Why Financial Behaviors Matter More Than Math - Episode 87
Today, I'm chatting with Joseph Reinke, the founder of FitBUX and a financial whiz who’s been investing since he was 12 years old. Joseph has a ton of experience helping young professionals navigate everything from student loans to mortgages. We talk about the importance of financial education, how to avoid lifestyle creep, and simple steps you can take to build wealth over time. Plus, Joseph shares how he's teaching his daughter to manage money and start her own businesses.
About our guest
Joseph Reinke is a Chartered Financial Analyst (CFA) and founder of FitBUX which has helped young professionals manage over $2.7 billion in assets and debts on their journey to financial freedom. Joseph has been personally investing since he was 12 years old. In addition, he has experience in student loans, mortgages, wealth management, investment banking, valuation, stock trading, and option trading. He has been on 100s of podcast and has been invited to 100s of universities to discuss financial planning with their soon to be graduates.
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TRANSCRIPT:
[00:00:00]
Naseema: Joseph Reinke is a chartered financial analyst and founder of FitBUX, which has helped young professionals manage over 2. 7 billion in assets and debts on their journey to financial freedom. Joseph has personally invested since he was 12 years old. In addition, he has experience in student loans, mortgages, wealth management, investment banking.
Valuation stock trading and options trading. He has been on hundreds of podcasts and has been invited to hundreds of universities to discuss financial planning with their soon to be graduates.
What's up, my financially intentional people. I'm joined today by Joseph Reinke of FitBUX. Hey, Joseph.
Joseph Renke: Hey, how you doing? Thanks for having me.
Naseema: Of course. And Joseph has like a wealth of financial knowledge As well as a wealth of just finance experience across the board, not just personal finance, but across the [00:01:00] board in all financial realms.
So he is like the go to guy when it comes to finance, but I wanted to zoom out a little bit and talk about the things that people often say to me. I hear this all the time that. Personal finance needs to be taught in schools, and this is something that he does at the university level, but I want to make that information accessible to you.
So I want to bring Joseph on to do that. Welcome again, Joseph, and I know you're going to give my audience the tea that they need to make sure that they're making the right money moves.
Joseph Renke: Yeah, thanks for having me. I started Fitbox with the technology and stuff. I actually really contemplated focusing on the educational component and going into universities and stuff. But back when I had first started. It was one of those things where like nobody, they would all say it, but nobody really wanted to take action.
And now when you look at like various States, for example, I think there's 26 or 28 States now that are [00:02:00] now making it mandatory in high schools. The only difference, the only thing is there is what are they teaching in high school? Some of the stuff I'm just like, but at least there, at least it's a step in the right direction, right?
But universities, it's a major issue now. And I like, I'll give you an example. I didn't realize this, but there is data that I saw cause I'm part of the financial wellness group alliance nationwide. And I was at one of the conferences a few weeks ago and they were sharing a data point on universities. over 800 of them have food pantries now on campus because almost half their students We're skipping meals and not having full food, like just in general on campus, like they can't even afford to basically eat. So yeah, I was shocked when I heard that, like 800 schools and universities have food pantries.
There, I was amazed by that and
Naseema: [00:03:00] because tuition
Joseph Renke: exactly right now I look at it and I'm like what is it like a 1. 8 trillion in student loan debt. And there's two sides of this. Like I see it. So when we first launched the tech years ago, it was only around grad school students. So like that demographic had about 150, 000, 160, 000, 170, 000 in student loan debt.
Naseema: on average,
Joseph Renke: was that
Naseema: on average,
Joseph Renke: on average. Yes. With no financial guidance whatsoever. It's here's your degree. Good luck. All right.
Naseema: Huh.
Joseph Renke: And then on the flip side of that, a lot of universities. They weren't doing anything to try to help it. Now, what has happened slowly at the university level is social media, right? A lot of people are out there complaining about it.
So now they're, their applications are down. So now it's hitting their potential pocketbook and they're like we got to do something. And so over the years, a number of schools have rolled out things like financial wellness [00:04:00] offices throughout their universities. The issue that we see there is that they're still new, so they're not fully funded.
So it's like trying to get the word out. It's pretty difficult for them. So what we do is we primarily go to different programs and we do webinars and stuff, and then that is morphed into curriculum where I'm an adjunct professor now and multiple universities, which I never thought that would ever happen considering I, I was not an academic person, so I never thought that would happen.
Naseema: The bonus is your daughter can go to school discounted or free at a multitude of universities if you choose to stay there.
Joseph Renke: Yeah, my daughter like has so much money, she doesn't have to, she's already like you brought about the education piece. I started the system with her back when she was three. She is now seven and she started two businesses and has almost seven grand saved. And so I'm like, I, I try and people come to me and they're like, how'd you do that?
