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Up Your Average is the “no nonsense” podcast made for interesting people who think differently. Learn to navigate your life with unconventional wisdom by tuning in to Keith Tyner and Doug Shrieve every week.
The idea that you're just working for money, think, would be like trying to run a marathon that never ends. But if you had a purpose or an entity that you really weren't stoked and motivated for, then that decision, I think, makes financial planning much easier.
Caleb:Welcome to the Up Your Average podcast, where Keith and Doug give no nonsense advice to level up your life. So buckle up and listen closely to Up Your Average.
Keith:Good morning, Doug. Hey, good morning, everyone. Man, what a great day to be alive.
Doug:Yeah. Summertime. It's hot out there. It's great. Who doesn't like hot weather?
Keith:It's watermelon season, man. I had I had got a two watermelons on the way back from Amish territory last week, and they were yellow on the inside. Have you ever seen those?
Doug:Is that good or bad?
Keith:That's just a kind of watermelon. I didn't even know it existed, but it was a really sweet butter milk.
Doug:Okay. That's good.
Keith:Yeah. My wife knows how to
Doug:pick a good watermelon. She taps somewhere.
Keith:Our friend Phil was teaching Caleb about that at the grocery a few weeks ago. Yeah. It's
Doug:kinda like banging sticks looking for water, you know, that kind
Keith:of thing. There is a science to it, I suppose. I just crossed my fingers and hope something lucky happens in my background there. So I was thinking we can wrap up this series on time, and really Ben Franklin came to mind. I think he was credited with saying time is money.
Keith:And I wanted to zero in. And when I was thinking about it, like I didn't get as specific as I thought I was going to. But one of the ideas I shot out to you was how long will you work for money? And I'm saying that not only to you, maybe not even to 23 year old Caleb, maybe an 18 year old. Maybe they need to think about that question.
Keith:What does that spark in your thoughts?
Doug:The first thought is you are exchanging your time for money when you go to work. That's something to think about is I have this time in my life, and what am I willing to trade it for? And, at different seasons in life, you might be willing to trade it for, just about anything that you can get your hands on so that you can start earning a little bit. And then there's others where you're like, you know, now I don't I don't need that next deal. And so just the fact that you're exchanging your time, I think, is something to think about.
Keith:To me, it's become a really big deal. And I think it even ties in with the question of what's work. Because if time and money are a relationship, then you probably it probably makes sense to think through what has worked to you and even not only with what is work, but who would you work for? Are you going to just work for money? Are you going to work for a person?
Doug:Or a purpose.
Keith:Yeah, because idea that you're just working for money, I think would be like trying to run a marathon that never ends. But if you had a purpose or an entity that you really weren't stoked and motivated for, then that decision I think makes financial planning much easier.
Doug:Yeah. Yeah. I think that decision makes a lot of sense, especially as you get a little older. But early on, like, for the Shreve boys, hey. You just need to go work.
Doug:You need to you've got a lot of
Doug:time on your hands. What what do
Doug:you wanna do with the time that you have on your hands? So that's the discussion. Discussion.
Keith:Yeah. I mean, just imagine the amount of time that's spent watching this. It could be converted to dollars to help with something down the Yeah. And this thing or the people up in the cloud trying to get you to look at this thing are just stealing your your really your money. Your your time is the invaluable thing, but but you could be using that in a more productive manner a lot of times.
Doug:Yeah. It's it's hard it's hard to create more hours in the day, but putting that thing down definitely would. But I think purpose is such a big deal. And if you can tie purpose into your work, man, time flies. And you look back and and you're just it's just amazing all the stuff that you can get done with purpose tied to time.
Keith:Yeah. And suppose you're a 22 year old or an 18 year old going out and beginning a career, and you have two employers. One's offering you x dollars and another one is offering you, say, 90% of x. The temptation when you're 18 or 22 is to take the x because it's greater than the other one. But I I was thinking, what what are some variables that you might take into account to go, you know what?
Keith:Maybe x isn't the right one. It's better to get something with a little lesser pay.
Doug:Could be. I mean, do you like what the company stands for, or could you put their T shirt on and be excited about it? It just there's probably tons of variables to consider, like, who would you be reporting to? Where's the location? All kinds of stuff.
