Effectively Navigating The In-Between Phases Of Life And Work

Sometimes we do get ourselves stuck, but other times we simply find ourselves marooned in the in-between—where the present feels more like the past, but the future is uncertain.

People talk a lot about finishing an existing project or starting a new one, but how can we effectively navigate the seeming wasteland between them? Whether or not we choose to be in this space, it can be uncomfortable and it is often unproductive. It’s as if we find ourselves treading water—personally, professionally and financially. But by effectively navigating these in-between phases in life and work, by releasing the outcome and exercising proactive patience, we can keep moving forward.

Maybe you’re rehabbing an injury and are out of the game or the season. Maybe you’ve sold your house and temporarily are crammed into an apartment while you’re building your new dream home. Maybe a long-term relationship has ended and you’re taking time to heal before considering coupling again. Heck, maybe you’ve gotten the first vaccine shot and are awaiting the second!

One of the most common—and challenging—in-between scenarios, however, is occupationally oriented. I spoke with a great friend and amazing professional this past week who runs her own business—but she’s in the middle of a lengthy interview process for a job that could be really stinking awesome.

The new job, if offered and accepted, would initiate a massive amount of change for her and her family. They’d have to move—and they already live in the best city in the world, for goodness’ sake—but her husband and three children are all on board for a new adventure if that’s how it breaks.

There are several meaningful pros to accompany that monumental con, though. Most notably, the job would vault her visibility within her industry, compounding her already impressive credentials, and position her as a national authority in her realm of expertise.

But the whole process of wrestling with this possibility began months ago. First, she had to come to grips with the possibility herself; then she had to communicate that development to her husband, whose work would remain in their current locale; then they had to see if the kids were on board; and only then did she really seriously consider this option.

And throughout it all, the “Will they pick me?” stress continued to build and build. The first interview. The call back. And now, a scheduled third interview. Oh, and running the business she already owns.

Most of us have been through some version of this and many other in-betweens—or we will be in the future. But as she recently brought me up to speed on the process and progress, I could feel my own stomach tighten. So I asked:

How are you managing being in the in-between?

Curiosity: The Most Important Trait For Financial Advisors

I had it all wrong.

Early in my career as a financial advisor, my goal, even more than gaining clients, was to gain knowledge. I was operating under the assumption that bringing knowledge where it is lacking is an advisor’s primary value. But while a certain degree of knowledge is a prerequisite, of course, I eventually learned that knowledge is ubiquitous—readily available with a few keyboard taps—and that it can even be counterproductive when sub-optimally applied.

Fortunately, I graduated from that oversimplistic belief to a more nuanced one in which I found greater confidence. I determined that sound judgement was actually the most important trait for an advisor. It was the ability to apply knowledge, to help clients make a this-or-that decision, that was really where an advisor could demonstrate his or her worth. 

How To Be Unhappy But Successful

“Are you measuring yourself in the gap or the gain?”

No, this isn’t a question pitting retail clothing against laundry detergent. It’s a question posed by Greg McKeown, the author of the essential book Essentialism, in his recent 1-Minute Wednesday newsletter.

Your answer matters, both in the way you approach money and life—but especially money.

“Gap thinking means looking at the distance between where we are and where we want to be (or comparing ourselves to what other people have achieved),” said McKeown. “Gain thinking means looking at the progress we have already made.”

For example, I had breakfast Friday morning with two friends, both of whom have experienced degrees of success in their professional lives that I could argue dwarf my own. That’s where my head would be if I was a gap thinker, anyway.

If I was a gain thinker, however, I might relish the fact that these dudes thought highly enough of me to give me a seat at the table…or at least that I was in good company for a free breakfast at a great restaurant!

As a financial advisor for a couple decades, I can tell you that the #1 question I’ve been asked by clients is some version of, “So, how am I doing…you know…relative to your other clients in similar situations?”

It’s not because these people are overly insecure or emotionally needy. But money—and, in many ways, financial planning—breeds gap thinking. Dollars, cents, credits and debits make it so easy to create a seemingly tangible success scorecard.

Perhaps you’re familiar with Lee Eisenberg’s book from several years back, The Number: A Completely Different Way To Think About The Rest Of Your Life. He recalls a regular-rotation TV commercial at the time (that may still be running in some form today) for a big financial institution where you see people walking down a busy street, each with a dollar number hovering over them.

