91 | Good At The Things You Can’t Measure

It's easy to think that if you can measure something, then it matters.

Money is especially adept at being this kind of false proxy.

But some things, many of the most important things, will always be impossible to measure.

Your rate of accumulation is easy to measure, but knowing how and when to use what you have accumulated for more than security and peace of mind has no metric.

Checking things off a to-do list versus balancing what technically needs to be done with the mental, emotional, and relational constraints in the moment.

Knowing how much debt you've been approved for versus sensing the level where debt becomes the CFO of your household.

Knowing how to say something is a Google Search or a conversation with a close friend away, but knowing when to say (or not say!) something isn't in any manual.

Finding the cheapest option versus finding the best-fit option.

Responding as quickly as possible versus trusting that quality, consistency, and thoughtfulness might build more rapport.

Hitting the next target for a bonus versus building a business and career that is designed for the future regardless of the incentive package.

Choosing where the conversation will go versus being nimble enough to engage in the conversation wherever it goes.

Knowing the rules versus knowing when the rules may not apply or when it's more appropriate to extend forgiveness.

Putting things on the board during a brainstorming session versus creating an environment where everyone feels secure enough to get things out of their head and onto the board.

It's hard to know what success looks like for the things you can't measure, but I think it's worth discovering over time.

90 | We Are Probably NOT a Good Fit if You…

The most important thing we can do is ensure that we will work well with one another.

If we're not a good fit, we will both eventually regret it.

This business is different from any other financial planning business you have ever encountered.

It is intentionally designed to achieve different outcomes, but it is not for everyone.

We have found that there are certain desires, characteristics, and feelings that many of our clients have that make them a good fit.

We have also found that there are certain desires, characteristics, and feelings that serve as red flags for starting a relationship.

We are probably NOT a good fit if you:

Desire…

• Stock tips and speculative shop talk or someone you can call your "investment guy"
• Detailed calculations predicting the future or a promise that you'll be able to retire in a certain month in 22 years
• Complex solutions and products that you don't understand
• Control more than curiosity
• To see invested dollars only go up in value without any seasons of down along the way
• To continue paying fees to your advisor out of your account because even if they're exorbitant at least they are out of sight and out of mind

Don't know...

• How it's possible to have success with money without being in tune with where the market has been, where it is, and where it's going next year
• How you could have a real conversation about finances outside of a conference room setting
• How behavior could possibly have a greater impact on our well being than the newest tips, tricks, and tactics
• If you can trust seven colored bars to tell your financial story more completely than any other tool you've ever used

Are hesitant to...

• To block out the noise of financial social media or your most financially vocal family member or friend or CNBC
• Entertain the idea that "more" might not be the only solution
• To share all of your finances with a single person or log into an account online and share your screen in order to gather the most useful information

Feel...

• Like it's possible to game the system
• Like you should be able to figure out money on your own because, if you can't, you're not doing your job
• Like paying someone to help you make financial decisions is an expense instead of an investment
• Like a political administration is the biggest threat to your future financial well being
• Like a "one time" plan or conversation is all you need to get the ship headed in the right direction
• Like it is a waste of time to talk about the non-numbers side of your relationship with money

Appreciate...

• Getting assigned homework to do on your own instead of putting heads together to knock out tasks as a team
• Being able to talk about money once per year (or never!) in hopes that it will fix itself with time
• The personal nature of phone tag and back and forth emails over the ease of of a scheduling software that allows you to pick your best time
• Making tactical moves with your investments at the top and bottom of market cycles

89 | We Are Probably a Good Fit if You…

The most important thing we can do is ensure that we will work well with one another.

If we're not a good fit, we will both eventually regret it.

This business is different from any other financial planning business you have ever encountered.

It is intentionally designed to achieve different outcomes, but it is not for everyone.

We have found that there are certain desires, characteristics, and feelings that many of our clients have that make them a good fit.

All of them may not resonate, but if a few do then maybe it's time for us to connect.

We are probably a good fit if you:

Desire…

• To think of money as a tool to drive purpose and meaning instead of a permanently scarce resource on an imaginary scoreboard
• To pursue work that is more than a paycheck that leaves you counting down to your retirement date
• To talk about more than just investments, insurance, and/or certainty-promising retirement projections
• To buck the 9a to 5p work culture, live in a new place, switch careers, start a new business, or navigate a life transition
• To stop paying 1+% on your managed assets and still wonder what to do with the rest of your finances (even the most altruistic advisors can feel like asset gatherers!)
• To fundamentally change your relationship with money (easiest with folks in their 30s and 40s or the most nimble-minded in their 50s and 60s)

Don't know...

• The first question to ask
• Where exactly you want to go (we'll help you figure it out...over time)
• Where the goalposts are (few people do)
• How to keep the goalposts from constantly moving (you are not alone)
• Anything about investing or "the market"
• Why the dollar amount of your assets impacts how much you have to pay for advice from most other financial advisors

Are tired of...