Doug:I think of right out of school, one of my friends went to work for Michelin Tire Company. And, he put a lot of time in working for Michelin, but it also gave him the flexibility to create his own business while he was out on the road. And so I don't know. There there's a lot of different variables to think about, but I think it starts with, like, where do I wanna spend my time? Where do I wanna spend my energy?
Keith:Yeah. I I think that just focusing on the dollar amount that somebody's going to offer you may not be the wisest decision because if you get more spare time with somebody else or say you can leave the job behind at the end of the day, Some jobs require you to carry a phone or carry your thoughts with you. And so thinking through some of those things probably is a big deal. I would even, if I was a young employee, I'd consider my commute time as part of my wage, right? Like if I gotta drive an hour each way, that's part of my job, really.
Doug:Yeah. I don't think I would have thought about that at all at age 22 or whatever. I would be like, okay. What do you need me to do? I will be there, and I'll do it.
Doug:For for me, coming out of college, I remember Rolls Royce offered me a job for $35,000.
Keith:Wow.
Doug:And I thought that is a ton of money. But instead, got into this business. I think I made $12,000 my first year. And the thought process was, hey. I can build a business.
Doug:I can do this financial planning thing until I'm 70 years old. And so there's a long runway here. And so as someone's looking at their time, I I think they have to step outside of where they are currently and say, if I'm healthy, can I can I do this for a long run? Can I build into this? And with that, you could could afford to take a lot less money.
Keith:And I and I think, like, the question, how long will you work for money? If you can think about that earlier on, it doesn't put as much urgency today on today's role, today's responsibility. But if I'm thinking I have to make as much money as quickly as I can, you're probably not gonna take as much risk because it's
Doug:Who would tell someone that? I mean, they like like, you gotta make as much money.
Keith:I think the system Maybe. I think the system does. Like, it tells it tells young Caleb he needs to put money in a four zero one k today, which maybe he doesn't. Like Yeah. Why why does a 23 year old have to put money in a four zero one k now that he's married to 70?
Keith:Yeah. The system is just making you think that way,
Doug:I think. Yeah. That that could be.
Keith:Yeah. So so I would encourage any particularly younger people or wherever you are to say, what if I'm doing what I like and I'm gonna I I can stretch out how long I'll work for it? Because if you can do something until you're 70 or 75 and you're enjoying it, why not? Like, what what else are you gonna do with your time at that point? And like to have a 70 year old roaming around and gimbal here could probably offer a lot of wisdom to the other team members members here.
Keith:So I'm just buying some time for myself in about four or five years.
Doug:I think it also you have to ask yourself how ambitious am I, and be honest with yourself. And if you're a pretty ambitious person, you can have a lot of influence on your time because you can get things done quickly. And that can lead to either making more money or having more free time. But if you're an ambitious person, you don't want too much idle time in your life because that that'd be pretty depressing. You just you wouldn't have that connect connection of purpose.
Doug:And I think about, some of my friends who are on full commission, which I was. You were. Right? Like, out of
Keith:the Yeah. I still consider still.
Doug:Yeah. But but back in the day, I mean, it was Right. You had to you had to make a sale. Yeah. And so some of my friends are on full commission, and I think, my goodness, they're pretty efficient with their time.
Doug:Because if they are not doing what they're supposed to be doing, then they're they're not getting ahead. They're not meeting their goals. They're not they're not accomplishing what they want. And so I think full commission teaches you how to use your time very effectively.
Keith:Yeah. They say it's the best paid job or the worst paid job depending on how you do that. You're gonna you're gonna navigate that. Another thought I had, like moving away from your work, when we're talking about time and money within the how long will you work thing, what came to mind was compound interest and how does interest impact your life? Like, is a big part of your life.
Keith:And the first thought that came to mind was paying interest. And what's your thought or experience with paying interest?
Doug:When I think about interest and compounding, you know, when you when you buy a house for the first time, you can get a sheet that'll show you how much interest you pay if you hang on to it for the full term of that mortgage, and it's like, jeepers. I associate that with, like, me being 50 years old and looking at my weight. Like, over the last twenty years, like, little by little, it's added up. And so I think the I think the interest is kinda like that is little by little, it stacks up to a big amount that you you probably with a little bit of attention to detail, you could either cut it out or you could channel those money somewhere else.
