Mission Statements

Welcome to another edition of Mr. Stillman's opus water storefront here with you today alongside Johnston today on the podcast talking about, which is of a new talk about with your clients, and folks were learning about financial planning on sleep right out of the gate. You always are. Talk about is you don't come through this office without talking about mission statements, but money. I understand there's a curveball today were to talk about in a way in which I get quiz while we have a game so elegant what's been sounding medically to make less attention to children play a game today rated and you'll get an F. If you don't do what's my punishment if I don't do well you will be fired. I am going to give you a mission statement. Okay, you tell me what company or organization that belongs to. I'm never get these matchup things Will start with some easier ones to get you off on the right foot and when I say technology I mean you have a chance potentially of getting is McDonald's. The answer to the first. It is not McDonald's is not on here not let to prevent and alleviate human suffering. In the face of emergencies by mobilizing the power of volunteers and the generosity of donors in the organization is I'm circling around FEMA, the Red Cross Red Cross that the Red Cross are very good. It sounded a little too flowery to be FEMA so yeah FEMA's governmental organizations design flowery about the right. Here's another one you could possibly get the maintenance of international peace and security. That's certainly going to be one of the military organizations right maybe I'm not the one thing pleased with you since a wartime maintenance of international peace and security can't undergo NATO O could guess it's the UN, the SAME thing right twice a good we save people money so they can live better people monies it's close to Geico on a number of pass on.

I'm not out the Walmart Walmart. What makes you live better bring inspiration and innovation to every athlete in the world. If you have a body. You are an athlete that sounds like Nike that is Nike.

How about alts. If you have a body you are listing for probably dispute that statement on some level I this will probably be a tough one. Build the best product calls no unnecessary harm use business to inspire and implement solutions to the environmental crisis. How I was gonna say Google but then he said environmental crisis.

If you've ever heard. Greenpeace, the CEO of this company speak of Elon musk, Patagonia, and another thing Patagonia company get that he's the calls himself the reluctant businessman. He never wanted to grow the business. He's never wanted to grow fast is going to make a good product and people quit by while to organize the world's information and make it universally accessible and useful. That's Google really wanted to not give that away when you said Google prematurely.

Ask Jeeves is G still around. I don't Google it for what happened SKs to refresh the world to inspire moments of optimism and happiness to create value make a difference is pretty vague to refresh the world clues being dropped to refresh the world. Deer Park about Coke elk Coca-Cola.

Let's see to be one of the world's leading producers and providers of entertainment and information using its portfolio of brands to differentiate content services and consumer products. I'm really disappointed that their mission statement is not better than that.

That's so vague and could apply to a thousand different company universal line on this Walt Disney okay same question on that one and the last one which is obvious because you've heard me talk about it. 9000 times. We are ladies and gentlemen serving ladies and gentlemen, that is the owner. I have heard it. Eliza never stuck yeah really I was way way way not Hilton it's it's it's it's a hotel chain.

The Royal current Royal Caribbean Cruise Ritz-Carlton Reno late like this is embarrassing Ritz-Carlton of the Ritz-Carlton to many different things morphing around I talk about that all the time.

The importance of their mission statement. It's interesting to hear the other companies but I will tell focused that when this will ladies and gentlemen serving ladies and gentlemen, because when you adopt that and you let it seep into you. It really dictates how you behave in the pride he taking a working well. What does any of this have to do with your portfolio well obviously if we can sign a very specific mission statement every dollar that you have. We can give a lot of clarity as to how the dollar should be invested. We can assess how well that dollar is doing is behaving as a non-mission statement or not.

So of course you know in our process we talk about our seven different mission statements that we will have for retirement right we want to have an emergency fund primary things we want from those dollars are liquidity and safety be available at a moments notice and not subject to loss all we want big-ticket items so we need a new roof of the house in a few years. Her new car. How are we funding that particular expense we want. Predictable monthly income.

We want growth to outpace inflation. We want fund money to give us money for hobbies or travel or whatever it is it's fun for us in retirement.

