Proof that Financial Planning is at least 90% Behavioral Science

May 28, 2013by Hoy Grimm0

Despite an annual salary of $232,735 each year that he was Mayor of Los Angeles, Antonio Villaraigosa will be broke when he leaves his position at the end of June. Apparently he spent more time escorting Hollywood starlets down the red carpet than planning his future without a taxpayer funded bank account.
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CBSLA.com reports that after earning more than 1.6 million dollars, the mayor has no savings. To maintain his current lifestyle when he leaves office, he will need to earn a salary of $750,000.

As you ponder Villaraigosa’s plight, consider your own efforts at becoming financial independent. It bears repeating, It’s not what you earn. It’s what you keep. Being smart of hard working is only part of the equation to financial independence. “Earning” and “keeping” require good decision making skills which bring us to behavioral science.

In our planning relationships, we spent the majority of our effort addressing, modifying and supplementing the behavioral tendencies of clients. This is an individualized and ongoing process that develops as clients learn successful behavior.

Villaraigosa was more focused on building relationships with political allies than with his financial planning fiduciary who could have steered him down a less stressful path. As Mayor, he holds fiduciary responsibility for the city’s finances. After examining his personal financial shortcomings, it shouldn’t surprise anyone that Villaraigosa’s Los Angeles budgets haven’t been any better. His stewardship of Los Angeles taxpayers funds created deficits every year despite tax revenues increasing from 6.6 billion dollars in 2006 to 7.2 billion in 2013.

Hoy Grimm

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