Making Money Simple: The Complete Guide to Getting Your Financial House in Order and Keeping It That Way Forever with Peter Lazaroff on Episode #0188

Intro [0:00]
EA Interviews Episode 188. Inspiration, transformation, success stories and the Imperfect Action Round seven days a week. Join Mario Fachini for today’s Expert Authority Effect Interview.

Mario Fachini [0:13]
Have you ever wanted to grow your business? I’m sure you have. But what about the personal side of things? Do you want that new car? Do you want that new house? Do you want to go to that event? You know, maybe it’s that new advertising campaign, maybe it’s any and all of the above. And that’s why I’m excited to have Chief Investment Officer, author of Making Money Simple. And we’re going to be talking about how to avoid self sabotage with your finances for your business and your personal life. Getting rid of that lifestyle creep. Okay, getting rid of the business creep that comes in there. Maybe it’s, we need to do this, we need to do that. No, no, no, no, we’re gonna get down to it, and learn how to stay focused on our financial goals both personally and in our business with Peter Lazaroff, right after we thank our sponsor.

Sponsor – Business Book Publishing Course [1:05]
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Mario Fachini [1:21]
Here he is ladies and gentlemen, Mr. Peter Lazaroff. Peter, how are you doing today?

Peter Lazaroff [1:25]
I’m doing great. How about yourself?

Mario Fachini [1:27]
I’m feeling wonderful. And I’m excited to hear what you have to say. Because there’s so many people in Expert Authority World who have business goals that want to achieve the best for their business and their families. And I want to know your thoughts on it because I saw something about that lifestyle creep. And you know, the business creep and would you say there’s a lot of things to distract us from staying on track?

Peter Lazaroff [1:51]
Absolutely. It’s kind of this sneaky financial phenomenon that derails all these wonderful business plans, derails all these wonderful personal financial planning plans. And lifestyle creep, it happens in such a way that we don’t notice, it’s kind of like if you put your hand into a bowl of water, and you start to heat it up. Eventually, that water is gonna get so hot that it hurts, it burns you. But you don’t notice it’s incremental. Now, when you take your hand out of that warm water and dunk it into a bowl of ice water, you notice that, what that is like is trying to stomp out lifestyle creep after years or decades of it happening. And so what’s really important is to identify what these areas of lifestyle creep are in the early stages, so that you’re not dunking your nice warm hand into some ice water later.

Mario Fachini [2:40]
What are some areas that across the board, you can identify is lifestyle creep, and how do we prevent them?

Peter Lazaroff [2:47]
Well, so, keep in mind that most of your income gains are going to come in your 30s and 40s and then you peak out in your 50s. That’s just what the research shows whether it’s from the Federal Reserve or the Department of Labor. And it starts out with little things that candidly aren’t that big of a deal. Maybe it’s a slightly nicer bottle of wine or better seats in an event, whether it’s a sporting event, or a theater event, or perhaps it’s an upgrade in your hotel room, or just a slightly nicer birthday gift for your loved one. All these things individually, may not be that big a deal, particularly if you are earning more income over time. It’s really the collective of all of them that you don’t notice that you’re doing it, particularly if you’ve been a good saver. And the most common outcome that I see is someone gets near retirement, and maybe they have been a good saver, and they’ve had some lifestyle creep, and they realize they’re living differently now than they were 5, 10, 20, 30 years ago. But they are dramatically under estimating their expenses. If you’re a business owner, and you push expenses through the business, which is pretty common, it does make it hard to identify what do I need to live on after I’ve sold the business? Or had part of the succession plan kick in?

Mario Fachini [3:58]
Why? Where do you think it stems from? Because when you were saying the nicer hotel rooms and the nicer food and nicer things, I remember some of the first things I did when I started making more years ago. And it’s like, you know, there’s that delayed gratification. And I believe everyone should do it starting off. Because you’re not going to win in all areas. And it’s like if you really believe in what you’re doing, you know, there will be a turning point. If not, well, yeah, you’re just cutting out a lot of stuff in your life, but you start going for those nicer things and building up and building up. Do you think it essentially forms a habit? Or is there a deeper driver? You know, it kind of sounds like keeping up with the Jones’ personally and keeping up with I don’t know, I’ll just say the newest shiny object for business.