Keith:I remember I had a nice paying job. I was living in Houston. I was 24 years old. Houston was in a depression, so my money went a lot further than it would have even in Indianapolis at that point. But I was worried about my reputation, and I was I was doing things I don't do any longer.
Keith:But one of the things I would do is get everybody really nice Christmas presents. So when when uncle Keith would come back to Indiana and they're under the tree but what I did is I used my credit card to do that, and I would finance Christmas for six or nine months every year. And then when I started looking at how much I was paying interest on that, I'm like, uncle Keith has become mean uncle Keith after about a couple of years of those because when you're paying 20 percent interest on a credit card, in my opinion, there's no reason at all to put a dime in your four zero one k Yeah. Until you pay that off because you're going backwards.
Doug:And those are called usury rates, and and and somebody else is using you when when you're when you've got a credit card and it's 20% or or 9%, whatever it is, they're they're using you. That just doesn't feel good.
Keith:And the idea of even I don't know, I haven't looked lately, but say a mortgage is 7%, that's still a lot of money. And when you're thinking of the time associated with money, if you put a $100 say you've got a 7% mortgage and you put an extra $100 on your mortgage today versus twenty years from now, that $100 is going to buy you more time later because it's to pay off more of that interest today. And so your time and money, even with interest, the sooner you pay some of that back, the more freedom you're gonna buy yourself later.
Doug:Yeah. Especially, you know, if the dollar keeps losing its steam.
Keith:Well, there's there's a lot of variables that even go with that as well. Certainty of the future and things like that. I I was even looking at the idea of some historical biblical ideas with interest, and I know you've mentioned this in the past, but there's the idea of seven years of seven. Oh, here we
Doug:go. Okay. I like where this then is going.
Keith:There's the year of jubilee, which is the fiftieth year.
Doug:So you've
Keith:got the way the seven year sabbatical worked in biblical times was I would loan you money, but at the end of seven years, you owe me nothing. The the loan is forgiven. And so in business settings, it would be I'm not loaning Doug's fourteen years of money because I only get get paid back at seven. Right?
Doug:Yeah.
Keith:And so Let's do six. Yeah. And so as I in my own life, when I started doing the math back in the day and looking at the the difference between a seven year mortgage, a fifteen year mortgage, and a thirty year mortgage, there's a lot of wisdom that goes into those seven sevens in this and the Jubilee. Yeah. And I don't think our our world system or even most people watching this even have But you you
Doug:used to have this seminar. Keith had this seminar that that he would do seminar doing seminars. That's kinda funny in itself, isn't it?
Keith:I was reading about our friend Stan, and he was talking about him doing
Doug:So Keith would do these seminars, and it was this was a really cool one. It's called seven years to unencumbered prosperity. Seven Up. Oh, yeah. And Keith would, have a bottle of seven Up, like a two liter, and he'd shake it up.
Doug:And if you were too quick to unscrew the cap, it'd make a mess. But if you did it slowly, you know, it'd be okay. And and the whole point was is, look, you could probably be consumer debt free in, what was that, three to four years? Yes. And so consumer debt would be like anything but the house.
Doug:Right?
Keith:Right.
Doug:And so cars are, the Christmas gifts or whatever whatever you've been buying. And so the seven seven in biblical terms is is is a completion number. And so, basically, you can get it done. And seven years is a good year to get it done.
Keith:Well, in the math behind that, if if you if you geek out on the math, what happens is you're not real if you go much longer than seven years, mainly what's happening is you're just geometrically increasing the amount of interest you pay. And the other thing that that does psychologically is it reduces your consumption.
Doug:Yeah. You're using focused.
Keith:Well, no. If you're using a seven year loan thing, you're if you're gonna use that for a mortgage, you go, I can't buy a house. Well, maybe that's the point. Maybe today is not the day to buy a house. Or Gotcha.
Keith:Or and I'm not saying that's what y'all need to do. I'm just saying the longer you stretch out interest, the less time you're gonna have because you've committed your future on something that you couldn't afford today. And and nobody's talking about this today, but if you do geek out and look at the numbers between seven and thirty years, it's quite a difference in what you're paying. Plus, nobody knows what's going to happen thirty years from now, right? Like in seven years, you don't know, but you've committed yourself to something maybe beyond reality for your situation.
Keith:So so let's jump from how long will you work for money to how long will your money work for you because that's what, like, that's what our industry is talking about. Like, you want your money to start paying you. Right?
Doug:Yeah. The term that I love to hear from people is mailbox money. Mailbox money. And I've got this friend out east who has a just a really great business, and he says, there's no such thing as mailbox money. Anytime you make money, you've had to really work for it.
Doug:And I think that's true of your stock investments, of your interest, your dividends, your real estate investments. You've had to work for it.
Keith:We were helping some people with some things that they went outside the standard circle of investments to some little fringe investments. I was thinking about that, that when you look at certain rates of return, they may or may not be realistic. Yeah. And so if you want your money to work for you longer and somebody is promising you a bigger and better deal, you might step back and get a second opinion on that.
Doug:Because the unknown risk associated with it.
Keith:It may not be a real investment, right? Like, that's what I'm thinking. Right. I was thinking of looking up the math on a Ponzi scheme. I read about Charles Ponzi because I was intrigued about it.
Keith:But the idea of any Ponzi scheme is I start with a small circle of people and I give them an unreasonable rate of return. They give me say they give me 100,000 and I start paying them $1,000 a month. They are gonna be excited about that because that's well above the going market. Probably if you did that in a money market, you'd get three hundred and fifth 300, $325 a month
Doug:Yeah.
Keith:Rather than a thousand dollars. But if I keep giving them that, at some point, their psyche says, oh, this is legit. Right. And they're excited about it. Whereas what a Ponzi scheme does, it just gives you your own money back is all they're doing.
Keith:But you don't know that. You just perceive
Doug:they're you somebody else's money to
Keith:Well, the first the first circle, they're giving you yours until you start bragging at the cocktail parties, and then they get all your friends and relatives money. And then and I think mostly, you're gonna only get to about 60% of that. And and and so if if somebody's promising you something more than the market, I I would I mean, you can take risk, but I wouldn't put a large percentage of my money in something like that.
Doug:Yeah. So the other thing I think about time and money is, people tell you it's it's not or it is time in the market, not timing the market. And that's something that we've put to the test Right. Over the years is is can can you have influence on your market timing? And the answer is absolutely you can.
Doug:And here's a real quick example. Like, if if you had a $100,000 to invest today and we said, okay. We're gonna put it all to work today, and we're gonna put it to work, and you pick the stock. Alibaba. Don't go buy Alibaba.
Doug:I'm just picking that stock. And and it's Alibaba's, like, highest point ever in the market. That was terrible investment timing. Right? But if you were to if you were to say, hey.
Doug:I'm gonna put a little bit to work today and maybe a little bit to work in in another week, and then you start doing that over time, you're reducing your risk. You're reducing your point in time risk. There's all types of time risk associated with the market. But that said, if you do that long enough, I think you'll be pretty excited. I mean, we have several phone calls where we go back in time and say, hey.
Doug:This has actually worked. You know, you've been able to take an income off this. You've been able to buy a car off this, and and your money's still still working for you.
Keith:Man. And and and really, when you look at those things, it's it's exciting to know that you can get your money working for you, and it can it can complement all the hard work you did early on. It can provide some cash flow. And probably even as you're thinking about it, the longer you work for your money, that means the shorter it's going to have to work for you and maybe the less risk you're going to have to take. And so those variables work hand in hand.
Keith:One of the ideas that I was kind of misled in my own thoughts early on in my career is I thought, well, you know, it'd be easy to help somebody retire in their 50s. And that means to when I say retire, to quit working and live off their money. But I was talking to a friend who's a client and he started working with us in 1990. And so we're at thirty five years.
Doug:That's impressive.
Keith:Yeah. So that's how long the money had to work. And that's a long time to have your money work for you. The idea I ask people a lot of times when they're thinking of quitting working is, let's just use ten years. What's happened like if you take the last ten years and flip it forward, what's happened in the last ten years that you didn't expect?
