EFR 843: How to Get and Stay Rich for the Rest of Your Life, the Worst Investments to Make, the Psychology of Wealth and Reviving the American Dream with Mark Matson

00:19 - Mark (Guest) The following is an Operation Podcast production. I believe it is. I believe fewer people believe in it than they used to. In investing, you want to stay disciplined, you want to diversify, you want to own equities, but it's a matter of discipline. So it's not knowing the rules, it's actually doing what the rules say. Trying to beat the market is one of the most destructive things you can do as an investor, and people always focus on what high returns they think they can make. They almost never calculate what risk or volatility they're actually taking on. So the basis of the American dream is capitalism.

00:49 - Chase (Host) I'm sure a lot of people just heard that and they're like oh, why'd he go there with capitalism yeah? Exactly that's got to ruffle some feathers.

00:56 - Mark (Guest) I'm sure it does, but it's the truth. Well, these are great questions. Hello, my name is Mark Matson. I am the CEO of Mattson Money and the author of Experiencing the American Dream. Welcome to Ever Forward Radio.

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02:41 My guest today is Mark Matson. He is an American entrepreneur, author and innovator in the fields of investing, science and financial education. He is the creator of educational experiences, platforms and tools that make Nobel Prize winning investing research accessible to investors of all ranges you, me and anybody else in between and transform their relationship to money. Most notably, what we're here to talk about a lot today is that he is the creator of the American Dream Experience and what he dubs the Mattson Method. If you want to learn more about Mark, his company Mattson Money and his amazing new book, I'll have all of that linked for you down in the show notes, as always, under episode resources.

03:29 Ladies and gentlemen, the man sitting in front of me is how? Old 61 and has how many children Eight kids. So at our core we are in a health and fitness show Everford radio and I got it. You know we're going to get into the financial health component and everything around the American dream. But how have you taken such great care of yourself with such high demand on you as a dad, as a provider, as a husband, as a human being?

03:58 - Mark (Guest) Well, I think, I think for me it's a screen that I developed when I was probably in grade school, you know, playing football, and then college I mean high school playing football and then doing track, and then so in my, in my head, I've always viewed myself as an athlete, you know. And in college I wasn't big enough to play football or through shop but in desk discus. So I started doing triathlons and then I started doing a lot of cycling, and so I've just always had that viewpoint that I'm an athlete no matter what, and working out, taking care of myself comes first, because if I'm not physically healthy then I can't be there for anybody else. And I've had some major health changes in my life. Even just a year and a half ago, I was diagnosed with an aneurysm in my aorta, my ascending aorta, which means it's just too big. It bloomed out and they actually had open heart surgery a year and a half ago. They went in, they cracked me open. You would never know this looking at you.

05:03 They cracked me open. They stopped my heart. I was dead, literally dead, for 16 minutes. They stopped my heart 16 minutes On purpose, and they stopped it. They had to cut out the bad part and then replaced it literally with a hose and I came back from that. I'm like you know what? I don't. Maybe I have 20, 30, 40 years I don't know how many years I got left, but I want to make the best out of them. So right now my main routine is lifting. I do a lot of lifting, but in circuits, so it's very cardio-oriented lifting. There's some cycling in here and there.

05:41 - Chase (Host) Well, I'm going to jump around because actually I did have a question around health and fitness and money. Do you think fitness taking care of your physical self is something that people vastly underestimate, or is it on the table enough with people when it comes to their money mindset?

05:52 - Mark (Guest) Well, there's a strong correlation between the two and it's an analogy. People can know what to do to stay fit. In theory, you know to lose weight, for example. In theory you eat less and of course, you want to eat healthy and then you move more. So in theory, it's very simple.

06:11 In investing, you want to stay disciplined, you want to diversify, you want to own equities and there's a lot in the book about how to do that. But it's a matter of discipline. So it's not knowing the rules, it's actually doing what the rules say. And even if you have some success, I might lose 30 or 40 pounds, get back and feel like I'm really in good shape and one day the cheesecake looks great. But if I let that go out of control and I keep, you know, keep that up and I don't get back in my zone. The thing about investing is own equities, diversify, rebalance. There's the rules, seem to be simple, but they're almost impossible to do because of the same reasons that behaviors. It's easy to know what to do, hard to do it, and that analogy, I think, with fitness and health is very similar to investing.

06:57 - Chase (Host) Cannot agree more. Cannot agree more. I want to give you a few things. I haven't shared this with you ahead of time and I want to get you to rank these in order one through five, one being the most important, five being the least important of these five in terms of long term financial success. Okay, all right. So one traditional savings account how would you rank that in one through five most important, least important in terms of how important is it for long termterm financial success?

07:24 - Mark (Guest) Long-term not very important at all.

07:26 - Chase (Host) Okay, so five four.

07:28 - Mark (Guest) Yeah, Like yeah.

07:30 - Chase (Host) Okay.

07:30 - Mark (Guest) What is one? That is one that One is the most important, one's the most. So I said four or five, yeah, okay, I mean, that's for short-term, if you're good, if you have, you know your car needs repair or you need some extra medical expenses. That's a short-term. Having money in a savings account is for a short-term emergency, not for long-term wealth creation.

07:48 - Chase (Host) Gotcha, thanks for clarifying. What about trading stocks?

07:52 - Mark (Guest) Trading stocks is a zero. It's negative five actually, Really why?

