Ep #82: The Truth About Money

In today's highly competitive mortgage industry, building profitable relationships with the real estate agents is essential for success. However, finding effective ways to secure agent relationships can be a challenge. With so many mortgage loan originators vying for the attention of real estate agents, it can be difficult to stand out and establish meaningful connections. Our new case study featuring loan officer Chris Cogill is a must-read. Chris has closed a remarkable 36 million in funded loans from agent referrals. And in this case study, he shares his proven strategies for building strong relationships with real estate agents and leveraging those relationships to drive more business. To get your hands on this resource, head over to LOKestudy.com and download your free copy of the case study today. You'll find actionable insights and practical tips that Chris used to close 36 million in funded loans from agent referrals and how you can too. Don't miss out. Go check it out right now, visit LOKestudy.com and download your free copy today. Hey listeners, Jeff Zimper, welcome to another episode of Mortgage Marketing Radio. I am thrilled you're here today and I am 100% confident that after today's episode, after you listen to this episode, you are going to be glad you're here too. You're going to be glad you're a follower, a fan of Mortgage Marketing Radio. So this week, I'm very fortunate and blessed to have a very special guest who I have to give a quick shout out to my friend, fellow Mortgage loan officer Ed Connerky, who on episode 71, we had a conversation about how to have advice versus price conversations and win. And Ed and I, our conversation largely focused on becoming financially literate and educating your clients about something financially related on every conversation as a point of differentiation. And one name came up in that conversation repeatedly. If you haven't heard that podcast episode yet, go back to that, right, it's episode 71, right. So you can just go to Mortgage Marketing Institute.com forward slash 71 to get to that. And then you'll understand what led us to this episode today. My special guest today is for 30 years. This gentleman has worked every day to teach people about personal finance. He's widely regarded as one of the nation's top financial advisors, having been named in 2016 among the country's top 10 wealth advisors by Forbes Magazine. The nation's number one independent financial advisor three times by barons and one of the two's 10 most influential figures in the investment advisory field today. Who am I talking about? I'm talking about Rick Edelman. Rick Edelman, author of nine books on personal finance, number one, New York Times best selling author with more than a million copies collectively in print. His first book, The Truth About Money, was recognized with an excellence in financial literary education book of the year award from the Institute for Financial Literacy and Gold Medal Axiom Award and on and on and on. And since then he's come out with multiple books. He's featured on a hundred talk radio shows across the country. He's at his own television series and specials on public television airing across the United States in Asia. And listen, you want to talk about a man making a positive impact in financial planning for everyday people. Today Rick's firm Edelman Financial employs 161 advisors serving more than 36,000 families in 43 offices across the country managing over 21 billion in assets. That is only half of the resume and that is some serious accomplishments. So I am just incredibly honored to have Rick as a special guest and I've been listening to and following him for a number of years on a previous local radio station of mine in Los Angeles and just you know, was always impressed with his grasp of financial planning. But probably equally important is his ability to take some of the complex concepts around financial planning and boil them down and break them down. So a simple guy like me, you know, can understand them and I'm just thrilled here to have Rick here today and our conversation covers a lot of different bases. Number one, you know, we talk about why a guy with such a resume with financial planning finds the conversation, you know, talking about money, boring, very interesting. And then we get into 11 reasons why Rick believes you should carry a big mortgage. We talk about using your 401k to buy homes or not. We talk about why most people still, even in the country where we've got a wealth of information, most people are still uneducated when it comes to financial planning. What are some things we can do about that? And we also talk about the future, right? How Rick sees mortgage planning professionals in the future, what their role will be, how to compete with, right, the influx of technology, threatening to displace us and what is really the core of success of anybody who is involved in financial advising of any type, whether it be financial planner, mortgage advisor or whatnot. We also get into a conversation about the future, which is related to Rick's most recent book, The Truth About Your Future. The money, God, you need now, later and much later. And there's some interesting and compelling reasons. I found this book to be very, very interesting through the concept of what the future holds, right? For instance, we're likely to live a lot longer. And so how does that impact our financial planning, right? We're likely to live much more healthfully and vital, right, with more vitality than we've had in the past. And so why this is important and how it impacts our overall investment strategy. And then of course, an interesting delve and conversation into technology and the dark side of technology. Very interesting as we get into this. And lastly, for those of you who are at all interested in stepping up your financial game, becoming financially literate and becoming more, having more of a fiduciary responsibility with your clients, maybe becoming, you