You want your children to be successful, and you’ve always worked hard to raise them with strong values. Mark Aho, author of Building Wealth and Living in Faith, believes that you can help the people you love achieve financial security without compromising your religious and moral principles.
As a father, financial planner and a person of deep spiritual convictions, Mark believes that faith should be the center of everything in life, including money matters. In this episode, Mark offers his lessons on life, grace and money that you can pass along to the next generation. This is a plan for your loved one’s financial future and a meditation on faith, wealth and family.
Mark Aho: I came into this world in a unfavorable situation. I had a birth mother that was pregnant with me, she was extremely poor, she was living on bread and lard—and I had a birth father who didn’t want anything to do with her. So I ended up in a goodwill farm, or basically an orphanage.
When I go back and think about this very deeply, the one thing that’s just an absolute big occupier of my heart and my mind too—and it’s never changed and I’ve always known it—is that God is a big part of my life.
I think it’s a little bit of a miracle that I was able to have a life and to be given a life. Not only, not to be aborted, which may have been convenient thing to do, but I was guided into a family that cared for me and loved me and gave me the necessities of life to grow.
My faith has always been a strong part of my life, and in that process as I grew up and learned a number of things.
In that process, I got married, I had some children. When my children were young, I wanted to find out some medical information about them or about myself, so that they would have the right information for themselves as they grow. It’s a long story about finding out more about my birth roots and so forth.
In that process of looking out for health issues and things for my children, it sort of invigorated my mindset about a lot of life experiences as my children grew and grew up and as I had the richness of those experiences to pass along to them
Everybody has a rich life story and things they’ve learned, maybe some dos and don’ts in life.
“Every parent wants to share those with their children.”
As I was going along, I was trying to explain things along the way, but there was more. There was always more. Then as my children got older and they got busier, it seemed like it was harder to tell them more. That’s one of the reasons why I kept thinking about this book.
It’s sad to say that sometimes in some lives, you never get a chance to physically sit down and tell your children the things you want to tell them. As part of that realization, it came into my mind and that if that did occur, I would like to put something on paper.
Maybe they’re too busy right now, but maybe if something did happen to their mom or their dad and they had something on paper, they might read it and read it intensely. Then I will feel that part of my mission is completed, to get to what I wanted to tell them in paper. That’s part of it.
Faith and Miracles
Charlie Hoehn: Maybe the best place for us to start is with the introduction in your book. Talk to us about the very first part of the book?
Mark Aho: I mentioned a little bit about faith, and faith means maybe some different things to different people. For me, it’s always been the fact that God is everything. It isn’t that God is maybe for an hour on Sunday. But in reality, God is everything. It isn’t something that I have found that you can turn off and turn on. It’s just always on.
Take any issue in life. If God isn’t somehow at the center of it, it may not go in the right direction. A lot of times when I’m talking to different people, they’re surrounded with negative energy. It’s sad, because just a small amount of positive energy in your system attracts more positive energy and takes you in such great directions that you couldn’t even think about it.
Charlie Hoehn: Could you give an example of that Mark? Maybe in your life where you realize that was happening for you?
Mark Aho: Sure, you know, along with positive energy comes the word trust. I can tell you that I’ve been in a number of situations where I was maybe fearful or I was scared, I was concerned, I was worried. Those are all negative things.
If you think about it, very simply, when Jesus walked on this earth, when somebody had all the faith in the world that they could be healed from whatever sickness they had by just touching his cloak—they had that positive faith, that positive energy—you know what? They were healed. They were healed only because of their own positive energy and faith. Jesus said that many different times.
So I’ve had instances in my life where things hadn’t worked out the way that I wanted them to, but when I can think of positive side that God is everything, the direction that I need to go is direction that he’s leading me right now, even though I might not think so highly of it, I found that over and over again to actually work out really well.
When I think of belief and I think of faith and I think of the future, so many people and so many young people may be worried about something that’s going on in their lives. If they can reach out and with some sort of faith, and just an imaginary way, feel that they are touching the cloak of Jesus with that positive faith, wonderful things happen.
Faith and Finances
Charlie Hoehn: Not only is a legacy piece for you and your family, but it’s also a book about wealth and how you’ve helped folks with their financial decision making. How does having faith help with finances?
Mark Aho: It’s a huge, it’s a number one item. We take a look at faith and say well, we have six principles that we follow here, and three of them have to do with non-financial issues, but they have to do with behavioral issues. Those three issues are faith in the future or trust, that’s one; patience is two; and discipline is the third item.
When we take those three items in building wealth, they’re so important because they relate to the type of behavior we have when markets do different things.
For instance, let’s just focus on faith in the future. If you have no faith in the future, you absolutely shouldn’t invest your money, because you have no faith in anything good happening in the future.
