Why Crypto is Here to Stay
Plus, a conversation with my business partner of 30 years, EFS President Ed Moore
Ric Edelman: It's Friday, February 3rd. I'm really excited that my book, The Truth About Your Future, which I published way back in 2017, meaning I wrote it in 2015 and 2016, just got a new book review. Even though the book's now been out there for six years, the new Pittsburgh Courier just wrote a review and the reviewer wrote, "This book wowed me. What really caught my attention is his breakdown of exponential technology, how technology, science and medicine are evolving at a blistering pace". I'm really excited that six years later, The Truth About Your Future is still getting a lot of attention. And now you know why this podcast is called The Truth about Your Future. One of the subjects in that book, and it was not a very big section of the book, was blockchain and digital assets. Yeah, it wasn't a big section because, hey, back in 2016 when I wrote the book, and in 2017 when I got published, crypto wasn't nearly as big a deal as it is today. But I wrote it and talked about it in the book because my focus is on telling you what's coming next, trying to get on your radar, things that you might not be really paying attention to or even aware of.
Why Crypto Is Here To Stay
Well, now crypto is here to stay. Oh, that's not me saying that. That's Tom Emmer. Tom Emmer is the House Majority Whip. This is the third highest ranking position in the House of Representatives. You've got the Speaker of the House, the House Majority Leader, and then the Majority Whip. Tom Emmer, a member of Congress, just issued a tweet and he said, "Crypto is here to stay. I will keep advocating for policies that advance crypto innovation and adoption in the US because crypto is more than a financial investment. It's about restoring liberty and choice to individuals". Wow. That's brand new coming from Tom Emmer.
Why Political Leaders Are Embracing Crypto
And he's not alone. Kevin McCarthy, the speaker of the House, way back in 2019, he said, "I like Bitcoin. I want the government to start using blockchain". That was in 2019 when Kevin McCarthy was not the Speaker of the House. Well, now he is, and he's in a much stronger position to dictate that the government in fact start using blockchain. So when you have these major political leaders embracing and endorsing this asset class, well, you know, things are coming. So when people ask me, Ric, is the government going to ban Bitcoin? Goodness gracious, no.
In fact, Senator Ted Cruz just introduced a bill in the Senate this past week that would require all the food service vendors in the Capital to accept crypto in payment, including vending machines. Ted Cruz is a long-time huge supporter of crypto. Last year he said that he wants Texas (of course he's from Texas) to be an oasis on planet Earth for Bitcoin and crypto. He has often said that members of Congress need to be more educated about crypto.
And this isn't just a Republican thing. Democrats, too, are highly supportive. Janet Yellen last year called blockchain technology transformative. Maxine Waters, the ranking minority member of the House Financial Services Committee, she said last summer, "We're in a new digital assets space race. America can't be left behind". And Elizabeth Warren last year said, "Let's do a central bank digital currency. Yes, I think it's time".
And not only is it not just a Republican thing or a Democrat thing, it's also not just a US thing. Christine Lagarde, the head of the European Central Bank, she last year said, "My preference is to see a digital euro in place by 2025". That's just two years from now. Lawmakers in the United Kingdom, they just voted to recognize crypto assets as regulated financial instruments and products for the first time in England. Crypto will be treated like all other financial assets. The bill is pending and needs approval by King Charles. Widely expected.
FASB: How to account for their ownership of Bitcoin and other digital assets
Institutions have been reluctant to invest in crypto because, among other things, they don't know what the rules are, particularly the accounting rules. I mean, you and I don't really care about accounting rules. We only care about tax rules. But businesses, corporations, endowments, pension funds, they've all got to account for their investment holdings.
How do you list it on your profit and loss statement if you're a corporation? Well, now comes along the FASB, the Financial Accounting Standards Board. This is the organization that corporations rely on for how they report their income and expenses, profits and losses on their documents. The FASB has just issued rules telling American businesses how to account for their ownership of Bitcoin and other digital assets. This paves the way for businesses to invest in Bitcoin because now the rules of the road are provided.
The IRS simultaneously has also now issued rules clarifying the taxation of NFTs. We've already known for a long time how the tax rules work for Bitcoin, Ethereum, other digital assets. Now we've got rules clarifying NFTs. NFTs - and this is important - are not being categorized as collectibles. That's really good because that was a big open question. The reason people were buying NFTs is that they thought they were buying digital art. Well, art is a collectible. Does that therefore mean that NFTs are collectibles? The IRS now says, no, they are not. That's really good. Not merely because of the clarity, but because collectibles are taxed at a higher tax rate than stocks. If you own a piece of art and you sell it for a profit, the profit is taxed at 28%. But if you sell stock at a profit, those of profits are taxed at no more than 20%.
The fact that the IRS is now saying NFTs are not collectibles is good news for investors. It further encouraging investors to invest in crypto. And I don't know if you've ever heard of a guy named Thomas Fattorusso. He's the special agent in charge of criminal investigations at the IRS office in New York. And he just said crypto is here to stay. He was interviewed by the Wall Street Journal and he says that the IRS wants to partner with the industry to help it fight financial crime. He said, "We can't be hostile to the technology. We have to embrace it. Cryptocurrency is becoming more legitimate and more sophisticated". Wow. For the special agent in charge of criminal investigations for the IRS to be saying that they want to partner with the crypto industry because the crypto industry can actually help the IRS fight fraud, that's a really exciting development.
And again, this is not just a US thing. Interpol has now launched a fully operational metaverse. It's going to be used to provide immersive training courses for forensic investigators. Law enforcement officials from around the world will be able to gather in the metaverse and interact with each other via their avatars. Students are transported into a virtual airport where they can apply their new skills at a virtual border. Clearly governments around the world are recognizing this technology is really cool. It also offers them terrific opportunities to combat crime and fraud.
