Sh*t You Wish You Learned in Grad School with Jennifer Agee, LCPC

Episode 23: What You Didn't Learn About Money featuring Brett Banks

September 21, 2022 Jennifer Agee, LCPC Season 1 Episode 23
Sh*t You Wish You Learned in Grad School with Jennifer Agee, LCPC
Episode 23: What You Didn't Learn About Money featuring Brett Banks
Show Notes Transcript

Most of us are not taught much about money. We know we need it and maybe have an idea how to budget but investing and building wealth feels intimidating for many of us. 

Brett Banks, VP, Wealth Manager with Enterprise Bank & Trust shares the basics of understanding our relationship with money and how to harness the power of our money to support the lives we desire to live. Brett discusses the 10th wonder of the world, compounding interest and gives easy-to-understand examples of how this works. We also explore how each of our own unique relationships with money determines our saving and investment strategies. 


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  • Alaskan Cruise: Experiential Therapeutic Intervention Training for Therapists June 3-10, 2023

Jennifer: Hello Hello and welcome to Sh*t You Wish You Learned in Grad School. I’m your host Jennifer Agee, licensed clinical professional counselor, and with me today is Brett Banks. He is a wealth advisor with Enterprise Bank & Trust. Brett has been invited on the show today because in grad school, we are taught jack, diddly, and squat about money, money management, how to build wealth, how to actually do this job and make a good living. So Brett, thank you for being on the show today.

Brett: Thank you, Jennifer, it's my privilege. I look forward to the next thirty minutes of time.

Jennifer: Yeah, me too. So Brett, you work with a lot of helper healers. I know I've sent a lot to you and you also have a background in a helping profession as well. So talk to me a little bit about some of the things that we need to know or start to understand so that we can be wise about how we are building and growing and saving.

Brett: Sure. I think I'd probably just start with my own personal experience in it, and that is I worked for about 21 years, the first 21 years of my working career, in a helper healer type position. And quite honestly, never gave the first thought to saving money towards living in retirement, accumulating wealth, things of that nature. I wanted to be a helper healer, that's what I felt passionate about doing, so I never really gave thought to developing a retirement plan, developing a place where I one day would not have to work to survive financially. So from that perspective, I just did not have the mindset to even consider it.

Jennifer: Then what made you shift that? What made you start thinking about it?

Brett: You know, I always had interest in the field of work that I'm doing now. And I was just talking to some friends who were wealth advisors at the time, and they started planting the seeds in my mind of, it's fine that this is what you're doing and that you don't make a whole lot of money at the time, but you do need to be thinking forward about what your life looks like in your fifties and your sixties and seventies. So they planted enough seeds in me that it kind of lit a fire of, okay I do need to pay attention to this, ‘cause I won't be 20 something, 30 something, 40 something my whole life.

Jennifer: Yeah, absolutely. And I think there are a lot of us that are in helping professions who did not necessarily grow up around wealth or grow up around hearing those conversations. I know even generationally I'm gen X, or I like to call it X force, and when money conversations took place, kids would be told to go play right? So even if your family had money, that doesn't mean that you were necessarily privy to the information of learning about money management, learning about compounding interest, or how you take out a mortgage, and loans and all of those things. So it's new information for a lot of us.

Brett: Yeah, so much of it is just being willing to pay attention to it, to be willing to grow in the area of knowledge, and applying some of that knowledge to your own personal life. I have a personal story I think that really had an impact on my life, I was in a helper healer position, I was about 32 or 3, had four children, we were surviving financially, but certainly we're not getting ahead, but I was at a friend of mine's lake house, at table rock lake. And I had to pass through his bedroom to go take care of some, get one of my kids dressed to go or something of that nature, and he's sitting at a computer. And this man is a CEO of a company here in Kansas city and very, very well off. He was at the time in his late fifties and was already retired, but I asked him, hey what are you doing? He said, well I learned a long time ago that you work a lot, you work real hard to make money, but you also have to work hard to keep your money and to pay attention to it. That just kind of stuck with me, Jen. Okay, we work hard for money, but then people who have money have to pay attention to it. So it lit a fire in me, that lit a fire. I've gotta start paying attention. I had my financial counselor friends, my financial investment friends telling me you need to pay attention to this. And then just something about that day, just lit a fire and said, okay Brett, you've gotta pay attention here.

