What are the questions you should be asking? Do you KNOW whether they are doing the right things for you? In this episode, find out what questions you should be asking before it could cost you HUNDREDS OF THOUSANDS, if not MILLIONS of dollars!
Chris Miles Bio:
Chris Miles, the “Cash Flow Expert,” is a leading authority showing entrepreneurs and their spouses how to quickly free up and create cash flow and lasting wealth TODAY spending time doing what they love most! He has been featured in US News, CNN Money, Bankrate, interviewed internationally on TV & radio, and has a high reputation with his company, Money Ripples getting his clients fast, life-altering financial results.
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5 Questions To Know If Your Financial Advisor Stinks
It’s a blessed day. I’m loving life. Life is going crazy. It’s awesome. I’m loving how 2015 is going so far. I hope yours is great, too. I want to welcome you to this show. This is where we teach you how to free up cash and enjoy a better quality of life and financial freedom now, not just 30 or 40 years from now. It’s all about prosperity. It’s all about investing in who you are and being able to create the life that you love, and living the life that you love so that you can prosper doing those things that you love.
It’s an exciting show for you. I wish I could express how awesome things are. You got to check it out for yourself. Go pay us a visit at MoneyRipples.com. Check us out. There are great blogs, lots of episodes of this show, and events coming up. I’m excited. The first year I launched my business, I did three bigger events that were longer in a year. I did four in 2014. This 2015, we’re doing six. Plus, we’re looking at expanding out to other cities.
If you would love to have us come out and do a wealth empowerment intensive in your town city, or area, let us know. I want to see where my fans are. I want to see where you guys are at so I can bring some of this stuff to you rather than you guys always coming to Salt Lake City. I’m only selecting maybe 1 or 2 this 2015 and that’s it. With six events in one year, that’s not an easy task to do even for staying in one location.
I’m excited to be able to share with you. My whole purpose for doing this show is that I want to create a ripple effect of freedom, prosperity, and better quality of life for each of you. I want that ripple effect to extend not only in your own personal life and create prosperity for yourself, but I want that to go to your kids and ripple effects through them. I want that ripple effect to go through your friends, family, community, country, and across the world. I can’t do this without you. This is why I start with you.
Everything we do in life starts with us. If we can make that happen in our lives, it’s amazing what real impact we can make. I’m here to reveal and make that impact for you. That’s why I do this show. I want to get this impact far and wide. Share what we have to do. Share our message. Share the ways to apply it in your life so that people want to know how to do it and be able to have a life that you have, too. You can be that beacon of hope, light, or ability for people to look to and say, “That’s who I want to become like. That’s who I want to be around and be influenced by.” You become an influence and an impact for good creating value in people’s lives and making a great difference for them. That’s why we’re here.
I want to get a little bit financial on you, which would make sense. This is a money show. Naturally, we apply this to a lot of business owners, but there are questions I’ve been getting about financial advisors and how to know what advice is good. If you’ve read any of our episodes, you know that what we teach does go a little bit against the mainstream, and that’s good. That’s why it works because the mainstream hasn’t worked for decades and will continue not to work for decades more. Think about that.
If the financial advice you’ve been receiving has worked, wouldn’t it have worked by now? Wouldn’t people be better off financially and not under more stress and have less hope in a lot of ways? It’s because a lot of these things are myths. It’s because these things don’t work. Maybe you have financial advisors and you don’t know that. Maybe they’re your best friend.
I don’t want to bag on financial advisors per se because I was one. For those that don’t know my story, from about the beginning of 2002 to the beginning of 2006, I was a financial advisor teaching the things that you don’t want to be taught. As I spent four years looking at what I taught, and although my pocketbook was tied to it and it was hard to admit it, I saw that decades of advice have not worked. I saw that people that were investing their money with financial advisors weren’t much better off than if they had done it themselves. Even the ones that did okay still wasn’t good enough, not compared to what the financial advisors would promise.
This is not the financial advisor’s fault per se. This is the training they received from the companies they work for. You’ve got to understand. Who do they work for? Do they work for you or do they work for the companies that pay them? It’s hard to tell the difference. When they receive training, they receive training from the companies that sell products. They venture around and sell those products to you. What I found out was that I was a salesman in a suit. Even though I was trying to do what’s right, and even legally, what all the commissions, departments, and government agencies would say would be right, in my mind, it wasn’t good enough.
I want you to consider six questions to ask your financial advisor. People will say, “You can spot it from a mile away.” A lot of my clients will say that, too. They say, “You seem to know what’s wrong. Can you meet with my financial advisor?” The reality is I can’t meet every financial advisor out there. Even if I do, I’ve had clients come back and say, “I don’t see what you see. I don’t see anything wrong. Maybe I should keep using this stuff.” My response is, “This is going to cost you hundreds of thousand dollars over your lifetime. Not to mention, if you want to live a different life, you can’t take the same average advice and expect different results.”
