I’m excited to introduce the MoneyCapsules® Values-Based Discovery System.

MoneyCapsules® uses simple words and visuals to help organize, understand and decide all aspects of financial life, pre-requisites for making better money decisions.

The MoneyCapsules® Values-Based Discovery System will help trusted advisers make sure that financial decisions are in balance with their client’s personal values.

The system removes complexity by using cards with visuals and easy to understand words, backed by technology for reporting and monitoring.

Stay tuned for additional details and release date.

Jaimie Blackman
Founder, MoneyCapsules

Rebecca Surran interviews Jaimie Blackman, founder of MoneyCapsules.

Lessons learned from Steve Jobs
Financial advisers should ‘think different,’ just as Apple’s technology visionary did By Jaimie M. Blackman, MS, CWS® 11/27/2011

There is plenty that financial advisers can learn from the late Steve Jobs. Often compared to Thomas Edison and Walt Disney, Mr. Jobs is recognized as one of the greatest visionaries of our time. He dazzled the technology world by creating devices that are beautiful, powerful, highly efficient and, most importantly, simple.

Think of the iPod as the game changer. Rather than having to trek to the corner record shop to buy your favorite music, a song can be purchased instantly from the comfort of your own home.

Simplicity promotes acceptance. Acceptance results in trust.

As advisers, our main aspiration should be to evolve our interaction with clients from the equivalent of a vinyl LP to an iPod. We can do that by equating a client deliverable to a customized play list, organized by intuitive “apps” representing different facets of a client’s financial life.

My seven favorite apps, which I call moneycapsules®, are cash, growth, income, risk, time, giving and integration. Advisers can put these labels on their websites, along with appealing visuals; by clicking on one, clients can identify and attain a more intimate understanding of their financial resources their.

Clients favor different apps as a function of their needs. A retired client, for example, would be more focused on lifetime guaranteed income than growth. A wealthy individual probably would want to learn more about giving substantial sums to family members or favorite charities than would a less affluent client, while a client who can’t cope with unnerving market volatility may favor the risk app.

With the “Apple” approach, in the end, the client picks and chooses his or her favorite apps, and the adviser proposes solutions.

This approach to wealth management is straightforward. It combines nontechnical language with appealing and intuitive visual choices to simplify the way financial resources are organized and understood.

VARIOUS APPS

Just as on an iPod, the user actively builds a customized playlist so that at the discovery meeting, a client organizes her financial life by priority, using simple labels and appealing graphics.

All too often, the discovery meeting reminds me of a trip to the corner record store to buy a vinyl record. In those days, the customer asked the sales clerk to help him or her locate songs. After rummaging through dozens of albums, customers had no choice but to buy a big clunky vinyl disk, even though all they really wanted was one song on the entire album. Back then, there was no such thing as a playlist.

In the advisory world, instead of a vinyl disk with unwanted songs, the client often receives a complex “comprehensive” report, which has more information than can be digested and acted on. As a result, the client often is overwhelmed, paralyzed and surrenders to the dreaded four words advisers dislike most: “I’ll think about it.” Using the Apple approach can simplify the discovery experience by transforming complex financial language into an easy-to-understand process.

For example, a client’s concept of risk may be to capture 100% of the upside and 0% of the downside. Unless client and adviser agree on the meaning of risk, decisions will be misdirected.

Using simple language and visuals shifts the balance of power from adviser to client and ultimately elevates the relationship.

It isn’t surprising that clients often hand over control of their decisions to the advisers due to miscommunication. This is dangerous for both parties.

Simplicity builds trust and results in more-appropriate decisions, which lead to better financial health.

Although advisers are trained to create holistic solutions for their clients, there often is a disconnect between what the adviser creates and what the client accepts. To bridge that gap, clients need to feel confident that their unique perspective is represented in the solution.

A conversation promoting the inclusion of the client’s perspective should include the immediate effects of an adviser’s plan, its relevance and an opportunity for the client’s self-validation. A process of building on the client perspective requires less adviser input and more client output.

That is important because in most interactions with advisers, the client hears every financial perspective except his or her own.

As Steve Jobs said, it is time to think different.

Jaimie Blackman is Founder of MoneyCapsules®, a process offering a simple way for Financial Advisers & Clients to communicate promoting better decisions. His twenty five year career spans the fields of business consulting, wealth management, and financial education. He holds an MS in Education, a Certificate in Financial Planning, and is a Certified Wealth Strategist® practitioner. Jaimie believes that the quality of our money decisions is directly linked to how we organize and understand our financial environment. Visit his blog at moneycapsules.com  email jb@moneycapsules.com or follow us on Twitter @MoneyCapsules.

