Kitces & Carl Ep 127: Creating Value Through Presence (And The 50 Fires Podcast)

***Editor's Note: Can't get enough of Kitces & Carl? Neither can we, which is why we've released it as a podcast as well! Check it out on all the usual podcast platforms, including Apple Podcasts (iTunes), Spotify, and Stitcher.

Show Notes

• 50 Fires Podcast
• Behavior Gap
• Seth Godin
• The Big Bang Theory
• Magnolia Network
• Lukas Nelson
• Kristy Archuleta
• Maneet Chauhan
• Dean Norris
• Nick Murray
• Dave Ramsey
• Bryce Roberts

Kitces & Carl Podcast Transcript

Michael: All right. Well, hello there, Carl.

Carl: Greetings, Michael Kitces. How's it going?

Michael: I'm doing well. I'm doing well. How are you?

Carl: Things are good. Yeah. Normally, I'm excited about snow, but it feels like I just put the skis away. So I'm not particularly excited, but it is snowing in Utah. That's good news, I guess.

Michael: I say, I think that's how Utah works. My understanding, at least. I'm a native East Coaster. But I read a book somewhere that, apparently, snow in Utah, especially when you choose to live in the mountains, is a thing.

Carl: Park City is doing Park City things.

Michael: Okay. So it's doing what it's supposed to do. Okay.

Carl: Yes, yeah, exactly, just a little, just feels like...anyway, it's good. It's good.

Carl Has A New Project [00:49]

Michael: So I want to hear. My understanding now, because there are some people that think we are in constant daily connection of what's going on in each other's worlds, and in practice, I really only get to catch up with you when we sit down once a month to record these. So, I was going to say, you've got a new project, and when you do new projects, you tend to do neat things. Having known you for many years, your new projects, "Yeah, I have a new project. It's going to be a column in The New York Times." And then you wrote it for seven years, or, "I have a new project. I'm leaving the continent, and I'll be back in four years." So your new projects tend to be really, really interesting.

So, as I understand it, you have a new project. So I would like to understand what the new Carl project is. Because if it's anything like your prior projects, it's probably going to be a thing for a while. So, what's your new project?

Carl: Well, first of all, that's really humbling and flattering. Yeah, I guess, I do treat all of these things... I started probably 15 years ago, because I heard Seth Godin say that he treated his life as a series of projects, and each one takes a couple of years. At one point, he was like, "I think I have 10 more projects left." And I love that idea of thinking of life as a series of projects, almost like the way you would if you made movies. You're going to get a team together, you're going to do a thing, and it doesn't have to go forever. In fact, you and I talked about this, we talked about...I think I agreed to do 50 episodes. And you started telling me what episode number we're on.

Michael: And then we got to 50 and you said you would stick around to 100. And now I just don't talk about what episode we're number on at all ever.

Carl: Yeah, but I love things that have a starting point and an ending point. And that's the way I think of projects. So, this is the latest one, and again, this would be fun to chat a bit about because I get asked this question all the time, "How do you kind of do those things as if there were some sort of grand plan?" And there never has been. So, I was in New Zealand, and I got an email from some folks in Los Angeles, and they said, "Hey, we've done this show, Big Bang Theory, for years." And this is Dave Goetsch.

Michael: I've heard of that. Being fairly ignorant of anything pop culture, I actually do know what Big Bang Theory is. Okay.

Carl: Yeah. And he was like, "Look, we want to do for Big Bang Theory, we want to do it for money. What Big Bang Theory did for physics, we would like to do a TV show that does it for money." So, we started talking about concepts, and we spent years.

Michael: And just the guy got to be an impostor. And I don't mean this in a negative way to you at all, but why did he email you about this? How does that email come about? The producer of Big Bang Theory is like, "Hey, I think I'm going to send an email to Carl Richards."

Carl: Yeah, believe me, I asked the same...

Michael: How does that connection happen?

Carl: It is the same way. I asked the same question about Ron Lieber, asking, "Hey, I love these sketches. Would you do...?" I think the only thing I have, this is part of the thing I'm uncomfortable with, the only thing I have to offer there is, I guess, because I was playing in traffic. What he said was, "You talk about money in a way that nobody else does," is what he said. And I was like, "Okay, that's interesting." But I asked the same question. I'm just like, "How did that happen?" I don't know. There's a mystery to it. After all the...I play in traffic and I work to increase my luck surface area, after all that stuff, there's still a giant pile of mystery that I just described. I'm a huge fan of luck, bald face, just luck.

