June 30, 2022

#066: Abacus Wealth Partners – Co-Founder Spencer Sherman

Hosted by Fran Racioppi

Money is always on our minds. Abacus Wealth Partners Co-Founder Spencer Sherman joins Fran Racioppi to discuss money, how we think about it, what we do with it, and where the economy is going. Spencer oversees $4B in assets. He is the author of The Cure For Money Madness and the creator of Fearless Finance, a course designed to teach us how to effectively manage and handle our views and decisions about our money. He abides by Buddhist principles and the simple concept that the road to financial freedom is long and boring. Take a listen then check out Spencer’s courses to unleash your money wisdom at Spencer-Sherman.com 

Read the full episode transcription here and learn more on The Jedburgh Podcast Website. Check out our video versions on YouTube.

Listen to the podcast here

 

About Spencer Sherman

TJP 66 | Money MindsetSpencer Sherman (MBA, CFP®) is a leading financial advisor, author, public speaker, and the founding CEO of Abacus, a values-driven financial consulting firm managing more than $4 billion in assets. A New York native living in California, Spencer now devotes much of his time to sharing his mindfulness-based approach to money through books, courses, and personal appearances.

Many of us are raised to believe that money is about facts and figures, not feelings. As a financial consultant who’s helped many people grow their money, I find the opposite to be true. Formal training and expertise are far less important than the emotional intelligence we all share. By learning to examine the source of our feelings, we can lessen the influence that fear, worry, and shame have on us and make smarter financial decisions from a place of balance, kindness, compassion, and joy.

How many MBAs wear a suit and tie while eating a breakfast of turnips and quinoa? Lead meditations about money? Go to Burning Man and silent meditation retreats, and also deliver the best advice on ways to earn more money, save for retirement or college, and how to use a charitable remainder trust to reduce estate taxes? I don’t pretend to be a typical MBA… but I’m a stand-out financial advisor because I know that emotional intelligence determines financial success. Mindfulness, surprisingly, is a more direct path to success than reading financial books or getting an Ivy League MBA.

I started Abacus with the foundational belief that each of us can discover and share our greatest gifts. That applies to my clients, to my staff, and my students. Today, Abacus has over 70 amazing team members and manages over $4 billion in investments. The lessons of emotional intelligence have enabled me to help my clients achieve peace of mind and financial success on their own terms. It’s something I might never have learned if it hadn’t been for what seemed like the worst day of my life.

 

Abacus Wealth Partners – Co-Founder Spencer Sherman

Money is always on our minds. It doesn’t matter if you have a lot of money or a little bit of money. Our ability to make and more importantly, our ability to handle money affects every part of our life. Today’s world is more volatile than ever. Inflation is rising faster than wages and fuels are at an all-time high. The world order is being challenged internationally. Since there seems to be no end in sight, some of the largest names in finance and business are banging the recession drum.

I asked Spencer Sherman to join me to discuss money, how we think about it, what we do with it, and where the economy is going. Spencer is the Cofounder of Abacus Wealth Partners. He oversees almost $4 billion in assets under management. He’s the author of The Cure for Money Madness and the Creator of Fearless Finance, a course designed to teach many of us how to effectively manage and handle our views and decisions about money.

Spencer started Abacus after a fire destroyed the investment firm he worked for after college. The principles he abides by are grounded in Buddhism and the simple concept that the road to financial freedom is long and boring. Take a read to our conversation, and then unleash your money wisdom at Spencer-Sherman.com. Follow us on Instagram, LinkedIn, Twitter, Facebook and TikTok. Subscribe and share us with all your friends. Let’s now talk about money.

Spencer, welcome to The Jedburgh Podcast..

It’s wonderful to be here, Fran.

I so much appreciate you taking time out of your trip here to the East Coast. You have left Northern California. I’m excited because we’re going to talk about money. This is Episode 66, and we have not done an episode that has been completely focused on money. It has come up a lot. My experience has come up a lot in the fact that I was a financial advisor at Merrill Lynch for about eighteen months. It was an eye-opening experience for me. I’ve talked about it on a couple of episodes. I had just gotten out of the military. I had a week off and found myself in a cubicle at Merrill Lynch in rural New Jersey. I couldn’t be more appreciative of the opportunity they gave me. Eighteen months later, I was out.

TJP 66 l Spencer Sherman Abacus Wealth Partners

I learned a lot. I was getting my MBA at NYU at the same time. I learned most importantly that it wasn’t for me. I’m excited to get your perspective on this thing because money is one of those things that’s always on our minds, like our bills, income, savings and investment. It keeps a lot of people and me up at night. People’s ability to handle money crosses the entire spectrum, people who are super diligent, people who spend everything they have, extreme discipline, and then none at all.

There are conservative investors who play the long game. There are day traders who tell you to see what’s happening on CNBC and go with whatever they’re talking about. Everyone thinks they have a formula. You have a proven formula that has worked over time, and we’re going to get into it. Even though we think we all have a formula, it’s emotions that drive so much of our decision-making when it comes to not only what we do with our money but how we feel about it. It keeps you up at night.

That’s all emotional. Our impulses take over so many times. I have arguments with my wife where I would tell her, “Why do we have to go to Starbucks every day this week for the $5 coffee and then come home with a boat and a truck?” The next day, it’s like, “Why do you need the $5 coffee?” You’re one of the foremost leaders in financial advisory. You’ve built Abacus Wealth from $0 to over $4 billion over your career.

You teach Impact Investing. You have brought Buddhist principles into the industry. The goal is to gain clarity and calm so that we understand our earning, spending and investing, and we do it all wisely under mindfulness as the key core theme that drives all of our decision-making. I’m excited. You have started many of your conversations by saying that money is taboo as much as sex, politics or religion. The first thing I have to ask you is why don’t we want to talk about money?

We don't want to talk about money because we have this idea that our self-worth is equal to our net worth. Click To Tweet

There’s a part of us that doesn’t want to talk about money. There’s a part of us that does want to talk about money. We don’t want to talk about money because we have this idea that my self-worth is equal to my net worth. It’s in our consciousness. It’s in the culture. If you believe that, why would you want to talk about money if you don’t have much because then you’re equating your self-worth to very low net worth? It has problems with it on both ends. If you’ve got a lot of money and you’re saying, “My self-worth is equal to my net worth,” then you start thinking, “All I am is just this net worth.” My sense of human beings is we’re way beyond whatever our net worth could be. We’re worth way more than $1 billion or any number of billions of dollars.

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Spencer Sherman: ”We have this idea that my self worth is equal to my net worth.”

I want to take it back to the start and unpack it. You’ve started to outline how we think about what we’ve called in previous episodes as underlying behaviors, hidden drivers, and habits that come from our mindset as we approach these different topics. You graduated from Wharton with an MBA. You became a financial advisor at a large brokerage firm in Philadelphia. Why get into financial advisory after business school in the first place? I shared my story with you.

I started out thinking I was never going to do anything with money because my father was very much wanting to accumulate money from a place of fear like, “If you don’t have money, you’re not going to be okay.” It gave me a lot of messages like money is the most important thing in the world. It’s the only thing that will give you security. There was a little bit of a pushback on that. I noticed that I was fascinated with this idea of money mostly because what I learned at business school was logical. It made a lot of sense, and yet people weren’t fine following the logic. They were doing the opposite of what they taught us to do in business school. I’m thinking, “What’s going on here with money? Why aren’t people making this as simple as boiling water to make eggs?” We don’t complicate that, yet we complicate money.

You were disillusioned early on when you joined the firm. You said, “Like all commission-based firms, the firm I worked for is expecting me to sell products and investments. Helping clients was secondary to this.” What’s wrong with that model?

It’s painful. I feel the pain of that model. We were told, “You should sell this product more than this product because this product sells a higher commission.” It’s not that much worse for the client. The client won’t even notice it. It’s rife with this lack of integrity. You’re not sitting on the same side of the table as the client when you are selling with commissions, and when you’re selling products and pushing some products versus other products. It’s the difference between being a salesperson versus being an advisor, a consultant or an ally to the client, which is what I wanted to become. It’s this ally.

It’s a partnership.

Yes, where you’re thinking about things from the same perspective or you can say, “You shouldn’t be in stocks. You shouldn’t be in CDs. You should buy that house or not buy the house,” instead of, “Let me show you this product that I think you should get interested in purchasing.”

TJP 66 | Money Mindset

The Cure for Money Madness: Break Your Bad Money Habits, Live Without Financial Stress–and Make More Money!

I always thought about that dichotomy because, on one hand, you’re sitting there saying, “What’s in the best interest of the client?” Even in training, it’s about the best interest of the client. In many ways, you’re a fiduciary on their behalf. You’re setting their goals and identifying their timetables for the different stages of their life, what type of portfolios need to be crafted, and whether they are in a growth phase or coming on retirement.

At the same time, you hang up the phone with them and it’s like, “What does my team grid look like? What does my individual grid look like?” My compensation in six months is ramping down because the expectation is my commission is going to be ramping up. You end up in this weird spot where you’re trying to figure out, “How do I do what’s best for them but at the same time I got to eat too?”

