Tiger Will Get Another Chance, Investors Often Don't

Tiger Will Get A Second Chance, 

Investors Often Don't

                         by: Brendan Magee

It's all over the news. Tiger Woods has a mug shot because he was arrested Monday morning and charged with driving under the influence. No doubt a man who has accomplished as much as Tiger Woods has is experiencing a lot of pain right now in the form of embarrassment, humiliation, and shame. Fortunately, there is nothing that occurred Monday morning that is permanent. Nobody was killed or maimed. Nobody is going to spend the rest of their lives in jail. Tiger will go through the legal process and from a legal stand point that will be that.

Tiger may have a drinking problem or a drug problem of some kind. If that turns out to be the case, it can be dealt with. He is going to get another chance to save his life.

Unlike Tiger though, investors and their American Dreams often times do not get a second chance to rescue themselves from flawed thinking or behavior. Some times one breakdown is all it takes to sink a life time of hard work, aspirations, savings and investing.

Just one momentary slip up where an investor gets seduced and doesn't believe the rules for diversification apply to him anymore or a you get seduced by a t.v. personality who tells you the stock market has changed and the old ways of doing things no longer applies can cost someone a significant portion or maybe even their entire American Dream.

The point is behavior matters. Whether you are getting behind the wheel of a car and driving under the influence or investing your money, your behavior matters and sometimes you do not get a second chance.

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

A Fixed Payout Sets Investors Up For Failure

A Fixed Payout Sets Investors Up For Failure

                                   by: Brendan Magee

Let's start this off with the old adage, "Be careful what you wish for cause you just might get it." This thought came to mind as I was listening to an investment adviser's ad on the radio.

He was promoting life settlements and how it has outperformed just about every investment out there without the volatility of the stock market. Then he went onto say that the product he is offering will also give investors a fixed payout, and that is where the red flag really went up.

On the surface, a fixed or guaranteed payout sounds good. Who wouldn't want to know in advance and have guaranteed what they could count on from their investments? The answer being anyone who doesn't live in the world of inflation.

A fixed payment would be great if prices were going to stay the same forever, but that is not the world we live in. Costs go up every year and to have some breathing room our money has to outpace the rising cost of living.

So using this adviser's product, lets say you retire at 65 and you have a very inexpensive lifestyle. You are getting a fixed payout from this adviser's life settlement product of $30,000 per year and it is enough to get by. Come age 75, if the rate of inflation goes up by just two percent per year, you are going to need $36,569 at that point to be able to afford a lifestyle that was costing you $30,000 at age 65. However with the adviser's life settlement product giving us the same $30,000 per year you have a deficit of $6,569 per year and that is only going to increase as the cost of living continues to rise.

So all you have to look forward to is the cost of living passing you by and having to make due with an income that won't ever change. Your goose was cooked the minute you were seduced into saying yes to a product and and an adviser offering a fixed payout in a rising cost world.

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

Investors-Thank God For Pain

Investors-Thank God For Pain

                             by: Brendan Magee

Most of us spend the majority of our lives trying to avoid pain. There is a multi-billion dollar industry of people offering all kinds of remedies to fix our many pains. But, have you ever considered where you would be if you could not experience pain?

I took someone to the doctors the other day because their feet were experiencing swelling, becoming red, and becoming more and more numb. His feet were so bad that he had sores on the bottom of his feet. These were sores that most people would not be able to stand and walk with, but he couldn't feel them due to the numbness in his feet. Simple cuts that could be remedied with a band aid had now become infections, infections that were threatening his bones and could ultimately lead to amputations. From the man's perspective the sores and their severity never entered his mind because he couldn't feel the pain. Without the pain, there was no need to go to the doctors.

Finally, when he did go to the doctors, there was pain. The pain came when his doctor told him about the possible amputations due to the infections. It didn't take long to convince the man that he needed surgery so the doctor could operate on his legs to try and get the circulation flowing back to his legs. The physical pain couldn't be felt but the psychological pain, thank God, was felt. When was the last time anyone considered the ability to feel pain a blessing?

