How to be wiser with money

When I think of wisdom, I can't help but think of my mentor, Mark Burget. I remember a time when I was struggling with the decision to start my firm potentially, so I scheduled lunch with Mark. During our lunch, I outlined the opportunities and risks and asked, "What do you think?" Mark took plenty of time to think about what he was hearing and then asked his questions.??

Eventually, he had one question that gave me what I needed. However, one question stuck with me: "Have you talked to your wife about this?" Amazingly, I had not. I decided to speak with Courtney and get her insight, thoughts, and intuition on this opportunity. My wife is also one of the wisest people I know, and this conversation was the catalyst to give me the confidence to move forward with starting Castlepoint.??

When I speak of wisdom, I think of Joyce Meyer's definition, "In a nutshell, wisdom is simply the proper use of knowledge, and I like to define it practically as doing now what we'll be happy with later on in life."??

?

If we take this definition more specifically regarding being wise with money, I ask, "How do we spend money in a way that increases the odds we'll be happier in the future?"??

?

In my line of work, I see people typically struggle with one of two extremes:

1. The first group of people spend too much money and don't think enough about securing their future. In other words, there is no delayed gratification. The mantra is to pay now and worry about security later. It is also known as the YOLO method (You live only once).
2. The second group tends to save too much money and possibly overthink securing their future (at the cost of missing opportunities in the present). This group is the ultimate delayer of gratification, and their discipline is the primary reason they possess much wealth. Sam Walton, the legendary founder of Walmart, comes to mind as a representative of this group. Walton was famous for driving the same old 1979 Ford F-150 long after becoming a multi-millionaire.

?

I believe one of the primary jobs of financial planners is to help clients see what is possible in the future. We also need to help people balance out living to the fullest today while simultaneously preparing for tomorrow. But here's the thing- we don't know how many tomorrows we will have in the future. We all have either lost a loved one way too early or know of people who passed away much earlier than expected.?

?

In my experience, it is a bad trade when we choose to make more money and live a worse daily life. And yet, we talk ourselves into it all the time. We take promotions that pay more but swallow our free time. We already have a successful business, but we put our energy into making it even more successful. There is too much focus on wealth and not enough emphasis on lifestyle.

?

Suppose you find yourself in this second group of people with too much focus on earning income and putting more money away after achieving your goal. In that case, I encourage you to pause and think about what is keeping you chained to earning more money and increasing your net worth.

?

Joyce Meyer had more to say about wisdom. She said, "Wisdom is our friend; it helps us not to live in regret. I think the saddest thing in the world would be to reach old age, look back at my life, and feel nothing but regret about what I did or did not do. Wisdom helps us make choices now that we will be happy with later."

?

So, how do you find the balance to avoid regret? For me, the answer is straightforward: be intentional about your choices and for whom you are making them. One example is a deliberate decision my wife and I have continually made to travel to Europe multiple times as our kids are young.

?

Through 22 years of being a financial advisor, I have also learned some wisdom from clients on how to reduce the odds of feeling regret with spending:

• Never earn money without a clear purpose for why you are working;
• Be genuinely happy for the financial success of your friends and co-workers;
• Never compare your life with others, especially when measuring yourself against someone else. Check out the?Comparison Trap;
• Choose experiences over things -think of more memorable vacations and fewer toys;

?

I'll mention one more piece of wisdom I picked up from my parents, who are in their mid to late 70s. Recently, I asked what they wished they had known in their 40s that they understand now. My parents quickly mentioned they wished they had traveled more when they were younger and healthier.? ?

?

I'll conclude with a quote from Dr. David Jeremiah. He said, "Contentment is looking back without regret, looking at the present without envy, and looking at the future with no fear."

?

Here's to many more abundant choices in the future so you don't look back with unnecessary regret.