Ep716: Dana Anspach – Loving a Product Is Different From Running a Business

Andrew Stotz 00:02
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning in our community. We know that to win in investing, you must take risks but to win big, you've got to reduce it. Ladies and gentlemen, I'm on a mission to help 1 million people reduce risk in their lives to join me go to my worst investment ever.com Right now, fellow risk takers this is your worst podcast hosts Andrew Stotz, from a Stotz Academy, and I'm here with featured guest, Dana, and spa. Dana, are you ready to join the mission?

Dana Anspach 00:41
I am ready. I love the mission. And I've had my share of mistakes.

Andrew Stotz 00:47
Well, yes, and I'm looking forward to learning from you about them. And I have some other reason why I'm looking forward to talking with you today, which I talked to you briefly about earlier. But we'll have some fun conversation. But let me introduce you to the audience. Dana is the founder and CEO of sensible money, a firm specializing in retirement income planning, in 2022, sensible money ranked on the Inc 5000 list of fastest growing privately owned companies in the US. She is the author of How to plan for the perfect retirement, a lecture series on the great causes and control your retirement Destiny available on Amazon. She has hundreds of articles online and numerous educational webinars on YouTube. Because of her continuing contributions to financial literacy, Investopedia named her three times the top, the country's top 100 financial advisors, then take a minute and tell us about the unique value that you are bringing to this wonderful world.

Dana Anspach 01:59
Well, thank you for that amazing introduction. You know, my passion is working with people who are in what we call the D cumulation. Phase, that point in time where they need to live off their acorns. And it came about, I tell the story, sometimes it was about 2003 worked for a CPA firm. This couple came in that reminded me of my grandparents. And they brought in 10 years worth of brokerage statements, they were 65. And their money hadn't grown at all in 10 years. And we traced back what had happened over that 10 years. And every time they had expressed a concern, the brokerage just moved them into a new commission product. And I just liked that sparked something in me, I thought, you know, they're 65, it's, they can't go back to work, they can't start over their money. And just a broadly diversified portfolio should have almost doubled over that same timeframe. And, and we have to do better as an industry. So it really kicked off my spark and passion to work with people who you know, are at a different stage of life where the stakes are higher.

Andrew Stotz 03:05
I mean, I was just, I heard you talk on another podcast tell that story. And I just think it's heartbreaking really. And when I think about just yesterday, I was talking to someone person I recently met. And they told me it's somewhat of a similar story, you know, they're, they've got they're working with, you know, in Asia here, it's all about private bankers and all of that stuff. So it's like the prestige angle, hooks them in, and then they don't realize that they really didn't make any money over five or 10 years. Because all that money went to the fees of these, you know, guys, and I have a story of some people that friends of mine that sold the business made a lot of money from it. And then they listened to the banker that gave them advice, and they lost half of half of that money.

Dana Anspach 03:49
You know, I was talking with a colleague in preparation for this podcast about some of investing mistakes, and, and also how our clients that made the money because we're working with them, you know, at the point where they're like, Well, how am I going to live off of this, and, you know, many saved diligently their whole life, some had concentrated stock. And we all hear these stories of people who made money taking big risks, but to keep it you don't, you can't keep taking those big risks. Like if you're by nature, a big risk taker, which most entrepreneurs are and my nature is a risk taker. At certain point, you realize, wait a second, like if I've been lucky enough to have one risk payoff big. Like let's call it quits now and invest in a you know, a boring, stable way that's gonna help me preserve what I've been lucky enough to create.

Andrew Stotz 04:38
That's a great reminder for all the, you know, entrepreneurial minded people listening and viewing that are basically like, Yeah, I'm gonna make tons of money in my business. Oh, yeah. And you may just lose a lot of it after you're successful in your business. Because you're going to take the confidence that you have that you built, rightly so for the work that you've done to create the value in your business. And you're going to take get into this crazy thing called the market. And the market and the people involved in it are all so random and so difficult, that it's very, very difficult to, you know, master that. And so therefore you go in with that confidence and the market takes your money away.

Dana Anspach 05:20
Yeah, it can it certainly can. You have to be very prudent and smart about how you're going to invest.

