The Articulate Incompetent

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by Jim Stovall

The Internet and digital age have given rise to a new phenomenon.  There are people whoknow enough to be dangerous, not only to themselves but to you and me as well.  Beware of the articulate incompetent.  These are people who can talk a good game but have little or no experience at applying the newly-found knowledge they espouse.

With the ease of accessing a search engine and a brief period of focus, anyone can begin to convince you that they are an expert on anything.

Our grandparents would have had to travel to several libraries and universities and talk to a number of experts over several months or even years to have access to the information you and I have at our fingertips via the web.

To succeed in the 21st century, we must learn to differentiate information from knowledge, and knowledge from wisdom.  Information is nothing more than random data or facts that have no specific application until they are internalized.  Knowledge is the intake of that information.

A person who becomes knowledgeable has sought out a source of information, and by mastering that information, has gained knowledge, therefore becoming a source of information.  Wisdom is the practical, successful application of knowledge.  Wisdom is never gained solely by sitting in front of a computer screen or by occupying a seat in a classroom.  It comes through hard work, generally accompanied by trial and error.

Wisdom allows us to avoid painful, frustrating, and time-wasting situations.  Unfortunately, this wisdom is usually gained from going through painful, frustrating, and time-wasting experiences.

A person with knowledge may have a diploma, book, or computer program.  A person with wisdom often has bruises, scars, and a bit of gray hair.

As you are trying to reveal and, therefore, avoid the articulate incompetent, it is important to realize they will want to tell you what they know while you will want to inquire about what they’ve done.  An articulate incompetent may just know slightly more than you do about any subject.  You can usually derail an articulate incompetent by allowing them to spout off their knowledge and then just simply ask them, “How have you applied that in the real world, and what were the results?”

We still live in a world that, when it’s all said and done, there’s a lot said and very little done.  We don’t succeed based on what we know.  We succeed based on what we do.

Knowledge is a wonderful thing if it is obtained on the road toward wisdom that can benefit the traveler and the whole world.

As you go through your day today, separate information and knowledge from wisdom, and avoid the articulate incompetents.

Today’s the day!

A Burdensome Yoke…Or A Path To Peace?

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Well, it wouldn’t be the New Year if we weren’t reminded that one of the top resolutions that will be made and inevitably abandoned is financial in nature.  “Improve financial condition” is once again the number two resolution for 2012 in the annual Franklin Covey New Year’s Resolutions study, and the only surprise is that it’s not number one!

But no matter what year I’m asked the question, “What’s the most important thing I could do to improve my personal finances?” the answer is never going to be about tactical asset allocation, navigating the alternative minimum tax or conducting a Roth IRA conversion.  Regardless of your income, your net worth, your age or employment status, the clearest determinant of a successful financial plan for ALL of us is the implementation of an effective cash flow mechanism, or its less sexy if not diminutive synonym—the budget.

So in my first Forbes post of 2012, I shared the shocking story with which you may already be familiar, about my affluent friend who found himself on a path to spending over $1 million at Starbucks, to rebut the common misconception that rich people don’t have to budget.  But here I’d like to address the more honest, unspoken question that I believe leaves most people among the ranks of the NON-budgeters:

ISN’T BUDGETTING JUST AN ANNOYING, BURDENSOME YOKE?  ANOTHER TO-DO WITH LITTLE MORE TO OFFER THAN A REMINDER THAT I’M FALLING SHORT?

The short answer: NO.

The less short answer: MAYBE.

Budgeting may indeed be little more than a burdensome yoke destined to be cast off if you don’t dedicate yourself to it wholly.  For example, if all you ever do is track your spending after the fact, which can be quite depressing.  (“Yup, I spent more than I should’ve…again.”)  Many mistake a monthly review of spending with a glance at the bank and credit card statements for budgeting, but a spending review is barely the beginning of a genuine cash flow system.  The process is really about setting forth a desired level of spending for the future and tracking spending at frequent enough intervals that your course can be reasonably adjusted.  A half-hearted effort at budgeting is likely to net you even less-than-half the benefits.

