The 3 Keys to Surviving Major Life Transitions

Originally in ForbesYou might think that the most important work a financial advisor can do is related to allocating a client’s investment portfolio, or perhaps helping secure a timely insurance policy or drafting the optimal estate plan. In fact, their most important work is done when clients are in the midst of navigating life’s major transitions.

Help

I have very recently undergone two of these major life events — a job change and a move — in the span of five months. Crazy, right? Who would willingly subject themself to two of life’s most stressful changes within such a small window of time? Fortunately, I had at my disposal three keys to surviving major life transitions, and I’d like to share them with you:

Key #1: Flexibility

“Blessed are the hearts that can bend; they shall never be broken.” — Albert Camus

In February, I left the company I loved after seven years of life-changing work to lock arms with a national alliance of financial advisory pioneers dedicated to the practice of “building relationships by doing the right thing.” But in order to build a new and rewarding relationship with them, I had no choice but to sever some relationships with others.

I had to tell colleagues at my former company — good friends — that I was leaving, knowing that our work was the primary basis for our friendship. I also had to forgo working with some clients whose financial plans I’d helped craft, and in whom I’d invested personally.

I had to impose myself on new colleagues as I fumbled through onboarding. I had to learn new systems, protocols and personalities. I had to wonder if, at the conclusion of a probationary stretch of forgone forgiveness, my new colleagues would still want me on their team!

So much change in so little time.

You’ve heard that death and taxes are life’s only guarantees. But I’m still holding out for an Elijah-style exit, and half of Europe pays taxes little mind. No, it is only change that is a guarantee in this life, and flexibility is its only effective counteragent.

We can and should envision and plan for major life transitions, but we should also expect our path to be diverted by unknown variables. We must be willing to flex our plans in these dynamic times of change.

Key #2: Margin

“Everything takes longer than it does.” — Ecuadorian proverb

In the  first week of June, my family moved from our beloved Baltimore — leaving behind our close-knit families, community support systems and favorite sports teams — in an experiment to see what life would look like from a different vantage point. We chose Charleston, South Carolina, as the backdrop for our adventure, pinpointed for its promise of a slower pace, higher quality of life and lower cost of living.

Major life transitions, however, are necessarily taxing on our time and money, at least initially. And because of the elements unique to every major life event, it is virtually impossible to accurately forecast the necessary allotment of time and money that will be required.

This can be maddening to me as a financial planner. I strive to forecast every expense one could anticipate, but change invariably costs more money and consumes more time than expected.

The only solution is to plan for the unexpected by leaving a reasonable margin of time and money — a buffer — that can be consumed by the inevitable surprises that arise. Expect that it will take 20% longer and cost 20% more. This is the only defense against heaping more stress on an inherently stressful event.

I’ll also add that our move was, in part, an exercise in the creation of margin. Despite Charleston’s great reputation as a city that offers  a high quality of life, the cost of housing, especially, is still lower than in the Mid-Atlantic. We were able to reduce our overall monthly housing costs, our biggest single expense, by 20%.

We also added a significant margin of time to our calendars. We effectively wiped clean our slate of commitments, decades in the making, and now we get to choose exactly what, where, when and to whom we’re willing to dedicate ourselves.

Key #3: Grace

“Failures are finger posts on the road to achievement.” — C.S. Lewis

Failure is inevitable, especially in the case of major life events. Grace is unmerited favor in the face of failure. This brand of grace is most often discussed from the pulpit on Sundays, but I raise the topic here more for its practical benefits than its spiritual.

The nature of life’s major transitions — specifically the changes and surprises that come with them —are a breeding ground for failure. Some are inconsequential while others come with great risks, but most come as a result of our limitations.

We err, and in order to move forward we must extend grace to ourselves and to the others on our journey.

It must be said that not all major life transitions are equal. The benefit of my recent life events is that each of them, while taxing and stressful, led to something new and exciting. You may be facing another brand of life event — a death, a divorce, an injury or a loss not of your choosing. Your situation is different — it’s harder — but that makes the use of these three keys even more vital.

When we employ flexibility, margin and grace in navigating life’s biggest transitions, we have the opportunity to not only survive them, but to thrive in and through and even because of them.

If you enjoyed this post, please let me know on Twitter, @TimMaurer.

My bad! I was wrong about rising rates and bonds

Originally published CNBC

"I was wrong."

