Things DIYers Forget

​​The Childfree Wealth Podcast, hosted by Bri Conn and Dr. Jay Zigmont, CFP®, is a financial and lifestyle podcast that explores the unique perspectives and concerns of childfree individuals and couples. In this episode, Dr. Jay talks with Cody Garrett, CFP®, of Measure Twice Money.

They’ll explore the common misconceptions about financial planning and abolish the idea that it's all about choosing investments. Cody shares his unique approach, emphasizing the importance of gaining clarity and confidence in understanding how your money aligns with your life, not someone else's. They discuss the pitfalls of DIY financial planning and when it might be the right time to call a professional.

The conversation takes an interesting turn as we delve into the world of cash management and budgeting. Cody unveils a creative approach to rethinking budgeting by focusing on the subjective value of experiences rather than the dollar amounts.

Listen in for an engaging and thought-provoking discussion that challenges conventional financial wisdom and encourages you to become a master of your finances.

Connect with Cody at www.MeasureTwiceMoney.com!

Other Resources:

+ The Simple Path to Wealth by JL Collins

+ Retirement Planning Education Facebook Group

Like the show? Leave us a rating & review. If you want to join the conversation, email us at podcast@childfreewealth.com, follow Childfree Wealth® on social media, or visit our website www.childfreewealth.com!

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Disclaimer: This podcast is for educational & entertainment purposes. Please consult your advisor before implementing any ideas heard on this podcast.

Transcript

Dr. Jay

Hey Childfree Wealth listeners, today I actually brought in one of my friends, Cody Garretts, a CERTIFIED FINANCIAL PLANNER, just as I am. But he's kind of like in a little bit of a weird world of this. His whole world is around generosity, giving back, and he's done a lot of work with DIY ers and saying, okay, how do you do this if you're the fire queen?

You've seen him post somewhere. Like, I mean, I swear to dude lives on social media, you know, like… I happen to be on Facebook with him like your friend just posted 700 things. I was like, oh yeah, that's Cody. But it's one of those things where we were having this discussion over time saying, yo, does everybody need a financial planner? Can you do it yourself? Where are the pitfalls? All of that. So we're going to dig into that. I will freely warn you, both of us, Cody and I, like we can go on talking to each other for hours. We've done it. I apologize if we rambled, but, Cody, great to have you on the podcast.

Cody Garrett, CFP®  

I appreciate you inviting me. I'm always glad to talk to any audience. Just helping people with my trademark key finance personal. Really going beyond the numbers, as we'll probably do today. But yeah, I really appreciate you letting me kind of create impact beyond one on one financial planning by serving people I don't even know yet.

Dr. Jay

Yeah. And I use the word generous because that's the one Cody uses all time. It's really about giving back and that's perfect for this. So, Cody, I'm gonna ask you the first question, and then I'm setting you up for this and go for it. There's kind of like if you go online, there's two worlds. There's either, like, nobody needs a financial planner or everybody needs a financial planner.

Where do you land?

Cody Garrett, CFP®  

I land in this place that everybody has a financial plan. But it's up to you whether or not it's going to be intentional or not and align with your life, not somebody else's life. So to back up a little bit there, I don't believe that everybody needs to hire a financial advisor. I guess we can also break down like what would you actually use them for?

Because most, by the way, let me step back even further, which is most people who say nobody needs a financial advisor, you can just do this yourself and you just read this one book. They're limiting the scope of what they think an advisor does. Most people think a financial advisor or even a financial planner. Their job is to choose investments, buy and sell securities.

And they go, well, I can do that on my phone, so I don't need an advisor. But for example, in my financial planning business, I cover typically 25 to 30 topic areas and financial planning, and just one of them is choosing investments. So let's maybe start. I think that everybody needs to gain clarity and confidence with how their money is working.

And I call it everything in your life with a number on it. You need to have clarity on where it is, how it's working, and most importantly, that your money is aligned with your life. Not somebody else's life.

Dr. Jay

Yeah. And I think this is why Cody and I go on for hours together because I say it as you plan for your life first and your finances. We're saying the same thing. We're just using different terms we like to use. I think you're right. And if we build on that investment, one, the way I say it is your investments can be really simple. Simple, passive long term investor.

