“Off The Wall” Blog
Unique, straight-forward, unfiltered opinion on topics of concern for individuals with newfound wealth.
I had a great hour-long phone call the other day with someone who has been a client of ours for about a decade. A highlight of our conversation was discussing the similarity between money and tools.
Like money, tools are used to accomplish a task or set of tasks that yield an outcome.
There are different tools for different jobs. Some are very ordinary and common, like a shovel. Some are very unique, like a chainsaw.
Chainsaws, however, are purpose-built…a specialty tool. And not everyone needs one.
Most everyone has a shovel. It’s a good multi-use tool. You can dig holes, move dirt, scoop dog poop, hack roots, chop up ice, and pry things up out of the ground.
But chainsaws are different. Sure, they are cool and fun to use. I feel like a badass when I’m using one, and no horror movie is complete without one.
But they are not a general-purpose tool, and not everyone needs one.
While a lumberjack needs a chainsaw, a couple living in a small condo in Washington DC likely has no need for one.
Money is similar – it is used to accomplish a task or a set of tasks that yield an outcome…money is just a tool to procure what you want out of life when you want it.
But money, like tools, needs to be used correctly. An excellent Private Wealth Design and a solid portfolio are like a shovel…good for everyone. An exotic, expensive, illiquid, and complicated investment strategy is like the chainsaw. You don’t need it unless you are a lumberjack.
Many people feel like they need a chainsaw…but they don’t. If you live in a DC condo and feel like having a chainsaw, you’re likely only fulfilling an emotional need that is expensive and not useful towards accomplishing a task or yielding an outcome.
If you are a lumberjack, then yeah, you need a chainsaw. But most people just need to dig some holes and plant flowers in their yard. Or if they have a lot of dogs like me…well…you know.
Money is just a tool, so make sure you have the right tool for the job and eschew the emotional pressure to have the cool stuff unless it is essential.
Keep looking forward,
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David B. Armstrong, CFA
President & Co-Founder
Dave got into the industry when he discovered his passion for finance in his mid-20’s. He’s a combat veteran and served as an officer in the United States Marines Corps on both active duty and in the reserves, retiring at the rank of Lieutenant Colonel. While serving on active duty, Dave was unable to spend money on deployments, so he became a self-taught investor. Along with a few bucks cash as a bouncer, his investing performance grew to be good....
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