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The other day, a friend asked me if I'd consider writing about what it means to be on a financial journey. I like the idea of viewing life as a journey, so why not look at our financial lives through the lens of a journey?
The one thing I always remember people talking about when discussing life's journey is how life is about the journey itself, not some destination. Okay, that makes sense. We can't simply anticipate some predetermined outcome while ignoring life's special moments along the way. I get that and agree with the premise. But is that same logic applicable to our financial lives?
Not exactly.
Here's what I've learned about our financial lives as we age -- they get increasingly more complex, and we don't necessarily get better with money along the way. That, in my estimation, is the typical journey. Probably not the uplifting exploration my friend was looking for.
The harsh reality is I've seen people in their 70s and 80s struggle with elements of their financial lives that 20-somethings typically struggle with. They don't seem any less stressed, and they don't even necessarily seem any more confident. So, the idea that financial experience itself leads to any level of expertise doesn't exactly hold any water. Each new experience is theoretically informative, but the lessons can be surreptitiously dismissed, and a person can easily default to a position of ignorance.
Clearly, the journey idea doesn't resonate with me. I actually think our financial lives are about the destination, but I think the destination is different than most people think.
I think we should all pursue financial enlightenment.
I know the idea of enlightenment can summon thoughts ranging from the Dali Lama to Western Europe in the 17th and 18th centuries, but when I think of financial enlightenment, I think about a person's ability to contextualize money as a resource while also achieving the ability to avoid the eerie charms which money promises.
I promise there's nothing in my coffee this morning. It's just black, as always.
Do you remember when you were a kid and tasted your favorite candy for the first time? Do you remember that strange thought you had? "I want to eat this and only this forever," I remember that feeling as one of the most animalistic, illogical thoughts I've ever had. I think our parents existed simply to help us through that very moment. "No, Peachie Pie, you can't have Reese's Cups for breakfast."
Yes, my dear mother called me Peachie Pie when I was a kid. Get over it.
I believe financial enlightenment involves controlling how the earning and spending of money affect our brains. The aim is to be calm, collected, and unmoved by copious resources nor a plethora of opportunities. To this end, I think some people's journey can last a handful of years, while others' journey can last a lifetime.
But here's the catch -- Unlike life itself, I'm not quite sure embracing the financial struggle along the way is the directive. I think the directive is to "work on yourself hard enough and long enough to achieve financial enlightenment."
Let's say you take out a home equity loan to buy a boat. And since I'm steering this hypothetical, let's also say you're doing this because you can't afford to buy the boat any other way. Oh, and also, you're way behind on your retirement goals. With a board stroke, this is generally a terrible idea. You will possibly survive that mistake, but there's no guarantee those moments will take you any closer to enlightenment. Sure, you might enjoy the moment of having the boat, but embracing the financial pain which this decision will bring is not the swell part of the journey people often surmise.
Like you, I'm not sure I'm glad I took on my friend's challenge.
The least I can do is leave you with a few signs you're approaching financial enlightenment.
You aren't emotionally moved by payday. You aren't still upgrading every possession you own. You don't gamble. You regularly donate money not primarily driven by tax planning.
I'd love to hear your version of financial enlightenment. What does it mean to you? Focus more on your thoughts and actions than the numbers. Email your thoughts to askpete@petetheplanner.com.
Thanks for reading my newsletter this year. I use my monthly writing to learn more about myself. That's not to say I don't write this newsletter for you, but being able to explore my own thoughts has brought great peace to me. Thank you for making that possible.
Happy holidays.
