Mark Newfield - Keep Going!
Album art photo taken by Mike Ando.
Thank you to Mathew Passy for the podcast production. You can find Mathew at @MathewPassy on Twitter or at thepodcastconsultant.com
Please leave us a rating in your favorite app store!
[The Business Brew theme]
Bill: Ladies and gentlemen, welcome to The Business Brew. I'm your host, Bill Brewster. As always, thank you for listening. This episode features Mark Newfield. Mark is a heck of a guy. And I think part of this show it's The Business Brew, I wanted to make it like a brew as in coffee, it's different things that go into, the output of business and investing. And I guess, the best way that I know how to describe the episode that follows is, I just have immense respect for Mark. He's a guy who has overcome adversity in his life. You'll hear him discuss some of it. He's continued to put one foot in front of the other. He's built himself a business that I could only wish that I could build for myself, and took care of his family in the process, and is very honest about what he's been through. I just so appreciate him having the conversation that he was willing to have with me. I hope that you all will enjoy it too. It's definitely not a public markets episode, but I think it's an important one.
It reminds me a little bit of the Jack Rohrbach episode from back in the day. For those that are looking for, I don't know some sort of inspiration on just how to work your way through life and end up in a good spot, I think this is a reasonably good episode for you to take a listen to. I don't think this disclaimer needs to be read, but just in case, as always none of this is financial advice. All the information contained in this program is for entertainment purposes only. Please consult your financial advisor before making investment decisions and do your own due diligence. Enjoy the episode. Thanks again for listening.
Thrilled to be joined by Mark Newfield, today. Mark, how are you?
Mark: I'm doing just fine.
Bill: Yeah.
Mark: I'm enjoying an 80-degree day in Richmond, Virginia in November.
Bill: I'm not. I am preparing to, I don't know, there's a storm that may be coming. That's not the most fun thing to deal with in November. Oh, well, it has been quite warm, hasn't it?
Mark: I read a stat this morning that each of the last eight years has been warmer on average than the warmest year we've ever experienced prior.
Bill: Well, some will say global warming is all just nonsense and some will say this is evidence of it. I will take neither in this particular episode, but I will just say [Mark laughs] it is warm and something that is interesting to deal with. So, we should plug Richmond, hell of a town.
Mark: Well, it sounds like you've been here. It really is. Having been here for at this point, 40 years, I moved here from the D.C. area. It is really just dramatically grown and changed. I believe if I read the data recently is the number two attractor of under 35's in the country with Denver being number one. Per capita has the most craft breweries of any city in the United States. It's a tremendously diverse population. Well, anyone you want to cut it, obviously has a major art school at Virginia Commonwealth and several another good university, University of Richmond. It's just turned out to be a tremendously popular place. I came down here to go to college, left for two years and then came back because my wife wanted to live here and we've just seen tremendous change.
Bill: Yeah, I've been fortunate enough to go to a couple things at Markel, and that's brought me downtown, and I really enjoy it.
Mark: Absolutely. Incredible company.
Bill: Yeah, it is. Yeah, I really enjoy Richmond. It had a good food scene, lots of good.
Mark: Yes, the number of very high-quality restaurants is way beyond the size of the city.
Bill: Yeah, indeed. I can see why people are going. Second highest is a bit. I wouldn't have guessed that. The breweries per capita remind me a little bit of Asheville, North Carolina.
Mark: It's similar to Asheville. Not quite as, let's call it funkier though.
Bill: Yeah, that's right. Yes, it is a little more buttoned up than Asheville. That's a good way to put it. Yes.
Mark: [laughs] That is Asheville in August.
Bill: Very granola.
Mark: Yes, although Richmond has some neighborhoods that I would say are very high in granola and cannabis consumption.
Bill: There you go. Well, so does Asheville. But you guys have more professional communities as well, I suspect.
Mark: I think so.
Bill: So, we connected. I think one of the things that we connected over and we've been going back and forth on Twitter for a while, but I had mentioned something about caring for my grandma and how expensive it is. This is not a new concept, but how I think that a lot of people need to consider end-of-life care and what that's going to do for family planning and then we got talking and I said, "Why don't you come on the show?" So, I'm curious. Eventually, I'd like to talk about that, but I'd like to talk a little bit about your background, and what you've seen, and how you got into what you do, and we'll take the conversation from there if that works.
Mark: No, it's fine. I've started this business in 2005. Before that, I was an enterprise software consultant for a number of years. One with a big US bank as the head of IT strategy and then before that for 14 years with, what's now, Accenture. Little sideline, started Accenture with 3,500 people. When I left in 2000, it was 90,000. It's now over 500,000 employees. I have clients there. Unbelievable company. And then prior to that I was an auto mechanic. I went to college when I was 24 and graduated when I was 30.
Bill: Wow.
Mark: So, I don't have a typical background-
Bill: No, you do not.
Mark: -for this business.
Bill: When were you an auto mechanic?
Mark: 1974 through roughly 1980.
Bill: Wow. Do you still work on any of your own cars?
Mark: Not at the moment. I gave that up about 20 years ago. But as I'm starting to work less and play more., I've suspect there will be a project car in my future. In particular, I would like to get a 1972 or 1973 BMW 2002 Tii and restore it.
Bill: I had a 71442 once upon a time. Think smelled like a boat when I got out of it. It was amazing. [laughs]
Mark: Well, they've had a lot of water leaks, those cars. But I mostly worked on European cars as a mechanic. So, I have an affinity for small fast cars in particular.
Bill: Interesting. That's super cool. Okay. So, how did you end up going into-- So, you were a mechanic and then you've looked at your life and you said, "I need a change?"
Mark: I was putting a transmission in 1959 Mercedes 190. I can tell you the day. I think every once in a while, whether this is a religious affiliation or not, I don't think it matters. You have an epiphany. I was putting a transmission in a Mercedes. It was really cold outside. My hands were freezing. My back was bothering me and I was 22 years old. The light bulb went off and I was like, "Whoa, maybe this is not how you want to spend the rest of your life." The next day, I went and enrolled at Northern Virginia Community College.
Bill: Wow.
Mark: I needed some remedial stuff because I didn't pay any attention in high school. As it turns out as you will discover probably just from my behavior, I'm pretty out there on the spectrum of ADHD.
Bill: Oh, yeah?
Mark: I couldn't sit in class, I never turned in homework, I barely made it through high school. I was told that I wasn't very smart and no work ethic. You develop a belief that you have character false. But anyway-- [crosstalk]
Bill: No, no, go a little bit deeper on that for a second because I'm dealing with this a little bit.
Mark: Okay.
Bill: How did that impact your-- how you looked at yourself or did you always think like--? [crosstalk]
Mark: Oh, I thought there was something wrong with me as a person. There was something flawed in me as a person, I was never going to amount to anything.
Bill: And look at you now. That's sucks man. You know why I'm talking about this. Something I haven't really talked about on the podcast, but my oldest kid has been diagnosed as ADHD and dyslexic.
Mark: Oh, geez, what a combination.
Bill: Yeah.
Mark: Okay.
Bill: I'll tell you what. The amount of people that I talk to in finance, the guys that I really respect are like, "Oh, he's going to be hell of a stock picker."
Mark: One of my best clients and most favorite clients is the Chief Technology Officer of a startup, it's not a startup anymore, healthcare technology company, ADHD and dyslexic. This guy, he's brilliant.
Bill: It's tough to watch because he struggles in things that I wish he didn't struggle in. But what is nice about the whole situation is, he's tested like off the charts in math and there's no denying he's really smart. It's just a matter of how his brain processes information.
Mark: It's all about processing and learning how to harness that processing. There's cognitive behavior therapy, there's medication. Without my medication, I'm not dysfunctional, but I'm a completely different person.
