Greater Than Financial is a fee-only, fiduciary financial planning firm specializing in planning for the busy families of Kansas City’s Northland and across the United States

Your Values vs. Inflation

“I remember before you were born, when CDs were paying 10%!” That’s a reference to the 1980’s. Yes, I am a child of the 80’s, and not such a bad time to be born looking back. 

“Great,” I’d reply, “but do you remember what mortgage rates were at that time? Or recall how much prices were rising?” That usually brings the conversation to a quick close, because when bank certificates of deposit were paying around 10%, mortgage rates were higher than 15%. If you borrow money at 15% to earn 10% interest on it, you’re not winning.

It’s interesting how little interest a typical American adult has in deepening their interest in interest rates. But considering inflation headlines, which lead to fear, which leads to poor decision making, it can do us and our families and our communities a lot of good to gain a basic understanding of how inflation works.

If we can carve out some time to examine history (no matter how long ago we graduated), and mix that historical perspective with an objective view of current events, then we will give our families the best opportunity to keep the freedom we need to pursue our values. 

Currently, one of the greatest risks to that freedom is inflation. Also known as the devaluation of your dollars. You lose purchasing power not because you have less money, but because your money buys less.

Famous economist Milton Friedman states that “inflation is always and everywhere a monetary phenomenon.” What he meant is the problem of our dollars losing value is a simple one. Prices increase when too many dollars chase too few goods and services. 

When the money supply is constrained by something, like it was when the dollar’s value was tied to gold, it limits how much human whims can affect the supply of money. But the USA effectively left the gold standard in 1933 to battle the Depression. We now have what’s known as fiat money, which is only backed by the faith and trust of the government that issues it. And we know that many people do not trust the government. Why?

Most of us fight the temptation to spend more resources than we have. This is true of both households and governments (including local, state, and federal). All communities and countries are guilty. Politically, Democrats advocate for government spending more so than Republicans, but Republicans are not anti-government spending. They are just anti-tax enough they are less zealous about spending.

Many wanted governments around the world to do something when the pandemic hit. The “do something” the public wanted largely amounted to spending money. Government spending is a key part of the recipe for all historical inflation problems. However, it’s not the only part. Economic systems, made up of billions of diverse humans, are complex. So should people be concerned about inflation? What actions, if any, should be taken

### What to do?

Bad news: your money is losing value. People often are scared of market risk by investing in stocks, and insolvency risk of investing in bonds, but people have actually lost a lot of their real money by letting their money sit quietly doing nothing. Nothing but eroding in value because of inflation.

Inflation is a devaluation of your money, whether that be a secret cash stash or in a bank account. So while your money is sitting safely in your bank account, secured by your bank and insured by the federal government, it’s losing purchasing power. How much value it’s losing depends on the rate of inflation.

I believe strongly that financially healthy countries are made up of financially healthy families. So if you want this country to be financially strong, be sure to start with your own family. Besides, it’s the one thing you control the most. 

So in the pursuit of financial health, all families should be aware of the forces that could disrupt our goals. Inflation is one such force. Be concerned about inflation. But don’t be frightened of it. 

First, we must consider how likely it is that inflation will impact our money. The answer to that is currently: a near certainty. The Federal Reserve even has an inflation target rate (2% annually). 

So then we turn our sights to the real danger factor: what will the rate of inflation be and for how long? The last 30 years (most of my lifetime) inflation has smoothly averaged between 2-3%. That’s such a long time of consistently temperate price rises that it seems completely normal. But historically, that has not been the case. And now presently, that is not the case!

When we originally published this article in March 2021, inflation was still subdued, reported at 2.6% annually. But the wave of higher prices was at the door, as inflation has elevated rapidly since then, going to 4.2% in April of 2021, jumping to 7.0% by the end of 2021, and reaching a (current) peak of 9.1% in June 2022. As of this writing inflation is still coming in above 8% annually.

So we need to take to the streets and demand our governments, small and large, take action to reduce inflation, right?! I would argue that’s not a good use of your time. And if you believe the Inflation Reduction Act passed in August 2022, even the [federal government disagrees](https://budgetmodel.wharton.upenn.edu/issues/2022/8/5/inflation-reduction-act-comparing-cbo-and-pwbm-estimates) with you.

Instead, here’s what you can do.

Always and forever, the most important thing you can do in all economic circumstances is to focus on your own productivity. In essence, do all you can to create value for others. This covers over a multitude of other financial mistakes and even financial apathy.

Next, limit exposure to fixed interest rate accounts, investments and securities. This would be bank accounts, CDs, and bonds. Of course you always want to keep a portion of your net worth easily accessible, and these are some of the most accessible ways to keep money. But be thoughtful about how much you really need in these instruments.

There is one major exception to this currently, and that is [Series I Bonds](https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm). There are pros and cons to I Bonds. Are they a real value to many families who are both worried about their cash losing value and also scared of the economy and markets. Definitely!

Are these savings bonds manna from heaven in a high inflation environment? No. There are some considerations you need to take when committing money anywhere long term, including 12 months of complete illiquidity. 

A proven antidote for our assets in a high inflation environment is to increase your exposure to equities, or ownership assets. This includes business, real estate, and stocks. Commodities and other real assets have also helped protect against the eroding value effects of inflation.  

But you must keep in mind that all of those assets contain risk. There is much less purchasing power risk with those assets compared to cash, but there is much more market risk, meaning those assets can all fluctuate wildly in value. Do not make these decisions without advice you can trust. 

But also, do not let apathy towards all sorts of risk wrestle the hope of financial freedom away from your family. We cannot predict what the future holds, but we can learn from history. And as Mark Twain once said, “History never repeats itself, but it does often rhyme.”

Two Types of People

There are 2 types of people in this world: those who are willing to take risks, and those who are not but do it anyway. No one is free from risk. No One.

The COVID-19 pandemic taught all of us lessons about risk. I certainly didn’t imagine such a thing would happen, and that it would touch nearly every human on this planet. But it did. And some people have been positively impacted. Others have had their livelihoods stripped from them. Others are dead. 

The primary effects (infections, death, and shutdowns) of this pandemic are behind us, but the lingering, secondary effects will never be truly known or understood. What is understood is there will always be threats to your values. A close friend of mine says he often feels like he’s in one of three places: enduring a valley, just coming out of a valley, or getting ready to go through the valley. His point is there's always a valley. And rarely do we traverse the same valley twice. 

The expectation of disruption in our lives could actually be empowering. If we acknowledge our lives will be disrupted (often painfully so) then we no longer have to live in this fear of “what if?”. We know we’ll eventually be the victim. It’s just a matter of when and on what scale. 

If we come to believe that bad things will inevitably happen to us and then stop there, it will sink us into desperation and depression. But if we combine the expectation with thoughtful preparation, suddenly we are ready for anything. So, how do we prepare?

First, acknowledge EVERY choice has risk, and risk has two sides: The odds I’ll get hurt and the extent of the damage if I do.

Next, get real about the odds of getting hurt. For example, there’s certainly risk in putting money into the stock market, but the odds of all the stocks in the United States going to zero is very small. It’s never happened in the USA, but it has happened to other countries.

Finally, frequently consider the worst case scenarios of your choices. What’s the worst that could happen if you choose to invest your retirement assets completely in the stock market? Stock values can sink, some even go to zero. Where would that leave you? Back to work? Dependent on the government for sustenance (if the government still remains)? How would that make you feel?

“There’s no way I could live like that” you say. Okay, so what are your alternatives? Keep your money in the bank? Produce your own food? Now you have to consider a whole new set of worst-case scenarios. Some risks are more bearable than others, but only you know what your preferences truly are. 

The only failure on your part is if you don’t take the time to seriously consider those risks. The opposite of wisdom in your choices isn’t stupidity….at least we’ll learn pretty quickly from dumb choices. No, the most dangerous state of our families would be apathy. Kick risk apathy out of your homes, it’s not welcome there. 

*Psalm 23:4*

The Young Man in Your Life Who Thinks He's a Stock Broker

I am really thankful to know a lot of great young men. If you doubt your community’s youth, you need to spend more time with them. If adults would engage with younger generations, they’d quickly find that, yes, young people do spend a lot of time on their phones, but no, it does not mean they are losers. It usually means you haven’t tried hard enough to get them to look up.



That said, I want you to ask a young male in your life if he has a Robinhood account (or Webull, or another app for stock trading). Then ask him his thoughts on cryptocurrency. If you see his eyes light up, you have some work to do. If you get no reaction from him, you also have work to do, because you may have an apathetic guy in your life, and apathy is the single most dangerous risk for all humanity.



Right now, the young man in your life is at risk of being captivated by others who are posting stories on social media, some very real and many very fake, about the thousands of dollars they have made by investing in the stock market. And even many bragging about how much they’ve lost!



These stories are pulling on the parts of his heart and soul that are longing for an adventure. But be careful, that young man in your life also might not be so young in years. I’ve had some men in their 40s dig some pretty big financial holes for their families because of Robinhood. And consider that it also could be a lady in your life, although that is far less likely. 



(I have recently fielded messages from around a dozen young people interested in investing, and every single one of them was a male. Females and males are wired differently and perceptions of investing gives you some very clear contrasts between men and women. There are exceptions to those perceptions, and feel free to reach out and talk through them with me.)



Whether younger, older, male or female, there are strong odds seeds of financial destruction are being sown in your family at this very moment.



We are all at risk of getting caught up in the adventure and stories of investing, but if we wander into this playing field unaware, some real damage could be done to those we love.



So what do you do if you know someone who is taking an increased interest in the stock market or cryptocurrency? First, ask them about their personal finance course and what they learned. Personal Finance has been a requirement for graduation in Missouri for over a decade now so many have taken it. If they haven’t, I have a personal finance course online and I’d be thrilled to send you a code to access it for free. Just email me.



Next, ask them if they have read a book on investing. If yes, great, which one? If not, tell them you will not give them a bail out when their investing ventures inevitably go awry. There are very smart, experienced, cut-throat people in investing markets from all over the world and they don’t know or care who’s on the other side of a trade. They want inexperienced people to play their game.

Capitalism and investment are extraordinary concepts. It is an adventure to participate in it all. But no one wants to be a part of an adventure where they are left devastated. Protect the ones you love by asking them great questions.

Simply Thousands

There are many ways to create value through financial planning. The greatest value is gaining clear purpose with all our resources, especially our time. But I realize that most people aren’t thinking that big when they engage a financial advisor or planner. They usually just want to maximize their money. If that’s their objective, it becomes my job to help them make that happen (while always keeping the door open to have a deeper impact later on).

The long term way to maximize money is to do well with your cash flow (income and expenses) then invest the excess income effectively, thereby growing wealth. There is so much to be written about optimizing cash flow and investing well.

However, there is one simple change 90% of families I’ve worked with could make which has paid thousands of dollars in dividends after just a single meeting. That means it’s likely you can make this change and make a lot more money in your lifetime.

The only requirement is that you keep an emergency fund (aka cash reserves, savings). If you have savings, then one of the greatest opportunity costs of your finances is the interest you’re earning, or in this case, not earning. Interest rates have been historically low for the last 12 years. But that doesn’t mean there aren’t options for optimizing the interest you earn on what you keep in savings.

Let’s take the case of a family with $25,000 in their savings (probably close to the average for the readers of this post). A popular bank near me is currently offering 0.25% as their best savings account rate. If that rate doesn’t change, that would equal about $63 in interest for one year.

Compare that with the highest savings interest rate available to you as of August 2022 which is 1.75%. On $25,000 that would translate into $438 per year in interest. 

Right now you may be wondering why I’m talking “thousands” when the difference between those accounts isn’t even $500. Because we aren’t just talking about earning more in one year. Many of us have many more years in front of us. How much more would you earn with these differences in rates over the next 20 years? 

Over 20 years, compared to the 0.25% at the local bank, you’d earn over $9,000 more in the savings account paying 1.75%. More than that, as rates go back up, this difference in earnings will only get larger. Also, you can still keep your current checking accounts because this new account connects directly to your current accounts. Money moves back and forth between them in just 1 or 2 business days.

But many won’t make this change. Why not? Perhaps changing banks seems disloyal? Or more likely because changing banks seems like a hassle. But if I offer you $9,000 to make a change today, would you take it? That’s essentially what you are being offered, and if you want to maximize your savings, you’ll take it.

As always, if you have thoughts or questions, don’t hesitate to shoot me a message: wake@greaterthnafinancial.com.

Happiness vs. Satisfaction

I use the word “satisfaction” instead of “happiness” intentionally. “Happy” focuses more on the current feeling or mood, whereas “satisfaction” seems to imply deeper, longer-lasting fulfillment. 

Imagine winning a brand new car or truck. You would be very happy to have that experience and feeling of a new vehicle. But how would you feel once a child spills a drink in the back? What about when it gets door-dinged while parked? What about when an acquaintance gets a similar model, just a bit newer and nicer? Still happy?