Everything we do in life starts with us and we can make that happen. We have to focus on the real impact we can make. Click To TweetHere are five questions I would have you ask that would help you to know what your financial advisor’s perspective is. This is the question that goes through my mind. I know how they think and what cues to look for. I’m going to do my best to teach you these five quick questions. Number one is, “What principles do you teach your clients?” This is the question you should ask. Don’t give them hints. Wait for the answer.
I remember. This is at the end of 2005 right before the New Year of 2006. I was already questioning what I was doing, but my pocketbook was tied to it. It was hard to question. One of the guys I trained was named Doug. I trained him to be a financial advisor. He left that summer and went to do real estate investing with his dad. When we were talking on the phone, he said that his dad had doubled his income doing real estate compared to what he was doing as a professor at a college in four months. I’m thinking, “You’ve got to be kidding me.”
Part of my ego was going crazy because I was trying to get his dad to be a client. We were close, and then he decided to go do this real estate thing. They were legitimately making that money and it drove me nuts. We had this debate about what’s better. I was like, “Stocks are still better,” because I was doing stock coaching at the time, too.
What Principles Do You Teach Your Clients?
Finally, my friend, Doug, stopped me. The first question he asked me was, “What principles do you teach your clients?” My response to that question was, “What do you mean by principles? Rule of 72? Is that the thing you’re looking for?” He said, “No.” They don’t understand what principles are. There are strategies and there are principles. Even the financial experts you hear on the radio or TV don’t know the difference. They don’t even know what they are. They will teach principles, and sometimes, they are principles. Most of the time, they’re strategies.
For example, if somebody says, “Pay off all your debt,” that is not a principle. That’s a strategy. If someone would say, “Live within your means,” or even better yet, “Produce more than you than you consume,” you’re going to see closer to the principles. You hear me talk about, “Dollars follow the value created.” You hear things like, “Exchange creates wealth.” You hear a lot of those things. You hear about, “Money is meant to be put to use.” Those are all principles.
Question number one is, “What principles do you teach your clients?” Almost 100% of them won’t even get close. If they say things like, “Save for the long haul,” that is not a principle. If they say things like, “You should diversify,” that is not a principle. That is a strategy. High risk creates high returns could be another one. There are all kinds of things they might say. These are all things that are strategies but are not true principles, especially the high risk creates high return. That’s not even true in the first place. There’s nowhere in life that a high risk creates a high return. A key question to ask is, “What principles do you teach your clients?”
What Is The Best Way To Create Wealth?
Number two is, “What is the best way to create wealth?” That’s a great question to ask. This is where they usually will come out with the things you hear all the time, like, “Spend less, save more.” Let me tell you. You cannot save your way to wealth. That is not the way to create wealth. It is a slow way and you will likely be dead before you create any real wealth. You cannot do that. The real answer here should be about acceleration, not accumulation.
If they say the way to create wealth is to save your way to wealth, that is not the person you want to go with. That’s someone that’s going to put you into products. If you’re lucky, at best, you’ll be at the high poverty level or maybe middle-class because you’ll have to save up a ton of money to live off the interest to then be eligible to do that. I’m telling you that does not happen.
If they’re telling you to save your way to wealth and that’s the best way to create wealth, it’s wrong. The best way to create wealth is through using your gifts and talents in a way that serves others a great value. That will be the fastest and safest way to create wealth because you can control that, and people will pay you much more handsomely than the markets will.
I have not seen it yet. I’ve coached hundreds of people and interacted with thousands of people. I’ve yet to hear anyone who said they saved their way to wealth. The only ones that sound like they got close were they had retirement accounts that had a lot in them. When I asked them where the money came from, they said, “I sold the business.” They did the opposite. They did acceleration to then accumulate. You can’t do it by saving whatever nickels and dimes you’ve got left over. That’s not it.
Financial advisors will tell you high risk rates come with high returns because they want you to take all the risks. Click To TweetWhat Do You Recommend People Invest In?
Number three is, “What do you recommend people invest in?” I love this question. Most likely, they’re going to say it depends, but they’re going to have a slant towards a certain way. Most likely, it’s going to be to whatever they sell. I’ll give you an example. One of my clients had me meet with one of their financial planners. He’s got a decent reputation. On a personal level, I thought this guy was an amazing guy. This guy had overcome some nearly terminal illness to then come back and be alive, so I was impressed with him as a person.
I remember I went out to lunch with this guy. He went on for several minutes about how awesome he is and all the things he does. Believe it or not, I was pretty quiet this whole meeting. Some people wouldn’t believe that, but I didn’t talk much. I just listened. Finally, I got a little bit fed up with it and said, “Let me ask you this question. Where do you typically want your clients put their money? Where would you recommend your clients to put their money?”
