Corralling the Impulses

One of my friends, frustrated with his continual debt, reached out and asked a practical question: "How do you stop overspending?" Despite a fantastic income, he and his wife have ebbed and flowed in and out of credit card debt for nearly two decades. They are frustrated. They are tired. They are stressed.

"Just stop overspending." See, simple! But simple doesn't mean easy. We humans have some flawed wiring that makes it difficult to not overspend, and our modern-day culture encourages negligent behavior.

Some will read this post and want to slam their head against the wall repeatedly. Others will deeply relate. That's how polarizing this topic is. It's common sense not to overspend, but at the same time, our impulses lead us down that road.

At the risk of being nicknamed Captain Obvious, I'm going to share a few simple steps that can make a tremendous difference in our battle with overspending. Here we go!

1) Remove debt as an option. If debt is an option, be it credit cards, car loans, or any other types of consumer debt, we WILL use it.....eventually. We can say no 1,000 times, but that 1,001st time, our desires will get the best of us. I'm a huge advocate for structuring our life so that debt isn't even an option. Yes, I'm suggesting that people live without credit cards.

2) Have a plan. It's inevitable that our impulses will kick in. Again, we're human. One of the best ways to combat those impulses is to have a plan.....and stick to it. With money, that looks like a budget. A budget is just a vomit-inducing word that means we pre-decide where our money will go this month. It doesn't mean we'll spend less, but rather we'll spend what we said we will spend. We can budget $500 on dining out, which means we can (and should!) spend $500 on dining out, but we're not allowed to spend more than $500 on dining out. Following the plan keeps us accountable to our past selves who made the plan.

3) Understand the double-edged sword. Can we all agree that spending money feels good? That new pair of shoes. A state-of-the-art phone. A nice steak dinner. It can be euphoric! However, when we're in the moment of soaking up every ounce of that post-spend dopamine, we're not thinking about the other side of the equation: the stress, tension, guilt, and turmoil we'll soon endure from yet another act of overspending. It feels good in the moment, but the longer-term financial strain we put ourselves through more than negates the upside.

4) Know your why. While that new iPhone is pretty sweet, and will most certainly add value to your life, does it align or conflict with your bigger goals? If we can clearly define what your objectives are, it helps us make better decisions that align with those goals.

We deserve better than to live a stressful, tension-filled, guilt-ridden financial life. Find simple ways to regain control and corral your impulses. Future you will thank you for your service.

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All Of It

Are you human? Good, I was hoping so. This post is for all the humans out there. We humans have a knack for playing little tricks on ourselves to get what we want. In today's piece, I'm going to discuss "extra." Specifically, extra income. We're not good at managing extra income. Tax refunds, bonuses, extra paychecks, commissions, gifts, etc. We love treating these irregular cash inflows as extra, and by extra, I mean we don't have to be responsible with it.

You know what happens to extra, right? Of course you do! For most of us humans, we waste it. I use the term waste not as a reference for spending on wants, but rather as an indictment of our lack of intentionality.

I'll use the example of a typical family. They know when their paychecks arrive each month. That income, whether budgeted or not, is largely allocated for life's various expenses. It's rhythmic. It's normal. But the extra? If we receive extra income, the typical outcome is to mentally and emotionally carve it out from our normal income and impulsively spend it. We forget context, goals, and priorities. Instead, we just act. It's a little Jedi mind trick we play on ourselves. We convince ourselves this income doesn't count, so we just willfully ship it wherever our emotions tell us to.

Here's the alternative. I'm a big believer that all income is created equal. Every penny that comes in, whether a normal paycheck, bonus, tax refund, or any other surprise we might receive, should be woven into the plan.

I recently met with a client who is a textbook version of what it looks like to get it right. They received an inheritance. As soon as they knew how much it would be, it went into their budget alongside their normal income. His income, her income, and inheritance. One big pot of money. It was just like every other month, except this month had a lot more in the pot.

They negotiated where this month's income would go, including the extra. A handful of categories received some extra love due to this larger income. Their decisions were proactive, measured, made in context with the larger situation, and aligned with their goals and values. Once they negotiated the plan, the next step was easy (and hard): They executed the plan. When the money arrived, they did exactly as planned. Money was physically moved into each respective destination, ensuring they honored their past selves' plans. Perfect.

It might sound like I'm splitting hairs with this one, but trust me, it makes all the difference in the world! When we allow all income to be created equal and take responsibility for it as such, we make different decisions. Better decisions. I could tell they had a ton of peace and unity with their plan. Nothing was impulsive. Every decision made sense. It moved them closer to their aspirations.

This is a model to follow. Regardless of where the income is coming from, treat the same as the rest. It can make all the difference in the world.

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Choosing the Wrong Anchors

I was blessed with an opportunity to spend time with one of my closest friends yesterday. We don't see each other as much as we should, but man, it's great when we do. Our conversation triggered a concept I often discuss in my coaching, but has never come up on the blog. Well, today is the day!

Let's say you have a full-time job but are simultaneously working to transition to your dream job, your calling. You aspire to eventually transition full-time into the new gig. However, the elephant in the room is when. Every ounce of you wants to do the new thing, but the bulk of your time is invested in the old thing (which you don't particularly care about). How do you know when to flip the switch?

