What happens when Elon Musk and Vivek Ramaswamy take the reins of government efficiency? In this episode, John, Tommy, and Ben dive into the bold initiatives of Trump 2.0's Department of Government Efficiency (DOGE), led by Musk and Ramaswamy. With plans to slash $2 trillion in federal spending and eliminate entire agencies, this duo's vision could impact anyone's financial plan.
Listen in to hear why emotions often dictate poor financial decisions and how data-driven strategies can safeguard your future. Whether you're a federal employee or not, this episode sheds light on adapting to change, building financial confidence, and why hiring an expert financial planner can be a game-changer for navigating uncertain times.
Listen to the full episode here:
What you will learn:
- What changes DOGE is proposing for government efficiency. (3:15)
- How to stay financially prepared in a shifting landscape. (5:30)
- Why your political beliefs shouldn’t guide financial decisions. (8:30)
- The power of understanding your financial standing. (11:40)
- How clarity in your finances leads to smarter decisions. (15:00)
- The value of having a trusted financial advisor in your corner. (22:30)
- Why proactive financial planning is critical. (26:00)
- The case for hiring an expert. (33:00)
Ideas worth sharing:
- “Change is part of life. Change is always going to happen, and that is really what a good financial plan and a good financial planning team is here to do. They will help you adjust for changes, plan for changes, and make sure you’re in position for whatever is thrown at you.” - Mason & Associates
- “Change hits differently depending on where you are in life.” - Mason & Associates
- “Our political beliefs and our emotions do impact our decision-making process. When you are more confident, you will do things differently than when you are more scared.” - Mason & Associates
Resources from this episode:
- Mason & Associates: LinkedIn
- Tommy Blackburn: LinkedIn
- John Mason: LinkedIn
- Know The Score
- FERS Pension Explained: Key Retirement Options and Benefits for Federal Employees
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Read the Transcript Below:
Congratulations for taking ownership of your financial plan by tuning into the Federal Employee Financial Planning Podcast, hosted by Mason & Associates, financial advisors with over three decades of experience serving you.
John Mason: Welcome to the Federal Employee Financial Planning Podcast. I'm John Mason, President and Certified Financial Planner at Mason & Associates. And today is November 26, 2024. We are recording with our normal co-hosts, Tommy Blackburn, Ben Raikes. As y'all know, if you're returning, we have three certified financial planners.
Tommy's a CPA and a PFS, and Ben is also an IRS enrolled agent. So if you're new, if this is your first time, welcome. Thanks for being here. We're three years strong, almost, of the Federal Employee Financial Planning Podcast. If you're returning, thanks for being here. And if you're a client, we appreciate not only the business and the loyalty and the relationship that we have with you, but also following us on this journey.
And we think it's really doing a great job to enhance the relationship that we have with you as well. So in this episode, it's a polarizing topic, Tommy, Ben, but we feel like we have to bring it up, and it is Mr. Elon Musk and Vivek Ramaswamy—if I pronounce that correctly—and their new federal agency, Department of Government Efficiency, how that's going to impact our clients, how that's going to impact listeners of this podcast, how it could impact, reverberate throughout the federal employee community.
They're focusing on federal governments, but state governments have similar things going on too, I'm sure. So who knows where this is going to go? So disclaimer, audience, as we roll into this podcast episode talking about Department of Government Efficiency, we're not taking sides. We're not saying whether or not this should or shouldn't happen, but we want to talk about what happens if it does happen and what that may look like from a planning standpoint.
And we want to talk about what happens if it doesn't happen and how that could impact your life going forward as well. Tommy, Ben, thanks for being on this episode with us.
Tommy Blackburn: Great to be here, John.
John Mason: Yeah. So we've, we recorded another episode today where we dove into Social Security Fairness Act.
We recorded another episode where we talked about windfall elimination provision and GPO and how the elimination of those could impact, reverberate throughout the United States, impact the federal deficit, impact revenues, etc. Department of Government efficiency at a high level, you would think their mandate is basically to reduce the size of government.
