Family Wealth Advice: Financial Character Traits III

By Dr. Jason White
Director of Investments
Family Investment Center

Dr. Jason White is Director of Investments at Family Investment Center and an Economics, Ph.D. at Northwest Missouri State University

This is the final article of three on the application of Northwest Missouri’s Culture of Character traits to our personal financial lives. We last left off with a discussion of the trait of Cooperation.

One of the toughest character traits from my point of view is Perseverance, which is demonstrating determination and commitment to complete a task. This is undoubtedly one of the hardest on the list, but also the most rewarding. Financial Perseverance requires current sacrifice, by saving as opposed to spending, with a reward that may not be revealed until many decades into the future. Perseverance requires faith in your financial plan, trust in your advisor’s method, and the constitution not to waiver, even in the worst of times. Ultimately, a savings program will yield rewards, even when market waters are choppy and difficult to navigate. Steady as she goes!

Perseverance goes hand-in-hand with our next trait: Patience. Legendary investors like Benjamin Graham, Charlie Munger, John Bogle and Warren Buffett all have preached the importance of due diligence, followed by steadfast Patience in your investment choices. But, please do not confuse Patience with stubbornness or indifference. While the former is an example of laudable self-discipline, the latter reflects unwillingness to change for any reason, even compelling and/or rational ones. Patience is defined as the ability to remain calm and to wait for what you want. Like perseverance, patience is also a hallmark of the long-term investor.
Those who exude Confidence have visible freedom from doubt and a strong belief in both self, and in a power greater than themselves. Be Confident that your sector-diversified portfolio of mutual funds with strong management and somewhat boring, steady and reliable annual returns will always beat the high-flyers and quick buck artists that may make a big short-run splash, but invariably are a long-run bust with equal disruption. Confidence also means believing in the skills, abilities and advice of your financial advisor and any other professional service experts you hire. Assemble a group of people you would be willing to trust to oversee your mother’s finances without your oversight, and I guarantee financial Confidence will not be a worry for you.
Last but not least on our list of financial character traits is integrity. This means always doing the right thing even when no one else is watching. To be honest, financial Integrity may be a bigger problem for those of us in my industry, than for our customers. It seems that most every day I pick up The Wall Street Journal some broker, insurance, annuity salesman, executive or analyst has made news for engaging in illegal, or at least questionable, behavior. To the best of your ability, stay away from these folks. Many inhabit Wall Street, but they are sometimes discovered on Main Street as well. They always have a story to explain the “misunderstanding” that took place when a client fires (or worse, sues) the malfeasant party. My strong belief in the majority of cases of accused wrong-doing is that where there is smoke, there’s fire.

Well, that completes the list of Northwest Missouri Culture of Character Traits as I see them applied to personal finance. I hope you enjoyed reading them as much as I enjoyed writing them.