August 28, 2020 • 17 mins
"Have a plan. Have goals. But, don’t just have goals and a plan, have a system that works for you. That might be creating an investment plan to begin with and following that investment plan. It might be automating your investments somehow through a robo-advisor, that might require you to hire an advisor. I think any of those options work as long as you have a plan and a system in place." - Daniel Lee
In this episode of GET READY!, I spoke with Daniel Lee, a fiduciary financial planner who is the head of Plancorp’s San Francisco office about the benefits of having an investment plan. Daniel discussed the components of an investment plan and what to keep in mind when reviewing your investment portfolio. We also discussed how people can incorporate socially and environmentally responsible investing into their strategy.
Bio: Daniel Lee, CFA®, CFP®, is a fiduciary financial planner dedicated to helping busy people make intelligent financial decisions. He is the head of Plancorp’s San Francisco office, a full-service wealth management company, and consults for BrightPlan, the first digital financial wellness solution certified for fiduciary excellence. Daniel is an award-winning personal finance instructor at UC Berkeley Extension and is a member of the CFA Society of San Francisco and the National Association of Personal Financial Advisors.
The Get Ready Money Podcast and its guests do not provide investment advice. All content is for educational purposes. Guest opinions do not necessarily reflect the opinions of The Get Ready Money Podcast and Tony Steuer.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:12):
Welcome to the get ready with Tony Stewart podcast
today.
I'm pleased to be having DanielLee.
Join me.
Good morning, Daniel morning,Tony.
So today we'll be discussing theget ready August financial to-do
item, uh, re viewing yourinvestment policy statement.
Uh, let me tell you a little bitabout Daniel before we get
(00:34):
started.
Daniel Lee is both a CFA charterfinancial analyst and chartered
financial planner.
When a fairy few people haveboth designations, uh, Daniel is
a fiduciary financial plannerdedicated to helping busy people
make intelligent financialdecisions.
He is the head of plant core SanFrancisco office.
(00:57):
Uh, plant core is a full servicewealth management company and
Daniel also consults for brightplan.
The first digital financialwellness solution certified for
fiduciary excellence.
Uh, on top of that, Daniel is anaward-winning personal finance
instructor at UC Berkeleyextension and as a member of the
CFA society of San Francisco andin national association of
(01:21):
personal financial advisors.
So Daniel, um, can you tell us alittle bit about what you do?
Speaker 2 (01:29):
Uh, yeah.
Thank you for that introduction.
I think you gave a pretty goodoutline, right?
Uh, I, as you can see, I wear afew hats.
I teach I'm a personal financeinstructor at UC Berkeley
extension.
Um, I'm not currently afinancial planner advisor with
plank work.
So I work with individualclients helping to manage their
(01:50):
financial plan and investments,and then, um, consult for break
plan, which is essentially doingwhat I do for my individual
clients.
Uh, but they're using technologyto really be able to scale that
and to provide great financialadvice to, uh, not just a
handful, but to hopefully tensand thousands of employees,
(02:12):
hundreds of thousands ofemployees.
Speaker 1 (02:15):
Well, that's really exciting.
And, and the technology I'veseen from bright plan is, um,
really next level.
And I think you hit on a goodpoint is, and part of why I've
picked this topic is that mostpeople don't have access to
financial planning advice for amultitude or reason.
(02:36):
So I'm really glad you'regetting out and doing this work
and teaching and everything, um,cause that's what we need.
Um, so let's get into thequestions.
Um, first question is what arethe main benefits of having an
investment plan or financialplan?
Speaker 2 (02:53):
Um, so let's say the, the main benefit is that what,
uh, what an investment plan doesis it organizes your
investments.
Um, so that it's part of aoverall cohesive strategy, um,
that can help you achieve yourgoals and objectives.
I'm a, I'm a big fan ofarchitecture and high rises in
(03:13):
general.
And so I feel like an investmentpolicy statement or investment
plan.
When you build a high rise, youwant to make sure you have all
the, I guess, the dimensions inplace, you don't just start
building one floor by one floor,hoping you get a good building
at the end.
And I think that kind oftranslates to what our
investment policy statement doesbecause most or naturally most,
(03:37):
a lot of new investors,especially just start buying
stocks and ETFs and mutual fundshere and there without really
thinking about how that fitsinto their, um, strategy, how
that fits into their goals andobjectives.
