The following is the transcript from Episode 14 of Retire Happy with Roger Gainer, a financial and business audio podcast.

Roger: Purpose is understanding your why. Without that purpose, without that point, you can get buffeted back and forth with these different strategies and different challenges.

Clark: You’re listening to “Retire Happy” with Roger Gainer, president of Gainer Financial & Insurance Services, Inc.

Just about anyone you ask about money and retiring has their own opinion. How do you know what tools work and what should you avoid? In this episode, Roger explains how changes to tax policy can result in confusing times for individual financial strategies. He also offers three easy antidotes for this unease: establishing clarity of vision, efficiently pursuing your goals, and maintaining a focus on your plans purpose to ensure you’re making all the right steps. Thanks for joining us. I’m your host Clark Buckner. Let’s jump right in.

Well, Roger, welcome back, as always, really excited to talk with you today. We’ve got a couple topics in line all based around the theme how do you prepare for uncertainty. We’ll get to that in a minute. But first, hey, how are you? How are you doing?

Roger: I’m doing well, doing very, very well. We’re winding down the year and it’s a time to look back and reflect and look forward and plan. And I’d say this year more than most years, given all the stuff that’s going on out there, there are certain universal truths that hopefully we’ll get to cover today in our session. It will help people in any year.

Clark: Right. Well, you’re referring to is…we’re recording this at the end of 2017. However, the things that we are about to talk about, the things that you are about to share your insights on, they’re relevant always. But I’m catching you at a moment right now where not only have we had several interviews now here on the “Retire Happy” podcast, but we have seen a big year, a lot of big changes. There’s at this exact moment, taxes and tax reform, all of that, that’s been a buzzing question I know you have been receiving from your clients. There’s a lot of energy around it. And not to go too far down the rabbit hole, but would you want to maybe just paint a picture of what you’re seeing right now with your clients, what they’re seeing right now? And then we’ll talk about ways to overcome that uncertainty. I know you’ve got a couple of different antidotes, but we’ll get to that in a minute. But first, kind of what is just the state of the land right now? What’s going on?

Roger: Well, if you look back over the last 12 months, it has been quite arriving. I mean, I’m getting calls from people, let’s say, 2017 felt like a decade or certainly several years given how much really has happened. If you look back, we’ve had some political upheaval. Whether it’s good or bad, that depends on how you voted and how you choose to look at stuff. But there’s still been a lot of upheaval, a lot of change in Washington. There’s been a tremendous amount of challenging natural occurrences. We’ve had fires, severe fires here in Northern California. As we speak, there’s horrible fire still burning in Southern California. We’ve had floods and hurricanes in the Gulf area, in Houston, and parts of Texas and Louisiana. There’s been Florida, Porto Rico. There have been challenges in Europe and things in the war. I mean, it’s all over the place.

I know that a lot of clients and even colleagues and folks in the industry, there’s a lot of that deer-in-the-headlights feeling these days. People are almost frozen and unable to make decisions and just stressed out and depressed. And really, there’s so much reason for optimism. So certainly, we wanna get to some of those ways to navigate these challenging waters that many are feeling impacted by.

Clark: All right. The waters of uncertainty, I guess we could call it.

Roger: That’s a good one.

Clark: Right. And there’s always gonna be things, whether it’s a year like we’ve had now, but as we’re thinking about the future, and we don’t know the future, how do you talk to your clients or how do you normally just sit…generally, how do you walk and navigate? I like that word navigate. How do you walk through that with just finding peace because money is already so stressful? Let’s start from the top here of some of these ways to overcome that. How to you even begin to navigate that?

Roger: Well, the first thing I like to try to keep is balance. It’s so easy to spiral into all the bad things that are happening or at least my perceived bad things because remember, very few things are good or bad for everybody. So a lot of it has to do with perspective. And so the first thing to do is to maintain perspective.