know, getting involved to a degree with some financial planning aspects of your career, perhaps what about if you're interested in affiliating with Edelman Financial and some of the 40 offices they've got around the country? How many times do you talk to a client where they don't have a financial planner and you wanted to refer them to a competent one, or maybe looking for ways to partner with a financial planning firm such as Rick and his team at Edelman Financial? Well, we talk about that as well at the end and provide some links in the show notes for ways that you can connect with Rick and his firm. So all I can say is sit back and joy, don't be distracted, right? Take some notes if you need to and enjoy this conversation we have with Rick Edelman. Let's get into this week's show. Rick Edelman, welcome to the show. Oh, it's a real pleasure to be with you. Thanks, Jeff. No, it's my pleasure, man. I really appreciate it very much. You know, in the formal intro, obviously I spend a lot of time talking about who you are, your kind of background and accolades. And for me, personally, the impact I think you're having in the financial planning space is, you know, second to none, I guess is what I'll say because as I told you before, I'm a listener and fan and follower of yours for quite a few years. On the radio, you have made a huge impact with I know thousands of people across the country. But one of the questions I wanted to start with in doing some reading and preparing for this was, so looking at, you know, kind of your track record of success, if this is somewhat accurate, Forbes ranks you consistently in the top 10 of independent financial planners. Three times ranked number one over 30,000 families that you've helped 42 offices, roughly 16 billion in assets under management. But something I read about you said, you find the conversation of money boring? Well, we're a 21 billion now, but who's counting? The, yeah, it is boring. I mean, money is, I really, I like to brag that I got through college without ever having to take a business class, which is crazy for, you know, a financial advisor with six professional designations and lifetime achievement awards and all this stuff. But it's because it's not about the money. It's about our lives. My wife, Jean loves to say that personal finance is more personal than finance. And that's really the heart of it is that it's not just about keeping score, which is what Americans love to do, you know, how much money do I have, how much money did I earn, did I beat my neighbor and, you know, am I making more than him and all this, it's really, when we achieve our goals in life, am I able to get my kids through college and off to a good start in life, am I able to buy a home, am I able to retire and comfort, can I care for my aging parents, am I able to support the community? That's what it's all about. And it's not about expense ratio and, and P, ratio and technical charting. It's not about the markets. It's about life. And so, yeah, money's boring, but, but clients, that's the thrilling, exciting part. Ah, that's interesting. So I'm curious, then, you've obviously been in this game for many, many years. Financial education is something that's readily available out there in the world today. Why do you think that, and this is my perception, so correct me if I'm wrong, but why do you think most people still struggle with that area and having a financial plan and succeeding financially? Yeah, you're right that they're both those points. Yes, there's a lot of financial education available and yet people still blow it. When I first started back in the 80s, there was no outlet for financial education. There was Louis Rookhizer, if you know who that was, you're dating yourself. I do. Nobody can use the words to go out, but you can't spell his name, though. Nobody can spell Rookhizer. And, and you had kipplingers, and that was it. And so, when Jean and I started our practice, we began with financial education. We were teaching college planning courses to elementary school PTA groups, and, and then I started doing more and more seminars, and then I was invited to do the radio, and then I started doing TV shows, and now I've written nine books from the number one New York Times bestselling author, and, and on and on and on, because it's all about financial education. So yeah, today, as you said, now there's a huge amount of availability of financial education and literacy, and it's dramatically improved, but yet still most Americans are financially illiterate, most fail basic financial literacy quizzes. Why is that? It's real simple. Our parents will talk to us these days about sex, you know, my parents never did, but today sex is a common conversation at home, so is religion, so is politics, but money is still the taboo subject. Kids don't know how much money their parents make. Kids have never watched their parents complete a tax return. Parents don't talk to their kids about money. Schools don't teach about money either. Only 17 states require that high school kids take a class in financial education, and of the 17, only 14 require that they take a test associated with it. And employers don't teach about money either. They shove papers in front of you on day one saying, join the 401k, but they don't give you any financial education about why and how to do it. So we're all financially illiterate because nobody has told us of the need to learn how this works. So who does teach us, most often insurance agents and stock brokers who are trying to sell you something, which means you're not getting information, you're getting a sales pitch, and they love to intimidate you, obfuscate, they love to make you fear this subject. Many Americans have a fear of math in the first place, and they exploit that. They make you worry about things so that you're dependent on them. The fact is, personal finance and financial planning is not very complicated. Investment management is easy. There are basic principles. Anybody can learn. Anybody can