gave us his ?State of the Economy? address. He is the one of the most
brilliant economist and business men that I have ever met. Below are
some notes that were taken. In our industry we have typical ?Financial
Planners? and ?LEAP Planners? and there is a HUGE difference. In my
notes below when I use the word ?we?, it is in the context of us as
?LEAP Planners? and shows the fallacy of what financial planners teach
society.
The notes that I took are indicated by italics.
We must constantly be in touch with the economy and
our surroundings because everything is always moving. We cannot achieve
success standing still. Just like on the PGA Tour, the average drive
distance has gone up in recent years because of Tiger Woods and the
other professionals have had to keep up.
IS THE ECONOMY IN GOOD SHAPE?
We have to ask if the economy is in the same shape as it was 5 years
ago. It has changed and we must change to keep up or we will be left
behind. Financial Planning is basically impossible because no one has
the ability to know what the future holds, which is the basic premises
of Financial Planning. It is a fraud and is unethical and ruining
lives. It is like doctors that commit malpractice. Why has our industry
promoted it so heavily and taught the agents in the field to use
illogical calculations based on circumstances that are in the future.
What happened to ?past performance no indication of future results??
Why are financial planners making future calculations based on unknown
factors? We need to use logic and be honest with ourselves and our
clients at all times.
2 DECISION PATHS
We have two choices in planning our lives:
1. Capitalism – ?Means are greater then the ends? (How we do things determines what we end up with)
2. Communism – ?Ends drive the means?
Capitalism is based on giving the control to the people and letting them choose for themselves, good or bad.
Communism is based on taking the control of us as individuals and
giving it to the governing body and letting them control our destiny.
They wanted to make everyone successful, which makes sense
philosophically, but it is not possible in nature or universe.
The USA is the envy of the world, even though a lot of
people hate us. Our politics are messed up but it is better to have
people fighting and arguing in Washington DC then to be ruled by a
dictatorship.
We talked about the economist Adam Smith and his
philosophy of the ?Invisible Hand?. We must trust that our means will
produce a positive end. While we have no control over our ends, we have
total control over our means and must take ownership in it and help our
clients understand how it all related to their financial lives now and
in the future.
There are more notes to come and I will title them
appropriately, but I am out of time now. Up next I will review what
some of the fallacies with Financial Planning and what the truth is.
