“Stop Doing” #5: Stop Overpacking for Your Financial Journey


Steve Lowrie

By Steve Lowrie, Lowrie Financial

Special to the Financial Independence Hub

We still haven’t finished our list of financial “STOP Doing” tips. In fact, the list may well be endless, given the endless supply of popular financial products and promotions continuously appearing, disappearing and reemerging, each one allegedly new & improved.

It’s no wonder so many individual investors end up with so much excess baggage along the way. This month’s post is dedicated to making sense of all those competing investment “opportunities” with our simple advice: STOP overpacking for your financial journey.

During my years as an adviser, most of my clients have come to me weighed down by the volume and complexity of their overly packed portfolios. They desperately want to lighten the load, but they’re unsure what should be preserved and what can be safely jettisoned.

I’ve generally found three areas to focus on, helping clients lighten up after years of stocking up, keeping up, and/or moving up. Raise your hand if any or all of these traits sound familiar to you:

Stocking up

You’ve been knocking around Bay Street for a while and have accumulated quite a packed portfolio. You started as a do-it-yourselfer, purchasing stocks, bonds, funds, annuities and maybe some real estate recommended by friends and family. Along the way, you’ve established various banker/broker relationships, each of whom shifted some of your holdings around and added a few of their own. Then there are all those company retirement plan holdings from multiple careers. Ditto on all of the above for your spouse. It’s a tall order to simply list what you’ve got, where you’ve got it, and, most importantly, why it’s there.

Keeping Up

In Stop Reacting to Market Noise and Stop Feeding on Junk Media, we covered why it’s important to disregard near-term, breaking news when making long-term investment decisions. Still, when you’re in the thick of unfolding events it can be hard to distinguish the weather from the climate. Whether it’s volatile commodity pricing, bond slumps, stock surges, real estate bubbles or anything in between, you can always find a well-credentialed talking head proposing that it’s time to trade into or out of this or that market factor. If you’re not actively chasing the latest trends with continuous, costly trades, you’re at least spending too many sleepless nights worrying whether you should be.

Moving Up

Congratulations, you have achieved a level of wealth that has yielded a bounty of exclusive, invitation-only investment offers: hedge fund and private equity fund investments, private placements, real estate ventures, business partnerships and so on and so forth. Given the typical illiquidity, excessive costs and opaque arrangements involved, the investment benefits to be gained by stepping up to these more rarified investments are highly debatable. (As evidenced by this Motley Fool spoof “Two Hedge Fund Managers Walk Into a Bar,” I’m not alone in questioning the value of these sorts of “exclusive” offerings.)

What is not debatable is the extra complexity that they add to your ability to track, manage, account, and pay taxes on the holdings. They also can create significant extra headaches for you and your family in planning for and executing your estate plans, potentially at a stressful time when straightforward wealth transfer is most desired.

Lightening Up, To End Up Ahead

Whether it’s through stocking up, keeping up, moving up or all of the above, too many investors end up weighing themselves down with unnecessary costs and complexities that are far more likely to generate stress and uncertainty than additional wealth.

I’ve said it before and I’ll say it again: The best way to lighten your load for the long haul is to keep things simple. That is why one of my first acts when establishing a new client relationship is to take a good, hard look at the existing holdings, to see if we can achieve a happier, “less is more” approach. Let us know if we can take a look at what you’ve been hauling along with you.

Steve Lowrie holds the CFA designation and has over 20 years of experience dealing with individual investors. Before creating Lowrie Financial in 2009, he worked at various Bay Street brokerage firms both as an advisor and in management. “I help investors ignore the Wall and Bay Street hype and hysteria, and focus on what’s best for themselves.” 





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