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089: Spencer Sherman – Growing Outer Riches from Inner Wealth

Spencer Sherman is a financial advisor and the Founder and former CEO of Abacus, a values- driven financial planning firm in Northern California. He’s known for his mindfulness-based approach to money. He’s the author of The Cure for Money Madness , and he’s a proponent of this idea that our formal training and expertise in finance take a backseat to emotional intelligence, which enables us to make better choices rooted in balance, kindness, compassion and joy.

Today, Spencer joins the show to discuss his mindfulness-based approach to money, his meditative practices and his thoughts on the ever-changing financial industry.

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Key Takeaways

00:52 – Jonathan introduces today’s guest, Spencer Sherman, who joins the show to discuss what he learned about money growing up in Queens

07:44 – Fixed money beliefs that held Spencer back

14:07 – Why Spencer named his company, Abacus

16:24 – How meditation and silent retreats have made Spencer a better financial advisor

23:34 – Getting started with meditation

25:10 – How the financial industry has changed over the years

35:57 – Spencer shares his concern with ‘abundance mindset’

42:55 – One thing we can do to increase personal and financial success and one thing to completely ignore

46:51 – One thing Spencer would like others to know about him

49:12 – Jonathan thanks Spencer for joining the show and lets listeners know where to connect with him

Tweetable Quotes

“Growing up, I thought [money] was paramount. And, of course, it led me to do some very unhealthy behavior like becoming this incredible workaholic in my early twenties. I sort of sacrificed my well-being, and those really fun years to this devotion to making money.” (08:53) (Spencer)

“I think a lot of the ideas in Buddhism really work well with how we think about money and how we plan our finances. Everything the Buddha said about not grasping for things, that generosity is the path to abundance. These kinds of messages have worked really well with being a financial advisor.” (15:06) (Spencer)

“I’m a big believer that doing something is way, way better than doing nothing. Having little successes is better than one big success.” (20:10) (Spencer)

“I think there’s a lot more awareness of the need for a financial advisor, of the need for objectivity.” (25:23) (Spencer)

“I think one of the most amazing things about having wealth is this ability to impact the world with your wealth.” (40:20) (Spencer)

Guest Resources

Spencer’s Website

Free Tools from Spencer

Spencer’s Book

Spencer’s LinkedIn

Spencer’s Instagram

Spencer’s Twitter

Spencer’s Facebook

Abacus Website Schedule a call today with Abacus to speak with a financial advisor

Mindful Money Resources

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Episode Transcription

Jonathan DeYoe: On this episode of the Mindful Money podcast, I’m chatting with Spencer Sherman. Spencer is a financial advisor and the founder and former CEO of Abacus, a values driven financial planning firm in northern California. He’s known for his mindfulness based approach to money. He does a couple silent meditations every year. He’s the author of the cure for money Madness, and he’s a proponent of this idea that our formal training and expertise in finance take a backseat to emotional intelligence, which enables us to make better choices rooted in balance, kindness, compassion, and joy. It only made sense for me to invite him on the podcast, and I’m super excited to have Spencer. Welcome, welcome, jonathan.

Spencer Sherman: I’m so happy to be know. I love this topic and I love that we have such kind of similar approaches, backgrounds, and I’m excited to see what develops from our conversation.

Jonathan DeYoe: Yeah, beautiful. So first, tell everyone where you call home and where you’re connecting from today.

Spencer Sherman: Yeah. So I spend a couple of days a week on a floating home in Sausalito, and then the rest of the week I’m in Sebastopal, where it’s, uh, this reverse commute, but that’s where my office is. We’ve got this bank building with 27 foot ceilings. Uh, so I actually love being in Sebastopol as I love being with my employees. So that’s where I am right now.

Jonathan DeYoe: Very cool. Where’d you grow up?

Spencer Sherman: I grew up in New York City, in Queens. New York City. And I like to say that I was always embarrassed to say I was from Queens, but a few years ago, lonely Planet rated it the number one tourist destination in the world. And I’m thinking, wow, it’s like, because it’s so international, and it’s gotten even more international with cuisine, and museums have moved in because I can’t afford the rent in Manhattan. Yeah. So it seemed like a boring place to me where I grew up. I always wanted to be from Manhattan, but that’s where the rich people grew. Know? That was not my.

Jonathan DeYoe: Well, and I see some gray hair in your head, like, the gray hair in my beard. And I’m assuming that was a while.

Spencer Sherman: Yes, yes, that was a while ago. Yes. I mean, that was way before the Internet.

Jonathan DeYoe: I’m, um, curious, what did you learn about money growing up in Queens?

