Are You Killing The Messenger?

Investors Choice:

 Kill The Messenger or Grow From The Coaching

                                                                                                by: Brendan Magee

The end of the year, for some, is a time to self assess. Am I still in shape, or do I need to get serious about my workouts? How are my finances? Are my money and investments where they really need to be? From an ego standpoint, it's safe and comfortable to do a self assessment. However, we do not usually get as much value out of a self assessment as we do in letting an outsider tell us what our blind spots are. There's a lot more of our ego involved in opening ourselves up to that sort of critique. However, it's in seeing our blind spots and dealing with them that breakthroughs occur and isn't that what we are looking for when doing our self assessments?

No one likes to have anyone to point out their warts. I know my initial reaction to someone pointing out one of my faults isn't to embrace them. My first reaction is usually to deny the shortcoming exists. Then only in my head, I'll say things like "That guy is crazy or off his/her rocker!" Then, I will look for some flaw in their logic that completely invalidates the perceived criticism. Bear in mind this is all in hindsight. In the heat of what I think is  putting me down, I am enraged, ticked off and looking to get even. Scorpios have no other choice. 

Earlier this year, a gentleman and his wife came into my office and were looking for some answers to questions they had about their 401k plan. The wife was in the finance/investing profession  so the gentleman and her felt very confident that they could make good decisions if they just got some answers to a few questions. Seems innocent enough, right? That's what I thought.

The meeting starts off with them listing all the questions they had on their minds. What company is our money with? Should we keep investing this way? There were a few questions that were important to be asking as well, but hadn't been asked, so to be sure they were not basing any decisions on assumptions, I started, after getting their permission to do so. Amongst my questions were: Could they measure the risk of one portfolio vs another? Could they come up with a mathematical measurement of how diversified their current portfolio was? Could they account for what they were being charged to have their investments managed?

With each answer came a sort of kind of a yes. There was never a 100% positive "yes" I know how to do that. So my concern, which I expressed, was that we wanted to make certain any decisions were made at least covering the basic necessities of prudent investing:, risk, costs, and diversification.

It's sort of like asking a 16 year old "Do you know how to drive?" They either do or they don't. There is only one answer that has you allowing your teenage daughter get in the car with him for a date. Anything less is a huge red flag.

So before any decisions were made about what to do with their 401k plan, I suggested that we first work together to make sure these critical questions get answered and we booked a time to get back together where we could compare one of their other 401k plans against their current 401k plan. They both agree that would be a good way to proceed, but unfortunately, that appointment gets cancelled by this couple and never get rescheduled.

I come to find out almost six months after the fact that the woman left my office and exasperatedly asked her husband, "Does he think I am stupid!"

The, unintended,  result of being asked a few questions, but not being able to answer them was not only her ego getting bruised. The upset was a big part in this couple dumping an investment portfolio that over the past 16 years had performed in the 98 percentile. Only two percent of investors have performed better than they did. What's worse is, they really don't have a good grasp of what went into into producing such glowing results so they have very little chance of reproducing them in the future. More importantly, they have no desire to  Why? Perhaps the idea of being in the position where admitting they really needed some coaching was a little too personal. Maybe the path of least resistance is to get rid of the person who appears to attacking their self worth, rather than helping them achieve a breakthrough.. It's certainly a lot quicker then getting the answers to questions you can't completely answer and experiencing a breakthrough.


Brendan Magee is the founder and president of Inevitable Wealth Coaching. With questions or comments call 610-446-4322 or e-mail brendan@coachgee.com.