In this insightful episode, Jonathan sits down with his father-in-law, Fred Gold, a seasoned CPA and business advisor with over 40 years of experience, including a distinguished tenure as a Partner at Arthur Andersen LLP. Together, they explore Fred’s financial journey, the cognitive biases that influence decision-making, and the lessons learned from overcoming challenges like regret aversion and familiarity bias. Beyond financial insights, the conversation delves into the importance of family values, the distinction between eulogy and resume virtues, and Fred’s perspective on living without regrets. Stay tuned as Jonathan concludes with a heartfelt discussion with his wife, Amy, reflecting on her father’s enduring wisdom.

 IN THIS EPISODE:

• [2:08] Fred shares his financial business journey
• [5:22] Making a financial decision based on cognitive biases
• [12:10] Discussion of regret aversion bias and overcoming a bad decision
• [20:08] Discussion of internal benchmarks and the importance of integrity
• [26:08] Fred discusses a pivotal decision in his career
• [29:35] Fred shares that he has no regrets in life, and Jonathan visits with Amy, his wife and Fred’s daughter, about how the conversation went with her father

KEY TAKEAWAYS:

• Cognitive biases, such as familiarity and recency, can distort financial decisions. To minimize risks and regret, evaluate decisions objectively, consider worst-case scenarios, and diversify investments.
• Biases like familiarity, recency, and regret aversion can skew financial decisions. To avoid pitfalls, evaluate risks objectively, consider outcomes, and use strategies like diversification or stop-loss measures.
• Living by internal benchmarks fosters authentic happiness and meaningful success. Prioritizing family, values, and character over societal metrics leads to fulfillment. Treating everyone respectfully highlights the timeless importance of integrity in life and work.

GUEST BIOGRAPHY: Fred spent 40+ years as a CPA and business advisor, primarily as a Partner at Arthur Andersen LLP. He led the Long Island practice and managed the enterprise audit practice in Metro New York, earning clients' trust as their most trusted advisor.

ABOUT THE HOST: Jonathan is the President and CEO of Fusion Family Wealth, founded in 2013 to focus on behavioral finance and guide clients toward rational financial decisions. A sought-after speaker in wealth management, Jonathan previously held senior roles in tax and estate planning at Arthur Andersen. He has a BS in Finance, an MS in Taxation, and an MBA in Accounting. Based on Long Island, Jonathan is active in the local business community, supports causes like the Middle Market Alliance and Sunrise Day Camp, and enjoys boating with his family.

RESOURCE LINKS 

Fusion Family Wealth - Website

Johathan Blau - LinkedIn

Fred Gold - LinkedIn

Please Note: No individual has been provided nor promised any direct or indirect economic benefit for sharing Fusion podcasts/articles/opinions. No post should be construed as any assurance that a reader will find the podcast/article/opinion beneficial.

Please click below for important disclosure information.

https://www.fusionfamilywealth.com/disclosures

A copy of Fusion's current written disclosure brochure discussing our advisory [00:00:15] services and fees is available upon request or at www.fusionfamilywealth.com.

Jonathan Blau: Hello everybody, this is Jonathan Blau [00:01:00] coming to you with another episode of the Crazy Wealthy Podcast. Thanks for joining us today. I have a very special guest who is someone who is near and dear to me. It's my father in law and his name is Fred Gold. Fred was a partner for [00:01:15] many years at Arthur Anderson who was Both in charge of the, the long Island what was called enterprise group, middle markets practice.

Fred Gold: Thank you, John. Pleasure to be here. Looking forward to it.

Fred Gold: This, this was circa 1969. And at the time they were, the big firms were called the big eight, which evolved later on to the big six, and [00:02:15] ultimately to the I think they

Jonathan Blau: call it now the final four.

The final. Could

Fred Gold: be. That could be.

Jonathan Blau: So when you joined Anderson, I joined my second year of life.

Jonathan Blau: And so tell me how, tell me how the job opportunity came about. I think you went to school, the University of Bridgeport.

Fred Gold: Went to the University of Bridgeport studied accounting.

And when I came out. I got, I started [00:03:15] interviewing with some of the big eight accounting firms, but in particular, my father who owned a gas station in Whitestone, Queens had customers he was pretty close to. One of which [00:03:30] was with Arthur Anderson for about a three or four year period at the time. And my dad mentioned to him, my son's returning from Vietnam.

