How Financial Empathy Can Improve Financial Services

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Michael G. Thomas Jr. is an Accredited Financial Counselor (AFC®)  and 4th-year Ph.D. Financial Planning Candidate at the University of Georgia. He has co-created and facilitated financial literacy programs for kids and adults as well as given a TED talk on the importance of financial empathy.

Michael co-hosts an NPR affiliated radio show, Nothing Funny About Money, and provides financial counseling services to underserved populations. His research focuses on understanding the factors that influence financial well-being in low to moderate-income households.

Michael is passionate about understanding the story behind money decisions, and how financial counselors and planners can educate themselves as professionals to better balance their response to people’s financial goals and decisions.

Too often, financial professionals find themselves in a position where they’re judging how their clients want to spend, or use their wealth. The truth is that not every client is alike, and not every client has the same money mindset. It may take several meetings to dig down to the core of why they feel the way they do about money - and the stories that are driving their decisions. When planners and financial counselors are able to take a step back and listen, they’re better able to understand the culture and background of the client they’re working with.

In this episode, Michael is bringing all of his education and background on financial empathy and money stories of underserved populations to the table. If you’re ready to help change the narrative within the financial planning profession, and want to gain a better understanding of how to work with individuals from a wide range of cultures, this episode is for you.

What You'll Learn:

  • How financial empathy can improve financial services

  • Ways to practice financial empathy

  • The importance of money stories and background

  • Why our background impacts how we make financial decisions

  • Why the financial services industry has let down underserved populations with canned financial advice

Show Notes:

Episode Transcript

Rianka: 00:00 Michael, welcome to 2050 TrailBlazers.

Michael: 00:04 Thank you. Thank you. Definitely glad to be a part of this and you're doing some amazing work. Love your story. And, yeah, I look forward to the conversation.

Rianka: 00:13 Yes. Thank you so much for, for joining us today. If there's any first time listeners this season, season three, we're talking all about money and culture and one of our past guests, Kathleen Kingsbury, she saw this Ted talk by this amazing gentleman named Michael Thomas who had a, who had a Ted talk called financial empathy, understanding the story beneath the numbers. And so I looked it up myself. I was like, let me let me do some research. And I saw it and it's, it's 11 minutes, but it is a very powerful and impactful 11 minutes that you share with the audience at that Ted talk at UGA.

Michael: 00:58 And I really appreciate that. Really appreciate that.

Rianka: 01:03 And I just want to say thank you. You know, it's a very courageous and, and for the listeners, don't worry, I'll share the link in the show notes. What I appreciated about the conversation, that you had on this Ted talk was that you emphasized the importance of going beyond the numbers. And this is something I share with it advisors all the time. It's is especially, the newer, younger advisors is there is always a why and there's a neet behind a need. If they're not following your recommendations, there's probably a reason why and let's get behind it. Let's understand. And there's something that you said in the Ted talk that resonated with me. You mentioned when we focus on the numbers we miss out on the story that's driving it. You also share the example of a woman who was buying a big emphasize, big flat screen television and, she was getting her taxes done by a volunteer, tax prep person. Vida, a program that I've volunteered with for many years. Vida is the volunteer income tax assistance program. And you know, I guess the tax preparer mentioned, oh, so what you're gonna do, it was a big refund. And she mentioned that she was going to buy a big flat screen TV and you know, finish telling us the story. What happened in that conversation.

Michael: 02:29 So with some of the work that we do with Vida here at UGA, we, we try to help families think about what are going to be the next steps with, especially if they get a windfall, a at tax time to set themselves up for the rest of the year and, so that they, you know, aren't struggling and are working towards some meaningful goals, which is a great thing to do. When you're thinking about I'm doing this and I'm helping people beyond just filing their, their income taxes. But in that instance, the, the tax prepare or was a little presumptive in, what's the best word would be a labeling the individual who had decided to spend their money on a big flat screen television. Because in their mind they were thinking that that person wasn't being smart about the way that they were spending their money. And, and that particular scenario, that individual was thinking that well I have the right way for you, that's very different from what you're suggesting. And there was, there was a gap there between understanding why that individual making the decision. And from the tax preparer standpoint with regards to making a judgment about why that person was making the decision. And that's where the crux of the conversation revolved around, I guess the best way to say it.

Rianka: 03:54 Yeah. And I'm, I'm happy you bring this up because even I, as a young advisor, many years ago, okay.

Michael: 04:07 What?

Rianka: 04:07 I know

Michael: 04:08 You didn't just start this? You don't age.

Rianka: 04:12 Thank you Michael. You can come back anytime. Okay. Andy Time. You know, I, I learned very early on not to place judgment or my values on how other people spend their money.

Michael: 04:25 Yes.

Rianka: 04:26 So that was a huge learning opportunity and a learning lesson for me, which helped me help clients navigate their relationship with money. And I learned this hands on, you know, when working with clients and, you know, a senior adviser is pointing out me making snap judgments. And, and so that judgment calls on, on clients. And however, something I've also learned about you is that, not only are you a, you know, you, you, you speak on Ted talk stage at, you're also a lecturer at the University of Georgia. I'm also a PhD student, you know, hats off to you. And you, you work with students

New Speaker: 05:11 One day at a time,

Rianka: 05:11 right? One day at a time. You work with students in a way that is called active learning, which I'm pretty sure is extremely helpful. So, so talk to us about that. How is that different and how are they learning what I learned and you know, with working with clients after I graduated, you're actually teaching students now how to do this active learning.

