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Leadership

All You Really Need To Know.

Confusion is a good thing if you're fearful about moving forward. Confusion is one of the most reliable methods of ensuring you stay right where you are, without any requirement for change. 

When we're feeling especially fearful we focus on the uncertainties around us largely because those uncertainties fuel the confusion. And, keeping "confusion" active assures that we're likely to not take any direction action.

No matter how hard we try or how much analysis we look at, big decisions will never feel safe. 

One of the benefits of my work is the amount of data that there is that can be used in trying to help Clients resolve their personal financial issues. There are also an abundance of tools to use through which you can incorporate that data and fashion a reasoned and well thought out game plan.

Does that mean we should use all the data that there is?

We should if our goal is to create more confusion. 

Part of the "art" of Wealth Management planning lies in knowing how much data is the right amount of data.  As a rule, that would be the amount of data that allows for me to quantify why the "unacceptable today" has to be moved out of the way so that we can glimpse the "desired tomorrow." 

These concepts don't apply to only Wealth Management planning. They apply to all decisions of whatever kind. 

Taking action, beginning the steps toward resolution of a matter isn't going to begin with a focus on yesterday and tomorrow. You can talk about how you got here and where you'd like to be without ever once having to write down an action step. It all has to start from the realization that "today is an unacceptable tomorrow." 

All you really need to know is what's important now. 

If you can state that, you're on our way out of confusion and toward resolution and action.  



The Intermediate Guide to Change

At times it can feel like life is just one big adjustment period.  One thing after another requires our attention and energy. And, most times, it seems that all we're ever doing is adapting and adjusting, rethinking and reconsidering.  You know why? Because we are. 

Because all life is, is change.  Change is all there ever was and it's all that there ever will be. 

But why is change for many of us such a "pain point?"

Mainly because change opens us to a state of "not being in control" and of things not meeting our expectations. 

Taking that on faith then there's really an immutably simple way to manage the "pain point" of change. 

First, realize that not being in control isn't necessarily bad and that not being in control is probably the most normal state of things.  If we can learn to accept the fact that we're not always going to be in control, maybe not being in control would be less painful. Reconciling in our minds that control is a shared resource would help us all a lot. Sometimes we have it and sometimes you don't. 

Second, why don't we give up on expectations?  Expectations are a story that we've told ourselves. It's how we've planned "it" out in our minds.  You know it's true, you've done it, I've done it, we probably did it today. We "walk" through in our mind how our day is going to go, or how the conversation with your boss will play out or,  what our child would tell us about how they see their future playing out.  We had it figured out in advance, we knew exactly how it was "supposed" to go. Only problem is, it didn't go that way did it? It seldom ever does. Deviations from our story are just that. Our story was in the end, only one possible outcome, not the only one. 

If we could learn to view change as opportunity, we might be farther down the road on our own solution. 

So here's the thing.......

Look at change as opportunity and get comfortable with not being in control and not knowing. Learning to live with uncertainty is a necessary part of life. 

 If all there's ever going to be is change, our adaptation to it is central to building toward a stronger future. 

The Bad Thing About Good Advice

Good advice is seldom understood or appreciated.

And, I think that there's a good reason for that. The reason is that what makes for good advice is often viewed as a "bad" thing. 

Seth Godin recently wrote about the attributes of good advice. 

I was drawn to the posting I guess, because "good advice" is what I envision that I do.  And, because I am naturally inclined to learn and I can always benefit from good advice, so I read the posting to see what the takeaway would be. 

No matter what you do, be it advisor, parent, teacher, mentor or leader, I think that this piece has in it, a few "gems" I think we can all benefit from;

  • Good advice is not what you want to hear but what you need to hear
  • It is not imaginary, but practical
  • Not based on fear, but on possibility
  • Not designed to make you feel better, designed to make you better

Those points resonated with me. 

The problem however, remains this 

  • People are prone to want to hear what they want to hear, not what they need to
  • Absent a degree of "social" or other proof, fallacy masquerades pretty well as "fact" allowing for the imaginary to crowd out the practical
  • Avoiding fear prevents a relationship with the possible
  • Feeling better is usually going to be preferred over "making you better"

I see it all the time. 

If the original blog were the reality, there'd be more people planning their lives based on what needs to done, what's practical, what's possible and what will make them better. 

There just isn't much of that going on. 

There needs to be more. 

 

 

 

 

Why We Love Goals and You Should Too!

Everyone loves setting goals, it's one of the reasons that productivity and to-do apps are among the most downloaded by smartphone and tablet users alike. 

Problem is while we all love having goals we're not clear on how to best achieve them. Most folks think that the goal, that seemingly elusive "end state" is what we should put our focus on. I beg to differ. 

Reality is that the best way to achieve any goal remains to focus your attention on the processes that get you there. (As an example, read this Fast Company blog by Dilbert creator Scott Adams) Let's take an example, let's say you decide you want to be in awesome physical shape.  Are you better off focusing on a combination of [a] your desired weight and [b] specific body measurements or are you better off focusing on [a] getting to the gym just three days every week and [b] eliminating all the "bad food" you eat?

If we operate on the premise that your ideal weight (175 pounds in my case; I'm currently 188 but was 227 lbs. two years ago) is 200 lbs. I might be crazy, but hoping that your ultimate weight will remain a long-standing motivator seems improbable, weight loss is a slow and tedious process isn't it? I mean, is watching a drop in quarter or half pound increments really gonna do it?  And, it's so easy to "stop" and be content when the first ten come off, afterall, dieting is hard and ten pounds is probably gonna make your clothes fit better. 

