0:00 If there's one thing that has driven me nuts, it's heartbreaking in this business. As we can meet with people, we can show them mathematically how they can change everything, improve everything, completely change their lives, and they don't do it. Hey guys, welcome back to another show. I love that I'm wrapping up our Thursdays. do the virtuals.

0:40 sit in our studio media studio and on Thursdays, this is going to be a fun conversation with great energy. have incredible weather here in the Midwest today, 80 degrees baseball seasons opening for those people that don't know the Cincinnati Reds were the first professional baseball team ever. And so this city lights up on a day like today. So 80 degrees and I get a guy on to have such a positive, great conversation. And so. Most entrepreneurs spend years building income, but never actually build wealth. And at some point you start asking a bigger question. How do I get my money working for me instead of constantly working for it? So today we're going to dive into that. I'm joined by Kenneth Hemler, co-founder of One Wealth Map and author of Live Rich, Stay Wealthy.

1:25 He focuses on helping people move beyond just earning money and actually design a path to total financial freedom. In this conversation, we're going to talk about where entrepreneurs get stuck financially, how to think differently about retirement and what it really takes to turn income into long-term wealth. So Kenneth, welcome to the show. Thanks, Mark. Thanks for having me on. Appreciate it. Yeah man. Alright, the big question. Why does building wealth even matter? Well, you know, it depends if you're religious or not religious. you, you know, are religious, you can look at it and say, you know, in every single religion, building wealth is your purpose.

2:06 That is why you're here, because by building wealth, you can give back and you can help other people. If you're not religious, then you got to find a passion to build that wealth, to transfer that legacy throughout your family. It depends on where you come from. If you grew up poor, if you grew up rich, there's a very different dynamic mental status of how you think about building wealth. If you grew up poor, you never want to be poor again. If you grow up rich, what I found is that the wealth is handed down. People are not nearly as passionate as those first-time founders, those first-time builders. So why, answer your question, why is building wealth important?

2:46 What else are going to do? Sit and watch video games? lot of people think so. Well, it all depends on how you value your time. know, if you, and you know, I will tell you this, I've had just the honor of being in a business where we work with a lot of wealthy people and they're usually older and I'm able to gain a lot of insight and experience by, know, when I'm sitting in a hospital bed, next to a hospital bed of a client that's ready to pass, they never talk about their wealth. They never talk about all the wins. They regret the time that they didn't spend with family. So if you think about it, what does wealth have to do with spending time with family?

3:30 Because if you build your business the right way, if you build it with balance, and I'm not all in for this whole hundred hour a week craziness. To me, smart people are lazy. meaning they figured out systems and processes where they don't have to spend their entire life building a business, because that can be taken away in a second. Smart people that build businesses have balance and they can spend time with family. They have great marriages. They have great relationships with their kids. They have great relationships with their community. And you can only do that if you're wealthy. If you're a 100 hour guy entrepreneur, you're an 80 hour guy working at work, you don't have any kind of texture in life. And sadly, I've seen these people die.

4:11 because I've been doing this 42 years and I've seen thousands of thousands of people. When you sit next to that guy, start and you see a pattern, right? You see pattern, pattern, pattern, pattern, over and over again of older people, they tell you every one of the regrets. So smart people look at it go, why should I be stupid and try to try it again, try it on my own? know, experience is a terrible teacher, terrible. But other people's experience is a great teacher. So by listening to them, wealth is there to give you balance, and security. And let's face it, look at it. If you're an entrepreneur and you sit there and go, yeah, but I take two weeks of vacation with my family. Okay. Are you on your phone? Are you tethered to your phone? Are you tethered to emails or people calling you?

4:52 That's not a vacation. That's just a different work location. So wealth is important so that you can live life to the fullest. And that's why I titled that one book. That was a third of my four books, live rich, stay wealthy. So living rich. is having that balance, being able to travel when you want to travel with who you want to travel with, spending quality time with people, and then staying wealthy so that you can continue to leverage. What do you, how can we, can we define wealth easy down to one metric, regardless of where you started, what type of income you have? Can we establish for the rest of this conversation for everybody listening, when we mean wealth, cause they're thinking, is this me?

5:34 What does this look like for me? So Yeah, I think today it's harder to define that because you have Instagram and you have this comparative mentality where people are going online and they're comparing themselves and they're getting depressed and they're looking at people. You know, I'll give you great example of this. I'm not a billionaire, but I watched an interview and I won't name the name of the guy, but he said, yeah, I'm worth $5.6 billion right now, but I'm on my third marriage and I don't have a relationship with my kids. And I looked at that and initially my reaction was why haven't I done something to build $5.6 billion? That's my first, that's my human reaction and comparative.

6:15 And that goes back to caveman psychology, right? But then I sat and go and thought, you know, I spend every night with my family. I spend every weekend with my family. I take three to four months of vacation a time a year. I'm okay with not having 5.6 billion. If that's what that would have meant. Now then you sit back and go, well, wait a minute, if I was smart. could I have done 5.6 billion and still had that. So that's what I'm striving for every day. So to define wealth, I'll put it in mathematical terms. Wealth is not how much you have. Wealth is being able to do what you wanna do, when you wanna do it, with who you wanna do it, and not worrying about it. If you think you're doing it, but you're worrying about it, you're not wealthy.

6:57 I have people worth 50, 100 million plus, they're just nervous wrecks. on everything, the economy, the war, the interest rates, they're always, to me, that's not wealthy. That means you got a lot of money, a lot of zeros, but you really wanna get to that last minute in life and look back and go, hmm, did I really enjoy every day? So to me, wealthy is not just the money, but it's also how you think on a daily basis. So it's not just the money, but I want to ask a money question. Is there enough wealth in let's just take being an American citizen. Is there enough wealth in our system that every single person of working age could be wealthy throughout their experience of life?

