FinancialMentor.Com http://financialmentor.com Financial Freedom For Smart People Wed, 23 Jul 2014 14:39:34 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.1 How To Pick Dividend Growth Stocks – A Fully Revealed Model http://financialmentor.com/investment-advice/dividend-growth-stocks-investing/12356 http://financialmentor.com/investment-advice/dividend-growth-stocks-investing/12356#comments Mon, 16 Jun 2014 17:50:51 +0000 http://financialmentor.com/?p=12356 Editor Note: This is a guest post from Mike who manages dividend growth stocks portfolios. (affiliate link) He reveals his entire dividend stock investment model for free in this extremely valuable, educational article. It is a complete system for dividend growth stock selection. Take it away Mike…

Dividend Growth Stocks Image

I started investing back in 2003 when the bull market made everything easy.

Between 2003 and 2006, I made enough money to buy my first house with a 25% down payment. Those were the good years.

While I spent numerous hours in front of my computer analyzing trends and company fundamentals to become a successful investor, many other investors just picked stocks based on the news and made almost the same returns. The economy was booming, and we were able to find stocks doubling within the year.

Then 2008 Happened

I was somewhat lucky when the 2008 bear market occurred because most of my investments were cashed out in 2007 to buy my second house. Even though I was still hit by a -27% drop in my portfolio, the total dollar loss wasn’t too bad because my account was much smaller.

Anyway, I was too busy working my way up the corporate ladder and completing my MBA to worry about it. I didn’t have much time to invest my money.

From 2003 to 2008, I had a very aggressive investing model making a few trades per month on average. I was fast on pulling the buy and sell trigger in order to generate more profit.

But after 2008, the game changed and I didn’t have enough time to continue with my original investing plan. Plus, losing 27% of my portfolio in one quarter had left a sour taste in my mouth. This is what drove me, in 2010, to develop the dividend investing strategy I share with you here.

How I Developed My Own Dividend Growth Model

Over the past 4 years, I’ve continuously tweaked my dividend investing strategy to achieve two goals:

  1. Build a powerful portfolio– able to generate both capital and dividend growth
  2. Keep it simple but efficient– I wanted to build a simple investing system that works consistently

I’ll tell you upfront, I don’t hold the key to becoming a millionaire through dividend investing. I still make mistakes, but they are rarer and smaller than most investors. This is how I was able to beat the market in 2012 & 2013 with my dividend stock picks.

In 2012, I wrote a very popular book about dividend growth investing, Dividend Growth: Freedom Through Passive Income, and received hundreds of emails. People wanted to take charge of their investment portfolio because they were upset about their advisors’ inability to answer their questions and/or the high fees they were paying. And while I received many different questions, two main points kept coming up:

  1. The lack of time to build and manage a solid dividend stocks portfolio
  2. A systematic method for buying and selling dividend stocks.

This is when I realized that I had battled with  the same issues and found a way to solve these two essential investing problems. Over the past four years, I’ve worked on an investing strategy that doesn’t take me forever to apply and tells me when to buy and when to sell stocks.

Below I will share that same dividend growth model with you. It’s the same model I’ve used that has performed so well over the past few years.

A Dividend Growth Model That Works

As I’ve previously mentioned, my investing strategy is built on a simple but efficient model. It is relatively straightforward and easy to implement, but it requires discipline. That is the success of my strategy.

Let me break it down step-by-step for you:

Step 1 – Start with Stock Filter Research

I start the investment selection process with a stock filter. I use a paid subscription to Ycharts (no affiliate link here) as it provides an enormous quantity of information. But you can achieve almost the same results with a free stock filter called FinViz.

FIN VIZ stock filter doesn’t provide the 5 year dividend growth metric. This is one of the reasons I use Ychart (and the fact that I can create multiple charts to compare several metrics at the same time!) But if you prefer the free way, you can still select other metrics to pick stocks that will show great dividend growth. Below are the metrics I use:

Valuation:

  • Dividend yield: over 3%
  • P/E Ratio: under 20
  • Forward P/E Ratio: under 20

Company Fundamentals:

  • EPS Growth next 5 years: positive
  • Return on Equity: over 10%
  • Sales Growth past 5 years: positive
  • EPS Growth past 5 years: positive
  • Payout ratio: under 70%

This is enough to give you a good list to work with. It’s not perfect, but you will discard several bad stocks in a blink of an eye with these filters. (Editor Note: This approach is called stock factor modelling. It will be discussed in greater depth in future posts and podcasts.)

Step 2 – Sort For Sales and Earnings Per Share

Everyone first wants to look at dividend payouts, but I think it’s more important to look at revenues and earnings. If sales are not up, chances are profits won’t keep an uptrend. It’s really common sense: if you can’t generate sufficient cash then how can you pay dividends?

The relationship between sales evolution and earning per shares will tell you 3 things:

  1. How is the companys main market doing (are sales growing?)
  2. How are the companys profits growing (are they making more profit or not?)
  3. How are the companys margins doing (if the sales and EPS graph don’t head in the same direction that can be a red flag)

Below is an example of a combination of EPS and Revenues graph with two different companies in the same industry.

The first is Procter & Gamble (PG)

P & G EPS for dividend stocks investing

P & G Sales Chart For Dividend Stocks Investing

As you can see right away, there is a call to action to dig deeper inside the financial statements; the sales are going up but the EPS is trailing behind. There must be something hurting the margins or special expenses that won’t happen in the future. You need to get these facts straight before you can consider buying this stock.

However, if you look at Colgate-Palmolive (CL) you will find a more consistent trend (but not perfect):

CG Net Sales Bar Chart For Dividend Stock Investing Analysis

CG Dividend Growth Stock Bar Chart Showing Earnings

Step 3 – Analyze Dividend Growth History

Now that you’ve created a list of companies able to pay dividends over the long haul, it’s time to perform some deeper analysis.

The process of choosing final “buy” candidates from your screener list can’t be formulated in a rules-based structure here because it will be different for every investor based on risk preferences, portfolio objectives, and personal preferences. Instead, what I will do is provide several ideas for you to consider in developing a selection process that specifically matches your objectives.

The first thing to do when choosing final “buy” candidates is to download the company’s financial statements. Often, you will find an “Investor Fact Sheet” or “Recap” giving you some key ratios such as Earnings per Share, Sales, Profit, and Dividend Payouts over past years.

If you can’t access this information from investor fact sheets then you’ll have to dig inside the company financial statements. Another alternative is the annual report because it will provide more than one year of information with all the necessary numbers already calculated for you.

I like to use the past 5 years when analyzing dividend growth history. Also, I suggest you make a quick graph of the past 5 years’ dividend payouts instead of simply calculating the dividend annualized growth rate. This will give you a clear idea of which stocks have a strong dividend payout strategy compared to the others. The graph can be as simple as the following:

Dividend Growth Chart

Which looks a lot better than the following:

Unstable Dividend Growth Pattern

The first graph is a good indication of a solid company that is looking to consistently increase its dividend year after year. You want to invest in companies with a favorable dividend policy.

Step 4 – Examine For Sustainability

If this seems like a lot of work, it is important to note that we are only halfway through the process. That is why I offer an affordable alternative that does all of this for you for just $15 per month. (Affiliate link) After all, if picking double digit dividend growth stocks was easy, we would all be rich!

