177 | It's a Relationship, not a Recipe

It's tempting to think money is a matter of accumulation.

Or an exercise in bundling the right tactics.

Or a series of individual races with arbitrary finish lines that are never crossed or never quite feel like the finish line once you reach them.

It starts to feel like a recipe that we can't get right, when in fact it’s a relationship.

Said that way, it becomes more apparent that accumulation, tactics, and finish lines aren't going to do much to change it.

A relationship is too emotional, and the future of a relationship is too uncertain.

And where you stand at any moment only makes sense if we appreciate where we've been and where we’re going.

Once it’s clear there’s a relationship, it’s clear the best actions are those that strengthen the relationship for this season of life…and the next one…and the next one.

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Extra Perspectives

It Doesn't Go Away with Money by Jared Korver
"Wealth is rarely what it seems, and we who are wealthy would do well to be wary of what it’s doing when we aren’t paying attention. If we don’t take care, I think it can start to make us feel invincible, rather than present. Powerful, rather than resilient. Lauded, rather than loved. Smart, rather than wise. Philanthropic, rather than charitable. Seen, rather than known. Anxious, rather than content."

176 | Ratcheting Up Regret

A big home project can make you want to fix everything at once.

"It'll cost more if we come out twice," says the contractor.

"You don’t want to deal with the hassle again," says the neighbor.

"Interest rates might move in next few years," says the lender.

Why stage a master plan when you can do it all at once?

But that ignores the reality of regret.

There's always a chance that you don't know exactly what you want. Or that what you want might change. Or that what you get done just doesn't meet expectations.

And then regret becomes an unwanted squatter in our financial lives.

Every additional dollar spent tends to ratchet up the risk of regret.

Just like every bathroom done today, instead of tomorrow, cranks it up too.

Staging it isn't the same as dragging your feet or kicking the can down the road. It’s certainly not the easy way out either.

But it helps limit the risk of regret even if that cost isn't as easy to measure as the dollars spent.

175 | Leading or Lagging?

A couple of indicators can speak to the quality of our spending – both are hallmarks of the best spenders.

Freedom is a leading indicator – something that can only be assessed before the dollars are spent.

Do I feel freedom to spend even though the future is uncertain?

The tricky part with freedom is figuring out how to feel it when there is no objective way to measure it.

Contentment is a lagging indicator – something that can only be assessed after the dollars are spent.

Given a second chance, would I spend the dollars the same way?

The tricky part with contentment is that your future self will always know more than the prior self that went out on the limb.

We can't forget they are two different questions and they can't have the same answer.

174 | Green Means Proceed

Carl Richards has a saying and sketch that says Profit = Permission.

Profit is the evidence that what you're doing is good and can continue to be freely pursued.

On the other hand, lack of profit is direct feedback that something must change.

Of course, there is insight for our own personal financial lives too.

Spending decisions (real and hypothetical!) come with a financial conscience that pesters us with the question...

Is this responsible?

And oftentimes, we imagine that better budgeting, more accurate projections, or more money will silence the little voice in our head.

But time and time again, we get discouraged by a missed "budget", we get lost in projections, and more leaves us feeling like we have less.

The only practical way that I know to answer the question is to see if the spending will allow you to keep saving.

If green will be gone, pause before you go on.

If you'll still have green, feel freedom to proceed.

173 | Long Term Planning

It’s tempting to get carried away projecting and solving for the “long term”.

But this becomes a slippery slope of living in a hypothetical world instead of a real world.

The long term is only a bunch of short terms bundled together.

If those short terms are lived with…

Peace of mind.

Lack of regret.

Purpose.

Contentment.

Order.

Then the long term is going to be filled with those same feelings too.

Instead of speculating on the long term, we’re building good short terms so the long term takes care of itself.

172 | One Step Forward, Two Steps Back

Usually, financial independence is referring to "independence from current sources of income".

If your income goes up (one step forward), but your level of spending increases to meet the raise, then you are becoming more dependent on that income stream (two steps back).

If you're OK being dependent on your current income stream, then spend away!

If you're looking for financial independence, then please save some!

171 | Patient Investing

Investing with some clue about what you're doing and a genuine belief that it will work.

Knowing there are only two guarantees:

1. Someone will always have better returns than you.

2. The way you behave, especially when it's uncomfortable, will determine your lifetime returns.

Being an owner offers the most potential reward.

Spreading your eggs across many baskets makes the uncomfortable times less painful.

The longer you're invested, the better chance that it works as expected.

And a little more patience than the next person is the only shortcut.

And…

Investments will almost always be a distraction in your relationship with money.

170 | The Trouble with Timelines

Baked into a 10-, 20- or 30-year timeline is the assumption that reaching the end will somehow change things.

Once the time passes, you'll be able to adjust your level of effort or move on to the next thing.

But that's not how our relationship with money works.

There will always be trade-offs to spending money.

And your investments will never move based on your personal plans.

The skills you develop within this time horizon are the same ones you'll need for the next horizon, and the next one, and the one after that too.

It gets easier because you're getting better, not because the time is passing.

