Mike Vick's Catharsis

For Mike Vick, Coming To Grips With The Lie Was The First Step In His Catharsis

(It could be yours as an investor as well)

By: Brendan Magee

*In Michael Vick’s words, “I had to go through what I went through to get to where I am now. I find myself in a position where I am willing to listen; I’ve got coaches who are going to coach me regardless of what or how I feel. If I’ve got an attitude one day, or just not feeling it at the moment-I’m going to get coached, and they don’t care: You step on that field and you’d better be ready. And I respect that to the fullest.”   

For investors, Michael Vick’s rise and fall as an N.F.L. quarterback serves as tremendous learning opportunity. In the November 2010 issue of Sports Illustrated, Vick comes clean about the lie he was living as the quarterback of the Atlanta Falcons, and how coming to grips with all the problems he created for himself, his family and team was the basis for his rebirth as one of the most exciting players in the N.F.L. this past season.

Many times as an investor coach I have seen investors ignore or deflect the truths about themselves as investors and continue to needlessly create pain and suffering for themselves and their families. As it was for Vick the solution was simple, but not easy, acknowledge the lie and admit the damage you’re responsible for. The biggest problem for investors and athletes is that it does no good if you are the only one you admit it to. To gain any power, acknowledgement of the lie has to be made public.

On the N.F.L. Network Vick admitted to his former coach , Jim Mora Jr., that as his quarterback he had been living a “lie.” After practice he would take game films home with him giving coach impression he was doing the homework. The truth was he never looked at the films. Taking the films home with him was a complete sham. We all know where and how Vick was spending his time and what it led to, 19 months in prison. That was his rock bottom point.

For Investors, the lie typically comes from not being able to answer questions that they know they should be able to answer, but can’t. How does the market really work? Can you measure the total amount of commissions and trading costs in your portfolio? Can you measure diversification in your portfolio? Can you measure risk in your portfolio?  These are amongst the 20 most important questions an investor needs to know the answers to, but in the overwhelming majority of cases, can’t.

As a result they are suffering. They suffer with the nagging doubts of an uncertain financial future. “How do I know whether or not I am investing properly?” They endure shattered dreams of retirement. “I thought I was invested conservatively. How could I lose half my 401k plan at age 58?” They lie awake at night with the uncertainty of not knowing whose advice to base their investment decisions on. “How do I know this isn’t another Bernie Madoff?”

Unlike Vick, most investors’ shortcomings are not posted on internet sites or aired on the national newscasts. The publicity and humiliation Vick suffered most certainly sped up the process of Vick reaching his personal rock bottom.   Most investors put on a brave face and pretend (lie) to their families and friends that everything is under control when in fact it’s not. So you have to ask yourself, “Have I suffered enough? Only you will know if you have reached your rock bottom.

The key in getting past the lie as Vick shows us is by coming clean with it. That means not only the lie, but also the damage it has done to you, your family, and anyone else who has suffered. In essence you take responsibility for it. The words actually have to come out of your mouth or it won’t do you or anyone any good.  Once that is done the power the lie took from you will be yours again.    

Mike Vick won comeback player of the year and has a bright future in the N.F.L. again. You might create and experience more abundance than you ever dreamed possible.

Brendan Magee is the president and founder of Inevitable Wealth Coaching in Drexel Hill, Pa. With questions, comments, or suggestions call 610-446-4322 or e-mail Brendan@coachgee.com. Follow him on Facebook at Brendan Magee-Investor Coach. You can also listen to him on the Investor Coach’s Show every Sunday morning at 10:30am on AM1340 WHAT.

*The quote came from the Nov. 2010 issue of Sports Illustrated.

Eagles Needed Coaching

Eagles Pay The Price Of Not Knowing The Questions To Ask

                                                                   By: Brendan Magee, AIF

All year long Philadelphia Eagles’ players get intense coaching. They get coaching in the offseason on how to train for the rigors of a 16 game season. During the season they get intense coaching on how to beat that week’s opponent. The coaching is intended to increase the players’ awareness as football players. The coaches want the players to more conscious of what’s going on around them on the field as well as what’s going on inside themselves. They get coaching not only on what to do to be successful, but also what not to do.

