Understanding Client Spending w/ Erik Baskin

In this episode of Elementality Jordan Haines talks with Erik Baskin, founder of Baskin Financial, about client spending. After discussing Erik’s journey into financial services and why experimenting has brought him explosive growth, they discuss how to incorporate budgeting and spending tracking into his process.


Erik Baskin: I think more people than not should be using a budgeting tool, whether spending is a problem or not. Um, I think even for clients, many of us have that do live in abundance. They spend way less than they make.

Um, I think being intentional with their money, right. Being good stewards of their money, knowing where it goes. I think all of that is valuable. Um, and if we can play a part in adding that value and that insight, uh, I think that just enhances our relationship with the client.

Jordan Haines: Welcome to Ella mentality. 

I’m Jordan Hanes, financial vitals expert here at elements and your host for today’s show. 

Yesterday. I had the privilege of co-hosting a joint webinar with Monarch money for our users. 

Now many of you who are longtime followers developments know that we have built an amazing scorecard that gives advisors the ability to diagnose. And understand how financially healthy someone is. One of the elements on that scorecard is called burn rate. Burn rate is calculated by taking someone’s spending and dividing it by their annual income. 

It [00:01:00] tells us what percentage of someone’s income is going towards spending. Now, this number is a very high level diagnostic of how someone is doing in their spending. And in many situations, it warrants a deeper dive. And for situations in which a deeper dive is needed. A tool like Monarch money is perfect. So in that webinar, I invited Eric Baskin and another advisor to talk to us about how they use both elements and Monarch money. 

And we spent some time talking about spending why we need to get it. What are the best ways to get that spending number and how to help. Uh, advisers just get started. So today I actually invited Eric to spend a little bit of time with me. Um, and, and introduce us to his firm as well as 

talk and spend a lot of time here during most of our conversation, talking about spending 

in particular, why spending is so important to get, but also how to sequence the data gathering in the right way for prospects and clients. To make sure that we’re not overburdening people as it gets started. So let’s start by learning more [00:02:00] about Eric.

As we started talking, I asked Eric to share with me how he got into financial services for the first time. Eric has an interesting story arc in that he didn’t really learn and go through the traditional method that many of us do to start and launch his financial planning practice. In fact, he started his career as a hospital administrator in the air force.

And as he concluded his service in the air force. He began thinking what his next career stage would be. He knew that he wanted to start a business because he loved business. And he needed to figure out what type of business. he wanted to start.

Erik Baskin: I honestly started from a business center lens for me. I wanted to own a business. Okay. What business is that going to be? What am I interested in? What will people pay me for? Um, you know, what am what am I naturally good at for all for that?

For me, that’s been personal finance my whole life. Um, so that’s kind of how I landed on Okay. What does it look like to start a personal finance business? Well, being an advisor is just like working from Morgan Stanley, right? That’s like the only way to do it. Oh, no. There’s this whole XYPN movement and [00:03:00] starting your own RIA.

Um, so when I stumbled upon that, I was like, oh, this is, and the CFP, um, that, that side of things is, is super interesting to me. I just, I love. The personal side of finance and working with families and individuals in the, in the personal finance. I’m not that interested in corporate finance. I don’t want to analyze stocks, companies.

Um, I, I really love the personal side. So when I stumbled upon X, Y, P N CFP, it was a no brainer for me. And it’s, it’s, uh, it’s been awesome to me ever since.

As Eric told me the story of how he got started in financial services. I couldn’t help. But think about when I was just starting out in this industry and hearing from many industry thought leaders. About the length of time. Someone like me should take someone that’s just starting out to launch their own financial planning firm. It wasn’t uncommon for me to hear, you know, you have to work for 10 years to learn the business, to learn how to work with clients before you ever decide to launch your firm. Now Eric decided to take a different path. 

In fact, he decided to launch his firm right away without [00:04:00] having any financial planning experience. 

So I asked him. What gave him the right to launch a financial planning business without having no experience in financial services.

Erik Baskin: For me early on. You know, when you come into this, this industry with no quote unquote experience, I’d already passed CFP exam.

Sure. I’ve studied personal finance. Um, as most people have, they get into this industry. Um, I I’ve kind of always looked at it through the lens of like, I know I’m not going to be, I’m not the best player in the world right now. And I’m certainly not the best planner, uh, as good of a planner as I will be in five years, 10 years, 20 years, not even close.