• Trying to categorize your spending or set budgets only to be discouraged when you run out of energy to keep it up
• Feeling like the questions in your head are not appropriate to ask out loud
• Financial jargon and fearmongers
• "Comprehensive" and "holistic" planning only speaking to your investments
• Long lists of complicated recommendations that you can't get done
• DIY'ing your finances because the endless research inevitably goes in circles (and that second guessing though!)
• That feeling of leaving a meeting with an advisor and feeling like you should understand what was discussed better than you do

Feel...

• Like your income keeps growing and you keep saving, but your feelings about the future aren't changing
• Like conversations about money, particularly with people you love the most, are hard to have
• Like you’re getting a lot of conflicting advice from a lot of different parties
• Overwhelmed by the options and decisions that you have to make about money
• Inspired to change the money stories and scripts that play on repeat in your head
• Coachable and open-minded

Appreciate...

• That investments aren't the secret to financial well being
• Numbers taking a back seat to real life
• Conversations and questions more than analysis and projections
• Rolling up sleeves instead of shooting the breeze
• That simple things can still be hard to do
• That neither you or I can predict the future
• That you'll have to want it for yourself more than I want it for you (keep reading the blog if you need to appreciate how much I want it for you!)

88 | The One Pager: Why and How?

Traditional financial planning uses incomplete information to try and predict an uncertain future.

That's a bad combination.

The one pager uses complete information to prepare for an uncertain future.

The initial build of the one pager will feel like a deeper dive into your finances than you have ever done.

The information is specific, precise, and intentionally selected to tell your "numbers story" in the most concise manner possible.

Many people find that the process of building is more helpful than any other work they have ever done around their finances.

Once the one pager is built, you will have a tool to inform every single financial conversation and decision going forward.

The subsequent refreshers of the one pager will feel easy, effortless, and simple.

But there's an important distinction - it won't feel simple because it is simplistic.

Simplistic is not helpful - it is often incomplete, ignores nuance, and lacks depth.

Complex isn't helpful either - it overwhelms, distracts, and disorients. Complex is the primary residence of most financial service providers.

What you will experience is what Carl Richards would call elegant simplicity.

Elegant simplicity sits on the far side of complexity, but it is not easily attained.

Elegant simplicity is complete, appreciates nuance, and drives depth. It calms, clarifies, and orients.

The one pager was designed to cut through the complexity, embrace elegant simplicity, and change the way you think about money forever.

Here is what we will need...

Things that are easiest to gather online by logging in together…

• Balances from the start and end of the most recent year for all of your bank accounts
• Balances from the start and end of the most recent year for all of your investments accounts
• Balances from the start and end of the most recent year for all of your debt (i.e. mortgage, car loans, students loans, etc.)

Things that you may have to gather before we look at them together...

• Paystub or summary of income for the entirety of the most recent year
• Tax return for the most recent year filed

Things that we will be able to discuss...

• Summary of any real estate that you own
• Summary of any businesses that you own
• Summary of any life insurance policies that you own

87 | The RwM Checklist

This checklist is designed to help us keep tabs on our relationship with money.

It is a useful tool to create a baseline understanding of our relationship with money and to refresh every few years to keep tabs on inevitable changes that will happen over our lifetime.

Relationship with Money

• I am able to filter out the noise and identify the most important decision or next step as it relates to my finances.
• I find it easy to trust the simplest explanation or strategy for getting something done.
• I am able to tell the story or describe the "whys" behind my financial decisions beyond the objective dollar amount spent or received.
• I am able to orient within a financial conversation or decision that has many variables and emotions.
• I am able to minimize second-guessing or regretting many of the financial decisions that I make.
• It feels natural to have conversations with other people about money.
• I am able to identify the financial goalposts that I am aiming for.
• I am able to see alternatives beyond "more" - more income, more spending, more saving, or more investment return - as ways to experience financial well being.

Sustainable Income

• My income is generated by leveraging my most natural gifts and skill sets.
• My income streams have a long or indefinite horizon.
• I am able to manage the risk of burnout that accompanies my means of generating income.
• I am able to spend time doing things that matter to me.
• I am able to spend time with people that matter to me.
• I find significant pleasure in the ways I generate income.

Content Spending

• I spend money on the people, experiences, and things that are most important to me.
• I spend money on the people, experiences, and things that bring lasting contentment.
• I am aware of how my spending has changed over the past few years.
• I am comfortable with how my own level of spending compares to my perception of the level of spending of family, friends, neighbors and colleagues.
• I am confident that I could adjust my spending in the face of uncertainty without undermining the things that matter most to me.
• I am able to be generous to the magnitude that I have always hoped or envisioned.
• I experience freedom and fulfillment as a result of my generosity.
• I am comfortable with the role that debt plays in my relationship with money.
• I do not feel like debt gets a “seat at the table” when I am making financial decisions.
• I can see how dollars I spend directly enhance the relationships of people that mean the most to me.

