From the category archives:

wealth planning

3 Biggest reasons traditional financial advice is so dangerous to your financial future

by David Finkel on May 15, 2009

Hi everyone.
I’m doing my final prep for teaching on how to intelligently manage and invest your net worth for maximum wealth.  Just sat reading through my notes on traditional investments pushed on most individuals and I noticed i started getting a little bit angry.

Hence I thought I’d “blog it out” and share my 3 biggest reasons why I hold traditional financial advice to be so potentially dangerous:

1)  Most financial advisors are really securities dealers with NO fiduciary responsibilty to you.  They only have to give you advice to investments that are “suitable” and that standard is just not acceptable to me.
LESSON:  make sure you ask, in writing, if they are a fiduciary role for you or not… that term matters… it has legal force.

2) For those of you who invest in securities (think stocks/bonds/mutual funds), study after study show that Index funds held over long term and NOT actively traded will outperform over 80+% of the actively managed funds for total returns over the long term… If you are going to use this vehicle (and personally I’m a commercial real estate and business guy so I don’t, not where my personal advantages are) why would you go any other way?

LESSON: if you are going to invest in securities, then appropriate LOW COST index fund (i.e. expense ratio under .3 percent) is the way to go… and DON’T actively trade it!

3) “Stocks… Bonds… Other…” and the myth of diversification.  I do not believe that you manage investment risk by investing in a huge cross section of areas… I think the best way to manage risk is to educate yourself and cultivate investing advantages… this requires you t oFOCUS not diversify.  You can’t be great in all areas, choose the area that best meets your goals, your Advantages, and your current starting point.  Then out of strength you can choose to broaden your niche over time.  In the interim, 1-2 index funds gives you plenty of diversification if you want to just take the average market returns (and DON’T just take this unless you have a LONG — think 10+ years– window to needing your money.)

LESSON:  Invest in yourself.  If you asked me, David I have $20,000 where should I invest it?”  My simple answer would be for you to take 5-10k of it and over 12-24 months invest it in your financial,business, and wealth education.  This means getting the books, taking the classes and workshops, and going through the home study courses.  This is one investment that to ignore could cost millions…

Thanks for listening… I feel a bit better.

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Level Three Business: Beyond the Mission Statement

by David Finkel on January 27, 2009

Knowing your mission, vision and values are important steps in creating a Level Three Business.

But there’s a further step for you to go, and that’s understanding what your business really is, and why your clients and customers buy from you. I call this uncovering your client’s “Deep Buying Desires™”—those key drivers that shape and control your client’s real buying behavior.

Once you understand this, then you can work to strategically design your business to capitalize on your uniqueness and create clear and consistent messaging. This is the essence of what it means to craft your business’s brand.

99 out of a 100 businesses get it all wrong. They start with what they want people to think of them. But truthfully, rarely are businesses able to control this. By the time they get around to “branding” all they are really doing is slapping a fancy new label on the way they’ve always done business. This doesn’t change their client’s perceptions or shape their client’s experiences.

A much more effective strategy is to systematically uncover what your clients actually do think about you, and then to harness this energy to propel your business to the next level. The only way to find out is to ask. So what this requires is the mastering some pretty special interview techniques — something I’ve spent a long time working to develop.

When you’ve gotten very clear on your business from the big picture on down, then it’s time to move on to building your business’s foundation.

Read more about this in an extended Wealth Update I’ve written at: How to Build a Thriving Level Three Business.

And here is an invitation to join us at a very special workshop event in San Diego, CA: Level Three Wealth Workshop

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