ROSS BRANNON

Tell everyone your background, Kim. What's your story?

KIM BUTLER

It has a fun beginning. I lived on a farm and when I was in fourth grade, my parents got me a dairy cow. I milked it and sold the milk, and had way more money than all my friends. I did that throughout my school years. Which meant I had to figure out the money game, and the game of business.

I was an English major in college, but realized that wasn’t a good fit for me, so when I graduated, I went into banking. I was hired right away through a management training program of what is now Bank of America. I loved my time at the bank, however, I wanted to help people more holistically. This was in the late 80s, when banks basically had checking and savings accounts and loans, none of the things that banks do today.

So, I left the bank and went into the financial services industry. I spent about five years doing what I call typical financial planning, and then realized that wasn't fitting who I was as a person. I wanted a little bit more flexibility. I wanted something that rang truer to me than handing somebody a financial plan. I decided there had to be a better way. I found out that all of my really good banking clients, who I was still in touch with, dealt with real estate and whole life insurance. It was an appropriate match in my mind. They were way more economically based. I shifted my practice to what I now call Prosperity Economics, and I’ve never looked back.

ROSS BRANNON

Can you speak to the importance of doing true macroeconomic planning?

KIM BUTLER

I think there are two aspects to it. Your term macroeconomics is something that is so valuable and yet it's never brought down to people's personal finances. I don't know about you, but I hated macro and micro economics in school. Yet it is so important that as individuals, we look at our finances holistically, which is all macroeconomic means. You cannot make a decision about your car insurance without taking a look at everything else going on in your life. You cannot make a decision about any one particular thing in a vacuum.

Financial planning tries to put all these things together and create what is mathematically correct. So, the numbers are right in a financial plan, the math is right, but it has absolutely nothing to do with our lives because our lives don't work mathematically.

We do not have the ability to control money or our lives in any average way, even in any Monte Carlo way. The plan has a complete disconnect to our lives, so it causes a false sense of peace of mind. We look at that coffee table book, that document with the cool graphs, and we think it's real, but it’s not. I think that's why there's such a disconnect between the two.

ROSS BRANNON

To your point, money isn't math. Obviously, average returns aren't the same as actual returns. You're going to get X percent return, but that doesn't factor in the emotions of selling and buying. I recently spoke at a dental school, making the point that contributing to a retirement account at 24, 25, 26 years old is like the sacred cow. What's more important, a few thousand dollars that you can't touch for 35 years or having a liquid nest egg that gives you flexibility? Everyone's situation is different. It's not the same advice for everybody. Many people who are 22 or 23 get a job and get auto enrolled in a 401(k).

KIM BUTLER

They have nothing in liquid savings. It makes no sense. My son went through the same thing. His company has a 100% match. His friends and all the older people at the company told him he needed to do the 401(k). Why? It made no sense. He wanted to get in real estate. He had no savings. Savings must happen first. Real estate should be second. This concept of retirement must be retired.

ROSS BRANNON

Talk about the history of retirement, because I know you know the whole history of the concept.

KIM BUTLER

Back in the 1930s, 65 was declared as retirement age, when expectancy was 67. Today, 87 is the new 65 because life expectancy is late 90s. Our society is still stuck back in 1930s math. It's the saddest thing to me. I remember about five years ago, a company had to make a one-year exception for their extremely qualified head of investments so he could work from 65 to 66. Here is this man, at the pinnacle of his wisdom, getting just one more year before being ushered out. Now what’s he going to go do for 30 years? It's sad. We must retire the concept of retirement, age-wise. Furthermore, we know that retirement is not good for us. It's not good mentally, physically, socially, psychologically, physiologically.

My father is in his mid-80s and he’s still working. He helps student teachers at the university in the town where I grew up. My husband’s mother still works in a hospital lab three or four days a week. I think this is the new definition of retirement. Find work you love, do it part-time, and keep doing it.

ROSS BRANNON

To your point about the math, if you work to 75, you’ll need less money in retirement than if you retire at 65. How do Prosperity Economics and Prosperity Thinkers challenge conventional wisdom?

KIM BUTLER

The term prosperity is so available to us throughout our lives. It does not always have to be about money, and yet, it can be about money. Since money may not be everything in our life, but it certainly affects everything in our life, it's very critical that these things are brought together. We've learned how important our mindsets are for anything we do. Believe me, this is something I'm still working on every day. I was doing my own podcast recently, talking with Spencer Shaw, my co-host, and we came up with a fun definition that's different than what most people think about other people's money (OPM). It's also other people's mistakes, and it's other people's minds. OPM could stand for any of those things.

If I can share some of my wisdom, and some of my mistakes, then I think that helps people move forward. Prosperity Thinkers is essentially my life insurance practice that exists thanks to Robert Kiyosaki and the internet, which happened to come into my life at about the same time. Robert helped us become nationwide in our work. I've worked remotely ever since, and I'm super grateful for that. Prosperity Thinkers is my connection to the life insurance world. It does what you do for your clients. There are two clear roles there. Prosperity Economics is a larger organization that my husband, Todd Langford and I founded. It is set up as a nonprofit, and it is designed to provide financial education to clients and to advisors.

