Mike Piper is a CPA from St. Louis, MO, and is the author of many finance and tax-related books. He’s quoted regularly as a Tax and Social Security expert in publications such as The Wall Street Journal , AARP , Forbes , and Morningstar , among others. He’s also the creator of the blog, ObliviousInvestor.com, where he shows his readers that investing doesn’t have to be complicated.
Today, Mike joins the show to talk about his financial journey, how fear, anxiety and mental health impact our financial decisions, and the concept of having ‘more than enough.
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00:56 – Jonathan introduces today’s guest, Mike Piper, who joins the show to share early financial lessons his mother imparted on him, and how he started writing about finance and taxes
12:11 – Mike speaks to his experience publishing over thirteen books and refreshing new editions
14:18 – How writing has impacted Mike’s thinking
15:57 – The genesis of Mike’s blog, Oblivious Investor
17:23 – Taking on clients for Tax and Social Security advice
18:37 – The inspiration behind Mike’s latest book, More Than Enough
21:05 – Fear, anxiety, and mental health
26:49 – Feedback Mike has gotten from his book
30:07 – Conservative assumptions in the financial planning process
32:53 – What Mike would change about the tax code if given the ability
36:24 – The audience Mike wished to reach when he wrote More Than Enough
38:33 – Blocking out the noise in finance
42:27 – One piece of financial advice to heed and one thing to completely ignore
45:45 – The last thing Mike changed his mind about and what he would do if he only had 24 hours to live
48:31 – Jonathan thanks Mike for joining the show today and lets listeners know where to connect with him
“It was basically an accidental business. Within a handful of months, I was getting emails from people who read the book saying, ‘This was really useful. I wish you would write a book about this other topic.’ So I did and then people bought that book. And in a little less than a year, it was pretty clear that I could just quit my job as an accountant and do that instead.” (11:07) (Mike)
“These days I would not suggest somebody go into publishing as a career because the Amazon ecosystem has changed in ways that are not favorable to writers and publishers, frankly. Of course, even back when I started, I just got lucky in terms of it becoming enough to make a living from. So even when it was a more favorable set of circumstances, it still took a lot of good luck for it to turn into a business that paid well.” (13:02) (Mike)
“I kept working with people who had a lot of anxiety about their financial circumstances. Writer Bill Bernstein says, ‘If you’ve won the game, stop playing.’ And the reality was that these were people who had clearly ‘won the game.’ Their level of spending relative to their Social Security income and the size of their portfolio is such that they’re absolutely not going to run out of money. And yet, in some cases they were still really focused on anxiety feelings regarding their money.” (19:21) (Mike)
“I haven’t gotten any negative jabs yet. I kinda expected some for exactly that reason. You’re helping the people who least need help. And, frankly, that’s a fair characterization. But, even if they’re people who least need help, they still need help with some topics, right?” (27:13) (Mike)
“That’s another message that I wanted to try to get across here. Even if you don’t feel like you have more than enough right now, it’s just the natural way that things go. Enough turns into more than enough. That’s usually how it works out.” (32:05) (Mike)
“That’s my general method of operation when writing books. Taxes are complicated. Any normal human being is not gonna fully grasp and retain the information the first time through. So, here’s how it works in detail. And then, let’s just summarize the key points as succinctly as I can. That’s my general way of doing things.” (38:04) (Mike)
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Jonathan DeYoe: Hey, welcome back. On this episode of the Mindful Money podcast, I’m chatting with Mike Piper. Mike is a CPA in St. Louis, Missouri, and the author of many finance and tax related books. He’s quoted regularly as a tax and Social Security expert in the Wall Street Journal, AARP, Forbes, Morningstar, among others. He’s also the creator, and this is important. You should look this up. He’s the creator of the open Social Security calculator and the author of the blog Obliviousinvestor.com, where I’ve been a reader for years. He was a blogger before I was a blogger, and he’s one of the bloggers I’ve followed for a long, long time without knowing it. He’s a mentor, and we just talked about that before he got on here. He’s in his late 30s. I’m in my early fifty s. That feels a little weird to say, but I really appreciate the things he says. And he’s straight shooter. As straight as they come. So, Mike, he’s also the reason I wanted to have him on the podcast. Now, he’s recently released a book, more than enough. A brief question to the brief guide to the questions that arise after realizing you have more than you need. I’m looking forward to that conversation. So, Mike, welcome to the Mindful Money podcast.
Mike Piper: Thank you. I’m happy to be here.
Jonathan DeYoe: So I think you call home St. Louis. But tell me, where do you call home and where are you connecting from?
Mike Piper: Yes, St. Louis. That’s correct. St. Louis.
Jonathan DeYoe: Did you grow up there?
Mike Piper: Yep, we both are from St. Louis. We spent nine years in Chicago and a couple years in Colorado. But family is here, so we’re in.
Jonathan DeYoe: Okay. Okay. And that’s what kept you? There was family?
Mike Piper: Yeah, pretty much.
Jonathan DeYoe: Okay. Very cool. So what did you learn? I mean, were your parents entrepreneurs? What did you learn about money as a kid growing up in St. Louis?
Mike Piper: Yeah. Neither of them was an entrepreneur. But I guess not my first experience with money, but my first experience that got me interested in money, I guess, let’s say, was my mom gave me a share of Procter Gamble stock when I was maybe eight or nine years old, something like that. And she explained what a share of stock is, right? She explained, you’re a partial owner of this business. And, of course, as an eight year old, I had never heard of Procter and gamble. But then she took me to the grocery store, because we went to the grocery store all the time, of course, drag your kids along. And she pointed out a million products that Procter and gamble makes. That, of course, I was familiar with all the different foods, laundry detergent, toilet paper, everything that’s in our household and in all my friends households. And so she was explaining that anytime somebody buys any of these products, you make a little bit of money, basically, is how she explained it. And we didn’t get into any numbers. There was no explanation that with one share, you’re this infinitesimally small owner. But she made it very tangible, right? It was a business that made things that I knew about. I could see them. I saw people buying them and using them. And she explained that and explained that every once in a while you would get a dividend check, which is just your share of the company’s profits. And there was no discussion at all about the fact that you could sell this share of stock and its value might go up and down. It was just purely, you now own a piece of this business, and it’s going to earn you some money, basically. And I pretty quickly grasped onto the idea that, oh, and if I owned more and more and more of it, then that could be enough to pay for different, whatever I wanted to pay for as a kid, whatever that was. And it got me excited from a young age, basically.
