One, hello, everybody, and welcome to another smart money
circle update. I'm Adam Sorhan.
With me today is Christopher Mansky, who's founder and
president of Mansky Wealth Management with over half a
billion dollars in assets under management.
Chris, thank you so much and welcome to the Smart Money
Circle. It's a pleasure to be on the
show that I've listened to. So thank you so much.
Oh, thank you, Chris. So always like to begin.
Can you tell us your story and a little how you got to where you
are today, please? Sure.
I have a military background that began at the United States
Military Academy at West Point, and after graduating from there,
I was in the Army for almost 6 years.
I left the service as a captain to be a Merrill Lynch financial
advisor and I was repeatedly recognized for growth at the
highest levels of the firm. I was selected to be a trainer
for other financial advisors and I traveled the country helping
advisors to grow their own world class investment practice.
After about 10 years at Merrill Lynch, I left to open my own RIA
in 2012, and we've been consistently recognized on the
list of the largest RI A's in the country.
Along the way, I became a traditionally published author
and my latest book is published by McGraw Hill.
Congratulations. Thank you so much for your
service. Number one, congratulations on
the success. It's fantastic.
And just curious what is the your book?
I see it behind you. Can you tell us a little about
it, please? Oh, sure.
So that's my first book, The Prepared Investor.
It was compared to Malcolm Gladwell's book Outliers.
So if you like that liars, you probably like the Prepared
Investor since they both describe how there's more to the
story than you than you think. For example, Outliers says that,
hey, readers, there's more to success and check this out.
And the Prepared Investor shows readers that there's more to
investing through crisis. We've all heard, you know, just
stay the course, don't change anything, wait for the down
market to get back. But there's definitely more to
that story. And and actually my second book,
Outsmart the Money Magicians that describes how all of us,
advisors, clients, everyone listening to this podcast is
getting tricked by a financial system that is truly rigged to
the detriment of both clients and the brokerage advisors.
These illusions happen every day.
And, you know, I think that's a book that is going to help to,
you know, maybe raise the bar for all of Wall Street.
Wow, I absolutely love that. So I've got an investment book,
too. But I'm really interested in
psychology, specifically making smarter decisions.
And your magician thing just rung, you know, just a really
loud bell. Are you familiar with the
Archetypes, with King Moore, your magician love or any of
that kind of fun stuff? And Carl Young.
I think I need to learn more about that.
Oh, OK. So I wasn't sure if that's where
you got it from or not, but that I love that magician concept
where it's that that person idea that there's somebody a magic,
you know, kind of like Wizard of Oz.
There's a magic person behind the curtain who knows it all and
and doesn't really, you know, OK, I'm reading your book.
Is it available yet or is it not published yet?
It is available, but it won't deliver till November 6th.
That's when it launches. But you can go on to, you know,
wherever you buy books. Amazon's the most commonplace
and you can get outsmart the money magicians.
Okay, beautiful. Thank you so much, Chris.
That's a that's a delay. I'll get both booked.
Actually, I'm a big fan of reading.
So let's talk about your second, my second question for you, your
investment strategy. Can you please pull back the
curtain and let us know what you what you do, please?
Well, sure. So I think education and being a
resource for improvement is a big part of how we're handling
risk. You know, when we're looking at
investing, we want to make sure that.
These two tools, education and Examination, are available to
me. The old adage measure, twice,
cut once, applies here a lot. A lot of risk exists solely
because of systemic norms. That's how it's always done.
And and if you just ask the hard questions, you know knowledge
itself can be a major game changer and a destroyer of risk.
You know I've seen you know some of the the guests on your show
as they talk about you know value investing versus growth
investing or you know you know the the the level of risk in the
bond market versus the stock market and certainly all of that
plays a role. But I think in the in the big
picture, our first step is where is there a a basic education
required? And how much risk can we destroy
by, you know, making sure that they're aware of not just the
basics, but maybe a little bit more than the basics, or if
they're already passed, a little bit more than maybe we can go,
you know, a bit further, you know, and get into more of the
complex concepts. Education is a big part of our
approach. Interesting you educate the
client 1st and then from an investment standpoint, do you
find yourself more fundamental in nature, technical little bit
of both. How do you actually go about the
investment side of it please? Sure.
We're very much fundamental. We're bottom up.
We look at the individual company and we look at you know
we look at the leadership, we look at you know what is it that
they're selling and how does it fit into the marketplace.
A lot of times you know we're we're making a buy decision
because we think it's very inexpensive and the amount of
income that we'll receive is worth the purchase.
You know the the typical title is the value investor.
You know, we're we're very value based.
I love that. And then you mentioned risks.
Let's go there. What are some lessons you've
learned about risk management, mistakes you've seen people make
or you've made, and how do you adjust or learn from them,
please? Well, sure.