And I think we're hearing things of potentially reduce the budget by two trillion dollars, how we get there is to be debated. But on the last episode, we were talking about things that would raise effectively the budget, would raise the deficit. Department of Government Efficiency would ideally be doing the opposite of that.
That's my understanding of kind of the mandate that's been set for DOGE.
Ben Raikes: I think the theory of these last two podcasts, John, it's really been changed, right? We have a new administration that's coming in starting in January. We've got this cabinet that seems to be full of people that are from all different sides of the political spectrum with Elon Musk and Vivek Ramaswamy.
We've got the changes to social security that we talked about, and we've been GPO that are potentially coming down the pipeline. We've got this Department of Government Efficiency. It's really a time and right on top of this, it's also all hitting during the holidays when everyone just wants to be thinking about other things and not how are all these legislative changes potentially going to impact me.
It's a lot to keep a grasp of.
Tommy Blackburn: You are correct. I would say if we zoom out a little further throughout my career, this has been the theme. It seems like it's always just been coming stronger and faster. We've joked—people don't think we've seen many tax changes, but it feels like there's been a lot of substantial tax changes over my career and moving in ways that people wouldn't have predicted and even with social security and other things.
So I would say it always in the moment, this feels so different, and it is different. Every time is different. But the theme is like change is part of life and change is going to always keep happening. And that's really what a good financial plan and a good financial planning team is going to be here is to help you adjust to changes, plan for changes, make sure you're in positions for whatever's thrown at you, which I think is the theme.
And I don't know, part of me just jokingly wants to let Ben go down the DOGE rabbit hole since apparently he's been burning the midnight oil, figuring out all the possibilities that are going into it. But as John said, we don't know. At this point I don't know that many really know exactly where this is going to lead, but I guess it comes back to we should be prepared for change.
John Mason: Tommy, I love change, and you're right. We've been doing this. I graduated, you and I, 2010. Ben, I think you were 12, right?
Ben Raikes:You got it.
John Mason:So we've been doing this for 12 and 14 years, however many years that is collectively, a whole bunch. And every year, there's something new, whether it was Brexit or the tsunami and COVID and interest rates, and there's always something, and it does feel faster, and I wrote down change hits differently depending on where you are in life, right?
So the impact of the federal government going through DOGE, like this whole Department of Government Efficiency, if a 22-year-old GS-7 gets laid off from work, that stinks, but maybe they don't have a kid yet, maybe they don't own a house yet, maybe they can move back in with their parents, the Department of Government Efficiency, how that impacts that person is going to be a lot different than how it impacts 35-year-old Ben with a daughter on the way.
And it's going to impact people differently when they're 50. And I wrote down jokingly, and if there's older people like our typical client listening to this podcast who may be 55 to 60 and are near retirement with a million dollars saved, right? That's who we work with. Political things tend to hit differently with that generation of people.
You've now lived 60 years on this planet. You're going to have different views of how politics impacts your life at 60 than the three of us do at 35 and 37 years old. So change hits differently for a variety of reasons, some of them financial, some of them emotional, some of them just because we've lived longer or shorter on this planet.
So I think that's not something we planned, guys, to talk about early on, but it is acknowledging that we're all in a different place in our world here. And the idea of DOGE may be very exciting to some people and very scary to others just based on where you are in life.
Ben Raikes: Yeah, I think a really good way to nail that point home is we talked about social security last Episode. If you're 25 years old right now, and they say we're pushing back the full retirement age to 70 from 67, you're like, “Okay, great. Sounds good. Whatever, I'll be there eventually.”
But if you're 65 and you're hoping on 67, and now they tell you at 70, you're going to be rioting in the street saying, “I can't believe they did this to me. I was only two years away.” So I think that's a great point, John, based on where we are at the point in our lives, whether it's our family life, whether it's our personal life, whether it's our working career, are we close to retirement, are we far away, are we mid-career?
