FLBC 010: Putting the Serve Back into Financial Services

We explore what financial advisors can do in order to be better stewards of the investing public.

Podcast Details:

Podcast Title:  Putting the Serve Back into Financial Services
Podcast Series: Financial Literacy Boot Camp

Full Illustrations available on YouTube Version here.

Questions/Issues We’ll Address on this Episode:

  • How can we as a profession put the serve back into financial services? What actions can we take to make sure people in need of financial services feel they can trust advisors with this great responsibility?
  •  How can I serve you? Be a listener
  • Refer away the business you can’t service. Seek the client’s best interest.
  • Always follow-up. Remain accessible throughout the financial planning advice process.

Helpful Links:

Help with Finding and Advisor
Submit a “Boot Camp Listener” question

Where to Find Us:

Website
Blog
LinkedIn
Facebook
Twitter #FinancialLiteracyBootCamp

Bio:

Dominique is owner of DJH Capital Management, LLC. a full service, comprehensive financial planning firm helping individuals build roadmaps to reach their financial dreams.

© 2016 DJH Capital Management, LLC.

Sound bumps provided by www.bensound.com

The Branding Series: Building Sustaining Brand Value (Part 2 of 4)

“Your brand is what other people say about you when you’re not in the room.” – Jeff Bezos [ecae_button]

Lesson #2 – You either create or destroy value by brand association.

There’s a cute anecdote that my wife loves to tell that you’ve probably heard, and it goes like this:

Once the President and First Lady went out for a night on the town.  Toward the end of their evening as they were driving back to the White House, the car stopped at a traffic light.  At the same time they both noticed the foreman at a small construction site repairing what seemed to be a large pothole in the street.  The First Lady looked intently at the foreman and said, “Well I’ll be!”
“What?”, replied the President.
“If I didn’t know any better I’d say that foreman over there is the same man I dated in high school and went to prom with.  At one time, we were madly in love.  My, how things change”.
With an air of confidence, the President replied, “Well it is a good thing you didn’t stay together, you’d be the wife of a construction foreman now.”
To which the First Lady replied, “No dear, he’d be the President now”.

We often go about, not really understanding the power of brand association.  It is said that you can take your top ten associations, and your household income will probably be within 5% of that average number.  Well what if it is not?  You probably need to re-evaluate your associations.  You can either create or destroy value by brand association.  Don’t make the mistake of destroying your brand’s value by making bad associations.

Lesson #3 – Consider your transition plan earlier rather than later.

Unfortunately, athletes know all too well that their “big chance” can be here today and gone tomorrow.  Most athletes are just an injury away from not being able to do what they love the most.  If so, what will happen?  If you haven’t created other streams of income, through saving and investing, then you will have a long road ahead of you of “normal living”.  Don’t get me wrong, there’s nothing wrong with this as most individuals live this type of life, but they are not adjusting to having access to six or seven figures either.   Unless you’re Ryan Broyles, living on a fraction of your current player salary would be a hard adjustment. This is why I recommend working on your transition plan as soon as your career begins.  Maybe Murphy won’t darken your doorstep, but you can never be too sure.  In any case, it helps to be prepared for 50-60 more years of living expenses after your playing days are over.

FLBC 009: Understanding the Psychology Behind Investing

Podcast Details:

Podcast Title:  Understanding the Psychology Behind Investing
Podcast Series: Financial Literacy Boot Camp

Full Illustrations available on YouTube Version here.

Questions/Issues We’ll Address on this Episode:

  1. What is up with the psychology behind investing? Looking at the numbers any rationale person would avoid destructive behaviors right?
  2.  What is the difference between active and passive investment management?
  3. What has taken place with investors and their behavior?- DALBAR Quantitative Analysis of Investor Behavior sites that between January 1, 1985 to December 31, 2014::
    – equity mutual fund investors underperformed the S&P 500 (the equity market proxy) by 8.19% (13.69% vs. 5.5%)
    – fixed income mutual fund investors underperformed the Barclays (the bond market proxy) by 4.81% (5.97% vs. 1.16%)- Parting Thought: What if instead of trying to outperform the market to create wealth, you instead looked at the market as a way to preserve the wealth you are creating through your income?

Helpful Links:
Dalbar report
S&P 500 index
Barclays index
CFA Institute

Submit a “Boot Camp Listener” question

Where to Find Us:

Website
Blog
LinkedIn
Facebook
Twitter #FinancialLiteracyBootCamp

Bio:

Dominique is owner of DJH Capital Management, LLC. a full service, comprehensive financial planning firm helping individuals build roadmaps to reach their financial dreams.

© 2016 DJH Capital Management, LLC.

