Clay Finck (01:48):

Now, today, we are going to be chatting about how we can continue to improve our financial situation as well as our lives during this really challenging economic environment. When checking out some of your content, you’ve used the phrase personal economy before. What exactly do you mean by using that phrase?

Derrick Kinney (02:09):

You know what’s interesting? There’s so much news media today, whether it’s TV, podcasts. Wherever you get your news and consume it from, there’s so much news about the general economy. You tune on the internet and you hear the jobs numbers are up, inflation is up, the market’s down with consumer price index. And you get to consume by all these theories and numbers out there and you wonder, “Well, that means something, but what does it mean to me personally?” And so what I like to do with the news of the day, Clay, is ask people what does this mean to your personal economy? Because jobs numbers may be higher, the market may do this or that, but can you still put food on the table for your family? Can you still achieve the goals that are important to you? Can you still nurture the relationships that you care about? Can you still send your kids to the college or plan for the education fund you always want based on your goals?

Derrick Kinney (03:00):

And that’s what I want to talk about with people today is, look, all the news is good, but ultimately, what does it mean to you? There’s been many times, for example, where somebody might go to the gas pump and they might criticize, “My gosh, I can’t believe I’m paying $20 a gallon for gas is what it feels like.” But then they realize, “Wait a minute, I own stock and ExxonMobil or Occidental Petroleum. Well, this is good for my portfolio.” So it’s all how when you pull back and ask yourself, “How does this really impact me as an investor in a person?” I think it gives people unique perspective that other people aren’t thinking about. It goes against that herd mentality which I’m always a big fan of.

Clay Finck (03:39):

I think another part of that is focusing more on what you can control. You can’t control what the job reports are going to come out. You can’t control the stock market in the short term. You can only control your spending and how you approach your personal finances. And you’ve mentioned that to improve your personal economy, we should be cutting our expenses, but not necessarily be cutting our joy. Could you clarify what you really mean by that?

Derrick Kinney (04:04):

Sure. One of the things that really concerns people right now is how much they’re spending. When the inflation ramps up, it really pinches people in their pocketbook and their wallet, their bank account and they begin to ask, “Well, how can I save money?” So a couple years back when we had a similar economic crisis, a client came in the office. She was very, very nervous, Clay. She was worried about “How am I going to make ends meet? How am I going to keep providing for my family in the way that I want, because the economy was really shrinking?” And her thought was, “I’m going to cut back on everything. We’re going to scale back anything that brings us any kind of joy. We’re going to take all the fun out of our budget.”

Derrick Kinney (04:40):

And as we began to list out the things she was going to cut, she was going to cut out her streaming services. She was going to downsize her car. They were actually going to sell one car, go down to one car. She was going to work another job. And all of these things while on the surface could be good and prudent by some people, I asked her, I said, “As you do this, will you enjoy any part of those budget cuts?” And she paused for a moment and she said, “Actually, no, I won’t.” And I said, “So let me ask you this. You’re about to save money and you’re going to cut back on things that you really enjoy. You’re going to do this for an indefinite amount of time, and you’re going to feel terrible about doing it.” I said, “Is there any motivation that you’ve created to cause you to want to keep doing this?” And she was like, “No, there’s none.”

Derrick Kinney (05:25):

And I said, “Why don’t we do this? Why don’t we play cut here and keep here?” And it’s a game we play to offset and expense, but keep our joy. So I asked her, I said, “Do you like coffee? Do you like going to your favorite coffee shop in the morning to buy your favorite latte?” She was like, “Yes, it’s a treat that I really enjoy.” And I said, “Well, so many people criticize that if you’re buying your favorite latte, you will certainly never retire.” You’re going right to bankruptcy is the message that so many people have right now, Clay, and I couldn’t disagree with that more. And what I told her was, “Look, if you want to keep your streaming service because it brings you joy after a hard day at the office, then let’s find something of equivalent value to cut so that way you’re having the mentality of how can I keep my joy, but cut out the things that don’t bring me joy, which can help balance your personal budget.”

Derrick Kinney (06:12):

And if people do that and they can incentivize themselves and say, “Look, hey, if I cut 10% of my budget, I’m going to treat myself to something that I pay for in cash,” then it’s a way to have fun with it. So many people think of their money as a tool either for good or to torture themselves with. I just don’t want people to do that these days. With inflation right now, you’ve got to take a breath. And instead of cost cutting your way to what you believe is financial freedom, let’s look at top line revenue and not focus on bottom line expenses as the pathway to achieve your lasting financial goals.

Clay Finck (06:48):

Yeah, it makes me think of the phrase perfect is the enemy of good. Just even thinking about your finances and your expenses probably puts you ahead of say 90% of people and puts you in a really good financial position thinking about not having too much debt, keeping an eye on your expenses and not going just totally excessive in all the areas of spending and spending more than you make. It kind of reminds me of the FIRE movement how they might just go all out on personal finances for say 10 years and they’re just like miserable for that period of time. They might get to that end of that 10 years and just realize that they’ve kind of wasted the early years of their life and really not lived a life that they’ve really truly wanted.

Derrick Kinney (07:29):

It’s such a good example there. And I recently met with a young CEO startup company, this person driven, excited about the future. As we talked about how he ran his business, he talked about both the successes, but also the adversity this young company had faced. They had this technology that they knew was solving pain points in the business community, but they had marketing problems. They had problems communicating the benefits of their company to potential customers. And they began to think, “Well, how do we make cuts?” And so his first thought was, “We’re going to cut our sales force. We’re going to cut the marketing department. We’re just going to trim back so we can have more money to grow.” And I said, “Well, if you do that, who then is going to even give you any chance of selling your product and getting this idea into the hands of people that need this pain point sell for them?”