Andrew Stotz 05:28
You know, I thought about your target market about, you know, 55 and, you know, people that are going into that phase, I thought, you know, why, why would you target that, you know, like, I thought, oh, Target, there's so many advisors like I target young people, people were making good salaries and stuff. And then, then I was like, the, my parents, my dad worked for DuPont, and he works all of his life for DuPont from 1965 until he retired. And my mom was a housewife. So they raised us on, you know, a corporate salary. My dad wasn't like a senior executive, he was a salesman, and he did a good job. But it's not like he was making a ton of money. But they made the right decisions. And somehow they ended up retiring. In North Carolina and Charlotte at, you know, a little bit early, I think it was 58, maybe it was 60. And so they moved to Charlotte, and my dad worked for DuPont, and in Charlotte for a while, but then eventually, they retired. And they found an advisor there, and they work with that advisor. And the first thing that advisor did was say, you know, you've got, like, 60% of your portfolio is DuPont stock. And what would happen if DuPont went down by let's say, 70%, and it went down to, you know, X, and my dad looked at the guy, and my mom tells the story, my dad looked at the guy and said, it'll never go down to x. And he said, sure enough, many years later, it went down to x. Luckily, the advisor had gotten them out, and had diversified that and my parents live 22 years on their retirement savings and investment and pension and all of that. And that's a single family, you know, that's a single earner with three kids. And they were able to do the things they wanted to do in their retirement. And when my father passed away, my mother was in a rehab for her stroke. And I brought her to Thailand seven years ago. And we had the choice of leaving, you know, staying in the US and using the insurance and stuff or coming to Thailand, it's a little bit more cash, you know, it's not getting the insurance benefit so much. But when we looked at the money that they still had, after we sold the house, it was enough to say, Mom, you don't have to worry about money for the rest of your life, between the money that my mom and dad had saved and accumulated. And, of course, being with me, you know, I'm going to make sure that that's safe. Yeah. And that is the dream. Yeah. And so when I heard that you're focusing on people who are entering that retirement phase. I just thought, God bless you.

Dana Anspach 08:05
Well, thank you. I mean, that's a wonderful story about your parents. And you know, it illustrates exactly what I said the stakes are higher. And you know, as to why you can put so much value on someone at that stage, like literally we can be the difference between them running out of money, or having a comfortable retirement. And so, that just a means a lot. And it imparts a lot of you know, gratefulness to our work. Like every day we feel like it's such an honor that people trust us with these decisions and we know the difference that our work is making so it's it's saving lives it comes from the heart

Andrew Stotz 08:48
the human lives I mean, I'm telling you my mom's I've talked to her what would it be like if we if you basically had run out and we were sitting in the ration it's a whole different ballgame. So that's why I really was excited to get you on to hear more from you what you're doing and and to get to know you and I think for the audience, you know, I'll have links in the show notes to all of your you know, stuff so they can follow you and get your books and do all the other stuff and see the video so I appreciate that. But now it's time to share your worst investment ever. And since no one goes into their worst investment thinking it will be tell us a bit about the circumstances leading up to it then tell us your story.

