Hannah: Well, thanks for joining us today, Roger.
Roger: Thanks so much for having me, Hannah.
Hannah: Yeah, so I am so excited to have you here on the podcast. You are a financial planner and owner of lifelaidout®, a New York city based financial planning firm. But you have a lot of things going on. You have just released a book as well. First of all, how did you first find financial planning? How did you discover this, this field?
Roger: Yeah, it was out of my own need to try and get my personal finances in order. I started my career in investment banking, spent seven grueling years in that industry. And actually at the beginning of 2012, was unexpectedly part of a mass layoff. And so while I was in that industry, I knew nothing about personal finance and I just felt like everyone knew so much more than me. I almost tried to avoid it.
Roger: And then when I got laid off, all of this stuff started coming to a head of how many months of living expenses do I I have to live? How much money do I need? As I think about the next job that I want to take or the next opportunity, what kind of salary cut could I possibly take? And I think that’s kind of part of what got me into personal finance and financial planning, just my own need to understand what the possibilities were for me. So I actually started just blogging about some of the more basic parts of finance, like saving, cash-back shopping, credit card rewards and things like that. But after blogging for that for a while, there’s only so much you can talk about saving money. And so that’s when I started getting into investing, writing about investing, learning more about it, and then eventually going for my CFP and starting my own firm. So I’d say that I got into it out of necessity. And through learning about it, I discovered this interest in it and have continued on that path.
Hannah: So you got laid off from your job, you started blogging, you became a CFP. At some point you found another job that wasn’t in financial planning. So can you tell me a little bit about that?
Roger: After investment banking, I took several months off to kind of think about what kind of job was the right fit for me. And I don’t think I spent a lot of time doing this in college. But I was doing these exercises that I outline in my book of mapping out all of the jobs that I’ve had since high school and all of the major activities, and kind of mapping out what I was good at, what I wasn’t so good at, what kind of activities I liked, which ones I didn’t like, and then what kind of quality of life or what kind of life that I want to be able to live. And that exercise was pretty helpful in getting me away from investment banking and more toward a more normal corporate job where I could have a better quality of life but still be intellectually stimulated. And so later in 2012, I landed a job at Google, and I’ve actually been there ever since while continuing on the path of financial planning and doing my CFP and things like that.
Hannah: So you have a full time job at Google and you also got your CFP and you’re running a practice on the side and writing a book.
Roger: Yeah, that’s true.
Hannah: Well, and I think it’s just really interesting, I talk to a lot of career changers who have this idea of I need to quit my job in order to become a financial planner. And so it’s really interesting because you’re breaking that mold. And so I’m curious, looking at somebody who’s kind of like you, who’s interested in the financial planning, what’s your advice to them?
Roger: I thought about this as well at this career transition point, and there’s all these myths that we hear about with careers that I think they’re very detrimental and hinder you in terms of what kind of options you may have. Some of them that I used to hear are money and prestige are so important in a job. And so when I hear that and when I was trying to think about possibilities outside of banking, I was scared. I was scared to take any sort of pay cut, take any sort of title cut, and that really decreases the amount of options that you have. And I think the other one that hits straight on with what we were just talking about is this notion that everyone has one calling and you have to get all of your… one job has to satisfy all of your professional needs.
Roger: And I just think that that’s not realistic. That’s putting a lot of pressure on a particular role. And I think that particular myth might send people on this kind of like this treasure hunt to find this one job that doesn’t even exist. I used to think about this too, maybe I’ll get a business school and find myself and then find the one. But it was interesting, I spoke to a number of people while researching the book, and there’s a number of people that balance one or two or even three other roles. And I remember this one particular person saying that two jobs are better than one. What I figured out through the processes is that I’m actually able to do both of them better than if I only had one job.
Hannah: Are you just working a lot? Or how do you kind of balance? Or is there an ebb and flow to this? Or kind of what does that look like for you?
Roger: Well, things have changed as you know too, post-baby.
