Do you have a generally positive or negative impression of the word “retirement”?
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.
This week we’ve heard a lot about the U.S. stock market achieving new highs. So what? Should this record transcendence inspire confidence or fear, action or inaction?
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!
According to Travel + Leisure magazine, “Charleston is a remarkably dynamic place, so it’s no surprise that it has achieved its highest ranking ever in our survey as [2016’s] best city in the world.”
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.
Money, after all, doesn’t disappoint you, or express disappointment with you.
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?
You likely feel as though you don’t have enough time to watch a video that is 17 minutes and 47 seconds, right? But what if watching it allows you to penetrate beneath the scar tissue of busyness and distraction and transform your view of work and the satisfaction you derive from it? Would it be worth it, then?
If you’re willing to watch the video, please feel free to stop reading here, because I’m convinced that, though seemingly out of context, you’ll get the point by the end of the video—the point that there’s a vastly different, far more rewarding way to do what we call “work” than what most of us have been taught and have experienced. It’s the work of an artisan.
But first, a bit on the evolution and etymology of work: What’s the difference between a job and a profession? I ask this question more than you’d think, and the summary response I receive is, “A job is something you have to do while a profession is something you want to do. A job is a necessity—it puts food on the table—while a profession is something that you train for and build over time.”
Fair enough. What, then, is a vocation?
You’ve surely heard the sad news that music legend Prince has died, and you likely caught the fact that he did so without leaving a will. This high-profile case of apparent negligence has rekindled the collective finger wagging over having the correct estate planning documents. But the question remains—WHY?
I had the opportunity to answer this question recently on the Today show, but I wanted to further explore the topic in the hope of providing some additional, actionable clarity:
Statistics suggest that a majority of Americans don’t have a will. And, after reading hundreds of these documents, I’ve found that even most people who do have a will have one with sub-optimal language they don’t understand.
Why don’t we do a great job planning for our death?
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.
The movement of markets is so incredibly complicated that even the world’s most skilled portfolio managers struggle mightily to “beat the market” over the long-term. Building a strong portfolio, therefore, must be similarly (and singularly) complex, right? Wrong. While portfolio architecture and management is not easy, here is a seven-step process that makes it surprisingly simple:
Step 1: Know thyself.
This ancient Greek wisdom is where we must begin, because personal finance is more personal than it is finance. Investing is complex because we are complex. Therefore, we must understand ourselves before we try to understand the markets. This means honestly gauging your time horizon and the returns necessary to meet your goals, but it’s especially important that you understand your willingness to take risk in the markets. You must take the gut-check test.
Step 2: Understand investing.
“A lot of career advice begins right back at age six,” writes author Chris Guillebeau in his newest book, Born for This: How to Find the Work You Were Meant to Do. But in case you’re expecting some fluffy self-help propaganda that over-inflates your ego in an attempt to win your purchase of the book, Guillebeau hits you with a helpful dose of reality early and often:
“‘You can do anything you want,’ adults usually promise, without any explanation or assurance of how ‘anything’ is possible. Nice as it might sound to our young ears, this advice is absurd,” says Guillebeau.
Please don’t get the wrong impression. Guillebeau isn’t a bully or a browbeater. I actually find him surprisingly soft-spoken for someone who has built an enormous online following, written four bestselling books and created one of the hottest-ticket annual conferences in the World Domination Summit. He just refuses to buy into the implicit (and often explicit) promise of the many “success cult” leaders who sell books, courses and videos offering you a slice of their success if you’ll only follow their footsteps (across a pile of burning coals).
And why doesn’t following successful people necessarily make you successful? For at least two reasons:
1) You’re not them.
2) They’re not you.
How, then, does Guillebeau fill 300 pages with advice on finding your dream job, if not by telling you how he did it and imploring you to do the same?