There are few words strung together that possess such power to free us. In less than a second, we're able to reconcile the inconsistency between our previous conviction and the apparent truth. Humbling, yes, but also strangely euphoric.

Well, I've earned the opportunity to claim said euphoria, as I must confess that I had bought into the most prevalent myth du jour surrounding bond investing. You'll forgive me, I hope, because this misconception—like all of the most powerful ones—is especially deceptive because it's grounded in half-truth.

bondpit

Let's be quite clear: Rising rates simply do not guarantee negative bond returns.

The Scarcity Fallacy: Is Less Really More?

Originally in ForbesHaving the privilege of walking through life with people vocationally, aiding in the acquisition, maintenance and dispossession of earthly resources as a financial advisor, I’m burdened with a heightened sense of the battling spirits of scarcity and abundance.

The dehumanizing poverty that torments the Majority World screams that resources—here and now—are scarce. Remembering when I handed a bowl of vitamin-charged oatmeal to a boy who lives and breathes in La Chureca, the Nicaraguan squatter town subsisting off of Managua’s trash, I occasionally twinge at my willingness to pay $5 for a cup of premium Central American coffee. That expenditure could buy a week’s worth of mush, keeping children of the dump alive.

This is one of the children at the feeding center in "La Chureca," the city dump in Managua, Nicaragua.

This is one of the children at the feeding center in "La Chureca," the city dump in Managua, Nicaragua.

How could I not consume less?

And share more?

Why Beating The Market Is An Uphill Skate

Originally in ForbesIt is absolutely possible to beat the market, just as I’m sure it’s possible that someone could climb Mt. Everest in a pair of roller skates.

It is so improbable, however, that it’s rendered a fruitless, if not counterproductive, pursuit.

After 16 years in the financial industry and seeing countless great investors eventually humbled by market forces they could not control, I’ve finally relinquished my skates.

Mt._Everest_from_Gokyo_Ri_November_5,_2012

Make Your Career Move An Easy Job

 

Originally published CNBCYou know what has to be done, but it doesn't make it any easier. You've done all the research, asked all the questions and mulled over your options, and you know that moving on from your current company is the right thing to do.

 

interview6

You wince, imagining the look on the face of your boss and co-workers when you tell them. You're no longer an insider, but an outsider or—worse—a competitor. Even your relationship as friends could be compromised. It's stressful for everyone, but especially for you because ultimately it's your choice.

As you go through your morning routine on the day you're delivering the news to your company, every step seems more pronounced than it typically does. Maybe it's because you recognize it could be the last time you'll go through the paces exactly like this. Or maybe it's because the adrenaline has already notched up in anticipation of the discussions you're about to have with your boss and colleagues.

Indeed, along with marriage, divorce, death and personal injury, changing jobs is consistently ranked as one of the most stressful things a person can do. That stress can be substantially reduced, however, if you're better prepared for what comes next. Here are three ways to make the most of your job transition:

1. Leave well. "It's more important to leave well than it is to start well," a good friend once told me. And it's true. You've already made a good impression on your new company—you got the job! But while you're heading on to new and exciting adventures, your former employer is left to deal with the rejection and cleanup from your departure.

Make it easier by offering to stay on for a reasonable period of time, but not longer. In most cases, shorter is better for all parties, as it reduces the awkwardness and hastens the healing.

Part of leaving well is preparing to deal with impulsive counterattacks mounted consciously or unconsciously by your former co-workers. Especially if you brought or maintained client relationships, the words "I'm leaving" may magically transform you from friend to foe—but let that be their choice, not yours. Take the high road whenever possible.

2. Don't leave anything behind. Along with your personal Swingline stapler and the letter opener your parents gave you, don't leave your 401(k) or any other transferable benefits behind.

Specifically regarding your 401(k) or other comparable plan, you typically have three options, depending on the design of the plan you're leaving and the plan your new company offers. The first option is to leave it there; I rarely recommend this unless you're in love with the plan investment options and pay close attention to them.

Option two is to transfer the old 401(k) into the new plan, if they allow it. This gives you the benefits of consolidation and, while rarely advisable, the ability to borrow from your plan—a provision not available in old retirement plans or IRAs.

For most, the sensible choice is to aggregate the newly antiquated 401(k) plan with other prior plans in the form of a direct rollover to an IRA. In this case, you are not limited to the investment options in the new 401(k)—options that are notoriously mediocre. Be certain to check all the right boxes to ensure that your rollover is not a taxable event.

