Podcast commentary by David Bowman
This podcast explores discrete differences between money and value.
If money is an instrument of value exchange, does it provide the value we expect of it? Does it hold some types of value well, but not others? If so, what values can we expect to store effectively with money? What values can’t money provide? Do other factors influence what we can expect from money and what are those?
If we more accurately describe what we can expect from money by having it and from doing things with it, that could impact the way financial planners discuss financial and life goals. For reference, here is what the CFP Board tells its designees they must do, as a condition of maintaining their designation in good standing, when working with clients:
“Identifying Potential Goals. A CFP® professional must discuss with the Client the CFP® professional’s assessment of the Client’s financial and personal circumstances, and help the Client identify goals, noting the effect that selecting a particular goal may have on other goals. In helping the Client identify goals, the CFP® professional must discuss with the Client, and apply, reasonable assumptions and estimates. These may include life expectancy, inflation rates, tax rates, investment returns, and other Material assumptions and estimates.”
Let’s start at the practical level. Most advisors are not doing deep goals exploration with their clients. Many are, using guided conversation with tools like ROL Advisor, the George Kinder Life Planning methodology of EVOKE, Money Quotient tools, and other means, but most are not. By “deep goals exploration,” I mean providing real space in the engagement where we help clients uncover what they value.
Take a moment to empathize with the planner here. Their job has real gravity in it from day to day – peoples financial wellbeing appears to hang in the balance. The planner’s clients are vulnerable both to them and to their financial environment. We want to meet our clients where they are and help them along the way. If the client cannot see beyond funding their kids’ education or moving to a new home, we hone in on these things and guide them. We may not be able to convince a new client that the time is now for deep goals exploration, and that is okay.
We work with a lot of good planners, but most simply cannot find room early in the client relationship to help clients uncover deeper meaning. This makes the case for modular planning, or at least a model that recognizes that clients often come to us with one distinct goal, and we need to address this first, within the context of a more comprehensive look at their finances. Perhaps it takes time to reach some or most clients on a deep values-based level and we need to meet them where they are.
If aligning our clients’ lives with their values is our goal, and we’re given the leeway to do so gradually, how does that actually work? The landmark paper “Integrating Behavioral Finance, Financial Psychology, and Financial Therapy into the 6-Step Financial Planning Process,” Lawson and Klontz, 7/2017 provides a lot of insight here. Create report with the client. Ask open ended questions (e.g. “Describe your ideal retirement” instead of “When do you want to retire?”). Use diagnostic tools to identify money scripts.
The Klontz script inventory provides four money scripts (should we say “value expectations”) to lend insight into a client’s behavior around money:
1) money avoidance;
2) money worship;
3) money status; and
4) money vigilance.
Perhaps what we should be asking is, what is value to you? What is valuable to you? Again, the cultural constructs we have around money and client expectations about what a financial planner can and should do might limit the depth of the responses we get to these types of questions.
Perhaps a new client will tell us they value not worrying about money. Can we help them unpack this? What is the outcome they are afraid of? What is the specific value they have which they perceive may be under threat? We can then explore if and how money can protect against this threat. What can money do to protect your value? What can’t it do? What the other options and resources do we have available to mitigate the same threat, besides money? Can we help a client ensure their security through a combination of resources and tools, including but not limited to good financial strategy? Do we need to develop expertise in these other value-supporting tools and resources, lean on other professionals (doctors come to mind as one example), or a combination?
This is just a brief exploration of how we might begin to recognize the limitations of money in our financial planning engagements. In estate planning, there are some capabilities a financial planner has to help a client reach their wealth transfer goals, but we recognize that money is just one part of the equation.
As such, we develop some familiarity with estate planning considerations and strategies, and we cultivate professional connections for more specific expertise and services to recommend to our clients. How might we do the same for retirement, education planning, investments, and so on. This all warrants considerable investigation and starts with the professions clear recognition and understanding about the limitations of money to help clients achieve their goals.
