The Most Important Personal Planning Article You Read Today

“All this return measurement really has nothing to do with a client’s wealth. All that’s doing is really misleading clients to think that it does,” (David) Loeper, chief executive officer of Wealthcare Capital Management in Richmond, Va., said. He said that looking a performance report of an investment as a guide of a client’s wealth is “like going to the doctor when you’re already dead.”  – Financial Planning magazine

I am glad to see this paper resurface.  When I read it a few years ago, I kept thinking, “Why isn’t the financial services industry coming to similar conclusions”?  Having spent my youth studying economics, it seems straight forward and logical.

Economics is about tradeoffs.  I can have something today but I may I have to change something in the future.  I can delay something today and get something I value more in the future.

People may wish to sacrifice today.  Equally possible, a person may choose to save less today and work longer.  They may choose a special item (an exotic sports car), to send their children to college, to care for a sick loved one, or any number of things.

Financial Planning is an industry trade magazine.   Follow the link for the article.  Follow the second link for the original paper.

About Christopher Hessenflow

Christopher Hessenflow is a financial planner in the Chicago area. He works with all sorts of people who are much more interesting than he is. He enjoys his career which lends him time to think and, sometimes, be creative. Chip was born bald.
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