A few years ago, I bought 3 tickets to the Chiefs vs the Colts game on Sunday night football for myself and my two oldest kids. I was happy the moment I purchased the tickets, and my happiness endured through the weeks leading up to the game. My happiness continued as my daughter and son laid eyes on Arrowhead Stadium with its BBQ smoke filled parking lot. My happiness increased as the kids said “wow!” and “look at that” numerous times as we took in the sights and sounds of tailgating. My happiness nearly crescendoed as we took our seats and witnessed the excitement and energy of a primetime Arrowhead Stadium for one of the best football teams in the nation. Our football team!

The peak of my happiness was when Patrick Mahomes made a career highlight play near the start of the 2nd quarter, a 27-yard scrambling touchdown strike to Byron Pringle. The stadium went nuts, and my kids were ecstatic. Then my happiness started to disappear. Patrick Mahomes' ankle got dinged and he proceeded to play one of the worst games of his career. By the end of halftime, my kids were so tired, they stopped caring about the game, and by the end of the 3rd quarter it was clear the Chiefs weren’t going to win. 

Happiness was gone, but my satisfaction was deep. How can that be? Because despite the Chiefs playing poorly, I had an incredible experience with two of my beautiful, healthy children. We spent a lot of money on that Sunday, but we still had plenty of money as a family to meet all of our pending needs. 

I would have been happier if the Chiefs won, and probably even more satisfied. And while a Chiefs win was likely (they were 11 point favorites), the game outcome was never in our control. Because of that reality, I was able to focus on what would satisfy me: an amazing first time experience with my kids. 

Slow down for a bit and reflect on your life. And as you slow down, consider the things you thought would make you happy and ask yourself how that really turned out. Then consider how you might use your time and money differently next year to give you a more enduring sense of satisfaction. 

Don’t settle for pleasures that are here today and gone tomorrow. Instead, use what’s in front of you to discover what will truly make you feel alive. Invest your time and money on those things. You won’t regret it.

What To Do With An Old Retirement Account

Do you have an old 401(k) (or other company retirement account) your former employer is telling you to do something with or that you feel is hanging out there aimlessly? You need to “take care of it” one way or another. 

This is the #1 reason people reach out to me as a financial planner. It’s also the exact situation financial advisors seek to prey upon because it’s the easiest way to gather assets on which to make a fee or commission. 

That leaves you, the holder of the old retirement plan, in a tough spot. You want to get closure on this account, but you don’t know how, and you don’t know who to trust to help you figure it out. There is no clear path ahead. But there’s hope!

Let’s clear your path so you’ll know how to handle your old retirement account.

- - -

First, *you don’t have to do anything with the old plan.* You can leave it there if you’d like. 

Is that the best decision? It depends. The worst case scenario is the plan provider will boot you out, send you a check for the proceeds minus tax and penalty withholdings. Those withholdings won’t be a lot in dollar terms, because providers usually only boot you out of the plan if your balance is small (usually $5,000 or less). 

*So what would it look like just to leave it where it is? Why would you do that?*

Old retirement plans may provide you with benefits you can’t find anywhere else. There are a few benefits to look out for. First, do you have company stock in this plan? If yes, you have to consider your long term tax plan. The retirement plan structure gives you options with how to treat that stock in the most tax efficient manner possible. How that works is beyond the scope of this article, so get professional help if you own a lot of company stock (more than 5% of your net worth).

Second, does your old plan offer you access to investments no other plan or provider can? Some company plans have negotiated some sweet investment options, most commonly a stable value or guaranteed fund that pays a more robust interest rate than relative alternatives.

Finally, by moving the old account, will it be subjected to new expenses and fees? As mentioned earlier, the financial advising sales force is always interested in folks moving old retirement assets so they can make a sale. 

*But that doesn’t mean leaving it is your best choice because…*

Your old plan may be awful. Awful would be defined by three factors: high costs, poor investment selection, and shabby service/user interface. 

Let’s break that down.

#### High Costs

How do you know if the costs of your plan are high? First, know what you’re looking for. The costs most commonly assessed are fund expenses (expressed as an expense ratio), advisory fees, and recordkeeping fees. 

Next, login into your plan account access (if you don’t know how, reach out to the HR person in your old company), then within the website, find the *Summary Plan Description*. It should be available to you in PDF format.

Once you’ve opened the PDF, do a CTRL+F (or *COMMAND+F*) on your keyboard to pull up the document search and try using any of the following terms: *fees, expense(s), commission, charges.* That should lead you to the content you’re looking for to determine what costs your old plan levies. If it doesn’t, keep searching the website, the information is likely there. Still no luck? Call the customer service # to get help. Information on costs is too important to remain naïve.

#### Crummy Investments 

How do you know if your plan has poor investment selections? This is tough, because everyone’s investment preferences are different depending on their perceptions, experience, beliefs,  and risk tolerance. Very generally speaking, I’m looking for low cost, highly diversified options in stocks and bonds. That is enough for me to have confidence an investor can be successful. 

#### No Engagement

Finally, you’ll know if your old plan has shabby service or a complex user interface by answering this one question: *is it difficult for you to access, get information on, or make changes to your account?* If you’ve tried to work with your old account and you find any of that to be true, then you need to take action.

If there is a high risk your old account will fall into your “out of sight, out of mind” mental category, neglect could have a high cost. Change happens in life and these assets may need adjustment. But you’ll never know if the old account is an afterthought.

There lies the single most powerful factor in deciding what to do with your old 401k. **It needs to be in a place where it can empower your decisions today.** However many assets you have in the account, they should be aiding in your pursuit of the most important matters in life, whether now or in the future. 

#### **Alright, I need to move the account, what do I do?**

Let’s say for any of the reasons above, you’ve decided you need to rollover (the technical term for moving your account) your old retirement account. You’ve got a couple more questions to ask yourself: How capable are you to find a solution without paying for help? And if you’re not capable, where’s the best place to turn? 

If you are financial savvy and  have some time to dedicate to the task, then you could do this yourself. However, many appreciate help, because they don’t have either the confidence, the time, the energy, or the focus to make the right choices with the account.

Then by all means, enlist help from a financial professional. My only plea is this: know how you’re paying for the advice and know your alternative options. 

By going through these steps, you’ll gain the confidence your assets are helping you gain the flexibility in your life you crave.

The Financial Planner vs. The Investment Advisor

What percentage of your time do you spend focusing on the most important, productive, or optimal “thing”? 90%? 50%? 1%? 

I would guess that most Americans are spending less than 10% of their time on the things that actually matter in the long run. By “matter,” I mean the thing that will give us the most enduring satisfaction. 

In regards to your money, I think we are all tempted to focus too much on investments instead of the more powerful parts of our financial lives.

I’ve intentionally spent the bulk of my blog writing about investing. Investment concerns and questions are still the primary reason people reach out to me. It makes sense, because investing can be complex and if you make a bad investing decision, the mistake can cost thousands of dollars.

We want to believe that there is a special knowledge to investing. Smart people should be able to outsmart the investing markets right? History shows us many have done it before. But never forget it takes a combination of intellect and dumb luck to hit it rich in markets. And I don’t know anyone selling dumb luck right now.

This is why I wouldn’t work with a financial advisor who primarily focuses on investments. Think back to the last time you talked with an advisor. What percentage of the time did you spend talking about investments or looking at statements/values? It’s a red flag if it was more than 25% of the time. 

So what should an advisor be doing if not focusing and guiding families on investments? They should start practicing real financial planning. 

Real financial planning is delivered by a professional, typically marked by a professional designation, such as CFP®️. Real financial planning is crystal clear on the conflicts of interest they have in giving advice (which are always present). Real financial planning is independent and only compensated by clients alone, not by product vendors. 

You’ll know you’re receiving real financial planning when you are asked really great questions, and then listened to more than being talked at. You won’t get lost in financial jargon you can’t understand, but will instead appreciate complex matters made simple.

If you’re purely looking for investment advice, read Benjamin Graham and Warren Buffett. Even those investment stalwarts shun practices like picking hot stocks, timing the market, or predicting interest rates. But if you’re looking for progress towards your financial goals and well-being, then find a real financial advisor you can learn to trust. 

He or she will help you clarify your goals, keep reminding you of those goals, and then stand between you and all the craziness of this world that could knock you off track.

Immediate Concerns vs Big Picture

Immediate concerns vs big picture vs eternal reality. I wonder what you would tell me if I just said those 8 words to you? What does it make you think about? Please text or call me sometime and let me know what those 8 words make you think about. 

This is true: They are all completely relevant to your financial decisions. Here’s a few comments on each.

I don’t know all of your immediate concerns. You may be enduring some personal conflict that trumps all else. Beyond that, it’s a safe bet you have concerns about the US and global economies, particularly inflation, supply chains, and labor issues. I certainly do! 

To be clear, I’m not worried about it! And I don’t believe you should be either. These things matter, they do force changes upon us that at times are uncomfortable, but they are beyond our control, so worry is not welcome here.

Do I have an answer to those economic issues? Probably not, but I do have some preferences I hope our government implements. Primarily, policies that get people moving, working, and creating value for others. To me, it solves all 3 of those economic challenges.

And what do you know, that's the same advice I’m giving to my clients! If you find yourself worried, then the one thing you need to strive to do is this: go create value for others. This might be in your family, your church, your community, for your employer, for your business, for a client, for a neighbor, for a child….the possibilities are numerous. 

If your time and attention is full serving others then 2 things happen. First, you don’t have time to saturate yourself in the media’s apocalypse du jor. Secondly, if the apocalypse du jor actually has teeth, then the antidote against it will be to create value for others. 

Every economy is built upon people creating value for others, and in exchange people will be eager to create value for you. That is the basis of a healthy economy (whether is a $1,000 economy or a $1 trillion economy). 

If we have a healthy paradigm for the immediate concerns, then we can free up our hearts and minds to focus on the big picture concerns. In the 3rd quarter of 2022, we’d like to put two big picture concerns on your radar. How you spend your time (career, organizations, recreationally, etc.) and what will happen to your resources when you die. 

Before you tune me out on death, please keep in mind these timeless words:

*'A wise person thinks a lot about death, while a fool thinks only about having a good time. '*

Ecclesiastes 7:4

Ecclesiastes recommends frequently enjoying your work while alive, and eating and drinking and soaking in the good gifts our Creator has given. However, we are fools to not account for where this ship is inevitably headed.

And you already know your heart’s concerns will outlive you, because you have people you love that will still be here on this earth, trying to make good decisions, after you have passed on.

**If you were to pass on today, what kind of experience would your loved ones have with your estate?** 

If you cannot confidently answer that question, then we of course have work to do. And even if you are confident, it’s worthwhile to double check, because a well designed estate plan can still have holes, and can quickly become outdated.

Regarding your time, I just have one simple question for you: why are you spending your time the way you are? 

Of course, however you answer that, I’d really like to ask you a few more follow up questions (*there are **always** more questions*). But the basis of the question is actually another question: are you bold enough to consider if it is time to make some meaningful changes to your time?

I hope you are bold enough, because in the “big picture” time is very valuable. However, in another picture, that of eternity, time is infinite. That thought may be comforting to some, and terrifying to others. But unless you are clear on the most realistic timeline, which I believe is **eternity**, then it changes every other decision you make, including in your financial plans.

If you are a Greater Than Financial client, that makes you one who commits to not be afraid to examine the questions many are afraid of, and in doing so, reach levels of satisfaction with your money that many can only dream about!

The Best is Yet to Come

I love everything about that phrase. It may have lost a bit of its luster for those closest to me because I use it so often. I can’t help it, those 6 words lay at the foundation of my life. They have a lot to say about your life as well.

 The 6 words have 4 attributes which make it profound. The first and most evident is what it says about the future. Those words are the epitome of optimism. There’s only one alternative to optimism. And pessimism implies that life is mostly outside of your control, which is a defeated and false way to live.

 The second is what those words say about the past, or more appropriately, what they don’t say about the past. There is no implication in that phrase of whether the past we’ve come from was incredible or terrible.  

 Some are thinking “the best better be coming because I've already been through hell and back” while others are worried they've already used up their good years as if it’s a finite resource. 

 But “the best is yet to come” puts those who've been through hell at the same starting line as those who have never felt better. In light of these words, our past is not the primary determinant of our future. It does matter, but not as much as we like (or don’t like) to think.

The third quality is the use of the word *best*. The definition gives us all we need to know: of the most excellent, effective, or desirable type or quality. There is no room here for decent, pretty good, or half-heartedness. *The best trumps all.*

 The last powerful characteristic of this adage is that it is certain. *The best is coming, there is no might or maybe*. If you believe that phrase in the depth of your being, then it becomes your reality. *If the best isn’t here yet, it means you simply have to hold on a bit longer, and it will soon arrive.*

 Granted, this will not be everyone's reality. In fact, many will simply refuse to believe it. My heart breaks for them because I can see clearly what they’re missing out on. And it’s *really* good.

 As for me and my family, the “best is yet to come” is our reality which makes it a truth in our lives, and that sets my heart on fire.

 You and I were created for a purpose. I hope you see that.  That purpose often gets lost in this dark chaotic world.  Our adventure is cutting through the darkness to win back the purpose we were created for.  I have a lot of thoughts on how we can adventure well together.