I'll use a real-life example of a friend. He makes $150,000 in his current full-time job, and has built his new business up to approximately $50,000 per year. Here's what I find most impressive about this. With only his leftovers (after working a full-time job and investing in his family as a husband and dad), he's managed to build up his dream business to $50,000 per year of income. Just imagine what he could do if he dedicated his best professional hours toward this growing passion!!!

One problem, though. Conventional wisdom says he shouldn't quit his full-time job until he's built up his new work to a similar income. In other words, once he's able to make at least $150,000 in his new gig, he can jump ship. This belief is founded on the idea that we should never go backward on our income. This is toxic thinking!

I'll state the obvious. There's very little chance my friend can build his new business up to $150,000 per year while giving it only scraps of time and energy. He feels stuck. He's frustrated. He's running out of steam. There's a chance he'll give up. Why? All because he chose the wrong anchor.

Please allow me to offer an alternative. Instead of trying to replicate his current income, he should seek to make enough. I pressed him with this question. "How much income do you need to make, combined with your wife's income, to pay for your basic needs?"

"About $40,000."

"So you're already there! You could quit today, focus full-time on your calling, and still care for your family. That sounds like a no-brainer decision!"

"I don't want to lose ground financially, though."

This is where I put the proverbial mirror in front of him, "So your standard of living and pride is more important to you than your calling. It's not that you can't, but rather you won't."

To his credit, he admitted that's probably true. I'm not trying to make him sound materialistic or egotistical. Rather, I'm trying to highlight the toxic power of choosing the wrong anchor. When we anchor our expectations on some arbitrary reality (a reality we’re trying to escape, mind you), it can rob us of our calling. Instead, I propose we anchor our expectations on what's enough. That subtle shift will change everything!

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It's Still the Same You

One of my friends recently went from being middle class to having $50M in cash. By "recently," I mean a few years ago. Here's the thing, though. Nobody in his life, besides his spouse and a few others, knows this even happened. He owned a boring business that quickly grew bigger and more successful than most people realized. He sold it, and poof, he was mega-wealthy.

In an instant, everything changed. Yet, at the same time, nothing changed at all. During a recent conversation, he interestingly said, "I thought my life would magically change, but I'm still the same me." He seemed disappointed by that revelation. Money has a funny way of not impacting us like that.

We view money as the x-factor that will change everything for us. If I only had $_____, then I'd be happy. If I could just get to $____, then I wouldn't worry anymore. Unfortunately, that's not how it works. First, let me say the obvious. Having a bunch of money will significantly reduce one's month-to-month financial stress. That's the most Captain Obvious thing I'll say today. However, money does not cure most things in our lives. Taking it one step further, having lots of money will inevitably open up new challenges.

It's easy to look at someone with a ton of money and think, "It must be nice!" In some ways, I'm sure it is. On the flip side, however, those people still battle demons, loss, pain, and turmoil. Life is still life, regardless of how many resources you have.

What's the point of this rant? Don't rely on more money to dictate your happiness. Don't hold that carrot in front of you, believing that more is the answer to what ails you. Don't (falsely) believe that wealth is the remedy for all of life's problems. It's not. It can help in some situations, but at the end of the day, it's still the same you. Therefore, invest in the person in the mirror. Keep growing. Take care of yourself. Pursue meaning. Keep moving forward, regardless of your financial standing.

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All Roads Lead Back to Childhood

I received more responses from yesterday's post than anything I've published this year. It was a smorgasbord of feedback, ranging from astonishment, to jealousy, to anger, to laughter. Needless to say, you had opinions!

One theme was clear through your feedback, and the same goes for most things in our lives: All roads lead back to childhood. What we perceive as normal, and the rituals we practice, can largely be attributed to our growing-up experience. If you grew up in a house that glorified a materialistic Christmas experience, there's a higher likelihood you'll replicate that for your own children. If you grew up in a house that shied away from extravagant gifts, you probably exhibit similar traits as you raise your own children.

We don't usually like admitting how big of a role our childhood played in who we are today, but it's a massive factor. That's one of the reasons why the first 30 minutes of the first coaching meeting I have with a couple involves a conversation about their childhoods. The answers to those questions tell me 80% of what I need to know about how someone's wired as an adult. Our childhood experience has created healthy traits and habits as we've become adults, but it's also produced toxic traits and habits that continue to haunt us decades later.

I have bad news and good news. I'll start with the bad news. You can't undo or redo your childhood. Each one of those experiences, both good and bad, is seared in and unavoidable. They live within us and play a role in who we are today. These experiences impact the way we perceive, understand, and manage the world around us.....including our money. This includes every toxic habit, perspective, and behavior you have about money. It is what it is, and there's nothing we can do about it.

Now, the good news. Well, two pieces of good news, actually. We don't have to let our faulty wiring drive us into the ground. Just because we've developed a predisposition to certain habits, perspectives, or behaviors from our childhood, it doesn't mean we have to act it out. One remedy for this risk is self-awareness. When I meet with a client, I will point out how x experience 20 years ago is probably linked to y behavior today. If that individual connects those dots and recognizes said reality, it's the first step to managing it better. When we are aware of what we do and why we do it, we gain better control.

Here's the second piece of good news. While you can't go back and get a redo of your childhood, you CAN give that to your children. Remember, what your kids experience in their childhoods, for better or worse, will have lasting implications on the way they perceive the world. Therefore, fellow parents, it's incumbent upon us to be intentional in our parenting to cultivate healthy habits, perspectives, and behaviors in our children. It's not too late for them!