Jennifer: Yeah, sometimes the message lands at just the right time, or maybe the seeds have been planted, then when the message comes, you're like, all right it landed on fertile soil this time, I'm ready to really listen.

Brett: Exactly right, exactly. So you had said something earlier about how maybe in your schooling process as a therapist, they really don't teach you about the process of running a business and saving for wealth and such of that nature. So it really becomes, well, let me stop there for a moment. I have ran into people who are not helper healers per se, but maybe they are attorneys, or they’re doctors, but they never paid attention to money either. So this is not just indicative of helper healer professions, I think it's indicative of a lot of people that just want to do what they really enjoy doing, but don't pay attention to a very important aspect of their life as well, and that is building financial wealth.

Jennifer: Yeah. I think money has this, we have a weird relationship with money, especially in the west, in the US, and a lot of when I'm coaching therapists or small business owners and I ask them let's look at the numbers. A lot of people do not want to look at the numbers, right? There's a little bit of avoidance there. I've seen black and white. And when we really do look at the numbers, we put things down on paper, we start to develop a plan, the opposite actually happens. Instead of fear, there starts to become freedom and the release of shame, because there's a plan for what to do instead of feeling like, I don't exactly know what's happening I just know that I make it every month, but I don't quite feel like I'm getting ahead. Looking at the numbers can be very intimidating for people who don't know how to look at them themselves, maybe necessarily. So getting other people around you who are further along in the process that you respect, getting some coaching training, seeing a financial advisor and learning how to do these things, although it's an intimidating step to take first, it is extremely freeing when you actually start to feel like you're in control of your financial destiny to some extent.

Brett: 100% agree. In my 12 years in this business, multiple times I've sat in front of people who are constantly apologizing that this is all I have, this is all I have, or I haven't done anything. And I just say there's nothing to apologize for, you've taken the first major step, and that is to seek counsel about beginning to order your financial world for the future. And I think it's very human to probably know our finances are not in order, and be the ostrich and stick our head in the sand and pay no attention. And I have been that person at one time in my life. So I think there's no shame in it, I think it's just, we all like to think, well it's all gonna be okay. But honestly, if we don't pay attention to the financial aspect of our lives, I would hate to see any of us just trying to depend on social security when we get to be 67 years old or 70 or whatever the age is at the time when people retire because we don't have assurances from those kind of things. And then secondarily, we have very limited ability to live out the golden years of our lives.

Jennifer: Yeah. And I think that that's really a key point here, which is that a lot of us have a vision of what we want that to be, right? We envision ourselves, at least for me, travel is important to me. I envision that I'm going to be able to afford to travel and travel in a certain type of lifestyle. Maybe not first class, but maybe not camping on the ground all the time. So, you know, I have a vision of what I want it to be. And if I'm not intentional with where I'm telling my money to go to create that vision, then I end up working really hard for my entire career and then still not being able to hit that vision of what I dreamed it could be.

Brett: Right, completely agree

Jennifer: So I wanna talk a little bit, Brett has done other things with me, and actually he's recording with me next week, a one-hour training that will be accessible on the website, you guys can all listen to for free, ‘cause I think this information should not be gatekept, it is important for everyone to have, but he's gonna talk a little bit more in that webinar about different types of accounts and ways to pay less on taxes and save more money. Set up IRAs, if you're in a 403 B, if you're in nonprofits, solo 401ks, things like that. So we will talk about that in a different time. I wanna focus a little bit of our time now on just the basics of what we didn't get to know, and one of those is that principle of 72 compounding interest. We've all heard these things, but tell us what does this actually mean and how does this affect us.