Speaker 1 (03:52):
Yeah.
Well, I think that's anexcellent summary and that's,
you know, that's what I think iswell, is that, you know, it's
having a coherent organizationof your goals and, you know,
just your investments, um, youhear about Robin hood and, you
know, often people trading Willynilly, so it's definitely a
(04:13):
necessary thing.
Um, so when you kick a look atit, what are the components of
an investment strategy?
Speaker 2 (04:22):
Um, so each investment strategy, I think
looks a little different, butthey have, uh, some, some core
kind of components to it.
One of them is that it shouldoutline your goals.
Uh, it might be one goal inparticular, such as retirement.
It might be several goals.
It might be, you know, whatever.
(04:43):
Um, but the, the, to have a goalis probably the most important
part of the investment policystatement.
Uh, you wouldn't believe howmany people don't have a goal
set.
Um, and then that typicallyleads to the next component,
which is your target assetallocation, um, and your kind of
risk tolerance and the amount ofrisks that you can take.
(05:05):
Uh, and so an example of anasset allocation might be the
broadest sense percentage tostocks and a percentage to bonds
that might look like 50% each,or you might have a little bit
more in stocks, a little bitmore in bonds, uh, and you can
dig a little bit deeper thereinto real estate or
alternatives, but I would, youknow, initially I will keep it
(05:28):
high level to just stocks andbonds.
Um, and then it should alsooutline your investment
strategy.
So are you going to be in indexfunds?
Are you going to do it yourself?
Uh, you're going to use a roboadvisor.
If you hire a professional, theyabsolutely should give you an
investment policy statement andthat if you're in a IPS in that
(05:53):
sense, they should also outlinewhat your responsibilities are,
what the advisor'sresponsibilities are.
Um, and they should, they shouldalign with this, uh, uh, but
yeah, they should align.
And the last two that I wouldsay is it should have an
investment selection criteria ifyou're going to be using in that
(06:13):
spins.
But if you're going to be usingwhatever funds, how are you
going to select those funds tobe able to kind of build out
your portfolio?
Um, it might, it might say thatyou're going to be in a
diversified portfolio, or itmight say that your maximum
expense ratio should besomething maybe you want
dividend paying stocks, or youwant something that's liquid.
(06:34):
That's something that couldeasily be converted, uh, and
last but not least you shouldspecify the monitoring
parameters.
So do you want to be looking atthis monthly, quarterly
annually, but it should havesome type of a cadence, um, so
that you're not, you're not kindof, I guess you're dictating
when you're Revere yourportfolio.
(06:55):
Not CMDC
Speaker 1 (06:57):
Definitely.
Well, and I think, you know, thekey word that is coming through
is the word planning.
Um, you know, when you talkedabout the high rise and the
architects and the financialplan is the thread that I'm
getting is that it's all aboutplan.
And I mean, it's even in thename financial planner, um, that
(07:20):
you have a plan, you execute theplan, uh, you know, so that
that's great.
Um, so how often do yourecommend that people review
their investments?
Speaker 2 (07:32):
Um, that's a tough question just because, uh, I
guess there's no right answerinto how often you want to
review your investments.
Uh, we at planet Corp, uh, liketo look at our client's
portfolios at least once a month, um, there might be certain,
(07:52):
uh, situations where you need tolook at it more often, but we
typically tell them you don'twant to be checking your, your
investments on a daily level.
Cause it's, it's probably, youknow, money is very emotional
and the more you look at it, themore you tinker with it, the
less likely that you'll achieveyour goals.
Um, but at the same time, youdon't want to kind of set it and
(08:15):
totally forget it because theremight be some adjustments that
you need to make.
And so if I had the choice, wetend to say, look at it daily
and don't look at it for 10years.
I'd probably go with, don't lookat it for 10 years.
Um, but you, there should be a,you can probably find a good
middle ground there.
Speaker 1 (08:37):
Definitely.
Well, and I think the keytakeaway is that day-to-day
monitoring of your investments.
It's just, you know, it's likewatching a roller coaster if you
watched the market.
