Welcome to another edition of Mr. Stillman's Opus.
Walter Storholt here with you today alongside John Stillman. Today on the podcast, we're talking about mission statements, which is something you talk about with your clients and folks who are learning about financial planning, honestly, right out of the gate. You usually start talking about it with mission statements. Yeah, you don't come through this office without talking about mission statements.
But I understand there's a curveball today. We're going to talk about it in a way in which I get quizzed. Yeah. Well, we have a game. Okay.
So. Oh, a game. Well, that's better sounding than a quiz.
Yeah, I tried to make it less intimidating. Attention children, we're going to play a game today and it'll be graded and you'll get an F if you don't do well. Exactly, but it's a game. What's my punishment if I don't do well? You will be fired. Okay. I'm going to give you a mission statement. Okay.
You tell me what company or organization it belongs to. Oh, I'm never good at these matchup things. Okay.
Well, we'll start with some easier ones to get you off on the right track. And when I say McDonald's, I mean, you have a chance potentially of getting. Is McDonald's the answer to the first one? It is not. McDonald's is not on here.
We're not loving it yet. No. All right. To prevent and alleviate human suffering in the face of emergencies by mobilizing the power of volunteers and the generosity of donors. And the organization is?
I'm circling around FEMA. The Red Cross. Red Cross? It's the Red Cross. All right.
Very good. It sounded a little too flowery to be FEMA. Well, yeah. FEMA is a governmental organization. There's nothing flowery about that. All right.
Here's another one you could possibly get. The maintenance of international peace and security. That's certainly going to be one of the military organizations, right? Maybe. I'm not the one being quizzed here. I'm quizzing you.
Say it one more time. The maintenance of international peace and security. Okay.
I'm going to go NATO. Oh, good guess. It's the UN. Okay. It's the same thing, right?
That's why I said good guess. Yeah. Okay.
We save people money so they can live better. It's close to Geico. I don't know.
I'm going to pass on that one. That would be Walmart. Walmart. Okay. Walmart makes you live better. That sounds like Nike.
That is Nike. Okay. If you have a body, you are an athlete. That's an interesting phrase.
Probably dispute that statement on some level. All right. This will probably be a tougher one. Build the best product.
Cause no unnecessary harm. Use business to inspire and implement solutions to the environmental crisis. Oh, I was going to say Google, but then when you said environmental crisis. If you've ever heard Greenpeace. The CEO of this company speak. Oh, Elon Musk. It's Patagonia. I don't know anything Patagonia. Good company.
I've heard good things. He calls himself the reluctant businessman. He never wanted to grow the business.
He's never wanted to grow it fast. He just wanted to make a good product and people wouldn't quit buying it. Wow. Okay.
That's a good problem to have. To organize the world's information and make it universally accessible and useful. Google.
There you go. Really wanted to not give that away when you said Google prematurely. Ask Jeeves. Is Jeeves still around? I don't know. What happened to it? Google it.
What happened to Ask Jeeves? To refresh the world. To inspire moments of optimism and happiness. To create value and make a difference. That one's pretty vague. To refresh the world. Clues are being dropped.
To refresh the world. Dear Park. How about Coke? Coca Cola.
Let's see. To be one of the world's leading producers and providers of entertainment and information using its portfolio of brands to differentiate content, services, and consumer products. I'm really disappointed that their mission statement is not better than that.
That's so vague and could apply to a thousand different companies. Universal. I don't know.
It's Walt Disney. Okay. Same thing. I should have gotten that one. And the last one, which is obvious because you've heard me talk about it 9,000 times.
We are ladies and gentlemen serving ladies and gentlemen. That is the... Oh no. I have heard it.
Why is it never stuck in? You really are fired. Wait. Not Hilton. It's a hotel chain. Royal Caribbean. No, that's Cruz.
Rich Carlton. No, wait. What is it? You're all around it. You're so close. Oh my God. This is embarrassing. Rich Carlton.
It's the Rich Carlton. There it is. I had too many different things morphing around in there. I talk about that all the time. The importance of their mission statement. It's interesting to hear the other companies there.
But I love how focused that one is. We are ladies and gentlemen serving ladies and gentlemen. Because when you adopt that and you let it seep into you, it really dictates how you behave and the pride you take in your work and all that. Well, what does any of this have to do with your portfolio? Well, obviously, if we can assign a very specific mission statement to every dollar that you have, we can give a lot of clarity as to how that dollar should be invested. We can assess how well that dollar is doing.
Is it behaving? Is it on mission statement or not? So of course, in our process, we talk about our seven different mission statements that we want to have for retirement. We want to have an emergency fund. The primary things we want from those dollars are liquidity and safety. Be available at a moment's notice and not subject to loss.
That's all we want. Big ticket items. So if we need a new roof for the house in a few years or a new car, how are we funding that particular expense? We want predictable monthly income.
