Family, Fraud, and Financial Literacy: Life Lessons from Tim Smith | E49
What if your kids graduated from college knowing how to budget, invest, and avoid getting scammed?
In this heartfelt and wide-ranging episode, Deb Meyer sits down with Tim Smith, Certified Financial PlannerTM, founder of Aurora Private Wealth, and co-host of The Financial Dad podcast. They explore the critical (and often missing) elements of financial education for young adults, especially creatives and entrepreneurs navigating money on their own.
But the conversation doesn’t stop there. Tim opens up about a massive fraud case he witnessed firsthand — involving $15 million stolen under his watch — and how that experience fueled his upcoming book. You’ll also hear honest reflections on parenting, overcommitted families, building strong marriages, and redefining what “success” looks like in a pressure-filled world.
This episode is a must-listen for parents who want to make smarter financial decisions.
Episode Highlights
(2:10) How schools are failing young adults in financial literacy
(13:17) The real reasons behind investor fraud (and how to prevent it)
(21:48) What “custody” means in financial advising, and why it matters
(25:29) How to balance ambition with relationships, family, and self-care
(27:50) How couples can divide financial responsibilities based on strengths
Connect with Host Deb Meyer, CFP®
Founder of WorthyNest®, helping faith-driven parents build financial plans that reflect their values.
Schedule an Initial Meeting | Follow us on YouTube | Take the Financial Wellness Quiz
Full transcript
Deb Meyer (00:01.198)
All right. I'm excited to introduce today's guest, Tim Smith. He's a longtime certified financial planner and entrepreneur. Most recently in 2015, he started Aurora Private Wealth. Tim has been married to his wife, Tara, for many years and is the proud parent of three... Oh, 35 years. Wow. That's a big milestone. And is also the proud parent of three adult children. Just this year, Tim and his two daughters launched the Financial Dad.
Tim Smith (00:17.966)
35, 35, that's, it's, it is many. Yeah.
Deb Meyer (00:30.318)
podcast where they help young adults and creative entrepreneurs navigate finances. And Tim loves giving back to his community. He takes an active leadership role, both locally in New Jersey and nationally in the financial advisory community through FINRA district committee. Tim, welcome to the Beyond Budgets podcast.
Tim Smith (00:52.078)
Thank you for having me. It's great to be here.
Deb Meyer (00:53.856)
Yeah, so it's one thing to raise kids and then send them out into the world, but it's a very different matter to collaborate on a creative project after they've left the nest. I'm just curious, why did you and your daughters decide to start the Financial Dad podcast?
Tim Smith (01:09.826)
Well, you know, it was a confluence of things as it always is, right? Just to give you the background of this, I have a son also, the middle child is a son. And when he was graduating college about seven years ago, he came to me about a month before graduation and he said, dad.
Deb Meyer (01:13.923)
Mm-hmm.
Deb Meyer (01:18.616)
Mm-hmm. Okay.
Tim Smith (01:27.422)
We're about to graduate. We know nothing about personal finances. Could you come and give us a seminar of some kind? an educational session. Like what's a 401k? What's disability insurance? And just things that they had no concept of, honestly. And had just finished bachelor's and master's degrees and still nothing. So that's a problem. Separate problem. We'll get there. We'll get there.
Deb Meyer (01:33.602)
Mm-hmm.
Deb Meyer (01:48.354)
Well, they don't teach that in school, so yeah.
Tim Smith (01:53.14)
So I said, sure. And I went and I did the seminar and the kids were very appreciative. And my son said to me afterwards, dad, you should do this. You should put this out there for kids because nobody's teaching us this stuff. So that kind of germinated for a while. And in conversations with my two daughters, both of whom are
Deb Meyer (02:11.021)
Okay.
Tim Smith (02:16.822)
effectively self-employed. One is an actress with a couple of side jobs, as you might imagine. And then the other one is public relations and marketing, has a private consulting business for that. And they're both terrific kids. I have wonderful relationships with them, which is part of why it works. And if you watch the podcast, you'll see the chemistry and we just joke around and we're really a very close family.
Deb Meyer (02:29.805)
Okay.
Tim Smith (02:45.706)
And the kids are just, you know, I'm beyond proud of my kids, of course. So at a certain point it was, what are we going to do about this? You know, so we actually started by making some videos and we thought we would just market videos. So we professionally produced 23 videos on financial topics. You know, you can imagine the range. It was for high school through young adult, basically. And,
Deb Meyer (02:54.616)
Mm-hmm.
Tim Smith (03:13.502)
But we found that there was so much free information on YouTube that it was really not going to work trying to get people to pay for something that, you know, once they see a price, they can just go on YouTube and say, can I find this for free? And ironically, my son's job, he works at Google. He works on the search engine for YouTube. So my own son helps hurt me in my business endeavor. you know, I should have told him to, you know, delete that, right?
Deb Meyer (03:17.838)
Mmm.
Deb Meyer (03:27.896)
Sure.
Deb Meyer (03:31.18)
Mm-hmm.
Mm-hmm.
Deb Meyer (03:43.854)
Well, that's why you geared it not towards Google employees, but for creatives and entrepreneurs, right?
Tim Smith (03:43.874)
Just block these kinds of questions.
Yeah, yes, others, So we decided the podcast format would be better. We'd see, you know, maybe it can be monetized, maybe not. From my standpoint, it doesn't matter. I'd love it if my kids could make money from this. for me, this is a mission, you know, so, so.
Deb Meyer (03:53.058)
Get back at him.
Deb Meyer (04:04.142)
Mm-hmm.
