It’s “Back To School” season!

My wife is a Kindergarten teacher and I am a numbers/planning geek. It’s inevitable, every year I find myself entertaining my curiosity and projecting future college costs for the incoming kindergarten class (that’s what everyone thinks about in their spare time, right?).

So…what will college cost for the Class of 2031?

To start, the average In-State Tuition & Fees for a Public Four-Year Institution is currently $9,970/year (or $39,880 for four years). If college costs continue to increase at its current average of 5% per year, the total four-year college price tag for the Class of 2031 will eventually double to $81,030 (or $55,676 in today’s dollars).

Either way you look at it, in future dollars or today’s dollars, those are sobering numbers. Will the rate of tuition increase ever slow down? I’m inclined to think it has to at some point, but predicting when is impossible. Will the cost of a college education discourage the pursuit of a college education? Not likely…but it may require better planning and more conversations about matching expected college costs/debt to expected post-graduate income.

With that, here are the stories that caught my eye this week:

MONEY: Some Thoughts on Investing in Real Estate (A Wealth of Common Sense)

Investing in real estate is not for everyone and, as with any investment, it carries risk. It’s important to know what those risks are and if you’re willing to accept those risks. The author poses questions you should ask yourself before attempting to enter the real estate investment world.

LIFE: This Is About the Thing You Want to Do Most but Won’t Talk About (NY Times)

You have it. I have it. We all have it, but many of us are afraid to talk about it. Some clients freely talk about it, and yet others (mostly us men) get close to talking about the “thing”, only to retract and revert to the boilerplate goal discussions. Talk about it. Or write about it. Just do something to acknowledge it and give it a chance to grow.

KENTUCKY PENSIONS: 

Kentucky Supreme Court to hear pension reform lawsuit in September (Pensions & Investments)

Kentucky Teachers’ Pension Calculator (Pivot Point Wealth)

Imagine an iceberg. What do you see? A large chunk of white ice floating in the ocean, right?

I was reminded of the Iceberg Analogy this week – we focus on the 10% above water because that’s what we see, but 90% of the iceberg lies below the water keeping it afloat.

Financial planning is more than comparing and picking the “best” investments. While that may be the “exciting” part to focus on – it’s the 10%. In reality, 90% of financial success and building (and sustaining) wealth is behavioral – setting good habits and having the faith, patience, & discipline to stay the course when panic or euphoria arises.

(h/t to Simple Wealth, Inevitable Wealth by Nick Murray).

With that, here are the stories that caught my eye this week:

MONEY: Financial Planning For The Person Who Has Everything (Forbes)
If you woke up tomorrow with no possessions but the clothes on your back AND a bag full of money (equal to your net worth), what would you do? Do you start rebuilding the life you have now by buying the same house and living in the same town? What would you change – where you live, what you do, how much you save, how much stuff you own? Until we truly take the time to explore our response to these questions, the external forces around us will continue to have a strong pull on the direction of our money, our lives, and our dreams.

LIFE: Nudge, not sludge (Science Magazine)
Life is complicated. There are too many choices to be made in the course of a given day. Overwhelmed by the number of choices, sometimes we make the choice to do nothing, instead of choosing. “Nudges” exist to make decision-making less of an overwhelming task and help push us in the right direction to allow us to make better choices. Sludges, however, exist to discourage behavior that is in a person’s best interest, such as the endless amount of steps involved in claiming a rebate. Use the nudges, beware of the sludges.

Be honest. No judgment here. What is the first thing you did when you opened this email? Did you immediately start reading this paragraph…or did you, first, scroll to the end to see how long the email is and, upon realizing that the email wasn’t insanely long, you then began reading?

I am a scroll-to-the-end-first reader. It’s an involuntary reflex for me at this point. I want to know what I’m committing to before I start. If I start after knowing where the end lies, I’m committed to the end, short or long. If I start reading without first seeing the end, I’m likely to bail as soon as my interest starts to fade.

