I’m just wondering…

I read a great review of a finance-tracker app called “Personal Capital Money and Investing”“. Since I’m always looking for tools to recommend to those financial coaching clients who are interested, I read the reviews (great), and decided to download it and give it a try. so I gave it an email address, and the first thing it asked for was the name of my bank…and my account login and password. And that’s where I stopped. Any financial institution I deal with has security software and regulations about access – and while I’m sure having all my information at my fingertips in one place might be more convenient, I’m just old fashioned enough to wonder if a free app is the place to have it. Is that so yesterday?


The perfection complex

In the May issue of NY Magazine, there is an article which asks “Are You Suffering from Perfection Anxiety?” , which quotes an article by AA Gill in a recent Vanity Fair (I’d provide a link, but it doesn’t come up easily – too much traffic?). Though I assume the article is more than a bit tongue-in-cheek, it got me thinking about “comparanomics”(definition: having what someone ELSE has be the foundation for what YOU spend your time – and money – pursuing). As one art expert in the article points out: the return on a $60M piece of art is likely to be…below $60M – but doesn’t that assume it’s measured strictly in terms of $? What if the return was measured in impact: say the purchasers decided that the coast of installing complex security systems (or hire a manager or dedicated security person to watch over the painting) in their new LA home was more than they needed to pay – especially since they only intended to spend a month or so here and there in LA. So they decided to leave it in the museum where it resides – on the condition that they could close down the museum a few times a year for a select gathering of their closest friends and family – to get together, socialize and celebrate their great taste in art. So now, they have a beautiful painting, they have one less thing to worry about protecting, they will gain extra benefit (or at least studies show they have the potential to) and happiness by DOING something with the art instead of just HAVING it, and the museum will still have people flocking to see the art (in fact, attendance may rise because of the publicity). So: return = $ cost of art + impact? As they say in the MasterCard ad: “priceless”. How would that affect the perfection complex, I wonder?

How many “variables” do you control?

There’s a lot to read about financial advice, investing and retirement – and as I read yet another article this week about “planning for retirement”, in which the author was suggesting that advisors adopt a model long used by institutions to plan pension obligations (“how did that work out?” I hear some of you asking – for another article but THAT issue is one of inflow.) and articulated 18 points, I paused and wrote two lists “things you can control” and “things you can’t control”. And guess what? There are 5 things you can control (things like: having no plan, overspending, trapping yourself into the “illiquidity box”) and 13 things you can’t (interest rates, inflation, the market – not to mention the length of your life and whether you will have a catastrophic health event). So, given that there are almost 3x as many things you CAN’T control than the things you CAN control, and given that THAT list is relatively short, it seems there are two choices: 1. give up because the things out of your control are overwhelming OR 2. do what you can and leave the 13 uncontrollable chips to fall where they may. Maybe because I’m an eternal optimist, I’ll choose to take the short list: doesn’t mean I won’t get frustrated about the long list and, in the end, the plan won’t be perfect – but I’m willing to give it a shot….

Surviving – actually thriving – in our economy

On Friday, our guest on ‘Money In Your Life’ was Meredith Elliott Powell – and what a great conversation it was! The premise of our radio show has been that in the world of money and advice about money, the conversation has been pretty one sided for a long time – for lots of different reasons, but it just has. (pause here while you think about it: how many times have you questioned financial advice you’ve been given if it didn’t feel right to you? How many of you bought a bigger house than you because you were caught up in the frenzy of the housing boom? Now, take a deep breath, consciously relax your jaw or shoulders and read on.). Meredith was a breath of fresh air – urging us to shift our thinking and embrace the “pull” rather than “push” economy (depends on which side of the equation you are on, but, basically, “pull” opportunities your way instead of waiting for them to find you. “Pull” your best deals to you by asking. Give it a try.

Personal Finance

Recently, as the stock market has gyrated from a surprisingly up year last year into an early “correction”, I’ve been thinking about returns – and financial advisors – and it seems to me that we can (and need to) do the “advising” model better. A friend of mine has been attending a 6 week lecture series on personal wealth, and the group has heard from a financial planner, a tax attorney, an estate attorney, a stock broker and a cpa – all of whom are potential players on a personal financial team – and the information they’ve shared has, by and large, been really helpful for him as he seeks to increase his personal knowledge and make thoughtful choices. As he was reflecting on the course thus far, though, and doing the math (not complicated – simple addition) – he realized that if he hired each of these professionals at their stated rates, he would be paying an annual rate of 6% of his wealth – in fees. (I should say that he depends on this portfolio as his income source). “I’m just learning about this, but this is my perspective: I’m being told that over the long term, a conservative expectation for returns is 4-6% in this ‘new normal’ economy. If I’m paying these professionals 6% in fees, and I’m only making 4-6%, I’m going to be spending the principal so I can pay myself. Which means that if I have a budget of spending 6% of my portfolio annually, I need a return of at least 12% annually, or I’m behind the eightball before I start.” It’s true that he probably doesn’t have to hire ALL of these professionals at the same time for an annual fee, but can we understand how confused, upset, angry – you name the emotion – people get when they are trying to plan for their financial health – and end up paying for everyone else’s??? I don’t know what the perfect solution is (yet), but something’s gotta give – and support a healthier conversation – and solution.

“The come from needs to shift”

During this week’s episode of “Money In Your Life”, our conversation got us to the phrase “the ‘come-from’ needs to shift”. And that phrase encapsulated exactly what Brian (my co-host) and I and each of the guests we’ve had on the show since September has been talking about: when we shift where we each come from in thinking, acting, talking and being with money from reacting to or responding to external messages and “somebody else’s” definition of success, something cracks open and giving up “familiar discomfort” doesn’t sound as scary. Find a buddy or a coach – because this work is hard and, as a friend of mine says often “you shouldn’t go into your mind alone” – and see what happens when you shift your come from – over time.

Immunity to change

…what a great phrase this is. The work of Harvard Professors Kagan and Lahey on this topic is both thoughtful and helpful. How many times have you made a promise to yourself that “I’m going to _______” – whether it’s a New Year’s resolution, a promise right after you leave the doctor’s office or come home from a trip or catch your self once again doing something you know in your head is destructive or self-limiting, but momentarily it stops the chatter or makes you feel good or gives you a sense of relief. And that, right there, is it – “you know in your head…”. Our heads can get us in a lot of trouble – or not. Immunity to change is about REALLY listening to what that chatter is – without editing yourself and, most important – without judging. I was at a meeting last month and as one of the three participants rushed in late saying “I’m so sorry to be late, I hope…” – our natural response when we’ve kept people waiting, right? And she shared that one of her goals for 2014 was to be a better scheduler because she was always rushing from meeting to meeting. One suggestion? Schedule 15 minutes between meetings, reflect on the one you just had and shift gears to get ready to be in the next one. How does this relate to money? How many of you are aware of the story you carry around about money – and when was it written? Is it time to rewrite it? Part of becoming aware of an immunity to change is noticing where you ARE. As Lewis Carroll said “If you don’t know where you are going, any road will take you there.”