These potential changes could have vastly different impacts on you and how you see them as either a good thing or potentially a really bad thing.
John Mason: One of our previous friends in the industry had coined the term a long time ago, “Don't let your political beliefs impact your investment decisions.”
And like zooming out like that makes sense, right? The market tends to go up more than it goes down. So remaining unemotional, don't let your political beliefs make you go to cash right before small caps rally, however much they have recently, et cetera. But we as humans and financial planners have to acknowledge that yes, we don't want our political beliefs to impact our investment decisions, but at the same time also acknowledge the fact that like our political beliefs and our emotions do impact our decision-making process.
When you are more confident, you will do things differently than when you are more scared. If you are very confident, you may buy a vacation house. If you are very not confident, you may not retire this year. Whether it's emotions, whether it's confidence, whether it's political beliefs, whatever it is, it's impacting you as a human and as a financial planner. That's our job is to hopefully acknowledge the fear, acknowledge where you are.
But then also give you some data to make some really educated decisions.
Tommy Blackburn: I love that. And also being, it's like having that objective, unbiased partner in your corner, because when you said the buy a vacation house and being confident, I thought that went through my head was hopefully we're not falsely overconfident and going down paths that maybe we shouldn't be so confident, or even better, hopefully be so fearful.
We do try to be and approach things with that mindset versus that scarcity fear mindset. But regardless, we need to approach things or try to approach things objectively, which usually having a partner in your life can help you do that. So as we think about change as part of life, it hits differently depending on you and where you are in your life.
And we have some potential change coming, particularly for our federal employees. Maybe we don't really know what's going to come of this outside board making recommendations, but it seems like something's going to come of it. And so where does this lead us? And I guess I'll take the first stab at this where we've been trying to begin building up to, I think, is we have an episode; I'll try to go look it up, know the score.
And I think it's about, before you're thrust into decision-making scenarios, it's a very powerful place to already be in a place of understanding your situation. So you can then digest data and apply it to your situation much easier than if you're starting from, I've just got a blank canvas, and I really don't know, I don't even know where I am today, let alone how to digest this information and how to apply it going forward and make the best informed decision for me.
So we got to start with get that plan in place. Hopefully, that unbiased objective plan, which then that'll allow you to pivot and be in a position to deal with information as it comes.
John Mason: Knowing the score is invaluable. And I wrote down like you need money to make money, whether or not that's true or not is debatable, or the rich get richer.
But as you think about those two sayings, Ben, and then you think about Tommy saying, “Know the score.” What I hear when, “the rich get richer, you need money to make money or know the score,” what I hear in my mind is the ability to take advantage of opportunities because we have the financial resources that are available to do that.
We are in a powerful position to make a decision. Buy a rental property, retire early, and inheritance comes, and you know how to invest it in the stock market right before the market goes up 20% versus somebody that has no experience and left it in cash, right? So do the rich get richer? Absolutely.
Is it just because they have more money? Probably not just because they have more money, but they've put their plan in place so that they have the ability to take advantage of opportunities or make really educated and informed decisions quickly, rather than going back to the drawing board.
Ben Raikes: Absolutely, and I think tying a little bit of a bow on this part and I think coming back to something that all three of us feel is up to this point in our lives. We have done everything that we can to brace for that unexpected change in our life that may or may not come.
For us, that's making sure do we have a life insurance? Do we have disability insurance? Do we have estate documents that are in place that say exactly what's going to happen if Ben, Tommy, and John are not on this planet anymore? And how are their spouses and their loved ones going to be taken care of? Do they know the passwords to get into our accounts? Do they have somebody that they can work with?
Those are the things that we have all done to prepare for that inevitable change that may or may not happen. And I think as a federal government employee and looking at this potential reduction in force, or you're looking at the department of government efficiency, have you done what you need to make sure that you feel comfortable that if this change does or does not happen, regardless of where you may be in your career, that you feel comfortable that you get that notice that comes across your desk, or you get something that hits in your inbox that you can say, “You know what? I am okay with this because I know the score, I know the plan, and I've done everything I can up until this point to prepare for this.”