7:47 The answer mathematically is yes, but the answer, the fact is no. And I, know, just to be clear, I'm not going to, I'm not a real religious guy, right? So, but there is a lot of lessons in all the types of books and I've read just about every religious book and I'm not promoting anything religious here. I just want to clear the air on that. But Jesus said something once and he said, there will always be the rich and there will... always be the poor. That's a great lesson. And it's not because we don't have the opportunities in this country. We have so many opportunities more than any other country. It's not because there's only so many slices in the pie.

8:31 It comes down to two things mindset and work ethic. That's it. And not everybody has the mindset. And not everybody has the work ethic. They make choices to not be wealthy. People who are wealthy made a choice to be wealthy. So the answer is yes, everybody could do it. But the answer is no, everybody won't do it. So take that person listening right now, who their wife right now has fit into the category of, no, they're not wealthy and they're not gonna be. You said two things, the way you think mindset and then work ethic. Do you think there's a simple algorithm for the people that fit into the category, they're not wealthy now, they don't have the vision maybe they ever could be wealthy, that's part of the mindset thing, but they haven't been around people.

9:22 They didn't hit the lottery of the DNA. They truly didn't have the environment. This isn't about where I came from or people who are poor and turn their life around and become a billionaire. I'm talking about 60 or 70 % of the people in our country that I would say still get to live a great life because the wealth of this country that they get to be in the environment is way better than living in another country. But what's a mindset change? Just one, that if someone's listening to this and say, I always hear these people talking about wealth because we didn't say rich yet. Right? They keep talking about this and it's a mindset and feeling like you're, you you can go where you want to and travel in it. And you're not just going on vacation for once or twice a year. What's one actionable step mindset change that everyone that fits into that category could start right now to change things over the next three to five years.

10:14 That's a really good question. And I'm just going to go back to the hundreds of millionaires and some of them are now have grown into billionaire status that I've learned from. What's one mindset? I would say it is ego and confidence and that ego and confidence translates into tenacity. If you don't have tenacity, it's because you don't, you don't, have a weak ego and you also have weak confidence. If you have a strong ego and a strong confidence, you can be tenacious. Tenacious people are the only ones who win.

10:56 Where do you think a person, and I'm not trying to do, there's a bunch of stuff we're going to talk about your experience and wealth and all that today and about entrepreneurs and business, but so confidence and ego. Where do you think someone, you know, that person that walks in the room and doesn't make eye contact, that doesn't feel like they belong, that looks down at the ground, that has negative body energy, they don't believe in themselves. What do you think is a starting point? Is it as simple as maybe finding the right book? going and listening to the one of, what do you think could be the beginning for these folks? Well, that's a really good question. I'll just tell you a story about my history. So when I was 16 years old, I lived in Delaware and I got an invite to try out for a hockey team in Toronto.

11:43 My parents were not supportive at all. So I literally packed up my Jeep and I drove from Delaware to Toronto, had no idea where I was going, had no money, had to sleep in my Jeep with a soft top in Toronto in the winter, which is very interesting. and struggled. Man, did I struggle? I would go three to four days without eating. And my confidence was really not there because that was tough. I was basically homeless. And what ended up happening was the team traded me down to Niagara Falls. And during that little stint, that was a brand new semi-pro team that opened up and they were supposed to pay us.

12:23 And then four weeks went by, six weeks went by, eight weeks went by, no paycheck. They kept promising us this paycheck and I'm starving. Had nowhere to live. I had a nice family that was willing to foster me and they brought me in and it was fantastic. And I'm, you know, endowed to them forever. But what ended up happening was I ran out of money. The team manager fraudulently stole all the money in the team and they had to close the team. So there we are eight weeks. You know, I'm sitting there waiting for paychecks, no money. So what I did was I went and sold Kirby vacuum cleaners door to door out in the country and we're talking crazy stories. But there was a guy and his name was John Ferlini and I've tried to look him up to thank him.

13:07 And what they would do in this Kirby world is, know, here I am 16 years old, right? You literally meet at the Kirby office, you jump in this van and they call the van master. It's like, Darth Vader, right? The guy that drives the van is the van master. And then there's all these guys in the back and they open up the door and they all pour out. And then they go out and try to sell these vacuum cleaners. Well, John Farlini felt really sorry for me. And he's like, man, this kid's struggling. He gave me a book and that book, yeah. That book was Think and Grow Rich.

13:49 Sorry, that was a tough time. And... That changed my life. See, that's wild. That's what triggered your mind to go back and think about that experience. Cause I said, what one book? And your brain went, man, I lived it. But it just, but it just wasn't the book. was someone who showed up and cared. Yes, he did. There's a lot of people that during that period of time that stepped up. uh People gave me food, people gave me shelter. People tried to support me. There's a lot of people that tried to steal from me because they, you know, they knew I was vulnerable at that time.

14:31 And you kind of learn your way very young. But I will tell you if there's one book, and it is, it's timeless, right? And I don't know if everybody knows the story behind that, but the story behind that book and how it got written is in of itself a survival story. So I don't, have you ever heard the story behind that? Yeah, but go there for people who haven't. You read the book, it made such an impact in your life. Tell the story. Yeah, so Napoleon Hill was a writer and he was very poor. He lived in New York City, had a wife and some kids, and he was struggling. And at that time, Andrew Carnegie, or Carnegie, depending on who you ask, he knew that he had just sold his company for $400 million.

