Building Financial Futures with Gene Natali, CFA

Gene Natali, CFA, joins us to discuss his mission to solve America's financial literacy crisis through his innovative platform Troutwood and his bestselling book "The Missing Semester." We explore how technology can scale financial education and planning to reach millions of Americans who lack basic financial knowledge despite good jobs and education.

• Gene's journey from institutional asset management to becoming a financial literacy champion
• The inspiration behind "The Missing Semester" which has reached over one million readers
• How Troutwood's platform connects planning, engagement and incentives in one unified system
• The $14 trillion retirement shortfall in America and how the finance industry has failed average Americans
• Why financial education must focus on action rather than just knowledge
• The importance of secure AI in maintaining trust in financial guidance
• Community connection to investing makes financial markets more relatable
• The need for financial habits to become as automatic as brushing your teeth
• Why the "delta" (taking action vs doing nothing) matters more than "alpha" (investment outperformance)
• Creating centers of excellence for financial literacy across institutions

Help someone you know who's having financial challenges by sharing Troutwood's tools with them. If everyone reaches out to two or three people, we can start to make a real difference!

https://www.troutwood.com/troutwood-basic

Straight Talk for All - Nonsense for None

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Disclaimer - These podcasts are not intended as investment advice. Individuals please consult your own investment, tax and legal advisors. They provide these insights for educational purposes only.

Chapters

• 0:50 Meet Gene Natale, Financial Literacy Champion
• 6:20 The Birth of Troutwood Financial Platform
• 12:32 Secure AI in Financial Planning
• 17:00 Financial Education Journey for Students
• 22:57 Community Connection in Investing
• 28:07 Creating Financial Literacy Centers of Excellence

Transcript

Steve Davenport: 0:26

Hello everybody and welcome to Skeptic's Guide to Investing. Today I'm very excited to have my good friend and fellow CFA, Gene Natali. Gene is, Mr. Financial Literacy. He's been working for the last 15 plus years in this space. He was cutting edge when he came out with a book called Missing Semester, which talked about how everyone's education is missing one semester where we focus on personal finance and investing.

Steve Davenport: 1:00

Everybody should have the ability to succeed financially and I believe what Gene is doing with Troutwood and other things, um, Troutwood is the application that he's developed and built with his team and I think what he's doing and what he's done, um, is a great story of American ingenuity. I believe that we uh, you know, we all have a journey and we all get started somewhere. So, as I Gene, I'd love him to talk a little bit about where this desire and drive for financial literacy came from and you know, I don't think it's any different than where you know it came from from a lot of people who are creative and energetic. But I'd love to hear, Gene, just a little bit about your financial journey and how you started.

Gene Natali: 1:53

Steve, thank you for that introduction and for the friendship. It's hard to believe we've known each other as long as we have now, but I'll doubt it, accidents happen.

Steve Davenport: 2:03

A Steeler fan and a Patriots fan can coexist.

Gene Natali: 2:07

Absolutely and make each other stronger. So I appreciate the introduction. We are 100% aligned on everyone deserving equal financial opportunity, but entering that playing field from different backgrounds and different points of life, and I think that's been one of the historical challenges. Your specific question was what was where my drive for this topic came from. I'll share a very short bio introduction while answering that question.

Gene Natali: 2:36

I grew up in institutional asset management, so after college I entered in excuse me institutional sales, spent close to two decades getting to know how large pension funds, large financial institutions, large endowments invested their capital and planned for the future.

Gene Natali: 2:57

Simultaneously, I took an interest in personal finance based on experiences I had while attending Carnegie Mellon University's Tepper School of Business, seeing brilliant minds navigate this very difficult curriculum, become real-world decision makers, but at no point in their careers being taught the basics. We could graduate students who could do complex option modeling, massive debt and big misunderstandings of what that meant. Yeah, massive debt and big misunderstandings of what that meant. So the title for the book that you alluded to, the Missing Semester, was very catchy at the time. There's a lot of good work being done across the country. If I wrote it today, I'd probably have to retitle the Missing Semester. Personal opinion that I wasn't taught this stuff or I was ignored. It was looking at folks in their thirties and forties who, steve, despite great jobs and great educations, were living paycheck to paycheck because they hadn't been taught this subject.