I think, you know, when I'm thinking about the the different
lessons that we've learned as it comes to risk, I feel like that
education plays a big role in that.
So to give you an idea of what I mean, there, there's a lot of
little tricks that it's easy to get fooled by.
And you know, if we just shine a light and ask those hard
questions, we can, I mean, we can really avoid a bad mistake.
And I'll give you, I think CPI is the perfect example.
Here's just a quick example of what I mean.
You know, today the vast majority of people believe that
the consumer price index is an accurate representation of
inflation. You know, the government says
that the change in CPI represents the change in
inflation, but there is a small number of people who recognize
that. Well, really this is like, you
know, the magician has planted the person in the audience.
You know, the the CPI volunteer is actually part of the act.
And and we know this because the government has changed the
method for calculating CPI more than 20 times since I've been
alive. And you know, and just like a a
fake volunteer is part of the act, you know, CPICPI is part of
the government's act because. As they're changing CPI, they
get to use that index to pay interest on debt, you know,
benefits like Social Security to millions of people.
Can you think of any other situation where the same person
who has a debt gets to control the measurement of how much that
debt costs? You know, if you ask any
economist today, they'll tell you that CPI is not an accurate
representation of inflation. And you know, I'm reminded of
Peter Schiff. The famous economist that
predicted the 2008 crisis, he did a fantastic experiment that
all of us can replicate. So what he did is he looked at
the government CPI stats for inflation, specifically in media
and periodical. So that's like magazines and
newspapers. And he saw that it was reported
as 30% for the last decade. So the government says that, you
know, the the cost went up 30%. But then he went and he googled
all the big name magazines and newspapers, since they have the
price right on the cover. And using basic Internet
searches that really anyone can do, he gathered the data for a
lot of the most popular magazines going back ten years.
And it turns out the increase was not 30%, you know, like the
government had said. Instead, it wasn't even 40%, It
wasn't 50%. It was over 130%.
And so, you know, This is why McGraw Hill is publishing my
book, Outsmart the Money Magicians.
And I'm writing about something very serious.
But to me, the lesson here, you know that that lesson that is
timeless. It's not don't trust CPI.
Instead, I think it's the importance of asking the hard
questions. And really, you're shining the
light into the corners and making sure that we've got all
the information. Wow, that is so powerful.
So I absolutely love that. And I couldn't agree with you
more. Even all the quote, UN quote
numbers, the magician stuff to me is just bam, bam, bam, spot
on. So next question, What are some
timeless lessons you've learned along the way that you'd like to
share with the audience? Well, I think the biggest one I
can think of is that there's a difference between value and
income. And as I mentioned before, we
have a value bend you know that's where that's the our
leaning. But I think what you can sell
something for is really different from what it pays you.
And and I think the old adage don't kill the goose laying the
golden eggs. That applies here because it's a
huge mistake to kill the goose. And we all do that every time we
treat income producing assets the same as a nonincome
producing asset. In fact, everyone tuning into
this show knows a friend or a neighbor or somebody.
Who has absolutely done this? In fact, I think it happens most
often in divorce. I do describe this in my book
Outsmart the Money Magicians, because it's such a powerful
illusion. So let's just take a quick
example. A husband and a wife, he works,
she stays at home with the kids and they decide to divorce.
All they have is a house, two cars and an investment
portfolio, and they agree to split everything 5050.
So there's no animosity. Let's just split it down the
middle and be done. Unfortunately, the couple, their
financial advisors, their attorneys, the judge at the
divorce court, they are all happy to be completely tricked
and split these assets in a way that the wife is at a major
disadvantage. It happens all the time and and
the treason is because we say 5050 is determined by what the
stuff is worth. You know, if we look at the
house, let's pretend the house is worth 500,000, the stock
account is worth 500,000. If she wants to stay in the
house with the kids, she gets the house, he gets the stock
and, you know, and goes on to live in an apartment.
The whole system supports this, but it's a timeless mistake.
And the house costs money. We all know that.
She has to come up with maintenance, insurance, taxes.
Where is she going to get that money?
She hasn't even had a a job for years.
The stock, on the other hand, it pays money, you know, and and
you and I, we could agree maybe 2% is reasonable and dividends,
so off of 500 grand, you know, that's like 10,000 a year that
he's getting and she's got an asset that costs at least 10,000
a year. It's a timeless mistake and and
it's a lesson that I think people need to learn, you know,
make your split. With a real focus on the income.
Otherwise you kill the goose that lays the golden egg.
You know Chris, that is such a powerful point.
I know rich Dad, poor dad in the book talked about that too,
where he just redefines the idea of assets and liability.
So people say yeah, my house is an asset and it's like no it's
not cuz it costs cash flow in is an asset which is income.
Cash flow out is a liability. So your house costs you money,
therefore it's a liability until you sell it.
If you sell for a profit then sure it can become an asset.