15:18 Today, he'd be close to Tesla, oh Elon Musk, but not quite there, but he was really the richest man in the world at that time. He felt like he owed the world a compendium of how he succeeded in what he did. So he sent a message to Napoleon Hill in New York City and said, Hey, I want you to jump on a train and come visit me. Now, Napoleon Hill was really excited. He thought, okay, man, I am going to interview the richest man in the world. So he shows up in his office and Carnegie says, I'm not here for an interview. What I want you to do is I want you to be my writer. And I want to endow in you all of the secrets which made me so wealthy.

16:04 So Napoleon Hill got really excited and said, well, that's fantastic. How much are you going to pay me? He says, absolutely nothing. And he said, what do mean nothing? I have a wife and I have kids. He says, what I'm going to do is I'm going to get you in touch with some of the richest people in the world. I'm going to set those interviews up with you. And through that, you yourself will become extremely wealthy. So Napoleon Hill originally said, I'm not going to do it. I refused to do that. I need a paycheck. See, that's where people's in there, like secure into that paycheck and they can't see the other side of the forest. Right. And so Napoleon Hill basically said, I can't do it.

16:45 Andrew Carnegie says, okay, all I want you to do is one thing. And he said, well, wait a minute, how am going to get home? Because I don't have enough money to even get the train ride home. He goes, okay, I'll tell you what I'll do is I'll give you the train ride money. But want you to make me a promise with your solemn word as a man that what you're going to do is you're going to look in that mirror every single day. As soon as you get up tomorrow and you're going to say, I can do this. And so Napoleon Hill in an interview on a tape, an audio tape talked about the experience of looking in the mirror. He said the first day he did it, he thought, this is ridiculous, but I'm a man of my word and I'm going to do it.

17:25 So he kept looking in the mirror and said, I'm going to do it. I'm going to do this. I can do this. I can write this." He goes, the first day he goes, I thought I was just a liar. I'm lying to myself. I'm looking in the mirror. You can't do this. You have no right or credentials to talk to Henry Ford or Thomas Edison or all of these people that he's going to connect me with. He says by about the fifth, the seventh day, something changed. He says, he's looking at himself. He goes, maybe I could do this. Maybe there is something there. He says, by about the 14th day, he goes, darn it. Now I know why Andrew Carnegie is so wealthy. He says, I believe in myself. He went on to write Think and Grow Rich.

18:07 the part, the other part of the story, which is very interesting is right before he went to his publisher back in the 1920s, when he had this written, his entire apartment burned down and he only had one manuscript. He had to redo the whole thing. But it is hands down, the most widely read book over history that in my experience in meeting with millionaires and very, very wealthy people, they've all read the book, every one of them. So if you ask me if there's one step, read the book. Read every version of it. There's 30,000 versions of it now, you know, because it's out of copyright status.

18:49 So people use a lot of variations of it and it's really good to see those variations. Yeah. Thank you for sharing that. All right. So now onto the rest of the story as one of the best, as one of the best, um, media people back in the day, man, that guy was so good. And now for the rest of this story, that guy was quality. so let's talk about entrepreneurs since that's the world that we're in and you're around so many of them. I bet what percentage of your clients are entrepreneurs versus employees inside an already established entity? Oh, I would say it shifted over time, but right now probably of our clients, 60 to 70 % of them are or have been business owners, 20 to 30 % were employees.

19:35 Okay. All right. So this is perfect conversation. What's the difference between somebody who makes say a half million dollars a year, which that'll put you in the top, not even the top 1%, probably the top quarter of a percent in this country. So difference in that person who makes $500,000 a year on earned income versus someone who's wealthy. Usually the guy that's making $500,000 as an income thinks he's the smartest guy in the room. The guy that's making millions and millions of dollars knows he's not the smartest guy in the room. He surrounds himself with the smartest people.

20:15 Did that person who have millions, most of your clients, how many are self-made? First generation versus second or third. Very few second or thirds. And I can tell you that most second or thirds never make it. And it's very much the same psychological makeup as lottery winners after five years. 90 % of them have lost all their money. 70 % of them need psychological help. They're destroyed. Anytime you're handed something without building it yourself, it's just universal. You didn't know how it got there and you're not gonna know how to build it. It's, you know, there's a lot of business owners that do it right.

20:59 And what they'll do is they'll bring their, they'll say before you as a kid, before you can work in my business, you got to go to work for three or four other businesses. And then I'll let you work here. And the mistake a lot of business owners make is they bring their kids in and they think that just because they brought them in, they're going to be able to transfer their wealth and experience and it doesn't happen. When you wrote the book, one of your four books, live rich and stay wealthy, what's the underlying premise of the book? The last one is in the 42 years I've been doing this, I will tell you there's been a big change in the way that financial services have been deployed to retired people or people that are transitioning from business to retirement.

21:42 I love my industry, but sometimes I'm quite frankly embarrassed by my industry. There are these giant financial organizations They could care less about people's financial success. It's about stockholder profit. It's about selling products, manage money, annuities. And even though they're supposed to be fiduciaries, they're not. It's disgusting. And so I wrote that book and the theme of that book really is how to use technology to make sure you're getting the right advice. How to find and evaluate the financial team. Look. The people that sit there and try to do it themselves, I've kind of categorized that as to why did people try to do things themselves?

22:26 Because I don't want to do anything myself, right? I just want to organize people to do the things that they're good at doing. But there's so many people, engineers, you know, we had a large following from Boeing and every time a Boeing engineer would call us, I'd say, I don't know if I want to work with this guy. He thinks he knows more than anybody else. Because smart people usually are not the wealthiest people. So the underlying theme of that book is if you're a do it yourself for fine, I'm not, no one's can help you. You're there's too much ego, but if you're open minded, then the question is how do I assemble a financial team of advisors, money managers, CPAs, insurance agents? How do I assemble them? How do I find them?

