By: Mark D. Troutman, PhD, CFP®
Recently I had the opportunity to travel to Italy, specifically Florence and Bologna, as part of a program in which I teach at Johns Hopkins University. The trip was research focused, and I was the resident economist. It was a great immersion into macro matters of trade in the world economy, finance, and policy in general. At the same time, it was a fabulous opportunity to see firsthand the birthplace of modern finance.
Florence was a leading financial center of the Middle Ages and Renaissance. It’s role as a leading city state of the Italian peninsula owed to its ability to cultivate industry, finance, and trade. The ruling families of the city were certainly full of conflict, intrigue, and competition. But the cultural and historical impact of this city endures due to the impact of these same families. Some impressions stuck out to me that inform the work we are doing with clients.
Have a plan
Power struggles were endemic to the city’s history, so turbulence will mark your financial journey. Through external influence, exile, pestilence and financial panic, the bankers and merchants of Florence managed to maintain their long term focus. This is also true with your financial plan – identify your goals, and create a portfolio that aligns with your risks, goals and required return. Then, carry it out in a flexible manner that adjusts to long term trends, rides out short term setbacks and takes advantage of opportunities in the stock market – where the long term trend is upward.
The financial power of Florence certainly flowed form the quality of its banking system and currency. But that leading position grew out of the city’s reputation for stellar businesses, particularly in the textiles industry. Many of the leading financial families built their wealth on commerce and then formed their financial enterprises. So with your wealth, and so also with your “human capital” – perhaps the most potent wealth generator you have, and certainly the one over which you have the most direct influence and control.
The “Long Game”
Good wealth generation requires “grit.” The quality marked by perseverance and discipline in pursuit of a long term goal. The visionaries of Florence had plenty of opportunities to be discouraged along the way. They adjusted, bounced back from adversity, and continued to build. The same in true with your financial goals. There will be setbacks along the way. Stick to your plan and stay focused on your long term goals.
Give back. Be a part of something higher
Florence is known as a center of art and culture, which I was privileged to see firsthand during a tour of the Uffizi Galleries. The building itself is a work of art, having been once the office buildings of one of the leading financial families of the city. The collection is priceless, consisting of original works from Michelangelo, Botticelli, Raphael, and a host of others. Much of the collection was made possible by the investment of business and finance leaders.
The business and financial leaders of the city were tough, but also people of faith. They made possible the most meaningful and beautiful building in the city – Duomo or central cathedral. On a personal level, one of the smaller chapels in the city also commissioned by one of the leading financial families “bookended” my professional callings. On one corner was Saint George, the patron saint of my first calling as a soldier and mounted warrior. On the other corner was Saint Matthew, the patron saint of my present calling as a financial professional. Both served as a powerful reminder to conduct our earthly business as a higher calling. It reminded me of why Kirk, Ken and I have invested in the CFP® and CFA® designations – among the few credentials of the financial world that carry ethical codes of conduct.
I think I speak for the entire team in saying that we hold service to you as clients, as a privilege. We seek to partner as we listen to your goals, provide expertise to craft plans, and offer advice and encouragement as you reach your financial milestones. Above all is our firm commitment to place the interests of you, above our own in the journey we take together. ■
Saint Matthew, the Saint for Financial Professionals, photographed by Mark D. Troutman, PhD, CFP®