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- [00:04]
A
Want the opportunity to create Money for Life. We've got the strategies to get you there. I'm Eric.
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And I'm Kayleigh.
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A
And we help professionals and executives optimize their financial decisions so they can live well today, plan for tomorrow, and enjoy
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Money for Life on the Money for Life podcast. We're here to help you do the same. Hey, and welcome to the Money for Life podcast. If you are looking for Beyond Finances, don't worry, you are in the right place. I'm Hailey Roberge.
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And I'm Eric Roberge.
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We recently changed the name of our podcast to Money for Life because we felt like that phrase really concisely captured everything that gets us fired up about the work that we do with financial planning and investment management, both for our clients and for ourselves. So that phrase, money for Life is kind of layered with meaning. So, Eric, can you walk us through kind of that top layer, like the most obvious part of it, I guess, of why Money for Life? Why is that important?
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A
Yeah, I mean, firstly, I want to say that Beyond Finances was a great name, and it didn't capture the full breadth of what we talk about because it lost the aspect of integration of finances in life. It's not beyond Finances. It's finances and then some. And so when we think about Money for Life, that first level is we need money to live our lives. We spend money every day, and we're going to spend money tomorrow. So therefore, the idea of having money to spend, to enjoy yourself and engage in life, to give to others, to support your family, whatever it is that is really important to you and how you use money, and certainly as it's connected to your values, you want to get at those areas of finance.
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B
Yeah. Cause there's no decision that you can make that money doesn't touch. So I think that gets into the second part of it, too, is you want money to live your life, but also for your life. You can't just focus on now, but on the flip side, you can't just try to save everything you can for someday because it's not a date on the calendar. Right. You need money for life, which means today and a few weeks and a few months, years and decades down the road. And if you want to have that balance of the ability to use your money now while still planning responsibly for tomorrow, you've got to deploy certain strategies to get you there. That doesn't just happen by accident.
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A
So, yes, the power of making good financial decisions is that you make these financial decisions with the entirety of your Life in mind. And according to some people, that isn't 75, 80 years, it's 100, it's 120. With the advancements in technology and healthcare, there could be a lot longer life to support with your dollars. And therefore money for life becomes even that much more important than it used to be.
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B
That's a little bit of the why behind why we changed our name. But Eric, can we dig more into the what you know, we mentioned we need the strategies. What are some of those strategies? Just kind of a high level. Like, what are you seeing for people who are in their 30s and 40s and are really in, in the thick of all of the decisions that you need to make to enjoy your life now? Like, because you likely, if you are, you know, into your career, you've got yourself established, you're making good money, you have the ability now to deploy your dollars in a certain way to achieve the lifestyle you want. And this is the time that you've got to make the right decisions to set yourself up for the future. So are there common strategies that you're seeing that allow you to do that?
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A
I think it all comes back to answering the right questions. There's a very delicate balance between today and enjoyment and tomorrow and enjoyment and tomorrow and security. So if you're asking, where is the dollar best spent? Where is my next dollar best spent? Then you're asking the right question because then you start to think about how you're spending your money. Does it feel good? Is it aligned with your values? That's going to start help you understand. Well, yeah, I'm spending my money and I'm saving my money, but I'm not necessarily feeling good about where I spend my money or how I use my money or no, I feel great about how I'm using my money right now. Let's continue with that. And you start to think about your family and how they are experiencing the money that you have as a household. Are your kids doing what they want to be doing? Do you feel like you're supporting them in the way that you want to support them? Do you have the time to enjoy yourself and go on vacation, or are you just talking about vacations? There's a lot of different ways to get at the. The question of am I using my money optimally for me? And those are some of the questions that we like to ask our clients because it really is about a conversation to get grounded in what it is for you specifically, not what it is for everybody as a, as a whole.