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Normalizing Your Normal

I recently broke the news to a family that spending $5,000/kid on Christmas presents doesn't jive with their family's finances. They have five kids…..

They were appalled by my audacity to suggest this amount of money is unreasonable. "That's a normal amount to spend," proclaimed the wife. My response: "Just because it's your normal doesn't make it reasonable. You're the one who normalized your normal."

"No, what we do is totally reasonable and is a completely normal amount to spend." Then, much to my delight, she suggested I blog about it to prove just how normal it is. I'll be looking forward to your collective responses.

This brings up a broader point, though. When we refer to something as "normal," we're glossing over the question of whether it's right. Normal does not equal right. We can (and often do) normalize bad behavior:

• It's normal to go tens of thousands of dollars into student loan debt.

• It's normal to live at or above our financial means.

• It's normal to give away very little, spending all of our resources on our own desires.

• It’s normal to live without an emergency fund.

• It's normal to stay in jobs that make us perpetually miserable.

Just because something is normal, it doesn't make it right. Further, we tend to live in little bubbles, surrounding ourselves with people who practice the same habits, values, and rituals we do—an echo chamber of sorts. I agree; there is a sub-culture of people inclined to spend $5,000/kid on Christmas. It's normal within that group of people because they collectively normalized it.

This blog is a different version of that. I'm trying to normalize meaning over money. I'm trying to normalize the pursuit of work that matters. I'm trying to normalize ridiculous levels of generosity. I’m trying to normalize intentionality with our finances. I'm trying to normalize a lived experience far more rewarding and fulfilling than fantasizing about retiring into a life of leisure.

Here’s my call to action today: Question what you perceive as normal. First, is your definition of "normal" normal? Second, if so, should it be? Perhaps it's time to turn normal on its head, draw a line in the sand, and normalize something better. I'll leave it open as to what this applies to in your life, but you probably already know the answer.

Side note: $200. That's how much Sarah and I will spend on each of our two kids for Christmas gifts. That's "normal" for us.

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Playing With Four

The boys won both of their games yesterday. It was a weird day, as they had back-to-back games with only five players. Yes, every player played every minute of both games. They were gassed by the end, but I could tell they were pleased. Well, all but one kid.....

During the second game, one of my sons got frustrated and talked back to me. He refused the run the play I wanted to run, and started yelling at me. The ref was standing next to me, so I leaned over and said, "Ref, we're gonna play with four." I instructed my son to come join me on the bench, where he could watch his four teammates take on the five opponents. He sat out for two minutes until there was a timeout on the floor. He promised me he would straighten up.

He did.....for a bit. We were up by three points with 17 seconds left in the game. He got frustrated at a five-second violation on an inbound pass, and freaked out on me again. Again, "Come sit next to me. You're done for the day." The game was on the line, and I unfortunately needed to finish with four.

On the bench, he was beside himself. He complained that we needed five players and we might lose now. I told him I'd rather lose with four than play someone who disrespects his teammates, his coach, and the game.

Sure, I wanted to win that game. But more important than that is the long game. The long game is what really matters in life—doing the right thing for the right reasons....even when it hurts.

Rarely does playing the long game feel good. It doesn't feel good to be disciplined, practice delayed gratification, or be diligent. It's always more fun to be impulsive, without care, thinking only about the moment at hand.

It's immediately satiating to be selfish and materialistic. But what about the long game?

It feels great to spend money now instead of saving. But what about the long game?

It's far more fun to indulge your wants than meeting someone else's needs. But what about the long game?

It sucked to hold my son out of his basketball game and force him to watch his teammates play short-handed, but I need to think about the long game. He needs to learn. He needs to understand that actions have consequences. He needs to grow as a player and as a future man. This is delayed gratification at its finest.

Sometimes you need to play with four. Maybe that needs to be your motto in this season of life. Play the long game.

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The Freedom Paradox

I have this conversation often, but since I've had it three times this week, that merits a blog post. When I ask people what they are trying to achieve in their finances, many respond, "Freedom." Does that resonate with you? Do you desire financial freedom? I'm guessing that hits home for many of you, as it's one of the most common answers I receive.

I have a question, though. What is freedom? How do you define it? Inevitably, your answer is probably some number north of where you currently stand. It's something in the distance. It can be difficult to define what it looks like, but it's definitely more than whatever your current reality is. Why? Because you probably don't feel "free" today.

Herein lies the problem. Whenever we think about this idea of freedom or financial freedom, it's a moving target. Each time we hit a new plateau, we realize the winning score is higher than we thought. Thus, we begin a new pursuit.

There's a paradox here. Millions of Americans are pursuing freedom. They are pushing, grinding, and hoarding their way to more.....all in the name of creating freedom. The paradox is the fact that the pursuit of freedom is often what's keeping them from being free. Instead of just being free, they are fixated on a goal, a goal that will continually move further out.

Example 1: I recently talked to a 66-year-old with $2M in his retirement portfolio. He wants to retire, but believes he needs at least $3M to be free.

Example 2: I hung out with a friend with $4M in his retirement portfolio. He hates his job, but believes he needs at least $8M to be free.

Example 3: I met with a couple with $10M in retirement assets. Both spouses have big dreams of what they might want to do someday when they achieve financial freedom, but that number is closer to $15M-$18M.

