Focusing strictly on achieving higher rates of return is not the best financial strategy. |
Accumulators & Retirees: Some people who would talk with you about your money focus first on the dollars you are saving or have already accumulated. They may say that they could do a better job for you by providing products offering better performance and higher overall rates of return, which often requires more risk. We would agree that better investments with higher returns would increase ones Circle of Wealth, but products alone are not the answer. The process is also important. For many, what little time spent on a financial strategy is often focused solely on increasing returns on savings and investments. (Click on that section of the pie) However, this strategy also increases risk as well. To illustrate this point, let’s assume that we are going to send you to play in The Masters - the world's most prestigious golf event. We have two things to offer you, but you can choose only one. You can have the clubs of any professional golfer to ever play the game, or you can have their playing ability or swing. Obviously, you will do better in the game with the ability rather than their clubs. (A baseball analogy may also be used here. Simply click on the picture of the golfer to cycle through the available sports visuals.) Business Owners: As we have discussed business owners spend the majority of their time focused on their profitability. As long as their lifestyle is not being negatively affected things roll along quite smoothly. They are not interested in doing anything that could disrupt their standard of living yet they do have areas where they are losing money unnecessarily in their expenses to operate. The golfer is there for this reason. Do you play golf? Suppose we are going to send you to play in the Masters next year, golf’s most prestigious event. There are two things we have to give you and you can only pick one. You can have the clubs of any player who has ever played a round of golf or you can have their ability. Which would you choose? Well, obviously you would choose the ability. The swing is much more valuable than the club. |
No math presented on this screen. |