There is a silent epidemic afflicting approximately 30 million U.S. workers. You very well may be one of them – if you worry about money.
Sometimes that looks like stress over your day-to-day finances.
Other times, it’s concern over your future financial goals. Or, having apprehension around whom to trust with helping you to make financial decisions.
At even other times, it’s a more abstract fear about something that certainly impacts you but that you have little control over: the economy.
Whatever the trigger, you don’t leave your financial stress at home.
So, when you walk through the proverbial office door (even if it’s your home office), your financial stress tags along with you. As a result, it impacts your productivity, focus and creativity.
I am not so naive to suggest that any one of us can eliminate financial stress entirely. There’s likely to always be a little tension between where you are and where you want to be — that’s healthy stress.
But here are a few recommendations on how to take control of the financial stress that is unhealthy, all-consuming and blocking you from experiencing more (and costing your employer approximately $7,000 in lost productivity each year!):
- Come clean – worry about money is called a silent epidemic because most people keep their financial problems close to the vest. Or worst yet, they bury their head in the sand believing when they come up for air the problem will be smaller or non-existent. Admit something is amiss, even if it’s just to yourself.
- Define the nature of your financial stress – addressing your day-to-day concerns about money the same way you would your fears about the economy will only add to your stress levels! Make sure your stress management approach matches they type of stress (or stresses) you have.
- Create a plan of action – emphasis on action! Don’t just lay out what you’re going to do, but also note when, how and what tool/resources you’ll tap into.
- Don’t wait – “when/then” thinking will jeopardize your efforts to reduce your stress,
- Ask for help – it can be in the form of professional help or by enlisting a family member/friend to be your accountability partner. You don’t have to tackle your financial stress alone…unless you want to.
- Give yourself credit – take the time to acknowledge your financial strengths and figure out how you can do more of what you do well.
- Be humble enough to recognize that financial stress isn’t just about financial dysfunction.
One of the biggest problems with financial stress is how the circumstances of it force you to be a lopsided thinker. You’re so preoccupied with identifying a short-term solution, you don’t have the capacity to think long-term…to operate at your highest level of being and be the strategic, tactical, productive, engaged and creative person that you are!
Reducing your financial stress means increasing your financial peace of mind, which will make you happier and more productive (and potentially make you and your employer more profitable). Suhweet, right?!
So, let’s do this together.
I invite you to join me on Thursday, 29 January at 8pm ET for our annual Financial Open House. You come with questions; I show up with answers; and, we’ll have a good time!
I am very much interested in your financial well-being.
More than anything, I want your financial life and choices to reflect the successes you experience in other spheres of your life.
I want you to feel confident, powerful and validated. Yet, this is not necessarily how some of my clients feel when we begin to work together.
Instead, they are hiding in the financial closet embarrassed because their financial condition doesn’t reflect what they project or want. Or, they feel guilty about past choices unable to forgive themselves, let go and move on. Or, they are ashamed by what they don’t have, don’t know or don’t have control over like they expected.
For my clients whom are educated, work in diverse professions and industries, live creatively, often quirky and successful at charting their own path, this is unsettling. Because it’s out of sync with everything else about their lives.
Lots of people (I know very scientific, right?) are in the financial closet about their money situation for any number of personal and societal reasons ranging from shame to acceptance to control to validation to power. The result: They think they’re the only one!
- Are the financial goals and resolutions you have for 2015 the same as what you had last year and the year before that and the year before that?
- Has the same financial demon (however you define that) reared its head, again?
- Do you have a financial regret you simply haven’t been able to shake?
- Does that big, audacious goal feel oh so close, yet so far from your grasp…again?
Do you feel financially alone – like this is only happening to you? Do you keep it to yourself because you feel embarrassed or ashamed or guilty or confounded? Do you believe that to disclose the aspects of your money situation you’ve been hiding will minimize the accomplishments in other areas of your life?
Well, let me tell you: From my work with hundreds of coaching clients and thousands of workshop attendees, I can assure you YOU are not alone. Everyone struggles with something when it comes to money. (And by the way, don’t fall into the trap of limiting the meaning of the word struggle to survival.)
The key is to not let your financial struggles sabotage your financial well-being.
