Russell Bailyn's Financial Planning Blog

Do you love what you do? When I pose this question to my clients about half say yes and the other half say no. From what I’ve read, the actual number of people who truly enjoy their day job is around 30%, indicating the other 70% are either miserable at work or just plain accepting it. To be fair, not everyone can do exactly what they love. Once you have a family and a mortgage, the ability to take risks with your career and “pursue your passions” can quickly dissipate. Also, once you reach a certain level of job security and income stability, change may take a backseat to sheer survival and maintenance of our current lifestyles. What I envision for an improved work-world would be more people getting fired up to take charge of their destiny and make positive changes in their life.

I believe part of the problem stems from our experiences in high school and college where we learn to “work hard” but not necessarily on things we’re interested in. An attitude of complacency evolves as we get used to working hard on projects we otherwise wouldn’t choose to. The misconception here--what you can avoid if you think outside the box--is that working can’t coincide with passion. Not only that, you’ll probably earn more money and be happier if you find something you genuinely enjoy doing.

My thought process regarding work serves as a good example of how I believe others should think as well. I fully acknowledge my passion for real estate and finance. I derive tremendous pleasure from looking at mansions, observing architecture, and speculating about the endless number of ways the inhabitants may have gained enough money to comfortably afford to live inside. As a result, I started my career as an assistant at a real estate brokerage firm, showing pricey homes to deep-pocketed buyers. This allowed me to surround myself with money and real estate. Shortly after working there, I came to realize that the financing aspect of buying real estate was equally interesting to me. Ultimately, I ended up working at an asset management firm, advising people on how to save and invest money, and finance real estate purchases. The process of adapting my passions into a career was very linear albeit somewhat accidental that I ended up where I did and when. The result has been greater success and happiness at a young age--something, unfortunately, not all of my friends and family can relate to.

The ways in which higher earnings follow job enjoyment are very natural. You’ll actually want to work more hours, perhaps 9-9, if you’re having a good time. It’s sort of like playing a video game which you don’t want to shut off. You end up working harder and accomplishing more because you’re interested. You may also notice that your knowledge and interest of peripheral topics improves as well. For example, my passion for money management has led me to learn about estate planning and insurance as well. This will ultimately help me earn more money, as I am able to advise clients on a broader scope of topics.

So what steps can you take now? First, give it some real thought. I wouldn’t recommend quitting your job and becoming a pro wrestler tomorrow simply because you’re passionate about it. Having a plan and executing it slowly and carefully will surely make the process easier. If you ultimately decide to transition out of the corporate lifestyle and work for yourself, you may find that your investments are coming out of stocks and bonds and into your own business. In my eyes, this is your best shot at “total return.” Why? You have complete control. If you get your business up and running, the money should follow. If you aren’t careful and spend irresponsibly, you could lose money.

Also, it never hurts to think about your list of contacts. People don’t do this often enough and it can really provide some motivation. When my book came out last month, I had to think carefully about anyone who could help boost sales. I contacted friends who work at all sorts of places, including PR firms, book stores, and publishers. Plenty of my friends were able to offer advice which, even if it didn’t directly earn me money, it certainly saved me some. When you’re looking to switch careers, consider who may work within that field, or may know somebody who works in that field, or may have some advice about jumping ships and how to stay focused.

Finally, don’t get discouraged. I’m a fairly young guy, but I could talk for hours about any number of distractions, obstacles and people who have clouded my vision. I’ve learned that if you’re tirelessly committed to your goals, they are much more likely to happen. Some people will help you out, offering advice, money and time to watch you realize a dream--others may try to bring you down, usually out of jealousy or resentment. Focus on the positive, not the negative.

For me, I need to constantly remind myself of the amazement I felt as a child admiring a mansion. If I can stay focused enough on my goals, eventually I will monetize my passions enough to succeed. The best part, hopefully, will be the journey getting there.

Please e-mail me with thoughts and comments.

Russell Bailyn
--
Wealth Manager
Premier Financial Advisors
14 E. 60th St. #402
New York, NY 10022
(212)752-4343 *31
rbailyn@premieradvisors.net

Securities and certain investment advisory services offered through: First Allied Securities, Inc., a registered Broker/Dealer. Member: FINRA/SIPC. Premier Financial Advisors, Inc. is a Registered Investment Advisor. First Allied Securities & Premier Financial Advisors are not affiliated entities.

