Stressed-Out Gen X and the Search for a More ‘Livable’ Life

Originally published CNBC“We’re just overwhelmed with life.” That was my response to an attorney looking for insight into the obstacles facing Generation X.

I’d referred a number of 30- and 40-something financial-planning clients to this attorney. All were in need of estate-planning documents.

But he came to me concerned about the difficulty he was having in reconnecting with clients who’d begun the process but were struggling to find the time to complete it. The time to complete anything, really.

While folks of all generations struggle with being overwhelmed by the various responsibilities and obligations of life, I see the problem as endemic within the ranks of Gen X, my peers.

A 4-Step Process to Integrating Money and Life

Originally in ForbesOnce you’ve abandoned the pursuit of balancing money and life in favor of integrating the two, the question still remains: Now what? How the heck do I better integrate money and life? Like most personal finance dilemmas, the answer is simple, but not easy.

It’s simple because it doesn’t require many steps. What’s more, it’s advice you’ve likely heard before, perhaps multiple times. But it’s challenging because you have to do some work—interior work. And then you have to make some difficult decisions.

Before I share the process, it’s imperative that we recognize a fundamental financial truth, often shrouded in a sea of marketing, misinformation and self-help rubbish that’s more sales than psychology.

RULE: Money is a means, not an end. Money is a tool—a neutral tool that is neither good nor evil. It may, however, be used in pursuit of either good or evil, and everything in between. Money can be well-utilized in the pursuit of goals, but it makes a very poor, lonely goal in and of itself.

Understanding—and believing and applying—this rule is the aim of the following systematic four-step approach to better integrating life and money:

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.

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:

The Art of Amazing

by Jim Stovall

Defining success is the initial barrier most people face.  If they instantly had the opportunity to flip a switch and become successful, they haven’t determined what that illusive term “success” means to them.  Success comes in many sizes and shapes.  It is not a one-size-fits-all proposition, but instead success is a custom-made garment designed to serve you throughout your life.

Once you have defined what success means to you, you’ve got to have a plan of action for how to get there.  I have been searching for a number of years to find a simple, one-step process to help people move toward success as they have defined it.  As usually happens, great wisdom comes not in the form of an insightful answer, but instead, it appears as a penetrating question.  Once you have defined what that customized success looks like for you, and you are pursuing it as a part of your daily routine, you simply need to ask the following question as you approach each task.  “What would I do right now if I were amazing?”

This seems to cut through the clutter and clarify the critical issue faster than anything I have ever found.  The question, “What would I do if I were amazing?” doesn’t require us to be amazing or even act like we’re amazing.  It simply assumes we have the ability to act amazing when dealing with the single task before us at any given point in time.

Lifetime goals can be broken down into long-term objectives and short-term activities; but at some point, no matter what our goal, we are faced with the next single task at hand.  It may be as simple as a phone call, a meeting, or a conversation.  It may require us to meet or greet a new person.  But whatever that activity, if we can answer the question, “What would I do right now if I were amazing?” we then stand at the fork in the road and are faced with that inevitable question, “Do I do the least I can do, the minimum that is expected, or will I perform this next task as if I were amazing?”

If you perform enough tasks at that level, soon people will begin to say of you, “That person is amazing,” and they will be right.

As you go through your day today, accept the fact that you won’t always have the right answers, but from now on, you’ve always got the right question.

Today’s the day!

Personal Finance is More PERSONAL than it is FINANCE

I need to share a secret with you: financial advisors aren’t perfect.

What?  You already knew that?

OK, so you already knew that financial advisors aren’t perfect, but they (we) may still need to come to grips with that.  It’s not as easy as it sounds.  You see, anyone trained to be an advisor in the financial services industry proper—represented by The Big Three: banks, brokerage firms and insurance companies—is likely given more instruction on molding your perception than on actually advising you. I speak of this from first-hand experience.  Let me give you a few examples:

I was told by one of my sales managers when I was a financial advisor for a very large insurance company, still in my twenties and struggling to make ends meet, that I should buy an expensive sports car.  This would supposedly accomplish two purposes: first, I would exude the desired air of success necessary to attract big clients and second, it would create a greater sense of urgency to sell more of the company’s products to keep up with my big car payment.  This same Glengarry Glen Ross-style[i] sales manager also instructed me to arrive at a lunch destination with a hot prospect early enough that I could ask the maitre d’ to call me by name, as if I was a regular at the fine dining establishment.  And if that wasn’t convincing enough, I was also to tell the waiter in advance what my favorite drink was so that when he or she approached our table I could just say, “I’ll have the usual.”  I was told to never have a beard, keep my hair off my ears and shoulders, never wear flashy ties, shave twice per day and never wear jeans or sweatpants, even for a Saturday morning trip to the grocery store.  After all, you never knew who you might sell—I mean, see. 

