152: Retire Inspired with Chris Hogan
Chris Hogan is a best-selling author, personal finance expert, and a leading voice on retirement, investing, and wealth. As part of the team at Ramsey Solutions, he helps people at all levels, including very high net worth individuals, set meaningful goals, and navigate their financial futures.
Chris has spoken to many people who think that Social Security will have them covered in retirement. He’s on a mission to help them work through this misconception, conquer their fears, and live purposeful, impactful lives.
Today, Chris joins the podcast to share the lessons he’s learned from working with Dave Ramsey and the happiest (and unhappiest) retirees over the last 15 years, how to define a retirement that works on your terms, and how to find the right person to help connect the puzzle pieces and bring it all together.
In this podcast interview, you’ll learn:
- Why Chris believes that inspired retirement happens not at a certain age, but at a clearly defined financial number.
- How retirees struggling to find inspiration, purpose, and meaning can get them back.
- Why retirees have the biggest opportunities to make an impact in their local communities.
- The difference between a financial expert, a financial coach, and a SmartVestor Pro, and when to connect with these different people.
- How Chris looks at debt and its associated risks in retirement.
- “When you start to believe something and you match your work ethic with that belief, undeniably, things start to happen.” – Chris Hogan
- “Grab the opportunity and avoid the chances.” – Chris Hogan
- Retire Inspired: It’s Not an Age, It’s a Financial Number
- The Proximity Principle: The Proven Strategy That Will Lead to a Career You Love
Offer valid in the 50 United States and the District of Columbia, to first-time requestors. During the offer period, receive one (1) in-stock book per request. Limit (1) book per week per household. Limit three (3) books total each calendar year, between January 1 and December 31. Offer valid while supplies last. Howard Bailey Financial, Inc. reserves the right to cancel, terminate or modify this offer at any time. Void where restricted or otherwise prohibited.
Casey Weade: Chris, welcome to the podcast.
Chris Hogan: Well, thank you, Casey. It’s a pleasure to be with you.
Casey Weade: Well, I’m very excited to have you on. We had Rachel Cruze on here not too long ago, a good friend and colleague of yours, and now we got Chris here. So, we’re just hitting on the whole Ramsey Solutions team one at a time.
Chris Hogan: Well, we appreciate you and definitely the opportunity to push out information that can help people right now. We’re in a tough spot in our country, and people need the right information and they need the right kind of plan. So, we’re excited to always be with you.
Casey Weade: Well, Chris, I think one thing that we have to just get done right off the top and reading your book, which I thoroughly enjoyed and reading your bio, just following you for quite some time, I think the story of how you met Dave and got connected with the old Uncle Dave’s program over there is a pretty good one.
Chris Hogan: It really is. And the gist of it is that it was at a charity function and had an opportunity through that charity function to get a chance to connect with Dave and sit in on the show, not be on the show but sit in on it. And I really got a chance to hear his heart. I was blown away by not only what he did on-air but off-air for people. And so, it was a breath of fresh air of me being in the banking industry at that time and so the opportunity to connect and see that and eventually join the team has been a great honor. I’m coming up on my 15-year anniversary here with the company and it’s been an amazing ride.
Casey Weade: I bet it has. I see you coming on to the Ramsey Solutions Group as really opening the discussion and some of the main points of what the whole group stands for to a different demographic, to the retirement demographic. I think most people see Dave Ramsey Financial Peace University, the baby steps, they see this whole program as something that gets you to retirement, gets you to this area of financial peace. But then what do you do once you get there? Now, you’ve made it through all the baby steps. You’re now stepping into retirement. How do we apply the lessons that are learned in FPU? How do we apply the baby steps to a retiree and retirement plan?
