Like many of you, this month I’ll be consumed with my favorite annual event, the NCAA basketball tournament. It’s always so exciting when March Madness returns with teams all dreaming of advancing to the Final Four and cutting down the nets as national champions. There are typically common characteristics that separate the teams that advance deep into the tournament from those that have an early flight home. Many of those same attributes can assist individuals and families in winning at wealth management. In fact, I prefer to think of these traits as the kind that create financial champions. In the spirit of the “season,” the following are my “final four” to building a successful wealth management strategy:
Every winning team prepares a successful game plan. In the words of legendary coach John Wooden, “Failing to prepare is preparing to fail.” Similarly, individuals and families have wealth management needs that must be carefully planned out. A simple plan is a great start, while a more comprehensive approach can include many variables, including trust administration, financial planning, investment management and retirement planning. It can often require an expert to navigate these complicated financial subjects.
History has shown it’s nearly impossible to navigate a college basketball season undefeated. In fact, it’s been nearly 50 years since the last men’s championship squad was able to accomplish this impressive feat. This means that even the best teams will likely suffer a few losses along the way. In like manner, there will be swings in the market that affect investment portfolios or emergencies that create short-term cash needs. The pressure to diverge from a preset plan based on short-term market fluctuations will be tempting. But this is the time when it’s most important to show fortitude and stick to the plan in place.
The beauty of March Madness is the “win or go home” format, and the importance of the coach’s role cannot be overstated. In-game adjustments are often the difference between advancing or heading home. Just as in basketball, the right wealth management expert can help in separating a successful plan from ones that underperform or fail. Open and candid communication is critical to long-term success. Flexibility and creativity in thinking can often provide the nimbleness needed to adapt to changing factors out of one’s control.
Teams can have the best plan, demonstrate resilience, and have a fantastic coach, but ultimately the ball still has to go in the basket. The best teams come through when the lights are at their brightest. Creating opportunities for the highest percentage shot, possession after possession, is the key to success. Similarly, the right team can create systems to execute your wealth gameplan and allow the power of compounding to work in your favor.
Let’s all enjoy this exciting time of the year! My hope is that you’ll also consider these “final four” principles to help set yourself up for the best chance in winning a wealth-building championship.