You can pick up The Simple Path to Wealth, read it. That's easy. The tax planning around it and is it going to your goals and what your insurance and like the life and are you get… that's the difference. Is that fair?

Cody Garrett, CFP®  

Yeah, absolutely. You know, there's a lot of different like quotes that you hear me say around these things. But one of them is I encourage people, it's actually kind of like a stoic thing, right? If you were to put everything in terms of your finances on a piece of paper and two columns, the things I can control and the things that are out of my control.

I teach both clients and through my educational content to non advisors that we really want to become more passive with our investments & the part of our investments that's out of our control so that we can become more active with our life and that things are within our control. So I think first, understanding and creating a framework for what's in my control, what's out of my control as necessary, and alignment with what I call your comprehensive financial ecosystem.

There's a phrase I use, you first have to understand where you are before determining where to go and how to get there before you can figure out what to do. You have to understand where you are, but also which elements of your finances are within and in your control.

Dr. Jay

I'm with you. I'm going to push you back. You did not answer my question. My question is, does everybody need a financial planner or… you said everybody has to have a financial plan, but like, where's the line? So one of the things I've been helping people understand is there is lots of things you can do by yourself. And there's kind of a lot of things that you can get done and do well by yourself.

But then there is a place for other help and you need to find that balance. And the way I say it is you need to figure out how to learn. If you want to learn on your own and you can do that, cool. If you want to learn from somebody else, cool. It doesn't matter because both of us, just for clarity, we're both advice only.

So we don't do investment management. We don't make our money off a percentage based AUM, you know, something like that. So we've got a different picture. Where's the line for you? When should they call Cody and say, “Hey, I need help?”

Cody Garrett, CFP®  

Well, I may push back a little further. So. Dr. Jay, do you have a financial planner?

Dr. Jay

So I have coaches is… I've got people in different areas. Do I have one that does all of my financial plan? No. So it's slightly different. So I look for specialists, let's call that. So if you think about it as a doctor model, I know of a primary care doc, but I have specialists.

Cody Garrett, CFP®  

Well, that's a great transition to how I think about as well, which I do believe, we think about when we're talking about money. We're talking about finances. It's like it's own, like a piece of the pie. This whole idea of wellness and the way I describe it is you have your physical, mental, spiritual, relational and financial wellness. That's like pie of wellness areas.

And I believe that everybody this is the part where I will be very binary, all or nothing, that I will say everybody needs a mentor in every one of those areas. Maybe, rather than saying like, everybody needs an advisor or a financial planner, I think you need somebody. You need a thought partner, a mentor, somebody standing alongside, not being the hero of the story, but the guide.

Like, I think you need a mentor and your physical health, mental health, your spiritual practice, if you have one, I believe everybody does in their own way. And then a mentor maybe in terms of relationships and complex. And then lastly, your financial wellness, which includes financial planning. Not everybody needs to hire a registered financial professional, but I do think that you need to be mentored either by an individual or become, just like you said, become genuinely curious to learn and surround yourself with a community of other personal finance people who are kind of doing the journey together but I call it alone together.

Dr. Jay

Yeah. By the way, people think you become a CERTIFIED FINANCIAL PLANNER™, you know, everything. We just know we just know how to google things better and we know who to ask.

Cody Garrett, CFP®  

Yeah. You find out just enough to know what you don't know. It's like walking into a library. Not until you walk into a library do you realize how much you don't know. It's actually a humbling experience. The more you learn, the more you realize you don't know effectively.

Dr. Jay

Yeah, I think the difference is for you and I. You and I have a list of people that know if I have a specific question about X, I know who to go to. You know, and, and there's somebody I can ask the question. And behind the scenes, there's kind of like a pull the curtain back, when clients have questions, I go to other CFPs because I'm like, so you're the expert in stock options or this or that.

And the other two, like, what about this? And I had one the other day and working through some issues of multiple businesses and one SEP IRA and how is it? And I went to two different taxes. Like, you know, I got asked something like, like we’re like three people deep looking for these answers, right? We're out there getting help too.

Cody Garrett, CFP®  

I think it's easy in terms of marketing for financial professionals, even though financial advisors, financial professionals often market this idea of like, I know how to do this, I know how to do this, I know how to do this. You're actually not helping yourself as an advisor by trying to learn everything. The phrase I use is, you know, if you try to be everything to everybody, you're not being nothing to nobody.