implement. Anybody can maintain. It's inexpensive. It's simple. It doesn't take a lot of time, but Wall Street doesn't want you to know that. They want you to be their slave to their power, and it's not necessary any longer. So that's the crusade that Jean and I have been on for the past 32 years of trying to help Americans understand how money works and how to put it to best use for themselves. Yeah, and I'll have to say, you do a great job of educating on that, and particularly not making the conversation of money boring. If anybody has heard you're radio show, you're podcasting on TV, clearly you make it engaging and fun and talk about it in real world terms. So I think that probably, as you recognize, is one of the keys to your success, if you will, in terms of building a following. I appreciate that. So let's face it, the subject of money is boring, and if there are no visuals, there's no car blowing up that you can put on TV, and so I do my best to make it as entertaining as possible on the air. Talkers Magazine named me the number two most important weekend only talk show hosts in the country, and we're really honored to be able to get this message out across the country. Yeah, and what I love about you, if I'm correct, right? So you're, as I said, you've got over 30,000 clients that you help manage their finances over 40 offices across the country. But what stands out for me unique and different about you is that, you know, it's not the typical place where you've got to, you know, start with 5 million for an account or whatever to get with a financial planner. You're literally open to helping write the average mom and pop. Yeah, our household minimum is $5,000, and if you don't even have that, we'll work with you pro bono. It really annoys us that the people who have the expertise, who are best able to give you the advice you need, investment advisors, to often demand a $500,000 or $1 million minimum. I know an outfit that has a $10 million minimum, Goldman Sachs is $25 million. You know, most firms won't talk to you unless you're already rich because unless you're rich, they can't make a lot of money serving you. And we think that's incredibly arrogant. It'd be like a physician saying, I will only work with healthy rich people because poor and sick people are wasting, you know, they're too much work and asshole. It's crazy. We can't tolerate that in a society, but we do when it comes to money. So 1% of Americans have lots of access to financial advisors and accountants and attorneys, but the 99% of America who's working really hard to make things work for them are on their own. They can't find anyone to help them. And so we're devoted not only to serving millionaires. We've got a lot of millionaires as clients, of course, 21 billion assets, but we're thrilled to serve anyone who wants our help regardless of whether you have a lot of money or not. Okay. So let's pivot a little bit because we know our listening audience is mostly, you know, mortgage loan officers and they're in the streets every day. I think on a similar quest, hopefully, and that is to help people make an informed decision about their mortgage. How would you suggest for the mortgage loan officer listening right now? Because I see a lot of parallels to their role and to a role of a financial planner in terms of education. There's some advice or tips you would give them so that, you know, they could a, differentiate themselves by providing education and help fulfill kind of that mission that I think they can relate to. You know, it's really interesting. Mortgage brokers get a bad rap because people perceive them as salesmen. And they only deal with a mortgage broker because they have to. I mean, nobody wants to deal with a mortgage broker, but what people want is to buy a house. Right. They have to get a mortgage and that forces them to deal with the loan process. Nobody wants to. They have to. And they don't understand the mortgage process. Everybody hates the mortgage process because it's tons of paperwork, tons of time, lots of questions, often asked repeatedly. I mean, we all move a drill. And so mortgage brokers get a bad rap, especially because by definition mortgage brokers are doing something that American consumers inherently believe is against their best interest. What am I talking about? Your granddaddy said to you, owning a home is the American dream and owning it outright is what you need to do. Own your home, free and clear with no mortgage. That's the American dream. And that myth has been boisted on the American public for a hundred years. So everybody grows up saying, I want to own a home and I want to own it outright because that's the safety. And here, when they come along to my house, they don't have the cash for that half-million dollar house. They're forced to get a mortgage. So they're forced to do something they don't want to do to do something that is contradictory to what their granddaddy told them to do. And on top of that, the paperwork process is crazy. The fees are ridiculous. The exercise is time-consuming blah, blah, blah. So mortgage brokers get a bad rap. They're selling people a product that nobody wants. In fact, I think that mortgage brokers are heroes because mortgage brokers are doing two things that most people do not fully appreciate. The first thing that mortgage brokers are doing is providing the money necessary to enable you to buy the house. Without the mortgage broker, you're not getting that house, period, end of story. So that's the first thing. And if we don't help you buy that house, it's not only bad news for you, it's bad news for the entire country because this economy's biggest industry is the real estate industry. And it's built on leverage because nobody has the cash to build these buildings, whether they're residential real estate or commercial office, industrial, whatever. Everybody has to have the leverage to be able to afford these massively expensive projects. So the mortgage brokers make the world go round. That's the first part. The