Veterans Day

“Without heroes we are all plain people, and we do not know how far we can go.”…Bernard Malamud

Today is Veterans Day. Veterans Day began as Armistice Day, and commemorates the armistice signed between the Allies of World War I and Germany for the cessation of hostilities on the Western Front…which took effect on “the eleventh hour of the eleventh day of the eleventh month” of 1918. The First World War was known as “the War to End All Wars” because it was the bloodiest war in history up to that point. After 4 years of horrific trench fighting, 9 million soldiers had died, and 21 million had been wounded.

In many parts of the world, a two-minute moment of silence is observed at 11:00 AM as a sign of respect and remembrance for the 20 million people who died in World War I.

Following World War II and the Korean War, at the urging of the American veterans' service organizations, the 83rd Congress struck out the word “Armistice” and inserted “Veterans.” President Dwight D. Eisenhower issued the first Veterans Day Proclamation on October 8th, 1954.

The Department of Veterans Affairs estimates that there are 22,795,000 veterans living today. Vietnam Vets account for the largest proportion at 7,569,000. About 2 million World War II veterans remain, although their numbers are dwindling…with approximately 1000 dying each day.

Frank Buckles, at 109, is the last surviving American veteran of World War I. Born on a farm in Missouri in February 1901, he saw his first automobile in 1905, and his first airplane at the Illinois State Fair in 1907. Buckles enlisted in the Army in 1917 at the age of 16, lying about his age. He was sent to England and spent much of the war as a driver, delivering dispatches and driving the occasional ambulance. After the armistice, Buckles escorted 650 German P.O.W.’s back to Germany. Seeing his young age, the prisoners “adopted” him, taught him German and gave him food from their Red Cross packages. When Buckles visited Germany in the 1930's, while working for a steamship company, it was difficult for him to reconcile his fond memories of the German P.O.W.'s with what he saw of life under the Third Reich.

In 1941, Buckles was running the Manila office of the American President Lines. Taken prisoner when the Japanese invaded the Philippines, he spent 39 months in prison camps. Although he developed beriberi caused by malnutrition, and his weight slipped dangerously below 100 lbs., Buckles led his fellow prisoners in a daily calisthenics class.

Today, Frank Buckles lives near Charles Town, West Virginia where he purchased a 330-acre farm in 1953. When Buckles passes away, he will be buried in Arlington National Cemetery, having received special approval from the White House in 2008 (with prompting and special intervention from H. Ross Perot). When asked about the secret to his long life, Buckles said, “When you start to die…don’t.”

In Memory of USMC Lance Cpl. John J. Mann Jr. (1985-2010)

by Chris Holman

(I Can't Get No) Creativity

In a recent interview with Terry Gross, Keith Richards described how he composed the riff to “(I Can’t Get No) Satisfaction”.

It was May 7, 1965 and the Stones were on their third U.S. tour. Awakening in the middle of the night in a motel room in Clearwater, Florida, a fuzzy-headed Keith Richards grabbed his tape recorder and guitar (which he always slept with) and recorded the opening hook to “Satisfaction”. The next morning when he replayed the tape and he heard a drowsy 30-second rendition of “Satisfaction”…followed by a ‘CLANG’…and 45 minutes of snoring. Three days later, the Stones took the song to the legendary Chess studios in Chicago and recorded the first version of their iconic song. Issued in the U.S. in June of 1965, “Satisfaction” stayed at the top of the charts for 4 weeks, and established the Rolling Stones as a worldwide premier act. Rolling Stone (the magazine) has selected “(I Can’t Get No) Satisfaction” as the #2 greatest rock-and-roll song of all time.

In a way, this story is the more modern-day version of the Mozart Myth. The Mozart Myth goes something like this. Some people are born with creativity and talent so prodigious that it spills from their minds, as if by magic. Mozart is reputed to have composed his symphonies in one sitting, without revision, through a single burst of inspiration.

In a contra-example to the Mozart Myth, Beethoven exhibited a creative process that required extraordinary amounts of preparation and persistence. He would fill notebook-after-notebook with scribbling, musical dead-ends, and futile variations. For Beethoven, his stumbling trial-and-error method was his creative genius.

In the end, was his process any less creative than Mozart’s?

Either way, there is growing evidence in this country that our creativity as a nation is declining. Newsweek documented this in an article in their July 10, 2010 issue, “The Creativity Crisis.”

Corroborating this disturbing trend is Kyung Hee Kim, a professor of educational psychology at the College of William & Mary. Over the past number of years, she has tested 300,000 adults and children with the Torrance Test of Creative Thinking, one of the better creativity tests. Since 1990, there has been alarming erosion in a number of creative characteristics, including:

• the ability to produce a number of ideas,
• reflective thinking,
• motivation to be creative,
• intellectual curiosity and open-mindedness.
  

According to Professor Kim, the possible explanations are numerous. One may point a finger at the excessive time our children tend to spend in front of televisions and computers, watching programs, and playing videogames, rather than engaging in creative activities such as playing outside or exploring the outside world. Another ready explanation for decreasing creativity among upper-grade elementary school children is the lack of creativity development and the stifling of children’s creative opportunities in classrooms.

For parents, Professor Kim proposes a number of ideas that, in her view, would boost and preserve creativity, including:

• Focus on ideas,
• Raise non –conformists,
• Be playful,
• Be less protective,
• Foster independence,
• Give time alone,
• Travel.
  

In the words of Albert Einstein, “Imagination is more important than knowledge.”

by Chris Holman

"All the News That's Fit to Print"

Our normal publishing schedule is once per week. However, every now and then something comes up that causes us to depart from this schedule.

In today’s New York Times, October 21st, there is a special section on Wealth. For those of you who are financial advisors, and who don’t read the Times on a regular basis…you may want to pick up a copy of today’s paper.

In the Wealth section, there are a number of articles of interest to “affluent” readers. The lead article is especially interesting, “The Post-Crash Sell.” In this piece, the author opines that wealth managers are recasting their services in an effort to confront the wariness that exists amongst circumspect investors these days.

Whether or not you agree with the author’s view, you may want to use this article to connect with your clients about the level and quality of client engagement that you are providing…and that they are expecting. Additionally, there are a number of other articles, “A Philanthropy Coach Talks About Wise Giving,” “The Watchword on Taxes This Year is Flexibility,” and “Treading Carefully in the Currency Bazaar” that might be interesting to clip-and-send to your interested clients.

Just an idea for you…hope this helps.

PS…The Times’ motto “All the news that’s fit to print” has existed since 1896, when it was adopted by then-publisher, Adolph Ochs. Recently, Ochs’ great-grandson, Arthur Sulzberger Jr. announced that, given current newsroom costs, the Times is likely to be forced to stop publishing a printed paper sometime in the next five years or so. Sobering news from the “Grey Lady.”

They’re gonna need a new motto, too!

by Chris Holman

Evaluate Your Life Day

October 19th has special resonance for financial advisors. It was on this day, 23 years ago, that the Dow plummeted 23% in one day. For those of us in the business then, it was a vivid reminder of the vagaries of human rationality and efficient markets. We were all glued to our Quotrons. (That’s an old-timey, flashback word!) There was little else to do.