Peter Lazaroff [4:46]
Well, here’s a good example with myself is I used to wait to upgrade my cell phone until the point at which my current cell phone basically didn’t work. Nowadays, if I want a new cell phone every three years or even every two years I go ahead and do it, because you know what? I feel like it. And I feel like I’ve gotten to a place financially where I can afford to do that. But I recognize that that’s a change in my habits in that sense. But really one of the important and also, let me also put in there that I don’t think you should deprive yourself. That’s not really what I’m getting at, I think it’s just being more aware that as humans, it’s our human nature to be quite adaptable. And the novelty of different items tends to wear off pretty quickly. So my new iPhone with its great camera, and it’s faster processing speed, one month, two months later, I don’t really notice it. And it kind of goes back to what I lead with, with the hand example in a bowl of lukewarm water, if you keep heating it up, you don’t notice the incremental changes, it’s the big changes that we notice. So I would say there is some sort of inherent human nature involved here. And that’s what’s always so challenging with money is basically everything about our DNA and genetic makeup, has us making poor money decisions. And a lot of that’s very deep rooted in the way that we evolved as a species. But even when you look at more recent research, where they say, do the brain scan, and they can identify that we think of saving for our future selves, as the same way that we think of giving money away to a complete stranger. So if we know that, we have to make the right decision by doing something that feels like giving money away to a complete stranger, how can you make that disconnect go away? With lifestyle creep, you know, it’s gonna happen. And again, I don’t think you should deprive yourself, I think it’s just being aware that it’s happening. And as you increase your spending in small categories, or you take advantage of some lifestyle luxuries, because you’ve earned it, what’s really important is that you also have a way to systematically increase what you’re saving to help offset some of that, because by saving more, one, you’re going to be better prepared at the time that you want to be financially independent. So that’s kind of the obvious piece, the perhaps less obvious piece, if you’re saving more, you can’t spend more. So it’s a way to sort of prevent yourself, acknowledges that you can’t take the human nature out of humans. So how can we acknowledge those human flaws that I’ll call them, and work around them in a way that isn’t so painful and is easier to stick with, then perhaps, having to fill out a budget every single day?

Mario Fachini [7:22]
You are just dropping all kinds of wisdom here. And there’s two things that I wanted to ask you about. And there’s like three more that I picked up on. One, how come humans are just don’t like doing it? Two, how do you break the disconnect of the saving for yourself and having the disconnect of someone else. And I can attest to the saving more and putting it away, because there was one year I got my taxes back and there was like, there’s over $8,000 of stuff I didn’t notice. And I was like, “Huh, that was kind of like a huh?” I mean, it’s not a ton of money. But it’s not 20 bucks, either. And, you know, when you do start saving more, and it’s more fun, because what I’ve been doing, what I started doing, and I’m still doing thankfully, paying for stuff in advance, like a month in advance, a quarter in advance, a year in advance, you know, you get less notifications, and you get a better deal. So when you were talking about the lifestyle creep and all this I also wanted to ask about, is there a percentage that you feel you can also save across the board? You know, from doing it ahead of schedule instead of after the fact?

