Smart Investment Advice For Smart People

December 20, 2020

Michael Zervas  0:01   Welcome back, everybody. Today we have a very interesting segment on investing in how fear anxiety and avoidance have a big and at times hidden impact on our choices. Justin Harvey has a great educational pedigree and an interesting and insightful healthcare perspective. So sit back and enjoy.

Narrator  0:30  It’s time for the healthcare huddle, simplifying the business of healthcare, presented by encompass medical devoted to helping organizations succeed with customized medical practice management services, visit encompass today. Now, here’s your host, Michael Zervice.

Michael  0:55  Welcome, everybody. I’m happy to have our guest today, Justin Harvey, who is a principal at ANP wealth, he’s going to spend some time with us and share some of his perspective and knowledge specifically as it relates to healthcare providers investing some of the challenges and opportunities that exists. Justin’s firm ANP wealth, as I mentioned, specializes in providing comprehensive financial planning, investment management, and a host of other services geared specifically towards anesthesiologists in pain medicine physicians. And so he’s really got a good grasp on that a specialty and subspecialty. But he also has some ideas and thoughts about the overall concepts of obviously investing and how that relates to healthcare. I will say before I turn the microphone over to Justin that he and I have quite a bit in common that I didn’t realize. We both have wives in healthcare. We both play guitar. We both matriculated at Villanova. But I think the difference is stopped there. Because Justin was asked back and served as an adjunct professor of finance teaching portfolio management. And I am still waiting for my invitation OVA. So, Justin, thanks for making the time today. 

Justin Harvey  2:11  Mike. It’s a pleasure to be here. Thanks for having me. 

Michael  2:14  Yeah, it’s great. And so you know, one of the first things I wanted our listeners to get an understanding about you as a human being is maybe you could share with us a little bit how you, you gravitated towards wealth management and this subspecialty? How did that how did that path reveal itself to you? 

Justin  2:31  Yeah, good question. So as with a lot of these types of things, it was a long and winding road. That certainly wasn’t premeditated by me, when I was sort of starting to dip my toe into the the job market pool in 2009. That was a time that that year might ring a bell from an economic standpoint, it was a tough time to try to find work. So I have these distinct memories of going on, I think 26 interviews in a couple months span and getting roughly 1.5 job offers. So I took the one that was like the full job offer that just happened to be doing wealth management for ultra high net worth individuals and families here in Philly. And and that was, I basically just fell into it at the beginning. But I’m really grateful for that first opportunity, I got to I still believe today I work with some of the smartest people in the industry. And that really just sort of set me on this trajectory of continuing to the thing about personal finance is that it’s, it’s this really funny fusion of math, and economics and also human behavior. And I got to I just kind of fell in love with it from the beginning. And you know, I’ve worked a couple places since then. And now, as you mentioned, I run my own firm APM wealth here in Philadelphia, and it’s been a really fun and interesting ride. Along the way, I met my now wife Sarah, who is a current anesthesia resident here at University of Pennsylvania. She’s about to wrap up her residency here, shortly. We we made a paper chain the other day, with each link representing one day between now and the conclusion of residency. So we’ve been cutting one link off every day. But that was sort of the beginning of my interest in anesthesia and pain management specifically in saying how do I take the things that I’ve learned and the skills that I’ve refined and apply it in a specialty specific manner because as I got to know, anesthesia and pain and understand the unique marketplace dynamics, impacting those specialties, I thought, holy cow, there’s, there’s a lot of specialty specific planning opportunity that I think is kind of unexcavated by most of the financial industry. So I thought this is a really fun place to be able to go really deep and try to add as much value as possible for my clients. 

Michael  4:44  Yeah, I think it’s it’s interesting that you unlike many financial planners that that I know or have worked with or have been in contact with, you’ve decided to become a subject matter expert in this one, specialty and really drill down and it makes me curious to see that what are the differences that you see? Between maybe the specialties? Or what have you noticed about this specialty that you say? Yeah, this is what makes this a unique place, or they have some different kinds of challenges. 

