Tag Archives: personal finance

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Advisor Resources For Financial LIFE Planning

In a recent Forbes post, “The Stuff In Life That Financial Planning CAN’T Prepare You For,” I suggested that we all, and perhaps especially financial advisors, need training in being better humans, and that it makes us better advisors when we do. Here are links to some of these resources and trainings that I have personally benefited from:

Books For Underlying Knowledge

These are books that, I believe, will provide a systematic learning path for better understanding the human elements of decision making in general, and financial decision making, in particular. They are listed in a purposeful order, but I encourage you to jump in wherever your interest takes you:

The Undoing Project, Michael Lewis

This is a great place to start, because Lewis is a master storyteller, and this mini-biography of the lives and work of Daniel Kahneman and Amos Tversky, the OG behavioral economists, gives you an opportunity to be introduced to the field in an approachable, narrative form.

Misbehaving, Richard Thaler

Of course, it was actually Richard Thaler, the Nobel prize-winning economics professor at the University of Chicago, who coined the term “behavioral economics,” helping merge Kahneman and Tversky’s cognitive and mathematical psychology into “the dismal science,” effectively turning it on its head. Thaler provides an excellent history of this relatively new field that, along with The Undoing Project, might just prepare you for the next recommendation…

Thinking, Fast and Slow, Daniel Kahneman

This is the Bible of behavioral economics, summarizing the major lessons of Kahneman and Tversky. It’s not a “light read,” but it’s important and powerful.

Nudge, Thaler and Sunstein

This volume, by the aforementioned Richard Thaler and Cass Sunstein, now provides us with our first real-world example of applied behavioral economics. And apply it they did! In fact, this work has likely influenced your life, in at least some small way, whether you know it or not. For example, if your 401(k) is opt-out rather than opt-in, or if it has an automatic escalation option, you have Nudge to thank for it.

Switch, Chip and Dan Heath

Yet for all of its virtues, a first look at behavioral economics doesn’t feel much less dismal than its predecessor, in part because it makes us feel, as humans, like a big pile of mistaken biases and behavioral patterns. In a few powerful ways, Chip and Dan Heath invite us to see strength where others might see weakness.

Behavioral Finance: The Second Generation, Meir Statman

In fact, if you want a more positive take of behavioral economics and finance, look no further than Meir Statman, the Glenn Klimek Professor of Finance at Santa Clara University’s, look at the 2.0 version. (The link above gives you access to a free PDF of this book via the CFA Institute.)

Drive, Daniel Pink

Now we start to move beyond the more technical to the more applicable, beginning with Daniel Pink’s very readable look at human motivation. Why is this so pertinent for financial advisors? Because we’re in the business of helping people discern, articulate, and activate their motivating priorities in life, of course!

Start with Why, Simon Sinek

Sinek explores the core of motivation–what motivates us, and what motivates others to action–in his breakout book. Or, you can get a pretty good summary via his 18-minute Ted Talk.

The Power of Habit, Charles Duhigg

Of course, once we have the motivation, we often need help putting it to work, hence a deep dive on the science of habit formation. As advisors, it’s helpful to understand that people aren’t just financially “dumb”–they (we) are all just creatures of habit.

Atomic Habits, James Clear

Clear picks up where Duhigg leaves off, giving us a roadmap to powerful, positive habit formation. Again, as advisors, we’re in the business of helpful habit formation.

You Are What You Love, James K. A. Smith

If Duhigg and Clear help us evolve from discipline to habit, Smith takes it to another level, through to the final evolutionary stage–welcome ritual. This book definitely falls into the “spiritual” category, as Smith’s philosophy is primarily drawn from a Judeo-Christian worldview, but I do think it is ecumenically applicable.

Books for Practice Management

Now let’s get to work:

There Is No Good Card For This, Kelsey Crowe and Emily McDowell

The first book I mention is not explicitly oriented toward the practice of financial advising, but it is no less applicable, because the great human unifier is pain. No Good Card is a crash course in how to say you’re sorry and effectively helping people navigate challenges in life. It should be a prerequisite for every financial advisor, because every single one of us will face this tragic privilege in our work.

