By Bob Brooks
January 22, 2015
We go through 12 years of school and for some an additional 4 years of college to be taught everything from history to science to reading and writing. In all of that time of education, not once do we get an education on how money works. As a result, we get out into the real world without a clue as to handle maybe one of the more important aspects of living.
So, we look to the money magazines of the world to educate us. The subject of money is not black and white as the financial media would have you believe. It is very gray. If you do x, you will get y. This works well with most readers because at the basic fundamental level we all want the world of money/investing/retiring etc. to be black and white. If things are black and white, then you just follow directions and everything works out.
The articles about black and white finances are dangerous because they reinforce the myth that dealing with money is easy. Retirement articles offer up the best example. Saving is the focus of most of these articles.
“If you save for retirement, you will be able to retire. You just have to save enough.”
Then examples are given of how this works. John wants to retire at age 65. All John has to do is save x dollars a month for 30 years and he can retire with an income of Y.
Yet many investors save and save only to find out that wasn’t entirely true. It is a myth and the wrong point of focus when thinking of retirement.
In reality, there Is much more to it. Think of retirement planning from the standpoint of a 3 legged stool. Saving, although important, is only one aspect of the process. A one legged stool doesn’t really work. You need all three legs to make the stool work.
Leg 1 – Saving – No Question you have to save money. That is at the very basic level of planning for retirement.
Leg 2 – Managing – If you had 1000 people saving money for retirement, only maybe 30% actually have a process in place to manage the investments. There is a time to be invested and there is a time to be safe. Most people have a plan for up markets. However, the reality is that markets go up and down. A process to manage for the ups and down of the stock market is critical. Yet, few have that in place.
Leg 3- Tracking - If only 30% have a process in place to manage their investments, probably only 5% are actually actively tracking their progress in relation to their goals. Let’s say you have mastered 2 of the 3 legs. However, your stool still doesn’t function. How do you know if you are being effective? Effectiveness is measured by your ability to stay on track with accomplishing your goals.
If you are going through the trouble of saving and working with a wobbly stool, maybe it is time we talked. If you are saving or have saved, I can offer you the management process through my prudent investment management strategy where I put as much emphasis on managing for risk as I do trying to grow your investments. Then with the application of my benchmarking system, we can determine and track your progress towards your goals.
Most advisors considered themselves wealth managers. I would rather just consider myself as the advisor who helps you achieve your goals. Let’s start a conversation by either emailing me at
or calling me at 972-386-0384.