Justin  5:17  Great question. So for starters, it’s hard to say the differences between them, because I certainly don’t have exhaustive knowledge of all the other specialties. 

Michael  5:25  Yeah, I do. 

Justin  5:27  Well, that’s great. The things that I’ve seen specifically in anesthesia and pain is because of the role, so to think about anesthesia for a minute to think about the role of the anesthesiologist or the anesthesia provider in the context of sort of the surgical theater and how it relates to different institutions and different sites of service. There’s a unique dynamic of like contracting, and a lot of either independent physician owned companies, but also like private equity owned, as well as academic and each of them has different implications from career opportunity, compensation models, job security, things like that. And that has real, actual tangible impact on financial outcomes for my clients. So being able to understand these things, and then when they engage with a decision, should I work for Company A or Company B, or I’m looking at a contract, how do I optimize it based on fair market rate for what I’m doing based on my geographic locale and the you know, the number of surgeries he’ll be performing? Like being able to speak intelligibly to those things can be a huge value add in pain management, it’s slightly different, but related questions, a lot of it around contracts, careers, practice models, understanding based on what someone’s looking for, you know, how important is it that you retain your own intellectual property or have access to buy into a surgery center? Or can do consulting or expert witnessing? And how do those puzzle pieces fit into your financial future and your career as you mature as a professional. So I try to work really hard to build some intellectual capital around those topics. And as my clients engage with those questions, I’m able to help them or connect them with other valuable resources. 

Michael  7:05  And also, you’re able to kind of reverse engineer then that portfolio based on the answers to those questions, or the particular market forces that are acting upon that specialty. Right. And that that’s kind of unique.

Justin  7:20  That’s precisely right. Yeah, I mean, there’s a lot of opportunity, especially right now we’re seeing with COVID. It’s funny, you know, if you would have talked to me a year ago, I would have said there’s, there are a few people in America with more bulletproof employment situations than academic anesthesiologists. And here we’re seeing, you know, major upheaval, including in academic departments, and there’s pay cuts, and there’s 401k contributions getting slashed, and even, you know, mergers that do impact employment at all. So it’s, it’s a very exciting time to be working in this corner of the world. 

Michael  7:51  Yeah, it’s interesting. I’ve seen the same thing from my side of the desk where I’ve seen large anesthesiology practices, either cutting or discontinuing for a period of time 401k contributions, struggling through that PPP process to get their money. So they could maintain some kind of connection as they’re trying to shut down offices or figuring out how to do it because they’re shut down, you know, surgery center shut down or whatever. And they’re out of work for that period of time. And and interesting is, is one word, and I’ve heard other physicians say at times, it’s been terrifying. Yeah. But I would, I would imagine if they’ve got somebody like you in the corner, who’s understands what’s going on in the marketplace, and has been building their, their plan in their in their portfolio in a certain way. There’s there that’s a bedrock they can lean on in this black swan event. I mean, I, I know many physicians who don’t have that. And that just adds to that fear of I don’t know what’s going to happen tomorrow. 

Justin  8:54  Yeah, you’re absolutely right. And frankly, I think medicine in general, I think anesthesia in particular, physicians in this specialty, have they at times gravitate towards the the predictable nature of it. And it’s, it’s something that hasn’t seen this type of upheaval from like a job, security standpoint and an income standpoint in I mean, I don’t really on a macro scale. I don’t I’m not aware of something like this. That’s happened in my lifetime. I’m 33 years old. So in addition to it being challenging, I think it’s challenging for people who just weren’t expecting it to be and frankly, might have chosen it because they wanted insulation from some of that. So it’s doubly important to be able to thoughtfully approach it. 

Michael  9:39  You know, it’s it’s interesting that you mentioned, you know, that maybe there’s this tendency to by anesthesiologist to partially gravitate towards that field, because there’s a predictability to it right? There’s maybe less, as you just mentioned, exposure to these outside forces. And it leads me to think about the personality makeups of physicians in general, and it got me to thinking about, what do you see that are unique characteristics of that physician that impact how they think about investing? 

