Viewing entries tagged
Life Planning

The River Guide

In Seth Godin's blog post (you can read it here) from May 16th, he talks about the river guide and the rapids in short but eloquent terms.  


Frequently, we're asked to change things up, adapt to the market, react to the news, fine-tune strategies for current events. Nothing could be further from rationale.  

Advisors, when they captain the "boat" correctly tend to not over-react. Over-reaction and emotional actions are the purview of the uninformed short-cut taker.  

And let it be known that there are Clients who over-react and live on emotion and advisors who do so as well, ardent in the belief that the way you add value is to "change it up" and show that you can meet the challenge.  Doing nothing unfortunately is not recognized as strategy in many quarters and that's unfortunate. 

But imagine the heart surgeon who thinks that the likelihood is that you might be in for a cardiac surprise at some point if you don't loose weight and watch your cholesterol telling you that it might be better to operate now just on the off chance something bad might happen someday down the road.  Nope, then you'd feel that doing something was specifically not the thing to do and we'd agree. When the action doesn't cure the problem or when the problem does not yet exist, then staying the course is the right choice. 

Let's celebrate doing nothing by judging it based on it's effectiveness and not it's level of effort.  


Interior Design Has Demonstrated Value

Ok, we're not talking here about your choice of furniture or your use of paint colors. Although, I must admit, I have a distinct personal passion for that topic. 

Rather, we're talking about something that I think should be important to us all.

Rather, we're talking about something that I think should be important to us all.

I can, I will, I MUST. 

I can, I will, I MUST. 

Positive Psychology has blessed us with a wisdom. For all our inherent efforts to obtain "happiness" based on our investment accounts, or our job/pay, or bigger home, the reality remains that even with the attainment of those things, happiness still largely eludes us. It is it seems, an immutable reality that happiness breeds better performance in every aspect of our life and happiness is an "inside-out" play, not the other way around. 

In a recent article on Huffington Post Jen Grisanti takes from the recent talk at by Positive Psychologist, Shawn Achor (you can and MUST view the video here) the knowing that "the external world is not the answer for happiness."

That is why in wealth management, we refer to it as "interior design." It's been our experience that the most financially successful clients are those who begin with the notion that they'll first decide what their lives would be like were they their happiest and then, match their financial goals to acheive that life. These are almost always, the most grounded investors, the least likely to panic, the least likely to "quit" when things are getting tough in the markets. They then, invariably wind up being the folks who manage to "get it right" the majority of the time; in markets when they should be and not out when they shouldn't be. 

They're successful not because of a special wisdom about finance or tax policy or the economy or the global financial crisis. They're successful because their goal is to build their lives and they're simply using their resources to meet that goal. 

If you, as we do, start with the focus on the happiest life your plans will be much better, your investments more based on common sense and your willingness and ability to withstand the "whirlwind" of financial news and the whims of the financial markets more centered. Afterall, isn't the plan to live the life you want more than to outperform the S&P 500?

I have to thank Justine Musk for posting this to her Facebook page. You can read Justine's blog at

I'd also highly recommend Shawn Achor's book, "The Happiness Advantage" which you can buy on Amazon or from your i

Is What You "See" What You Get?

"Does goal setting work? Yes, but not the way most people seem to understand it. In my experience, the real value of defining desired futures is not so much in the world we describe, but the change in perception the process of setting goals fosters."  David Allen, Productivity Coach and founder of Getting Things Done (GTD) from is weekly email "Productive Living"  

I couldn't agree more. 

Build powerful visions of your future; that will help to make them a reality. Then go build it. 

Build powerful visions of your future; that will help to make them a reality. Then go build it. 

Wealth Management takes on many forms. For most of the profession and the public, (unfortunately) it's an effort to figure out why you should buy something and exactly what that purchase should be. It's a process that has at it's core when applied in this way, something that you need. Implicit in that mode of operation is the embedded notion that a product is going to solve your problems. "Purchase this and it'll set you free!"  Really? If buying financial products solved the problem, we'd have a lot more 1%'ers than we do. You see, the 1%'ers are the people who built the stuff that you should buy. You purchasing their stuff has made them wealthy, not you

When you can focus your energies working with someone who relies on you to enunciate the life that will make you happiest; then you are the center of the process. "What would you do differently today if money weren't an object?" There's nothing to buy...only the belief in change. 

