Don’t Balance Money And Life, Integrate Them

Originally in ForbesWe got the subtitle of my last book wrong. It reads, “Balancing Money and Life.” And while the book is still substantively solid and its aging content remains mostly relevant, the subtitle, I now believe, is a misnomer. It may actually contradict the book’s fundamental message.

Whether we’re talking about money and life, work and life—whatever and life—the temptation is to see the “whatever” as a force standing in opposition to life. An alternative to life.

And, unfortunately, this isn’t merely a rhetorical conundrum. As it often does, life follows language. Indeed, the phrase “work-life balance” has become so common that most of us now consider it an either-or proposition. We picture a scale, balancing work on one side and life on the other, as though it’s a zero-sum game. Work or life.

And so it has become with money. We can choose to expend life in pursuit of money or deplete our financial resources in pursuit of life.

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Perhaps there’s a third option—the integration of money and life. Consider these seven ways we might view life and money differently if our approach to them was less mutually exclusive:

1) We wouldn’t obsess as much over money. Although few of us would admit it, we too often believe that money can buy happiness. As a result, we tend to give up life’s simple (but profound) pleasures in pursuit of money—ironically justifying the sacrifice because we believe money can indeed buy life’s simple pleasures. Perhaps you’ve heard the story of the ebullient MBA graduate? She was bent on convincing the simple island fisherman to leverage his operation into an enterprise that could one day avail him the freedom to pursue life’s humble joys. But this was a freedom that his low-stress, flexible work schedule already made possible.

2) We also wouldn’t demonize people for loving their work. I believe the work-life balance fallacy is rooted in the mistaken belief that money (beyond life’s necessities) can buy happiness. If you believe the primary, if not the sole, purpose of work is to make the money required to buy said happiness, the act of work is minimized to a mere transaction. But what about people who really love their work and aren’t neglecting anyone by putting in 10 or 12 hours each day? What about people who are constantly consuming work-related reading material and talking about it incessantly? Integrating our view of money and life will free us to see inherent value and even take pleasure in our work. At the very least, we’ll see those who do in a less judgmental light.

3) We’d give more. Having money might not bring us happiness—but giving it away does.

4) We’d welcome healthy discussions about money. With more than a quarter of marriages ending over financial disagreements—and 100% of marriages having such disagreements—it’s safe to say that we don’t discuss money as openly and healthily as we could. But we can. We need to dump the long-held belief that money talk is taboo. It’s a mindset deeply rooted in the segregation of money and life. Here, I’m especially talking to us men. Because so much of our self-worth has historically come from our presumptive roles as tangible providers, we’re socialized to hide our money mistakes. This can have disastrous implications.

5) We wouldn’t feel guilty for spending money that we can afford to spend. I’ve had financial planning clients put off annual meetings because they were ashamed that they spent a lot of money on a car they could easily afford. They shouldn’t be.

6) We’d be better money managers. Who hasn’t considered budgeting, or for that matter meeting with someone to receive financial advice, a necessary evil? (Aside from engineers and financial planners, of course.) When that time is seen as little more than a life-taking exercise—as merely dutiful drudgery—of course we’d procrastinate, or avoid it entirely. What would happen, though, if we viewed money dealings as life-giving disciplines, as opportunities for growth and healthy conversation?

7) We’d focus less on what we do with money and more on why we do it. Our financial decisions—large and small—are symptomatic of our likes and dislikes, our passions and opinions, our strengths and our weaknesses. The only way to improve our dealings with money is to get past the dollars and cents and explore the beliefs about life and money that motivate our actions.

To establish money and life as opposing forces to be balanced inhibits our ability to optimally make, spend, save and manage money. In my next post, I’ll discuss a practical methodology for better integrating life and money.

I’m a speaker, author and director of personal finance for the BAM Alliance. If you enjoyed this post, let me know on Twitter or Google+, and click here to receive my weekly post via email.

street signsWith markets entering a period of significant volatility this past week, CNBC was curious what type of discussions I’m having with clients.  I told them, in short, that I’m talking about ways that we, as investors, can benefit from market losses.

Date: October 17, 2014
Appearance: Gaining Through Market Losses – CNBC
Outlet: Street Signs on CNBC
Format: Television

3 Ways To Gain From Market Losses

Originally in ForbesEven if you get your daily news from one of those celebrity tabloid shows, you have probably still heard that the market has been more than a little crazy in recent weeks.

Indeed, the typically overstated “surge” and “plunge” headlines have been less hyperbolic of late, as the Dow Jones Industrial Average burps out daily gains and losses in the hundreds of points. But over the past several trading days, the results have been all red, and since Sept. 18, the market has taken back more than 6% of what it’s given so far this year.

Is this volatility the precursor to another market gutting? Or perhaps it’s just a momentary ebb in advance of a continued upward flow?

The answer is yes.

The market is in the business of rising and falling, and of making fools of those who attempt to predict which it will do next. But be sure that we will feel both the pain of another big drop—perhaps sooner rather than later—and the euphoria of another unprecedented gain.

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Whether this very recent pullback happens to be the beginning or the end of something, most investors have already lost enough to benefit from it.

