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Tom Willis in conversation with James M. Lenhoff

James M. Lenhoff

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Tom sits down with the CFP of Wealthquest James M. Lenhoff. He is the author of “Living a Rich Life: The No-Regrets Guide to Building and Spending Wealth”. He is also the host of The Rich Life Podcast.

James earned a Bachelor of Science degree in Marketing from Miami University in 2000. Before joining Wealthquest, James spent five years with the Northwestern Mutual Financial Network as a Financial Representative. He spent most of that time training other Financial Representatives in financial planning techniques. James earned the right to use the CFP® mark in 2004. James is passionate about the emotional and relational aspects of money. He is on a mission to change the conversation about money.

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YouTube Transcript

Hey James how are you sir welcome to the podcast I'm doing great tom thanks for having me I'm excited to be here absolutely and we will call you James because Jim is your dad apparently that's right. My dad is Jim and I've always been James or for some reason everyone still calls me Jim but it doesn't shorten it. I've never understood that it's the same number of syllables just call me James right.

I just heard a great one world wide web how many syllables is that uh should be three all right so how many syllables is www oh so many all right nice is it nine I was going to say it's at least eight right. Although we we meld it together it's it becomes this like mush we don't actually speak out the w it's yeah right that's true that's true that's our that's our brain our subconscious brain saying hey dummy yeah stop saying it the long way this has got to get shorter I can't do this every day that's right.

We wanted to talk about your expertise you wrote a fascinating book called the living a rich life and there's very few books that I'll read kind of front to cover in in a day or two and yours is one of those um so hats off to you partially because it's not terribly thick for our audience it's a huge reason why people holding it I'm holding it up it's uh 160 pages roughly so that makes it digestible but but more importantly you you cover some pretty pretty cool topics some really interesting perspectives and mindset around money .