169 | Discussing “Enough”

If we're not legitimately interested in discussing enough, then we're not going to be a good fit.

That's not meant to be judgy or snarky.

Only an honest admission that I don't like doing less than my best work and my best work is revealed when we're trying to identify enough together.

That doesn't mean we'll know a number on Day 1 (because there is a never a precise number!).

But it does mean that every meeting, conversation, and interaction will be designed to further refine our understanding of enough.

I guarantee the way we do things won't feel like what the financial services industry has trained you to expect, because enough doesn't tend to reveal itself in investment updates, insurance analysis, estate planning, or even tax planning.

If you're up for starting the journey, then let’s do it together.

It you're hesitant, then remember to come back later when you're still looking for enough.

168 | A Percent of What?

The entire industry is built on rate of return.

Your portfolio returned 21% last year.

This investment has returned 10% per year for the past 5 years.

We project that you can earn 8% per year over the next 20 years.

But percentages aren't that helpful.

When we're dealing with small numbers, the percent return is useless.

A 20% return on $10,000 means that you have $12,000 and that isn't going to change any lives.

When we're dealing with big numbers, the percent return is equally misleading.

A 20% return on $1,000,000 could be a couple of extra years of spending or a college education or a down payment on a home - significant increases in financial freedom that would still exist at 15% or 17% or 22% or 26%.

All the percent sign does is beg us to compare ourselves to others, which isn't very helpful at any number size.

Or forget what we were aiming for when we decided to invest.

167 | The Amazon Box Effect

My hypothesis is that Amazon boxes on the doorstep create more tension in a relationship than bad investment performance.

One person orders something, then the other person sees it on the doorstep, and then the benefit of the doubt is rescinded.

ANOTHER box?

How much did it cost?

P1: What did we get?
P2: I'm not sure what's in THAT one.
P1: You mean you've bought so much you've forgotten what you ordered?

But most Amazon purchases fall in the last one or two $10,000s.

They feel like an easy litmus test for assessing spending, but it's a little bit like using gas prices to evaluate the state of the economy or the president's approval rating.

Just because it's in your face, doesn't mean it's a useful indicator or has to have the last word.

*Thanks to GH for the inspiration on this post!

166 | So Little Control

We can do everything right when it comes to investing - control costs, manage taxes, properly diversify, get the right blend of stocks and bonds, have a long horizon, and behave as well as the best investor.

But the actual timing of returns is still so far out of our control that it's scary.

Most everyone would be comfortable, probably even recommend, using the past 30 years of returns to project the next 10 years of returns.

Anything more elaborate than that quickly becomes a waste of time and energy.

But on our journey to life changing returns, the timing of those returns can change the trajectory of our life.

In 1988, if you had $250k invested and used the return for the previous 30 years to predict your balance by 1998, you'd expect to have $428k, but would have ended up with $1.1m. Check the math here.

Saving for an addition to your home? How about an addition and a second home and a career change and a college education or two?

In 1999, you'd have expected $629k by 2009, but would have ended with a meager $190k.

In 2011, you'd have expected $543k by 2021, but would have ended with a whopping $947k.

And remember, this is the experience when you're investing the right way.

It seems like we have two choices.

We can try to saddle up for the bull ride of investing and tether our financial well-being to every jolting buck.

Or we can acknowledge that while powerful, our investment returns tend to be a distraction from where our life - generating income and spending and saving it - is actually lived.

165 | $@&% Happens...or Does It?

When we reduce a financial misfortune to "Things happen" or the fruitier *$@&% happens", there's still a lingering feeling that you could have dodged it.

Look no further than the last time you saw someone else's misfortune and thought that you could have avoided it with better judgment or more will power.

But when we chalk it up to "The cost of doing life", there's a deeper acknowledgement that something was eventually going to happen regardless of the precautions taken.

Of course, the specific misfortune is going to be different for everyone, but misfortunes are guaranteed.

The most careful still have fender benders.

The most diligent still crack their phone screens.

The most organized overlook an expired passport.

Because when you’re busy living, it's inevitable that a bill is going to come due - an invisible bar tab that must be paid every so often so you can keep having fun.

It's just the cost of doing life.

164 | How We Talk About Money

Most financial conversations, even those with good intentions, are dead before they start.

They land in two predictable places...

Random numbers that mean nothing without more context - Nvidia doubled for me last year, I make $200,000, that car cost us $35,000, etc.

Or abstract nuggets of "wisdom" that mean one thing to the speaker and something totally different to the listener - buy low and sell high, pursue your passion, I remember those days when we had to tighten the belt, etc.

There's a better way, but it's not going to be as easy as this status quo.

We're going to start by pulling together a visual summary of your financial life over the past year - if we can get two or three years then we'll really have a story to share.

But we won't share it yet - there's still no context.

We'll set the stage by chatting through a handful of prompts...

What feels most uncomfortable to share?

What feels most comfortable to share?

Tell us how you got here.* What are the storylines of your financial life to date? Boosts received? Hurdles overcome? Big decisions faced? Big risks taken? Best spending (worst spending is intentionally omitted)?

