How to Win More Deals with Financial Literacy

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Go check it out right now. Visit LOKestudy.com and download your free copy today. Hey, listeners, Jeff Sinfer, welcome to another edition of the Mortgage Marketing Video Podcast. Thrilled as always that you've tuned in, hope this finds you doing well and preparing for the new year. There's lots to look at, lots to evaluate. And I'd love to have you guys join us in the conversation. So if you haven't yet joined the podcast Facebook group, go over to Facebook and type in Mortgage Marketing Radio, find the Facebook group and let us know when you get in there. One of the top three priorities and activities that you're working on for the new year. I'd love to know that. And then secondly, is I wanted to share with you some stats I recently pulled if you haven't heard this by now. Here are the statistics since I've been helping loan officers partner with real estate agents. Get more purchase loans without chasing and cold calling agents who don't want to talk with you. Actually ran the numbers on this and there is some approximation estimation to this, but since I've been doing this for multiple years now, we have collectively as a group delivered myself included over 2,412 classes from which were created over 4,823 agent conversations resulting in excess of $175 million in total funded loans since doing this over the last five years. Now my question is there's a lot you could be doing the real, the better question is what's going to move the needle most? And I don't think there's much argument or discussion around what moves the needle most is conversations, conversations with people who have either the ability to buy or the ability to send you a client, buyer, referral, etc. And even in today's market with all the disruption going on still at the top of the pyramid when done correctly and pursued properly, realtors are a key part of that source of people who can send you potential buyers and some themselves become clients. But how do you do that? Well, we're leading with an educational platform. We are attracting agents instead of chasing and we have got a ton of success stories and if you want to see more of those stories behind the numbers that I just gave you, you can go to mortgagemarketing.pro, all new page put up there with a member testimonials and comments that you can read and decide for you. If you want to take the next step and have a call with me, a conversation with me to get acquainted and see if hey, if this is the right fit for you and if you're the right fit for us, that you can go over to mortgagemarketing.pro, check that out, thank you the show notes as well. All right, this week my special guest is somebody who's fast becoming a friend and who has been a mentor and I just have a lot of respect from four for some time now. And his name is Todd Ballinger and Todd has been in the mortgage space for decades. Forgive me, Todd for aging you, but let's just face it, right? The truth is the truth. So he's been in the mortgage industry for decades, both as a company owner, leader, originator and has really leveled up his financial literacy, shall I say. And why I wanted to bring the conversation with Todd here today to this episode is because I think as you've heard me say before about we need to become more physically literate, right? And how do we differentiate ourselves? Clearly, it can't be on rates that's, you know, everybody can say that. So how do you create a better customer experience? How do you deliver more value? A lot of times it comes back to what your customer experience process and part of that can be to what level do you make an impact in the financial trajectory of your clients beyond just closing alone? And I think the conversation we have with Todd today is going to demonstrate that very well. Let's please listen and take note, make sure you check the show notes is because he's got some cool special offers for you that are absolutely free to participate in what he calls borrowsmartuniversity.com, borrowsmartuniversity.com, check that out, that's chock full of tons of education about mortgage literacy, liability, real estate, financial literacy, and then life literacy. And the content and the education that Todd's got in there are just a top notch in phenomenal. So I encourage you to check that out. He's also got a Facebook group, the National Institute of Financial Education, the NIFE. That's a Facebook group. I encourage you to check that out as well because that's got tons of great info in it is also to help you just become more informed about what's happening in the markets, what's happening, you know, financially, and then how to be more intelligent and impactful both with your prospects, clients and referral partners. So we get into a whole host of conversations on this discussion and I am thrilled to bring our special guest, Todd Ballinger to you today. So without further ado, let's get into this week's show. Todd Ballinger, welcome to the show. Hey, thanks for having me, Jeff. It is a pleasure and it's funny during the right before we hit record, something popped in my head that you are among the best kept secrets in the industry. We're going to talk about that in a moment and why that is. For the listeners who aren't familiar with Todd Ballinger, who are you and what do you want them to know about you? Wow, good question. Hey, let's see, yes, I'm a curious explorer, you know, I always think of finding things that I find exciting and then finding ways to sell them oftentimes, you know, like selling an ID or a concept, right now I'm working at a major university, which is a blast being a professor and working with college students, but I've always been a student and I've always enjoyed teaching and I was fascinated by money as a kid. I was one of those kids that, you know, in high school and probably even middle school was, you know, reading thinking, grow rich and things like that that I was exposed to. And so it made sense to become a financial advisor, but I got there by way of I started to be a realtor, got my realtor license, I hated working, the idea of working on the weekend, wasn't going to work for me and then I got, I figured that out right away and then I got my insurance and securities licenses and decided I was going to be a financial advisor and thought I'd learn about money, but that just teaches you a compliance, it doesn't really teach you about money, it's about a start of financial planning practice and and ran that for several years until I realized that people were making more mistakes on the liability side of the balance sheet than they were on the asset side, you know, because the big money was spent on liabilities and mortgages and house payments. It wasn't spent on savings. That was what was left over and for most people there wasn't much left over. So I crossed the balance sheet as I like to say and became a lender in 1992. I got a job apprenticing with a gentleman in Atlanta who was in had been in the mortgage industry forever and it was paper apps and typewriters and things like that, but I learned in the mortgage business from him and his name was Jake and started a mortgage company and just decided it was going to be based on financial literacy and I was going to take the best of what I learned as a financial advisor and try to incorporate that into lending and that's sort of