Robert Wuflestad, contributing author

The term PORP, from Max De Pree’s book, “Leading Without Power”  discusses the “Place of Realized Potential”.   Which is that place where your team is bringing their best game, challenging each other while challenging the status quo; things are happening not because of you, but because of the qualities of the group.  I have had glimpses of this in organizations and I have seen it in churches, social groups, and even civic organizations. 

Every organization has a “Place of Realized Potential.” 

• Unsettling change
• The opportunity for people to learn and grow through challenging work
• Empowered people working together within a trusting and caring social environment
• A movement with momentum
• Passionate celebration

The pursuit of PORP starts with the leader and a realistic picture of current reality. The leader’s job after all, is to define reality.  This is hard work, because most of us are comfortable and don’t want deal with reality. Reality may mean realizing incompetence, disappointment, failure; or it may even mean naming the proverbial “elephant in the room”.  If you want a PORP, it is ultimately going to mean change, maybe deep change, probably even changing your DNA as a leader.  It will take planning, it will take courage; but the journey will make you grow, and force growth in your organization. 

Have you found your place of realized potential?

Related Posts

• A Marketplace for Wealthy Donors
• Socially Responsible Investing: A Brief Primer
• Impacting Your Community

Sorry you missed the ‘live’ webinar, we’ll let you know when our next one will be.  In the meantime, do you have any questions or feedback for us?

Related Posts

• Webcast on Enhancing Wealth in The New Normal
• Welcome to the New Normal

The high points in summary are as follows:

1. When fully phased in, the top long-term capital gains rate could climb from 15% to 23.8% including applicable surtaxes, and ordinary dividends will no longer have preferential treatment.
2. Regular marginal tax rates will increase from 35% to 39.6%.
3. Shifting income into 2010 could be an interesting tax planning strategy to review in light of the changing future environment.

Tax Planning – Health Reform Legislation

As in every year, we help coordinate tax planning discussions with our clients CPAs and this year could very well be one of the most important in recent memory.  Add to the list Roth IRA conversions and other phase-outs and it could be quite interesting and provide plenty of opportunity for our CPA brethren to add value. 

The last time I checked, tax savings are just as valuable and spend just the same as profits from investment accounts.

Related Posts

• What, No Estate Tax?!
• Three Tips for Better Investment Results
• The 15 Secrets of Wealth Management

Not planning:  It’s painful, it’s not a priority, it’s not exciting.  It’s the “ostrich” approach (head in the sand)!  “Not planning” can sound like…

1.  “Why plan? It seems like I have plenty of money.”

It’s common for people to underestimate the amount of assets required to create financial independence. Overspending is a risk at all wealth strata, especially in the U.S.  Lifestyle costs keep increasing over time without any restraints, and this can rapidly deplete your resource safety net. This has been especially pronounced during the financial market declines we have witnessed during the past decade. So, be aware of lifestyle costs and choices, and know what level of spending your wealth supports.

2.  “I don’t have wealth management needs because I don’t have liquidity.”

This is the other side of the coin, and it is just not true, plain and simple.  Yes, you need liquidity at some point to pay for lifestyle and to enjoy your life, but many of the same planning issues need to be addressed regardless of whether you have a certain level of liquid assets.  Wealth creators, whether liquid or illiquid, need thoughtful wealth management.

3.  “My spouse and I don’t talk about money issues.”

What’s the number one cause cited for divorce in the U.S.?  Disagreements about money.  Money issues – how it’s made, how it’s saved (or not), how it’s spent (or not), how it’s invested, and how it’s given to people and causes – can become relationship lightning rods unless couples have open, honest conversations about it.  Explore your personal “money history,” and share it with your spouse and with your advisor – this is a critical step to ensure that everyone is comfortable with the plan…so everyone will pull together and in the same direction.

4.  “I don’t have a will.”

Death is guaranteed – it’s a part of life – so plan for it.  Taking care of your family when you are no longer alive is every bit as important as when you are still living.  And, once your will is done, don’t forget about it.  Pull it out every few years, and make sure it speaks to your wishes.  You should also have your attorney confirm that your will is up to date with respect to our ever-changing laws.