As a quick recap, what we’ve done so far is examined past data with stock screeners and financial statements as an efficient way to clear out the most “unreliable” stocks. Your next step in this process is to examine current information about the company to see if it will be able to increase and sustain its dividend.

  • How is the Management?

Something that is ignored too often is the current management team. Have members been there for a while and are they responsible for the previous performance? If so, are they still on board to continue their good work, or are they just trying to get their golden parachute?

The management compensation system explained in the financial statements along with the longevity of the board will help you make up your mind about their competence. If you are lucky, they might even disclose their dividend payout philosophy for the upcoming years. If they put a lot of emphasis on the dividend in their financial statement then that’s a great sign it is a focus that will continue into the future.

  • How Does the Company’s Recent Quarterly Performance Look?

Besides pure metrics, which we analyzed in Step #2, recent quarterly results will tell you if the company has been beating analysts’ expectations. In addition to analysts’ opinions, you can check to see if the company is confirming their previous sales guidance. A good site to get this information quickly is Reuters because they usually report when companies comment about their outlook for the upcoming year. This is a good way to interpret the current and forward results.

Your objective in this step is to find companies confirming or increasing their earnings and sales guidance for the upcoming quarters.

  • What Projects Are They Currently Pursuing?

While you are looking for financial ratios within the financial statements, also look at their current and future projects as well. A company dominating its sector must always look towards the future. For example, Intel (INTC) has been dominant in the PC world. However, they are experiencing problems entering the tablet and smartphone sectors. Since PC sales are slowing down and INTC is still not able to expand into other markets, future growth will be harder to achieve and margins will likely be reduced.

I personally looked into INTC and saw that they are multiplying their efforts in order to expand their niche into other markets. Following these current projects will tell me if INTC can successfully transition their previous business model (being the leader in processor chips for PCs) to a new business model (which not only includes tablets and smartphones but also servers and hosting services). Again, the goal is sustainability of the dividend and this is yet another quality indicator.

Step 5 – Look To The Future

All of this analysis of past data and company fundamentals serves one purpose – to figure out if the company can continue its dividend payout strategy. It is not a Crystal Ball, but it’s your best indication of future results.

A stable evolution of past sales, earnings and dividend payout ratio are all positive indications for the future dividend. If the company has a proven ability to generate growth and manage earnings then chances are good that their payout ratio will remain stable over time. It’s important to form your own opinion about the company instead of blindly believing what you read.

However, even if everything looks good, it is still important to remember that market and technology innovations can cause bad things to happen to good companies. That’s why you want to determine:

  • If the company is solid enough to weather a recession?
  • What kind of impact would a sales slowdown and pressure on margins have on the dividend payout?
  • Is the company distributing all their profits (i.e. high dividend payout ratio) or is there room for bad luck?

Once you reach this point in the analysis then these questions are easily answered. That’s why it is so important to have your own opinion with the economic facts to back it up.

From Stocks Picks To Dividend Portfolio

Now that you’ve had fun screening stocks and sorting for fundamentals, it’s time to get serious: how do you build your portfolio?

Do you simply invest in a random selection of 20-30 stocks from your list and rake in the dividends? You can certainly do that (I know investors that have a few Dividend Aristocrats and just wait for their quarterly payout), but my experience says you can do a lot better with proper selection.

The purpose of the rest of this article is to provide you with the tools you need to build your portfolio from your final list. These techniques don’t contain the absolute truth, but they will prevent you from mistakenly chasing too much yield or too much growth without properly considering investment fundamentals.

My favorite technique is to build quadrants to compare stocks, use diversification to your advantage – and as a bonus – I’ll also show you how to cheat on your investing strategy.

How To Use The 4 Quadrant Strategy

The first thing you should do when building your portfolio is to test the stocks that passed the screening criteria against 4 different types of quadrant analysis.

Quadrant analysis techniques are used to quickly compare how stocks rank relative to each other. It also reveals specific shortcomings not easily found through other analysis techniques. What is cool about quadrants is that they are easy to use, easy to understand, and don’t require much time.

The idea of building a quadrant system is quite simple: first, you select two characteristics you want to compare (consider dividend yield and dividend payout ratio). Next, you compile the data for both characteristics for all stocks on your shopping list that passed the earlier screens. Once you have all the data, you simply position each stock according to its yield (on the X Axis) and their payout ratio (on the Y Axis). Here’s a quick example:

Dividend Yield vs. Payout Ratio Quadrant Graphic

In this example, it is quite obvious that you would like to see as many of your stock picks in the #4 quadrant (high dividend yield with low payout ratio) as possible. The least attractive quadrant is #1 (low dividend yield with high dividend payout ratio). Within minutes, you can determine which stocks are a good addition to your portfolio and which are not.

Different quadrants can be used to cross-compare related data to see contradictions and inconsistencies thus allowing you to further narrow your shopping list. Companies use quadrants to position their products (high-end vs low-end, mass consumer vs. niche, etc.) We will use them to position your stock.

For example, if you hope to live off dividends one day, you need stocks that:

  • Provide a healthy dividend from day one.
  • Grow their dividend over time.
  • Grow their income over time (so they can keep up with their dividend and provide you with capital growth at the same time).

In order to find those stocks, you would want to use the following four quadrant models…

Dividend Yield Vs. Dividend Payout Ratio

The next quadrant we will look at compares the stock’s dividend yield to its ability to continue paying the dividend (the dividend payout ratio). In other words, most dividend investors first look at dividend yield. But instead of chasing yield blindly, like a dog running after a cat that just crossed a boulevard, you should check the dividend payout ratio to make sure your dividend (or your dog) doesn’t get squished!

Using an actual example, I’ve pulled 10 stocks from the S&P 500 and the NASDAQ to show you how they compare using this first quadrant analysis. Here’s my data compilation:

Ticker Dividend Yield Dividend Payout Ratio
T 5.63% 259.00%
CPB 3.67% 47.20%
HRS 2.93% 21.60%
AFL 2.87% 28.11%
MSFT 2.48% 23.33%
BMY 4.03% 60.96%
GIS 3.09% 40.56%
CVX 3.02% 22.83%
BLK 2.93% 43.39%
GRMN 3.83% 59.62%

 

As you can see, you have both high and low dividend yields and payout ratios. That doesn’t mean, however, that all of the low yields have a low payout ratio and vice-versa. This is what the quadrant will show you at a glance:

Dividend Yield vs. Dividend Payout Ratio Quadrant

The less attractive quadrants, in my opinion, are above the 100% line. It really doesn’t matter how high the dividend yield is because they’ll eventually have to cut the dividend or sell assets to balance the books when paying out more than 100%.

Since we only have one stock in that category (AT&T), I would go back into their financial statements and calculate their payout ratio myself. Unfortunately, data on payout ratios can be less than accurate when you use free sources (the 259% payout ratio was taken from Yahoo Finance back in April 2012). But T is showing such an attractive yield for a large utility that I think it’s worth a little bit more investigation to understand why the payout ratio is so unsustainably high.