Example 4: I spent time with a man who has more than $75M. His wife wants him to slow down, but he feels he first needs to get closer to $100M to solidify his financial standing.

Here's what all four of these families have in common. Each family is pursuing freedom. Each family already has freedom but is paradoxically sabotaging said freedom with their pursuit of freedom. Each family's perspective of freedom is anchored and skewed by their own current reality, not realizing they are already well ahead of the prior person's definition of freedom. That's quite the paradox.

Don't let the pursuit of freedom rob you of the opportunity to actually be free. True freedom is not found in a dollar amount.....it's found in perspective and contentment.

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When Our Brains Deceive Us

Our brains are an amazing thing. They allow us to think, remember, problem-solve, create, and dream. They are truly one of the most remarkable feats in this world. Yet, at the same time, our brains are quite fallible. Even when we feel strongly convicted about something, our brains sometimes deceive us. Scientists have done many notable studies on this phenomenon, which always blows my mind.

It's also a phenomenon I see in my coaching work on a near-daily basis. As we're out there living our busy lives, we may have one understanding of our reality, but the truth is something completely different. I'll share a few examples:

• A couple wanted to finish their basement. They were confident it would cost around $20,000.....dead-set on that being the number. By the time they finished, it was closer to $65,000. Why? Because they were anchoring their perception of cost on an older, uninflated number. Also, they didn't mentally account for higher level of finishes or the few extra side projects they included. Needless to say, they were flabbergasted.....and stressed.

• Another couple was struggling on their dining out budget. They continually overspent their desired amount by a wide margin. One of the spouses exclaimed, "We don't even go out to eat that much! It doesn't make any sense!!" Since they track everything, we pulled up the facts. Over the prior three months, they averaged 42 dining out trips per month. On the one hand, they "don't eat out that much," but on the other hand, they actually eat out nearly 1.5 times per day!

• Another couple was brutally naive to the cost of their pets. In our first meeting, I asked them how much their pets cost. $25 per month, tops. When I questioned them about this, they confirmed all they buy is a big bag of food every few months. Their pets cost them "almost nothing." After tracking for a year, they discovered they actually spend $450/month on their pets. Minds blown!

• The last couple were preparing for a weekend road trip. I encouraged them to budget adequately for it. They thumbed their noses at my number, insisting it would cost "Almost nothing. A hotel room, a tank of gas, and a few cheap meals." They insisted on only allotting $200.....the actual cost was $700.

It's not because any of these couples are dumb or uneducated.....far from it! Rather, it's a real phenomenon where our brain deceives us. We compartmentalize, gloss over things, and get distracted by all the noise. It happens to all of us.

I don't have a solution, but I do have a recommendation. Be aware this is probably happening to you. Acknowledge your brain isn't perfect. Be intentional; budget, execute, and track. When we arm ourselves with the real facts, it can be an eye-opening experience, helping us get better at this money stuff. Be mindful!

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One Madness Ends, Another Begins

It's here, guys! Tomorrow is the big day. The election will be over soon. After tomorrow, the madness will finally end. Yay! We can all celebrate and get back to normal. Or can we?

The unfortunate truth is that every time one madness ends, another begins. That's just the way of our world. There's always something. Something to be mad about. Something to upset us. Something to distract us. Something to divert our attention. Something to tire us. Some of these things will be genuine, while others will be manufactured. But regardless of what it is or how real it is, it's coming. One madness will end, and another begin.

Here's our problem. We often postpone the things we need to do - and want to do - until after the madness ends. The timing isn't ideal; there are too many unknowns. Thus, we'll just wait. After xyz happens, it will be better. Once that thing is over, life will get back to "normal." Maybe then will be a good time to start that thing we really want to do! Oh wait, once one madness ends, another begins.

Yes, this election is going to be over soon (thankfully!). But the next version of madness is just around the corner. We can keep kicking the can on our dreams, goals, and aspirations, or we can simply get to work. Don't wait for the madness to end.....because it won't.

To the family waiting until they have a little more discretionary income to begin paying off debt, just start.

To the family waiting until “things don’t feel so weird” to begin investing, just start.

To the family waiting for their income to feel more stable to begin giving, just start.

To the family trying to hoard as much money as possible before “retiring” into work that actually matters, just go.

To the person waiting until the timing is “just right” to launch their business, just start.

This is me walking to the mound and placing the ball in your glove. Let's go!

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Respecting Younger You

I have a seared-in memory of a youth group conversation that happened many years ago. One of the girls excitedly told the group that she had just received her new iPhone earlier that day. Mid-sentence, one of her friends interrupted, "Wait, didn't you just get a new phone a few months ago?"

"Yeah, I did, but that one broke"

Another kid pops in, "This is like your third phone this school year."

"Well, fourth. They keep breaking, so I need to replace them."

Another guy jumps into the discussion. "My dad told me that if I ever break my phone, I'm responsible for buying a new one."

The original girl was shocked. "That's terrible! You'll never be able to pay for a phone on your own. That's not fair!"

I looked at the guy and asked, "How many times have you ever broken your phone?"

"Never! I can't afford to. I'm very careful." The answer I was expecting!

There's a lot to be learned from this story. It's a story of entitlement, ownership, personal responsibility, and cause and effect.

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As I picked Finn and Pax up from their band practice last night, I witnessed Finn quickly turn 180 degrees, nearly causing his electric guitar to collide with the corner of a concrete wall. If he were standing two inches closer, we would have had a disaster on our hands.

