Doug - Joe's Mom's Neighbor (3:10)

Aug is good present.

Joe Saul-Sehy (3:14)

Well, we got a great show because oh gee. Today in a rare two mentor week, we normally have one show per week where we have our mentor of the week. But man, a great appearance on Monday by Charles Duhigg and then one end.

OG (3:28)

Of the week as a mentor, the other end of the week as a mentor. It's like a double ender week. It's great.

Joe Saul-Sehy (3:33)

It is a fantastic week. We've got Lou Frankfurt today, longtime CEO of coach, as Doug so brilliantly explained earlier. And man, if you want a guide to how do you switch careers midstream, a b, go into a thing where you totally feel like a pretender. We've all gone into a place before where we felt like we didn't have whatever it took to succeed in this new area. He went from kids programs in New York City to running one of the premier handbag manufacturers in the United States. And not just manufacturers, but retailers. Right. For me, retailers. So Lou is upstairs talking to mom now and he's going to be coming down shortly. But first we got a couple of sponsors who make sure that we can keep on keeping on and you'll get great people like Lou and like Charles on Monday helping us communicate. You don't pay a dime. So sit back, relax. We're going to hear from them. And then the legendary Lou Frankfurt joins.

OG (4:36)

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Lou Frankfurt (5:11)

Foreign.

Joe Saul-Sehy (5:16)

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Joe Saul-Sehy (6:32)

And I'm so happy. Stackers. We finally have them here with us. Lu Frankfurt's here. How are you, man?

Lou Frankfurt (6:38)

I'm doing well. It's been a good day so far.

Joe Saul-Sehy (6:40)

Well, that is good. We're going to try to make it even better, Lou. We're going to help a lot of stackers make their day better. I want to tell my stackers that you are the only guest. We've been doing this for almost 15 years. The stacky Benjamin Show. You are the only guest who ever asked for a pre interview. I've had pre interviews before, Lou, where I said, you know what? I'm not sure about this guest. Maybe they're not ready for prime time. You have these two pieces, logic and magic, that go together that we're going to talk about today. But it strikes me that having this pre interview is part of the Lou Frankfurt logic and magic. Let's logically get together first so we can make this as good as we can for Stackers. Is that your thinking as a CEO? Like, how does that happen?

Lou Frankfurt (7:28)

Absolutely. Because I'm driven for a drive for excellence and a fear of failure. My immersive curiosity, which is on the magic side, forces me to gain as much knowledge as I can in a situation before I actually need to make a decision or go into it. So preparation, when possible, is always a plus.

Joe Saul-Sehy (7:56)

Lou, that reminds me of Sun Tzu, the Art of War. You know, the best battle is the one you never fight.

Lou Frankfurt (8:02)

Yes, I get it. And I developed a term that I use both at home and in the office. The skirmishes, Battles and wars. And whether you're speaking to employees or you're speaking with your children or your parents or your spouse or anyone you need to be conscious of, if there's a friction, any form of friction, whether it's a child that wants to stay up, who's 10 years old and at school the next day but wants to stay up to see the Monday Night Football game end, whether you're going to allow an exception or not. And understanding that a skirmish unexpectedly can turn into a battle or war. So with employees, you try also to understand who they are and what motivates them and. And how do you get the best outcome that you want to achieve. I counsel my kids with their kids, my CEOs with their teams and myself. I try to be real conscious if I'm feeling tense in the conversation or it's not going well. Why am I feeling this way? And how do I want to change things so that I can not feel this way and get an outcome that's for the greater good?

Joe Saul-Sehy (9:23)

That's interesting. We're talking to Charles Duhigg this month as well about super communicators and how they're always in the discussion and feeling. Why am I feeling the way I am? Why is this thing coming out? What is this emotion that maybe I didn't expect? I find that interesting. I also find interesting, though, Lou, this idea, this shared language that you and everyone at coach had that you develop, which was magic and logic. And you said in your book that when you talked about magic and logic, like everybody Coach got it. But it was truly in the art of bagman, right, that you kind of put it together and more codified it. But can you describe this language for me? What does magic and logic really mean?

Lou Frankfurt (10:08)

Okay, some people refer to magic as art and logic as science. When I think of magic, I think of the qualities that come from within, not things that you do outside. So you need to have belief in possibilities. That's magic. You need to have a North Star. If you don't have a vision for what can be or how a vacation can occur or how you can build a brand or save the money that you need for the down payment, you're never going to get there. Or if you're going to get there, it's going to be lucky. So you need to have a vision for what can be, and then you need to have belief that you can get there. Those are two aspects of magic, and part of it is imagination. That's another piece. Instinct is also another factor. And curiosity is magic. It's not logical. So people often stop when they get the answer to the question, as opposed to listening to the answer. That leads to many more questions. So I coined that immersive curiosity. On the logic side, data analysis is critical consumer insights where you use data and factoids, applied research or actual experience in the marketplace to understand the situation. That's logical. Extreme collaboration is not something that comes naturally to us as Americans and most people culturally, anywhere in the world. We grow up, we're competitive with each other, we go to school, we go to work, we look at our. We benchmark ourselves against our friends, against peers, against others. And in a high performing culture, you need a high performing team. And to have a high performing team, you need to create processes and accountabilities that require extreme collaboration. One of them, as an example, is transparency. Let everyone know everything and have a consistent way of looking at things. So collaboration is a second one, a third one, which is logic, is a greater good mindset. Very frequently we think about our own silo or what concerns us and not the overall community. And part of being transparent and being collaborative enables you to create a mindset among all of the players, down to an entry level worker to understand what the mission is, what our purpose is, what success looks like. And you need to apply that consistently. And what I often say is there's magic in logic and there's logic in magic. Another logic piece is adaptability. You need to adapt, you need to adapt to changing situations. Adaptability is critical. On the magic side, there's a cousin to that, and that's lateral thinking, which means you go down the path and it seems to be okay, but it may not be exactly what you want. Rather than continue down that path, you need to pause mentally and ask yourself, is there another route I could take? Whether that's a business plan, a relationship that you're looking to develop or repair, and not just be stuck. So you need to really look at things in a 360 view.