In an ideal world, we would only pick stocks in the #4 quadrant because those stocks should provide high & sustainable dividend yield. Fortunately, many of the stocks on our list are part of this quadrant (GRMN, BMY, CPB, GIS & CVX) and we have three stocks very close (BLK, HRS & AFL). Those stocks show a great combination of good dividend yield with a sustainable payout ratio.

Dividend Yield Vs Dividend Growth

Once you’ve narrowed your shopping list to companies showing sustainable dividend levels, the next step is to sort these same companies for dividend yield compared to dividend growth.

The goal is to find high dividend yield-payers with low payout ratios that also show 5 year dividend growth. Conversely, you want to avoid companies with a temporarily high dividend because its price has been devalued due to recent news or a market downtrend.

When comparing dividend yield and dividend growth over 5 years, you want to pick the highest yield with the highest dividend growth. Continuing the same example, here is my data for the following quadrant:

Ticker Dividend Yield 5 Yr Dividend Growth
T 5.63% 5.05%
CPB 3.67% 8.83%
HRS 2.93% 22.69%
AFL 2.87% 15.80%
MSFT 2.48% 13.63%
BMY 4.03% -2.24%
GIS 3.09% 11.13%
CVX 3.02% 8.86%
BLK 2.93% 23.85%
GRMN 3.83% 31.95%

You can already guess that BMY will get eliminated in this analysis. Here’s the quadrant:

Dividend Yield vs. 5 Year Dividend Growth Quadrant Image

This time, the most interesting quadrant is #2 because it provides stocks with high dividend yield and high dividend growth. GRMN is a great example. However, we also have BLK, HRS & AFL showing a strong dividend growth (over 10%) with a divided yield closer to 3%. CVX and CPB are close runner-ups because of decent dividend growth too (8.86% and 8.83%). You can see that, for a second time, MSFT is being penalized in this analysis due to a low dividend yield compare to other stocks.

Use this quadrant analysis to build your portfolio. More aggressive investors might ignore MSFT, while retirees might consider it a reasonable choice because of its leadership position within its industry accompanied by strong dividend stats.

5 Years Dividend Growth Vs. 5 Years Revenue Growth

The first two quadrants showed you stocks offering a combination of attractive dividend yield and dividend growth. The next two quadrants will take a different look at the same stocks to determine if they can sustain their dividend level over time.

Why compare the five years dividend growth with the five years revenue growth? Because the first depends on the latter. Since dividends are paid with after tax income, you want to make sure the company has enough funds to maintain its dividend payouts. More importantly, it will tell you more about the dividend distribution strategy of the company.

Low dividend growth combined with high revenue growth (quadrant #1) demonstrates that the company is in a growth stage. The company believes it’s best to use cash flow to push the company to another level instead of giving back to the shareholders. This might be good if capital gains are your goal, but it’s not desirable when seeking dividend growth.

Alternatively, high dividend growth with negative revenue growth (quadrant #4) demonstrates that something is wrong and requires further investigation. In these situations the company dividend payout ratio will increase over time, which is not a good sign for an investor.

The perfect scenario would be to find a company with a steady dividend growth and revenue growth at a similar level. This tells you that the company is growing and has the intention of giving money back to its shareholders at the same time. Staying with the same sample stock list, below is the data:

Ticker 5 Yr Dividend Growth 5 Yr Revenue Growth
T 5.05% -18.83%
CPB 8.83% 6.83%
HRS 22.69% 21.91%
AFL 15.80% 7.20%
MSFT 13.63% 17.63%
BMY -2.24% 28.37%
GIS 11.13% 13.27%
CVX 8.86% 11.50%
BLK 23.85% 26.17%
GRMN 31.95% 2.61%

 

Before looking at the quadrant, you can already see that BLK and HRS are following an interesting trend on both revenue and dividend growth. Now let’s take a look at the big picture:

5 Year Dividend Growth vs. 5 Year Revenue Growth Quadrant Image

Notice how things get clear on a great graph?

We have only 2 stocks in quadrant #2 showing both strong dividend and revenue growth; however, we also have 3 interesting stocks (MSFT, GIS & CVX) in quadrant #1 showing a great combination. We can also see that BMY & T are far from being in a strong position in this quadrant. GRMN obviously shows a shift in direction while they have decided to become a “strong dividend-payer” over the past several years. This is quite logical for an established company with a lot of cash flow (after powerful dividend growth over 5 years, their payout ratio is now at 59%).

P/E Ratio Vs. 5 Year Income Growth

The last quadrant (but not the least) compares the P/E ratio with 5 year income growth. It’s like comparing future assumptions with past results.

The P/E ratio is the current evaluation of a stock by the market – the future assumptions. A high P/E ratio means that the market is anticipating strong growth. You will more likely find overvalued stocks in this category (just think of RIM a few years ago). The historical P/E ratio of the S&P 500 is 16. Anything over 20 means the market is pricing in a great deal of growth making the stock much riskier for decline in the event of a disappointment.

On the other side, a low P/E ratio is consistent with a stock evolving in a mature industry, or occurs when a stock is undervalued. It is obviously tricky to determine which stocks are priced correctly or not. Also, please keep in mind that the P/E ratio will be greatly affected by the stock market’s assumptions.

For example, after two years of deceiving financial results, RIM has traded at a P/E ratio as low as 3.81! This doesn’t mean that the company is undervalued; it means that the market doesn’t believe the company can keep up with its previous results!

This quadrant will help you find stocks with the lowest P/E ratio relative to the highest income growth. In other words, it helps you find growth without paying a premium.

 

Ticker P/E Ratio 5 Yr Income Growth
T 14.33 19.59%
CPB 12.44 0.09%
HRS 9.61 8.17%
AFL 7.28 20.20%
MSFT 11.9 11.21%
BMY 15.07 6.41%
GIS 16.04 6.29%
CVX 8.13 7.21%
BLK 17.29 23.02%
GRMN 17.4 14.79%

 

With this quadrant, look for stocks in quadrant #1 (low P/E ratio with positive income growth). Those stocks are more likely evolving in a stable environment (this is why their P/E ratio is lower) making them lower risk, but with income growth (so they are able to increase their dividends). Those types of companies will likely only become stronger over time:

P/E Ration vs. 5 Year Income Growth Quadrant Image

This quadrant highlights AFL as being the only stock with a high income growth and low P/E ratio. This is also related to the fact that AFL is evolving in the financial industry. Stocks like BMY and GIS are quite deceiving because they are trading at higher P/E ratios without showing strong income growth.

This quadrant will help you choose stocks in terms of their past growth showing how much you are paying for expected future growth. For example, GRMN had an interesting 5 year growth and is expected to grow in the future… unless the stock is overvalued. As long as you stay under a P/E of 20, you should be playing in a relatively safe playground.

Cross Referencing the Quadrants

Now that you know how to use the four quadrants, the most important thing is to use all four of them!

Don’t get complacent and use one or two comparative measures. Use all four of them to paint a complete picture. Don’t jump to a conclusion and don’t be afraid to look into financial statements once in a while to understand how a stock might be less attractive in one quadrant compared to the others.

