Are you living within your means, looking at all of your assets and liabilities, and planning for your future? There are a lot of things you could do to achieve financial freedom, and they are not grand things. Listen to this episode as today’s guest Henry Daas shares the importance of financial intelligence so you can start living the life you dream of. When you start adding up all of the things you spent money on that aren’t essential, you’ll be surprised at how much it has been. Although, there are certain circumstances that you can’t control, such as the pandemic and other disastrous events. But you could still start equipping yourself with the knowledge you need for financial freedom. Tune in to learn how to handle your finances!
Looking for some help? Jen is seeking individuals who would like to be featured as a panelist on the show for her Mortgage Lending Mastery Mastermind Series. Email Support@KineticSparkConsulting.com to get scheduled!
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Financial Intelligence: How To Successfully Live Within Your Means With Henry Daas
My guest is Henry Daas. He is a dyed-in-the-wool New Yorker, serial entrepreneur, author, coach, screenwriter, avid golfer, biker and international traveler when he’s not in lockdown. He is also a licensed real estate salesperson in the state of Connecticut. More importantly, he is the author of Financial Intelligence.
Welcome to the show, Henry. We’re happy to have you here.
I love being here, Jen. Thank you so much.
Let’s get started. I want to talk about Financial Intelligence. I never heard the term until I looked up your information.
That’s because I made it up. It’s called FQ, which I thought I was very clever. IQ is intelligence. EQ is emotional intelligence. Although some people think FQ sounds a little profane. I said, “Get your head out of the gutter. It’s not. It’s Financial Intelligence.”
If you say it too fast, it could sound like that especially coming from a New Yorker. I love everything about IQ and especially EQ. I’ve done a lot of work with EQ through lizard brain work and other things. Some people don’t understand that the correlation between EQ to financial growth is exponentially better than the correlation between IQ. You could be the smartest person in the room but not have any money. EQ is something that I wanted to work on and make sure that I was growing EQ so that I could have financial growth in my life but what is FQ? We know that it’s being smart, maybe about finance but I’m going to let you tell us what it is.
It’s more than that. It’s funny you hit on something very top of mind. My very first chapter is called the Psychology of Money. When I first started writing this a couple of years ago, I sat down and I wrote a table of contents and I thought, “Where do I start?” You got to start with mindset because, as you said, it’s not about intellect. There are plenty of super brainy people who couldn’t manage their money to save their life. There’s no correlation there. I look at two goalposts. One is scarcity and the other is abundance. People have a tendency to oscillate between the two, depending on environmental circumstances.
As soon as the pandemic hit, people immediately went into turtle mode. There are more circling the wagons but then now, as you’ve seen the stock market run-up, the real estate market and inflation. Inflation is driven by demand. There’s a combination of a constraint supply but also demand. What happened? When everybody went into turtle mode and said, “I’m tired of being a turtle. I’m going to get out. I’m going to spread my wings.”
You talked about the lizard brain. I’m not a brain scientist, neuroscientist or shrink. My coaching contr
act says about five times. I’m not a shrink. If you say something that’s worrisome, I’m the mandatory reporter and I’m going to call 911. Understand the rules of engagement and let’s hope it doesn’t get crazy like that.
You got to think about what is going to trigger you and how you are going to behave. People talk a lot about financial literacy. Literacy is the ability to read and write. I know lots of people who can read and write but that’s about it. I wouldn’t trust them to walk my dog but they can read and write. We want to take those skills and marry them up with a whole bunch of other nuts and bolts skills and create a framework whereby you can make intelligent decisions with how to manage and grow your money. It’s as simple as that.
There are a couple of things that I look at but I thought I was living in abundance from emotional intelligence from an EQ perspective because people would say, “What can I do to help you?” I’d say, “I’m fine.” I had a shield on that protected me because I didn’t want them to think I was weak in business and that shield was living in scarcity, not in abundance. I wanted to bring that up because you happen to mention it. We do have to make sure that people that are reading this are not in that scarcity because you have to get yourself into abundance if you’re going to start taking on something like financial intelligence.