But if I’m doing the right thing for clients, um, I’m I’m fee only, right? I’m, I’m, I’m definitely sitting on their side of the table. Um, I, I truly think I’m going to be giving better advice than, uh, a lot of the quote unquote advisors in the industry, um, so I don’t know when I look at it from that lens, that’s kind of always been, um, my crutch, especially early on when you have no, not a lot of experience, you know, [00:05:00] that is what I kind of leaned on is like, I know I’m doing the right thing for clients.

Um, I don’t have all the knowledge in the world. I’m not Michael Kitsis. Um, but, but I know I’m doing the right thing. So that’s, that’s kind of how I’ve kind of framed that, especially starting out early on.

Jordan Haines: After talking with Eric about his journey into the industry. I asked him some questions about his firm 

and that’s what I want to pick up our conversation. 

Eric starts by talking about his young firm and how he’s experienced some rapid growth over the last couple of months. And then we go directly into talking about spending 

and the value of approaching a client in a sequenced and organic fashion to get their spending data in order to provide meaningful advice. If you’re an advisor. That is looking for ways that they can simplify their client activation process. Meaning prospecting new clients or adding new clients to your firm. 

Then this is a great episode for you. 

So tell me about, tell me about basket financial. What is, what does it look like right now? So who are the type of people you serve? Give me like the 30, 000 foot view of the firm.

Erik Baskin: Yeah, absolutely. So, [00:06:00] um, serving 31 client households right now. Um, pretty much all ongoing planning and investment management, um,

Jordan Haines: many of those did

Erik Baskin: couple of one offs.

Jordan Haines: Yeah, sorry. I cut you off. How many of those

Erik Baskin: No, no, please.

Jordan Haines: you get in part time versus when you’ve jumped in full time?

Erik Baskin: Yeah. Um, I probably got 15, uh, 15, 17 of those maybe part time and the rest were in the last eight months or so. So it’s been.

Jordan Haines: So you’ve doubled in the last eight months.

Erik Baskin: probably, and the revenue has been much more, much more than has been more than double. They’ve been greater in magnitude.

Jordan Haines: What are you doing that that’s working so well? Give us the secret sauce,

Erik Baskin: I don’t, I don’t think there is any, I think there’s just a lot of compounding at work. I don’t sit still. Well, I do lots of things. So when you don’t have lots of clients, you try all the marketing things all at once. And then if you do them for long enough, uh, they, they definitely start working. So, you know, I’ve got, I’ve been posting on social media, blogs.

I started a podcast last summer. [00:07:00] Uh, you know, I’ve been posting something in the social ethers for 18 to 24 months. Um, I think there’s just a level of compounding and people realizing, again, Michael Kitts, as I go back to him, I listened to every, you know, all the podcasts he puts out, but eventually people just need to see that you’re going to be around in, in business and you’re not just going to.

Burnout like, uh, 90 percent of the other advisors. There’s, there’s just a lot of these things going on that compound. I would say, you know, also definitely owning a niche. When I started out, it was, it was, I do financial planning investment management for, you know, high net worth people, uh, income, high income Henry’s and business centers and retirees and women too.

Right. Um, and then it’s like, And then you get into, okay, who am I? I’m a veteran. Um, okay. I could probably work best with those that are in the military or veteran space. I’m also, like I told you, I started this as a business owner first. So for me, working with business owners is a pretty natural fit. Um, so that’s kind of like, kind of answer your original question, what the practice, uh, looks like now it’s, it’s bringing in, uh, people that are in that, [00:08:00] uh, high income military family or, or they’re veterans.

Uh, maybe they do some time in the reserve still. Um, maybe they have a side business spouse as a business, um, or their business owners. That’s kind of the, the realm that I’m operating in at this point.

Jordan Haines: man. One of the reasons I want to, I want to pull a few threads there and comment on some of that. I think there’s a few things I really like about this. One is there’s a personal relevance in your life, right? You speak their language. I, um, there’s probably acronyms and I’ve seen acronyms. You have some on your, uh, on your wall that are used in the arm services that, you know, well, right.

You know, the life of a business, you have the mindset of a business owner. So there’s a few things I really like about this. Number one, functionally. Right. When, when selecting your niche functionally, it makes sense. There’s probably certain retirement plans and certain financial topics and questions that people have unique to this subset of clients.

