Dave Mull

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Author: Dave Mull

  • Kids, Money and Their Future

    I’ve long wondered why we as a society do not talk much about or teach our kids about money at a young age. Of all the subjects taught in school, it’s rare to find places that focus on personal finance and investing. Not only are we not purposeful about talking about it, in many cases we do the opposite. We tell kids not to ask what things costs, or how much we make or how much money we have. We as adults grumble about going to work and earning it, we grumble about not having enough of it, we stress about it, we fight about tit and do we really think our kids aren’t learning from our attitudes around it? It’s no wonder that kids often grow up not only with a misunderstanding of money but also a tainted view of it. I think it’s time we do our kids a favor and make real change about how to discuss money, finance, investing and wealth.

    Why It Matters

    A study done by TD Ameritrade showed that 41% of divorced generation Xers said that money was a driving factor. Another recent study by Nielsen suggests that between 50% and 75% of all Americans are living paycheck to paycheck. Which means that if you miss just 1 pay check you will have bills you can not pay. So for everyone that says money isn’t everything, I completely agree but it sure as heck is something and that something needs to be talked about. We also know the importance of starting young, not only in habit forming and understand but also because of the compounding effect that exists from how growth and interest work. For all these reasons and many more our youth deserve to get a better baseline understanding of how all of this works and not have to figure it out on their own in their 20s, post college with a lot of debt and stress already hanging on their shoulders.

    What Can We Do

    First, let’s take the stigma away by having more open, regular conversations about it with our kids. Share with them what you make, share with them what things cost, share with them the things you wish you knew when you were younger. Admit your mistakes and the things you learned from them throughout your life. You can also talk about work as a positive thing, something we should be thankful for. Instead of I HAVE to go to work lets flip it and say we GET to go to work. We GET to create something today, do something that adds value, earn a living to support your family. These are things to be grateful for.

    Second, let’s get tactical about sharing things like how a personal income statement looks and works. Have a personal balance sheet and help them understand the differences between assets and liabilities. Help them understand how credit cards work, the good and the bad and how easy it can get out of control. Share with them how discipline in life applies to financial decisions. Help them establish financial goals early and teach them about the effects of compound interest. Help them set up a custodial brokerage account or savings accounts and see what saving and investing looks like. Watch some YouTube videos, listen to podcasts or read blogs on the subject. Make it fun!

    Lastly, let’s put pressure on and talk to school administrators to bring in proven curriculum around finance and investing. I sometimes struggle to understand why we put our kids through hours of learning of the periodic table but almost zero on how to balance a checking account, how to buy stocks, how business works or the markets. We set our kids up with a primary focus of going into a job market, working 40+ hours a week for most of their lives until they can afford to retire without giving them tools to make that easier. Then if they are lucky they get a handful of years to be free to enjoy life living on social security, a pension (which few seem to get these days) and the money they worked hard to save along the way. That just doesn’t sit well with me these days. We should be teaching our kids how to build the life they want, how to chase their dreams, live with passion. How to create, innovate, add value and enjoy all of their days. Learning how money works early can make all of this easier.

    We can do this, our kids and the next generation deserve it. We will all be better for it.

    Related reading: What’s With the 401K? and Multiple Income Sources

  • What’s With the 401K?

    What is a 401K, how do I use it and why does it matter?

    A 401K is an employer sponsored account that is funded directly from payroll deductions. With traditional 401Ks, this money is taken out of your pay before it is taxed. This means it also grows tax free until you take it out in retirement. Many employers will work with a brokerage firm like Charles Schwab to set these up. The employee then goes in, selects how much of their pay they want to go into this account and how it should be invested within the account. In many ways it automates your savings/investing so you are paying yourself first.

    401Ks for most people are a great way to save for retirement. The automation allows you to purposefully move money into your investments before you really have control to spend it. Many employers pay packages include some matching on these dollars also. As an example, you may put in 5% of every paycheck and your employer would match that 5%. So I put in $200 and they also put in $200. I would strongly encourage anyone that has an employer match to make sure they are taking full advantage of this benefit. It’s a 100% return on your money that you could be missing out on. I’ve been very shocked at the number of people that do not do this.

    I understand that many people in America live pay check to pay check. The thought of taking 5% and setting it aside feels like something they cannot afford. I believe that you cannot afford NOT to do this. There are disadvantages to 401ks and I’ll get to those in a bit. But to not take advantage of employer matching will hurt you for the rest of your life. Downgrade your car, downgrade your phone plan, downgrade your lifestyle. Do it now, take advantage of this benefit and thank yourself in 20 years.