Posted by Russell Bailyn at 11:52 AM | Permalink | Comments (2) | TrackBacks (0)

There are at least a dozen financial personalities which are extremely well-known. Some aren’t so much “advisors” as they are motivational speakers, authors, consultants, etc. Even so, they are commonly found in public, and on CNBC shows such as “The Millionaire Inside,” talking about how they got rich and what other people can do to follow in their footsteps. I’ve been meaning to get this post up for a while, giving my overview of the most prominent financial advisors and their varying opinions. What we’ll ultimately find is that many of these people are giving different, often contradictory advice. Perhaps they are trying to carve out a niche for themselves or separate their identity from everybody else. Regardless, the bottom line is that each of these people has earned a living through self-promotion and entrepreneurship. Perhaps this is the most important lesson we should learn from.

Staring with the buzz names:

Suze Orman - I’ve got to mention her first because she is literally a household name at this point. Even people who don’t watch CNBC, and who don’t track the markets, know who Suze Orman is. That “tough skin” and “bossy attitude” have landed her infamy, especially among women. I’ve read two of Orman’s books - The 9 Steps to Financial Freedom and The Money Book for the Young, Fabulous, and Broke. They are OK, but mostly filled with motivation, rather than innovative ideas. She tries to instill the confidence to “believe in your financial future” but often uses a simple and common approach to get there. I’ve also read that she doesn’t invest her own money in the stock market (she’s a big fan of the T-bill) but encourages younger investors to do so. This sort of inconsistency bothers fans who want their financial advisors to “practice what they preach.” Overall, I give Orman a B for financial advice.

David Bach - I really like this guy. He seems sincere and doesn’t tend to whine or complain. He is upbeat and passionate about personal finance. His signature ideas, such as “know your latte factor” and “pay yourself first” aren’t particularly original, but he presents his concepts in fresh and interesting ways. David is a traditional guy who will tell you to save through the 401(k), own a home as early as possible, and cut your frivolous expenses. Through a “coaching methodology” I think Dave is very effective. I’ve read one of his books, The Automatic Millionaire, which was a breeze. I think a truly ambitious individual who follows David’s structured approach to wealth would, indeed, become a millionaire. David also has a book called The Automatic Millionaire Homeowner. I agree with critics that he released it a bit too close to the peak of the housing bubble and some of the ideas could be financially disastrous. I give Bach a B+ for his advice.

Douglas Andrew - Doug has earned points in my book for his innovations as a financial advisor. His views are mostly opposite the two advisors above. Warner Books recently sent me The Last Chance Millionaire: It's Not Too Late to Become Wealthy for my review. I’ve go to be honest--I really feel uneasy when I read Andrew’s books. It seems like he spends the first 100 pages or so trying to “convince the reader” that his ideas are even worthy of listening to. However, after he gets into them, the reader has to be somewhat intrigued. He has all these funny but brilliant analogies about “sprinting” vs. “walking” to retirement. For example, he refers to saving through a traditional IRA or 401(k) as jogging towards retirement because you get a pre-tax (deductible) contribution but get taxed handsomely on the withdrawals (this is why you are jogging rather than sprinting). Conversely, he calls saving for retirement through insurance contracts “sprinting towards retirement” because often you accumulate funds tax-free, can access your money tax-free, and transfer money to your heirs tax-free.* Needless to say, Doug is not a fan of keeping equity in your home, an opinion which has earned him a somewhat controversial profile in the blogosphere. Overall, if you are not scared to “try something new,” Andrew might be right for you. I’d give Andrew a B- for my audience.

Dave Ramsey - Continuing the theme of self-promotion, we have Dave Ramsey. His name is not quite “household” like Orman’s, but The Total Money Makeover certainly put him on the map. Unlike Andrew, discussed above, Ramsey is opposed to debt. He calls it a “myth” that debt is a good thing and says debts simply make banks richer. His attitudes about debt are driven by a business failure which forced him into bankruptcy a few decades ago. Well, I agree with him that debt makes banks richer, I disagree that debt is bad for the average investor. At my firm, we teach that debt can be “good or bad.” Homeownership is an obvious form of good debt, one that has created countless fortunes. Ramsey also has a “religious touch” to his show--perhaps derived from his initial clientele, many of which were fellow church-goers in Tennessee. I give Ramsey a C+. His advice is fair and offered with a bit too much “arrogance” for my taste.

