INTERVIEW | Make Money by Avoiding Speculation with Mark Matson

0:00When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a $75 sponsor job credit at ND.com slash podcast. That's ND.com slash podcast, terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs. You're listening to the Travis Makes Money Podcast. What's going on everybody? Welcome back to the Travis Makes Money Podcast. For what's the mission to help you make more money today on the show, I'm talking to my new friend Mark Matson. Mark is the best selling author of experiencing the American dream, how to invest your time, energy and money to create an extraordinary life. He's the founder of Matson Money. He's starting with nothing. He built his company to over $11 billion in assets under management, serving investors across the US and Puerto Rico.

1:00An innovator in financial education, he created the American dream experience and the Matson method, making Nobel Prize winning investing science accessible to everyday families. If there's somebody that we could bring on the show that is highly adept at figuring out how to make money and teaching you how to make more money, I think Mark might be the guy. Mark, thanks for joining me on the show today. Great movement to Travis, really. How's your be here? Tell me a little bit about the book right off the bat here, man. Why do this with your time? I know you got a lot of stuff going on. You're not a, I would say your time is in scarcity rather than abundance at the moment. So why write the book? Why now? Well, my dad, actually it's a lifelong mission. My dad really built into me the ideals of the American dream and what it means to creating wealth and prosperity for you and your family. And he taught me that our country, of course, no country is perfect, but our country was the greatest country on the face of the planet. And that if you were born here, you were lucky enough to have the ability to create a business

2:03to be an entrepreneur, to create value for other people. And you had the freedom of speech, the freedom to own property, the freedom to create. And that's a very unique ability. The top, my grandfather grew up, well, I was born in West Virginia and he was, you know, my dad grew up a little shocked by the railroad. And my grandfather believed that, you know, the American dream was really the American nightmare that he believed in entitlement. He believed his life was going to be miserable. He believed he couldn't get himself out of the hollers of the West Virginia. My dad on the other hand said, no, he said, look, we're getting out of the hollers. If you create value for other people, you use the freedoms that you have in this country, work hard, your industrious, you create value. And then so he taught me those, now we didn't grow up rich. We still grew up in the house. I was about 1200 feet square feet. But he still built those values into me as I was growing up when to college and became a financial advisor. And when I got out at the age of 21, what did your dad do?

3:04He was an insurance salesman back in the hills. And well, most kids wanted to play, you know, be football players or, you know, baseball. I wanted to be an insurance guy. So I weird I was as a kid. But then I went to work in the investment industry, being a financial planner. By the time I was in the field from not till 86 to 91, I discovered just how disgusting the industry is. It's a really, there's a lot of speculations, stock picking, market timing, track record investing, all lies. By the way, they don't work. They're academically not proven. And people were losing a lot of money back then. And they're still losing a lot of money today trying those things. Instead, I used academic investing principles that I got from the University of Chicago. People like Dr. Harry Markowitz, Dr. Eugene Phama, Nobel Prize winners. And once I discovered that I had been speculating with my clients money in 1991 at 27, I started my own company. And today we have over 12 billion. It's been a good year so far.

4:06Since that initial $11 billion number came out. Yeah. Can you say more about the, about the, that's all lies portion of this? Like where, where are people getting fed lies that is like decimating their potential in that worth when they were tired? Yeah. So the basic lie is that someone can predict a future and tell you what stocks to pick in advance and tell you when to get out in and out of the market. The reality of it is that all the noble and predictable information about the future is already in the stock price today. The most valuable workflows are often the hardest to document. When they span people, systems, judgment calls, they can stay undocumented, leaving teams, guessing, creating inconsistency and holding AI back. Well, that's exactly the problem that today's sponsor scribe was built to solve. Scribe is a specialized intelligence platform trusted by 94% of the Fortune 500 that captures workflows as work happens and automatically generates step-by-step guides with screenshots and instructions.

5:06So no one has to sit down and write documentation from scratch. Teams can review, edit, and share the guides for onboarding, training, software rollouts, and day-to-day work. Scribe also automatically redacts sensitive info like names, account numbers, emails from screenshots. You know all the stuff you don't want other people saying. And as an admin, you control and enforce that across the whole team. Once a guide is reviewed, anyone can launch real-time on-screen guidance that shows exactly where to click inside the actual tool. So critical processes can get done right every time. And because most AI was trained on the internet, not your company's way of working, scribe helps power your AI agents with real context, giving them a foundation built on how work actually happens. Not just guesses. Learn more at scribe.how slash TNM and mention Travis makes money for your first month of scribe capture free on select plans. That's SCRIBE.how slash TNM.