Dana Anspach 09:28
Oh my goodness. So as you and I spoke, it was hard for me to pick because I am by nature a risk taker and but the best story and the worst in terms of time and money. Started. My best friend, one of my best friends Her name is Lisa. And she got married and moved to North Carolina. And her husband in her were well her husband mostly was a founder in a fitness franchise called Rockbox fitness, which I love. So Let me get this straight I love, it's the best workout I've ever been to. Now, I'm a financial planner and have been doing this since 1995. But I also taught aerobics for about 12 to 15 years of my life was in gyms, my whole life grew up in a gym. So fitness has been part of my life. Well, I flew out to North Carolina, I was, you know, with my fiancee, and we were checking out this, you know, go into rock box, and I was like, This is amazing. This is the best workout I've ever been to, like, how much does it cost to open a franchise? Well, we started looking at it, and it seemed reasonable, I think, you know, a franchise fee for one at the time was maybe 30 or 40,000. And there were none in the Phoenix area yet. And so next thing, you know, we're off, or like, that's it, we're gonna open a franchise. And so, you know, what do we do we sign up to open for because I understand economies of scale, and I'm not going to make money on one, like, if I'm gonna have one in order to make this viable, like, let's, let's do four. So we, you know, find our location, this beautiful location, a mile from the house, because, you know, I'm running a full time business here at sensible money. And so, you know, how am I going to help with that, too, and, and so, you know, everything goes great, we do the pre sales, we follow the program, exactly, we open our wonderful franchise, October of 2019, and actually had, at the time, the most successful franchise opening that they'd had so far. So, you know, things are off and running. But running the gym was, oh, my gosh, exhausting. You know, here I am thinking I'm just going to be able to handle the financials, the payroll kind of, you know, stuff I can do in the background. But I don't own a retail business, you know, sensible Money isn't the kind of business that people walk in, and you have to be open. And if someone calls in sick, there was still got to be someone at the front desk, and holy cow is a whole nother world. Not only that, but we were open less than six months when COVID hit. So Arizona shut us down, they shut us down the first time for, I think, eight weeks, we were able to reopen for about four weeks and then got shut down again. And at that point, I was like this, this, I can't do it like this isn't going to work, we you know, mutually decided we this isn't going to work. And so eventually, we were able to find a buyer for the franchise that substantially less than what I had put into it. I think, you know, getting it all open was probably about 400,000 We found a buyer at 100,000. So big financial loss, but also in hindsight, it's all the time and energy. You know, if I put that time and energy into my existing business, you know, Oh, wow. Like so. And the funny thing is, I've had this conversations with clients, where, you know, well, they want to go off and do some crazy this or that. And I'm like, you know, if you just double down on what you're doing already, like and maximize efforts there, you know, and I remember, you know, one of my fellow business owner clients was like, wow, that's like the best thing you ever said to me. I go, What do I do? Do I listen to that advice myself? No, like, What on earth was I thinking? Now? I say all of that. But I do have to say from a learning experience, like wow, you know, like getting another MBA. I mean, you know, you're and for someone to say, Well, you've run one successful business, you can do another, I'm gonna say no, you know, they can be completely different animals. You know? Yes. COVID hit hit us hard, and the timing couldn't have been worse. But even if it hadn't, it was very clear. Like, this isn't for us. And so, you know, I could probably tell that early on before COVID even showed up like, you know, whoa, what have we gotten into what have I gotten us into here?

Andrew Stotz 14:28
How did you miss it? You know, I mean, there's a lot of things that became obvious once you got in it. How did you miss it in the lead up to it?

Dana Anspach 14:37
I think a couple of things. You know, to this day, it's the best workout I've ever done. Like I love it. We love highly effective love the product. You know, we had people go through the six week challenge where the goal was to lose 6% body fat or 25 pounds. We saw so many people accomplish this. Like truly It was amazing. So loving it. product. And being thrilled with running the business and the daily work that that entails and making it profitable enough to justify those are two different things. And so, you know, again, the same thing, we've seen clients fall in love with the stock that they love the product, but it doesn't mean the business itself is going to be a highly profitable business, profitable business. So, you know, that I would say would be number one, is really, you know, I truly fell in love with the product. And there are still Rockbox franchises out there. I wish there was one, you know, the one here ended up closing down, I hope it comes back, because, you know, it is a phenomenal workout. Yeah, I would say that's number one.

Andrew Stotz 15:50
Maybe I'll just share some my thoughts on your story. I mean, the first Yeah. If anybody listening or viewing this is thinking about opening a second business, I have a challenge for them. And I have a challenge for you doing my challenge to you is, why don't you instead, create a new revenue stream in your existing business. And it's top of mind because I just taught an executive MBA an MBA Group, about 125 students here in Thailand, who are the incoming students, and they have a whole six week program where the alumni comes and they have a business. And the alumni shows all the information about their business. And then these new intake MBA students and Executive MBA students assignment is come up with a new revenue stream for this business. And I went to speak to them because I got that challenge six months ago, nine months ago. And but I also would say, and make it sure it's five times higher price. And that's my challenge to you and everybody who says, I'm gonna go start a new business, no. And so I took that challenge, and I created a product that's at least five times higher in value to my business. And I've been selling it and it's been amazing. And there's, you know, there's some great books out there to help us to think about this, I think $1 million offers by Alex for mosey is probably one of the best books on this. But I challenge down everybody Yeah, $100 million, offers Alex for mosey in, I just, you know, one of the best books of all time on sales. And so I challenge everybody to do that. Now, the other thing? Yeah, go ahead.