Accessible Saving

• When my income increases, it is easy for me to increase my rate of savings to match the increase in income.
• I am comfortable with how I decide to set aside dollars into short term and longer term buckets.
• My level of cash on hand feels like it allows me to manage the stress and increase the flexibility I feel in the month to month.
• My level of cash feels like it allows my other assets to remain untouched except for the times I intentionally access them.
• I see saving as a way to manage lifestyle creep and keep my expectations in check.
• I feel like I have a good grasp on how much financial wealth is enough for the life I desire to live.

Patient Investing

• I have a high level understanding of how my dollars are invested.
• I have a high level of conviction in the philosophy that I use to invest dollars.
• In the face of uncertainty or new information, I do not question the investment philosophy that I am using.
• I am comfortable knowing that in a world of 7 billion people, many people will experience better investment returns than I do.
• I am aware of the fact that my ability to remain invested during the most unsettling times is more important and more attainable than any technical investment tactic.
• I appreciate the fact that "owners" of businesses bear more risk, but can also reap more reward than non-owners or lenders to businesses.
• I appreciate the fact that "spreading your eggs across many baskets" might limit cumulative return potential, but also limits cumulative loss potential.
• I am comfortable with the reality that my investments might not ever experience positive returns, but often do in periods that exceed 5 or 10 years.
• Many people who know me well would call me a patient person.

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!

85 | The RwM Manifesto

When it comes to finances, regardless of level of financial wealth, almost everyone and everything has told us that "more" is the only option.

"More" will lead to abundance, security, energy, leisure, fulfillment, peace of mind, and freedom.

This is not true.

In fact, it couldn't be further from the truth.

We've been trained to...

Fixate on details instead of zooming out to see the story being written.

Increase complexity instead of trusting simplicity.

Search for tactics instead of clarifying our "why".

Seek perfection instead of embracing trade offs.

Perpetuate the taboo nature of money instead of promoting transparency.

Grasp for certainty instead of building resilience.

In a sneaky way, these default attitudes and behaviors have further solidified the idea that "more" is the only option and have ironically distracted us from the things that are most important to us.

In the process, we've replaced abundance with scarcity, security with anxiety, energy with exhaustion, leisure with busy, fulfillment with disappointment, peace of mind with restlessness, and freedom with fear.

We are here to break down this unacceptable status quo and improve our collective relationships with money so that we can move towards actually experiencing abundance, security, energy, leisure, fulfillment, peace of mind, and freedom.

84 | The Refinement of Trade Offs

This post is Part 3 of 3 of the "Embracing Trade Offs Instead of Seeking Perfection" series.

Because we've been led to believe that "more" is the only option, the idea of a trade off is perceived as a terrifying exercise in acknowledging failure.

If we can't do anything and everything then it feels like we've sold ourselves short.

We want perfection, not trade offs.

But attempting to eliminate trade offs is an endless exercise in futility and frustration - perpetual discontentment - because trade offs are a feature of life, not a flaw.

Trade offs allow us to bust the myth of perfection.

Trade offs allow black and white to become gray.

Trade offs give shape and substance amidst the ambiguity.

Trade offs force us to assign value to something and acknowledge less value for something else.

Borrowing from Godin, trade offs allow us to put ourselves on the hook.

Trade offs allow us to abandon the status quo when it is no longer the best option.

Trade offs allow us to discover things that matter more to us than we could have ever discovered without making the trade off.

Trade offs push us forward more than they hold us back.

Trade offs allow us to begin defining "contentment".

Trade offs allow us to begin clarifying "enough".

Trade offs refine us in a way that provides a peace of mind and freedom that no amount of resources can ever replicate.

83 | The Ambiguity of Money

This post is Part 2 of 3 of the "Embracing Trade Offs Instead of Seeking Perfection" series.

The line that gets us from individual decisions to eventual outcomes is twisty and usually pretty faint if it even exists at all.

It's difficult to attribute outcomes to specific factors because there are a lot of factors and because the factors are always shifting.

The shifting starts with constantly changing facts and circumstances which are further complicated by our emotions and relationships.

Once you layer on our incomplete memory of the facts and circumstances and our single-minded perception of the emotions and relationships, you can begin to imagine the challenge of re-telling the story.

Of course, we want to believe that our relationship with money is cause and effect in nature, but we're kidding ourselves when we're tricked into thinking it's that black and white.

Life experience alone sets the scene for a complex narrative and then...

Good decisions result in bad outcomes.

Bad decisions result in good outcomes.

Some decisions result in what appears to be no outcome.

Some outcomes trick us into believing that we made a perfect decision.

And we haven't even addressed luck and risk.

As Morgan Housel says, "Luck and risk are both the reality that every outcome in life is guided by forces other than individual effort. They are so similar that you can’t believe in one without equally respecting the other. They both happen because the world is too complex to allow 100% of your actions to dictate 100% of your outcomes. They are driven by the same thing: You are one person in a game with seven billion other people and infinite moving parts. The accidental impact of actions outside of your control can be more consequential than the ones you consciously take. But both are so hard to measure, and hard to accept, that they too often go overlooked."