Tim Smith (04:07.212)
because I really do believe that young people need far more education and not only about financial topics, financial literacy. I don't think we do a very good job teaching them a lot of things that are transferable skills within any career, any business career, any non-business career. I actually sit on the board of a college and a university.
Deb Meyer (04:20.707)
Mm-hmm.
Deb Meyer (04:27.086)
Mm-hmm.
Tim Smith (04:32.33)
And I'm pushing very hard for an element of the core curriculum to be business and life skill oriented. So it's things like public speaking they have, wellness they have, happiness they have. It's a very unique university. They're one of the few in the world that have happiness as a major and set the graduate levels. But I want it brought down.
Deb Meyer (04:41.134)
Mmm.
Deb Meyer (04:48.91)
Mm.
Deb Meyer (04:57.23)
Sure.
Tim Smith (04:59.308)
to the freshman level, you know, because why spend four years unhappy if you can study happiness, you know, at that point. I want to add other things like entrepreneurship and critical thinking, just as an example. There is no class in critical thinking. They hope we get it by osmosis.
Deb Meyer (05:00.525)
Mm-hmm.
Deb Meyer (05:07.022)
So.
Deb Meyer (05:10.402)
Mm-hmm.
Deb Meyer (05:14.424)
Mm-hmm.
Deb Meyer (05:21.006)
You
Tim Smith (05:22.028)
when we study something, they hope that they're teaching us critical thinking skills, but they don't put it out there and say, this is what critical thinking is, and you're not thinking critically, and here's why you're not thinking critically. So.
Deb Meyer (05:24.172)
Right.
Deb Meyer (05:37.699)
Mm-hmm.
Tim Smith (05:39.95)
And it's, I mean, in the business environment, obviously critical thinking is critical. And when you're working with a client, your ability to differentiate strategies and why one would be better than another for a given client, with all you know, you take all that information, you know about how it works, you distill it down, you look at the facts of the situation and you say, this is a benefit, this is a benefit, this is a benefit, this is a negative. On this side,
Deb Meyer (05:45.102)
Yeah.
Deb Meyer (05:54.008)
Mm-hmm.
Tim Smith (06:07.916)
this is a benefit and these are all negatives, therefore, this one's the better strategy, right? So that is what we do as financial planners, as financial advisors in our particular field, but kids aren't taught this. So, back to my children. They really wanted to do more, so we kind of talked about it and came down to the notion of a podcast, it's for all young people.
Deb Meyer (06:12.782)
Mm-hmm.
Deb Meyer (06:23.832)
Mm-hmm.
Deb Meyer (06:36.59)
Mm-hmm.
Tim Smith (06:36.994)
But in particular, it's for people who are sort of trying to make it on their own. So for example, we just shot a nine episode series on how to create a strategic plan for your business. Just the basic raw stuff, not a GM level strategic plan.
Deb Meyer (06:40.898)
Okay.
Deb Meyer (06:48.855)
nice. Great.
Mm-hmm. Mm-hmm.
Tim Smith (06:58.19)
I absolutely love it. I love strategy. I love everything about operating a business, all the creative thinking you have to do to problem solve and come up with solutions. Same as I've done in my career for clients and for my company. Individuals have to learn those same skills.
Deb Meyer (07:08.686)
Mm-hmm.
Deb Meyer (07:16.376)
Sure.
Deb Meyer (07:20.536)
Mm-hmm.
Tim Smith (07:21.214)
So that's kind how it all came about and the girls love it. My older girl in particular, I would say absolutely eats it up. She, I think probably uses some of it for her own clients and her own business because she markets to smaller businesses generally speaking.
Deb Meyer (07:24.898)
Mm-hmm.
Deb Meyer (07:35.565)
Hehehehe
Sure.
Mm-hmm.
Tim Smith (07:43.692)
Yeah, you know, the kids are wonderful. They love what we're doing and I love working with them. They are both very competent and organized. You know, nobody comes to the podcast unprepared. You know what I mean? you know, well, I think I know I probably cracked a whip on them or something, you know, if they did, but they come ready.
Deb Meyer (07:52.536)
Mm-hmm.
Deb Meyer (07:58.68)
Mm-hmm. Yeah.
Deb Meyer (08:05.198)
You
They know you mean business.
Tim Smith (08:10.466)
They come ready and they ask very good questions, natural questions that a kid their age would have about this stuff. And I think that's part of the beauty of it too. You you take an old guy like me with a lot of experience and you take young people who are experiencing life at this age, at their age, and have natural questions because they've heard some of these things or they've learned some of it but they really didn't understand it or it was never applied.
Deb Meyer (08:13.664)
Mm-hmm.
Deb Meyer (08:27.096)
Mm-hmm.
Tim Smith (08:38.412)
you know, now they gotta apply it. So it's a lot of fun and I'd like to think it's extremely informative also.
Deb Meyer (08:40.408)
to.
Deb Meyer (08:49.408)
Right? Yeah. Well, and it's important too, because there is a lot of noise out there. mean, there's a lot of people, some of these social media influencers that might not know what they're talking about. And they're out there grabbing, you know, lots of listeners and viewers on social media sharing bad information. So it's good when you can go to a resource, someone that's been doing this for many, many years has real life experience to be able to pass down some of these.
words of wisdom and just help prevent shortfalls.
Tim Smith (09:18.03)
Yeah. Young people today would think that crypto is the equivalent of investing your retirement money. If they had no other perspective. Because they get it in emails, get it in, you know, texts, they get it in social media. I mean, it's everywhere. I've seen some false profiles on Facebook.
Deb Meyer (09:28.046)
Yes, believe me. Sure.
Yeah.
Deb Meyer (09:44.782)
Mmm.
