Without Your True Purpose Behind It, Investing Is One Great Big P.IT.A.

Without Your True Purpose Behind It, 

Investing Is One Great Big P.I.T.A.

           by: Brendan Magee

When I first got into the investing business some 20 years ago, it was a very exciting time. I felt like wealth and affluence were within reach. All the senior advisers I worked with drove luxury cars, played lots of golf, and lived in beautiful homes. Their clients all seemed to be in the same boat. They were people who knew something and were given a ton of respect, and what they appeared to have I wanted and was willing to work for.


After about five years of working 60 hour weeks, making 400 cold calls a week, and even built up a few loyal clients, I noticed something both funny and sad, I wasn't happy. The more I worked, the more I earned, the more assets I placed on my client's balance sheets the excitement and happiness seemed harder and harder to find. I couldn't figure out what I was doing wrong. The hard work I was putting in became more like work, work that didn't seem worth it.

Similiarly, I met with a very nice man yesterday to talk about his investments. From the size of his portfolio, you would have every reason to think that he is happy and successful. However, when we looked at his investments there were some very big red flags. There wasn't any real diversification in his portfolio. Almost 50% of his entire portfolio sat in U.S. Large Company Stocks. In his early 60's and with retirement in sight, half of what he owns sits in an investment that in the past decade went down some 40 percent twice. In addition to his lack of diversification, he was paying his mutual fund company about 35 to 40 percent more in fees than he was aware of.

The biggest red flag was when I asked him if when it came to building his portfolio whether or not he knew exactly what he or his broker was doing with his money he said "No." So the choice he had at this point was to either, engage in a process to better educate himself about how to do a better job of investing his money or leave things as they are. He chose to leave things as they are. It's his choice and I respect it.

As we were winding down our meeting, he told me that he clearly saw the flaws in how he was investing his money. He saw the unnecessary risks and expenses. He also acknowledge the danger in not being able to better validate whether or not his money was being managed properly. What held him back he said was the thought of pouring over the charts, spreadsheets, and information that that would take. He would rather not spend his time that way. As I had found out as a financial planner, investing without a purpose is a very boring and unrewarding task, and it stays that way until you have established your true purpose for your money.

So what do I mean by purpose? A lot of people if I asked them their true purpose for money would answer and give me a list of their goals. Retire by age 60. Move to the beach house. Accumulate $5,000,000, etc. When those things are realized then they expect to be happy and fulfilled. Imagine that? With this criteria, a person is putting off experiencing happiness and fulfillment until they attain these goals which in some cases will take 30 to 40 years to achieve. For the better part of 30 to 40 years they will be in chase mode. Can you say boring?

 A purpose is not a goal. It is an emotion that gets expressed or experienced from the way in which a person uses their resources. Your resources include time, effort, energy, money, passion. Among the most powerful emotions are love, generosity, freedom, accomplishment, happiness, joy. Think about it. Do you want the money or the emotion that you feel in even trying to accomplish your goals? When you go on vacation, are you thinking about the money or the joy at being with your family on that wonderful beach? When you participate in your 401k plan, do you want the money or do you want the freedom that comes with one day knowing you will be able to walk out the door to your office never having to worry about running out of money and can do basically what ever it is you want to do?

Here is the great thing, your true purpose is what ever you want it to be. You get to say what it is. We all value different things, but we know when we have discovered it. We are filled with passion and we can never get enough of it. Can you ever have enough love in your life or too much joy?

The problem is that we have things a little backwards. Most people believe the love and joy will come once we have accomplished our goals. It's the exact opposite. First, the purpose has to be established. Why am I doing this again? This question has to be answered first and if it is not big enough, if it does not light you up with passion you haven't got it. The power of your passion will not go into full effect until it has been established by you, and without a purpose the pursuit of a goal will soon become a job, and jobs are work not pursuit of a passion. This is true whether it be a chosen profession or investing.

Now there is one other amazing thing about discovering your true passion. Once you have defined what it is you want to experience most in life, your brain will automatically seek out activities where you will experience your true purpose on a daily basis. You won't be able to stop yourself. You won't have to wait to experience love, joy, generosity, etc. until some point in the future. You will begin to experience these wonderful values and emotions now. I speak from experience on this.

Once I discovered my true purpose for money, love and generosity, I inherintley set up my life to experience these values. Because I knew financial planning didn't give me a feeling of love and generosity, I changed my practice to Investor Coaching. The breakthroughs I had experienced with investing as a result of coaching, I wanted to share with others. Funny how, once my profession became a lot more enjoyable, I became a lot more profitable. 

I volunteered more. I started going to mass on a daily basis. I became a Eucharistic Minister. I was a reader at church. I got married and had children. I volunteer on a monthly basis at a local hospital. All of these things are areas of my life where I experience love and generosity. Not only do I give it, I receive it in return. Why would I want to deprive myself or anyone else of these wonderful emotions?

Without having first established my true purpose, all the activities mentioned above are simply eating into the time I have to spend on me. I would simply put them off on someone else, make excuses as to why I didn't show up and put in the effort, or just put them into an "I'll get to them some day," category." I can't, nor, would I choose to do that given they are an expression of what I value most in my life.

So the lesson here is, before you expect to get any of what you are looking to get out of your life, investments, occupation, family life, marriage, social life, etc., you must first define the true purpose for your life, which includes your money. You will be amazed at how quickly your brain figures out how to experience what is most important and pleasing to you. You won't have to wait. You will experience it now and every day for the rest of your life. The work around acquiring love, generosity, joy, freedom, etc. will no longer be work. It will be a passion you can't get enough of.

Without it, be it work, investing, life, what ever, it will become work, and eventually become one great big pain in the _ _ _.

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