Spencer Sherman: That’s a great know. I think that’s the kind of question everybody who’s listening should answer. What did you learn growing up about money in Queens? I learned that rich people had it, and there was something mysterious about having money and something, uh, absolutely wonderful about having. Like, I just thought that those people that lived in Manhattan were just six steps above us. They lived a charmed life. They didn’t have as many afflictions in their life. Life was easy. They didn’t have to go into a supermarket and tell their kids, no, we can’t afford that. Or we got to shop at this store instead of this store, or we don’t have to look. Spend an hour looking for a parking space the way my father did when we’d go into Manhattan. We could just get a parking space in a garage and go to the museum and take advantage of the sites. So I just felt like life was so much simpler and easier, having more money. And I fantasized about that, about living in one of the houses. There were some houses where we live. We lived in a building, but I also fantasized about growing up in Manhattan. I mean, that’s where the rich people are, the sophisticated people are. I wanted to be like one of them. And so I think the other thing about money was that it’s difficult to get. I mean, that’s the other message I really got from my father, from his business. It takes a lot of work. It’s a struggle, and we’re, like, maybe getting closer, but we’re not there. So those were sort of some of the messages I grew up with. And, of course, this idea that, wow, money just seems to pervade everything. I mean, money seemed to have a lot to do with a lot of decisions my parents made.

Jonathan DeYoe: I like your word pervade. I use the word infect. I think that’s money infects everything. Pervades everything. I think that’s true. I think we have a very similar background. A little bit of lack in there, a little bit of sort of liking what our friends or peers or someone we could see had that. We couldn’t have those kinds of things. I think I had that same experience. Can you point to a couple really specific experiences? I was out with my mom. She said no to this, that you remember that sort of formed a foundation for you.

Spencer Sherman: Yeah. Well, I mean, the one was, this happens many, many times about this circulating for a parking spot in New York City. And I remember one day visiting, we were supposed to visit the Museum of Natural History, and I was really excited about it. It was like I had to also visit it for a school project. And it was third grade, and we were spending, it seemed to me, like, hours. It was probably just an hour circulating around the city looking for that prize spot where we wouldn’t have to pay any money. And we finally found a spot, but we gave up all that time, and that was m just so. I felt so compressed, I would say so small from that. It felt so, I don’t know, kind of stingy in a way. Like, we had to be so careful. And then I remember going clothes shopping with my mother, and that’s who I always went clothes shopping with. And she would say to me, if you want to get that jacket, it was called the mighty Mac jacket with a certain brand was really warm and better made, and it’s what some of my friends had, the richer friends had. She said, if you want a mighty Mac, you’re going to have to talk to your father about it. I don’t have that kind of power to buy the mighty Mac for you. She was the homemaker, and she didn’t feel like she had the power to make that decision, and that felt sad to me. And it also felt like she was kind of, like, letting me fend for myself, and I wanted her to take care of me when I was that young. Um, so it had several different messages, but also that the person with the money has the power.

Jonathan DeYoe: I’m curious, did you feel that sadness in that moment? Did you note it, or is this something that you’ve revisited this in your memory?

Spencer Sherman: I did feel the sadness in that moment. Well, I felt sad. I also felt scared, because the idea of I felt sad that I couldn’t get the jacket. I felt sad that my mother just couldn’t say yes. I also felt scared because I knew if I went to my father, he would likely say no, and it would be a brutal no. It’d be a no with, like, what?

Jonathan DeYoe: Are you crazy? Yeah.

Spencer Sherman: Ah. Aren’t you aware of what things cost and how that could bankrupt us? And are you stupid or something? He might say something like that. So that would be even worse than just the no from my mother.

Jonathan DeYoe: Yeah. Well, it’s very intuitive of a child to note that. I think the same thing happened to me, but I was like, damn it, I want the jacket. Uh, I didn’t have the same sort of emotional experience, so that’s. Kudos. I want to kind of go back to the beginning of the career before abacus, before the book, before the fire. You had mentioned somewhere in your writing, or maybe in a conversation, that you had some fixed money beliefs that were sort of holding you back, limiting your freedom and success. Can you kind of just touch on some of those fixed beliefs?

Spencer Sherman: Yeah. I mean, I think this belief that I think you’re hearing in these stories is money is everything. Money is more important than everything. And I think about that belief today, and it sounds so ridiculous, but for the ten year old or the 20 year old, I could so understand how he was so convinced that that was so true, because that was the messaging I was getting all along growing up. I mean, of course, we know today. Nobody would say, I hope, I pray that nobody would say that money is more important than anything. I mean, how could that be? How could it be more important than your ability to take a breath or your heartbeat or your brain. Nobody would give away their brain for a, uh, trillion dollars. So there’s got to be way more important things. But growing up, I thought that was paramount. And of course, it led me to do some very unwise, unhealthy behavior, like become this incredible Workaholic in my early twenty s and sort of sacrifice my well being, sacrifice those really fun years to just this devotion to making money. And I now believe that, ironically, I think one is poised to earn less money. When you go at it so blindly like that and you don’t care for yourself at all, you get diminishing returns. Like, we all know, right? When you keep working and working, you do a put in a 1214 hours day. You don’t necessarily get 14 hours of productivity from that.

Jonathan DeYoe: You can only do that if you’re lucky, because you get sick, you get unhealthy, you die. All that kind of stuff sort of cuts life short.

Spencer Sherman: Yeah, I was messing with my mean, you know, sleep was not regarded in my family. And it’s funny, know, we have this professor, UC Berkeley, I think his name is Walker. Who’s that? Or is that my walker?