Um, you know, my dad, I don'tknow if you may recall if it was
Benjamin Graham or Burt, whatdid them, you know about the
(08:57):
market moves like a drunkensailor, um, you know, stumbling
around, you know, trying to getthat next step that they're
going to take.
If you heard that,
Speaker 2 (09:08):
Uh, you know, I've heard something similar where
they said, uh, the markets arelike, uh, you know, when you're
walking a dog, the markets arelike a dog where it's kind of
blending zigzagging back andforth.
And, uh, the human walk dogwalkers, the financial plan
where they're going to aspecific destination.
And I think it's similar, notthe same or similar
Speaker 1 (09:29):
Definitely.
Well, they probably had toupdate it cause that's probably
not, uh, as acceptable as it waswhen I went to college, some
dating myself a little bit here,
Speaker 2 (09:42):
There was a study, I believe it was fidelity that did
a study and they looked at theaccounts that had done
relatively well.
Um, and to, to try to look at,you know, what those, uh,
account owners did to performbetter than the rest.
And I believe that what theyfound was on a lot of the
(10:02):
account owners had actuallyforgotten that they had the
account or that they wereactually dead.
And so I realized that the lessyou tinker with your accounts,
uh, the better you do
Speaker 1 (10:14):
Well, I'm assuming that's not a, um, an endorsement
for dead financial plan, but Ithink the key takeaway is all
kidding aside is that, you know,you want to monitor it, but you
know, you don't want to dwell onit every day.
And I think that's such animportant point.
(10:37):
Um, so what are some of theissues that people should look
for when reviewing theirinvestment portfolio?
Speaker 2 (10:46):
Um, I would say the number one driver of kind of
what they should look for is ifthat investment plan still
aligns with your goals andobjectives and their situation,
uh, part of what makes financialplanning fun, but also
challenging is that your life ischanging year to year.
(11:06):
Uh, and I, I tend to work with alot of kind of gen X and
millennial clients who, um, whoare getting married, having
kids.
There's just so many changes,especially I think at that life
stage that you just, you justwant to make sure that
everything is still aligned.
Um, yeah.
(11:27):
And so that might lead tochanges in your stock bond
allocation, your assetallocation.
It might lead you to change intime horizon, um, might change
in your risk profile where youwere more willing to take risks
as a single person, and then youget married and have kids, and
maybe you want to dial that riskdown a little bit.
(11:49):
Uh, and so there's, there's lotsof changes, um, that could
happen in your life might beJudah.
And those are the things thatyou want to take a look at when
you're reviewing your investmentplan.
Speaker 1 (11:59):
Okay.
Definitely.
And that gets back to theimportance of reviewing, uh,
your investment plan is thatit's all dynamic, uh, life
changes, um, outside there'soutside impact.
So it's really important toremember that, you know,
planning is not a one-timeevent, that planning is an
(12:21):
ongoing thing.
So that's, that's a great point.
Um, so I know one of the thingsyou talk about is, uh, socially
and environmentally responsibleinvesting, and that's become a
much more big part of thegeneral investment conversation.
So how can people incorporatesocially and environmentally
(12:42):
responsible investing into theirstrategy?
Speaker 2 (12:45):
Great question.
I, so I, I, a lot of my clients,especially out in California
that are younger, tend to wantsome sort of, uh, the social,
environmental responsible kindof strategy incorporated into
their plan.
Uh, it, the only recommendationI would give them, well, one, I
(13:07):
think it's a great thing.
If you can align your valueswith your portfolio, um, the
only risk there is that you havethe risk of making your
portfolio overly complex.
So that's what you want toavoid.
And so if you want toincorporate this called ESG
environmental and social,environmental, social, and
(13:27):
governance, investing ESG, uh,you want to have your investment
objectives, kind of yourinvestment plan, lead your
portfolio, um, and thenincorporate ESG into, uh, in
there so that it fits with youroverall goals and objectives.
Uh, what I fear clients doing isa, they lead with their ESG hat.
(13:52):
And so they, they start to kindof move away from what they
actually wanted to do with theirinvestments, uh, and start going
down this path that might nothelp them achieve their goals.
So one example there would be,you know, your original intent
was to have a very broadlydiversified portfolio.