And I tell them, and they're like, you should build out like a technology around that. So I was like, [00:05:00] it's in the works. It's a prototype. It like, we just started testing it last week. So
Naseema: Let's do it because, my daughter will be all over that promoting that, but anyway, so before we talk about the system that you built out for your daughter, because we are going to talk about that, let's just talk about what you talk to people about at the university level for their financial wellness.
And I just think it's It's crazy that still the student loan debt is still a big thing that people are barely making it surviving to go to college. I remember people being on food stamps a couple of people applying for food stamps, but I didn't know it was like that crazy. But still, still, there's no incentive for the universities to be more affordable.
But anyway, that's another story for another day.
Joseph Renke: The whole podcast on that.
Naseema: right. Exactly. we'll just talk about what you teach.
Joseph Renke: Yeah. Yeah. On the teaching side. So on the primarily high level, like financial [00:06:00] planning, my, my, my Big thing is to be financially well, financial freedom. Too many people concentrate on dollars and cents. And. Being in healthcare, you're understanding this, like the actual treatment part is effective, but it's only like 20 to 30 percent of the outcome.
Like 70 percent of the outcome is mental behaviors, that type of stuff. So the same thing applies with money. And so how do you think about money? I learned that when I was, teenagers, somebody said that to me, like there's a tangible portion of money and there's an intangible portion, which is how you think together combined their financial freedom.
And so when I was researching a lot of behavioral analytics and whatnot, I said how can we teach financial planning? What are the key components of this? Without getting too bogged down into the weeds. And so the way we basically teach it is your money goes into three categories. Day to day money, money for future self and risk management.
And when it comes to financial planning, money for future self is the key. That is the [00:07:00] absolute key. And then from there, you only have two goals, short term and long term. That's it just to, that's it. So like long term in terms of wealth building is one of the most. Is the most important in my opinion.
And so that's that second category money for future self and i'll give you an example. Everybody talks about compounding interest, right? I I was just at this conference the other day and they're just like we should be having everybody invest day one and it's okay Compounding is great, but you guys are missing something else here.
And they're like, what? I'm like, okay if I invested $100 for 40 years and earned a normal rate of return of 8%, that's like $349,000 over years. Okay. But if I make one tweak to that, so long term money for future self. If I increase that $100 per month and I increase that by $25 per month, once a year.
So this year I do $100 a month. Next year I do $125. The next year I do $150. It comes out to $1.24 million in that same time span. Exactly. So if [00:08:00] you do that plus compounding interest combined, now it's, it's, your wealth is going to take off. And so from a long term goal perspective, if that's what you're saying to yourself look, money for future self is a saving, but it's also paying off debt, right?
So if I'm increasing how much I'm doing to that category over time, I'm going to end up building wealth faster. If you, when you simplify it to that simplicity of a financial plan, it's just your stress of your life completely goes off. And so that's what I stress in a lot of the teaching materials is stuff like that, how to reduce that, how to manage risk.
Like when you're looking at financial products, how to actually do it correctly. So that way you're not just looking at the benefits Oh yeah, I'm going to be a millionaire. I was like, no, there's other stuff involved here.
Naseema: a lot of other stuff, but you talk a lot about like behaviors and habits. What are some of those that you consistently share?
Joseph Renke: So one of the big ones is lifestyle career. I see that happen all the time with people, especially graduate students because they get
the bigger [00:09:00] paychecks.
Naseema: Let's define lifestyle creep, because that's one of the words that I didn't learn until very recently. And when I learned it, I was like, damn, like definitely a victim.
Joseph Renke: Oh yeah. No, everybody's a victim of it. I'll give you an example of lifestyle creep. Cause this is a perfect example of this. So we started working with someone, one of the first people I ever worked with at Fitbucks. He and his wife, both doctorate students when they graduated combined, they made about 150 grand and they set up their financial plan.
Perfect. Followed it to the T for two or three years. Didn't hear from him for three years. Calls me back up three years later, he's dude, we're in problems and I'm like, what? He's I'm living paycheck to paycheck. And I'm like, how did that happen?
And he's, I was like what's your guys income?
Did one of you get like health wise or something happened?
He's like, no, we're making $260,000 now a year. So they went from two 50 to two 60, or one 50 to two 60. But when that, that income went up, they just started [00:10:00] lifestyle creep. They just started buying like nicer cars, bigger houses, putting like redoing their bathroom, but putting the best stuff into it.
Best clothes, best restaurants, best all this. And they're still putting some money towards like their retirement stuff. So they felt okay. But then all of a sudden it just crept up on them and it was just like, Oh crap, like we don't have any money. Like, where'd it all go? And now not only did they go from a good situation, but they ended up, they got like 30, 000 in personal loan debt on top of that now.