Roger: I think baby obviously takes a lot of time. But I’m very disciplined with my time and my wife sometimes is annoyed at me about this. But I schedule everything in my calendar. Everything, every personal and professional activity, it’s in my calendar. And I kind of a corner off early mornings to do any side hustle interests outside of Google. And then late nights or weekends as well. And when I put it on my calendar, it ends up happening. And so before I ended up scheduling with my calendar, [inaudible] for me to kind of aspire to work on planning in the morning or writing a book or things like that. But it just wouldn’t happen. But once I put it in my calendar, it kind of gave me a little more accountability.
Roger: I did that. And then the other thing is I found myself wasting a lot of time during the day in my day job too, just the way that jobs work, that people continue to put random meeting slots on your calendar. And I’d have a meeting, a 30-minute meeting, then maybe a 45-minute break and then another meeting. And so I’d have these weird 30 to 45-minute slots throughout the day where I couldn’t really do any meaningful work. And I’d just waste time surfing CNN or on social media. And so what I decided to do is bunch a lot of these activities together. So I would put holds on my calendar for two to three hours at a time and do deep work, whether it’s at Google, or before work, and then bunch all of my meetings together. And so that allowed me to decrease some of these awkward 45-minute stands in time there. But it also decreased my switching costs significantly.
Roger: Because one of the things that I found was that after I have a 30 minute meeting or let’s say like an hour client meeting, it’s kind of tough for me to like go directly into strategic work. I need, I don’t know, 15 to 20 minutes to transition. And by that time, half the time is already gone. So I think bunching activities together is super helpful. It decreases the switching costs. And then quitting all these things to come here have helped me kind of make more time without inventing more time.
Hannah: How has having a baby impacted your view all of that? Or has it just more reiterated kind of that perspective?
Roger: I think that things are going to come to a head at some point where I have to choose or do less stuff just because there’s a certain amount of time it takes to take care of the baby, before, during, and after work. And certainly now, when we’re all in shelter in place, that is a bigger part on my schedule right now. And so it’s going to force me to choose. Some of the things that I’m interested in but may be most interesting to me or most important to me might have to fall by the wayside. And I’ll give you an example. I was dabbling in real estate on the side for many years. And last year as I was writing the book, I was really short on time. And I had this 22 and a half hours of continuing education to get done to maintain my real estate license. And I kept delaying it, I kept delaying it, and I thought, “You know what? Is this really a priority for me? This isn’t that important to me if I keep delaying it, so I’m going to let this go. It was a good experience, but this isn’t part of what I want to be doing moving forward.” So I think a baby will just force me to prioritize even more.
Hannah: So I loved hearing your perspective on your career and kind of how you view your human capital, if you would, in just this different perspective. And I have to imagine that that impacts how you do financial planning. So can you tell me a little bit about who is it that you serve in financial planning and what do you find that you’re usually doing for them?
Roger: My clients are typically couples that are either in their late twenties to early forties. Either they’re recently engaged, married, want to have a kid, and I think are talking about finances and goals for the first time, or it might be the first time that they start to actively or more deliberately manage their finances. And oftentimes the people I’m working with are trying to balance a number of different goals. They potentially want to have a baby or save for a child’s education while potentially buying a home and saving for retirement. And so a lot of my work with them deals with kind of how to balance these competing priorities. Well, I would say that first and foremost my role I would say is to kind of ask the right questions to get them to talk about situations or things that they might not have thought about, but then to try to put their needs and goals into a perspective that allows them to come to a decision. Oh, buying a home. How do we make that concrete? What are some of the apartment listings that you’re interested in? Okay, now, me as a planner, let me try to back into what that means in terms of how much you have to save a month, and what does that mean in terms of any sacrifices that you have to make to your current spending or other goals, and is that something you’re willing to do?
Roger: And so I usually work with clients either on an hourly basis or a one-time plan basis. And that helps me better manage my time as well. But I think it’s also quite efficient for them. And sometimes I’ll have just a single-hour session, but when I talk about an hourly session, it’s usually at least a two to three-hour session together. And before that, they would have a synced all of their backup documentation, whether it’s account statements, tax returns, budget, and any apartment listing or other extra stuff where I’m able to do some initial analysis so that we can make the most of that two to three-hour session.
Hannah: So you’re not actively managing people’s investments or anything like that?