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B
Sounds like step one to getting yourself set up on the road for both having and using money for life would be to understand what it is you want that life to look like. And kind of taking a step back and assessing where you are right now, are things aligned, are your actions aligned with your values or the decisions that you're making with your money aligned with what you say are your long term goals? And there's no judgment with that. Really. This is, this exercise is not about right or wrong because everybody is out to do different things. Everybody is kind of playing a different game. Right. If someone is in a debate with you about the right or wrong way to use money, I think most often it's not that it's really an argument, it's just you're playing a different game. You're both looking for a different outcome and that's going to change what the quote unquote right answer is. For any specific scenario, what works for you may or may not work for somebody else and vice versa. And that's why you've got to be really careful too, I think, and not getting caught up in anecdotal evidence or following along with somebody else's story too closely because that where they're going may or may not be where you want to end up. So I think it's really important to kind of like you said, Eric, ask yourself the questions and really focus in on your answers.
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A
Yeah. Because the assumption, the underlying assumption here is that a dollar used here can't be used there. And unless you make more dollars, there's only so much to go around. So obviously that's one of them too. Right. Is talking about spending and saving and you're saying, I feel restricted. I can't do all the things that I want to do for today and also plan responsibly for tomorrow. Then maybe the answer is, well, let's look at how you make your money, where you make your money and can you make more money to satisfy what you truly desire? Because in the end you only have one life to live. So let's do this the way that you should be doing it.
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B
Yeah. And earning more money, I think is, is an under discussed aspect of personal finance and for good reason. Right. It's hard. And there is no one size fits all advice or solution for make more money. If that was easy, we'd all be doing it. So I think it's really important to again focus in on your specific situation there and understand what are your skills and abilities, what are your opportunities, what are your limitations? And that might clarify what Specific paths or strategies are best to take there to solve that particular problem in finance, which is also an important distinction. Right. Because that's more of a math problem. If you are earning X, but you need Y, that's a pretty simple calculation, I think, where a lot of the times what we talk about with beyond finances and this idea of money for life, you're getting past the point of a math problem and you're really looking at, I've solved that piece of the puzzle. I actually have sufficient funds, but I'm not clear on the best way to organize them so that I'm having the life that I want to live now, but also building wealth for the future. I think that's a lot of the work that you do, Eric, with clients. So can you speak more to that? Like, what strategies or planning tools are you using there to solve that aspect of things?
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And when you say that aspect of things, are you specifically referring to the financial puzzle?
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Yeah. Right. When you are, when you have moved beyond the well, I want you know why, and I only have X if you are making good money. Your question isn't necessarily how do I earn more? But it's, it's kind of the flip side of that, of like, I actually, I solved that. I did earn more. I climbed up in my career. I've got this job with equity compensation. I actually am starting to accumulate cash in my bank account because I'm not spending it, but also not doing anything with it. Like, I've, I've kept my lifestyle kind of status quo. Maybe I haven't started investing beyond a 401k. It's kind of like what is next? Because it's, it's an exciting opportunity, but it's also kind of like the Wild west, like an open frontier, because there are so many options. It almost is like that. More money, more problems in the sense of more decisions to make, more decision fatigue to deal with, more potential wrong moves to make. How do you deal with that once you get to the point of all right, I think I have the means to achieve what I want, but I don't have the organization or the strategy to get me there. And I don't know where to start.
- [09:11]
A
Yeah, I think there's two things to look at. There's the idea that there is a step by step process to get somewhere and there are modular conversations to have in various aspects of your finances. Everything from how do I buy the right house for me, to how do I save for college for my children to let them get the education that they Deserve to allow me to build flexibility and buffer room between me and my job so that every decision I make isn't about what job is going to pay me the most money. The idea is that we're trying to reduce friction with your money and your life. In order to do that, we want to make your money work as hard as possible for you. So whether it's purely spending on something that you value or it's investing in a tax efficient manner that achieves a certain rate of return over the long term, those are important details and those are the things we start to get into to make sure that we can create the plan that actually sustains itself throughout your entire life. Then we can start to layer in other ideas like, well, if the plan doesn't go as planned, which most plans, you know, hint here, not going to work as planned because it's all about the future and the future is unknowable for everybody. So as we get new information, we start to evolve the conversation to say, well, we have new information now. Do we still want to achieve the same goal? Can we still do the same thing we wanted to do? Because our finances are now here and not where they were. And those are really important conversations to have. And ultimately, even if the plan doesn't work, we want to make sure that some version of it does.
