Financial Coaching and Financial Advice… what to watch out for

I was pleased to see that the post I wrote about finances for the new year received a positive response, and a friend of my wife’s actually reached out to see if I could help her set up her stock portfolio. As a licensed attorney and a formerly licensed Investment Advisor Representative, a little alarm bell went off in my head. Of course, as I have done in the past, we are always free to give free advice, but a lot of laws are out there to regulate people who are paid to give investment advice. Since this is a person I have never met, I wondered if I would be able to charge her a fee to help her set up her portfolio. And when I started looking into that, I really went down a rabbit hole.

The basic bottom line I found is that pretty much any advice about the stock market or investments constitutes investment advice. Any form of trade or compensation (ie trading a annual horoscope reading for some stock picks) could trigger laws and regulations that apply to people who are in the business of providing financial advice.

Which means the industry has a lock on the information that is given to clients. It’s the same situation we see in the health industry. Monied interests like big pharma and the medical lobby don’t want to compete with all of the amazingly effective and beneficial herbal remedies, and so you are not allowed to say anything about a natural plants ability to help cure disease. You can only give health advice that channels the profit to the industry.

Same with financial advice. Unless you are associated with a big firm with a huge compliance department, you are locked out of the game. This is always something that irked me when I was in the Industry. We would generate literally hundreds of pages of disclosures which made it clear that the firm was not liable for anything no matter what. Each account document had, I’m not exaggerating, up to twenty or so pages of disclosures in fine print. These disclosures were absolutely incomprehensible to any normal human being. Seriously. I am a trained attorney and I had my series 7 and my series 66 licenses, and I could not understand the disclosures.

Moreover, the disclosures just opened the door for giving bad advice without facing any liability. So what’s the difference between the safety of an illegal coach and a legal financial advisor? Nothing at all. Basically a legal financial advisor is paid by a big firm that papers everything with tons of CYA disclosures so that you can never hold them responsible for their bad advice, while an illegal financial coach giving investment advice for compensation can give the same advice and face huge civil and criminal penalties. What a racket!

But in my research I have learned that giving away advice in a generally available publication, like this one, is protected by the first amendment. So here, I can offer my opinions just like all the pundits, and since I have only readers (even if very few of them) and since I do not charge anyone fees for my advice, I’m free to publish my opinions, and hopefully help some people.

I can also give financial advice incidental to legal advice. So if a client asks me to set up a trust or look at an estate plan, I can advise them to put their assets into an index fund if that’s incidental to the legal advice. Lawyers always find a way to get the upper hand right?

So how does one make good financial decisions in this crazy environment? You either have to seek advice from someone who is working in the grey market, or you have to go to a financial advisor who is going to be selling you products marketed by the firm they work for.

They will simply never tell you to buy a few stocks and hold them for a long time in an account that does not charge fees. And that’s basically it!

Open an inexpensive account, use their self guided research tools, buy some stocks that you like in good companies, and hold them for a long time. That’s it in a nutshell. This is the advice that they are working so hard not to let people give!

No wonder Warren Buffett is the Oracle of Omaha. He has been giving this advice for years.

By the way, BRK-B, Berkshire Hathaway B class shares that Mr. Buffett made available so that regular investors could invest with him, meet that requirement beautifully. Or if you have about $450,000 you can buy a single share of BRK-A, the A class shares which also carry voting rights, then you will get to cast a vote if you go to the shareholders meeting.

So there. In my freely given, publicly available, first amendment protected speech, I can suggest that BRK-B is a great investment for people starting out an investment portfolio. It is itself highly diversified, so you could have up to 20% of your portfolio invested there.

Of course, the stock market goes up and down, and world events shake things up. But I think in this “free” country, you can still tell the truth as you see it without getting sued.

12-03-21 Neural Diversity

My wife Stephanie recently introduced me to the concept of Neural Diversity. For a long time I have not liked the way we constantly refer to people as having defects or disorders. People are “diagnosed” with ADHD, for example, which is Attention Deficit and Hyperactivity DISORDER. Which basically means there is a problem with the person who suffers from this unwanted condition.

But what makes this a disorder? It seems to me that this is a disorder because we take interested curious young people and stick them in class rooms and bore torture them with mind numbing boredom all day long, and those kids that don’t fit into that system have a disorder. But I think if we were to take those kids outside and encourage them to be themselves, most of them would be just fine.

Another example is Obsessive Compulsive Disorder. We throw the term OCD around as if half of the world were excessively focused on small details and unable to lead normal productive lives. But what if we were to phrase this as an ability. Hyperfocused attention to detail ability. This is something that I certainly lack! It requires an extreme effort for me to summon the patience to deal with every last small detail, but someone with this ability, can stay with a task until every part of it is perfect.