It's also important to take stock of any company benefits that are transferable. Although they are nearly extinct, pension plans of various sorts accrued during your tenure may do nothing for you now but could be meaningful in the future.

One client recently had a premonition that she'd left a small pension behind from a previous job. I encouraged her to call the company's human resources department, and indeed, there was $9,000 sitting in a plan earning 3 percent per year that she can't touch for another 15 years.

If you're blessed enough to have annual income in excess of your saving and spending needs, you may have a qualified or non-qualified deferred compensation plan to handle. And while also rare, there are occasions in which group benefits—such as life, disability income or long-term care insurance through your company—can also be traversed to private policies with the vendor.

3. Make the most of your fresh start. Nobody's perfect—including you. But as the saintly image of yourself you've been promoting to your new company starts to settle into something closer to reality, you do have an opportunity to trade some bad habits for good ones.

Take advantage of this clean slate by embracing the time-management method that's worked so well for your friend, or finally start using a system to seize control of your email inbox.

Develop a healthier rhythm of life and work. Be careful not to overextend yourself at the beginning of the new gig, lest you set expectations you'll never be able to live up to.

Make wise choices with your new benefits package. Increase your 401(k) contribution to the level you know you should be saving, and put sufficient time into really understanding the new investment options and determining the optimal mix for you. Don't forget to add beneficiaries to your new 401(k) plan and any group life-insurance coverage in the new benefits package.

As you review your group benefits—especially health, life and long-term disability-income insurance—be sure to actually understand them and acknowledge whether or not you should be supplementing them privately. (You can be almost sure that the base level of free life and disability-income insurance is insufficient.)

Consider opening your mind to a high-deductible health plan, which gives you the option to utilize a Health Savings Account (HSA). Many assume this is too complicated or costly, especially if you have a young family, but even in that case, this can be a great way to make nearly all of your household medical expenses tax deductible.

While certainly stressful, a job change navigated well can be an amazing personal and professional launchpad—especially when you leave on good terms, don't leave anything behind and take full advantage of the fresh start.

If you enjoyed this post, please let me know on Twitter, @TimMaurer.

Tim Maurer, a certified financial planner, is director of personal finance at the BAM Alliance and an adjunct faculty member at Towson University. He has co-written two books with best-selling author Jim Stovall. Their most recent release is "The Ultimate Financial Plan: Balancing Your Money and Life." 

 

Why I Gave Away My Company To Charity

A Guest Post From Derek Sivers

Tim's Note: In last week’s post, “It’s About You, Not Me,” I announced that to celebrate the release of my new book co-authored with Jim Stovall, The Ultimate Financial Plan, I’d be featuring four consecutive guest posts from some of the most compelling authors and bloggers you’ll read today.  I can’t tell you how honored I am that any of them—much less all four—would’ve accepted my invitation, and we get kicked off today with a post that will blow your mind from entrepreneur and best-selling author, Derek Sivers.

In short, Derek is a musician with enough technical ingenuity, passion and vision to have truly changed the way music is delivered today.  (You’ve probably benefited from his work without even knowing it!) 

Frustrated that there were no online outlets on which independent musicians (most of the musicians out there who haven’t received a big record contract), could sell their music, Derek created one, simply to sell his own music.  After a few other bands asked if he could replicate the trick on their websites, he realized he may be able to create a company that would provide this and other services to independent musicians.  Years later, Apple’s famous leader, Steve Jobs, was knocking on Derek’s door asking him to make his extensive online library of independent music available on iTunes.[i][ii] 

At the peak of his success, Derek felt the call to leave his baby—CD Baby—in the qualified hands of others and he sold the company.  For $22 million! (Not bad for a “struggling musician.”)  But get this—he had already placed CD Baby in a trust that would irrevocably give the proceeds to charity.  Here’s a piece of his story:

Two friends were at a party held at the mansion of a billionaire. One said, “Wow! Look at this place! This guy has everything!” The other said, “Yes, but I have something he'll never have: enough.

When I decided to sell my company in 2008, I already had enough.

I live simply. I hate waste and excess. I have a good apartment, a good laptop, and a few other basics. But the less I own, the happier I am. The lack of possessions gives me the priceless freedom to live anywhere anytime.

Having too much money can be harmful. It throws off perspective. It makes people do stupid things like buy “extra” cars or houses they don't use - or upgrade to first class for “only” $10,000 so they can be a little more comfortable for a few hours.

