Do you feel like you’re following the rules you’ve been taught about money but you’re still not getting ahead? Sometimes it’s best to have a contrarian approach. Ken Greene is a financial advisor and founder of Greene Finance and Insurance. Ken is with me this week to explain why it’s important to not only think about the future when it comes to your money, but also enjoy it today. Ken tells the story of how he managed to recover from many early financial mistakes by making a major life change.

Welcome to the Maple Money Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. Do you know that 57 percent of Canadian adults don’t have a will? Willful has made it more affordable, convenient and easy for Canadians to create a legal will and power of attorney documents online, from the comfort of home. In less than 20 minutes and for a fraction of the cost of visiting a lawyer, you can get peace of mind knowing you have a plan in place to protect your children, pets and loved ones in the event of an emergency. Get started for free at maplemoney.com/willful and use the promo code Maple Money to save 15 percent. Now, let’s chat with Ken…

Tom: Hi, Ken. Welcome to the Maple Money Show.

Ken: Hey, Tom. Thanks for having me on.

Tom: You have an interesting story I wanted to walk through. I’ll set this up that way I understand it. I think you had a goal to retire by 30 and you were already an engineer at the time. Can you tell us what that was like at that point?

Ken: Yeah, pure ignorance and stupidity really, was that goal. On LinkedIn, one of the things you like promoting was, Get Rich Slowly? 

Tom: Yes. Another site I’m part of is, Get Rich Slowly.

Ken: That must repel 95 percent of humanity. Who wants to be told they’re going to get rich slowly?

Tom: Yeah.

Ken: But there is a lot of wisdom to that thinking. I actually wrote a blog years ago talking to people I admire who love racing cars like Formula Ford, who say the best way to go fast is to start slow, learn principals and foundations to build a skillset. I’ve got natural science degrees in electrical and civil engineering. I’m a licensed professional in a civil discipline. When I graduated I was 22 and was working for a big telephone company. I loved what I was doing and was getting paid to learn. I always took jobs for the knowledge, not the pay. I thought it was awesome. I was out of school and getting paid to get educated. It was great. I loved it but I also had this big focus that I wanted to—not necessarily retire—that was bad thinking back then. I hate the word retirement, now. But financial freedom, financial independence—I love providing, creating and producing. I think most of humanity does because if you’re just a consumer, what an empty life. But, if you had that ability to have that relationship where you’re producing and consuming, it’s wonderful. I just wanted financial freedom and independence. I wanted a passive income stream that replaced my earned income. Sure enough, I didn’t hit it by 30, but in my early 30s I thought I was retired. And boy, was I wrong. I didn’t have any good financial mentors. I thought since I was good in engineering it just carries over to money. That was foolish thinking. It’s not a failure if you learn from it. Mentors I’ve surrounded myself with over the last decade have pointed that out to me. But those were painful learning lessons. So yeah, I literally went from owning a fair amount of land, having strong, passive, retirement income opportunities through different investments but the problem was, I had no foundation. I had nothing in savings. Everything was “pedal to the medal”. I thought, why would I put my money in a bank to make zero percent when I can leverage that out into all these investments? A lot of people, like business owners, have that kind of aggressive mindset. Entrepreneurs are optimistic which is great because it convinces us to go and do things. If we were more realistic we probably wouldn’t dive into that. But the problem without having the other side of how things can go the wrong way, things really went the wrong way. All of a sudden a strong, six figure income disappeared. Engineering stopped. All land development stopped. Public works projects stopped. All of a sudden my investments weren’t liquid. That was a very painful experience because I had no savings. 

Tom: When you say you were retired in your early 30s, was this something where you decided to quit your job or was it because of the downturn you were forced into retirement?