Joe Saul-Sehy (14:10)

It's interesting how much this applies not just to the boardroom or the corporate environment, but, but even in your family and just your own career. I'd like to ask you about a few, the touch points that you go through, through your career, to ask you specifically about some of the magic and logic points. And the one, the one that I really want to start with is early career and your leap, which is to me, this is immersive curiosity, the magic piece, and adaptability, which is logic. So you went from running this child development programs for New York City to the world of handbags, which I don't know if you know this, Lou. That's not exactly a straight line. I don't know if you know that.

Joe Saul-Sehy (14:59)

So how do you go into this new world with a bunch of industry insiders, right? A bunch of people that already know the industry, they know the lay of the land. You don't know any of that and begin to truly make your mark.

Lou Frankfurt (15:16)

That's a great question. In my case, and I believe others who make a major shift, you need to have immersive curiosity. So you need to pause and try to understand what problems you're trying to solve. And who are the key audiences. So in the case of Coach, specifically, I was very mindful from my 10 years in government that I was at service to children and families in need, lower income families. And it was my job to make sure that the children got the type of daycare services and families got the type of support they needed. So I was in service, and I felt purposeful about that. When I went to Coach, not knowing anything about fashion or bags, I decided I would start with the customer. And that was before the term consumer centricity was developed, Before I joined coach, and this was key in my decision to go there. I pretended to be a business reporter, freelance, and I was doing an article on coach, and I went in and I spoke to buyers and merchants. And what I learned was it was a small regional business. The product was always sold out. Great product, sturdy on natural leather, functional, good price point. And the last person I went to was the owner of a specialty store on the west side of Manhattan who had one bag in stock below the shelf. And she showed it to me and said, it's reserved for someone else. And I said, tell me about coach. And she said, it has a cult following. And being a product of the 60s, the idea that you can have a product that can be so beloved that people who own it feel part of a community intrigued me. And with that morsel of knowledge, I decided my purpose would be to build upon this incredible popular brand that was beloved in the northeastern part of the country. Only $6 million in sales. We sold to anyone who paid their bills. And I decided I would dig deeply and learn about how a consumer makes a handbag purchase. How did she decide upon Coach? How does she decide on a competitor? What does she like about Coach? What doesn't she like? What's her future purchase intent? I secondly went to look at competitive brands around the world. And the brand that I admired the most in 1979 was a small French brand called Louis Vuitton. They had about 20 stores around the world based in France, and they controlled their destiny because they only sold through their own stores. And I thought to myself, if we could sell directly to consumers, we could do a better job messaging. We would be better listeners because we would have their information. And my first assignment, with the support of the founder, was a catalog business. So I started a catalog that was 20 years before the Internet, and I was a direct consumer. A year later, we made a much bigger leap at my initiative, and we opened the first coach store in 1981 on Madison Avenue and 65th Street.

Joe Saul-Sehy (18:57)

Everybody wasn't on board with the first store, though, Lou.

Lou Frankfurt (19:00)

That's true. I was actually asked by a colleague if I can get my job back in city government. And I knew why he was asking me. He ran the wholesale business, and I said, why? And he said, well, when the store's not successful and Bloomingdale's drops us because we're down the street from Bloomingdale's, the founder is going to be fickle, and he's going to say he doesn't want to sell direct. And he was not right the first year. We actually knocked it out of the park. At the time, we did over $1 million in 450 square feet. It would be equivalent to $4 million today. But he had lines down the street. And I knew that it was a beloved brand and that if we could control the environment, the service components, and innovate product, that consumers wanted that from us, that we did not offer that we would be able to grow the business.

Joe Saul-Sehy (19:58)

Was it just the brand the way that it was, and there was a thirst for it that people weren't getting, or was there something you were doing with that 400 square feet that helped create some of that magic?

Lou Frankfurt (20:09)

Yes, that's another great question. What we decided we would do was to design a store like a closed section of a library. So I went to Columbia University and took pictures of one of the libraries. That was the closed shelves, wooden shelves, all the books. You saw the bound edge of the book and the modification we made. So we stacked bags side by side and one bag facing out. So that's the logic side. It's organizing principle for efficiency. One of the magic things we did, because people loved the notion that our bags were natural leather and developed a patina, was that we imbued the store with leather. So when you entered the store from a tactile perspective, you smelled and wonderful smell, great smell, natural leather. So you're going across the portal. You're coming into a store on one side of library shelves stacked with bags that look like books, except for the facing, and there's a great smell. Third was we brought in team members, and I spent probably a third of my time in the first year in the store to focus on treating customers as if they're guests in our home, giving them the benefit of the doubt, believing that 99% of people are honest, and they are. And we built a very strong relationship. Fourth is a blend of magic and logic, which has to do with merchandising and storytelling. So we were able to show A much broader world of coach that people could walk into. And it was immersion. So they would walk in and there would be coach everywhere. And we would have photographs back then of the people at the sewing machines. It would be a microcosm of America. White, black, blue, tall, short, young men, women. And because we are a country of immigrants and we were providing a product largely to the middle classes, the growing middle class that wanted branded bags and that's women much more than men. Women really value brands, especially handbags. Enormous loyalty to the handful of brands that they might own.

Joe Saul-Sehy (22:33)

It strikes me a couple things. You know, you hear one CEO talk about something and it might be their shtick or their thing or how they're different. You hear multiple CEOs, multiple successful companies talk about things and then I think you start getting into some truth. And to them that I heard you talk about, Lou, one was, I remember a story that Walt Disney back in the early days of Disneyland would disguise himself and would stand in line for a ride and would go, so what do you think about this place? How do you like this? So you disguising yourself ahead of time as a reporter. I think it's just brilliant intel. And the more you know, the more you know there. And that it also strikes me treating people with the benefit of the doubt that most people are not going to steal from you. Reminds me of a story about Nordstrom versus Macy's way back in the day. Where of course in any high end mall you'd have Nordstrom at one end, you've Macy's at the other. Macy's I believe off the top of my head. And you may already know this story, Lou spent maybe five times the amount of money on security that Nordstrom spent. Nordstrom treated people like they weren't going to steal from them. Macy's treated people like they were going to steal from them. And you already know which of those two companies had more theft. Macy's by far had people steal more from them than Nordstrom did.

