Interior Design Has Demonstrated Value

Ok, we're not talking here about your choice of furniture or your use of paint colors. Although, I must admit, I have a distinct personal passion for that topic. 

Rather, we're talking about something that I think should be important to us all.

Positive Psychology has blessed us with a wisdom. For all our inherent efforts to obtain "happiness" based on our investment accounts, or our job/pay, or bigger home, the reality remains that even with the attainment of those things, happiness still largely eludes us. It is it seems, an immutable reality that happiness breeds better performance in every aspect of our life and happiness is an "inside-out" play, not the other way around. 

In a recent article on Huffington Post Jen Grisanti takes from the recent talk at TED.com by Positive Psychologist, Shawn Achor (you can and MUST view the video here) the knowing that "the external world is not the answer for happiness."

That is why in wealth management, we refer to it as "interior design." It's been our experience that the most financially successful clients are those who begin with the notion that they'll first decide what their lives would be like were they their happiest and then, match their financial goals to acheive that life. These are almost always, the most grounded investors, the least likely to panic, the least likely to "quit" when things are getting tough in the markets. They then, invariably wind up being the folks who manage to "get it right" the majority of the time; in markets when they should be and not out when they shouldn't be. 

They're successful not because of a special wisdom about finance or tax policy or the economy or the global financial crisis. They're successful because their goal is to build their lives and they're simply using their resources to meet that goal. 

If you, as we do, start with the focus on the happiest life your plans will be much better, your investments more based on common sense and your willingness and ability to withstand the "whirlwind" of financial news and the whims of the financial markets more centered. Afterall, isn't the plan to live the life you want more than to outperform the S&P 500?

I have to thank Justine Musk for posting this to her Facebook page. You can read Justine's blog at www.justinemusk.com. 

I'd also highly recommend Shawn Achor's book, "The Happiness Advantage" which you can buy on Amazon or from your i

Great Advice Isn't Like Pornography

It's often said of pornography that "you know it when you see it." Not the same can be said for great advice. 

What constitutes great advice by the way? That's a good question because for all the advice that's out there, it's my opinion that not much of it would be classified as great. Courtesy of Google Images

In a recent post, Dan Rockwell of Leadership Freak, shared with us 7 Ways to Identify Great Advice. Since I've linked his blog on the topic, I'm obviously not going to share all seven ways with you here. But, I would like to comment on two of them that particularly resonate with me because I see them almost every day at BCM. 

First, in order for advice to be great, it has to have your best interest at it's core. All to frequently, especially in the realm of personal finance, the advice that you get has someone elses agenda at it's core, not yours. Advice that has someone else's agenda as it's driver can be both destructive and dangerous. 

Second is something that I remind clients and prospects of constantly, namely, "I can't change you!" To be sure, I can give you some motivations to change behaviors or perspectives and through that lense, I can hope that some behavioral tradeoffs get made. But, fundamentally, I can't change clients directly in any way. The reality is that my client's change themselves, I don't change them at all. 

Advice that results in positive behavioral change is among the most benefical and powerful kind of advice of all. 

I hope that you'll check out Dan's blog here so that you can be better skilled at recognizing "great advice" when and if you see it. 

It's the kind of advice we give every day to the clients of BCM. 

Why You Really Didn't Blow Your Chance To Retire.

In a May 2nd, post on Motley Fool @msnbc. com, the authors try to convince us that we've missed a huge opportunity, perhaps a once in a life time opportunity, to provide for our financial futures because we were under allocated to stocks and/or didn't contribute enough to our retirement plan.

As is often the case, the authors help us understand the error of our ways by noting that we need to be fixated on making the most amount of money that we can on any day, at any given moment and in any given market. AND, true to form, they manage to provide us with some (suspect) remedies which, as you might imagine, play perfectly into "creating transactions" game which keeps Wall Street running. If you missed your best chance to create a sustainable retirement, you can fix it by simply [a] contributing more to your retirement plan and [b] picking some bullet proof stocks. Wait a minute, there are bullet proof stocks? Oh, ok, there are lists of bullet proof stocks (and funds, and UIT's and bond funds, and hedge funds, and can't miss land deals) but not actually any bullet proof stocks, just lists of them.

Ironic that the one salient theme would actually work, to monitor what you pay for your investments because overpaying results in almost guaranteed returns, even made the list. Odd that the one metric that might actually ensure that you make some progress came in third. That's sort of like telling Titanic travelers that they should [a] buy some floaties, or; [b] buy some long underwear and lastly, stay home. They're all good recommendations but an appreciative re-order of those recommendations seesms in order to me.
Amazing it is that you can write an article about the fall of someone elses retirement and never mention either RISK or GOALS? How exactly does that work?

Lest we forget, 2008 came about in world where RISK and GOALS weren't important. Greed was.
When you're "success" is measured in whether or not your greed was satisfied any successes you have will be short lived.

You'll blow your chance at retirement if you can't define what it is or how much it will cost.

As noted many times in my blogs; if you don't know what it will cost, you can't tell how much it will take to fund it. No amount of contribution will ever be "right" unless you know how much you need and no "investment selection" will ever be right until you know the rate of return you need to fund your goals.
If pension plans can take too much risk and wind up either overfunded or under-funded, why can't you?