Ken: It was a combination of both. I love the engineering firm I was working at to be more specific. I loved what I was doing. I loved the knowledge I was getting. At the same time, I had no personal life. And this might sound materialistic but I’ve grown up in Annapolis, Maryland, in the summer. I’ve always been around boating. I love boats. It all started kind of unfolding around 2006 because my foolishness was, I had a brand new boat and was only in it twice because I was working nonstop. You work until 2:00 or 3:00 in the morning sometimes to meet deadlines and be professional and accountable to your clients in the engineering space. I got to the point where I thought I was retired. I had passive income streams. Checks were in the mail that were easily double what I was making with earned income. I just was getting impatient so I stepped out and then everything started going sideways. Then I stepped right back in and all engineering stopped. So that’s kind of really how it all laid out. I was a little premature in that decision making. I didn’t think housing was sustainable at that direction. This was way past the affordable index. And even though I loved what I was doing, there were just a lot of cookie-cutter, track homes and it wasn’t reasoning for me anymore. So, it was kind of a good time to peace out and I did. I literally sent an email to everyone saying, “I’m retiring. Let everyone know that I’m out,” and a year later everything went sideways. Investments—all of it went sideways. To be clearer on that timing, I did voluntarily step out so I could do more things that resonated for me on an individual basis that was not going to be competition to the engineering firm. I had all the passive income streams (in theory) all pouring in. This way I was financially independent. I was just doing what I wanted. But boy, did that all come to a screeching halt. I was a fool because I didn’t have anything liquid. That’s the problem. I can’t emphasize this enough to listeners of your show. I emphasize this with clients, learn from my mistakes. Before we get into any investment game… And you might have different rules of thumb for how you see things, Tom. But typically, for families here in the US, I want to see at least six months to a year’s worth of liquidity. When I see liquidity and savings, that’s money that’s safe and liquid that they can access within minutes to within a couple of weeks. That money is there. They have six months to a year’s worth of expenses. Anything above that, now you want to start get aggressive. You want to start chasing rates of return. You want to get into investments in the stock market or any other investments, real estate, et cetera, that’s your permission to start chasing those rates of return. But until you have that foundation, learn from my mistake. If you don’t have that liquidity dip into it can really bite you in the butt. And boy, did it destroy me because the real estate I had to sell at a substantial discount to survive, my primary residence gone, investments disappeared eventually too. Where, if I just had six months or a year’s worth of savings, I could have weathered the storm with no problem. 

Tom: One thing I just wanted to hop back on was the idea that you quit your job (retired) and then tried to go back to engineering again, what resonated with me there is I often hear the advice of, “You can quit your job and try to do your own thing, but don’t worry because you can always just go get another job.” That wasn’t really the case with you. Obviously, it was bad timing, but it’s probably worth being a little more cautious than this idea that you can just quit and there’s always a job that you can go back to. 

Ken: Yeah, I think that’s dangerous thinking. That wasn’t my thinking at the time when I left. I thought I was done with that type of work. But it’s dangerous thinking that you just quit a job and start again. If you had a successful firm, to me—the word loyalty is not the right thing. But there’s momentum, there’s knowledge. Things change fast. I still maintain my engineering licenses and education because I love it. I still have my fingers in it. But, if you had a choice where you’re an employer in your own firm and you have someone who’s been consistently working for 20 years in their occupation versus someone that goes in and out of positions, who are you going to choose? You’re putting yourself in a precarious position doing that. I’m not saying burn bridges, but I would not discount the importance of that partnership or employer where you just get out and think you can come right back in. That could be a dangerous strategy, in my opinion. And at the time, even though June was busy, it came to a screeching halt though. All that work stopped so what do you do now? I think that would be a dangerous strategy. 

Tom: Yeah, I agree with playing it on the safe side. I just hadn’t heard such a perfect example of that. There are a lot of people that have made that leap into whatever their next thing is and either they were successful or they were able to fall back on something. I haven’t heard many times where you didn’t get it either way. You didn’t get what you’re hoping to go to, but you also didn’t have what you thought you could fall back on. 

Ken: I was joking with my clients a couple weeks ago because the regulations in this industry are amazing. If you know a little bit about me, I love helping people with investments and saving strategies. I love teaching people about money. And I love teaching through all the mistakes I’ve made so they don’t have to go through that pain because I can tell you, it’s painful. I was joking with Jim a few weeks ago. I was tired of all the rules, the taxation, the regulations. I was sick of it. I wanted to go back to engineering but thought, “Who will hire you today?” I don’t want to say there’s not a lot of opportunity, especially in the engineering disciplines. But I was just joking. We’re just having fun. But he was serious. He would have hired me that day because things are crazy. You have these booms and busts in the industry and real estate has been incredibly hot. I literally watch, in the Reno, Tahoe area, my old house. It went up at $450,000 and within two years experienced true deflation. It was worth $180,000. Who says that couldn’t happen again? I’m not saying it will. I don’t have a crystal ball. Any adviser that claims that they do, don’t believe them. There’s a lot of similarity in many ways. It’s just silly town—trying to buy real estate right now in the US everywhere, but especially in places like Nevada, Texas and Idaho. In real estate you have 10, 20 people competing with each other for a house. There’s a limited supply. People are worried about inflation. They want to get some tangible asset. Just one block away there was a house that was a quarter million dollars a few years ago. Now they want $800,000 for it. It’s insanity, in my opinion. Hopefully, I didn’t go on too much of a tangent, but I do admire people that have the energy and optimism to just leave their job, go do things and take risks. That’s a big commitment. But I don’t want to discount the fact it can be flipped, too. If you leave that career, there might not be an opening for you again. 

