written by Richard Laudon

My journey began probably before my birth, which occurred on 12/31/1947 in the early morning hours. It was a marriage milestone for my parents as I was the first born of three brothers. I even qualified as a tax deduction! In retrospect, my birth date had some far-reaching consequences. In those years, grade placement was determined by the calendar year rather than a more appropriate fall cutoff. As a result, my chronological age was considered more important than my developmental status. In this unrealistic situation, I was competing with “peers” many of whom had a ten to eleven-month advantage in their physical and mental development in relationship to myself. That discrepancy might not seem important during our adult years, but as a child it was an eternity. This difference in an elementary student’s life can be an impediment in both their academic achievement and self-image. According to my mother, I slept through first grade! The reason for sharing these insights about my formative years is because of the critical impact it had on my mindset and my decision-making skills later in life.

A brilliantly written book, “The Body Keeps The Score” by Bessel Van DerKolk, MD, explains that our subconscious holds onto these early experiences, which can have a major influence on our future responses to life challenges as well as financial challenges. Our gut responses to these stresses can be characteristic of this under recognized system. For the sake of brevity, I will condense my pre-profession years into a few sentences:

Some Personal Insights — The Early Years*

1) I was disorganized, distracted and borderline ADD

2) I was a late reader and hated math (still do)

3) I worked hard in school but performed poorly on all standardized tests especially the SATs

4) I was an introvert, who struggled with his shyness, which limited my social interactions to a few friends

*Some of these traits still exist today

Other important influences were that I grew up in a middle-class family in a factory town in Massachusetts. I was one of the first in my family to get a College education. Neither money nor sex were ever discussed in my family. Although sex was a popular topic among my male peers, money management was rarely shared in any conversation that I remember. My parent’s lack of knowledge in finance was compounded by their parent’s lack of knowledge.

After graduating from the New England College of Optometry and joining their faculty, I finally had an actual salary. At this juncture, I decided that it was time to organize my finances. This decision led me into my first encounter with the opaque and complex world of financial advisors. I asked a colleague to recommend an advisor to help me with my financial decision making and for guidance in the world of investing. Without any goals or even a rudimentary plan in mind, I was an unethical advisor’s dream client for exploitation. Despite my limited assets, I was treated like royalty by my advisors, who did not charge me any obvious upfront fees. Each visit consisted of a one-hour consultation, free coffee and a follow-up letter outlining our discussions and their recommendations. My only obligation was to follow their advice to the letter and sign on the dotted line.

I was going to be rich and I was even going to avoid paying taxes. I had found an insider’s path to utopia, I thought. I just did not realize that this road had many large potholes, dangerous curves, and unforeseen detours on my quest for financial independence. Ironically, the major obstacles were my naïve and my inexperience in managing money, which allowed me to accept their recommendations based on blind faith rather than sound and researched reasoning.

I will share with you the multitude of mistakes in Part 2 of this segment. As Yogi Berra once stated, “It’s like déjà vu all over again”. Mistakes are an integral part of our lives and a constant in any one’s successful investment strategy. Although they have been demonized in our educational system, they are an essential part of our learning process. Charles D. Ellis has addressed this paradox in his outstanding book, “Winning the Loser’s Game” about the intricacies within the stock market and the art of investing. The bottom line is that this period of chaos in my financial world created even more questions than answers. My inaccurate and negative attitude toward the concept of wealth and the wealthy had many of its origins during these years, based on my peers’ and my parent’s biased opinions about these individuals.

The key lesson from this phase in my financial development has evolved around a persistent theme, the concept of designing an appropriate plan as noted in my previous article, “Financial Uncertainty — Enhanced by the Pandemic”. Through the act of avoidance or denial, we often do not learn the consequences of not having a plan. For this reason, I have listed a few guidelines, which are invaluable in the preparation of creating an appropriate template for the present as well as the future.

When you have a plan, you have defined goals and expectations.

When you have a plan, you have specific benchmarks for comparison.

When you have a plan, you are accountable and responsible for your desired outcome.

When you have a plan, you have a way to learn the difference between good and bad decisions.

In simple terms, investing without a plan is like navigating a plane in a dense fog without an instrument panel. In the next “Stepping into the Financial Wilderness — Part 2,” I will explore my experiences with my financial advisors in more depth and my ultimate decision to take responsibility for my financial destiny. In conclusion, my childhood and undergraduate college years were adversely impacted by these early experiences on both a conscious and subconscious level. In truth, I had limited confidence in my ability to make any important decisions without second guessing myself. My risk tolerance was focused on maintaining the status quo and not rocking the boat. These traits started me on my ultimate successful journey to financial independence at a significant disadvantage. Obviously, no one can live a life devoid of challenges and frustrations — the key is how you deal with these situations. Everyone’s journey to financial independence will have periods of euphoria and bitter disappointment.

Although a proactive approach does not guarantee success, being passive or minimally involved has the potential to be the cause of reoccurring financial nightmares. An anonymous quote, which has been a guiding light for me as I have transitioned from these turbulent times into retirement, stated the following: “If you don’t believe that money matters, trying living without it”.