You mentioned the word fiduciary. Not all financial advisors are fiduciaries. The ones that work for large brokerage firms that are also selling products are not fiduciaries. They only have to do what’s suitable for the client. Independent advisor has to do what’s best for the client. That’s a world of difference.

Imagine going to a doctor where the doctor is recommending certain procedures based upon what’s going to compensate that doctor best versus saying, “You don’t need any procedure. This is the right procedure for you. Not because I’m going to make more money but because it’s right for you.” The problem with finances is that things are so often complicated. You don’t know what you’re paying. The fees are often embedded in these products. It’s not clear to people what they’re paying for and what they’re getting. I’m going to stand for transparency for people to make finances much simpler than they need to be.

There was a fire. The fire in your brokerage firm changed your life. You said, “The day I entered the wreckage of what had been my office, I thought my career as a financial advisor was over. In fact, that was when my life’s calling truly began.” First off, what happened with the fire? I understand that you ran back into the building.

Thank you for bringing me back to the most embarrassing moment in my life. I had this belief. You mentioned that there’s so much belief in the culture. We inherit beliefs from our parents and families. The belief that I so strongly adopted from my father was that money is the most important thing in the world. I have that belief. It’s in my mind. I learned that probably at 4, 5 or 6 years old. I didn’t even know I had that belief, then this fire alarm goes off. I’m managing a team of people on Independence Square in Philadelphia.

I’m this young guy in my mid-twenties and striving to prove myself. When the fire alarm goes off, I said, “Keep working. Let’s be as efficient as possible. It’s not a real fire. We’ve been through this before.” We keep working and everything is quiet. No one is coming back. I run downstairs from the second floor. I saw the fire trucks out there and thousands of people on Independence Square, where the Declaration of Independence was signed. I run back up. I said, “This is a real fire. Everyone, out of the building.”

If you know that 3 out of 10 people are going to say yes, then you need seven nos. It’s okay if you hear a no, you’re just 6 more nos away from getting a yes. Click To Tweet

Two days later, I came back to my office. They’ve barely put out the fire. I start feeling this terror inside because I know that the most important thing in my life is in that building. If I don’t get it, my life is worthless. I learned some negotiation skills at Wharton. I somehow convinced the fire marshal to let me into that building. He guides me in with a flashlight. We’re walking through knee-deep water. I’m smelling all the effects of the fire. I grabbed my stuff and got out of that building. It’s a sunny day. I looked down and saw what I thought was the most important thing in my life. It’s my worthless desktop computer. I had this wake-up moment like, “Did I just risk my life for this worthless computer?”

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Spencer Sherman: ”I know that the most important thing in my life is in that building…and if I don’t get it I know that my life is worthless.”

Later, it dawned on me that this message from my father was guiding me to do something completely careless, irresponsible and reckless as to go into this building with electrocution hazards. Who knows what else I might have breathed in to get this worthless computer. It woke me up. I think of it as the worst and best day of my life because it sets me forward on this course that I want to start investigating. I want to get into mindfulness and learn what was going on and how I become a person who doesn’t react to my emotions in the way that I did.

You have this realization during this that you can do it better. We talk about entrepreneurialism in a lot of our episodes. I always say, “The road is long and hard for every entrepreneur, but the hardest step so often is about taking that first step.” At the back end of the fire, you have this realization, idea and vision. What did you do first to take that first step to say, “I’m done with you guys. Now I have to go out and do something on my own, and start over essentially.”

I had a sunroom in my little townhouse in Philadelphia. I said, “That’s going to be my new office. I’m not going to have to pay rent.” I had taken this course and I was starting a business. One of the things that I got out of this course was to take a sheet of paper, make a grid with 30 days on it, and on the rows say, “What do you need to do every day to make sure you’re successful to hit your goals?” I started writing down, “I have to make this many phone calls every day. I’ve got to meet this many people.”

You break it down like, “If I want to get three clients a month,” you go backward. What do I have to do to get those three clients a month? Maybe I have to meet with 10 people to get 3 clients. To meet with ten people, I’ve got to make so many phone calls. I became this machine because my life was on the line in another sense. It was different from the fire but I knew that I had to generate my own income. If I didn’t bring in clients, I was dead. My business would not take off.

I believed in the numbers. I trusted the science of numbers. One of the things that this teacher told me was to go for the noes, which is counterintuitive. If you know that 3 out of 10 people are going to say yes, then you need seven noes. That got me to let go of the fear of hearing a no. It’s okay. If I hear a no, I’m just six more noes away from getting a yes. I would count on that, and those numbers came to be true for me.

That’s the most difficult part of that job. In a lot of ways in any sales job, it’s how you consistently hang up the phone, come out of a meeting and say, “I’ve got to get back at it and do it again?” We talk about resiliency and adaptability as two of the nine characteristics of performance that are used by Special Operations Command. It’s one of the core tenets of the show that we bring up in so many of our episodes. You have to understand that. I always say that resiliency and adaptability are very closely tied to drive because if you don’t wake up every morning and almost be able to hit that reset button that says, “We’re going to keep going at this thing. We’re not going to quit. We’re not going to give up,” the other ones don’t matter anymore.

I tried to have as many warm calls as possible. It wasn’t just doing cold calls. I don’t even feel very good at doing cold calls. I did a few of those. I would be calling up friends and other people and asking people who they know who need help with their finances. I would be speaking as much as possible. I got my first break at a law firm. A law firm asked me to speak to the junior associates. None of those junior associates became clients, but the partners at the firm heard about the talk and how successful it was. They became clients. They were my first client. Some of those people are still clients many years later.

In 1999, you met Brent Kessel. In 2004, you merged and formed Abacus Wealth Partners. Can you talk about meeting Brent? I don’t think you were necessarily looking for a partner at that point, but you did meet and hit it off. What was the chemistry there? We talked about teamability as one of those nine characteristics. How do we work together? What do we look for in each other?

TJP 66 l Spencer Sherman Abacus Wealth PartnersI wanted someone that I could have high-level discussions with and who I could see things from the same perspective that we talked about earlier. I wanted someone who could sit on the same side of the table as me, look at the business and say, “What should we do?” I wanted that brainstorming partner. When I met him, I felt this alliance of values and aspirations. We were both into mindfulness. We both wanted to make money and build a successful business. We cared about our lives as well. One of the things we built into the operating agreement, which is very unusual, is that each of us would get a sabbatical every five years.

For how long?

It’s for six weeks of sabbatical. You could take longer. You just have to give up some money if you go longer. We said, “If this thing is not financially successful, we wanted it to at least be life successful. We want it to be fulfilling for us to merge together. We want there to be a benefit so let’s make sure there’s at least one benefit.” You can’t easily take a sabbatical if you’re doing everything or if you’re the CEO and everything. You can’t do it all.

Despite the fact that he was in LA and at that point, I was in San Francisco, I still had my Philadelphia office because I started in Philadelphia. In some ways, it wasn’t a perfect merger from a financial standpoint. A consultant said to us, “Don’t do this just for financial reasons because you would be better off merging with someone in Philadelphia or San Francisco rather than adding on another city like LA,” but the chemistry was right for us to do it.

We started out as friends. We got a lot of testing as friends. We did a trial marriage together where we said to each other, “We’re going to act as if we’re merged. We’re not going to sign anything, but we’re going to realize the financial repercussions of being merged for the first year.” We went through that first year. There was very little financial repercussion, and we then signed the documents.

Egolessness and maturity are key to handling money. Click To Tweet

That’s a pretty good idea because then you can walk away.

It would be easy to walk away after that first year. If one of them had an outstanding year versus the other one, we would have had to pony up some money.

In any deal agreement, when I talk with companies and organizations, I always made the comment that everybody is always friends until the money starts coming in. All of a sudden, it’s like, “I did this and this.” Now, everybody’s true colors start coming out in these things. You have to have a tremendous amount of maturity.

You said it. Less ego and maturity are key to handling money because it comes up. We want to be recognized for our efforts, and we sometimes see our own efforts more clearly than our partners’ efforts. “I want to make sure you get paid well, but I want to get paid a little bit more than you,” especially for last year.

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Spencer Sherman: ”Mindfulness is really about being present with what’s happening and letting go of any judgment.”

The other component that you and Brent have brought into the practice that started from the very beginning is Buddhism and the culture of mindfulness. That’s core at Abacus Wealth Partners. It’s core to your perspective on how you approach financial management. You have a dedicated room in the office for mindfulness. There’s yoga and meditation. You advertise in Buddhist publications. You teach at the Spirit Rock Meditation Center.

We had an interesting episode. It’s Episode 15 with Colin Beavan, who is also a Dharma master. A lot of his principles in leadership and organizational design are based on Buddhist principles. He has what’s called limiting beliefs. He was also the no impact man, where he lived in New York City for a year with his family, creating zero net impact on the environment. He wrote the book Operation Jedburgh. His grandfather was a Jedburgh, and that’s how I came onto him. When I learned about his other stuff, I invited him on and had a phenomenal conversation. For me, it was a great introduction to Buddhism, meditation and mindfulness.