07:56 is that Because all the statistic evidence, scientific evidence, shows that stock picking is destructive. Picking stocks trying to beat the market is one of the most destructive things you can do as an investor. It increases your risk, reduces your rate of return. All the knowable and predictable information is already in the price today. Therefore, only unknowable and unpredictable information changes stock prices moving forward and it causes people to lose way more money than they ever could. Look, they have their Robinhood app right next to their DraftKings app in their phone for a reason.

08:32 And it is pure stock picking instead of owning the whole market. If I want large company stocks, I'm going to own the S&P 500. I'm going to own all 500. I'm not going to try to pick out NVIDIA or Apple or what. The next huge?

08:45 - Chase (Host) stock is going to be GameStop. What was it? Gamestop? Yeah, I remember that. Okay, what about IRAs?

08:51 - Mark (Guest) It's pretty important. I think probably 401ks are more important because a lot of times you get the match from your employer. So if you're going to put in 6% or 7%, they're going to often match you with 6% seven percent. So it's 100 percent return on your money right from the very second. But then again you still have to be very careful with how you invest it and don't end up losing it. People have been really lulled to sleep by how good the market has been for so long and it has been very good.

09:20 - Chase (Host) I was going to say I don't really hear a lot of people saying the market has been good.

09:24 - Mark (Guest) Well, it's up even 11% this year, even in a very chaotic, election-driven year with high inflation. Over the last three years, if you look from like 1995 to 2000, the S&P was up 22% per year per five years running, and the NASDAQ the tech stocks were up 45% five years running and the NASDAQ the tech stocks were at 45% five years running. People were lulled asleep, taking way more risks than they really knew what they were taking, which is what they're doing right now. What do people want to own? They're trying to own large tech stocks, but in 2000, they lost 75% in that period, right after they lost 75% of all their value overnight, just like that. And people always focus on what high returns they think they can make. They almost never calculate what risk or volatility they're actually taking on and that's disastrous for investors.

10:15 - Chase (Host) Okay. So then with let's go back to IRAs where would you rank that in the one through five kind of importance? They're probably in the middle, around the three. Okay, what about owning commercial real estate?

10:27 - Mark (Guest) Look, I would Again for long-term financial success.

10:31 - Chase (Host) Well, these are great questions, Look owning.

10:33 - Mark (Guest) I don't view real estate as an investment. Why not? Because it's more like a business. See, if I invest in equity so I build a globally diversified portfolio, I don't have to. No one calls me at 2 o'clock because the toilet's not working or the air conditioning is not working, or people don't trash my property and then move out in the middle of the night, and then I can't run them down.

10:57 - Chase (Host) You're not dealing with squatters? Yeah, I'm not.

10:58 - Mark (Guest) There are no squatters in the house. So, look, real estate can be great. A lot of people got really rich on real estate, but they didn't get rich just by investing in it. They got rich by managing it and owning it and being an entrepreneur in the area of real estate. And if that's your business and you're great at it, that's wonderful.

11:19 But there's a lot of ways to lose a ton of money in real estate, including the leverage behind it that a lot of people take on. I mean, people probably don't remember in California in the 80s, man real estate got hammered and people lost. Millions of people went bankrupt in California and throughout the United States. What happened? The savings and loan crisis there's around the 86th range and you had just like you had a financial meltdown in 2008, 2009,. Well, you had one in the mid to late 80s and you had all these savings and loans went bankrupt. All these people that bought all these houses in California. They lost them 40%, 50%, reduction in value, and people tend to overlook that type of risk. And then, talking about the health, look, you lose your home. You have these offices that you bought and leveraged up and now you can't rent them out. And now you're dealing with the stress and the anxiety because those are not liquid investments. Now you're dealing with the stress and environment of looking at maybe going bankrupt yourself. Yeah, you're probably not prioritizing your workout routine.

12:26 The same way you did before. All that that's right. Yeah, wow, that's right For sure, Okay.

12:31 - Chase (Host) so then lastly, here in the real estate world, still owning versus renting your home.

12:38 - Mark (Guest) I like owning my home. Maybe it's more of an emotional thing than anything else.

12:43 - Chase (Host) So let's think again through the long-term financial success lens here.

12:47 - Mark (Guest) If you buy a home you can afford the down payment. You keep it nice. It's probably going to go up over time, especially in inflationary periods. It costs construction costs, land cost goes up. So if you buy a home and you own a home, chances are long-term. If you're going to own it and be in it for 10, 15 years, it's probably not a bad investment.

13:08 - Chase (Host) So yesterday, real time here, real talk I went and looked at my first commercial real estate property I'm even potentially considering and I feel like it is getting me in the right mindset. I feel a shift in my money mindset even just considering this. Would you recommend leaning more into that again for the purposes of long-term financial success, of just putting myself in a scenario where the numbers are scary, the commitments are scary, but it's an investment?

13:39 - Mark (Guest) Yeah, if you want it to be your business, I wouldn't look at it as an investment. So, for example, if I take $200,000, let's say a million dollars and I put it in the S&P, historically the S&P is 10%. It doubles in about every seven years. Okay, so it's called the Rule of 72. Of what's called the Rule of 72. Small cap stocks.

14:05 Now, instead of owning a building, I'm owning 2,000 stocks all over the United States. Those have averaged 12% and small value stocks have averaged 14%. I don't have to do any work, I don't have to take any risk. I mean the market risk but I don't have to take the risk of borrowing money and managing the property and trying to keep it rented up. So it just depends on the quality of life you want to have. If you want to be a manager, because you are going to manage the property, you're going to be managing it. You're going to be renting it, you're going to be dealing with renters. You're going to be dealing with construction, you're going to be dealing with maintenance. If you want to do all that stuff and that's your lifestyle I'm really not selling it anymore, even though I'm considering this for a business.

