Knowing When To Hit “Pause”

Knowing When To Hit “Pause”

Weekend Pivot Points

by | Jul 20, 2018 | Weekend Pivot Points

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.

Are you smarter than an Eighth Grader…from 1919?

Are you smarter than an Eighth Grader…from 1919?

Weekend Pivot Points

by | Jun 1, 2018 | Weekend Pivot Points

I found this gem last weekend while cleaning out old moving boxes in my basement.

You’re looking at a portion of the Common School Diploma Test of 1919 (pictured above), a.k.a the admissions test for high school. It was buried deep in a book, “Early Schools of Meade County”, commemorating the sixty-plus one-room schoolhouses of my local school district.

There’s something fascinating about finding a lost relic and being able to take a step back in time. Here are a few quick facts from the book:

  • Teachers’ basic salaries in 1910 were $30/year for a one-room schoolhouse on a six-month school calendar. The equivalent of $801.24/year today.
  • Although schools had dress codes, shoes were not required for boys or girls (no year is given)
  • School attendance, at any age, was not a requirement until 1921
  • It was not unusual for students to attend school into their early 20’s
  • The school day was 8 AM – 4 PM and included 15 minutes of “Opening Exercises” to start the day, two Recesses, and an hour-long lunch
  • To raise funds, the local one-room schoolhouses would have festivals with competitions, including prettiest girl…and ugliest man

Besides the fact that I am 100% certain that I am ill-equipped to attend the high school of 1919, here is what the book taught me:

  1. What seems important today will most likely change tomorrow, and next after, and next decade.
  2. The more things change and evolve, the more apparent it is that the basics and fundamentals of learning will always be the same.
  3. Perspective. When you look back one year, it’s difficult to see progress or change; but, when you look back 100 years, it can be blatantly obvious.
Here are the stories that caught my eye this week:

MONEY: Millennials are in a deep financial hole compared to past generations (Slate)
A study from the Federal Reserve Bank of St. Louis determined that the median net worth of those born in the 1980’s was 34% lower than would have been expected based on previous generations/age groups. The study also found that children of the 80’s have similar debt levels and higher savings rates than previous age groups. So why the difference in net worth? Student loans. While previous generations used debt to buy houses and other assets which add to net worth, Millennials have used debt to pay for their diplomas, leaving them to play catch up.

LIFE: Global Rich List
I highly encourage everyone to test this out. The title is a bit misleading. Instead of a list of the richest people in the world, it’s actually a simple calculator that allows you to see where you rank in the world, based on income and overall wealth. You may find the results surprising (or humbling).

KENTUCKY PENSIONS: Study: Some public pensions funds could run dry in a downturn (CBS News)
A Harvard University study examining what would happen to state pension funds under various economic scenarios was released last week. The study highlighted 10 states, Kentucky being one of them. The study found that a “sustained economic downturn” (5% returns on pension funds vs. the projected 6.77%) would put Kentucky pensions in “perilous shape”. While the results aren’t necessarily a surprise, the outside perspective provided by the study serves as an important reminder of the shaky ground on which the Kentucky Retirement System currently stands.

By 35…

By 35…

Weekend Pivot Points

by | May 25, 2018 | Weekend Pivot Points

Thanks, MarketWatch, for reminding us all of the pitfalls in generalized advice!

The advice? “By 35, you should have twice your salary saved, according to retirement experts.”

With a single tweet, 30-somethings everywhere united to playfully mock the generic advice of “retirement experts”.

Invoking replies with more accurate and attainable generalizations like, “By 35, you should have a kitchen cabinet dedicated entirely to plastic bags that contain other, smaller plastic bags.” (my personal favorite)

Why the outrage and pushback? The advice ignores the “how” and focuses on the “what”. It fails to take into account the different paths that we all take and the circumstances that we find ourselves in that may help or hinder our ability to save (i.e. repaying student loans, raising kids, starting a business, etc.).

Generalizations and general rules of thumb can be helpful but are more appropriate when they focus on the input rather than the output or result. “Save early and save often” is more useful and infinitely more effective than “have twice your salary saved by 35”. Generalizations that focus on a result are merely checkpoints on someone else’s path, only helpful if you’re headed for the same destination.

