What Would Yoda DO?

How do you tell someone their baby is ugly? How do you contradict someone so that they are open to what you have to say? Answer: they have to discover it for themselves. Your job as a liability advisor is to set the conditions for someone to see the possibilities of another pathway to a brighter future. Use the power of questions to drive self-realization and engagement, which can be transformative for an unsuspecting client. The goal is to make your clients feel like co-creators of their solution, which increases their intrinsic motivation and commitment to the outcomes.

First, begin by understanding their current beliefs and emotions regarding their financial situation. Ask probing questions that challenge their assumptions without confronting them directly. For instance, instead of saying, "Your idea of 30% down and a 15 year fixed is too risky," ask, "What is most important to you, Safety, Liquidity or Return?" This approach helps them evaluate their situation objectively without feeling defensive, so that you can help them get to the answer they feel is right for them.

Second, use questions that require them to think critically about their future. Questions like, "If nothing changes about your current repayment strategy, will you accomplish your debt free objectives?" or "Have you consider other strategies to repay your debt to minimize interest costs?" help them visualize the potential consequences of their current path versus the possibilities of a new one.

Third, focus on their values and goals. By linking your advice to their broader life aspirations, you make the advice more relevant and personalized. Ask, "What does financial freedom look like to you?" They often say ‘having X saved, and being debt free’. This connects your guidance to their personal vision, making them more likely to engage with and value the solutions.

Fourth, reinforce their autonomy by providing them with options rather than prescriptions. For example, lay out multiple scenarios (no more than 3) as pathways they might take, discussing the potential benefits and risks of each. Then, ask them to consider which option feels most aligned with their personal goals. This not only empowers them but also ingrains a deeper understanding and appreciation of the strategies discussed.

Finally, encourage reflection. After exploring various scenarios and options, ask reflective questions like, "What are your key takeaways from our discussion?" or "Which of these strategies resonates most with you and why?" This reflection solidifies their learning and cements their ownership of the conclusions they've reached. One of my favorite… ‘Who do you know that would benefit from these same questions?” as a way to transition your value provided to their reciprocation of a referral.

What would Yoda do? Don’t Try… and forget about ‘Do Not’ - instead take one idea from above and employ it in your next client conversation…

a BORROW SMART CONCEPT
Talk to Financial Advisors

Again, there is no ‘TRY’ there is only ‘DO’. Just go talk to them, that’s it. It’s not hard. You’ll learn as you go, but ‘yes’ we do a lot of prep to make those conversations more meaningful and increase your impact.

Here are 10 potential liability topics to discuss with a financial advisor, focused on smart borrowing, liability management, and wealth creation through homeownership:

1. Optimizing Mortgage Structure: Discuss strategies for maximizing mortgage benefits, such as longer terms to take advantage of inflation's effects on liabilities, as highlighted in "11 Reasons to Carry a Big Long Mortgage"​.

2. Three-Sided Balance Sheet Approach: Consider exploring how liabilities, assets, and cash flow work together, emphasizing safety, liquidity, and return for wealth building through a property​.

3. Inflation's Impact on Wealth Creation: Explore how mortgages can act as a hedge against inflation, increasing net worth as asset values rise and liabilities are reduced in real terms​.

4. Holistic Liability Management: Understand how effective liability management can support long-term financial goals, including tax implications, equity management, and cash flow optimization​.

5. Reverse Mortgage Options: Discuss the potential benefits, risks, and strategic uses of reverse mortgages, especially for tapping home equity during retirement​​.

6. Effective Debt Repayment Strategies: Develop repayment strategies that align with financial goals, aiming to reduce overall borrowing costs while maintaining cash flow flexibility​​.

7. Using Home Equity for Investment: Consider ways to leverage home equity for new investments, possibly boosting returns while maintaining liquidity​​.

8. Tax Planning and Real Estate: Delve into tax-efficient strategies related to mortgage interest, home improvements, and other real estate tax benefits to enhance wealth accumulation​.

9. Building a Resilient Financial Plan: Discuss diversification, liquidity, and risk management strategies, especially in terms of property investments​​.

10. Understanding Property Market Trends: Get insights on how market conditions may impact home value and the strategies to capitalize on property appreciation or mitigate risks from market downturns​​.

At the end of the day, you want to connect the problems they are trying to solve for their their clients with your lending solutions. Learn more here… one of our students received 3 referrals on an initial financial advisor meeting!

There are approximately 3,000,000 Realtors in the US, and there were about 4,700,000 new and existing homes sold in 2023… so I’m sticking with the lower range of basic averages… I’d say make sure you know how many they are actually selling before you invest a lot of time in the relationship…

LIABILITIES and DEBT
What’s Happening.

REAL ESTATE
What’s Happening?

ASSETS and INCOME
What’s Happening?

ON BEING HUMAN
What’s Worth Sharing?

DOPAMEMES
And Other Happy Moments…

Artificial Intelligence
And the Future of Work…

For the youngsters: https://dateplanner.ai/

Create ‘how to videos’ for clients: https://www.guidde.com/

Create a fake you: https://fakeyou.com/

I don’t say it enough, but I love you all!

Borrow Smart University || National Institute of Financial Education