14:52 Point, point, point point yeah Interesting. Pros and cons.

15:01 - Chase (Host) So the American dream as defined by Britannica I think we all have heard of Britannica. I grew up with Encyclopedia Britannica. I did too Is quote the ideal that the United States is a land of opportunity that allows the possibility of upward mobility, freedom and equality for people of all classes who work hard and have the will to succeed. Is that definition still true?

15:32 - Mark (Guest) I believe it is. I believe it is. I believe fewer people believe in it than they used to. But the American dream if you interview people, there's a Wall Street Journal recent survey and they interviewed people what they want in their American dream. They talked about homeownership. They wanted to own a home, they wanted to have a family, they wanted to be able to send their kids to a nice school Someday, they want to be able to retire and they like to have upward mobility from one generation to the next generation. I learned about the American dream from my father. He built it into me from the time I was probably 10 years old or maybe even younger, because I got to watch them every day living it. But I came from the hills of West Virginia.

16:08 - Chase (Host) I know you came from West Virginia too, I came from the hills of Western Virginia, southwest Shout out Star City, roanoke.

16:16 - Mark (Guest) So the same part of the country and we lived up in the hollers and my dad lived by the train track in literally a shack and in the wintertime they would cut the tops of instant carnation milk cans off the cans because they couldn't afford real milk and they would nail it to the baseboards to keep the rats from coming into their house. So this was real devastating poverty that they came out of. And my grandfather I write about on the book in the introduction he never really believed in the American dream. He believed that the American dream, he believed that the American dream was basically evil. It was based on materialism.

16:50 The only way you got ahead was to take advantage of other people. If you succeeded, it's because you were robbing somebody, it's because you stole it from somebody else. And I can get where he got that mindset because it came from the coal mines and the chemical factories. But even when he was offered an opportunity to move up in the chemical factory, from being on the lines breathing in all the chemical fumes to being a foreman and managing a crew, he refused to take it. Why? Because he thought that he would be betraying his class that he came from.

17:21 - Chase (Host) So by him having an opportunity to present itself to better his life, his family, he still felt compelled to say no.

17:29 - Mark (Guest) He said no and he was proud of it, proud of saying no. He was proud and he told his children I'm never going to work for the man and I'm never going to be one of those people that are rich and take advantage of other people. That's so sad. That's so sad, and I remember my dad talking to me about that. I'm like, oh my gosh, and it was that, my dad and my. It wasn't just that my dad and my grandpa had a different mindset, they actually saw the world in a different way because of the screens that they had. And my father had a screen that, if you helped enough people and you were of service, and he shined shoes and he sold newspapers and he sold clovering staff to the guys that came out of the coal mines and he was an entrepreneur by the time he was 10 years old, three times over. But he taught me that, number one, you live in the greatest country in the world. More people need to understand that and get that no-transcript.

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20:16 - Mark (Guest) Which I'm sure a lot of people just heard that and they're like oh, why did he go there with capitalism yeah?

20:22 - Chase (Host) exactly. To say that capitalism is, and in the same sentence as the American dream. That's got to ruffle some feathers.

20:30 - Mark (Guest) Yeah, I'm sure it does, but it's the truth. So look, I talk about Adam Smith and Karl Marx. They both believe that human beings do what they do because of greed, and pretty much exclusively because of greed. So Adam Smith said because of greed, people will compete with each other and through capitalism the free he called it the invisible hand that people will serve each other because it's in their own best interest to produce products and services. Marx believed that because of greed, that some people wouldn't end up with all the capital and take advantage of the people that didn't have the capital. But I disagree with both of them. Why? Because I've known a ton of entrepreneurs, and money is not why they do it.

21:17 No no, no, the ones that I know, the really great ones, they do it because it's a form of self-expression and a form of creativity. Like an artist would paint on a canvas, Well, an entrepreneur paints and creates through their business, through their. It's an art form. You know, Disney didn't say, okay, well, I'm going to make Snow White, you know, to make money. No, he was expressing his art. Elon Musk expresses his art and his creativity. Steve Jobs expressed his creativity and his art and most of these people didn't even spend the money they had. No, no, so it's real.

21:51 And there are people that care about making the quality of life better for other people. Communism or socialism, the alternative to capitalism. If I'm a capitalist, I'm asking how can I create value and services for other people and make their life better? A communist or a socialist asks how can I confiscate money from other people that I didn't create to distribute it to my power base and to myself? And those are two completely different ways. And if you come from a socialist or a communist mindset, you're a victim and there is zero power in being a victim. And that's why so many people are struggling with the American dream, because they view themselves as a victim and they view themselves as entitled. That's including me, by the way. There's times in my life I feel like I'm entitled to things I'm not getting, but I have to take.

22:44 Well, we were talking before the podcast about my problem with my hips and at a very young age I had asthma and they gave me medicine or destroyed my hips and they were going to replace them and I was going through all kinds of pain and suffering. I went to a blood specialist and in the blood specialist's office were 10 little kids and they were all hooked up to chemotherapy. And I was going why me, why me, God? Why are you making me suffer? Why are you giving me this disease? I'm only 32.