Despite FTX debacle, investors more likely to invest in crypto
And that takes us back to the FTX fallout, which we're all still dealing with. Has that huge scandal where millions of people lost money, billions of dollars around the world, has that caused you to be more likely or less likely to invest in crypto? According to a new industry survey, the FTX scandal has caused investors to say they are now more likely to invest in crypto. That doesn't seem to make a lot of sense. Shouldn't it be the other way around? You hear about all these scams and frauds and you therefore conclude it's too dangerous, too risky. I'm going to get ripped off. I don't want anything to do with it. No, investors are not saying that. They're saying the opposite. In the survey they were then asked, Why are you saying that? Why are you now more likely to invest as a result of the FTC's scandal? And they said, we know there will now be increased enforcement and that means crypto is going to become safer from frauds. 60% of those surveyed say they're more likely to invest in crypto because of stricter enforcement. And that is the call on Capitol Hill. Everybody's asking the SEC and the CFTC and the IRS and FINRA, where have you been? How did you allow this fraud by Sam Bankman-Fried to occur? You can be sure that these regulators are not going to allow that to happen again. It's kind of like the outgrowth of what happened in the Bernie Madoff scandal.
Three times, SEC examiners looked at Bernie Madoff and three times they failed to recognize the fraud. The SEC was so embarrassed about that. They were committed to making sure that never happened again. And guess what? Ever since Bernie Madoff, it hasn't happened again. We've got new laws on the books that help ensure that that kind of a fraud can't happen again. And so it has made the stock market safer. Bernie Madoff was a horrible thing, but it made the world safer in its discovery. And that's kind of where people think we are with FTX and Sam Bankman-Fried and therefore, they're more willing to invest now because the world has gotten safer, not riskier.
Big Business Blockchain Moves
And so corporations all over the place are engaging. JPMorgan Chase is now expanding its blockchain platform. You didn't even know that they had a blockchain platform, did you? It's called Onyx, and it allows clients to store, view and share their digital assets across platforms, all tied to your digital identity and all in one place. The bank says digital IDs will let you use your credit score to qualify for 'buy now, pay later' loans to prove ownership of your NFTs, and allowing you to create content. Company says they plan to tokenize U.S. Treasury bills so you can use them in collateral in decentralized finance pools.
This is a bunch of jargon for you, isn't it? The point is, if one of the largest banks in the country, frankly, in the world, JPMorgan Chase, has a blockchain platform, they're engaging in digital identity. They're allowing people to buy, sell, trade NFTs. They're going to tokenize the safest investment in the world - US Treasuries, to facilitate the purchase of securities and a defi protocol. This tells you something big is going on. Tyrone Lobban, who is the head of digital assets for JPMorgan, said, "The goal is to bring trillions of dollars into decentralized finance for trading, borrowing and lending with the scale of institutional assets". JPMorgan Chase, of course, is not alone in this.
Mastercard says they're now going to offer a credit card that gives you rewards. You know, you get rewards, cashback, right, when you use your credit card. They're going to start offering a credit card that gives you rewards in Bitcoin. First, coming to the Middle East and Africa.
NFTs go mainstream
Remember IHOP? They've been around since 1958. We all love going to get pancakes. They've now issued edible NFTs. Wait a minute. How do you eat an NFT? Well, we know NFT stands for non-fungible token, right? No, At IHOP, it stands for a New French Toast. So, yeah, they're getting into NFTs without actually doing NFTs. And oh, by the way, they really are doing NFTs, but they're also making them out of French toast, showing that NFTs are now in the American lexicon so pervasively, they can build a product as a joke on the entire thing.
Hey, you remember the movie trilogy, The Lord of the Rings? The first movie was released way back in 2001. Oh, my goodness. That's making me feel pretty old. Now, Warner Brothers is releasing NFTs from the first installment of that trilogy, The Fellowship of the Rings. Each of these NFTs will give you a 4K copy of the film. You get hours of extra footage, tons of photos, plus exclusive collectibles inspired by the movie. Warner Brothers isn't the only one getting into NFTs based on their films. Lionsgate has released NFTs for its horror movies, Saw. Paramount has released NFTs for Star Trek. AMC launched NFTs for Walking Dead. Netflix has done NFTs for Stranger Things. One of the floats in the Rose Parade this year at New Year's was based on NFTs. The International Chess Federation is hosting tournaments in the Metaverse. International Grandmaster Garry Kasparov has launched his own NFT collection.
Bicycle playing cards - they've been around since the 1880s. They're now selling decks of cards based on the NFTs of the Bored Ape Yacht Club. The company bought Bored Ape #1227 for $187,000. This Bored Ape features an ape wearing a helmet that has, you guessed it, a joker in it. Only 2% of the 10,000 Bored Apes have that feature. And according to bicycle playing cards, it's worth almost $200,000. Bicycle says they're also going to issue their own NFT collection, and buyers will get a limited-edition deck of physical playing cards.
You can now sell NFTs via the Apple iPhone store. All told, NFT royalties hit nearly $2 billion last year. That's how much money people made trading NFTs. Nike earned $91 million. Adidas made $5 million. Gucci made almost $2 million. So it's not just individuals.
It's not just teenagers that are playing around with NFTs. Some of the biggest corporations in the world are getting in on this. LG, the big maker of TVs and other consumer electronics, you know, they're from South Korea. They're now making Smart TVs that let you buy NFTs and display them on your LG Smart TV. Fidelity has filed three trademark applications involving the Metaverse. Visa, PayPal, Western Union - they've all done the same thing, new trademark applications, allowing them to do business involving crypto and the Metaverse.
More crypto skeptics become believers
Wow, this is all getting pretty exciting. I mentioned on a show some time ago that there are basically two kinds of people in the world of crypto, people who are believers in crypto and crypto haters. So you've got those who support crypto and you've got those who are skeptics. And the comment that I made is that I know a lot of people in both camps and I've met a lot of people who used to be crypto skeptics who are now crypto believers, but I've never met a crypto believer, become a skeptic.