23:07 How do I evaluate them? How do I oversee them? Like an employee, like you have normal evaluations and you should have a plan. I find these sometimes retired people, we've gone to some people there and we've said, you know, your financial advice, well, you use financial advisor, your CPA, your CPA is terrible. He's been missing all these expense, all these deductions, all these strategies for years, but I like them. I've been with them 20 years. He's a nice guy or my financial advisor. He's overcharging and fees. He has too much risk to return ratio. And we'll point these things out and people say, I know, but I'm just comfortable. I know them. I like them.

23:47 I've actually had a guy where we showed the guy that we could save him a couple hundred thousand dollars in excessive fees that the financial, the bank and brokerage company was charging him. It was like triple charge. He goes, yeah, but I go off with this guy. I'd have to face him if I fire him. Well, that's business, man. Like you gotta, you gotta separate the business from the friendship. And if they're not doing what they got to do to get you ahead, then they're not a good employee, not a good partner, not a good So the theme of that book really is kind of try to help save some people from themselves making the right decisions. So if Warren Buffett and Charlie for years, we held these guys up, people who aren't in the financial system as Berkshire Hathaway and billions of dollars, and we held them up as the people to listen to and follow.

24:39 If they say the average person, it's as simple as this, go buy an index fund, let your money sit there, reinvest the profits every year and get to retirement. If they say it's that simple, and what if we look at the market, the S &P over the past, what? uh 30, 40 years? What's an average compound? 8 %? Is that an average return? ah last 20 years. So there's not any average human being, and I'll say average, like the bottom 90 % of us that are going to take enough time to beat that or even come close to it. And so I'm going to combine that with, I don't know if the old 4 % still applies or if it's going to for the future, right?

25:24 Live on 4 % as long as you can make the interest, build up the account. So 4 % of the account every year is enough for your living lifestyle. I don't know if that's the same rule, but if it's as simple as invest in an index fund over 20 or 30 and 40 years, reinvest the profits, get to a point where the fund where your account becomes valuable enough so 4 % of that account every year sustains the lifestyle you want. Is it that simple? It's not. Got to remember, there's a lot of what I call lazy sound bites. I'll give you an example. The 4 % rule. Does it work? Absolutely not.

26:06 It doesn't account for taxes, Roth conversions. It doesn't count for, you take a look at any period of time, 1986 Tax Reform Act, crashed the market, sent the SNLs into spirals. People didn't get a return to their base value for 10 years. Take a look at Volcker. in the 70s, 15 years the market was down. You take a look at 1999 in the NASDAQ, it dropped 40 some percent and it took 15 years to just return to zero, right, to where it was before. So these general rules, I've heard the other rules, take your age minus 100 and that's how much you should have in bonds.

26:51 That's the most ridiculous rule. But it's great for sound bites. It's great to get attention because people don't want to put any mental effort into it. They want a shortcut, fast rule that somebody tells them it's going to work. And then when it doesn't, then they say everybody in this industry is a ripoff. Bottom line is, when you have your own money, I call it U Inc. You have a company and the company is investment management. Your job is to hire good people to manage it. Your job is to put the effort into run your company. And those companies that fail is generally because the business owner is not paying attention.

27:34 The reason people's retirement fail, they're not paying attention. They want that quick, easy rule. It's like junk food. But the fact of the matter is no, those rules don't work. Here's why. There's three stages in life. Accumulation, bridge, distribution. If you're in the accumulation stage, absolutely. Right? If I'm 25 years old and I want to put 50 % NASDAQ, 50 % S uh &P, not a problem. Totally agree with that. Then you get the bridge stage. This is where things get a little bit more complicated. And by the way, the entire financial industry is geared to teach their financial advisors, just work with accumulation people, never teach them how to distribute money.

28:17 Why? If you're an advisor and you tell a client how to take out more money, Your boss is going to come to you and go, hey, man, you just lost assets under management, which lost the company fees. What are you doing? So there's this direct conflict with the entire financial advisory field. They don't want to teach you how to take it out. But in that accumulation phase, yes, that basic just index aggressive growth works. When you get to the bridge phase, that's five years before retirement. It gets a little bit more complicated because imagine. Let's say three years before retirement, you go into that NASDAQ, you drop 40%, your entire retirement plan's in the garbage can. Then as you segue from the accumulation to the bridge to the distribution phase, that should be putting you into a position where it's a completely different allocation.

29:06 Because you cannot, here's a rule, do not try to pay a fixed expense with a variable investment. It doesn't work. And that's why you see so many people, they retire, they lose their money in market crashes, and then they gotta go back and work at a grocery store, bagging groceries. So the answer is categorically, no. If you're Warren Buffett and you're buying companies, people will say, Warren Buffett would, this is his philosophy. Look, Warren never bought stock. That's what most people misunderstand.

29:47 He was not a stock manager. He was a business owner. He would go in and buy enough shares, and he still does, buy enough shares he can control the company. He's a business owner, not an investor. That's a completely different philosophy than how you invest. Is there the same strategy or is it completely different based upon the bank account that someone could invest what they're working with? So starting today, if you would segment into, we do a lot of things in threes, but let's say it's four or five. Someone has $25,000. Someone has a hundred thousand dollars. Someone has two 50, someone has a million, someone has 10 million.

