More About Derek
Thanks for taking the time to learn more about me. Check out the following stories to get an in-depth understanding of my history and background, and how I came to be doing what I'm doing.
"The Unlikely Lifelong Student"
I'm running away from a neighborhood bully for the third time this week. Growing up in a poor, rough neighborhood means that I have to get used to running. Later today I'm going to ride my bike through Moorhead State's campus. It's the closest I think I'll ever get to college. My upbringing and going to college don't go together.
High school is pretty easy for me. I start working a lot of hours in my junior year and even more during my senior
year. School becomes optional. I make new friends at the restaurant and learned about parties, making school a passing thought. I've turned into the stereotypical neighborhood kid with no college in sight.
A couple of years after high school I'm still working at the restaurant, and I realize I have to learn how to make money another way. I don't like being hot and greasy all the time. I remember having conversations with my
grandma who told me there was an architect in the family, and that sounds fascinating. I would have to drive an hour to get to the tech school that offers architectural drafting, so I study mechanical drafting instead. I attend Northwest Technical College (now Minnesota State Community and Technical College) and get an Associate's degree. In an ideal world, I would go to work for an engineering firm. I don't. I intern at a place where I draw toilet stalls.
I take some liberal arts courses from Minnesota State, which is the same college I rode my bike through as a kid. I love these classes, so I transfer there, pursuing a degree in finance, but later switch to economics after falling in love with it. In college I get to travel to New York City, my first time in an airplane at 24 years old, to present research I did. I also get a research paper published.
I move to suburban Minneapolis and get a job at an investment firm and start focusing my energy on a professional designation called the Chartered Financial Analyst designation, or CFA for short. The CFA designation is an investment-centric designation that has been compared to a Masters degree in applied finance. While studying for it, I also start studying for a designation that specifically covers my job function, the Certificate in Investment Performance Measurement, or the CIPM designation.
Now it's 2012, and I'm working for an investment advisor to create financial plans. It now makes sense to learn more about non-investment-related personal finance material. My boss tells me if I'm going to learn the material I might as well get a designation, so I study for the CERTIFIED FINANCIAL PLANNER™ designation, or the CFP®.
Several years later, I find myself at a three-day seminar on how to better communicate. It's led by Dr. Ted Klontz who, along with his son, Dr. Brad Klontz, started Financial Psychology Institute and teach courses at Creighton University. I decide to continue my training in financial behavior, financial psychology, and behavioral finance because so many people experience deep emotions when it comes to their money. Just knowing what to do isn't enough. I earn a Graduate Certificate from Creighton in financial psychology and behavioral finance, as well as the Certified Financial Behavior Specialist® designation from Financial Psychology Institute, known as the FBS® designation.
As I look back, I feel a lot of gratitude for my journey. I was a poor kid from a poor neighborhood who was never going to go to waste my time going to college. Now I have three degrees and four professional designations and consider myself a lifelong student who loves learning.
"Impact Over Status"
It's early 2018. I'm the Director of Wealth Management at a financial planning firm in suburban Minneapolis. I make more money than I ever thought was possible when I was young. By my calculation, I can retire in less than ten years, by age 47. The thing is, I have to quit; I'm miserable.
Fifteen years earlier, I started attending college and eventually found myself studying economics. Besides being fascinated with the problem-solving and analytic nature of economics, I figured it would be my ticket to making a lot of money.
After graduating, I move to the Minneapolis-St. Paul metro area in Minnesota. I get a job at an investment-
management firm. Working with investments, I think, is my foot in the door and my path toward earning a high salary and getting a high-powered job. After working there for about five years I make a move to an investment consulting firm, analyzing investment managers. From there, I take a job at a large corporation working with investment performance, and then an investment advisor, where I work my way up to Vice President. I earn significant raises with each move.
After five years with the investment advisor, I have a realization. Even though I make significant money and have a great job, I am working exclusively with extremely wealthy people. Money is challenging for everyone, especially for those who are not millionaires, yet I work only with multimillionaires. If people like my clients don't get good advice, perhaps their grandchildren's lives will be impacted. If people in the other 98% don't get good advice, their life won't be fulfilled. If I can turn my upbringing into a life lived on purpose, why shouldn't I help others achieve that?
I leave my Vice President gig and my six-figure salary to start my first firm. A few months into starting my firm, I was recruited to the Director of Wealth Management role. This role pays more than my Vice President role did, and I slip back into my money-seeking ways and take it. Unfortunately, it doesn't take me long to realize I am doing the same thing as before - working exclusively with the ultra-wealthy. Even though I can retire within a decade, I have to quit. I would rather spend the next 30 years facilitating financial health than the next ten years doing administrative chores.