Tom: And that brings up the other thing that you said about having liquidity up to a year. Do you mean the usual emergency fund set up? 

Ken: Well, it’s like safety factors and redundant systems. It’s a safety factor and a nice buffer. When you look at how companies fail, most of them fail because they run out of money. Again, entrepreneurs are extremely optimistic about what revenues will be. They break it down so what looks complicated is not so complicated, but then they completely underestimate expenses and all these other tangibles they know are going to come in. When I’m talking about, six months to a year, you can call it an emergency fund. But I also like to call it an opportunity fund because you can have just money sitting idle. I’ve worked with clients numerous, numerous times on this. I say, “Trust me. Watch what will happen in the next few years.” You create a bunch of liquidity and opportunities will seek you out. You don’t need to look for them because they’ll find you. There’s a lot of power to making zero percent . I’m very ignorant about Canada. Although I visited Toronto a couple of years ago,  it was the first time I actually left the United States. I got really brave, left the USA, arrived in Toronto and thought, “Wow, what a beautiful city,” but in the States, brick and mortar banks were paying a zero percent. 

Tom: Yeah, we’re exceptionally low. I don’t even know what it is right now, but it’s probably in the one percent or less kind of range. 

Ken: At least it’s not negative yet, right? 

Tom: No, no negative rates here. 

Ken: That’s good. Although when I point out to families, when you start looking at some of these fees that banks are creating, do you realize this is a negative six percent yield you’re making on this account? So, let’s eliminate these ridiculous fees. There’s a lot of power making zero percent just in the fact that it creates certainty for people. It allows you to make some mistakes. If you have that kind of money sitting liquid, opportunities will seek you out and you can make phenomenal returns because they’ll present themselves. I watched it back in 2008, 2009 with my clients when they were acquiring real estate. Real estate that was $300,000 or $400,000 then is now worth well over $1 million plus because no one was buying. It pays to be contrarian. Anyways, that’s the liquidity piece. An emergency fund, for sure. Like a mortgage—I overpaid my mortgage because that’s what we were taught way back when, well before I got into the financial industry. You always say, “Overpay your mortgage. Pay down that principal each month,” so I adhered to that strategy. But if I just took that difference and put in savings, I could have paid my mortgage a long time when all my income stream stopped. But when I called up the bank and said, “Hey, guess what? I lost my engineering job. My investments are tied up. Real estate’s worth nothing. I’ve overpaid my mortgage for all these years. Can I just not make my mortgage payment until I get a new job?” How do you think the banks respond to that one? 

Tom: Yeah, not so favorably. 

Ken: Most humans I’ve met like to have more control. When you are very strategic with creating liquidity, that creates more control for you, creates more options. So, yeah, an emergency/opportunity fund because I don’t want to sound too boring. 

Tom: I guess there is a pretty big difference in those—in that emergency fund. You would normally say, “Don’t touch it, make sure it’s actually for emergencies,” but your idea of an opportunity fund is a bit different. You can be contrarian. When you see something down for no long-term reason, you can realize an investment opportunity there. 

Ken: Here’s a perfect example. An outfit I know out of Texas, oil dropped negative per barrel last year. All of a sudden, no one needed oil or natural gas. Everything slowed down. You have all these developers that are pedal to the metal. They didn’t have liquidity. And all of a sudden they have to start selling off their prime assets. Then you have other people out there that have a bunch of money sitting ready to gobble it up. That’s a perfect example. If you start connecting the dots, Covid will end, the pandemic will end and the world will start turning again, and the oil will flow. Now, over time, over the next decade or so, we’ll have more and more options but I do like reminding I’m a huge fan of Tesla. I don’t know how many Tesla’s are rolling around in Canada—

Tom: We’ve got a few. Probably less than the US, but we have them. 

Ken: We have a Gigafactory that’s probably only 20 minutes from my office. I’m a huge fan of electric motors. But the ones that have the license plates that say, “No fossil fuels and no carbon, etc.,” guys, where do you think all that electricity is coming from? You’re not as environmentally friendly as you think. But I do admire it and I do think it’s forward thinking but, obviously, oil is going to flow for a long time. And what an incredible opportunity to buy stuff when it’s negative $30 a barrel and be in a position because you have this money sitting idle, and now it’s over $70 a barrel. That’s where being contrarian counts. Interesting opportunities will seek you out. 

Tom: No, I agree. I certainly tell people not to try to time the market. I won’t even guess when I should sell certain investments. I buy and hold. But I certainly feel pretty comfortable in buying when things are down. Sometimes it’s just obvious, right? About this time last year—maybe a little over a year ago when the market went wildly down, I took some extra cash and invested. I thought it would stay down a lot longer. I was concerned when it kept going down after I bought. But in the end, it all worked out. It went up quicker than I thought it would and I was ahead. 