Jonathan DeYoe: Before you had a share of stock, did you have a savings account?
Mike Piper: I don’t think so. I’m, um, pretty sure I did not. Yeah.
Jonathan DeYoe: So my first lesson was the savings account, and it was the passbook savings and just the teeny, teeny, teeny, tiny bit of interest that I would get on my $25 in the savings account. But that is the single best childhood lesson about business and about owning stock that I have ever heard. After we’re done here, call your mom. Say thank you. That is an incredible story.
Mike Piper: Yeah, I love that story. I’ve written about it on my blog. I wrote about it for the Wall Street Journal once I tell her, thank you for it, because it made a huge difference in my life. And I think it’s interesting because one individual share of one stock as your whole portfolio as an adult is a terrible idea. Right? But for a kid, that’s not what it’s about. They don’t need to learn about diversification yet. They don’t need to learn about anything. You just need to get them interested. And, uh, it worked. It got me really interested. It was perfect.
Jonathan DeYoe: And the focus on the dividend instead of the volatility instead of the. It goes up and may go up in value, because as an investor, long term investor, I don’t care about the day to day. I don’t care about the zigzag zags. I care about the growing dividend. That’s the most important thing to me. And to have that lesson as an eight year old, that’s so powerful.
Mike Piper: Yeah, she did a great job, which is funny. It’s not her field at all. She’s a dietitian. It was just, she knew it was important and wanted to teach her kids, so she taught us.
Jonathan DeYoe: So did you get any lessons from your dad, or is it your mom mainly teaching you stuff?
Mike Piper: I mean, plenty of life lessons from my dad. As far as financial lessons, I would say they mostly came from my mom. Mostly. She was the one who, who was interested in teaching us about those things.
Jonathan DeYoe: That’s great. Besides the stock experience and going to the grocery store and say, oh, that’s property, that’s good. Are there any other experiences that your mom taught you lessons with like that? Uh, sure.
Mike Piper: I mean, we talked about credit cards. She explained that they pay for everything with a credit card because you get 1% back or 2% back or whatever. And she explained to those, that’s borrowed money, and if you don’t pay it back at the end of the month, it’s going to cost a bunch of money and interest. And so it was explaining about debt and borrowing and interest and why you don’t want to be in debt, as well as explaining that a credit card isn’t in itself a dangerous tool. You don’t have to be afraid of it. Uh, just as long as you don’t overspend, you spend what you can afford to spend. Those were, I think, the primary things that I remember talking about. Just the idea that don’t spend more than you can afford and investing.
Jonathan DeYoe: And this is eight or nine years old. So is this how a kid gets raised in St. Louis, or are you unique.
Mike Piper: I don’t think it’s super common. No.
Jonathan DeYoe: Yeah. Did you have any friends that you got together and chatted with? Hey, I get Procter and gamble, and they make this toothpaste and that. No.
Mike Piper: No. I don’t recall. I don’t think so. Pretty sure.
Jonathan DeYoe: I mean, again, your mom’s incredible. How long did it take you to coalesce that into a life lesson? I mean, in the beginning, it was just like, oh, there’s a dividend, a couple cents. Right. But how did you take that and say, oh, wow, the dividend grows, and I’m not doing anything?
Mike Piper: I mean, in kid terms, it sounds like a long time, but certainly it was my first job in high school. I saved money, opened a Roth Ira, and was investing it. So it was still several years, from eight years old to junior year of high school. But certainly that’s early enough, right? If junior year of high school, you’re already opening a Roth Ira with your own money and investing the money. That’s early enough. So it worked.
Jonathan DeYoe: Yeah. Do you have kids?
Mike Piper: No. No kids.
Jonathan DeYoe: Okay. I know. That’s one of the things that people talk about. I talk about this, too. If you have a kid and they can work Roth. If you’re nine or ten and you have a job, whatever the job is, or even a pretend job, and you fund your Roth Ira, that’s like gold. That’s like such a powerful tool to use because they’ve got 70 years before they needed it. Right. So it’s huge. As a high schooler, with your teacher being a dietitian, as a high schooler, you were funding a Roth Ira because you thought it was a good idea. Did you take a class at some point?
Mike Piper: I had an economics class, I guess, in high school, but I don’t think it was not really personal finance. It was microeconomics. We’re talking about utility and supply and demand curves and things like that. So it was interesting, but I don’t think it was super directly applicable. Practical, too. Yeah.
Jonathan DeYoe: Not practical. Where did you get the practical interest? Was it just. Hey, this is the Procter gamble stock. Was it that. That kicked it all off?
Mike Piper: I think that really was it, because it didn’t stop there. I owned it through those remaining years. Right.
Jonathan DeYoe: Do you still own it?
Mike Piper: No, I don’t. I kind of wish I did a little bit just for the sentiment of value, but no, I don’t. She would also talk about when the proxy statements come, right. And you’re supposed to vote for company resolutions and members of the board she would read them in advance and then break it down in eight year old, nine year old language for me, like, okay, this person supports doing this, or this person supports doing this, and you get to vote. And so it was a lesson not only in the personal finance, but also the part that as a shareholder, you’re a real owner, you have a say in how this business is operated. And so it wasn’t just that one. You get this stock and then the lesson is over. It was over a period of years, really.
Jonathan DeYoe: Was she investing too at the same time?
