#178: From Paychecks to Playchecks: Building Multi-Generational Wealth
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Welcome to another episode of The Richer Geek Podcast. Today, we are joined by Mark Murphy, CEO of Northeast Private Client Group and a renowned expert in financial planning and wealth management. He explains the importance of building multiple income streams and designing a life with intention. Discover the principles of cash confidence, the significance of investing in your money-making endeavors, and the importance of creating both paychecks and playchecks. Learn how an entrepreneurial mindset and strategic collaboration can transform your financial future. Plus, explore Mark's book, 'The Ultimate Investment,' and uncover the secrets to achieving financial freedom.
In this episode, we’re discussing:
Cash Confidence: Importance of maintaining liquid assets or reliable income streams to navigate financial challenges.
Money Machine: Investing in one's business to generate a significant return on investment.
Paychecks vs. Playchecks: Differentiating between income-generating assets and expendable assets for financial stability.
Entrepreneurial Mindset: Emphasizing strategic planning and financial engineering to create multi-generational wealth.
Collaboration Over Isolation: Working with a team of financial experts to optimize wealth management.
Transformational Language: Using impactful, memorable language to reinforce financial strategies and principles.
Invest in Yourself: Continual self-improvement and education to advance career and financial goals.
Diversified Asset Classes: Understanding the significance of various asset classes beyond traditional investments.
Resources from Mark
Contact number: 973-422-9140 | Email | Northeast Private Client Group
Resources from Mike and Nichole
+ Read the transcript
Mike Stohler
Hey everybody. Welcome back to another episode of The Richer Geek Podcast. Today's episode is brought to you by REI Words, your go to SEO agency for increasing traffic to your website. Check it out at reiwords.com. Today, we have Mark Murphy, CEO of Northeast Private Client Group. He's an accomplished author, speaker and motivator, he's revolutionizing the financial planning and wealth management industry. He helps entrepreneurs like a lot of us. She had multi generational wealth through personalized strategies leveraging his strategic planning and financial engineering expertise. Forbes has actually ranked him as number one financial security professional in New Jersey. And number 15 nationwide.
Mark Murphy
Actually, No. 3 nationwide, that was 15 to 3.
Mike Stohler
Well, there you go. Congratulations.
He also has a book that we'll get into a little bit the ultimate investment. No. 1 best seller and new release on Amazon. How're you doing, Mark?
Mark Murphy
Welcome. I'm doing great, Mike, I'm happy to be with you.
Mike Stohler
Everyone wants to know a little bit about your background, who you are.
Mark Murphy
I just think I'm somebody who's endlessly curious. You know, I grew up dumb and broke in Suffern, New York. I just always knew about myself that I was always at my best when I was serving others. And so when I got up, I got off the campus of Indiana University at the Kelley School of Business with a degree in Finance. That's my passion right now. It's been for many, many years, especially Indiana basketball, and Indiana football. But when I accepted the job at my company in 1985, they offered me $1,000 a month. And that was $1,000 a month more than I was making. And it wasn't even really a salary. It's really a draw against commissions. But I realized that when I worked for my own company, later that year, I realized that I thought we'd make money, I hoped I hoped we'd be successful. But this was really my vehicle to make other people's lives better. And we've built that into what it's become today, which we're known as the key business strategists and critical thinkers and financial advisors to entrepreneurs and entrepreneurial thinking people. And we're the guys that teach people how to create multi generational wealth.
Mike Stohler
Yeah, so I also went to Bobby Knight University. Yes, basketball, our class this year, transfer portal, I think is going to be fantastic. I'm really looking forward to the season.
Mark Murphy
Well, I'm on the National Varsity Club Board. And so I am tickled pink, I'm very involved with the NFL. As I said, I've got basketball and football tickets. If anytime you and your family want to come to a game, I would love you to be my guest.
Mike Stohler
Absolutely.
Thank you very much. No, there's a lot of commercial students, a lot of it seems like we're getting inundated with financial strategists and financial planners, what differentiates yourself from all these other firms in the industry that everyone sees.