Transcript of the Podcast
Natalie Wagner Willis:
Hi, welcome to the What is Finology? Podcast. I am your host, Natalie Wagner Willis. On today’s episode, we have Erik Milam, CFP and a certified life planner with TrustCore in Nashville, Tennessee. Full disclosure, Erik is a long-time friend of mine and a huge inspiration for the good things that money has the power to do. When we recorded this episode, the coronavirus had just begun to affect the US, with our stay-at-home orders and the economic shutdown. One of the things that extreme situations like this do for us, is help us recognize what is and isn’t deeply important.
In today’s episode, Erik and I explore two stories. The first of King Midas and his golden touch. The second is Erik’s personal story of adoption and being a special needs child and how money played a supportive, but essential role in his becoming a self-actualized adult. We use these stories to explore the nature of money and ask if we sometimes expect too much from it. As a culture, do we tend to conflate all value into money like Midas and his touch? How do we learn to recognize the ineffable? If you’re a financial planner, what can we expect from money?
Intro guy:
What is Finology? Here we explore our personal relationships with money, money’s nature and how we exchange value in daily life, grounding ourselves in the liberal arts. We explore Financial Planning 3.0 from the inside out addressing money as the most powerful and pervasive secular force on the planet. Mysterious money merits study.
Jake Wagner:
Hi, this is Jake Wagner, co-founder of the What is Finology? Project. If you’re new here, we highly encourage you to listen to episode zero in which we share where the project started, where we’re going and some of the intellectual basis that we’ve used to build our body of work. We are grateful that you are a part of the conversation. Please visit www.whatisfinology.org to share your comments and questions. Now, back to the episode.
Natalie Wagner Willis:
One day, an angel appeared. I’m guessing you already know the rest of the story. The angel empowered Midas to turn all he touched to gold. This included his castle and its furnishings, his clothes, his flowers, everything. After a while, Midas got hungry, but when he touched his food to eat, presto, gold. “This is a problem,” thought Midas, but the worst was yet to come. In thoughtless despair, he hugged Marigold. She too, turned into gold, a statue, not a daughter. Midas was beside himself with grief, wailing regret. Fortunately for Midas, he got the Mulligan, but, and these are my words now.
Natalie Wagner Willis:
Hello. Thank you for joining us on the What is Finology? Podcast. Today, we are here today with Erik Milam. Good morning, Erik. How are you?
Erik Milam:
Hi Natalie. Good morning. I’m great.
Natalie Wagner Willis:
Erik and I want to start this podcast by sharing two stories with you. One you should be familiar with, and one is very personal to Erik and has been a substantial part of helping Erik become who he is today. So with that, I will share the first, which is the classic tale of King Midas.
Natalie Wagner Willis:
Once upon a time, there was a King. His name was Midas. Midas loved gold more than anything. It was on his mind day and night. “More gold,” he consistently obsessed. It was all he could think about. It was all he thought he needed. Midas had a daughter, Marigold. He loved Marigold as only a father can love a daughter. He lived in a beautiful castle. He ate wonderful foods and he drank astonishing beverages. His clothes were only the finest. His gardens were magnificent, but still, he craved more gold. One day, his wishes were answered.
Now, many of you know the rest of the story, how Midas gained the golden touch. He went across his castle, turning everything to gold, from his fountains and his statues. Eventually, he became a little bit hungry and he went to eat some food. Well, the food turned to gold with his golden touch. Eventually, he came to his daughter and going for a deep hug to comfort him in his time of confusion, he suddenly turned his beautiful Marigold to actual gold. Now we do know there was some lamenting and some cries out with his wishes. Midas was able to return his daughter and his fool’s gold. But I think there some very interesting lessons here with regard to what money or gold can and cannot do for us. With that, Erik, would you please share your story?
Erik Milam:
Sure. Yeah. Thanks for having me on, Natalie. I think all life experiences affect us and kind of give us a lens through which we view the world and my … a couple of life experiences that I’ve had really impact how I view life and how I view money and also how I counsel clients through financial planning. My life experiences that I’m talking about are one is I was born prematurely and used to have a speech impediment, so bad I couldn’t answer the telephone as part of my struggle growing up. I also have mild cerebral palsy and walk with a limp.