Hannah: Are you finding that clients are coming back to you? Or is it really just like a one time arrangement, like we just kind of needed help with this one thing? Or are you finding that they’re repeatedly coming back to you?
Roger: So, to actually to add to the last answer, I don’t manage their investments, but I certainly look at their investments to get a sense of are you invested in the right place for your goals? Do we need to move these? And that kind of means what you’re invested in, what’s your percentage of stocks and bonds, is it passive/ active? What kind of changes should you make? Looking at asset location, where should you put those investments? And then making sure that their fees are as low as possible. Most of the time I’m… Well, all the time I’m for the most part recommending a passive investing structure with low cost mutual funds. And so I’m trying to create a portfolio for them that they’ll be able to manage by themselves moving forward. And so kind of the way that I think about that is, I don’t know, in my head, I think about there’s really three base structures, kind of like a one fund portfolio or a target date fund, the Boglehead three-fund portfolio, and then an asset located portfolio, which is much more complicated. And I think depending on a client’s interest and desire to do ongoing management, I will recommend one of those structures at the base and then kind of fill it in with here’s exactly what you should be buying, where you should be buying it, and here’s how to manage it moving forward.
Hannah: So one thing I really appreciate about what your perspective is is you start off with saying here’s what my need was, and so therefore I created this service out of that. And so I think that’s a very different place than where a lot of wealth management kind of comes from, of saying, “We’ve been serving clients who have several million dollars, and now we’re trying to expand that service model out.” How have we done this well in financial planning and where are the places that we really need to grow? Or what are we getting wrong?
Roger: Listen, I think the great thing about the profession and good financial planners is they have the education, they have the experience, they’ve seen a lot of different client situations. And so I think there’s the numbers piece certainly. But as we know, there’s not a one size fits all answer. And I think financial planners mostly are able to provide that additional context to help a client make the right answer for them. And I think it’s very hard to kind of collate all this info together and then try to map that with an individual person’s needs. So I think that is what the industry’s done well. I think that certainly there’s a lot of planners that have $500,000 minimums or $1 million dollar minimums, and someone in their thirties and forties might not have saved that much money and so they might not even seek out a planner. I was certainly in this case early in my career where I had some savings but not enough to meet any minimums. And I didn’t really know where else to go. I was Googling, going on CNBC, Bloomberg, trying to put all this stuff together for myself, which is extremely difficult.
Roger: And so I think what this particular cohort is interested in is making sure that their longterm goals will be funded while being able to save towards some of those short term goals, some that are necessary and some that are fun. Necessary might be saving for a child’s education or paying off debt. Something that’s more fun is saving for a dog.
Hannah: Yeah, I’ve never seen that in a financial planning planner, how people are taught, as a financial goal. I love that.
Roger: This came out in a recent plan that I did with this couple. They were planning to have a baby. So we started to map out all of the costs upfront and ongoing of what it would mean for a baby, which was super interesting because I had just gone through this too. So we’re kind of getting really into the nitty gritty of how much they would spend up front for the supplies, but almost also like checking on how much parental leave they had, what percentage of their salary was covered. But then also how much do they want to take? And then should we be planning for some amount of unpaid leave that they want to take as well. And so that was certainly part of the conversation. But this particular couple also wanted to get a dog at the same time. And so we probably spent 20 minutes talking about the lifestyle considerations of raising a pet and a kid at the same time.
Roger: And it’s pretty interesting, I think by the end of the conversation, they figured toward maybe holding off on the dog. So I think there’s the dollars and cents, but I think there’s some of those softer topics that we can help with as well. And certainly in this case it was more of the lifestyle, like, “Let’s picture what a typical day looks like from beginning to end of who’s going to walk the dog in the morning? Okay, well someone’s going to have to feed the baby. And then of course you’ll have the dog walker during the day. Are you going to have a dog walker at night? Or who’s going to, who’s going to take care of the nighttime feed or the walk? And how does this type of schedule make you feel?” And so we got into a lot of those more softer logistical, how will this actually work? Because the money stuff, I think it definitely was important because it might’ve influenced how much unpaid leave they could fund or things like that. But I think some of the more lifestyle considerations were actually more important in this case.
Hannah: Our clients don’t share that part of their life with other people. They do that with their financial planner though.