I tick down a lot of items on a list that were kind of negative. Well, let’s look at the other side of that, that coin over the last 12 months. Some of those thing, the upheaval, people’s feeling about the election has led to increased participation in government and society by many groups that previously were disenfranchised. I’m one of those people that believes the more people that participate in the process, the better we all are going to be. So instead of disenfranchising folks, we are enfranchising folks. There’s been a complacency that is starting to shake off, and it’s always those kinds of increased participation that creates meaningful change in our history. So that’s very optimistic to me.

We have high employment. We haven’t had as high a level of employment in decades. For the first time in many, many years, there’s as many jobs looking to be filled as there are people looking for work. So, folks are being more selective about the kinds of jobs that they’re taking. To me, that’s a really positive sign.

Clark: Interesting. So, what you’re saying is, when you talk about balance and perspective, what might seem like a really challenging year, based on how you look at it, there are still good things and there are still good ways.

Roger: Yeah, we’ve had a record-breaking stocks this year. We’ve set more new highs than I think in any year in recorded history since we started having recording stock market history in the late 1890s…mid-1890s, excuse me. We’ve got a relatively stable economy. There hasn’t been a lot of ups and downs. We’re seeing pretty steady employment reports, pretty steady inflation reports, pretty steady profit reports. So that stability really is something that we haven’t seen in a long time. It’s been building and going on for a number of years, but this year was the first time, I believe, ever that we had an entire year, now, keeping my fingers across because we’re not at the end of December yet. But if December ends up as a positive month in the stock market, it’ll be the first year ever that we had 12 months where the market went up, no down months at all. That’s incredibly unique in stock market history.

So there is a lot of stuff that has been relatively positive. A lot of folks, in conversations I’ve had with clients, didn’t wanna invest in the stock market, would like to be worried about it. And yet if they took the plunge and did participate, they’d been rewarded here this year relatively handsomely. That’s not to say this will go on forever but that kind of stability does suggest that we still have more upside to go.

Clark: Good. Well, I’ve also heard you say before, as we’re thinking about how you prepare for uncertainty, I’ve heard you say a phrase before that is the antidote to fear is clarity. And I know there’s a lot of different antidotes that you have to finding peace with how you are helping your clients and all that. But the three antidotes I really wanna talk with you about today, I’ve heard you say clarity, efficiency, and purpose. So we can start wherever you want. Maybe we can start with clarity since that’s one of the first antidotes you think about. So what does clarity mean and how does someone activate that to use that to overcome the fears that they have?

Roger: Well, Clark, that’s a big part of our process is to gain that clarity. That’s really the majority of where we start when we engage a new client. There’s a number. I had a lady in here yesterday who’s been a client of mine for just about 10 years. And when she first came to me, she was stressed out, unhappy in her job, uncertain about whether she would have a secure future, really pretty much depressed. It was almost hard to meet with her sometimes. And now she’s traveling the world. She moved into a wonderful retirement community and she folk-dances, and she’s just happy as can be. She goes on folk-dancing trips and she’s made friends in different parts of the world. And it really came from clarifying what was bugging her and what she wanted.

She told me yesterday that she was talking to a friend of hers and she said I saved her life. Now, I think that’s a little bit of hyperbole and a little extreme. I didn’t save her life but what she keeps…she sent me cards and notes over the years and it said that she was able to cut through her stuff. And I believe it was the clarity and creating that vision, that purpose for her.

Based on the calls I’m getting, the emails that are filling up my email box from a variety of resources and what I’m reading both in the newspaper and online, this uncertainty is really freezing people. All these cross currents are coming in and the fear. We’ve got this tax reform and everybody’s worried about how is tax reform going to impact me. And many people are gonna get hurt by this tax reform. It’s more like a tax cut than tax reform because, frankly, it was supposed to simplify things. It’s made it actually much more complicated than it’s ever been.

That’s exactly what happened when Ronald Reagan simplified taxes in 1986. He doubled the size of the tax code. So it didn’t really get reformed, but within that, people are gonna start looking at how does it affect me. And it’s so easy to just focus on the tax element of it. The reality is if you focus too much on that tax element, you may miss opportunities. You may put yourself behind the eight-ball and not make progress towards those objectives.

