In today’s conversation, I get to sit down with James Clear. James’s career arc has had a few twists and turns along the way as he got his start as a  travel photographer and has worked in over 30 countries. Today he focuses much of his time on writing and speaking having launched one of the most followed blogs on the internet at – he also shares much of this wisdom out on Twitter and as of this recording has 110,000+ followers. In this conversation, we cover a number of topics, including diving into his just released book, Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones, which covers mindset and the concepts behind the mental models that help to predict human behavior.

James’s work is very relevant for financial advisors – especially when it comes to talking about complex concepts, the many different emotions that influence decision making, and how to build trust with prospective clients in a world where we all struggle with information overload. I especially love James’s philosophy of, “believing that you do not rise to the level of your goals. You fall to the level of your systems.” When I survey the landscape of the top performing advisors we work with who’ve made the leap from salesperson to CEO, I don’t know if there’s a statement that could ring more true than that one, as they all rely on systems… So, if you’re looking to grow your business or simply transform your daily routine for the better – today’s episode is a must-listen.


Here are a just a handful of the things that you’ll learn:


  • [09:05] First, James opens with a story directly from his new book Atomic Habits about how 1% changes can compound into incredible results and details a real life story about how the British Olympic cycling team transformed itself after decades of failure.
  • [13:43] From there, James introduces the concepts of mental models and focuses on a few of his favorites including “Inversion” and “Margin of Safety” that you as advisors out there can immediately start using in your next client or prospect meeting.
  • [21:26] Next, we get into (as I often joke with my clients) why so many financial advisors are prone to talking like a spreadsheet. James and I cover the many variables and sources of noise in finance and the mental models that can help you simplify complex concepts and clarify ideas for the average retiree.
  • [40:12] Then you’ll discover exactly how James models human behavior to identify investment opportunities and products that he thinks will succeed. We discuss how to philosophically think about the next unicorn that’s yet to be discovered.
  • [43:09] Then we geek out a bit on the future of financial technology including how advisors can now generate leads all over the country, and the friction points James has encountered himself in financial services that technology can help eliminate in order to land new clients.
  • [51:46] Lastly, we dive into how the process of choosing a financial advisor has changed and what it is that your prospects are REALLY looking for.

Ok, before we dive into the conversation… I worked with James to setup not 1, but 2 BIG gives for all of you Blueprint listeners!

First off, you can download Jame’s “Transform Your Habits” guide for free right at the top of the show notes at This free download is designed to help you form the habits to make progress in health, business, and life. Who couldn’t use that, right??

And as an added bonus, hot off the presses… literally as I record this today, James’s new book Atomic Habits just went on sale and I have a box of autographed copies to mail out until they’re all gone. His book is so new, I literally haven’t even been able to read it yet, but based on our conversation, I can promise it will be one of my top reads of 2018. And by the way, I just checked and Atomic Habits is already a top 10 seller for all books on Amazon and #1 in multiple categories as well!!



  • [08:08] What makes Alaska such a special place to visit.
  • [17:59] How to use stoicism to help you envision the worst case scenario – and be better prepared for it.
  • [18:59] Why feeling more prepared and more certain gets you into the headspace to perform better.
  • [20:32] James breaks down one-time choices you can experiment with to improve your sleep to make meaningful differences.
  • [26:29] How James would coach a financial advisor dealing with clients who whipsaw back and forth based on market performance.
  • [28:46] The importance of stretching out time scales in financial planning – and adjusting your goals accordingly.
  • [33:59] The dangers of recklessness and emotional investing.
  • [35:27] Lessons to take from Charlie Munger’s strategies and mental models.
  • [49:29] The importance of social norms as drivers and predictors of human behavior.
  • [54:29] How to use technology to turn weaknesses into strengths – and how to position yourself to cut through information overload.
  • [57:29] Why being able to solve complex problems is so crucial to long-term success.
  • [58:79] What James wants to be seen as absurd in the future.
  • [62:51] The single thing James thinks is most responsible for his career success.
  • [1:07:29] Why consistency is so crucial to establishing yourself.




Take the 1st Step to Building Your Ideal Practice: Apply for “Virtual Discovery Session

For those of you that have interest in diving deeper or figuring out how you may be able to have our team help you implement many of the ideas shared on the show, my day job happens to be consulting financial advisors from all over the US on how to grow their business and design a practice that serves them, versus them serving it. Yes it’s possible to grow your business and work less, this is a model we’ve replicated over and over in markets all over the country… So, if you’d like to apply to see if it makes sense for us to have a 1-on-1 conversation on how to overcome what may be getting in your way, you can do that at It takes about 5 minutes to fill out the application so we can understand what your business looks like, what challenges you may be facing and how myself and my team may be able to help. We then dive into a Discovery session where we ask a lot of questions based on your survey. We do a lot of listening, and take a lot of notes to build a rough draft of our proprietary Elite Advisor Blueprint – 90 Day Plan™. Taking the first step is as simple as applying at 🙂


Already heard it once or twice? Please leave a short review here, and tell me which guests I should have on!




[read more=”Click here to Read the Transcript” less=”Read Less”]



Welcome to this episode of the Elite Advisor Blueprint Podcast with your host, Brad Johnson. Brad’s the VP of Advisor Development and Advisors Excel, the largest independent insurance brokerage company in the US. He’s also a regular contributor to Investment News, the Wall Street Journal, and other industry publications.


[00:00:26] Brad: Welcome to the Elite Advisor Blueprint, the podcast for world-class financial advisors. I’m Brad Johnson, VP of Advisor Development and Advisors Excel and it’s my goal to distill the best ideas and advice from top thought leaders and apply it to the world of independent financial advising.


In today’s conversation, I get to sit down with James Clear. James’s career arc has had a few twists and turns along the way as he actually got a start as a travel photographer and has worked in over 30 different countries. Today, he focuses much of his time on writing and speaking, having launched one of the most followed blogs on the internet at He also happens to share much of his wisdom out on Twitter and as of this recording has over 110,000 followers. In this conversation, we cover a number of topics including diving into his just-released book, Atomic Habits, in which he covers mindset and the concepts behind the mental models that helped predict human behavior.


In my opinion, James’s work is some of the most relevant for financial advisors especially when it comes to talking about complex concepts, the many different emotions that influence decision making, and how to build trust with the prospective clients in a world where we struggle with information overload. I especially love his philosophy of believing that you do not rise to the level of your goals, rather, you fall to the level of your systems. And when I survey the landscape of some of the top performing advisors we work with who’ve made the leap from sales person to CEO, I don’t know if there’s a statement that rings more true than his statement about systems. So, if you’re looking to grow your business or simply transform your daily routine for the better, today’s episode is a must-listen. Here’s just a bit of what we get into. First, James opens with a story directly from his new book, Atomic Habits, about how 1% changes can compound into incredible results and details a real-life story about how the British Olympic cycling team transformed itself after decades of failure.


[00:02:20] Brad: From there, James introduces the concepts of mental models and focuses on a few of his favorite including Inversion and Margin of Safety that you as advisors out there can immediately start using in your next client or prospect meeting. Next, we get into as I often joke with my clients why so many financial advisors are prone to talking like a spreadsheet. James and I cover the many variables and sources of noise in finance and the mental models that can help you simplify complex concepts and clarify ideas for the average retiree. Then we get into exactly how James models human behavior to identify investment opportunities and products that he thinks will succeed. We discuss how to philosophically think about the next unicorn that’s yet to be discovered. Then we geek out a bit on the future of financial technology including how advisors can now generate leads all over the country and the friction points that James himself encountered in financial services that technology can help eliminate in order to land new clients. Lastly, we dive into how the process of choosing a financial advisor has changed and what it is that your prospects are really looking for.


Okay. Before we dive into the conversation, I worked with James to set up not one but two big gifts for all you, Blueprint listeners. First off, you can download James’s Transform Your Habits Guide for free right at the top of the show notes at That’s 52. This free download is designed to help you form the habits to make progress in health, business, and life. And as an added bonus, hot off the presses literally as I record this today, James’s new book, Atomic Habits, just went on sale and I have a box of autograph copy sitting here in my office to mail out until they’re gone. His book is so new I literally haven’t even been able to read it yet but based on this conversation, I can promise it will be one of my top reads of 2018. And by the way, I just checked out and Atomic Habits is already a top 10 seller for all books, literally every book on Amazon, and number one in multiple categories as well.