Tommy Blackburn: I think what's in a couple of things—you hit it, John, laid it up of it's about your plan. So as I was thinking about the rich get richer, this and that, and it's great to drive home the point of being opportunistic and being in a position to be opportunistic, but also don't worry about what everybody else is doing.
So you should have that mindset, but you should also be competing with the person in the mirror. You should have your plan in place and not be so too concerned about “how does this affect everybody else?” come back to your plan. So that one, hopefully you're not operating in a place of fear cause that's not a good place to make decisions, but also so you could get the news and hopefully not be afraid or be able to digest it, but also then evaluate it.
Cause that's the next key thing, right? It's not just have we prepared for bad scenarios, but are we able to think about, is there an opportunity here? What is the opportunity? This offer that I may get to, if let's say, it was to leave, where am I at in my plan? Can I collect retirement now? Is this actually a good offer, or is this a lowball offer when I think about what the other opportunities are?
But it's hard to begin even thinking about analyzing that if you don't even know where you are today, if you don't even have a current plan in place, so you've got to be able to have a foundation and then have the ability to evaluate as things come based upon your situation.
John Mason: We needed to get a little more specific in some of the things we want to talk through today, but I agree with everything y'all are saying. I want to come back to the opportunistic because we've said that a couple of times, and an opportunistic doesn't necessarily mean aggressive . Opportunistic just means like sometimes just knowing what you're going to do when something else happens, right?
So I recently had to cancel a lunch yesterday. And when I canceled the lunch, Domino's fell. I had to call the person and cancel with him individually. I needed to call the restaurant and cancel the reservation. And then eventually, I need to reschedule the lunch, right? So opportunistic is I have to do all of these things.
And I know all the steps that happen when one Domino falls. I know all the things that are going to happen next. So sometimes it could just be really simple, non-sexy things that we do every single day, but having a plan in place, allowing us to move forward and actually do them, can add up to tremendous value over time.
I had a baseball coach one time, guys, who would look at me. He was a third base coach. And if you're watching this on YouTube, he would go like this, “You go fastball and adjust.” And he would always say that. He was like, “Be ready for the fastball. And if the curveball comes, you're going to have to keep your hands back and try to go oppo, hit it opposite field.”
So it was always fastball and then adjust. Tommy, it's exactly what you said earlier, is like having a plan in place and adjusting when necessary. So audience, are you scared right now? If you are, that's okay. But it's also not okay. Yes, this is a scary time potentially to be a federal employee.
If you're scared about your current situation, that means we don't know the score. Or, we do know the score and we know we're losing. Or we could be behind. So it could be a number of reasons on why we're scared. Alternatively, if I'll just think about some clients, that we work with who we have said, “You can retire.”
And we've been saying that for two or three years, and they say, “I know I can, but I'm just really trying to hit these career milestones.” Hopefully for those folks, the idea of Department of Government Efficiency isn't nearly as scary because they know that they could retire and potentially do a new career somewhere else to scratch that itch or satisfy that goal.
It's okay to be scared. However, hopefully, we're scared for the right reasons. We're not scared just to be scared. We're either scared—we're scared only because we know that we're behind. We're not scared because we don't know the score, I think is one thing.
VERAs (Voluntary Early Retirement Authority), VSIP (Voluntary Separation Incentive Pay), and RIFs, R-I-F. Our firm has helped people, guys, go through these since—and Mason & Associates has been around since 2002 or 2003, but we've been helping federal employees since the early ‘90s. We've seen this.
We don't know what the VERA, VSIP, RIF is going to look like going forward, but we can at least acknowledge right now that if you get caught up in any of these, or DOGE does something similar to what we've seen previously, the rules are different under these, and we have experience taking clients through that process.
