Money Is Not Just Math

SPEAKER_01 0:04

Dear listeners, most of us were taught that money is a numbers game. That the decisions we make about investing, spending, and risk are fundamentally rational. Or at least should be. That if you just understand the math well enough, you will make the right choices. But anyone who has ever made a financial decision, which is all of us, knows that the math is really the hard part. The hard part is what's happening underneath the math. Oh identity. Old messages carry about what money means and what having it or losing it sprays about us. So today we are going there, not to the spreadsheet, but to the person behind it. I'm a host of a game and I'm really glad that I'm here today. And my guest tonight has spent over 20 years as an entrepreneur, investor, fund manager, and financial educator. He's the best-selling author of Little Green Book of Note Investing, VP of Liberties Management Corp. And a man who has spent decades helping people not just understand alternative investments but understand their own relationship with money and risk. Please welcome our guest, Red Moscowist. Welcome to the show.

SPEAKER_00 1:58

Thank you, Avik. It's great to be here. Thanks for having me.

SPEAKER_01 2:02

Amazing, amazing. Like um, before we get into the emotional territory of money, I want to start somewhere uh a bit personal. Like you have been in the investing and financial education space for over 20-20 years. Um was there a moment early in your journey where you first noticed that the obstacles your students or clients faced were not really about understanding the investment, they were about something happening inside them. So what did the realization feel like?

Dot Com Shock And One Income Risk

SPEAKER_00 2:45

Well, for me, it was um my early days uh when I finished university and started working out in the professional world as a computer engineer, working in the tech industry. And uh I was always brought up and taught that if you study hard and get a good education and then uh get a good job at a good company, then you'll do really well and and um you'll have stability in life financially. But uh what happened with me was I started working during the time of the beginning of the dot-com boom, right around the time of the early days of the internet, and I quickly realized that it was a wild roller coaster ride full of ups and downs. And working at a good company did not mean that uh there was stability or that was there was um going to be a sense of of longevity, in particular in the tech industry, right? Companies ramp up very quickly and grow and expand, and then at the same pace, they can crash and burn at the same time. And so uh we saw all of this with the bursting of the dot-com bubble, companies just getting completely disrupted overnight. And so the realization through all of this was that I loved the work I was doing, working as an engineer. I love that so much. However, there was all of these circumstances outside of my control, right? Because we can't control how the economy is, we can't control how the industry, whether it's going in an up cycle or down cycle, it's gonna happen. And so uh I found out that I was taking on this huge risk, relying on a single source of income for my job. And that was that was all I had. And so this inspired me to make a change, to say, how can I change this? And uh this is what got me interested in investments, right? All about buying and building assets that generate income, generate cash flow. Uh, I saw a statistic where the average millionaire has seven sources of income, seven independent sources of income. And there I was with one. And so, uh, like many other things in life, when you're faced with a problem, faced with adversity, then you say, okay, what am I gonna do about it? What action will I take to change this? And that's that's the question we all have to answer is looking at what are you gonna do? Because that's the thing you can control. When you can't control the economy, but you can control what you are going to do and how you're gonna respond to that. And so this is what led me um down the path to learn about investing, to take initiative and to get involved. And when you do that, when you take action and you implement a plan, it's very empowering because you get to see the results of your efforts over time. It's very rewarding to do that.

SPEAKER_01 6:44

Great. Cool. And um also, like uh I talked I'd love to talk about a misconception.

Risk Tolerance And Timeline Basics

SPEAKER_01 6:54

Like, there's a persistent myth in personal finance that better information leads to better decisions, that if people just understood the math, the risk profiles, the fundamentals, they would invest more wisely and build more wealth. But you and I both know that that that's not quite how uh it works. So, uh what is the core misconception about money and decision making that keeps even um intelligent motivated people from making the financial choices they know are right for them?

SPEAKER_00 7:34

Well, it all starts with understanding what is your risk tolerance and your timing, those two things timing and risk tolerance. What's your timeline? And what risk are you comfortable with? And this is something that changes, it's very different for each person, and it also changes over time depending on your experience level. And so it's important to uh to understand risk, and it's okay to take some risks, however, make sure you manage them uh properly and understand what they are so that you can manage the risks because there's risk inherently in everything we do. If you take your money and bury it in the ground, then it's not gonna grow for you, right? Maybe that may feel safe. You won't lose it as long as you don't forget where you buried it, but it's not gonna grow. Maybe you will get eroded by inflation over time, and so think about not just saving money, but what are you gonna do with that once you have it? How are you gonna put it to work? How will you uh a book I love that we can learn so many amazing lessons from is the richest man in Babylon by Claxon. It's the author. So many lessons there, but the unfundamental lesson is save money and then get it working for you, put it to work. You can treat it as one of your employees working on your behalf for your betterment, and so uh don't take reckless risks with that money, but do it in a calculated way. Maybe if you invest in something, uh understand what kind of protections there they're there.

SPEAKER_01 9:52

Yeah, yeah.

SPEAKER_00 9:54

Uh, maybe you invest in real estate or some other type of asset that holds its value and retains it.

SPEAKER_01 10:04

Right? Right.