Sound bumps provided by www.bensound.com

The Branding Series: Brand Recognition (Part 1 of 4)

Do you think of yourself as a brand? If you don’t, you should. [ecae_button]

I’m typically known for discussing topics relevant to personal finance and asset markets, however, for the next few posts I thought that I’d step off the “beaten path”.  Why?  In the process of launching a new business, I have naturally had to expand my network which, consequently, has allowed me to have some very interesting conversations.  Being who I am, it didn’t feel right keeping what I’ve learned from those conversations along with my own thoughts a secret.  My big dream is that someday current and former professional athletes will use their life lessons –including successes and failures–to help a younger generation not only avoid those mistakes, but meaningfully impact “off the field” what their fame, wealth and influence has gained them “on the field”.  But before that can be done, you have to understand that you are a BRAND.  From a former Olympian, to a goliath of the gridiron, to legal representation for famous athletes, I hope you enjoy these seven lessons I’ve prepared from their and my own observations.

How it all started….

Recently, it hit the news that two of the biggest names in global sports continue to diversify their investment portfolios with different ventures.  Kobe Bryant, a recent retiree from the NBA, has launched a venture capital firm to exploit opportunities in the information technology world (see YouTube video here).  LeBron James, still an active NBA player, is executive producing a reality TV series designed to highlight the entrepreneurial ventures of local Cleveland-ites.  I’m sure there are others.  However, what struck me about these two, besides their notoriety, is that they seem to represent what all current and former athletes would like:

  • a smooth transition from the game they once loved to play, and
  • a source of residual income, other than their sports paycheck.

So how does this happen for someone–especially the “new money millionaire” as Phillip Buchanon refers to them in his book New Money:  Staying Rich.  Over the next few entries, I will highlight some of the takeaways from “brand-building” that I’ve observed in my two decades as a financial services professional working with successful individuals from all walks of life.  If successful, I will:

  • convey some key lessons learned from former athletes and industry experts, in order to
  • provide a “blue-print” of brand management to the many thousands of current and future participants that plan to make a living in professional sports.

Here we go…

Lesson #1 – First you must recognize that you are a brand.

This is probably the most crucial and important of lessons.  Not only athletes, but often most individuals retain an “employee” mentality in whatever earns them income.  Most entrepreneurs adopt the owner mentality as they quickly realize like the lion, you only eat what you kill.  No matter your vocation, anyone and everyone who works for compensation can be considered to be in business and building a brand.  What you do is a reflection of you.  If you believe this principle, it gives you a brand to recognize (and protect).  How you interact with people will be a reflection of your brand. One common adaptation of this for famous individuals is product endorsements.   When asked to endorse the brand of a major corporation by marketing a specific product or service, you attach yourself to their reputation–good or bad.  Therefore the real takeaway becomes…what’s in it for you?

 

FLBC 008: The Building Blocks of a Financial Plan – Part 4

Podcast Details:

Podcast Title:  The Building Blocks of a Financial Plan – Part 4
Podcast Series: Financial Literacy Boot Camp

Full Illustrations available on YouTube Version here.

Questions/Issues We’ll Address on this Episode:

  1. Creating the financial plan:
    • Risk Management Portfolio
    • Short Term Investments & Debt Management Plan
    • Long Term Investments & Estate Planning
      • Retirement Funds (e.g. 401k)–3 Rules
        1. contribute consistently
        2. take advantage of the match
        3. pick funds with long track records and low fees
      • Education funding (for kids)
      • Wealth transfer/gifting
      • Estate documents:
        • Will/Living Will/Medical Power of Attorney

Helpful Links:

The Essential Estate Planning Documents

Submit a “Boot Camp Listener” question

Where to Find Us:

Website
Blog
LinkedIn
Facebook
Twitter #FinancialLiteracyBootCamp

Bio:

Dominique is owner of DJH Capital Management, LLC. a full service, comprehensive financial planning firm helping individuals build roadmaps to reach their financial dreams.

© 2016 DJH Capital Management, LLC.

Sound bumps provided by www.bensound.com

FLBC 007: The Building Blocks of a Financial Plan – Part 3

Podcast Details:

Podcast Title:  The Building Blocks of a Financial Plan – Part 3
Podcast Series: Financial Literacy Boot Camp

Full Illustrations available on YouTube Version here.

Questions/Issues We’ll Address on this Episode:

  1. Creating the financial plan:
    • Risk Mgmt Portfolio
    • Short Term Investments & Debt Mgmt Plan
    • Long Term Investments & Estate Planning
  2. Short Term Investments & Debt Mgmt part is made up of:
    • Emergency Funds
    • Debt Management
    • Setting yourself up for being able to fuel your LT Investment Portfolio

Helpful Links:

Guidelines for debt ratios, good vs bad debt
Building an emergency fund

Submit a “Boot Camp Listener” question

Where to Find Us:

Website
Blog
LinkedIn
Facebook
Twitter #FinancialLiteracyBootCamp

Bio:

Dominique is owner of DJH Capital Management, LLC. a full service, comprehensive financial planning firm helping individuals build roadmaps to reach their financial dreams.