5.  “My attorney and CPA are advising me, so everything is handled.”

Wrong.  Don’t misunderstand me – attorneys and CPAs are important.  But, professionals often work in isolation and there tends to be limited collaboration and data sharing, which means a cohesive and coordinated plan isn’t in place.  Not only are skilled wealth managers knowledgeable in multiple topics such as investments and financial planning, they can also integrate their knowledge with your other advisors and create a team that works together toward your goals.

Not planning effectively:  Sometimes this is as dangerous as not planning at all.  I’ve heard “not planning effectively” sound like…

6.  “My house is an investment asset.”

Not really.  Typically, your house is a consumption asset or a place to live, and therefore part of your lifestyle.  (In very specific cases, you can consider it, or a portion of it, part of your investment asset base.)  Historically, residential real estate generally has a very low average return, and it should not come into play when discussing investment strategy.  This also comes in the form of buying too much house for the size of your asset base – and our recent mortgage crisis has put this painful lesson on a very public stage.

7.  “I can manage my investments – I’m successful with the rest of my business.”

It’s the “Midas touch” syndrome.  Increased and unfounded self confidence can lead to a lack of proper due diligence and oversized investments that put financial freedom at risk.

8.  “I’m invested in such-and-such, but I don’t really understand it.  My friend told me about it, though, and it seems to be working for them.”

Just because your golfing buddy uses this money manager or someone in your book club owns some hedge fund, that doesn’t mean it’s right for you or your circumstances.  Yes, be a participant in the investment process along with your team, but be intellectually curious, thoughtful and disciplined in your approach.  Remember, complexity is the enemy of the wealth creator, and clarity is your ally.

9.  “I don’t know how to make sense of the opportunities.”

Wealth creators are often given the chance to invest in all sorts of deals.  Introductions to these opportunities may come through personal connections: advisors, friends, and colleagues.  How do you make sense of them all?  Are the deals “good deals?”  How do you evaluate them?  Do they fit with your values, goals, and sensitivity to risk?  If they don’t, do you struggle to say no because of the personal connection?  Private investments can make sense in wealth creators’ portfolios, and they are often appealing because they resonate with the investor’s entrepreneurial bent.  The disciplined wealth creator, though, will have an investment plan and know to filter opportunities through it…so not only can they say yes or no to the deal, they’ll know how, and why.

10.  “I’m diversified.  I’ve spread my money around to a bunch of different brokers.”

For a group of musicians to become an effective orchestra, you need a conductor and a score.  Likewise, a set of accounts and investments doesn’t become an effective portfolio until there’s a manager and a plan.  A capable wealth manager and a comprehensive plan will go a long way toward keeping harmony between your assets and your goals.

One of the greatest strengths any of us can develop is a keen sense of where we are not strong, and then get people around us to help us and look out for our “blind spots.”  I’ve encouraged that in my team at Highland, and we do it for the clients we advise.

What are some mistakes you have made?  What have you learned along the way?

Related Posts

• What Do Wealth Creators Need?
• Are You a Wealth Creator?
• Investment Planning: Are you in the game?

If you knew you only had today to live, how would you spend your time?  What things would you choose to do?

My guess is that you would make sure to spend time with people you love and you might even go do something super fun, or see something that really mattered to you.  As I contemplated it myself, I think the day would be marked as much by the things that I wouldn’t do as by the things I would choose to do. 

For example, I wouldn’t get frustrated or angry with someone but instead would laugh often; I wouldn’t worry about rushing from place to place but instead would focus on staying present in each moment; I wouldn’t focus on mundane tasks and busyness in favor of meaningful conversations and relationship; I wouldn’t worry so much and waste time on fear-based thinking but instead explore life.

The reality is that we really don’t have any control over how much time we have on this planet.  The funny thing is that planning for the future is critical to what we do at Highland, and it’s very important, but it can give a false sense of control.  Living fully present in each moment and focused on today is all we really have for sure.

Try this simple exercise: Before you do the next thing in your day, ask yourself, what if today was my last?  How would you choose to live it?  My suspicion is that you might need to make some adjustments or different choices about how you’re going to spend your time.