Bill: Yeah, I got diagnosed [crosstalk]
Mark: I don’t like medication. I would rather not take any drugs, but it was-- I'll go a little bit deeper. Here's how I found out. So, we had done fairly well. At Accenture, I was working 80 hours a week. I was reasonably highly compensated. We lived in a high-end neighborhood, all that stuff. I've done fairly well. Way better than I ever thought I would do. You probably know who Ned Hallowell is at this point.
Bill: I don't actually.
Mark: We need to read Driven To Distraction for your son.
Bill: I might have to read it for me by the way.
Mark: Well, yes, absolutely. Anyway, he had just written Driven To Distraction, which is the initial treatise on the diagnosis of ADHD. He's like the father of ADHD.
Bill: Mm. Okay.
Mark: Brilliant man. He has a great podcast, by the way. Worth listening to. But he came to my son's school on his book tour. And so, I'm sitting in the auditorium with my son listening to this man speak. He's describing the behavioral characteristics of ADHD. I'm listening to this guy and like, "Holy shit."
Bill: [laughs]
Mark: There's nothing wrong with me. My brain just works differently. I was raised like most men of my age. You never show anything. I went to the bathroom and cried. I can feel it now. I can remember that day. I went and saw my physician and he was like, "Oh, yeah, we ought to get you tested for that." A year later, I had quit Accenture and changed my life.
Bill: Interesting.
Mark: Because I was in the wrong place for my behavior set.
Bill: And yet you were successful.
Mark: I had done successfully you know Bill. if you're willing to put one foot in front of the other one every day and keep going no matter what happens, you can be successful in anything. But it was damn hard. I almost got fired a couple of times because there were certain behaviors I just couldn't change. I knew about them. I wanted to change them, but it was like this stuff would just happen.
Bill: Interesting.
Mark: I just grounded out. First of all, for somebody who is ADHD, when I started at Accenture, writing code is perfect because I can write a week's worth of code in a couple of hours.
Bill: Why? Because you get that hyperfocus that kicks in?
Mark: Kind of hyperfocus, man, hyperfocus. I wrote good code. Super logical, hyper focused, very structured. And then I goof off the rest of the day and nobody would care, because I was so far ahead of everybody else. Yeah, it sounds portentous. [crosstalk]
Bill: No, it's how the brain works.
Mark: It's how my brain works. But then when you graduate and at this point, I was an associate partner. I was responsible for $200 million revenue project, where my primary duty was discussing business arrangements and negotiating with senior executives that have very large utility companies. That was just a skill set that I didn't have and wasn't going to have. Because if somebody said something, I thought it was dumb, I would say.
Bill: [laughs]
Mark: The Chief Financial Officer of a major public company doesn't mean you're going to say smart things all the time.
Bill: Yeah, that's true.
Mark: As you know, you can be in the right place at the right time and get promoted way past your capability and you're saying a lot of dumb things. I would just be like, "That's really stupid." Well, that you can't survive in a major corporation in a significant executive position doing that. You just can't.
Bill: Yeah, that's interesting.
Mark: And so, I almost got fired a couple of times and eventually, I was just like-- Once I met Ned and I started studying this and I got some help. I was like, "You're in the wrong career." I literally quit. I didn't even have a job. I didn't know what I was going to do, but I had saved enough that I could afford to do it and I just decided I wasn't going to be miserable anymore. That wasn't going to happen.
Bill: It was 2019 and my wife was researching what she thought our child might have. She put a book on my desk and it had diagnosis of ADHD and she said, "Why don't you take this test and see what you think about yourself?" I think that the test said like, "If you have answered four of these questions at an 8 to 10 or higher, you should probably go get tested." I think I had 7 to 10. And then the ones that weren't 8 to 10, I fibbed to myself a little bit.
Mark: Great. Because everybody tells themself story.
Bill: Yeah.
Mark: [audio cut] bookshelf somewhere. We all tell ourself stories. Morgan Housel is good at describing how we tell ourself stories.
Bill: Well, I'll tell you, I was at BMO and I was a credit underwriter. And part of the job, I worked on a team that underwrote credit. I wasn't the credit person at all. I was junior. But part of the job was data entry. It used to drive me insane. I know it drove the people above me insane, how I could not get the numbers to tie through multiple systems. I'd print the stuff out and it would take me tons of time and it's just like something about the way--
I think I was pretty good at the big picture, the competitive stuff, and the things that drive whether or not you have a loss in credit. I think I grasp pretty well and I got that feedback from people above me. But the stuff that I had to do that would say like this person is really good at the numbers portion of what they need as far as inputting the numbers. I wasn't good at that, which was terribly frustrating. I don't know, it's just a thing.
Mark: It gets down to understanding what you are good at. One of the things I've learned in working for large public companies is, in their performance management systems, they're very good at identifying your weaknesses and suggesting that you get coaching around your weaknesses. One of the things I learned is, there are certain weaknesses we all have, we're not going to get better at them. We are far better off figuring out what your strengths are, and optimizing those, and just waving your hand and saying, "Hey, I'm not going to be good at this. Don't ask me to be good at this."
I've tried to run my business for the last 17 years on that. Not just for me, but for my employees. Okay, you're not good at that. Okay, do you want to get good at it? Are you capable of being good at it? These things matter more. If we then need to supplement, like Danielle as you know manages my calendar. You know why? I suck at managing my calendar.
Bill: Me too.
Mark: It's just a simple little thing. It shouldn't be hard. I screwed up every single time.
Bill: Yeah. I am in the process of hiring an assistant for this exact role. It's like, "I just need somebody that's good at doing that."
Mark: Right. It's back to the data entry of those little details, this things of, "Oh, you're in the Pacific Time Zone. Oh, we have clients all over the world. We have a client in Jakarta right now." We have a slug of clients in California. I'm just not going to remember that like, "Okay, we have an 11:00 AM meeting. Well, it's 8:00 AM for them." [laughs]
Bill: Yeah. It's really interesting how-- I don't know, I bet if we continued this, you and I would have a lot of similar issues. And then the other side is, well, I passed the bar and I passed the CFA designation. It's not as if I can't comprehend information, it's just there are certain ways-- There's something in my mind [crosstalk]
Mark: I can test like no tomorrow. I scored 99 percentiles in all the intelligence tests I have ever taken, all the standardized tests. I did the CFP exam in four months from scratch. One day, if I decide to carve out the time, I would like to go do the CFA thing just because I know it's the hardest thing you can do-
Bill: Level II sucks, Level II is awful.
Mark: -in finance. I want to do it because I bet I could pass it.
Bill: You could, you definitely could.
Mark: My team was like, when I went through the CFP stuff, they were like, "You're never going to pull that off in four months." I said, "Watch me." And then I scored 90 something plus on the exam. The firm that I was at, the managing partner at that time said, "You studied too much." I was like, "No, I just-- [crosstalk]"
Bill: Huh, interesting.
Mark: I'm able to figure out, especially multiple-choice stuff. I cannot study and pass tests.
Bill: That's interesting.
Mark: It's crazy. ADHD people in particular, sometimes have very deep certain skills, very deep. It could be really astounding. It's like your son. I bet if he's interested in being a quant and he's got those skills, he will be better at it than 99% of the population.
Bill: Yeah, I think that that's probably true. What I've heard is sometimes ADHD people tend to go to math a little bit, especially if they're dyslexic. Because you don't need to read as much. So, I don't know. We're doing a bunch of stuff to address the dyslexia. But something that's really cool is like Amazon has dyslexia font. So, the font changes a little bit now on his Kindle and the school that he's at allows Alexa to read to him as long as he's following along. So, there's a lot of technological advances that I think have-- There's no better time to be diagnosed with the stuff.
