Category Archives: Financial Planning

Setting life goals

Setting life goals are a big part of working with clients. Often times, it takes more than just a simple question to examine the real goals of clients. They tend to say what they think you want to hear, or what sounds good. My anecdotal evidence suggests that most advisers accept that as they are just trying to land the business, and pushing further isn’t beneficial to the sale. In sales, your selling the vision, not reality, which is why beer commercials with great looking girls work really well with male beer drinkers. 🙂 However, in this business, I would argue that going beyond the superficial is crucial to trust building and a long term relationship. But I would also acknowledge this will cost the adviser some business and makes things harder. So you have to decide how much you’re going to push them for their real thoughts.

Diversify a portfolio

There’s this hedge fund called “SuperFund”, at first glance this seems to be a managed futures fund. This is basically a fund that invests in futures, ie. corn, oil, frozen concentrated orange juice, etc. and rolls them into the next period on a regular basis. This allows the investors access to the commodities market without the hassle of trying to buy and sell futures themselves. So as a “hedge fund” it’s not exactly typical. There are many managed futures funds out there. No need to go to eastern europe or even to another country. We have tons of them and many do take a minimal investment.

This is a solid way to diversify a portfolio (not this specific one, but this type in general). As with any investment, you need to know what you are doing, but investing in commodities is great for diversification.

The Intelligent Investor

Bill Gates commented after reading the Intelligent Investor by Ben Graham – Buffet’s bible – “It’s a simple book about bonds and compound interest. Not complicated at all” Well, it’s not complicated along the lines that Texas Hold’em isn’t complicated.

 Buffet is a big proponent of indexing for the average investor. I know you want to do otherwise, but for most people, this is the proper solution to their market exposure.

Buying a car

When buying our last car, we decided exactly what we wanted and then I emailed 10 dealers to get them bidding on getting me the car for the best price. 4 of them made an offer and I sent everyone each other’s bid to see who would go the lowest. I am pretty sure I wasn’t going to get a better price than the one I ended up with and there was little to no hassle.

Be empathetic

When you are trying to be empathetic to others, it’s often perceived significantly better if you don’t refer to yourself at all. Instead of “I understand” simple restate what they are feeling and ask them if you understood. For example, if the client says, “I am scared of losing money” your reply of “I understand” is okay, but a better, more empathetic response would be “So you feel that some investments are not right for you because they have a high potential of loss? Is that right?” The “I” in any answer makes the conversation about you not them. The topic is them, stick to it.