Keith:And how would you navigate that if your money was going through that? And particularly with how much risk you have with your money in that. And so I was thinking about that this morning. The last ten years have actually been less stressful than other ten years looking back that I've navigated. But even in that, we've had something just four years ago, four and a half years ago, that they shut down our government, shut down the economy.
Keith:And who would have ever guessed that would have happened? Like, would have never guessed that ever that our government would say you can't work. And so if you flip that forward, you just don't know what tomorrow has in store. And that probably makes sense to chat with your financial advisor as, what risks do I really have Or what's really going on in this? Am I comfortable with this risk in order for my money to go forward?
Doug:I'd encourage people to give yourself some grace with time too. I actually think people have a lot more time than they realize for their money to work. So if you're saving up for your kid to go to college, it's not 18. It's 22. The stuff needs
Keith:to be done by the time he's 22.
Doug:You know? Or if you're if you're thinking of retiring, it's not the age that you flip on the Social Security switch that you need to have all your money. You're gonna be 85, 90 years old, and that money is still gonna be working for you. And so there's opportunities ahead. If you haven't got the timing right, just start today.
Doug:I mean and then realize that you probably have more time than you think.
Keith:I think another idea that I did I didn't even have jot down in my notes was there's also a rhythm of that time once you quit working, how that rhythm and time and money work together. I probably just say I quit working at 70 and maybe I go to 90. I don't know how long this body's got to go. But say it goes to 90, I'm not going to need as higher rate of return on my money at 90 as I might at 70. And taking that into account, one of our clients called yesterday and wanted a pretty almost 10% of their capital out of their account.
Keith:And they were hem haw and telling me about it. And I was kind of smiling while they were telling me what they were gonna do. They're gonna go to Sweden for several weeks, then they're going to go to in the New Year into The Philippines to meet some friends there. And then they thought, well, if we're in The Philippines, we're probably not coming this way. Again, they're pushing 70, and they're probably not gonna go that way.
Keith:And they said, don't we just go do that Australia trip we've always wanted? The younger version of me would have probably tried to talk them out of doing all that. But knowing that there's kind of a curve at which time you're probably not going to do that trip when you're 80. You might. We've got some friends that are doing that, but most people don't.
Keith:And so realizing that how long will your money work for you, that can also help you make important life decisions. You can go on the trip. You can maybe buy those hearing aids you didn't want to buy. You can do things like that realizing that this thing isn't a linear decision. There's a lot of quality things that go into it.
Doug:Yeah, it's just such a privilege to even be able to have these opportunities with our time, to be able to be an owner in something with your time. You may be working for someone directly. You you might be the, like, ten thousandth employee at wherever you're working. But to be able to be an owner in something by owning the stock market, that's pretty cool. And when you've stopped working in in your own Social Security, you're still an owner in something.
Doug:That's a big deal.
Keith:It's it's it's a lot of fun as well, you know, probably more so for you and I than maybe some of our friends who are watching. But by owning things, it's really kept me relevant to know what's going on in the world. I'm constantly learning new and new things that just I didn't even perceive were available out there. Well, I would encourage you all that as you're thinking about the relationship and time and money, to not be constrained by what other people are doing or be constrained by what you thought you were supposed to do. But I would encourage you to think differently about it.
Keith:If you find yourself that you're maybe caught in a rut of the way you think about it, give us a call over here at Gimbal because that's one of our mantras is to think differently. And maybe if there's something out there in your thought process that you've been mulling over and you just can't get through a clarity of it in your own thoughts, let us jump in the conversation with you.
Doug:And a good place to start with that is just take your age and add seven to it. And then ask yourself, what do you want this to look like? And by doing that, you'll be able to forward out and you'll be able to get some stuff done. And that's that completed year seven. Aim for seven and then do something big with it.
Keith:It's a big deal. And time and money. I think we've hammered these ideas pretty well the last three or four weeks, Doug. Anything else you want to throw out there besides the seven added to your current age?
Doug:I'd just say I encourage people to live now.
Keith:Yeah. Today is the day. Enjoy it. And in the meantime, hopefully you can not only up your average, but encourage your friends as well and let them know they can jump on these podcasts in either YouTube or any place that you find podcasts. We'd love to encourage them as well.
Keith:Have a great weekend, and we'll see you guys real soon.