The Authentic Advisor | Financial Anxiety got you Down?

Over the last few months investors have been reintroduced to what volatility in financial markets means which has undoubtedly added to investors anxiety and stress related to their personal finances. Money is often one of the number one causes of stress in a person’s life. This is one of the main pain points I work the hardest to alleviate with clients. This doesn’t impact everyone equally, but if you are someone that does lose sleep at night over money, what can you do in 2019 to change that pattern? Here are some of the things I have discussed with clients recently: 

1) Forgive yourself – Anxiety is often the result of feeling shame and embarrassment as it relates to something you have done in your past. Often when I meet people for the first time they are embarrassed about how they have handled their money in the past or they are embarrassed about a bad investment they have made that has lost them a lot of money. It is time to forgive yourself and realize that you are not alone, in fact quite the contrary. Absolutely everyone has made a bad financial decision at one point or another. Even the Oracle of Omaha, Warren Buffett himself, often discusses the mistakes he has made in his annual letters to his shareholders. There is nothing that can change what has happened so don’t let it affect your future. Forgive yourself and move on… trust me, you’ll start feeling better almost immediately.  

2) Know where you are going – One of the key contributors to financial anxiety is not knowing the direction you are going in and whether or not you are on track. Most people don’t know this but the biggest contributor to financial success is not your rate of return in your investments. In fact, the biggest contributor is how much money you have personally put into your investments. Think about it, if you invested $50 and earned a return of 10% you have made $5. If instead you invested $100 and only earned a return of 7.5% you would have made $7.50. That’s a dollar return which is 50% higher. What is most important is having a financial plan which includes a projection on how to achieve all of your financial goals, from short, intermediate to long term. Knowing gives you the power to succeed. Don’t wing it.  

3) Examine recurring expenses - We all need to do this, myself included. Every year in January I review my recurring expenses on my credit card and I am usually shocked to find that I am spending $100-200 per month on items that I no longer even use. Subscriptions, memberships, services you name it. Take a look, you might be able to save yourself a few thousand dollars per year. If you want to go to the next level, since you clearly don’t miss this money on a monthly basis, just increase your savings amount by the exact same amount that you are reducing your expenses by.  

4) Educate yourself – No matter what level your financial knowledge is, there are a lot of great books out there that can help you to gain a better understanding of how finance works. For the beginner I would recommend reading a couple of books, “Managing the Bull” – written by my good friend Dave Christianson or “A Wealth of Common Sense”- written by a blogger I follow Ben Carlson. If you are looking for books which are a little more detailed I would recommend reading “The Intelligent Investor” – By Benjamin Graham. I have plenty of other recommendations as well but these are a good start. (I also welcome book recommendations, so if you have any please feel free to pass them on!) Knowledge is power and having knowledge will give you the power to overcome your anxiety. Education will set you free. 

5) Find a mentor – This may not be the most comfortable thing to do for you, but I would refer you back to number 1 of my list. I have always sought out mentors in a variety of different fields. In fact, I can say that as of today I regularly work with 4 different mentors who have different expertise and skill-sets. If money is giving you anxiety, then I would recommend seeking out someone who you feel is successful at it and talking to them. What you will find is that they are probably happy to share their experiences with you and help you out. You will also likely gain an understanding that these people faced their ups and downs as well and they don’t necessarily have a secret sauce other than they worked hard and stayed disciplined. Having mentors not only helps you to gain from their wisdom but it also puts your own life into perspective.   

I always enjoy the idea that the New Year can bring a fresh start for people. What is frustrating is that most people don’t make any changes to the things that are causing them discomfort or stress. If you aren’t happy with where you are sitting financially, then make the changes you need to become happy. The list above is not comprehensive and there are many other things that can be done. I would be happy to chat about your specific situation and stresses any time. 2019 can be your turning point, don’t let it pass you by.  

- Grant White, CFP, CIM 

Grant White is an award winning Investment Adviser based out of Winnipeg. He is the head of the “White Hewson Wealth Advisory Group” with National Bank Financial, and specializes in managing the financial decisions and well-being of business owners and their families.