30:29 I'm sure you're going to say, it's based upon the strategy, what you're trying to accomplish, where you're at in your life. There's probably a lot of factors, but. Is it so complicated that wherever the place we're at, there's a different strategy for the amount of money you have, the place you're at in your life? it, is it that complicated? Yeah, look at it like a business. Like if you try to create general rules for businesses, it doesn't work. If I go to an HVAC company versus a software company versus a medical company, you cannot use the same rules for every single company. There's no just, hey, this is how everybody does it. An HVAC company has different regulations. They have different employee stacks, tech stack, everything compared to a healthcare company.

31:10 So you got to do the hard work. You got to figure out your investment business needs to have its own plan and every single plan is different. I've probably in 42 years, probably produce 10 to 15,000 different tax and investment plans. And what keeps it exciting? Not one of them is the same. Never. Is there, I'm going to use this term. I don't know if it applies to the question I'm going to ask, but it applies in a lot of different industries to a certain spectrum of where somebody is. I'm going to call the gold, the Goldilocks zone of, take away what your brain does when I say that I'm going to say the Goldilocks zone of an oven of a wealth.

31:57 Cash access to cash access to investments that someone has to work with that you're like, man, they really got something working. it $3 million? Is it 750 grand where you just know quietly you have that conversation with that new client. You're like, wow, they're legit. They have this amount mainly can really change their life. It doesn't have to be 10 or 20 million. What is there a Goldilocks zone? No, it's I don't really look at it like that. I know probably a lot of people that are selling assets under management say my target is three million dollars, right? I look at it more as what's the cost to benefit ratio? So, you know, if I get a guy that's got 50 million and I look and say, you know, my fee is going to be 50 grand, but I can save you 60 grand.

32:44 It's a waste of everybody's time. What's the point? Even though he has 50 million dollars. Now, if I get a guy that's got five million and I go through and say, my fee is going to be five grand, but I'm going to save you 50 grand a year in tax. So it's more of the ratio of what a person can help another person with to what their fee is versus a dollar amount. So I did something last night. I didn't even know that because on our Thursdays, whatever day is coming out, we have anywhere from three to five podcast conversations for 45 minutes to an hour. But last night I was doing some strategy and not even just financial planning. I'm 47 and I still act like I'm 25 on growing and scaling my businesses.

33:28 And my risk tolerance is higher than it's ever been. But I can say that because I'm pretty safe in my personal life when it comes to finances, right? The debt piece. If everything blew up, I still have this here. Um, businesses goes away. I wouldn't have to pay myself for a year. So I'm there, but I just said, if I took $10 million right now, I'm not saying I have it for everyone out there. Don't come put a target on my back. Don't try, don't, don't, don't try to like come and sell me something. Don't come in like kidnap me or some shit. Cause nobody's going to give you any money for me. Right. But I just took $10 million. And I said, of all this strategy and all this real estate I buy and companies I build. If I just invested it in an index fund and just let it roll for 20 years, it would compound like $66 million.

34:17 Yeah. Yeah. You know, I look at some of the businesses that I've started, owned and sold and RORs on those businesses. And then I look at the ROR on just how we manage assets. And by far, there's been some knock them out of the park businesses that we, that I've started or co-founded and we've sold and they've done really, really well. I've had some, they're goose eggs, zeros. If you averaged it all out and you then input the time cost that I put into it. if I would have had the capital.

34:58 See, there's the catch because you can say the S &P 500 does better, but that's assuming you have the capital. People saving a hundred bucks a month, they're never going to develop the capital. So you have to take that risk in a business to develop the capital. And then you have to make a decision. Do I want to just do try that again and take the roll the dice or the time cost of money is do I just set up the right structured portfolio and let that do the work for me. So it's either people at work or money at work. And if I look back, I would have never been able to develop the capital that I have if I wouldn't have done the people at work.

35:40 But now that I've done that, I look and say, well, the money at work is a lot more secure way to do it than starting a business at this point. But it makes me my response. My response is both. Yeah. Yeah, because you, while you're building the business, I think a big mistake is there's so much conflicting information out there, right? You hear all this, uh don't wait to make a decision, but be patient to make a decision, right? It's all this confusing advice out there. And then when you look at a business, people will say, well, start a business and that's the way to get wealthy or get a good job. And that's the way to get wealthy. I hands down will say, start a business.

36:21 You get to control it. Now that It doesn't discount all the millionaires and billionaires that come out of Facebook and Google and their employees and they have stock options and they've just knocked it out of the park and they're wealthy. Doesn't mean that they're going to solve or save that wealth and preserve that wealth, but they can get wealthy depending upon who you work for. But I think a majority of people, they're going to get wealthy by building a business. The mistake that they make, and this is where the conflicting information comes in, you'll hear one business advisor that says, Go all in, go all focus, 100 % in, don't lose any focus. And then you get other people, they'll say, no, you should really take some money out. Well, you have to look at your ROR and your risk.

37:03 If you're making $100,000 net after expenses in your business and after you've paid yourself, then you look at what is the risk of the rate of return on my business. If I get 5X on my business in 12 months, why would I put it into an S &P 500 fund? I'm gonna get the 5X, right? But the other, I think, missing piece business owners have is that they don't understand how to monetize their business. And when they're doing, when they're spending money, you shift from a, hey, this is where I should invest money to what does it do to my multiple on my EBITDA for valuation? So now every dollar that's spent is focused not on what will it X me in 12 months.

37:46 It's what will X me on EBITDA multiples. So. The answer is both because you still need to have some financial reserves. But the answer is you got to do the hard work. Again, there's just no general rule. Do the hard work, figure out where the rate of return is, figure out what the 12 month, you know, multiple X is, but then figure out what the EBITDA valuation X is, and then make a mathematical decision that's reasonable. Yeah. Here's another piece to both. Uh, and both is still being in the business. was listening to a podcast. I try to, I'm always trying to learn. was always in books, but now you can listen to great experts on podcasts on the fly, driving, working out something.