Chris Hogan: Well, I think the most important thing is retirement is something you get to do. And so, I love that mindset that you have to work to be able to get there and the statement in my first book, Retire Inspired, was it’s not an age, it’s a financial number. And so, working through the baby steps really allows you to have a plan and a purpose as you’re dealing with your money and moving through it but budgeting, for example, is a key component to you controlling your money and getting able to retire. But as I talk about in my book, Retire Inspired, budgeting not only gets you to retirement. It keeps you in it. So, it’s a skill that you’re going to need to use all throughout. And so, the opportunity just to feel more comfortable, Casey, with this money stuff. We don’t teach it. We’re not taught it in school. Now, we’re trying to do it with our foundation’s curriculum, we’re in 52% of the high schools in the United States right now so it’s growing because we know young people need to have these skills in order to start off early. And so, I think the baby steps layout, that plan, and foundation, what people bring to it are their hopes and their dreams. And so, when you combine hopes and dreams with a plan that works, that’s when dream starts to happen.
Casey Weade: As we get into Retire Inspired, I really did enjoy this book. I read a lot of books, especially financial books, and a lot of them are glorified business cards, I would say, unfortunately. Not all of them. There are some really good books out there but this was one that added some real value. What does it mean to retire inspired?
Chris Hogan: Well, I can remember I was a financial coach when I first started with Dave. So, I was sitting across from people. I started off with pro-athletes and entertainers eventually then it morphed into I was working with all types of people. And people were just making statements that were baffling me. They thought social security was going to take care of them. They thought the government was going to save the day and I remember sitting there looking and eventually got to the point I thought, Dave and I had a conversation. I said, “Dave, somebody’s got to do something.” because people are thinking the government’s going to save the day and we all know the government can’t count. I mean, the last thing we want to do is pin our hopes there. We’ve got to take care of ourselves. And they’ve looked at me, and this was back in 2012 and he said, “So, what are you going to do about it?” And so, in my mind, I started thinking I can’t get to everybody across the country but I wanted to sit down with people in their living room and just look at them and say, “Hey, you have an opportunity to make a decision about what you want for your future but you’re going to need a plan.”
And so, for me, Retire Inspired means that someone that has woken up to their dreams, they understand exactly what it is they want but more importantly, they’re crystal clear on what they don’t want. And I can tell you, people don’t want to become a burden to their family and friends. And if we don’t set aside enough money, that can be what happens. Family and friends end up having to take care of us. And so, I think it’s important for people to wake up and shake up what they’re doing so they can begin to take their dreams to a reality and that’s what that means for me, more options to do the things that your heart wants to do for the people that you love the most.
Casey Weade: You know, I think getting to retirement, it’s a lot easier than finding inspiration many times. And many of the families that we’ll work with, they’ve made it to retirement. Now, they’re transitioning into retirement. We call this Retire With Purpose. We have a lot of these discussions around purpose, meaning, and inspiration because that can be a real struggle for many. They’ve just been on this track of trying to accumulate as much wealth as they possibly can so they can get to retirement. Then they make it there and they don’t know what inspires them. They don’t know where their passions are. They don’t know what purpose is or what meaning is in their life. Where do people get started if they’re struggling with inspiration?
Chris Hogan: Well, that’s one of the things that I was finding out as I started doing the research for the book and looking back in my coaching. I was like, what was I doing to get people to tap in and to wake up? And I remember, it was a very casual thing I was doing on the front end. I was of course I talk with people. You know me. I love people. I love to talk. I love to connect, but when I would ask people about their dreams, what is it you’ve always wanted to do? You could see people pause for a minute and it was almost like a struggle for people to find that dream. They’ve been so used to living life and life can be hard. We all have some bruises and some bumps from life happening and sometimes it doesn’t go as planned. But we get our head down and we work so hard. We can forget. We’re not working just to work. We’re working towards something. And so, getting people to tap into that dream and people would say, “Well, I want to travel,” and I’d say, “Well, where do you want to go?” And they tell me, “You know, I want to go to Alaska.” And I go, “Okay, well, who’s going with you?” And they start to say, “Well, I don’t know. I guess my spouse.” I go, “Okay. Well, alright, then if you go there, where part of Alaska are you going to? How long are you staying?”
And I started to ask these questions and it got people to really tap in that it’s not enough just to have the snapshot. I want you to have all the details. I want you to see it in high definition. So, whether that is travel, whether that is spending time with family, whether it’s starting a business, doing mission trips, or maybe it’s just you having a personal vacation, when we start to tap into those things, we can start to realize our dreams, start to see them for what they are, and then we have to make a decision. Once you have that dream in full view, you’re either going to work toward it or you work away from it and that’s a personal decision.