Ben Raikes: Yeah, and I think John, too, we talked a little bit before this; it's also maybe this looks like something completely different that we haven't seen before, but you're still going to need a team to help you analyze whatever that offer looks like if and when it does hit your desk. Maybe it's not a RIF; maybe it's not a VERA.
Again, I've probably gone too far down the rabbit hole here, but they're talking about Supreme Court precedent, and I've heard Vivek Ramaswamy, not to scare people, say, “Hey, here's how we're going to start it. If your social security number ends in an even number, then you get a letter.
We'll wait six months, and then if you end in an odd number, then you get another letter. Whoever happens to be left after, that's the federal government workforce that we'll have.” Now that sounds scary, right? And I think to piggyback on John's point, that should be scary, but not for potential financial reasons.
Your job is where you place a lot of your identity. It's where you probably have met a lot of your friends. Maybe you met your spouse there. That's where you have your Christmas party. That's where you spend the vast majority of your time. And potentially that's going away.
What can we do to make that scary part of it seem less scary? As we can at least know our score, know how we're impacted on the financial side of this, and just, again, do everything we can do to prepare for that so when that letter does or does not come, we feel confident knowing we've done everything to get ready for it.
John Mason: Oh, at a minimum, this is a wake-up call. At a minimum, this is a wake-up call for the entire country, federal employees, and everybody that, “Hello, things could change.”
And for decades, it's known that it's very hard to get fired from a government position. We know some of these inherent potential flaws within the system, right? So we can acknowledge that there are maybe some potential flaws.
Do we need to cut $2 trillion worth of the government? We're not going to talk about that because I honestly don't know the answer anyhow. But at a minimum, it's a wake-up call. And if this is not the event, Tommy, that results in thousands, or however many thousands of federal employees being scooped up in some sort of VERA, VSIP, or RIF, then when? Because arguably it could happen. We've gone through—I think you've been through this.
How many times the government shut down since you've been here? I don't remember. But every time the government shuts down, we say, “Isn't this a wake-up call?” We can't live paycheck to paycheck anymore. We need to have an emergency fund. We need to be ready for this. So this is another opportunity to just wake up and know that we need to get ready.
Tommy Blackburn: I love it because it is a wake-up call for everybody, right? And that change is always happening, and you need to be ready to pivot or have people in your corner who are able to pivot for you or with you. And definitely for our federal employees, and if it isn't to your point, hey, if it doesn't happen, aren't you glad that you've gone through the exercise and you've got things in place and you know you've got the resources to make decisions? If it happens in the future, and if it doesn't, then your plan continues on, so you have a flexible plan with many different options.
I was also thinking the wake-up call here, and I think as Ben was going down, it made me think, and it's like, who are you going to turn to? If these things are coming, do you want to turn to somebody who doesn't know what FERS is? Who doesn't know TSP? Who doesn't know FERS Special? Who doesn't know the retirement benefits that FEHB? Has never heard of a VSIP or a VERA or a RIF?
So one, it was like, you need to have your plan in place and already have your ducks in a row so that you can make decisions and evaluate these trade-offs, right? Okay, if I leave, if I have an option, what am I giving up versus what am I getting? That's part of the analysis. And hopefully, you also want to have to get an advisor up to speed or do you want to work with somebody who's already up to speed in these?
John Mason: It is. So it's self-serving what I'm about to say, but at the end of the day, our clients get top priority. So if DOGE happens and this happens, the existing clients that we serve who are impacted by that will take top priority, and we will be able to help them through that process because we've been through it before and we're actively planning.
At least in theory land we're talking, one of the common themes at Mason & Associates is if you talk about it long enough, and I'm not meaning we want this to happen, but we talked about a military survivor benefit open season. We thought, “That could happen again one day.” What's going to happen if that actually passes?
What's going to happen if GPO and the Social Security Fairness Act actually passes? What would we do when those things happen? So we're already in our mind thinking, “How much is this phone going to ring? How many people are going to want to get in and see us? What is our world going to look like?” Ben's expecting to be a new father here in February, and our phone could be ringing off the hook because all of a sudden, $2 trillion is being cut out of the federal government.
