Frank Molinar On The 5 Essentials for Smart Investing

An Interview With Jason Hartman

Check the Compass. Investing is all about the future. What frames your mindset about life down the road? Is it fear or confidence? Try this exercise. Write down all the economic collapses you’ve heard about over your lifetime and next to them, put a check by the ones that actually came to pass. On another sheet, list as many new technologies and advancements you can think of in five minutes. Compare the lists — it should be a lopsided comparison.

As a part of my series about The 5 Essentials of Smart Investing, I had the pleasure of interviewing Frank Molinar, CFP®.

Frank Molinar is a leading authority in Financial Readiness training to those with a military mindset. Through his work with the Dept of Defense, Arizona’s Attorney General, the AZ Dept of Veteran Services, and multiple VSOs he has personally logged over 4,000 hours counseling service members and veterans from all ranks, stages, and issues, and he has spoken to tens of thousands on the principles of financial readiness. A prolific speaker, storyteller, Certified Financial Planner™, and seasoned business owner, his book, keynotes, and workshops are consistently rated 5 stars for being relevant, educational, and motivational.

Thank you for doing this with us! Our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?

I was a young married man with a pregnant wife looking for a career while still flirting with the ministry. I was equal parts hungry and hungry to find meaning in my work. The consultative nature of finance was pitched to me after responding to a sort of ‘bait and switch’ advertisement was still appealing. Then, after I failed the first career aptitude test, there was no turning me away. That stubborn resolve helped me navigate the tough early years. Hindsight suggests I was also looking to fill a gap and learn something mostly foreign to me at the time.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far?

One amusing story took place early in my career while I was passionately but kindly brow beating a successful client for not having a will in place when he had a nice home, a beautiful wife and three children depending on him. To his credit, he appreciated the accountability and took the encouragement to heart. When he said, Okay, I’ll take care of it. What’s the name of the attorney who did yours? I had to admit, with a mouth full of salty crow, mine was also not done. I then replied, I’ll have her name for you on Monday. Which I did, much to amusement of the client, attorney, my colleagues and myself.

Can you share the lesson or take away you took out of that story?

Don’t fake it till you make it. Don’t ever fake it. Just make it. It’s not enough to know your subject matter, you must act on that knowledge. When you don’t have experience of your own, be honest about it and lean on mentors to add the missing depth. No one expects you to know it all, but we all hope to work with those who are honest and authentic.

Are you working on any exciting new projects now? How do you think that will help people?

We are about to launch a financial literacy initiative to the Armed Forces community. January 4, is the official release date of, Financial Dominance (military & veteran edition), Your battle plan for a richer life. The unique approach of this content, written in military vernacular, has already helped thousands. It’s time to expand the reach and support as many within this demographic as possible.

Ok. Thanks for all that. Let’s now jump to the main core of our interview. According to this report in Fortune, nearly two-thirds of Americans can’t pass a basic test of financial literacy. In your opinion or experience what is the cause of these unfortunate numbers?

I recently asked a group of young soldiers a similar question. The primary answer relates across the military and civilian spectrums. The subject of financial literacy is not pushed from the top down. Everything rises and falls on leadership. If a Colonel, Coach, Supervisor, Teacher, Parent, or national leader does not recognize the stakes and actively promote and mentor their charges on the tactics of personal finance, how can those statistics possibly change? The way the article reads, it also suggests our current approach to literacy could use a refresh.

If you had the power to make a change, what 3 things would you recommend to improve these numbers?

I don’t think anyone should be given success, but everyone should be educated on how to succeed. Motivating education, not just content delivery, is the great equalizer. Three arenas where this might play out could be: In the required coursework at high schools, colleges, and trade schools. Another could be if the financial industry were to establish a minimum literacy criterion before a person is allowed to invest. Similar regulations already exist with private placements and “accredited investors.” A third idea would be for employer benefit packages to include vetted financial counseling programs. This is not proposing a new expense on employers, just the opposite. Effective literacy programs more than pay for themselves in cost efficiencies.

Ok, thank you! Now to the main question of our interview: You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart investing, what would you say? Can you please give a story or an example for each?

#1 Know your enemy. The average American investor underperforms their own investments by 50%, or more. (Source: Quantitative Analysis of Investor Behavior. www.Dalbar.com) When you recognize your behavior to be the real challenge to investing, you will be better prepared to unpack your financial baggage and take steps to ensure your success.

#2 Secure The Perimeter. When peace keeping forces are deployed to stabilize a troubled region, little fanfare is given to their first and most significant action. But skip this action and the prospect of a successful mission is far from certain. Before anything else, a position of strength is established — a base of operations with a fully secured perimeter. This task is not the mission, but it makes the mission possible.