Steve Davenport: 3:59

Yeah, no, I, I, I think it's sad and I I've, I've looked at this and you know I've always given you the analogy that it feels like with financial literacy we're just trying to put out a forest fire with a garden hose and I think that you know what you're doing is inspirational in terms of you saw a problem, you saw a need and then you went after trying to solve it. I'm trying to solve it and I mean I'd love to you know, hear more about the. You know you had a second book right after missing semester and Troutwood and how it got started and I mean I think our listeners would love to. Everybody wants to start a new AI company. You were, you know, kind of in the forefront of trying to use technology to help people and I think it's a great story. Tell me about Troutwood.

Gene Natali: 4:56

Absolutely, and I love your garden hose analogy, steve. We have a $14 trillion retirement shortfall in America. The finance industry has failed the average American. I'm generalizing with that statement, no, I think you're accurate.

Steve Davenport: 5:12

First of all, we're just now getting to the point where we have 401ks for all. I mean, if the pensions went away 20 years ago, why now are we giving people at the lower economic levels an ability to save in a 401k? And it takes 30 years to realize that this is a problem for everyone. Retirements are not funded by pensions anymore. It was a time, and those days are gone, and nowadays are 401ks.

Steve Davenport: 5:48

But this is a 70s development and we're just now getting to the point where I think we can say that everyone has availability of a 401k, which is nice, but now we're going to start to put crypto and private equity in them. I think that we need to help people, and I don't know where you think the greatest need is. We can maybe talk about that in a little while, but in this 30 minutes I want to get people some help and I think that I will include whatever links to your materials and ideas that you would like, but just tell us a little bit about what Troutwood tries to do, because I know the app from five years ago. I don't know exactly how long you've been doing it.

Gene Natali: 6:41

Yeah, about five years to touch longer. You are correct, steve, that accessibility is being solved for speed. We're not moving fast enough as an industry. White label IRAs are a possibility and we're not running to them. My understanding, my belief and the principle for founding Troutwood is we were lacking a cohesive and connected planning, engagement and incentive platform. Connected planning, engagement and incentive platform we built a platform that, through technology, will allow financial advisors and financial institutions to seamlessly and frictionlessly scale their business, their practice, through technology, while inviting their customers and their prospects and their next generation into a platform that makes communication and guidance easy.

Gene Natali: 7:29

That's a very high-level summary. Let me go one step back though how and why the missing semester has crossed over a million readers. I am extremely proud of that. I keep that quiet. I've never posted that on a social platform, but I almost made a mistake with the, the book and that same mistake almost made a troutwood. So consider me a slow learner. But when I first started writing the Missing Semester, I was writing like every finance book. I was writing everything I had learned at Carnegie Mellon through, you know, getting the CFA designation, expounding all this finance information that people had to hear, and I remember I was 15 pages into chapter one. I thought wait a minute. Is anyone still reading?

Steve Davenport: 8:12

Yeah, I mean, did you solve the pricing of the options?

Gene Natali: 8:17

No, I shredded it. I said this has been done. There's a lot of thick books out there espousing what the finance industry knows. There's not a short actionable book. Missing semester is a money 101 actionable book excuse me, actionable book. The missing second semester is investing 101. Trout would take that same philosophy because, after giving my thousandth presentation on the missing semester on personal finance and giving a room full of fist bumps, I said geez, fist bumps aren't enough. You could 10X these fist bumps, but there has to be fist bumps aren't enough. You could 10x these fist bumps, but there has to be an action step if we're going to move the needle. And it's not enough to keep sending speakers in rooms. We need to lift up and empower an industry if we actually want to move the needle. And, steve, the pinnacle of this was 2019, a meeting at the United Nations headquarters where a couple of the board members said don't stop what you're doing. The world needs good software in this space. So Troutwood took the same missing semester philosophy of simple, easy, actionable.

Steve Davenport: 9:21

No, I agree. We tried to do something with videos because we felt there was honest advice about what people should do, without an incentive from the financial firm who sponsored the videos. We wanted it to be non-biased and we tell some hard truths about people doing their budgeting and you know why. Spending is a dangerous animal to try to control. And you've got the world of retailers who want you to pass that phone over the checkout line and they want you to just hit that big blue button because it makes people feel good when they click on and they buy something. And you, you we're trying to, you know, preach to people or to educate people in a way that others haven't, and it's not because you know, they just didn't feel like it. It's difficult and it's difficult to get people to say don't consume today, delay gratification for some tomorrow. Just those two words delay gratification. This is 2025. We have attention spans of seven to eight seconds. You know what I mean. This isn't 1975, where you had one minute attention spans. You had one minute attention spans. You've got to really think about how your messaging can affect the most people and affect the most lives. And I agree, you are taking the next step from some education. Okay, now how do I implement the solution in a way that's going to set up my 401k account. Look at the areas I can live. And I think you still have that part of your application where you said, hey, if I got a job here or here, let me compare what the budget would be for the two locations.