Casey Weade: Well, what’s the dream look like? Let’s say we’ve asked ourselves these questions. We’ve had someone like you, a financial coach, we’ve sat down with. They’ve asked us some good, really meaningful questions, maybe even written down some of our goals. Does this ultimately turn into a physical document? Is it a drawing? Is it a vision board? What should that mean?
Chris Hogan: I would say yes to all of them because it’s really going to depend on the person. For example, I’m a very visual person but I like things written down. So, I have my goals written down. It’s in a laminated card. I keep it in my briefcase as well as in my car, as well as in my closet. And so, those goals are in front of me. Front of mine, that means it’s something I know what I’m wanting to chase down. My bigger dreams, I have pictures. These things are something that’s just a self-motivation tool for me to think and go, “You know what, we live in the greatest country on the planet where we can have a dream and make a decision and start all in the same minute. We don’t need a permission slip. No one has to give us permission to do it. We can choose to.” So, it really, really boils down to what motivates you. And one of the toughest things I’ve had to do is to get a person to talk with their spouse openly about those dreams, and to share those because you want to be on the same page with your spouse. And if you’re single or newly single, you want to have an accountability partner that can at least identify with your dream and help you be accountable toward working toward it.
Casey Weade: Well, now everyone wants to know what Chris Hogan has on that laminated card. Because a question often for many is, “Well, I’ve already hit my financial goals,” and, Chris, you’re in what I would call job optional status so you don’t have to continue to work moving forward but you continue to do that and you continue to set goals. As you said here, what do your goals look like? And what would a meaningful goal look like for someone that’s in that job optional position?
Chris Hogan: Right. Well, I can tell you one of my goals that’s near and dear to my heart is I’m wanting to reach out and help young people. I’m wanting young people to understand and learn goal setting. My goal is to start an academy at some point where I’m teaching young people about business and about leadership because that’s another thing that’s not taught out there. And so, regardless of where you come from, I’m not worried about where you come from. I’m worried about where you’re going. And so, that’s one of my goals is to set aside time and money to be able to devote to training young people and mentoring them. That’s a big goal. I’ve never spoken about that out loud before but that’s something that’s near and dear to my heart. But I think for other people out there to really take some time and think about what motivates you. I can remember I grew up and I spent a lot of time with my grandparents and so hanging out on the front porch on the back porch is a big deal to this little country boy. It brings back memories of hanging out with grandparents and talking and spending time.
And I can remember them having conversations with me, helping me to understand that I could do anything that I set my mind to but I was going to have to work in sacrifice. And I’m so grateful for those times. I’m grateful for those lessons that they planted in this little boy because what happened is I actually started to believe it. And when you start to believe something and you match your work ethic with that belief, undeniably, things start to happen. And so, for me, part of the reason I did that book was not only give people a plan but also give people permission, permission to dream out loud, permission to clean up whatever financial mess you have in front of you. We’ve all done some stupid with money before but the good thing is, is we don’t have to stay there unless we choose to. And so, the reality is, is we’ve got an opportunity in front of us. So, I want you to think about what’s deep down in your heart. What brings you joy? I want you to spend some time not only thinking about it but really reaching for what about that makes you so happy? Like, what about that?
One of the things I want to do in my spending time with young people in the mentoring and training is I actually want a back porch setting. I want some rocking chairs where we can sit and replicate kind of those conversations I had growing up, where you spend time listening, but also planting seeds. And so, I want to encourage the people out there that if you are retired, you’re not done yet. You got more ahead of you than you’ve ever dreamed. You’ve got opportunities to sit down with maybe younger people and do some mentoring on your own. We’ve got things we can do and our giving up our time and our talent. I want you to start to think where can you have an impact on people just like you’ve had some people have an impact on you.
Casey Weade: Where do you think if you’re sitting in this you go, “I really want to make the biggest impact in my retirement,” where do you think retirees today have the biggest opportunities to make an impact?