Many will say that it does little good to ruminate in wishful thinking of that sort. And yet, we are, what we think. When we focus on life as we want it to be a subtle change takes place; we begin to open ourselves to the possibility that our dreams can in fact be our reality. Maybe not immediately, but over time. If you are what you think (and you are) then thinking that you're destined for greatness is going to attract a lot more positive outcomes than any of your other options. I don't know about you, but contrasting buying something and feeling "insured" as opposed to "on my way to making my dreams a reality" I'm voting for my dreams. 

"The reason for long-term goals is the permission they give us to identify with the greatest value we can so it changes our filtered perceptions. The future never shows up (have you noticed?-- it's always today!)"

That's another quote from David Allen who was talking specifically about Getting Things Done. 

As am I.  

The Compass or the Map

Over the last few years I've read a few of Seth Godin's books and I receive his blog feed just about every day. He's one of the bloggers that I tend to read just about everything he writes and as with his books, I find Seth's perspective on things to be interesting and intriguing. 

If you don't know where you're going, any road will take you there. 

If you don't know where you're going, any road will take you there. 

Over the last few years I've read a few of Seth Godin's books and I receive his blog feed just about every day. He's one of the bloggers that I tend to read just about everything he writes and as with his books, I find Seth's perspective on things to be interesting and intriguing. 

On February 22nd, his blog titled "The map has been replaced by the compass" (you can read that blog as well as the other "February" bloggings by Seth.) another interesting paralell has been drawn between whatever inspired his blog on that day and the wealth management process. 

In that blog, he writes..."The compass, on the other hand, is more important then ever. If you don't know which direction you're going, how will you know when you're off course?

And yet...

And yet we spend most of our time learning (or teaching) the map, yesterday's map, while we're anxious and afraid to spend any time at all calibrating our compass."

In the world of personal finance there also exists both map and compass.

And, likewise, maps while inferior at the job tend to win out.

One word of caution; if your map is getting all your attention that's a problem you need to work at fixing. 

Disagreement With An Icon

I hate disagreeing with people, but in finance, that's more or less the norm at times.

I hate disagreeing with people, but in finance, that's more or less the norm at times. 

Avoiding losses also means avoiding gains. 

Avoiding losses also means avoiding gains. 

Zvi Bodie, who is the Adele Barron Professor of Management at Boston University is one of my favorite authors and speakers. His textbook, "Investments" is renowned around the world and is used in the certification program of the CFA Institute and the Society of Actuaries. 

With all that said, sometimes, even Zvi just gets it dead wrong.   

In a recent BU video titled "Three Crucial Tips" Professor Bodie offers some "salient" advice on matters of personal finance. I take exception to just about all of them, here's the skinny on each

1. Take No Risk

Professor Bodie notes that he hates to lose money more than anything and to that end, he takes virtually no risk with his investments. He further notes that [a] he is much more concerned about loss than he is about gains and [b] taking risk is dependent on how you're going to feel if you lose the money. 

Well, first off, Professor Bodie is a professor of management so we can assume safely I think, that he's probably paid more than most people and being grounded in management, he's  a bit more comfortable confronting his financial issues than most are. To that end, he likely started saving early and often with reasonable deposits. If most people were to operate that way, saving early and often, the need for "risky" investments would naturally diminish over time. After all, once you've accumulated enough to fund your goal, it's funded. Enough said. 

As to concern about losses, behavioral science tells us that there is no difference between professors and the general population, everyone counts losses more than gains. That's why people prefer to buy into the stock market at 12,000 on the Dow (when it's expensive) instead of at 8,300 when it's cheap. Amazingly, we're so scared of losses that we inadvertently wait till they're the most likely to happen in our effort to avoid them. That's part of the problem. If that seems irrationale to you, let's shift the "consumable" from stocks to socks. If you needed to buy a supply of gym socks for your year long workout regime, better to buy them at $3.00 a pair or $1.00 a pair? I thought so. 

2. Trust No One

Professor Bodie contends that "no one knows you better than you know yourself." Again, enough said on that, and simply stating the obvious doesn't, in my way of thinking, present a cogent argument on why to either do or not do something. 

