As a financial advisor I learned technical concepts and developed knowledge and skill around the fundamentals of financial planning. What are the payoffs of investing in the stock market, real estate or other ventures? What level of risk is required to generate the return? Will the return be sufficient for the client’s needs? How much will the client earn and how much can be saved?
What I learned in twenty-plus years of financial advising is that the greatest return is generated by what the client can control. What the client can control is the amount of risk they take, how much they save and how much they earn. This statement is sure to spark some debate.
Risk is controlled by knowing and understanding how much exposure is in your investment portfolio. Property insurance covers the loss of big ticket items and life and disability insurance address the loss of ability to earn an income. Automatic withdrawals to 401k’s and other savings plans set the amount of savings. What then determines how much is earned? Is that controlled by the client? Is that controlled by you?
Working for an employer, many will say that income earned is beyond their control. Another group will agree they have control over their income. Some may be entrepreneurs and have their own business, yet many are in company environments where higher-ups and a pay scale determine compensation. What is the differentiator?
Mindset is the first and most powerful differentiator.
Mindset is the first and most powerful differentiator. If you believe something is within (without) your control, the result will be exactly what you believe. Those believing they have influence over their earning ability will take action on it. Those who do not believe they have influence will not take action.
Are you determining what you earn? Do you believe it is in your control?