what kicked off, you know, what's been a 20, 30 year Odyssey. Yeah, thank you for that. We're going to, I'm looking at the notes here for the conversation today, you've done a lot more than just that, but I'm curious right out of the gate, what, what did you like? What did you find better? What did you enjoy more about being a mortgage professional as compared to a financial advisor and any other, you know, comments you want to color with that question? Wow, another, another, another doozy. So as a financial advisor, you're fighting to get information to do your job and that information is financial information and it's given sort of in a very bit, bit and piece sort of a way like if you came to me and I was a financial advisor, you might say to me, I've got 40,000 in IRA and I've got to now figure out what does that really mean because it's like saying my, I'm going to give you my finger to your doctor and you see what you do with a finger and if you do a good job, I'll give you my arm, right? It's a hard thing to really be functional and when I got into lending, the first thing that shocked me is that people gave me all their financial information up front and I realized that could be a much better financial advisor with that information, but then as I started getting into it, I just was fascinated by the long tail of lending and compounding and the fact that a mistake that you make as a, as a first-time home buyer would compound over 70 years because if you're buying your first house at 30 and you're going to live in the house for 60 or 70 years, there's a lot of doubles, there's a lot of import there that wasn't being considered and I think the fact that at that particular time, starting out being a young, you know, whipper snapper, I was looking for something that allowed me to really be competitive and there were a lot of people that were financial advisors that were well established and there were a lot of lenders in our market that were really well established, but I wanted to build a company and grow it and I was like, I kind of do something different here. So it was sort of the combination of those two things and then realizing that I was really fascinated with the fact that I got access to this money and it was easy to spot opportunities for people to have a profound, you know, impact on their financial lives over time and again, just starting with that little bit of financial background as an advisor. So you have always been curious, I think you might have mentioned earlier a curious about money, you were curious about how money works, was it, was it necessarily, hey, how to get rich? I mean, were you looking at like, you know, I don't know, back then if you were eyeballing a, you know, Warren Buffett, if he was on the, on the scene back then or not, but did you have like these, you know, financial gurus, I'm trying to take way back who that was, Michael Milgan, whatever, right? Many, many years ago. But did you have some of those people that you, you know, tried to, what do you say, you know, try to emulate? Emulate and so, yeah. No, I was much, I was much simpler, you know, I was a first-gen kid, first, first one in my family to every other college, my dad was an electrician. So it was more that there was a sense of missing out, like there was something that people understood that we didn't understand as a middle class kind of a family. And I remember having a conversation, I was a, I was a competitive tennis player, I worked to the country club. So as a kid being a tennis player and working at a country club, people were playing tennis during the day. And I was like, how do you do that? If you have a job, right? And, and, and, and they drove really nice cars. And so it was kind of like a puzzle. I was like, what am I missing? You know, what do we, what it was I missing? Not about massive Warren Buffett kind of wealth, but just the practical wealth that allows you not to have the time, but no money, or the money, but no time. But how do you have money and time? You know, it was sort of a formula that I think I was out after kind of early on as a kid. And that means you need to have passive income so that work was somewhat optional for you. And how do you do that? You know, you can inherit it. You can make it. You can, you know, but there were not a lot of ways. And so I was like, all right, if you're going to, I'm not going to inherit it, I don't think. So how do you make that money? And how do you start? And that's where I got fascinated with compounding and, uh, ale Williams had a book out at the time called Common Sense that I first, I read, I think I read that in high school and was like, it just showed very practical ways that $100 a month. You could become wealthy in your lifetime. And I was like, that's cool. That's not that hard. I was mowing grass and making $100 a week. I could, I could save $100 a month, you know, at 17 or 18. So it was kind of that process they got going. I remember, uh, ale Williams, I remember the book, I even owned a Common Sense fund. How's that? Nice. Well done. I put my parents in a Common Sense fund and they told me it was one of the best performing funds they were ever in. So he did an amazing, you know, you get balled out for the zillions of dollars because he had a really simple strategy to work. Yeah. The whole byterm and invest the difference for those that are not sure who we're talking about. That's time for another day. But if you're buying life insurance, by term, that's what we're recommending. Um, okay. So it's interesting when I hear people in the mortgage space talk about fiscal literacy, right? And you've had a natural curiosity about money and how money works. Let's say that not every mortgage originator does, right? And I'm wondering like as we've seen this, this industry evolve over the past 30 years, you know, riding the balance between, like you said, you were competitive, right? The balance between sales, winning, closing deals. And is it just my imagination or are more people becoming, you know, more those mortgage professionals who want to go next level up and not just be transactional, they're starting to take on this fiscal literacy more. Am I, am I hallucinating or is that actually happening more often? No, I think there's won'tness in the air, right? You know, and it's, it's at a lot of different, you know, levels, but it's being pushed up. I mean, you know, financial literacy is something that, you know, 40% of all public companies said that they were looking forward to rolling out some form of financial literacy, you know, in the next year or so. So you see these types of things and you're like, all right, but, you know, again, as you're, if you're curious, like I used to ask people when they said, I want your lowest rate, I sincerely said why? And it sounds like, you know, it's a silly question, right? But I'm like, no, no, why do you want the lowest rate? And people would like, look at me like I was, you know, high, you know, this is part where we bring out the big giant, you know, do these like Elon Musk and we start smoking up. But, you know, I mean, I was like, why? And they were like, well, because I don't want the lowest rate. And they would repeat like in the question, I'm like, well, why do you want the lowest rate? And they were like, because sometimes they didn't even know, right? They just, and I say, okay, sometimes they go, I want the lowest