Hannah: So you wrote this book, Work Your Money, Not Your Life. Tell me what made you want to write a book?
Roger: Yeah, honestly, at first I was actually just mapping this out for myself the other day. I think I had seen some other people write books and honestly thought that could be something cool to do. It seemed like a cool experience, a good learning experience. And so I think I started very lightly looking into this back in 2017, but quickly turned it away and thought, “This is too tough. It’s really tough to get a publisher to publish your book. I’m just going to leave it at that and go on with my life.” But then I was listening to a podcast in early 2018, and they happened to be talking about writing books. And I thought, “Is this a sign that I should revisit this potential project?”
Roger: So after I listened to the podcast, I started getting into the nitty gritty of what would it actually take to write a book? What’s the process, how much time would it take? And then I think with all of the reading that I had done, I said, “Well, what is your unique perspective? What are you going to bring to the table?” And so I did a lot of research to figure out, well, what’s out there in the market already from a career and personal finance perspective? And yeah, what unique perspective do I have? And through that process, what I realized was… Because as I was reading these books, I wasn’t set necessarily on writing a book. So I wasn’t really convinced that I had anything new to say or new to put on the market.
Roger: But through that research, of reading all these other career and personal finance books, the one thing that stuck out in my head was there’s these personal finance books that are really good at laying out financial strategies. And a lot of them will mention how important it is to choose the right career or be deliberate about career planning. But it’s kind of a throwaway, it’s like a paragraph. And it’s kind of the same thing with career books. They’re really good at laying out the career strategies, how to manage your career, how to change careers. And a lot of them say, “Just make sure that this fits with your financial plan as well.” And it’s always a paragraph. And I thought, “What the heck?” So I have to read this career book and then do all this research to try to figure out what the right personal finance book is to kind of put these things, this kind of Rubik’s Cube of my life together. And so that’s kind of where I started thinking, “Well, why isn’t there a book that covers careers and personal finances at the same time and helps you balance these two areas of your life that really has an impact on each other, but all other facets of your life?”
Roger: And personally I was passionate about this because work and money were two topics that I struggled with for a lot of my twenties and early thirties. And so the book that I wrote in the book that’s out there is really what I wish I would have had in my twenties.
Hannah: So for somebody reading this book, what do you want them to take away from it? What’s your main message?
Roger: I think the main message is that you have more control to design the life that you want than you think. And certainly being deliberate about your finances can give you a lot of flexibility in the type of life you live and the job and then the type of jobs that you’re able to take. And part of it is not buying into some of these myths that I mentioned earlier of money and titles are super important, or, oh, you have to kill it at work or make a huge salary to be financially stable. And that’s just not the case.
Roger: And one example that I point out is just how your living expenses has a huge impact on how much flexibility you have in your life. And I lay out how keeping your living expenses low could make some of your financial goals cheaper, significantly. For emergency fund and saving for retirement, the rules of thumb are based on number of months of your living expenses, not how much money you make. But then I also point out, probably more importantly than that, that if you’re keeping your living expenses low, that gives you much more flexibility in the types of jobs that you can take. You’re not locked in necessarily to that very stressful job that you’re in now. You have the power and flexibility to restructure your life if you want.
Hannah: You know, this is coming at such an interesting time. I know you mentioned earlier, we’re all on lockdown and in my city, literally we were talking about before this and it was like, “Oh, well that just got extended another month.” And so there’s a lot of changes happening right now and we’ve seen the unemployment numbers going up so high. We see the importance of financial planning like never before. So I have kind of a two part question for you, because we have different audiences. So number one, as financial planners, how would you advise your clients right now who are looking at the possibility of getting laid off, and understanding that our role as a financial planner is not just about their money, it’s about their money and their life and their career? And then also talking to the financial planners right now themselves, as they’re looking at a lot of uncertainty themselves.
