Let’s not force-feed finance to high school kids, but make a finance curriculum exciting by showing kids all they can accomplish with the proper discipline. Finally, I would make people more aware about “behavioral economics”. This is a big focal point at my firm. In many ways, investors act as their own worst enemies in building wealth. We help build new habits that can make them stronger investors and help protect them against life-changing bad decisions.
I had the pleasure of interviewing Thiago Glieger, a Director at Risk Management Group, LLC with offices in Rockville, MD and Washington, DC. He and his team serve clients by helping them navigate through the financial challenges they face and build a more confident path to achieving their goals. They offer comprehensive wealth management to a variety of affluent clientele, and specialize in specific techniques for divorce cases, affluent Gen X and Millennial families, federal employees, and business owners, throughout the Washington, DC Metropolitan area and around the nation. Thiago lives in Columbia, MD with his wife where they enjoy the space and pace of suburban living. An avid cyclist, he and his wife are happiest when spending time outdoors.
Thank you for doing this with us! Our readers would like to learn a bit more about you. Can you tell us the “backstory” about what brought you to the finance industry?
Thanks for having me. In my last year of high school, I took a microeconomics class and was fascinated by it. I know, it’s strange for a high school kid to be fascinated by economics. But I really got into it. I began reading not only about economics, but about economists, and those who achieved mastery in capital endeavors. I used model portfolios to trade stocks in college and learned the value of diversification and education. I entered the financial field by way of the banking industry, but found them to be dominated by rules many of which did not make sense for individual investors. I was fortunate to land a job with an advisory firm and haven’t looked back since.
Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?
I remember a client that came to us with a really crazy investment portfolio. Retired and inexperienced, her portfolio was full of investments that were super risky. Her previous advisor clearly had not been paying any attention. When the markets became volatile in 2018 the client sustained over $1million in losses because of their improperly balanced and unattended investments. Thankfully, we were able to step in and stop the bleeding before their accounts lost any more value. I think too many people believe all advisors are created equal, when in reality, some advisor don’t fill a fiduciary responsibility to their clients. I always encourage clients to ask the right questions to make sure they’re getting the best service.
Are you working on any exciting new projects now? How do you think that will help people?
I am, actually! I’m starting a mini-series of financially related social media posts and short blogs targeted toward Gen X and Millennials, called “Cut The Bull”. We have an educational crisis around finance. At school we aren’t taught how to budget or invest, let alone how to use a Roth or how to pick 401K investments. We grow up, get jobs, and still with no training we’re called upon to make monumental financial decisions in life that will affect us for the rest of our lives. Can you imagine if your doctor or dentist had as little training in their fields as most of us do in financial management? Would you trust them to take care of you? But money doesn’t have to be complicated. There’s so much jargon in the finance industry. It’s not all about pie charts or graphs — people want to know that they’re doing the right thing with their money and that they’ll be okay. Cut The Bull is going to offer simple but savvy money tips to Gen X and Millennials. It’s time to “cut the bull” and get real with people about money and investing. If I can offer a platform for the masses to start getting an appetite for this finance stuff, I think we all benefit.
Ok. Thanks for all that. Let’s now jump to the main core of our interview. According to this report in Fortune, nearly two-thirds of Americans can’t pass a basic test of financial literacy. In your opinion or experience what is the cause of these unfortunate numbers?
Our education system. I eluded to it earlier in your previous question, and I think that our school systems should have more mandatory finance classes. The first time I was introduced to finance was that economics class in my senior year of high school — as an elective. That’s a recipe for disaster. There are so many economic decisions that we need to make throughout our lives that have huge impacts on our financial safety and well-being. Figuring out how much house to buy isn’t the same as being able to make the mortgage payment. Becoming an adult mentally is different than becoming an adult chronologically, and we need to push our school systems to teach our kids how to take responsibility for their money and set their trajectory toward financial success. Using debt as an asset class is another thing that our schools never teach. The poor use debt to survive while the wealthy use debt for leverage and to build more wealth. Just to be clear — I’m not talking about credit card debt here. Using money you don’t have just to get things you don’t need is bad, no matter how to try to slice this cake. Credit cards are a convenient tool, but pay those things off immediately.
If you had the power to make a change, what 3 things would you recommend to improve these numbers?