Michael: 05:36 Yes, yes, yes, yes. So one, it is, so, you know, kind of hearkening back to the Ted talk and a story about the young lady, who file taxes and was getting to the big flat screen television. One of the things that I, that I use it with regards to active learning is bringing up scenarios like that because it's, it's active learning. In a sense it causes for individuals have to have to have a paradigm shift or to at least to challenge their assumptions about something. Or there may be instances where as a financial counselor and doing financial coaching and all that good stuff, we make recommendations, but we're not always mindful of the barriers. And then we aren't helping individuals think through the barriers and how to overcome those as they're working towards their financial goal or goals. So I'm very barriers focus because it's easier to create a linear path between do this and get here and I know that it doesn't always work out that way.

Michael: 06:34 So in my class, active learning, yeah, it never does. So in my act of learning scenarios, for instance, we talked about, for instance, we tell people all the time, you know, just set up a Vanguard account or just set up a Charles Schwab account. And I was like, you know what, y'all, I could tell you that yes, that is an optimal strategy to have a diversified portfolio. You get a Roth IRA or whatever, traditional IRA. And we don't have to go into those details. But to get something into, into start. But one of the things that I'm leaving out here is that I know that as soon as you go to that website, you're going to be absolutely lost. You're not going to understand the language. And even if you find the different portfolios in which you can invest in, you're going to be like, what's a VT FX?

Michael: 07:19 Or what's this, or what's, this type of account or this type of fund or whatever it may be. So I want you to see it. I want you to struggle with it. I want you to go through this process. And then I want us to come back and have a conversation about it. Was it as easy as I made it seem? And the vast majority of my students will say, no, it wasn't. I had no idea what I was doing. I got completely overwhelmed. I had to make all these clicks. I was getting lost in here or there, whatever the, and I was like, that's exactly the point. So in this class, as we're navigating this process, I'm not just going to tell you what to do. I'm actually going to prepare you for the obstacles that you're going to have to navigate in order to be successful doing it.

Michael: 08:02 So for me, that was an active learning opportunity because the way that our curriculum is set up is that we, we say, hey, this is the optimal thing to do, but we don't go into details in terms of how to actually execute it and navigate the process. So a lot of what I do in my class is that I say, all right, this is optimal. Now go do it. You come back and tell me, was it as easy as you thought it was? Something as simple as pulling up a credit report. I can tell you to go get your credit report, but do you know how to read it? Do you understand what you're reading? Do you understand what you're looking at? Can you make sense of any of it? And then I'll have a lot of students come back and say, well, you know what?

Michael: 08:41 I pulled it, but I have no idea what's going on. Then we dive into, all right, let's carefully think through, look at it and understand it. Because I just don't want students to understand or just know knowledge. I want them to have an experience that allows for them to be more confident in their ability to do. And then once they're confident in their ability to do a thing, then I know that they're going to be more confident in sharing the right financial information and not just knowledge, but also how to navigate different situations to help others within their family, their friends to achieve some level of financial wellbeing. And, so that's, that's active learning. It's engaging people in thinking about what we're doing and that making it this linear process because it's not.

Rianka: 09:27 Yeah, absolutely. And as you were, you know, explaining that scenario, it made me think of just why and how, the process or the step in the financial plan and process of implementation and, and literally holding your client's hand through the implementation phase is so important. Like, so I know there are planners out there who was just like, okay, I'll offer you this one time plan and here's the cost is a flat fee. And I'm like, ah, can you extend that a little bit more? You know, because while this is great, it's a blueprint, right? We can give anyone a blueprint, I can tell you to solve all of your financial woes, your financial this or financial that it's right here in this book. And they will get this book and it will become a beautiful, the thing paperweight.

New Speaker: 10:24 Absolutely

Rianka: 10:25 door stopper, this plan will become a wonderful paperweight.

Rianka: 10:30 And, and that's not what we want. So, so it's like, yes, I'm giving you the blueprint, but I'm going to show you how to implement it as well. And I think that's the difference of making a great financial planner. So also I kind of want to take a step back and talk about the big flat screen t because I don't think we mentioned it, but so the purpose behind this woman, there's always the why, right? And something you also mentioned in your Ted talk was that we don't spend enough time on the whys, right? So why was this woman buying this big flat screen TV?

Michael: 11:08 Yeah, she was, she was in a, she lived in an urban setting neighborhood where the crime rates were fairly high and her children were getting older. And generally as your kids get older, you know, they want to, they want to leave the nest, they want to do more. And for her it was, it was a way to help protect her children. And by having the flat screen television, you know, rather than her kids wanting to go out and over to other people's houses, whatever it may be, you know, they can just come over to our house, you know, they, we can come do movies over here. We can play games over here to try to, to protect, her children and even her children's friends from the environment in which they were living. So for her when you really, really, really think about it. And I know that conceptually we never, placed these things in this type of context, but she was purchasing insurance.

Rianka: 12:06 Hmm. Wow.

Michael: 12:08 If you think about it, that for her, that was an insurance policy for her children to protect them. And when you think about it that way in a way that we ensure, she was trying to protect her, her children from the streets and the best way that she can do that was doing something that she felt her kids would absolutely love and they would want to spend more time engaging and being at home. And that was, that was, her logic and her reason for, for doing it. And when you, when you frame it in that way, any person, I don't care what background you come from, Kinda like, oh, I completely get that.