We want growth to outpace inflation. We want fun money to give us money for hobbies or travel or whatever it is that's fun for us in retirement. Or assisted living, all that kind of stuff. And legacy. And for some people, that seventh one, legacy, is not as important. A lot of people say they want to spend their last dollar. They want their last check to bounce.
But for some people, it is important. So we want to be sure that we have a plan in place for that. So let's talk about why a particular dollar needs to have a mission statement. So we'll use the emergency fund as an example.
How much money do you have in the bank right now as an emergency fund? No pressure. Putting you on the spot. I'm going to give you a vaguer answer.
You may. Less than one month's worth of expenses. See, that's not very good. Right.
It was more than a month, but it just got used. Because you had an emergency. Right. Well, our dog had an emergency.
But that qualifies. So we'll build it back up. But I'm building toward three months. Because I know I've always kind of just been bad about keeping a good emergency.
You want to be in the three to six month range. And we're not talking just mortgage. I mean, full expenses.
Yeah. Well, what it costs you to live your life per month. And it's all that much more important in retirement because we can't just go out and sell more and get more commissions next month if we have an emergency we need to cover.
You could also make it three months of typical earnings. Would that be another way to view it? Sure.
That even probably a little bit more. Yeah. But the problem is a lot of people don't like having money in the bank because it's not growing. They're not getting any interest on it.
It pains me to have even just more than a little bit. Yeah. Yeah.
But here's the thing. The mission statement we gave to those dollars was emergency fund. So we don't care that it's not growing. That was not its mission statement.
Right? So we want those dollars to we don't want to have too many dollars in that world. But we want to have the right number of dollars accomplishing that mission statement for us. It doesn't take away the pain that they're still not earning what we'd want it to be earning. Right.
But it does make it more understandable. Income. Predictable monthly income.
That's a completely different mission statement. We're going to have some things that by their very nature provide us predictable monthly income like pensions or Social Security. That's what they do is give us a predictable monthly income. But then you might have investments where that's their mission statement is to give you predictable monthly income.
Right. Well then when the market is having a great month or a great year you say what's wrong with this account? It's not growing nearly as much as some of my other investments.
What's wrong with it? Well that's because growth was not its mission statement. Predictable monthly income was its mission statement. Therefore it's invested in a different way. Let's talk about the growth mission statement. You know this is where you're going to be subject to loss in any given day because that growth money is you know it's going to have a longer timeline on it whether it's five years or 10 years or 20 years in some cases.
Once we determine the timeline that's going to determine the amount of risk and that's going to determine how much we could and that's causing you the same kind of pain as the money that you see not earning in the emergency fund. So again just keep both of those things in context and understand there's going to be the dips on this one side and that's why we don't have the dips on this other thing. Right. And so within that growth mission statement you're basically going to have sub mission statements of my conservative growth, my three year growth versus my 15 year growth. Well in that 15 year growth bucket yeah we can't freak out when we lose money because we have to remember the timeline. Right. And so once we go through all 70 mission statements and we assign a very specific mission statement to each dollar that dictates how it should be invested that also dictates how we evaluate whether or not those dollars are doing their job. Makes a lot of sense.
Those are really good mission statements but kind of a fun way to paint the picture with the other statements. I have one for you to wrap up. Okay. Imagination at work. Imagination at work.
See now I would have thought Disney would have something like that. Right. Short and sweet. With imagination. It's a big company. Imagination at work. I don't know.
Appliances is just one thing they do but a major part of it. H.H. Gregg. Not H.H. Gregg. They're going out of business right?
They are. H.H. Gregg might sell the brand.
Best Buy sells this brand. Whirlpool. Nope. Good guesses. GE. You got it.
GE yeah. Nailed it. Imagination at work. Good imagination on the podcast today. I appreciate it. Always fun to give you entertainment.
Quiz and call it a game. Hey I like laughing at myself. I think well I got over 50% maybe. You did well. Close to it.
No reason for laughing at yourself. Almost very embarrassed that the Ritz-Carlton one though. Almost got me on that. That was bad. That was pretty bad.
I was embarrassed in my role as a teacher that it took you so long to answer that correctly. I think it's one of those branding things where you remember the slogan so well that then you forget who it was for. Like you ever see a commercial and you're like oh I love that commercial who's it for?
Oh I don't know. Great commercial but obviously ineffective because you can't tie it to who it's supposed to be for. See I need to work on it. I need to work on my branding then. Yeah well just Ritz-Carlton needs to work on my branding.
Maybe that's what it is. We'll call them out. Thanks for joining us on the podcast today John and thank you for listening. We'll talk to you again next time on Mr. Stillman's Opus.
Whisper: medium.en / 2023-11-27 00:01:00 / 2023-11-27 00:05:49 / 5