Physicist Richard Feynman once said, “The first principle is that you must not fool yourself – and you are the easiest person to fool.” More than most, advisors understand the truth at the heart of that claim. Even in their dealings with sophisticated clients, there’s often a wide gulf between perception and reality.
We tend to view our own finances with rose-colored glasses. Nearly two in three Americans ages 45 to 65 feel they’ll have enough money to hold them through their golden years, according to a USA Today poll. The reality? The median working-age couple had saved only $5,000 toward their retirement, as reflected in a 2013 study by the Economic Policy Institute. Only a third of working Americans are contributing to their 401(k) plan, and older Americans are entering retirement with more debt than ever before. Even high earners can have difficulty projecting how much they need to maintain the lifestyle they want in retirement.
Sitting with a client 20 years ago, going through the standard first-meeting questions, Sheryl Garrett was young, smart and secretly terrified. Despite her eight years in the business, she was plagued with self-doubt about her worth to older and more experienced clients. And she hated wearing business suits.