Rianka: 12:46 Yeah, absolutely.

New Speaker: 12:47 I completely get it. I can make so much sense

Rianka: 12:54 and it's, and it's actually pulling them a memory of my, you know, my grandmother, my Nana, she always purchased the new ways game system for my brother. My older brother and I was like, why he always get the newest game system? Well one, because he wanted it, but then to, it was just like, how, like why is he always, and then it's like to keep them in the house to keep him off, you know, off the streets so he won't be get in trouble. And wow, it makes sense now.

Michael: 13:29 Yeah, it is. It's one of those things where, and you can see where the dissonance is created now. Right. And especially for the listeners out there, if that lady is coming in, she already knows her why. But if that other individual who can be the financial planner, the tax person who doesn't know, and then they're making a recommendation to her to say, don't do that. Put your money here, then she's gonna feel some type of way because there's this gap in, in understanding. And then she's going to close off and then not want to have a conversation. Right. And then the individual who's making a recommendation, he's gonna feel where she's gonna feel some type of way because you feel like you're doing the right thing. And this is the crazy thing about this scenario. Both parties feel like they're doing the right thing, but when the other doesn't understand the other, you can't get to a solution and implementation of a solution because you didn't really understand that person begin with and when you step back, and this is for the planners out there.

Michael: 14:31 If you think about it, then you're like, if I'm that tax person and I know what I know now, then you're saying the recommendation is completely different. The recommendation now is, well how can we get the flat screen television but not spend top dollar for it so that we can get the thing and then also be able to set money aside for maybe an emergency fund. You can create a win, win scenario, but it's very difficult to do that when we don't care about why the other person is making the decision that they're making. Because there's tons of opportunity when you do to create a scenario that's a win win. And then also you're creating a level of trust in that, that other that person which you are serving now feels heard and listened to in such a way where it's like they're going to come back to you and now they're going to be more open and susceptible to any recommendations that you're going to make. They're going to be more open to recommending people to you, but if you don't listen and if you don't understand, then that person, more than likely is not coming back and they're not going to recommend that people come see you. And that's the continuum.

Rianka: 15:35 Yeah, absolutely. This, this right here, everyone listen, especially if you're a financial planner, definitely stop. Rewind right that down because if this is something that you're not doing, this is something that you definitely should be just truly finding what I call it, finding, the need behind the need because there's always a reason why someone is doing it. Absolutely. Or just spend more time on the why as Michael put it, you know? And it's something that you say in a, in a conversation, you know, before today that in order to create solutions, it has to be rooted in that individual. And that's what I'm hearing you say right now.

Michael: 16:19 Yeah. I, I believe that wholeheartedly. And a, and a lot of that is the educator in me. And just to kind of rewind a little bit and just give me a little background, origin story. I struggled significantly in school growing up, to the point where my parents were constantly, called in by the principal or my teacher. And I would be standing there and the teacher would look dead at me and say like, if he doesn't get this information, he's not moving on. And I had gotten so bad to where I would literally go to class and I would just put my head down and the teacher would not care. And that was, that was my reality for, for a very, very long time. And I'm the type of person where it takes me a little time to process things. I've always been that way.

Michael: 17:09 And it's something that I accept now and I know that it's not a deficiency, it's just that this a part of who I am. So I work with it. Now, if I'm that little boy and I and always think about myself when I'm working with clients, what if someone got a chance to really know that maybe the way that I'm teaching this isn't, doesn't work with this particular child's learning style? And let me think of a more creative way to educate this person. That type of mindset to have that type of mindset means that you believe that that person can grow. And what happens a lot of times, especially in different spaces and as professionals sometimes we know so much to where, I'm don't want to say belittle, but we don't really hear our clients and we're just trying to work to what our objective is.

Michael: 18:02 And if they don't do what we're encouraging them to do, it's that they don't want to grow, they don't want to do better. They don't want to be better. They don't want to have financial wellbeing. They don't want to retire. And that's the narrative that we play. And in doing that, it takes the responsibility off of us and it puts this all on the client. But isn't that the reason why the client came to see us? Right? The client came to see us, right, so that they, we could help them navigate this process. That isn't simply knowledge based or financially optimal based? It's confident based. It's capacity based. And in creating and implementing a plan that's taken into these, taking these things into consideration, we're, when a client sees it, they'll say, you know what? I feel heard. And I don't think that we, we do that well.

Michael: 18:57 But for me, I always think about my experiences and my best learning experiences and those who really got me over the hump. And those were the type of people who did, who were always searching for more and to find what could help me get there as opposed to just being incredibly rigid and thinking that there's only one way to get there. And I've benefited from that. I'm here now pursuing a phd. But I also treat my clients with that, with that type of, that, with that type of empathy. And even sometimes I'll feel as if maybe I'm not the right person for a client, but I never feel as if that client can't grow. And I try to connect a client that maybe I can't serve with someone who I think can serve them better, but it's never a this person can't grow or they don't want to grow. It's maybe I don't have the tools and if I don't have the tools, who does? And if I've acknowledged that I don't have the tools now I can do something about it. I can go get educated, I can learn better strategies, I can learn client communications, I can do a lot of different things to grow as a professional. And that should be the standard.

