Things I've learned along the way l Insightful Investing

By Jeffrey Moormeier | Apr 10, 2019

I entered the financial service business in April of 1988. The U.S. Army had received my service for the preceding eight years. Much has happened in these 31 years, and this column is a reflection of some things I have learned and observed along the way.

Some of the lessons I have learned are timeless principles, and some are opinions.

The best lessons I learned as an advisor came from the clients who hired me. Merrill Lynch trained me, but the excellent lessons on how to manage money came from the business owners who I had the honor of serving.

I went to high school with some men who later became Alaska commercial fisherman. It was a natural source of new clients for me. A few of these men had a remarkable impact on the way I viewed money. I suppose the way to describe the best lesson I ever learned from them was "live within your means and have a nice cash buffer."

These are two lessons, but I combine them into one because I think they are conjoined twins.

You can't save money if you spend everything you make: Some of these people would fit the description of "penny pinchers." The only time they would let go of a buck, would be to get a better grip on it. I say this with respect and a little humor. More on this later.

Pay your taxes and not a nickel more: I just finished my tax return. I am not sure if it is getting easier or harder. There is an excellent quote by Oskar Schindler in the movie "Schindler's List": "My father was fond of saying you need three things in life - a good doctor, a forgiving priest, and a clever accountant. The first two, I've never had much use for."

I have worked with the same account for 31 years. His office has saved me a small fortune. I am reluctant to give tax advice in this column, as I am not qualified. I have tools that help in the evaluation of taxed deferred accounts and a stable of qualified people to draw upon for detailed tax advice. My point is worth repeating, pay your taxes and not a nickel more.

Have a plan: Know where you are going. Money is your servant; don't let it become your master.  Dave Ramsey says it this way, "Tell your money where to go." He recommends having an account for specific reasons.

For example, he never recommends borrowing money for a vehicle. He recommends opening up an account called a "car account" and funding this account. Instead of making a car payment, take the money that you would spend on a car payment and put that money into the "car account." Once you have the money saved, pay cash for the car.  And drive a cheap car until you can afford to pay cash for a better one.

Use technology to keep yourself organized and focused: The financial service industry is using technology to help people in powerful ways.  The creation of financial planning applications may be one of the most significant changes in 31 years.

Enjoy your life: I want to revisit the "penny pincher" comment. I have seen some people save their entire lives and leave money to their heirs, only to have it spent fast and recklessly. I am respectful of the original saver. They usually are the ones who lived through the great depression of the 1930s.

To these people, I recommend that you spend a little more money and enjoy your life.   You earned it, and you should enjoy it. Live more, worry less.

I have never known a person who was a frugal person waste their money at the end of their lives, with one exception. The exception was somebody who was suffering from brain deterioration. This is a huge warning sign to the family. Other than that, eat the cake and drink the wine.

Another significant change I have witnessed is, as a general rule, people own fewer individual stocks.

It is my opinion that this has taken some fun out of investing. I even know some investment advisors that will not help people buy individual stocks. There are reasons for this, some of which make sense, diversification is one of them. It is my opinion this move away from private ownership of individual stocks has increased the volatility of the markets. It is my opinion money has been concentrated into the hands of fewer decision makers. And they tend to act in lockstep. I can't prove it, call it intuition.

Finally, keep politics in perspective: Warren Buffet has a great quote that illustrates my point. When looking at buying a business, he says, “I try to invest in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.”

My final point is that I have seen people alter a good plan because they didn't agree with who was elected president.

In their mind, the president was not "their president." Yes, the government sets policy and spends money. Elections do matter. Over the long haul, however, a good plan will weather the storm. Eventually, you will have "your president," again.

In the meantime stick to your plan. OK, that’s all for now.


Jeffrey Moormeier of JG Moormeier Financial is a Mukilteo-based financial advisor affiliated with KMS Financial Services, Inc. an SEC registered investment adviser. His column does not represent the opinions of KMS, nor is it an official prediction or recommendation of any kind. The opinions expressed in this column are generalizations. For advise catered to your specific financial circumstances, contact Jeff directly at or 425-931-8898.


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