"The story of my life I take her home
I drive all night to keep her warm and time
-- "The Story of My Life" by One Direction
I can't believe I'm about to say this, but I think that song by the teenage pop band is awesome!. My daughter and her friends keep listening to it.
One of her friends knows the lyrics to all of their songs and even the birthdays of each member.
In case you're wondering, no I'm not obsessed with the band. I just really like this one song.
The story of One Direction is fascinating and can teach you a thing or two about your personal finances.
Let me explain.
In 2010 they auditioned for the X Factor TV show in the UK, but none of the 5 kids knew each other. They auditioned as solo singers, but none of them made it to the final.
One of the astute judges thought their voices complemented each other well, so they got them together and formed a 5 member band. The band made it to the final round even though each singer by himself did not.
And the next worldwide sensation was born. Supposedly they're concert this year will generate $1 billion in sales.
What does this have to do with your finances?
You see, most physicians -- whether you have a financial advisor or not -- focus just on one or two specific parts of your finances and ignore the rest.
Or you simply don't know how the other parts of your financial life relate to the other parts.
Here are a couple of examples:
You buy an indivdiual stock or other investment without knowing how that particular investment effects the other investments in your portfolio.
You hire a financial advisor to manage one of your accounts but not the others.
You don't figure out how your 401k relates to your IRA, your taxable account, your spouse's IRA, or any other investment account.
You don't know how the investments in each specific account relate to the investments in your other accounts.
You don't know how changing an investment in one account effects the investments in the other accounts
You don't realize how insurance planning relates to investment planning, or how investment planning relates to retirement planning, and so on.
In other words you focus on the parts and not how those parts fit together in a unified investment plan or financial plan.
The members of the teenage band One Direction might not have amounted to anything if that one judge on the show didn't recognize how combining their voices produced something which has indeed been greater than the sum of its parts.
It's the same way with your overall financial life and your investment and retirement portfolio.
And it's how I approach my clients' financial lives -- and almost all of them are physicians.
If that's something you're interested in exploring, just click on the following link, and we'll set up a time to discuss your situation and figure whether we're a good fit to work together:
I can't promise you we'll form the next great pop band if you become a client and I become your personal financial trainer, but what I can promise is that you'll receive objective advice and that I'll help whip you into shape.
Setu Mazumdar, MD, CFP®