What You Don’t Know Can Get You Into Trouble
Four behaviors affluent investors avoid to remain successful.
There’s an old saying I love, “It’s not what you know that can get you into trouble; it’s what you don’t know”.
This statement aptly applies to investing and managing assets. You can always take what you know, improve upon it over time, and hone your skills. That’s what we call experience.
But what about those things you don’t even know you don’t know? Ah. There’s the rub.
The top four behaviors holding you back
Many of our affluent clients run in the same circles, the same country club, same suburbs, and same yachting club. They spend time with each other golfing, playing bridge, and talking about the upcoming talk of the town charity event. You know—the things they have in common.
And of course, another topic they all have in common (otherwise they wouldn’t be in the circle) is their investments. Sitting at the poker table at the city club, or the bar at the favorite watering hole, or in the women’s locker room at the athletic club, people generally like to talk about the one thing that brings them into the same circle-money.
1st Behavior: Following the Crowd
“I Want What She’s Having”
It’s only natural to want what successful people have.
There are two sides to this scenario. On one hand we have the person who is proudly announcing how much he made because of the advice from HIS guy/gal at the investment firm. On the other side are the people listening to what he is saying. And by golly, they don’t want to miss out on such an opportunity. They want to get in on the action. They hop on the bandwagon and invest with his advisor too.
Perhaps it’s a good idea and perhaps not. Although there are many similar attributes these members have in common with their buddies, there are also plenty of attributes that are quite different. Don’t follow the crowd just because they, the crowd, find that it’s a good fit for them. You have the responsibility to ensure that the investment strategy fits you like a glove.
Investment strategies are not one size fits all.
2nd Behavior: Being Reserved
“What we have here is a Failure to Communicate”
Successful investors make sure their wishes are not misunderstood.
Ever have the experience of telling someone what you want or need and then having that person totally misunderstand what you said?
Without being a jerk, you must insure that whoever is managing your money is doing so by strictly following YOUR wishes and not theirs. It’s important that in order for you to be able to ascertain if they are doing the job you hired them for, they know and are following your directives.
In order for you to enjoy your life in the manner that you’ve grown accustomed, anyone working for you needs to fully comprehend what you want from your investments.
3rd Behavior: Overworking
“I think my idea of retirement might be to one day work a 40-hour week.” — Vince McMahon
Successful investors balance their lives between growing their wealth and living their life.
Many affluent investors don’t want to have to spend countless hours on managing their money, pouring over prospecti, balancing monthly statements or supervising their investment manager. After all, they worked hard to amass their wealth, they’d rather have fun reading all the books by their favorite author, playing golf, tennis, boating, gardening, and traveling.
It’s no fun being committed to looking at the computer all the time and checking up on their manager. After all, what’s the point of being wealthy if you still have to work all the time? That’s why the manager was hired, so you don’t have to spend your time doing work you have delegated to someone else.
Nevertheless, you do have the responsibility to ensure that your objectives are being met.
4th Behavior: Being Too Trusting of Others
“If you believe that, I have a bridge to sell you.”
Successful investors rarely commingle their money with an investment advisory firm.
The biggest fear that can destroy your wealth is being ripped off. We’ve all seen the TV show on CNBC “American Greed” which highlights the numerous ways affluent investors have been separated from their money. And it scares the living daylight out of us. None of us want to go backwards. We don’t want to have to start over, even if there is enough time to do so. The number one way to avoid losing every penny is to never commingle your money with an investment advisory firm. As long as you are receiving the original statement from the custodian, you will know what the balance is in the account. It’s for your safety.
“There is only one success—to be able to spend your life in your own way”- Christopher Morley
We understand that your ultimate aspiration, achievement and wealth is to have peace of mind. Only then do we accept that we are truly wealthy. And to remain wealthy, you need to surround yourself with advisors who display good judgment, technical expertise, understanding, professionalism and competency.
Our job, in addition to managing your assets, is to help relieve you of time pressures, anxiety, stress, and the day-to-day hassles that surround the management of your money. You have done well, and we applaud your efforts in working hard to acquire what you have. We deeply respect the effort that you have extended to reach the top.
