September 30, 2014

What Mark Twain Might Say

Credit: tungphoto
You might think that a vast majority of my job as a financial planner would involve number-crunching, graph-making, and technical reading. My job does encompass some of those activities, but I have found that the majority of my time is actually spent counseling people. Sure, many of my conversations with clients involve talking people through the financial pros and cons of things such as moving, starting a family, or retiring, but a lot of my counsel and advice sometimes borders on being more personal. With that in mind, I’d like to share some thoughts based on tough conversations I’ve had recently with some people about their jobs.

I read recently that the average workweek in America has crept close to 50 hours a week, or 2,400 hours per year. Many of my clients seem to affirm that statistic, and sadly, make me wonder if that statistic might be a little understated. Either way, 50+ hours a week means that outside of sleeping, eating, commuting, and football, there’s not a lot of time left for anything else. I imagine I could write a couple of books on how your job can interfere with your family, friends, health, and faith if you’re not careful, but I’m just a humble blogger. So to summarize, let me just say that legendary adventurer and intellectual, Mark Twain, provided one of my favorite quotes as I went through school: “Don’t let schooling interfere with your education.” I bet he’d offer something similar in regards to work and life. I might even speculate that he would have said something along the lines of: “Don’t let work interfere with your life.”

“There is a limit to how much I’m willing to work no matter how much they pay.”

“If I quit working, I’ll have to spend time with my wife.”

 “Since I’ve retired, I thought I would have heard from my former co-workers more.”

“The way I’ve worked, there’s no way I’ll make it past 80.”

“I have to sleep on Sundays, or else I’ll never make it.”

Unfortunately, those are all quotes I’ve heard from various acquaintances, clients, and friends over the past few weeks, and frankly, it makes me very sad. My parents raised me to give 100% towards everything I do, and I’ve made that mantra part of my core personality, but as I’ve gotten older, I’ve also learned there is an important caveat to always giving all that you possibly can. I believe there is only so much one person can give, and I know you only live for so long, so if you’re giving too much to your career, chances are you’re not giving enough to another area of your life, whether that be your own happiness, your own health, your family, your friends, or your faith.

Just as I would never have the audacity to pressure someone about what they should do with their money, I would never tell someone how they should live their life. One of the differences between being a trusted financial advisor and a broker is that a trusted financial advisor is supposed to be more interested in your overall well-being than just your money. In short, I believe it is my duty to do what is best for clients, and as you might expect, what is best for someone personally and what is best for someone financially isn’t always the same thing. I don’t take lightly the opportunity to help people talk through what’s going on in their personal lives and to help them consider the current and future financial impact of any decisions they’re thinking about making. Seeing people go to less financially lucrative jobs that give them weekends, seeing people take that family vacation they kept putting off, and seeing people change careers to something they actually find enjoyable and meaningful makes me happy. In my opinion, you need to put food on your table and a roof over your head, but life is too short to let work ruin your life. 

As I’ve said before, I love math, numbers, history, and trying to keep up with all that’s going on in our crazy little world, but I do what I do so that I can help people. If today’s post speaks to you, I hope you’ll give it some serious thought. If you need a neutral party to listen or to help you think things through financially, or even personally, please know I’m here for you.


September 16, 2014

Why I Don’t Fix My Own Car

Credit: Naypong
A question I’m sometimes asked that I don’t particularly look forward to is why someone should pay for financial planning and investment management services that they could do themselves. It’s certainly a valid question, but it’s also an awkward question for me to answer because it forces me to offer what feels like an arrogant response as nice as I possibly can. The gist of my response to, "Should someone be willing to pay a reasonable amount for financial planning and investment management services?" is usually something to the effect of “Yes.”

I’ve found that most potential clients who ask this sort of question are either very fee-conscious, they are do-it-yourself investors, or both. They may like me as a person, and they may even be impressed with my initial presentation or dialogue, but they are hung up on the irrefutable fact that if they devised the same financial and investment strategy that I’m going to work with them to develop, they’d be better off because they wouldn’t have to pay my firm’s fees. They are quite right if they devised the same (or even a better) financial and investment strategy, but what I really want to tell some of them is that I don’t fix my own car!