The Financial Wisdom of Ebeneezer Scrooge, Kahler, Klontz and Klontz

This oddly-named book is a great place to start when you consider the implications of psychology within the context of financial formation. It’s a quick, easy read that sets off a series of lightbulb moments, making it a great client gift as well as an advisor introduction.

Lighting the Torch, George Kinder and Susan Galvin

It’s unfortunate that this book is so hard to get your hands on, because it is an excellent articulation of the Kinder EVOKE® method of life planning, something you’ll see more about in the recommended trainings below.

Facilitating Financial Health, Kahler, Klontz and Klontz

If Scrooge is the prelude, Facilitating Financial Health is the masterclass, a literal textbook for financial advisors, therapists, and executive coaches (and priced as such). The best compliment I can give the book is a comment I got from another advisor to whom I had recommended it: “This should be required reading for every financial advisor.” I agree.

Practice Management Articles

I’ve written many, many articles about financial life planning, but here are a few that speak to some of that which I’ve learned from the books above and the trainings that you’ll see outlined below:

Behavioral Economist Richard Thaler’s Message To Advisors, Money

One of my favorite interviews ever was Professor Thaler, the co-author of Nudge and the author of Misbehaving…and the dude who coined the term, “behavioral economics.” I don’t think he’d take my call after winning the Nobel prize.

Riding The Elephant: Mastering Decision Making In Money And Life, Forbes

This article focuses on the big takeaway from Kahneman’s work, Systems 1 and 2, AKA, the Elephant and the Rider.

3 Questions That Will Get Your Finances–And Life–On Track, Money

George Kinder’s legendary “3 Questions” can change your financial planning practice…and your life.

Solving For The Qualitative Deficit In Financial Planning, Forbes

This book summarizes a host of the thought leaders referenced here.

Adopting A “Coach Approach” To Overcome Financial Planning Inaction, Kitces.com

This is a long-form article listing some of the biggest takeaways from my professional coach training (below).

Trainings To Attend

These aren’t the only trainings available, just the ones that I have experienced, personally, and am happy to recommend. Here again, I’ve listed them in an ascending order that I hope will serve you well wherever you are on your vocationally journey:

The Seven Stages of Money Maturity®, Kinder Institute of Life Planning

This two-day training is an excellent introduction to becoming a true practitioner of financial life planning, as taught by George Kinder. And I’d wager you get about four days’ worth of personal and professional impact for the two days it requires.

Fundamentals of True Wealth Planning, Money Quotient

Money Quotient is a true gem in the Pacific Northwest, a community led by Carol Anderson and Amy Mullen that has created teaching and tools that have been helping advisors put the life in financial life planning for many years. I’ve taken their 3-day fundamentals training, not once, not twice, but three times–and I’ve learned something new every time!

EVOKE® Life Planning Training, Kinder Institute of Life Planning

This is the legendary five-day intensive course where Kinder, or one of the other excellent trainers at the Institute, teaches you the entire client-ready EVOKE® method through an experiential intensive. I’ve yet to talk to a trainee, myself included, who didn’t consider it to be truly life changing–and if you stack the two-day with the five-day and the Life Planning Mentorship, you can also acquire the Registered Life Planner® designation, if you choose.

Core Essentials Fast Track Professional Coach Training Program, Coach U

Having dedicated many hours to learning about life planning within the sphere of financial planning, I was inspired a couple years ago to see what the world outside of financial planning had to say about life planning. I decided to drink from the fire house, taking Coach U’s 6-day Essentials class that is a precursor to gaining ICF certification as a professional coach.

As I mentioned, I don’t consider this list to be comprehensive, and therefore, I’d love to hear of any of the books, articles, and trainings that would be on your list!

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30 Books That Changed My Life

“It’ll change your life,” a good friend of mine is fond of saying, to lend a touch of credence to a recommendation. And in most cases he’s been right. Whether it’s a good meal, movie, whiskey, podcast, video, song, sermon, album, or book, most of his recommendations have been good enough that the experiences I’ve undertaken at his suggestion have left a mark beyond mere entertainment or additions to the contextual fabric of life, two otherwise worthy ends. These experiences have, to varying degrees, changed the way I think, feel, act, or abstain.

