Moorman and Company

The master key to a successful investment career is investment professionalism. Once you understand and appreciate the meaning of investment professionalism, you will have constructed the key foundation to your future financial freedom. Remember: financial freedom provides you with the means to do what you want, when you want, and in the way you want to do it.

Financial freedom is built on a foundation made up of three parts. Money provides you with the material foundation for financial freedom. Study and knowledge provide you with the mental foundation. But with only those two, even the best investor will remain an amateur. And an amateur, quite simply, is someone who engages in an activity for pleasure rather than for financial gain.

Your goal is to systematically, over the years, make money from your investments. To do that, you must make a career out of investments. That's the third foundation: investment professionalism. A professional is someone who is good at what he or she does and knows why; someone who critiques his or her performance and wants to be better. An investment career can be as long lasting and demanding as your career as an executive, a lawyer, a teacher, a blue collar worker or a doctor.

Because your main career occupies so much of your time and attention, you may not be able to make a success of your investment career on your own. No individual can possibly know all there is to know about stocks, real estate, insurance, taxes, the law and the dozen other disciplines involved in the complex world of investments. In order for you to become a successful investor, you must systematically and consistently make use of a variety of professional specialists.

First, you will need acquisition specialists such as real estate, stock and insurance brokers. Additionally, you will need advisory specialists such as attorneys and an accountant. Furthermore, your acquisition specialists and your advisory specialists must function knowingly and willingly together as a team, for the whole becomes greater than the sum of its parts.

The acquisition specialists are like the offensive team in football. Each one thoroughly knows his or her position, and he or she knows how to coordinate with the other specialists on the offensive team. But none of these specialists calls the signals. That's the job of the quarter-back. And the quarterback of this team is you, the investor. You call the signals and the various offensive specialists execute your orders.

But that's only half of the team. The other half, essential to the team's success, are the advisory specialists. They actually play two roles. They defend whatever advances the offense has made, and they coach and coordinate the entire team's performance.

Now let's put all that back into the investment idiom. The acquisition specialists — the various brokers — work to buy and sell whatever you direct them to buy and sell. You should expect that, because they have been carefully selected by you, they will make the best possible purchases and sales within their various specialties. But keep in mind that brokers' incomes are generally derived solely from their transactions, and each is convinced that his or her specialty is the best. Left unchecked, they can easily lead you into an investment imbalance.

But combining and coordinating the efforts of your brokers can be time consuming and complicated. In that regard, you can use the advice of specialists who in no way benefit from buy and sell transactions, but who derive their incomes as unbiased advisors. These are your advisory specialists. Not only do they help you make decisions on a broad policy level, they advise you of the tax and legal consequences of individual transactions, and of the cumulative effect of many transactions.

How do you create a team? Generally, the members of the team should possess perspectives, goals and temperaments similar to your own. They should be thoroughly skilled in their specialties, and they should have had some seasoning through experience. But most of all, they should be compatible with you, the investor.

That's not to say that your team should be comprised of "yes men". In fact, nothing will sharpen your investment thinking and improve your decision making skills better than hard-headed opposition to particular plans. If someone on your team raises strong objections to something you are planning to do, listen to the objection, follow the line of reasoning, and then incorporate that thinking into your own. It may be right and everyone else's opinions may be wrong. Or it may not be right for you. Whether or not you follow the advice, let it be known that you need and respect contradictory opinions.

Finally, few teams are perfect and they are seldom permanent. Weeding and adding are constant processes, but there develops, over the years, a sense of continuity among those who work together. Roots go down and they are hard to pull up. These roots are extremely important; they feed the tree. The roots may become so deep that, after a while, the various team members scarcely have to talk about what is going on. Somehow they know. When that happens you will know that the team is a winner. And remember, you are the most important member of that winning team.