It was all about perception, and of course, when it came to all things financial, I was to have all of the answers, regardless of the subject matter.  If I didn’t know the answer I was to exercise my skills of creativity and persuasion to make one up.

Last week, one of my colleagues took a big, bold step in changing this culture of perception.  Carl Richards wrote a must-read article that was published in the New York Times, telling his story of an instance of personal financial mismanagement in the midst of the financial crisis that ultimately led to a short-sale on his home.  In doing so, not only did he break this barrier of perfection perception—that you never really believed anyway—but he also introduced an interesting new possibility, that we could not only learn from our financial advisor’s successes, but also from his or her mistakes.

Yes, I said “we” can learn from “our” financial advisor, because even though I’m a financial advisor (maybe even especially because), I need to have my own financial advisor.  Another colleague, Rick Kahler, author and co-author of several books including one of my all-time personal finance favorites, The Financial Wisdom of Ebenezer Scrooge, insists every financial advisor needs his or her own financial advisor.  Why?  Because money is simply too personal.  Kahler told me, “Money touches everything in our lives. How we think about it, how we use it and what we believe about it speaks volumes about how we view politics, religion, relationships, and even sex.”  He went on to say there are few topics that evoke shame quite the way money does, and I believe this may be especially true for someone who is looked to as a source of financial wisdom, like a financial advisor.

Personal finance is more personal than it is finance.

You may have heard me say this before, but it’s not a slogan I devised because it sounds clever; I genuinely believe it to be true that within the realm of financial planning and all of its numbers, charts, projections, amortizations and allocations, the most challenging and important aspects of the discipline of personal finance are not the financial, but the personal.  This is because financial planning blends both economics and emotions, and self-analysis is strewn with self-interest, self-deception, self-condemnation for some and self-aggrandizement for others.

This is why a majority of lottery winners and professional athletes find themselves in bankruptcy only a short time after their big pay day.  This is why many people who make over $250,000 per year are still living paycheck-to-paycheck.  This is why even the best financial planners need to submit themselves to the scrutiny of another advisor.  This is also why people who’ve worked to develop a healthy view of money become the “millionaire next door” with only a modest income, build successful companies from scratch, use their financial failures as a catalyst for success and in some cases find the greatest level of contentment has nothing to do with financial wealth at all.  And this is why this entire blog is dedicated to this fascinating intersection of money and life!

I’d love to hear your thoughts on financial advisors, sleazy sales tactics and money beliefs, so please join our conversation!


[i] Glengarry Glen Ross was a 1992 movie with an all-star cast including Jack Lemmon, Al Pacino, Alec Baldwin, Ed Harris and Kevin Spacey.  Alec Baldwin plays Blake, a “motivator” from the home office who is brought in to increase sales.  You can check out his motivational speech here, but pleased be warned that the language is a bit…colorful: http://www.youtube.com/watch?v=y-AXTx4PcKI  In the interest of full disclosure, I never had a manager go quite this far, but I did get the table pounding “I made one million dollars last year!  I buy a new Cadillac every two years for cash on the barrel head—because I can!” speech (the manager’s words verbatim).

Real Financial Planning

This is the last in a September series[i] that has featured guest posts from some of the most prolific bloggers and authors in the realm of money and life today.  If you missed any of them, I encourage you to revisit the wisdom Derek Sivers, Chris Guillebeau and J.D. Roth shared with us on TimMaurer.com.  And we complete this series of superstars with the person who I believe has taken the most unique approach to enhancing our understanding of personal finance—certainly the most artistic!

Carl Richards is a financial planner, blogger and the founder of the elusive Secret Society of Real Financial Planners.  Armed with a Sharpie and cardstock, Carl used his limited artistic skills to communicate some of the more complex and profound truths of financial planning and investing to clients with simple sketches.  His building body of work at www.BehaviorGap.com received more notice than he expected, and he was invited to become a regular contributor to the New York Times.  In January 2012, Portfolio/Penguin will publish Carl’s first book, Behavior Gap: Simple Ways to Stop Doing Dumb Things With Money.

