86 | "Houston, We Have a Problem"
We keep pretending like the same old tricks are going to start giving us a different outcome.
We're in 2023 with more insight, more wealth, more perceived freedom and flexibility than ever before and our relationships with money don't really reflect it.
Finances continue to be the number-one cause of stress for 73% of Americans outpacing other popular stressors of politics, work, and family. Gen Z'ers and Millennials take the cake with more than 80% being stressed about money. Even if we wanted to ignore it, we can’t because the ripple effect that stress around money has on everything else is always palpable.
We're as discouraged with how we generate income as we've ever been with only 32% of the workforce considering themselves actively engaged in their organization. This leaves 68% of us going through the motions or actively fighting against the system for the majority of our waking hours. It's hard to find purpose, fulfillment, and financial well being when we're barely tolerating our primary sources of income.
Collectively, we're as unaware as ever with how much money is going out the door with 65% of Americans claiming they don't know how much they spent in the last month. It wouldn't be that big a deal except for the fact that knowing how much you spend is the only way you can determine how much is enough. We tend to get stuck categorizing, budgeting, and debating the good and bad spending when adding up the total would be sufficient for most people to start changing habits.
We're as hesitant and unable to save as ever with 57% of Americans uncomfortable with their level of cash in the bank and 36% with credit card debt that exceeds that level of cash in the bank. We continue to set money aside like it's a mandatory chore instead of a stepping stone to freedom and flexibility. We're all to blame for this one, because we called our cash in the bank an emergency fund from Day #1 setting the course for decades of playing to "not lose" instead of playing to win. If only we had given it a more hopeful name like an opportunity fund instead!?!
Our investment returns are as predictable and underwhelming as ever with the average investor returning 3.6% to barely beat out inflation and cash over the 20 years ending in 2021. This one is hard to believe but it's the case every year when the statistics are refreshed. We're plagued by overconfidence, overwhelm, overreactions, over-tinkering, and overthinking in ways that are crushing our ability to generate average investment returns.
Ignoring our money hasn't moved the needle.
Annual cost of living increases or bonuses haven’t changed our level of engagement or satisfaction.
Budgeting apps haven’t changed our contentment.
Extra accounts and retirement projections haven’t made it easier to save.
Endless investment products haven’t improved our investment experience.
The same old tricks are giving us the same old outcomes.
Houston, we need to change our approach or we’re going to explode!