How Financially Literate Are Your Clients’ Kids?

This recent piece in USA Today got me thinking, What Schools Teach Kids About Money Is Scary. I know many of you won’t admit to reading USA Today unless you’re stuck in a long airport delay. But a LOT of people DO read this paper and it tends to have a good finger on the pulse of the American public.

Guest author, Peter Dunn, suggests a hypothetical 13-week money skills course for teens and pre-teens. Perhaps it’s too basic for many of your clients—but not too basic for their kids and grandkids. And if your clients review Dunn’s tips, they might pick up a refresher or two for themselves.

Week 1 is very important because Dunn stresses the importance of one key point: “Your financial life is not about money; it’s about behavior.”

Our client Gary Klaben frequently reminds followers of his blog that “Saving First, Spending Second” is the most valuable money habit you can have.

Dunn also stresses the importance of budgeting and goal-setting in the early weeks of the course—how to manage debt and how to watch out for all the little nickel-and-dime luxuries we pay for that can blow a big hole in our budgets. Around week 7, Dunn would introduce the power (or danger) of compound interest. I would personally introduce compound interest earlier in the course since compounding is your friend as a saver/investor but your bitter enemy as a debtor. Also, most middle- and high-schoolers can do the basic compounding math ( I have one of each).

Our own blog and website has more.

In Weeks 8-10, Dunn would devote a fair amount of time to student loans. That might be too much, other than helping them kids understand that you want to avoid student loans as much as possible. If for no other reason than you don’t want to take on debts on bad terms that can stalk you throughout your adult life. I don’t think students younger than high school juniors and seniors can grasp this concept until they may have to face the reality of NOT being able to attend their first, second or third choice of colleges for financial reasons—not because they didn’t have the grades or extracurriculars. We do give Dunn kudos for this point however:  “Saving for a purchase almost always makes more sense than borrowing, especially on lower-price items.”

Finally, the topic of insurance. Life insurance is a tough concept for kids, teens and young adults to wrap their heads around. They think they’re invincible, so why pay a lot of money for something they’ll never need? However, we do like Dunn’s suggestion of teaching kids about insuring their material possessions because at that age, loss of a mobile device, ear phones or even a car can appear to be a life shattering event.

For more good resources to share with kids and grandkids of clients, we recommend Gary Klaben’s Grown Up Money blog and The Financial Awareness Foundation website founded by our good friend Valentino Sabuco, CFP®, AEP®.

Conclusion

Even if kids, teens and young adults in your lives know how much their parents make or what their house is worth, you can’t expect them to know how little of that wealth can be utilized as spendable cash—my dad makes $100K, why can’t he buy a $100K used Ferrari? But, you can teach them about the value of delayed gratification by working and/or saving for the things they really want. When a price tag is expressed in terms of hours bussing tables or how many lawns need to be mowed, then we assure you, financial literacy will kick in—fast!

And remember, the 3^rd week of October is National Estate Planning Awareness Week, courtesy of Val Sabuco. And if for pre-teen kids in your life, consider giving them a Savvy Piggy Bank which has separate compartments for Saving, Spending, Donating and Investing.

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TAGS: teaching kids financial literacy, Peter Dunn, Gary Klaben, Valentino Sabuco

Nice Gig if You Can Get It

NPR linguist Geoff Nunberg, recently anointed the noun “GIG” as the word of the year. Whether you’re a business owner, full-time “monogamous” employee or independent contractor, you’re affected by our increasingly on-demand economy aka, the “1099 economy”, “peer-to-peer economy”, or “freelance nation.” According to the Financial Times our work will be less secure, but a lot more exciting in the future since we have the freedom to make our own schedule and hours, pick the projects that interest us, work from anywhere and try our hands at different trades.

But most of you reading this blog already know about what Nunberg calls "solopreneurs" and "free range humans" with "portfolio careers." You’re entrepreneurs or at least intra-preneurs for your organizations.  Many of you run your own financial advisory practices, media properties or professional associations. You have built your enterprises by hiring the past and brightest independent contractors you can find. In most cases you pay them well, treat them well and refer them well.

If you’re a wealth advisor, chances are your overhead is pretty low, but your earnings are quite high, since you bring in CPAs, estate planning attorneys, tax specialists, planned giving officers and more, depending on each client’s case. If you’re running a media property, you keep the full-time staff low and bring in designers, content shapers, web gurus, social media specialists, independent sales reps, videographers and production people as needed. If you’re running a trade association, you’re full-time staff is low, but you’re a master at wearing multiple hats and bringing in highly talented volunteers and centers of influence from your industry to help on any task imaginable.

See my latest Corner Office profile of Betsy Monseu of The American Coal Council for more on the joys of wearing multiple hats.

 As our client Gary Klaben, of Coyle Financial Counsel posted last week, “The idea is to team up with people who complement your skill set. Don’t try to do it all yourself. In today’s Internet age, it’s never been easier or less expensive to find highly qualified specialists for every task imaginable and to put together a great team.”

