Transcription of Tom Shepard for the show Health / Wealth #21
Lisa: Today’s first guest is a friend of our show from the very beginning, Tom Shepard, and he and I are sitting with Genevieve Morgan. Hi Genevieve!
Genevieve: Hi Lisa. Hi Tom.
Tom: It’s great to be here. Thanks for having me on your show.
Lisa: Tom, we decided that we wanted to bring you on the show because you have a very interesting perspective on money and how it impacts the family, how impacts the individual. We recognize both as individuals but also in our chosen fields that health and wealth they just can’t be separated. This is true. Tell us a little bit about who you are and what you do and how you came to this place.
Tom: I am currently a financial advisor. I own my own firm called Shepard Financial. We work out of Yarmouth, Maine. We recently established ourselves as an independent firm so we’re going through a transition right now. We’re really excited about being able to get our message out to the world with our new brand and help people understand what we’re all about. We really believe that money is more than just stuff. That it’s got elements of it that can really help us live healthier lives, wealthier lives and have better relationships and manage our time better and all kinds of other benefits.
I actually got into the business of being a financial advisor because I was a teacher of math at Gould Academy up in Bethel, Maine. I wanted to help the kids get an experience in that last year where they didn’t have to take math but might elect to take a class that was associated with it anyways. We created a personal finance class that was a lot of fun. I had 4 kids the first time I offered it and we got to dive really deep into stuff but clearly hit a nerve. The next we offered the class there were 17 enrolled and it makes for a different dynamic.
Talking to the kids about money and helping them understand some of the things that they were going to wrestle with led them to go home, talk to their parents. It was the kids who said, “You should talk to our parents.” I said, “That might be a good career move for me.” that’s how we got into deciding to become an advisor.
Lisa: What do you think it was about the kids and how you were impacting them that caused them to want you to talk to their parents. What were you saying that was so striking to them?
Tom: I think 1 of the coolest exercises that we were able to do with the kids was take the math part of what they were learning which was the power of compounding of interest over time and connect some of their expensive little habits or hobbies. The 6 Mountain Dews that 1 student would drink every day. Aside from the nasty health benefits, we wanted to show them how much more money you could have if you could figure out ways to do that habit either cheaper or just eliminate it altogether. He used to pump quarters into a very expensive vending machine and there is a store just not that far away. The walk would have been good for him. It would have been cheaper if he’d just gone and bought a big giant 2 liter bottle.
It was just helping them recognize that not only is your health impacted as a result of the habits and addictions that we all have but also there’s a financial impact as well. One of the things that I bring to my practice is the personal experiences that I’ve had with respect to money and financing careers and transitions. Been through a lot of transitions. The first 1 was getting out of college and working for Pratt and Whitney as an engineer, getting laid off during the recession in the early 90s. I tried to decide what it was I wanted to do next and I thought “Teaching and coaching and working in a boarding school might be something I should try.” The only thing I can get was an internship so from $30,000 a year to $6,000 year.
Genevieve: That was a big leap.
Tom: Went from working as an engineer to being a football coach and a dorm parent to teenagers who really weren’t that much younger than me at the time.
Lisa: You’re originally from upstate New York?
Tom: Grew up in a small little town called Fayetteville outside of Syracuse where it snows a lot and the whole reason we settled on Maine was because I wanted to be closer to the coast. I want to be close to the mountains.
Lisa: You came to the qigong class that I teach and the qigong class we talk about energy and building ones energy and of course over time you and I often said energy and money they’re very much the same. It’s just a currency. It’s a different energy currency.
Genevieve: That struck me too when you were describing the way you identified different habits to people have with money. It’s very similar in some ways to some of the things that Lisa sees in her practice about how people manage their health. I’m interested can you do a quick description of the roller coaster and the different ways that people have habits with their money.
Tom: I can probably give you a couple of my own habits that I’ve either had or been working on overcoming. Used to be that when I would leave the office at 5:00 for my 5 mile drive home, I’d stop 1 mile into it at a local convenience store and I’d buy myself a bag of Cheetos. I didn’t need to spend the money but there’s just something about my health and my condition of needing to get some sugar or salt or whatever. This is a funny place to be spending money on Cheetos 4 miles from home and arriving home and just spent the last 4 miles licking my fingers and trying to hide the evidence.
