Last August, we went on a vacation to Lake Powell, which for me is one of the most beautiful and unique places in the world. The lake has over 1,000 miles of shoreline and is being fed by the Colorado River. It is located northeast of the Grand Canyon.
One of the activities that you can do there for fun is cliff jumping into the lake. We made sure it was deep enough and that there was no chance of hitting a rock and getting hurt. The cliffs we jumped off range from 10 to 55 feet. This year, the cliff we chose was in the 40-foot height range. Most of the teenagers that jumped off the cliff were nervous. Being up 40 feet in the air can be scary, especially if you have never jumped off a cliff before.
My son, Seth, has been cliff jumping for years. When he got up there, he looked over. He knew it was safe and that he could do it, so he jumped. He ran back up and jumped three more times before anyone else even attempted. Before jumping the fourth time, he asked me if he could do a backflip off the cliff. I wasn’t sure, but he has been doing flips for years now and is good at it, so I said, “Sure! But please be careful.” He did the flip and it was awesome! I was able to take cool pictures. All the other kids decided that they could now jump after seeing Seth do a backflip. It seems like watching Seth jump gave them the confidence to do it.
This experience is somehow similar to the financial services industry. Clients don’t feel confident to invest their money. It’s scary for them, and they don’t want to lose what they have earned. They also know they need to earn interest and do something with their money. None of the kids wanted to be the “one” that didn’t jump off the cliff, just like clients don’t want to be the ones that didn’t do something smart with their money.
I've heard several times that the financial world is very complex. The terms used in the industry like: compound interest, internal rate of return, inflation, tax deduction, annuities, life insurance, mutual funds, stocks, and bonds are familiar to many people, but they don’t fully understand what they mean. They are nervous to put their money into something they don’t understand.
This is where you come in as a financial professional. You show them how to jump off the cliff and in some instances, do a backflip. Showing them the proper way and performing well makes them want to jump in as well and enjoy the process.