That's very liquid and meaningyou can, you can sell it and
(14:13):
convert to cash quickly, uh,with low expense.
And then they start going downthis road of ESG.
And all of a sudden it's veryconcentrated in 10 stocks.
It's very expensive.
Um, and it's not readilyavailable to be converted to
cash it's illiquid.
Um, if you start kind ofconverting your portfolio that
(14:35):
way, then, then you want to, Iguess it's okay.
Just be like, understand thatyour portfolio characteristic is
changing quite a bit.
So you just want to be mindfulof that.
Speaker 1 (14:46):
Well, definitely.
And I think that gets back to,you know, what we were about
earlier is having that plan, uh,your architectural outline of
where you want to go in therekeeps you from getting into that
situation.
If you're doing that document atthe very beginning and coming up
(15:08):
with your general investmentphilosophy and strategy, um,
instead of leading with aparticular emphasis or goal that
may not fit in with a generalplan.
So I think that's a wonderfulpoint.
Um, definitely.
Um, so Daniel, what's yournumber one tip on being
(15:30):
financially prepared?
Speaker 2 (15:34):
Um, I think you just said it beautifully, Tony have a
plan, have a plan, uh, but don'tjust have goals and the plan, uh
, have a system that works foryou, uh, that might be, that
might be creating an investmentplan to begin with.
And following that investmentplan, it might be automating
(15:54):
your investments on, out througha robo-advisor that might
require you to hire an advisor.
Um, I think any of those optionswork as long as you have a plan
and you have a system that works
Speaker 1 (16:07):
Definitely, um, you know, just recalling, I think
this may be, uh, going back afew years, but it was in her
website at one point by CFP,there was like, make a plan or
something like that.
Speaker 2 (16:20):
I think it was, yeah, CFP there.
It might've been one of theirtaglines as like make a plan.
Um, plan Corp has a, uh, startmy plan.com.
Oh,
Speaker 1 (16:32):
Okay.
Maybe that's where I've seen it
Speaker 2 (16:35):
At something like that too.
Speaker 1 (16:37):
Definitely.
So where can people learn moreabout you and what you're doing?
Speaker 2 (16:44):
Uh, the best place to find me is that my personal
website at hello, goodplace.com.
Uh, you can find more about whatI'm working on.
Some of the links to my blogarticles and published pieces,
uh, and hopefully I'm trying tostart a newsletter, so you could
sign up for my newsletter thereas well.
Speaker 1 (17:05):
Fantastic.
Well, great.
Well, Daniel, thank you so muchfor joining me today.
This has been an amazingconversation.
Speaker 2 (17:12):
Absolutely.
Thank you for having me on Tony.
Speaker 1 (17:15):
Definitely.
And thank you for everybody, uh,for listening and watching the
get ready podcast.
Um, please remember to subscribeuntil next time.
Welcome to the get ready with Tony Stewart podcast
today.
I'm pleased to be having DanielLee.
Join me.
Good morning, Daniel morning,Tony.
So today we'll be discussing theget ready August financial to-do
item, uh, re viewing yourinvestment policy statement.
Uh, let me tell you a little bitabout Daniel before we get
(00:34):
started.
Daniel Lee is both a CFA charterfinancial analyst and chartered
financial planner.
When a fairy few people haveboth designations, uh, Daniel is
a fiduciary financial plannerdedicated to helping busy people
make intelligent financialdecisions.
He is the head of plant core SanFrancisco office.
(00:57):
Uh, plant core is a full servicewealth management company and
Daniel also consults for brightplan.
The first digital financialwellness solution certified for
fiduciary excellence.
Uh, on top of that, Daniel is anaward-winning personal finance
instructor at UC Berkeleyextension and as a member of the
CFA society of San Francisco andin national association of
(01:21):
personal financial advisors.
So Daniel, um, can you tell us alittle bit about what you do?
Speaker 2 (01:29):
Uh, yeah.
Thank you for that introduction.
I think you gave a pretty goodoutline, right?
Uh, I, as you can see, I wear afew hats.
I teach I'm a personal financeinstructor at UC Berkeley
extension.
Um, I'm not currently afinancial planner advisor with
plank work.
So I work with individualclients helping to manage their
(01:50):
financial plan and investments,and then, um, consult for break
plan, which is essentially doingwhat I do for my individual
clients.
