On this episode of The Impatient Investor, Andrew speaks to John MacGregor who has been a leader and innovator in the financial services industry for over 25 years. Andrew and John discuss John’s passion for helping people and how to live a financially secure life. Enjoy!
“All these beliefs that people believe are simply opinions, if not lies that they’re telling themselves, but they’re dictating their financial behaviors.”
FULL TRANSCRIPTION:
Andrew: Hey everyone. Today I had a great interview with John MacGregor. John has been a leader and innovator in the financial services industry for over 25 years. And you can tell guys just from this interview, he’s so passionate about helping people, and makes it easy to understand how to live a financially secure life if you have the right mindset and process in place. Enjoy.
Andrew: Hey John, so glad to have you on the show, and welcome. How are you doing?
John: Oh, it’s great to be here Andrew, thanks so much. It’s an honor.
Andrew: Absolutely. So maybe just to get things started. For those who don’t know your name, you’ve been on some pretty high-profile podcasts. And we’ll talk about the book in a little bit. And you know, this message that you’re spreading, but maybe give people just a little background about yourself and how you got into the financial planning side of things.
John: Absolutely. And thanks. So I’ve been in the industry, gosh, going on, I can’t even believe this now 27 years, and I think I’ve, I think I circled the globe in the industry, I started off as a financial advisor and I grew a big practice with a major Wall Street firm. And my goal is to climb the corporate ladder, like my dad, he was a CEO of a bank. And I went the investment route, and ultimately left my planning practice to do institutional money management for a large asset management firm, I was covering the western half of the country dealing with ultra-high net worth people and pensions, and so forth and endowments. And then I was recruited to be a national sales manager, and then ultimately a national retirement director. And throughout my career, probably two-thirds of my career, I spent zero amount of time training other financial advisors across the country. And as I climb that corporate ladder, the more miserable I got. And so I realized that wasn’t really my passion. And then I left it all, to really pursue what I wanted to do, which is really transforming people’s relationship with money. And we can talk about the epidemic that’s happening right now. And in America and the world, and it’s not being addressed by Wall Street, or the financial industry that I came from. The school system has ignored this problem. And then you’ve got social media compounding the effect and just a lot of people are suffering, and they don’t know what to do. And so that’s my mission.
Andrew: Yeah, that’s great. And so one of the things that you’ve mentioned before, you’re talking about, you know, the difference between the rich and let’s just say anyone else, and you know, everyone has problems, right? You’re just talking about climbing the corporate ladder. And, you know, I can relate to that. I had, you know, worked at a big talent agency for years and kind of had the golden handcuffs, right. And why do you think the financial planning whether you’re, you know, whether you’re a wealthy person, or you’re not is such an epidemic in this country?
John: Yeah, well, first of all, it just completely ignored in our school system, right. I mean, I took a home economics course, in the seventh grade, I learned how to make chili and sew a pillow. There is nothing about credit scores, or budgeting or anything like that. So people are just set off into the world to figure out this thing on their own. And when you factor how important money is in our life, whether you like it or not, I mean, it’s interwoven in everything. And it’s completely ignored. I think it’s criminal what’s happening there. So you have that factor that’s going on. And then the financial industry, the industry that’s a quote, put in charge to help everybody isn’t really focused on helping those people without money. They’re really focused on helping those with money. And all they want to do is sell a financial product. And given the challenges that people are facing today, especially today, because of COVID, a financial product is not what people need right now. They need hand-holding, they need guidance, they need mentorship. And we can get into that, but here’s the deeper problem. You know, money is the number one cause of stress in people’s lives. Right? I mean, every research study will tell you, money is the root cause of our stress and anxiety. And stress is the leading cause of our most deadly diseases and health ailments. So this issue isn’t just about paying your bills at the end of the month. This is a health crisis. And when you think about what stress does and wears on you, and again, this isn’t just one-time stress where you get cut off in traffic or you’re late for a meeting. This is prolonged stress that stays with people 24/7 every single day, every moment of their life, and our bodies are at the cellular level. We’re not designed to handle this kind of prolonged stress. That’s why at the cellular level, our cells break down and cause these diseases. So this stress leads to high blood pressure, anxiety, depression, insomnia, cirrhosis, cancer, lung ailments, divorce, I mean, you name it, and this money crisis. It’s why they call this crisis, the biggest epidemic bigger than all diseases combined, and it’s being completely ignored and now with COVID, it’s even compounded. And this issue to your earlier point, this isn’t about people that are making low-income salaries versus the high net worth salaries, because I’ve seen it in all spectrums. Whether you’re making this, you’re spending this if you’re making this, you’re spending this. So this is affecting the rich and the poor alike. And that’s what my book is really about. And that’s what my online program is about. And that’s what we’re doing.
