In this week’s episode of Retire in Texas, Darryl Lyons, CEO and Co-Founder of PAX Financial Group, continues his two-part series on the core financial principles that have guided his career, his clients, and his community.
Building on last week’s first ten principles, Darryl shares principles 11 through 20 – covering why retirement should be a pivot into purpose, why your net worth is a scorecard (not your identity), and why the market behaves like a child with a yo-yo on an escalator. He also discusses the healthy tension between focus and diversification, the importance of taking responsibility for your own money, and why investing in yourself often produces the greatest return.
Other key takeaways include:
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The underrated power of compound interest and patience.
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Why paying taxes doesn’t mean leaving a “tip.”
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How thinking long term changes not just your finances, but your health, family, and legacy.
Whether you’re planning for retirement, building your business, or simply trying to stay grounded, these timeless lessons may help you see money – and life – with greater clarity, purpose, and peace.
If you enjoyed today’s episode, be sure to share it with a friend or family member!
Transcript:
Hey, this is Darryl Lyons, CEO and Co-Founder of PAX Financial Group. You’re listening to Retire in Texas, where building wealth comes with clarity, purpose, and peace. And we’re guided by 1 Timothy [6:17] through 19. I just really want to help you grow your net worth without losing your grounding.
And if that’s what you’re after, then you’re definitely at the right place. Remember, this information is general in nature only. It’s not intended to provide specific investment, tax, or legal advice. Visit PAXFinancialGroup.com for more information. So, I’m doing a little podcast series, just two episodes on just financial principles that are important to me, that helped guide me and helped me guide clients and our community. And so, the first iteration was the ten and I’m doing part two of ten.
So, if you didn’t hear the first ten, go back and listen to the last podcast. So, I’m going to start with number 11 on the principles. And the number 11 is don’t retire, pivot into something that is aligned with God’s will. So, I just think that, and I alluded this in last episode, retire by definition is the disposal of an asset over its useful life.
And that’s obviously problematic. And so, the idea of thinking that somebody’s life will just simply be what I’ve said before is Fox News and Flowerbeds. I don’t want to say, I don’t want to go as far as to put a guilt trip on you, but, you know, I don’t. That may actually displease God to think that you still have you know, you still have life, oftentimes wisdom, experiences, and maybe even money and rather than, you know, reaching down the ladder to pull somebody up, it’s Fox News and Flowerbeds and, I again, I don’t want to put a guilt trip.
Everyone’s situations different. I’ve helped a lot of retirees over the years. So, I definitely empathize with unique situations. Some people don’t want to obligate themselves because they want to have blank space and be available to their kids and grandkids there is that. But for the most part, we really have to look and ask ourselves, what does it mean to retire?
And the evidence and the secular side is clear. When people retire, often their health erodes and there’s certain attributes of retirement that get abandoned, that are important for life and vigor. That includes relationships, community, and purpose. So I don’t believe that retirement should just simply be a time where you check out and, you know, it’s not that you, I guess philosophically, I was going in my head was going down deep area that I don’t have time to unpack, maybe another episode, but I just want to say that that an ideal scenario, you’re serving others.
And I’d hope that you consider that because retirement is not disposing of an asset. It’s not disposing of you. It should be much more. Okay. Number 12, your net worth is your scorecard. People kind of get riled up at this. They’re like, net worth is not, you know, that’s not who you are as a person.
I’m not saying that it’s your worth or your identity at all. I’m saying that we fail as human beings to measure progress. And there’s more than a handful of ways to measure progress. I would suggest to you that your net worth is one of the best ones, and I think it is intellectually dishonest to find excuses not to measure net worth.
Over the years, I have seen that poor people value their financial life, what they might consider a financial win. Poor people, broke people. They measure it by the amount of their tax return. I’m not kidding. A financial win for them is the amount of their tax return. And if that’s you, then you might be in that broke category.
