An Example of The Distinction Between MORE-on Personal Financial Planning & ENOUGH Personal Financial Life Planning
The Third Ave Focused Credit Failure:
When Third Ave Focused Credit failed (invoked no redemptions), I am sure many a ‘planner’ heard – complaints and was blamed if it was in a client’s portfolio. The primary focus of the discussion should not have been on Third Ave Focus itself – but – if truly managing goals rather than assets (i.e. really doing personal financial life planning) the initial response by the ‘planner’ (which I guarantee it was not) should be to ask the client to ask himself:
1- Do I still have ENOUGH (or on target) relative to my withdrawal or accumulation goal
2- Where did Third Ave Focused Credit fit relative into the goal
3- Why Third Ave?
Given the allocations, one's cash position and backups (ssi, and reverse mortgage) - do you still have enough per goal?
The Fit: Third Ave Credit to begin with - basically would have been at the top of an income portfolio - not for consistent income - but it was a method of takeover using bonds - which would result in income and gains - with a bond base - which has been Marty Whitman's forte for 50+ years i.e Kmart etc
Why Third Ave - because it was under Whitman's supervision who other than Marks at Oak have been two of the if not the preeminent vulture capitalists using bond plays for decades.
Finally, third ave credit isn't alone on the hit it has taken - other funds of this nature are down 40%+ - a lot has to do with oil plays and even some health investments.
But the real question - the first question- is does one still have ENOUGH – or on target to enough. If a person is satisfied he or she has ENOUGH - that takes the blow out. If one only focuses on the day to day - this is a jolt especially given Whitman's background and supervision.
The question again to put things in context - does one still have ENOUGH or on target to ENOUGH per the goal or goals?
Thus analysis - after the fact - is a micro view of an asset not of a goal. Secondly, the analysis is just that - not personal financial planning let alone personalized financial planning. One manages goals not assets.
ENOUGH Personal Financial Life Planning Philosophical Discussion
Per the above, I hope I made the vivid distinction between financial planners (who are really just applying financial techniques to personally held assets) and personal - even personalized financial 'life' planning - managing goals not assets. By and large, so called personal financial planning - especially those on commission, fee and commission and yes even those on a % of assets under management are just asset managers in personal financial planning clothing. Thus, this financial planning is just a Trojan Horse for assets under management.
But the reality is there are no parasites without a host - and the host is client's MOREcondria derived from the Yetzer Hara (derivatively The Yetzer MORE inclination). This is not to exonerate - but rather my observation.
At the bottom is man's identification with his body as 'his sense of sense' and fearing extinction his strategy is acquisition (again in Hebrew acquisition is Cain - yes as in Cain and Abel) in delusion to solve mortality or at best palliate.. The derivative of the acquisition strategy is MORE and the impetus for certainty, permanence & continuity (even though more, better, now has a habit of becoming less, worse, later). Thus, there is never ENOUGH in this heuristic
This so called personal financial planning of managing asset NOT goals - is a logical symptom and why when an asset goes bad the question isn't 'do I still have Enough?' but rather blame, shouldas, couldas etc.