And now we have the latest example of a skeptic becoming a believer - Lee Reiners. He teaches cryptocurrency law and policy. He's the policy director of the Duke University Financial Economics Center and is a lecturing fellow at Duke's Law School. And he once wrote an op-ed in the Wall Street Journal calling for a ban on crypto. He was a crypto skeptic. Now he's just written a new op-ed for The Wall Street Journal, and this time he says he has changed his mind. Crypto is here to stay, he says. He even organized a digital assets conference at Duke University last month, and he wrote, How do I know that crypto is here to stay?
Well, for starters, he says he's been teaching and writing about cryptocurrency and digital assets at Duke for six years. He's met with hundreds of students, including students in Duke's groundbreaking Master of Engineering and Financial Technology program. Yeah, Duke now offers a college degree for crypto engineering. And he says that these students are not trying to get rich quick. They see the opportunity to get in on a ground floor of a new industry that has great potential. And he says he knows digital assets are here to stay because industry leaders from the traditional financial system say the crypto is going to stay. He cites David Solomon, the CEO of Goldman Sachs, who wrote an op-ed of his own in the Wall Street Journal, saying that blockchain is a promising technology that is already changing how corporations raise money and how investors trade stocks.
He cites BlackRock CEO Larry Fink, who said last month, "The next generation for securities will be the tokenization of securities. He also noted that JPMorgan and KKR both already have done tokenized trades. He also noted SEC Commissioner Hester Peirce. She's criticized her own agency's approach to digital assets. I had Hester Peirce on this podcast and you heard her making those criticisms. He also noted CFTC Commissioner Christine Johnson, who herself is a distinguished securities law scholar, who's calling for a comprehensive regulatory approach for consumer protection in the digital asset markets.
So when an expert like Lee Reiners of Duke University says, 'Sorry, I was wrong about crypto; I now am convinced crypto is here to stay', well, you may very well now be wanting to know how you can add crypto to your own portfolio.
Well, these days it's incredibly easy, particularly using exchange traded funds. Global X ETFs, for example, is one of many fund companies that offer ETFs. Global X has three of them. The Global X Blockchain ETF. The symbol is BKCH. It invests in companies that are developing and using blockchain technology. Companies like Bitcoin miners, crypto exchanges, digital asset banks and companies that make the chips and the hardware. The Global X Blockchain and Bitcoin Strategy ETF. Symbol is BITS. In addition to investing in companies involved in blockchain technology, it also buys Bitcoin futures contracts.
And then there's the Global X Metaverse ETF, Symbol VR. This ETF invests in companies that are engaged in the development and commercialization of the Metaverse. Companies that are letting users experience digital realities, creator platforms for live streaming and 3D simulations, creator economies involving digital payments and NFTs and other digital asset payment gateways. And the companies that are providing the hardware and the software for digital infrastructure, semiconductors, cloud computing, 5G and whatnot.
This is an entirely brand-new asset class, creating an entirely brand-new economic environment. McKinsey says that by 2030, the Metaverse is going to be a $5 trillion business that's equal in size to the economy of Japan, the world's third largest economy. So, yeah, just as Lee Reiners is acknowledging, I think it's time you engaged in crypto. Ask your financial advisor about these Global X ETFs or just visit GlobalXETFs.com. And you can learn a lot more about all of this by reading my number one Amazon bestseller, The Truth About Crypto.
Ed Moore Interview: My Biz Partner Extraordinaire
Ric Edelman: I like to bring you experts every Friday. Tops in their field to help you with your financial decision-making and also for advisors, how to help you in your financial decision-making. This particular expert is going to be an awful lot of fun, if only for me and for Ed. I don't know about anybody else, but Ed Moore is joining us on the program today. Ed and I have been pretty much attached to the hip for the past 35 years. I mean, technically, if I were to cite Ed's title, it is retired financial planner. That's kind of a silly phrase we'll get into. Ed has been in the financial services industry for 35 years. He started it with Waddell and Reed back in 1986, which is the same year I got started as a financial advisor. And Ed joined me in 1990 and he became the president of Edelman Financial in 1995. Ed was my number two forever and instrumental in the growth and development of our firm, which of course, we, together with my wife Jean, turned it into the largest RIA (registered investment advisor) in the country. We went from two planners, just Ed and me, to 150 in 45 offices coast to coast. By the time Ed retired, our company was named the number one RIA in the nation more than a dozen times. And Ed is also a Certified Financial Planner®. He served on the board of directors for financial planning standards. And I think this is the first time, Ed, in our long career together that I've actually interviewed you on the radio.
Ed Moore: Yeah, we've done gigs together. We've been on the radio together, but never interviewed in this format for sure.
Ric Edelman: So before we get into the most important question, which is the reason you decided to retire from Edelman Financial after 30 years, walk us back through the history. Give us your story. I'm the one everybody has heard of because I had the microphone every week for 32 years on the radio. But you were behind the scenes more so. So talk about your career and our working together at Edelman Financial for 30 years.
Ed Moore: Well, we might as well start with a fun story. So for those that haven't heard my story, I met Ric Edelman at an IAFP meeting that's the predecessor to the FPA.
Ric Edelman: All right. In other words, the International Association for Financial Planners, the predecessor for the Financial Planning Association, which now has some 30,000 advisors as members.
Ed Moore: Exactly. I was running a financial planning practice in Virginia Beach, Virginia of Waddell and Reed. And Ric had come into town to speak to that group, IAFP. And so he was the featured speaker. I had seen a notification that he was going to be there speaking and he talked about being on the radio and doing some of the other media activities and that intrigued me. And so I went to the meeting. It was a breakfast meeting which I didn't often go to, but I went and listened to Ric and was fascinated by his story. He mentioned something during that presentation. He said, if anyone is looking for a job, we're really busy and we could use some help. And that he said it rather tongue-in-cheek.
Ric Edelman: And yeah, I was kidding because I was down in Virginia Beach. My office was in Fairfax, which was what, 2 hours away? And I'm like, nobody's going to relocate. I was kind of tongue-in-cheek. You're exactly right. I didn't think anybody would take me seriously.
