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109: John Crane – Mastering Cash Flow: Insights from Financial Advisor John Crane

In this episode, I speak with John Crane, a Seasoned Financial Advisor with over two decades of experience. John has a unique approach to personal finance, especially when it comes to budgeting. He shares his journey from struggling with traditional budgeting methods to developing the “One Number Budget” system, which simplifies the process and makes it more manageable for his clients. We dive into his book, published in 2022, where he outlines this innovative approach. John’s passion for making a difference in people’s lives is evident, and he aims to be the go-to person for his clients when they face significant financial decisions.

John also opens up about his personal experiences, from his early entrepreneurial endeavors as a teenager to his career shift from corporate America to financial advising. He emphasizes the importance of cash flow management and the psychological aspects of financial decisions. We discuss the challenges of traditional budgeting, the benefits of his one number budget, and the importance of being over-prepared for the future. John’s insights are practical and grounded, making this episode a must-listen for anyone looking to simplify their financial planning and achieve greater financial stability. Join us for an engaging conversation that blends personal stories with valuable financial wisdom.

Key Takeaways

00:02:06: Early Life and Career Beginnings

00:05:33: Family Background and Money Conversations

00:08:48: Realization and Career Change

00:17:20: Economic vs. Psychological Financial Decisions

00:20:17: Traditional Budgets and Their Failures

00:22:22: Budgeting Apps and Their Limitations

00:26:19: Over-Preparedness in Financial Planning

00:29:21: Importance of Cash Flow Management

00:33:24: Potential Future Book Topics

00:36:56: Impactful Travel Experience

Memorable Quotes

“I realized pretty quickly that if I had my own money, then I could make a lot of my own decisions. And I liked that.”

“Health and fitness are not the same thing. I was physically fit, but I wasn’t really healthy. They require different disciplines.”

“Cash flow management is the single greatest determinant of financial success or failure. Your ability to manage cash flow will make the difference as to whether or not you’re a success financially.”

Guest Resources

Website – https://www.cranefinancial.com/

LinkedIn – https://www.linkedin.com/in/johncrane/

Book Mentioned

The One-Number Budget: Why Traditional Budgets Fail and What to Do About It – https://www.amazon.com/One-Number-Budget-Traditional-Budgets-About/dp/1544533659

Mindful Money Resources

For all the free stuff at Mindful Money: https://mindful.money/resources

To buy Jonathan’s first book – Mindful Money: https://www.amazon.com/Mindful-Money-Practices-Financial-Increasing/dp/1608684369

To buy Jonathan’s second book – Mindful Investing: https://www.amazon.com/Mindful-Investing-Outcome-Greater-Well-Being/dp/1608688763

Subscribe to Jonathan’s Weekly Newsletter: https://courses.mindful.money/email-opt-in

Capture the most important benefit of an advisor – behavioral support – without the 1% fee: https://courses.mindful.money/membership

For more complex, one on one financial planning and investing support with Jonathan or a member of Jonathan’s team: https://www.epwealth.com/our-team/berkeley/jonathan-deyoe/

Website: https://mindful.money

Jonathan on LinkedIn: https://www.linkedin.com/in/jonathandeyoe


Podcast Production & Marketing by FullCast


This podcast is intended for general public use. By providing this content, Park Avenue Securities LLC and your financial representative are not undertaking to provide investment advice or make a recommendation for a specific individual or situation, or to otherwise act in a fiduciary capacity. The Mindful Money Podcast is not affiliated with or endorsed by PAS, Guardian, or Crane Financial and opinions stated are their own.

John W. Crane, Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 11350 McCormick Road, Executive Plaza III, Suite 202, Hunt Valley, MD, 21031, 667-318-0801. Securities products and advisory services offered through PAS, member FINRA, SIPC.

Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. Crane Financial LLC is not an affiliate or subsidiary of PAS or Guardian. CA Insurance License Number – 0G79065. 

Compliance # 2024-168593 , Exp 06/2025

Episode Transcription

John Crane 0:00 – 0:40
Budgeting is something that I’ve always had a struggle with clients and helping them with. And I had the typical budgeting spreadsheet that I would give clients, and people would usually fill it out once when I would first meet them. But on annual reviews, I never got an update. And so sadly, it took me 15 years to realize that people hated that spreadsheet and I needed to have something else. And it kind of evolved over time. Like the spreadsheet originally, the now one number budget spreadsheet was originally something that I learned from a colleague of mine that we would just do on the whiteboard, and I just cleaned it up and put it in the spreadsheet format and added a couple of things.