Mark Murphy
I think that money market CDs, IRAs, 401(k)s stocks, bonds, mutual funds, blah, blah, blah. Most of our clients have some or all those assets, most of our clients will have some or all those assets all their life. But at best their inflation adjusted holding tanks, Bill Gates was on this call today wouldn't say "I'm worth $110 billion, because my 401(k)." True wealth is created in one of three areas. It's investing in your business or some other operating company. It's investing in real estate, it's financing deals, I'll leave out divorce and inheritance. And I think that primarily, it's whether you own a business, or you just have an entrepreneurial mindset. I always say it's all BS, it's all belief systems. And it's about an entrepreneurial mindset of how you think about money, how you think about your life. And I think that success is not defined just by wealth. It's defined to me by having a life by design, as my friend Dennis Marble says, "The life by design, so you're designing your life to be successful in all areas, not just financially."
Mike Stohler
Yeah, that's very good, because a lot of people really don't know anything outside of maybe their IRA, their 401(k), whatever their job gives them, and then they don't know how to go about choosing in person, this fiduciary thing, not fiduciary, there's some terms out there that people just don't understand. And they get kind of caught up and to fund this bond, you have to do the S&P 500. You have to do these certain things because they get all this information, or what would you tell someone that's best looking at the different options, especially in this type of time period, and we'll get into this a little bit later on, but someone's just going to your website and saying, I don't even know what any of this stuff is. Someone told me to do the index. Someone says, Hey, but somebody in risky stuff. What do you tell him at first, the first timers?
Mark Murphy
I'm telling people that I go back to life by design. I want to sit back and go, "What ultimately does your life look like?" You know, meaning? What do you aspire to do? Or your aspire to look like? And then how do we reverse engineer to get there? So before you decide where to put your money or what to do, I think it has to start with a visualization of what you want your life to look like, and what your career should look like. I think sometimes you plan your life too meticulously. God has a way of laughing at you. But at the same time, I think things don't happen by happenstance, I'm not going to, you know, sit on my couch and eat Cheetos, and the world's going to come to my feet, I think it's going to come because you're going to go do it with intentionality. And I think you want to create a strategy, not just a plan, but strategy, a plan and a strategy around that plan. I'm just a big believer that people are not planning, I think if more people are planning on spending more time planning a family vacation than they're working on their finances.
Mike Stohler
Yeah, that's actually very true. And now how do you know there's a test up there? The four questions you need to ask yourself to know if I'm in that right place or not?
Mark Murphy
And those questions clearly are: Am I passionate about what I'm doing? Am I good at it? Does the world need that product or service? And can I get paid to do it? And so I look at that through everything through the prism of those four questions. And it can't be a yes to one or two, or even all four. Mike, it's got to be a hell yet to me, for me to move forward. And if I don't do it, I probably will not do it, I'll find something else. Because the challenge is always time and attention. So everybody tells me I don't know anybody who doesn't tell me how busy they are. They're swamped, they're overburdened. And I'm saying, what are you willing to give up? To be able to have what you want to have? Or what are you willing to do that you're not doing now? That what you don't have the thing that I listened to very carefully, because remember, the good ones, till the great ones ask what I listened to, is not what people want to tell me like, on the vision of what they want to do, I really listened to what's the plan of what they're going to do to actually execute it. Because everybody wants all the prizes in the money in the rewards, the titles and all the glory that comes from being successful and doing the job and doing the work. But they're not willing to put the time in to be able to go do that. They just want to magically appear and like they're entitled to it. And I think you got to go get you got to do the work.
Mike Stohler
Yeah and especially for those, when you say doing the work, how about those people that feel like, I should probably just do this by myself.
