Investing, Retirement, and Financial Confidence for Small Business Owners with Darryl Lyons

Want to make smarter money moves in your business? In this episode, Darryl Lyons shares essential strategies for small business owners and entrepreneurs on investing, planning for retirement, and understanding the psychology behind financial success.

What’s Covered in This Episode:

• Key financial strategies every small business owner should consider for long-term success.
• How to approach investing and retirement planning as an entrepreneur.
• The psychology of money and how it impacts your financial decisions.
• Darryl’s tips for managing business finances while planning for the future.
• Practical advice for achieving financial stability and growth in your business.

Darryl Lyons is the co-founder and CEO of PAX Financial Group, an Inc 5000 Company for 4+ years. He has over 20 years of experience in retirement planning, wealth management, and entrepreneurship, and holds multiple credentials, including Certified Financial Planner (TM), Behavioral Financial Advisor, Chartered Financial Consultant, and Accredited Investment Fiduciary.

Download a FREE E-book on Biblical Responsible Investing at https://info.paxfinancialgroup.com/ebook-offer-biblically-responsible-investing

Books mentioned in the episode: 

Small Business Big Pressure: A Faith-Based Approach To Guide The Ambitious Entrepreneur by Darryl W. Lyons https://amzn.to/3xPhWao
Biblical Responsible Investing: Insights for Kingdom-Minded Investors by Darryl W. Lyons https://amzn.to/3QaE19z
The Psychology Of Money: Timeless Lessons On Wealth, Greed, and Happiness by Morgan Housel https://amzn.to/3U0tMWg

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Thank you for listening in! See you next week.

Transcript

Darryl: [00:00:00] very smart people that retired very well almost all of them had made material decisions in their life about money that was directly related to something that happened in their childhood. And it wasn't as though like they made this really impactful money decision or career decision wasn't because they studied something.

They did the probability analysis. They analyzed it. They went to third parties. Pros and cons. No, just something in their childhood kind of nudged him that way.

It's time to reinvent.

priscilla (2): Welcome to Reinventing Perspectives. Today, we have an exciting guest. The guest you didn't know you needed to hear from is right here. Daryl Lyons. Thank you, Daryl, for being with us. CEO and co founder of a five time Inc. 5000 company Pax Financial Group.

[00:01:00] And Dave Ramsey refers to Daryl as the rock star of the financial world. I wonder what it's like to be a rockstar in the financial world, but you'll have to tell us Daryl, welcome and please introduce yourself.

Darryl: Thank you very much. I'm in San Antonio, Texas, and I have four children and we live in the beautiful Texas hill country. I co founded gosh, it's been 17 years now, a investment advisory company, and we have 25 employees.

We're responsible for managing about 700 million dollars in assets. , one of the key attributes of our organization is we serve those who want to work with somebody who honors Judeo Christian values and thinks deeply and cares deeply about those values. That's what we pride ourselves in doing for the body of Christ. 

priscilla (2): 17 years. Wow. That's amazing. Thinking of the small business owner, typically if you work for someone, you have a pathway to retirement. That's clear. When you work for yourself, Or you have started a business, you [00:02:00] typically don't think about retirement as much as you think about the other pressures of creating a successful business.

That's why I said, this is the conversation that you didn't know you needed. Please, if you can just , lead us into that, why retirement planning and why publicly responsible investing?

Darryl: Stephen Covey said begin with the end in mind. And the idea is, we start a business and sometimes it's to solve the problem. I solved the business. I wanted a better life. And so we all have these reasons for getting in business. And then we wake up and we're like, okay, now, how do I unwind this thing?

And it's not as though we don't think about it. It's just, we don't think about it deeply enough. And it's one of our most valuable assets. Some people that have assets some people don't. Maybe they have goodwill. I usually think if you're creative enough, you can figure out a way to monetize or sell the business.

But it doesn't always have to be selling. It could be just letting it slowly die. If you wanted to, you could do that and just I've seen some people just, start making it a part time gig and just unwind it slowly, which is fine. I think the reality is regardless of [00:03:00] how you exit, transferring it to kids, transferring it to key employees, selling it to key employees, selling it to a private equity for selling it to a strategic buyer or just slowly unwind it.

