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Like Riding A Bike

Published by: Jeff Hall, CFP®,CIMA® Date: June 14, 2015

Two months ago, I bought my son his first bike, and to be honest, I think I was more excited than he was. This is a big deal, a rite of passage, a turning point in history, right? At least, that’s the way I looked at it. He and I picked out the perfect bike, had it delivered to the house, and the two of us assembled it. I was beside myself thinking that finally all will be right with the world now that my little boy can ride his bike.

After a few rides around the cul-de-sac, I’m picturing him jumping dirt mounds and winning the Tour de France. Then it happened: he fell off…and he’s not been on it since. He says he needs to get bigger. I’ll give him that. Or maybe he hasn’t realized (and his father forgot) that some things just don’t come naturally.

In reality, neither financial competence nor successfully balancing on two wheels comes naturally. How many times have you heard someone say, “I’m awful with money!” That comment always surprises me. It’s as if people think they should be born with the knowledge to make smart financial decisions.

Intelligence is not always a great predictor of financial success either. Remember Long Term Capital Management (a comical name for a hedge fund) whose principals included numerous university professors and two Nobel Prize winners in economics? The fund was a bail-out away from bringing the entire global financial system to its knees. And there are plenty of smart people on Wall Street who helped destroy the global economy a few years ago.

Based on my observations over the last twenty years, I would say that financially competent people got to that point through one of two ways, either by being taught or learning from experience. Often, it is a combination of both of these.

The “taught” most likely had someone teach and show them how money works at an early age. Both piggy banks and bicycles should be early gifts from loving parents.

The “experienced” went through the school of hard knocks. Whether it’s skinned knees or a series of traumatic financial experiences, those lessons can be hard to forget.

Sad to say, most of us don’t enter this world with the natural ability to ride a bike or to make good financial decisions. Two necessary ingredients for success in these endeavors are 1) the humility to admit that we don’t know it all and 2) the willingness to allow someone we trust to teach us until we have the confidence to navigate on our own.

Jeff Hall is a partner and Senior Financial Advisor with Rather & Kittrell. He is available at