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Jonathan DeYoe 1:08 – 2:00
Hey, welcome back. On this episode of the Mindful Money podcast, I’m chatting with John Crane. John has been a financial advisor for over two decades. He guides business owners, corporate executives, and medical specialists through the weeds of personal finance. Deeply familiar with many of life’s events and career milestones his clients face over the years, he utilizes a vision discussion, something that I think we might have in common. I don’t know what his vision discussion is about, but we do something similar and a comprehensive planning process to identify unique goals and build a financial picture. He loves to make a difference in people’s lives and seeks to be the first person his clients call, assuming right after their mom when they receive big news or good or bad news. So I want to join the podcast to talk about his book, published in 2022, the one number budget. Everyone here knows that I’m enamored of things that make it simple, so I like the idea of a one number budget. John, welcome to the Mindful Money podcast.

John Crane 2:01 – 2:03
Thank you. I appreciate you having me on.

Jonathan DeYoe 2:03 – 2:05
So first, where do you call home? Like, where are you connecting from?

John Crane 2:06 – 2:22
Well, right now I’m in Alexandria, Virginia, and this is, I guess, the year that, like, my life flips a little bit because I’ve lived here the longest. Prior to this, where I grew up is a small town north of New York City called Armonk. That’s where I spent the first part of my adult life. Wow.

Jonathan DeYoe 2:22 – 2:27
You see? You’ve been there 20 years. What does that mean? I’m trying to get an age out of this, I’m going to double it.

John Crane 2:27 – 2:32
So I’m 53 years old. I’ve been here in northern Virginia for 24 years.

Jonathan DeYoe 2:32 – 2:38
Wow, okay. So growing up northern New York, what did you learn about money and entrepreneurship as a kid?

John Crane 2:39 – 3:29
Sure. Yeah. So when I was growing up, we grew up in a town that was very affluent. My parents did well, but we weren’t like super rich or anything like that. And my parents didn’t give me a lot of money to do stuff. And I don’t know, about twelve years old, I mowed my first lawn and they gave me $12 and I was like, man, this is amazing. And what I realized really quickly was if I had to ask my parents for money, usually there was some kind of conversation and dialogue and questioning that happened that could result in me not going at all and, but if I had my own money, then it was like, hey, I’m going out with Paul and have a good time. And there you go. So I realized pretty quickly that if I had my own money, then I could make a lot of my own decisions. And I liked that.

Jonathan DeYoe 3:29 – 3:31
Money equals freedom.

John Crane 3:32 – 3:32

Jonathan DeYoe 3:32 – 3:40
Even as a twelve year old. So did you work for an employer as well as a kid, as a high schooler? Or was it just, did you like main your own business?

John Crane 3:40 – 4:39
Yeah, I did. So I mowed probably, I don’t know, four or five lawns, which was great work for a teenager, and I accumulated enough money to join the local town pool. So I was living large for those early teen years. And then, then my next door neighbor, who was one of my lawn clients, he owned his own real estate consulting firm. And I was just fascinated by that, that he had started his own company. And one day when I was collecting my $12, I said, I really think you should hire me for the summer to work in your office. At this point I’m 15. I didn’t really know anything happens in offices, but I knew how to use a computer and computers back then were just kind of getting going. So people with computer skills weren’t there weren’t a lot of them. And I don’t know, something about it intrigued him and I ended up working for him for two or three summers in his real estate consulting and I was doing real work and that’s when I realized like, wow, if you can start your own company, that gives you some freedom, flexibility, and I like that.

Jonathan DeYoe 4:39 – 4:41
Yeah. Were your parents entrepreneurs?

John Crane 4:41 – 5:15
No, they were the absolute opposite of that. My father, God bless them, my dad, he worked for the IBM corporation, which back then that was the place to work. I mean, great benefits, very wealthy corporation. And my dad basically had the same job for about 20 to 30 years. And I’m sure after two years he had mastered it. And so I know wasn’t the most exciting thing for him to do, but as I said, God bless him, he did it to keep the family we never wanted for anything, and I’m thankful for him for that.

Jonathan DeYoe 5:15 – 5:20
Yeah, that’s, I think his might have been the last generation to have that kind of a job.

John Crane 5:20 – 5:21
Oh, 100%.

Jonathan DeYoe 5:21 – 5:32
Yeah. So I’m just curious, going back a little further preteen, when you’re say you’re 910 years old, what do you remember the money conversation being like at home?

John Crane 5:33 – 5:34
Yeah. There really wasn’t one.

Jonathan DeYoe 5:34 – 5:35
Wasn’t one?

John Crane 5:35 – 6:07
No, I mean, it didn’t really come up because we had all the basics. There was never, I mean, also my parents raised my sister and I too, when we were in a store, we didn’t like, oh, get me this, get me this, get me this, because we already knew what the answer was. Well trained. Yeah, we were very well trained in that regard. We’d get money gifts during holidays from certain relatives and that gave us the ability to spend money. But it wasn’t really until I started mowing lawns that I really had my own money and it was really a topic of conversation.

Jonathan DeYoe 6:08 – 6:14
So just before we dig into the book, kind of lay the career origin story. Give us the arc of your work.

