2018 1st Half Year Report

2018 1st Half Year Report

“Life is really simple, but we insist on making it complicated” – Confucius

The first half of the year is over, and the year has been up and down on an almost weekly basis.

There are reasons to be positive, and pessimistic.

In this month’s video, I outline why you should be optimistic, and reasons why you can be concerned. In most areas of life there are pros and cons, but the question is which one wins out on balance.

In this case, and I outline this in my video, the positives outweigh the negatives.

But that being said, the fundamentals of reaching your goals remain the same–diversify, have a long term vision, and keep your emotions in check.

 

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Transcript of the video:

Hi there. Mike Brady with Generosity Wealth Management; a comprehensive full-service financial services firm at headquartered right here in Boulder Colorado, although I’m recording this video from our cabin in Wyoming. Hopefully you had a wonderful 4th of July, maybe you took the whole week off. I came up here for the whole week it’s kind of an annual tradition and it allows need to get some business projects done, but even more importantly to get away from the hustle and bustle of the daily life, get my emotions in check, which is of course one of my big recommendations for my clients and for investor.

I’m going to cut right to the chase of today’s video because it’s going to be a mid year report, but the fundamentals of investing and being successful in my opinion have stayed the same, which is to stay diversified, be long-term and keep your emotions in check. That’s one of the fundamentals and I just think that that’s absolutely important.

Today I do want to talk about what’s happened so far and talk about the reasons for being optimistic or pessimistic for the rest of this year. Nobody knows the future. I certainly don’t so this is my analysis so this is one of the reasons why those three that I brought to you, be diversified, long-term, keep your emotions in check are so very important because when someone says they know absolutely what’s going to happen, the impact of this policy or that policy they know exactly what’s going to happen they’re lying to themselves, they’re lying to you and so I don’t think that anyone is well served by that particular approach. So here so far this year the market was up pretty dramatically in January, continuation of low volatility and good market in 2017 coming into 2018; February and March very difficult. And then the second quarter recovered as some of that, but really was really more in general in the unmanaged stock market indexes and bond indexes basically a flat year so far. Plus or minus a couple percent in my mind is flat.

I’m going to throw a chart up on the screen where you’re going to see is we’re in a consolidation period. The markets go up, down and sideways and so far this year it’s a sideways. It’s always irritating to have; everybody wants the up with no volatility and that’s just not the world that we live in. What we’re seeing right now is a time where patients makes a lot of sense. Those are the people who are rewarded long-term and so remember that as you look at your particular investments and your particular approach.

Now, I’m going to put a number of charts up on the screen and I’m going to talk about some of the reasons to be optimistic, some of the reasons that things could look very good. So let’s go through them. The first one is strong U.S. economy and that’s shown a really above average pace with tax cuts, higher government spending, ultra low unemployment rate, the biggest increase in business investments in years, we’ve had an earnings per share that’s very high and the Fed is normalizing monetary policy, and the last is equity valuations are not as pricey as they were just a couple of years ago. And so this is a good reason to be optimistic and in my opinion, I’m not going to lie to you, the pros outweigh the cons. Here are some of the cons: The price of the oil is back up high in the last year or two; it’s around $75 for a barrel. However, I will also put it into context that it is where it was three years ago and lower where it was four years ago and I don’t remember the stock market being horrible during that time frame. Always up and down that’s just part of the deal, but it is not a travesty. Excessive fiscal stimulus in a full economy could lead to an overheat. Got it. And then the third is the tariffs, which I want to talk about here today.

Tariffs over the last number of administrations they have talked about how the barrier to entry, some of the costs of doing business with other countries is greater than it is here. It’s easier for people to import it into the United States than it is for us to export to other countries. That’s what the tariff discussion is all about. So the discussion is out there, has been out there for a long time, the question is what do you do with it? So one of the reasons why, and I’ll jump to the conclusion on this too, while it’s an irritation it’s a wrench into all of the pros that I just brought up it’s not necessarily a deal killer and the U.S. could actually win on it. Some people say they know absolutely this is horrible for the U.S. or they say it’s absolutely horrible for other countries. The bet that President Trump is making is that others will blink before the U.S. will or before he will. And so one of the reasons why that might be the case is the reliance that other countries that we have had these discussions with and imposed some tariffs on are much more vulnerable than we are. Their stock markets are not doing as well as ours are and their economies are not doing as well as ours. We are the strongest out of all those that we have imposed these tariffs on. Our exports are 12 percent of our economy, whereas in China it’s 20 percent, in Canada it’s 1/3 and in Germany it’s 50 percent. They’re much more reliant on exports to us and to other countries as we are exporting to others. So we only do 12 percent of our economy is based on exports from the United States because we have such a big country, we have such a vibrant interstate commerce from city to city state to state that we are less vulnerable than many other countries.

