Having worked with hundreds of people over the years, it’s my experience that everyone has deeply rooted feelings about money that can strongly influence their financial decisions and goals. Often, people develop the same attitude toward money that their parents had. For example, if you grew up in a household where every penny counted, chances are that you feel the same way as an adult. Conversely, if you were raised by parents who spent every cent they had, you likely struggle with saving. Certain life experiences can also impact your financial views.
For example, I had a client who worked as a nurse. She absolutely hated it. And even though she had inherited some money from her parents well in excess of a million dollars, she continued to work at a job that made her miserable—all for a couple of thousand dollars a month. I finally told her, “You know that you can stop working, right?” Her response was, “Well, no, I can’t. I can’t afford it.” So, we ran through the numbers, and then suddenly she had tears streaming down her face. After several minutes of silence, she finally said, “I can really quit!” She put in her two-weeks’ notice the next day, and she has been living her best life ever since.
It turns out that her traumatic divorce and her ex-husband’s controlling attitude toward money had created her money story. All she needed was to be shown a different perspective.
I have another client who was convinced that he needed to have $2 million before he retired. He was absolutely fixated on that number. However, when we took a step back and crunched the numbers, it turned out that he needed significantly less.
“You’ve got social security, and you’ve got this pension over here,” I told him. “Based on your lifestyle, you need $1.2 million.” Suddenly, he was able to relax and stop obsessing. Because of smart financial planning, he’s been able to exceed his initial goal of $2 million anyway, but he was no longer hyper-focused on an arbitrary number.
Enjoying Life Along the Way
Interestingly, in my role as a financial advisor, I spend more time helping people learn how to spend money than helping them save money. People want to put a certain amount of dollars away so that they can have a bright future down the road, but many times they get so fixated on how much money they need to save that they forget to live along the way.
When people who sacrifice their lifestyle to the extreme finally do make it to retirement, they can often be kind of like deer in the headlights. Suddenly, they’re told, “Okay, you’re done. Here’s your money.” I often have to assure such clients that they will be okay and encourage them to spend money and enjoy the life that they’ve waited so long to start living. It’s a huge psychological shift, which then goes back to their money story.
One of my clients has a lot of money, but she couldn’t seem to give herself permission to spend it. So, we structured her finances in such a way that she gave herself monthly payments from a special account. Once she started to see a certain amount of dollars coming to her on a regular basis, she thought, “Oh, it’s like a paycheck,” and she finally felt comfortable spending it.
The danger in waiting until retirement to enjoy life is a danger that we all deal with—an uncertain future. What if you develop severe health problems and can’t enjoy retirement? What if you don’t live to enjoy the fruits of your lifelong labor? What if something unexpected happens that completely changes life as you know it?
I have a client who was on the fast track to retire at a pretty young age because he diligently saved large sums of money every year. Tragically, a couple of years ago, while he and his son were driving down the road, a drunk driver hit their car and killed his son. You can only imagine the grief and pain that he and his family have been suffering through. My client became kind of a zombie, if you will, just working and going through the motions. But what the family really needed was time together to heal.
They had the money and the resources, so I had a conversation with him. I said, “You know, you’re on track to retire at an early age. But what if we just extend that out a little bit and maybe not put as much money away so that you can spend some time with your family?” He embraced it. He can never replace his son, but he has been able to use his money to create bonding experiences and much-needed healing opportunities for his family.
The Heart of the Matter
The clients who I work with have money to spend. But sometimes, they don’t know how to spend it—they don’t know how to live the life that they want. It’s my job to help them. By asking my clients certain questions, it helps me to understand their money story and to identify underlying issues or concerns. This, in turn, helps me to create a strategy for their financial goals and desired lifestyle. Let’s do the same exercise here. Ask yourself:
- What is my money story? What is at the root of my feelings toward financial matters?
- When it comes to money, do I have an abundance mentality or a scarcity mentality?
- Do I have a lot of fear around money? If so, where does that come from?
- Am I charitably minded?
- What does financial independence mean to me?
- What does it mean to be rich?
- What’s more important—how much money I have or what those dollars can do for me?
- Have I taken my money story and passed it along to my children? Is it serving me? Is it serving them?
These would be great questions to discuss together with your spouse as well. Understanding each other’s money story helps you to more closely align on financial goals. This doesn’t necessarily mean that everyone agrees on everything, but if there is a deeper understanding of issues and concerns surrounding money, it allows for more grace and, in many cases, creates new opportunities to live more fully before retirement.
Making Your Money Work for You
There is often a lot of fear tied to money. People tell themselves, “I’m never going to have enough. I’m never going to get there. I’m going to run out.” My goal is to take the fear out of money and empower people to enjoy it.
I believe that, at the end of the day, it’s not how much money you have in your bank account that matters but how you can make the dollars you do have work for you. That’s why at Foresight Wealth Management we are big advocates of alternatives. There are a lot of different places where you can make money outside of just stocks and bonds. For example, there’s private equity, real estate, and asset-backed lending, just to name a few. The key challenge in today’s environment is finding investment vehicles to generate yield because interest rates are so low. CDs and bonds hardly pay anything. Our goal is to help our clients find creative places where they can generate yield and grow their nest egg.
It fills my cup to have conversations with my clients that get to the root of their money issues or concerns and then finding solutions to address them. And there is nothing more satisfying than giving my clients peace of mind and the ability to live life to the fullest. I would love to do the same for you, so please call me at or visit foresightwealth.com to learn more.
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DISCLOSURE
Information presented should not be viewed as personalized investment advice. Always consult your financial professional regarding your specific situation. All investment strategies have the potential for profit or loss. Expressions of opinion reflect the judgment of the presenter and are subject to change depending on each client’s situation. Advisory services are offered through Foresight Wealth Management, LLC, a Registered Investment Advisor with the SEC. Foresight Wealth Management, LLC, only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission and does not imply that the advisor has achieved a particular level of skill or ability.
