Get Your Money Game in Top Shape with Mark Harvey, the MoneyPlan Coach
(1:00) - Against the Gods: Probability 101
(8:30) - 3 Biggest Mistakes People Make with Their Finances
(15:15) - The Inspiration Behind The Harvest Plan
(25:30) - Power of a Comprehensive Calculation Engine for Personal Finance
(32:30) - Tools Inside The Harvest Plan: NASA for Your Retirement Horizon
(40:15) - The Evil Science of Credit Cards Podcast@Zacks.com
Welcome back to Mind Over Money. I'm Kevin Cook, your field guide and story teller for the fascinating arena of behavioral economics.
One of the most formative books in my understanding and adaptation of behavioral economics -- basically the cognitive bias work of Danny Kahneman -- was Against the Gods: The Remarkable Story of Risk by William Bernstein, published in 1996.
As the Amazon description reads, Against the Gods "chronicles the remarkable intellectual adventure that liberated humanity from oracles and soothsayers by means of the powerful tools of risk management that are available to us today."
Ironically, even if it had been published a decade earlier, it probably still would not have helped the "geniuses" at Long-Term Capital Management who, in 1998, suffered one of the biggest hedge fund blow-ups (for the 90s) after their PhD-calculated bets on global interest rates went horribly wrong.
I wrote about this in my first article on behavioral econ in 2008, "Mental Models of Financial Sabotage," where I profiled several of the biggest rogue trading debacles of the last 13 years, from the implosion of the world's oldest bank (Barings in 1995) to the shenanigans being newly discovered in 2007.
Six months after my article was published, we learned of Bernie Madoff and his giant Ponzi that burned fortunes from the likes of Steven Spielberg and Zsa Zsa Gabor.
But even more important than the risk theme in Against the Gods, Bernstein introduced me early in my career to the foundational story of probability that occurred amidst the friendship and letters between Blaise Pascal and Pierre de Fermat in the 1650s.
I had read all of Jack Schwager's Market Wizards books up to that time in the late 1990s, and all those tales of market highs and lows, fortunes won and lost, had several themes in common. I call them the "6 Keys to the Kingdom of Trading Success: Psychology, Systems, Probability, Consistency, Discipline, and Risk Management."
Allergic to Algebra
Probability became one of the most fascinating areas for me precisely because I was so unskilled at using it in high school and college. In fact, when I entered financial markets at the age of 29, I realized I had been "allergic to algebra" and therefore set out to learn all I could as quickly as possible so that I could become an independent trader.
The key to success for me here was to use the story of Pascal and Fermat and their gambling friend, the Chevalier de Mere, to pull me into the meaning of their discovery. Staring at equations still made my head spin -- until I slowly discovered their magic. And then it was like a whole new world opened up to me.
At first I was confused by their discovery. "Multiply by the probability of something NOT happening?" Whoa. That made my brain hurt. But I kept digging and trying the equations myself until it clicked. I even taught myself to calculate standard deviation on the back of an envelope.
I could suddenly explain, mathematically and precisely, how Vegas made money consistently on roulette. And this equation also became the foundational calculation for evaluating long-run success in trading.
So I learned the foundational principles and disciplines of trading and investing success by focusing on core skills and habits for long-term success. And it's not much of a stretch to see how most of this wisdom could be applied to other areas of life like building a career, running a business, or running your personal finances.
But in almost all cases it becomes essential to have the right tools, the right peer group, and a coach who will push us to do the things we need to do to advance.
When I was on the trading floors of the Chicago Mercantile Exchange -- now called CME Group CME -- I surrounded myself with smart, successful traders -- in particular the options market makers because they understood probability better than anyone.
I modeled their behaviors and thought processes religiously because many of them were a stone's throw from the greatness of the Market Wizards. I also observed many traders who were chaotic and reckless, and this taught me much as well.
Get Yourself a MoneyPlan Coach
When it comes to personal finance, there are plenty of gurus out there, from Dave Ramsey to Suze Orman. But I doubt they have what my guest today has in terms of experience and tools. Today, we'll introduce Mind Over Money listeners to a financial advisor who combines the best elements of coaching and a rich platform of strategies and decision tools to get your money game in top shape.
In the podcast, we meet Mark Harvey, a 30-year financial professional who has served every area of consumer finances and he's got some of the top fiduciary credentials including RIA, Registered Investment Advisor, and the highest advocate role you can obtain with the IRS to serve his clients, that of the Enrolled Agent.