Ken: Well, of course, you bought. You’re a financial analyst. Of course, you bought. 

Tom: I try to keep that in mind because I’m very numbers focused but I realize emotion plays a big part in it for people that are less robotic than me. 

Ken: I was talking to a financial analyst I work with about six months ago who has a brilliant mindset. I thought it was a great, the way he describes it. When you see these type of corrections in the market, it’s like a time machine. You’re getting to go back in time and now buy this really good stock at a way better price. The opportunity you wish you had several years ago; you took advantage of your time machine. 

Tom: I thought the exact same thing. I was buying some ETFs and some stocks, actually. But especially with ETF, I was looking at the graph of all the years and just drawing that line across and seeing it was 10 years previous. I can’t remember the exact year. It might have been 2009, 2010, I don’t remember. But I followed that line back to see how far back I could go when it was this price previously. And yeah, the time machine is a perfect analogy to that. If you wanted to buy that stock or ETF over the past 10 years, there’s never been a better time than right that day. That makes perfect sense to me. When you hit 2008, 2009, you mentioned all your investments were kind of going the other direction. What all were you invested in? Was it mostly real estate? What was it looking like? I’m a little surprised that you regret this so much. I get it. The value went down but you were doing the right thing at least by investing. From my mid-20s to early 30s I spent most of the money. I wasn’t quite as financially responsible at that point. 

Ken: Well, there is regret. It’s been over a decade ago, but it’s an important conversation to have. Quite often people are afraid to reach out to me because I look at everything when I’m working with families. And for some people it’s very humbling. It’s like I’m cutting them open like a fish. We’re looking at returns, income streams. Some people are embarrassed that they have so much debt. Others are embarrassed that they haven’t done enough in investments. You’re really exposed.  I tell this story a lot but there’s nothing to be embarrassed about. You could not have screwed up any more than me. I guess the part that’s a little painful for me is that I can tell you, when you have gone from having a good income, you’re able to do a lot of things that you want—and yeah, I did do things right. I did invest a lot of my money. I’ve always been very frugal. Some people would argue I’m cheap. I like to counter that, I’m not. When I do buy things, I do it right. I took the majority of my money and invested it. I just didn’t want to have any regrets. I can’t tell you how many people in their 50s and 60s say, “Oh, if I only bought this land… If I only did that…” I didn’t want to be the person who says that. I didn’t want to live my life that way. I want to go out and get after it and just have great success stories. And that’s how I teach my clients on my show, my podcast. No matter what, we’re still making emotional decisions. You can use technical analysis to go back on that ETF 10 years to see this is a good buy. We’ll use math, science, technical analysis and your skillset to still make an emotional decision, right? I mean, there is good science behind it. But at the end of the day, you needed that to feel good about moving forward. 

Tom: Yeah. And I did have those feelings; things you wish you didn’t miss out on. Maybe I should have bought an investment property in 2008 or 2009. Maybe I should have bought Bitcoin back when it was super cheap. I still don’t recommend it as an investment but I knew about it a long time ago. 

Ken: Bitcoin?

Tom: Yeah. 

Ken: Let me clarify what I mean by that. I don’t have regrets. I just lost time, that’s all. And I’ve learned from it. It was great. And the real value is I can use myself as an example for people not to make. There’s a big difference between ignorance and stupidity. I was ignorant. Now, those who get educated on certain things and still make that poor choice? That’s just stupidity, right? I think the more education, more data and ideas we get from people and good mentorship, we can make very smart choices. We’re still going to make some mistakes are in there. We’re going to miss out on some investments. My mistake, which is fascinating to me because engineers are usually very conservative, is that I was just so pedal to the metal and so optimistic. What I invested in, big time at the time, was oil—natural gas, because it absolutely made sense to me. When I was getting in, these investments were profitable at $25 a barrel and then a few years later went to $100 a barrel. My problem is, the engineers I work for, I always trusted because they are professionals. I didn’t realize how messed up this financial industry is. Back then you just figured people were telling you the truth. This might be a shocker to you—it probably doesn’t exist in Canada, but in the US, there’s a lot of financial advisors. There’s a few I really get along with. I always joke that the 99 percent make the one percent look bad. Unfortunately, back then, I got in with some bad players. You’d be amazed at what could be a phenomenal investment in the energy sector. There’s a lot of bad players in the industry. They’re raising money. They make money right up front. It doesn’t matter if the oil even produces. These are things back then where I got the right idea but with the wrong people. It was back around 2004, 2005, 2006—around that time frame. That was one thing I was invested in. I had a fair amount in the stock market and real estate. 

