Earlier this year, I had the pleasure of sitting down with financial expert and author David Bach. You probably know David from his amazing personal finance books, which include The Automatic Millionaire, Start Late, Finish Rich, and Smart Couples Finish Rich.
As a keynote speaker at FinCon this year, Bach made his way to Dallas to share his wisdom with money nerds like me.
This was a surreal experience for me because I’ve admired or, better said, had a “man crush” on David for several years because of his transition from a financial advisor to a globally recognized author and speaker.
Essentially, he has laid the stepping stones for a journey that I’m right in the middle of. So to meet him in person AND get some 1-on-1 time had me in a wonderfully giddy state. 😊
Here’s what you’ll learn in the interview:
- How I first was introduced to David Bach in 2005 while on tour in Iraq. Because when you’re deployed, the only things you do in your free time are workout, play poker and read.
- How David’s childhood really paved the path for his understanding and interest in the financial advising world.
- Hear what the turning point was for David transitioning from the financial advising segment of his career to chasing his passion.
- How did the actual transition take place to pursue his dream? Hear what the process looked like with the realities life has… providing for your family, taking care of your wife, moving across the country, etc.
- How David was able to reach his goal of teaching 1 million people.
- What by-products came from chasing his passion that really were not planned, but certainly are a bonus today. (This is the GOOD STUFF!)
- How when you’re passionate about something, you really never get tired of teaching about it.
- How taking a year or more sabbatical to rest and reflect is actually a really terrifying decision to make… but the single greatest thing David can recommend to anyone.
- How you can plan and prepare to take a sabbatical in the coming year.
- Hear what would be a success over the next three years for David and how he’s setting those goals now.
You can watch the interview here:
And if you want a free copy of David’s best-selling book The Automatic Millionaire, I’m giving away 10 copies. Holla!
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Or you can read the interview transcription below. Enjoy!
Interview with David Bach
Jeff Rose: When you’re in Iraq and you have downtime, you either work out, play poker, or read books. I took a lot of books with me, probably because I was on a John Grisham kick at the time. I took every single John Grisham book with me and read them all before looking for other books to read.
The cool thing is, soldiers were getting books all the time. So, all the other units that were there before us left books for us to read, too. I saw this book called The Automatic Millionaire by David Bach. I had heard of the book, but never had the time to read it until I was on deployment.
David Bach: Wow!
Jeff Rose: If I recall correctly, I read it all in about a day and a half. I just absorbed it.
David Bach: That’s fantastic. The goal of that book was to make it so anybody could read it in a really short amount of time. That way, they could easily go and act on it.
Jeff Rose: I remember I read it and then everyone that was deployed with me knew I was a financial advisor. So, people would tell me they wanted to get a handle on their finances and ask me what book they should read. I started telling them about your book. This was 2005.
David Bach: That’s amazing.
Jeff Rose: Yes, that was the first time I was introduced to you and your ideas like “the latte factor.” I just wanted to say “thank you” for encouraging me and inspiring others how to handle their money differently.
David Bach: I just got chills. I didn’t know this was coming, so thank you. It really makes me feel good. First of all, thank you again for your service. It makes me feel good to know that it was reaching you in Iraq. I just had the privilege of speaking to a group of people who were transitioning out of the military, and we gave everybody copies of The Automatic Millionaire. I also gave a talk. You guys do such a service for our country and financial education is so important when you make the transition from the military to the civilian world. I’m glad I could help you and I’m glad I could help some of your friends.
How David Started His Career as a Financial Advisor
Jeff Rose: Yeah, that’s awesome. I kind of want to take a step back. You’re a New York Times Bestselling Author. You’ve written a lot of content and put a lot of amazing advice out there. Before that, you were a financial advisor with Morgan Stanley. Can you tell me a little bit about how that started? What made you want to become a financial advisor?
David Bach: I don’t know how much of my story you know, but I grew up in the business. My dad was a financial advisor. They used to call them stockbrokers. I still remember walking into my dad’s office. They had ticker tapes. Most of you who are watching this have absolutely no idea what a ticker tape is.
