everybody wins

In It Together

We subscribe to the theory that the better off you are, the better off we will be. More broadly, we believe the greater the wellbeing of our community and society, the greater our own wellbeing.  

Our experience suggests we are on the right track. 

And it stands to reason. Every retiree needs healthy, productive workers to pay Social Security taxes on good earnings. Every business endeavor needs customers with money. Every level of government from the village to the nation requires taxes from productive workers and businesses to offer its basic functions.

America has perhaps been the place where the highest fraction of the people could unlock the greatest part of their own potential. We think this explains our prosperity relative to nearly all other countries. 

Here’s a thought experiment. How would things be different if left-handed people were no longer permitted to engage in any occupation which required tools, even a computer? 

If you are left-handed, this would clearly be a bad thing. A household with two different adults—a left-hander and right-hander—would have a tougher time financially than they would otherwise. (Right-handed people would have “less competition” for better jobs, but would they be any better off overall?) 

When you think about it, a system that discouraged or limited a tenth of the population would hurt us all. To carry on with our example, consider how our world has been enriched in many ways by unique talents of left-handers: Leonardo, Einstein, Helen Keller, Marie Curie, Jimi Hendrix… even Oprah and Lady Gaga!  

And all those less-famous lefties going about their lives, doing ordinary things to make their own lives more extraordinary, have been responsible for untold wealth and progress. 

Certainly, our nation and our world would be poorer, with lower total income distributed more unevenly.

This is why our surest path to the brightest future includes working to expand opportunity to the whole of our people—letting everyone on the ladder, with a fair shot at the next rung.  

Discrimination in access or pay or opportunity makes us all poorer. Inclusion makes us richer, and yes, even when left-handers have a fair shake. And women. And people of color. And anyone else you can think of. 

America’s historic source of strength and prosperity—being the place where people can unlock their own potential—can be made more true for more of us. And it will be to the benefit of all of us. 


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Win, Win, Win

© Can Stock Photo / kk5hy

Remember ‘win-win thinking?’ This phrase became popular in business a long time ago to describe interactions in which everybody comes out better. Our favorite example is as familiar as the grocery store. The grocer wants your money more than he wants the can of beans. You want the beans more than you want the money. A trade is made; everybody wins.

“Win-Win” is a fair description of how our business works. In our investment advisory accounts offered through LPL Financial, we are compensated by a percentage fee on account value. Our best path to growing revenues is growing account values. When you do better, we do better.

In the old brokerage model, products are sold to investors for a one-time commission. We think of this as the Good Luck plan, because the salesmen get paid up front and can wish you good luck, as they head down the road to find another prospect. They have no skin in the game, so to speak.

This does make sense in some situations. If you know what you want and do not plan on trading it, the one-time commission model probably works well for you. In a brokerage account, after you pay the sales charge you can hold on to your investment without paying ongoing management fees as you would in an advisory account.

However, we are in the business of trying to figure out how to grow your bucket, which often involves many trades over the course of a year. This creates a conflict for us: the more we trade in a brokerage account, the more commission charges add up, which is great for us but not for you. But our advisory accounts do not pay us on commission. When we switched to focus on advisory business, your interests and ours became much more closely aligned: we were free to make trades we believed would help you without worrying about commission costs. Life got simpler for us and better for you, we believe.

Win-win thinking also led us to introduce longevity discounts to our fee schedule. The longer we are in business with you, the better we understand each other. Longer time horizons and longer relationships are good for you and good for us. Another win-win deal.

It runs deep. From time to time we find that a client is paying for advice which they do not care to follow. This is win-lose, not win-win. We endeavor to get out of these situations as soon as we figure them out.

The biggest advantage of win-win thinking is that all of our energy can be devoted to striving to improve your situation. Relief from worrying about our position is quite liberating. Clients, if you would like to talk about this or anything else, please email us or call.


The opinions voiced in this material are for general information only and are 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.

Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs.