Thinking Out Loud
When I left Northwestern Mutual back in 2013 it was a very stressful time for me. I had been working there for almost 22 years and suddenly I was on my own. The people at Northwestern had a team of 6 women calling all of my clients telling them I had left the business and I should come meet the new guy. I was in a race to reach out to my clients to tell them, in fact, I had not left the business and was still able to serve them.
Prior to leaving Northwestern I had taken a leadership development course with Mark Doherty and Greg Hartmann. They own a company called Cultural Architecture. They focus on helping businesses to create a great culture and grow their bottom line.
When I went on my own, I had to immediately call all of my clients and tell them what was going on. I was so nervous I could barely talk. The first client I went to see, of course, asked me why I left the gigantic company to go on my own. I fumbled with an answer and thankfully he agreed to stick with me. I talked to Mark and Greg about my struggles and they offered to do personal coaching with me. The first order of business was articulating my reason for leaving and why it was going to be better for my clients to stick with me rather than meet the new guy.
8 Years and Counting
Over the past 8 years I have been meeting with Mark and Greg just about every Tuesday morning at 8:30 a.m. We have a conference call and talk about what’s happening with my business, monitor my goals and progress and talk about ways to improve and things to work on.
Every time we meet Greg always asks me, what can we do to support you, Mr. Brown? Today was no different, but I told him I didn’t have too much to discuss but it never gets old doing our weekly calls, even after 8 years. Mark said it’s great to Think Out Loud with someone else. I thought that was just brilliant and told him I was going to write this blog about those three words.
Financial Planning and Thinking Out Loud
Here’s a personal example of having a person to think out loud with from our personal financial planning. I tried using the budgeting app called YNAB a few years ago. I would look at the videos, download my stuff, screw the whole thing up, get frustrated and quit. Towards the end of 2019 I saw a video from another financial advisor who said he was working with a person who helped him with YNAB, so I called him up and asked him about his experience. At first, I thought it was kind of weird or embarrassing saying you were a financial advisor then needing help with a budgeting program, but he said having another set of eyes and having someone who was an expert with that program was really helpful. Now my wife and I have worked with two different coaches who have helped us with YNAB and our budgeting. I told the second coach, Nick True that I was a little bit embarrassed to need help with this. He told me that my area of expertise was different than the nitty gritty detail skills that were helpful in doing the budgeting program. Plus, the more important part was I had someone I could think out loud with regarding our budgeting and our cash flow planning.
I do the same thing with my clients when we are talking about their financial planning. Most of the things I talk about like, having a budget, paying yourself first, protecting your ability to earn an income, diversifying your investments, etc., etc., aren’t rocket surgery but I think most of my clients like a second set of eyes and a person they can talk to about their individual situation. For a lot of my clients, I know more about their personal financial situation than they do.
The other thing I tell my clients is, I like their money. They LOVE their money! People have a tendency to do stupid things when they are emotionally involved. Sometimes when you’re talking to yourself it is easier to justify a dumb decision, but when you say it out loud to another person it sounds different.
Sometimes, no matter what I say, people still go ahead and blow themselves up, metaphorically speaking. I had a client call me and tell me she wanted to take a premature distribution from her 401k plan to pay off her credit cards. The inside her head justification was the interest rate on the cards was higher than her return on her 401k. I pointed out that she was going to have to pay ordinary income tax plus a 10% penalty to get at the money. In addition to that, she was going to lose the growth on the money over the years. The numbers were something like this:
401k balance: $20,000 at age 30 growing at 8% per year until age 65 would grow to approximately $295,000.
Credit card payoff: I’m pretty sure she ended up with about $15,000 after the penalty, federal and state income taxes. Plus she would miss out on the future growth of her money. To me, the answer was pretty clear.
Even after speaking with me she still took the distribution and paid off the credit cards. You can lead a horse to water but you can’t make it drink!
The Internet is Going to Replace You
After Jenny and I got married one of her friends from high school was visiting at our house. He was and is a website designer or internet dude or something like that. I remember him telling me the internet was going to replace me. I asked why he thought that and he said, in the future, people will be able to buy anything you sell over the internet. I told him, no they won’t! He disagreed and said they can buy stocks and mutual funds and life insurance and disability insurance. I said, there’s one thing they can’t but over the internet…..ME! Not that I’m so great or anything, but people want relationships and empathy and understanding. They want to Think Out Loud with a real person. I have seen articles lately about some of the Robo Advisors wanting to integrate with real, live human advisors who can sit down with people and talk to them. The best investment strategy in the world might be to buy the S&P 500 index and let it ride. But when the TV and the internet are screaming that the world is ending and all of your investments aren’t going to be worth a dime after this newest financial crisis, it’s very easy to get scared, click the sell button and put your money in cash. Or you want to take the money out of the emergency fund that’s earning 0.0% and invest it in GameStop of whatever. Why wouldn’t you pull the trigger?? Or you see the, a healthy male age 40 can buy a boatload of life insurance for $40.00 per month advertisement. No thanks! Nothing is going to happen to me. My grandpa lived until he was 97 and smoked three packs a day. Why do I need any stinking life insurance?
These are situations financial advisors like me have dealt with for years and years. We sit down with people every day, listen to their concerns, fears, and dreams. We put our heads together and... Think Out Loud!
If you or someone you know wants to sit down and think out loud with a really cool, smart, experienced financial advisor, I Know a Guy! As always, click the Get In Touch button at the top of my website and thanks for reading! KB