Tim Smith (09:45.806)
claiming to be, for example, Scott Bessent, the Secretary of the Treasury. And the very first post is about the quantum system and this and that and the other thing that, you know, and it's like they're obviously just defrauding people into believing that the Treasury Secretary is selling this whatever on the side. yeah, concepts like asset allocation, you know, mutual fund selection, manager selection, ETF selection from the investment standpoint of the world.
Deb Meyer (10:09.046)
Mm-hmm.
Deb Meyer (10:16.056)
Mm-hmm.
Tim Smith (10:16.11)
They're not taught and therefore they only know what they're hearing and so crypto crypto crypto crypto, know Bitcoin Ethereum it's just you know, I think it's very unfortunate and I but I blame the schools I Blame the schools because they're not preparing kids For adulting when it comes to these life skills
Deb Meyer (10:28.334)
Mm-hmm.
Deb Meyer (10:32.396)
Yeah.
You
Well.
Deb Meyer (10:42.986)
Mm-hmm. Yeah. Well, and I've had a couple of people on the podcast share some of their stories of homeschooling for that very reason where they just don't feel like the traditional school systems doing any favors for their kids and really trying to help give them life skills. One of the guys, Chris Baden, that I had a podcast with, I think it was episode 39, he homeschools his or he and his wife homeschool their
Tim Smith (10:53.443)
Yeah.
Deb Meyer (11:12.334)
young kids and they were already learning laundry skills at like age three which was mind-boggling to me. I'm like I can't even get my 15 year old to do his laundry at 15. But he's like it's about skills not about forcing them into chores. I'm like oh good rewording. I don't know they're a little old for this now but.
Tim Smith (11:20.174)
They should be doing their own laundry at 3.
That's great. That's a good one. I...
Tim Smith (11:33.794)
Well, I...
I go back to the schools on this and now I'll let them off the hook slightly.
Deb Meyer (11:42.925)
Yeah.
Tim Smith (11:45.414)
As, you know, we're trying not to be political. This is about something else other than that. as the basic underlying requirements of schools shifted over the last 40 or so years, it shifted from breadth of education on a lot of different topics, almost like liberal arts, you know.
in the grammar and secondary ages, it shifted to a focus on math and English scores and SATs for kids to get to college. Yeah, so the breadth shrank and the focus and the dollars and everything else, schools started to live and die by things like
Deb Meyer (12:14.562)
Mm-hmm.
Deb Meyer (12:20.206)
Mm-hmm. Mm-hmm. The tests. Yeah, right, Mm-hmm.
Mm-hmm.
Tim Smith (12:41.342)
do we appear in the top New Jersey high schools for SAT scores? We're not, we need to. So let's focus on this and this and the heck with anything that doesn't fit into that box. So real life skills, like what we're talking about, you know, they don't help the school, put it that way. And so that's my take on
Deb Meyer (12:48.974)
Sure.
Deb Meyer (13:05.419)
Mm. Right.
Mm-hmm.
Tim Smith (13:10.774)
sort of the why the schools don't emphasize these things. Because there isn't, yes, in fact it's a disincentive because they're struggling with the core stuff they're supposed to be providing. That's another, I'm sure you and I could spend a lot of time talking about that too. And the homeschooling folks, yes, yes, we'll stay away from that one.
Deb Meyer (13:14.862)
Sure, there's no incentive for them to do it when their funding is based on.
Deb Meyer (13:25.46)
Mm-hmm, mm-hmm. Yeah, a other issue. Wait, we don't need to go down that rabbit hole. So let's shift gears a little bit, because I know you were talking about having this podcast as more of a service mindset. obviously, you've had different leadership roles, both in the past and more recently. For someone who is a busy parent really struggling with
They just have a lot of time commitments, but they do have that servant heart. What do you suggest they do in terms of timing of getting involved in some civic or nonprofit leadership roles? Is it best to wait until the kids are actually older and out of the house? Or would you, how did you navigate that?
Tim Smith (14:08.237)
Yeah.
Yeah, so not well at points. You know, the biggest problems I ever had in my marriage were when both of us were going like this, doing umpteen things, still taking care of the kids, but not each other. You know, you start to lose the connection and the...
Deb Meyer (14:13.442)
Hmm.
Deb Meyer (14:23.336)
Mm. Sure.
Deb Meyer (14:29.94)
Right, not having time to commit to the marriage.
Tim Smith (14:34.958)
you know date nights go by the wayside and things like that, you know, so You know we made mistakes in our marriage because We both were very committed people and wanted you know, we we both had ambition in terms of not just career but You know helping and being and things like that. So the lessons for me of that have been
Deb Meyer (14:37.996)
Mm-hmm.
Deb Meyer (14:43.47)
Mm.
Deb Meyer (14:52.184)
Mm-hmm.
Deb Meyer (14:57.25)
Mm-hmm. Mm-hmm.
Tim Smith (15:04.086)
You know, I have to look at how much time I need for my work, how much time I need for my marriage, how much time I need for my children, how much time I need for myself, how much time I need for spirituality or, you know, whatever else I really think is important to have in my life. And everything else has to fit around that. So if you look at your life and you say, those critical elements are already filling me up.
Deb Meyer (15:16.355)
Mm-hmm.
Mm-hmm.
Deb Meyer (15:23.566)
Mm.
Deb Meyer (15:31.79)
Mm-hmm.
Tim Smith (15:32.258)
then you probably don't have time. something's going to give. Something's going to not get done well so that you can be on the PTA or whatever it might be. So I really think it is family situational dependent. as an example, some families have a breadwinner who is gone a lot of the time.
Deb Meyer (15:36.918)
Yeah. Yeah.
