Circle of Competence

Are you ready to dominate your financial course?

Welcome to the only newsletter that’s one part #golf, all parts #money.

I’m super happy you’re here.

You want confidence and clarity over your financial future. I’m here to help guide you there.?Think of me as your financial caddie.

Together, we can align your money with your life.

That's finding your financial swing.

So, if you’re feeling loose, let’s tee one up on…

The Coach, the mentor, and the hype-man

“Tiger will do more than any other man in history to change the course of humanity.? I don’t know exactly what form this will take, but he is the Chosen One.”

These bold words came from the mouth of Tiger Woods’ first coach - his father, Earl.

Earl Woods marshalled Tiger from an early age, through his development from toddler to prodigy.? Earl was part father, part coach, part mentor, and part hype man for the young Tiger.? Earl provided the platform and the spotlight; Tiger brought the electricity.?????

Early made the aforementioned bold statement in 1996, prior to Tiger’s first Masters.? Later that season Tiger won his first major, the 1997 Masters, by 12 strokes.?

Earl also spoke to the role that he and Tiger’s other coaches played in his life as Tiger was growing up -

"Tiger’s always had a team, and that team has been directed to give close and personal support to Tiger and follow the game plan, which was, as Tiger grew into his responsibilities, to pull back and allow him to grow, make mistakes and learn from his own mistakes and mature."

Role of the coach

The word “coach” can mean a lot of things to a lot of people.?

Andy Reid and Hank Haney are both coaches, but...

• I don’t think you’ll see Big Red offering up swing tips to Tiger anytime soon.?
• Conversely, Haney would be far from qualified to don a headset and lead the Kansas City Chiefs from the sideline.?

At its most foundational element, the role of a coach is to facilitate the personal and professional development of individuals or a team - helping them achieve their goals, overcome challenges, and maximize their potential.

Coaches have different specialties.?

You’re probably most familiar with coaches of sports teams, but executive coaching, life coaching, and career coaching are other domains where coaches reside.? Even within these different areas, coaches may further specialize in a specific industry, like entertainment or manufacturing, or on a specific skill like sales or leadership.?

While the specific responsibilities and focus may vary, coaches most commonly assist the individuals or teams with:?

• Assessment
• Goal Setting
• Skill Development
• Feedback
• Accountability
• Motivation
• Time management

?Coaching the GOAT

Tiger Woods has worked with several coaches throughout his career. Each coach played a significant role in shaping Woods' game and helping him achieve success.

Here are a few of Tiger’s more notable coaches and areas where they specialized:

Butch Harmon (1993–2004): In the latter stages of Tiger’s amateur career, Earl Woods sought out guidance from Butch Harmon to prepare Tiger for the professional ranks.?? Woods turned pro while Hamon was his coach and won numerous major championships in his early career.?

As a coach, Harmon's approach can be summarized by a strong emphasis on starting the swing correctly and mastering the skill of shortening one's swing while still maintaining a broad motion, all without sacrificing power.?

He promotes what he calls a "compact swing," which involves stopping the movement of the arms at the same time the shoulders cease their rotation during the backswing.

Hank Haney (2004–2010): After Woods and Harmon split, Tiger was introduced to Hank Haney by fellow PGA Tour golfer Mark O’Meara.? Woods and Haney enjoyed a successful tenure together, with Woods winning more major championships, however, the relationship eventually splintered and the two parted ways in 2010.

In simple terms, Haney's teaching philosophy is about empowering students to become their own best teachers.? He’s a proponent of educating golfers about the flight of the golf ball and how it relates to the swing.?

To put this philosophy into practice, Haney uses practice drills specifically designed to master the golfer’s approach to the swing path. This is particularly crucial for addressing the common issue of slicing, which many amateurs and even some professional’s encounter.

Sean Foley (2010–2014): ??Sean Foley followed Hank Haney as next in the succession of Tiger’s coaches.? Foley’s main focus was to modify Tiger’s swing to help him deal with various injuries he had encountered during his first decade on tour.??

Unlike Woods’ previous coaches, Sean Foley is a self-taught expert in golf, drawing from a variety of unique influences such as geometry, kinesiology, and Eastern spiritual principles to create his comprehensive philosophy on golf.?

Foley starts with the mental side of the game and encourages golfers to be authentic on the course, emphasizing the idea that you can't pretend or fake your way through the game.?

