“Tough times” can occur any time.  Sometimes, such as like today, tough times occur for a very large number of people.  Yet, this is part of the normal cycle of the economy and is something that occurs once every 7 to 10 years. 

At other times a specific industry will be impacted by changes in currencies, changes in trade tarrifs and / or a change in demographics.  We have seen the auto industry be impacted by sudden and substantial changes to consumer buying patterns.  In the past we have seen sectors such as the wine industry be threatened by free trade and global competition. In other circumstances we know that “tough times” can occur due to an unexpected layoff, illness, correction in the stock market or declines in housing values.

With this in mind, it is important to ask yourself:

• What can I do to prepare for these inevitible scenarios?
• What decisions can I make to ensure I am protected from the impact of these various cycles?
• What decisions can I make to make sure I don’t over extend myself?
• What boundaries should I set to make sure I don’t get caught off guard unexpectedly?
• What decisions can I make to increase the probability of my long term success?
• How much time should I spend each year reviewing and planning?

We all recognize that it is impossible and impractical to try to eliminate risk entirely in one’s life.  We know that a risk free return is a rate of return far below what is necessary to achieve your longer term goals.  Yet, the objective is to “contain” risk within certain boundaries so that when bad situations do arise your overall plan for wealth is not put off track. Therefore, the process begins with the decision of how you view your life.  Are you just “doing” life or are you continually striving to “master your life”?

Mastery, of course, can be an elusive goal, yet a goal that is always worth striving toward. To achieve Mastery one has to be fully engaged in their own goals and their own journey.  This means that some of the work required to achieve Mastery must be done by you.

In our “service oriented culture” today most of us are so engulfed in providing a high service to others that we begin to rely significantly on others in virtually all other aspects of our life.  As the service culture has evolved over the past many years, we have begun to realize that this culture can be very expensive to maintain, and to some degree, it is a house of cards. For example:  have you become increasingly “specialized” in your area of expertise?  This specialization has, without a doubt, helped contribute to your growth in income, but this is the same outcome for virtually all specialists.  So what have you accomplished?  A higher income with much higher expenses?  Have you become highly, highly dependent on others in most other areas of your life? If one or more of those areas lets you down, how does that impact your overall goals as well as your interest in working harder?  In most cases the let down is significant and it reduces your desire to work harder.

Today we are seeing a revolution of sorts.  In many instances today people are taking the opinion of those in authority, such as doctors, accountants and lawyers, in a more balanced manner.  In the past you may have taken the advice at face value.  Today, with the power of the internet and other networks of communication, people are able to gain access to information in a wide variety of areas with ease.  This does not suddenly make you an expert in these areas.  It does, however, empower you to ask better questions and to pursue a wider range of ideas that may not have been considered by the advice giver.  We are also seeing this occur in the "home renovations" business with the growth of Rona and the Home Depot (You Can Do It, We Can Help).

This same phenomena is occurring in the financial services industry today.  To a large degree the financial services industry has “bundled together” financial planning advice and portfolio management into one overall annual fee.  The fee is collected through the management of the investment portfolio and the consumer never sees it, which means it has the perception of not being there.  While this is a simple and, for many, a very desireable approach, it can also be a very expensive and costly approach for several reasons:

• You may not be receiving full value for the fees you are paying year in and year out.
• As your portfolio rises in value the fees you pay, as a percent of the value of the portfolio, often remain the same.  Yet, even though the “percent” stays the same, the actual dollar amounts paid begin to increase substantially.  At what point should these fees be capped?  To what degree are those with “larger investment accounts” subsidizing those with “smaller investment accounts”?

 

So the road to Mastery is one that contains three important components:

• You need to be engaged in the process as you are the only one who really knows what is right for you.
• Keeping control of your “costs” (whatever they may be in your life) is an important way to increase the gap between what you earn and what you pay out to others.
• Taking the time to plan ahead, compare alternatives and prepare for different possible outcomes is critical to ensure you minimize your exposure to future surprises.

 

Over the past many years we have been building an exciting and powerful library of resources and software tools that are designed to empower you with important information and insights so that, over time, you begin to acquire the skill to successfully navigate your way through life. We are hear to help you ask the tough questions, to help you evaluate your current situation, to inspire you to have an exciting vision of the future and to help you implement specific and efficient solutions.

The Road to Mastery is not a difficult road to travel.  It is simply a choice. If this is the road that you are looking to travel, or if you have specific questions in certain areas that are important you today, then send me a note and I’ll help get you started on your own personal road to mastery.