But, you know, that's a thumbnail sketch of how I got to Anderson. No,

Or he was my mentor and he was just always so good to me or the [00:04:45] clients. One guy said, oh yeah, he was, I used to call him the gold standard, my accountant. So those things were always very very impressive and impactful to me. And I always try to, to kind of guide myself and my behavior to, to help people would think of me the [00:05:00] same way.

And I remember you calling me one day, I was a young advisor at 29, I think, or so at Sanford Bernstein or somewhere, somewhere in that age range. And [00:05:30] Even though I didn't have a lot of experience, we respected each other enough that you asked my opinion as to whether or not you should make the choice of leaving the retirement benefit for about 10 years as an unsecured creditor of the firm meaning that you're at risk if they would go [00:05:45] out of business of losing the, the entire thing.

And, and one of the things I remember discussing is is try to, we try, try to today, I maybe didn't, didn't term it the same way, but I tell people who have that decision tree to, to address is try to make that decision one where [00:06:15] there's big potential benefits. Of going one way with the decision, but there's also big potential detriments of going that way.

So my, my advice was something like, why don't you take half of the money now and leave half of it as an unsecured creditor. But to your, you know, this happens as a human nature kind of response [00:07:00] is something called familiarity bias. And when we Are familiar with, with a company or, or, or, or an entity that we're looking to invest in or, or, or associate with.

I know what I've worked here for 30 years. Tell me how that relates to, in your mind, the decision that you made that unfortunately didn't have a good outcome for you, but, [00:07:45] but to, to, to leave that money in, in the firm at 57. Okay.

And they gave you the option of taking it all. Of course, if you did, you'd have to pay. Tax on it or leaving it in and receiving, and I think at the [00:08:15] time a 9 percent interest factor. So over a 10 year period, that sum of money would grow substantially. And I sat at that point in time, looking back at history, knowing [00:08:30] here's a firm with 85, 000 people worldwide with over 2000 partners with a history of, I don't know, about 80 years at the time.

Jonathan Blau: Yeah. And by the way, your, your decision and that bias is, is not uncommon. It's more common than not. Most people make those decisions motivated or influenced by familiarity bias. And,

That other people That's what, look, if,

I mean, the odds of you saying yes to whatever XYZ company was is probably slim to none. Right? Yet, yet with the, the challenges we have with familiarity biases, [00:10:30] extrapolation, which is a big a big destroyer of wealth investing in other ways, we, we look at a pattern because our minds are attracted to patterns.

But I'm also going to talk to the partners who [00:11:00] have retired in the past, and they've been getting their checks, like clockwork every month, and everything's great. And I'm going to extrapolate that. Into the future as a future predictable pattern. And so that's what familiarity bias and recency bias does.

And the [00:11:30] other one is, is, you know, what I call regret aversion bias, where long term regret is one of the most painful emotions because long term regret never goes away. And when we make a decision. That causes us to regret it. Oftentimes what will happen is people [00:11:45] will revert to status quo bias. So in other words, if I made a bad investment in the late nineties, I bought all technology stocks and they blew up on me in order to avoid that potential outcome and that regret that I still feel today of having thrown away that money in the nineties.[00:12:00]

Fred Gold: I have not. I mean, I, I, I felt that this was such a, there was such a slim possibility of this happening and okay, it happened, but you know, as [00:12:30] many things in life, you try to evaluate And you know, now that I'm in retirement, I'm doing more trading of stocks and you know, I evaluate risk and I do put in certain stop [00:12:45] loss triggers to minimize my loss.

My loss. I wouldn't want to. You know, make an investment and lose 50 percent of it.

Jonathan Blau: And you would have done that anyway, without that experience. I think, yeah,

Jonathan Blau: sensitive to it. So I get it. And

Fred Gold: it didn't impact the experience of what we're talking about.

Jonathan Blau: is, which is good. Right. And one of the things I always admired about you is your temperament. In other words you, you faced what I call for most people, a catastrophic financial loss [00:13:30] and, and I've known you your whole life after that, right?

So when you were a senior partner at the firm from, from, from a, from a standpoint of of success as, as we all measure it in our [00:14:00] country as it relates to work is you achieved a lot of success. And that never really tainted you from my perspective where you never judged other people who might not have achieved the same success.