Before there was this thing called the internet, before there was a Quotron machine and stock quotes came off of a ticker tape machine. You would actually go into a stockbroker’s office to find out where the stocks were trading. You don’t even know what I’m talking about.
Jeff Rose: I’ve seen the movies. 🙂
David Bach: They would tear a piece of paper off. As a three or four-year-old kid, I remember going and getting those pieces of paper and bringing them to my dad’s office. I remember when the computer came out and the Quotron was the first machine to give you a stock quote. My grandmother helped me buy my first stock at age seven. It was in McDonald’s. She taught me how to become an investor one day at McDonald’s. She took the Wall Street Journal, circled the stock, showed me MCD, put me in front of the TV, and taught me how to read the stock quotes going across the bottom of the screen. I started investing at seven. At age nine, my dad started teaching retirement classes.
When I was nine, my mom told my dad he needed to bring me to the class so I could at least see him one night a week. He did and he dressed me up in a suit and tie. I sat in the back of the room. During the breaks, his students would come up and tell me what they learned from my father that changed their life.
In 1993, I joined the business and went through training. I also started teaching classes right away. Eventually, I started teaching classes that taught women how to manage money. That happened because, in a very short period of time, I set in multiple meetings with widows. I met with three in a month. They were very unprepared.
Financially, they were okay and they were lucky because my dad was their advisor, but they knew very little about money. I was sort of shocked. I thought,
“I’m going to do something and create a class for women and money.”
That’s what started my passion. I started teaching these classes until they became more popular. As my classes became more and more popular, I wanted to reach more people.
The Scariest Career Jump of His Life
Jeff Rose: Your business is thriving. You’re teaching seminars. You’re kind of reaching this point where you have a higher calling, like there’s something bigger here than just managing money. We were just talking about how you were in the Strategic Coaching program, which is something I was in for five years. I listened to an interview that you did with Dan Sullivan. I’m not sure how long ago this was, but I remember it was a CD that I listened to in my car.
I still have it, but what I remember about the interview is that you said you were sitting in your office and I think you had a client call in that was trying to get their dividend check deposited while traveling overseas.
You kind of had this out-of-body experience where you wondered if it was your life’s calling to make sure your client’s dividend check was deposited while they were traveling. I think we’ve all kind of had moments like that. I’m curious because many people want to chase their calling and their passion forever. You have a thriving business. You’ve got no reason to not continue to do that.
David Bach: Everybody told me that I was out of my mind. I was nine years into Morgan Stanley. At the time, I think I had around $700 million in our management. I had built a fee-based business. Anybody who is listening to this knows that is the holy grail. I was doing financial planning and fee-based business and this was the 90’s. People looked at me like I was crazy when I said I was going to change gears.
“You’re going to move to New York and write books and try to help a million people? What are you going to do if that doesn’t work?”
Jeff Rose: Can you talk a little bit about that? Just making that bold leap. How do you go from a fee-based business that’s on autopilot for the most part and to turn your back on that and say, “I want to do something else?”
David Bach: There were multiple parts to this. Interestingly enough, Strategic Coach was also a part of that. I started Strategic Coach in 1997. I had gone through Tony Robbins program in the early 90’s. I was in real estate first. At a Tony Robbins seminar, I kind of came up with my overarching big mission, which I wrote in a journal:
“I want to go out and teach a million women to be smarter with their money so they can protect their families and teach their kids.”
I became crystal clear on what I felt like I was here to do with my life.
The problem is, having a calling can really complicate your life. Let’s just be totally honest, right? I was set living in the Bay Area with a beautiful home, a country club membership, and a great career. I decided to throw all that away so I could help other people.
I’ve had lots and lots of success, but none of it’s been easy. What did I actually do to make the transition? I went through a lot of pain.