And so that’s why when I weigh something negative like the tariff discussion and wars against all of the positive it’s the net still going towards the positives than it is on the negative. If you’re only focused on the negative, sorry you’re going to be very disappointed and of course you’re quite dark about that. I on the other hand want to balance both of them and that’s why I’ve come out net on the positive. So I’m optimistic for the rest of this year. I’m not making any changes wholesale in client portfolios, in my discussions with clients, et cetera. Sticking with those particular fundamentals it’s served us well the first half of the year, I think it’s going to serve us well the second half as well. Be diversified long-term, be cool, cool as a cucumber.

Mike Brady; Generosity Wealth Management; 303-747-6455. Give me a call at anytime. Thanks. Bye bye.

 

 

2016 Year End Recap

2016 Year End Recap

“Happy Families are all alike; every unhappy family is unhappy in

its own way” – Leo Tolstoy in Anna Karenina

I’ve been meeting with clients for over 25 years, and every year is there seems to be some major event that causes concern for everyone.

This year, it was the presidential election. One thing about the election that everyone seems to agree on is that we’re glad it’s over, even if we disagree whether the outcome was good or bad.

At the bottom is my end of the year video, where I outline my thoughts on 2016, and also what current conditions might mean for 2017.

I highly recommend you watch it, and if you have any questions, please don’t hesitate to give me a call. I’m here to help and serve.

Year to Date Update

Year to Date Update

We’re halfway through the year, and it’s been a volatile one.

Brexit was just 1.5 weeks ago, and don’t forget that horrible January.

And, this is an election year.

What are my thoughts about this year, the big picture, and the election year in particular?  Click on the video (6 minutes) for my thoughts.

Transcript:

Hi there.  Mike Brady with Generosity Wealth Management, a comprehensive, full-service financial firm here in Boulder, Colorado.  Although I have to admit it’s July 4th weekend I’m recording this on Sunday the 3rd and I’m at my Wyoming cabin.  You know with today’s technology, internet, cell phone I can run thing just as well here at the cabin as if I was there in Boulder or in downtown New York.

Let’s talk about the year to date.  Give or take it’s about breakeven.  When you look out a year same thing.  It’s plus or minus a couple percent which is how I define breakeven.  When we look out three years and five years that’s different.  The unmanaged stock market indexes are positive.  So far in 2016 this is a great example of why you want to have a mix of stocks and bonds and be diversified.  Unmanaged bond indexes have done quite well this year as people have done the flight to safety.  And so I think that’s a good thing to have in your portfolio especially this year.

I’m asked a lot about what do I think this year is going to produce now that it’s an election year.  This is an interesting election.  I have to admit I’ve been in many different elections and this is kind of an interesting one.  I did all the stats going back to 1976 and that’s about ten different election cycles, the last one being 2012, the first one being 1976.  And on average the election years were positive.  Eight out of ten were positive years.  And they were followed by the next year on average – so the first year of a presidency that was very good.  I mean out of the four years for a presidency it was the second best.

So Peter Lynch one said that more money has been lost avoiding corrections than was every lost in a correction.  And what that means is if we allow our motions and our fears to dictate what we do, to get into that particular game of investing, et cetera, then that’s going to have long term negative consequences for us as investors.  And I have to just tell you that as a financial advisor I look at some of my peers, other advisors, other investment professionals, a lot of them play up to that fear, up to that emotion because some people have been so scarred from 2008 that every little blip that happens all of a sudden it’s 2008 again.  And that’s just not true.  I mean 2008 just to put it in perspective was a very unique event.  I mean since 1926 it was the top one or two worst events.  So it’s not like it’s repeated every six years although it could.  I mean I don’t know the future any more than you do.

But one thing that I do want to impress upon you is that let’s look at the big picture and not overcomplicate things.  I had a boss frankly who everything was complicated.  If something was complicated in his mind that meant that it was good, that it was obviously sophisticated or that this was something that we could show in add value that we’re adding value to a client.  If something was simple he’d make it complicated and in my opinion I never agreed with that particular philosophy.  That’s not to say that some things that are complicated are bad.  It just doesn’t mean that’s necessarily good or that things that are simple can stay simple.

What I might ask you is with all the different options that are out there at this point do you believe that the stock, bonds, mutual funds, investments the U.S. is something that you would like to invest in for over a 5, 10 and 20 year time horizon.  If the answer is yes then these blips are things that you shouldn’t lose too much sleep over.  These 6 month and these 12 month periods, even two years, are not things that should cause you to stay up at night.

Even when we’re looking at election years and years afterwards at the end of the day either your conviction is that you believe that things are good from an investment point of view because the President, he or she in this case, is not a benevolent despot who gets to choose everything that’s right or wrong in the United States.  It’s a very complicated economic and political system of which they absolutely have the biggest pulpit out there.  However, you should not make your determination solely upon whether your guy or gal is the winner in the particular election.