payment. I was like, cool. All right, I'm with you now. I would want the lowest payment, too. So if you had the lowest possible payment, what would that make possible? And then now they're having to say, well, well, if I had a lowest payment, I'd have more money. Yeah. Great. Okay. What would you do with that? Right? And they would, and then they, now you're like, I don't know, I'm not necessarily mean, if you had an extra hundred, two, and I was a month right now, I gave it to you. What would you do with it? And there were only two possible choices for most people. I'd spend it, or I'd save it, right? And most people would ask that question would say, I would save it. And then I would say, all right, you know what's common? They're like, okay, I know. Why would I save it? Yeah. Yeah. What would you save it for? I mean, what would that do for you? And they would say it was often college funding for my kids, or I just want to feel secure and retirement. And so what I started to realize is these sort of very robotic answers, if you ask someone several times, you could actually get to the heart of the matter. And the heart of the matter was consistent. It was about security. It was about financial well-being in their future. Some level of control that they felt finances might provide, or a brighter future for their kids. And I started thinking, wait a minute, maybe I'm confused with what I'm doing. Like I think I'm selling money, but maybe I'm making something possible. Like one of the common things we talk about, you know, in our courses, there's a huge difference between house and home. And I listened to couples specifically, and the wife would use the word home, and the husband used the word house. So what did I do? I said, yeah, tell me, you keep saying home, and you keep saying house. I'm kind of curious. When you hear a house, what are you talking about? And they would say, you know, I mean the house, the house, the mortgage, the HVAC system, you know, the gutter's got to be claimed. And I was like, okay, tell me, when you hear the word home, what are you thinking? They're like, well, that's my family. That's where we live. It's where we have Christmas. And we use these things interchangeably. But again, it was that curiosity that helped me to realize that, wait a minute, both of these things are critical. But if I'm managing my abilities in creating wealth, I'm focusing on the house. And if I do that, the experience in the home could be amplified. But there are two different things, two very different dynamics. And we have to address both. There were times when I would say, I'm going to share with you something about the house that you need to understand. And it's, it's the impact of the payment and what could happen by dealing X. Now, if you do that, you could own the house in 15 to 20 years, 10 years sooner than you might have thought about owning the house. And how would it feel to be in a home that's paid off, free and clear, right? What's the experience like? And so you start to, you start to understand the impact of the way that you use the words. And more importantly, the impact of what you do as a lender. And that made lending more exciting to me. It made it more fun. And it was contagious in a way that sharing with realtors and, you know, if you have time, we'll talk more about financial advisors. And why went back to that well as a former financial advisor? But it's what really differentiated us in our market in terms of, of what we, what we do and what we did. Yeah, I'm listening to that dialogue. It's in a great, it's a great series of questioning. And it makes me really curious, where did you learn that? Was that a mentor that you referenced? Or was that, you know, more consultative selling coming out of being a financial advisor? But where did you kind of learn that? I'd have to go with Socrates for a hundred. You know, I was, I was, I read some weird stuff as a kid. And the socratic method of inquiry was fascinating to me. And I would ask questions. And often I'd ask the same question three times to see if I got the same answer. I never did. And that as a kid made me wonder like, you know, what do you want to be when you grow up? I don't know. Why do you ask? You know, you still figuring it out for yourself. I mean, because I'm, I'm curious. But I literally, I could just say it was, partly it was somewhat innate as a curiosity. But I really was fascinated with people like Socrates and the way they simply would ask questions. And I think that's really interesting to pause on that from because you found by and large, I'm going to guess that most people answered the questions. Yeah. Because they will spackle silence with anything to avoid the terror of not hearing something happening. I mean, literally people, people often interrupt a good question with spackling it themselves. And if you just ask a question and just sit there quietly, the void always gets filled with something. But the first filling of the void is often like an impulse or a jerk reaction. Yes, exactly. And that's why it often takes a couple of times to get really down to, you know, which because sometimes no one's ever asked them. And so they haven't thought about it. But when they do think about it, it reflects back their own belief system, which is really valuable to have someone, you know, do that. Well, and that's why I'm pausing here purposefully is because from my exposure to the average mortgage originator experience for the consumer in the country, as it isn't very to use your term, socratic, right? There are the surface level, the 10 or 30 questions. And I would say more often than not, that's it, right? And so I'm a big one. If anybody knows anything about me, I'm all a huge believer, an advocate of the customer experience and architecting that in a way that completely separates you from everyone else, because people will pay more for that, right? A higher price, better experience, better con, you know, advice, insights, information. I would say most people want that. caveat is there's always going to be that just give me the lowest rate, you know? I mean, we think of the standard example, the engineer, the Silicon Valley software dude, whatever, who knows he's got to 850 FICO and gets it and just, you know, give me the lowest possible, right? I just want to get it in. But that isn't the majority. No, it's not. And you learn in time how to work with those people too, right? You know, and say, I can give you the lowest rate could be on the wrong product. And you just stop, you know? And what do you mean the wrong product? I was like, well, I mean, again, I'm not going to, I'm not going to, I'm not going to go to Dr. Jill for, for misdiagnosing you, but I need a little bit more to know what products, the right product. And then let's get you the lowest rate in the right product, right? And then, and we had a simple dialogue. We said, you know, there's seven questions that you have to be able to answer. And whether you work with me or not, make sure you can answer those seven questions. And they're four. I'm going to give you right now. The right product, the right price, that's your rate, the right availability, how much you can borrow, and then the right amount. That's how much you should borrow, because most people combine those two and they don't understand that what's available in the amount you should actually borrow really critical when it comes