“Money never made a man happy yet, nor will it. The more a man has, the more he wants. Instead of filling a vacuum, it makes one.” –Benjamin Franklin
What is it that you want in life? In my years of financial planning, I have yet to come across the client who expressed a goal of having enough money to do a Scrooge McDuck type dive into their piles of money. To be honest, I probably wouldn’t work with them if I did. Money is just a means to an end. What is it that you truly want? For most of the people it’s not the money they want but the control that it can give them to determine their own fate.
What is it that you want out of life?
I have friends and clients who want to retire and play guitar on a beach in their 50’s, they want to leave their high paying corporate job in their 40’s and do travel nursing, they want to sell their business and work for a charity they believe in. Some want to work in their business until they die or just can no longer physically show up. Everybody has a different goal in life, and this is just a sample of the infinite number of goals people have, these are just the long-term ones.
People have short-term goals as well. Some want to have a bigger house, some want to pare down, some want to pay for their kid’s education so they don’t have loans, and some just want to be able to travel to the destination of their choosing. People, for the most part, crave what money can get them, not the money itself.
People often fail to adequately financially plan because planning, they believe, means telling themselves no. If they plan, they will see all the things they can’t spend their money on. In reality, good planning is all about saying, yes. Yes, to the things that are really important.
If you like lattes every day, spend on lattes. If you love to travel, spend freely on travel. If you really always wanted that BMW, buy the BMW. Just know that you will have to prioritize. You need to think about and identify what truly inspires you, motivates you, or makes you happy.
Good financial planning may allow you to spend liberally in the areas that are IMPORTANT. Unless you are Jeff Bezos you can’t spend on everything. You need to think about what it is that makes you happy and/or what is important to you. Don’t let the inertia of spending take control of you.
Whether someone works with a professional or they do it themselves, there is often a great sense of freedom that comes over people when they identify what truly inspires them and live in accordance with those values. I am currently working with a client who has deeply held religious beliefs and wants to make sure their investments are in alignment with those values. These types of investments generally come with higher fees, and that is ok. They understand that and the planning just means they will have to save a little more to overcome the cost. The great thing is that they now know their investments are in better alignment with their values. They have control!
My wife and I bought a multi-unit building about 18 months ago. It was really important to my wife, and by proxy, important to me, that we have something that was ours. I will save my “starter homes are a bad idea” post for another time. We decided on something we could eventually keep as an investment. It took us 16 months of home shopping, 7 lost bids (6 of which were over asking price), several cover letters for our bids, a few sleepless nights, and some tears before we found a place that we call home today.
It has worked out spectacularly so far. It would not have been possible without a lot of planning on our part from a time and money perspective. We knew what we wanted, didn’t accept anything less, and stuck to our stated goals. I will tell you, we questioned our approach a few times, but our real estate professional helped a lot in addition to knowing down deep what the correct approach was. In addition, the way we financed and planned will allow us to buy our “forever” home somewhere between 2021 & 2023.
I relate that story because proper planning gave us control to make the best decision for us. My wife and I own one car, a 2013 Honda Accord with almost 100k miles on it, we don’t buy expensive clothes, outside of my Allen Edmonds shoe habit, and we don’t wear expensive jewelry.
We do that because we want control of our future and the future for our children. We do that because we don’t care about cars, clothes, or jewelry. We do love food, value experiences, our health, and adore our son. We spend unreservedly on those areas of our life. We don’t care about the money we save by having one old car. We care that we get to spend on what we care about today and in the future. Planning can do that. It’s not the money you want, it’s the control you can have in your life by having control of your money.