Uh, but they're using technologyto really be able to scale that
and to provide great financialadvice to, uh, not just a
handful, but to hopefully tensand thousands of employees,
(02:12):
hundreds of thousands ofemployees.
Speaker 1 (02:15):
Well, that's really exciting.
And, and the technology I'veseen from bright plan is, um,
really next level.
And I think you hit on a goodpoint is, and part of why I've
picked this topic is that mostpeople don't have access to
financial planning advice for amultitude or reason.
(02:36):
So I'm really glad you'regetting out and doing this work
and teaching and everything, um,cause that's what we need.
Um, so let's get into thequestions.
Um, first question is what arethe main benefits of having an
investment plan or financialplan?
Speaker 2 (02:53):
Um, so let's say the, the main benefit is that what,
uh, what an investment plan doesis it organizes your
investments.
Um, so that it's part of aoverall cohesive strategy, um,
that can help you achieve yourgoals and objectives.
I'm a, I'm a big fan ofarchitecture and high rises in
(03:13):
general.
And so I feel like an investmentpolicy statement or investment
plan.
When you build a high rise, youwant to make sure you have all
the, I guess, the dimensions inplace, you don't just start
building one floor by one floor,hoping you get a good building
at the end.
And I think that kind oftranslates to what our
investment policy statement doesbecause most or naturally most,
(03:37):
a lot of new investors,especially just start buying
stocks and ETFs and mutual fundshere and there without really
thinking about how that fitsinto their, um, strategy, how
that fits into their goals andobjectives.
Speaker 1 (03:52):
Yeah.
Well, I think that's anexcellent summary and that's,
you know, that's what I think iswell, is that, you know, it's
having a coherent organizationof your goals and, you know,
just your investments, um, youhear about Robin hood and, you
know, often people trading Willynilly, so it's definitely a
(04:13):
necessary thing.
Um, so when you kick a look atit, what are the components of
an investment strategy?
Speaker 2 (04:22):
Um, so each investment strategy, I think
looks a little different, butthey have, uh, some, some core
kind of components to it.
One of them is that it shouldoutline your goals.
Uh, it might be one goal inparticular, such as retirement.
It might be several goals.
It might be, you know, whatever.
(04:43):
Um, but the, the, to have a goalis probably the most important
part of the investment policystatement.
Uh, you wouldn't believe howmany people don't have a goal
set.
Um, and then that typicallyleads to the next component,
which is your target assetallocation, um, and your kind of
risk tolerance and the amount ofrisks that you can take.
(05:05):
Uh, and so an example of anasset allocation might be the
broadest sense percentage tostocks and a percentage to bonds
that might look like 50% each,or you might have a little bit
more in stocks, a little bitmore in bonds, uh, and you can
dig a little bit deeper thereinto real estate or
alternatives, but I would, youknow, initially I will keep it
(05:28):
high level to just stocks andbonds.
Um, and then it should alsooutline your investment
strategy.
So are you going to be in indexfunds?
Are you going to do it yourself?
Uh, you're going to use a roboadvisor.
If you hire a professional, theyabsolutely should give you an
investment policy statement andthat if you're in a IPS in that
(05:53):
sense, they should also outlinewhat your responsibilities are,
what the advisor'sresponsibilities are.
Um, and they should, they shouldalign with this, uh, uh, but
yeah, they should align.
And the last two that I wouldsay is it should have an
investment selection criteria ifyou're going to be using in that
(06:13):
spins.
But if you're going to be usingwhatever funds, how are you
going to select those funds tobe able to kind of build out
your portfolio?
Um, it might, it might say thatyou're going to be in a
diversified portfolio, or itmight say that your maximum
expense ratio should besomething maybe you want
dividend paying stocks, or youwant something that's liquid.
(06:34):
That's something that couldeasily be converted, uh, and
last but not least you shouldspecify the monitoring
parameters.
So do you want to be looking atthis monthly, quarterly
annually, but it should havesome type of a cadence, um, so
that you're not, you're not kindof, I guess you're dictating
when you're Revere yourportfolio.
(06:55):
Not CMDC
Speaker 1 (06:57):
Definitely.
Well, and I think, you know, thekey word that is coming through
is the word planning.
Um, you know, when you talkedabout the high rise and the
architects and the financialplan is the thread that I'm
getting is that it's all aboutplan.
And I mean, it's even in thename financial planner, um, that
(07:20):
you have a plan, you execute theplan, uh, you know, so that
that's great.
Um, so how often do yourecommend that people review
their investments?
Speaker 2 (07:32):
Um, that's a tough question just because, uh, I
guess there's no right answerinto how often you want to
review your investments.
Uh, we at planet Corp, uh, liketo look at our client's
portfolios at least once a month, um, there might be certain,
(07:52):
uh, situations where you need tolook at it more often, but we
typically tell them you don'twant to be checking your, your
investments on a daily level.
Cause it's, it's probably, youknow, money is very emotional
and the more you look at it, themore you tinker with it, the
less likely that you'll achieveyour goals.
Um, but at the same time, youdon't want to kind of set it and
(08:15):
totally forget it because theremight be some adjustments that
you need to make.
And so if I had the choice, wetend to say, look at it daily
and don't look at it for 10years.
I'd probably go with, don't lookat it for 10 years.
Um, but you, there should be a,you can probably find a good
middle ground there.
Speaker 1 (08:37):
Definitely.
Well, and I think the keytakeaway is that day-to-day
monitoring of your investments.
It's just, you know, it's likewatching a roller coaster if you
watched the market.
Um, you know, my dad, I don'tknow if you may recall if it was
Benjamin Graham or Burt, whatdid them, you know about the
(08:57):
market moves like a drunkensailor, um, you know, stumbling
around, you know, trying to getthat next step that they're
going to take.
If you heard that,
Speaker 2 (09:08):
Uh, you know, I've heard something similar where
they said, uh, the markets arelike, uh, you know, when you're
walking a dog, the markets arelike a dog where it's kind of
blending zigzagging back andforth.
And, uh, the human walk dogwalkers, the financial plan
where they're going to aspecific destination.
And I think it's similar, notthe same or similar
Speaker 1 (09:29):
Definitely.
Well, they probably had toupdate it cause that's probably
not, uh, as acceptable as it waswhen I went to college, some
dating myself a little bit here,
Speaker 2 (09:42):
There was a study, I believe it was fidelity that did
a study and they looked at theaccounts that had done
relatively well.
Um, and to, to try to look at,you know, what those, uh,
account owners did to performbetter than the rest.
And I believe that what theyfound was on a lot of the
(10:02):
account owners had actuallyforgotten that they had the
account or that they wereactually dead.
And so I realized that the lessyou tinker with your accounts,
uh, the better you do
Speaker 1 (10:14):
Well, I'm assuming that's not a, um, an endorsement
for dead financial plan, but Ithink the key takeaway is all
kidding aside is that, you know,you want to monitor it, but you
know, you don't want to dwell onit every day.
And I think that's such animportant point.
(10:37):
Um, so what are some of theissues that people should look
for when reviewing theirinvestment portfolio?
Speaker 2 (10:46):
Um, I would say the number one driver of kind of
what they should look for is ifthat investment plan still
aligns with your goals andobjectives and their situation,
uh, part of what makes financialplanning fun, but also
challenging is that your life ischanging year to year.
(11:06):
Uh, and I, I tend to work with alot of kind of gen X and
millennial clients who, um, whoare getting married, having
kids.
There's just so many changes,especially I think at that life
stage that you just, you justwant to make sure that
everything is still aligned.
Um, yeah.
(11:27):
And so that might lead tochanges in your stock bond
allocation, your assetallocation.
It might lead you to change intime horizon, um, might change
in your risk profile where youwere more willing to take risks
as a single person, and then youget married and have kids, and
maybe you want to dial that riskdown a little bit.
(11:49):
Uh, and so there's, there's lotsof changes, um, that could
happen in your life might beJudah.
And those are the things thatyou want to take a look at when
you're reviewing your investmentplan.
Speaker 1 (11:59):
Okay.
Definitely.
And that gets back to theimportance of reviewing, uh,
your investment plan is thatit's all dynamic, uh, life
changes, um, outside there'soutside impact.