Deb Meyer (15:41.069)
Mm-hmm.
Mm-hmm.
Deb Meyer (15:51.0)
Mm-hmm.
Deb Meyer (16:00.558)
Mm-hmm.
Tim Smith (16:01.59)
So the other spouse, the partner, probably has to spend that much more time dealing with parenting. And that parent has even less time for him or herself and other things. So while that's going on, it's probably not a good time to be throwing yourself into all kinds of other things. Now I can tell you, when my kids hit their teens, there was this sudden, whew!
Deb Meyer (16:09.262)
Mm-hmm. Mm-hmm.
Deb Meyer (16:14.242)
Mm-hmm.
Deb Meyer (16:22.346)
another commitment. Right.
Mm-hmm.
Tim Smith (16:31.202)
Where the hell are the kids? You know... Well, we...
Deb Meyer (16:32.398)
They don't want to be with you.
I'm already witnessing that with my 15 year old so I can say it, not you specifically, just mom and dad.
Tim Smith (16:41.216)
We had no more weekend soccer tournaments, which used to eat up entire weekends on a regular basis. All three of my kids played soccer. All three of them played it at a, one of them played it at a very high level. The other two played it at higher than just a recreational level. They weren't state quality kind of people. But one of my, my oldest kid, Bridget, was on a,
Deb Meyer (16:46.968)
Yeah? Mm-hmm.
Deb Meyer (16:55.01)
Mm-hmm.
Deb Meyer (17:00.942)
Mm-hmm.
Tim Smith (17:05.74)
Team was number two in the state and 16th in the country or something like that at one time. And she was a speedy little tough little kid. And it's hard because she's really just such a pretty delightful young lady now. But she was pretty determined when she was playing soccer. But the point is that you spend your entire weekend.
Deb Meyer (17:15.772)
huh.
Deb Meyer (17:21.088)
Mm-hmm.
Deb Meyer (17:24.91)
Yeah.
Tim Smith (17:30.082)
driving to Delaware from New Jersey and one of us is off with that kid for that weekend and the other one's got the other two kids for the rest of the weekend and now we have no weekend together. Right? So even without other commitments, just if the kids are overcommitted, the parents can suffer in their relationship.
Deb Meyer (17:32.354)
Mm-hmm.
Mm-hmm. Mm-hmm.
Deb Meyer (17:41.485)
Right.
Deb Meyer (17:48.888)
Yeah.
Mm-hmm.
Tim Smith (17:52.406)
So I really, nobody has asked me, but if somebody were to ask me, do you think I'm ready to do X, Y, or Z, or get involved in this, that, or the other thing, my questions would revolve around how good is your relationship with your kids now? How good is your relationship with your spouse now? Is it very strong? Is it struggling? Is it okay? And set your priorities accordingly. That's how I would answer that.
Deb Meyer (18:08.536)
Mm-hmm. Mm-hmm.
Deb Meyer (18:14.786)
Mm-hmm.
Deb Meyer (18:19.394)
Yeah, well, I'm glad you said that because it definitely can get tempting, especially with parents that see their, you know, certain skills in their kids that they want to develop and cultivate. But I've noticed it a lot too, just how overcommitted so many families are, even just with kids activities, not necessarily the parents. And sometimes it is a combination of.
Tim Smith (18:32.632)
Yes. Yes.
Deb Meyer (18:46.176)
of parent activities, but just the kids' activities of shuttling around from one place to the other where there's just not that point of connection to eat dinner together more than once a week.
Tim Smith (18:55.022)
Yeah, yeah, I think there will be a book written eventually about our era and about how it was almost a mania that children need to be, you know, in 18 things so that they can get into the best colleges and so that they can get the best careers to the point where we've lost focus on really, really the things that matter.
Deb Meyer (19:00.172)
Mm-hmm.
Tim Smith (19:23.848)
know, divorce, I mean, I didn't get divorced, obviously, I'm still married, but, you know, we struggled to even figure out what is this that we're feeling? Why are we, like, kind of not, why is this not gelling right now? And, you know, so I just think there is such a premium with such pressure.
Deb Meyer (19:34.818)
Mm-hmm.
Deb Meyer (19:39.245)
Yeah.
Deb Meyer (19:49.784)
Mm-hmm.
Tim Smith (19:50.414)
There's such pressure on the kids. Social media puts enormous pressure on the kids. The college entrance process puts enormous pressure on the kids. And they can't be kids anymore. know, you know, God forbid they drink from a hose outside the house. know I mean? Things that I'm clearly gonna die young for having done when I was seven years old or whatever.
Deb Meyer (19:55.149)
Mm-hmm.
Deb Meyer (20:03.192)
Yeah.
Deb Meyer (20:08.014)
You
Deb Meyer (20:15.042)
Right.
Tim Smith (20:16.598)
So I think that's unfortunate too. this is, know, I'm actually now a grandfather also. And I think that, thank you, thank you. And I think that when, you know, when you see a second generation after yourself, you do tend to get more perspective. There's a certain, you know, self-examination that goes on.
Deb Meyer (20:19.928)
Mm-hmm.
Deb Meyer (20:26.446)
congratulations.
Tim Smith (20:42.702)
You say, what is that child's life going to be like? That child may see the 22nd century. You know, what will it be like for that child? And will all of the, this sort of the craziness that, you know, we sort of experienced today, is that just going to get worse and worse and worse? Or eventually are we going to come back to some basic values and say, you know, my family's more important to me than where I go to college. And, and you know, my, kids are more important to me than my job.
Deb Meyer (20:47.726)
Mm.
Deb Meyer (21:07.736)
Mm-hmm.
Deb Meyer (21:12.91)
Mm-hmm.