By Jaimie Blackman, MS, CWS®

For those that may not recognize the name, Miss Duke was the heir to the Reynolds tobacco company with generous endowments to Duke University and other institutions.

I wasn’t surprised when I read that the Doris Duke Foundation committed $50,000,000 to emerging and established artists over the next ten years. After all I was her last music teacher before she was murdered.  Let me explain.

Decades before I began  playing my financial calculator, I played music as co-owner of a music consulting technology company.

I met Miss Duke (as she was called, although she gave me permission to call her Doris) in the late 1980s. At the time, Doris was interested in obtaining technology to allow her to transcribe the music of the gospel singer Contance Pitts-Speed.

I was contacted by Miss Duke’s staff because my firm, Musication, was the leader in the technology that enabled musicians to transcribe music during real time performance.

My relationship with Doris evolved and eventually I was giving her private performances on my guitar and held discussions on complex music concepts. Doris had a wonderful ear for music. It was not unusual for her to call my home and have detailed discussions on the music I transcribed for her. All sessions took place at Duke farms, Somerset NJ.

During my multi-year relationship with Doris I met numerous key individuals. These included her adopted daughter Chandi Heffner, Miss Duke’s business manager Irwin Bloom, and her butler/executive assistant, Bernard Lafferty.

My relationship with Miss Duke continued until late 1992, when all communication was abruptly terminated by someone within the Duke organization. Shortly thereafter, I learned Doris Duke died.

it was later reported her semi- literate alcoholic butler Bernard was ultimately the culprit. Shortly before her death she signed over her estate to Bernard leaving him in complete control of her billion dollar legacy.

Miss Duke died alone and betrayed.

Although it has been a long time since I had a relationship with Doris, this news brings back disturbing memories of her life.

As published in the New York Times, “Doris Duke, 80, the legendary tobacco heiress, looked more like a blond skeleton than the athletic debutante who had made her society debut in the 1930′s at Buckingham Palace or the stately and private woman who only a few years before was socializing with Jacqueline Onassis and Imelda Marcos.
Her circle had shrunk to a few servants and a group of doctors and lawyers she had known only a short time. As she signed her last will that day with a shaky hand and turned her fortune over to her butler, not a single close friend or family member was present.
Her doctors and lawyers say they helped Miss Duke realize her final wish in a lifetime of unorthodox choices. The will gave control of her $1.2 billion fortune to her butler, Bernard Lafferty, a barely literate man with a drinking problem who had become Miss Duke’s sole confidant.”

Doris died alone. Of course, she was surrounded by servants, lawyers, and other domestic helpers.  It’s rather unfortunate, since life is nothing more than a collection of fulfilling and trusting relationships. Maybe the problem wasn’t that there weren’t people around her, but rather that she didn’t know how to cultivate trusting relationships.

Even though Miss Duke died alone and betrayed, she still manages to have a positive influence in the world. It brings back memories of the personal and musical connection that she and I shared.

Doris’ father, James Buchanan Duke, told her to “trust no one.” Perhaps this was the wrong lesson. Rather than trusting no one, better to learn how to trust.

Jaimie Blackman is the Founder of MoneyCapsules®–a process offering a simple way for Financial Advisers & Clients to communicate. To learn more, visit www.MoneyCapsules.com or follow us on Twitter @MoneyCapsules.

South Park: Adviser-Client Relations.

Investors hate the thought of losing money even when the odds are in their favor. I often teach retirement classes at the 92Y in New York City. To spice things up I begin with some entertainment. I take a coin out of my pocket and I tell the class;

 I’m going to flip a coin. Whoever wants to play raise your hand.  If you call it correct I will pay you $500. However if you are wrong you will pay me $100 who wants to play?

 In a class of 30 how many do you think want to play? If you guessed hardly anyone you are right. The problem is that this makes no sense.  You have to take a five to one bet with a 50% chance of winning.

 The problem of course is that the fear of losing is much greater than the promise of winning. This simple revelation won Kandleman and Tversky a noble prize for economics in 2002.

 The insurance industry knows all too well how to market the fear of loss. For example we can insure the unexpected loss of life  with life insurance, or the mind with Long Term Care Insurance. And even though there is a greater risk of becoming disabled than dying prematurely, more people purchase life insurance than disability insurance.

It’s easy to be overly obsessed  with underperforming the market. However what good are stellar returns if they are taken away because of a permanent disability.

 Food for thought? As always your comments are appreciated.

How do you share decision making when making a medical decision?
For any important decision, most of us do our homework and analyze the pros. Costs. Options. Cons.
We discuss the matter with family and doctors we trust.
You think about your goals and concerns, and you know what was important to you before you make your final choice.

