“At the awards ceremony, the firm’s president recognized Toby with the ‘Top Producer’ award because he had (drum roll, please) ‘generated over $3 million of gross revenue in the previous year.’ His colleagues responded with thunderous applause and then a standing ovation. Over dinner, Toby and I chatted about changes happening in the investment industry, and after dessert he lowered his voice to share a secret: ‘I’ve got an important project that I need some help with. Can you come over to my office next week?’ Although he had surprised me, I readily agreed. He’d certainly piqued my curiosity: Why would a guy of his stature need my help?
“As I entered his office [a week later], Toby was pacing nervously. ‘Look, I know you’re busy, so I’ll get right to the point,’ he said. ‘Steve, I need your help. I can’t take this anymore. I worked my butt off to build my businesses. For the first 10 years, I owned my business, but for the last seven, it’s owned me. I’m running as fast as I can. I’m working 60 or 70 hours a week. The more successful I get, the harder I have to work. It’s hopeless. I’ve got to get out. I should be happy. I’m taking home almost $2 million a year. But my wife is threatening divorce, my daughter’s in rehab, and my son just got out of jail. My doctor says that if I don’t slow down, I’ll probably die of a heart attack. […]
“‘Seems like you need a vacation,’ I volunteered. ‘Damn right,’ he shot back. ‘I need a long one, but if I’m not generating income, my bills will eat me alive. Do you know how much it costs to run an office like this? I can’t afford a vacation. And, meanwhile, I don’t have anyone I can talk to about this. My wife, my company and the other reps all think I’ve got it made. I don’t feel successful, I feel exhausted,’ he confided. ‘That’s why I wanted to meet with you, Steve. Can you help me find someone who will buy my business?’”
With this story, advisory business consultant Steve Moeller starts the first chapter of his second self-published book, “Endorphinomics: The Science of Human Flourishing,” and illustrates the challenges that many brokers and independent advisors face in their businesses. I’ve known Moeller for many years, starting when I hired him to write “The Business of Advice” column in this magazine back in the 1990s. Even though he’s a bit of a California “touchy-feely” guy, I’ve always admired his ability to help advisors build better businesses.
I have to admit, though, that when I pulled his book out of the Fedex package, I inwardly groaned a little. In my experience, the combination of science and marketing-sounding catchphrases such as “human flourishing” rarely offers much real substance.
However, after reading the introduction and half of the first chapter, titled “The Truth about Money and Happiness,” I realized this book is much more than just another repackaging of basic business principles under new-age labels. It’s a “here’s what I’ve figured out in my time on the planet” book. Given Moeller’s background, experience and unique insight, it’s quite possible that what he’s figured out will help independent advisors overcome many of the challenges they are wrestling with today—including the robo threat.
Moeller’s “personal tipping point” came as he was leaving Toby’s office. “Riding the elevator down, I noticed how my stomach had tightened. Toby’s words rang in my head as I tried to make sense of them. It was hard to believe that someone earning so much money, with every trapping of success imaginable, could be so miserable,” he wrote. “Before Toby’s cry for help, I’d been coaching and training investment advisors to build highly profitable businesses much like his. That afternoon it struck me like a ton of bricks that my advice could make my clients miserable—even while their income was going through the roof! I felt numb and couldn’t think straight. A scary thought flashed through my mind: My current business model needs a major upgrade.”
His experience with Toby started Moeller asking his friends and family about the quality of their lives. His findings shocked him: “I soon discovered ‘successful miserable people’ all around me.” So he decided to find out why. One of the best parts of his book—and I suspect one of the most helpful to advisors, both in their businesses and with their clients—is his exploration of research on people’s happiness, particularly as it relates to money. Happily, he refers to Harvard psychology Professor Daniel Gilbert’s “Stumbling on Happiness,” (one of my favorite books, which should be required reading for all human beings), which shows that our brains are woefully bad at predicting what will actually make us happy.
Moeller tells us that “having more money” is one of those goals that many people are delusional about. He cites a number of findings from the “Positive Psychology” initiative launched in 1998 by Martin Seligman to encourage research that goes beyond “solving psychological disorders” and looks into what makes people happy. Nobel Laureate and psychologist Daniel Kahneman found that “once people achieve a comfortable middle-class income of $75,000 in America (a level of income that enables most people to live a stress-free and comfortable life), additional earnings’ impact […] plateaus.”
Moeller offers considerable evidence for this, but three items stand out. First, according to the University of Chicago’s National Opinion Research Center, “since 1957, the purchasing power of Americans nearly tripled, from about $12,000 a year to about $33,000 in 2011 (in inflation-adjusted dollars). However, during that same period, the percentage of people responding that they were ‘very happy’ declined from 35% to 29%.”
Then, psychologist Ed Diener studied the billionaires on the Forbes 400 list, asking them to rate their life satisfaction from seven (extremely satisfied) to one (extremely dissatisfied). “The respondents’ average satisfaction rating was 5.8, only slightly more than the average American. Of special note, about three out of 10 Forbes responders were less happy than average.”
Finally, in another survey, “the average American said he or she needs about 40% more income to be happy.” Moeller concluded, “Money is a funny thing: No matter how much we have, we never seem to have enough.”
Moeller devotes the next two chapters to the science of being happy: that is, living lives that keep our endorphin levels high. Not surprisingly, research tells us that being happy is a good thing—but a much better thing than you might suspect. For instance, he writes that “on average, humans must experience a minimum of about three positive emotional episodes for every negative one. Above this tipping point, we grow, adapt and flourish. Below it, we languish. The ideal positivity ratio is five to one.”
In the remaining nine chapters of “Endorphinomics,” Moeller tells us how to live “flourishing” lives in three steps. I’ll let you discover them for yourselves and leave you with a story he tells about one advisor he worked with:
“‘If I hire you, how much do you think I can increase my business?’ asked Barry. I told him I wasn’t sure: ‘I can’t separate financial success from quality of life. My strategies work synergistically to build a profitable business that supports a wonderful life.’ ‘Okay,’ he said. ‘As long as this quality of life stuff doesn’t stop me from making more money.’
“Barry has since become the most successful investment advisor I’ve ever worked with. He adapted brilliantly to his new role as a ‘life coach who specializes in money.’ The deeper listening bonded him with his clients and revealed a higher purpose for his work. He changed his business model so he could spend more time with his clients, his stress went down, and his happiness and satisfaction went up. Referrals came in faster and easier, and his business exploded. And, he’s home when his kids come home from school every day, works out 10 to 20 hours a week and takes more vacations.”
For those of you who, like me, have been around the advisory industry for longer than we like to admit, “Endorphinomics” probably sounds a lot like George Kinder‘s “Life Planning,” Susan Bradley’s “Sudden Money Institute” and even Jim Schwartz’s “Enough.” And it is, but with more science behind it and a process designed to find the business and lifestyle that gets your endorphin levels up—and then to help your clients do the same. I don’t see the robos adding that service any time soon.