Money: I wouldn't start from here with Chris Budd

So grab a coffee , sit back and let's get ready to blast off . I'm your host , françois D'Etouille . So just for those of you that maybe don't know a little bit about Chris obviously there's more details down below Chris has recently written another book on financial well-being called the Four Cornerstones of Financial Well-Being .

So it's a fantastic book , and before that he's also written another book on financial well-being . So financial well-being is really something that's very close to Chris's heart , and he's also the founder of the Institute for Financial Well-Being over in the UK , so they're doing a lot of work in that space .

So with that as a background , chris , let's sort of kick this conversation off , and I probably want to sort of start off with . You know , if we start thinking about , I mean , the whole premise around this episode's title is around money . I won't start from here . Just tell us a little bit about the phrase .

I won't start from here , because there is a bit of a reason why we use that .

I always thought it was a lovely expression . It's really applicable about money , because so one of the simple ways of looking at this is I reckon that there are three simple steps to achieving a great relationship with money , a great financial plan . Very simple three steps . Firstly , you start with step two , and step two is to ask what will make me happy .

Step three is the , and the answer to that , by the way , is internal self-worth , intrinsic motivations , having meaning and purpose in life , that kind of stuff , not having stuff to impress other people . The research shows that if you are somebody that sees money as an objective , it's a very good chance you will be less happy than you would otherwise be .

So if step two is what internal self-worth will give me happiness , how do I get internal self-worth , which is step three , which is what will apply to you ? How will you find meaning and purpose in your life . It doesn't mean we've all got to become saints and do nothing but be meaningful and purposeful .

It just means having a bit of something in your life that is meaningful and purposeful Probably involves helping somebody else . There's a wonderful line from Archbishop Desmond Tutu in the fantastic book called the Book of Joy , which is that joy is your reward for the giving of joy , which is the most wonderful expression . So step two internal self-worth .

Step three from kindness , from meaning and purpose . Now we can go back to step one , which says how do we create a financial plan ? So the trouble is that we usually start with financial security as our first point and then we get to money and we create financial security and go right now , what do I do ?

I'm working with a guy as a financial coach who's got £9 million in his current account and he sold his business , and he says that he is bereft because nobody's ever asked him . What will make you happy when you get financial security ? Then what will you do ?

So , as financial planners , what we should be doing is we should be talking to people about step two and step three before we start with step one . So that's what I mean by I wouldn't start from here .

And and is that I mean what they have done or the way that we've sort of structured this for ourselves or to find it for ourselves Is that what's leading to us thinking that step one is figure out the money first ? Do you think that that that is the reason for that and , if so , why ? You know , how has that impacted our whole world ?

Because all of us sort of go to step one , as you rightly said .

I know financial psychology is really big in South Africa at the moment and I know some of the stuff like behavioral finance framing . Framing bias when somebody comes to see a financial advisor they expect to be advised on their finances Makes sense , right , that's the framing .

You might even look around your office and say , well , what's the meeting room look like if you're still having face to face meetings ? Or what does the entrance lobby look like ? Do we have money magazines on the table and the lobby for people to read ? Are you accentuating this framing that a financial plan is about money ?

What could you do to change that narrative so that actually this is a place where we don't have to be like this , because outside of your , of your office , everything is telling people that success is money , money is success .

Most people that I've asked over the years might ask the question you know who'd you look up to , who'd you admire , who do you think is successful will have some sort of financial element to that . I think that's a very common answer .

Very few people will say most successful person I know is Dave down the road who works in Tesco's and it really enjoys his job in the supermarket trolley boy and he loves it . Not many people will call him successful , but actually he's happy and so he is . So we are , we're consumers . We are monetized all the time .

We need to get out of that habit and the client that comes to see the financial planner will be in that mindset . And I would just challenge and ask is your environment and what you're talking about , your question set ? Is that accentuating that or is it getting the client to move off of that and think about what will actually make me happy ?

Get them to that . Step two first .