Steve Davenport: 11:15

That was great thinking, because college students guess what I mean. They're not you know. I mean I've, I've been in front of those hundred college students and got those fist bumps. But I sit there and I say this is a college of you know at Georgia, with 34,000 students, and I've got a hundred of them You're pursuing. Technology was I think you know what I mean a way to quickly transmit those ideas and those disciplines and those questions to people so that they could succeed. And I guess I ask is, in the world of AI, where does trouble end up?

Gene Natali: 12:02

Yeah, quietly doing some great work. So we built secure AI. Our individual users have AI that reads their individual financial plan. Our enterprise and financial advisor partners have AI that sits over their participant employee, customer cohort base. It's secure, which means we boxed it in on top of the open AI platform. I think that's extremely important. Finance industry trust is non-negotiable, which means you should be using secure AI.

Steve Davenport: 12:41

Yeah, I mean I don't want to divert too much know, troubled by what I see with companies and banks and it feels like banks could easily turn into utilities the way that they're doing things.

Gene Natali: 12:57

And I'll put an aggressive comment on top of that Banks and financial advisors have a generational opportunity to own their future if they act. They have the opportunity to be the center of an individual, of a small business's financial life, if they choose to act. And the opportunity the consumer and the small business are begging for it. I hope that the industry hears, sees and acts. Our platform was built to empower it. The industry hears, sees and acts. Our platform was built to empower it. So I say that very selfishly and very biasly as someone who believes it, but I'm seeing it from both sides of the barbell.

Steve Davenport: 13:32

Well, I just look at, you know, the average individual and how are they able to, you know, make, get past inflation and understand inflation and what? What does it impact and how does it impact and how can I immunize myself somewhat from it? Should I be buying inflation-linked bonds instead of treasuries or corporate bonds? I think there's a lot of work that we as an industry of investment professionals but just finance professionals I think there's plenty of room in this. You know, uh, in this boat, and I want to get in the boat and and start, you know, paddling, because I think that we, you know, we've got a long journey ahead of us. So I guess, how, how do you see what? Can you just give me a beginning to end of how you would like someone's financial education and implementation to go? So a student comes to you and says, hey, I want to do a financial plan. We give them Troutwood, they do the financial plan. Then the financial plan undergoes some rigor in terms of where do you work and how much do you make and how, what is your savings amount and how much do you want to spend? And, um, I, I guess, is there.

Steve Davenport: 14:51

Um, do you still think the 50, 30, 20 kind of model works, or do you think we're, as a society? You, uh, is life becoming more like 60? Um, you know, and and the, the uh, the savings is going to 10. Um, because that's what it feels like when I talk to my kids and and people around me that life is more expensive and I don't know where you get that 50%, dad. But it's you know and the, the place that I don't want to give up is my, you know, want. The place that I unfortunately give to see people giving up is their savings. I mean, how does the model of today, just like asset allocation needs to include alternatives Does? Does something else need to be in there for inflation?

Gene Natali: 16:07

So I'll answer both questions. The first was the student who approaches Troutwood. On Troutwood, we have three products. We have Troutwood Basic, which is a career exploration, cost of living modeling, investment modeling that gives an individual their first working financial plan from a data set of about 115 million unique data points. The reason that matters and one of our strongest KPIs at Troutwood is nearly 100% of our student users complete their plan. That's a massive data point. What that means is they're now entering the real world informed. What they do with the information, as has been true in all of history, is up to the individual, but we can at least help graduate a more informed student.

Gene Natali: 16:53

Our two follow-on products are Troutwood Pro. Troutwood Pro is our living, breathing financial plan that helps guide an individual to their retirement or financial goal in partnership with a financial advisor, bank, employer Any of those three silos we need support. Right now. We push individuals out on a lifeboat and say good luck with your financial life. We're building a world where they'll have the support of all three of those partners. The third and final product is our engagement and incentive platform that is administered by the advisor, the bank or the employer to help that individual understand where they're going and why. You know that's the journey that we build. So it is an end to end full platform from as young and Steve. Some of our strongest users are early teens, where they have a paycheck and a Roth IRA and they love having their financial life in one place. So less and more bank or financial advisor partners are hearing that and beginning to act. The other question you asked the 50-30-20,.

Steve Davenport: 18:10

It depends on when that individual chooses to start. The earlier they start, right the different numbers are, versus the later they start. Gosh, if you wait till really old, it's 100% safe. Financial literacy start and how do we do it such that it becomes ingrained in their personality? And you know we were reading to second and third graders because if you can help people with that delay in gratification, they become better.