6:08Most of us picked a bank at 16 and never looked back. Sound familiar? Well, that's where chime comes in. Chime is changing the way that people bank. They're not like traditional old stuffy banks who charge fees and gatekeep perks and rewards. Chime offers the most rewarding fee-free banking all with no overdraft fees, no monthly fees, no minimum balance fees. How else you get 5% cash back on chime card in the category of your choice like gas or groceries, all while building credit through regular, everyday spending with no credit check. And if you're ever in a pinch, spot me, let's you overdraft up to $200 fee-free. So join the millions who are already banking fee-free with America's number one choice for banking head to chime. Dot com slash Travis. That's chime. Dot com slash Travis. Sign up now. It only takes a few minutes. Chime is a fintech, not a bank, banking services and chime card provided by Chimes bank partners, qualifying direct deposits required, terms and limits apply. Go to chime.com slash disclosures for details. Therefore only random or unpredictable information will change the price moving forward into the

7:10future. So these big mutual fund complexes with 15 different mutual funds like fidelity. They have no idea which one of their funds are going to perform over-perform and that's why they need so many of them. By blind random luck, one of the funds is going to overperform the market by 3, 4, 5% a year, given a 3 to 5 year period. And those are the ones they're going to push. Those are the ones people are going to dump money in. And then they're going to be shocked when they lose to the market by 3 to 5% a year after expenses. So it's all a con. Now the reason I know about it is because I participated. I was in my early 20s didn't know any better. But after a very short period of time, I went to my brokerage dealer and I said, we're hurting people here. We're putting people in these mutual funds that have 10 year good track record. But then after we put our clients in, they're reverting to the mean and they're underperforming the market. And the broker dealer was unfazed. All they said would just sell more product and make more commissions. So it's, most people think the only way to make money in the market is to have some kind

8:11of prediction. What stocks are going to be the best ones or when to get in and out of the market. The reality is no one can tell you that with anything like certainty enough that could they wouldn't tell you anyway. Yeah, exactly. They'd keep it to themselves. I think I first realized that man, and this probably was a rudimentary book for you. But I read Tony Robbins Unshakable, which is essentially like the condensed version of his money master the game, which is like a 900 page investing in cycle media from, you know, the top 50 hedge fund managers in the country or something like that. And that's when I realized that a lot of that was BS when I was like, wait, so the guys that are running these like multi-deck a billion dollar funds are the ones that are also saying that nobody can predict the markets and you're better off just putting your money to index fund that's like low fees and that these other, you know, potential financial products. It's like they might promise high returns, but also their fee structure is set up in a way that also completely reverses the effects of compound interest. And you actually end up losing millions of dollars over the long term.

9:14Can you, I guess, how much truth was in that information? How reliable is that? And what are some of the ways that you see these like different fee structures take away money from people's funds? Well, that's a great question. Look, hedge funds claim. Now Tony, Tony's made this mistake, though, in his last book, The Holy Grail of Investing, he says private equity and hedge funds and buy a baseball team and bribe private equity in the area of real estate. Basically the message of that book is if you want to be a billionaire, invests like a billionaire. But for every billionaire, there's tens of thousands of people that went bankrupt trying these strategies. Listen, for just, for example, Travis, the idea of a hedge fund, the idea of a hedge fund and Tony's Holy Grail book, it talks about making 20 to 40% per year rate of return. Well, think about that for a minute. If these people that are running the hedge fund knew how to make 30 to 40% rate of return, they wouldn't sell it to you for two and 20.

10:14What they would do is they go to the bank. They'd borrow money at 5%, they'd make the 30% and then they would pocket the 25%. They wouldn't sell it to you. That's just plain math. Any third grader knows the math. There's cheaper money out there than that. Yeah, there's cheaper money than two and 20. So obviously they would keep all the returns from themselves. They wouldn't share them with you and they wouldn't have to have 15 different hedge funds. Not even the hedge fund managers know which one gets lucky. Kathy Woods is a recent example of this with the ARC fund. For a while, there she got lucky, made huge amounts of money and people tons of money in. She lost 14 billion for her clients when the tech market crashed. And it's a cautionary tale to investors and your right, Travis, you don't need to beat the market. What you need is to know how to use asset allocation. We call it Modern Portfolio Theory created by Dr. Harry Marko, which was within my academic board is now deceased.