People often tell me that I have some attention deficit. What really does that mean? That I don’t like to sit and listen to long explanations of things that I get already? My weakness might be attention to detail, but my strength is speed. I typically make decisions very quickly, when I have a clear preference to what I want. So in buying a new car for instance, I can make all the decisions about exactly what I want in a few quick minutes. I don’t have to test drive every model.

To some people this seems rash. I bought a used Toyota Tacoma from a dealer I trust in Palm Beach not long ago. I told them the specifics, they showed me the pictures, I sent the wire, they delivered the truck. It took fifteen minutes. To some this seems irresponsible and rash. To me it’s just not necessary to deliberate longer than that.

Won’t I regret it? Maybe there was a better truck for a little better price somewhere else, maybe I might have actually liked a little different color. Maybe I really don’t care at all about these details, and I am happy getting it 80% right and moving on with my life.

That’s a good rule of thumb for me. The 80% rule. It basically means I can get 80% of what I want with 20% of the effort. To get the remaining 20% of benefit, I will have to put in four times the effort. For me, I’d rather get 80% of the benefit with 20% of the effort, and repeat this a few times. For someone with an obsessive compulsive ability, they can take joy and pleasure our of spending five times as much time on something as me, and getting 100% of the benefit. They can take pleasure from their careful process and attention to detail.

So this is neural diversity and it makes great teams. I can bring in Christmas trees and stand them up and hang some lights on them and get it done fast. Then those with the OCA can finish the trimming to perfection and make them beautiful. I can quickly do the 80% part, and they can slowly do the finish, and together we can get five times as much done.

So often we hear teachers or schools quote Einstein about teaching fish to climb a tree, as if that would be an obvious waste of time. And then they go on to put everyone in the same box. We all have such different ways of looking at things and accomplishing things. But we are taught that if you are not suited to sitting in a cubicle listening all day long and following countless rules and orders, that you are defective.

The system is designed to get workers into cubicles who will toil all day long as they are instructed without rebellion. School is not designed to tease out our strengths, but to stifle them. Anybody who does not fit the mold is “diagnosed” with a disorder, medicated, and stuck back in the class room. All must learn to comply.

This is really not good for a lot of people, and you or your kids may be suffering this terrible abuse while being told it’s because of your disorder. But ask yourself, is there really anything wrong with a kid who does not want to sit in a classroom all day? I don’t think so. I think the problem is the classroom itself. It’s where they teach fish to climb trees.

12-2-21

Hello dear reader, thanks for being here with me. I would like to share with you an experience I just had with the concept of Human Design, which tells me that Intuition, or how I make best make decisions, is “Sounding Board Intuition,” which basically means that I process my thoughts by speaking them. It is necessary for me to put my thoughts into words to make them linear so that I can make sense of disorganized jumbles of related ideas.

In my personal life, I have seen this manifested. I often find myself talking about something that is on my mind and find that my companion has not wanted to stay on that train for quite so many stops. When this happens, I now have learned, I am really organizing my own thoughts by speaking them, and in so doing, I hear them so expressed.

One of the tips in this brilliant little application called myHD (https://www.myhumandesign.com) is that I can journal about what it is that I am receiving.

The other day I was playing guitar in our living room, and I had a sudden urge to write a five paragraph essay about a reason that I might expect someone to read what I have written. The only reason is that I am a student and I am writing an essay to explain something that I am supposed to learn, and I am seeking to share these thoughts with other students who share the same interest so that we might learn from each other.

I have faith in the world that there are good people who will find this, and I have faith that some may benefit in their own exploration of ideas expressed here. The divine lives within each of us, and it is from this point of divinity that we all must learn to speak. In Harmony with Love Truth and Justice.

And so it is in this spirit that I am writing this open journal. This is a space where I can express the jumbled thoughts that are in my head. I don’t want to edit very much of what I am writing, because that whole process is a block to the flow of truth. If I have to stop my writing to quibble over grammar or word choices, or whatever, then I am blocking the flow of consciosness right?

And that is the ultimate point of writing in the first place. It’s to share my consciousness with yours. It’s for you to create the same vibration in your chakras as I have in my chakras. It’s not only the mental and the literal. It’s the flow of the words. It’s the heart that is behind the little nuances. Is the pace at which a train of thought might change course. It is these little signs and nuances that persist in unedited writing, and these nuances are important to me for my own learning.

So dear reader, and Sp3ncer, you are the reader who is writing this, please bear with me because it is for my own benefit that I must let the words flow as they might.

That kind of feels like the end of a topic.