Tom: By saying wrong people, do you mean people running companies you’re investing? Or did you have an advisor giving you advice to buy these? 

Ken: No, I was working directly with brokers soliciting. When I was 22, I went to your typical financial adviser. He told me how he was educated and his whole process. He knew my income. He didn’t know my economic position, my debts— didn’t know really much other than my income but said, “Hey, you should put this percentage into an IRA.” That was it. That was our discussion. Now, I don’t know exactly how it works in Canada, but you have some type of qualified plans, I believe. 

Tom: Yeah, yeah. Different names, but we have different tax shelters and such. 

Ken: So essentially, they put me in this qualified plan, which, by the way, I always joke is a marriage in hell. Not that they don’t help out. They can be immensely powerful. But, as a go-to for someone right off the bat, I think can be a dangerous strategy. Here I am being told to get into a qualify plan, which is just created by the government in the financial industry so I joke it’s like a marriage in hell. Between the government and the financial industry, what are they doing? You think they create it for the investors benefit? Do you think maybe they might have created it for the federal government in the financial industries benefit? And so here I am being told to put all this money into 401ks, IRAs, no real education on the movement and the importance of cash flow and all these other pieces with money. Meanwhile, he gets paid his commissions and/or assets under management fees to put me in this qualify plan. Now I’m in this plan that I’m putting a significant amount of money into and I can’t touch it until I’m 60. And I told him, “Wait a minute. What if I’m going to be dead at 40? I’m putting all this money in but I want to use my money today. This makes no sense to me.” But he was a successful realtor. I concluded that would carry over to him as a financially successful adviser. So, I did it because I trusted him. I thought, “Man, this guy knows so much.” Then a month later, I’m told, “Hey, you got good credit, good income. You should go get a 30-year mortgage. Go buy a house.” It’s all the same industry—the banking industry, the investment, financial industry. They’re all the same, in reality. I make fun of myself. I’m really good at making fun of myself. I put all my money with my advisor on these qualify plans. And again, I can’t emphasize, they have their value. It’s just that he didn’t look at anything else. He didn’t look at my cash flow. He didn’t teach any other sound principles. He didn’t say, “Hey, you should have X amount to sitting liquid,” these types of things that would really make a difference for me because he was my mentor. I was paying them. He’s my financial adviser. Months later, I go get this 30-year fixed mortgage and thought, “That’s great. I just gave my money to the financial industry a month before and a month later, they’re lending me my money back for the next 30 years. They’ve just got these straws that are sucking away my money. It’s brilliant. All this earned income going to them and I’ll get to go retire at 60 with my wife and go to the beaches. Where most clients I work with, I say, “Would you like to go with your beautiful wife, spouse or husband to Hawaii or whatever and really enjoy it? Would you like to go now in your 20s and 30s or do you want to wait your 60?” And every client says they want to go now. A physical therapist I had a few years ago said, “Well, I want to go now and when I’m 60, with my wife.” When you watch how the industry works you’ll see that what they’re teaching their clients to do, they’re doing the exact opposite. It was really profound to me, when I got in this industry is, I’m just going to teach my clients to do what the industry is really doing and how they can apply that process to their money. I might have gone on a little tangent there, but is that helpful? 

Tom: Yeah, no, it’s interesting. What I’m not sure of, though, is what do you advise people then? You sound a little anti-bank. Am I right? What’s your current philosophy on this? 

Ken: Oh, I really admire the banks because I cannot think of a more profitable industry. 

Tom: It’s great to invest in. 

Ken: Can you imagine if you had your own bank? I don’t know what’s allowed through fractional banking in Canada, but in the U.S., it’s at least a 10 to one ratio. They relaxed those guidelines even more during Covid. It explains every boom and bust we have in the economy. When you see how banks make money, it’s brilliant. It’s OPM (Other People’s Money) which, by the way is a great movie with Danny DeVito. You’re putting your money in. One bank is 0.1 percent here is Reno. They’re giving me a tenth of a percent, so if I give them $100,000, I’m going make $100 a year in passive income. I’m rich, right? But it’s safe and it’s liquid. I can access it anytime I want to. And they go lend it out to my neighbor literally so she can go buy a Tesla at $100,000… My money, right? And they’re living off the spread so to say (for an interest only example) they’re charging 3.1 percent. They owe me $100 and they keep the $3,000 on my money. Can you think of a more brilliant model than that? So, I admire them. But then they get to even lend out at a 10 to one ratio. They get to do that nine more times at least. That’s phenomenal. It’s a brilliant model. Now, if you and I did that, lending out $1 million with $100,000 in the bank—and we’re not even counting for float and then how it gets leverage and options at 100 to one. Then you get into currency at 10,000 to one. It’s absolutely amazing how it compounds. What a profitable model. Do they really have that much risk? 