When I was born and my parents were told too, that I wouldn’t ever walk upstairs. On top of that, I was also adopted out of the NICU as well. So I had some medical challenges growing up and what I’m aware of now is that through my adoption, I was given a loving family and also a family with enough means to take care of me and my needs in terms of having surgeries and speech impediment and a great education. I look back at my adoption as a real blessing in terms of having the ability to overcome some of these obstacles and realizing that love is a huge part of that. Being in a family of love is huge and also money is a necessary conduit for opportunity, healing, other things that I was able to have through my parents having the means to provide for me.
Natalie Wagner Willis:
So the money itself was in the hands of these parents who loved you deeply, similarly to Midas loving his daughter deeply, but the way that it was used contrasts sharply. How was it that they conducted their money in such a fashion that supported you becoming who you are?
Erik Milam:
Well, I think for my parents, they really desired first, child who they could love. My dad was in Vietnam and so they got started late in terms of having children. They were not able to have a child in their own and they really, really desired to have a child who they loved. I think that love they had for me really drove them to provide for me and use their money to provide for my needs, regardless of the fact that I had needs that most kids didn’t.
So that’s actually very touching to think about and to appreciate as an adult now and look back at just the unselfish use of money to provide for someone else. That’s what parents do. That’s what I do for my children. Money sometimes gets a bad rap. It can be an expression of care and love. I think that contrasts with Midas. While he loved his daughter, he was also mostly driven by the greed for more and not necessarily driven by love of himself or his daughter, even though he loved her.
Natalie Wagner Willis:
So, I’ll share with the listeners that I’m reading this story out of my father, Dick or Richard Wagner’s Financial Planning 3.0, which many of you might be familiar with this as his book. I want to follow these two stories with the direct quote out of this book. The trouble was, Midas’ belief in gold, his love of gold had no reference to gold’s inherent capacities and function. Market value was irrelevant. Gold was structurally incapable of meeting Midas’ needs. The way that your parents used money to meet your needs, what I love about this is that it’s showing us what money can and cannot do. You cannot eat money.
It can have the capacity to take us away from the things that actually nourish us, kind of encapsulate us in this golden statuesque form. But when used for the functions that it is capable of doing, it took you as a special needs child and met your needs and helped cultivate you physically. But, and maybe this is a good transition into something you wanted to talk about with Maslow’s hierarchy. It met your physical needs, but it went so far beyond that. You went from a child who was told you couldn’t go upstairs at two, to a football star in high school, right?
Erik Milam:
I wouldn’t say a football star, but I did participate and play football on a state championship football team. That experience really changed my life. I also was able to attend a really, really great school. I think being in a wonderful school, really took me from good to great in terms of being a student. So, yeah, so I wouldn’t say football star, but I definitely had an amazing experience that really changed my life through my education and also through playing football.
Natalie Wagner Willis:
These are things that money played a key role in facilitating. Without money, those things wouldn’t have happened.
Erik Milam:
Yeah, probably not.
Natalie Wagner Willis:
So, what I think is so fascinating here is looking at and honoring what money can do and also recognizing what it is functionally and capable of doing. In light of understanding that money is only a means to value, but not as value itself that you cannot eat it. It does not provide warmth if you hug it. But, and so we have to find our access to those things in ways outside of money. But we also can honor money and what it does do and then that way, have a healthy relationship with how to engage with it with power, with strength and also when to understand that it is not going to meet the needs that are at play.
Erik Milam:
Absolutely. Just to go back to kind of the Maslow’s Hierarchy of Needs, through my journey through high school and playing football and very similar, if you’ve ever seen the movie Rudy, to kind of the perseverance and the emotions that the character had in that movie I could really identify with. Through having opportunity at the school that I went to and through being able to get medical care and then to have access to just a place that was very nurturing and challenging, I really went through the Maslow’s Hierarchy of Needs and felt it. I didn’t take it for granted.