So is it an opportunity for us? Sure. Like at the end of the day, there's only a few firms in the country, guys who are positioned like we are to help clients through this process. So we're planning for it, at least in theory, we're not going to lay concrete plans in until we see what the rules are, but at least for our audience to know, we're thinking about this internally and how it could have major impacts on our business and our existing clients, as well as how many people—which I think is important—Ben, how many people can we say yes to?
So if DOGE happens and 100 people call in and say, “I need help,” what's our number? And we're not sharing that right now on the podcast. I'm just saying this is the stuff we're talking about because we want to help as many as we can without deteriorating the service level to the people who have already trusted us.
Tommy Blackburn: Exactly. And I think it reminded me of a while back, you and I joked, John, or not joked, but as we were thinking and I think thinking about podcast episodes, it was when you're going through life, give us a call. But that we also said was directed at our existing clients. If you're not an existing client and your house is on fire, give us a call, but I can't promise that you're not going to take precedent.
We will try to help as much as we can, but we can only serve so many, and we have to take care of our existing clients first. So for our existing clients, 100% always reach out when something's happening in life. If you're not a client, I guess this is that also it's self-serving, but it's that wake-up call you're talking about, John, of you should probably already have a relationship established versus waiting for it to be thrust upon you and then trying to act.
John Mason: So there are potential Issues with this VERA, VSIP, RIF, DOGE, things that I can think of just like right off the top of my head on how a 37-year-old Ben or Tommy could be impacted or how a 55-year-old Ben or Tommy could be impacted. $40,000 of federal pension is like having a million dollars, right? So it's a big asset.
Then we have health insurance that continues for the rest of your life if you retire. That's like having another $12,000-a-year pension or more. We think about the TSP match, we think about all of the benefits associated with being a federal employee. So now a RIF happens, or a VERA happens, and the VSIP, the Voluntary Separation Incentive Pay, people used to get excited about 25 grand.
Let's say it's 100 or 30 or whatever it is, it's higher than it used to be. Now people get really excited. They see dollar signs, right? But they didn't know how to value their pension, or they did know how to value their pension, and they say, “That's not high enough.” So now I'm taking a reduced pension, and I'm not going to take survivor benefits. And then that impacts my health insurance.
And my biggest fear in this—maybe not my biggest fear, but a fear is that there could be really compelling offers that they flash dollar signs, just like they told Mike when he was in the Air Force, “You need to leave the Air Force and go make the big bucks in the private sector.”
That could be a message that comes out of DOGE. We're gonna cut the federal government, we're going to reduce the size, and we're going to give you this big money so that you can make even better money in the private sector. And people are going to see dollar signs, and they're going to see their credit card debt, and they're going to do silly things, like retire on MRA plus 10 where they shouldn't have, or decline survivor benefits when they shouldn't have, or lose access to their health insurance, or fundamentally just miscalculate.
How many people are going to leave voluntarily because they're making $100,000 at the federal government, and Booz Allen wants to pay him $110,000, and they don't know what they're giving up to make that switch?
Or they got a $25,000 incentive, and they thought that made it worth it. It's scary to think about the people are going to see dollar signs and opportunities, guys, and they're not going to know how to evaluate it.
Tommy Blackburn: I love that you put some examples there. I'll let you go, Ben, but yeah, I think that's very helpful of that.
It's the analysis we've been alluding to, right? Being able to start with a strong foundation to make decisions and then that's the decisions; that's examples of the things you're going to need to weigh there.
Ben Raikes: No, Tommy, John, you guys hit a lot of it. But just I think coming back to—we speak a lot to the do-it-yourself types here.
And I think that's where people can get really lost is exactly what you said, John: I'm making a hundred thousand dollars now. If I make a career at one 25 for the next 10 years, that potentially makes up for things X, Y, and Z. You really need to be working with a federal employee expert to determine, “What am I actually giving up here?”