Sometimes somebody will tell me that they don’t want to invest their money because they either fearful of the ups and downs of the market. From time to time, somebody to tell me all the good ideas are all here now—there’s nothing new to be invented and I can’t see investing in the future.
If you feel that strongly about the future being so bad, don’t invest your money in anything. As a matter of fact, find a warm climate, buy lots of seeds, good land that you might be able to grow some crops, good fishing pole and lures if you’re hunting. You’ll need ammo and bows and arrows or whatever you’re going to use.
“Even then, if it’s so negative, maybe you won’t be able to grow a crop either.”
That’s from the far negative side, but all you have to do is look at history and go back a hundred years and look at all the terrible things that may have distracted you from ever investing your money. You will find a reason all the way through not to do it.
You can look at the statistics if you’re just going to use the overall stock market, going back a hundred years. You’ll take a look at what a dollar did in the stock market, take a look at what it did sitting in a treasury bill, look at it how it did just sitting in your back pocket, you know? The facts are the facts.
The Big Idea Behind the Book
Charlie Hoehn: Let’s start to shift more into some of the chapters, the big ideas that you teach.
Mark Aho: Unfortunately, our emotional side gets fueled to some degree that we sort of gravitate away from the truths and to get into the myths. But the idea is that there are just some basic truths.
There are basic truths about how money works.
Hoehn: You’re talking here about that money is not the root of all evil. It’s greed or the lust for money, right?
Mark Aho: Yes. In that chapter I talk about humility, I talk about discipline, I talk about responsibility to family, and I talk about tending your own garden.
Humility is one we all experience. I think in life, we can learn a lot from those times that maybe we’ve been humiliated. But the problem a lot of the time is you want to forget about it.
The lesson there is that that’s when you really learn, that’s when you’ve gotten through something, a life lesson of some nature. If it didn’t work out, it failed, it’s so rich with a learning lesson.
“Wherever we sit today as the aggregated summation of every decision we’ve made in the past.”
Sometimes, we don’t want to think of those decisions. It’s not that we want to mess our mind up with thinking of things that didn’t work. It certainly does help when we get into the next side of that and say, “Well that’s fine, we’ve learned a lot, right? What is your next decision?” That’s what’s most important.
Discipline is often a hard thing, especially if we look at the money side of the equation. Maybe if you watch HGTV, you’ll see a young couple buying a huge house with everything in it, it’s their first house and they want it to be perfect. I didn’t grow up that way. I feel that you know, you get yourself maybe in trouble with those sort of decisions. You want to buy something that you can afford.
The idea is to buy something that you will be able to have excess money for other things so you don’t get house locked. It takes discipline to not buy the big house.
On the family side of the equation, I talk about the responsibility to our families. I look at things on the basis initially when you get out of college, if you’re single, you should be thinking about making sure that you’re able to take care of yourself, financially.
If you’re married, you want to make sure that you can not only take care of yourself but you want to take care of your wife. If you have children, you want to take care of yourself, your wife and your children. I think that’s common, right?
Not only taking care of them for today, but you have to think about the future—especially with kids and especially with all the wants and needs that they have. I see a lot of times or buying all these things, and maybe they don’t need all those things. Maybe they’re wants not needs. It can make a difference later in life.
Maybe there are some other things that you should be thinking about.
For instance, maybe you want to help your children with their college expenses.
Rather than spending on maybe some toys that last six months and then break, maybe it’s something simpler to put some money into their college fund. That’s thinking of the future.
Do Not Be Afraid
Charlie Hoehn: Do not fear is the most commonly, it’s the most common phrase throughout the bible. It’s said I think 200 times or something. You have a section in this chapter where you say you – don’t be afraid to invest your money for the exact reasons you just laid out.
Mark Aho: Exactly. Not only about investing your money say into equities and your 401(k) and so forth, especially for young people that have somewhat of an entrepreneurial spirit. A lot of times, they’re afraid to step out and maybe take some risk.
When you’re young and you have great ideas and you have great ambitions and you have passion of maybe starting a business or some type of entity, I just strongly suggest or advise that if you do have those inklings that you do it.
“If it doesn’t work, that’s okay. You’ve learned.”
Maybe it just needs to be tweaked a little bit, maybe you need to do something different but when you look at really creating not only wealth but creating a lifetime of work. And not necessarily even work but something that you want to do every day that you wake up, jump out of bed, and can’t wait to get going at it. That is such a freeing and wonderful place to live.
I say to young people, if you have an idea, you want to be in business, you want to start a business, do it. Don’t be afraid.
Charlie Hoehn: Yeah. I love it. That alone I think is worth the cost of admission to listening to this and reading your book. Let’s jump to Chapter Two, ‘Making Wealth Purposeful.’