So I didn't need or even want the money from the sale of the company. I just wanted to make sure I had enough for a simple comfortable life. The rest should go to music education, since that's what made such a difference in my life.

So I found a great way to do this. I created a charitable trust called the “Independent Musicians Charitable Remainder Unitrust.” When I die, all of its assets will go to music education. But while I'm alive, it pays out 5% of its value per year to me.

(Note: 5% is the minimum allowed by law. It's still too much. I would have preferred 1%, but oh well. I'm free to use it to start new businesses to help people, or whatever.)

A few months before the sale, I transferred the ownership of CD Baby and HostBaby, all the intellectual property like trademarks and software, into the trust.

It was irreversibly and irrevokably gone. It was no longer mine. It all belonged to the charitable trust.

Then, when Disc Makers bought it, they bought it not from me but from the trust, turning it into $22 million cash to benefit music education.

So instead of me selling the company - (getting taxed on the income, and giving what's left to charity) - that move of giving away the company to charity then having the charity sell it saved about $5 million in taxes. (That means $5 million more going to music education.)

Also, the move of giving it away into a trust now - instead of holding on to it until I die - means its investments get to grow and compound tax-free for life, which again means more goes to musicians in the end.

I'm only writing this article because many people have asked why I gave it away, so I thought I'd write my long explanation once and for all.

It's not that I'm altruistic. I'm sacrificing nothing. I've just learned what makes me happy. And doing it this way made me the happiest.

I get the deeper happiness of knowing the lucky streak I've had in my life will benefit tons of people - not just me.

I get the pride of knowing I did something irreversibly smart before I could change my mind.

I get the safety of knowing I won't be the target of a frivolous lawsuit, since I have very little net worth.

I get the unburdened freedom of having it out of my hands so I can't do something stupid.

But most of all, I get the constant priceless reminder that I have enough.

I have not seen anyone more personify “The Gift of Enough,” as Jim and I discuss it in The Ultimate Financial Plan.  I encourage you to indulge in more of Derek’s story outlined in his book, Anything You Want.  The surprises don’t end with his massive gift, and whether you’re a successful business owner or a starving artist, you’ll find a ton of money-and-life wisdom in his book and his blog.

Thanks for sharing part of your story with us, Derek!


[i] Since when does Steve Jobs have to ask for ANYTHING??  (Except, of course, for rights to the Beatles library…which he eventually got.)

[ii] Interestingly, I’ve had the privilege to see Derek’s brainchild at work.  Outside of personal finance, my foremost hobby is music, and as the drummer for my brother’s band—The Jon Maurer Band—we were recently able to release our debut EP through the company Derek created, CD Baby.  For little more than peanuts, here’s what our profile page looks like on the CD Baby site: http://www.cdbaby.com/cd/thejonmaurerband.

It’s About You, Not Me

I announced a few weeks ago that my second book, a co-authored project with best-selling author, Jim Stovall, would be coming out shortly.  Upon release of that news and the book’s title—The Ultimate Financial Plan—a few of my closest friends gave me some good-natured ribbing for a title that could be presumed a dubious self-proclamation of preeminence.  So although I know they were only kidding, I’d like to use this as an opportunity to explain the origin and meaning of the title and make an exciting announcement about TimMaurer.com blog posts in the month of September.

Jim Stovall and I believe with every fiber of our beings that contained in this book is, indeed, the ultimate financial plan.  However, it’s not about us.  We don’t claim to be the brightest financial minds in the universe.  We don’t purport this book to be the number one source of all facts and numbers pertaining to the discipline of personal finance (thank goodness, because it would be too long and boring).  Nor do we allege it to contain the most cutting edge thinking that will revolutionize the business or practice of financial planning — with an advisor or on your own.

Personal finance is more personal than it is finance.

The reason we believe this to be the ultimate offering in its genre is quite the opposite.  It’s not so much about us, but more about YOU.  This book is strenuously focused on you, your values and your plans for the present and future.  We may appear to represent a financial industry, which, even after a timeless humbling through the financial crisis, still seems to muster a condescending tone.  Even some of my favorite personal finance gurus are famous for calling out the stupidity of their followers.  But we’re not.  We’re not talking down to you from the pulpit, but instead across the table.  We’re not sharing insight about concepts we’ve ginned up to sell a book.  We’re sharing personal narratives and experiences we’ve gained from employing these concepts—both in our own lives and in the lives of those we advise and influence.