Now, to be clear, there’s a difference between “secret” and “private” and I’m NOT recommending that you broadcast the details of your money situation to everyone, everywhere. Unless sharing like that is something you do naturally. Personally, I can’t imagine that; I’m open, but reserved. Professionally, my private banking training can’t fathom it.
But if I may, I’d like to add another goal or resolution to your list — come out of financial hiding. Especially if you think you’re the only one dealing with whatever is tripping you up. This way of thinking is costly – both financially and emotionally – and can negatively impact your financial well-being.
So as you settle a little more into 2015 remember – you’re not alone. And if you are ready to come out of the closet about your financial situation, I can help. Click here to learn how.
It’s here! That time of year when you and I are inundated with messages about how to make this year our best year yet. According to the University of Scranton-Journal of Clinical Psychology, 45% of Americans will do this by making New Years resolutions.
Some will tell you that making resolutions is the key to your transformation; others will tell you resolutions are hogwash and instead you should focus on goals.
At the end of the day, I think it boils down to semantics. You can call it making resolutions or goal-setting – either way, both reflect that there is something about your current reality or experience that you want to change.
With all the emphasis on the actions you need to take to achieve your resolution or goal (i.e., avoid junk food; exercise more; spend less; save more; etc.), which indeed is important, I wish more people focused on the mindset needed to change their reality.
To truly succeed at keeping your resolutions or with meeting your goals, you need to change your mind, too!
Do you know why? Because most of the obstacles you’ll face as you work on your resolution or goal are internal…not external.
I encountered this this morning. One of my personal goals for 2015 is to run four (4) half-marathons. The first one I’m targeting is March 15th, not that far away. So that means I need to run! But I run outside, and when I saw the air temperature was 16 degrees with the wind chill making it even colder, I was NOT too enthusiastic about today’s run and almost talked myself out of it.
But I reminded myself that while I can’t control the weather, I can choose how many layers to put on. Plus, I play this game with myself where, daily, I can ask, “If I do nothing else today, what would make me feel successful – like I accomplished something?” Whatever that is, I do. Today, that was running regardless of how cold it is.
So, a full week into 2015, if you need help with your resolutions or goals, consider this:
- It’s not enough to have a plan. You’ll be better served if your plan addresses not just the actions you need to take, but also the mindset you need to have to keep your resolutions or meet your goals.
- Think about your resolutions/goals through the prism of the habits or rituals you need to foster to set yourself up for success, as well as those you need to discontinue.
- Don’t just focus on the large, sweeping resolution/goal you have. Also visualize the smaller ones that need to happen along the way that ultimately make the big one possible. (For example, today’s 3.3 mile run helps me get ready for March’s 13.2 mile run.)
- Go beyond the surface reason for your resolution/goal. Invest the time to tap into the real motivation; here’s a good time to ask, “What else?“
- Write down (preferably on paper) the one thing you can do daily and weekly to set yourself up for success.
- Then, write down what you’ll do to re-group when you falter. (ALERT! We all falter from time to time. Having a lapse or relapse isn’t the issue – it’s what you do to get back into the groove that matters.)
- Know the tools and the people you’ll need to support you…and then diligently use them!
In truth, this time of year really isn’t that different than any other month or day. It’s just that it is a universal marker for us all to collectively start over or do something we’ve never done before – together.
So whether you prefer to make resolutions or make goals, I wish you the happiest, healthiest, and most successful year to date. I hope your challenges and disappointments are not too great. And, I hope your good experiences surpass your wildest dreams and expectations.
Happy, Happy New Year!
Each year, I share the above quote. And, each year it takes on a different meaning to and for me.
As 2014 draws to a close and I reflect on Rainer Maria Rilke’s quote, what keeps coming up for me is this:
Life is full of mystery and unexpected twists and turns. And blessings, well they frequently (and seemingly) come from and through the unlikeliest of channels.
This is how I experienced transformation this year.
And during this holiday season and on this Christmas Day, it is my hope that you’ll pause to take stock of what has transformed you, as well as what has been transformed by you.
It is also my hope that as one year comes to an end and another begins, you are surrounded by those you know and love deeply; you are resting and nurturing your body and your spirit; and that with an open heart and mind you are getting ready to embrace the mystery that awaits us all — filled with even more transformative experiences.
Wishing you and yours all the best as you continue to celebrate the holiday season and get ready to welcome 2015.