We had a conversation with a guy named Sean Lake in a previous episode as well, who owns a company called BUBS Naturals. We talked about meditation. That was the first time where meditation came up when I specifically asked him. I said, “What do you do? Tell me exactly how you meditate. What does it look like?” As I’ve gone through my journey to understand Buddhism and mindfulness, it’s not this woo-woo thing out there. If you can embrace it and make it part of your life, it’s very impactful. Why did you get into Buddhism? What did you see that drew you into that world?

I got into meditation practice. One thing was the fire. That was a wake-up call. I need to investigate. One of the tenets inside Vinassana meditation is the ability to investigate what’s going on, look at yourself, and be a witness to what’s happening. That was appealing to me. Plus, I wanted to strengthen this brain. For me, the brain is the most important organ in the body.

Meditation is this training for the mind. It’s the equivalent of brushing your teeth. It’s good for the teeth. Meditation is good for the mind. It’s helping us let go of all those extraneous thoughts so we can be much more focused. It’s also expanding our minds so we can be more creative. Those things were very appealing to me. There’s a part of me that’s an introvert. I went on my first meditation retreat at 21. I was just finishing up college. It was a ten-day silent retreat. No talking at all. I was a little bit terrified of this.

My roommate talked me into it. The challenge was the thing that ended up getting me to do it. I don’t know about you, Fran, but I like challenges. If someone challenges me to something like, “Let’s see if you can take a cold shower for five minutes,” I’m more likely to do it. He said, “I bet you can’t spend ten days in silence.” I bet I can. I agreed to go. This was in Central Massachusetts out in Barre, Massachusetts. It was a wild time.

Most people say, “Wild time?” I felt all this energy building up in myself. I came away feeling completely recharged. This was the ultimate vacation because you’re taking a vacation from that busyness of the mind that wears us down. I felt this clarity and this laser-like focus by the end. I felt high naturally just by meditating. I think it was the power of meditating in a group. There were 200 people in silence meditating together. That energy converging and supporting each other to get to this very still place inside was affirming and edifying for me.

We had Josh Bridges on episode 60. He’s a former Navy SEAL and CrossFit star. He’s a phenomenal guy. He talks about these people who put goals on a pedestal. In the context of becoming a SEAL or in fitness events, you have to look at someone and say, “If they can do it, so can I. They’re no different than me.”

It’s different from meditating by oneself. I do that but when I’m with myself, my mind is more likely to wander than when I’m with 150 other people. When we’re all meditating together, it puts me on task. You then have to find the balance with not over striving because over striving with almost anything is going to backfire when you over effort. There’s this supportive atmosphere and everyone is doing it. If they’re doing it and they’re able to sit still, I can sit still. It’s very inspiring.

You have taken these Buddhist and mindfulness principles into the financial advisory mindset as part of the practice. There are four components or concepts. It’s impermanence mindfulness, equanimity, and interdependence or interconnectedness. If you would, talk about the importance of those four. Maybe we can break them down and speak about each one.

Mindfulness is so powerful in life, in general, and especially in the financial arena. Click To Tweet

Mindfulness is about being present with what’s happening and letting go of any judgments. Judgments might come up, and then you let go of that judgment. It’s not about forcing anything. If a judgment or distraction comes up, you’re aware of it.

Is it about people, situations, things or that doesn’t matter?

It doesn’t matter whatever comes up. As we’re speaking, I’m being mindful of what I’m saying, what you’re saying, your body language, and my body language. I might have a distracting thought or a judgment. I’m not saying it as well as Fran is saying it or something. I just acknowledge it. I’m going to let that thought go and come back to my center. Maybe I’m going to use my breath as an anchor because the breath is always available. It’s always here so it’s a useful anchor.

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How Buddhism applies to financial management

There’s nothing special or exotic about the breath. It’s just available. It’s a good and steady anchor for us to keep coming back to. Mindfulness is so powerful in life in general and especially in the financial arena. We talked about these emotions around money and the beliefs that we inherit. I inherited the belief that money is the most important thing in the world. These beliefs distract us and often are trying to take us off course, and mindfulness brings us back in on the course.

What about impermanence?

I’ll talk about impermanence and equanimity. With impermanence, everything changes. The markets keep changing. It’s interesting how our brains are wired to not accept impermanence, to believe somehow that we can hold on, that things will stay the same, and that our faces won’t age.

I look at pictures from twenty years ago and I think, “There’s that same guy.” He was like, “That’s not the same guy.”

We all have this belief that somehow if I do enough pushups, go to enough yoga classes, or invest in the right portfolio, I can have a smooth ride. I won’t see change. There won’t be impermanence, yet there is impermanence. Ultimately, we realize that when we see the impermanence of everything, there’s an opportunity because we no longer get triggered by impermanence. That gives us this immense freedom.

When the stock market goes down, our friends are climbing the walls and are all stressed out. Maybe they’re doing the opposite of what they should be doing. They’re selling their equities and investments when the market is down, but we’re calm and have the resilience to not react. We think through like, “The markets are down. That means stocks are on sale. When things are on sale, I should be buying them, not selling them.” We can respond in a very wise way. That recognition of impermanence, which is inevitable in life, can set us on a much wiser and healthier course with our lives, bodies and finances.

I will contextualize this in the last 48 hours. You’re here with me now. Yesterday, the market went way up. The consensus this morning in the news was that everybody saw the buying opportunity over the last week or so. They jumped in and drove everything down 800 points right before we started, yet you were very calm and had $4 billion under management.

This impermanence is inevitable. When you know there’s impermanence and things are going to change, our bodies are going to age, our finances will go up and down, and how we feel about our work situation will fluctuate from day-to-day, then we don’t have to be so reactive with it. We can see what we should do when things are going down so much. Maybe we should sit tight or buy more equities, but we could make an informed decision rather than one coming from fear and scarcity.

That brings up the equanimity.

Equanimity is about being able to be with things as they are. It’s finding that peace within the storm instead of trying to get rid of storms in our lives. You could probably relate to this. No matter how good you are in the military, there are going to be storms. There’s going to be stuff that doesn’t go the way you expect.

We call it emotional strength, being calm from chaos.

Have a boring portfolio. Live an exciting life. Click To Tweet

That’s equanimity. It’s finding that ability to respond with grace when something arises because you know things are going to rise that is going to go wrong. We find that balance inside instead of that reactivity inside.

In the military, we call it lady’s hair on fire.

It’s finding that pause in a nanosecond. Great quarterbacks have an extra nanosecond. They don’t literally have an extra nanosecond, but they believe they do. They slow things down. When the linebacker is charging them, they don’t freak out. Time expands without a quarterback. Imagine that for your life. If you’re this equanimous person and you can stay centered and you can feel your breath when you’re in the midst of chaos like the market is going down 800 points, then you’re going to be able to respond and throw that pass accurately to the receiver and do the right thing with your finances.

Let’s go with interdependence.

Interdependence is the idea that our actions have many ripple effects. Our actions affect everybody on the planet, and everybody else’s actions affect us. We’re all connected. When we spend money, that affects the storekeeper, that affects their families and friends. There are ripple effects to everything we do. Understanding that interconnection can help us realize the benefits of our actions. When we’re doing our work, it’s not just that we’re producing this show. It’s having ripple effects on many people we don’t even know about.

Recognizing that interconnection can help us feel much more grounded and happier because it’s the lack of connection that often leads us to depression. It’s being connected that helps us feel more alive and realize that everything we do makes an impact. How we pass the stranger on the street creates an impact and a ripple effect.

We have all these micro-moments every day to create beneficial impacts and ripple effects rather than negative ones. We talk about that in the firm. Our interconnectedness and how we treat our colleagues at Abacus have huge ramifications. How we interact with clients but also how we interact with each other within the firm affects how we show up. How much value we deliver is dependent on how we are with each other.

That’s the culture piece. You are developing an inclusive culture where everybody cares about each other’s well-being. We say that the sum is greater than the individual parts. We are not creating an environment where it’s all me-based environment.

It’s that team thing that you spoke about. It’s recognizing that I’m part of this team. If I come to work today and I’m sleepy, drunk or something, that’s going to have a major impact on everyone else. I’m going to get well-rested. I’m going to take my cold shower. I’m going to do my pushups so I come to work fully relaxed and alert.

You said, “Have a boring portfolio and live an exciting life.” Our mutual friend, Emily Sandberg Gold, gave me that one. We had her on Episode 5. She has been an incredible friend and supporter of ours. What about this concept of possessions over experiences or is it experiences over possessions?

Let me go to the first one, which I’m fascinated by. I think so much about this, “Have a boring portfolio and exciting life,” because this is the one arena of our lives like investing and finances, where you can do well if you keep it simple. I’m always amazed at how complex we’ve made especially investing. We’re trying to figure out strategies. We’re cherry-picking stocks. We’re trying to figure out strategies for timing the markets. Many studies have shown that it’s virtually impossible to time the markets and cherry-pick stocks.