Therefore, in lieu of a “Best Books of [Fill In The Year],” I’m following in the footsteps of Matthew Kelly, an author who has maintained a list of the “top 20” books that have changed his life. Although in my case I was unable to limit that number to 20, I hereby submit 30 Books That Changed My Life, in four distinct alphabetical categories: fiction, non-fiction, spiritual, and vocational.

Fiction

Fiction is the category that wouldn’t have existed on my list only 10 years ago, because I’d fallen prey to the silly notion that fictional books, by their very nature, can’t actually change our lives for the better. How foolish I was to think that!

  • Cutting For Stone, by Abraham Verghese, was recommended to me by #1 book referral friend. While most times, I wait until I’ve heard a recommendation from three credible sources, I’ll add anything she recommends to my reading list. Cutting For Stone is an epic masterpiece featuring “twin brothers born of a secret union of a beautiful Indian nun and a brash British surgeon.” I know, it sounds a bit like the start of an international soap opera, but the story and writing were good enough to keep me engaged for all 600+ pages. I may have been aided by the fact that I listened to this particular book–again based on my friend’s suggestion that the many words that were foreign to my ear would sing when well narrated–but I think I’d have stuck it out just as well in print.
  • Jayber Crow, by Wendell Berry, opened my mind to a whole new form of reading, writing, and living. Wendell Berry is an American philosopher, essayist, poet, and fictional author whose creation of an autobiographically-inspired town, Port William, has made me yearn for a more deliberate, tangible, and meaningful life. Jayber was Port William’s barber from 1937 until 1969…and that’s about all I can tell you, if I’m to hold myself to Berry’s “ORDER BY THE AUTHOR,” a notice written to readers in the preamble: “Persons attempting to find a ‘text’ in this book will be prosecuted; persons attempting to find a ‘subtext’ in it will be banished; persons attempting to explain, interpret, explicate, analyze, deconstruct, or otherwise ‘understand’ it will be exiled to a desert island in the company only of other explainers.” All I can tell you is that I’ve read and enjoyed many of the Port William series now, but none has had an impact on my like Jayber Crow, although I’m barred from attempting to tell you how or why!

  • A Prayer For Owen Meany was my introduction to John Irving’s work, and I enjoyed it so much, I’m afraid to read anything else he’s written lest I spoil it. Although not on the grand scale of Cutting For Stone, I’d nonetheless refer to A Prayer For Owen Meany as an epic, too, although mostly confined to the small town of Gravesend, New Hampshire. While Irving seems much more inclined than Berry to allow his worldview to charge through the text, in this case through the lens of an often heart-wrenching confluence of coming-of-age stories, you don’t have to agree with the author’s opinions to acknowledge the brilliance of his writing.
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Wealth Managers: The 3 Keys To An Elevated Client Experience

What you’ve done in the past isn’t enough for the future. That which has differentiated you enough to become successful thus far in your career likely isn’t sufficient to set you apart and perpetuate your success going forward.

At one point, pushing product for a recognizable company gave you an edge. Then, being an asset manager turned some heads. Evidence-based investing gave you an even better story to tell. Offering comprehensive advice as a Certified Financial Planner™ practitioner was once novel, and full-time fiduciary status made you a more evolved advisor.

But now some recognizable names are offering a version of the above for less than you pay for your streaming television subscriptions, all while one of the most recognizable names in finance just announced the end of a sales practice for which it is legendary. The net result is that there will only be more—and lesser priced—competition for financial advisory services. What, then, will it take to continue to set you apart?

A comparison of how experience goes beyond service
Experience Over ServiceBUCKINGHAM STRATEGIC WEALTH
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Parents Of College-Bound Kids: Don’t Eat The Guilt Sandwich

The ivory tower of higher ed, the U.S. government, the financial industry, the bumper sticker barrage, a healthy pinch of pride, and, yes, even our genuine love for our children have all converged to serve up a big fat guilt sandwich for parents of college-bound kids.

We’ve been made to think that we’re damned if we don’t, so we’ve done it—or overdone it, really. We’ve sacrificed our own financial futures for the sake of a supposedly priceless experience in the form of a college education.

