Recently, I had the distinct privilege to join Sheinelle Jones on the Today show, discussing some rapid-fire personal finance issues in Simple Money style. Is now a good time to buy stocks? Is it a good time to buy, sell, refinance or renovate a home? We even discussed a version of the Simple Money Portfolio and my top two picks for cash flow apps that can improve your financial situation. Click HERE or on the image below to view the segment.
Since her early 20s, Danica Patrick has driven a racecar for a living, speeding 200 miles per hour around a crowded track bordered by concrete walls. It’s dangerous. Really dangerous. And she recognizes that.
“There are things that happen in the car that you can’t plan for and that are out of your control, like a tire blowing on you or an engine blowing up or a crash that happens in front of you or someone hits you,” Patrick told me in a recent interview. “So no matter what your skillset is, those things just happen. Absolutely it is a risk.”
But it’s a risk that she has chosen to manage, in part, with life insurance. Patrick has owned life insurance since she started racing, and the subject is important enough to her that she now advocates on behalf of Life Happens, a nonprofit founded to help consumers make smart insurance decisions.
Commendable though it sounds, I wanted to know more about why. Why was she motivated to buy life insurance at an age when most people don’t even think about it? Why did she feel she needed life insurance—then and now?
I don’t watch reality television contests, because as a rule, the best participants rarely participate and when they do, they almost never win. Whether the over-commercialized, profit-over-art system is to blame—or the television audience, or both—I’d rather not suffer the invariable disappointment of an unjust outcome. But quite randomly, a 12-year-old ukulele player named Grace VanderWaal, inspired me to break my own boycott.
On our way to another channel, my family stumbled on America’s Got Talent a few months ago just in time to see one of my favorite instruments—the ukulele—adorning the neck of a diminutive blond girl. “Wait a second,” I said.
She’s clearly overwhelmed just to be there. “It’s crazy,” she says, as her voice cracks in response to the judges’ welcome.
“What are you going to sing?” asks the legendarily gruff host, Simon Cowell.
“I’m singing an original.”
“Really?” Simon says, eyebrows raised.
“Yes.” Confidently, but not defiantly.
It’s just her and the miniature instrument on the stage. And then she parts from reality singing contest convention launching into a song that she—as a 12-year-old—wrote herself. It’s not a tune that the crowd can recognize and cheer for. Judges can’t easily identify with it to help sway them in her favor. She’s on her own.
“I don’t know my name…” she begins. “I don’t play by the rules of the game.”
Indeed. Her uke is a little out of tune (but it’s almost impossible to keep them in tune). Her voice is interesting—quirky, but good. Her pace is variable, perhaps intentionally. But in her vulnerability, her apparent imperfection, she endears her way toward her own version of perfection.
In the song’s climactic stanza, she rejoices with soaring authenticity, “I now know my name.”
By the end, I’m visibly crying, much to my 10 and 12-year-old sons’ utter shock. (“You’ll understand one day, once you have children,” I assure them.) And to my shock, everyone loves her, the judges anointing her with instant superstardom. She, in turn, is shocked, overwhelmed that she put every bit of herself out there for the world to see—and the world embraced her.
But even more surprising is that in every subsequent show, working toward the final round, she played another original. At no point does she curry favor through the influence of another. With almost no accompaniment, she just keeps playing and singing her own brilliant, old soul 12-year-old songs.
Then, in last night’s final round of performances (prior to tonight’s minting of the new millionaire Vegas headliner), every contestant got an extended vignette as a prelude to their performance. You know, the tear-jerking journey that each performer has endured on their way to the big stage.
Grace, the final performer of the night (no pressure, right?), has a vignette that doesn’t feature her, so much. It’s a collage of YouTube videos featuring other people playing her songs, songs that even her middle school classmates hadn’t heard 13 weeks ago that have now gone viral.
Without an ounce of pretension, but with conviction in who she is and what she does, she brought the house down.
“On paper,” her voice couldn’t compete with the virtuoso opera singer. Her production couldn’t compete with the contortionist. She didn’t have an ounce of the showmanship of the Sinatra protégé, and she was clearly the least experienced of the entire field.