This is the type of image that the very nature of money makes it hard to avoid.

It’s not an entirely unhelpful notion to quantify our financial security in the form of a single number, despite the risk of oversimplification. But such thinking leads us very quickly to comparison, which many years ago Teddy Roosevelt accurately declared to be “the thief of joy.”

The Crazy Stuff We Do With Money—Explained

I’ve got some good news. You’re not crazy. 

That’s the message of one of my favorite books of 2020, “The Psychology of Money,” written by Morgan Housel and inspired by a popular blog post he wrote in 2018. It’s a compelling read and the book offers many great lessons, but I thought this particular encouragement was worthy of the fresh slate afforded us all by the start of a new year:

“We all do crazy stuff with money, because we’re all relatively new to this game and what looks like crazy to you might make sense to me. But no one is crazy—we all make decisions based on our own unique experiences that seem to make sense to use in a given moment.”

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Author and financial planner Rick Kahler echoes this sentiment, suggesting that “every behavior around money, no matter how illogical it seems to you or others, makes perfect sense when we understand the underlying thoughts, feelings, and beliefs.”

What difference does it make if we just keep screwing up? Can we increase our accountability to ourselves? Here are four steps you can take to help you understand these insights—and screw up less:

How Much Impact Does The President Have On The Market?

The question of whether or not the U.S. President or a particular party has an impact–positively or negatively–on stocks, bonds, unemployment, inflation, the deficit, and GDP growth–has been flying around like crazy. But especially in the midst of a contentious election cycle, it’s never been harder to find clear answers.

But take a glance at this interactive chart that enables you to click on each U.S. President going all the way back to 1929 to see what the major market and economic indicators looked like for each presidential cycle. I think you’ll find that it’s conclusively inconclusive:

So, should you consider changing your investment plan ahead of the election?

Short answer: No.

And here’s the slightly longer answer from one of the brightest investment people I know (and a darn good guitar player), Jared Kizer, CFA, Chief Investment Officer, Buckingham Wealth Partners:

How To Survive The Election

Everything coming at us right now is purposefully designed to unsettle us. We have to work to be settled in an environment like this. Here are three simple steps you can take to find peace in the midst of the chaos, and likely help others around you do more of the same:

1) Control Your Inputs.

A friend told me yesterday that he needs to replace the screen on his brand new, fancy-schmancy, big-screen OLED television. You know why? Because the banner running across the bottom of the screen of his news channel of choice has scorched itself into the screen. I didn’t even know that was possible.

Turn off Fox News. Turn off CNN. The former has a daily show called “Special Report,” a phrase that was once reserved for something that was Earth-shattering news, and the latter has a daily show called “The Situation Room,” which used to be an actual place in the West Wing of the White House reserved for the most serious of situations are discussed.

Financial Advisors: How To Talk To Clients About Politics

The last time I put a presidential campaign sign in my front yard was 2004. We lived on a small court, and we had just moved in that September. One of our neighbors was another young couple, but the other two families had lived there since the houses were built in 1960.

My political convictions were (and are) important to me, but one day, as I pulled into the court and saw the sign, it struck me that while it may have been a bridge to one neighbor, it could almost certainly be a stumbling block for another. I hadn’t even met all my neighbors in person yet—did I really want my vote to be the first impression I made?

I pulled out the sign, and I haven’t raised another since.

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Sometimes I have to pinch myself, because as a financial advisor, my job is to meet people, learn about what’s most important to them, help them articulate those values as intentions and goals, and then help create and follow a plan designed to reach them. What a gig, and what a privilege!

One of the greatest gifts of my 20 years and counting in the business is the wide variety of people with whom I’ve been able to engage. While you might tend to think that there is a stereotypical financial advisory client, my experience has been anything but uniform. From teaching college students—one of the best educations I’ve ever received—to advising individuals and families, it’s the striking differences between people that have left an indelible mark on me.

Sure, aside from the college students, they all had something in common—they were blessed with means sufficient enough to hire someone to help in its stewardship—but that’s where the similarities stopped. And their political proclivities have ranged across a vast continuum.

