A Life Built on Service and Saving

If my ticket gets punched sometime soon, I’ll have lived a life filled to the brim. Almost disorientingly so. I’ve crouched in the final passageway of a West African slave fort, been drenched by Victoria Fall’s mist, walked on the Great Wall of China, ran around the Imperial Palace in Tokyo, hiked in Chiapas, and cross country skied in Norway. I’ve lived in the Midwest, the West, the Southeast, and as one six year old here says, “the Specific Northwest”. I’ve interacted with thousands of young people, the vast majority who appreciated my efforts on their behalf. I’ve cycled up and down mountains in the Western United States. I’ve taught guest lessons in my daughters’ elementary classrooms. I’ve been blessed to know lots of people more selfless than me, some who will read this today. I’ve been loved by caring, generous parents, and been privileged to know my wife and daughters and their friends.

My life has been so full that I tend to think about whatever my future holds as extra credit. Everything from here on out is a bonus.

Maybe I don’t look forward to too much anymore because my cup has been overflowing for some time. Apart from a story well told and nature, not a lot moves me these days.

So getting choked up in church yesterday, during the announcements of all things, was totally unexpected. A guest was invited to the front to make a surprise announcement. A tall, dapper man in his late 30’s began describing his relationship with ChuckB, a member who had passed away a few months ago. He had been Chuck’s financial planner for eight years.

I didn’t know Chuck until I attended a celebration of his life that was planned nine months ago after the church community learned of his terminal illness. He worked as a forester for the Department of Ecology for a few decades and kept a low profile at church, driving the van, tutoring after school, doing whatever was needed behind the scenes. At his celebration I was struck by how everyone described him as one of the most humble, caring, and giving people they had ever known. He lived a simple life in a modest neighborhood that revolved around participating in church activities.

The financial planner announced that Chuck and his wife, who had passed away previously, were leaving the church $925,000, divided four ways, the largest portion for international aide, another for local charities, another for Lutheran World Relief specifically, and about $220,000 in the church’s unrestricted fund to use as the Council sees fit. A Council that has been seeking about $35,000 to fund a half-time position dedicated to strengthening our ties to local people in need.

There was an audible gasp. Two people stood and began applauding and soon everyone followed. My favorite part, and probably what moved me so much, was that Chuck wasn’t there for his standing ovation. Shortly before he died, he confided to one member that he was leaving “the bulk of his estate to the church,” but that person said she had “no idea it was anywhere near that much money.” No one did.

The most beautiful and moving part to me is that Chuck intentionally passed on his standing ovation. He didn’t need it. A life filled with service and saving was more than enough. Blessed be his memory.

 

 

Winning Personal Finance 2

I’ve been successful for several reasons: 1) most importantly, my parents’ work ethic, saving habits, and frugality have been deeply imprinted in me; 2) second most important, I chose to marry someone who wants to live a similar lifestyle as me; 3) I’ve educated myself reading and studying lots of material; 4) I found Vanguard early on which has saved me a lot in investing costs; 5) I’ve come to enjoy managing money so I set aside a few hours every week to continue learning and make decisions; and 6) I almost always avoid impulse purchases.

What might one and two mean for you? When it comes to family history and partner, I’m a personal finance +/+. The gal pal and I have probably had as many financial arguments as the next couple, but they’ve ebbed in number and intensity over time, and ultimately, our personal financial values are very similar. What if you’re a personal finance -/+ or the dreaded -/-? While it’s impossible to completely undo a “losing personal finance” family history, financial counselors can help minimize the damage and your time and resources are probably best spent working with them on minimizing the effects of negative role modeling before turning to asset allocation, minimizing taxes, and the like. Similarly, if your partner and you aren’t in sync, financial/couples counseling is probably more important than technical financial advising. Proactively, the more premarital counseling focused on each person’s financial history, values, and goals, the better.

What about reasons three, four, and five? How much time do you set aside each week to educate yourself about saving, investing, minimizing taxes, and related personal finance topics, not counting paying bills and balancing your check book? Put differently, how much time do you spend thinking about the forest that is you or your family’s financial well-being? My guess is, on a weekly basis, the average person spends very little time thinking about where they’ve been, where they are, and how to reduce expenses. Quiz. What was your net worth, assets minus debits, on 12/31/09? Will you recalculate it at the end of this month and then every quarter? If my assumption is right, is it any surprise that so many people are unsatisfied with their personal financial situation?

Reason six leads to tip five or experiment one, don’t buy anything that hasn’t been on your “To Buy” list for at least a week. Personal example. Three plus years ago I bought eight pairs of $120 running shoes for $60 a piece. Running shoe companies “update” their shoes regularly, every year or so. As far as I can tell, “updating” shoes means “we changed the colors”. If you’re savvy, you can pick up the “old” model at half price. When the big box of eight shoes arrived, it blew the daughters away. “Dad, you saved $480!” “Tru dat.” Fast forward, I’m halfway (250 miles) through pair eight so I’ve started to shop for a similar deal. No luck until last week. I found my Mizuno Wave Creations, model 10, for $65. Model 11, $135. Only two sizes were available, one was mine. Darn if the website would only let me buy two pairs, so I called them. They said they’d investigate and get back to me. Long story short, they found a third pair and all three are in transit. Normal cost for three pairs at $135 and 8.5% taxes, $439.42. After thanking the salesperson I said, “I saw something on-line about a Costco or Triple A discount.” “Yes, what’s your Triple A number?” Cost went from $201.50 ($6.00 shipping) to $181.50. Let’s see you do that on your fancy pants iPhone with the barcode application.

Now my $9,000 loss is a mere $8,742.08.

Winning Personal Finance 1

Everyone is hocking financial advice so how does one decide whose to follow? For example, why on earth should anyone pay any attention to the personal financial advice I offer below? What makes one advisor more credible than another, credentials, their popularity, their marketing savvy, something else? Credentials are nice in that they create a floor with respect to technical knowledge, but they don’t tell you much about the person’s ethics, integrity, or track record. Ultimately all credentials tell you is they succeeded in passing exams.

If I was looking for a financial advisor I’d look for someone that managed their own money well and emphasized saving, investing simply, and had other values that jived with my own. But how do you know if someone manages their own money well when we’re loathe to talk about our personal finances?

Tip one. Ask anyone wanting to manage your money to prove that they’ve managed theirs well. That will probably reduce the pool from which to choose in at least half. Take me for example, I have managed my family’s money well, but for privacy reasons, I won’t provide details except to say that for every ten financial decisions I make, I tend to make seven or eight good ones. Were I in the biz, I would completely understand if that lack of specificity caused potential clients to walk away.

Tip two. Ask any potential financial advisor about some of the mistakes he or she has made and what they learned from them. Last year I made a $9,000 mistake. I repeat, last year I made a $9,000 mistake. It was a brutal, self-inflicted wound that took time to shake. My goal is not to be perfect, but to consistently make more good decisions than bad. Look for a humble advisor who acknowledges complexity and doesn’t over promise. That will probably reduce the pool of potential advisors by at least another half.

Tip three. Even if you find a financial advisor that meets all of those criteria, don’t decide to work with him/her without first looking at yourself in a mirror and repeating several times, “No one will ever care about my financial well-being as much as me.”

Tip four. Never accept any financial advice passively. Instead educate yourself and recognize that no one will ever care about your personal financial well-being as much as you. More specifically, become your own financial advisor. That’s the best financial advice I’ll ever offer. Become your own financial advisor.

Well, the best advice until Part Two.