2016 is just a few weeks in and I’m already tapping my toe, and feeling a little anxious. No, it’s not the fact that the stock market is off to a rocky start, or that I didn’t win Powerball (I didn’t play). It’s the fact that this is all everyone is talking about.
Call it a professional hazard, but non-clients love to chat me up about their money. The last few weeks have been filled with both irrational panic and the false euphoria of an (unlikely) outcome. The manic depressive mood swings between “the world is ending” and “I’m going to buy the winning Powerball ticket” is giving me vertigo. Desperation reeks, and I want no part of it.
Every year, people make resolutions – some they stick with; more often than not the ship gets abandoned. In fairness, I still struggle with the things I’ve always struggled with, so I’m no better. But this year, I decided not to shoot for broad ridiculous changes, but to work with my strengths to improve my weaknesses. Then here comes 2016, heralded in with too much falseness: False hysteria and false hope. Blah. I feel hung over and I didn’t even have a drink!
Perhaps I want accountability, so I will share what I am working on, and how this could help you with your money so that you, too, won’t get caught up in a desperate, unending spiral.
- I want to be more organized and efficient. Organization causes peace of mind, with peace of mind I am nicer to be around, I am more creative, and I get more stuff done in less time. In short, I feel in control, proactive, productive and not frazzled or easily overloaded with irrational emotions. I have found a program and I have begun to complete the course modules methodically. No short cuts.
The Money Version goes something like this: Get a handle on all the accounts you have: Bank accounts, IRAs, Retirement Plans, College Plans.
- What do you own?
- Where are the assets?
- What fees are you paying?
- Who are you working with and whose interests do they represent (yours or their firm’s)? Ask a quick question: Are you a fee-only fiduciary? The answer should take less time to answer than it does to ask. By the way, you only want to hear, “Yes.”
- Are you setting aside enough for retirement or do you need to put away more?
- What is your investment plan and does it accurately reflect your time frame and risk tolerance?
As you can see – there is enough to keep you busy that you won’t even have time to worry about the day-to-day market moves (which are irrelevant to a long-term plan).
The answers to these questions should leave you more settled and in control, and able to focus on what you need to do now to keep the future you from going off the rails.
Any professional you are working with should have the answers to these questions at the ready. There is nothing random about this – it isn’t picking lottery numbers, after all.
2. I want to get in better shape.
Blessed with a good metabolism for most of my life, I’ve skated by. The gig is up and it’s time not to bemoan my 50-year-old self, but to take action. I can control that. My husband, Tony, is a crazy fitness buff and thinks I should join his grueling boot camp. But, what good is a plan if there is no way I will stick with it? I am willing to forgo fast results for lasting ones. I’ve been mixing it up doing a varied workouts: cardio, strength training, kettle bell, ballet, Pilates – whatever I feel moved to do, but I will do it every day or I will go for a long, fast walk.
The Money Version is similar. Budgets fail because they feel like torture or punishment. Investment plans don’t work, because they are not automated; they are cookie cutter models not meant to meet your needs; or the plan itself is too intense. Better to start somewhere and keep up with it than to never start a plan at all.
For the budget, take care of saving/investing first (not what you need to “cut out”). Work up to maximizing contributions to work-sponsored plans (especially if there is a match). Overall, gradually work towards putting away 15% of your pre-tax income. The best way: get it taken directly out of your paycheck and automatically invested, so you never have to “remember” to do it. With the hard work of saving done up front, you can spend the rest. But don’t be surprised if suddenly saving more begets more saving. Once you focus on doing something good and right, you may find that you would rather give up some meaningless kicks. It’s like exercising: If you take better care of yourself, you may be more likely to eat a little healthier, too.
3. I want to finally complete a novel.
I have many longer pieces of writing that are unfinished. I will not allow myself to start anything new until I finish one of these. I will be working with a writing coach to keep me going, when I start to doubt my stamina.
The Money Version involves getting a financial professional (i.e., a fee-only fiduciary) on your side — think of it as your own personal financial coach. When you work with someone who is looking out for your interests and who succeeds when you succeed, you don’t worry about their motivations. Instead, you welcome their wisdom and should be willing to pay for that advice, as reaching your goals is priceless, is it not?
While I’ve been busy revealing my soft underbelly I will say that tuning out the masses and the “misery loves company” of desperate thinking – has never been a problem for me. It kills my mood and my drive, so I choose not to engage. Most people would be wise to make a conscious choice not to be led down this well-traveled, miserable path.
In short, focus on strengthening yourself – and stretching – within realistic parameters, and getting help from people who want you to succeed (and not who succeed at your expense). When you start to realize you have the power to create a life you want – winning Powerball doesn’t seem so important. It just seems desperate.