It was like I went from a person who could hardly walk as a child to being able to run stairs and jump hurdles and do these things. I really transitioned through Maslow’s Hierarchy of Needs to a point of self-actualization when I realized that having a stuttering problem, which I’m even grateful to be able to be on this podcast with you and be able to talk and also, having mild cerebral palsy. When we won the state championship in football, I know it sounds corny, but it was like, those things didn’t define me anymore. That’s when that self-actualization piece, when I kind of felt that for the first time off, I felt some freedom.
I can look back and see money’s thread through that. That’s how I see money as kind of a thread, like it or not, through that person’s journey in their life to self-actualization. It can provide opportunity and money is functional and it’s also a means an end. It’s not the end value. Money can point to what’s valuable to each of us. I think Midas’s problem is that he gave it too much value. He thought money itself had value and he missed what … he got confused. I can see how that can happen to all of us in different ways.
Natalie Wagner Willis:
In dad’s book right here, he says that he suggests this is a fable of misplaced faith. Midas’s love for his daughter was very genuine and he was looking to cultivate what he thought was the best. So this story relates very strongly back to us because, and again, I’m out of dad’s book here, we have sons and daughters we love only as parents can. Most of us live in comfortable houses, eat wonderful foods and drink astonishing beverages. Our clothes are fine, clean and serviceable. We have magnificent gardens.
All of this depends on money, but hey, there ain’t no angels here. We don’t need no stinking angels, referring to angels, being the ones that gave him the Midas touch. We’ve been doing just fine trying to change everything into money, all on our own. So where are we jumping ahead and trying to get love for our children to connect with money, whereas we would do better by realizing money, as you put it, as a thread and supporting the human development to self-actualization, but not misplacing it and putting it as the end, the means and the end.
Erik Milam:
Yeah, absolutely, and not asking money to do things that it isn’t meant to do. I think that that is something that can be very apparent in terms of … it’s kind of easy to see when people are driven by greed. There’s other ways where this issue becomes a little more subtle in terms of asking something of your portfolio, let’s say, to provide a feeling of real security. It can do that to a point, but in many ways, sometimes we’re asking too much of money or we ask the wrong things of money in terms of for example, in times of market volatility like we might be seeing right now, if you’re listening to this is if a person has a long term portfolio, sometimes they can get confused and think that that is going to make them feel secure in the short term.
Most of us advisors know that that’s not true and we try to advise clients to have more balance in how to invest their money and where they put it. But for some of the masses that maybe don’t have an advisor to walk with them or don’t see the need for one, sometimes in times of market volatility, what gets exposed people run for the exits because they’re looking for financial assets that are volatile to provide them a feeling of security when they’re chasing returns, et cetera. It’s just not meant to do that and that’s why you see so much pain when markets go down and people are looking at the short term looking for that feeling of real security when it’s not designed to do that. That causes pain very similar to what our friend Midas experienced. It’s a similar feeling in my book.
Jake Wagner:
We are grateful and appreciative of our financial supporters. Your support warms our hearts and helps us share this essential wisdom that is shaping the future of the financial planning profession and our collective relationships with money. Thank you to our current sponsors, Crest Core Financial, Richardson CIHR and Financial Planning Association.
Natalie Wagner Willis:
One of the things that I see going on here is it’s a huge blow to worldview that Midas had this conception that gold held a value that was so supreme, that it was what there was to aim for. That understanding that absolutely exploded. He hugged his daughter in despair because his world was completely falling apart around him and then his truest love turned into a statue, not a daughter. Erik, you have been in this business a long time, but one of the things that’s so impressive about you, and one of the reasons why we want you on this podcast is that you have such a heart-centered relationship with working with people and their money lives.