John Crane 6:14 – 8:48
Oh, yeah. So I mentioned my father working for IBM all those years, and that was the model of success that I saw. And I, right out of college, went to go find a big Fortune 500 company to go work for. And the one that hired me was this company called Sprint. And I started out in, back in the, what was in the early 1990s, the equivalent of the mail room. From the sixties. I started off residential customer service, wearing a headset, answering 100 calls a day, talking about phone service. And my main goal for the next eight to ten years was bigger paychecks and bigger promotions. So eight years later, I was making $150,000 a year. This is, I guess, 19, 97, 98, I’m making 150,000 a year. I’m 28 years old, I’m driving a really nice car, just got married, we just bought a house. Everybody around me was telling me, like, man, you’re doing great. And I kind of hated it. The people that I was serving, I had a great client, I worked with great people, but selling data networks was just not something that I saw myself wanting to do. And it all came to a head in a booth at Waffle house in Tuscaloosa, Alabama. The gentleman I was replacing to take on this new job was retiring. He was 65 and he was retiring. And we got together for breakfast to talk about the meetings we were going to have that day. And as we both slid into the booth, I just had this vision of just like, oh, my gosh, like, we’re 2ft apart in terms of distance, but in terms of years, it was 36 years to get from my side of the booth to his side of the booth. And I just took the job and I already knew I wasn’t going to like it. I was just there for the paycheck and I’m not going to make it. And I got really scared. And I remember getting home and telling my wife, I’m like, I don’t know what I’m going to do, but I can’t do this forever. I just can’t. And that just kind of launched me in this process of trying to figure out what the right career was. I had this little yellow pad that I kept writing down attributes of jobs. And so one of the things I hated was I traveled a lot. I don’t like being away from my wife. So first thing at the top of the thing was no travel. And I just kept building that list. And when I had enough things, I would go to people that knew me well and I would say, hey, could you see me doing this job or could you see me doing that job? And when I got to financial advisor, I started hearing, wow. Yeah. Not only could I see you doing it, but if you actually decide to do it, let me know, because I want you to be my guy. And that’s when I know, like, okay, this is probably where I need to go. So that’s what led to me being in the financial services industry.

Jonathan DeYoe 8:48 – 9:04
Yeah. I’m wondering, this is a little bit. It’s an odd question, perhaps, but your dad dialed in, went to IBM for 40 years, 35 years, however many years, you know, put on the. I’m guessing. I’m picturing him wearing the short sleeve blue shirt with a thin tie.

John Crane 9:04 – 9:06
Oh, no, no.

Jonathan DeYoe 9:06 – 9:24
Okay. Anyways, it doesn’t matter. So he does the same job forever. Masters it. Not exciting, but he does it. So when you’re in that same position, you’re at sprint, you’re sitting across the table, you’re seeing the 36 years ahead of you. Do you have the thought, well, my dad was able to do it. I should just dig in.

John Crane 9:24 – 10:37
No, I was. For better or worse, I just had this and I don’t. Well, actually, I do know where I got it from, but I just had this blistering confidence that no matter what happened, I’d be okay. And when I got to that place where I knew that I didn’t or really couldn’t be in that role anymore, I was pretty open about it. So he and I were different. I mean, the other thing about my dad is that my dad got a little bit later start in the marriage and family department. So he was born in 1929. And so you think about the world as it was back in 1929, coming off the depression. And so he received the programming from his parents, whereas I received the programming from, of course, my dad, but it was also at the counterweight of the eighties and the yuppies and like, all that stuff. And I just couldn’t wait to be a part of that. But once I got into corporate America, very strict rules. As I got further and further in the corporate hierarchy, the less I could really be. I felt like I could be myself. That if I expressed my opinion that sometimes it was counter to what the executives wanted and it wouldn’t bode well for me. And I just didn’t like that.

Jonathan DeYoe 10:37 – 10:42
How long did it take you from sitting in that booth to saying goodbye? Was that a two month thing?

John Crane 10:42 – 10:43
Two years.

Jonathan DeYoe 10:43 – 10:44
Two years. Okay.

John Crane 10:44 – 10:45
Yeah, two years.

Jonathan DeYoe 10:45 – 11:35
I mean, that’s really interesting because I know that people have this. My best friend just got a promotion offer. He works at Amazon. He runs a huge group. He’s brilliant, right? And he got this promotion opportunity and I talked to him and we’re on the chairlift. We’re going to go skiing. We’re on the chairlift. Right up chair. He’s on this call. He knows he’s going to get this promotion by the end of the day. He has the promotion offer by an hour later. He’s turned it down. Like he knows I don’t want that. I love what I’m doing. I don’t want that responsibility. I don’t want that role. The way you told that story. There’s this two year arc where you’re now. I want to do something different. I’m not sure what it is. Trying to figure it out. I think that’s impressive. Okay. I’m doing something different. I’m going to figure out what it is and go do it. I know lots of people struggle in their careers. Do you have any advice? I know that’s not your expertise or whatever, but you went through it. What would you tell people? They’re like, ah, I just can’t do this anymore. What are those steps?

