Bartlett Wealth Management Principles of Wealth

EPISODE 1 // TRANSCRIPT 

Holly Mazzocca 0:00 Welcome to Principles of Wealth, a podcast built at the intersection of finances and real-life values. I'm your host, Holly Mazzocca. 

On this podcast, we'll walk through real-life stories of finances and wealth, while addressing some of the most commonly-asked questions we received from our clients. At Bartlett Wealth Management, we know that the path to pursuing your financial goals is not a straight one. It comes with twists and turns, pitstops, unexpected roadblocks, and even a few pleasant surprises along the way. 

We're here to help you navigate this journey by providing stories and insights that you can apply to your own unique path. We'll dive into conversations that address the question, what is the purpose of my wealth? This podcast will cover a range of topics, including current dynamics in the financial markets, planning for retirement, charitable giving that aligns with your values, passing wealth on to future generations, exploring business transitions, and so much more. 

I'm excited to launch this podcast to share stories and pass along the principles of wealth our team has amassed over time. It's really amazing to see the power of story in action. You never know whose story may impact you so deeply that it changes the trajectory of your life. And as unexpected as that may be, it was exactly what happened to me on a plane ride home to Cincinnati. I was living in Chicago at the time working a super intense job at a hedge fund. And after a particularly long week, I was exhausted. I plopped down in my airplane seat and kept to myself for most of the flight. 

It really wasn't until we were nearly landing in Cincinnati that I struck up a conversation with my neighbor and the subject of work came up. My plane ride companion shared that he was the director of a nonprofit organization serving orphaned children in poverty-stricken countries. And this struck a chord with me. I was planning to move back to Cincinnati and I had been mulling over my own career choices. Heading down the nonprofit path was starting to look more and more attractive at that point. And then he shared a story with me. He told me about his own journey and how he had shifted from a successful career in technology sales to leading this nonprofit organization. But it wasn't an easy road. There were many times when his friends, neighbors, and perfect strangers came along to help him financially in those early days. In the end, he was only able to do his work because of the business leaders who had shared their time and talent with the organization as well as a lot of financial support. Thanks to their community leadership, he was able to do his mission, but it was their resources that helped make it possible. 

I walked off1 that airplane with a new perspective… I could stay in the financial world and still leave my mark on the world. And that was a powerful feeling for me to recognize that I could potentially do both. I decided at that point that I would seek to find an organization that operated from its core values and was led by people of principle. Shortly thereafter, I found my way to Bartlett and realized that it was the home that I was seeking. 

Fast forward. 

Here we are today. I'm now the president of Bartlett, working alongside amazing colleagues who share our core values of integrity, diligence, and teamwork, and working with our clients to go deeper. We go beyond the numbers to explore what really drives them, what it is they want to accomplish when they think about that long-term legacy. Your principles will drive you toward your purpose and your personal principles will rhyme with your wealth principles. The best financial plans are not just a bunch of numbers or a thick stack of reports. The best plans use the numbers to chart a course. 

Our goal with this podcast is to share the principles of wealth that have worked for our clients over many years. I'll be featuring different members of our team as well as outside partners to share their different perspectives on aligning your wealth with your purpose. To kick o2ff this first episode, I'm joined today by Jim Haggerty, Bartlett CEO. Jim is also a wealth advisor and principal of Bartlett. He's here today to share more about his experience helping clients to navigate life's transitions and discuss the impact those transitions have on your wealth. 

Welcome, Jim. Thanks for joining us today. 

Jim Hagerty Thank you, Holly. 

Holly Mazzocca Tell us a little bit about your story. What path did you take to get here? 

Jim Haggerty 4:36 Well, September will mark 27 years with the company. Just after Labor Day 1994, I joined the firm after beginning my career with five years in a bank trust department here in town. And during that time, I completed the CFA accreditation, Chartered Financial Analyst. And prior to that, Holly, education occurred at the University of Dayton with a degree in economics, and prior to that local schools here in town, Purcell High School and Nativity Grade School. So, in all those cases, very blessed… great institutions, great places to work. And one very interesting thing that happened along the way from about the age of 11 through the age of 20, I worked at Losantiville Country Club here in town starting as a caddy, and later on an honor caddy, working in the pro shop working on the grounds crew. And that was a fantastic formative experience, kind of an education of sorts, in and of itself. And just a fantastic experience. It developed a lifelong love of golf. And I think there are definite parallels between golf and investing. And between caddying and investment management, so those nine years there were just a fantastic period of time almost like getting a degree in customer service and psychology along the way. 

Holly Mazzocca 6:05 Definitely, the psychology rings true. That's a big part of what we do. What other parallels do you see between your time as a caddy and what you bring as a leader of Bartlett? 