Derrick Kinney (08:18):

And what he realized was this was actually a moment, Clay, get this, to in many cases double down, was actually to hire one more salesperson and one more marketing person but just find ways to offset any other superfluous things because he needed to grow right now. He wasn’t going to increase his sales by cutting his bottom line. I think that lesson can help so many people listening right now because often we think, “Boy, if I just cut, cut, cut, cut, that’s going to be the way that I can make ends meet and get ahead.” And it’s true while you may make ends meet in the short term, it’s not helping you get ahead financially.

Derrick Kinney (08:55):

And what I would encourage people to do right now is, how can you double down? If you think of yourself as the CEO of your personal finances and the CEO of your family finances that think about a CEO who is able to detach themselves, they can see the problem, they can understand the angst and the emotion in the situation, but they pull back and observe it and not put themselves in the middle of it, that’s a way to make smarter decisions. Because I believe right now, history has proven this, is that when the economy feels the most crunchy and when the market feels the most uncertain and when most pundits say run for the hills is precisely the time looking back in the rear view mirror that most people make a lot of money because they stay in the game, they bet on themselves but they calmly and coolly pull back, look at the situation and say, “Somebody’s going to make money from this crisis, and I want to have the mentality that I’m going to make money from it as well.”

Clay Finck (09:57):

We’ve been talking about cutting your expenses, which has its limits, but there aren’t really any limits to increasing one’s income. Many people listening to this show are probably employees working for somebody else. What are some ways someone that works at a job, what are some ways that they can increase their income whether that be in their current role, or maybe even doing something outside of that role?

Derrick Kinney (10:22):

What I want to do is I want to challenge your listeners right now. And I want to ask them if you continue doing what you’ve always done, is it fair that you will not get different results? I think most reasonable people would say, “Yeah, if I keep doing what I’m doing, I’m probably not going to see something different.” Then the second thing I would add, and I want to say something very controversial to everyone and that is, you are currently paid what you’re worth right now. Now let that sink in. You’re currently paid what you’re worth right now. Now some of you may be think, “Well, Derrick, I’m worth more than what I’m making right now. I deserve more money. And those things may be true and I don’t disagree with you, but here’s the deal. If you’re working for someone right now, you sort of have an agreement that every pay period as you accept that paycheck and cash it, you’re saying, “You know what? I am worth what you’re paying me right now.”

Derrick Kinney (11:16):

So here’s what I would offer is an alternative strategy. And here’s what’s at stake. I believe if you’re not making more money, the money that you really feel like you’re worth and deserve, then you can’t do more good in your family. You can’t do more good in the community. You’re just not going to feel as good that you’re always underpaid. I think people who reached that level of self-actualization where they’re really feeling full meaning is their proud of what they’re earning because they know they’re worth and they know someone else has paying them for. So here are a couple practical steps I would offer people. If you’re in a job right now, whether you’re listing and you’re the administrative assistant, you’re the manager, you’re the vice president, the worst pathway here is to bang on your boss’s door and say, “Look, I’ve got another offer or I want to bolt. Either pay me more money or I’m out of here.”

Derrick Kinney (12:03):

Okay. The bottom line is this. Your boss’s favorite radio station is WIIFM, What’s In It For Me? It’s the station that always has growing listenership, never declines, people always love the music on that station. What’s In It For Me? And so instead of banging on the boss’s door, because ultimately if I’m the boss and someone comes to me and says, “Hey, pay me more money because of my expenses have gone up,” while I have empathy toward that, I don’t candidly really care as much because it doesn’t mean anything to me. In other words, I’m not here to bail you out financial.

Derrick Kinney (12:38):

But, and here’s the goal that I want to give your listeners, Clay, if you can think where you are right now on your role as the administrative assistant, as the manager, as the VP, whatever it is, what can you do to increase sales for the company, reduce cost for the company and grow the overall business, now you have a compelling case to take to your boss and say, “Ah, I want to add more value because I like working here. And if these work over the next three to six months, let’s agree on an incentive or a bonus plan or a salary increased structure that is mutually beneficial for both of us.” I guarantee you that your boss will take the meeting and there’s no downside. There’s literally no downside.

Derrick Kinney (13:22):

I’ll tell you a quick story. I had a young professional reach out to me a few months back. He was actually feeling very frustrated. He had joined another startup firm. Optimism was high, but very quickly he was feeling overlooked, underappreciated and overworked. And what we talked about was his boss was the one seeing all the customers in this small company. And we talked about what would be some ways he could help his boss achieve his goals. And of the 100 or so main customers, we talked about, “What if you proposed that you took the lowest revenue generating 25 customers and you began to service those customers yourself in terms of phone calls and touching base? You got licensed to be able to do that would give your boss more capacity. And then you could say, “Look, for any business increase I make, I get a percentage of that’.”

Derrick Kinney (14:12):

Well, the boss loved it. And so suddenly now we have this employee who is now re-empowered, re-motivated. The boss is like, “This is gold.” Well, then the employee went to the boss and said, “Look, I know you have about one other salesperson beside yourself. Instead of counting on them to bring in all the business, what if you gave an incentive to all 10 of us in the company that said, ‘If we bring in a lead and we give it to you or the sales department that turns into a customer, then we all get a bonus individually for giving you that referral?’,” The boss loved that idea as well. So now it went from one salesperson to 10 people feeling motivated and empowered to want to grow the business.