Dana Anspach 17:47
I was gonna say it's so interesting, because, you know, we do a very thorough financial planning process, our price point is 6900. And, you know, it covers all of the nitty gritty stuff that people really getting ready to retire, want to recover, it's a want to want to cover. Well, when I was opening the gym, I would find myself there, you know, struggling to sell a $600 and, you know, gym membership or arguing with someone over a $10 late fee, or, you know, and I remember like thinking what, what are you doing? Like, you know, what, like, how is this? How did this happen? And so, what you said makes complete sense, because it's like, if I was gonna open a second business, what direction and Oh, my God, this is just, it was in Santa Saturday, it was like you were living this dichotomy every day.

Andrew Stotz 18:39
Yeah, I mean, it's such a great story. And I think the lessons are great for the listeners. So that's let's go back in time a little bit and think about what you've learned. And think about this question that is based upon what you learned from this story and what you've continued to learn. What one action would you recommend our listeners take, when they face the exact same situation to avoid suffering the same fate?

Dana Anspach 19:06
Oh, my gosh, that's a really hard one. Because the first thing I'm going to say is if you have a financial planner, run it by them and listen to them. Because, you know, I was talking with my fiance the other day about, you know, some other crazy thing I did that didn't turn out. And he was like, Oh, you didn't do what you tell your client to do, did you? And so, you know, the one theme that anything I've done, that was a risk that hasn't worked out is it is not what I would have said, for my client to do. So when I think about, you know, very prudent advice. You know, I think crypto for example, is an amazing technology. And I went out and did this video when it came out. But I said 1% Like shouldn't put more than 1% in because you're reading about people, you know, mortgaging their house to do this. But what did I do? Well, I put more than one for or Senate. And, you know, so you know, I look at things that I've done because by nature, I think us on entrepreneurs are risk takers. And I think, well, you know, the nature of the client I work with, I would never want to be responsible for some of these things that I know, they can turn out badly. But for somehow, when it's myself, I'm like, oh, you know, I'll just take this chance. And so for me, the number one rule that I have decided after this was, you know, no, like, if, if it has to fall within the parameters of what I would tell a client to do. Now, that's hard to convey to listeners, right? Because not everybody has a financial planner, but most of us have someone in our head, it might be a parent, it might be a therapist, it might be that best friend, who's always that one who's like, hey, you know, and so it would be well listen to them, you know, don't just react and we tend to, you know, I used to call those people, my balloon poppers. You have this bright idea, and someone comes along, and they're like throwing darts at your balloon and taking all the air out of your enthusiasm. And, you know, but it's like, well, just give some credence to that, like, just for a second, put that hat on the little lens that they're looking from, and say, Okay, let's think about this. I call it sometimes asymmetric risk, like, yes, there could be this potential. But if it doesn't work out, you know, what's the flip side is all that time and money or money, you know, we see clients, that might take a risk on something that, you know, maybe the stock could go up 50%. But if it doesn't, their whole financial plan doesn't work. Like that doesn't make sense. It's not logical to take that kind of risk. So who is that person that can help you see that point of view?

Andrew Stotz 21:57
It's funny, because I have a friend in the US that just set up an appointment and called me and we just had a call yesterday, he says, You're the one I go to, because you're the rock. And I'm like, Yeah, I just don't fall for the bullshit. And, you know, hey, I've listened to more than 700 stories of loss. So you know, I've got a little bit behind me, I would also highlight something that I always say at the end of this podcast, which is create, grow and protect your wealth. And I separate creating and growing, we create our wealth, either through our salary as my father did, and saving a portion of that, or as business owners, we create wealth through the profits that we generate from the business. And the result of that is that's our wealth engine, or our wealth machine. Growing our wealth is a whole separate thing of how we grow that carefully in the market. And then, as we particularly get to the age that you're dealing with, is really critical to protect. Let me ask you the next question, which is, what's the resource of yours that you'd recommend people, you know, go listen to view by get, you know, something that you would like to share?