Thankfully, I’ve also had the privilege of getting to know Carl personally, and through that relationship, I can certify beyond any doubt that Carl’s means, methods and message are not merely a smokescreen for attracting followers or selling books, but based on the foundational values upon which he grounds his life at work and home.  He’s been kind enough to share a sketch and a few words with us:

 It seems like making important financial decisions should be easy. After all, it’s just simple math, right? We’ve all been taught that one plus one equals two. Consequently, we often think that the process of making good financial decisions is as simple as plugging a few numbers into a spreadsheet or an online calculator. After hitting enter, we’ll have the answer.

The problem, of course, is that it doesn’t seem to be that simple. Making good financial decisions requires that we consider the implications of those decisions within the context of our lives. My life and your life do not look the same; therefore, they don’t fit into a spreadsheet.

What may be a good financial decision for me may be a disaster for you and vice versa. In my day job as a financial planner, I’m often asked by friends or people in the media, “What are you telling your clients to do now?” Recently I found myself becoming increasingly agitated by that question. Because of course the answer is, “It depends on the client you’re referring to,” because the answer will be as unique as their situation.

Real financial planning happens at the intersection of your life and your money. The problem of course is that this intersection is an emotional place. I think this is a challenge because most of us were raised with the idea that money, sex, and politics are not things that we discuss openly or in polite company.

Most of our parents felt like it was their job to protect us from the financial side of our families. We didn’t talk about money at the dinner table and chances are we didn’t talk about money at all. Our parents’ well-intentioned desire to protect their kids has left most of us ill-equipped to deal with the emotional issues that surround financial decisions and with the distinct belief that financial decisions can and should fit into a nice clean spreadsheet.

But they don’t. Dreams, fears, and our most cherished goals for our children don’t fit into a spreadsheet. Often those things are what financial decisions are really about. It’s not about finding the best investment; it’s about asking ourselves why we’re investing in the first place.

So in light of this fact, how do we go about making good financial decisions? It starts with taking the time to get really clear about where we’re trying to go and, maybe even more importantly, about why. So my suggestion is to stop watching Jim Cramer scream about nothing important and to put down the latest research report you received from the brokerage firm. Instead, take that time to have meaningful conversations with the people you love about money, your values as a family, and the kind of life you want to live together.

The subtitle of my first book was “The Intersection of Money and Life,” but I’m not sure I’ve seen anyone encapsulate it better.  Many thanks, Carl!


[i] If you missed the last couple weeks, you might not know that to celebrate the release of my new book, The Ultimate Financial Plan, co-authored with Jim Stovall, I’m featuring guest posts from some of the bloggers and writers who’ve most inspired me of late.    

The $30 Hotel and the Battleship Slumber Party

Continuing in this special September series[i], this week I have the pleasure of introducing you to Chris Guillebeau.  Chris is the most unassuming revolutionary I’ve ever met.  He’s soft-spoken and appears not to have a self-interested bone in his body, yet a couple-hundred-thousand people follow his every move online each week through his blog, “The Art of Non-Conformity.”  He lives the title—he quit high school and then finished his college degree in two years.  Still in his early-thirties, he’s traveled to over 150 countries in support of his goal to visit every country on the planet, educating his audience on travel and life every step of the way. 

Chris is the author of the book, The Art of Non-Conformity, and I love the way he describes the central message: 

You don’t have to live your life the way other people expect you to. You can do good things for yourself and make the world a better place at the same time. Here’s how to do it.

If  you don’t want to pay a dime for some of his wisdom, read the manifesto that kicked off his writing career—A Brief Guide to World Domination—or the sequel, 279 Days to Overnight Success.  And of course, read this post from Chris, written just for you!  

***

When I went to Vietnam several years ago, I was excited to find a local hotel that offered nice rooms for $25. An upgrade was available for $5 more. Sight unseen, I took the upgrade—and was glad I did.

My own balcony! Free soup for breakfast! And truth be told, for someone who usually lives in the Pacific Northwest, the air conditioning while visiting Southeast Asia was nice too.

When I came home, I told the story of my $30 room. Some people said, “That’s awesome!”

But others had a different take. “I wouldn’t feel comfortable staying in a place like that,” a friend of the family said. “Wasn’t there a Western hotel nearby?”

Well, yes, there was a Marriott—and it cost $270 a night.

Others were unhappy for a different reason: “Dude, you got ripped off!” a fellow student in my graduate program told me. “I paid $5 a night for a bed when I was there.”

Truth be told, I didn’t need the $270 Marriott, and I didn’t feel bad about the “overpriced” $30 room. I was happy to exchange the money I did for the experience I received; I walked away satisfied with the exchange.