Ed Moore: Exactly. So I ended up going up and talking with him afterwards, as I do from time to time. We exchanged business cards. My folks lived very near where our office was. My wife's folks did too. So we were up there frequently. So I mentioned, hey, I may call you and see about setting a time for us to get together. And virtually no one after they exchange business cards like that actually follows up on what they say they're going to do. Well, I'm the kind of person that did. And so Ric and I had a conversation and I was trying to milk ideas out of him about the media so I could go and replicate what he was doing in my hometown. And he turned it into a job interview. And he's a pretty compelling salesperson. And ultimately he talked me into coming to work for him for the offer. Ric, if you recall, I was going to make $5,000 a month raw against commission for three months. That was that was the offer.
Ric Edelman: That was it.
Ed Moore: And I was just smart enough or dumb enough to take it. I won't go too deep into the story, but we ended up moving - my wife, my daughter, my dog ended up moving into a basically a 12x12 room in my in-laws' basement. And I figured I'd be there for a couple of weeks, maybe a month or two. Well, that turned into a year and a quarter for various reasons. And anyway, my in-laws, I was 29 at the time and I turned 30, living in my in-laws' basement. So that was the beginning. So it's from very humble beginnings. Ultimately, the firm began to thrive and the firm grew. We began to hire other financial planners, and Ric was fantastic at doing the external portion of the company. But when it came time to training a brand-new financial planner, it's a little bit like Michael Jordan teaching somebody how to play basketball. You know, Michael Jordan just says, well, just jump from the foul line and slam dunk it every time. That's all you have to do. That's kind of the way Ric's training program worked. But I was the coach. I was the touchy-feely guy. I was the one that could help and train the new planners in a way that would help them grow and succeed. And that combination with Ric - those were some of the early days. And then the firm grew and built. And with Ric's foresight and his vision... I mean, Ric, let's just let's just talk about it for just a minute. When there were six of us, when there were 10 of us, when there were 12 or 15 of us, what did you envision? I'll turn the interview around. What did you envision for the company? Did you see what this might become?
Building an airplane while flying it…
Ric Edelman: No, I didn't. My attitude and Jean's was the same from the beginning. As, you know, our attitude was we're going to help anyone who asks for our help. And if the demand for our services exceeds, our capacity will grow to accommodate. We won't turn anybody away, no matter how much or how little money they had. As you know, Ed, we didn't have an account minimum. If they didn't have enough money to open an investment account, we treated them as a pro bono case. So our attitude was the only criteria was, you had to ask for our help and be willing to take it and we'll grow as needed. So I said we'll stop growing when the demand for our services stops coming. It never stopped. It kept coming and coming and coming. So we kept growing and growing and growing, not because of a master plan, but just because we were trying to serve the community who was seeking out our help. So, no. And in hindsight, I wish I did have a master plan. We probably would have grown more logically, more effectively, more rationally. The phrase you kept referring to it, it became your mantra is that we were building an airplane while flying it because we didn't have that master plan and somehow we pulled it off.
Ed Moore: Yeah, exactly. So really, when you think about it, we had probably from 1990 to maybe 2005 (if you look at the first 15 years), I'll call it slow growth. We grew substantially. We were well known. You were on radio stations in seven markets beyond the DC market where we started. And then we opened up offices in New York and some others and then ultimately California, Florida, etc.. So we had, I call it, very slow growth and built an incredible foundation. And the entire time, I mean, the entire focus was on taking care of each and every client as you would take care as if they were family. And so it was purely client focused. We didn't necessarily grow because we wanted to make more money or we wanted to do anything else. It was really more to accommodate those who were requesting the help. Which was great. The mission was always fantastic, which allowed the employees to have a great sense of purpose and a great responsibility for taking care of these clients and making sure that their financial circumstances were as they should be. But for that first 15 years of building the foundation, it was quite different. We opened up the offices in New York and we ended up opening up a great number of offices and expanding substantially, hiring a great number of financial advisors, bringing on a great deal more clients, helping more people across the country, and that fast growth really started then and then took place for the rest of the time when you and I were there.
Ric Edelman: Yeah, I think that's accurate. I think by 2005 there were 16 advisors in the practice. 10 years later we had nearly 150. And so, yeah, when we decided to go national and expand from our one little office in Northern Virginia to growing nationally, we went to New York and we opened seven offices simultaneously, which was kind of insane. But it was an awful lot of fun for me anyway. I mean, Jean, you know, her tagline for me was that I'm the one who created the problems, and Ed and Jean were the ones who fix them. So I always had fun because I just created problems. Let's go to New York and open seven offices all at once. It was, yeah, flying an airplane while building it. It was an awful lot of fun and very dynamic and exciting. And for all of us, because we were flying focused, what I didn't realize in the early days, but which has become a I'm acutely aware of it today now that I've got 40 years of experience, I realize that most companies, not just in the financial industry, but generally speaking, most companies have a hierarchy of priority. The number one priority in most companies are the owners of the business, shareholders if they're a public company. Second priority are the staff.
And third, the bottom of the totem pole are the customers or the clients. As we have found too often, which is I think is one of the reasons we were able to succeed so well, our priorities were client first. That mattered more than anything else. And we knew that the only way for the clients to get what they needed was to have staff devoted to them. So we cared very much for the staff. I always said that my clients are my employees because they're the ones that are delivering the service to the end client and investor. The profits were at the bottom of the list. We knew that if we took care of the staff, they would take care of the client and we would end up being taken care of. We'd have the revenue and profits we needed to survive and thrive, and we wouldn't have to worry about it. We have found that that isn't the case in most American businesses. This is why customer service is so terrible at so many companies because they care most about profit and less about customer experience. And I think that's why we were able to grow, because people would come to us after having terrible experiences elsewhere and it allowed our advisors to act as fiduciaries, serving the best interests of their clients without worrying whether it was in the best interest of the firm.
