I started in the financial services industry thinking that my job was to make my clients as much money as possible. While I still think this is important, I have learned that this is only a part of the job. I started working as a Financial Advisor in 2000 and in 2008, I decided to start a hedge fund. The idea struck me as I was reading Buffett: The Making of an American Capitalist by Roger Lowenstein. In the book, Lowenstein details how Buffett started the Buffett Partnership which was essentially one of the first hedge funds. I still remember exactly where I was when I read this passage. I wanted to do something similar and be the next Warren Buffett.
The fund did well for the first few years, then we took a big hit in 2012. In about 2 months, the fund erased its gains and took a loss of about 40%. The losses were painful. I had about 70 investors, I met with almost all of them in person to discuss the losses. The investors included my parents, my family, friends, people I had worked with for over 10 years.
The meetings were as painful as the losses. I had to relive the losses every time, and in addition to the losses, I was confronted with how I hurt each one of these people.
Most people were very empathetic, which made the process more painful. I felt like I lost money for them, and they were more concerned about my wellbeing than the money I lost. At that point in my life, I thought my job, my worth, was determined by how much money I made my clients.
One of the lessons I learned through this is that the legacy you create is based on how you impact people’s lives, not how much money you can make for them. This caused a fundamental shift in what I wanted to do professionally and how I wanted to impact the people who trusted me enough to allow me to help them.
I still want to make as much money as I can for my clients, however I also want to have a greater impact on their lives. I started helping my clients figure out what they want to accomplish in life and then helping them find the path they needed to take. This is something I had not done in the past. This is important because it helps them transition smoothly into retirement. Previously, I started working with my clients by creating a financial plan. This would determine how much money they needed. Now, I start by asking my clients questions to determine what they want in life. We then look at their finances as a tool to support this vision.
I feel as though I am really helping people beyond the percentage gain of their portfolios. The portfolio gains are important, but so is having a happy retirement. The process to get here was more painful than I would have liked, however I do not know if I would have made it to this point without the pain.
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