He started naming off all the things that he pretty much sold. He talked about annuities and life insurance. He even talked about some other types of investments that are all within his realm. They were the typical type of investments you would hear about, mostly things to do with life insurance and annuities. I thought, “That’s interesting.”
After he gave me his whole pitch about what he thought were the best investments, he asked me, “What do you think about that?” I was fed up at this point. I was annoyed. I said, “People should invest in the back of their own businesses. People should invest in things where they have control and can make a lot more money than putting them in the markets.” He paused for a moment and said, “That’s too risky. People shouldn’t put all their eggs in one basket like that. People shouldn’t be investing in their businesses because businesses are risky.” My jaw almost hit the floor. The reason it didn’t totally hit the floor is that I’ve heard it before. They almost always say something like that.
I even said something like that back in 2005 to my brother-in-law who was in business. He told me, “You’re telling me I can take $10,000, put it with you, and maybe make a 12% return. That’s $1,200 a year, right?” I said, “That’s right if ever that’s the average that the market’s done.” He said, “I can take $10,000 and make $20,000 a few months in my business. Why would I invest my money with you?” The thing that came out of my mouth was similar to his, which was, “You should be diversified. You shouldn’t put your eggs in one basket. That’s risky.” I was trained so well, and so was this guy.
A lot of times, if you ask them, “What should you invest in?” They’re usually going to say whatever they sell. They’re not going to say, “Back in your own businesses,” when you have a business. They’re going to say, “In real estate,” because they will be more likely a real estate broker. Even then the real estate brokers don’t understand investing. They’re going to tell you to buy whatever you should invest in.
This is why I set up my business the way I did and consult the way I do. I don’t want to be influenced by those things. That’s why I don’t sell any products. I offer purely on a consulting basis and say, “Do you want to go do this investing? Let’s make sure you understand how to do it and you understand what you’re getting into. That’s great.”
Most of the time, I’m encouraging business owners to put it back into their own businesses to find ways to make money there. That’s where you have more control and more freedom. You’re going to make a lot more money than waiting for compound interest to work for you. I’m sorry, but that’s the way it is. No amount of compound interest can ever keep up with your genius. Does that make sense? That’s number three.
What Are Ways To Get Better Returns
Number one was, “What principles do you teach your clients?” Number two was, “What is the best way to create wealth?” Number three was, “What do you recommend people invest in?” Number four is, “What are ways to get better returns?” Ask them the ways they can get better returns. They might ask you to clarify. You can say, “Better returns on investing or better returns on your money.” I would stay with money. They will most likely mention some products. They’re also probably going to say places where you can take more risks. They would be like, “Depending on your level of risk, age, and circumstances, take more risks and you would get more returns.”
High risk does not create high returns. The definition of risk for a financial advisor is the chance of loss. If you have an 80% chance risk of losing, when does that ever become an 80% chance of winning? The last time I checked, the numbers don’t add up. If you have an 80% chance of losing, you have a 20% chance of winning. If you have a 70% chance of losing, you have a 30% chance of winning. If you have a 10% chance of losing, you have a 90% chance of winning.
Understanding how to create cash flow is the key. Click To TweetMost banks, financial institutions, and people who take your money will tell you, “High risk rates high returns.” Why? It’s because they have you take all the risks so they don’t. If high risk created high returns, banks will lend money to any person with a heartbeat, which they don’t anymore. We saw what happened when they did. They went under. Why do we want to financially go under like banks do? We want to do what the wise banks do, which is taking less risk, taking the guarantees, and doing those things that they can do best. That’s where they make their money. If they’re telling you to get better returns by taking higher risks, they’re out. They’re going to cost you your money and your life.
How Many Clients Don’t Worry About Money Anymore?
Number five is, “How many of your clients don’t worry about money anymore?” This is the second question that I was asked by my friend, Doug. He asked, “How many of your clients are financially free where they don’t worry about money anymore? They’re able to not stress. They’re able to live off the interest.” I remember thinking about that. I thought about retired physicians and people like that. I looked back and I said, “None of them at all.” He said, “Great job. That’s awesome.” I said, “Some of them have more than enough money, but they still worry about money. Some of them have enough money, but they still worry about running out of money at some point.” He said, “There’s part of your problem.”
Think about this. How many of their clients don’t worry about money anymore? How many of them would say they are financially free? If they say, “I’ve got a couple of them,” you’re like, “That’s great. How did they do it?” They will say, “They saved up millions of dollars.” You’re like, “Where did they get the millions of dollars? Do they work a job or were they a business owner? What was it?” They will likely come back to what I had said. They probably invested in their business, or maybe they’re a high-paying executive that was able to stuff a lot of money away. That’s it. That still comes from your ability to produce income, not from your ability to save a lot of money.
