Recently, Petra Coach presented a webinar, “Why You Aren’t Rich Yet” with David Waddell and Teresa Bailey of Waddell and Associates.

If you’re an entrepreneur, this information is key to recognizing subconscious bias that may be preventing you from maximizing your net worth and taking initiatives to change that.

You can find the full recording here.

The below Illustrated Model is from The Vivid Ink Company. Kristin McLane and her team transform the spoken word into lasting and actionable works of art. Check them out on Facebook, LinkedIn, Instagram or their website.

To augment the recording, we noted takeaways and tips from the presentation.

Top Takeaways

Disclaimer: We are not making specific recommendations today.

What does rich mean? Today, it’s all about dollars.

Know Thy Self

WYNRY Reason 1

Because You’re An Entrepreneur 

But you are also human…

You have many tremendous attributes but there’s also some communication and thinking biases.

  • Bias: a illogical preference or prejudice

Vanguard study quantifies the value of having an advisor in potential addition net annual returns:

  • Portfolio Construction: up to 1.15%
  • Wealth Management: up to 1.05%
  • Behavioral Coaching: up to 1.50%
  • Potential Total Value Added: ~3%

What is Behavioral Coaching?

Investment Return: What your return should be

Investor Return: What you’re actually getting

Behavioral Gap: The difference between these two based on the human aspect

Active vs. Passive Wealth


  • Wants the home but without any mortgage balance
    • Bias: Mental Accounting (house is a “safe” asset)
  • Won’t make a decision about the house
    • Bias: Regret Aversion (fears making unwise decisions)
  • Doesn’t really want the “spouse’s” house / disagrees with the appraisal
    • Bias: Self-Attribution (attributes success to self and failure to others)
  • Wants house and divorce but only if the MDA is signed by February
    • Bias: Illusion of Control (believe they can control an outcome)
    • Most common for entrepreneurs

What a growth investor needs from an advisor? Education.

What an aggressive investor needs? Someone to take the reins.

Entrepreneurs prefer to participate more actively/aggressively in wealth creation.

WYNRY Reason 2

Because You’re Too Busy

Too busy in the business, too busy in the weeds, etc.

If you place priority on this, change will happen in a positive way.

WYNRY Reason 3

Because You Don’t Have a Coordinated Strategy Implemented Across all of your Professional Service Providers

*Anna graphic with 3 calls*

Anna decides to pay off her condo and avoid the 3.5% interest on the mortgage.

What’s wrong with that? None of the providers reviewed Anna’s Balance Sheet – and Life!

  • Anna’s parents are ill and live on Social Security. She is an only child.
  • Anna’s only liquidity was the $200K.
  • Anna’s only debt was her mortgage – many would argue that a 3.5% rate mortgage is an asset.

WYNRY Reason 4

Because You Don’t Have a Strategy Outside of your Business Strategy

This is where the math comes in…

Know Thy Balance Sheet

“Eddie Entrepreneur’s” Balance Sheet

Eddie has:

  • A company
  • Stocks and bonds (mostly 401K)
  • Angel deals
  • An old home for rent
  • A new dream home
  • Cash

Eddie’s Sample Balance Sheet:

Eddie’s Company:

Eddie & Real Estate:

*A mortgage is an asset.

Eddie & the Stock Market:

Eddie & Entrepreneurs – Angel Deals:

Eddie & Cash:

Calculating Eddie’s Rate of Return:

Optimizing Eddie’s Rate of Return:

The Bottom Line

  • Listen you’re your advisors
  • Track your business returns like an investment
  • Mortgage your real estate
  • Invest in, but do not trade, the stock market
  • Limit low yielding cash holdings
  • Use higher yielding bond funds as cash equivalents
  • Only do unicorn deals – Something visible to a 20% return – Go in with eyes wide open, only 10% of those are going to return much
  • Maintain liquidity to take advantage of crises & opportunities


Q: What sectors are forecasted to make a run over the next 3-5 years based on your own DD and personal interests?

A: We will see a reprisal of what we saw between ~2000 and 2005 where the tech stocks went sideways. You will make more money off-shore and from sectors like financial, industrial, materials rather than Facebook over the next 5 years.


Q: At what point you should start implementing some of these levers? We are early along and my husband doesn’t see the value in investing.

A: First, make sure you have an emergency account – 6 months worth. Second, load your 401K with all the savings you can and put them in stocks. The younger you are the more impactful the compounding becomes. Google a chart that shows money invested through the ages between 25 and 35 vs. someone who starts at age 40 through retirement. Early investing pays off.


Q: Are you seeing traditional value plays in this market or are they just less over-priced?

A: No – there are value plays. You have to recognize what’s driving the market. The Government is about to spend the most money since the 50’s. The Fed has increased the money supply over 25%. Two forces – fed government spending and fed printing money. There is just a lot of money pouring into the system – going into the consumer’s hands and corporations. The market doesn’t go down just because it has a high PE. There’s going to be a lot of money to make. Things will continue melt higher until we hit some kind of wall. The indicator to look at daily is inflation and we’re not seeing that yet.


Q: Tell us Waddell & Associates. How are you different from wealth or asset management companies? Are you just advisors? if so how are you different from others? 

A: On staff we have lawyers and CPAs. The CPAs are going to be most important within the coming years. A lot of firms also don’t talk about the balance sheet and strategy the way W&A does. At W&A the quality of the staff is high and their regulatory track record is high. We have 1,000 clients across America. While we’re “paid” to manage assets, we talk about everything. They’re fiduciary advisors so they’re actually allowed to give advice.


Q: If you had $200k in the bank are comfortable sleeping on a cash pillow (or at minimum prefer access to those funds without penalty) where would you put it? ETF, Mutual Fund or something else?

A: Choose what you need to be liquid, then migrate the balance into active mutual bond funds with an open mandate (if you don’t want to put it in the stock market).


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