Especially over the last decade, and increasingly over the past four years, I’ve also seen these political opinions manifest as convictions so gripping that I’d describe them as visceral. People seem increasingly concerned with the potential for politics to shape their lives externally, and these concerns are so deeply internalized that I can see, hear and feel the weight of them in the faces and voices of my clients.

These feelings seem just as strong across the political spectrum. It’s not uncommon for us, as advisors, to have a conversation with someone who is convinced that their livelihood is doomed and the very fate of our nation sealed if so-and-so wins only to find, in the very next conversation, that another person is convinced of something equally cataclysmic if such-and-such wins.

So what are we advisors supposed to do? How do we navigate these intense emotions with our clients? And how should we navigate the opinions we hold, knowing that our convictions are rarely, if ever, going to be entirely aligned with those of our clients?

The Non-Conformist’s 4-Step Education Savings Plan

It’s become almost passé to bemoan the exorbitant cost of a college education and the collective debt burden, now over $1.6 trillion, resting on the shoulders of U.S. students and parents.  While it’s true that college tuition has risen at twice the rate of inflation, many academic consumers refuse to recognize their complicity in skyrocketing costs.  Indeed, educational institutions charge what they do because we’re willing to pay for it.

Yet a perplexing antinomy exists—a college education can be excessively expensive, holding students and their benefactors financially hostage for decades, or it can be surprisingly inexpensive.  Case in point:

Harvard Vs. Harford

Without accounting for any financial aid or scholarships, a student could trade one semester of Ivy League education for a four-year undergraduate degree from any number of excellent state universities.  Specifically, if a student, living in Harford County, Maryland, were to commute from home to Harford Community College for two years and then commute to Towson University for the second two years, the total cost of tuition and fees—for an entire undergraduate degree—would be approximately $27,826 by my calculations, based on 2020 published estimates.  That would buy you just a hair under 10% of four years of tuition, room, board and fees at Harvard–it wouldn’t even cover a single semester.

This is quite obviously a gross oversimplification, only factoring one of many important dimensions of the full college experience, and not accounting for the fact that few students at any college pay full price, but the illustration forces us to recognize that there are other educational options available aside from paying a fortune.

It also begs the question: In a day and age when the undergraduate degree has been largely commoditized and viewed as a prerequisite for virtually every white collar job available, do the intangible benefits to be derived from any collegiate scenario costing more than the $27,826 represent a good value proposition?  Is the nearly $200,000 premium (in today’s dollars) you pay for the elite private or Ivy League undergraduate experience worth it?  Is the $100,000 premium you pay to live on campus at an out-of-state, state university worth it?  Is the $50,000 premium you pay to live and eat on campus at your state university worth it?

The answer for any of the above may very well be an emphatic and justifiable YES! but the value proposition for each student/school/benefactor combination will be different and worthy of exploration.  Here’s a four step process that will help you make that determination and properly fund the resulting decisions.

Step 1: Can you?

This instruction is directed largely to parents, but the logic is identical and the process just as important for those flying solo in their educational endeavors.  In developing your Family Education Policy, you must first ask the question “Can I?”  What is a reasonable expense for your children’s education that your household could bear without unduly hampering your own financial plan, present and future? 

It’s actually a selfish act to prioritize your children’s education over your retirement savings, because it will be much less costly for your children to pay off finite student loans than to bail out parents in the midst of a financial and health crisis in their old age.  If you can’t, don’t; then set your pride aside and discuss this reality with your budding scholars.

If you’re having trouble answering the question Can I? without more of a frame of reference, let me give you a rough idea of how much you’d have to save monthly, from the day your child is born, for 18 years, assuming the cost of education rises at 5% and you’re able to earn 7% on your savings:

  • Community college / In-state State U commuter:                      $ 155/ mo
  • In-state State U resident:                                                                 $ 542/ mo
  • Out-of-state State U resident:                                                         $ 857/ mo
  • Premier private / Ivy League resident:                                        $1,618/ mo

Does that offer some perspective?

Step 2: Will you?

After determining whether you can, you should follow that with “Will I?”  The financial entities who sell and administer education savings plans have seemingly colluded with academia to create an unspoken moral imperative for parents to fund their children’s college education.  And while I have no desire to strip you of a healthy desire to pay for your child’s post-secondary schooling, I want to give you the freedom to recognize that it is your choice to make.  This is an opportunity to parent, and to make a mark on your children based on your articulated personal principles and goals—the first step of every good financial plan.  I urge you to capitalize on that opportunity.

