I remember smiling when I heard this question – it’s a very good way to put a common problem that many investors have: they don’t have an exit strategy. Where are the goalposts? When have you made enough? At what point do you sell or cash in? There’s no right answer to these questions – it all depends on your personal goals. The real red flag, however, is not having an answer at all. Not knowing when (or how) you’re going to get out of an investment or business is often the first sign of emotional investing or lack of strategic thinking.
“You’ve done a really good job on your portfolio. Now: let’s imagine you get run over by a bus tomorrow. What happens next?”
This question was asked by a longstanding TIGER member based in New York with a reputation for candour. When he asked this, it was like throwing a grenade onto the table – it really provoked a passionate and spirited debate. His point was a very important one: having a portfolio is all well and good, but if you haven’t spent time on your estate plan, all your effort could be for nothing.
“Have you asked your spouse, kids, and business partner how they feel about your will?”
A question that was asked in one of the Los Angeles groups I attended. It sparked a lengthy discussion at the time. Some people believe an estate plan is a very private matter – they write it without really consulting or communicating with heirs. I can see the rationale for such an approach: it’s their money, and they should be able to decide what to do with it. But from what I’ve seen, the downside of such an approach far outweighs the privacy concerns.
In my experience, it’s never a good idea to give spouses, children, and/or business partners a shock or surprise in your will. Doing so simply encourages conflict and legal hassles. If you haven’t let your heirs know about your plans (or if you have no clue how the might react to some of your bequests), you might want to address the topic before they find out from your will.
“All this money you’re giving away ... how will you know it’s making a difference?”
A topic that keeps coming up in TIGER meetings. Cutting a cheque to a charity is all well and good, but if you’re looking to really make a difference, you need to follow up your charity with accountability.
Choose organizations that have built-in systems of transparency, accountability and financial reporting – organizations that are used to communicating with donors and telling them what’s going on. Alternatively, set up your own foundation or gift fund that accomplishes this. The point is not to focus on the dollars you’re giving, but rather what those dollars are actually accomplishing for your chosen cause.
If some of the top one-tenth of the 1 per cent are tapping into a confidential peer-to-peer learning group to be “care-frontationally” challenged to see if they have potential“blind spots, maybe it’s time for you to do the same exercise?
Thane Stenner is founder of Stenner Investment Partners within Richardson GMP Ltd., as well as Portfolio Manager and Director, Wealth Management. Thane is also Managing Director for TIGER 21 Canada (www.tiger21.com/canada). He is the bestselling author of ´True Wealth: an expert guide for high-net-worth individuals (and their advisors)’. (www.stennerinvestmentpartners.com) (Thane.Stenner@RichardsonGMP.com). The opinions expressed in this article are the opinions of the author and readers should not assume they reflect the opinions or recommendations of Richardson GMP Ltd. or its affiliates. Richardson GMP Limited, Member Canadian Investor Protection Fund.