By cross referencing the 4 quadrants, you will find certain stocks that keep showing up with desirable combinations of characteristics such as GRMN, BLK and AFL. While none of the 10 stocks are strong in all aspects, those 3 stocks have a better “batting average” than the others.

Other stocks might look promising based on the fact that they passed the screener and measured well on a couple different quadrants thus requiring deeper research to understand the inconsistencies. Stocks on the “to be researched further” list include CVX, MSFT and HRS. These are three mature companies leading their respective markets. They should be on your “stocks on the radar list” according to the screener and quadrant analysis.

Finally, you have other stocks that didn’t quality half of the time or more (T, BMY, GIS and CPB). I would just eliminate these because they miss the target on important metrics. It doesn’t mean that they are not interesting stocks, but when your goal is reliable dividend growth there are better purchases.

So out of 10 stocks and 4 quadrants, you have:

  • 3 very interesting picks (GRMN, BLK & AFL)
  • 3 “further research” picks (CVX, MSFT & HRS)
  • 4 “not very interesting” picks (T, BMY, GIS, CPB)

Doing this exercise can require some time as you first need to put all of your stocks in an excel spread sheet, then find all the metrics and create your quadrants. In order to do it, here’s a very easy tutorial for excel users:

  • Create a table as shown in this book (ticker, metric #1, metric #2)
  • Select data only in metric #1 and metric #2 (the 2 columns)
  • Click on “insert”, then “other charts” and select “X Y (Scatter)”

Analyzing Divdend Stocks In Excel

  • You’ll get your points in a graph. You select Chart Layouts and take the circled one in the second line of options.

Dividend Stocks Investing Using Excel

  • Then, you simply have to print it and add the stock name besides each dot and you have your quadrant!

Using Dividend Stocks Rock to Facilitate Your Investing Process

If you are thinking, “Wow, that looks like a lot of work”, then you would be right.

Yes, it takes time and effort to first complete all the factor screening to create a dividend stock shopping list and then further sort for quality and consistency using company fundamentals and then quadrant analysis.

After teaching this method to many people the one consistent response was, “Interesting. I like it, but is there a way for me to just pay you to do it for me?”

And so that is why I’ve developed a membership web site that does exactly that. (Affiliate link) If you want to do it yourself, you have all the knowledge you need in this article. I gave it to your freely. You don’t need me because this is the complete recipe. Nothing held back.

However, if you want someone to do all the screening and quadrant analysis for you then I’ve built a website that does exactly that by allowing you to:

  • Search through my pre-screened stock lists,
  • Monitor my model portfolio performance,
  • Read my stock commentary every two weeks,
  • Know exactly when any company in my model portfolio provides quarterly reports,
  • Benefit from my unique stock ranking system.

You can get to this website here and it simply does what I taught you here at such a low price that it really doesn’t make sense for you to do it yourself. (Affiliate link)

I hope you found the ideas in this article helpful for your dividend growth stocks investing strategy.

Please let me know your thoughts in the comments.

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FM 019: Expected Value Formula – The Missing Key To Building Wealth with Billy Murphy http://financialmentor.com/podcast/expected-value-formula/11977 http://financialmentor.com/podcast/expected-value-formula/11977#comments Sun, 11 May 2014 18:16:48 +0000 http://financialmentor.com/?p=11977 Financial Freedom For Smart People


Wealth is math.

That’s bad news for math phobics, but it’s great news for the rest of us because it means there are rules and science behind how wealth building works. It isn’t random luck.

In Episode 19 of the Financial Mentor podcast we’ll explore the most essential math principle to wealth building – the expected value formula.

This essential principle eludes most people because we inherently think in terms of probabilities – the likelihood of something occurring. It could be an investment going up or a business going bust. Either way, you most likely think in terms of the probability of the event occurring, and that is unfortunate.

Why? Because wealth is built according to expectancy – which is probability times payoff.

It’s an entirely different way of thinking that produces surprising results. Discover how expectancy will literally determine the financial outcome of your life, and how you can use this uncommon knowledge to make smarter, more profitable investment decisions.

In this episode you will discover:

  • How a career as a professional poker player shaped Billy’s view on traditional investing.
  • The difference between gambling and investing.
  • Why variance is a dangerously misleading measure of risk that can cost you a fortune.
  • The concept of “edge” in investing or “competitive advantage” in business.
  • How increasing sample size can lower risk, but only if you have positive expectancy.
  • The essential difference between asset wealth and cash flow wealth.
  • Why EV, or the expected value formula, permeates all forms of wealth building – paper assets, business, and real estate.
  • How to use the expected value formula for every business and financial decision you’ll make.
  • The many dimensions to risk management revealed by a deep understanding of expectancy.
  • How to make more by risking less.
  • How diversification, when done incorrectly, can become di-worse-ification.
  • How the pursuit of safety can put you at even greater risk.
  • Why all expectancies are not created equal, and how that spells opportunity for you.
  • The dangerous illusion of results, and why expectancy is actually more important.
  • How recency bias causes you to make losing investments.
  • The two essential skills you must develop to invest with greater profit and reliability.
  • How to use risk management skills to raise your expectancy.
  • The right (and wrong) time to avoid analysis-paralysis in the due diligence process and just pull the trigger.
  • How to test any investment using the “cocktail napkin test”.
  • How missing a positive EV investment is mathematically equivalent to negative EV, and avoiding negative EV is mathematically equivalent to positive EV.
  • Why insurance makes good business sense, even when it has a negative expected value.
  • The right and wrong way to use insurance to manage negative expectancy risk.
  • and much more….

Resources and Links Mentioned in this Session Include:

Expected Value Formula with Billy Murphy Image

Help Out The Show:

The feedback on these podcasts has been great! Your enthusiastic response is what drives me to continue producing them.

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If you could spare a minute to leave a review on Itunes it would mean a lot to me. Thank you so much!

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Get Episode #19 PDF Transcript – Expected Value Formula: The Missing Key To Building Wealth:

Click here to grab the PDF transcript of Episode 19 where Billy Murphy explains how the expected value formula works to help you build wealth.

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FM 018: How To Break Through Your Most Stubborn Limiting Beliefs With Dane Maxwell http://financialmentor.com/podcast/limiting-beliefs/11732 http://financialmentor.com/podcast/limiting-beliefs/11732#comments Mon, 14 Apr 2014 22:04:34 +0000 http://financialmentor.com/?p=11732 Financial Freedom For Smart People


Success is about people first.

If it was just about how-to’s then we would all be thin, rich, and happy because all the knowledge you need to attain anything you want in life already exists. You just have to learn it and implement it.

But it doesn’t work that way. You aren’t a perfect, rational computer.

You don’t just process information, make plans, and produce results in a logical, perfect way because you are an emotional human being. Your emotions and beliefs are a filter that either serves you in achieving your goals, or they hurt you.

I overlooked this essential reality in my early years of coaching and made the same mistake nearly all experts make. I believed that if I just showed people how to do something that they would go out and implement it to produce the same results I did.

BOY, WAS I WRONG!!!

There is much more to achieving success than just how-to’s. And there is a lot more to teaching success than just dispensing how-to information.

There’s a second layer of knowledge explaining how humans work that you must understand if you want to  break through your limiting beliefs and rise to new levels of achievement with the least friction and effort possible.