But she was easily the most comfortable in her own skin. She seemed to need the praise least of all. “I’m just glad it’s over,” she said in response to the standing ovation. For the first (and likely last) time, I actually got on my phone to vote for a reality show contestant.
And despite all the commercialism, media manipulation and bias against true originality—God bless America—justice prevailed. She won.
But I’m not a music writer. My specialty is personal finance, of which career is a primary component, and the whole notion of vocation or “calling” is one with which I am fascinated. I believe that we each have a unique combination of personality characteristics, natural proclivities and honed skills that when employed in the service of others at the right time and in the right environment can bring uncommon fulfillment. (But be warned, it may not bring money, fame, or even a job.)
So what vocational lessons might we learn from this unlikely 12-year-old star?
1) There may be no stage in life in which it is harder to be authentic than middle school. If she can do it then, we can do it now.
2) Nothing conveys authenticity better than vulnerability. (But while life-giving, being vulnerable can be exhausting, and it’s never easy.)
3) Most of the work we do requires trust on the part of those we serve. Vulnerability—even the upfront acknowledgement of our faults and shortcomings—is the quickest path to trust.
4) We need not be free from constraints and the influence of others in order to exercise authenticity and our own brand of creativity. (This is something I learned from James K. A. Smith in his new book, You Are What You Love.) Many a tortured musician would spurn the mere thought of submitting him or herself to a venue as “establishment” as America’s Got Talent. But with innocence and whimsy, Grace was able to be fully herself—even while being constrained by a decidedly commercialist enterprise. You don’t have to be “out on your own” in order to be fully you. Constraints can ironically inspire creativity, and the best organizations welcome individuality in the midst of their communities.
5) We all have creative potential. Whether a plumber, priest or professional, we can all bring a certain artisanship to our work.
What does this mean for you? What is the next step in authenticity, vulnerability or creativity that you could take?
It’s that time of year again, where the heat of summer recedes, sweatshirts make a comeback and businesses lose billions in flagging productivity due to fantasy football. But it’s not just businesses losing out—fans and players come up short as well.
How, after all, can I truly dedicate myself to rooting fully for my beloved Baltimore Ravens if I took Le’Veon Bell—who, for those not acquainted with the best rivalry in football, plays running back for the Steelers—second in the fantasy draft? It can’t be done. It’s just wrong.
Partly. But there are more serious personal and financial implications to embracing fantasy (sports or otherwise). The danger in fantasy is its distance from reality. It’s “betting on a future that is not likely to happen,” according to Psychology Today.
Our fantasies tend to sensationalize what we’d prefer to imagine while ignoring what we’d prefer to not. Then, when our actual spouse, child, parent, friend or co-worker falls short of the impossibly high bar we’ve set for them, we—and often, they—are crushed.
“Emotional suffering is created in the moment we don’t accept what is,” says Eckhart Tolle, who, perhaps unintentionally, delivers a potent dose of truth that especially informs us in our personal dealings with money.
Here are a handful of financial fantasies, followed by their unvarnished truths:
Competition for your dollars creates an inertia that always seems to lead Wall Street down the path of unhelpfully increasing the risk in your portfolio. The recent Wall Street Journal headline, “Bond Funds Turn Up Risk,” illustrates an especially alarming trend. Specifically, of increasing the risk in the part of your portfolio that should be reducing overall risk—bonds.
Bonds are supposed to be boring. The primary role they serve in our portfolios is not necessarily to make money, but to dampen the volatility that is an inevitable byproduct of the real moneymakers—stocks.
Imagine that your entire life revolves around a single performance lasting less than 14 seconds. You’ve sacrificed your youth, close friendships and any semblance of a career in pursuit of validating your Herculean effort on the world’s largest stage. The hopes of your country on your shoulders. Tens of millions of gawkers eager to praise perfection — and condemn anything less.
You dork it.
That’s precisely what happened to Haitian hurdler Jeffrey Julmis in the Olympic 110-meter semifinal heat when he crashed into the very first hurdle, tumbling violently into the second.
Wow. I love the Olympics, the pinnacle of athletic competition. I even see past all the corporate corruption and commercial sensationalism, drinking in every vignette, simply in awe of all that the human body, mind and spirit can accomplish in peak performance. But thank God life isn’t like the Olympics (even for Olympians).