Mark Murphy
I was thinking about doing the same. Instead of hiring my dentist, I was going to just do my own root canals from now on, because I could do it better. I think that ultimately, there are probably a few people that can do it well. But to me, there's been lots of studies out that there's an inverse correlation to the amount of education and intelligence you have, and the success you have with money, that the smarter you are, the worse you do, because for so many people, there's a level of hubris around it. And as we know, he versus the ruination of all habits. And I think the idea is that, you know, like, I think in life, you can grind things out. And you can get a 1x or 2x, or 3x, return on whatever that money or that event or that business or whatever. But if you want to get a 5x, or 10x, or 20x, it's about collaboration with other like minded people, to help you be able to get what you need to do. And I think that ultimately, I think, what for most people, you're talking about personal finance versus business finance, they're similar, but very, very different is that if you look at yourself as the person, the center of the universe, and almost like a sun, where rays are coming out of the out of the circle, I think most people that I know have somewhere between five and 15, we call micro micromanagers. They have an accountant, they have an attorney, they have a property casualty insurance agent, a life insurance agent, a money manager, a pension advisor, a consultant, it depends who you are, you know what kind of people everyone, some people have very few many people have, you know, many more, but most of these folks don't know each other. And so one of the things we try to do is help coordinate and integrate the micromanagers. And if you've got good people, let's make them better informed and have them work harder and more efficiently for you. And if you've got some folks that really aren't up to speed or not up to speed, where you are or where you're going right now, let's get them replaced with people that are like minded to you and espouse your values and your ideals and your vision of where you want to go.
Mike Stohler
Yeah and I think that is very important. I've seen financial advisors say no, this is what you need to do. And I'm like, why? Well, unbeknownst to me, it's because he makes 5% on the front end in front of 5% on the back end, and then he tried to do things but I couldn't get that why, why is this good for me? And I think that relationships are extremely important for someone to trust with their money, this is their livelihood. It's very important. To know this person and trust him. Now, we've talked a little bit about getting it going and starting it, like this one phrase is called, going from paychecks to go into paychecks. I think that's what all of us want to get to.
Mark Murphy
I think, ultimately, what we want our clients to do, is we want them to set up, as somebody who manages not millions of dollars, but billions of dollars for somebody that there's really dozens, Mike dozens of asset classes. But for our purpose, there's only two, and we call them paychecks or either free capital or paychecks. What we want our clients to do is create a series of assets that will give them either a guaranteed or a highly reliable stream of income to replace their income at their job. And we'll call those paychecks. But we also want them to have another series of assets where you can spend it, you can save it, you can give it away. But the important thing is it will not be responsible for producing income for your family. So if you have both paychecks and play checks, that's financial freedom.
Mike Stohler
Yeah, and it's exactly what you want. It's like you, you need that paycheck, you want to be comfortable, man, as soon as you start getting some wealth, and you have that paycheck, then just start having a little bit more fun.
Mark Murphy
It's about ACR. Annual Recurring Revenue, the biggest risk I think people have, there's lots of risks, but the biggest one is the permanent loss of income. And so that means if you get disabled, but it really also means if you retire, where are you going to get that income replaced? So that you can retire? Or do you have the opportunity to retire? If you choose to do that?
Mike Stohler
Yeah, you can't rely on someone who people say, Well, I'm gonna get Social Security, I'm gonna get this and that. And I'm like, I think younger people would probably never see Social Security or any of those types of things.
Mark Murphy
I talked about, you mentioned belief systems, or you may answer a question, which I'm going to go back to, we talked a little bit about, differential mindsets, you said, should I put the money in the S&P 500 Index, or I should have put it into, some other vehicle or this or that or the other thing, and I think the issue is one of the my least proud moments in my career that I was so proud of at the time. And I look back, and I'm not proud of it. I would come and sit with somebody, and they'd be in a mess, they have a lot of debt. And they had, I'll call it bad values around money. And what I did is I restructured their debt, I cleaned it up, I did all kinds of things to help if they owned a business, and I helped them grow their income or grow their business. And then you check back in a year. And what you did was because they didn't have good values around money, by getting them out of debt and then growing their business. Instead, if you doubled their income you have about 10x their problems, because it was like giving an alcoholic a gallon of vodka or a drug addict an eight ball of cocaine.
Mike Stohler
Yeah.
Mark Murphy
And so until they had good values around money, it was the belief systems weren't right or, or the arrogance of what happens. Like there's so many folks that I think one of the great lessons is I hope that adversity comes to you when you're young, not to scare you. And not so that it hurts you in the long term. But sometimes realize you don't have the Midas touch on everything allows you to have a little bit of perspective and not make silly decisions out of arrogance, the risk, I think is like when people say, Well, I've been successful here and I was successful, he maybe even a second time, so that no matter what I touch turns to gold. And you're and people are. I see a lot of people out there making a lot of silly, foolish decisions, that they're going to wake up one day and go, Oh, my God, what did I do? I? I screwed the pooch.
