Grandma told me ignorance was a blessing — but not until you realized about what you were ignorant. That was her way of saying beware of what you don’t know about what you don’t know. Huh?
A young, hard working, very intelligent couple have a couple kids, aren’t 30 yet, and bought their first home a few years ago. As ‘Jim’ works hard, and manages his career, (he’s going to college at night) ‘Barb’ takes care of the home and kids. They (he) contacted me about investing for their retirement. They wanted to stay in their home, take some equity out, and get going. After a couple very good phone conversations, I had one of my Boise Team meet him at the house to figure out its value. My #1 lender, Jed, also met with him to get things going.
Whoa!! Jim and Barb had done a ton of research on various modes of investment. They’d come across the usual suspects — most of whom I won’t go into here. Suffice to say, none that he mentioned to me were anywhere near what they needed to be doing. For Pete’s sake, most of them were non-appreciating in nature.
Here’s the problem
Like all of us, when we try to go from no knowledge of a subject, to getting very serious about it, we naturally get a little anxious. It’s human nature. We’ve all been there. But, there’s something worse. It’s when we begin to think we actually know a little something, that the confusion really starts to grab us by the throat. Jim wants to know, and I think Barb REALLY wants to know, why they’re doing what I’ve advised them to do.
I’ve told them to take the cash from the new loan, buy one property, keep the remainder, which is five figures, for a cash reserve (Sominex) account. It was sound advice, tending toward the conservative. But when you’ve been filling your head with as much investment information as possible, and so many of them seem to conflict with each other, you want to know — For Heaven’s sake, WHAT’S THE REAL DEAL?!
So all this came to a head yesterday in an email to my lender, who passed it on to me. I empathize with this young couple, because they’re just trying to do the right thing. They know I’m an expert with more than enough experience, but still……..what to do. It’s such a big step for a young 20-something couple with kids.
Here’s what I’m gonna tell them
We’ll have a conference call. The first thing out of my mouth will be the confession that I’ve been where he is today. Take a big breath and relax. There’s no need to rush, because doing it today isn’t any better than next week. Now, what is it you don’t understand? This conversation will take awhile, but will go a long way to increasing their knowledge of the process. Most of what I’ll say will be about things he’s already heard from me at least twice. But, like Grandma was fond of saying, “Repetition is the foundation of learning.” He’ll now have heard many of the principles I bring to the table for the third and fourth time. They’ll begin to sink in.
All of this fearfulness and anxiety, comes from a universal epiphany: We all tend to freak a little when it dawns on us how much we don’t know what we don’t know. I think we’re all like that to differing degrees, aren’t we? Sure we are.
When I first began bodybuilding as a teenager, everybody in the gym knew what I should and shouldn’t be doing. I’d read a few books, and was so confused after a month of working out, I didn’t have any confidence in anything I thought I knew. What I was told Monday, was was contradicted by what someone else told me Wednesday. Turns out the gym’s owner was a world champ, and a pretty nice guy. He came to me one day, and asked if I was willing to work hard, do what he said, and not talk back. I was floored. The great Gene Fisher was going to personally train me.
Six months later I knew how much I truly didn’t know. It was the first time I really felt daunted — I’d realized I didn’t know what I didn’t know. Fortunately, Gene took me aside, and told me how much I’d already learned. He said I was a good student, and he was proud of my progress. I was floating on air. I trained under Gene Fisher for four years. The results were very gratifying, and the knowledge he so graciously passed on to me was invaluable — and still very useful.
So when young folk like Jim and Barb show signs of being nervous before making a life decision like this — I sometimes find myself 16 years old again, wondering if I’d ever achieve anything better than mediocrity in bodybuilding. Three years later he had me competing, on stage, for a title. (The winner made me look like a cheerleader named Nancy, but that’s a whole different story. ) Did I win Mr. Teenage Southern California? Not hardly. Thank the Lord there aren’t any remaining pictures. However, in school I was known as the guy ‘with the muscles.’ Tell me that wasn’t cool for a high school kid.
But, after over three years of very serious bodybuilding, guided by a world champ, I looked like I could’ve won — at least to those who never actually saw the winner. (The guy had to be related Hercules.) The picture, by the way, is the actual guy who wiped up the stage with me.
Jim and Barb don’t have to become billionaires. They just have to do things on Purpose, with a Plan, for a long time. Their financial muscles will, I promise, be plenty big enough to retire very well, and much earlier than their peers.
Everything will be fine. Now, just take a deep breath and relax.