Chris Hogan: I would say right where they are. And what I mean by that is in their communities and whether that’s you going by a hospital and donating your time. My youngest son is a special needs boy and he’s probably had 14 surgeries in his life, and I can tell you one of the most places that touches my heart and one of the most lonely places on this planet is inside of a hospital. You’ve got parents that are sitting there waiting for a child or you have children sitting there waiting on a parent. So, an opportunity to volunteer at a hospital, just walk around, greet people. Go in and just play with a child, get a book, and read a story to that child. It’ll change you. It’ll touch your heart. And so, you got an opportunity right where you are in your community, touching base in your church, going to spend time with youth groups, reaching out to the elderly. You have some people that are sick and shut-in that aren’t able to leave. Go buy a retirement home. Spend some time there. I mean, there are so many things we can do and it doesn’t have to be on a global scale. It can be on a local scale.
Casey Weade: Do you find with all the retirees and all those celebrities, all those individuals you’ve met that have reached this coveted job optional status where they don’t have to work anymore, do you find some attributes of individuals that are common when they’re really living life to the fullest and they’re the happiest versus those that are maybe drowning, and they’re not happy, even though they’ve got all the money in the world?
Chris Hogan: I can totally tell you the difference and it’s called joy. Joy, that’s what I see. When people reach that job optional status where they’re not working because they have to but they’re working because they want to, they love what they do. They love the people that they’re working with and they love the idea of making an impact. And I’m going to tell you, those people are magnetic. You love to be around them because they’re not seeking to take. They’re bringing and they’re giving. And so, I think it’s something about their spirit, but I would say joy is the thing that I’ve noticed. That’s the difference.
Casey Weade: Does that fall into one of these different types of retirements that you lay out in the book? You talked about several different types of retirements and I think most of us just put retirement in one silo and don’t think of there being multiple types.
Chris Hogan: You know what, I agree with you, Casey. I think the word retirement is one of the most misunderstood words in our dictionary because a lot of people can’t comprehend it or they weren’t sure how to go about it and they don’t understand. See, I think retirement gives us things that we can absolutely that we’ve dreamed of being able to do or being a part of. I think it opens the door to more opportunities. Opportunities are a big deal to me. And the lesson I learned from my grandmother, I’ll never forget, I was a senior in college. I was trying to figure out what I was going to do next and I had these three options. And I sat down and I was talking to her about each and she could tell I was frustrated and irritated. And she goes, “Alright, honey. Tell me about each of them.” I called my grandmother Nan. I said, “Nan, this is what’s here. I need to make sure I make the right decision.” I told her about each and she looked at me and she goes, “Oh honey, it’s simple.” She said, “You need to grab the opportunity and avoid the chance.” And I’ll never forget sitting there and she grabbed her coffee then strolled down the kitchen like little Yoda. She’s a little bit of woman but she had a whole lot of wisdom and I’m grateful for that lesson that day.
Grab the opportunity and avoid the chances. You see, I think when we have our dreams clear and we have a plan that’s clear, that’s an opportunity for us to do something. It’s an opportunity for us to make an impact. But if we don’t engage in this and we don’t sit down with investment professionals to talk about our portfolio, to find out some things that we could do to go further faster, that’s where we’re leaving things to chance. And so, I want people to grab opportunities and that’s not to be scared to ask questions, not to be scared to have a conversation. Casey, you’re in the industry and most people believe that if you go sit down with an investment professional that they’re going to judge you, they’re going to put their glasses at the end of the nose and look at you almost like a principal and tell you everything you’ve done wrong. No, those are the wrong ones. You don’t want those. You want to sit down with people that are SmartVestor pros. These are people like you, Casey, that we talk about all around the country that have the heart of a teacher. They’re not there to judge you. They’re there to actually help you get to your goals.
Casey Weade: Yeah. And that’s one of the things you touched on in your book. There are some things that keep people from seeking advice. And I think that’s quite true. Quite often it is that guilt or shame or fear of being judged in some way.
