nobody talks about, which is half truths. And once you understand them, you're going to see the world on totally different lens.

So, I mean, that's so true. You get what you pay for in a lot of cases, too. Quality comes with a price. Experience comes with a price in a lot of cases. People ask me all the time, hey, how can I learn note investing the fastest? Like, well, sign up for a coaching well, I don't want to pay that. Well, then you can spend six months trying to figure it out through podcasts and YouTube university or stuff like that. It's one of the most important things to realize. Experience comes with a price in a lot of cases.

I'm going to. One second. I just want to. I want to take you up on that because I think that what you're saying is really important. And so for your audience, I'm just going to reinforce this and blow some sunshine up your skirt because you probably do it yourself. But I think people need to hear it, is you always need to reinvest in yourself. Always. And you should put aside a certain amount of money every year and reinvest in yourself if you want to get better at notes and learn this stuff. Invest in Scott's course, okay? And Scott and I just met recently and I'm looking at his course, I'm thinking, jesus, this would have saved me a ton of time, right? And I look at anything I do, right? And I'm learning new stuff every day because what we do in our business for marketing and whatever, and I buy courses because I learned when I started in this business, I did a lot with SEO, with my marketing. It took me three years to get great traction. It took me about a year to get any traction. And if I had paid somebody a good amount of money and there were some smart people at the time and I just paid them to do it for me, I could have done it in three months. But I decided, hey, I'm going to save myself some money and learn it. And it took me years to get good at it. I could have just paid somebody some money for a course or could have hired somebody and would have cut down years of time. And you know what the best commodity is out there? The one that you can't make more of time. I can make more money. I can't make more time. So I recommend if you guys are interested in learning more about notes or really anything for that matter, spend money on a course, spend money on education, educate yourself every single year. If you want to get smarter and better, that's what you have to do. Or else figure it out yourself. But it'll just take you longer.

Yeah, amen to that. Thanks for that, Kirk.

It's totally true.

You got to dive in. It's great to learn. But if you bring somebody along or hire somebody to help you, they will expedite that learning curve so much faster. And yeah, like you said, save you time. And often a lot of money and heartbreak when you end up stepping on a landmine. A lot of cases we see that happen across the board. But when you're talking with clients, Kirk, can you kind of describe kind of your ideal client or the, your customers that you're working with on a regular basis and what you're looking for?

Yeah. So we kind of look at clients in a different way than I think most of the industry, I think most of our industry looks at clients and they say, oh, we only take people with this amount of assets or we only take people that fill this niche. I think that's kind of shallow. Personally, I don't care how much you have in assets. Like, I look at this as a long term relationship. Is this going to be a relationship that I'm going to enjoy? Am I going to be able to make this person's life better and am I going to enjoy talking with them? Right. Like, for me, there has to be something that I can do there. I've turned down like clients with like hundreds of millions of Dollars because they're a holes. So we have this policy that is. We call it a nap policy. A. No, a hole policy. I don't work with jerks. Like, it's just life's too short and there's just no need to. So if you're a jerk, then please do not apply. But I like helping people. And we work well beyond just the core work. I mean, I could sit here and say we're the best financial advisor out there, but, you know, everyone says that. And what we do, that part's the easy part. What I can tell you that we are different and that other people don't do is we'll make your life better and we'll focus on other aspects of your life that people in my industry don't look at. Right. Like, let's give you an example. Let's look at retirement. We're all trying to invest, so we have a good retirement. Right. I mean, I think probably all of your listeners here are either looking to retire at some point or retired now, and they're looking for income. And one thing that people look at when they retire is they look, oh, am I getting enough money? Am I going to run out of money? I don't want to be eating cat food in retirement. I don't know if you've ever bought cat food before, but it is not cheap. So I don't know who came up with that, but.

And inflation on cat food is going up higher than a lot of companies. We've got a couple cats. So yeah.

Yeah, it's hilarious. But if you think about it like, nobody wants to be poor in retirement because you can't make more money, at that point, you've kind of lost. Well, I shouldn't say that that's fixed mindset, but you can't go back and get a W2 job like you could before. Like, you have to find a different way to make money. But my point is that most people just look at the financials and what they don't realize and what nobody talks about, and this part just boggles my mind, is that nobody talks about this. There are five other things that you need to focus on in retirement, and if you're not prepared for these, you're going to be hugely stressed out. There's a reason people die within a few years of retiring and it has nothing to do with them running out of money. So I'll kind of run through them really quick because this will take me hours to get through. But so the things you have to worry about in retirement first one is purpose, right? When you're working, you have purpose. You're providing for your family, you're saving for retirement. You love what you do. You have a reason to get out of bed in the morning, right? When you retire, you lose that purpose, all of it. And that's a huge problem, especially for men. Men identify as providers. Women have different issues. But men have the bigger problem here because they identify as providers. So if they're not providing, then they think, well, what good am I? Which gets into the second point, which is identity, right? When you retire, you have to find a new identity. Most people, especially men, identify as their profession. Women do too. But like I said, men have a bigger problem with this. So people identify with their profession. Like I'm a note seller, I'm a financial advisor, I'm an engineer, whatever it is, right? That's your identity. And when you retire, you lose that. So you need to find your new identity, which is another problem. You certainly have mental health, you have physical health, and then you have social, right? When you retire, you lose your social circles. It's just like when you become a parent, you lose your social circles with all your single friends and all your friends without kids because you're not hanging out with them anymore because you're hanging out with your kids. So all of these things are aspects in life that are really important. And you know what, the financial stuff, that's easy, right? That's just numbers. But this stuff, this is the hard stuff and this is what nobody helps you with. So we focus on making your life better. It's including the financial stuff and all of this other stuff that's really important because we want our clients lives to be better. That's how I mark my success. It's not whether you make a little bit more, a little bit less in the portfolio, it's whether am I making your life better. That's the sign of success for me.