[00:04:26] Brad: So, here’s what to do next if you’d like your free autograph copy by James himself, not me, of Atomic Habits. Visit the show notes at where you’ll see an offer to grab a free copy of James’s book right at the top. From there, you’ll get all the instructions of what to do next but it’s a simple as leaving an honest review out on iTunes for our show. You can visit the link for a simple redirect there to make it easy or on most mobile podcast players you can scroll down on the show until you get to the review section. Once you’ve left a review, just drop us an email via with your iTunes username and the best mailing address to ship you the book and we’ll drop you a copy in the mail as a thank you. That simple. As always, all the additional show notes, books mentioned, people discussed, as well as a full transcript of the show can be found out on the show notes as well. So, that’s it. As always, thanks for listening and without further delay, my conversation with James Clear.




[00:05:29] Brad: Welcome to the Elite Advisor Blueprint Podcast. I have a special guest, James Clear, with us today. Welcome to the show, James.


[00:05:36] James: Hey, thanks for having me.


[00:05:37] Brad: So, this is a brand-new, a first, for those of you that obviously watch on YouTube or listen in, James is actually at Advisors Excel headquarters getting ready to go on stage and speak with our 500 employees here and he’s to drop some knowledge on.


[00:05:51] James: I hope so. We’ll see.


[00:05:53] Brad: So, basically, where I want to dive in on this, you’ve had quite the interesting if I look at your like arc so far that brought you here, it’s not the standard like, hey, I’m an author/speaker. You took a few different turns along the way. So, being the fact that you are a travel photographer, I just want to lead with this because I popped you up on Twitter and, obviously, you’re pretty active on there and there being a guy that’s taking photographs in 30 different countries I believe.


[00:06:20] James: Yeah.


[00:06:20] Brad: There’s this picture I’m going to assume it’s you standing in front of like a massive glacier.


[00:06:25] James: Oh, yeah.


[00:06:26] Brad: So, I’ve got to ask why that picture. You’ve taken a lot of pictures over your career. Why that picture on your Twitter profile?


[00:06:33] James: Yeah. I don’t know. I just really liked this. It’s from a recent trip to Alaska and from a glacier last summer and what I love about that particular shot is it’s called compression but you only get it when you have a really long lens against this massive like 10 pounds 400mm lens. I looked ridiculous. I looked like I was a national geographic photographer or something. If you want to get looks or comments from people, just walk around with a camera that has like a 4-foot lens on it. But anyway, so my wife actually took that shot.


[00:07:02] Brad: Really?


[00:07:02] James: Yeah. And so, I climbed up this side of the glacier and then was next with there, and the compression that you get from it helps show the actual scale of the glacier. It’s really hard to see if you take a picture like on an iPhone or something to get the idea of like just how much iceberg is there. But anyway, I thought that was cool and decided to put it up. And I kind of rotate through like whatever recent trips I sort of have like I just got back from France and so now I’m obsessed with those pictures of these lavender fields because it’s just top of mind from being like very recent.


[00:07:31] Brad: Yeah. Very cool. Well, I know you’re obviously a big mindset person. It’s a lot about what you write about and speak about so I didn’t know if there was also a philosophical meaning behind like this massive wall of ice standing in front of you.


[00:07:43] James: There wasn’t in that one but that’s a valid question because it sounds exactly what I’d be able to do is come up with a deeper reason for like shoot some pictures of that thing.


[00:07:53] Brad: I will say not to go too far off topic here but we went to Alaska two years ago, and that’s one of the most incredible experiences I’ve had in my life is standing on top of a glacier. It really feels like you’re on a whole different planet. I don’t know if you felt the same way.


[00:08:11] James: Well, Alaska is crazy. I mean, obviously, not everybody has the opportunity to go but if you can, I think you should go. It feels very different than all the other states if you’re from the US. And it also is just pure wilderness. I mean, you’ll make the drive up to like we drove from Anchorage to Denali. First of all, Denali is the size of Massachusetts so the State Park is the size of the state and secondly, you’re on this road and it’s 600 miles of wilderness on either side. There’s nothing there except wild which is a very cool experience and I was like 40 feet from a bear. It’s the eagles everywhere. It’s very interesting, very – yeah. So, that was great.


[00:08:50] Brad: Well, cool. We’ll dive into I think we can talk about travel all day. My family is sure back from Italy. It’s quite the interest.


[00:08:57] James: Yeah. Right. This is going to turn into a very different…


[00:09:00] Brad: The travel podcast for financial advisors. So, let’s dive in because one of the things, obviously, you got a book dropping in October, Atomic Habits, where you’re going to touch on pieces of that and then being a show for financial advisors, your whole concept of mental models and, I mean, they’re like drooling. As soon as they hear that, because I mean that’s basically what financial advisors do all day. It’s how do I simplify the complex financial world out there for our clients. So, let’s lead off because I know you got a really cool story around the British cycling team and I think it can kind of take us into the mental models and kind of how you see the world through those.


[00:09:36] James: Definitely. So, this is a story that I lead with in the book and it’s about a team called Team Sky which is the professional cycling team in Great Britain, and we’re a cycling team, the national team at the Olympics. And so, the point or the setup to the story is that for many, many years British cycling had been very mediocre. On the world stage, they had won like a single gold medal back in 1908. They had never won a Tour de France and it actually got so bad that at a certain point in the early 2000s, elite bike manufacturers would not sell their bikes to the British team because they didn’t want to hurt sales if other professional team saw them riding their gear. And anyway, so around this time, they had this guy named Dave Brailsford and Brailsford comes in and he has this concept that he calls the aggregation of marginal gains, and the way that he describes it is the 1% improvement in nearly everything that you do. So, his thought was that if we can take all these little improvements for the way in cycling and combine them, we can get a really powerful result in the long run.


And so, they started with a bunch of things that you would expect the cycling team to do. They got slightly lighter tires and put those in the bike. They had their riders wear different wingsuits inside the tunnels so they end up switching their outdoor riders to indoor racing suits because they were lighter and more aerodynamic. They put more ergonomic seats on the bike, they have their riders wear these biofeedback sensors so they can see how each person is responding to training and then adjust their practice schedule and routine perfectly. But most of that stuff that are things that other professional cycling teams were doing as well but then they did all these other things that nobody else is doing. So, they hired a surgeon and brought him in to teach the team how to wash their hands to reduce the risk of catching a cold. They painted the inside of the team truck white so they can spot little bits of dust that like get in the gears or best of the performance to these like finally tuned bikes. They had their riders wear electrically-heated over shorts so they would keep their muscles warm while they were riding or training.


[00:11:37] James: And they even got to a point where they figured out the type of pillow that led to the best night sleep for each rider and brought that on the road with them to hotels when they were at big events or racing events. And so, Brailsford said, “All right. If we can actually do this, we can execute on all these little 1% changes, then I think we can win Tour de France within five years.” He ended up being wrong and won the Tour de France in three years and then they repeated again the next year with a different rider who went on to win two to three zone and then just a couple weeks ago they won again. They won like five out of the last six or six out of the last seven Tour de Frances with three different riders. And at the Olympics in London in 2012, they won 60% of the gold medals available. And so, this idea that 1% changes are not just like a nice to have or just a little addition on top of our performance but actually can be the key to unlocking really remarkable results.


I think that’s something that we often overlook because we don’t understand how our habits and some daily twists compound over time. It’s very hard to conceptualize that and very easy to overlook. Just giving up one choice and it’s like, “Oh, not saving $100 this month doesn’t really feel like much and I get this nice new pair of shoes,” but not doing it every month and not realizing how that compounds over 10 or 20 or 30 years it’s kind of like a failure in the human brain or faulty wiring mechanism, not being able to see or conceptualize this compound growth. I think that’s true not just of financial matters in compound interest but that all habits compound and that’s the reason that small habits can be such a remarkable source of growth is that they can compound into really incredible results in the long run.


[00:13:18] Brad: So, as I unpack that concept, obviously, it makes beautiful sense, and it’s one thing to philosophically talk about it. It’s another thing to actually put something like that into action because when you just those examples you gave, that’s a lot of – that’s high attention to detail.


[00:13:32] James: For sure. Yeah.