Tom: Yeah, and then you can throw fees on top of that too. 

Ken: Yeah, they charge fees. Then it’s okay. I was arguing with the bank a couple of months ago. I really lost money with this argument because it cost me 20 minutes my life. I lost money because our time is worth it. But I said on principle, “I want my $5 dollars back. You do not get the charge me a fee for not coming…” They literally charged me a fee because everything is electronically deposited so they call it an inactivity fee. Because I wasn’t coming in physically to see a teller they’re going to charge me a $5 fee. Well, that’s insanity to me. You have to employ less people because I never come in so I asked them to waive that fee. It took me 20 minutes arguing. I said, “On principle, I want my $5 back or I’ll close this account.” That’s crazy. The banking industry, I really admire. The part I struggle with is that is that in elementary school, high school, college, we never learned about money unless through our parents.  We don’t get any type of financial education on the movement of money, how it works. Why is that? Then we go to advisors to learn about money, most of them are just simply great salespeople for the banking/financial industry. They say, “Give us your money. We’re so smart with it. We’re going to enjoy it every day and we’re going to give it back to you at retirement. But then we’re going to run Monte Carlo simulations and all these other things (that scare the crap out of you) but they’re really not going to give it back, because then you’re only going to want to withdraw three percent if you’re afraid you’ll outlive your money. That’s my beef with the industry. In the US, less than one percent have $1 million for retirement, at retirement. Yet the industry has done incredibly well. So, to me, there’s a disconnect. How could the financial industry, which exists to help investors and people create a lot of wealth, if they’re so good with it, how come less than one percent of families have enough for retirement? There’s a disconnect there, I would think. 

Tom: The idea of fees is something that has bothered me. I’ve helped out people I know personally saying, “If you got away from this adviser with a mutual fund and you’ve got all these layers of fees, you could simply just go into a robo advisor and you might pay a half percent fee. But at least by the time they give you multiple mutual funds and all the fees on top of that, you’re definitely going to do worse. But in the end, they didn’t they didn’t make the change. They took the time to ask me the question, but they didn’t make the change. I agree with everything you said about the banks but I think part of the problem may also be that some people are just still stuck in that “bank mentality” a little where you go to that bank for your credit card, your mortgage and everything else all in one place. 

Ken: To me, I’m very consumer loyal to a fault. I like relationships. I like lifelong relationships. I have this love hate relationship with the financial industry because we have access, I would argue, to the best products in the world. There is plenty to choose from. We have a smorgasbord of opportunities. The part I don’t like is there’s a huge lack of education that goes with it. I find too many advisors are very “product” specific. They have an agenda of what they want to sell. There are areas out there that I call annuity shops where they’re just going to push that client. Without even knowing the client’s situation, it’s going to an annuity. And that can be an extremely powerful product for the right person. Then you have others who push life insurance. They’ll push this and that. They’ll push the stock market, 401k’s and IRAs as the first go-to. I think that kind of agenda is really dangerous. For me, I just really like the education piece. I love learning. Every day I wake up, I feel like I know nothing. So, I love learning and teaching. I think you can empower people with a lot of knowledge so they can go apply it. And, I think having a mentor is particularly important. I think it’s great to have a good investment advisor, a financial advisor that’s going to keep you accountable. I just did an interview with a client at 6:30 this morning because he’s an early riser like me. We just sharpened that saw… What’s changed since last year? What have we accomplished? He’s done a phenomenal job. I think perfect strategies are done when you keep revisiting things at once a year. In the robo advisor’s space, I would say sometimes there’s a negative selection bias. A lot of people say, “Oh, I’m not going to hire this adviser because he just wants to do something extreme or outrageous like two percent assets under management fee. I’m not going to do that because that’s crazy. You don’t even know what this guy returns. These are examples; if someone is creating a 20 percent return and they’re charging two, and you’re netting 18, but you go to the robo advisor that’s a quarter of a percent and they’re making 10—who do you want? The 9.75 or the 18? You get a look at the whole picture and see what resonates and what value is coming from that. I’m not against fees being charged because, obviously, I don’t think you want to run a company as a charity. Obviously, we want companies to be profitable. We want individuals to be profitable. Profits, good. But if there’s a fee and it’s just putting someone into something and that’s it and there’s not all this value created with it, I think that’s dangerous. I would gladly rather be working with real estate brokers. Like these shoes I just bought. This guy spent an incredible amount of time for these silly shoes for hiking because my wife and I are going to do Whitney at the end of this year— it’s a big climb so I’d better get in shape. I came in with one issue for tennis shoes. He didn’t sell tennis shoes, but he still helped me for 30 or 40 minutes. Now, Covid is ending for the most part so I just want to see these businesses, especially local, thrive. He couldn’t help me, but he helped me anyway. There’s no way he’s going to make any money. But then I bought the hiking shoes. I’m sure I overpaid for those shoes. But did I, really? Because I got so much value out of my time with them. I’m not against fees or points but I am against lack of transparency and lack of value. I think if you educate people on their options—educate people to maybe go the robo advisor route, you provide them with a great education and then they’ll make an educated choice, right. Maybe not one you might agree with, Tom, but hopefully, they make an educated choice 