Now, before you grab a pitchfork to chase me down from whatever perspective I might have offended, please know that I’m a thankful college graduate. What’s more, I enjoyed teaching at the college level for several years (and likely will again). I’m in the financial industry, I love my kids more than I can express, and I’m proud enough to have adorned my car with a bumper sticker pledging my support for their teams and/or academic institutions.

Perhaps most importantly, those kids I mentioned are 17 and 15—a high school junior and freshman—and, at the very moment this article is published, I am literally attending a college “prospect day” for my eldest at an institution of higher learning that resembles Hogwarts. In other words: I’m a believer in a college education, and I’m right there in the trenches with you.

Wizarding World of Harry Potter at Universal Studios Hollywood
HogwartsGETTY IMAGES
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Should I Take My Investment Gains Off The Table?

A friend called me the other day to ask a question that I know many share and that many financial advisors are hearing, especially from those who are currently in retirement. Here’s how the conversation went, along with a few notes specifically for financial advisors to help in the similar conversations you’re having with your clients:

Q: “Tim, my portfolio has done well enough in just the first quarter of the year that we’ve more than covered the income we need from our investments for the whole year. Should we just cash out and take our investment gains off the table?”

A: First, I understand how you feel. We’ve had so many years where gains were hard to come by and a few in which it felt like the bottom was going to fall out. It’s stressful, even in the best of times, so the temptation to take your winnings off of the table in a year where your income goals have already been met feels not only rational, but right.

And yes, you certainly could do exactly that.

Financial advisor note: Our clients are the hero of their story, we are only a guide. They are the boss, and we are the hired help. So in any circumstance, the client must feel free to exercise whatever instinct occurs, because they are literally in control. Furthermore,  we take an important step in any form of coaching by reminding the coachee of their autonomy. A client might be inclined to expect their advisor to put up a fight when they suggest they’re considering cashing out of their portfolio—and they’re probably right to anticipate as much—but recognizing the very freedom they already possess often frees them to make the decision we’d prefer.

taking chips off the table
Taking Chips Off The TableYURI SMITYUK/TASS
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The Problem With Financial Literacy—And A Proposed Solution

The problem with financial literacy is that it gets off on the wrong foot. The very moniker is condescending, implying that those it serves are financially illiterate, that they have no idea whatsoever how to use money.

Thus, in addition to condescension, we must add inaccuracy to the list of financial literacy’s foibles, because having a lot of money certainly is no prerequisite – or guarantee, as it so happens – for understanding how it works. Even the poorest of the poor are embracing entrepreneurship through the advent of micro-finance to raise their standard of living from critical to stable. Even the 10-year-old kid buying a candy bar at the corner store is successfully completing a transaction. And even the 50-something who spends 110% of his annual income with the aid of a home equity line of credit may be demonstrating a more dangerous lack of money mastery than those generally labeled financially illiterate.

And besides, who among us is quick to embrace a solution that requires the admission of complete ignorance?

A person leads a finger on the lines in the book, but instead of letters only question marks on the page in the textbook
Financial IlliteracyGETTY
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Maximize Your Productivity With “The Attention Capital Principle”

I understand the problem you face every day when you start working. You have an idea of how you’d like your day to go, and then you turn your computer on.

Your inbox was populated overnight by bleary-eyed inbox-zero adherents pounding away in a converted closet. A couple more hours have been consumed on your virtual calendar by well-intentioned colleagues scheduling important meetings. And then before you even manage to catch-up in your inbox, that not-so-friendly chime from Slack or Teams cues the symphony of distraction that is your day.

It’s a wonder we get anything done at work. And it’s no surprise that when we leave our desks, we often feel a hollow ring of having accomplished less than we’d hoped despite spending more time than we intended.

Woman frantically busy at work
Crazy BusyDEPOSIT PHOTOS
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Effectively Navigating The In-Between Phases Of Life And Work

Sometimes we do get ourselves stuck, but other times we simply find ourselves marooned in the in-between—where the present feels more like the past, but the future is uncertain.

People talk a lot about finishing an existing project or starting a new one, but how can we effectively navigate the seeming wasteland between them? Whether or not we choose to be in this space, it can be uncomfortable and it is often unproductive. It’s as if we find ourselves treading water—personally, professionally and financially. But by effectively navigating these in-between phases in life and work, by releasing the outcome and exercising proactive patience, we can keep moving forward.