John Crane 11:36 – 12:35
Well, I mean, it’s kind of, as I outlined the advice that I give people, because you’re not the first one to ask me that, is to get the yellow pad. And again, I didn’t start trying to brainstorm the jobs that I thought I might like. I brainstormed on what are the attributes that would be part of the ideal dream job. And another one was that I get to choose my clients. Like, that was important to me. And I just kept whittling away from the edges, trying to figure out, like, what are those attributes? And there was actually a second contender. And the second contender was that I went into academia. I really liked to teach. And when I really got down to the decision point and I was looking at academia, I really like the teaching part and working with the students part, but the politics inside of universities are, like, way worse than corporations. And so, like, well, I can’t go there because I’ll get fired, and you’re.

Jonathan DeYoe 12:35 – 12:49
In luck, because, I mean, finance is something that needs to be taught. Like, people sure don’t get this stuff ever in their lives, and if they do, it’s like how to bounce a checkbook, which no one does anymore anyway, so it’s kind of ridiculous. What inspired you to write the book? I mean, how did it come about?

John Crane 12:49 – 12:56
It was a couple of things. I tell a story in the book about watching Moneyball, the movie. So have you seen it?

Jonathan DeYoe 12:56 – 12:58
Oh, of course.

John Crane 12:58 – 13:02
Yeah. Sorry. That was a dumb question. So I live in Berkeley.

Jonathan DeYoe 13:02 – 13:04
The A’s are literally next door.

John Crane 13:05 – 14:13
That’s right. And there’s this scene in the movie, as I’m sure you recall, where Jonah Hill’s character, the economist, is speaking to Billy, and he was saying there’s all this vast amounts of data about all these different players. It’s all about reducing things down to one number so you can make a decision. And on one of the 40 or 50 times I’ve watched this movie, there was this one time where that just kind of hit me, because budgeting is something that I’ve always had a struggle with clients and helping them with. And I had the typical budgeting spreadsheet that I would give clients, and people would usually fill it out once when I would first meet them. But on annual reviews, I never got an update. And so, sadly, it took me 15 years to realize that people hated that spreadsheet, and I needed to have something else. And it kind of evolved over time. Like the spreadsheet. Originally, the now one number budget spreadsheet was originally something that I learned from a colleague of mine that we would just do on the whiteboard. And I just cleaned it up and put it in the spreadsheet format and added a couple of things. But it’s basically that little whiteboard talk.

Jonathan DeYoe 14:13 – 14:26
Yeah, we’ll get to some specifics about that in a second. But before we do this, you may or may not know, I’m an author as well. I have some author questions. Can you share some of the challenges you encountered in the process of writing the book, taking the whole conversation and putting it on paper?

John Crane 14:26 – 15:44
Sure. I had a lot of help, so I would not be able to write that book on my own. And I hired a company that had a process, and the first part of that process was after writing the table contents. Then it was the author interviews. And so they would interview me for each chapter, and I had certain deliverables that I had to have for each chapter. Like there’s first the concept that I want to teach and then have a story or two about that concept, and then how does that, what’s the transition story to go to the next chapter? And the advice I would have for people is to think about all the different chapters that you would want to have in that book. And they like, why do you want each chapter in the book? And then spend time, whatever my time is the morning, like I love to do this in the morning where I have this spiral notebook and pick something that’s just on my mind and I’ll just start writing or a story comes to mind, I’ll grab my spiral notebook and I’ll put the story in there. So when it came, like, I’d been actually writing that book for years before I ever contracted with that company, just gathering all this information and all these stories and everything. So when it came time for the author interviews, it was easy. I just gave them all the stuff that ive been accumulating over the years.

Jonathan DeYoe 15:44 – 15:49
Yeah. What kind of feedback have you gotten after publishing about the book?

John Crane 15:49 – 17:07
Its been pretty positive. I mean most books only sell, I think, 250 copies. Ive sold a little over 1000 copies, which in the grand scheme of things, I feel like its super low. But then again, I didnt write Harry Potter. I wrote a book about budgeting, which not everybody’s like, I got to get this book on budgeting. How awesome. But I wrote the book because I really wanted to help people. And I think most financial books struggle to be of value to people. And that was one of the things I said to the company was I said I don’t want to write another bad book. Like, I want a book that somebody can read and they’re going to get value out of. And I think I’ve done that because in addition to the budgeting technique, which is the tactical side of it, which is probably like the least important, I go into a lot of discussion about the psychology. And when I work with clients, one of the comments that I say to pretty much everybody is because they’ll ask me a question about whether or not they should pay off their house or what have you, and I’ll look at them and be like, well, every single financial question, there’s an economic answer in the psychological one, and the psychological one typically wins. But I’m going to teach you both, and then I’ll arm you with what you need to make a decision. But just know that there’s the economic and the psychological, they may not line up for you, and you have to figure out where you are on that spectrum.

