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MP

Guiding the Next Generation of Financial Planners

Health and Finances

March 24, 2016 Guest User

Ask Steve Jobs, wealth don’t buy health.
- Pusha T, Exodus 23:1
 

I have been listening to Titan: The Life of John D. Rockefeller, Sr by Ron Chernow on audiobook. It is quite long, but I am almost done. Something struck me recently that has stuck with me of late: despite being one the richest men of all time, Rockefeller’s entire family and in-laws battled serious health problems for a significant portion of their lives, with John Sr being the lone exception. On a related note, Rick Ferri (@Rick_Ferri) tweeted on Tuesday of this week, “Today is my 58th birthday. Here is one thing I learned so far in life; if it’s not your health, don’t worry about it. You can get over it.” Between the Rockefeller situation and the Rick Ferri tweet, it is clear that, as Pusha T says in the song Exodus 23:1, certain financial goals do not matter if one is in poor health.
 
Health is everything, both physically and mentally. The relentless pursuit of money or love or whatever it might be won’t matter if one has a heart attack at 40 years old. Frequently, we put the cart before the horse when it comes to our health. That is, we try to fix problems rather than proactively addressing them before they become problems. 
 
This is also true for our financial health. Just like the best medical advice is to eat healthy and exercise, the best financial advice is to spend less than you earn and save/invest the difference. The perfect portfolio can’t fix a spending problem, and the perfect medicine can’t fix a sedentary lifestyle. One must address the tree at the roots, not the branches. 

Unfortunately, this is easier said than done. Unhealthy food is often cheaper, quicker, and more convenient. It is tough to stay disciplined to exercise after a tiring 10 hour day at work. Similarly, lifestyle creep - raising one’s standard of living as discretionary income rises - might be the biggest challenge people face financially. It is crucial to take conscious steps to combat these obstacles head on, and prioritize building a strong foundation in order to live a long healthy life, financial and otherwise.

In NexGen Advice Tags Joe Markel
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Why People Become Financial Planners

March 16, 2016 Guest User

Aside from my very real prospects of becoming a professional magician, Financial Planning is the only profession I have ever wanted to enter. Answering the question “why did you get into this field?” is going to be different for everyone.

If you approach this question by looking at data and tracking trends, you can find an answer quite quickly. Around $30 trillion in wealth is going to transfer over the next 30 years, this industry is currently populated more than 50% by advisors over the age of 50, and, by pulling The Bureau of Labor Statistics into the matter, we can note that job openings for Financial Planners are expected to jump by almost 30% by 2022.

But I don’t really think any of the aforementioned data points have anything to do with why people become Financial Planners.

I think it all starts with the desire to help people, to build relationships, and to be happy.

Finding Happiness by Helping Others Find Theirs

Some say that there is a secret to happiness, which is this: the key to finding happiness is to focus on making others happy. A majority of financial planning articles and career posts are about professional or academic topics: reading, investing, or general career development. One can spend hours pouring through articles about how young planners can differentiate themselves, receive equity or inexpensively launch their own practice. However what often gets lost is why people are in this profession to begin with, why financial planning is consistently listed as one of the most rewarding professions while only 3% of financial planning professionals are in their 20s.

Financial Planning at its core is the navigation and development of balance between life and money, frugality and spending, delayed gratification and living in the moment. It is successfully developing the skills needed to identify the line that communicates to people that it is ok to trade some time in your 80s and 90s for more fun in your 20s and 30s, to an extent. The goal of this career is to help people live the lives they want through proper management of their financial resources. At the end of the day, I see this profession as the means to make others happy.

Whether or not money can buy happiness, it can buy freedom, and that’s a big deal.  Also, lack of money is very stressful.  In almost all ways, having enough money so that you don’t stress about paying rent does more to change your well-being than having enough money to buy your own jet.  Making money is often more fun than spending it, though I personally have never regretted money I’ve spent on friends, new experiences, saving time, travel, and causes I believe in.