And it's
Naseema: Huh
Joseph Renke: so that, that's when I say it lies off here. That's the way I think of it is your income is just. It goes up, but it doesn't mean anything.
And that's one of the reasons why with the planning stuff that I told you about the long term, like increase this category over time that helps prevent that because you're automatically doing it as your income is going up.
So that's one of the big behaviors is lifestyle career.
Naseema: Yeah, I'd like to keep it so real I mean like and it's the expectation like for nurses For example, like nurses see those big [00:11:00] salaries when they're in nursing school and instead of being like, all right Automatically from jump I'm gonna set up my account like this and like you said make sure every year I'm increasing it Until I get to that man, so I'm maxing everything out consistently, you know You They're just like, Ooh, okay, I'm graduated.
I make a hundred thousand dollars. Now I need to get the car. Now I need to have the purse, the shoes, the Stanley Cup, like we going, come to the nurses station, popping,
Joseph Renke: Yeah. We
Naseema: that's what they see on social media. Yeah.
Joseph Renke: Yeah. We saw a big time of nurses during COVID because a lot of the that we worked with when in the travel, they're making a ton of money. And they were saving none of it. And, I, there was a individual that, that I used to work with when I was in mortgages and he played football at Nebraska had gotten in, when Lawrence Phelps got in some trouble out there with all that, like he was.
It was just a mess. And I can't say too much because people might actually know who he is. And I talk about a long story short. I was [00:12:00] working with him when Michael Vick got busted for dogfighting
and everybody's Oh, Michael Vick's worth millions. Like, why is he doing this? Blah, blah, blah. And he made a comment that always stuck with me.
And when I started doing behavioral research, it really stuck out. It was like, people don't understand, like he's been doing that his entire life now that he has money. It's just that the dog fights got bigger. That's all that's going to change. So when we talk about behaviors, a lot of times it's look, like if I'm used to spending money, no matter what my background is, we unconsciously inherit what our outlook is with money.
If I grow up in a. Low to middle income family. That's what I'm used to. So even if I get the income, my net wealth is always going to reflect that because I'm just going to spend it. It just, you don't have any of that savings behavior. You're never taught. It's the mentality that, that you have.
And that's why it's okay, if you look statistically, like lower class, middle class, whatever, tends to stay in those buckets. Which is actually funny [00:13:00] because people that are actually really wealthy, their Children actually end up a lot of times losing it because they're never taught those things.
They
Naseema: don't, they're not taught the fundamentals and that's. That's the thing that people talk about. You shouldn't just leave your kids money. You should not just leave your kids money. You need to teach them how to manage that money, to be good stewards of that money. Like it, it goes hand in hand, but you can't just say I'm not leaving my kids nothing because they're just going to mess it up.
Show them how to manage it and more is caught than taught. So if they see you managing money properly and you can walk them through the stuff that you've done. More than likely, they'll be good stewards of their money, and they'll be able to pass that on generationally,
Joseph Renke: exactly. And it's hard to
Naseema: yeah,
Joseph Renke: type of mindset because it's bred into us at such a young age, subconsciously, like we don't even aware of it. Again, going into the research side of things, it's like the whole alcoholic thing or the whole drug thing, like the family stuff, why is it prevalent?
[00:14:00] It's Because it goes from one generation and that's what and that's just what you end up subconsciously doing. So yeah, it's it's big time. That's why we're so stressed about financial behaviors. And that's where I get on, a lot of different people online is they're like, you should have this behavior tomorrow.
And it's try to do everything. Cut every expense in the world. It's you're going to fail if you do that,
Naseema: Yeah, those habits didn't just get created overnight. They stood for a long time and you've been doing those things for a long time. So it does take time, but that's the issue. Just like people want people to change overnight. People think they're supposed to change overnight. And when they don't see those results, they're just like, oh, that doesn't work for me.
That hasn't worked for me, baby. It's gonna take some time.
Joseph Renke: yeah. And money takes a long time.
Naseema: It does, it does, but people are so drawn to the lottery systems and the get rich quick and all of that instant [00:15:00] stuff. Stop it takes a long time, but Joseph, it does not take a long time, meaning that when I paid off my million dollars in debt, right?
When I was paying it off, I was like, this is taking me forever. But then when I look back at it, it was two and a half years. That's nothing in the scheme of things, right? But I was consistently doing those things that aggregation of marginal gains every. Extra dollar I had, I would just put that towards it, but people don't want to do that.