Mark Aho: You know, when we sit down with a client and we have our discovery meeting, it’s very interesting that we get these ‘aha’ moments in that meeting. One of the things I found out, I don’t know, probably about 30 years ago, is I created a value system for my own life.
It is something that is in the beginning of the book in the introduction, and it talks about sitting down and spending some quality time and deciding, what is your personal life value system? I almost hate to use the word system, but your values, your core. For instance, I have 12 items that I wrote about 30 years ago.
When you do this right, it never changes.
I think that as you go through life, you can get off track. I say, write these down, laminate them, carry them in your pocket, always have them available until you memorize them, because there are times that we get off track. Having something of this nature keeps you in the right space.
I just wanted to mention that when you have purpose, when you have values, it sort of fits in with the making life purposeful or making wealth purposeful.
“If you were going to create wealth, why are you creating wealth?”
The why is very important before you get into the how.
I think about it in the nature of saying that well, I want to create some wealth, not only to take care of myself but I want to take care of my wife. I want to be able to take care of my children. When I’m able to take care of all them, that’s purposeful. Beyond just taking care of them for today is maybe taking care of them for a little bit beyond today.
If that’s all in order, then I look at my family—it might be my mom, it might be my sisters, it might be aunts, uncles, cousins—there is a family circle. There’s always somebody within their that has a need, maybe a desperate need.
If you look at wealth, you know, you can look at it on the basis of it saying, “Well gee, you know, we create all these wealth and you know, what for? I look at it and say, I want to create it to help other people. Naturally, we’re helping ourselves, we have a quality of life ourselves, and that’s important. But I think that if you’re very productive, you can create more wealth than for your own needs.
Helping your extended family beyond that is then maybe helping your favorite charities. There’s just such a phenomenally good feeling to be able to help some of the favorite charities in your life do what they need to do. It’s very fulfilling. And then one notch beyond that is possibility of having enough wealth that will help multiple generations beyond you.
Some suggestions that I’ve looked at is maybe a family that has created some wealth, creates a donor advise fund, there may be some tax advantages, move money over to a donor advise fund in the now.
But if your legacy plans are to help multiple generations beyond yourself, the donor advise fund isn’t necessarily for your family. It’s for other people.
It’s for charities that that you believe strongly in. It might be for your church, it might be for the homeless, it might be for some type of food, shelter, housing, whatever that might be. I can’t think of a better way to get into the wealth equation than to think about it on a legacy basis, above and beyond you, your wife, your kids, your extended family, into charities and if you’re able, into multiple generations beyond you.
I can’t think of a better feeling of walking this earth, getting the time that we’ve had on this earth but helping people many years beyond the time that you were actually even here.
What a great feeling.
Choosing an Advisor
Charlie Hoehn: Let’s talk a little bit just briefly, not too much, about choosing the right advisor.
Mark Aho: I used to talk about putting this stuff in a jar. You have some rocks, you have some gravel, some sand, then maybe last, a cup of water.
Let’s say that we’re looking at all the issues. We’re going to muddy our mind up. So I’d simplify that to just, let’s just look at three big rocks that need to go in that jar first.
The first one is trust. If you’re interviewing three or four advisers, use your discernment. See where that needle goes on the trust side of the equation.
“Obviously, they’re dealing with your money, and somebody that’s trustworthy is very important.”
The second rock is competence. Sometimes it’s hard to measure because we talk about a lot of buzzwords and everybody seems to be smart, you know, I guess you might have to look at some of the academic affiliations that they have, you know, what kind of – where they went to maybe – the type of college, degrees they had, do they have a master’s degree. Also, the degrees in their field—are they a CFP (Certified Financial Planner), are they a CIMA (Certified Investment Management Analyst)?
The third item, very important, is the relationship. Do you enjoy the relationship? What would be worse is say, “My gosh, I got to see my financial adviser, I hate going there, the guy drives me crazy.”
Versus, “Okay, great, I love the conversations and we can connect in our conversations. Not only does the advisor provide very good information and great planning and helps me with the issues I have at hand, but they listened very intently to everything that I’m saying as well.”
Initially, I always tell somebody, even when somebody comes in here new and we do a discovery meeting. I tell them: you should go and talk to two or three more advisors and make sure you get the fit that’s best for you. From the advisor side of the equation, they want the best fit as well.
The Emotions of Creating Wealth
Charlie Hoehn: Now, let’s talk about the how. Creating wealth and managing it and protecting it. What are the first steps you recommend to the people you work with?
Mark Aho: Well, one of the first things in creating wealth is you have to spend less than you make. You can’t create any wealth. There is the lottery and there’s inheriting money, and you know, there are some other things that could come into play there.
But no matter what you do, even if you’re very successful and you make a lot of money, if you don’t save any of it, you’re really not creating wealth. You’re probably buying highly depreciable items that we’re going to go to zero as time goes on. That’s a first really important thing.