Jonathan DeYoe 17:07 – 17:20
I use the same, not the same exact phrasing, but the same thing. Like, I can tell you the math on the finance on how to do this. Probably that’s not the way you make the choice. Probably you make the choice based on life, what you want. That’s probably the more important part of it.

John Crane 17:20 – 17:47
Yeah. And I think it’s such an important discussion to present the both those sides because I feel like our industry, the financial services industry, we’re kind of trained to come across the table of people and be like, no, there is only one right answer to this question. And let me prove to you the math behind this to show you that I’m right. And then you end up losing people. Maybe not on that topic, but maybe something else, because they don’t want to get yelled at again, so they don’t ask.

Jonathan DeYoe 17:48 – 17:58
There’s no such thing as a bad question. So the first thing you kind of get in the book is the thief. And I find that’s a really nice framing for this idea. So who is the thief and what are you talking about?

John Crane 17:59 – 19:14
Sure. I don’t know when I had this epiphany, but I was introduced to this concept of future self. And if you look back over the course of my life, future self has guided me since a teenager. I always had some north star that I was always kind of. I didn’t know exactly how I was going to get there, but I knew if I just kept walking, I’d navigate. So I had this concept of future self. And then I work with a lot of clients. They’re just wonderful great families, and they struggle with the future versus the present. And when it comes to their money. And I was trying to think of a story that kind of would capsulate that, and I came up with this idea of, what if this person, what about a poem where a person has a friend and they friend is awesome, and they’re going off and they’re doing all these great things and these fun things, and the friend’s just, like, egging them on, and then all the money’s gone. And now the guys, the person telling the story is now old, and they’re broke, they don’t have any money, and they’re looking around and they don’t, like, where’s the friend? What happened to them? And then they’ve realized then the big reveal at the end of the poem is that the friend is actually you. You’re the one that actually did this to yourself. So that’s where it came from.

Jonathan DeYoe 19:15 – 19:20
I know it says you wrote the poem, but did you write the poem physically?

John Crane 19:20 – 19:30
No, I’m the author of the poem. Like, I’m the one that put the concept together, but the actual words of the poem? No, I do not possess the capability to do that.

Jonathan DeYoe 19:30 – 19:35
I was impressed, actually. It’s a good poem. And I was like, okay, wow, that’s a poet, too. That’s awesome.

John Crane 19:35 – 19:59
Yeah. So the writer I got paired up with, she wrote it. She’s a great writer, but she also dabbles in poetry. So when I told her that this is part of the book, is I want this thing, she was, like, so excited. And originally, I had instructed her to put that as anonymous because of this exact conversation that you’re asking me, like, did you write it? Because I just didn’t want to answer that question. Yeah, so thanks for.

Jonathan DeYoe 19:59 – 20:17
I had to do it. I apologize. So I think the truth, if we’re honest, if we’re not, I mean, I had so much help on my books as well. I think that’s just normal. I say I’m a pretty good writer. I write every single day, but I’m a horrible editor. Like, you couldn’t look at the stuff that I write and say, oh, there’s a book here. There’s no way. So I had to have other people.

John Crane 20:17 – 20:18
I struggle to totally.

Jonathan DeYoe 20:18 – 20:33
I’m good with numbers, but writing’s not my thing. So the whole book is about budgeting. And I think the core of the book you kind of introduced is the traditional. Budgets don’t really work there. People don’t like to repeat them. They don’t like to do them the first time. So what is it about traditional budgets that fail?

John Crane 20:33 – 21:31
Well, I think at the core, traditional budgeting is just parental, it’s something that you should do. It’s not something you necessarily want to do. And then the second reason is that it takes a while to compile all the data to actually put the budget together, and then you’re not done because next month you got to compile all the same data just to see am I on track. And the third reason is that the numbers change. Somebody might be on track with their budget, and then dishwasher dies, and then they got it. And so now the budget doesn’t work. And what I’ve noticed about human nature over the last 20 years is that if you take on an activity that you don’t really like and you fail at it two or three times in a row, you probably give it up. And that’s what I saw a lot of my clients doing, is they would just kind of give it up. And I needed to find a solution that was something that they could do or we could implement it such that it was basically autopilot, so they didn’t really have to think about it.

Jonathan DeYoe 21:31 – 21:39
Robert, have you looked at some of the budgeting apps out there? Like, have you used, I guess, mints? No longer. But what do you think about those as a way to track and sort of automate?

John Crane 21:39 – 22:22
I think they’re good. But again, it doesn’t solve the problem of failing. If you have that outlier expense, it doesn’t really solve that problem. And then another problem that’s popped up over the last just ten years is you’ve got stores like Amazon that sell everything. So when you’re looking at your list of expenses and you see Amazon, Amazon, Amazon, Amazon, Amazon. Like, I don’t know if that’s cat food. I don’t know if that’s groceries. I don’t know. Like, what is this? And so that makes it more difficult to be able to categorize expenses. And as such, then you’re kind of stuck because you don’t really know what you’re spending money on.

