Kids Grow Like Money



I am the proud father of 3 beautiful kids.  They are happy, in relationships, and on their way to financial success.  Having been in the investment field most of my life, I have recently become nostalgic about what got me here and where it will bring me next.  The experiences of my life have been diverse.  At the top of the list would have to be the privilege I have had interacting with my younger children.  There are so many things that we did and ways we interacted.  As I started to think about it more, parts of my memories melded together with my career.  It dawned on me that being a parent and consulting for my client clients have parallels. 


Getting Started

I remember my babies lying in the crib, unable to do much of anything.  It was that time, that my wife and I would lose sleep.  We would often get up to hold, feed, and nurture the babies.  I think any parent can relate to being needed that much. When you first start investing, all of it is a mystery.  Even how to start putting money away and how to report it on a tax return.  These are the people we put the most time into upfront.  They need nurturing or they will never get onto the right track.  I feel that in many ways if we or someone else didn’t help them, they would never have the opportunity to learn to invest, and their financial dreams would die.


The Jump

But time goes on.  Soon I was faced with stark realities.  The first in this respect was when my kids were done with the crib, they were done, I mean climb up the side and jump 5 feet done. No warning, just – well, “Thud” or more like “Thud…. WAAAAHHHHHH.” We made sure we had rugs in our nursery by the way...  Didn’t help much. The parallel is that because of all the preparation of starting, we can forget that someday you are just ready to jump. It’s time for a radical change to your plans.  Maybe you need to make a big career commitment, double or triple your savings, whatever it is, it is a milestone moment when a client stops messing around, and becomes super focused on getting things done financially.  That’s when we have to step it up.  Lots of planning to do so that no one falls hard.  There could be other disciplines we have never explored, like insurance or tax planning, or estate planning – previously left un-discussed.   This is a full on jump from your comfortable place. We better be ready for you! 


Feeling Powerless

Then chaos.  We have 3 children.  Suffice it to say that any combination of 2 of them got along great.  3?  Not so much.  They never put a hand on each other – strict rule of ours.  But as I remember them implementing their alternative - screaming - I am not so sure how good of a rule that was. That’s what investing can feel like.  Out of control, not fair, a feeling of powerlessness that just makes you want to scream.  Those years in the market we need to turn on our behavioral coaching hats.  The most difficult thing is to try to keep someone moving forward down the track when they are kicking, screaming and scared that the track is leading over a cliff.


That wasn't so bad!

But my kids weren’t really as mad at each other as they thought.  At least that was my theory.  In my kitchen we had 14” tiles.  When we had to deal with two kids going at it non stop, in would come punishment.  I think all of my kids have stories about my unique punishments, but one of them was making each of the kids stand on an adjacent tile staring at each other.  They couldn’t move from the tile or touch each other.  Eventually, complete hatred would turn to uncontrollable laughter. Try waiting through a market decline.  You are seeing devastation as your plans of palm trees fade into barren desert.  The last thing you want to hear is “hold tight, this is just a market correction.”  But you do.  And as markets do, they can also have fierce quick recoveries (let’s not count 2008).  Anyway, by the end of it, you are thinking about how it wasn’t that bad, while sitting under that palm tree.  (You have an ice cold drink in this scenario by the way).


The Next Awesome, Amazing, Exciting Horizon

All my kids are now out of the house.  One Married, One Engaged, and One Committed to someone.  They have flown the coop so to speak.  When doing so, they left the security of having meals cooked, laundry done, and a nice place to sleep.  (well, we may have weaned them out of the laundry thing a few years back.  Hard to remember).  You’re making a decision to retire.  You seem to have all your plans in order.  Regardless, it’s hard to turn in that retirement notice at work.  That was always your thing to fall back on.  Sure, you know you could always get a job somewhere if you needed to, but it wouldn’t be the same.  Kind of how the kids try to move back home, just to find out their bedroom is now a den.  The basement isn’t the same.  Cutting that tie to money coming in, and changing to money coming out is a leap of faith.  There is real reason to be scared in both scenarios; however, with that scared feeling comes the next awesome, amazing, exciting horizon.  A new kind of independence that with a little luck and hard work will be the anchor for the next phase of your life.


In summary, I in no way think that clients are like kids!  My point is that the ever changing complexities of financial planning kind of mirror the way you need to deal with being a parent.  You have to constantly be learning to keep one step ahead of all the changes.  What is the same, is it’s a lifelong battle.  Each stage of your life requires different responses to get you through to the next step.  It’s a journey, not a destination.

BLUE HILLS 
WEALTH MANAGEMENT

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