But then you have this emotional niche as well, right? I’m not a business owner right now. You know, I, I love the world of business owners. I [00:09:00] love talking business. Like a business owner is the mindset that I want to be in. I’m not willing to take the risk of being a business owner personally in my life right now, but I love that world.

And so I think what’s interesting here is you have this functional niche of like, Hey, look, I know military veteran. I know these unique parts of doing that. I also know the mindset of a business owner, and I can blend the emotional and the functional side of that to really speak to you. And what’s important to you.

So anyway, I just wanted to double click on that. I think that’s really important to acknowledge for those of you thinking about selecting an itch. In my experience, it has to be both. It can’t just be functional. It has to be an emotional part. They have to resonate with the things that you’re saying, both on a functional level and on an emotional level.

And I think that’s really important. Any comments you’d make on that? Yeah.

Erik Baskin: by saying, I think ultimately. At least for me, um, I, I think the saying of like, you are your best avatar, like that, I don’t, that really rings true for me. I, again, I’m a, I’m a veteran business owner. Right. Started a bit. I couldn’t do the nine to five. I couldn’t do the military life for 20 years.

I had to start a business. I was just itching. Right. So I’m [00:10:00] going to work best with that person because I’m like, man, I get you. I’ve been there. Let me take you from A to B. I’ve been from A to B. So I think that again, that’s so much deeper than, yeah, I know what a TSP is and I know what it looks like to get out of the military.

We got to get you insured. I know all these things. Sure. That’s a boring CFP stuff. I think the deeper, like emotional, um, jobs, if you will, and I know you’re going to talk about jobs to be done, but those deeper emotional connections are what makes me, I think, a better

Jordan Haines: Yeah. I often tell people that when, when selecting a niche, take up, take my advice with a grain of salt too. Right. Like I’ve worked in niche focus firms, but I haven’t built this before, but I think that one of the things personally in my own life, when I’m looking for a service for something, what do I identify as when I’m doing a Google search? Right. Like if I’m going to look for a financial advisor, am I going to look for financial advisor in CUNA, Idaho, or am I going to look for financial advisor for young entrepreneur? [00:11:00] Or am I going to look financial advisor for young? Family. Right. So I think like, what, how do your people identify, how are they going to search?

And that lets you then speak their language because I think you’re right. Right. Like, how do I find a financial advisor for someone that has a TSP? I doubt that’s where most people are at. Like, yes, it’s a functional job they want, but they’re probably like, how do I find a financial advisor that works with military veterans or air force veterans or air force veterans that want to own a business that’s very interesting.

And how do I identify as that? So blending the emotional, functional thing. That’s awesome

I want to shift gears here a little bit. Um, Eric, this is a very impromptu recording. Uh, those of you listening to this today are going to find out that I, we recorded yesterday. So we’re recording this on Wednesday in the afternoon after Eric and I did a webinar internally for elements, uh, users with a cool tool that both you and I use called Monarch money. Eric, tell us just at a high level. I know I don’t have anyone from Monarch money here. What is Monarch money? Some of the advisors might [00:12:00] listeners might have heard it before. Just give us a high level. What is Monarch money? And we’ll, and then I want to jump in from there.

Erik Baskin: Yeah, Monarch money, uh, is a platform to, uh, track cash flows. Uh, that’s, that’s the best way to describe it in a really beautiful, uh, design way. So a lot of people are familiar with mint or will be from, or are familiar. Uh, rocket money is another one. What YNAB is another tool. This is a budgeting app, budgeting tool, um, or, or cashflow, if you will, uh, that we can use with our clients.

Cause they have an advisor facing side. Uh, and, It just does a really good job of like in the accounts, we can budget. We can be really flexible with our reporting. Um, clients have been blown away by it so far. And advisors, advisors have too, that I’ve talked to.

Jordan Haines: Yeah. So, so we did this for context. We recorded this webinar because, um, those of you who have listened to elementality for a while, or just tuning in and want to go to our website, you can look up what we are. I mean, we’re simply a financial vitals tool. Right. So when you think of going to the doctor or getting, [00:13:00] going to any sort of medical professional, they’ll start by measuring basic vital signs and then they’ll diagnose and they’ll decide where they need to do more.

