Daily money managers apply the same principles made famous by Sherlock Holmes.
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“The world is full of obvious things which nobody by any chance ever observes.”
–Sherlock Holmes, The Hound of the Baskervilles
Attention to detail is a necessary attribute in a sleuth, whether the clues are fingerprints, footprints, or an out of place detail. While sleuth is most often used in reference to detectives, anyone who seeks information fits the bill. Sherlock Holmes, a consummate collector of clues, valued the most minute evidence as greatly as the gigantic canine tracks that set him sleuthing on the trail of a murderer in Sir Arthur Conan Doyle’s The Hound of the Baskervilles. As financial sleuths, our clues rarely present themselves in paw print form. Our focus, as we get to know clients and their situations, is on the details of their finances, legal documents, and insurance.
“Data! Data! Data!” he cried impatiently. “I can’t make bricks without clay.”
–Sherlock Holmes, The Adventure of the Copper Beeches
Collecting data from the masses of paperwork in our clients’ homes gives us a wealth of information.
- What does this dividend check tell us?
- What are these different investment statements (some old, some recent)?
- Are sources of income all accounted for?
- What are the expenses? When do they need to be paid?
- Is there any debt?
- How many credit cards are there and which ones are used regularly? Are there miscellaneous charges on the seemingly unused cards?
The better we understand the normal rhythms of a person’s finances, the more glaringly obvious it becomes when something is wrong.
“You know my method. It is founded upon the observation of trifles.”
–Sherlock Holmes, The Bascombe Valley Mystery
This knowledge was invaluable for us while working with Jane, who we knew went to her bank three times a week to cash $70 checks. All was well until she cashed a $500 and a $600 check. We identified the problem within two days and changed her to a checkless, online account. Now we give her the spending cash she needs. She has the money she wants and her savings are protected. Vigilant oversight of bank accounts enables us to spot problems early and solve them quickly. We continually monitor clients’ accounts using online access in order to spot inappropriate or inconsistent use.
“It has long been an axiom of mine that the little things are infinitely the most important.”
–Sherlock Holmes, A Case of Identity
Discussing with clients what they may consider the “little things” will help us to help them.
- Where are the legal documents? Are they up to date and properly executed?
- What insurance is in place (employer group plan, in-network or out-of-network, Medicare, secondary, prescription, long term care, catastrophic, homeowner or tenant, umbrella)? Are they the right policies for the current situation?
- Who are the beneficiaries of IRAs and life insurance policies? Are they up to date?
- Have tax returns been completed for prior years?
- Where are documents (1099, K-1, W-2) showing income and proving tax deductions (charity receipts, medical receipts, rental property expenses, etc.)?
- How are household employees paid? Have all employer taxes, workers comp & unemployment policies been paid?
“There is nothing new under the sun. It has all been done before.”
–Sherlock Holmes, A Study in Scarlet
Advances in technology and the new and interesting ways we access and affect each other’s lives gives a new twist to being a sleuth. In addition, with the prevalence of credit and digital transactions, proof of theft and fraud moves increasingly from physical clues to inconsistencies in accounts and personal information. Tracking and identifying these issues often takes a trained eye and a proficiency with finance—skills that are an important part of being a Daily Money Manager.
If you need a sleuth in your financial life, consider contacting a Daily Money Manager.