[00:13:32] Brad: So, if you were going, let’s apply that to financial services and let’s say, “Hey,” or like the one that I always use as kind of the preflight checklist like one of our advisors uses this concept of anything that has a very bad outcome if it doesn’t work well, such as airplane takes off, doesn’t land, bad outcome. But really you apply that to retirement, same thing. I mean, you can’t review retirement. And so, he calls it simulations. We want to simulate this. So, if you were going to take a version of that and say, “I’m a financial advisor. I want to put that into practice in my business to better serve my clients or better outcomes for my clients,” what would be like the first step or two that you might coach them to take to start to go down that path?


[00:14:19] James: Well, this ties in directly with the concept of mental models which you brought up earlier. One of my favorite mental models concept is Inversion and you can even practice this in almost any area of life and then something very useful, especially with habits. So, the point with many habits whether this is saving money for retirement or getting in better shape or going to the gym or meditating, most of the time we’re not talking about things that are like intellectually advanced to the point that most can’t understand them. There are things that are fundamentals and so the biggest issue is not that you are doing some like advanced level tactic that nobody else knows about. The biggest issue is are you avoiding the mistakes that most people make. So, it’s less about achieving something remarkable or incredible from an output or performance standpoint, and more about avoiding the common pitfalls that most who fall into. So, inversion helps you identify what those areas are.


So, some of the questions that you might ask, the Stoics, ancient stoics of Marcus Aurelius and Epictetus, they used to practice inversion with relation to philosophical matters in life. They would say, “What if I were homeless or imagine if I lost the ability to walk or imagine if my spouse passed away, how would I respond to those things?” So, you invert the situation. Most people are thinking about, “How can I find my ideal spouse? I’m going to buy a bigger house. How can I achieve some remarkable result?” And rather than focusing on those things, they invert the issue and think about, “What do I want to avoid?” and then once they realize this could be my reality, how can I prepare for that? And so, the same question can be true for financial providers and say, “Well, what would I do? What are the things that I would do if I wanted to have no money available for retirement?” And then you start listing out what those things are, like what you would be spending it on, why you wouldn’t be saving, where would we go each day? And then you can start to prepare to avoid those things. Maybe you buy a house that would be far beyond your means. It’s like, “Well, okay, I need to make sure that I don’t take a mortgage that’s too big.” That’s just one simple example way to apply that.


[00:16:19] James: And, again, you can do the same thing for, “What would I want to do? What would I do if I wanted to be 65 and overweight and have two bad knees?” And then you realize what those daily health habits are and would compound that lead to that result and then you can start to prepare and change your daily life to avoid this.


[00:16:34] Brad: Dude, it’s finally happened. Stoicism has been brought onto – I love it. Stoicism and financial advising.


[00:16:42] James: Yes. We’ve known for a long time that they were going to meet and now it’s finally happened.


[00:16:46] Brad: Well, I’m a big fan of Ryan Holiday’s The Daily Stoic and that’s kind of I call it the gateway drug to stoicism, nice little bite-size chunks and it’s interesting because as you’re saying that I’m thinking there’s a section and I don’t remember if it’s Aurelius or  Epictetus or who it was but it was basically how to deal with loss and their story in there about his favorite it’s either a teacup or a vase or something like that. And what he did was he just imagined it’s already broken. So, this is my favorite possession, it’s already fallen off the table, it’s cracked beyond repair, and it was the idea of just go ahead and thinking in advance how you deal with that. And now when it does eventually happen someday or the loss of a spouse and then obviously it forces you to be more present and appreciative of that item whether it’s a person or a physical item. But as you were saying and I’m like, “That’s really interesting,” because we’re on a 12-year bull run currently, literally months away from the longest bull run in the history of US.


And there’s such a psychological thing with the market where, “Oh, will the market crash? It’s always going to crash. When the markets going up, it’s always going to go up.” And what if you apply that stoicism to markets already crashed? How do I deal with that? How are my finances set up today now that the markets already crashed, it’s happened? And so, I never really tied those two together but just you saying that makes me think about that which actually goes back to simulating and worst-case scenarios. And if you’re in an airplane and the right engine goes wrong, well, they don’t just throw a pilot up there in the air and say, “Oh, figure it out.” They literally had hours of testing for that. So, okay, unless you have anything else to add there, I want to follow up on the concept of the British cycling team. How much of that in your opinion is, granted, it’s like, “Hey, there’s not a speck of dust on my chain here. We’ve got these heated pants that maybe get 1% more out of the leg muscles or whatever from fatigue.”


[00:18:49] Brad: How much of that in your opinion when it comes to coaching is actual true scientific results of performance and how much of it is psychologically back at it’s riding a bike feeling confident because these 74 things on my checklist are all checked off, I’m ready to roll, let’s go get it?


[00:19:08] James: Well, feeling prepared and feeling more certain is definitely going to play some kind of psychological factor, probably a positive one. I played baseball through college and I had a great strength and conditioning coach and he would always say which I thought was pretty lame, he’s like, “Look, if you think it helps, it helps.” And his point was some guys want to do a different warm-up routine or something before we would go to the gym. He is like, “Fine. Like if you think that this is the warm-up you need to be mentally ready to do the workout, then that’s fine. Go ahead and do it.” And there’s of course some of it is bad like you can’t be thinking that self-help that actually harms you, but assuming that we’re talking about generally either neutral or maybe slightly positive things then, yeah, go ahead and do the thing that gets you in the right mental frame to do the real work. Now, one thing I do think is important so you mentioned like let’s say that those electrical heated over shorts got them 1% additional muscle improvement or whatever during their typical training session. By itself, that’s not a big impact, but if that gets you an extra 1% every day at training then that can be something fairly significant over the long run.


And I really love what I call system management books. Well, I kind of have a list these one-time actions that deliver repeated results again and again. Everybody loves talking about productivity strategies but probably the single biggest thing you can do to be more productive is make sure you get good sleep every day. So, there are a variety of one-time actions you can take to get better sleep. You can test out mattresses and buy one that you sleep better on. It’s just a one-time choice. You can buy blackout curtains so that you can make sure your room is slightly dark when you go to sleep. If you live in a fairly noisy environment, you can buy earplugs, those things, or an eye mask that you can sleep better when you’re on the road. All of these are one-time choices that they end up paying dividends for you every single night and so maybe they only make your sleep 3% better on average, but you get that 3% every night and that can end up being a meaningful difference in the course of the year or especially a full career.


[00:21:07] James: So, some of those things I do think or by getting yourself in the right frame of mind, but also small impacts, small improvements, especially those that are repeated again and again can be pretty meaningful.


[00:21:20] Brad: Absolutely. Okay. So, when you say mental models, dealing with financial advisors, I mean, sometimes we like to talk like spreadsheets in our industry. I’m not sure if you run into that before but mental models are a big thing and I think part of it you’re talking with the performance of the cycling team and training and, obviously, that’s a physical output. I think in finance you’re dealing with a lot of variables, you’re dealing with a lot of noise, a lot of talking heads that are all saying different things or the exact opposite things. And so, no different than all of the 72 checklists you just went off in the cycling team. I think most retirees that our advisors are working with, they got a lot of noise. So, how do I now, I guess, my question would be, of all of the mental models you’ve studied, if the goal is I simplify something very complex for I call it the average Joe that might not be an expert in finance or saving for retirement income or asset management, what are some good mental models that you’ve seen like really break through and simplify some overly complex things?


[00:22:23] James: Yeah. That’s a good question. So, I already mentioned the Inversion one which I like a lot. Margin of safety I think is one that applies so broadly to life and so appropriately to financial issues. So, the idea behind Margin of Safety just very simple engineering example, let’s say you build a bridge and it’s tested to hold 80,000 pounds. This is an example Warren Buffet gives sometimes. You don’t drive a truck across it that’s holding 79,900 pounds. Instead, if you have a truck that’s holding 79,000 pounds, you design a bridge to hold 120 or 160 or you give yourself a good margin of safety so that you’re not living on the edge any time something heavy goes across the bridge. And the same thing is true in many, many areas of life, and I noticed that the more margin of safety I give myself whether it’s financially or otherwise, typically, the better the results are.