Anyway, Dave says, I'm trying to fast forward a bit, Dave says, because we worked for two or three years on ideas, and with his partner, Rebecca, who has become a partner of mine, just great people. We work on all these ideas for a TV show, and we land on one that we're quite excited about and we think will happen sometime in the future. And in the middle of pitching it somewhere, somebody from Magnolia Network, which is Chip and Joanna Gaines' company, they started the whole "Fixer Upper," the entire genre really, heard the pitch and said, "Gosh, we really love that. What do you think about starting it as a podcast?"

And the idea was, secretly, it wasn't super-secret, but I just wanted to show the world what it was like to have a conversation with a real financial planner, right, what a really good first meeting would feel like. Now, there's a little more to it than that, but that's largely, what does it mean...? And I have these conversations with people all the time, unrelated to work, right, sitting on a fire, at a coffee shop. My favorite entry point into somebody's life is their use of capital, time, money, energy, and attention. So, if I get to meet somebody that I feel likes those kinds of conversations, like I met this person named Jessica the other day, and I was like, "Tell me a little bit about, how do you spend...? What was your earliest memory of money?" Call me crazy, but I was doing that anyway.

So, Magnolia was like, "Yeah, we would love," the folks at Magnolia, Chip and Joanna Gaines, were like, "Yeah, we'd love to do that." And so we worked. We've been working on it for over a year now. We've recorded all these different pilots, all these different tribes. It's called "50 Fires," which is kind of a nod to...in fact, in the third episode, which was one of the ones we recorded first, I talked about this fire pit I'm building in my backyard and my dream of having... And I just had a group of four financial advisors, actually, out the week before, and we sat around a fire up in the mountains and talked about this kind of stuff. And so it's kind of a nod to the idea of sitting around a fire, talking about things that really matter. So, that's a little bit of the genesis story and what the podcast is. So, it's out now, as we're recording this, the fourth episode. We're releasing weekly. The fourth episode launches tomorrow, and it's Chip Gaines.

Michael: Okay. So, by the time this episode airs for our recording, you'll probably be another four or five episodes out, because we record in advance.

Carl: Yeah.

What Is 50 Fires? [07:37]

Michael: So, I'm struck by how you framed this, "I wanted to show the world what it was like to have a conversation with a real financial planner." So, love that message. I'm sure most of us who are listening love the message. But just help us to understand more, what's the show? What are you doing? What's the show?

Carl: Yeah. I'll just walk you through a couple of the episodes. One episode ago was Lukas Nelson. So Lukas is an incredibly successful musician in his own right, and he also happens to be the prince, right? He's the son of Willie Nelson. And we sat down at a songwriters' festival that I got asked to come to for this purpose. I was super curious about what it was like to grow up as Lukas. I wasn't curious what he learned from... I'm a huge... Willie Nelson? Come on. I grew up with that sort of stuff, right? But I didn't really want to know about that. What I want to know about was what was life like for Lukas around money.

And then this week, I just did the interview a couple of days ago with Chip Gaines. Now, Chip Gaines, we all know, Fixer Upper, this celebrity, but nobody's ever had a real conversation with these people about money because we don't do this. So that the show is, I often start with, in fact, I've got my notes right over there, I've got a list of questions. And I worked with some of our favorite financial planner, academic folks on working through these questions. But I often start with, "What's your earliest memory of money?" which is not an unusual question in the financial life planning/therapy world. And all I'm doing with these early questions is just kind of using them as an opportunity to find the crunchy bits, the bit where you're like, "Oh." You can feel it and see it when something...and all of our listeners have been in these first meetings where we are in conversation and somebody's like, "Oh my. Jeez, I remember my mom saying, 'Don't be so spoiled.'" And you're tempted to just move on. But in the show, I don't move on. I'm like, "Oh, tell me more about that," right? So, what's your earliest memories? One of my favorite questions is, "Did you know in junior high...?" This has been really, really helpful.

