When you think back to school, when you were young, do you remember who your first-grade teacher was? I do. It was Mrs. Evans.
When you think about first grade, that’s about the time when you realize school is not just about recess and milk. There is schoolwork involved. Hours of sitting in class, reading aloud, and doing some math. It’s the start of your next chapter in life. A rude awakening from a summer on the water.
When you think about your schoolteachers from kindergarten through twelfth grade, school seems straightforward. Just show up and do your work. But that’s easier said than done.
I can count on one hand the teachers who helped me along the way, who believed in me, but also pushed me. But for me to do what they asked, I needed to trust them. And I did. The first teacher I really trusted was Mrs. Evans.
Trust means the authority figure is doing right by you. It means you have confidence over time, that after investing your energy and doing what is asked of you, things will work out for you.
It’s no different in the real world. Suddenly, you’re graduating from work to retirement. How did that happen? How did I save all this money?
When it comes to your money, I hope you have had good experiences working with “teachers” like Dick Young whom you trusted. Teachers of money who acted as your fiduciary. Advisors who were required, like Your Survival Guy, to act as your fiduciary.
Are you working with a fiduciary? What is a fiduciary? If you aren’t sure your advisor is a fiduciary by law, you should find out. It can make a difference in what happens in your portfolio. In his 2009 article “The Fiduciary Principle: No Man Can Serve Two Masters,” the founder of The Vanguard Group, John (Jack) Bogle, explained the fiduciary duty as follows:
The concept of fiduciary duty has a long history, going back more or less eight centuries under English common law. Fiduciary duty is essentially a legal relationship of confidence or trust between two or more parties, most commonly a fiduciary or trustee and a principal or beneficiary, who justifiably reposes confidence, good faith, and reliance on his trustee. The fiduciary is expected to act at all times for the sole benefit and interests of the principal, with loyalty to those interests. A fiduciary must not put personal interests before that duty, and, importantly, must not be placed in a situation where his fiduciary duty to clients conflicts with a fiduciary duty to any other entity.
Way back in 1928, New York’s Chief Justice Benjamin N. Cardozo put it well:
Many forms of conduct permissible in a workaday world for those acting at arm’s length are forbidden to those bound by fiduciary ties. A trustee is held to something stricter than the morals of the marketplace … As to this there has developed a tradition that is unbending and inveterate … Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior … Only thus has the level of conduct for fiduciaries been kept at a level higher than that trodden by the crowd.
It has been said, I think, accurately, that fiduciary duty is the highest duty known to the law.
Action Line: You only have so many years of school, and then you’re in the “real” world. Then all of a sudden, you’re in your retirement. Life is short. Make it a great retirement life. Get the guidance you deserve. When you’re ready for a guide along the way, email me at ejsmith@yoursurvivalguy.com. And when you need a map, click here to subscribe to my free monthly Survive & Thrive letter.
Read the entire series here.