So, Daniel Kahneman, he wrote Thinking, Fast and Slow, Nobel Prize winner psychologist, and people talked to him about events that are unlikely rare, difficult to predict, and he said, “The lesson from these things when you see a 29-year-old get cancer or when you hear about freak accident and someone dies or a crazy airplane crash or something, the lesson should not be, “Oh, this thing might happen to me,” the lesson should be, “Life is very hard to predict. Life is surprising,” and if life is surprising, we should have a margin of safety to protect ourselves from the things that we cannot predict. So, perhaps that means having more of your assets in cash because it’s liquid and available and you can easily use it for whatever you need, then maybe you would typically think because you want a margin of safety there, you’re willing to give up a little bit of the growth and not be say 100% in stocks for example so that you have a margin of safety should you need it. This is one example of applying that.


[00:24:18] James: The same thing is if your gas tank is down to half of the tank, you always fill it up so you have a margin of safety for whatever the trip is that you got to do rather than letting it run almost the way down to zero and fill it up when you’re close to empty. Same thing when charging your phone like anytime your phone gets 50%, go and plug and charge it rather than letting yourself get low and suddenly can’t make a phone call when you need to. Getting to the airport with enough time. Like, there’s anything involving time, energy, finances, resources of any sort, I find it better if there’d be some margin of safety. You’re going to buy a home for example and you decide that you can afford up to $2,000 a month for your mortgage. Well, maybe you should get a home that’s $1,500 a month so you have a margin of safety rather than going straight up to what you have calculated that you can afford. And if you do this in many different areas and you always kind of have a margin of safety what you end up with is a very robust buffer for handling the craziness and the urgencies of life. So, that’s one mental model that I really like.


[00:25:19] Brad: Can we hit the pause button there?


[00:25:20] James: Yeah. Sure.


[00:25:20] Brad: There’s are a few things I want to ask you on that because that applies perfectly to financial services. Here’s the challenge I see oftentimes. What you just shared there reminds me a bit of a guy named Daniel Crosby, a behavioral psychologist, really bright guy, financial advisor, asset manager. He actually hired a financial advisor for himself because he wanted to create a margin of safety based on his own psychology. And so, I want to ask you about that because oftentimes what I see we’ve seen really, I’ve been doing these 11 years and I’ve seen the great recession, and I’ve basically seen the greatest bull run back-to-back. So, I’ve got really good case studies on both sides to that and with our company working with financial advisors, we see all the psychology they deal with on a daily basis of the general retiree and how they get pulled on the fear versus greed, that kind of spectrum there. And so, going back to the margin of safety, if you were going to advise a financial advisor because conceptually it’s brilliant, the hard part is when you add in human psychology.


So, if they were going to coach somebody back in 2008, 2009 said, “I’m going 100% to cash. I’m never getting in the stock market again. I never want to deal with this.” They get all the psychology of losing half their portfolio less than a year. But now fast forward to now and you’ve got those same individuals that were 100% safe, they’re like, “The S&P did 17% last year or 20% or whatever, our account needed 10. We need to bump up back over to higher asset allocation.” We saw a lot of that happen last year where advisors almost felt helpless because they’re like, “I’m trying to build you a true financial plan to run the marathon of retirement and you’re sitting here doing this whipsaw back and forth.” So, one question, but if you’re going to advise financial advisors of, “Hey, how can I start to break this down, simplify it?” and the hard part is how do you convince somebody without offending them? Okay. Let’s see a bigger picture. Let’s zoom out here a little bit. Do you have mental models around that? Or here’s a way you can maybe apply something on top of the margin of safety to help them better understand maybe they’re getting themselves in trouble.


[00:27:24] James: So, I think people need a new way of looking at a problem like if they’re just looking at it as how much money have I lost in the last year or how much money I’ve gained in the last year, then that’s a very specific timescale on which they’re judging their strategy but one of the things that make finances very difficult, Morgan Housel, I’m not sure if you follow him. Morgan wrote a really great article about this idea that many of the actors in any financial market operate on very different timescales. So, if you’re a day trader, you’re operating – you don’t really care what the market has or hasn’t done in the last year or two years, whenever. What you care about is this costs 70.32 right now and I can sell it for 70.47 in five hours like it’s on a much more timescale. The average retiree, the timescale is years, decades. It’s a very different scale. And so, the decisions that people are making it’s very possible for a day trader to pump some stock up or drive it down based on all of their activity on a day-to-day basis.


And then all of a sudden, the person who has a 10-year timescale is making decisions based on this other person’s timescale and that can really mess up. It messes the psychology up and then you get into the sphere of green cycling. So, I think the first thing is I don’t know if we can call this a mental model but stretching out the timescales and showing people what it looks like if you make decisions based on a one-day timescale. a one-month timescale, one year, 10 years, 50 years, and why your strategy should be different for each timescale. It’s not that the day trader strategy is bad, given their goals, but you need to showcase that the goals are very different for people and they may because all of these people with widely varying goals are operating in the same pool. You may occasionally get waves on your side of the pool from what other people are doing in that corner even though they have totally different goals. So, I think that’s one way to frame that concept.


[00:29:23] James: The other thing is I think many people do not understand the core idea that losses hurt you more than gains help you. If you have a dollar and it increases to $1.50 and goes up 50%, you only need a 33% loss to get back down to a dollar that most people don’t get that. They’re like, “Oh, a 50% gain or a 33% loss,” they won’t see those as equivalent. And so, the most important thing is to protect whatever earnings you’ve accumulated. So, to protect that 10% that you’re getting rather than reaching for that 17% because as soon as you do that then you start to suffer more volatility. Of course, the ultimate gain is to try to get some reasonable return without the downside, without the risk and volatility if you can somehow avoid that through [inaudible] and so on. But I think those two concepts stretching out timescales and talk about the different goals for each one and clarifying that losses will hurt you more than gains help you.


And that the primary goal of anyone who wants to have money in retirement is to protect the money that they have so that it doesn’t escape them for retirement. I can make people understand those concepts but I feel like they’re two central things to grasp if you’re going to approach that problem appropriately.


[00:30:39] Brad: I love the timescale and I also love the way it’s in a pool because it’s so true. These day traders over here and, okay, Tesla stock, well more Elon Musk tweets yesterday.


[00:30:49] James: Right. Yeah.


[00:30:50] Brad: Whatever it is, but there are waves in the pool being created over there. That’s a different time horizon and me as the retiree that has a marathon run for 20, 30, maybe more years, now with longevity increasing every four years. So, that’s interesting. One of our advisors uses this analogy of climbing Mount Everest and he said many retirees, I mean, you look at they work 20, 30 years maybe slaved away at some factory job, slaving away the paycheck every two weeks, dropping in the 401(k) whatever it was, and they see retirement as, “I reached the peak of Mount Everest like I’ve made it. My nest egg’s $1 million, $5 million,” and in reality, that’s only the first half of the journey.


And he makes this now, I don’t know how statistically accurate this is, but at one point there was a statistic that more people actually died trying to scale Mount Everest on the way back down versus the way up because they’ve done all this planning to get to the top and reached their goal but they haven’t adequately planned how to get back down. Great analogy with retirement because I’ve got the $5 million nest egg now but, guess what, now we got to go to work because it’s not about accumulation anymore. It’s distribution. And the thing that’s interesting is you look at retirement as a marathon, but it’s also kind of a sprint at the same time because you’re taking distributions along the way. No longer do you have that paycheck so, yes, it has to last you this 20, 30-year timeframe but imagine you’re chiseling away at it at the same time and so that’s this really tough thing of creating a financial plan that serves both needs income today, the longevity of income, oh by the way, here’s all these unknowns to this margin of safety we need to create along the way too. So, I don’t know if we’re inspiring financial advisors out there. Just saying you got a really tough job right now.


[00:32:36] James: For the Everest example just read Into Thin Air by Jon Krakauer. Incredible read and many people that died on that trip are on the way down. I think there’s probably another interesting insight about human psychology there like often with a mountain climb like that, people build it up so much that they make a reckless push at the 11th hour to get to the top. They know that that storm is coming in and they know the conditions are changing but they still pushed to get up there so they make it to the top. Then they come down and they’re dealing with very different conditions than what they were going up and so they find themselves in a tricky situation because they weren’t able to check their ego when they needed to. Now, I don’t know what the lesson there is. I’m sure there is.