October 19th is also “Evaluate Your Life Day”…which might be startling news to a number of you. It’s one thing to wake up and discover that the day is “National Cupcake Day” or “Hug Your Cat Day.” These would be relatively easy to deal with… (unless you are a celiac or cat-allergic.)

But “Evaluate Your Life Day?” As the kids say…”Whoa!”

The good news for financial advisors on “Evaluate Your Life Day” is that advisors are in the extraordinary position of being able to help others evaluate their lives…financially-speaking. In the spirit of “Evaluate Your (Financial) Life Day”, advisors might ask their clients and prospective clients the following series of questions:

1. Are you happy with your financial status?
2. What are your lifetime goals?
3. Are you on a path to achieve these goals?
4. What might you change in order to allow you to achieve these lifetime goals?
   

For financial advisors, asking the right questions is critical to helping others achieve personal happiness and success. Many of us get so caught up in the day-to-day clamor and hubbub that we rarely take the time to examine whether we are on the right path to reaching our potential… financially and otherwise. Financial advisors are in the unique and enviable position of guiding their clients to initiate positive change that will better the lives of their immediate family, as well as future generations.

Speaking of evaluating your life, there is a NY Times #1 bestselling book entitled, “Well-Being: The Five Essential Elements” that might be just the tonic for what ails you. Authors Tom Rath and Jim Harter were moved by the abundance of research by the Gallup organization to create an assessment called the Well-Being Finder. They postulate that there are universal elements of well-being…5 interconnected elements that differentiate a thriving life, from one of toil and suffering:

• Career Well-Being: People who are happy to go to work each day, appreciated and respected by their peers and associates, able to speak with pride about their company to others.
• Social Well-Being: Those with several strong relationships, and able to activate a support system when encountering problems. They feel loved.
• Financial Well-Being: People who manage their finances prudently, are aware of costs and are in control of expenditures. They are frugal but not cheap.
• Physical Well-Being: Those who get sufficient rest, as well as rigorous regular exercise, have plenty of energy in reserve, and eat sensibly.
• Community Well-Being: People who are actively and productively engaged in the neighborhood and in the community, as well as in various groups within the area, such as a church, P.T.A., Crime Watch, Meals on Wheels, homeowners' association, etc.
  

Interestingly, of the thousands of individuals surveyed for their well-being in each of these categories, just 7% were thriving in all five…66% were doing well in only one of the five areas. How do you compare? What about your clients?

That’s enough well-being for now. Hope you are well and that you enjoyed it. Now back to work for you.

by Chris Holman

Stuck on the Tracks?

“Even if you are on the right track, you’ll get run over if you just sit there”…Will Rogers

Procrastination is not a new problem. Writing in 800 B.C., the Greek poet Hesiod declared that “a man who puts off work is always at handgrips with ruin.” In the mid-1800’s, French author Victor Hugo (Les Miserables and The Hunchback of Notre Dame) would tell his valet to hide his clothes so that he’d be unable to go outside when he should stay inside to continue his writing.

However, it appears that procrastination is on the rise. According to Piers Steel, a business professor at the University of Calgary who has made a career out of the study of procrastination, the percentage of people who admit to difficulties with procrastination has quadrupled over the past 20 years. Research by Harvard behavioral economist David Laibson, revealed that American workers have foregone huge amounts of free money in matching 401(k) contributions…simply because they never got around to signing up! (Are your clients maxing out on theirs?)

Many of these insights, and much more, are contained in a very entertaining essay entitled “Later” by James Surowiecki in the 10/11/2010 issue of The New Yorker. In his essay, Mr. Surowiecki reviews recent procrastination research and explores what procrastination tells us about ourselves.

Speaking of procrastination research, one of the most prolific academics in the subject of procrastination is the previously mentioned Piers Steel. Dr. Steel also states, rather dogmatically, that… “People who procrastinate tend to under-perform in almost every other area of their life.” In fact, for those of you who want to get your own procrastination assessment, Dr. Steel invites you to participate on his website, Procrastination Central.

So…after all of this talk about procrastination…what does one actually do about it? According to Timothy Pychyl, professor of psychology at the University of Ottawa (Why are all the experts on procrastination from Canada?), there are a number of deliberate strategies that one can undertake to stay one step ahead of procrastination:

1. Time Travel. Procrastinators discount future rewards as less important than the task at hand…especially if the current reward or activity is a more pleasant one. With “time travel” we use concrete mental images of the future…to represent the future as if it were happening right now. For example, for a person who is procrastinating on saving for retirement, it might help if they imagine, as vividly as possible, living on his/her potential retirement savings now. In other words, think about the task in the real context of the day, and think carefully about how these tasks would make you feel. Hopefully, the realization that the future image is not as rosy as one had imagined, would help a person to change his or her actions toward that activity or task today.
2. Don’t give in to feeling good. Learn to recognize that we can have negative emotions without acting upon them. Stay put for a minute…don’t walk away. Don’t give in to “I’ll feel more like it tomorrow.” Begin a task today; even if it’s not completed…at least it’s a start.
3. Reduce Uncertainty and Distractions. For important tasks, reduce all uncertainty about how to proceed. Shut off your email, close the blinds, wear ear-plugs…isolate yourself and make sure that the environment around you is strengthening your willpower to succeed.
4. The Willpower Muscle. Research indicates that willpower is like a muscle, i.e. you can exhaust your willpower, and when you do, you lose your ability to regulate your behavior. One immediate method to strengthen your resolve is to remind yourself of your values; thereby fortifying your willpower.
   

Many of the solutions to procrastination amount to the re-framing of the task in front of you. In some ways, procrastination is influenced by the gap between effort (what is required now) and reward (what you harvest in the future, if ever). Narrowing this gap, by whatever means necessary, is the key to limiting procrastination. This is why it helps to focus on short-term projects with definite sections and deadlines, as opposed to open-ended tasks with distant time limits.

By the streets of “by and by” one arrives at the house of “Never.”…Cervantes

by Chris Holman

Your Brain Doesn't Care How Old You Are!

The July issue of Consumer Reports On Health contains a very interesting article about the brain as it ages. Recent studies show that the choices people make throughout their lifetime have a significant impact on their ability to remain sharp in old age.

“Your brain doesn’t know how old you are…and doesn’t care,” says Paul D. Nussbaum, Ph.D., an adjunct professor of neurological surgery at the University of Pittsburgh School of Medicine. “It just wants to be in a stimulating environment, and that’s something you can do at any age.”