Mark: That's awesome for him. Anyway, we can go back far, if you want. My mom was an alcoholic, my father left when I was seven, I lived in a very unstructured household. There are so many factors in how my career took shape. But I put this transmission in this Mercedes, I was like, "I don't want to do this anymore." I was reading Broca's Brain at the time, Carl Sagan, about brain behavior and brain chemistry and I thought, "Okay, I'm going to go study science." I enrolled in Northern Virginia Community College in the chemistry program-
Bill: That's amazing. What's amazing to me-
Mark: -because I like science.
Bill: -is here you were as a child that thought that something was wrong with you. It sounds like your home life didn't help, which I can relate to in certain ways.
Mark: Not even remotely.
Bill: Yeah. And here you are, you decide to change it and put your life on a path. That's really cool.
Mark: [crosstalk] show you that anybody can change anything if they're committed to it.
Bill: Yeah. All right. So, you get through college, you go to Accenture, and then you quit. What did you do after Accenture? I'm sorry. I'm engrossed at this-- [crosstalk]
Mark: I didn't do anything for a year. I took my son to school every day, because I literally had not seen him on a Tuesday in nine years.
Bill: Oh, yeah. Those must have been good moments.
Mark: They were fabulous. It's crafted a relationship that-- The epiphany I had there, I was in Texas, I was at this Accenture client. It was Monday. I had a headache. Again, the little light bulb goes off. Your son is nine years old. He's growing up the way you did. No presence of a father. Now, my wife is not an alcoholic and he had a much better home life. I'd been reading things and I was like, "Kids are better off if they've two parent households." I was unhappy anyway and I just called my wife and said, "I'm coming home. I don't know what I'm going to do, but I'm coming home."
Bill: Wow. And how was she with that?
Mark: She was scared to death.
Bill: I think so. [laughs]
Mark: Because [unintelligible [00:23:38] was overhead. We have 4,000 square foot house in the most expensive neighborhood in town, and two expensive cars, and a kid going to a $20,000-year private school, all this stuff. This was 1999. But she knew I was miserable. I know she was scared, but she was like, "If you need to do this, then we're going to do it." Then I took a year off, I joined a startup software company as a head of business development that went under-- Well, it didn't go under, but I bailed out of there. I got canned by the board in 2001, actually, because we had a legitimate offer to sell the firm to Cisco for about $20 million, which would have netted the premier shareholder, probably $12 or $13 million. And I was like, "Why don’t you just take this money and do it again? But the primary shareholder had a belief that the company was worth at least $100 million and when I took that offer to the board, I got whacked.
Bill: Really?
Mark: Yeah, we have.
Bill: Huh, that's wild. So, this is what, 2001-
Mark: It's pretty vociferous.
Bill: -post the crash right and you have a legitimate offer and they still don’t like it, huh.
Mark: It was right at the tail end of the crash and they were all of the belief that the company was worth a lot more. It's actually still alive, but it's just bumping along it. When I got engaged in, what I realized now is a lifestyle business for the CEO, not grow it and sell it business. Anyway, I got canned there. I joined a large bank in the enterprise software management arena and that was the worst 18 months of my life from an employer perspective.
Bill: I don't need to laugh-- [crosstalk]
Mark: Negotiating with 41 vice presidents on how to develop enterprise software is the most miserable thing for an ADHD person ever. Just wants to get something done. I took a package from there. They paid me for two years and struck all my equity. And then they had to really seriously sit down and say, "Okay, you can keep doing this and take high level jobs and probably get fired every couple of years and do just fine." I've financially done far better than I could have ever imagined. The year that I left the auto mechanic business to go to college, go back to look at my security statement, I think I made $7,100. The year that I left the big bank, I made $600,000.
Bill: Wow.
Mark: My base comp was $300. I'm was making stupid money, but I was miserable. As it turns out, a lot of my old Accenture friends and partners were calling me for financial advice because it was my hobby.
Bill: Huh, interesting.
Mark: When I was in college, I built a Lotus 1-2-3 spreadsheet on a 2-floppy disk IBM PC that took me from 30 years old making a base comp of 20, saving 10% a year, plus Social Security, plus inflation, plus some assumption about investment returns and saying, "Hey, at 65, you can bail out on 100 grand a year after tax." I built out on my own tax considerations everything else. And so, I was getting people calling me and I was like, "Well, I can probably charge people and earn a living doing this.
Bill: Yeah.
Mark: That was 2004 and I started business in 2005. And so, 18 years later I literally sold my shares to Journey three weeks ago.
Bill: Wow. Good for you.
Mark: We built a business from scratch to about one and a half million a year in revenue, three employees, a hundred really high-quality clients that we love serving. I do what I want every day.
Bill: That doesn't suck. That sounds like the American dream.
Mark: if I don’t like the client, we don't take them on.
Bill: Yeah. What do you think-- [crosstalk]
Mark: I have people who understand my behavior set and don't get mad at me when I interrupt them.
Bill: Okay. So, let's go back to Mark starting the firm or talking to somebody starting an RIA or a financial planning firm right now. I've talked to many people in this industry that say, "Clients are the most important part." How do you balance which clients to take versus feeding yourself and knowing--? [crosstalk]
Mark: I would say, first of all, your employees are the most important part. Because if you take good care of your people, they will take good care of your clients.
Bill: Okay.
Mark: So, we are not a claim first business. We are an employee first business. Second, when you're starting out-- I would say to you, first of all, if you really want to build the business you want to build, have enough capital to not earn a paycheck for a year, so that you can be selective. If you can't do that, then you are going to take on when you need [crosstalk]
Bill: Yeah, that's right.
Mark: You're going to take on "The anybody that can fog a mirror thing," but you do need to understand what's profitable and not profitable. Because just having a client, as you know, you got to have marginal cashflow out of that client just from a business perspective. I would tell you also from the very beginning, think about what clients you really want to have, and try and make every client an ideal client. But you might for three or four or five years just have to do what you need to do for revenue. But once you get past that point where you know you're going to get a paycheck and it's sufficient, every time you have a new client opportunity, I would say to you, only take on clients that are going to fit your model and what you want and who you'd like working with. Every time you take on a client, look at your client base and say, "Should this replace a client I currently have?"
Bill: That makes sense.
Mark: Or "Should I hire another advisor to serve clients who are fine people, but not the clients I enjoy working with."
Bill: Yeah.
Mark: I definitely am a believer. I was reading Brent Beshore's, No A-Hole Rule thing. I'm a real believer in that recognizing that it's like Richard Feynman, you're the easiest person to fool is yourself. The biggest asshole is you. And so, you have to treat that first. Once you figure out what stops you from being a jerk like taking on clients that you shouldn't take on because you want the cashflow, then you can start dealing with applying that to your client base and saying, "If we don't like this person as a team, if I don't like the person, then we shouldn't take them on."
Bill: It makes sense. It makes perfect sense.
Mark: Now, what you're trying to do is build an enterprise and maximize the net worth of that enterprise, then you're going to take on all those clients if they're cashflow positive. If what you want to do is a balance of running a great business, serving people to the utmost of your capabilities and not having a big management problem, then you better be selective. If you're trying to build on the United capital that's one thing or a Buckingham. If you're trying to build a nice business for yourself that you can really enjoy. You have a completely different client acceptance process. There's no right or wrong in that.
When I was at Accenture at one point, I had a 200-person team. Managing people is not my forte. It's not the forte of most ADHD people because most of us are behaviorally insensitive. I was just like, "I don't want to manage a big crew." My team all knows it. When there's a problem, the first thing you better do is go figure out if you can solve it yourself because I'm a lousy teacher. Graded serving clients and figuring out solutions, I'm pretty good strategically, but teaching somebody how to work through a software problem, not my skill.
Bill: Yeah, that I can understand. But you've got to be a good teacher in order to have the client base that you've had stick around.
