Self-Awareness and Money

Self-Awareness and Money

I hope your fall season is going well and that you’re enjoying the cooler weather. Our newsletter topic this month might seem peculiar. What does money have to do with self-awareness, and self-awareness have to do with money? Quite a bit I’d say.

A Case Made

“Without knowledge of self there is no knowledge of God…without knowledge of God there is no knowledge of self.” Who said this? John Calvin, the great reformer! Now, we can take this quote out of context and too far by saying that introspection or self-awareness is more important than a knowledge of God. Calvin makes the case that these go together. We must see ourselves for who we truly are before a holy, righteous God. After true introspection should come humility.

But what I would also argue is that Calvin saw a place for knowledge of self. We often hear of self-forgetfulness – ignore our needs and only focus on others. But as I reflect on the life of Jesus, I can’t help but notice how many times he left the crowd to be alone. He recognized the times he needed to be alone with the Father, even though there were sick people to heal and lessons to be taught. Jesus had greater self knowledge and awareness than any other man who has walked this earth. He knew his calling, his mission, and his identity. And these impacted every decision he made.

And Money?

We all relate to money in different ways. Some of us never (or seldom) worry about it. Others think about it more often. And others are consumed by it. Where do you fall?

I would argue that first knowing how you personally relate to money is critical to making progress financially. If we know we’re prone to blow cash the minute it comes out of the ATM, then maybe that method is not best. Or perhaps it’s the opposite for you: cash gives you needed boundaries of when it’s gone, the spending stops. If it’s plastic, then spending continues.

We’re often asked by clients: Which budgeting system is best? We respond: “The one that you’ll actually do.” If a yellow pad and pencil keep you on track, then that’s best. If an excel spreadsheet, great. If an app, so be it! Ultimately, which system best helps you accomplish your goals?

What about investment account balances? TV financial pundits? Research online? Are these helpful for you, or do they create more stress? Perhaps you check your blood pressure next time you partake. Or maybe you already know the answer…you just don’t want to change. That’s okay for now. At least you know. But maybe change will come when “the pain of staying the same becomes greater than the pain of changing.” -Dr. Henry Cloud

Having self-awareness about your tendencies with money is critical.

A Helpful Tool

The Rivertree Team recently started the book The Road Back to You: An Enneagram Journey to Self-Discovery by Ian Cron and Suzanne Stabile. Whew! We have already had some good laughs as we’ve discussed our types and tendencies (and some occasional grunts as we read about the not so good parts of ourselves). The goal is that we know one another and ourselves better to create an even healthier work environment.

And at the spiritual level, considering what Brother Dave said to Ian, the author of this book: “Just remember, it’s only one tool to help you deepen your love for God and others….There are plenty of others. What’s important is the more you and Anne grow in self-knowledge, the more you’ll become aware of your need for God’s grace. Not to mention, you’ll have more compassion for yourselves and other people.”

What used to frustrate us about ourselves and one another can hopefully be replaced with compassion…and some friendly chuckles. 

Now What

Have you taken this journey before? If so, has it been helpful? If you haven’t taken this journey, I’d encourage you to do so. I am confident you’ll find it worthwhile.

*For financial planning clients of Rivertree Financial Planning: Please contact us as soon as possible if you have had any changes in circumstances, objectives, goals or risk tolerance.

A Counterintuitive Freedom

A Counterintuitive Freedom

I hope you are having a good summer. I always enjoy the 4th of July holiday. I anticipate good food, good fellowship, and of course, some fireworks!

Before I continue, I’d like to pause and thank those who have served and fought for our country’s freedom. From the bottom of our hearts, thank you! Thank you to those who are serving now and have served in the past. I am certainly guilty of taking this freedom for granted many times, which is why I’m thankful for holidays and special times as these, when we honor those who have served.

The topic of freedom was discussed in our last Rivertree team meeting. Specifically, we discussed what freedom looked like in regards to finances. We could have gone many directions here: budgeting, freedom from debt, retirement nest egg, etc. But our discussion quickly went into a different direction.

Children

Many of us have children, grandchildren, or children that we may not be related to but consider our own. What a blessing children can be! And oh, what a challenge they can be…

Children need us. It feels good to be needed. And sometimes, it feels good to just be alone. Both are good and healthy.

But something happens to all children. It’s unavoidable. They grow up! Yes, I’m stating the obvious here, but humor me and keep reading.

Children grow physically. They grow emotionally. Hopefully for many of us, they grow spiritually.

But here’s my question: Are they growing into adults? I’m not talking about age of adulthood per your State’s law (FYI it’s age 21 for Mississippi, not 18).

Adults

What am I talking about in regards to adults? A responsible, contributor to society and at the core, a desire to be an adult.

But what happens? It doesn’t always go this way. Children rebel. They leave home before they’re ready. They denounce the wisdom they’ve learned through their early years. They hurt the ones who love them the most.

It’s devastating. What went wrong? Is it our fault as parents? I’d argue for most of us the answer is, “No.” It’s not your fault.

The Counterintuitive Freedom

Thankfully, we find the story of the prodigal son in Luke 15 of the Bible. The younger son requested an early inheritance (which is seldom a blessing to a child I might add). The son lived recklessly, wasted his money, and found himself feeding pigs (and even desiring the pigs’ food!).

At this point, we learn that the son “came to his senses.” He finally reached his point of true brokenness and need.

So, where’s the counterintuitive freedom I keep referencing? It’s this – Allowing our children to reach the place of brokenness rather than rescuing them. We “rescue” by giving them money. We rescue by bailing them out (including from jail). We rescue by not allowing them to truly experience the natural consequences of poor decisions and behavior.

“But what about mercy and grace, Scott?” I hear ya. I treasure mercy and grace. I’ve received it time and time again, from humans and The Lord Almighty.

When they’re children, we often do extend mercy and grace. We may discipline using other consequences so they don’t have to experience the natural consequence (and tragedy) of crossing the road before looking or playing with (or in) the fire.

But our topic today is adults, not children. For adults, it’s time that they experience natural consequences. It’s what the father did for his prodigal son. He allowed him to squander his wealth and live with pigs. Don’t you think this father had the ability to find his son and go rescue him? We don’t find this answer explicit in Scripture, but I think we can infer that the father did have this ability. But in his wisdom, he waited.

As a father, I sure wish Scripture gave us more information about what the father did and what he felt while he waited. How long did it take? Was he angry with his son, and even God? Did he grieve? Did he weep? Did he lose faith? We just don’t know.

Know this: There is counterintuitive freedom in allowing our adult children to experience the natural consequences of their decisions and behaviors, even if we have the means and abilities to “help.”

Love your adult children. Pray for them. Share the burden with God, and others. Give them the space to come to their senses.

Don’t lose hope. And when you feel like you have, God is big enough to listen and meet you where you are.

(Recommendation: I’m 70 pages into the book “Reaching Your Prodigal” by Phil Waldrep. Although I have more to read, I feel confident in saying that the author gets it. It’s answering the questions: What did I do wrong, and what can I do now?)

*For financial planning clients of Rivertree Financial Planning: Please contact us as soon as possible if you have had any changes in circumstances, objectives, goals or risk tolerance.

When Things Don’t Go as Planned

When Things Don’t Go as Planned

Ever had a plan not go as expected? Yeah, me too. In fact, my family and I are living this reality right now.

After twelve years of being in the same house, we decided for several reasons that it was time to make a move. So, last fall we starting taking steps to get our house ready to sell. After decluttering, painting, and finally fixing those pesky issues we’ve been ignoring for months (okay, maybe years), we listed our house for sale. And yes, we then began to love our house more than ever! That’s how it goes, right?

We still decided to move forward with selling our house. Our house sold quicker than expected. So now what? Well, things haven’t gone as planned.

The Plan

We had a plan: Sell our house then quickly (and conveniently) move into the next house we’ll love for another twelve years at least. Many of us have a plan, right? The infamous boxer Mike Tyson had something to say about this: “Everyone has a plan ‘till they get punched in the mouth.” Pretty straightforward, you think?

I’m a planner by personality…and trade. Heck, “planning” is in our business name. It’s what we do! Does that mean we develop the perfect plans without a hitch? Obviously, no. We often say the only 100% guarantee is that the financial plan will not go 100% as planned. Expect the unexpected: Family illness or premature death, job loss, market under-performance, etc. These are all things we plan for but don’t know exactly how these things will look for each client.

So, does that mean don’t plan at all? I’d say not.

The Response

How do you handle a plan gone awry? I’ll be honest (otherwise, my wife will call me out). I generally don’t handle it well. I complain. I stonewall. I sulk. Just when I get irritated reading and hearing about the Israelites wandering after being freed from slavery, I realize – I. am. them.

So, what might be a better response? Perhaps focusing on the things we can control: Voicing our frustration and anger in a healthy way; being thankful that we are not in control; trusting that there is a better plan ahead…much better than my own.