Andrew: Yeah, that’s amazing. I mean, I couldn’t agree more with this, you know, it all starts early on in the school systems, which, really, they’re just horrible. They really set you up to fail. I mean, I think I took those same classes that you took, right, and certainly never about balancing a budget really or about you know, what going into debt is or, you know, the college student loan crisis. I mean, that’s another one. So really, you would say there’s a correlation with financial, it’s almost like, people don’t understand the relationship they have with money, would that be accurate?
John: No question about it. And I think that’s the heart of this issue. And when I say people have an unhealthy relationship with money, what I mean is, is that people are using money to dull their pain, they’re not using money to fulfill their purpose. That’s the difference. That’s the heart of this. And that’s what we uncover in the book. So yeah, absolutely.
Andrew: Yeah. And maybe talk a little bit about the book, it’s the rich go broke, and maybe just give some bullet points from the book.
John: Sure. You know, for years, I had this idea of a book and it just turned out to be every other financial book on the shelf, what to do, what not to do with your money. And I was actually in Robert Kiyosaki is, you know, the Rich Dad, Poor Dad author, is a very, very close friend of mine. I was in his kitchen, and I’d always share with him these stories of these ultra-high net worth individuals that had everything and then lost it all. And that’s when he planted the idea in my head, he says, John, you got to write that book. And so this was really Roberts’s idea, and then I just ran with it. So the book is 10 alluring stories of very wealthy people that I knew firsthand, that lost it all. And so the overarching theme of this, Andrew is, you know, learning from people’s successes is smart. But learning from people’s mistakes is genius. And so we get really deep into the stories of why these people, emotional stories why these people just managed to lose everything. And we can talk about some of those things. And I know you’ve covered that before in your podcast. But although it’s about the rich, it’s really about why all people suffer financially, why so many people go broke or stay broke or unable to escape the rat race, and what’s interesting and sad in the same sentence is that when I started this a few years ago, Andrew, there’s 73% of people in the US were living paycheck to paycheck. Fast forward to today, it’s 78% are living paycheck to paycheck. And that’s before COVID. So the statistics are probably even worse now. And that’s despite all the information that’s available to people at their fingertips for free. I mean, you could just Google, how to get my financial life in order, and you’ll have a plethora of free information to tap into. So what I realized is that this isn’t an information issue, this is a behavioral issue. And in order to overcome your behaviors around money, you have to get to the mental core of your mental programming. That’s the only way you’re going to change these behaviors.
Andrew: A lot of this, I think I feel like folks are just set up to fail. And a lot of cases too, I think the numbers, I didn’t realize it was that high of a percentage, but I do know that the last data we saw was something like 50% of wage earners in the country are making less than $31,000. And you know, that’s why we’re so passionate about affordable housing, it’s because, you know, you’re bringing home making $27,000 a year and you’re bringing home $23,000 like that doesn’t buy you a lot for housing. And maybe another point that you had made, maybe talk about, maybe a habit that someone can create, you know, I don’t want to give the book away, certainly. But you know, what’s a good habit that someone can utilize to have a better relationship with money?
John: Yeah, great question. I think it starts at the heart of why people are suffering and what we’ve discovered with endless research. And by the way, my business partner who I work closely with a guy named JW Wilson, he’s the executive director of the Learning Code Institute. He’s a thought leader in the field of neuroscience. And so what we have basically done is blended neuroscience and practical financial guidance into one. And I think that’s why this has been so well received. And what we determined Andrew is that the number one cause of why so many people are struggling, is deep-rooted harmful and destructive beliefs that are running in their subconscious, these beliefs they have around money. And they’re buried in your subconscious. And your subconscious basically controls 95% of how you act, what you think, what you do, and ultimately, who you become. And so I always say, change your beliefs, and you’ll change your life forever. So, for example, many people carry these beliefs. And again, they’re running like a computer processor in the background on autopilot, and people don’t even realize it’s happening. So you covered this in one of your podcasts, you know, the arrogance of so many people, right? Is a huge reason why people suffer financially. But more specifically, it’s, I’ll never be rich, the system’s rigged. It’s too complicated. I don’t have time, I never grew up with money. All these beliefs that people believe are simply opinions, if not lies, that they’re telling themselves, but they’re dictating their financial behaviors. And the individuals can’t control it. I mean, I just heard a story the other day where a grandmother or mother and her daughter were walking past an office and on the front, it said, Wealth Management Advisory Firm. And the mother said to the daughter, wow, we’ll never need them. And so it’s just instilling into this young child’s mind, this thought pattern that they’re going to be broke or poor for the rest of your lives. And when you consider research will tell us that by the time people are seven years old, much of those beliefs are codified at seven, certainly by the time they’re in their mid-20s. So those beliefs are hard-wired. And this is what’s driving people to make really bad decisions with their life. So you know, the big one is keeping up with the Joneses. I’ve got to wear those clothes. I got to drive that car. I’ve got to have the newest iPhone. And this is just lies people are telling themselves and it’s driving them into a financial hole.