Tom: I should say, in that particular case, though, I’m also not against financial advisors at all. But in that case, they basically had them in so many mutual funds, which were not the cheapest way to go. They were also basically just mimicking a fully, diversified, ETF anyways. If someone was doing something more unique that was bringing in 20 percent, by all means. But this was just loading them into a bunch of these index mutual funds that include a fee.  

Ken: I just thought I’d go on that tangent a little bit because I’m very cognizant of fees. I told you I argued for 20 minutes for a $5 fee. I mean, I lost money, right? I’d like to think I’m worth more than $50 an hour. So, I lost money on that argument, right? Even though I got my $5 back. But yeah, I just thought I’d point that out because you see a lot of people who are focused on price, price, price, cost, cost, cost. And you’ll see someone in real estate, there’s an emotion to it… “I want that number on my house when I sell it!” There are very sophisticated investors and buyers who will give you that number, but it’s on the terms. It’s absolutely amazing, fees, costs, realtors, et cetera, all those pieces just always begin with the end game and understand what the total value is. And when you understand the spread of that, it could make sense to pay an outrageous two percent, three percent, or four percent fee. And that’s just speaking really extreme versus what it looks like with no fee. You see a lot of these trading platforms now, trust me, you’re paying for it. You’re paying for it. 

Tom: We focused a lot on all the mistakes you made before. 

Ken: Yeah, that was fun. Thank you. 

Tom: Thanks for bringing all that up. I did want to ask you, though, how did you turn that around? What pivots did you make? Was it changing careers completely? I assume that was part of it but what did that look like for you? How did you go from everything we discussed to where you are now? 

