Month: August 2019

Letters To Our Children #3: The Outlines of Planning

© Can Stock Photo / gina_sanders

The object of planning is to figure out your primary aim or goals in life, and what you need to do to get there. The habit of rethinking these things from time to time and assessing your progress keeps you on track.

It is helpful to think in terms of narrative – stories – that describe what you are thinking about. For example, if your story involves retiring to a home in the mountains, your life between now and then will be shaped by that goal. You might vacation in your intended destination, get a feel for the lifestyle, the real estate market, activities, how your life might look in retirement. The narrative may motivate you to do what you need to do to make it a reality some day.

No matter how distant your goal, you’ll be better off if you know how much wealth you might need to get where you want to go. So there is some arithmetic and financial planning to do.

Getting down to details, we think there are several broad categories that need attention in a comprehensive plan. People are better off when they think about and manage:

• Human capital, or earning power, and careers.
• Investing wisely, managing financial assets.
• Spending well, managing the budget and liabilities.
• Residential plans, where do you want to wake up every day?
• Educational funding plans for children or other relatives.
• Retirement intentions.
• Exposures to loss.

In subsequent letters, we will get down to details in each of these areas. Clients, if you would like to talk about this or anything else, please email us or call.


Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

Convention Time Again

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One of the best and biggest gatherings of financial professionals is coming up. LPL Financial’s annual Focus Conference presents a number of opportunities to gain education, perspective, and more.

Because we 16,000 registered representatives are free to build our businesses in accordance with our own principles and interests, a wide range of presentations are held. These are conducted by an incredible array of company and industry talent, as well as peers.

Our investment philosophy and portfolio management operations are mature. We’ll be looking for ways to enhance our productivity and speed of execution, as well as potential new research and information sources.

We have a deep interest in communications theory and practice as applied to the 21st century venues we use to keep in touch with you. Fortunately, some of the most talented people in the industry (maybe the world) will be available. They understand what we’re doing at 228Main.com, they have helped us all the way along, and we expect to make more progress on our plans for the future.

The cast of characters includes communications professionals in LPL departments, as well as specialized consultants like Scott McKain and Amy Florian. McKain is the author of ‘Create Distinction,’ a business best-seller that has inspired us over the years. Florian is an expert in helping advisors communicate more effectively with those who have experienced loss or difficult transitions. I’m looking forward to working with them again.

Over my long association with LPL, I’ve been fortunate to build close relationships with the leadership team. Most of this happened in the last four years, as many people in managing director and executive roles became readers and followers of our blog and social media. As we sort out the best structure for our business going forward, these connections are a great help.

I have breakfast and lunch meetings scheduled each day of the conference with key players on my LPL team. With all this, plus gatherings with friends and colleagues from around the country, it looks to be another exceptional experience.

Clients, if you would like to talk about this or anything else, please email us or call.

Letters to Our Children #2: The Journey

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This project is rewarding, from our perspective. We are crowd-sourcing the topics for these letters to our children about money and life. Your response has been terrific.

A wise person among you suggested ‘enjoy the journey’ is key. It makes sense to talk about this early in our series, since it has everything to do with how we go about life. The implication is that the journey, not the destination, is the important part.

When you think about it, arrival at a destination (or achievement of a goal) is a temporary thing. Once the goal or destination is reached, you’re there. Then what? A new goal, a new destination. We spend far more of our days on the way than in actually arriving.

In financial terms, the satisfaction of saving something every payday is a way to enjoy the journey. The destination, perhaps a pot of wealth big enough to retire on, is a long way off during the early and middle phases of your career. It is hard to focus on a destination that may be decades away. It’s much easier to get in the habit of enjoying small steps along the way – the journey.

Recently, in the security screening line at the airport, a fellow traveler in an adjacent line loudly inquired why the conveyer belt on the baggage scanner up ahead was stopped. The identification checker replied they did not know. “Well, don’t you think you better go find out?” Of course, the belt frequently stops when additional scrutiny of an item is needed.

The traveler immediately in front of me got to the identification checker, who asked “How are you today?” The fellow quietly replied, “Terrific. I’m grateful I’m not THAT guy,” nodding toward the foot-tapping, sighing, unhappy person. All within earshot were smiling; the dyspeptic was unconscious of his role in the conversation.

This vignette is a case study in literally enjoying the journey—or not. It’s about making the most of where you are, what you are doing, who you are with.

Our focus in this series will be more on the process, the getting there, the journey, not checklists of goals one ‘should’ accomplish. We believe this is the happier path.

If you have questions about this or anything else, or more topic suggestions for this series, please email us or call.

More Lessons from Moneyball

© Can Stock Photo / findog822

Michael Lewis’s book Moneyball turned 16 over the summer. In 2015, we wrote about the contrarian lessons we noticed in the Moneyball movement. The Oakland A’s won by using data to make roster decisions, favoring things like on-base percentage over batting average. Then, after the rest of the league adopted the A’s process, the 2015 World Series champion Royals won by bucking the trend and not following along.

We’ve found another lesson within Moneyball that applies to us—and you. Oakland A’s general manager Billy Beane rarely watched the product he helped put on the field to see how it performed. This may seem unusual (who wouldn’t want to watch baseball as part of their job?), but Beane had his reasons.

In a 2014 interview for the Men in Blazers podcast, Beane explained that he didn’t watch games because he did not want to do something about it in the heat of the moment. “When I watch a game, I get a visceral reaction to something that happens—which is probably not a good idea when you’re the boss, when you can actually pick up the phone and do something.”

Beane continued by saying doing something “probably isn’t logical and rational based on some temporary experience you just felt in a game.” This has meaning to us.

We all know that the market goes up and down, and we don’t find watching the ticker each second of the day to be helpful. Like Beane, we’ve strategically built our portfolios for performance over the long term (no guarantees), and we’re willing to ignore a hiccup from a star on occasion.

Like Beane, we can remove ourselves and our initial emotions from the equation. Then we can focus on only the moves to better our “team” and its goals in the big picture.

Clients, if you’d like to talk about this, or anything else, please email us or call.


Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.