Tim Smith (21:15.682)
You know, and my wife is more important to me than my job. Ambition is less important to me than, you know, my job, my friends, the people I love. I'm at that lovey-dovey stage, just so you know. You know, I mean, I really appreciate now just being surrounded by people who are good, wholesome, loving people and who bring positivity into my life.
Deb Meyer (21:18.328)
Mm-hmm.
Deb Meyer (21:21.997)
Yeah.
Deb Meyer (21:29.772)
Mm-hmm. Yeah.
Deb Meyer (21:40.952)
Mm-hmm.
Tim Smith (21:44.846)
It's a different, it's very different from my 30s and 40s, I can tell you that.
Deb Meyer (21:49.23)
Well a lot of our listeners are in their 30s and 40s, so this is great that they're hearing this, you know.
Tim Smith (21:53.804)
Yeah, I hope I get to take take this old guy's perspective for a minute. Okay, a lot of this you think matters. It doesn't you know, you're a lot of young people today are getting like colon cancer and diseases that would never hit young people in my time, right so You know enjoy every day these these pressures these the you know
Deb Meyer (22:07.352)
Mm.
Deb Meyer (22:13.08)
Right.
Deb Meyer (22:17.816)
Mm-hmm.
Tim Smith (22:23.756)
Keeping up with the Joneses, the American dream, sort of, you know, we want to be more and more and more wealthy, quote unquote, successful. They're all really nice.
Deb Meyer (22:38.574)
You
Tim Smith (22:40.194)
But take it from a guy who's got a couple of houses all looking at water and, you know, have achieved basically my dreams in life. It's a little, it doesn't matter half as much as you thought it did. It doesn't bring half the joy you think it's going to bring. What brings you joy is being around people you love. That's the relationships, client relationships.
Deb Meyer (22:56.578)
Mmm.
Mm-hmm.
the relationships.
Mm-hmm. Family. Mm-hmm.
Tim Smith (23:07.938)
You know, I'm sure you have client relationships that are very long term, I do. And they're precious to me and family relationships, friend relationships. This is the stuff that sustains you in life. And honestly, will sustain you till the day that you pass away. Hopefully there will be a network of people around you when that day comes who grieve your passing and...
Deb Meyer (23:32.845)
Mm-hmm.
Tim Smith (23:36.482)
support you as you go. So, sorry to get so dark, but...
Deb Meyer (23:41.686)
No, no, I appreciate the perspective. And again, it's, I say a lot of the same stuff, even though I don't have, you know, quite the same life experience you do, but I, but yeah, I'm, I'm in my forties and, so I was like, but, but it is, yeah, I, I just feel like I'm going against the grain of most people in their forties because I'm like, let's slow down. Let's, let's just take it in and.
Tim Smith (23:52.814)
And you're younger, so... Ah! You're a babe. A baby, a baby, a baby.
Deb Meyer (24:11.948)
we don't let our kids do more than like one activity at any given time. And like our son works a part-time job and so he's not involved in sports and stuff. And if he were, it would be one sport at a time and no more than that. And yeah.
Tim Smith (24:15.158)
Yeah, yeah.
Tim Smith (24:22.796)
Yeah.
Tim Smith (24:27.374)
But you know what? That son is probably more likely to become an entrepreneur who will find his own way and will be a better problem solver because of it and will develop and hone a series of skills that most kids aren't forced to develop. Or avoid.
Deb Meyer (24:31.747)
Mm-hmm.
Mm-hmm.
Deb Meyer (24:38.486)
Mm-hmm.
Deb Meyer (24:45.07)
Yeah, yeah, well. Mm hmm. Yeah, like he started having an interest in learning guitar, so he used some of his savings from work and bought a guitar and has been teaching himself while watching videos and stuff on YouTube. And I'm like, that's cool. Like no one put pressure on him. No one, whatever. But just that's something he's taking into. OK, yeah, yeah. But then at the same time, he's like, hey, I want to try out for the baseball team, too.
Tim Smith (25:02.488)
That's great. Yeah.
I'm a musician also, so I can really appreciate that.
Deb Meyer (25:14.826)
Okay, go for it. As long as it's just not too much at one time. So, all right, cool. So let's talk, I know you said obviously relationships are important, but for families that are listening to this podcast, finances are still really important component of just making sure they have some protection for their family in place. How did you and your wife navigate family finances over the years? Did you always take the lead role because you're the certified financial planner or?
how was she brought into, Tara brought into some of those conversations.
Tim Smith (25:46.286)
So my wife was a CPA with Price Waterhouse. So I wasn't the only one. I wasn't, yeah. And I wasn't the only one with good financial bona fides. know what mean? So she's very good with money and finance. That said, like many partnerships, we eventually.
Deb Meyer (25:51.439)
nice, okay. So you're both math oriented.
Sure, sure.
Deb Meyer (26:05.762)
Mm-hmm.
Tim Smith (26:14.29)
after marriage, you know, developed a rhythm of work sharing, you know, and she took over the bills at some point. She unfortunately was in a terrible accident in 2002, a biking accident, so I took over the bills while she recovered and for long afterwards. She never came back to me and said, okay, I'd like to take over the bills again now, you know, but
Deb Meyer (26:21.08)
Okay.
Deb Meyer (26:24.846)
Mm-hmm.
Deb Meyer (26:33.922)
turn.
Deb Meyer (26:41.07)
You
Tim Smith (26:44.03)
I, her knowledge of broad financial topics is not like a certified financial planner's knowledge. So when it came to our insurance, when it came to our wills, when it came to our investing, she completely let me take the lead and say, okay, we need this, we need that, whatever. And she was like, yeah, if you say so, you know, even taxes because she was an auditor, not a tax parker, you know, so.