second part is something that I don't even think mortgage brokers fully appreciate. And I've been trying to spread the word within the mortgage community for 30 years. A mortgage, and I'm now particularly talking about home ownership, not necessarily corporate and commercial and all that stuff, because we deal with ordinary individual consumers at the retail level, mortgages for ordinary Americans are one of the most important tools available to help you achieve financial success. In our view, you should never pay cash for a house. You should get as big a mortgage as possible for as long as possible, a big 30-year mortgage as big as you can qualify for and never pay it off. No 15-year loans, no biweekly mortgage plans, no extra payments. You just get a big a mortgage as you can qualify for that you can afford, make the regular monthly payment, leave it at that, which frees up as much cash as possible, which you can then invest, and that's how you help create wealth. And it's gotten to the point where I've created 11 great reasons why you should carry a big long mortgage. It's in a couple of my books, it's in the truth about money, it's in ordinary people extraordinary wealth. I've got a 90-minute video on the subject. I actually have an article on our website for folks to re-vow tell you. It's very compelling information, and the nifty thing is, when I talk about why you want to get a big mortgage, people listen to me because they know I'm a fee-based financial planner. I'm not in the business of selling mortgages, I'm not a mortgage broker, I'm objective, I'm an independent third party saying this, when a mortgage broker says it, people think that they're full of conflict of interest, it's just a sales pitch, why should I believe you? So that's why mortgage brokers who know me, they know I'm a big fan of them and I endorse the work they're doing. And mortgage brokers are doing a terrific, valuable service for the American public. And so anything I can do to help mortgage brokers do their jobs, I'm happy to do because it's of such great value for the country. Yeah, I love that. And I know we're going to provide a link to people in the show notes so they can get a copy of that report 11 reasons to carry a big mortgage. But speaking of your books, I was reading about that in one of your books last night, and you have a great example in there about nervous and Nick versus smart Sam. And I think what you're hitting on here is kind of back to the original question. And I was actually thinking about this the same time while I'm preparing for this interview because you obviously have a team of financial planners under you that are dealing with people on a regular basis. And I'm sure you, just like the mortgage loan officer listening, they still need to, in their sales process, they need to differentiate themselves and I'm assuming, well, I know, just by who you are, one of the ways to differentiate is through education, right? Right. And so. And that's really the key. In other words, mortgage brokers, I believe, if you just go in with the sales page of, hey, let me give you a loan, you're competing with every other mortgage broker on the planet. What we have to recognize is that one of the mistakes that investors make is compartmentalizing. We've got a big, huge complexity in the world of personal finance. We have a lot of competing interests. I'm trying to save for retirement, but I'm also trying to pay for my kids' college. I want to buy a home, but I'm also, you know, got my need to save to help my parents. And anyway, we've got all these conflicting issues. We've got short-term goals and long-term goals, trying to lower taxes while maximizing returns, all this stuff. If you as the loan officer are only focusing on helping you buy the house, you are ignoring all the other elements of that individual's personal financial situation. So my view is you can set yourself apart from the rest of the mortgage brokerage community by being holistic, by looking at it from a bigger picture, by saying to the client, your choice of a mortgage loan actually has an impact on your retirement savings potential. That's a conversation most mortgage brokers will never have with their client. And when you begin to help them recognize that this is a bigger conversation, and you refer them to a financial planner who is like mine did with you, such as the advisors in my firm, the development financial. We can now work as partners to help your client, our mutual client, not only get the biggest mortgage possible, but simultaneously maximizing their opportunities for retirement success. And the client will appreciate this to no end, because now you're not just a salesman, pitch, and a product, you're now a trusted advisor helping to serve the client's best interest. And boy, what a world of difference that is. Yeah, that's such a great point. And I have to take a moment to give a shout out to Ed Connerky, who is a loan officer that I interviewed on the podcast, who's also affiliated with you, and what kind of struck a chord during our conversation was him becoming financially literate, and his goal being in every conversation to educate the potential home buyer on one thing that they didn't know financially before, as a point of differentiation. One of the questions he always asks to your point about the type of mortgage you choose is, for instance, somebody shows up in the call, yeah, what's your rate on a 30-year fixed mortgage? His question is, well, why do you want a 30-year fixed mortgage? Yeah. Just to start there. Right, exactly. Just to start the dialogue is the point, because we need to have that conversation about the bigger picture and how the mortgage fits in to the overall plan. I had a question for you on the 11 reasons to carry a big mortgage, because some people probably heard that and thought, well, you know, the new tax law, and I know you addressed that as well. So, how is the new tax law impacted, you know, the attractiveness of having a mortgage? No impact. I