Unfortunately, what they needed and didn’t get was proper coaching with regards to their investments. Sports Illustrated Mobile recently documented that  three prominent Eagles players like a lot of other unsuspecting investors were victims in an investment scam that is in the multimillion dollar range. This unbelievable tail involves Triton Financial, an Austin, Tx.  based investment firm that hired former Heisman Trophy winners and former NFL players to gain access to professional athletes as well as everyday investors and get them to  turn their investments over to Triton Financial. Triton and their CEO, Kurt Barton, our now facing lawsuits filed by the Securities and Exchange Commission as well the Texas State Securities Board.

Now, the coaching the palyers and everyday investors need would have enabled them to ask the questions needed to stay focused, have clarity, and recognize the warning signs of an investment they should stay away from. They needed someone to help them ask the questions that would have sounded the warning signals and helped them to avoid this scam in the first place. They are not the only ones not getting the coaching they need. Millions of investors everyday are talked into decisions or unknowingly allow things to be done with their money that is not in their best interests. Unfortunately for professional football players, their lives, the good, bad and the ugly are on display for all to see.

Unfortunately for the victims of such scandals the odds are never in their favor in getting their money back. The best thing you can do is try your best avoid such situations. As I stated above the answer lies in asking the right questions. The first question that might have helped is, Can you measure the level of diversification in their portfolio? Another would have been, Have they  gotten a mathematical measurement of risk of your portfolio?

These two questions would have been a major piece of armor in deflecting Triton’s deceptive marketing campaign.  According to Sports Illustrated Mobile, Jeff Blake, a former quarterback of the Cincinnati Bengals had e-mailed marketing letters to 102 current and former players boasting about Triton’s 32% returns over the past five years.    

Before investing, these questions would have helped unsuspecting investors as to what the market rates of return were over that period of time. Investors would realize that anything claiming to have outperformed the market would have to carry a high level of risk. The investors would have asked to see what the measurement of risk on the investment was. If all they got back was broad ambiguous answers about risk and not mathematical measurements of risk that would have been a huge red flag. 

Also if they had  known how to measure diversification in their portfolio they would have asked to see how their money would be allocated and diversified amongst capital markets. Again if the response wasn’t in mathematical numbers this would have been another huge red flag.

Lastly, the question that might have saved their bacon would have been, Have they defined their investment philosophy? Before you can believe anybody, you have to figure out what you believe about how the world of investing works and how money should be invested. If the advisor standing before you  doesn’t share your philosophy, run do not walk in the other direction. The victims in this scandal if they asked to hear the philosophy of the Triton Investment firm and Triton couldn’t recite in 30 seconds their philosophy again this would have been a major red flag and a reason not to do business with this firm.

These are just a few of the questions investors need to be asking in order to make sure their investing their money as it should and avoid those looking to take advantage of them.

Brendan Magee is the founder and president of Inevitable Wealth Coaching in Drexel Hill, Pa. With questions, comments, or suggestions call 610-446-4322 or e-mail Brendan@coachgee.com. You can hear him every Sunday at 10:30am on The investor Coach’s Show on am1340 what. Follow him on Facebook at Brendan Magee-Investor Caoach.

The Convenient Thing Is To Fire The Coach

The Convenient Thing Is Fire The Coach

                                                                   By: Brendan Magee

                                                                2/14/2011

I was saddened to hear Haverford High School chose not to renew the contract of Jorge Severini. After 22 years as the schools boys’ soccer coach he had been the longest tenured coach in the Central League. He had distinguished himself and the school by winning over two hundred games, advancing to the District One Playoffs eleven times, and capturing the 1994 Central League Championship. However, none of that seemed to matter. The School Board announced their intentions on Feb. 3^rd, 2011.