Derrick Kinney (14:52):

Here’s what I believe, Clay. Right now, even while people are worried about, “Am I going to lose my job? The economy’s slowing,” you’re in such a minority for putting what I’m saying in a practice, you’re going to stand out. Whether it’s a five person company or a 50 person company, how can you increase revenue, reduce costs, grow the business? You will definitely make more money. And this is not just a 3% raise we’re talking about here. People that come back to me who are practicing this are telling me, “I got a $5,000 raise, $10,000 raise. I got a $20,000 raise because he knew I might bolt if I left. But because I added value, he put an incentive program in place as well that my comp could grow by $50,000 this year.” So the bottom line is, it’s no risk, it’s no loss, and it clearly demonstrates that you have the best interest of the company at heart. And what boss does not like that mentality?

Clay Finck (15:44):

I’m someone that just loves playing sports, doing competitive things. I play basketball once a week with friends and I love playing it in high school. It reminds me of what you’re saying is, I can’t remember which NBA player it was but he said that, “You want to be so good and just play so well that the coach is crazy not to play you.” So, if you’re not getting the playing time you deserve, then maybe you don’t actually deserve that playing time. And then that applies to what you’re saying with the job. If you aren’t making what you want to, put yourself in a position where when you go and ask for that raise or ask for that additional compensation, your boss is like almost crazy not to give it to you because they know that they risk losing you should they not give you that raise.

Derrick Kinney (16:26):

I agree with that. One thing I would add to that is, so many times I think employees assume that because they’re doing a good job and because they’re hitting their goals and because they’re one of the best employees, that their boss automatically recognizes that and wants to reward that. Here’s the problem that I’ve discovered, is that while you may think that and the boss appreciates it, the boss has so many other fires they’re putting out, you’re simply one part of their life, you’re not the main part of their life. And so what I would say to that would be, you want to provide clarity and always a compelling case as to what you’re doing.

Derrick Kinney (17:01):

And so this is where you need to be proactive as an employee, bringing what you’re doing and the value you’re providing to your company and to your boss. Remind them of this on a regular basis. Because if not, your good work can be overlooked. And it’s very, very sad, because we see this a lot with companies. There’s so much focus on the boss of “How can we do more with less people? How do we grow the business that they often overlook not intentionally some of their very best people, which leads them to feel underappreciated.”

Derrick Kinney (17:29):

So I know this is counterintuitive, but if you want to stand out today and we had a couple come in the office recently, young executives experiencing the same thing at different companies, what we talked about is every quarter set up a status update and a how to grow your business meeting with your boss. The purpose of that is to title it in a way where they know, “Hey, this is what’s in it for me.” They’re going to bring some ideas about how do we grow, but it keeps you facetime and not just as an employee with that mentality, but now you’re viewed as an entrepreneur within a corporate environment, which is what so many companies want right now.

Derrick Kinney (18:06):

Listen, they don’t want to have to pay to hire somebody or retrain somebody and reteach them all the knowledge you’re leaving with. So if you’re an ambitious driven employee right now, I believe, and if you don’t do this, what’s at stake is you’re not going to make the money that you deserve, you’re not going to make the impact in the company you want, and I think you’re going to miss out on some really good opportunities within the company and having a better life. So you’ve got to go to your boss.

Derrick Kinney (18:33):

I would encourage you within 24 hours of listening to this, write out “How can I increase sales for the company? How can I reduce cost? How can I grow the business?” A three to six month game plan of doing that. How can you then increase your salary and set up an incentive plan and remind your boss, “Let’s monitor this every quarter” because they’re going to want to see if you’re producing results and it’s going to motivate you to do more results and you’re going to make more money, but you’re always going to be on the radar screen of your boss, which I don’t know if that’s ever bad, because if an opportunity comes up, “You know what? Susan has a proven track record. Let’s promote Susan.” Or “Tom is a great person for this. I’ve been working with him. I know his quality of work.” So the goal of all of this is how can you be opening doors for yourself that when a bigger door opens, they want you to be the one to walk through it.

Clay Finck (19:21):

On our show, we like to cover individual stocks or specific sectors that bring somewhat of a unique risk reward profile. What are some of the trends you’ve got your eye on that might be worth considering for listeners?

Derrick Kinney (19:36):

One of the things that I think about is when inflation concerns occur and the stock market is very uncertain. And we hear different experts out there every day talking about, “Hey, we’ve hit the low.” And then the next day it goes lower, it just creates a lot of worry and concern. I think this is why wine sales go up so much when the market’s down for goodness sakes. It’s interesting right now. Here’s what I am keeping my eye on. First of all, the S&P 500 represents the top 500 companies in America, and just like the Dow Jones top 30 do. When we see volatility, there tends to be this term flight to quality. Now in the past, that meant I would pick up my bags, leave the stock market, and I would move over to the bond market, unpack and live there for a little bit.

Derrick Kinney (20:22):

The bond market though is not getting much fanfare. And so instead of that, I think an alternative to consider would be something like what they call the Aristocrats index, for example. So here you’ve got the big blue chip [inaudible 00:20:36] type companies that could they go down in value? Yes. Have they? Yes, but they don’t tend to fluctuate as much as the tech sector or the cryptocurrency sector, and they pay an attractive dividend. So if you can visualize right now just a pie in your mind. One slice of that I think goes to something like the dividend Aristocrats index, because they’re big blue chip companies. And keep in mind, Clay, my mentality is that while we do see fluctuations, don’t bet against heavily incentive driven, highly paid, motivated driven male and female CEOs of publicly traded companies, because there’s simply too much at stake for them not to find every possible way to grow that business, okay? So that’s my mentality going into this.

Derrick Kinney (21:25):

So if you disagree with that, this may not be the best strategy. If you feel like, “Hey, the US capitalistic society and economic systems are inherently flawed and will not improve at all,” you may want to look at some other alternatives, but I think that has a good basis there. The other thing I like to look at are currently out of favor stocks, and there’s plenty to choose from right now. Before I go there, I think it’s very important to pick the voice that you are going to listen to. Right now, if I click on CNBC or I watch Cheddar News, or I watch Bloomberg or any of the shows where there’s experts on there, there may be 10 people that pop up and they tell you 10 different things.