Because this is interesting thing that Martin Beck actually wrote about and she said you know , doesn't matter where you are , where you are , how old you are , young , you are , successful you are , how unsuccessful you are , how rich you are , how poor you are , how healthy or how sort of ill you are , everybody's looking for the same four things , and those four

things are peace , love , joy and freedom . So at the end of the day , that's what we all aspire to . According to her , as a matter where you are , you can link it to one of those , those four things . So I'm quite keen to know you , how do we have these conversations with clients and how would that change the way that we give advice ?

Because often , you know , many of us start off as the client walking the door . They are looking for I have a problem with my retirement , you know , fund , or I have a problem with my risk plan , or I have this or that .

I want to last will and testament that they have a very specific product related thing in mind when they walk in the door for the first time .

So how do we approach that conversation then differently , if that line has this point say , burning need , but it might be a burning need and we want to really get to the other side of it , or what are the kind of things that I think that we'll ask you this way ?

What are the kind of things that needs to be in place before I can have this kind of conversation , or can I just jump in the , with the , with the door and , you know , just immediately start having these conversations ?

To swear slightly , I call bullshit , because it's all very well to say these things and to write them on LinkedIn , but what we then go and actually do with our lives we're not going to do our jobs , to go and work at the local nature reserves . No , we aren't .

We're carrying on doing our jobs in order to get financial security , because that's what our society tells us to do . How many advisors and planners are actually making taking the investment portfolio out of the conversation and just talking about what makes you happy ? It's not actually happening . We don't want to do it . We all know it .

We all know it inside , instinctively . We know what makes us happy . It doesn't need money . And yet you try telling somebody who's got some money coming their way not to take it , and I'll give you a great example . Here is a challenge for everybody advice us . I'd love to know little survey or if you can do this in practice , francois .

But I know a guy who sold his business . He's got a lot of money in his pocket for as much money fact several times more than he will need to do all the things he wants in his life . Okay , so he's got financial security big time . He's got a great amount of three years .

At the end of that three years , if he helps a company achieve its growth targets , you'll get a further 3 million pounds . Now he's not happy . He's not enjoying his job . His accountant and his solicitor have said to him under no circumstances must he give up his job because he won't get the three million . I've said to him you don't need the three million .

So why are you working ? And he's gone whoa , give up three million . And I said , yeah , if you don't need it to do the things you want to do , he is not giving up the three million , he's continuing with his job . So what would you advise that client ? Would you advise them to do something different and lose three million quid ?

So I just call bullshit a little bit that we talk all this stuff , but are we actually putting it into practice ? So sorry , I went on to the first bit of that and I forgot what your actual question was . It was how can people actually do this in practice in the meeting , wasn't it with the client ?

There can be a tendency , when you've learned some new stuff , to try it out on somebody and see what happens , but that can scare them off if they're only that framing thing , if they've only ever come to you to talk about money , and then the first week that the next week they go .

So tell me what you want , your future , what makes you happy , whoa , I need to bring them along with you slowly and there's a number of ways you can do that . Very , very simple . What's your meeting called ?

I work with one company in the UK and wrote some articles for their , their bulletin , and they sent this out , this newsletter , and they sent me a copy of it and it was a financial wellbeing special and I'd written several articles and I looked at the front page I realized it was called the quarterly investment review . So what are you calling ?

Is it your planning meeting or is it a review meeting ? When you confirm your meeting with somebody and you say , look forward to seeing on Wednesday at 10 o'clock , why not add , I'd really love to hear about your plans for the future ? I wonder if you can give it some thought in advance . Now they're coming ready for the conversation .

In coaching terms we call this contracting . What I do when I do training on coaching stuff is how many coaches that take to change a light bulb ? Only one , but the light bulb's got to really want to change . So you've got to bring them along with you , right Newsletters ? Educate them , educate your clients about the principles of money and happiness .

So of those four cornerstones that the book is all about , the first two are what's true of everybody and what's true of you individually . There are some general truths , research going back thousands of years , buddhism , philosophy , psychology . There's no neuroscience . There's loads of stuff out there which the book tries to bring together .

Educate your clients on some of these things . It's not your fault you're rubbish with money . Your brain's not wired that way . It's not your fault that you're not doing things to benefit your future self . It's because your future self is a stranger to you .

Educate them on some of these things so that when they come into the meeting you get the second of the cornerstones what's true of you , that know thyself , as I call it . Then they'll be much more ready to have those sorts of conversations . So bring them with you . Don't try and surprise them .

