Dynasty Investing: Nick Saban, Bill Parcells, Vince Lombardi

Investing
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By Kenneth J Baer

Learn more about Kenneth on NerdWallet’s Ask an Advisor

A disciplined investing strategy is something I talk about almost every week on our radio show, The Money Guru$, and I do it because I love the sound of my own voice (just kidding). I do it because with the market up 20+% YTD a disciplined approach is vitally important to our client’s retirements and our client’s financial security. Everybody I speak to about the market, from clients, to friends, to neighbors, wants to start “dipping the toe back in the water” or start “chasing” that 20% market return, having completely forgotten about discipline and diversification. I have heard from multiple clients and prospects, “I could just invest in the index and get 20% return this year.” Unless that client, friend, or neighbor, has unforeseen knowledge and higher intelligence than everyone else (hint: they don’t, and unfortunately neither do I) and can find the next big thing BEFORE it is the next big thing, then they are in for a world of pain over the long term.

A disciplined investing strategy outside of what we refer to as “play” money is what you establish when investing your portfolio. Having that discipline is the main benefit an advisor/financial coach can bring to the table (or at least any good advisor or coach). Being in the south and a big college football fan I often think of Nick Saban when I think about good coaching and discipline. St. Nick Saban (as a UGA fan I say that very tongue-in-cheek) often speaks of the process; and in this aspect of Coach Saban’s gospel, I could not agree more. Coach Saban states that everybody loves the result, everybody wants to be rich, everybody wants to be physically fit, everybody wants to have a happy home life… but the ones who achieve those ends are the ones who fall in love with what it takes to get there. They get up at 5am to work out, they spend time with their family, and they put in the hours at the office. Just as Nick Saban can’t tell you he is the greatest play caller I can’t tell you I’m the best portfolio manager or the best mutual fund picker in the state of Georgia, or in the United States, nobody can. But with your investing and your portfolio an advisor can instill in the client the discipline necessary to achieve the end goal and love the process for you.

Any relationship begins by digging into the psychology of an individual, what makes that person tick, what are that persons biggest fears, ultimate goals, etc…That is why people date before they get married, why coaches don’t blindly offer scholarships based on how big someone is, and why investment advisors have risk tolerance questionnaires (RTQ’s). While it may seem redundant or unimportant at the time filling out an RTQ is one of the most important things you can do to create a plan of action that suits you for the long term. All good advisors are trying to build a dynasty; they want you to be the Atlanta Braves of the 1990’s not the Florida Marlins of 1997.

Disciplined investing doesn’t mean that you don’t alter the playbook or audible at the line of scrimmage. Vince Lombardi ran approximately 5 plays; he ran them because he knew that if executed properly they would ultimately lead to the result he desired. Only when the situation changed drastically did he deviate from the game plan. You always adjust within the parameters of the game plan but never throw it out completely. As Bill Parcells famously said, “you are what you are.” You never become a conservative investor if you should be an aggressive investor or an aggressive investor when you should be conservative.

Take lessons from the great coaches of our generation and implement them into your retirement/investment strategy.

  • Decide on your goals
  • Inquire to suitability
  • Set up a plan
  • Come up with a time frame
  • Implement the plan
  • Practice
  • Live the plan
  • Never give up