In wood shop in the seventh grade, Bruce Raymond Wright’s teacher reminded his students daily to “measure twice, cut once.” When dealing with anything of great importance or where holistic synergy is relevant, second or third opinions can save you from making a disastrous mistake. Piecemeal, transactional thinking and action is amongst the most ineffective of human behaviors. Salespeople thrive upon and even depend upon their prospects taking fast and under scrutinized action. Truly client centered, competent and honorable professionals expect and respect a reasonable level of scrutiny (due diligence) and the time necessary for clients to make well informed synergistic decisions. We believe that due diligence is most effective when the process and those performing the evaluation(s) are not conflicted. We do not believe that due diligence performed by the company or person trying to sell the asset to you is optimally effective for the consumer.
When we carefully take measure of a situation from both a MACRO and MICRO perspective, we are able to make more aware, enlightened, holistic and informed decisions. The following story is excerpted from The Wright Exit Strategy - Wealth; How To Create It, Keep It and Use It authored by Bruce Raymond Wright. Bruce updated it slightly for this website in June 2014. It illuminates how a wiser MACRO perspective can be more valuable than even the best of MICRO tactical plans performed by paid advisors (in this case a CPA) and biased salespeople who fail to inquire about, understand and act in support of a client’s highest and best interests.
It is all too common for people to become so focused on a transaction, an opportunity or an adversity that they fail to truly understand the big picture or the “why” that ought to be the driving force behind all decisions to act or not to act. The following story has helped thousands of people avoid very costly mistakes. It has also helped people gain clarity about why, what, where, when and how to take appropriate action. Remember this simple basic part of our due diligence formula:
Why to do it or not to do it?
Where to do it or not to do it?
When to do it or not to do it?
Who to do it with or not to do it with?
In what ways is this important to accomplishing, protecting or furthering my highest and best interests?
What to do or not to do?
How to do it?
When to do it or not to do it?
Who to do it with or not to do it with?
Of the x number of options explored and put through the due diligence process, why is this my most suitable option for accomplishing these goals A ___, B ___, C___, D___?
Am I confident that this action or inaction will help rather than hurt my grand vision and best interests?
As I teach continuing education courses to attorneys, accountants, stock brokers, financial planners and others, I try very hard to convey this important message to them: It is essential for them to help their clients find and articulate their grand vision, goals and objectives so that a written record of these important things can be found in their files. I present the idea to professionals in this way: “Think of your top 25 clients, the very best, most important clients. Can you pull their files and tell me within five minutes what the clients’ grand vision, goals and objectives are, what’s important to them in their lives and what their personal mission statements are? Across the board, professionals everywhere with very few exceptions look at me as if I’m from another planet. Many claim to grasp the client’s FINANCIAL GOALS, but they are focusing on numbers, not people. Some tell me they’ve never heard of such an obligation. They do not have any such record. In fact, they will say to me, “How do you expect me to have something like that when none of my clients know what the heck they’re doing or what they want?”
Picture a courtroom, if you will, where a lawsuit has been filed against a professional. You, the plaintiff, are claiming malfeasance of some nature. You’re telling the judge, “My advisor didn’t look out for my best interest. She messed this up and it cost me x amount of money. She should have known that these investments were not suitable for me. She should have known that his particular tactic or tool was going to expose me to an undue level of risk which I could not tolerate.” The attorney for the defense approaches you and says, “Perhaps you can tell the court what your grand vision, goals and objectives are. Perhaps you can articulate that for us.” If you can’t articulate your own grand vision, goals and objectives, you’re going to have a pretty difficult time winning your case. If you don’t know why you are doing something or what it is you’re doing, where you are, where you want to go and how you want to get there, it’s pretty ridiculous to think that you could hire a professional, pay her x amount of money and expect her to read your mind and guess right on all these important issues. Furthermore, if you cannot produce this information in writing and did not give it to the advisor before implementing her advice, you will have a difficult time winning your case.