We very much stay in our lane, not just in what we know, but who we serve. Understanding without a scarcity mindset with an abundance mindset that not only can we reach out to an extended network of other professionals for guidance on specific things, but we also have a network of other people who can better serve those clients that aren't the right fit for what we know and who we serve.

Dr. Jay

Yeah. So a great example of this, Cody & I are both part of a group. Andy Panko runs it’s called Retirement Planning Education on Facebook and Cody will flat out tag me like hey this person is asking a question about childfree finances. It goes back and forth. This is what we do because we know those experts are there. But I think the challenge is if I'm a consumer, so now I’m a CFP and I'm like in the Reddit world because I hate Reddit a little bit some days and I love it some days, but like, you know. Reddit, they just hate all financial planners and most other groups.

I mean, let's be honest that yeah, if you're going to do it yourself, how do you know whose advice to follow, which is not? And I to say it's not actually financial advisors, education and blah blah blah. But like if I'm in those groups, any person can post. Yes. You're calling out the expert on it but they have no clue who to trust or not to make that.

Cody Garrett, CFP®  

I actually have a, I have an easy metric for this is that on social media, whether it’s Reddit or Twitter or Facebook, whatever, when somebody ask a financial question, here's an example. Somebody says something like, should I contribute to my traditional 401k or my Roth 401k? The person you should trust is not the person who tells you what you should do.

The person you should trust is the person who their first comment asks a follow up question. It's the person who cares more about what's right for you than what's right for them. Any time somebody gives you an answer straight away, they're saying what they would do, which, by the way, is usually not what you should do.

So I think it comes down to you end up trusting sources. You know, we've both seen examples of this where you know effectively you only want to take advice from somebody who's curious enough to know which advice to give you. And just like, you know, people don't post enough information on those forums to actually get personalized advice.

If somebody by the way, there's also a big difference between advice and education. Advice is telling people what to do and education is helping people gain, gain the clarity and confidence to make their own well-informed decisions. So I'd say if you are on social media and looking at different things on Reddit forums, only take advice, quote unquote advice from people who actually care about you and your family, not just your finances.

Dr. Jay

Yeah, and I think the way I do it, you're really good at asking the questions. And I tend to not live on social media as much as you do. So I don't have the time to dig into it. I apologize. Social media is not where my skill set is. What I do is I'll say, okay, here are a couple of articles, a podcast, something that goes into the question you're asking that's going to answer it for you, but you need to like you need to do the work of.

Cody Garrett, CFP®  

Right, teacher man or teach a woman to fish right?

Dr. Jay

Yeah. I sent that to people and Facebook has a smacked me upside the head for posting links. I'm like, what the heck? Like literally they ask the question here. Great example of this, I always get the question of, well, who's going to take care of you when you’re older long term care. All that I would say is I have an article that has prices, all the details and Facebook be like, oh, you're promoting a link.

Cody Garrett, CFP®  

Trying to sell something.

Dr. Jay

I'm selling nothing. Like because if I start asking, well, what age are you and are you married? And was this of like, we're going to spend the next six weeks doing this, right? Right. But then you'll see people you're right that just on Facebook like launch, I'm getting crazy like, nope, it's all a scam. You should never have it.

Cody Garrett, CFP®  

My my mom had long term care insurance, and it never got used as a waste of money so now, like, I believe it's a waste of money for everybody because my one circumstance.

Dr. Jay

Yeah, I think my other caution on if you do it yourself and you go online is you want to follow the recipe that matches you and not mixing recipes. I see a lot of this where people take advice from a bunch of in places. It's actually good advice in multiple locations, but when you combine them, it doesn't work.

Cody Garrett, CFP®  

They're like two good ideas, but yet they're conflicting.

Dr. Jay

Well, dumb example of this is if you can follow the Dave Ramsey world of no debt, you can't follow the Grant Cardone world of all debt. Like they just don’t go together.

Cody Garrett, CFP®  

Right. And also, you make a good example of we think not just in money but like in life, we think very binary black, white, red, blue politics. Right? Like but we also think binary about no debt or all debt. Like, we need to remind ourselves that not only is there like a spectrum of implement ways to implement things and strategies, but there's also a spectrum of who's telling you what.