Joseph Renke: Yep. That is, that is correct. And, what, one of the coolest things I've ever seen in a behavioral standpoint. So one of the first girls I ever worked with, she had, she graduated from PT school, making about 70 to 80 grand a year. And she had about 220, 000 in student loan debt.
Naseema: Sound just like me.
Joseph Renke: Yeah. And I was just like, probably an income driven repayment plan person.
Yeah. But I never, when I taught someone, [00:16:00] I never push them one way or the other. I want to see where they're at. And so she gets on the phone with me and she's I'm going to pay this off in five years. And I was like, and how are you going to do that? Because the numbers don't match. And she's I'm going to work overtime, blah, blah, blah, blah, blah, blah.
And she did it. She ended up actually paying it off in just under three years. Like she was just gung ho about it. But from a behavioral standpoint, she had this really cool thing. She went to like back to third grade. She built like this like chain of paper, like the
Naseema: yeah, the paper, I've
Joseph Renke: Yeah, she hung it around her living room.
It was for every thousand dollars and she would literally just pull one because it was the mental, hey, I accomplished something because it's like, she had done that for, three months and didn't see, hey, 200 and something thousand is not 40 now, like overnight, a lot of people just quit, right?
Because they're not seeing that massive jump. And so whatever you can do for those little gains it's a good way to go about it. it's just manipulating the mind to think in that, like I accomplished something and I tried to tell her too. I'm like, look, every one of [00:17:00] those chains. Like you, you paid off a thousand dollars and go get like ice cream or something.
She's no, I'm eating top ramen. I'm like, all right, good luck. Like,
Naseema: She did it and I like that because you don't math your way into debt and you can't necessarily math your way out of it. Just like you said that doesn't make sense. Like you only make an 80, 000, you're going to pay that off in five years. Like that math ain't mathing, but she tricked herself to not trick, but you know what I'm saying?
She. Set her mind on a goal. She had the visual representation of what that meant and she knocked it out. And that's similar to what I did. And I felt like maybe that was one of my money mistakes because I probably could have got all, all of those loans forgiven right now, but then I wouldn't have a story to tell.
Right.
Joseph Renke: yeah,
Naseema: But yeah, like you can't math their way out of it. It has to be behavior. It's not overnight. And that's the thing that people just. [00:18:00] Can't like really get with it's just like You have to put in the work. It's not gonna be hard It's just those daily things that you have to do to reach your goals
Joseph Renke: That's why a lot of people for me, cause my background is investing and that's like my heart. I've been investing since I was like 12 years old.
Naseema: Yes, I was 12 years old. How did you start at best at 12 years old?
Joseph Renke: Called Beckett that was saying, and I noticed that individual cards, if you added them all up, they were cheaper than if you sold it as like a full set. And so I'd go buy all these cars for a penny. It's been like $50 or $60 and try to sell the set for a hundred. And so I've been doing that since I was like, why not? It's free money. And it's, I know from now is it's arbitrage now, but when I was around 12, I started doing like my first real estate investment with my dad.
I had five grand I give to him. And went from there. And then when I was 18, I started getting into like option trading and stock trading and stuff. And so a lot of [00:19:00] people are like, Oh, you generated your wealth because you knew the stock market. And it's I stopped trading when I was probably like 26, 27 and I was just churning money.
Like I wasn't like I made money, but I was like, I'm never progressing anywhere. And it wasn't until I started putting together these pieces with the financial plan that my wealth just took off. And everybody's always like, it's because the stock market. I'm like when I was doing that stuff.
I was just dumping my money into an ETF and I was going out and doing other stuff, like just to learn more on what I could build in algorithms and businesses and all this other stuff, like I was developing what we call human capital, like skills and I can monetize other ways. And I try to tell one of my good friends that like, I taught my buddy how to day trade.
And after three years, he's I now understand what you mean. It's just not, the time is not worth it. And I'm like, Oh, you're right.
Naseema: Listen, like people think like day trading is you get up in the morning, you make a couple of trades and then you go, no, honey, it is a full time job. It is a full [00:20:00] time job. You have to understand, you have to get good at, you have to build certain habits that if you don't have, you're losing everything.
So again, people have this mentality that they can do it, get rich. And then that's it. No, it's just like anything else. And so when I was looking at that, I was like, time. I can just go to work
make sure I'm investing my money and I'll be okay.
Joseph Renke: yeah. And I've been in the world of like investment banking and M& A and all that stuff as well. so like I can, to your point, investing is a full time job. I don't have the time to do that anymore
Naseema: trading is a full time job, investing not so much.
Joseph Renke: yeah, yeah. I used to dig deep, even in like individual stocks and like mutual acquisitions.
And it would take weeks to develop stuff out
Naseema: Yeah.