Whenever anybody asks me to talk about money, 1 of the things I have to do is I have to go back to the beginning and say, “What is it? What is money? Money for me in an ideal world would be everybody going to work doing something they love and then putting love into it and getting something out of it that they can then turn around and share with other people and just having that go around and around would be a great basis for our economy. You do this. I do this. We help each other out. We share.
What happens in the relationship that people have with money is they go through about 7 different levels of relationship to money. The first 1 and the name I have for it is insufficient. I would even call a level zero. You feel like a zero. You feel worthless. You feel like you’re just not everything that you can be. You may in fact make most of your decisions based on reaction and instinct. It’s all done in a gut level. I’ve known people and clients who… they just don’t take the time to think about what’s really the right next step they just take a next step so that’s where the first level.
The second level is often a roller coaster ride. You might make a lot of money and then you spend lots of money and then you make very little money and you don’t have enough. That’s the second stage is the picture I would paint would be a roller coaster. The third stage would be where you’re trying to nail it all down. You’re trying to make the right amount of money to meet the right amount of expenses. You’re trying to control it but if you’re not careful it starts to control you. There’s lots of tools out there to help people track where their money goes but all of a sudden the next thing you know you’re addicted to tracking where your money goes and you’re wasting time, another valuable resource doing something that really doesn’t add any additional value to you.
The next level for me is where you actually get paid to do a good job of managing your resources whether those resources are time, money, stuff, relationships, your health. You’re creating value that can then be repurposed. You can take some of your excess savings and you can do something else with it. Lots of folks get to that level and then maybe take that purpose and just plow it back into those other 3 levels. Deal with the crisis. Deal with the ups and downs. Try to nail down. Try to reduce your debt. That’s a spending mentality and it’s very similar … The whole financial system, the problems with our current system financially are very similar to the problems with our food system.
We can create lots of food but what’s really the value of it from a nutrient standpoint. We can create lots of money but are we really creating the value for ourselves that we want. There’s a jump. There’s a big step from having money, controlling your spending and taking the money and investing it, creating a second skill set.
Lisa: You were talking about these stages of money understanding and development. What you’re talking about that restructuring is further down the line. First you had to go through that initial phase, that fear phase I believe.
Tom: Fear is definitely 1 of those emotions that if I could only, I wouldn’t be so afraid or if I could only I wouldn’t be so worried. Fears are looking backward and thinking negative things might happen. The antidote to that oftentimes is looking forward and identifying how you can take that fear and hedge or manage that risk that you see as a potential and turn it into an opportunity. You can take a negative and turn it into a positive if you can get to a more neutral place. If you can get to a place where you’re not being ruled by any of your emotions but you’re still in touch with your emotions you can make better decisions.
One of the things I’ve observed is there are lots of folks who think that they’ve reached a certain level of success with respect to their wealth but because they’re disconnected from it. It might be all be in a retirement planner 401-K plan, it might be money that’s been set aside for college or specific purpose but that purpose is way far off, they feel wealthy because they see what their wealth looks like on paper but it’s got no practical application for them right now.
Lisa: Which you said is problem when people are dealing with money is that they disconnect from their money.
Tom: The worst case scenario is where you got wealth over here that you can’t touch and you got debt over here that’s adding to expenses that are making it harder for you to live now. Especially in a situation like we’re in right now where the economy is not that strong. There are plenty of folks who have put money away for retirement but now they’re laid off maybe they have to go in and all of a sudden it’s more expensive to access that money. Some of the things that we do when we’re going forward don’t work as well when we end up in a backward period.
One of the things that we’ve done in our firm is to study the history of money. Let’s go back over not just the last 10 years but let’s go back and look over the 50,000, 100,000 years so that we understand really what money is and that it goes through these different cycles. By understanding what it is, knowing that it goes through these cycles but knowing that it evolves over time. One of the things that we need right now is we need a wall street thats scaled for mainstream. If we could figure out a way to get our food system to recognize the need to shrink back down and get to a human scale, we probably need something similar. A similar movement to exist that will bring our capitalist structure back to a human scale.
At the same time it also has to exist in a global environment. That’s the challenge. The challenge is, how do you continue to evolve globally while also bringing the scale back down locally? Maine is a really neat place because its small enough where you could take any system that is benefiting us on a national or global level and you can come back and really work very quickly if people were directed well enough to create something that’d be very useful for us here. Much healthier, smaller, scalable and I’d love to see that happen.
Lisa: Tom, did you come to some of these lessons not only as a teacher but through some of your personal experiences?