From previous experience, the person who might be telling, you know, debt, they might have a huge, big family history of trying to break the chain of debt, whereas somebody who says like all debt, they've actually understand the difference with debt, debt and leverage and some of those like more detailed. Right. They're not going to spend paragraphs teaching you everything they've learned over the last five years about that concept.

Dr. Jay

Well, yeah. And they have a recipe for a reason. So like we have the eight no baby steps and it actually happen to be a no debt plan. It's meant because each of the steps go together. If you pick just like follows step five, the other four steps are important for a reason. It's kind of like, you know, we start mixing things and then all of a sudden you're not getting what you want out of it.

Cody Garrett, CFP®  

That's actually funny. It reminds me of how I think about you know, a lot of people binge watch shows, right? They watch like the whole season. I'm the type of person who, like, watches the finale first because like, that's always like the most like exciting, dramatic. Like, Marissa will laugh because, well, what my my wife Marissa will laugh because I will watch, like, a cooking competition show.

And I'll like I'll watch like one of the last episodes first or what recording of Jeopardy and I'll watch actually like the final episode of the tournament. And she's like, wait, like, but we all have that idea of like, it's that instant gratification of like, let me get this just like a kid, like they want to do, like everybody wants to do the advanced classes they get really excited about like the advanced, like, oh, I want to do advanced calculus where like first figure out like plus and minus and things like that.

We get really excited about advanced concepts because when we do advanced concepts, we feel we're affirmed, right? We feel like we're, we're smart like or we compare ourselves to other like if I'm in an advanced class, I'll be smarter than other people. So we think the same thing with money. I'm saying if I'm using an advanced super tax optimized strategy, I must be ahead of others where you step back and you're like, wait a minute, you're actually not in a race with others.

I guess you first have to step back and understand that this is… it's very difficult on social media now to compare because it's been designed to try to make you compare yourselves to others, just the way the algorithms work out as they're trying to make you jealous. So you spend more time going down those rabbit holes of other people on vacation versus just giving you the education you need to step away from the phone and live your life more actively?

Dr. Jay

Yeah. And by the way, this is where I usually get myself in trouble, because some would be like, well, I want to do X, Y, Z investing. I saw this especially when they're saying the word alternative investing or, you know, something fancy. And then I'll talk to them like, listen, you got a credit card that's got 20% interest on that. Pay that off first.

Cody Garrett, CFP®  

That's a nice investment return.

Dr. Jay

I know like what I'm going to miss out on this cool thing and I'm like 20% tax free, risk free return do that. And they're like, but I'm not going to get ahead if it's like you get stuck in these circles and that's the nuance that you miss if you're just trying to do it on your own.

Cody Garrett, CFP®  

Well, there's a lot of productivity, people and stuff that'll say something like, you know, you're the average of the five people you spend your time with, which I think is like a net positive in that attitude of like surround yourself with like people who are like, you know, upper level are like the next step of life that you but that can also be very dangerous in terms of that comparison.

And always like if you're never enough is if you surround yourself with people who are not I maybe that's he makes the case like surround yourself with people who are one step ahead not five steps ahead. And the most of the people we follow on social media especially, you have like a ton of followers. They're the ones who they make it look really easy and they're not going to tell you…

They're all going to show you the tip of the iceberg. Not all the stuff that went into becoming a successful a good, good example of that would be that, you know, the Grant Cardone 10X, if you're trying to 10X before you're even 1X, you got to kind of reevaluate who am I surrounding myself with and how much further ahead, quote unquote, are they?

Dr. Jay

You know, yeah. And people get bored by the basics. So I want to talk about a basic one that that Cody’s got a kind of interesting thing, which is cash management and we’ll call it budgeting, whatever. And I saw you had this like outline like between like what you're spending, but what your goals are or what's important to you. Kind of talk through that. Like matrix. It’s really cool.

Cody Garrett, CFP®  

Everybody thinks about budgeting as something you spend money on and then the next column is how much you spent on it. But I found working with the families I serve that as soon as the numbers are on the screen, they can't focus on the transaction. They can only focus on how much the transaction costs. I do an exercise where actually eliminate, initially I eliminate the numbers from the screen.