23:13 And I'm looking at those 10 little kids and they're playing with their cars and they're playing with coloring books and I thought, wow, man, you are really self-involved. You are really just in this ball of self-pity and entitlement. You don't get to live a life without fear. You don't get to live a life without pain, you don't get to live a life without suffering. You better man up, because there's kids over there that could be dying of cancer. And so I felt like I was entitled to a life without any terrible physical trauma or pain and suffering, and I wasn't. So we all get into that and look, I'm not saying that people don't go through bad times and people aren't victims. You know bad things happen to good people. But if you're going to have the American dream and create wealth and prosperity and love and freedom and fulfillment in your family, you just can't stay there.

24:03 - Chase (Host) I had a guest share with me, I believe it was last year. Shout out Humble the Poet, and I don't know if this is an original quote from him or he picked it up in his research for his book, but it really stuck and it was. You're only entitled to the work. That's a good one, only entitled to the work. That's a good one, only entitled to the work. I have to remember that a lot.

24:25 - Mark (Guest) My dad always told me nobody owes you shit. No, nobody owes you anything that you don't earn. Yeah, and the more you focus on helping other people and being of service to other people, the more you're going to feel not only wealth or monetary, but also a feeling of sense of worth and closeness and connection with other people and affinity with other people. And the American dream isn't even about making a lot of money. We didn't have very much money when I was growing up. We lived in a house that was less than a lot of money. We didn't have very much money when I was growing up. We lived in a house that was less than 1,800 square feet for most of my childhood.

25:01 But we had love, we had fun, we had. Sometimes we were silly. We always had great patriotism, we always, you know, had optimism about our future and we were grateful for living in such a country where you could express these ideals. So the American dream isn't even about making a ton of money. I'm against it. I'm not against it, I'm all for that. But I also know that just making a lot of money can't make you happy either.

25:28 - Chase (Host) I want to get into that Making money can be a good thing and, personally speaking and I know I'm not alone here that is a ceiling that has been placed upon us by our upbringing, by our religion, by environment, parents, whatever, and it is something that I think a lot of people struggle with, especially in pursuit of the American dream, and that is really you're not going to be happy with what you got. Why can't you ever just be good with good enough? You know enough is never enough. What would you say to those people? And is that, you think, a limiting factor on most people's American dream?

26:04 - Mark (Guest) Oh, it's a part of I think it's a part of human nature. I think that's how we are hardwired as human beings. When I first became I grew up, I always wanted to be like my dad. He was a financial planner, did investments in insurance and stuff for people. So I got a degree in finance and a degree in accounting at Miami University, ohio, and I went to work and I thought look, if I can just help people invest money and grow their money. Hypothetically, if you have someone with $2 million and you grow it to $5 million, they're going to feel more security, they're going to have more peace of mind, they're going to have a higher quality of life. But very, very early on that was just completely blown out of the water because I had some clients. My most wealthy client had $5 million. She was miserable.

26:49 - Chase (Host) Miserable. Why was she miserable with $5 million?

26:51 - Mark (Guest) Well, she went through the Great Depression. She lived in total fear. She lived that someone was going to steal her money. She lived in total fear the market was going to crash Because that's true.

27:03 - Chase (Host) She witnessed that.

27:04 - Mark (Guest) She witnessed it terrible. She lived in total fear that her kids wanted to steal her money. So it was fear, apprehension, stress, anxiety, and you only have to look through history to find just. I mean, there's hundreds of examples. But Elvis Presley, marilyn Monroe, howard Hughes, prince John Belushi I mean all these people had wealth, fame, prosperity.

27:29 They had it all and it was never enough and it can never fill the void that they had. So at a really young age and relatively 24 in my career, I knew that money didn't equal happiness. And then I had times in my life where I had a lot of money. I was very unhappy, and times in my life I didn't have much money and I was happy. So I was like well, there has to be something else here that's driving this. And through my research and all the years of my practical experience working and training people, I discovered what it is is purpose, having a purpose in life that is greater than money itself. That then, no matter how much money I have or don't have, that I can feel fulfilled in the quality of my life pursuing that purpose, and then money becomes a tool and not a means to an end.

28:20 - Chase (Host) But what happens when our purpose doesn't pay the bills?

28:24 - Mark (Guest) You just spend less, okay, I mean, it's a very smart financial advisor answer which, yeah, touche.

28:34 - Chase (Host) But you know, I think part of the American dream you know, maybe I'm just personally speaking again here is when you're in pursuit of that dream and you feel so tied to your purpose, your passion, and you're like I'm not, I'm not doing anything, anything selfishly. I'm giving, I'm creating, I'm I'm. You know, it's just all out of this, just this inner drive that I have to help other people, but yet I'm struggling financially, yeah, so what do I do?

29:00 - Mark (Guest) Well, first of all, you adopt the screen. See, when I look at the American dream, I look at it as a screen by which you see the world. And the screen is created in language and in the book I talk about the language of creating, how to not only just invest your money, but how to spend your time and your energy to create value for yourself and other people. And yeah, if you create enough value for people, you might end up making $15 million a year. $20 million a year, it's very possible. But what you do is you can't sell your soul for the money. And even if I tell kids today, look, nobody wants to start at the bottom.

29:43 The survey about the American dream where they want the house, the retirement, they said how many people do you think is going to how? How many people think it's going to be easy? And only 8% said it's going to be easy. Well, whoever said the American dream was about easy? No one ever said the American dream about it. It's about hard work. I remember when I was, my first job was cleaning dog runs at a kennel and then cleaning carpet with those stupid little drive-through trucks with a wand, and it's like 90 degrees and 95% humidity and those were my first jobs.

30:20 And nowadays people want to start at the top. They want to have that podcast, they want right away, they want to have that Instagram.