I met with a father and a son who were trying to buy out the family agriculture business from the dad’s two sisters. Their accountant had done a beautiful overview of how they should go about this transaction. Our firm was hired to give a second opinion and review all the information, to make sure all the t’s were crossed and the i’s were dotted. I looked at the plan put forward by the accountant and I thought, “This is fabulous. This is one of the most articulate, in-depth plans I’ve ever seen. I would actually outsource some work to that accounting firm.” It was done that well. I told everybody that when we all got together. The clients, the accountant and the financial advisor were all happy to hear what a great plan they had in front of them.
As designed, the plan was to pledge the father’s and the son’s equity (and the land) as collateral and borrow $20 million to buy out the two sisters ($10 million each). This buyout would empower the two sisters to move fulltime into their beach houses. The sisters had already figured out who, what and where they wanted to be next. Obviously their brother and nephew had not yet done so. The father and son were about to incur massive debt for a long period of time. Also, none of their advisors held the consciousness or awareness to help the father and son to imagine and move into alignment with who, what and where they wanted to be next. The lawyer, the CPA and the financial advisor each had significant wins on the line. All of them were anxious for the plan to be implemented immediately and none of them wanted their win put at risk. All the momentum was in favor of the plan produced by the CPA.
When we all sat down in the financial advisor’s office, I said, “This is a great overview. The t’s are crossed, the i’s are dotted and everything is ready to go. Why are you apprehensive about implementing this plan?” The father responded, “It’s hard to say exactly why I’m uncomfortable. I just feel as though we are missing something important but I can’t tell you what it is.” Then I said, “Perhaps if I ask you a few uncommon questions we may be able to discover what is causing you to have doubts about the plan your advisors created.”
I looked over at the dad and asked, “If you could just get a check in the mail every month, how much total annual income net after taxes do you think you would be able to live on comfortably?”
He said, “Well, I would need about $75,000 a year.”
I asked the son the same questions and he said $125,000 a year. I asked the father what his net worth was and he said it was about $6 million, most of it tied up in the family agricultural business. The son’s net worth was about $4 million, most of it again tied up in the family agricultural business. Next I asked, “If each of you could create your own perfect calendar and you could live the lifestyle you really want; if each of you could spend your time, talents and resources doing exactly what you want to do, whenever you want to do it; if you could get rid of all the activities that you don’t want to do, what would that perfect calendar look like?”
They both sat back in their chairs, and the dad said, “Well, I never really thought about that before.”
“Well, give it some thought,” I told them. “What really important things would you like to do with your time, talent and resources?”
So we started listing their key activities. Finally I asked them both, “Is there anything missing? Anything that isn’t on this list?”
They said, “No, we don’t think so. We’ve got all the big things, anyway.”
I said, “O.K., it’s kind of hard to answer that question all at one time. But how about spending 70 hours a week running an agricultural business? I don’t see that on the list for your perfect calendar.” The dad said, “Well, you said if it was the perfect calendar and we could do whatever we wanted to do.”
I said, “Yes, that’s the question I asked.”
And then the son got it. It was like watching a cartoon where the light bulb goes off above somebody’s head. He looked at his dad and said, “Dad, we’ve got to get on the same page. We’re not living the lives we really want to live. We’ve got everything tied up in the business and what we’re about to do is take our $10 million of net worth, pledge it as collateral and borrow another $20 million so we can buy out Aunt Sylvia and Aunt Mary. The point is we could be living our perfect calendars if we got out of that business too.”
The father said, “I never thought of that. I thought I was just going to work at the business until I die.”
At this point the accountant joined the conversation. He said to the son, “You mentioned that we need to be on the same page. We are on the same page. In fact, you have 50 pages of analysis, recommendations and summary of the same page.” The accountant was noticeably irritated with the clients, with the direction of the conversation and especially with me.
As lovingly as possible, I reaffirmed the fine job he and his firm had done. Then I pointed out that there was only one problem with the analysis: The accountant had let the client incorrectly define the mission. This is an all too common problem with the communication between clients and advisors. Clients don’t always know what the best questions or right issues are. Most people have never even considered the possibility of defining and actually living their ideal lives and perfect calendar(s). Most clients don’t know how to think about and plan for that. Neither do most advisors. So the client ineffectively defines the mission or the issues as well as the advisor’s role(s)… and together they march right down the wrong path. Crossing all of the t’s and dotting all of the i’s are important, but nothing is as important as ending up with the joyful life and peace of mind that you really want.
