Declutter Your Financial Life

We live in a world of illusion—the illusion that the next thing is going to make us happy: the next house; the next vacation; the next relationship. In reality, more stuff doesn’t make us happier; I’ve seen this in my own life. I grew up without a lot of material things. Early in my career, I was driven to accumulate houses and cars. My wife and I are happy today, but no happier than when we had almost no money and a 1,100-square-foot house.

Our situation is common. Recently, a client with $300 million net worth came in for our second meeting. “If you could improve or change one thing in your financial life, what would it be?” I asked him.

Our investment experience is designed to clear the clutter from clients' financial lives.

He wanted to simplify, too. “Right now I have several different financial advisors, two separate attorneys, a personal tax advisor and corporate tax advisor who don’t talk with one another--which frustrates me—two insurance agents, and several banking relationships,” he said. “Guess who has to coordinate all of that?” He paused. “If you can become my air traffic controller, and clear the pattern, that would improve my life considerably,” he said. We are both pilots, and what he said made sense to me. Fortunately, it was easy for me to help him. The Carson Institutional Alliance investment experience is designed to clear the clutter from clients’ financial lives, and it starts with having one financial advisor to coordinate everything.

When our Alliance Partner advisors meet with clients, they will look at their income, future goals and aspirations, financial responsibilities and big expenses in their future, like weddings, and take them through a planning process. They’ll help them to define their life’s goals by how they want to be remembered at the end, by asking questions like: If you had 10 cars and 10 homes but no close relationships, would that be success? If you had a modest home, a modest car, great relationships with your spouse and kids and made a lasting difference that would endure well beyond your life, would that be success? Some of our clients have responded to conversations like this by taking actions such as dedicating their lives to charity or starting an orphanage.

Our Alliance Partner advisors then come up with a Family Index Number that corresponds to the rate of return clients need to achieve to accomplish all of their goals—and a plan to hit that number. Clients can view all of the relevant details of their portfolio on a personal dashboard from a computer at any time. The dashboard includes information such as 401ks, IRAs, credit cards, bank accounts, and deferred compensation. We only work with clients who give us full discretion on authorized trading, so our advisors can work efficiently. In the end, though, the clients are still in charge. They can fire the advisor if he or she isn’t performing as expected. What’s liberating is that the process allows people to make fewer and better financial decisions. It gets them out of the mindset that more is more. Often in finance, less is more.

Stop chasing illusions and focus on what really matters in your life.

The process also brings discipline that prevents “deworsification.” That is when investors spread their money around a hodgepodge of investments to hedge their bets, refusing to trust their advisor. That emotionally-driven approach leads to complexity, and often bad decisions, sparked by fear of events beyond anyone’s control.

How do investors know the system is working? It is when they have one primary financial advisor—who has chosen two custodians to hold assets in order to compare the services and transaction costs—and one banking relationship, and they are hitting their Family Index Number. With their financial lives pared down, clients find it is easier to stop chasing illusions and focus on what really matters to them and makes them happy.

Follow me on Twitter to share your comments and continue the conversation.

ABOUT THE AUTHOR

Ron Carson is the founder and CEO of Carson Wealth, one of the largest wealth advisory firms in the country, serving clients through holistic financial planning, disciplined investment strategies, and proactive personal service. In 1993, Ron launched Peak Advisor Alliance as a way to share his insights and formulas for growing an exceptional advisory practice. Ron also founded Carson Institutional Alliance, a partnership that equips elite advisors with the tools they need to communicate with their clients on a deeper level including co- sourced investment management, an integrated marketing strategy & customized materials, an on-demand succession solution and more.

He is one of the most celebrated and respected financial advisors and executives in the profession and is a sought-after speaker, thinker, and investment strategist. His bestselling books include Tested in the Trenches and Avalanche. Ron has written for, or been covered by, US News & World Report, CNBC, The Wall Street Journal, Forbes, The Washington Post, Barron’s, Investment News, RIZBiz, and Omaha World Herald.

If you'd like to learn how to improve your work-life balance—while maintaining growth for your business—in 15 minutes a week, pre-order your copy of The Sustainable Edge now. For a limited time, bulk pre-orders are eligible for several valuable special promotions.