MONEY matters

Over the years, I’ve heard the same concerns again and again by people who are dipping their toes into the financial planning waters for the first time. As when I started Spiritus Financial nine years ago, my aim continues to be on financial education and empowerment, not on selling. The more you learn about money – the more successful you’ll be financially. So here they are, the five most common myths I’ve encountered in my financial planning practice.

1) High allocations to bonds, CD’s and other fixed income investments will reduce risk

I suppose that depends on how one defines risk. I define it as running out of money before you run out of life. If a major allocation to fixed income will produce returns that virtually assure you of depleting your portfolio in this lifetime, how can one define that as a low-risk portfolio?

Adding the appropriate allocation to equities may create more fluctuation, but it could reduce the risk of running out of money. Before constructing an investment portfolio, one must not only measure 'risk tolerance,' but the return necessary to achieve their goals.

I used to think it was mostly a west coast thing. What I’m referring to is the rapidly growing number of couples that are putting quality of life ahead of their standard of living - those who are downsizing and simplifying. In many cases, the men are encouraging and supporting their wife/life partner to be the breadwinner in the family, while they often stay at home to care for the kids and run the household, or work from home part-time.

Here in the San Francisco Bay Area, where the culture very much encourages self-empowerment, this trend is exploding. There are classes and workshops that focus and teach women how they can best cope and support the men in their lives that are (and this was the wonderfully delicious euphemistic term used to market an upcoming workshop), under-earners.

It’s a Leap of Faith

From my vantage point as a holistic financial planner, I often meet the men that have voluntarily simplified their lives. Many describe making the change as a leap of faith. And for full disclosure, when I meet with couples where this idea or concept is on the table, I do everything in my power to see how this can work and make it happen for them.

When I meet people that truly desire to reinvent themselves, but the only major obstacle standing in the way is money - I can’t wait to get started on a financial plan with them. Because my first priority is having my clients be successful, having a personal financial plan in place is the only way to proceed.

Transition to Success

Of course, talking about this type of personal transformation, I’d be remiss if I didn’t mention the book Your Money or Your Life which very often provides the catalyst and self-confidence necessary to make major life changes. It’s when you begin to challenge all the core assumptions in your life, especially the ones about how much you ‘should’ make or the type of work you ‘should’ be doing that life really gets interesting.

The vast majority of men I meet that are contemplating this downsizing and simplifying life choice are currently in high stress, high income careers or jobs that feel more like they’re making a ‘dying’ instead of making a ‘living’. Many guys are literally just burned out from striving and never arriving as every time they were close to reaching the finish line, someone moved the goalpost yet again. Men making this downshift in terms of career change risk the wrath of not only society, since this is still very much out of the norm, but often friends and extended family make their opinions of your choice that much more of a challenge.

Women Leading From the Heart

Swimming upstream is much more challenging than going with the flow. Men that begin reflecting on their life choices often notice the creative juices really start bubbling to the surface.  They may feel empowered and inspired to “quit their day job”, they might take personal mini sabbaticals in order to regroup or rest, they often reinvent themselves by taking a gig that’s low stress and easy on the mind and soul.

But we still live with sexism so with these unorthodox choices comes the dubious distinction of possibly being dubbed lazy, under-earner, girlie men, slacker or a poor provider for the family. But down the road, when the investment made in yourself and your family by taking some time off to just slow down enough so you could think clearly manifests into a happier, healthier and more prosperous you, it’s then that all the naysayers will tell you how smart a move that was back then to take some time off.

For all the men I have helped and encouraged to make this move, the X factor that has made the difference between a successful or unsuccessful reinvention is the unconditional love they have received from their wife/life partner during this transition.

It’s what teamwork is all about. A wife helps her partner to become a happier man, him becoming happier helps her love him even more. The more love, the more abundance they attract into their lives, and on and on it goes…

Mark Twain said it best: “Twenty years from now you will be more disappointed by the things that you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. “Explore. Dream. Discover.”


Photo by Mr.T in DC

Talk with any financial advisor about money management, investment strategies, financial planning, you name it, and unless you’ve harbored a secret desire to become a financial advisor yourself, sooner rather than later, your eyes will glaze over and next thing you know you’re thinking about the wood-fired pizza you’re ordering for dinner tonight.

Last week I met with a prospective client that’s an amazingly talented and successful artist with a studio in Bolinas in West Marin County. Lisa (not her real name) is recently widowed after a very long and loving marriage. Her husband was a prominent attorney in San Francisco and handled nearly every aspect of their money management and investments.

Trent from The Simple Dollar has written a post called Robinson Crusoe and Our Journey which I had to share with you. This post inspired me to re-read Daniel Defoe’s classic book Robinson Crusoe – so right off the bat, thanks Trent, for the reminder of this not-so-childhood classic.

Trent says the book struck a chord because of his recent journey which appeared to have been about money, but was so much more, in his words, “rethinking what’s actually important to me.” So often this journey is the springboard to discovering what one's relationship with money really is. As a holistic financial planner, I constantly question clients on what it is they absolutely need, what their values are, and as Trent mentions, what is actually important to them.

The best investment you can make this year is an investment in your physical well-being, your health. As life gets busier and more demanding, taking care of your mind, body and spirit often gets put on the back burner. Yet health must always come first. There is absolutely nothing more important or vital than your health.  

Health is wealth.

When it comes to achieving financial success in your life, one of your most valuable assets is your ability and capacity to make clear and decisive financial decisions. Procrastination, the opposite of decision, is by far the most challenging hurdle to overcome if you’re to reach your short as well as long-range financial goals.

Reaching Decisions Promptly

Another day, another 300 points or so the stock market drops. As we listen to hourly reports about the growing global financial crisis and read the daily columns about the huge debts we face as a nation, it’s challenging to stay calm in the midst of all this anxiety provoking news. One strategy to cope in times of high anxiety is to avoid listening to the news and not watching the stock market ticker on an hourly basis. But there are other self-care strategies that can help us stay centered, lower our stress and improve our outlook, even in tough times.

The first strategy is to remember to breathe. Breathing equals life and it’s one of the words that define the Latin word - Spiritus. We breathe all the time, of course, but probably not as fully or consciously as we should. Take a few minutes every day to sit in a quiet, comfortable place, close your eyes and take several long, deep breaths way down in your belly. Yawn, sigh, or let out any other sounds you’ve been holding inside. A session of mindful breathing will slow down your heart rate, increase the oxygen to every cell in your body and improve your mood. It’s a simple but powerful tool. And it feels so good you could easily make it a habit!