People who are winning with money, people who are winning, view their success with air quotes, and progress more than anything is their net worth growth. And so, I think you just have to start measuring what’s important to you. What really matters, and net worth is assets minus liabilities. This is not a function of your identity.
Nor do I want you to compare. I didn’t say compare your net worth to anybody else, although I can do that. I’d rather just to see growth. And that’s just maturity. Okay. So again, net worth is assets minus liabilities equals net worth what you own minus what you owe. So, there’s a handful of ways that you can go about increasing that bottom line net worth okay.
Number 13, you’ve heard me say this before and I’m repeating myself. But it’s important. The market is like a child with a yo-yo on an escalator. And historically, about 70% of the time this escalator goes up. About 70% of the time. So, think about that for a second, and I’ll put a link, because I gave you a stat.
And whenever I give a stat, I’m supposed to substantiate it with, research and I just, I made it up off the top of my head because I’ve seen it over time. And I’ll have, I’ll be able to substantiate it, though I’m not far off. Maybe it’s 69, maybe at 71, but it’s around 70% of the time the market goes up.
So why fight against probabilities that high? I don’t understand why do we fight and try to make it so difficult? 70% of the time it goes up. So why are we always trying to fight against those odds? Because we get information from some random economist that’s telling us that the world is ending, and so we freak out.
I get that that’s what it is. That’s the child. That’s the child in this metaphor, the child with a yo-yo on an escalator. Very emotional. That child is very emotional. And that yo-yo goes up and down. And that’s just the daily fluctuation. Sometimes it’s weekly, sometimes it’s monthly. And some people focus on this little emotional yo-yo, not the yo-yo, the emotional child with the yo-yo and not the escalator.
Okay. Number 14, focus and diversification are always in tension. It’s a healthy tension. It should be. So, focus versus diversification. So, hear me out. The best portfolio is an undiversified portfolio when you’re right.
When you’re right. And of course that’s the issue. I don’t know what the future holds. If I could go back in time I would have been Nvidia and then Apple and who had Microsoft. But they got Bill Gates and Warren Buffett in a room, and they said, I want you to agree upon one thing that made y’all both successful.
And they agreed that it was focus. Focus is really, really powerful. So why do we diversify? Well, because this is your life. And if we’re wrong, that would be the definition of the worst portfolio. The worst portfolio is an undiversified portfolio when you’re wrong. So, here’s my point. I believe focusing on what you can control is how we get these two truths to coexist.
Focusing on what you control that’s either working on your business, working on your personal professional growth, and hyper focusing there, diversifying with your investments, spreading it out. There is a point where there’s something called diworsesification. You’re adding too many things that are just kind of nonsensical. Your advisor needs to walk you along that line. There isn’t a science.
There’s some scientific stuff about it, but it’s not consensus. So, focus. I think focus and diversification coexist. One is with what you can control and the other is you can’t control the markets so that you diversify. That way if you get an Enron in your portfolio, your futures okay. Number 15, no one will care about money more than you.
I know a lot of times we want to transfer this idea of worrying about money. I’m just going to transfer it over to an advisor or transfer it to somebody else. My accountant. Let them worry about it. I know that’s true. I feel like, by the way, I feel the burdens of carrying worry for people, I really do.
I have people that just come in and just say, you take care of it all. I don’t even want to talk about it, like just you do it. And I feel that like, oh man, the rest of their lives are in my hands or PAX’s hands or, you know, all of our advisors feel this, like this burden.
But we really, it’s important to understand that it’s still your money and that there’s a responsibility just to ask questions. At least, take notes. Learn a little bit more. Advisors, an advisor should have a heart of a teacher. If your advisor is not willing to share with you and they get utterly offended when you probe questions, they should maybe feel uncomfortable.
But, you know, this defensiveness, that’s not the right advisor, because no one should care more about your money than you. And so, if you’re not using one of these online tools that track your money, I’d encourage you to do it, Smart Money with Dave Ramsey, Monarch Money, are a couple that I think about. But make sure that you are paying attention to your money.