Jonathan DeYoe: Yep, I know who you, uh, totally, yeah, yeah.

Spencer Sherman: You know, and I’m very grateful to him because he makes this priority of sleep. And sleep was not value to my family. It was about productivity and money. Those were things. And it was coming from my parents were coming from this place of survival, from their past. I mean, there was, um, their depressionary parents, their ancestors going through the holocaust. All of that led them to feel like money is your path out. It’s your path to survival, it’s your path to safety. Money can protect you.

Jonathan DeYoe: There’s something you said a minute ago, that’s the idea that no one would trade their brain for a trillion dollars. And I think that comes from the ability to bring that question to your frontal cortex. And I think so many of us live in our amygdalas, live in the fight or flight, live in the. What do I need to survive right now? So I think there’s still. I doubt, I wish you were right, but I don’t think it’s true that there weren’t people out there that would say money is the most important thing. I think there’s a lot of people out there that still feel that way, but that’s because we’re stuck in that amygdala brain.

Spencer Sherman: I think it’s a really good distinction. Yeah. That we are that in a moment of fight flight, we might give up our lives to do something really crazy, right? I guess I hope that, uh, in a reflective, calm moment, nobody would say, oh, yeah, I would sell my brain. If someone paid me a billion or 2 billion, I would sell it, definitely. I’d sell it for as long as I get a replacement of some kind.

Jonathan DeYoe: Let’s play this through for a second. This is going to be a crazy question. So if I had the opportunity to sell my brain for a billion dollars, but I could set up all the trusts and things for my family for generations, would I do it? Would I sacrifice myself, my brain for the greater good of my extended family forever?

Spencer Sherman: M mhm.

Jonathan DeYoe: That takes it out of the amygdala, brings it, the frontal cortex brings in some planning questions. I don’t think I would, but I’d think about it. I would think about it.

Spencer Sherman: Yeah. Well, you’re bringing in also other people as well, because there’s some benefit there in getting that billion dollars because you can leave it to others and community. I think there are some people that would definitely sacrifice themselves. But let’s make the example like that. You take on a new health challenge that’s not necessarily life threatening, but it’s challenging. Like many doctor visits. How much money would it take you to take on that new health challenge? I would bet most of us wouldn’t want that new health challenge for somewhat large amount of money. But maybe I’m wrong about that.

Jonathan DeYoe: I think you’re coming from a place of having enough.

Spencer Sherman: Yeah, maybe. But, uh, if you don’t have enough, that’s a good point. If you don’t have enough, maybe you would feel like money is everything. And that’s where my parents were. They didn’t feel like they had enough and they were coming from that place. So it’s like you’re helping me see my parents in a new way, in a much more positive way, because I have this sense that they were so mixed up, uh, but they were really coming from their own conditioning. Of course, I think depending on one’s conditioning, one might sacrifice, uh, for the sake of money. I think the other part of this is the way we undervalue our inner resources, uh, including our brain power. And that there’s this sense that, oh, yes, I need to make all this money or I need to get all this money. But we don’t realize that we have this power within. We have the power within to actually earn that money if that’s meant to be for us. But we sort of diminish our own inner gifts for sure, I think, and put a lot of focus on those people that have money, and we kind of look at them like they have everything.

Jonathan DeYoe: Yeah, this just popped into my head. We’ve sort of been tangentially talking for a number of years, and I’ve always wanted to ask you this question. This is out of nowhere, and I apologize for the non sequitur. Why’d you name it abacus? It doesn’t conjure mindfulness for me. It conjures difficult calculating device.

Spencer Sherman: That’s great. Yeah. The abacus has been around for a long time, and it’s held up and it still functions. It doesn’t break down so easily. And there was something about that folded in well with our investment strategy that it holds up over time. It’s a simple strategy that we use for investing in financial advising and the abacus, especially when we name the company the Internet and technology. There were more glitches with technology than there are, and there still are glitches, but the abacus is something you can always count on. If you know how to use it, you can always count on. And then it also has this. It’s from the east and eastern philosophy to me, as I think it’s the same for you. And I think a lot of the eastern philosophy comes from Buddhism. I think a lot of the ideas in Buddhism really work well with how we think about money, how we plan our finances. Just everything the Buddha said about not grasping for things, that generosity is the path to abundance. These kinds of messages have worked really well with being a financial advisor.

Jonathan DeYoe: Oh, for sure. I totally agree. As you were talking, I was imagining sitting in front of my Microsoft Dos computer, and you remember the blue screen of death just basically said, this thing doesn’t work. But would the person who had that ever go, oh, let me get my mabacus now and calculate this. It may be youthful and great, but, wow. Complicated.

Spencer Sherman: Yeah, it’s complicated. We didn’t so much focus on the complexity of it. We focused more on that. And it’s not complicated for those who really learn it well, who grew up with that culture, but we focused on the longevity of it and the eastern nature of it. That seemed to be a good symbol. I think the other thing that came up for us at that time, this dates us, is that it’s at the beginning of the Alphabet, and we thought people would notice it more in the yellow pages or something like that. It really dates me.