Mike Piper: Oh, yeah, absolutely.
Jonathan DeYoe: Okay, great. I wanted to know if it was just an education around for you or if she was actually active in it. So when did you start writing about it all?
Mike Piper: I didn’t start with writing about investing. So I’m a CPA, I went to school for accounting. And the natural result of being an accountant is that every year when tax season rolls around, lots of friends and family and acquaintances are showing up with questions, right? They have, uh, just questions and they’re often the same questions over and over and over. And in particular for me if given the era here. So this is 2007, and ah, a lot of my friends from college had graduated the same time as I did, but were struggling to find full time jobs in their field. So a lot of them had the part time job at Starbucks and then also doing some freelancing work in their field, trying to build up a portfolio, build up experience and so on. And so they had self employment income, which anyone who’s self employed knows. It opens up a whole list of additional tax concepts that you need to know about. And so I was getting these same questions every year from people just needing to understand about self employment tax and set by Ras and estimated tax payments and stuff like that. And uh, so I just decided to write a book about it, just a very short book. The idea was basically to be like Cliff notes for this topic. And then when people came to me with these lists of questions, the same questions every year, I would just say, just go read this book. It’s really short, it’s easy to understand and answers all these questions. And the way that I published the book, it became available on Amazon. And I didn’t really expect this, but just people started buying it and leaving good reviews. And uh, then it was basically an accidental business. Like within a, uh, handful of months, I was getting emails from people who had read the book saying, oh, this is really useful, I wish you would write a book about this other topic. So I did, and then people bought that book. And in a little bit less than a year, it was pretty clear that I could just quit my job as an accountant and do that instead. It was a business that I didn’t really ever intend to be. My full time line of work. It just kind of happened.
Jonathan DeYoe: Yeah. You’re unique in the CPA community. Sure. The productivity of writing, it’s just like, I don’t think I’ve seen anybody else do that. So you’re no longer practicing CPA at all? You just keep the license?
Mike Piper: I am, actually. So I was writing full time from M 2008 until 2021, the beginning of 2021, when I started working with individual clients. Again, just because I kind of had a lull in terms of. It was a brief period where there weren’t any new books that I wanted to write. So I just kind of decided, hey, let’s take on some clients and do some actual individual financial planning.
Jonathan DeYoe: Again, pretty cool. So what year did you publish the first book? How many books have you published?
Mike Piper: 2007, and, uh, I think 13. A lot of them have new editions every year. So there’s ten editions of ten or more editions of some of them. So if you count actual isbns used, it’s probably 50 or 60 something. I don’t know.
Jonathan DeYoe: Wow. So you rewrite them because code changes.
Mike Piper: Exactly, right. Our tax law changes, and so they need to be updated, unfortunately.
Jonathan DeYoe: So I’m just curious, and by all means, we can edit this out if you don’t want to answer this question, but how has the book business been for you? I mean, has it been as lucrative as working as a CPA full time working with clients? Or is it just.
Mike Piper: Yeah.
Jonathan DeYoe: Uh, it was enough to get by.
Mike Piper: It was more lucrative, I would say. It really varies. Has varied from one year to the next. And the truth is, these days, I would not suggest somebody go into publishing as a career because the Amazon ecosystem has changed in ways that are not favorable to writers and publishers, frankly, yeah. Of course, even back when I started, I just got lucky in terms of it becoming enough to make a living from. So even when it was a more favorable set of circumstances, it still took a whole lot of good luck for it to turn into a business that paid well, basically, yeah.
Jonathan DeYoe: Ah, you had pretty excellent timing, too. There was a moment in time. You’re writing about the first book, writing about sort of self employment, tax and self employment. And I’m trying to think back to when Uber was born, when self employment became, like, ubiquitous. Everyone had a gig, right? All the kids in 2007, eight, nine, they had to have a gig. Work to survive, right?
Mike Piper: Yeah, exactly. Uh, it was good luck in a lot of ways. Good timing.
Jonathan DeYoe: Absolutely perfect timing. And you’ve updated it every time there’s a major tax code change or every year? Every couple of years.
Mike Piper: Every year, mostly. Sometimes. Because the list of books is so long, sometimes some get prioritized more than others. Basically, yeah. But the goal is try to keep it sufficiently up to date that the information is still relevant and then freeze.
Jonathan DeYoe: That’s awesome. I’m curious, how has writing so much affected your thinking?
Mike Piper: That’s a great question. That’s really hard to answer offhand. I think I communicate in general better in writing than in a conversation. To put it bluntly, I am not the fastest thinker. I like to be able to edit and revise and take seven tries to come up with how I want to say something. One thing that’s interesting is giving talks at conferences, uh, and so on. It’s the exact same thing as writing a book. And I think a lot of people don’t necessarily see them as the same thing. But certainly that role, which I do sometimes, is made much, much easier from having a lot of experience writing.
Jonathan DeYoe: I don’t know if you. The way you said how you’re a better writer than a talker and how you’re kind of slow in the thought process. I’m just imagining conversations with my own wife where I am trying to be really thoughtful with the words that I choose and use because I want to convey the exact message and not screw up the message. And so I am very slow. And she’ll be like, come on, come on. I’ll be like, I got to get this right. So I think I sort of fall in the same boat, but I have not written 1350 books. That’s an, ah, impressive undertaking.
Mike Piper: Um, it’s less impressive when you consider that it was a full time job. You can get a lot of writing done when that’s all you’re doing.
Jonathan DeYoe: Yeah. And when it’s really. Your books are all very topic specific. It’s self employment tax, and they’re not 300 word novels. It’s really. This is the code. This is how it applies. Read this and you’ll understand how this applies to you. Right. It’s fantastic writing for all these different categories. I think. I think it’s great stuff. So when did you start the blog and why, if you’ve got all these books, why blog?