I think is is very values based and truly is about living a a deep meaningful life you know a rich life in that regard um so why don't you we'll go through some of these concepts because i think the the leaders out there listening the ceos out there listening will be pretty um enlightened and or confronted by some of these concepts i know i was and so where where should we start what's the most provocative uh one of the most provocative ideas in your in your work and in your book yeah well you know the thing that's so interesting is uh i when we wrote the book the idea really was hey i want to make sure everybody actually finishes it i don't want to just keep blathering on for 250 pages i want them to actually get done with it because i wanted to get this wisdom that i've gotten to glean by walking life with hundreds and hundreds of families over the years and what i learned is that money and regret both compound and everybody's focusing on the money part they think that the goal is just compound as much money as possible and what they're missing is that they're also compounding deep painful regret that actually can get a lot bigger than the pile of money you're making and the biggest way i see that is that people are trading relationships for money and they don't recognize that they're doing that and every time that i bring it up everybody says oh gosh no i would never that sounds horrible how would anyone do that and my answer is we all do it all the time and we don't even recognize it and the the concept that i talk about in the book that's mostly related to this is this idea of the lore and the lie that there's these two forces pulling on us at all times and the lore is the lure of more it's this idea that just a little bit more just a little more security just a little more stuff that'll be where we will feel better and the reason why that happens by the way is because we experience life in the marginal change so everything that is currently normal disappears what feels different is that next level of new which is why we're constantly being marketed to like you need this next upgrade you need the next experience of the new gadget because it feels new and it's exciting everything else is normal uh and so the lure of more is this what i think of as like longshore drift you go to the beach you plant your you know uh your umbrella in the sand and you get in the waves you start splashing around at some point you look back and you say uh where's my stuff and you've drifted 150 yards down the beach you never intended to go sideways it just happened and that's what happens with couples all the time where they their marginal cost is the way they experience buying that next marginal new thing so that next car is only slightly more monthly payment the next house is only a little bit more mortgage payment that next promotion is only one or two more days a month of travel everything is just this marginal change that doesn't feel like it costs much because we don't really fully experience what we're sacrificing today because we're used to it so that next change is all we're experiencing and at some point they pop up and they go we never intended to be working this much we never intended to be this disconnected from the stuff that matters how did we get here and it's because that lure of more was just slowly pulling them away from what they really cared about but the second force is really interesting and your audience in particular i think falls prey to it and that's the lie of being irreplaceable well let's hold off on that one for a second we'll keep the audience in dramatic suspense that's great keep listening to to get to the irreplaceable and stick with this um this first concept i love you're clearly a finance guy use words like margin as if everyone uses those words that's awesome um so i i love the idea that you know that margin the difference between where we are and sort of the the new thing you know in my case the new thing i bought at costco that i don't really need is new and it's kind of got this appeal to it because of that and that's the that's the margin that you're talking about and it's so easy to just kind of fall into that trap i remember being at costco about six months ago and literally forcing myself to take something out of the cart and put it back on the shelf it was it was nothing short of agony which is ridiculous right like as you think about it it's it's it's some it's lunacy and yet i was literally like struggling to put this whatever it was 12 item back on the shelf just as an exercise in like self-discipline right i'm a professional life coach i should be pretty good at that and it was so so hard to do that so what's going on in the brain you think what's what's happening that makes this stuff so hard to to get