[00:33:17] Brad: Well, I think it’s interesting because it applies to a lot of, call it, pre-retirees during that last one to two-year push, and I think it is such an emotional thing. It’s not they haven’t mathematically calculated out like, “Hey, if I have $1 million, I really only have to generate a 4% interest of return. Just not lose my money and I’m good,” or some sort of income-producing vehicle that doesn’t have market risk, bonds, annuities, but many of them make these reckless decisions at the end like right now you’re in a really strong bull market. It’s either at $870,000 and their magical number is a million. For no other reason than it has an extra comma. And so, they make this reckless push in the last year or two and we saw that happen in 2008, 2009. Unfortunately, the timing is horrible and they’re a year away from retirement and then their million-dollar account went to $500,000, all based on emotions. Not based on mathematical calculations that they probably only needed 950,000.


[00:34:08] James: This is where that inversion concept is helpful for a simulation. Think my portfolio is 50% of what it is today like just imagining that and they’d be like, “All right. What does that mean?” I think I’m one year from retirement but let’s imagine that scenario and maybe that checks you enough that you don’t make a reckless decision at the wrong time. The Stoics call it a premeditation of evils so I kind of I don’t like that phrase. It kind of reminds of this like what if something evil that would happen in your portfolio? Can you premeditate on that now and then maybe change your strategy or improve your preparation?


[00:34:41] Brad: Yeah. What feels better, 950,000 safely at 4% or a 50% probability of a million or $500,000? Yeah. It’s interesting. All right. So, there’s a couple of mental models. Let’s go what we’ve got to work Charlie Munger into this deal somewhere, right? So, obviously, Warren Buffett’s right-hand man. I think I listened to an interview. You said he operates on over 20 different mental models that he runs important decisions through, I don’t know if it’s only Berkshire Hathaway or personal decisions, but he’s obviously one of the successful investors right alongside Warren Buffett historically. What are some lessons to take from his decision-making maybe as it applies to finances, running a business? What are some key takeaways there?


[00:35:28] James: Yeah. Well, I actually got to see along with 40,000 other people Buffett, Munger at the Berkshire Hathaway in a meeting this year which is interesting and I have read a variety of what Munger has put together. I think he probably has far more mental models than just 20 but he has said that he thinks there’s kind of a core few what’s called 20 or 30 or 50s, something like that, that carry a heavy freight in everyday life that if you just understood those four concepts then it would go a long way. And actually, relevant to this, I have an appendix to the book, a business appendix about how to apply the concepts in Atomic Habits to business and as part of that, I had a case study and the case study is like nine pages that Munger put together about Coca-Cola. And if you were alive in like the late 1800s, early 1900s, and you were a potential investor in Coca-Cola, how would you identify it then 100 years ago as a good opportunity and why? What mental models would you be using to know that this is either going to go well accordingly?


And in fact, what was so interesting about it is I break down and kind of add my commentary every other paragraph or so. And what’s so interesting is this model that I’ve tried to put together for Atomic Habits Is a model that describes human behavior and psychology. Why we behave the way we do, why we have habits the way we do, and how can we use this model to help us understand not only what we’re doing but also how we can improve it? And so much of Munger’s analysis is not about the financials of the business. It’s about human psychology associated with it. So, I think actually if you want to skip the book and just download that appendix, I think it’s at but one the things just as one example from it. So, Munger’s explanation of what Coke is is that every human needs to consume water each day to survive and so he goes all the way down to like this basic human nature. We need water. You know that everyone that is alive is going to be drinking water.


[00:37:26] James: You know that the population is going to be increasing radically over the next 100 years because it has been from the previous 100 years before that and if you simply map out where the population is going to go, you know that we’re going to have billions of people all of whom need water each day. Coca-Cola is a way to make water, drinking water more satisfying, more enjoyable by adding sugar and flavoring. And so, you can make this basic human need a more enjoyable task, then it’s very likely that you’re going to have some level of motivation or desire for that product, which I thought was such an interesting way of describing what it is that that company does and how many other companies that they’re successful, we could look at and say what is the basic human need behind this? What is the underlying human nature, the fundamental, and how can we make that either more satisfying or easier and more convenient? And if you can do those things, then there’s going to be some inherent natural implicit desire to have that product. So, anyway, that was one breakdown that I thought that was really brilliant by Munger of how to apply a mental model to a particular business decision.


But one of the other things I took away from seeing these people in a meeting is that he said, “An ounce of prevention is not worth a pound of cure. It’s worth a ton of cure.” And so, he is very big on avoiding mistakes to start with. How can we just not make, what we talked about earlier with inversion, identifying things that we, of course, doing fundamentals, how can we make sure that we’re not making a poor initial decision? It doesn’t have to be the best initial decision. It would be great if it is. Not going to make sure it’s not a bad one. And his focus on that, his emphasis on avoiding early mistakes, that was something that kind of stuck with me after a small talk.


[00:39:13] Brad: Yeah. It’s the whole trajectory thing. It’s like for the analogy like if the flight’s 1% off from New York to LA, it’s right clear in Canada or wherever and so it makes a lot of sense, obviously, as it applies to business. I want to go back to the Coca-Cola analogy though because that is such an interesting way if you look at something as investment. It’s what’s the potential future target market and what’s the motivation behind that? It’s like Coca-Cola just made better tasting water and now you get all the obesity stuff coming out, but if you’re looking at that as investor, this stuff is so addictive that literally it makes you overweight but people still drink it because it tastes so good and everybody has to have some sort of liquid to survive. So, if you can make every investment on that of like it’s – well, I mean, even if you look at the cigarette industry before really a lot of that came out as far as, yeah, it creates cancer but, sure, 30s and 40s everybody’s smoking. Well, that’s why Philip Morris was an incredible investment along that run.


So, just philosophically, if there were some things out there, are there some things right now and we’re not here obviously getting investment advice but are there some things you see on the horizon like, “Well, this kind of reminds like Coca-Cola 100 years ago,” or some things coming down the pipeline, whether it’s technology or things like that?


[00:40:28] James: Well, I don’t really bother with trying to figure out good individual investments that much. I just don’t spend that much of my time on it. I spend more thinking about the human nature and habits and so on. But I do think that if you see something that will make life more convenient, convenience is a huge thing. If it is convenience associated with an underlying human need then it almost always can work out and we can figure out a way to make it cost effective. So, for example, just the other day there’s this little video going around, I think I saw it on Twitter of this machine that you take your clothes out of the laundry, out of the dryer, and then you throw them into this machine and it will automatically fold the clothes for you. And of course, there are all kinds of comments about like, “How lazy are we? Humanity is going to hell like everything is just falling apart. We can’t fold our own clothes anymore. Whatever. This is so ridiculous. Can’t believe people spend money on this, whatever.” My first thought was if they can figure a way to make this machine cost-effective, this for sure is going to be in our homes. We already we used to hand wash our clothes and then let them dry and hang them up.


We already put them in machines to wash them and dry them. Why would you not just put in the washer, put them in a dryer, put in the folder? And anything that can save us time and make life more convenient is likely to be a good product as long as the price is somewhat reasonable. And if you look at the effectiveness of many companies right now, many of these, like rock star, unicorn, rising companies, they have looked at the process that people were previously facing and then they found little points of friction and try to eliminate that wherever they could. So, take for example a ride-sharing service, Uber or Lyft. Previously, what is the chain of behaviors that someone would have to go through to get a ride across town? They need to call the taxi company and then they have to wait on the curb. They got to get in the car, put their bags in, they ride across town, they get there to their destination. They have some kind of payment. They give money or swipe a credit card. They get off the car and so on.


[00:42:26] James: And so, they map out every little thing that someone faces during that behavior and then you try to find these little points of friction. What can you get rid of there? And so, they could say something like, “Well, usually paying for the car at the end,” pulling out your wallet or swiping your credit card. That takes a minute or two.” “So, what if we just have the credit card preload in the app and you can just get out of the car and you don’t have to do that?” Boom. It’s suddenly this behavior slightly more frictionless and more convenient than it was before. If you do that across five or six different areas of the app or the experience then, by comparison, we have this thing that seems like an obvious win that’s like, “Oh, suddenly this feels like a very convenient or frictionless experience compared to the previous one,” and so many products really in a lot of ways, the quest of business growth is really just trying to make previous needs more frictionless and more convenient than they were before.


