Defeat ‘Monkey Brain’ & Kick-start Your New Year! My Q&A with Financial Planner Jason Hull
I admit it. I have the great opportunity to learn from and work alongside incredibly inspirational people. Whether they are world class athletes, volunteer coaches or financial gurus, they all keep me on my toes as I eagerly incorporate their tips and tricks into my own life. But why keep all their insight to myself? To kick off 2013, I am spotlighting one such extraordinary person with this Q&A so that we all can learn from the best.
I recently met Jason Hull during a HuffPostLive segment that we both participated in and was struck by both his optimism and his candor. A certified financial planner, Hull is a self-dubbed financial life coach whose own numerous life experiences have shaped him into a unique advisor for clients across the country. He is a West Point graduate who served in the Army and NATO before founding and later selling a software company. Embarking on a new chapter of his life, he leveraged his expertise in finance to start Hull Financial Planning, a fee-based financial planning firm. You can also catch him frequently contributing to sites such as US News & World Report with his can-do attitude and fresh approach to personal finance.
It’s my hope that this New Year’s Q&A with Jason Hull will kick-start you into assessing your present situation and your future expectations (both personal and financial) and carving new opportunities for yourself in the year ahead! (This phone interview has been edited where necessary for length & clarity).
Wendy Boglioli: Jason, thanks so very much for participating in our first Q&A of 2013! What made you decide to become a financial advisor and focus on the psychology behind saving and spending?
Jason Hull: I was an Army officer and saw a lot of my soldiers get taken advantage of by loan sharks, payday lenders and the like. I really wanted to help these guys out and that’s where it all began. No one is perfect, and I’ve made a lot of mistakes myself. I started looking into behavioral finance for my own situation. When I later sold my software company, I decided to pursue my goal of becoming a financial advisor and share my expertise with others.
Wendy B: One of the concepts you frequently discuss is ‘monkey brain’. What is this all about?
Jason H: There’s an ongoing battle between our ‘monkey brain’ and our rational brain. Our rational brain knows we’ll eventually be 70 years old and will probably be in a very different situation; it understands the importance of planning ahead for those long term realities.
The amygdala, what I call the ‘monkey brain’, makes you want something this very moment. It’s the part of our brain that comes up with excuses to make you happy right now… instant gratification.
The financial service industry does a disservice to people in some respects because it tells them what they need to do, but not how to do it. Most of us have common sense and can find books that will tell us what we should be doing financially. But very few of us actually do it: we don’t max out our 401k’s; we live on credit cards; we put off saving for tomorrow. It’s not that we don’t know what to do, but we give into our ‘monkey brain’ impulses and spend a lot of money for something that won’t have an impact down the road. In my practice, I want my clients to be aware of that internal battle within their minds so that they know not only what to do but how to do it.
Wendy B: What recommendations do you have for keeping your monkey brain in check month after month and year after year?
Jason H: First and foremost, you have to align your actions with what’s really important in life. Have an intentionality of where you want to go. I teach my clients to understand and incorporate what is important in their lives and what things they need to do in order to accomplish those things. Sure, you could buy that Harley Davidson motorcycle today or you could put that money aside in order to retire earlier and be better prepared for whatever lays in your future.
The other part to staying on track is automation. Our brain can only make so many decisions in a day. You wake up, brush your teeth, go to the gym, get a shower- these are a part of your routine and they help to reduce the number of decisions you have to make. Automating as much as possible in a way that aligns with your priorities makes everything simpler. Make your decisions beforehand when ‘monkey brain’ is turned off to ramp up your 401k contributions and savings and focus on your priorities in the long run.
Wendy B: You’re really like a coach to your clients…
Jason H: Exactly. I am a financial life coach more than anything else. Sure, I can do a Monte Carlo model or other financial graphs, but they don’t help if the client doesn’t follow the plan.
Wendy B: Given that you’re in the spotlight with blogging and interviews, I suspect you have a healthy dose of people who would like to be your clients. Do you have a preference as to which type you choose to take on?
Jason H: If I have someone with a really good attitude and willingness to learn, then they are someone I can help. The first test I mentally apply to a client is whether or not we connect. The second filter I apply is what I call the Dave Ramsey Test. Can you read a Dave Ramsey book and learn what you need to know without me? People that fall into this category tend to be in deep debt and they really need to get to the point of treading water before I can be of service to them. The third thing I ask myself is how open they are to learning new things and changing accordingly.