We have to make sure that people know that they’re not in it, that they don’t think that they’re in it. That brings me to something I look at online all the time is there is a graph. It’s called the Greed Index and you can see where the greed is coming and where the scarcity is coming in the stock market specifically. It’s not only stock. It’s several places.
I write a weekly newsletter and I put it up.
I’m always looking at that when I’m speaking to realtors or loan officers. I have a class that I teach called By the Numbers. It’s all about mortgage math for real estate agents and, ironically, mortgage math for loan officers because some of them don’t know everything. I’m always going to the Greed Index. I go into the index and say, “Let’s see where the market’s playing now.” Abundance and scarcity, I do want to make sure people are reading that. If someone thinks they’re living in abundancy before they head into FQ, when they’re going into there, what are some things they would be saying to themselves to know whether or not they’re in abundance versus scarcity?
It comes down to risk and your ability to assess that. When you talk about abundance, you can take a backward step and say, “Let’s pose a hypothetical.” I do this. I have surveys and things that I have concocted for people. I asked them hypothetical questions. “A good friend of yours wants to borrow $25,000 and they’re not quite sure when they can pay you back but they promise they will. What’s your response going to be?” Simple things like that. As you drill down, you can start to strip away this veneer of abundance and realize that that the underbelly of that is steeped into scarcity.Start with your mindset. There are plenty of super brainy people who couldn't manage their money to save their lives. Click To Tweet
My answer would be no.
That’s a pretty common answer. I do what they do on these psychological profiles where you ask a similar type of question, 3 or 4 different ways and you look for consistency in the answers. Sometimes you’ll get inconsistent answers depending on how you phrase it. In my experience, 8 to 9 out of 10 people are living in scarcity. I’ve yet to meet anybody. Even guys I know who are unapologetic gamblers, they’re still living in a bit of scarcity. To some degree, they’re fooling themselves.
Looking at it and knowing it, we call it above and below the line to abundance and scarcity, depending on the situation. You have some ways that people will be asking themselves these questions and if you’re reading, you will look up abundance and scarcity and above and below the line, you can find all kinds of stuff. There are books and articles on it.
I have a quiz on the Daas FQ website and it’ll give you back a number where your FQ roughly is.
Let’s talk about what you discuss in these 432 pages. Part of it is, “Maybe I’ll be financially astute when I get through the book.” That’s the challenge all by itself.
That’s why I do one-on-one coaching with people. I sell a course that goes with the book for $5,000 but it’s a lot of work and people have a tough time committing to that. I started coaching people for $500 a month. What I do is I will cherry-pick the parts of the book out and rearrange it in a way that works a little better for you than starting chapter 1 and going into chapter 15.
The book is a plan, a roadmap and customization. When you’re thinking about your book, tell us a little bit about some of the sections or chapters that you feel are the most pertinent for what we’re all in now. There are a lot of people that are either making a killing, a ton of money or those that are struggling because they’re trying to figure out what their next move is.
Sometimes people call it transformation but I call it transportation because you’re moving from here to there. There’s a gap and you’re moving from someplace. What are some of the things that you could pull out of the book for someone who’s reading that says, “If you’re in scarcity and you’re struggling now, here are some things you want to be thinking about. Those that are making a lot of money and high on the hog, what do they need to be thinking about?”
For every one of the former, the high on the hog, there’s 100 or 1,000 of them than the ones that are struggling. I’m writing a series now in my other newsletter that I write for FQ. I happened to be writing about wealth inequality in this country. Let’s take on the abundance people first. You’re killing it. You’re out there making money hand over fist. You’re complaining and the taxes are too high. I’ve been a stock trader for many years.