This kind of ambiguity makes it easy for "more" to become the hammer and all our feelings about money to become the nails that need to be pounded.

But most ambiguously, ironically, and persistently of all, once we've reached a basic level of financial wealth and income, incremental additional dollars don't change our relationship with money or our feelings about the uncertain future.

"More" doesn't change our ability to manage burn out risk or make it more likely that we might find ourselves actually finding joy in the way we generate income.

"More" doesn't address the emptiness that accompanies spending once it fails to bring lasting contentment or begins to feel like dollars running through a turnstile.

"More" doesn't decrease our feelings of overwhelm or stress if we're confused about where surplus dollars need to go or wondering why extra dollars aren't changing the uneasy feeling in our gut.

"More" doesn't help our investing behavior, because "more" means that the inevitable dips in the future will feel bigger than they do today even when our wealth is substantially greater.

"More" doesn't change our relationship with money if we're not ensuring that the numbers and the story we tell ourselves about those numbers are becoming more aligned over time.

"More" is a sneaky way to avoid trade offs, but trade offs are less scary and more life giving than they seem...

82 | The Comfort of Black and White

This post is Part 1 of 3 of the "Embracing Trade Offs Instead of Seeking Perfection" series.

When things are black or white it's so comfortable - you can rest your mind, you can disregard nuance, and you can allow the absolutes to govern everything.

The decision will be right or wrong.

The options available are scary or safe.

The person is either rich or poor.

Debt is either good or bad.

The budget was met or missed.

Save this much and there's a 99.999% chance you do this thing at this precise moment in time.

In theory, absolutes feel so comfortable, nice, and tidy. Even predictable. They allow life and all its feelings and emotions to fit in a box.

The sneaky challenge with black and white is the implied assumption that there is a right answer. An ideal destination. Complete perfection without trade-offs - once we find the black or the white, whichever one we're looking for, then we'll be set.

The not so sneaky challenge with black and white is that it's not real life. It's not how the world works - there are no perfect decisions or outcomes.

You're going to buy something that goes on sale a week later.

You're going to finally pull the trigger on investing dollars only to see them decrease in value immediately after you get started.

You're going to purchase a home after properly inspecting it only to discover it has more problems than you ever imagined.

You're going to make a decision that feels exactly right and then all the facts and circumstances will change and you'll be tempted to believe you made the wrong decision.

You're going to hear a rule of thumb that feels like it should apply to you, but doesn't, and then feel uncertain about everything else.

Once the allure of black and white or the pursuit of perfect infiltrates our relationship with money, we're on a hamster wheel to nowhere with "more" money quickly becoming the only solution.

As we go about seeking perfection, the ambiguity of money only adds to the chaos...

81 | One of My Biggest Fears

"I miss when I thought chasing dreams was
Holy magic behind curtains in a sacred place
Before it was managers and lawyers
Who colored up and cashed them out
For vacation homes in coastal states"

From Heroes by Ben Rector

Yes, I had to look up the definition of "colored up" - in a game of poker exchanging many low-value chips (of one color) for fewer higher value chips (of a different color) while keeping the same overall value - but as soon as I did I had goosebumps.

I've never had the words, but this is the essence of an "anti-goal" that I have used throughout my entire career.

I've been afraid of managing and coloring up and cashing out - it's as if the very concept has been the opposite end of an invisible magnet repelling me away from some career paths and final destinations and pushing me in the general direction of others.

I've been scared of the way coloring up and cashing out would place the outcome ahead of the purpose.

I've been scared of the way it would slowly and quietly suck the life out of how I spend my days.

I've been scared of the way it would distance me from family, friends, and strangers alike.

I'm scared of the way it would sneakily place money and what it can buy above most things that are a lot harder to measure.

I'm scared of the way it would snuff out the flickering light of some of my most closely held dreams and wildest ideas.

It's not a condemnation of a manager or lawyer or any other role.

It's not even a condemnation of building financial wealth or second homes.

Borrowing from Richards, I see it as slowly allowing the game or institution or status quo to distract you from who you were created to be.

Borrowing from Buechner, I see it as slowly allowing your greatest joy to become untethered from the world's greatest need.

I've always thought that chasing dreams truly was "holy magic behind curtains in a sacred place". Something that was more magic than baby steps and reserved for the select few that knew the secret password to get behind the curtain.

As I've grown up, it seems that chasing dreams or becoming more like who we were created to be is more baby steps than magic and there's no curtain - the hardest part is not giving into the constant call to color up and cash out.

The thing is that coloring up doesn't change the value, only the appearance - maybe it isn't what it's cracked up to be after all.

80 | The Story and the Numbers

This post is Part 3 of 3 of the "Building Resilience Instead of Grasping for Certainty" series.

If certainty is impossible to deliver, then why does the financial services industry continue trying to deliver it?

Certainty (or probability of success!) will increase if…

You can make a certain level of income for the next 30 years.

