Broker Check


June 22, 2021

Do you want to feel confident about money? Do you want to worry less? There's a lot of information out there about investing and frankly, most of it just creates confusion and worry and lack of confidence or peace of mind. 

Most people are looking for stability, direction, resources, and guidance – they're not looking for drama. There are financial advisors and investment professionals out there who are offering actual predictions of the future. As we've learned, nobody has a crystal ball for this.  What’s really important is that you start by discovering your true purpose for money. Many people spend more time planning a two week vacation than they do their lives! Figure out what’s important to you and what you want to accomplish. Once you’ve done this, then you can plan a clear path on how to get there. 

Misconceptions in Financial Planning

The biggest misconception is that we need to have a prediction of what's going to happen next. What’s next for the virus? How are these things going to impact the market? The reality is that nobody knows. There are too many variables and people think that they need to have some sort of crystal ball into the future in order to get returns on their money. That’s one of the biggest misconceptions in financial planning.

It would be like trying to pick a single stock hoping it will outperform the market. More often than not, it doesn't. Those that do are almost like a winning lottery ticket and a lot of times people look at an investment’s track record and they take that recent past and they project it into the future.  So they look at the track record and say, “Well, this fund did really well the last three years, so I'm going to put my money there.” They’re more than likely going to be disappointed with the results in the future because what they did in the past is no indication of what's going to happen in the future.

Financial Advisor vs. Financial Coach?

One of the first questions you should think about is, are you working with a financial coach or just an investment advisor or stockbroker? You may not know the term financial coach, but one of the things that many people aren't aware of is that when a financial coach looks at the equation of being a successful investor, it's actually made up of two different parts. 

The first part is creating a broadly diversified portfolio that's engineered to potentially capture a fair rate of return for the amount of risk that you're willing to take. 

The second part that most people don't consider is the impact of our own behavior and how it can halt our progress. And through no fault of our own, we have emotions, instincts and perceptions just by being human. And as a result of this, the hard wiring in our brain reacts to circumstances and events that happen in our life. So, things like the pandemic or other world events cause us to react emotionally. And unfortunately, when this happens, our brain, which focuses on our survival, can turn off reasonable thinking so that the decisions we make under stress are based on emotions rather than actually what may be in our best interest. 

 That's why it's important to have a financial coach by your side, because your coach is the one who is going to step forward when you make that panic call saying, “I'm not sure if I can withstand this. Can we just sell all of my investments?” They're the ones who are going to calmly step in and say, “No, I just want to remind you what we talked about--that market crashes happen and we’re going to get through it.

5 Big Questions Financial Coaches Ask

  1. When it comes to building your investment portfolio, do you know exactly what you are doing and why?
  2. Do you have a customized lifelong game plan to guide all of your investing and spending decisions?
  3. Have you discovered your True Purpose for Money, something that is more important than money itself?
  4. Do you have an academic method for measuring your risk tolerance and do you know what that number is?
  5. Are you ready to shift your personal experience with money and investing from scarcity to abundance – where you can live your life rather than worry about your assets?

Getting Started

A lot of times people feel that they don't have enough money in order to get advice, and they try to do things on their own. Many people are just doing what they think they're supposed to be doing and sometimes they're a little embarrassed to ask for help. They feel they don't have enough money and that no one will really give them the time that they need.

Unfortunately, a lot of the financial industry has no interest in your financial health; they simply want to make a commission on the transaction. You deserve better. You deserve a financial firm that helps lead people to discover their purpose so they can live the life they envision. No matter the size of your income, savings or investments, you can live a life of purpose.

Dream big, find a financial coach, and make a difference!