What we do is we have a list of all the things that they spend their money on. And by the way, you don't have to like list like I actually I did this with a family where we actually looked at over 2000 transactions like literally like through that many whereas you know, you can you make them put them into categories sometimes 30 sometimes you just put it into like basic like just like house, fun, giving, right?

Things like that. But when you break it out like that, let's say you came up with like 20 different categories. One of them might be somebody goes out to eat at a mexican restaurant once a week, maybe something that they do like a lot. You know, there's a lot of those transactions maybe comes it's own category like Maria's Mexican restaurant.

But what I do is I have them actually order those trends. We've taken away the money. I just have them order the transactions. I actually look at each one and saying, okay, Maria's Mexican restaurant and working with spouses especially. I'll have each of them say, how much do you value this not expense, but this experience, right? How much do you value Maria's Mexican restaurant going to this restaurant from a zero to a ten?

And each spouse says what their number is. And what's kind of funny, too, is I've had it where one spouse says are two of the other spouses are three, and they're like, wait, I thought you liked that restaurant. No, I thought you liked that restaurant. So it's an opportunity to communicate. But more importantly, when you've gone through all of this, then you can actually rank all of those transactions, not in terms of dollar amount, but in terms of value, how much value they provide to you.

You can either rank them or just put them like to a one to a ten on each one. But what's cool is that now that you have them ranked by value, subjective value of how much they provide to your family, then you plug in the numbers and you say, why is it that the thing that we both value as a one is actually one of the most the things that we spend a lot of money on?

And then why is that? Maria's Mexican restaurant, that's a ten. That could be an 11. If we could give it an 11, we turn this one up to 11. Right. Like, why are we spending… why are we only going them there every two weeks when we could go there? Every every week? I take very much like a Ramit Sethi approach.

I've learned kind of like after the fact that I use this approach, which is that I really help people not cut spending on the things that they enjoy, but spend less on the things that don't provide value. So you can spend even more on the things that you do. As long as, by the way, the numbers work, I'm not going to give somebody permission to spend more than they make.

But at the same time, I think everybody there's a phrase by the way, Dr. Jay, here's a little exercise for you. Do you spend less than you make or do you make more than you spend?

Dr. Jay

I spend less than I make.

Cody Garrett, CFP®  

A lot of people say, like, what's the difference? Like, that's the same you.

Dr. Jay

No, there's there's a huge difference. I got.

Cody Garrett, CFP®  

Right. So, yeah, there's a big difference and there's an intention there that you're intentionally spending less than you make rather than just saying, well, I make more than I spend, so who cares? There's an intentionality. But I think that intentionality isn't just about making sure that you're you're in the black, not the red, in terms of your numbers matching up, but that you're intentional spending comes from also understanding that this thing I purchase or this experience that we're experiencing together as a family is something that we value enough.

Because value a lot of people think about value as a dollar amount, but there's, there's two parts of it. There's like there's the dollar amount, right? And then like how much you received and how much you received from this transaction is not just quantitative, it's qualitative. There's emotion involved, there's memories. A lot of people spend money on memories.

Cody Garrett, CFP®  

They're like, we're not going on this trip. Like, we're not staying in this hotel because it's an expensive hotel. And we can be… maybe some people are like that were they’re like, I stay a nice hotel, but they're like, sometimes I have to encourage a family. Hey, you've been staying at the hotel that's five blocks from the beach. But I'm wondering, like, what would that experience and that memory look like if you stayed at the place that's right on the water where you opened the sliding door and sand flows into the room. Like you're that close and people are like, wow, I never thought about it. Like we've always like the we've always stayed at a cheaper place, but we have to walk like five blocks. Our feet get burned on the concrete along the way. Right.

But once you start understanding, like, what do you actually value about the experience, you could be more intentional about how you spend money on it. Just like you said, life first. Money fits into that. Don't fit your life into your money, especially if you're working with somebody who's going to encourage you along the way.

Dr. Jay

Yeah. And what I like is you have a systematic way of doing it. The way I explain to clients is, look, your goal is to go to Paris. Do you really want that DoorDash or do you want to go to Paris? And it becomes a question of priorities. Both can be priorities, but which one do you want more? And it's funny when people are like doing a bit of mindless spending when you say, do you want that mindless spending or do you want your big goal?