SPEAKER_00 10:06

And the bottom line is that no matter what you do, you have an understanding of how is your investment protected, whether you have to take active steps to protect it or it's inherent because of what it is. Maybe it's a piece of property, a piece of real estate that uh you own and it has value. And while the value won't go to zero, you still have to maintain the property, keep it looking well, uh, keep it maintaining income, uh, operating it well. These are all additional work and effort that has to go into it and has to be managed properly, like anything else. You have to take care of it. If you invest in a business, let's say, a small business, then you have to operate the business well or have someone doing it for you that is going to run it efficiently and have it grow and prosper. Uh, and if it's not managed well, the business may go downhill. It may lose value. It's all about managing that well. And uh, so that's that's the important thing. It's not a hands-off activity, it's when you buy an asset, what are you gonna do to have it continue to throw off income and increase in value over time?

Education Over Hype Investing

SPEAKER_01 11:46

Yeah, and um okay, and money is one of the most emotionally loaded subjects in most people's lives. It is, yeah. Yeah, and and um but yet it's um I'd say treated almost entirely as a technical subject, right? Uh what are the deeper psychological patterns that you see most consistently in the people that you work with?

SPEAKER_00 12:19

I see a lot of um a lot of people will make mistakes with investments that they don't understand. They get into something because they're seeking the next hottest thing. And maybe they don't you it's important to take the time to have education, learn. We have so many ways to learn resources available. So understand what it is. If you're gonna invest in real estate, learn learn it, learn how to do it. Surround yourself with other successful people that are already doing that and learn from them. Um, if you're gonna invest in a business, it doesn't matter what kind of asset it is. Business could be cryptocurrency, an area that is really popular now. Well, have an understanding of what that is, how that works, how that's gonna increase in value. Um, and that's the first place to start. Get some education, be around others that are successful. Maybe you attend events, conferences, or groups of investor groups where you can be around other successful people. You can learn from their experience, you can have conversations, ask questions, you can see what other people are doing, because there's probably so many strategies that are effective, that are out there, but find the one that's right for you, that's gonna fit well in your lifestyle, in the time you have, what's appropriate, what is a good risk tolerance for you that you're comfortable with, all of these things. And then that's how you can uh find what's gonna resonate well and what's gonna work well in your lifestyle.

SPEAKER_01 14:29

Exactly, exactly.

Why People Choose Alternative Assets

SPEAKER_01 14:31

And um, I mean you work with uh I mean you work in the world of alternative uh lessons, right? Like uh note investing, uh moderate notes, uh self-rected RI uh IRS. Uh so these are tools that sit outside the mainstream financial conversation. And I imagine the people who find their way to them arrive with a particular emotional profile. Maybe um people who have been burned by conventional markets or who feel overlooked by traditional financial institutions. Or I would say people who are looking for a sense of agency that will that that Wall Street doesn't give them. What emotional needs are actually driving the search for alternatives?

SPEAKER_00 15:29

Couple of needs, emotional needs, uh certainly the need for certainty, consistency, uh, the need for security. People want to feel safe, uh, they want to have some level of control, whether that's control that you have directly or control that you are uh delegating to someone on your behalf, either one is okay, but understand the structure of that. Those are some of the emotional areas. Another one is that's super important is resiliency. Can you build up resiliency so that the decisions you make are coming from a place of growth and abundance instead of lack and scarcity? So the I feel those are some of the prominent emotional aspects that that come into play. And everyone has different experiences, different hardships. Maybe you lost money on an investment that didn't go well in the past. Happens to everyone. But what's important is understand what are the lessons learned and what are you doing to not make mistakes more than once. And if you can be around other successful people, the benefit there is you get to learn from the mistakes they made without you having to make those same mistakes. And so that's almost like an acceleration because you're jumping forward in that trajectory towards your goals and dreams and objectives, and so those are some of the emotional, uh, emotional aspects.

Start With Community And Mentorship

SPEAKER_01 17:37

Like uh for someone who is um who who wants to begin developing a healthier emotional relationship with the money, not just a better investment strategy, but a genuinely um different way of feeling and thinking about financial decisions. Um according to you, where do you actually start? I mean uh where where I mean what is the first honest conversation a person needs to have as a kind of financial advisor or with themselves?

SPEAKER_00 18:18

Some of the first conversations are look around you to see who is successful, who is already successful in the area or the specific niche or general area that you're interested in, and learn from them. Read books, listen to podcasts, you watch YouTube videos. We have all of these resources available at low cost or no cost at all. Uh, find people around you in your community. Can you be of service to them? Can you help them? Can you work, work for them as an employee and learn at the same time? Can you offer uh a service or of something of value to them where you it allows you to position yourself closer with someone that's already successful and you learn along the way. So it's almost like a little bit of a mentorship um dynamic. Uh join groups, get involved in different groups and communities in your local area so that you get to be around successful people because you know what? The conversations that happen, they're gonna be probably a little more advanced than what level you're at. And that's okay because that's gonna uplift you. You're gonna learn, you're gonna start having different conversations, you're gonna hear people talking about higher-level problems and how do they solve them. And you learn. And these are the ways to get started, but always show up from a place of being, of value and service to others. If you're joining a group, find out can you volunteer? Can you help the organizers of the group, run the group? They always need help. It's a lot of work. So see how you can volunteer. And what's gonna happen is you're gonna learn, you're gonna network with others, you're gonna learn, meet people, build relationships, see how all of this is interrelated, but that's the place to start because you're gonna be influenced by successful people, you're gonna have your mindset shaped by the folks around you and the conversations that are happening, and this is what will change your mindset in the long run.