Maybe you’re rehabbing an injury and are out of the game or the season. Maybe you’ve sold your house and temporarily are crammed into an apartment while you’re building your new dream home. Maybe a long-term relationship has ended and you’re taking time to heal before considering coupling again. Heck, maybe you’ve gotten the first vaccine shot and are awaiting the second!

One of the most common—and challenging—in-between scenarios, however, is occupationally oriented. I spoke with a great friend and amazing professional this past week who runs her own business—but she’s in the middle of a lengthy interview process for a job that could be really stinking awesome.

The new job, if offered and accepted, would initiate a massive amount of change for her and her family. They’d have to move—and they already live in the best city in the world, for goodness’ sake—but her husband and three children are all on board for a new adventure if that’s how it breaks.

There are several meaningful pros to accompany that monumental con, though. Most notably, the job would vault her visibility within her industry, compounding her already impressive credentials, and position her as a national authority in her realm of expertise.

But the whole process of wrestling with this possibility began months ago. First, she had to come to grips with the possibility herself; then she had to communicate that development to her husband, whose work would remain in their current locale; then they had to see if the kids were on board; and only then did she really seriously consider this option.

And throughout it all, the “Will they pick me?” stress continued to build and build. The first interview. The call back. And now, a scheduled third interview. Oh, and running the business she already owns.

Most of us have been through some version of this and many other in-betweens—or we will be in the future. But as she recently brought me up to speed on the process and progress, I could feel my own stomach tighten. So I asked:

How are you managing being in the in-between?

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Curiosity: The Most Important Trait For Financial Advisors

I had it all wrong.

Early in my career as a financial advisor, my goal, even more than gaining clients, was to gain knowledge. I was operating under the assumption that bringing knowledge where it is lacking is an advisor’s primary value. But while a certain degree of knowledge is a prerequisite, of course, I eventually learned that knowledge is ubiquitous—readily available with a few keyboard taps—and that it can even be counterproductive when sub-optimally applied.

Fortunately, I graduated from that oversimplistic belief to a more nuanced one in which I found greater confidence. I determined that sound judgement was actually the most important trait for an advisor. It was the ability to apply knowledge, to help clients make a this-or-that decision, that was really where an advisor could demonstrate his or her worth. 

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How To Be Unhappy But Successful

“Are you measuring yourself in the gap or the gain?”

No, this isn’t a question pitting retail clothing against laundry detergent. It’s a question posed by Greg McKeown, the author of the essential book Essentialism, in his recent 1-Minute Wednesday newsletter.

Your answer matters, both in the way you approach money and life—but especially money.

“Gap thinking means looking at the distance between where we are and where we want to be (or comparing ourselves to what other people have achieved),” said McKeown. “Gain thinking means looking at the progress we have already made.”

For example, I had breakfast Friday morning with two friends, both of whom have experienced degrees of success in their professional lives that I could argue dwarf my own. That’s where my head would be if I was a gap thinker, anyway.

If I was a gain thinker, however, I might relish the fact that these dudes thought highly enough of me to give me a seat at the table…or at least that I was in good company for a free breakfast at a great restaurant!

As a financial advisor for a couple decades, I can tell you that the #1 question I’ve been asked by clients is some version of, “So, how am I doing…you know…relative to your other clients in similar situations?”

It’s not because these people are overly insecure or emotionally needy. But money—and, in many ways, financial planning—breeds gap thinking. Dollars, cents, credits and debits make it so easy to create a seemingly tangible success scorecard.

Perhaps you’re familiar with Lee Eisenberg’s book from several years back, The Number: A Completely Different Way To Think About The Rest Of Your Life. He recalls a regular-rotation TV commercial at the time (that may still be running in some form today) for a big financial institution where you see people walking down a busy street, each with a dollar number hovering over them.

This is the type of image that the very nature of money makes it hard to avoid.

It’s not an entirely unhelpful notion to quantify our financial security in the form of a single number, despite the risk of oversimplification. But such thinking leads us very quickly to comparison, which many years ago Teddy Roosevelt accurately declared to be “the thief of joy.”