TJP 66 l Spencer Sherman Abacus Wealth Partners

Spencer Sherman: -”Have a boring portfolio. Live an exciting life.”

You might think that Netflix is a great company, but so does everybody else. They’ve already priced it high. Your chances with Netflix are almost the same as with any other company to do well because there’s so much information flow nowadays. If you just invest in a very simple way or if you buy thousands of companies in an index fund, you’ll do well. Historically speaking, you’ve done better than average.

Maybe you won’t get an A-plus. If you can get a grade of an A without any effort, wouldn’t you take it? Why not? Let go of all the effort. I had a client who was spending weekends researching stocks. He was not available for his kids, family and wife. Finally, he let go and he’s now taking up music. He’s playing in a band on the weekends. He’s spending time with his wife and kids. He is making more money. He let go of the idea that he had to research his own stocks, which in the end was hurting his return.

He wasn’t even good at it.

Invest to make money. Don’t invest for entertainment. Click To Tweet

Most of us aren’t. What the researchers are saying is it takes luck to be good at picking stocks. It’s not just skill. They can’t figure out why some people are so successful with picking stocks or timing the markets. What they’ve often found is that it works for a short period of time, and then their track record in the next 5 or 10 years fails. There have been many studies on mutual funds. The top quartile in the last ten years is not in the top quartile in the subsequent ten years. The results are all over the map. This is an area where you can do well.

You don’t have to over effort. It’s not like someone could do exercise to you. Keep it simple and keep your money spread out. I do this for myself. You’ve got Nobel Prize-winning economists like Eugene Fama saying the same thing. He’s saying, “Keep it simple.” He won the Nobel Prize for Economics in 2013. Keep it simple, and then spend the rest of your life in exciting ways. If you need adrenaline, take up skydiving or something else or join a rock band, but don’t get the excitement from your investments. Invest to make money. Don’t invest in entertainment.

How do you train that? How do you get someone to understand that both as a client and advisors that come into the firm? We have emotions. As you’ve said, we are human. We are not immune. Just because you come into Abacus as a client or as an advisor, it doesn’t mean that all of a sudden, you’re devoid of all emotional things.

It’s in us to want to be proved that we’re smarter than the average bear. We understand the idea that there’s perfect information flow almost out there with the markets and for everybody else. They shouldn’t be trading or cherry-picking stocks. We think, “I know something that nobody else knows.” We want to believe that. The studies are showing that women are better investors than men.

They’re also better shooters.

That’s what I also heard. I heard that they’re better fighter pilots. In stressful situations, I’ve heard the women follow the rules and the men improvise and make stuff up. They get this overconfidence. The New York Times revealed the study on this. They said it might be from testosterone, but men tend to have this overconfidence, and women tend to have a little bit of underconfidence.

With investing, they’ve done all these studies over long time periods showing that women are vastly outperforming men as a whole. It’s incredible because they’re doing something very simple with their investing, and they’re making more money. They feel like they’ve got to keep making it more interesting. They had to reinvent the wheel. They got to prove they’re smarter than the average bear. I say, “Make it easy. Make the rest of your life interesting and complex.”

There just got to be this constant reminder.

To answer your question, it’s this reminder that you don’t need to make it complex to win and notice that desire to make more than everybody else. Where is that coming from? Aren’t you enough just the way you are? What does that mean if you earn the same returns as other people? What if you don’t knock the lights out on investing, but you’re more likely to hit your numbers? Isn’t that enough?

Start looking for what we are going for. Maybe what we’re going for is that adrenaline rush. Maybe our life is boring and we need to look at that like, “Why is my life feeling so boring that I need to get this excitement for my investments? What’s there?” That’s where maybe the opportunity is. It is to look at that feeling of boredom and how do I work with that.

It’s a simple solution for me. It’s called the Ducati. Go buy one and you can have all the fear and excitement you need. You said, “I don’t pretend to be a typical MBA, but I was a stand-out financial advisor because I know that emotional intelligence determines financial success.” I want to talk about emotional intelligence because it can be defined as the capacity to be aware of the control and express one’s emotions to handle interpersonal relationships judiciously and empathetically. It’s also a leading indicator in hiring principles.

You see corporate recruiters all the time say, “We’ve got a test on emotional intelligence.” How do they react to these testers? People have made billions of dollars developing all of these different frameworks and tests that analyze and assess people’s levels of emotional intelligence, but it’s composed of self-awareness, self-regulation, motivation, empathy, and a level of social skills. You have to have these components. When I look at the nine characteristics of performance that Special Operations Command uses, we have the emotional strength and we have effective intelligence.

Emotional strength is our ability to maintain calm from chaos. Effective intelligence means, “Can we take our experiences of our past, apply them to the situation that we’re in now, and make a more informed decision because we have had a similar experience that now drives our thought process?” The blend of these two things becomes this emotional intelligence piece. Can you define emotional intelligence, and why is that at the core of mindfulness?

For me, emotional intelligence is having this ability to know what’s happening inside on an emotional level as I’m sitting here with you, and also being able to sense what’s happening with you. If I can read what’s happening to you, I can read the subtext of what you’re saying because often, it’s the subtext of what’s below the surface of the words that is what the person’s trying to communicate.

That fear will transform into something else when you can just be with it. Click To Tweet

If a client was to call me now and say, “Spencer, what’s happening with the market? It’s going down. It’s never going to come back.” I can say, “I’m hearing that you’re upset about the market.” “Yes, I’m upset about the market,” I can keep validating what they’re feeling that often will help someone calm down so maybe they can hear some information. Whereas if I give them the information first, they’re not going to get it. They have to gain some emotional intelligence first. That’s key both as financial advisors.

When we’re working with our finances and investing, it is to know that when the markets go down, most of us are going to feel fearful and want to run for the exit signs. If you know that about yourself, that’s emotional intelligence. You can say, “I’m terrified, but I’m not going to act on it. I’m going to call up a friend or my financial advisor and say what’s happening. I’m not going to just call Charles Schwab or Merrill Lynch and sell all my stocks. I’m not going to do something impulsive. I’m going to listen to what’s happening here first before I act impulsively.” That’s got to be true in every area of our life, including the military. You don’t want to be acting out of that emotion.TJP 66 l Spencer Sherman Abacus Wealth Partners

We don’t make our best decisions in a reactionary state.

That’s where resilience comes through. The markets may take weeks, months or even several years to recover but in our minds, it feels like forever. Can we have resilience? Can we have this informed intelligence from the past that if I look at the past downturns, the markets generally come back in 2 to 3 years? It has only been six months. My mind is exaggerating the time. It feels like ten years, but it has only been six months. I’m going to be patient right now. It’s going to come back.

That patience is the hardest part.

That’s where mindfulness comes in. We can see those emotions and be witnesses to those emotions. When we start acknowledging those feelings like, “I’m feeling scared. I’m feeling this fear,” that fear starts to simmer when we can meet it and be with it. It can change into wisdom. We can see what we need to do instead of staying immersed in the fear.

That’s what drives the action. We’ve had a number of conversations about fear. Everyone says, “How do you combat fear?” People will ask me, “You were in the Army. You were in Special Forces. Weren’t you scared?” I was scared. If you were not scared, there’s probably something that you can talk to somebody about because that is the natural emotion to feel when you are in those certain situations. Can you react? Olympic athletes talk about this all the time. Laura Wilkinson talked about it. The first step to reacting and taking action on theory is saying, “I’m scared. I’m nervous. I have fear.”

Acknowledge it. That’s the key. Acknowledge what’s happening. Instead of having that fear have you, you’re on top of the fear. You say, “I’ve got some fear rumbling in me. I’m aware of it. I’m going to be with it.” I might even nurture it and say, “I’m right here for you. I feel this fear and I’m not going to respond to it by trying to get rid of it at this moment by selling all my equities or something like that, or going out to spend a bunch of money because I don’t feel good about myself and because I don’t want to feel this fear.” That ability to feel fear is a tremendous skillset talent. When you can feel that fear and be with it, you don’t have to medicate it, spend money to get rid of it or do something drastic like selling your stocks, that fear will transform into something else when you can just be with it.

I want to talk about your course, Fearless Finance: Financial Freedom on the Road to Enough. In my research, you were described to me this way, “To this day, Spencer comes to work with a beginner’s mind. He supports and thanks the team. He asks for opinions. For their feedback, he surrounds himself with people who want success for them and him, tell the truth and give their opinions.” I went through a good portion of this course. In so many ways, the course resonates and epitomizes what this quote says about you. Before we get into it, I want to ask you your opinion of how you were described.

I love the beginner’s mind. I hope I live up to that. Beginner’s mind is this Buddhist idea that is amazing. If all of us could take on that beginner’s mind, the world opens up. The beginner’s mind is about seeing things as they are. It means when you see your spouse, child, or best friend, you see that person in a completely new way. You’re completely receptive to what’s happening now. You’re not coming with this agenda as to how you’ve perceived them in the past. That adds years and richness to your life because you’re open to seeing things for the first time.

