CFI Blog


It is a narrow mind which cannot look at a subject from various points of view.”

– George Eliot

George Eliot

I’ve had a tricky back for a long time. I remember first going to the doctor about it when I was a plebe. It didn’t really bother me much and would occasionally spasm up, but then the spasms would go away, and I’d carry on. I finally had a chiropractor do x-rays on me and he discovered that my right leg was ½” shorter than my left leg, causing me to tilt my pelvis, and make my back unhappy.

I recently was at my chiropractor getting treatment (by the way, if you’re in Fort Worth and want an awesome chiropractor, I wholeheartedly recommend Dr. Brian Mulhall). When I first went to him after we’d moved to the Fort Worth area, he said something that was music to my ears, not only because of a potentially lower cost of care, but also because it’s how I try to run my financial planning firm.

In an ideal world, I’ll see you one time, and we’ll figure it out and send you on your way, and I’ll never see you again.

Sometimes, that doesn’t happen, though. Some issues, such as my lifelong back issues, take a little more work to iron out.

While he was kneading away at me, I asked him if the subsequent soreness was similar to a workout and due to lactic acid.

He said it wasn’t, that he wasn’t really working the muscles; he was working on my connective tissue – which is why it felt like he was trying to grind my pelvis with his thumb.

He went on to explain that trying to solve back issues was really a matter of perspective. Some people think it’s due to misalignment of joints and bones, and if they can get aligned, then the problem goes away. Others think it’s a muscular issue, and if they treat the muscles with massage or electric stimulus, then the pain will go away. Others think it’s an issue with core muscle strength; weak core muscles cause the back to overcompensate, and by strengthening the core, the problem will go away. Even others think it’s a matter of treating the pain with drugs, and if the drugs can make the muscles relax, then the problem will go away. He thought my particular issue had to do with my fascia – the connective tissue – and likened it to trying to iron my body out flat and deal with the problem of bunched up fascia. If that wasn’t the issue, then he’d test out another theory and perhaps take a different perspective to get at the root cause of my back issues.

My first thought upon hearing this was “Gah! You hit a spot! Oof!” but then I had another thought. Financial planning is similar – people have different perspectives about what is causing them problems, and the same blunt force approach with everyone (“I’ve got these great investments I can put you in!”) doesn’t work. By the way, that “I’ve got these great investments I can put you in ” approach never works.

The Kaleidoscope of Financial Planning

Financial Planning

Let’s be clear. 80% of personal finance isn’t rocket surgery. Spend less than you make. Put the excess money in investments that, over the long run, have a good chance of beating inflation. Get proper and appropriate amounts of insurance. Live long and prosper.

Sounds easy enough, but oftentimes, we get in our own ways and prevent ourselves from following that game plan. Our limbic systems, or Monkey Brain, as I call it, get in the way of us doing what we know we should do.

There are cases where people are in control of their spending. They know what goes out and where it goes, and they’re not buying man cave toys and Jimmy Choo shoes on a weekly basis. Then, it could be an income problem.

Sometimes, they’re afraid of the market, and they either don’t invest, or they invest far too conservatively and can’t beat inflation.

Other times, they’re in good shape as long as nothing bad ever happens in their lives. However, a car wreck or one litigious idiot could wipe out what they’ve worked so hard to achieve.

We won’t know until we get behind the drywall

We won’t know until we get behind the drywall

I’m a real estate investor. I occasionally buy houses that are in pretty bad shape. Some of them have plumbing or electrical issues. When I’m going through the punch list with my property manager and contractors, I have to ask how much something is going to cost. Invariably, though if there’s an electrical or plumbing problem, the answer will end with the phrase “but, we won’t really know until we get behind the drywall.”

What appears to be an issue on the surface may not be the actual cause of the problem, and the contractor has to dig deeper to find the root cause of the problem.

Sometimes, it’s a quick fix. Sometimes it’s complicated.

The contractor trying to fix the problem never says, though, “it’s X and that’s how I’m going to fix it.”

He uses perspectives to answer the question of what is wrong and what needs to be done to fix the problem.

In the same way, I’m going to have to do investigative prodding to get to the root cause. If you think you’re going to talk to me about how to invest a lump sum of money and I’m asking you if there are ways you can increase your income, it’s not because I didn’t hear you when you said that you have a lump sum of money that you are looking for advice on how to invest. It’s because the lump sum of money is one part of the puzzle, but it’s far from the only piece of the puzzle.

A strip mall “investment advisor” will hear the question “how do I invest the lump sum of money?” and immediately try to convince you that there’s a great front-loaded mutual fund that you need to put your money into yesterday.

An insurance salesman who sells indexed universal life insurance products will try to convince you to pile it all into a MEC policy because of “tax and investment” reasons.

When you’re a hammer, everything looks like a nail.

Usually people who come to me do so for two reasons:

  1. They need some foundational information and training and whatever they’ve done up unto this point isn’t working. They’re at step 1: admit that you have a problem. Most of them, unsurprisingly, have spoken to a strip mall investment advisor who tried to steer them into investments that are profitable for that strip mall investment advisor but probably not the best idea for the people on the other end of the transaction, and they wisely stayed away from taking that advice. For them, if they’re in consumer debt, I tell them to read Dave Ramsey’s The Total Money Makeover (#aff) and follow his advice until they’re out (though I don’t agree with all of his advice, and you can read here to find out why).
  2. They have a pretty good idea of what they’re doing, but they need someone to validate their plan. They are still going to be subject to the risks of the Rumsfeld “unknown unknowns,” but they figure that I probably know more “known unknowns” than they do, and they want to validate that what they’re doing is the right way and see if there are tweaks to the plan that I can offer. Sometimes I can offer some constructive feedback, and sometimes I’m in the happy position of saying “well done, carry on.” Thus armed with an increased certainty about what they’re doing is what I would do in their shoes, they can live their lives and put financial worries in the corner.

In either case, though, a little probing is necessary, and I am going to apply multiple perspectives. Like a good doctor who tries every alternative before recommending surgery, a good financial planner looks at multiple facets of your life to see where the most impactful moves are available.

While most personal finance is fairly straightforward, sometimes you just can’t see the answer because of some of the other things that have built up in your life. Just as my chiropractor couldn’t knock out the solution in the first visit because of a lifetime of injury, you may need to explore different avenues before getting to a plan that’s appropriate for you.

I’m no fan of the “everyone’s a precious little snowflake” meme, but, at the same time, the constant brochure-handing paean from the “investment advisor” touting his great front-loaded mutual funds is never the right approach.

The right answer depends on your perspective.

Author Profile

John Davis
John Davis is a nationally recognized expert on credit reporting, credit scoring, and identity theft. He has written four books about his expertise in the field and has been featured extensively in numerous media outlets such as The Wall Street Journal, The Washington Post, CNN, CBS News, CNBC, Fox Business, and many more. With over 20 years of experience helping consumers understand their credit and identity protection rights, John is passionate about empowering people to take control of their finances. He works with financial institutions to develop consumer-friendly policies that promote financial literacy and responsible borrowing habits.

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