Tom: One of the things I bring to my financial planning practice is I’m not afraid to go out and make mistakes so others don’t have to. I’ve made lots of financial mistakes. From failure to recognize the value proposition between a private school and public school when I was trying to select colleges, buying beer for all my friends at college on a credit card that I’m probably still paying for, leasing a car, buying a car, owning a 2 family home, buying a … I’ve made lots of decisions and not all of them have worked out for the best. One of the things that I’ve always tried to do is pay attention to why I made that decision and if it didn’t go well, why didn’t it go well? Where did I go wrong and learn from it.
Let me take back what I said. I haven’t made every mistake in the book. Some of what I’m able to bring to forward from my experiences are the mistakes that either clients or family or friends have made around me. One of the lessons early on that I was like… that’s not smart was a decision that my brother in law made regarding his 401(k) plan and paying off debt. Even though when I talk about there being different levels and at 1 level it’s an investment that reduces your debt, for my brother-in-law it really came down to I think this is me speaking many years after the fact about why thinking the decision he made was there are 4 things people value. There’s time, relationships, stuff, money falls into that category and your health.
I think he got to a certain point with college loans and debt that had piled up, a feeling like that was robbing him of certain energy to advance his career, to do better financially. If I look at his decision to cash in a 401(k) and pay off all his debt from a mathematical standpoint, from a financial standpoint, it doesn’t make any sense. When we start talking about the interconnections of health, relationship, money and time sometimes it’s time to make a decision to do something with your money that actually pays huge dividends. Say on the relationship side of things. The relationship you have with a spouse, relationship you have with yourself, an employer that sort of space.
That’s not an example of a mistake because it turned out very, very well. His career took off very rapidly after he made that decision. I viewed it as a mistake when I first saw it. It was only later on when I got to a fuller, more holistic approach to understanding what money is, how we value it and how we use those values to make decision on a day in and day out basis that sometimes what’s right for 1 person it’s absolutely the wrong thing for somebody else.
Lisa: This is the reason that we had you come in and talk to us today is that relationship between health and wealth. It’s not just about how do you manage your mutual funds. It’s about from what you seen in your practice. You’ve seen that people when they feel scared, they get anxious, they can’t sleep at night and there’s a very primal relationship. It’s very foundational. Can you talk about some other examples that you’ve seen?
Tom: The better connected I can be to how I feel about the value decisions I’m making with my money, the more aware I am of the impact that those decisions are going to have not just on my health but also on my relationships, the way I manage my time. If I can manage my time well enough, then I can get enough sleep. If I can get enough sleep, I won’t be tired. I won’t need the extra caffeine. The extra caffeine won’t kick me into a craving mode that then starts to pour cheap no value calories into me. My energy will improve and if my energy is better, I can be more productive and the way that you get paid is be productive and do something that you share with other people that’s very positive.
When I think about the connection between health and wealth, I think plenty of people try to put it into a box and then forget about it. That’s oftentimes why they hire me but the difference between what we use to do when we first got into this business and what we do now is I’ll let them hire me. We’ll look at the box but we’ll definitely connect them to the inputs and outputs are going into and out of that box and hopefully make it such that they’re money is allowing them to grow and develop and become the person that they want to be today and tomorrow not just 30 years from now.
Lisa: Tom, I know that there’s a lot more wisdom that you have to offer and you have a new logo. You have a new website that’s being launched very soon. Where can people find out more about you?
Tom: If somebody wants to find out more about Shepard Financial and what we’re all about, our web address is www.shepardfinancialmaine.com and we are building our website so it’s under construction right now. We expect it to be launched in the next week or so. We’re really excited about the information that’s going to be on it. The art work that’s being created that helps really … A picture tells a 1000 words and hopefully just by going there you’ll be able to get a sense not only of where you are, where you been but also what your potential is and the path that you might go on in order to get there.
Lisa: Do you have any parting words of wisdom for our people that are listening and embarking on 2012?
Tom: I think this year is a very exciting year obviously for us because we got a lot going on. I think this is a year for people to really get in touch with what your purpose is. Stay connected to it, figure out how your money can serve you, can serve others. Hopefully it’s a year that has a mark on it out there somewhere around the 21st of December where the world is going to come to an end. My birthday is the 22nd and I hope to see you all at my birthday celebration.
Lisa: Thank you Tom for coming in and talking to us today about the connection between health and wealth. I know that people are going to be very interested in learning more about the type of services that you offer.
Tom: It’s been great to be on your show. Thank you.