Lou Frankfurt (23:54)

And that's true and I do know that not the exact numbers, but Nordstrom is actually has done much better and has avoided the bankruptcy. Completely avoided them because they were also innovative. They went into E commerce earlier. They decided they were going to develop their own off price channel, Nordstrom's rack to dispose of excess inventory. They were smart and they were innovative.

Joe Saul-Sehy (24:21)

So much of this is about the idea, your magic idea of bold innovation. I want to go to another part of your history. This is a 2000 sales have kind of hit a wall, right? You've done a lot of what you can do with the resources that you have. You decide it's time that you really need to go public. How do you begin to imagine this future that doesn't now exist? Because this feels to me also, you know, for a stacker that doesn't run a company and they're not going public, but they might be looking at the next promotion, the next raise, this future that's coming up. How are you able to push through that wall and take this private company public in 2000?

Lou Frankfurt (25:02)

Well, my journey, like everyone's, is an individual journey. We were part of the Sara lee Corporation from 1985 to the year 2000. Sara Lee purchased Coach from its founder with my active involvement working with a boutique banker when we were $25 million in sales. And what intrigued this $20 billion holding company was that we were what I called at the time a multi channel business. Today they're called Omnichannel. There was no brand in their portfolio that sold to consumers in catalog, their own stores and wholesale. And somehow this small brand was able to do this. And they thought that not only would Coach grow, but it would be a model for other much larger businesses within the sportswear, activewear brands like Hanes and Playtex and Champion and the other brands that were sold within the Sara Lee personal products company. And Coach grew rapidly. And I learned a great deal during my time with Sara Lee, particularly in the first year or two, because as a public company, we had to develop plans, there were metrics, we had to do monthly budget presentations, zero based. So I learned financial disciplines early and that was very helpful. I also learned how to do sophisticated marketing for the packaged goods brands that they had, which are more commodity brands. And I of course interpreted that for discretionary brands where you don't run out of the product and you want to replace it. So I learned a lot. And along the way, they asked me to become a group officer. And I was in line, one of two people to potentially succeed the CEO of this $20 billion company. I was a group officer. I had Coach always in my portfolio, but I was responsible also for, let's call it three or four billion dollars businesses. When Coach was 500 million, I didn't really like being a group officer, particularly in a conglomerate where the goal was to make plan, not go to a North star. And the culture was different than the culture I built at Coach. And even though I had direct reports, they were CEOs of businesses and they may have been there for 20 and 30 years. And they felt it was discretionary to follow my advice if they were meeting their plans. And in that environment, it largely was, I wasn't being particularly successful. I decided I would migrate back to Coach, and along the time of my migration, I received an opportunity from Burberry to be CEO of Burberry in London. And Sara Lee gained wind of that and met with me. And I explained to them, which I felt strongly, which did not surprise them. The Coach at this point could not thrive and be its best within the rules and guidelines of a major holding company around compensation, around marketing strategies, that we needed to blend magic much more strongly in our formula and recruit people such as chief creative officers, which was not an approved position within any Sarah Lee Corporation. And the net of it was that I made a deal with Sara Lee that I would stay a Coach, and if they could get $1 billion for coach, they would give us our freedom. What they said at the time, which was of course complimentary to me, was that they did not see Coach without Lou Frankfurt because there was no real connectivity above me and the rest of the company. We were like an alien species. We had our own culture. We were motivated to blow out Plan. Plan didn't have anything to do with it. It had to do with north stars and. And new mountains to climb. And fortunately, they kept their word and we were liberated in the fall of the year 2000.

Joe Saul-Sehy (29:51)

I want to unpack all of what you just said because I think this is so important for people. I felt like a hundred percent, Louis, that your move back to migrate toward Coach had nothing to do with money. It didn't have anything to do with career ladder. It felt like to me, it had 100% to do with happiness.

Lou Frankfurt (30:13)

Correct. And purpose.

Joe Saul-Sehy (30:15)

And purpose, yes.

Lou Frankfurt (30:16)

Because I was no longer fulfilled. And even though I might have still spent 25 or 30% of my time on coach, I dreaded the other 75 and 80% and learned that I wasn't equipped to lead CEOs in a conglomerate where making plan was the North Star. So I wanted to work with purpose, where I felt I was needed and wanted. And I was prepared. They did not cut my compensation, but I was prepared for them to cut it dramatically. I also had an experience where I recruited someone who was required more money than I was making at a lower level, and they couldn't understand how that would be acceptable to me, that I could hire someone making more than me, and that person was a creative officer whose salary history demanded it. So for me, it was only natural. And I did things like that in city government, where I brought people in as consultants because they couldn't live on my salary and I could pay them more as consultants because of their skill sets I needed.

Joe Saul-Sehy (31:35)

It always blows me away when you've got these managers that want to keep people, quote, below them. Yet I've always found that managers that spend all of their time lifting their people up and spending, serving their people, those are the people that never leave. I mean, if you help them leave the organization by building their resume, giving them exciting things to do, they stay longer than the boss who's like, no, no, no, Lou, you can't leave. You know, NDAs and shackles and all this Rhett Race stuff drives me absolutely crazy. I want to end because, you know, this move toward purpose. I want to talk about that greater good mindset before we say goodbye because I think your public service background. It was funny that Mayor Ed Koch said to you that he wasn't going to give you a promotion because you were too principled. Is that true?

Lou Frankfurt (32:24)

Well, that's what he said to me. I actually repeated it publicly, and he and I had a conversation afterwards. We remained friendly until his passing. He denied that he ever said it, and I understood his denial, but that was a catalyst for me because I'm such a big believer in meritocracy. Again, when you serve people, you need to serve the greater good, not a particular interest.

Joe Saul-Sehy (32:53)

It strikes me, though, that to serve the greater good and to have this North Star that you're serving really begins with you have to be able to serve yourself. And this is what I really appreciated and I thought was brave about Bagman, was you diving into some of the dark periods and depression while leaving. How are you able to negotiate those periods? Is it looking at what the North Star is? Is it taking time off? What's the key? Because this happens, I think, in everybody's careers.

