Introducing Chinese Americans to Prosperity Economics with Ken Ma – Bonus Episode

This transcript was auto-generated and may contain errors.

[00:03] Welcome to the Prosperity Podcast, fresh alternative personal finance talk for independent thinkers who prosper outside of Wall Street. Here’s your host, bestselling author, Kim D.H. Butler. Welcome to this special bonus episode of the Prosperity Podcast. Today, Kim and I are talking with Ken Ma. Now, Ken has been involved with the translation of some of Kim’s books into the Chinese language. Today, I get to hear some of Ken’s interactions with Kim and understand the Chinese culture a little bit more and how they view finances. To give a little background about Ken, he was born in Taiwan and he later came to the U.S. as a foreign student. He’s been living in Los Angeles for almost 40 years. He’s been searching for a simple financial planning strategy for over 20 years, and

[01:03] he stumbled across Kim’s book. And once he read Kim’s first book, he went and bought all of her other books. And then he went to a seminar and learned more about truth concepts with Todd Langford, Kim’s husband, and really dived all the way in. And from a handshake deal, Ken said, I want to translate your books into the Chinese language for these Chinese speakers and readers. So from that handshake transaction that they put together, they’re putting out books and helping people all around the world. Both Kim and I think that you’ll really benefit from this conversation. So let’s jump right in. I want to welcome the listeners to the Prosperity Podcast. Ken and Kim, are you both there with me?

[01:55] Yes. Yeah, I’m here. Yes, I’m so excited to get to talk with Ken and so honored to share him with our audience because we have such a fun relationship. So, Ken, I would like it if you’d start by telling everybody how we met. Kim, again, thank you very much for inviting me to the podcast. And thank you, Spencer, as well. I was reading books about financial planning. I’m sorry. I’ve been reading financial planning books for many years. For some reason, one year ago this time, I found Kim’s books and I found there are more than one book. It was so interesting. So I bought them all and read them all. In Kim’s books, he mentioned calculators. And I have never seen calculators like that. And it provides information and validates some of the calculations or some of the

[03:08] questions that I had in mind for years. And I found out that there are training seminars about those calculators. So the next training seminar was in May. Then I bought my tickets and went to St. Louis and met with both Kim and Todd, Kim’s husband, a fantastic couple. That’s how we met. It was such a joy to have you there. And so for those of you that don’t know, that’s Todd Langford of Truth Concepts Software. And Ken said it so well. It enables us to prove numerically what so many of us know conceptually. And we just often don’t have language to put the words around some of these inherent financial concepts that we know in our hearts. And so that’s how I view my role, is I put the language around it and then

[04:13] Todd comes behind it and puts the numbers around it to prove it. Now, of course, you could also say that Todd comes in front of it and puts the numbers out and then we come up with the language. But either way, I’ve really loved my relationship with you, Ken, because you chose to tackle a project that I am just so proud of in a very humble way. And that is the translation of one of our books, Busting the Interest Rate Lies into Chinese. Now, I know that the habits, the saving habits, the financial habits of the Chinese are a little bit different than those of us Americans. Tell me a little bit about that. You are a very experienced person. You have a lot of knowledge. Tell me some about the differences of how people that come from your

[05:11] background think about savings and money. Ken, that’s a very good question. I would say it has a lot to do with our cultural background from our parents, grandparents, because our background, and for me specifically, I came from Taiwan and that time I still remember we were very, very poor. So saving is the important thing in our mind. For instance, I have never had the checking account. I have no idea what checkbooks looked like until I came to the US and started studying. Everything we had to buy was based on cash. If we did not have any cash, then that was it. Nothing else, no credit cards. We cannot borrow money from other people, maybe from family members. That’s how we grew up with. And that’s in Taiwan.

[06:34] In China, in the 80s, I had the chance to go to China in the 80s. The country was even poorer than in Taiwan as far as, say, eating foods and buying groceries. Now it’s a very, very different story. So we were learned to save money when we were young and when we grew up, we still have those habits. In other words, it’s a scarcity thinking. Either we have it or we don’t. It’s very different. Yes, great spot for you to bring that up because it is the scarcity thinking problem that everybody deals with. It doesn’t matter where they come from. Even wealthy Americans sometimes deal with scarcity thinking. So you’ve done a really good job in learning how to overcome that. Tell me a little bit about the mental gymnastics, if you will,

[07:45] that you do or have done in your past to help you overcome scarcity thinking. Kim, another great question. I need to find great answers to that, too. After I came to the U.S. and I found out, well, first there’s exchange rate problem. In other words, when I came here, I remember at that time there was no email and I needed to send letters back home. So I went to the post office and I had some American dollars and coins and I couldn’t recognize, I couldn’t figure out the difference between dime and quarter and nickels. So I said, well, I need to buy, I think that time called the aerogram. I need to buy some aerograms and I said, well, I can’t recognize those coins and just put them on the counter at the post office

[08:55] and they pick the right amount. So that was then, then I learned to have a checking account. So, wow, what do I do with checking account? Never had it before. Then later on credit cards. And after starting having credit cards and had the the conception or misconception, I don’t know if that’s true or not. You need to borrow money. You don’t want to pay it off. So you have a better credit. And that’s the concept or that’s the thing that I learned. So without paying off your credit card, I start paying as little as possible. And to me, it did not make sense. After a few years, then I start paying things off. Then I think it was early 90s. Now, after I got married, my wife has been taking care of our personal or family finance.