The Peace

“For I know the plans I have for you, declares the Lord, plans for welfare[b] and not for evil, to give you a future and a hope. 12 Then you will call upon me and come and pray to me, and I will hear you. 13 You will seek me and find me, when you seek me with all your heart. 14 I will be found by you, declares the Lord, and I will restore your fortunes and gather you from all the nations and all the places where I have driven you, declares the Lord, and I will bring you back to the place from which I sent you into exile.”

There is a plan for each and every one of us. We just don’t know (and won’t know) what it fully is on this side of eternity.

What can we do? Find peace in the fact that we are not in control. Rest easy that there is a plan for good, not harm, for those that trust in Him, our heavenly Father.

So, how am I now handling this time of uncertainty with housing? Honestly, I’m finding peace. We’re calling it a “family adventure!” The kids are onboard. Who doesn’t want adventure! (Well, me, sometimes…but ready or not, this one has begun).

If you’re looking for a financial professional to partner with on your next adventure, we’re on-board. Give us a call.

Finding a Financial Mentor

Finding a Financial Mentor

I was challenged this morning by a pastor and friend who spoke to a group of fathers. The question initially posed was this: “What do I most need today in regards to decisions?” Answer: “Someone ahead of me, and someone behind me.” In other words, we were challenged to have a mentor and mentee in our lives. We briefly journeyed through the life of Luke in the Bible. Luke traveled with Paul. Paul was ahead of Luke. Luke also had Theophilus in his life who he mentored.

When we need counsel, we so often go to our peers who are most likely facing the same struggles (and making the same mistakes). Don’t get me wrong – I do think it’s helpful to share our struggles and burdens with peers; but are our peers best for counsel? Or could it be wiser to receive counsel from someone ahead of us in life and who has already faced the struggles? My pastor friend would argue the latter. How would this look for financial decisions?

Why can taking this step be hard for us? I’d say that simply asking for help doesn’t come naturally to us. We might be ashamed of our circumstances or situation. We might think that no one else gets it. We might think there’s just no better way than what we’ve come up with ourselves. As a person who struggles with trying to think myself through situations, I have come to learn that sharing and processing what I’m going through with others is extremely helpful; and that sharing with someone who is ahead of me is even better.

Think about financial decisions that you have made during your lifetime – the good, the bad, the ugly. How about buying your first house? First car? First timeshare (uh oh…). What did you learn? Now rewind: If you would have received counsel from someone at least ten years ahead of you, do you think the bad/ugly decisions could have been avoided? Probably so.

What about your peers? Most likely they are signing up for the same college credit card only to get a free t-shirt. Then yes, that “free” t-shirt ends up costing you hundreds to thousands of dollars in interest for the tv or vacation you really couldn’t afford. What if you had sought counsel from someone at least 10 years ahead of you who showed financial responsibility? Do you think that they would have advised you differently than your peers? Most likely so.

What about us – financial planners? We are experts in this field, but does that mean we don’t need to seek financial counsel from someone ahead of us? I have been challenged to seek out a financial mentor. Just as you, we’ve found that it’s 100% impossible to check all emotions at the door when it comes to our own financial decisions. We need sound guidance – the same guidance we give to our clients.

As we seek out a mentor, we’re also challenged to seek out someone behind us that we can help. How do we find these people? Pray that the Lord would bring these people into your life. Open your eyes to those already around you. They may not be far away.

In closing, I’ll share wise counsel that the speaker received from someone ahead of him during a critical time in his life: “Make decisions today that you will least regret in ten years.” That’s good. What’s this all about? Priorities.

So now what? Make that call. Send that text or email. Take the risk. I just did.

Investment Lessons from “The Tortoise and the Hare”

Investment Lessons from “The Tortoise and the Hare”

“A Hare was making fun of the Tortoise one day for being slow.

‘Do you ever get anywhere?’ he asked with a mocking laugh.

‘Yes,’ replied the Tortoise, ‘and I get there sooner than you think. I’ll run you a race and prove it.’”

So the story of “The Hare and the Tortoise” begins…

We’ve all heard it. We’ve all read it (hopefully). What the heck does it have to do with investing? Well, quite a lot, I’d argue.

How did you feel during the time period of October through December last year (2018) as it relates to your investments? Confident? Opportunistic? Concerned? Scared? Fearful?

I would say for most of you, particularly those in or close to the retirement years, that the last three words better describe how you felt. And if so, I don’t blame you. When media networks exclaim that “the sky is falling” and “to take cover,” it’s hard to ignore these statements. We’re human. Our left-side logic part of the brain doesn’t usually rule in these scenarios. The right-side emotional part of the brain often rules; and if acted upon, the effects can be devastating.