Lou Frankfurt (33:23)

It's probably one of the things that differentiates my memoir, I'm told, from most other successful corporate leaders is that I share with people both on my low and high points. And what I want to really convey to Gen Z and Millennials, life is not a bowl of cherries. No matter where you are, everyone at some point fears failure. Most people at some point feel that they're imposters. One of the things I encourage my team and I started to practice 40 years ago, was listening to my body. If I was waking up with body aches or I was feeling sluggish, or Monday morning came and I wanted to stay under the covers, I forced myself, why do you feel this way and what do you want to do about this? And I developed a host bevy of techniques to both stop my declines and one is pattern recognition to try to avoid getting into situations where you're going to go down a well. And once you recognize if that's the case, you got to get out of it or change this.

Joe Saul-Sehy (34:36)

This is another battle never fought situation.

Lou Frankfurt (34:39)

Exactly. I believe very strongly in exercise in which I practice. I do believe in meditation and naps. And I, I define two types of naps. One is a. A power nap, which is similar to meditation in that it gives your mind, Even if it's five minutes, an ability to reset, you're fatigued, it's 4 o', clock, it's 2 o', clock, whatever time it might be, you got five hours to go, or you need to be at your best. If you can slow your breathing with meditation or without and have a power nap, that's great. I also believe in longer naps, refueling naps. That's a nap under the covers, lights out, and you're going to go through a whole series of different rhythmia while you're asleep. I also believe in coaching and therapy. I also believe under certain conditions, in medication, acupuncture. I also believe that if all of that doesn't work or isn't working, you really need to get out of that situation and also try to avoid them in the future. You need to listen to your body is what I tell people. And when I see CEOs or senior members of teams where I'm active on the board mentoring, and I see someone looking flat where, you know their energy's normally higher, when there's a break in the meeting or after the meeting, I take someone out and I sit with them and I say, what's going on? Besides empathic, I try to be helpful. And mental health is an important component and responsibility of employers to get the best out of their employees and also to create a culture where you're looking at the entire mind, body and spirit of your employees.

Joe Saul-Sehy (36:41)

How do you think, even in something like what Coach is doing, how do you think AI is going to change the game for a company like Coach, which ostensibly is not in the AI game at all, but I got to imagine you've thought this through a thousand times.

Lou Frankfurt (36:55)

The short answer is, from a process perspective, the tools that AI provides can enable you to do repetitive work at a much lower cost than employees and in some instances better than employees. But for Coach, we sell products one at a time, whether it's Online, in a store, or through other channels. We're agnostic to where consumers shop. It's not going to change the equation for us.

Joe Saul-Sehy (37:33)

It's so important. It's still customer first. It still is Northstar customer first.

Lou Frankfurt (37:38)

And it's about the customer journey. If any of your listeners, and there are many, many who are in various different positions, I encourage people in whatever area they are, if they're providing a service or a product at any level, you need to think of the customer journey. Where was the customer before, where is she today, and where is she traveling? And you need to be there when she gets there three years from now. So you can't be complacent even if your numbers are great and business is roaring and not look ahead because there are societal shifts, shifts in value, shifts in customer preferences. So it's not only product innovation, it's also innovation in the ways in which you reach consumers. And trying to be a little bit ahead of that.

Joe Saul-Sehy (38:34)

Lou, that sounds like magic and logic crazy talk. The book is Bagman the Story behind the Improbable Rise of Coach. I also think of it as the rise of Lou Frankfurt as well. Thank you so much, Lou, for mentoring our stackers today. I've loved the time. It's been fantastic learning from you. I appreciate it so much.

Lou Frankfurt (38:55)

I appreciate you and I will say that you have a very interesting method of inquiry because you get to the essence of things pretty quickly. So more stimulating than most interviews for me, I might add.

Doug - Joe's Mom's Neighbor (39:15)

Hey there, stackers. I'm Joe's mom's neighbor to Doug. And let's move from designer handbags to straight up designers because I'm here to share a big birthday with you. Born on Today's Date In 1942, this iconic designer became even more famous when in the movie Back to the Future, Michael J. Fox's mother, played by Leah Thompson.

Doug - Joe's Mom's Neighbor (39:38)

It was. I mean, dude, can we just pause for a minute? No, you are Thompson in Back to the Future.

Joe Saul-Sehy (39:44)

Why do you even have to ask if we could pause when you just totally did?

Doug - Joe's Mom's Neighbor (39:47)

Oh, yeah. Was a major part of my adolescence. Anyways, she thought it was Marty McFly's first name because this designer's moniker appeared on the waistband of his underwear. Which Benjamin Stacking designer is it? If you haven't guessed yet, I'll share. Right after I go check to see how much a DeLorean would cost. I'm sure Joe and OG can afford it, right?

Joe Saul-Sehy (40:15)

Hey, folks, let me tell you that drinking and driving is a decision that will change your whole world. Things will never be the same once you get a DUI because legal fees and time in court are just the beginning. Getting into a crash is another way your world could be irreversibly changed. After drinking and driving. Your vehicle may not be the only thing that gets damaged in that crash. You could face a life altering injury or even death, but you're not the only one who could face those consequences. Your decision to drink and drive could permanently change someone else's world, whether you injure them or leave their loved ones grieving. The next time you're out drinking, call a ride, share a taxi, a sober friend, or a designated sober driver. Always plan for a safe ride home. The only decision that will change your world for the better is the decision to call for a certain sober ride. It's never worth it to drive drunk. Don't risk it. Drive sober or get pulled over Paid for by NHTSA Stackers I'm super excited about this spot because my day has completely changed. In fact, my week has completely changed because first thing in the Morning I've taken AG1 just starting in the last few months. And it's funny, well, I don't really notice it during the day. At the end of the day I was more productive, I was more focused. I haven't gotten the sleepies. I don't get sleepies every day, but on some days I do and I haven't had those same things. I feel like my conversations have been crisper. I feel like I'm more focused on the right things to do. And after a while I suddenly realized that this is because of AG1. That's the only thing that's changed. So what is AG1? It's the daily health drink that combines your multivitamin, pre and probiotics, superfoods and antioxidants into one simple green scoop. It's one of the easiest things you could do to support your body every day. You just take it first thing in the morning on an empty stomach. And man, my days are just about 5 to 10% better every day. This time of year, it's more important than ever to be proactive about supporting your immune health. If you're traveling over the holidays or you have kids that are going to be rolling back home after time in school, you want to spend time with them, the large family gatherings, whatever is up this year, you want to be focused and in it. As we approach the new year, it's never too early to take control of your health. AG1's one of the easiest daily health habits that you can start even before the new year. And if you use our link because you're a stacker, you'll get the newest formula and best price available for AG1 next gen. Right now I love using AG1. I think you will too. And now AG1 has their best offer ever. If you go to drinkag1.comsb you'll get the welcome kit, a morning person hat, a bottle of vitamin D3 plus K2, an AG1 flavor sampler, and you'll get to try their new sleep supplement AGZ for free, which has been a game changer for my nightly routine. That's drinkag1.comSB for $126 value in free gifts for new subscribers. Well, this year Stacker give a gift that goes far beyond the moment and invest 529 account. Whether it's a child, grandchild or someone just starting out, you're helping them save for education that could open doors for a lifetime. Invest 529 is a tax advantage way to save for college, trade school, or even apprenticeship programs. It's flexible, easy to start, and you can contribute any amount, big or small. And because the money can grow tax free, it's a gift that really builds value over time. So instead of giving something that gets used up or set aside, give the gift that can change a Life. Start an Invest 529 account today. Go to invest529.com to learn more and to get started. Investments involve risk, but results vary. Consult with your financial and tax professionals administered by Commonwealth Savers Plan.