Justin  10:15  Yeah I mean, so physicians, obviously, as a class of professional are among the most intelligent people in our society, I think smart people face a unique brand of challenges. And some of it has to do with your ability to self rationalize just about any decision that you make right or wrong. And when it comes to investing, humans biologically have this fight or flight mechanism that’s been sort of hammered out in their genes over a long time. It’s good for surviving in the brush. When you see the bushes rustle, and you need to run in the opposite direction. It’s not good if you’re trying to implement a disciplined investment strategy over years and potentially decades. Yeah, so in that fight or flight instinct, it can create this illusion of ability to control an outcome by taking an action, a specific action in the context of investing. So really, what I’m saying is, we think we’re good at adding to our return by buying and selling stocks, for example, you know, Tesla has been doing really well this year, Netflix, and Google and Amazon, these are like the big high flying tech stocks that, frankly, are at Sky High astronomical valuations. And by the way, none of this should be construed as investment advice. So please don’t take it as such and consult with a qualified investment advisor about any investment decisions. But there’s this, you know, just instinct, I guess that we all have as humans, and I think physicians have in their own unique way, because they’re really smart. And they can talk themselves into or out of things that, that they perceive as, it feels like a good thing, if I’m buying or selling, I’m taking an action, I’m causing an outcome. But that, frankly, a lot of there’s a lot of research to support that not helping you in the long run. And sometimes the best thing you can do is just sit on your hands. And that’s a really, really hard thing to do. If you look back at like, you know, middle of February, when COVID was just starting to hit the headlines, and the bottom fell out of the stock market. And there was a huge sell off, that was a very tumultuous time. And what we saw subsequent to that sell off. And this doesn’t always happen, by the way. But the 100 day period immediately following starting, like, the end of March was literally the best 100 day period in the history of the stock market. So if you, you know, it seems like the sky is falling, and you sell out of your stock portfolio at just the wrong moment, you would have missed the best three month period ever. And that’s just a small example of how sometimes sitting on your hands is gonna work in your favor. Yeah, investment philosophy is a very big and broad topic. But this is, these are some of the questions I try to ask with my clients. 

Michael  12:47  You know, it’s a, it’s an interesting topic. And it’s interesting how you’re thinking about it, I have a tendency to agree with you in a couple areas. And one of them is that yes, humans were, you know, it’s that fight or flight. But really what it is, is even to drill it down further is to take action. Yeah, really, if I if that bush rustles and I run, or I go and grab something and go into fight, I’m taking an action and like you say, this market, you know, trying to time the market and buy and sell has traditionally been proven to be not nearly as successful. But I think there’s another element at play here and I’d like to get your take on it.

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Michael  14:45  Physicians are also trained to make decisions kind of quickly with them the information they have at the time. And so not only do we have this kind of built in, need to do something, but I think It’s especially exacerbated within the physician community because they’re also trained if you’re, if a patient’s having a problem in the ER theater, I don’t have time as it is these allergies that say, Well, let me look, let me think about this. Let’s just wait. They gotta move quickly. And so they’re reinforced to move quickly all the time. And I’m wondering if you think that also has a play in it? 

