Attitude of Gratitude
I always like to end the year and take some intentional time reflecting on the past year and planning for the following year. 2021 has been a trying year, no doubt. It seems you couldn’t turn on the news without hearing about the global pandemic, politics, and some other societal tension. Nevertheless, the stock market has been performing well. When looking at three major indices (S&P 500(GSPC), Dow Jones(DJI), and Nasdaq(IXIC)), you will notice all three have strong YTD returns.
This further reinforces the notion that the best time to invest is always today. No one could’ve accurately predicted the effects of the pandemic on markets and businesses. However, if you stay in and take a long-term approach to investing, you will find how resilient the markets are.
Professionally I have a lot to be thankful for. Vantage Pointe Planning continues to grow. I am convinced that I get to work with some of the best clients around. They challenge me in a good way, and are intellectually curious, and value professional advice. In addition, I am thankful for all the families that entrust me and seek my guidance on some of the most important financial decisions in their lives. Our approach is always to get to know our clients personally so we can create a financial plan specific to their goals.
A big move for us this year was moving into our new permanent space.
As a way to invest not only in our business but the community as well, we developed a coworking space District No.3.
We see this as a space where members can work, connect, work collaboratively and build great companies. This aligns with one of the primary motivators in Vantage Pointe Planning – which is to provide value to support and always work in our client’s best interest.
It’s been a busy year. But, as any entrepreneur will attest, in building anything of note, it is essential for every team member to also practice self-care. I usually enjoy taking some time outside and just practicing gratitude, mindfulness, and intentionally taking stock of all my blessings goes a long way for me.
Thank you for your continued support, and I’m looking forward to all that 2022 will bring; and I’m hoping you spend some time focusing on the good in your life too. See you next year!
Investing and financial planning which lead to building wealth over the long term. There are so many resources out there that educate the public on best practices to build long-term wealth.
Everyone by now knows about the investment prowess of the Warren Buffet. His success with Berkshire Hathaway is well documented. It has been recently reported that his net worth surpassed $100 Billion. That is an incredible feat by any objective standard in one generation. Let’s assume that you nor I am the next Warren Buffet. However, there are some lessons we can learn from his success. Some best practices, when it comes to investing and building wealth. I’ve enjoyed and spoken about a recent book with my clients by Morgan Housel, The Psychology of Money; I’ve also had the pleasure of hosting a Q&A with Morgan. In the book, he discusses some of the success and cautionary tales when it comes to investing.
Invest like the Oracle of Omaha
For example, when talking about Warren Buffet, people often forget that one of the main factors leading to success is time, as in the market. He has been investing consistently for over 50 years! Identifying reliable companies or investment opportunities and letting time in the market work in his favor. We can not just oversimplify his success and solely attribute it to this one factor, working with clients and advising them on the best ways to achieve their financial goals. I can say unequivocally that using the time to your advantage is easier said than done.
Ok, so What is the most significant risk to your investment success? You! In the financial planning industry, and I’d say investing, overall, Behavioral Finance is becoming a discipline. There are even certifications and advanced training available in this, for example, Financial Therapy, Life Planning, to name a few. Behavioral finance is the intersection of money and psychology. Practitioners subscribe to this belief that financial success is primarily due to our different money attitudes, biases, experiences, risk tolerance, etc., over traditional financial analysis measurements. We’ve seen evidence of this recently.
A few short months ago, everyone was writing and speaking about the Gamestop fiasco when the stock price experienced an unprecedented surge (and eventual fall) in price within a short time. Many people bought the stock simply because it was “trending” or “heard” about it. Platforms such as Robinhood, TD Ameritrade, Schwab have all lowered the trading costs to $0, making it even easier for the average investor to buy and sell stock. This creates a perfect scenario for people to give in to the worst temptations and treat stock investing like gambling. This wouldn’t be that bad, except many people don’t know they’re gambling and think they’re investing.
Therefore one of the most significant value adds a financial planner can bring to a client relationship is to protect the client from themselves. The competent financial planner can run “interference,” adding an objective sounding board for the client before deciding.
Remember, one of the most significant predictors of investment success is time in the market. Having a sound plan and disciplined strategy will increase your probability of achieving your financial success. So yes, You are the most significant risk to your financial success, but thankfully this one is easily mitigated.
Why should you care and why should you pay for it?
It isn’t lost on me that you could be anywhere right now. The competition for your attention is at an all-time high. As more and more platforms become popular, and our attention spans become shorter it will become even more competitive. Starting a newsletter seems to be going in the opposite direction of what conventional wisdom will tell us. Even more insane is charging for it! There is so much “free” content out there so why would anyone pay?
At the risk of using an overused cliche, “there’s nothing really free.” Truthfully most articles on launching anything nowadays will often tell you the path to success is to first provide content for free, build your audience then upsell! So in other words you are the product.
Strangely there are similarities to the financial planning industry with this approach. You’ll often hear advisors, say “We do comprehensive wealth management…and the financial planning is free.” Anyone who truly believes in financial planning knows the incredible value that financial planning provides to the client. Our industry tends to focus on investment management and trying to get better returns (hey I’m all for making money too!) but no one planner really has any control over market performance. The value lies in the advice and working with a competent professional that has your best interest in mind. The value is in the financial plan so that’s what you should pay for.
The Vantage Advantage will serve as a way to engage readers by discussing relevant behavioral finance, financial planning, and other topics. The topics will be mainly for educational purposes since, without knowing your specific situation it’s impossible to truly advise you. One thing that will remain a priority of this newsletter is to deliver value. The hope is that the value will be such that you’re willing to pay for a subscription ($25/monthly or $295 annually). This membership will entitle you to at least a monthly letter delivered directly to your inbox or to be read on this site. Each month I will be covering a different financial planning topic and or other relevant topics. You would also be entitled to comment and connect directly with me! (I know I know awesome right?). I’d rather grow slowly with a small engaged community than try to put out “free” content that neither of us really get any value out of. Ok, occasionally there will also be a public post that will be available to everyone if for some strange reason you didn’t want to signup yet.
I appreciate your reading, and would love to have you become a part of our community!