First, I went through the realization that I wanted something different. That’s where that story that you’re talking about with Dan Sullivan came in. I had that moment – a lightbulb moment. Basically, I built this great business with Morgan Stanley and I had succeeded as a financial advisor. The more you succeed as a financial advisor, you start to work with wealthier and wealthier clients. It’s part of the way the business is set up. I’m going to work with wealthier and wealthier clients. I’m going to work with fewer of them. Once I was in my late 20’s, I could start to see the rest of my life. Basically, for the next 20 years I’m going to work with a hundred or fewer wealthy families and that’s all I’m going to do? By the way, I’m not judging anybody if that’s what they do for a living. I know people who work with 10 families and they have the greatest life ever.
But, I wanted to go around and teach more people. I was teaching people Smart Women Finish Rich, which was my first book. Then I did some more, and I was flying all over the country. My wife was super supportive, but I was gone a lot.
Jeff Rose: You’re still in your practice at this point?
David Bach: I’m still in my practice. It’s like working three jobs. I’m running a practice and I’m promoting these books and I’m promoting the seminars. I was flying back and forth from California to New York a lot because that’s where all the TV is. I was very blessed. I kept getting asked to go back on The View over and over again. I’m on The View with Barbara Walters for a long time, like an eight-minute segment. She just kept talking and talking with me. I’m like, “Oh my God, I’m on The View with Barbara Walters.” If my grandmother would have been alive to see this, she would be so proud.
I got back in the car and I said to my wife, “This was amazing. That was the best show I’ve ever done. I just spent two days traveling to be on TV for seven minutes. If I’m going to really do this, we need to move to New York.”
She said, “If that’s what you really want to do, then let’s do it.”
I hired a coach and I kind of worked through what would it take for me to make that transition. I didn’t just wake up and do it one day. The transition was probably about a 12 to 18-month period of time where I really worked it all out. I worked it out financially. I worked it out mentally. I worked it out with my family and then I did it.
Then 9/11 happened. I told all my clients I was basically retiring and moving to New York. It wasn’t retirement, though. I was going to move to New York and try to teach millions of people. I did that in June, July, and August and 9/11 rolled around. I rushed into the office and started calling all of my clients.
They said, “Well, you’re not going now, right? You’re not going to New York now?”
Not only did we go to New York, but we moved downtown. We moved to New York in November 2001.
Hitting the New York Times Best Seller’s List
Jeff Rose: You made the move and made the transition. Now you’re writing more books and doing more workshops. When did you actually make the New York Times Best Seller list? Was that your second book?
David Bach: Smart Women hit the Best Seller list, but not until eight or nine months after it came out. I did a PBS special. The PBS special on Smart Women Finish Rich started airing everywhere and I was running all over the country. Then I starting having financial advisors teaching my seminars. We licensed Smart Women Finish Rich.
I packaged up my intellectual property. I took what I was already doing, that I knew would work, and I trained other financial advisors to go do it. When I did that, I started to scale things up.
At one point, we had 100,000 people a year going through seminars I wasn’t teaching. It was all my content. All these people are getting great, free help and then the advisors were getting clients from it. Everybody won. That’s how I ultimately reached a million people.
Jeff Rose: You reached your million people. That was one of your goals.
David Bach: I did. It took seven years. I’m not just measuring books. Between live events and books, we reached well over a million people. Kind of from the way I was measuring it, it was a seven-year timeframe.
Oprah vs. New York Times – Who Wins?
Jeff Rose: What was more exciting for you – hitting number one on The New York Times Best Seller list or being on Oprah?
David Bach: Wow. Being on Oprah. I have dreamed of being on Oprah and seen it in my mind for 10 years. I have letters. I came to Morgan Stanley in 1993 and started sending letters telling her she should have me on the show. I had no idea what I was talking about. I had never been on TV. I had no books. I tell this story on stage all the time. How did I get on Oprah? It just took 10 years, five books, and me doing every single media in the world other than Oprah.
There’s a moral behind that. By the time I was on Oprah with her, I was ready. If you go back to why I wanted to be on Oprah, I wanted to be on Oprah because I wanted to inspire 10 million people across America to pay themselves first. One hour a day, automatically, for life. That was my mission.
If you look at why I am sitting here at the Sheraton in Dallas, which is 14 years after that show aired, and I’m here because I updated this book and I’m still doing all this stuff because I’m still obsessed with the same exact thing I was obsessed with back then. I decided I wanted to reach the millennials and make one more push before I’m done here.
Being on Oprah was amazing because I knew I was going to reach 10 million people with that show. We taped that show. The next day they called me and said it was the last taping of the year. It doesn’t air live. At least the show I did didn’t air live. It was taped in November. It’s supposed to air the first week of January. The book was launched on the show.
They tell you not to tell anybody until it airs. Until it airs, it’s not airing. The day after this show taped, they called me and they said, “If this show does for America what it just did at Harpo, this show’s going to be a home-run.” I said, “What happened?”
She said, “So many people signed up for the 401(k) plan after you left Harpo. They either signed up or they increased their 401(k) contributions.” If that can happen on Harpo, when this show airs in America, it’s going to be transformational. That’s what happened.
Jeff Rose: That’s awesome. I remember hearing that. I don’t know if you did an interview with somebody else, but the number of people that signed up afterwards, that has impact. People actually took action, which is awesome.
David Bach: My passion hasn’t changed since then. I just did a speech for the parent company of Advisor Excel. They have over 500 employees. I just did The Automatic Millionaire presentation for all the employees. I said to the founders, “Look, guys. I’m going to be there. Let me go do the speech for everybody who works here.”
They were, “Most people are signed up for the 401(k) plan. They’re doing pretty well.” I’m like, “Well, let’s make them do better.” I said, “Let’s track it.” Within five days of me doing the speech, 133 people increased their 401(k) contributions. That’s life changing.
When you love what you teach, it doesn’t get old. When you start to hear the stories and the transformation that people have, it gives you more fuel.
Strategic By-products of Making the Leap
Jeff Rose: Yeah. You leave Morgan Stanley, you’re writing books, and you’re still teaching. You’re living the mission that you set out to do. You kind of had things in a vision, I guess – things that you thought were going to happen, things you wanted to happen. Was there anything that did happen that was a strategic byproduct or some sort of unexpected partnership that came along that you didn’t see?
David Bach: That’s a classic Strategic Coach word – “a strategic byproduct.” Once you go into Strategic Coach Dan, we love you. You start to have this cult language. For people who don’t know what that means, a strategic byproduct happens when you create a goal, you work towards that goal, and something amazing happens as a result of working toward that goal.
My last 25 years have been one giant strategic byproduct. I went off and taught a class for women and money for my clients. That class became so popular that I started teaching it on bigger and bigger stages. This led to a bigger mission, which led to a book, which led to a PBS show.
I brought the idea of Smart Women Finish Rich, the seminar program, to Morgan Stanley and had this entire idea of how we’d have offices across the country and we’d be in a hundred cities doing this. Well, they passed. They said, “Well, you’ll do it and then you’ll take all these advisors out of Morgan Stanley and you’ll leave.” We ended up getting a phone call. I think it was Registered Rep Magazine. I’m doing PR and I get a phone call from a mutual fund company. The next thing I know we’re doing a partnership with them and a licensing deal.
That’s how I got Smart Women Finish Rich into the entire financial services industry. Same firm, different side of it. Every firm on Wall Street is teaching my seminars now except for Morgan Stanley because I did a carve out.
Jeff Rose: That’s awesome.
David Bach: When I left in 2001, they said, “Well, look, if you’re going to leave, let’s do a deal and you can train all of our advisors.”
We did. I went and trained 750 advisors for Morgan Stanley, toured the entire country for Morgan Stanley, and we did some more Couples Finish Rich tours all over the country.
Taking “Some” Time Off
Jeff Rose: Wow. When you’re passionate about something, like you said, you can teach it all day long. You can do it all day long. It’s 24/7. Dan Sullivan calls it the unique ability. I know it’s something for me that I struggle with at times because I get so passionate about something that I want to do it. But I also recognize that I do have a wife, I do have kids, and I do have to unplug. Here recently, you took a “free day,” right?
David Bach: I took the free year.
Jeff Rose: A free year. You took a one-year sabbatical, or maybe, I think it was 18 months.
David Bach: Eighteen months.