What I am offering as a new paradigm is this: Let’s get on the right page. You must make sure that you and the people you work with are on the “right page” and moving in the best direction for you. The fractional left-brain financial analysis offered by the accountant had not taken into account the critical right-brain issues necessary to move the clients to a higher level of fulfillment and quality of life. Nobody involved was thinking about and therefore able to do anything productive about getting the clients into position to live their ideal lives and perfect calendars. In fact, all of the players were about to create a $20 million debt that would take decades to pay off. The father and son would in some ways be enslaving themselves whilst the aunts would be living their ideal lives and perfect calendars.
This is just one of many examples of people stuck in pedestrian, unenlightened thought, lacking “the right page,” a Macro Strategic Plan® or entrance, growth and exit strategies. For these millionaires, life was mostly about going to work every day for the rest of their lives until the day they died. By elevating one’s perspective and realm of possibilities and redefining the missions, the focus can be on achieving one’s ideal life and perfect calendar. We help people see that the real challenge and opportunity in front of them is moving into the quality of life they desire. This new way of thinking elevates people beyond just focusing on success in business or making more money than they can or will ever spend. This is the kind of consciousness and focus that moves people into a state of being where they are living as their highest and best selves.
In fact, money really shouldn’t be anything but the means to become free enough to pursue the life you’ve always wanted. A life defined by you, not your parents, your culture, etc. But most people haven’t got a clue about how to define that perfect (or even just better) calendar and life. They need expert mentoring and guidance to get them from where they are now into the position where they have a grand vision – some would say a clue – as to who they are and what they really want to be when they grow beyond their job or title.
After completing his Macro Strategic Plan® and mentoring process, a 75-year-old client made this observation, “Hey, I guess what this comes down to is, who and what am I going to be when I grow up?” Please understand, it’s not about how old we are, it’s about how evolved we are! It’s also somewhat conditional on how evolved our advisors are.
There’s a mutual responsibility here. You, as the client, need to know what your grand vision, goals and objectives are and you must communicate those details to your advisors. Your advisors need to ask you what your grand vision, goals and objectives are and work toward the fulfillment of your ideal life and perfect calendar. Both you and your advisors get to choose whether to just focus on transactional financial issues, or to work in harmony with big picture quality of life perspective.
A tremendous communication gap exists. The professionals know it would be helpful for them and their clients to know their clients’ grand vision, goals and objectives, but sometimes it’s uncomfortable for the professional to bring the subject up and pursue it, especially if the client becomes hostile when the professional broaches the subject. A lot of clients will respond, “That’s too personal. I don’t want to talk about that. I don’t want to talk about goals and objectives; I just want to talk about what’s the most effective way to sell my business without having to pay taxes on it.” So most advisors will just do what the client asks them to do. Of course, the really dedicated, unusually competent professional will not allow the dialogue to move forward without dealing with the big picture WHY issues. But it’s really an elite group of professionals, a very small limited percentage of the professionals in any discipline, who have the training and the fortitude to look a client in the eyes and say, “Look, I can’t represent your best interest if I don’t know what your best interest is. If all I’m doing is looking at a single transaction in a vacuum, I can’t possibly give you my wisest advice. We have to look at the big picture and examine your grand vision and goals for your life in order to determine whether this isolated transaction is holistically good or bad for you.” If you as a client try to avoid these issues, you’re going to become immersed in piecemeal, transactional behaviors and you will eventually if not immediately hurt yourself.
The sooner you dedicate yourself to WHOLE BRAIN, WHOLE BEING holistic, synergistic planning and implementation, the sooner you will obtain the effectiveness, quality of life and peace of mind you desire. If you fail to capture your grand vision in a written understandable plan that you and your advisors can be held accountable to, you will remain out of alignment with the quality of life, peace of mind and performance you desire. Written plans are cathartic. Written plans replace ambiguity with clarity and accountability. Written plans lead to the kinds of results that wishful thinking or piecemeal transactional behavior cannot produce.
© 2014 Bruce Raymond Wright