11:17But he won the Nobel Prize for for for answering the question, how do you build a portfolio to maximize the rate of return with any given level of volatility to reduce the risk, maximize the return? And what you do is you look at where the cost of capital is. So large company stocks historically, just the S&P, historically of 10% as long you don't try to market time it and stock pick it. Small stocks, 12% that beats destroys most returns any investor will ever get. Small value stocks, 14%. Take this year international large stocks, value stocks, 30% year to date for those while the S&P is only clocking in at nine. So what you have to do is you have to actually study these academic papers. I know they're they're deluminous. Dr. Fama for example has a 900 page book you mentioned Tony's 900 page book, which I read. But you want to read the academics, not the the hucksters or the sales people. Yeah, people who don't have the direct benefit from giving you the advice that they're giving

12:20you. They don't they're they're do it's like a scientist, right? Well, you know, you study gravity and then other scientists have to validate it. And then you have a series of empirical tests to validate it. You don't want to the marketing office at a mutual fund or the marketing department of a broker dealer. You want to use academia and you want to use Nobel Prize winning studies, which are difficult to can be very difficult to understand. You have to have someone usually to translate it for you because they're most most of these books are mostly math and pretty complicated math at that. But how do you don't? Yeah. Sorry. How do you how do you put this into practice? Like what like literally from somebody who's listening and they're going like, yeah, I see these, you know, compound interest calculators all the time and people go, Hey, you were starting with this much and you put in this much and you returns a 10% to now you're worth this much when you retire. Great. But I don't even know what they mean by putting my money in the S&P. What does that mean?

13:21And how do I actually go physically transfer money from my bank account to the S&P every month? Yeah, that's great. So you've got, you know, when I first started the company in 1991, you basically, if you wanted to get a market rate of return for each asset category, you were pretty much stuck with index funds. Today you can use it and keep it simple with the S&P. Yeah. I want 10% of my money in large US stocks. Well, you can get an S&P fund at nine basis points, five basis points. You're very cheap. But then at the same time, you might want small international stocks. And you're either going to use structured market portfolio or you're going to use a ETF that captures that dimension. But you want to make sure that you studied the, you, you, you, well, for example, it travels in 78 different countries and 27,000 different holdings, both in bonds and in stocks. So to construct that really takes some, some study.

14:24For a simple investor, just getting started, maybe 500 a month or whatever, an S&P 500 will do a micro cap index fund will do an international large fund and international small fund. And you have a massive amount of choices today between index funds and ETFs. Many of the ETFs are cheaper. But a cautionary tale there is that just knowing the rules of diversification and rebalance when your portfolio gets out of whack is extremely hard to follow. So for example, in 2008, 2009, the S&P dropped 50%. So value, excuse me, bonds, short term high quality bonds were up about, I don't know, 5, 10% during that period of time. It's extremely hard to make yourself sell the bonds in the portfolio to rebalance and refresh if you have 50, 50 mix, put that portfolio back to 50, 50 because you got to put it in something that just lost 50% of its value. And it's like a workout or exercise, even though people know the rules, they don't follow

15:26them and discipline of rebalancing your portfolio is extremely hard to follow, not just for individual investors, but also for financial, so-called financial experts. Yeah, it's psychologically difficult to overcome taking money out of something that's performing and putting it into something that just lost you 50%. But also, do you know what the data is? If had you made that decision, or if you did not make that decision, it didn't put your money back in the S&P in 2008, how much money you would have missed out on in the last, almost 20 years of growth there. I'd try to say wild number. Well, it's a fantastic question. Here's what normally happens. So let's say just keeping it super simple. Let's say you build a portfolio of 50% S&P, 50% high quality short term fixed income. The market crashes, you lose 50% in the income. It's 2008 and you make maybe 5 or 10% in the bonds.

16:28Then, if you, the most people make the do the opposite, they get afraid, their instincts kick in, they're watching TV, they're watching the internet, they're talking to their friends, everybody saying get out, it's going to get worse, you're going to lose more money if you don't get out. Most people at that time sell the stocks and they buy the fixed more fixed income. They avoid the pain of the loss they just had. They double down on the thing that just felt good. That's disastrous because you would have given up about 900% rate of return because the market over the next decades was tremendous. 9%. The bonds made 20% and the stocks made 900%. So, I mean, it's just, it's tragic. And then to make it worse, Travis, what makes it worse is that when do most people get back in? Well, they get back in only after a huge run up. One it's going well.