We got to let people know what a balance sheet is. That’s assets and your liabilities. Subtract the liabilities from the asset. Hopefully, that’s a positive seven-figure number and you’re a millionaire versus a P&L, Profit and Loss, which is a yearly thing. Profit and loss can be fantastic but if you’re not carving out a bunch of that money and investing it in something else to build up that balance sheet then you have nothing to de-risk yourself when the tide goes out.
When COVID comes along and all of a sudden, a cashflow goes to zero or goes negative and you don’t have anything else, you have a bank to put anything away. You are in some trouble. That’s beyond your control. I don’t believe there’s very much in his life that you can control but certainly the outside world, the environment, economics, you don’t need to influence that. It happens.
You have to be resilient through the ebbs and flows and peaks and valleys and all of that. It’s very well stated that a lot of people are good at making money but not good at keeping it.
You got it. That’s exactly what happens when you have the people on the other side who are struggling. What do I have to offer them? The first thing I have to offer them is a little bit of a cold slap in the face. It’s time to wake up. I was a screenwriter and I’ve written eleven screenplays. None of them have ever made it to the silver screen but that doesn’t stop me. The screenwriters work based on a three-act structure, the act 1, act 2 and act 3. Rising action, the hard part is the 2nd act and then everything has got to get wrapped up by the 3rd act.
The first act of my book, the first six chapters, is Psychology of Money. It’s figuring out your personal balance sheet and your P&L. Are you running positive? Are you living beyond your needs? Are you looking at all of your assets and looking forward? What are your contingent liabilities? What’s coming down the road? You’re 30 years old. It’s astonishing how much student debt there is.As soon as the pandemic hit, people immediately went into turtle mode. Click To Tweet
There’s a huge section of this population that is getting to be 30 years old and they have a net worth of zero so think about that. You’re going to retire at 65. You got 35 years, about the same amount of time that you’ve lived to make all the money that you’re going to be able to make. That’s a very difficult challenge. We got to get our head out or you know what, look at what it is, what we have and build a plan. This is all boring old-school act but it works.
You’re saying it in a different way and it’s not their mom and dad or our spouses yelling at us. It’s somebody else’s perspective.
It’s very nuts and bolts. I don’t think there’s anything revolutionary about what I’m doing but I try to package it in a way that will speak to people. It’s not technical. I’ve read lots of money books and some of them are like, “There’s no way you’re going to get through this. It’s all academic.” A lot of it is nonsense because it’s not a life that someone has lived. I called my book is a little bit of a money memoir. I talk about the things that I did right but I also talked a lot about the things that I get wrong and all the things that happened, the stupid mistakes that I made, reversals of fortune and yet here I am. I’m doing quite well so I must’ve done something.
I love that you say reversals of fortune because that does happen in our lives. I don’t know of anyone that’s always been up. Everyone’s had a challenge even when we look at the people that are billionaires and have multiple companies and flying jets all over the place and have airplanes, all of those people, no matter who it is, Steve Jobs or Richard Branson, everybody’s had highs and lows. That’s one thing that people want to understand. This wishful thinking, jealousy or, “Yeah but they got this and they have this.” They might be on their high. Don’t think for a minute they haven’t had struggles.
They believe in their own headlines too. A lot of these people, you roll your eyes. “You made $1 trillion in Bitcoin.” There are guys out there like that. I say, “There are zillion courses out there. You got mine and zillion others.” I tell people, “If what’s on their landing page is a guy with a beautiful woman standing in front of a fancy car? Run for the hills because they’re selling you on livestock. I got to be honest. They’re much better marketers than I because they’re selling the dream. I’m not selling the dream. I’m selling a reality. Reality is a tough thing to sell.
It’s funny you say that. I’m going to share it here on this show because everyone knows that I do not sell but I coach on lifestyle, business mastery and I also speak on living a luxury lifestyle but I want to preface this to make sure everybody understands. If you look up the word luxury, it means comfort. It’s not financial comfort necessarily. Living a luxury style, having the luxury of having money in your bank, spending time with your grandkids, that’s what I’m about. I had to preface that for me.