Derrick Kinney (22:05):

Now I’ll tell you a quick humorous story. Back in the day, Woodrow Wilson who was a president a long, long time ago, would often have economists come into the Oval Office. And he would ask them, “Give me the outlook on what the economy’s going to do.” And one economist famously said to the president, “Well, Mr. President, on one hand, this is what could happen. But on the other hand, this is what could happen.” And without missing a beat, the president said, “Listen, I think I need a one armed economist. I want to know exactly what’s going to happen.” And the bottom line, there’s nobody there. I mean, even this week we saw the treasury secretary admit, “I think I might have missed it on inflation.” When does that ever happen? Or the president say, “We might have been a bit slow to respond.”

Derrick Kinney (22:46):

So the bottom line is when we see the so-called experts admitting they’ve missed it, that instills no additional confidence in any investor at all. But I think if you can stay in the game, it does create opportunities. And what I think about right now would be you think about with what’s going on in Ukraine, you have to think about energy. You have to think about oil. You have to think about those ancillary things where you could benefit bias spike in energy prices. Or you think about the big move to electric vehicles. You think about lithium. You think about these alternative energy source companies. SolarEdge for example was up huge the other day. All of these are stocks to keep an eye on and ask yourself, “Am I willing to go through the highs and the lows of these investments?”

Derrick Kinney (23:35):

But what I will say this, right now, there’s so much focus on the buy and hold strategy, Clay, which long term I have no problem with but I think investors, and I talked about this on my book Good Money Revolution and the four lanes of investing in this far left hand lane, I call it the play account. I think you’d be wise to pick out if you’re going to go into oil for example, or pick out a more volatile stock, pick out when you buy it. And when it hits this point, I’m going to sell it. Because I’d rather you tell me a story about, “Boy, I sold out too soon” than, “My gosh, I just lost everything. I have nothing to show for what I gained.” Now, that’s going to fly in the face of what a lot of traditional financial advisors tell you, but I think the game has changed. And when the rules change, if you don’t change as an investor, you’re going to lose that game time and time again.

Clay Finck (24:24):

In getting to know you, I know you’re just huge on community building and developing those relationships with those around you, especially with many of the clients you’ve developed relationships with over the years. And sometimes in an inflationary environment, it can almost feel like it’s us versus the world. You’re going to the grocery store and you’re paying a lot higher prices for groceries or a lot higher prices for gas. How can people work together and work with others and figure out ways to overcome this difficult time?

Derrick Kinney (24:55):

Well, I think that worries about the economy and inflation causes isolation. There’s so many things right now that can cause people worry. I mean, if you put money into an investment even six months ago and it’s worth half of what it was, that can feel embarrassing, it can feel overwhelming. It can cause a lot of concern. You can even question, “What am I really good at investing as much as I thought I was?” That whole recency bias can really burn you. And what I would tell people is this. Right now more than ever, it’s important to have coffee with people you respect and to deepen relationships.

Derrick Kinney (25:31):

I’ll give you two examples. Prior to this podcast, I just had coffee with a gentleman. He’s about 30 years old. Again, entrepreneur, has a lot of ideas. He likes to bounce ideas off of me to kind of just talk about, “Hey, what are the pros and cons of this and so forth?” And as we talked, what I’ve learned over time, right now Clay, I’m 53 years old, okay? There was always this adage growing up, [inaudible 00:25:55] like this, “People older than you are always wiser than you, and they’re the best people to learn from.” This is no disrespect to people older than me listening right now, but all that means is you’re simply older than me. It does not guarantee that you are wiser.

Derrick Kinney (26:12):

Now I’m not saying I’m all wise. All I’m saying is, don’t assume that. And so what I’ve realized is if you want to be a person who really takes advantage of opportunities and is learning and in a learning mentality, you need to meet with people who are younger than you and older than you to hear both sides of the story. Because I’ve learned so much from people younger than me on just their drive, their initiative. At 53, there’s mistakes I’ve made in my life and I’m like, “Oh, that might cause me from not taking the risk I should.” But someone younger doesn’t have that backstory and they want to go full bore in and it gives me a fresh perspective of opportunity, okay?

Derrick Kinney (26:51):

Well, I’ll tell you another quick story. So I was having lunch at a recent Salvation Army event, fundraising event. This was about five years ago, okay? I sat next to a young gentleman and he began to tell me about how in our local town he was basically creating vacation rentals here in town through Airbnb. And I thought to myself, Clay, this was honestly my thought, “What? Who’s going to come to our town and rent a house here? That makes no sense. This isn’t New York city or Florida or LA or Disney World.” And it made no sense to me. Now, five years later, he is the top Airbnb host in our local area because he was ahead of this curve. And my mind wasn’t ready to receive an idea at that moment that actually could have benefited me tremendously financially.

Derrick Kinney (27:40):

And so I had a choice to make. I could either beat myself up and say, “Oh man, I missed out.” Or just say, “You know what? I missed out on that opportunity, but it better informs me to better listen to people who have opportunities and ask, ‘Oh, could this be a better one for me?’.” And so I would just tell your listeners right now, you can either fret about managing portfolio you’ve got, or think about “How can I take advantage of opportunities right now?” And I believe the best catalyst for that is to make more money. Managing your money’s important. Don’t get me wrong. But ultimately managing your salary as much as you manage your portfolio, I think will help you make more money and put you in more control of your future and future opportunities.