All of these options there's a lot of people involved and a lot of people depending upon that business owner. Whether it's family members or customers, clients, vendors, and so just being respectful of all these relationships and having some foresight of how to make this transition so that, everyone can transition with you, I think is just an honorable thing to do, and it takes time to think through that, and that's why we specifically, that's one of the services that we offer is try to help people Not only do the math on this problem, solving this problem, , that would be the quantitative side of it, but also the quantitative side.

What do you want your life to be like? And then we really try to work with the spouses because they have a voice too. It can be annoying , when a business owner retires and then they start changing out all the spice racks, are doing things and just annoying you.

And [00:04:00] so let's just think about that. There's the qualitative side. It's certainly a passion place for our organization and me personally, I, I started business, my brother did, my sister did, my parents just sold the business. We just want to help people do it the right way.

And there are plenty of wrong ways to do it.

priscilla (2): , you need to have a plan. And of course, we tend to deal with the immediate things and keep putting off thing that needs time to be prepared for. Maybe if you can give us an idea of, the common things that people think about when they think about retirement what should I be thinking in terms of how much money do I need, or when should I start?

And you're in business as a business owner., at what point do I start doing that for myself, or do I do that for my employees? if you can just talk to us, your experience through that.

Darryl: If you think about business finance, even life in general, there's climbing up the mountain, climbing down the mountain. If you're climbing up the mountain in the business, we call that the accumulation phase. I'll just touch on that real quick. Every business owner, [00:05:00] really everyone in general should be saving 15 percent of their gross income.

That's the top line number. I don't know all the international retirement government programs and the private sector programs. So I can't speak to all of them, but in the States, we have a 401k plane, it's a very tax efficient way to save money.

And finding tax efficient ways to save money that 15 percent , it should be a priority, even for business owners, because. You just don't know if the business is going to provide enough income for retirement. So squirreling away 15 percent just wise. That's the very basics when it comes to youthful enterprises, individuals who are just climbing that mountain.

Now, as you start to see the top of the mountain, so to speak I'd say it's a good idea to start thinking critically about it five years out because , that gives you time to sometimes adopt some tax planning things that [00:06:00] may be available. Depending of course, where you live.

I know the United States tax law fairly well, but internationally, you just have to unpack what tools are available to you. You need five years. Make those things useful for you, but you also need five years just to maybe practice. A lot of times as business owners, our identity is in our business and that manifests in the time that we invest.

Doing something different is somewhat awkward and we haven't really flexed that muscle. So maybe starting working outside of the home in either a nonprofit capacity, maybe, or maybe it's just recreationally. You've never really had a chance to do some of your hobbies.

Just practicing, we call that pivoting instead of retirement because retirement by definition is the disposal of an asset that's no longer useful. That's how they define retirement. And so rather than thinking about it, okay, my life's no longer useful, I would rather you pivot into the next chapter doing that in a way that you still [00:07:00] serve in a way that you still have purpose is important.

And the evidence and science show that if you don't go into this next chapter with Purpose with purpose for life. There's an exponential increase. I believe it's about 40%. Of course you could be wrong, but I don't think I'm far off. That you could have a stroke or heart attack. And it's a peculiar thing because spent all these years as a business owner and your identity is in the business.

And then the rug gets pulled out from underneath you. I've seen this like firsthand a lot. And it hits you and that just has a shock factor, almost like jumping into a cold pool on your body. We just want to prepare people for that and thinking through what not only how's the economics going to look and looking at the economics is important.

Paying down debt, squirreling away money. Thank you through the government programs, but also that other side we need about five years, I think to really think through it well.

priscilla (2): That's a good timeframe. I think, like you said, the unexpected happens, life happens while you're making plans, [00:08:00] right? So to always be somewhat ready. A term that I saw that people use behavioral finance. What does that mean?

Darryl: I'll answer it a little bit more wordy but I think it helps. For years, so my undergraduate is an accounting finance, and then I did some graduate work at Texas A& M law school. And Finish that degree with master's of jurisprudence. But I say all that because I really tried to understand the math behind finance.

That was important to me. I spent a lot of time understanding the math and it hit me sometime in my career that the math doesn't matter as much as behavior. It was unbelievable how I saw really smart, intelligent, cerebral people make stupid decisions with their money. It just bothered me because I felt like I was well equipped with my education, my formal education, even with what I read on my own, I thought I was well equipped to guide people.