This behavioral tendency applies to savings and investing habits too. There’s a subset of people out there who are inherent savers (I like to call them, “Forrest Gump-ers”) that will save and invest without hesitation or reservation for an undetermined amount of time and with no particular end goal in mind (“They just felt like saving”). Then, there’s the rest of us, the majority. We need help, a push, a nudge to get started and we sure as heck want to know how and when we’ll get a benefit from it (the “Couch to $5k-ers”)…because, with no plan or end goal in mind, we’ll take the path of least resistance, plant ourselves right back on that couch and stop saving when given the chance.

Knowing where you are today + Knowing you where you want to go = Increased likelihood of getting the outcome you desire

Most people have a solid understanding of where they stand today. Fewer have an idea of where they want to go.

Give yourself a nudge. Take a peek at the end and know where you’re going before you start.

With that, here are the stories that caught my eye this week:

MONEY: 10 Money Revelations From Being a Parent (A Wealth of Common Sense)
Being a parent is tough. It’s a fast-paced, on-the-job training in prioritization and a constant battle of trying to find the right balance. The balance between providing support without spoiling; planning for the future but still living in the now; giving an inch without giving a mile. This article is a good reminder for all fellow parents out there that the struggle is real. We’re all trying to find the balance that works for us today, and learning how to adapt when it the balance shifts tomorrow.

Have you ever felt like the person riding a unicycle…while balancing a stack of plates on top of your head…while also juggling a set bowling pins…and then someone tries to toss you a basket of eggs? No? Just me???

Maybe you’ve noticed (…or maybe you haven’t) but after six months of Weekend Pivot Points going out consistently every Friday, it abruptly went on a nearly two-month hiatus. Why? I was the guy on the unicycle trying to do everything at once.

Sometimes my appetite can be bigger than my stomach. So, after taking a step back and seeing how ridiculous my balancing act looked, I hit “Pause” on some non-essential parts of work and life…hence, the weekly email absence.

Here’s what I learned from the experience:

• everyone has a capacity to their To-Do List
• it’s easy to overestimate the efficiency with which you can juggle the tasks on the list
• a one-in, one-out policy for items that can be controlled is a helpful rule to prevent over-capacity
• schedule time monthly to take a step back, self-reflect, and adjust before capacity is reached
• not all items on the To-Do List carry equal weight and significance
• prioritizing tasks by urgency and importance can be helpful in deciding what needs to be juggled and what doesn’t (s/o to @jeremywalter for this tip…even though it took me over half a year to implement)
• keep one hand free in case life decides to unexpectedly toss you a basket of eggs

Starting next week, the weekly email will refocus to start highlighting specific money and finance-related topics (and the occasional self-deprecating life lesson learned by yours truly). With Employer Benefit Open Enrollment season just around the corner for many, I’ll be highlighting several common employer benefits in an effort to make the open enrollment process a little bit less stressful.

With that, here are the stories that caught my eye this week:

MONEY: The cost of childcare is driving Americans away from parenthood (QZ.com)
While I think the article’s title is a bit extreme, I do think the underlying issue that it highlights is a valid concern for most young families. The cost of childcare (avg. $6,105/year/child under 4 in KY) has become an increasingly important consideration and planning point when deciding to start or grow a family. Utilizing planning tools, like a Dependent Care FSA, can be a great way to help offset some of this burden.

LIFE: Hope Deferred Makes the Heart Sick (Forbes)
“Hope deferred makes the heart sick, but a longing fulfilled is a tree of life (10th Century B.C. Solomonic Proverb).” Is saving for retirement important? Yes. Is saving for retirement at the expense of the memories gained from a long-desired family road trip out West or trip to Europe before the kids have left the nest? No. Only when our “longings” are first identified and prioritized can we find the balance between the delayed gratification of planning for the future and the enjoyment of fulfilling our deep-seeded longings.