Laura Hearn is a private client advisor for RMB Capital Management in Chicago, which manages about $1.2 billion in assets for wealthy families around the country. Even though her firm's clients significantly outperformed the S&P 500 in 2008, their double-digit losses last fall sparked an increase in concerned phone calls.
"The advisors at our firm were on the phone all day every day calming investors," she told me. "In early 2009 when the market did not recover as anticipated, the call volume got even heavier and panic turned into anger."
Listening to this part of Hearn's tale, I thought of the losses and disappointments that so many of us are going through right now: not just vanished wealth but salary cutbacks, job losses, home foreclosures, shrinking business revenue, credit starvation, and on and on. Amid all this trauma and turbulence--and often because of it--some people have been able to create positive change in their own lives and the lives of others. Whether you call this process creative destruction or making lemonade when life hands you lemons, these stories are immensely cheering. Hearn's is one of them.
She continues, "One night last December I returned home exhausted and melancholy, and thought to myself, 'I need some perspective. Yes, we investors have a right to be concerned and worried. But in the grand scheme of things, aren't we "lucky" to have money to invest? What about the folks who have nothing, the folks who have no regular access to food, shelter, and clothing?'"
The next day Hearn contacted a local community homeless shelter that needed help preparing brown-bag meals. In January, her firm implemented a program called Winners Making Dinners. On the last Thursday of every month, RMB Capital Management volunteers bring food items to work and make lunches for the shelter.
The program has been a great success on many levels. Hearns says, "At every Winners Making Dinners workshop, we are reminded of the people who do not have any assets to be allocated. We are reminded that some people don't have the basics. We are reminded that we, as a firm, need to slow down, take some time to appreciate our lot in life, and keep it in perspective."
Disruption as a Catalyst for Change
Amid widespread anxiety about the future, stories like Laura Hearn's may inspire more of us to make lemonade out of the lemons in our lives. In fact, many people are reassessing their goals and choosing work that is more personally meaningful. Since they have less to lose (or have already lost it), why not take the risk?
Dan Wishnatsky of Special Kids Financial in Phoenix told me about a friend of his who devoted part of his time to guiding a school for children with special needs. After being laid off from an 18-year career with a big-box retailer, his friend took the leap of becoming the school's full-time director. "The positive impact on the school has been at least fourfold," Wishnatsky says. "He is now able to bring a full-time commitment along with business acumen, compassion, and understanding to the cause of helping families and children who on many days live as gallant, yet humble heroes."
He adds, "For some strange reason, most change is for the best. Most of us worship at the feet of efficiency, not realizing it because it is such a part of our fabric. Driving the same way to work every day may be the most efficient, but not the most enriching. Change is good and way underappreciated."
Leia Francisco, an executive development and life coach in Kerrville, Texas, told me about a former client who was a high-powered administrator in a large hospital system. She worked such long hours that she could have dinner only once a week with her three children (all under the age of eight), and that was at 10 o'clock at night!
This executive's wakeup call came when her salary was downsized and her job reorganized, though the hours were as demanding as ever. After considering her options, she quit and relocated with her family to the Southwest. There she developed a longstanding passion of hers, weaving, into an extremely lucrative business with high-end clients around the world. Not only is she doing something she loves, but she works from home and is able to spend lots of quality time with her children.
Recession and layoffs are inspiring a number of people like these to blaze new career paths. In the May 31 Washington Post, Elizabeth Razzi reported on a former corporate sales & marketing director who now runs a franchise called College Nannies & Tutors. A New York lawyer was prompted to close her crisis management consulting business and move to Washington, D.C., to pursue her love of politics and public policy. Another lawyer whose firm has frozen salaries found profit and pleasure in selling Mary Kay cosmetics on the side. Even though Razzi's profilees gave up some compensation to make these changes, they all described their new work in terms like "exciting," "important," and "life-changing."