Mr.  Severini was given no indication at the end of his last season that his contract would not be renewed and said he was deeply saddened and shocked by the decision. He said that he believed the decision was prompted by digital surveys which allow parents and students to voice their feelings, positive or critical, anonymously.

Now the question is, what does any of this have to do with investing? I believe that coaching high school sports and coaching investors have a few things in common. I speak from experience because I have done both.

The first thing is they are emotionally charged activities. Student athletes put their heart and soul into playing for their teams and working men and women put their heart and souls into creating a secure financial future for themselves and their families. People are proud of their accomplishments. At the high school level, sports get a little more competitive, and it’s not just about having a good time. Not everyone is going to make the team or be the star. No one likes to hear that their best wasn’t good enough, not the student and certainly not the parents. Disappointment and hurt feelings can turn into anger and frustration, and who is an easy target? The coach.

This is similar to an investor who has taken a lot of time and effort into building a nice sized portfolio. It’s difficult to hear that what you are saving won’t be enough to retire, or that your methodology is flawed. Again, it’s easy to have our egos bruised, and if someone hurt my feelings the easiest way to get them out of your life is to fire them.

The second thing high school athletics and investing have in common is that they are the ones who will decide just how much of the coach’s wisdom they will benefit from. They both have to put their egos aside in order to benefit from the coaching.

I remember coaching a high school boys’ tennis team. Now tennis is a sport that you have to be in shape to play competitively, and I had the team doing a running drill to improve their stamina. One of the boys asked me what good it was going to do him to run down to the fence and come back. His attitude didn’t allow him to participate in running drills to the he extent he needed, and a good tennis player couldn’t perform to the level he needed in long matches.

I had a client who was very upset in 2008 as she watched her investments go down in value. It wasn’t an easy time for anybody. She told me she was getting so upset not only by the losses, but also all the news reports about how bad the economy was getting. I told her to stop watching the news, and to use that time to take a walk or get out away from the media. She kept on watching the reports and her fear got to the point that she couldn’t control her actions. After a 30% loss she took her money out of the market and moved it into cash. The impact of the loss became permanent and she missed out on the market’s rebound.

In both cases the athlete and investor had more to do with their shortcomings than the coach. They chose not to take the coaching and paid the price.

Now an investor and a high school athlete have two options here. One is easy. Dismiss the coach. You can even blame the coach for your failures. There’s no power in that decision, but doesn’t it feel good to not to have to assume the responsibility for how things have turned out. The second is put your ego to the side. Listen to the coach not as someone who is being critical of you, but rather someone who is doing you the courtesy of being completely honest with you as to what your strengths and weaknesses are. As an athlete and an investor, the biggest problems you have are the ones you can’t see. What a coach really is a set of eyes, who can see what you can’t.

If we choose not to listen and implement the coaching, where you are at now is where you will stay.

Brendan Magee is the founder and president of Inevitable Wealth Coaching in Drexel Hill, Pa. With questions or comments call 610-446-4322 or e-mail Brendan@coachgee.com. Tune into his Investor Coach’s Show every Sunday at 10:30am on AM1340 WHAT or streaming on the web at www.am1340what.com.

When The Coach Is Most Valuable To The Investor

The Coach’s Real Value Is Making Sure We Don’t Get What We Want

                                                                        By: Brendan Magee

People often hire coaches. Most people would think the job of a coach is to make sure we get the things we really want. However, a closer look at the real value of a coach reveals their job is to make sure we don’t do or get the things we really want. I know this sounds a little crazy, but bear with me.

If dieting, the coach’s real job is to make sure you don’t eat the pies and the cakes. The coach makes certain you don’t stay in bed on those cold mornings when you are supposed to be at the gym. The coach makes sure you’ve made 50 sales calls that week rather than 35. We all know how adept we are in coming up with excuses (ones that seem very legit) that give ourselves permission to break the promises we’ve made to ourselves. We easily talk our way into behaviors and situations that sabotage our health, wealth, and well being every day. It’s the commitment our coaches make to us that acts as a barrier between the things we truly want and our humanity getting in the way.