So it's really important toremember that, you know,
planning is not a one-timeevent, that planning is an
(12:21):
ongoing thing.
So that's, that's a great point.
Um, so I know one of the thingsyou talk about is, uh, socially
and environmentally responsibleinvesting, and that's become a
much more big part of thegeneral investment conversation.
So how can people incorporatesocially and environmentally
(12:42):
responsible investing into theirstrategy?
Speaker 2 (12:45):
Great question.
I, so I, I, a lot of my clients,especially out in California
that are younger, tend to wantsome sort of, uh, the social,
environmental responsible kindof strategy incorporated into
their plan.
Uh, it, the only recommendationI would give them, well, one, I
(13:07):
think it's a great thing.
If you can align your valueswith your portfolio, um, the
only risk there is that you havethe risk of making your
portfolio overly complex.
So that's what you want toavoid.
And so if you want toincorporate this called ESG
environmental and social,environmental, social, and
(13:27):
governance, investing ESG, uh,you want to have your investment
objectives, kind of yourinvestment plan, lead your
portfolio, um, and thenincorporate ESG into, uh, in
there so that it fits with youroverall goals and objectives.
Uh, what I fear clients doing isa, they lead with their ESG hat.
(13:52):
And so they, they start to kindof move away from what they
actually wanted to do with theirinvestments, uh, and start going
down this path that might nothelp them achieve their goals.
So one example there would be,you know, your original intent
was to have a very broadlydiversified portfolio.
That's very liquid and meaningyou can, you can sell it and
(14:13):
convert to cash quickly, uh,with low expense.
And then they start going downthis road of ESG.
And all of a sudden it's veryconcentrated in 10 stocks.
It's very expensive.
Um, and it's not readilyavailable to be converted to
cash it's illiquid.
Um, if you start kind ofconverting your portfolio that
(14:35):
way, then, then you want to, Iguess it's okay.
Just be like, understand thatyour portfolio characteristic is
changing quite a bit.
So you just want to be mindfulof that.
Speaker 1 (14:46):
Well, definitely.
And I think that gets back to,you know, what we were about
earlier is having that plan, uh,your architectural outline of
where you want to go in therekeeps you from getting into that
situation.
If you're doing that document atthe very beginning and coming up
(15:08):
with your general investmentphilosophy and strategy, um,
instead of leading with aparticular emphasis or goal that
may not fit in with a generalplan.
So I think that's a wonderfulpoint.
Um, definitely.
Um, so Daniel, what's yournumber one tip on being
(15:30):
financially prepared?
Speaker 2 (15:34):
Um, I think you just said it beautifully, Tony have a
plan, have a plan, uh, but don'tjust have goals and the plan, uh
, have a system that works foryou, uh, that might be, that
might be creating an investmentplan to begin with.
And following that investmentplan, it might be automating
(15:54):
your investments on, out througha robo-advisor that might
require you to hire an advisor.
Um, I think any of those optionswork as long as you have a plan
and you have a system that works
Speaker 1 (16:07):
Definitely, um, you know, just recalling, I think
this may be, uh, going back afew years, but it was in her
website at one point by CFP,there was like, make a plan or
something like that.
Speaker 2 (16:20):
I think it was, yeah, CFP there.
It might've been one of theirtaglines as like make a plan.
Um, plan Corp has a, uh, startmy plan.com.
Oh,
Speaker 1 (16:32):
Okay.
Maybe that's where I've seen it
Speaker 2 (16:35):
At something like that too.
Speaker 1 (16:37):
Definitely.
So where can people learn moreabout you and what you're doing?
Speaker 2 (16:44):
Uh, the best place to find me is that my personal
website at hello, goodplace.com.
Uh, you can find more about whatI'm working on.
Some of the links to my blogarticles and published pieces,
uh, and hopefully I'm trying tostart a newsletter, so you could
sign up for my newsletter thereas well.
Speaker 1 (17:05):
Fantastic.
Well, great.
Well, Daniel, thank you so muchfor joining me today.
This has been an amazingconversation.
Speaker 2 (17:12):
Absolutely.
Thank you for having me on Tony.
Speaker 1 (17:15):
Definitely.
And thank you for everybody, uh,for listening and watching the
get ready podcast.
Um, please remember to subscribeuntil next time.
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