Clay Finck (28:23):

I love that Airbnb example you give. Many of these great industries today, we’re just like crazy ideas 10 years ago. Even podcasts. We’re on a podcast right now. The founders of this channel started TIP in 2014. I believe the founding story is somebody at a Berkshire Hathaway meeting told the founders, “Hey, you should start a podcast. You guys know this stuff really well.” And they’re like, “What’s a podcast? And now We Study Billionaire show is one of the largest stock investing podcast in the world. So it’s crazy where life can take you when you have that open mind and you’re ready to take advantage of those opportunities that are presented to you.

Clay Finck (29:00):

You mentioned you were 53, but you look like you could be a millennial. You were investing in the markets in 2000 and in 2008. It’s one thing to read about these events in 2008. I was not an investor in the markets during that time period. It’s one thing to read about them like I do. It’s another thing to actually live through them. I tuned into Bill Miller’s conversation with William Green on our flagship show. And Bill mentioned that the recent pullback feels pretty familiar to him because he’s been through so many pullbacks over the course of his lifetime. What are some of the biggest things you learned from going through those just gut wrenching experiences of a financial crisis?

Derrick Kinney (29:43):

It’s interesting because I would always see things through the eyes of my clients. And especially my younger clients, whether they’ve just left college, they’re entering their first job, they’re making their first big transition, maybe they’re about to get married, have their first kid, all of those are momentous events. One of the perhaps biggest momentous events people have had is the crisises that they’ve gone through at such a young age. I mean, you think about somebody who may be 30 right now, they’ve gone through at least they saw their parents experience the great recession. They’ve questioned stock market integrity and they’ve seen tremendous volatility. Now they’re faced with COVID situation. All of these cause people to really wonder, “What am I doing this for?”

Derrick Kinney (30:29):

One of the trends that I’ve seen over the past couple years is people want to be able to see and touch their investments. They see the 401(k). They know the importance of saving for the future, but I think many people haven’t been given a real picture or a vision as to what the future could look like because there’s so much volatility and crisis right now. One of the encouragements that I would give everybody listening is, to focus on the long term is important and have a vision for what that looks like, but I think the best way to control your future is to think in three to five year increments right now. Because so much can change in terms of your interests and your desires. Just like I mentioned the Airbnb example, now my antennas are red hot for those opportunities. Now I’m looking around. But it also helped me I think be a better thinker and a better listener to ideas that I would completely shut out or think as contrary to my own.

Derrick Kinney (31:21):

But even right now with different political beliefs and opinions out there, just because you meet with someone and you listen to them, does not mean that you completely agree with them and take on their philosophy. It just means you’ve made a new friend and your listening and your learning. And I think right now more than ever, smart investors want to hear all sides of an issue. And especially people who are just entering the investment arena. We know that about 50% or more of millennials hold some type of cryptocurrency in their portfolio. This is one of the first times they’ve seen that drop in value and they’re questioning, “Oh my gosh. Those voices out there that say, “Crypto is a fraud.” It’s not going anywhere. This is all a big joke.” I disagree with that personally. I just know that when the early explorers founded America and they were trade seen through the country, they’ve got their machetes and stuff, they’re blazing a path and they’re taking some arrows in the back. They’re falling down. They’re not seeing what the train looks like. That’s what Bitcoin is right now.

Derrick Kinney (32:24):

But oftentimes when you look back on early technologies, it’s a similar story. And so I think keep the number six in mind, if you’re going to go into something, I’m going to put a sixth of it in now. Over the next six months I ease into it because if it drops lower, you’re in a position to buy. I just think right now you want to have a buyer mentality and you want to think like a CEO in terms of where there’s opportunity. And oftentimes where there’s volatility, there’s tremendous opportunity.

Clay Finck (32:54):

Yeah. I’m with you. I’m really glad you mentioned Bitcoin. I’m not really into the ALT coins today. And Bitcoin, this recent volatility, I’ve been treating it more so as a blessing and taking advantage of that, fully knowing that it could definitely go lower over the next say six months or so. You never know what’s going to happen in the short term. I mentioned the 2008 financial crisis. I wish I could go back to my 15 year old self and tell myself to go buy whatever stock. It’s just like crazy hearing some of the stories of people getting these stocks for pennies on the dollar. I’m curious if you have any fun or interesting stories from then.

Derrick Kinney (33:33):

It’s interesting. When I think about my 15 year old self, definitely just don’t be like me at age 15 would be the advice I would give people. But when you think about your 18 year old self, you’re about to graduate high school, one of the lessons I learned pretty quickly as I left college and began to enter the workforce, is you have to always be your best advocate and you want to stay true to yourself. And I want to debug something. So much advice was given to me. This is on Hallmark cards, it’s on these posters they give people a graduation and it says, “If you find the job you love, you’ll never work another day in your life.” And that is baloney. That is completely false. You’re still going to work. And you’re going to question yourself, you’re just working most of the time for yourself in a field that you believe in that can offer you quite a bit of rewards. But don’t think that until I have this job where it feels like it’s easy peasy every day, it’s not the perfect job. That is not correct.

Derrick Kinney (34:29):

If you ever read any biographies, I had Marc Randolph, the co-founder of Netflix, on our podcast about a year ago. He talked about success, adversity, success, adversity. It was just the pattern that looking back at a successful company and you think, “Oh, it had to be this mediocre rise to success.” No, they question themselves almost every day, multiple times a day. And I just think right now, my 18 year old self, as I think about opportunity, I want people to tell people right now that here is how success looks. You may wake up at 9:00. And if you’re going to conquer the world at 9:30, you’re questioning yourself. At 10:00, you’ve got a great idea. At 10:30, somebody says, “Your idea is terrible.” That’s what success looks and feels like. But if you can embrace that and embrace the struggle and embrace the fact that it’s a journey to success, that can really help people a lot.