I could sit here and give you my prediction for the rest of the year.  I’m not going to do that because then that helps propagate that quarter or 6 months as something that we should look at.  And so I’m not going to do that.  As a matter of fact going forward I think I’m going to stop doing that because I want to keep your eyes on the big picture and the things that are going to probably be the biggest advantage for you which is keeping things in the long term, keeping diversified and keeping your emotions and being disciplined going forward.

My name is Mike Brady.  This was my year to date, quarter end review.  I hope you’re doing great so far this year.  My phone number is 303-747-6455.  You have a great day.  See you.  Bye bye.

 

 

Investor Behavior in Up, Down, and Sideways Markets

Investor Behavior in Up, Down, and Sideways Markets

The 1st Quarter 2016 is behind us, and boy was it a volatile one!

My video today is addressing the very common human behavior when things don’t seem to be moving in the direction we want.

When we look at the past 2 years or so, we’ve been in much of a “sideways” market, seemingly without a lot to show for it. The tendency for many investors is to “do something”, but I highlight in the video that proactively doing nothing is an active choice! Don’t be lulled into a false sense of achievement and unnecessarily move things around just so you feel like you’re doing something.

Another good video (if I do say so myself!)

Click on the video

 

Transcript:

Hi there.  Mike Brady Generosity Wealth Management, a comprehensive full service firm right here in Boulder Colorado.  Want to talk about the first quarter of 2016, but I also want to talk about the human behavior that we bring into up, down and sideways markets.  When we look at a two and a half year time horizon it’s really been a sideways market interspersed with some down and markets in between there.  And so what does this really cause many of the average investment investors to do?  And I want to talk about that, also the non-linear nature of markets.

Let’s talk about the first quarter 2016.  I’m going to put up on the chart there the unmanaged stock market index, the Dow Jones, the most common, but because it’s the best but only because it’s the most common.  What you’ll see is that it went sharply down for about six weeks, all the way down to about 15, 666, and then now it’s on it’s way closer to 18,000.  Who knows if it’s going to hit 18,000.  But that’s a huge variance there.  And if any kind of a diversified portfolio with some stocks and some bonds mushed together probably didn’t see the huge down like that 100 percent stock market index, but also probably didn’t see the huge up on the way up as well.  And so it’s good to remember that most people don’t have 100 percent of their portfolio in just stocks or the Dow Jones so it’s hard to always correlate exactly what you’re doing with some kind of an unmanaged stock market index.

If you want 100 percent of the market one way or the other there are various indexes and ETFs that you can go into, but the reason why we have portfolios or why most people have portfolios is they like the dampening effect so that they’re not getting all of the down or all of the up.  So so far this year, give or take a few percent, it’s about break even after being sharply down just seven weeks ago.

I will tell you that I did a video about two months ago and at that point I was very calm.  And one or two clients that I’m very close with said, “Mike, how can you be so calm?  Every day it seems like there’s all this bad news and the market lost 200 points here and eight days in a row had lost or however many days in a row, how can you be so calm?”  And my answer is after 25 years I’ve seen, I’ve seen ups, I’ve seen big swings of multiple days and weeks and months of being up.  I’ve also seen downs.  I’ve seen 2000, 2001, 2002 that was three negative years in a row.  I mean I’ve seen this.  And as a matter of a fact I kind of expect at some point that there’s going to be declines.  That’s just part of the deal and so that when it happens I’m not so surprised.  Markets are non-linear and what that means is just because it’s down for one month doesn’t mean it’s going to be down for the entire year, or if it’s down for a week doesn’t mean the next week it’s going to be down.  And, of course, the opposite is true too.  Things go up, they go down and they go sideways.  And one of the dangerous things is when it is sideways, meaning that when you look back a year or two or even three and you haven’t really made much money as an investor or a portfolio and it’s just kind of middling around, there’s this tendency to want to do something.  I’m going to put up quotes up there “to do something”.  There’s obviously something that we’ve got to do.  And I would say that idling is part of the deal.  I mean it’s sideways, down and up and the important thing from a behavior point of you is to be cool as cucumbers when it’s down, if you believe that over the time horizon, and hopefully the time horizon is at least five years, that it will be higher.  It’s absolutely cannot guarantee.

All I can really say is I’m going to put a chart up on the screen and what you’ll see is on the second and third grouping of bars that a diversified portfolio has always at least broken even over a five and ten year time horizon going back to 1950, but it could be different in the future.  Once again, by definition the future is unknown.  That’s why they call it the future.