mean, everybody's looking at the fact that the mortgage deduction, especially on how equity loans is changed, lower tax rates reduces the value of the tax deduction. Of my 11 reasons, the tax break is buried somewhere in the middle. The tax deduction is not a big deal when it comes to the strategy. I mean, let's face it, most, I don't know if it's most, but a great many Americans get little to no tax break from their mortgage, you know, because of their income situation or tax situation or whatever, it's not because of the taxes. The number one reason for carrying a big, long mortgage is liquidity. What a lot of people do is they take 100% of their available cash and use it as a down payment and they mortgage the balance and the only reason is they have to, they have no choice because they've used 100% of their available cash, which often includes borrowing from parents or whatever, caching in 401k's, who knows what. It's a big mistake because if you have no cash, great, you've made the mortgage payment a little bit less, but if you lose your job or if you have some kind of other financial crisis, anything from the car breaking down to a medical problem or a marital problem, all of a sudden you have no resources. You have nothing to bail you out of that short-term problem you've got, whereas if you minimize the down payment, conserve your cash and invest that money. That money remains available to you, should you ever need it, and you can generate an income stream off of it to help you make the new mortgage payment, which is now bigger than always what it is. Liquidity is king. If you give up all of your available cash, you've got a really big problem. This is why, ironically, the less wealthy you are, the more important it is that you have a mortgage. I don't care if Bill Gates has a mortgage or not. It's not going to make any difference to his net worth. For the guy who's got a $100,000 income and 30,000 in cash, oh my goodness, giving that cash away where he'll never see it again until he sells the house of that, he's setting himself up for a real crisis. That's just an illustration that you need to think about this whole mortgage conversation in a manner completely different than you are used to. Are you a believer in borrowing from, you know, 401K accounts using investment money for the down payment on a purchase? No, absolutely not. There's one exception. Definitely not use any money from retirement plan assets. That retirement plan is for retirement. IRA is an individual retirement account, not an individual I want to buy a house account. So never touch those assets because retirement is far more important than anything else from a financial perspective. If you do have savings and investments, then sure that money is free game for consideration for use of the down payment. Absolutely. Especially if you've been saving and investing with the home purchase in mind. But if that savings and investments are also equally earmarked for other purposes such as your kids college fund or other reasons, then no, I'd be hesitant to doing that, which is again why we have to go back to the fact it's a financial planning process. And for that reason, we have to recognize how important it is that we look at this comprehensively and holistically and not just, oh, I want to buy a house and do whatever it takes, meaning liquidate everything everywhere, let's borrow from everything everywhere and make it happen. You might succeed in getting the house and you also might simultaneously succeed at destroying the rest of your financial life. Yeah, being house rates cash poor? Yeah, exactly right. And in fact, there's an important caveat or I should say piece of fine print to my advice of getting a big long mortgage as big a mortgage as you can get. You also want to get the cheapest house possible to maintain your lifestyle. In other words, my advice is not that you get the most expensive house. You want to get the cheapest house possible that meets your needs and then get the biggest mortgage on it. This is not advice to buy too much of a house. We've all seen that scenario where people buy more house than they can afford and they end up losing the house, think back to 08 when millions of Americans found that they had bought houses. They fundamentally could not afford. And here's a news flash for you. The mortgage industry got a lot of criticism back in 08 because so many Americans got mortgages that were fully levered and then they lost those homes in the 08 credit crisis. Not a single American in the country. Here's the news flash. Not a single American in the country lost their home because their mortgage was too big. The reason they lost their home is because they had simply bought a house that they couldn't afford. The mortgage is a smoke screen. I had nothing to do with it. If they had bought a cheaper house, if they had maintained better liquidity, they would have been able to maintain that property through the crisis. So make sure you don't buy too much of a house. And again, the mortgage broker can help there, counseling the client correctly. Exactly. That's what I'm just going to say. That's our opportunity to demonstrate, you know, use that word fiduciary responsibility, if you will. Right. But you've got to take some ownership in that you're you're settling people with the biggest out of their life. So it's not about making a sale. It's about putting them in the better place. Yeah. I'll tell you a horror story. Just a number of years ago, one of my clients, his parents died tragically in their 50s. He inherited the money and his kid was a high school dropout. He's now in his early 20s when his parents died. He gets this hundreds of thousands of windfall from an inheritance, a real estate broker hooks up with them and convinces them to buy a house for the full amount of the inheritance he got. $650,000. The kid had no job and convince them to buy the house and get a mortgage on it. And I said, when the kid told me about this, he was my client, the son of my client, I called