Mark: Well, I spend a lot of time teaching clients because that's a conversation build around. Hey, Bill, you got this place you want to get to, and right now the behaviors you have aren't getting you there. Can we agree on that?
Bill: Yeah.
Mark: I'm very behaviorally focused, which is odd for an ADHD person who has trouble identifying people's behaviors. But anyway, [Bill laughs] I've learned that the numbers are not how people make decisions. You know this. That's a conversation between two people who respect each other and evaluate each one can bring to the table and that's not teaching.
Bill: Yeah, that makes sense. So, what would you say. Man, what's the right way to ask this question? It sounds like the right client is someone that probably knows that they need a behavioral coach and is receptive to a conversation like that. A lot of people may not be willing to understand like, "Hey, I have bad behavior." That could upset some.
Mark: It's not a function of bad behavior. It's like your son. It's not a bad behavior. It's behavior that's not enabling you to get to where you want to go.
Bill: Yeah.
Mark: I am completely nonjudgmental. There's no bad spending. There's a reason why people do what they do. If as an advisor, whether you're a technology consultant, or a financial advisor like I am, or a psychiatrist, if you can't get down to what is driving somebody to make the decision they're making, you are not going to have any influence on a decision.
Bill: Yeah. Hmm.
Mark: I can show you with a spreadsheet that this is the best way to do something. Most people's eyes are going to roll. Your son maybe not. But most people's eyes are going to roll. But if I can say, "Hey, by the time I'm 50, I want to be at a point where I just don't have to worry about my money." First thing I'm going to ask you is why. If we can get to, "Hey, by taking this set of steps with some reasonably average set of market behaviors, we have a 90% chance of getting there and that can allow you to go do." Maybe you just want to do philanthropic work, maybe you want to start another business, maybe whatever that driver is, we can get you there. You can at least listen.
Bill: Yeah. It seems as though it would make sense to-- I'm thinking of Tony Robbins. You got to associate some pain with the current behavior and associate pleasure with the reward that you're going to.
Mark: Very true.
Bill: Yeah, it makes sense.
Mark: Very true.
Bill: Those I think would be really fun conversation. Sometimes, I think my little subset of the world gets so caught up in which equity is the best equity to own.
Mark: Yes.
Bill: I think sometimes I personally lose perspective of the larger stuff that matters.
Mark: Well, you know what, Bill, that's your expertise and that's where you want to focus and that's completely okay. For most of our clients, the bigger factor is consistently saving enough. There are small cap guys that do very well, there are large cap guys that do very well, there are guys who are short that do very well. All of those strategies can work, but you have to deploy your model consistently. And so, consistency to me for our clients is far more important than which particular investment strategy we go with.
Now, we try and be intelligent about that. We have to be good about managing money. If we're consistently charging a fee and expenses over and above what our clients are earning in the marketplace, we're not going to be in business on the investment management side. Now we charge a flat fee for planning, those are separate fees because they're separate services. But we have to be reasonably good at it. I'm far more concerned with getting you to your goal than I am did we make consistently a 100 basis points over and above our costs.
Bill: Yeah. You've seen 2001, you've seen 2010, are we like the next decade of--? Every 10 years, there seems to be some real pain that comes. How do you, I guess, manage risk through a period like this and does it remind you of anything else or is this sort of unique? Just curious how you're thinking about it.
Mark: Actually, it reminds me most of 1973 and 1974. That's what it reminds me most of. I was very young then. I was 16 and 17. But look at what we had. We had Nixon, we had massive inflation, we had two years of the worst equity markets that we'd seen since the 30s. My dad who has a Master's degree in econ, pretty rare for a World War II vet was out of work for 24 months in D.C. in a very stable employment market. So, it feels to me a lot like that and it's funny, yesterday, I read an editorial piece that this election is not about the end of democracy. And then today, I read another opinion piece that says this election is about the end of democracy. I think that this is something from which we will recover. I think if it was 1864 you couldn't tell me that this is worse than 1864. You couldn't tell me that or 1857. As far as I can tell, we're not splitting the United States apart.
Bill: No.
Mark: As far as I can tell, roughly 60% to 70% of the population agrees on a number of things. They just don't vote.
Bill: Yeah.
Mark: And not enough people vote to get those things done, which is another issue. I'm not saying we don't have issues. I think this is all recoverable. I think that our history as a country is recovering from things that we thought were going to kill us. And so, I'm positive and I'm a big believer financially whether the market seems horrible or awesome. Keep saving. Do it consistently. ignore the day to day. Ignore it.
Bill: It feels that is almost negligent to do, but-
Mark: Yes, it does feel negligent.
Bill: -I think it probably is the right thing. I know, especially for people that follow me on Twitter, I was looking at, I don't know, let's call it five months ago, how strong the economy was. And thankfully, I opened my ears when people-- [crosstalk]
Mark: 3.7% on employment, since when have we had that in recession.
Bill: Yeah. But people said that's how it always looks at the top and whatever. I think there was some merit to that.
Mark: True. Yeah.
Bill: Now, I feel myself scared of where we're going, because I am worried about rates increasing this far this fast. You stop housing and I don't know how many people are going to buy cars with 7% rates or whatever. I'm a little worried about this next 18 months.
Mark: I hear all that, bill. But you're 40, right? People were buying cars when rates were 13% and 16%.
Bill: Agreed.
Mark: My [unintelligible [00:41:07] was at 13.375% mortgage. The loan was $130 grand.
Bill: Yeah.
Mark: That loan payment was $200 a month less than the loan I have right now, which the original principal was $455,000 at $208.
Bill: Yeah.
Mark: It's all a matter of perspective in my opinion.
Bill: I think that's right. I think as far as housing and whatnot goes, people buy payments. They don't buy a price.
Mark: Correct.
Bill: As long as there's not a fixed forced selling situation, we should be-- [crosstalk]
Mark: That is the issue. One of the harder questions you asked me is, how do you manage through this? We are a very firm believer in a cash reserve significant enough if you're not working to get you through three years of negative market. We don't all keep an account. We're putting T-bills right now, right? It's where my own cash reserve is. We vary that depending on what the market looks like. If you're working a cash reserve that would get you through a year's worth of unemployment and pay your core bills.
Bill: Yeah, that make sense.
Mark: We've always been a firm believer in that. If I'm doing your financial planning and you don't have that, that's my very first recommendation. I don't want to do anything else. I don't want to do debt reduction. I don't want to do anything else until we have some cash in the bank.
Bill: That makes sense. Managing liquidity first.
Mark: It's all about liquidity. As you know, all these real estate investors who went under in 2008 and 2009, they were over leveraged.
Bill: Yeah, that's right.
Mark: All the construction companies that went under, they were all over leveraged. They couldn't pay their bills. I don't care what your balance sheet looks like or what your P&L looks like, if you've got negative cashflow. Nothing else matters. So, we're same with our clients. We focus on positive cashflow and liquidity to get you through the worst times because the worst times happened. We just don't know when they're going to happen.
Bill: Yeah, and the other thing is, it seems to me that the complicated thing of it all and by it all, managing investments and whatnot is, by the time that a lot-- the average, I think the books support this. I don't want to spout false narratives. But by that time, the average person gets worried, the market has already priced that in. My thoughts today are probably six months late, right?
Mark: We all are.
Bill: The question is how we're [crosstalk] now and what does the next 18 months look like?
Mark: I know Mr. Tetlow would disagree with me. But the forecasting hall of fame has effectively zero members.
Bill: Yeah.
Mark: Anybody who was good at forecasting this and figuring out market direction, they'd be a gazillionaire. They'd have all of our money. I'd give them my money too.
Bill: Yeah. I think that there are some people that have been-- I've seen some people that call it right or whatever. But I think the ability to do it consistently is-- [crosstalk]
Mark: Not consistently.