As we got in the car, I explained to him that he needed to be more careful. He replied, "Well, if something happens to my guitar, we can just buy me a new one."

"If you break your guitar, you're responsible for buying a new one, Finn."

"What!?!? That's not fair. I don't have that much money."

"Well, you better be careful. I'll show you a better way to hold it when you're not playing it, but the responsibility to take care of it is yours."

_____________________

Cause and effect is a wonderful teacher; it's also a humbling one. When handling our finances and the possessions purchased with said finances, it's imperative that we steward it well. We shouldn't covet our money or things, but we ought to respect it. Kids struggle with this, but so do many adults. We're quick to blow money, break things, spend money on things we don't care bout, lose things, continue unused subscriptions, incur needless banking fees, rack up interest, and countless other mindless anti-stewardship actions.

Again, this isn't about penny-pinching, idolizing, or hoarding. It's about honoring the fruits of our labor and making the best use of our resources. Remember, every dollar you spend on something you don't care about is one dollar you can't spend on something you do. Therefore, be thoughtful, be intentional, and ensure you're paying proper respect for the work younger you put in to earn those resources.

Oh yeah, and have a great day!

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What It’s Really About

I've been hearing the wildest comments, feedback, and word-of-mouth referrals about the blog lately, and I say that in the most positive sense. I never take those kind words for granted, and it fuels me to create something meaningful each and every day. I share this because one particular story stood out a few days ago.

No, it's not the one where my friend told me she's "addicted" to reading my blog each morning, though that comment absolutely made my week!

And it's not the one where someone recently said he starts his day with three things: "A coffee, the Bible, and reading The Daily Meaning." Again, wow!

It's this one. A friend recently shared that he occasionally forwards my blog posts to his wife, encouraging her to sign up. But she's not one to care much about reading a daily money blog. Eventually, she relented and signed up, which I'm assuming was so she wouldn't have to listen to him talk about it anymore. My friend's recent feedback: "She likes it because it's not always about money!"

I love this, and she's so right. I would take it a step further and suggest that it's never actually about money. Well, it kinda is, but money is NEVER about money; it's always about something bigger. While it's true that we need to earn enough money to provide basic needs (food, clothing, shelter, and transportation), money is much more valuable than whatever dollars and cents are attached to it. Money, and how we perceive and handle it, is a reflection of our values, principles, and aspirations. In other words, it's an extension of us and what makes us tick.

It reminds me of a quote I heard long ago: "Show me your checkbook and I'll show you what's really important to you." It's so true! How we perceive and handle our money is an honest reflection of what we actually value (not what we say we value).

Money has the power to do great evil....or world-changing good.

Money has the power to add value to our lives....or rob us of it.

Money has the power to fulfill your wants......or others' needs.

Money has the power to create much stress and tension......or be humbly filled with gratitude.

Money has the power to fuel our desire for more......or walk with a posture of contentment.

Money has the power to become an idol.....or be used to glorify the one true idol.

So yeah, while money will absolutely continue to come up (it's what I do for a living!), it's never really about money. I'm so grateful my friend shared this story with me. It's a reminder to us all that money is NEVER about money; it's always about something bigger.

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First, Do It Poorly

I was sitting in a crowded bar with a buddy, each of us sipping on an old fashioned. We were casually chatting about football. Can the Cyclones run the table? Are the Bears actually decent? How do the Chiefs keep ripping off wins despite a growing number of injuries? 

Then, without notice, his demeanor changed. He became much more serious, almost sad. He confessed that he and his wife have struggled with money for many years. Or, as he put it, "neither one of us is any good with money." I had lots of questions:

"Do you two budget?" 

"No. Never have."

"Are you investing?"

"No. We don't know how."

"Are you giving?"

"Not a chance."

"Do you save money each month?"

"No. We live paycheck to paycheck."

"Do you talk to each other about finances?"

"Never."

The theme was clear. They aren't good at these things, so they simply don't do them. They've opted out, citing incompetence.

It reminds me of Finn and Pax's basketball team, a bunch of second-grade boys. I started working with these boys early in the summer; they were terrible! Well, in their defense, they were seven and had barely ever played before. It was all new to them. Dribbling. Passing. Shooting. Defense. Rebounding. Picking. Many could barely get the ball up to the hoop. 

Today, though, they are so much better! They seem much more confident on the court. They have a better feel for the game. They understand the principles. Their first game is next weekend, and I'm so excited to see how it goes. Will they win? No idea. But I do know one thing: they are far better today than when we started playing in June.

Here's a concept that applies to all areas of life: First, we must do it poorly. Then, we get to do it ok. Later, we get to become good. Eventually, we have the opportunity to be great. But it all starts with our willingness to be terrible.

These little boys don't understand this concept....they are little boys. But that's exactly what's happening. Each practice, they try, and fail.....try, and fail again. Little by little, they go from being terrible to being ok, then good, and maybe one day great. It's all part of the journey.

There's no world in which one of these little boys walks up to me and says, "Well, I'm not as good as Steph Curry, so I might as well quit." That would be insane. Yet, we adults do it every day. If we don't know how to do something, we simply concede we've lost that battle. Instead, let's endeavor to do it poorly. Budget poorly. Invest poorly. Give poorly. Save poorly. Communicate poorly. Doing it poorly is the gateway to great. But don't opt out! Don't take your ball and go home. Have the courage of my seven-year-olds. Be willing to fail. Be willing to be bad. Be willing to get a little better each day.