Ric Edelman - In my opinion, Ric is a real pro. He operates a huge financial planning firm (80+ employees) using the same “independent model” which my own firm uses. This, as opposed to the wirehouse/giant firm culture which is quickly becoming yesterday’s news. In addition to having an enormous bank of knowledge, I constantly find myself nodding in agreement with many of Ric’s opinions. Recently, Ric criticized the Financial Planning Association for only awarding the term “planner” to people who sit for and pass the CFP (Certified Financial Planner) exam. Ric, who doesn’t hold a CFP, thinks the organization is becoming too exclusive, where the real goal should be increased inclusiveness. Ric’s new book, The Lies About Money, is pretty darn good and loaded with valuable information. It’s considerably better than the Orman books I’ve read. It may be a bit too “self-promotional” but hey, why not? He’s a famous financial planner who wants more business. He also is a bit wishy-washy with his opinions, as some people may notice his two books often offer contradictory advice. That being said, I’d go to Ric for advice over most of the above, perhaps with the exception of David Bach on certain issues.

Robert Kiyosaki - I’ve had clients come in talking about Bob Kiyosaki and his book Rich Dad, Poor Dad. The truth is Bob is not really a financial advisor--more of a motivational speaker, mentor, consultant, etc. The basis for Rich Dad, Poor Dad is that people shouldn’t waste their time working for somebody else, possibly jeopardizing their financial future. Instead, people should work on building up a business which they have control of and then cleverly invest the proceeds in a place where it can continue to generate income. It’s not a terribly complicated theory, but it’s presented in nice little allegories which are fun to read. Reading his book does help you realize your faults, and it’s a quick and fun book. He also recently co-wrote a book with Trump. Is he selling himself out? Perhaps, but I’m still a fan. I’ll give him a B.

I may be leaving some people off this list. Other frequently quoted financial personalities include Phil Town, T. Harv Eker, Loral Langemeier, Jim Cramer (ha!) and Larry Winget. All of these people have interesting opinions which are worth reading. The truth is, there are many ways to “become a millionaire.” So, even if one advisor is completely opposed to debt and another is completely in favor, they could actually both be right. Getting motivated and staying on track will probably matter just as much as the “path to wealth” which you choose.

Opinions? Questions? I’m all ears.

Russell Bailyn--
Wealth Manager
Premier Financial Advisors
14 E. 60th St. #402
New York, NY 10022
(212)752-4343 *31
rbailyn@premieradvisors.net

Securities and certain investment advisory services offered through: First Allied Securities, Inc., a registered Broker/Dealer. Member: FINRA/SIPC. Premier Financial Advisors, Inc. is a Registered Investment Advisor. First Allied Securities & Premier Financial Advisors are not affiliated entities.

*Always consult a tax professional about your investment decisions

Posted by Russell Bailyn at 11:40 AM | Permalink | Comments (6) | TrackBacks (0)

I came across a great blog while doing research for my book which I’d like to share with my audience. It’s www.pensionriskmatters.com, written and maintained by Susan Mangiero. Based on the title, you may have caught on to the blog’s theme--mainly pension plans and the host of factors which affect them. The topic spectrum is fairly broad, such that anyone from a pension manager, plan sponsor, attorney, financial advisor, or even individual investor can learn something.

In an article written by Susan just last week, I learned about how the recent credit crunch is affecting institutional investors, including pension fund managers. As a financial advisor who deals mostly with individuals and small businesses, I hadn’t thought much about the affects going out 20 or 30 years of today’s credit issues and how institutional investors may be shifting their strategies to accommodate this newest area of confusion.

I recommend you have a peak at Susan’s blog and try to pick up some information and links which could help you.

Susan’s company, Pension Governance, LLC is an independent information services firm which performs research and analysis functions for the pension community. Their overall goal is to provide cost-effective resources that empower pension fiduciaries, business owners, HR professionals, etc. to make smart financial decisions about a wide range of retirement benefit plans.

Russell Bailyn
--
Wealth Manager
Premier Financial Advisors
14 E. 60th St. #402
New York, NY 10022
(212)752-4343 *31
rbailyn@premieradvisors.net

Securities and certain investment advisory services offered through: First Allied Securities, Inc., a registered Broker/Dealer. Member: FINRA/SIPC. Premier Financial Advisors, Inc. is a Registered Investment Advisor. First Allied Securities & Premier Financial Advisors are not affiliated entities.

Posted by Russell Bailyn at 04:44 PM | Permalink | Comments (0) | TrackBacks (0)