It becomes a light bulb go, oh, that's why I don't get to buy my new car, travel. Whatever your goal is, give whatever it is. And I'm using it as an example, like that is the most basic money management stuff, but it sets the foundation for everything else. So let's shift a little. Cody. We're going to kind of do a little speedish round and when I work with DIYers, he said it this way.

He said he came to me because he wanted to know his unknown unknowns. It was like, ohhh.

Cody Garrett, CFP® 

I hear that going a lot.

Dr. Jay

Like that's a good question because if I know what to Google. I can get an answer, you know, if I don't know what to Google, I end up with cancer. You just kind of how that works. We're going to take turns.

I'm going throw one out, you throw one. We’ll go back and forth of like common things. We see we're looking at people's been doing DIY and like here's some traps and we use one that just that's been annoying me this year. The amount of people that have done backdoor IRA contributions, backdoor roths that didn't do the paperwork right and that was the 8606 IRS form or had other IRAs.

And I have spent more time this year unwinding things and cleaning up accounts. And I've got people decades of this where I'm trying to do it and I'm like, Listen, you did all this work for $7,000 and you messed it up somewhere between and now we got to file with our, like, looks cool, looks like a good idea. But that is one that I think I’ve seen one person this year, DIY that did it by themselves right and the rest were all something in the middle. Does that one jump out to you?

00:24:34:20 - 00:24:48:21

Cody Garrett, CFP®  

Yeah, that's a huge one. You know that form 8606. It's also something that even if you're using a tax preparer, they might not even ask you, especially if they're doing 350 returns in one month. Like they're not going to give you a phone call and say, hey, I notice you contributed to this like you did a roth conversion.

Was that, you know, was that a backdoor was that taxable? Right. Yeah. Usually when people are doing it like they know why they're doing it, but they're not communicating it. But one that actually comes to mind. I kind of, you know, another example of that is this is one of the most sophisticated DIY investors I work with.

It's a very simple check the box that people don't do in their investment custodian, such as Fidelity, Schwab, Vanguard. It’s that they don't automatically reinvest their dividends, especially within their retirement accounts. I’ll meet with a client who has… they've done such a great job, right? They got like the 90% right. But then they've actually built up $20,000 of the cash is sitting in their Roth IRA and it has for the last few years because they didn't check one box to reinvest those dividends.

And in terms of long term investments, like that's something where, you know, we understand the awesome effect of compound interest, but you also have to make sure that those dividends and interest and those distribution lines from those mutual funds and ETFs that you buy, that those are automatically reinvested to buy more. Because compounding doesn't really happen if the money, just all the money that you're growing isn't growing on top of that money.

Dr. Jay

Absolutely. And the one that reminds me of is, you know, kind of like those ones that put money to an IRA, but then don't invest it. You save cash sitting in there & it has been there for a while. Let me go to my next one. I see a lot is they don't have disability insurance and disability insurance through work can be pretty cheap, but reality check is if you don't have it and you get disabled, social security disability sucks like you get like nothing and but what I'll have is love is they’ve got this great investment plan but that disability insurance overlooked and the result is if they get injured they're out of luck.

Cody Garrett, CFP®  

Very much think that comes down to this idea of it won't happen to me and I think that people don't take I think a lot of people hear about life insurance, right. You talk about Dave Ramsey. That's something that like, you know, he pushes. Figure out how much life insurance you need. It's like a whole nother conversation because I think there's a lot of kind of bad rules of thumb around that.

But that disability insurance, there's also confusion, too, that I think a lot of people assume that disability is related to your job. And it's always something we're like, oh, like somebody who works with like saws all day accidentally saws off his hand, like that's a disability. There's a difference between worker's comp and disability insurance. And the statistics show that actually most people aren’t disabled by like a work accident or like a physical accident, but actually by illness.

So I think that's something where there's just needs to be a lot more education around disability, you know, more common than premature death, much, much more. I think it's what is like one third or something will experience some sort of disability. I think it's also because disability insurance is more expensive than life insurance.

Dr. Jay

Actually I'm going to argue with there a little bit it’s because the insurers agents make more commission on side life insurance than disability insurance.