Bill: That's right. Yes. And then you make a call and then you market the fact that you made the call forever and then that's how the financial industry works.
Mark: That is how a lot of people build up billions of dollars of AUM.
Bill: [laughs]
Mark: They got lucky ones.
Bill: Kind of ridiculous when you think about it. Steve Forbes once said, I'm almost certain it was him. Sometimes things I hear and at least my mind thinks I remember them like a steel trap. Maybe I'm misattributing it. But I'm pretty sure he said, "You make more by selling financial advice than following it." I always think that's an interesting comment coming from him.
Mark: Oh, I think that's true. What I've tried very hard to do is, I have a very small pool of fun money. That's the only dollars that deviate from an asset allocated strategy that is mostly passive with some active tilts in it. Because I know that passive and active are both cyclical, all you have to do is look at the data. Anyone of them can be very right or very wrong for a long period of time. Eugene Fama has shown that you can be wrong for 10 or 15 years and still be right and I have this little pool of fun money where I make those little bets. If it gets exhausted, I have to decide to refill it. It hasn't gotten exhausted yet, so been right enough.
But I follow my own advice. My cash reserve is because I'm closer to the end and the beginning is two years of dollars set aside in T-bills right now and in T-bill ladder. The rest of my money is in a 70% equity strategy that is 90% passive and 10% active and I don't even manage it. Our Chief Investment Officer manages. I do the same thing for my own planning that I do for clients.
Bill: Is the active part like a value tilt or factor tilt in some way, shape, or form?
Mark: There's a tech sector tilt right now, there's a factor tilt in there, there're all these little 2% tests.
Bill: Yeah, that makes sense.
Mark: There's a diversified commodity still. Not gold, not silver, diversified commodities. That's his job to figure out. We have to CFAs on our team, that's their job.
Bill: Interesting. I like that. That sounds very rational to me.
Mark: I run my own plan every single year and I have my associate advisor review it because I make the same mental errors that everybody else does.
Bill: Yeah, that's nice to have somebody that's your check. That's what I'm finding throughout my life. I need little checks all over the place.
Mark: We all do. There are very few professional athletes who are self-coached.
Bill: Yeah, that's right. I have-- [crosstalk]
Mark: There are some. There are some, but very few. There were very few senior executives who operate without an executive coach. What makes us any different? I look at it and say, "I have the financial lives of round numbers, a hundred families in my hands. I better get some outside advice." I have a coach and I have had for a long time.
Bill: Yeah. How'd you think about building your team up when you were starting?
Mark: I don't think I was just thoughtful as I really could have been, but I got to a point where I needed administrative help. So, we started there and then I realized that it wasn't so much the administrative, because I'm very planning focused. In 18 years, I've lost two people. One I fired, one quit. My employee tenure right now is 15 years, 13 years, and 2 years just because we added another person two years ago. I feel pretty good about process. But the way most people think about it is the first thing you need to do is get administrative support, so you can spend more time selling and working with clients. I don't know that I would do that again today, but that's what I did. And then that person didn't work out, fired or replaced that person with somebody that I wanted to groom into being a full-time planner, so that I could really focus on being with clients.
Bill: Okay.
Mark: And now, it's Melissa Clark. She's been with me. Well, first, I hired Angela, who I hired as a part-time person to process insurance paperwork, it's almost laughable these days. And so, she took on some of that administrative stuff and she was a returning-to-the-workforce mom. She's now a certified financial planner and my senior associate advisor. If there's anything I'm proud of, it's seeing her development.
Bill: That's cool.
Mark: By the way, I didn't hire all women on purpose. It's just where the talent was. Then we hired Melissa to be our full-time planner. And then we hired Danielle because we needed effectively a chief operating officer, because of the way we had grown. And then we grew another 40% over the last couple of years and I was like, "Okay, at age 64, you're going to build an enterprise again?" No, I started looking for a partner and that's how I got to where I am.
Bill: That's cool.
Mark: But process wise, I've always put the person first. What is it that you want to accomplish? What skills do you want to develop? How do you want to live your life outside of here, not inside of here, outside of here and how can we bring all that together? We've been through various things. Both Angela and Melissa have had some difficult times in their lives as we all have. There have been periods in our lives where I have told them not to come to the office until they feel they can focus on their work and we just figured out how to backfill their work for that period of time. The person is always first, always. Hard to do that in a 50,000-employee public company. You got all these HR rules and things. I don't have any rule other than I want my people to be happy and to feel good about being here. Whatever we need to do to make that happen is what we will do.
Bill: Who's been there for 15 years, Angela?
Mark: Angela. Yeah.
Bill: Yeah. So, how long did it take you to find her?
Mark: A couple of months. She was a referral from another advisor's employee.
Bill: Yeah.
Mark: I don’t remember the day. We went to Panera on West Broad Street here, and sat down to lunch, and I shook her hand and looked through the eye and said two or three words. I'm like, "I'm going to hire this person-"
Bill: Really?
Mark: -in the converse. Oh, yeah.
Bill: Huh, you just had that gut feel.
Mark: I had that gut feel. We obviously had some conversation and everything else. But for me, it was the gut. And then a couple years later, we heard Melissa, who was also a referral from another advisor's employee, was one of her sorority sisters. I remember talking to her on the phone because she was still in college and I was like, "Wow, this woman is amazing." And then my wife and I drove to Longwood, which is where she goes to school [unintelligible [00:51:48] interview her in person. And again, it was five minutes and I was just like, "This is done."
Bill: Wow. That's cool.
Mark: I've been very, very fortunate. But I think I put a lot into the development of our folks and it shows.
Bill: Yeah, I think anytime any relationship can last more than-- I don't know, I think two years you can fake it with people, but you get longer than two years, it requires a real relationship build.
Mark: It does. You need a real relationship because stuff happens. It is a couple of years back and I'm not going to cite the person, but one of our folks and I had I would call a real knockdown, drag out. If they hadn't turned up the next day, I told my other employee at the time, this might have been it I don't know. But it wasn't, we worked it out. I think we both took some things away that were like, "Okay, this--"We have to change some stuff, both of us. It was a knockdown, drag out. I was like, "Okay, I really put my foot in my mouth here."
Bill: [laughs]
Mark: But it was something I needed to say and I couldn't sit on it anymore. I might not have said it the right way or maybe I did and it just wasn't received the right way. It doesn't matter. The ability to work stuff out is what matters.
Bill: Yeah, I think that's true throughout life.
Mark: Yeah, it is.
Bill: Empathy goes a long way in those kinds of situations.
Mark: It does and I'm still learning about that. I've been engaged with the folks at shaping wealth and they do a thing called rigorous empathy, which still blows me away about all the things I have left to learn if I so choose.
Bill: Are you going to choose? I think you probably choose. You seem like a guy that's very into self-development.
Mark: I will tell you the day that you stop learning is the day you start dying. I have no intention of dying yet. I don't get to control that, but I'm not going to do things intentionally that will lead me down that path.
Bill: Obviously, no one has control over that, but I think that attitude keeps people alive. I watched my grandfather. When he was 80, he really got more curious and softer, which I don't know that that's common. But my perception is that it reinvigorated him and that was cool to watch.
Mark: Well, I have six books on my desk right now. I'm usually reading three at a time which I am at the moment and then I've used one for a daily meditation, which is how I start my day. But I have always enjoyed learning and reading and that's how I learn is by reading, some people are visual, some people are experiential, I'm a reader and I'll do that until I can't read anymore.
Bill: Then you'll have to listen to podcasts. [laughs]
Mark: Well, I do that too while I'm working which drives Angela crazy. She's like, "I don't know how you do that." I'm like, "I'm ADHD, I can do that." [laughs]
Bill: I read an article. It's said like, "My brain feels there're too many tabs open." And sometimes, I feel like that.