Tell us where you long to go.* What do you hope your money is used to do? What are you preparing for with your money? What are you uncertain about with your money? Why are you building your financial wealth?

When have you felt the wealthiest? When have you felt the least wealthy?

Once everyone has shared these reflections, then - and only then - we'll reveal the numbers...

And the way you relate to money will begin to be changed forever.

*In the case of a relationship, it would be ideal for the less-tuned-into-the-finances person to share first.

- - - -

“Echo all of the above! I couldn’t fall asleep for a long time because I was reflecting on so much. Hearing your story - and the way in which you presented it - brought up a lot of thoughts/beliefs/emotions that I didn’t know I even had about our own financial journey. Thank you for your vulnerability and leadership and for this incredible safe space” Bekah Cooke

“Same here! Thank y’all so much and we talked about it from getting into the car until going to bed.” -SC Bolton

“Thanks again for sharing last night, Shores! It was powerful to hear your financial story. It has already sparked good conversation in the Satterwhite household! Grateful to be on this journey together.” - David Satterwhite

“Agreed! Thanks for everyone’s intent listening, thoughtful questions, and for most of all just holding us in love! Things have continued to stir within me from your questions and from just the act of sharing and I’m glad it’s led to thoughts and conversations for you all too- eager to continue journeying together!!” -Jessica Shore

163 | Scattered and Separate

Our financial life's natural bend is towards being scattered and separate.

The physical scattering of accounts that come from innocent things like sign up bonuses, saving for a vacation, getting married, or changing jobs - good deeds that are slowly punished.

Which compound into mental scattering when you're trying to keep tabs on progress or make a decision of any magnitude.

Because it's hard to keep score, it's hard to know how to win the game.

First, we've got to name the feeling.

Then we've got to keep it from becoming the status quo.

Because once it's the status quo, you don't recognize it as scattered and separate anymore.

162 | What Counts as Failure?

It doesn't matter what the projection says if it feels like we’re failing.

And for some people failing is...

Seeing a bank account balance go down.

Paying instead of getting a refund at tax time.

Having an unexpected expense at the last minute.

Seeing investments below their all-time high.

Being stuck in a career.

Arguing over the best use of discretionary income.

Paying $9.99 for shipping.

161 | When to Run the Other Way

When someone shows you projected levels of spending and investment returns for the next decade or two or three, that's your signal to run the other way.

They're making the future sound more predictable than it will ever be.

Or they've not spent enough time reflecting on the past to appreciate how our financial lives actually work.

160 | Why It’s Hard

From the Wall Street Journal on May 19, 2024 at 8:00am...

The Downside of Delayed Gratification

And then a couple hours later at 10:00am...

“What Was I Thinking?” The Big-Ticket Items People Regret

The same publication posting both articles before the eggs in the buffet line can get cold feels less like an ignorant editor than it feels like an unintentionally poignant acknowledgement that it's hard to spend well.

From the first article, “the mere act of saying ‘not now, maybe later’ triggered an instinct to keep putting [something] off and waiting for a better moment” which leads to a “specialness spiral” where you never actually pull the trigger on spending money for special things.

The only way this one could have struck a louder chord with me was if the author had been kind enough to open it with “Dear Richard:”.

And just as I'm really getting stoked about saying “yes” once and for all to special things, the second article knocks the wind out of the sails in two lines, “While it may be true that money can't buy happiness, that doesn't stop people from trying. And then wishing they hadn't.”

On one end, we have regret because we’ve waited too long to spend on special things.

And on the other end, we have regret because we spent and then realized the things weren't as special as we expected.

Woof...

No matter who you are, spending well is hard to do.

159 | Two Questions about Life Insurance

Should you have life insurance?

If someone else's well-being depends on income that you generate, then probably yes.

If someone else would become responsible for debt that you owe, then probably a double yes.

If neither of these statements is true, then probably no.

Would I ever sell life insurance?

Absolutely not.

I don't want to be tied to the process of approving someone for life insurance nor do I want to be compensated for selling it.

Sometimes there are disappointing outcomes that occur in the approval process. If a line is going to be drawn in the sand, I plan to be on the same side as my client.

And you don't pay someone to place you into the correct life insurance product. Someone gets paid based on the life insurance product you select. It doesn't take a genius to realize that a life insurance product requiring less effort and/or more compensation is appealing for someone with a sales quota.

158 | It Doesn’t Bother Me

I'd rather us knock it out together.

And "it" could be a lot of things - but usually it's the things that have a knack for staying on the to-do list indefinitely.

Of course, it might mean I'm watching you reset a password or type in your name. It might mean we're sitting on hold together. It might mean we're both trying to figure out how something we've never done before actually works.

Even if a moment or two feels awkward, I still want to do it together.

Because there is always going to be a grenade planted somewhere in the process - teeny parts of the financial world that derail our most honest efforts or plant seeds of confusion and doubt that make us wonder what else we don't know.

Inevitably, if we do it together, it will go faster, there will be fewer errors and second-guessing, our relationship will deepen, and it will feel like we've made real progress.

So no, it doesn't bother me to do it together.