We want money for healthcare and I don't mean paying health insurance premiums, but any long-term care, assisted living and legacy and for some people that seventh one legacy is not as important while people say they want spend their last dollar they want their last check to bounce, but for some people it is important so we want to be sure that we have a plan in place for that. So let's talk about why a particular dollar needs to have mission statement so will use the emergency fund is an example how much money do you have in the bank right now as an emergency fund. No pressure from you on the spot. I meant to give you a vaguer answer. You may, less than one months worth of expenses.

See, that's not very good right it was more than a month, but it just got used because you had an emergency. Write down our dog, but that's that qualifies you will build it back up, but I'm I'm building two or three months so you as I know, I've always kind of just been bad about keeping a good emergency. If you want to be in the 3 to 6 month range. Were not talking just mortgage full expense.

What will it cost you to live your life per month and that's all that much more important in retirement because we can't just go out and sell more and get more commissions next month. If we have a emergency we need to cover. You could also make it three months of typical earnings that be another way to view that impregnable bit more, but the problem is a lot of people don't like having money in the bank because it's not growing and not getting any. It pains me to have even just one little bit.

But here's the thing. The mission statement we gave to those dollars was emergency fund so we don't care that is not really that was not its mission statement right so we want those dollars that we don't have too many dollars in that world, but we will have the right number of dollars accomplishing that mission statement for us.

It doesn't take away the pain that they're still not earning what we wanted to be earning but it does make it more understandable income, predictable monthly income.

That's a completely different mission statement were going to have some things that by their very nature, providers, predictable monthly income like pensions and Social Security. That's what they do is give us a predictable monthly income. But then you might have investments where that's their mission statement is to give you predictable monthly income right will then when the market is having a great month are great year you say what's wrong with this account is not growing nearly as much as some of my other investments. What's wrong with less because growth was not its mission statement predictable monthly income was its mission statement. Therefore, it's invested in a different way let's talk about the growth mission statement, you know, this is where you going to be subject to loss in any given day, because that growth money is real. It's going to have a longer timeline on whether it's five years or 10 years or 20 years. In some cases once we determine the timeline that's going to determine the amount of risk that's going to determine how much we could lose at any given moment is money. We don't need for 20 years, yet you might have 4035% downside on that money sets a great comparison for me. Just as you see this money in the emergency fund not earning anything that causes little pain right well you can have very similarly money in your growth bucket.

But if you're just if you're not viewing it through the mission statement we are your love it when it's going up but when it starts going down that's causing the same kind of pain is the money that you see not earning in the emergency fund see again just keep both of those things in context and understand there's going to be the dips on this one side and that's why we don't have the dips on the something right and so within that growth, mission statement, you're basically going to have sub mission statements of my conservative growth. My three year growth versus my 15 year growth will in that 15 year growth bucket yeah we can't freak out will lose money because we have to remember the timeline and so once we go through all 70 mission statements, and we assigned a very specific mission statement to each dollar that dictates how it should be invested. That also dictates how we evaluate whether or not those dollars are doing their job. Since is a really good mission statement said but kind of a fun way to paint the picture with the other statements I have one for you to wrap up Imagination at work, imagination at work see now why I would've thought Disney would have some like that run short and sweet imagination to big company, imagination, or, appliances is just one thing they do a major part of h.h. gregg and not a truth going out of business right they are at h.h. gregg might sell the brand. Best Buy sells this or not.

Good guesses GE you got it. G mail donation. It works good imagination on the podcast that I appreciated. Always fun to give you entertainers and called again hey I like laugh at myself. I think lack of over 50% maybe will close to the reason for left almost very embarrassed at the Ritz-Carlton Alaska. That was bad that was. I was embarrassed my role as a teacher that it took you so long to answer that correct. I think it's one of those branding things where you remember the slogan so well that then you forget who it was for accuracy commercial pilot a commercial who's it for I pray commercially initially in effect. If you can't type to work on my branding will just Ritz-Carlton call them out. Thank you joining us on the podcast today John and thank you for listening. Will talk again next time on Mr. Stillman's opus