Advisers share what they learned from their fathers — and what they are eager to impress upon their kids.
We rely on experience and the guidance of professionals when it comes to managing our finances, but it's often the parental advice imparted to us as children that shapes our relationship with money.
So when 150 of the country's most successful registered investment advisers gathered at TD Ameritrade Institutional's 2016 Elite LINC just ahead of Father's Day, we wanted to hear about the best financial advice these pros received from their parents. What stuck in their minds wasn't stock-picking tips but rather a healthy respect for money and an emphasis on focusing on the important things in life.
I grew up in a frugal household. My dad came of age during the Great Depression, and he knew how to stretch a dollar. My parents worked hard and raised seven kids who always had everything we needed, if not everything we wanted. Somehow, they put seven kids through college. When my father passed away, I discovered he'd saved enough to help my mom have a more secure financial future.
That was a real lesson in the power of planning and spending wisely, something RIAs are eager to impress upon their kids.
SAVE EARLY AND OFTEN
As I think about what to tell my own kids — two in the workforce, learning about the burden of paying off student loan debt, and a third still in school — I recall that surveys consistently show the biggest regret of most retirees is they didn't start planning for retirement soon enough. So my advice: Save early and often, and be careful about taking on debt.
LEARN TO APPRECIATE VALUE
“My dad encouraged me to focus on the things I can control and not spend energy on things I can't,” said Peter Mallouk, CEO of Creative Planning in Leawood, Kan. “This is great advice for handling markets and choosing where to focus my energy when it comes to investing.”
And what's he telling his own kids? “I give them an allowance. When they want something they see at the store, I tell them, 'No problem: you're welcome to buy it with your own money.' This causes them to think and then they usually pass. They learn to appreciate value and make good decisions,” he said.
NEVER GO INTO DEBT
Jessica Searcy-Maldonado of Searcy Financial Services in Overland Park, Kan., said her father cautioned her: “'Don't go into debt for anything. Because when you're in debt, you feel anchored.' Of course I didn't take that advice, and it's no fun at all.”
So Ms. Searcy's advice to her own children is, “Don't be in debt for anything with anyone. If you can't afford something, don't buy it. There is something to be said for frugality.”
BE A PARTNER IN THE TRANSACTION
Art Doglione of Alpha Fiduciary in Phoenix says when his kids ask for money, his response is to make them a partner in the transaction. “I tell them they've got to have the first skin in the game, and then somebody can help you,” he said.
PAY DEBTS BACK EARLY
“My dad shared with me early on to be very careful about borrowing money and that if you do borrow money to always pay it back early,” said Anthony Mazzali of CG Financial Services in Haslett, Mich., another RIA who stresses being careful with money.
“I try to teach my kids the same lesson,” Mr. Mazzali added. “And though they should be willing to work hard for their money, they shouldn't let money define them or change who they are.”
LIVE WITHIN YOUR MEANS
Matt Cooper of Beacon Pointe Wealth Advisors in Newport Beach, Calif., the father of three sons, emphasizes the importance of living within your means and starting to save early. “Debt is saving in reverse: Instead of earning interest, you are paying it. It's like a 4-point switch in basketball: You miss the chance to score and the other team goes down the court and scores on you.”
PLAN FOR TOMORROW
To be sure, several RIAs noted that while building wealth is important in life, they also want their children to enjoy the journey. Lynn Miori of KMH Wealth Management in Victoria, Texas, said, “My father always told me time goes by so fast, in the blink of an eye. You have to live for today. It's really true.” For her own children, she said, “My advice is live for today, but plan for tomorrow.”
THERE'S MORE TO LIFE THAN MONEY
Thomas Reilly of Fernwood Investment Management in Quincy, Mass., echoed that sentiment when he said, “Life is short, so drink good wine, savor the moments you're with smart people and recognize there are many good things you can do that don't involve money. People should recognize there's more to life than monetary success."
"On the other hand,” Mr. Reilly said with a smile, “fine wine and flying first class don't come cheap.”
NEVER STOP LEARNING
Even two-time Super Bowl champion Peyton Manning, who over the years received a lot of fatherly advice from former New Orleans Saints quarterback Archie Manning, had some wise words to share. During his Elite LINC keynote presentation, he told advisers that no matter how far someone has come in their career, they should be open to learning and improving: “Don't ever stop being coached.”
Mr. Manning, who recently retired as one of the most successful gridiron leaders of his generation, recalled that when he faced a decision about moving from the Indianapolis Colts to the Denver Broncos, his dad said, “Whatever you decide to do, it's up to you to make it the right decision. Never look back: You go to work and make it the right decision.”
Skip Schweiss is managing director of RIA advocacy and industry affairs at TD Ameritrade Institutional.