our hands around the thing that's so fascinating about that is there's there's been a i'm a huge behavioral finance junkie like i'm i'm reading all the behavioral finance studies that i can get my hands on because i think we've been assuming that money is mathematical and that the reason why people need guys like me is because the math is really complicated uh it's not actually it's pretty straightforward it's math the hard part is that money is emotional it's relational it's where all that humanness gets mixed up and it's not that none of that is actually formulaic it's all really experiential and uh inconsistent but one of the things about things that's so fascinating is this idea called hedonic adaptation which is a really fancy way to say that things become familiar over time and that's actually why they lose value so you buy the new gadget and at the beginning you get that rush of this is new this is different you know my my phone when i first got my phone i could turn my face into a unicorn and text my kids as a unicorn and it was so cool for a week and now it's just my phone right i don't even think about the value that it brings because it's just this thing that i'm used to and so part of the reason why we're always hungry for new is because that's what actually feels valuable we get used to the things we already have it's ironically the reason why experiences are always worth more than things and we have a hard time registering that because we look at experiences and we're like yeah but that trip to disney costs more than the car that's sitting in my driveway that i could sell how on earth is that trip that's vapor that lasts for a week worth more than this thing that actually does have tangible value and the reason is because it gets less familiar we have to bring it back we have to reminisce and tell stories and share memories about it and it becomes deeply valuable to us that we share that experience together because it loses its familiarity which doesn't make sense on the surface but it's we intuitively know that shared experiences with our family are valuable but when we're faced between buy that vacation or buy that new minivan because the old minivan is struggling we'll pick the minivan over the vacation because it's tangible and it's backwards and what is it called hedonic what hedonic adaptation what's the what's the i get the hedonic part what's the adaptation part it's the fact that we adapt to hedonism if you really break it down we get used to whatever that new feeling is of you know that hedonistic pleasure fades because we adapt to it so we need a new hit and a new hit so even if it's not sort of the the more extreme um version of of hedonic behavior hiddenism it could be as simple as my 12 costco purchase that's exactly right it's exactly right it fulfills that pleasure need that i have yep yep and and what's below that you know if we keep digging even deeper and there's some there's some fear there that we're trying to to grapple with or we're trying to fill some void yeah i think what most people get stuck in is this uh perpetual cycle of medicating negative emotion with money a lot of times it's money that they don't have which is why we have a huge credit card you know debt burden in this country because the pain of paying that credit card payment is less painful than the pain of feeling inadequate or insignificant or like a failure or board and so we medicate that negative emotion by using money to purchase what we think is an experience but it's actually just a thing and that that actually is the way that the marketing agencies have been tricking us like they knew this forever we're just kind of figuring it out but you know if you notice you know to go back to the phone illustration uh you never see an a tv commercial or an ad on the on the web that's promoting a product that is framing it in its in its tangible state in other words they don't talk about the iphone in terms of how fast the chip is or how much memory it has or any of that kind of detail the ad is a beautiful person having a beautiful experience holding that thing and we think we're buying an experience when we're buying that thing because we saw that experience and that's what we're craving is experiences marketing agencies know experiences are what matter so they turn their thing into an experience and promise that experience and that's what we're buying like oh that'll make me feel better and then it's just a thing and it doesn't feel bad ironically we we uh spent our vacations on our phone looking down and missing the experience that we bought the phone for in the first place exactly that's right yeah we end up stuck into this email jungle on the thing that uh isn't actually giving us any experience that we like yeah that's so funny