to wealth. So let's make sure you understand those four first and the other three are really important. But again, would you work with me or someone else? Make sure you can answer these seven questions. And these were honestly the seven questions that I felt every client needed to understand that the time I didn't realize it by setting the table that way, it became one of our biggest recruiting tools because I have literally loan officers calling saying, I don't know what you're doing to these people, but they're asking me these questions and I don't understand what they're asking and it's frustrating me. And they would come sit down and we would talk and oftentimes they would come work for us. And that let me know that I was having an impact on the consumer because I was arming them with questions that were critical. You need to know which product is the right product and and only then can you get to the lowest rate because the lowest rate on a 15 year fixed product is different than a lowest rate on a three year arm. If you're going to be in a house for two years, if no reason to get a 15 year arm and pay off a principle, you're just going to get back into years, right? I mean, when you sell the house, I mean, so how do you get the right product? It's about managing risk. And then once you once you get the right product to manage risk, it's about the payment that makes sense for you, is amortizing your interest only. They're different types of payments. But you're arming people with these questions that start sort of in their own mind, you know, creating questions. And then when they talk to other people and they would ask these questions, they couldn't answer them. We became the de facto best choice, right? Right. Interesting. Why did you why do you table the other questions in the total of seven and how does how was that structured or set up? When did they get it? Yeah. So two reasons. There's one of my favorites in in saying is when the cup is full stop pouring, you know, usually four was enough for them to get somewhat clear that I was the right person or we were the right company for them. And also if if if we had that first conversation where they were, you know, on rates and I said, there's seven things and I give them four. I wanted them kind of going, well, wait a minute. I didn't get the other three. You know, there's something else I needed to know. So it was always kind of fun to hold a little something back. But I found most people they were topped off in pretty full with the first four questions. And then the other ones we could come back to later. Very interesting. All right. Here's a question. Any idea? This is this is not fair and off the cuff conversion ratios. Any idea? I don't know if you were a person that managed to track that, but you know, how many apps to, you know, clients did you convert with it? Because it sounds like you were very intentional with your dialogue and scripting. Yeah. And we, and we, we did that intentionally to filter, you know, we want to clients that loved us who wanted to come back and would talk about us. And there were people that you had to fire in the process of simply saying, look, I feel like there's a lot we could do from you. But I'm not sure you feel that way. So I'm going to recommend someone to you at one of our competitors. He's a good guy. He will take good care of you. And that had a very specific scripting for how we fired our customers. And some would leave. And some would say, wait a minute. You're sending me somewhere else. I'm like, yeah, I just didn't, it didn't feel like based on the fact that you really want the lowest rate. And you don't care about these other things. This is important to us because we know it's going to have an impact over time. So, you know, it was okay to fire. But still, you know, we tracked two things, two KPIs at our company, new people that you'd spoken with, and new applications. And then internally, we tracked applications to closings and stuff. And our applications at closings were in the high age, 88% in that range. So we were always going to have some fallout. But it was in that 88-92 kind of ish range on an application, typically. But in the early stage, it was also pretty high. I would say in the original like first contact to close, we were in the mid 60s to high 60s was sort of where we stayed over time. Did you rehearse any of that like internally roleplaying and things like that? Or you seem to have a good grasp of language. So you may not have needed to, but I'm curious. Oh, no, at the time, yeah, absolutely. We created designations. It's funny that the designation that we do now, we had three internal designations for our loan officers. And it was internal training that we created. And it was about roleplaying and a proficiency of just being able to have simple conversations with people that they could consistently scale and duplicate and repeat. I'm a fan of having core scripts internalized at a level like I haven't done a loan. I haven't originated a loan probably since 2004, but I still have these scripts rolling off my tongue as if I was sitting in front of a client because, you know, by having those four scripts down and comfortable, I could then Miles Davis everything else, right? And not and feel comfortable doing that. But if I didn't have those kind of core anchors in place for what I was going to do when they said what's your rate or what I was going to do when they said they were shopping with three competitors, I'm glad you're talking to three competitors. And I want you to work with the best person, but you got to answer these seven questions, right? I mean, I just when I knew what was coming because I'd been doing it long enough, it wasn't like they were going to hit me with some weird reverse behind the bat super duper, you know, I mean, it happened, but it was it was rare. So as long as I was comfortable that I knew when that happened, what I was going to say, everything else from there could be completely just I could relax. It was unscripted and it could just be a you know, a dialogue conversation. Yeah. Well, that's why you practice, right? So you can perform in the moment. That's like one of my favorite quotes from Phil Jones, author of exactly what to say. Favorite quote is the worst time to think about what to say is in the moment you need to say it. Absolutely. And people don't remember what you say they remember the conviction with which you say it. So most people don't remember half of what are 20% of what you talk about, but they'll get off the phone and they'll go, man, that person was confident about what they were doing. I'm inspired by that confidence and that's someone that I want to work with. I mean, again, that's the feels that you get with a lot of this stuff. If you're like, well, I'm not sure you're humming and hauling and stuff like that, they're walking away going. I'm I'm himming and hauling because I heard himming and hauling and I'm still not sure, right? Exactly. That transference of trust. A few moments ago, you alluded to the popping back into the financial advisor space as a source of business for you. And that is one of those areas I think is massively untapped for variety of reasons, but you can you can just kind of jam or add them on that. You had a certain comfort level because you have been and you had all the destinations and you understood that that world inside those closed