Our post today is written by Sean Allen, co-founder of WizeFi.
Sean Allen is a financial services executive, business strategist, and consultant who has worked in finance since 1990 in roles ranging from financial advisor to CEO. In 2017 he sold his stake in a financial services company to co-found WizeFi, a personal finance software that helps people make the most of their money, get out of debt, and grow their net worth, month after month. “A million millionaires! That’s what WizeFi can do that I couldn’t do in previous jobs.” When he isn’t leading WizeFi or coaching financial professionals and young entrepreneurs on how to grow a successful business, Sean is likely to be found outdoors with his wife and kids.
I said, “You have two choices: Bankruptcy or $1.2 million in net worth.”
You should have seen the look on their faces.
When I think about it now, it’s amazing to think of how this one experience helped shape my entire career and eventually gave way to what is now a revolution-provoking personal financial software.
I was only about 5 years into my career in finance when I met a couple who said they wanted me to help them “get organized” with their finances. My employer, wanted me to sell financial products that would help the client, but more importantly–make the company money. Unfortunately, “getting organized” wasn’t a solution my employer knew how to charge for, and my boss didn’t want me to waste my time. So, I did what any self-respecting financial professional would do: I met with them at their home instead of at the office.
Unfortunately, within 30 minutes of meeting them, I regretted my decision.
Despite holding engineering and nursing degrees, and an annual net income of $130,000 between them, their financial intelligence was very low, and it showed in every financial statement I reviewed.
Unfortunately, while I was able to identify the problem early into our meeting, I couldn’t get my clients to believe what I was suggesting. I needed to prove it to them. So, I took their financial information home with me to figure out a solution. It took me a whole week.
Excel was relatively new back in 1995, but I learned it and used it to build an algorithm that could illustrate my clients’ future if they continued managing their money the way they had been. The results were not good–it illustrated that my clients were headed for bankruptcy within two years.
The answers are in the cash flow
One thing I teach financial professionals is that most wealth is lost in the way people manage their cash flow. That was certainly the case for these clients. With very little in retirement savings and more than $50,000 in consumer debt, the problem was revealed in their negative cash flow.
After many brain-bending hours hammering away at my computer for possible solutions, I finally created a step-by-step plan that would not only be a solution for my clients, but would later lead to awards and promotions for me, and eventually–to WizeFi.
When I sat back down with my clients I said, “You have two choices: bankruptcy or $1.2 million in net worth”
To relax the confused looks on their faces, I opened up the report I put together and went straight to the graph that contained two lines: their current path and their wealth potential if they followed a new, organized 4-step plan.
I’ll never forget the looks on their faces when they realized their current financial decisions would result in bankruptcy. It was so heartbreaking to see their utter despair–I was thankful to be providing an alternative to the bad news. Actually, I was about to give them awesome news.
When I pointed to the line that represented their wealth potential at $1.2 million in net worth at retirement, I watched despair turn to disbelief. Naturally, they were shocked that the same finances that were leading them to bankruptcy could also lead to a well-funded retirement. I had to show all the math before it finally sunk in.
“I’ll choose millionaire” my client blurted out as the numbers began to marinate.
With nearly 28 years in finance, hundreds of personal client experiences, and thousands more through the financial professionals I’ve hired, mentored and still coach today, I can say that the financial system is broken and there is no industry solution on the horizon–except what I’m seeing in a new movement of financial coaches who help with the most overlooked areas: organization, cash flow management, and debt elimination.
Because every dollar you spend will either increase your net worth or decrease it, there are rules of finance that every individual should know, and so should the professionals who service them. Rules like:
- Our economic system relies on debt—lots of it. Debt gives companies the ability to sell more products than they could if consumers had to pay cash for everything. Unfortunately, this means our economy will have massive expansions and contractions—and the bigger the expansion, the bigger the contraction. Those who understand this will make money in both scenarios. Those who don’t will likely give their money to those who do.
- There are two kinds of interest: The kind you earn and the kind you pay. You cannot build wealth by paying more interest than you’re earning. Until you are earning more interest than you pay (including your mortgage), you are not building wealth. So start there.
- Wealth begins in your mind and ends in your behavior: What you believe about money shows up in the way you manage it. If you believe your ideal lifestyle is about looking wealthy—even if you’re broke— you’re in luck: there’s lots of credit just waiting for you to abuse it. Beliefs are learned so be careful of your learning environment.
- Buy only productive assets: These are assets that can someday provide you with an income. Your home (the one you live in) is not a productive asset.
- Never use non-productive debt: Debt that decreases your net worth (ex: credit cards, car loans, student loans). Productive debt can increase your net worth (ex: loans for investment in real estate, a business you own).
And these principles are built into WizeFi.
The WizeFi solution
WizeFi isn’t just a software solution–It’s a wealth-building environment, designed to help you make the most of your money so you can increase your net worth on a monthly basis.
The software helps take the many moving parts of your finances and organizes them into categories. Then, it will provide a guide for where to put your money each month. You can see your future if you continue doing what you have been and compare that to your wealth potential if you follow the built-in 4-step plan.
And courses like “Debt Free, Financially Free” will help you transition from financially overwhelmed to financially free while helping you feel more confident in your financial future in just the first day of use.
Power of choice
By helping to expose the power of choice, WizeFi can reshape beliefs around wealth potential. And reshaping beliefs means reshaping behaviors that can lead to living a more ideal life.
WizeFi has a big mission ahead, but we will be working with financial coaches to help empower them to grow a successful business as a byproduct of helping more and more clients realize their wealth potential. Together, we can reshape the landscape of the financial industry while helping people make the most of their money.