that's great interesting so the the this idea of money and uh regret compounding you know in the case of money most people know most of our audience that would assume knows that you save money now you put it in the bank you invest it it compounds and it adds up and it's amazing how quickly that i remember i remember when i was in sixth grade i had a paper out and my dad gave me a one sheet of paper and it was basically a chart that showed if you save this many dollars per day over this period of time at a seven percent return you'll be worth you know x amount in 10 20 30 40 years and i remember thinking as a kid i could be a millionaire by the time i'm in my 30s if i just save everywhere the dollar amount was but it was not that big yeah it doesn't take much i could probably do that with my paper up and it was this life-changing experience and and lesson in compounding money so that that concept i think is probably pretty broadly understood although we suck at doing it by and large as a society which is where our debts are so high and whatnot right all the way to the all the way to the top all over the presidency yeah but but what's this idea of compounding relationship or compounding regret what's that all about yeah the the thing that happens in the regret space is that uh we we keep throwing this pain on a pile of pain and so we choose to take the promotion because it's going to get us further along in our career i'm going to get status i'm going to get you know power i'm going to get a raise whatever and in that choice we move further away from our spouse and our kids or in that choice we move further into a workaholism problem that then perpetuates itself and those regrets compound in that now we feel like we have to somehow make it up so now we're going to work harder to make more money i had this conversation with a client where they were saying if i just get to hear then i can get to there and if i just do uh you know 15 days of travel then i could get to here and if i do all that then i'll be able to pay for my kids to go to school i'll be able to pay for my kids college if i just take all these steps then i'll give it back to them right and what i find is the hardest truth that those individuals face when they get to the end of that cycle is they were working so hard to get something that the people that love them never wanted right if i were able to sit that person down and say all right let's talk to your kids and ask them uh hey i'm gonna make a deal with you you're gonna not know me i'm going to not be able to call out your identity or give you any confidence or leadership i'm probably not going to be a huge part of your life but you'll get to go to college for free or option 2 i will be present i will be connected to you i will make an impact in who you are and you will be known and you'll have some student loans which one do you think they pick but we're picking for them and a lot of times we're picking the one they don't want and the pain then really gets to this compounded level when the the person retires after spending all of their time working to buy back what this thing was costing somehow make it up to their family and then when they retire they walk in the door i can't tell you how many times i've seen this they walk in the door to a spouse that's learned how to live without them and they don't know what to do they don't know what it looks like to share experiences and that freedom of retirement and that person unfortunately ends up crawling back into work because that's the only place they feel safe and it's just devastating to watch these 70-something year olds that had all these dreams of what their life was going to look like and they're still working because they don't have an option of anything else they don't know what else to do with themselves and i'm i'm not old school like retirement means you never work again i think that's changing and i love that i think we are called to be productive i think it's a good thing but this over focus on achievement and production at a level where it actually actually costs the things that are irreplaceable that's when it's crossing the line and those regrets just keep compounding and the cost of those decisions uh hurt even more over time and this all hit me i'm sitting with across the table from a client who's 80 and we had this really sweet moment where he was telling me all the things he wished he'd done differently and then 10 minutes later i'm sitting across the table from a 30 year old who's telling me all the things they're about to do and why they make all the sense in the world and they're absolutely the right decision and i'm like oh i just talked to you as an 80 year old 10 minutes ago and that guy would tell you that everything you're about to do is what he wished he'd never done so what are you going to do with that like how do we change it how do we get ahead of that that's really the mission i'm on is trying to get ahead of some of that trend because a lot of times people will stand up in their 80s and say don't do what i did and everybody will say yeah but you did it we all have to do it there's no alternative and i'm trying to figure out a path for that alternative what does it look like for us to stay connected to the stuff that matters and still compound money but my bigger role is preventing them from compounding regret that's what i care about more yeah because in those cases it's there you know the the counter argument is well yeah you're 80 and you're a multi-millionaire like it's easy for you to say right you wouldn't do it again but i'm not a multi-millionaire and i got a lot of work to do um that's right so what do you say in that case yeah i think the key in my experience is having a really clear vision for what enough looks like what is enough what is the end target if we can craft a really clear vision of where we're really trying to get to because the assumption is always well the answer is just more right i mean john d rockefeller uh somebody asked him when he had already amassed an absolute insane fortune uh how much money is enough and he said just a little bit more and it was kind of tongue-in-cheek and funny but i think it was pretty obvious that that actually is really how he thinks but we don't know where to draw the line because we just assume it's always better to have more where if we can back into just like the illustration you had time where you say if i save this much i'll be a millionaire so i'm just going to save this much like if i just keep doing the discipline and the diligence then th that'll take care of itself and that means the rest of this i want i don't need more because i'm already on track so i can start to say no to things that are pulling me further into you know up you know further up and and further to the right right if we can get to this place where we say no no this is this is great this is contentment this is satisfaction and i'm on track and i can have confidence then we're free to be much more intentional with the things that matter but we've never cast that vision so we'll always assume we're under you know resourced we have we haven't done enough we got to do more because we don't even know what we're aiming at and that's the biggest problem yeah and um we'll get into lifestyle cap in a second but i think which is a really cool concept from your book but the first thing you said i think was we need to have the discipline to to be intentional about our savings basically that we need to have an intentional plan and then stick to it which again we're not terribly good at because we see the next thing we see the country level you know that we want to join or the new car and so it's like i'll save more next year so what's the what do you what's your advice there how do we how do we create that discipline to just stick to a plan because over a 30-year period it is amazing how much money can build up yeah i think the the biggest missing piece in so many people's lives is some sort of family vision some sense of what we're trying to accomplish what does it look like for us to look at the year that we're living this year and say well done this was exactly on target this is what we intended because we if we bring no intentionality to the to the day then we're completely subject to emotional whims and that car is nice i think i'll just go buy it right we we make quick decisions that are emotional with no reference point to what we've decided ahead of time and so having some of that decision in place intentionally before you walk into the year before you walk into the next five years you know exactly kind of what this thing is and what it looks like to find success differently than just i have more money um but it really leads to uh i think the the idea of the live being irreplaceable if you're okay with with going into that conversation no james nice try though that was good

