Keep Your Money Where You Make Your Money

The biggest secret that the financial services industry doesn't want you to know is that your employer is almost always your best financial services provider. Whether you love or hate your job, even the best financial advisor can't compete with the benefits provided by your company. And your employer provides you with the most important benefit of all — your paycheck, which, if you save and invest it appropriately, is like rocket fuel when it comes to driving your own financial security.

Our Think Tank at Financial Finesse estimates that an employee could leave as much as $1 million on the table over the course of his or her career by not taking full advantage of company benefits. Think about that for a minute. One million dollars — how would that change your life? And why does no one tell you this? You'd think that, with all their expertise, financial advisors would be all over this route to financial security, the same way the pharmaceutical industry would love to find a cure for the common cold.

And what a huge difference this would make to so many Americans. It would change our economy and the prospects for our children and grandchildren. And yet most financial advisors ignore, or at the very least minimize, your employee benefits. Why? How is it even possible that they would overlook something so big?

The answer comes down to money (as most things do). The vast majority of financial advisors serve the retail market — meaning that they don't get compensated at all when you invest in your company benefits. It's not that they want you to ignore your benefits, but you are coming to them with money to invest or protect, and they are paid based on the investments and insurance they sell or manage for you. There is simply no incentive for them to work with you to maximize your company benefits. At best, they would be spending valuable time and not getting compensated for their efforts. At worst, you might discover that your company benefits provide you with sufficient opportunities to grow your wealth and that you actually don't need an outside advisor.

Just like you, financial advisors have to put food on the table. If a task was not part of your job description, you didn't get anything extra for doing it, and it actually took you away from opportunities to excel at your job, would you do it? Probably not. And as a general rule, neither will most financial advisors.

There's another reason most employees don't think about their employer as their best financial services provider and the easiest means to financial security. I call it the Happy Hour Phenomenon, and I fell into it big-time when I was in my first job just out of college.

Who doesn't love Happy Hour? It's a workplace necessity, a reward at the end of a long workweek, a ritual through which lifelong friendships are sealed. But what an oxymoron! Because anyone who has been to a Happy Hour (at least a good one) will tell you that the conversations are anything but happy. I can't count all the Happy Hours I've spent with coworkers bashing everything from our salaries and bonuses to our benefits to the mean security guard who pretended he didn't know us even though we signed in every day.

I'm certainly dating myself with the signing-in bit, but it seems like the security in workplaces is about the only thing that has changed when it comes to Happy Hour gripes, which still include working conditions, anal bosses, dated software, go-nowhere meetings, flimsy pay, too much work demanded, and too little to show for it. This chapter not only addresses what you will never hear over the clinking of beer bottles but tells you one of the most fundamental things about your finances that your financial advisor won't tell you: the very workplace you spend time groaning about is actually the place where most of your wealth can come from.

In my first job as an investment banker, I worked for a great guy and a wonderful mentor whom I will call Michael. Even the Happy Hour crew gave him the thumbs-up and were jealous that I'd lucked out in getting one of the good bosses. Michael didn't always present his advice in a way that got through to me at the time, but in retrospect, I can see that he was almost always spot-on. Here is what I didn't hear him say:

1. I was eligible for a 6 percent match on my 401(k) plan, which meant that the company was paying me to invest in the plan. That match was actually larger than my raise — but I didn't even know it existed. Had Michael turned to me and said, "Davidson, do you want a 6 percent raise?" I would never have turned him down and probably would have thought he was crazy for offering. Of course I wanted a 6 percent raise! I wanted an anything-percent raise! But by not investing in my company's 401(k) plan, I was turning that raise down.

2. I was losing money because I had chosen the wrong health care option. Wanting to keep as much money as I could in my paycheck, I had ticked off the cheapest possible health care box — the high-deductible plan. This choice makes sense for people who are young and healthy and don't have a history of visiting doctors as often as they visit the gas station, but I did. Suffering from chronic sinusitis, I was dealing with allergies, sinus infections, or complications from sinus infections year-round and doing a lot of doctor-hopping, looking for the one who could finally make me better. On the high-deductible plan, I was paying out of pocket for the full cost of most of those visits (especially the out-of-network ones). I would have been better off choosing the company's more expensive plan, which would have covered a sinus surgery to fix my sinus problems for very little out-of-pocket cost. And then, after surgery had cured my sinus problems, I could have stuck with in-network doctors for annual physicals and rare illnesses. This mismanagement of my health care option cost me $30,000! Again, what would I have said if Michael had asked me, "Davidson, do you want to waste $30,000 and have a low-grade sinus infection for the next 20 years of your life, or do you want to get a fully funded operation that will fix your problems, make you healthier, and reduce your medical expenses by about 90 percent?" Do I even have to answer this question? Bottom line: to compare health care plans, don't just look at the premiums. Add in what your estimated out-ofpocket costs would be, depending on your general...