[00:43:21] Brad: It’s amazing how obvious it is after-the-fact. It’s like, well, obviously, you should have Uber. Hailing a taxi sucked, but why didn’t nobody think about it before? So, I love that concept. Let’s apply it to financial service because what’s interesting is I see technology. It’s speeding this process up so quickly right now, and the analogy I make a lot is the whole, the idea of back in the day I had to go to a travel agent to book a flight and that’s annoying. We have to call them and I have to go down to the brick-and-mortar office on the corner. Well, now I go to Expedia and I book my whole trip in five minutes, right? Well, same thing in financial services. I think there’s this and I think it is because these are very high trust decisions. James, you’re a financial advisor. I want to hand you $2 million. That very different than booking a flight. So, as the trust factor goes up, I feel like technology lags a bit with that. That might not be 100% accurate. Go ahead, look at it, it’s kind of how it works.


But It’s picking up very quickly and there’s this concept where most advisors re like, “Hey, you need to come to my office, sit at the table, walk through my reception,” and what I’m starting to see, I’m starting to see some forward thinking advisors, some podcasters out there where, “Hey, I’ve got the ability to now grab a mic like this, have a good conversation and then, boom, digitally I just syndicated worldwide. And now what we’re saying is with good content and good advice, people are like, “Hey, you live in California. I live in Massachusetts. You know what, you said something on your podcast that I really, really value and I think you’re onto something there. Can I work with you?” Back in the day, that would’ve been, five years ago, almost unimaginable. And now going back to your friction here, it’s how do I make a frictionless process? That’s why you see FinTech just skyrocketing and all these startups and investments.


[00:45:16] Brad: Because now I take something like we’re recording this on right now and I can have a virtual meeting and as long as that whole process on the back end is, okay, I do want to move my million dollars to you as long as it’s seamless and my technology of transferring assets and all of that and you can see it along the way. So, what I’m reading some things because obviously, yeah, you may be an author and you may be kind of a thought leader but you’re no dummy. I can tell just this financial conversation right now. You know the industry. What are some parts of friction you’ve seen in your experience in financial services that are like, “Man, if I’m an advisor I’m taking this out, I’m taking this out, I’m fixing this?” Just I would love to hear your thoughts because you be the dream client sitting on the other side of the table for many of the people listening in here.


[00:46:02] James: Well, I think first of all from a broad level, you need to switch sides of the table and sit, think about that you’re the client and then do what we just described to this like hypothetical Uber example and map out, what are all the behaviors that someone needs to perform to be a client of yours, to find you? You can break it into different buckets. You could do like first like the initial prospect thing like how they found out about you, what are all the things that you do there. And then there’s, okay, some decided to become a client, what are all the things I need to do then and so on. And you may find for example that just take something like paperwork like that’s super annoying. There are a lot of things. They felt what plans can we eliminate? You know, nobody, you just said a couple of minutes ago, “Oh, it’s easy to see in some retrospect that Uber is a more frictionless thing. It’s hard to see it ahead of time.” And the reason, I think, is because nobody sits down until they max out all these behaviors and tries to identify the points of friction at a time. What the people would do they end up making it much easier. I rented a car yesterday that I drive over here and I was really surprised it’s the first time that I have a truly frictionless experience.


I mean, I went up to the desk. I have my keys within probably like 2.5 minutes. It’s very quick. And one of the things that they did was they didn’t assign me a card. They let me pick it. So, they gave me the keys and they said, “Go to the zone in the lot and then just pick whatever car you want.” And so, that just eliminated that whole process of them signing something in their system. I got in the car. I drove out and when I got to the gate, they just scan the car associated with my account automatically. And so, it just eliminates all that decision, all the discussion too about like what model do you want? What size car? Like, oh, that is done. So, that’s one example of like looking at a process and making it more frictionless. Second thing is some of the apps like if people could [inaudible] they do like to tax law and harvest them automatically. Well, if you’re a client, you’re like, “Well that’s stuff for me and before I had to put all this effort in to figure out how to like harvest taxes like make these adjustments. That sounds really nice.” So, some of that stuff can be automated with software, which is probably the best approach if you can do that.


[00:48:00] James: And increasingly as time goes on, this is another thing that I think is probably important not just for this but probably in most of life. This is not a one-time choice like the idea of automating the process of making it slightly easier, there’s probably some niche you’re doing for your clients every year that you should be assessing, “Well, okay, what does the process look like now? Now, what can we automate and improve?” Software is continually eating the world so to speak and taking over more and more tasks than it was before. So, there are going to be things next year that you’ll be able to do and make more frictionless for your clients so you can’t do this here yet. So, that means to be part of your annual review or something. An annual tech review or the ease of doing business with us review. An annual streamlining of your processes is really what we’re talking about here. So, that’s the first thing from a high level. The second thing that they came to me as you asked that question is consumers are clients in your case are far more informed now than they ever were before.


So, in 1985, you wanted if you were Massachusetts you do not want to work with a person in California. You wanted to work with someone locally because you didn’t have access to all information you have now.  If we don’t have social proof then we want trust. We want some kind of like the bond between someone that we feel like is an authority I guess. So, this is something I talk about in the book a little bit. One of the primary drivers of any human behavior of any habit is what I’ll call a social norm. And social norms are just things like we walk in the elevator and everybody turns around and face the front or on the back or you sit down for an interview which by the way is really fun to break social norms. If you pick the right one, it’s really good. If you could show up for an interview, you wear a suit. There’s no reason you have to wear a suit. You could wear gym clothes but it would violate the social norm. And so, we want to go along with the crowd. We want to go along with the herd. But when we don’t have a crowd to look at, we look for other things. We look through like some status for example, for authority.


[00:49:57] James: And so, it’s like, “Oh, in 1985 I could not see what the crowd says is the best decision. I could not see that putting my money in Vanguard or low-cost mutual fund was a really good choice. And so, because I didn’t know that, I would just go to the local financial advisor that had the status or authority and I would trust them.” So, I would say that in that sense where consumers are looking for information shifting from the authority to try because we have more access and availability to what a wise decision is based on what millions of people are doing than we ever have before. And knowing that and understanding that I think is it can serve you in two ways. One, it serves you because you understand that more well-educated people are coming in because they have access to that information. But, two, when you face someone who’s not as educated on the subject, as they could be, you can use that to your advantage as a selling point for why someone should follow a particular strategy because you can showcase what millions of people are doing or how it’s serving them. That can be a very powerful thing to get clients on board with what you believe is the best plan for them. Social proof can be an ally in your corner in that case.


[00:51:06] Brad: All right, dude. I mean, you just keep opening these doors. So, we’re going to slowly wind this down, but you bring up two things, the access to information. It’s so interesting because as you look at the Internet and obviously, now as it exploded actually it’s funny that you bring that up because before we came in here, I googled “retirement income planning” 96.7 million results. So that’s basically what financial advisors clients are dealing with if they go out and seek information. And so, as I’ve seen our industry evolve, it’s interesting because going back to your go to the local guy in the corner of Massachusetts back in 1985 example, well, back in those days, they remind me of like buying a car before the Internet. It’s like they said Ford was good. I walked on the Ford dealership lot. They said this is what you’re paying and that’s what I did. Now, buy a car and you got Kelley Blue Book, you’re like here’s all the consumer ratings. By the way, here’s the lot price. Here’s the actual wholesale price that they have.


[00:52:14] James: When I bought mine, I submitted to – I got quotes from 10 different dealerships and just have them all compete.


[00:52:20] Brad: Exactly. That was literally impossible in 1985.


[00:52:23] James: But I was picking dealerships that weren’t even – they were like four hours away from me. I was able to use their price to get the local one to come down.


[00:52:30] Brad: Well, Elon Musk must be up there but prior, that’s exactly what I did. It’s like here’s the model, here’s all of the options I want. Fight over it, basically. And, hey, I’m going to do business with whoever treats me the fairest.


[00:52:42] James: But your point is true. It’s a very different world now.


[00:52:45] Brad: And so, like if you use that car buying analogy, I look at the flood of advisors that from a BD standpoint they’ve really gone independent, they’ve gone RIA, basically fee-based and fiduciary and holistic and the analogy I make is like what I believe consumers want. I could be off base here but they want to know the guy I’m talking with. Number one, he’s going to be transparent and he’s going to be real with me, but I also want to make sure there’s this financial toolbox, this really big toolbox sitting in front of them. I want to make sure he has access to every single financial tool under the sun because I don’t want to deal with, we won’t name any names here’s this Capta group. They just sell this certain mutual fund because they make the highest revenue on it and it’s what serves their company at the highest level. So, I’ve seen this shift. So, my question is as a financial advisor, how do you navigate that?