the real estate and said, how can you give him this advice? He will lose that house. And the real estate agent said, all I have to do is demonstrate that he'll be able to make the mortgage payments for three years after that it's not my problem. And I'm like, this is the most horrific approach. The more admirable approach would have been to counsel this kid to say either don't buy a house at all or buy one far less expensive that you can in fact maintain. And so it's easy because there are some sleazy people in every industry, not just real estate or mortgages or investments, they're bad apples everywhere. Because of the bad apples, it's really easy for you to shine and set yourself apart. Ed Carnegie has done a great job with us. And he has set himself apart in his community as a mortgage broker who cares about your personal finances and demonstrates this with the nature of his advice. He's not hesitant to say to a client, you shouldn't get this mortgage, you shouldn't get this big alone, you should get a smaller loan, you shouldn't be buying bad expense in that of a house. Even though it costs him money because his sale will be smaller, his commission will be less, he's focusing on the client's best interest and clients love him for it. There's referral business, it's huge because of it. Exactly. So I think everybody would do well by following Ed's lead. Absolutely agree. Yeah, that even told me about a story about one of his clients where for three years they were just ditching the buy house and they came back to him about once a year and presented the financial situation. Okay, are we ready now? And it's like no, no, not yet, not yet. You said no to three opportunities to get, because you could have done the loan, right? But like you said, it's not the right thing to do. And they are so grateful to him for it. They have said thank you Ed, so much we would have been in a bad spot had we made that decision. And I mean, what does that do to throw your business? So every time they buy a new house, they're going to turn to him, every friend who tells them they're in the market, they're going to refer to him, you know, you can do well by doing good. Yeah, exactly. Okay, cool. So I know we don't have a lot of time left. I wanted to transition, you know, as listeners know, there's multiple books you've got to be able to choose from one of your, I guess your original book was the truth about money, right? Yeah. That was my first. Yeah. New York Times best seller. But what I'm most interested in for today's call anyways is the most recent book that you just came out with, which is the truth about your future, the money guide you need now later and much later, right? The world changing. It's just, I mean, I was reading through that book and I was really actually kind of taking it back for a moment because you as a financial planner started getting into the things that I didn't expect you to get into, yeah, such as AI, machine learning and things like that. Why are you talking about that, you know, under the of a financial planner? So I had the opportunity 10 plus years to go to meet Ray Kurzweil. He's, many concerned in the smartest man on the planet, he's got hundreds of patents, he's on the faculty, Harvard, now director of engineering at Google. And he is the co founder of Singularity University and Ray encouraged me to go, which I did in 2012. I went through their executive program and it's all about exponential technologies where you learn about artificial intelligence, machine learning, big data, nanotechnology, biotechnology, bioinformatics, neuroscience, 3D printing, the blockchain, financial technology, education technology, the list goes on and on. And what I discovered through this program, meeting some of the world's sharpest minds in all of these fields, scientists and physicists and PhDs and on and on and on, that the rate of change in our society is accelerating because of the growth in computer technology. It's all about Moore's law. We know Gordon Moore, the co founder of Intel, who said that every 24 months, the computers are doubling in speed and becoming half as expensive. It's now they're doubling at 18 months now, even the rate of acceleration is itself accelerating. And they were all able to talk about the whizz bang, nifty stuff that's coming down the pike, self-driving vehicles and tourists on the moon and so on and so forth. And all that was great, but I asked them simply two questions. I said, what does this mean for personal finance? And how do we need to change our strategies? And no one was able to answer those questions because they had never contemplated the subject in that lens. So it set me on a journey 10 years ago to answer those two questions. What does artificial intelligence mean? What does self-driving cars mean for your investment strategy, for your career, for housing, for leisure and recreation, for insurance, for college planning? And I spent years in research and it took me a long time to figure out the answers and the result is my book, the truth about your future. So the first half of the book is an exploration of these technologies because most people are unfamiliar with them. And the second half of the book is what it means for personal finance. And it's all extraordinarily fascinating. People are astonished when they are presented with the future. I mean, we all know that flying cars are in our future. I mean, George Jepsen will one day be a reality. We all know that. The question is, how long will it take for that to arrive? I'll pose the question to you, Jeff. How long will it be before we see in the commercial marketplace self-flying cars? Wow. That is a big question. The immediate figure that comes to my head is 30 years. They're already flying. Really? In Dubai, Indonesia, and India, they're already in use. These vehicles will fly a passenger up to 200 pounds, up to a range of 100 miles, up to 30 miles, at 100 miles an hour, flying it in altitude of 3,000 feet. Many of these countries have recognized that they