One, hello, everybody, and welcome to another smart money circle update. I'm Adam Sorhan. With me today is Christopher Mansky, who's founder and president of Mansky Wealth Management with over half a billion dollars in assets under management. Chris, thank you so much and welcome to the Smart Money Circle. It's a pleasure to be on the show that I've listened to. So thank you so much. Oh, thank you, Chris. So always like to begin.
Can you tell us your story and a little how you got to where you are today, please? Sure. I have a military background that began at the United States Military Academy at West Point, and after graduating from there, I was in the Army for almost 6 years. I left the service as a captain to be a Merrill Lynch financial advisor and I was repeatedly recognized for growth at the
highest levels of the firm. I was selected to be a trainer for other financial advisors and I traveled the country helping advisors to grow their own world class investment practice. After about 10 years at Merrill Lynch, I left to open my own RIA in 2012, and we've been consistently recognized on the list of the largest RI A's in the country. Along the way, I became a traditionally published author and my latest book is published by McGraw Hill.
Congratulations. Thank you so much for your service. Number one, congratulations on the success. It's fantastic. And just curious what is the your book? I see it behind you. Can you tell us a little about it, please? Oh, sure. So that's my first book, The Prepared Investor. It was compared to Malcolm Gladwell's book Outliers. So if you like that liars, you probably like the Prepared Investor since they both describe how there's more to the
story than you than you think. For example, Outliers says that, hey, readers, there's more to success and check this out. And the Prepared Investor shows readers that there's more to investing through crisis. We've all heard, you know, just stay the course, don't change anything, wait for the down market to get back. But there's definitely more to
that story. And and actually my second book, Outsmart the Money Magicians that describes how all of us, advisors, clients, everyone listening to this podcast is getting tricked by a financial system that is truly rigged to the detriment of both clients and the brokerage advisors. These illusions happen every day. And, you know, I think that's a book that is going to help to, you know, maybe raise the bar for all of Wall Street.
Wow, I absolutely love that. So I've got an investment book, too. But I'm really interested in psychology, specifically making smarter decisions. And your magician thing just rung, you know, just a really loud bell. Are you familiar with the Archetypes, with King Moore, your magician love or any of that kind of fun stuff? And Carl Young. I think I need to learn more about that.
Oh, OK. So I wasn't sure if that's where you got it from or not, but that I love that magician concept where it's that that person idea that there's somebody a magic, you know, kind of like Wizard of Oz. There's a magic person behind the curtain who knows it all and and doesn't really, you know, OK, I'm reading your book. Is it available yet or is it not published yet? It is available, but it won't deliver till November 6th. That's when it launches. But you can go on to, you know,
wherever you buy books. Amazon's the most commonplace and you can get outsmart the money magicians. Okay, beautiful. Thank you so much, Chris. That's a that's a delay. I'll get both booked. Actually, I'm a big fan of reading. So let's talk about your second, my second question for you, your investment strategy. Can you please pull back the curtain and let us know what you what you do, please?
Well, sure. So I think education and being a resource for improvement is a big part of how we're handling risk. You know, when we're looking at investing, we want to make sure that. These two tools, education and Examination, are available to me. The old adage measure, twice, cut once, applies here a lot. A lot of risk exists solely because of systemic norms. That's how it's always done.
And and if you just ask the hard questions, you know knowledge itself can be a major game changer and a destroyer of risk. You know I've seen you know some of the the guests on your show as they talk about you know value investing versus growth investing or you know you know the the the level of risk in the bond market versus the stock market and certainly all of that plays a role. But I think in the in the big picture, our first step is where is there a a basic education
required? And how much risk can we destroy by, you know, making sure that they're aware of not just the basics, but maybe a little bit more than the basics, or if they're already passed, a little bit more than maybe we can go, you know, a bit further, you know, and get into more of the complex concepts. Education is a big part of our
approach. Interesting you educate the client 1st and then from an investment standpoint, do you find yourself more fundamental in nature, technical little bit of both. How do you actually go about the investment side of it please? Sure. We're very much fundamental. We're bottom up. We look at the individual company and we look at you know we look at the leadership, we look at you know what is it that they're selling and how does it fit into the marketplace.
A lot of times you know we're we're making a buy decision because we think it's very inexpensive and the amount of income that we'll receive is worth the purchase. You know the the typical title is the value investor. You know, we're we're very value based. I love that. And then you mentioned risks. Let's go there. What are some lessons you've learned about risk management, mistakes you've seen people make or you've made, and how do you adjust or learn from them, please? Well, sure.