- [10:47]
B
I think that underscores for me the importance of, of understanding that things change, right? Your life is changed. That's pretty much the only constant, is that things are going to shift and evolve. Sometimes through actions that you take, like decisions that you make. You're the one imposing your agency on the situation, like you are creating the change. And sometimes it's just going to be out of your control for better or for worse. It doesn't necessarily have to be a bad thing, but that things shift. And that for me is really what that money for life concept gets at, is the ability to shift with it as things change, to have other plans you can deploy or just to have like the financial flexibility, I think to adapt when you need to adapt, to gracefully move from one phase of life to another, or to transition or pivot because you decided to or because you needed to. Like, that's what using your money as a tool means. That's what having money for life, both in duration and for whatever happens in life, that's what that means to me. And I think it's really important that we have to do this iterative planning process because not only is change dealing constant, but just what you want right now is probably not what you're going to want. And 10 years. So how do you plan for that today? You can't necessarily predict, but you can focus on the fundamentals that are going to work for you now. And you know that they're going to create some reliability for you in the future. So a really specific example of that is saving more than you think you have to. Like, that is a very specific strategy. And it sounds kind of silly like, but it's actually really hard to do and people don't necessarily do it because then it's again, the question of like, well, what does that mean? So for us, our guideline is save 25% of your gross income. That takes the ambiguity out of it. That takes the questioning out of it. There's a very, very clear quote, unquote rule that you can follow.
- [12:47]
A
And that is the general rule of thumb, right when we start assumptions being, well, this, the people that we are working with are making really good money, maybe half a million dollars, maybe more, and therefore they probably have enough money to do a lot of different things. And that brings in with it a lot of different issues because there's competing priorities. And it seems like, well, I could do anything, but I probably can't still do everything here, which is really important. I was just talking to actually the Wall Street Journal yesterday about kind of this, where they were saying like, well, how. How do you think about providing money for your kids? And I said, well, firstly, you wanted to understand where your values lie. How important is it to provide for your kids? Is it education specific? Is it the freedom to do something with your money after you graduate and choose a career based on what you truly love to do versus what is going to pay you enough to afford your life? And going about doing that is asking the question, well, how much do I need to save for them? Save what you can, when you can, because you will not always be able to save a certain amount of money because expenses might increase, your income might drop. And so while you're able to spend money on things that you really love to do, don't overspend on things that you really don't care about. Save that money instead because you're going to use it down the road, where you might use it for your kids down the road, or you might give it to charity down the road, there's always going to be a use case for it. So why not take advantage of it while it's there?
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B
You also want to save what you can, when you can, because that's in your control, right? That is something that you have influence and power over. And I think a mistake that we see a lot of people make is hoping that some other external force, whatever it is, whether it's like a future job or it's the stock market returning a certain amount, like something is going to swoop in and make everything better. Like, it'll all be fine, it'll all work out. Maybe you could get lucky, but you don't actually have to rely on luck to be successful. And I think that's a really big important pillar in our financial planning philosophy as well. In addition to creating these structures that allow you to enjoy your money today while still planning responsibly for tomorrow, it's focusing on what you can control and what you can save is certainly within your control, at least while, like you said, Eric, do it while you can, when you can. Because there, there will be times, and we've seen in our own personal life where we had to change our savings habit, like when we decided to have kids that introduced many more expenses than when it was just the two of us. And because we had spent 10 years kind of front loading our savings by saving really aggressively because we could, that gave us flexibility to drop that rate down and not save so aggressively moving forward. So optimizing for flexibility, it begets more flexibility throughout your life. Is there another place like that that you've seen where when you optimize for optionality, like how it can benefit you or how it becomes like this compounding effect?