doors of financial advisor ship. But why did you go back after the financial advisors and what lessons would you pass on to people considering it? Yeah, I mean, for me, it was all the realtors were taken. I mean, meaning there were people standing in line and I don't know where I was exposed to this initially, but I had understood that most realtors did 90% of their business with a primary and one secondary, right? And what we realized is we were sort of in that tier-shary state and we were new kids on the block. We were getting the crowd. I used to think, man, realtors provide you the worst leads. And it was because it was everyone else had said, no, and they're like, oh, yeah, I'll give you I'll give you this turn, right? And so, but I learned a lot from trying to get those deals done. And you know, you want a few people over here and there, but we can't we eventually came back to realtors and did a really nice job building out our realtor network. But we just started calling insurance agents financial advisors accountants because no one else was calling on them. And they had they were surprised that we were talking to them because they looked at us as sort of the arch enemy. We were selling money, which created an indebtedness and a payment that they then had to help the clients manage now or in retirement. So when we came in and started talking about, no, you know, people are going to they're going to spend might live indoors, right? That's that's the goal. And the amount of money they spend to live indoors over the next 50, 60, 70 years is a function of how they manage that borrowing and those liabilities. So we can help you and your clients reduce the cost and in reducing that cost have more money to create real wealth. And you know, unless they pay cash, which you know, I wouldn't recommend because of the time value of money and the simple fact that inflation devalues debt, people like inflation sucks right now. I was like compared to what? I mean, you know, if you're buying groceries, they're cost more. But if you borrowed money at, you know, $100,000 on a house and you've got 10% inflation, a year from now, it'll cost you $90,000 in real dollars to pay that debt back. That's why the government loves inflation at some level. And these do engineer it, but your real cost of borrowing, it's just like your real interest rate is your actual interest rate minus the inflation rate. So if your cost of borrowing today is seven and inflation is eight, your actual real cost of borrowing is negative 1%. Now it feels painful at seven compared to three, but before we were at three percent, inflation was at three, your real cost of borrowing was zero. Right now, it's actually negative. Even at six and a half percent with real inflation eight and a half, that's a negative two real cost of borrowing because each year, it takes you two percent, you know, less money than you have today to pay that debt back. It's a roading the cost of debt. That's a, you know, it's a, it's a hard concept when you haven't done the math and played around with it. And we've got a really great, I've got a couple of blog posts on this and we have a Excel calculator where you can put in your current cost of borrowing and people know it. They know that their payment gets easier over time. Right? I mean, just my house payment, you know, when I took it out, felt kind of painful. And then 10 years later, it didn't feel like it was that much. Why is that? Because your income over time is slowly going up with inflation. But I get to lock my cost of buying a house and owning a house in and it stays fixed for 30 years. Everyone knows that your money won't buy in 30 years, what it bought today. Well, debt is the same thing, but in reverse, it won't cost you what it costs you to pay it off in 30 years. The best mortgage is actually an interest only mortgage that you never pay principal on. Let the inflation devalue it over time. That's why guys like, you know, honestly, what's your middle ramsy? I mean, when he says, get your mortgage and pay off as fast as you can. I'm like, why? You're paying it off with today's dollars. It's the most expensive dollars that you've got. I'd rather have that money compounding and growing, you know, investments and stuff over the next 20 or 30 years and outpacing inflation as opposed to trying to pay off the debt, you know, right now. These are not concepts that I would typically share with a consumer right off the bat because again, the cup gets full very quickly. You want to keep it simple, but these are concepts that when you start to understand them and you could talk to a financial advisor about it, again, just simple time value of money. And, you know, and people, most people make financial decisions today based on cash flow because most people live lives of cash flow because they're really kind of programmed based on their pay structure to live in 30-day cycles. And at the end of the month, if you have more money than you have month, there's something called savings. If you have more month than you have money, there's something called borrowing, like credit cards and other things. So you're really kind of managing this 30-day cycle. And once again, you just have these simple concepts that you share with the financial advisor and they're like, wow, you know, I've never talked to a lender that understands people live lives of cash flow. And that's even in retirement. Why are you saving all this money? So one day, you can use it for cash flow to live off of in retirement. So I'm going to help you kind of think about ways to do that. And now the financial advisor sees you as a person that can help with the needs that their clients have. Like, I don't want my client buying a million-dollar house and paying cash for it because I just lose a million dollars that I was managing it, which is $10,000 a year to me in revenue. If you can help me show them why that's a bad idea and provide the financing for 800,000. And I'll give you 200 out of their account for that. Then that's really cool, right? And so we just started getting to know financial advisors and building relationships with them because no one else was. It allows you to grow very quickly in the process of doing that. We worked our way back to realtors over time and built a good relationship. And that's why today, I'm like, you've already worked with a realtor side. Man, you got to start learning how to work with a financial advisor side because they touch the consumer on a, it's called KYC, know your customer. You have to meet with them often once a quarter. Rilters don't meet with their clients. Most loan officers don't meet with their clients that frequently. So they're very in touch with the life events and the things that are happening. And that was the other cool thing is their life event driven. They're not interest rate driven. They don't say let, they'll say refinance because rates are low. But if you're getting divorced, or your kids are going to college, or you're starting a family, you're building an addition, it's not let's wait for rates to go down. You know, this is what's happening. How do we do this? Let's talk about the financial implications. And we want to become part of those solutions. All right. That's, that was pretty cool stuff there. I think I followed most of it. Thank you. Thank you. I like to say I like to open new folders and people's brains as much as I can