Joseph Renke: and I can now look at stuff. In the market and say, I don't need to be like a S and P 500. I'm going to do this right now. Cause I can see different trends. So two weeks ago, I'll give you an example. The [00:21:00] market data came out, volatility went through the roof case.
I'm going to go like deep in the market on this. If you look at the VIX, it measures the volatility. It's spiked. I turned around and told one of my buddies that's still a trace. I'm like, take some money for me, short the VIX. Again, I'm not going to go to details on what that means. Bye. It's just like within a week and a half, I made like
Naseema: Yeah.
Joseph Renke: And people are like why don't you do that full time? I'm like because it's just time consuming to find those. Those things don't happen every day. But a lot of these people, they think they're gonna, just wake up one morning and be like, oh I, I can start doing that.
I'm like, do you guys realize that I was doing this every day for 15 years? Like it's not, and I'm like not even compared to the Warren Buffets of the world that are just like, boom, boom, boom. It's it takes a lot of time. It's not overnight.
Naseema: yeah, thank you for sharing that because I know a lot of people That think that same way and just from your expertise and doing it for so long that, yeah, you can spot trends. Yeah, you [00:22:00] could potentially, but it did cost you a lot of time and a lot of education to get to where you're at.
But I want to talk about the businesses that you set up for your daughter and, her plan on what you're doing for her.
Joseph Renke: Yeah. So it was like multi stage. So going back when she was around probably three years old, I was
Naseema: she's 7 now, right?
Joseph Renke: she's now seven. Yeah. So when she was three, we were at Target one day and this little kid goes up to his mom and was like, can I buy this? I don't even remember what it was. It was like, Dominic, can I get this?
And she's no. And he just tampered tantrum. And I looked at my wife and I was like, my daughter will never have a temper tantrum like that when I say no. And she's yeah. And how are you going to stop it? I was like,
Naseema: Mm
Joseph Renke: me a couple hours at home by myself. When we get home, I'm going to, I'll figure something else out.
And when I started thinking about it, I'm like a three year old. They don't know what no means. They also don't know what yes means. They don't know. They just see a [00:23:00] toy and it's what can I play with this? What do you mean I can't take it? And so they have no concepts of money or work to get money than buy no concepts of savings.
And so I said to my wife, I said, look, I think I developed a system where, you know, whatever your daughter, my daughter's doing. We could potentially pay her for different things, and for her, she's homeschooled. And so we said, for her cores, we're going to give her a dollar per core, okay? But, at the same time, she doesn't get to spend all that.
If she has 100 saved, she can only spend 5 percent a month. So she can only spend 5 a month. Once that 5 is gone, done. So we started doing that with her and I would literally take the 5, give it to her in cash at the beginning of the month. And she would take it everywhere. We go, dad, can I have the candy?
It's you have money, buy it. And so within [00:24:00] about, and then if she didn't spend the 5, we would roll it over to the next month. So she'd get whatever she had left over plus another 5 and. So one month, like two, three months into it, she was like can I take the money for next month and buy it now?
I'm like, that's called a loan. This is how this works. Like we're going to, I'm going to charge you 50 percent interest basically. And so she got another 2 and 50 cents, but she couldn't, the next month she had no money.
Naseema: Ha
Joseph Renke: time she ever took a loan. That was it
Naseema: ha ha ha ha ha.
Joseph Renke: so that's what we started doing with her.
And then slowly it became dad, how do I make more? Just besides my cores? I'm like you got to start your own businesses. So she asked me that at a grocery store one day, and it's like, for those of you that are in Texas, those of you that have ever been to Texas, there's like a grocery store chain, so H E B.
Like they're massive. And they have all this stuff inside of them. And one of the things is like these necklaces at the store sells and headbands and stuff. She's dad, can I buy that? I'm like instead of buying that, why don't you go buy a bunch [00:25:00] of them, like blank ones from Amazon, make them yourself, one for you, and then go sell a bunch of them.
And she did that. She made 20 off of it. She's Oh, I like that. And then she started going in the backyard and out here we had these freezes, like randomly in Austin. So a bunch of plants were dying. But we had cantalillies that survived, so they're frost resistant. And so she started cutting out the rhizome roots, and then selling them.
And she made $ 500 off that. And she
Naseema: How does she know how to do that?
Joseph Renke: sorry, she saw her mom chopping away at the root. And she's mom, I want to do that. I'm going to put them on Facebook, like for the neighborhood.
Naseema: hmm.
Joseph Renke: Okay. Like boom, boom, boom, boom. And the next thing she knows, she's dad, this money thing is easy.
I'm like thanks little one. Show me up with your business already.
