Money Talks

Early December I got the opportunity to interview Adam Torres about Money Talks. Adam is a semi-retired entrepreneur specializing in personal finance and personal growth (more info here). He coaches many people in the business sector and is featured in sites like Forbes, The Huffington Post, The Street and much more!

I brought Adam in to talk about money as the world has a major issue with managing money. Many people are in debt and not to mention struggle with managing money. The full interview is in the video below but today I’m providing a short version in this post.

Full Interview

When people first hear the words “Personal Finances”, most people jump automatically to accounting and groan about it. What’s your position when it comes to personal finances?

It’s not rocket science. People think it’s a complicated thing but it’s not. How I explain it is I use the analogy of a movie production. You’re the director and everyone is looking at you. You call the shots but everyone is also off doing their own thing as well. How I see financial planning is you having a script. The script is your plan and you need to have a plan. So you don’t need to be an accountant or know a lot about finance. Having a plan is just as easy as setting up a monthly budget.

What got you interested in the finance world to begin with?

I got into personal finance when I was 16 years old and still in high school. I also had a large amount of mentors at the start. Mentors are key to have.  At 16, I didn’t know what to do in life and one of my mentors recommended me to a position at a financial firm not far from my high school. I took it and soon I was at school for two to three hours a day and then I was an intern at that firm. I gained more mentors from there.

Excluding money, what is one thing you believe that people need to have in order to manage their finances?

I’m going to say mindset. Most of the people that I coach one on one or in an online setting is to bring out people’s “Money Mindset”. What that is is basically how you view and knowledge of money. I can also gauge your money mindset based on how you talk and how you feel about money. The problem is a lot of people don’t have a good money mindset and that’s because they had no one to teach them, they didn’t know. Not to mention their parents didn’t know either.

A lot of people are financially illiterate in this day and age, however there are many books out there to help with individuals to be more financially aware. What sort of books or sites would you recommend people to check out if they want to be more financially literate?

Take small steps towards changes. You don’t need to make drastic changes to your life. A look at your bank statement will show where your money is being spent. Secondly, see how much money you’re bringing in. If you’re spending more than what you’re bringing in then you need to make some changes. Go back and look to see what you’re spending and see if changing those habits will benefit you.

You don’t need to make drastic changes to your life. A look at your bank statement will show where your money is being spent.

As for books I’d work with beginner books. Don’t take it as an insult or anything. I’m saying if you don’t have a huge background in finance, you don’t want to jump into something really technical like the nuance of trading stocks or something that may never actually be important in your life. You want to be looking into books that are for people who want to know a little bit more about money. Books like Robert Kiyosaki’s Rich Dad, Poor Dad. And also my book called Money Matters is written in the same light as those books too.

My thought process is even though I know all of this technical knowledge and been in this industry for over a decade, but how did I get here? If I only have your attention for twenty minutes, if I give you really technical stuff it may not help you at all. But if I go with something basic, I can appeal to a larger audience and people may learn something from it.

To pick up a book of Money Matters, order here.

In some cases people turn to financial advisors for help. What are some good questions to be asking financial advisors that build trust between the two?

As far as what I do people see me as an influencer in my circles and one thing that I teach people is branding. What I mean by that is that if you don’t know the brand it’s going to be tough. You have to get to know the person, sitting behind a desk doesn’t cut it. I wrote an article that said “sitting behind a mahogany desk no longer makes you creditable.”. It’s more so the connection that you make.

It may sound strange coming from a numbers guy but if one guy is charging you 1% and another is charging you 0.75% you may be saving money there. But what will happen when we get our next financial crisis? What will happen if you go through a divorce? What will happen if you lose a child or a spouse? You’re going to need to make a connection with them so that they can guide you and coach you through some of the most difficult times of your life. Whether or not you pay them a little bit more or not, it doesn’t matter. I stand behind that every person I work with I tell them if you pay an extra tenth of a percent or not you won’t be missing retirement because of that if it comes to that.

Sitting behind a mahogany desk no longer makes you creditable.

What got people was poor judgement calls, like the 2008 crash for example. The housing market crashed and in a panic, they picked up the phone and call their financial advisor. If there wasn’t a relationship established, you’d hold back information from them. Also the advice would be too broad, not specific to you. This is again because you didn’t build a relationship with the person. So they go and sell all their stocks and that’s where people mess up their future. It’s the same with the tech bubble in 2002. A lot of people didn’t have advisors telling them “Hey this is risky and it doesn’t align with your goals. I can’t predict the future, but your goal is to retire in 3 to 5 years. It’s not really important.” That’s where people really suffered.

What is one type of financial instrument that you recommend people to invest in?

Mutual Funds. Think of them like this you can buy one stock or one bond or you could buy one basket. Think of it like you’re diversifying. Which basically means you’re not putting all of your eggs into one basket

Check out Adam’s interview on his new book Money Matters.

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