May the New Year be filled with just enough challenges to help you grow, blessings beyond measure, and more than a few surprises that bring a smile to your face and your heart!
Thank you so much for being part of my world, and for giving me the privilege to be part of yours!
Here’s an excerpt of an email I received yesterday.
I would like to wish you a very Happy Thanksgiving. I know this year’s Holiday Season will be very different than any other, but from what I know of you, I have a feeling that your focus will be on all the things you are thankful for, as you reminisce on times past, cherish wonderful and joyful memories, and eagerly anticipate exciting days ahead.”
To say that I was feeling verklempt after reading those words is an under-statement.
Tomorrow is definitely going to be a weirdly beautiful day for me. It’s Thanksgiving in the U.S. – bar none, my favorite holiday. Friday (11/28) also happens to be my birthday. So, for me this holiday always doubles as a birthday soiree, too.
Although I’ve hosted Thanksgiving for some 20+ years, this will be my first time frying a turkey for the occasion. It’ll also be my first holiday without my co-host – my beloved mother, Fontilla A. Timmons. (The photo to the right is from Thanksgiving 2013.)
No doubt, this holiday will be different than any other. But I’m so happy to continue a tradition of my mother’s and mine – one we started long ago. I am excited to welcome friends into my home and to make sure their bellies and souls are well-fed.
As I’ve been prepping for tomorrow’s dinner party, the holiday rituals of my mother’s and mine are clearer to me now than ever before. Likewise, my awareness of the power of presence (showing up is critical) and the healing power of connections and intimacy is heightened.
Rituals. Presence. Connections. Intimacy. These elements aren’t just present in my relationship with my mother or the one I have with the guests with whom I’m sharing my home and holiday. They exists in all relationships – including the one you and I have. And, I’m reminded that is been awhile since I’ve told you I appreciate you.
So before I go back into the kitchen, I just want to make sure you know…
It’s truly a privilege to be a part of your world and to have you be a part of mine. Thank you!
May you create some beautiful firsts this holiday. And as for those bitter-sweet firsts, I wish you strength and peace.
Wishing you and yours the Happiest Thanksgiving!
At least once or twice a day, I peruse finance.yahoo.com to quickly peruse the latest in financial news – especially to see what’s trending in personal finance. This particular post, “How this celebrity couple bounced back from bankruptcy,” caught my attention not because of the title (some celebrity or another is always declaring bankruptcy it seems), but because of the couple in question: The actor and comedian, Flex Alexander, and his wife, the R&B singer, Shanice.
Perhaps if I had cable, I would have known about their reality-tv series on the Oprah Winfrey Network. Their show, “Flex and Shanice,” debuted this month and chronicles their financial comeback. But I don’t have cable. So the Yahoo post was the first I heard about their story of going from earning approximately $1.3 million a year – for about five years – to losing their home to foreclosure.
The article and a video interview I found promoting their show revealed one of the things I talk about in my book, “Financial Intimacy” – the issue of proximity and perspective. It is a combination that can be so insidious when it comes to your relationship with money and how you manage it.
Often, you’re too close to see what’s coming your way and about to hit you like a ton of bricks.
Your financial reality is changing right before your eyes – in a not so good way. But by the time you notice what’s unfolding, you’ve lost the chance to get ahead of the situation to react proactively.
I really appreciated the thoughtful and measured way Flex and Shanice came to the conclusion to do a (financial) reality show. And, I love their goal of sharing the lessons learned from their journey of financial hardship to financial recovery as a way to help others.
Unlike some celebrities whom you feel just tell their “dirt” because they’ve bought into the idea that any publicity is better than none, I didn’t get that sense from Flex and Shanice. From the 11-minute video clip, I loved “seeing” how they had/have each other’s back — you can tell they were/are in this thing together.
I am known for saying money is an under-utilized communication tool. It’s also a very humbling tool, too.
As “Hollywood” couples go, they didn’t live over-the-top. But everything is relative, right? What Flex made in a month when his show was on the air, some people (barely) make in a year. He talked about money flowing and making $25,000 a week. However, they didn’t adjust their lifestyle when the rhythm of their financial inflow slowed. Shanice talked about being a child star and how others always took care of everything – first her mother/manager, and then Flex. So, she was slightly in the dark about how dire their financial situation was.
With just these two snippets they’re already teaching, by example, one of the behaviors money demands of us: pay attention!