Jonathan DeYoe: Ab smart. That’s kind of smart. So how has the dedication to meditation and specifically going to a few silent retreats every year. How has that made you a better advisor, better person?

Spencer Sherman: Think what my meditation practice and going to silent treats, what all that has done for me is recognize that getting curious is one of the best things I can do for myself, because that’s really what happens on a meditation retreat, is you’re getting curious. You’re trying to bring a non judgmental attention to every moment that’s occurring. And mostly we bring judgmental attention to ourselves, to others. And on a meditation retreat, or if you’re practicing, uh, I liked the idea of practicing all the time and not just doing it on the cushion or on retreat, is to bring non judgmental attention in every moment. And I think that is the kind of foundation for curiosity, getting curious about what’s arising. What’s arising? And getting curious about with a client about, oh, so you want to own a second home. I’m really curious about that. But bringing that curiosity in a non judgmental way, because that’s not what the client wants. They don’t want my values, they want my information, my background. They want me to ask provoking questions. What do you think the risks are of having a second home? Or what do you think the upsides are of having a second home for you? And yeah, maybe I’ll share some of the upsides and downsides that the other clients have had with owning a second home, but I’m trying to do it in a way where I’m not imposing my values on the client. And I find that is transformative because the client ends up getting that I’m empowering them to. I, uh, see them as the holder of the wisdom that they know themselves way better than I do. And if I can get a client to figure out the answer, they’re going to love me much more. Even if I don’t say anything during the meeting, they’re going to think much more highly of me if they come to the answer. I mean, it’s sort of like if you’re a fitness coach, if you can get someone to say, yeah, I do want to do 20 push ups every day, rather than you telling them to do the 20 push ups if they say it, if the client says, yeah, I do need to start saving money in my four hundred and one k plan, that’s going to be much more sustainable if they come, um, to conclusion. Right. And so one of the things that has happened is I feel like meditation has sort of given me this way of helping people come to their own conclusions.

Jonathan DeYoe: Yeah. So I’m curious, do you recommend or provide a space for teaching clients how to meditate.

Spencer Sherman: So we just started offering. We did a couple of sessions that were six weeks in a row, and we’re going to be offering another six week session of, um, meditations. They were 15 minutes meditations, and they dealt with everything from money, anxiety, to cultivating a sense of enough to what’s your vision for the next three months, six months, year for your life, for your finances? So, yeah, we found that very helpful. And they were well attended by our clients. Yeah.

Jonathan DeYoe: Very neat. Very neat. I’ve imagined doing it. I’ve never done it. So that’s something that you’ve now inspired me a little bit. How about the team as a percentage? Like how many of your teammates or team members are meditators?

Spencer Sherman: Okay, so that’s what I did right before I got on with you, is right before the top of the hour. Every morning I do a meditation for all of abacus, and it’s just five minutes, because that’s my sense of what people can like doing. I’m a big believer in doing something is way, way better than nothing. Having little success is better than one big success. So we typically have, I don’t know how many. On average, there’ll be four people, five people a day. So maybe there’s probably about ten or twelve people that might show up over a month out of 75 people. So what’s that, 15% of us? Uh, I think the percentage is probably higher that do meditation. So some people have come to the five minute meditation and then they really want something longer, so they don’t come anymore, but it’s led to them to take up their own practice. So I’m going to guess maybe 20% of the company has some kind of a practice.

Jonathan DeYoe: Do you have any idea what the. This doesn’t even matter at all, but do you have any idea what the statistics of the number of people in the country as a percentage meditate? I don’t know. I have no clue.

Spencer Sherman: I don’t know. But I also like to broaden the definition of what it means to meditate. And I also feel that just sitting down with a cup of coffee and just really tasting the coffee and letting yourself settle and letting the mind just be in a more simple place is a form of meditation.

Jonathan DeYoe: I just want people to know it’s not just drinking a cup of coffee, that’s not meditation, but it’s actually settling with the coffee and letting the mind settle with the coffee and actually tasting the coffee that’s not coffee. And reading the New York Times that’s not right.

Spencer Sherman: Right. It’s really being like, just having a cup of coffee and looking at the birds out your window and getting curious about what’s happening with the birds. Getting curious about how the sky is changing while you’re drinking that cup of coffee. Getting curious about how the cup of coffee, how the taste is changing, how the temperature is changing as you’re drinking, uh, it. All of that can be a meditation. And I also love to say that one of the things that you can do for yourself, because a lot of people have some kind of disdain, I mean, I think including myself at times for the actual meditation practice, like, the whole idea of sitting down or in a chair or let alone a cushion, and being silent for 20 or 30 minutes sounds kind of crazy. So there’s a lot of alternative practices, like the one we just described with the cup of coffee. But you can also. I love the idea that it’s not polite if you interrupt somebody else. Totally polite. And I encourage you to interrupt your trains of thought. So when you’re noticing yourself going off, as I have done many, many times growing up in that family, I had so many fantasies about winning the lottery. As you notice yourself go off into a fantasy. What it’s also called in the neuroscience world, rumination, which they’ve determined is not healthy for us at all, is interrupt the rumination. As you’re in a conversation with someone and you notice your mind is going off to some other place. Interrupt and just take a breath and see if you can come back to what’s happening at the moment. You can say, as a meditation practice, you can do it right in your daily life. You’re driving and your mind is going off into all kinds of directions. Come back to the driving.