There was one particular segment that I was always amazed by , and that was the diary room sessions . In those diaries , they would talk to the people . These people felt like they knew they were . I don't even know whether they were red or blue or green or what my favourite colour is .

We don't even talk about all these other things that they are talking about in these deep things , one of the things that I wish I did earlier in my life , because I only then , in 2014 , went on that journey to get to know myself . I must say that that is one of the most powerful things that I did .

It's not as easy as it sounds , but there's a lot of tools and things out there that can help you with that . How do we then approach if a client hasn't gone through some of those things and they haven't spent time ? I know I ask plenty of questions all rolled into one . Sorry for that , chris .

Do we sometimes find that clients think they know themselves and then turns out that they don't ? That's a dangerous ground to have a conversation sometimes , if they think they know but they don't . How do we tackle those situations ?

There's a lot of ex financial planners getting excited and interested in the research and all this stuff . A lot of academics , a lot of people in psychology who are coming into this world , behavioral finance etc . And talking about you've got to have a life with meaning and purpose . You've got to do is get . It's a bit scary . It can very client .

There's only ever talked about investments to suddenly have all of this . It's a bit scary . So let's just do one little thing at a time . Just say to a client we've talked about your retirement and you want to said you retire at 60 and that's what financial plans doing 60 and a day , what will you do ? You wake up . What's going to happen ? Now ?

Most people in my experience will say that they want to travel . That's the number one . What I want to do in retirement . Answer which is cool . You might get some bucket list stuff . The trouble with that is that they're all goals . I don't like goals or not a big fan of financial goals , because once you've achieved a goal , then what happens ?

Famously , michael Phelps , who won eight gold medals at the Sydney Olympics , then had a nervous breakdown . Having achieved everything he was working towards . He had nervous breakdown because now he wasn't working towards anything . So goals are okay .

I'm not saying one can't have goals , but help clients to find their intrinsic motivations , the things that they could do that will give them meaning and purpose and dial that down another step . So I used to talk about living a life of meaning and purpose and I realized that was too heavy , so I just changed one word .

Living a life with meaning and purpose Doesn't mean everything you do has to be meaningful and purposeful . But , for example , I set up a youth cricket club in my local village which I started from scratch .

It was just me and my kids and some of their friends and one team , and then two teams and three teams and then finally the club noticed and the club got involved . Now there's a 180 kids every Friday night playing cricket in the summer our local cricket club . Now that will be with me forever . I'm so proud of all of that .

It was hard work and I'm proud of what I've done . That was time . That wasn't even money . So I just have that little thing in my life which gave me meaning and purpose . And now what I do in this conversation with you gives me meaning and purpose .

But once this is over , I haven't got to go into the front room and make a meaningful and purposeful tea for the kids , you know . So that's , that's what be my . One of my big tips is just dial it down and just do one little thing at a time and just ask your client what does retirement look like ?

And if it becomes a goal type answer , then use this question . That's great . When you've achieved that , then what will you do Then ? What happens ? The nice question to ask to just keep the conversation going . Is there anything else ? Just keep prodding and asking questions . Leave lots of silences .

I think silence is the most underutilized tool in the financial advisors armory . Ask an open question , shut up and stay shut up , and you'll be amazed . Leave the silence . Leave the silence for 10 , 20 seconds , 30 seconds .

The client will be looking at you strangely and you just smile behind your back and then eventually the client will click into what's called system two thinking and they will start actually genuinely think about and properly answer your question . So dial it down a bit Ask an open question , ask a follow up and then silence .

But is there , like , a way to define happiness , or is that something that you need to define for yourself ? And and then I think the thing that goes with that , that's for me , it's about recognizing happiness . But then can I measure it ? This thing makes me happier than that thing , or I've never been this happy in my life .

Like , is there practical ways to actually measure this ?

A hug , A hug from a loved one , is going to make anybody happy . There's research out there , for example the Harvard University longitudinal study on happiness , which shows they asked a whole load of young people what will make you happy as you go through life and they all replied money and fame . They then went back every two years and said are you happy ?