- [15:59]
A
I think it's an intangible. It's in the confidence that it gives you to take the time to think through the decision that you're going to make before making that decision, because you have the time and the money to support that decision making process. Be dynamic. Your life is dynamic. Your money should be dynamic too. And that could simply mean you have $200,000 sitting in your bank account safe, not earning money, which is downside in some cases because you need to grow beyond inflation. But if it's there for you and you don't like your job, instead of trying to find the next job, running from this one to the next one, you can say, you know what, I'm going to cut the cord. I'm going to take the next three, six months and be away from work, think through what I'm doing and then confidently and intentionally choose the next step for me. That will blow people's minds for the most part, because everybody's talking about, oh, I need a job. I can't not have a job. And cash flow is so important because I have so many expenses. Yeah, that's the normal conversation with the general public. But if you can plan responsibly and take advantage of your cash flow power because you make good money, you shouldn't have to be in that same boat. You have the freedom and flexibility to choose differently.
- [17:17]
B
To translate that, I think to advice you can take home with yourself and apply like anywhere. It's to know when you are making a decision that that requires you to walk through a one way door versus a two way door. Right. If you're making a decision that is low cost and easily reversible, optimize your speed, just decide, just do it. Because you can always change and then you still retain your flexibility around that. You still retain your choice because you know you can undo it, you know you can walk it back and or you know, like hey, if this doesn't work out, I've got a very clear plan B and plan C, I can do this instead of. But when you're coming up to a decision point that you can't actually back out of or is very expensive, it's going to be a costly thing to undo or change your mind about or it's going to take a big commitment of time and energy, slow down. Like you need to be very, very careful with that decision and with your finances. Those are usually things like big fixed costs, like that's a one way door versus things that are optional, things that are kind of maybe a spread out cost. I'm thinking something like buying a house versus renting I guess is, is that's probably the easiest, clearest one. Like you're not committed to that rental property. You can in theory just walk away from it. Ideally you wouldn't be breaking a lease, but it's not the same as I bought this property. It's in my name. It is totally on me, completely my responsibility. Regardless of what the economy does, regardless of how my family changes, regardless of whether I want to move across the country to take this new job, there's just a level of commitment there that you don't have with rental and there are trade offs. I'm not saying that one is better than the other, but one should signal like hey, less flexibility over here, proceed with caution versus Nope. There are lots of things that we can do on this side of things if it doesn't work out the way that we think.
- [19:08]
A
Yeah, that's a great example of dynamic money right there. I think it's a great use case for short term planning even to Say like how, how am I going to use my money tomorrow? Because again, can only use a dollar here, can't use it there as well. And if you learn how to do that, please tell me, because you know, we can all be rich together.
- [19:27]
B
Does that come up a lot in conversations with clients? Do you phrase it in terms of, hey, what's the opportunity cost on this? Because that's really what you're talking about, right? Like if you can only say you can use a dollar over here, that means you're inherently saying no to every other use of that dollar.
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A
Yeah, because really it's in the conversations we're having, all we know is what we know. What are the facts at this day and time, not what could the facts be next year? Because there's assumptions built into that and speculation at best, it's what are the facts today? And I drill home with my clients, I say I need you to make this decision here and say it out loud that you know, if you choose this path here, you cannot currently do this other path over here. And to think otherwise, you're setting yourselves up for failure. So tell me now that you're willing to make this trade off and do this thing versus that one. And if you do that, we will a hundred percent support you going down that path. But until you make that decision and say it out loud, I'm not comfortable with you going this road. Because the gorilla in the room is that there's a problem with your plan because you told me this other thing was really important too. And that other thing cannot possibly be achieved if you, I don't know, buy this significant house. Like you can't also go on this crazy vacation next year because you use all the money for the down payment on the house and you don't have enough money or time to save up for that vacation in the timeframe you're talking about. So we need to either choose one and not the other or adjust the goal time horizon for the other or the cost for it. Reduce your vacation in this example, reduce the the price of your vacation from $30,000 to 15. Increase the time horizon between now and when you're going to take the vacation. If you're planning initially on next year, maybe it's three or four years from now. So just be flexible with this stuff. Admit that there are trade offs and commit to the impact of making these decisions.