[10:09] She was working on balancing checkbox and reconciled bank statements. For some reason, I started getting into it in the early 90s. And because my background, I had the chance to start using Quicken. It was a long time ago, almost 30 years ago. And I started putting numbers into Quicken. Then I found out some of the things that I learned did not make sense. And I started doing all the things. And I got into learning how to use QuickBooks as well, for small business and for our own business. And those things really helped me to figure out the numbers. But again, how to invest, how to do other things. I’ve been reading books and tried to figure out and have them different investments. And some of them are good, and many were not good at all.

[11:16] So I’ve been looking for the answer for so many years. And finally, I found the answers just one year ago, Kim’s books and Pops calculators. So I’m very, very grateful. That’s been so fun to continue to watch your learning as you’ve progressed and your good questions. And I so enjoyed the process of the translation work because you made it so easy for me. You had 80% of the work done. And you would just bring to me the questions about areas that didn’t translate directly or easily. And so it actually helped me really learn about the way that you think, which I’m going to assume is somewhat reflective of the Chinese community. And I got to learn how important buying a home is for you. And of course, you and your wife have helped people

[12:13] in the Chinese community buy homes for 40 years, right? Yes, can say that. And that’s how we see the Chinese mentality of investing. It’s different than the Americans. That’s how I see it. And we are very, what do you call it? Skeptical? Yes, that’s the word. And the very nitpick things and look for small changes, as put this way, without looking at the big picture. I’ve noticed how careful you are in your work. And it is what made the translation such a joy because I could be confident that it was being done properly. And because there are so many miscommunications around personal finance, just American to American, English speaker to English speaker, when you add in the language differential, those get even greater.

[13:27] So I know one of the areas that we talk about in Busting the Interest Rate Lies is life insurance and the use of life insurance as a savings tool. But that’s not how you started out. What is the typical Chinese perspective on life insurance? When I read the book, Busting the Interest Rate Lies book, in the beginning, everything makes sense. When I read the life insurance part, life insurance part, I tried to think back how I felt at that time. Wow, that was so interesting. I have never heard it before. Our thing is life insurance, I never get to enjoy the benefits because I’d be dead and somebody else would enjoy the benefits. That’s one thing. Secondly, most, I should not use the word most,

[14:37] many Chinese think life insurance is just a sales gimmick. They just want us to continue paying every year, every month until we die. The insurance company, they’re making so much money. And also, there are so many different life insurance policies, different kinds. For instance, like a term, universal, and the whole life, there’s another one. I forgot it, variable, it’s not the variable insurance. It’s not the variable insurance, that’s another popular. Universal, whole life. And then index is the other one you’re thinking of. I did not know anything about index until I started reading more about the life insurance. So wow, there’s another one. There are so many different variations. And when we had the chance to see illustrations,

[15:46] there’s so many numbers and so many technical terms. We have no idea. And the worst part is agents, they have no idea either. After reading your books and I found out that, oh, gee, I made such a big mistake by having term insurance for the last 20 years, almost 20 years. And if I knew it 20 years earlier, I would have done very, very differently. However, that’s how an agency sold us term insurance. Oh, Ken, this is the cheapest and you’ll be okay. And they don’t even mention about 20 or 30-year term. 10 years is the cheapest, just go with it. And that’s how we bought it. We did not know any better. And yet that’s common. I mean, that’s an American challenge as well. So I really want to point out that you took some time to learn.

[16:53] You really dug in and you dug in conceptually and you also dug in numerically. What were the one or two biggest surprises that you got from the numbers side of things after you’ve been to Todd’s Truth Training for the Truth Concept Software? We had, for one case, we had IRS. That’s just a part of the company’s benefits. Everybody is doing it, so we do it as well. I remember it was managed by one of the big firms. They sent us the monthly statements, 20, 30 pages long. We never read it. And at the end of the year, they sent us even more pages, the annual report with so many numbers, so many words and some charts. I just stacked them up and put aside and never bothered to read it. And once in a while, they call us up

[18:00] and ask for, told us to buy different investments. Normally, my answer was yes, go ahead. And that was how we did it. We were busy doing our own things. We put those things aside. And besides, we’re not going to see anything until after the age of 65 or later. That’s not our priority. Yes, I did notice about management fee charges. The one biggest surprise that I learned when I went to Truth Training’s workshop was the management fees. It was about 2.5%. That’s small. We don’t care. We forgot about it. 2.5%, if I understand correctly, compounded quarterly for 30 years. Then the number becomes so huge. We never knew about it. And once I saw the numbers, I said, wow. That was the big surprise.