Smart investing brings peace to the troubled region of our finances. But if you don’t start from a position of strength your investing success is far from certain. A perimeter around your finances is a meaningful savings account (six months’ worth of spending). This is not the money you use to invest; it is the foundation that empowers you to invest. Savings protects your investing from being raided by financial emergencies. You’ve heard it’s never too soon to invest, but it is more important to be ready to invest than to start too soon.

#3 Define The Mission. Smart investing is not accidental. What is the dream your efforts are meant to accomplish? If you say, “a comfortable retirement,” what does that mean to you? When does it start, how long does it last, and what will it require? Defining your mission for investing replaces ambiguity with clarity. A clear mission filters your options without guesswork, establish milestones and tracks your progress. It also provides accountability to stay the course when shiny objects, immaturity, some news story or market cycle threatens to derail your progress.

#4 Deploy the Right Troops. Investing is like deploying others to build a future you could not build on your own. After you’ve defined the mission, you need the right troops (investments) on task. Average investors tend fall on the swords here of muddled priorities and guesswork. Reviewing the options in your 401k, or brokerage account, deploy the troops that have the training to fulfill your plan objectives. It’s not the question of some generic measure of risk, it is the assessment of operational readiness. If your plan calls for a future to be built in twenty years that will last for thirty years after that, which kind of fund is best equipped for that project and time frame? This may push your comfort level. Just remember, the marching band may sound great, but they won’t help much when the mission calls for armored tanks.

When you know what kind of troops to deploy, tap different specialties within that group. The goal is a well-rounded team of some of the smartest minds in the world on task to build your future. If you enlist help to examine your options make sure it’s professional, seasoned help not average investors.

#5 Check the Compass. Investing is all about the future. What frames your mindset about life down the road? Is it fear or confidence? Try this exercise. Write down all the economic collapses you’ve heard about over your lifetime and next to them, put a check by the ones that actually came to pass. On another sheet, list as many new technologies and advancements you can think of in five minutes. Compare the lists — it should be a lopsided comparison.

However you’re feeling about the future, note that history; your history, our nation’s history, even global human history all point to one inescapable conclusion: Human progress and innovation continue to move us forward. This perspective is perhaps the most essential element to smart investing. Confidence in the future is your true north to help navigate the periodic storms and stay on course to the shores of your mission’s destination.

What are your thoughts about investing in cryptocurrency? Can you explain what you mean?

Investing in any currency is very different than the stock or bond markets. When it’s an unregulated, digital currency the variables are much harder to predict, let alone understand. Most of what I’m seeing is not so much investing in crypto as speculating and I’m happy to leave that space to others. However, the tech behind crypto — block chain — is an area worth watching. Meanwhile, there are new ETFs being launched to give investors the option of adding crypto to their portfolios, so the idea of some sort of disciplined approach to this new asset class might not be that far down the road.

What are your thoughts about day trading, using apps like Robinhood? Can you explain what you mean?

Day-trading apps have made it easier for more people to speculate. And that endeavor, being short term in nature, is very different than investing. It’s not suited for most investors. For those who chose to gamble, do so with monies you can afford to lose. If you make a profit, wonderful, but if you don’t, then at least you didn’t bet the farm.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

Arizona has a little-known secret. The Alpine forests on it’s central eastern edge. We were driving to this wonderland one summer when I cracked the new book (at the time) from Nick Murray, The Excellent Investment Adviser. His grasp of this business was unlike anything else I had heard. The pages lit a fire inside and felt as though Destiny herself was speaking to me. I’ve only spoken with him once, casually, but the mentorship of his writings and speeches will always be treasured.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

It’s a different take on the old adage: Presentation is Everything. It’s relevance to me is the idea that before I have anything to say to others, I need to present myself before my maker, or my deepest values for grounding. Then, the presentations I give to others will be less polluted with personal agendas and hopefully, even more impactful.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. :-)

Just between you and me, I would love to inspire a Financial Dominance Movement. Where prioritized and unconflicted financial literacy is delivered to common affinity groups in their language. With the military, it’s through a battle plan metaphor and principles of strategy where we’ve been able to capture the minds of service members and break down the barriers of ignorance. Every major employer, industry, and special interest group has a culture and within that culture are dynamic parallels that can be drawn upon to create fun, engaging and life-altering financial education. The repercussions of easy-to-understand, hard-to-forget financial literacy improves the lives and pocketbooks of everyone in an organization, from the brand-new hire to the shareholders. Financial Dominance holds the potential to improve the lives of millions today and multiple generations of tomorrows.

Thank you for the interview. We wish you continued success!