Rianka: 19:59 Yeah. You can listen to 2050 TrailBlazers, you know, I mean, Michael: 20:04 absolutely. It is what it is. That's why we're here.

Rianka: 20:08 That's why. Right, right. Yeah. This is a learning opportunity for all of us. I always say I'm a student, I'm a forever student. And if you're a financial planner,

New Speaker: 20:17 you have to be,

Rianka: 20:18 if you don't have that mindset, then the client is the one who is not, who is going to receive that as a disservice to them. So for sure, and yes, absolutely. Something else that you said, you know, empathy does not equal complacency. Yes. And listening to their story doesn't mean we're accepting excuses, but the opposite, you know, we have this process again, like it's this financial planning process first is the Intro, right? And then it's the discovery meeting. Some of us kind of skip past that. And you know, there's some discovery meeting and then data gathering and then here's, here's the plan. And then we go to implementation. And sometimes clients need two to three discovery meetings, right. Like don't be so rigid around this process that we're like, not every client is alike. And not every client has had the same upbringing when it comes to money, you know, some clients, and it is something I'm very passionate about is first generation college graduates and first generation wealth builders, like their mindset around money is totally different than someone who grew up in a household with two, maybe two parents and, and corporate jobs, blue collar jobs. Totally different.

New Speaker: 21:42 Yes.

Rianka: 21:44 Go ahead.

Michael: 21:45 I was going to say that's that. So you know, in a previous conversation, and I know you might begin to this, but that really ties into that social capital piece. Which has, which has, which plays a huge role because what we're talking about is financial socialization.

Rianka: 22:00 Yes.

Michael: 22:01 And financial socialization happens in so many ways. The systems in which you exist, impact, socialization. So one of the things, so, one of the things I talk about a lot, especially with kids and money, I have two boys and we talk about money all the time. We try to have fun with it. Obviously this is what I do and we have these conversations, but I don't need to. And until I have established trust with them and I've demonstrated trust with them, how could they ever trust a 401k growing into this substantial amount of money into the future? Like if you grew up in a household where promises are consistently broken, where someone says, I'm going to do this and they never do it, or I'm going to give you this and you never get it, or we're going to go there and we never go.

Michael: 22:54 Those are deeply seated and ingrained. Those become deeply seated and ingrained in such a way where it becomes difficult to trust the financial process. And that's something that takes a lot of time to work through with clients, to get them to stick with something long enough to experience the benefits. But if we don't establish trust or there's no trust in a household, I completely understand why somebody won't be banked or I completely, why someone doesn't trust investing in a market. And all that revolves around, again, social capital, the systems in which you've grown up, you've grown up in and what you've seen, how it's impacted you and in how you perceive the world around you. So what you were talking about with having, you know, maybe three discovery meetings, I mean, you're really discovering not just what a person thinks, but the context around their thinking.

Michael: 23:51 And honestly for any planners out there listening, I really feel like doing that on the front end saves you so much time on the backend. A lot of people don't get that, but I would rather spend an extra session on the front end with discovery than to be trying to chase down a client and get them to do something on the backend because their recommendation that I've made to them doesn't really demonstrate that I hear them, that I heard them. And then I've helped him think through not only the optimal financial decisions to make, but how to do it based on what I know about them. And we don't do that well and I think that there's huge opportunity for, and a lot of the work that you're currently doing. So

Rianka: 24:34 thank you Michael. And yes, I totally, I totally agree with you. I mean it's, it's so true. I can think of many examples right now that's going through my head of clients I work with and, their thought around debt and depending on their socio socialization around debt and what they taught and what they were taught about debt when they were younger can show in, in their adult life today. Whether it's, you know, for us in America and I think debt is a very Americanized thing.

New Speaker: 25:14 Yes.

Rianka: 25:14 People in other countries don't like debt. If anything, they try to avoid it like the plague. But here in America we have learnt how to leverage debt, not consumer debt, but leveraging debt such as student loans. I'm leveraging the debt of the student loan so that I can get this education. And then I pay it back.

Rianka: 25:32 I'm leveraging leveraging the debt of this mortgage. I'm paying 3% on it for, you know, for this mortgage and the interest rate, but I'm leveraging that so I can have that home today. Well, in other countries, they don't believe that. They believe first you buy the land. Yep. Then you save and then you build the house. There's no mortgage. And so helping clients understand who may come here, who are career changers and moving to America and they have all this money. Their were like, well, we're going to pay for this home and cash. Right? And our knee jerk reaction is like, well, don't do that. You know, let's put this money in the, you know, in the market so it can grow to x percent and you throw numbers at them. He's like, Whoa, Whoa, Whoa, whoa, Whoa, whoa. Let's figure out why they want to pay off this mortgage. Because just like you said, once we figured out the why, then we can learn how to navigate that conversation on steering them a different way or meeting them in the middle and compromising.

Michael: 26:31 And at the end of the day, it's, it's a win for the client because people, people don't want to know, and I, and I can't remember who said this, but people don't want to know what you are I think, unless they know that we care about them. And, and I think that sometimes we put the people will care about us, care about what we think. If we tell them what we know. And it does, it doesn't work in that order. And, and I've worked with individuals along, a wide array of the socio economic status. And I will tell you consistently whether I'm working with somebody who's earning $20,000 a year or whether I've done some financial counseling coaching for someone who's making well into six figures, they, the, the personalities are very, very much the same They want to know that they're being heard. And, and that is, that's value add that you don't have to pay for.