And I’m just going to throw in a curveball random question at you here but how do you in a tactful way with someone like yourself as successful so you walk in and say, “I have $1 million. I want to save for retirement. I want to make sure I’m set,” what are some tips you might give somebody that now that they have access to every single piece of knowledge, number one, don’t let it overwhelm you, but number two, here’s how as a financial advisor in today’s world you can trust me and I’m going to give you transparent advise, I’m going to guide you through this like ideas concepts on how like if you’re building a financial advisor business, how you’d start to navigate that complicated world?


[00:54:15] James: So, I’ll tell a story and tie it back in. A friend of mine was giving a presentation at a conference and his challenge was he said like honestly, why would someone come to this presentation? They can watch Elon Musk and Jeff Bezos and Brené Brown and a bunch of other amazing people get talks on YouTube. If you want to just watch a good talk, all the best ones in the world are available like three clicks away. So, why would you come to this presentation? He did a really smart thing which he gave the audience, he pulled up a Google form and have the audience pull their phones and filling out live. So, this particular presentation was about the business ideas, ways to build a startup. And so, he had people submitting ideas during the presentation and then once they were all done, he emailed that list out to everybody who’s there. Now, suddenly, you have a reason to be at this live presentation. You cannot get that information, this crowdsource ideas anywhere except right there.


And I think that was a brilliant example of taking something that looks like it was a weakness, in fact, that we have more information available than ever before that you can get access to all of these talks immediately and turn it into a strength by using the technology for him rather against him. I think that financial advisors in this particular example, again, I’m not one but I think this is something that could be a similar strategy for your client. All right. So, you search for retirement funding and you see 96 million results now. There’s more information than ever before and more good information than ever before. And so, it seems like from the outside this is a negative weakness for our industry like why would someone come to me anymore if they can get it on their own? But in fact, the flip side of that is now suddenly there’s an information overwhelm. There are 96 million results. How do I as an individual know what the right one is? So, if you can figure out a way to frame yourself as the signal in the noise as someone who can sit through all these things because I’m working day-to-day on these topics and I’m the one that’s able to deliver the information to you that is valid and useful, then you start to use that what look like a disadvantage and turn it into a strength.


[00:56:16] James Now, you have to be really good at the same time. I think you have to understand that people probably have access to all this information, like for me, when I know the stats, I know that most of the alpha that is provided by a good investor is eaten up by their fees. I’m just as well off. Just dumping in Vanguard. I’m not even thinking about it, then we have to know that like many consumers coming to the table knowing those things so that when you frame yourself a signal, you’re saying stuff that is accurate and that you’re not trying to really get something pass somebody, but I do think that looking for ways to utilize that to your advantage. It’s kind of like judo. I mean, you have this 800-pound gorilla coming at you, how can you step to the side and use its weight against it rather than letting him just overpower you?


[00:57:00] Brad: It reminds me, so going back to the travel agent analogy, I just used a travel agent on my trip to Italy. I’m like why didn’t just book it myself? Going back to convenience that you mentioned, but I think it applies a lot in financial services. I think if your strategic angle is I’m going to be the lowest cost option in town. Good luck, because you’re battling against the computer.


[00:57:22] James:  Right. The robot will win.


[00:57:23] Brad: Right. And so, guess what, they don’t need sleep and you do. But if I look the other angle, well, as the net worth climbs and as, James, you get closer to retirement and probably have a few more million stocked away, well now it’s not just how do I manage assets and generate growth for a low cost, it’s not how do I also navigate tax issues, and how those interplay with your account. And, oh by the way, maybe you got some kids you want to leave some things behind you so estate planning. And so, I find as the problem gets more complex where I see most people in our industry going this technology like you talked about before basically taking the friction away from the process of working with me but, number two, how do I make sure I’m climbing that ladder of more complicated problems to solve. Because that’s a nice moat around…


[00:58:08] James: I love things too like if you can guarantee me money, so, for example, if you can say, “We’ll look at your insurance for you and your business and we’ll make sure that you are properly protected but you’re not over-insured.” Let’s say that I’m $800 a year over inured right now. Well, great. I’d like to have that back. I don’t need it. Things like that where that’s guarantee. That’s a guaranteed return. That’s like cutting out $800 of expenses and there are all sorts of things like that. There’s taxes or insurance and so on that if you can find those wins for your clients then that’s another way to beat this wide access information which is specific advice in that role and guaranteed returns like that could be huge. That sounds compelling to me as a central plan.


[00:58:51] Brad: And what’s interesting like, hey, I can get you 10% and maybe I can get you 12 because I’ve got this better asset. Well, what if I just save you 25% on a tax strategy? How different is that in making you 25% if I could save you 25%?


[00:59:05] James: Right. Dude, I don’t care where the dollars come from. They’d just see at that.


[00:59:08] Brad: Okay. Time for one maybe two philosophical questions.


[00:59:12] James: Let’s do it.


[00:59:13] Brad: Okay. Cool. I want to ask you this one. This is like my go-to favorite. If you could look back 25 years from today and say, “Man, that was really absurd they used to do that,” or framed another way like, “Can you believe we used to do that back in the day 25 years ago?” what comes to mind?


[00:59:30] James: Well, the first thing I think of is driving cars. There’s a great joke I love about it where you’re talking to your grandkids 25 years now and I say, “Wait, you all used to drive cars?” “Oh yeah.” “And nobody died?” “Oh no, millions of people died.” It’s like there are more people who die in car accidents last year than guns. Now, gun control is a much bigger political issue right now than car control if you want to call it that but we do this all day long. We hurdle around these metal death traps and don’t realize the risks that we’re taking and the potential. Because we do it so much, we all just think it’s normal. The other thing is cars take up a ton of space. They need so much space for parking. They take up, they make the streets wider, they make cities more accessible, walks have to be longer, streets have to be wider to park them further apart. It’s harder to get to places. I don’t know that our cities will radically transform into walkable communities in the US because we have such a huge infrastructure built around cars right now. We can’t just pluck through and get rid of them. But I do wonder if in 25 or 50 years we look back and think that that was crazy to do it the way that we did.


I heard a story about elevators and it took over 50 years for elevators to be adopted. And so, climbing eight flights of stairs, people were just weirded out by them. And I wonder if there’s going to be some more uptake for self-driving cars. I know you talked to people or you hear that you want to say stuff like, “Oh, they’ll be here within five years or whatever, 10 years.” but I think it will probably be a slower transition than that. There are a lot of reasons why but, anyway, that’s first the thing we can do anyway.


[01:01:05] Brad: It’s cool. I have a Tesla. I have autopilot and it’s interesting because people…


[01:01:11] James: Do you have one of those self-driving cars?


[01:01:14] Brad: Well, it’s not technically self-driving. I still trust it enough to have my hand on the wheel at all times but it is such an interesting thing because statistically I almost feel a bit bad for Elon Musk because he’s blazing a new trail and if you look just mathematically straight statistics, they’re tracking all of the self-driving models versus all of the human-driven models. Statistically, it’s, oh, I forget the exact percentage but multiple times it’s safer when autopilot is engaged.


[01:01:42] James: I’m sure. I mean, so much human error is involved there.


[01:01:44] Brad: Yeah.


[01:01:45] James: It’s going to be hard for us to, again, no difficult thing for the human mind to conceptualize because we’re not in control. We’re not used to riding in a car the way we ride in a plane. And so, I think that’s going to take a while to get over and I mean, I think there already been a few deaths from self-driving cars. There will be more probably as we work through the system. But if it is, even if it’s 5% lower than what the human error rate is then it’s probably going to be far more than that, probably like 90+ percent lower.


[01:02:14] Brad: I’m going to put it in the show notes because we’re going to have to statistically…


[01:02:18] James: But, I mean, even if it’s 5% fewer deaths from car accidents, that has to be worth it. And so, I’m all on board for it. I think anything that protects more people and increases the average accidents is going to be in the positive.


[01:02:33] Brad: Yeah. For sure. All right. Last question so you can take the stage prepare today. If you really narrowed down for the audience, what is the one thing that’s led to your success to this point before you are a New York Times bestselling author? Because I know you will be sure enough, but the one thing that’s led to your success to this point, what would it be?