As Leia Francisco reminded me, Daniel Levinson wrote about how people return to unrealized dreams in midlife and sometimes transform them into reality in The Seasons of a Man's Life (Ballantine, 1986). Nancy Schlossberg's Going to Plan B: How You Can Cope, Regroup, and Start Your Life on a New Path (Fireside, 1996) is an excellent guide to making this happen, recommended by motivational consultant Ed Jacobson.
Surviving a Bushel of Lemons
Sometimes the lemons just keep coming, and leaving your job isn't an option you want to take. A few years ago, Rick Kahler, a fee-only advisor in Rapid City, South Dakota, lost five employees in 60 days. One moved out of town, the second left to become a bank trust officer, the third was permanently injured in an accident and could no longer work, the fourth had to quit after knee surgery, and the fifth was hired away at double the salary. This left Kahler and his then operations manager, Darla Creal, alone in the office.
To avoid disruptions in client service, Kahler and Creal had to work seven days a week for 18 months. "It was pretty terrifying at the time, looking for new help while working constantly," Rick recalls. To complicate matters, his departing planner had told him she was leaving because of the firm's inefficiency. "I was earning way less than my peers," he admits. "My gross was similar, but my labor costs were too high. I knew there was a problem, but I didn't know how to fix it."
Three or four months after the storm of lemons hit, he hired a customer relationship management consultant for two days. It was a great investment. "I discovered that what we needed to change was right at our fingertips," he says. "It was pretty painful, but we did change. I was forced to learn some systems from the ground up, and we threw out other systems that weren't working very well."
The unforeseen crisis forced him to correct inefficiencies that were costing as much as $150,000 a year. Since then his firm has been able to maintain an annual growth rate of 22%, while hiring only two people to replace the five who left.
The lemonade part, according to Kahler: "I now have a normal, mature solo practice, and I feel really good about that. In the last three years, my income has doubled or tripled, and Darla's income has increased by 50%." He has also written three books, so it's been a very creative period for him as well. "We are typically more resilient than we give ourselves credit for," he says now.
The Flourishing of Altruism
In postulating that self-interest is the primary human motivation, economic theory based on Adam Smith's philosophy ignores certain findings about altruism, according to an article in the May issue of Ode, a magazine for "intelligent optimists." In "The altruism in economics," writer Jeremy Mercer says that new insights from behavioral economics show that the reverse is actually true: altruism is a stronger motivator than personal financial gain. He cites Bruno Frey, an economist at the University of Zurich, who insists, "People are much more altruistic than standard economics claims. The challenge is for economists to nurture this intrinsic motivation instead of crowding it out."
Indeed, some people are responding to financial setbacks by devoting more energy to spiritual pursuits. Applications to study at Wesley Theological Seminary in Washington, D.C., are up 10%, according to the Razzi article in The Washington Post. Volunteerism has also increased, no doubt due to unemployed (or underemployed) workers' desire to stay productive as well as President Obama's call to serve.
Starting Over After Personal Loss
After losing his wife suddenly last year, Dave Drucker, a financial planner, writer, and technology expert in Albuquerque, decided that he wanted to begin building a new life in a new place. He rented out his old house and bought a new one in a lovely neighborhood where homes have held their value better. The decision to uproot himself from the past and begin again has energized him in many ways.
I also heard from Leia Francisco the dramatic story of a career woman who let her financier husband manage the income from her high-level HR position. Only when he squandered it all did she discover that he was seriously addicted to alcohol and gambling. Vowing that she would never again surrender her money to someone else, she divorced him and became a successful insurance agent.
This kind of story is not uncommon. My friend Barbara Stanny's reaction to the trauma of being left broke by her first husband was to educate herself about financial matters. She now coaches other women in similar situations and has written several books to help them claim their money power, including Prince Charming Isn't Coming: How Women Get Smart About Money (Penguin, 2007). By harnessing the power of life lessons to expand one's competence, it's possible to transform rage and vengefulness into growing self-respect and success.
Ed Jacobson, PhD, a coach, consultant, speaker, and author of Appreciative Moments, took advantage of the financial meltdown to reappraise his public speaking and writing strategy. The focus, he decided, should be not so much on appreciative financial planning (although this approach is still viable and effective) but on coping with and healing during and after the economic firestorm. His resulting presentations on "powerful conversations," emotional resilience, and happiness in the face of adversity have been very well received.