Andrew: Yeah, it’s so interesting. So as we’re sitting here talking, it’s quarter one of 2021. So we’re slowly getting to the other side of Coronavirus and COVID. The first thing is what are some of the impacts Do you think that’s going to have on just kind of the everyday person or in the economy? There’s you know, the stats are overwhelming, the jobless claims, I think our mutual friend Ken McElroy said something to the effect of in May of last year, there was a massive percentage of retail locations that had stopped paying their bill. So we talked about all these things. I don’t think all the numbers are out yet. But you know, what’s your take on what happened last year and the impact that’s going to have on the economy?
John: I think there’s so many ramifications that we haven’t even seen yet, Andrew, I mean, from a psychological standpoint, how this is going to affect our kids that have been out of school, not being able to interact with their friends and so forth. And now the addiction to social media because they’re stuck at home, I think the way it was handled, I think is just going to ravage the fabric of our society. Now, having said that, I’m very concerned about the future of the economy, I think short term, it’s going to be okay, because the feds going to pump so much money, so much Monopoly money into this system. And I sometimes say you can’t bet against the Fed. But I think ultimately, it’s going to come to roost, and this party is going to end and it’s going to end poorly. We’re already seeing significant inflation signs. I mean, if we saw a gradual rise in interest rates, I mean, that would be a good thing, that would show good long-term growth. But we’ve seen the 10-year treasury more than double in the last, what, six to eight weeks. And so that’s concerning me. And we saw a selloff in the market today based on pals’ comments. So I’m very concerned long term. And you know, like you said about Kenny McElroy, we both agree in the housing market, that I think later this year and early 2022, I think we’re in, we could be in some serious pain and then when you look at it from my world, you know, traditionally in financial planning, there’s a three-legged stool, you’ve got the government retirement plan, which is Social Security, and that’s due to go bankrupt in 2034, that’s 13 years, and the insurance behind that, excuse me, you have the private pension systems, those are severely underfunded, and even more underfunded, because fixed-income bond yields are so low that these fund managers had to go on and take on these extravagant investments. You know, the hedge funds and the alternative investments and those are getting crushed. And then you have and then the third part of the legged stool is personal savings. And when you consider that 64%, 65% of people in the US couldn’t come up with $500 for an emergency expense. I mean, that’s no longer a three-legged stool that’s like a whoopee cushion, you know, that’s set to go off. And it’s scaring me to death. And so I guess the answer for people is, they got to get proactive and start figuring out how to generate income on their own, how to generate cash flow. And I know you talk a lot about that, but people can no longer be relying on somebody else or some other entity to get them through this, they’ve got to get proactive on their own.
Andrew: Yeah, and we talk about multiple streams of income all the time, and just how powerful that is that someone you know that the days of the pensions and things like that are for the most part out the window. And you know, someone’s working for a big corporation, and you know, we have a shift like this, or COVID or something and all of a sudden, they’re one source of income is gone without a pension. In some cases, you know, my friends that are on the entertainment business, in concerts and sports and things like that, that’s all going to come back, to some degree no one really knows how much of that will come back. But you know, that was 12 months of think Live Nation who’s the, you know, global promoter had said that they lost something like 97% of their revenue. And that’s, you know, billions and billions of dollars. I mean, just unbelievable what happened. I also I didn’t fact-check this, but I saw something within the last day or so that said something to the effect of that, I think it was 40% of the total printed money from the government’s had come just through COVID. So it’s that, it’s like, we’re gaining so much momentum on that side of the government printing money, which is I’m sure going to lead to hyperinflation, we were already seeing it, that salaries haven’t kept up with expenses, right? And so now, in our world, it’s not uncommon for mom and dad both have two jobs, and they’re barely keeping ends meet because you know, a gallon of milk cost a $13 now, not really, but, you know, five years from now, maybe it will. So, yeah, it’s pretty interesting to see. And you also talk about some key principles to achieve financial freedom. I know there’s a lot there, I think there were 17. Maybe just talk about one or two that you think are pretty important.