Benefit? Yes, you did read that correctly. Here are three ways to gain from market losses:

3 Reasons to Avoid ETFs: Advisor

Originally published CNBCExchange-traded funds—commonly referred to as ETFs—are all the rage. While there are several excellent reasons to use an ETF over the seemingly archaic traditional mutual fund, they are not a universally preferable solution.

First, to be fair, let’s review a few reasons why ETFs can be a better solution than mutual funds.

ETFs generally have lower associated costs than comparable mutual funds. This isn’t news, I know, but since costs are one of the few variables over which we have control as investors, I don’t mind flogging this deceased ungulate.

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The expense ratio is the most obvious cost reduction. For example, the legendarily inexpensive Vanguard 500 Index Fund has an expense ratio of 0.17 percent, while Vanguard’s S&P 500 ETF has a barely noticeable expense ratio of 0.05 percent. This makes ETFs an ideal choice for investors making a sizable, broadly-based, one-and-done purchase.

What Is Your Fool’s Gold?

Originally in ForbesMy son gave me a present. To be fair, I don’t think it was until after he realized the gift was monetarily worthless, but I appreciated it nonetheless. It’s a big hunk of the mineral pyrite, also known as fool’s gold. My son’s gift has value to me far beyond its function as an excellent paperweight. And, ironically, its worth to me is continually rising. It’s become a constant reminder to orient my life away from that which only appears valuable and towards that which truly is.

We all have our own versions of fool’s gold. It’s generally the stuff that, while largely worthless, receives an undue amount of our time, attention and investment. What’s yours?

Fools Gold

Here are three ways to spot it:

1)   Fool’s gold consumes time you’ve dedicated to other things. Not more than one paragraph into writing this post (on this topic, no less!) I found myself entering this Google search—“what is the best banjo ukulele”—and then navigating to this page, then this one.

KiplingerThere are so many great reporters out there, but only a handful who are truly experts in their subject matter–Kim Lankford at Kiplinger’s Personal Finance is one of those, and her area of expertise is insurance.  I recently talked to Kim about how a household could begin to determine how much life insurance they should have.

Read the article by clicking HERE.

Appearance: “How much life insurance to buy?” – Kiplinger’s Personal Finance
Outlet: Kiplinger's Personal Finance
Format: Magazine

The Real Danger In Overstating Returns (Like PIMCO)

Originally in ForbesAs if PIMCO needed any more bad press, The Wall Street Journal reported this week that the Securities and Exchange Commission is investigating whether the bond giant “artificially boosted the returns of a popular fund aimed at small investors.” While we should all be attentive to the results of this probe—because I’d bet my lunch money that its implications will be felt beyond just PIMCO—there is an even deeper issue to consider. And this issue has a more direct impact on our individual portfolios and money management choices. The real danger in overstating returns, and indeed the root of most financial missteps, is self-deception.

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“How’s your portfolio?”

Who among us wants to feel like a failure? We’ll generally avoid experiencing this sensation at all costs. So, absent conspicuous success, we permit ourselves to believe that we’ve at least not failed, frequently through self-deception.

Lessons In ‘The Happiness Of Pursuit’ From Chris Guillebeau

Originally in Forbes“People have always been captivated by quests,” writes author Chris Guillebeau in his brand new book, The Happiness of Pursuit. Chris, for one, is most certainly one of those people. His book celebrates the completion of a personal quest to visit all 193 countries in the world before his 35th birthday.

PursuitAre the rest of us captivated by quests as well? Absolutely. But is the whole concept of questing, journeying and generally living life as an adventure something anybody can pursue? Or are we merely relegated to living vicariously through Chis and his band of fellow travelers? After all, the rest of us have obligations, right? Nine-to-five drudgery is a responsibility. To some, it’s even an honor. We’ve got spouses, kids, mortgages, car payments and PTA meetings. We can’t be gallivanting all over creation in search of enlightenment.

Or can we?

Chris has some pretty strong feelings on that—so strong that the stated lesson of the first chapter in his book is: “Adventure is for everyone.”

Perhaps it depends on how we define a quest? Here are Chris’ criteria:

  • “A quest has a clear goals and a specific end point.”
  • “A quest presents a clear challenge.”
  • “A quest requires sacrifice of some kind.”
  • “A quest is often driven by a calling or sense of mission.”
  • “A quest requires a series of small steps and incremental progress toward the goal.”

By these measures, running a marathon would assuredly be considered a quest for most. How much more, then, is John Wallace’s feat of running 250 of them—in a single year?

Wallace is one of many questers featured in The Happiness of Pursuit, but most of the others’ exploits are far less headline worthy. Chris endeavors to bring the notion of questing closer to home by featuring a largely “ordinary” cast of characters, and in so doing, he succeeds.

Boomer Esiason’s Advice For Millennials: Plan For Tomorrow, Live For Today

Originally in ForbesBoomer Esiason is busy—I mean, really busy. “Starting next Tuesday, all the way until after the Super Bowl in 2015, I think I’ve got about four days off,” he told me.

Why, then, was he anxious to talk about financial planning and life insurance?

It’s because he has a message for today’s youth: “Protect your future and make sure that whenever adversity strikes, you are prepared for it.” Prepared, among other things, with the appropriate level of life insurance. 

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But how did one of the National Football League’s great quarterbacks and commentators become an advocate for life insurance and the spokesperson for Life Happens, a nonprofit dedicated to increasing awareness of the importance of planning with life insurance?