30:27 - Chase (Host) Please go more here, like the generation I see coming out of school, or just even out of high school. There's the assumption that, like oh, I have a platform, I do one thing that's considered quote work and I should be getting six figures.

30:38 - Mark (Guest) Yeah, it doesn't work that way. And I tell my kids I said, look, you know, if I'm gone tomorrow and you haven't got no money, I said, don't be afraid to start at the bottom, because if you go to work for an entrepreneur and you're only making $40,000 a year, maybe you're cleaning garbage, I don't care what you're doing. Maybe you're cleaning garbage, I don't care what you're doing, maybe you're flipping hamburgers. But if you work hard and you grow and you ask your manager, you ask that entrepreneur hey, what can I do next? What can I learn next? And entrepreneurs are always watching who. In their company I have 70 employees. I'm always watching who crushes it, who learns, who grows, who's committed, who's dedicated, and they get promotions and they get more money and they get more opportunities and they get more growth. And that's how entrepreneurism works. So, even if you start at the bottom, you know, when I discovered how I was investing people's money was and I was making at the time I was making about $300,000 a year.

31:34 I was 27 years old and I discovered that I was hurting people, how so? Well, I was doing what my broker dealer told me. They said sell stocks, sell mutual funds with track record that had good track record. Try to time the market and try to get people in and out of the market and, more than anything else, sell people what they want. If it's hot and people want it and you earn a commission, it's an easier sell right. Sell it, and I did, and I thought I was doing the best job I could.

32:05 And when I discovered that I was hurting people, that they weren't getting market returns, that they were losing money unnecessarily, that I was harming them not only them, but my own money was invested the same way and my family's money I couldn't live with it anymore. Now it didn't matter to me. I went and resigned from the broker dealer. It didn't matter to me whether or not I was walking away from $300,000.

32:26 As a matter of fact, the president of the firm said I know how much you make in commissions and you can't afford to leave. I said you don't know me. I'll sleep in a box underneath the bridge. I'm not working for your emotionally, spiritually, morally bankrupt agency. So if you put other people first and ask yourself what can I do and create value, my purpose is the thing that I can wake up every morning and feel moved, touched and inspired by. And if I do that and then find people with a similar purpose to me and I work my ass off. That's the key. And it might take a year, it might take 20 years, but it will happen.

33:07 - Chase (Host) What do you think is the biggest mistake you see most people making with their money right now?

33:13 - Mark (Guest) It's not considering the psychological aspects of money. So there's the math or the engineering how to build a portfolio. People might want to read a book on that. Oh, I'll read a book on that. But that's the least of your concern, because even if I give you just like that special diet and that workout plan, I write it all out, but now you actually have to do it. Same thing with investing Now you actually have to do it.

33:41 But there are psychological biases, the way the human brain is configured that won't allow you to do it. For example, one of the biases we all have is called herding bias. Great for zebras, bad for investors, because we all like to do the same thing that all of our buddies are doing. Investors because we all like to do the same thing that all of our buddies are doing, because we like to go with the crowd, and it's very dangerous. Even Isaac Newton lost all of his wealth in the South Sea bubble. Putting $2 million in the South Sea bubble lost it all Bitcoin. So all these people get rich on Bitcoin and then losing it.

34:13 You see all these people speculating, sometimes in real estate, speculating in gold, because gold had a real high run for a little bit. Commodities in 1992, 1993, did pretty well in the early 90s but then just got destroyed and for the last 15 years has made absolutely zero. Following the herd FOMO, fear of missing out. Remember the crypto bowl when Tom Brady said I'm in, are you in? Are you in Fear of missing out? False patterning you see a short-term pattern. For five or six years Something makes a ton of money. Five or six years is short-term in the investing world. In the investing world, if you want to understand how markets work and asset category works, if you want to understand how markets work and asset category works, you need at least 72 years of data to understand the risk return scenario of that asset category. So things like Bitcoin, a lot of exotic so-called ETFs that no one has any business owning because it's all just gambling and speculating.

35:22 And the other problem is trying to do it yourself. How, so? What do you mean? Well, there's a psychological problem in investing called attribution error. So, for example, let's say you're the world's best neurosurgeon. Example, let's say you're the world's best neurosurgeon. A neurosurgeon would never probably make the mistake of reading a pamphlet on how to fly a 747 one weekend. Then go and try to get on a 747 and land it, because their brilliance as a brain surgeon wouldn't transfer over just reading a book. Well, investing is the same way. People think they're really smart in one thing. Oh, I'm really smart, and I'm a chemist or I'm a statistician, or I'm this or that Because I applied hard work and achieved success in one area.

36:05 - Chase (Host) I can just take that model and copy paste.

36:08 - Mark (Guest) And then copy paste to the other and I'll be successful in this area. But there are people that have spent the last 70 years of their life studying markets, that have won Nobel Prizes in understanding how markets actually function, how markets actually work. Nobody studies them, and they're definitely not at the broker dealer. The broker dealer doesn't want you to know anything about that, because if you did, you wouldn't invest your money with them anymore. So, following the herd, not taking the time to study and understand how not just how money works, but how your brain works, because they have to both work together and if they don't work together, no matter how brilliant the model is, it'll implode on you.