Right. Our profession up until now has been like you go to the doctor and before they ever talk to you, they require you to do a blood test, right? Like if you’re going to present needles to me right away, good luck. I’m never going to a doctor again, but, but, uh, what we’re trying to do in our industry is insert maybe some questions.

Some respiratory rate, some blood pressure, something like that, but financially. So how do we view someone’s financial situation at a high level so that we can diagnose and say, this is where you’re at today. And where do we need to focus our time? And one of the things that we talked about and we focused on in that conversation was how do we know first and foremost, when we actually need to focus on spending for people?

What, in my experience, talking with especially younger advisors or advisors that work with younger clients or older advisors that want to start pivoting to working with younger clients. One of the most common topics I hear people say is. Oh, well, I need to have, uh, an ability to track transaction data and really do like cashflow monitoring and budgeting with them.[00:14:00] 

Now my natural skepticism says, I don’t know if that’s actually what people want. So what I want to start this conversation off, um, Eric, and we talked about this a little bit in the webinar that we did. Um, at what point, how do you know if you need to do transaction budgeting type of stuff with someone like Monarch money?

Erik Baskin: Yeah, I think you have to start by asking the client. Um, you certainly asking them, we’re spending, we do that in elements where we start all clients, um, but then asking them like. 

I usually pose the question, the first discovery call, you know, what, how do you guys track your spending? Have you ever tracked your spending?

How do we know what you’re spending? And their answer, you know, I think if it’s, Oh, we’ve never done 

that. That’s a really good idea. We should start doing that. That’s, that’s like half the people, right? So I think that’s easy. Okay. Let’s get you hooked up to monitor. Um, other people are like, no, I’ve got this, I’ve had this spreadsheet for like eight years.

So, you know, that person is giving you a very, very. Detailed number, and I probably don’t need to force them into Monarch. And then there’s kind of in between. It’s like people that, uh, you know, [00:15:00] we’ve, we’ve tried tracking before and we don’t like it. Or, um, you know, it’s, I can see what the data, maybe there’s some overspending, um, where I’m going to kind of force it on them.

Like, Hey, I think we should use this tool. Let’s just try it out. If you like it, we can use it on an ongoing basis. 

So I think. 

I think more people than not should be using a budgeting tool, whether spending is a problem or not. Um, I think even for clients, many of us have that do live in abundance. They spend way less than they make.

Um, I think being intentional with their money, right. Being good stewards of their money, knowing where it goes. I think all of that is valuable. Um, and if we can play a part in adding that value and that insight, uh, I think that just enhances our relationship with the client. 

Jordan Haines: Yeah. I think I’d agree with that. And what’s interesting is, um, there was another advisor we had on the call. I’m not, I won’t name names and he was great and fantastic. I asked him to join us today, but he was busy, unfortunately. So I can’t let him speak for himself, but he actually approaches it where every client, every single client that comes in is going to use this budgeting tool.

Because he wants to [00:16:00] track transaction and that’s really important. And as part of his value proposition, I think that’s fantastic. Right? Like if that really is core, like, are you a wide steward? Why steward of your money? Are you doing the right things? Are you living your life with integrity? That’s fantastic.

But I think what, what you’ve articulated to me is, you know, functionally, maybe not every client needs this. I’ll be honest, Eric. If I went to an advisor and they told me to start tracking my budgeting. I would walk the other way, but that’s because I, like, as you know, you and I were talking before this, I’m not a naturally tenacious person doing things with consistency is very difficult for me.

So my style of budgeting is I’ve set up a infrastructure around my life that forces me to live inside my bounds. Also enables me not to have to track everything and be aware all the time. And it’s not because I think that’s bad. It’s just because I know my personality well enough. And I think what you’re saying is some, some clients, like if you got me, I’d probably have a pretty decent burn rate.

And you would say, Hey, this is great. Are you saving the right amount? Are you doing the right things? Okay. If you’re not fine, we don’t need to track or do anything, but for those clients that maybe we want to focus as part of our core value [00:17:00] proposition, that’s what we’re going to do it for. Even if your burn rate is great.

Um, or for the clients that we see an issue, your spending is very high. Those are the ones that we want to go into, or we just don’t trust the data that you’ve been giving us. Those are the people we need to spend to any comments you’d make on that. Do you feel like I’m capturing kind of what you’re thinking?