38:27 I still read, but, cause now you can listen to all the books everywhere, but I was hearing them talk about the fed chair and this big debate about the president doesn't like them. And are they going to step aside and hand it over to somebody else? And they were talking about philosophies and, they were even talking, somebody said, you know, I wish back, this just isn't about reducing the fed rate right now. I wish the same person, the chair that we're saying, Hey, are we going to take another reduction this year? We're going to have two or three. Hey, say it's not just about that. I want somebody with good fed policy because in 21 and 22, when people on the ground felt like inflation was coming left and right, they should have been raising the rate then.

39:08 And I thought about this and I went. uh 100%. This person was a professional on one of the elite podcast. And what they were saying was, I knew it was true. I'm in the real estate business. I'm touching mortgages. I'm actually helping employees work through moments in their life. I'm making investments. And I saw all that happening. I saw it happening like, damn, why are they not raising rates right now? The economy is on fire. Inflation is getting out of control price. And they waited. And then they should have been more aggressive 12 or 18 months ago. When things were slowing down, housing markets not great. We're talking about 30 year mortgage rates at seven, half 8%. The market was locked up and they're sitting back here looking at something. The only thing these people at a Fed chair sitting around, they're looking at data that people handle them.

39:51 I'm on the ground. I'm in the marketplace. I'm actually not just talking to consumers. I'm helping them work through it. And I, here's what I thought to myself from listening to that. That is why I have to stay in the game as long as I can, regardless of this conversation about retirement. I would agree. You look at all the failed fed chairs, Volcker, Bernanke, Greenspan, Powell. You know, there's an old joke in our business. What does a weatherman, what does a failure of a weatherman do after he gets fired? He becomes an economist. They're about as accurate as the weatherman. Weatherman might actually have a higher accuracy with new technology.

40:33 They try to control things, but they don't. So if you know that they're not going to be controlled, the only thing that you can do is try to anticipate their moves based upon how inefficient they do make decisions. If people look at general uh geopolitical and macroeconomics and you try to make a decision based upon what you think they're going to do based upon that, it's incorrect. You got to look at how they're looking at it. And they're looking at it to me inaccurately. And they have, since I started in this profession. Is this right analogy from what you've seen or metaphor? It seems like they're looking in the rear view when what they should be doing is looking right here and in front of them.

41:15 It totally, but I think that they, they, well, first off, when we look at inflation, we already know that the government skews inflation, right? There's multiple S levels of inflation. And we also know that there's replacement inflation. So if the government doesn't like that filet mignon went up by four times, they'll flip it to hamburgers. So they get to maneuver how they want. And remember the bias is inflation determines increases in social security, federal pensions, federal wages, all kinds of things are tied into that inflation. So there's a conflict of interest on what real true inflation really is.

41:58 And what's really funny is a lot of the core inflation leaves out energy and food. Like, okay, so nobody's going to drive, nobody's going to heat their house, and nobody's going to eat. So why count that stuff? So it's an inaccurate system, and it's grossly understated, even if it's at 3%. What we see in our numbers from our clients and their spends is closer to five, which puts even more precedence on the fact that people need to look at their money. Because look at it, if you're making 6 % in a CD and you're paying one and a half to tax and you're netting, know, three, a four and a half, you're still going backwards to inflation. love it when people say, well, I'll ask them, why did you do that?

42:39 Why didn't want to lose any money? Oh, so you'd prefer a guaranteed loss versus a potential loss. Well, what do you mean? It's guaranteed. I see my statement. You see the number, but you don't see what you can buy with it. And every year that's going to go backwards versus you have to invest in something that has very variable volatility in order to beat the inflation. So it's that education of the consumer and it's, you know, our, school system completely fails our kids in financial aptitude. Absolutely ridiculous. China, Taiwan, Hong Kong, these countries teach financial dynamics at the grade level.

43:19 We don't teach any of that stuff. It's embarrassing. We'd rather have them know how to complete. I could not probably complete a sentence, right? If I didn't have uh editors for that book, you would have thought a third grader wrote it because I can't put together a correct sentence, but I don't care. Yeah, the first one of my friends, know how you build these networks and the business people become friends. And he reached out to me and said, man, I have this idea. I'm writing this book. Will you write a chapter? And I'm like, dude, I don't even know why you're asking me to write a chapter. Cause I don't, my brilliance and my ability doesn't, isn't anywhere near right. And he said, will you write it? And I just didn't put it on my priority list. And he texts me one day and say, dude, I have to have that tomorrow.

44:03 And I just wrote it out. Didn't use chat, chat, JBG, didn't use AI. I'd use it more now. And it quite possibly could be the worst chapter, not in that book in the vast majority of like mortgage, real estate and financial books. It's so bad. won't even read it. However, however, there's 42 chapters that were written from 42 different people. This thing is on fire. This book and he's reading, he's now writing other books. Um, that are similar about other industries, but someone then a huge mortgage company reached out to me the next year and said, Hey, we're picking three people from this book that we're going to, we're going to pay you to come speak at our event.

44:45 Would you come and do it? And I went, what? Wow. But, but here's the thing, but when I told people they laughed and they're like, what? I said, well, there must be something in there about the things that I do that triggered for that person even though the grammar and the writing is terrible. Probably so. I I've gotten a lot of criticism on the books from some academics and they'll say, well, you should have structured it this way. You should have structured it that way. And then I get really a lot of accolades from some super wealthy people that just overlook what the structure should have been and they can understand the message.