So when people are looking at a volatile market and they of course need to eat today and tomorrow, and they may or may not be using money from their investments to do so you, what should people look at to understand where other value lies in the face of financial volatility of value, because it certainly does exist. I mean, money is only ever a means to value. So how can we keep ourselves feeling secure and that we do have access to the value that we hold dear when this market is going up and down so much?
Erik Milam:
I think that’s a challenge for all of us, but I think it comes back to understanding what is really important. I can’t define that for other people. I’m not saying that I’m immune to it in terms of market volatility or placing money on a pedestal in my own life at times. But I think love ultimately is something that we can all fall back on. I think one thing that your dad was on to in creating this word Finology was that, we tend to look at portfolios in isolation and unless you’re a financial advisor, you’re probably not talking to that many people in our life about their portfolios.
One thing that I’m seeing is that many people have similar emotions during market volatility or times of crisis in the world, and that kind of weaves this thread of we’re all in this together. I think something that your dad was onto with Finology is that one thing that I think Finology can address is the connectedness of this need for a value exchange. But really, the money was created to be functional as a medium of exchange for goods and services, which is in your dad’s book but it’s also a medium of exchange between people.
So, money is inherently connecting us to others. A lot of times we look at our portfolio and we say, “Well, my portfolio went down. “Well, so did everyone else’s.” And so how are we in this together in terms of loving one another through difficult times and how do we support one another in our society, through our money? Maybe when things happen, it eliminates what money can and can’t do a little more. So I think money can be viewed through a financial lens. It can also be viewed through a social lens.
Natalie Wagner Willis:
Definitely. So one thing that this is bringing up for me coming back to these two stories is what is the values? I love how you said how money connects us all and it really connects the value that we hold inside and that we generate it connects that with others and what they … it connects what we produce and consume. So we have this beautiful value and we put it out and then it connects us through what we use our money for and then bring into our lives. So how do we look at the connection between people sort of before and after money and what it means where the foundation is that the money grew out of and where is that connection that is almost primordial to money?
Then what still remains above and beyond money that is our connection point, which then leaves us to where is money’s place? Money does a heck of a lot of things very well and for example, help you with your physical health, help you put yourself into a place to be on a football team to achieve self-actualization. So what can we do with money to serve our actual needs? I’m not asking you to have the answers. I’m just posing the questions. Where do we find money’s true functionality and value in light of our connection, which will always exist? It existed before money, it certainly exists if anything were to ever happen to money, it will certainly exist after.
Erik Milam:
So that’s an interesting point that I feel like I have to be a Wagner to go that deep. That’s deep stuff there, Natalie, but I’ll try to talk about it this way. Maybe this makes sense, maybe it doesn’t. Like because of my physical challenges early growing up, my lack of ability to compare to my peers was staggering. Then I had surgery. I had three surgeries to enable me to walk, to enable me to be able to function. I think that that’s the lens in which I … and then I took that from there and worked out a lot, took care of my body and became a version of myself that nobody thought I could become.
But I had this dream that I wanted to play football and I wanted to be stronger than I could ever have imagined when growing up and feeling so different and so less than. I think money, to me, can provide opportunity just like surgery did for me, in terms of for speech therapy. But at some point, someone has to take that opportunity or that gift and use it, multiply it, continue to, spread goodness from that or even love. So I feel like the surgery kind of has limitations. The surgery provided me ability to do something different and new, I think money can be like that … increase our ability to make an impact in our own lives and the lives of others, but only to a point. Then we have to take that education or that opportunity that money provides and make a difference in our own way with it. Does that make any sense?
Natalie Wagner Willis:
Yeah, it does. Money was only an ingredient in facilitating Erik’s self-actualization. The love of your parents, the attention all of the things that they did that were the human side of things, money would never have facilitated Erik. If it weren’t for that. Then you took it. You give it new life when you integrated it into who you are and did that self-actualization because really, you’re the one that did it, not the money, not even your parents. You are the one who self- actualized.