By the way, Michael, this is one of the things I'm hoping, is that these questions, in fact, we're building resource guides in every episode for free for advisors to use in their content marketing stuff, their education stuff, they can send it out in their newsletters. We're building resource guides, almost like a book club around each episode. And one of the things we're doing is using these conversation prompts. So, one of my favorite questions I'd never heard anybody ask was, "What socioeconomic class were you in in junior high?" It's been amazing. I didn't ask, "How did you know?" It's like, "What socioeconomic class?" And people always are like, "Oh, I was one of the rich kids," or, "I was one of the poor kids." And then my favorite follow-up is, "How did you know?"

Michael, you just told me you're one of the poor kids in junior high. How did you know that? And the stories. I'll tell you one story, and I can't remember who said this. I think it's one of the episodes that's already out. He was like, "Yeah. Oh, man, yeah, I was one of the poor kids. I was one of the kids that got lunch," right, school lunch. And I was like, "Oh, that's interesting." In fact, I said, "How did you know that you were one of the poor kids?" He's like, "Well, because I only had one pair of jeans. And I was hanging out with this girl who was, I knew, one of the rich girls. And one day, at school, we were playing football afterwards, and I got some grass stains on my jeans. And the next day, I showed up with those jeans on, with grass stains on. And this girl was like, 'You only have one pair of jeans?' And she didn't talk to me anymore." That's amazing.

And then something that I think Kristy Archuleta taught me was give them a chance to make sense of that now. So I said, "Looking back on that experience now, what do you make of that?" So much there, right? So much there. So, that's what the show is. And I've got a whole list of those questions. And I kind of moved from... I'm also really curious about the role of wisdom, traditions, or religion, or spirituality, or family. Were there any customs or traditions from your family that informed how you use money? That's been fascinating too.

We just had Maneet Chauhan, one of the celebrity chefs, she's the judge at "Chopped," and she grew up in India. And she told the story about how she saved up enough money. She was like, "Our family, we didn't have a lot of money, but we didn't know that because everybody else around us didn't have any money. I never got told no because I never asked." She was like, "It was incredible." I was like, man, that's a really interesting thing to think about, who you hang out with. And Instagram has ruined that for all of us. Anyway, she saved up this money, and she bought a can of Coke, a small can, and she was showing me a small can of Coke. And she's like, "Because you couldn't get it in India." She was on a trip somewhere, took it back to India, never opened it, kept it in the closet, and would look at it every once in a while. And you're like, "Tell me more? What do you make of that now? Why is that important to you?" Fascinating stuff. So, that's what the show is.

And then I work my way through life, sort of, "Tell us a little bit about now." With Lukas, we took off on songwriting and money. With Dean Norris Junior, he's Hank in "Breaking Bad," with him, he told me, "Money," I love this, "Money..." I was like, "What does money mean to you?" is one of the questions I asked him. He said, "It just means how many months I can go without working?" He's like, "From the earliest..."

Michael: Because he lives in the performance world, so it's all, "How long can the money last until I have to go get another gig?"

Carl: That's exactly right, right? And he was like, "From the very earliest, sleeping on my friend's couches, that was what money..." And I was like, "How did you come up with that?" He was like, "I just came up with it. I would just take the total amount in my bank account divided by the amount I'd spend every month. And I wanted to get that number as high as possible." And I was like, "That's incredible." The number of months I could go without working. Really cool. So, that's the kind...

Michael: There's a version of that, well, yeah, that's why we save for retirement. Accumulate enough money that we don't have to work for the last 30-odd years that we're going to be around. But that sounds like he's got a very different frame. This is a hand-to-hand combat of getting through each day and week and month of how long until I have to find my next gig.

Carl: Yeah. When that comes up in the show, I would think would happen, at least the way it happened to me in a first meeting, find a client who said something like that in the first meeting. I wouldn't just go, "Okay, cool," write down, and move on. I would want to, "Well, tell me more about that. That sounds like that was an important discovery to you. Isn't that interesting that you...?" He is like, "Well, yeah, because I'm generally pretty conservative." I'm like, "Whoa, you're conservative and generally risk averse, and you chose to be an actor and moved to L.A.? How do you circle that square?" And he's like, "Yeah, I know. I know. That's why the money, how many months."

So, you're just looking. I kind of think of it as really paying attention, which is...and I think what these people are feeling, because the universe...I get a little emotional about it, to be honest, because the universal thing at the end of these conversations has been, "Thank you." And what I think they're feeling is the intense presence of somebody who's really paying attention. So I'm really looking for the crunchy bit, trying to feel the emotional bit, "Oh, hey, let's go back a minute ago."

