Broker Check

The Interview

December 01, 2017
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Recently, I interviewed myself:
(Jim the Interviewer):  Hey Jim!  You look great today!
(Jim the Financial Planner):  Thanks, Jim! So do you!
(Jim the Interviewer)  I'd like to ask you some questions.  The first is: What is the most important thing a person can do to make himself or herself financially secure?
(Jim the Financial Planner) Answer:   First of all, let me say this: Investing involves risk including the potential loss of principal!  How much risk to take in your investments depends on your individual situation.  People always overestimate their tolerance for risk in good times, so your investment risk should be based on your personal goals and not whatever the market is doing.
Q:  What is the biggest mistake you see people make in their finances?
A:  They let money drive life decisions. Instead, you should make decisions about life and then use money to live your life.  When you take a trip, you focus not on the vehicle but instead on the destination. 
Q:  Can I be my own financial planner?  Why do I need someone like you?
A:  You can absolutely do this on your own.  Likewise, you can also do your own plumbing, perform your own car repair, and devise your own fitness plan.  Some people want experts to help them and they use financial planners like me to get it done.
Q:  How do I get rich by investing?
A:  You don't.  You get rich by inventing something, selling a lot of something, or by being the best at something.  Investing is what you do with the money you made doing something else.
Q:  Is debt bad?
A:  Debt is a tool.  A hammer isn't bad or good; it's just a thing you use to drive in a nail.  You can drive in a nail with a rock, but that's not the best thing to use.  You can use a hammer to dig a hole; again, not ideal.  Debt is good for some things and terrible for others.  I help people understand how to use it properly.
Q:  How and why did you get into this profession?
A:  My entire career has been about talking to people about complicated money issues in a way that's clear and straightforward.  I was a banker for 13 years and have been doing this for 16. Making money work sensibly for clients (and myself!) has been my passion. 
Q:  How do I know you're not another Bernie Madoff?
A:  I earn the trust of my clients over time.  Some people aren't trustworthy, and it is incumbent upon all of us to make sure we are vigilant.  That's true for your accountant, your contractor, your grocery store and your financial planner.
Q:  Why don't you talk about investment returns more frequently?
A:  I do talk about returns, but discussions about returns sometimes get in the way of good planning.  None of us has unlimited time and none of us have unlimited tolerance for risk to get the best returns.  We need to balance the need for money and security today with the need for growth tomorrow.  Looking in the rear-view mirror all the time doesn't adequately prepare you for what's in the road ahead.
(Jim the Interviewer):  Thanks, Jim.  As always, you've been charming and very helpful.  I hope we can do this again sometime.
(Jim the Financial Planner):  You're welcome.  I thought you asked great questions.