Erik Baskin: no, I think, I think that’s pretty accurate. I, you know, I think in my perfect optimizer brain world, um, every client would be on Monarch and we’d have everything all dialed in, but I, you know, in the real world, we’re. Where clients, their ages vary their, their tech, uh, fatigue, if you will, varies. So I think that’s something as an advisor, you have to have a close pulse on is a client having a hard time linking their accounts to elements.

Um, well then I don’t know that I’m going to introduce another piece of tech into that solution, or is this client like they’re up on elements day one, they’ve got it on their phone or, you know, they’re in there, I hate to throw an age at that. That client, but maybe they’re younger, they’re more tech savvy.

So I think those things are those, you know, psychographics of that [00:18:00] client are also important to consider when you’re considering introducing more tech, whether it’s, Hey, we’re going to do monarchy and write capital and elements. And right. You gotta be, you gotta be mindful of how many things you’re going to ask your client to do, uh, to get the job done.

Jordan Haines: So we didn’t go this direction in the webinar, but I’d love to explore it with you here.

Erik Baskin: Hmm.

Jordan Haines: Elements is a kind of the sweet spot of what I call client activation. What do I mean by that? Um, those of you who listened to the episode I did with Abby a few weeks back where we talked about time to value, um, client, we’ll probably remember this client activation really is just our way of saying, what does it take to get someone started?

For the first time with us, right? Whether that’s in prospecting, marketing, new client onboarding, we want them to do something and how do we get them to do it? So I made the reference earlier to like a blood test. If I had to go to a doctor and the very first thing they asked me to do as a blood test, I would probably never go to a doctor [00:19:00] because it’s too scary for me.

And I hate needles and I’m like, why, why do I need to do this? Can we do other things before we do this? The medical industry has actually done a really good job at sequencing the type of things they ask us to do. Right. And in some cases you can push back and you can do like I could, anyway, we’d have to get into that.

I wonder with financial advisors, especially the younger advisors that really want to focus on doing spending for everyone haven’t thought about that sequencing there. Right. So let’s take client activation. Let’s take the different stages of it in marketing or in prospecting. Do you, when it comes to spending, spending is an important number.

How do you treat gathering that spending number? Are you asking them to do budgeting? Are you even asking for a spending number? Talk to me about that. What do you think about like prospecting and marketing when it comes to spending?

Erik Baskin: Hmm. That’s interesting. So are you saying in the prospect process, maybe your intro call, your, your secondary call, like, are you saying how do I treat spending? How do we

Jordan Haines: Yeah. At what point, at what point is it appropriate first to even ask about spending? That’s I want your opinion on that. [00:20:00] When, when is it appropriate for me to even bring it up?

Erik Baskin: Yeah. I w I will typically ask in that very first call. Um, I very much follow the Carl Richards, uh, Advice of, you know, asking what they own, what they owe, you know, their income and their expenses. I really have like four bullets that I’m going, trying to hit on that call. I want to get their, their balance sheet nailed down and I want to get how much they make and what are they spending and how are they tracking that spending?

So I will, I will ask in that first call, just cause I’m curious and it does give me insight into, you know, okay, we know you’re making 200, 300, whatever that is, um, you know, what, what are we spending? Cause I think that gives. That gives some insights into, Oh, we don’t really know. There’s a, there’s a couple of grand a month.

We’re not sure where it’s going or we have excess. We’re, we’re underspending where our burn rate’s low. So I think it starts to give you some insight about that prospect, but also give you some potential strategies that we can maybe bring up to them that, that we could add value if they do become a client.

Jordan Haines: How do you feel about that spending number? My devil’s advocate is, uh, red flags are coming up and I’m saying, well, that number is going to [00:21:00] be wrong. How can you justify asking someone what they spend? Yeah. And relying on that to give any sort of feedback or advice to them.

Erik Baskin: Yeah. It’s a good, it’s a, it’s a good question. Um, I mean, it probably is wrong. It’s probably low. Um, I, I would say. Uh, applying a lens of maybe assuming it’s 15% low, um, you know, inflating that number. Maybe, maybe in your, if you’re doing some napkin math, maybe is how I’d, how I’d treat that. Um, but I think it is important to ask, not so much for the specific number, and we’re just gonna do, uh, really hard calculations right now.