Mike Piper: Yeah, the blog came not too long afterwards. So the first book came out in 2007. The blog started in October 2008, and so it was right at the things that were blowing up in the financial cris. Right. So the name of the blog is oblivious investor, and I just wanted to write something and publish it immediately. Just this idea that, yes, it seems like everything is going completely crazy, but it’s okay to ignore that. If you’re a long term investor, it’s okay to just be oblivious to it. Because if you don’t need. If you’ve got your portfolio, but you’re 26 or something, uh, so you’re not going to need it for 30 plus years, this isn’t a problem for you. It’s okay to be oblivious to it. You could just put your headphones on and keep smiling and carry on. And that was the idea. And I just wanted to publish it immediately, rather than writing a book about it and having it take however long it takes to write a whole book and publish the book.
Jonathan DeYoe: So, in reading your recommendations on how people should invest, and the conversation about investing and the concept of just being oblivious to the whole thing, we think exactly the same in terms of just make it really simple, set it to the side, ignore it, maybe add money to it when you can. That’s the sum total of what you do. And the job of an advisor becomes keeping people from screwing that up. That’s really what I do as an advisor. Right. Is I keep people from making a mess of things and responding to things that are happening out there. The noise. Right. So you’ve recently kind of shifted from the writing. It sounds like 2021, uh, and you still do writing, of course, but you’ve also sort of taking some clients. And is it tax clients, or is it financial planning clients, or do you call them different? Are those different things? Do you.
Mike Piper: Right, so I am an RIA, or rather an IAR for an RIA. And the work that I do does involve investment advice. It’s just hourly, though, so there’s no discretion over client accounts, there’s no custody. It’s just purely advice. And the people who come to me are generally coming for tax advice, Social Security advice, generally talking about Roth conversion planning and which dollars should we spend from our portfolio this year? And so it’s mostly tax, but I have the RIA registration so that you can also speak to the investment topics that are so clearly related. Right. Otherwise you just have to say, oh, no, sorry, I can’t answer that question, even though we’re answering all these questions in a circle around that question. So it’s broader. I mean, it’s mostly tax, but it does get into other fields just because you can’t really avoid them.
Jonathan DeYoe: A lot of times they’re interrelated. We call that, what is it? Interdependent co arising. Like things arise together. Interdependent on each other.
Mike Piper: Yeah.
Jonathan DeYoe: So I want to kind of shift to, uh, the book of the day, right? More than enough. Sure. Almost everything we read in the financial press, in the publishing world, things that I talk about, I think the normal things you talk about, are geared towards getting people to this place where they have enough. And if you pay close enough attention, it’s all kind of panicked talk. It’s all kind of, you have to do this and this and this, or you’re not going to get there. You’re not going to have enough. Oh, my God, you’re never going to make it. You’re never going to make it. And it’s all kind of fear around not getting to enough and having enough. So that being said, what was the stimulus to go? You know, people are going to have enough and they’re not going to know what to do with that. Why write this book now? What was the stimulus for this book?
Mike Piper: The stimulus for this book was actually going back into working with individual clients. I kept working with people who had a lot of anxiety about their financial circumstances. And the reality was, if you’ve won the game, stop playing. These were people, this is not everybody I worked with, but lots of people who had clearly won the game. I mean, their level of spending relative to their Social Security income and the size of their portfolio is such that they’re absolutely not going to run out of money. And yet in some cases, they were still really focused on anxiety, feelings, basically regarding their money. And so just helping people see that things are going to be okay, you’re going to be fine. You’ve already got it made here, basically. But there are still some questions that need to be addressed. And so that was basically part of it was people who didn’t realize they were already in that situation and then other people who did realize they were in that situation. Basically, they just had a good income, saved a good percentage of it, and did the right thing as far as investing. They didn’t pick any individual stocks that were absolutely amazing. They just had a boring mutual fund portfolio, put money into it over 40 years, and lived a conservative lifestyle relative to their level of income. And then without really necessarily meaning to, they realize they’re at a point where there’s no way they’re going to spend it down in their lifetime. And so there’s all these other questions that come up, questions about giving to loved ones, giving to charity, the tax questions that arise related to that, and just these other things that don’t get addressed very often in most financial writing.
Jonathan DeYoe: Why do you think there’s so much foreboding? Why do you think there’s so much anxiety and fear around it as far.
Mike Piper: As what people experience or in terms of the other writing that you see?
Jonathan DeYoe: No, not the writing. What people experience. And why is everyone so, even the people that are there and they’ve made it, they’ve won, why is there so much fear around running out? And I’m asking this from a very personal place. I’ve only just figured out that I’m okay. And I’ve been okay for a long time. I’ve only just figured it out.
Mike Piper: Right? Yeah. I think for a lot of people, part of the reason why they managed to accumulate a significant amount is because of fear in the first place. Right. There are people who are afraid of the different things that can go wrong. And this is guilty.
Jonathan DeYoe: Yeah, guilty. Totally.
Mike Piper: Right. And so it’s not that anything about them changed. That’s the same exact set of preferences and personality traits that led them to do this. And so they haven’t changed at all. The only thing that’s changed is their circumstances. Those feelings are no longer a match for their circumstances. Whereas at some point those feelings made sense, perhaps when you’re early in your career and don’t have an emergency fund and so on, so you really, really should be saving, saving. And so at that time, those feelings do match your circumstances. But at age 65 and you’ve been saving, saving for so long and you’re still feeling anxiety, you’re still the same person, still driven by the same motivations, but your circumstances are quite different. And so it’s no longer a, uh, fit. People often don’t realize that.