This knowledge is critical to your success…

In this episode you will discover:

  • Why how-to’s are not enough to succeed.
  • The common, yet critical, mistake nearly all self-help gurus make.
  • How results take care of themselves once your limiting beliefs are removed.
  • The surprising role your community plays in achieving success.
  • Why financial freedom is ultimately about giving – not getting.
  • How any lack of abundance in any area of your life can be traced back to a limiting belief. Amazing!
  • An exact step-by-step formula for building your own business today even if you have no experience, no idea, and no money. It really works!
  • How to travel for 90 days, do only 4 hours of work, and come home with $100,000 more in the bank than when you left.
  • The 3 key words you must know to build an abundant life.
  • The 4 essential principles of a lifestyle business so that greater success results in freedom instead of just more work.
  • How “The Work” effortlessly removes limiting beliefs without any psychological mumbo-jumbo or needless drama – and, it only takes a few minutes.
  • Why limiting beliefs are the cause behind lack of success and how that is actually an empowering reality.
  • How to know the exact time when limiting beliefs are THE next required obstacle you must clear to achieve the next level of success.
  • and much more….

Resources and Links Mentioned in this Session Include:

Overcome Limiting Beliefs With Dane Maxwell

Help Out The Show:

The feedback on these podcasts has been great! Your enthusiastic response is what drives me to continue producing them.

5 star reviews and new subscribers over at Itunes increase the show’s rank and help more people benefit from the message.

If you could spare a minute to leave a review on Itunes it would mean a lot to me. Thank you so much!

Click here to subscribe to the show on ITunes and leave a review…

Alternatively, this link below will help you subscribe and leave a review on your device…

Click here to subscribe and leave a review from inside your ITunes account…

Get Episode #18 PDF Transcript – How To Break-Through Your Most Stubborn Limiting Beliefs:

Click here to grab the PDF transcript of Episode 18 where Dane Maxwell explains how to overcome the limiting beliefs holding you back from greater success in just 20 minutes or less.

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FM 017: Why “Follow Your Passion” Is Bad Advice with Cal Newport http://financialmentor.com/podcast/follow-your-passion/11640 http://financialmentor.com/podcast/follow-your-passion/11640#comments Mon, 24 Mar 2014 20:20:07 +0000 http://financialmentor.com/?p=11640 Financial Freedom For Smart People


You’ve heard it repeated so many times that you no longer question if it is true.

In fact, the career success literature is so overwhelmingly dominated with this dangerous myth that almost nobody disagrees with it.

The only problem is, it’s not true!

What is it, you ask?

It’s called “the passion hypothesis”. The premise is you should do what you love and the money will follow. If you want to succeed then you should follow your passion.

It’s one of those artifacts of conventional wisdom that seems to be right and passes the smell test so it slips under our radar. It is an example of superficial knowledge that appears true but is actually false.

This is not just an idle concept. It is a major source of disillusionment and career dissatisfaction. It also illustrates many concepts taught in Step 3 of my 7 Steps to 7 Figures wealth building curriculum.

In today’s podcast were going to unmask this dangerous illusion. We’re going to set the record straight by digging deep behind the facade of the passion hypothesis and revealing how a remarkable career and an enviable life of freedom and autonomy are truly built. Surprisingly, it’s not what most people believe.

This interview will also introduce a guiding principle behind all teachings on this site – the idea that there is a second layer of knowledge just beyond the superficially obvious first layer that gives you a competitive advantage and helps you build wealth. This second layer of knowledge is based on research and reality – not meaningless platitudes.

Make sure to listen carefully because the truths revealed in this episode will turn conventional wisdom on its head.

In this episode you will discover:

  • The important difference between first layer knowledge and second layer knowledge so that you can develop a competitive advantage.
  • What the passion hypothesis is and how it works.
  • The dangerous premise behind the passion hypothesis that is causing job satisfaction ratings to decline.
  • Why career passions are rare, but that doesn’t mean you’re stuck. There’s a smarter way to find passion and fulfillment through work if you just know the proper steps.
  • The unexpected connection between career passion, skill mastery, and self-determination theory.
  • The 7 traits proven by research to create career satisfaction.
  • The surprising reality reversal – It’s more important what you can offer your job than what it is offering you.
  • Why it’s not about finding the right work: It’s about working right.
  • The important parallel between investing your financial capital into crafting a life you love and investing career capital into work you love.
  • Why you should stop focusing on self-promotion in social media and instead focus on producing something worth talking about.
  • How skill leads to passion instead of passion being a precursor to skill.
  • Why success is hard… by definition. There is always a hard phase so get over it.
  • What the “courage culture” is and why you should avoid it.
  • The two dimension of commitment  that lead to success – what you do before you commit and what you do after. (Hint! They are as different as night and day.)
  • The two different types of goals and the diametrically opposite ways you should achieve them.
  • Why your most important career strategy is to compound career capital. (Notice the parallel to wealth building and the importance of compounding equity. This is not a coincidence.)
  • Discover how the deliberate practice technique is the most efficient and certain path to compounding career capital.
  • How to learn to love strain and discomfort as a good thing (seriously!).
  • How to use career capital to buy the freedom you want now long before you’re financially independent.
  • How to use the law of financial viability to make money and make a positive impact in the world at the same time. (Surprise! The two goals are not mutually exclusive.)
  • How to use the principle of little bets to build a huge success with almost no risk.
  • The 3 step process to create a life you love.
  • and much more….

Resources and Links Mentioned in this Session Include:

Follow Your Passion is Bad Advice with Cal Newport

Help Out The Show:

The feedback on these podcasts has been great so thank you. I read every single comment. It matters.

5 star reviews increase the show’s rank and help more people benefit from the message.

If you could spare a minute to leave a review on Itunes it would mean a lot to me. Thanks!

Click here to subscribe to the show on ITunes and leave a review…

Alternatively, this link below will help you subscribe and leave a review on your device…

Click here to subscribe and leave a review from inside your ITunes account…

Get Episode #17 PDF Transcript – Why Follow Your Passion is Bad Advice:

Click here to grab your PDF transcript of Episode 17 with Cal Newport explaining why follow your passion is bad advice.

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FM 016: How To Choose A Financial Advisor with Michael Kitces http://financialmentor.com/podcast/how-to-choose-a-financial-advisor/11434 http://financialmentor.com/podcast/how-to-choose-a-financial-advisor/11434#comments Mon, 03 Mar 2014 19:58:33 +0000 http://financialmentor.com/?p=11434 Financial Freedom For Smart People


It’s hard to know how to choose a financial advisor.

There is so much value at stake; yet, how can you tell the experts from the charlatans?

Who can you trust? How do you really know?

After all, you are busy with kids, a career, and life. You want to be able to trust someone to make sure your financial planning is on track, but it’s a den of thieves out there.

Adding confusion to concern are all the sound-alike titles such as brokers, registered investment advisors, certified financial planners, financial coaches, and financial consultants to describe similar services. Who can tell the difference?

It’s time to pull back the curtain on all the techno-babble so that you can find the best financial advisors and eliminate the posers.

In this episode I’ll give you a step-by-step due diligence process for how to choose a financial advisor that fits your needs.

