Almost everyone has some physical scars from a fall, a burn or even surgery. Many times, these scars are from events that took place years, perhaps even decades ago but still remain as reminders of the pain we experienced. Most of us also have financial scars resulting from poor planning, poor decisions or poor judgment. Just as with physical scars, these financial scars remain with us even if they are not as visible.
The Need for Financial Education
One of our core roles is financial education. The more clients understand about the framework of the markets and why we make particular recommendations, the better. Because we all have different backgrounds and different life experiences, we bring all of this (good and bad) to the wealth planning relationship. Financial scars from long ago can still wield a strong influence on our decisions today. Education about financial truths helps clients avoid creating new financial scars.
Learning from Past Mistakes
Drawing upon our 3 decades of experience in providing advice to successful individuals, we can make an observation. In general, it seems investors need to make some mistakes, create some financial scars, before they are truly ready for advice. Sometimes the young and invincible have to become the older and vulnerable in order for there to be space to accept advice. Younger investors sometimes don’t think they have financial problems to solve. Without a problem, there is no need for advice.
Our relationship with things that didn’t work out financially in the past often determine how well we can make the changes needed today, to accomplish financial goals in the future. Financial scars don’t totally go away but we certainly can make sure they don’t control our financial future.