by Rob Schulz, CFP®
April 24, 2012
Instead of the “Great Recession”, I have started calling the downturn of 2008 “Our Depression” because of the significant change in behavior, values, and attitude I have witnessed over the last four years. We are in many ways the sum of our experiences. What we have experienced over the last few years has been a very different reality than that of our parents.
I have no scientific basis for any of this but my clients, like myself, who have raised their children and built their careers in this millennium, are more similar now to our grandparents than our parents. I see nothing wrong with this change of attitude. Going forward global competition will demand a competitive hard-working ethic that was not present or really needed to achieve modest success in previous decades.
During the boom years it seemed as if risk did not exist. Nearly everyone believed their home value would increase by 8% or more every year with zero downside, any stock could double in value, and our businesses would likely grow exponentially for the rest of our working careers. We now know better and can properly dial risk into our financial planning scenarios for more realistic results and better long term success.
There has been a significant change in attitude with regard to personal cash flow planning. Prior to 2008, I could not convince any of my affluent clients to go through a cash flow or budgeting process. Now almost all of my top clients have a written cash flow plan with me that is updated at least annually. How we spend our money at home month to month is where financial responsibility begins. Being good stewards of our resources helps us appreciate what we have so we can live happier more productive lives.
During the boom years, many successful Americans were tricked into believing we could achieve “something for nothing” with little or no regard for risk, and that more money could nearly always be generated to meet ever increasing consumption. Today, most of my clients know there is a price for everything so all financial decisions must be made with careful consideration for the consequences. My clients seem more fulfilled today living their lives within set financial constraints and boundaries that many did not believe to exist only a few short years ago. Self control and the recognition of limits gives us the freedom to live life to its fullest potential. I know that sounds weird but it’s true!
With the market rebounding nicely 2008 is starting to feel like a distant memory, but the effects will always be there guiding our decisions and thought processes for the rest of our lives.
Rob Schulz, CFP®
Rob Schulz, CFP® is a Principal with First Texas Financial Services, Corp., and a Registered Representative through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. He is also an Investment Advisor Representative through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and FTFS are not affiliated. These are the views of Rob Schulz and not those of Cambridge, FTFS, or any of their affiliates. Material discussed herewith is meant for general illustration and/or informational purposes only, please note that individual situations can vary. Therefore, the information should be relied upon when coordinated with individual professional advice.
By Rob Schulz