Making a decision on your physical health, should be no different than making a decision on your financial health. Don’t be afraid to ask your Financial Advisor the right questions.

Jaimie Blackman
Founder/Coach
MoneyCapsules.com

Irving Blackman aboard the USS Luce during WWII

A tribute to Irving Blackman,
written by Jaimie Blackman

Behavioral finance tells us that making quick financial decisions from the gut, often leads to big mistakes with your money. (Refer to the David Adler pod cast in this blog  ).  When it comes to decisions of life and death, the gut trumps logic. My father’s instinct saved his life.

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Some of my earliest memories were of my dad’s war stories. Back then I was too young to appreciate them.

The ship that sank. The story how dad had to fight for a life jacket. It all sounds like something out of a movie. My dad was eager to forget it. It is, however, a part of my family’s DNA.

The story begins in 1942. Dad, with a newborn at home, enlisted in the U.S. Navy and was immediately assigned to the USS Luce, a brand new destroyer built on Staten Island N.Y, of the same year.

For a peaceful and mild mannered man, like many young soldiers and sailors during World War II, dad served with distinction and bravery. But don’t call him a war hero. Humble to the core, he would deny it.

According to the account in Wikipedia, at about 07:40 on May 4th, Japanese suicide planes were intercepted by combat air patrol in the vicinity of the Luce. Two enemy planes avoided the interceptors and attacked her from the portside.

Luce shot down one, but the explosion from the bomb it carried caused a power failure on board the ship. Unable to bring her guns to bear in time, the second kamikaze struck her in the after-section knocking out the port engine, flooding engineering spaces, and jamming the rudder. At 08:14, Luce took a heavy list to starboard and the order to abandon ship was passed. Moments later she slid beneath the surface in a violent explosion carrying 126 of her 312 officers and men with her.

Luce received five battle stars for World War II service.

My dad adds an important addendum to the story.

Shortly before the strike by the Japanese suicide planes, he was moved from the gunnery position on the top deck, to the lowest deck of the ship where his job was to load ammunition for sailors who were busy shooting down the aircraft. The order to move my dad to the lowest deck, which is usually a more dangerous location, ironically saved his life.

Due to the power failure, the ship’s communication system did not function, and as a result the ship’s Captain was unaware that a handful of sailors on the lowest deck were unable to hear his order to abandon ship.

Still, my dad had a premonition; he felt something in his gut. Somehow, he knew the ship was sinking. This was a powerful feeling he could not deny.

At the risk of a court martial he left his general quarters and began climbing up the stairs and opened the hatch. What he saw was devastating. The top deck of the ship was already under water. People were screaming. There was fire. There was terror. He would later learn that many on the top deck, including the personnel at the position he previously held, had perished.

Dad tried to return to the lower deck to tell the rest of his crew to leave. They wouldn’t listen. Seconds later he was already in the water. There was one problem. Dad had no life jacket. Struggling, moving, my dad was determined to survive. With a wife and a young infant at home, he was determined that this would not his day to die. Not today.

He spotted his immediate officer in the water with not one life jacket but two. Dad asked him, begged him to give up one of this life jackets. The officer refused. Dad told him if he didn’t give it to him, he would either take him down with him, or if he survived would tell everyone what a coward he really was.

The officer reluctantly gave in and gave dad one of his life jackets. After what seemed to be an eternity of treading water, a rescue ship was finally sent for the surviving sailors.

Quoted from a letter mailed to dad in December 1945 from James Forrestal, the Secretary of the Navy, sums it up nicely.

USS Luce

December 5, 1945

My Dear Mr. Blackman:

I have addressed this letter to reach you after all the formalities of your separation from active service are completed. I have done so because, without formality, but as clearly as I know how to say it, I want the Navy’s pride in you, which it is my privilege to express, to reach into your civil life, and to remain with you always.

• You have served in the greatest navy in the world.
• You crushed two enemy fleets at once, receiving their surrenders only four months apart.
• You brought our land-based airpower within bombing range of the enemy and set our ground armies on the beachheads of final victory.
• You performed the multitude of tasks necessary to support these military operations.

No other Navy at any time has done so much. For your part in these achievements you deserve to be proud as long as you live. The Nation which you served at a time of crisis will remember you with gratitude. The best wishes from the navy go with you into civilian life.

Good Luck.
Sincerely yours,

James Forrestal.
US. Secretary of the Navy

Today, my dad is 93 and living in Florida with his wife Gertrude Oer Blackman. Dad has four children and 9 grandchildren.

My dad is part of a fading group of World War II veterans who served their country with distinction and bravery. He trusted his gut, and as a result was the last man off that ship.

My dad was a war hero, but don’t ask him, because he will deny it.