Brett: Sure. Principal 72 is just a mathematical equation that allows us to figure, as we're investing money for our future being in retirement accounts or just investment accounts, how long it will take our money to double. So it's pretty simple. If you take a return that you're getting, let's say you're getting 10% on your return, which would be a great return over time. And you divide that into 72, that's gonna tell you your money will double about every 7.2 years. That's approximate, give or take a few months here or there, but if you are invested in such a way that you are gonna make 6%, you divide that into 72 and it takes 12 years for your money to double. That is a powerful tool to help do two things: A, gauge how we should be investing in the sense of risk, what we can get back because we're taking more risk or how much more quickly our accounts can grow because we're willing to take a risk, or it also shows us the other side, if we are risk averse and that there are many people, all of us have an investment personality, just like we have a personality that interacts with the world around us. Maybe some are more reserved, maybe some are more outgoing, etc. But when it comes to investment, it's the same thing. For those who are very reserved, I've seen very intelligent people that just hate to see their balances go, so they invest like they're an 87-year-old individual and they're making 2% and 3% on their return and over time, I mean think about this, if you are getting a 3% return, dividing that into 72, that's taking you years and years and years, over 20 years, for your money to double. In fact, what would that number be? That'd be 24 years to double a 3%. So versus if you're even invested, shall we say moderately, into a growth portfolio and you make 8%, well then your money's doubling every eight to nine years. So when you start as a 30-year person working in a helper healer type profession, and you start putting money away and you've got 30 years to work, you can look at building some nice wealth over time, but the power of compound interest has been called the 10th wonder of the world. In fact, if you look at graphs, you can go to Google and Google compound interest scales, and what would my money be if I invested, you know, a hundred dollars a month starting at age 25, until I'm 55, what would that grow to be? It would show how much that you invested in and then how much it's actually worth now. It's astounding, but you gotta do it. You gotta start it now.

Jennifer: Yeah. Two things I wanna piggyback off of, one, when my husband and I started working with Brett, one of the things he did is have us take that risk personality test, right? And we are the opposite of safe. I mean, if you look at my career, it's very clear. I don't play it safe and I'm fine with that. And that shows also in my tolerance of risk with investing, but having us take a look at that was also good to make sure that my husband and I were on the same page. If you have a partner, can you both tolerate the same level of risk or do we need to adjust that so that we're meeting both people's needs as a part of that? The other piece I wanna talk about is the compounding interest. We've told both of our kids from the time they're little from your first paycheck, put something away. Because the way they could put away the same amount now in their twenties that we put away in our forties and my husband's in his fifties. And it's gonna do way more for them, that hundred dollars, that thousand dollars, because that rule of 72, it's gonna double and grow, and double and grow, and double and grow, and they've got a lot longer, if everything goes according to the way we hope it does, they've got way longer for that money to work for them than it does for us. So you don't have to have a tremendous amount of money to be able to start doing this, and I think that's a part of what I want to get across in this conversation today. When I'm coaching clients, my therapy clients, a lot of people have this idea that I have to have 20,000, 100,000, 50,000, like these big numbers in order to actually start investing, and that's not the reality, there's a lot you can do just getting started. So I wanna go through like, if someone is at the beginning and they're saying, man, I'm making it. I mean, I got a little bit left over at the end of the month, but not a lot. What would you recommend to them, Brett?