Justin  15:23  It’s funny you say that I know. That’s one of the things that drew my wife to the specialty of anesthesia that she likes the sort of the pharmacological element of like, the ratios aren’t right? The numbers aren’t where I need them to be. So I take an action, and I cause a desired outcome. And it is very kind of interventional in that way. And pain management, you could argue is kind of the same way. So yeah, I think you’re, you’re 100% correct. And it reinforces the importance of being selective about the data that you put in front of your eyeballs. Because depending on how you frame the conversation, how you frame a decision, how you frame an investment philosophy, you can find any bit of I mean, this is the classic joke about data, right? There’s lies, damned lies, and statistics. And right, you can look at all kinds of different stats to make you do all kinds of different things. And it could be perfectly rational. But having a cohesive investment philosophy at a high level, will help you filter what data is relevant for me, so that when it’s pushing me to an action, I mean, I think about what is one of the most fundamental bedrock sort of statistical relationships in investments that governs the way that I approach this for myself and my clients. And I think about, there’s a really great chart, maybe I can send it to you, we can link in the show notes. As the time period of an investment extends, the percentage likelihood, at least looking Historically, the percentage likelihood of a positive outcome increases. such that, you know, on a, like, if we said tomorrow is the stock market going to be higher or lower, it’s basically a coin flip. It’s like a 5149 proposition. But if we stretch it to a quarter, and then a year, and then three and five years, once you get to five years, I think it’s like 76% 10 years is like 91%. And depending on the day, I think once you get into 15, or 20, there’s there’s been zero historical timeframes when the s&p 500 over a 15, or 20 year timeframe has not been positive. So obviously, this is no guarantee of the future. But over a 15 or 20 year time frame, it’s never been negative. So if you’re thinking about, I’m nervous about losing money, if your timeframe is 15, or 20 years or more, it’s literally never happened in the history of the stock market, where you would have lost money holding it over that timeframe. So it’s very important to think about these time horizons, we don’t want to put money at risk that you need, for example, in two years to buy a house, that’s not good money to take and buy Netflix or Google with, if you need it soon, we want to keep it in something very, very safe, like a high yield savings account. But if this money is in my 401k, that I don’t need for another 17 years, then you have a very high likelihood probabilistically speaking that you’re going to not only not lose money, but probably make a lot of money over that timeframe. 

Michael  18:01  It’s a it’s a great point in it. And it speaks to what I see in healthcare a lot is that we react to fear, you’ve mentioned it a few times. And we’re not always aware of how fear is impacting our decision making process, because it’s so innate and organic, and it just evolves. And as you said, we can make good arguments. And so, you know, whether it’s I see physicians, sometimes practicing defensive medicine, not making a judgment about whether they should or they shouldn’t, but that’s a fear based decision, right? Or they’re worried that the market is going to go up and down. And I got to do something that’s a fear of losing out of losing money, right? And really, all we ever have are probabilities in life. Right? And we can only and you know, you and I both have this mathematical and statistical and economic background that informed us and taught us to think about data that way. But most people don’t. And I’m wondering, in your time that you were working with high net worth individuals who maybe weren’t necessarily physicians, did you notice anything different or it between those people and the challenges? Or is it kind of across the board that, you know, as you said, once you’re smart, you’re gonna be more prone? Or are there different things within different groups that you see I call them civilians and people in health care? Is there any difference there? 

Justin  19:32  Hmm, good question. There’s definitely groups of people that think certain ways. So another group, I guess, would be like entrepreneurs that have like a very distinct way of seeing the world and seeing markets and seeing investment. Yeah, physicians are probably their own unique class. There’s a lot of overlap. And these aren’t mutually exclusive groups. So it’s a little bit I think, tough to distinguish between them. One of the things that they do have in common though, is and this goes back to what we’re talking about before about fear is and I always sort of beat this drum. This is another very important core tenet of mine that I try to reinforce whenever possible. So I’m going to soapbox for just a minute here. But the way that the media monetizes fear, they’re dependent upon you being anxious being glued to the TV being glued to the headline, taking action, and then feeling like he had to go back to the headline to either justify your action or be able to revise it the next day as needed. And they used they do that to sell advertising, not to make sure that you maximize your terminal portfolio value at age 65. They do it so that they can, you know, sell the most dollars per click on their, you know, their feed or whatever, or on the 30 second commercial spot. So you need to understand the approach. This is especially true in financial media need to understand the sort of the motive behind that communication, as you’re thinking about investments, as you’re thinking about decision making. Like there’s hardly anything, if anything at all that CNN or Fox News or MSNBC could possibly tell you in a headline format, that should impact that’s meaningful, any of your investments, it just shouldn’t happen. 

