John Wooden is the greatest college basketball coach of all time, winning ten NCAA championships as the head coach of the UCLA Bruins. The Wizard of Westwood paid attention to small details, especially socks and shoes.
Each season, Coach Wooden instructed his players on how to correctly put on their socks and tie their shoes because if a player had trouble with their feet, they would not play well. He wanted to eliminate blisters and untied shoes that slowed down his players. A small detail that paid big dividends.
In the book Wooden – A Lifetime of Observations and Reflections On and Off The Court by John Wooden and Steve Jamison, he talks about how all the parts are needed for a car to run correctly, but if it had loose lug nuts, the wheels would fall off. Lug nuts are cheap and cost about $45 for a box of 24, and I doubt anybody ever considers them when buying a new car, but they're a vital component for a functioning automobile. Coach Wooden had star players like Bill Walton and Kareem Abdul-Jabbar, but if the other players on the court did not play well and support each other, the team would lose. Bench players, substitutes, and lug nuts help complete the process and make things work.
Successful investors must pay attention to small details, like fees and expenses. Review your advisor fees and expense ratios on your funds. Try to cut the number of funds you own as well. Your funds have significant overlap if you own a few dozen or more, and you don't need four or five large-cap mutual funds. A quick search on Yahoo! Finance can help you research your fund's allocation, holdings, and fees. The ADV highlights your advisor's costs.
Also, check your spending and budget. Can you eliminate recurring payments or reduce nuisance fees?
Your 401(k) is another detailed battleground. If you own a retirement target date fund, you don't need to own anything else. A key component in your plan is the employer match, and it's paramount that you match the match. For example, if your employer offers a 5% match, contribute 5% of your pay to the plan. If your plan offers automatic rebalancing, select the annual option. An annual rebalance keeps your risk tolerance in check.
If you pay attention to the small details, they will add up to big wins.
Failing to prepare is preparing to fail. ~ John Wooden
May 4, 2023
Bill Parrott, CFP®, is the President and CEO of Parrott Wealth Management in Austin, Texas. Parrott Wealth Management is a fee-only, fiduciary, registered investment advisor firm. Our goal is to remove complexity, confusion, and worry from the investment and financial planning process so our clients can pursue a life of purpose. Our firm does not have an asset or fee minimum, and we work with anybody who needs financial help regardless of age, income, or asset level. PWM's custodian is TD Ameritrade, and our annual fee starts at .5% of your assets and drops depending on your asset level.
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