Early in 2009, Jacobson "sensed that advisors were dazed, distressed, and wandering in the desert, seeking to regain their coordinates." In response, he created Open Mic, a weekly phone conference that allows advisors from all over the world to share their successes and their challenges, and find solutions, community, and more than an occasional laugh. (For details, go to www.edwardjacobson.com.)
Jacobson always opens the conversation with "What's going well in your life and work?" Participants draw both information and inspiration from hearing each other's stories. "By the time we get to 'What issues do you want to put on the table today?'" he says, "people are answering with more optimism and resourcefulness." Instead of reporting that they're hanging on by their fingernails, they're asking how to rebuild trust and confidence, and sharing stories about successful events such as town hall meetings with clients. Financial planner Cicely Maton told him she was taking her clients to the zoo to help them forget about the bulls and the bears by enjoying the other animals.
Jacobson sees psychological resilience as an important factor in increasing one's happiness. He feels resilience isn't something to be acquired, but a set of inner qualities and habits that can be strengthened. Believing that thoughts and behaviors account for 40% of one's happiness level, he coaches advisors on ways to become more optimistic, determined, and resilient.
I agree with Jacobson that today's economic conditions force many people to reflect on what really matters (which is the title of his "happiness" presentation). Inevitably, they find that happiness resides in timeless pleasures and satisfactions, and doesn't have much of anything to do with "stuff," including psychological hangups as well as material acquisitions. When I participated in one of the Open Mic sessions, I told the other callers that experiencing a speech by a certain public figure allowed me to let go of my intensely negative feelings about him. Getting rid of these feelings led to a freeing-up of energy that had been trapped by anger and resentment. In your own relationships with colleagues and clients, and even in thinking about the economy, I believe cultivating forgiveness will bring a renewed sense of energy and optimism.
The economic crisis has prompted many people to put greater emphasis on work-life balance; to change the way they do business or start a creative new career; to move to a more congenial place; to build a network of support with others in similar situations, and in many ways to behave more altruistically in a deepening awareness of what there is to be grateful for.
After discovering how others have created opportunities for change, you may have an idea of how to initiate this process yourself. If not, here are some guidelines to help you begin:
Ask yourself what's going well for you lately. What do you feel grateful for right now? What qualities do you value in yourself, and what place do they have in your present life? These questions will help you deepen your self-exploration from a positive place.
Peruse the different domains of your life and see how they're going. Have you been busy taking care of clients at the expense of your employees? Are you giving enough energy to your family?
Focus on sources of stress, worry, and concern. What threatens your happiness, contentment, or success? Write down your fears and concerns, and note what you would do if they came to pass. If you don't have a good idea of how to deal with these fears, write down where you would go to find help and support.
Make a list of sources of pleasure, satisfaction, and stress reduction in your life. How can you take greater advantage of these opportunities to increase your passion, creativity, satisfaction, or peace of mind? Some possibilities might include spending more time with loved ones, volunteering, cultivating spiritual or community connections, keeping a daily gratitude journal, or tapping into things that make you laugh or lighten your spirit. (The ability to laugh deeply and often contributes to health, good sleep, and lowering of stress across the board.)
Ask yourself if you are making optimum use of your networks of support. If not, what one or two things can you do to reach out and share your life with friends, colleagues, and intimates? These avenues for communion and connection can be both nourishing and energizing.
It takes a great deal of creativity and inner resources to recover from a long period of losses, disappointments, and violent change. But when you meet this challenge, and help your clients to do the same, the increase in self-esteem and contentment can make all the difference in the world.
Olivia Mellan, a speaker, coach, and business consultant, is the author with Sherry Christie of The Client Connection: How Advisors Can Build Bridges That Last, available through the Investment Advisor Bookstore at www.invest-store.com/investmentadvisor. She also offers money psychology teleclasses for financial advisors and for the general public. E-mail Olivia at firstname.lastname@example.org.