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Have you seen the Viking Cruises sponsor spots on public television? Torstein Hagen, Viking Chairman is adding wood to a fire and explaining the one thing we don’t have enough of is time. “It’s the only scarce commodity.”1 When I asked a friend familiar with world cruises how some people could book the best cabins on long voyages year after year he explained: They consider the amount of money they have in the bank and the number of years they might still have on Earth. They realize the first number is much bigger than the second. Time is precious. Are your clients using it efficiently?
The British have an expression, “Penny wise and pound foolish.” It is another way of saying “You have your priorities wrong. Treating time as a currency can also make the case for paying for professional services.
1. The end of life observation. It has been said few people, at the end of their life, say “I wish I spent more time in the office.” Most people reflect on not having spent enough time with their family or doing things that give them pleasure. Instead, they often defer having a good time until they retire. Which never happens. Encourage your client who is in good health both physically and financially to enjoy life now, instead of postponing please into the distant future.
2. Are you an expert? If not, hire one. Some people insist on doing their own taxes. There is a difference between paying the government the amount they ask for vs. paying the least amount possible while staying within the law. If anything went wrong and you were audited, it makes more sense to have the accountant who filed your taxes defending you vs. defending yourself before the IRS. It has been said a little knowledge is a dangerous thing. Instead of attempting to become an expert, hire someone who already is an expert.
3. Any last regrets? Time eventually runs out. It has been said at the end of our life, we often do not regret the things we have done, but the things we did not too. This makes the case for clients to “seize the day” and take the opportunity to go on great trips and keep up with friends they have made in life along the way.
4. Are you a self-directed investor? Many people think “Investing is easy.” They do it themselves. If they understand the basics and stick with index tracking funds, that might be OK, assuming they are disciplined. If they trade stocks, that can be a different story. It might be their passion. They enjoy doing research. They will stay on top of the markets daily. Others lose interest, moving onto something else. Their money is at risk, as long as they are invested in those individual stocks. If investing is their passion, that is great news. If it is one of several interests, it makes sense to find an advisor and make investment decisions together.
5. What keeps you awake at night? Many people have difficulty sleeping. We spend a third of our lives asleep.3 That is a lot of time. About a third of adults have trouble sleeping.4 Stress, anxiety and depression are common reasons for poor sleep.5 That leads into a favorite question of financial professionals, “What keeps you awake at night?” The prospect or client likely shares their worries. People need to understand there are issues you can effect and others beyond your control.
6. No decision is a decision. There are instances when clients put off making a decision. They say “Let me think about it.” They need to understand if you are faced with deciding to make a change or leave things as they are, nor making a decision is actually deciding to leave things as they are. They do not think the decision is time sensitive. Is that the decision they want to make?
7. Time has a value. Stocks change price constantly. Interest rates move up and down. Years ago, when rates were falling, I recall clients calling, wanting to buy those municipal bonds I showed them three months ago. Rates had changed. They are not available, or at least not at that price because securities are marked to market. Buying a stock after it mas moved up 10% means you own the stock, but about 10% fewer shares than you would have if you bought earlier with the same amount of money. This can be explained as “The cost of waiting.”
8. Let someone else drive the bus. If you buy individual stocks or passive index funds directly, you are making the decisions about when to stay invested and when to go into cash. Those can be emotional decisions. When you work with professional money managers, you have outsourced day to day decision making. They are deciding when to pull cash out of establish new positions. You have saved yourself the time of focusing on your portfolio because the various money managers are acting on your behalf. Your advisor is overseeing the operation.
Your client might be paid at a certain level for their time. It is important to realize when they take on a task that is not paid their employer, there is the cost of their time for getting that job done. From that perspective, it might make more sense for them to focus on what they do best and pay someone else to perform those other tasks.
Related: The Disadvantages of Working With the Lowest Cost Provider
1. https://www.vikingcruises.com/oceans/video/why-viking/time/play.html#noscroll
2. https://www.dictionary.com/browse/a-little-knowledge-is-a-dangerous-thing
3. https://news.uchicago.edu/explainer/how-sleep-affects-human-health-explained#:~:text=All%20human%20beings%20%E2%80%94%20and%20almost,or%20air%20to%20our%20survival.
4. https://www.sleephealth.org/sleep-health/the-state-of-sleephealth-in-america/#:~:text=If%20you%27re%20having%20sleep,need%20to%20protect%20their%20health.
5. https://www.nhsinform.scot/illnesses-and-conditions/mental-health/insomnia/#:~:text=The%20most%20common%20causes%20of,that%27s%20too%20hot%20or%20cold