You spend a fixed amount inflated by 3% for the next 30 years.

You max out your 401k and/or Roth IRA every year for the next 30 years.

You achieve investment returns of 7.5% for the next 30 years.

In theory, this work of projecting and mapping out the future is supposed to help you do “financial planning” and oftentimes this process is called a “financial plan”.

In reality, this process encourages grasping for certainty, focuses on things that are out of your control, and transforms a "financial plan" into the next item on the long list of financial services "products" that perpetuate society’s tendency to over-spend (i.e. consume) or over-save (i.e. hoard).

This process or "product", like all those before it, pushes us further away from how we were designed to interact with our money.

Real financial planning is knowing that we can only build resilience to navigate through an uncertain future adjusting course when new information is learned and improving our relationship with money each step of the way.

Resilience looks like…

Generating income from something that leverages your natural gifts and skill sets, allows you to manage risk of burnout, has a long (or indefinite!) time horizon, and allows you to spend time doing things with the people that matter to you. Income that is a pleasure to generate is ineffable.

Spending in a manner that brings lasting contentment with an awareness that every dollar spent creates some degree of expectation for the future. The ability to adjust spending in the face of uncertainty and acknowledge the sneakiness of envy are the only cheat codes for contentment. Generosity often increases contentment, debt often decreases contentment, and spending that enhances relationships with others is an investment, not an expense.

Saving, on average, in proportion to your level of income and into buckets that will be accessible in the near and distant future when you need the dollars the most. Cash on hand provides flexibility in the short run and endurance for the long run. Saving is the tool that allows expectations to remain in check and facilitates the continual pursuit of "enough".

Investing in a manner that you believe in and in which you have a baseline understanding knowing that, regardless of strategy or plan, the only guarantees are that someone will always outperform you and that how you behave during the inevitable unsettling times will be the biggest determining factor in your lifetime returns. Owning businesses tends to increase potential returns, diversification tends to make the ride smoother, long horizons tend to increase the probability of positive returns, and above-average patience is a superpower.

Grasping for certainty is inflexible, rigid, exact, unrealistic, disappointed by course correction, fragile, and ironically abstract because it tells a story with numbers that does not match up with the lived experience.

Building resilience is flexible, fluid, imprecise, realistic, expects course correction, pliable, and ironically concrete because it tells a story with numbers that matches the lived experience.

Additional Reading
The Magic Certainty Button by Carl Richards
Endless Uncertainty by Morgan Housel
God at Work in an Uncertain World by Rev. Daniel Mason

79 | The Remembering Self

This post is Part 2 of 3 of the "Building Resilience Instead of Grasping for Certainty" series.

We're all scared of change and uncertainty, but their respective barks are many magnitudes bigger than their bites.

Complete certainty seems to be something worth longing or grasping for, but it's because we've been misled - ever increasing certainty imperceptibly transforms into boredom, loneliness, and lifelessness over time.

Uncertainty is unnerving, but it is where our most profound life moments and stories are shaped and formed.

We go to movies, concerts, and sporting events because we're uncertain of the outcome.

We go on vacations because we've never seen a place before and want to discover it.

We get coffee or lunch with people we've never met because we are curious to find out who they are.

Our greatest life experiences are often a result of living through the most uncertain of circumstances.

The uncertainty creates the tension required for the magic to happen.

The irony is that in areas of life that we could make certain, we actively seek out uncertainty and in our money life where uncertainty is the only option we desperately seek a certainty that can't exist.

With our money, we've created a system, language, philosophy, and frame of mind that has allowed the fear of change and uncertainty to control us unlike it does in any other aspect of our life.

Part of this compounding is because we've replaced a clear big picture with infinite, disorienting details.

Part is because we've replaced elegant simplicity with unnecessary, ever-increasing complexity.

Part is because we've replaced clarifying our purpose with the empty search for tactics and hacks.

Part is because we've replaced trade offs that refine us with the endless pursuit of perfection.

Part is because we've made what was always intended to be transparent completely taboo.

Part is that we've forgotten that our "remembering self" cleans up the story that our "experiencing self" so deeply fears.

As Brian Portnoy says, “The fact is that the good ol' days were rarely all that good. Even so, the stories we build in retrospect are usually very clean, with well-specified events (start and end dates), connected through a clear causal chain (this led to that) and an overall ‘this narrative makes sense’ vibe. Welcome to what leading behavioral economist [and Nobel Prize winner] Daniel Kahneman calls your ‘remembering self.’”

Change and uncertainty are more inevitable than we care to believe, but fortunately our "remembering self" knows and accommodates these realities in a way that serves as the final green light to slowly stop grasping for certainty and begin building resilience...

78 | We’re Going to Change and It's Hard to Know How

This post is Part 1 of 3 of the "Building Resilience Instead of Grasping for Certainty" series.

You take a break from work, which provides enough time to reflect on where you're headed, and the seeds of a career change are planted.

You have a child and how you allocate your time is refined in way that it has never been before.