So, that being said, I think that it’s important, particularly when it is a sideways and maybe we’re not making much money we’re just in a holding period, not to just get so anxious and get frustrated and try to be moving around because one of the other things that I’ve learned is that people want to move so that they feel like they’re doing something when sometimes the calm professional is saying we’ve looked at everything and doing nothing is a proactive choice.  Not moving things around just to feel like we’re doing something but really not getting anywhere, let’s avoid that.  Let’s avoid the false feeling and the false hope of moving things around just for the sake of feeling like you’re doing something.  And I have to tell you that I think that some of my colleagues, my peers sometimes do that.  If they’re not moving things around clients feel like they’re not doing anything or earning their fee or whatever it might be and I think that does a disservice to the client; that does a disservice to the investor.

That’s all I have for today.  I wanted to make it real short.  I’ve got all the quarterly statements out hopefully by the time you get this newsletter.  I’m also taking a – I’ve sent an email out to all the clients that I’m taking a two week vacation, first one in a couple of years.  And so I might be a little slow on responding but I will be able to respond via email and phone if necessary.  But that being said, if you could hold off until after April 14 I’ll be happier and hopefully you’ll be just fine.  303–747–6455, always open to any concerns, questions, criticism, anything just give me a call; I’d love to open up the dialogue.  Mike Brady 303–747–6455.  Thank you.  Bye bye.

Do You Have an Investor or Trader Mindset

Do You Have an Investor or Trader Mindset

The last month has been interesting to say the least.  This is a wonderful time to ask yourself

Are you an Investor or a Trader?

The mindsets are completely different, leading to different behaviors, and different outcomes.

I ask this question in my video this month, talk about the differences, and let you decide by the end which of the two you are.

So, what do you think?  Are you an Investor or a Trader?

Click on the video

Transcript:

Hi there.  Mike Brady with Generosity Wealth Management, a comprehensive, full service financial firm here in Boulder, Colorado. Today I’m going to ask the question and by the end of the video hopefully you’ll answer it for yourself.  Do you have the mindset of an investor or as a trader?  Because they are two different mindsets.  An investor is long term, a trader is short term.

Let me talk about a few things in order to help you answer that question.  When I talk with people – when the market goes down and I talk with people and perhaps I hear some trepidation, some concern, some worry, I think unconsciously they’re worried about losing everything.  Their hard earned savings all gone.  They go from having money to nothing.  Unconsciously even if they don’t even know it themselves that’s what’s going through their heads.

Let’s talk about some situations on TV or in the newspaper that you’ve heard about where that has happened because that does happen periodically.  First off it’s usually a sweet lady or a sweet couple, okay.  And they’ve invested everything into maybe a single stock.  They’re completely undiversified.  And many times that might be something that is exotic.  They invested everything in some gold that maybe their brother-in-law or their son-in-law convinced them to buy.  Or maybe it went all into one sector like technology or Internet.  Or maybe they bought something like coins and then they lost it all and they found out that it was a scam.  Many times included in this story is non-liquid.  Maybe they bought into a shopping mall and that shopping mall, you know, come to find out is filled with asbestos or something bad and they lost everything.  Or it was some kind of a private investment that went belly up.  And so I think that these are some of the most common themes when you see people lose it all on TV or when you hear about that.

So therefore let’s talk about that.  What are the lessons from it?  One, hey if you’re a sweet lady and couple you can stay that.  That’s cool okay.  But all the others we can avoid, okay.  Let’s not go into individual stocks.  I am a firm believer in diversification and while we’re in a general decline market diversification does not guarantee against losses, okay.  That’s one of the disclaimers we have and it’s true.  I’m going to talk about why diversification does make sense.

You shouldn’t go into things that are exotic, okay, in my opinion.  Gold and tech and coins and things of that nature.  Instead invest in those things that are the market.  I talk about the general stock market and the general bond market whatever that mix might be for you specifically in your situation.  And I believe that liquidity is very important.  And understanding that when you are illiquid if it turns against you you can’t get out of it.  And so knowing what your liquidity is and how quickly you can convert to cash if you feel that you’ve erred in our choice of those things.

So one of the other things that I think people do is they feel that the market is linear, okay.  And when I mean linear that’s, of course, means a straight line.  And it just doesn’t work that way.  When a market has gone down five percent it does not mean it’s going to continue to go down another five percent.  You can’t annualize.  You can’t take a short time and make it a big time.  And, of course, the reverse is the same thing.  You can’t take well the market went up five percent so therefore it’s going to end in a year at 10 percent of 15.  You just can’t do that.  Just because it went up doesn’t mean it will continue.  Just because it went down doesn’t mean it will continue.  As a matter of fact, the market has a tendency and I’m going to show a graph later on to go up and go down.  And so therefore if you believe that Point A is here and Point B is here, okay, further out then it’s going to be wavy along the way.  And so the higher it goes the sooner it is to a downturn.  And the sooner it is when it’s going down the sooner it is to an upswing.  So that mentality I think is very, very important.