Investors, might also reconsider their ability to feel pain a blessing as well. Imagine if you couldn't become frustrated, scared, confused, anxious, nervous, excited, etc.? Imagine if you went through life totally numb? That's not the best way to go.

Not until the pain has gotten bad enough do people make changes. Without it, people could stay in bad portfolios or stick with ill-serving financial advisors forever.

So the next time you are in pain, take the steps to alleviate your pain. Then thank God for the ability to experience pain. Without it, things would never change.

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

Airlines, Passengers, Investing,
Behavior Matters
by: Brendan Magee

United Airlines, American Airlines, passengers being dragged off of flights, and flight crews looking like bouncers in a bar fight is all over the news these days.Traveling by air is looking more and more like W.W.E. Wrestling, and I am starting to rethink the flight I booked in June.

In the aftermath, you have chief executives holding press conferences defending their airlines policies for removing passengers off of flights. You also have passengers defending their own policies where they have purchased the ticket on the plane and have the right to the seat they paid for. Then we have lawyers cashing in on the situation. 

I am going to make the case that all the drama and millions of dollars in lawsuits could have been avoided with better behavior on behalf the airline and the passengers. If the airline knew in advance the flight was overbooked they could have made the announcement and given out the vouchers for a passenger to give up their seat long before everyone was in their seats. Once in the the seat the passenger just wants to get where they are going. They may also be dealing with a little anxiety or fear about flying. The airline's behavior in the future could be more considerate of their customer. 

The passenger also doesn't need to treat the flight attendant with rage and hostility. I can't imagine the flight attendant wants to be in the position where they are asking/demanding passengers get off the plane. Screaming at the flight attendant or becoming physical isn't going to defuse the situation. Behavior that is more considerate of the other person would go a long way to helping.

For a smoother ride, investors also need to be more focused on their behavior. I recently had a conversation with a prospective client and we were discussing the rules of successful investing. As far as diversification was concerned, he didn't believe in it. He said the only place to make money in the market was by owning small cap stocks. 

I tried to point out to him that yes in recent memory small cap stocks had had some good returns, but there were some years where small cap stocks had lost 38% and that there was even a period in time where small cap stocks had lost over 50%. I tried to point out to him that if his portfolio took a 50% drop he would need a 100% return just to get back to even. The gentleman disagreed and said that he was going to keep his money in small cap stocks. 

Now I am no fortune teller and I cannot see into the future, but I think it is pretty reasonable to think that at some point every kind of stock out there will experience a pretty dramatic downturn. The year 2008 isn't that long ago to forget that. 

Not that I am wishing this on the man, but I imagine if he continues to defy the laws of investing and he ignores the benefits of investing, this man's portfolio will take a pretty big hit at some point. At that point I imagine he will believe that he has a portfolio or investing problem. 

The reality is that he does not have an investing problem, he has a behavior problem that has had a negative impact on his investments. At that point if all he does is move his money to different investments and he doesn't take the time to uncover and own his flawed behavior, the problem will persist. Until he gets that, the problem is him, much needed transformation will not begin to take place. 

Bottom line is whether it's airlines, health, or investing, behavior matters.

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

Investors; It's Not The Goal, It's The Behavior

 It's Not The Goal, It's The Behavior

by: Brendan Magee

The other day I was listening to an investing commercial on the radio and the man spoke about what they would do for investors. They said if you came into their office you would have a conversation about your goals and then they would help you create a plan to help you reach your financial goals. They stressed the importance of an investor focusing on their goals. 

Goals, no doubt, have their place, but if all you do is focus on your goals, you aren't going to accomplish a thing. The focus needs to be on the behavior. Whether it's dieting and becoming physically fit or investing, the behavior is going to determine what you achieve. Simply getting on a scale for the next 30 days with a goal of losing five pounds isn't going to magically make it so. You better start eating some vegetables and stay away from the ice cream and cookies.