You have a health scare and everything that seemed to matter a month-prior pales in comparison to what matters now for your well being and your outlook on life.

Your company gets acquired and the monthly expectations, income levels, and career trajectories of the former company are quickly at risk of becoming the “good old days”.

You meet a friend who leads a life that is very different from yours, but very much like one you desire to lead, and your curiosity is piqued in a way that spurs previously unimaginable action.

Some change is sudden, and some happens more organically over time.

Things that were once irrelevant become mission-critical, and things that were once mission-critical are now irrelevant.

But there is always change and it's always difficult to predict it when, where, and how it will happen.

Not only is it hard to predict, but it's hard to even acknowledge.

In describing the End-of-History illusion, Harvard psychologist Daniel Gilbert says, "All of us are walking around with an illusion - an illusion that history, our personal history, has just come to an end, that we have just recently become the people that we were always meant to be and will be for the rest of our lives."

Implied in the illusion is that our preferences will remain the same indefinitely, which begins to make "more" an enticing way to solve for things.

“If my preferences are going to remain the same, then I need to have enough to support all of them forever and maybe some extra cushion to accommodate a couple of extra preferences - just in case.”

Then the case for ever-increasing income and assets is calcified.

But what if it could be different?

What if instead of being imprisoned to a past self and his or her flawed projection of the future we accepted that change was a feature of the experience?

What if we trusted that our spending ebbs and flows - both up and down - with each season of life and that we don’t need to accommodate every past and current self's preferences and versions of the future?

What if we trusted the fact that our level of income often naturally governs our level of spending and instead of fearing a reduction in income allowed it to lead us into the inevitable change?

It doesn't have to be a never-ending battle to acquire more and we don't need a money tree to experience the good life.

For as hard as it is to get a good grasp on our future self, our "remembering self" throws us a bone that makes the prospect of change a little less scary than it may seem…

77 | The Elegance of the One Pager

As with most pieces of art, there is more than what meets the eye.

The one pager is designed to change the way we all think about money and the way we interact with money.

It's timeless.
It's grounded in reality.
It doesn't lie.
It filters out the noise.
It compartmentalizes.
It's comparable.
It meets us where we are.

Just because we've made finances hard for hundreds of years doesn't mean they have to be hard forever.

James Clear says, "The highest level of mastery is simplicity. Most information is irrelevant and most effort is wasted, but only the expert knows what to ignore."

That is target and the one pager hits it on the bullseye.

It's timeless.

With a shout out to Luca Pacioli, the father of modern-day accounting, the one pager is built with his unbridled genius in mind.

It harnesses the power of basic accounting in a manner that is accessible to the accounting nerd, the creative artist, and everyone in between.

It paints a complete picture of one's entire financial picture without an overlooked gap or an unnecessary addition.

Not only can it travel over time, but it holds up across time and leans heavily on the truth that financial well-being depends on a few simple, but difficult to master concepts.

It's grounded in reality.

There are no projections or predictions about the future.

There are no assumptions or placeholders.

There are no calculations because detailed calculations aren't necessary.

No, that's not a typo. And yes, I know it probably contradicts every other financial conversation you've ever had. That's the goal.

The one pager is a concise, efficient summary of what has happened so that we can establish a shared understanding of reality and then spend the rest of our time looking and moving forward.

Because what we have experienced is so much more compelling than what we have been told, it would be a waste to do it any other way.

Additional Reading
Reality as reassurance by Seth Godin

It doesn't lie.

With a shout out to Rasheed Wallace, the one pager doesn't lie.

If something needs tweaking in your finances, we'll all be able to see it.

There will be no lectures or lessons.

Only simultaneous realizations of what needs to happen next.

Your habit of saving (or not saving) will be in plain sight.

Your level of cash on hand will be as apparent as ever.

Either way, those two things alone tell us almost everything we need to know regarding our technical skills for managing money.

Sometimes the truth feels right and sometimes it hurts, but the truth always sets you free - eventually.

Additional Reading
Productive assets and useful flows by Seth Godin

It filters out the noise.

At first, the one pager will probably feel a little disorienting.

It will feel too simple.

You might even wonder if it ignores the layers of depth that exist in managing finances.

This is only a symptom of how we've been trained to hunt for complexity.

The beauty of the design is that it sheds a bright light on 95% of what moves the needle with our finances and allows the remaining 5% to fade into the background or, better yet, never even hit the radar.

If you get the majority of the 95% correct, then you will like the outcome.

If you get the majority of the 5% correct, you'll keep the hamster wheel spinning.

When you filter out the noise it's OK if it takes some time to get used to the quiet.

It compartmentalizes.

Oftentimes, it's easy for a surprise in one area of our finances to impact all the other areas.

If we're not careful, we'll even make some impulse decisions that don’t change the circumstances in any way.

If we feel like we're "behind", we start contributing to investment accounts at a unsustainable level, which in turn drains cash on hand and increases the stress felt in the day-to-day.

