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The Human Element of Financial Planning

The Human Element of Financial Planning

July 09, 2019

I love movies. While my wife watches Bravo TV and the Real Housewives of Bemidji or Waxahachie or wherever else Bravo is poisoning the TV airwaves (Hi Honey!), I’m on my iPad catching up on emails, watching Billions (Best show since the original 24) or sometimes scrolling through movie clips on YouTube. One of my favorites from the last few years was “Sully” starring Tom Hanks. It's a great movie, based on the true story of the Miracle on the Hudson where Captain Charles “Sully” Sullenberg water landed a commercial jet on the Hudson River only minutes after a bird strike hit their plane during takeoff from LaGuardia.

You may remember the story of how Sully’s quick thinking saved 200 plus passengers and crew on board, but what’s easy to forget is the fact that after the water landing, many in the FAA were trying to make Sully the scapegoat for the plane going down in the Hudson instead of returning the plane to an airport.

Watch the clip below:

The FAA in the movie was showing flight simulations with captains hitting the birds in flight simulators and then immediately heading for a nearby airport. No time for decision making, calculations, fear, rationale, just cold, hard, robotic simulations. That’s where Hanks knocks down my favorite line in the movie.

I wish I could have seen this hearing in real life, with the real Captain. I’d like to think he actually said “You are looking for human error. Then make it human.” Maybe he said it; maybe he didn’t. The line was perfect for the movie at least.

Like many other things in my life, this makes me think of my career as a financial advisor. So many “gurus” or just average Joes on social media platforms talking about personal finance like it's just so freaking simple. Invest in this, get your double-digit returns, go with the cheapest funds, you don’t need an advisor, take this average return, project it on a linear trajectory over 20, 30, 40 years, you’ll be a multimillionaire!!! It's not just the gurus and pundits, the downside of social media is it can give people who know next to NOTHING a platform to spew their narrative to millions. It can be easy to take something seen on Twitter or television as the truth without realizing the bigger, complete picture.

If it was so easy to become wealthy, then why aren’t there more millionaires? These linear projections using 7th-grade math rarely account for taxes that have to be paid, even in those tax-deferred 401ks and IRAs. Not only the taxes, what about the fees?

Even if you’re investing on a “DIY” investing app with low fees, how easy would it be to keep investing when times get tough, let alone staying the course and not selling when everyone around you is in a panic?

My question to that would be if we have another 15, 20, 30, 40% bear market, would you stay the course? Or sell at a loss? It's easy when the market is doing great, or maybe you’re young and just starting out, not a ton to lose so who cares if the market dips? Cheaper prices! But maybe when the market actually turns as it did in the 4th quarter of 2018, maybe you sold at a loss. And maybe you missed the upside of the first quarter in 2019.

I sound like I’m defending my career, and you’re right I am. But I’m not arguing you should be paying me 1% or less to ONLY manage your money. You’re right! A robot or an algorithm could do that for cheaper. You could index. But what about your behavior? That algo isn’t going to hold your hand and remind you of the math. The robo platform app on your phone isn’t going to remind you that your 3 kids need you to get those wills done or insurance in force. The app won’t meet with you once or twice per year to make sure you’re saving 20% of your income, the minimum savings rate required for most folks to reach financial independence.

The linear, robotic projections are just like those flight simulations and the FAA trying to attack Sully. Many are looking at Gross rates of return, they’re not accounting for taxes, and once you pull that layer, even if you’re doing it yourself, you need to remember Sully.

“You are looking for human error. Then make it human.”

You’re human too, trying to provide and care for your family and build your balance sheet. Maybe it’s time to partner with another human to help with the human element. Are you 100% confident that you and that app on your iPhone can reach your optimal financial potential? If you’re not, maybe it’s time to partner with someone who can leverage tech AND help you with your behavior.

If you think I might be that guy, send me an email at, or send me a message on LinkedIn or on Facebook at my page, “Andrew Matthieson, Ashford Advisors” and let's get to work.