Mike Stohler
Yeah. Now, you did this. And it was a lesson learned. What is your belief? Now? How did you switch? What are you doing now then from when you made those errors in the past? I
Mark Murphy I think that there's a couple of things. One is that the simple answer is, there's only three things you can do with your money. You can save it, you can pay your bills, or you can spend it. If you do it in any other order. There's never any money to save. No matter how much you make. You've got to pay yourself first, you've also got to make sure that your money works while you sleep. And if you have a business, you that business must generate revenue or income without you doing the task.
Mike Stohler
Yeah. And that makes a lot of sense. It's and that's why so many entrepreneurs, successful entrepreneurs, make sure that they put some back into the business to grow the business, they make sure that they diversify their portfolios. Instead I just it kills me when I see these young kids that are making a lot of money. They're driving around in the Bentley's and the Lamborghinis and things like that. I'm like, That's not getting you anywhere. It's not doing anything. You know, go buy a house, go buy some real estate, do something with it. That gives you that passive income. Now let's dive a little bit and to your book, The Ultimate Investment. Tell us a little bit about what that is, what's in it and why we should pick it up.
Mark Murphy
We should pick it up because my mother would really appreciate if you bought a copy if you bought the book but other other than and that the other reason would be that one of the things and we've kind of expanded on it since then, and I've trademarked it is the pyramid of great multi generational wealth. And I think that the number one reason why people do not succeed or do not succeed, as great or as or as well as they should succeed, is because they don't have cash confidence. meaning in life, you got to start with cash confidence, that cash conference can either be, money that's liquid and available to you, or stream of income that is reliable to you. That's what I mean by cash confidence. Because remember, the best deals are made. When I have cash, and somebody needs money. I've created a lot of my wealth, when I had money, and other people needed it. The second thing is, it's hard to go long term in a plan, because life is not fair. And it's not level. And it's not, you know, arithmetic, the world goes like this. And so you must have enough staying power by having enough cash confidence to better withstand a bad quarter or a bad year or bad event. And so it starts with a cash conference. The second thing we talked about is if you only have $1, to invest, the best place I suggest people put his is in their money machine. And so for people that own a business, I'm very simple. If you're an expense, you're on the chopping block, if you're an investment, as long as I can get a four or five to one return on my money or more, I have an unlimited appetite for investments. So I want to feed my money machine first. And then we discussed it earlier in the podcast that I want to start to create paychecks and play checks. But there's still one more level at the top of the pyramid, that if you can have earned income beyond normal retirement age. So when all your friends are going to early bird specials or worried about living too long, or drinking domestic beer instead of imported beer, you could be a net saver in your 50s, your 60s or 70s, even your 80s where you can really create multi generational wealth by having income beyond that time by having annual recurring revenue beyond that beyond a normal retirement income. Remember, what we want people to do is get paid for what they know, not what they do. Even people that own a business, most people that own a business are not entrepreneurs, they bought themselves a job. And for the people watching this, Mike. The other thing is they go well, what does that have to do with me? I don't own a business. Well, if you don't own a business, you're the product, you are the company. And so you sit back and you say to them, what kind of training do I need? Or education? Do I need to get the next rung? And among the ladder? Do I need to invest myself? Do I need to make better presentations? Do I need to think more entrepreneurially? Do I need to build my network? So I have a greater network of folks that I can collaborate with to grow my business. I mean, there's dozens and dozens of different ways that you can invest, not where you are right now. And I think what my great skill is, is that I see people where they are right now. Because if you can't see people through rose colored glasses or Pollyanna ish, I got to see you where you are. But what I want to do is see you at your highest potential, and help you aspire to be the highest, the best version of what you want to be. And again, if I was looking at one of the very few gifts that I may have, that may be one of them.
Mike Stohler
Yeah and you talk also about transformational language. Right. Tell us a little bit about that. And how does that transform your roles?