I think, you know, when I'm thinking about the the different lessons that we've learned as it comes to risk, I feel like that education plays a big role in that. So to give you an idea of what I mean, there, there's a lot of little tricks that it's easy to get fooled by. And you know, if we just shine a light and ask those hard questions, we can, I mean, we can really avoid a bad mistake. And I'll give you, I think CPI is the perfect example. Here's just a quick example of what I mean.
You know, today the vast majority of people believe that the consumer price index is an accurate representation of inflation. You know, the government says that the change in CPI represents the change in inflation, but there is a small number of people who recognize that. Well, really this is like, you know, the magician has planted the person in the audience. You know, the the CPI volunteer is actually part of the act.
And and we know this because the government has changed the method for calculating CPI more than 20 times since I've been alive. And you know, and just like a a fake volunteer is part of the act, you know, CPICPI is part of the government's act because. As they're changing CPI, they get to use that index to pay interest on debt, you know, benefits like Social Security to millions of people.
Can you think of any other situation where the same person who has a debt gets to control the measurement of how much that debt costs? You know, if you ask any economist today, they'll tell you that CPI is not an accurate representation of inflation. And you know, I'm reminded of Peter Schiff. The famous economist that predicted the 2008 crisis, he did a fantastic experiment that
all of us can replicate. So what he did is he looked at the government CPI stats for inflation, specifically in media and periodical. So that's like magazines and newspapers. And he saw that it was reported as 30% for the last decade. So the government says that, you know, the the cost went up 30%. But then he went and he googled all the big name magazines and newspapers, since they have the
price right on the cover. And using basic Internet searches that really anyone can do, he gathered the data for a lot of the most popular magazines going back ten years. And it turns out the increase was not 30%, you know, like the government had said. Instead, it wasn't even 40%, It wasn't 50%. It was over 130%. And so, you know, This is why McGraw Hill is publishing my book, Outsmart the Money Magicians. And I'm writing about something very serious.
But to me, the lesson here, you know that that lesson that is timeless. It's not don't trust CPI. Instead, I think it's the importance of asking the hard questions. And really, you're shining the light into the corners and making sure that we've got all the information. Wow, that is so powerful. So I absolutely love that. And I couldn't agree with you
more. Even all the quote, UN quote numbers, the magician stuff to me is just bam, bam, bam, spot on. So next question, What are some timeless lessons you've learned along the way that you'd like to share with the audience? Well, I think the biggest one I can think of is that there's a difference between value and income. And as I mentioned before, we have a value bend you know that's where that's the our
leaning. But I think what you can sell something for is really different from what it pays you. And and I think the old adage don't kill the goose laying the golden eggs. That applies here because it's a huge mistake to kill the goose. And we all do that every time we treat income producing assets the same as a nonincome producing asset. In fact, everyone tuning into this show knows a friend or a neighbor or somebody. Who has absolutely done this? In fact, I think it happens most
often in divorce. I do describe this in my book Outsmart the Money Magicians, because it's such a powerful illusion. So let's just take a quick example. A husband and a wife, he works, she stays at home with the kids and they decide to divorce. All they have is a house, two cars and an investment portfolio, and they agree to split everything 5050. So there's no animosity. Let's just split it down the
middle and be done. Unfortunately, the couple, their financial advisors, their attorneys, the judge at the divorce court, they are all happy to be completely tricked and split these assets in a way that the wife is at a major disadvantage. It happens all the time and and the treason is because we say 5050 is determined by what the stuff is worth. You know, if we look at the house, let's pretend the house is worth 500,000, the stock
account is worth 500,000. If she wants to stay in the house with the kids, she gets the house, he gets the stock and, you know, and goes on to live in an apartment. The whole system supports this, but it's a timeless mistake. And the house costs money. We all know that. She has to come up with maintenance, insurance, taxes. Where is she going to get that money? She hasn't even had a a job for years.
The stock, on the other hand, it pays money, you know, and and you and I, we could agree maybe 2% is reasonable and dividends, so off of 500 grand, you know, that's like 10,000 a year that he's getting and she's got an asset that costs at least 10,000 a year. It's a timeless mistake and and it's a lesson that I think people need to learn, you know, make your split. With a real focus on the income. Otherwise you kill the goose that lays the golden egg.
You know Chris, that is such a powerful point. I know rich Dad, poor dad in the book talked about that too, where he just redefines the idea of assets and liability. So people say yeah, my house is an asset and it's like no it's not cuz it costs cash flow in is an asset which is income. Cash flow out is a liability. So your house costs you money, therefore it's a liability until you sell it. If you sell for a profit then sure it can become an asset.