But the entire time anything that costs you money where cash
is flowing out is a liability and then cash flowing in becomes
an asset. I love, I love that definition
of it. The light bulb in my head went
off and I when I saw that and it speaks to your point which is
just spot on timeless mistakes. Well, I think one of the.
You know, mistakes that I I've run into and that I hope you
know others that are listening to this can can learn from it is
giving balance a little bit too much focus.
So I know that right now it's really popular to say that
balance is the goal. We're supposed to have all of
the different parts of our life being touched in an appropriate
way at all times. But what I've seen in looking
back is that when I have attempted to do that.
That my big really aspirational individual hopes and dreams that
they slow down and that they sometimes even go to the wayside
because they're too big to fit into balance.
And and I think about people that I work with who for
example, there's a client of our firm that is an immigrant and he
came with nothing to America. And when I've talked with him
about balance. He says balance is just a short
path to mediocrity and that it's a selfish path.
Because you know that there are your children and your
grandchildren, and you're supposed to make the world
better for them. And you can't do that if you're,
you know, putting time into every part of the wheel of life.
You know, we've seen all the different parts of life.
And so I know that this isn't a popular statement, but I do
think that there's times when it makes sense to really go deep.
And go narrow and, you know, let the world around, you know, hey,
I'm trying to do something that's hard and you can't do
hard things and have a balanced life.
You know, CEO's of Fortune 500 companies, they're not typically
living balanced lives. You know, military generals and,
you know, at the height of a conflict are not living balanced
lives. Olympic athletes are not living
balanced lives. But that also is because we
think of balance on a day or we think of balance on a week.
But if you expand that like my client who comes from Vietnam,
he says. I think of balance over 100
years. I'm just a part of this and it's
a. Different mindset.
It's not a wrong mindset, it's a different one and I think that
that is a a mistake that I have made is making the mindset of
one day or one week. It's much better to lengthen
that and see what you can do with your time on this blue
marble that that's so powerful, Chris.
So in my book I talk about that it called time arbitrage where
you most people looking at the leaves in the trees which is the
daily charts they charge, they miss the trees and then the
forest is like the annual charts or the, you know, the over
longer term decades and so on and so forth.
But everyone's too busy about what just happened today or the
last five minutes in the market. Oh, the Dow's down to 100, up
500, it's all nonsense. Whereas you step back, you get
that bigger perspective genius. I absolutely love that.
So next question for you, what's the best piece of advice you'd
like to share with the audience and or give your 30 year old
self? You know, I think, you know, I'm
in my 50s now and I can look back and I, because of my
military background, I think I had a very narrow view of what
leadership was. And and if I could go back, I
think I would tell my younger self that there really are
different kinds of leadership that are needed in different
situations. You know, a military leader, you
know, has different requirements and different needs than a
business leader. And a a leader in in politics in
Venezuela is probably going to have to have a different
approach and skill set than a leader in politics in, you know,
local government in South Florida.
You know, it's just, you know, leadership really is a function
of the culture. And I and I think when I was
younger, I had the idea that there's really only one right
way to do it. And this time has gone on.
I think I've seen the, you know, the truth of that.
And you know, I'm glad to share, share with you.
Thank you for asking. No, no, my pleasure.
Absolutely. So this has been really
fantastic. Thank you so much, Chris.
Before we go from a investment standpoint, questions might come
up with respect to building a portfolio.
I know you mentioned income several times and value up.
Can you speak a little bit more, give some clarity with respect
to how you build portfolios, when do you buy, when do you
sell, etcetera? Yes.
So what we're doing is we're looking at publicly traded
companies and you know income instruments that are analyzed by
a third party. So anything that is not going to
fall into that, it's not even part of our process.
And so right off the bat that removes a whole world of pretty
complicated, sometimes very risky, certainly illiquid
investments and and so. The next step is, as I'd said,
you know, education for the person that we're working with
and a real good understanding of, you know, what they're
trying to accomplish. And then as we're making the
purchases, our main focus is are we buying something that is
paying us and we're getting it at a price that it's very clear
to anybody it's on sale. And so that that's going to be
different for different sectors, for different places in the
world. You know, it's not like it's a a
cookie cutter. Oh well if it's you know, A10P
E, well then it's always a buy. You know, it's not like that.
But you know, for example, you know right now I'm certainly not
making any recommendations, we're just talking about the
market. But right now we feel like
telecom is very cheap and you know, we love the idea of
something like an AT&T or a Verizon.
And and so that that kind of gives you an idea of what we're
looking at today. I look great.
Well, Chris, thank you so much. What's the best way for people
to get in touch with you? They could just look up
chrismanskychrismansky.com or manskywealth.com or look up the
book Outsmart the Money Magicians coming from McGraw
Hill. I look forward to it.
Well, Chris, thank you so much and hopefully we'll have you on
again soon. I look forward to it.