Conclusion

Figure out what you really do best (and like to do best) and leave the rest to the experts. You’ll get more done in less time and have more hours in the day for your friends, family and passions. Who knows, one of those passions may turn into your next Gig!

Our blog and website has more about this and related topics.

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TAGS: Gig Economy, solopreneur, Betsy Monseu, American Coal Council, Gary Klaben, Coyle Financial Counsel, portfolio careers, Geoff Nunberg, NPR

Is Modern Technology Overrated?

We know it’s not cool to suggest that the tech revolution is overhyped. But, that’s how many professionals feel sometimes regardless of age.

I just spent two days unplugged from the grid over the long weekend. No email. No texting. No downloads from the cloud. Guess what? The world didn’t end. It was actually pretty liberating. I used a landline phone with no problem. I took some notes with a pencil and paper and actually looked at a paper map while driving and made all the right turns without GPS, Siri, or the reassuring voice of an anonymous female voice with her fake British accent. And when I returned, my email inbox was full, but no excessively.

I’m no Luddite. It’s just my patience wears when all the new tech tools and gadgets supposedly making my life easier don’t work—or constantly need upgrading. Sometimes it’s just easier to use your brain in an ad hoc fashion than let technology solve your problems.

Real world examples

I frantically finished an essential piece of work Friday afternoon, diligently saved to my hard drive, cloud and external drive. I prepared to shut down the computer for the long weekend when I got the infamous warning that essential upgrades were needed on my PC--27 in all—“Don’t shut down or turn off your machine.”

Finally out of the office, already late, I had a small auto malfunction. No big deal except I accidently accepted an app upgrade on my Smartphone while trying to get AAA roadside assistance. It took 30 minutes for the upgrades to load—which meant 30 minutes I couldn’t call, email or text for help or let me family know where I was or what was going on.

Then I had to find directions to my niece’s out of state wedding at an obscure bed and breakfast on the New England coast line….Mapquest, Google Maps etc. kept forcing me to GPS connect to all the local hotels, restaurants and gas stations in the area, when all I really wanted was turn by turn directions. The Smart security alarm in my home malfunctioned while I was away, so the fire department apparently came by for a midnight false alarm. I didn’t score any points with my neighbors for that won and it cost me $250 to boot.

Is tech really making us better off?

As Times columnist Paul Krugman observed yesterday, the new technologies are “more fun than fundamental. Information technologies that excites the Twittering classes may not be a big deal or the economy as a whole.” What’s more, “the new technologies have yielded great headlines but modest economic results,” continued Krugman. And they aren’t really making us more productive, just more wired, he implied.

While computers, artificial intelligence and robo advisors are creeping into our lives more and more each day, there are certain things that the pliable, creative human brain can do that machines simply can’t. Robert Shiller, the renowned economist and Yale professor, noted the other day we need to teach students to outsmart robots. In other words, we need to make education more “business focused” and teach about the “creative entrepreneurial process that presumably computers cannot duplicate.

Many of you are financial advisors, attorneys or CPAs. Let machines and other technologies handle the repetitive, low-margin, uncreative aspects of your work and free up your brain for the high margin, creative solutions that your clients expect from you.

Conclusion

As our client Gary Klaben of Chicago-based Coyle Financial Advisors noted in a blog post that we helped him with last fall, “Use each competitive threat as motivation to “up your game” and further refine your target market and the value you provide to your clients—and your clients’ heirs.”  Also see Derek Markham’s post for more Overrated Technologies and Their Overlooked Alternatives.

Our blog has more, as does the FREE Resources page of our website.

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An Unexpected Gift of Time

Yesterday afternoon, one of our weekly client conference calls was cancelled at the last minute. Nothing remarkable about that, except the meeting organizer, who’s always very on top of things said: “Enjoy the gift of time” in her meeting cancellation notice. You don’t hear that every day.

And, it was a gift. Due to some IT issues that shut us down for half the day, we weren’t as prepared as usual for our weekly “gut check” call with this no-nonsense client. Nice folks from the midwest, but you can’t BS your way through a call with them. Suddenly, we felt we had magically “manufactured” an extra hour of time in the day. Trust me, it didn’t go to waste.

For many of us, the next 60 days will be a series of moving deadlines, delayed decisions, interruptions, weather “events,” travel delays and last minute shopping and year-end planning. You won’t know exactly when a big hole will be blown into your carefully organized schedule, but sooner or later it’s going to happen. We’ve found our most successful clients are not necessarily the ones who are the most organized; it’s the ones who can adapt the fastest to a changing landscape.  

How to cope? Tough love

If you’re expecting us to tell you to take a deep breath, count to 10, make a nice cup of herbal tea and talk a long walk, you’ll be disappointed. As regular readers know, we prefer the “tough love” approach.

So does one of clients, Gary Klaben, of Coyle Financial Counsel in Chicago.  Klaben suggests placing boundaries around yourself and your team so you can’t procrastinate or get distracted. Klaben said the simplest way to accomplish this is to get tough tasks on our schedule. Right there where everyone can see it.

