Lower Your Financial Handicap: Advice from the Financial Caddie

By Guerdon Ely

Golf is such a difficult game that mediocrity is the norm. Investing is even harder. At least in golf, you can see the hazards and you have control over the outcome. Investing isn’t so easy. The hazards are more opaque and the variables less controllable. Knowing what to do is difficult.

In Lower Your Financial Handicap: Advice from the Financial Caddie, investment advisor -- Guerdon Ely, MBA, CFPTM, AIFATM, ChFCTM -- explains what can be done. However, it is how he explains it that makes his book different and worth reading. While good investing should be boring, good investment education shouldn’t be. Guerdon uses entertaining and self-deprecating stories from his golfing experiences as a caddie on the PGA Senior Tour, as a spotter for the TV networks, and as a golf nut to illustrate financial principles. His great storytelling and whimsical wit actually turn a dry subject into a fun experience.

By the end of the book, you will know what successful investors do. But more importantly, you will understand that successful investors, like successful golfers, know how to remain relaxed while at the same time being intensely focused. As the financial caddie, Guerdon’s advice can help you Lower Your Financial Handicap.

• Language: English
• Publisher: Guerdon Ely
• Release date: Mar 18, 2021
• ISBN: 9781953655158

Guerdon Ely

Guerdon T. Ely, MBA, CFP, AIFA, ChFC, is a financial advisor, author, and software developer. His expertise is in retirement plan distribution issues and prudent fiduciary investing. He has been used as an expert resource for financial articles appearing in Newsweek, Forbes, Bloomberg, Trusts and Estates, Retirement Weekly, and The Wall Street Journal. He has also helped prepare educational materials for the California Continuing Education of the Bar, the American Law Institute-American Bar Association, the Notre Dame Tax Institute, and the Heckerling Institute on Estate Planning.Guerdon is well known for his whimsical financial newsletters and books, in which he conveys complex financial issues in an understandable and entertaining manner. Uncertainty Is a Certainty: Fables for Fiduciaries describes the duties and procedural processes required of fiduciaries for family trust, charitable endowments, and company pension plans. In Lower Your Financial Handicap: Advice from the Financial Caddie, he uses golf analogies to explain investment principles, products, and best practices.Guerdon is known as the "numbers guy" because of his math, statistical, and programming skills. His two software programs, MRD-Determinator and Pre-Determinator, were favorably reviewed by MorningstarAdvisor.com, Investment Advisor, Accounting Today, and WebCPA for greatly simplifying some very complex and confusing tax regulations. In addition, they were recommended by Natalie Choate in her book, Life and Death Planning for Retirement Benefits, and by Ed Slott in The Retirement Time Bomb. His statistical calculations have been used in numerous articles, legal proceedings, and educational materials.Guerdon took a circuitous route to his successful financial advising practice. After graduating from UC Santa Barbara in Economics, he worked as a beekeeper, truck driver, factory worker, store manager, and carpenter before receiving his Master of Business Administration (MBA) degree from California State University Chico. Shortly after that, he started his financial career in insurance and investment sales. However, he always focused on planning and saw products as instruments for implementing plans. To enhance his planning skills, he earned the following designations--Certified Financial PlannerTM, Accredited Investment Fiduciary AnalystTM, and Chartered Financial ConsultantTM.From the time he was 13, he has been passionate about golf. Even after becoming a financial advisor and starting his own firm, he found time to work part-time as a caddie on the PGA Senior Tour and as a crew member for numerous amateur, LPGA, and PGA Tour golf telecasts. However, his greatest joy was his wife of 43 years, Barbara. He is the proud father of three girls and 10 grandchildren.Guerdon can be reached at: http://ElyPortfolios.com/

Book preview

WHAT LEADERS ARE SAYING ABOUT

LOWER YOUR FINANCIAL HANDICAP

Golfers and non-golfers alike will find Guerdon Ely’s behind-the-scenes look at ‘the hardest game in the world’ both entertaining and instructive. And they will discover why touring pros have much in common with investors—their biggest obstacle often lies not with the course or the clubs, but with their ability to think clearly under pressure.

— Weston Wellington,

Vice President at Dimensional Fund Advisors

Guerdon has a wonderful gift of being able to write in a way that is very enjoyable. He uses wit and whimsy to impart his ideas. Once you pick up his book, you won’t be able to put it down. But, more importantly, once you finish it, you won’t forget it.