Steve Davenport: 18:31

Ultimately, financial literacy candidates and I still believe that you know it's up to families and I believe it's up to educational institutions and church and other places to supplement what is your message to people? Because guess what, if the students become better with their money, I think the beneficiary is going to be the university they say, hey, they taught me and the community and the employers. It helps the stability of the employees, it helps the lifespan, it helps them, you know, have less stress and be healthier. There's tons of benefits and you and I don't think could spend 30 minutes on benefits alone and the conversation would be incomplete. I really would love to get from you is where do you see the hotspots of areas that are very difficult to solve and where do you see success really coming to fruition such that we should, you know, we should promote those people who are pushing success and we should, you know, encourage and support those people who are trying to deal with the most difficult situations.

Steve Davenport: 19:48

I had a group in Orlando that was going after people in homeless shelters and trying to help them with everything to get their life back in order, including financial literacy everything to get their life back in order, including financial literacy. And my point of view was boy, that's taking on a big piece of the pie, right, and I guess you're cutting this pie every day trying to figure out what do we do for middle age? What do we do for starting career? What do we do Like? Where are we really getting it right and where are we still having challenges?

Gene Natali: 20:22

It's a giant question, Steve, and I will answer it.

Steve Davenport: 20:27

Well, you're a giant of this industry.

Gene Natali: 20:31

I've been working tirelessly at solving that for 15 years and I'll preface my answer. We've got a client in Brownsville, texas. They're a very poor, poor region of Texas. It's called Troutwood a gift from God. We work with Virginia Commonwealth University, their financial wellness center one financial wellness center of the year last year Virginia's Commonwealth Savers program has taken the unique step of empowering their employees with Troutwood platforms.

Gene Natali: 20:56

So you're seeing folks start to tiptoe and the reason I am saying that, the analogy that you give in the loaded question what if the pieces that you suggested were parts of the equation and not the whole equation? The community, the church, right, the employer? What if the financial industry led like the dental industry? What Brush your teeth? Every parent is saying brush your teeth before bed. What if every parent was saying did you save and invest $3 today? Because the financial industry took time to understand? Wait a minute. We have a $14 trillion shortfall because of our past mistakes. What if we solve it starting now? And that's $14 trillion shortfall because of our past mistakes. What if we solve it starting now? And that's $14 trillion of assets moving forward If we started to play offense?

Gene Natali: 21:47

Personal opinion way too much financial literacy education has been token, I was there, gave a presentation. Check the box. No, no, no, no. The audiences that you mentioned not everyone grew up with a Wall Street Journal on the dining room table. Right you walk into. This time there's going to be kids doom scrolling on TikTok. We need to look them in the eye and say you can do this. We need to bring analogies like brushing your teeth that they can relate to and they have to touch and feel it.

Gene Natali: 22:18

We have a fourth product I didn't talk about but we're very proud of. It's a map of the stock market Student users. Over an hour and a half in our map each month on average. Why? It's no different than cheering for your high school football team or the Patriots or the Steelers. They are proud of the companies in their communities because they know people that work there. Proud of the companies in their communities because they know people that work there. The future of investing isn't PE ratio versus Sharpe ratio if we want to include the non-investors. It's understanding that my mom, my dad, my aunt, my neighbor works at Dick's Sporting Goods and connecting the dot that when they walk in they can own a share of Dick's Sporting Goods. They can be a part of this system. So I think it has to start at the top, steve. The industry has got to step into a leadership role Banks, financial advisors, technology will be a part, because technology creates the scale that makes possible what we're talking about.

Steve Davenport: 23:17

Yeah, well, I have an advisory board for our firm, Circa Capital, and on that board is a young RIA and his idea that we're trying to work our way out of is to come up with a portfolio for the people in North Carolina, South Carolina and Georgia of companies that are in our community that we feel like if people own the companies that they see around them and work on, they would feel much better about their investments because they know when they go to Bodex or they know when they go to you know online to get a Microsoft package, they'd say, hey, I own some shares of of this. And I think that the investment industry customizing for people and saying you live in this state, here's a, here's a you know the top 20 employers are, you know these companies and they're in your portfolio and and that to is one way as an industry, we can get people to behave better Because ultimately, we can give people education, we can give people tools that they can implement, but it's the that behavior. As an individual at 19, 20, 21, you would love to see good discipline and things occur, but you know what? It's pretty damn hard to get a job. So I can understand why people are job first. You know financial literacy later.