Jonathan DeYoe 22:22 – 22:29
So, I mean, this full arc here, what’s the solution? What is this one number budget? Tell us.

John Crane 22:29 – 26:19
Sure. Yeah. So the way the one number budget is structured is it’s basically a simple math problem. So you start off at the top, and up at the top is gross income. I just pull up a copy of it here so I’ve got it to refer to. So starting up at the top with gross income, and then the very first thing that the spreadsheet does is it pulls 20% out for wealth building. And I write on the worksheet, this is specifically for your retirement. This is not, I’m putting money in my college savings plan for my kid. This isn’t the money that I’m saving for a new car. This is specifically for your retirement. Then the next one I pull out for is taxes. And I always say to the client, you may have noticed they’re going to take it anyway. And then after I backed out wealth building and I backed out taxes, that gets me down to an annual number of what’s available for lifestyle expense. I divide that number by twelve. That gives me a monthly number. And now I back out for my clients two largest fixed expenses, just to simplify it further. So just pull out and say it’s typically housing and student loans or housing and childcare. Those are usually the two. And then what comes at the bottom then is their one number. And what that one number represents is what’s available for everything else for that month. And then ill look at the client and ill say, and I just want to back up to wealth building. Im pulling out for 20%. So I first meet a client, im putting that 20% number just as a default. I dont know anything about their savings at this point. So I get down to the one number and ill say, okay, can you get through four weeks on this amount of money if those other two expenses are pulled out of the equation? And surprisingly, a lot of times clients will look at it and theyre like, yeah, I could. And I’m like, okay, so if this number works and I’ll point to the one number, if this number works, then that means that this number and I’ll go up to the wealth building this number is possible. And so that act, and this is not something I did by design. I just kind of fell into it. It kind of unlocks their brain a little bit. And so then I say, okay, let’s tally up on the crib sheet on the side. What are you saving right now? Well, my wife and I were maxing out our retirement plans. We’re putting $1,000 a month over here and we’ve got this over there. And then we add it up and let’s say they’re saving 10%. What’s always interesting is a lot of the folks they’ll work with, if that’s how it plays out, they’ll see how much they’re saving at 10% and they know they’re supposed to be saving 20 and then they get, like, super competitive with themselves and they’re like, oh, yeah, all right, so what do we got to do? Yeah, we got to save another three grand a month. Yeah, we can do that. We can do that. Now it’s an opposite discussion. Now, I’m trying to talk them down a little bit because I don’t want them to screw up their cash flow. But I’m like, let’s increase it by 1500 or let’s increase it by 1000. Let’s try that for a couple of months and see how it goes. And then we just ease into it. But it’s a much more positive conversation than what I was getting with the traditional budget, because with the traditional budget, it was reversed. We’re going through all their expenses now. We’ve identified what’s left and let’s say it’s 2000 a month, and the client says, okay, well, it looks like you’ve got 2000 a month available in your cash flow. Why don’t we pull 1500 to direct that towards. Because we got to increase your savings. And then, as I say in the book, and maybe you’ve experienced this too, this is usually where the client starts to sing. The client will go, oh, I don’t know, maybe we do. Let’s do 200 a month. It’s just amazing. Just different formats. Just gets a different. It’s a different psychology. And I feel like my clients get a better result with that.

Jonathan DeYoe 26:19 – 26:46
So there’s a lot of discussion in the sort of financial advisor press around advisors that are forcing, suggesting people save more than they actually need to. So they’re over prepared, which I have no problem being over prepared. I make conservative assumptions, just like the next guy, right? You start with this 20%, but then if you do the actual functional planning, and it turns out they can, 15% gets them there, do you back off to 15% or do you say, no, why don’t you do 20% just to maintain and be sure?

John Crane 26:46 – 27:53
Yeah. The over prepared thing, to me, that’s just kind of like a silly thing for anybody to say because, like, we just don’t know. We don’t know how long we’re going to live. We don’t know what medical care is going to be like. We don’t know how our own health is going to be. We just don’t know. And when people ask me like, well, what’s the 20%? Where is that coming from? It’s from doing the calculation of, well, if you save 20% consistently over the course of a 30 year career, you’ll typically end up with a nest egg large enough to recreate the income stream you need to stay in your world. That’s it. If you do less than that, then that gets called into question. And the other thing I would like to throw in there too, is the 20% is actually doing two things. One, obviously it’s the accumulation, but it’s also keeping your expenses artificially low, and that’s just as important. And one of the things I say, and I’m sure you say it to your clients too, is we’re likely not going to be like saving for retirement in retirement. So that’s a placeholder that kind of makes it easier to transition. So anyway, when you say that, the over prepared, it’s just, come on.