Ken: Yeah, I talk about it. It was really painful. It’s very humbling but you just own up to it. I made mistakes. Amazingly, my girlfriend at the time (now my wife) endured all that but it all worked out. I have a wonderful family. I was getting purged of everything but you can’t take my education away from me. You can’t take away my work ethic. I don’t like losing even though that was very painful. One thing I was going to mention earlier that I forgot was, anytime I got into an investment decision, even back then, I thought if anything goes wrong, I live with it. If real estate becomes worthless, the investments become worthless, the oil and natural gas joint ventures become worthless, can I still get up in the morning? And I said, yes, but I didn’t count on engineering stopping. That was a mistake, but all things went wrong at the same time. So, could I still get up in the morning? My conclusion at the time was, yes and I was right, I’m still alive. But I can tell you for the first years, it was really hard to get up in the morning. But what other choice did I have? I saw a great opportunity. I love the Reno, Tahoe area. I didn’t want to leave the Reno, Tahoe area. I grew up in Jersey when I was a kid. In the school years and the summer, it was Annapolis, Maryland. We moved out here when I was halfway through high school. I love the Lake Tahoe area. I just love it. I just love being outdoors. I’m not a night person, really but thought, what can I do to survive? It’s the first time I actually took a job or made a career choice, essentially, for the money. I decided to open up an insurance brokerage.  I was always fascinated by the stock market because I was studying a lot after hours. After I got my PE license, I spent a lot of money with mentors to learn how to trade in the stock market and learn options in the derivative markets and currency. That’s what I did at night. It was awesome. Kick butt during the day engineering then trading my own accounts at night. Now, by the way, there is some learning pain there, too, right? It’s amazing how emotion can kick in on your decisions. But when engineering stopped and there were no opportunities there, I saw a great opportunity to get into the insurance financial industry. I always wanted to learn about the stock market. I was so excited to learn. I quickly realized that majority are just really good salespeople so I quickly hated the industry, but I kept pushing. I was up at 4:00 or 5:00 in the morning. I was selling routers, running the insurance brokerage, coming home at night, calling my girlfriend at 9:30 or 10:00 as I was heading home just to say, hi. I was a machine. I would work every single day straight and just kept working and working and working. I remember my first month in December of 2008, I was super excited. I queued up my expenses and my expenses at the time were probably about $10,000 a month. Those were my liabilities where I owed money on. So, when that income stream went to zero, creditors also aren’t so happy with you. You go from their best friend to their worst enemy really quickly. I remember just studying auto insurance, and, oh, my gosh, all my stuff was wrong. I’ve got to teach the world so whoever comes to my door, whether they become a client or not, they need to know this was never taught to me by my broker. I thought I had unlimited protection. I had zero. And I was paying really good money for a company to write a check for a whopping $25,000 if I got into an accident. I had no idea. I just trusted what they said. They never educate me. I just had this work ethic and kept working and I was going to work my way out of it. Then you just you just get optimistic and eventually get better. My first month I sold an auto insurance policy, a home insurance policy, was getting my security license… Oh, and I sold two little term life insurance policies for this family. I was super excited. I think I made $350, tops. Keep in mind, I’m working 50 hours a week plus. But I was excited because that family said, “No one has taught us about auto insurance like this. No one’s educated us on home insurance. No one’s educated the importance to protect the family unit with life insurance. That kind of value I created and made a whopping $350, I was stoked because I did it once and knew I could do it over and over and over again. I knew I resonated for this type of family and there would be more families because like attracts like. I just kept doing it and kept doing it. After two years, I realized I still hated the industry. Engineering came back, especially on the environmental side so I was engineering a lot, doing environmental work full-time. I thought I was done with the financial industry too because, boy, did I hate the stock market piece as well. I got the securities license. I created value for my families because I was creating a strong saving strategy for them, saving them money, leveraging things in a way. And these are certain families that now I could pivot into a Roth IRA and 529s at the time. It’s creating a lot of value. At the same time, there’s so many things I wanted to do and under the broker dealer relationship, I had to get permission from up high to teach. They’d say, “Nope, you can’t teach this saving strategy. Nope, if you can’t teach this. Nope, you can’t teach options. You can’t teach any of these things.” I said, “Hey, I’m just going to teach them so they’re educated, empowered,” and they said, “No, you can’t do any of that.” Oh, my gosh, this is crazy so I’m out. Anyway, I was engineering full-time. I thought I was done, but I loved the clients and was seeing select clients at night. I was always accountable to the engineering work first because that was my employer. Sometimes I’d have to reschedule certain meetings because I had to get a project done, but I could not let go of helping families on money. So, in an industry that was driving me nuts, I just loved these relationships and the feeling I got making a difference. And that’s how I survived. I was creating value. I worked my butt off. I kept working, kept getting more and more knowledge, kept reinvesting back into myself. And now, my company, I’ve been running full-time for almost six years now, treating everyone that came through the door or reached out to me the way I’d want to be treated. That’s how we got through it. You just keep cranking away. What other choice do you have? That’s how I survived. I can tell you it wasn’t fun, but I am proud that I kept working away. Delayed gratification sucks. I don’t like getting older. That’s my only regret, Tom. I still wish I were 30. That’s probably the only regret. I wish I had a time machine. Or can we just get to be 100 or 200 years old and feel like we’re 30? That would be great. I’d be okay with getting older then. I just don’t like the aging part. But that’s how I survived. And I think applying just an engineering mindset to this industry has created a lot of value for the families and listeners of my show because it’s a different mindset. Engineering can carry over really well into this industry. 

Tom: Yeah, that doesn’t surprise me. In our world of personal finance blogging, there’s a higher than normal percentage of bloggers that have come from engineering backgrounds so there’s obviously some kind of connection there that makes people gravitate towards this. I’m glad you walked us through that pivot, because basically, no matter how bad things get, there’s a way to work through it, turn it around and make something new for yourself. Thanks for being on the show. And can you tell people where they can find you online? 

Ken: Yeah, anyone who wants to reach out to me, just go to engineeroffinance.com. That’s my website. And if you just want to listen to my podcast it’s, The Engineer of Finance podcast on Spotify, Apple, anywhere. You just Google engineer of finance podcast. You’ll know you’ve arrived because you’ll see this big green dinosaur. I hosted that show. I’ve been doing it for several years. All the stories I share are real, to teach a lesson. There’s no hyperbole. It’s just pure transparency. It’s a lot of fun. And, on my website, if you have any questions, you can always reach out. But I would say those are great places to go; engineeringoffinance. com. And the podcast, The Engineer of Finance podcast. 

Tom: Great, thanks for being on the show. 

Ken: Thank you. 

Thank you, Ken, for sharing your philosophy of looking after the future as well as the present when it comes to finances. Also, for showing us about how having a contrarian mindset can be a good thing. You can find the show notes for this episode at maplemoney.com/154. I’d like to take a moment to thank you for listening to the Maple Money Show. I appreciate your support in helping us continue to grow. If you have the Apple podcast app on your phone, can you pull up Maple Money Show and give it a quick rating? Even better, leave a review to let everyone know what you think of the show. As always, thank you for listening and I look forward to seeing you back here next week.