You’re coming almost with this childlike wonder for everything instead of, “There’s Fran again. I know who he is. I know what he’s going to say.” That openness to possibility is a great place to be, whether you’re in the financial world, military world or anything to be sensitive to what’s happening now. A client walks in and you’re expecting and thinking this client might be happy because maybe the markets are up. They might be miserable. That beginner’s mind is open to whatever is present in the moment. It is letting go of all your conditioning from the past so that you see yourself and others in a fresh way.

I love that idea. I try to teach that idea to my colleagues at Abacus to greet clients with those fresh eyes. If a client tends to complain about their finances or something, see them as this new person when you meet them. We all want to be seen that way, even our best friends, spouses, kids, etc. Our kids don’t want to be seen in a box. They want to be seen in this boundless and expansive way that anything is possible.

It’s a way of bringing out the best in somebody. If you’re not good at doing spreadsheets, but I have this mind that’s open to any possibility, maybe you’ll get better at spreadsheets. If I only see you in one way and everybody else sees you in that one way, it reinforces what you already might think of yourself. We’re trying to bring up people’s potential. Here’s another thing we do. This is one of the ideas that has helped us a lot and helped me in my personal life too. It’s the idea of UPOD, Under Promise Over Deliver. That has saved me.

You talked about what has helped me gain resilience, calmed me down, and helped me with my mindfulness. UPOD is one of the key ideas. It’s telling clients that you’re going to deliver something next week when you know you’re going to get it to them this week, but exaggerating how long something is going to take so you’re always early with it. It’s telling your spouse or friends that you’re going to show up at 6:00 and then showing up at 5:30 or 5:45.

Enough is actually this boundless idea. When we're in this place of enough, of sufficiency, anything is possible because we're at ease. Click To Tweet

Giving yourself those buffers in life decreases stress. Because we’re so expectation driven with each other, your clients will love you. It’s not about what you do for them. It’s about what you do relative to what they expect you to do. If you can set the expectations below what they receive from you, they’re going to love you. They’re going to think you’re an A-plus person.

That’s a super important concept. There are two main concepts of Fearless Finance that you’ve put forward to cultivate inner wisdom. The first one is the fact that we’re all going to die, but very few people want to think about this. I don’t want to think about it. When you talk about finances, that has to be the starting point in a lot of conversations.

The second one is the concept of enough and how you define enough. You have this dependency that you’ve created on having these things or this accumulation because you feel you’re going to run out one day. You have almost this mindset of, “I have to have enough because I’m going to die one day, but I don’t want to talk about dying one day.” I’m wondering if you can take these two central tenets, speak about them, and why they form the foundation and our starting point for how you train this mindset, mentality, and eventually your formula.

TJP 66 l Spencer Sherman Abacus Wealth Partners

Spencer Sherman: “The problem with going for more and more and more is it trains our brain to be in a place of scarcity, a place of fear because we’re never arriving.”

Let’s start with enough because that is so foundational to financial wellness and general wellness in life. Enough sounds like a very limiting idea. Who would want to go for enough? Why not go for just more and more? The problem with going from more and more is it trains our brain to be in a place of scarcity and a place of fear because we’re never arriving. We’re saying, “I’ll have enough when I double or triple my money.” If we’re training our brain to expect to arrive in the future, the brain will start to think that enough arrives in the future, that it’s never right now, so we never arrive. We’re always in this place of fear and scarcity.

Enough is this boundless idea. When we’re in this place of enough sufficiency, anything is possible because we’re at ease. We’re in that parasympathetic nervous system that’s a more relaxed state. We’re no longer grasping. We know in our lives that when we’re grasping in the business world and certainly in the investment world, that’s when we tend to make our mistakes. That’s when I invested in a privately held company I should have invested in because somebody told me I was going to hundredfold my money. I was grasping. I didn’t feel enough that day and he caught me on that day. I was like, “This is going to take away that whole of not feeling enough.”

There are two kinds of enoughness. There’s financial enoughness. We all need to have some basic level of finances in order to pay for our basics like food, shelter, clothing, water and all that. Economists have found that our happiness is correlated with money, but only up until a certain point. Maybe up until $80,000 a year, $100,000 a year or $150,000 a year, depending on location and family size. As we keep going up that income ladder, eventually, happiness plateaus.

There is a way to get to enough because for most of us, we don’t keep getting additions as our wealth continues to expand that financial enoughness is possible. The most important thing is the cultivation of this inner enoughness. It’s this sense that I have enough today. I have enough time, friends and money that I do enough that ultimately I am enough. When we’re in that place, magic happens.

We’re more likely to get the job when we’re not grasping for the job or get the net new client where we’re not grasping for the new client. We’re more likely to do well in sports. The best sports people are more relaxed. That’s what I’m trying to do with myself and everyone. It’s to help everyone get to this place of enoughness inside so they’re not straining for more. Straining for more keeps us in that cycle of fear and scarcity, which is not a healthy place to live.

Many things have come to my mind. They say, “More money, more problems.” The argument is, “Can money buy happiness?”

TJP 66 l Spencer Sherman Abacus Wealth Partners

Spencer Sherman: “We’re actually thinking that we need more to get happy, when really we can be happy right now.”

It can up to a point. There are many people who benefit from having an income of millions of dollars a year. One can be very impactful. You can do great philanthropy. It might be that you are having more happiness from having more money. The studies, which you have to take the studies with many grains of salt, are suggesting that for most of us, we don’t need more than a certain amount of money to have that sense of enough.

We’re thinking that we need more to get happy but we can be happy right now. Here’s the irony. If we can get to this place of enoughness, what I’ve seen with my clients and others is we usually end up making more money because we’re no longer striving to get more. We’re okay with what we have. That’s the best place to be.

If you want to expand your business in some ways, it’s coming into this sense of sufficiency with what you have now. Enoughness is letting go of this Western cultural idea that you’ll always need more and that more is always better. I say more comes when you can rest in enoughness. It ties into some of these Buddhist ideas like the equanimity of being okay and being satisfied with the way things are.

How does that tie into having to think about death and what’s going to happen to this accumulation of enough when you don’t need it anymore?

It ties in several ways. One is that when we recognize that we’re enough, we tend to live much more fruitful and engaged lives because we’re not striving. We’re not missing the present moment. All of us come to realize at some point that life is finite. All of our great grandparents or great parents are no longer here. It’s very likely that we won’t be here one day as well. If we can start living more at this moment, and one of the ways to do that is to recognize that what you have is enough now and start being more present-minded, and that’s where mindfulness comes in, you get more from each moment.

Maybe you could just live more fully, if you don’t have the burden of death on your shoulders. Click To Tweet

If you take care of the moments, the years take care of themselves. With death as well, it’s knowing that death is going to happen. How do you want to live your life now? What’s the balance? A lot of people put so much focus on saving money for their 80s and 90s that they forget about living now. They’re saying the message to their kids that life is just about putting it away for future generations. Your kids are likely to do that or maybe they’ll react and do the opposite of that.

What are you teaching your kids when you’ve got this fear of death and can’t spend and enjoy your money because you’re in so much fear of your demise? One of my meditation teachers sleeps in a coffin occasionally because he wants to get so comfortable with death. He feels like the more comfortable he’s gotten with death, the more joy he has in his life. That’s an extreme example. I’m not suggesting any of us do that. I don’t do that. In many traditions, there is this contemplation of death. In our culture, it’s the opposite.

We don’t even talk or think about it. If we can see that death is going to happen for each of us, we might live that much more wholeheartedly. If we’re not in fear of something, we don’t have that energy trying to keep death at bay. We don’t have all the energy going to that fear. What will you do with all that fear of death? There’s energy going to that. What if you didn’t have that fear of death? Maybe you could just live more fully if you didn’t have the burden of death on your shoulders.

How do you define financial success?

You’re at ease with your finances. You’re using your money in purposeful ways. You’re impacting yourself, your family, and the world in beneficial ways. You’re using your money in ways that are aligned with your values, which is very tricky because there’s so much cultural noise that we tend to spend, invest, save and give in ways that our neighbors and friends do. I’m trying to get each of us to do what feels true to ourselves. Buy the fancy car and the big house if that’s who you are, but start letting go of trying to match what other people are doing. It’s not easily done, but there are tremendous rewards from matching your own values.

This ties nicely into the next question I had for you, which is about the four negative emotions that drive behavior. Those are anxiety, envy, shame or fear, and selfishness. You choose the first one.

I want to go to envy because I feel I’ve known myself. I know for so many people, there is so much comparison thinking happening. Comparison thinking is thinking about the fear of death. It distracts us from our purpose and takes away energy from us. Comparing ourselves to others and envying what other people have diminishes our own power and energy. I had envy in abundance. It’s not something you want to have in abundance with a friend of mine. He did everything so well. He had New York Times bestselling books. He was a better meditator. He had a better exercise program.

