Is it too late to say Happy New Year? I've been on a break from the newsletter for the last 90 days. With the holiday and some personal family matters, I've been on this glide path for a while. What is that glide path you may ask? Well, it is getting focused on those few things that matter most to me.
When I retired, I talked about focusing on fellowship, advocacy, and enterprise. Interestingly, while those might have been three topics I dreamed of spending my time on, the time I naturally allotted was not equally distributed. Spending more time with those I love and care about needed greater focus, and having the quiet time to focus on the enterprising features of my dreams needed more time than I had allotted. And advocacy, a place where I tend to naturally lean towards, was a wonderful place to be, yet I was still missing that elusive balance I was striving for.
So, for lots of reasons, I took a step back on this site, and for that, my sincere thanks for being here as I interleave these writings back into my new schedule.
Where to start? Why not talk about some thinking based on these pillars:
Enterprise:
Higher for Longer - I don't know about you, but I'm not seeing a reduction in interest rates anytime soon. See Apollo Chief Economist’s short post on why they believe rates will not cut rates in 2024. This has financial impacts on those who are carrying around debt, and for those who are not, we need to be collaborative, patient, and understanding, as there will be impacts on the longer-term economy because of this. Areas that come to mind include commercial real estate investors who are adding on interest to the back end of their debt terms, lenders who are protracting out loan terms, not-so-great balance sheet companies who have more debt they will refinance at higher terms, which will either be passed onto us as consumers, consultant/firms that will be resized, or a reduction in employees.
Anchoring - We all anchor onto something: the glory days of the past, the hope for a bright and prosperous future. It's hard to anchor on the here and now, in part because it changes so frequently and subtly that you really have to pay attention to know when your financial assumptions have to change too. Whether it is traveling home to see family, buying groceries to feed my family, inflation has been an unwanted companion to our family's life. Heck, I could have easily put Inflation under the "higher for longer" bucket as well.
Higher interest rates and inflation creates a malaise that is subtle and not so subtle.
Action To Consider: Take stock of your spending. It's not just you. We all have been going through this realization. At first, I was surprised to hear from people who rarely talk about money talk about the wrestle in the ring they have been experiencing as they try to figure out where all their cash is going. Different people are using different strategies to hold on to their cash, and so far, I have not seen any consistency in approaches. This really speaks to why personal finance is not scalable. What works for one person may not work for another. What is common is the wrestle in the ring to hold on to cash.
For me, I use Fidelity's Full View tool. It is E-Money scaled back and rebranded for Fidelity Retail Customers. I can easily see where dollars are going with a simple budget template, donut chart, and transaction details. For us, I take it a few steps further by personalizing the coding and downloading the content for a customized excel report that fits how we live our life.
Fellowship:
Gratitude and making time for family and friends is a recipe for greater peace, more love, and moments of joy. Life is pretty busy, and making time requires taking time to make time. Here is when planning for next week, next month, this summer, and the holiday season can be fun and allow you to be intentional about making time for your family and friends.
Actions to Consider: Find a day of the week where you can spend an hour planning out the next week. Find a weekend to plan out those short (or longer) getaways with your family and friends. Planning and researching takes time, so if this is important to you, be okay that it will take more time than you think. If you have a partner or spouse that does that for you -- give them a hug, look them deep in the eyes, and let them know how grateful you are they are in your life and how the work they do to create memories that will leave a fingerprint on future generations.
If you are overbooked, find some time over the next few weeks to review your values relative to where your time goes. Finding value alignment will help you say yes with ease and no with less guilt. I’ve done this more recently. It’s hard work but well worth recapturing your precious and non-renewable resource - your time.
Advocacy:
Today, March 1st, begins Women's History Month. What a great time to focus on Women & Wealth. Women have some really unique aspects that make wealth planning so critical. Women, generally, tend to live longer, have spent time outside the workforce, tend to live alone for periods of their later years, and tend to be the caregiver in their immediate family and extended family. Some women, not all, tend to be employed in fields that are not as financially lucrative, which could translate into a greater portion of their income needed for financial/retirement planning.
So, if you are a woman, understanding these potential factors and then planning for them can be the best love letter you can write to your future self. The 80 or 90-year-old you will be so proud of today-you that you thought of her often and took such good care of her.
Actions to Consider: What can you do for her right now? From easiest to harder:
Review Your Spending - We all have places we can tweak. If you ever said, "where is all my money going?" then you can probably tweak some spending and pile up some dollars to start investing in a high yield savings account to start. In March 2024, the market is at 5.1%; getting less than that is sharing unnecessarily your earning power with your financial institution.
Review Your Investment Fees - if you are already investing, great! However, take a look at the fees you are subtly paying. The Advisory Fees, Fund Fees, Investment Fees, etc. can eat away at most of the potential growth and ending values you could potentially have.
Review Your Dollars to Investment Glide Path - If you are one of the many savers that is part of the $6T in money market accounts, you are not alone. Money market rates over 5% won't last forever. If you have not spent time yet thinking about your relationship with money and what jobs you want to glide and assign to those money market dollars, consider taking a one-day retreat/local getaway to ponder the jobs you have for the money you have sitting in cash. Some of your money soldiers may not have a job to glide to after it is all said and done. They too want to be productive for your future self. “This is harder than looking at my spending?” you may say. Oh my goodness - Yes! It is easier to leave money sitting in an account than taking action. Fear, inertia, busyiness, are among the top reasons money just sits idly by. Schedule that meeting with yourself.
Source: Visualcapitalist.com
Review Your Income - Are you getting paid at market? Are your skills future-focused and marketable? Growing the top line may be hard at times, but being in high demand washes away a lot of those concerns.
Review Your Employer - if you are with a publicly traded company, this is easier than if you are in a private company. See if your company is truly growing (Revenue and Profits), and if they have a strong balance sheet with cash on the books and low to no debt or debt locked in with long-term low rates.
Can you see the full circle now from the top of this article? If your company has a lot of debt, it is nearly impossible to get to a place of greater wealth if your company is not growing more prosperous. Investing is also a circle - if your company is innovative and growing then it is attractive. Investors are attracted to attractive companies which expands multiples, drives earned media, and innovation drives new corporate and retail customers.
If your not with a growing company:
Consider if you can truly and actively help your company grow and create value.
Determine how you will be compensated for that growth.
If #1 or #2 are not an option, then reconcile the differences between your aspirations and the potential for your company. This will help you see what if anything you wish to do about it.
Books I've been Reading Via Audiobooks:
I love it when folks share books they have been reading. It's a great way for me to curate my Libby App library book list. To pass on what has been passed on to me, here are some books I've read over the last few months. I like to listen to books that weave together human behavior, finance, intrigue, and the darker side of success. It gives balance to the whole topic of finance and wealth.
Oh, you will find some unexpected people in at least one of these books. Actors, songstresses, heiress, etc. Who knew when I pick up the title.
Same As Ever - Morgan Housel
Billion Dollar Whale - Bradley Hope, Tom Wright
Elon Musk - Walter Isaacson Romney - McKay Coppins
Blue Ocean Strategy - W. Chan Kim, Renee Mauborgne
The Bond King - Mary Childs
What am I listening/reading now:
Clear Thinking - Shane Parrish
The Man Who Saved the Market - Gregory Zuckerman
There were other books...I started and stopped. Not every book is worth reading to the end.
I hope you will find some of these action steps helpful on your personal path to wealth. Schedule a little time for yourself.
These are just action steps that work for me. I call them: Tried and True Tools. Find what works for you.
Until next time.