I have a terrible habit of constantly trying to “fix” everything. I ironically say that I am attempting to “solve the world’s problems” except sometimes I think that, in my pride, I might just believe that that is exactly what I am doing. No one on the planet knows this better than my wife who is the most patient, long-suffering person that I know. She daily reminds me that not every discussion we have requires a solution especially when it is in regards to something emotional and personal.
I do not believe that I am the only person who struggles with this compulsive need to find a solution to all of life’s problems (in fact, I know I am not) but it can be a detrimental personality trait in certain contexts. In a social setting, it can make you seem cold to the feelings and emotions of the person that you are speaking with. Rather than feeling like you understand their struggle, they get the impression that you want to tell them how them how to live and solve their issues. In a professional setting, this attitude can make it seem like you would rather talk about yourself and your own opinions than those of your prospective customer, client or partner.
This line of thinking has taken a particular hold in the world of financial advice. This is clearly evidenced in thick “financial plans” and pages upon pages of stats and statistics that mean almost nothing to the person that they are intended for, the client. Financial advisors have taken the approach of “fixing” all of their client’s financial woes now and into the future. For their part, the average consumer has accepted that this is the role of financial advisors. To fix all of their problems and build them a bulletproof financial plan that cannot be brought low by the whims of the market. However, just like many of the discussions that I have had with my wife, “fixing” the problem is often not the answer.
I recently read a book called, “The One-Page Financial Plan” by Carl Richards. In it, the author adeptly explains that all of the work that goes into creating a financial plan can (and should) be distilled into a one-page executive summary. The one-page plan has a lot more to do with taking actionable steps towards the financial future that you desire than providing a bulletproof guarantee that you will succeed (with a 3-inch stack of documents to back it up). The fact of the matter is that there are no guarantees in life (besides the old cliché, death and taxes) so why would you plan like there are?
I recently had the opportunity to watch an interview discussion with Carl Richards who made the striking statement that the only thing that we know for certain is that our plan is wrong. At first blush, this may feel like a fatalist attitude but it is the truth! Think about it, did any of your plans, both personal and professional, come to fruition in 2020? You may have been one of the lucky few who was able to meet your financial goals despite the global pandemic. However, you were likely forced to pivot or make changes in order to reach those goals. If that much change and disruption can happen in one year then imagine all of the events that will take place between now and when you intend to retire. The possibilities are endless!
When people ask me what I do for a living I have grown fond of using the phrase, “We answer the question, am I all set?". I still love that phrase and think that it represents us well however, I need to work harder to make it clear that this phrase encapsulates our working relationship not a 50-page financial plan document. The truth is, there is no financial advisor on the planet that can fix all of your financial problems in a single one-hour meeting. There is no stack of paper that will guarantee you the life you wish to lead. No one can tell you with absolute certainty that your financial plan will not meet roadblocks or your situation in life will not fundamentally change before the time you turn 65. Life changes, your goals change, your career might take a different direction and a financial advisor cannot predict any of those things! However, a real financial advisor can act as your guide to navigate the difficulties in life. Helping you to feel “all set” at each step of the way. One of the other advisors on the Zoom call with Mr. Richards today described this as taking the role of a “financial Sherpa”. Being the person that, while they cannot control the state of the world around you, does have the knowledge and ability to help you navigate whatever life throws at you.
There is no one solution for every single individual’s financial life. There is no “fixing” the unknown risks that lie ahead. There is however, a common understanding between a financial advisor and their client that, while they do not have all of the answers, they will do their best to guide them through life, come what may.
Last month I wrote on the potential consequences of proposed legislation from the Biden administration regarding the tax treatment of 401(k)’s. I am by no means a tax professional and usually I stay in my own lane but I thought that I had a pretty good handle on this topic. Turns out I was wrong but thankfully I have friends who are much better versed than I on the nuances of federal tax law and were willing to help me revise my post. You can find that post here in all of its (edited) glory.
Today’s song of the week is a cover that comes to us from an artist that I have never heard of before but was suggested by my brother in law. I love finding new artists to listen to! Enjoy!
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.