Jonathan DeYoe: I think that you’re pointing to this idea that there’s probably as many meditation practices as there are people. There’s so many ways to bring focus and calm and bring in compassion, and so many ways to do this, and people just need to find the one that works for them. What do you recommend people start with?

Spencer Sherman: I mean, I would start with something that works for you, something that you enjoy and keep it simple and short. I like the idea of stringing together many successes, because I think the benefits snowball with this kind of practice. I love the phrase tuning out the noise. If you can just tune out the noise, which is the external noise for a little bit, the internal noise of that chatter in the mind, which, like, oh, wow, I shouldn’t have sent that email. I shouldn’t have made that investment or whatever that noise is, if you could just calm that down and just feel your feet on the floor, feel the experience. Sense the experience of the inhale and exhale. What happens on the inhale and exhale. Getting curious about your own body doing that for a couple of minutes a day, doing that at a red light, it’s like looking forward. Like just the other day, I was thinking, wow, this is great at red light, because I get to just practice here. It’s like, instead of being resentful that it’s taking longer, use those opportunities for practice.

Jonathan DeYoe: I love the meditation at the red light because you can sit there, you can meditate with your foot on the brake, and the person behind you will always remind you when it turns green, you don’t have to pay attention, and you can say, thank you. You can be appreciative of that, right.

Spencer Sherman: You can say, oh, people keep us in line. That’s right.

Jonathan DeYoe: So I want to talk about being a financial advisor. I m know that you’ve done it for, I think, coming on three decades, maybe a little bit more.

Spencer Sherman: Yes.

Jonathan DeYoe: How has it changed?

Spencer Sherman: Someone just asked me this at Abacus. How has it changed? I think there’s a lot more awareness of the need for a, uh, financial advisor, of the need for objectivity. I think that’s one thing. And I think just like with the whole financial industry, it used to be 50 years ago, it was only really the super wealthy that had access to the financial industry. I mean, with the advent of mutual funds and lowering minimums and all of that, more people were able to have access. And I think more and more people are aware of the potential benefits of having that objective advisor, that ally in their lives, who can be a sounding board, a thought partner for them.

Jonathan DeYoe: Go back to when you first started. What was the job, when you had your first job in financial services?

Spencer Sherman: Well, then it was, I started out working for a brokerage firm. And then I asked them if I could start doing financial plans, and they said no. So I said, could I do it on my own? And they said yes to that. They said, if you want to charge people and, um, you can keep the money and do it outside of work, that’s fine, but we don’t want to do any financial planning. So the industry has changed in that way that I think everybody recognizes that there’s value in thinking through how you’re going to go about your life with your finances. And I think it’s a little tricky because just a lot of people just sort of do financial planning in this generic way. And there might not be a lot of value in that. If you just kind of run some numbers through a software program and spit out something and show the client there may or may not be a lot of value. But to me, financial planning is about thinking through the pros and cons of different options, looking at different options and thinking through the different what if you spend more? What if you spend less? Let’s look at both scenarios so you know in advance the potential repercussions of how you’re living your life. I think that’s when financial planning starts to get a lot more interesting, like, well, let’s just see what happens if you don’t buy that home. What if you rent? Let’s see what it looks like. This increased awareness about the potential benefits of planning. I’d like to say there’s more awareness. I think index funds have certainly grown immensely. So I think there’s more awareness that you can do quite well just by keeping it very simple. And I have always said no. Maybe you’ll challenge me on this, Jonathan, but I’ve often said that this is the only field where a beginner can do very well. And I can’t find another field in life where you can do well. Like I can’t be a really good chess player starting today, I can’t be a really good surgeon or lawyer today. You would never hire me, but I always say that I would take novice, someone who’s never invested before. I take that person, I’d hire that person to be my investment person over even somebody really seasoned in many cases, because I think the person who knows nothing is just going to follow one or two simple rules, which is don’t react to the ups and downs, just stay invested, just stay committed to the markets. And that has proven to be, there’s no guarantee, of course, can’t guarantee anything here, but over the past hundred years, you did very well if you kept it very simple. While all the sophisticated people were moving money around and saying, yeah, I think Europe is going to do better next year, let’s move money to Europe. From the, uh.

Jonathan DeYoe: Actually, I’m not sure about the hiring of the person without experience, but the idea of keeping it simple is far better. My book was published in September. That is exactly what it is in the book. That is precisely the message. Buy a global index and stop overthinking this.