17:28Yeah. Yeah. So they locked in their loss, then they stayed in the fixed income or the cash. It goes up 60, maybe it goes up 200%. Now they're like, oh, now I'm ready to get back in. Bam, put it in at 200% now. It drops another 40%. Yeah. So, it's one of the, it's one of the most difficult things to understand. And as human being, it's one of the most you got your instincts, your emotions, and your biases, and then all the noise out there in the, you know, metaverse, that destroys your success. Yeah. So, put your money in the market and leave it there. Let it work. Leave it. And leave it. Don't pull it out and rebalance whatever asset categories you pick. You consistently, and we look, we do it every single day. But if you do it quarterly, the most valuable workflows are often the hardest to document. When they span people, systems, judgment calls, they can stay undocumented, leaving teams, guessing, creating inconsistency and holding AI back.

18:30Well, that's exactly the problem that today's sponsor scribe was built to solve. Sign up is a specialized intelligence platform trusted by 94% of the Fortune 500 that captures workflows as work happens and automatically generates step-by-step guides with screenshots and instructions. So, no one has to sit down and write documentation from scratch. Teams can review, edit, and share the guides for onboarding, training, software rollouts, and day-to-day work. Scribe also automatically redacts sensitive info like names, account numbers, emails from screenshots. You know all the stuff you don't want other people saying. And as an admin, you control and enforce that across the whole team. Once a guide is reviewed, anyone can launch real-time on-screen guidance that shows exactly where to click inside the actual tool so critical processes can get done right every time. And because most AI was trained on the internet, not your company's way of working, scribe helps power your AI agents with real context, giving them a foundation built on how work actually happens.

19:31Not just guesses. To learn more at scribe.how-tnm and mention Travis makes money for your first month of scribe capture free on Select Plans, that's scribe.how-tnm Most of us pick the bank at 16 and never looked back. Sound familiar? Well, that's where chime comes in. Chime is changing the way that people bank. They're not like traditional old stuffy banks who charge fees and gatekeep perks and rewards. Some offers the most rewarding fee-free banking all with no overdraft fees, no monthly fees, no minimum balance fees. Plus, you get 5% cash back on chime card in the category of your choice like gas or groceries, all while building credit through regular everyday spending with no credit check. And if you're ever in a pinch, spot me, let's you overdraft up to $200 fee-free. So join the millions who are already banking fee-free with America's number one choice for banking head to chime.com slash Travis, that's chime.com slash Travis. Sound up now, it only takes a few minutes.

20:34Chime is a fintech, not a bank, banking services and chime card provided by Chime's bank partners, qualifying direct deposits required, terms and limits apply. Go to chime.com slash disclosures for details. It's very difficult to do though. You can even have computer programs that you can get, robo advisors and things like that are supposedly supposed to do it for you. But let's say that you invest a million bucks. And then you see like in being in of 2020, you lose 30% of the piece that's in stock. Well, if it's all in stock, now you just lost $300,000. You're looking at the death clock because it's COVID and there's a death clock every time you turn on the news and everybody's saying it's going to get worse and it's a global pandemic and we don't know when it's going to stop and we didn't know when it was going to stop. And so then what, so what do, what do people do? Well, they don't rebalance. They panic and they sell and they get out and they lock in those losses. And it's, and it's devastating to them.

21:35And their instincts and their, their emotions take over and the mass media is bombarding them 24 seven with whatever the prediction or the forecast is about the future. Now at the end of that year, those stocks were up. There was one quarter. They were up 30, 40%. Yeah. So you just go open a brokerage account anywhere. Can you use, can you use a fund like yours? I assume you have some sort of a minimum for your fund. Well, we try to keep our minimums low because if I have a client with $2 million and they have a grand child or something, you know, with only three, four, five thousand bucks, we want to help them out. So, you know, so we can do that. Plus, we have a class called the American Dream Experience that we teach. Sometimes people have 10 million, 20 million. Sometimes they have 100,000, but we just want to teach people about money, having a purpose for their money, how to eliminate speculating and gambling and how to stay prudent over a lifetime. And those electronic rebalancing algorithms on the internet, the problem with them is there

22:38is always a button right next to it where you can disable it and then switch your money into anything you want. It takes a human being. I know AI is big and it's going to be big. But you need an actual human being that loves and cares about the investor and who will stay strong. Even when the investor wants to panic and hit the wrong button because left to technology itself, the discipline disappears. Yeah, that's true. Yeah, we like to think we have more discipline than we do, but when shit hits the fan, it's really difficult to stay strong there, you know. I like what you said that when the shit hits the fan or when something runs way up, whether it's Bitcoin or gold, commodities, people get enamored. So they end up dumping tons of money into these toxic investment vehicles and then they lose more money than they can imagine. What is your feeling on crypto in general or at least Bitcoin? Yeah, crypto in general is probably one of the most speculative, dangerous things you

23:40can do with your money. And the reason is because there's no there there. So if I buy a stock, I'm buying an ownership of a company. If I buy Apple, I own a piece of the company company does well stock goes up, I make money. There's real assets there. There's intellectual property, there's human capital, there's innovations, there's R&D. If I buy a bond against the company, I have the full assets of that company that back up the bond. I have the income from the company to back up the interest payments. What do you have when you buy Bitcoin? Nothing. You have nothing. There's no company, there's no products, there's no people, there's no innovation. You have a mythological asset that's valued by some people mining it with computer algorithms, but you have no real assets behind it. And I think that's why it's one of the most dangerous things since the tulip ball bust in Holland that destroyed everybody.