you're not gonna let me go there we're gonna we're gonna keep the audience suspended here because i wanna touch on something that i think is is within that thread you know this having this family vision i don't really think about it that way but my wife who you know is is a finance nerd um also and so we've just always done that we've always talked about it and we actually call it a center meeting where we when we get first got married we met about every quarter but then it was every six months and then it's every year and now it's every couple years but we're we're literally in our case centering our lives around god and then family and friends and on and on but then we're also talking about what's the financial discipline we need to to fulfill some of those dreams and we've been very intentional and accomplished you know all of our dreams as far as that goes and so it's not that hard it just takes some intentionality a few hours every few months to to do this and so for the ceos out there you know i think it's important that they lead by example that they're they're doing that first and then helping your employees there's a great book out there by uh matthew kelly called dream manager oh yes that's a great book i sent to you and yeah and for the for the ceos out there i'd highly recommend you read it because it's a it's a whole different way of thinking about retention and about keeping your your best employees it's it's a good book it won't be as good as the one that the brand are writing about the the great engagements and coming out in a few months um but matthew kelly is pretty decent he sold a few million copies more than 3 million yeah i think he's done all right with it but he gets into how do we how do we help our employees fulfill their dreams you know how do we create an uh sort of a financial discipline help our employees create that same financial discipline so what's your what's your advice there and then i'll finally let you get into the the topic you want to talk about yeah well absolutely and we actually have a uh a family vision course that we offer for free for anybody that wants to go through it and really it is interesting to me particularly when we're talking to an audience of business leaders i mean how much time do we spend on mission and vision for our companies and then how much time have you spent on mission and vision for your family how much more important is it that your family knows where they're going right and so what we've set out and you know there's lots of different processes here but what we've set out is that uh if you establish a mission statement or a vision statement whatever you want to call it for your family but wrap that with four or so values right so we have uh four values and we tend to frame them in a we will statement so in our our family vision for example our four values is we will be authentic and sincere we will live in deep relationship we will remain steadfast in christ and we will lift the burdens of others those are our four values so now the beautiful thing is my mom stitched cross stitched this beautiful piece that has that those values and has our mission statement uh up on our kitchen wall and when my kids come and they say hey i think i want to do this thing i just point and say how does it fit i don't have to say no if they say oh this is going to help me lift the burdens of others i have to say yes but if they look at those four values and like yeah it doesn't have anything to do with those things it's like well then we're not doing it right so it frames our decision making for everybody in the family it's not just me and my wife it's it's our kids it's this as we go into the next year how are we going to lift the burns of others how are we going to live in deep relationship what does that look like how are we going to intentionally move towards these things in the next 12 months when you have that reference point that's a fun conversation because then you can look back and say man we nailed it we did these things man we need to do a little more of this next year this one felt a little like we missed it that's okay but we at least know what we're aiming at and that is 99 of the problem we just don't know what we're aiming at so we never feel like we're hitting it and so yeah i that's the biggest hill to climb more than anything when it comes to this stuff is just getting the target right yeah and and helping people to to focus on the right things it's um not rocket science but it does take an intentional thought process and i just wrote down that's a it's a great idea i think we could add to our work is encouraging people to to think about what are their what are their family values we're not big into vision statements and mission statements because they're not worth much especially in organizations um because most of the time it's compliance driven it's not genuine heartfelt commitment that's where we we miss the mark it's a big difference between having a mission statement and being on a mission and the job of leadership is to get people on a mission and that they're that they genuinely care about um well and we've done that with wealth quest we've brought that in you know where we have we will be we are leaders we are pioneers uh we are servants and we are advocates right so it's these identity statements that are about who we are and how we're going to care for people and they need to be broad enough that everything can fit under there like i've and by the way i've never seen anyone in a family mission or vision uh statement that they've put together have one of their values be i will be vice president of muckety mucks or i will achieve you know assistant executive director of blah blah blah that never makes it it's never actually what matters and yet we end up getting sucked into that's all that matters i got to get there when you really pull yourself out of that system and you start to ask yourself questions around what your family's trying to achieve those things never make it on the list