Doug - Joe's Mom's Neighbor (44:41)

Hey there stackers. I'm DeLorean lover and guy who OG calls McFly. Hello, Joe's mom's neighbor, Doug. Newsflash, Joe just shared that a DeLorean would be just a bit outside of our basement budget slightly. But if we had one Benjamin Stacker's budget, we might be able to afford a few. This designer, born in 1942, goes by the name Leah Thompson, called Michael J. Fox in the the movie Back to the Future. What name was it? Of course, Thompson thought Fox was Calvin because Calvin Klein's name appeared on Marty McFly's underwear. And now back to Two Guys who Never wear underwear. Come on, ask me how I know Joe and Og.

Joe Saul-Sehy (45:28)

I don't even want to go there.

Doug - Joe's Mom's Neighbor (45:30)

Stop bending over to pick up paper.

OG (45:31)

Clips, but do wear kilts. Nope.

Joe Saul-Sehy (45:35)

For people that didn't know anything about Coach, I think you figured out very quickly, guys, that Lou Frankfurt wasn't your gym coach. Might be a little bit slightly different coach. And by the way not the reason.

Doug - Joe's Mom's Neighbor (45:48)

Did you have him on just so you could set that joke up?

Joe Saul-Sehy (45:51)

Probably. Probably, like, oh, this will be great. Hey, Lou, you want to come on the show? Because I got this one lighter. It is like a 4 on a scale of 1 to 10 that I really want to lay on our stackers. You know what? Not only did he just make Coach explode, but he also, I mean, that success gave way to all these counterfeit bags. Have you ever been in the streets of New York City where they set that carpet up that they can quickly, when they see the cops coming, they can quickly take it down? You can get coach, you can get Rolex.

Doug - Joe's Mom's Neighbor (46:25)

Let me ask you, Doug, have you ever been to Guadalajara?

Doug - Joe's Mom's Neighbor (46:30)

Well, I have.

Joe Saul-Sehy (46:31)

Would you like to go pick up some Coach bags? Wink, wink. Yes. From our, from our manufacturing facility. But that seriously, is big business. How many people do you know? Like, I know so many people over the years that have had bags that said coach on the side that probably weren't coach bags.

Doug - Joe's Mom's Neighbor (46:50)

No, not if they were your friends.

Joe Saul-Sehy (46:54)

I don't know. Let's do a headline.

OG (46:56)

Hello, darlings. And now it's time for your favorite part of the show, our stacking Benjamin's Headlines.

Joe Saul-Sehy (47:02)

Our headline today comes to us from Kiplinger. And this is an important piece because what they're suggesting here, OG is that there truly is one year of your retirement. Well, as you're planning for retirement, as you're saving up money, you're dreaming about the future, or you're at the day and it's time to go, there is one year in retirement that you should think about. And Jacob Schroeder wrote, it is the first year of retirement. Just think about that one year more than any other year. He writes, While the first year retirement generally features fewer keg parties, football tailgates, and all nighters, how do they know what my retirement vision is? I got all the above in mind. It shares one unique similarity with college. It's a new beginning for thousands of new retirees every day. It's a time to spread their wings and discover or rediscover their sense of self. And like college, if you take too much advantage of that freedom and neglect your responsibilities, it can hurt the whole experience. So here, here's what Jacob's setting up, OG you know they talk about the freshman 15, right? Because you're, you're not working out anymore. You're eating a bunch, you're partying your first year retirement. You no longer have the job. You're spending money in a different way. You're living your best life. He says that if you don't have a financial plan and kind of lock it down a little bit so you get used to having that budget every single month, that you could really kill your entire retirement by not paying enough attention in year one.

OG (48:36)

I think that generally speaking, anybody who has gotten to a place of financial independence and is not forced into it, meaning they have chosen when they want to retire or be done with work or make work optional, I think most of those folks have done so through discipline and structure and accountability and doing the right thing, even when it didn't want to be the right thing. Some people got there with luck, hit a hit a great investment, got a great buyout, you know, whatever, and that's a different scenario. But I think that the people who did it, let's say the normal way, if I could say it that way, do not all of a sudden turn into these wild party animals who spend like there's no tomorrow. I've never seen this happen.

Joe Saul-Sehy (49:28)

I don't think that's the point at all.

OG (49:29)

Never seen it happen where somebody gets to retirement successfully and then bombs the first year because they didn't think about it.

Doug - Joe's Mom's Neighbor (49:37)

I. I don't.

OG (49:37)

I don't.

Joe Saul-Sehy (49:38)

58 of Americans. This is a real issue, number one. It is a real issue, I think, because, number one, 58 of Americans in that case are calling it quits earlier than they expected. 58.

OG (49:49)

So I said the people who got there on a normal path, so more.

