In a previous blog, we shared some of the lessons Michael Evans’ learned in the school of hard knocks. Our goal was the help you learn from Michael’s experiences as a wealth advisor. In this blog, we share with you the rest of Michael’s story in hopes that you will be able to apply the lessons in your own wealth-building journey.

Learning About Pains and Gains from a Wealth Advisor 

Even though we recovered a significant portion of our lost assets, I still needed to manage the funds I extracted out of my lucrative career as a professional trader on the Chicago Mercantile Exchange (CME). I still had obligations to my family. I still needed to save for education expenses, and I wanted to prepare for the day when I would not, or could not, continue to earn a living by trading on the exchange.

One strength I have always relied on is learning from my own (and others’) mistakes, misfortunes and missteps. Investor and hedge fund manager Ray Dalio used a handy expression for this type of thinking: “Pain plus reflection equals progress.”

We all experience pain and loss in our lives. But I believe in turning missteps into learning moments by reflecting on how to avoid them moving forward. So over time, I asked myself: What can I do differently in the future? How can I prevent this from happening again? 

From this reflection came an action plan. I decided to learn more about how to handle my assets in a more prudent and responsible manner. I read every book I could on efficient investing. Some of my earliest sources included:

I also attended numerous Berkshire Hathaway shareholder meetings and consumed Buffett’s annual shareholder letters to soak up additional insights. In short, I immersed myself in every source of learning I could get my hands on. I was determined that my family and I would never again have to suffer avoidable financial losses.  

Learning from a Wealth Advisor: Evidence-Based Investing 

What I discovered felt really good: My own actions are the only determinants that are  truly under my control as an investor.

This is referred to as “evidence-based investing.” Back then, it was called “passive investing,” not because you sit back and let others mindlessly manage your money. Rather, you stop engaging in the fancy footwork associated with traditional active investing – chasing “high yield” without clearly understanding the costs and context involved. 

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In evidence-based investing, you invest in a highly diversified portfolio of index or index-like funds that are expected to deliver what the markets return on a risk-adjusted basis, minus fees and tax consequences. Then you manage your portfolio to minimize those risks and costs involved.

Learning from a Wealth Advisor: A Changed Approach 

By day, I was still an active professional trader on the CME, creating personal wealth by placing trades utilizing highly concentrated risk in extremely leveraged financial products—and coming out ahead for almost 20 years. In my free time, I was building a personal portfolio to preserve and grow my hard-won dollars. For this, I turned to a few highly diversified, but “boring” index funds, and a healthy allocation to high-grade municipal bond funds and government securities.

As my education advanced, so too did my investment approach. I stopped waking up early on Saturday mornings to chase down hot trading tips. I cancelled my subscriptions to high-priced, stock-picking/market-timing newsletters. I fully embraced evidence-based (passive) investing, and I vowed never to go back. My family and I had already paid too high a price, personally and financially.

Suffice it to say, it was quite a shift for a trader at heart to go “passive.” But it was also incredibly liberating. Even during market mayhem, I could expect to advance by simply staying the course. My trading peers chided me about the mindset shift, but they noticed the change in my demeanor. Gradually, they began to seek my advice on their own financial challenges. As I discovered how fulfilling it was to share what I’d learned, I began to consider a career shift that involved helping free others like me.

How One Man Became a Wealth Advisor

Over time, in conversations with friends and family, I continued to hear and see how they were successful in many areas, but still struggled to manage their money. With increasing clarity, I began to imagine a career in which I could help others align their wealth with their personal goals and ambitions. I still wanted to earn a fair living, but I wanted to shift my focus to be my clients, not my next winning trade.

I warmed to the idea quickly and began to determine just how to proceed. For four years, I did my homework:

  • I interviewed dozens of industry executives, even a few pundits, to identify best business models and best practices for serving my clients’ highest interests.
  • I opened brokerage accounts at several Registered Investment Advisory firms, fully explaining my motivation to learn from them as I opened my own wealth management firm.
  • I attended several national financial planning seminars and conferences.
  • I read dozens of peer-reviewed investment management and financial planning publications.
  • I compiled my business plan and had it vetted out by respected professionals. 
  • l completed DePaul University’s Financial Planning Certificate Program.

I discovered that to structure my business around serving our clients’ best interests, we needed to be fully transparent about costs and business practices. We needed to remain independent, unbeholden to any large umbrella organization or other potential conflicts of interest. We needed to make sure we would never, ever make decisions that would conflict with anyone’s highest interests. In a word, we needed to be in a fiduciary relationship with our clients.

In 2009, just shy of a decade after my October 2000 life-changing experience, Cogent Strategic Wealth was born. It wasn’t about me anymore; it was about my clients. And you know what? That felt great.

Back on the Homefront

My wife Colleen is my best friend and one of the most amazing people I know. Even so, I was asking a lot of her. I suggested we build a ladder of maturing CDs to provide three years of dependable income while I invested significantly in creating a business built to last. I also committed to remaining available as a husband and father—coaching our kids’ sports teams, being home for dinner, taking time for family vacations and romantic outings. In helping others achieve their desired lifestyle, I wanted to lead by example by tending to my own personal goals.

Learning from a Wealth Advisor—An Advocate for Fiduciary Advice

The Cogent Strategic Wealth team now serves over 70 families. Together, we work toward prioritizing and addressing their most pressing issues and complex wealth challenges. What’s next?

Nobody knows what the future holds, but I do have a solid vision for my business, my family, and myself.  It’s a vision shaped by what I’ve learned, and it’s focused on advocating for fiduciary financial advice for a growing community of investors.

Again, it’s not about my firm. It’s not about me. It’s about people just like you. You’ve done the right things and taken the right steps to provide for yourself and your family. You’ve invested in yourself, in your education, and in being of value to others while making great money. You bust your butt every day, working hard to prepare for a better tomorrow.

This is my mission: To spread the word about fiduciary, best-interest advice that helps families capture their stellar earnings, build durable wealth, and accomplish all that is important to them.

I launched Cogent in 2009, during one of the deepest financial crises our generation has experienced. I’ve seen firsthand what can happen in the absence of best-interest, fiduciary advice. I’ve also seen the positive difference that good advice can make, granting people both the time and resources they need to enjoy the people they love and the activities they enjoy. 

Who could ask for more than that?

If you are looking to work with a fiduciary advisor, my firm and I would be honored to serve you. We will provide solid, evidence-based advice to help you reach your financial goals. We want you to experience the life you’ve dreamed about, the life you want and deserve. Call us today!