So that clarity again, this is where that comes in. If you are clear at what your purpose is, why am I doing this? Why am I saving money? Why am I investing? What do I want my life to look like? If I’m sitting here three years from today or five years from today, looking back over that period of time, what has to happen to make me feel good about my progress, to make me happy with my progress? When I can answer that question, then I can pick and choose which of these changes serve me, which of these things that I can ignore. And instead of getting buffeted emotionally by everything other article, tweet, news broadcast, and locked up, I have reference point. I have that ability to sort through the clutter, if you will, and really sift out the things that are gonna serve me my purpose. It’ll make you happier once you have that clarity. I guarantee it.

Clark: Right. And it really sounds like, at the end of the day, it’s all about you. You keep talking about that individual focus. That’s what’s coming out to me loud and clear.

Roger: Well, think about it. How can you help others if you can’t help yourself? How can you care for others if you can’t care for yourself? It’s like when you get on the airplane and they tell you, if you’re traveling with young folks, and the oxygen masks come down, cover yours first and then help the people next to you. Okay. You’ve gotta take care of your own because let’s face it, nobody else is out there looking out for you but you.

So when you build your team, when you get your advisers together, when you have tax counsel, or legal counsel and financial counsel, these people, you have to vet them that they understand your vision, that they are part of your team to get you what you want. And nobody can take over that responsibility for you. There’s lots of ways that you can employ and build a team to get you that stuff. But nobody can tell you what’s important to you. You have to come to grips with that yourself and what your values are in those things. And then you’ll have the context to make those good decisions.

Again, I keep referring back to our process, but that’s where the Thought Organizer comes in. And if you’ve listened to previous podcasts, we’ve talked about this tool. It is available on our website, and you can use that tool. It’s the beginning of the process of gaining that clarity.

Clark: When you’re talking about also trying to cut out some of that noise and finding that peace with yourself, kind of finding that confidence within yourself, help yourself first, that, I think, is a good transition to that antidote. You talk about efficiency. I think, it seems like when you’re cutting out the noise, you’re creating efficiency. What does efficiency really mean though, in this context?

Roger: Well, efficiency, in this context, is really how we utilize capital money to deliver our lifestyle, both now and in the future. That’s what the efficiency I’m talking about. I find that most folks are leaking from their financial plan in ways that they don’t know about, unknowingly, and in many instances, unnecessarily.

One example is the way folks arrange their mortgage and financing of a primary residence. I see people utilizing strategies that seem logical. We’ve talked about this in other podcasts, and I’ve written blog posts about it. What seems to be important in a mortgage, do I get the lowest interest rate, is really not what are the actual cost of that mortgages. So we’re not gonna get too deep into that subject here but you can refer back to my blog and look up some of those articles. If we can plug that hole, that takes hundreds of thousands of dollars, in many cases, that we’re leaking out over a lifetime and put them back as an asset. When you do this, you can reduce the amount of risk exposure that you’re experiencing because you need to take on more risk to get a higher rate of return to overcome the inefficiency.

That was quite a mouthful to [crosstalk 00:17:50] completely confusing you, Clark?

Clark: No, that makes sense. So, efficiency, it’s more about eliminating the waste.

Roger: It’s how we use money.

Clark: Trying to plug all the holes.

Roger: Yeah, how we use money ever each and every day, understanding the cost of consumption. It’s not that we’re not gonna buy a car or go out to dinner or go on a vacation or enjoy groceries or buy new clothes. It’s how we finance that. Everything you spend money on is finance. I think maybe that’s that topic we will get to in the 2018, it’s understanding that all spending is finance.

All financial decisions have a financing cost, and so understanding how to deliver those different items that make up your lifestyle at a lower net cost, that’s what we talk about when we’re talking about efficiency, whether it’s reducing taxes, fees, hidden costs. It comes in many shapes and sizes. This is a real big reason to use an advisor is because a good adviser that is truly an advisor, not just an investment manager, is studying taxes, is studying alternative investments, is studying different strategies, is understanding risk management, estate planning, control issues, and all of these things and how to make it all work together. See, it’s that coordination and integration of all your financial decisions that leads to that efficiency.