As I continued watching their video, I couldn’t help but think of Shira Boss’ book, “Green With Envy.” A great book about the financial lives we lead and the stories we tell ourselves about ourselves. As well as the stories we tell ourselves about what’s going on in other people’s lives. (Hint: it’s not always what it looks like!)
This came to mind when Flex mentioned feeling embarrassed, ashamed, and guilty – reasons that also made him a little weary of going public in such a public way. Granted, you may not have had to declare bankruptcy, but have you made a financial blunder that makes you shrink just a little bit when you think about it? I know I have.
I’d be curious to know how intentional the producer’s were in deciding to debut the show right before the holiday season. If it wasn’t intentional, it was a brilliant accident! Because this is the time of year when a lot of muck comes up for people, in general, and about money, in particular. And if you’re feeling bad or disenchanted, this time of year certainly doesn’t help.
A show about making mistakes, forgiveness, partnership, teamwork, dedication (to each other and the goal of getting your financial house in order), humor, redemption, starting over, faith, reinvention and having a plan of action, certainly gets my vote.
Congratulations to Flex and Shanice for saying, in essence, to hell with money shame! I’m cheering for them, excited about what they’re teaching their audience via their bounce-back, grateful that what’s personal is also almost always universal…and am hoping I can catch episodes online!
In preparation for the upcoming Thanksgiving holiday, I purchased an indoor electric turkey fryer! (Quite excited!) I purchased it this weekend from Amazon and got a great deal because of their “Countdown to BlackFriday” sale.
Several times throughout the checkout process, I was “invited” to become an Amazon Prime Member. For a split second, I considered it. But after a quick mental audit of how often I order from Amazon, I couldn’t rationalize the $99 annual fee.
The fee made me think of what one client recently said to me:
“I want money to stop slipping through my hands…”
It’s a sentiment I hear often; it is what can so easily happen in our subscription-services economy; and it is precisely what spending $99 on Amazon Prime would have felt like for me.
And it was exactly how I was feeling as I mentally reviewed certain other on-going subscription based fees I incur – whether they are charged annually or monthly.
Perhaps the charge is nominal so you rationalize it by saying, “oh, it’s only $5.99 a month…”
Or maybe you say, “well, if I use the service once or twice, then the annual subscription has paid for itself…”
Or worse yet, maybe you don’t even realize you’re paying for a product/service each month. This happened to a friend of mine; she finished her doctoral thesis six years ago yet she recently realized she was still paying for subscriptions related to her research work that is now complete. To the tune of 320 Euro a year or $400 a year…for six years!!! You do the math.
Subscription services – the “new” new way to consume and buy
Subscription services aka the subscription economy isn’t new. Magazines have been doing it for decades. But today, this model is popping up in all sorts of industries. Including personal finance! Case in point: LearnVest, or a little closer to home…the Financial Intimacy Lounge – a not so subtle plug -:).
In fact, John Warrilow, author of the forthcoming book, “The Automatic Customer: Creating a Subscription Business in Any Industry,” said at Inc. Magazine’s GrowCo conference: “…[subscription businesses] provide the greatest value to both the [business] and the customer.”
[business] and the customer.”
When I think of value, I think of it as expressed in terms of uniqueness, convenience, variety, simplicity, flexibility, affordability and, well, a changing value system with regards to how consumers behave in almost every aspect of life.
I also think of value as expressed in terms of a continuing relationship.
And just like all on-going relationships, when you get lazy about ‘em and don’t pay attention to what is and what isn’t working, well, you know… Someone is really happy and the other one ends up quite unsatisfied.
Don’t be unsatisfied
As we near the end of the year (can you believe it?), now is actually a good time to ask yourself if you are stuck in a recurring payment trap with some of the subscription service/s you use. In other words, is what you are buying and consuming via your subscription giving you the value you want. Or, is it the cause of money slipping through your hands, too?
Maybe the monthly or annual amount isn’t “a lot” in the grand scheme of things. But the financial detox exercise I’m about to propose is less about dollars and cents in the absolute sense. Instead, it’s about being “conscious and intentional” about what you’re choosing to do with your money and whether those funds could be (re)directed to something else that has more value to and for you – whether you measure that based on pleasure or utility.
So here goes:
- Grab your banking and credit card statements for the last three months. If you receive statements electronically, please print them out. (You can always recycle the paper.)
