Junk drawers, we all have them and it doesn’t matter what stage of life you’re in:
“Honey, have you seen the nail clippers?” CHECK THE JUNK DRAWER!
“Where is the extra deck of cards for pinochle?” CHECK THE JUNK DRAWER!
“One of the beer pong balls rolled under the fridge, where are the extras?” CHECK THE JUNK DRAWER!
When I meet with someone for the first time I often see something very similar in their finances. It looks something like this:
The first thing I say to that client is “good job.” And I mean it sincerely. Why? Because if someone has a junk drawer that means they have done something right. That something was they decided to start saving, and/or, something has happened in their life that made them realize they needed to add a financial tool to the equation. For example, a young couple gets married and buys a house so they purchase life insurance policies to protect each other on the mortgage. I love working with anyone who has shown a willingness to save, or has the ability to see a need for something as life circumstances change. Some of that “stuff” in the junk drawer might go away but there will always be a few things in that drawer that are a solid investment in their financial future.
So how do we end up with that junk drawer in the first place? Before people have decided to make the commitment of sitting down for a full financial plan, we all tend to make decisions one at a time and at different times in our lives. As we slowly collect various “products” at different stages of our life, we end up with a junk drawer that lacks coordination and direction. One of the more common things you will find in that drawer also magically tend to contain high commission products. I’m not here to debate the merits of some of those products (I’ll save that for a later post), but if someone sits down for a meeting with you and has a presentation laid out with a one size fits all solution AND you haven’t met them yet….run as far away as you can, as fast you can. In fact, the Lyft IPO is today, try them out if your Uber rating is low right now!
My meetings begin with a blank notepad, asking the client as many questions as possible. A good financial plan is not created with me talking, it’s created by me shutting up and letting the client talk. I need to know what they want. Often times the questions we ask make clients realize they aren’t exactly sure what they want, but by talking through it together with their spouse and family we can help clear up what may currently be a blurry vision. By clarifying goals and priorities, whatever products are necessary for that plan solve themselves. All of the sudden, the junk drawer has become a financial plan. So if you have a financial junk drawer, good job. When you’re ready to turn that junk drawer into a coordinated plan find a qualified Financial Planner.