If it was for the client, that's all that mattered. In the end, that would mean it was okay for the firm. So we were able to thrive. And as a result of that, I think that our environment became not just a job and really not even just a career. It became a calling. The advisors loved working in the firm because they knew they were changing people's lives. They were creating financial security for families on a bigger scale than they ever thought they would be able to do elsewhere in their careers. And this is why in our 30 years together, no financial advisor - beginning with you - or whoever joined our firm ever left to go to another firm. We had a few retire and sadly, a couple died. But nobody ever left to go to a competitor because they had everything they wanted in their careers. They were able to do what they wanted; the way they knew it needed to be done for the benefit of the client. They were well compensated along the way and they were perfectly content. So I think you shared that. I think you regarded what we were doing as a calling, that we were doing something important and vital and different for clients.
But then the day came and I'm going to now fast forward to the real question I cited earlier where it was time for you to retire and leave the firm. Talk about your thought process of going through that exercise because everybody is going to get there at one point or another. I followed you two years later in leaving the firm on the same basis. Everybody has a long, distinguished career. They are devoted to their jobs, to their employers, to their customers. Look at schoolteachers and nurses, firefighters, police officers, airline pilots, factory workers, government workers. Everybody has this career. And there aren't that many who have those countdown clocks. You know, 'I can't wait till I retire'. They genuinely love what they do. They genuinely love who they do it with and who they do it for. But the day is going to come when they're going to stop, either because they do it voluntarily or they are imposed. Airline pilots, I think, have to retire at 65. Many people leave their careers because the time is necessary. Talk about yours. Yours was a voluntary decision as to the nature and timing of your departure. Talk about your thought process.
Ed’s decision to retire: What’s next?
Ed Moore: Sure. And I'll tell a little story before I start. My father-in-law worked for the government. He probably worked for the government for 30 years. He counted the days down until he was age 55. In the old retirement system, you could retire at age 55. He counted the days down and on that day he retired. So he didn't necessarily have a plan. And in many ways, he was rather miserable in his first several years of retirement. He didn't know what to do. He loved to watch sports, and he did that, really and that's all he did for some period of time. He eventually found a bunch of other interests and things changed and it became a much, much better retirement. But counting the days down, I didn't quite do that. I had thoughts of retiring really a couple of years earlier, and I ended up retiring when I was just before I was age 60 at age 59. But I was thinking about it before, so I really had in my mind there was a 12-to-18-month time period where I began thinking about it, thinking about it seriously. So first you've got to think about the financial aspects of it, and we can talk about that later. But there are some very specific things from a financial perspective that you need to have in place and being a financial planner, if I didn't have that, well, jeez, that's my own fault. So I was financially prepared to be able to walk away. And I was at an earlier stage, but for 12 to 18 months I was thinking through it, what is it that I want to do afterwards? Then I literally on my iPhone, I put a list together and where you can put the list in in the notes section, and I would write down things like, I want to learn Spanish, I want to visit China, I want to do this, I want to do that.
So I literally had a list of probably 50 different things that I thought of over time that I might want to do once I retired. So I was trying to prepare mentally and we can get into it later. But honestly, I'm still in what I would call a transition mode where it's like, okay, I've left that. Before you retire, everything's set for you, it's on a daily basis. I would walk in, I would have these appointments that I would have, these phone calls I need to make. I'd have these projects that I was working on. So it was quite structured. And what I was trying to move towards when I decided to leave was something that was more stress-free and where I could control my own time. I had done what I wanted to do and from a job standpoint and a career standpoint, I had a fantastic career. I loved every minute of it, made a great difference in a lot of people's lives. And ultimately I felt I had done enough and I didn't know what that next chapter was, but I knew there was another chapter there, and I knew that I needed to walk away to be able to figure out what that next chapter is and was.
Ric Edelman: You know, it's so interesting. I think that the reason that we are in this situation is because of where we are in the timeline of human history. We are experiencing something that no one in human history has ever experienced. And until the 20th century, and I would say the late 20th century, post-World War II, until then, if you were alive, you worked. You were either looking for food or eating it. I mean, that was all we had. But the development of the industrial age and the level of prosperity coupled with medical advances and scientific discoveries, have combined to create a level of longevity that had never existed before. Our grandparents and great grandparents and elders never had to think about their financial future because they weren't going to have one. They were going to be dead long before they ever retired. Retirement is a 20th century innovation. Nobody retired in the 1800s because you had to grow or shoot your food in order to survive. And we find ourselves in an area of prosperity and longevity that is unprecedented. And what is so fascinating is that you're one of the top financial planning experts in this country. You have done financial planning for hundreds and hundreds of clients personally, by extension, many thousands of clients throughout the firm. We had more than 100,000 clients in our firm. Back when we were in our heyday, before we did our big acquisition of Financial Engines, and we are very highly trained, very well skilled, highly experienced, and we know how. And in fact, we do counsel our clients extensively on the cost of raising a child, on the cost of buying a home, on whether you should buy or lease a car, saving not just for college, but saving for weddings, how to negotiate employment agreements with your employer. How to negotiate salary and benefits. How to deal with insurance and taxes, mortgages, how to write wills and trusts.
We have received extensive training. We have conveyed extensive advice on all of these subjects to prepare our clients to getting to the top of that mountain where they are at the pinnacle of their career, and they are able to afford to retire, to stop earning an income and to live off of the money that they've accumulated through hard work and sacrifice for 30 or 40 years. And that's you, Ed. You're a highly successful executive in one of the largest investment management firms in the country. And financially, you've done a great job for yourself and your family the same way as you said, you counsel your clients. But in all of that, where's the education? Where's the preparation for what do you do after that? I mean, I remember my grandfather retiring and he was dead in a couple of years because that's what happened. You retired at 62. You were dead at 65. Well, your dad retired at 55, lived to 88. You've retired at 60, and you're probably going to have another 40 or 50 years left to go. What preparation did we have for dealing with this and how much did we ever talk to our clients about it? We talked to them about it financially, but we didn't talk about it in terms of a lifestyle. What do you do with the eight or 10 hours, or in your case, 15 hours a day that you now have available that you're not devoting to the business?