— J. Richard Lynch, AIFA, MBA, Retired President of Fi360

There is nothing like Guerdon’s book. He uses golf analogies to explain investing in ways that appeal to readers who are interested in neither. But don’t be fooled by Guerdon’s engaging stories and self-deprecating humor, his book provides a clear explanation of the basics of investing.

— Ed Slott, CPA and Founder of www.IRAHelp.com

It’s a rare day in life when you get a complete surprise—a book that uses examples from golf to explain fundamental financial principles. If you’d asked me about writing a book that draws parallels between investing and golf, I would have immediately said, That will never work—forget it! But Guerdon did it, and he made it work. BRAVO! I love it.

— Marion O’Leary, Retired Dean of the

College of Natural Sciences & Mathematics,

California State University, Sacramento,

pianist, composer, and author

In his highly entertaining book, Guerdon has combined his vocation—financial and investment planning—with his avocation—the maddening game of golf. However, entertainment isn’t the primary reason you should read it. If you read his book, you will come away with a greater understanding of the maddening world of investing. The enjoyable golf analogies are just a side bonus that make this understanding that much easier.

— W. Scott Simon, JD, CFP®, AIFA®,

Former Morningstar Columnist and

Author of The Prudent Investor Act: A Guide to Understanding

In modern science laboratories, commercial kits are often used to extract DNA, and almost anyone can follow the cookbook-like directions. But true mastery comes through years of experience and by knowing the mechanics of each step of the chemical reaction. Reading this book is like being a fly on the wall as a Michelin star chef or top biochemist explains their craft. Guerdon takes the reader on a journey into the world of investing, as only he can. His expert craftsmanship is communicated through humility, humor, wit, and…lots of golf!

— David Gruber, PhD, Presidential Professor of Biology,

City University of New York, Research Associate,

American Museum of Natural History, and

Explorer, National Geographic Society

Lower Your Financial Handicap

Advice from the Financial Caddie

Guerdon T. Ely, MBA, CFP™, AIFA™, ChFC™

Copyright © 2021, Guerdon T. Ely

All rights reserved. No part of this book may be used or reproduced by any means, graphic, electronic, or mechanical (including any information storage retrieval system), without the express written permission from the author, except in the case of brief quotations for use in articles and reviews wherein appropriate attribution of the source is made.

Published in the United States by Ignite Press.

IgnitePress.us

ISBN: 978-1-953655-12-7 (Amazon Print)

ISBN: 978-1-953655-13-4 (IngramSpark) PAPERBACK

ISBN: 978-1-953655-14-1 (IngramSpark) HARDCOVER

ISBN: 978-1-953655-15-8 (Smashwords)

For bulk purchase and for booking, contact:

Guerdon T. Ely

[e-mail]

Because of the dynamic nature of the Internet, web addresses or links contained in this book may have been changed since publication and may no longer be valid. The content of this book and all expressed opinions are those of the author and do not reflect the publisher or the publishing team. The author is solely responsible for all content included herein.

Library of Congress Control Number: 2020921890

Cover design by Lisa Rothstein

Edited by Emma Hatcher

Interior design by Jetlaunch Layout Services

OTHER BOOKS BY GUERDON T. ELY

Uncertainty Is a Certainty: Fables for Fiduciaries

To Jim and Brenda, whose generosity provided years of fun and fond memories for our family. And to my wife, Barbara, who gave her family a tremendous example of how to live and how to die.

She was the nicest person you could ever hope to meet.

Acknowledgements

Nuts! I didn’t get it, was the PG-rated version of what Jim Kelly heard in his earpiece as he was describing the action at the Tradition Golf Tournament. I was in a trailer, helping with television graphics and could hear the producer’s profanity-laced comments in my own earpiece, while at the same time listening to the live feed of the announcers through a speaker. The producer had promised Kelly that he would get the hole number that Jack Nicklaus was on but, as his statement indicated, he didn’t get it. What amazed me was that Kelly had already started his sentence with the expectation of getting that number, but when he got profanity instead, he seamlessly substituted he’s on the back nine in place of the missing number. His voice gave no indication of his dilemma. There was no hesitation or stammering, just smooth dialogue.

