As a financial adviser, I have the privilege of guiding a diverse array of clients toward achieving their financial goals. Over the years, I've observed that the most successful among them share certain habits that significantly contribute to their financial well-being.
The following is an overview of the three essential habits my most successful clients have in common. These practices are not only about managing money effectively but also about adopting a mindset that fosters growth, resilience and long-term success. They represent a holistic approach to wealth management, where clients are actively engaged in the process, making informed decisions and adapting their lifestyles to meet their financial objectives.
1. They commit to full transparency.
Transparency is not just a buzzword in the realm of financial management; it's a cornerstone of trust and success. The most astute clients recognize the importance of being open and forthcoming about their financial affairs. They understand that a comprehensive overview of their finances is essential for effective management, and therefore, they do not hesitate to disclose every aspect of their financial portfolio. This includes not just the assets and investments directly managed by their financial adviser but also other components contributing to their net worth.
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Stock options, performance bonuses, changes to their retirement plans and even expenditures on significant home improvements are all reported in full detail. Such a practice ensures no blind spots in their financial landscape, paving the way for a thorough and accurate analysis of their financial status.
Commitment to an annual financial audit is a hallmark of a disciplined and forward-thinking client. By agreeing to a systematic review of their financial health every year, clients demonstrate a proactive approach to their finances. While it seems like a reasonable routine on the surface, many Americans find it hard to commit to that level of transparency. In fact, a recent survey from Bankrate found that 42% of U.S. adult couples keep financial secrets from their own partners.
A holistic understanding is what allows for informed decision-making and strategic financial planning. It is the bedrock upon which long-term financial security and growth are built. By making this process a habit, clients ensure that every decision is based on the most complete and up-to-date financial information available, maximizing the potential for achieving their financial goals.
2. They prioritize action over words.
The true test of a financial strategy lies not in its theoretical soundness but in its practical application. My most successful clients are aware of this and prioritize action over words. The recommendations and strategies discussed during our meetings are only as good as their execution. These clients demonstrate a commitment to act, ensuring that the insightful advice they receive is not lost to inaction or procrastination.
The actions taken by these clients are as varied as the financial strategies available. For some, it might involve taking advantage of tax-efficient investment opportunities, such as executing a backdoor Roth IRA conversion to maximize their retirement savings. For others, it may mean rebalancing their investment portfolio to align with a change in market conditions or personal risk tolerance.
Their willingness to follow through with the necessary actions is a testament to their dedication to their financial goals. This follow-through is a critical financial management component, transforming strategies on paper into tangible outcomes.
By implementing the strategies outlined in the plan, clients can witness the materialization of their financial aspirations. Action embodies the commitment to one's financial future and is the catalyst for turning aspirations into achievements.
3. They actively embrace financial education.
My most successful clients value financial education and literacy, recognizing it as the foundation of sound financial decision-making. Unlike fleeting social media trends that can be superficial or misleading, as highlighted in a recent Nationwide survey that found 34% of adult respondents under 55 acted upon misleading or false financial information found online, formal financial education provides comprehensive and reliable knowledge.
They seek out credible sources of information, such as financial seminars, reputable publications and even educational courses. By grounding their understanding in solid financial principles, they ensure that their actions are not swayed by the whims of popular opinion but are informed by proven economic theories and real-world evidence.
The inquisitive nature of my clients is a crucial aspect of their financial success. They are not content with a passive understanding of financial concepts; they actively engage in their financial journey by asking smart, probing questions.
The drive for continuous learning among my clients is what sets them apart. Their relentless pursuit of financial knowledge is not a one-time event but a lifelong journey. An educated client is a powerful ally in creating a robust financial future, as they are more likely to make informed choices and understand the long-term implications of their financial actions.
Bringing it all together
Adopting these three habits is not just about improving one's financial situation; it's about embracing a philosophy of life that values foresight, discipline and a willingness to grow. If we can internalize these habits and apply them consistently, we open ourselves to incremental improvements and potentially transformative changes in our financial lives.
For those looking to enhance their financial health, the journey begins with these foundational habits that my best clients have mastered. Let their success inspire you to embark on your own path to financial excellence.
Securities and investment advisory services offered through Osaic Wealth, Inc. member FINRA/SIPC. Osaic Wealth is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth.
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
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