because it's just stuff that, again, most loan officers don't really think about it a, a great deal, right? And when you open a new folder, just like when you start calling them financial advisors, your business changes, right? If you've been calling on a, if you've been calling on realtor, eventually you understand how they work and you build a business to work and support that type of referral partner. What we started calling on financial advisors, man, they played a whole different game. I mean, their average client was different in terms of net wealth and capacity and questions and things like that. The way they managed their business and met with clients and did a lot of socratic type questioning about what does money mean to you and what was retirement look like? And what would you spend your time? What a security. I wasn't asking those questions, but these people were. So that was like, that's pretty cool that they're asking these questions. And they had a process of coming in and sitting down and inquiring and then presenting ideas and creating a plan. And then with the client's approval, signing that plan, executing that plan, I was like, we could do that as a lender. We could do that in a different way. So our business evolved differently because we were calling on a different base of customer and referral partner. And we learned things that we would have never learned that. And then that cross-pollinated with working with realtors because, hey, realtors are independent contractors. They didn't have 401ks. So we would set up simple steps and IRAs for their realtors to help them create retirement programs and introduce them to advisors. And so it all cross-pollinated in a way that create a bigger sandbox for us to play in. But I'm a big fan of like, who you're calling on starts to define your growth and the things you're going to learn. Yeah, there's a lot in there actually. And I like how it cross-pollinates. And the word pre-eminent comes to mind because, again, it all comes back to like, who do you want to be known for? Like, how do you want people to describe what it's like to work with you? And now that we're, you know, the dust is settling and we're out of this insanity market that we're in for 2021 where you really didn't have much bandwidth to do anything except facilitate, right? Exactly. It's a tsunami of deals. But now we can. Now everybody's listening. Listening, you get a chance to reinvent. You get a chance to design. You've got this somewhat lump of clay here, if you will. And now you can kind of architect and plan and sculpt and map out, you know, we're entering the new year. What do you want your business to look like? So that's why I want to transition to your blog. Because I think it's a great resource. And you're talking about a lot of high level concepts and you're talking about working with financial advisors and you've got a ton of information on the blog, which I'm looking at. And I love the like the Socrates, you know, like kind of jazz. Like, here's this quote where I landed on this one section from Suzuki. In the beginner's mind, there are many possibilities, but the experts mind, there are few. What does that mean to you? Yeah. So when you have like, like in our example earlier of what does money really, or why does someone really want the lowest rate for a loan officer, they're overwhelmed by that, right? They don't know how to answer it. And if the answer is going to be going to a product or a rate sheet or whatever, eventually when you know that everything leads to money at some level, right? In terms of the impact of money. And if you go a step further, I would say that money leads to an ultimate goal of fulfillment. And even further that people are simple, they move away from pain and towards pleasure, everyone. It's really that simple. And so in sort of if you've been doing this long enough, you started to realize, okay, you know, what creates less pain for a consumer or what creates greater pleasure and fulfillment in their lives, you know, don't want to be the guy that gave them the lowest rate or the person that changed their outlook on their ability to be debt-free and own their home faster in a more efficient way that actually created an additional couple million dollars in retirement for them because I showed them just a couple of simple strategies consolidating their debt using that to snowball into potentially paying out the house faster or building a side fund that could pay the house all faster in the future and give them liquidity if they need it. You know, again, these are simple, you know, common sense type, you know, ideas, but that was sort of the relationship that I wanted to have with a client. And I knew at the end of the day, again, and you know this, if I say it to you, you don't believe it, you have to at some level earn it. I mean, you have to have enough conversations with people to realize, you know, and for me, I like pleasure and I avoid paying too. And so this gets extrapolated into money. Higher payment is more pain. Lower payment is more pleasure, right? So, I mean, really, you could tie it into those kind of simple things and then once you get comfortable with that and confident with it, you start to realize that no matter what I ask, we're going to end up in a probably the same spot and I'm equipped to help with that because I understand where we're going. Very interesting. Very interesting. How long would you spend on average on an initial conversation with a potential borrower and was it, was it, did you intentionally have a two-step or something like that? Yeah, like eventually for me, I had a team that did the application and the like, you know, this is way before, you know, all the tools you had and it was all paper applications. But my whole world was about that conversation and I would have it for as long as they were interested in talking. And I mean, again, that's where I'm literally, I'm watching their face to see, where's that line at? You know, when the water gets to right here and they're, you know, you can tell they're getting a little bit confused, I could stop because I had time. It wasn't like, you know, I had to build Rome in a day. I just, I need to get them to the point where they felt like this person's got my back, you know, and, and, and I want to, I want to be in a relationship with this person because there's stuff that, you know, and that was what we tried to get everyone to kind of do at our, at our mortgage company and I want to have done ever since is just, you know, having really interesting conversation with people that makes them want to work with you and just the mortgage is a transaction, you know, to, to build that relationship and you can come back from more and you're going to be there for them in the future. But if someone else to sit there for an hour and talk, I'd certainly, you know, do that. But I had a pretty simple process where I went through, we had a conversation. It was a three-part conversation that was pretty well scripted. It's one of things we teach in our class. We call it the bar smart conversation, but just understanding a little bit about how borrowing impacts wealth and that there are a lot of things that they don't typically understand about housing and we do. And we're going to help them with that and answer those questions. And then when they're ready to go in a perfect world, I'm going to hand them off to