What's making you happy or unhappy ? And the people who became rich were no happy . The people who weren't rich , the people who became famous , were no happier than the people who weren't famous .

What they found was that the biggest contributor to happiness by a street was the quality of your social relationships , to the point that loneliness people who reported loneliness died younger . That study's been going on for about 80 years and there's a fantastic book out about it , also a fantastic you just Google Harvard study on happiness .

See the TED talk that Robert Wolneo gives is brilliant . So there are things that we can do , we can point towards that , we can take steps towards those things . You've got the . So Maslow's hierarchy of needs is here in here as well , because I do get people sometime on social media saying , oh yeah , we'll try not having any money .

Then see how happy that makes you . And that's true . If you're bottom of Maslow's hierarchy of needs , you can't . You've got sandwich , you haven't got shelter over your head . A bit of money is going to make a big difference .

So it does depend where you are in your life as well , which is why it's such a fascinating subject for financial advisors and planners to talk about with their clients , because it's different for everybody , and one of the major problems is you can't challenge your own assumptions .

So that's why you need third party help to get into this and to really understand how that will apply to you . As for measuring it , that's really tricky .

However , I do have something coming out at a couple of months time which is called the financial well being pulse , which is which measures and gives a score for a client's relationship between money and happiness . So watch this space , I guess , on that one .

So it is possible that they spent many years building this tool using academic and psychology and what have you . So , but it's not easy to do . It's not easy to do , that's that's to be sure .

It's a little bit like there was an American study in the Senate that they were looking into into pornography and somebody at the beginning of the session said what actually is pornography ? Can we define it ? Somebody replied I can't define pornography , but I know it .

When I see it I kind of think , well , being a bit like that , not quite sure I can define what it is , but one day I might just be feeling happy and I noticed I've been feeling like this for a few days now . That must be well being , you know .

So we think so , of course , we stress them , we worry because we don't have money , and how am I going to pay these bills and I'm going to keep a roof over my head and my family's head and I'm going to send my kids to school , and all these kind of things might be weighing on our minds , and then you think money's going to sort , that's going to make me

happy again . But there's a difference between not feeling anxious and just not , and just feeling safe , actually being happy . So my big question to you as a last question here , chris , is does more money make us more happy , like you know ? So there's again two questions in one , but I want to end with that one .

But above a certain level I don't believe it makes any difference . Now there was several studies on this and I think this is so interesting . There was one study that said that the limit is something like 75,000 US dollars annual income . Anything more than that doesn't make you more happy .

Then somebody did another study which said actually , there's no end to it . People we spoke into in fact it was the same data set , just interpreted differently said that more money will always make you more happy . So then the two authors of those two reports came together for a third study which unsurprisingly said well , it depends .

It depends on your attitude to money . So some people need more money to be more happy , some people don't . And I thought about this lots and lots and lots , because it just instinctively doesn't work for me that more money will make you more happy without any end . If I give Elon Musk a million dollars , will that make him more happy ?

So the phrase that I've come to the conclusion of , after we've gone up to a stage where you've got security and you're OK , I would say , more money will make you more happy . If you need money to be happy , now that's a treadmill . That's a treadmill .

So if we can get off that treadmill and do the things that make us happy which don't need money , then there will be a limit and surely that's healthier for us and for society and the planet and everybody .

Obviously there's the books subtly placed behind me next one of my novels , and then there's the Financial Well-being podcast , which we've been doing for about eight , nine years now 100 plus episodes . There's masses of stuff in that as well .

We really appreciate it and I can't wait to run into you when I'm in the UK next or when you come to South Africa . I mean , hopefully that's also on the cards . Chris , thank you very much for spending your time with us . We really , really , really , really appreciate it . We're insightful and really looking forward to chatting to you again soon .

Thank you very much , ladies and gentlemen , for joining us live this morning , if you watched on demand . Thank you very much as well for spending your time with us and for learning with us . Next week we have our first panel discussion , so keep an eye on our social media on Monday to see what that will all be about .

But on that note , thank you very much for being here . I want to wish you a fantastic weekend , stay safe , be blessed and prosper and continue to raise the ball . All right , folks , that's the wrap for this episode of Propulsion . I hope you got as much out of this as I did .

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