Everything about him seemed better than me, and it was eating me up. It was keeping me from flourishing. My friendship with him suffered as a result. I then came upon this practice, which changed my life and relationship with him. It was the most counterintuitive practice. I resisted it because the practice says, “Wish the person that you envy wellness.” I said, “There’s no way I am doing that. This person has so much. I don’t want to wish them more wellness and abundance,” but I started doing it because I reached a point where I said, “Nothing else is working.”

TJP 66 l Spencer Sherman Abacus Wealth Partners

Spencer’s emotions that drive poor financial decisions

It was hurting me. I was suffering from this relationship. I kept thinking about this person. Every time they had a success, instead of feeling joy, I was feeling envy. I’m like, “Why not feel joy as much as we can in our lives?” I started wishing this person well. After several weeks, nothing was changing. I said, “What’s going on here? Nothing is changing.” I said, “This is a practice that people have been doing for several thousand years. It’s a Buddhist practice. I’m going to keep going with it.”

Around the six-week mark, things started to shift. It was weird. All of a sudden, I felt okay when my friend called me up with success in his life. It was like, “Wow.” I’m actually feeling happy for him. I noticed it started happening with other people as well. All this extra joy came into my life. My friendship with this person drastically changed. I freed up all this energy. I started feeling better about myself. It’s hard to live with envy and feel good about yourself.

I was having a similar conversation with a group of former Green Berets like myself. We were talking about a couple of guys who’ve done tremendously well for themselves. It was the same day that we have become so bad as an organization at supporting the guys who were out there. They’ve made a name for themselves. They’ve done all this great stuff. Too many times, we looked at them and were like, “That guy is full of shit. He’s a liar. Nobody believes him.”

We made the decision amongst this group of four of us. We said, “Let’s just support everybody. We go to stop this. Let’s support these guys because what they’re doing is awesome. They have built tremendous followings.” We will cut out so much nonsense and bring the community together where everybody will come up if we say, “That guy is doing an awesome job, and I’m going to support everything he is doing.”

This is an incredible practice. We all have this comparison thinking. We have to do it with intention. In the beginning, it might be a little bit of fake it until you make it, but trust the process that if you keep wishing those people well, things will start to change for the better. It’s an incredible practice that I am so grateful for. It was a big backpack to be carrying of always feeling this sense of, “What about me? Why can’t the sun shine a little bit more on me and a little less on him?” Now, I’m fine if the sun is shining all the time on him. The more, the better. It’s not just this zero-sum that came. There are plenty of opportunities out there.

Here’s the next one. Anxiety.

Money produces so much anxiety within us. The American Psychological Association said that money causes more stress and anxiety than almost anything else. There are ways that we can increase our anxiety. We seem to be following those ways. We are all reading books on how to increase our anxiety. Let me tell you how to increase your anxiety, and then that will maybe inform us of what not to do. We listen to what the markets are doing every hour or every day.

Comparing ourselves to others, envying what other people have, diminishes our own power and energy. Click To Tweet

It’s also every minute. There are television shows or radio.

It almost seems like we want anxiety. It’s time for us to start recognizing it. We have this human body like this machine. We have a sense of how it works. We need to start recognizing what we’ve learned from it, so we don’t keep repeating the same mistakes. If you keep watching something that often, it’s going to create more anxiety. We’re going to see more volatility. You don’t want to watch volatility that you don’t need to be watching. You don’t need to be aware of every thought your teenager has because if you knew every thought, it would make you feel like a bad parent.

Even if they think about what you were thinking about when you’re their age. You’re like, “No, but they can’t possibly be thinking about that.”

If we start pursuing every thought in our mind, it produces more anxiety instead of saying, “There’s that negative thought. I’m just going to let that one go by.” It’s a much wiser approach. We don’t need to be watching the market’s movements every moment. We don’t need to be checking in with our spouse, “How is our relationship going now? How is it going at this minute? How is it going that minute?” That fuels anxiety.

We need to recognize this profound enoughness that we have at this moment. We don’t need to look for confirmation that we’re doing well by checking our likes on Facebook or our email accounts to see if we got that email back. What if you’re enough just the way you are? What if you’re already doing enough, and you don’t need to reach for anything to validate your enoughness? That is freedom.

Next is shame or fear.

There’s a lot of shame, especially around our past money decisions or mistakes. We all have that, “If I had bought that house, I would be wealthy. If I had invested in Apple or Amazon at the beginning, I would have so much money. If I didn’t invest in that company that went bankrupt, I would have a lot more money.” The way to cut through shame is to start being truthful with what’s happening with your finances and to start knowing your numbers.

It’s painful at first to know your numbers. How much are you spending on a monthly basis now, and then how much would you be spending if you weren’t earning money or not working? It’s great to know those two numbers. How much do you have in retirement assets? How much do you have in other liquid assets? How much do you have in debt? Knowing those numbers on a quarterly, semi-annual or annual basis is so healthy.

The anxiety gets produced if we want to know those numbers on a moment-to-moment or daily basis, but those quarterly or semi-annual check-ins on the numbers are so helpful. The truth will set you free, especially on the numbers. It will inform us as to what we need to do. We’ll make wiser decisions because we know the numbers. It will also motivate us. If we keep seeing that our expenses are more than our income, hopefully, we’ll do something to course correct sooner than wait until the end of the year. For many of us, maybe it’s to wait for 2 or 3 years before we course correct. It’s the same with our investments.TJP 66 l Spencer Sherman Abacus Wealth Partners

A lot of people are in this delusion of, “I know I shouldn’t have invested in those investments. I feel a lot of shame around that. I don’t want to talk about those, so I’ll tell my friends about the fact that I bought Amazon and made a lot of money on Amazon.” The important thing to know is what’s your total annual return. Know every year what your total annual return for all your money is. Know the truth of what’s happening. It might even start to bring shame up more, but then you’ll be needing it. It will be exposed.

When shame meets the light like that and you know the shame, it starts to dissipate and weaken. It won’t grip you as much. That’s what I would say about shame. Know that it’s inevitable because we talked about impermanence. You’re going to make a bad financial decision in the future. Know that in advance and that everybody does. Know the universality of making silly financial decisions. It’s going to happen. See the bigger perspective. Yes, you invested in this company that you shouldn’t have invested in this, but look at the big picture of your whole. Keep coming back to the totality of what you have.

What about selfishness?

The opposite of selfishness is generosity. Much of what we’re talking about here are these Aikido movements. It’s counterintuitive. As I said, wishing the person well who you can’t stand on how much success they have. Selflessness is miserliness. Behind that selfishness is fear. Fear is destructive. It’s destructive to our creative abilities. We have so much talent within us that’s untapped. That fear is an armor that’s keeping us trapped. One way to break through that is to cut through selfishness and become generous. Start doing it.

It doesn’t have to be with money. You can do it with your time, resources and skills. Start helping other people. Maybe even give away some money. The opposite of selfishness is toward generosity. This is counterintuitive. Why would I want to give away money, time or resources if I don’t have much of myself and I’m scared? The exact way to cut through the fear is to start being generous. When you start being generous, and there have been all these studies on it, it impacts the brain in very positive ways.

What if you're enough just the way you are? What if you're already doing enough and you don't need to reach for anything to validate your enoughness? That is freedom. Click To Tweet

That is a good thing for our lives and our finances. The brain doesn’t know necessarily how generous you are or how much money you’re giving away. Start doing something because it’s going to tell the brain that you must have enough. It’s a way of tricking the brain almost like, “I must have enough. If I have enough, then I don’t have to live from a place of fear. I can relax. If I can relax, I am more likely to discern opportunities in front of me.” This is so connected also to when we are generous and doing philanthropy.

We’re also sending signals out to our children, friends and extended families about what we value and how we want to impact the world. We know we can’t take it with us. It ties back to death. Generosity sends a very impactful, powerful message to the next generation like, “This is what you can do with money. It’s not just about spending on oneself.”

There have been studies showing that generous families keep their money. Fearful, miserly families end up exhausting their resources over generations. It’s counterintuitive because the ones that are generous are healthier. They’re not living as much in fear. The next generations get the idea that money is not just to be used selfishly, and they become better stewards of the money. Generosity can help you keep more. I have a story about a couple. They were very fearful about money. They wanted me to double their money and I doubled it. They then said they needed another doubling.

That’s how we are. We just want more and more. That’s why I talk about enough. Somehow we have to declare that we have enough because otherwise, we’re on that treadmill of always wanting more. It’s universal. Finally, it was through being generous that this couple ended up feeling their sufficiency and letting go of all of that fear. They have less money now than they did ten years ago, yet they feel wealthier. They feel freer. That’s what I want for all of us. I want us all to feel relaxed around our finances and feel like we’re doing good things with our money, and that we’re not stressed about it because that’s not a fun place to live.

We live in this VUCA world, Volatility, Uncertainty, Complexity and Ambiguity. Look at the world order now. Internationally, it is being challenged. People are bringing up saying, “The dollar shouldn’t be the world currency anymore.” There are all these things that are going on that create this impermanence. That is VUCA. Everything is going to change. Everything has the 2nd and 3rd order that affects this interconnectedness. Those principles tie very nicely into this organizational design theory, but there are ways to combat that.