There are several things you can do to keep your brain stimulated as you age:

• Build a mental reserve—research has shown that the more participants engaged in mentally stimulating activities like reading, writing, crossword puzzles, playing board or card games, playing music, participating in group discussions, the longer they delayed rapid memory decline. Not surprisingly, passive activities, such as watching television, don’t count as “mentally stimulating”.
• Keep working—putting off retirement and continuing to work can also help. However, don’t put in such long hours that you are neglecting your rest. A 2009 British survey found that people who worked more than 55 hours weekly scored similarly on vocabulary and reasoning tests as those who worked more reasonable hours.
• Stay healthy—exercise and diet are extremely influential in helping to keep your brain energized. Countless studies show that people who exercise a few times per week and maintain a healthy diet have stronger hearts and overall better health than people who don’t exercise or eat well. When you consider that “with every beat of your heart, 25% of the blood flow goes right to your brain,” according to Nussbaum, it’s easy to see why taking care of your heart has a direct impact on your brain function.
• Sleep on it—getting enough sleep is also critical. If you reduce an average night’s sleep of 7-8 hours by 1-2 hours, your response time will be slower, you will have more difficulty with complex tasks, and you will have more trouble remembering information. Just like your body, your brain also needs a rest. Sleeping gives your brain time to make connections to new information and shuttle it to long term memory.
• Stay connected—studies have shown that the more frequently people interacted with others, the higher their scores on simple tests of cognitive functions, so stay connected with colleagues, family and friends on a regular basis.
  

Keeping your brain energized is a no-brainer. If you’d like to take a little break from your daily grind right now and try a little mental exercise to help boost your brain power, check out these optical illusions.

On this day, October 7th, Dr. Harvey Cushing passed away in 1939. Dr. Cushing was a pioneer of brain surgery, and is often called "the father of neurosurgery." Almost singlehandedly, he perfected the techniques of brain and nerve operations. Pre-Cushing, mortality rates for neurosurgery were very high...50-60%. Over the course of his career, Dr. Cushing experienced mortality rates of 10%.

by Theresa Ficazzola

Best Practice?

According to Wikipedia, a “best practice” is… “a technique, method, process, activity, incentive, or reward which conventional wisdom regards as more effective at delivering a particular outcome than any other technique, method, process, etc. when applied to a particular condition or circumstance.” (If it’s in Wikipedia, it must be true, right?)

In the world of the financial advisor, “best practices” abound. Or do they?

In the definition above, the key phrase is “conventional wisdom regards…” The problem with conventional wisdom is that it often isn’t. The problem with “best practices” is that just because something worked for somebody else, somewhere else, sometime else…doesn’t mean that it will work for you.

However, by sticking the “best practice” tag on a technique/process/method ….it seems to immunize that particular technique/process/method against critical and discerning thought as applied to one’s own world.

For more discussion on the risk of blindly following “best practices,” I encourage you to read this essay by Tim Berry, “The Sad Truth About Best Practices.” It’s quite good.

At the same time, we can all learn from the best. There’s no point getting older, if we don’t get smarter.

I guess the key point here is to use some balance. “Best practices” can offer some good learning if we take the time to employ some critical thinking as to how these techniques/processes/methods might apply to our own circumstance. Here's a question for you: Are you utilizing any types of “best practices” in your business model today? If not, you may want to examine some and determine if they could yield some benefits for you.

Speaking of a technique/process/method that may or may not be a “best practice”, I’d like to share a brief story with you.

I was in Nordstrom’s the other day…purchasing the right tie for an upcoming occasion. At the counter, as I was completing the transaction, I noticed a list that was labeled, “Best Customer List”. Names… Addresses….Phone numbers….the whole works…in full view for anyone to see. Very indiscreet…a real faux pas by some injudicious Nordstrom employee.

However, this incident got me to thinking. I can imagine how most merchants of luxury items e.g. high-end retailers, luxury car dealers, jewelers, wine merchants, etc. must segment their clients into “Best Client Lists.” I would also think that when financial advisors build strategic alliances, that they should include the other professionals who make their living by purveying luxury goods and services to the affluent. Moreover, I suspect that a savvy financial advisor might organize creative client events that would involve other purveyors of luxury items, and engage the “Best Client List” of all those involved. Could be quite fun!

Not a “best practice.” Just a thought that may, or may not, work for you.

PS…We, at ClientWise, have recently done some research around best practices and developed a benchmarking tool that gives financial advisors the opportunity to benchmark their practice versus top advisors from across the country. By measuring yourself against your peers, you can learn what areas of your practice fall into the “best practices” model, and which areas may need some improvement.

We will be hosting a complimentary webinar on October 13 to discuss some of our research findings and explain how our Benchmark Assessment Report (BAR™) can help you reshape how you manage your practice. For more information, call Liz Walsh at (914) 244-1545, ext. 301.

by Chris Holman

Cultivating Creativity

Last week, I was listening to Terry Gross’ rebroadcast of a 1996 interview with Willie Nelson. Terry Gross is the host of Fresh Air and is, I believe, among the best interviewers in the media today. Her combination of empathy, curiosity, and listening skills enable her to extract the most remarkable stories from her guests, night after night.

During the interview, Nelson revealed that he had written three of his top hits, ‘Crazy’, ‘Night Life’, and ‘Funny How Time Slips Away’…during one eventful week in 1960. At the time, Willie Nelson was still a struggling song-writer. After he wrote these three songs, he figured he might have the requisite song-writing chops, and this was all the impetus he needed to pack up his ’46 Buick and head off to the rhinestone-lined streets of Nashville to see if he could make a go of it.

What a week for Willie! Regardless of whether you are a big fan of Willie Nelson or not, it is extraordinary that the inspiration for these songs struck within the span of seven days. Patsy Cline picked up ‘Crazy’ and the first time she performed it at the Grand Ole Opry, she received three standing ovations. ‘Funny How Time Slips Away’ has been covered by a whole array of artists…including The Supremes, Elvis, and Dave Mathews. “Night Life” was one of Willie’s first big hits via Ray Price, and has become the most-covered country music song of all time.

This got me thinking about inspiration. How does it strike? In Willie Nelson’s case, what was going on in his world to enable him to create three classic songs in such a short time period? I guess we’ll never know. In fact, I wish Terry Gross would have asked THIS question…

For the rest of us, however, is there anything that we can do to cultivate inspiration and creativity…or does originality “just happen” out of the blue?

Fostering Inspiration
Andy Stefanovich, who is writing a book on innovation, and is the senior partner at Prophet, a strategic brand and marketing consultancy….believes that intentional, focused inspiration is a discipline that requires deliberate practice and becomes easier to achieve when five modes of inspiration are practiced. He writes about this in "The Inspiration Discipline." Review the following five modes in sequence, each of which will lead you to greater degrees of “difficulty”:

1. Serendipity. An unexpected moment of inspiration is serendipity. We don’t seek it, but serendipitous inspirations hit us like a bolt-from-the-blue. Although this form of inspiration cannot be engineered, it can help you develop your inspirational capabilities.
2. Recreation. Recreational inspiration is common, yet unrecognized. The sole function is to release the conscious mind from its standard routine or direct concerns. This form of inspiration bubbles up when we do activities for fun, e.g. sports, music, hobbies, exercise, etc. Recreational inspiration is essential to thinking differently and maintaining good mental health.
3. Intentional distraction. This happens to us all the time. Example: Someone asks you who won the Academy Award for Best Picture last year. You know this because you were at an Oscar party last year. The name is on the tip of your tongue, yet you can’t quite remember. Then, you stop thinking about it and five minutes (or five days) later, it comes to you. Here’s what’s happening…once you move onto something else, your unconscious mind eventually provides the answer.
4. Forced connection. Once you feel confident with intentional distraction, you can progress to forced connection. This is the first step in applying inspiration to a specific real-time objective, and is a skill that requires practice and development. Example: You are walking down the street, and stop next to a streetlight. A voice in your head asks the question, “What does this streetlight tell you about leadership?” Slowly, some ideas come to you. The light shines from above. It provides illumination during times of need. The historical nature fits in with the old warehouses around it. Forced connection perspectives can give you a new entry point for considering surprising new perceptions of old problems.
5. Targeted discovery. This mode pushes you to seek sources of inspiration that strategically stretch your thinking, challenge your assumptions, and create new connections…all with a specific real-time objective in mind. Example: What business am I really in? Forget about your specific product or business. Ask yourself what is the value that you provide to your clients. What other organizations or persons make the same promise. What can I learn from them? This mode of inspiration is the engine of innovation, since it is the quintessential new input that’s needed to get new outputs, and create a sustainable pipeline for new ideas.
   

Stay tuned. I’ve rambled on enough for one day. Next week, we’ll be talking more about inspiration and innovation, and specifically what you can do to cultivate more of both…including exercises. Fun!

Talk to you then.

by Chris Holman

Business Owners and Investment Risk

The Ewing Marion Kauffman Foundation is the world’s largest foundation devoted to entrepreneurship. Their mission is to help individuals attain economic independence by advancing educational achievement and entrepreneurial success, consistent with the aspirations of the founder, Ewing Marion Kauffman.

(In 1950, Ewing Kauffman founded Marion Laboratories in the basement of his home in Kansas City with a $4,000 investment. His first product was calcium supplements, which he made by pulverizing oyster shells. In 1989, Marion Labs was purchased by Dow Chemical for $2.2 billion. How’s that for entrepreneurship!)

Over the years, the Kauffman Foundation has been a source for fascinating research on business owners and entrepreneurship. Recently, they published an intriguing study on the amount of risk that business owners assume (outside of their direct business interests) entitled, “Business Owners, Financial Risk, and Wealth.”

Among the report’s conclusions:

1. Business owners are more conservative when it comes to saving and spending.
2. Business owners allocate more time to shopping for financial products.
3. Households that own businesses invest more heavily in relatively safe assets.
4. Retirement saving is significantly more important for business owners than non-business owners. (45% vs. 32 %.)
5. Business owners are wealthier. The medium net worth for business owners in this study was $497,000…for non-business owners it was $94,000.
   

If you are a financial advisor, how might you use this study?

• In the first place, if you work with business owners now, this might corroborate what you have intuitively known all along. As such, the report might bolster you to guide your business owner clients to more conservative portfolios. (Don’t make assumptions though! All clients are different.)
• You might share this report with your business owner clients in order to stimulate a discussion regarding their financial risk.
• If you currently do not work with business owners, you might want to use the study to begin a targeted campaign to attract business owners as clients.
  

Today, September 2nd, is the birthday of Andy Grove, one of the first employees of Intel, who oversaw a 4,500% increase in Intel’s market capitalization while serving as CEO. Grove was born to a middle-class family in Budapest, Hungary. During the Hungarian Revolution of 1956, he left his home and family at the age of 19, under cover of darkness and emigrated to the United States.

Andy Grove once said, “Your career is your business, and you are its CEO.”

by Chris Holman

Back to School

Regardless of where and when you went to college, chances are things are a lot different today, especially the cost of a four-year college degree. For most people, college is a four year commitment; however, what’s accomplished in those four years impacts an entire lifetime. Deciding where to go to school and what major to declare is almost as important as figuring out how to pay for it.

What’s clear is that a college degree is much more valuable than a high school diploma. According to the U.S. Census, the total annual family income when the head of the household has earned a bachelor’s degree earned almost twice as much ($110,587) as a head of household with a high school diploma ($59,904). Multiply this over the course of a career and we are starting to talk real money!

U. S. News and World Report just released their rankings report of the best colleges for 2011. This is the 27th year the magazine has been educating parents and children about the best colleges and universities in the U.S. In addition to ranking the overall top universities and colleges, the magazine ranks schools in other categories, as well. There are regional rankings, college rankings by high school counselors, up-and-coming colleges, business programs, engineering programs, and more.

Not surprising, the top 5 universities are:

Harvard, Princeton, Yale, Columbia, and Stanford

The top 5 liberal arts colleges are:

Williams, Amherst, Swarthmore, Middlebury, and Wellesley

Here's a link to a complete listing of U.S. News & World Report University and College Rankings.

It’s widely known that one of the main reasons people save and invest their money is to pay for their children and/or grandchildren’s college education. As a financial advisor, you are probably already helping many of your clients do just that.

However, as a wealth advisor today, you can help your clients do so much more. Become an expert and trusted resource regarding all things college-related.

• Learn everything there is to know about 529 college savings plans (remember tax implications vary by state).
• Compile a listing of college prep course instructors in your area. There are chain programs, such as Huntington Learning Center, with centers across the U.S. and Canada. There are also smaller, independently run centers that provide more than just tutoring services for the SATs and ACTs. Ivy Educational Services, for example, provides tutoring, along with counseling on how to write an essay that will get the attention of college admissions officers.
  
• Depending on the age of their children or grandchildren, open a dialogue with your clients about the latest college rankings. Some sample questions may include...
  

Questions for those with high school aged children:

1. Have you seen the latest U.S. News & World Report college rankings?
2. Has your son/daughter started talking about where he/she wants to go to college?
3. What subjects are he/she interested in?
4. Has he/she taken the SATs? Have you considered a prep course to boost scores?
5. Do you know the approximate four year cost of that school’s tuition?
6. Do you currently have a college account for your children/grandchildren?
7. Will you have enough to pay for school when the time comes?
   

Questions for those with younger children:

1. Have you seen the latest U.S. News & World Report college rankings?
2. Before you know it, your children/grandchildren will be talking about college. Do you know the approximate cost of a four year college education?
3. Do you currently have a college account for your children/grandchildren?
4. Will you have enough to pay for school when the time comes?
   

If some of your clients are thinking about sending their kids to a smaller, less popular school thinking it will be less costly…forget it. These days, college is expensive no matter where you go. I would never have considered going to Harvey Mudd College in Claremont, CA. It was ranked #18 on this year’s U.S. News and World Report list. I have nothing against the school…I’ve just never heard of it. I was shocked; however, to discover that one-year tuition at Harvey Mudd for the 2010-2011 school year is $40,390.

Believe it or not, #1-ranked Harvard University is cheaper at $38,416…just try to get in!


by Theresa Ficazzola

Building Your Wealth Management Network with Business Brokers

One truism of the financial advisory business today is that investors are expecting increasing levels of proficiency and sophistication from their advisor(s). The advisor can respond to this internally, i.e. by adding specialized competencies and functions within the team…or externally, i.e. forming alliances with other trusted professionals. Typically (and predictably), these external alliances are with CPAs and attorneys. Less typically, more creative financial advisors are building networks with other professionals, e.g. property and casualty agents, commercial loan officers, art gallery owners, business appraisers, etc.