Derrick Kinney (35:21):

There was another young woman that came into my office. She had not experienced the joy that she thought she would have in her first job. She was not given the promotion she thought she would get. She was not given the raise that she expected. And suddenly a year out of college, she was just like on par with everybody else. Then we began to talk through, A, it didn’t make sense to stay in her current job. And I said, “If you do, you’re going to need to go down the path of how can you increase sales? How can you reduce cost? How can you add more value?” But what she realized was the culture in the company she was at was not bringing out the best in her, the best version of her. And so in her case, it made more sense to leave the company.

Derrick Kinney (36:03):

But what I told her is, “Listen, don’t go to the company that pays you the most, because likely what you’ll find is a recreation of what you’re leaving. You’ll be higher paid and equally miserable. And that is not the way to do it.” So what I would do is ask the boss straight up, “Tell me about the culture that’s here. If I bring an idea to you, how is it responded to? How is the team, what are the opportunities here? Because you want to go to a place that brings you energy and doesn’t drain you energy.

Derrick Kinney (36:33):

I’m not going to name names here, but I was with a family member about a week ago. And I realized when I took them to the airport to leave, why was I so tired? I just had to be honest with myself and I said, “You know what? That person is an energy drain. No offense to them, but our values were not aligned. This was somebody who was more pessimistic, I’m more optimistic. And it felt like we were rubbing each other the wrong way for the past week. It doesn’t make her wrong and me right. It’s just different. And what I want people to listen right now is, we only get one life. You get one life. And I want to make sure that it’s filled with meaning and opportunity. So when you lay your head on the pillow at night, “Man, I gave them my ult day and I bet on myself. I did some things that Derrick said to do, and who knew they actually worked. I’m making more money. But more importantly, I’m doing more good in the world.” And that’s a way to really have that satisfaction people want.

Clay Finck (37:28):

We talked about your book in a previous episode. I’m going to link that episode in the show notes for anyone that’s interested, if you enjoyed this one.

Derrick Kinney (37:35):

Sure.

Clay Finck (37:35):

You mentioned that optimist and pessimist mindsets. I think a lot of people just have these limiting beliefs that they artificially set on themselves. It reminds me of one of my favorite books. It’s called The Magic of Thinking Big. If any of the listeners haven’t read that book, I highly, highly recommend it. It’s one I revisit just often. It’s such a good book. It has nothing to do with finance. It’s just like your mindset and your attitude towards life just has such a huge impact on just your happiness and the results you get out of life.

Clay Finck (38:03):

And it makes me think of, we’ve been talking a lot about rewinding the clock and thinking back to our younger selves. You have children in your household and you’ve had to your children about money, which is something completely different than being a wealth advisor, but you’re obviously someone that knows quite a bit about money and personal finances. So I’m curious, what was it like teaching your children about money growing up? Was it something that was really difficult? Something that was much more of a struggle than the wealth advisory job? Or what did that look like for you?

Derrick Kinney (38:35):

Well, I’ll tell you a funny story about that, Clay. So I had this realization, this was about 15 years ago, that I wanted to give my kids what my parents didn’t give me. This gift of how to manage money. And I thought, “Man, this is going to be this heroic moment.” My kids are going to be like, “Oh my gosh, dad has saved us from the perils of what lies ahead. Our dad is the hero.” So I go into my daughter’s room and I say, “Hey Lauren, can I talk to you about a couple things?” She’s like, “Sure, dad. Come on in.” And so I say, “Hey, I want to talk to you about investing.” I began to give her some ideas and so forth. And she had this look like, “You’re totally boring me.” And basically gave me the equivalent of the football stiff arm. And basically said, “Your time is over. Time to leave the room.”

Derrick Kinney (39:19):

Well, I walked out of there with my head kind of tucked between my legs, thinking, “I just got beaten down,” but I realized, “You know what? I need to change my approach.” And so at the time I was teaching a business club at our kid’s school and teaching them the soft skills, how to get people to know you, like you, trust you, and I said, “Hey Lauren, can I talk to you about something else?” I said, “There is this club that I teach at school that we give everybody their favorite candy each month. We talk about ways to make money. We review successful people. Now, I don’t think you’re going to have an interest in it, but I just wanted to let you know about it. That if you ever do, you probably don’t, come see me and I’ll be happy to tell you more about it.”

Derrick Kinney (39:54):

Well, suddenly, Clay, the hook was set in her mouth. She was like, “Well, dad, you said there’s candy and we talk about money and we talk about successful people? That sounds really cool.” But what happened was she was on the front row all four of her years in high school as I taught that class. And the lesson I learned is, with our kids we’ve got to position it as what’s in it for them, because what they think about money is fun. So many people grow up taking, “Oh my gosh, I’ve got to go to this job just to make ends meet, pay my car lease, pay my house, put food on the table. If I’m dating someone, I got to have money for that.” And that’s the purpose. What I want to do is have a family culture where we all think money is good and here’s why it’s good, for the good you can do in the community. And you’re going to make more money, which gives you more power. And we want our family to have multiple businesses.

Derrick Kinney (40:45):

At our household on any given weeknight, if everybody’s here, I’ve got four kids, my oldest daughter’s out of college, one is in college, one’s doing full-time real estate, and one is going to be a senior in high school, we’re brainstorming ideas. We’ve got real estate. We’re going to Facebook marketplace. We’re doing this. We’re doing that. It’s fun. I wanted to have that culture there where there’s no idea off limits. And don’t worry about if nobody makes money at it. Just let’s brainstorm some ideas and not think what is the idea, but how could we implement it? And then I’ll tell you this. One of the lessons I learned from COVID, Clay, was that as we would go around the table, everybody’s back home again during COVID two years ago, locked down. We’d go around the room and kind of do what we call highs and lows.