Joe Saul-Sehy (49:53)

Than half of our audience can expect that they're going to have a surprise retirement that's a different year, a different time than they thought that they were going to retire. So that's an issue, number one. Number two is, well, it's not partying. Partying is the college analogy. The actual story that I skipped for brevity, but I'll go ahead and dive into it, is that this woman who retired with a large pension after 30 years at a major corporation within six months, she traveled extensively. People dream about travel. So she travels. She goes first class. Traveling, gives her adult children money, considering a second home, all without a financial plan. A surprise tax bill soon follows, and the risk of dropping out of retirement all of a sudden becomes real. It wasn't real at all. She had a plan going one way. All of a sudden, her plan's going a different way because she had this huge tax bill that she totally didn't expect was going to be coming her way.

Joe Saul-Sehy (50:51)

So it isn't about partying as much as it's about Paying attention to the little things to set the tone for this whole new phase of your life.

OG (51:02)

I don't know. I mean, again, I would say that the people who have retirement thrust upon them have a greater likelihood of mucking it up, but I don't know that they have a greater likelihood of screwing it up because they didn't plan for it or they didn't think about this first year. It's just they didn't expect that first year to happen. So I just have a hard time with this as an argument of, well, we need to think about the first year of retirement. It's like, all right, cool. I expect that to be in five years. No, it's tomorrow. It's like, okay, well, yeah, I'm going to screw it up. I haven't thought about it yet. And maybe that's what they're saying here, maybe that's what the article is eventually saying here, is that you have to be a little bit more intentional when you do get to that spot of whether you retire on your terms or on somebody else's terms. Maybe the best thing is to be the lottery winner and say, okay, for the first six months, I'm not going to do anything. I'm going to just kind of hit pause and get my lifestyle, see what's going on, and then make the big purchase or the, the big trip or whatever.

Joe Saul-Sehy (52:03)

Different than college. Retirement, of course, isn't a four year stint, Jacob writes. It could span over a third of your life. And while every year matters, experts say the first year may stand apart. It can trigger mistakes that snowball set the stage for a fulfilling second act. Quote the first year of retirement is one of the most defining periods in a person's financial life, says Renee Collins, founder of Ready Retire Ready, Inc. It's not just about leaving the workforce. It's about your new identity, your new routine, and your new relationship with money. That's going to be different because you're living on a fixed income now. So setting the tone, that first year for 30 years is going to be a really important year to focus on.

OG (52:42)

Well, I hope it's not a fixed income, but, you know, you're probably not saving any more money. I think that a lot of people have a big bucket list and say, when I finally can.

OG (52:56)

Then I will finally whatever that is. And sometimes it's things like, and I witnessed this in my own household, not more of an extended family. Somebody I knew retired in our kind of extended family. The wife was like, oh, I got to buy him a motorcycle. And I'm like, what are you talking about? Buy him a motorcycle. Like, for what? And this person hadn't written in forever. I was just like, yeah, here's this retirement gift for you. And now it sits in the garage. You know, it was used like 10 times because somewhere along the line this person had said like, oh, I have this, I have this vision of what this looks like.

Joe Saul-Sehy (53:37)

Well, to your point, OG this period is often referred to as the go go years. Jacob writes, when retirees are the most likely to spend money on things like travel, recreation and bucket list experiences. So it is the time when people might tip too far even with a good financial plan, because it's the go go years. They will go go, maybe too much. According to a 2024 consumer expenditure survey, the average annual spending for adults 65 to 74 is 65,149. Listen to this. Ten years later, by age 75, it drops nearly 20% to 53,000. So another reason why that first year when you got all those bucket list items that you're talking about, the bucket list tips too far one way.

OG (54:21)

Well, and I would take this a step further and say, let's assume for a second that you're one of the people that are saving and you're investing and you know, you're doing the thing that you think is right and maybe you don't have a lot of concern over, you know, getting forced out early. The thing that I find most exciting about working with people kind of in that 10 year period right before, as we get closer to retirement, especially people that have been successful, is they only know one thing, right? Live within your means and save and invest as much as you can. But there comes a point in time where you're on track for your goal or maybe you're even overfunding it, right? And it sounds really weird to say like you have too much money for this particular thing, but you could clearly do that for any other goal, right? You could say, you know, hey, I've got a kid just born. What's the most I could put in a 529? Well, the answer is like $80,000, you know, day one. I think most people would do the math on that and go, that's probably too much. You know, 18 years of $80,000 is going to double a whole bunch. I mean, unless your kid's going to be a doctor, which might happen, you know, your normal state's public school, you know, whatever, that's probably too much. And we would say, hey, you've got too Much money in your 529? Well, believe it or not, you can actually have too much money allocated in your long term retirement bucket and foregoing things today. And I find it really exciting and interesting to work with people on this because once we have confidence around, I'm on track for my goal, I'm on track for this thing. And now let's stress test it. What happens if I get laid off early and all that sort of stuff? Let's say that you're still good. Well, what can we do now? Well, we can pull forward some of those bucket list items into today's cash flow where you have extra resources, where you have extra time to make up for. Like we planned this Europe trip, but the dollar did this thing and now it's like actually 30% more than we thought it was going to be when we booked it a year and a half ago. But I don't want to cancel it because I'll just kind of eat it and we'll make it work one way or the other. You have a lot more flexibility, a lot more margin of safety in your plan 10 years before. Plus when is it more fun to go to Europe? I don't know, I've never been. Is it more fun to go when you're like 50 or is it more fun to go when you're like 71? Like I'm gonna guess 50. You know, generally speaking, maybe you're a little bit healthier and you know, whatever. So the, I think the solution to this isn't always to be hyper vigilant over that first year of retirement, although that's probably the case. But if you also can expand that bucket list into the five or eight years before retirement and the five or eight years after retirement, you're spreading out that, you know, that spend, you know you're not going to spend. Like your example, this woman, gifting all the money away and doing the magic trip and being first class for six straight months. They have experiences like that. Disney has that experience, the Four Seasons has that experience. It's like the everything included, like go see the world package because you haven't done for your entire lifetime and you're running out of tomorrows. Give us $400,000 and we'll hit all the highlights in one trip and you're good.