Deb Meyer (26:51.64)
Mm-hmm.
Deb Meyer (26:59.736)
Mm-hmm.
Deb Meyer (27:04.462)
Mm-hmm.
Deb Meyer (27:10.337)
Okay.
Tim Smith (27:11.946)
her knowledge of taxes is not mine either. Yeah, and I don't know general accounting principles the way she knows. Generally accepted accounting principles, gap. So, you know, I think it would be fair to say that we bobbed and weaved and worked it out over time, took advantage of wherever somebody had the greater skill set, that person handled that part of it. I'll give you great example of that.
Deb Meyer (27:14.168)
Pretty limited, right?
Deb Meyer (27:20.716)
Mm-hmm. Mm-hmm. Right. Right.
Deb Meyer (27:32.898)
Mm-hmm.
Tim Smith (27:41.876)
where she is stunningly good is negotiating a deal, like a car. I hope never to have to negotiate against her, you know, for anything major in my life. She's very good at that. She's very good at logistical things. How to set it up, how to make it work, how to, you know, she's really, really good with just, if we're going to go on a vacation, how should we plan our time?
Deb Meyer (27:46.89)
okay. Uh-huh.
Deb Meyer (28:01.176)
Mm-hmm.
Mm-hmm.
Deb Meyer (28:11.086)
Mm-hmm. Mm-hmm.
Tim Smith (28:11.502)
And I'm terrible at it, number one. Number two, I really don't have the patience for it. I, you know, it should be like, oh, we're going away for 10 days. You got to take this book. You should read all about Italy or wherever it is we're going to go. I'm like, yeah, no, just, just show me when we get there. You know, like whatever you want to say, I'll go. I think, I think we went to Italy. think I said I wanted to see two things and, you know, she basically planned the rest of it. So, you know,
Deb Meyer (28:15.982)
You
Deb Meyer (28:24.301)
Mm-hmm.
Deb Meyer (28:28.482)
Yeah. Yeah.
Deb Meyer (28:38.478)
Well, you know your strengths and you know what you guys enjoy. for any couple, and again, most couples are not going to have a CPA and a certified financial planner in the family. even just knowing naturally, okay, if you're an engineer and you're mind, you know, really detail oriented, you might enjoy tracking the budgeting and really looking hardcore at cashflow, but your spouse might enjoy more of the investment monitoring, investing decisions.
Tim Smith (28:43.234)
Yes. Yes.
Tim Smith (28:48.972)
Well that's, yeah.
Tim Smith (29:05.462)
Yes, yes, absolutely. You're right, in every partnership you try to take advantage of the strengths of each and mitigate the weaknesses of each. So, you know, that's how we've tried to do it anyway. We're still here.
Deb Meyer (29:14.04)
Mm-hmm. Okay, great.
Deb Meyer (29:18.976)
Yeah, yeah. So I'm curious, I know you have an upcoming book. When is it going to be released and what inspired you to write it?
Tim Smith (29:30.13)
I actually have two books, but one is about politics. So let's put that one aside. So I wrote a political column for six years. So I have something like 130 columns and I'm just compiling it. But the book that I wrote is about investment fraud by investment advisors. And the working title is 50 ways to protect yourself against.
Deb Meyer (29:36.6)
Okay.
Tim Smith (29:57.266)
know, fraud by an investment advisor. And it came about because I got a phone call one morning from my compliance officer saying, Tim, there may be some money missing from a client account, you know, when will you be in the office kind of thing? And I'm like, you know, 20 minutes, how about that? And it turned out that a guy, so I have, you know, roughly 50 offices around the country and 100 plus financial advisors.
Deb Meyer (29:59.673)
Mm-hmm.
Deb Meyer (30:10.948)
wow.
Tim Smith (30:24.814)
One of them this is 15 years ago now one of them had stolen About 15 million dollars of customer money on our watch I'll put aside all of the anger betrayal Horror I felt that a client of my firm clients of my firm had
Deb Meyer (30:33.586)
my gosh. Wow.
Deb Meyer (30:39.918)
Sure.
Deb Meyer (30:47.16)
Mm-hmm.
Tim Smith (30:48.31)
are going to have to go through this experience and probably not get all of their money back because we don't happen to sit on $16 million in my company that we're ready to parcel out.
Deb Meyer (30:49.998)
Sure.
Deb Meyer (31:00.14)
Right, cut a check.
Tim Smith (31:06.958)
His fraud was somewhat sophisticated. It wasn't the most sophisticated fraud, but he created fake statements. He got clients to sign paperwork that gave him standing, what are called standing third party transfer instructions. And this whole area has been cleaned up and tightened up a lot in the last five or eight years. But back then it was a little open and we had a custodial firm at the time that
Deb Meyer (31:26.766)
share.
Tim Smith (31:34.356)
handed him the form that didn't say to the management of the company, are you okay with this guy having third party transfer authorization on customer accounts? They just gave him the form and he filled it out, had people sign it, they didn't know what they were signing. That gave him the power to move money out of their accounts. And then he would send them fake statements.
Deb Meyer (31:43.086)
you
Deb Meyer (31:52.588)
Mm-hmm.
Mm.
Tim Smith (31:56.43)
And if anybody questioned it, he would say, let me check on that for you. He'd call them back in two days and say, you know what? Yeah, something went wrong here. I'm going to ensure that your money gets put back in your account. And like any Ponzi scheme, it runs out when you run out of other people's money. So there came a point where he could no longer take from one person's account to replace money in another where somebody had figured out money was missing.
Deb Meyer (32:11.628)
Mmm.