Roger: I think that for clients or people that are in unpredictable or unstable job situations, now’s a good time, I think, to start taking a more proactive approach to career management. So maybe you like your job and you’re just not sure if it’s going to be available. But perhaps this crisis has opened up your eyes a little bit to how your company, what they really value. And that might not be aligned with your values. So now could be the time while you still have a job to start trying to figure out, “Well, if this opportunity is not right for me or this opportunity may not be available in the next several months or several years, what is the right opportunity for me?” So doing that hard work of figuring out, “Well, what is it in a job that I like? What don’t I like? What am I good at and what am I not so good at?” And starting to map that into jobs, industries, and then reaching out to people in your network or friends of friends to start learning about the possibilities for you. So I’d say that’s what you could do if you feel like your job is unstable.
Roger: I think from a financial standpoint, certainly going through the work of if you haven’t already and you’re not working with a financial planner, figuring out what your financial situation is today, how much do you spend a month on living expenses? What is your net worth? What are the components of that? How many months of financial runway do you actually have, basically your net worth divided by your monthly expenses or liquid assets divided by your monthly expenses, and taking a closer look at your expenses to see what potentially could be cut out so that you could shore up your emergency funds in case you don’t have a job later in the year.
Hannah: You know, it’s so funny, and maybe this is just me being naive, but I remember looking back on the 2008-2009 crisis, and I was like, “I wish I would’ve had more money to put into the market.” Now as we’re going through this, I realize it’s not that simple, because a lot of times it’s the extra cash is really, really helpful.
Roger: Yeah, I know that planners often say, and I say this too, “You should have at least three to six months of living expenses in an emergency fund.” And you might ratchet that higher depending on how stable your job is and how stable your income is. And people will come to me all the time and they say, “I think I have too much cash on hand.” And they feel bad about it because of this three to six months benchmark. And I kind of give them permission at the end, I say, “If that’s what lets you sleep at night, I don’t think that’s a bad thing. Cash is actually good. You don’t have to super optimize your financial situation from having the least amount of cash or having this asset located portfolio if you’re not really going to want to manage that super efficient portfolio. And at the same time if having just three months of an emergency fund keeps you on edge, then, yeah, you shouldn’t feel bad about keeping more cash on hand.”
Hannah: We’re seeing all this craziness in the market, and who knows when this podcast airs, maybe it’ll all be resolved by now. I don’t know. But I’m curious, because I know you’re in New York City. What have you learned in this experience?
Roger: Yeah, I think that the world can change, your personal world and the world outside of you can change pretty quickly and pretty drastically. It’s interesting because in 2008, I was working at a bank, and I remember Lehman going bankrupt. And on that Monday, I went to the office and I packed up my stuff. And that whole day I was watching our stock price tank down to mere dollars. And I remember thinking, “Oh my God, this company matched my 401k in their stock. I was buying discounted shares through this ESPP program. Part of my bonus was being paid in employee stock.” And so not only was the bank potentially going to go bankrupt, a lot of my net worth had tanked. But I was going into the office to pack up my few belongings that I had there. And I had no understanding of personal finance back in 2008, so I was really scared.
Roger: Fast forward to today, I have a better understanding of it. So the day to day movements in markets doesn’t spook me, but there still is that uncertainty and there’s this anxiety to the situation that is nerve wracking, just the unpredictability of it. And so I could just imagine what someone else is going through where you have the health anxiety and the money anxiety. It’s a really unsettling situation.
Hannah: What would be your advice to new financial planners who are coming into the profession right now?
Roger: I think my advice is to learn as much as you can, try to be as proactive as possible to help more senior planners or people in the firm, try to come up with solutions or volunteer for projects, not necessarily to get up to a senior financial planner or full financial planner. I think do those things to really give yourself the experience and confidence that you can do a good job. But I would say that one of the things that I wish I did in my career earlier was kind of take a step back and say, “Is this really what I want to be doing? What is the end game for me? Do I want my boss’s job? What does that actually look like from a professional standpoint, but also a personal standpoint? What trade offs are they giving up? And are those trade offs that I’m willing to do?”
Roger: And so early in my career I just said, “Well, I want to keep getting promoted to the next level, and make associate VP, up to managing director.” And so I think I passively said, “Well, that seems like the goal for everyone.” And so my advice is be proactive about doing a good job in your career, but I think also be proactive about periodically taking a step back and evaluating is this the right fit for me, this position, this firm or this industry? And it’s okay to say no. I wish I had done that work and taken breaks more often to ask myself that.