Although I recommend you find the rhythm that works best for you, my preference is a monthly budget that is reviewed weekly.  Each of my budget categories—food, housing, charity, entertainment, and many more—are given a monthly allotment and then we (yes, if your household is a we, it’s almost impossible to make budgeting work solely as an I) review spending weekly and make course adjustments for the month’s remainder.  If you’re able to maintain a weekly rhythm of review, the process is relatively painless in the short run and you’ll save yourself more heartache (heartache is not an overstatement for many people) than you could imagine in the long run.[i]

But what really takes budgeting from routine to revelation isn’t merely mastering the mundane, but planning for the unexpected…with margin.  With the exception of bills that are identical every period, each variable budgeting category should have a built in buffer designed to weather slight variance.  Then you should also have a separate miscellaneous buffer category for emergencies, auto repairs and other occasions that fall outside the bounds of your expectations.

You’ll fall head over heels in love with the boring process of budgeting when the unexpected becomes inevitable, but you’re prepared in advance.  No wondering where the money’s going to come from.  No turning to debt.  No personal financial crisis.  Just peace.

Speaking of love and budgets, stay tuned for an upcoming post on How Budgeting Saved (And Continues To Save) My Marriage.

Wishing you personal and financial peace in 2012!

[i] The not-so-secret to any habit I’ve ever maintained successfully is that it has to be in some way enjoyable, so every Saturday I take a cup of green tea upstairs with the wooden box dedicated as the receptacle for our household receipts to my office, choose some good music to suit my mood and run the numbers.  WHAT WORKS WELL FOR YOU?

Are Our Gifts Worth Anything?

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On my Forbes blog this week, I shared the story and video of the Best Gift I Ever Received and how it surprisingly helped me navigate life and money.  Because that gift has continued to increase in value throughout my life, it led me to this difficult question: Do the gifts I give appreciate in value or depreciate?  I was challenged further, wondering: Do I give gifts out of compulsion—just to check something off my to-do list—or am I really putting my heart into it, making an investment in my loved ones?

My honest answer to both of those questions is less admirable than I’d hope.

So, with Christmas literally upon us, I’d love to learn from YOU: 

What are some of the gifts you’ve received—either tangible or intangible—that, like the best gift I ever received, have continued to accrue in value and pay dividends throughout life? 

And what are some of the best gift ideas you’ve devised that you’ve seen bless others tremendously?

 Please comment below, and have a very MERRY CHRISTMAS!

Exciting News!

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The past few weeks have included some exciting happenings, so I wanted to take this week’s Conversation to share the news with you:

First, on Wednesday, November 30th, I was up pretty early poking around on TimMaurer.com to prepare an upcoming post when I saw what I thought was a mistake.  It appeared that by 7am eastern that morning, the site had already enjoyed a flood of viewers—almost 1,500, shattering any past single day record, before most people have even had their morning coffee!

It turned out that USA Today had released a review of the book I co-authored, The Ultimate Financial Plan, which, of course, filled me with anticipation wondering whether or not the review was actually…positive.  Practically covering my eyes, I navigated to the online review, overwhelmed to see the headline: “Ultimate Financial Plan lives up to name.”  Jim Stovall and I have believed in this project since its inception, but I must admit my eyes started welling up as I received the hearty affirmation from one of the world’s most prominent media voices.  You can read the full review by clicking HERE.

One of the new realities in publishing, however, is that even after getting positive reviews in The New York Times and U.S.A. Today, we’re not guaranteed any level of success in spreading this entertaining education we believe to be so vital to individuals and households across the country, especially in these difficult financial times.  As you are probably aware, Amazon.com is now the primary driver of the dissemination of books, with and without covers, so I’m going to ask you a rare favor to help us further build momentum for this project: If you’ve read and enjoyed The Ultimate Financial Plan (or its “first edition,” The Financial Crossroads) would you please consider sharing your thoughts by reviewing the book on Amazon?  If you’d be so kind, you can do so by clicking HERE.