don't have a good infrastructure. They don't have a good road system. It's expensive to build roads, so why don't we just fly from here to there instead? It's the same thing Africa did in the 1980s with telecommunications. We spent 100 years laying cable across the country for telephones. They went straight to cellular. They skipped the 20th century. They went from the 19th century to the 21st, thanks to wireless communications. And many of these countries are doing the same thing with transportation. They're saying, why build roads when you can build drones? Well, obviously, somebody hears that and the immediate thought, you know, I'm getting visions of Blade Runner in my head, but the immediate thought is, you know, I mean, chaos. Well, there are a lot of issues associated with a lot of these technologies, and that's chapter 12, the dark side. Don't read it before you go to bed. I was reading. Yeah, I mean, the chapter 12 will freak you out, simple as that. But the point is the future is coming much faster than we had thought. And as a result of this, we need to look at very serious changes in how we manage our personal finances, everything from college to career, to insurance, to investment management. And the good news is throughout all of this, it sustains and supports the mortgage advice because we're going to be living a lot longer than ever. And that means a 30-year mortgage makes more sense than ever. Are we going to see six times better? I can argue, it's my new 12th reason because we're living longer. Absolutely right. Longivity is at the crux of many of the changes that are coming about in our society. Right now, life expectancy is age 88. Many people don't know is that in 1900, life expectancy was 47. At the American Revolution, the average life expectancy was 23. So it's now at 88. So we are advancing our longevity. Scientists are now at the point where we're adding a month a year to longevity. And it's not going to be very long where we reach what they call escape velocity, where we're adding a year for every year. So the longer you live, the longer you're going to live. We're projecting that at this stage, most people today are going to live into their 110s or 120s. Wow. And that means the notion of retirement as we know it, where you retire at 65 and are dead at 85, that's passé, that's not going to be your future. That was the future your grandparents had and maybe your parents, it's not the future you and I are going to have or our clients. And with a longevity of that nature, it upends everything. It upends college planning, it upends careers, it upends investment management. And so we have to shift our strategies and our approach because of all of this, because we're going to be living not only so much longer, but so much healthier than ever. They're projecting that by the time you're 95, you'll be healthier than when you were 55. And that aging itself is merely a disease. They're already reversing aging and mice and experiments in Japan. So they won't be very long before they're able to do this with humans. So it's all getting very, very exciting and it's happening very, very fast. One aspect, I'll give you an illustration in the world of investment management back in 1920, the typical company in the S&P 500 had a life of 65 years. Today the average S&P company lasts 15 years, which means by 2025, 40% of the S&P 500 will be gone. So when people ask me, how should I be investing my money or they brag that they own an S&P 500 stock index fund? I'm like, really? 40% of those companies won't even exist. So you've got to really ask yourself, how am I managing my money? Look at Kodak in 2012, Kodak won bankruptcy. You know why? We stopped buying film because of our smartphone. It's all now digital photography and Kodak couldn't make the leap from being one of the best known brands worldwide, one of the biggest companies in America with 130,000 employees. They went broke due to a technology overnight. And in the same year, they went broke Instagram 18 month old with 13 employees was sold for a billion dollars, using digital technology to Kodak invented. So we need to change how we manage our investments because many of the companies you're buying and your mutual funds are not the companies of the future, the companies of the past. Exactly. And what you're talking about here is disruption. And I want to kind of close out on that note because I think you've got a really, you know, your thumb on top of kind of the changes or the disruption that's coming in the financial sector through the lens of, you know, you've got obviously your firm with your financial planners. And then we've got my listeners, which are retail mortgage loan officers. And, you know, there's a lot of buzz about the technology disruption coming in the mortgage and real estate space. So I'd be curious to hear, you know, a couple of quick points from you on advice or what you see coming and how do we as financial professionals pivot to stay relevant, you know, what would be some suggestions you have? First, become aware of exponential technologies so that you can effectively evaluate the impact of these technologies on your career. One of the things that mortgage brokers quite frankly have to be aware of is that artificial intelligence and robotics pose a very real threat to your career. It's projected that over the next 15 years, 40% of the jobs in America will be eliminated due to automation. And anything that involves paper is likely to be automated because computers are faster, they're more accurate, they're cheaper. And they never have a sick day, they never have an attitude, they never cause sexual harassment in the workplace. So we have to recognize that the mortgage process can be largely automated. Look at quick and loans, look at the online advice that is already available in the future, it's quite possible that when someone seeks to buy a house, automation will provide the mortgage right away. So how do you compete in that kind of a world? Well, you're already competing