Perspectives from a CFP: How Does Luck Factor Into Your Finances?

By Brady Brewster, CFP®

We all have that friend – the one who seems to have been promoted quickly, bought a new house in that neighborhood, been on that once-in-a-lifetime trip – and wondered how did they get so lucky?

In many of my financial planning meetings over the years with clients from every walk of life, I haven’t uncovered a universal truth. However, I’ve been able to get a glimpse into the financial lives of many individuals and families and have noticed a pattern in those who tend to be more “lucky” than others. A few key themes have emerged:

“Luck” often favors the well prepared

Contrary to what many would assume about the financially successful spending patterns – these types of clients aren’t especially frugal.

They’ve gone through the process of determining what expenses bring them the most amount of happiness and choose to spend a lot of money in those areas, while avoiding others.

For some it’s international travel, for others it’s wine clubs or causes they are passionate about. It’s a truly personal characterization that few have really slowed down to determine for themselves.

They have money available at the right time

When it comes to the money they do save, “lucky” people are strategic about where they place it. 

They take the time to understand that there isn’t a singular investment account or strategy that can accomplish all of their goals. They realize that using a retirement account to fund a short-term real estate goal is inefficient, but that retirement accounts have inherent benefits that should be used in their long-term wealth building. 

Through a holistic financial planning approach, they are able to position their wealth to be in the right accounts at the right times in their life. While this isn’t a precise science, the flexibility and mental freedom this approach creates often help them capture the opportunities that pop up in their lives.

Another layer of this balanced approach is the mentality it helps to create. These individuals realize that nothing is guaranteed or certain. 

By creating a realistic plan and focusing on building their own wealth a part from any single source, they feel the mental benefits most associated with financial freedom much sooner than retirement. 

They’ve shared that this mental relaxation and decrease in stress allows them to be more focused in their relationships and more productive or creative at work, which often leads to accomplishing the next milestone in any given category sooner.

They create a realistic plans

Both in terms of how they look at their career and how their money is likely to grow, they don’t live as if everything will go right. They take a very grounded approach to the realities of their income, their situation, the limitations of their goals, complicated family dynamics, and risks that could throw them off course. 

Just like any successful business, they have a plan that considers what to do in the good times and in tough times. While these people aren’t pessimists, their grounded lens allows them to make health decisions that often go better than planned once given the time to play out.

They make decisions from multiple perspectives

These clients don’t go it alone. What often isn’t seen casually is the formal and informal network of advisors, peers, and support that these people have strategically placed in their lives over time. In addition to my team’s role as their financial planner, there tend to be 3- 4 others from these categories:

• Trusted family member or friend CPA
• Attorney or legal team
• Therapist
• Life mentor or coach

Situation-specific experts, such as:

• Relator
• Business broker
• Career coach

Ultimately, they make the final call for their decisions but are able to avoid many challenges by seeing the various paths in front of them through the experiences and perspectives of other people. Looking in from the outside, it appears these individuals are flawlessly navigating something for the first time. Whereas they are able to tangibly incorporate others’ experiences into their own life.

About the Author

Brady Brewster is a Financial Advisor at Grimm Bissell Wealth Management & Insurance Services. Located in Southern California, serving clients nationwide. He takes a relational, conversational, and practical approach to Financial Planning with his clients. To learn more about him or to schedule an introduction call, please click here.