But. They were just, and it's not [00:09:00] everyone. I even do it. in fact, this last year I just made a decision that I was like, man, why did I do that? I just wanted to find a way to help people make better decisions with money. there's an actual academic place for this and it's the collision of neuroscience, thinking deeply about what the brain does under certain circumstances, particularly stress.

neuroscience, not discounting traditional finance and then colliding it with psychology. So understanding how the brain works, understanding traditional finance, and then for me being able to communicate these concerns that I had and help people make better decisions. Behavioral finance is actually a pretty well respected area of education in the higher education system.

And you'll see a lot of it actually be adopted by financial institutions today, whether they talk about it, whether the consumer or the end user sees it. If not, I guarantee you in the background of a lot of these institutions, they're adopting [00:10:00] behavioral finance. They're trying to figure out ways to help the consumer make better financial decisions.

Now, sometimes it can be hijacked in marketing departments to try to get you to do things . But that's not the area I'm talking about. That's a whole marketing thing. What I'm talking about is the behavioral finance. How do you get people to not sell their entire portfolio and go to cash when the market's down, how do you reduce that probability?

When you're in a behavioral finance frame of mind through financial institutions, you think about, okay, how do I communicate with them? What do I say? What forms of communication. Do I follow through? What do I say? What do I not say? It's a very interesting place of study because people are so unique have a podcast called Retire in Texas and I interviewed about 50 people who've retired and I asked them questions I had a framework for doing this.

One of the things conclusion that I drew from all of those 15 very smart people that retired very well is almost all of them had made material [00:11:00] decisions in their life about money that was directly related to something that happened in their childhood. And it wasn't as though like they made money this really impactful money decision or career decision wasn't because they studied something.

They did the probability analysis. They analyzed it. They went to third parties. They, pros and cons. No, just something in their childhood kind of nudged him that way. And all 50 interviews that I did, you can see through the dialogue, that's behavioral finance, which is just a peculiar thing in life that we make these decisions based on these intangible, non academic sometimes heuristics, rules of thumb, like I was in a a cell phone store.

And the lady , she said, Hey, these iPods are on sale. And I said I didn't come in to get iPods. , sometimes I say I don't have the money just to say that. And what her response was you only live once now that seems like to anybody else, that's fine.

But me, behavioral finance guy, I'm like, that's [00:12:00] how people make decisions. Is these heuristics, these rules of thumbs, these things that they learned about in childhood, they don't, we I'm in this group, we don't even know it. And then we wake up and we're like, why did we make a bunch of bad decisions?

That's the area of behavioral finance and trying to course correct before we wake up and we're completely broke and wonder why we did it

priscilla (2): With the 50 people, is it that they try to turn around a negative financial situation in their upbringing or did they continue what happened in their upbringing? Just really interesting there.

Darryl: A lot of it had to do with if I could break it down this way. Some of them were protection minded. It was more about the state of mind. And some of them were more like spin thrifts 

they were like very comfortable. They wanted to spin. I guess you could put them in those two categories. There's probably one other category I'm thinking of Oh, like a giver. There's also this. So there was three different categories. I could put them in. They were really philanthropic.

They wanted to give and so these were [00:13:00] just habits. Was it like one decision? It was a series of habits that you could almost classify that person's a giver. That person's a saver and that person's spender, right? That would probably frame them up. But I'd ask him, I'd say like, why?

And I would do it a not so direct way, but. They were probably a saver because, parents didn't have any money and they were scared. They saw their dad file bankruptcy or something like that. So it wasn't like one event. It just became almost part of their identity and they didn't know that , and then what was really cool as I did these exercises.

Is I did another exercise behavioral finance exercise with them and I contrasted these styles With the spouses and when I said you're this is how you behave with money. This is how you behave They became almost like their eyes open and they said wow, this has impacted our marriage We didn't even know it because a lot of money fights A lot of marriage disruptions are because of money.

My main [00:14:00] point is it was less about a point in time of decisions, but more about the character of who they had become. And that was rooted in some of their early childhood experiences.

priscilla (2): Very interesting. I was thinking about that, to our listeners, that sort of understanding how. Your upbringing or your background has shaped your thinking around money would be very interesting. To think about nowadays there are all these apps where you can invest a fraction of a share or a fraction of a cryptocurrency it's accessible to the everyday person

I'm thinking about in the context of the market that we're in right now. The entrepreneur starting out or the small business owner starting out thinking, I'll just invest in Robin hood or just buy some cryptocurrency because I would think that the way.

