Hank Haney

Recently I attended an event where I had the privilege of listening to Hank Haney share his wisdom and knowledge about golf, coaching, and life. Among over 200 PGA Tour professionals, Hank coached Tiger Woods 150 days/year for six years.

Hank made some distinct correlations between how he approached the game of golf and how he approached coaching and life. I found his wisdom also applied to the principles of wealth management.

Here are a few of Hank’s nuggets:

• The passion for what you’re doing leads to everything else.
• Pay whatever price is necessary to learn and get better.
• Diagnose the situation, the person, and the personality.
• Make a plan. As Antoine de Saint-Exupéry said, “A goal without a plan is just a wish.”
• Motivate your plan one moment, one day, one shot at a time.
• Develop great students by building relationships first.
• Always accept responsibility.
• Make things their idea.
• Communicate the plan; communicate the plan; communicate the plan.

There are no easy shots and no hard shots; they are all just shots.

Three Phases to Golf

To understand how Hank’s golf analogy fits into wealth management, we need to understand a few basics about golf. The first is understanding that you can’t just hit the ball the same way every time. There are three phases to golf:

1. The Tee Shot – The first strike to get your ball going in the right direction.

2. The Approach Shot – The strikes you take to get your ball closer to the goal.

3. The Putt – The finesse strikes to reach your goal.

Three Phases of Wealth

Like golf, wealth is built on three phases:

1. Build Wealth
2. Protect Wealth
3. Distribute Wealth

Build Wealth

Managed money, protected growth accounts, accumulation annuities, and permanent cash value life insurance can help you build wealth. Term life insurance or disability insurance will not work to build wealth.

Protect Wealth

Annuities, protected growth accounts, life insurance, disability insurance, and long-term care insurance can help you protect your wealth. Money invested in the stock market can be risky due to volatility and does not pay a death benefit or replace income due to a disability.

Distribute Wealth

Managed money does not distribute wealth efficiently because of the risks to the safety of your money. Annuities protect your money from market volatility and guarantee lifetime income. Properly structured cash value life insurance policies distribute tax-free cash flow in retirement.

You may have heard about all these financial products and strategies; however, efficiently blending them together during the three phases of your wealth journey is not easy!

Golf Clubs

To understand the complexities of wealth management, let’s go back to the golf analogy. Golfers are allowed to have up to 14 clubs in their golf bags; each one serves a specific and unique purpose.

A common golf set-up includes:

1. Driver
2. Pitching wedge
3. Sand wedge
4. Gap wedge
5. Lob wedge
6. 3-wood
7. 5-wood
8. Putter
9. 5 iron
10. 6 iron
11. 7 iron
12. 8 iron
13. 9 iron
14. 4 hybrid

To be successful in the game of golf, it is important to understand the function of each club in your bag. You wouldn’t use your pitching wedge to tee off on a par 5, or your 3-wood out of a sand trap, or your driver on the putting green.

Golf may be simple to understand; it is not easy to play! The same is true for wealth management.

How Many Clubs are in Your Advisor’s Bag?

Is your financial advisor licensed and certified to carry all the financial clubs available to help you design and build an efficient lifetime wealth plan?

Does your financial advisor “like” all the financial clubs available?

Will your advisor recommend the proper products and strategies for each phase of your lifetime wealth journey?

Does your financial advisor regularly help you design wealth protection and preservation strategies into your lifetime plan?

Is your financial advisor helping you project a retirement income stream that will at least cover your living expenses the rest of your life? Do you KNOW how much money you will have to spend each month, each year?

Or does your financial advisor only carry a 5 iron in their bag:

• They only manage your investments
• They only sell annuities
• They only sell life insurance

Risks are on the Horizon

There are many risks to the safety of your money as you approach the “Protect Wealth” and “Distribute Wealth” phases of your money journey. The biggest risks are:

• Market Crashes
• Increasing Taxes
• Timing of Market Returns
• Safe Withdrawal Rates
• How Long You Will Live

If you would like to see how close to the hole your current financial plan will get you, I’ve got a bag full of 14 polished clubs ready to swing into action on your behalf.