- [21:31]
B
I like that you mentioned the gorilla in the room, because I don't know if you meant elephant or gorilla, but when you said gorilla, have you seen that? Video of, like, where people are playing basketball and, like, a gorilla walks through the middle and, like, unless you were told to look for the gorilla, like, you just don't see it.
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A
Yes, I was thinking of that.
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B
Okay, that's because. Yeah, that's such a good analogy for, like, what clients often will bring to financial planning is like, they've. They're watching the basketball game that's right in front of them, and it's exciting and it's great, and it's. It is dynamic. It's all these things that we. We want it to be. But then, yeah, there's this, like, gorilla person in a gorilla suit slowly strolling through that. Once they see it, they're like, oh, okay, got it, got it. And that gorilla, in this case is. I think it is most often, it's not like a bad thing or it's not even like this, oh, terrible risk that you didn't see coming. It's more like, all right, that other goal that we talked about last time, it's like the competing priority that just kind of got lost in the shuffle because you got refocused on all this other exciting stuff. That's. That's going on.
- [22:36]
A
Exactly. That's. That's the point. We're trying to draw your attention to the signal through all the noise, to all the gorillas, all the gorillas out there. Like, it's really just important to focus in on what is important to you so that you make the best decision for you.
- [22:53]
B
And talking about all of this, like, the theme of the podcast is what we want to do in upcoming episodes is kind of COVID a range of topics that all answer the question of how do you create money for life throughout your life so that you're covered from, like, a safety perspective of, like, you're not going to end up on the street living in a box, but also for life, like, to engage in life so that you're not just sitting on the sidelines waiting for someday, waiting for. I need to have X amount of net worth before I can retire. I need so much in the bank before I feel secure. I need, like, all of these things. We don't want to wait on them. We need to be able to use money right now to create the life that we want to live. So we want to create in some upcoming episodes. Dig into these, Some of these topics that we're touching on to answer that question. Not just have money for life to generate sufficient wealth that you can live well today and into the future. It's not just about skating by or getting, you know, the minimal. It's about being able to achieve the goals that are important to you. And I think a big, big piece of this that we haven't touched on yet that I think would be good to look at would be all right. Imagine if those gorillas that we talked about were risks. Like risk management is such an enormous part of, yes, investment management, but just financial planning, just managing your financial life, like understanding what risks are necessary to take. And more importantly, being able to see a risk and know that you know what. I don't actually have to take that on in order to do what I said was important to me. That is such an art, more than a science, I think, to recognize that it's a huge part of what we do. And I feel like nobody talks about it, just general.
- [24:45]
A
Well, risk management typically comes in like, well, how does your stock market portfolio manage risk? Or how does your insurance policy cover your risk? Like, those are obvious risk management techniques. But I think the conversations that we have touch on all of the risks out there beyond just products and investments, which I think that's truly what you are referring to when people don't talk about that kind of risk management. And that's so utterly important here.
- [25:11]
B
Yeah, yeah. I'm talking more about the risk of, like, the risk that happens when you are trying to hit a home run. Like the risk of striking out. Because most likely, if you look at baseball, most people go up there and hit home runs. Like that is rare. That is not the norm. Like, statistically, you are more likely to strike out if you're trying to swing it as hard as you can to get that ball to go as far as you can. So when you look at your financial life, you think that this one investment is going to like 10x, go to the moon, whatever. So, like, you got to get in on it because that's your chance. The risk that you take there is so out of whack to what you would actually need to do to have the money to do what you want. Right. So it's that kind of risk.