24:43Everybody forgets too that in the 95% to 2000 tech stocks made 45% a year and then they lost 75% of all their value overnight. Very few people realize the danger of dumping a lot of their money into one asset category. And I think Bitcoin is one of the most speculative dangerous things that you can possibly do. And that concludes all cryptocurrency. Yeah. And even more so with the remainder of the cryptocurrency. It gets even worse the further down you go. The further you move away from Bitcoin, it gets even worse and worse. Yeah. There's just no there there. There's no real assets and markets in the end people. Oh yeah, but you know Bitcoin made all this money. Well, yeah, you can make a lot of money if you go into casino too. That doesn't mean it's prudent. Yeah. Sure. Tell me a little bit more about the book, Mark. What is like the main practical piece of wisdom or advice that you want to really resonate with somebody who reads that? One of the and it's a very counterintuitive, especially for a guy that and in just $12 billion.

25:49But the reality that I found, and I found this very young helping people manage their money, is that money can't make you happy. I know it's in songs and it's in the Bible and so forth. But the reality is there's nothing inherent in money that actually makes you happy. As a matter of fact, a lot of the people and you don't have to look for evidence very long to find it. People like Elvis Presley, Marilyn Monroe, Howard Hughes, Prince, massive amount of money, massive amount of fame, massive amount of resources. Not only does money not make you happy, money can actually make you extremely miserable and actually become something that's very toxic in your life. So that sounds really weird from a guy that manages a lot of it. So what I do in the class and in the book is I teach people to have a purpose for their life and a purpose for their money that's greater than money itself. So for example, my purpose is to help other people realize their American dream. And based on that purpose and under inside of that is helping families achieve freedom

26:53fulfillment and love. So based on that, then what, how would you want to invest your money? Well you would want to invest your money and you would want to eliminate gambling because gambling doesn't line up with families creating freedom fulfillment and love. Secondly is that you would realize, I'm not saying materialism is terrible, having a nice car, having a nice house, having nice things. I'm not saying that it's a bad thing. I'm just saying that it won't fill you up. It won't make you fulfilled or happy and pursuing that money ends up creating speculation and gambling. Or in other words, money for money, sake. And that never, ever, ever works. If I have a purpose and I have a lot of money, then I can use my money in empowering ways. If I have a purpose and I don't have a lot of money, I could still go to the hospital, get a bus, take a card, hold somebody's hand and create freedom fulfillment and love for them, even if I don't have a lot of money. Yeah. Experiencing the American dream, go pick up a copy of Mark's book.

27:54I know we will not regret that. Mark, I appreciate you spending some of your time with us. I know it is extremely valuable. So I did not take that lightly. So thank you so much for coming on the show. Go check out Mark's book and check out his Instagram at Mark Mattson, M-A-T-S-O-N-1, at Mark Mattson one over on Instagram. Mark, thanks again for joining us. Everybody else listening. Remember, money only solves your money problems. But it is a little bit easier to solve the rest of your problems when you got money in the bank. So let's start there here on the Travis Banks Money Podcast. Thanks to everybody. Catch you next time. Peace out. Most of us picked a bank at 16 and never looked back. Sound familiar? That's where chime comes in. Chime is changing the way that people bank. They are not like traditional old stuffy banks who charge fees and gatekeep perks and rewards. Chime offers the most rewarding fee-free banking all with no overdraft fees, no monthly fees, no minimum balance fees. Plus, you get 5% cash back on Chime Card in the category of your choice like gas or groceries, all while building credit through regular, everyday spending with no credit check.

28:55And if you're ever in a pinch, spot me. Let's you overdraft up to $200. Be free. So join the millions who are already banking fee-free with America's number one choice for banking head to chime.com slash Travis. That's chime.com slash Travis. Sign up now. It only takes a few minutes. Chime is a FinTech, not a bank, banking services and chime card provided by Chime's bank partners, qualifying direct deposits required, terms and limits apply. Go to chime.com slash disclosures for details.