I was reminded of this phenomenon in a recent conversation I had with a client. He is a really nice guy with a successful business that has endured in good times and bad. When this country speaks of entrepreneurs being the back bone of this country they are referring to my client.

A year ago he and his wife, I am grateful to say, gave me the company’s 401k plan business.  The other day he let me know that he did not like how I,nor, any other financial professional was getting paid. He said there was a lack of accountability in that I get paid whether his account went up or down. He had a real problem with that.

Through a phone call and a few e-mails I conveyed to him that I felt his pain and tried to make him feel better about how his 401k plan was being invested.  I also tried to explain that if the compensation arrangement he wanted (he pays a fee only when his portfolio goes up and nothing if it should lose money) could be arranged, it mean that his portfolio would go down in value, and as his coach I didn’t want that to happen.  Let me explain..

To the investor this sounds like the ideal situation, but let me explain the ways this not losing money could be accomplished. One, take all the money and dump it into U.S. Treasury Bills. This is an investment backed by the full faith and credit of the United States Government. Money invested here will never go below its principal. The investor has an ironclad agreement that their principal will be returned with interest at the end of the investment term. If that was all an investor wanted, it’s a perfect match. He’d always make a few dollars and feel better about paying his advisory fees.

Unfortunately, most investors want a little more for their money. They want their money to retain its value. Unfortunately, T-Bills do not do this job very well. From 1973 thru 2009 the rate of inflation in this country has gone up 4.5% every year, and the rate of return on T-Bills is only 5.76%. In T-Bills my money is not going to last very long because its purchasing power hasn’t outperformed inflation. Stocks have, but to outpace inflation I am going to endure times of negative returns. History shows that. It also shows if I try to avoid them I am sunk as I’ll explain below.

The other way we could try and avoid losses is to time the market. We could try figure out when stocks will be up and get in before the upswing and try and figure out when it’s going to go down and get out before it dips. The problem with that is we’re going to have to be able to predict the future at least two times (When is the market going up and when is it going down). Studies show this is a losing game to play. Between January 1, 1990 and December 31^st, 2009 there were 5,040 trading days. If I missed just the 20 best trading days in that time frame, any money I had in U.S. Large Co would have returned just 2.12% annually. This is as opposed to just having left the money in there, and lived thru any downturns which would have resulted in an 8.21% annualized return. In plain English market timing wouldn’t make any body happy in the long run.  

So where does this leave us? This is gut check time for the coach. The football coach could give in and let the team slide on some the drills it needs to do. A nutritionist could look the other way and let the patient load up on junk food. The trainer could tell the jogger to knock off after having run two of the four miles required. The investor coach could move the portfolio to fixed investments and maybe never again hear a complaint from a client about losses or fees. In the moment everyone will be happy. In doing so, the coach just sold out his client. They traded in theirs and their client’s integrity for a paycheck.

A true coach would never do that. They tell you not only what you want to hear,  more importantly they tell you what you need to hear even if it means you’ll become upset with them or even fire them. They make certain your words and actions are in sync with one another no matter what the situation is. This is never easy for the investor or client because, when you are at the point of upset, frustration, ready to quit, looks like all hope is lost that is when your coach is the most valuable to you, not when you are on the brink of success. Success comes from being to true to your word and there is no amount of money that can pay that bill. You both pay that with your ability to endure and stay disciplined.

 Brendan Magee is the founder and president of Inevitable Wealth Coaching in Drexel Hill, Pa. With questions, comments, or suggestions call 610-446-4322 or e-mail brendan@coachgee.com. You can alos follow him on Facebook (Brendan Magee-Investor Coach) Tune into his Investor Coach's Show on am1340 What radio.