 In the meantime, we don't need to complicate it. It's as simple as it's ever been and it's as simple as it ever will be. Repeat it to yourself hundreds, better yet, thousands of times:

 *The best is yet to come.*

Here's To Spending Money

Money is the root of all evil, right? You’ve heard that quip before. It’s actually a misquoted verse from the Christian apostle, Paul. Instead, what Paul actually wrote is, “the love of money is the root of all kinds of evil”. 

There’s another common mistruth in the identity of many people, that spending money is bad. 

I understand where such a sentiment comes from. We still have the living perspective of many who lived through the Great Depression. We also live in a time when 1 out of every 3 people you see pays credit card interest (shudder). It comes natural to spend money (often more than we have) to satisfy short term impulses.

But I’m sure most of you reading this post have the self-control to fight impulses and aren’t carrying credit card debt from month to month. 

(If you do have credit card debt you’re not paying off in full every single month, you are losing with your money. You’re not a loser, but you are losing with your money, and losing with money usually means you’re losing at almost all the other areas of your life. Kiss all the other goals, dreams, and visions you have in your life good-bye because they are likely not happening if you carry credit card debt.)

Spending money is not evil. What is evil is spending money wastefully. Spending on junk that doesn’t matter (and often doesn’t last) is evil. Spending in ways contrary to the values you purport to care about is evil. Sure, it may seem harmless, but consider the alternative “good” you could have created with those wasted resources. The opportunity cost is appalling!

Show me a family who gives little thought to their finances, and I’ll show you a family who lets resources slip away to meaningless things. When people fail to carefully consider their values, one of two things happens to their money. They either spend hard or hardly spend. There’s a better way than those two polar opposites.

Spending money is not good in itself, but it can be used for good. “Good” is a universally loaded term….what is actually good? For this post, let’s consider “good” spending as money spent in ways reflecting your true values. I realize some of our values don’t necessarily fit the definition of “good”, but that is a post for another time.

When was the last time you wrote down what you really value? Has anyone ever pressed you on what you value? My friends and family often give me a hard time for asking “hard” or “deep” questions, and sometimes I do press too hard. However, my motivation is consistent: I want to know the true you, and I want you to know it too!

When you are clear on your values, then you will be able to make sure every dollar is advancing the “good” in your life. You’ll finally be able to strike the balance between spending too much and spending too little. But never settle for meaningless spending.

Dollars Per Unit of Fun

How much fun did you have this week? Did you do anything enjoyable or amusing? Do you find joy in seeing other people have fun? Does your pleasure go down when you see that someone else is having “more fun” than you? Have you had a rich or fun experience recently you didn’t post on social media? 

How much is the joy of an experience stripped when you realize how much the experience cost? That could be cost in money or cost in the hours of the people who had to work to pull it off for you.

Rich, fun experiences seem harder than ever to come by. Why? I think it has a lot to do with social media. There are two constant pressures on families today: the pressure to live up to the hype of others’ experiences (keep up with the Joneses) and the pressure to capture and share our experiences so others will see (make the Joneses work to keep up with me). And once you start playing the “keeping up” games, you better have DEEP pockets.

Marketers are skilled at convincing us what fun, meaningful experiences should look like for our families. But if we are getting our ideas from marketers, you know it’s going to end up costing a lot of money. Instead, you need to establish your own clear framework, or way of thinking, for creating fun experiences for yourself and your family.

Think back on the best experiences of your life, whether as a child, student, adult, or senior. I’m guessing some of those memories came with hefty price tags. Trip to another continent, a night of lavish luxury, a week at a Disney resort. 

But other experiences we remember didn’t cost a dime. Getting head to toe covered in mud with cousins, winning a basketball game, sitting around the dinner table laughing with family til tears. 

Which past experience did you value most? How will you figure out how to spend for future experiences?

The best tool I’ve used is a simple formula: dollars per unit of fun. Here’s how it works. Make a list, or have your kids/spouse make a list, of all of the fun experiences you can think of. Set a time, say for 3 minutes, and don’t stop thinking and writing options until time is up.

Next, go through the list and have each member of the family rate those experiences on a 10 point scale, with 1 being the least fun, and 10 being the most.

Once you have your rankings, then write down the approximate costs of each experience. Don’t get nitty gritty, just guesstimate for this exercise.

Finally, simply divide the approximate cost of each experience by its units of fun, and you have effectively figured out the most rewarding experiences you can do as a family. 

My kids rated a weeklong trip to Walt Disney World Resort as a 10 on the fun scale, but that would cost us probably around $5,000, so that would be $500/per unit of fun. Those same kids rated an adventurous evening on the 102 River beach as an 8, with the approximate cost being $50 if we get some great campfire food. That cooks out to $6.25 per unit of fun!

Now, if we do the 102 River once per month, the fun scale measurement would certainly go down. This doesn’t mean we’ll NEVER do a Disney trip or an ocean trip or a ski trip. But it’s incredibly freeing because it causes us to pause long enough as a family to realize some of the richest experiences don’t cost a boatload, and in many cases, they are downright inexpensive. 

Would love for you to share your lists with me ([wake@greaterthanfinancial.com](mailto:wake@greaterthanfinancial.com)). Here’s to a rich life!

What are Annuities?

What Are Annuities?

Last time we looked at how risk risk in investing is everywhere and there is really nowhere to hide. There are many who cannot handle the feelings that come with such a volatile stock market. The wild swings (both up and down, but mostly just down) can cause our hearts and minds to spin into a frenzy. 



Annuities are not commonly thought of as “good” financial vehicles. If you ask neighbors or friends what they think of annuities, you’ll either get negative or apathetic responses. Why? There are 3 reasons annuities get a bad wrap: 1) they are complex, 2) they are expensive, and 3) they are pushed onto families by financial salespeople.



So let’s back up a bit….what exactly is an annuity? According to Investopedia an annuity is “a contract between you and an insurance company in which you make a lump-sum payment or series of payments and, in return, receive regular disbursements, beginning either immediately or at some point in the future.



That’s your textbook definition, but here’s your street explanation: people want annuities when they are afraid of the volatility of owning assets, yet are unsatisfied with the low interest rates banks are offering. Annuities can shield people from that volatility, while offering to pay a bit more than bank interest rates.



When we are afraid, we tend to make choices with the reactive, irrational part of our brain, as opposed to the slower, more diligent and thoughtful part. The financial industry sees that fear and offers you annuities to calm them. Of course those annuities are REALLY expensive. But I don’t blame the annuity companies. They are simply creating a product to help meet the desires of the fearful for financial stability.



However, it really hurts to see annuity companies and insurance agents inciting those fears in order to make a sale. Capitalizing on fears is often what it takes to buy a product most people don’t need. Notice I say most people, but not all people.



There are some whose situation and temperament make annuities a great fit. There’s not enough space in my column to go through those scenarios. But I would recommend starting with the idea that an annuity is not a good fit for you until it can be proven to you, slowly and deliberately, otherwise.



If you find an annuity is right for you, I highly recommend not buying one from a salesperson or an agent. You will be paying commissions of 4-7%, which on multiple thousands of dollars, can be a real fleece job. Instead I’d recommend researching Fidelity or Nationwide for their “no-load” (meaning no commission) annuities.



That’s not to say you may not need advice on deciding if annuities are right for you, and if they are, which products are the best fit. But wouldn’t you rather take advice from someone who doesn’t stand to gain financially from your choice than someone set to make a large commission from a sale? It’s why fiduciary, fee-only financial advice is really the only way to engage financial advice.



So don’t let your fears make your choices for you on what your family needs to do financially. If you do, you will likely get fleeced. If enough people get fleeced, it lowers the standard of living for all of us. Instead, find trusted, credentialed advice to help you figure out what’s best for you and yours.

Gray Financial Risks

I love passive index investing. I love the intelligent simplicity of it, I love how it shows clearly that many asset managers are actually hurting clients more than helping them, and I love how it frees up professional resources to dedicate to more impactful areas of financial planning. Passive index investing has been endorsed by none other than the Oracle of Omaha, Warren Buffett, often said to be the greatest investor of our time.



However, some time ago, I began seeding an idea of the possible dangers of passive index investing. I ended the last blog by asking hard questions about S&P 500 index funds including questions like, what if these funds have created prices that no longer correspond to the functional value of the companies in the index? If that’s true, then are we no better than the people who were willing to pay exorbitant prices for tulip bulbs in the 17th century? 



A quick reminder/disclosure is that this column is not investing advice for you! You're too unique to take general advice from a column. Back to the S&P 500.



It seems almost certain to me that the explosion of passive index fund investing has caused market price distortions. Investopedia defines a market distortion as interference that significantly affects prices and, in some cases, risk-taking and asset allocation. Does that mean you should sell every stock you own? No. Does that mean you should sell your S&P 500 index fund? No. And I admit again as I did last week, most of my clients hold S&P 500 index funds. 



It does mean there is a risk inherent in passive index investing that is not there with active investing that relies on analysis to determine the merit of a particular investment. In simpler terms, investors can’t know if the price they're paying is “right” or “fair” if there is no investment analysis. So what action do you take? 



Unfortunately, it’s not simple. It depends on YOUR risk tolerance and YOUR worldview. The longer we live in this world, the more readily we are able to admit this world is hardly black and white. It’s mostly gray. Our decisions are tough because every choice has pros and cons. 



Take the pandemic response of the past 2 years. There were certainly a lot of physical health risks mitigated by shutting down the entire local economy, or US economy, or global economy. However, at what cost? It certainly came with a huge economic price tag to shut down everything. But we now see there were significant psychological and emotional price tags as well. 



So when the next virus hits, do we shut down everything to ensure we keep infections and deaths to a minimum, or keep everything open to be sure we don’t pay too steep of psychological and economic costs? I have an opinion on what I believe it’s right, but I certainly understand when someone has a different perspective, because they are different from me! 



Gray. Not black and white.



For your financial life, don’t pretend you can ever run away or hide from the risks of this world. They are everywhere. Instead, get serious about identifying the risks, and do serious research or get serious help about worst case scenarios and options for you and the ones you love. 



Finally, as you consider these risks and scary circumstances, one final piece of advice: beware of annuity salespeople.

The Potential of an Index Fund Bubble



Tulip bulbs are a very unique creation. Their flowers are known for being nearly perfect in their symmetry and you can find them in almost any color. Their blossoms let us know that spring has sprung!



Yes, this is still the Greater Than Financial column. I mention tulips because tulip bulbs were a key player in one of the greatest asset bubbles in history: Tulip Mania. It happened in the Netherlands in the 17th Century.



Tulips are certainly beautiful, but the prices in the 1600s got really crazy. A single bulb was known to trade for 6 times a person’s average annual salary. It was nonsensical, but many got caught up in the excitement and the quick money opportunities the bubble brought. 



You could have asked most rational people what the “true” value of a tulip bulb was, and most would agree it’s not worth close to 6 years wages. But that didn’t keep people from willingly paying extreme prices for bulbs. 



There are a lot of economic and sociological aspects to Tulip Mania. But there is a lesson (actually many of them) for everyone. The most important lesson is that the functional value (meaning how a good/service fulfills our practical needs) of an investment does not alway rationally correspond to the price of that investment. As was the case with tulip bulbs.



That’s also often the case with gold. Gold can be used in industry, and it may be the best for certain uses, including electronics. But because of gold’s history as a store of value, gold’s price doesn’t typically reflect its practical daily value. Most of the price of gold is tied to the speculation that gold has historically been used as a way to keep currency value in check (a store of value). Although the US dollar isn’t tied to gold right now, it could be again one day, and therefore investors speculate on its value.



I don’t own any gold and I don’t own any tulip bulbs. I have never recommended to my clients to buy gold or tulip bulbs. That’s not a prediction of their future prices. It’s simply my principle. 



However, I have recommended to many clients, based on their unique personal situations, to buy VOO, which is an Exchange Traded Fund (or ETF) called the Vanguard 500 Index Fund. It aims to buy approximately 500 large cap (meaning worth more than $10 billion) US companies. 



(Fair warning: now leaving Financial Planning 101)



The question then becomes: are we making a similar mistake with S&P 500 passive index funds, like VOO, as was made during Tulip Mania? Because of the research supporting passive index investing, and because of the ease in buying a passive index fund like VOO, has it created prices that no longer correspond to the functional value of the companies that actually make up the S&P 500? If yes, does that mean there is an indexing bubble? And if yes to that, will it ever pop? And if yes to that, when? And what should or even can we do about it?



And this is my favorite way to end articles. Present a bunch of deep questions, then leave the reader hanging. See you in two weeks!

I Own No Mutual Funds



Humans can accomplish a lot when we pool our resources together. The most notable buildings in northwest Missouri are a result of communities putting their money together to erect such architecture, think, school buildings. Pooling resources opens up options we don’t have on our own.



Pooling money to open up more investment options is a concept that dates back longer than history can accurately track. But modernly, many remember when pooling of our financial resources became mainstream in the 1990's. That is largely when mutual funds came from Wall Street to enter the homes of Main Street. 



The bull market of the 1990’s caused many new investors to take interest in publicly traded stocks for the first time, particularly emerging internet stocks. But most middle class Americans couldn’t afford to buy enough stocks to adequately diversify their money. 