I think of something really silly just as far as giving up your federal employee's health benefits. Federal employees listening to this call, most of the world has to wait until they turn age 65 to sign up for Medicare Parts A and B. You all have to have five years in immediate retirement.
Okay, so that's as early as potentially 57. That's an eight-year gap that you'd have to go find health insurance. Maybe you find a private insurance policy. Maybe you do some kind of temporary continuation coverage, or maybe you do ACA, whatever it may be. Just your health insurance alone, that's potentially hundreds of thousands of dollars that you're leaving on the table.
John already mentioned how much your pension is worth. How much is your FEGLI life insurance worth? How much is the TSP match? If you're just talking to Joe Schmoe Advisor, you don't want Joe Schmoe Advisor to be figuring this out together with you.
You want someone that says, “Hey, here are the five biggest things. Here's how much it's going to cost you, and here's how it impacts your plan.” Otherwise, we're just shooting in the dark trying to either figure this out on our own, or talking to someone who doesn't know your benefits.
John Mason: We recently released an episode that was like navigating FERS.
It was a pretty popular episode, I think. Maybe we can link that below, but it talks about some of the things that we're referencing today, guys, where the three versions of retirement: MRA plus 10, immediate, unreduced, etc. So that'd be a good episode for our audience to go back and listen to if they want to brush up on—
Tommy Blackburn:77.
John Mason:77. If they want to brush up on everything FERS, or at least a lot of things FERS. I'm thinking back to a guy named Michael Kitces and Carl Richards, who have a podcast, and they're financial planners, or at least speak to financial planners, and they drew a picture. Carl Richards is known for his pictures, and they're like squiggly lines and very simple pictures.
And he drew something about the overconfidence gap. And it was like, really intelligent people can be really overconfident, right? So a lot of people listening to this podcast could be very good at their job—doctors, attorneys, lawyers, what have you—or any of those, but just very smart, intelligent people.
And with that intelligence, we all, I think, I believe that I can figure a lot of things out on my own. I think that I'm intelligent in my business, so I should be able to be intelligent in medicine, to a certain extent. And then all of a sudden it's that smartness or that intellect results in this overconfident gap where you overvalue your ability to make these decisions on your own.
This could be a wake-up call that maybe that overconfidence gap needs to shrink a little bit. If you're an overly confident DIY-er, and you're not prepared to analyze all of these things immediately, then maybe we need to bring that confidence level down some and acknowledge that maybe you need help.
I'll share one other story. We have a friend who needs to burn some money in their flexible spending account. So they want to do some of the genetic testing and other advanced blood work that I've done. And they asked the opinion, they were like, “What do you think about this company?”
And our family response to that was, “It's great, but are you going to know how to interpret the data? And is it worth getting the answer if you don't know how to interpret the answer? What do you do with it?” And I just constantly come back to my own health and need to, it's a constant reminder for me that I can be confident in what I do as a financial planner, but I need to check myself at the door when it comes to everything health, because if I'm overly confident there, I'm probably missing out on a lot of things or doing a disservice by not getting a professional to look at it.
So I think don't be overly confident in something that you don't know or don't live or don't breathe every day because when life happens, it may be too late to overcome that gap.
Ben Raikes: Perhaps I've said this before, but John, more to your point in just a quick illustration, I read this or heard this, I don't know, four or five years ago, that if private plane ownership, the vast majority of crashes of private planes, their owners are doctors.
Why are most of the people that crash their private planes doctors? Because I can do open-heart surgery. I can do brain surgery. I've been to school for 15 or 20 years. Surely I can figure out a few dozen controls on a plane and land this thing safely. That's the illustration I think of the overconfidence gap is if I excel in one area, obviously I can transfer that knowledge to excel in another area.
As this private plane ownership example says, don't be the guy that's going down with the plane, right? Hire an expert. Hire someone that knows what they're doing. Hire an expert in their field.
Tommy Blackburn: I would say, so as we're tagging on illustrations here, I've got to get the one that came to my mind, and it's a friend of ours.