Second, that same week, I had the privilege of forging a new relationship with one of my favorite media outlets, Forbes.  Forbes may have published its first magazine issue in 1917, but along the way they have also become a leader in new media, including blogging.  So when they asked me to begin blogging as a Forbes contributor, it was an easy decision for me.  You can check out the new blog by clicking HERE, and if you click on the picture bearing my mug, it will give you the opportunity to “follow” me, receiving updates when I post new content.  Initially, you’ll recognize some similarity between the content on TimMaurer.com and on Forbes, but I will also be creating wholly new content, like this week’s post, “It’s 10pm…Do you know how your advisor is getting paid?”

I’m very thankful for these new opportunities, but especially for YOUR support of my mission to change the way people view and interact with money.  Thank you for reading, commenting, questioning and sharing.  And as always, I look forward to your helpful suggestions about how I can make this correspondence better serve you. 

Financial Death

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“If you live each day as if it was your last, someday you’ll most certainly be right.”

Steve Jobs was not the first to say this, but apparently the most famous[i].  He mentioned it at the Stanford commencement ceremony of 2005, and he didn’t leave the quote merely hanging in the philosophical ether.  He personalized it further:

Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure — these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.

Jobs was initially diagnosed with cancer in October 2003, told first (mistakenly) he had less than six months to live, so he did have a chance to contemplate his thoughts on death prior to these eloquent words spoken at Stanford.  But according to his life prior to cancer, he seemed to live with this same blend of urgency and peace with prospective failure.[ii]

What keeps you from living life with a sense of urgency?  What keeps you from an impassioned pursuit of whatever it is that you feel created to do?

In entirely too many cases, the answer is fear not of physical death, but instead fear of our financial demise…which is often rooted in a fear of lifestyle reduction…which is often rooted in a fear of relative lifestyle comparison with our peers…which is especially ironic when you consider the millions of unemployed workers, bankrupt households, foreclosed homes and underwater homeowners.  Most stricken with these seemingly terminal financial illnesses actually “followed the rules.”  They didn’t take big chances, but instead followed the crowd.

What would it look like in your life, work and finances if “all external expectations, all pride, all fear of embarrassment or failure” were cast aside, as Jobs suggests?  And is it possible to do this responsibly within the confines of a financial plan that supports “what is truly important” to you?

[i] I say that because try as I might, I’ve not been able to find any other reference to this quote other than Steve Jobs!

[ii] For those not versed, he dropped out of college because he didn’t want to waste his parents’ life savings, co-founded Apple in a garage at the age of 20, got fired from Apple at the age of 30 for a vision that conflicted with the board’s, started Pixar and was subsequently invited back to Apple to leave a legacy that few would argue will ever be surpassed in the realm of technology and business.

The Money Maze

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by Jim Stovall

The current turmoil in the financial markets has created more confusion and controversy surrounding money, wealth, and personal finance than ever before.  Surprisingly, money is not the key to wealth.  Knowledge is the key to wealth.

People who are wealthy have a high degree of knowledge and understanding as it relates to money.  They did not obtain this knowledge because they have money.  They have money because they obtained this knowledge.

If you divided all the money in the world up equally among those of us in a capitalistic, free enterprise economy, within a few short years, those dollars would find their way home again, and the rich would continue to get richer while the poor got poorer.

Whether you’re dealing with medicine, mechanics, or your money, knowledge is power.  When you visit your doctor or auto mechanic, the more you know, the better off you are and the more likely you become to have a positive outcome from the encounter.

I have written 16 books, and as they are released into the retail marketplace, they all take on a life of their own.  Recently, I have written a book with my co-author Tim Maurer entitled The Ultimate Financial Plan.  When it hit the marketplace, it began getting a lot of attention from high places.  Here are the reviews from USA Today and the New York Times.

This type of publicity for a brand new book is indicative of the hunger in our society of people looking for answers for evermore perplexing questions.

In The Ultimate Financial Plan, we do not seek to give you the answers to all of the questions, but instead, we seek to equip you with the knowledge you will need to evaluate investments and investment professionals.