Ed Moore: Well, let's talk a little bit. You wrote about this in The Truth About Your Future, right? Yeah, the traditional sense where you would work for the company for 30 years, get a gold watch, retire - that's dead. What's the average length of time that people stay with any one given company today? So people are instead going to work for a period of time in a given profession, in an industry. Then they're going to leave that. They're going to retool themselves, maybe go back to school, maybe retool in a different way, maybe take a sabbatical, maybe travel the world. Then they're going to enter a new profession of some type. Maybe similar, maybe something completely different, and then do that for some number of years and that a series of transitions in that fashion and then ultimately have leisure. But it won't be at 62 or 65, it will likely be in their 70s or in their 80s, as opposed to being at something that was traditional and something that was really, I think, transient, that it wasn't. It's probably not sustainable with the longevity that we're going to see in the future to be able to retire at 65 and live for 40 more years, 30 or 40 more years in retirement. It's probably not a sustainable financial model.
Day one in retirement, the first time around
Ric Edelman: And not only is it not a sustainable financial model, but I also think from a morale perspective and emotional perspective, it's boring. When you got to your first day of not going into the office - we'll put COVID aside, which is hard to do but, your first day of not having phone calls, emails, meetings, business related stuff, what was that? What did that feel like?
Ed Moore: It was a weight off the shoulders for a period of time. And so that was on day one. It's like, wow, you're on the last day of school in the ninth grade or whatever.
Ric Edelman: Not having to do anything. This is wonderful.
Ed Moore: My timing was rather poor. Just a little bit of an aside. So I retired in June of 2020 and so that was when Covid really had hit in March of 2020. So I had a I had a bunch of travel lined up. And in fact, we had a wonderful trip in Australia in March of 2020, we barely escaped coming back and nearly to the day that we came back, the world shut down.
Ric Edelman: Yeah, I mean there were a dozen of us that went to Australia for a couple of weeks. We spend five days in the outback off-roading and we were oblivious to what was going on in the world because we had no cell signal or no cell coverage out there. And the day we flew home was the day President Trump shut down air traffic flights from Europe. And we weren't sure we were going to be able to fly back to the US from Australia.
Ed Moore: Right, exactly. And I don't know, Ric, if you recall, we were walking around a pond and we stumbled upon a black swan and you remember joking about that.
Ric Edelman: Yeah, I remember. I'd never seen a black swan in my life.
Ed Moore: I think you might have taken a picture of it.
Ric Edelman: I definitely took a picture of it because it was very scary. It was like seeing a black cat walking under a ladder. And sure enough, you know, the black swan event came true. You know, we were informed of Covid when we got back into civilization. And so you had to transition from, wow, I don't have to do anything to I don't have anything to do.
Ed Moore: Right. Exactly. So that led to something. That ultimately, I had many things to do. So the early days, I spent a lot of time on my own personal business, things that I needed to catch up with, and had 10 years' worth of updating for a number of things from a personal standpoint.
Ric Edelman: Karen's to-do list that you have been ignoring.
Ed Moore: Exactly. Exactly. Beyond that, eating and health were something that I knew I needed to focus on. With a number of hours, with travel, etc. I wasn't eating particularly well. I wasn't exercising in the way I wanted to. So I devoted time during the first six months to those activities, and I've still continued to that. I'm not as good as Jean is, but I'm much, much better than I was.
Ric Edelman: Well, let me tell everybody this, because this is, I think, of the very many attributes and credits that belong to you, this one is my personal favorite. And people aren't going to believe it when I say it. In Ed's 30-year career with me, he had a grand total sick days of one, and it was because you ate something you were allergic to and you had a reaction to it and you were out one day. I was like, I remember one year I was out 21 days in a single year. Remember that? But you have a constitution that is Old Ironsides.
Ed Moore: So that was the first six months. Then winter was coming around and it was winter of Covid. And I really had no interest in sitting in the cold and restaurants. My wife and I didn't go to restaurants. We didn't have a lot of social activities simply because no one did that. You didn't have a lot of things going on with masks on. And so anyway, I decided that I wanted to go to Florida. I wanted to be somewhere warm, and that's exactly what I did. So I ended up renting a place in Florida, and we had been going down there for some period of time, but we selected a brand-new place. And so I was able to go there. I was able to spend time outdoors with the outdoor restaurants. I was able to walk every morning, play golf, something I enjoy doing on a regular basis, which I couldn't have done back, back up north. And so I did that during that year, and I found that I really enjoyed that. So that gave me a new series of activities that I really hadn't had in the past that I truly enjoyed. So that became kind of the next phase of the activities. And then I ended up doing the same thing the following year, actually rented down there for a little bit longer. And now I'm in the process of purchasing a second home that I'll hopefully spend time in very soon.
Ric Edelman: And so you're reinventing yourself. But it isn't just leisure. I mean, you're not just playing golf in Florida. The word retirement is totally inaccurate in your situation. You are engaged in a variety of things. Talk about some of the stuff you're doing that are career focused.
Ed Moore: I do love to play golf. I'm actually playing tennis now. I'm learning to play pickleball. I can play golf once, twice, three times a week and truly enjoy it. If I had to play five or six times a week, I wouldn't. It'd be more like work. So ultimately, in some ways, finding something else to do was really a fill in to say, I want to be intellectually challenged. I want to be involved in something. I was in the financial business for a long time, so that's where my contacts are, that's where my knowledge is. So I actually made a couple of phone calls after a year. I basically did nothing from a business standpoint for one year, then made a couple of phone calls and have become what's called a special advisor for David DeVoe. And what that means is I'm coaching a couple of small RIAs who want to grow or who may want to sell at some point in time. So that's one activity. I'm on the board of another RIA, I'm on a couple of advisory boards. And I'm now working with you Ric and DACFP. So I'm not looking to go back and work for 50 or 60 hours a week again, like I did for so many years and be that involved. It's great to provide some expertise and some benefit for a firm but not to have it really overtake me.
