The First Step Toward Success Is Defining It.

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In his post on Leadership Freak, Dan Rockwell draws some pretty stark comparisions between new beginnings and the wealth management process. I guess that's because the two are so similar. 

"Clarity instills confidence."

"Are you reacting aginst or reaching forward? Reacting seldom takes you where you want to go."

These are also quotes from Dan's blog post; "10 Questions That Give Vitality To New Beginnings."

As the realm of personal finance has come to grips with the fact that the return on the markets might not always be the thing that takes you where you need to go, they've finally latched on to the two things that can make a difference in financial success or failure, namely; controlling what you spend and planning. 

Every day it seems, more and more articles are written on why it's important to know what your future will cost, if for no other reason than if you don't know you can't ever tell if you've got the money to afford it. 

Most times, clients look at the effort of planning for their future and see the work it might take and it scares them away. What they need to see perhaps is the clarity and confidence. Most times, clients come to me to solve a problem and yet, the conversation is about reaction, not about reaching. 

If you're unwilling to do the work necessary to define success, it would appear to this observer that your chance of stumbling upon it may be harder than you think. 

And later than desired as well. 

The first step toward success will always be defining it. The next one will be measuring it. 

The New York City Marathon and Your Investment Portfolio

You can tell when there's a lot of misinformation when it could be a monthly blog topic and you'd never have to devise another one to write about again. 

As the markets start to improve, the flood of "the next bad news" has been surplanted by "the next best thing you can do." And, that's what the financial periodicals and websites are starting to spew out. There's all sorts of recommendations, buy high-dividend paying stocks (isn't it odd that right when tax rates are poised to increase that there'd be a recommendation to buy stocks who generate taxable distributions?) or go for "yield" to keep your income up (better known as the "straight-jacekt approach, it never works) or get entirely out of bonds and cash and put everything you own into stocks because "now is the time."

Every year, thousands of people run the New York City Marathon. Probably less than 1% of them are running it to win it. Everyone else, God bless them, is out there for some other much more personal reason, and that's exactly my point. 

The financial media (and way too many investors for that matter) come to a common worldview that what every investor is doing or must do, is to attempt to make as much money as they can at every turn of the market, irrespective of goals, timing to reach those goals or perhaps more importantly, the risk involved. Just like the marathon, most investors should be basing their investment decisions on more personal matters such as their lives, their financial security and their willingness to accept risk. Not on maximizing the return on their money at any cost. 

And, thankfully, most of the people that run the marathon with no hope to win it, still plan on winning. But they want to win something less newsworthy, but equally as valuable, their own progress in their heads and hearts. 

Winning takes on many forms. Losing money takes on one. When it's gone, it's gone no matter what the race may have felt like at the beginning. So why not focus on your goals not someone elses. 

 

Clarity Counts

Of all the things that advisors can do for clients, among the most beneficial is clarity. 

When we work with others in collaboration and dialogue, we win when we've arrived at clarity. 

As this blog from Leadershipfreak suggests, clarity must come before decisions. And so it is in the planning profession. Without clarity, client's have a hard time finding a space for effective decisions. 

In your life, in the time with your family and friends, as we counsel those around us and as we engage in that persistent conversation with our own self; seek clarity. 

Here's to a great Holiday Season and I hope that you find this blog something to ponder as the New Year approaches. 

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