This led people to demand financial products that allowed them to pool their money together so they could use that buying power to buy fractional parts of multiple stocks, therefore lowering risk and transaction costs. For a relatively small expense, a middle American, middle class family could now own thousands of American and international stocks. 



Does it shake your trust in me as a financial advisor if I confess that I don’t own a single mutual fund? It’s true. But it’s not because I don’t believe strongly in owning a low-cost, diversified portfolio of stocks. It’s because there is now a better option to achieve the same thing: the ETF.



An ETF, or exchanged traded fund, is a more cost and tax efficient version of a mutual fund. However, as ETFs have gained popularity in the US, many have come out against ETFs as an investment vehicle, even warning people about their “dangers”. The leading voice of the opposition was Jack Bogle, founder of Vanguard funds. I’ve written previously how I’ve been inspired by Jack Bogle, but I disagree with him on this debate. 



Bogle denounced ETFs because they made it too easy to make mistakes as compared with mutual funds. His argument was that mutual funds short-comings and restrictions were actually what made them a better investment vehicle for American investors. 



If you don’t have a process for keeping you from making bone-headed moves with your investments, then maybe mutual funds are better for you. But if you’re high risk for such stupid moves, I don’t think choosing mutual funds will make much of a difference. Instead you should get professional help….quickly, before it’s too late.



As for me and my house and my clients, we are going to use the most effective and efficient investment tools available to us, and currently that is ETFs. 



A final important point: ETFs and mutual funds are investment vehicles, but they are not investments in themselves. Your money doesn’t go TO an ETF, it goes THROUGH an ETF. Money goes through the ETF to the actual investment, which could be a company stock, a commodity, a bond, or a derivative of some sort.

Diversification is...



You know the cliche: don’t carry all your eggs in one basket. In finance, it means diversify your “holdings” or investments. 



But who wants to be the guy trying to haul around 5 different baskets? And even though I might split my eggs between 5 baskets, I still get scrambled eggs when I trip. And I have higher odds of falling if I’m trying to carry 5 baskets instead of just one. 



Honest question for all of you raising chickens: do you really follow that cliche advice and carry more than one basket out to collect your eggs? I would guess most days, you’re not even using a basket, but just folding up the bottom of your shirt. 



“So Wake is against diversification and cliches?! I knew this guy was a financial advising heretic!” 



Let me be clear for the purposes of truth and legal liability: Wakefield Hare is a proponent of the principle of diversification and uses it consistently for his clients. But there is a “but.” 



I think diversification is largely miscommunicated to and misunderstood by American consumers. Diversification is not the only way to invest. In fact, northwest Missouri’s collective net worth is likely undiversified. Today, farmers in our area have most of their financial well being tied to two commodities: corn and soybeans. 



I have personally felt the sting the lack of diversification in agriculture can cause. My dad borrowed to buy a hog farm just north of Savannah in the 1980’s. It was a solid hog operation, but the market for hog prices collapsed in the late 90s, which sank most of the hog farms in the Midwest. My dad was smart and diligent, but debt and terrible timing ruined his investment and put our family in a really tough position. 



My dad was not diversified. And when things didn’t work out on his single large investment, the consequences reverberated into areas of our lives you wouldn’t even guess had financial connections. 



Because of that experience at an influential age, you would think I would curse the idea that anyone would risk being undiversified with their finances and investments. But that is shallow thinking, because others, including many in our own community, have done very well by being undiversified. 



The issue isn’t diversification or non-diversification. The real issue is naivety to the risks at stake. When you are undiversified, you risk a single event sinking your entire investment. Are you truly prepared to lose all you own and “start over” financially midway or even late in life?



When you are diversified properly, you risk accepting much lower returns in the long run. Someone who bought a balanced, well-diversified portfolio of stocks 20 years ago has made less money than someone who only owned Amazon, Facebook, Apple, Dollar General….or even Monster Beverage stock. But a diversified portfolio would have done better if you had only been holding Wal-Mart stock.



What’s the takeaway? For most people, diversification provides essential benefits, but it’s not perfect and there are costs to diversification most are unwilling to consider. Being undiversified can be dangerous. But just because something is dangerous, doesn’t mean we write it off. Otherwise, none of us would ever leave our beds.

These the Fees

Education is a challenge, because you have to trust the information you are receiving. Last time I recommended your local library as a great place to begin learning. But today I want to provide some education for you. Here is a primer on the cost of investing and advice which will help you discover the value of the advice available to you.

Product commissions: These are charged based on a percentage of the money put into a financial product, which goes to the salesperson and company recommending the product. An example is an annuity which normally carries a 7% commission. That’s $7,000 on a $100,000 investment.

The salesperson may say the commission is not paid out of your investment and you’ll still see your full $100,000 on your statement, but consider two questions: First, if the money doesn’t come from the investor’s investment, where does it come from? The company? But where do they get their money? It’s always the investor’s money paying the commission, however indirectly.

Second, can the investor get the full $100,000 back out next month if something changes? Not without extreme costs. If you want your money back before a certain period of time, you’ll likely receive your initial investment minus 1-12%, depending on how long you’ve held the annuity.

Many mutual funds also have commissions. The commission is called a sales charge, and the upfront sales charge can climb up to 5.75% on the initial investment. The percentage depends on which share class you’re put in and how much is invested.

And because one share class has a lower upfront sales charge than others, it doesn’t mean the salesperson is doing you a favor. If there’s a lower upfront sales charge, you’ll likely be charged higher exit fees (called contingent deferred sales charges or CDSC) or higher ongoing expenses which leads us to…

Mutual fund (and ETF) expenses: Mutual funds often have recurring fees called 12b-1 fees. A large portion of this fee will go to the salesperson and company who invested you into the fund. It’s also referred to as a distribution fee. To figure out how much it is, do an internet search for your fund and then find the expense ratio. The 12b-1 fee is normally included as a part of the expense ratio.

Expense ratios on mutual funds and exchange traded funds (ETFs) can range from near zero all the way to 2%. Beside 12b-1 fees, the expenses a fund charges goes to managers and administrators of the mutual fund.

To get more information on these expenses, as well as sales charges on funds, do an internet search with the ticker symbol of your fund and “prospectus” (i.e. XYZ prospectus). Within the first few search results, you should see either a PDF link or a page containing a PDF link to your fund’s prospectus. Once you have the PDF prospectus, hit CTRL+F on your keyboard (or command + F) to do a document search, then type in any of the following to find what you’re looking for: 12-b, management fees, sales charge.  

Transaction fees: This is the cost of buying or selling a stock, bond, mutual fund, or ETF. Often an investor can see this cost directly deducted from their account, yet other times it’s absorbed by the fund or the brokerage company and added to the ongoing expenses.

For individual stocks and ETFs, transaction fees have begun disappearing. However, buying and selling a mutual fund will often still come with a $10-$30 transaction fee.

Advisory fee: The advisory fee is normally deducted from the investment account managed by the financial advisor. This fee ranges from 0.15% for highly automated advisors (like robo-advisors) to 2-3% for hedge fund managers. A 1% fee is usually thought of as average but is dropping thanks to competition and efficiency.

Retirement plan expenses: Many of the expenses paid by your company’s retirement plan fall into the categories already listed, but they are worth listing separately because they are often paid by your employer. Sounds good for investors, right? Only if your company has made sure they are getting good value for the expense. If not, money is wasted which could otherwise be added to your account through a higher employer contribution.

To determine the expenses on your company’s retirement plan, you may have to dig in the weeds of your plan’s documents, and even then you could come up short of having all the information. Your next place to turn would be your company’s financial statements, which should list if they are paying a third party advisory firm and how much. You could also ask your company’s ownership.

Flat fees (hourly or retainer): These fees are normally paid out-of-pocket (by check or deducted from your bank account) as opposed to being deducted from your accounts. These are the most transparent of all the fees listed.

If you familiarize yourself with these fee types, you’ll be more equipped than most investors to make optimal decisions with your investments and finances. You can’t call yourself a good steward of your resources and not know what you’re paying for something.

2 Keys to Determine the Value of Advice



In last week’s blog, we began looking into why so many people understandably distrust the financial services industry. Consumers can’t make an informed value determination because they don’t know how much they’re paying for financial advice or products.

So what is a consumer to do? Hold tight to these simple keys: communication and education.

##### COMMUNICATION

If you want to know the fees, commission, and expenses you are currently paying or would pay, your most powerful tool is to ask your advisor.

Be sure to watch the advisor’s reaction when you ask about expenses. Does he confidently look you in the eye and maintain calm composure? Does he give you a clear and understandable answer? He should, because as much as fees and expenses mean to a family’s long term financial well-being, the advisor should know the answer to the question and clearly communicate the information to you.

Be ready to ask the question about fees and expenses more than once. And if you still aren’t sure you are getting all the information, just sit silently as you consider the advisor’s answers. Silence is a powerful tool you can use to get more useful information, or a commitment from the advisor they will work to get you better answers.

Still not confident you’re getting all the information you seek? Ask your advisor’s competitors. Call up a competing financial advisor, tell them exactly what you are doing, and ask them to help you figure out all of your fees and expenses.

Why would competing advisors help you for free? They see an opportunity for new business if they can show you they could provide more value than your current situation.

Still, these solutions still put you at the mercy of the information the advisors know or are willing to disclose. That’s why you need a second key…

EDUCATION

Everyone has their own agenda as they publish information, so it’s vital to gather information from multiple sources, not just your advisor. Good news: quality information is more accessible than ever before. But always seek to understand who is giving you information and their motives.

Where would I start if I were you? I would head to my local library and spend one hour in the 332 section. Published books are more likely to give you solid information and less likely to lead you down obscure paths, as is prone to happen with Google searches. But be sure to tune in to the next blog post when we’ll go over the primary investment expenses that could be weighing your assets down.

Two simple keys: communication and education. Those can completely alter the course of your family’s financial plan. Even if you met your advisor at church (or especially if you met your advisor at church), you have to be willing to drill him on commissions, fees and expenses. Don’t be afraid to ask, it could literally be a million dollar question. And educate yourself. You don’t have to become an expert, but a basic understanding of the financial fees playing field will empower you. It’s worth your time. Avoid financial pain by knowing what you’re paying.

Feel the "Paying"



Every decision you make is related to the value, real or perceived, you receive. Take your morning: is the $2 coffee worth the warm drink and cascade of caffeine in your system?  Is there value in brushing your teeth for a minute to help ensure dental health and zap morning breath? Is driving 5 mph above the speed limit and risking a ticket worth getting to work 2 minutes earlier? Is the relief of avoiding a client’s call one more day more valuable than taking care of their needs immediately?

You make those decisions every day with hardly a thought. Other decisions don’t come as natural, such as deciding if your family should get help with their financial plan or investments.

Why is it a tough decision? I have a theory and it starts with a question. Do you know exactly how much you are paying or have paid to a financial services professional when you’ve engaged their services? You don’t, but hardly anyone does.

Why does nobody know such an important piece of information? Because it’s a pain to figure out what you’re “paying”. But without knowing the cost, it’s impossible to determine the value of financial advice.  So you’ll try to figure it out on your own, skip the advice entirely, or simply find the guy or gal in the industry you can trust and say “take care of it and spare me the details”.  

It shouldn’t be this way. Many people hate the financial services industry because it’s greedy and deceptive. The hate is often justified. But what’s the solution? Here’s one:

To improve advice and therefore perceptions of financial services, empower consumers. When a consumer is empowered with good information, they will flee from greedy and deceitful businesses. Consumers of financial advice need and deserve to know what they are paying. They should demand to know what they’re paying. But it is no one’s responsibility but yours to figure out the cost of financial services. So let’s shout it from a mountain: it’s time to FEEL THE PAYING so families can engage in financial advice with confidence.

The challenge: the financial services industry would rather not share this information. So it’s no surprise the commissions, fees and expenses are buried deep within the products or services sold. And by buried deep, I mean many advisors themselves cannot quickly ascertain how much of your money is being paid in fees, commissions, or other expenses.

But take heart, you are not a hapless victim. To help you determine the value of financial advice for your family and feel the paying, be sure to pay attention to the next blog post where we’ll cover the 2 keys to finding the real value in financial advice, and how to not fall prey to the “Helpers” that often do more harm than good.

Meet the Gotrocks



If I were asked to form a Mount Rushmore of investing, I’d include Benjamin Graham, Warren Buffett, Daniel Kahneman, and Jack Bogle. If you ever search for investing inspiration, read the writings by or about any of these men, and you will likely discover something profound.



One such writing was by Mr. Buffett (known as the “Oracle of Omaha”) in his 2005 shareholder letter to Berkshire Hathaway stockholders. His annual stockholder letter typically contains some simple, yet profound insights. In his 2005 letter, he used an allegory to make a point about successful investing. I use it as a bedrock of my own investment philosophy for Greater Than Financial.



The story is about a family, the Gotrocks, who own all of the United States stock market. This means they are the owners of all of the companies in the US, both bad and good, and are entitled to all the dividends and gains in value in those companies. 100% of the productivity and resulting gains of those companies belong to the extended Gotrock family.