At point of fact, we don't even really know ourselves all that well. If we did, we'd have a better understanding about our goals, vision and dreams for the future and we'd be doing something to make them a reality. 

While it's true that no one knows you better than you know yourself, you can in fact, work with an advisor who will know you almost as well as you know yourself and, who should be able to motivate you to do something to make some progress towards your hopes and dreams. 

The Professor did note that if he had to take his car to be fixed, something he'd trust someone else to do, he'd ask a lot of questions of that person. That's good advice, when people seek out a financial professional to help them, they too, should ask a lot of questions. To the best of my recollection, both the FPA and CFP Board have consumer materials on their website listing questions to ask your advisor. 

3. Get Guarantees and Read Some Books

Oh boy. Really? We're sort of back at square one. There aren't many investments out there that come with guarantees. There aren't any investments out there that come with guarantees that are in and of themselves going to enable you to reach your goals. Remember when Jimmy Carter was president? The yield on 30 year treasury bonds was 14%, unfortunately, the core inflation rate was about 16% which meant you were locking in a guaranteed loss of 2% in purchasing power. Is this the type of guarantee that Professor Bodie had in mind? I think not. 

The good professor also notes that finance isn't that hard and that there are many books out there that can teach you about finance if you'd read them. 

There are as many books out there about weight loss and yet we live in a world of largely large people. Cooking, wine, golf, scores of books producing woefully bad results. If reading about something meant that you'd automatically inculcate what you read into your life and times, what a wonderful world this would be. 

And, yes, personal finance is easy if for no other reason than what ideal life you aspire to has nothing to do with financial matters, since;  [a] your goals financial and otherwise should be based on your wishes, dreams and building a life that makes you happy, [b] you can delegate the complicated part to someone who will make that ideal life the centerpiece of everything you do and each decision you make, and lastly; [c] all you have to do is start and then keep up with it, in concert with a trusted advisor to guide you and help you make interim course adjustments. 

Finance should work like the Apollo mission. JFK said we were going to send a man to the moon and bring him home safely before the decade was out. (Note: This is a GOAL, clearly defined and stated.)

He had the vision about what he wanted and then he turned it over to the people that he trusted to make it happen. 

Then it happened. Enough said. 

Were there not the details of life, were we all blessed with all the understanding and money we needed, personal finance might be easy. 

Steve Jobs was rumored to have told his designers and technicians at Apple to build the best phone the world had ever seen. 

Then he too turned it over to people he trusted to make it happen. 

Here's the the real three topics you must learn; 

  1. Say what you want (set appropriate goals)
  2. Turn it over to someone who will help you make it happen 
  3. Trust the process  

When will you?   

Take a tour red.jpg

Target Date Planning- The Fallacy of Better

Investing on "auto pilot" presupposes that the auto-pilot is focused on you. It's not, it's focused on the mode of transportation, not the occupants. 

Investing on "auto pilot" presupposes that the auto-pilot is focused on you. It's not, it's focused on the mode of transportation, not the occupants. 

Don't worry, things will get better.

At least until they fall apart again.

We live under a great misconception; that there's a path in life that leads to an evenness of things. We're confident that during that time when most if not all of the tumult is gone, that we'll do our best work, accomplish our biggest goals and gain the foothold we need to make genuine and worthwhie progress.

Reality is that life won't ever be in that place for more than a fleeting moment. Just as assuredly as things will come together is the knowing that at some point, they'll all fall apart again. It's the cycle of life that we all face.

Our peace and resilience comes not in finding that special place where it all fits, but rather in learning to prosper in the search for it, mainly because the search for it is our lives.

We can forestall progress and growth forever waiting for the day that it all fits or we can build our lives in spite of the fact that it won't. If we can learn to focus and do our best work when it's hardest, then we'll just be that much better when the brief time comes when it's all seemingly hanging together. Ever hear a singer/songwriter or author talk about how they do their best work during times when it's all coming unglued?

Bottom line is, don't wait. Don't wait till you have things all lined up before you start whatever it is you need to get started on, whether it's investing, saving or abandoning an old strategy in favor of a new one.

As hard as it might be to believe, our peace lies amidst the chaos of change.

Planning for transitions is imperative because our lives will be almost nothing but them.