Peter Lazaroff [8:45]
Well, I’ll answer that question first. There is not a one size fits all answer here. And I think in general, the best thing you can do, if you have no plan, as of right now is set an arbitrary number like 10% of income and go ahead and set that aside. But also plan to increase that by a percentage point every year so that you’re going to 11%, then 12%. You may be stopped at a point, there’ll be a natural barrier resistance based on your lifestyle that you’re unwilling to make a few increases… additional increases to that saving percentage, like you might reach 20% and say, “Look, there’s no way I can save more income. There’s all these things I want to do.” And that’s okay. The whole point of financial success, it’s not really magic. It’s just simple engineering, and there is no perfect answer. So I would, you know, anytime you’re discouraged, know that there’s a workaround and that nobody’s perfect with this. Which kind of goes back to your other, you know, the first point you’ve made is, you know, we, as humans tend to make all these poor decisions with money and we have these wrong instincts. And I think the best way you fight those is you automate, you try to automate as much as humanly possible. Remove all ability for yourself to make the decision and automation we all think of as technology. But if you look up the definition of automation, hiring a human to do that work for you also falls under the camp of automation as well. And so any sort of line coaching of any kind always improves outcomes, whether it’s health coach with your eating, or fitness coach with your professional, excuse me, your physical health, your professional coach, you can get a financial coach, which everyone knows, as a financial advisor, you know. These are all ways that you can improve your outcomes. And when you think of automation, yes, technology is essential. And it’s never been easier to automate your finances on the technology front. I know personally, the system that I talked about, in my book, Making Money Simple, the system that I talked about, on the podcast, Making Money Simple, on my blog, you know, everywhere talks about automation, and originally, it was hard for me to put that system in place, because you couldn’t automate as much as you can today. But really, automation is your best friend. It prevents you from getting lazy, it prevents you from deciding you don’t feel like making these changes, or sticking to a plan. That’s really the best way, in my opinion, to get around our human nature.

Mario Fachini [11:08]
And I’m glad you brought that up about the person because there’s also that accountability. And when you’re paying someone and investing, because, not an expense, it’s an investment. You’re also more accountable to yourself and what you pay for you pay attention to.

Peter Lazaroff [11:25]
I know that’s true for me. Anytime I’ve had a gym membership, I use the gym.

Mario Fachini [11:30]
Absolutely.

Peter Lazaroff [11:31]
I know when I wrote my book, I tried to write a book on my own. And it wasn’t until I hired a project manager and all this person did was send me text messages and emails, and I was paying them about $500 a month to bully me into writing. And if I’m going to pay that much to have somebody sending me texts telling me to go right, you can eventually do it. So I think, anytime you’re hiring, and I’m obviously biased, I am a financial advisor, I’m an owner of the financial advisory firm, I obviously am biased and thinking that that’s a great investment. However, I also have a financial advisor, I’ve hired a financial advisor, despite my own knowledge, just knowing that it’s a good, like you said, a good investment in myself to get all those nudges to have an unbiased party there. And your outcomes undoubtedly are better since making that decision than when I was just doing it myself.

Mario Fachini [12:19]
Well, I’m glad you’re sharing that with us. Because there’s a lot of people who… I love investing in stuff that’s going to, one, get an ROI and two, make me a better person. You know, because wisdom is that the only real asset we have. I mean, the building the house, the cars, all that stuff can burn down, blow up whatever the case may be, or get washed away. But when all the stuff you invest in, in your brain, as long as that thing is still working, you’re good. And if it’s not, well, it’s not really a problem anymore.

Peter Lazaroff [12:53]
Yeah, I’m with you on that one.

Mario Fachini [12:55]
What, other investments can you make financially? Well, what else would you say is a good investment? Whether it’s for yourself, your business in the financial arena?

Peter Lazaroff [13:09]
Well, that’s a great question. If we’re going to narrow it to the financial arena, you I think any sort of prioritizing your retirement is always the number one goal in my mind. And I don’t think retirement for people saving today looks the same as retirement even 20 years ago, you know, it’s not just a big 30 year vacation. It’s really this financial independence, where you have the ability to walk away if you want to, or work less, if you want to. Largely do whatever you want. That’s what financial independence is. And I do think that it will become more normal for people to work until they’re 70, as opposed to 60 or 65. And so no matter what, if you can invest in accounts that give you some sort of tax break that are designed for retirement, whether that’s a 401k, or IRAs or HSAs, or if you have a business and you can do a cash balance plan, you know, that’s typically someone who has a lot of excess cash and needs to put away tax deferred dollars, you know, those are tools that really can enhance your well being over the long term. When I think of investing in myself beyond finances, and just being a good saver, a comment you made earlier that I think resonates is continual learning is extremely important. I don’t know anybody who is good at their craft or their profession who doesn’t continually learn. And we also know there’s a lot of research that shows that continually learning stimulates the brain and helps prevent cognitive decline, which is morbid as it sounds, it’s something we’re all going to have to deal with at some point in time. And so I think exercising, eating healthy and learning, those are all things to show that have shown to really increase your brain health and increase those neural connections and strengthen them and prevent that cognitive decline that so many people unfortunately have to deal with.