- Review those statements and highlight your recurring expenses. Choose one color for monthly expenses and another for annual ones.
- On a separate sheet of paper (or in a spreadsheet), list the recurring expenses and rank them according to three categories: pleasure; utility; waste of money.
When I did this piece of the exercise, I chose to keep Netflix – even though I don’t use it often. It’s nominal and I like the “option” of having it. Yet, I chose not to renew my ZipCar membership. I’ve rented a lot of cars in the last two years – not one of them was a ZipCar!
- In this same spreadsheet, sum up each category…you just might be shocked at what you discover. In addition to evaluating the total financial outlay, look to see if your automatic withdrawals are spread throughout the month. This will help manage your cashflow and ensure you’re not lopsided leaning more toward the beginning or end the month.
- Make an assessment of each line item.
Anything you deem to be a waste of money, get rid of immediately. Or, downgrade your plan (if that’s an option). Before I sat down to pen this, I did that with a business expense. I’m not quite ready to get rid of the service completely, but I’m also not using all the features of the pro plan, and I’ve decided to stop spending money based on the “maybe, one-day I will thinking.”
- If possible and appropriate, migrate the monthly or annual withdrawals for your recurring expenses to one banking or credit card account for easy tracking.
The beauty of subscription services is that they are really all about YOU. It’s about access the way you want, how you want it, and when you want it. Fundamentally, it’s about choice – your choice. And, with choice comes control.
You are in control.
Don’t abdicate that control by paying recurring fees for products/services you no longer find pleasure in or that have outlived their utility. Because, sadly, some businesses are counting on you to trivialize a “small” dollar amount. Or, for you to be so busy living your life that you completely forget about what you committed to.
If you find money slipping through your hands, at least don’t let it be with regards to subscription services.
p.s. I’m so excited to be a guest speaker in Bari Tessler Linden’s The Art of Money Symposium on enTheos.com – joining some other cool peeps like Barbara Stanny, Mindy Crary and many others. Check us out here: https://www.entheos.com/The-Art-of-Money
Yes, it’s rather bold of me to presume you have an issue when it comes to retirement savings (and planning). But check out these stats:
- According to the Bureau of Labor Statistics, just 53% of American workers participate in any type of retirement plan at work.
- A recent TIAA-CREF survey found that 57% of workers did not increase their plan contribution after their last raise. (Millennials were the exception.)
- The Federal Reserve’s Report on Economic Well-Being of U.S. Households in 2013 reports that nearly half of all Americans haven’t planned for retirement and that 31% have no retirement savings or pension.
Given these numbers, I feel pretty confident in my ascertion. Especially when you also tack on the finding from the financial research firm, Hearts and Wallets, that Americans rate retirement planning as the most difficult of financial tasks to do.
You’re probably not getting as much as you could from your retirement account.
A Little History
Today, in general, and at this time of year, in particular, there’s so much talk about 401ks and retirement planning that it is easy to forget that this part of the financial services industry is young – as in approximately 30 years old.
For a variety of business and regulatory reasons, companies started migrating from defined-benefit plans to defined contribution plans in the 1970s. The former guaranteed you a certain income in retirement, but how your money was invested in the pension plan was wholly controlled by your employer. With the latter, you control everything – from how much of your current income you contribute to how you invest/allocate your contribution. That also means, the amount of income you’ll receive in retirement from your 401k rests entirely on your shoulders.
And more often that not, that responsibility comes with very little personalized guidance. Hence, the sobering stats above.
But I believe there are other reasons for these jaw-dropping percentages:
- Retirement planning doesn’t feel urgent
If you have 20, 30, 40 years until you plan to retire, it can seem like you have all the time in the world because 65 (or 70) seem so far away. So, you get that retirement savings and planning are necessary. But it just doesn’t feel urgent.
- Economic realities are not factored in…on a personal level
You very well may be one of the people whom hasn’t seen a raise in five years (or more!). Yet, your cost of living certainly hasn’t stayed stagnant. So, your challenge is being able to *see* how the heck you can save against the backdrop of flat wages and rising expenses.