Michael  21:03  You know, you’re too young. But back when I used to ride a horse, they had a thing called newspapers. And the the old saw was with the newspapers was, if it bleeds, it leads. Yeah. Because that catastrophic that and it hasn’t changed. Our human psychology hasn’t changed it just the way that we get it delivered is faster now. It’s ubiquitous. It’s on our phones, it’s on our laptop, it’s everywhere, that it’s on our TVs. It’s everywhere that we look. And I agree with you. I think that and I think it’s an interesting point. And I’ll ask you to stay on that soapbox. Because I see people all the time reacting to these. It’s fear mongering, and it’s profitable, because they press that button in our brain. And it makes us I gotta pay attention to this. I gotta do something. And I imagine you more than a few times shielded. I mean, fielded a few calls from somebody saying, I just saw this, I need to do this. 

Justin  22:01  Yeah, usually it’s like the forward, it’s somebody just hit the forward button on like an email they got it was like a Wall Street Journal story notification that went straight to their inbox like should What do you think or question mark? Like? No, not not even a question? Just like a question mark in the text? Like, what do you think, should we respond? How do we interact with this idea? 

Michael  22:19  Is that hard for you to navigate them back to a more long term, less reactive position? 

Justin  22:26  No. I mean, it’s actually a perfect touch point. It allows me to remind the clients why we’re doing what we’re doing. We’re I’ll say, okay, like, we’ve got our emergency fund, we’ve got your checking and savings accounts, maybe we have some CDs, we’ve got some, like very durable stuff that’s could literally cover all your expenses for the next three years. that’s by design. That’s how we built it. Do you feel like, you know, this 180 K to for just a random number to cover your expenses for the next three years? Is that still sufficient? Yes, no? Well, yeah, that’s probably still okay. It’s like, and then all the money that’s at risk in the stock market right now, I’ll put at risk in air quotes, you know, for the 15 to 20 year horizon, like, do we think that whatever is happening geopolitically or with the election or with Corona? Like, do we think that that’s going to have a 15? year from now impact? Yes, no, it’s like, well, almost certainly not. And if it does, we’re not talking then about asset classes of stocks and bonds, we’re talking about guns, gold and bottled water as the type of things that we’ll be thinking about. So it’s a nice gut check and moment to revisit the philosophy revisit the infrastructure to make sure that, frankly, I am doing the right thing, because sometimes it’s like, well, you know, I would actually feel I would sleep a little better at night, if I had an extra 10 or 20, or 50 grand in cash. And then we can act, because it’s very important to me that my clients sleep well at night. And if they’re not, it’s a breakdown in communication somewhere, either. They haven’t told me something that they need to tell me or I haven’t either heard or perceived it or asked the right question.

Michael  23:51  That’s great. And it leads me to another question that I have for you along this same topic. So I’m 59. And I have my portfolio built, but I don’t have an expectation that I am or was going to retire for, gosh, maybe 10 years. But I look now and so how do you talk to somebody like me, who meets my profile, who all of a sudden has a black swan event? It says crap, maybe my portfolio should have been? I thought I had a 10 year horizon. But man, I don’t know if this stuff’s gonna come back in five years, this is a big dent, I don’t have 15 or 20 year portfolio, time horizon anymore, maybe 10 years isn’t even as long as I think it was maybe that time horizon, that timeframe that you and I discussed has been compressed by this black swan event. What’s the conversation around that? 

Justin  24:38  Good question. So this is it’s pretty complex. There’s a lot of variables that are client specific for somebody like you, Mike, I know you well enough to know that you’re a pretty enterprising and resourceful and creative type of guy. And you’re going to be able to adjust and adapt in ways whether it’s starting a business or doing consulting or if it’s If your job went away tomorrow, like, Can you find a way to cover 75% of your living expenses for the next three years? If somebody like put a gun to your head and said, you really need to do this, like, could you find a way, I think someone like you probably could, if you have a skill set that maybe is not doesn’t translate as well into being able to make some amount of money for a period of time, so that we don’t need to, for example, draw down your portfolio, then I’m going to probably have you more defensively positioned so that we can account for that difference in skill set difference in Outlook, if you have other types of income, you know, real estate, or maybe another business interest or other things like that, if you get social security, these are all components of your picture. And so any decision about investments needs to be informed by sort of all of these dynamic, ever changing variables. That’s kind of a non answer. I guess. That’s one of the questions I’m asking. 