Joe Saul-Sehy (57:26)

I'm glad you brought this up. We'll link to another show we did on this very topic. Benjamin Brandt talks about half the success of retirement is not just visioning what you're going to do because you could be hugely Disappointed. If you wait till retirement to do the thing and instead treat your life like a science experiment. And even when you're in your 30s and 40s and 50s, do these things you think you're going to want to do in your 60s and 70s, try them out so that you see if it's actually a say.

OG (57:53)

Like, I can't wait to retire so I can move to the mountains. Like, okay, cool. What do you like about the mountains? Oh, I like the change of weather, or I like to snow ski, or I like to cross country ski, or I like, you know, the altitude's better for my, you know, skin or whatever. It's like, what are you doing right now? Go take a week vacation in the thing that you want to do. Go do that, because you might find out that that sucks.

Joe Saul-Sehy (58:16)

Yeah.

OG (58:17)

Or it's not as great as you thought, or the price is too high. Or guess what? You suck at skiing. That's what Doug would tell me. Like, you go way too slow, OG.

Doug - Joe's Mom's Neighbor (58:27)

Sucks to suck.

Joe Saul-Sehy (58:27)

Well, you're enjoying it, og. I mean, you're enjoying that Doug is not getting his money's worth. You're using the whole slope. That's right. Taking your time.

OG (58:34)

Doug does get his money's worth. Honestly, more than I anticipated. I knew that skiing with him would be a little different experience. He was quite the mother hen at different times. But, you know, it was okay. I know it's because he cares for me and wants to, you know, make sure I'm safe.

Joe Saul-Sehy (58:49)

Well, before we get into an I love you, man moment, let's continue with this discussion because Jacob continues. Oh, gee. Where you began this piece. And really the bigger fear for people that listen to a show like ours, the vast majority of our audience, is this is the opposite risk. Scaling back too far in that first year and living in preservation mode, which could mean missing out on goals and experiences you could otherwise afford to enjoy if you don't have a well defined plan. You're just paranoid that I'm gonna all of a sudden have that college party, which you would, to your point, would never have in a million years because you're not gonna change overnight. You all of a sudden go into preservation. I have a good friend who did the financial independence, retire early, retired before he was 50. He's totally already in preservation mode. He drives me crazy. He could spend far more money than he spends. His spouse says that he could. They could spend a lot more money. And he is just completely in it drives me crazy. No, I can't afford to do that. I can't afford to live. I can't afford to do anything.

OG (59:54)

I think there are two great crimes when it comes to financial planning and all the publicity goes around the first, which is not saving enough money, you know, and I don't know the percentages here, but I'm going to say it's probably 70% of people. That's the struggle, right? You got to save more money to reach your goals. But that's where everybody focuses and goes, oh, well, if I've solved that problem, then I'm good. Well, the other side of that coin, the other great crime is saving too much money. And it sounds really stupid to say, especially from a person who is is tasked in his life with convincing people to save money for future goals. But there comes a time when you have too much. You have saved too much money. And it's time to do those experiences. And I'm not in charge, from a client standpoint, in charge of telling you, joe, hey, you have to consume this money in this way that I see. But when I see you foregoing things as a client, when I see you saying, oh, well, we can't do that because of whatever, or I catch wind that, you know, you're not going to go see the kids during the holidays because the flights are too expensive this time of year, yet I know that you have the resources, yet I know that the plan is bulletproof and it's not going to make a hill of beans a difference whether the flight's 500 bucks or 700 bucks. You know, it's just now, if you don't want to travel because it's too busy in the holidays, I totally understand that. But don't tell me it costs too much money when you have the resources. To me, that's just a great crime as not saving enough money. It's not spending enough money or dedicating the resources in the manner in which you can experience.

OG (61:25)

A better outcome for the people around you. So it doesn't mean you have to consume it in the sense of like, I have money, I'm never going to run out, I should buy a Ferrari. That's not a good use. Maybe it could be for you if that were your thing that you're into. But maybe it's making sure that you fill up the Toys for Tots bin at your local Ace Hardware this year or whatever it is that is important to you. I don't want you foregoing those things because of a scarcity mindset. But by the same token, you have to have a little Bit of that so you don't blow it all in year one. And maybe that's just where planning comes in to give you, the consumer, the confidence to know that the decision that you're making is going to give you the most flexibility in the future.

Joe Saul-Sehy (62:05)

Scott Vandenberg, who is the president of Century Management, echoes something that you said. He calls the first six months of retirement the victory lap phase. And just you're so emotional, you have this euphoria. Research from a gentleman named Ken Dykewald says that people have 18 months of this euphoric feeling and then there's a reason why people go back to work. Number one is they may need money, but number two is boredom. Yeah, people are bored in retirement. And once that euphoric feeling goes away and you realize it's no longer vacation, it's a whole new phase of, I'm.

OG (62:39)

Not on vacation, I don't have anything to go back to. Yeah, it's a whole new, better find.

Joe Saul-Sehy (62:43)

Some stuff to do, whole new phase of your life. So he advises, oh, gee, what you said earlier, but not as a money thing. He just says, take six to 12 months and just feel how you're feeling, feel how you're changing before you go make any big, huge purchases or make any big changes. The first six months. You know, it's almost like when a relative dies or you win the lottery. Just, just sit on it.

OG (63:07)

Just like when you win the lottery.

Joe Saul-Sehy (63:08)

Just sit on it. Yeah. We'll link to this in our show notes@Stacky benjamin.com Good discussion at Kiplinger here and nice job here by the author Jacob Schroeder. Doug, let's wheel out on the back porch. Maybe re echo what we talked about on Monday, if that's all right with you. Because we got a re echo.

Sponsor Voice - Indeed (63:27)

Yeah.