Jonathan DeYoe 27:53 – 28:06
I agree with you. So I’m curious, like, what do you say to somebody who really doesn’t have the income to pull that off? Maybe they’re 27, they’re just starting off, and I’m sure they come in your office and you’re like, they just can’t do it. So what do you say to them?

John Crane 28:06 – 29:21
The economics are the economics. You live just like I live. And I think Berkeley and Washington, DC areas, I think we trade off every other year of the most expensive place to live in the United States. I’m not saying that’s a joke. I’m pretty sure that’s true. And I’ll run into families that they’re really struggling to save anything. And a lot of times I’ll have the discussion with them or I’ll start asking. I’m like, hey, the job that you have, where else is that job? And I’m just poking around to see what opportunities to kind of lessen this burden on them. And really what I’m asking them is like, is there another place that you could do this job that you’d be happy living that’s not here? Because the economics of this area are just crazy. And if you move to pretty much anywhere else in the country and it really ties to homeownership, like, the economics of homeownership are different, then you’ve got a shot. But, and I’ve said this to people, but if you choose not to move and you’re never in a position to save money, then what’s going to happen is you are going to struggle for the next 30 years, and then you’re going to retire and you’re going to be broke and you’re going to be angry. And so I don’t want that for you. So it’s an unpopular thing to say, but you might want to consider moving Preston.

Jonathan DeYoe 29:21 – 30:12
So just on that note, I just had this conversation with a client this morning who was asking about how to pick a great advisor. We were just talking about the advisory world, and I think what I said to him was, you want to pick an advisor that tells you no, that says that’s a bad choice or that’s going to hurt you, because there’s, I think, 90% of advisors just want your business. And so they’ll say, yeah, sure, you can do that, no problem. But you’ll do that. Just invest 10%. You may not have enough, but we’re not going to talk about that today. We’ll talk about that in 20 years. So it’s good on you to actually just say, hey, this is math. This is simple. This isn’t complex. One of the things I’ve heard added, though, from time to time, is someone will say, I’m 27, maybe it’s okay to get to that 20% when you’re 32. Build to it, add another percent. Add another percent the next year, add another percent the next year. So slowly work into it until you’re getting to that 20%. Is that a fair way to put it?

John Crane 30:13 – 30:28
Oh, 100%, yeah. When you asked me the question, I thought you were more of like somebody settled into a career that’s not overly rewarded financially. And that’s how I interpreted the question, yeah. If they’re on a trajectory where they can one day be in that position, absolutely.

Jonathan DeYoe 30:28 – 30:29

John Crane 30:29 – 31:18
Another thing that I’ll say to folks is that there’s really three stages of your life. There’s the first 30 year and thinking about a 90 year life. Right. There’s the first 30, the middle 30, and the final 30. So the first 30, your parents basically pay for that one, so I don’t really talk about that too much. The middle 30, this is the economic engine. This is where all of the money comes from to fund your life. Not just for the first 30, I mean, for the middle 30, but also for the final 30, which is retirement. So what I’ll share with people, this is like when I meet somebody out and they ask me what the book’s about, like, why is it important? It’s like, you’ve got 60 years of living that has to be paid for out of 30 years of earning. So this budgeting thing matters. You really need to get your arms around it.

Jonathan DeYoe 31:18 – 31:21
I’m curious, do you know Nick Murray? Are you a follower?

John Crane 31:21 – 31:22
Of course.

Jonathan DeYoe 31:22 – 31:52
Okay, good. A lot of stuff is Dick Murray stuff. And again, I am, too. I’ve been like 19 years. He’s the first speaker I saw when I joined the business. So, yeah, he’s awesome. I saw him in, God, I remember the office building downtown San Francisco. So I want you to, I ask everyone that is on a guest on the show, I ask him a similar or some kind of phrasing like this. I want you to make it really simple for us. Just there’s so much noise out there about personal finance, about money. If you were talking to a couple prospective client for the firm, what’s one thing that they should focus on that would lead them to greater financial and personal success?

John Crane 31:53 – 32:36
Yeah. Hands down, cash flow management is the single greatest determinant of their financial success or failure. And what I usually say to folks, I’m sharing that with them, is our industry. The financial services industry will often say, like, no, it’s our ability to pick the right stocks, or we’re going to sell you this great life insurance, or we’ve got this annuity that’ll change your life. But at the end of the day, your ability to manage cash flow is going to make the difference as to whether or not you’re a success or not financially. And you asked the question earlier in the podcast, like, why did I write the book? That’s why I knew that my book wasn’t going to be super popular. I knew it wasn’t going to make me a ton of money. But to me, that is the most important topic and I wanted to be able to share that. So that’s why I wrote the book.

Jonathan DeYoe 32:37 – 32:53
Beautiful. The flip side of that is because there’s so much noise. We hear stories about things we should be doing. So what’s one thing that this fantasy couple has heard that they should be doing that they should just ignore? You kind of touched on a few things, but get rose specific. What’s one thing that they thought about they needed they could ignore?