This doesn’t mean that you don’t go to work (nice try), but instead use it as a way to evaluate if you are doing the things that bring meaning and value to your life, even at work.

We all have things we have to do but maybe don’t want to, but the key is to minimize these types of items and instead of stubbornly doing all of them regardless, use this screening mechanism to evaluate what needs to change today.

What would you do if today is all there is?

Related Posts

• Live a Fulfilling Life
• What Will People Say About You When You Die?
• What Do Wealth Creators Need?

• Less compartmentalization and more integration of the various roles I fill—business owner, husband, father, friend, and individual.
• A willingness to share how I’m feeling, whether good or bad.
• Clarity about what I want and need in my life.
• Less worry about what others think of me.

A few weeks ago, I was talking with Cameron Herald, The BackPocket COO.  I was introduced to Cameron by Les McKeown, author of the popular book (and blog) Predictable Success.  Cameron is a very successful guy in his own right, and we were getting acquainted on the phone when he said something that has really stuck with me.  He said (and I’m paraphrasing), “when you are working or living in your authentic self it’s so easy that it just naturally flows and you almost don’t need to even think about it.” It’s that state of living where “who you are” at the core is completely aligned with “what you’re doing and becoming.” 

He went on to talk about his ability to speak in front of people, and how easy that is for him to do; he doesn’t struggle or need to work at it.  How often I can row against the tide of my life instead of riding with the current; letting my gifts, my natural abilities, the things that come easily to me, and just letting them flow.

I realize that it would be unrealistic to think I can always be in that authentic zone, living fully, but my desire is to be more authentic, more often, which can lead me to a life of ease much quicker and with much less work.  It takes so much more energy and effort to be who I’m not or what others want me to be.  So, why work so hard if I don’t have to?

What can you do to live a life of ease?

Related Posts

• Live a Fulfilling Life
• You Only Have One Life to Live
• Creating the Life Story You Desire…Now

I don’t know about you but I hate to fail.  Failure just sucks.  It is so much more fun to win and be successful.  Unfortunately, failure is a part of life.  I guess that makes me a poor loser.  In the past I would just stop with that last statement and then try even harder to win next time.  I called that perseverance and I even held that up as a virtue but I was missing something significant.

Just to be clear, I do believe that persevering is a critical element in creating the opportunity and environment for success to happen, but only through failure have I really learned and gained wisdom; and wisdom has been beneficial in my life and those I come into contact with.

The reason I (and most people) are not interested in failure is because it usually means pain of some sort and we all want, and were taught, to avoid pain.  I am not suggesting that we need to seek out some kind of failure induced suffering, but instead that we change our focus from the failure and move it to the adjustments we can make.

It’s all about the adjustments.

I learned this recently when the second quarter team goal that I was responsible for didn’t get accomplished.  I had an opportunity to model failure in front of my team.  I could have made excuses (and have in the past), I could have denied or ignored it (ditto), but instead I took a different tack.  I told my team that I failed, but most importantly, I laid out the adjustments to the plan that I felt would allow me to be successful during the third quarter.  This was liberating for me because I was honest about the disappointment with myself but also what I planned to do about it.  My team even got to speak into my adjustment plan and feel vested in what I was doing.

This kind of humility and transparency are vital in an organization and especially one that you want to build trust.  I am not perfect and I need to accept that and model what happens when I fail or I can’t expect anyone else on my team to do the same.  There is no getting around the fact that it’s hard to do, but the benefits far outweigh the personal apprehension you may be feeling.

Don’t get me wrong, this doesn’t mean I am accepting a lower level of performance expectation or commitment from me or the team, in fact, what you will find is that the faster you can learn how to adjust, the sooner you can reach your team goals.  Fail-adjust. Fail-adjust. Fail-adjust.  Getting stuck on failure is where I have gone astray previously and now try to move to adjustment much quicker.

If you want to know more about the impact on my team, feel free to drop me a note or give me a call and I’d be happy to share more about what I’ve learned in this area.

P.S. Go for it.  The sooner your team knows you are human and fail too, the more of your energy will be focused on adjustment, and the sooner you will see significant impacts on your team success, energy, and performance.