But you can get energized by ending a day knowing that you got to the gym and did a workout, any workout, on your way to your goal. (P.S., "any workout" is also a better "process" than expecting yourself to be a gym maniac every time you show up there...) And, you can pat yourself on the back knowing that you got through another day without Dunkin' Donuts or fast food.  Focusing on the process allows for every day to be a win, instead of the notion that you're killing yourself and still have 25 pounds more of killing yourself to go. 

See, if you focus on the "steps" and not the "end" things look a lot different. There are lots of people who yearn to connect more with their kids and family...work is hard and takes more time than we think.  But rather than "forcing" the matter, how about this.  [1] Get home early two nights a week and be around on Saturday, [2] turn off your smartphone and tablet when you get in and leave it off till the kids are in bed (It'd be better for you if you just left it off, but that's your call). I bet if you can do those things, you'll feel better along the way because the process is key to the goal, not the other way around, and getting the small steps right is more of a determinant of long-term progress. 

Bottom line is this; if your goal is to eat an elephant, one bite at a time really is the correct answer and not because it's too big to get down in one gulp. 

What's your first bite gonna be and what of.....?

 

4 Lessons About Collaboration

Dan Sullivan, owner and founder of The Strategic Coach calls it, "rugged individualisum."

It's the notion that we can go it alone, we're relying only on ourselves, our talents, our tenacity and our creativity.  All good traits to be sure, but is "rugged individualisum" a wise business choice?

In this article from Fast Company Magazine, Jeff Havens talks about why you specifically shouldn't try to do everything yourself. 

Avoiding The Low Interest Rate Trap

For many pre-retirees and "in place" retirees, this extended period of low interest rates presents a financial conundrum; how to keep pace with rising costs, when your income specifically can't?

Feeble returns on safe investments such as bank deposits and bonds may hinder retirement income models for another decade according to a recent interview with Bill Gross, manager of the world's biggest bond fund. Currently the average yield on a five-year CD is about 0.8% compared with 2.26% back in 2009. 

But, for the record, the problem here lies not so much in the environment of low rates, as it does in the misguided approach that most American's take to retirement. 

It's long been said, that inflation, especially when it's lowest is at it's most insidious levels. With an average inflation rate of around 3%, retirees hardly notice year by year the rate at which their prices are rising.  When rates are low, inflation spends much less time as a topic addressed by the mainstream media, and the less that investors/retirees hear about it, the less that they factor it into their thinking in planning for their future. 

It's All In How You Look At It

America suffers from many ills as it relates to retirement. Many of those are self inflicted like the problem that low yields portend for keeping pace or actually enjoying retirement. But, many of those exact problems are caused by the perception of retirement. 

Striving to reach an artificial finish line such as "your retirement date" or turning 65 or collecting your first Social Security check, clouds our thinking.  Many retirees have a life expectancy much longer than they think that they do.  Given that, it might be best of we reframe the problem: 

"The finish line is your date of death, not your date of retirement.

I'd bet if we looked at the problem that way, we'd understand better that keeping pace with inflation and not relying on "fixed income" in a world of nothing but variables, probably isn't a wise path to take. 

The "income straight jacket" is especially concerning. 

The income straight jacket exists because too many American's believe that when they retire their time horizon for investing has now ended, they've made it, they got to the finish line. So, it would appear to be time to employ a different strategy.  Instead of investing for growth, the default becomes to position the portfolio to replace the very thing that they had when they were successfully making it (i.e., when they were working) namely income. 

Portfolios replete with high dividend paying stocks and fixed income abound. But there's a problem lurking in the shadows; when interest rates rise and the underlying value of their entire portfolio starts to drop, the decisions that need to be made become more problematic. 

Not only can't their portfolio income keep up because many of those rates are locked in; but the value of everything is declining as well, making the notion to initiate some change even more daunting. Who wants to sell as prices are dropping off the cliff?

Over the last few years there's been more than a few articles on the impact of lower than average interest rates on retirement and retirement income. But I'll submit that if you used bad math and poor judgement to build your portfolio in the first place, it's not a surprise that the "market" has found a way to make your bad decisions cost you. 

The Problem With Low Rates Is Our Reliance On Them Not To Be....

In and of themselves, lower than normal interest rates should not be much of a concern. Oh sure, they deserve some attention on how things are built and managed, but lower than average rates are not the death nell that we're hearing about. 

I'd bet that there are few people who are complaining that inflation (a number typically tied to the overall level of interest rates currently in play) isn't high enough or that you're ready to step up to the plate and have your mortgage and/or home equity loan rates move up to around 7%. 

Thinking that you're going to earn 8% on fixed income or bank investments when the inflation rate is 3% is about the same as the Client who would like to earn 10% on the stock market but just not have any risk....it isn't going to happen.  At point of fact, I'm not sure that it could happen. 

A local sports radio celebrity often comments about "mediocre" sports teams who seem to playing way better than they should be.  His comment about those teams seems true here as well; 

"The reality is that if your teams got problems, real problems, it's only a matter of time until those problems become real and your run is gonna end...."

Likewise for building a portfolio. 

Or a house, or a car, boat, sports team or business.  Weaknesses have an odd way of finding weaknesses in a relatively efficient manner. 

So stop waiting for rates to go up if for no other reason than you can't make that happen and start focusing on what you can do for yourself.

Sit down with someone who knows how to construct a plan for your retirement and your portfolio based on all the relevant factors, not just the ones we'd like to see happen.