Jonathan DeYoe: So there’s so much I want to peel out of that. I think it’s like chapter five. I think it’s chapter five. And there’s a subsection that’s entitled mental health care. And I’m going to read this to you. You already know this, right? But I’m going to read it because I want everyone to hear this. It says, it’s natural to have some level of nervousness about money. Our finances are a critical piece of our lives, and a major portion of our financial experience is outside our control, tax laws, investment returns, et cetera. But there are some people for whom the level of anxiety they experience is clearly disproportionate to the level of financial risk in their lives. And you’re actually suggesting this is a personal finance book, and you’re suggesting seeking mental help, seeking therapy for people that have this. And I think that’s amazing because I have clients that come in and say, jonathan, you don’t know this, but you’re our therapist and our marriage counselor and our priest sometimes, and you can forgive us our behaviors, all those kind of things. But did you struggle with putting that in the book, or were you like.
Mike Piper: Oh, this obviously needs to go, oh, did I struggle? Yes. That was a thing I was very apprehensive about, including, because I know for sure that different people are going to see that very differently. Right. There’s some people who are going to see that as borderline insulting, even though that is very much not how I mean it. Right. Some people, the idea that they should seek mental health treatment, they have all these stigmas attached to that concept. And so they think that’s if somebody would suggest that them being told that there’s something wrong with them. And, of course, that’s really not how I mean it. And so through many revisions like we were talking about, it takes me many tries. I did my best to convey the message in a way that hopefully gets that across, that no, there’s not anything wrong with you. This is a normal part of the life experience where you have some beliefs that don’t fully match up with the reality around you. And if that’s relating to your money, that itself, that’s a good reason to go seek mental health care. And the other thing is, people, I think often, I’ve been through therapy, most of the loved ones in my life have seen a therapist about various things at various times. And I think a lot of people often expect it to be so much harder than it is or scary or dangerous, and it’s not that expensive. And you’re really just sitting down and chatting with a person for 50 minutes. It’s not that hard, but people are really scared of it. And so I was just hoping to give a little nudge sometimes.
Jonathan DeYoe: It might be there’s nothing wrong with you. You’re worried, but let’s help you not worry as much.
Mike Piper: Right? Yes, exactly.
Jonathan DeYoe: That’s all it is.
Mike Piper: That’s it.
Jonathan DeYoe: For listeners out there, it’s like four pages in a very large book. So it’s not the whole book dedicated to seek mental health. It’s if you have this condition, which, uh, I have, like, I was raised with very little. I fought and fought and fought and fought and fought and fought, and I never really. And this is the interesting part. And for, I don’t know, years and years and years and years, I ran my own spreadsheets, I did my own planning. I thought about it myself. I didn’t go and get my plan done by a professional. And about ten months ago, for the first time, I’ve been doing this for 25 years. For the first time in my life, I actually went to a CFP myself and had my plan done. And for the first time in my life, I have confidence because I had the plan done. And, uh, I’ve told people for 25 years to do that, and I never did it. And then when I did it, I got the thing I told people they would get if they did it. Yeah, I could use some mental health, I could use some support here. I love that section of the book, man. I did.
Mike Piper: Thank you. Thank you. Yeah, I was nervous about including it, but it felt important to include a little message of that nature, basically.
Jonathan DeYoe: Yeah, for sure. In the context of normal media today, where it’s really all about getting to enough, and there’s almost a little bit of a dislike for people that have enough or have more than enough. Wealth is having a moment. There’s a moment where wealth is not appreciated, right? In the biblical sense. A moment could be a minute, it could be seven years, right? So there’s this long moment where wealth is going to have a problem until wealth cleans up its act a little bit. With all these podcasts and everyone focused on having enough and all of this. You write this book, and I’m guessing that you’ve had a response like the world has said, how can you be so evil for writing this book to help people out that have money? Or you know what? I really had this feeling, and I’m really glad you wrote this book. So have you gotten a lot of good responses and have you gotten any sort of negative jabs from this?
Mike Piper: I haven’t gotten any negative jabs yet. I kind of expected some for exactly that reason. Right. You’re helping the people who least need help.
Jonathan DeYoe: Right.
Mike Piper: And frankly, that’s a fair characterization, but even if they’re people who least need help, they still need help with some topics. Right, right. And, uh, I haven’t had anybody, no jabs, so to speak. It’s been positive feedback so far. But of course, I’m sure there are people who still have those feelings. They just haven’t shared them with me.
Jonathan DeYoe: When you look at your, and this is sort of, uh, maybe not your current clients, but the clients you had when you were younger, and you were seeing clients face to face and then sort of building the clients today. And then at the end of the book, you thank a couple of advisors that you worked with on the book. And I don’t know if you’ve asked them this question, but how many of your clients, their clients, the public that you know of, how many people fall into the category where they have enough and they don’t know they have enough as a percentage, if you had to guess.
Mike Piper: I’ve never asked anybody else, nor have I thought about that in terms of trying to ballpark the percentage. It’s obviously a lot of people, just like, there’s the opposite. Right. We see people frequently who spend in a way that is problematic. Right. They’re spending at a level because they don’t necessarily. There’s just people who aren’t planning in advance. There’s certainly people whose life circumstances are such that they don’t really have a choice. And I get that. But there’s also people who could be making different decisions and who are nonetheless really spending more than they should be spending. And it’s the character trait, basically, right. There are people who prioritize right now rather than the future, and then there’s other people who prioritize the future so heavily, and so they’re going to feel the opposite way. They’re always going to be scared about the future, even if the future is already financially secure. But the percentage, I would have a hard time.
Jonathan DeYoe: No clue. So I think that in the question, there’s already a bias. Like, we are financial people, so the people that come to us already have a desire to be successful financially. So there’s a selection bias that exists in asking the question, are you and I talking about it? But I’m wondering, because do you think that it’s people who are successful and have money seek advice, or do you think that people seek advice and that advice helps them become successful? You, uh, understand the question I’m asking?
Mike Piper: Yeah. And I would definitely say it’s both. I mean, it’s absolutely both. Right. Does seeking financial planning advice help you reach your financial planning goals? Yes, as long as the advice is good. Absolutely, it will. And at the same time, it’s very clear that the people who are already motivated to reach their financial goals are the ones who are most likely to seek financial planning advice. So it’s indisputably both. And it would be really hard to split out how much it is of the one versus how much of the, uh, other.