If we feel like income is going to be a little tight, we toy with the idea of making a lump sum payment to a mortgage only to realize that it will only reduce our accessible resources even more.

If our investments decrease in value, we begin pinching pennies in every spending category only to realize that we're allowing money to make our decisions for us instead of making decisions about our money.

The one pager allows us to attribute financial progress and setbacks to the correct things so we don't try to fix things that aren't broken or allow the things that are broken to hijack the mic.

It's comparable.

I double-dog-dare you to sit down with someone else and have an open, honest conversation comparing and contrasting your one pagers.

Most finance conversations get lost in rabbit holes and stuck on insignificant details leaving everyone more disoriented than they were at the start.

Conversations centered around the one pager cut to the heart of our biggest financial decisions and feelings right away.

The chaos of the numbers is replaced by the essence of the story.

From Buffett to Bezos to you and to me, everyone's finances fit in the one pager and the underlying emotions and themes are eerily more similar than they are different.

It meets us where we are.

Whether we love finances or hate them, our brains weren't designed to handle that much information at one time.

Almost 70 years ago, the psychologist George A. Miller asserted that the span of immediate memory and absolute judgment were both limited to around 7 pieces of information.

The financial services industry treats this law like Americans treat speed limit signs - nearly total disregard.

As soon as you've said S&P 500, diversification, ETF, tax efficient, emerging markets, asset allocation, and bull market, you've used up a normal person's allotment of digestible information and haven't actually addressed anything that will improve their relationship with money.

Was the one-pager designed with complete intellectual awareness of Miller's Law? Sadly, no.

But it was designed with the knowledge that when it comes to finances, you can't make it simple enough.

And let's be honest, even if we didn't connect the two from the start, it's pretty cool (and validating!) that the one pager has 7 colored bars.

Additional Reading
The complex middle between “simplicity” and “elegant simplicity” by Carl Richards

76 | She Said, He Said

In a conversation with a couple, I started with a simple question to kick things off, "What's your favorite way to spend money?"

The wife shared that going on a date or out to dinner with friends was her favorite way to spend money. The experience of getting ready, anticipating the evening, and connecting with people was second to none in this season of life.

The husband shared that he had grown accustomed to saving extra by eating on the cheap with friends in a way that had led to endless stories and deep relationships with minimal financial investment required. He acknowledged that excess spending to acquire the "experience" even seemed a bit irresponsible.

One totally legitimate perspective that will likely find saving and investing to be empty, meaningless, and detached without some spending on Priority #1.

Another totally legitimate perspective that will likely feel like they are wasting dollars and maybe even "falling behind when saving for the future" if they splurge on date nights.

I couldn't have cut to the heart of our relationship with money better had I written the script.

I think it's easy to think this question should take a backseat to more "sophisticated" topics like investments, odds of retiring on time, or the best credit card rewards.

This is a mistake.

No hack, planning tactic, or investment idea can compensate for these differences in perspective.

It's too easy to think more money is the solution, but more money doesn't change either of these perspectives - at best it allows them to be brushed under the rug still co-existing in an awkward, unspoken kind of way.

More times than not, it's not the amount of money that matters, but our relationship to it.

75 | A Deadly Combination

A common experience with our money is that our cash on hand (blue), real estate (yellow), and investments (gray) at some point can get to a level that feels like "a lot".

Of course, "a lot" is about as subjective as anything can be in finances.

Compared to $200, some people feel like $2,000 counts as "a lot". For others, $20,000 feels like "a lot" and for others it might take $200,000 or $2,000,000 to hit "a lot".

Your bank account grows to a size that surpasses the largest expense you've ever had and it feels like "a lot".

A home appreciates over a decade or two and it feels like "a lot".

Investment return in a single year is comparable to a few months worth of paychecks and it feels like "a lot".

No matter your definition, it's easy for "a lot" to feel like a good finish line and an opportunity to treat yourself, but this is where it starts to get tricky.

Without the context of our expectations, "a lot" isn’t always what it seems, and modest growth can disguise and even fuel unsustainable expectations.

Our expectations are no better represented than by our spending (red) and they have a way of growing without us even realizing it.

There is always something else that we could get or do.

Once we have something, it's never quite as satisfying as we expected it to be.

Things tend to get more expensive over time.

And the reality is that expectation’s natural state of being tends to be one of growth rather than decay.

The challenge here is that our expectations continue to grow, while our ability to support those growing expectations levels out at "a lot" - a deadly combination.

Truth be told, “a lot” is only a feeling unless it’s tethered to expectations.

74 | Cash Gets a Bad Rap

If there was a contest for biggest buzz-kill in finances - talking about "cash on hand" might take the cake.

Usually, it gets paid a measly interest rate.

Usually, it just sits there and "doesn’t do anything".

Sometimes there is a temptation to spend it all or invest it all - neither of which is a very good idea.

To top it off, cash in the bank is often called an "emergency fund". Talk about negative self talk!

It's tough because the measurable things aren't that impressive.

