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The 5 Essentials for Smart Investing

By: Jason Hartman |

As a part of my series about The 5 Essentials of Smart Investing, I had the pleasure of interviewing Mike Broker.

Mike Broker is a leader in the financial planning and investing space and understands the need to work diligently in the moment to build something great for the future. He began his fiduciary focused and financial advisory career in the beginning stages of the Great Recession of 2008. Mike quickly gained great experience working with clients as they strived to recover and get ahead during a difficult time. He’s also the author of the book Fit Financial Approach. To write the book, Broker utilized his background as a Certified Personal Trainer to coach his clients and team members to great success, paving the way to grow quickly into the role of Chief Strategy Officer at Trilogy Financial. As an Investment Advisor Representative with Trilogy Capital, Inc., in which he holds his Series 65 Registration. He holds his Series 6, 7, 24, and 63 Registrations with LPL Financial and his Life and Health Insurance License. Mike leverages his expertise every day to help Trilogy clients build the path to saving, investing, and pursuing their dreams. It would be a great asset to share his five things essential to smart investing.

Thank you for doing this with us! Our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?

Hi! I’m happy to. With the last name Broker, it’s hard to say my path to finance wasn’t fate. My path to the financial planning industry actually started with a car accident when I was twelve years old. It was a bad accident that resulted in piecing my face back together and a bit of money for the trouble. Being a good steward of the funds awarded, my dad introduced me to his financial advisor, and I fell in love with the profession. All I wanted to do was help people live better, and at a very young age I realized that financial planners could do just that.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?

I started in this business as a financial advisor who only wanted to help clients improve their lives; I didn’t want to lead anyone or manage people. As I was improving my skills and growing as a planner, I found that sharing what I had learned personally and professionally was a way that I could impact more and more Americans. I went from running a small team, to managing a larger team, to an office, to becoming an executive for a national firm — kicking and screaming the whole way. As a sole advisor, you can only comprehensively help 150 to 200 families before running out of time and capacity. In my current role, I have the opportunity to impact far more families nationwide. I’ve learned not to shy away from risk and challenges. Don’t let your prior judgments and expectations hold you back from trying something new. You never know — it could become your new passion, or an opportunity to create real change in your corner of the world.

Are you working on any exciting new projects now? How do you think that will help people?

At Trilogy Financial, we are working on helping everyday Americans feel confident about their future. We’re working to build a scalable, yet individualized approach to financial planning and coaching that may help people make critical financial decisions — ones most Americans feel ill-equipped to handle on their own. We are building a movement that should help those in our country who really need it and have been continually overlooked in financial planning. In an industry known for selling products and lacking integrity, we are working towards becoming a brand that Americans can turn to when they have questions and concerns about their money.

Ok. Thanks for all that. Let’s now jump to the main core of our interview. According to this report in Fortune, nearly two-thirds of Americans can’t pass a basic test of financial literacy. In your opinion or experience what is the cause of these unfortunate numbers?

Financial literacy is not a set of concepts you can tell someone, and they may remember for the rest of their lives. You cannot memorize a list of facts and regurgitate them on a test. Financial concepts are also intimidating for most Americans, and they can seem overwhelming and complex.

The truth is that financial literacy is a set of information that all works together, and it can be easy to learn if you’re willing to take it one step at a time and apply the knowledge gained as you learn.

Some of the basics are dollar-cost averaging, diversification, asset allocation, inflation, and compound interest. You can learn investment strategies, investment tools, financial products, taxes, and the like. You could also hire a financial advisor to educate you and use their extensive knowledge of all of these concepts to guide you in building a plan, just as you would hire a personal trainer to show you how to use the machines and utilize proper form while working toward good fitness.

If you had the power to make a change, what 3 things would you recommend to improve these numbers?

  1. I would add a personal finance curriculum in schools early and often. My wife works in education, supporting schools and districts with math curriculum and implementation. Kids learn math by building little by little, understanding and mastering the last skill before adding the next. They build this knowledge and skill over years before using math every day as an adult. In the majority of America, we don’t teach kids about personal finances. Many parents don’t feel confident enough to teach their kids what they know, so kids are left to trial and error.
  2. Consistent titles in the financial planning industry. I’d love to see some consistency and enforcement around the titles in financial planning. Someone who provides comprehensive financial planning, sells insurance, sells mortgages, and isn’t licensed could be called a financial advisor. I think the title of financial professional should be for those who are not licensed; “advisor” reserved for those who are licensed but do not do full planning; “financial planner” should be reserved for those who offer planning to clients.
  3. Amnesia from past public opinion. The financial planning industry has had a poor reputation for some time, and rightfully so because the American consumer often starts at a place of distrust with financial advisors. However, studies have shown that having a financial advisor helps Americans make better decisions with their money over time. I would love to see more people willing to seek out a planner’s advice when they have money issues or goals, rather than not engaging because they are afraid of being lied to or sold a product with no merit.