Mark is also the creator of The Harvest Plan software platform, which is the best, most complete portal I have ever seen for managing your money game, from mortgages, credit, taxes and debt elimination to savings, investments, college planning and retirement.
And there's a reason they call him The MoneyPlan Coach: every aspect of your financial life includes step-by-step video tutorials where Mark walks you through how to use the system to organize your total money game. So I was excited to have him on the program and dive into how this amazing platform, The Harvest Plan, helps us get our money game tuned up, turned on, and ready for anything.
Here are 5 of the questions I asked Mark on Mind Over Money...
1) What are the 3 biggest mistakes you see people make when it comes to their finances?
Mark's answers will inspire you, even if you feel lost or behind with your money game because he's helped thousands of clients in his three decades of service and he's seen every conceivable situation that can be greatly improved with his organized and powerful approach.
2) On your website The Harvest Plan, you have quite a library of educational articles and videos. And I noticed one consistent theme where you point out how the financial advice world -- from banks and mortgage brokers to insurance and investments -- doesn't have our best interest at heart. Can you give us a couple of examples where you see these hidden agendas as most damaging for unsuspecting consumers?
Mark touches on his philosophy of how "the banks never lose" especially with "the evil science of credit cards."
3) Mark, I know a few things about how your software platform can help consumers and investors navigate those obstacles on their own with clarity, organization, and powerful decision-making tools. Before we get into the tools that make The Harvest Plan unique in personal finance, tell us what inspired you to create this remarkable calculation engine?
Mark has a unique angle on the "subprime crisis" of 2007-08 from his vantage point as a veteran mortgage broker. He tells us about the dangerous infatuation with "neg am" loans and how JPMorgan Chase JPM was the lone ranger in a wild west of greed.
4) What are the top 3 benefits a household will immediately gain from using this platform to document and manage all of their financial info?
5) How difficult is The Harvest Plan to learn and use -- what's my time investment? (this answer is very surprising!)
Finally, Mark and I talk about the mortgage refinance tools in The Harvest Plan because prior to the podcast he showed me a process in about 30 minutes that was the most clear and confidence-inspiring experience I've ever had with any real estate deal I've ever seen.
More than that, it was a big picture view of my entire financial life instead of treating the biggest interest expense as some separate monolith. He showed me how my mortgage could be the key to unlocking a goldmine within my total wealth building campaign, if done properly.
So in the podcast, I asked Mark to explain how the platform empowers you to model different scenarios of debt reduction, interest rates, savings rates, and investment returns that can dramatically transform the outlook for someone's retirement in just a decade. More than a personal finance dashboard, it's like a set of decision tools that NASA would use!
Did You Miss Your Chance to ReFi? Fear Not!
By the way, if you feel like you missed your chance to refinance as mortgage rates rise, there's no better time to check out the tools of a platform like The Harvest Plan to dial in what opportunities are still available -- and to be ready for what comes your way in the next year.
To see what I mean, look at the commentary this week from one of the country's largest mortgage lenders, Rocket Companies RKT, the Detroit-based FinTech platform consisting of tech-driven real estate, mortgage and financial services businesses...
"Rocket delivered a solid performance in the first quarter and achieved our best Q1 volume in purchase and cash out refinances, even as rates rose rapidly. Now, as we move further into the year, we will successfully navigate the mortgage and real estate headwinds by protecting our margin and profitability while continuing to invest in strategic areas such as technology, partnerships and performance marketing to grow share and expand our business for the long term," said Jay Farner, Vice Chairman and CEO of Rocket Companies.
What stands out to me is that we know the refi business slows down as rates rise and become less favorable to deals getting done. But the technological sophistication of companies like Rocket allows them to continuously scan for opportunities and efficiencies that help consumers construct suitable deals that still work in the homeowner's favor.
And you can think of The Harvest Plan as the mortgage toolbox that helps you scan for your own opportunities and efficiencies just like the big banks and brokers. I'm a fan because I've seen the platform in action and I think it can help so many people -- like nothing I've ever seen before.
As mortgage rates rise, and both stocks and bonds fall, it's more important than ever to start getting a clearer picture of your finances and all your options. Using The Harvest Plan gives you "mission control" to operate from and make better decisions that impact all your investment horizons, from 3 months to 3 decades.
To learn more about stocks I'm recommending in this turbulent environment, see my recent Bull of the Day profile of Cadence Design Systems CDNS and look for a report I'll publish soon on Marriott International MAR as the travel and tourism sector looks to rebound strongly this year, contributing nearly $2 trillion to US GDP as growth exceeds pre-pandemic levels.
Disclosure: My family owns shares of CME Group CME.
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