someone that's going to do the paperwork because the value's not in the paperwork of the transaction, the value to me was really in that conversation, that differentiation. Right. Right. Love it. Okay. Well, let's do this. People who've been listening by now recognize you as somebody who's quite illiterate when it comes to the financial topics and conversations. And let's do this. Let's talk a little bit about your resources, your blog. I'm over at and your website, borrowsmartuniversity.com. We'll put a link in the show notes, borrowsmartuniversity.com. Tell me about the CLA designation, the Certified Liability Advisor. What is that? So as I mentioned, to create proficiency with our company, we had several designations and this was like my flagship designation. And within the name, we repositioned what we did from being a mortgage lender to being a liability advisor. We did that to match up with a financial advisor. So a financial advisor manages assets. A mortgage lender sold loans, you know, facilitated money being borrowed. So I was like, no, I want to be more like these guys and gals. So we changed our name from mortgage lender to liability advisor. We said, look, you're a financial advisor. We're liability advisors. We do just what you do, but on the other side of the balance sheet. And that one repositioning allowed us to start thinking completely differently about what we did because the value proposition was not in the money that we loaned, like my book, borrowsmart, repasemart. Well, borrowsmart is your, that's your entry strategy into the debt. No one talks about how to pay it back. So don't you want to repasemart, too? I mean, you, you know, how do you do that? You make lump sums, you pay bonuses and you pay by weekly. What, how do you do that, right? And do you understand if you sell a house in three years, you're getting it all back and you're starting over again anyway. So people are like, I'm only going to live in this house for five years. I was like, well, then why do you care, you know, about, you know, 30 years right now. I mean, we need to think about 30 years, but really you're talking about a five year window. So these were the things around reliability advice. So advisors managed assets. We managed liabilities. And the realtor, which we call the third side of the balance sheet, right, what do they do? They sell real estate. They don't manage real estate. But the real, the house is the largest asset on 80 to 90% of all Americans. It's their largest asset and their largest debt. So certified liability advisor was us saying, let's take this training and stuff and this education we've been working on for so long. Let's put it into something that we can, can, can kind of say, you did it. You've learned enough here to call yourself a liability advisor, even call themselves a liability advisor. But we want to put together some training and education around it and came up with the CLA, which we had done for our people. And then this is what we use over the time. We've taught this to Schwab and a Mara Prize and, and, and Maryland. We've taught this internally with bankers and we've done it with loan officers for many years. But it's a fun way to, to give back and structure a lot of this, you know, 20, 30 years of learning into something that somebody can go through in about 30 hours and get a handle on. And then after that, you know, there's all kinds of other stuff. Like I said, the blog and we have, you know, private Facebook group and we do coaching sessions and all kinds of stuff like that. Well, I definitely want people to check it out because once again, whenever you talk about physical literacy, then people become curious, like, well, where? How do I do that? You know, you definitely have to get some education and it's important to get led by somebody such as yourself who's gone before them, right? And who's been in the field as an originator who's talked to all the people that you should be talking to in the way that you should be talking to them. So first and foremost, right? The blog is just a wealth of information. You've got, I'm just looking at all the posts here, investing for wealth creation financial literacy, working with advisors, housing and lending, right? Crazy. I mean, I'm just looking at the stuff going, I want to read this just because I want to be, you know, become more knowledgeable. So, um, Mara Smart University and then you do have a book. People can acquire the book. Do you want to tell them anything about that? Yeah, so I wrote a book called Bar Smart Repay Smart. It was, uh, it was like a reflection on our processes, the seven questions that we had utilized. And it was the seven main dynamics of financial planning that we applied to the house. So, you know, within financial planning, there's this core thing called safety liquidity and return. It's like the three-legged stool of financial planning. So we asked the question, well, how safe is real estate? How liquid is it? And what kind of return does it provide? So we took concepts like liquidity and diversification and we just applied it to housing as a way to get people thinking a little bit differently. So the books are really kind of a, you know, a great lint reduction. And, you know, if you come there to our site and you sign up for the blog and become a member, I usually send you a little gift for doing that that'll help you kind of get started and learn a little bit more about what we do. And again, some people like to just play around and we've also got, you know, we'll see some other research. We have a Facebook page for our nonprofit and I post there daily, just charts and things that I think people ought to know about with what's going on in the market as a whole kind of broad, big picture stuff. And, you know, we've got an interesting little community growing of people that are interested in this. Again, it's not for everybody, but I do say everyone has a financial stake in this game. If you ask yourself, why are you a lender and why is it important to you? You probably do it to make money and you probably make money, take care of your family and take care of your family. It's probably pretty fulfilling and makes you feel pretty good, right? So you see where I went with that back to Suzuki. So, you know, if you want to get better at just playing this game yourself, there's value in what we do. But if you want to then learn to extend it out as a totally new, you know, business referral network, that's got a lot of value to it. Right, right. At a minimum, right, your education, your knowledge, your ability to convey that to people is going to be competitive advantage for you. So that's why I wanted to bring you on to to highlight some of that. All right. So the links in the show knows people borrow smart university.com, go there, check it out. Before we wrap, I was curious to ask you this question. What's your, what's your hot take on 2023, man? No, what's the crystal ball, Todd? Where's it going to go, baby? What are we? What are we facing? Man, we are facing an unprecedented series of difficult, gordian knots of financial instability and volatility. Any way you look at it, it's one of those things that have quite a few people that are in the financial world for living and they've never seen anything like this. I mean, you've never had a recession with this kind of job stability and you've never, and we've printed half of all the money