Ric Edelman: DACFP, referred to as the Digital Assets Council of Financial Professionals, the organization that I created six now seven years ago to teach financial advisors about blockchain and digital assets. And Ed and I couldn't resist. You know, we worked together for 30 years and he left Edelman Financial a year before I did, and then I left and have been focusing on this podcast and our financial education activities and my crypto education activities. And Ed and I, of course, constantly stay in touch and couldn't resist any longer. And so we're back again doing stuff together because we just had too much fun doing it for 30 years. Why put it to a stop? We're just not doing it at Edelman Financial anymore. We're doing it together. And so what I want to ask you is two fundamental questions, and then I want to ask you for your advice. The first question is, of all the things you're doing right now, what is it you like doing best?
Ed Moore: That's a great question. I say my leisure activity and travel are probably my favorite things to do. So leisure activity being activities with friends. Again, playing golf is one of my absolute favorite things to do. And then travel. So for a great deal of time, didn't do a lot of travel, but last year ended up doing at Tahoe. We were in Maine. We were in Colorado. Had a week at a lake house with family. So we had a number of trips and I enjoyed that travel. We've got a trip that's planned to Iceland later this year, probably end up in Italy for a wedding there and so may have some trips around surrounding that as well.
Ric Edelman: And as you know we'll be doing both of those trips together. We've traveled the world over the past 30 years and we continue to travel together. Ed and Karen and Jean and me. And so, yeah, we're looking forward to both Iceland and Italy with you.
Ed Moore: Yeah, exactly. So I was in Connecticut last weekend. I've got a Salt Lake City coming up this week, so some travel, which to me is fun, but really more so than that. Ric I think it's the ability to wake up in the morning and to be able to control my own time and the ability to keep a stress level that's moderate. And it wasn't particularly stressful to work at Edelman Financial for so many years. That was something that I did and I did well and I knew what I was doing. But ultimately there is a stress that goes on for an extended time period. And with the responsibility that that I had throughout the years and not having that is probably the best part of being retired.
Ric Edelman: And what would you say is the biggest challenge?
Ed Moore: I think discipline is probably the greatest challenge. And what do I mean by that? Well, think about it. Instead of waking up at a certain time, roll back over, go back to sleep for an hour, wake up, have some coffee, get some breakfast, work out. Then ultimately lunch comes. So it's fairly easy to waste a day. And then by the time you get to darkness, it's like, okay, what did I accomplish today? Because for so many years it's all about what I need to get done and my to-do list and these accomplishments. And I've found that it's hard to extricate myself from that. And maybe every now and then you need a day like that. But if you do too many days like that, I mean, it can turn into a month or it can turn into six months or turn into a year. And really, you've not accomplished much. And if I get to age 88, age 90 and I look back, I will want there to be some accomplishments that I want to make between now and then.
Ric Edelman: So you're discovering that you're engaging in activities. You're in an environment that is different than what you were in for the prior 30 years, and you are embarking in this new uncharted activity or circumstance without a lot of preparation or expectation. I mean, there were no textbooks telling you, Hey, when you do leave that job, you're going to find yourself facing X. We have, as I mentioned earlier, lots of textbooks on college planning, retirement planning, estate planning, investment planning. But there's not a lot of textbooks on retirement lifestyle. So I'm going to ask you to put on your financial planner hat once more and counsel for everybody who's watching and listening to this podcast. What do they need to think about as they acknowledge that over the next year or decade they're going to be in a similar situation as you and me. They're going to leave the career that they have grown accustomed to for the past several decades. What advice would you give to them as they look forward to their post career life?
Ed Moore: I'll take it and I'll break it down into two different areas. I'll talk about money first and then I'll talk about the rest. In some ways, money's the easy part. Money's kind of the science. And then the art is, is the rest, I would say. So certainly retiring successfully from a finance standpoint, I've got to have enough income to be able to take care of my needs, whatever stage, whether I'm 55, I'm 60 or 70 or 75 when I walk away. What's my source of income? So I'm either going to have pensions, Social Security, some regular source of income from that perspective, or I'm going to be taking some kind of withdrawals from the investments that I've accumulated. So there are easy ways to calculate that. Financial advisors can help with that. Obviously, I did my own financial plan when I started working and then I did it along the way. But ultimately, having the finances in order is certainly number one. But let's again touch on this one topic. When I first did my financial plan, I looked at it and said, okay, what if I retire at age 60 and then I run my life expectancy to age 90? Okay, so that's 30 years. Well think about the advances in medical technology that we've had and the expectation, the advances in medical technology that we are going to have. And if I'm eating right now and I'm exercising as I should and playing pickleball. You talked about that on the podcast recently. So I'm doing the things that will help keep my mind and body sharp. Then I could well live into my hundreds. And then so what does that mean from a financial perspective? So instead of the financial plan that I initially ran on myself, where I expected to die by the time I was 90, well, guess what? I've got to extend that and make certain that I'm going to be prepared financially well beyond that.
So that's the money part of it. Again, that's kind of the easy part of it. The other challenging part is trying to figure out what it is that I want to do. And I'll start with the word purpose because I think that's the most challenging element of it, because I can fill my days with activities. I can fill my days with doing things. If I look at spending time with family, my folks are getting older. They're in their late 80s. They'll need my help more. So my wife's mother is still living. She's 93. There's time to spend with her. We've got kids and grandkids and so time spent with them. I've got business activities. I've got personal activities that I want to do. I do things. I do things with my friends. So activities are one thing. The challenge, though, I think the greatest challenge is purpose. What is my purpose? What is it? What's my next big idea? What is it that I want? How do I want to change the world? How do I want to advance things that are important to me? And that's the transition where I am right now. I don't have some of the answers that I want. And so and I've been retired for two and a half years, and I did a lot of preparation for that. So I think many people will underestimate what it takes to develop that next sense of purpose for the next phase of your life.