Steve Davenport: 24:56

I think you might pick a better job and have better determination of results if you got the financial literacy later. I think you might pick a better job and have better determination of results if you got the financial literacy as you were looking for the job and you incorporated those factors in your decision making. But I think that you know. One of the questions I have is how are we distributing Troutwood and how easy is it? For if we include Troutwoodcom on our podcast, what will be the result? Or what can I do for people who are listening to help them with Troutwood as an advocate and as a tool?

Gene Natali: 25:42

advocate and as a tool. Thank you for that question, steve. For the podcast link, link our map of the stock markets because it's an actionable fund tool in our basic application, which is free and it's out there for anyone to build their financial plan. We don't have our pro product or enterprise product on our website, but individuals can DM me directly. I can give you my email address, all of my social contacts, et cetera, and that's intentional. That will change Our website is. We're building as a software company should and could the Buy Now button where any financial advisor, any financial institution, any employer of any size will be able to hop on, buy their licenses and get running.

Steve Davenport: 26:18

Yeah, I mean, are you keeping track of some of these stories? I mean I'd love to read about this Virginia Commonwealth and the Brownsville Texas person and the cause to me, those, those inspire me. To you know, we can. We can create a, a, a what I'll call a center of excellence in different. You know, here's an RIA who is a center of excellence here. You know, here's an ria who's a center of excellent. Here's a school that's a center of excellent. Here's a church that's a center of excellent. Because to me, I think people are looking for a solution here and I think that the world, because of our lack of attention span and our complexity of all the problems that are being dealt with daily, it's hard to get to cut through the fog and get to where we really can help people.

Gene Natali: 27:06

I love that, steve. I believe so strongly what you said. I started a business. That's a problem, right? The world is looking for inspiration, it's demanding it and I remain stunned that the three we keep saying this broad industry. But why are employers not responding? Get back those 20 days of productivity. It costs a few bucks to implement a Troutwood-like financial wellness tool. The ROI on that is stunning. What are they doing that? Historically, we've just put just good enough tools to check the box. Good enough tools to check the box.

Gene Natali: 27:49

I want to speak really quickly to your CFA and CFP audiences because you hit on something very important with that community touch that you talked about three minutes ago. We live in an industry that is focused on alpha outperformance finding the right stocks. What the finance industry has missed for years is the delta. The difference between doing nothing is far greater than the alpha from the right or wrong stock pick. Have to involve people in this system. It's inspiration, but it's inspiration that drives action and makes them feel confident that this is a story I want to be a part of. I trust my money that I work hard for in this system. That, in my opinion, is a big, big area where we are failing is ignoring the delta, the difference of doing nothing nothing.

Steve Davenport: 28:49

Yeah, I mean, I've always tried to look at the communities and say, okay, you know, there's 35% of the population that I would say is challenged or, you know, fragile. And then I would say there's another 30% that is trying to rise up and in that stage they've got a lot of challenges, they need a lot of tools, but they they do have jobs and they do have personal lives that they could potentially get. And then there's what I'll call the college educated rest, and that college educated rest they have a lot of advantages and they're going to have a lot of success. But there's a lot of people in there that still don't do things you know, very logically or very helpful to their financial help with food and support mechanisms, donate to groups for the middle that help with education and donate to groups that are kind of reaching out and using social media to go after that top 30. I don't know how we make a difference, but we've got one minute to figure out how.

Gene Natali: 30:12

Give a hand up, not a handout right. Where people choose to donate their money should always be personal and it's an important impact tool. But no different than that analogy I gave on looking at past and saying we're $14 trillion short. How do we make that a $14 trillion offensive move for the industry moving forward? It's no different. If we empower a generation to act, it will massively move the needle and outweigh any charitable impact. So donate your money in the areas that are important to you as a human being and teach people how to build better lives. Create an action step.

Steve Davenport: 30:48

That's great, gene. That's a great point for us to end on. I mean, I think you know all of our listeners I'm going to, you know, cover this podcast with a lot of ways to contact and reach out and see if some of Gene's could work. But I really want everyone to try to think about is there someone you could help? Is there someone you know who's having financial questions and challenges? Help them, share this information about this tool and you know, if everybody who reaches out to two or three people, we can start to make a real difference. So, gene, thank you very much for being here today and I'd love to come. You come back when you know we have another moment in the sun for financial literacy and your firm. I'm supporting you, I believe in you and I hope all my listeners will too. So thanks for being here today.

Gene Natali: 31:40

Steve likewise, thank you so much, and thank you to everyone listening.