Mario Fachini [14:58]
I’m glad you brought that up and after I said it, I didn’t want to interrupt you. But I was like, why did I say financial because there’s a lot of stuff outside of that. That’s also good for business and personal. And, like you’re saying, as we age, there’s things to consider, and not just preventing them now as much as humanly possible, but also being prepared for it in the future. And I was actually going to ask you, do you think, when you’re talking about the retirement, do you really think that retirement is an age? Or… because I’ve heard people say, “Well, I want to retire at 35, 40, 45, 50”? Fifty five seems to be like the new from people I hear, maybe not so much in business. But like, if I can get out by 55, that would be like, you know, you get five, seven more years. And you’re saying most people are going to work till they’re 70? Is that because they have to or because they want to?

Peter Lazaroff [15:52]
I think if we’re talking about the United States in aggregate, that’s because they have to.

Mario Fachini [15:57]
Okay.

Peter Lazaroff [15:58]
Successful business owners, I think if you’re working till 70, it’s because you want to, and the word retirement is something that everybody understands. But in reality, I think the thing that people are shooting for today is financial independence. It’s two words, it’s longer. Not everybody necessarily knows what it means. So we always just default to the word retirement. But to me, when somebody comes to me, and they’re 55, and they want to retire when they’re 55, or 50, I think to myself, “Yeah, right.” Like this successful person’s not going to do any work starting at age 50 or 55. And it’s just not a real thing. And people who are driven and successful and are able to achieve that type of goal, don’t want a 40 year vacation on the beach, that’s not what they’re looking for. They’re looking for the freedom to do what they want when they want. And so in that sense, I think you see a pretty broad spectrum. But when you remember that the vast majority of the population lives off of social security for retirement, you know, yes, I do think that a lot of people to be working till 70 and beyond, out of necessity. But also, I do think there gonna be a lot of people who just failed to save early and often enough, and they’ll still have a nice lifestyle. And hopefully, we know more about health, in terms of taking care of ourselves that our 70s should be better than people living in their 70s 20 years ago. And we know that smoking is bad for you, we know that exercise is important. There’s a lot of real low hanging fruit out there for us to make better use of our time here.

Mario Fachini [17:26]
Excellent. Well, I’m so glad you’re sharing all of that, because it does resonate. And it’s things to think about, you know, when you’re in your 20s, 30s, 40s, 50s, it’s like, “Hey, you can be hard charging and do all these things.” But what are you going to do 20, 30 years from now? And when you were talking about just sitting around, it’s like, I am nowhere near 70. And I can tell you that even around Christmas or New Year’s or whatever, and it’s just like, okay, is there’s, you know, like some charitable thing I can be doing or it’s just like sitting around literally doing nothing. Yeah, there. I like to be productive. Yeah. I mean, don’t get me wrong, I like relaxing and doing stuff with family and friends. But you know, I’ll just leave it at that. You should have purpose and passion, even if it’s not work necessarily. There’s a lot you can be doing to make the world a better place with your time, talents and abilities. So as far as your clients go, obviously, you know, you’re a rock star with this. But what’s the main thing that you’re really helping them with? What would you say is, if you were to take 80, 20 of your clients, what are they mainly coming to you for?