Spencer Sherman: Here’s an area of your life where you can basically get an a without any effort. You’re not going to get an a plus. There’s no way you’re going to get an a plus with this idea, because to get an a plus, I believe you have to be extremely lucky to get an a plus to hit the lights out, because with a strategy that’s spread out, diversified. Yeah, some things are not going to do so well in any given year, but it’s an easy way. And no one has ever challenged me on this. Like, no one’s ever said, wait a second, there’s another field where you can do very well. On the first day, somebody said to me, well, pickleball, that’s a pretty easy sport to learn. I said, still, if you’re a beginner, someone who’s, like, not, never played tennis and just enters pickleball, they’re not going to be very good at pickleball.

Jonathan DeYoe: Do you think the thing that clients are looking for has changed as well?

Spencer Sherman: I think so. I think they want more of that person who can collaborate with them. I think because clients feel, I think, are more sophisticated today. They don’t want someone who’s going to lecture at, uh, them. They want someone who’s going to be able to say, hey, I worked with ten other people in your situation. Here’s what happened with them. Here’s why doing that kind of estate planning strategy, or here’s why buying that kind of second home worked for them or didn’t work for them. I think that kind of feedback is something really appreciated today by clients.

Jonathan DeYoe: Context and perspective.

Spencer Sherman: Yes. And that’s what’s priceless. That’s why a lot of people had fears that the human financial advisor was going to go away and you would just have these, what, robo advisors advising you. But of course, it’s like law and other professions, and you want that human experience, because when you’re talking about money, you’re really talking about life, and you want somebody who, a warm body who can reflect back to you and just say, oh, so what I hear you saying is, x. That is invaluable. Just someone who can do that, even for me. And I know the stuff. I have my own financial advisor. When Catherine reflects back to me what I’m wanting in my life, it gets more clear. Or it, uh, know, sometimes I hear from her and, you know, that doesn’t make sense, what I just know. So it’s been very helpful having an advisor, even though I know the stuff as well as she does.

Jonathan DeYoe: Is there anything like, you’ve been doing this a long time. Is there anything that clients consistently come and they want from you that you can’t provide?

Spencer Sherman: Well, certainly I think Bernie Madoff was trying to provide an escape from know at the essence of it, that he was not saying, well, you’re going to make a ton of money from me, but he’s saying, I can protect you from the pain of the ups and downs. And I think, if anything, clients want that protection from the impermanence of life. We all want that. None of us want to get sick. We don’t want to die. We want a smooth sailing. We want our kids to just be happy and easy, and we want our investments to basically just go up. Even if they don’t go up dramatically, we want them to just go, uh, up. And we see that it’s a very maybe almost impossible thing to achieve. And I think hedge funds try to achieve it, but it’s a very slippery slope because life, by its very nature, is full of setbacks, full of wrinkles. Right. It’s just the way of things. And I think, if anything, what they want today is, how can you help me be with these ups and downs, if they are inevitable? How can I learn how to not react? Because I think you made a really good point earlier about the amygdala, that when the markets are going up, my amygdala is calm. And I understand everything you’re saying about not selling at the bottom, but when the markets go down 20, 30%, it’s a different context. Right. Then my amygdala is activated. I’m in total fear. My brain is shut down. I’m not hearing what you’re saying, that the things are going to rebound, that this is the worst time to sell. I am feeling like my life is on the line and I need to take an action. And the only action I can think of is to sell everything. So that’s, I think what we, as financial advisors, need to help clients with. Right now is the perfect time. Now, if you’re a client, you should be going to your financial advisor and saying, teach me how to live with the next downturn, because it’s going to happen. That’s a guarantee. I’m going to put out that guarantee on the show. There is going to be a downturn, uh, at some point.

Jonathan DeYoe: And if you’re a great advisor, you should be proactive in telling your clients, we’re going to have this. This is how we deal with it. Right. That is the message. You have to do it.

Spencer Sherman: Yeah. Because now is the time when your clients are on a much easier level frame of mind right now. Now is the time when you have the ability to help them learn how to be with those downturns, because it’s both a cognitive thing, but it’s also an emotional thing in a way.

Jonathan DeYoe: And this is what you talk this in the intro, we talk about emotional intelligence being the, that’s the key. Right. That’s the most important thing in a way. The increase of technology available to individuals and advisors has actually enabled advisors to bring more humanity to the conversation, to be more planning oriented, to bring mindfulness in, to become less judgmental, more non judgmental. And I think that if we look forward 15 years, the advisory space, it’s going to have to become more that way. I think eventually, right now, we probably make up less, uh, than 2% of the advisory community. Right. But 20 years from now, it’s going to be 30%. You have to have more people with the ability to be non judgmental, otherwise clients are lost.

Spencer Sherman: Yeah, non judgmental. And be able to help clients work through the emotional dynamics of the ups and downs of not just their investments, but the ups and downs of your career, of your business in life, of your work, that we all face that. And I think that’s something that clients are more and more aware of. But yeah, this is the time to retool yourself because things are sort of at relative calm right in this moment, at least with the markets, not with everything else in the world, but with the markets. It’s been somewhat of a decent year all in, all, right. For the markets, uh, the year is not over, right? But so far it’s been a decent year. And when we look at the total year of 2023, I want to talk.

Jonathan DeYoe: A little bit about money and culture. I know that, I think I read somewhere that you’re concerned a little bit about this abundance conversation, the abundance mindset. What’s wrong with that? Why is that so loaded?

