Presidential Financial Planning

As if you needed another reason to be more disconsolate about the options available to you on your presidential ballot this fall.

But since we’re all in a presidential mood right now, let’s take a look back at some presidents of the past and a few of their well-known quotations. Our mission here is to simply take those quotes and weave them into some sort of retirement planning wisdom.

And where should we start, but at the very beginning…

“When only one side of a story is heard and often repeated, the human mind becomes impressed with it.” – George Washington

What’s our financial connection here? Well, how often do we see the Wall Street machine create a narrative that becomes the accepted storyline? When the talking points have been repeated often enough, they eventually become the conventional wisdom.

One of the most the common Wall Street talking points is, “It’s only a loss on paper. You haven’t lost anything unless you sell.”

Well, that’s true if you’re 35 years old and you don’t have to sell anything. But what if you’re 67 and you’re retiring next year and you need to sell those shares of Proctor & Gamble to generate income? Suddenly that loss is a little more than a paper loss.

“Trust but verify.” – Ronald Reagan

This can be a delicate balance to strike for a lot of people. Most people have one element mastered, but they struggle with the other one.

With some folks, trust is very difficult to earn. And in a couple of cases, I’ve actually told people that we shouldn’t proceed with any planning because I can tell that they have trust issues and it’s unlikely that we’ll be able to accomplish anything.

For instance, I remember a lady who came to visit a couple of years ago. She wasn’t very inclined to share much about her goals or dreams for retirement because she was too busy giving me the side-eye while she tried to discern how I was going to distract her with my left hand while stealing her wallet with my right. Needless to say, if there’s not at least a reasonable expectation of trust from the very beginning, we’re not going to get very far.

On the other hand, some people trust everything they’re told way too readily and don’t do a good job with the “verify” portion. A gentleman comes to mind from a few weeks ago who was ready to implement several different strategies before I’d even had a chance to describe any of them. I could tell he was way too eager, so I floated this test balloon:

“I think we should put half of your IRA into a variety of Middle Eastern currencies. The other half will be split between biopharma penny stocks and Guatemalan real estate.”

I really thought he’d know I was joking. But he was not aware.

So I had to disabuse him of the notion that we’d be adding a Central American volcano to his portfolio. And then we had to have a little talk about the importance of understanding what he’s doing before he does it.

“Ask not what your country can do for you, ask what you can do for your country.” – JFK

What if all financial advisors said, “Ask not what this potential client can do for me, but what I can do for this potential client?”

If you’re not already familiar the concept of a fiduciary, it’s something that you’ll want to get acquainted with. A fiduciary is someone who’s legally required to act in your best interest. That means an advisor who’s a fiduciary would have to be able to prove in court that the advice they gave you was for your benefit, not to help them make a commission.

Here’s a few types of people who are fiduciaries:

Registered Investment Advisors

And a few people who aren’t:

Life insurance salesmen
Toyota dealers
Lou the butcher

Does that mean that all attorneys and investment advisors are perfect fits for you? No. Nor does it mean that the guy trying to sell you a life insurance policy is a charlatan. But if you’ll take a moment to understand how people are compensated, you’ll have a better understanding of how to filter the advice they give you.