36:47 - Chase (Host) It takes me back to my old health coaching days of I could have the best workout plan for somebody, the best meal plan, but until I focus on and we focus on behavior change and mindset, you know we would get short-term success, but then it's like that psychological component that is really going to carry you across the finish line, or not. Guys, listen up. There's a lot that we do for our health and wellness. We're watching what we're eating, we're staying active, going to the gym, hitting the yoga mat, whatever your preferred wellness habits are. I want to challenge you to consider something else. Have you considered your fertility health? When's the last time, if at all, you have gotten a semen analysis, whether you're planning on having children now or thinking about it in the future.

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38:37 - Mark (Guest) It's that psychological and performance is really simple it's what you do and it's what you eliminate. And you have to prudently invest and you have to eliminate speculating and gambling. And then not only the emotional biases, but the instincts and the emotions. So look, when the market's down 50%, like it was in 2008, 2009,. What's everybody want to do? They're not selling their fixed income to buy stocks. While they're down, they're panicking and they're selling their stocks. They're selling at lows and they're locking in the losses. And when markets run way up, they chase it and put more money in. When Nvidia makes X amount of money or Bitcoin or commodities or whatever exotic weird thing of the day is they're dumping their money into it. And it's very sad to see because, unlike a diet, one mistake if I just have one piece of cheesecake won't kill me necessarily Great analogy, but not in investing Any bad decision.

39:35 I had a guy in a class had $30 million in Boeing and I showed him all the scientific research, nobel Prize winning Dr Fama, dr Markowitz, all these brilliant people in the book and he said yeah, yeah, yeah, all the science and everything. But I know Boeing. I worked there for 30 years. It's a safe company. Nothing's going to be bad with Boeing and what happened? They made airplanes with autopilot that literally wrecked the planes, literally flew them into the ocean. And then they made planes where the doors flew off. And then they made. Then they had insider people that were telling on the company and going to the regulatory agencies to say that they were violating the safety standards. Whistleblowers and that stock that poor guy has lost over $20 million because he wouldn't listen to the science.

40:30 - Chase (Host) But I always hear, maybe from misled sources, to invest in what you know. If you're maybe just starting off, like in stocks, or want to put your money somewhere you know, invest in a product that you already use and love, invest in a brand that you are familiar with, doesn't that kind of go against that concept? Yeah, I don't agree with that.

40:49 - Mark (Guest) So this guy was working for a new Boeing for 30 years.

40:53 - Chase (Host) That's the familiarity bias we believe, wrongly so you're saying that leads us more astray from a good financial investment, really, yeah, so you're saying that leads us more astray from a good financial?

41:01 - Mark (Guest) investment. Really, yeah, because we believe that something that we're familiar with is safer than something that we're not familiar with. It's just human nature. It's another bias that we have. Well, I worked for Apple, so I have Apple. I used Facebook, so that must be safe. So NVIDIA I read about that in the news and all my buddies own it, so I'm going to own it too.

41:30 Xyg Hedge Fund. So familiarity is not a measure of risk. The way that you measure risk not to be too esoteric here is by measuring standard deviation and volatility scientifically, not just because I know something. My ex-father-in-law did the same thing. He worked for P&G for 50 years, had $5 million, or for 40 years had $5 million in P&G six months to retirement. And I said look, you've met all the Nobel Prize winners, you know about diversification, you know how this should work. You're playing Russian roulette with your future. Oh no, mark, I've worked there 40 years and I know how they make Pringles and I know the CEO and they're internationally diversified. And in the last six months of his career there he lost half of all the money he amassed over 40 years because he was familiar with it. Familiarity should breed a little contempt. Diversification is how you invest your money not in something you're familiar with.

42:31 - Chase (Host) All right moving forward Only putting my money in things I've never heard of, I have no affiliation with whatsoever. Here we are, September 2024, and let's say I've got $1,000. Where would you recommend I put that money for an investment for long term financial success?

42:48 - Mark (Guest) Yeah, well, if you only have $1,000, but and at least you mentioned savings you got enough money in your savings to pay emergencies or whatever. Keep, just keep it simple. You know, if it was 100 or 200,000 or a million or something, you want to build something more sophisticated. But really, if you just use a nice S&P 500 fund or all market fund that owns all the stocks, or maybe just put 500 in the S&P and 500 in small stocks index funds you can find, like Vanguard or these other funds they're common funds You're much better off. Your odds are much greater of having success long term. But then you better do some study and some discipline, because two things will happen. One, you'll be tempted when everybody else and you'll probably be using a trading app like Robinhood, which will make it real simple to bail out and chase something, and they'll even be sending you little buzzes on your phone in your pocket to say, hey, don't you want to buy this? Or hey, don't you want to study options? Or hey, don't you want to? Index funds are gateway drugs. They get you in there. And they might even say, hey, we don't charge any money to manage an S&P 500 fund and you go, good, I'll put $10,000 in it, but now they got you, because now they start sending you text messages and emails and hey, what about this fund? And hey, how about this class? And hey, what about this stock? Or hey, what about Bitcoin? Or what about this ETF? So now they're going to be bombarding you with ads that are going to suck you into imprudently gambling and speculating with your money.

44:23 This investing field is one of the most disgusting, nasty fields. I have a whole chapter on it about how the industry is broken In general, or just right now, in general, and always has been. Always has been. And here's the thing I was wrong about, though when I was 27, I thought look, the science is out there now, the science, the Nobel Prize winning. The science is clear. It'll get better, and I think people will be so much better off if they would admit when they were wrong. I was so wrong. It's worse today than it was 27 years ago.

