A Lesson from Lunchbox

Lunchbox joined our family as a rescue from BARC last December when she was about six months old.

She was not happy about it.

She spent her first month with me hiding any place she could. She hid behind the toilet, house plants, propped open doors, and anywhere else she could stay out of view.

In investment parlance, she was displaying deep risk aversion. Coming out in the open was risky and she wasn't going to do it.

How was I going to get this risk averse kitty to come out and play?

I could have forced her, but that seemed like a good way to get scratched up and scare the living daylights out of the cat I was trying to befriend.

So, I worked within her risk tolerance.

I placed her in a small, quiet room with everything she needed so she could decompress. Periodically I would come in to offer food and treats in exchange for creeping out from behind the toilet; just a few inches at first.

As we learned to trust each other, I began to offer her more space to explore. Her confidence grew and eventually she felt comfortable enough to start playing with toys and roaming the house. I knew we were going to be ok the first time she rubbed against my leg, purring quietly.

This is her today. A very comfortable and happy cat.

 If you've never done something before like investing, starting a business, or retiring; it can feel scary. But as you settle in and learn the ropes, you may find that you are less worried and more comfortable.

Your risk tolerance will change with experience. That's why the conversation about risk is one that you and I will never stop having.

If I've done my job well, you'll be like Lunchbox, enjoying a peaceful life filled with all the stuff you like and very few worries.

Wealth Management 101

In Praise of Simplicity

All too often, clients come to me with investment ideas they like. Some are good and some are not so good, but they are often complex.

As humans, we are seduced by complexity. We fall into the trap of thinking that the more complex an investment is, the better it is.

Why own a set of simple, low-cost index funds when you can buy a hedge fund? Why buy and hold when you can trade actively? Is the market falling? Why not short some stocks?! Just think of the possibilities!

Now a dose of reality.

This type of behavior is part of the reason that some people find investing frustrating. They try everything they can think of and not much good happens.

Please allow me to make an impassioned argument for the cheap, the simple, and the boring as a clearer path to your goals.

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