It’s not about living with massive material possession. I looked at my wife as she calls herself a maximalist. I call her a hoarder. There are lots of little stuff that she likes but they all relate to something in our lives. We travel a lot. We’re traveling if we can get out of here. We’re going to Kenya or Safari in January. Hopefully, we can get out of here.
We’ve traveled all over and we buy little tchotchkes from where we are. There’s a zillion of them but you can point at them and you could say, “This is where we went to Barcelona. This was when we went to Ankara and that’s cool. I don’t know about anybody else. I can only drive one car at a time. I might find it dandy but I have yet to figure out a way to drive more than one at a time. The one that’s works well and its fancy, that’s luxury.
It’s in the eye of the beholder. That is what’s important as you’re talking about it. For those that aren’t where they want to be now, you said it’s a slap in the face. It’s important for them to look at expenses. One of the things that I do and I learned this from Sharon Lechter, who co-wrote Rich Dad Poor Dad. Sharon is a dear friend of mine and she said, “Jen, every quarter, print your bank statement. We get them all digitally so we don’t look at them the way we used to. Go through it line-by-line and see what else you could eliminate on a quarterly basis from your world.”
I’m doing it at the end of the year. I’m doing it now and I’m looking at subscriptions that I’m not using. Take it off on auto-renewal and people roll their eyes at that. They’re switching to a cheaper cup of coffee and it’s not going to make you rich. I was like, “That’s true. It isn’t going to make you rich but you will have more money.”
It occurred to me, “Trim the fat so your wallet can be fat.” You got to trim the fat in your expenses so that your wallet can be fat.
There’s the other side because there’s only so far that you can go to whittle down your expense. You’re going to have core expenditures that you’re going to have. You’re going to have rent, mortgage, taxes, or insurance. There’s certain stuff that’s table stakes. We’re trying to go jump through a lot of hoops to lower that.
People say, “I’ll move to a smaller apartment or whatever so I can save a few bucks.” Now, you can get back to the idea of luxury. You’re not going to get a second chance to live your life. We’re not going to get back these two years of COVID besides all the deaths and everything it has done. When I look at it at 62 years old and I say to myself, “I’m not getting these two years back.” That’s It.
There are some luxuries you want to have so pick and choose.Inflation is driven by demand. There's a combination of a constrained supply but also demand. Click To Tweet
You’ve got to balance that but then you’ve got to look at the frivolous stuff and the unnecessary stuff. It’s a little eye-opening for people when they look at how much they eat out, how much money goes to discretionary food and myself included. That’s an area where it’s like, “Could we cut that back maybe 10% or 15%?”
I’m not telling you not to go out with your friends on Friday but maybe you don’t want to order the $25 meal on a Tuesday night because you’re too tired or whatever to go to the fridge and make something or to go to the grocery store. Teeny little mini pivots I call them. They’re not monstrous habitual changes, just being mindful a little bit of a pivot around it and you start adding it up and all of a sudden it’s like, “That’s real money. That’s a car payment.”
Thankfully for me, I don’t eat any fast food. I’ve saved lots of money that way. Where did this all start for you? Why are you compelled to share and help make this impact for other people?
The actual launching point for this was a few years ago. I was at a conference in Bangkok. I was at a mastermind table with a whole bunch of other coaches. We were talking about our Jim Collins’ BHAG, the Big Hairy Audacious Goal. I said, “I want to write a course. I didn’t say I wanted to write a book. I want to build a course that takes people through all of the things that I’ve learned over the last 40 years. Hand them on a silver platter, a roadmap.”
It might work. It might not work but I’ll tell you what, there’s a lot of good stuff in there. Not everything’s going to speak to you but I’m sure that there are some things that are going to speak to you. They were all like half my age. I said, “You’re not getting any younger. You might want to get on. that.”
