The best investors are also rich in another important resource: time. They know that spending habits matter, but it’s not just about investing our money. How do we get our time to pay us dividends? More on building this skill in this week’s video.
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Clients, the wealth you bring to the shop is meant for the long haul.
We often say that the grocery money doesn’t live in here. The car breaks down or the washing machine gives out? You don’t call us for that. Long-term money lives in long-term investments, aimed at long-term goals—the next stage of life, retirement, perhaps the needs of descendants, and so on.
But once all those different goals are on track, we’ve still got some choices to make. (It’s a nice problem to have, surely.)
As habits or hobbies or whole stages of life come and go, we might take a fresh look at our discretionary spending.
What if you started thinking about your legacy and impact as a regular part of your budget, now?
Starting a project like this is just like budgeting for any other financial goal. Just ask the big question today: what would you have to change in order to afford this new choice?
We don’t mean to make any of this prescriptive. After all, you are the one who must live your life—not us! But there might be a chance to unlock some exciting opportunities, if only we get a little more intentional or organized now. Who knows?
Clients, if you would like to talk about this or anything else, please email us or call.
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Our spending habits matter, but it’s not just about investing our money. How do we get our time to pay us dividends?
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Clients, when we say “plans” and “planning,” what exactly is it that we’re talking about? From Day 1, our conversations center on you: your goals, your concerns, and how your life and your money work together. So planning, we believe, includes any and all topics that affect your financial wellbeing.
Our planning services are included as part of our process working with clients. Some investment advisory shops do bill separately for time spent selling “Financial Plans,” so it bears mentioning that we do not.
Instead, we tend to use wide-ranging planning conversations throughout our relationship. They’re handy when we’re first meeting each other, and they give us useful talking points over time, like when we’re reconnecting at or in between our annual reviews.
Not every client will bring up the same topics or concerns, but generally, people’s questions tend to focus on some similar desires. Maybe some of these statements resonate with you:
These desires are not universal, and they’re not necessarily linear. Not everyone moves through them like one step to the next, and sometimes we loop back around to revisit them again and again. And they take some thoughtfulness to maintain.
But you might notice these four items do capture some trends and progressions. They cover a range of chapters in our lives—from getting started, to getting a grip on things, and then to getting what we want out of the whole deal. Once we know where we are in the process, it can be easier to get down to the details.
Consider some examples.
“I want to figure out how to organize my finances.” Does my monthly cash flow comfortably cover my outlays? Where does my time and money go right now? How is my job or career outlook? What are some good first steps for me given where I am?
“I want to feel like I’m financially secure, independent, or free.” Do I have what I need in terms of an emergency fund and a support network? What demands affect my cash flow now and in the near-future? What financial challenges and financial goals can I anticipate in the coming chapters of my life?
“I want to be able to support the life I want to live.” Am I living where I’d like to live? Working how I’d like to work? Enjoying what I’d like to enjoy? How do my saving, spending, and investing align with what I want now and what I want later?
“I want to be able to create the legacy I have in mind.” What’s on my heart? What estate or charitable considerations are on the horizon? What opportunities have presented themselves? What impact would I like to have?
Clients, our operation is continuing to grow, and we need to be able to serve you not only in the months and years ahead—but for the decades ahead! Your beneficiaries and the generations to come will be better served if we’re thinking about how this work persists beyond any one of us.
That’s why we’re taking the time here to try to define our terms.
It’s important that we’re on a common mission here. Financial planning prompts like these aren’t a script, and they aren’t something that will be “one-size-fits-all.” Instead, they give us a jumping off point. They give us somewhere to start from or begin again—together.
Are we due for a conversation? Call the shop or send us a message, anytime.
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The so-called “rich people” in my life don’t carry around big bags of money or wear monocles. One thing that sets them apart? How they spend. Our resources actually allow us to live more cheaply and avoid more pitfalls.
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You may know already: we generally advocate simplicity in most things. Once our basic needs are met, we’ve got some choices to make. So how do we keep things simple?
When it comes to budgeting, this takes the form of “paying yourself first.” You save and invest to meet your goals, and then spend the rest as you see fit. No need to track every nickel; you will get where you want to go so long as you’re getting yourself paid.
But it doesn’t hurt to also review your outlays in greater detail once in a while. Fixed expenses are those that cannot be changed in the short run: if you don’t pay the electric bill, the company will shut off your power. You have to pay the bills. Total up these kinds of items. You’ll need to know what sort of fixed expenses you can expect each month in order to figure out how much is discretionary—what’s left over for the things you want?
This exercise can be useful because it may point you to those expenses that are regular but are not fixed. For some, it might be a gym membership that doesn’t get used. It might be a streaming subscription for shows you don’t watch anymore. These services are just a few examples: there are plenty of things in life that we try out or that once made sense but no longer serve us.
And when we root these things out, it’s like giving yourself a raise!
We each have long-standing habits or hobbies whose costs we may not have considered for quite some time. Taking a fresh look at our spending gives us a chance to make intentional choices about how we live, going forward:
And the big question: what would you have to change in order to afford that new choice?
This isn’t necessarily “just” a budgeting question, because rather than shift your spending around, you might elect to invest more each month. All else being equal, investing more means you reach financial independence sooner. Access to options: that’s what we’re buying when we pay ourselves first.
We don’t mean to make any of this prescriptive. After all, you are the one who must live your life—not us! We just suggest that taking a step back to look at where our money goes, being intentional about how we spend, these are things that come naturally when we try to live life on purpose.
Clients, if you would like to talk about this or anything else, please email us or call.
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Numbers on a screen are never the whole story: how does your money move, and how does that align with what you’re trying to do in your life?
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At 228 Main, we like to think about the many ways one might be rich. The primary task here is to work to grow your buckets, especially those long-term buckets that may serve you across many years.
Many of our clients, however, are also rich in another precious resource: time.
Just as a company may pay dividends to shareholders, the best investors seem to have a knack for finding those investments of time that pay dividends. And paying attention to our time could mean big things for our financial goals and wellbeing, after all.
Take a closer look at a day or a week in your life and how the hours go by. Is there a set place or routine for those things that may seem to eat up “too much time,” like bills or errands or banking or emails?
Activities like these can really frazzle a person, but when we zoom out, a lot them of them shouldn’t come as a surprise. These are everyday, regular activities.
Laura Vanderkam’s book Off the Clock explores our many approaches to the time we have—the skillful and less skillful ways we spend it! She’s got a system for reviewing our time:
“When you do an activity, ask yourself two questions: Will I ever do this again? If so, is there some system I could develop or something I could do now that would make future instances faster or easier?”
The good news is that there are plenty of ways that small interventions—just one little step, now!—can pay time dividends for weeks, months, or years into the future.
Some of our favorites include automatic deductions: monthly payments to take care of any outstanding debt, investment contributions, and retirement contributions. (“Set it and forget it” is a phrase you might hear for this strategy, although we prefer a more mindful approach!)
We are also big fans of quarterly reviews. It’s roughly how often we adjust portfolios, but the passing of the seasons is a wonderful excuse to think about the state of our goals and the bigger vision.
What else can you attach to the schedule? Could you leave yourself notes for things you’d like to review on your birthday, at the new year, before or after tax season, the start or end of an academic year?
A company may divvy up its profits to splash them around to shareholders on a regular basis, but as individuals we too might find those ways to get our time to pay us back later. It just takes a little forethought now.
Clients, want to talk about this or anything else? Call or write, anytime.
Investing includes risks, including fluctuating prices and loss of principal.
Dividend payments are not guaranteed and may be reduced or eliminated at any time by the company.
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