Michael: 27:36 You don't have to pay for that type of value add. And it, to me, it just seems so simple because I believe the work that you do, the work that I do, I believe that we're professionals. I believe that we're a profession. And in saying that, I mean I think that there's a public, there's a trust that the public should be able to place in us to know that we're going to do what's in their, in their best interest. And I'm not going to go into whole, you know, fiduciary suitability type stuff here. But I think that that should be the expectation. But it can't be the expectation if, if we don't practice actually listening and in creating solutions that, that operate out of our listening that help individuals work towards whatever goals that they have. And if we do that, then they're going to be more open to hear us as they're navigating the process and allowing us to direct them. So maybe they can do it in a more optimal way, but that is not going to happen just by saying, I'm the expert. You should listen to me.

Rianka: 28:30 And, and we just touched a very, very briefly on the surface level, what you're actually, you know, writing and researching your dissertation, about which, which is the social capital. And, and what you explained to me, you know, in previous conversations is, you know, there's three types and I would love for you to talk through them of the bonding, the bridging and the linking.

Michael: 28:53 Yeah, absolutely.

Rianka: 28:54 Share, share, share with the listeners what you've been working so very hard on it. And what we can't wait to read.

Michael: 29:00 Yeah, we're definitely still working on it, but we're getting there. So the, the, the premise of my research is to understand how financial knowledge, financial skills and attitudes along with social capital impact financial wellbeing. So currently in the literature we know a little bit about, we know a lot about financial knowledge. We're learning more about financial skill and there's been a lot that's been touched on with regards to a financial attitudes and beliefs about money and its impact on self efficacy and our ability to feel good about where we are financially and in life generally. Hearkening back to a little bit earlier when we were talking about context, financial socialization or social capital, you have like these three different groups. Again as you mentioned, bonding, bridging and linking, bonding capital is the family. These are the, the close knit, networks that you have with individuals with whom you place a lot of trust and in confidence and you know that she can get support.

Michael: 30:06 These are the people where, if it's three o'clock in the morning and you're going to call mom, right? You're going to call grandma, you're going to call your brother or your sister. So that's your, your bonding capital, bridging capital, are our associates, these are the people that we go to work with. These are our bosses, these are people or colleagues at work. And bonding capital could also be a community organizations, faith based organizations, groups, so on and so forth. And as you, as you are probably thinking about, you can say, well, my church could be my, my bonding capital and not necessarily bridging. So there there's some fluidness to it and it depends on how much trust you have with a particular group. And then from there you have, again, we have the bonding, bridging. And lastly we have linking and in linking are our formal networks, these are banks, these are our financial planners or financial counselors.

Michael: 30:56 These are lawyers. These are, the, the federal government and public assistance type things. So the way in which within a systems in which we exist, the amount of trust that we have, whether it a bonding, bridging or linking level, impacts how we feel about the information that's being disseminated on the bonding, bridging and linking capital levels. And then also accountability. Do I feel as if people have kept their promises and have done what they said that they've done at the bonding, bridging and linking relational levels. So with my research, we're looking at those across federal poverty level status and to see whether or not, again, knowledge, and all those other factors that I mentioned earlier along with social capital, how those things play on financial wellbeing. And what we're finding is that there, and these aren't conclusive results just yet, but we're finding that there, there are differences where knowledge has no impact on financial wellbeing for households at the lowest rung, at the lowest rung of a federal poverty level status and at social capital is only significant or impactful at certain levels as well.

Michael: 32:09 But then there's a negative effect there, which to us suggests that there may be an element of against stress and shame as it relates to when people leverage social capital. So am I, and I know you, I know you'll, you'll appreciate this. Am I going to see my financial planner before the fact or am I going to see my financial planner after the fact? And at the time in which I do that is going to suggest something very different. Because if I'm seeing you after the fact, it probably means that I like, I'm in a mess and I need somebody to help me clean it up. Right? So I, you would, we would expect for someone's financial wellbeing to be less in that type of scenario. And it may be higher if they're thinking alright, we're going to go to somebody and are going to help us navigate a process.

Michael: 32:55 And we haven't been able to tease that out yet, but we are seeing is that social capital, financial, your, your federal poverty level. It matters. And as you can think about this, we talk about cultural things or whatever it may be. Here in Athens where we are here at the University of Georgia, there is amongst our lowest rung of households, and I like to say experiencing poverty, as opposed to saying, families in poverty, because I think there's something they're experiencing and not who they are. I think that there's a, so please forgive me if I'm kind of speaking to that too much, but individuals experiencing poverty, don't trust the banking system, which what we know is a formal network. Because if you need to leverage in order to get a home, it means that more than likely you're going to have to go through a traditional mode of doing that.

Michael: 33:49 You're going to have to have a good credit score in order to secure the financing in order to get home. But if you have a mistrust of formal social capital networks, regardless of me telling you during a financial intervention that you need to go to the bank and the bank, you're not going to do it because I'm not addressing the mistrust. Now where's the mistrust coming from from? The mistrust can come from systematic issues that if you look at the history of financial, and not necessarily when you look at the history of these things that we currently do today, whether it be student loans and how it started with the Gi bill or when we look at when we, when banks around the 1940s and 1950 started getting home loans and African Americans weren't allowed to get those in order to take advantage of being able to get homes.