But the entire time anything that costs you money where cash is flowing out is a liability and then cash flowing in becomes an asset. I love, I love that definition of it. The light bulb in my head went off and I when I saw that and it speaks to your point which is just spot on timeless mistakes. Well, I think one of the. You know, mistakes that I I've run into and that I hope you know others that are listening to this can can learn from it is giving balance a little bit too much focus.
So I know that right now it's really popular to say that balance is the goal. We're supposed to have all of the different parts of our life being touched in an appropriate way at all times. But what I've seen in looking back is that when I have attempted to do that. That my big really aspirational individual hopes and dreams that they slow down and that they sometimes even go to the wayside because they're too big to fit into balance.
And and I think about people that I work with who for example, there's a client of our firm that is an immigrant and he came with nothing to America. And when I've talked with him about balance. He says balance is just a short path to mediocrity and that it's a selfish path. Because you know that there are your children and your grandchildren, and you're supposed to make the world
better for them. And you can't do that if you're, you know, putting time into every part of the wheel of life. You know, we've seen all the different parts of life. And so I know that this isn't a popular statement, but I do think that there's times when it makes sense to really go deep. And go narrow and, you know, let the world around, you know, hey, I'm trying to do something that's hard and you can't do hard things and have a balanced life.
You know, CEO's of Fortune 500 companies, they're not typically living balanced lives. You know, military generals and, you know, at the height of a conflict are not living balanced lives. Olympic athletes are not living balanced lives. But that also is because we think of balance on a day or we think of balance on a week. But if you expand that like my client who comes from Vietnam, he says. I think of balance over 100 years. I'm just a part of this and it's a. Different mindset.
It's not a wrong mindset, it's a different one and I think that that is a a mistake that I have made is making the mindset of one day or one week. It's much better to lengthen that and see what you can do with your time on this blue marble that that's so powerful, Chris.
So in my book I talk about that it called time arbitrage where you most people looking at the leaves in the trees which is the daily charts they charge, they miss the trees and then the forest is like the annual charts or the, you know, the over longer term decades and so on and so forth. But everyone's too busy about what just happened today or the last five minutes in the market. Oh, the Dow's down to 100, up 500, it's all nonsense. Whereas you step back, you get
that bigger perspective genius. I absolutely love that. So next question for you, what's the best piece of advice you'd like to share with the audience and or give your 30 year old self? You know, I think, you know, I'm in my 50s now and I can look back and I, because of my military background, I think I had a very narrow view of what
leadership was. And and if I could go back, I think I would tell my younger self that there really are different kinds of leadership that are needed in different situations. You know, a military leader, you know, has different requirements and different needs than a business leader. And a a leader in in politics in Venezuela is probably going to have to have a different approach and skill set than a leader in politics in, you know, local government in South Florida.
You know, it's just, you know, leadership really is a function of the culture. And I and I think when I was younger, I had the idea that there's really only one right way to do it. And this time has gone on. I think I've seen the, you know, the truth of that. And you know, I'm glad to share, share with you. Thank you for asking. No, no, my pleasure. Absolutely. So this has been really fantastic. Thank you so much, Chris.
Before we go from a investment standpoint, questions might come up with respect to building a portfolio. I know you mentioned income several times and value up. Can you speak a little bit more, give some clarity with respect to how you build portfolios, when do you buy, when do you sell, etcetera? Yes. So what we're doing is we're looking at publicly traded companies and you know income instruments that are analyzed by
a third party. So anything that is not going to fall into that, it's not even part of our process. And so right off the bat that removes a whole world of pretty complicated, sometimes very risky, certainly illiquid investments and and so. The next step is, as I'd said, you know, education for the person that we're working with and a real good understanding of, you know, what they're
trying to accomplish. And then as we're making the purchases, our main focus is are we buying something that is paying us and we're getting it at a price that it's very clear to anybody it's on sale. And so that that's going to be different for different sectors, for different places in the world. You know, it's not like it's a a cookie cutter. Oh well if it's you know, A10P E, well then it's always a buy. You know, it's not like that.
But you know, for example, you know right now I'm certainly not making any recommendations, we're just talking about the market. But right now we feel like telecom is very cheap and you know, we love the idea of something like an AT&T or a Verizon. And and so that that kind of gives you an idea of what we're looking at today. I look great. Well, Chris, thank you so much. What's the best way for people
to get in touch with you? They could just look up chrismanskychrismansky.com or manskywealth.com or look up the book Outsmart the Money Magicians coming from McGraw Hill. I look forward to it. Well, Chris, thank you so much and hopefully we'll have you on again soon. I look forward to it.