Peter Lazaroff [18:37]
Well, let me give you a little bit of background. So I serve as the Chief Investment Officer at Plan Corp, and we work with people across 44 states, we manage a little over $4 billion. And I always tell people that a good financial advisor, you know, can change your life, it could really make a big difference. But a bad financial adviser can also change your life in a bad way. And I think the big way that we differentiate is with tax planning. So I and we are really big believers that, you know, you should pay your fair share of taxes, you should pay your IRS bill to what you owe, but you don’t need to leave them a tip. And so for about 80% of our clients, I am most proud of the tax planning work we do. And we manage portfolios, the way that most people think a financial advisor should, but a lot of people leave money on the table, particularly those kind of in their peak earning years and in the years just leading up to retirement. And right now there are a handful of legislation. They’re in place that are going to sunset after a couple of years. Anytime a new law is passed, there’s always some new little tax loophole to play with. And so, you know, I think the way that we’re really helping people is minimize the taxes that they’re paying, and make the entire financial picture work together. So when you get your financial house in order, in order to keep it that way forever, it’s not just a portfolio. It’s not just a tax return. It’s not just a single insurance policy, it’s everything. And so try to interconnect those, I think that’s what makes us special and 80% of our clients who come to us, I would say, they’re delegators. And they recognize the value of creating time for themselves. And they also are generally pretty good about understanding that they don’t know what they don’t know. And again, that’s why you hire professionals, why you go to a doctor, it’s why you’d hire an attorney to argue a case for you in court, it’s just, again, I come off as biased saying this, because it’s my profession. But I also, again, I eat my own cooking in the sense that I also have an advisor, the advisor being there for.

Mario Fachini [20:44]
That is excellent. And it’s interesting what you’re saying about that. And I’m glad you did, because it’s not a single one time thing, like you set it up, and it’s good for 50 years, because you said it, the tax laws change. So even if you’re as protected and best case scenario, right now, next year it’s going to be different. The year after that, it’s going to be different. And would you say that’s why it’s good to have someone that knows what they’re doing and is constantly in it, who can stay up with it?

Peter Lazaroff [21:14]
Absolutely. And you can do a lot of this stuff yourself. It’s not rocket science. But it is a full time job. So it’s not you read the paper every so often, you have to read the tax law, which I’m fairly certain not that many people do for fun. The people here who are CPAs and are tax experts, they really enjoy that stuff. So give it to someone who’s enjoying it and getting deep in it and can give you proactive advice. It’s one less thing you have to worry about. And, you know, here I’m focused on the tax side, my role is primarily tied to investment strategy. And I think one of the things that people struggle with there is they see somebody smart on TV make an eloquent argument for one specific point of view that takes one specific set of inputs and data points. And they think suddenly they understand the world. Similarly, you read the Wall Street Journal once and suddenly you think you have special information that the rest of the world doesn’t know. But the more that I study markets, the more research that we do on a regular basis, the more I realized, “Gosh, there’s so much to learn.” And so giving it to someone who has their finger on the pulse of the market, as well as the latest academic research that really can lead to a lot better outcomes.

Mario Fachini [22:26]
Excellent. Well, I appreciate you for sharing those expert authority insights. I want to ask you about the biggest transformation you’ve been able to give someone. You don’t need to use names or specifics. Well, I’d like some specifics in like ROI, percentages, dollar amounts, but you don’t need to name names, who’s been one of your biggest success stories that came to you and you just were able to do a 180 in the good direction for them?