Chris Hogan: Well, I’m going to tell you this. There’s another emotion that goes around money. You hit on the guilt where you feel guilty that you haven’t done stuff or hadn’t made decisions or shame about things that you’ve done in the past. But there’s another one that’s closely related with those two, and that’s cynicism. Cynicism is that you don’t believe that your situation can change. You don’t think anyone can help you and that’s completely wrong. That kind of thought process is what keeps a lot of people stuck. So, I want to encourage your listeners and your viewers. I want you to have an open and honest communication with your investment professional, show them your 401(k), show them your IRAs, and find out what tweaks that you need to make right now and talk about your dreams with them about what it is you want to accomplish. When we build that team and you get the right people around you, you feel empowered because you’re getting educated and it’s going to allow you to live your dreams.
Casey Weade: We have said in the book, the most important investment behavior you can engage in is to go out and find a professional investment advisor. And so, can you give us a few reasons why that might be?
Chris Hogan: Well, I can tell you, the financial industry has so many acronyms, so many definitions, and so much stuff out there, that it can actually cause people to have fear. And people tend to avoid what they fear instead of engaging it. And I’m amazed that if I have a tooth problem, I assure you, Casey, I’m going to a dentist. All right. And if I have a vehicle problem I’m not listening. I have basic tool skills. I’m talking hammer and a screwdriver, the flathead kind, not even the Philips. I can’t operate that thing. If I have car issues, I go see a mechanic. But listen, we’re talking about your dreams here. We’re talking about your livelihood and your family, and the potential for you to impact your community. That’s a pretty big deal. So, let’s not leave that to chance. Just like you’d go see a dentist for your tooth, just like you’d go see a mechanic for your car, you need the right kind of investment professional in your corner to help you realize your dreams.
Casey Weade: Well, I think there’s a lot of confusion around finding that investment professional or financial planner. There’s financial planners, there’s financial coaches, there’s retirement coaches, there’s investment advisors, there’s all these different names. Like you said, it’s very intimidating when we talk about all the different acronyms that are out there today but you have all these different titles at the same time. You visit the Ramsey Solutions site, you’ve got financial experts, financial coaches, and then you’ve got SmartVestor pros. What is the difference between a financial expert, a financial coach, and a SmartVestor pro say a financial advisor? I see those as three different things.
Chris Hogan: They are totally three different things. So, Dave Ramsey and myself would fall into the category of financial expert. That means that we’re in this game, we’re connected. We give people guidance on steps to take. We give people advice. We walk them through their scenarios. A financial coach, which I trained financial coaches, these are people that would sit down and help you with getting out of debt, help you with budgeting, beginning to help you to learn to save and to tap into the dreams. Think of a financial coach as a personal trainer. But a SmartVestor pro, this is an expert. This is someone that’s going to help you do the investing. They’re going to hear your dreams, they’re going to talk to you about your goals, but they’re going to walk with you side-by-side, and to help you get into the right investing products based on your risk tolerance. And so, this is the one you ultimately need to be able to look at your 401(k)s or IRAs and make some changes but to also talk about it. A SmartVestor Pro is someone that’s not just connected to the market. They’re in the market. These are people that are connected with information day in and day out. It’s what they’re passionate about. They love this stuff. They love the information and they love to teach.
So, those three are totally three different segments. But I can tell you this, when you connect with the right person, the right financial expert, the right coach, and the right SmartVestor pro, you’re finding someone that has the heart of a teacher. That means there’s someone that’s talking with you, not at you. And too many times in this investing world and financial world, you’ll get people that will throw out terms and talk at people. People don’t understand so they get confused. So, when you talk with someone with the heart of a teacher, they’re guiding you. They’re wanting to hear your thoughts and to make sure you understand what it is you’re doing and why.
Casey Weade: You know, there’s a question that I have had in my head. I’ve been wanting to ask this question to a financial expert for some time and I don’t know how to frame it. I don’t know how to exactly have you answer this either, but I don’t think most people know that a financial advisor is not allowed to call themself a financial expert. It comes down to regulatory bodies. I can’t call myself a financial expert, even though I’ve got a litany of designations, college degrees, years of experience. I can’t call myself financial expert, but so many other individuals can that don’t carry a license, that don’t have that same education. Where do you stand on that?
