17-Things You Need to Know
About the
Financial Industry and Your
Wealth
After nearly 20-years of providing financial guidance to families, I've picked up a few things along the way. While each of these comes with extensive stories and experiences, for now I'll just share the bullets. Perhaps one day I'll elaborate; in the meantime, ask questions if you have them...
- Financial Institutions manufacture
products. Financial Advisors are
the distribution channel for these products.
- A diversified portfolio is intended
to protect your future purchasing power, not accumulate vast amounts of
wealth. Most wealth is accumulated
through monetizing a business, real estate, or inheritance.
- During your Accumulation years, your
ability to earn income is your
most valuable assets. Protect it.
- During Distribution years, your assets are your ticket to reliable
income. Protect them.
- Losing a spouse really sucks; own plenty
of life insurance.
- You can transfer nearly any risk if
you’re willing to pay the premium.
- Statistics and iterations of
possible outcomes work well if you’re predicting for a million people. Unfortunately, your single instance is
the only one that will matter.
- Most Financial Advisors medicate
symptoms. Good ones diagnose the
cause. Don’t confuse the drug
dealers with the physicians.
- Taxes matter. Understand the basics of the system and
how it works. (Or doesn’t)
- You have rights to things, but own
nothing. You are only responsible
for the temporary management of stuff.
- Always seek a balance of flexibility and certainty.
- Debt stinks and limits your flexibility when
opportunities arise to do what you should be doing.
- Having a financial plan is not a
destination or achievement. Having
a financial direction and system for decision making is.
- Transferring assets is easy science. Transferring values, roles and
responsibilities, and positioning your family to get along, is masterful
art.
- Losing your spouse or parent and
having to pick up the pieces sucks.
Not knowing where to look for the pieces, or if there are any
pieces is much much worse.
- Neither you nor your financial advisor
can predict the future.
- When considering who will oversee
your affairs when you’re gone or unable, consider the person with the best
peace-making skills as opposed to the one with the most financial
acumen.
I could add many many more; hope these are helpful or inspire a little thought!
Cheers ~ RyP