Whatever professional network the advisor chooses to build, it should completely be a function of the clients the advisor chooses to serve, and how they serve them. In this way, the advisor creates a virtual (and virtuous) team which works to the benefit of the clients.

Financial advisors who we are coaching who work with entrepreneurs and business owners are finding that business brokers are natural members of their wealth management network. For those advisors who are interested in connecting with business brokers in this regard, we offer the following insights:

• Comeback is spotty. Many business brokers are only now emerging from a very tough period where listings were down 40%+. When the banking crisis triggered the recession, the brokerage business was devastated by a lack of credit. Even now, the comeback has been spotty around the country. Business brokers in New York are reporting that listings are up from last year…however many brokers in California report that 2nd quarter listings are way down from 2009.
• An increase of self-funders. One of the trends of the past year or so is that self-funders have come into the market. In some cases, these are down-sized executives who are buying businesses…bypassing loans and putting their own savings into the purchase price.
• Credentials count. In choosing a business broker, find one who is credentialed by the International Business Brokers Association. To become an IBBA-sanctioned Certified Business Intermediary (CBI) requires some years on the job, as well as additional continuing education.
• Finding a specialist. The best brokers specialize in a select group of industries. Every industry has its own unique culture, history, and knowledge awareness. Importantly, business broker generalists are akin to the financial advisors generalists, i.e. they are fast becoming dinosaurs.
• Communication is key. The best business brokers work with their clients in communicating how they manage the process. This process might include: researching the company and industry, “staging” the business for sale, valuing the business, uncovering potential buyers, providing frequent updates on interested prospects and transaction status, etc.
• Negotiating the fee. Most usually, the broker collects a fee when the business is sold. 10% has been the industry standard, although with the weakened economy, knowledgeable sellers have negotiated better deals.
• Time-frame for sale. On average, it takes about nine months to sell a business. Brokers will ask their clients for an exclusivity contract, and six months is the likely minimum time-frame, although like the fee, anything is negotiable.
  

Concluding Thoughts: Right now, buyers like private equity funds are scrounging the market looking for bargains. On the sell-side, there is a pent-up desire to sell, motivated by the fear of a possible increase in the capital gains rate. Either way, it would seem to be an opportune moment for financial advisors to connect with business brokers. Savvy financial advisors could partner with business brokers in joint marketing opportunities, and position themselves as an integral player in this process. Building your professional advisory network could take some time; however, the benefits of a mutually beneficial relationship (e.g., new client introductions for you and the broker) are worth the time and effort.

by Chris Holman

The Science of Attention

My apologies for our brief hiatus...I've been away on jury duty.

There's a pretty interesting piece in yesterday's New York Times entitled, "Outdoors and Out of Reach, Studying the Brain."

The premise of the article is intriguing. Organized by Dave Strayer, a professor of psychology at the University of Utah, five neuroscientists take a raft trip down the San Juan River in a remote section of southern Utah.

The trip's intention is to explore what happens when we step away from our devices and rest our brains...in particular, this journey is an exploration into how attention, memory, and learning is affected; as well as how our capacity to focus is altered when we escape from the phone, email, texting, etc.

What makes this excursion doubly interesting is that it is populated by both "believers" and "skeptics". The believers postulate that heavy technology use can inhibit deep thought and cause anxiety...and accept that getting into nature can help. The skeptics use their digital gadgets without reservation, and are not convinced that anything lasting will come of this trip, either personally or professionally.

As time went on during the trip, both the believers and the skeptics became more relaxed, reflective, quieter and more focused on their surroundings. While a few days away from civilization didn’t transform the group, it did get them to change the way they think about their research and themselves. For example, one person used to take out his computer during meetings, but is now saying that perhaps he can learn to listen better and work at becoming more engaged.

More and more, in this era of Information Overload, neuroscientists and psychologists are directing their focus to the Science of Attention. Some interesting new books on this topic include:

• Distracted: The Erosion of Attention and the Coming Dark Age,
• The Dumbest Generation: How the Digital Age Stupefies Young Americans and Jeopardizes Our Future,
• The Overflowing Brain: Information Overload and the Limits of Working Memory.
  

I find the entire topic quite absorbing. Behavioral studies have shown that performance suffers when people multitask. These same researchers also wonder whether attention and focus can take a hit when people merely anticipate the arrival of more digital stimulation. If true, this would mean that our attention and focus is always at a deficit! Bummer!

By the way, if you are reading this post while you are on vacation yourself...do yourself a favor:

Step away from the electronic device...now!

All the best!

by Chris Holman

PS...If you have a colleague or friend who might appreciate the information on this blog, please consider forwarding this to them. Thanks very much!

What Motivates You?

Lately, for many of our coaching clients we have been thinking about the subject of motivation. For financial advisors and entrepreneurs especially, this is an interesting and always timely topic.

Coincidentally, there was a short piece this past week in Forbes that addressed this topic from the standpoint of entrepreneurs, "Why Serial Entrepreneurs Can't Stop." In this article the author contends that the motivation for entrepreneurs, especially the "serial entrepreneurs", i.e. those go-getters who can't stop creating and building new companies is...a sense of purpose. For them, changing the world is part of their quest. As such, their work is never done.

For the top-performing financial advisors who we work with, we also see them driven by other desires, such as:

• Achieving a goal...personal, professional, material,
• Reaching a lifestyle that is equal to, or better than, that enjoyed by their parents,
• Building a profitable and sustainable business that will survive them,
• Validating themselves in their own eyes, as well as the eyes of their peers.

Push/Pull Factors for Entrepreneurs
For entrepreneurs, there have been some interesting studies that investigate the key motivating factors for starting a business. Generally, the factors are split into two underlying reasons...Pull and Push factors.

Pull Factors for Entrepreneurs

1. Independence, or the feeling of being in charge of one's own destiny
2. Money
   
3. Challenge and Achievement
4. See an Opportunity
5. Lifestyle

Push Factors for Entrepreneurs

1. Job Dissatisfaction
2. Changes within the workplace
3. Children, i.e. financial concerns, a desire for flexible schedules, etc.

Interestingly, Pull Factors for entrepreneurs seem to be much more persistent and sustaining than the Push Factors.

As coaches, one of the frequent questions that we encounter is how to boost ambition. Without being completely directive and telling our clients what to do exactly, we have seen success for clients who do two things:

1. One of the keys to ambition is the understanding of one's own motivations. If you can understand what drives you on a day-to-day basis, your path to increasing your ambition becomes clearer.
2. The other method to jump-starting ambition is to get you out of your comfort zone and take some risks. Ambitious people don't settle for the status quo. They seem to be continually testing the boundaries of what they can comfortably do, on both a professional and personal basis.

For closing thoughts, let's turn to one of our heroes...Mark Twain...whose memory has recently benefited from the publication of a 500,000 word autobiography:

"Keep away from the people who try to belittle your ambitions. Small people always do that, but the really great make you feel that you, too, can become great."...Mark Twain

by Chris Holman

You've Got the Power!