When we talk about VUCA, we talk about VUCA prime. That volatility is combated by vision, uncertainty is combated by understanding, complexity requires clarity, and ambiguity requires agility. You brought up a couple of them here because we look at these four feelings or these negative emotions that we talked about, anxiety, envy, shame and selfishness. You have developed what you call the inner compass. The inner compass is how we combat these equanimity, joy, compassion and generosity. We’ve talked a bit about equanimity and generosity. What about joy and compassion?

I always say that joy sounds very simple. The idea of joy almost sounds superficial. It’s a profound quality that we overlook because I’m not talking about the joy that comes from seeing that you got admitted to Harvard or that you won the lottery. That’s a short-lived joy. There have been a lot of studies on this. When we get an object, find out something, hear some great news, or get the job offer that we wanted, it’s usually short-lived. I’m talking about a more sustainable joy that is with us more of the time. That more sustainable joy feeds our brain.

I’m all into making this brain work as well as it can so we can make the wisest financial decisions and have the fullest lives. To me, joy is a precursor to wisdom. It’s a precursor for living the best life you could imagine. Joy comes from often being present. Mindfulness can help us access joy. What I noticed is the opposite of joy is when we’re distracted often. When we’re in distraction, it’s hard to feel that joy, but when we’re focused on what we’re doing like we are now, there’s a joy that naturally comes from that. It’s liberating.

Find the career that you love because when it comes to money, it’s not just how much money you earn per year. It’s how much money you earn over your lifetime. If you’re loving your work, it will be more sustainable for you. You’ll do it longer. Find the friends that you love being around. Forget about how much they like you. Look at whether you are enjoying it. Do you feel good when you’re around them? What’s going to bring you sustainable joy? Is that a new electric bicycle that maybe you’re going to ride three times a year? Is that going to bring you a lot of joy? Maybe or maybe not.

TJP 66 l Spencer Sherman Abacus Wealth Partners

Spencer’s Inner Compass

Start looking at things from that place of joy. Don’t underestimate the impact of joy. Joy has a great impact on our health and our wallets. When we’re feeling that joy, we’re happier and less likely to do destructive behavior. We’re less likely to do the things that undermine our finances. There’s also this sympathetic joy that I talked about, where you’re feeling happy when another person is joyful or another person achieves some success.

Most of us in the Western world have left that out. “I can be joyful when I have successes,” but why not include everybody else’s success? If you can be joyful from that, then you’ve got that much more joy in your life. Joy is a great thing for your business. Who doesn’t want to work for a joyful person? You want to create a culture in your company where people are like, “This place is so joyful. I don’t even want to go home.” Joy is great.

Much of the time, we’re so focused on thinking, “I’ve got to find the work that’s going to make me the most money.” Maybe you find the work that you love doing that brings you joy. You’ll end up with more money because you’ll do it longer. You’ll be so good at it because you love it. Let’s talk about compassion. I’m not just saying this because you’re in the military, but I often say compassion is a great and powerful weapon.

There’s self-compassion and then there’s compassion for others. With money, especially, we need to bring in a lot of self-compassion. Have compassion for our past money mistakes and for the place we are now with our finances if your finances aren’t in the right place or you don’t think they are. Have compassion for yourself and for the messages that you got early on. I’ve done a lot of self-compassion work on the message that I got that money is the most important thing in the world.

To me, it’s not the wisest message to give a child. That might cause that child might run into a building that’s on fire. I have compassion for myself. I have done a lot of compassion work for my father. For his conditioning to be so fear-driven that you have that message that money is the most important thing in the world. When we start offering compassion to ourselves, it starts to dissolve that fear. It starts to connect us with our higher powers. We’re almost becoming the parents to ourselves that we wish we had. That’s what we have to start doing.

We have so much talent within us that’s untapped and that fear is an armor that’s keeping us trapped. Click To Tweet

We have to let go of blaming our parents and start becoming caretakers for ourselves. Be the nurturer that you want for yourself. Look for it from yourself more than from your parents or even from your spouse or kids. Be that nurturing parent to yourself. That is a way to heal so much. There have been studies on this that if you offer self-compassion to yourself, you’ll end up doing better. Self-compassion is not ignoring that maybe you didn’t do well with that investment choice or you blew it at playing basketball.

It’s seeing what happened honestly, but understanding that it’s universal that people make mistakes and offering that nurturing love to yourself. Also, having compassion for others. When somebody messes up at work and you’re saying, “If that person hadn’t messed up, my business would have reached its goals this quarter,” having compassion for that person will more likely lead to a better decision instead of reacting and saying, “I need to fire that person.” Maybe that’s the right decision but first, go to compassion. It’s recognizing that person was probably trying to do their best and from their conditioning, they ended up making a decision that didn’t work out so well.

We talked about humility. The ability to look inside, self-assess and understand in reality where you are and not this perception. You’ve got to be honest and have self-reflection.

With that humility and self-reflection, we can feel the difficult emotion and have compassion for the sadness that we might feel like, “I can’t believe I lost all that money gambling or making that bad investment. I took that job that didn’t go anywhere.” Feeling the sadness and allowing ourselves to feel that sadness and have compassion for ourselves will transform that feeling. What we tend to do instead is run away from it or shove it down, and that keeps it in place.

That helps us be resilient. That helps us bounce back. That helps us be adaptable in the future. We talked about effective intelligence.

It’s developing this friendliness towards whatever arises. There is equanimity. It is this friendliness towards everything, including the yucky stuff that we don’t want to see. It’s like, “There I go with a paranoid thought. Can I befriend that paranoid thought?” If I start befriending those paranoid thoughts, they’ll quiet down. If I fight them, they will get stronger.

I want to ask you about what’s next. You have transitioned the day-to-day leadership at Abacus Wealth to Neela Hummel and Mary Beth Storjohann. They’re now the co-CEOs, which brings up the question that I’m going to have to ask you about your ideas around having two people in charge. We’ve had this conversation with Seth Goldman, Chairman of the board at Beyond Meat and Founder of Honest Tea, where there are two schools of thought.

If you have co’s, you can either have defined lanes, or there are co’s who say, “We do everything together,” and that works for them. Number one, how’s the transition? What are you focused on now? When you look at co’s being a co-founder as you’ve built this company, how did you identify these swim lanes and create that trial marriage, and the marriage work after that?

At first, when Mary Beth and Neela wanted to become co-CEOs, they applied. They said, “We’re only applying as a team. We’re not willing to be CEO by ourselves,” I was hesitant. I was the one trying to convince each of them to also apply as individuals. They refused, no matter how much negotiating I did with them.

Were they already employees?

Yes. I started hearing what they were saying. Something shifted in me when they said, “We have our different lanes. We feel that we are able to course-correct each other. We’re able to bring out the best in each other.” I felt like I could be getting more with co-CEOs than I could with one CEO because they do have different strengths, and we all do. We’re getting the combination of the two of them together. I trusted that they had this great communication with each other.TJP 66 l Spencer Sherman Abacus Wealth Partners

They were also willing to put in place a system if they couldn’t agree on something. It goes to a third person to help them resolve a dispute. There’s a mechanism so that nothing goes unresolved for an endless period of time. Things get resolved quickly if they get to that stalemate point, so we have that in place. A lot of people say, “That’s the disadvantage of co-CEOs. Decisions don’t get made.” No. They have a mandate to make decisions quickly. If they can’t, there’s another mechanism placed to resolve it.

I ended up becoming very supportive of them. They are phenomenal at what they each do. They bring different things to the table. Neela is the master of inside communication of leading the team from the inside, inspiring, motivating, training and mentoring. Mary Beth is the master of outside communication and communicating what we do to the world. The two of them together make for great leadership at Abacus. It has been wonderful to have two women lead us. It is amazing.

It might also make for a great follow-up conversation to have with them one day. We will talk about how that’s going. You’re focused on seminars, courses, sharing your lessons, corporate retreats, and Clubhouse talks. How is that going?

We have to declare that we have enough otherwise we’re on that treadmill of always wanting more. It’s universal. Click To Tweet

It’s going great. I’m going to be teaching at a large tech company and a household name. I’m going to be teaching their employees about training their minds for financial success. At this tech firm, it’s full of overachievers, people who aren’t so fearful and are so much in that comparison mind. They can’t enjoy their money. They can’t spend any of it. They just feel they have to keep saving it so they can have as much as their neighbor. They’re bringing me in to do four 90-minute training sessions. I’m very excited about that.

My role at Abacus is about being a mentor to many partners and employees of the firm to bring in clients. I also am a strategic advisor for about ten clients in the firm. I do a lot of educational sessions in the firm. I also do daily mindfulness at 8:55 AM every day. I do five minutes of mindfulness. That sets me up and many others to have a much more focused day.

I know we spent the entire time together talking about the inability to predict the market. Here’s the second to last question I’m going to ask you. With everything going on, rising inflation, so much volatility, and we talked about so many components of it, where are we going in terms of the economic outlook in the next months?