Let’s also not forget this book is another in a series of books Jim has written that began with The Ultimate Gift.  Selling more than four million copies and seeing it turned into a movie starring James Garner, Brian Dennehy and Abigail Breslin was affirmation enough that the heart of Jim’s novel, a story about a wayward young man learning to earn his inheritance, impacted people deeply.   It was followed by The Ultimate Life (also soon to be released as a movie).  Frankly, when I approached Jim about co-authoring a book that would allow the timeless wisdom of The Ultimate Gift to be translated through a personal finance guidebook, he hesitated, having maintained a personal policy of not co-authoring.  But then Jim realized this could be his contribution to a world ever increasingly in need of applicable wisdom facing the big climb out of the financial crisis crater.

Simply put, we believe personal finance is more personal than it is finance, so our stories and advice and practical applications are skewed heavily in that direction.

A very special September

We’re going to commit a cardinal marketing sin and take the focus further off of us just as this week marks our official promotional kick-off of the book’s release.  Over the next four weeks, I’ll be featuring guest posts from four world-class authors and bloggers that have been an inspiration to me and millions of others through their work.  I’m honored and humbled that they’ve each shown a willingness to engage you, personally, on this blog.  You’ll surely not want to miss them:

  • Thursday, September 8th, you’ll enjoy a post from entrepreneur and the best-selling author of Anything You Want, Derek Sivers, explaining why he, after building a company that revolutionized the music sales industry (CD Baby), gave the $22 million proceeds from its sale to charity.  (Yes, you read that correctly.)
  • Thursday, September 15th, I’ll share a post from Chris Guillebeau, a travel and career author and blogger whose every move is followed by over 150,000 online readers.  Chris took the time to entertain and educate us on “The $30 Hotel and the Battleship Slumber Party.”
  • Thursday, September 22nd, our guest post will come from J.D. Roth.  J.D. is a blogging pioneer in the realm of personal finance who started the uber-successful blog, “Get Rich Slowly,” voted as one of Time magazine’s “Best Blogs of 2011.”  J.D. will be sharing his take on the intensely personal elements of personal finance.
  • Finally, on Thursday, September 29, I’m excited to see what Carl Richards has drawn up for us.  Carl is the cutting edge financial planner who has worked his way into the hearts of so many through his Behavior Gap blog featured in the New York Times, employing little more than a sharp wit and a Sharpie pen in his exploration of the relationship between money and values.

I look forward to bringing you these world class writers through TimMaurer.com.

Oh, and by the way…

The Ultimate Financial Plan IS now available for purchase on Amazon.com and Barnesandnoble.com.  You can also purchase it on your Kindle  and you should see it available on your Nook and in bookstores everywhere within a week.  Thanks for passing the word if you’re so inclined!

Twitter—A resource, not a popularity contest

If you live in the MidAtlantic, how did you confirm it was an earthquake that shook the ground on Tuesday, the 23rd[i]?  You probably asked someone in your office if they felt that or picked up the phone to ask another scantily qualified source the same question.  That’s what my wife did, and the phones didn’t work, only further exacerbating her fear.  I looked at my phone and checked Twitter. 

In last week’s post, I referenced a pot-stirring discussion I started within the financial planning community via the no-longer-new-fangled communication medium known as Twitter, and I promised to devote this week’s post to this phenomenon-turned-convention that, after a couple years of stumbling and bumbling through, I’m finally learning how to use effectively.

I am not one of the early adopters, embracing every technological innovation.  For example,  I scoffed at the notion of reading a book on anything other than paper pages, and only became a Kindle convert after my well-read mother showed her own willingness to embrace an e-reader (in her case, a Nook).  I also tried Twitter for the first time about two years ago, prodded by a well-intended arm twister encouraging me, “You’ve gotta be on Twitter!”  The first time, I gave up on it in spirit after about two days.  The Twitter canvas was too broad for me to understand and appeared to lack any depth or genuine import.  I struggled to know why I should care what anyone is doing multiple times throughout the day.  I cancelled my first account after only weeks.

But as the medium started to become more ubiquitous, most of those who I respected as communicators in more traditional veins began to embrace Twitter.  I started to explore the concept more and read how others I respected were using it effectively.  The second time I approached Twitter, then, I came willingly, not out of compulsion.