Jim Haggerty 6:16 Well, we were always taught as caddies, there was a little saying on the end of our rating card that the members would sign that to the effect that the best caddy is the one who helps the member get the most enjoyment out of his round. And of course, as you may well imagine, members come in all shapes and sizes, and the skill levels on the golf course vary and with it, the temperaments. And I think just the ability as a caddy to get a member through a round to help them along the way. Later on, I became adept enough as a golfer that I was maybe advising them on club selection, or how to read a green, or corrections to make in their swing if they were struggling. And I think back to that little saying on the caddy form. I found that very, very gratifying, helping people get the greatest enjoyment out of their round. And I think in many ways, as a wealth advisor, you're doing the same thing. Investment management is much longer in duration than a round of golf. But there are definitely parallels there and keeping someone invested and patient is not unlike years and years ago keeping someone invested in their golf game. 

Holly Mazzocca 7:32 Well, I have to say, as a rather poor golfer who has had an opportunity to golf with you, you definitely made me feel like I was better on the course than I actually am. So those lessons are still paying off, still paying off. So, tell us a little bit more about the client work… How do you help clients work through these transitions? Where did that passion for helping clients evolve from? 

Jim Haggerty 7:57 Well, I think you're just interested in seeing people do well and thrive. I suppose in the same way a teacher would be interested in seeing his students thrive, a minister might be thrilled by progress that his congregants make or psychologist, you know, seeing someone recover from difficulties, you're just pleased to see people make progress. And in our profession, you have a front seat to that progress, seeing people successfully save for retirement, successfully create a legacy for their families, successfully meet philanthropic goals and make an impact on society. Your work is making all of that possible. And some the most gratifying experiences I have had, I think of clients that I may have started working for, a few doctor clients, for instance, in their mid 40s. And sort of in the middle of their careers and working with them for 25 years all the way through their retirement and just seeing the incredible satisfaction they felt over being able to cross that goal line into retirement and enjoy retirement, travel, you know, do the things that they wanted to do. Those kind of transitions and being a part of making them possible, is very gratifying. You get beyond just the statistics and the numbers and you see how it manifests in someone's life. 

Holly Mazzocca 9:25 So you mentioned retirement, and I think in our business, that's the first big life transition that everyone immediately thinks about, oh, I'll need a wealth advisor when I am preparing for retirement. But what is another one of those big life transitions that has a material impact on wealth that people may not be expecting? 

Jim Haggerty 9:48 Well, you hit on retirement, certainly selling a business is significant. You know, someone who's built a business and now is selling that business and, you know, creating the next chapter of their lives. Sometimes you get into situations that are more on the sadder end of the spectrum, such as the loss of a spouse or an illness. Those are also transitions that, that you're helping someone get through. And I have experiences like that currently, where a client is dealing with what appears to be a spouse's terminal illness, and in another situation, a client going through a divorce. You know, those are transitions that we don't wish on anyone, but we need to be there to help them too. 

Holly Mazzocca 10:34 Yeah, definitely. That's a big part of this job, those unexpected twists and turns that come along the way. So, Jim, you mentioned these transitions, and you mentioned walking alongside your clients as they work through these transitions in life. What is one of the most important principles of wealth that you like to focus on with clients?

Jim Haggerty 11:02 I would say preparation is critical. Preparation, which means good financial planning, and I think also means having a partner that you can trust, an adviser that you can trust. Preparation is really the key. You're going to have surprises; the market is going to serve up surprises from time to time. And you and I know that so well, chapter and verse, you know, market volatility and what can happen. But there are also sources of volatility or turbulence beyond just the market, some of which I mentioned, you know, along comes an illness you never anticipated or a divorce or something like that, or, or you're selling a business -- preparation, is just very, very important and, and having reliable and trusted counsel. 

Holly Mazzocca 11:54 Tell us a little bit more about that market experience. What are some of your favorite pointers as people are thinking about investing in the markets? 

Jim Haggerty 12:04 Well, I think for all investors, you really, have to have the capacity to think long term. And I think by working with a good advisor, he or she will, you know, promote, and cultivate that capacity to think long term and not get distracted. Historically, as you and I know, the market at least three times a year gives us surprises where stocks sell off by 5 to 7%. One of those might turn into a 10% setback, which, for some reason in our jargon is called a correction -- sounds like something from grammar school. And, you know, as we know, every four to five years, something more significant -- what we call a bear market decline of 20% -- provokes either the fear of a recession or in recent times we had the pandemic in 2020, that we had a 34% sell off3 in five weeks. And in 2018, as the trade war with China was intensifying, we had a pretty difficult market year, as I recall about a 15% sell off3 during that year when the Federal Reserve was also raising interest rates. So I think you and I are well versed in just how normal that is those things are as we can't predict them in advance any more than we can be certain when a traffic jam is going to occur or where a pothole might be looming. But they're there. And having a financial plan that anticipates turbulence and builds safeguards and guardrails in your portfolio is very, very important. 

Holly Mazzocca 13:40 It makes me think, to the piece of advice that I know you share around our office on a regular basis, which is time in the market is much more important than timing the market? 