Mark: There are times when I have to shut things down, but for the most part I have a podcast going which is how I ran across yours at any given time. Right now, what was I listening to before we get started? I'm listening to Christine Benz in The Long View. I listen to Choiceology, which is Katy Milkman, Kitces and Carl, which is a big thing in my business, Daniel Crosby, Standard Deviations, yours, Infinite Loops, which I know you know O'Shaughnessy's, amazing.
Bill: Yeah, Jim is way smarter than I am.
Mark: He's way smarter than everybody. Shane Parrish in The Knowledge Project, I like a lot.
Bill: Yeah, Shane has good work.
Mark: For contemporary stuff, I listen to Odd Lots.
Bill: They are so good. Every week-
Mark: They are amazing.
Bill: -they're doing something that's very legit.
Mark: I don't know how they do it. You can, again, get bound up and all that stuff, but it's interesting.
Bill: Yeah, I really like them. I don't know, I got to get them on the show just to talk to them.
Mark: That would be pretty incredible.
Bill: Yeah. I don't know if it's better to do an interview with both of them or one on one and kind of cross reference I'm not sure, but it'd be fun if they're willing. It amazes me how they just do such a good job at hitting this week's big event or something like that. They're very dialed in, they get it done quickly, they get it out quickly. It's an excellent podcast.
Mark: They're amazing.
Bill: I got to figure out how to get this out in a more timely manner, but also not. I don't know, there're weird things about podcasting. One of the things that bothers me about some of the podcasts that I've listened to in the past is it starts to go down this path of, I have to book a guest because I need something to come out. I've found some of the podcasts get a little bit stale after a while and that's what I want to guard against.
Mark: Looks like your client selection process. I would tell you and I'm not a podcaster. I don't have enough focus to do that. I would tell you to go down your area of interest like your grandma and care. We haven't gotten to that yet, I'm sure we will.
Bill: We got to get to that.
Mark: But to go around your area of interest. If you're interested in it and fascinated by it and you get a decently intelligent person, you're probably going to have an interesting conversation.
Bill: Yeah, that's right. Well, you end up in stuff like this. I've loved every minute of this thus far. So, let's get to the actual thing that I said that we would get to. It has amazed me how expensive it is. Now, my grandma, she can afford it and she wants to be in her house. Those are her wishes.
Mark: So, the two most expensive, they're the two biggest drivers of cost.
Bill: Yeah, that's right. I have seen other family members that are in less fortunate positions. I think one of them had to spend basically everything before the state would help them out.
Mark: That is correct.
Bill: It's like one of these things that how do you think about, I guess, obviously early as possible, but I guess I have two questions. When should people start thinking about this and part B of that is how much should they be thinking that they're going to have to spend? And the second question is, when do you think the appropriate time for children or grandchildren to approach the subject with their parents or grandparents? How do you do that?
Mark: These are very difficult conversations. People as they age get very attached to their independence.
Bill: Yeah.
Mark: They know consciously or subconsciously that they're losing it. Independence, not necessarily losing it. Although you either generally don't live long enough or live too long, very few people look up and say, "Okay, today's the day for me. My brain is starting to go out. I don't know that my money lasts forever. Would you please take me today?" That's not how it works. So, to answer your question, I think the time to be thinking about it is at the point in your financial life, just your financial life, where you can say, "Hey, look I have a reasonable expectation that I'm not going to be poor, that I'm going to have some set of assets and income that I can live decently the way I want to live for as long as I might so choose." Because now you have something that could be exhausted and that's at risk. As far as cost goes--
Look, the average long-term care stay in the United States is around three years and it's around two years for men and around five years for women, something like that. The problem is it's a barbell problem. People go for two weeks and die, people get Alzheimer's and live for 10 years. And so, the average is meaningless from a planning perspective. By the way, your family medical history isn't all that helpful either, although mental health issues tend to run in families. The problem is you can get early onset Alzheimer's at 50 or some other dementia or you might be like my dad who's 99 and very, very cogent.
Bill: Good for him.
Mark: Yes, crazy. It's a significant planning problem. But when you start thinking about it, I think is when you get to the point where you're like, "Okay, I'm probably going to have enough money to be okay." Because if you have enough money to be okay and then you add on three years' worth of 120 grand a year in today's dollars, inflated 30 years out at the inflation rate of medical costs 5% to 8%, now, you have a very significant financial hit when you're 80. So, if you just have enough, you no longer have enough. Now, if you are okay saying, "Hey, if I burn it all down and end up on Medicaid, I'm okay with that?" That doesn't matter, not a planning problem. Or, if you are okay and I would want you to have this discussion with your children saying, "Hey if I burn it all down, you're going to take care of me, right?" And they say, "Okay." Then you don't have a problem. Anything else? You have a statistically significant problem.
Bill: Yeah.
Mark: Because there's a very high chance that you will live too long and that chance is getting higher every day. You look at our medical care, the stuff that used to kill us just disables us now.
Bill: yeah, it's a problem.
Mark: My mom lived for four years with pancreatic cancer. It never happened 30 years ago.
Bill: Yeah.
Mark: My painful example was my mother. So, right or wrong, my mom was a big believer in the state and the state will take care of me and never saved any money. She worked for the District Columbia, she had a pension, she had a small chunk of Social Security. Here's the other thing. She had four siblings, all four of them were dead before age 60 from cancer. My mom had a lung removed when she was in her mid 50s, breast removed when she was late 50s, she was like, "I'm just not going to live. It doesn't matter." She retired at 65. By the time she was 75, she was effectively broke and it was painful. It was the day she died, she had $13,000 in the bank. We'd been supplementing her income for a number of years. I can tell you that people will see you and think you're doing pretty okay in life. When you're spending 60 grand a year putting your kid through college and another 60 grand a year supporting your parents, you got to make a shitload of money.
Bill: Yeah, that's right.
Mark: Even then you're at breakeven on a cashflow basis. But anyway, it's a little aside. I've been through that sandwich thing. It's tough. These things happen. My dad is 99. When he was 82, he became a planning client of ours in my second year in business. His advisor had him 100% equity invested selling covered calls to generate income.
Bill: Oh, Jesus.
Mark: Correct.
Bill: Oh, my gosh. [laughs]
Mark: This was 2006.
Bill: Oh, man, that is terrifying.
Mark: We did a cashflow analytic and figured out that if we annuitized half his portfolio with a single premium immediate annuity, we could lock in his income and leave the rest of his portfolio invested which we ratcheted down to a 70:30 portfolio, because he had all the cashflow he needed coming from Social Security, a pension plan, and an immediate annuity that we bought to generate income from. So, we created this rock-solid pension.
Statistically, he should have been dead about six years later. It's 17 years later, his portfolio has now tripled in value. So, it's 50% higher than it was. He's got all his income coming in. Now he's starting to think right. He would have modeled going forward. He would have been out of money in 2010.
Bill: Wow.
Mark: 2008 mark, it would have wiped him out.
Bill: Yeah.
Mark: He's cashflow neat, it would have wipe about. He'd be on Medicaid now.
Bill: I don't know where we're going, but that's part of what worries me now. Who knows what the next two years are?
Mark: Two different examples. One, did some planning-- My dad was not wealthy. He's definitely wealthy now. He has excess capital of over a million dollars. His money he's never going to spend and he has all his income flowing in. So, for me it's impossible that he can ever run out of money. To me, that's wealth.
Bill: Yeah, I agree with that.
Mark: When you got $100 million or $1 million, it doesn't matter.
Bill: Yeah, that's right. That's how I look at it too.
Mark: My mom, completely different. Just assumed that everything would be okay. For the last six, seven years of her life, it's actually pretty miserable. She lived to 89. She lived to 89 and nobody in her family made it past 60. Both of her parents were alcoholics.