The result?  Twitter has become my number one source for quality information intake.

For starters, let’s explore what Twitter actually is.  It’s a communication medium in which messages are sent and read—the catch is that these messages are limited to no more than 140 characters.  They’re not captured, like an email, but instead they scroll as they are submitted.  Like me, you might wonder what of much value can be said in little more than a short sentence, but among those 140 characters can (and often is) a link to an external URL—a web address that takes you to a particular article or blog post.  Now, when each of my favorite reporters at institutions like the Wall Street Journal, Forbes, Money, Kiplinger’s Personal Finance or the New York Times, or online outlets like TheStreet.com, writes an article they send a Twitter notification to all of their followers.

The revelation I had about Twitter was that although it can be a very effective tool for sending a message, it’s an even better mechanism for scanning and receiving information—quality information, not just where B celebrities are having lunch.  So, even if you don’t care to say anything on Twitter, you’re welcome to open an account and just start following the people whose writing and preferences interest you.  And, if they start sharing too much information for your taste, you simply stop following them.

If I’ve tempted you to consider Twitter, let me bring you up to speed on the vital Twitter terminology you’ll want to understand to make yours a beneficial experience:

  • Handle:  A handle is the actual string of letters and numbers preceded by an @ sign, with which you’re identified on Twitter.  You can keep it simple, like me, and use some variant of your name—@TimMaurer—or you might use something more creative and clever, like the personal finance blogger I follow, @feedthepig.  Twitter sign-up is free and can be done at www.twitter.com.
  • Tweets:  Tweets are the 140 character messages you create and read.  (I guess that makes those of us utilizing the medium either a Tweeter or a Twit!)
  • Retweets:  When you read something you like or support (or disagree with), you can retweet the original message, as-is or with your comments.
  • Followers:  Whether you’re on Facebook or not, you’re no doubt familiar with their terminology by now.  On Facebook, you collect “friends.”  On Twitter, they’re called “followers.”  When you search a particular person or information outlet, you are given the option to follow them; if you do so, you become their follower.  If you’re broadcasting information, those you attract will be your followers.  Unlike Facebook, however, you don’t need permission to follow someone; but they’re under no compulsion to follow you back unless they choose to do so.  Initially, I was taught to just start following people for the purpose of attracting followers—and indeed, you’ll see a lot of people out there who have thousands of followers, but who follow almost exactly the same number.  I don’t have the time or desire to follow thousands of people, sorting the wheat from the chaff, so I follow only those whom I want to follow.  I view Twitter not as a popularity contest (a conviction more likely to fall on Facebook), but as a resource.
  • Stream:  Your stream is the running commentary of those you follow viewed on your computer or mobile device.
  • Lists: Lists are the way to make Twitter work for you.  Undoubtedly, you have various interests in life—vocational, financial, recreational, spiritual and beyond—and the creation of lists will help you hone what it is you want to read.  For example, create your own newspaper list; a list with reporters from all of your favorite traditional and online news outlets.  Each morning, wake up and see what they’re reporting. For example, I enjoy the Wall Street Journal reporter, Jason Zweig’s, market commentary, so I’m following @jasonzweigwsj.  (Recognize, though, if you follow an entire media outlet, you’re going to get ALL the news they’re sending and that may clutter your Twitter stream.)  Some of the lists I’ve created are “Best of,” “Personal (and other) Finance,” “Writing & Publishing,” “News,” “Music & Art” and “Life & Faith.”  Your lists can be public or private, and you can subscribe to the lists of those you follow and respect.
  • Twitter Terminology:  There is a lot of Twitter code out there, most of which I probably don’t know or understand, but the most common and powerful is no doubt the hash tag—#.  Hash tags can be created by anyone and they are ways for people to track particular discussion threads or trends.  The best example I can give you is that when I attended a recent financial planning conference, many of the attendees were using a common hash tag tweeting out great quotes from various sessions.  The hash tag was a way for all of the attendees to track the conference, even if we weren’t following each other.  This works for everything from #financialplanning to #mozart to #bacon.

Twitter may not be something in which you’ve been able to find value, so I’m not twisting your arm, telling you you’ve got to get involved with Twitter.  You don’t.  But I do think it could bring value to your pursuit of topics relating to money and life.  Enjoy!