Jonathan DeYoe: We’re going to leave it at 50 50 we’re going to leave it at a non answer. Okay, great. So I want to talk about, and you touched on this a little bit, but let’s talk about the conservative assumptions in the planning process. Now, you write, I think, very wisely about standard planning assumptions. Like we assume we just changed our assumptions from 100 to 105. We assume that, or we at least run a stress test case, that there’s going to be major health care costs. We assume, or at least we stress test a case where they get four or 5% returns instead of six or 7% returns.
Mike Piper: Right.
Jonathan DeYoe: So we do all this stuff in planning, and that has an outcome that has a causal effect on the amount they have to save and where they end up. So what do you think about how we as financial planners affect both current lifestyle and that long term? Wow, I have more than enough.
Mike Piper: Yeah, right. Absolutely. That’s both in terms of the accumulation stage and the distribution stage for both categories of people. Exactly. Those three things you have to be planning for a case where you get poor investment returns. Ah, you need to pay for a very, very long retirement, and you have huge medical expenses or other big unplanned expenses in retirement. And so that means a high savings rate during your career and, uh, a low spending rate during your retirement. And it makes sense to do that planning. It makes sense to make sure that you’re going to be okay, even if those situations arise. But the natural result of it is that for most people, if you use that very low spending rate, the spending rate that will still allow you to be okay, even if all of those outcomes occur, the natural result is that you’re not going to spend down your portfolio. And in fact, and I’m sure you’ve seen this, when you run Monte Carlo simulations or whatever, in the median outcome, the portfolio grows throughout retirement most of the time. And so not only did they not spend it down, they have more than they had the day they quit their job. And so that’s another message that I wanted to try to get across here, is that even if you don’t feel like you have more than enough right now, it’s just the natural way that things go, that enough turns into more than enough. That’s usually how it works out. Unless you get unlucky in a whole bunch of different ways, basically, and I’m.
Jonathan DeYoe: Going to repeat what you just said, because I think it’s beautifully said, in the normal natural occurrence, enough turns into more than enough. This is a stretch. So I’m admitting it’s a stretch, but, you know, Piquetti’s book, basically, on growth and wealth inequality. Growth and wealth. It’s like, that’s what he’s saying, is if you’re there soon enough, you’ll be more than there and more than there and more than there. And that’s just a natural, like, m unless we put in tax code, which you work with a lot, to sort of reduce some of that kind of stuff. How do you feel about that? I don’t want to have a political question. I’m like, what do you think about sort of the tax on wealth versus the tax on income versus the tax on cap gains, those kinds of things? Or do you take a preference? If you could build your own tax code, what would you change?
Mike Piper: Gosh. So, as a CPA, I have feelings about income tax rates and estate tax rates and thresholds and so on. But the thing without a doubt, that gets me riled up a million times more is the complexity, because it’s a tax on everybody, that no matter where your income level, you have to deal with our tax code, which is, um, a horrible mess. And, uh, in economics, we would call it a dead weight loss. Right. The time that you spend filling out your 1040 or paying somebody else to fill out your 1040, nothing really good comes of that. Like, if it was just simpler, that would be better for everybody. And all the people who work as accountants could be engineers or whatever else they would want to be, and it would just be better. And instead we have this mess. And so when I see new pieces of legislation, tax legislation, that increase the tax on a particular group or decrease the tax on another group, if you want to increase somebody’s taxes, instead of creating a new tax, we could eliminate a deduction or eliminate a credit. We could do something that would remove complexity instead of adding complexity. But most tax legislation does the opposite. We just bundle, just pile more complexity on top of itself. And so I know I’m dodging the question here, but to me, this is the thing that gets me much more riled up, is that both parties just are constantly adding complexity. And when they want to reduce somebody’s taxes, instead of just lowering the tax rate, they create new deductions and credits. And when they want to increase somebody’s taxes, instead of removing, ah, a deduction, they add a new tax. We add the net investment income tax or the Medicare sur tax or whatever. And it’s more and more and more and more. It just gets worse and worse.
Jonathan DeYoe: How many pages isn’t the tax code? I don’t actually know, but it’s like thousands and thousands and thousands of pages. Tax code. It’s insane.
Mike Piper: I’m sure it is. I wouldn’t have any idea, but I’m sure it’s massive.
Jonathan DeYoe: So is that an argument? And I don’t want this to be political, but there’s no way for me to make it non political. Is that an argument for flat tax?
Mike Piper: I don’t think that it necessarily is. I mean, you can have a tax code that’s super progressive and still very simple. Uh, if there weren’t deductions, if there weren’t credits, you could have 15 tax brackets going up to whatever tax rate you want. And that would be way more infinitely simpler than what we have now. And it could be as progressive or non progressive as you want it to be.
Jonathan DeYoe: And because it is kind of tax season, I’ve read a couple of articles about how one of the reasons that it will never, ever happen is because of the lobbying done by the tax preparation software people who want it complex so that you have to go to them like the bigger.
Mike Piper: Yeah.
Jonathan DeYoe: Into it h and r blocking company. Right. These kind of companies.
Mike Piper: Mhm. They spend a lot of money lobbying for complexity.
Jonathan DeYoe: It’s ridiculous. It’s infuriating, really. My taxes were so much easier long, long time ago, but it’s hours and hours and hours for me, and I pay hours and hours and hours for a CPA to look at stuff. And once you have some income from multiple states, then you got it. Oh my God. It gets to be pretty crazy. So I totally understand it. So who specifically did you write more than enough for? Was there an intended audience? And do you think that audience is big, or were you expecting 100 copies to sell or 1000 copies to sell? What’s your expectation when you write a book?