Brett: Sure. You know, probably if they can just start even as little as $50 a month. I mean, it's always better to do more if you can afford it. But the fact of the matter is some people are just getting their businesses started, they don't have a lot of extra cash flow. So as soon as they get to a place where they can start with $50, $100 a month, putting that money in some type of mutual fund, or what's called an ETF and we can discuss the difference of those in our other conference we're gonna do, and let that money begin to work for you ahead of time. But what people don't see, and think of it like this, Jen, if I put $1,000, $100 a month, or $1,200 into the market and you put it inside an IRA, or you put it inside of an investment account, and it makes 10% the first year. So that $1,200, and again, I'm using simple math here. It is a little more complex than this, but for this sake, this is what we'll do. You know, you make 10% on 1200 bucks and you make $120 and you say, well that doesn't seem like much, you know, is it really worth it for me to not have that additional spending money right now in my pocket? Well, the next year goes along and you put a $100 a month in, and suddenly you've invested 2,400 and it makes 10% again, what you don't see going on inside of those accounts is many times like the investments in the accounts are paying dividends, and the dividends spinoff and they naturally buy more shares. And so then you begin to get a compounding impact of the growth of that money. And though again, 10% on 1200 bucks, doesn't look like a whole lot of money, but three and five and seven and 10 and 20 years later. It is amazing how it will grow, but you just have to be patient and steady and keep at it. And over time it will take off, all the data would prove that that is correct.

Jennifer: Yeah. And this kind of goes into money mindset, and the relationship that people have with money and I am someone, I know you're not supposed to say it, but it's true. I am slightly money motivated, right? So it's not my primary motivation, helping and serving is my primary, but I would say a pretty close second is financial security. And I do think that that comes from having seasons of my life when, especially when I was young or my husband and I were newly married, where we did not have much. I've talked about that in this podcast before. Just how some of those early years of not having financial security has really affected me and stuck with me during really formative years. And that's one of those areas that this comes into play for me, I like seeing the number go up. So what I've found is that since I've started investing, and since we have been investing, I like looking at the numbers in part because I'm in competition with myself, whatever I earned last year, my expectation is that I set a number at the end of every year of what I wanna hit the next year. And I will tap dance all over the place to make that happen because I am slightly motivated by money. And I like the security that comes with that, and so that's a part of just my own background and what I need to feel comfortable and not necessarily embarrassed about that. Although, you know, people in the helping profession are supposed to act like they don't like money, but that is a lie, we all like good vacations, right? And I've also talked before about how because of some of those early years, that I have to meet with you twice a year. Like I need my husband and I to sit with you twice a year and I need visual reassurance that I am not going to eat cat food when I get old. I am doing all the right things for that not to happen, Brett has assured me a million times that's not gonna happen. But for me it helps calm my system down to be able to see the numbers and check in. And so I think it's important that when you're gonna work with a financial planner, a wealth manager, that you also work with someone that understands that you can share with what you need, and where some of your fears or insecurities come from so they can also offer you assurances in those ways, or create a plan that's gonna feel good to your system.

Brett: Totally agree. And you know, Jen, I think a couple of things as a response to your statements, first of all, I don't think we should apologize for saying I want to be able to live very comfortably, and that may look very different to every person. Comfort to me may be very different than it is to your family, but we don't need to apologize for that. We do live in a country that allows us the ability to build wealth and then affords us the ability to enjoy with that wealth, whatever we want to do. So, you know, no apologies for anyone out there that's listening to this who says, you know what money is of value to me. And I think it does have a lot to do with how we were raised. I was raised up in a very lower middle class, a blue-collar home, and there's nothing wrong with that, but we never said one word about money in my home, not a thing. And so my interest in it was only brought about by other people who challenged me to think about this in my life. So now I will tell you, this is what I share with people. I want to make good money, I want to live well, and money is a goal, but don't let it be a God to you. Because then you're stretching for it and maybe compromising things too much to get it. You put the hard work in, you invest on a regular basis, over time you're gonna get to your goals financially more times than not.

Jennifer: Yeah, absolutely. So if someone is listening and they're feeling like, I know I need to do something, but I absolutely don't know what to do, are financial planners open to talking to someone who let's say, does just have that 50 or a hundred dollars to start with a month, or am I incorrect? Do people have to have a set amount before a financial advisor would really meet with them?