Joe Saul-Sehy (63:32)

Echo again. Again, again, again, again. Wait a minute. Isn't the echo there? Yeah, I didn't think that through. I guess two things on the back porch. Number one is we are getting ready to launch our success sessions in January. Again, these are ten 90 minute sessions with me and a small group of people. We, once we get to 30 people, we cap it. So it's going to be 30 people or less. 1090 minute sessions walking through your financial plan from beginning to the end. We use my book Stacked as our teaching tool and we've done this two years in a row. The average person sees a huge lift in their understanding of money and understanding where the holes are in their financial plan. Imagine that it's the beginning of the second quarter and you know so much more about finance and you know where the holes are in your financial plan. But if the big thing that you need is not to go to stacky benjamins.com success to join our success sessions, you just already know you need a team to help push you and move you and do the heavy lifting when it comes to helping you develop the financial plan. Well, OG and his team, OG and Anna and the rest of their team are taking clients. Head to stackinbenjamins.comog for that link. So if you know you need help stacking benjamin.com OG if you want to dive in with me in a small group stacking benjamins.com success our goal for both OG and I is to help you do better next year. And we're giving you plenty of ways to get the train on track in the next next season of your life. Make next year better Speaking of making things better, Doug is going to really take wow, we went through a lot today. Take a lot of these and help you get more succinct with what the top three things are you should have learned in today's episode.

Doug - Joe's Mom's Neighbor (65:24)

Well, Joe, first, take some advice from Lou Frankfurt. Sometimes an outside perspective is exactly what the marketplace needs. So don't be afraid to switch careers midstream and the key to success, magic and logic. Second, focus hard on that first year of retirement and the rest should be smooth sailing. Except don't buy a boat. But the big lesson I just realized it's back to the future here in Joe's mom's house. This basement looks like the 1970s are alive and well. Brown shag carpeting on the wall.

Lou Frankfurt (65:57)

Who does that?

Doug - Joe's Mom's Neighbor (66:00)

Actually, my dad does that. Thanks to the he totally did. Thanks to the legendary coach CEO Lou Frankfurt for mentoring us today. You'll find his new memoir, Bagman. Great name wherever books are sold. We'll also include links in our show notes@stackingbenjamins.com.

Doug - Joe's Mom's Neighbor (66:21)

This show is the property of SB Podcasts, LLC, Copyright 2025 and is created by Josal Sehive. Joe gets help from a few of our neighborhood friends. You'll find out about our awesome team@stackingbenjamins.com along with the show notes and how you can find us on YouTube and all the usual social media spots. Come say hello.

Joe Saul-Sehy (66:43)

Oh yeah.

Doug - Joe's Mom's Neighbor (66:43)

And before I go, not only should you not take advantage of advice from these nerds, don't take advice from people you don't know. This show is for entertainment purposes only. Before making any financial decisions, speak with a real financial advisor I'm Joe's mom's neighbor Doug and we'll see you next time back here at the Stacking Benjamin show.

OG (67:12)

Sa.

Joe Saul-Sehy (67:58)

We were recording and mom whenever she runs the mixer upstairs scares Cooper. So Cooper now is sitting right next to us and as he was running down the stairs, while we were spending the 45 seconds of silence so we could do this segment, Doug announced that there is a new member of the Stacky Benjamin's family. Everybody.

Doug - Joe's Mom's Neighbor (68:18)

Yeah, we got a new dog to be a companion for our other dog. So we have two, we've always had two Dobermans and we lost one of ours very sadly back in October very abruptly, unfortunately.

Joe Saul-Sehy (68:32)

That hit you hard?

Doug - Joe's Mom's Neighbor (68:33)

Oh, I hit really hard. I. We've had. Unfortunately, you know, it's just part of being a pet owner. You know, when it's time to go you have to put them down. And it's. It's a tough thing. When it was Sasha's time, it happened quickly. She got injured and when we went to get X rays they found cancer and we just had to make a very quick decision.

Joe Saul-Sehy (68:53)

Sure.

Doug - Joe's Mom's Neighbor (68:54)

And it hit us very hard. Harder than other dogs that we've had to put down. It was just a different attachment we had with her.

Joe Saul-Sehy (69:00)

So hard he got a new one og a month later.

Doug - Joe's Mom's Neighbor (69:03)

Yeah, well, I mean we just, we.

OG (69:04)

Love dogs and I've stayed away from even talking about this other than. Sorry to hear. Yes, I have a different level of emotion around animals.

Doug - Joe's Mom's Neighbor (69:12)

He's not a pet person.

OG (69:13)

I think other people do. So.

Doug - Joe's Mom's Neighbor (69:16)

So anyway, we got another Rescue, a beautiful 10 month old female Doberman. And we're trying to figure out a name for her because the name that she came with, it's kind of cool, but doesn't work for us because I don't know what the story is. So her name was Tulsa. And we're like, it's kind of cool. But I've never even been like the name, like, what are we gonna.

Joe Saul-Sehy (69:40)

Tulsa, It's a cool town. But you've never.

Doug - Joe's Mom's Neighbor (69:43)

I mean, I don't have a story behind it. They're gonna be like, why Tulsa?

Joe Saul-Sehy (69:47)

But you have a story. The story is we rescued a dog. I mean, look at, look at Tulsa.

Doug - Joe's Mom's Neighbor (69:54)

Oh, so no, the dog's from. The dog is from Holland, Michigan.

OG (69:57)

No, no, no, no, no. You're not hearing me from Tulsa.

Doug - Joe's Mom's Neighbor (70:00)

Tulsa, hello, Problem solved.

Joe Saul-Sehy (70:05)

But you rescued a dog and the dog had the name Tulsa. I mean, that's nice.

Doug - Joe's Mom's Neighbor (70:09)

So it's a way, it's an excuse for me to virtue signal. Like, oh, yeah, I'm a dog rescuer.

Joe Saul-Sehy (70:13)

Yeah, humble brag. Right? Right. Okay, I think on that note, why don't you just name it 5K so you can say, well, I walked 5K this morning, like, every morning.

Doug - Joe's Mom's Neighbor (70:22)

Well, because we're so committed to our 5Ks, we just name it marathon or.

Joe Saul-Sehy (70:29)

Oh, I walked marathon this morning.

Doug - Joe's Mom's Neighbor (70:31)

We can name her orphan. Yeah, we save orphans from burning buildings.

OG (70:35)

It's like that video I saw the other day on YouTube. That person sitting at the coffee shop or whatever, and she says, hey, what's the WI fi password? He says, you got to order a bagel. She goes, oh, cool, Can I get a bagel? He goes like, you want to order a bagel? She's like, yeah. He gets a bagel, brings it out. She's like, cool, Can I get the wifi password? Because I already told you, it's you got to order a bagel. All caps.

Joe Saul-Sehy (71:02)

That's where they get you.