You will learn how to sort your way through the maze of confusion so that you can get the expert help you need to reach your financial goals… without getting ripped off.

In this episode you will discover:

  • Why the starting point to choosing a financial advisor is looking inward.
  • How to match your specific needs to the right specialist (not all advisors are created equal).
  • Why the common practice of using referrals is dangerously flawed.
  • The 4 advisor compensation models and how each impacts the advice you receive.
  • Form ADV disclosure, what it says, and how to get one from your advisor.
  • 6 different financial planner search sites so you can pick the right professional for your needs.
  • Why the “fee only” compensation model means different things in different situations (this is important!).
  • How to analyze a financial advisor web site.
  • Whether or not it is even relevant to meet your advisor face-to-face any more.
  • Where the future of financial advice is heading (this may surprise you!)
  • How to understand the hidden financial incentives hiding behind the advice your receive.
  • A checklist of quality factors to use when judging your financial advisor.
  • What “assets under management” really says about your advisor, and why it’s not an important quality indicator.
  • How to know the difference between CFP, CPA, PFS, RIA, CFA, and CHFC. (Yikes!!)
  • Why all these professional designations imply little about investment skill.
  • The surprising reason financial advisors don’t provide investment track records.
  • Why GIPS audited track records are rare (guess what? It’s the same reason they are the gold standard in performance disclosure).
  • Why there is no perfect advisor compensation model (each has an Achilles Heal that you must watch out for).
  • The key difference between the suitability standard and fiduciary responsibility (well worth knowing).
  • and much more….

Resources and Links Mentioned in this Session Include:

How to Choose A Financial Advisor with Michael Kitces

Help Out The Show:

The feedback on these podcasts has been great so thank you.

5 star reviews increase the show’s rank and help more people benefit from the message.

Please take the time to leave a review. It really helps a lot and I read every review. Thanks!

Click here to subscribe to the show on ITunes and leave a review…

Alternatively, this link below will help you subscribe and leave a review on your device…

Click here to subscribe and leave a review from inside your ITunes account…

Thanks for your support and I hope you enjoyed this episode. Please let me know what you think in the comments below…

How To Choose A Financial Advisor PDF Transcript:

Click here to grab your PDF transcript of Episode #16 with Michael Kitces showing you how to choose a financial advisor.

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How To Become A Millionaire – 5 Secrets Revealed http://financialmentor.com/wealth-building/how-to-become-a-millionaire/11360 http://financialmentor.com/wealth-building/how-to-become-a-millionaire/11360#comments Mon, 17 Feb 2014 17:29:15 +0000 http://financialmentor.com/?p=11360 Editor’s Note: Jaime Tardy has interviewed more than 120 millionaires to learn the “secrets” for how to become a millionaire. She just published her new book The Eventual Millionaire explaining the most important insights from those interviews. In today’s article she reveals her 5 favorite tips to help you become a millionaire. Take it away Jaime…

It’s amazing!

After interviewing more than 120 millionaires I’ve found more similarities than differences in their stories.

The basic building blocks to wealth are always the same. All of these millionaires seem privy to the same wealth building “secrets”.

Below I share 5 of my favorites tips so you can become a millionaire too…

Make Your Life Happy Before Making a Million

One of the key things I learned during these many interviews is that you need to make your life happy FIRST. That doesn’t mean being rich or working towards a million. That means working on the other aspects of your life.

Everyone thinks that the million will give us the lives we want. I can tell you after interviewing 120 millionaires, it doesn’t. If you want an enjoyable life, it’s easier to obtain that enjoyable life first – before making your first million. It can still be about the money, but only after you choose your life.

Like Jim Rohn said, “After you become a millionaire, you can give all of your money away because what’s important is not the million dollars; what’s important is the person you have become in the process of becoming a millionaire.”

Action Item: Evaluate your life and change 1 thing that you are not happy with.

Take a good, hard look at your life. Certainly there are things you would want to change. Choose 1 thing you’re not happy with – maybe it’s the amount of time you spend with friends and family, maybe it’s a lack of self-care. Whatever it is, name it and find a way to change it so that you can be happy with that aspect. Changing just 1 thing will have a profound effect on your life as a whole.

Control Your Money (Don’t Let It Control You)

Millionaires set a goal and then work toward it. There is never a nebulous plan for a million. One of the first steps in that plan is often to get rid of your debts and take control. Debts have a nasty habit of controlling you and you have to take control of them before you can ever achieve bigger financial goals!

Next, work on your lifestyle. Figure out what work makes you happy by trying different things. A helpful homework assignment is to write down what your perfect day would be like. This will give you an idea of what will truly make you happy.

As Harvard’s resident happiness professor, Tal Ben-Shahar told Yes Magazine.org, “Happiness lies at the intersection between pleasure and meaning. Whether at work or at home, the goal is to engage in activities that are both personally significant and enjoyable.”

Once you’ve made your work and life happy, NOW you can work on the big money. Figure out what your real goal is, whether it’s to create a million dollar business or just have enough money to retire comfortably. Then start to work toward that goal.

Just remember that your goal should be your own and not just a vague goal of having a certain amount of money. Remember, it’s not all about the money and your goal should reflect that. While your final goal will definitely include money, it should also include other things important to YOU – to be the goal to achieve.

Action Item: Create a debt payment plan and follow through with it.

List all of your debts and their minimum monthly payments. Figure out how much extra you can pay on the debt. Put that extra amount toward the smallest debt or the debt with the highest interest rate and set them all on automatic monthly payments. Once that first debt is repaid, take the entire amount you were paying on that first debt and add it to the minimum payment of the next debt to accelerate that payoff. This is known as the debt snowball method and here is a free calculator to make the math easy. Follow this plan until the debt is gone.

Take Opportunities

Millionaires constantly rise to meet any challenge that is presented to them. When an opportunity falls into their lap, they take it, barreling through any obstacles that might be in the way.

Millionaires don’t sit around for weeks analyzing an opportunity or making excuses for why they can’t follow through with it. They do whatever it takes to meet the challenge and to do it well. This is an important trait of all millionaires and a mindset that you should adopt if you want to become one.

The point is that opportunities, especially the great ones, do not come very often. Therefore, when an opportunity arises you have to take it no matter what, providing that you have the confidence to turn this opportunity into a win for yourself.

Action Item: Say yes to at least 1 new opportunity.

When a new opportunity arises, say yes, even if it’s scary or something you’ve never done. This might be an invitation to speak at a conference, a guest blogging opportunity, or something else. No matter what it is, make it a point to say yes.

Overcome Your Excuses

Speaking of excuses, millionaires don’t let excuses hold them back from anything. They realize that every excuse has a solution and they work hard to find the solution to every excuse that may arise. They take action, any action – no matter how small.

If you want something bad enough then you’ll undoubtedly find a way around any excuse you could come up with. As they say, where there’s a will, there’s a way. Millionaires live by this code.

If you are someone who wishes to become a millionaire, then you have to live by this code too. You can start with small things and see whether you can in fact get around excuses. The more you do it, the easier it will become. This is a very important step because getting past excuses results in you becoming less and less indolent with time which, in turn, creates a strong work ethic and greater results.