John: Yeah, from a practical standpoint, now, this book and my second book coming out is really about changing your mindset around money. So you have a different relationship, as we talked about, but just some immediate things people can do. I’ve noticed in my financial planning career working with probably 1000s of individuals, they typically come to me with a junk drawer of financial products and services and contracts and statements. Most of the time, half the information is missing. So I’ve clearly seen and witnessed firsthand there is a direct correlation between financial disorganization and financial devastation. So getting your financial life in order and organized is I think, a first step for anybody because most people are not, they don’t know where anything is, and there’s a download on my website that people could use as a guide to help them do that. So I think that’s a key thing that people can do. And plus, when you’re organized, it does give you peace of mind, it takes a lot of stress off your shoulders, even though you’re struggling financially, being organized can be a big step in lowering that stress level.
Andrew: That’s great. The one thing that really caught my attention about the book so it’s the top 10 reasons the rich go broke, you know, as investors and entrepreneurs we’re always looking for lessons, right? Whether it’s a failed company, or whether it’s whatever it is, we’re always looking for takeaway. So I feel like this book is almost like, it’s a shortcut to just like you said, it was 10 stories of families or people that literally were on top of the world and went through the wringer. So what kind of prompted you to write this?
John: Well, again, I was talking to Robert, and he was the one that said hey, you know, you’ve got all these stories, I think, and Robert is a big proponent of learning from your mistakes, right? I mean, Robert talks extensively about that. And so it just sort of just morphed into this book about why people go broke. And although it’s about rich people, it’s really about, it’s really for anybody, and my goal is to drill down and find the source of the reason that people go broke. And what we realized, what I realized is that, although these are 10, completely different, very emotional stories, there is a commonality amongst all 10 of these, of why they all went broke, and we call it the bear trap, and it’s an acronym and the B stands for your beliefs around money. We talked about that earlier. Most people have harmful beliefs around money. Then when you have that harmful belief, let’s say, I’ve got to keep up with the Joneses, that leads to the excuse, right? So you have that belief, I got to keep up with the Joneses. Your excuse is, well, I got to get that new Beemer to look the part for my job, right? So they take the action, and then the A is the action where they finance this vehicle, you know, crazy interest rates, now they got $1,000 a month extra payment. And then the result is just continuing to live paycheck to paycheck, never been able to escape the rat race. So if people can start challenging their beliefs around money, and I take them through an exercise where I just say, you know, list all your beliefs you have around money, and then go through each one and ask yourself, where did that belief come from? You know, the system’s rigged, it’s too complicated, I’m not good at math, I don’t have time I got to keep up with the Joneses. It’s only $50 extra on my credit card, list all those beliefs down and then go through each one and ask yourself, where did it come from? Or who did it come from? And you’ll start to realize that those beliefs potentially came from people that really weren’t looking after you, weren’t in your best interest or came from some outside source or social media or television or what have you. Then ask yourself, is that belief, is that particular belief 100% true? So you just challenging these beliefs that you have that have been running your life, incessantly into the hole. And then lastly, you’d ask yourself, for each one of these beliefs, what would your life be like without it? So it’s really an exercise or an activity of just self-awareness, to hope you can start looking at the other side of the coin and not just staying so rigid on that one side of the coin that you have been for so long. I hope that helps.
Andrew: That’s great. And I hope everyone goes to pick up a copy of the book, we’ll leave a link in the show notes of where to pick that up. I guess, just kind of closing this out John, I mean, what’s the best place for people to find you out these days?
John: Yeah, I appreciate that. I am on social media, but I think the best way to find me is just on my website. And that’s www.johnmacgregor.net. And there you’ll find I’ve got a lot of free resources that people can download immediately and really start their journey to financial freedom right away. I’ve got links to my social media as well as to my YouTube channel, which would be another place to get a lot of good content. So yeah.
Andrew: Great. Well, I appreciate you spending the time today and everyone have a great day and go check out this book.
John: It’s been an honor Andrew, thank you so much.
Andrew: Thanks, John. Take care.