Brett: Yeah, really good question. Honestly, Jen, it depends on the individual financial advisor. As advisors grow their business, just like therapists grow their business, they get a docket full of clientele and you know, to bring on new clients, they end up compromising customer service to the clients that they do have. But most of those advisors who get to that place also have someone, a junior advisor or someone of that nature that they're somewhat mentoring into the business that they can hand that business off to if necessary. So it really depends on the individual advisor. Some of them are willing and they'll say, yes I'll help you. Or, and it doesn't matter how many assets that you have, others may be at a place advanced in their careers where they just feel like they can't offer that type of customer service. But if that be the case, ask them for a referral to someone who could service their needs, generally, they will know someone.

Jennifer: Yeah, so just make the call. I think the biggest takeaway here is don't let fear or intimidation about what you don't know about money stop you from taking the first step. And I always think of what will my future self think of the decision that I'm making right now, will they like that I am sitting here in fear, or will they like better that I make a call and I sit with that discomfort for 15 minutes or an hour while I have the meeting and make a plan. What will my future self appreciate more that I did? And that's what I try to do.

Brett: That's actually a really good way to look at it, Jennifer. I mean I think that it inspires us to motivation now, and when it comes to money, the sooner for any of us the better because of the compounding factor and the 10th wonder of the world they call compound interest. So get it going.

Jennifer: Yeah. So Brett actually shows us there's this projection, what's the name of that projection? Because I love seeing, if you keep doing what you're doing and this is your retirement age, this is what you're gonna have, and at 90 this is what you're gonna have. That again, based on my history, that soothes my soul. What is that thing called again?

Brett: It's just a retirement planning software, that's all. And quite honestly, they're all over the web. So people could go out and just Google, you could Google it, Bing it, Yahoo it, whatever you want to do. And just Google retirement planning software calculators, and they'll throw those things out there to you. In fact, if you are working with a therapist group and you're a part of a 403B plan, they probably have something similar to that on the website where your 403B is held, but it's out there. Or meet with an advisor, an advisor would be able to put more of the nuances into the software for you. So you could project, well what if we do this, or what if we do that, versus just a straightforward calculator that says, oh if I save a hundred dollars a month for the next 35 years, how much money will I have in retirement at that time? They're out there.

Jennifer: Do people in general, what does the research say about people growing wealth with a financial advisor and without, is there a statistical difference in the amount earned?

Brett: Such a good question. And it's, maybe controversial is the wrong word, but it's certainly the question that needs to be asked of an advisor to say, what is your value to me if I pay you to assist me in this process? There's a lot of data out there that's based on studies that have been done that show over the course of a 25-year period people who are using an advisor will earn approximately 2.8 to 3.2% more on their assets over the course of that timeframe. And you say, well that may not seem like a whole lot, but let's say if you would manage your money and you manage at 6%, which doubles your money every 12 years and an advisor helps you get 9%. I mean, then it's doubling your money every seven years. I mean it really does begin to pay off when you use someone that can give you wise counsel. One of the things Jennifer, that is so important that advisors bring to people is like right now we're in a down cycle of the market. Some are threatening that we may be going into recession. And so people get intimidated by that and they see their balances going down by 10% or 15%. And it's kind of freaky to them. It's economic cycles. This is just a part of an economic cycle and not depressions, but rather recessions are a natural process that our economy goes through in contraction and expanding over time, it's nothing to fear. In fact, if you are younger, and you are funding your investments for the future, recessions are your gift because of the market. I'll give you a quick example. The market's at 10,000 and it drops 20% to 8,000. And those aren't the real numbers of the market I'm just simplifying it. It drives from 10,000 to 8,000. When you buy a mutual fund or a stock, you're buying it at a discount. So that discount rate, when the market recovers, will only compound all the quicker. So it's nothing to fear, but it is something to take advantage of. And then secondarily, to go back to the point as an advisor, holding people's hands in those down cycles can be a pretty big part of my job. Hang tight, we have a plan, we have an end in mind. And if we divert because we're having a bad year in the market, what's that going to do to us in the long run? So advisors earn their keep sometimes by just holding people's hands when the market’s down.

