Introduction
There are hundreds of how-to personal finance books on the shelves—books that promise to make you a better investor, help you pick winning stocks, make you rich, make you successful, help you retire at 40. You name it, there’s a book that will tell you “how to.” Nice, right?
The premise of those books is simple: The writer knows a secret that no one else knows, and for a mere pittance, the secret will be revealed to you without so much as having to burn one stick of incense.
Well, I hate to break it to you, but other than some nuts and bolts information that you might never have learned or have forgotten, there are no secrets! What does “feeling” rich have to do with actually “being” rich? In fact, our beliefs and feelings have everything to do with the results.
Mary, a single woman in her 60s, was raised by parents who grew up during the Depression; her parents were great savers, but never felt they had enough. Mary’s money experience told her that nothing was more important than savings. Spending was a painful proposition. When Mary came to see me, she had accumulated well in excess of $7 million. When I broached the idea of her putting her money to some enjoyable means, she rejected the idea—not because she didn’t want to, but because she was afraid she didn’t have enough. Mary didn’t feel rich, even though her resources far exceeded her needs.
Carol, 47, grew up with parents who lived a pretty extravagant lifestyle and showed her the finer things in life. Unfortunately, Carol and her husband were bigger spenders than earners, and soon found themselves drowning in debt. Carol believed she was rich and felt rich—and couldn’t reconcile the fact that their financial ship was sinking fast.
There are hundreds of examples of people holding onto beliefs that steered their actions to create disharmony and dysfunction in their lives. In too many cases there is a misalignment of beliefs and reality. Too many folks hold onto messages that do not serve their happiness, security, or life goals. In fact, millions of people are living in money misery, being hounded by debt collectors and wondering how they’re going to pull themselves out of what seems like an unsolvable problem. Many (not all) of these problems have their genesis in their beliefs and behaviors.
If you look around, you can probably spot many examples of people who are financially secure, and who don’t wear their wealth on their backs or live paycheck to paycheck. They place high value on family, education, experiences, and peace of mind, and they place little or no value on showing the world or their neighbors how financially secure they are. There are many who hold the real riches of the world in their hearts. The love they share with their partners, children, family, and friends is all the riches they need—somehow, a 70-inch curved panoramic 3-D flat-screen TV doesn’t move the needle for them.
One of the greatest challenges of our world is that we are swimming against a very powerful tide. When I grew up, television consisted of seven channels, and of course commercials were the fuel that drove that engine. We even had to get up to change the channels. (Imagine that!) Today we are bombarded by hundreds of channels and the Internet, which has insidiously figured out how to place ads everywhere. Movies, videos, reality TV, magazines, podcasts, blogs, not to mention e-mails, prompt you to buy the newest, most popular goods that draw a direct link between your mind’s image of how you see yourself or how you wish to be seen and your credit card.
Carl sat back in his chair, pulled out his flip phone, and placed it on the table before our meeting began. I looked at this relic of the ’90s a bit bewildered. He saw the look on my face. “It works and it’s all I need.” He was neither defensive nor apologetic—just completely comfortable with who he was and what he cared about. Carl, with his six grandchildren and close-knit family, considers himself rich. He feels rich because he has that which he values most.
As a society, we are force-fed the idea that our wants must be satisfied in order to be “in”—to be perceived as someone successful and relevant. Big data—those companies that collect information about you, how you shop, where you shop, what you buy, when you buy, what you’re likely to buy next, and to what stimulus you respond most—is geared up to prompt your spending decisions. It’s a war, carefully waged, to blur the lines between your wants and your needs.
I want you to feel rich, and I believe you can. It is realistic and attainable, as I have seen countless times, but it will not happen overnight or without effort. The process begins with coming to terms with the fact that something isn’t working the way you want. You might be living with dread of the monthly credit card bill or phone calls from collections companies. You might be looking into the faces of your young children and wondering how the heck you’re going to pay for college. You might be in your mid-50s and see retirement as an impossibility. Whatever your specific thoughts or dissatisfaction around your money life, you want something better.
Together, we will walk through the steps to creating a more satisfying and secure picture of your life. We will establish some baseline information, and you will, with my guidance, craft your reasons for making a change. This is not a miracle, seven-day weight-loss scheme or overnight, get-rich-quick scam; this is about your awareness, your values, and creating the small positive steps to making a real difference.