Chip Gaines, of all people, used the word insecure four or five times. This is a guy on the top of the world in terms of...he used the word insecure four or five times. You better believe I'm not going to let that go without saying, "Hey, Chip, you said insecure four or five. Let's talk about that. What does that mean to you? Why insecure? Would more money solve that? No?" The other words that we got to talk about, if you're insecure around money, more money will never solve that problem. So, anyway, that's what this show is about. Sorry for the long-winded answer, but that idea of presence, super-valuable.

Michael: So, now, I follow more just the context that you gave this. So, right, ideally, hopefully, from our greedy financial advisor perspective, people will hear this and say, "My advisor doesn't ask me these questions. I want to have conversations like this." And then, hopefully, they seek us out, those of us that really do this.

Carl: That's exactly right. I don't know if I've really ever said this publicly, but that was literally the driving factor behind the way I wrote Behavior Gap, was I didn't want to say... So Nick Murray has taken one approach, which is hit people over the head with the idea that you need help. And I'm down with that. Cool. It's just not... My approach has been more of a chess game. And so I wanted it to be self-obvious. If you read Behavior Gap, I wanted it to be self-evident that you would want somebody to help you see blind spots as it relates to your investing, because that's where I was coming from at that point in my career. And now, I'm simply thinking of this as, "Can we just show the world?" And it doesn't have to be an advisor, by the way, but can we show the world what it would look like to have a conversation with your spouse about...?

Kitces, this is crazy. I realized after... We've probably done 30 interviews. We've only got eight of those. There was a bunch just trying different concepts. But I realized after 25 of them, I was like, "Oh, my gosh, I haven't asked my wife, Cori, half of these questions. I don't know the answer." So, on a road trip a little while ago, we were going down to the desert of Southern Utah, I just waited till there's a little pause in whatever we were listening to. And I asked her, "What was your earliest memory of money?" It's amazing. In fact, the "50 Fires" team wants me to interview Cori on Friday, so four days from when we're recording.

Michael: Wow.

Carl: Cori and I are going to be episode number 9 or 10. And I can't believe this stuff I didn't know. I've been telling this story that Cori grew up in a family...her dad was a property developer, a real estate developer, and she was very comfortable with easy come, easy go, money is no problem. And I was scarcity-minded. I told her that I've told that story probably a hundred times at speaking engagements. And she was like, "What are you talking about? That's not at all the way it was." I was like, "Oh, my gosh, I don't know."

So, can we show people, can we demonstrate what it's like to have a conversation about money? Period. Can we demonstrate what it's like to be guided through the conversation? I have a big goal. I want a million conversations about money happening a month as a result of the podcast. That's the big goal. Because if we do that, what do we have now? The financial pornography network, is that our model for how to have that conversation? Ramsey, bless him for all the work he does, but we, us, in the world, we need to be able to go, "Yeah, that, that. That's the goal."

How Is It Having These Conversations With People Who Already Have A Financial Advisor? [20:17]

Michael: So what's it like having money conversations with high-profile people who candidly, I'm assuming, already have a "financial advisor," they're probably at a level of financial complexity that most of them have engaged support.

Carl: Reasonable assumption. Yeah. First of all, this conversation has nothing to do... I've never asked anybody, net worth, balance sheet, "How much money do you have in the bank?" There's never a number thrown around unless they throw it around. So it's very different that way, but...

Michael: Because you're really getting underlying money stories, essentially.

Carl: Yeah, meaning and money. What does it really mean? And if somebody brings up, oh, Maneet said that her dad kept these journals of every penny that every single person in the family spent, when they came home, they had to tell him, and he'd write in these journals. I was like, "Do you still have those?" So we talked a little bit about budgeting. That would be a tangential, "Oh, hey, let's talk a little bit about that." But it's not about that, it's about... So there's two things to think about with that question. One is what's it like to have conversation. I'm scared to death before these meet. Lukas Nelson, I was like...and then Chip, I was scared to death, Maneet, all of them. A guy named Matt Higgins, who's a shark on the "Shark Tank." Dean Norris, come on. Hank? So scared to death until I realized this is so universal. At this level, not the "how much money do you have" level but "what does it mean to you," the struggle is so universal that I finally settled into the idea of, "Oh, it'll take me a few minutes to get them to realize this isn't normal. I'm not going to ask you about how much money you spent last month or pitch you on an investment. I'm just going to really try to pretend like you and I are sitting in your favorite coffee shop."