All the cool parts about cash are the things you can't measure - the ways it allows you to organize your life without thinking about the dollars needed.

Cash allows you to say "yes" to the opportunity of a lifetime or the year or the month without "crunching the numbers".

Cash allows you to change jobs or careers.

Cash allows you to take time off between jobs.

Cash allows you to ignore the due date on your paycheck because you're not waiting for those dollars.

Cash allows you to ignore the due date on your credit card bill because it's on auto-pay and you know the funds will be there.

Cash allows you to leave investments alone when they're down 20% in a 12-month period.

Most people I know want opportunities, options, and flexibility, which is exactly what cash offers, but we just don't think of it that way.

Google says three to six months of expenses is an appropriate amount of cash to have on hand, but if collectively we all feel limited or constrained by our money, doesn’t that make you think the standard rules of thumb might need a little work?

If you want more opportunities, options, and flexibility, try holding a little extra cash and see what happens.

Additional Reading

How I Think About Cash by Morgan Housel

How Your Bank Balance Buys Happiness: The Importance of “Cash on Hand” to Life Satisfaction by Peter M. Ruberton, Joe Gladstone, and Sonja Lyubomirsky

73 | Bad Words

A "bull market" is when stock prices rise by 20% after two declines of 20% each.

It's only identified after the fact.

Let me repeat - it's only identified after the fact.

On June 8, 2023, the Wall Street Journal informed us of the following, "S&P 500 Enters New Bull Market".

The market is up 20% since October 2022 and in June 2023 the Wall Street Journal says we're "entering a bull market".

What a joke.

If you've been waiting for the "start-of-the-bull-market" headline you've already missed out on a 20% rebound.

What's brutal is that the headlines of the past six months have been all doom and gloom - inflation, interest rates, debt ceiling, layoffs, etc. and yet a "bull market" has happened right in front of our eyes. The same way it always happens.

My guess is that a lot of people feel more comfortable investing after reading a headline like that, but they've missed out on a good chunk of the return that's already been made.

A beautiful example of financial terminology only adding to the confusion of personal finance.

This is bad enough, but here is where it's going to get tricky.

A "recession" is a period of temporary economic decline during which GDP falls in two consecutive quarters.

It's only identified after the fact.

There's a decent chance that the past 6 months will be declared a "recession" once the bean counters get around to closing the books.

It's not a signal of bad news. It's just confirmation that all the doom and gloom that you just lived and felt is in fact what the numbers say too.

It's a little like playing a basketball game without a scoreboard. If the other team full court pressed you into turnovers, got all the offensive rebounds, and made half of their 3s, the scoreboard isn't really necessary and can only confirm what you have already felt and experienced.

The existence of the scoreboard doesn't change what happened on the court and it certainly doesn't tell us anything about the outcome of the next game.

Just like the scoreboard, declaring a "recession" doesn't change the experience of the past 6 months and it doesn't tell us anything about the next 6 months either.

Be careful of finance words - they're rarely as helpful or informative as they seem.

72 | In Defense of Values-Based Investing: Right and Smart

This is not a sales pitch for Eventide Investments, but their investment process and commentaries illustrate the mysterious third factor better than anyone else I have ever read or seen.

Shaun Morgan says, "The true measure of success for a business lies in its ability to generate a profit by creating value. But profits generated by extracting value often have a limited lifespan. Profits generated by creating value, on the other hand, have the propensity to rejuvenate and sustain themselves."

An ability to identify and own companies that have been, are, and will continue creating the truest form of value for the world will lead to out-performance over long periods of time.

Eventide goes further by describing how a company that creates value interacts with each of its stakeholders in their Business 360 process...

When a business delights its customers, they become loyal patrons and go on to promote it to their friends and family, but when it disregards its customers, they walk away and tell others to steer clear.

When a business supports its employees, they give their best to their work, but when it neglects its employees, they in turn neglect their work or quit.

When a business cultivates a sustainable, humane supply chain, suppliers deliver quality goods and services, but when it mismanages its supply chain, suppliers and their workers suffer and deliver lower quality goods and services.

When a business respects and invests in local communities, they see the business as a blessing and go on to support it, but when it ignores local communities, they see the business as a curse and may actively oppose it.

When a business preserves and cares for the environment, it nourishes and sustains productive yield as the business grows, but when it damages the environment, the company may run out of resources or even face litigation or environmental disaster.

When a business satisfies an important need for society, people delight in its products and services, growing the market, but when it harms society with its products and services, society suffers and condemns the business.

Anyone can appreciate that delighting, supporting, cultivating, respecting, preserving, and satisfying is going to lead to better outcomes for all stakeholders in the long run.

This kind of investing not only begins to define the mysterious third factor, but also is the best way to achieve greater returns and lower volatility over the long haul - making it both a worthy and a profitable pursuit, because "doing what is right is also doing what is smart".

Additional Reading

A paradox of status and power by Seth Godin

The Fourth Source of Alpha by Shaun Morgan

Introduction to the Business 360® Framework by Eventide Asset Management