Jeff Rose: An 18-month sabbatical. Now, you’re the bread winner and the sole provider. How do you go from providing everything for your family to taking 18 months off to be a dad?
David Bach: That was scary, too. That was as scary, if not scarier, then the decision I made to leave Morgan Stanley. It’s scary to stop. We’re going and going and we’re going. I was afraid. What if I stop? Am I going to be able to start again? I had reached a point, and it happened actually in Strategic Coach, where instead of working on a 10x plan for my business, I decided to 10x my free time. I started asking myself the question,
“What would it be like to not work for a year and just be a dad?”
I worked on the plan for a year. It’s the single greatest thing I ever did. Taking a sabbatical, which I highly recommend … I always say you don’t have to take a year. I’ve been going around teaching, basically, take six weeks. Take a six-week sabbatical. It’s funny because there was an article recently about how all over the world, basically most countries take six weeks off. We don’t. We take an average of five days a year off in America. I didn’t think I was burnt out. I didn’t think I was tired, but I knew the passion wasn’t the same.
Something felt wrong and I didn’t know what it was and then I took a break. I got present in my own life and I got all my energy back. That was the big miracle. At the time I was 46 and I was feeling 50. Today, I’m 50 and I feel 30.
I was doing an interview with Arianna Huffington who wrote this great book Thrive and I said, “Arianna, you talk about recharging your batteries.” I go, “You take a sabbatical, you replace your battery.”
For me, taking that time off completely replaced my battery. That’s why I’m even here right now with you. First of all, it’s amazing to be a dad, amazing to be traveling, amazing to have that free time. Also, at the end of the year, I was ready to work and all of my creative energy was back. That’s what led me to do a deal where I became a Vice Chairman of a large RIA. That’s what led me to want to go bring all this stuff back out again. That’s what led me to start another financial services company. Sometimes I think we need to take those breaks and recharge.
Jeff Rose: Yeah, it was funny. Just following you on social media, I could definitely tell when you came back. I didn’t know that you were on sabbatical but, all of a sudden, you’re on your blog and you’re on social media and the book’s coming out. All of a sudden, he’s back. David’s back.
David Bach: Also, I didn’t go around telling people I was taking a sabbatical, so it was very interesting. I didn’t know, truthfully, if I could do it. I didn’t know if I could just stop working. I’m like, “I’m going to not do anything. I’m not going to go do the Today Show. I’m not going to write a book. I’m not going to do speeches. I’m not going to do anything. I’m not going to be on social media.”
I’m like, “I wonder how long it will take for people to notice?” We think what we’re doing right now is so important. If I don’t put this video out and I don’t deliver every week this free content that you’re not paying for, what will happen to the world if I don’t update my blog and update my YouTube video and send a Tweet out and post on Facebook?
You know what happened? The world keeps turning. It’s actually very humbling. About three or four months in, people start emailing and making sure you’re not dead, which is exactly what happened. “Are you okay?” It wasn’t like you got 10,000 of those. My friends knew I was okay because my friends knew I had taken a break.
The next time I take a sabbatical I will publicly share on taking a sabbatical. I’m going to take another sabbatical. I haven’t decided what year yet, but I think we should take breaks every seven years. That’s my new theory. Every five to seven years. I think if you take a break every five to seven years, then it’s not about retirement. Instead of retiring at 60 or 65, if you can take a break every five to seven years, the energy that you’ll get propels you to maybe just always be doing something for the rest of your life.
Jeff Rose: Right. A very good friend of mine is in the process of taking a year sabbatical and he started earlier this year. I didn’t know until February or April, sometime in the spring, that he was taking it. I had a chance to meet with him through this whole time frame. I just love hearing it. It really inspired me. I don’t know if I’m ready to take a year yet, but I like the idea of taking six weeks. I told my wife, I’m like, “What do you got to do?” You just got to put it on the calendar, just make it happen.
I’m going to try to cheat a little bit and try to do it around Spring Break so our kids are out of school. That may help out a little bit.
David Bach: It’s interesting because, when you say something like take a six-week break, the first thing that people start to think about is why they can’t do it. Really anything like this.