               - Sam Altman, president of the Y Combinator

Helping Ask The Right Questions

The best Financial Planners focus not only on client’s finances, they also encourage them to think about their personal lives. One of the allures of money is its association with mortality, happiness, and time. Carl Richards, author of The Behavior Gap, shared two tweets that resonated with me a great deal in December of 2014. First he wrote “What if you beat the index every quarter for your entire life … and didn’t meet your financial goals? Would you be happy?” He followed this up with “What if you never beat an index, but you reach every one of your financial goals… are you happy then?”

This drives home the point that a Financial Planner is there to ask clients the tough questions. Not “what type of asset allocation do you want,” or “how much do you want to spend in retirement.” Those are simple. It’s the “why?” that is challenging: Why do this? Why retire? Why maximize one’s finances? Why bother? The answers to these questions will likely change over time, but they are a starting point. Ultimately, financial planning is about trade-offs. Maybe the answers to these questions involve accumulating the biggest investment portfolio one can, but maybe they don’t. Any financial plan that focuses solely on the dollars and cents is missing the forest for the trees.

The appeal of this profession has little to do with pure math, or even dollars and cents for that matter. Financial Planning is not about managing money, it is about managing behavior. And the enjoyment is derived from helping individuals understand the effectiveness of proper allocation of resources; helping individuals live what they consider to be a meaningful life. Financial Planning, unlike other professions in the field of finance, doesn't consist of the professional pitching their strategies and plans to a board room held accountable to millions of stockholders spread across the world. Rather, the people you are helping are right in front of you. They each have their own story, their own hopes and aspirations, and their own set of problems that you have spent your career studying how to help them overcome. The scope of people you surround yourself with may be more finite, but that tends to lead to increased satisfaction and reward overall.

 

In NexGen Advice Tags Luke Seiderman
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The Ups and Downs of Relocating for your Career

February 26, 2016 Guest User

“You look at where you're going and where you are and it never makes sense, but then you look back at where you've been and a pattern seems to emerge.” 

                -Robert M. Pirsig “Zen and the Art of Motorcycle Maintenance”

There are few things more awe-inspiring for me than being able to point to something that is happening, or a decision I am currently making and say, “because of this my life will be severely altered forever.” These realizations rarely appear while the event itself is actually happening, and rarely become aware to us at all. However, if I were to ask you to list three past events that changed your life forever, I suspect you could produce them quite simply, and your brain would easily fill in the pattern.

Part of these realizations are being aware of the age we live in, one in which continents can be traveled in a matter of hours, relationships can exist from halfway across the planet, and thanks to the internet, we can be hyper-informed to each and every current event. For a majority of the time humans have been around people spent their whole lives within a few dozen miles of where they were born. Most of the people you knew were family, which was your unit or tribe, for social and security reasons.

I moved 2,745 miles from home for a job after graduating college. For a job. I didn’t decide to move because of political regimes, natural elements, or migration patterns of food sources. But because of my desire to step outside my comfort zone and attempt to learn as much as I can from as diverse a collection of resources as possible. What a thing, for that to be an actual possibility.

I distinctly remember thinking, while driving across the deserts of New Mexico with Jimi Hendrix live in Monterey playing, that by heading towards the Golden State I was changing the outcome of my life forever. Because of this move I would end up marrying a different woman, fostering different beliefs throughout my life, and set a precedent for the measures I was willing to take to learn from people that were different, in places that are different.

Uprooting your life and being transplanted to a new climate, cultural environment, and geographic landscape where you know absolutely no one is not supposed to be easy. Quite frankly, it is pretty darn confusing. With college, summer camps, and other forms of extended travel you often have a network that has been premeditated by some form of intelligent design. Coordinators of the school or program strive to make your day to day as conducive to social collision as possible. The program is designed for you to spend time making friends and to feel as comfortable as possible.  When it comes to first job out of college, there is work, and whatever the hell you want to do with the other five hours you spend awake.