Cody Garrett, CFP®  

Interesting. Well, and along with that, too, I think this the idea that another reason that disability insurance is more expensive than in this example term we're term life insurance was paying for the death benefit purely is that in terms of disability versus life the reason disability insurance is more expensive is because it's more likely, right.

Dr. Jay

You can actually use it.

Cody Garrett, CFP®  

Right? So yeah, the insurance company knows that more people will be disabled than die prematurely. Therefore you're going to pay a higher premium for disability, assuming that it's actually the right coverage for you.

Dr. Jay

Great, your next one.

Cody Garrett, CFP®  

So my next one would be thinking about I call them squirrels, which is all those different accounts you have everywhere. You know, you got checking savings at two different banks and you've got your Roth IRA, your traditional IRA, your 401(k), your 403(b), your 457(b), you have got your pension plan that I may or may not get someday.

Right. I think it really comes down to not necessarily consolidating. I mean, like putting them all in one account, right? There could be some huge tax liabilities if you try to put everything into one account. But I think the biggest part as we think of all these accounts separately, but I'd encourage all DIY investors that you need to think of everything and all of those assets, all those investment accounts, it creates a total portfolio.

What I mean by that is I work with retirees who say, you know, I've earned a retirement. A very common example is I'm going to have 60% of my investments and stocks equity. I'm gonna have 40% in bonds, fixed income, a 60/40 portfolio, as they call it. But what happens is they invest every account, 60% equity in 40% bonds, fixed income without understanding that you can create a total portfolio of 60/40.

But your Roth IRAs could be 100% equity and your traditional IRA could actually be like 40, 60, right? So just understanding that even though you have all these different accounts, they don't have to be identically invested. You can think of them as a total portfolio. The money is fungible and then you can put the right types of investment…

I call them putting the right passengers into the right vehicles along the way.

Dr. Jay

Yeah, the asset location is one of those that is like just it’s missed along the way. Sometimes you don't have as much control over your 401(k). Oh so you fixed in other areas like and I'm like you're total in net worth. That's kind of interesting. I've see people do it like I don't count my house, I don't count this I don't count that money.

It's all part of this picture, you know. But that doesn't really count. No, it really does from a tax standpoint. It does. And just moving which account as which thing can be big. I'm with you on that Cody. Next up on my list and now this partially because I serve childfree folks are two hot buttons for me is not having wills, power of attorneys, beneficiaries, executors all that in place and I don't care what age you are but just like when I get all, I'll do that paperwork.

No, you'll get in a car crash well before then and not have the paperwork. And you don't have somebody on that, you know, especially for if you’re single. We need that paperwork immediately. You know single with no kids. People  are like well, but it costs a lot of money. No, you can do the simple ones like I recommend Trust & Will for simple ones, but not perfect.

Not great for complex but at least you have something in writing that says this is what I want. And then we can get more complex after. Yeah, we can have a separate discussion. I like people. Then get too complex and start doing crazy trusts for no reason. But like start with the basics. You need to get the paperwork done.

Cody Garrett, CFP®  

And I'll add to that, I think there's the two ideas here. It’s that most people think a will or a trust and they're thinking about money without thinking about these things. They think that a will is about who gets what. But what we're talking about, the importance of who helps with what. Right. There's a big difference between like just bequests and who gets who gets this money when I die, who gets the rocking chair, who gets the house, who gets the car?

But what we're talking about, it's more important is who helps with what? Right. Who helps with the money, who helps take care of the children. So just think about that idea of like who helps with what, not just who gets what. And another part of that misconception is people think that estate planning is for rich people. Right? Again, that goes back to just thinking about who gets what, but getting these things done, especially like like very easy form is not very expensive, especially in terms of the headache kind of going back to this, the idea of life insurance, a lot of people you shouldn't be asking the person who's going to die how much life insurance they want. You should be asking the person who's going to be surviving without that spouse. Right, or that other person. So the same thing with estate planning.

The estate plan is not for the person who passes away. It's for the person who has to clean up the mess and is a few hundred dollars, five-hundred, a thousand worth not having to put not just a financial burden, but just that that what I call return on hassle, like you talked about earlier, hassle, you know, how much is $500 or $1,000 worth so that when you do pass away or something were to happen to you that your surviving spouse or family, they can grieve emotionally, not for the administrative cost of your not being there.