that exists in the last few years and where is it? Where's it gone, you know, and is it waiting to jump back into the market? Or has it really been eviscerated through this liquidity stuff that's happening? You've got nuclear, you've got Taiwan, you've got global financial stuff, you've got shift in power with China rising, but simultaneously on the precipice of their own 2008 right now with, you know, 100 story buildings that were built for hundreds of millions of dollars. They've never been occupied that are being torn down because of mold and stuff because there's no one there to even live there, but all that stuff is financed by the Chinese government. I mean, it's just like a crazy, crazy maelstrom. So, you know, I think trying to figure it out is a great way to the looney bin. I've like, where's the center of the hurricane and where do I want to simply be in this process? And it's certainly going to be a one day at a time kind of an experiencing thing because it's just, there's just anything any shoe could drop at any moment that could change. We could see rates go back down just as fast if the Fed tivots, but they're unlikely to do that until inflation's under control and you wouldn't want them to. So it's just you got to take it one day at a time. What about this smart money, right? Fanny for coming out predicting five and a half-ish, right? Next year and all that. Well, you know, yeah, I mean, you've never, I mean, again, I say never there's a lot of numbers out there, but you know, traditionally think about it. Again, your inflation rate is higher than your current borrowing rate. So you still have a negative real cost of money for them to put pressure on demand. They need to get interest rates above the inflation rate. So to do that right now, that would be seven, eight percent, but inflation started to back off, especially we're starting to see Microsoft, Google, Apple freezing, they're hiring. The job destruction is finally starting and it's really weird to say the Fed is going to get what they want here, which is destruction after 20 years of engineering ridiculous, growth and liquidity and insane evaluations. I would say everything's too high and we're going to go the other way. So the normal tool that they use is interest rates. That's what they use to create demand destruction. That's what they would use to start to fix things if they really break some stuff. And that would be likely to happen next year. We could see an initial just stopping, which doesn't help us with interest rates, but it would help the market rally and create some wealth there. But then the problem is that creates more inflation again. That's one of the scary parts, right? Of stopping the interest rate raise is that the markets take off. And if they take off, the haves get more and have not to get less and you're back into a bad inflationary problem. So how do they do it? I'd say that we're more likely to start getting a lot of stimulus in the way of getting, how do you get money back to, you know, first time home buyer tax credits. Like, you know, the kind of stuff you see in some places where it's 10 or 20% down payment from the government to buy a house. I mean, you could start to see that kind of stuff, which would really target those groups that there was some of that in the Biden plan that never got actually to market. But, you know, will we let, will we lower interest rates? We could. I would, I would say to right now, it's highly likely. But there's also just as many things that would keep us from doing that, or doing it and then suddenly finding ourselves in the same position and having to then go back the other way again. But I would bet rates will be lower next year than they are today, for sure. How much lower? Hmm, I don't know. Maybe the on that. Yes, there's a lot of different other tangents. We could go off on, you kind of alluded to one with the tax credits in that, again, we would not to get political. But, you know, is some of the agenda of the current administration with this housing affordability issue, right? And to make that more affordable for the masses and drive prices down, right? Through the interest rate tool that they have, that would be an interesting angle and play. And indeed, there's a lot of, I think we're going to see a lot more creative financing coming online as we did in the past. When we got here, you know, I talked some of the day, it was doing 40-year interest only right now as their primary product. And I didn't know that was back, but they were like, that's our solution. And another country is, you know, like you said, Canada's got its own set of issues. And while it sounds absurd and, you know, right now, but the reality, as you know, well, no, I mean, most people don't hold the mortgage 30 years, let alone 7, 8, 10, you know? Absolutely. It's always been a mismatch there, but with the yield curve where it is, you know, the short end is higher than the long end in some ways because people are more nervous about what's going to happen down the road. And, you know, when I was around the 3-year, 5-year, 7-year, 10-year arms were really great financial planning tools because when you help someone understand, if you're only going to be in the house for 5-7 years, a 7-year arm is going to save you a point, you know, an interest without any additional risk because it's fixed for that 7-year period. That was a really cool conversation, but you don't get to have that right now because those rates are not that competitive, but that could, again, that could change. Helox could become more exciting, you know, there's, you know, other products out there that I won't name at this point, but they're, there's just products that are out there and today and others that I think will be coming in the future that will start to give people a new conversation. They have reverses. I'm a big fan of reverses because I believe it's going to be a critical financial planning tool in the future for seniors and we're focusing a lot right now. And just again, what are the problems and how do you tie and match products and solutions to the problems because financial advisors are problem solvers. A lot of officers are problem solvers, but the central problem that we solve is is people need to borrow because they can't pay cash for a house. And then there's a bigger problem that is they have the amount of pay cash for the house and they shouldn't. How do you explain that? And then just keep moving up the food chain and solving, you know, higher and higher grades of problems for the consumer. Well, we're going to come back, revisit this conversation and see what's happening. Q1 next year, 2012. I look forward to that. I look forward to that. Hey, thanks so much, Todd, for being here. Really loved it. Once again, people borrowsmartuneiversity.com. Check out everything Todd has to offer. If you enjoyed just this little snippet, imagine, right, hanging out with him for more time and more learning on his blog and his group and his community. So highly, highly endorse that. Todd, thanks so much. Appreciate it. Hey, thanks Jeff for all you do. Appreciate it, man. You bet listeners, you know what to do if you like this episode. Hey, leave us a review and we'll see you on the next one. 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 if 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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