By the way, if you’re new to Twitter and have any difficulty applying any of the above mentioned advice, please use the comments section of this post to ask any questions you have.  And some of you are far more adept in the art of Twitter—if that’s you, please feel free to correct or add to anything I’ve said in the comments section!


[i] A very important note here is that earthquakes are not covered under most homeowner’s insurance policies.  We don’t think about earthquakes much on the east coast, but we were reminded yet again recently that we DO actually live on a fault line.  For more information on the importance of adding earthquake coverage to your homeowner’s policy, read this past blog post: “Would your homeowner’s policy cover an earthquake?”

Chasing Tomorrow

A couple days ago, I tweeted[i] a question that received some interesting responses:

“Is it possible that financial advisors’ bent towards long-term saving strips clients of joy today?”

The responses I got were vociferous, both in support and opposition of the implied comment in my question.  Interestingly, all of these responses were from financial advisors.  Here was the first grenade lobbed back in my direction:

“It’s just not possible; it’s a fact. We’re in the business of selling deferred gratification.”

That comment came from a good person who is no doubt an excellent financial advisor.[ii]  But, this faulty mindset is, without a doubt, the majority opinion of the estimated 500,000 plus who refer to themselves as some form of financial advisor or professional in the lower 48.  So, financial advisors are in the business of selling deferred gratification, knowingly stripping our clients—YOU—of joy today?  How do you feel about that?  Does that make you want to run out to hire a financial advisor?

This faulty premise leads to a number of mistaken presumptions and results.  First, many financial advisors DO see themselves as the protectors of their clients’ futures, an ostensibly noble mission until we’re reminded most financial advisors also just happen to get paid more when you defer more.  There’s no way around this blatant conflict-of-interest, and any advisor caught obscuring this truth behind a veil of self-righteousness is deluding himself or herself.

There is no question that the job—even the duty—of a financial advisor in almost every case is to encourage clients to consider and establish a reasonable plan for deferring some of today for tomorrow, and to occasionally protest an attempted withdrawal spurred by a temporary urge in spite of better judgment (like the time a 20-something client wanted to take an early withdrawal from his Roth IRA to buy a jet ski).  But I believe financial planning focused too heavily on the future is little better than planning encouraging an “eat, drink and be merry, for tomorrow we die” approach.

While I absolutely believe we, as humans, do have a tendency to overvalue that which is seen or imminent over that which is unseen and seemingly distant, there is no denying the “one-in-the-hand-two-in-the-bush” adage either.   We must repel the urge to make a comprehensive financial plan the protector of only the future—stripping funding from today for a tomorrow not promised.  The ideal financial plan (some might say, The Ultimate Financial Plan…ha, ha, ha…that wasn’t planned…) helps manage the short-, mid- and long-term, balancing money and life.

Encouragingly, I believe there is a movement among financial planners awakening to the reality that in order for a plan to be relevant, it must positively impact more of life’s timeline.  In response to my tweet, Nathan Gehring, a Wisconsin cheesehead (and financial planner and blogger), called for balance and Dr. Carolyn McClanahan, a physician-turned-planner in Florida, noted she feels a duty to provide a plan more relevant to today.  Interestingly, Dr. McClanahan and I both share near brushes with death, personally, that likely impact our insistence on this issue.  But it doesn’t take a near-death experience to grasp this important truth.

(By the way, the biggest mistakes planners and clients make regarding deferred gratification are not in our saving and investing patterns, but in our choices of vocation…how we choose to spend the estimated 101,568 working hours in our lifetime.)

In 1902, Alice Morse Earle wrote, “The clock is running. Make the most of today. Time waits for no man. Yesterday is history. Tomorrow is a mystery. Today is a gift. That's why it is called the present.”

How much of life do you spend chasing tomorrow?


[i] Yes, it’s true.  I’ve embraced the social medium that took me the longest time to “figure out” or in which to find any redeeming value.  I’m officially a tweeter…or twit, if you will.  If you’re into that sort of thing, you can follow me via @TimMaurer.  And, if you’re like me, reluctant to see the value in Twitter, in next week’s post I’ll be sharing how Twitter has become my #1 source for financial news—if you can believe that—and why I think it could really benefit you too.

[ii] Please also be mindful, if you’re not a Twitter aficionado, that the medium restricts questions and comments to no more than 140 characters (as my regular readers gasp in amazement that I’m capable of articulating anything in so few letters!).  As a result, tweeters often do take short-cuts to get right to the point, sacrificing context that may help substantiate a point.