And so, finally, when I realized that, I was like, man, I sort of was like, "I know how to do this. I've been doing this for so long. I know how to have these conversations." But what's interesting from their perspective, and I don't pitch financial advisors or financial planners, I'm just trying to show, because you and I have talked about this before, I don't know how to tell people the benefit of what a real planner does. I'm trying to show them. And I'm not even hinting that it means real planners, you have to go this deep. I'm just saying, this is one version of it. And universally, people have been like, "Oh, my gosh, thank you. I learned a lot that I didn't even know about myself." So, that's been kind of the response around, "I've never had this experience." Universally, people have not had this experience.

Michael: So, I guess, to take that further from you, so relative to a world where these people all have financial advisors, what are you learning about financial planning, value of financial planning, value of an advisor? Because I feel like there's some perspective there that you're unlocking around what's valuable and meaningful.

Carl: Yeah. All I can say is that I am shocked. You know I've been doing this a long time, and I've been having conversations about money for a very long time, sometimes rather public ones, right? And I am shocked still, which is, I can't believe I'm shocked at how universal the struggle is to make sense of all this and how valuable, how hungry, that was what I was thinking of earlier, how hungry people are for this. And now they don't know they're hungry for it. That is this whole trick.

Michael: I was going to say, because that's...right, at some point, my business brain starts kicking in. Okay, I get all you're saying and the power, but will they pay for it? Will people pay for this?" Has anyone come out of these meetings like, "Carl, do you still do financial planning, because I want you to be my advisor, because that was an amazing conversation?" Are these cool conversations to have because they're cool conversations to have? Which is fine in of itself, or can I do this as an advisor? Do I need to be doing more of this as an advisor for those that are not going to the level of question depth that you're talking about here?

Carl: Listen, I think the answer to that question is, undoubtedly, yes, people will pay for it. That's how I built my business. And if I were to do it again, it is all I would do. The problem is they don't know they want to pay for it.

Michael: Right.

Carl: So we've talked ad nauseam about this. I think that righteous, I'm using these words very carefully, please, I don't want to be misunderstood, I don't want to miscommunicate. I had a righteous trick, and the righteous trick is always in the service of the client. So it's different than a bait and switch. The righteous trick is to still greet people. They come to you because they've got a presenting problem. You and I have talked about that. One of your favorite questions is, "What brought you in today? What's the presenting problem?" Performance. My performance. Then, we can either say like, "Oh, that's stupid. I only talk about deep, meaningful questions," or we can say, "Gosh, performance is important to me too," right? In fact, it's important in our whole firm, because it's part of your overall success. Believe me, we'll get to that. And before we do, would you mind if we back?" And we back them in, which we've talked about ad nauseam, right? We back them into these more meaningful conversations.

I have not seen yet. I'm sure there are people who are good at it. And I'm thinking of the hardcore life planning and even financial therapy side of the business, there are people who are good at advertising that and marketing that. I can't figure that out so what I think the best thing to do is, "What do you do?" "I'm a financial planner." "Oh." And it leads to some discussion, and then I can righteously trick you into...next thing you know, you're crying on my couch, metaphorically.

Michael: Or actually.

Carl: Or actually. And I've told people on the show, I've been like, "Oh, yeah, the goal." Somebody said to me, "I didn't know I was going to sit on a couch." I'm like, "Well, that was my goal when you got here. Somebody was going to cry, and it wasn't going to be me." But I think, after, this is the key, and I think most of us have felt this, if you sit down with somebody who's been a client of yours for 18 months, 3 years, 5 years, 10 years, and you were to watch them, and I did this once, hire a journalist or a marketing consultant to go interview your clients that you've had for 3 or 4 years. What's so fascinating is the things they will tell the person about what they value, I promise, it's not going to be the efficient portfolio.

