Financial advice is tricky because it's a bunch of priority influenced trade-offs. There are many ways to succeed financially, it's just a question of how: What are the priorities and trade-offs?
Our previous personal finance MUSU was based on the Michael Douglas movie, The Game. In that thriller, Douglas is sent on an adrenaline adventure. We never know if what he lives through is real, or just the game.
That start up could imitate market crashes, pandemics, and stressful situation. Individual investors would never know if what they live through is real, or just the game.
Today is another personal finance idea.
A lot of advice starts with the idea of goals. What is your goal retirement age? What is your goal retirement income? What are your contribution goals for the kids' education?
Share your goals, work backward in time, make assumptions, and then generate a plan.
But as humans, this is difficult to articulate. As we saw with opportunity, cost neglect, if it's not an obvious choice in front of us, we don't generate it. I want to retire at 65 and live on 80% of my current expenditures and pay for two college educations. Blah. Generic options like multiple-choice tests in school.
Thinking different - please read this book - is hard. So it's logical to conclude that non-differentiated thinking means that it might not be what a person really wants.
The pitch: show us your portfolio, and we will tell you your goals.
For example, someone comes in with a limited portfolio in a bunch of individual stocks. The goals of this person is to rely on luck. Or, someone comes in with $X,000. This is the portfolio of someone who wants to work for twenty more years.
A lot of clients would come in and go oh hell no. That's good! That reaction creates boundaries to what they truly do/don't want out of their financial plan.
Additionally, this presentation could be presented using base rates: People with X at age Y work for Z more years - just like you will unless something changes.
This is a hard sell because finance is, like Rory Sutherland writes, a "name brand". People buy financial advice for the same reason they buy name brand products, as downside protection. I don't need it to be good, our subconscious reasons, I just need it to not be shit. Brands are undifferentiated on purpose!
The "white suv meme" circulates on the internet and we laugh. But new leads to unexpected factory recalls, disappointed customers, and other monkey wrenches. New/Unproven is not what the customer wants, though it's better on some dimension. That goes for cars as much as it goes for financial advice. Even if, a little game or a backwards approach might lead to some good ideas.
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