|Written by John D. Buerger, CFP®|
|Tuesday, 23 March 2010 11:49|
Why do YOU do the work you do?
This is an important question because your "Why" usually is the determining factor in your "How Much" ... as in how much you apply yourself to your work, how much value you create through your work and consequently how much money you make in payment for your work.
The stronger your "Why" ... the better your "How Much."
"The secret of success is making your vocation your vacation." - Mark Twain
We all love a good vacation. If you can get your work to stir the same emotional response that comes with your greatest vacation memories, you will naturally find yourself enjoying life more every day. Your happiness has more to do with mindset than anything (see my blog post on SHIFT).
This week's blog post is a little more personal than usual as I want to share my "Why" and more generally, the "Why" of the elite Fiduciary Financial Planner (as opposed to the much-more-common financial salesperson).
"I was able to sleep through the night last night for the first time in years!"
Frankly, I would rather that people NEVER had the problem where their financial situation kept them awake at night, but sadly sleepless nights and general financial worrying are the primary symptoms of personal finance in today's society - a condition that is not limited to folks based on their income or current savings.
Financial worries are an equal opportunity offender.
You can have a lot of income and hundreds of thousands (or millions) of dollars in investment accounts or you can have below average income and no money saved at all. It really doesn't matter. You can be male or female, professional or a blue-collar worker, well educated or not. Financial worries strike all types of people from all walks of life.
"I was able to sleep through the night last night for the first time in years!"
The person who I'm quoting here told me this just days after our very first meeting. Their case was pretty average - a little below average income and approaching retirement, some savings (no where near enough but more than many people), home, mortgage and other bills. All of these issues combined left her in a constant state of anxiety.
The solution that gave her the first sleep-filled night in years had nothing to do with a budget and very little to do with how her savings were invested. The solution was not a product or even a piece of paper with a written plan. What made the difference was how she viewed her own situation - the beginnings of a new "framework" and the process of thinking about her money differently. Once she understood her personal finances (the good and the bad) and had some ideas as to solutions for her particular situation that would work, the worrying just went away and she started to focus on the incremental tasks she needed to perform to fix her problems.
Are these people out of the woods? No way! Is their situation manageable? Absolutely! Actually, their situation was always manageable ... they just had no idea HOW to manage it or even confidence in the fact that it WAS manageable.
This is a good start - but it is not the end of the story.
Just like the medical community that pitches a purple pill, or a type of surgery or treatment as the solution to all medical maladies, financial advisors promote products as the solution to all of your money problems. That product can be an insurance policy, a mutual fund, a contribution to an IRA, a legal document (like a trust or incorporation papers) ... OR EVEN A FINANCIAL PLAN.
But each of these products only treats a symptom of (financial) pain. To get rid of that pain for good means making a SHIFT in your choices. If you are fat, you need to consume fewer carbs. If you are in pain, you may need to change how you walk or sit or move your head. If you are broke, you have to change how you think about money and where you spend the dollars that you have.
I cannot emphasize enough that the financial plan - that strategy that we put together and the written document you should receive - is NOT the end solution. It is the process that follows that matters. While you may get rid of those sleepless nights for awhile, the worries and struggles will return if you don't make the SHIFT to a new way of thinking about your money. Without that SHIFT, you'll make the same choices you've always made and continue to "enjoy" the same (crappy) results.
Carl Richards, one of the great, forward-thinkers in the financial planning industry points out that a financial plan (like any plan for business, finances, sporting games or even air flight) is based on assumptions. Those assumptions are based on past experience and are almost assured to be wrong in the future. (Read Carl's article in the New York Times)
A good plan is not set in stone. It is fluid and can easily be adjusted for changes that you will encounter. As Carl points out:
Think of this as the difference between a flight plan and the actual flight. Flight plans are really just the pilot’s best guess about things like the weather. No matter how much time the pilot spends planning, things don’t always go according to the plan.
It is about the course corrections ... not the plan!
It is about the process ... not the product.
I prefer to look at a financial plan as a "framework" through which you can view your financial situation each day - not unlike a good pair of night goggles in a place where there is no moonlight and no electricity so there is very little ambient light.
You're fumbling around in the dark with the tools you are given - touch (limited by the length of your arms), sound (useful but easily misguided), smell (not always even useful) and sight (useless unless you have those night goggles).
Working with a fiduciary professional turns on the night goggles and allows you to see details in your surrounding environment about which you could only guess before. It does also have it's limitations. You can't see color very well (just light and dark) and you have very little peripheral vision so it is easy to be blindsided unless you pay attention to the other sensory data.
Clearly, life in this situation is better with the night goggles than it is without them ... but there is still lots of room for improvement.
Last week I had the chance to meet with a few other fiduciary financial planners in our area. While each of us has a completely different outlook and emphasis to our business, we all share some common traits:
--- We always put our client's best interests ahead of our own because it feels right to do so.
--- We all agree that planning is an ongoing process ... not a one-time product ... and a process we enjoy being a part of.
--- We also all enjoy being a part of our client's growth and prosperity - forging strong relationships with people we like to be around.
Being a good fiduciary financial advisor is something for which only a few people are cut out to do. It requires refined analytical skills; mastery of reams of data, laws, tax rules and product types; objectivity; compassion; the ability to connect with people at their level and get around their prejudices and misinformed perspectives without getting into an argument. It also requires a good understanding of human psychology and motivation - because the results are only as good as the implementation of the strategy by the client (and the adjustments along the way).
Clearly, there are plenty of people in this business who have no need or desire to forge the deep kind of relationship I enjoy with my clients. Sadly, these "advisors" still can make very good money by selling products that are doomed to fail, so they stay in the business and continue to force their wares upon an unsuspecting public. Buyer beware!
Because of how this system is set up, and the sheer number of sales-oriented "advisors" in the business, the odds of your finding one who can actually take you to the next level are pretty low. There are more than 600,000 people registered to sell financial products. There are only 50,000 of us who adhere to the fiduciary standard ... and not all of them seek to help people at the level I have just described.
But for those elite few who do this for the reasons I have just outlined, there is nothing better than to hear a client say, "I had no idea how good it could feel" or "I am so relieved" or just a sincere "Thank You." Heck, I get a huge kick out of just seeing their demeanor change, the sparkle return in their eyes or a big smile and a hug.
It makes my vocation a great vacation ... every day!
|Last Updated on Tuesday, 23 March 2010 20:33|