Golf telecasts look so effortless and calm, but what you don’t see are the dozens of staffers frantically working behind the scenes gathering, coordinating, and arranging pictures, sounds, and content into a cohesive and enjoyable program. There is a reason why they call the announcers talent, but the talent of the announcers alone could never create a golf telecast.

I’ve found out that writing a book isn’t much different. It takes more than just an author to create a book. There are so many people that helped with this book that I cannot name them all or thank them enough.

I would like to start with thanking my wife. She could never figure out why I was so interested in her comments because, as she put it, I don’t understand this stuff, and I am not interested in it, which is exactly why I wanted her input. I figured that if I could make it understandable and enjoyable for her, it must be good.

I also want to thank my assistant, Deborah Cockrell, who spent hours reading my stories and correcting my spelling and punctuation. She was particularly helpful in identifying passages where my text wandered or my thoughts weren’t clear.

I especially want to thank my sister-in-law, Gayle Ely, for catching all kinds of mistakes. She spent hours correcting grammar, spelling, punctuation, unclear passages, and so much more.

As Tessie Tura, Mazeppa, and Electra remind us, You gotta have a gimmick if you wanna have a chance. The golf stories are my gimmick. It is what makes my book different from all the other investment books. I’d like to thank my friend Marion O’Leary for coming up with the idea and encouraging me to write it.

Finally, my brother-in-law, Jim Albus, made this all possible by allowing me to caddie for him and introducing me to the producer at ESPN Golf. Without him, I wouldn’t have the stories for the book. I particularly enjoyed exchanging emails with him and reading his thoughts and musings. He is a great storyteller. I think that if he took the time to write a book, it would be far more interesting and enjoyable than mine.

Table of Contents

Foreword by Jim Albus, PGA Tour Golf Professional

Preface

Introduction

The Origins of the Financial Caddie

Financial Handicap Defined

Sections

Section 1: The Equipment

Golf Bags and Equipment

Take It Seriously

Smiles

Indexes

A Simple Thing

Perception and Reality

Section 2: The Mental Game

Avoiding the Extremes

You’re Standing on It

Anticipation

Does It Work?

Thinking Slow

Wrong Memories

Invest Like a Girl

Noise

Staying Sane When Things Are Crazy

I’m Sure

Oh, About a Thousand Times

The King and I

Ignore the Image

Denial

Do You Wanna?

Focus on One Thing

The Older I Get, the Better I Was

My Duffer Brother-in-Law

Section 3: The Fundamentals

Not Bad, Considering Your Age

You Can’t Buy a Game

Short Knock

Remembering the Future

I’m Sorry

Shake, Rattle, and Roll

Boring Is Beautiful

T Is for Trevino

Everybody Needs to Save

A Bad Start

Just Ask Him

Mistaken Identity

Hyper-Trading Portfolio Deficit Disorder (HTPDD)

Success = Factors + Luck

The Third Owner

Grip Size Is a Factor

Sucker Pins

Don’t Play the Losers’ Game

These Guys Are Good

Section 4: The Rules of the Game

Identify the Ball

Know the Rules

Play by the Rules

Section 5: Instruction

Yo-Yo Man

Welcome to Change

Tire Tracks on Your Underwear

Sounds Impressive

Do It Anyway

Counterintuitive Behavior

Information Overload

Is It Live?

The Worry Gene

Imagine That

What Do You Think?

Being Human

Pebble Beach

Section 6: The 19th Hole

Concerns About Jim’s Finances

Remembering My Dad

He Had a Dream and Didn’t Need Guarantees

We Had Such a Rough Childhood

Thank You, Brenda and Jim

Building Good Memories

I Had So Much Fun with Uncle Jim

Generous to a Fault

Notes

About the Author

Foreword

I was blessed to get to play a game for a living. And, for 20 years, I was fortunate to be part of the PGA Senior Tour.

One of the best things about our nomadic lifestyle was the opportunity to renew old ties with friends and family all around the country. At some of the tournaments, I was able to have a friend or family member caddie for me. Guerdon was on the bag for many of the tournaments, and I have fond memories of traveling with him and his family.

The role of the caddie is crucial. Beyond the basics of taking care of clubs and providing proper yardages are the more intangible factors that lead to good decision making under stress and under conditions that vary with the moment. It’s a collaboration in which the caddie is a trusted advisor.