In today’s financial realm, it’s not enough to simply evaluate financial advice.  You have to evaluate financial advisors.  Financial decisions are among the most important you will ever make for your family and your future.  Unfortunately, if you make the wrong decisions today, you may not know it until you get way down the road toward college expenses, family emergencies, or retirement.  At that point, it’s too late to correct a poor decision and recover.  You can’t wait until you’re thirsty to start digging the well.

We humans have a tendency to avoid perplexing life questions that confuse and frustrate us.  Always remember that doing nothing is never a good financial plan, and to not decide is a decision, in and of itself, and rarely a good one.

As you go through your day today, commit to obtaining the basic knowledge you need to create your own customized money strategy, and then you will have the ultimate financial plan.

Today’s the day!

Black Thursday and the Value of Time

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This past Thursday—Thanksgiving 2011—I was fortunate enough to spend the entire day with family.  We spent the morning as our household of four and shared the afternoon and evening with my parents, brothers and extended family on my mother’s side.  After our fill of family and food, we headed home just before 8:00pm (not without purpose, mind you—the Ravens game was set to kick off at 8:20pm).  As we drove through the town of Bel Air, Maryland we passed a Target and a Best Buy, amazed to see lines wrapping around each building with prospective deal-seekers spending their Thanksgiving night huddling for warmth, embracing the side of a big box store.

This phenomenon, I assume, was driven by a desire to be one of the first in each store when they opened their respective doors at midnight.  That’s midnight—the earliest possible moment a store could open and still call it the Friday after Thanksgiving.  Not to be outdone, in an act of supposed consumer benevolence (and arguably outright employee exploitation), the world’s largest retailer decided just to break the barrier by opening at 10pm on Thanksgiving.  Should we just get it over with now and rename Thanksgiving Black Thursday?

Unlike many of my personal finance blogosphere colleagues who’ve justifiably brought their wrath down upon the consumption worship that has become Black Friday, calling for an outright boycott on moral or frugal grounds, I’d like to take a different approach.  In my financial planning class, we talk a great deal about the “time value of money”—the impact of compound interest gained and lost over time.  This concept is practically the centerpiece of all financial planning (rightly or wrongly), but a topic that receives precious little attention is the monetary value of our time.

How valuable is your time?

How valuable is your time?  Well, for starters, how much are you paid?  Take your salary, add any bonuses or commissions and divide it by the number of hours you work.  (This is only a rough approximation not applicable for many who are unemployed, underemployed, retired or working for reduced or no pay.)  Glancing at the Bureau of Labor Statistics, we learn that “Management Occupations” have an hourly mean of $50.69 (or $105,440 per year).  “Computer and Mathematical Occupations” demand an hourly mean of $37.13 (or $77,230 per year) while “Mathematical Science Teachers” derive less annually ($73,480) but more per hour, thanks to summers off, at $41.75 per hour.    While you may very well be blessed with substantially higher hourly/annual compensation than those mentioned above, there are many who make far less. If you’re among them, I don’t need to remind you that though you may receive less compensation, you don’t work any less, so for the sake of argument, let’s assume a reasonable vocational hourly rate of $40 per hour.

Now take a moment to ponder this question: Is the time you spend at work your most valuable?  You may answer yes, but many will prioritize their time engaged in service or worship or pursuit of their favorite hobby as their most prized.  How about drinking in a new book, movie or long-awaited album from your favorite artist?  Or what about that 30 minutes each morning with nothing but your hot cup of coffee or tea and your thoughts, catching up with an old friend over a glass of red wine or toasting the birth of a new addition to your best friend’s household?  Many will rank their daily exercise or sleep as highly valued and even more will rate time spent with family and friends as priceless.

What is a reasonable premium that we could place on this time?  Even though it’s impossible to know, isn’t it likely that we’d value some of this time as at least double or even triple the hourly value of the very important time we spend on the job?  We could easily assume our most valuable time—time that we’ll never get back—is worth over $100 per hour!

How about the time spent at Best Buy from 5pm until 2am on Thanksgiving night and Black Friday morning to secure a savings of $300 on a 42 inch flat screen TV?  From a financial perspective, with an eye for the value of our time, those eight prime-time hours would appear to net a guaranteed LOSS of at least $500!