Michael  25:56  Yeah, it’s an answer. Because what I’m hearing you say is that it’s a it’s a global holistic approach. And it ties back to that holistic global approach of considering everything in that person’s their ability to work, how safe that to particular job is, right? It’s the same idea, right? You’re just continually trying to make those short term and long term adjustment short term in quotes relative to a 10 or 15 year time frame, without making those dramatic changes in that ultra micro short term of three to six or eight months, right? 

Justin  26:34  That’s right. I mean, in a timeframe that short, frankly, I would always say six to 12 months of living expenses in cash, especially for somebody in their 50s would be like bare minimum. So I would want you to not have to stress about money, because we’ve literally got a year’s worth of savings, and checking our high yield savings account. So that’s sort of the starting point. And then if you know, oh, I lost my job today. I’ve got literally a year where I can make zero money to figure out something else that can be a great stress alleviated. 

Michael  27:01  So we’ve been talking about and around this pandemic. And I’m wondering if you’ve seen again, maybe globally, but also specifically any changes in the industry as a result of this? Or is it? Are there new products, new services, maybe they weren’t as a result of the pandemic help me understand if you see any trends that are happening in the industry, I know that your the way that you bill for your practice is a little bit different than what a lot of different houses do. And that’s assume part of a new trend. But tell me what you’re seeing. 

Justin  27:35  When you say the industry. Do you mean the financial industry? 

Michael  27:38  Yeah, I’m sorry. Okay. Yeah,

Justin  27:40  Healthcare is like being revolutionized. But yeah, absolutely. So one thing is, I guess, the push to remote work, all companies are obviously doing this in different ways. But the financial planning engagements have historically been in person. And then I would say, probably 10 years ago, doing like, nationwide, or even global remote financial planning and investment engagements started to become more and more popular now. It’s like, no one would want to come to your office. So that’s been normalized, in ways that I think has accelerated this trend, to allowing consumers to instead of finding the best financial planner in my town, for me, saying, who’s the best financial planner in the world for me, and it’s kind of leveled the playing field and created this, I’d say like a new opportunity to find planners who could be a better fit for your specific needs. So I think it’s a really exciting time in that way. And that’s a big part of the I think we could call it a hypothesis behind the way that my company is approaching, serving this very, very hyper specific niche. And by the way, my resolve gets tested on this all the time, I had a buddy text me yesterday and say, Hey, I’m talking to a group of obgyns like, are you sure you know, like, Can I make an intro? And I’m like, Well, you know, I’ll talk to anybody. But I’m very clear about my niche. It’s built into my company name. And I would want any anesthesiologist or pain management doc anywhere in America to look at my firm and say, Well, if I’m thinking about a handful of companies, I think that what Justin and his team are building could be one of the best companies for my specific needs because of how much he understands my situation and would therefore make me a consideration. And it also makes my you know, business development or whatever you want to call it activities more efficient, because any other professional is going to go to my website and say, Oh, it’s right there on Justin’s homepage, we work with anesthesiologists and pain management physicians. from a business standpoint, it’s just much smoother because people self select out before they even call me.

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Michael  30:48  You know, it’s interesting, though, you making me wonder, I mean, in that way, this disruption is very similar to healthcare right? We’re seeing this tremendous move not necessarily for anesthesiologists, but for healthcare writ large. We’re seeing this move and a rapid adoption of telehealth. That’s and there’s a corresponding, I think we’re gonna see a corresponding decrease in brick and mortar. And I wonder if two or three years from now, there’ll be less brick and mortar presence in this financial market, because people don’t need to come in because I’m used to using zoom, because I’m an anesthesiologist in California. And I want to work with Justin, because he’s a specialist and he doesn’t have to be in Temecula. He can be wherever he is, because I’m used to work. And I wonder if we’re going to see a change in real estate now. 