Did you have an experience in your life like a ceiling that you broke through that made this become the coaching topic that you wanted to explore?
I’ve been coaching entrepreneurs for many years because I’m a serial entrepreneur. I was already coaching people. I was coaching one-on-one with entrepreneurs and some businesses and I still do that. The original impetus for doing this was to do group coaching. Even though I do it in a one-on-one form now, I wanted to evolve to like Kiyosaki, where he does the weekend things for the whole group of people. That is the ultimate.
The problem with the group coaching is, though, I go very deeply into people’s financial affairs. That’s very exposing to them. It’s like a doctor, I say, “If you’re not telling me the truth about what your spending habits are, you’re hiding stuff, you’re not going to be anywhere. I promise I’m not going to disclose it to anybody nor am I going to judge you but it’s garbage in, garbage out. If you only give me part of the story then I’m working with a hand-tied behind my back and so are you. That’s tough to do in a group setting.
It’s tough to do privately too if people aren’t being honest.
I do some mastermind groups. I’m starting a new mastermind group now but we’re niching it down a little bit. It’s not so specific to your balance sheet or banking statement but it’s more about the investment that you make, which is the second act of my book. It’s once you know where you are then we talk about all the myriad ways that you can invest.
How are you going to get maximum return on your money with minimum disruption to your sleep? These people, especially the younger types with Bitcoin. I don’t touch crypto not because of any personal animus but that thing trades 168 hours a week. It happened this weekend where they had a 20% correction while people were sleeping. That’s not for me at this age.
You may be able to do that but there’s no way I can handle that. I take a certain amount of dollars in the fact that the New York stock exchange is open for 32.5 hours a week. That means for the rest of the time, the market is closed and the money might be moving in the background but it’s not moving right to where I’m at. I can’t have my stuff fall apart overnight while I’m sleeping or wake up in the middle of the night.
What then is act three? Once you have determined the options that you’re going to take, is it about scalability?
No. Act three is about a lot of the other things. I have a chapter and I call it Gypsies, Tramps and Thieves after the Cher song. It’s an entire chapter about all the ways that people are trying to steal your money. Everything is under the sun. I have a whole chapter that I call a Debtors in Disco, chapter 17, which is all the stuff you don’t want to talk about, which is the last will and testament, estates and trusts. How do you shelter money? Things like Social Security and all of these things. If you’re 25, you’re probably not thinking about Social Security. You should at least have more than a passing knowledge because they tell you what you’re paying money into it.As a marketer, don’t sell a dream. You have to sell a reality. Click To Tweet
You’re not going to get much from it but you are paying into it and you’re going to pay it into every single paycheck you get for the rest of your life. That’s your money that they have at some point in time, you’re entitled to get that back and it’s going to be quite a bit of money by the time you get to be a 65 or whatever the retirement age is.
These days people are working longer. I’m so curious. You became a real estate agent so tell me how are you playing this into the financial quotient?
There are a couple of things. I’ve done a lot of real estate deals and I build spec houses. I’ve done some good deals and I’ve done some not-so-good deals. I have experience as a buyer and as a seller but what I don’t have experience is as a broker. It’s about deal flow and understanding the market. There is a large measure of psychology in it too because it is the largest financial transaction that the vast majority of people will ever undertake in their life.
It’s very emotional and it’s fraught with a lot of uncertainty. It’s a husband and wife got competing agendas. It’s very interesting. I’m mostly a stock trader, although I’ve traded lots of other things. The nice thing about stocks is they’re highly liquid but they can be tax disadvantaged because their taxation system is based on transactions where you can buy and invest in real estate and you can see tax-free growth out of it. It’s a very illiquid investment. I’m looking at it from a couple of perspectives.
You’re expanding your balance sheet.