Investing is the same way. Simply looking at your account balance isn't going to make me a millionaire. I better start saving. I better cut down on eating out and running up the credit cards. I better take the time to understand what are the rules for successful investing and start applying them. 

I should probably determine if I am capable or incapable of following those rules on my own. If not, I should employ a coach who will make sure my behavior is consistent with reaching my goals, even when I don't want to. 

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

March Madness Blown Calls & Investing, Some Times Once Is All It Takes

Reffing And Investing, 

Some Times Once Is All It Takes

        by: Brendan Magee

With the NCAA Basketball Tournament and the fact that with one loss you go home, everything is at a fever pitch. As it was during the Northwestern/Gonzaga game one blown call changes everything, for the players as well as the referees.

As a ref of 15 years, I can tell you that you can be reffing and everything can be going along just fine and in the blink of an eye you can blow a call. Yes, it happens and I am not saying anything you don't already know. 

However, what you don't know is what happens to the ref who blew the call. He or she has supervisors they have to answer to. They will be asked why they made the call they did, or why they didn't make the call that should have been made. Their reputations and the games they will get in the future will depend on the answers they give.Future games and the thousands of dollars in paychecks can be taken away from them. It takes a long time to get to the level of a college official and in a second all that you have worked for can be lost and never be gotten back.

It can be that way with investing. How many people do you know lost a ton of money in the tech stock crash in the early 2000's or the housing bubble of 2008? It's sad and seems quite unfair, that like the hard working ref, that all that you have been working for your whole life can be lost in a flash and never gotten back. 

As it is with reffing (even with three refs), investors have blind spots, and the biggest most devastating problems will come from what you cannot see or account for. Now, the truly scary part here is that we always have blind spots. At no point in your driving life are you driving where you can see everything. It is the same thing with investing. How come you have blind spots? The answer is because you are human. The Creator only gave us eyes in the front of our heads, not the backs. 

So as investors how is it that we have blind spots? We have eyes, ears, brains. What's the problem? We are not infallible as to how we take in information. How many times has your wife or kids told you, you don't listen? Lets give ourselves some credit and say we listen at least 50% of the time. That leaves a good percentage of the time that we are not tuned in to what people are saying to us. Sound like a recipe for an argument? This is just one example of when we aren't totally tuned in to what is happening around us.

 This is why you have a coach and what you pay them to prevent. Because, unfortunately there are somethings in life where it only takes one time to make a permanent change to your life. 

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

Funds, That Are Driven By Research, So What?

NCAA Pools & Mutual Funds Driven By Research, So What?

                   by: Brendan Magee

With March Madness upon us once again, I find myself parked in front of the television a lot more which means I am seeing a lot more investment commercials too.

One in particular caught my eye. There was a former college basketball player serving as this mutual fund company's spokesman and he was saying that this company's big selling point was that the company's funds were,  "Driven by research!"

On the surface that sounds pretty good. Who wants to put money into a fund driven by blind pure random luck? Where's the wisdom in that? Unfortunately, that is actually what the investors in this fund are actually doing. 

See what the fund company fails to convey in this commercial is that all the research in the world will not have anything to do with how that fund performs in the future. In Free Market investing, all the knowable and predictable information that exists about the market or individual stocks has already been factored into the market and the prices of the stocks. As information changes and becomes available that new information gets absorbed into the price almost instantaneously. Think about how quickly we get news about events happening around the world these days. It is only unknowable and unpredictable information and events that will move the market or stock prices.

Another way of saying that is that it is what happens tomorrow, next week, next year, the next ten, 20,30 years that is going to determine how a mutual fund is going to perform. Do all the research you want. That information is already factored into the market. Trying to use that information to figure our how the fund will perform in the future is pure speculation and gambling. It's like using the season that just finished up and all the information that goes with it to predict who will win the NCAA Basketball Championship. Think about it, how many of those office pools have you actually won?

Gambling with a few bucks on an office pool might be fun with a few entertainment dollars, but not with the money you are going to need in retirement.

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