Jim Haggerty 13:52 Well, I think there are two things that are very damaging to investors of any kind. One is market timing -- the idea that you can get in and get out of stocks with reliable precision. Get out presumably near market peaks and get back in after declines. And that can be especially seductive in time periods when the market’s going down. You know, you think back to the pandemic and how grim things looked in February, March of 2020, as that was first starting, and probably many people wondered, wouldn't it be better just to get out? And who knows how long this this virus will mutate how long this thing will continue? I'll get back in when the skies are clear. Almost invariably, that investor penalizes yourself by getting in and out at inopportune times. And the other thing that can be so seductive and so damaging is when in good times, such as we're experiencing now -- for most of 2021 the markets been on an uptrend -- instead of fear, it’s greed that manifests. And people maybe have a sense that my portfolio is only up 10 or 15%, I should be doing better. That leads to a phenomenon called performance chasing. And so just as often as we can counsel people against market timing and performance chasing. If you're patient, the time in the market will reward you. 

Holly Mazzocca 15:23 Reminds me of the old Warren Buffett adage, be fearful when others are greedy, and greedy when others are fearful. 

Jim Haggerty 15:31 That's exactly right. You think back to the first part, really the first half of 2020, certainly, February, March was the most dramatic period. But in that period, you would like to be in a mode where you're looking for opportunities. The market is selling o4ff, for a brief period of time there catastrophically, and dollar bills, Holly, are going for 70 cents as it were. And that's a period of time where you want to be looking for opportunities, and you want to sit back and say, you know, does Amazon have staying power? Does Costco Wholesale have staying power? Does General Dynamics have staying power? Great companies, and you can buy them at discounted prices? 

Holly Mazzocca 16:12 Jim, your comment on staying power is very telling one as we think back to that time period, and how little we knew when we were going through that time period of February, March of 2020. And really thinking about the power of resilience, whether that's of your portfolio, or whether it's the individual investments you are making, or of your total financial plan, thinking about the ways that you can build that in advance. So, when you're going through those time periods, where it's it is really scary out there, you know that your long-term plan is still intact. 

Jim Haggerty 16:52 That's exactly right. And that's why in those circumstances, you benefit so much from having a good financial partner, an independent advisor, who can help you navigate those emotional periods of time. And keep you very focused on the long term, help you keep things in perspective, and not get fearful during market declines and not get too optimistic when the market is strong. 

Holly Mazzocca 17:20 Well, that's a great first principle of wealth, something to really set the course for this podcast on the types of ideas that we'll be sharing and stories we'll be telling… Definitely getting more into the weeds as we as we go along here together. As you think about it, what is one principle of wealth that is really significant in your own life? 

Jim Haggerty 17:43 Well, when I joined the firm in September of 1994, as I recall, the Dow Jones Industrial Average was around 3,500. And here we are 35,000. And that seems astounding. A listener probably thinks 3500 to 35,000. That's a tenfold increase. Now, mathematically, that works out to about 9% growth per year. And, interestingly, Holly, that 9% would roughly be similar to or maybe rhyme with the growth rate of corporate profits and dividends during that period of time. 

And so that validates a key belief of Bartlett, which is that over long periods of time, stock prices should parallel good business performance. If we make the right assessments and we own good businesses in your portfolio, you should get good results. Now, in that 30-year period of time, there was all kinds of difficulty. I can even remember when I joined the firm in September of 1994, the big thing going on at the time was that Mexico was in a lot of trouble. And the treasury secretary at the time was a guy named Bob Rubin for the Clinton administration, and he was shuttling back and forth kind of arranging a bailout. And kind of like today, there was all kinds of criticism, what was going on. But as you know, since then, we've had all manner of situations, you know, the currency crisis in Asia, a debt default by Russia, 911, the financial crisis, just all manner of things.

And yet, in that 30-year period of time from 3500, on the Dow to 35,000, a tenfold increase. And you have to have the staying power to not to ignore those periods of time, but ideally, to look for opportunities when there's turmoil. So that would be a key principle. I would stress if you own good businesses, be patient. It works. And I think the key takeaway from my 30 years and thinking about the next 30 years, I would just very, very strongly encourage people as simple as it sounds, get invested and stay invested. And when the market throws you a curve and you feel bad, invest some more if you can, but above all get invested because it has worked and I'm confident it will keep working. 

Holly Mazzocca 20:01 Well, that is the perfect principle to end on here today. And I know that's one that we can go much deeper on in the future. So thank you, Jim, for your insights today. Thank you. 

And thank you for tuning in to the first podcast of Principles of Wealth with Bartlett Wealth Management. We started to explore the many transitions our personal wealth journey will take over time. And we'll continue to dive into these links between your wealth and your purpose, with a focus on these actionable principles you can apply to your own journey. 

Join us next time when we'll focus on Women Empowered to Invest, our new female-focused initiative, and why we feel like it's just the beginning of empowering women to take their financial lives into their own hands. Our next episode will launch in October, so be on the lookout. 

In the meantime, engage with Bartlett Wealth Management online through LinkedIn, Facebook and Instagram. You can read more insights on our website and sign up to receive quarterly news in your inbox at www.bartlett1898.com/insights. Thanks again for joining us. We'll see you next time. 

The information in this podcast is educational in general in nature and does not take into consideration the listeners personal circumstances. Therefore, it is not intended to be a substitute for specific individualized financial, legal or tax advice to determine which strategies or investments may be suitable for you. Consult the appropriate qualified professional prior to making a final decision.