They might mention, "Oh, they saved me some money in taxes," or whatever, but what they more than likely, what I kept hearing was, "Carl knows my kids. I'd feel comfortable if my husband passed away because I take care of all the money..." I'm sorry, "My husband would feel comfortable with Carl because I, right now, take care of all the money. My husband has nothing to do with it. But if I was gone, he would feel comfortable because Carl knows him." Those are the intangible things that are hard to market, which is exactly why I'm doing the show so I can say, "Here, this is what the thing looks like." Does that make sense?

What Is The Call To Action For “50 Fires”? [28:11]

Michael: Yeah. Yeah, it does. As I'm sort of hearing it, there's...interesting for us advisors to go listen, right? There's even a version of actually hearing how Carl works his magic with "clients," they're not your client in that context, how those conversations flow in practice and maybe connecting some clients in who want to explore those conversations further. Does the show have some kind of call to action if you want more of these conversations with your financial advisor?

Carl: I don't have a lot of say over where we end up advertising, but we're trying to be preemptive about it and find big RIA firms or whatever to be involved in that just so that we have the right people. But it's largely...

Michael: Please, please, don't let it finish with, "And if you really like these types of conversations, our salespeople would be happy to have these conversations with you before we sell you," insert that product here.

Carl: Yes, yes. For those of you who are just listening, I'm waving my hands, "Please, save me from that," but I don't have a lot of control over. But the call to action is go have this conversation. So, for instance, Bryce Roberts, who is @bryce on Twitter, he's Indie.vc. He is a venture capitalist that does things way differently. Super good guy. He was on. And at the end, I typically end with a question of... Bryce's youngest daughter was named Ruby, which is my youngest daughter's name too, which made it cool. Bryce's youngest daughter, as I recall, is 12. So I end with some version of the question where I say, "Let's pretend, 20 years from now, Ruby is 32, I'm still doing this show, and I have Ruby on as a guest. What would you hope that Ruby would say when I asked her what money meant to her?" Oh, they're so beautiful. That's my favorite thing. I can't wait till I've done 100 shows and I've got 100 answers to that question, because I'm asking it every time. It's just amazing.

But in the 50 Fires for advisor kind of resource guide that we're building, we include those questions. And so the call to action to the show has typically been, "Hey." In fact, Chip's was about statement of financial purpose. I was like, "Hey, one of the reasons Chip..." because I do all these interludes, I interrupt, this is something I'm really excited about, I'll interrupt in the middle of the show in post. So you'll hear me go...the show's going and then I'll go, "Hey, Carl here. Did you hear what just happened?" And I might point out a sunk-cost fallacy problem or, "Did you notice that?" And I'll say, at the end, I say, "Hey, take some time this weekend." For Chip's, it was, "Take some time this weekend to write a statement of financial purpose. And if you need help, right, you can talk to a friend, a mentor, a financial advisor."

The call to action is go have this conversation. So it may be, in one of them, I definitely said in one of them, "Hey, if you haven't asked your spouse or partner what their first memory was of money and you're a little nervous to talk about money because it's sensitive, how easy is that one? Go try that one." So we're trying to also build the resource guide for advisors to use those same questions. And we've already had, I don't know, I can't keep track of how many people have already said, "Hey, I'm using this as part of my weekly newsletter," sort of things.

Michael: So, the podcast is "50 Fires," just...

Carl: Yeah.

Michael: Yeah, you're listening to us on a podcast player. So go to the search tool and enter 50 fires. So, for the resource materials for advisors, where do people find that if they're interested?

Carl: Yeah. Right now I'm just tweeting about it and throwing it over Instagram, but we will build out a site called 50fires.com. And "50 Fires" will have a resource guide for advisors, which is free. There's nothing here to buy. Look, I just want to have a million conversations. I'm thinking of "50 Fires", I think of the podcast as kindling, right? And I didn't mean for there to be so many fire metaphors, but as kindling, and I just want to start a lot of fires, think about that, could there be a million conversations each month about money in a way that mattered? And what would the difference be in the world if that was happening? That's what fires me. Jeez, did I do that? That's what excites me about it. So, 50fires.com will have these resource guides at some point.

Michael: Very cool. Very cool. Well, thank you, Carl. It's always fascinating to get to watch the journey that started with The Big Bang producer emailed you while you were in New Zealand to ask your question. So fascinating.

Carl: You're too kind. It's been so much fun. Thanks, Michael.

Michael: Thank you, Carl.