We have to make finance relatable. I talk to young investors all the time and so many of them say they simply can’t relate to their parent’s advisors. Our industry is finally starting to catch up from the past but it still has so far to go. If we can make finance not be so “Wall Street” and show people the impact that seemingly small decisions have on their future, then we can start moving the needle. I’m hoping the “Cut The Bull” series will help make a contribution to this. Secondly, our schools should take more responsibility. Let’s not force-feed finance to high school kids, but make a finance curriculum exciting by showing kids all they can accomplish with the proper discipline. Finally, I would make people more aware about “behavioral economics”. This is a big focal point at my firm. In many ways, investors act as their own worst enemies in building wealth. We help build new habits that can make them stronger investors and help protect them against life-changing bad decisions.
Ok, thank you! Now to the main question of our interview: You are a “finance insider”. If you had to advise your adult child about 5 non intuitive essentials for smart Investing what would you say? Can you please give a story or an example for each?
First and foremost, I would tell them to learn the behaviors and disciplines of successful investors. One of the most influential parts of growing wealth is having good spending habits. Stay within a budget and cut extra costs wherever you can. Here are some practical ways to do that: buy a coffee maker instead of spending $5/day at Starbucks. Make dinner 3 or 4 nights a week instead of eating out all 7 nights (gentleman, your ladies will love you for this, trust me). Negotiate your car insurance, cable, and cell phone bills. All of these collectively can easily save you $300+ a month. That’s $3,600 year. Invest that and with hypothetical moderate returns you’ll potentially have close to $400,000 after 30 years, and that doesn’t even count your 401K and other investments. Oh, I have to add — my compliance department tells me that this is where I have to say that there are risks involved with investments including loss of principal.
Okay, now that that’s out of the way, the second tip I would give is that money is such a head trip. How we were raised and our life experiences shape our feelings and ties to money. Take this, for example: let’s say you inherited $100,000 from your grandmother. You loved your grandmother and had a great relationship with her. Then a few months later, you won the lottery for another $100,000. When I ask you how much risk you’re willing to take investing those two $100,000 piles, grandma’s $100,000 is more likely to pull on your heart strings and you’ll likely be much more conservative than when investing the $100,000 you won from the lottery. Why is that? It’s the SAME amount of money. Because money is a total head trip, that’s why. We can have emotional ties to money and it can inhibit our ability to make smart decisions with it.
The third tip is to know the difference between an expense and an investment. Your IRA is an investment. Your car is an expense. Your house is an investment. Your vacation is an expense. I’m not saying that you shouldn’t drive a decent car or get away to recharge periodically, but be careful how much you spend on things that do not add value over time. The more you spend on current lifestyle, the less you have for future goals.
The fourth tip I would give them is to stress-test their portfolio. Stress-testing is a process in which a portfolio is analyzed and scenarios are run against the portfolio to see how they hold up during a variety of market conditions. We are officially in the longest bull run (a period when markets go up) in the history of the stock market. Many analysts have been calling for a recession in the economy for some time, others are simply calling for a correction to the market. If you followed the markets late last year, you probably saw the big drop in late 2018. Equity markets were down nearly 20%*, taking portfolios with them. We’ve since recovered from that but who knows what the markets will do next. Bear markets (when markets go down) don’t happen “just because”, but lest we forget that gravity still exists. There will be a market correction and your portfolio needs to be allocated appropriately and ready for when the time comes. Stress-test to be stress-less.
Finally, I’d encourage to remember that tomorrow is coming. Close your eyes and imagine what you want your future to be. 50 years from now? 25? 10? 5? Take that vision and begin to fashion a plan to make it a reality. What’s the likelihood you’ll achieve a goal if you don’t have a proper plan on how to get there? Businesses spend countless hours crafting business plans to execute their objectives. A financial plan is similar, it’s a roadmap to getting you where you want to be.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
I certainly give credit to my parents for fashioning me into the focused, dedicated caring person I am. They immigrated to this country when my sister and I were young, searching for a better future for us. It takes an immense amount of courage and perseverance to push through learning a new language and culture while having a smile for your kids. Their belief in the American Dream never wavered, and we were raised on a steady diet of “in America, anyone with goals and the strength to follow them can make them come true.” They pushed us and challenged us, and everything positive about who I am today is because of their guidance.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
My favorite quote is from Abraham Lincoln: “And in the end, it’s not the years in your life that count. It’s the life in your years.” I measure the life in my years by the impact I’m able to have on others — my community, my clients, my family and friends. Leaving a legacy of having made my community a better place is to me the best way to define success, and I try to live my years full of the understanding that to give is to get.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂
If we could all just remember to show kindness and respect to each other, I think our world would be a better place. You don’t have to agree with everyone, you don’t have to see things from the same angle, we can all still respect and listen, even — especially — to those with opposing views. Who knows, you might even learn something.
Thank you for the interview. We wish you continued success!