If a client just wants to find the 5 stocks that will make him money this year, I’m not the person for him. Most individuals aren’t going to beat the market in the long run. There are exceptionally bright PhDs who work for investment companies researching stocks all day, walking the floor, actively managing funds… and they generally under-perform the market! There has to be a level of alignment in terms of beliefs. You don’t need to believe everything I say, but I have a certain approach in how I do my planning and if that doesn’t align with your own, then we won’t work.
Wendy B: Assuming someone reading this is looking for a new (or first) advisor, do you have recommendations for finding the right one?
Jason H: Absolutely. First off, look for an advisor who has passed the Certified Financial Planner (CFP) test. It’s a comprehensive, very hard test and it’s a great equalizer. Second, look for someone with real life experience who can empathize with your position because they’ve been there themselves. If I’d never had $100k of student loans or never been close to broke or never sold a business, how could I possibly know what many of my clients are going through?
Third, are they legally obligated to be a fiduciary to you or are they willing to sign a fiduciary duty oath that is binding and put your needs ahead of their own? You want someone looking out for you and if they aren’t fiduciary they can sell you high commission products because it meets their needs but not necessarily yours.
Lastly, do they resonate with you? Are you going to have a relationship with this person? Do you feel comfortable exposing what’s behind your finances with this person? Our culture is very private about money. Maybe you have skeletons in your financial closet, but these are the things you need to be comfortable with sharing with your advisor so that they can help you.
Wendy B: Women have so many unique financial needs, as I know all too well. Yet many still take a hand’s off approach to personal finances, don’t they?
Jason H: Women do have special considerations as you know all too well. One example is the pay-gap. Women make less money than men for the same work. They also tend to come out of the workforce when they have children, and some choose to stay at home while raising their kids. Ultimately, they don’t have as much social security which means it’s more incumbent upon them to save even more. You have to be pro-active planning for this reality.
Men still tend to take charge financially whether or not they are the best person for the job. A recent study gave couples a basic math test on a 0-4 scale. There were couples where the man rated a 0 and the woman was a 3, and yet in a majority of those the men were still making the financial decisions!
Women need to get in the game. If you aren’t taking part in bill paying or retirement planning or whatever, you’ll get whatever happens to you. Women really need to take on the 50% role in their finances and have a say. Don’t stick your head in the sand!
Wendy B: Despite the financial knowledge readily available today, many people are still reluctant to develop and follow a solid plan that will get them on track and where they want to be. Why do you think this is?
Jason H: There’s something called the Dunning-Kruger Effect- essentially, it’s a belief that we think we can do more than we actually can do or are better at something than we really are. For instance, if I went to Vegas and won 5 straight times at a slot machine, I might believe that I’m somehow good at them, or have more luck, than others. This is the Dunning-Kruger Effect at work.
The proliferation of information on the Internet has led a lot of people to think like this. Because they read CNN Money or watch Squawk Box, they think they know everything about finance. So people can fool themselves into thinking that they know much more than they actually do when the reality is that they are only getting surface-level information. I’ll talk to some people that have tens of thousands of dollars in their checking account which amounts to a significant percentage of their financial worth! That’s crazy. They tell themselves they’re waiting for the next investment opportunity, but that’s not the way to go.
Invest in yourself with the right long term plans and you can reach your financial goals without needing a silver bullet. There is no silver bullet in financial planning… it’s about setting your goals and sticking to them.
Wendy B: What advice do you have for tackling things that may be far off or difficult to imagine?
Jason H: Everyone should ask themselves what it would be like if they were no longer able to do the things they currently do. That way, they aren’t making hasty decisions out of desperation later on when something crops up.
There was an interesting study done about a rigorous chemotherapy treatment that extends life by about 6 months. When radiotherapists were asked if they would elect to (undergo) it, overwhelmingly they said no. When oncologists were asked, they were slightly more willing but not much. Yet 41% of cancer patients asked said they would go through it to extend their lives ever so slightly.
The point is that life circumstances change us and we need to be aware of how our choices may change over time given those circumstances and battles. You want to do everything you can today to give yourself as many choices as possible tomorrow.
Wendy B: Many of us really do have a hard time imagining our future selves, don’t we?
Jason H: Absolutely, and that’s where the importance of insurance comes in. I think a lot of people undervalue insurance. I encounter people who believe that because they might not use it, they won’t spend the money on it. They’re projecting ahead into an unknown future and we aren’t good at projecting what will happen to us or how we’ll react to something outside our normal realm of experience.