Bill: What was miserable about it? Did it impact your relationship with her? Was it just miserable for her?
Mark: Oh, gosh, yes, it was worse for her. So, every Tuesday, she would ask me for her car keys. That happened for four or five years. But more than anything, the most miserable part for her was saying, well, basically understanding that she's broke and she's like, "Well, you guys are going to take me in, right?" It was her assumption. Never asked us about it. I went back and I talked to my wife and I said, "First of all, I'm not willing to do this. Let's understand that my home life was nothing positive. I was wanting to do certain things, but live with my mother in my 50s, oh, hell no."
Bill: [laughs] I value my marriage a little bit too much. Thank you very much.
Mark: My wife was right there with me. She was like, "If your mother moves in with us, it'll be a disaster. We just have to figure something out." So, we started writing checks. She hated taking the money. At that point in time, my son, very bright young man got admitted to Hopkins. Well, living expenses, tuition, everything else was 80 grand a year. When was this? He was 19, it's 12 years ago. I wasn't earning what I'm earning today and it was extremely hard. I basically had to make about 400 grand a year just to break even.
Bill: That's tough.
Mark: And with no savings. When stuff happened, we had to dip into our emergency funds. It was brutal. I was 32-- [crosstalk]
Bill: Yeah. Do you think it helped you in a way build the business that you built? I'm not looking for a silver lining here, but I wonder if it was some motivation.
Mark: Certainly, it made me very aware of how important catastrophe planning is in financial planning. I'm not a life insurance or insurance sales guy, but there are situations where you absolutely need to own life insurance, disability insurance, for some people long-term care insurance, although the value prop there is not great anymore because all the companies got killed in their underwriting. You need to understand what your universe looks like if a catastrophe happens because they do happen.
Bill: I sent a presentation where it was a long-term care insurance. I guess, I don't know, I'm going to mess it up, but I think that you could buy it. If you needed it next year, you get 3x the value, but it only compounds at 3% or 4%. It seemed one of those things that if you need it quickly, you're probably NPV positive and if you don't, then it's probably a negative.
Mark: It is maybe breakeven when compared to an investment strategy. The problem is life insurance is the same way.
Bill: Yeah.
Mark: If you need $5 million tomorrow because you die too soon, saving 100 grand a year to build up a $5 million early death cash reserve is going to take a while.
Bill: Yeah, that's right.
Mark: So, which risk are you more comfortable with? There's no right or wrong in that.
Bill: Yeah, how are you playing it?
Mark: Yeah.
Bill: I think the other thing that's really important or that I've learned is, I'm thankful that my grandparents took care of who's got the power of attorney, who's got the--? It's not just-- [crosstalk]
Mark: Oh, that stuff is absolutely crucial. You need a power of attorney when you're 18 years old.
Bill: Yeah. Why is that?
Mark: Guess what, you go to college, something happens to you, your parents don't have power of attorney, they can't make any decisions for you. They got to go to court.
Bill: Hmm, that I had not thought of.
Mark: And the worst estate planning thing I ever saw happen was a gentleman who was in a coma was clear that he was not coming out. No estate plan. He apparently had told his daughter that he wanted the plug pulled. He either didn't tell his wife that or she didn't want to hear it. And mom and daughter are in court against each other.
Bill: Oh, God, [crosstalk] guys. You got to be kidding me.
Mark: To decide what happens with this man's life.
Bill: Oh, my God, that sounds awful.
Mark: Yes, correct. So, I would tell you, the number one component of any financial plan is an estate plan.
Bill: Yeah.
Mark: Because stuff happens.
Bill: Well, I told my kids if I become a financial burden and I don't know what's going on, they can do whatever they need to off me. It's fine.
Mark: But then it needs to be an illegal document. And then you might either move to Colorado or some place that allows that to be done legally.
Bill: Yeah, that's right.
Mark: But okay.
Bill: It's kind of sad. I don't want to overstate the condition that my grandma's in. But this is the woman that was my hero growing up. We played golf all the time, she played tennis all the time, and now she has moments of joy, she is lucid half the time. She's there, but man, if I were in her condition, I would be hoping that it didn't go on for very long. It would be probably the best way to say it.
Mark: She may or she may not. I will tell you that I've had more than one client and my mom too tell me, "I don't want to live this way." And then when it came to the point where they're actually dying, they fight like hell. Nobody really wants to die in my experience.
Bill: Yeah. I think that's right.
Mark: Nobody. And I've said that too. I don't want to be in cognitive decline. But I will tell you this. Whatever your wishes are, you need to leave that in an appropriate legal document. There should be complete clarity because like my brother, I think if he had control, he would have kept my mom alive. We didn't. Let me be clear. We didn't kill her.
Bill: Yeah. no, I get it.
Mark: But she had a very severe ankle injury and she was bedridden. She got to a bed and her ankle exploded. I've learned something about this. People say, you get osteoporosis and your femur breaks and you fall or you fall and your femur breaks. What happens to your femur breaks, then you fall. So, her ankle exploded when she was getting out of bed and she just never really recovered and she was in a lot of pain. And again, with appropriate medical advice, she went on a morphine drip. After about eight days, she passed away. But she fought, even at the very end she did not want to go and she had cognitive issues, she had physical issues, she had cancer.
Bill: That's tough man.
Mark: And fortunately, because I'm an advisor and at least I could get my parents to listen to me, she had appropriate legal documents and we had that control. But I don't think my brother would not have been in agreement with it.
Bill: Yeah, it's tough to watch.
Mark: But he didn't have control. He was mad at me. He called me, it was like, "How could you let this happen?" I'm like, "Well, it's what our mom wanted to have happened, whether I agree or disagree that's what she wanted."
Bill: Yeah. Is this a conversation that people avoid having because it's uncomfortable?
Mark: Sure.
Bill: So, how can people potentially make it less uncomfortable? Have you cracked that nut?
Mark: I think a rigorous empathy approach to steal Joy Leary's work is the way to do this. I think for me, because here's a conversation I had. My father was married to a woman that was only six years older than me. They were living in Florida and she got a glioblastoma and died. Now, she was the one that was supposed to be caring for him, live a long time. That was their deal. Look, they've been together a long time. They loved each other. So, he's down in Florida, been independent his whole life. This is four years ago, maybe five. Very independent, grew up destitute in New York City, got drafted, ended up going to University of Oklahoma and the GI Bill, made his own way and variety of things very, very independent. Pugnaciously independent. But he's down in Florida. I'm flying down there every other month to take care of stuff. My wife is going. Between my wife and I were going there every single month. I had to have this conversation with him and he moved to Florida from D.C., he hates cold weather.
Richmond is not cold, but we have 20, 30 days a year when it's cold and finally, I let this percolate, giving you an example of how to have this conversation that worked for us. I was down there and I was like, "You know Dad, I think you recognize that one of us needs to be down here a couple of days a month to take care of stuff. You're not as mobile, very cogent, very sharp, still does the New York Times crossword, amazing brain." He hadn't grocery shopping like in 20 years. So, there are things that we are taking care for you that that's probably going to keep on going. He had gotten very lonely. I said, "We're not moving to Florida. That's not going to happen." So, I just let that percolate. There's a very good facility here, Westminster, Canterbury that he had visited before and he liked, but he's just like, "I can't deal with the weather." And so, I let that percolate.
Then he called me one day and said, "You know, I think I need some alternate living arrangements." I said, "Great, why don't you move up here, we'll get a place for you in Westminster, Canterbury. It's three quarters of a mile away, you can maintain your independence. But when you need help, we'll be here." And so, I could have gone because my wife and I were talking about for three or four months. "Hey, your dad, we got to get him out of there." He can't really function down there and he's lonely as hell. He was losing weight, all the signs of depression. I could have gone down there and said, "Hey, we're moving into Richmond. Come on, let's roll." He would have punched me in the nose and said, "Oh, you don't know. I'm not doing that."