against quick and loan and you've managed to do that. How? Number one is relationship. Number two is a broader array of advice. I mean, in my field as a financial advisor and investment manager, we deal with roboadvisors, you know, online investment management services, I'm faced with competing against technology as well. How do we do it? By providing a broader array of services than the roboads are capable of doing and providing a relationship value that alleviates the client from having to do it themselves. The biggest problem with quick and loan is that the consumer has to be the one at the keyboard. They can't delegate it to someone else and that's part of the relationship value. So you've got to be aware of what's going on technologically so that you can determine how you can compete in an increasingly competitive environment. Interesting. Okay. So I'd say start with my book, the truth about your future and in there are a variety of sources for further learning so that you can stay up to date because the information is changing at a very rapid quit. Yeah. No, it's great. Like I said, I grabbed that book and just started digesting it last night and I barely got through half of it, but in actually I skipped a head to the dark side because I mean, you have to, right? With that kind of title. Who doesn't want to read it? It made me think of shows like Black Mirror on Netflix, I don't know if you've ever seen that show where I have not. It's interesting. It's very relevant to what you're talking about there in that technology is really changing our society and taking over and you'd find it kind of interesting a couple of those episodes to see the influence that digital technology being pervasive. There was this one particular episode where you talk about augmented reality. I think in one of the chapters, which is, you know, you have the technology to look at a person and like in the case of the sports, right? You can instantly look at your screen or hold up your tablet and you get like the stats on the baseball player and all that stuff. Well, in this particular episode, you had an eyepiece like a contact lens. You put over your eye and as you meet people out and about it immediately uses that augmented reality to give you like their social score, you know, right? What's their ranking on their social profile and people didn't associate with people like below a 2.6 and all that is really crazy. That's awesome. Yeah, that's where it's going. Anyway, so very interesting stuff. Thank you so much for being here. I know you're busy. Let's give the listeners where can they go to get access to your 11 reasons to carry a big mortgage. If you go to my website at rickaddleman.com, on the main page there, if you scroll down, you'll see a series of stories you can scroll left and right and one of those boxes has the mortgage article 11 great reasons to carry a big long mortgage. You can also read my books, The Truth About Money and Ordinary People Extraordinary Wealth. Awesome. So I'm going to provide those links in the show notes. Obviously links to your website, book resources and things like that. I just want one other question real quickly and this reminds me of the chat I had with Ed Connerky. What about the, there are mortgage loan officers when they're taking a 10.03 and app from somebody and hopefully they're asking good questions. One of those questions would be, you know, do you have a financial advisor and when people here, you know, no, I don't, I recommend that people are providing referrals to a competent financial advisor. Do you be or are you, you know, are there ways for my listeners to perhaps align themselves with, you know, perhaps a financial planner in their local market? Yeah, we work often with mortgage brokers and we're very happy to do that. We can do joint seminars with you. We can provide our educational materials that explains why you should carry a big long mortgage. We can provide a lot of resources and partner with you with your clients and exchange referrals. A lot of our clients are buying homes and they're looking to get a mortgage and so we're always looking for mortgage brokers that we can work with. So yeah, just send me an email to ask Rick at RickEttelman.com and send it directly to me and I'll put you to hook you up with my colleagues and we have offices 43 of them across the country and happy to put you together with us and we can help out an awful lot of people together. Yeah, definitely. So I'll put a link to that email in the show notes as well and yeah, I think for those listening that are looking to align with professional firm like yours, you know, it's just going to be great for your business and they're going to go to our clients that we're all serving together. So Rick, man, I appreciate you being here very much. I'm going to keep listening to you on the radio show. So keep doing the good work you're doing and I can't, I can't thank you enough for being here. You have it's been a real pleasure. Thank you so much. You bet. And listeners, as always, thank you for tuning in. If you liked today's episode, please take a moment, leave us a little rank in on iTunes Stitcher wherever you're listening to this and we definitely appreciate you. So we'll see you on the next one. Bye for now. Thanks for listening to Mortgage Marketing Radio. One more truth in Mortgage Marketing, get more free training and resources at Mortgage Marketing Institute.com. Hey, guys, what's up real quick? You've heard about the Mortgage Marketing Pro membership before and I just want to quickly remind you of that you're in a place in your business where you simply need more purchased loans. You need to fill your pipeline with purchase business. Let's just face it, agents are still a solid pillar of business and sources of purchase business for you. Well, good news. Our Mortgage Marketing Pro membership helps loan officers like you close more loans without the hassle of chasing agents or cold calling. 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