Naseema: the thing is, is that if you teach kids how to solve a solution, they will never be broke. You know what I'm saying? Because they'll be solution oriented. And that's all that businesses are, right? You're solving a solution for someone. And if [00:26:00] you are constantly looking for ways to solve solutions, you'll never run out of things to do ways to make money.
Yeah.
Joseph Renke: And now she's my wife's she's you're like, we'll go somewhere. She'd like, dad. The store doesn't have this. Why don't, why doesn't, why don't we create a business and sell this? Because I think people would want that.
Naseema: Mm hmm.
Joseph Renke: Write it down a little. And so she starts writing a journal already, like business ideas.
It's funny, but yeah, it was just, getting her to understand like how to earn the money and see it in my hand. This is all I have. What do I really want? And she got to a point, the reason why I started deciding to code it as like a software for people to use is because some of her friends parents were just like, we were at the store the other day and our kids were wanting to buy Legos and Samantha made a comment along the lines of that specific toy I might only play with like once or twice.
So it's not worth me buying it.
And they're like, how the hell did you teach her that at six and seven years [00:27:00] old? And I was like,
Naseema: Exactly.
Joseph Renke: She knows she's not getting it back for another month. Like it is what it is, but it's a cool system because they can only spend portions of what they save.
And so it allows them to see that balance going up in terms of saving and only spending a proportion of it. So there's a savings component, not just. Maintaining a spending side of it.
Naseema: Love that and I love that and I've never seen it that modeled like where you can only. Spend a portion of your savings, so it's incentivizes you to say, because then you can spend more now. She can spend $10 a month now, then $15 a month, on top of finding ways to make more money. It just incentivizes her to save and I love that.
Joseph Renke: yeah, you're like this one
Naseema: would take that on the
Joseph Renke: I was, I was on the, I'll add it on this the other day. I'll I was just adding up her stuff for her and she was sitting next to me and I had this little line item and it was like 6 earned. [00:28:00] And she's dad what did I earn that 6 for? I was like, that's interest. And she's what's the interest. I was like, the bank just gives you money because you have money there. She's so I don't have to do anything for it. She's Nope. She's Oh, I like that even better.
Naseema: Yeah,
Joseph Renke: And I was like, wait till I started teaching about Roth IRAs, little one,
Naseema: yeah, for real. Technically, is she good with her little businesses? Have her Roth IRA right now? Yeah, that's so
cool. That is so cool. I love those lessons, but let's dive in and talk about FitBUX and what FitBUX does how you've been able to help people with that?
Joseph Renke: Yeah. So we built, it's a financial planning web based app.
Naseema: Okay.
Joseph Renke: Okay. And a lot of people are like what's the difference between financial planning and like budgeting, for example, budgeting is more like day to day, every day, like you're putting in stuff. And if you think about it, it's okay if I have a budget, how do you know what goes into your budget?
How do you know what those numbers are supposed to be? A budget [00:29:00] is just showing you where your numbers are historically organizing money. What are you spending on? The plan is what provides guidance. It provides you with what the details should be going into, like your budgeting app or whatnot.
What are you actually tracking? But it also goes into things like what type of products should you be using? So like Roth IRAs, 401ks, what type of mortgages, what type of student loan repayment plan, it feeds all that. And so when I was looking at the market, I saw a number of different problems in wealth management.
One, the way it's set up is based. Financial planners get paid on what's called assets under management. So they charge a fee to invest your money, which between you and I, and I guess everybody watching this and listening to this they don't really do anything like it's all robo advised in the back end of anything.
So it's what are you guys charging that much money for? And it doesn't make sense. If you have a hundred grand. And if somebody has 5 million, it's literally the same process. But the person with 5 million is actually getting charged a hell of a lot more simply because they have more money.
It makes no sense. Like the whole system doesn't make sense. [00:30:00]
Or they get paid on insurance, which like annuity sales and stuff, which one is older people
and two, a lot of them, they ended up doing things that they shouldn't because that's how they get paid.
Naseema: I like trading in and out of the annuities.
Joseph Renke: yeah, exactly.
Naseema: Yeah.
Joseph Renke: That's a whole nother podcast.
Oh, they go on for days about that. But I was seeing that and I said wait a second. Just based on those two models of making money. How does like a 20 to 40 year old get helped and They're like they could pay like a flat out fee of three to six thousand dollars I'm like, what 20 to 40 year old has three to six thousand dollars a year just to throw out a financial plan or this makes no sense and they're like that's the only way we can do it and make money and I'm like there's got to be a better way Yeah, and so that's why I I started building out a bunch of algorithms This was back in oh, nine to 2011 is when I started first building the algorithms.
And AI wasn't really even a thing to the public yet. We used to use a lot of AI on trading and stuff in the background.