In 1968, James David Power III struck out on his own to form J.D. Power & Associates. It was an unusual career move for the time. At 36 years old, with a mortgage and three kids, Dave Power had a secure job as director of corporate planning at McCullough Corp., makers of chainsaws and Weed-Eater.

Nonetheless, Power had an ongoing passion for market research, and decided to form his own market research firm. (In the early years, Power and his wife Julie tabulated the results of their customer surveys around their kitchen table.)

J.D. Power & Associates began as a publisher of independent customer surveys that focused on the automobile industry. Power’s big break happened in 1971, when his customer research uncovered a flaw in Mazda’s rotary engine. Writing his first-ever press release on a yellow pad of paper, Power detailed unreported problems by Mazda car-buyers. 24 hours later, the press release hit the front page of the Wall Street Journal…and (as they say) the rest is history.

By 2005, J.D. Power & Associates had grown to 700+ employees with annual sales of $150 million. Dave Power had earned the reputation as the auto industry’s “Mr. Quality.” During that year, Power decided that the time was right to step aside, and sold his company to McGraw Hill. Terms were undisclosed.

For the past 8 years, J.D. Power & Associates have branched out to the financial services industry and have provided ratings for full-service investment firms. In the latest survey, “2010 U.S. Full Service Investor Satisfaction Study” released on July 19, 2010, three firms distinguished themselves with superior ratings: Edward Jones, RBC Wealth Management, and LPL Financial. Edward Jones had the highest investor satisfaction, averaging 769 on a 1,000 point scale.

The study also finds that advisors who perform certain practices see a positive impact upon client satisfaction and the overall investment experience. These activities include:

• Fostering engaged client/advisor relationships that involve the development of an investment strategy,
• Periodic review of investment objectives,
• Regular communication around, and reasons that explain, investment performance,
• A clear explanation of fees and commissions.
  

The study also finds that investor satisfaction has a substantial impact upon several other important criteria: share of wallet, more new client introductions, and higher levels of loyalty and retention.

Also notable is that investors’ positive sentiment regarding their own investment firms have decreased. Overall, an increasing number of investors believe that their firm is more focused on profits…as opposed to them.

The 2010 study is based upon responses from 4,460 investors who make some or all of their investment decisions with an investment advisor. The study was fielded in May 2010.

There are no real surprises in the Investor Satisfaction Survey. Financial advisors know they need to engage their clients and keep them happy. What is relevant is yet another reminder that many clients remain dissatisfied with their current firm. What about yours? Here are some coaching questions that come to mind:

• What are you doing to effectively engage your clients on multiple levels, so they remain satisfied with your level of service?
• Why not communicate the survey’s findings to begin an open dialogue with them about you and your practice?
  
• What is your plan for acquiring new clients in today’s marketplace?
  
• How else might you use the survey’s findings?

You have the “power” to ensure all your clients are satisfied; don’t relinquish that power to someone else.

by Chris Holman

Think for Yourself

Groupthink is a style of thinking that people can engage in when they are deeply involved in a cohesive group. When groupthink occurs, the desire for group unanimity overrides the motivation to realistically discuss and appraise different alternatives.

For financial advisors, groupthink occurs all around. Wall Street is an exceedingly subjective and psychological environment where there is a marked tendency towards groupthink.

For those financial advisors who work with investment committees of foundations or employers, group decisions can lead to significant behavior and psychological biases.

There are several noteworthy pieces that explore this interesting topic.

• For those of you who have read Michael Lewis’ The Big Short, you know the story of how a quirky band of unknowns made hundreds of millions of dollars by thinking differently than the “Wall Street Machine”.
• There is also a wonderful research piece from Vanguard on groupthink called “Group Decision-Making: Implications for Investment Committees.” This is a must-read article for any financial advisor who works with investment committees on an ongoing basis.
• There is also a thoughtful piece on Art Petty’s Management Excellence blog entitled, “Six Steps for Avoiding Groupthink on Your Team.”
  

Many financial advisors are getting sucked into the groupthink philosophy because they are hesitant to break out from the pack. There could be several reasons for this, including compliance rules and regulations, fear of a lawsuit from a client, or worries about hitting their numbers and potentially losing their job if they say or do the “wrong” thing.

It’s interesting to note; however, that some of the most successful investors in the past decades, e.g. Benjamin Graham and Warren Buffett, have achieved their success by avoiding the trap of consensus, groupthink investing. Coaching questions: What about you? Do you participate in groupthink, or do you stand up for what you believe and speak out on your own?

Perhaps Doris Lessing, the 2007 Nobel Prize winner for Literature, summed it up best when she said, “Think wrongly, if you please, but in all cases, think for yourself.”

by Chris Holman

Post-Crisis: Has Investor Psyche Changed?

Capgemini is a global consulting firm headquartered in France that has released the World Wealth Report (in conjunction with Merrill Lynch) for the past 14 years.

In the most recent report, World Wealth Report 2010, they offer some interesting observations with regard to the post-crisis environment. In their view, investor psyche has changed significantly in the past three years. Since their insights run parallel to what we, at ClientWise, are seeing in the industry, I thought that I might share them verbatim:

1. Post-crisis, most high net worth clients have yet to regain their trust in the regulatory bodies and institutions that are meant to oversee markets and protect investor interests. Coupled with ongoing concerns around financial markets, this lack of confidence has long-term implications for investing behavior.

2. Shifts in asset allocation mirror investor caution. High net worth investors are favoring predictable forms of cash flow like those in fixed-income products, and are seeking protection against downside risk, and their search for returns takes place within the broader context of portfolio risks and goals.

3. High net worth investors have seized a more hands-on role in their finances. Above all, they want specialized and independent advice, transparency and simplicity, and effective portfolio and risk management, and are looking for wealth management provider relationships that can clearly demonstrate a more integrated approach to meeting their needs.

4. Emotional factors are a prominent feature of the high net worth psyche today, and wealth management firms and advisors must incorporate those emotional factors into stronger portfolio management and risk capabilities so as to properly support client goals and needs.

5. With billions of assets still in motion post-crisis, wealth management firms are embracing change, leveraging key tenets of behavioral finance to rebuild investor trust and confidence and drive further innovation into their offerings and service models.

Admittedly, many of these changes in investor psyche were happening before the financial crisis. However, post-meltdown they seem to have been exacerbated.

However, the learning for financial advisors is profound. Assuming that you agree with Capgemini's observations, the coaching question is: what are you doing differently now to meet your clients’ needs, communicate more effectively and restore their trust?

Join our Complimentary Webinar
At ClientWise, we’re always looking for ways to help financial professionals improve their productivity and meet their goals. Our latest public webinar, to be held on Thursday, July 15 at 4:30 pm, EST, will discuss the benefits of our new service, the Benchmark Assessment Report (BAR™), which benchmarks your practice against other top advisors.

For more details about how the BAR™ can leverage your strengths to accelerate growth or to register for the webinar, please visit our website at www.clientwise.com and click on the “Knowledge is Power” photo.

by Chris Holman

Generation Gap

There’s a thought-provoking piece in the Harvard Business Review that discusses generational diversity in the workforce and how to manage it.

