Erik’s 5 Pillars of Financial Security
EPISODE SUMMARY
In this episode of the Building Us podcast, co-hosts Erik Garcia, CFP®, and Dr. Matt Morris, LPC, LMFT talk about Erik’s ebook entitled, 5 Pillars of Financial Security. They discuss how to manage money by applying the 5 pillars, the physical and emotional impacts of having debt, and the significance of saving money.
Episode Highlights:
- Matt shares that he wants Erik’s advice on whether his expenses are good or not. (1:21)
- Matt shares two stories, his downhill mountain biking experience with his son and a whitewater rafting experience with his parents. (1:47)
- Matt mentions that Erik has written an introductory guide to financial advising and financial planning called the 5 Pillars of Financial Security. (4:35)
- Erik explains the main reason why he wrote the guide. (5:04)
- Erik shares that as a financial advisor and investment advisor, his world can get very technical and a lot of things that he talks about, might not be specific to everybody. (5:32)
- What did Erik learn from his grandparents about money? (7:09)
- Matt shares that he’s always interested in people’s family stories. (9:28)
- Matt mentions the three statements about Erik’s approach to helping others manage their money. (11:08)
- Erik mentions that if you follow the three statements, you’re going to have success in managing your money. (11:57)
- Erik shares that from a basic principle, at the end of the day, you have to save and you have to put something aside, for tomorrow. (13:12)
- Matt mentions that the second job that he got paid for was fixing flat tires. (14:07)
- Erik shares that being foolish could be spending a lot of money on a vacation when you have a high-interest credit card debt. (15:46)
- Erik mentions that sometimes, there’s value in having an outsider look at your financial decisions. (16:30)
- What are the values that Erik hopes people consider and reflect upon? (17:06)
- Erik shares that the idea of stewardship and provision grew out of two opposite motivations that he learned while growing up in the financial industry. (17:27)
- Erik mentions that most of the financial marketing tends to be driven by two human emotions, which are fear and greed. (17:57)
- Erik thinks that most money management and good money management should be intentional and purposeful in what you’re doing with your money and with your values. (20:01)
- Erik mentions that he’s a big fan of spending money on experiences and building memories. (21:51)
- How did Erik get into financial advising and money management? (22:03)
- Erik shares his backstory, growing up in the insurance industry. (22:13)
- Matt mentions that he thought about his educational journey into family therapy, and how he got into where he is at this moment. (24:09)
- Is Erik writing and advising only rich people? (25:11)
- Erik shares that the big misconception of people about money is that they think if you make a lot of money, you’re wealthy. (25:17)
- Erik mentions that money management is irrelevant to how much wealth you have. (25:31)
- What does Erik know about the people that were influencing his parents when they immigrated? (28:55)
- Erik shares that making sure you have the right insurance coverage in place is an important part of the financial plan. (32:22)
- Matt mentions the importance of working within someone’s values, rather than indoctrinate them into your values. (34:27)
- Is there a little expense that Erik had to curtail? (37:15)
- Matt thinks that budgeting is just a spending plan. (41:30)
- Erik mentions that budgeting is being purposeful and intentional with what you do with your money. (44:45)
- What are some examples of bad debt and some examples of debt that can help us get ahead? (46:34)
- Matt mentions that debt is expensive, both financially and emotionally. (49:09)
- How does Erik see debt show up for his clients? (48:50)
- Erik mentions that if you’re stressed and anxious, that can’t be good for relationships. (49:05)
- What’s the significance of saving? (50:30)
- Erik explains the three types of savings, short term savings, midterms savings, and long term savings. (50:42)
- Erik shares that if your job is seasonal, commissioned based, or if your income is variable, the short term savings account becomes more significant to fund. (53:24)
- Erik mentions that he’s a big fan of having separate accounts for separate purposes. (56:02)
- Erik thinks that when you’re motivated and driven by something outside of yourself, you start to think about your money a little bit differently. (57:30)
Key Quotes:
- “Spend less than you make, right? If you spend more than you make, that’s called debt, it’s not a good thing. Save as much as you can, right? Savings is good because one day, you won’t be able to earn money anymore, or if you haven’t saved, you’re going to be in trouble. And then don’t do anything stupid with your money, right? Stupid things cost money.” – Erik Garcia CFP®
- “The idea of stewardship is simple. The idea is that everything you have, your money, your material resources, they’re not yours, they belong to somebody else, right? And you are responsible for being wise with it, spending it wisely.” –Erik Garcia CFP®
- “One of my values is to have a connection with my family members, connection with my kids, and to build memories with my kids. If that’s one of the values and spending money on an activity supplements that, that could be a good experience.” – Dr. Matt Morris LPC & LMFT
- “The more discretionary income you have, the sloppier you can be financially. The less discretionary income you have, the more careful you have to be.” – Erik Garcia CFP®
- “I don’t care what you spend your money on. If you value it, then spend your money on it. What I tell people is you just need to know what you’re spending it on, because there’s a good chance you’re spending money on something, that is way outside of what you want to spend it on.” – Erik Garcia CFP®
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