Spencer Sherman: Yeah, it’s interesting. Well, I was talking with the head of the entrepreneurial center at Brown University. His name was going to come to me, perhaps, but we started talking about abundance, and he was saying that in his studies of startups, the most successful startups do not have an abundance of resources. That, um, an abundance of resources often leads to less positive outcomes. Stupidity. Yes. Too much on hand. And I think that word can connote that idea of, um, like, you just have so much resources, so much food, so many cars. I mean, I just met somebody with nine homes. I actually felt sorry for him. Nine homes. And depends how you hold the word abundance. If you hold it in an inner way, that you have an abundance of inner resources. I think that’s great. Go for that kind of abundance. But this abundance of external resources, an abundance of wealth, of material wealth, can actually lead to an overidentification with the wealth and an increased fear, because as you become dependent on the number, you feel this fear of losing it. You have to protect it, and you sense it from others, and rightly so, maybe that people start wanting your wealth. So I don’t necessarily wish that kind of life for anybody. And I think, in some ways, that many billionaires would benefit from having a little bit less, from having a more modest life, I think might add to their happiness, actually.

Jonathan DeYoe: So I don’t want to assume here, are you speaking from personal experience? And let me just. I don’t want to put you on the line. I’ll say that what you just said is exactly what I feel like. I started with very little. I was raised quite poor, and I have resources that I never imagined I would have. I always wanted. I want those resources. I want those, but I never imagined I would have what I have. And I do note in my own meditations and my own quiet time that there is a fear that creeps in, that somehow it goes away, that somehow I lose it. I’m wondering if you have that same experience.

Spencer Sherman: Yeah, there is some of that wanting to protect it, that, uh, feeling like there’s this thing in my life called wealth that is a consideration in whatever I do. It gives me options, but it’s also a consideration. It’s something to take care of, whereas there’s a certain freedom. If you got relatively nothing, you got nothing to lose. And I don’t want to be Pollyanna about it, because there’s many of us that literally don’t have enough to have food on the table. But there can be easily, like, um, just having all the options. In some ways, I think underneath it all, I think many of us recognize the beauty of simplicity, that if we could have, many of us romanticize it, but fantasize about if I could have a simpler life, well, when you start having excess financial resources, it can be trickier to have a simpler life, because suddenly you’re looking at buying a sofa or going on a vacation, and now there’s a million options instead of five m. When I was just out of college and I was making $17,000 a year, I didn’t have a lot of options for furniture. I went to the used furniture store in town, and it was very simple. And there’s some parts of that life that I missed, that simplicity.

Jonathan DeYoe: I’ve got a client who incredibly know Pulitzer prize winner. Every single time I chatted with this person, she would say, jonathan, I just want peace. I just want simplicity. I just want it easy. And it just never was like just exactly what you’re saying. It just never was. Know, you reach a certain threshold and you kind of have to stay there. Then you’re worried, and you’re worried about family, and there’s dynamics, and there’s all kinds of stuff that occurs. So true.

Spencer Sherman: Yes. I also think, hey, I think one of the most amazing things about having wealth is this ability to impact the world with your wealth, because the acquiring of more and more stuff, I mean, first of all, if anyone doesn’t know this, you can’t eat money. Uh, the money itself doesn’t really do anything. You have to do something with it. So you’re either buying furniture or planes and boats. And the more of that stuff you buy, it has an effect on us because our eyes see it all, and we start to identify with that. I don’t care how buddhist you are, you’re going to start to identify to see your value in the things. And that I don’t think is healthy for any of us. Right. So the possibility of letting go of some of this wealth through, let’s say, philanthropy, so that, a, it’s not crowding your life, but b, you’re having this major impact. I’ve seen huge benefits for clients and others from that, and there are studies on this huge happiness benefits. So in some ways, I’d say, like, I’m an advocate for people to be wealthy. But once you get to some level of wealth, now you have this bigger opportunity to be generous, because when you’re generous, the studies show you’re not just benefiting others, you’re going to be benefiting yourself, your happiness, your longevity, everything has likely to increase because of this generosity. It’s a very powerful thing to do. I mean, you think about it from the buddhist perspective, it’s a form of letting go. And the Buddhist said, letting go is a pathway to awakening, to transcendence, to mean Chuck Feeney just died. He was in San Francisco. I don’t know if you know Chuck Feeney. He created duty Free international, $8 billion he accumulated, and he gave it all away. During his lifetime, he lived on a few million dollars in San Francisco without a car, in, uh, a rented home. Kept his expenses modest, was very involved in his philanthropy. Flew all over the world to check on all the projects he was involved in. But he derived so much well being and happiness from giving away the $8 billion from not holding on to it or using it just for more and more stuff. So I think that’s a very viable path. Make a lot of money and give it away.

Jonathan DeYoe: Yeah. I don’t think there’s some people that disagree, obviously, but I think there’s some universal agreement in the benefit of that. The idea that don’t stop at success, like raise it to significance. Raise it. Do some good. Like, do something good with it. Right. There’s a ton of noise out there, and I like to ask everybody that comes on the show to make it simple. So let’s just pretend you’re sitting with a couple that needs some very basic help. What’s one thing that they can go home to do today that would lead to better personal and financial success?