    Now 401Ks are not something everyone loves. They are often limited in what investments you can choose within the account. These are typically chosen by someone at the employer with support from someone at the broker. They are mostly mutual funds that to offer some diversification options but also can have hefty management fees. The limitations on these accounts make them not as appealing for many that like to be more active in managing their investments or who like choices. And one of the biggest selling features to them is that the money is put in before tax and grows tax deferred. The benefit of this is fueled by the idea that you will have a lower tax rate in retirement than you do in working years. So it’s better to pay tax then vs. now. A flaw to that could be that our government is growing and society is evolving in many ways and many believe it’s naïve to think that taxes will not be much higher in the future.

    Some employers also offer a Roth 401K. Much like a Roth IRA this is funded with after tax $ and therefor you pay your taxes up front and not when you withdraw in the future. Many see these as a better alternative based on future tax assumptions. I believe that everyone has to make the right call for themselves. There are benefits to both. I actually have some of my 401K in traditional and some in Roth.

    Another thing I have seen that I would like to caution people on is not speaking to a professional at the brokerage or someone else to help you learn about diversification within your 401K. Many people follow the set it and forget strategy. This means that when you first set up your account, you pick your investments (which mutual funds) and you go on never to really look at it again. This can be a problem based on how your matching goes, are there targeted stock funds included (like a fund that solely investments in your company’s stock), are some of the mutual funds performing way better than others, etc. etc. This can lead to your account becoming very “unbalanced” and not match what you originally set out as your strategy. Also, as you age, as your income increases, as your lifestyle and or goals change, you will want to review your allocation and account to ensure it’s still on the right track. This is another place a professional investment adviser can really add value for you. I would recommend at least an annual checkup to ensure all is still on track.

    At the end of the day, if your employer offers a 401K and especially provides a matching contribution a 401K is a great way to automate your savings/investing plan for the future. It’s really easy to say that you will do it on your own, but it’s even easier for life to get in the way. Those funds get spent, used up and never saved. Then you get to retirement and you have nothing put away to support the life you want in your later years. Social Security is often NOT enough to support your lifestyle desires. You can’t even access SS dollars until you are least 62 and with how long people are living and how few people are being born and paying into the system. Something is gonna have to change in a big way for SS to be able to support your retirement at all. Do yourself a favor and automate your saving/investing. Do what you have to do to make it work and maximize any benefit your employer is offering. Your future you is dependent on it and YOU ARE WORTH IT.

    Related reading: Kids, Money and Their Future and Multiple Income Sources

  • Top 5 Leadership Insights

    I’ve been very lucky in my career to experience some really great leadership as well as some truly terrible leadership. I believe both help you grow if you see them as learning opportunities and embrace a growth mindset. There is always something to learn whether it be things you would like to model or things you definitely do not want to model. I also know that as important as leadership is to me, I’ve not always shown up as the best leader in all situations. I’ve also read things from people like Gary V about the importance of hiring slow and firing fast. While that may be great advice, wow is it hard!!! After 20+ years of experience either being led or as a leader, here is my top 5.

    #5 – Honesty

    Sometimes being honest is really hard. I have at times struggled with the hard truths, sharing things that people may not want to hear and that may cause uncomfortable situations. As a young leader I wanted to avoid this and felt like “kindness” was how I would avoid these conversations. What I’ve come to appreciate and learn is that kindness is found in the honesty, even if it’s a hard and uncomfortable truth. And although my truth may not be the person you are leadings truth. It is most valuable for all parties to share it and be open and honest about performance and other challenging conversations. The only time better than yesterday to have these conversations is today. Being honest is being kind if you do it right!

    #4 – Be mindful of what you tolerate

    There is a saying, that the fastest way to cause a great employee to disengage is to allow a bad employee to get by with bad behavior. I’ve experienced this first hand as a leader and as an employee. The longer we make excuses for bad behavior or experience excuses made for bad behavior, the harder it is to build and nurture a great culture. I’ve found it’s extremely important to confront bad behavior early and often. Set a standard that this is not welcomed or tolerated. It will be difficult at times but will pay off in the long run!

    #3 – Every team member is different

    One thing I really love about sports, both playing them growing up but also coaching them as my kids grew up is that every person is different. This makes leadership hard but always extremely rewarding. What drives, encourages, engages or motivates one person may be very different from the next. Lazy leadership misses this fact and doesn’t care to take into account that each person has their own needs, desires and goals. As leaders we must know our teams, our associates as people. What makes them tick, what drives them and really work to understand these things so that we can show up in way that is best for them.

