Those Little Lies We Tell Ourselves Add Up
Micah Shilanski, CFPⓇ, shares the impact too much bravado can have on your practice and how those little lies we tell ourselves keep us from reaching our goals.
3.5 min read
It’s no secret that one of my favorite perks about living in Alaska is the summer fishing. The rainbow trout here are unlike any other trout I’ve caught—and that’s no exaggeration. Although, exaggerating and fishing sometimes go hand-in-hand. We’ve all heard stories of fishermen catching beauties that seem to grow with time, as it’s easy to get caught up in your own stories
Imagine you caught a rainbow trout that measured 32 inches on the line.
However, by the time you reached the lodge, that trout had magically grown 32.5 inches. When you get home, you tell your wife that your fish is 33 inches long, which isn’t too far from the truth. And then, a few weeks later, when you tell your neighbor about your catch, it grows even more—which isn’t a big deal because 33 inches is practically 35 inches anyway by the time you round it off.
Before you know it, your trout keeps getting bigger, and after you’ve retold that same story so many times, it’s hard to remember just how big your trout was to begin with. It isn’t until you stumble across a photo of your adventure and see the fish stretched along your measuring tape that you realize your 40-inch behemoth was actually only 32 inches long.
The same thing happens in business with too many advisors.
We get a bit of bravado, round our numbers up because everyone else is, and before we know it, we’ve forgotten our actual stats.
If you start drinking your own Kool-Aid, and if it’s the wrong flavor, you will have some problems.
Unfortunately, we see advisors lie to themselves about their numbers far too often. I recently met with an advisor who proudly proclaimed that he had $60 million in assets at one percent, but when I asked to see his numbers, his gross revenue was only $400,000.
His revenue didn’t match his fee schedule, and it wasn’t until we crunched the numbers that he realized how far off he was.
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Another advisor claimed that she was running a fifty-percent margin which sounds fantastic. However, looking at her numbers, her gross billing says $600,000, but her tax return was only $200,000. That’s not a fifty-percent margin—it’s thirty-five percent.
Allowing yourself to get carried away with your stats is harmful and shows a lack of integrity. I know how easy it is to get carried away—I am a fisherman, after all—but most of us unintentionally lie to ourselves because we don’t want to come to terms with being out of integrity.
How do you get that integrity back?
You need to treat your office just like you plan with a client. You want to see what the actual numbers are. If a client says, “I have about a million dollars in my retirement accounts,” you’d ask for those statements.
When you’re dealing with your practice, you need the real numbers there too. These numbers include everything from your fee schedule to prospect counts and hours worked. Don’t be afraid to fact-check yourself when you feel like you’re getting carried away or guessing.
A solid rule of thumb is never to talk about your stats without the actual numbers out in front of you.
Now that you have the actual numbers in front of you, you can talk about those stats in terms of your goals.
What are your numbers, really?
Do you want to see if you’re drinking your own Kool-aid or being honest with yourself? Here’s a simple exercise you can do today to check yourself and get back on track.
Get out a piece of paper, a sticky pad, or your smartphone, whatever you can take notes on so you can write down several numbers in two columns.
Don’t you dare look these numbers up! Write them down from memory—no cheating! In your first column:
- How many houses do you serve?
- What’s your total AUM
- What’s your billing schedule?
- What was your revenue?
Now, open your computer, look up your actual numbers, and write them in the second column. Literally, pull your household count, your AUM, and your revenue.
Do your columns match?
Or have you been lying to yourself? If you’ve become a fisherman, welcome to the club—you’re not alone. But we do have to keep ourselves honest, and you need to watch your actual, not perceived, numbers.
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