UlTImATE SUccESS GUIdEHe had worked as an engineer for a major Fortune 500 company and
owned both company stock and a 401k that he had rolled over into an
IRA. He was a happily married guy, 68 with three grown up kids. We
shook hands, exchanged pleasantries, and sat down around my desk.
The sunlight shone in a little bright at that time of the day, so I skewed
the mini-blinds and asked how I could be of help.
“I just can’t seem to get a handle on it,” he said, with a sudden look of
mental fatigue. “When I had my 401k in the 80s and 90s, it seemed I
could do no wrong. I picked different kinds of sector funds, and almost
all of them seemed to go up. If they fell, I would switch and still see
nice gains. I contributed the max every year. Before I knew it, I was sit-
ting on a million and then went up to over $1.4 million before I finally
retired. Then came the dotcom bubble.”
I listened as he opened his neatly organized book of statements, going
back twelve months.
“Since then, I’ve hired the best advisors money can buy—and have
never recovered. That’s twelve years. I was told I could withdraw five
percent a year safely back then, which turned out to be poor advice.
My funds took a hit in 01 and 02, and I took income at the same time.
The statements kept going down by thousands every month and really
started to dwindle, so I cut back and even postponed a trip my wife and
I had planned. It wasn’t supposed to be like this. Besides the stocks, I
tried natural gas partnerships, some TICs, and had a REIT not pan out.”
I asked him who was managing his money currently.
“Been doing it myself for four years, and I’m not doing much better, but
at least I don’t have to pay someone for poor results.”
We continued to talk, as he encouraged me to look through his holdings.
His statement was at least nine pages. He had page after page, double
sided, of mutual funds and ETFs that I recognized as overlapping. I
searched for a trend in his investment strategy, hoping to find a pattern.
None was apparent. He had at least seventy different holdings on his
statements, mixed between stock and bond funds and ETFs.
I began to ask him why he owned some of them. Each item had its own
justification. He felt like he was not being haphazard at all. In fact, he
told a compelling story on almost each one.