The world is moving right now. A lot of people think about taking on those things to do them themselves through, the many ways that you can do it now. 

Darryl: Okay. Yeah. So , people that want to do it on their own they need three things. They [00:15:00] need the time. They need some knowledge of it. Just not a lot, but some knowledge and then the emotional fortitude.

If you don't have much money and you're just doing extra change, then I don't know. It's fine. But the reality is people who are really successful they hone in on their success. They don't piddle with nonsense. And I think the best thing to do is just invest in yourself and then squirrel away 15 percent and let it grow and don't try to mess with it.

Just find some good investments. They're not hard to find diversify real well and just let it go. What my experience has been, the people who over engage and just trying to do it themselves and try to find something that's going to get them rich, they never get rich.

And time goes by and years go by they really should have stopped and just made investments in their small business or in themselves academically. And then while they were doing that, squirreled away 15 percent in some diversified portfolio. Now there comes an inflection point where the money, it becomes a little larger and then you're thinking, Oh man, I don't want to mess this up because now I've got something to [00:16:00] lose.

you've got other things going on in life like a business and family, then that's when going to an advisor makes sense and outsourcing it to somebody like us. And so that way we can carry that burden for you. There's just that inflection point where you don't want to risk it.

Squirreling away, a couple hundred bucks, you're not going to hire an advisor to do that. But you'll know when you get to a point, you're like I don't want to lose it. I don't want to make a mistake. And that's different for everyone, that inflection point.

priscilla (2): Thank you for speaking to both the sides. Cause you know what the audience, you probably have people on the one side where things are just starting to roll. Okay. There's a little extra money coming in and they're like, okay, let me get in Robinhood or let me get into cryptocurrency.

And then you have the people who are getting to that point where it's okay, this is a lot of money. This is no longer me. Playing around with Ethereum and playing around with dodge coin or whatever. Cryptocurrency, and this is 2024, so I'd love to get your thoughts on cryptocurrency today.

Darryl: Like today it's down 10%, which is crazy in one day. really not a good crypto person. I can speak on it. I will tell you that we actually offer cryptocurrency. We're [00:17:00] one of the few RIAs that, I know that offers it and cold storage too. But I'm just not a fan and I've bought it and sold it all at the wrong times.

I'm just perfect at the wrong time on this stuff. I struggle with the application of it and I struggle with the opportunity cost. Just have a love relationship with businesses and that includes businesses that are publicly traded. And even sometimes I'll do privately held stuff.

My love for businesses doing good things and producing good products for good people. And creating jobs and then being rewarded for that as an owner is significant. And so allocating capital to something that doesn't really have a use case. I just struggle with just being an investor and something like that.

And I understand all of the logical, I've done a lot of research on crypto, a lot. And just haven't really found the love for it other than I hope it goes up and I make a ton of money. [00:18:00] And that's fine, but that's just not how I, Think about things that's a part of the idea of biblical responsible investing, which is something that we do is trying to own things that have as one of my peers says, makes the world rejoice and try to participate as an owner in those things because this whole system of the financial system is an amazing system that we can put capital in businesses and then they can grow and then we can be consumers of those products.

Whether it's. You know my cell phone or a computer or a car and I just love that. With all of its flaws. I think the system is actually beautiful because somebody like me who came from maybe not in good circumstances, I live in a little trailer park castorville 100 years ago , I'd have still been a serf or a peasant never with a mechanism or an opportunity to build up a net worth.

These capital markets have created that opportunity for everyone. I think almost everyone is without an excuse right now to be able to change their financial trajectories for their children and their children's children. It's a complete brilliant mechanism, obviously flawed. For [00:19:00] me, because I have that conviction and I understand how it works deeply, that helps too, because I understand it, it's always difficult when I try to explain it to somebody else and they don't understand it, they feel it's manipulative rigged against them.

For me, I understand it. I think it's brilliant. And I would rather be in that than crypto. And I understand there's trade offs there. That's how I feel about it.

priscilla (2): Daryl, sorry, I should have done this, but we should have gone into your story a little bit There may be someone who's listening, who says, okay I'm in a really tough situation, or I come from a really tough background. And they look at Daryl and they're like he can't possibly, come from a background like mine or anything that's tough to build what he's built and be who he is.

Maybe you can speak to us about that journey and As you built up as an entrepreneur, what do you think were the key things or the key shifts or inflection points?

