Does That Case Come in Titanium?

February 1, 2001

Imagine it: You work for five years on the deal of your dreams, finally get the sale, and actually acquire a nest egg of considerable proportion to save or spend at your discretion (gasp!).

Sound impossible? Well, like the lottery, it could conceivably happen to you, my friend--or, Lord willing, even to me!

In light of this, in an effort to be properly prepared, I called my friend and colleague Mike, who certainly seems to know what he’s doing when it comes to money. At least he smiles between commission checks, whereas I am becoming disturbingly familiar with the taste of bologna.

Here’s Mike’s advice: To get started on the right path to a Sound Financial Future, you first need to make sure your legal bases are covered by the appropriate wills and powers of attorney. That way, if you’re whisked off by aliens from Mars, you’ll still be running the show. Resist any temptation to take this step lightly, or you may someday wake up from a coma to find your nephew has reinvested your assets in midget robot wrestling.

Next, unless you’re as savvy as Mike, you should see a Qualified Financial Planner, a person who’ll lock the door behind you and not let you out until you can satisfactorily explain why you shouldn’t depend entirely on real estate investments to fund your future, why a diversified portfolio inside a Roth IRA is better than a straight REIT, how your time horizon affects your financial decisions, and what year the ‘modern portfolio theory’ won the Nobel Prize (1990).

This person will likely ask you several hundred questions, take a blood sample, and force you to memorize the metaphor about stocks versus bonds being like chickens that lay eggs in the morning versus those that lay at night. Or was that the one about taking from the rich to give to the very rich?

(Good Lord, I’m glad I took that “The Zen of Real Estate” CE seminar.)

Before you escape the financial planner’s clutches, the importance of reading a mutual fund prospectus will be explained to you in minute detail, so be prepared to break out in a sweat. A great deal of emphasis will also be placed on “risk tolerance,” which is your adviser’s way of trying to determine just how big a loss would have to be to make you keel over in shock.

If you survive this, you’ll have generated a plan and be allowed to become a big-time investor. While you’re waiting to see whether you’ve made a good plan, or whether you’ll be eating Twinkies in your twilight years, it’s important to keep an optimistic attitude.

Yes, there are 10,000 mutual funds out there. But you’ve undoubtedly picked the best. Your data has been scientifically analyzed by a computer program that practically assures you’ve been matched to funds that suit your appetite for risk, your investment preferences, and your dog’s sweater size.

You should sleep well knowing that, barring a nuclear holocaust, you’ve done your best to put your financial ducks in line.

Or, you could follow my plan: Stuff the money into a stainless steel case and hole it up in the bedroom until I retire—at which point I plan to roll around in it with the glee of someone who never had a margin call or bear market to worry about.

Jean Stites sells real estate with Century 21 Westberry Realty in Villa Rica, Ga.

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