Mark Tepper - Exceptional Wealth: Clear Strategies to Protect and Grow Your Net Worth

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Copyright 2018 Mark Tepper

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From Confessions of a Former Financial Advisor: 5 Things I Didnt Tell My Clients, by Erik Carter. From Forbes, December 13, 2015. All rights reserved. Used by permission and protected by the Copyright Laws of the United States. The printing, copying, redistribution, or retransmission of this content without express written permission is prohibited.

Excerpt from Capital Without Borders: Wealth Management and the One Percent by Brooke Harrington, Cambridge, Mass.: Harvard University Press. Copyright 2016 by the President and Fellows of Harvard College.

Excerpt by Rory Vaden from RoryVaden.com. Copyright by Rory Vaden. Reproduced by permission of the author. roryvadenblog.com

Charts from Putting a value on your value: Quantifying Advisors Alpha. The Vanguard Group, Inc. Used with permission.

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Print ISBN: 978-1-62634-456-3

eBook ISBN: 978-1-62634-457-0

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To my family, my clients, and the Strategic Wealth Partners teammy heartfelt thanks and appreciation. Im glad to have all of you as my partners in this journey.

CONTENTS

INTRODUCTION

YOURE WEALTHIER THAN YOU REALIZE

What is wealth? Its a word with endless definitions. More to the point, wealth means different things to different people. So as you begin reading and you ask yourself, Am I wealthy? dont forget to ask, What does wealth mean to me? Your answer will have a lot to do with the value you get from this book.

To illustrate, heres a parable about wealth and life that I really like. You might be familiar with it, but even if you are, its worth reading again:

An American investment banker was at the pier of a small coastal Mexican village when a small boat with just one fisherman docked. Inside the small boat were several large yellowfin tuna. The American complimented the Mexican fisherman on the quality of his fish and asked how long it took to catch them.

The Mexican replied, Only a little while.

The American then asked why he didnt stay out longer and catch more fish. The Mexican said he had enough to support his familys immediate needs.

The American then asked, But what do you do with the rest of your time?

The Mexican fisherman said, I sleep late, fish a little, play with my children, take siestas with my wife, Maria, and stroll into the village each evening where I sip wine and play guitar with my amigos. I have a full and busy life.

The American scoffed and said, I am a Harvard MBA, and I could help you. You should spend more time fishing and, with the proceeds, buy a bigger boat. With the proceeds from the bigger boat, you could buy several boats. Eventually you would have a fleet of fishing boats. Instead of selling your catch to a middleman, you would sell directly to the processor. Then you could open your own cannery. You would control the product, processing, and distribution. You would need to leave this small coastal fishing village and move to Mexico City, then L.A., and eventually New York City, where you would run your expanding enterprise.

The Mexican fisherman asked, How long would this all take?

Fifteen or twenty years.

But what then? asked the Mexican.

The American laughed and said, Thats the best part. When the time is right, you would announce an IPO and sell your company stock to the public and become very rich. You would make millions!

Millions? And then what?

The American said, Then you would retire. You could move to a small coastal fishing village where you would sleep late, fish a little, play with your kids, take siestas with your wife, and stroll into the village in the evenings where you could sip wine and play guitar with your amigos.

The point of the story isnt to paint the fisherman as a saint or the businessman as a greedy stereotype. Each represents a valid choice: to be a small, independent businessperson or a capitalist entrepreneur. The message is that the Mexican fisherman already has a life that gives him everything he needs; in his mind, hes wealthy. It may not be the American businessmans version of wealth, but that doesnt matter.

The word wealth means something different to everybody. For some, wealth is all about the numbers on the balance sheet. For others, it could be about what your money empowers you to do, such as live your lifestyle without fear of having to scale back when you retire. True wealth is about having the freedom to enjoy the things in life that are most important to you: family, leisure time, volunteering, and so on. So how do you know if youre wealthy? Youre wealthy if you have the resources to live the life you want to live, without compromise.

It doesnt matter what anyone elses definition of wealth is. Yours is the only one that matters. Helping you achieve your optimal version of wealth is the reason I wrote this book.

YOURE PROBABLY WEALTHY

Do you have a net worth between $1 million and $5 million? Congratulations! Youre doing very well. You occupy a stratum of the American economy ranging from about the top 10 percent to the top 3 percent. If youre over $5 millionsay, with a net worth of $10 millionyoure really in the rarified air: the wealthiest 0.7 percent of American households. But even with that kind of wealth, do you really think of yourself as rich?

If not, you have plenty of company. According to a 2013 report from investment bank UBS, only 28 percent of Americans with $1 million to $5 million in assets consider themselves wealthy.your first salary raise. Its likely that you were thrilled about it... for a while. But before long, your lifestyle adjusts, and you become just as dissatisfied with that level of income as you were with the previous one. You start looking toward the next milestone.

All this would seem like a behavioral curiosity were it not for one sobering fact: Not realizing their own wealth leads some investors to pursue poor and sometimes costly financial advice. Shockingly, there are people who earn $250,000 or more per year, with a net worth of more than $1 million, who insist on calling themselves middle class. You may be smiling because youre one of those people, but before we move on, let me set you straight about your wealth. If you have a household income of $250,000 and investable assets of $1 million, you are in the top