On a more technical note, Foley supports a modified version of the stack & tilt method. Specifically, he highlights the importance of certain elements to achieve a perfect swing, including distributing weight toward the front at the starting position, avoiding a dipping left shoulder and keeping a straight back leg during the backswing, a substantial shift of weight towards the front during impact, and a subsequent rise to a perpendicular position during the follow-through.

Chris Como (2014–2017): Chris Como continued the process of helping Tiger implement physical changes required due to injuries.

Como brought a very scientific approach to coaching Tiger.? He drew upon his real-world teaching experience and collaborations with renowned PhD’s to bring a unique perspective on enhancing Tiger’s golf swing.? Como’s collaborations also resulted in several scholarly articles in the field of biomechanics.?

Getting good advice

As you look through his history with coaches, you can see the diverse perspectives Tiger relied on for swing advice.? From the compact swing of Harmon, to the enlightenment of Foley, to the biomechanics of Como – all Woods’ coaches emphasized a different aspect of Tiger’s physical and mental approach to the game of golf.? ??

Fortunately for Tiger, he had the benefit of selecting a well vetted professional from a long list of prospects.? His coaches were either previously well established, highly recommended, or specialized in a specific skill that Tiger needed in that phase of his career.?

Unfortunately, you probably don’t have the same leverage as Tiger when it comes to finding financial advice.?

According to the BLS, there are around 300,000 financial advisors in the U.S., but, similar to swing coaches, they aren’t all made the same.?

Technical knowledge, like how to properly execute a backdoor Roth contribution, is one of the key skills a reputable financial advisor should possess.? Unfortunately, calling yourself an “advisor” doesn’t mean you have it.?

Take this recent story I came across on LinkedIn from a fellow advisor, and tax nerd, Benjamin Abitz, CFP?

Circle of Competence

We all have a circle of competence.? It’s where we have an edge over competitors.?

• Tiger’s edge exists in playing the game of golf.
• Hank Haney’s edge exists in teaching the compact swing.
• Sean Foley’s edge exists in coaching the alignment spiritual, mental, and physical planes (whatever that means).?

Tom Watson, the founder of IBM (not the golfer) summed it up best when he said,

“I’m no genius.? I’m smart in spots, but I stay around those spots.”

This speaks to the importance of knowing your circle of competence.?

When you stay within your circle of competence, you’re playing a game you can win.? When you stray from your circle of competence, the rules are not in your favor.?

Our misguided DIY backdoor Roth contributor is a great example of this.?

He knew enough about saving and investing to be aware of the backdoor option but didn’t know enough to execute it properly.?

Even worse, he consulted someone he thought would be competent, but they either weren’t competent or didn’t know the right questions to ask (which is also a form of incompetence).?

Play games where you have an edge. Avoid the games where you don't.

Expanding your Circle of Competence

Tiger used coaches to expand his circle of competence. Working with a team can help you increase yours.

Here's a real life example I life every day -

Advisors work in a lot of domains – investments, estate planning, risk management, taxes, behavioral finance, retirement planning, and so much more.? It’s impossible to be an expert in all of them.?

It’s one of the reasons why working in teams is so important in this space.?

For example – I started my financial advice career at an accounting firm.? You better believe I learned a lot about taxes.?

I also worked with a brilliant portfolio manager.? He did a lot of the heavy lifting with investments so that I didn’t have to.?

Over time, I’ve delved deeper into tax planning, behavioral finance, and understanding equity compensation plans, because those topics fascinate me.? Sure, I can talk about investing.? I know what price-to-earnings and Sortino ratios are, but they don’t interest me as much.? I’m also fortunate to have a whole team of portfolio managers who do love to nerd out on that stuff.?

Because I get to work with a team, my team’s circle of competence is broader than what it would be if I was by myself or working with only one other person.? ??

To me, it’s one of the main value propositions we deliver to our clients, and it sets us apart from the larger firms with 800 numbers.? ??

Finding your circle of competence

Where’s your circle of competence??

Where do you excel??

What are the games where you have the edge

More importantly - Do you know what you don’t know?

As Charlie Munger puts it -

“Knowing what you don’t know is more useful than being brilliant.”

I would tend to agree with him.?

When you find your circle of competence, stick to it and outsource the rest.