Bill: [laughs] Yeah, you got to let him think it's his idea.
Mark: In your very best, Samuel Jackson, "Oh hell, no!" So, we let it percolate. What I would say to you is, you need to think about framing that conversation of, can we understand it, can we agree that we all care for each other? We really care for each other. We want the best for you, you want the best for us. Is your life working the way you want it to work right now? Can you live the way you want to live? Are you comfortable with how this is going? "Oh, no." Okay. Can we talk about alternatives? I'm not saying say make a decision, talk about it. It might take six months or a year but you got to get the conversation on the table transparently.
Bill: Yeah, that's why when I sent out the initial tweet, I said like, "If you're under 50 or whatever." The reason that I said that is not because like your parents at that stage or-- it's not an imminent thing. But it's like give yourself time to have the conversations and space around the conversations and your parents or grandparents, the time to think about what's going on. And I love how you said, "Are you comfortable with where you're at" and then just play the game with somebody like, "Okay, well, if we fast forward five years, what does that look like and where do you want to be then?"
Mark: Right.
Bill: Having the conversation when everybody is still able to be rational about it and then revisit the conversation down the road and say, "How are we doing now?" I remember when my grandpa was dying, he looked at me and he said like, "You got to take care of your grandma." And I said, "I know and I will." Saying I know and I will has been a lot different than living it and-- [crosstalk]
Mark: Oh, hell yeah. And what a burden to put on. "Hey, Bill, what a burden to put on you."
Bill: Nah, they took care of me. They're not the only reason, but they're a significant contributing factor to the reason that I am half okay. So, I'm happy to do it for them. But yeah, it's just been interesting to watch and it has not been as we planned.
Mark: I get that. One way to frame that up is, "Hey grandma, I want to be the one that can help you live your very best life."
Bill: Yeah, that's right.
Mark: "Based on what's going on today, and what I've learned, and I've been studying this, and trying to figure this out, here are three or four alternatives that I see as you continue to age."
Bill: Yeah. Something I think that can be embedded in the conversation too is not from a burdensome perspective, but it's taken a lot of my time recently. We had somebody that was helping us out and he left. So, I've had to take over a lot of stuff. I do think there's a reasonable conversation around. If you do want to stay where you want to stay, what does that do to my life and how do we have to plan around?
Mark: Yes, absolutely.
Bill: I think that's a very fair part of the conversation to have.
Mark: Hearing for people in their home when they become either infirm physically or mentally is very challenging and very expensive.
Bill: Yeah, that's right.
Mark: You can easily spend $15,000 to $20,000 a month.
Bill: That's right.
Mark: Easily and more. And you can easily go through several million dollars if it's prolonged. I own a pretty good slug of long-term care insurance. Now, I bought it 12 years ago when you could buy different products that you could buy today. I don't know that I would buy it today given my own financial condition. But I did that because when we were going through this with my mom, my wife looked me right in the eye and said, "We are never going to put our son in this position, never."
Bill: Yeah. That's what I'm thinking too. That's what this is all-- [crosstalk]
Mark: And so, we bought it. I'll keep it because at this point it's actually very cost effective because of when I bought it. But my son knows what his responsibilities are and he also knows that whatever burden he chooses to take on will be a choice, not because he asked him.
Bill: Yeah, that's exactly how I want it to be. I'll tell you who's going to take care of me is the kid with ADHD. That kid's got a heart. The other ones, we'll see. I don't know.
Mark: [laughs]
Bill: We'll see.
Mark: He's probably going to be a hedge fund gazillionaire too, but okay.
Bill: Yeah, we'll see. I don't know. Right now, he wants to be a cop. I just hope he's happy, man. It's wild. The longer-- [crosstalk]
Mark: Agreed. My son is a nurse and he's going to go back and become a nurse anesthetist. He has a creative writing degree from Hopkins. He's a brilliant man. Maybe he'll get published, maybe he won't, but he's happy and that's all it really matters.
Bill: Yeah. Really, it's all that matters once you had-- I don't know. At least for me once I had kids that's all I cared about. And now, coaching new sports. I do care a lot about that.
Mark: [laughs]
Bill: It's been fun.
Mark: Yeah, it's funny how children can be such a test though, because I'm very active, my wife was a college athlete. We both love all kinds of sports. My son hates sports.
Bill: [laughs] That's the way the world goes, man.
Mark: And he's very physically talented. He played sweeper in high school one year and they begged him to come out for the team next year and he's like, "No."
Bill: Interesting.
Mark: He runs six, seven miles a day, he's very physically fit, and he's very powerful. He wrestled for five years in high school because he had to participate in sport in his school. But the minute he could get out of it, he was like, "I'm out of here. No." He doesn't watch sports, he doesn't care about any sports. I have season tickets to one of the very best college basketball programs in the country here at Virginia Commonwealth. The gym is amazing. He fell asleep at a game.
Bill: [laughs] Is this when they were really good too? What was it, Shaka Smart, wasn't that the coach?
Mark: Yeah. Well, they're still really good, but that was when Shaka Smart was here and they were top 15 team, fell asleep at a game. There're 8,000 people in this arena screaming. He's snoozing in the chair.
Bill: Oh, that's funny. People are different.
Mark: Everybody's different. It's made me become very accepting.
Bill: Well, that's interesting, man. I've really enjoyed this conversation. I'll follow up offline for some of these topics. It's been a joy getting to know you. Where can people find you and contact you and whatnot if some of what we talked about triggered their mind and they want a further discussion where should they reach out to?
Mark: I'm available virtually at every medium. I like to give people the opportunity to talk to me however they want to talk to me. So, you can catch me @mjnewfield on Twitter. I have a LinkedIn profile, that's Mark Newfield. Email is mnewfield@journeysw.com. I have a phone. If anybody wants to use it, 804-525-9741.
Bill: It's an antiquated concept. Picking up the phone and calling somebody, right?
Mark: Some people still do it, but I will tell you this, if we are communicating with a client and there's more than two iterations and there's clear, there's not an understanding, we either Zoom or phone bang.
Bill: I'm the big phone guy.
Mark: Whatever.
Bill: I love the phone.
Mark: There's no context in email, there's no context in text. I think as you know, I'm pretty snide. You look at my handle, Snarky CFP. And people can take things the wrong way or in a way that I didn't intend, they took it the way took it, it's their perception. So, there's something about voice and face that will be hard to replace.
Bill: Yeah, I could not agree more. I think the phone avoids many, many arguments that are needless. Boy, it's easy to-- [crosstalk]
Mark: Or creates an argument that needs to be had.
Bill: Yeah, that's fair, that's fair. I find it's very easy to get angry behind a keyboard and when you're talking to somebody. It's usually a lot around.
Mark: Oh, gosh, it is. It's one of my rules on Twitter. I never respond negatively anymore to anything. I might send out something that I think is an alternate view of it, but I'm not going to tear somebody up and say, you're dumb as a rock.
Bill: Yeah, might [crosstalk] anywhere doing that.
Mark: Listen, people believe the things they believe for a reason and you're not going to logic them into another decision.
Bill: You might logic them into further believing what they believe.
Mark: You might.
Bill: Not because they're right but because they just want to dig in.
Mark: Correct. That is human behavior. So then, if you really want to change somebody's thinking, you got to get their attention and get them listening and you're not going to do that by calling them stupid.
Bill: That's right. I think that's a good place to end this one and I think that that's very good advice. So, I hope everyone enjoyed it. Mark, thank you so much for joining the show. I appreciate it.
Mark: My pleasure, anytime.
[music]
[Transcript provided by SpeechDocs Podcast Transcription]