Mike Piper: So for this book, is the intended audience big? Yes. Is it still a minority of the population? It’s less than half, absolutely. But it’s still, uh, a huge number of people. Just because, as we talked about, it’s the natural way of things where even if you don’t have to do anything extraordinary. Right. If you do the smart things and then you don’t get unlucky, you’ll eventually have more than enough. That’s what’s going to happen. And so the number of people, I don’t know exactly, because there’s no way to. You can’t even put a number, a net worth number on it because it just depends entirely on how much a person wants to spend. Right. Sorry.
Jonathan DeYoe: That’s okay. So I’m debating whether to get into some of these different chapters. So chapters eleven through 16, you actually give us tax strategies. I kind of don’t want to touch on those. I want people to read the book, and they’re sort of too specific. But chapter 17, let’s see here. What was chapter 17? Have a note that chapter 17 was one of the chapters that I thought was like, oh, it’s the simple plan. It’s the putting it all together piece. I read 17, and I was like, everyone should read this. That ten, eight, nine pages is the value of the whole book. It’s like, do this, do this. There’s three questions and two questions. You answer these three questions, you answer these two questions, and you’re done. That’s really all you need to think about once you get to this space. Such a beautiful chap. I loved it. Why summarize it all really simply when you’ve just made it all? You just put it all out there and you’ve already kind of written about it and stuff, and then you kind of say, boom, a little nugget.
Mike Piper: Yeah, I mean, that’s my general method of operation when writing books, is that taxes are complicated, and any normal human being is not going to fully grasp and retain the information on the first time through. So here’s how it works in detail. And then let’s just summarize the key points as succinctly as I can, is my general way of doing things. So that’s pretty much just another instance of doing the same thing I always do.
Jonathan DeYoe: So you’ve written, um, I want to sort of broaden it out here. You’ve written on all kinds of topics in actual books. You’ve also written on all kinds of topics at oblivious investor. And a lot of what you say in terms of looking at your own finances is to ignore this kind of noise that’s happening around. I think that noise creates a lot of anxiety, and it sort of pulls people, I mean, literally sucks people in to where they can’t escape. So how do you counsel, coach, support, help people to ignore the noise? Like, what is this? And now that you’re back and working one on one with people, how do you say, listen, I know that’s your news source. Just ignore this part of it. How do you get them to not watch it?
Mike Piper: Yeah, I don’t honestly talk that much about information intake. I do think that there are things that you can do specifically with your finances that will make it the simpler your portfolio is. Uh, if you have individual stocks, for instance, you can’t help but watch the news about those companies. Uh, if your stock portfolio is a vanguard total international stock index fund and a vanguard total stock market index fund, then you really don’t care about what any one given company is doing. It doesn’t matter to you at all in any material way, and so it allows you to just not worry about many parts of the news at least. You still, of course, need the stock market to perform well enough for your plan to work. So to me, that’s one piece of it is simplifying the portfolio. And on my blog, I talk about this all the time, that I’m actually a big, big fan of target date funds. I know people don’t like them, and they’re emphatically not a good fit for a taxable account because they’re really tax inefficient for an assortment of reasons. But for a IRA, are they exactly the asset allocation that is probably perfect for somebody? Probably not. They’re probably not, but they go a long way towards reducing the mistakes that people make. Morningstar’s got great data on this, showing that the gap between the investor performance and the fund’s performance is much lower for balanced funds and target date funds, because people do. Exactly. They just buy the fund and then they ignore it. Because that’s the whole point.
Jonathan DeYoe: So is it? I want to be specific, and maybe this is too much, but for listeners, but I want to be specific because the reasons you like target date funds are reasons I like picking your 80 20 or your 60 40 or your 50 50. But I don’t like target date because I don’t like the ratcheting down of risk, and I don’t like the transactions, and I think they’re more expensive and I think so there’s a few reasons I don’t like target date funds, and I would prefer choosing the right balanced portfolio. Whether that’s. Again, I’m not saying balanced 60 40. Maybe 80 20 is your thing, or, ah, maybe 28 is your thing. I’m not picking the one. Do you have a preference? If you have to choose between target date and just static allocation, would you prefer one or the other, or do you actually prefer the target date?
Mike Piper: For my own portfolio, I use a static allocation fund. I use a vanguard 80 20 life strategy fund. So I will say that all else being given the choice of both. So in an IRA, I’m more a fan of the static allocation, but if you’ve got your 401K, they don’t offer that they have a target date fund. I feel no qualms about telling most people that, yes, a low cost target date fund is a good choice.
Jonathan DeYoe: Yeah, absolutely. Okay. Yeah, maybe you get this question, too. I routinely get the question. Specifically, people who have more than enough, they ask the question, Jonathan, should I ratchet down my risk as I get older? And I tell them, absolutely. A, uh, you have enough, you don’t need to do that. And this is like an endowment for your family or for whatever charities you want to give it to. There’s no reason to ratchet down. That’s. So I have a sort of a knee jerk reaction to anyone that says, yeah, target date fund, but for the reasons you’re saying, I’m all for it. I also think static is better if you have access, but in their four hundred and one k, you don’t. So I think we’re actually on the same page. That was something I was going to sort of pick apart and talk to you about, but you sort of diffused it, which is beautiful, well done.
Mike Piper: Sure.
Jonathan DeYoe: There’s a ton of noise out there, as you know, and we’re trying to ignore the noise. So if there’s a couple of questions I ask everyone that comes on first, one is, what is one thing that someone in the audience can focus on today, do today, active today? A thing that they can do that will improve their long term financial personal success?
Mike Piper: The thing that I’m always going to say is what we’ve been talking about, I’m a big believer in simplicity, and it doesn’t need to go necessarily all the way to a single fund portfolio, but especially for anybody doing this diY, right? So they’re not paying an advisor or a robo advisor to rebalance the portfolio. If you’ve got ten different mutual funds, it’s so tempting, so tempting to shift this way a little bit that way all the time, because, oh, this one hasn’t been doing so great. Or let’s get rid of this one, let’s add this new one. There’s so much temptation. And if you just have this boring, super boring three fund portfolio or even two funds, Vanguard Total world stock, ETF and a bond fund, it just removes so much of that temptation because you know that you just are investing in all of the stocks and some bonds, and it’s just so boring that it removes a lot of the behavioral mistakes that people make.