- Forecasting the future is overwhelming
“How can I know how much income I’ll need when I retire?” “How can I know how long I’ll need that income to last?” “Will my retirement expenses really go down?” “What about healthcare costs?” The premise of retirement planning is based on a variety of uncontrollable unknowables. And if making decisions amidst so much ambuguity seems futile, the alternative of sticking your head in the sand actually seems more feasible
There’s An Alternative
Think about how you currently manage your retirement account?
What would be different if you considered it necessary and urgent?
If you’re in the 47%, what would be different if you started with just 1% of your income?
If you’re in the 43%, what would happen if you made the commitment to save your next raise by assigning some or all of it to your retirement account?
What would happen if you were shown a clear cut process for investing in your retirement account?
Can you now imagine retirement savings (and planning) being easier? Can you now imagine having more confidence about your decision-making?
I can…and it is what I want for you.
There’s still time to join us for the investment training series, “What the Hell Should I Do With My 401k?”
The next live class is Monday, 3 November at 8pm ET.
p.s. when you register, you’ll automatically get the replay link for the session held on Monday, 27 October.
p.p.s. this series is applicable if you have a 403b, IRA, Roth-IRA, SIMPLE-401k or SEP, too.
On the day that I write this, the stock market is up (as measured by the S&P500 and Dow Jones Industrial Average). The S&P is on track for a fifth straight session of gains. Yesterday, the Dow closed up, over 200 points and it is currently up another 35 points.
That wasn’t the case about two weeks ago.
All the major indices were down and many pundits were forecasting a pending market correction.
As a result, Kate* got spooked and did what I describe as the unthinkable. Fearful of losing money in her 401k, she sold ALL her mutual fund holdings and parked her proceeds in a money market fund (i.e., cash).
She made a classic 401k investing mistake, one I’ve seen many people make going as far back as the market crash of 1987 and more recently in 2008. The market goes down, some people panic, and the way they react is to sell. They have temporary amnesia and forget that going up and down is what the market does – it’s how it naturally behaves.
Jess took one of my courses and followed my 401k investing instructions almost to a “T.” She made sure she diversified her portfolio, she just went a wee-bit overboard. When she and I started working together 1:1 and I presented my analysis of her portfolio, she was surprised to discover that most of the twenty mutual funds she owned were investing in the exact same companies.
She made another classic mistake when it comes to 401k investing: confusing having many with being properly diversified.
Angela, now in her fifth year at her current employer, hadn’t been paying much attention to the 401ks she left at previous employers. A combination of disinterest and not really knowing what to do, coupled with the fact that her investments were performing pretty well, she just left them where they were – always with the intent of, “I’ll get to it eventually.”
Leaving 401ks with former employers is another classic 401k investing mistake that people make.
I’ll admit: of the three above noted mistakes, Kate’s is the one that most horrifies me.
Selling when the market is down is often considered a way of controlling loses. It’s an action that eases people’s fears the most. Yet, it’s also the one that tends to be the costliest, in the short and long term – especially in a 401k plan.
Because she sold when she did, she did the opposite of one of the primary rules of investing: buy low/sell high. And her initial action to sell and subsequent action of not immediately getting back in the market implies she’s trying to time the market; she’s waiting for an all-clear signal. Truth is, no one can time the market and if a financial professional tells you they can, run in the opposite direction as fast as you can!
All three of the 401k investing mistakes I’ve showcased are examples of you not winning when it comes to investing.
Having more mutual funds than you need results in you being over-exposed to the risk you were attempting to mitigate.
When you leave 401ks with old employers, you usually give up control because you typically can’t make any changes as to how that money is invested.
These three mistakes are reflections of emotions driving money decisions – whether those emotions are fear, over-confidence, or apathy. And when that happens being rational goes out the window and you unwittingly bet against yourself – even though, on the surface, it may look like what you’ve done is in your best interest.
Winning at investing isn’t about what happens during trading hours, it’s the culmination of choices made before, during, and after trading hours. It’s the result of a disciplined approach – one that is personal and rational.
On Monday, 27 October, I’m kicking off a four-part investment training tele-class series, What the Hell Should I Do With My 401k? The goal: to ensure you don’t bet against yourself and make irrational investing decisions that end up costing you big money.
The first session, “To Win at Investing, Don’t Let Your Emotions Get the Best of You,” is also being offered as a free, stand-alone tele-class.
It’s open enrollment season, which is the perfect time to take a look at your 401k retirement account.
