Making Money versus Managing Money

Since we work with successful individuals, by definition, our clients know how to earn money.  Making money is hard enough, but managing money is infinitely more difficult. The skills and instincts necessary for one can actually hinder the other.

A significant component of how we help clients revolves around navigating clients away from the “shallows and shoals” towards a more reliable route. We call this “Behavioral Guidance,” and all of us need this as we make financial decisions because of our internal wiring. Research shows that our brains simply are not set up well for rational financial decision-making. We have a permanent affliction of the mind that results in decisions being made mostly on emotion. Sure, we may have a rational explanation, but the real decision trigger is emotional.

I recall several years ago talking with a successful business owner at a cocktail party. He said that he didn’t invest in anything that he couldn’t control. His belief was that he could control his company but not the stock market, and therefore, he had zero stock market exposure. He readily admitted that he was under diversified but that had served him well…until it didn’t. A couple years after that conversation, his business was bankrupt and his financial life, (at about age 60,) was in shambles. The characteristics that helped him build a business and make money had actually been a detriment to his ability to build a sustainable financial life. Sadly, he failed to recognize the difference and was not open to change.

Almost every day, we see examples that remind us that ultimately, we are in the human nature business. What sets us apart from others is our willingness to deliver unbridled honesty to clients. Nuanced information is worthless. Our primary objective is to deliver real advice to help clients take actions that will result in better outcomes. That is our raison d’etre. Ready for a real conversation?

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