Darryl: , my mom had me when she was 16, my dad was 20. It was tough, it was a grind financially. There's [00:20:00]times when my dad did pretty okay and then there's times when we just struggled. And it was just hard. It was harder , than I can really articulate in this short period of time.

But it impacts me today and, just little things. When you grow up without money, there's even kids, kids are kids. They pick on you and stuff like that. You don't forget those things. And I remember just trying to figure out one time, how do people make money?

that curiosity never stopped. And by the way, it wasn't as though I became curious about money and then all of a sudden I became rich, and rich is relative. I tell my kids we're rich it's because we live in the richest nation in the history of the world.

, we're rich relative to the rest of the world, I'm not lost on that fact. The reality is not as though I said, I'm curious about money and then all of a sudden I just started making money. There was this long grind. There was times where I had to go to the pawn shop just to have gas to get from point A to point B.

There was many tears, there was cars that didn't work, there was so many times I wanted to quit. I praise God for a spouse who said, I don't want you to quit, you have a [00:21:00] dream. And then you wake up one day and you go, I actually have a savings account. I never knew people had savings accounts.

Like, how do you have a savings account? Then you wake up one day and it's that thing that they say, it's like an overnight success, , it's just a grind. And so for me, if I were to tell anybody, I'd say just , keep grinding. Don't give up, don't give up, don't give up, don't give up.

And it does take time. It really does. Yourself with good people is really important. I'm not being a victim. I never was a victim. I never was like, Oh, what was me? I didn't have this or that. Never was a victim. I always. Try to surround myself with people that were exceptional.

I always try to do things that were over my head. I knew I wasn't capable of, I'd try it anyways. And it would put me in incredible opportunities and I'd learn and I'd fail and I'd learn, and so there's a lot of things to say about going from a place where I was to where I'm at today. I could, speak about that for nearly an hour, but I will tell you with full [00:22:00] sincerity.

That where I'm at today is a direct result of my Lord and Savior. A hundred percent, there's just so much favor and there's so many circumstances that had nothing to do with that he orchestrated. that's also important because in the midst of all the grind and all the worry I think just leaning onto him and being dependent upon him and abiding in him and trusting him and all those situations.

allows you to not digress into what most of the world does when things get tough, whether it's alcoholism or, other coping mechanisms. God is really a really healthy way to bring your worries beforehand and so grind. I used to always say attitude was mental toughness extra effort mental toughness extra effort But it's really that still exists but abiding as well.

John 15 5. 

priscilla (2): Thank you for sharing that, Daryl please, if you could give us one book that you would say, pick up this book and it'll help you understand [00:23:00] some things that will lead you to something else. Get you thinking about money differently, at least. So there's a seed in there. 

Darryl: Besides all of mine

priscilla (2): You could recommend yours too, we'd love that too. Which one should we start with in that case?

Darryl: For the small business owner, I did write one called small business, big pressure. And I go into a little bit more of my life story and then talk a little bit about what we talked about just briefly. I do unpack that a lot further. . My recent one is biblical responsible investing.

. How do we collide this idea of integrating our faith into our investing? There's one that's pretty cool that I'm looking at. The psychology of money. That one's a good one. really enjoyed that. I read that recently. So there's three, I think those are three good ones for anybody.

priscilla (2): Thank you so much for that, Errol. Thank you so much for your time. And I think there's a lot to take away from this conversation, really taking a look at when you start planning, you said you need at least five years, take five years to be practicing. And then five years really seriously planning about what you're going to do with your [00:24:00] retirement, as well as being conscious of what your background has led to the way you think about money.

And thank you for recommending those books as well. And speaking to the entrepreneur, think we've covered, if you're just starting to make money, it's all right, be tinkering and investing in the way that you do now, when you have enough money. Let's not mess it up. Let's get some professionals, good tax financial groups.

Let's get people who know how to handle big amounts of money to help you with handling money that you don't want to play around with. So thank you so much, Daryl. And if someone wanted to follow you or to be able to contact you, where online can they do their best? All right.

Darryl: LinkedIn is good for me. You can follow me there. And then, my retire in Texas podcast, you can pick up a lot of content there and packs.

Financial group is our website. Those are three places.

priscilla (2): Thank you so much for that. The listeners, please, if you want more info, please go to info. paxfinancialgroup. com. Thank you so much, Daryl.

Darryl: Yeah. Thank you.