Ok, thank you! Now to the main question of our interview: You are a “finance insider.” If you had to advise your adult child about 5 non intuitive essentials for smart investing, what would you say? Can you please give a story or an example for each?

  1. Don’t watch the market day-to-day. Financial plans are built over a long time. The day-to-day market is unpredictable at best, and making emotional changes to your long-term plan based on short-term changes can be detrimental to your future.
  2. The news sells ads, not information. The news reports that the market drops far more than the market gains because people will stay glued to the television when the market is going down. They are not giving you all the facts; instead, they give you the information you need to stay tuned during the commercials. My advice: just turn it off.
  3. Ask yourself “when is the best time to plant a tree?” The best time to plant a tree was twenty years ago, because it would be big and fruitful today. If you didn’t do that, the second-best time to plant a tree is now! Get started as soon as you can, as the most valuable resource you have is time, no matter how old you are.
  4. Remain “risky” in retirement. A portion of your investments should be set aside to keep up with inflation. Many people think you should retire and move your investments to cash or bonds, and the problem is inflation could eat away at the value of those investments. Living a long time could strain a too-conservative plan.
  5. Boring wins. If you see someone telling you to get on the next get-rich-quick scheme or invest in something that will “hit it big,” run in the opposite direction as fast as you can. Planning is about habits and long-term discipline and getting rich quick happens to very few lucky people. If you’re reading this article, it’s probably not you. Investments that are tried and true can be risky, but you know the risk you are taking for the relative reward you could receive. Stick to investments that make sense to you, and stay away from the flashy, enticing ideas.

What are your thoughts about investing in cryptocurrency? Can you explain what you mean?

I’m not going to go in-depth on what cryptocurrencies are, but it’s important to understand that they are highly speculative and are subject to many unique types of risk. The technology behind it, blockchain technology, is rapidly evolving with the possibility of impacting businesses way beyond just digital currency. I suggest you do your own research on blockchains and their role in cryptocurrency systems.

What are your thoughts about day trading using apps like Robinhood? Can you explain what you mean?

Day trading is essentially gambling, as the short-term markets respond to emotions, news, fear and greed. No one knows what will happen, and even if you have the best resources in the industry, an unexpected world event can instantly unravel your plans. Markets over the long-term respond to fundamental economics and trends, so when planning for the future you want, you could produce results if you stick to your plan over a long period.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

I am very fortunate to have the upbringing that I had. My dad taught me the importance of having a financial advisor and saving my money. He helped me open a Roth IRA to begin funding when I had my first job at 16 years old. Then, despite my being brand new when I became a financial advisor, he was my second client who trusted me from the beginning. Thankfully, it has worked out for us both, and I wouldn’t be where I am today without the start he provided.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

“Esse quam videri” is a Latin phrase that means “to be rather than to appear.” When I was coming up in the business and learning my way around financial planning, I was struggling with having clients trust my recommendations. I went into my manager’s office and complained, “I just want to be seen as someone they can trust!” His advice has been burned in my memory, and I have repeated it many times to those who look to me for advice — “If you want to be seen a certain way, don’t wish to be seen that way. Just BE it. If you want to be seen as trustworthy, work to become trustworthy. Make good recommendations. Become a better planner. Then, and only then, will you be seen as trustworthy because you will be.” Sage advice.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂

Health and wealth! Many Americans are unhealthy and unprepared for their financial future. If I could create a movement to impact people the most, it would be to have Americans take a Fit Financial Approach to life!

Thank you for the interview. We wish you continued success!

Securities offered through LPL Financial, member FINRA/SIPC. Investment Advice offered through Trilogy Capital, a registered investment advisor. Trilogy Financial and Trilogy Capital are separate entities from LPL Financial.

Thank you for the interview. We wish you continued success!

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