Deb Meyer (32:20.512)
Assuring. Right.
Tim Smith (32:23.694)
And people don't figure out money is missing because they don't pay attention to the statements or they get a statement from their advisor and never double check it, never confirm against their clearing firm statements. They don't even know what a clearing firm is. They don't understand what the language means. So we have a lot of language in our industry that we think everybody knows what this means. And a lot of people don't. Custodian, what's a custodian? What is custodianship? What is custody?
Deb Meyer (32:28.27)
Mmm.
Deb Meyer (32:39.97)
Mmm.
Deb Meyer (32:52.504)
Mm-hmm.
Tim Smith (32:53.036)
So the book is about what custody is, basically, and that most frauds happen when someone gets custody of your money, either because they've made it disappear from your account while making you think it's still there, or fake statements, or they have convinced you that they are gonna create the Tim Smith Micro Cap Fund,
Deb Meyer (32:56.206)
Mm-hmm.
Deb Meyer (33:04.173)
Mm-hmm.
Deb Meyer (33:11.192)
Mm-hmm.
Deb Meyer (33:21.934)
you
Tim Smith (33:22.742)
where you put $100,000 with me and 10 clients do that and we'll seed, we'll have a million dollars, we will seed $50,000 investments in small businesses, in local communities that really need the help and la la la la la. Great story. Once the money is in an account controlled by the advisor, all bets are off.
Deb Meyer (33:27.234)
Mm-hmm.
Deb Meyer (33:36.194)
Mm-hmm.
Deb Meyer (33:40.344)
Great.
Deb Meyer (33:47.202)
Mm-hmm.
Tim Smith (33:47.522)
you know, unless there is a, someone controlling that account other than the advisor, which is rare, or b, an audit, which is rare. I mean, most clients would never think to say, is this gonna be an audited fund? Have you had an audit yet? So it's things that I know now.
Deb Meyer (33:54.082)
Mm-hmm.
Mm-hmm.
Deb Meyer (34:03.726)
Mmm.
Tim Smith (34:12.6)
from A, having designed systems to protect customers against these things, B, having experienced what people can do to steal money, and C, seeing the fallout from theft. That's what all came together and made me write this book. And in answer to your question, I'm hoping probably this fall that it'll get out.
Deb Meyer (34:17.581)
Mm-hmm.
Deb Meyer (34:21.262)
Mm-hmm.
Deb Meyer (34:30.063)
Mm-hmm.
Deb Meyer (34:34.647)
Yeah.
Deb Meyer (34:39.821)
Okay.
Tim Smith (34:40.046)
it may have a formal publisher if it doesn't I'm just gonna put it out on Amazon and you know because again this is mission for me if I don't expect to make money from a book like this you know like I'm not gonna go I'm not gonna retire on my royalty checks you know so so yeah I'm very but I am very I'm still as as livid today as I was back in those days when I found out
Deb Meyer (34:44.961)
Mm-hmm. Mm-hmm.
Deb Meyer (34:50.413)
Mm-hmm.
Deb Meyer (34:54.286)
Sure.
Tim Smith (35:08.748)
what this guy had done. And in my time, I have seen it three or four times in various, much smaller, varying approaches. Not always people that I had under me, but sometimes tangential to us. you know, unfortunately I've experienced it over and over and it's something like,
Deb Meyer (35:19.256)
Sure.
Mm-hmm.
Deb Meyer (35:30.178)
Hmm.
Tim Smith (35:38.286)
a $40 billion a year problem. If it is that big, is a bigger problem than the Nigerian email fraud and the, you know, all these phone calls, scam calls out of India and stuff like that, identity theft. It's actually bigger than that. Now that's based on FBI statistics where they said
Deb Meyer (35:56.514)
Mm-hmm.
Mm-hmm. Wow.
Tim Smith (36:08.238)
Here is the amount in think 2018 that we uncovered as having been stolen. We think we're only getting back about 90%. We're only, you know, that we think this represents about 10 % of the total amount of money stolen in a given year. We don't hear about it in part because where the big money is stolen, the people involved are so embarrassed that they don't even want to go public with it. So.
Deb Meyer (36:34.2)
Sure.
Tim Smith (36:35.084)
You know, as it Shohei Otani is a baseball player, a pitcher slash outfielder, great hitter, making millions, came from Japan to the United States. I he plays for the Dodgers, makes millions of dollars. And he had some guy working with him, not as a financial advisor specifically, but some sort of, know, paying bills or something like that. Interpreter, it was his translator.
Deb Meyer (36:43.619)
Mm-hmm.
Deb Meyer (36:59.598)
Mm-hmm.
Tim Smith (37:04.43)
and the guy stole at least a half a million dollars from them. don't remember the exact amount. And these things happen when you give other people custody, signing power over money in some way that you have. I actually thought about creating a business that would just handle...
Deb Meyer (37:09.826)
Wow.
Deb Meyer (37:19.096)
Mm-hmm.
Yes.
Tim Smith (37:30.638)
custody for very wealthy people. Meaning, like if they want to turn it over to the business manager, that's fine, but the business manager has to get the approval through us to send money anywhere. The way it works now is if you're Harrison Ford and you have a business manager that takes care of all your financials, you don't sign checks and pay the mortgage. You know what I mean? Somebody else signs all that, takes care of all that. Well, those people have access to your money and can steal it.
Deb Meyer (37:33.614)
Mm.
Deb Meyer (37:43.064)
Mm-hmm.
Deb Meyer (37:52.49)
Right, they're the ones.
Yeah. Yeah.
Tim Smith (37:59.712)
So a lot happens that we don't hear about. And it's a really...
