My last post, "Nailing Financial Predators," may have left some feeling like an easy mark. But what if we could take our six natural human responses to persuasion and make them work in our favor? Well, we can. Here are some ideas on how to proactively take charge and shoot that inner, sitting duck: 1. Authority - If we respond to the perception that someone has expertise or power over us, it's best to make sure that that reverence is actually warranted before heeding their advice. Seek out respected authorities on investing, such as Warren Buffett; who keeps his advice simple: "When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients. Both large and small investors should stick with low-cost index funds." 2. Reciprocity - When someone does a kindness (even with ulterior motives), we are tempted to do something kind in return. What if the good starts with us? Seek out a helpful Read on...
Nailing Financial Predators
“A prize fighter in a corner is told, hit where it hurts. Silver and gold.” - U2* Every time Tony and I have met with prospective clients who have come from traditional brokerage channels (literally, every single time) there is an uncomfortable point in the meeting where they are ashamed at the fact that they received no financial plan; no real coherent diversification strategy to minimize risks; no exit strategy as to when they can jump off the hamster wheel and enjoy the fruits of their labor; and no clear handle on what they are paying. Instead, we watch as realization spreads across their faces – they were sold something they may not have needed, paid more than was necessary and still have no sense as to whether financially they are on track. The look we get is always the same -- like they just dropped their towel and we saw more than we should have. I always try to ease their embarrassment, discomfort and anger – because these emotions can be quite damaging and may Read on...
When the Meter is Running Out on College Planning
Your child is just a few years away from going to college, and the acid in your stomach is churning. You worry if you will have enough; you're mad that you didn't focus on this sooner. Desperation is a dangerous thing. It can cause reckless behavior -- a gambler's mentality of, "Let's try and hit it big!" Of course, anything that can rocket can plummet; that's the way it is with investing. When any goal is short-term (5 years or less), the money needs to remain "safe". You can't afford to lose it now. So, what can you do? First, understand that you still have time to position yourself in a more favorable light to receive financial aid. Colleges start looking at your finances from January of your child's junior year to December of your child's senior year (the look back period -- "LBP"). Effective 2017, they are changing this period to the "Prior, Prior Year" ("PPY"); meaning your finances will come under scrutiny from January 1 of the child's high school sophomore year to Read on...