In many organizations today, there is a diverse group of workers with disparate differences in attitude with regard to: motivating, managing, maintaining, dealing with change, and increasing productivity. Many of today’s organizational leaders are members of the Silent Generation or Baby Boomers. Fast on their heels are Generation X and the Millenials. Although stereotypes are tricky, it seems to be true that each generation demonstrates similar characteristics.

For those financial advisors who work on multigenerational teams, it might be helpful to raise awareness of the differences between generations, as well as to recognize the benefits of cross-generational dialogue. The photo at the beginning of this article is a prime example of the difference between two generations—the older businessman is reading a book, while the younger person seems to be reading a text message from his phone.

The oldest generational group, born between 1925 and 1945, is the Silent Generation. This group values hard work, conformity, dedication, sacrifice and patience. Members of this generation are comfortable with delayed recognition and reward.

The largest group in the work force today is the Baby Boomers. Born between 1946 and 1964, Boomers are characteristically optimistic and team-oriented. They place a high value on work ethic, while also seeking personal gratification and growth.

The smallest sized group is Generation X, also known as the Sandwich Generation because of their position between the two largest groups. Generation X, born between 1965 and 1980, were the first “latchkey kids”. They are self-reliant, global thinkers who value balance, fun, and informality.

Millenials were born between 1981 and 2000, and ultimately will become the largest group. Members of this generation exhibit confidence, optimism, civic duty, sociability, street smarts, inclusivity, collaboration, and open-mindedness. They tend to be goal-oriented.

Multigenerational Dialogue
For many teams, cross-generational understanding begins with dialogue. Indeed, some teams have formalized the conversation by organizing discussion groups that explore the generational differences between them.

Here are some coaching questions that may facilitate a useful exchange of ideas:

• What were some of your generation’s key national and international events?
• What trends, people, and popular culture do you recall from your first 12-15 years?
• Which defining historical event(s) shaped your generation?
• What do you value most about your generation?
• What challenges do you face as a result of being in your generation?
• What perceptions do others have of your generation?
• What are the pluses and minuses of working with each of the other generations?
• How can the members of multigenerational teams work better together?
• What should the mode of communication between them be?
  

Within any team, it is important to openly discuss differences in expectations. Recognizing that the same generation can look very different through the “generational lens” is helpful in understanding that it is normal for different people to react to the same situation in different ways.

Join our Complimentary Webinar
Webinars are a relatively new method of communicating and are commonly used by people from most generations. The benefits are obvious: they can reach a large audience; participants can be located across the country; they’re convenient, they save time and money and increase productivity.

At ClientWise, we’re always looking for ways to help financial professionals improve their productivity and meet their goals. Our latest public webinar, to be held on Thursday, July 15 at 4:30 pm, EST, will discuss the benefits of our new service, the Benchmark Assessment Report (BAR™), which benchmarks your practice against other top advisors.

For more details about how the BAR™ can leverage your strengths to accelerate growth or to register for the webinar, please visit our website at www.clientwise.com and click on the “Knowledge is Power” photo. Members of all generations are welcome.

by Chris Holman

Kids?...or a Bentley Flying Spur?

For moms and dads, or those of you considering becoming a mom or dad, have you ever wondered just how much it costs to raise a child today?

A study released recently by the USDA, showed that raising a child is 22% more costly than it was in 1960. Adjusted for 2009 dollars, middle-income parents in 1960 spent a total of $182,857 to raise one child through the age of 17. Today, parents spend $222,360. The bulk of those costs are, not surprisingly, for health care and education.

(The suggested MSRP for a 2010 Bentley Continental Flying Spur Speed Sedan is $202,500.)

As a financial advisor, these figures shouldn’t sound too off the mark. Everyone knows the costs of raising a child are increasing each year, particularly for education. However, most parents spend so much money on the day to day expenses of raising their children, they fall short of being able to afford to pay for college, let alone fund their retirement sufficiently.

What are you doing to help your clients prepare for the financial reality of paying for their children’s expenses until they’re on their own? Effectively managing finances over the course of a child’s early lifetime can significantly impact how much money your clients will end up with in their retirement fund.

How can you help?

• Consider creating a marketing campaign surrounding the USDA’s new study to make your clients aware of the expenses of raising a child. Create a mini campaign for clients who are expecting their first child (or those becoming grandparents) and distribute it a few months before the child arrives to prepare them for what lies ahead. Once they have the baby, they will be too preoccupied with everything that comes with being a new parent to focus on their finances.

• Create a list of popular websites that you can share with your clients that offer good information and advice about health care costs (www.insurekidsnow.gov) and education expenses (www.collegeboard.com ).

• Devise a strategy to help your clients decide where they should put their money and when – is it better to pay off the mortgage, save for college, or fund a retirement account. If there are limited finances, which should be done first? Develop different scenarios with real life examples to share with clients.

• Host a seminar in your office to help clients understand their options. Consider holding it in conjunction with a local university financial aid officer or an estate attorney from your professional advocate network for maximum impact.

The better prepared your clients are for paying for their child rearing expenses, the better prepared they will be to enjoy the lifestyle they dream of having in their retirement. As their trusted financial advisor, you can help them prepare more effectively.

by Theresa Ficazzola

Life's Lessons (at $53,118.00 a year)*

Bob Joss is the insightful, well-spoken, and highly regarded professor of finance and Dean Emeritus of the Stanford Graduate School of Business. In his last lecture as a teacher, he recently summed up his life’s learnings in “Top 10 Life Lessons,” which are 10 lessons that have been important to him throughout his distinguished academic and business career.

#10. Life is like cricket. Don’t know much about cricket, but I think he means that life is a long game, with ebbs and flows. Consequently, it is important to be prepared and stay alert for opportunities and challenges. As a financial advisor, what are you doing to prepare your clients for their life-long game? Are you staying alert for all the opportunities that may come your way from your clients and the prospects in your pipeline?

#9. Life is too short to deal with “bad” people. “Bad” people are bad news. They create negative energy and can ultimately waste your valuable time. For financial advisors, “truer words were never spoken.” Most financial advisors can build a pretty good business by finding 100 good people who they can connect with and serve. Therefore, concentrate on finding those folks who meet your minimum threshold of “good” people.

#8. Run it like you own it. Leadership is about responsibility and our actions matter and are watched. If we run a business like an owner, we set the tone for all others who observe us. Ensure you’re running your practice like you own it, even if you don’t. Treat your team with respect and reward them appropriately.

#7. Don’t forget to manage sideways. We are always a part of some team. Think beyond the immediate. As a busy financial advisor, you have a lot to do each day. As you are managing your big picture, don’t forget to also focus on the details, which in some cases, matter just as much as the larger ones.

#6. Don’t take yourself too seriously. Arrogance deprives a leader of loyalty. Leadership is about earning followers. As Jim Collins has written, Level 5 Leadership is a combination of humility and will. Try to keep your sense of humor, even when you’re having a bad day or dealing with a difficult client.