If you don’t know how to select mutual funds or put together a portfolio of funds;
If you don’t know how much to contribute to your retirement account and the funds you select;
If you didn’t get around to enrolling; or
If you’ve been treating your retirement account like you’re a day-trader, I hope you’ll join us for this investment training series.
We start Monday, 27 October. Here’s the link, again, to learn more.
p.s. *all the names are pseudonyms.
p.p.s. if you have an IRA, SIMPLE-401k or SEP, this series is applicable for you, too.
I read somewhere that if you could achieve your financial goals by simply putting your money away in the bank you wouldn’t need a plan.
That’s silly to me. That’s like saying as long as you have gas in a car you don’t need directions to drive to a place you’ve never been to before.
Yet, this way of thinking represents a common mindset when it comes to managing money and preparing a financial plan. And, in my opinion, it is why so many people don’t get as much as they could from their money.
Today is the last day of Financial Planning Week – the 13th Annual one no less! Granted, this factoid may not make your heart stir and go pitter-patter. But, I thought today would be as good a time as any to share what I believe financial planning is really all about. I suspect if more people adopted this perspective, more people would get excited about preparing and editing a financial plan. Imagine that!
Besides b.o.r.i.n.g., what usually comes to mind when you hear or read the words “financial planning?”
In no particular order, I bet you think about some if not all of what’s listed below:
- Your lifestyle
- Your career and current & future earnings
- Children and their education
- Parents and their well-being
- Your own well-being
You may even wonder if and at what point the help of a financial professional makes sense.
I also bet for each of the above bullet-points (and others I may have overlooked), your focus has been on the numbers – the numbers you know and the numbers you forecast. It all comes back to the numbers because the presence or absence of money is what typically drives your decisions.
Financial Planning: The Movie?
But what if instead of looking at financial planning as an exercise in making the numbers work, you thought of financial planning as the telling of a story through a collection of vignettes? Vignettes that when woven together resemble a long-format television series, with many seasons, about your life – the one you have and the one you want.
Not only are you the star of the series, but you also play the role of producer, writer and director. And you become a quadruple threat for the small screen the likes of George Clooney for the big screen. Much more exciting, right?!
You may be rolling your eyes right about now. But hear me out…
There are a number of benefits to viewing financial planning through the lens of making a critically-acclaimed and successful series. To start, you begin to recognize that even if everyone follows the exact same steps (think of all the long- format shows on HBO), the results won’t be precisely the same.
Thus, the reason I say financial planning isn’t supposed to mean the same thing to everyone.
By thinking “story” over the numbers, you’re invited to connect the dots that represent the pieces of your life in a more profound way. The result: You have to bridge the gap between your vision for the future and your present-day reality and consider the tools, resources, and people that will help you close the gap between here and there. That includes:
- Using money as a tool, but not the only tool!
- Remembering that emotions are not black-n-white. And neither are numbers. True, the numbers may be negative or positive, but the “story” behind the numbers is rarely as black-n-white as you might think (or wish).
- Viewing financial planning as less about planning for retirement and more about planning out your entire lifestyle cycle (the on you have, the one you want, and the one that will help you bridge the gap).
- Embracing ambiguity and the practice of scenario planning via story-boarding.
- Using scenario planning to help you identify the likely obstacles you’ll encounter and manage the ones you’ll actually face.
- Learning to objectively observe your patterns, habits, and anomalies.
- Learning to objectively see the relationship you have with money, and how and where you need to work on it.
- Remembering you never do it alone.
There’s a term in the film industry called the “cutting room floor.” It pertains to what’s been omitted from the final footage. The way I connect this to financial planning is how the results you see reflects a lot of the intangible choices and decisions you’ve made but others can’t “see.”
If you’re like most people I know and clients (before they became clients), you’re really much more interested in being with family and friends; focusing on your career; and enjoying your leisure time and a lot less interested in managing your money and creating a financial plan. As a result, you either don’t have a plan or you have a one that was haphazardly put together and may not be current.
However, when you don’t have a plan (or a current one), you don’t know what you need to do consistently and you don’t know when and where you need to evolve in order to achieve your financial goals.
So, in honor of financial planning week, I ask: do you have a viable and or current financial plan? If not, what are you waiting for? And, how might thinking of it as a tool for making a critically-acclaimed and successful long-running series about your life help you get started?