I love it. And that is why you are one of the top 100 out there, Kirk. And you've got. I love our conversations and the pre conversations, the post conversations. It definitely comes across that you've got a big heart and you really do want more from your clients versus just a flat bottom line. And I think that's such a huge need, especially over the last couple years, that mental health, the identity and people really going through a lot of struggles out there, no matter what age group or where they identify it. We've all had to pivot a little. In a lot of cases, it's just not the numbers, it's the intangibles that really do help us make happy. You can have all the money in the world saved, but if you're an unhappy person, have no focus and no identity, retirement's not going to last longer and fade away. I think of people like Bear Bryant, who suddenly passed after coaching and other things like that. I mean, the world is littered with.

Those folks out there. So I mean, it's a great point you make because, I mean, we talk about this all the time. Baby boomers especially have this problem. They worked really hard to save a lot of money and they got very fortunate that the markets were in their favor. But they all worked hard, they saved a lot of money. And then for 40 years you're working hard and saving money, and then one day you're just gonna stop working and start spending. Like that's a big habit change. That's not easy for people. And a lot of people just think, I just need to keep working. I need to keep working. I need more money. More money. No matter who I talk to, whether I have a hundred thousand or a hundred million, if I say, if you had a certain amount of money, how much money would that be for you to feel like I'm gonna be okay. And no matter who it is, even the hundred million dollar people, it's 30%. Everyone thinks, if I only had 30% more, I'd be okay. It doesn't matter. Like it's always going to be 30% in. What good is money if your life stinks? If you're a workaholic and you're working 24 hours a day and you're never sleeping, you never seen your family, you've never seen your kids, and your life stinks. What good is money? I mean, a lot of people do a great job at saving and investing, but then at the end of the day, if you're dying with all the toys, who cares? Like, here's something to put into perspective because we talk about legacy too. And I don't want to go down this rabbit hole, but we do a lot with estate planning and legacy. Here's a shocker. When people do estate planning, what's the one thing they focus on? Where's the money going? Where are the assets going? What do they never talk about? They never talk about your legacy. They never talk about how you're going to be remembered. When you're in the obituaries, what do they say? Oh, this guy had a lot of money. When do you ever see that? Never. You see, how did this Person contribute who they left behind for family, like what they did to change the world. These are the things people talk about. They never talk about money, but this is the one thing that people focus on, is money. They never focus on how they want to be remembered. Let me give you an example. So we did this with one guy. We had this older client. He was 93, I think, at the time. But anyway, he was a World War II vet. And if you never meet anyone when it was in World War II, they never talk about their experience. They never brought it home. Like their family has no idea what went on, no idea the challenges and the tribulations they had to go through when they were over there. They just kind of boxed it all up and just kept it in. And a lot of them suffered for that through their whole life because they had to box it up and they're hurting, but they didn't have anyone to talk about. So what we talked about was you have all this experience that you don't want to share with your family because you don't want them to ever experience what you experienced. But you know what? That's exactly what you have to do, because they're never going to know who you were, what you went through. You're a hero. Like you. What you went through is heroic. And no one else experienced that. You need to share that with your family. This is how you're going to be remembered. So we sat down and videotaped this guy telling story upon story of his life. And his family got to keep that. They got to remember him through those stories. My dad had more stories than Mother Goose. He would never. If you ever see the movie Big Fish, Scott, you ever see that movie? Love that movie. That was my dad. You would never believe the stories that he told you. Like, oh, that couldn't be true. The only reason I know they were true is because I met half these people. But you would never believe it if he told you the story. I wanted him. My wife and I begged him to get these stories on tape. He wouldn't do it. So the only stories that are remembered are in my head. My kids never heard those stories, and I could share them, but it's not the same. So you have to think about your life, your legacy in terms of more than just money. And like I said, we do the money. The money is the easy part. Like, we can do that. Everyone else can do it. I think we do it better than most. But who are you going to believe, right? You're never going to know who's better. But what I can tell you is the experience is going to be unique, and it's going to be something that you're going to value because we go to the areas that are really important, and money is not as important as you think it is. What's important is the quality of your life.

Amen to that, buddy. What's the best way for our listeners and audience out there to connect with you, Kirk? Best way for them to reach out to you?

Yeah, I mean, it's. I'm hard to miss. I mean, I'm pretty much everywhere. So you can find me on my website at a company website. It's innovative wealth.com. i've written all the content there. So you want to get to know me. Read the blog posts. I wrote them all. You can also go to moneytreepodcast.com. that's the show we do every week. We do two episodes a week. We have Scott's episode coming out soon, so you want to tune into that episode. It was a phenomenal interview with Scott, and that's really a great way to get to know me. If you're interested in what we do, we talk all the time. I give my opinions. Like me or don't. If you like me, then give me a call. If you don't, I'm cool with that. Like, I don't want to work with everybody. I just want people that we have a good fit with. So that's the best way to find me.

We'll have all that information in the comments below section there. But, Kirk, this has been a great episode. We could go on. We definitely got to have you back on for a second episode or maybe even a third as this crazy world continues to evolve out there for you. So thanks so much for coming on and sharing your knowledge, your opinions, and then also your expertise, man.

I appreciate it. Yeah, happy to come on. Scott, thanks again for having me on your show.

No problem. All right, guys, that's going to wrap it up for this episode of the Nutclosure show. Check it out. The Money Tree Podcast to hear Kirk's opinions and his expertise. Really a great way to not only understand what he's thinking, but also to see. Hey, somebody you want to work with? I'm a big believer in the no PETA zone, no pain in the asses. It's an important thing for mental stability as a professional. So go out, take some action, buddy, and we'll see you off the top. Sam sa.