- [25:55]
A
Yeah, I mean, I don't know that there's a ton to add to that other than just remembering that as we aren't the first to say this, but wealth is about so much more than money. Yet money as it pertains to wealth can really help you make good decisions and live a great life if managed appropriately. And we haven't even talked about it yet. Maybe this is part of something we'll talk about down the road. But money also exacerbates things that are who you are, like your personality traits, how you act is multiplied. It gets so much louder when you have money behind it. And so it's not going to solve your problems. You need to work on yourself to solve your problems. But if you do that in tandem with growing your wealth, you can live a very full life. And living a full life is so important to me. And we want to deliver that message to clients to help them be able to do that even if they don't know what a full life means to them. Now, through the conversations that we have, we can not only allow them to live a full life, but really fill in the holes about what a full life means for them. And I think that's significantly intangible when it comes to true financial planning. It's not just about the bells and whistles, the optimizing your money, which is all really important. And believe me, I love that stuff. It is so much more than that. To make it your own, to make the plan your own and to live
- [27:19]
B
powerfully dovetails right into why the planning is an iterative process too. Because what you just said, that kind of. That's a process of discovering what is actually important to you. Because I think your first answer to that will be different than the fifth time you ask yourself that question. You keep digging deeper and deeper and asking why and why and why. Over time that evolves and it shifts. You get a meaningful, in a good way, you just understand yourself a little bit better. And I think that's where just experiencing things too. And why having the money to do that, to live your life is so important because as you gain more of those life experiences, that's so informative about like what you actually want to continue doing with your life. So if you're just kind of holding back or sitting on the sidelines, never deploying any of this money as. As you start to build it, you miss out on critical information about yourself that then informs the rest of the planning that you do for the next 10 years or 20 years.
- [28:18]
A
Yeah. And as you achieve whatever is you're achieving, or checking the box off the list like, I bought the house, I started a business, I had a child. Don't just set it on the shelf and say, well, I did that thing and now I'm committed to that thing going forward. Does owning a house still make sense for me? Ask that every five years, because it may not. The answer might change at some point. I don't know that you can say, does kids make sense when you have a kid because they're here for good. But I think it's, well, how do I want the relationship with my child to be and how can money facilitate that? And then starting a business, I think about that. I love the fact that I started the business. I feel really great and grateful about the business that we have. And would I want to start another business from scratch? Probably not, because I know how much it took to go through that. So it's just like you just got to be building your experience so that you can make better and better decisions because you experience certain things. When you come back to that same question, you have a different angle on it.
- [29:19]
B
So I think we will get into some more of this in future episodes. I know coming up we have conversations on a little bit more about risk management, about some investment strategy, creating more financial flexibility in your life, how you do that, some specific strategies that you can use, what it means to be a long term investor, and a lot more. So stick around with us as we kind of relaunch our podcast from Beyond Finances to Money for Life. And if you have questions, if you'd like to get in touch, feel free to reach out to us at beyond your hammock.com until next time, I am Keely Roberge.
- [29:55]
A
And I'm Eric Roberge and this has
- [29:57]
B
been Money for Life. Thanks for listening to another episode of Money for Life, hosted by Eric Roberge, CFP and founder of beyond, you'd Hammock and me, Kaylee Roberge. Our show is produced and edited by Steve Stewart. If you want to learn more about wealth management and hiring your own personal financial advisor, visit BeyondYourHammock.com and now for the legal stuff. This podcast is for informational purposes only and does not constitute financial, legal or tax advice and may not cover all critical complete details of every situation discussed. The views expressed by guests are their own and do not necessarily reflect those of the host or the podcast. Please consult a qualified professional about your specific situation before making any financial decisions based on this podcast or any other educational content designed for a general audience.