The US is very productive, so it’s a prosperous scenario, until “the Helpers” arrive on the scene.



The Helpers go to work convincing some of the Gotrocks family members, let's call them the “cousins”, they can increase their particular share of the gains compared to other family members. All they have to do is buy some particular US companies the Helpers advise are “good bets” while selling the companies the Helpers think are laggards to others in the family. 



These Gotrocks cousins are already experiencing the prosperity of owning all US companies in equal amounts with the rest of the Gotrocks family, but the prospects of gaining a bigger share of the pie is too tempting. So they take the Helpers' advice and buy more of some companies, and sell parts of other companies, of course paying a substantial fee to the Helpers for their advice.



Now here’s the dilemma: all of these US companies are going to continue to produce the same amount of gains and dividends no matter who holds what share of ownership in each company. So the overall size of the pie stays the same for the Gotrocks family. Except now, the Helpers have come in and taken their own slice of the pie, via their advice fee, by appealing to certain family members. The Helpers are better off, but the Gotrocks are worse off.



In this story, your family is the Gotrocks, and the financial advice industry are the Helpers. Your family, by subjecting your investments to the fees of the Helpers, is likely lowering the productivity (aka the returns) of your family’s assets. Also, research tells us the investments of those who take and pay for the advice of the Helpers typically end up performing worse than those who buy and hold the entire market.



Moral of the story: beware the Helpers. Know who you are paying and what you are paying for financial advice.

The Stock Market, in YOUR words

We often fear what we don’t understand. It’s part of being human. There is such a thing as healthy fear, but it’s rarely good to be controlled by fear. Research discovers more every year about how dangerous fear-induced stress is, not only for our mental health, but also for our physical health. 



So answer this: does the stock market cause you fear? When markets drop 10, 20, or even 50%, it seems like the stock market produces nothing but fear! 



When the stock market crashed over 40% in the Great Recession of 2008-2009, I was asked where exactly all of the value of those stocks went? How does trillions of dollars of value simply disappear? 



It’s not easy to explain or understand. And that’s the point. Because “finance” and the “stock market” and “derivatives” aren’t something we can pick up with our senses, they are difficult for our brains to understand. And when we don’t understand something, we start to get fearful when such things start to adversely impact our lives.



Here’s your task: either to a spouse or friend, or perhaps in writing, explain what the stock market is and how it works in your own words. I guarantee this will be a short, yet worthwhile exercise for anyone reading this article because it will either allow you to practice your communication of a complex concept or, most commonly, it will reveal your true understanding of the stock market.



There’s no shame in not understanding something. That describes most of us most of the time. There is much more in this world we don’t understand than we do. 



So hopefully this quick exercise will prevent you from making a huge mistake with your hard earned money: Don’t risk what you can’t lose on things you don’t understand.



“But Wake, almost every successful person says I should be invested in the stock market.” And I would agree. Smart stewards of resources should likely have stock market investments. But it is foolish to invest without being able to succinctly explain to your family or friends exactly what you put your money in. 



If you are struggling with explaining what the stock market is and how it works in your own words, then a bit of education will go far. Shoot me a message ([wake@greaterthanfinancial.com](mailto:wake@greaterthanfinancial.com)) and I will be happy to send you a list of resources to level up your understanding quickly.



Here’s the great news: as understanding increases, fear decreases. Fear can make us sick, it can cripple us, and even enslave us. Take your antidote to fear. Pursue knowledge which leads to understanding. If you do that, the best is yet to come!

Different Strokes for Different Folks



It is difficult to compete in the stock market because information and trades go astronomically fast. Instead, our best bet is to buy and hold stocks for long periods of time where we can profit from the long term value of productive companies. However, just because we don’t compete in the high speed, cut throat short term trading of stocks, that doesn’t mean we are immune from its effects.



Which leads to the second key point people need to understand if they want to invest. There are millions of participants in the stock market, most of whom have very different goals and perspectives than you. 



But the person sitting in an office or basement day trading (which is trying to make money by buying and selling multiple times per day) inhabits the very same market as those who are passive, or “buy and hold”, investors. 



We watch the values of our accounts go up and down as stocks trade daily. And although we typically don’t need to sell stocks on any given day or month, we are still highly aware of how the fluctuations in value affect the value of our money and therefore our perceived freedom in the future.



But all of those millions of stock market participants have different reasons for trading stocks. One person sells 1,000 shares of company XYZ because he suspects the CEO of the company is going to retire soon. Another person buys 5,000 shares of ABC stock fund because he’s excited about the prospects of a federal payroll tax holiday. Another family sells 5% of its holdings in the LMNOP fund because it wants to use the proceeds to pay off their mortgage. Another man buys 100 shares of company X and then sells it 5 minutes later because his technical charts signal for him to do so.



These people have different reasons to trade but all trade in the same market, and every trade affects the value of the stock price. And this happens on repeat millions of times per day. And we “feel” every price movement if we watch the value of your accounts. However, nearly all those trades and price movements are completely irrelevant to your long term goals and the reasons you invested in the first place.



You may be tempted to make choices about your investment based upon all of these irrelevant price movements. And if you give into the temptation, you find that your long term goals will likely be thrown off course. Don’t sacrifice your goals simply because other investors in different parts of the world with different goals traded stocks for reasons that are unknown and matter little to us.



There are thousands of different types of investors. You are one of those types. And I hope your type is the one who makes sound, long-term investment decisions based on a plan. But always keep in mind, you are trading and participating in the same market as all those other types of investors. Don’t be swayed by the noise and price swings caused by those other types. Stay focused on what matters and what you control, and the best will be yet to come.

Stock Market Feels



Money can elicit strong feelings in all of us. Great exuberance and great sorrows. Big hopes and big fears. We value money so much because we see our personal freedom growing or shrinking as our money does the same. 



There are few places where you can watch the value of your money grow and shrink in value as rapidly as it does in the publicly traded stock market. Your house changes in value every moment, as do your vehicles, as does the value of your work, but we don’t see those changes, so they don’t drive us bonkers. However, we see values change in publicly traded stocks in real-time, every single business day. 



Many families have significant portions of their net worth in market investments, so we are captivated by the stock market. We aren’t just watching the value of stocks swing in value. We are really watching and feeling the continual swing of our personal level of freedom.



I don’t believe it’s smart or healthy to tie how “free” we feel to how much money we have. There’s more reliable and consistent ways to find our freedom and value as humans. But we aren’t perfect people, and the reality is in the United States, our perceived freedom and satisfaction in life is largely tied to our net worth.



This creates an interesting and possibly toxic recipe. The pursuit of the euphoria of gains in value, or more typically, the avoidance of the pain of loss, clouds your judgement to make wise money choices. These emotions often work to sabotage your long term satisfaction by causing you to make choices history tells us do not work.



The pursuit of gains causes many to take too much risk, essentially gambling with their family’s financial future. A select “lucky” few might come out ahead, but most will lose, and lose big.



The avoidance of loss causes many to not take enough risk, essentially wasting the opportunity to let your resources be used productively, increasing your resources and increasing your options.



What’s more is the short term media cycle picks up on these feelings and reinforces them. It’s not the media’s fault, they simply give us what we want. But it doesn’t mean seeing the stock market’s movements reported on a weekly, daily, or even constant basis is good for you and your long term well being. 



That leads me to a confession. Although a portion of my job for my clients is to advise on investments, I rarely pay attention to what the stock market is doing on a given day. Because I advise my clients on their long-term plans, goals and dreams, what happens on a daily basis in the market is not relevant. What happens over 3, 5, 10, and even 30 year periods in the stock market is what matters to my clients. It could be downright harmful for me to put too much thought into the short term moves of the market.



I encourage you to put similar safeguards in place. Know yourself, pay attention to those feelings related to your money and the stock market, and keep aware of how the media influences those feelings.

The Biggest Money Questions Aren't About Money

Every conversation about your money is really a conversation about your values. It’s never about the money, but only about what the money can do for you. Imagine having a $100 bill but no one will accept it and never will? Is it still worth anything to you? Not likely. The $100 is good as long as it can help satisfy your needs (in all their diverse forms). 

We humans are complex, and often our needs aren’t exactly clear. Imagine a scenario where you wake up tomorrow and you’re the only human left living. All of the real estate, all of the trees, all of the animals, all of the gold, all of the classic cars….they are yours. But you have no one to share them with. Are you satisfied?

Those scenarios help us see that while we do have basic needs independent of other humans, a life without relationships is largely void of the satisfaction we crave.

A few years ago, in my pursuit to help clients not only manage their money well, but cause their money to deliver long term satisfaction, I came across three profound questions. If you spend time with these 3 questions and carefully consider each, perhaps writing down the answers, there’s little doubt your approach to handling your resources, especially your time and money, will take on new power.

The questions are taken from The Kinder Institute of Life Planning. Here’s the first:

I want you to imagine that you are financially secure, that you have enough money to take care of your needs, now and in the future. The question is, how would you live your life? What would you do with the money? Would you change anything? Let yourself go. Don’t hold back your dreams. Describe a life that is complete, that is richly yours.

The next question goes deeper:

This time, you visit your doctor who tells you that you have five to ten years left to live. The good part is that you won’t ever feel sick. The bad news is that you will have no notice of the moment of your death. What will you do in the time you have remaining to live? Will you change your life, and how will you do it?

The final question goes deeper still:

This time, your doctor shocks you with the news that you have only one day left to live. Notice what feelings arise as you confront your very real mortality. Ask yourself: What dreams will be left unfulfilled? What do I wish I had finished or had been? What do I wish I had done? Did I miss anything?

My hope is these questions will give you a jolt of recognition and a wellspring of motivation to no longer handle your life and money apathetically. There is too much on the line.

Bringing Your Budget to Life

Your family has probably followed a budget, or at least drafted a budget, or maybe downloaded an app, or at least talked about doing so at some point in your adult life.



But what impact does your budget have on your daily decisions? As life happens, how front-of-mind are those financial figures? If you're like most, your budget gets attention once a month, once a year, or most often, only when there’s a major purchase you want to make or your debt becomes suffocating. 



Here’s the awesome part: if your family is currently “keeping it together” without unleashing the power of a meaningful budget for your family’s daily decisions, then the best is certainly yet to come. If you can not only budget your cash flow, but budget meaningfully and well, then you can experience a level of empowerment most families only dream about.



Here’s the foundation: plans about money are really plans about the use of our resources. and plans about the use of our resources are really plans about what is important to us. It’s time to make decisions that most accurately reflect what is important to your family, and you can’t expect that to happen by accident.



Your budget, approached in the right frame of mind, is about freedom and empowerment, not restriction, as many perceive it. And it's not just the empowerment of the family decision makers, but can also serve to give your children and grandchildren a clear sense of direction in life.



To bring your budget to the prime mental real estate of your decision making, you have to engage it multiple times per week, if not daily. This may seem like an impossible task, and it is if you don't currently use budgeting tools that you're comfortable with. 



You currently have access to hundreds of robust budgeting platforms, amongst other tools, but most who use these tools lack an understanding of their capabilities. The solution: take the time to develop and own your own personal budgeting system. The more you know and own your system, the more comfortable you'll be with it, and the more comfortable you are with it the more you'll use it.



Another thing to remember: the budget will only give output as good as its input. If your budget input is done out of a sense of obligation instead of inspiration, it will rarely give you meaningful output. 



The meaningful input stage will not come until you're confident in the tools you are using. Thank God we live in an age where those tools are more accessible and robust than they've ever been in history. If you can't find a budgeting tool that works for you, then you have to question how committed you are to your family’s values. It is that essential.



If you’re intrigued, your first step isn't to immediately implement a new budget system for your family. That would be overwhelming and a surefire way to prevent you from taking meaningful action. The task for you is to answer one question: are you confident and comfortable that your use of resources accurately reflects your family’s values? 



If your answer is anything but a resounding “yes!”, then you already know your next step: reengage your family’s budget. That might look like finding a whole new system. If you are already comfortable with your family’s budgeting process, ramp up engagement. Make the investment in your family to give your budget the quality, thoughtful input it deserves. and watch your entire family be empowered.

Investing Isn't as Powerful as You Think



Making money by not really doing anything sounds awesome. It is the reason why many are attracted to be savvy investors. If there is an opportunity to have my money do the work of making more money, you and I should be smart enough to figure it out, right? 

The truth is, we can, and we should, make money in our investments over time. But, the odds of our investments making enough money to sustain, or increase, our lifestyles before we reach our 60s are extremely low. 

You may know families who made a lot of money investing and believe they are the proof that investing alone can lead to a great lifestyle. But what is not visible is the role consistent contributions played in growing that family’s wealth.

That’s great news for you and me, because it means there isn’t secret investment knowledge that needs to be obtained to reach financial independence. Instead, we simply have to come up with substantial investment contributions. How hard can it be? All we have to do is increase our income or decrease our expenses. That’s all...we...have to...uh...do. I know...I was hoping for an easier way, too.

However, the media, your neighbors, and worst of all, your financial advisor only want to talk about investments. Well tune ‘em out because they are all wrong to put so much focus on what investments you are, or are not using. Do you want financial independence? Then you simply have to follow 2 steps: manage your expenses and increase your income. 

