MT20 | Mark Reeve On What Differentiates The Financially Successful

• Top tips that financially successful people follow
• Why Sticking to the plan is so important
• Successful people listen to advice
• Understand the market cycle for long term

Transcript: Mark Reeve on What Differentiates The Financially Successful

Hi, everyone, welcome to another episode of MoneyTok, where we help make personal finance and investing simple and accessible through both my own experience. I’ve been doing this for about 20 years now. This show is about money and wealth creation. And we talk about so many ways of making money, bought retirement planning about stocks, bonds, gold, real estate, crypto, and so many kinds of things.

Mark, thanks a lot for joining us today. Would you like to introduce yourself?

I moved to Singapore in 2012 and is married with 2 young boys. Prior to moving to Singapore, I was at Barclays Bank for 18 years and finished my career there as a Private Banker, managing over USD 300m. I have now set up my own business within St. James’s Place, helping people achieve their financial goals & freedom.

Wow, setting up a business helping others achieve financial freedom. We are exactly the same, aren’t we? Except nobody pays me and very few listen to me either. I suppose they listen to you though. Do a lot of people come to you for advice?

In the last 15 years, I would estimate that I have been lucky enough to work with circa 300 financially successful people.

300 people. That’s a lot of dollars! And data points. So you must really have a lot of insight into how they approach their portfolios. Speaking for myself, I tend to approach my portfolio with care, in case it bites – or turns into a bunch of zeros. But I suppose your clients have no such concerns. How do they think about money and investing – and how is it different from the rest of us?

Generally, they have a plan which they review regularly. They take advice – may not always implement it but being open to receiving advice is important and they understand how markets work over the longer term.

OK, I can already see why they are more successful than others. Having and sticking to a plan is easier said than done. Yet it’s so important, isn’t it?

Having a plan of what your needs & goals are means you are more likely to become financially secure & independent in the future. These goals will change over time, but having an idea of where you need to get to significantly increases the chances of getting there.

Early in life, when I was finishing University, it was about enjoying myself and I think this is important for people. At some point though developing good habits with money is essential. I get so frustrated that this is not actually taught in school. The basics of knowing how much we earn each month, our spending, and getting used to saving something even if it is very small. Starting somewhere and when relatively young is far better than only giving it some thought in your mind’s 40s and then having less time in the years ahead.

Successful people in managing their finances, keep track each year of how much savings they have, and how the value of their investments has grown. Seeing this information build over time really helps us evaluate how our investments/ wealth is growing.

I see a lot of people with good intentions, and plans for the future, but with life being so busy they lose track or momentum over time.

Exactly – sticking to the plan is far harder than just making one. And I suppose that’s why financial advisors such as yourself play such an important role in their success. And speaking of advisors, you also mentioned that they are open to advice, even if they don’t act on it. What does that mean?

Everyone needs advice whether it be for wealth management, tax planning, mortgages, insurance, succession planning & will writing. They may not implement the advice straight away but to start thinking about things is very important.

For me, developing a long-term trusted relationship is essential for most people to become financially secure in the future. Unfortunately, I see a lot of short-term advice from banks & insurance agents that focus on selling products rather than helping people plan properly.

Even for people who are managing investments themselves, rarely do I find someone managing all their wealth themselves. For the odd few that can do this and do it well that’s great. From what I tend to see people try investing themselves, but do so to varying degrees. Most of my clients do some investing themselves into various investments/instruments but value the advice I can offer and help them plan for the longer term. I do not expect to be the sole person managing all of their wealth but want to help manage part of it and plan for the future.

That’s a key point, which is to plan and also act on advice oriented towards the long term. What is it about markets that they seem to appreciate better than those that might be more focused on quick wins?

Short-term outlooks are trading and most successful people have long-term outlooks for investing. They understand markets go through cycles of volatility at times. It is hugely important to try and avoid emotional reactions when markets are falling, making sure you are well diversified and always retain decent levels of liquidity.

This is where with my own personal finances & wealth, I keep a record each year of how my investments have performed, and how my savings have increased or decreased and this allows me to understand how my spending has been that year and how my wealth may have grown or reduced in the short term. Building this picture really helps you manage emotions when markets are volatile. For example, if I can see my investments have increased each year for say 5-7 years and then there is a period of 1 or 2 years where they may be flat or fallen this helps put things in perspective. I know over the next 20 years I will see approx. 80% positive years where my wealth has risen and only a few years when this is not the case.

That is indeed the key point, isn’t it? If you have a long-term view and more importantly, a long-term record of your performance, you are less likely to panic in a downturn or even a stagnant period. Whereas, I’m pretty sure 99% of us – myself included actually – do not keep that kind of a record, and hence every cycle is like groundhog day, where you keep re-learning the same lessons rather than keeping perspective based on the past.

Thanks a lot, Mark for this very insightful chat. If I might summarize, the main things you think that differentiate the financially successful from the rest of us are their understanding of market cycles, their ability to frame and stick to a plan, and their willingness to listen to advice. We’d all be well-advised to do the same!

That’s it for today. This is MoneyTok and you were listening to Mark Reeve, Partner with St. James’s Place Wealth Management, in conversation with Amit Ray. See you next time.

Our Guest: Mark Reeve

Well, today we have with us Mark Reeve, Partner at St James Place Wealth Management, who’s spent his entire career advising people on how to deploy and invest their money. And he’s going to give us insights into how financially successful people think about managing money.