Mark Murphy
I think the reason you want to have transformational language with people is, we have so many conversations today. By saying phone, we have interaction with people, which we've always had, for anybody alive as has been around since the telephone and private interactions. But when you now add texting and emails to the mix, people are having 1000s of interactions with people almost a date, hundreds or 1000s. And so it's almost impossible to remember what you had for lunch, much less every conversation that you have. And so part of the reason I have transformational language is you need to have a soundbite that sticks in their mind, so that people can internalize things, you're telling them so that it's not your idea. But it becomes their idea. You know that things are working in your business, when your customer, your client, your patient, whatever you call the people you do business with, when they start repeating back what you've taught them, and that becomes their mantra. And I think you can't do that with a dissertation that may you know may lay it out it comes back with a transformational language that allows them to go to then get it like I got it because the attention span of most people for very good and very bad reasons is not very, not very, not very robust.
Mike Stohler
That's very true. That's why you don't have a one hour long podcast or two hour long podcast. It needs to be short and sweet to the point. A lot of bullet points for people. Now part of the five ingredients to successful life or getting that you know to me, we've talked about the paycheck paychecks having multi generational wealth but it's also kind of like that that time off that me time, to be able to have this type of wealth, to be able to work from anywhere to be able to take time off to be able to have kind of like the meantime, can you explain a little bit that some of the examples that you've seen from some of your clients where they've actually said, Thank you, because I actually have time to think now? They're not?
Mark Murphy
I think that's mean, that's sort of what in our wheelhouse means what the question, Mike.
I've been asked probably 10,000 times, is some version of how do I grow my income? How do I grow my business? How do I grow my freedom of time to take more time off? How do I grow my freedom of relationships to spend time with the people I want to spend time with? Or how do I grow my freedom of purpose to have a purposeful, meaningful life? And you're one person, I'm one person, pretty daunting when you think about it? And so the idea is, it's probably always the wrong question. It's not how but it's who we need to collaborate with to grow our income, our business, our freedom of relationship, freedom of time, and, and freedom of purpose. That's the place that people look, because if you're working 13 hours a day, and you want to double your income, you actually can't double the amount of hours you work. So the idea is to figure people how to leverage and scale their life. And to make sure that they've got a life by design. What I mean by that is, to be able to, I think in a perfect world, you don't have people always saying, what is your business life and your personal life, like, and I go, I don't really understand that. What I do understand is I have a life. And I put myself in a position that I go from one thing I love to something, I love more to something I love more than that, whether it's working spending time with my five kids spending time with Lisa, spending time with, I'm gonna date myself at this point, I'm heading to New York Knicks playoff game. Tonight, as soon as we get off this podcast.
Mike Stohler
Yeah.
Mark Murphy
Spending time as we talked about watching our Indiana Hoosiers, hanging a six banner, hopefully, in the near future, I think, it could be more charitable work, or the things I want to do to make people's lives better. You know, I think my goal at this point in my life, you talk about a life of purpose is I've been so blessed. And all I want to do is to just help as many people as I can, my goal is to improve the lives of 100 million people. And I know I can't do that by bike. But if I could collaborate with guys like you, and like minded people like us, imagine what we could do together to make everybody's lives better, and create abundance. And remember, the great thing about abundance is, some of the most selfish people I know, are people that have just enough, because they have just enough for themselves in no excess excess, what I want to do is create as much abundance in the world as possible, we can create a community of helping as many people as we can, and making this the kind of world and the kind of place that we all want to live and raise our kids and grandkids in.
Mike Stohler
Yeah and that's profound, it's something that I do in my business. I have it on the wall in my offices, I want to build a life I don't need to vacation from. And that's what I want to do.
Mark Murphy
That is profound. I love that I'm gonna steal that if you don't mind, I'll give you a credit, I'm gonna steal it. That's brilliant.
Mike Stohler
You can and you know, I look at it every day. And when you get down to get this when you get that. And something else that once you achieve this through some like Mark Murphy, then you can start giving back because now I have more freedom that I can. And ladies and gentlemen, that's listening, you can now go to charities, cheer charities, you can give back in ways that you didn't think why don't have time to do this. So build that life, having those paychecks and play checks, and then all of a sudden, it's like, oh, wow, now I can get involved and give back. And you can't do that alone. It's very, very difficult to do that alone. And that's why you're always saying, I think several times during this podcast, you're talking about your inner circle, and choosing your inner circle wisely. And that's just, it's very, very important, isn't it?