Michael: 34:41 And then when we look at home appreciation, the African American population, because they weren't able to secure those loans, weren't able to take advantage of what historically was some of the most significant increases in wealth due to home ownership. And we missed that wave. Now you have grandma who says don't trust the banking system because they didn't allow for us to do said thing and we weren't able to benefit from or we weren't able to purchase homes in, you know, the best areas because of red lining and zoning and all that good stuff. And then you have maybe mom and dad who've grown up in an neighborhood because they have a distrust of maybe bonding capital and linking capital and they keep you within a very tight network where you never get to engage with a community. And a see maybe that things have changed and that there are opportunities now and you're being disseminated information to not trust the banking system to not do this and not do that.

Michael: 35:41 And then by the time you become an adult, you're kind of have this dissonance because you're being told all these different things and you're slightly more educated. But there's a reason why your parents told you what they told you. It wasn't just out of the blue. And so, and again, I'm weaving this narrative together again about why we need to understand the why. Because me again, simply just telling somebody to do something, not understanding context, not understanding how they perceive me based on my role. Because in your household you've been told that that's not a good person. So if you're coming to see me and I don't understand that and your view of formal networks, then that can be a barrier to begin with. And if I never addressed that and really try to drive a trusting relationship to counteract everything that you've learned and some things may have been, may have been justified by the way that you've seen something happen that's further reinforced something, then you have to navigate that process as well.

Michael: 36:42 So this social capital piece is so important because your federal poverty level status impacts what type of connections you have. And you and I both know if you don't have a variation or if you don't have a diversity of social capital, it is very difficult to navigate the process of creating and establishing wealth because you don't have access to the resources, to people, and the information to help you bridge the gap. And that's what we find what happens. But because we work on polar opposites so much that you have one group doesn't understand why the other group doesn't come to see you and you have one group who doesn't understand why the other group doesn't get why we don't see you, then we just have this back and forth narrative where we never really addressed the issue. We just stay entrenched in our, understanding about the other person without really truly understanding or empathizing and creating a middle ground in which we can actually build bridges. So social capital is so incredibly important. And it's something that I want to work on and try to help financial literacy programs, help planners or whatever it may be, think about effective ways in order to reinforce it so that all households will feel as if they have a place in the community in which we're trying to establish to help them achieve their financial goals. Hopes and dreams.

Rianka: 38:05 Absolutely. Yes. I'm like, thank you.

Michael: 38:09 Thank you for listening to all of that

Rianka: 38:11 Standing up and just shouting at the rooftop. Yes, Michael, please hurry. Finish that research. What do we need to do to help you with your dissertation? Any volunteers?

Michael: 38:24 Prayers? Just pray for me.

Rianka: 38:29 Know that you will be added to my prayer list.

Michael: 38:32 I appreciate that. And I'm, and I mean that genuinely. I really, do appreciate that

Rianka: 38:35 oh and I genuinely mean that as well. When you get on the prayer list, you stay up there and if there's any updates, you just let me know. And for the, for the folks who know me, they know I'm serious dude. So I'm serious. Like this is, this is good. This is good work. This is, this is the necessary work that has not been done. And so this is why I believe it's so important for us to have many different types of people. Many different types of culture, many different types of social economic backgrounds being, in the financial planning profession so that we can start to identify areas in which have been overlooked for decades. And so that now we can start bringing light to it and educating our peers and our colleagues, which is what you're doing and which is what, I truly appreciate

Michael: 39:34 that that's the goal. And I'll be honest with you, the reason why I chose to pursue my phd, honestly, you know, I, I have friends who are kind of like, you know, I just want to make more money. But for me that that wasn't the case at all. I genuinely want to pursue research interests that speak to underserved populations. And we, we will never change the narrative, empirically, if, if deemed by the evidence that we find about the optimal ways to work with different populations, whether it's a race, whether it's gender, whether there's federal poverty level status, unless we have people who are genuinely doing research to really understand what's going on and not give canned recommendations about a, and again, I'm going back to the social capital piece where the dominant culture believes that this is the optimal way of doing things. And that's not always the case. So yes. So the, the goal is to do research that that speaks to populations that I don't think that always get an authentic voice and a voice that, that cares in such a way to where you want to do the best work possible to best represent those populations. And I'll just feel like that's my calling and it's something that, I see myself doing for the rest of my life.

Rianka: 41:01 That's amazing. Honestly, what, how can we help you seriously, as the planning profession. How can we help you?

Michael: 41:10 The way that the profession can help me is definitely go listen to the, to the Ted talk. Actually think about the Ted talk, have conversations in your circles about the Ted talk. Go out and have a conversation with individuals outside of your circles to go and have the Ted talk conversation.

Rianka: 41:29 Say that one more time. Let's have conversation.

New Speaker: 41:32 Yeah. You gotta go

Rianka: 41:33 outside of your circle

Michael: 41:36 outside of the circle and let's say if you're, if you're a professional, right? If, if you're, if you're working at, so I worked as an, as an auditor for several years and you know, we worked in a space where we are always engaging like with the security guards, ground keepers, the cleaners that the lady in the lunch line, whatever it may be. Like, there's no reason not to say, you know what, let me schedule an appointment with you to go have a lunch date because I want to know your story. I want to know where you are. And I want to think create, and this is what empathy is to me. That's why I say it's not, it's not an excuse. It's not, you know, accepting that this person is always going to be here. What it is is saying that let me know so much about you that I can visualize and see myself in your position.

