“It just kind of got a way from me.” My mentor, the late Jim Rohn was fond of re-telling a story that you do not want to work with an advisor who cannot account for their personal funds.
I read in Bloomberg News that “Kremlin auditors reported in June that two-thirds of the money Moscow sent Crimea last year for road building couldn’t be accounted for.”
Granted, this is much worse than realizing you spent $953 at Starbucks over the last three months. I’m pretty certain that there was a fair amount of graft, payoffs, and out right theft. Yet, it makes me think that your advisors must be disciplined wealth builders if they are to advise you to do the same.
After all, saving and investing for a retirement with financial abundance takes discipline, focus, and determination. It would help your chances immensely if your advisor possesses those traits personally. Look around you. Most Americans are not wealthy or “well off.” So many spend and do not think about putting funds aside for tomorrow. Focus and determination is about as common as common sense. My dad used to say that if common sense was so common, why didn’t anyone have it?
Back in the early 1980s, I remember reading a finance textbook that told a story about a young stockbroker who advised a multi-millionaire client who arrived for meetings in his Rolls Royce. Interestingly enough, the young broker left his small studio apartment each morning and rode the crowded subway to work. I would muse at the idea that the broker had no business advising someone who had amassed such wealth.
Dan Kennedy taught me that most of the information we have learned about wealth has come from sources that did not possess wealth, such as a teacher, parent, or friend. An adjunct professor at a community college might be earning $65,000 a year or less. They stand at the front of the room teaching students the important rules of money. They teach a curriculum involving finance and money, but may have a skinny bank account personally.
Don’t get me wrong, I am not advocating you ask your advisor for a copy of their personal financial statement. However, it might be good idea to understand if the person or persons managing your wealth do, in fact, have any of their own.
A friend of mine who is in his 80s and works as a Certified Financial Planner (CFP) was asked why he still works. After all, did he not follow his own advice and no longer have to work? He smiles and replies that he is working for his great-grand kids and loves it. He could have retired decades ago, but he figured that he was a horrible golfer and his wife would tell him to get out of the house and do something. So today, he still does something and provides immense value, wisdom, and perspective to the families that he serves.
Copyright 2015 by Rodger A. Friedman
Forging Bonds of Steel, LLC