The coupled other items that fit into this, and sometimes somebody will tell me that I’m very biased on equities, on stock investment. I look at all the numbers, I look at all the history, I look at all the data and equities are stocks built wealth—it’s a fact.
I think real estate can too. I also think that if you start a business and you are very successful in your business and you create income in that business above and beyond your need, of course that can create wealth. And in this country, we’re very fortunate that the entrepreneurs that have built this country and continue to build this country and still take those risks and build all that wealth.
Now, for somebody that has a salary, they have a wage, you know, simplistically—maybe they have a 401(k). They need to spend less than they make, invest in their 401(k) or some type of an investment account, especially if they’re young, they need to diversify those investments in the stock market.
I would suggest that they not try to guess where to put all the money and not try to time the market and move it from one space to another. I’ve looked at that for many years, I’ve looked at all the different crazy type of systems that exist in the marketplace. I always tell somebody if you find that person, send them my way. I want to interview them, and if I find historically they’ve done that right all the time, I’ll jump on their boat. In 30 years I haven’t found it. Maybe that’s a challenge, maybe somebody will call me. I look forward to it if somebody does.
“Sometimes people are afraid to invest in the stock market.”
They invest for 30 years in the money market or into short term CDs or a bond, an intermedia bond fund. That’s okay, but I just don’t see any wealth being built there.
They invested in a diversified portfolio with maybe an equal percentage and large gap and small gap stocks, both in the value and growth side of the equation, with another portion in the developed international markets, in the emerging markets and maybe a portion in real estate to keep it balanced and at certain percentages throughout your lifetime. I think that would do very well.
Charlie Hoehn: I think there’s a lot of fear around it for young people especially just because of entering in a rough job market in their early 20s followed by a rough housing market, by the time you get to your 30s. that it kind of shakes your notion of what is actually secure in the world. When it comes to stocks over the long term, it’s the best wealth builder, as you said.
Mark Aho: You know, it’s interesting, when you look at some of the facts. If we call this a bull market that we’re in right now, and I think some think can start it in 2009. Others think it started in 2013.
“This has been probably one of the most least liked bull markets we’ve ever had in history.”
It’s because of what you just said. People are still fearful, people still think that we’re going to have what a drop like we had in 2008, and you know, we certainly could. I mean, there’s nothing saying that they can’t happen.
But if you look at the facts—even if you had purchased the market at the very peak in the year 2000, at 11,700 or so, taking a look at the Dow Jones industrial Average or at the peak in 2007 at 14,200. If you were owners, that was your entry point into the market place.
Right now, we’re just shy of 25,000. Got to keep that in perspective.
Working with Mark Aho
Charlie Hoehn: Now, what is your personal favorite success story of somebody that you’ve worked with that has gotten a lot out of the ideas we’ve talked about today?
Mark Aho: You know, there’s probably a lot of different stories, but I often think of one of the wonders of investing is the fact that I think of a telephone company retiree. This is quite a few years ago. He retired and he got a 401(k). I can’t remember the exact numbers, but maybe it’s about 300,000 and a lot of that portfolio for many years.
He had probably drawn out that amount or more. We’re doing a review for him one day, and I think the account still had 300 and some thousand in it.
He just couldn’t believe it. He said, you know? I can’t believe it, we drew out more than I started with, and I still have the full amount sitting here or more. I can’t remember the exact numbers, but I will tell you that if that money was invested in short term money markets or bonds, the money would be gone. It would just be gone.
That brings a lot of joy to me that you know, he trusted us, he was patient, and he had the discipline to follow along with what we suggested and so not only is the money still there, it’s now going to be there if something happens to him for his spouse, it’s going to be there for his children, it’s going to be there for his legacy.
“It’s so important that people understand that side of it, rather than be too fearful.”
Charlie Hoehn: Mark, could you let our listeners know the best way for them to get in touch with you potentially if they wanted to work with you or just maybe to follow your work even?
Mark Aho: Sure, well first of all, we do have a website. Our website is markahofinancial.com From that website, we do have connections to us. That’s probably the best way to come through to me; obviously I do have an email address too.
Charlie Hoehn: Very nice. Let’s finish with a challenge for our listeners. What’s something they can do from your book?
Mark Aho: I would tell them, if they have not sat down and created a value system for themselves, that would be the most impactful thing they could do in guiding their lives, and if they want to see an example of it, they can look at the introduction of my book.
I have an introduction as to what my value system is, and it’s meant to be just an example, it means the world to me. I wrote it 30 years ago, it’s guided my life and you’ll see when you look at the 12 items.
The first three are the big rocks, and then everything below it is really important as well and it’s guided me to the spot I’m at right now. If you do this and you do it earnestly, it won’t change. It will keep you on the track you need to be on and you will be very rewarded with the goals and objectives of your life based on the value system you’ve created.