Author Seth Godin recently wrote, “Good advice is priceless. Not what you want to hear but what you need to hear. Not imaginary, but practical. Not based on fear, but on possibility. Not designed to make you feel better, designed to make you better.” I am not sure that I have ever seen better phrasing for this topic.
In the manner just described, there are five steps in the formula for good advice. The first step is the broad statement that “good advice is priceless”. Yes, good advice is priceless assuming that it is acted upon. Advice is like a Christmas present under the tree. You can open it up and enjoy the gift or you can leave it under the tree and stare at it unopened. Either way, the advice (the gift) was the same, but the manner it was utilized differed.
What You Need to Hear
The second step in the good advice formula is “Not what you want to hear but what you need to hear. “ There is an art to delivering advice. Often, we need to let clients know that the path they have been following is destructive. Because any change is difficult, this advice has to be offered in the spirit of solving an existing problem. If the advice is too brutal, clients shut down and if it is not clear enough, they will likely change nothing.
The third step for good advice is “Not imaginary, but practical”. We all have certain “money scripts” that influence the way we see the financial world. Many investors have their wires crossed between their view of the world and actual economic history. Our role is to help clients sort out the real from the imagined. The lens through which we see the world may need adjusting. This is one reason we usually include some overview of long-term market history in our review meetings. It is important to have that grounding since the financial media usually focus only on the short term.
Not Fear, But Possibility
Step four of the good advice rule says the advice is “Not based on fear, but possibility”. This is so important and aligns with our vision of trying to focus on specific aspirational goals of our clients. We work to create a path so clients can reach their chosen destination.
The fifth step, “Not designed to make you feel better, designed to make you better “ encapsulates all of the other steps. This is the overarching purpose of good advice in the first instance, “to make you better.” Good advice is just the starting point for making good choices and avoiding expensive mistakes. Ready for a real conversation?