Michael: 42:26 Even begin to feel what you might be feeling and think about within the context of your scenario with the resources that you have. How would I work out of it? And a lot of times we try to get people to work out of something based on the tools that we have, the access that we have, the knowledge that we have. But what if we said, I'm going to do away with all my tools, all my access, all my knowledge, and assume the tools, knowledge, relationships, and access that this person has. How would I work out of that scenario and me, honestly, that's where we create the bridge. That's where we develop empathy because if you make a call, and I do this all the time when I work with clients, I will, if there's a recommendation that I've heard that somebody said, oh yeah, you should try them out.

Michael: 43:12 They, they do well, they can help clients who X, Y and Z. I assumed the position, I act like I am my client. I make that call. I'm listening to the tone of their voice. I'm listening. Whether they're speaking to me like I'm a human being or whether they're speaking down to me as if I'm the authority and you don't want to hear me and you just need to do what I'm telling you. Sweetheart, honey. Right? Or if I call air, are they going to transfer me this person and that person or whatever it may be. I go through the process. I've gone to a title pawn shop and acted like I needed a title pawn. Like I want to experience what my clients are experiencing because of the client comes to me and says that, really?

Michael: 43:58 Well, it wouldn't make sense because in my position in the office that I sit in the title that I have, the relationships that I have with my community, nobody would treat me that way and it's very difficult to get to that place. But you have to be intentional about getting to that place and you have to have enough conversations, and I say this all the time, when you speak with individuals who are sharing their story, you have to be able to differentiate between story. You have to know that there's something called story, truth and story is being able to listen to the story in such a way to where you're being. You're able to tease out what an individual is saying so that you can ask clarifying questions. Be always able say, you know it's interesting that you said this, are you meaning this by that?

Michael: 44:45 And they'll say, yeah, absolutely. But they're speaking in stories and sometimes when working with clients, some people can be very direct and matter of fact and get straight to the point. But oftentimes when we work with the clients, we have to listen very closely to their stories and be able to tease out the truth from their stories and not think that it was a waste of time. That's just a different way of thinking. So that empathy part, if you just navigate the path of empathy, it changes the way that you hear and if it changes the way that you hear, then it changes the way that you listen. If it changes the way you listen to changes the way you think. If it changes the way you think, it changes the way you ask questions and if you start asking different questions, you start getting a different solutions and is just a natural byproduct of the process.

Michael: 45:33 Some people have the time for it or they don't think they have the time for it, but I would argue that in the grand scheme of the things, 15 minutes, 20 minutes of actually listening to a story is worth more again than trying to chase a client down, sending tons of emails, calling them saying that I'm going to do it and they never do it. When you could have done that on the front end and created a recommendation that takes into consideration what you heard, they feel listened to, you created a strategy for it and you're able to confirm, well, based on everything that I heard I want us to get here. But do you think, do you feel confident that she had the capacity to execute it this way? Or will another way to be a better way to execute it based on what I heard from you. But this is a recommendation that I've made for you taking a consideration. What I did hear, you let me know if you think that this is something that you feel confident that you can do and that's just a very different conversation. And if we're professionals, we owe that to our clients.

Rianka: 46:31 This is funny. This is, this is also what I do with my clients when they share kind of like a story that you just shared with me, I always, you know, give it back to them and say, well this is what I heard. And then I go, go through it with them and I say, did I miss anything?

New Speaker: 46:46 Absolutely.

Rianka: 46:46 And basically what I am sharing with them is I heard you and I'm reflecting back and did I miss anything? And if I did, they will let me know like, yeah, this part right here. And I'm like, awesome. Let, let, let me jot that down. You know, and, and it goes back to what you were mentioning as far as like the solutions, when we provide solutions and, and when it's something that you mentioned in order to create solutions, it has to be rooted in that individual.

Rianka: 47:19 And I think you so eloquently explained that to us right then and there. So thank you so much. This has been a very, again, see I told you that 11 minute Ted talk right there, we were able to pull out so much meaning behind it. So again, I'm going to share that, that link on, in the show notes. So listeners, make sure you, you check it out. I believe I cut you off when, when you were sharing with how we can help, when I heard you say is that, we can listen to, you know, watch the Ted talk, share it, uh, not only share it but speak about it with, within our circles. Most importantly, outside of our circle, start to engage with people that we would normally, that's normally not in our social circles so that we can hear from them. Is there other ways that we can help you in this quest of providing us with more information on how we can be better financial planners through learning social capital?

Michael: 48:22 Yeah, I think honestly, Rianka you're, doing great work. And I, and I feel that we are our best when we work together, honestly. And there are so many people that that need to be served. And one of the things, so in helping me, it's just finding the capacity and the space to sew in and to give back, to communities that may not be able to afford our services. It doesn't mean that you have to completely do away with your business model where I'm not suggesting that at all. But I think that we collectively as an industry can do better and be more intentional about thinking about us as a profession and, and, genuinely doing any and everything that we can to either support nonprofits or organizations that are doing the groundwork to promote financial wellbeing. Because that household that you help then provides opportunities for that child to grow up and maybe a better neighborhood, better school system that then goes off to college and has this amazing career that ultimately becomes a client like this. The system always helps us, whether it's now or whether it's later and, and just doing more in terms of wherever you are right now, a sowing into your communities, sowing into communities that you don't regularly serve or haven't thought to serve and don't think that you can serve and just making a good faith effort there. I mean, helping me is helping us at the end of the day. So it's absolutely,

Rianka: 49:57 Amen, Michael. Amen.