Peter Lazaroff [22:54]
Well, actually, so I’m gonna talk about somebody who came to us about six months ago, and a couple in their 40s. Wife is attorney, husband was corporate executive, I guess for lack of a better word, and he’s paid in… He had equity compensation to a non qualified stock options, and he had some in ESPPs, employee stock purchase plan. And what’s really interesting about this couple as they’re entering peak earning years, they have two kids, one of whom I think is in high school, and the other one is junior high. And they were doing everything right, they had never had an advisor. But they were maxing out all their retirement accounts. They were really good savers, they had a great grasp on how much they were spending. So we let off talking about lifestyle creep, they probably had lifestyle creep, but they knew to the dollar what it was. However, you know, when we were speaking to them, they realized they were getting busy, and they needed to outsource, you know, they felt like maybe there’s something we can be doing more and then having these conversations, they kept bringing up and making these somewhat self deprecating jokes about how they used to travel more before the kids and I can’t wait to when the topic of college would come up. They say, “Well, once they go to college, we can finally travel again.” And eventually we asked, “Why don’t you travel with the kids?” And it was always felt like they couldn’t afford it because they were such rigid savers and they thought about their careers. And you I think the success here ultimately for them was they knew what they’re supposed to do. They knew they’re supposed to go be professionally successful and save a lot of that money, and then things would work out. But there wasn’t a lot of intentionality behind it. And so as we built out a financial plan for them, and gave them some real projections on where they were headed, one, that allowed us to find some more unique tax opportunities. And again, they were doing really well on that front to begin with. Two, it suddenly made them realize, “Oh my gosh, we’re gonna have way more money than we need. We need to live life a little bit.” You know, “We need to travel. We can afford to take the two kids on these lavish overseas trips.” And when I say lavish, I mean just going to what feels like exotic places, but they felt like if we had to take four people instead of two, that just wouldn’t work out. And you know, what was the most rewarding phone call, and I remember the comment being made to them somewhat casually, because they kept joking about it and bring it up. They called when they’re on their way to the airport, they’re headed to Asia, they’re going to hop around a couple different countries with their two kids. And they had done a lot of travel in the States with the kids, they ski, they do the beach, but they were so excited. And they called to say thank you. And to me, that represented a type of success. That, you know, is really fulfilling, because I know that the earlier we reach somebody in their life, the bigger the changes we can make in terms of you let compounding work for multiple decades, if we make some changes at the margin, those changes are going to be massive, after 20, 30, 40 years. But here’s somebody who’s doing everything right and having a lot of success, yet still wasn’t getting the most out of their money that they wanted. And I think I referenced in my book a lot of the happiness researches has it pertains to money. And this is one of those wins to me that allowed these people to turn around their view of their finances, which I think they knew were strong, but they were borderline paranoid that they weren’t as strong as they couldn’t be, as they could be. And they looked around their peer group thinking, “Well, we have to do this, that and the other in order to live this life that will make us successful.” But then really opening their eyes to the things that they were saying themselves that they wanted. They just didn’t have the confidence there to really grab it.

Mario Fachini [26:28]
Yeah, and you said something in there. And it’s interesting, what a role confidence does play, because when you just casually said we’re gonna have more money than we need, we can travel. I mean, clearly, they were doing good, but they didn’t think they were. And I’ve seen that in my own clients, and in myself also where it’s like, “What is wrong with you? You clearly did a 180 the last five or 10 years? What the problem is right now?” And there is none, it’s in your head.

Peter Lazaroff [27:01]
Yeah, and I think what’s really challenging for people who are successful is when you have an objective third party that can sit there and say, “Look, you objectively, are doing great.” And if I project these things that you’re doing today, out into the future, this is what it looks like. And I think it’s just that projection into the future, when you’re kind of building out a financial plan that tends to catch people off guard, because our brains don’t think exponentially, they think linearly. And compound interest is an exponential. And when you put that in place, and you’re plugging in all these inputs, a lot of people are just adding and subtracting annual contributions or annual expenditures in their head thinking, is this going to be enough? And it’s really when you go through the planning process, and you build in all sorts of conservatism, where you can take deep breaths and say, “Oh, my gosh, yes, it is.” Of course, you can also go through that exercise and realize you don’t have what you think you did. And there are turnaround stories that could have shared there. And I think those are perhaps the more obvious ones. But to me, it’s really those ones who are finding, the people who are finding ways to make the most of the hard earned wealth that they’ve obtained over the years, those are really rewarding.

Mario Fachini [28:08]
Well, I appreciate you for sharing that with us. Because I’m glad you use that one too. Because I’m sure you have dozens and dozens if not hundreds, but I love hearing the ones where it’s like, “Hey, you’re bringing the families closer together.” Or you know, you just gave them five or 10 years back or “Hey, maybe just how about this? Every single day is more enjoyable and you’re not stressed about it. You have that confidence.” I mean, that’s a huge win, regardless of the dollar amount.

Peter Lazaroff [28:35]
Yeah, it’s priceless, priceless feeling right there.

Mario Fachini [28:38]
All right. So I have one more fun thing before we thank our sponsor, and it is the Wheel Of Whatever. I love this thing, because it always gives the right question that wasn’t enough of spin. Here we go. It always lands right where I need it to. What’s that?

Peter Lazaroff [28:54]
I need a big powerful spin there. I like that it’s really going down.