i love it i love it all right i'm resisting the temptation to go down another tangent here so i'll let you i'll let you finally get to this topic you want to talk about so go ahead jump in that's awesome well it's i mean i can always tie into it somehow so that that particular statement even that i just made that people don't have i will achieve you know executive vice muckety-muck that never makes it but it ends up being the thing we end up aiming at and that's because we've fallen prey to that second force that causes us to trade relationships for money that lie of being irreplaceable and it's a rip current it pulls us away really quickly from the things that actually matter to us and what happens is we hear a story and that story sounds something like you're the only one that can do it you're the only one can lead this team manage this project close this deal we need you and the problem is that story is so intoxicating i i almost like uh picture pepe le pew with the scent floating over him and he's like floating towards the scent of the uh the cat right this unbelievable draw towards this sense of superhero and importance and status and significance we just keep getting sucked further into it and we turn to our spouse and our kids and we say i understand they need me i'm the only one that can do it i have to go and they can't compete with us in that space like my kids can't say well you know dad you've been such a good dad this quarter we're gonna go ahead and promote you to executive vice president of fatherhood we're gonna give you a bonus this quarter we're really happy with how you're showing up they're i'm just dad they have nothing to offer me and yet at the same time i am infinitely more confident in my work role i've trained for this i've done it for 22 years i've lived this life i know exactly how to tell people how to handle their money i've walked so many of these paths with so many families i am really confident i have never raised a 16 year old boy before i have no idea what i'm doing and so if i'm honest i would rather do the thing that i feel is in my wheelhouse and then i feel totally prepared for i am always feeling inadequate as a husband and a father and so i'm i'm drawn to the thing where i feel adequate and confident and so this lie of being irreplaceable pulls us further into this identity that this is i matter i'm the only one that can do it i have to do it and yet i can i'm 100 confident that there are thousands and thousands of people in the city of cincinnati that could do my job and many of them could probably do it better than i can but there is no one else on this planet that can be a husband of my wife and a father of my kids that is the place i truly am irreplaceable and i'm leaving it i'm trading it to go chase something that anybody could do and we end up that is probably one of the biggest points of compounded regret that i see is that people realize when the machine keeps running without them when they retire and the door closes and there was cake in the conference room and there was an atta boy or two on the way out but they never actually needed them it could anybody could have done it and then they stepped back into a home where they weren't there they were not present and the cost comes crashing down on them and that's my biggest heart cry is to convince people you're not that important there's thousands of people that could do your job know that fully accept that and just delight in it actually like get to a place of freedom where you go okay i'm not that big of a deal it's so helpful but then you recognize you're the only one that can be a dad or a mom uh you you want to get in there more you want to play that role more intentionally and that's the key there's that and there's that regret that sudden you're saying whoa where did that come from decades of piled up regret yep that's right well um we're we're past our time but i don't i do want to touch on the lifestyle cap because i think it was such a cool concept so maybe give us the short version because i think it's something that our listeners can go and do immediately because it's that powerful and simple well and yeah and it's and it's a great kind of summary of all the things we talked about today and that you know when you think about how do we fight against the law of more and the lie of being irreplaceable how do we get to a place where we're intentional um if we have a family vision we know this is where we're aiming and if we establish then this is contentment we draw the line and in my world that line is uh including what you're giving some level of discipline to give to charity uh some level of travel and fun some level of spending on yourself as well as saving for your future being fully prepared to hit your retirement target like we're not talking rice and beans and austerity we're talking this is this is great this feels really good draw that line every year as we walk into the year my wife and i sit down and we all right how are we going to live in deep relationships how many trips we're going to take and who we taking with us how are we going to do this well what are we going to do to lift burdens of others and what is it going to take for us to give to the causes and the things that we really care about what about this what about that we work through all that and we draw that line this year it's going to take x and we don't skimp we're not denying ourselves we're living a very enjoyable delightful life but we've drawn the line and then all throughout the year if more than that comes in we set it aside into what i call the abundance fund which is the opposite of the emergency fund right the emergency fund is what if things go poorly i got to protect myself but we don't tend to have an answer to the opposite question what if things go well normally our answer is i'll just spend it on myself but if we set it aside then we're ready to give it we're ready to just lift burdens help people be connected to families in pain and make the pain go away we can just act in the moment but that's only available to us if we've drawn the line to say this is enough and what it does is it takes away all the teeth when the lure of more comes along and says yeah but if you had more you can say nope i don't need anymore i've already decided what contentment looks like this is enough and when the live being irreplaceable comes along and says no we need you to close this deal you can say nope anybody can do my job i already have enough this is enough i don't need to chase the next thing and it feels so anti-american just to be clear but it is so freeing to have already established what your intention is and what enough looks like and that includes preparing for your future taking care of yourself enjoying yourself all that stuff's already built in so that all of the the tricks that the marketing agencies are using to try to pull more of your money away from you you can go no i don't need them it's such a simple concept it is not easy to pull off but if you can commit to it it changes everything because we stop chasing that next thing

that is the ultimate form of freedom that we all desire yes that we don't realize is so close to our grasps yeah and i know from i know from reading the book that um it also creates some really cool opportunities where you know your kids are coming to you and saying hey can we use some of the money from the abundance fund to help this family or to help this kid over here and like boom creates a great opportunity to to further the values um so um we won't get into that if you want more folks go read living rich life by james lenhoff and your partner g.e williams great great stuff and james thanks for the time today i really appreciate it and um looking forward to talking to you again soon yeah thanks again for having me tom really enjoyed the conversation [Music] you

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