Let’s also not forget that whatever goods we capture in the hunt, whether at a full or discounted price, are depreciating in nature.  Their value begins to fade the moment we take them out of the box and we’ll likely be tossing them aside as worthless in under a decade, while our premium time is very often a legitimate investment in ourselves and those we love accompanied by compounding memories over the years.

Let me not oversimplify this to suggest that all things consumption-oriented are bad and the activities I tend to prefer are universally good.  After all, I do tend to spend “several” minutes each Thanksgiving Day engaged in the ritual of football spectatorship.  I’ve also heard from friends who enjoyed a rich time of fellowship joining a family member or friend on an early-morning shopping excursion.

But let us not forget that every minute of every day is spent—it’s up to us to spend it well.

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*This article also appeared on Tim’s new blog on Forbes.com. Check it out HERE!

Welth: Is It Wurth It?

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A few weeks ago, I had the privilege of conducting a 40-minute radio interview with one of the great business leaders of our time.  (I’ve split the interview into four ten-minute podcasts, the links for which follow this post.)  Truett Cathy is the founder of Chick-fil-A and the author of several books, most recently, Wealth: Is It Worth It?  He’s well suited to ask and answer that question, because after beginning his restaurant career over 60 years ago with a single eatery, he’s built one of the nation’s most successful and well-loved restaurant chains. But interestingly, an adjective he’s not entirely comfortable putting before his name is “rich.”  He says, “One of the worst things I can imagine someone saying about me is, ‘He’s a rich old man.’”

But it would be hard to argue either of those.  After all, Mr. Cathy is 90 years old and falls at number 375 on the Forbes 400 list, with an estimated net worth of $1.1 billion.  However, he defies his age by going to work nearly every day and carries himself with the humility and grace of a line cook, not the founder and chairman.

Wordplay

Wealth is a hot word these days; especially in the financial services business, everyone wants to be about wealth.  So now, instead of being financial advisors or financial planners, stock brokers, insurance salespeople or bankers, everyone is a wealth manager or wealth consultant.  If you work with them, their commercials suggest you’ll be one of the people golfing all day or travelling around the world on a $1 million sailboat or sitting on the beach (with your wealth manager, of course) toasting the purchase of your new 5000 square foot beach home.  Don’t get me wrong—there’s nothing wrong with golf (except that it’s a miserable sport, chasing that little white ball around); and sailing, for those who know how to do it, is sublime; and if you have the money, right now is a great time to be buying a beautiful beach property—but dangling this utopian envy in front of everyone is what I don’t like about the financial industry’s co-opting of the word wealth.

We tend to believe today that the three words “money,” “riches” and “wealth” are generally synonymous, and I do believe that in the contemporary vernacular, they are.  But that wasn’t the initial intent.  Money and riches, if you follow them back to their original root words in ancient languages, always meant something similar to what they mean today.  Wealth, on the other hand, had a much deeper meaning.  It meant enough.  Contentment.

In Wealth: Is It Worth It? Cathy cautions us of the trappings of financial accumulation, giving us insight into how living through the Great Depression and seeing his own father left emotionally destitute by his inability to provide for his family in that incredibly difficult time informed his own belief system around money.  Far from demonizing dollars, he gives us a framework for virtuous money dealings grounded in Solomonic wisdom.  (Cathy is unabashed in sharing that his money philosophy is grounded in his Christian faith, but he also draws on wisdom from sources neither canonized nor ordained and never seems to get preachy.)

Is it worth it?

But Mr. Cathy isn’t convinced wealth is worth it even after you “earn wealth honestly,” “spend wealth wisely and save it reasonably.”  Even then, we still have the capacity to let wealth accumulation overtake us.  He concludes that the only way wealth is really worth it is “…if you give it generously.”

