Ron Popeil Would Be Proud

When working with clients on investing, I stress the importance of simplicity, consistency, and patience. We choose broad, cheap funds. We make contributing a habit in our life. We remember how long our time horizon is.....so we don't freak out about the volatility along the way.

Years ago, I helped a young client set up her investments just this way. We selected one of the best index funds in the world, we automated it, and she understood the big picture. Aside from that, she did absolutely nothing.

Fast forward many years, this person had long moved on from my coaching services. I randomly ran into her on the bike trail. During our brief chat, we touched on her financial progress. In this exchange, I asked her how she felt about the recent stock market craziness.

"You told me not to stress out about the stock market, so I don't even think about it."

"Yeah, that's a really great approach! I'm glad you feel good about it....just as you should! How do your investments look?"

"I haven't logged on in a few years. You said it was all automated, and I don't have to do much, so I haven't. In fact, I don't even know my account login."

"You're right. No reason to obsess about it. But maybe you should at least know how to log in to your account!"

I encouraged her to get her login information and record it somewhere safe, so she can get into her account if/when she needs to (such as changing the amount automatically being contributed."

A week later, she calls me somewhat in a panic, very excitable. "Travis, do you know how much money is in this account!?!?!" She shared the number, then shared her utter disbelief. It was far more than she had imagined it would be. I explained this is exactly what happens when we make it simple, consistent, and patient. Her monthly contributions were now just a normal part of her monthly budget, and this plan is fully integrated into her life. Yet, it's made a massive difference in her journey. These are all ideas and numbers we talk about in our meetings, but it's another thing to see it materialize right in front of your eyes. This is one of the challenges of finance. Numbers on paper never feel real. Part makebelieve, part too-good-to-be-true, part I-wish-this-would-go-faster. I couldn't be prouder of her mindset and progress. Keep it simple. Be consistent. Be patient. Don't lose sleep over it. Just living her meaningful life. That's what it's all about.

Set it and forget it. Ron Popeil would be proud!

Retiring Your Kids?!?!?!

I’ve seen this topic pop up from time to time in the past, but it seems to be gaining steam these days. Perhaps it’s a natural byproduct of more and more people understanding the power of compound interest. Mix that with people’s desire to hoard and the common belief that money=happiness, and it’s a perfect recipe for “winning.”Here’s the idea. If you, as a parent, invest $x today (or $y per month) when your child is a baby, you’ll effectively be able to “retire” them. In other words, if you build up enough investments early enough, there will be a huge sum of money in there by the time your kids reach their 40s, 50s, or 60s…..so they will be able to retire without having to put in any of the actual work themselves.

The math is true. You can absolutely do this. It’s quite possible if you really want to do this. I can even teach you how if you care to know the math. My question is this: Why would you want to ruin your children? Part of being an adult is having to figure it out. Do good work, be productive, serve others, be disciplined with our giving/saving/giving, invest consistently and patiently, and live a meaningful life. When we attempt to retire our kids through investing, it’s like asking our kids if they want to put a puzzle together, but you already put 90% of the pieces together for them. The point wasn’t to complete the puzzle, but rather the process of putting it together. That’s where the meaning lies.

I’ve seen so many people get absolutely ruined by having tons of money dropped on them early in life (or knowing early in life it will be dropped on them in due time). Some of it was planned, some was accidental, and some was situational. But in most cases, regardless of the reason, the meaning, motivation, and purpose can easily be zapped from their lives. Yes, they have wealth…..and wealth can buy a lot of things. But at what cost? I’ve seen the cost and I wouldn’t wish it upon my worst enemy. I thought the previous sentence might be an exaggeration, so I considered changing it. But after further contemplation, I’m not sure it is. When we completely remove the need to be productive, especially at an early age, it does a number on us mentally, emotionally, and psychologically.

Don’t ever forget the importance of the journey. It’s far more valuable and rewarding than the destination.