44:58 That can't be true. It's true, and I'll tell you why. You've never heard of Eugene Fama. No, harry Markowitz, modern portfolio theory, efficient market theory, the cap-in model Should I have heard of them? No, that's my point. That's my point. I had a guy from Kilpinger read the book. He said, oh my gosh, this should be required study material for all college graduates, because know college graduates, you know, because they don't teach any of this in school. They didn't teach it to me and I went to business school. I had to go out and seek these people out, these Nobel Prize winners. I had to go meet them and seek them out and ask for their help and how to apply it for people.

45:36 - Chase (Host) How did Nobel Prize winners help you better understand money and therefore help us become better investors?

45:42 - Mark (Guest) Well, they write white papers and those white papers are very hard to understand, but if you talk to them and meet with them and they teach you how to actually use it, then you can and I actually, being a money manager have them on my academic board, so I have direct access to them and say hey, here's what we're thinking about using your research to apply it to models. Am I right here?

46:08 - Chase (Host) Is this research in the market? Research in human behavior, psychology? What exactly are we talking about? I have two?

46:13 - Mark (Guest) Yeah, that's a great question. I have two pieces of my board the academic piece that does the engineering how markets work, how they function, how to build portfolios and then I also have a piece of my board that does the neuroscience and the brain science and the behavior science, like Dr David Eagleman, neuroscientist at Stanford University, brain scientist, several great specials that he's done on the brain very brilliant guy, but you got to have both. You have to have the behavior and very brilliant guy, but you've got to have both. You have to have the behavior and the engineering and then you have to bring them both together. What a genius approach. It's so sad, but here's the good news, chase If you spend a little time studying, a little time research.

46:58 I even created a two-day workshop for people to go to. You're not going to go to the University of Chicago and take a 12-year PhD class in economics to build a portfolio. It's just not going to happen. But you can get access to those kinds of people and you can do a little bit of research for your family. And look, if you're young, you've got 20 or 30 years to invest. If you're getting ready to retire, you might still have another 20 or 30 years to invest. If you're getting ready to retire, you might still have another 20 or 30 years and you better not mess it up and do it right. But that's why I wrote the book so that people could have access to this information they're not going to normally get access to. But my point is the reason it's harder today. Number one more exotic, terrible investments. I couldn't foresee 27 years ago 24-7 news cycle on cable. We didn't have cable news 30 years ago.

47:45 - Chase (Host) No, no, we had half an hour in the morning news and the evening news and that's it and the newspaper.

47:52 - Mark (Guest) Yeah, we didn't have the stuff in my pocket. We didn't have Robin Hood in your pocket.

47:58 - Chase (Host) I'm so glad to bring that up again because I want to before I forget. I want to ask you, because you mentioned this a couple of times is now here in 2024, the modern world? Is our proximity to, and ease of access to, technology and things like Robin Hood and hell, even having like our trader on text message? Is that hindering our financial success potential?

48:22 - Mark (Guest) It makes it easier to lose your money. It turns, you know, melissa and I have the two younger boys at home and they're 11 and 9, and they love their video games and we really have had to be really disciplined because it's addictive. Those games are addictive and it just by design. By design, they get emotional when I take them away, they cry, they get upset, they get distraught. They're. I mean getting them refocused. But we're not immune as adults. That technology in your pocket makes it way easier to speculate and gamble and stay hooked on it and misinformation. You Google the word invest. There's billions of pages. It would take you I added it up one day it would take you 35, if you spent three minutes a page, it would take you 35,000 years to read it. Which one of them to read it? Which one of them? So information overload and ease of transaction and addictive nature of investing. And the investing industry has not gotten any better. They've only gotten worse.

49:34 - Chase (Host) You're not wrong and I have to kind of be honest here with myself and you and my audience I no longer have any stocks. I pulled out of everything last year and now you know this is not me giving any financial advice whatsoever, but I was catching myself. I was hooked to looking at the charts Am I up, am I down? What's trending? I used Robinhood and it was just so easy to feel like I was investing, to feel like I was increasing my wealth, my portfolio, hell, even my money mindset. But what I was doing was just giving myself another task to become obsessed with, to gamify, that I really had no business exploring, unless I was like Chase unless you're going to sit down, spend time, research these stocks like really research talk to a financial advisor, talk to maybe even something or somebody in the app and then make a highly, more highly educated choice. So I know you can't just be putting all this money out there staring at a screen and just you know buying and selling based on what you see somebody else do.

50:43 - Mark (Guest) It's human nature else do. It's human nature. It's just like it's human nature to sit on a couch and eat chips and not go to the gym and eat healthy. And it's so destructive. And the people you know I take my kids every year to Staples to buy school stuff and it's Staples, for goodness sake. But when you go to check out it's all the candy. Oh yeah, right at their eye level. They do it on purpose to hook them. And it's exactly what they do with investing If it's hot and sexy. And every time you go to that app you get a little bit of dopamine and it gets you and it hooks you and they want you to keep you there. And Robinhood is a great example of an industry that lies. They say there's no commissions. Well, there's no commissions, but they make their money between the buy-sell price of the stock. So every time you buy or sell a stock, they're scraping money off of the purchase. It's like buying a used car they buy it for one price and then you turn around and sell it for another.

51:42 - Chase (Host) And every time you buy or sell a used car you're getting. So these platforms like Robinhood, they're basically they're flipping stocks, they're flipping them.

51:46 - Mark (Guest) Wow, they're flipping them and they're taking the spread, and that's how they're making their money.

51:53 - Chase (Host) I mean great business model. Wow Geez, not bad at all. I have a pretty unique question. I'm not quite sure where this came from, but I want to get your take on. Is woke culture killing the American dream or helping it evolve?