Fred Gold: Yeah, I'm gonna answer that in two directions. [00:14:45] One, if you're fortunate in life to have a good teacher. And I'm referring to my dad. He was my teacher. He taught me that do unto others as they would do unto you. Treat people with respect. And [00:15:00] always be careful about what you're doing. And do the right thing.

You can work [00:15:30] as hard as you have to work. You've got to do it. You do it. And you take care of your family. The second big factor, I guess, in my life that shaped my behavior is I mentioned earlier, I spent the year in Vietnam. I was in combat and [00:15:45] I, and I got very close with fellas who came from very different echo, sociological, socioeconomic backgrounds, socioeconomic backgrounds, [00:16:00] and I really learned that it's not how much money a person has.

And teaching me and guiding me. [00:16:30] And as I moved up I wanted to do the same things for people who work for me. And that's why mentoring people became at the top of my list. You get out of people, what you put into people and particularly in, in the business I was [00:16:45] in public accounting, the trust factor clients, you, you know, you tried to do the best thing you could for clients, you had the care you had to teach.

Jonathan Blau: Yeah, and learning that from you, you know, cause there's a people we are listening to my first podcast introducing the episode. I lost my dad when I was [00:17:15] 13.

What does your family do? And how much do you want, where do you come from? And I didn't [00:17:45] have the, the the most obvious. Obviously desired answers to those questions, and you never made any judgments, you know, you always accepted me and, and respected me and, and tried to teach me and so forth.

And I [00:18:15] met Amy after I made that choice, but you were a partner there. And I was going into the tax department, you were in audit, and I remember we used to go to Long Beach on the weekends and there was one weekend and you see, you talked to me in the garage on the way back from the beach and we got back and you said, we may have a little [00:18:30] problem because you know, Anderson has very strict nepotism and they're talking to me about our relationship and, and and there may be an issue.

And I don't know if you remember how I responded to that. You probably don't. I

Fred Gold: probably don't.

Fred Gold: I, now I remember that and I think I laugh pretty hard.

Yeah,

I don't think that you achieve success materially because you look too. I think you achieve success materially the same way I think I do. I love my clients. I learned that from you. I learned that from Anderson. We treat everybody like family, our employees, our clients. And then [00:19:30] it just happens, right? You put in the hard work and you have the right.

Because I'm not interested in telling people I stayed at a Four Seasons. I'm applying, I'm appealing to my internal benchmark, what's important to me. So many of us in our society, unfortunately, always appeal to the external benchmark. They'd rather stay in a, in a, in a [00:20:15] one bedroom at the Four Seasons so they can say externally, Hey, look, I, I took my family away for the holiday, stayed at the Four Seasons.

We want a bigger house so we can save, want to donate money and get our name on the [00:20:45] building. We want to become a CEO or president and so forth so we can say that. And, and then when you go to someone's funeral, what you really want to hear about is how wonderful person they were to their family.

In [00:21:15] terms of how, why are you, why are you able to have such a great temperament outlook? And not, why, why don't you worry about those things? You don't, you don't seem to care too much about what other people have. You live your life for absolute happiness, the internal benchmark. And, and no one [00:21:30] really teaches you that or maybe lessons from your dad and so forth.

Fred Gold: Yeah, it it was interesting. My father he learned to become an auto And at 21 years [00:22:00] of age, him and his best friend bought a service station, and he became somewhat of an entrepreneur that way, and he obviously served in World War II for four years, but as time went on, he became successful. [00:22:15] And he always watched his money, but he, he created a balance between, you know, saving some money, but spending some money, if you know what I mean.

So one day, one night after work, he picked her up, went to, I think it was a Pontiac [00:23:00] dealer. Pontiac is no longer around, I think. But And he still had his uniform on. And he had a lot of cash in his pocket and he saw a car on the showroom floor that he felt was perfect for my, my mom. [00:23:15] And a salesman came over and my father said you know, how much is that car?

The manager said, let's sit down, fill out [00:23:45] some paperwork. He bought the car. Cash. It was done. But it, you know, it all gets, and my father tells me this story because never judge a book by its color, right? You treat a man the way you want it or a woman, the way you want to be [00:24:00] treated regardless of what they look like.

And it's it's one of those life lessons that you never forget. And you obviously still remember the story.