First, do it poorly.

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Always Be Unreasonable

As many of you know, I'm obsessed with Facebook restaurant review groups. They are a unique view into the perspectives, philosophies, cultures, and values of customers and business owners alike.

A while back, I saw a gem of a post by someone who reported finding a foreign object in their take-out entree. Upon contacting the business to report the incident, a representative at the restaurant, without even offering an apology, told them they would need to drive back to the restaurant and personally return the tainted order if they wanted a refund. The customer, already inconvenienced by discovering a hazardous object in their meal, was further inconvenienced by being instructed to waste more of their evening by driving back to the restaurant. This customer declined and instead decided to torch this restaurant on the Facebook group. Many people defended the restaurant in this situation, citing the risk of potential fraudsters (i.e. people trying to get free food) as the reason the restaurant requires a physical return. Commenters even somehow defended the restaurant's lack of apology or remorse.

Yesterday, I saw another gem of a post, but of a different variety. After eating half of her meal, the customer requested a to-go container for the remainder. Then, she accidentally dropped all the contents on the floor as she boxed her own meal; it was admittedly 100% the customer's fault. The restaurant employees quickly swooped in to clean up the mess and told her the kitchen was already re-making her a new sandwich. The customer assured the server that wasn't necessary (you know, because it was 100% her fault), but the server insisted.

That was an unreasonable act by the restaurant. An unreasonable act of hospitality. This customer was so blown away by the gesture that she quickly shared this story on the Facebook group. Just 16 hours later, her post had been shared five times, liked 1,100+ times, and commented on 66 times. The comments were overwhelmingly positive. Some people cited their own stories of unreasonable hospitality from this same restaurant, while many others voiced their newfound desire to dine there for the first time.

In the first example, the restaurant prioritized profit first and the customer last. Eventually, they will lose.

In the second example, the restaurant prioritized the customer first and profit last. This is why they will win. Ironic, I know!

Did the restaurant end the night with lower margins because of this act? Absolutely! That's a mathematical fact. However, the goodwill they built from their unreasonable hospitality holds much more value in the broader scheme of things than the potential profit they lost. Further, that customer walked away with a powerful story that was quickly converted into word-of-mouth marketing, which will inevitably result in more business.

Regardless of your vocation or industry, whether an employee or an owner, unreasonable hospitality is always the right approach. Generosity always wins. I hope you find some opportunities to practice that today!

Oh yeah, one more thing. The restaurant from the second story is called The Angry Goldfish. I've never been there, but I will soon after hearing about their generosity and practice of unreasonable hospitality. Maybe you should check them out, too.

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Parsing Needs Wisely

In yesterday's post, I shared about our experience watching the Iowa State Cyclones go 7-0 on a last-minute comeback win on Saturday. I'm still riding that high, though somewhat disappointed we fell one spot (to #10 in the country) in the latest poll. Don't worry, I'm not going to rant about ISU football again today. Rather, this most recent game reminds me of a story from last week.

I was chatting with a friend about the upcoming football game, which was supposed to be a blackout (all-black uniforms and fans also wearing black). Amidst our conversation, my friend lamented, "Ugh, we need to buy black ISU gear for the game. That's gonna cost at least a few hundred dollars."

He immediately spotted the confused look on my face, then added, "What? Didn't you hear it's a blackout? We need to wear black, and we don't have any. So we need to go buy some."

See the common theme here? Need, need, need. My response was simple: "Or you could just wear non-black ISU attire......or you could wear black non-ISU attire. You don't NEED to spend hundreds of dollars on clothes just for this game."

He looked at me like I was absolute idiot! While I'm all for dressing the part, there's zero chance I'm going to spend a ton of money to buy gear just so I can fit in for a one-time event......especially if it's not part of my budget. This guy, on the other hand, was ready to sabotage his family’s finances over it. It wasn't this specific decision that was going to sabotage him, though. It's the fact he regularly blurs the line between need and want, and then makes poor financial decisions accordingly. It continually puts stress on him and his marriage, all in the name of "need."

I tried to sell him on a different perspective, but he wasn't having it. He said this is just part of life, and real fans would understand. I told him this wasn't about football gear, but he again wasn't having it. It wasn't all bad news, though. He ended this part of our chat with, "But you can use this in your blog." Grateful, my man!

As you can see in the photo I included in yesterday's post, we were wearing black, but it wasn't splattered with ISU logos. We didn't go shopping. We didn't blow a bunch of money on special gear for the occasion. However, we did have an amazing time and we'll probably remember it for decades to come. Nothing about our experience was a need. It was a series of fun wants that added up to a wonderful evening.

It's important to parse our needs wisely. Needs are needs, and it's important to recognize them as such. But the moment we try to square-peg-round-hole a want into a need, our decision-making becomes tainted. That’s counter-productive and destructive. Be true to yourself and be honest with the person in the mirror. You’ll always be better off for it.

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Exposing the Secrets

As I was chatting with a friend yesterday, I noticed, in real-time, that the stock market hit a new all-time 155-year high (since 1870). Curious, my friend asked me a few questions.

"Didn't the stock market just tank?"

"No, it went down by about 10% and quickly bounced back to all-time highs......but nobody is talking about that part."