Justin  31:38  Yeah. I mean, these are a lot of great question. I do think it’s, frankly, I think it’s a little nudge that our society needed, like, this has always been true, I could get on the phone with somebody in California. And if they were in an objective sense, a competent, trustworthy person, they could serve me probably just about as well as anyone. There’s obviously the missing kind of in person human connection. But now that it’s kind of being normalized that we just do zoom meetings all the time. Now, you could argue this is good or bad, I, I don’t love it. A lot of times, I think on zoom meetings all day, but because we’re more open to it as a society, it does just open up whole new opportunities for not only the clients, but for advisors to get hyper specific and say, How can I add value in such an insane way that if I had to, you know, only anesthesiologists in Philadelphia as my prospects like I, I couldn’t build a business because there’s not enough of them. But if I can go anywhere in America, all of a sudden, this is a viable business model. 

Michael  32:34  So you’re right. It’s really interesting. And we’re right in the middle of this, we’re still trying to figure it out as we go, right?  So I sent you a note before the show, and it was kind of tongue in cheek and the note I sent to you was we tell us everything is gonna be okay. Yeah. And it really it was a way to have a conversation about without asking you to predict and you can’t and without asking you to give advice, which you can’t and you you wouldn’t. What are you seeing over the in the markets over the next year? Two years? Do you have a sense? Do you have a feel I know it like I just said, I’m not trying to put you on the spot, because it’s happening real time. But I’m interested to get your perspective, it’s clear that you’re thinking about all this stuff. 

Justin  33:18  Yeah. So a couple things I would say. And I’m, I’m an optimist by nature, I also try to have that indomitable optimism informed by, you know, the facts around me. But I do I am an optimist when it comes to not only like economics, but the futures, the respective futures of my clients, and even of this country, like America, in many ways, is a messed up place. And I desperately love it. And I wouldn’t want to be anywhere else. And I understand that there are systemic challenges and threats even. But I’m I see myself as somebody who wants to throw my weight behind trying to push things in a positive and productive direction. So I’m always going to see, see this question through that rose colored window. Having said that, yeah, there’s a really great chart, I’ll try to find this one for you, too. And we can link this in the show notes if you want. But it’s, it’s basically a chart from March 7 2009, which was the very bottom of the financial crisis 10 or 11 years ago, up until, you know, very recently, and it’s basically a picture, you know, a piece of paper and it’s a line that goes from the bottom left to the top right quadrant, it’s just almost 10 years of unmitigated up. Now, obviously, there’s been some hiccups along the way, especially this year, but the point is a mapped onto this relentless marching up of the stock market is like all these little points of like, here’s this crisis. Here’s this crisis. Here was this thing that happened here was that all these pieces of bad news and these headlines that are grabbing our attention, and the point, illustrated by this chart, is that there’s always a reason to be stressed or anxious. Or fearful, even in the face of a 10 year, like, really, really strong run up of equities where immense amounts of wealth have been built by people who have been in the stock market. There’s been reasons to freak out the entire time. And so, you know, are we going to see a crazy cataclysmic event between now and the election or shortly thereafter? Or what if it’s contested, and Donald Trump doesn’t want to leave the White House? Or if something crazy happens and markets freak out? Like, what does that kind of mean for capitalism? I mean, who knows? I, I’m always coming at this, from the standpoint of that, that’s why we have emergency funds. You know, nobody saw COVID coming. Yes, these geologists would have never thought they could have lost their job that’s like to lose your job. And academic sec, just seems unconscionable. But, but that’s why you prepare for the unanticipated. So I think now more than ever, we’ve got a cover your short term needs with money that we know is going to be there, meaning like FDIC insured, put in your savings account, but get a CD, even high yield savings are paying like point 6% right now. So it’s not like you’re gonna make a ton of money, but it’s you preserve the capital those. That’s right. And the purpose of this is to be able to insulate yourself emotionally. Like, if I know that no matter what I read, in the New York Times, tomorrow, I have 12 months of living expenses in the bank come hell or high water. And if I really had to, I could get a line of credit on my house and take out some 0% credit cards and like, I have recourse if you understand that as the essentially worst case scenario, it can be emotionally, I’d say a liberating, this is actually so I’m a big fan of Tim Ferriss, and a lot of the stuff that he has written over the years and he has this exercise where he it’s it’s geared towards entrepreneurs to say, if you’re thinking about starting a business, and you’re too scared, and you can easily apply this to personal finance, or investing, like sit down with a notepad and think about the worst possible situation and imagine it like to a tee with, with every single detail, you can jam into that and then think about what you would do. So if there’s, you know, if we enter another depression, and like I lost my job, and I had to string it together with consulting gigs, and I’m like, I’m limping along financially for a long time until finally, faith is restored, you know, in the American economy. I mean, if that’s the worst case, like am I going to be able to get through that am I going to be able to thrive and be content and have like rewarding relationships and be a positive, contributing member of society and a good husband and dad and have a life that I’m still happy with? Like, I think I would, because at the end of the day, hopefully, and I do get into some values and some mission vision types of conversations with my clients, but at the end of the day, you’re a lot more than your balance sheet, you’re a lot more than your income statement. And if your practice goes under, or if whatever, you get sued, and you have to hang up the cleats, like, there’s gonna be a tomorrow. And if you’re building your life, around things that are not just your balance sheet, you’re gonna probably have a much better chance of finding contentment. The end of the day, that’s kind of the most important thing, I think, 