Naseema: Mm-Hmm.[00:31:00]
Joseph Renke: So I had a concept of what AI was. And then actually funny story was, is like, when I went into wealth management, It wasn't because I wanted to manage people's money. I was promised a job afterwards and investment analytics for the bank that I was working for once I got my CFA charter that I was going for.
And I got it. And I said, Hey guys, I'm ready to switch. And they're like, you're doing too weird on wealth management. We're not allowing you to. So I quit. And so I dropped all the algorithms. I'm like, screw you guys. Like I'm done. That's why I went into investment banking and M and You wanted the, you wanted to nerd out on it, like you had to
absolutely. I was ready to go.
Like billions of dollars ago, man, is let's do this. And but, but the real thing was, is I had no intentions ever working on wall street either. That was the thing I never It's I love doing that stuff, but I didn't want to work on wall street. So, around 2014, I started looking at a lot of the student loan problems and I'm like, you know what?
These algorithms and this philosophy helped me [00:32:00] with make a lot of money without a lot of stress. I started using it with a lot of my friends and then my wife's colleagues started coming to us. And I was like, you know what? I think I can code this and I think I can engineer this. That's our, that's AI started taking off a little bit in 2016.
Like on the background, I know public just started listening, learning about AI last year, but I started saying wait, I could do this and if I build this and I think I can build this and then it's just built on top of each other. So that's what we launched was a web based financial planning app.
Naseema: It's not an assets under management model. So how does that work?
Joseph Renke: No, it's just a flat fee. So like I said, instead of paying, $ 3, 000 for our financial plan is like $180 a year. So you just come on. We still tell people like the technology's there. You can build the plan yourself, but we are way more efficient at using the technology than you're going to be because we know where everything's at.
So we still say, build your profile, schedule a call. We help you set it all up, whatever products [00:33:00] you need. We help you go and make sure you get the products either in house or if you've got to go externally. We do, some people ask us can you just manage the money for us? So we do have that side of it, but we don't basically don't, we charge very little for it to cover costs and that's it. And then from there, once you have those tools, we just go in and say, Hey, implement your plan and track it. And you just got to go in and say, Hey, I, 401k, I did this Roth IRA to this, your loan payments. I did this car payment. I did this. And if you're following your plan, you're good to go from our standpoint.
Now, if you're not following your plan, we're going to go dive deeper to see where's your money going. But you just track it. Then when you have a life event, you pay off the debt, you buy a car, whatever it is, schedule our call, update your plan. So that's what we have out there right now. We're going to hopefully roll out a lot more in the next two or three years, but we'll see.
Naseema: but I love that model because oftentimes people come to me and they're just like, I just need a financial planner. Oftentimes. They don't,
Joseph Renke: You're
Naseema: they're, [00:34:00] they're they're missing a couple of like really important first steps that if they just put in place, they could do on their own. However, if I do send them to a financial planner, I want to make sure that they are setting them up in this fashion versus putting them into insurance products, putting them into these crazy annuities that aren't going to serve them.
But I think what a lot of people are missing and that you just touched on because you can set up these plans for people and they won't do anything.
Joseph Renke: Mm
Naseema: Even the ones that they're just like, Oh yeah, manage my money for me. Like they are like, like washing their hands. The biggest piece of all of this though, is the behavior.
So I often tell people, listen, you don't need a financial planner. You need a financial therapist, and then after the therapist gets you you need a financial planner. And if you're going to use a financial planner, you need to use a fee only flat fee financial advisor. What the bucks is that's [00:35:00] it.
You'll be set. You'll be set, but they get people from here to there. is a big thing. And even in like my coaching and the programs that I have, I totally went to done for you, do it yourself programming because I get to invest it because. People are like can you just work with me one on one?
I'm like, a hundred percent. I will work with you one on one, but here's the caveat. I just want you to walk through these six steps, check them off. Once you check off those six steps, then we can talk. Cause we don't really have nothing to talk about until you do those things. How many people you think took me up on that offer?
Joseph Renke: Very small.
Naseema: Zero.
Joseph Renke: Very small. Yep.
Naseema: So that's why I love products like this. Like I love products like this. I think that that is the way that all financial planning needs to go into because I feel like [00:36:00] the older models only serve. One, that 1 percent of the population, but wealth should be accessible for everyone. However, people have to get to a point where they understand that wealth is for them.
And in order to get there, there are some steps that you have to take. Like we were saying, you have to put in a little bit of work, honey.
But it's not, it's not hard. It's really not hard. You just have to do the things. But for a lot of people, there are so many mental blocks that they have around money and money trauma that stem from when they were younger, that they just can't do those things.