So I'd like to finish up by asking you, and, and again, this is not whatever comes to mind, but it's, if you had to think about a pivotal, a pivotal event, [00:24:30] either professionally Personally, that influenced positively your, your career or, or, or your life most memorable has anything come to mind?

And I took a lot of enjoyment from that. And I got very close to the principal owners in the company. And I think the, the joy I got out of that is that I was [00:25:15] part of a team that helped create success. Not only for the owners, but for the many employees and their families that depended on a livelihood.

I tried to do the best I could to lead them, to teach them. And to this day, there's a number of folks who work for me who have become extremely [00:26:00] successful in running corporations or starting their own businesses or whatever, but, you know, I take pride in that. It's, it's almost like you know, you have a lot of pride in your kids.

Jonathan Blau: Yeah, and I, and I've heard from some of those people who credit you with a lot [00:26:30] of responsibility for their success and and so that's something to be very proud of and and I'm always very proud when I hear that about you.

Human nature often works. You also appeal mostly to your internal benchmarks. You want to do what's good for you and your family, you don't really care at all what other people might think about what what you're doing relative to what they're doing, or what you have relative to what they have. [00:27:15] And then the last thing I always say is, One of the things when I talk about money and happiness is, there's an equation, it's, it's what do I have in life financially speaking, minus what I want.

Fred Gold: exactly.

And I'm looking forward to the remaining years that the man upstairs wants to give us. And, [00:28:30] uh, no regrets. No regrets. No, that's, that's terrific. I've lived my life the way I hope a lot of people can live it, you know, just

So so thanks again for, for agreeing to be on the podcast today. It's great to great to have this conversation with you. Thanks again for listening to this episode of the Crazy Wealthy Podcast. You can access our podcast anytime on all your favorite [00:29:00] venues, including Apple, Google iHeart Radio, Spotify, and anywhere else that you like to get your podcasts generally.

But we decided today, since we're on our brief winter retreat in Boca Raton, Florida, we're gonna have a conversation just in our morning walk. Live,

Amy Blau: live, live from Boca.

Jonathan Blau: Live from Boca.

Jonathan Blau: So Amy, what do you have for me?

Amy Blau: Well, I want to know about how that conversation with my dad went.

His nature, temperament and humility. He did a great job, was [00:30:15] eager to talk about it, to kind of share some of the some of the biases that led him to unfortunately fall into a bad financial position at a high, at what was the end of his very successful career.

He was a mechanic. And he lost the sight in one of his eyes and at the age of 50, instead of staying on and [00:30:45] working for many more years, he decided to sell his gas station and kind of hang it up and that kind of led to a financial downfall for him that my father had to pick up the slack and then I watched it happen to him also.

Well, from my

Jonathan Blau: perspective, nothing could lead to resiliency more than 50 years or more married to your mom, but that's a whole other story.

Jonathan Blau: can share with you is he didn't mention a word about resiliency being born out of his exposure to your mother for 50 plus years, so.

He was the best. [00:32:00] And I said, you always cared about others. He just has that temperament. But he also said my greatest life lessons came from my dad and he almost was tearing because as you say we call him poppy. He was a mechanic, but your father didn't let him know he was running out of money. He just [00:32:15] kept sending him money and telling him, no dad, you still have money in the account I'm managing.

That's, that's unique about him. And that all came through in the podcast. One

And that's one life lesson I've learned from my dad. He is no more or less happy [00:33:00] than he was when he was making a million, you know, a million dollars a year.

Jonathan Blau: That's right. No, he's someone we talked about. So my recent podcast, I talked about internal and external benchmarks. So we want to show the world that we're staying in a fancy place.

But he, [00:33:30] he summarized what he illustrated through real life experiences is Familiarity bias, which leads you to make decisions to concentrate on things because you know them. Even though the risk is the same as if you didn't know him, that caused him to make that decision that Anderson [00:33:45] to leave his pension there regret aversion, which most people get impacted negatively because in order to avoid the regretting something from an action they took, they just never take any actions.

Amy Blau: So I'm going to end this by saying that when you said he's the gold standard, as far as Oh. accountant was, he was the gold, he is the gold standards as far as a man should be.

Jonathan Blau: that guy you just yelled at. What are you doing?[00:34:30]

Amy Blau: Everybody, if we don't hear from you or speak to you before the end of the new year, Happy holidays. Happy New Year. We wish all the best for you and your family.

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