Mario Fachini [28:57]
Well, almost fell. It always ends where it needs to right on the right question, right at the right time. And here’s today’s. So I want to ask you, with all your knowledge of taxes and all the people you’ve been able to help, you created this one, by the way. You created this one about eight minutes ago. What do you think the US could do better with taxes for businesses to stimulate the economy, but also reward the business owners? Do you think we should keep doing a whatever it’s called the graduated tax, or should there be a flat tax nationwide?

Peter Lazaroff [29:33]
Well, I think one thing, let me put a little context here is that…

Mario Fachini [29:37]
Sure.

Peter Lazaroff [29:37]
We often say we, I’m going to say the collective nation often go back and forth over taxes, being at some perfect level. I don’t think there is a perfect level. And I think when you look at long term history, our rates are actually quite low. Now I’m saying that with no sort of trying to take sides of an argument of should they be higher or lower. Just Let’s all remember that they are actually historically low. I think simplicity would be the best option for tax policy. And I think that our biggest issues are not necessarily the graduated tax or flat simple tax, or the level of which we’re paying tax. I honestly think the biggest issue we have is that we have not addressed the retirement crisis in our country, something as simple as Social Security by rate, you know, it’s a problem, that’s very fixable. But the longer we wait, the more painful it’s going to be. So we have lifestyle creep of Social Security, if you just increase the retirement age, if you increase the amount of wages in which people had to be paying taxes on or you do some means testing, when you actually do the benefits, the whole system looks a lot different. And that’s kind of one of the bigger pieces of why we have, I mean, taxes cover a lot of stuff. But I think when people are thinking, how do we pay for something like Social Security, that alone does… not that much to the tax policy side, but also takes a lot of the pressure off of the need for that sort of fiscal cash raising. I also will say I did write my, one of my senior economic theses on sales tax. A national sales tax is actually quite attractive unless the government treats it like a piggy bank. And I do know that overseas, there’s the VAT, and those governments do treat it like a piggy bank. So I like that concept, but not if we’re going to abuse it.

Mario Fachini [31:29]
Well, I appreciate the honesty and fair answer. And when you were talking about all this stuff, you were earlier I was like, “Oh, I know what I’m going to ask him.” So thank you for that. And it wasn’t to get it politicized or anything I just legit wanted to know cause it seems like no matter if you have a business or don’t or whatever, the second you start paying taxes, everyone, it’s on everyone’s mind.

Peter Lazaroff [31:50]
No one likes paying taxes. But you know, that’s the whole point. Let’s, let’s pay our fair share.

Mario Fachini [31:56]
I like when you said, “But don’t tip them.”

Peter Lazaroff [31:58]
Yeah, don’t leave that IRS a tip. You just pay your bill, be done after that. Yep.

Mario Fachini [32:03]
All right. Well, this has been great. We’re gonna thank our sponsor, and come back for the Imperfect Action Round.

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Mario Fachini [33:39]
And we are back with the Imperfect Action Round. Peter, are you ready to take Imperfect Action?

Peter Lazaroff [33:45]
Let’s do it. Mario.

Mario Fachini [33:46]
First question, what is the fastest path to the profits?

Peter Lazaroff [33:51]
I think it’s automation. I think automation works around all those human tendencies that make having good financial decisions happen. A lot of times they don’t. You automate something, whether it’s via technology, or you outsource somebody else to take care of it for you. That’s undoubtedly going to be the best way and fastest way to achieve results.

Mario Fachini [34:12]
Excellent. Number two, what is the biggest problem you see your prospects making and the fastest way for them to fix it?

Peter Lazaroff [34:20]
Broadly speaking, it’s overconfidence. Whether it’s overconfidence in their knowledge, overconfidence in their personal capability to earn or to live or to work. It’s a lot of not knowing what you don’t know. And that’s a really dangerous thing. And so I think the best way to fix that, it’s not easy, but it’s just trying to learn and have multiple perspectives. Again, coaching, whether it’s on the financial, and you asked about my prospects, so we’re acting as the behavioral coach, as a financial coach to financial life advocate. But regardless of what part of your life, we as a species evolved due to overconfidence, the caveman who went out and attacked the giant beast, that group of people live. They were confident they could do it. The people who are coward behind did not evolve. And so we’re an overconfident bunch. I think it’s recognizing that and trying to get help to uncover those blind spots that you have.