And I love your example, Ben, but that one, as I thought about it, that's like even more of a stretch because it's like you know nothing about flying and why you have that confidence, but the just because you're a doctor doesn't mean you now understand aerodynamics, we should recognize some differences there.
More dangerous is when it's closer to home. So maybe if you're the federal employee. And because you're already in the system, you feel like you know it very well, and you probably do, but maybe you know enough to be dangerous. And the example that comes to my mind is a friend who owns another business; he is the CEO of the business, and as he was sharing things with us, and he's already gone down this route, I think it's overconfidence, where he is making some changes, some tax changes in the business, that upon bouncing them off of us, I think you're really have rolled the dice here and are going to potentially get hit with millions of dollars.
I'm not even kidding just to be eccentric here. This could be a very huge mistake that he made. And I think that's like the more dangerous cause I know in his mind, he's thinking, “I'm in this business every day. I've been running this business. I've been thinking about all the moves we make as a business,” but he stepped outside of your comfort zone, and you probably made a decision too quickly without checking everything that you should have checked.
And I certainly hope that we're mistaken in the potential mistake that he's made, but that's just, again, the one that comes to my mind is it's even more dangerous when it's closer to home.
John Mason: Sure, people also tend to make bad decisions when the potential bad decision could lead to a really positive outcome, right?
So the opportunistic or the grass is always greener on the other side kind of thing. It’s “if I do this, I'm going to save X dollars in taxes. I clearly need to go down this path, or I clearly need to accept this voluntary separation incentive pay.” Like it goes down the same path of “This seems really cool.”
“Now I've gotten really excited. I'm at the gambling table. I can't lose, right?” And you just all of a sudden start making these decisions. So we don't want people to make hasty decisions. We want people, like we've always said to take a step back and say, “Okay, how does this apply to me?” Since we're talking in analogies, I think my last one for today, and maybe this is how we close down the podcast is I am going on an RV trip soon.
And I've spent the last two or three days trying to learn how to operate my new fifth wheel again because I got one day with the dealer that showed me how to level it and how to do all these things, and I've created my checklist. It's in my iPhone. I have step by step how to set up my RV at the campground.
I went on a five-week trip this summer, guys. I know how to RV, but I have a certain amount of anxiety going into this new thing because it's a new rig. I haven't done it in a while. I have to remember all the various steps. I honestly, when we go pick up the RV, I don't even know what equipment's in it right now.
I don't even know. I might have to go shopping when I get there. But I've got my checklist on everything I need to do when I get to the campsite. And it's going to take me longer this time than it did in July and August. No doubt. Because it's a new rig and I haven't done it in a while.
My takeaway for the audience today is DOGE may or may not happen. Something could likely happen or will happen over your lifetime; whether it's DOGE or another opportunity or another life event, something's going to happen. Do you have your checklist ready? Do you know that you need to chalk your tires unhooked from this, do this, do that? Do you have your checklist ready so that when that first domino falls, you're going to be able to know how to jump into action?
“Do I DIY-er?” Awesome. Just know the questions you're going to ask. Know how you're going to handle this situation. Be ready for it. Acknowledge the fact that as a human, it's okay to be scared and nervous about what's happening, but let's go into action mode now and start thinking about when this happened, like there's no reason not to plan for this to happen to you at this point.
If you're listening to this podcast and you've seen DOGE, okay, start planning for “What if it's me?”
And if it's not you, great. At least you have a plan in place. It's too late to develop an evacuation plan when the hurricane's about to strike. That's my two cents is the dominoes will fall eventually in one area of your plan, and having the right checklist or right team is going to be very important.
Ben Raikes: Well said, man. I don't have much to add there. I love “don't plan your evacuation route as the hurricanes come,” and work with somebody who can help you along the way. Absolutely.
Tommy Blackburn: It's been great. I think we delivered the message.
John Mason: Yes. So thank you. Thank you guys for being here on another episode of our podcast.
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