And that's why I love what you're teaching in the schools because that right there addresses the issues. And I just wish it was just more universal. That we build these behaviors that we understand that it just takes a little bit of intentionality to do those things. And it just takes the aggregation of marginal gains, and it just takes not falling for a lifestyle creep.
But it is just like the actions [00:37:00] you still have to put in the work. You still have to take those actions. So
Joseph Renke: Yeah. Then when I mentioned, I'm hoping to roll out some other stuff, there's actually two things that. I'm hoping to roll out one is on a mental aspect of it. We had started coding. We put it on the show for the time being, just because you start about lifestyle creep in business. We have like development creep where I'm like, I got this idea.
And, but one of them was where like through. Like Fitbox, you would identify, cause I'm big on mental stuff. Like in the morning, I'm going to do this financially. Like I have one incentive today. I want to pay off my debt or I want to make more money. Let's just say that's the thing. It's okay, I want to make more money.
I'm going to make X amount by the end of this year, whatever that is. Okay. And so it's like just a text message that reminds you, Hey, remember, say this to yourself. You're going to do this and you say it to yourself in the morning. And then at night, this is where like the [00:38:00] sports psych background that I have comes into at night you pick out literally, like you say, okay, this was one thing that kept me away from that, but you don't dwell on it.
You only talk about it for, you think about it for maybe five to 10 seconds, identify it,
Naseema: hmm.
Joseph Renke: push it off and then say what's one thing that got me closer to that and doesn't necessarily have to be getting paid more. It can be something like, Hey, I simply had the thoughts. I want to do this, or hey, I wrote down this business idea, or hey, like I learned I read a chapter out of a marketing book today.
Like I could potentially monetize this. And so we were talking about potentially coming out with something like that. And then on the other side of that, we were contemplating actually making it even easier for people to implement the plans because that's the big step, right? How do you actually go to do it?
And so we've started talking to banking partners and opening up a FitBUX bank account, because if we're able to do that, then we can move money for people. [00:39:00] So the minute that you say, this is my plan. We can then say, do you want us to move the money to your student loans? Do you want to do this? Do you want to do that?
And it's literally a click of a button. And so we're trying to remove the friction of people having the excuse of why they didn't do it. And so that's coming. Hopefully we'll see where all that comes into play at.
Naseema: I told you guys Joseph doesn't play any games. Okay. He's solving all the problems for us, but you can see the way that his brain works he understands finances. From the beginning to the end front to back, and all of the things that goes into it, because he has experienced personal experience with all of it and now raising his daughter, he's seeing how, personal finance can be.
Taught. At an early age and picked up on at an early age, and he's using her as a way to inform you guys. And think like the basis of personal finance is not really hard. It's just that a lot of times people just don't know what [00:40:00] they don't know. Again, I think it's not taught. At a younger age intentionally, but that is changing.
And a lot of your favorite personal finance influencers are behind a lot of that change. But the more we can talk about these things, the more we can normalize wealth building, the more it's accessible for people. So I love what you're doing. At FitBUX, I love all the ideas that you're coming up with.
Down the pipeline. And again, like we can go into the weeds on a lot of these issues, but I think that this conversation gives you like the general, like, how do I get started? Let's start you want that 1 thing, right? And it doesn't have to be hard, but we've also built tools to help you and support you, but you have to take action.
Joseph this has been such a great conversation and we'll be back talking about more things in the weeds. We can talk about student loans. We can talk about [00:41:00] financial products for kids. It's we could talk about all of these things, but I think this gave people. That little bit of push and motivation that they need, that if they haven't gotten started or they haven't continued or optimized the way that they like, that it gives them a little boost to get there.
So I appreciate you. Yes.
Joseph Renke: holes on all this stuff. Like even what you were just said about. The financial planning stuff and the financial knowledge, not being taught on purpose. Oh, I could go on for an hour by that by myself.
Cause I'm right there with you on it's being done on purpose. So absolutely.
Naseema: And then how can people get access to
Joseph Renke: Yeah. FitBUX. com if they want to sign up, like I said, it's $189 a year. And then if you guys just want more content, just YouTube at FitBUX, that's our channel. So you guys want to subscribe there. I'm on there trying to push out updates, especially on student loans right now, [00:42:00] for example, because there's stuff all over the
Naseema: Oh, every dang day, I can't even as much as I talk about I paid off my student loans the wrong way. Am I relieved that this is not something that I have to deal with on a day to day basis? Because baby, it is the wild, wild West out there. Anyway, I'll put the links to FitBUX, but in the show notes Joseph's contact information, but again, we'll be back talking about more stuff.
So I appreciate you for coming on.
Joseph Renke: Yeah. Thanks for having me.
Naseema: Of course.
Hey there I’m Naseema
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