But let’s pretend like what we’re seeing right now is 2008 again.  Let’s pretend like that’s the situation, okay.  I’m going to put up on the screen there a graph and I’m going to try to highlight it, make it really big.  But if you had invested in the S&P the highest point.  You had three different portfolios there, a 60 percent stock and bond or a 40 percent bond and stock or a 100 percent stock market index the S&P 500.  You invested spectacularly in October of 2007 at the worst time.  And you went through the decline of 2008 which was the worst decline in the S&P 500 going back except for the early 1930s, okay.  So it was the absolute worst and definitely in our lifetime, for most of our lifetimes.

And so two year breakeven on a 40-60 split.  You know you had absolutely horrible timing or you invested and then you gave some of that up, some of those gains.  Two years later you broke even, okay.  Okay.  I mean if your time horizon is two years you shouldn’t have any investments in my opinion except for cash or extremely short term instruments of some type – CDs, whatever it might be.  But even if you’re retiring today or you just retired hopefully your time horizon is many decades.  I’m hoping you’re not dying in two years or three years or four years.  None of us know of course the future but hopefully we are going to have many many years, okay.  And so that is very important.

If you had a 60 percent S&P 500 and a 40 percent bond index your breakeven was three years.  I mean that’s on the worst in our time, okay.  I’m going to put up on a chart there the time, diversification and volatility of returns.  You’ve seen this before if you’ve paid attention to my videos which I certainly hope you have.  And so at the first band of bars is one year, second is five years, third is 10 years and then 20, okay.  And so the first bar is 100 percent stock market index.  The second one is 100 percent bond index and that kind of ugly brown is a split of 50-50 stock and bonds.

So what you’re going to see is going back to 1950 – 1950, okay.  That’s 50, 60, 64 years, 65 years, okay.  We just finished a year.  Sixty-five years of returns a diversified portfolio of stocks and bonds squished together like that.  The worst that you’ve done – the worst – not the best, the worst is one percent on average per year.  And you can see from that previous chart that sometimes there are years where you’re negative, okay.  I mean you are not entitled to positive returns every year when you are invested hoping to get good positive returns over a long time horizon.  That is part of the deal.  If your time horizon is very short well that might be different.  You’ve got to consider why the heck am I in some stocks and bonds if I need this money in a very short amount of time.

As you go out 10 years and 20 years the same, you know, has it normalizing.  It continues to go – the absolute worst is making a couple percent a year on average, okay.  That’s the worst.  And the best is of course much better.  This includes that 2008 timeframe.  This includes the tech bubble.  This includes 1987.  This includes the 1970s which were pretty horrible.  I was alive in the 70s but I was a young kid.  I’m 47 so – almost 47, okay.  This week.  Send me a birthday card.

So I want to show a graph right there.  You see it up on your screen.  This is going back to 1926 and this includes the Great Depression.  This includes the great recession, okay, of 2008.  And what you’re going to see is 73 percent of the time we had positive years.  Three out of four, okay.  And then when we add in that one bar there of zero to 10 percent this is how the year ended by the way.  Almost nine out of ten years are positive.  Not 100 percent.  You can see on the left hand side one and two years, you know, out of 89 years were the really bad ones that we really, really hate – negative 30 and 40 and 50 and 60.  Oh, those are horrible.  We hate those.  But they’re very infrequent.  That’s the point, okay.  And even when they do happen, even when they did happen if you had a diversified portfolio then the recovery period was very short.  And so these are one of the things that we as investors have to understand.

Going forward it could absolutely be different.  Anyone who tells you that they know the future is lying to you and trying to sell you I don’t know – a sack of potatoes or something.  And I’m not trying to do that to you.  I’m trying to be as realistic as I can understanding that we live in uncharted territory.  And by definition the future is uncharted territory.  Which is one of the things that I want to talk about.  I mean every once in a while someone will say to me yeah, but it’s different.  I mean you can’t really say that the 1950s and 60s are the same thing as 2015 or 2016.  Yeah, absolutely.  I totally get it.  And 2008 is not the same as here, okay.  Every year is different and every year there is always something whether it’s the downgrade of the government by the S&P, you know.  The trip way down.  Whether or not it’s a war.  Whether nor not it’s the concerns about a war.  Whether or not it’s quantitative easing or it’s not or it’s tightening.  Every year I could sit here and point out a year and I’ve been doing this for 25 years.

I like to think of it like the presidential election.  You know how every four years you hear well this is the most important election of our lifetime.  I don’t know.  After a while it starts to lose its impact on me because if every four years is the most important of my life, darn, you know, they’re all important.  I get it, okay.  To say that they’re all the most important and it’s the same thing with an investment, right.  You looking at it from a long term point of view and do you believe that Point B, that future, is better than it is today.  If the answer is no then that’s your own choice to do then why do you have any investments whatsoever?  I mean really why do you have any?