“I wish I would have done that when I was younger, but I’m too late now!” I hear that line often. But an old proverb says this: the best time to plant a tree is 20 years ago...the second best time is today. If you’re still here and believe you have life left to live, then what you do today matters! It is true that the sooner and younger (whatever “young” means to you) you take control of your expenses and increase your income the better. 

If you want to see some results fast, start with a plan for how you spend your money. A little can go a long way when trying to manage your expenses wisely. In fact, if you were to do just one thing for yourself this week, be sure it’s to write down all of your expenses on a notepad or spreadsheet. That exercise alone has been proven to help us make better choices.

The longer term, but even more powerful, step is to set a plan to increase your income. Your time is powerful. Many people are ready and willing to pay you for your time. And the more you increase your skills and experience, the more powerful your time becomes. There’s many ways to get that done. The best is to get as much experience and education as possible. Not all experience and education is equal though...seek some wise counsel as to the best type of education and experience for you. 

If you actively find ways to increase the value of your time, and thereby increase your income, you’re going to have a lot of options to build wealth. Mix that with spending your money wisely, and prepare yourself for a level of financial freedom most only dream about.

What I Control During the Next Presidential Administration

What media sources do you let in? Fox News, MSNBC, CNN, The Atlantic, Wall Street Journal? What about social media? How often are you on Facebook, Twitter, or Instagram? How do you feel after spending time with any of those media sources? How much of what you saw or heard impacts the things that are most important to your well-being?

The most important part of the next 4 years **isn’t** the president of the USA. The most important part of the next 4 years is ***you***. And even more particularly, the most important part of the next 4 years is your ***mindset***. 

Even if you find that the winning administration is going to impose new policy that directly changes your life, it becomes even more important for you to focus on the things that you can control, like your mindset and your ability to produce value for others.

And there lies your and my greatest power of the next 4 years. And the next 40 years. 

***Relentlessly find ways to produce value for others.***

It’s not only the powerful mindset after the “most critical election in our lifetime” has ended. It’s also the most powerful mindset for your financial plan, and therefore, your life!

If you relentlessly pursue ways to produce value for others, there are very few circumstances I can think of where your problems don’t go away.

*“But I just lost my job!”*

Who said your job was the only way to produce value? In fact, your free time may give you the kind of freedom you needed to see that your “job” was a very shallow way of expressing your ability to produce for others.

*“But I’m just a student!”*

Yes! Students who are truly trying to learn new things (or in “discovery mode” as I like to call it) have so many opportunities to enhance their value to the world. And they are typically the most flexible to shift to a more valuable way to serve if their current path isn’t productive.

*“But I just got diagnosed with….”*

That hurts! But your new restrictions as you try to battle back to physical health come with some very unique opportunities that most humans simply can’t do. The most valuable of which is the forced slow down in your life that will increase your awareness of the most productive thing a human can ever do…..which is to truly connect with another human.

I’m sure it hurts if “your” candidate didn’t win this week. And hope you can live off the high for at least a couple weeks if “your” candidate was victorious. It’s likely we’re all overreacting this week. So let’s all start focusing on this: how can I serve and produce for others? You’ll never go wrong, no matter who is in DC or your state capitol.

Live a Rich Life: Hosting an Exchange Student


In June, one of the most incredible experiences of Sara and I’s lives came to an end. But we couldn’t be more excited. How could that be?

While watching the 2018 Winter Olympics, Sara and I decided to research Young Life’s exchange student program called Amicus. We had heard about the program via email for about 6 months and it sparked our interest. So when we saw the international parade of the Winter Olympics opening ceremonies, we thought, “let’s take a real look at this!”

A few days later, we had picked a 16 year old from Germany to live with us for 10 months! It was an adventure for all of us, and one that we are excited to share via the interview with Annika in the above video. Please watch it!

These are the kinds of experiences that don’t help your net worth, but definitely help you live a rich life. And what’s the point of our money if it’s not helping us live richly?

Having an extra person in our household for nearly a year has a financial, time and energy cost. But it was SO worth it because our family now has a relationship with Annika that is priceless! She is forever part of our family and we will never forget her, her gracious heart, and the memories we shared together.

Be sure to take time to reflect on the opportunities you may be missing to trade in some of your skills, time, energy AND money for a rich life. A life that is **_greater than_** what you or any others have been living! Amicus was a great example of an opportunity we very well could have missed, but are so grateful we didn’t.


Crucial Conversations


Crucial Conversations is a child of [The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change](https://www.goodreads.com/book/show/36072.The_7_Habits_of_Highly_Effective_People_Powerful_Lessons_in_Personal_Change "The 7 Habits of Highly Effective People Powerful Lessons in Personal Change by Stephen R. Covey"). Crucial Conversations does a deep dive into applying the 7 habits into our dialogue.

Crucial Conversations' main premise/question, "What do I really want out of this conversation?", is intuitive yet powerful. People rarely exert the will or know-how to slow down enough to consider that question when they try to dialogue. So our conversations end up careening out of control and we all walk away worse off.

And if we will believe it, it is actually our fault we lose control! We sabotage our desires by not slowing down long enough to engage other people thoughtfully.

It is true, we do not control the people we engage with. So when they don't act or speak like we desire we are tempted to believe we have no options. "This person's behavior is keeping me from what I want and I have no control....I'm a victim." Does that mean we have no options? Or are there ways we can speak and behave that empower us to get what we want out of even very difficult situations? Crucial Conversations' theory is that we do have power.

The question above ("what do I really want?") is the one I will keep in the front of mind after this read, but the book actually has numerous tools to help deploy in our conversations and attempts at dialogue. Most of these tools have acronyms (ABC, STATE, CRIB), and the authors have helped by turning the tools into a [Crucial Conversations Model](https://greaterthanfinancial.com/wp-content/uploads/2019/06/Crucial-Conversations-Model-Poster.pdf) that would be easier to commit to memory than words. However, the only way these tools become powerful is if one practices them. Over and over and over.

The most effective practice would be role playing. However, role-playing makes most so uncomfortable, they won't try it. However, if you find that you have multiple relationships that cause you stress instead of adding joy to your life, isn't the practice and the role-playing worth a shot? Is there any chance you see no positive difference in those relationships?

#### So Many Applications

It was difficult for me to keep my brain focused on particular applications of the book's tools. My mind kept hopping from applications in my family, to my church family, to my role as President of the Chamber of Commerce, to my client interactions, to Young Life leaders, to Young Life students, to my community, to my friendships.

If I had more time, I would reread the book at least a few times with the goal of focusing on one particular area of application each time. I'd start with my family, because they are the closest to me physically and emotionally. Then I would read the book again thinking about client interactions. My hope is that I can broadly and effectively apply the tools to those areas after reading the book only once. We'll see how it goes!

#### Should you read?

This book has principles that can be applied to everyone and every organization and so I would recommend it to all. I would love to see a kids version of Crucial Conversations meant for kids between 6 and 12 years old. But parents modeling will be the best teaching tool our kids can have to help them learn effectiveness in their conversations and relationships.

As a leader in a few organizations (Young Life, Church, Chamber of Commerce) I will strongly encourage others in those organizations to read or listen to this book as well.

The toughest challenge to apply these principles will be truly dying to our own desires and genuinely wanting to see others' desires gratified. Most are simply unwilling to want that and it will take a change of heart to get there. But what if this book is the beginning of changing our heart? Seeing that our hearts are actually the problem instead of others?

In my experience, I have often been my own worst enemy keeping me from the fullest and most gratified life I was created for. Everyday I come to believe that a bit more, and these types of books certainly speed that process.

If you're ready for that type of journey, then move Crucial Conversations towards the top of your reading list.


Happy Money


More money → more choices → more happiness. Right? But what about “mo money mo problems”? Or what about this:

[![](https://greaterthanfinancial.com/wp-content/uploads/2019/01/050be3a7ee7c445cd77f91af77d919e7-300x199.jpg)](https://greaterthanfinancial.com/wp-content/uploads/2019/01/050be3a7ee7c445cd77f91af77d919e7.jpg)

What is the truth about if money can make us happy and if so, how? That’s what _Happy Money: The Science of Smarter Spending_ addresses.

I had heard one of the book's authors, Elizabeth Dunn, speak at [XYPN Live](http://info.xyplanningnetwork.com/xypn-live) last September. She was the best speaker of the conference, providing numerous “that’s interesting” and “I’ve never thought of it that way” moments. Her book is simply an expansion of those same thoughts.

**Does money buy happiness?**\
Yes. That’s it….yes, money does buy happiness. It’s true and research backs it up, and my own experience backs it up, and it’s likely yours does as well.

BUT is happiness subject to the law of diminishing returns? That’s economist speak that says more money eventually does not buy more happiness. In fact, it doesn’t take long to run out of space to buy happiness. How long? Research says that it’s rare to increase “happiness” with more money after your annual income reaches \$75,000. [Here’s the research](https://www.pnas.org/content/pnas/107/38/16489.full.pdf) if interested.

All of those findings are actually established in the prologue of the book….really, all within the first few pages. The rest of the book argues there are ways to make spending decisions that will make us happier, even after our annual income goes north of \$75,000.

_Happy Money_ lays out 5 ways to spend money research suggests will make us happiest. The book doesn’t keep you in suspense or drag out the revelation of those 5 ways. It tells you the 5 ways in the table of contents, and then again in the prologue, and then uses the chapters to elaborate on each. Here are the 5 strategies and the meat of the book:

**Buy Experiences**\
In a culture of plastic, throw-away goods this point seems obvious. But the goods the authors emphasize aren’t plastic toys. The authors point out that bigger, nicer houses and bigger, nicer cars will deliver less happiness than if you bought minimal living quarters and minimal transportation and used the extra money to do awesome things.

Do awesome things, don’t buy awesome things. What you buy will always deteriorate and diminish, but what you do will live on as a cherished memory, that actually gets even more valuable as time passes. How cool is that….memories are an appreciating asset!

Do my experiences with clients and my own life confirm this suggestion? Absolutely. Bigger houses and, to a lesser extent, nicer cars have rarely satisfied my clients, and those two items are usually the double whammy that makes American family's budget so stinkin’ tight! Those families then feel budget pressure in all areas of their life, especially their work and the pressure created to make more money.

And another great part about buying experiences is you don’t have to find a place to store them when their finished….unless you count the videos and pictures (but that’s what Google Photos or the iCloud is for).

**Make it a Treat**\
It’s easy to believe there can be too much of a good thing. I still remember fondly reading The Chocolate Touch in elementary school. In the book, a kid loves chocolate so much, soon everything he touches soon turns to chocolate. The treat becomes a curse.

Some of our favorite things aren’t giving us the satisfaction they could because we indulge ourselves too often with them, says the research. Those things might include drinking a fancy coffee, driving a nice (or really, really nice) car, eating a nice meal, drinking soda, and more. So what’s the answer?

Simple. Take advantage of these treats on a limited basis and your satisfaction with them will go up, producing more happiness for you.

Scarcity makes anything more desirable. I see this often with my children. When there’s 10 kids lined up to say, take a go-kart ride, there’s much more desire to take the ride simply because 9 other kids also want to do so. Putting the kid on a go-kart with no one else lined up waiting for the experience doesn’t take away all the fun, but it does change the experience.

We have control over making any treat more scarce in our life, and can manipulate our own ability to enjoy our “treats” more fully.

**Buy Time**\
Carl Richards, in his book The One Page Financial Plan, makes the point that we are always exchanging 4 resources for one another: money, energy, skills, and time. In _Happy Money_, the authors suggest we need to be more eager to exchange our money for more time, particularly for the tasks we dislike.

Some easy examples are to pay someone to do your house cleaning if you hate it. Have someone else do your grocery shopping, or almost any task you despise for you via websites like Instacart or [Fiverr](https://www.fiverr.com/) or [TaskRabbit](https://www.taskrabbit.com/).

I think this principle applies the best when thinking about how we work and how much time we spend working. You can’t buy time at work like you can when you hire someone to mow your lawn, but you can sacrifice compensation to find better work.

As a financial planner, I have come to believe that the single most impactful change a family needs to consider is how they spend their “working” hours. And yes, it will likely mean a decrease in money, but maybe not, and maybe not for long. And even if it’s a permanent decrease in comp, is it possible it’s still worth it if it makes you….happier??

It’s an extremely important point that this book doesn’t focus on because they are focusing on where we spend our money, but the principles apply. Sara and I reflect on how we’re are spending our working hours at least weekly and if you aren’t doing the same, I highly recommend it.

**Pay Now, Consume Later**\
The pain of paying is real, and it can actively steal joy away from the things or experiences we buy. The solution? Separate the payment from the pleasure.

Actually, many people in the US are already well-versed in this. They swipe their credit card, they get their goods, and they don’t have to worry about payment for weeks! But we all know that’s not a winning strategy.

How about an alternative? What if we pay for things well in advance, that way by the time we experience our purchase, the pain of paying is well behind us, almost forgotten? Research says this is the answer to more happy spending.