#5. Without fear, there is no courage. Take intelligent risks. Trust your instincts. Ask for help…asking for help is a sign of independence, not weakness. If you don’t have a mentor or a close friend who understands your business; someone who you can bounce ideas off of; someone whose advice you can trust—find one, or two. Building a close alliance can give you a little extra push when you need it most.

#4. Life is full of “character-building” experiences. When we have a “character-building” experience, it can transform who we are as a person. Don’t stay in your comfort zone; try new things. We learn the most when we learn a skill that is about something important to us. What’s important to you? What’s important to your clients? Ask your clients what keeps them up at night; then devise a plan to help them sleep better.

#3. Find the words. Life is an endless series of conversations. How well do you converse with your clients, your colleagues, your team? Can you speak succinctly, clearly and with conviction? Perhaps you could benefit from taking a public speaking class at a local college. Leaders earn followers by honest communication, i.e. communication that respects, and connects, with their audience.

#2. Use critical thinking throughout your life. Critical thinking leads to great questions, which can uncover the 1 or 2 important kernels of information that may lead to helping you resolve an issue or solve a problem. Don’t forget to ask your clients questions on a regular basis—keep them engaged; you never know what relevant piece of information you can garner from them that could further solidify your relationship with them.

#1. Don’t forget to renew yourself. Remain curious and vital. Self-preoccupation is a prison. Our identity is what we commit to. Periodic self-assessment allows us to learn and grow. When was the last time you took some time out for yourself to do something you really enjoy? Whether you take a solo bike ride or run, immerse yourself in a good book, get a massage, or take a walk on a beach, you’ll be sure to be renewed—at least for a little while.

Ralph Waldo Emerson, the great American literary philosopher summed things up best when he wrote, “Life is journey, not a destination.”

*Tuition at the Stanford Graduate School of Business for 2010/2011 is $51,118.00, not including room & board, books, and other expenses.

by Chris Holman

Know Your Neighbors

The popular assumption is that the internet…mobile phones… texting…and other new technologies…have enabled Americans to become increasingly isolated. Indeed, past sociological research has supported this assumption.

However, some interesting new research by the Pew Internet & American Life Project disputes this belief.

In a recently released report by the Pew Foundation, "Neighbors Online", it was revealed that internet users are more likely to meet their neighbors face-to-face and engage in meaningful discussions of community issues. Also, people’s use of mobile phones and the internet is associated with larger and more diverse discussion networks. When their full personal network is examined…i.e. both strong and weak ties…internet use, in general, and use of social networking services, such as Facebook, in particular, are associated with more diverse social networks.

The Pew findings include:

• Knowing one’s neighbors’ names is a key predictor of how much people chatted in person about community topics. If you know your neighbors’ names, you are 70% likely to be talking to them about various community topics, and if you don’t know their names, you are only 12% likely to do so.
• Internet users are more likely to meet their neighbors face-to-face and engage in community issues, i.e. 50% vs. 35%.
• Speaking face-to-face is still the most common way that people interact regarding issues that affect the community. 46% of Americans talked face-to-face with neighbors about community issues, 21% discussed community issues over the telephone, and 11% read a blog dealing with community issues.
• Having face-to-face interactions with neighbors about community developments is closely linked to factors such as: age, socio-economic status, education, and race.
• Women are slightly more likely than men to know all, or most, of their neighbors, i.e. 44% vs. 40%.
  

For financial advisors, this report reveals interesting implications regarding the importance of connecting with others in their respective communities. The most obvious finding is that simply knowing the names of your neighbors greatly increases the likelihood of engaging them in some form of conversation or dialogue, even if it’s something as basic as the weather.

(Coaching Question: Do you know all your neighbors? Can you name them? How well do you know them? What types of conversations do you have with them? If you don’t know all of them, why not introduce yourself the next time you see them and explain who you are and what you do? Who knows, they may just be in the market for a good (and friendly) financial advisor.)

by Chris Holman

Are you happy?

Some people say that happiness is a state of mind, just like feeling young. Let’s face it, everyone has their good days and bad days, but some people are just happier than others. A new study reported by LiveScience.com says that age is a big factor in determining who’s happy. The study, reported by Rachael Rettner for LiveScience.com, revealed that older people in their mid- to late-50s are generally happier, and experience less stress and worry than younger adults.

The results were based on Gallup phone surveys conducted in 2008 of more than 340,000 Americans. It included measures of both overall happiness (called global well-being) and day-to-day experiences of specific feelings such as stress and happiness (called hedonic well being). It’s more impactful to include both types of happiness in a study such as this because the first provides a more reflective look at life while the second gives a more immediate view of life.

I guess this makes sense. If we were only talking about hedonic well being, I would argue that children and younger people are the happiest people on earth. Have you ever seen a three-year old bite into a cupcake or jump into a pool? Do six-year olds ponder paying the bills? Do 10-year olds worry about paying the mortgage or finding a job? Generally speaking, most kids are happy all the time; they have no worries or fears—their parents do all the worrying for them.

People’s overall satisfaction with their lives showed a U-shaped pattern in the study, dipping down until about the age of 50 before trending upward again. Stress and anger steadily decreased from young adulthood through old age. Worry was fairly constant until age 50, when it declined. Sadness levels rose slightly in the early 40s and declined in the mid 50s, but overall sadness didn’t change much with age.

Study researcher Arthur Stone, a psychologist at Stony Brook University in New York explains several theories that may explain the trend:

• Older people are better at controlling their emotions than younger people,
• Older people remember fewer negative memories; they focus on telling and retelling stories about the “good old days”,
• Older people might focus less on what they have or have not achieved and more on how to get the most out of the rest of their lives.
  

Of course, this is just one study. More research is needed. But is it? Can you really measure true happiness? Should we try? Maybe we should spend less time trying to figure out why people are happy and just spend more time being with people we like, doing the things we enjoy. Certainly that should make us happy.

Are you happy today? Why not send a friend an email and attach a Smiley face to it. It might make you happy (at least for a minute), and you might make your friend happy, too.

According to Wikipedia, Smiley has been a registered trademark in some countries since 1971 when French journalist Franklin Loufrani created "Smiley World" to sell, advertise and license the smiley face image in the United Kingdom and Europe. The Smiley name and logo is registered and used in over 100 countries. Loufrani had created the icon in 1971 to highlight good news in newspaper articles.

Need an even happier pick-me-up, listen to Bobby McFerrin sing his 1988 hit “Don’t Worry, Be Happy” on Youtube. The song was the first a cappella song to reach number one on the Billboard Hot 100 chart, a position it held for two weeks. The song's title is taken from a famous quote by Meher Baba.

The Indian mystic and sage Meher Baba (1894–1969) often used the expression "Don't worry, be happy" when cabling his followers. In 1988, McFerrin saw a poster of Baba with the quote and was inspired by the expression's charm and simplicity; as a result, the song was composed.

Peace of mind, including financial stability, can certainly help to reduce one’s anxiety about living the lifestyle he or she wants in retirement and contribute to one’s overall well being and state of happiness. As a wealth advisor, are you doing everything you can to make your clients as happy as they can be, regardless of their age?

by Theresa Ficazzola