Dana Anspach 23:01
You know, when it comes to investing, my go to book is four pillars of investing by Bill Bernstein. I mean, the behavioral finance components of that, it's just rock solid stuff. It's not a new book, but it's timeless. I think, if you're looking about you know, how you invest in the markets, and you want a good perspective on that year, you're not going to beat that. And I also, it's not overwhelming for younger generations. I also love the behavior gap by Carl Richards. So I think that is, you know, a great book. And honestly, you've probably read it. But one of the best books I've ever read is the psychology of money by Morgan Housel.

Andrew Stotz 23:47
guest on the show.

Dana Anspach 23:48
Yes. I'm sure he has been you know that. That is the book I go, I wish I would have written that.

Andrew Stotz 23:56
Just amazing. And just, I mean, I appreciate those recommendations. But I also want to hear from you about where someone who likes what you're talking about. Where should they go to get more of you.

Dana Anspach 24:11
More of me? Well, you can go to sensible money.com. And from there, we have a learn page, and all kinds of resources you can download. We host a free webinar about every six weeks, you'll find that on our website, we have free reports you can download. You can go to Amazon, if you Google my name Dana on SPA, I'm sure that's in the show notes. You will come up with all kinds of content, you can put it into Amazon or just into Google and it will get you to some of my resources.

Andrew Stotz 24:41
Fantastic. And for the listeners and viewers out there. Morgan Housel was episode 255. And the title was a successful value investor focuses on why a stock is cheap. Let me ask you one last question. What is your number one goal for the next 12 Months, besides starting a new revenue stream that's five times higher in price and your existing products.

Dana Anspach 25:06
I don't know that that was a goal of mine. So our number one goal, we actually we just hired a Chief Operating Officer for our business. And so it's really focusing on the next growth phase for the business. So when you are talking about reinventing, you know, a new product line within your own business, where I have found I can turn my entrepreneurial efforts is always reinventing or taking my current business to the next phase. So I've figured that that's where I have to channel my energy rather than looking outside. And so we're super excited about that. And that's really the focus right now is what, you know, what's that going to look like?

Andrew Stotz 25:49
Exciting, and I was just thinking about, you know, the, the additional, I don't know, three to five hours that you spent on your, you know, on the, the gym that you did? And what if you just spent that on your business for the next six months. So for all of us, you know, it's a great reminder that, you know, allocate our resources, right, where we know, we can make, you know, great return. So

Dana Anspach 26:15
yeah, and your resources aren't just time and money. You know, lately, I've thought a lot more about energy. And energy, we even talk about that here, in our firm that, you know, the amount of energy you have is impacted by all kinds of things going on in your life, we have people that just have babies, or they're dealing with a parent that needs to go into long term care, or, you know, their spouse just lost a job and, and so we really ask people to be cognizant about that. And it's okay for those energy levels to fluctuate. But when you're looking at taking on outside projects, that's been a huge realization. For me, it's not only time and money, like, you know, something sucks a ton of energy out of you. Even though it might not take much time or money, like you got to drop, it's not good for you.

Andrew Stotz 27:01
Energy as a source, really, when you run out of energy, you know, time runs out. And one of the fun things to think about is where does energy come from? And I've thought about that a lot and thought traced it back and I realized energy comes from the sun. Well, that's true just about that. Because the sun, we don't have plants. We don't have animals. We don't have food. We don't have everything. So do your sun salutations in the morning listeners. There you have it another story of loss to keep you winning. Remember, I'm on a mission to help 1 million people reduce risk in their lives. As we conclude, Dana, I want to thank you again for joining our mission and on behalf of East Arts Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Dana Anspach 27:53
No parting words. But it's been wonderful to be here. Thank you.

Andrew Stotz 27:57
We love your story, and we appreciate it. That's a wrap on another great story to help us create, grow and protect our well fellow risk takers. Let's celebrate that today. We added one more person to our mission to help 1 million people reduce risk in their lives. This is your words podcast hos Andrew Stotz saying, I'll see you on the upside.