© 2016 DJH Capital Management, LLC.

Sound bumps provided by www.bensound.com

The Fallacy of Chasing Market Returns – Part 2

A formula for not chasing after market returns…

So the last post, we began discussing the extreme fallacy in trying to beat the markets.  Although I believe it is truly a fool’s errand, I won’t spend as much time or words ranting and pontificating (so you can thank me later!) in this post.  Today will be spent giving you what you should be doing or at least thinking about.  As always, these are merely suggestions.  Any advice I give you here should be considered in context of your entire financial plan, so be sure you consult with a financial professional prior to implementing anything.

 Leave behind the days of “in and out” of the market. 

One of the more insightful quotes of Sir John Templeton was when he said,

“The best time to invest is when you have money.  This is because history suggests it is not timing which matters, but time”.

Now, who are you and I to question one of the most successful investors of all-time?  Let’s explore his perspective because there is a simple wisdom behind what he says.  Googling Sir John’s history is helpful, because it will uncover that he and his family survived some of the worst times in US economic history.  Despite the struggle his outlook remained positive.  My observation in all my years of helping individuals invest their money is that, rarely is the focus not on the myopic goal of beating the market.  Sir John’s simple wisdom suggests a singular focus,  but on something much more valuable than the money we invest—it is time.  All around us we see the result that time has on nature (probably the most profound of all) and in all aspects of our lives.  And although we all learn the lesson of compounding interest from books like The Richest Man in Babylon or the lesson of discipline and frugality from The Millionaire Next Door those lessons are not applied.  Whereas, if the average investor spent less than he or she made, invested 15-20% of their gross income in low cost funds into a qualified retirement plan, he or she would have accumulated a tremendous amount of capital to live on throughout retirement.  However, more often than not, news and print media panic individuals into buying and selling their investments far too often incurring fees and taxes that erode their investment capital leaving them frustrated and effectively poorer.  My simple suggestion is to let time be your ally.  If you are in your 20s and you are reading this, good for you.  You can literally start a savings discipline that could last the better part of 40 years and the older you will thank the younger you for it, trust me.  For those of us that are older, we can still start with the caveat of less time, but hopefully with enough wisdom not to repeat foolish mistakes of the past.

Diversify not just across asset classes, but goals. 

If I have mentioned it before, it deserves another mention, I consider The Aspirational Investor by Ashvin Chhabra a must-read for the DIY investor.  If you consider yourself smarter than the average bear based on your current portfolio, please do yourself a favor and pick it up. He establishes a good foundation for how investing should be broadened to include our life goals and not just the pursuit of better than market returns.  I think he uncovers something key and it leads to my next suggestion.  Finding more contentment in your life will be the key to increasing your net worth (and thus your wealth).  We all see the struggles that some “wealthy” people have and wonder why their money doesn’t bring more happiness in their life.  This is because wealth does not bring happiness to you unless you are already content.  Contentment has to do with understanding that what you value and what you believe is worth more than just money.  This inevitably leads to finding ways to use your money to promote your values and what you believe in.  This is the “quan”, as it were, that Cuba Gooding, Jr. mentions in the movie Jerry Maguire.  In the movie, although he chases the big contract, Cuba’s character realizes it means nothing without his values and the people he loves around him to enjoy it ( (his “quan”).  This realization hits Tom Cruise’s character also when he realizes that what he values is not the chase of being this hot shot agent, but being there for people.  This becomes his source of true contentment. (Pardon my Rotten Tomatoes review!)  What’s my point?  Understand what you value, then use your money for those things.  This will lead to financial contentment, which will inevitably lead to increasing your net worth.  All of which have nothing to do with beating the market.

FLBC 006: The Building Blocks of a Financial Plan – Part 2

Podcast Details:

Podcast Title:  The Building Blocks of a Financial Plan – Part 2
Podcast Series: Financial Literacy Boot Camp

Full Illustrations available on YouTube Version here.

Questions/Issues We’ll Address on this Episode:

  1. Necessity of life insurance
  2. Rubric for determining when risk should be transferred.
  3. There are other types of insurance such as disability, long-term care, personal liability, medical…
  4. Types of insurance to include in your financial plan:
    • Life, Disability, Medical, Property, umbrella

Helpful Links:

Where to Find Us:

Website: https://www.djh-capital.com
Blog: http://www.djhendersonsr.com
LinkedIn: https://www.linkedin.com/in/dhendersonsr
Facebook: http://wwww.facebook.com/djhcapital
Twitter: @PVGrad98 #FinancialLiteracyBootCamp

Bio:

Dominique is owner of DJH Capital Management, LLC. a full service, comprehensive financial planning firm helping individuals build roadmaps to reach their financial dreams. Dominique regularly contributes to Investopedia’s Advisor Insights where he provides advice to help individuals better understand financial topics.

© 2016 DJH Capital Management, LLC.

Sound bumps provided by www.bensound.com