Michael  38:07  Yeah, there’s a, you have a broader Foundation, which is less likely to rock if any one part isn’t functioning. And that’s right. You know, there’s a really interesting book by author named Carbonell, who’s out of Chicago, and I’ll put a link in the show notes to this too. And it’s called the worry trick. And it talks about a lot of the things that you were talking about adjustment about fear and how we’re programmed to focus on things that we find fearful and to give them more weight and magnify them and give them more attention in our life. And one of the concepts he talks about is the concept of worry, and productive worry versus other types of worry, and all other types of worry are worthless, productive worry is just what you described, which is to sit down and go to the worst place that you can imagine and assess, analyze, and then build what you need to do to survive that worst case, right? And once you’ve done that, that’s speaking to the liberation because what you’ve done is you’ve turned off that fear center in your brain and now you’re reactivating that prefrontal cortex that is making decisions and is helping us manage day to day and so you’re spot on with that and i think it’s it’s insightful. I’m a little frustrated that Tim Ferriss has been recycling old stuff and making a lot of money off it but there’s a demand to say somebody has gone and done a lot of reading and research and they’re presenting to me distilled ideas. We’re busy, so I’m just too lazy. I think to do all the research. I just never turn around and distill it. Hey, Well, listen, I’m looking at the clock and I realize I’ve kept you longer than I anticipated I would but I I’ve enjoyed conversation, I certainly have enjoyed your, your insights and your perspective. And I think it’s really interesting. And I’m hopeful that our listeners will kind of pursue this idea about how finances and economics are really about the human behavior and the way that we think about those things that it is about, necessarily the numbers in the charts, right. And so you’ve, I think you’ve done a great job of illustrating that role it has in all of our lives. So I want to thank Justin, again, great guest interesting guy. If you want more information, or you want to learn more about Justin’s firm, APM here’s this website. And Justin, if I get this wrong, correct me immediately, but it’s @apm/ Is that correct? 

Justin  40:46  Correct. Yep. 

Michael  40:47  Okay, and is there any other way you want to let people contact here? Is that the best point? 

Justin  40:51  Yeah, you can email me Justin@APM/ if you want to get in touch, we’d be glad to answer any questions or elaborate on any of this content today? 

Michael  40:58  Well, I would strongly suggest our listeners, if you have the need reach out to him, you can you can tell that he thinks he’s smart. And he cares about this group of providers. And so I think he’d be in great hands. Justin, thanks again. It was great chatting with you.


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