Related Posts

• Making Portfolio Strategy…Better

There is a difference in importance between just plain “activity” in my life and “urgent and important” things.

John Wooden, the legendary basketball coach at UCLA was also quoted as saying something in a similar vein, “Don’t confuse activity with achievement.” 

I can have a tendency to get caught up in “activities” that create a sense that I’m doing a lot during my day but when I leave the office (or at the end of my day) I can get the feeling that I really didn’t get anything I wanted to get done, done.  Has that happened to you?  Basically, by being a super hero multi-tasker and letting the flow of activities, details, phone calls, and emails act as the governors of my day, instead of focusing on the really important tasks that need to be done.

I can’t tell you the number of days I get out of bed in the morning and jump right on my email.  In the book, Tim talks about taking time in the morning to jot down one to three urgent and important things that you want to get done that day, preferably the night before.  Then before the television goes on, or before you open up email, make sure to get at least one “urgent and important” thing done.  I have been doing this over the past several weeks and have found my level of stress has gone down because I get one important thing done before the rest of the day gets going. 

I’m not trying to control the outcome of my day, but instead focus on a few key actions that will move me towards the outcome I want in my life and not just fill it with lots of activity.

Give it a try tonight.  Think about just a few things that are really important and urgent for you to accomplish tomorrow.  Then before you do anything else, at least do one of those items on your list—first. 

Let me know if there are other ways you’ve found to get more of the “important” things done in your life.

Related Posts

• Investment Performance: How Important is it?

These were the statements that caught my attention at one of the sessions at the Family Office Conference I attended last week in Newport, Rhode Island.   Watch my short video to hear more.

The organization is The World Clinic and they provide 24/7 medical care and assistance anywhere in the world.  This is obviously for executives and other people who travel internationally on a frequent basis and who need access to more sophisticated healthcare than is available in many parts of the world. 

Taking care of our best wealth creating tool–our health and specifically our brain–is what will allow us to wealth create later in our lives; for many of us this can bring tremendous opportunity and life satisfication.   

According to World Clinic, if you really want to “nail” your health, add to the list keeping your cholesteral and blood pressure in healthy ranges and this will really enhance your ability to keep on creating and enjoying the life you’ve chosen.

Related Posts

• Your Money, Your Life, Your Responsibility
• What Do Wealth Creators Need?
• Are You a Wealth Creator?

If you ask anyone on my team, they will tell you that I like to have choices to consider and weigh so that my direction can change and shift smoothly as circumstances change and/or information becomes clearer.  This can be really helpful in providing the type of financial counsel and guidance that is central to what we do at Highland.

Having said that, I recently had to confront the fact that having too many choices and alternatives is potentially a way for me to avoid taking action. 

I was having coffee with a friend in Pioneer Square (Grand Central Baking Company—excellent stop if you haven’t been), and we were discussing the integration of life, values, and money.  I was sharing with my friend that I was interested in exploring specifically where my philanthropic passions lie and that I was open to experiencing a few activities this year to see what might “tweak” my heart—as it relates to caring about people. 

[As discussed in an earlier blog post, caring about people is one of the core values we discovered at Highland, and a sub-component of that value is caring about the world.  I told my team that I needed to do some work on that area myself before I could lead or even ask the team to do the same.  So I told them that I would expose myself to several “caring for the world” experiences this year and report back to them.]

My friend said, just start somewhere and stop accumulating alternatives.  Okay, that was simple, but he nailed it on the head.  He went on to say that by starting somewhere with one thing would do the following: confirm my passion for the area; lead me closer to another alternative that I might not have even considered, or suggest this isn’t an opportunity I want to commit more time or energy to and therefore I learned something. 

My accumulation of choices and waiting for that one aha-type moment wasn’t getting me any closer to taking action.  This talked turned out to be a great wake-up call. 

So, in the next few months I am going to be visiting a homeless shelter in Seattle, taking part in a cancer walk, and making preliminary plans to visit Africa (more to follow on that later). 

In what area of your life do you need to just get going and stop avoiding?

Related Posts

• Don’t Give Up on Your Goals
• Core Values: Practicing What We Preach
• Let Your Values Lead the Way to Better Planning