Spencer Sherman: Well, for a couple, I would say that is to look at the categories, especially the categories where the discretionary categories like dining out and vacations and gifts to friends and family and, um, things like that, and health clubs and hobies and look to see are there categories where maybe one of you wants to spend a little more but the other one doesn’t need to? Like, for example, what I’ve noticed with my clients, if one spouse spends a lot on clothing, the other spouse tends to spend a lot on clothing. If the other spouse spends a lot on vacations, now the other spouse has to spend a lot on vacations to come along. And so two can live cheaper than one. I don’t know. Sometimes you can almost double those discretionary expenses. So I would say to really look at those and see if you’re both getting the same value from vacations, are you just defaulting to what the person with the higher value in that category does? So I probably look at that. I think along with this, in all those discretionary categories is to just have a conversation about what are we going to do this year? What’s a priority? Because I hear that time and time again is later in the year. Wait, I thought we were spending money on fixing up the landscaping, doing the landscaping this year, getting the garden together, and the other person’s like, no, I thought we agreed that we were going to be saving money this year. So get to an agreement about what you’re doing with your surplus dollars this year. Or if you don’t have surplus dollars, have an agreement on where you’re spending and where you’re cutting back this year.

Jonathan DeYoe: Got it. What is one thing that perhaps they’ve been told to do that’s just bad advice, something that they should stop doing that would lead to better success.

Spencer Sherman: Well, I would comparing. Know, Theodore Roosevelt said that comparison is the thief of joy. And it’s not just the thief of joy, it’s thwarts us. It has us go in a direction that isn’t even us. And to me, that’s really bad. Like, as I’ve heard this from clients, is buying a home that resembles your brother’s home, for example, just to kind of meet him, to compete with him or something. So to really see if you can tune in and if nobody was judging you, what would you do? What would you do with your vacation this year? What would you do with your home this year? What would you do with the way you bought clothes this year or anything, is to let go. Start becoming aware of when you’re comparing yourself, like, how much money you make. This year, one of my tech clients let go of, uh, her tech career. And it was not easy because it was so compelling. And she’s in the current of that river, and she’s comparing herself to everyone else, all of her friends, and wanting to be in that milieu and all that. And yet she said, when I let go of the comparison, it’s not really what I want at this point in my life. I want a much more spacious life. And she had the resources to make that decision. So comparison can keep us doing things we shouldn’t be doing, or have us do something that we have no business getting involved in, like buying a fancy home or a second home or something. So I think that’s what I’d focus on is how are you comparing yourself to others? And how would you spend, save, invest if you weren’t making comparisons?

Jonathan DeYoe: It all comes back to EQ. Everything comes back to this emotional intelligence, emotional quotient. Right. Is there anything people don’t know about you, or maybe you’ve told them and they don’t remember that you really want them to know?

Spencer Sherman: I think that if you want to get in touch with me, I, uh, think I’ve mentioned this to you. I do, um, retreats for professionals, attorneys, accountants, financial advisors, therapists, coaches. I do these one day, 24 hours retreats, one night retreats at Greenguilt sand center. And you can get in touch with me for that. I also have these free resources on my website. If you go to Spencersherman comfree, you’ll get a list of free resources from me. You can learn more about me there. I think if there’s anything, when you say that, I believe, I think I’ve been very fortunate in that, uh, my parents believed in education. I got a good education. Despite that, they didn’t have much in the way of financial resources. And I just was born with a lot of discipline, maybe. I think it was discipline, like out of fear from getting hit by my father. So I don’t know if that was good or not, but somehow I’ve arrived in fortunate circumstances. But I’d say that, Annie, that doing well with your finances, this is not rocket science. I hate to blow it for the other financial advisors out there, but I don’t think that being a financial advisor is the same as being like a neurosurgeon. It’s not that specialized. And in some ways, any of us could be great financial advisors. The only thing any of us lacks is objectivity. And that’s why I have a financial advisor. So, in essence, if there’s a friend of yours, maybe not your best friend, who you want to just use as a sounding board, that could work too, if, uh, you can’t afford a financial advisor.

Jonathan DeYoe: Yeah, I love that. I’ve often said that we’re basically glorified oil changers. There’s no special education. It’s just we do a thing that some people don’t want to do themselves.

Spencer Sherman: It’s very humbling. Right. And I think we do take away a lot of stress from people. We have them do things that they don’t do on their own. But at the end of the day, it’s nothing esoteric that we’re really doing 99% of what we do. Every now and then we might put together a defective grant or trust for somebody, but that’s like the 0.1% of what we do.

Jonathan DeYoe: And we are super excited when that comes along. That is so fun. I love really complex scenarios. That’s great. Spencer, it has been a pleasure having you on. Thanks for having the conversation. I much appreciate it. And let’s keep talking.

Spencer Sherman: Yeah, you too, Jonathan. Excellent.

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