Deb Meyer (38:06.584)
Well, you need to have a checks and balances system. I mean, if you have someone that's there to be your daily money manager, you have to have someone else independent from them, not the same company that's gonna be outside looking in, seeing, okay, is this all legit? Where did some of these, do these numbers seem normal or, and have reports and deliverables and, yeah.
Tim Smith (38:09.933)
Yeah.
Tim Smith (38:26.412)
Yeah, and they don't. And they don't. They have a family office. The family office has a bill paying capability. That means that they typically have power of attorney to write checks or wire money. And once you've given that to some third party, if there is no, you know, it's fine if you say, send $30,000 to my kid. need, you know, they're going to buy a car. Okay, that's fine. But the same, I could send $30,000 to my kid.
since I can send it to your kid if I have custody of your money, if I have power of attorney over your money. And by the way, know, 30,000 may be a rounding error in the wealth of some people. So it just simply would never be noticed. You got a billion dollars, 30,000, you know, it goes up and down every day. $30,000 is easy to miss. So yeah, that's the problem there. And that's why I wrote the book about it.
Deb Meyer (38:56.184)
Mm-hmm.
Deb Meyer (39:00.568)
Right.
Tim Smith (39:24.504)
you know, again, hopefully this fall. If anybody wants an advanced copy, a manuscript copy, I'll be happy to send it now. I'd love to get feedback or anything like that. So if your listeners ping you or me and want to get some help, happy to send it now.
Deb Meyer (39:26.645)
great.
Deb Meyer (39:30.574)
Mm-hmm.
Deb Meyer (39:41.838)
Okay, great. Well, we do need to wrap up the interview, so tell listeners where it's best to find you online.
Tim Smith (39:48.504)
Yeah, great. So on YouTube, the Financial Dad podcast is youtube.com slash at sign the Financial Dad. All squeezed together. That's our handle on YouTube. On my work life, it's www.aurorapw.com. And if you want to copy the book, you could email me, tim at aurorapw.com. Happy to.
Happy to send anybody a copy of it now as it stands. Like I said, looking for feedback.
Deb Meyer (40:22.966)
Okay, well thank you so much. It was great having you.
Tim Smith (40:26.104)
Thank you for having me. I really enjoyed the conversation. Thanks a lot.
Deb Meyer
Don't go anywhere yet. I did want to give a couple of comments on this great episode with Tim Smith. What we were talking about at the end of the episode around the investor fraud, I do want to share some thoughts on that because I think it is an important area. And Tim pointed some of these things out, but first and foremost, not every investment advisor is a bad actor.
So even though his book is trying to bring that to the forefront as an issue, and it is obviously a serious issue for those advisors that are bad actors and that are trying to steal client money, the vast majority of us are honest, trustworthy people that really believe in keeping our clients safe and that includes their money. So I just encourage you as you're discerning, working with a financial advisor or an investment advisor,
really understand who they use as the custodian, that it has to be an independent custodian that issues its own account statements separate from the advisory firm. Within that capability, you also want to make sure if there are authorizations with the advisory firm to move money on your behalf, that it's going to an account that you actually own.
So in this case, like I use Altruist as our custodian for Worthy Nest and within Altruist at the account opening we can designate accounts to have linked external checking or savings accounts and the client's going to either see that link and approve it or
add their own links, but either way there's a level of authorization there that the client has to have. So it's not going to be an account in my name that I'm trying to link it to on the client's behalf. So that's an important distinction. If you're ever working with an advisor, just really important to make sure that there any kind of links of money movements are to accounts that you own and not owned by some entity or some fake name.
Okay. Another important point that he made was around custody. And when he was talking about some of the private or illiquid investments, like forming a mutual fund under the advisor's name, something or not even a mutual fund, just let's say a large cap equity fund. The issue there is that there's no independent person coming in and verifying that there's any kind of annual audit. There's just no outsider perspective looking in. It's whoever that person happens to be aggregating the money and funds. So they should be using some kind of fundraising resource like an online portal where the attorneys are reviewing documents and making sure that subscribers have everything in good order.
There should be surprise annual audits for any investment advisory firm that does accept custody of their clients' assets directly. I don't accept custody for the reason of I don't want to have even the appearance that I could be stealing client funds. So I personally never accept custody, nor my firm doesn't accept custody of client funds directly. Even if a client says, hey, I would love for you to be a trustee of my trust because I trust you like I would a family member. I don't accept trustee for that reason unless it's in my case, my dad, you know, I could be trustee for him, but hat's because he's family, not because he's a client.
Those are some of the situations where I would just say, be careful and cautious if you are evaluating investment advisors or already working with one. You always want to make sure there's an independent custodian who's separately sending statements and that you have access to see those accounts at any given time, that there's some other technology or portal where you can go and see exactly where it is verified by a third party that's not the advisor that you're currently working with.
Okay. The only other thing I wanted to highlight there at the beginning, we were talking a little bit around education. And again, this is not a political discussion. I know Tim says he's also writing a political book and I don't technically know his political vantage point. I was bringing him on as a guest more from the finance standpoint. But there are issues with every form of schooling, right? It doesn't matter if it's a public school, a private school, whether that is a private Christian or a Catholic school, a home school. There are all kinds of different school options. Everything has its advantages and disadvantages. We're just saying at a holistic level, a lot of young people, teenagers or young adults really aren't prepared well within the school framework for the personal finances discussion. That's just the main point he was trying to get across with Financial Dad podcast is being a resource for young people to really get good education around finances, especially if they're entrepreneurs or freelancers. Okay.
I hope this was a helpful episode for you, and yeah, I enjoy any feedback. Feel free to email me at info@worthynest.com. Thanks!