Derrick Kinney (41:26):

I’d ask each of the kids, “Hey, what was your high today? What was your low today?” And it gives them some insights into kind of what’s going on in their lives and keeps you in touch. And they would say, “Well, dad, what was your high and low?” I say, “Well, I talked to some clients today. Did this or that.” And it was just more of an average sort of milk toast response. But what I realized was when I came to the table and I said, “You know what, guys? You’re not going to believe this. Dad really screwed up today.” Well, suddenly you could hear a pin drop. All ears are on dad and they’re like thinking, “Oh my gosh, this is going to be good. Dad really messed up. I want to hear about this.” And I would tell them, “There was an investing decision I made that I lost some money on it.” Like, “What? You lost money?”

Derrick Kinney (42:04):

What I learned was, if we don’t share our money mistakes with our kids, we’re missing out on one of the greatest tools to help teach them how to work better with money. Because so many of us are embarrassed by it. So many of us that may have immense credit card debt or we’ve made bad decisions, we want to hide it and we want to have this facade for our kids that, “Hey, mom and dad, or mom or dad, we’ve got it all together financially. Everything’s good.” Well, kids don’t always buy that. And they see through that and you’re missing out. I think people learn more for more mistakes than they do from our wins. And it’s a great way to teach people really how to manage money that fits their unique situation.

Clay Finck (42:47):

I love how you mention embracing your mistakes and your failures. It reminds me my very first investment in the stock market. I bought this oil company back when I was like 18 years old. I was like, “Oil prices are really low. Eventually they’re going to come around and this company’s going to go back to where it was, which is way higher.”

Derrick Kinney (43:04):

Right.

Clay Finck (43:04):

That investment ended up just going completely bust. I learned a lot from that investment, but thankfully another one of my investments I made was in Apple. One of the big things I learned from that experience is even if you have these one or two or three failures, even if you have one big winner, it can more than make up for all of your losses. So learning from that experience and learning from your failures is something that I’m grateful I had early on in life. And I think it’s something that’s really powerful.

Derrick Kinney (43:33):

Well, I think Clay, you make such a good point. I’ll share another quick story with you. I was talking to my kids just this was like two days ago. My son’s on the couch. My daughter’s on the couch just watching some TV, kind of chilling out. My son says, “Dad, these investments you told me about are all losing money.” And my other daughter said, “Yeah, they’re all losing money.” And I said, “Well, dad’s losing money too, and the market’s down.” And I said, “Here’s the deal. You have a couple choices to make right now. And that is, you can either sell out and then lock in that loss. You can complain about it. Or get this. You can go make more money right now and buy more of that stock to average out the loss. That way you’re buying low.” And they’re like, “Oh, I hadn’t really thought about that.”

Derrick Kinney (44:15):

So what I think it’s important for us as parents and those of you listening that may have young kids, to begin talking about money in practical ways with them. I’ve done a couple things where you might take 10 pennies and you put them on a table and you talk about, “If I earn 10 pennies, let me explain how the process works.” You take out two or three of the pennies based on your income and you say, “This goes to the government. Three pennies off the table. And if you choose to give, that might be 10% of that, one penny goes off the table. Well, I’m going to save 10%. Well, suddenly from 10 pennies, now you’re down to five pennies.” They’re like, “Well, what happened to all the pennies?” “Well, that’s just how it works.”

Derrick Kinney (44:55):

And so you want to always be thinking about the difference between what’s called gross, which in many respects really is gross, and what’s net. And you’re in the gross game if you want to generate the most revenue you can, but recognize that you’ve got expenses and things you want to take care of automatically, and the net is what really matters here. So those ways where kids are doing it with candy, 10 pieces of candy, you take candy off the table. All of those are practical ways to really help teach our kids. But also as I like to say a lot, I want to teach our kids in this next generation to be the creators of money and not just the receivers of it.

Derrick Kinney (45:28):

Now, of no fault of their own, see if you can relate to this, your parents might have told you, “Listen, get a good job. Get a job with a 401(k). Get a job that you can stay at for a long time, because that’s what I did. Have that steady paycheck.” Well, so many people they might go to college, they might not. They get this job and they recognize, “Man, this is not tapping into even 10% of my potential.”

Derrick Kinney (45:51):

And so what I want to encourage people to do right now is ask yourself this question, what is the number one problem or pain point that you find yourself solving almost every single day? So if you’re at the office, you’re with your friends, you’re with your family, what do people often ask you to help them with? Is it, “Hey, I want to design a website. Can you help me with this?” Or “I want to write some copy. Can you help me with this?” Or “I need my vacation plan. Can you help me organize this event or lead this project?” And for you, you’re thinking right now, “That’s so easy. I do it all the time.” Here’s what I’m telling you. That could be the easy path to a side hustle because your focus group as I call it, the people who know you, like you, trust you, know you’re good at it. But now you can take that service out into the community and say, “Now I charge for this” and make money doing what you love.

Clay Finck (46:43):

Well, Derrick, before we hopped on this conversation, you were talking about how you were heading out for your annual sabbatical this weekend. Talk to us about why you even do this. When I hear about sabbatical, I think of like Jack Dorsey going out into the mountains and meditating and just like pondering what the purpose of life is.

Derrick Kinney (47:00):

Right.

Clay Finck (47:01):

Maybe clarify what a sabbatical is and why you do such a thing.