Jennifer: Therapists do the same. So I have one more question I'm thinking of: what is it that someone that's listening to this might ask and here's the question. How do you get paid? Like, is this gonna cost? I know the answer ‘cause I do this, but like, is this gonna cost me a lot of money to have a financial advisor? Like how do you get paid?

Brett: Great question. I'm gonna sound a little bit like a politician. There are multiple investment options out there in today's market. And as an advisor, what I will do is I will tell people, okay, if we invest in these things, these are the expenses. If we invest over here, these are the expenses. So you can go from being a fee-based account where a fee is being charged to you on a yearly basis, out of the value of your assets to a brokerage account where maybe you pay a one-time expense to go into a certain stock or something of that nature. So for the most part, to go talk to an advisor is not gonna, there's not gonna be a cost to that. They're not gonna charge you per hour, things of that nature. Although I will say maybe some of them out there do, but that's not the norm. The norm is, you go sit down with an advisor, then he can share, or she can share whatever investments that are available through the place that they work and they can share what the specific expenses are.

Jennifer: Okay, perfect. I had someone that I did coaching with that was getting charged a monthly fee that was pretty, pretty high. And when I found that out, because again, they were the first person in their family to ever make money and someone freaking took advantage of them, flat out, someone took advantage of them and it really ticked me off. But if you don't know, because no one's ever told you, and you're too embarrassed to ask the question, you're not an informed consumer. So thanks for being open and upfront about that, because those are things that I think would intimidate or maybe cause some people not to reach out, because I don't know that I have the money to start paying fees for this. So thank you for that, I appreciate it.

Brett: You know, I might add just right quick, Jen, that it's very important if you take the step to go speak to an advisor, you have every permission of any advisor to say: talk to me about what this is gonna cost me, what are the expenses of this type of investment? And I would say I'd like a full disclosure on that. And let them explain to them at that particular time.

Jennifer: Yeah. And just because they have the word financial advisor, or wealth advisor behind their name does not mean that they're the right fit for you. So Brett is actually our second financial advisor that we have had, and the first one was a really great person, their strategy just wasn't in alignment with our goals. And so we found someone who was in alignment with our goals. So just like when clients come in and they're looking for a therapist. Not all therapists are the right fit for that client, not all financial advisors are gonna be the right fit for you. So if you don't feel comfortable, if you don't feel in alignment, if you feel like someone's being pushy, if you feel like their goals are not matching your goals. You know what, there's a lot out there. Just like there’s a lot of therapists, find another one it's okay. Or ask for a referral, or reach out to me, or reach out to Brett. And if Brett's not it, he would be the first to say that's okay. But let him give you a referral as someone he trusts that might be more in alignment with your goals, or let me help with that, but don't let that intimidate you. If it's not the right fit it's okay. Because like I said, I gotta meet with him twice a year, I better like him you know? All right Brett, thank you for your time today. How can people connect with you?

Brett: Sure. I work in the Kansas City marketplace, that's my home base, but I actually manage money for people and their assets all around the country. So I would say a couple of things, they could call me at 913-234-6457, or they can email me, first letter B, and then my last name Banks,, and be glad to answer any questions. And if they're looking for someone in their area, I may have connections to someone to help them, and we're glad to help them over long distance as well.

Jennifer: Perfect, and I will put his information in the link below. Thank you so much. This is an important conversation, this is a conversation therapists, or really anyone, should not avoid. Money is not big, bad, and scary unless we allow it to be the boogeyman under the bed. Let's take it out into the light, let's take a look at it and be honest with it, and make a plan, let our money work for us. Thank you for listening today, if you wanna connect more with me,, you can also find me on all the socials, even the TikTok. So get out there and live your best dang life.

Brett: Thanks a lot.