Chris Hogan: Well, it’s frustrating. I can tell you that. Again, when you start to deal with investment professionals that have designations, the compliance issues, and regulatory issues, they’re things you guys are bound to in what you can do and what you can’t do. And so, it is frustrating and so you can have someone just call themselves an expert because they’ve got three minutes of experience. So, it really goes to reality as plugging in, understanding the person’s track record and the heart behind it, and what are they doing with it. An expert is not someone that dabbles at someone that’s fully immersed. Even our SmartVestor pros are people that are thoroughly immersed in this stuff. They live it day in and day out and they have joy helping other people realize their dreams. And so, it’s a great connection and I’m honored to be able to refer people to SmartVestor pros because I know they’re going to be taken care of. I have no question in my mind. And that’s a big deal.
Casey Weade: The SmartVestor pros, the pros you work with, those that you refer business out to, they’ve got a litany of different compensation structures at the same time. And in your book, there was something that caught my eye. My question is, is there a conflict-free compensation model? I think quite often fee-only advisors will say, “Well, we’re completely conflict-free.” You’ve got commission advisors that say, “Well, this is the best way to go.” Is there a conflict-free compensation model? And I’ve just got to share this quote because I’ve never seen this anywhere. You said, “When it comes with a commissionable advisor, the more you contribute, the more you both earn. That’s a win-win situation.” That’s a first.
Chris Hogan: Yeah. And it is a win-win situation. Listen to me, I know out there in this world that we live in a capitalism-type society. And if I go to the dentist, I have to pay to see the dentist. If I take my car to the mechanic, we’ve all been called out to come look at this part. We don’t have any idea what it is but they show us what it is and they give us a bill where I’ve got to pay to keep my car running. Well, I’m going to tell you something. My dreams are more important to me than my tooth or my car and I don’t have a problem working with someone and paying someone to be able to give me guidance and to guide me in this process. And so, again, it goes back to understanding value. And there is a thing of such thing as a fair nickel and an unfair dime. So, you need to be aware of that. Understand, you get what you pay for is so to speak, in my opinion, and I want the right kind of guidance. Now, there are all types of models out there and people that will go in different ways. I’m advising people to sit down, talk to your SmartVestor pro, gain an understanding of what it is they do and how they work, and figure out what’s best for you.
Casey Weade: I think the key is just knowing what it’s costing you. Many people are afraid to ask that question. How much are you going to get paid? How much are you going to make off me? I think people are getting more comfortable with asking that very important question. You know what you pay for a vacation. You know what you pay for your groceries. Do you know what you’re paying for your financial advice or your investment advice? And people are afraid to ask that question. I wrote an article in Kiplinger that said there isn’t a perfect compensation model. There is not one compensation model that’s going to eliminate all conflicts of interest. You have to find the right one for you.
Chris Hogan: No, you absolutely do. I would completely agree with that. And again, it just goes back to understanding, it goes back to communication, it goes back to understanding, a person understanding how you as a SmartVestor pro are going to work with them. How can they reach you if they have a question? What’s going to be their access point and things of that nature? So, it boils down to communication but also understanding. And more important as I advise people, you’re hiring a SmartVestor pro to join your team. That SmartVestor pro actually works for you. So, you want to be able to talk with them and communicate with them but you all are collaborating on the plan and that’s so important for people to understand and know. So, I’m trying to bring down the barrier so more people come and talk to you all to sit down and have that conversation. Too many people are putting their heads in the sand and just hoping it’ll all work out. I want people to plan and have a plan and work toward that plan with the right people in their corner.
Casey Weade: You know, as we reach the end of our conversation here, I struggle with speaking with the Ramsey Solutions team member and not talking about budgeting or debt in greater detail. I think debt is one of those really controversial issues, especially when it means you’re stepping into retirement. Can we carry debt in retirement? I think this is one of the most common questions. So, we’ll have someone that has a mortgage, got the money to pay for the mortgage, and they feel, “Well, Ramsey said I can’t have this debt. I can’t retire now.” What do you say to those individuals?