While this resonates as truth, I admit my skeptical self wants to conclude it’s easy for those blessed with abundance, like Cathy, to admonish the rest of us on the value of charity.  Even he acknowledges it’s unlikely that his children or grandchildren will ever suffer from want.  But having now read his personal and financial story and talked with him, I find not an ounce of inconsistency or inauthenticity.  He applied the same approach to money when living through the Great Depression and standing over the grill in his first restaurant as he does today encouraging us to deconstruct and rebuild our view of affluence.  I also cannot think of a time personally, or with hundreds of clients over the years, in which this particular proverb did not hold true: “If I give water to others, I will never be thirsty.”

One of the highlights of Wealth: Is It Worth It? is an interview Cathy conducted with a friend he has forged in pursuit of his campaign for generosity, the venerable Warren Buffett.  He asks, “Warren, how do you define wealth?”  Buffett answers, “Wealth is having enough.”  Interesting, isn’t it, how wisdom changes so little even over thousands of years.  There is plenty of money out there and a lot of riches, but whether among the rich or the poor, we could all use more enough.

There are many more life-giving tidbits you’ll find throughout my radio interview with Truett Cathy.  The show is organized into some bite-size portions below:

1)     Introduction: A blessing to some and a curse to others 
2)     Friendship w/ Warren Buffett; money and children
3)     Truett’s father; living through Depression; discomfort w/ being rich
4)     “Retirement is misery!”; Chick-fil-A’s secret; when to start giving

Check out comedian, Tim Hawkins, hysterical ode to his favorite restaurant, Chick-fil-A!

New and Old

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by Jim Stovall

We seem to be constantly on the search for something new to replace something that is old.  We are bombarded with advertisements, promotions, and sales pitches imploring us to experience the latest, best, new, and improved items that may be available.  While, in many cases, new things are better than old things, there are certainly many exceptions in which old things are best.

My late, great friend and mentor Paul Harvey was fond of saying, “Not everything we call new and improved is.”

As a small child, I remember that my mother would divide my toys into two groups.  One group went into my toy box which I would play with immediately, and the other group of toys went into a cardboard box that was stored for later use.  At a point and time known only to my mother, when I started getting bored or my toys seemed stale, she would immediately replace the group of toys in my toy box with those that had been in storage.  I instantly felt as though I had all new toys.  Everything seemed exciting and brand new.

You can have this same experience as near as your bookshelf.  Some of the greatest titles you have ever read are waiting for you to revisit them and delve into the treasures that you have forgotten or simply missed the first time through.  There are some books that, frankly, are not worth finishing, but there are others that bear reading many times.  I re-read some of my favorite authors annually and would swear that they somehow rewrote sections of the book or added chapters while the book was sitting on my shelf, because it seems so fresh and new to me after multiple readings.

All of us enjoy meeting new people, making new friends, and forming new business relationships.  It is great to be actively pursuing new people in our lives, both personally and professionally, but always remember that some of the greatest people you will ever meet in your entire life are people you have already met.  Unfortunately, too often, we think of people we already know like a book we’ve already read.  We let friendships slide and business relationships dwindle away due to lack of attention.  With a little thought and care, along with some of the new social media tools, there is just no excuse for not staying in touch with people who are meaningful to us.

One of the new year’s resolutions I actually made and have kept for several years involved getting together with my parents each week.  Several years ago, I realized that even though my parents live a few miles from my home that I had gone several months without getting together with them.  After making the decision to see them each week, I have found the experience to be imminently rewarding in many ways, and I have learned things about my parents and other people in our family tree that I had never known before and wouldn’t have ever known had I not made the effort to stay in touch.

As you go through your day today, explore new people, places, and things, but don’t forget the treasure of the people, places, and things you can revisit time after time.

Today’s the day!

Personal Finance is More PERSONAL than it is FINANCE

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I need to share a secret with you: financial advisors aren’t perfect.

What?  You already knew that?