I once had this meditation teacher and he was a Zen teacher. He was this profound teacher. People would ask questions, and he would often say in a very low voice, “Don’t know.” It was a profound “Don’t know.” He knew he didn’t know. That’s where I wanted to get to. I have ideas of what the future is going to bring with inflation and all that, but I really don’t know. Not knowing is a principle in Buddhism. It’s the beginner’s mind of having that open-mindedness that we don’t know what’s going to happen.

It’s like in the military. You don’t know what’s going to happen. You have ideas on how it’s going to happen, but you tell me about a situation that didn’t go at all according to plan. That not knowing will make us more resilient. I have a profound trust in the markets. The markets just reflect human beings. There are thousands of companies in the world. I have this trust that there are so many more educated and creative people nowadays. The internet has connected us. We are so interconnected way beyond what we’ve ever been. I believe in the future, we’re going to create innovative services and products to tackle all the big problems we have now. The markets will keep growing. That’s my belief that it will happen.

History shows that have been the case. The markets have always recovered. They’ve been incredibly resilient, yet we keep second-guessing that. We react as kids as we act on the car ride. We think the car is going to go on forever, but it’s going to end. We know it’s ended in the past, but our parents have to keep saying, “It’s only another couple of hours. We’re not there yet.” When the markets go down, it’s like, “Is this thing over? It feels like it’s going to go on forever.” It will not go on forever.

This thing will rebound. Smart people will realize and take advantage of that. Those of us who are more reactive will do something that we might regret later. You look at volatility because you mentioned that with the VUCA acronym. The way to decrease volatility is to look at your life. Look at your investments over a longer timeframe. There’s very little volatility with the markets if you look at over 10, 15 or 20-year periods. It’s only when you look over daily periods that you see huge fluctuations. It’s much smoother upward trends over 15 to 20-year periods.

It’s the vision. How do you combat volatility? Vision, long-term and where we are going.

We are so resourceful and creative. Necessity is the mother of inventions. We need to solve problems on this planet. We are more educated than we’ve ever been in the history of mankind. We will come up with great solutions. Those great solutions will lead to the new Amazons, Apples and Googles of the world. That’s the thing that I’m saying. Focus more on what’s possible in the future than on how the future is going to end or how dreary things look right now. I think more about what is possible.

TJP 66 l Spencer Sherman Abacus Wealth Partners

Spencer Sherman: ”I think more about what’s possible.”

Spencer, as we close out, the Jedburghs in World War II had to do three things as core foundational tasks or habits. They had to be able to shoot, move and communicate. If they did these three things with the utmost precision every day, they could focus their effort and attention on more complex challenges that came their way. What are the three things that you do every day in your world to be successful?

I don’t know if I have a 100% track record. The things I aim to do every day, maybe I’m 80% to 90% there. I sit quietly every day. When I wake up in the morning, my thoughts are ricocheting back and forth like a pinball machine. I’m worried about X happening. I’m thinking about this employee, this partner, and what’s happening with the markets. I’m thinking about what I am going to say when I speak. The mind is anticipating a lot and it’s chaotic. I want to calm that down so I can gain my center, some resilience, and some power. I find mindfulness to be so efficient at producing that centeredness, strength and stability that I need when I start my day.

I sit and let go of everything that’s on my calendar. I just say, “It doesn’t matter.” It doesn’t matter what happened. It doesn’t matter what is going to happen. What’s important is what is happening now inside. What makes me the most money in my life is that centering. It gives me the most joy. How do you feel joy if you’re not centered and always distracted? That is a foundational thing for me in my life. You asked for three things. Something else that I do is take cold showers. Cold showers wake me up. They get me out of that ruminating mind.

Do you know that ruminating where you have the same thoughts recycling and worrying about, “When is this market going to come back? When is my business going to rebound? When is my relationship going to change?” Those recycling thoughts eat us up. They keep us in misery, and the cold shower undoes that. I don’t know if I’ve ever had a cold shower where I come out in depression and misery. My mind has just opened up from that. It’s a shock to the system a little bit.

I do a compassion practice every day. In addition to the mindfulness practice, I also do a very short compassion practice where I offer compassion to this younger version of Spencer. That younger version of ourselves sits in us. There’s this little child in there. That’s that part of us that’s impatient, gets upset easily, reacts to things, and takes it personally when our friend doesn’t call us back, we don’t get invited to the party, or the client doesn’t do what we think they should do. We take it personally. That little kid in us needs some attention, so I give that little kid some attention every morning.

Start looking at things from that place of joy. Don't underestimate the impact of joy. Joy has great impacts on our health and on our wallet. Click To Tweet

I say the things that I wish my parents had said to me when I was growing up. That’s what I offer that little kid. I say, “It’s going to be okay. I trust you. I believe in you. I love you. I care for you. You’re completely okay the way you are, even if you don’t accomplish anything today. You’re totally good.” That’s what I feed into this kid. I love this kid. I offer this kid all this compassion, and that helps me set the day up.

Sit quietly to become centered, take cold showers, and compassion practice with the younger version of yourself.

TJP 66 l Spencer Sherman Abacus Wealth Partners

Spencer Sherman’s Three Daily Foundations

I’m going to offer one more thing because I know that a lot of people are like, “Cold showers are impossible.” It’s doing a few minutes of journaling. This is not something you necessarily need to do every day, but I do it several times a week. I find it very potent. There have been studies on journaling. It gets the ideas from the mind. It gets them onto the paper. I then promise myself that I’m going to throw out the piece of paper because I want the freedom to write anything on that paper.

If I know I’m keeping it, I’m going to edit myself in a subconscious way. I want to know that I can write anything, and it doesn’t matter because I’m going to destroy it when I’m done writing. It’s incredibly therapeutic to write anything down. All you’re awful negative thoughts, get them out of your mind. Put them down on the paper. Also, put down what you’re hoping to have happened today or what your intention is today. Get that down on the paper. Set a timer for 5 to 8 minutes and do it. Don’t pick up the pen. Keep going for that 5 to 8 minutes.

We’ve never had that one. We’ve had journaling. We’ve never had thrown out and drawn out the honesty, the raw emotion, and how you actually feel. I like that.

Write down your intention for the day and the quality you want to bring into your day. Write that down so you’ve got a game plan, and then let go of the results. You’re planting the seeds each day and you don’t know what’s going to happen. Be open that you might see things happen that aren’t what you expected, and they might lead you to more success than the outcomes you were expecting. Have you had cold showers on the show?

I don’t know. I feel like we may have. We’ve had people talk about ice baths, but it’s usually the elite athletes who enjoy the ice baths.

Getting outside early in the day is also powerful. Getting some sun on you, getting the wind on you, and smelling the outdoors connects me in a more wholesome way to myself.

That’s invigorating. Throughout this conversation, we talked about the nine characteristics of performance defined by Special Operations Command. It’s drive, resiliency, adaptability, humility, integrity, curiosity, teamability, effective intelligence, and emotional strength. High performers exhibit all nine of these, never at one time, because the situation that you’re in dictates what variation that you use and you need to have a number of them. I say that at the end of these conversations. In the conversation we had, I thought about you.

I pick one usually. Sometimes it’s a couple because I can’t decide. I think about what sums up you in my mind. This is one of those conversations where I’ve only been able to narrow it down to three. I am 100% sure that all of these are exhibited by you in everything you’ve done in your career. What comes to my mind is integrity and doing what’s right. That’s the starting point. That’s the beginning. When you ran into the fire and came out, that story is about integrity. Am I doing what’s right for my clients, for me, and for what I want to do in my life?

That then set off this chain of events for what you’ve built through the years. There’s this concept of emotional intelligence that you talked about. For me, it’s effective intelligence and emotional strength, and then we build on that. Also, how you have built on your experiences throughout your career to now be in a position to share that experience and create an impact on others to become the best versions of themselves, and then the emotional strength.

Regardless of how the world has changed and what we face in all different environments, we have to remain even-keeled. The success that you have is a result of the ups and downs, the vision for the future, and your ability to be strong and true throughout all of it. I believe that it is so commendable. I sincerely appreciate you coming here. Thank you for coming down here and spending some time with me.

Thank you, Fran. What I appreciate about you is you have this sense of enoughness about you. You have this calmness and power about you that comes from this recognition that who you are is already enough. It’s boundless from there. That’s how I see it. I’ve gotten to this place where I feel like what I have is more enough than it’s ever felt. I can begin this life of service by helping as many people as possible. You, at this show, are a man of service. You are putting out great ideas and information and helping many people. Countless numbers of people benefit from your work, Fran.

Thank you. It’s about the impact for us. It wasn’t always this way for me. You called me out. You’re right. Since I started this a couple of years ago, I’ve never felt better or truer in my life. It’s been truly impactful. I’m so appreciative to everybody who has joined me on this journey and has become part of our Jedburgh team. Thank you for becoming part of our Jedburgh team.

I’m very happy to be here with you. It has been wonderful.

Thanks.

 

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