"Is the stock market up on the year?"

"Yes, by about 23% since January 1st. Up 34% in the last 12 months."

"I don't know. It seems impossible to get 9% like you always talk about."

"The U.S. stock market is up nearly 12% per year over the last 15 years."

"Did you get those types of returns?"

"Yes"

"How much time do you need to spend to do good like that?"

"5 minutes per year"

"How often do you make moves?"

"Never"

"Seriously, how do you know when to sell?"

"I haven't sold anything in over 20 years. I literally never make moves."

"Tell me your secrets!"

"There's no secret, really. Invest in a total stock market index. Ignore the noise. Do nothing. Be extraordinarily patient."

"Yeah, but what else?"

"I do nothing else."

"What are the chances of losing money doing it your way?"

"It's not MY way, but it is a good way. There's never been a 15-year period in the history of the U.S. where the U.S. stock market lost money. Never. You’re 30. Statistically speaking, based on history, there’s zero chance of you losing money on your current investment portfolio by age 45 if you’re invested in the broad market.

"It seems too good to be true."

"The simplest answers often do, but the math is the math."

"Maybe I should try."

"Yes! Yes, you should!"

This turned into an odd post, but the conversation merits repeating. I have similar discussions at least 2-3 times per week. With so much noise in our culture around this topic, we must stress truth and simplicity. The overcomplication of this matter leads to paralysis and poor decisions. Instead, when we shine the light on truth and make it simple, we can focus on what matters most:

• Invest broadly.

• Invest cheaply.

• Stay consistent.

• Don't get scared.

• Be patient.

• Do nothing.

• Live a meaningful life.

It's a simple but clean recipe for much success. Life is too short to worry about investments, trying to follow the next hot trend, or chasing your golf buddy's ridiculous stock tips. Simple is good.

If you have any questions, hit reply to this e-mail or leave a comment below on the webpage. I'm here to help! Have an awesome day!

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What if It Were Life or Death?

We all have different financial wirings. Some of us are spenders. Some of us are savers. Some of us are givers. We can also be a combination of two to three, but our wiring is quite real. I'm a giver and a saver. My wife is a spender. That's neither good nor bad....it just is. What we do with our wiring is where we determine our perspective of and relationship with money.

Conversely, most of us have a natural weakness, some more glaring than others. Some people struggle to spend; I call them hoarders. Some people struggle to give; that's some form of selfishness. Others struggle to save; that's called irresponsibility. Back to my wife, Sarah. She is a great spender and has a generous heart, but she struggles mightily with saving. She's not alone, though!

Many people struggle to save. There are many contributing factors to this type of wiring, spanning from nature to nurture. Many people were simply born that way and have been exhibiting those traits since the toddler stage. For others, materialism and instant gratification were modeled front-and-center for them as children. Then, there's a population of people who grew up with very little. In the casualness of the word "poor," they were poor poor. For a large stretch of their life, they had very little. This has created a behavioral undercurrent where they will quickly spend any time they come into resources.

I regularly meet with a couple that struggles to save. Both are wired as spenders. They love spending (and are active givers), but they would rather endure a root canal than save money. This has resulted in much stress, tension, and turmoil in their financial life. They have several large expenditures coming soon, and they have no plan to pay for it.

"We just aren't good at saving," exclaimed the wife. "It's just not something we can do."

I reframed the conversation. "If you needed $5,000 to perform a life-or-death surgery for your kid, do you think you could save then?"

"Of course we could! We would find a way."

The moment she said that, a sheepish look formed on her face. It wasn't really about whether they could or not, but rather what priority it played in their lives. Up to this point, they couldn't successfully save because it wasn't actually a priority. Will it become a priority for them? Only time will tell.

This is a good mental hack to play on ourselves. Any time we struggle to accomplish something and feel defeated because we "can't do it," reframe it. Ask yourself if you could achieve it if it were life or death. If the answer is yes, then it's a prioritization issue, not an ability issue. I'm not saying it will be easy or come naturally, but the prioritization piece tremendously moves the needle!

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Beware the Shadow Side

I spent some time with a friend a few nights ago. He and his wife have some house projects that NEED to be completed. It's a need need. You know, the type of things that don't get advertised when home ownership is overly glorified in our culture. These are some serious projects that require serious attention.....and perhaps a bit of urgency. One problem: They don't have enough cash handy to quickly execute. They could save for it, and they would love that option, but the timing isn't conducive to that judicious plan.

The option we discussed is a HELOC (home equity line of credit). They have a TON of equity in their house, so this feels like a feasible option for them. While I'm never a fan of going into debt, this seems like the lesser of all evils. It also makes me feel better knowing they are using the money to reinvest back into their home, not buying a boat (or some other depreciating asset)

After discussing the mechanics of how it would work and whether it could be a viable option for them, he asked the question I was dying to answer: "What's the shadow side of using a HELOC?" He knows me well, and he knows I'm constantly thinking about the behavioral science of things. In short, there are three psychological traps to using a HELOC:

1. Since HELOCS mechanically operate much like credit cards and have much lower interest rates, having a large HELOC credit line can be a slippery slope. If they need $15,000 for a project, but the available line is $40,000, that extra $25,000 could be spoken for real quick!

2. Adding fuel to the psychological fire, they are essentially borrowing from themselves. Well, their future selves. This is their equity, after all. They are just accessing it now, long before the property gets sold. Knowing this is their money (instead of the bank's) can wreak psychological havoc on one's decision-making.