Action Item: Identify 1 excuse you’ve been using as a crutch and take action to squash it.

Think about all the excuses you make in a day. Do you ever say, “I don’t have time for…” or “I would do that, but…” These are excuses that don’t help you move forward. Identify one of your more frequent excuses and find a way to overcome it and make that thing happen. If you feel you don’t have time for something, take action by prioritizing your time and making room for that one thing.

Millionaires Play a Bigger Game

Finally, I’ve noticed how things that seem huge or scary to me are old hat to millionaires. This is because they take those scary steps in order to keep moving forward. The more we do things, the more normal they get.

For example, when I first started my site, I was a nervous wreck about interviewing millionaires. But now that I’ve been doing it for so long, I’m totally used to it. It’s old hat for me. The same can be true for you with that thing you’re scared of doing.

When you think about the most famous millionaires, there are a few words that probably come to mind, and one of these words is usually fearless. That’s because when they have a fear of doing something they are brave enough to overcome it, plow through it, and see their plan come to fruition.

Action Item: Do 1 thing you’ve been too scared to try and just do it.

What have you been putting off because you’re afraid of failing (or maybe afraid of succeeding)? Name it and put it on the calendar. This gives you a goal and a deadline. Once you do it, you’ll wonder why you were ever afraid to do it in the first place.

How To Become A Millionaire – Summary

These are just 5 of the many ‘secrets’  revealed from more than 120 millionaires interviews that I’ve conducted.

Sure, each millionaire story had its own unique twists and turns, but it was striking how the core of each story was more similar than different. They shared characteristics and habits, and it’s these commonalities that I’ve distilled into my new book The Eventual Millionaire on Amazon.

The key is to implement these lessons into your life and see the positive changes they’ll make. That is why I provided you with specific action steps. My goal is for you to learn how to become a millionaire too.

Just take the first step, even if it’s scary. It’s totally worth it! Never lose sight of what’s important to you and don’t forget that it’s not all about the million bucks!

If you don’t believe me then here is a quote from my interview with Todd Tresidder:(you might be familiar with him) “Once I became a millionaire it was this big ‘so what’. I mean it led to one of the most unhappy periods in my life and I couldn’t really understand why. I just had so many false assumptions in my brain about what it was to be financially independent and what was the basis of happiness and what really leads to happiness and so it really sent me back kind of to ground zero and I started reworking this stuff.”

The goal is your happiness and life fulfillment. Learning how to become a millionaire is an excellent next step in that journey.

You Might Also Like…

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What Frustrates You About Investing? Please Help… http://financialmentor.com/investment-advice/investing/11370 http://financialmentor.com/investment-advice/investing/11370#comments Mon, 10 Feb 2014 17:54:45 +0000 http://financialmentor.com/?p=11370 I need your help please…

I’m trying to understand what bugs you about investing. I want you to rant and share your frustrations.

The reality is I live in a very different investment world than most people. I want to help you, but the only way I can do it is if I know the problems you face. I need to know your reality so please take a minute and vent about your investing pains and frustrations.

Here’s how you can help. Please leave a quick comment below that answers any one (or more) of the following questions:

  • What is your biggest frustration with investing?
  • What investment solution do you wish was available but can’t find anywhere?
  • If the “investment fairy” could wave here magic wand and solve any investment problem for you then what would it be?
  • What bugs you most about the financial advice business? About financial advisors?
  • Anything else relevant??

I really want to know your thoughts to any (or all) of the questions above. Whatever comes to mind is perfect.

I don’t care if somebody else (or 50 other people) said the same thing already. I still want to hear it from you. I want to know your truth.

Seriously, I don’t ask for favors often so please take a minute to share your thoughts. It doesn’t have to be anything big. Whatever comes to mind.

Have fun with it. Let ‘er rip!!

Let’s create a rant session together about everything that bugs you with how to invest money. My goal is to help you solve it (I’m designing a course this Spring), but I can only do that when you tell me what it is.

I really appreciate your help!!

Thank you.

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FM 015: Early Financial Independence With Luke Landes http://financialmentor.com/podcast/early-financial-independence/11269 http://financialmentor.com/podcast/early-financial-independence/11269#respond Mon, 03 Feb 2014 17:37:46 +0000 http://financialmentor.com/?p=11269 Financial Freedom For Smart People


Sure, you want early financial independence.

But how do you achieve it?

What are the necessary action steps to reach the goal, and how can you expect your life to change afterward? Surprisingly, it doesn’t work like most people think.

In this latest addition to our podcast series featuring early financial independence success stories (see previous episodes with Darrow Kirkpatrick and/or Doug Nordman), Luke Landes shares how he achieved freedom from day-to-day financial worries at such an early age, and what his life experience has been like since reaching the goal.

Surprisingly, it’s not like most people would expect.

Luke’s story differs remarkably from previous success stories because he never really set out to achieve financial independence. In fact, he sort of fell into it by accident (even though he still worked hard and planned strategically) by being the right guy in the right place at the right time.

Luke’s story is also different from previous stories because he didn’t save his way to methodically reach the goal with discipline. Instead, he attained it through the business path to wealth with a single buyout of a single business.

I really appreciate how generous and candid Luke was in this interview sharing his experience of life and the pursuit of happiness following financial independence. He tells you the straight truth about struggles with motivation when money is no longer a concern. He explains the challenges of leading your own life when normal career constraints and the need to make money are removed.

So get motivated to move to the next stage of your life where the focus is on fulfillment instead of money with tips to help get you there faster and with fewer mistakes.

In this episode you will discover:

  • The many definitions of financial independence… and which one Luke has chosen.
  • Exactly how Luke achieved financial freedom – almost by accident.
  • The role of luck and being in the right place at the right time for some types of financial success. (Hint – you still have to work hard and be strategic even when you’re lucky.)
  • How single point failure risk can destroy a fortune quickly, and what you must do to manage it.
  • The value of diversifying revenue sources within your business model to control risk.
  • How to prepare a business for sale so that you maximize the value.
  • What you must do to find a buyer who will pay more for the business than it is worth to you.
  • The unexpected difficulty with motivation that everyone who achieves early financial independence must overcome.
  • Why you may already be financially independent and not even know it. Seriously!
  • How the human need to serve somebody – whether financially independent or not – turns the whole idea of “freedom” on it’s head.
  • How autonomy affects your motivation and sense of personal freedom – whether employed or not.
  • The million dollar myth – Revealed!
  • Why it’s all about cash flow… not assets.
  • Exactly how your motivation for work and new projects will change after financial freedom.
  • What to do when your passion in life requires hard work, but you no longer have to work at all.
  • How early financial independence is just like 2nd generation wealth… but without the second generation.
  • The absolute, foolproof way to know exactly what you are truly committed to. It never fails.
  • How to master the essential success characteristic – focus.
  • Why building wealth is one of your greatest paths to personal growth.
  • and much more….

Resources and Links Mentioned in this Session Include:

Early Financial Independence with Luke Landes

Help Out The Show:

Giving an honest review on Itunes is one of the best ways to support this show.

5 star reviews increase the show’s rank and help more people benefit from the message. Please take the time to leave a review. Thanks!