Chris Hogan: Well, I think it boils down. When you get scenarios like that, I think you have two sides. You have the can you or should you? And I think the difference is one of my football coaches told me, he goes, “Guys,” he used to teach this to us all the time. He said, “There’s good, there’s better, and there’s best.” There’s a good time, there’s a better time, and there’s a best time. And so, this boils down to, should you go into retirement with debt? Well, the best-case scenario everyone would answer that is no. You free up your income, you can do more of the things you want to do. Do people do it? Yes, they do. But you know what, that’s their individual plan. That’s them walking through and talking and understanding where they are, what they’re doing in their overall game plan. I encourage people not to go into retirement with their mortgage, if at all possible. Just get that out of your life, free up that payment, and then you invest more and do more giving in the future. So, I tell people, they reserve the right to be able to choose. I just go back to good, better, or best. And I want people thinking like that. But more importantly, if they’re married, working together, along with the SmartVestor pro understanding the overall strategy.
Casey Weade: So, I had a debate with a client here recently around debt and I think it’s this definition. What is debt exactly? How exactly do you find it? I think there are different categories. And as I’m talking through this, I said, “Well, if you have the cash to pay off the debt at any given time then is it really debt in the first place?” I think of my home mortgage in this way. I carry a mortgage and I could pay it off. The interest rate’s three-and-a-quarter. So, I’m paying three-and-a-quarter over here, but I’ve got the funds over here to liquid in a safe vehicle. I can access it at any time and it’s making 5%, 6% a year. So, I’ve got an arbitrage opportunity. I can pay it off at any time. Am I really carrying debt? And is there something really wrong with that?
Chris Hogan: Well, I can tell you this. There’s two types of ventures.
Casey Weade: And, Chris, feel free to change my mind. I’m completely open.
Chris Hogan: I’m going to tell you this. You’re in a different situation because you’ve got the money sitting there and you know you can pay it off, right? That’s a different mindset and looking at that. You have the capacity and the ability to, with the click of a button to transfer funds and then stroke a check. But looking at this, I tell people, there are two types of interests in the world. There’s interest that you pay and interest that you earn. And if you borrow money from someone, they’re charging you a penalty called interest. That’s the penalty for using their money. If I’m investing my money, then I’m being rewarded with interest because my money is growing. And so, that’s my lesson on economics right there. Are you paying it or earning it? The other side of this is the whole issue with debt, in my opinion, is that it is a thief like it steals opportunities from so many people out there. But the other side of it is the risk factor. Throughout this pandemic that we’ve all been experiencing unlike anything we’ve ever seen before, I think a lot of people are waking up and they’re seeing debt in a whole new way. You see, debt doesn’t care if you’re sick, it doesn’t care if your child is sick, or if you’ve lost your job. It just wants. It takes. It wants a payment.
And so, I look at it that the risk factor in that. I want that risk out of my life because I want opportunities. People can view it in different ways but just understanding when you get out of debt, you get to keep more of your money and you can do more of the things you want for the people you love.
Casey Weade: Well, I read in one of your articles you said taking on debt equals risk so we should avoid it like the plague. And I’m playing devil’s advocate here. I see other individuals reading that going, “Well, if debt equals risk,” and you could also look at many of the business owners, most successful individuals in the world are really smart at using debt much like the best investors in the world were taking on risk investing in the stock market. Is there a difference between taking on risk with debt or playing some type of arbitrage opportunity and taking risks in the stock market? I think it comes down to a behavioral or emotional issue. Most people aren’t going to have the right behavioral aspects. They’re going to make emotional mistakes.
Chris Hogan: No, you’re right. Risk is involved in life. Like when we get out of bed, you take a risk. When we drive a car, we take a risk. So, investing is risky. But when you are investing in the right things, you can understand that risk and you can begin to understand there’s a calculated risk and then there’s unnecessary risk. Bitcoin, cryptocurrency, in my opinion, is an absolute absurd, unnecessary risk. This is a thing that’s not regulated. No, you can’t touch it. It’s just this thing that became popular in pop culture. So, that’s an unnecessary risk from an investment standpoint. But in looking at it, there’s always components of risk. But I think the main thing is it boils down to for people to understand their risk tolerance like they got to understand what they have the stomach for and whether or not they agree with me or whether or not they agree with Dave. I want them to at least hear us and understand there’s validity in the thought and there’s absolutely wisdom in having the conversation and getting the right guidance for that couple to make a decision or that individual to make a decision and know what it is they’re getting into.