So I believe that every year is different, okay.  However, history does have a tendency to repeat itself and that’s what we are working on.  And I believe that I’m still very bullish on the markets and I do believe in diversification.  Gold, silver, commodities.  I don’t like them, never have.  Essentially they are very, you know, let me just tell you a little insight.  They have a tendency to go up with inflation except when they go opposite, okay.  And they really go up when the stock market goes down except when they go down with the stock market too.  I mean I hate the correlation.  They have a tendency to have a mind of their own and I’m just not – and I don’t think that true investors are going into something that you have no control over like a commodity of gold and silver and things of that nature.

Let’s not forget that the pundits that you see on TV, that you see on any of the cable news or at the end of the day, their job is to get you excited.  They’re sort of like when they cover – like a politician.  A politician who’s trying to win election is there for hey look at me – bright, shiny light right on me. Their job is to be entertaining and to tell you maybe what you want to hear.  Maybe get into your fears and also feed your hopes, okay.

I’m like a policy wonk, okay.  I’m sometimes boring.  You’re like gosh Mike, you know, why do you have to say that when it’s exciting to get maybe ignore and then overreact.  And that’s just not me.  I’m here to try to be as upfront and try to be as non-emotional as I can.  Still being passionate – hopefully you get that as you listen to me.  I have passion for what I do but I want to be non-emotional.  And so getting back to my original question an investor is someone who looks at things from a long term point of view, understands that the decisions that you make, your behavior, is probably going to – your behavior and how you react to it or not emotional as you look towards to the long term.  You know what?  Ups and downs are a part of it.  A trader on the other hand is always looking for well what about this and what about that.  Always looking for maybe a short cut, maybe a get rich quick scheme.  And also worried about these fluctuations that are going to happen.  They will always happen and they always have, okay.

And so I want you hopefully to be an investor versus a trader.  But if you want to talk about it some more you give me a call.  (303) 747-6455.  Generositywealth.com.  Great to talk with you today.  One month, one six months, one year.  You know what?  When your time horizon is multiple years and hopefully multiple decades it really doesn’t matter.  In the whole scheme of things it doesn’t matter.  Find something that allows you to stay with your plan.  That’s what’s important I think.  Anyway, have a great day.  We’ll talk to you later.  Bye bye.

Showing Your Clients They are Truly Appreciated

Showing Your Clients They are Truly Appreciated

“It’s my belief that people want to be treated with respect. And that is a key part. When you don’t have respect between people that’s where there’s a lot of breakdown” – Michael Brady

Full Podcast Interview – Mike Brady and EPN

Interviewer:   This is Eric Dye and once again welcome to Enterprise Radio your EPN channel for exclusive interviewers with entrepreneurs, small business owners and some of the world’s top executives who are having great success.  This is where they share their latest creations, products, services, experiences as well as business strategies and insights that can all help you build your business leading through your business and personal success. Today, once again, we are speaking with Mike Brady; founder and president of Generosity Wealth Management, a mission-based wealth planning firm that works with the clients to develop comprehensive long-term diversified strategies to build their wealth.  Mr. Brady welcome back to Enterprise Radio.

Mike Brady:   It is my pleasure to be here.  Thank you.

Interviewer:   Yeah.  And the pleasure is ours as well.  Good to have you back.  Hope you’re off to a great start to this year.  So first of all, for starters, tell me a little bit more about your work as a financial advisor and how you work with your clients to establish and meet their goals.

Mike Brady:   Yeah first a little bit about me.  I’m 24 years in the financial business, 16 as a junior partner in a firm and seven as a sole entrepreneur, as the founder of Generosity Wealth Management.  And I bring that up because it really was a great experience for me because when I was a junior partner I was able to really work on my skill set of working with clients and I was able to bring that into having my own firm and running it my way with my own vision and my own goals.  And so when I hear your question about how do I work with her clients to establish a meet their goals, I think of it in two ways.  I mean the clients have goals and I help them create them and work towards those goals, but I also have my own individual goals, which, of course, should complement of theirs.  Goals are individual and one nice thing about as I work with clients is they get to be the entrepreneur of their own life.  I mean I believe that 80 percent of reaching your goals is defining them and having a plan for some of the speed bumps along the way.  But you also don’t want to get distracted by bright shiny objects.  I joke squirrel, if you’ve ever had a dog that gets distracted, squirrel, squirrel, well our life can be that way as well on the path towards our goals.  And so I think that it’s important that clients understand that you have to define them and really have a good plan for how to get there.  As an advisor I have goals as well and one of my goals is I want to make an impact on their lives and I also want to make an impact in my community.  And one of the ways that I do that is with long-term goals with the clients that is trusting – long-term relationships, excuse me, long-term relationships with clients that’s trusting but it’s fun for both sides.  And so this is one of the goals that I go into and I define it very clearly with clients is saying this is what I want out of our relationship is long-term.  It will be fun.  It will be interesting.  We’ll go through this together, but also let’s make sure that I have the ability to have an impact in your lives.  That’s how I think of establishing and meeting goals.