Derrick Kinney (47:06):

Well, not to disappoint your listeners, but I’m apparently not as deep as Jack Dorsey. So this will be, I think year six. What I do is I take about a week, and this particularly will be in Florida. Now I’ve gone to Boston, I’ve gone all over the country. It’s just an area that I want to go to. The purpose of this time is twofold. First of all, I ask myself three questions that are very, very important to me as a person. One is, how can I be a better husband? Number two, how can I be a better father? And number three, how can I be a better business owner? The purpose of this time is to get grounded on if I’m going to run really fast for 52 weeks in the year, it just makes business sense that I would take one week to plan it so I know what I’m running toward. So it’s very, very simply put.

Derrick Kinney (47:54):

Now, some of you thinking, “Boy, what would I do by myself?” Well, what I’ve done is I’ve worked up kind of a four to five day agenda of key projects that I want to put my brain to and do a deep dive on. One of the things that I found is with technology today, Clay, people tout all of the improvements of productivity people have, but the reality is there’s actually been very few productivity improvements because we’re all distracted. I mean, I’m guilty. I’m looking at my Insta, my Twitter, my LinkedIn. This is going to sound funny, but looking at those things never, ever makes me money, okay? But if I create content, if I create a podcast episode, if I create a course that benefits people’s lives, now I’m the one making money because I’m adding value to them.

Derrick Kinney (48:44):

So the point of all this is, in the hustle and bustle of the day, I plan this out a year in advance, but I’m ready to go mentally where I’m like, “This is an important week.” And I don’t want to get emotional here, but it’s just I feel at a deep level, a very deep level that I get one life. I get one life and I want to make sure that I am extracting all the potential inside of me so I can add value to people’s lives. But also, how am I extracting potential out of the people I care most about? My wife, my two daughters, my two sons, our closest relationships, how can I be an investor in them? Because if I am burning both candles or both the bends of the candle if you will, am I really the best version of myself? So I like to come back from this rejuvenated, excited, motivated, and it really drives me to achieve those goals.

Derrick Kinney (49:36):

Now, keep in mind, I’m going to come back with pages and pages of notes, but I’m going to prioritize “Here are the top 10 or 20 things I’m going to devote my attention to.” It’s helped me so, so much get clarity. And also it lets me dream big. I’m going to be going to the beach. When I’m around the water… I’m going to encourage you to pick an environment that brings out the best in you. If it’s the mountains, if it’s the water, if it’s wherever it is, it’s worth you spending a couple thousand dollars to get there because the ideas and the thoughts that may come out of your head could literally generate tens or hundreds of thousands of dollars, if not millions of dollars, but you have to go to a quiet place. You have to go to a place of serenity. And I call it the deep dive in the pool where you’re just one with your thoughts and just see where your mind goes. You might be pleasantly surprised.

Derrick Kinney (50:28):

And actually two years ago, July of ’19, that’s where I discovered my desire to sell my 25 year old well established financial planning business to take my message to a bigger audience. It was in that moment where I recognized I need to bet on myself. And I wrote out a list of what are the things I would enjoy doing the most and I wrote out, “Write a book, launch a podcast, coach, speak.” All the things I’m now doing two years later on the list was not continuing to be a financial advisor. It wasn’t that I didn’t enjoy it, but I just realized for this next chapter of my life, that wasn’t what was going to bring me joy.

Clay Finck (51:04):

I really like that. I just think it’s so cool. It’s just something you don’t hear a lot about. People trying to unplug and get grounded with what they really truly want to do with their life. It kind of reminds me of the Abraham Lincoln quote, “If I only had an hour to chop down a tree, I would spend the first 45 minutes sharpening the axe.” And I kind of see that unplugging as doing that. It’s kind of like getting grounded and figuring out what you truly want to do and what your purpose is in your life. Derrick, that’s all I had for you today. I really appreciate you coming back onto the show and providing just so much value to our audience. Before we close out the episode, I wanted to give you a chance to give a hand off to what you’re working on and anything else you’d like to share.

Derrick Kinney (51:45):

Well, Clay, let me tell you, being on the show a second time is a real honor for me. I love your show. I love your message. It’s a real honor to be with your listeners today. Right now, this is just a selfish plug, but my book Good Money Revolution is a new way to think about money. And people talk about, “Look, how much will you save for retirement or pay off debt?” And that’s the traditional way of thinking. I want to flip that script and talk about what is the life that you’ve always wanted to have? And what if, what if you could have that and make a difference in the community and in the cause as you want, and at the same time, you’re making more money? So to get this message in as many people’s hands, we have a link and it’s called goodmoneychapters.com, goodmoneychapters.com. You can download the first five chapters of the book for free.

Derrick Kinney (52:33):

Now, I didn’t write this book to make money. I did well when I sold my practice. I want to use this book to help other people make money, but really have the meaning in their life that they’ve never had money provide before. So goodmoneychapters.com. It helps get this message into your hands as possible.

Clay Finck (52:50):

Awesome. Thank you so much, Derrick.

Derrick Kinney (52:52):

Clay, my pleasure. Great to be on your show today.

Clay Finck (52:55):

All right. I hope you enjoyed today’s episode. Please go ahead and follow us on your favorite podcast app so you can get these episodes delivered automatically. If you’ve been enjoying the podcast, we would really appreciate it if you left us a rating or review on the podcast app you’re on. This will really help us in the search algorithm so others can discover the show as well. And if you haven’t already done so, be sure to check out our website, theinvestorspodcast.com. There you’ll find all of our episodes, some educational resources, as well as our TIP finance tool that Robert and I use to manage our own stock portfolios. And with that, we’ll see you again next time.

Outro (53:31):

Thank you for listening to TIP. Make sure to subscribe to We Study Billionaires by The Investor’s Podcast Network. Every Wednesday we teach you about Bitcoin, and every Saturday We Study Billionaires and the financial markets. To access our show notes, transcripts or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision, consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.