[01:02:52] James: Well, the thing that changed the arc of my business and trajectory with my work was writing a new article every Monday and Thursday. So, you can call that a habit. You can call it consistency, call it whatever we want, but that was the thing that changed it. So, I did that every week for three years and went from zero readers to over a million in a month and hundreds of thousands of newsletters and so on. And that habit led to the business growth. But from a broader perspective, the thing that I would say is working out. I don’t think that I would be an entrepreneur if I didn’t go to the gym four or five days a week. I wouldn’t be able to handle the psychological roller coaster ride that requires and there are many days where I’ve had what feels like a lost day, an unproductive day, I’m not getting anything done, but at least I got a good workout in and that makes me feel it wasn’t lost. It’s also the only time, you know that feeling where you get one workout and then you start pushing yourself so much that you for a while everybody walks in the gym like how they worry how they look, they’re going to make sure that the face won’t fall off.


But then you’re suffering so much that you don’t even care that you literally just trying to get through the next 60 seconds. You’re just trying to breathe and there’s something therapeutic about getting to that point about letting go of all worries about status and social role and internal judgment and self-criticism. You can’t have the voice in your head talking that loudly if your breath is overpowering it, if you’re just trying to get through it. Now, I think there’s something about pushing yourself physically that relieves you and refreshes you mentally and also strengthens you mentally. I don’t I don’t know that you can reach whatever your particular peak mental toughness is if you don’t also push yourself physically. You can get to some very powerful places just in your mind by working hard and doing meditation or so on, but I don’t know that it will ever be as much that could be if you also push yourself in a physical way.


[01:04:51] Brad: Do you start your day with a workout or end your day with a workout?


[01:04:53] James: I end it. I’ve done it both ways. I tend to find that my lists are better if I work out in the evening or early evening. For me I should start to like 4 to 7 on that range but, yeah, that’s just annoying.


[01:05:07] Brad: I’ve got a workout buddy at the house. We do it in the mornings and my go-to joke is like if you get done with your workout, you just accomplished 99.9% than most America will today just by doing that. And so, I relate it back to kind of the military concept of start your day by making the bed, because if all else goes to hell the rest the day, you had a small victory because your day with this. That’s how workouts fit into my life. It’s like, hey, really bad day at the office. Well, at least, I got this done.


[01:05:37] James: Great. And the longer you wait, the more other people’s agenda items start creeping into your day. You respond to theirs rather than not bringing under our agenda. So, generally speaking, I think it’s important to get something productive or important done very quickly. Just thinking that.


[01:05:51] Brad: For sure. One quick question and I’ll let you run. So, for three years you wrote an article every Monday and Thursday. What year did you start that?


[01:05:59] James: November 12, 2012, was the first article.


[01:06:03] Brad: November 12. Okay. So, and what were you doing at the time? Were you a full-time photographer or what was your…


[01:06:08] James: No. I’ve been so I’m an author now and that’s usually the quickest way to describe what I do, but I think I identify first and foremost as an entrepreneur so I had started a couple of other businesses for like the two years before that and now I refer to that period of time as where I incubated my skill set but I, like many people, when I started doing what I was doing, I tried a bunch of different ideas, gradually learn how to build a website and build a product and grow an email list and all that. So, when I started, I at least knew what I was doing. I started from zero again but all the pieces were in right place and I think that’s why over that time span from November 2012 to November 2014, I went from zero to 100,000 email subscribers. It’s just one of the fast-growing blogs at that time and I think a reason I was able to do that is because of the two years that came before where I learned a lot of those skills so I kind of prepared for it.


[01:07:05] Brad: What led you? What was the motivation? Because that’s such a serious commitment. What was like November 12, 2012, I’m doing this Monday and Thursday.


[01:07:12] James: I don’t think there’s anything special about that pace or those days in particular. I do think there’s something in any person who’s creating something whether it’s podcasts or articles or art, there is some period early in your career where I think you should just have a consistent frequency because you need to learn where your voice is, you need to figure out there a lot of chains in the process like how does this all work, and how do I produce something, what does my system look like? All of that can only be figured out if you hold yourself to a standard of publishing. And so, for that reason, I said, “All right. I’m going to do twice a week,” because I feel like that’s the pace that I can make two quality articles at. I felt like if I went beyond that, it wouldn’t be high quality enough anymore. So, there were some implicit quality bar there, but I always so that period of time left the schedule and drive them at work. It didn’t matter how long or how short it was, how good or how bad it was, how I felt about, something was getting published on Monday and Thursday. If I can only write one good paragraph and that’s what the article was.


And I think that it is important to do that because I learned a lot about producing. I also learned that I’m a terrible judge of my own work. Sometimes you think you come up with a good idea and it doesn’t go over that well and sometimes one of my most popular articles, I wrote in the passenger seat of a car driving to West Virginia because I had to get it out that day and it went over really well. I didn’t know if that idea was as useful as it was and that people were interested with it but I got it out there because I have this schedule. I think there’s something really valuable about that I think especially early on in a creator’s career.


[01:08:41] Brad: Yeah. I think it’s interesting. When I started the podcast straight experiment more so I can put content out on my client’s time versus hop on this 10 AM webcast but I think what you said about sometimes your worst work in your own mind, you got to be really careful as a creator listening to the voices in your head. It goes back to finding your voice because I had interviews I’m like, “Man, I just thought that. Why did I ask that stupid question? Why did I stutter along there?” And then next thing you know like you get emails and like, “Oh, I love that interview.” And so, I think that is something you got to be really careful about as a creator is just don’t always listen to your own voice in your head. Let the work validate itself once you put it out there.


[01:09:20] James: Yeah. There’s a great quote about something like focus on making the good art, putting it out there and then while everyone is deciding whether it’s good or bad, just make more art. And so, I kind of like that. Like your job is not to judge the work. Your job is to produce it so just focus on staying in the schedule.


[01:09:37] Brad: That sounds like a quote from the War of Art. Pressfield?


[01:09:43] James:  Pressfield. Yeah. Yeah.


[01:09:43] Brad: Because I’m like, “Man, that’s hitting home. I’ve heard that somewhere before.” Yeah. A great book. Okay. One last question. Just sorry, dude. You got me going here. Just because we’ve been taking our clients down this path and nobody in financial services is doing it or very few I should say. What’s been the power that you’ve seen now that you have this massive list of people that follow you, like what has that done for your business? Because having so many financial advisors they’ve got these massive databases where people have come to their live events in the past, referrals that maybe didn’t work out. They got this massive untapped resource. You’re tapping it in your business. What’s been the most powerful thing about having a massive list?


[01:10:21] James: Well, I don’t know like on one hand, I don’t really think about my audience that way like I’ve always sent this to my readers. I don’t really consider myself like an expert. I’m more of an experimenter. I was like going through with you. I’m just trying ideas and trying to see what works and then sharing what I learned along the way like I don’t think I have it all figured out. And so, in that way, I really think my audience, you want to call it my readers or my peers, and we’re all just trying. Now, having access to like my email list of over 400,000 people now so having access to that, it does, I mean, it moves the needle from a business standpoint. Just yesterday, for example, I sent an email about the book and immediately it’s in the top 100 on Amazon. It’s like number 44 yesterday just from one email. I didn’t even really push it. I just mentioned it. So, in that sense, yeah, it can make a big difference but I still think it’s important to consider myself on the same level as them. We’re all just like trying ideas and I’m just sharing what’s working publicly and hopefully, it’s useful.  


[01:11:22] Brad: So, what I take from that is you have a megaphone that happens to be bigger than the average Joe where because most people they send an email, well, here’s their mom and dad just bought a copy of their book and maybe a cousin. So, well, James, thank you so much, man.


[01:11:36] James: Yeah. Thank you.


[01:11:37] Brad: It’s been a pleasure.


[01:11:38] James: I appreciate it. It was great.


[01:11:39] Brad: Good luck on the book. I have no doubt there’s going to be a lot of people that bring value to it so I appreciate the time today.


[01:11:43] James: Yeah. You bet. Thanks.


[01:11:45] Brad: All right.




[01:11:46] Brad: Thanks for listening to this episode of the Elite Advisor Blueprint. For access to show notes, transcripts, and exclusive content from our show’s guests, visit And before you go, I’ve got a quick favor to ask. If you’re liking the podcast, you can help support the show by leaving your rating and review on iTunes. Not only do we read every single comment, but this will help the show rank and get discovered by new listeners. It really does help. Thanks again for joining and be sure to tune in next week for another episode.


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