Release Notes Summary

I got to give a talk at the Release Notes conference about personal finance. It was a fantastic group and I was very fortunate to be made a small part of the community. I gave a talk entitled How to Live a Happy Financial Life. I thought it would be fun to share a summary here since it was, I thought, a pretty good talk.

The basic idea is this:

People are generally unhappy with their financial life because of uncertainty. Money as an unknown can be really, really scary! But having a plan turns money from a big, scary, monster of the unknown into a tool used to accomplish what you want or need it to.

And a plan is not a thing that needs to be complicated, or hard, or expensive. In many cases, you don’t even need an advisor to do it (although I do appreciate you all having me help you!).

I like to focus on making plans that help you one step at a time: not worrying about what happens 40 years from now helps us focus on the present. And only in the present can we make choices and changes – which will eventually, yes, create the future we want. The basic process is this:

Build a foundation:

Make sure you know what you have to start! You need to have an idea of your assets and liabilities at all times. Technology makes this easier – I like or – but there are lots of great ones out there that can help you link up accounts.

Protect yourself! If you are married and definitely if you have kids, you need a will and trust package. Make sure that all the tools are in place in case the worst happens. This goes for life insurance as well – a basic term life policy is a good idea for just about everyone – and mandatory, in my opinion, if you have kids.

You need to understand how much you can save each month. Whether you save 10% first or save what is left after paying the bills each month you need to make it a habit.

Build the house up:

Get your retirement accounts set up. You will live longer than you can work, that is a fact of life. Which means that you will need to have an asset base to live off of. So getting *something* put away is critical. This could include making sure that you take advantage of an employer match on a 401(k) plan or at least getting the basic $5,500 into an IRA.

You also have to get debt under control. If you still have outstanding consumer debt (credit cards or student loans above 5% interest)  you want to start dumping money to as fast as you can.

Grow the Wealth:

Once you have the basics in place, you can start accumulating more money into an investment account. Now is when you have the chance to start taking advantage of riskier investments that can grow the money. I call these the “opportunistic” investments. They are what grow your wealth the most, but can only be used when you have the safety and security to weather the rocky road they can take you down. You’ll also need a stable investment to hold money while we wait for opportunities to present themselves.

And that’s the basics!

Just like kids are afraid of the unknown monster in their closer – adults are afraid of the unknown monster that can be money. Tame it and you’ll be better off.

And, at the end of it all, I always remind people of my favorite quote:

Money isn’t real. It doesn’t matter. It only seems like it does.

I also reminded people that things like App Camp for Girls (which was the charity sponsor of the event) do real things. And if you aren’t making money for the purpose of doing something real with it, you’ll never be happy. No matter how much you have.