OK, so you already knew that financial advisors aren’t perfect, but they (we) may still need to come to grips with that.  It’s not as easy as it sounds.  You see, anyone trained to be an advisor in the financial services industry proper—represented by The Big Three: banks, brokerage firms and insurance companies—is likely given more instruction on molding your perception than on actually advising you. I speak of this from first-hand experience.  Let me give you a few examples:

I was told by one of my sales managers when I was a financial advisor for a very large insurance company, still in my twenties and struggling to make ends meet, that I should buy an expensive sports car.  This would supposedly accomplish two purposes: first, I would exude the desired air of success necessary to attract big clients and second, it would create a greater sense of urgency to sell more of the company’s products to keep up with my big car payment.  This same Glengarry Glen Ross-style[i] sales manager also instructed me to arrive at a lunch destination with a hot prospect early enough that I could ask the maitre d’ to call me by name, as if I was a regular at the fine dining establishment.  And if that wasn’t convincing enough, I was also to tell the waiter in advance what my favorite drink was so that when he or she approached our table I could just say, “I’ll have the usual.”  I was told to never have a beard, keep my hair off my ears and shoulders, never wear flashy ties, shave twice per day and never wear jeans or sweatpants, even for a Saturday morning trip to the grocery store.  After all, you never knew who you might sell—I mean, see. 

It was all about perception, and of course, when it came to all things financial, I was to have all of the answers, regardless of the subject matter.  If I didn’t know the answer I was to exercise my skills of creativity and persuasion to make one up.

Last week, one of my colleagues took a big, bold step in changing this culture of perception.  Carl Richards wrote a must-read article that was published in the New York Times, telling his story of an instance of personal financial mismanagement in the midst of the financial crisis that ultimately led to a short-sale on his home.  In doing so, not only did he break this barrier of perfection perception—that you never really believed anyway—but he also introduced an interesting new possibility, that we could not only learn from our financial advisor’s successes, but also from his or her mistakes.

Yes, I said “we” can learn from “our” financial advisor, because even though I’m a financial advisor (maybe even especially because), I need to have my own financial advisor.  Another colleague, Rick Kahler, author and co-author of several books including one of my all-time personal finance favorites, The Financial Wisdom of Ebenezer Scrooge, insists every financial advisor needs his or her own financial advisor.  Why?  Because money is simply too personal.  Kahler told me, “Money touches everything in our lives. How we think about it, how we use it and what we believe about it speaks volumes about how we view politics, religion, relationships, and even sex.”  He went on to say there are few topics that evoke shame quite the way money does, and I believe this may be especially true for someone who is looked to as a source of financial wisdom, like a financial advisor.

Personal finance is more personal than it is finance.

You may have heard me say this before, but it’s not a slogan I devised because it sounds clever; I genuinely believe it to be true that within the realm of financial planning and all of its numbers, charts, projections, amortizations and allocations, the most challenging and important aspects of the discipline of personal finance are not the financial, but the personal.  This is because financial planning blends both economics and emotions, and self-analysis is strewn with self-interest, self-deception, self-condemnation for some and self-aggrandizement for others.

This is why a majority of lottery winners and professional athletes find themselves in bankruptcy only a short time after their big pay day.  This is why many people who make over $250,000 per year are still living paycheck-to-paycheck.  This is why even the best financial planners need to submit themselves to the scrutiny of another advisor.  This is also why people who’ve worked to develop a healthy view of money become the “millionaire next door” with only a modest income, build successful companies from scratch, use their financial failures as a catalyst for success and in some cases find the greatest level of contentment has nothing to do with financial wealth at all.  And this is why this entire blog is dedicated to this fascinating intersection of money and life!

I’d love to hear your thoughts on financial advisors, sleazy sales tactics and money beliefs, so please join our conversation!

[i] Glengarry Glen Ross was a 1992 movie with an all-star cast including Jack Lemmon, Al Pacino, Alec Baldwin, Ed Harris and Kevin Spacey.  Alec Baldwin plays Blake, a “motivator” from the home office who is brought in to increase sales.  You can check out his motivational speech here, but pleased be warned that the language is a bit…colorful: http://www.youtube.com/watch?v=y-AXTx4PcKI  In the interest of full disclosure, I never had a manager go quite this far, but I did get the table pounding “I made one million dollars last year!  I buy a new Cadillac every two years for cash on the barrel head—because I can!” speech (the manager’s words verbatim).