Be a better procrastinatorPosted on January 9, 2014
I’ve been meaning to write the first blog post of 2014 for a few days now. Yes, a chest infection did slow me down. Still the main reason was procrastination. The real reason hit me whilst reading this very good Wall Street Journal article on procrastination, and how to do it better. Then I decided to use my procrastination as inspiration, and well… here is how we see procrastination getting in the way of people’s financial plans and goals for 2014.
Over the last decade of being a financial adviser, I’ve seen evidence of procrastination on people’s finances everywhere. It’s probably the biggest curse around since the inability to act and decide is independent. The decision to NOT act stops and slows many people’s portfolios to a crawl or leaves them dangerously un-prepared. Perhaps you can identify with one of these procrastinators.
1. The Too Busy
Saving: “I’m too busy right now to focus on that.” Often they have a chunk of change sitting in cash for months and years. I’ve truly lost count of the number of people I see who have had $100,000 USD sitting in an account gathering dust since the Beijing Olympics. Last year the US markets made a 29% while US dollar cash made less than 0.2%. See the difference? I had one friend who claimed he wanted to talk finance, but was too busy for the next 9 months. That’s not too busy. That’s an inability to prioritize and manage your schedule. In our experience the most senior people in an organization in China (China CEO’s and Business Owners) find it the easiest to book time in their schedule, despite their crazy hours. Why? They book it in and make it happen. It can be multi-tasking at a breakfast or lunch or in the evening with their spouse. If you are too busy to even decide, chances are you need a financial adviser to help, far more than someone who has the time and expertise to manage their money at home. Do what busy people do and assign roles and delegate.
2. The Peter Pan.
I’ll start saving for retirement next year. Often we see this decision as part of a Peter Pan complex. You know the guy. The 43 year old man-child still dating 30 year olds because “he isn’t ready to settle down yet” with an encyclopedic knowledge of all the best dive sites/parties this side of Goa. Their inability to commit to a grown-up life style much less start planning for old age is all part of the same problem. It used to surprise us that a stylishly and expensively dressed person could have no money, but you often see it with a Peter Pan. Governments in almost every rich country (Norway excepted) are not going to be able to afford retirement and health care benefits for their citizens at current projections, so if you haven’t saved enough, your lifestyle will be entirely in the hands of others.
3. But they are all scoundrels!
Many advisers would avoid listing this excuse in their article. We won’t. No-one ever says this to their financial adviser (well sober anyway) but it is a very common excuse that stops people from doing things with their finances, have no doubt about it. Knowledge is power, so learn by meeting people and reading online and you’ll find yourself protected. Make sure you don’t lock your money in a long term investment (there is no need), get all the detail on putting your money in and out, and ensure you know how your adviser is paid. Ensure you know exactly what assets you are buying. Ensure you don’t send money directly to your unregistered broker like this pink sheet scam. If you work with your adviser on a fee-basis and avoid lock-ins and stick to ETFs, chances are you won’t go too far wrong from there. Don’t use it as an excuse – take control.
4. I can’t decides
Their motto is “I have to think about it” closely followed by, “can we wait until the world environment is clearer?” There is one problem with this. The world situation is NEVER clear. But isn’t the world in financial crisis and recession still? Actually despite the headlines, the world is a pretty reasonable place right now. Yes Europe is hardly motoring and there are imperfections many other places. You can in fact make a very good return despite all that. The US equity markets had a great run 1995-2000 despite the Asian Financial Crisis. Those who sold after the Dot Com crash in 2002 missed the next 5 year run to 2007 and so on. Being scared is an emotion to be managed, not a rational reason not to invest. Recognize this and discuss it with your adviser and ensure you are well diversified across asset classes and time. But don’t ignore it and hope it goes away. The equity markets have never been Neon signs that flash “NOW ITS SAFE!!”.
We don’t mean a financial plan. We mean a plan to get started and get a financial plan in place. Plan a time to meet with advisers, consider their options and then a firm deadline to act. Treat your finances the same way you treat projects in your professional sphere. They are AT LEAST that important, arguably more so.
The plan would look simple, like:
- January – Meet 3 advisers and collect plans.
- Chinese New Year – Review presented options.
- February – Check References and details.
- End February – Make a decision and commence paperwork.
A two month plan to get your finances in order is very reasonable and achievable. Then once the plan is in place, you should meet you adviser regularly (say 3 times per year) to check in, have a coffee and make sure it is all progressing as expected, up updated as required.
Don’t make excuses for another year. Leave that for the manager of your favorite team.
About Caterer Goodman Partners
Caterer Goodman Partners is a Shanghai based wealth management firm established with a clear vision to provide a new level of personalized financial planning services for expatriates in Asia. Our financial advisors provide guidance for our clients in all areas of investment, specialising in managed accounts, money-market funds, retirement planning and alternative investments. At Caterer Goodman Partners, we offer our advice and experience to provide low cost, tax-effective and simple solutions to match our clients’ interests.
About Owen Caterer
Since graduation Mr Owen Caterer has worked with the Queensland Premier's Department in Trade Facilitation and then as a financial adviser in Shanghai from 2005 until 2010. He then rose to Senior Adviser, then Business Development manager and then to Chief Investment Officer responsible for portfolios to a value of US$280 million across Asia. Following that Mr Caterer left to found his own firm with a partner in the financial advisory and wealth management area. This focused on developing China and Asia's first fee-based financial advisory (rather than commission-based). This has grown to now have 8 staff and and managing almost US$35 million for clients throughout Asia. This business success was recognized as a finalist in the 2013 ACBA in the Start Up Enterprises category and are one of a small number of foreign managed firms to have a full asset management license in China. Owen has also been active in the community volunteering for the Australian Chamber of Commerce in Shanghai and acting as the Vice-Chair of the Small Business Working Group (2012-2014) and as the Co-Deputy Chair of the Financial Services since 2013 until the present. They have continued to grow their business and have now been selected as a small group of companies who are platinum members of the Australian chamber of commerce. The achievement they are most proud of is their efforts to reform the financial planning industry in China and push it away from a hard-sales commission driven model to a more ethical management fee and long term customer service model. Owen has a Graduate Diploma of Applied Finance from the Securities Institute of Australia of which he was a member as a Fellow of Finance for many years and also has an undergraduate degree from Griffith University in International Business. Owen's interests are tennis, running and his wife and two children. He speaks fluent Chinese, first arriving in China in 1997.
Tags: 2014, Advice, Caterer Goodman, China Expat Money, ETF, Expat, Financial Advisor, Investment, Money, Owen Caterer, Plans, Shanghai
Categorised in: Financial Advice