Guerdon uses stories of us working together on tour—some humorous, some more serious—as a lead-in to relate the world of golf to the world of finance. The attributes that make for good decisions on the golf course are often the same ones that make for good decisions in the financial world, attributes that he so ably illustrates—commitment to sound reasoning, learning from past experiences, the desire to work to succeed, and the understanding of the need to balance risk with reward.

It is a pleasure to find a book that adds a little entertainment to a lot of important and thought-provoking information.

Jim Albus

PGA Tour Golf Professional

PS There is a good bit of self-deprecation in Guerdon’s stories about his experiences on the golf course—but, for the record, HE WAS A GOOD CADDIE!

Preface

What did you get? That was the first question my brother-in-law, a professional golfer on the PGA Seniors Tour (now the Champions Tour), would ask as we stood over the ball, trying to figure out the distance to the pin. Since I was not a full-time caddie, and since he knew that I was either dumb or dyslexic, he would not rely on my yardage. He would just use me as a double check to confirm his calculations. My problem wasn’t that I wasn’t good at walking off yardage, it was that I had a bad habit of adding when I should be subtracting and vice-versa. For example, I might say 170 yards when it was actually 130 yards, because I added the 20 yards to the 150-yard marker instead of subtracting it. My brother-in-law would turn and look at the 150 marker that was 20 yards behind us, and then turn back and give me a look that said, I’d fire you right now if you weren’t my wife’s brother.

As a golf caddie, there was no question I got the job because of who I knew and not what I knew. As a financial caddie, I’ve earned my position through experience, education, hard work, and a desire to improve. Interestingly, as my knowledge and skills have grown, there has been an inversely proportional shrinkage of my ego. What Ben Crenshaw has learned about golf mirrors what I have learned about investing—Golf is the hardest game in the world. There is no way you can ever get it. Just when you think you do, the game jumps up and puts you in your place.¹

Since mastery isn’t attainable, the most that we can hope for is proficiency. And that is achievable in both golf and investing by learning and practicing basic principles. A number of years ago, I demonstrated some of those basic golf principles to my son-in-law. And then, I watched as he whiffed a dozen times in a row in his first attempt to hit a golf ball. After his last futile attempt, he turned to me and said, more in a tone of surprise than frustration, This is a lot harder than it looks.

You have probably already discovered that managing your money is also harder than it looks. Unfortunately, no book, including this one, can make money management easy. The purpose of this book is (a) to identify those basic principles of money management that make big differences and (b) to teach you how to develop those principles into usable skills. How well you develop those skills will depend on how much you practice them. In money management, as well as in golf, skill is achieved by knowing the right things to do and then diligently practicing them.

My brother-in-law showed me the basics of a good golf swing and then said, If you want to get good, you are going to have to hit 300 balls every day. I ignored his advice and tried to buy a game. That is a derogatory term for a guy like me who buys the latest and greatest clubs in hopes that they will make up for the lack of practice. This is doubly dumb. Not only has my handicap not come down, but I am always buying new clubs. I lose, and the club makers win.

In this book, I share my knowledge and skills as a financial caddie in order to help you improve as an investor. If you ignore my advice and do nothing, or look for foolish shortcuts, I am the only one better off, because I sold a book. I would prefer that we both win—I sell a book and you lower your financial handicap.

Introduction

The Origins of the Financial Caddie

As a caddie on the PGA Senior Tour, it was my job to help my professional succeed. As a financial caddie, I have the same responsibility when it comes to my investment clients.

I have been a financial advisor for decades and a golf enthusiast forever. I started playing golf at 13, and for a number of summers I worked at a local golf course, doing odd jobs in exchange for free food and golf. I was on the golf team in high school. Since then, I have played as much as the demands of my work and growing family would allow.

Needless to say, I was extremely excited when my sister married a golf professional named Jim Albus. Before they had kids, Jim and Brenda spent a few years traveling the world, playing on various tours. Once they started having kids, Jim settled down as a club pro on a municipal course on Staten Island. Over the years, he built quite a reputation. He played in five U.S. Opens and seven PGA championships and was the Metropolitan player of the year four times. With his success came a promotion to an exclusive country club on Long Island. When he turned 50, a combination of skill and luck allowed him to play in the Senior Players Championship, and he took full advantage of the opportunity by winning the tournament.

The win allowed him to