We aren’t subject to the imperial thumbs up or down based on a single momentary contest (or even a handful of them). But we’re certainly capable of treating life that way, often to our detriment. Don’t believe me? When was the last time you said (or thought):
“This is the most important thing I’ve ever done.”
“It’s all leading up to this.”
We’re trained to think this way because that narrative is more likely to keep you from switching the channel, more likely to motivate you to buy that car (or house or hair product), all of it promising to be that singular moment or lead you to it.
This script is especially common in the world of financial products. If you surveyed the marketing collateral for a host of investment products, you’d think the product being sold was a sailboat, new golf clubs, a winery or beach house — a life without care. But success in investing is actually achieved through the tedium of saving and the application of a simple, long-term investment plan — not the sexy new investment product or strategy that pledges to deliver your hopes and dreams.
Thankfully, this is also true in life (and athletics). “Success” is cultivated in the millions of unseen moments, the application of simple disciplines employed in pursuit of goals that don’t expire the minute we’re out of the spotlight. And even at the moment of our most abominable failures, the humbled Haitian hurdler provided us with the only example we need:
He got up and finished the race.
I ask because it dovetails nicely with a series of questions (inspired by Rick Kahler) that I use to begin most speaking engagements. These questions are designed to incite self-awareness, offering us clues about how our life experiences have shaped the (often unarticulated but powerful) beliefs that unavoidably influence the decisions we make with and for money.
Regardless of an audience’s homogeneity, their responses are consistently inconsistent. I have, however, seen some generational persistency on the topic of retirement. For example, on average, baby boomers have a generally positive view of retirement—no doubt shaped in part by the incessant financial services commercials that promise a utopian post-career existence with beaches, sailboats, golf and an unlimited supply of vintage Pinot Noir.
On the other hand, the finance and accounting students that I had the privilege of teaching at Towson University—almost all members of the Millennial generation—had a generally negative view of the notion of retirement. This is for two prominent reasons:
- They pictured hot, humid, early buffet dinners in rural Florida.
- They don’t think that the American dream of retirement is available to them.
You’ll find sufficient supporters for both the pessimistic and the optimistic view, with a far greater number of pleas to act on these views. But I invite you to consider the relative irrelevance of market highs for the following simple reason:
Any investment with a positive expected rate of return should regularly revisit and recreate its all-time high as a matter of course. Otherwise, it wouldn’t have a positive expected rate of return!
It’s the first time a U.S. city has received the top honor, but Charleston ranked No. 2 last year and has been ranked the No. 1 city in the U.S. and Canada for four years running. As scored by Travel + Leisure readers, Charleston received its top-ranked status based on six categories: sights/landmarks, culture/arts, restaurants/food, people/friendliness, shopping and value.
But please allow me to give you the top three reasons why my family moved to Charleston two years ago, and the reason we’ll stay (and invite you to join us).
“Hope deferred makes the heart sick, but a longing fulfilled is a tree of life.” So reads a Solomonic proverb penned in the 10th century B.C. Consider with me, however, a contemporary application of this ancient wisdom, especially in the realm of personal finance.
“We’ve got to apologize, Tim,” said a financial planning client with whom I had a great relationship.
“Whatever for?” I asked.
“You know that new Lexus? The one that backs itself into a parallel parking spot?”
“Yes, I’ve seen the commercials.”
“We bought one,” the client said, with his head bowed in apparent shame.
I’d never communicated that these folks—or anyone, for that matter, who has sufficient means—shouldn’t use said means to purchase a vehicle of their choosing. But the general impression the public has toward financial advisors and educators seems to be that we all think the best use of money is in storing it up and avoiding its deployment. Defer, defer, defer.
It’s not that money is inherently bad or evil, but it’s not inherently good or righteous either. Money is simply a neutral tool that can be used well or poorly. It only has the value—the personality and the relational standing—that we give it.
One of the few criticisms I have of the movement to explore the psychology of money is its use of the phrase “your relationship with money.” Unintentionally, this gives money entirely too much credit by implying personhood. Indeed, if you have a “relationship” with money, you’re likely elevating it unnecessarily, and maybe even subconsciously devaluing those in your life who actually have a heartbeat.
How did we get here, to the point where we’ve personified—and in some cases deified—the “almighty” dollar?