Step 3: Develop a Family Education Policy

At this point, you can, with the aid of your co-parent, clearly set forth a Family Education Policy.  This is your answer to the question your kids will eventually ask: “Hey, Katie’s parents told her they would pay [whatever] for college—what are you doing for me?”  My hope is that you won’t even wait for that query to arrive, proactively communicating this message even before curiosity forces the issue.  Maybe you’ll offer to pay up-to the four-year cost of an in-state state university education; or possibly up-to four years at your alma mater (although I’d warn you that this common directive seems less about them and more about you); maybe you’ll offer to pay the first two years of school, or a fascinating idea one client proposed—the second two years (to ensure her children were serious about the endeavor).

If you have the wherewithal and desire to offer your children the educational blank check—you can go wherever your heart desires that will accept you—by all means, do so.  But if all you have is the desire and not the wherewithal, you’re doing no one a favor.

Step 4: Develop an Education Savings Plan

The number 529 has become nearly synonymous with education savings, and in part for good reason.  529 plans offer education savers options for hedging the future costs of education and/or tax privilege.  Prepaid tuition plans give us the opportunity to pay for tomorrow’s tuition at today’s prices.  The plans are state administered and typically only cover the cost of tuition in your state (although you may be able to use the equivalent of the tuition cost of your state’s universities in another state).  If the cost of education continues to rise at its current pace, this would appear to be a good hedge, but the solidity of your prepaid plan of choice must also be considered.  Since many states are enduring financial difficulties of their own, the solvency of some plans has been reasonably questioned.

A 529 investment savings plan is very different conceptually.  It is an investment bucket of mutual funds you own that receives tax privilege similar to that of a Roth IRA.  You contribute after-tax dollars to the plan, and the principal and growth can be distributed tax-free if used for a wide range of qualified education expenses.  You may also receive a state tax deduction for a portion of your contribution.  The contribution limits are quite liberal, allowing $15,000 per parent (or even grandparent), per child in 2020, also with an allowance to prefund up to five years.  But since the funds invested in these accounts are subject to market volatility, a bigger concern over the past decade has been whether or not you are actually making money at all—much less over the college inflation factor.

If your children are very young and you can stomach the volatility, a college investment savings plan is an excellent tool, but I highly recommend using a no-load version of one of these 529 plans so you don’t start your investment in the hole via a brokerage commission.  If your children are older and you live in a state with a strong prepaid tuition plan, that may be a good option to consider.  But in either of these cases, I recommend you apply the 50% Rule.  Save 50% of your expected education needs in education-specific 529 plans, but store the other 50% in conservatively invested taxable accounts (or even savings accounts and CDs) since there are so many other variables at work.

Does education have a price?  Learning has inherent value which is incalculable.  Education is one of the primary ways we learn.  I taught at the college level for seven years and believe that it is one of my most important contributions; but while the educational process may be priceless, we must not ignore the associated price tag.

This article, updated in 2020, was originally published in my blog on Forbes.com.

Helpful Perspective From A Rockstar Non-Profit And A Tailwind

Do you ever get so caught up in your own head, in your own stuff, that you lose perspective? I can’t imagine a time that would be more inclined to lead us to insular thinking, self-pity, conspiracy theorizing, and perspective losing than this season we’re trudging through.

So in this week’s Financial LIFE Planning weekly installment, you’ll get some perspective that I hope will give you peace and help you make wise financial, and other, decisions:

  • An exclusive FLiP video chat with Michael O’Neal, the Executive Director of global non-profit, ONEWORLD Health
  • A confounding Weekly Market Update with a side of cheese
  • A reminder about our capacity to overestimate our own capabilities

Oh, and Happy Mothers Day, to mine and all of you moms!


Financial Planning

How to Get More Than You Give

Have you ever noticed that when you give to someone whose needs are greater than yours, you actually feel like you have more? Whether it’s a friend in need of a pick-me-up, an investment of your time at a soup kitchen, or a charitable contribution, this change in perspective is one of three major benefits of giving.

