… and it’s not all your advisor’s responsibility. How effectively your money is saved and managed is up to you. Your advisor manages your wealth — and while the two may be connected, they are not one and the same.
What I’m talking about is being personally investedin your own financial well-being.
There was a long article recently in the Sunday New York Times, about a wealth manager whose clients are some of the best-paid athletes in the U.S. One sentence leapt out at me: “To retain his services, each player must agree to put aside at least 60 percent of every dollar he earns, with the rate climbing to 80 percent if he’s fortunate enough to land a long-term deal.” And, I should tell you he’s fired two clients for ignoring the policy.
To be very clear, I’ve not spoken to this guy or any of his clients. But my take on it is this: he wants clients who are as serious about their financial future as he is, who will partner with him to ensure their long-term financial success. Which is exactly the point I’m making.
Maybe you’ll think what I’m about to say is too simplistic but trust me it’s not. Regardless of how much money you have, you need a plan — you need to have a “savings behaviour” – which is the idea behind the best-selling book, “The Millionaire Next Door.”
In it, the authors — Thomas Stanley and William Danko, professors who have devoted their careers to studying the habits of self-made millionaires — share what they’ve learned over the years about what most of these millionaires have in common:
- Millionaires live below their means
- They avoid buying status objects, living in status neighborhoods or leading status lifestyles
- They figure out how they can reduce their spending so they can invest more
And even without knowing them, I am pretty confident that they regularly set goals, that they’re focused and disciplined, that they have very good financial habits and it’s not by accident, luck or inheritance that they’re wealthy. They have a savings behaviour.
What does that tell you? It tells me that it’s a behaviour worth embracing.
Alan Friedman is an Investment Advisor with CIBC Wood Gundy in Toronto. The viewsof AlanFriedman do not necessarily reflect those of CIBC World Markets Inc. CIBC Wood Gundy is adivision of CIBC World Markets Inc. a subsidiary of CIBC and a Member of the CanadianInvestor Protection Fund and Investment Industry Regulatory Organization of Canada. If you arecurrently a CIBC Wood Gundy client, please contact your Investment Advisor.