    #2 – Intimidation is OUT

    For a long time leaders would often lead out of fear or intimidation tactics. It was the hammer vs. nail approach. The leader was the hammer and the employee was the nail. Those days are long gone and leaders and organizations that fail to pivot will find themselves in a very tough spot soon if not already. Todays job market is extremely tight, top talent has so many options for employment. With remote work becoming more of the norm, even location restrictions are a thing of the past. Leaders that can embrace leading in an engaging and supportive way. By facing situations with curiosity and supporting team members as people helping them to grow and reach their own goals will find a much more trusting and engaged workforce. This leads to lower turnover, higher productivity and overall more business success.

    #1 – Integrity

    Integrity is defined as “the quality of being honest and having strong moral principles; moral uprightness.” This shows up in many different ways in the workplace. One way that I’ve experienced this many times is showing up the same way in meetings no matter who is in attendance. If it’s the board, the CEO, your boss, your peers or your employees you are the same person with the same message. I’ve experienced leaders playing the political game that is always felt by the organization as a whole. Also, personal conduct matters. Who you are in the office, outside the office and everywhere in between should be an accurate and consistent version of who you are. Similarly, holding people to different standards than you hold yourself to or that senior leaders are held to is a road to failure. No person should is every so important that they get by with low integrity behavior.

    I share all of these because leadership is something I am very passionate about and find great joy in while constantly learning and growing. Helping others and an organizations mission to succeed, grow and prosper is something I find as a calling. All of the above can be areas of failure, all of the above will go through seasons but if we learned anything from “Good to Great” and the history lessons of business, it’s that leadership and embracing the value of it along with a growth mindset is required for long term success. It takes real leadership to focus on these things at ALL levels of an organization to truly make a difference. People are often afraid to speak up, afraid to share their truth and their experiences. Create a culture where that is expected and rewarded where people feel safe. It’s been well documented that culture eats strategy for breakfast. And culture starts with and ends with LEADERSHIP.

  • Real Estate for Busy People

    I’ve long been interested money and investing. As someone who has had a steady job since 14 and enjoyed having a little cash in his pocket. Understanding how money works is something I’ve been on a learning journey with for over 25 years. From those first paychecks, to working in a bank through college, majoring in finance, interning at large institutional investment companies, being a trader at a hedge fund, working as a financial advisor to then working in finance at a fortune 100 company, things with dollar signs have always been around me.

    Real Estate was something until recently I hadn’t paid much attention to. Primarily because I wasn’t around anyone involved in it, it seemed like it was either for the super rich, shady people selling get rich quick scams or really handy people that could do some amazing flipping work. I’ve since learned that all of those are true in some ways, but there are also lots of other good people and good ways to be involved in real estate investing.

    I believe most people should have real estate as part of their investment strategy and there are lots of ways to do that. Given I don’t have the time, talent or desire at the moment to dive into physical real estate. I’ve started learning a lot about passive options. 1 of those that I have come to really like is the emerging crowd sourced options. Platforms like FundRise have opened up real estate for everyone and given people an option for investing in private deals through pooling money that used to be reserved for the ultra wealthy.

    What I love about the FundRise platform is how simple and transparent it is. You can see exactly what properties your money is being invested in. You can set your strategy, whether it be income or longer term growth and they do the rest. Real estate is a longer term investment and it is considerably illiquid. You should only invest in it with money you do not have a short term need for as it will be harder and sometimes costly to get it back out.

    Real estate is a way to help offset inflation and add some diversification to your investment portfolio. It’s been a tried and true way to support people in their path to building wealth for many many years. If you are like me and have interest in real estate but not interested in physical ownership and would like some diversification away from the equity market and reits, give crowdfunding a look. There are several very interesting options out there to consider.

    Let me know what you think and if you have any questions. Would love to share more about by experience. Passive Real Estate passive real estate for busy people and diversification

    Related reading: Multiple Income Sources

  • Favorite Books of 2021

    My top 5 books from this past year are:

    #5 – Truman by David McCullough

    #4 – Greenlights by Matthew McConaughey

    #3 – One Word That Will Change your Life by Jon Gordon

    #2 – The Subtle Art of Not Giving a F*ck by Mark Manson

    #1 – Thank Again by Adam Grant