For the second time in a year, I'm walking away from a high-salary position to start a firm dedicated to helping the other 98%. I realize there is a lot more to life than making money and having an impressive title. I understand that people need help to develop a healthy relationship with money, and I'm in a unique position to be able to help them do that. I am leaving a lot of money on the table to help others live their lives with purpose, intentionally, and with more mindfulness. I wouldn't change a thing.
Derek's Personal Life
"Living Life on Purpose...Eventually"
It's 1995, and I get my first real job. I work at a local private college in the summer, cleaning the dorms for next year's students. I'm 15 years old and I am making money, which is good because there really is no other way to get my hands on any. I used to do household work for my grandparents, but it was only for $5 or $10, and they lived right next to a convenience store that got all my money in exchange for sugar. Now I get paychecks. I am now able to buy my own clothes. I can try to fit in. I can buy toys and video games. Everyone else just seems to get this stuff, but I have to work for it.
Sadly, it's only a summer job. The job ends and I go back to school, but in the spring I turn 16 and can get a job working regular hours. I get a job as a dishwasher at a local family restaurant. I make $4.25 per hour, and I work a lot. I make what I consider to be a lot of money. I work from 6 pm to 4 am on weekends. Later I become a cook and work from 5 pm to 3 am. Sometimes I get the graveyard shift, working from 11 pm to 7 am. When we are short-staffed, I work from 5 pm to 6 am. I'm happy to do it because overtime comes easily. I love overtime. It means I get to make more money and I have less time to spend it. If I have free time, I spend my money. If I'm working, I can't spend it.
After moving to the Minneapolis-St. Paul metro area, I get my first salary job at an investment firm, and thus started my path toward figuring out how to trade my time for money in a world where I wasn't paid hourly anymore. I study on weekends for various designations. I spend my nights learning how to master Excel or automate tasks with computer scripts.
For nearly 25 years I trade my time for money. For nearly 25 years I react to what life throws at me. I never plan. It wasn't until college I was asked what I wanted to do. I had no idea; I've never been asked that before. I wanted to be told where to go and what to do.
Now I structure my life around what is important to me. I value outdoors, fitness, adventure, autonomy, and mindfulness. Along with my wife, I plan out a life that we want to live, and we revisit that plan every year. I'm not jealous of others anymore, because I know what I want out of life. My wife and I live proactively, intentionally, and on purpose. We align our use of money with what's important to us, and we live the best life we can with the money that we have.
Derek and Money
"Money Can Buy Options, but Not Fulfillment"
My mother had me when she was a kid and raised four children as a single parent. Having to grow up in poverty will have a profound impact on my eventual view of money. I learn many things that most people don't have to learn. I learn what to do when the electricity gets turned off in the winter in North Dakota. I learn what to do when the landlord comes looking for rent. I learn how to run interference when bill collectors call. I learn how to manage nights without supper.
I'm a boy, and my grandfather pays me $5 to do outdoor chores around the house. This is my first experience with earning money or even getting money. There isn't much money to go around and what little money my mother has goes toward feeding us and keeping the lights on. I spend my grandpa's money just as fast as he gives it to me. Saving isn't something anybody I know does, so I never learn how, nor how important it is.
It's now the late 80s, and I'm able to get karate lessons. I wear sweatpants and a t-shirt to class, but everyone else has white uniforms on and belts. I'm curious when I will get my uniform and white belt. I'm uncomfortable and embarrassed being the only one without one. Finally, I find out that the uniforms have to be purchased, and we can't afford both lessons and a uniform - the embarrassment compounds.
I learn that "rich" people wore cool, popular clothes. Rich people get to play organized sports after school. Rich people get to take family vacations and live in houses instead of apartments. I find out I'm not rich; I'm poor. I play sports in churchyards and use tennis balls instead of baseballs. I ride my cheap bike to the part to play disc golf because it's free, and nobody is there to make fun of me.
Instead of playing sports, learning musical instruments, or hanging out with friends playing video games, I go to work. I figure out that I can trade my time for money. I work my way up from dishwasher to kitchen manager and get raises with each move. I also work more hours at the expense of school. I now make more money than I ever have before, which is a new experience for me. I don't save or invest any of it. I spend it. I beg for extra shifts and overtime, not only because I make more money, but also because I won't have the time to spend it. I find myself spending when I'm stressed out, and working my first attempt to curb that behavior.
Eventually, I learn how to handle my money better. I have a good relationship with money, but it took me decades. I made my way into college and moved from a low socioeconomic status into a higher one. I am lucky that my financial comfort zone has grown with my net worth.
Now that I find myself in a higher socioeconomic status, I learn that collecting a pile of money doesn't help with my need to help others who struggle with money. The firms I work for have multimillionaires as clients, and I get more enjoyment and satisfaction from helping the other 98%. That's why I started Hagen Financial.
The moral of my money story is that money can buy freedom and options, but it can't buy happiness or fulfillment.