Casey Weade: Yeah. I think it’s having the backstop and Richard Branson would often talk about that, that I always knew the worst-case scenario and I made sure I would never end up financially destitute. And that conversation quite often doesn’t enter into an individual’s mind. It’s the greed that takes over.
Chris Hogan: No, I would agree with that. And so, we have to be wise. I think that’s the beauty of having a SmartVestor pro in your corner is that they can talk you down when your emotions are too high but they can also urge you to understand that inflation is real. The cost of living is going up each and every year and we have to grow money. Compound growth is how money grows. And so, if we don’t invest, we’re not going to grow money. And if we don’t invest and grow money, we’re not going to have any to spend. So, I just want to help people wake up, get more serious about their dreams, get more focused on their plan, and definitely, get connected with an investment professional that has the heart of a teacher.
Casey Weade: Well, I love your message, Chris. As we’re bringing it to a close here, I know you’ve got a hard stop coming up. And I want to ask a couple of philosophical questions. That first one is, what does retirement mean to you? What does retirement mean to Chris?
Chris Hogan: Well, I think retirement for me means options. I love options. I love the thought of being able to make some decisions for what I want to do, what I want to do with my boys, what I want to do in my community. And so, options are a big deal.
Casey Weade: And my next question would be, how do you define meaning and purpose? Do you separate the definition of purpose and meaning?
Chris Hogan: Well, I think when you do something that has meaning to you, I think it also has a purpose for you as well. I think the two work hand-in-hand. I think it’s really important for us to have purpose in life and whether that’s to take care of ourselves or take care of our loved ones or to be able to provide for our community or the world. I think that gives meaning to life when we live in our purpose. And so, I think the two of those work hand-in-hand.
Casey Weade: Yeah, that’s exactly the way I like to define it. I think if you have a well-defined purpose, that’s what’s ultimately creating meaning in your life, but it can be very difficult to figure out what is a good purpose? I think sometimes we put it on a pedestal and it becomes a very intimidating question to ask ourselves, and we sometimes may feel that our purpose isn’t big enough. What should a purpose look like? Is there a purpose statement? Is it like a mission statement? If someone’s starting to define it for themselves…
Chris Hogan: Yeah. I think it is a mission statement. I think it really boils down to what you’re passionate about. One of my other peers here, Ken Coleman, he’s definitely someone you should have a conversation with, really drills in his book, Proximity Principle, and talks about that, helping people find passion and their purpose, and really plugging into that. But I think it boils down to passion. It’s what gets you excited, what wakes you up and gets you out of bed. And for me, it’s helping people to understand this financial stuff, to help people have clarity on their dreams, but more importantly, clarity in their plan.
Chris Hogan: Well, Chris, thank you for joining us for this quick episode of the Retire With Purpose Podcast and thank you so much for your gift to our audience. For those of you out there that want to get a copy of Retire Inspired by Chris Hogan, we’re going to be giving it away. Chris was so generous to send us over 10 signed copies. So, we got 10 signed copies. We’re going to give those out to the first 10 individuals that helped us with something and that is writing an honest review for the podcast. The podcast currency is reviews. And so, we can get a review if you enjoyed what you saw here or if you didn’t, for that matter, write us a review. It doesn’t matter either way. We just need honest reviews so that more individuals can catch our message. Just scroll on down to the podcast app, write a review there, or go to RetireWithPurpose.com, click on the podcast tab, click on leave review, leave an honest review, then send us an email at email@example.com with your Apple username, and we will send you out a copy as long as we have them here in stock, but I’m sure they’re going to go fast. Chris, thank you so much for your generosity. Thank you for your message and I hope to have another conversation with you soon.
Chris Hogan: Casey, thank you so much. It was a pleasure to be with you and I look forward to coming back.
Casey Weade: Until next time.