52:17 - Mark (Guest) I don't think the American dream needs to be evolved. I think it needs to be preserved. I think the American dream one of the things I tell people is the American dream is only one generation from dying, because it's not something you're born with, it's something that you're taught. And if you're not taught its ideals and its values, the only reason I've been able to create a company with 70 employees and $11 billion under management is because my dad built in from the time I was 10. He gave me Think and Grow Rich and he said did you live in the greatest country that's ever existed? And with the right amount of focus of helping other people, you can be extremely successful and you can live an extraordinary life. And that mindset is what has allowed me to become an entrepreneur and create value for myself and my family and other people. But that's a very particular mindset. The opposite of that mindset is victimhood I can't do it. Somebody else has to do it for me, I can't do it for myself. Entitlement I'm entitled to something that I didn't create, because it's not fair that other people have more than I do.

53:27 The ideal that communism and socialism are the cures of all society's ills and that we can live in this beautiful utopia if we just give the government more power. I think those are all very dangerous ideals to teach to young people, because it disempowers them and creates them into being Look, you're only a victim if you say you're a victim If you're an adult. Now look, if you're a kid you've got parents in other situations. But as an adult, you can change. You can get out of bad relationships, you can get out of bad jobs, you can get educated. There are a lot of things you can do as an adult.

54:12 But if you are totally entitled and totally a victim and totally waiting for government to do it for you, then they have now created a new type of bond that you can't escape from and the mental that. When I was in the hills of West Virginia looking at my relatives, I noticed it wasn't physical bonds that kept them stuck, it was intellectual bonds that kept them stuck and that was taught to them by their parents and the people that raised them and the politicians that were in West Virginia at the time probably are still there now. So I don't think wokeism helps the American dream. I think it destroys the American dream. It even attacks the family unit and I think the American dream would be better off served if people focused on not what people owe me, but how I can create value for other people, and I'm not sure that wokeism achieves that.

55:13 - Chase (Host) I appreciate that answer. Thank you, you're welcome. I got one more question before my final here, Sure, you've mentioned entrepreneurship a few times and I get it. That rings true for me, because I am one, my dad was one, my uncle was one and I kind of grew up around it, so it's in a big part of my life. My norm Doesn't mean it came easy, that's for damn sure.

55:35 - Mark (Guest) For sure.

55:35 - Chase (Host) Is entrepreneurship the only real way we can develop more financial freedom in pursuit of our American dream? I don't think it's the only. I think it's probably the best way. I don't think it's the only real way we can develop more financial freedom in pursuit of our American dream.

55:43 - Mark (Guest) I don't think it's the only way. I think it's probably the best way. I don't think it's the only way. I have a lot of people that work for me. They have a very, even though they don't own the company, they have a very entrepreneurial mindset. Their mindset is you know, no one owes me anything that I don't create. I need to totally, and I tell all the people in our company we need to reinvest, reinvent our business model every three years. Capitalism and innovation waits for no one. We have to be better than the competition. We have to evolve. We have to have teamwork. That is elite. We have to develop, as human beings, our skills to communicate and be powerful, and so that we have a lot of people on our team that are.

56:27 You know, I preach entrepreneurs. One of our key values is entrepreneurism. So, whether you own the stock outright or you work for a big, huge company and you only own some of the stock, everybody can be, everybody can. It's funny that Marx's dream was that the workers could own the means of production. Well, capitalism actually achieved that and the way that they achieved that is I can go out and I can buy a Wilshire 5000 mutual fund or index fund and I can own 5,000 of the biggest, baddest companies in the United States and I'm an owner and I'm a stakeholder and I own it. And that's the kind of mindset whether or not you're working there in the company or you own the company because you invested in it. And so, yes, it's great if you're the entrepreneur and you own the company, but you can still have an entrepreneurial mindset and do really really well.

57:20 - Chase (Host) Man. This man is full of amazing answers, no doubt full of even more wisdom and knowledge in the book you guys got to check it out Experiencing the American Dream. I'm going to have it linked for everybody in the show notes and video description box. But before I let you out of here, I got to get your interpretation of my vision and my mantra and the whole theme here at Ever Forward Radio is to take everything you just said to extract a thing or a lot of things to help us take a step forward, to keep moving ever forward.

57:57 - Mark (Guest) What do those two words mean to you? I think for me and my work and how it connects into your work, is that to understand that money can't make you happy but purpose can. And if you have a strong, clear purpose people like the Wright Brothers or people like Dr Martin Luther King, people like Ronald Reagan, people like JFK, people that have changed the world in amazingly positive ways if you have a purpose, then when you have money, you can use it in really powerful, amazing ways. But if you don't have a purpose and you have a lot of money, you're probably in for a rough ride. So money can't make you happy, but purpose can, and I think that fits in with your theme.

58:39 - Chase (Host) Bring us home real quick, then with what is your purpose?

58:43 - Mark (Guest) My purpose is to save the American dream. I could have guessed that, but I wanted to hear straight from the horse's mouth.

58:50 - Chase (Host) Well, again, the American dream. Experiencing the American dream how to invest your time, energy and money to create an extraordinary life. Mark Madsen, it's been a pleasure.

58:58 - Mark (Guest) Thanks, Chase.

58:59 - Chase (Host) Congratulations on all the success. Can't wait to have you back. I got even more questions.

59:04 - Mark (Guest) Thank you so much for your time. I'll be back bro.

59:08 - Chase (Host) For more information on everything you just heard, make sure to check this episode show notes or head to everforwardradio.com