Interviewer:   So how do you secure new clients and build lasting relationships with these clients?

Mike Brady:   Well, I’m incredibly involved in many different organizations.  I’m on a number of different boards.  I’m involved in Rotary.  I’m involved in so many different things that I have a passion for.  And I think that that’s really important that you’ve got to do something that if you where to get no compensation or no clients or any referrals from you still would do it with 110 percent passion.  And it shows in each one of the organizations I’m involved in I make an impact on that organization and the people who are involved in that get to know me.  And because of that they think highly of me.  They get to know me.  They get into a relationship with me on a personal level, which then transcends into the business world as well.  I mean everywhere I go I’m making friends and being engaged in the world.  I mean even if that’s the barbecue in my neighborhood.  I mean I’m out there; I’m talking; I’m genuinely curious about other people.  And since I’m upfront and honest in my non-professional world I think that people get the idea that and understand that I’ll be the same in my professional world.  And so the way that I secured new clients and build lasting relationships with them is by being out there really the networking.  Touching them.  Rubbing elbows and being who I am as authentically as I can and that draws people to me.  And so because of that I’m constantly getting people who say how do I become a client of yours?  And it’s a great honor when they ask that.

Interviewer:   Mike, I would be curious what do you do to give your clients a positive overall experience?

Mike Brady:   Well, communicate, communicate and communicate.  It’s my belief that people want to be treated with respect.  And that is a key part.  When you don’t have respect between people that’s where there’s a lot of breakdown.  And so therefore I try to set expectations with people; I talk to very plainly and honestly about what I can and cannot to do; absolutely don’t overpromise.  Unfortunately we live in a world where whether it’s a TV commercial or it’s a salesman in a store, many times there’s an overpromise, an over expectation and it’s the lack of exceeding that expectation that gets people very frustrated.  And I’m very interested in ensuring that people have a good positive experience by being in partnership with them and being in relationship.  And I’ve use those words a couple of times in our conversation here, but that really is a key.  We don’t know what the future holds.  Nobody does.  But I for one, and one who admits that very humbly with a client, but says we’ll go through this together.  We’ll be partners.  We’ll figure this out together.  I can’t guarantee exactly what problems we might have to overcome in reaching your goals.  I might not know exactly what the outcome will be but our intention will be to do the very best that we can together in a relationship.  And communicate, communicate, communicate is what I said at the beginning because the client can’t read your mind and I can’t read their minds and so therefore part of relationship, part of partnership is communicating this is what I’m thinking, what do you think?  It’s a fluid relationship to figure this out together and I think that that leads to a positive overall experience.

Interviewer:   Today we’re joined by Mike Brady founder and president of Generosity Wealth Management; a mission-based wealth planning firm that works with clients to develop a comprehensive long-term diversified strategies to build their wealth here on Enterprise Radio, a part of the Entrepreneur Podcast Network.  And you can also follow the show on Twitter simply @EPodcastNetwork.  Mr. Brady, why is it important to show your clients that you do appreciate them?  Get into that some if you would.

Mike Brady:   Absolutely.  Well, the first thing that I would say is I think it’s the kind thing to do.  Hopefully it’s a lifestyle and an attitude.  I mean hopefully you show appreciation for your family and your spouse and the person who is serving you food and the people that you see walking down the street.  So I think appreciation goes a long way in all aspects of our lives.  In our businesses I think that showing appreciation is a way of showing respect.  And respect with another person does build some loyalty.  And so one of the big benefits of showing appreciation is loyalty, but also some fun. I mean many times people think of the people that they work with professionally as it’s just business.  No, we’re human beings.  We’re emotional beings as well and let’s have some fun.  Let’s be very serious about things absolutely.  But let’s also understand that life is to be enjoyed and let’s go through this together so that it’s not so much work that you never want to do it.  Some ways that I’ve shown appreciation for clients, a lot of times people have an appreciation dinner and wine and cheese and things of that nature and that’s not really me. That’s not who I am.  That would be disingenuous if I did something like that for my clients who know me.  So they know that I’m a science-fiction kind of nerd and I had a Hobbit movie and I rented out the whole movie theater.  And most recently Star Wars A Force Awakens, I secured the entire movie theater and invited my clients and my friends the night before it opened.  It opened on a Friday; I had it on a Thursday for a prescreening.  That was one way that I showed some appreciation.  But, of course, on a daily basis I show clients that I appreciate them by giving them a call, by listening to them.  One the client said that her goals were to travel the world.  And I immediately got done with that meeting, went to Amazon and bought a book and had it delivered to her.  I think it was 500 Great Places to See Before You Die.  I mean it was all a book about wonderful places around the world.  And that showed her that I was listening to her, I appreciate her goals and that I want to be a part of helping her achieve those goals.  That’s I think some of the ways from big events to just daily events that we can show that you appreciate them.