The average person won’t save enough to even make a dent. They will either run out of money first or will hope to rely on the government. We all know how that goes. We don’t want that to be the case. The likelihood is they don’t have any clients that are financially free. They might define that. I would even say this, “If I were to ask your clients, which of them would say they feel and believe they are financially free?” which is a good question. When somebody is teaching a mindset of scarcity, you cannot become financially free.
How Many Financial Advisors Would Be Financially Free?
Let me throw in a sixth bonus question here because this question is powerful. This sixth question is, “How many financial advisors do you know that would be financially free from only living off the investments that you recommend and not living off the commissions that they earn?” This is a question that came up when I was at a lunch with a financial advisor. He was a guy who was at the previous company I worked with. He saw my stuff on LinkedIn and wanted to know more about me.
We went out to lunch. He took me to the cheapest restaurant he could possibly take me to, it seemed like, other than McDonald’s. He said, “What is it you’re teaching now that’s different than before when you worked with us?” I said, “Let me ask you a question. You’ve been a financial advisor since about the mid-‘70s. You’ve been around for a while. You’ve been around the block for more than 30 years. If anybody has this figured out, you would. We’re in the last 30-plus years now that you’ve been a financial advisor, where have you made the most money? Is it in your financial practice or in the investments you’ve been recommending your clients get into?”
Without hesitation, it was his practice or his business. I said, “That’s exactly what I’m teaching differently. You’re teaching people to invest in things that haven’t worked for you even for the last 30 years. You’ve been teaching them that in 30 or 40 years, they could retire financially free. I’m teaching people to invest in things that have worked for both of us, which is investing in our businesses to create more wealth and more cashflow. That is the difference between you and me. Therefore, I am the only one with integrity here.” You could say there was a quiet lunch after that point. I never got invited back out again. That’s because it’s the truth, and the truth hurts.
These questions are obvious. I can assure you that there will be almost no financial advisors that can get through these questions well. It’s because they don’t live them. They don’t teach them. Maybe they’re a little bit from the norm. Maybe they do okay on a few of these questions, but they bomb the others. Maybe they have potential. Still, you can’t be the one to teach them how to think differently. You can’t be the one to teach them reality or the things that create real wealth that’s now and into the future.
That’s why I had to leave the financial industry. That’s why in March of 2006, I went to a seminar and said, “No more. I don’t care if my business is at a high, I’ve got to leave. I cannot be in integrity and teach this any longer.” In fact, I vowed I would never teach money again. I would teach ballroom dancing. I figured that would be safe. I did do some things with mortgages and things like that, but I tried to stay away from the financial industry for the next year. I ended up doing the opposite.
In 2006, I was able to retire with a few thousand dollars in the bank because I understood how to create cashflow. Please understand that is the key. When you follow the right principles and apply them with strategies that can support those principles, then you’ll watch the different results occur. It’s not by saving the latest and greatest vehicle that changes every 5 to 10 years.
If you’re around financial advising enough, you’ll see that every 5 to 10 years, even the person you know will change their mind about what they think is a better investment. Sometimes, you might get lucky, but it stays the same. That’s why I’m challenging you to do this. Ask these questions to people. See if your financial advisor fits. If they don’t, find someone else. Listen to what we have to teach. It’s different and it works. It works because it is different. That’s the thing.
My average client sees in the first year alone about $33,000 freed up, whether that’s money that’s saved or money that’s earned. It is usually a combination of the two. A lot of times, that’s saving in taxes, savings from debt, or savings that they will be able to track money both in their business and at home. That’s the ability to create more income and produce more value for people. Focus on that because that’s limitless.
I’ve got a mission. I declared this on Facebook and I want to declare it to each of you. In the last few years, we’ve been very blessed to help people free up about $50 million to $60 million. It has been awesome. That’s about 600 clients that we’ve been able to track. However, over the next few years, I want to make that number $1 billion saved and/or earned. I want that to start with you, guys. I want that to happen with you, whether that would be through clients or other means. I want that to be the case. That’s my declaration.
I came out of retirement to be able to teach this. I couldn’t sit back, enjoy time with my family, keep what I know, and hold it in. It has to be shared. It has to be known. I want it to apply in your lives. I want to see your lives be blessed and prospered. If that ripple effect creates through your life and through your families, kids, generations beyond you, friends, community, across the country, and across the world, that is where the power is. That is the impact I want to create. That’s the ripple effect I’m here to do.
I’m committed to that. I would love to have each of you guys jump on board. I will have each of you guys share this. Make this part of your lives and make it happen. I want you to have a great and prosperous week. I enjoyed having you guys on this episode. Make sure you apply this in your lives and teach this. Re-teach these principles. If you re-teach them, you will further deepen them in your understanding and you will become better at living these principles as well. Go make it a prosperous week. I’ll talk to you soon.