An example could include a concert ticket purchased months in advance of the show, or a cake you pre-ordered from a student’s fundraiser at school.

I saw this applied most evidently by friends describing their trip to Walt Disney World. My friends loved their trip and gave me some tips on how I should plan my own family Disney trip. They insisted I had to get a Disney meal plan because it made it so much more enjoyable to eat meals and get treats in the parks knowing you didn’t have to shell out the \$8 for a Mickey shaped ice cream sandwich.

That family actually did have to shell out the \$8, and much more, for their food at the park, but they paid it months before when planning for the trip, so they had much more enjoyment at the parks.

For the record, I still don’t recommend getting the meal plan at Disney because you’ll end up spending way more on food than is necessary for a great time at Disney parks, and you’ll end up consuming way more calories than you want to. But don’t let a curmudgeon like me get in the way of what science says equals the happiest way to spend your money!

**Invest in Others**\
The final strategy for happy spending is to give your money away! The authors admit how counter-intuitive this seems, but their own lives and the research once again back up the principle. And I will wholeheartedly attest the principle of giving money away works like a miracle (impossible to explain, but has evident power).

The researchers mentioned in the book studied the effects of giving in multiple ways and found that being charitable with money has a whole host of benefits that are both physiological and physical. The only type of giving that wasn’t very beneficial was forced giving (where someone was required, say by an employer or a parent, to give).

As a person who believes God’s Word is true, it’s really enjoyable to see Biblical teachings confirmed by research and validated by our experiences in the world. This is definitely a point where a Christian could step in and say, “I can trust God when he asks me to trust Him, even to do a hard thing like give away my possessions.”

**Simple Ideas, Powerful Application**\
Any one of the five strategies above could lead to significant increases in your life satisfaction and well being, a.k.a. your happiness. The book is fun and easy to read and multiple stories and studies are shared to prove each strategy.

One word of caution from my perspective and I’ll put it in the form of a question: Is happiness really your goal in life? If we did everything this book suggested in all 5 areas, and the actions indeed made us happy, would we be satisfied? Unfortunately, I don’t think we would be.

What if you followed all these principles and life was going great, and you’re very happy, but then your spouse gets diagnosed with an aggressive form of cancer? Or the economy crashes and you lose your job? Or your child’s car gets hit by a distracted driver? These things are out of your control, yet they can take all your happiness in an instant.

In the past, I would have claimed that all I want is to be happy. That’s all most people want. The goal for myself though has shifted away from happiness, and onto lasting peace.

When someone has peace they are often going to have accompanying happiness. But happiness isn’t required for peace. And all of those mentioned nightmare scenarios can come, and they would steal our happiness, but they’ll never take our peace….if our peace is invested in something greater than the resources and experiences of this world.

Granted, this book could be called Peaceful Money and all the applications would still hold true (and they probably would have sold less copies). Almost the entire book agrees with Scripture on how we use our resources, particularly the investing in others strategy.

The only knock on _Happy Money_ is the epilogue. If you read it you’ll figure out quickly why it’s difficult to digest.

The ideas of the book are strong and I do recommend reading _Happy Money_, however if you just want to know the key points to focus on you can get away with reading the prologue.

Always remember that the choices you make with your money, and all your resources, matter, and if you don’t have peace, or happiness, then seek help because peace is always being offered to you….freely.


Thou Shall Prosper


_Money is a great way to measure if you’re a valuable human being_. That’s my controversial one line summary of Rabbi Daniel Lapin’s book, _Thou Shall Prosper_.

#### **Why I read this book**

I have been going through as many of [Dave Ramsey’s “library”](https://www.daveramsey.com/store/Daves-Library/cDavesLibrary.html) recommendations as possible, and _Thou Shall Prosper_ has been on my reading list for at least 3 years.

The title alone is intriguing, but it’s usually refreshing to get a different cultural perspective on a familiar topic. I’m not sure how closely Rabbi Lapin’s thoughts on money align with Jewish culture at large, but he definitely gives fresh perspective.

#### **The substance**

Rabbi Lapin uses ten chapters to give ten commandments for making money. Some chapters are more “rich” than others, but all were worthwhile. This book is very philosophical (the author would say spiritual) but it is also highly practical. At the end of each chapter, there are bullet point steps to take to fulfill the money making commandment.

The major philosophical argument is that business gets a horrible wrap from the world at large, specifically the media and those with socialistic political views. Rabbi Lapin makes an effective case that not only is business not bad, but it is the very epitome of goodness, something valuable.

How is business so good? Simply because business transactions always involve at least two parties who voluntarily exchange one resource for another. When those exchanges are made, it makes at least those two parties better off than they were before. There are times when there is a winner and a loser in a transaction, but most times there are multiple winners. Everyone is often better off when exchanges, or trades, happen.

Rabbi Lapin says most people don’t succeed in business because their minds and hearts won’t allow them to, because we’ve been conditioned to believe business is evil.

#### **YOU are in business**

Before you start thinking this is only a book for business owners, hear this plea from Rabbi Lapin:

> Almost everyone is in business. You have your time, skills, experience, personality, and some other attributes to market. You have customers, clients, supervisors, employers, associates, bosses, or patients to please. You many not realize it, but you probably even have a board of directors. It consists of you as chairperson, perhaps your spouse, and maybe some of your trusted friends with whom you discuss your professional career. These people are also unpaid members of the board of You, Inc.

That’s an empowering idea if you can live like _you_ are the CEO and President of _You, Inc._ Not only that, but it may be one of the most secure ideas you ever let your mind chew on. Because if You, Inc. has one customer generating revenue (your employer), then that puts You, Inc. in a very precarious position. If anything disrupts that one “customer” of You, Inc., all of You, Inc. could be going under.

The alternative is to diversify You, Inc.’s prospects a bit and take more control over _your life and money_ as opposed to leaning heavily or entirely on an employer.

This book gave me a few different nuggets like that which shifted my thinking.

#### A distorted view of money

My biggest knock on _Thou Shall Prosper_ is the book’s tendency to elevate money to a very high status. Like dangerously high. However, Rabbi Lapin would classify my concerns as part of the negative conditioning this world has laid on business and money.

But as I examine my own experience and Christian Scripture, particularly the Gospels, I don’t see money as having a primary, or even a secondary, role in discovering the fullness of life we believe God created us for. Granted, Rabbi Lapin doesn’t have the Gospels of Christ as part of his Holy texts. But I do, and I think Jesus’s words and life give us the greatest example of how to realize full life and complete joy.

The view of money espoused is simply too high. Instead, I think a neutral money philosophy is the key. Money is not an ends and it is not good in itself, but it is also not evil.

Rabbi Lapin does point to an intense focus on serving and creating value for people as the road to monetary prosperity. And even encourages to not treat people as a means to material wealth. But despite those admonitions, the book does elevate money above people.

The good news is that under this philosophy, even if someone’s end goal is to accumulate as much wealth as possible, they will have to treat people really well and create a lot of value for other people to get there.

As for you and me, I believe we have to relentlessly emphasize that money, time, and our other gifts are all given to serve and love people. And merely using people to enhance our money, time, or other gifts will always leave us discontent.

Finally, Rabbi Lapin does very little to reassure those who have chosen to serve others with their lives and not be monetarily rewarded. The most obvious example in my life is Sara, my wife, who has chosen to dedicate her time serving her husband and children by doing full-time homemaking. Another example as the numerous folks who volunteer their efforts and take significantly reduced salaries to do work they love or feel is valuable.

In all of those cases, Rabbi Lapin’s money philosophy belittles those who have sacrificed in such ways. Money is not the best way to measure the value of a human, or human productivity.

#### **Recommendation**

I recommend _Thou Shall Prosper_, but not in isolation. I believe someone whose primary money philosophy is taken from the pages of this book will not clearly see how God designed us to use the resources and economies of this world. Get other perspectives, particularly from the Bible and then test them for yourself.


The Millionaire Next Door


I am quick to play the victim card in my head. When something doesn’t go my way or I don’t get something I want, I quickly find the outside forces I can blame on why I didn’t get my way.

Most people suffer from focusing on the external forces rocking our world as opposed to the internal feelings, motivations, and preferences that we actually have control over.

External conditioning (how forces outside ourselves shape our decisions) is the theme of _The Millionaire Next Door_ by Thomas Stanley and William Danko. The premise is that many people who have wealth, or what the authors call **PAWs (prodigious accumulators of wealth)** don’t live like most think they would. Basically, PAWs avoid high dollar luxuries and live frugally, and it’s that very nature that made them wealthy in the first place.

Contrast that to the **UAWs (under accumulators of wealth)**. These folks may have incomes north of 6 figures, but ultimately, they accumulate very little wealth because of their spending habits. They do what comes natural…they spend…a lot.

Granted, that spending allows them to experience some very nice vacations, some very name brand clothing, some sweet vehicles, and some very large living spaces. However, it does not secure their financial future. If these high earners were to have a disruption in their income, many could not go longer than a year before they would be completely broke and some much less time than that.

The contrast between the PAWs and the UAWs takes up the entire first half of the book. Then the authors took a shift that surprised me. In much of the latter half of the book, it turns into a parenting book!

The authors don’t focus on the contrast of PAWs and UAWs children. Instead, they focus more on what happens to children that causes them to develop into a PAW or a UAW as adults. Being a PAW does not guarantee your children will pick up on the principles that helped their parents accumulate wealth.

In fact, research shows that children who receive substantial financial support from their parents often never develop the ability to sustain themselves. They survive on what the authors call Economic Outpatient Care (dependency on financial gifts and support from the folks).

It is reasonable and seemingly virtuous for a parent to want to help their kid, especially for something such as advancing education via college. But the research showed that large financial gifts to kids can be incredibly dangerous to a child’s ability to become financially independent if such gifts are given before the child has already proven independence.

_Perhaps some parents prefer the children to be indefinitely dependent_, because with dependence comes a level of control that many parents desire to maintain over their children, or children-in-law, and later grandchildren.

Personally, I want to raise independent kids. And my guess is you do too. Not because I don’t like to keep my kids close or want them to come around often as adults. I certainly do! But I can’t guarantee how long I or their mother will be around. If something does separate us from our children, I expect my kids to mourn. But **_not_** because they are fearful of how they’ll find provision.

My take is this: our children have to experience pain in their lives so seeds of love, joy, patience, kindness, goodness, faithfulness and self-control can be planted **deep within their souls**. Powerful experiences are the only thing that can get those seeds deep enough into our children’s hearts to make them take root without our constant supervision or intervention. Those powerful experiences often come with pain.

This book shows the difference financial discomfort can have on our kids. Allow your child to know what work is required to be financial successful, or what it takes to earn and pay for a college degree. They deserve that from you!

But it’s not enough to limit the painful experiences to money. Our children need to learn the same when facing relational turmoil or when searching for answers to the universe’s biggest questions.

Before accusing me of masochism, know that I HATE pain personally. I fear pain much more than death. And I HATE even worse the thought of my (or others’) children enduring pain. But I would much rather have my children go through difficult experiences when I am there to comfort and catch them.

My heart breaks for the kids who are sheltered from pain/sacrifice all their lives only to get punched in the gut by the world once they leave home and feel completely unequipped to pick themselves back up.

I didn’t expect to get fired up about parenting when I read this book! But our children’s lives are the legacy that can be far more rewarding and enduring that our net worth. So it’s worth learning what other financially successful people have done to liberate (or handicap) their children.

Regarding this book and the recommendation to read it…I haven’t read enough other books to classify _The Millionaire Next Door_ as a must read. But I think if you find you and your family taking your cues from the world instead of making decisions based on your priorities, including spending and savings decisions, than this book will be of great value.

Finally, if you need some financial empowerment, this book can deliver. The case is strongly made that your ability to accumulate wealth rests solely on your shoulders and your ability to make wise spending (and earning) decisions. If you can do that, financial independence is within reach for you. And for all people…that’s news worth sharing.


The Great Depression, A Diary (or why buying low is so hard)


Benjamin Roth was a young lawyer living and working in Youngstown, Ohio during the Great Depression. In June of 1931, just over 19 months after the calamitous stock market crash in late October of 1929, Roth started journaling his thoughts about the stock market, banks, his law practice, politics, and investment opportunities.

After the stock market crashed in 2008, Roth’s son, Daniel, knew it was time to honor his father’s memory by publishing his father’s writings. The timing was right, and although we are now 8 years removed from the stock market lows of 2009, Roth’s accounts of the Great Depression refreshed my thoughts of our most recent economic catastrophe.

## The importance of this book

Beware the danger of hindsight bias. Here’s the definition:

_“the inclination, after an event has occurred, to see the event as having been predictable, despite there having been little or no objective basis for predicting it”_

It is a near impossibility to keep our hindsight bias from kicking into gear when examining historical events. Our bias often leads us to overconfidence, luring us into making decisions for the wrong reasons, possibly damaging our lives and our loved ones along the way.

_That is exactly why Roth’s personal account of the events and people of the 1930s is so valuable._ When considering the Great Depression, I have been quick to make judgement on how leaders, business people, and families should have reacted if they would have only kept their calm and made rational decisions.