But, but I think more so like, do they even know the number? Do they know what that might be? Um, again, getting insight into, is this the, is this the prospect that’s coming to me with, uh, the spreadsheet they’ve kept for 10 years, they’re an engineer, uh, just talked to a couple of engineers yesterday. It’s a very different prospect call than the person that, uh, is like, all right, money comes in and goes out.

And I don’t really know. I need help with that. I think that that gives you insight into [00:22:00] what kind of prospect this is. And maybe if it’s a good fit for your firm. Um, I, that’s why I think that that spending number is important to ask about not so much for that finite number, but the broader, what, what it’s giving you about that prospect.

Jordan Haines: Yeah. So what, if I were to reflect back to you, what I’m hearing is you’re not discounting the importance of an accurate spending number as much as you’re sequencing it in the right way. You’re saying, Hey,

Erik Baskin: Yeah,

Jordan Haines: It’s good enough for me to engage the client and activate them in a way. And I think that’s kind of the point I’m, I’m getting at here too, that I think as advisors, we have this really binary client activation process.

It’s like, we have nothing and then we have everything and there’s no in between and we’re not accepting of any in between. Right? Like I will not give you a financial plan until you’ve given me everything. And Carl Richards talks about this a lot. And I think what you’re doing is saying, okay, well, I need something.

I just need something. I don’t need everything. I need something. And that something is what do you own? What do you owe? What are you making every year? How much do you spend? Now you approach that knowing full well, that it’s [00:23:00] probably not perfectly accurate and that if they continue to work with you, you’ll work on getting an accurate number because some point.

You’re going to ask them to track their data, get very detailed transaction data, and that’s valuable. But initially. One number is important enough and, and let me, let me, I’m going to put words in your mouth here and I want you to tell me if I’m wrong. I think the reason that you’re okay with that is because earlier you mentioned like when, when you’re using Monarch money with someone and you’re doing detailed cashflow and budgeting, psychographics is a really important part, and I like that word psychographics.

It’s hard to understand what someone’s psychographic is. Unless you ask them a question like that up front. So like you alluded to, do they have a spreadsheet that they track everything in detailed? Um, are they like me? And I’m like, I don’t know, like this number and this number. I’d have to go ask my accountant, right?

Like, what are, what is that number? What is that process of asking them that question, telling us about that client and where they’re at? So that when we follow it up, we now know how we’re actually going to approach them. Am I wrong there? Tell me if I’m off in that.[00:24:00] 

Erik Baskin: no, you’re right. A hundred percent. It’s a, it’s a simple question that the client doesn’t really, or the prospect doesn’t really understand, doesn’t really know, you know, the deeper why behind maybe why you’re asking that they just think, oh, this is part of the process. But the way you answer that question is, is very telling to, to the advisor.

Definitely. That definitely tells you a lot about the psychographics of how they’re managing their spending or their finances in general. Um, and then the second prong to that psychographics, uh, term is really like in this context of spending and using Monarch or other tools is, is, you know, how tech savvy are they?

And do they, you know, can we introduce another tool? Is this too much? So that’s the other prong I’m always looking for.

Jordan Haines: Yeah. So do you ask them, like, I think you mentioned this earlier, they’ll give you that number. Are you asking them where they get that from? Like, do you, are you tracking data? Where’s this coming from? Is that how you’re kind of arriving at that?

Erik Baskin: Yeah, I’ll casually ask that. Um, I, I, again, on that prospect [00:25:00] call, I, I’m probably not digging too deep into that number. Uh, I’m, I’m curious how they, how they came to it. Uh, more from the qualitative aspect. I want to know a little bit more about them, but, but I, we’re probably not going too deep into that.

So, but it is interesting. Some prospects will, they’ll be like, Oh yeah, mortgage is 2359 a month. And we spend 1200 a month on groceries and our HOA is this. It’s like, I’m like, okay, stop, stop, stop. Let’s move on. We only have 30 minutes. So, but it is interesting who will open that up to you and who won’t.

