keeping up with the joneses

The Abundance Conundrum

© Can Stock Photo / Thilien

People reaching retirement age these days have witnessed a huge evolution in how people live. Growing up, many never saw the inside of a restaurant except maybe once a year. Family road trips usually included a picnic basket with cheese or balony sandwiches. Larger families lived in smaller houses back then, so now each person has about double the living space.

Author Eric Barker notes that we probably have far more now than in the past, but we seem to be no happier. We instinctively believe that more will fix it: more money, more food, more things. The problem is the quest for what makes us feel good doesn’t have a finish line. “It’s a pie-eating contest and first prize is more pie.”

The pressure to fit in, to keep up with the neighbors is now compounded by social media, which generally shows the best version of everyone we know, and none of the problems. There have been many more pictures of expensive cars than of the tow trucks sometimes sent to repossess them. You see vacation photos from exotic places, but not the credit card bills which detail how they were financed.

Aggravating the situation, technology has given many the option of working all the time. Flexibility is nice, but in the olden days, you could leave your work at work and be engaged with your family when you were home. Now our work is in our pocket, so we have to make a decision: answer emails, or play with the kids or talk to neighbors or enjoy some other leisure.

Going with the flow is perhaps more costly than ever to our wealth and sense of wellbeing. Thinking about the fundamentals of our own happiness, pursuing our fondest ambitions in a mindful way, being thoughtful about how we spend our time: these might be the answer to the battle between “more” and “enough.”

Financial planning is at the root of a balanced approach to life and living. It begins with the attempt to define life on your terms, to learn your internal motivations, to clarify your understanding of success.

Clients, if you would like to talk about this or anything else, please email us or call.

Look Rich or Be Rich?

© Can Stock Photo / pressmaster

Some people have so much money, it doesn’t matter what they do with it. On the other hand, some don’t have any. Our work tends to be with those in between, those who need their money to work effectively. Clients, that’s where you and I live.

Many financially independent people we know faced the choice of a lifetime: they could look rich, or be rich. And they chose to be rich. The cost of impressing others is quite high when it manifests in expensive homes, vehicles, and conspicuous consumption.

The difference between a $250,000 home and a $500,000 one is not just $250,000. The recurring expenses connected with the more expensive home may include higher property taxes, larger utility bills, more interest expense, and greater maintenance costs. Those recurring expenses reduce room in the budget for accumulating wealth to live on in later life.

A recent article about $10,000 watches had the headline, “Affordable Watches That Will Make You Feel Like A Millionaire.” This seems funny to us. We delight in asking people whose invested wealth has reached the $1 million mark whether they identify as a millionaire now. Not one has answered ‘yes.’ So if a million dollars doesn’t make one feel like a millionaire, what chance does a $10,000 watch have in getting that done? (A large fraction of the millionaires I know wear $39 watches.)

The paradox is that those who strive to look rich may never accumulate much in the way of assets. Meanwhile, those who chose to be rich may eventually learn how to spend well. They can afford the vehicles that provide the most comfort, the homes that make daily life better, generosity to descendants or charities, and travel to bucket-list destinations.

The flaw in attempting to impress others is, we do not control what others think. We only control our own choices. Those everyday millionaires (and those on the way) in our acquaintance seem to have learned this early, and made the wise choice.

Clients, if you would like to talk about this or anything else, please email or call.

Goldilocks the Burglar

© Can Stock Photo / monkeybusiness

The story of Goldilocks might be a lesson in moderation, but it’s also a story of breaking and entering.

We prefer to find more reasonable and socially acceptable ways to get our needs met. We talk a lot about helping clients put words to their dreams, but dreams need not be lofty. Here are a few guidelines that have proven helpful.

“The right amount is best.” In her book Lagom, writer Niki Brantmark describes this Swedish principle of the same name. Not enough is not enough. Too much of a good thing can be a good thing, but often is not. The right amount is best.

Social comparison, or “keeping up with the Joneses” can corrode happiness or financial health, if we aren’t conscious of our emotions and purposeful about our responses and reactions. It helps to focus on our own needs, rather than what others have. (I’ve met the Jones, and they don’t care what you have anyway.)

When working on goals, it sometimes helps to define three outcomes: minimum acceptable levels, reasonable targets that feel within reach, and ‘stretch’ goals that require creative thinking and approaches to get to. This may help you be more aware of options and possibilities.

Clients, if you would like to talk about your goals or anything else, please email us or call.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.