If you decided to cash-in at the end of 2018, you would have most likely locked-in investment losses for the year depending on your investment allocations. The Hare certainly would have advised that you cash-in.

Fast forward to February 22, 2019. Below are year-to-date investment returns for a several indices:

S&P 500: +11.3%

Dow Jones Industrial: +11.6%

MSCI ACWI: +10.1%

MSCI EAFE: +8.6%

Not too bad of returns for just 1 ½ months of the year. Of course, we may not finish the year within these return ranges, but the point is made: Had you let fear reign in October through December of last year, you would have missed the upside we’ve received so far this year.

The Tortoise would have capitalized on these investment returns, because “slow and steady wins the race.” The Hare? Perhaps he cashed-in last December, took a nap, and is still waiting for the “right time” to invest again (i.e. buy-in when the price is much higher).

We often say to clients in our office that we sure wish investment returns were these pretty little stairsteps that only went up and never down. Unfortunately, that’s not how long-term investing works. You have to take the good years, and the not so good years. Research continually shows this type of investing to give you the highest probability of achieving your investment goals.

We are sympathetic to our clients when the market volatility occurs. We won’t shame you for feeling the way you do. We will listen. And we will revisit your financial plan that we prepared together and see where we are. This strategy brings us back to the long view. This strategy has proven to be helpful.

The story ends here: “The Tortoise meanwhile kept going slowly but steadily, and, after a time, passed the place where the Hare was sleeping. But the Hare slept on very peacefully; and when at last he did wake up, the Tortoise was near the goal. The Hare now ran his swiftest, but he could not overtake the Tortoise in time.”

As shared by a billionaire investor to my old boss Dave Ramsey: “Every time I read this story to my grandkids, the Tortoise wins the race.”

We are here to run (or walk) the race alongside you.

For financial planning clients of Rivertree Financial Planning: Please contact us as soon as possible if you have had any changes in circumstances, objectives, goals or risk tolerance.

Diets and Money – Quite the Pair

Diets and Money – Quite the Pair

You may have noticed (or not) that we took a two-month sabbatical from the Rivertree blog. We take advantage of the holiday season to plan, regroup and recharge for the new year. We are excited about 2019 and hope you are as well.

On a personal note, I am doing something I have never done before – a restricted diet. What exactly is a “restricted” diet? Well, prior to January 1st of this year I couldn’t have told you. But as of this writing, I’m now on day 29 of 30 and have learned quite a few things about food I never knew.

In the simplest terms, a restrictive diet is saying “no” to food groups that could potentially be harmful to your body. After the 30 days, you slowly re-introduce excluded food groups and see how it makes you feel. Sound like the Whole30 elimination diet? Well, it is.

My motivation for this diet was not to lose weight but to see how food was impacting my overall health. To say this diet has been enlightening would be an understatement. All my aches and ailments haven’t been cured, but I have certainly seen the benefits in eating healthier, wholesome foods.

So, what does dieting have to do with money? Well, quite a bit, I’d argue.

When I ran into Books-a-Million on January 1st, guess which books greeted me immediately at the door? You got it – money and dieting. Dave Ramsey, Suze Orman, Tony Robbins, Keto, Paleo, Plant Paradox, and Whole30 all shared a nice, wooden table that you couldn’t miss upon entry. I had settled on Whole30 prior to arriving, but I couldn’t help but thumb through each book on the table.

Then it hit me: What do we often say to our clients and seminar attendees as we discuss budgeting/cash flow planning? Give the system we teach a try. If it doesn’t work, you can always go back to your old system!

I was dreading saying “no” for the first time to many foods I love. But knowing that I could go back to my “old system” in just 30 days gave me what I needed, expecting that I wouldn’t want to go back completely.

Consider this quote about change:

““We change our behavior when the pain of staying the same becomes greater than the pain of changing. Consequences give us the pain that motivates us to change.

― Dr. Henry Cloud & Dr. John Townsend

Does this quote resonate with you? What are consequences of poor money habits or diets that might motivate you to change? Often, it’s a serious health diagnosis, high-balance credit card statement, overspending in retirement, or even bankruptcy.

Don’t let it come to these consequences. Start the process of change now. Dr. Cloud also says that change comes this way: Grace + Truth + Time = Change.

We hope 2019 is a great year of healthy change for you. If you need help or counsel to begin this journey, please don’t hesitate to contact us. We’d love to help.

 

For financial planning clients of Rivertree Financial Planning: Please contact us as soon as possible if you have had any changes in circumstances, objectives, goals or risk tolerance.