Insurance is there to protect you from a terrible downside event that would wipe you out financially. It’s like home owners insurance. Just because you have it doesn’t mean you are going to set your house on fire so that you use it. It’s there if you should need it. We don’t like thinking of black swans in our lives, but it’s relatively easy and cheap to insure yourself against disaster that would otherwise ruin you. If that means that you don’t have cable but your family is taken care of if you get hit by a truck tomorrow, then that’s the priority.
Wendy B: How about advice for those people who have been responsible and done the best they could but still aren’t where they need to be financially?
Jason H: There are a lot of people who struggle and work very hard. First and foremost, I say you can’t give up because the minute you give up on anything- finances, work, family- you’ve chosen disaster. Everyone needs to keep fighting for what’s important to them. Second, do everything you can to invest in yourself because that trumps everything. Read, think, talk to people, pen new ideas every single day.
You have to be creative to bring about change and add value. If you’re a checkout clerk, look around and come up with ideas to make your store run more efficiently or treat customers better and share them with your manager. Don’t go in and just do the bare minimum. People see the value of change agents.
Wendy B: Words to live by.
Jason H: Yes, and it’s simple too! Be present, improve your mind, improve your craft. That’s how you claw your way out of your present situation. You choose your attitude in life, and it’s your attitude that will get you to your goals. Also, be prepared to take advantage of luck when it presents itself.
Wendy B: Speaking of going above and beyond, how do you find the time to stay fit amidst your busy schedule?
Jason H: I must confess, I have a dog who needs a good 30 minutes of walking each morning and another 30 each afternoon! So that’s at least an hour that I am devoted to walking every day for him. I was fortunate to be a cadet at West Point because it really forces you to become physically fit and stay that way.
As far as fitting it into my schedule, I’m a big fan of two people. The first is Tim Ferris of the 4-Hour Body. The other is Martin Berkhan of LeanGains.com who focuses on diet and what you really need to do at the gym. I only go to the gym 3 times a week but on those days I put in short yet really hard exercises. I’m a minimalist at the gym and functional with my activities. I like to hike and ski so my gym time helps me stay active so that I can continue to enjoy those activities.
I think a lot of people fail at getting or staying fit because they don’t reward themselves. Six days of the week I treat my body really well and have discipline with my diet. On day seven, it’s Monkey Brain Day and I get to eat more of what I want to eat. Over time, you actually find that you eat healthier even on those binge days because the junk food just doesn’t taste so great anymore.
Wendy B: Amen to that! The first few weeks of eating well makes a huge difference in your taste buds and what you crave.
Jason H: Right. If you’re always treating yourself to junk, you don’t get the same kick and you end up requiring more of it. I’m reminded of this sweet little old lady who my wife and I saw in Hawaii at a bar. She finished a martini and the bartender asked her if she wanted another.
I remember exactly what she said to him. “The second one never tastes as good as the first.” That’s the perfect example of hedonic adaptation. Appreciating what you have and acting with intention is the biggest lesson for eating, for spending and really for everything else in life.
Wendy B: Great anecdote. I’m a big believer in creating smaller, positive habits financially and physically. You can’t swim a mile without first swimming a few yards, after all!
Jason H: Silver bullets don’t exist! So I always tell my clients to set small goals on their way to their big goals. And to give themselves rewards. Make it mean something by having some skin in the game- that way, you’re more likely to follow through on it.
And if you slip and fall don’t beat yourself up. It’s OK. Dust yourself off and keep moving. So you put aside a few hundred dollars a month for retirement finally and the market goes down after the first quarter. It’s OK. Don’t let that keep you from your goals. As long as you’re present and know where you’re going, it’s going to be ok. It’s like Wayne Gretzky said, “You miss 100% of the shots you don’t take.”
Wendy B: That’s the perfect note to end on. I want to let everyone know that they should visit your website at HullFinancialPlanning.com to contact you, follow your blog and get the latest news. They will find a wealth of great advice there. Thank you for participating in our year’s first Q&A Jason!
Jason H: I loved talking to you, Wendy. Thanks so much.This entry was posted in Blog, Financially Sound and tagged CFP, Financial planning, insurance, Jason Hull, Long term care, monkey brain, Wendy Boglioli. Bookmark the permalink.