Michael: 50:00 But I really do believe that though there's enough work to go around for everybody. There's enough work to go around. But by helping everybody, we create more work for ourselves. It's not a, it's not a, I just can't operate in life with a mentality, anything other than abundance, because I feel that there's enough to go around. So I'll just leave that there.

Rianka: 50:26 I don't know if actually going to happen, but maybe we can, we can make this happen here, but you know, currently there are, you know, I mean, we can count them because we know how many CFPs there are. But as far as certified financial planners, about 83,000 a certified financial planners, and let's just round numbers. Let's say 80,000 and we volunteer just five hours of our time per year. That's a little over one hour a quarter. We can have over 400,000 hours of, of serving people, communities that is often overlooked. And so it's, it's a challenge that I have for all of the listeners who are in a capacity of a CFP or have a financial coach or a financial planner to volunteer at least five hours of your time a year and it's going to come back to you tenfold. Michael, before I let you go.

Michael: 51:30 Can I ask you something really quickly?

Rianka: 51:30 Absolutely.

Michael: 51:31 When we say volunteer, I just don't mean disseminating information.

Rianka: 51:35 Mm hmm.

Michael: 51:36 I mean developing relationship, creating trust. And if the first five hours this year is a trust relationship initiative, that means that we're laying fertile ground. So that next year or whenever we decide to go out and do more, that then we can really engage in a way with people who trust us and believe in us and the work that we're doing and why we're there to serve their community for no other reason except for to be a service to them and to see them have stronger community, have stronger, family dynamics, relationship with spouses and children. All that's a byproduct of financial stability. So serving doesn't necessarily mean giving information, especially if we understand our community and there's already mistrust. So serving could be, how can we generate trust so that we can create the space so that those communities will eventually listen.

Rianka: 52:27 You know what, Michael, I think we are coming up with I first 2050 TrailBlazers challenge slash pledge for all of the CFPs listening for all of the financial coaches listening for a 20, I don't know, should we do 2019 or 2020? Like what? What, what do you think that the remaining of the year, let's try to get 400,000 volunteer hours.

Michael: 52:51 Let's do this. So 2020 and that would give everybody enough time to go back and listen to all the episodes, from 2050 TrailBlazers, starting from episode, from season one so that they can get primed and ready and feel like they have the tools. They could go listen to the Ted talk, and then tool up and not just jump in. Because when you, when you start learning more, you start realizing where your gaps are because you might not be equipped yet to just jump in. So spend some time this year to say, you know what? I have gaps, what are they? And then kind of figuring out what those are and tool up in those areas so that you can bring optimal value. Just like we would want our clients to have a optimal financial, recommendation. What we need to be able to bring optimal value. And the only way that we can do that is to be honest with ourselves and recognize that we have gaps. But then more importantly, just like with our clients, we can fill those grow and be better. We aren't fixed and our clients aren't fixed.

Rianka: 53:54 Yes, yes. And yet, Michael, I feel like I can legit talk to you for a couple more hours. We could do this all day. Oh my gosh. And I love that. What you just said, tool up, not jump in. Sometimes we have to step back and tool up before you jump in. Woo. Okay. All right. Now let's, let's figure out our gaps for 2019 for the rest of the year. Just like Michael said, I didn't say it Michael said it. He said, listen to all of you know, the 2050 TrailBlazers' episode. Let's watch his Ted talk about, you know, 50 times. Let's get those views up. Yeah. Right. And let's, for 2020, let's have that vision of not disseminating information but building relationships and in communities that we would normally not built relationships in. And then once we have a trusted relationship and we build trust, then we can provide actual solutions that is specifically for that individual, not general knowledge that we've learned in school. So Michael, before I let you go, is there anything else that you would like to share with us?

Michael: 55:05 Yeah, if you all enjoyed the, the content, you can definitely follow me on Instagram. And that's at modom solutions. M o d o m solutions and Modem sense for money and wisdom that comes from a scripture in the Bible, that, money can get you almost anything, but wisdom can save your wisdom, can only say wisdom can save your life. So I think that connecting the two is incredibly important. And again, just continue to do the amazing work that you all are doing. I really appreciate all the financial planners that are out there and those who are specially listening and supporting Rianka. So just keep doing this, keep learning, keep growing, and let's be the profession that our country, our households our families need. And I think we're working in that direction, but I think that there's so much more that we can do and that's not speaking negatively about it. It's just saying that we can grow. And I believe that there's a lot of great work ahead of us. So

Rianka: 56:00 thank you so much, Michael. That is hashtag facts. Thank you Michael so much for joining me.

Michael: 56:08 Thank you, Rianka. I really appreciate you and you are doing some amazing work and, don't get discouraged. Stay focused on why you're doing this no matter what. And you're going to do some amazing stuff. So I'm excited for you and you'll be in my prayers as well.

Rianka: 56:21 I appreciate that.