Clark: I hear you. That makes sense, and that brings us to our third and final antidote, purpose. What is purpose? How does that fit with clarity and efficiency? How does purpose fit into how someone can prepare for the uncertain future?

Roger: Well, purpose is understanding your why. Without that why, then you’re kind of just chasing your tail, if you will. It’s like the guy we sat next to on a flight a number of years ago. I was in the window seat. My wife was in the middle, and this gentleman was in the aisle seat. And she was engaged in a conversation with him. And I was reading something from a conference we were just coming back from. And I wasn’t paying attention to their conversation, but all of a sudden, I hear, “Oh, and my husband is a financial advisor.” And this guy perked up and he wanted to meet me. And he leans across my wife, he looks at me, and he said, “Nice to meet you. I’m looking for an investment that pays 15% with no risk.”

I don’t know if he was testing me or what. The gentleman had started and sold a number of high tech businesses. He was worth quite a great deal of money. And I looked at him and I said, “Well, why do you want an investment that pays 15% with no risk?” And he looked at me and says, “Well, who wouldn’t want that?” I said, “I don’t know, but I wanna know why you want that.” And he couldn’t answer because he didn’t know what his purpose was, what his why. So he was going through the motions.

He was starting businesses. He was making tens, if not hundreds of millions of dollars, and he was still interested in having more, and yet the gentleman was…as I got to talk to him, he wasn’t happy. In fact, he was rather melancholy and lived a very melancholy life. He was kind of a shut-in hermit even though he was a young man, probably in his early 40s. He went to movies. That’s what he did with his life, and he went on his own. That’s what he and my wife were talking about, were movies and books and film. That was it. He didn’t have personal relationships. He didn’t have things that brought him joy. They’re just things he could observe and analyze. That was really instructive to me, money, they always say money can’t buy happiness. And that was just an immediate illustration of that fact.

So, when you get that purpose, why am I doing this? Do I wanna change mankind? Do I wanna improve things? Do I wanna make my family better? Do I wanna discover better health? Whatever it is, that becomes your filter and also becomes your focal point. So if things don’t serve that purpose, that why, then you just disregard them. You discard them. You don’t let them get in your way. That’s really why that becomes an antidote.

When we look forward to 2018, the first quarter is gonna be just filled with articles and commentary about the new Tax Act. This is gonna be the talk of the town. It’s gonna be on everybody’s lips, and you’re gonna start worrying and thinking. And I guarantee that there will be some new planning opportunities available as we dig through this 500-page monstrosity that, by their own admission, they’re not sure, the folks that are voting for it aren’t sure what’s in it. And I saw the head of the House Ways and Means Committee last week said, “We’re gonna have the mother of all Corrections Act,” that was a direct quote of his, to fix this thing next year because there’s all kinds of loopholes and stuff that are riddled throughout this legislation.

So as we in the industry get a chance to look at it, there’s gonna be lots of opportunities for you, but whether those opportunities make sense for your specific situation, without that purpose, without that point, you can get buffeted back and forth with these different strategies and different challenges. So, clarifying that purpose and what are your objectives, that’ll help you sort through all this stuff that’s gonna be coming down. We’re gonna be drinking from a firehose for a little while, with all the changes and information and data that’s gonna be coming out about all of this.

So, that clarity, that purpose is gonna allow you to pick those opportunities that are hidden gems in this legislation. At least I hope there’s hidden gems. There almost always is. There’s been some pretty onerous tax acts since I started my career in the ’80s. And almost every time, there’s something that you go, aha, I had no idea this was in there because most of the time, they don’t know either. That’s the fact.

Clark: Wow. So interesting, yeah.