Jordan Haines: Yeah. Well, and I think, I think the re one of the things that feels really refreshing about this is that. Eric, cause I talked to a lot of advisors who were like, the minute I say, just ask for a spending number. It’s almost like, no, a wall comes up there. Why would I know consideration? Why would I even like knowing full well, and I need to acknowledge here, I think Eric, you’d probably agree with me to those listening. you ask someone what their spending is, it’s going to be wrong. It is, it’s just going to be wrong every time, 10 times out of 10. [00:26:00] I’m a hundred percent confident. Every person you ask what they’re spending is it’s going to be wrong, but you’ve kind of come at this with some level of knowing what is the job to be done in this conversation.

So when I’m having that first conversation with them, I just need to know enough to frame and orient them to their finances in a way that’s meaningful and valuable to them. And even to the point where like, if they start to get into it, you’re kind of like, Hey, I got a 30 minute conversation. Let’s get to the meat of this.

That’s a distraction. Let’s get to the meat. What’s the most important thing that I need to sequence at this point? We’ll do the rest later. We’re not saying that that’s bad. We’re just saying right now we need to focus on the things that matter. Would you agree with that?

Erik Baskin: Yeah, no, absolutely. And I, and I think how I’m using that. Uh, you know, I’ll typically ask them how much they make and you can do some quick head math and say, Oh, so you’re taking home 10 grand a month. And how much are you spending on that? Like you can usually do a pretty quick calculation of what that take home income is.

And then for an accumulator, I guess, like in financial planning context, that Calculation is important because for an accumulator, we know, okay, what, what’s that [00:27:00] Delta, what do we have left over at the end of each month or not leftover, uh, to save, right. To give to charity, to spend, you know, whatever that is.

And then for that pre retiree retiree, that number, that spending number is also super important because, okay, we’ve got a million dollar portfolio. We’ve got a 1. 5. I need that spending number to understand. Okay. Is retirement, uh, realistic? How much could we retire on? How soon could we retire? So depending on, I guess, the age of the person and the stage of life you’re talking to, I think that spending number, uh, is important in different ways.

Jordan Haines: Yeah. And it gives context, right? Like this is not a binary process. I think if, if there’s one takeaway, I’d want those listening to this to take away from this. It’s, um, when you. Are trying to activate people to take action, to follow your services, to be sold what you do, or even just asking existing clients to do something for you.

If you can sequence it in the right way, where you’re not requiring too much upfront and you’re giving them reasons and helping them understand with some level of certainty, what they will get, if they [00:28:00] keep going, it’s going to, it’s going to be so helpful for you. Right. Again, I’m going to bring this back to medicine, right?

How many times you go to the doctor where they measure a few basic things. They ask you a few questions and they come into the room and they say, I don’t know what the issue might be. And I need more information to do this. And here’s the test that we’re going to run to do that. My confidence in that doctor is going to go up a little bit more because I feel like they’re, they’re talking about the relevant things.

They’re not just kind of like scattershot doing all of it, hoping that they’ll be able to find something wrong. That’s the last thing I want. I want focused. Sequenced advice. And I think what this enables you to do is be sequenced so that when you get to the point where you. You’ve seen, they’ve got a spreadsheet.

They’re already tracking their data. The number that they gave me is super precise. Well, I might, I might have some degree of skepticism that that’s the right number. It’s probably close enough. It’s probably close enough that I can rely. I can rely on that number and I don’t need to do budgeting. So let’s focus on the thing that actually matters to this client, like their debt repayment strategy or their retirement planning strategy or things like that.

And I think this clarifies [00:29:00] it for you, for you to be able to do that. So, um, yeah, Shameless plugged elements right now. I hope this is a great tool to diagnose, right? The number that we asked for, we’re spending, which is appalling to a lot of advisors is just ask them, how much do you spend and clients are going to be wrong and they’re going to get in the ballpark and they’re going to try their best.

And I know that that’s going to be the case. In fact, I encourage them to do that for me. Because all I want to do is get in that conversation to diagnose and say, Hey, Hey, look, this is the thing that we need to focus on. And what are the challenges that you’re experiencing in your life? And where do we need to go together?

And then, and then resume traditional financial planning process, right? Resume that process. And at this point, I guarantee your clients, your prospects are, will have already received a lot of value and be much more willing to provide you the data you need. Right. Like transaction data and things like that.

Anyways, anything you’d like to add with that, Eric?

Erik Baskin: No, I absolutely, I mean, elements for me, it all starts with elements. Um, every client that’s the hub, it’s the [00:30:00] engine that drives my firm and my tech stack. Um, so, so I, I can use elements to get a pretty good spending number, uh, without the client even telling me, which is really interesting, right? Because we can get very good data on their debt.