Let’s break down what it takes to improve your financial satisfaction:
1. Basic financial knowledge.
2. Understanding your money mindset.
3. Defining your values.
4. Developing strategies.
5. Putting energy behind the strategies to create action.
6. Making adjustments when necessary and appropriate.
This is not a “how to create your own financial plan” book. It is a “why am I doing this to myself and why I need to make changes” book. In other words, in order to create a path to financial satisfaction that will raise your level of confidence and comfort, there are some steps that you need to take. We are talking about the absence of inertia that must be replaced by action. After all, what’s the good of a road map, a journey, an action if you’re not going anywhere? Throughout this book, you will read a lot of action verbs and exhortations to move from inaction to big, bold, beautiful action.
I want you to actively identify the riches in your life and why they are important to you. Only through that understanding can you begin to see that “rich” is not the newest gadget, latest fashion, or other tangible thing that provides a momentary endorphin rush. The objective of this book is to help you look at money differently and help put you on the road to not only greater satisfaction but also a revised definition of “rich.”
The journey will begin with some basic information and data. You will gather and review your current financial information and will refer back to this information throughout the book.
Once you have established some of your money truths, you will explore topics such as money misery and money fantasy. There will be a discussion on your thinking about money and where it came from. We’re talking your money history and how it impacts your money mindset now.
Next will be an exploration of values and what I call your musts. You will embark on a visioning exercise to help focus your thoughts.
The purpose of reading any how-to book is to gain knowledge and understanding about a topic. The point of this work is to help you understand what’s not working and why, and perhaps replace it with a new set of beliefs that will support you in your quest to improve your financial life and your life in general. After all, an improved financial life has implications far beyond the balance in your retirement account.
Lastly, I will provide you with some resources to help you continue to push your happiness and success further. Financial success, like surgery, is not a do-it-yourself program. But you can certainly be so well prepared that your work with a financial professional will be much simpler and much less daunting.
What can you expect while reading this book? Good question; I’m glad you asked. I will ask you some tough, probing and thought-provoking questions, and I expect you will take the time to answer them thoroughly. Some might require time to think and marinate on the topic; others should be simple, top-of-mind answers. I will share stories to illustrate the ideas and hopefully they will resonate with you. I will present you with some exercises that will require you to ponder, consider, imagine, and memorialize your responses. These are designed to be interesting and enlightening.
What won’t you get from reading this book? I am not going to teach you why you need disability insurance and how much life insurance you need. I am not going to toss out catchy rules of thumb for you to latch onto. I am not going to review the IRS Code on Passive Activity losses, nor will I tell you your optimal asset allocation. The goal here is to understand your money life now, where it came from, and where you really need it to go and why. Technical knowledge is available, and I will help you find it, but the point here is to build your money fitness by dealing with your money mindset. After all, isn’t it your mindset that tells you to what you “need” to buy, what you deserve, and that an emergency fund isn’t as important as that upcoming vacation? Our money mindset is our mental regulator that either supports our goals or justifies maxing out the credit cards.
Keep in mind that I am not a psychologist, psychiatrist, or therapist. As a Certified Financial Planner ProfessionalTM and Financial Life Planner, I have been working with clients for more than 30 years. While everyone’s situation is technically different, it is safe to say that where problems, roadblocks, and troubles exist, one’s money mindset is very often at the root. My extensive experience in Financial Life Planning asking questions and listening deeply to clients has furnished me with a wealth of understanding and experience. My intent is to share my experience with you during our time together by offering you the opportunity to do some of the work similar to what my clients and I do one-on-one. The stories I share throughout the book are meant to be illustrative. Each conclusion or action is individual and therefore, you should not read them as “your” solution. It is unethical to offer specific financial advice to readers without knowing the specifics of their financial situation; therefore, I will avoid giving financial advice as much as possible. Instead, I want you to walk away from this experience with that a-ha! feeling of self-revelation and knowledge that will prepare you to tackle the nuts and bolts of your own financial needs.
I hope that, as you read and work through the exercises that with each succeeding page, your attachment to the ideas of feeling rich and being rich become real. As you take back ownership and control of your financial life from the button pushers, you will, hopefully, experience a new sense of success, satisfaction, and happiness. A note of caution: Make sure that before you begin each exercise, you have the time, space, and focus to devote fully to thinking through and considering each question. When you finish each worksheet, give yourself a round of applause for your efforts. Each strong effort is a building block toward your success.
So, do a few toe touches and get ready to explore you and some of your whys. It’s a great place to begin.