In wealth management, adopting an endowment mindset can transform how you approach your financial future. By focusing on sustainable strategies that weather market fluctuations, you can secure your legacy for generations to come.
An endowment mindset.
You know, I talk a lot about thinking as an individual, like an endowment. How do you create a sustainable financial situation?
I just got a report from my alma mater, the University of Michigan. From July 1st, 2023 through July 30th, 2024, in the annual report, they proudly announced that they earned 8.93%, which is, as they said, in the top quartile of higher educational institutional endowments. 8.93%, not bad.
I happen to audit my own firm’s data and the average investor generally gravitates toward the equivalent of a 70 /30, 60 /40 mix of stocks and bonds. That’s people’s risk tolerance. And the annual returns across the board for the fiscal year ending on June 30th, 2024 was 12 .2%. Wow. As a basic comparison, I feel great.
Now, one other data point, the S&P 500 during the 12 months was up 24%.
So, it depends on your benchmark and your comparison of what your relative happiness/joy of expectations are because as people often say, “You know what, I’m gonna be happy as long as I’m 20% ahead of my neighbor,” which is silly, but that’s just the way we are wired as humans in a competitive nature and a competitive cycle. But, I mentioned the endowment mindset because I want people to be thinking, “How do I create the architecture to be able to live through ups, downs, every which way, inflation, deflation, so I can think about my kids and my kids’ kids and my grandchildren’s children,” on our path to Wisdom, Wealth, and Wellness.
Have a great day.