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

MONEY: This is how your finances should look in your 30s (MarketWatch)
This is the article that sparked the “By 35…” Twitterstorm last week. To MarketWatch’s and the author’s credit, they’ve accepted the pushback and have responded with more helpful articles highlighting the real-life financial situations of 30-somethings across the U.S., instead of focusing on perfect world, generic targets.

LIFE: Does it help? (Seth Godin)
This blog post was a timely reminder for me this week. Short and simple. “Okay, you know how you feel, what you need, what you want…This next thing you’re going to do or say: Does it help you get closer to that?”

Perfect is the Enemy of Good

Perfect is the Enemy of Good

Weekend Pivot Points

by | May 18, 2018 | Weekend Pivot Points

(Source and inspiration for this post: Get Rich Slowly)

The pursuit of perfection = analyzing all options to make the absolute best decision possible.

More options lead to more complication.

More complication requires more time and effort devoted to analyzing and choosing the perfect option.

More time required to find the perfect option can lead to procrastination.

Procrastination invites anxiety, fear, and doubt.

Anxiety, fear, and doubt cause us to second guess ourselves and open us up to regret, or, worse, prevent us from ever starting in the first place.

This is as much a reminder and mantra for myself than anything else (hence, the above photo of a Post-It on my desk). The pursuit of perfection or a better option doesn’t necessarily equate to more satisfaction or a better outcome.

If the pursuit of perfection causes anxiety or regret, we may be happier simply knowing what constitutes “good enough” in our minds and aiming for that. This isn’t to say that we should divulge ourselves of all standards, but rather, reframing our expectations to be satisfied with an “A” instead of “100%”. Knowing what meets our standards for “good” makes it easier to get started, frees up more time to pursue other interests, allows us to focus more on the positive qualities of our decision, and lessens the likelihood that we look for flaws and regret our decision in the end.

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

MONEY: How Much Money Do You Need to Be Wealthy in America? (Bloomberg)
Short answer…$2.4 million. The study shows that we, the public, think $2.4 million is the amount of money we need in order to not have to worry about money in our everyday lives. I don’t know about you but that number seems a bit daunting (read above text about the pursuit of perfection). How we personally define wealth is more important than any number. When wealth is defined, it is more attainable.

LIFE: Great Things Take Time (Of Dollars And Data)
Wow! A great story of one man’s determination to make a better life for his family and his village by single-handedly moving a mountain (literally). Over the course of 22 years, he removed 270,000 cubic feet of rock with only a hammer and chisel to cut a 360-foot long road thru a mountain. Why? To create a safer and shorter passage for everyone in his village.

Lessons from Mom

Lessons from Mom

Weekend Pivot Points

by | May 11, 2018 | Weekend Pivot Points

What my mom taught me about money (whether she realizes it or not):

  • “Do a little bit every day” – If the dishes are done right after dinner, the sink won’t be overflowing with dirty dishes tomorrow. Money Translation: if I save a little bit every day/week/month, I won’t have to play catch up next year, in 5 years, in 10 years.
  • “Don’t sweat the small stuff” – Focus on what can be controlled and don’t worry about the rest. Money Translation: Don’t focus on investment returns! I CAN’T control the returns or value of my investments today/tomorrow/next month, but I CAN control how much I save, how often I save, how much it costs, how I am taxed (to some extent), and how much risk I’m willing to accept.
  • “Stay calm” – Keep a level head. Pause, take a moment, think, and then respond. Money Translation: Whether it’s in fear or greed, making a financial decision when my emotions are at a 10 out of 10 will rarely lead to a positive long-term outcome. Don’t make impulse decisions!
  • “Be generous” – If a hand is needed, lend a hand. If an ear is needed, lend an ear. If a shoulder to cry on is needed, lend a shoulder. What you give in life will come back to you ten-fold. Money Translation: Whether it’s to a family member, church, charity, or a stranger on the street, make giving a part of my life. If I can give money, give money. If I can’t give money, give time.
  • “There’s more to life than money” – Don’t let money and the pursuit of it (i.e. work) consume life. Be present in the moment and enjoy time with your family. Money is the servant, not the master.

Happy Mother’s Day, Mom! And Happy Mother’s Day to all the other mom’s out there.

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

MONEY: The Stages of Financial Freedom (Get Rich Slowly)
Financial Freedom is a spectrum. It’s not an “all or nothing” event like we tend to think of with retirement, but rather a progression in our relationship with money from simply “surviving” to “thriving”. The article provides an interesting way of viewing our progression by giving “stages” or checkpoints for monitoring our progress along the spectrum.