Dr. Jay

Yeah. Got a last one Cody? Your last favorite DIY or thing that gets skipped or overlooked? An unknown unknown.

Cody Garrett, CFP®  

I probably get blown up for this, but the idea of especially in the DIY like the FIRE communities that the financial independence retire early communities, there's this idea that, you know, you just buy one fund. And I think that's what really missed there is that it makes sense to buy. I think you should always be simple with your investments again, but that said, like even retirees I work with might not have more than three or four different investments in their accounts, but they're still diversified.

But I think it's really important to understand that usually when you're talking about like buying one stock fund or something, that you're really talking about something that you where you won't need the money and like 20 or 30 years. So the last thing I'll say here is the idea of you've heard me say Dr. Jay, which is give every dollar a job and a use by date.

Right? So before you choose an investment, you have to understand what is this money going to be used for? Or at least you have to make an assumption, what is this money going to be used for and when will I need this money to pay for x? You know what's going to be used for. If somebody comes to me and says, I'm buying a house next year, what should I do with this money for the down payment, right?

If they were to go on to Facebook or Reddit, they'd say, oh, I have $300,000. What should I do with it? Everybody's going to say to invest it long term because they didn't know what the money was going to be used for. And when you need it again, my last misconception is don't choose the investment first.

Understand what it's for when you're going to need the money again, and when you have those two questions answered with pretty good clarity, it's so easy to determine which investment to buy.

Dr. Jay

Yeah, the way I say is the only investment thing that you understand. And to understand the investing you have to understand what you're investing in, where to keep it, and how it impacts your financial plan. You know, it's kind of the same where you are. You and I, Cody, get to the same place just with different wording.

Cody Garrett, CFP®  

And also on that as well. I like that idea of, you know, don't invest in something you don’t understand. Like you have to understand the investment, but you also have to understand yourself and how that investment fits in with in your life, for sure.

Dr. Jay

Absolutely. I always argue if somebody… if your investments are keep me up at night, there's a problem. And the problem is either you don't understand the investments or you took on too much risk for yourself, one or the other, and maybe a bit of both. But I think the hard part is you got to stop and learn it before you just jump & go, hey, I'm going to pick this one fund and chill. 

Cody, where can they find you? I know you're on all the socials and look, if you haven't followed Cody, go for it. He's always got some great nuggets out there.

Cody  Garrett, CFP®  

So in terms of finding me, I'm not I'm not accepting new financial planning clients. So makes it really easy not hard to sell anything here. I do have an educational platform for DIY investors. So you non advisors for example it's a measure. It's called MeasureTwiceMoney.com. I’m actually in the process of creating a comprehensive video course. You know, Dr. Jay, you asked me earlier, does everybody need a financial planner?

I'm actually creating a course to teach non advisors how to create your own financial plan as a family, whether or not you hire an advisor. Just one of those things like I'm kind of mentoring you to take it on yourself. So MeasureTwiceMoney.com is where you get tons of free education. You know, there's no no bait and switch.

It's just here's everything I know about this topic. Go for it. Learn as much as you can.

Dr. Jay

Yeah. Awesome. Thanks for being on Cody. You know, I think you and I could probably do four more episodes on the unknown unknowns, because that's literally our business. Like this was skipped & what is that? And I don't feel anyone's listening. I don't want you to think about it. Like, you know, we're judging people for not knowing that stuff.

It's just the stuff that gets overlooked and it's because it's the pieces that fall through the holes. Yeah. Like you got a good plan, you got a good structure, like, oh, yeah, I forgot. I should do a will. You know, you just, you know, it's in the book somewhere that I need to do this. But yeah, there was you're also seeing is Cody and I are, you know, agree on much of the things. We use slightly different terminology that's because we're both serving people that are trying to learn how to do this, which is awesome.

And I think that's what I like about the DIYers, it’s that they're trying to learn. You just also have to know when to call for help and that and there's no right perfect answer on that, but it's like you want to call for help before you're in trouble versus like too late. So Thanks for coming on, Cody, and it's been great.

Cody  Garrett, CFP®  

Absolutely. I'll be back anytime.