Ric Edelman: And what are you doing to figure that out? Are you rushing it or do you feel that it's something you've got to resolve soon or immediately? Or are you comfortable just letting things take their course?
Ed Moore: Really I did very little towards that for the first year. But beyond that, again, I began with some work activities. I was on the board, as you mentioned before, the CFP board and have had some volunteer activities there. I'm on another board. I've been Treasurer. Been working on another board for a period of time, something that I'm very passionate about. Helping bring people up in my local community from a financial standpoint. So I am actively working on certain things, but I've not necessarily found the next big thing. I've not rushed it. I'm taking my time because I really don't have to rush it. And so I'm enjoying myself during this time period. But I would say if there's something that's lacking or something that from an advice standpoint that I would give to people, that's something that they really ought to focus on.
Conversations that financial advisors should have with their clients
Ric Edelman: And so now turn it inside out. What is it you would say to financial advisors about the service and the categories of conversation that they provide? I think you'd agree with me that most advisors are not talking to their clients about this element of the client's future. So what would you say to financial advisors?
Ed Moore: To make certain that the clients understand that once you retire, it's hard to un-retire. Once you leave, it's hard to go back and say, you know, I made a mistake. After three months, I'd like to come back, so make certain that you are mentally prepared. And so that's the advice. So spend whatever time is appropriate on the financial side, spend a heck of a lot more time on the other side, on the art side, on the side of what are you going to do.
Ric Edelman: I think that's extremely important. I think you're absolutely correct that you'll provide much greater value to your client if, in fact you have those conversations, because this is what really matters in terms of happiness. And I'm thrilled that the number one thing you said that I picked up on that I'm just thrilled you said is that you are happy right now. And that thrills me to no end, knowing that our lives together for the past three plus decades have left you in a situation where you are enjoying happiness. And that is, I think, the ultimate obligation and goal that every advisor needs to have for their clients. Don't just leave them financially well off, leave them happy. That said, more. My longtime colleague at Edelman Financial for 30 years and as a result of that, one of my oldest friends, Ed, thanks for joining us on the show today. I think you've really helped a lot of people, as you've been doing for decades.
Ed Moore: It's been a real pleasure Ric.
Be Mindful Of Symptoms. Is Your Body Telling You To Go To The Doctor?
How my recent bout with bronchitis put me in the hospital for 5 days
Jean Edelman: Great to be with you this week. Truly, truly great to be with you this week. This week, I wish to talk about me - if you will indulge me for a few minutes to share with you how it was that I came to spend five days in the hospital in early January. As I was experiencing this health event, I was holding what is it that I need to learn? I take super good care of myself with food, self-care, my quiet time and my walks outside with Hoshi. The one piece I was not educated on, my asthma going into bronchitis, which spiraled out of control.
Now, I did go to the doc and I got an inhaler and I got steroids. And actually, for the first time in my life, got a nebulizer treatment. And that all made me feel good. But I had never used these tools before when I was a kid. I took a pill for my asthma and it would clear up. But here I am at 63 and my body needs more support. This cough hid during the day and only flared up at night, so the inhaler got me through until it didn't.
And by the time I got back to the doctor and got the x-rays and got the nebulizer machine, which are actually in demand right now, it was too late and I was having bronchial spasms. I didn't even know what they were.
But there's a learning moment. There's a moment when you realize that you need help, and that is step one. I knew deep down that I was in trouble and I needed to elevate this. And so as I sat there with my nebulizer, I asked for 911 to be called.
And it was a very surreal moment. I didn't have any fear. It was like all of a sudden I kind of stepped out of my body and started observing because everyone around me knew exactly what to do to get me to a safe place. But not being able to talk or breathe, then your other senses do kick in. I was watching these amazing EMT guys and the ER staff and the ER doc and then my doc and then the nurses and the pulmonary PA and the pulmonologist.
And I just truly surrendered and trusted that I was in good hands, even though that this was a very, very surreal moment in my life. And even as I heard the words, well, "we're going to admit you", there really was no fear. But I sat there watching and observing and thinking about what is it that I need to learn for me in my life.
So slow down was number one. What is so important that I need to rush around so much? And the second piece, which has been a pretty big piece for me, is to stop pushing through. This is something that I learned from my dad that even if you're sick or something's not going right or you have a big project or whatever it is, you just keep pushing. You push and push and push until it works out. When you have an inherited piece like this from your parents, which he got from his parents, which they got from their parents, generations of this learning, it's hard to kind of pull it out of your being.
What have I learned from this health event? That this rushing activity no longer serves me. And so this is something that I am working on. And the next piece that I need to learn is to nourish my soul more. All this rushing around and pushing. Yeah, I was doing good self-care and I was eating well. But I had forgotten the ultimate essence of me and taking care of me. I'm truly, truly grateful for the amazing care that I got at Inova and the nurses and the docs. And I'm grateful to be up and out and walking with Hoshi, and I'm grateful for the opportunity to be able to have looked at this health event as something that I need to learn and things that I need to change for me in my life.
And we're going to talk more about all these different pieces in the future podcast. And so my word of the week is ME. But I'm hoping that this message will be helpful for you.
The M is for Mindful; to be attentive and consciously aware. Don't let symptoms go for too long or even just be aware of symptoms, but don't let things go on too long before seeking medical intervention. I got to the doc after I had the cough for one week, but when it was still with me for two weeks later for me was a little too late. Lesson learned. It's not only the cough, but my entire body that was trying to support me and the muscles and the adrenals and all the systems. That's what's going to take the time to recover because my whole body needs to rest. My whole body needs to restore. And so being mindful of these symptoms when they pop up and then take action.
The E is for Embrace - each day, each moment. You know those five days that I spent in the hospital are the first days in years that I haven't been outside walking, cooking, being with my family and friends. Was I so arrogant that I thought that a lingering cough would ever take me to that place? Not on your life. But when life is happening to us, it is a wonderful opportunity to learn. And trust me, I got my messages loud and clear. Have a great week, everyone.