2020 had millions of tragedies and surprises. Many of us are glad to see it gone. Many act like the world hasn’t changed. Others seem to think we’ll be back to “normal” by Tuesday at the latest.

Thoughtful people reflect on the past and attempt to draw lessons to make the future better. One theme dominates my reflections on 2020. I think about how so many people refused to come to grips with the truth.

Truth is my friend. I frequently dislike the truth, but it’s easier to live in the world dealing with the truth. Often, I need the help of wiser people and those with different expertise. Medical professionals, mechanics, computer technicians, coaches, and scores of others have reduced my risk and increased my effectiveness to clients. Investors have expected me to help them build or preserve wealth or accomplish legacy goals.

Being an expert involves discovering the relevant truth. Many facts can be true. Usually only a few are critical. Being professional means putting another person’s interests first.

Being a trusted advisor means being helpful is more important than simply being right. Many adults have a superb idea of how to improve their parents’ health or protect their parents’ finances. It is foolish to treat your parents like children. Instead, respect, gentleness, patience and carefully planned communication can help the parent understand and accept help.

I strive to be an expert, professional, trusted advisor. Here are just four examples of people who couldn’t come to grips with the truth. I’m reflecting on how I might do a better job of helping them.

An advisor damages the client and wastes both of their time by not researching, understanding, and explaining market reality to the client.

Broker Paul represents a forceful owner. The owner told him she wanted $X dollars for her property. Paul did not research to determine the likely appraisal price. Later he saw an evaluation which indicated that his client’s hopes were not attainable. Paul agreed that asset would not appraise for what his client wanted, and buyers were not likely to pay more than a third-party appraisal.

Paul was unwilling to convey bad news to his forceful owner. Instead, he was willing to waste months of his time and let the appraiser, the lender, and the buyer’s broker explain what Paul could have learned in a day and tactfully conveyed in less than an hour. Not speaking the truth doesn’t make it go away.

A professional advisor has an obligation to politely, clearly, explain inconvenient truth.

Buyer Rocky heard that other buyers would pay more and act faster. I was probably blunt when we talked about the truth. Rocky took that as evidence that I didn’t have his best interests at heart. I should have been more empathetic, but it might not have changed Rocky’s reaction. He didn’t want to hear that there was competition.

After missing three superior opportunities, we had several polite, direct, and friendly conversations. We’re both learning whether Rocky will be responsive or offended by other inconvenient truths.

The best opportunity will never be perfect.

In 2020 Sean and I considered about 20 opportunities. He missed two, he closed one, and has another in escrow. Sean always wants the best deal to be a little bit better. He’s walked away from good opportunities when other buyers offered more than he would pay. He thinks they’re paying too much. That may make Sean feel better, but it won’t help him achieve his investment goals.

Sean knows that Nordstrom wants him to be satisfied when he pays a premium price for a quickly depreciating product. Nordstrom hopes he will drop more money with them. In contrast, when a millionaire investor sells an income property to another millionaire the two will probably never do business again. Each deal Sean walked away from was captured by another millionaire investor who wanted to become wealthier. Sean cannot recreate any option today as good as the ones he declined 60 days ago.

A great broker can report truth but seldom change truth.

Richard intensely wanted a certain amount for his desirable property. He explained to me that the former owners of similar property had sold too cheap and that he hoped I could sell it for what he wanted the property to be worth. I explained my magic was not that deep. He stood firm.

More than a dozen buyers and brokers wanted the property, but none were willing to pay Richard’s premium. In effect, Ricard prefers his existing property to scores of others which would give him more benefits he says are important for his life goals.

Richard has left equity locked up in an asset which delivers inferior benefit compared to what the equity could be producing. His actions indicate that he prefers bragging rights on an older asset to the superior cash flow, less management hassle, and the newer asset he has repeatedly said he wants. I’m confused by his conflict.

Summing Up

2020 surprised us all. I was shocked and disappointed to see several strong-willed people beat their head against the wall. The wall never budged. These investors and brokers ignored truth and acted on hope despite the facts.

Folly is doing a foolish thing, even after being warned by a credible source that the action is dangerous and there is a better option. I want to do a better of presenting better options when clients and friends balk at the truth.

2020 was a profound year for the planet. What was your best reflection from it?

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Terry Moore, CCIM, is the author of Building Legacy Wealth: How to Build Wealth and Live a Life Worth Imitating. Read his “Welcome to My Blog.

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