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University of Massachusetts Amherst

Family Business Center

"I Read It So It Must Be True?"

by Shel Horowitz

Don't believe everything you read, says Charlie Epstein of Family Business Center sponsor Epstein Financial Group. In a lighthearted presentation, he showed customer sales letters as junior and senior partners might present them.

The junior partner presents a well-reasoned six-point memo of do's and don’ts, aiming at a diverse but not overdiversified portfolio, able to respond quickly to the market while keeping turnover low. But the senior partner rewrites it as a five-point checklist aimed at creating high-turnover business based on rumors and guesses—because lots of transactions mean lots of commissions to the firm.

While not all written advice should be taken seriously, Epstein actually based most of his June presentation on a book: The Number, by Lee Eisenberg, a book that can guide sensible retirement and investment planning.

Epstein summarized Eisenberg's key points as "The 10 Modern Commandments for 21st Century Investing," in "thou shalt"/"thou shalt not" format. Two examples:

  • Thou shalt know that past performance is no guarantee of future results, nor shalt thou become so exuberant as to forget that eggs drop, cookies crumble, bubbles burst, and that which goes up will eventually come down.
  • Thou shalt take on risk commensurate with thy ability to sleep well at night.

The Number was one of eleven books on Epstein's recommended reading list. Among the others—for estate planning, Die Broke, by Stephen Pollen and Mark Levin, and Don't Die Broke, by Margaret Malaspina—and to understand investing, The Essay of Warren Buffett: Lessons for Corporate America, and The Making of an American Capitalist, both by Warren Buffett.

These books are important, he says, because the life of an older person is so different now. Forty years ago, people in their sixties seemed really old; the expectation was that they'd die within a few years of retiring. But when 62-year-old Mick Jagger can still put on a tremendous show night after night in front of a stadium full of screaming fans, the expectation of life quality in your 60s, 70s, or even 80s has shifted.

Meanwhile, investment tracking technology has matured, opening up new possibilities. Says Epstein, "We actually build a website that aggregates and accumulates all their money (information) in one place, and [are] able to view those accounts. That's an opportunity to organize your finances in a way that's manageable. And you can tie it back to those things that are really important to you" so that whether you're a rock star like Jagger or a business owner who wants to make an impact on your world, you can shape your investments to meet those desires in retirement.

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