On countless other trips around the world since then, sometimes I’ve paid next-to-nothing, and other times I’ve paid a small fortune. It all comes down to a question of mindfulness, something I believe is the most important skill of personal finance. You can learn about exchange-traded-funds or DRIP investing whenever you’re ready (and if you never learn, you’ll probably be OK). But if you get clear about what you value and how your relationship with money is intertwined, you’ll go far—no matter which tax bracket you find yourself in.

Discussions about frugality and values tend to get weighed down by competing values: “save money at all costs” versus “live a little.” Tim’s work on this blog, his radio program, and in The Ultimate Financial Plan is smarter than that. It’s all about deciding what you value—and making sure your spending relates to those decisions.

I enjoyed reading about Tim’s choice to spend the night on a battleship with his son. He probably could have had a better meal elsewhere, or he could also have saved the money for a distant future. Speaking for myself, I’m not so sure I would have enjoyed the battleship slumber party—but I think it’s clear from the post that Tim made the right choice for his family adventure. Don’t you?

***

Some things are worth the money and some aren’t, and these decisions will always be relative. I don’t need to pay $5 a night in Vietnam… $30 was just fine with me. Sleeping on battleships isn’t my style, but I can see why it would make a fun memory for a parent and child.

I’m not in the business of telling people what they should value—and thankfully Tim isn’t either—but I’d encourage you to think long and hard about what you value and how your money will be used in support of those values. The poet Mary Oliver might have put it best: “Tell me, what is it you plan to do with your one wild and precious life?”

Well? It’s your turn now, and your life.


[i] If you missed the last couple weeks, you might not know that to celebrate the release of my new book, The Ultimate Financial Plan, co-authored with Jim Stovall, I’m featuring guest posts from some of the bloggers and writers who’ve most inspired me of late.  If you didn’t see last week’s post by Derek Sivers on why he decided to give his $22 million company away to charity, it’s a read both humbling and inspiring. 

State Of The…

President-Barack-Obama-State-Of-The-Union-Address-PHOTOS Did you watch President Obama’s recent State of the Union address?  What did you think?    I’m not asking whether you liked the color of his tie or enjoyed seeing Vice President Biden and newly elected Speaker of the House John Boehner try to suppress their disdain for each other on camera.  I’m curious what you thought about the speech’s content and substance.  Mine is not a political question—asking if you agreed with the President’s stances on this-or-that—but a probe to determine if you feel the topics in the speech were meaningful.    He touched on:

  • High unemployment
  • The depressed housing market
  • The sluggish economy
  • Two wars
  • The national debt
  • The sovereign debt crisis in Europe
  • North Korea’s nuclear ambitions

Few of us would argue that these are not vitally important issues, but which do you think has a bigger impact on your life—The State of THE Union or the State of YOUR Union?

Whether you acknowledge it or not, you’re an entity.  You and your spouse (if you you’re married) and your children (if you’re a parent) are certainly beholden to other entities, like cities, states and countries, but you also enjoy a great deal of sovereignty.  You decide where to live, what to eat, whom to befriend and marry, how to derive an income and how to spend it.  But interestingly, we tend to spend more time bemoaning the action and inaction of those with less of a direct influence in our lives—bosses, legislators and Presidents—than those who most directly impact our lives…US.

I seek not to minimize the importance of the State of the Union address (even though it seems more like political gymnastics these days, regardless of the party affiliation of the deliverer) and certainly not the actual state of our great country, but to elevate and affirm the most powerful leaders in our respective realms—YOU and ME.  Your entity needs you to be actively involved in the process of gauging its state, crafting its vision for the future and moving in the direction of that vision.

The first step in effectively leading the “Democratic Republic of You” is to simply be honest with yourself.  This, of course, is where we must deviate from the political analogy, because we do ourselves no good whatsoever to spin our current reality into something shapelier than it is.  Each of us is uniquely made, and we only distance ourselves further from fulfillment when we attempt to prove otherwise.

The most common way I see this play out is in the educational paths we take and the career choices we make (topics I’ll be discussing in the next couple of weeks), but I’d like to ask you to take 5 minutes to complete an exercise right now.  It’s very simple and it works wonders to help us analyze our current state.  You need only one piece of paper with a line down the middle (see the sample below).  On the left hand side, you write LIFE TAKING and on the right side you write LIFE GIVING. Those things that fill the Life Taking column are the roles (or tasks within roles) that drain you.  They’re a chore, not a labor of love.  On the Life Giving side, list the opposite—those things you can do for eight or ten hours in a day and wonder where the time has gone.  You might be tired after a long day of Life Giving activities, but you don’t feel weariness; instead, a great deal of satisfaction.