I don’t fix my own car not because I can’t or am not smart enough to learn how to, but because I work and have family and friends. Like many of you, I’m a busy man, and I simply cannot dedicate the amount of time it would take for me to be comfortable driving a car that I worked on. Not to mention, I don’t personally enjoy working on cars, nor am I a trained mechanic. I might pop the hood in an emergency or try to fix a blown brake light from time to time, but when it comes to something like a knocking sound in the engine or noticeably out-of-balance tires, I’m out. When it comes to something as important as my daily mode of transportation that happens to be worth several thousand dollars and could impact my family’s well-being, I want an expert mechanic whose sole focus is my car.

I hope you know me well enough to know that I’m not trying to be self-serving in anyway, but I have to say that when it comes to something as important as people’s financial well-being and their ability to fulfill their financial and life goals, I really wish they’d go with a “financial mechanic.” Whether you don’t understand finances, don’t want to understand finances, don’t have time to understand finances, are incredibly fee-conscious, or are a do-it-yourself investor, I really wish you’d let someone help you or at least occasionally offer a second opinion. Maybe from time to time you’ll want to fix a blown “financial brake light,” but when it comes to a knocking in your financial engine or an out-of-balance investment portfolio, wouldn’t you like some professional help?

Prudent, long-term investment advice can absolutely be a huge deal, but don’t underestimate the potential financial and emotional value of financial planning and wealth counsel. Figuring out a way for new parents to know they will be able to send their child to college is worth something. Figuring out how to implement a little-known tax strategy that saves real dollars is worth something. Having someone to convince you the sky is not falling some years and not to go all-in at the top of the market cycle other years is worth something.

As I said earlier, I’m not trying to be braggadocios in any way, and I’m not trying to pressure you into seeking financial advice from me or any other quality advisor out there, I’m simply trying to make a point. When I don’t feel well, there are some things I’ll try, but at the end of the day, if I’m still not well, I’ll go see a doctor. When it’s somebody’s birthday and I need a cookie cake big enough to feed a small army, I'll go see a baker. When something isn’t working with my car, I’ll go see a mechanic.

Do what you do, but please be careful if you fix your own car.


September 09, 2014

Savings is a Bill!

Credit: stockimages
I’ll be the first to tell you that I have some quirks. For example, I have to write out a to-do list every week, my office desk has to be clean before I can go home (I throw stuff in drawers), and seeing a lot of unread emails causes me a lot more angst than it probably should. Another one of my quirks is that I cannot stand unpaid bills. Paper or electronic, if a bill comes in, it gets paid that very day (unless I’m on vacation or seriously ill). Maybe you’re not quite as crazy as me, but if you’re reading this post, I trust you pay your bills pretty promptly, too.

My wife and I are also pretty good savers, but even I must admit that my love for saving money pales in comparison to my hatred of unpaid bills. That’s why when I heard about a new approach, or more accurately, a new twist on how to think about saving, I got excited. The twist is this: What if we viewed savings as a bill?

When the power bill comes in, I pay it. When the mortgage statement comes in, I swear, and then I pay it. When my wife’s credit card bill comes in, she pays it. At the end of the pay cycle, or month, or year, we usually have a little bit more income left over than we have expenses, so we try to save it, but that doesn’t always work out. Luckily, my wife and I have been blessed to have enough coming in to be able to save a little, but we also have to constantly work at being disciplined and diligent enough to save. Even though we’re pleased with our savings efforts, at times, we could do better, and I bet viewing our savings as a bill would help.

The “savings is a bill approach” is not earth-shaking, and it’s certainly not complicated, but if you or your family are struggling to save enough to meet your financial goals, or to save at all, I’d recommend you try this tweak. If savings is a bill, it comes out at the front of the pay period, not at the end. If savings is a bill, it’s a regular expense and must be viewed as a recipient of part of your income pie, not just the residual crumbs. If savings is a bill, I bet you and I will both save more, and more regularly.

Sorry, but I’ve got to run. The water bill calleth!