Interviewer:   Certainly some good stuff right there.  Certainly appreciate you’re sharing that.  Lastly, what are some tips you can give it to entrepreneurs on building new client relationships and improving upon consisting ones?

Mike Brady:   Yeah.  Well for new client relationships I believe that chemistry is important.  So if it’s not there don’t to go forward.  I mean it’s easy for me to say because I’m in a place in my business and in my career where I’m able to pay the bills and do fine without trying to convert every single person who comes in from a prospective client into a client.  But I believe that long-term you and the client are better if there’s chemistry, you guys are talking the same language and you just feel comfortable with one another, however that is.  You know when is comfortable and when it’s not.  And so therefore you’ve got to be willing to walk away.  You don’t have to put a square peg in a round hole, willing to walk away and make sure that it’s right for both.  And make small promises in the beginning and keep them.  I’ll call you tomorrow to schedule that appointment.  Well, that’s real important.  That’s the first promise you might make to that person.  Or you know what, I’ll send you a link with directions to my office.  Well, that might not sound like a big deal but that’s a promise.  And so if you’re not keeping the small promises how are you keeping the big promises?  I like to talk about expectations about communication early.  I communicate with them early and often.  And, of course, once they become a client I have to continue that expectation and provide value at every interaction.  The last thing I’ll say maybe about new client relationships is to differentiate yourself even to the degree of how you’re similar.  I read this great book, and this is actually how I would give advice to someone about existing client relationships, by Scott McKain called Create Distinction.  And I have no idea of who Scott McKain is except I saw him speak at a seminar once.  So I’m not hocking is book only to the degree that I really liked it.  It was called Create Distinction by Scott McKain.  And what it talked about is that when you look around at the cars driving around your town, so many of them look alike, and if you look at many of the trucks, so many of them look the same.  And so when something looks different it stands out.  I remember a movie critic was once asked, “There’s all these movies, why do you movie critics always find these obscure movies to say they’re best for the year?”  And the guy says, “You’ve got to understand we see two or three movies a day.  Anything that is different and distinct stands out in our minds.  All the rest kind of blur together.”  And so I think that when developing and improving upon existing, differentiate yourself.  Create distinction.  Be easy to work with.  No drama.  People get enough of that in their own lives.  I’m a relationship guy and I believe that if you’ve got an existing client relationship and you’re not personally involved in that relationship, you know, if they just see you as some vendor, and I define vendor as someone who just fits a purpose, no loyalty, you know, you just do the thing and I can replace you in a moments notice.  Think about that because they deserve better.  Do they deserve a trusted advisor, a trusted ally that’s going to be on their behalf?  And you deserve more as well.  And if you say to yourself I can’t; I’ve got to take every client.  Or at this point I’ve got some clients but I can get rid of some of them.  Well if you really have a goal for yourself of the type of business that you want perhaps five years from now, you got to start creating it today and get that fixed in your head and think about the perfect client for you.  And if you can’t get rid of the clients that don’t meet that now just because of where you are and you’ve perhaps got obligations, start calling the ones that don’t fit.  You get one that does maybe bring on new client, get rid of an old one.  It’s not growing your business necessarily but it will start to change your business into one where you have a bunch of clients that perhaps aren’t exactly what you’re looking for or your vision, you’re slowly replacing them with ones that do.  And over time you’ll be very happy and you’ll look at your client list or your customer base and say wow these people are a reflection of who I am and what I want and this is exciting to work with these people.  It might take some time but I think that that’s a way that you can, with existing client relationships, start to improve upon them,

Interviewer:   Well Mike, I want to thank you for sharing from a genuine and a passionate place and certainly valuable information.  We really appreciate your time today.  Tell our listeners where they can get more information once again about Generosity Wealth Management online.

Mike Brady:   Yeah.  Absolutely.  Well, my website is www.generositywealth.com, generositywealth.com.  I also have a Twitter account.  It’s generosity_wm.  And they can also look at my LinkedIn profile.  Michael Brady in Boulder and there’s a number of different ways.  And, of course, my email, Mike@generositywealth.com.  Always love to talk with people and see if I can help them; see if there is a relationship that is just budding and waiting to happen.

Interviewer:   Well Mike, once again thanks so much for your time and look forward to another conversation in the future right here on Enterprise Radio.

Mike Brady:   Thank you very much sir.

Interviewer:   And you’re more than welcome.  We have been speaking with Mike Brady, founder and president of Generosity Wealth Management; a mission-based wealth planning firm that works with clients to develop comprehensive long-term diversified strategies to build their wealth.  And for more information simply visit generositywealth.com.  This is Eric Dye and you’ve been listening to Enterprise Radio, a part of EPN, the Entrepreneur Podcast Network.  Pick up our iPhone or android mobile app for your mobile listening convenience.  And once again we do thank you for tuning in.

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