I can’t say how representative Roth’s reactions to the Depression were of all who lived through it, but he is proof that there were people able to keep their emotions in check while the economy was collapsing around them. Roth’s dispassion is remarkable, especially considering he was responsible for providing for his wife and 3 young children during that time.

But Roth was not without reasons for hope even during dire economic times. He was an educated professional, and as an educated man, he had knowledge of history to rely upon.

Most historical market charts used today start in the 1920s which causes the history of markets before the 20s to be downplayed, if not forgotten.

However, Roth had a high awareness, not only of the stock market and investments in the 1920s, but also of economic recessions in the United States prior to the Great Depression. Roth didn’t even own stock when the Great Crash hit (only 2.5% of Americans did), but he was highly aware of stock markets happenings and history.

Roth often references the crashes and recessions of the 19th century, and uses them to forecast the length, severity, and opportunity of the Great Depression. Many of his predictions are far off (just like everyone else’s of that time…and today). But many of his insights were remarkable. The richest part of Roth’s diary is his predictions of the future and the later comments he made about his predictions and whether they were right or wrong or very wrong.

But therein lies the tragedy of Roth’s diary: _he had fantastic insights and admirable emotional self control, yet he was still unable to take advantage of the investment opportunities the Depression offered_. In fact, only an elite class was able to take advantage of the rock bottom asset prices because only they had surplus income/capital after they made sure they could provide for their families.

## Why buying low is so hard

Starvation is not a threat in 21st century United States, and it likely wouldn’t be even if another depression hit. But the same dilemma that kept Roth from taking advantage of panic prices in assets in the 30s still keep people from doing the same today. Why is that?

The dilemma is that the only time assets lose significant value is when the economic stability of the future is jeopardized and uncertain. It’s at that moment when a working family can’t rely on their ability to earn an income, because their business may dry up or they may be laid off. So instead of looking for investment deals, a family pays off debt to lower their risk, or they increase their savings, or they use all they have to buy necessities. _And the opportunity of a lifetime drifts by_.

However, hindsight bias kicks in again. If we truly knew the opportunity of 1932 or 1939 or even 2009, there is no doubt we would have made some radical choices to get any assets we could invested in the stock market or other assets like real estate. But in the midst of those times, investing looks like foolishness, not opportunism.

Most discouraging about those missed opportunities is that even when someone recognizes the opportunity _and_ has the resources to take advantage of the opportunity, it’s still not certain they’ll profit!

Roth tells the story of a friend who had the wherewithal to buy 1000 shares of Warner stock in 1935 for 3 ⅛. The stock went to 18 in two years turning a approximately $3,000 investment into $18,000. Instead of selling out, his friend borrowed money on margin to buy more stocks. The crash of 1937 came shortly after, and his friend lost everything. Even someone who maintained the optimism to invest got taken down by the market…if only he had not borrowed to invest.

## Lessons for today

Roth comments often on the dangers of borrowing money to invest in anything. Sure, in a rising market it makes an investor much more profitable to borrow to invest. But markets have never, ever sustained their rises indefinitely, and at times, you get entire decades when the market crashes frequently, decimating anyone who has borrowed to invest. Roth claims that every single person he knew who had borrowed to invest was wiped out in the 1930s.

Roth became a student of investing during the Depression, and he shares a lot of his education in his diary. Most of this investment advice is very conservative in nature, but an ultra conservative investment strategy is the _only_ way investors didn’t lose their shirt in the 1930s. Today, many people are comfortable taking considerably more risk than Roth would recommend in the late 30s. And if we never hit another depression like the Great one, then it is a wise strategy.

But is it a guarantee that we won’t hit another depression as long and deep as the Great Depression? Absolutely not. However, is it even remotely likely? That’s where the real debate lies. Much has changed since the 1930s. Our financial system today is much different from the system of Roth’s time. Perhaps we have the mechanisms to avoid another depression…or perhaps it’s arrogant to think we are different from those in the generations before us.

And that to me is the greatest value of this book. Although we live in very different times, we are not so different than the generations before us. We can learn from what they went through, but we cannot claim we have a superior enlightenment that will protect us from all catastrophe.

_We have to live and make decisions in humility, recognizing our own naivety and limitations_. If we do so, we still may fall victim to the disruptive forces of this world, but we will have the strongest defense available to us: **the willingness to educate ourselves.**

## Recommendation

I can’t recommend this book to every reader. Roth’s inclination to make investment strategy a major theme of his writings will bore and disengage many. To those who enjoy investment insights and the stock market, Roth’s book, along with editor’s James Ledbetter’s insight, are guaranteed to entertain and educate.

If you don’t fancy stock talk, I don’t recommend this book. However, it is essential that everyone spend time educating themselves about the Great Depression to 1) learn to be thankful for the era of plenty in which we currently live, 2) to humbly recognize how vulnerable the complex systems around us are, and 3) to have a basis for how to react in the case we go through something similar…or worse.

No matter what lies ahead of us, ultimately, if we understand the true nature of this world…_the best is yet to come._


My old 401(k): Here is what you really need to know

Not Buying It


I try to soak up as much perspective as possible on raising children well because 1) Sara (my wife) and I strive to help our own children become joyful, independent people and 2) Greater Than Financial claims to be suited to help parents do the same through their financial resources, and to back up that claim, I have to stay sharp.

So while perusing the library last month, Sara saw _Not Buying It_ in the New Items section, and thought it was a great fit to move to the top of my reading list.

_Not Buying It: Stop overspending and start raising happier, healthier, more successful kids_ was written by Brett Graff, a former US Government economist and editor of the site TheHomeEconomist.com. She has one daughter, and much of her advice comes from her own experience, often learning by doing the opposite of what she advises.

The book’s subtitle gives a thorough and accurate description of its content. _Not Buying It_ targets parents who believe (or are easily convinced by marketers) in ways to buy an advantage for their children, whether through educational materials, teachers/coaches, food, clothing, or medical care.

Graff doesn’t claim spending in those areas don’t have real benefits. Her argument is there are more important factors in creating happy, healthy, successful kids. Many families put too much emphasis on expensive things and experiences, while not emphasizing what’s most important such as time with family and a college education.

### The Value

Graff’s writing caused me to consider what Sara and I have spent so far on our children, and for that reason, I got value from this book.

In our heavily marketed culture, **_not_** spending money at every sale, on every idea, or at every whim doesn’t come natural. Especially when the marketing targets one of our most intense passions: our child’s well being. It takes training (aka _hard work_) to make wise purchasing decisions. This book helps condition you against being duped by clever marketing and to instead put your resources toward what is truly important to you.

To give an example of Graff’s philosophy let’s look at the chapter most challenging to my way of thinking. Chapter 5, titled _Your Star_, goes after the amount of money parents spend on cultivating their children’s skills and talents.

How many families do you know spend thousands of dollars on training sessions for sports or dance or singing? I know many, have spent on such things myself, and have thought about investing a lot more. The idea is our kids’ skills will translate into a rich college scholarship so it’s a worthy investment, and maybe they’ll even become a professional, turning their skill into money.

But what are the odds that your child will fall into the small group who become a division I or II college athlete, or even a professional? And if they do become a professional, what are the odds they’ll make a fulfilling income? Very few professional athletes get paid like LeBron. And even if they do, they may pay the cost with their long term health.

The worst part, if we are honest as parents, is much of our kids’ development is really about us:

_But while our kids are winning, singing, or starring and we are beaming with pride, a tiny portion of that accomplishment is fueling our own lunacy. That’s part of what drives us to pay for lessons and police the practicing._

I admit, I’m already guilty of this with my 5 year old daughter’s piano lessons. I can easily rationalize my insistence as motivated by developing diligence and patience in our girl, but I admit I’m highly conscious of how her piano talent (and work to develop it) reflects on Sara and I.

Graff makes more of these points, with some backed by solid research. But other, less powerful points feel as if she added them to fill space. Many of her ideas for alternatives to high spending are already being practiced by the common sense parents I know (cue the cliche about common sense not being so common).

### So much for examining alternatives

I don’t agree with Graff’s recommendation to use savings from spending smarter to fund your child’s college education. Her book’s main premise is to buck the status quo purchasing decisions and take up more cost efficient alternatives that are more effective at ensuring our child’s well-being, yet she abandons that philosophy by painting a college education as the holy grail for kids.

Here’s the reality: college education is rapidly becoming commoditized. It is _not_ the best path for every child’s well being. For some, it makes a lot of sense, but not for all. If we’re looking for ways to get the most bang for the bucks we spend on our kids, then a college education should be front of the line for scrutiny, not the answer.

In chapter 4, Graff makes the case for choosing a public education over a private education, citing studies which show public school as at least on par with private school when controlling for demographics. Yes, private schools have better performance, but the correlation does not equal causation. It’s one of her strongest points in the book.

There is no such reference to studies that control for those same type of factors when considering how much value a college education gives. College education vs alternatives needs to be examined by Graff just as public vs private secondary education is. This glaring mistreatment undermines her credibility and makes the book difficult to recommend.

I would love to hear a dialogue between Brett Graff and Joshua Sheats, who spoke at length about college education [in episode 276 of his Radical Personal Finance podcast](https://radicalpersonalfinance.com/276-financial-planner-refuses-save-money-kids-college/), titled _Why this financial planner refuses to save money for his kids’ college_. I highly encourage you to listen to Joshua dissect the value of college education in 60 minutes.

### Should you read this book?

If you have ever uttered the words “kids are so expensive,” then yes, you should read _Not Buying It_. There is enough content to cause you to examine or reexamine spending on your children and the value they (or you) receive from such expenditures.

If you are already highly conscious of the money you spend on your children, this book may not provide you much. There were no ideas I’d consider novel. However, it’s one thing to think you’re spending money with purpose, but another to practice it. For me, I usually err on the side of I’ve got something to learn.

### My primary takeaway

Examine everything you spend on. Don’t believe what the world tells you. Do your own research. Especially when it comes to the education of your children, including preschool, primary, secondary, and postsecondary.

And finally, spend quality, purposeful time with your children.


Why the Name Greater Than Financial? For Purpose


So many problems in the world, so many reasons to be pessimistic. No need for an exhaustive list, you’re familiar with the darkness, it’s all around us. And there you sit as a parent in the 21st Century wondering what kind of world you brought kids into, feeling helpless to truly make a difference and find prupose in this daily chaos.

That helpless feeling is one of the worst. You can identify the problems, but there’s nothing you can do. We think “it’s out of my control” or “how could I really make a difference?” And you’re right, the solutions to the world’s problems, our country’s problems, or even our local communities’ problems seem much bigger than you or me. However, we are not helpless.

We do have the power to change what needs to be changed, but the scope of the issues put us at a significant disadvantage. It means we must use every resource at our disposal to make our impact. We can’t afford more hapless attempts that merely bounce off the armor of the problems we face. It’s time to be strategic.

We may not be world leaders or even community leaders, but we do hold the keys to hope for our children’s and children’s children’s world. Which is exactly our advantage.

While there are countless forces beyond our control, we do have direct access to one of the most, if not the most, powerful forces in the universe: the lives and minds of our children. Walt Disney claimed, “Our greatest natural resource is the minds of our children.” And by who or what are those minds most influenced? Those they are closest to: their family. A family always has and always will be the bedrock of healthy societies. And he who holds the hearts and minds of a family holds the keys to the future.

So we find ourselves in possession of a power with unmeasurable potential, holding the keys to the future, and yet we’ve buried the keys in life’s junk drawer while we flip on the game or hop on Facebook. Our lack of motivation to lead our family doesn’t seem like a threat because it seems we are too insignificant to really make a difference. It’s time to start seeing that kind of thinking for what it really is: a lie. We have merely lacked engagement and failed to take advantage of the one thing we have the most influence over.

That is why I created Greater Than Financial. You see, every conversation about your resources (money) is really a conversation about what’s important to you. If we can make it simpler for you to use your resources to lay a healthy foundation for our families on which to flourish, our families will mature into productive engaging forces in our world. If enough families live with that kind of purpose we will see the positive repercussions move throughout our society.

How will Greater Than Financial be able to move families to live with such a purpose? First, eliminate the noise and distractions that paralyze us from moving our families to something greater. What would happen to your family if it became crystal clear what’s truly important to you? Why hasn’t that happened for you yet? Because in the hustle of life, you barely get time to slow down enough to eat and briefly talk together, let alone think about the bigger picture.

You need an intentional intervention, which is exactly what I plan to provide. If a family gets professional, expert help to first determine what’s truly important to them. The next step is to make a plan on how to most efficiently accomplish that purpose, clearing the path for achieving something significant. It’s a simple strategy, but with it, I think we have all we need to impact this world.

If I live to work an average length career, I’m not even out of the 1st quarter yet. So with most of the game ahead of me, I’ve realized something. If I spend my time simply helping people manage investments the potential impact will always be limited. But if I spend my time helping move families to train up their children and set the stage for world impact, that sounds like an adventure of a lifetime.

That’s why the name of this company is Greater Than Financial. I see the potential impact of the conversations I plan on having being far greater than only financial. I honestly see them as being eternal, which is the highest purpose I can imagine.


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