Enjoy the current installment of “weekend reading for financial planners” – this week’s edition kicks off with a beautiful write-up of the winners of the Invest In Others foundation awards, which recognizes financial advisors who have not only been successful in their advisory firms but also in giving back to their communities in various charitable and non-profit endeavors… an inspiration to any/all advisors that the helping profession of financial planning can extend beyond just the work we do directly with clients (and in fact, many financial advisors’ community giving efforts extend far beyond the financial services industry altogether).
From there, we have several articles around spending and savings advice, from a study that shows the popular “spend money on experiences, not goods” happiness research may only apply for those with above-average socioeconomic status (and that for the rest, there really is happiness to be derived from spending on good, solid, useful material goods), to another study that finds our tendencies with money towards being either a “tightwad” or a “spendthrift” may be evident as early as age 5 (when, in theory, new/healthier habits can still be learned), a discussion of how some of the most successful wealth creators ostensibly begin the process as a means to provide for their families (during life and as an inheritance after death) but then never stop to re-assess their motives once their wealth compounds beyond a “prudent” inheritance, and an interesting look at some of the most “undervalued” financial advice (which is less about spending tips like being frugal and cutting back on lattes, and more about getting off the hedonic treadmill and simply learning better gratitude for what we already have).
We also have a number of practice management articles this week, including: the “wobble” theory of growing an advisory firm (that advisory firms grow in stages, and the key to success is not navigating each phase, but the transition moments when the firm begins to “wobble” and has to evolve to the next stage); how despite the “uncertainty” about smaller advisory firms in today’s environment, a look at the established professions of law and accounting suggests that small firms will survive and thrive far longer than commonly believed; a study on the benefits of outsourcing back-office tasks to more easily scale an advisory firm; and the rise of “virtual” advisory firms that leverage technology (especially screen-sharing and video conferencing tools) to build a location-independent advisory firm.
We wrap up with three interesting articles, all around the theme of leveraging the benefits of compounding (not just in a portfolio, but in your personal/business life as well): the first explores how long-term compounding takes a strong base, but once the foundation is laid, it’s mostly a function of compounding (as evidenced by the fact that $80.7B of Warren Buffett’s $81B net worth came after he was 50 years old!); the second raises the simple question of considering what, exactly, you’re doing (even in a tiny way) to contribute to the compounding growth of an asset every day; and the last provides a powerful reminder that while we tend to celebrate the business leaders who are “consistently heroic” in taking big bold leaps to move their firms forward, for most the key to success is being “heroically consistent” instead, making small efforts every day and week and simply allowing time to compounding them in your favor!
Enjoy the “light” reading!