Why does financial education need to be provided to advisors, whether they're life insurance agents or financial advisors? It's because those that have been trained and have licenses often do not truly understand some elementary aspects of interest rates, compounding of money, how loans work, both at a bank and at a life insurance company, and on and on. Prosperity Economics is out there to provide financial education. At Prosperity Thinkers, we have seven specific principles that we work with. At Prosperity Economics, we have 12, because we lengthened it a little bit, and we're trying to keep our brand lanes clean. There is some overlap between the two lists of principles. I would encourage anybody to go dig around.

The coolest thing about principles is that they apply to any area of life. They're written as financial principles, but you can apply them to your health, you can apply them to your relationships, you can apply them to your business, because a good principle is designed to be impactful throughout your whole life. It’s your macroeconomic perspective, your holistic perspective on your personal finances. You have to do the same thing to your life. You can't compartmentalize your life. Your life also has to be looked at holistically. That's where those principles really come in.

ROSS BRANNON

It's amazing listening to Todd talk when you talk about advisors needing training. Unfortunately, just because you're an advisor doesn't mean you know everything financially. They may know more than the person sitting across from them, but there are a lot of areas where some need education.

KIM BUTLER

I've been listening to Todd train since 1994, and I still learn something every single time. It is the most valuable financial education out there. I realize I'm completely biased because he is my husband, but he wasn't my husband when I start getting trained by him. It is an absolute joy. The information that we're sharing professionally is so able to be transparent, is truthful, and is provable.

ROSS BRANNON

What would you say is the most important thing for someone who's relatively young, say mid to late-20s, to learn or to challenge their mindset on?

KIM BUTLER

The term “thinkers” is employed to get us to turn our brains on and open up that door and have the mindset of the beginner's mind while at the same time having a growth-oriented mindset. Carol Dweck's book about fixed versus growth mindsets explains this so well. What's so cool about it is that you can shift. We all have aspects of our mind that are fixed. If you find yourself in that space, you can be aware of that, and open up that door to be more growth oriented. That’s why some of my favorite clients are members of that next generation.

The most important thing is they realize that they must be saving, and save as a verb. Put a part of your money away every single month. That's super critical. I always ask them how they learn best, because we've created a lot of content that enables them to learn via video, via audio, from a podcast standpoint, or an audiobook, or by reading books. I want a self-learner, or a self-taught person, or the person that's going to educate some. That helps me also, because then I can spend less time educating one-on-one and more time educating one to many.

ROSS BRANNON

You talk about saving money. Our industry is really bad on focusing on rate of return because rate of return is sexy. It sounds good, but we can't control it. The only thing we can control is our rate of savings. We can calculate how the rate of savings is actually more important than the rate of return. We have to be a saver to deploy capital to different investments.

There are those who say you should be saving 10 or 15%. I think 20% is the bare minimum, and it should be more. Can you talk a little about savings, and helping your clients escape the culture of spend, spend, spend?

KIM BUTLER

The first thing is to stop budgeting. It doesn't work. The second thing is to automate your savings. That can be an auto debit out of your checking account into your savings account, or maybe an auto debit out of your checking account into a life insurance policy. Those are valuable savings mechanisms. But let’s not have it go to a retirement plan, because that is not liquid savings. I use the C.L.U.E. acronym: C, control the money; L, have the money liquid; U, use it for whatever you want; E, have it act like equity so that you can borrow against it. Wherever you're storing that cash, the ability to add to that cash on a consistent basis is paramount.

Then, love the act of savings. Every month when you do your finances, love that activity. Be grateful for the dollars you get to save, the premiums you get to write, the functions that money is providing for you. If you really want to take it to the next level, don't just be grateful for the physical thing, but up-level it, and be grateful for the spiritual element or the inspirational element of it. If we save first, and we don't try to budget, then we can spend the rest, and enable that part to impact our lives more fully. We can be grateful for the thing it gets us, but also what it does in our lives.

The last thing is if we can tie each of the dollars we're working with to our own values. Maybe it’s the value of that coffee, that it gives you confidence in your day, and it lets you be a better person at your job. Then you're really running that thing full circle, and you will get better results.

ROSS BRANNON

What does the phrase financial health mean to you?

KIM BUTLER

Control of money. Financial health means I have some control over my money, and I have some liquidity so I can use it for whatever I want. Financial health also means I am tying all of my dollars to my own values. Going back to what we talked about earlier, that 25-year-old kid that wants to do real estate. His value is real estate. His value is not retiring. So why would he contribute to a 401(k) or 403(b) plan for retirement?

It also means clarifying values. I have a tip for the readers. Go online and look for lists of values. Pick your top 20, then narrow it down to your top 10. If you can narrow it down even further to five or seven, that's awesome. Do it for yourself and have your significant other do it as well. Compare them. A year later, do it again. I look at values all the time. I want to tie all money decisions to values.

ROSS BRANNON

What advice would you give to a dental school graduate, two-to-four hundred thousand dollars in student loan debt?

KIM BUTLER

Todd and I like to live in the “house of both.” Do you want chocolate cake or ice cream? Let's have both. A dentist wants to have both by making minimum payments on his debt and save every other dollar that he can, and then spend the rest. If he can save one percent of his income, that’s where he starts. If it’s 10%, that's better. Start where you can. Let's face it, these guys have been living on nothing while they're going through school. Now they have a little income. Keep living on nothing for a little bit, get your savings, because there is no more extremely helpful peace of mind than liquid savings.

ROSS BRANNON

Thank you for sharing your insights and your unique approach.