Erik Milam:
I think the analogy that we can use with my situation is like the self-worth has been enduring for me. We haven’t really talked about your dad’s role in my life, but one thing that he did for me was he saw me in a way that I’d never been seen before, because I view money through this lens and a found in your dad a kindred spirit and someone who saw money in a similar way that I did. At the same time, he also saw in me my struggles for self-worth and was able to speak to that and even joke with me about it and say, “Hey man, if you could do something about your self-doubt, that’d be good for the rest of us.”
I love your father so much and I think something that I have always struggled with through childhood was feeling worthless because I had less ability. I think I got a lot of self-worth right or wrong through being on the football team. It was a sense of belonging. It was a sense of maybe I’m not totally abnormal. I can do this, but I kind of willed myself into that person. My orthopedic surgeon said I was the strongest willed person he’s ever seen. He was a pretty busy orthopedic surgeon, so that’s kind of interesting. So I think for me, football was kind of a band-aid for that self-worth piece and in my adulthood, I really had to find it.
I think that’s true for the rest of people too. I think that’s a journey of self-worth for all of us in our lives. Where I think money falls short is money cannot provide self-worth. Just as my surgeries and increased ability and how much could I bench press didn’t take the place of that self- worth piece for me. I think in our culture, I think what you’re worth financially can be tied to someone’s sense of self-worth in their adulthood and that will eventually … money will never be enough to fulfill that hole.
I think that’s what the Midas story kind of talks about and I think in some ways, I’m admitting that that’s been part of my story is I had to find and journey too, realizing that my worth is intrinsic to me and not based on what I do or what physical abilities I have or don’t have, or how much money.
Natalie Wagner Willis:
It’s profound and beautiful. I think it is so important and one of the key demands of Finology to understand what money’s worth actually is, what it’s functionality, but the money forces what they are and what they can do, what they will do in some cases. But also, to understand what money cannot do and help us cultivate our relationship with value outside of money and not conflate all value into money in the sense that self-worth is not money and self-worth has a value that is priceless.
So, this is one of the ways in which I believe the study of Finology is so important. We want to get into people’s heads and hearts with thinking about who they are in this world and what money means in our lives and how we can honor and utilize money while at the same time honoring all of the value that exists elsewhere and just simply having that relationship being kind of right relationship there.
Erik Milam:
I think that’s important in understanding the limitations of money around that and being able to name that for ourselves and for our culture and being real about what money can and cannot do, I think, could both increase our joy in life and also maybe insulate us from the pain that sometimes the over-reliance or putting things on money that it’s not really designed to do. That eventually ends in a painful experience.
Natalie Wagner Willis:
Right.
Erik Milam:
So, I think by having these honest conversations and through exploring what Finology both personally and culturally, and the reason why your dad had the courage to create that word and to acknowledge that it needs to exist is a really beautiful and noble endeavor.
Natalie Wagner Willis:
It is and it’s a beautiful and noble endeavor for all who are participating in this shift of what we’re paying attention to when we look at money because it is important to study the economy and the social waves and this and that, and it’s important to study spending and unemployment, all of these things that are widely talked about. But when we’re talking about these very, very personal stories of navigating money in our lives, money touches everything. At the end of the day, it’s about people, not the other way around. So let’s talk about us in relationship to this crazy stuff called money. Erik, I thank you so much for being with us today. It’s been an absolute delight, treasured your friendship for many years and expect to into the future. So until the next time, and thank you for your vulnerability and your insight.
Erik Milam:
Awesome. Thank you, friend, for this opportunity.
Natalie Wagner Willis:
Fantastic. Thank you all for listening and that is our podcast for today, What is Finology? Be well. I want to thank the What is Finology? Team co-founder and curator, Jacob Wagner, senior assistant, Natasha Hoggatt, and project producer, Gail Pelsue. This episode of the What is Finology? Podcast is dedicated to our guiding light, the father of Finology and co-founder of this project, Richard Wagner. Without you, this doesn’t happen. Thank you to you, our listeners. This conversation needs you. Please send us your thoughts and questions to info@whatisfinology.org or on Facebook. I’m Natalie Wagner Willis. As always, be well.