TORN PAGE
Looking over this list, you’ll be able to honestly answer whether the state of you or your family is good, or not.  The optimal end result is not to eliminate all of the things that drain you and replace them with the stuff you love, but if the majority of your roles and the duties you’ve accepted as yours are Life Taking, I encourage you to consider making some difficult decisions in an effort to improve that ratio.  That may mean saying yes to something, but it almost certainly means saying no.  Next week, I’ll share how this type of analysis can be used to give us much needed direction in our educational and vocational pursuits.

If you want to get started on listing these out for yourself, I have provided a downloadable version of exercise right here:  Download Life Taking, Life Giving – BLANK.

And if you need a little levity to warm up to this exercise, take a look at Saturday Night Live’s take on the 2010 State of the Union address.

 

Simplicity Overdose

Decisions The other night I got together for a drink with a good friend to pause and reflect on our lives… especially how we can best serve our families and vocational missions.  He’s an excellent listener and a graceful inquisitor with a tendency to ask the kinds of questions that lead me towards meaningful realizations and occasional revelations.  As I was answering one of those probing questions, I realized that I’ve spent the last couple years yearning for a greater level of peace in my life through simplicity.  I’ve read books and blogs on the subject and asked mentors and gurus how they have and have not found this peace in their own lives.  But despite (or maybe because of) my vigorous search, I’ve taken very few steps in benefiting from any of the wisdom I’ve internalized.  Why?  It appears that I am at risk of reaching the point of “analysis paralysis” regarding simplicity.  How ironic—a simplicity overdose!

How often do you think that we reach a superficial level of satisfaction in some area of our lives—our job, family, health, finances or education—simply because we have improved our understanding intellectually in that arena?  I see this often in my vocation…  Individuals and couples breathe a huge sigh of relief after they consume a comprehensive list of recommendations.  But this false sense of security decries the reality that it’s not until they implement the recommendations that a tangible benefit will be derived.  In my case, I’ve concluded that the glimpse of a future benefit from a more simple approach to life is actually preventing me from gaining that tangible peace I seek.

Yes, there is inherent value in knowing and understanding what we need to do to improve an area of our lives.  Without that recognition, positive change is only incidental or accidental.  But the benefit of knowledge and understanding is diminished nearly to the point of irrelevance when not accompanied by tangible, deliberate action.  So in keeping with my simplicity resolution, I’ll subvert the urge to suggest, say, “three steps” towards benefiting from this particular insight and give only one: Know LESS; Do MORE.  (… or was that two?) 

 

You Need To Know…Talent vs. Practice

Listen to Tim deliver this YNTK!  Click below:

You Need To Know – TalPract

__________________________________________

YOU NEED TO KNOW… some good news and bad news about your retirement—and life–plans.

You want the bad news first, don’t you?  Your retirement plan goals aren’t likely to be realized overnight.  Worse yet, most of your big plans in life also aren’t going to materialize in a flash moment of brilliance.  We know this, don’t we?  But our actions don’t always show it.  We agree that our goals aren’t likely to be met in an instant, but then we act as though the retirement or other life goal lottery is going to strike…. by over-weighting hot stocks picks or volatile mutual funds in our portfolios…  Or maybe we work day-in-and-day-out expecting someone to change our life and move us to the penthouse corner office, or hand us that big break.  So the bad news is that hope, desire – even talent – alone will not really get us anywhere in our long term planning.  As Anders Ericsson, the world renowned expert on high performance in work, sports and life puts it “I have yet to find a talented person who didn’t earn their talent through hard work and thousands of hours of practice.” 

So what’s the good news?  Ericsson dubbed the term “deliberate practice” in describing the one key factor that virtually all successful plans have in common.  That’s the reason that your buddy, who doesn’t have a lick of athletic ability, has a golf handicap in the single digits.  That’s the reason that monthly investment plans virtually always end up positively surprising folks years down the road.  But, when it comes to engaging in “deliberate practice” to better your retirement or financial independence plan, it requires that you HAVE a plan… then you have something to practice.

Talent, hope, passion and vision are all great things, but without employing them in habitual pursuits, they will accomplish very little.  Conversely, you will surprise yourself in your retirement and other life plans if you simply dedicate yourself to a deliberate practice of your objectives… and that is something that YOU NEED TO KNOW.