45:26 yeah, I don't think that going back to really what is the root. It's the education on money. And that's the sad part is people are just not getting the education. And that sad part is who is educating them? It's the financial advisors and CPAs from these big companies that have an agenda. And that's why so much misinformation is happening. Yeah, there's only a few college courses that I really learned anything from very few. And yeah, I remember some things about elasticity and economics and opportunity cost. And every once in while, those things pop in my brain about decisions I'm making, but the vast majority, like I don't do my own accounting for my business.

46:09 I have accountants, right? I don't do my own legal work. I'm well versed enough in it, but I hire the experts to do that. So something triggered in my head, I'm gonna jump to another place here in my brain that I've never thought of before. As we were talking about investments and about if the 4 % rule, let me throw something out and you critique it and poke holes in it. Cause I've never even, it never occurred to me, but if volatility, if we can't time the market on downturns and down cycles. So if the market takes a 50 % drop, within a certain period of time and my investment portfolio is in the trash and I can't retire and I'm back working at Walmart to sustain my, if that happens to me, poke holes in, wouldn't the right approach to have 15 or 20 % in cash all the time in a CD, even if I'm trying to break even, so I can maintain my lifestyle on that while I just let the portfolio come back because it always does.

47:08 Mark, you are right on point. And that's actually the way that I planned for four decades and I can't take any credit for it. I was really lucky. I fell into one of the first financial planning firms in the country. I didn't know any different. I was 18 years old. And back then there was insurance agents and stock brokers. And I got to be in one of the first three financial planning firms in the country in the early eighties. And the gentleman I work for owe everything in the world to. His name was Bill Moore, and he had a photographic memory. You'd walk down the hall, he'd stop you and say, hey, Himmler, uh cite section 4.15 of the IRS tax code. I'm like, I don't know.

47:48 And he could recite the whole thing from beginning to end. So it was a great teacher, but he also taught what's called volatility metrics. And you're right on cue. Now we can get into all kinds of complicated and confusing vernacular that relates to portfolio management, but I'll put it simply. There's three buckets and bucket one has volatility of less than five percent and it would include things like money markets, short-term cds, short-term bonds, maybe short-term annuities, sometimes not a fan of those, but anything that has less than five to six percent volatility. Bucket two holds things like convertibles, preferreds, could have blue chips with dividends, the dividend will offset some of the volatility.

48:32 And then bucket three is anything that has greater than 10 % volatility. And the way you manage a retirement plan is you just reverse engineer your cashflow. So you add up pension, rental income, social security, subtract expenses. What's your negative cashflow? Whatever that negative cashflow is, multiply it by five. And that's how much you put in bucket one. And then for bucket two, discount it with inflation because you're not going to touch it for five years. then that will run you for five years. And then all of your volatility investments greater than 10 % go on bucket three. If you look at the statistics, if you invest in the stock market with a one year time horizon, you have a 90 % chance, this is Dow Bar study, you can look up online, 90 % chance of losing money in one year.

49:22 You go to five years and it's 20%. You go to 10 years and it's less than five. You go to 20 years, it's less than one. The volatility metrics work themselves out, but you need the time to smooth out the volatility. So you're right on target with the proper way to structure it. What cracks me up is these financial advisors, and I don't know, this is like a big business, it's like McDonald's, they have to systematize everything. People will come to me, and I've heard this from people we've hired that have worked for all these big companies, and they'll say, this is completely different, I've never seen anything like this. Well, tell me how you used to do it. Well, we were instructed to just ask, do you want conservative, moderate, or aggressive? And I'd say, well, who would determine what determines moderate, what determines aggressive?

50:07 So I tell the story about my 16 year old kid who, when we were living in Vegas at the time, I get up four, 430, I get to the gym, I drive home from the gym. I'm driving home and all of sudden this car buzzes me. I mean, you don't ever have that car go by you so fast, it scares the heck out of you, almost drive off the road. So now I'm pretty upset. I follow this car and I was like, hmm, he's turning the same way into my development. Wait. That's my son. Oh, so I get out. Let me tell you, I wasn't happy. I wasn't a happy dad. And here's what he says to me. Well, I thought I was driving conservative. Yeah. So a 16 year old kid that views how he drove is conservative.

50:47 So you get somebody that's retired and you're meeting with somebody without life experience, without really volatility experience, or their company is telling them to only tell them this or go, would you like conservative, moderate, or. uh It's like going to McDonald's. You want a small, medium, or large drink? I want moderate. Did you know, this is interesting statistic, did you know 90 % of people when asked conservative, moderate, aggressive, 90 % choose what? Moderate. It's the same psychological trigger why McDonald's used the upsize. McDonald's figured out when there was three, people didn't want to order a small because they wouldn't have enough. They didn't want to order a large because they thought they'd have too much. So everybody ordered uh a medium, right?

51:28 because it's right in the middle. And then what McDonald's did smartly is they said, well, how about I upsize it for 50 cents? Oh yeah, 50%. And they were selling billions of dollars in upsize just because they help people make a psychological decision. That falls back into the same thing of the financial advisors. They're sitting there trying to tell people you can have conservative, moderate, or aggressive. It doesn't work like that. And so that's where the education is coming from. People are programmed by the financial propaganda the financial media, the financial institutions. And so they just follow along like lemmings until they go off the cliff. Have you been, have you found yourself able to change people's mindset about spending less now to live for the future?

52:17 Have you been able to really change people? You know, um Albert Einstein said, the only thing that's harder to split than an atom is a belief. And if there's one thing that has driven me nuts, it's heartbreaking in this business. We can meet with people, we can show them mathematically how they can change everything, improve everything, completely change their lives, and they don't do it. That is, it is heartbreaking. to see that happen. So the answer is, do I think I've been successful? I guess in a certain percentage, but not nearly where I'd want to be.