Jonathan DeYoe: I would add to that. So I think you get the same outcomes. I think you get the same or better outcomes. And I think that by removing that temptation and fear component, you actually improve people’s non financial lives. I think people’s non financial lives are better when they have a simple, simple portfolio.
Mike Piper: Emphatically agree.
Jonathan DeYoe: Love it.
Mike Piper: Yeah, absolutely agree.
Jonathan DeYoe: So the second question is just flip it. What is one thing that everyone’s told that they should think about and focus on and do that they should not? Like, there’s a lot of crap out there. Just diffuse one issue that we’re told say, no, don’t do that.
Mike Piper: Gosh. I mean, anytime you hear anything about the Fed and where interest rates are going to go next, if you can’t time the stock market, timing the bond market is even harder. Right. And you can see that. And actively managed bond fund returns, they don’t beat the index funds. And just anytime somebody’s talking about that, you might care from a political point of view, sure. As far as what you think is good for our economy, but your personal finances shouldn’t have anything to do with what you’re hearing in the news about that sort of thing. That for me is just. I don’t know. And it’s maybe strange to pick on that one topic because really it’s all of this stuff. It’s all about whatever Facebook is doing and Google and all the different companies, and you shouldn’t care about any of that either. But this one thing that people are just so latched onto and thinking that it’s going to drive what they should do with their portfolio and no, you can just ignore that.
Jonathan DeYoe: It sounds like the thing that you don’t do is watch the news. Watch the financial news.
Mike Piper: Yeah, right. Exactly.
Jonathan DeYoe: The human cris in Ukraine, I’m totally worried about that. But the effect of Ukraine, Russia on the economy and the companies that I own, I don’t worry about that at.
Mike Piper: That’s exactly. Yeah.
Jonathan DeYoe: So just before you wrap, uh, I’m going to come back to the personal and you’ve been awesome. I’ve loved having this conversation. What was the last thing you changed your mind about?
Mike Piper: Just about anything in general?
Jonathan DeYoe: Yeah. Coffee versus tea, whatever. I want to see how the neural.
Mike Piper: Pathways shift for you. Made some dietary changes, but I wouldn’t even call that changing my mind about it. So that’s probably only coming to mind because you mentioned coffee versus tea. That’s a good question. That’s a really good question. And I’m struggling to come up with the last thing I’ve changed my mind about. One thing that I don’t know if I’ll say it changed my mind because I didn’t have a formed opinion on the topic, but I don’t know if you’re familiar with Huberman lab podcast. He’s a professor of neuroscience at Stanford, I think. And he has a saying that it’s really difficult to. It’s hard to control your mind with your mind. And so the thing he always talks about, and I think this is great, is that if you’re having trouble sleeping, it’s 03:00 a.m. And you can’t fall asleep. You can’t just choose to fall asleep. Like, the, uh, things that will help you sleep better are getting better exercise during the day, being outside, better diet, not watching television or looking at your computer right before bed. And people who are dealing with depression, you can’t just choose not to be depressed. That doesn’t work. But again, better exercise, good sleep, like, the inputs you provide your body, are really useful for controlling your mind and your state of mind. And I don’t want to say that I changed my mind about that because that’s way beyond, way deeper than I’m usually, uh, frankly, even thinking. But that message has been really on my mind a lot lately, and it’s been influencing a lot of the things that I do and think about.
Jonathan DeYoe: You change some of your behaviors because of new research. Right. You got to go change. That’s changing your mind, and you got to change your mind to change your behavior. For sure.
Mike Piper: Sure. Yeah.
Jonathan DeYoe: And I want to ask you the old kinder question. So, if you knew you had 24 hours, what would you do with those 24 hours?
Mike Piper: What would I do with those 24 hours? So, I’ve heard this question two ways. What would you do with those 24.
Jonathan DeYoe: Hours, and how does it make you feel? Yeah, exactly.
Mike Piper: Yeah. What I would do with those 24 hours is probably go for a walk, spend some time outside. Basically, I would go to the climbing gym because that is my favorite thing in the world to do is climbing. And there’s no rock close enough to St. Louis to actually get outside on actual rock. And I would probably make a lot of phone calls to everybody. Yeah.
Jonathan DeYoe: Uh, relationships, a joyful activity outdoors, 24 hours, I think. Would you sleep?
Mike Piper: That’s a great. I’ve never actually thought about that. I could see not sleeping, but I could also. I don’t know, I might take a nap.
Jonathan DeYoe: A lovely know. Just have a nap.
Mike Piper: Yeah.
Jonathan DeYoe: So the last thing I do is I want you to tell people how that folks can connect with you. How do they find you?
Mike Piper: Sure. Oblivious investor, the blog. My email is email@example.com. You’re always welcome to email me. You can find me on Twitter. Michael R. Piper, but email is the best way. If you actually have a question, you know my input on or just follow the blog.
Jonathan DeYoe: Great Mike, thank you so much for coming on. Everything’s going to be in the show notes, all the links to where people can find you and everything. But I really appreciate your time. It’s very strange because I feel like I’m a very successful guy. I’m 51, but I was nervous when I reached out to you because I really do think of you as one of the ogs in the financial services space and I never knew how old you were. I always saw the pictures and thought you looked really young.
Mike Piper: Mhm.
Jonathan DeYoe: But I didn’t know you were, whatever, 13 years younger than I am. But I appreciate everything you write about and everyone should follow you and read your books. So thank you very much for your time.
Mike Piper: Thank you. It’s been a pleasure speaking with you. Thanks for the invitation.
Jonathan DeYoe: Absolutely.