Okay. Number 16, I’ve alluded to this, but I’m going to reinforce it. Investing in yourself is the best return on investment. Investing in yourself is the best return on investment. And so, when I’m working with a business owner, I mentioned that because I end up counseling a lot of business owners and advising a lot of business owners. I’m not ever trying to develop an investment strategy that’s going to get a better return on investment than the business.
The business should get a better return on investment. It should get a better return on your money. Now, real estate is where it gets kind of quirky because a lot of people say, well, I want to do real estate as opposed to investing in diversified securities in the marketplace. I could make a case, not like an irrational case.
An objective case that the securities markets outperform the real estate market, could, absolutely could. But where you can shift the returns in your favor if you’re in the real estate world is if you’re actively in it, if you’re managing it, in that case, it’s not passive real estate anymore. It’s now a business. And I would go back to my first thought and my first principle is that if you do have a business, you’re likely going to get a better return.
And if your business happens to be real estate, then you’re likely going to get a better return if your business is in franchising, if you’re investing in your education, if you’re investing in your skills, that’s your best return on investment. Number 17, compound interest is extremely underrated and one of your biggest weapons, regardless of your age.
The whole world is and I’m a victim of this. I’m not immune to wanting instant gratification. We live in a very much a microwave world, but if the whole world is zigging and if you want to just zag without being like crazy, all you have to do is be a crock pot person. Let everyone else be a microwave person.
And if you’re a crock pot person and you think about life that way. You’re going to see your money compound and compounding absolutely works. And it’s worked for years. And it’s math. It’s simply math. And which, by the way, math was created by God. It’s an interesting theology that we could go into, but it’s very interesting if you think about it.
Math was created by God, and here we have the ability to engage with Him. My Catholic friends would say, you know, that the engagement, the unity of us and Christ, is portrayed in the Eucharist, where we took a grape, that was made by God. And we co-created to create something mutually beneficial – wine.
Right. And this might be an example of this idea of, of discovering God and co-creating with Him where He has created this idea of math. And we are able to adopt it in such a way that it helps us accomplish goals. And compounding is one of that. So, I know it’s kind of like, man, how you put theology in in investments together here.
I think compounding is kind of the Eucharist of investing. And so, over time, I’ve seen that just compounding is evidence that time, not talent, builds wealth. And yes, you will be a Zagger if you’re a crock pot person and not a microwave person. Number 18. You’ve got to pay your taxes, but don’t leave a tip.
So, one of the things I appreciate about my undergraduate degree at Saint Mary’s University is that we spend a lot of time on ethics, not just a little. Like every course. What is the section on ethics and the philosophy courses we took. Like, everything was about integrity and there’s a couple things that I learned along the way.
There was a situation that I was in with doing this business deal, and we were in a situation. I don’t remember the details necessarily, but we had to make a decision that was, do we disclose something on the tax return that we wouldn’t get caught if we didn’t disclose? Nobody would know about it, not even the IRS.
We didn’t. I don’t remember the situation, but we didn’t have to disclose it. We legally had to, but we could we figured we could get away if nobody found out. And I remember in that situation dealing with this individual and this person said, no, let’s just leave it out.
No one’s going to find out. And I actually, I thought about, you know, what? This is one of those situations that I learned in undergrad that, you know, you do the right thing. And I mentioned that. And the other party said, well, I don’t consider the IRS an organization of integrity. So, I think we can go ahead and dismiss this transaction.
And that’s exactly how thieves think, too, right? When they steal from a boss, they’re like, they justify it. And the same thing goes with somebody who’s cutting corners with the IRS. It’s not right. And again, you know, I’m not trying to be righteous, but if you think about, you know, even Jesus’s rendering of Caesar’s, what is Caesar’s?