3. Since HELOCs typically only require interest-only payments, there's no forced principal paydown. Unless intentionally done so, the loan will never get repaid, and the borrower will perpetually pay interest on it (i.e. it feels better and easier to not pay it down than the alternative).

We had a great chat, and I think he's looking at it the right way. More than anything, I'm glad he's taking his time, assessing it from all angles, bringing in outside input, and considering the shadow psychological factors that may be at play. That tells me he'll likely be ready to approach it with prudence, wisdom, and caution.

Each time you make a financial decision, consider the shadow side. What psychological factors might be at play, and how will you combat them? We can't eliminate them, but if we are aware, humble, and intentional, we can overcome them.

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Kicking In the Door

If there's one thing that never ceases to amazing me, it's our human instinct to justify our desires. We'll use just about anything to squint, twist, and sell ourselves into a decision we probably shouldn't make. I'll share an example. This family gave me permission to share their story, but this isn't necessarily about them. Millions of people are similar, and I encounter this phenomenon each week in my coaching work.

The couple has two kids, with a third on the way. They drive a mid-size SUV with about 125,000 miles on it. It's worth about $15,000 today, and they own it free and clear. It's been a reliable vehicle for them, but with the need for a third car seat coming soon, they need something bigger. This is a fact; their current vehicle does not adequately handle three car seats. We defined the gap, identified the need, and established a timeline. The meeting adjourned, and we went our separate ways; so far, so good.

Fast forward about 45 days, and we're scheduled to meet again. When I received their pre-meeting information, I spotted a new number on the top half of their balance sheet. "2024 Escalade". "$95,000." Oh goodness. I immediately scanned down to the bottom of the balance sheet. "Escalade Loan." "$80,000." Double goodness!

I tried to remain calm and approach the subject like a sensible, stable, and collected being.....and I half succeeded.

Me: "What in the world happened since we last met?!?!"

Them: "You know. We needed something bigger."

Me: "Bigger, yes, but you took this to an entirely new level."

Them: "It's exactly what we needed. It's bigger, pretty reliable, and comfortable. We need something comfortable for our road trips."

They needed more space, for sure. But their eventual decision wasn't really about more space. They just used that crack in the door to justify kicking it in. There were a million ways to meet their space needs that didn't involve this type of decision, but that's not what they wanted. They decided to use this named need (more space) to get something far, far, far grander than what they actually needed.

We humans love to do this! We find a need (the crack), then let our desires (the foot) kick the door wide open. Then, when we have to look in the mirror and account for our decisions, we get the privilege of saying, "Well, I needed _____, and I successfully addressed the need." In doing so, we also happened to fulfill wants x, y, and z. Quite the coincidence, eh?

We love kicking the doors in! We do it in our personal lives, in our businesses, and in our organizations. We clearly define a need, give ourselves permission to address the need, and ultimately make a decision that's really about far more than the original need (but meeting the need in the process).

Be careful about kicking in doors. You might not like what you find on the other side.

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When NOT to Push the Button

Yesterday, I talked about the behavioral phenomenon where people find more perceived security in their cash than the actual relief gained from using said cash to pay off their debt. I first framed it up through my illustrative Saw-esque concept, but then shared the story of an actual family that's continually struggled for seven years with $47,000 of debt (and a hefty $1,300/month combined payment to go along with it). All the while, they were sitting on $60,000 of cash in savings. At any point on the journey, they could have "pressed the button" and instantly paid off the debt (leaving them with $13,000 in savings and $1,300/month extra in their budget).

I said it without saying it, but I think we should push the button! Contrary to common belief, actual relief is almost always superior to the false sense of security of our cash. In the name of having "security," this family lived a stressed and low-quality life for the better part of a decade. The alternative scenario would have provided much fruit. Pay off the debt, use the additional monthly cashflow to rebuild savings (to whatever extent needed), and live with far more margin.

Today, though, I want to share when NOT to push the button. For as strongly as I feel about pushing the button, I'm equally as passionate about NOT pushing the button under one specific scenario: When the behavior that caused the financial mess in the first place hasn't yet been corrected.

In yesterday's example, this couple deeply wanted to create freedom and gain momentum. They made some very poor choices many years ago and were still haunted by them. They have since gained a healthier perspective on money, started budgeting, and found unity in their finances. In other words, they have addressed the root cause of the initial problem.

Let's assume they hadn't. Imagine this same couple came to me with $47,000 of non-mortgage debt, $60,000 of cash, and perpetually bad habits. They aren't budgeting. They still find themselves dipping into their credit cards each month. They plan to use debt to buy their next car. They haven't been sitting on $47,000 for a long time, but that number continues to grow and will likely be higher in the coming months.

In that scenario, using the cash to pay off the debt would be utterly destructive. Doing so would immediately create relief, but also cause a false sense of accomplishment. They would let their guard down, feel progressively more comfortable to spend, and mimic the same habits that led them into this mess. Translation: They will recreate the same situation they just "fixed." Fast forward 18 months, and they are back to $40,000-$50,000 of debt AND have no cash. That's a worst-case scenario I've seen played out far too many times.

Therefore, push the button. Please push the button! However, before doing so, make sure you have a healthy perspective, solid habits, and intentionality. Let the button be a blessing, not a curse.

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