After speaking with others who have made a similar relocation, the following list what I feel are the top four pieces of advice when moving across the country for your first job out of college.

Drive, and drive slow

I cannot stress this first point enough. Driving from Upstate New York to California, with all my worldly possessions inside my car, changed my life. It taught me how simple it is to strip down one’s life to a few items and be completely mobile and minimalist.

“But when we really delve into the reasons for why we can’t let something go, there are only two: an attachment to the past or a fear for the future.” 

-Marie Kondō, The Life-Changing Magic of Tidying Up

Driving also gives you a lot of time to think. For me, that time was to think about the choices I was making and how I planned to reboot my life. When people say a new city allows you to be whoever you want, they are telling the truth.

The sandbox days are over

Making friends may not be as easy as it was growing up. You used to be able to share your little plastic shovel and BAM, new best friend.

It is important to realize that initially you will know no one. Likely not one single person.

The person who interviewed you may be the only other individual who knows your name. Understanding that nobody is going to fight for you to socialize and meet new people is very important. If you decide to spend every evening and weekend locked in your tiny apartment people will let you.

The most frequent question new transplants ask me is “how did you make friends?” Besides the obvious resources such as social media, meet ups, and co-workers, all I can recommend is to get out and explore. Learn your new city. This is your home now. Like-minded people exist everywhere, don’t be afraid to go and do the things you love to do; chances are you’ll meet other hikers if you are hiking, and other runners if you are running.

Mentally prepare yourself for an extended period of growing pains

There are so many things that everyone has to learn about being on their own, and those things are amplified without the nearby support of family and friends. I never knew the value of alone time and ways I could keep myself occupied and productive until I spent a few weeks without knowing a single person within thousands of miles.

It takes longer than people realize to become comfortable in a new environment. Every new stage of my life (high school, college, real world, moving to California), has taken me over a year to fully assimilate. It is important to completely immerse yourself in your new environment with the knowledge that it's going to be a rough start, but being comfortable and feeling like your new city is your actual home comes AFTER the new experiences that can often be uncomfortable. A lot of people move to a new city as an escape from their old life, which I feel is the wrong mindset. Moving is not an automatic cure for anything. If you had deep-seeded issues before the move they're not going to magically disappear. Having a growth mindset, rather than a fixed mindset, is essential. You have to take action to help yourself. Move to a new city for the adventure.

Recognize that things will be harder than you think in the short run and easier than you think in the long run

Acclimation will not happen over a matter of days, weeks, and perhaps not even months. Your mind and body will reject it (I even got physically sick). It will initially be very overwhelming and confusing - this is because everything is new. It takes time to develop new routines and figure out your way around. However, after a few months it will not seem like a big deal, and you’ll look back wondering why you didn’t move before.

In the same way that Goldman Sachs holds the philosophy “business builds business” to heart, one should hold the personal philosophy of “experiences build experiences” even closer. If you let yourself become the type of person that goes to roller discos and drives three hours on the weekend to climb Half Dome you will quickly find that there are those who are willing to introduce you to even more profound experiences. You’ve made it clear that is the type of person you are: one whose desire is to participate in the new. Experiences build experiences.

You’ll probably be doing these things alone for longer than you would think, but will be doing them with larger groups of friends far quicker than expected. Trust me.

A possible rule of thumb to help make these decisions could be to ask yourself, “As I am approaching the end of my life and am looking back, what is it I wish I had done?” This advice is not perfect, and it needs to be combined with common sense and reason, but it will help to make the change a little less scary and put it in perspective as what it really is, which is an exciting opportunity to grow.

 

In NexGen Advice Tags Luke Seiderman
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*Communication on this website does not constitute a recommendation and is for educational purposes only. None of the information contained in this website constitutes a recommendation for any specific person. The authors are not advising you personally concerning an investment strategy or other matter. All opinions expressed on this blog are solely those of the authors and are in no way affiliated with any other organization or institution.