SPEAKER_01 21:10

And and and

Note Investing And The Lender Mindset

SPEAKER_01 21:11

um and obviously uh the little green book of Node investing. Um what drew you to write it? Like what do you hope someone takes away from it beyond the mechanics?

SPEAKER_00 21:26

Well, beyond the mechanics, it's learning learning about something new. Maybe it's non-traditional for some, but uh in the case of node investing, most people know about real estate finance from the perspective of being the borrower they're signing a loan, they're obligating themselves to a loan uh in exchange for capital. To purchase a property, which is great. And many people do this, however, they don't take the time to learn the other side of that arrangement, which is the lender, the lender side. When we get involved in note investing, we're stepping into the shoes of the lender. And that's why I wrote the book. It's to help more people learn about the amazing asset class of mortgage notes and how you can get involved. It's not a business that's just for banks, it's also available to individual investors like you and I. And that's why I set out to write that book to help spread the message about this, to help someone that's curious learn.

SPEAKER_01 23:00

Yes. Amazing. And like uh investing always involves the

Handling Losses With Defensive Investing

SPEAKER_01 23:08

possibility of loss, also. And for many people, a financial setback, even a manageable one, can trigger a level of distress. Yes. It goes far beyond what the actual emotional response to it is threatening to keep them out of the game permanently. So what do you have to say?

SPEAKER_00 23:30

Yeah, um losses happen in anything. There's risk in anything we do in life. If you walk out your door, get into your car and drive across your town or city, you're taking a risk right there just from doing that. And so it's about understanding what are the risks, what can I do to minimize them? If you're getting in a car, maybe you're gonna put your seatbelt on. You're gonna drive in a defensive way and careful, maybe leave a little more space in front of you to the next car, right? Drive defensively. When it comes to money, uh, you're gonna learn and understand what are the risks and what do successful people do to manage those risks. There's additional steps you can take. And so learning what they are, what are the best practices for the activity or the business you're involved in, and implement those. And the biggest thing is don't be afraid to ask for help. And in particular, ask for help from people that are successful. That's the best, the best kind of help or advice is from someone that's already successful in that particular area. Not your friend that doesn't never did any any investing at all. You don't go and ask them for advice about your investment activities or your business activities. They may be a great friend, but they just don't have the context to provide you with the right advice. Um, instead, you ask someone who is very knowledgeable in that field. Maybe it's someone that's in one of the groups or communities you you got involved in. So there's a relevancy there. That's important. It's just like you would never go to ask for health and fitness advice from someone that doesn't exercise as an and is in terrible physical health and shape. You wouldn't ask them for uh advice on how to lose weight or how to train for a marathon, right? Where would you go? Well, maybe you would join a club of marathon runners and people that train together, or you would work with a physical uh fitness trainer that has already achieved notoriety and achieved success, that's the right coach, the right mentorship for you. Exactly. And uh if you have to give my advice to the listeners, what actually surround yourself with people that are operating at a higher level than you are, pay a lot of attention to that because that type of influence, that proximity is so powerful, and it has the potential to pull you up to the next level or pull you down if everyone else is operating at a lower level that it's gonna drag you down. It works both ways, so be very uh intentional about that. That's why our parents always teach us be careful of the friends you choose, right? And this is exactly the reason why. But it works the same in business as well, business and investing.

SPEAKER_01 27:25

Very true.

Surround Yourself With Better Operators

SPEAKER_01 27:28

Wow.

How To Connect And Final Takeaways

SPEAKER_01 27:31

Amazing. And uh so, Fred, like if someone wants to connect with you, uh, what would be the great medium to connect?

SPEAKER_00 27:38

Yeah, thank you. Uh the best way to connect with me is to visit my website, which is FredMoskowitz.com. And if you prefer a little bit of an easier spelling, you can visit giftfromfred.com. It will take you right to my website and you can connect with me there. I always love speaking with investors and connecting with others. Uh, building relationships is such an important part of what we do. Thank you.

SPEAKER_01 28:09

Amazing. So, dear listeners, what I'll do is I'll put all the links and the details into the show notes for easy reference. And with this, um, that's the wrap for today's episode of Healthy Man Healthy Life. And if this conversation made you think differently about your own relationship with money, the key things underneath the finances, please take that seriously. It's not a detour from your financial life, it is the foundation of it. So, Fred's book and all his details would be there in the show notes. And if someone in your life is carrying financial stress or anxiety that's affecting their well-being, then this episode might be actually or exactly cut what they need. So with this hope, this is a host of weekend. This is the mind and the bike. Your mind and your money are more connected than you think. So take care of you both and see you next time. Thank you so much.

SPEAKER_00 29:06

Thank you