I say all of that. And I do want people to pay taxes, but I do not want them to leave a tip. Pay your taxes. Don’t leave a tip. I think there’s some reform that needs to take place with hedge funds. I think they get these big hedge funds get too much of a good deal and from carried interest, if you want to look into that, I think that’s a real problem.
And I think there’s some unfairness, but I don’t think that substantiates the need for us to cut corners. I do think we need to figure out ways to reduce the taxable income within the framework of the law. That includes funding HSAs, funding 401ks, there’s cost segregation strategies for businesses, there’s bunching strategies. The PAX Financial Group team has some tools that we can use to help identify ways to reduce taxable income.
Pay your taxes, but don’t leave a tip. Number 19, money is transferred from the inpatient to the patient. Money is transferred from the inpatient to the patient. Now similar to crockpot investing. But the reason I want to kind of reinforce this one is this one is very much identified in the emotion place. And so, what you have to think about is when you put up investment strategies, there’s going to be times when some of those strategies don’t perform or meet expectations.
C.S. Lewis said, life is all about expectations. And so, we get impatient. And, you know, let’s suppose that you invested a lot in health care in the last couple of years. Now, I think everyone in a diversified portfolio has some health care, but some people who might have put major investments into health care in their portfolios, they’re disappointed because health care total returns relative the market just haven’t done as well, you know, reexamine that.
But what happens to a lot of people is they just get impatient, and they move it out into the, like, technology sector. And guess what happens? The trends reverse. And all of a sudden, they missed out on the rebound. Happens with companies inside of the portfolio where companies are struggling because they’ve got some supply chain disruptions or some management turnover, and it’s reflected in the stock price.
And people get impatient and they abandon and they justify it. And then the, you know, smart company pulls it out and turns things around. And all of a sudden, it’s rewarded the shareholders who are patient. So yes, there’s adjustments that need to be made and investment strategies I do think that’s important. If we knew the future, we know if we should make those adjustments or not.
But I think generally speaking, we need to be patient with our money. And number 20, the last one again, very much overlap a lot of these. But think long term. And the reason I want to set this aside from some of the other ones is because it does have different implications. And I’ve said this over and over again.
You’ve heard me say it. When you think long term, it totally changes your attitude in a lot of areas of life and includes your kids. Like, you know, we worry a lot about our kids. I know this now. I’ve got a 20-year-old, but I’ve worked with a lot of people over the last 20 years that have raised kids, and I’ve seen their kids become prodigal sons and come back, which is beautiful.
But I know that we’re always worrying about our kids, but there is this long term thing happening that we have to consider. And I think oftentimes we discount that and just get caught up in the chaos of the moment, and it just worries us. Thinking long term also applies to our health. You know, oftentimes we, you know, cut corners and eat late and, you know, not work out and do all those things.
But if you think long term that you want your body to be there down the road for your kids, your grandkids, then that changes your approach thinking long term. And that actually works very well with money as well, thinking long term. And that includes saving or, your investment strategy, being disciplined. All the qualities that come with being a good long term investor is actually begins with thinking long term.
There you go. So, there’s the total of 20 and ten here, ten in the previous principles. Let me recap those. Number 11, don’t retire, pivot into something that is aligned with God’s will. Number 12, your net worth is your scorecard. Number 13, the market is like a child with a yo-yo on an escalator.
Number 14, focus and diversification are always in tension. Number 15, no one will care about money more than you. Number 16, investing in yourself is the best return on investment. Number 17, compound interest is extremely underrated and one of your biggest weapons, regardless of your age. Number 18, pay taxes, but don’t leave a tip. Number 19, money is transferred from the inpatient to the patient.
And number 20, think long term. Thank you very much for listening today. I really appreciate it. Stay grounded, live generously. And remember you do think different when you think long term. Have a great day.
Resource:
https://www.quiriniwealthgroup.com/documents/FG/quirini/insights/635982_sP_write_up-Revised.__SQ.pdf
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