I always go back to write all the reasons why you can’t do it and then come up with what the solution would be. You take an example like Spring Break. Spring Break is like two weeks long. The next thing you know, putting another four weeks on top of that, it’s 25 work days or it’s 25 school days. Then, there are holidays in those 25 days. When you start to break it out, you go, “Maybe it’s not that hard. Maybe we actually could do this and if we planned it a year out, or two years out, of course we could do that.”
We’re shooting this at the end of 2017. You can’t tell me that you can’t figure out a way to take off six weeks in 2020. You might be able to tell me you can’t take it off in 2018, but 2020 is three years from now. It’s just about planning and making decisions. It’s funny because I’ve had a lot of friends take sabbaticals now, too. I think a lot of it’s because they saw what happened to me. It’s kind of like, “Wow, that actually worked out okay for you.”
Jeff Rose: Yeah. I feel like God keeps putting me around people that are taking sabbaticals. I think he’s knocking on my door and I just got to open up and listen.
David Bach: I was about a month into my sabbatical. It was like a miracle. I felt so good. I was sleeping so well. I was so blissfully happy and I’m walking my son to school and I’m like, “Life can’t be any better than this.”
Here I’m walking him to school and Jack looks at me and goes, “You know dad, do you ever worry that now that you’re not working you’ll never be able to do anything again for the rest of your life? Like you won’t be able to write another book or be back on television or make any money and we might lose our home?”
I was like “Are you kidding me?” Every fear I could have ever had was somehow voiced out of a twelve-year-old. I was in the perfect blissful state, but thanks for bringing up every insecurity. I don’t know if he said the part about the home. I think I threw that in. I was like, “Yeah, actually I do worry about that, but I think it will be okay.” It’s funny. You know what? It always does end up being okay.
His 3 Year Outlook
Jeff Rose: Awesome. David, I’ve got one last question for you to wrap this up. Imagine it’s three years from now and we’re doing another interview and we’re reflecting on what has happened over that three-year period. What would have happened in your life both personally and professionally for those three years to be a success?
David Bach: Let’s think about that. I actually just wrote out my next three-year game plan on the plane flight out here. I’m not going to give it all to you because there are certain things that are very personal to me. I’ll give you some things that I’m working on that I’m focused on the next 36 months.
First, I’m a co-founder of a firm called AE Wealth Management. In just 18 months, we’re the fastest growing RIA in America. We have empowered over 200 financial advisors to come onto our platform. We have 2.5 billion in our management. That’s fast going from ground zero with no private equity money and no outside capital.
My hope is that, 36 months from now, we are up to a thousand advisors. As I say that, my team’s going to go, “What did he say?”
I’ve got a big dream for this firm. I’d like to see us empower a thousand independent financial advisors who are RIAs to build the best financial planning business that they can in their community. That’s one from a business perspective. I going to shoot for 10 billion in 36 months. I just became an advisor for Clarity Money. I don’t know if you’re familiar with Clarity, but it’s the hottest financial app going in 2017. It is Mint on steroids. I just was blown away by this app to the point that I basically came knocking on Adam Dell’s door.;
I’m also an investor in Acorns, which is the fastest growing firm for millennials. I’m excited about that. From a personal perspective with books, I’m putting Smart Women Finish Rich and Smart Couples Finish Rich back out. I also have two books I’m working on, Smart Kids Finish Rich and The Latte Factory. Those books will come out in 2019.
If I’m getting together with you in less than 36 months, I’ve got two more books out, at least another 100,000 people through the seminars, and I’ve gone on another major sabbatical at some point.
Jeff Rose: Well, I’ll just give you one from me. I will have taken at least one six-week sabbatical.
David Bach: Love it.
Jeff Rose: Cheers. David, thanks once again for sharing your wisdom and just inspiring others and for all you do, man.
David Bach: My pleasure. By the way, congratulations on everything you’ve done. I knew about you over a year ago. I’ve seen what you’ve been doing online and you’re having a huge impact on people and it’s really cool. You’re following your passion.
Jeff Rose: You’re right. I am.