I want to be able to write more about it because I write a couple of newsletters and I want to write another book, FQ Two. I like to be able to dive a little bit deeper into it but I’m also looking for a little unpreserved and nooks and crannies. There’s an old saying, “There are riches in niches.” There are underserved avenues of the real estate business where they can be rather lucrative and interesting.
The only way to see that is from the perspective of an insider. Now, I have access to MLS and to all the tools that all the brokers have. I don’t have to go on Zillow where the information where it doesn’t mean anything. I can go right into the horses now and then I can craft things in a way that works for me. There are a lot of opportunities. It wasn’t much to it. I had to do a 60-hour course and I had to pass a test. It did take a few months of investment and it’s worth it. It’ll pay enormous dividends.
I think so too. I’m a real estate investor. I was in the mortgage business for 35 years. I still consider myself to be in it because I coach loan officers. My husband is still a loan officer. We’re like knee-deep into all of that and it makes sense for me to extend that into getting my real estate license now because it’s not in competition with my real estate agent friends. Not because I’m going to sell it, I’m not going to sell any but I want the knowledge behind it.
You make a small investment in the knowledge base and it will pay great rewards.
It’s been fantastic having you on the show. What do you want to leave people with as it relates to FQ? If there is something you could pluck out of that book and say, “This is what you would like the readers to know about how to take the next steps.” Not necessarily go to my website but something that is more psychological and the importance of having FQ in your life.
In one simple, pithy statement, I would say, “Even a bad plan is better than no plan at all.” I hate the way that that sounds but it is true. Remember, you’re never going to get a break from this. You’re going to be in your 80s and 90s and you’re still going to be dealing with money every single day. You’re going to eat, bathe, breathe and deal with money. You’ve had very little, if not zero training, which is a whole other tragedy.
That starts as children. There’s no question about it. The thing is even though you’ll be dealing with it all your life, when you’re on your death bed, you’re not going to be saying, “I wish I had another $300 in my bank account.” You’re going to be saying, “I wish I had spent more time with someone. I wish I had done something more,” and money can help you do that.
Even though you’re next door, the last check you write should be to the undertaker and it should bounce. You’ve got to get there. Whether it be my book, which I give away for free, you go to HenryDaas.com right there on the first page. Even from a mobile device, there’s a link to download my book for free.
It’s 432 pages. It’s a big book. You can skip around and read a couple of different chapters here and there. If you want to skip the chapter on Social Security because you’re 25 years old, feel free to do that. If you want to read about stock trading, read about stock trading. You want to read about Gypsies Tramps and Thieves and all the things you should avoid that you’ve probably done including myself.
I’d go to act three first and learn about all of that again because so many plans have been bamboozled. It’s like, “Let me go there and learn. That happened to me or that’s good to know as I’m thinking about the options that I have.”
Make a commitment to do something about it whether it be my book, my course or anybody else’s. Take some action. Nothing changes unless something changes.
Henry, thank you for taking time with us. Congratulations. I love this FQ.
Thanks for having me, Jen.
Thank you so much for taking time to read. Please make sure that you subscribe to our YouTube channel, just go to @JenDuPlessis where you will see all of these shows in video form. It’s always good to put a name with a face. Give us five stars and then write the review. You got to say something in the review whether it’s something about what you learned with Henry, something that you’d like to read on the show or any other comments that you want to make. We sure appreciate them. We will catch you next time.
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About Henry Daas
I started my first biz in 1991 selling, installing, servicing and financing computers to large corporations. Since then I have founded a succession in firms in the e-commerce, finance, real estate and consumer products spaces.
For much of the past decade, I have taken my experience as an entrepreneur and used it as a platform to coach other business owners and founders. In addition, in 2019, I self-published a 432-page book on everything you need to know about how to grow and manage your money.
I offer a 20-week course where I teach it to you, one-on-one. I also run curated masterminds on business and finance. In my infinite leisure, I write screenplays (for fun), play golf, travel (when not on lockdown), play Settlers of Catan with my three boys, and do other fun stuff…