I know exactly what those debt payments are because they tell me I have the statements actually use Sora. So I can verify that. Um, I can get very good data on their tax return. I have it. I know exactly what they’re paying in taxes. I have their pay stubs. We’re going to ask for those, I can get very good data on their savings rate.

Um, cause we’re making the, we’re making the contributions and altruist and their 401k, I can see it on their pay stub. We know all these things. So I know exactly what they are spending, you know, without them even telling me, which is really interesting. Uh, the other thing I think we can use elements for that advisors.

I haven’t heard of a lot of advisors talk about, but talk about this today is we can pull up that checking account for where. They, they are getting paid and where they spend, maybe they pay their credit card and we can see what’s the balance of that account over the last 30 days, six months, 90 days. And we can kind of see where that is trending.

And that’s [00:31:00] going to tell the story around. You know, how much they’re spending is it, is it exactly what they say it is. Is it more, is it less, um, if cash is piling up, right. We’re, we’re underspending. We need to automate some, some savings to go somewhere. Uh, if cash is dwindling, right. We’re, we’re certainly overspending.

And now Monarch becomes, you know, maybe our biggest focus. Uh, it’s the most important thing for that client, right. Going back to kind of what you said, um, advisors can only do so much. We only have so much, not only so much time to spend with the client. And. You know, we can only ask clients to do so many tasks and focus on so many things.

So for some clients, budgeting and Monarch or budgeting in general, or tracking their cash flows is far and away. The number one thing that they need to be worried about, um, for other clients, you know, clients that are putting away 80 grand a year, they’re spending maybe five grand a month. Um, we’re just trying to figure out where to stuff money.

I’m not that concerned with, with budgeting. I’m, I’m much more concerned about tax optimization. We’re in holistic plan, kind of focusing on that. Um, you know, [00:32:00] we’re, we’re focusing on where are we going to put money? So, so it grows, we’re focusing on investment. So it’s, there’s only so much you can focus on and starting, but starting with that framework of elements is the, is the top level hub, and then we’re going to dive into for each client respectively.

What are, what are those specific elements we need to focus on

Jordan Haines: Man, I love that. So you heard it here first, use something to diagnose at a high level where people at, so you focus on the right things and don’t waste your time focusing on the things that don’t matter to the client. That’s how I would summarize this. So. Those of you listening, if you disagree with us, please let us know.

I’d love to hear about it. Send an email to elementality at get elements. com or go find me on LinkedIn. Cause I don’t care about any other social besides LinkedIn at this point. Go find me Jordan Haynes on LinkedIn. Uh, you can go find Eric and Adam. If you want, I don’t know if he’ll, I kind of, uh, uh, I baited you into this.

So if you got, if you have any qualms, you guys should yell at me. I’m happy to fight you on, on spending. If you disagree, let us know. I want to hear about it. If you have any feedback, let us know. We’d love to hear it. [00:33:00] If you have any questions for Eric, Eric, where do people find you at

Erik Baskin: Yeah, absolutely. Uh, LinkedIn is probably, I guess, most, most active platform, uh, at this, at this point, uh, Eric, you’re IK at baskinfp. com, uh, is my email love, love talking to other advisors. So happy to chat anytime.

Jordan Haines: guys? If you are just starting a firm and you want to see someone testing in real life, Eric’s the guy to do it. Like he’s not afraid to try new things. As he said earlier on in this conversation, he’s trying new things. He’s, and obviously something’s working. He’s doubled his firm, more than doubled his firm in terms of revenue in just eight months.

So. Uh, follow Eric, if nothing else, to just see what kind of marketing stuff he’s doing, because maybe some of them might work for you. Just saying, just saying, anyway, Eric, uh, we’ll probably have you on another time and talk about something that’s controversial too. And, uh, we’ll just, we’ll just corner.

We’ll have you on for all the controversial things so that whenever someone, whenever I say something bad, they blame it on you and not me. How about that?

Erik Baskin: Sounds good. It sounds like a plan to me.

Jordan Haines: all right, everyone, uh, go, if you want to learn more about elements, go to get them on stock, calm, book a [00:34:00] demo. Um, otherwise we look forward to talking to you guys next week. 

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