How money evolves over our lives
Good morning!
I've been having a lot of conversations lately with folks around how money changes as they approach retirement.
And how it changes over the course of our careers. And lives.
When you get that first real job, money often feels scarce.
And it usually is.
Then let's assume you get into a committed relationship, you have to think about providing for someone other than yourself.
And if you have children, it's about providing for them, but it's also about striving to provide a good life for them. No matter how you define "good."
As you age through your 30s, 40s, and 50s, your income likely has grown. And hopefully your savings and investments have grown as well.
But for many this is easier said than done as lifestyles have a way of keeping up with - or sometimes exceeding - our growing incomes.
So we borrow money.
Credit cards for smaller purchases.
Auto and home loans for the big things in our lives.
And life insurance is important when you're younger and have a family as it can help replace your income if something happens to you.
But as you age, and hopefully build some wealth through home equity, savings and investments, this can often reduce or even eliminate the need for life insurance.
What if you get divorced or become a widow?
Then it's smart to reevaluate your finances from top to bottom and reexamine some of the assumptions I've laid out above.
What I can say with confidence (maybe even a guarantee) is that life is about changes.
Some changes you'll see coming. Some you won't.
Most will be minor. Many will be HUGE.
Yet, I regularly encounter people whose personal finances often seem stuck in the 80s or 90s.
This isn't about specific investments or even financial planning strategies.
It's really about how at one point in the past, you may have paid close attention to your money... maybe even hired a financial advisor.
But then you get busy with your family or your career. And your money becomes subject to inertia.
You continue to do what you've always done.
Sometimes this is OK.
Most of the time it's not.
It can be risky, expensive, or both.
Now the solution isn't to micro-manage every nickel and dime that flows through your finances.
As many of you know, I'm not a fan of micro-managing anything.
Including your money.
But I do think it's smart to regularly review your finances, plans, and strategies to make sure they still align with who you are today. Not who you were years or decades ago.
And the more regularly you do this, the easier and less burdensome it becomes.
It's not uncommon for me to find women in their 50s and 60s who:
Have more life insurance than they need
Are taking more risk with their investments than their planning requires
Can afford to retire sooner than they think
Can actually save less money today and stay on track for their desired retirement
And more...
Of course, the news isn't always so rosy.
Sometimes I have to deliver some tough love to folks and inform them that they need to make some changes to get on track to achieve the things that are important to them.
But I believe most people would rather know where they're headed financially instead of just sticking their head in the sand and hoping for the best.
How about you?
Are your finances "up to date" so that they reflect the person you are today?
Do they reflect changes in your income, debt, family, health, or other circumstances that have changed over the years?
The best financial plan is one that can easily adjust and evolve with your changing life.
And it's certainly better than having no plan at all.
Listen Up! 🎧
My latest podcast episode is with Atlanta estate planning attorney Cherish De la Cruz.
Click here to listen and subscribe.
Among other things, Cherish and I discuss her background and personal family experience that really drives her passion to help families get the legal planning and advice they need.
Simple, but not Easy
Hit reply and share 1 or 2 examples of something that's simple, but not necessarily easy.
I'll get you started:
Weight loss
Learning a musical instrument
Investing
Financial planning
Talking about money
Picking up a new sport
For more on this idea, check out this recent Morgan Housel article.
When it comes to money, so much of it simple.
But be careful of confusing simple with easy.
Fresh Caught Seafood
For those who emailed about our recent FL trip to go scalloping with friends, here's a picture of our dinner after our 1st day on the water. We took our catch to a local restaurant and had them fry up half and blacken the other half.
Delicious!
Thank you, as always, for reading.
Until next Wednesday,
Russ