About Financial Planner Secrets

Video Transcript

"Financial planner secrets. I tell people turn off the television. That will do a world of good because television is driven by Madison Avenue and they're putting stuff out to you that is probably in most cases not good for you. If I listen to CNBC then I'm going to become a big fan of the stock market and mutual funds and things like that and that hasn't proven to be a very positive thing for the average person over time, even long term. If you look at the occupations what you find out is that the majority of people that have the highest net worth at the end of the day compared to their pre-retirement income are people who are schoolteachers. Schoolteachers, why is that? Well because schoolteachers are very conservative people and they tend to invest in nice, safe, guaranteed things that make 5 or 6% maybe and don't go out and try to get rich, OK? And so that's one of the things I try to embed in people. The biggest secret is spend less than what you make. That in itself is a big deal. The American public are now for the very first time in 2009 starting to actually save, we have a nets of fractional savings factor in this country. The Japanese save 20% of their income, we were saving a -3% of our income up until this past meltdown. And so it's an attitudinal thing that drives the behavior. Of course you got to manage debt and debt is not bad, just like cars and guns aren't bad. You're irresponsible use of cars, guns and debt is bad. Fortunes have been made leveraging other people's money. That's what banks are for. You start a business in this country, 98% of the people of the businesses in this country have 500 or fewer employees, OK? And if you think debt's not important to have available, just see what's gone on with our economy with these small companies can't get the debt that they need to finance their ongoing business concerns. And so should you run your household like a business? I'd recommend it. Keep it in the black, spend less than what you make, intelligent use of debt. Those are the secrets and of course the biggest secret is liquidity. What's your liquidity quotient? When is the last time anybody asked you what your liquidity quotient was? People don't even know what that means. Well how much of my net worth is accessible to me that I can hold in my hand or that I can liquefy without crashing my 401k or having to sell one of my rental properties and things like that. Those aren't liquid assets, they're illiquid and so ask Countrywide if liquidity is important. That's another secret. And probably at the end of the day, the biggest thing that people need to understand is that financial planning is not an event, it's a process because you can't get through all of this stuff, all these 6 steps all at one time and so you need to have an ongoing relationship with somebody that gives a care, OK? And that can obviously give you advice about the things that you do with your money. And please help me save myself from myself, right? So it's a little bit of contrition, a little bit of humbleness if we want to call it that, that's a secret, that's a secret because the confused mind says no, but the jazzed up mind says no, right? What's the 11th commandment? Thou shall not take thyself too seriously. Don't get too jazzed up about things, listen to what somebody else tells you that you feel like is on your side."