Mark Murphy
I think everybody who's watching this would say that somebody has said something to them at some time, that ruins their day. You know, I realize you don't want to give people control over how you feel about yourself. But they, like myself, I put on a few pounds over the winter, somebody's got a you know, you've gotten fat. Well, that's not going to make me happy. Maybe I'll go home and watch what I eat and move my body a little more. But it doesn't make me feel good. Or when someone says, I just want to call you and tell you that you spoke to my son the other night. And it changed how he thought about his life. And I just want to call you and thank you for that because he's a different person to just spoke to, or thank you for something to go. I'm six foot two. When I have that conversation, I'm seven foot two. And so what we can make somebody's day or he can ruin someone's day because of what we're doing. So imagine if we create a community and ecosystem around us people that are like minded, that no there's no right way to do the wrong thing. And imagine the creativity that we can have to inspire each other to create this incredible synergy, where one plus one does equal two, or one plus one doesn't equal one and a half, one plus one equals five, or 10, or 20. That's where I want to be.
Mike Stohler
Yeah. And that's, I think all of us, just most of us don't know how to do it and don't know how to get there. They need help. And they need that professional, that mentor. And no matter how successful you are, you still need the mentors, you still need the coaches you still need, you can never stop learning. Can you?
Mark Murphy
That to me is sad. I've said a few things in life. There are no finish lines, there's only milestones. And so I think there's something sad when you see people that have stopped learning and growing, that they have, they're fully formed, and they've arrived. And what happens is your future has to be bigger than your past. So what you see is people who stop learning and growing, their world goes like this, it just starts getting smaller and smaller and smaller. I always have a theory that people don't die, their life gets small. It just gets too small, or people stop being excited in life, part of the challenge of not retiring. There's a lot of trials. And I'll tell you, I mean, for some people again, there's some people I know who've retired and they go, Oh my god, this is like going to summer camp for senior citizens. I should have retired five years ago.
Mike Stohler
Yeah.
Mark Murphy
But for every entrepreneur I know, if they were to do that, they must always be in creation and fascination mode, always learning and growing. When you retire, the structure goes away. the team goes away. You got a team in your business, you got no team in retirement. no risk, no reward, no excitement. But then and last but not least the applause stops. There's nobody saying "Hey, Mike. Oh my God, I'm gonna steal that sign on the wall." Well, you just said something profound that will be applauded when you retire. I just think there's a lot of reasons why people want to create, which I thought that it would you had said was so brilliant that I want to create a life that I don't need a vacation from. I want to create a life I don't have to retire from.
Mike Stohler
Yeah and that is profound. And that's why we really, were into hotels, we own hotels, and I don't ever have to retire. You just create that team to where I can take a step back, but you're always still running the business. Before we leave, Mark, where can people find you? People are interested. They want to get to know you more? How can they do that?
Mark Murphy
They can call my assistant, Maureen Motherway, Vice Chief of Staff and call us at Northeast Private Client Group. I think it's www.northeastprivate.com. Our headquarters is in Roseland, New Jersey. There's a couple of other companies around the country that are northeast, but we're in Roseland where they can call Maureen Motherway, my chief of staff and I'd be happy to talk to them at area code 973-422-9140. I'd be more than happy to have a conversation with anybody. And I just want to tell you how much I appreciate you and how much gratitude I have for you for including me in your show.
Mike Stohler
Well, thank you, sir. And it's been some profound lessons and takeaways and I think the audience will absolutely love this. Ladies and gentlemen, Mark Murphy, Northeast Private and you can go to I think it's northeastprivate.com?
Mark Murphy
Yes, northeastprivateclientgroup.com in Roseland, New Jersey, and so it's all good things. Mike, thank you so much. I appreciate it.
Mike Stohler
Absolutely, Mark. And go Hoosiers!
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ABOUT MARK MURPHY
Mark B. Murphy, CEO of Northeast Private Client Group, is an accomplished author, speaker, and motivator who’s revolutionizing the financial planning and wealth management industry. He helps entrepreneurs achieve multigenerational wealth through personalized strategies, leveraging his strategic planning and financial engineering expertise. Forbes has ranked him as the #1 financial security professional in NJ and #15 nationwide. Additionally, his book, The Ultimate Investment, is a #1 bestseller and new release on Amazon.