The other two? Well, in addition to our perspective being changed, we experience a biological phenomenon, an endorphin rush. Apparently, we’re biologically wired to feel good when we give. Cool, right? And pragmatically, depending on how (or if) you file your tax return, you may also get a rebate on a portion of your financial gifts…check with your CPA.

This week, I recorded a video chat I had with the Executive Director of ONEWORLD Health, Michael O’Neal, specifically for you! We discussed their unique approach to sustainable development work that has enabled them to survive the COVID-19 crisis–and the success they’ve had cultivating relationships with individuals, families, businesses, and even rock bands, like NEEDTOBREATHE, who alone has raised over $2.3 million for the work their doing.

He also explains why we always get more than we give. Click below to watch the nine-minute excerpt, or top off your coffee and click HERE for the full 23-minute interview.

And yes, if you’re jonesing to put that give-more-than-you-get business to the test right now, it’s easy–click HERE and hit the Donate button. And if you choose to give $50 or more, please let me know, because I’d like to send you a personal thank you.


Weekly Market Update:

After two marginally down weeks, the market had another week in the green, almost confoundingly so:

  • +2.56% DJIA (30 big U.S. companies)
  • +3.50% S&P (500 big U.S. companies)
  • +2.71% EFA (~900 international companies)

The biggest question for most people is, “How!? How is the market going up when the economic news is historically bad?” It’s true: Unemployment this week hit 14.7%–the worst since the Great Depression.

Although clearly indeed of a beard trim–sorry, Mom!–I joined Jill Wagner on Cheddar (an online TV channel) to discuss this seemingly odd phenomenon, and to offer some suggestions for the unemployed, under-employed, self-employed, and gainfully-employed in these challenging times:


Life Planning

Is the wind at your back?

I’m not a “cyclist,” but I do love to ride my bike. Last week, I took a new ride, recommended by my good friend–who is a cyclist–that stretched me a bit, and gave me another healthy dose of perspective.

I love to have a destination, so I set my course for the Bulls Island Ferry, a beautiful spot in Awendaw, SC. The total ride was about 20 miles, and on the way there, I felt like an Olympian, averaging about 18 mph. (“Maybe I can call myself a cyclist,” I was beginning to think.

With head held high, I took in the beautiful view, nodded proudly to the couple that I passed on the last mile, and headed homeward. Only then did I realize that I’d had a meaningful tailwind that I’d now be fighting the entire way home. The wind had been at my back.

And as I was thinking about a contingency plan on mile 15–suffering the embarassment of calling my wife and asking her to pick me up in the middle of nowhere, a length to which I thank the Lord I didn’t (quite) have to go–a question hit me like an easterly wind pounding route 17:

How much of whatever I’ve done well in life was actually just thanks to a solid tailwind? Being born into a great family? In the right zip code? Being on the right team? Having selfless friends? Working with amazing people?

How about you? Is it possible that your successes have been aided by a tailwind? If so, who is deserving of thanks? (In addition to your mother, of course!)

How about now? If you feel like a failure at the moment, is it possible you’re just facing the greatest economic headwind of a generation? Who can you ask for help?

Or if you’re fortunate enough to be cranking through this crisis at top speed, who can you help?

And if you think of the people who’ve been your tailwind, I hope you take a moment–why not now?–to thank them.

The spent lungs and sore butt were worth the perspective…and so was the view:

I hope you have a great Mother’s Day and find a healthy tailwind this week!

Tim

Is COVID-19 Creating An Education Planning Crisis?

Few things in our lives have been so dramatically altered throughout the COVID-19 crisis as school and education. From online coursework to cancelled proms to a March devoid of Madness but full of uncertainty about whether or not college campuses will even reopen for the fall semester, there seem to be even more questions than answers.

How events unfold is especially high stakes for the students and parents facing the myriad of decisions surrounding the meaningful investment—personally and professionally—of college education. So, both as an advisor and a parent of teens, I asked one of the most knowledgeable people I know on the topic of college planning, my colleague Dave Ressner, a wealth advisor and education planning specialist. And he answered:

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Tim Maurer: What impact is the COVID-19 crisis having on institutions of higher learning?

David Ressner: COVID-19 has affected almost every sector of the economy, and higher education is certainly no exception. One higher education group estimates more than $100 billion in emergency response costs across the sector, and some schools are worried they won’t be able survive this crisis.