To be mentored

We all know the value of mentoring, right? Mentors help others along their career paths or guide them in making important life decisions. What about the flip side—the value of being mentored? I am so grateful to have two mentors who have really helped me define my practice over the past few years (they may not even know this).

I have been a financial advisor for nearly eighteen years. I came up through the ranks of E. F. Hutton. Some of you are might remember their indelible tagline, “When E. F. Hutton talks, people listen.” Remembering those days is fodder for a future post. Let’s just say that training back then was more about selling than advising.

My investment philosophy and outlook for financial planning has really been influenced over the years by Larry Swedroe, Carl Richards, John Bogle, and a number of bloggers, including Roger Nussbaum. Larry Swedroe has written numerous books, but the one that really opened my eyes is What Wall Street Doesn’t Want You to Know, published in 2004. Another great book is The Investment Answer  (2011) by Gordon Murray and Dan Goldie. Mr. Murray was a Wall Street executive who was diagnosed with terminal brain cancer in 2010 and wanted, before he died, to write a book about investing that would seek the truth and demystify the jargon and nonsense of Wall Street. His coauthor, Mr. Goldie, is an advisor. It is a wonderful book that can be finished in one night and should be required reading for all college seniors.

My investment process over the years has been greatly influenced by Vanguard, iShares, and most recently Dimensional Fund Advisors. Dimensional Fund is a money management firm that was founded on the research of academics like Eugene Fama, Merton Miller, Myron Scholes, and Robert Merton. The firm is run by David Booth, for whom the Booth School of Business at the University of Chicago is named.

A few years ago I was listening to a podcast of Jim Schmidt being interviewed by Tom Dorsey, of the market research firm Dorsey Wright. The podcast had very little to do with market forecasting but was heavy on the journey that Jim Schmidt took to redefine, rebuild, and strengthen his practice. This was all done when he was probably in his fifties and during the financial crisis of 2007 and 2008. Jim has gone on to be one of the most successful advisors with Raymond James and has really helped me over the years to figure out my role as an advisor and to value process.

My other mentor, and a rather new one at that, is Paul Solli, one of the founders of the Aperio Group, in San Francisco. Paul has had a long career on Wall Street and is one of the early adopters of index investing. I became familiar with Paul after reading his article “The Best Investment Advice You’ll Never Get.” The history of this now famous piece revolves around the investment advice that Google employees received prior to the company going public. In 2004, as hundreds of newly minted millionaires were about to be unleashed to the Wolves of Wall Street, senior Google executives brought in some of the heavyweights of the investment world—Bill Sharpe from Stanford, Burton Malkiel of Yale, and Jack Bogle of Vanguard Funds—to counsel their employees before the Wolves could sink their teeth into them.

Wall Street can make investing and planning a polluted game, with expensive fees, sensationalized returns, and misaligned interests. Investing in fact can be a very simple thing. Diversify your holdings (cash, stocks, bonds, and real estate), capture market returns, and keep your costs down. If you follow these simple principles, you should be successful.

Where most people need help is in saving themselves from themselves. A good advisor helps turns off the noise, keeps you invested when markets get ugly, keeps you rational when markets go up (no, you are probably not a genius—the stock market is up), and most importantly, manages your assets to be as tax efficient as possible.

I want to thank Jim and Paul for their mentoring—even if they didn’t even know they were mentoring. They are instrumental in the way I think and act as an advisor.

For all of you who have mentored, continue helping—somewhere down the road you will make a difference. For all of you who have been mentored, thank your mentors—they are part of the fiber of who you are. If anyone is looking to be an advisor or just getting started in a new career and is looking for a mentor, you know where to reach me.

Have you had a mentor, or have you been a mentor to someone else? Has someone provided invaluable guidance but might not even be aware of the impact it’s had on you? Talk to me—I’d love to hear what mentorship means to you.