Click here to subscribe to the show on ITunes and leave a review…

Alternatively, this link below will help you subscribe and leave a review on your device…

Click here to subscribe and leave a review from inside your ITunes account…

Thanks for your support and I hope you enjoyed this episode. Please let me know what you think in the comments below…

Early Financial Independence PDF Transcript:

Click here to your PDF transcript of Episode #15 about early financial independence with Luke Landes.

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FM 014: Life Reimagined and The New Retirement with Richard Leider http://financialmentor.com/podcast/life-reimagined/11121 http://financialmentor.com/podcast/life-reimagined/11121#comments Mon, 20 Jan 2014 20:05:55 +0000 http://financialmentor.com/?p=11121 Financial Freedom For Smart People


The “New Retirement” is gathering momentum and catching major media attention. Are you on board?

In fact, no less than AARP has gotten behind the initiative with a new book titled Life Reimagined by Richard Leider.

More and more people are realizing the life-changing message the New Retirement delivers. It is much bigger than just financial planning. It explores the intersection between finance and fulfillment showing you how to blend them together into a life well-lived.

You will particularly enjoy in this interview how cohesive Richard and my viewpoints are on this subject – remarkably so – right down to the actual implementation steps and the meaning behind them. In fact, I wrote the introduction to this podcast before ever seeing Richard’s book only to find out it couldn’t have been more perfectly targeted. Not a coincidence.

During the discussion Richard and I go back and forth playing off each other bringing different language and different examples to the same core message – we want to help you get past traditional retirement illusions and embrace a more empowering and fulfilling life plan.

Bottom line – if you have any interest in retiring with financial security and enjoying a happy life (who doesn’t?) then this interview is a must listen. It carefully redefines retirement as a highly misunderstood stage of life so that you know what to expect and how to plan for for the best.

In this episode you will discover:

  • The critical difference between freedom from and freedom to.
  • The 3 revolutions driving The New Retirement.
  • How the 3 revolutions perfectly match the 3 M’s – money, medicine, and meaning. (Not a coincidence.)
  • The last of our human freedoms and what it means for the last stage of your life.
  • The 6 steps to making the Life Reimagined transition so you can enjoy a fulfilling next stage of life.
  • What it means to be pushed by pain or pushed by “inner kill,” versus driven by internal motivation.
  • How do you know if you’re living in the V.U.C.A world? Why should you care?
  • How rapid change connects to your desire for happiness.
  • What it means to find happiness from the inside-out.
  • Why hedonia only gets you superficial, transient happiness, but eudaimonia can lead to deep fulfillment.
  • Why happiness can only be pursued through the “side door” rather than directly.
  • The dead-end path of self-absorption and self-entertainment as your sole purpose in life… revealed.
  • The cause that triggers change in your life and where it comes from so you can be prepared.
  • How to use a sounding board to re-create your life.
  • The reason why lack of curiosity is the number one relationship destroyer in the second phase of life… and how you can protect your relationship from becoming the next victim.
  • The virtues of a circular life solution versus a linear life solution. Yes, it matters.
  • Discover the necessity to embrace discomfort as a positive experience on your path to growth.
  • and much more….

Resources and Links Mentioned in this Session Include:

Life Reimagined Book with Richard Leider

Help Out The Show:

If you are getting value from these podcasts then a great way to give back is to subscribe and leave a review. 5 star reviews improve the show’s rank – the more reviews the higher the rank – which helps more people find the show and benefit from the message.

Click here to subscribe to the show on ITunes and leave a review…

Alternatively, this link below will help you subscribe and leave a review on your device…

Click here to subscribe and leave a review from inside your ITunes account…

Thanks for your support and I hope you enjoyed this episode. Please let me know what you think in the comments below…

Life Reimagined PDF Transcript:

Click here to get your PDF transcript of “Life Reimagined” Episode #14 with Richard Leider

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FM 013: Simple Financial Planning – The Only 6 Ideas You Need To Know With Philip Taylor http://financialmentor.com/podcast/simple-financial-planning/10963 http://financialmentor.com/podcast/simple-financial-planning/10963#comments Mon, 06 Jan 2014 20:16:43 +0000 http://financialmentor.com/?p=10963 Financial Freedom For Smart People


As I sat with 3,000 fellow entrepreneurs waiting for the next speaker to enter the stage, the beauty of Portland’s antique theater intrigued me. Wrought iron railings, ornate tapestries, brass fixtures, and gold inset wood designs set the mood for Tess Vigeland from NPR’s “MarketPlace Money” (9 million weekly listeners) to take the stage. After thunderous applause, her bold statement stunned me…

Everything you need to know about financial planning is just 6 stories, and everything else written on the subject merely rehashes those core 6 stories over and over again to make them look different.

Could it be true? Was financial planning really that simple? Just 6 core ideas? I was intrigued.

Philip Taylor from PTMoney.Com was sitting in the audience with me and was equally taken by Tess’s statement. After all, we are both authors of several hundred financial articles individually and more than a thousand articles combined. Was simple financial planning really possible?

As it turned out, yes, it was. In this 13th episode of the Financial Mentor Podcast, Philip and I arrange these 6 cornerstone principles (as inspired by Tess’s presentation) into step-by-step logical order of execution so you know how to turn the corner on your finances and the exact order to do it in.

The point of this podcast is to simplify all the complication and noise coming out of the financial media because it keeps you from taking action. It is the infamous paradox of choice. When there is too much information to digest then our minds go into confusion and shut down. The result is no action.

That’s why it is so important to simplify. The number one wealth killer is procrastination because a confused mind can’t take action. You must proactively design your financial life by taking daily actions to create your wealth. The sooner the better.

This podcast will show you how to simplify all the financial planning noise down to just 6 cornerstone ideas and arrange them in a logical order of execution. It is everything you need to know about financial planning – simplified.

In this episode you will discover:

  • Why awareness is the necessary starting point.
  • How the 6 cornerstone ideas interconnect to support each other.
  • A simple routine that will help you run your money like a business.
  • The cornerstone principle that will simplify your financial life once and for all.
  • Which expense should be optimized first to get the greatest result for the least effort.
  • The difference between aligning your spending with your values vs. getting the best value for your money.
  • The simple trick that can get you discounts on monthly recurring bills.
  • The right – and wrong – way to use coupons to save money.
  • How to define the efficient price point (Hint – it’s not the cheapest, or the most expensive).
  • The inherent limitation to frugality that can trap you.
  • Why an emergency fund is essential to the early stage of your wealth building process, and why it is useless later on.
  • The 3 reasons to save.
  • The key difference between good debt and bad debt (yes, some debt can be good!)
  • The dangerous self-deception that causes consumer debt.
  • How Philip’s “separate and automate” concept will help you save more with less stress.
  • How to get motivated to save for retirement (if you aren’t already).
  • 3 simple steps to maximizing your retirement savings.
  • The correct stage for emphasizing risk management disciplines and why it is later in the process rather than early.
  • and much more….

Resources and Links Mentioned in this Session Include:

Simple Financial Planning with Philip Taylor

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Simple Financial Planning PDF Transcript:

Click here to get your PDF transcript of Episode #13 with Philip Taylor.

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