LIFE: Letting Go (The Simple Dollar)
Clutter = Stress! We all have a place for clutter in our homes. For some, it’s simply a small drawer, and for others, it’s an entire room or garage. For me, it’s a small corner of unpacked moving boxes in my basement. The boxes bring me no joy. Even though they’re labeled in Sharpie, I couldn’t tell you what’s in half of them. What I can tell you is that my stress level increases every time I see them. Letting go of clutter can be hard, but sometimes it’s the best thing we can do for ourselves.

Weekend Pivot Points – What the ____?

Weekend Pivot Points – What the ____?

Weekend Pivot Points

by | Mar 23, 2018 | Weekend Pivot Points

That’s what I and many other fiduciary advisors are left asking this week. In a head-scratching decision, a court of appeals decided to overturn the Department of Labor’s Fiduciary Rule for financial advisors.

Not familiar with the “Fiduciary Rule”? The rule, at its core, would require any financial professional giving advice on retirement accounts to do so with their clients’ best interest in mind. Makes sense, right? That’s the basic assumption most people would make when working with a financial advisor. In a laughable argument, however, the opposition to the rule (mainly, large brokerage and insurance companies) argued that, in essence, “their advice amounts to nothing more than a sales pitch” and, therefore, requiring documentation of best interest advice would be an unnecessary cost. Or to put another way, “we don’t give advice, we sell products…but we’re going to call ourselves financial advisors because that’s what people recognize.” Really???

It shouldn’t be the responsibility of the client to fact check and determine if the advice they receive is in their best interest or to ask whether or not their advisor is a fiduciary. Doing what is in your client’s best interest should be a given for ALL who call themselves financial advisors. I hope, in spite of the D.O.L. rule being overturned, that a fire has been started and “fiduciary” responsibility becomes the standard expectation from clients and advisors. Expect more!

*THUMP* (sound of me hopping off my soapbox)

With that said, here are the stories that caught my eye this week:
KENTUCKY TEACHERS’ PENSION CALCULATOR: If you haven’t already, check out the updated pension calculator to compare your current Kentucky Teachers’ Pension Benefit with the pension reform proposed in the SB1 bill released on 2/20/18.

MONEY: Teachers and Annuities: A Questionable Match and Hard Products to Shed (New York Times)
Annuities can be a polarizing topic for those in the financial industry. At their core, they can be a valuable income tool for some, mainly those in or very close to retirement. But, for those that are still working and have many years before retirement, annuities are a “questionable match”. Unfortunately, 403(b) plans (retirement plans for teachers and other non-profit employees) are dominated by annuity companies, and vis-a-vis, annuities are the most widely offered type of investment in those plans. These investments have a tendency to be overly complex, charge high fees, and be very difficult to transfer or withdraw. Annuities can make sense but they should be approached with caution and due diligence before signing on the dotted line.

LIFE: Resistance Is Futile. To Change Habits, Try Replacement Instead (New York Times)
On a lighter note, I’m a sucker for life hacks. To be fair, I’m much better at reading and sharing them than actually putting them into practice, but nevertheless, I find them useful and entertaining. For instance, let’s hypothetically assume that while reading an email newsletter, Taylor Swift’s “Shake It Off” was mentioned and then you unwittingly began singing or humming along in your head. Studies have shown that simply focusing efforts on forgetting the song will only strengthen its resonance. Now, instead, try to replace the song with another song or activity and tell that other song to “Beat It”. If you’re lucky, you can say “Bye, Bye, Bye” to that repetitive beat that’s on a constant loop in your head.

KENTUCKY PENSIONS: KY public workers fear premium hike as health fund raided (Lexington Herald-Leader)
To help balance the state budget, lawmakers are planning on redirecting a large portion of the Kentucky Group Health Insurance Fund. The exact amount is still being discussed, but it is likely to be somewhere between $200-500 million. This move isn’t unprecedented but, rather, has become a common budgeting tactic for the state over the last 10 years as lawmakers have redirected over $700 million from the fund in that timespan. What does this mean for state employees? If group healthcare claims/expenses are higher than anticipated, it could lead to increased health insurance premiums in the near future for families, like mine, all across the state.