[19:24] I don’t know. Most Americans knew about it. Or, Kim, what have you noticed from your own experience working with the different individuals? I think the concept that you just brought up, which is essentially lost opportunity cost, or some people just call it opportunity cost, that is taught in high school and college. And basic economic and accounting classes. And yet it’s completely either forgotten about or not applied. So like in your example, you have a 2% or 2.5% management fee. But what you forget about is that those dollars have an opportunity cost for the rest of your life. And we measure opportunity cost by identifying not the rate of return that that particular investment is earning.

[20:32] But instead, by the best rate of return that we have available to us as investments. So let’s say you have a 401k and it’s earning 6%. But you have a land lease or something else that’s earning 9%. Well, the money that went to management fees is money that could not go to the 9% investment. And so let’s say that the 2.5% equals $5,000 a year. Well, that’s $5,000 times 9% times 30, 40, 50 years, literally your whole life. Or maybe you just want to measure it from now until, quote, retirement, even though you and I don’t really like that term, it is a common term that a lot of people understand. And so that’s what Todd’s calculators help us do is measure opportunity costs. And that is, if I had to pick the one thing

[21:41] that people make the biggest mistake on, it’s not learning to identify, measure, and then reduce opportunity cost. It is so interesting. We did learn opportunity cost a long, long time ago, but we forgot about it. And people forgot about the queue to put that thought into consideration when they do or when we do investments. We forgot about it. We look at the numbers. And sadly, a lot of times the numbers are not even correct because we did not put all the factors into consideration. Opportunity cost is one of the biggest ones. You are so right, Kim. You’re so right. That was the eye-opener when I was there. That was the first one. And the second one is life insurance. That was another big eye-opener to me.

[22:49] Like I mentioned earlier, the only thing I knew was term insurance. Then I learned that that’s a big money-making machine for insurance companies by selling term insurance. And I’ve seen AARP, I do receive AARP magazines and they have like $25,000 or $100,000 life insurance and no medical exam needed. And I said, oh, okay, I knew better now. Then I got into the calculations and that opened my eyes. Wow, such a great tool to do savings and later on to do investments and can even plan for the family legacy. I want to go even further, work. So it’s a great well-oiled machine and has been doing things, doing insurance for 150, 200 years. That’s incredible. And again, sadly, insurance agents did not explain any of the things to me.

[24:12] I had no idea. I learned about index, what do you call, IUL, index. IUL stands for what, universal? That’s a universal, just terms and they really confused a general public. And I think myself, it’s just like a general public and a Chinese consumer. And we don’t know any better. And that’s why when I read the book that we met for dinner, I still remember and then we had a handshake and that was the idea of translating your books. I still remember that was a great experience. I’m so honored. Thank you for giving me the opportunity to translate those books. Well, I’m equally honored and I’m so excited as we wrap up here that we’re gonna start to work and you’ve already started your work on our second book, which is

[25:24] you’re going to work on Busting the Retirement Lies. Then I’m hoping that maybe you’d like to do a third book and we really should do Live Your Life Insurance, don’t you think? You read my mind. So for everybody listening, we are just so grateful for Ken and his team and super happy that we’re gonna keep working on getting other books into the Chinese community. So right now there’s the Busting Interest Rate Lies. You can get it on Amazon and I proudly have mine with the really cool Chinese characters on the front. I like how they look. And then of course, we’ll have a second one as Ken says and then a third one and we’ll just keep working because we keep putting out new books and as long as Ken and his team want to translate,

[26:18] we are in. It’s a wonder what a handshake can do when you both give first, right? Yes, yes. And again, we’re very honored to have the opportunity and I really do want to share what I have learned to people that I know of, to the Chinese community. Like I said, most Chinese don’t want to read English literature or books. So, okay, make it easy for them. Another thing I’d like to share with the audience, Seth, if other advisors, they’d like to know more about how to work with Chinese clients, please feel free to contact me and by contacting Kim, and Kim can forward the message to me. Again, I’m just a messenger and I’m very, very honored and blessed that I have the opportunity to do so behind the scenes

[27:30] and doing my work and share my knowledge. So that contact information is hello at partners4prosperity.com and you can just put Ken Ma, M-A, in the subject line and I would be delighted to pass that on to you if people are curious about anything really that Ken can be valuable to, but of course in particular in working within the Chinese community. So Ken, is there anything else you’d like to say? I don’t. I think we covered a lot of stuff already. Again, it’s my honor and thank you for giving me the opportunity, Seth, over and over again. And oh, just one more thing I’d like to share with everybody. I’m the one who benefits most by translating the book, especially Busting the Interest Rate Lies.

[28:32] It was a challenge for us to translate that book because we thought that was easy, easy one and we were wrong. So I had to go back and forth many, many times and it was the first time to translate. I should say it’s a technical book and there are a lot of terms I do not understand. So thanks for Kemp’s help. Very patient when I talked to her over the film and asked her to clarify some of the concepts. Again, some of the concepts were new to me and then I had to share what I know to my helper Monica and she did not know anything about it by explaining to her and helped me to understand more and also by reading the translation and reading her book many, many times and I learned much, much more

[29:37] about the entire concept and about calculators. So I have to say I benefit the most. That’s awesome. That’s what win-wins are for. Again, thank you so much, Kim. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit us at partnersforprosperity.com. If you liked this episode, make sure you subscribe and leave a review.