Roger: When you look forward, and one of the things that…always remember what happened before. That’s the other perspective that will help. Every time we go through low volatility periods, and I talked about how there hasn’t been a market correction this entire year, there hasn’t been a down month at all. We’ve gone nine years without having at least a 10% correction in the markets, which is unprecedented, and it’s like winding a spring. We can ride this thing but, boy, it’s time to be very, very cautious and to make sure that these strategies, the profits that you’ve made over the last couple of years stay in your portfolio.

So I’m not suggesting people sell. I’m not suggesting people get out or ignore the markets. But if you know where you are in your life cycle, if I’m 40 and there’s a correction, let’s think about the last two major corrections. It took five years each time to make up for the lost ground. So if you are within 5 or 10 years of retirement, do you have the time? This is what I mean by clarity. If I don’t have time to recover, it doesn’t matter that I made 10% or 15% or 20% or 5% last year. What matters is that I don’t lose 10% or 30% or 50% sometime in the next two or three years. That’s way more important. It’s math and science. I’d be happy to go through the math with anybody that would like to understand.

And when you have the backdrop of clarity, of purpose, and you’re working efficiently, this frees you up and you’re thinking to make clear decisions about investments, risks, strategies, and those sorts of things. While there are opportunities and reasons for optimism, there’s also a big yellow light flashing, it’s time for caution. It’s time to read between the lines and to know where the exits are. Just like when you get on that airplane, the first thing they tell you is figure out where the closest exit is, in case something goes wrong. So know where your exit is from those financial strategies that might require change or rebalancing.

Clark: Roger, this has been super helpful. I really loved how you started off by talking about balance and then using clarity, efficiency, purpose, and how you navigate those uncertain waters. And I know you just said you’d be happy to talk with someone about the math, science, using your lens and your experiences. So the best way to do that…I know you mentioned it once, but we’re gonna mention it again because it is the first step that someone can take with working with you. That’s the Thought Organizer. So do you have any final things you wanna maybe add about the Thought Organizer and why that’s so important with the process you follow?

Roger: Well, the Thought Organizer, I always wanna remind folks, there are no wrong answers. It only takes about 10 minutes to fill it out and just whatever pops into your mind, you’re filling this out for yourself. You’re not filling it out for me or anybody else. The other thing is if you’re married, you have a spouse or significant other, that is your financial as well as emotional partner, you should both fill one of these out separately.

Clark: And then what?

Roger: Well, the number one reason for people getting divorced is finances, disagreements over money. So you wanna know where your differences are and gain clarity. There’s that word again. So if you and your spouse go to separate corners to each fill it out, then you can compare and see where you guys are on the same page and where you have differences, and then discuss those differences in perspective or feeling, because they’re both valid and they’re all valid. These are just emotions, but you can get on the same page with each other. It will take a lot of the retribution, the anger, the suspicions, the things that happen when you’re not sure where your spouse is coming from in regard to money.

This is the first step in that clarity of purpose and discovering your why is that Thought Organizer. I can’t emphasize enough why it’ll help you if you’ve never done this exercise. And then if you need somebody to help guide the conversation and help you apply that to you individually, anybody that’s listening to this podcast today, if you tell me you listen to the podcast, I’m happy to offer you a free consultation, about 45 minutes, and we can go over things and take that next step in helping you build your own clarity.

Clark: Roger, thank you so much, as always, really enjoyed our time together, and I can’t wait for our next session.

Roger: Well, Clark, I always look forward to this. I wanna wish you and your family just a great holiday season. And there’s so much to look forward to in 2018. Take advantage of it.

Clark: Thanks so much for listening to this episode of “Retire Happy.” Be sure to head on over to gainerfinancial.com to download your Thought Organizer to get started. Roger L. Gainer, ChFC, California Insurance License Number 0754849 is licensed to sell insurance and annuity products in California, Illinois, Arizona, Pennsylvania, and New York. Roger L. Gainer is an investment advisor representative providing advisory services through HFIS, Inc, a registered investment advisor. Gainer Financial & Insurance Services, Inc. is not owned or affiliated with HFIS, Inc. and operates independently. Thanks again so much, and we’ll see you next time.