John Crane 32:53 – 32:57
Oh, gosh, I don’t. I mean, that could be a long list.

Jonathan DeYoe 32:57 – 32:58
Very long list.

John Crane 32:58 – 33:24
Yeah. Where I will usually talk like that is I’ll say where people tend to make the biggest mistakes that have and it ties to cash flow. The biggest mistakes, I think, that americans make when it comes to their money is big house, big car. They overspend on cars and they overspend on housing. And I get it. I want a nice car, too. I want a big house also. But those decisions can really negatively impact everything else.

Jonathan DeYoe 33:24 – 33:28
Yeah, true. I’m just curious, is there another book?

John Crane 33:28 – 33:35
Yeah, there probably will be one. I’m still ruminating through what direction I want to go, but yeah, there’ll probably be another one.

Jonathan DeYoe 33:35 – 33:40
You want to. An idea of the potential topics. You want to commit anything today?

John Crane 33:40 – 34:58
Well, the next book is likely going to be one that talks to people that are in the first 30. Earlier I mentioned that I don’t spend a lot of time there. That first decade of adult life is really important and providing some level guidance to kids, because what’s been interesting is probably a better way to say it. With the spike in interest rates and housing prices continue to go up, you see all these different articles and these pundits saying it’s like, oh, my gosh, these young people, what are they going to do? They’re never going to own a home, blah, blah, blah, blah, blah. And then I’ve got it saved on my phone. I’ve been meaning to send this out to my client base. There’s an article, it was, I think it was in the Washington Post, and they’re like, these two kids, they wanted to get married and they wanted to buy a house, but they didn’t have enough money and so they put off getting married and they moved back in with their, respectively, their own. Both of them moved back in with their parents so they could save money for the wedding and for the house that they wanted to buy. And I’m sitting there like, that’s not new. Yeah, that’s what we all did years ago before 2% interest rates on mortgages and stuff like that. Like, that’s how we always did it before. They’re holding them out like they’ve cured polio or something, but like, no, this is just how you do it.

Jonathan DeYoe 34:58 – 35:13
It’s true. It does seem like a lot of the struggles are like new and different and unprecedented and why do they have to go through this? But yeah, it’s. We’re adulting. We all have to go through this. It’s just part of the deal. Just before we wrap up, I want to come back to personal. What was the last thing you changed your mind about, John?

John Crane 35:13 – 36:56
The last thing I changed my mind about. I don’t know if it was necessarily I changed my mind, but it was definitely new learning for me. So for the last 15 years, I’ve been a really avid runner. And the reason why I became an avid runner is because a doctor told me 15 years ago, he’s just like, your cholesterol numbers are way off and you’re really going to be suffering when you get older. You need to get on all these pills and change your life. And so I went down the road of doing a lot of endurance races. I’ve run ten marathons, and I don’t even remember how many ten mile and half marathons. And so for the last. Yes, for the last 15 years, that’s what I’ve been doing. And so my last marathon was October of 2022. Ran my fastest time. Great day. And exactly one year to the day of that marathon, I had a heart attack. And I’m fine now. Good doctors in Philadelphia, they took good care of me. But in my journey from that heart attack, what I was hearing is health. And this is the thing that changed my mind, or my big learning. Health and fitness are not the same thing. I was physically fit. I mean, that race that I did at the end of October 2022, I was in almost the best shape of my life, but I wasn’t really healthy. I didn’t really eat well. I would have the occasional cigar, but I felt it was okay because I was running all these miles, and I can physically do all these things that people my age can’t do. So clearly, I must be fine. Nope. So health and fitness are not the same thing. They require different disciplines.

Jonathan DeYoe 36:56 – 37:03
It’s a good story. Can you name a place that you visited that had an impact on who you are today? And then what was the impact?

John Crane 37:03 – 37:45
Yeah, my wife and I, after we both finished our masters in business administration in our early or late twenties, and we decided to go on a trip to celebrate that. So we went to Greece, and we went to Athens first, and then we went to Santorini. And I am never the guy that’s like, oh, look at that beautiful view, or whatever. And we got to our hotel in Santorini. We’re walking down the path to get to the rooms. The view from where we were. Like, I almost fell down the stairs. Like, I couldn’t take my eyes off. It was just a very serene, peaceful place. And we haven’t made it back. We will go back someday. Just the peacefulness that came from that experience of being there, it was great.

Jonathan DeYoe 37:45 – 37:46
Tell people how they can connect with you.

John Crane 37:47 – 38:04
Sure. So the book has a website, one number, Budget.com, and that’s where you can download worksheets if you’d like to try using it. And also if you want to contact me directly, my business website is cranefinancial.com, and you can get through the contact page there.

Jonathan DeYoe 38:05 – 38:10
John, thanks for coming on. Everything’s gonna be in the show notes. Love the conversation. Love the book, and good luck in everything, man.

John Crane 38:10 – 38:12
Thank you. You too. Appreciate it.

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