21 Nov 2014 Every Day and Night Matters

If you could be assured of confidently reaching or exceeding every financial goal you value while living a lifestyle that demands as little personal sacrifice as possible, would you be interested? Your immediate response was probably ‘of course I would.’ Who wouldn’t right? But while everyone wants to reach their ideal aspirations, few behave in ways that are likely to get them there.

Which one word in the first question describes more than any other the difference between common practice and best practice in lifetime investing?

It’s not ‘assured.’ People are assured everyday by financial ‘advisors’ in wrong, or less-than-best practices of investing.

It’s not ‘exceeding.’ In fact ‘exceeding’ is the goal of people who pour over historical performance reports to find the best company, investment manager, or hedge, or mutual fund manager to deliver returns in excess of those available in the capital markets.

It’s not ‘sacrifice.’ You will never see a financial services provider advertise that you should save more money, work longer, take more risk, or give up on any of your important goals, when in fact that describes the very nature of their product offerings and processes.

The important word, the vital differentiating component is ‘confidently.’ Unless a process can provide continuing robust statistical confidence that you will meet all of your important goals there is no way for you to be adequately assured of doing so. In fact there is no way to measure the wasteful excess you experience in your investment process. In essence, without proper statistical oversight, you are most likely needlessly sacrificing your time, emotions, and resources as you invest for future goals.

The truly best practices in financial management and planning combine statistical confidence with hyper sensitivity to lifestyle sacrifice. Don’t be fooled into thinking you can have confidence or are not sacrificing merely because your financial advisor uses Monte Carlo analysis. If he uses actively managed investment products to implement your portfolio, understand that Monte Carlo is likely useless and the increased volatility and uncertainty of active management actually decreases your confidence, while increasing your financial sacrifice.

If your financial advisor has not designed a financial plan that honors your priorities (likes and dislikes) for saving, working, risk and others to pull from areas that are not important to you in order to maximize those that are, then you are sacrificing needlessly in your plan.

Are you truly assured of confidently reaching or exceeding every financial goal you value and living a lifestyle that demands as little personal sacrifice as possible? If not, call us immediately. Every day and night matters.