Borrowing a page from Tim Ferriss (The 4-Hour Workweek), Klaben only puts something on his schedule only when it’s a “Hell yes, man, I’m really excited about it!” In addition to “hard scheduling,” Klaben said you should tackle your most difficult tasks first thing in the morning. “I find that if you put those boundaries in place and really schedule things, then 80 percent of the time the task gets done,” he said. “By contrast, very little gets done if you don‘t put it on the schedule.”

A West Point grad (like his son and daughter), Klaben is clearly a disciplined guy. But he also recommends building in “focus” days, “buffer” days and even free days into your monthly and quarterly schedule. This forces you to take a step back and think. In other words spend some quality time ON the business rather than IN the business. But, if you don’t schedule those days, they ain’t gonna happen.

As many of you know, we advocate getting at least a one-month head start on your New Year’s resolutions and revisiting those goals several times throughout the year. It doesn’t matter how lofty or modest your goals are. You need tangible metrics to show progress and make them stick.

If you’re not a morning person like Klaben, don’t sweat it. Just try to figure out when you’re most productive and leverage the heck out of that time of day. For tips on how to do that, check out one of our most popular posts of 2014, The Best (and Worst) Times to Do Things at Work.

Conclusion

Time’s going to keep flying by; we might as well have fun adapting. Happy Holidays  (way in advance).  We also recommend Tom Friedman’s NY Times op-ed piece from yesterday, The World is Fast. He explains how the three biggest forces on the planet — the market, Mother Nature and Moore’s Law — are interconnected and why you need to pay attention to all three.

Fasten your seat belt and enjoy the ride. We’ve got a lot more to do before we ring in 2015.

Our blog has more, as does the FREE Resources page of our website.

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Manage the talent, not the job description

Many of you are lamenting that you can’t keep up with all the new business that’s come in recently. If you’re expecting us to say admiringly, “That’s a nice problem to have,” then think again. Chances are, you’re not keeping up with the client promises you’ve made; you’re team’s getting burned out; you’re not scaling up to take on bigger and higher profile clients; and you’re probably losing opportunities to firms with deeper bench strength. Still think that’s a nice problem to have? If you stopped hiring and interviewing prospects during the downturn and you weren’t developing your staff and knowledge base internally during those dark days of 2008-2010, then you may be playing a dangerous game of catch-up just when the demand cycle is on overdrive.

Zero turnover in six years
I recently interviewed Stephanie Drake, head of the American Hospital Association in Chicago. A human resource professional by training, Drake told me she manages talent, not job descriptions. “The person who manages our publications also handles all of our finances,” she said. “That person has a unique skill set that you can’t interview for. I want people to do their best work and utilize as many of their talents or interests as they can.”

Does this approach work? Drake’s had had no voluntary turnover in the six-plus years she’s been at the helm. That’s right, zero turnover. Drake shared another example: “Suppose you’re a marketing person and you’re interested in conference planning even though you’ve never done it before. We’ll encourage you to shadow someone in our conference planning group and try it out and see if it’s a good fit for you.”

Charles Boinske, founder of Independence Advisors  in Wayne, PA agreed. “Team development is critical. Educate them. Provide them with learning opportunities. Doing so will increase your firm’s knowledge base and lead to better results for your clients and more satisfied team members,” said Boinske, a new client of ours.

Now if you’re really committed to exponential growth, not just a few percentage points every year, then Gary Klaben, Family Manager of our client Coyle Financial Counsel in Chicago, said the kind of people you have on the team will be attracted by a “10x” growth philosophy as well. “They’re going to be more alert, responsive and curious. And they’re going to take ownership of the business. That’s very important in wealth advisory services because there are so many moving parts and things going on that we need folks to be looking out for the best interests of the business. It’s not just a job.”

Never stop innovating

AHA’s Drake said her organization is willing to try anything at least once to see what happens. “If it serves a member need and has the potential for positive ROI, then we’ll give it a try. Our new HR professional certification program is an example of that [philosophy]” she said.  Boinske agreed that you should never stop innovating.  “I tell my staff, ‘If we don’t fail periodically then, we aren't trying hard enough.’ Keep a logbook of your successes and failures and celebrate both.”

According to Klaben, if you really want to create exponential growth in your business, then you have to “pull the future toward you by embracing technology and change.”

Conclusion

Get your team invested in the business, not just in promotions, new job titles and bonuses. The more they feel like stakeholders in the business and less like employees, the more likely they’ll go the extra mile for you and help you bring in, develop and retain like-minded high achievers.

It’s Monday. Let’s get to work. Time to bring in all those great opportunities that you and your team deserve.

There's more on the FREE Resources page of our website.

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Tags: Manage the talent not the job description, Stephanie Drake, American Hospital Association, Gary Klaben, Coyle Financial Counsel, Charles Boinske, Independence Advisors