53:01 We were watching a show last night. It was out in 2002. had Treat Williams in it, Everwood. He's a doctor. He goes into a guy who needs all this surgery and he's trying to convince them to get this surgery. And the guy just is like, yes, I'm good, man. I'm good. I'm good. I said, I looked at my wife and I said, that's what I go through every day. Like the depression of the doctor, Treat Williams, great actor, sorry we lost him, but you saw his face just like, wanna help you, just let me help you. And the patient's like, no. And that's the plight of a good financial person. They really, really wanna help and when clients don't let them, it's heartbreaking.

53:42 So what do do? You got to move on. think younger in my career, I'd sit there and try to convince them, convince them, convince them. And I think I've just learned that either somebody is going to be open-minded and we can get to work and help them, or we just have to move on because we could spend all our time trying to convince these people. And what we found is they go back to the norm. They revert to the mean, just like with dieting, you know, people get on a diet, they lose weight, and then they junk food. They get on a diet, they lose weight, they junk food. We found least younger in my career and that's You know, originally, this is my third company. sold my bigger company in 2014 to a private equity company. And one of the reasons I sold was it was just so heartbreaking.

54:24 don't, I just needed like six month break from trying to help people because when they don't let you help them and you walk away, you're like, their family's going to be destroyed. They won't be able to retire. They could be on the street and you're like, it's, it's hurtful if you care. em Who's your, this conversation has been great. We're wrapping up our hour here. Who's your ideal client? Like in your quiet moment when you looked at your wife, when you were watching Everword and you're like, this is what I go through every day. But then also if you're having that honest conversation, none of the for the market, politically correct. We help everyone know like who do you get excited for? Like who is your like ideal client that you're like jumping up and down, like let's get to work. You know, to be honest with you, when I sold to the private equity company, I didn't need money anymore.

55:06 I had more money than I ever needed. And so when we started this company in 2014, I said, I'm going to do a little different. I'm only going to accept people under a certain criteria. It doesn't matter how much money they have. They get a 500,000 or 500 million. It is about a couple criteria. One, they're nice to my staff. That's number one. Number two is they're open-minded and they collaborate. They don't come across as egotistical, meaning I know that I'm going to do it myself. I know better than you because why would they want to even have us as a partner if they know so much? So the number one is they're nice to my team. Number two is they're collaborative with us. And then number three, it's just a cost benefit analysis.

55:49 I would much rather work with a guy with 5 million that is fun to work with and you can see results and you could like as a practitioner, what do we want to see? We're like architects. We want to see this beautiful building built. We want to design it, we want to see it built, we can look at it and go, God, that was my work. And when clients don't let you do that, it's depressing. Now, for those guys that are in this business for the money, yeah, they're going to accept anybody. For us, it's more about that. All right. So let me try to wrap this up. It's always like, man, how can I have a final wrap up question when there's just so many out here, but what do you think our aim should be? So take people that are your blood that you care about that level of care.

56:32 I'm not talking about care of clients, but I should say love the people that you love. What should they aim for? I'll just pull three things out. Um, income independence, let's say. Optional work. or just control over time of everything. I think all three, they shouldn't be prioritized. think you have to look at life in a balance. It's not a pie that you eat one slice at a time. You eat one bite from each slice all at once, right? So you gotta have the balance in your life, which means you gotta have the sustainable income. If you don't have the sustainable income, you don't have the free time with your family.

57:13 And when I say free time, you're tethered to something that you're worried about. And you need to have a... either a business or some kind of financial security. Let's face it, if you work for somebody, you have no financial security. But if you work for yourself, you still may not have as much of perfect financial security, but you at least control your decisions. But the problem is entrepreneurs get into that thinking they know more than they know. And then they find out they have less financial security than they work for somebody. So the answer is you need a little bit of each. There's not one uh quip or quick answer to say, do this, this and this and you're good. All right guys. two things, two takeaways from today with Ken Hemworth.

57:54 Thank you for spending time with us. Um, number one, if you're wondering how you can create an environment for yourself, that you feel like you have wealth. Cause I think I found that the wealthy mentality was there for me before I became wealthy. Um, it was very important for me. I knew it was possible for me. Like I, I saw what I understood. I looked at the rest of the world. I, I read some books, I followed some of the lessons. And so A know that the vast majority of us have it in us to be able to create wealth, but he mentioned something today and told about, talked about his own story. Go pick up the book, think and grow rich by Napoleon Hill. Go pick up the book. That's the thing. If you haven't built the thing that we've been talking about today about where to make investments, about what strategy looks like.

58:39 If that isn't anywhere in the vocabulary of your life, go pick up the book because you got to start thinking that way first. And then the second part, that's the altruistic stuff that came out of Ken today. The part of making money is if you've got a lot of money to invest, call Ken Hemler. Well, I appreciate that. I'd like to plug one other book before we wrap it up. T. Harv Elker and Money Mind is one of the best books to get your mindset right. So while I think Think and Grow Rich talks about, you know, the different strategies, the 12 different strategies, T. Harv Eker's book is amazing. changed my life 20 years ago. Just how I think on a daily basis about money.

59:22 Awesome. Hey, a lot of times we say, what's the place that people can come and find and connect with you? We'll put it in all the stuff we put out, but what's the one place? LinkedIn, a website. Yeah, I'd say there's YouTube channel, there's Wiser Wealth, then there's also Wiser Wealth is more of an academy for teaching wealth principles. And then One Wealth Map is where we post a lot of content. And you know, the website is One Wealth Map spelled out O-N-E. All right, Kenneth Hemler, for coming on the show and sharing the brilliance. I think talking about this subject where it wasn't so intimidating. Absolutely. Thank you.