Mario Fachini [35:16]
So if you read the Wall Street Journal, don’t go saying you’re a financial advisor the next day and have a course on it?

Peter Lazaroff [35:23]
Yes, I would say you would not believe the level of competition in markets, we could have spent hours talking about that alone. But when you remember that there are millions of market participants, many and many of whom are very highly incentivized, and have custom mobile apps to track data on people and use satellite imagery. And they have so much information, the competitor on the other side of every trade you make, you got to be, remember that there is someone on the other side of every trade you make, and chances are they have a lot more information than you do.

Mario Fachini [35:58]
I would love to dive into that. I’m trying to stay focused for this last little bit here.

Peter Lazaroff [36:02]
Yeah. We’ll do this next time. Yeah,

Mario Fachini [36:03]
That is fascinating. Customer lifetime value. That’s it. What is the best way to maximize customer lifetime value?

Peter Lazaroff [36:12]
I’m a big believer, regardless of the business, that you should be able to do at least two of three things, hopefully all them. One is to make life simpler. One is to solve a problem. And one is to help them make more money. So I think if you can solve a problem, make life simpler, help someone make more money. That is really the ultimate thing that you could deliver to your customer. And I think that’s true for just about anybody with any business, whether you’re selling shoes, financial advice, or fitness. Those are all accomplishable things.

Mario Fachini [36:45]
That sounds like a win win win.

Peter Lazaroff [36:48]
Oh, no doubt. I mean, any good relationship, whether you’re selling a product or service ought to be a win win. And in reality, not all things are that way. But I think those are all… if you can accomplish two of those three things. And I think anybody that I sit down with, I try, I think we have the ability to do all three here. But I want to at least do two things. But I’ve never met someone who doesn’t have a problem. I’ve never met someone who can’t help make life a little simpler for and most people you’d like to think we’re putting in a position to help them make more money, or at least grow their net worth more optimally.

Mario Fachini [37:23]
Excellent. What are some books you could recommend that have made a difference in your life?

Peter Lazaroff [37:29]
Okay, so on the investment side, and because my specialty is investments, the classics, like Winning The Loser’s Game by Charles Ellis or Random Walk Down Wall Street by Burton Malkiel. With The Little Book of Common Sense Investing by Jack Bogle, those are all kind of classic investment things that have made a big difference. I think Atomic Habits is a more recent book that I give out to more people, by James Clear, I think that’s wildly useful, regardless of your profession. But those are the things that immediately come to mind before we go really deep into the geeky stuff on the investment side.

Mario Fachini [38:07]
All right, excellent. Well, I appreciate you for sharing. I’ve gotten a lot out of this and know Expert Authority World has. Where can they learn more?

Peter Lazaroff [38:16]
So you can go to my website, PeterLazaroff.com and then basically every social media platform, I’m @PeterLazaroff, the real trick is spelling Lazaroff. But if you put into Google, Google’s pretty smart, they know who you’re looking for. So you can check out my podcast Making Money Simple, or the book Making Money Simple. I try to put everything though in the end on my website.

Mario Fachini [38:39]
Excellent. And I’ll make sure it’s on your show notes page on EAInterviews.com as well with all the links to all that. So it is simple for everyone. All right. Well, thank you again, Peter. It’s been great. And it’s been a pleasure having you.

Peter Lazaroff [38:55]
Mario, thanks for having me, love to do this again.

Mario Fachini [38:58]
All right, Expert Authority World. We have another great episode today. I’ll see you tomorrow. Have a great day and God bless.

Sponsor – Business Book Publishing Course [39:04]
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www.EAInterviews.com [39:38]
Hey, thanks for listening to today’s episode. I hope you got a lot out of it. I know I sure did. If you haven’t done so already, I invite you to subscribe to the show. And also be sure to check out EAInterviews.com for complete show notes, the full interview video experience, links to the resources we mentioned, and more. Have a blessed day and I’ll see you tomorrow.