Tuesday, August 29, 2017

Considerations In Medias Res

Welcome to 

Middle-aged Money Man 

a blog devoted to considering and choosing the wise money moves 
one needs to make between the ages of 35 to 55.

Considerations In Medias Res:
Plotting a Right Path for Middle Age

I am a big fan of literature of all kinds. I love to read.  Most of my life has been spent in sports and business, but my truly favorite thing is to abide in the twists and turns of a well-written story.  In Medias Res is a literary term to describe when a story or novel begins in the midst of high action, as if in the middle of the story.  Many movies begin this way, with the lead actor involved in some tense, frantic series of events.  I remember almost every James Bond movie opening in this manner.

And here we are…….. in the middle of our lives.  Has it really been 20 or more years since I was in high school? Kids, marriage, house, business, and much more have grown into daily experience. I remember when I could move from one apartment to another with about 10 boxes.  Now, it takes two big trucks filled to the gills.  Maybe one reason we put off financial planning in our lives is because when we stop and look at life, we are quickly overwhelmed by ALL of the things going on.  We feel that we must urgently handle so many, too many things.

So, what is the process for getting from here (without a will, no legal documents, without a budget, cash poor, behind on savings) to there (some measure of financial control over most of the current and upcoming costs that I have)?  How do I gain control of this daunting area of my life while still juggling all the other parts? How can I slow down enough to gain the mental clarity I need to really make some changes to how I use money?

That is the whole point of this blog.  Finding a way to manage wisely our income, assets, savings, and opportunities while living in the whirlwind of life is the task that is set before us.  I read an interesting factoid recently: Most people spend more time planning one vacation than they spend on planning their financial lives.  Wow!  Think about that.  We may spend more time and resources planning one 5-7 day period of time than we do for planning the next 40 years of our lives.  If this is true, it may indicate a lack of understanding about the seriousness of our relationship with money or it may indicate a more serious problem with our overall priorities.

Either way, we have to correct course.  We must find a way to cut through the busy-ness, stop for a few seconds, and chart a path toward congruent, prudent financial management.

First Two Steps

The first steps involve: 1. Believing that it is worth doing this and 2. Believing that I can make the time to do it.  I must see the importance of building some sort of financial plan.  I must see and understand that this task is Do-able.  I would suggest that these are the two key cognitive walls that I must climb.  If I am missing one or both of these two beliefs, any chance of making an asset management system work is nearly zero.

I am reminded of Henry Ford’s comment, “whether you think you can or you can’t, you’re probably right.”  This is a succinct explanation of money management.  Belief is such a big part of the puzzle.  Some of my clients ease into the idea of responsible financial planning and have little problem with implementing it.  However, for those who are more like I was, the idea of developing a budget, saving for the future, accumulating cash and more can seem overwhelming….. perhaps impossible.  One thing I have learned, if we believe an important something is impossible (though it is perfectly do-able and needed and vital), we will put it off and do our best to pretend that other things are more important. 

One sure way to believe in financial planning is to spend time with those who have planned financially and live a wealth focused on accumulating assets.  One sure way to continue in the malaise with no regard for putting together an asset management system is to spend all your time with those who have the latest tv, boat, clothes, jewelry, and so on.  Those who value toys and trips more than a reasonable savings plan will convince you that a firm, rational financial plan is just not necessary.

Again, some are more naturally self-disciplined.  They will develop systems organically that just work.  But for most of us, accountability to maintain a course of action requires that we involve others, develop systems, and have a written idea of what we need to do.

The Jumpstart

Let me offer a few tips to jumpstart your personal financial discipline and begin to develop a financial plan:

1. Personal Notes:  I am a frequent fan of personal notes.  I put notes for myself on my mirrors, car dash, office desk and more.  Sometimes, the note just has 1 word  --  such as believe or focus.  Sometimes, the notes are more detailed.  But the effect is this:  It reminds of a very important concept or plan of action.

2. Read:  Reading a book with a topic that you want to learn more about or an action you want to take can be very helpful and motivating.  This is especially true with books that paint a picture of how life will be when you have achieved your goal.  Getting a clear idea of the ways in which life will be different when the goal is achieved is crucial.  And…. it is important to actually engage and to read the book. Get into it. Take notes. Highlight.  Re-read meaningful chapters or paragraphs. 

3. Start a Savings Account or Emergency Fund Account:  Use Bankrate.com to find a great bank with a savings account that pays interest and has no minimum deposit.  You can find the banks such as Barclay’s, Ally, Citibank and more under the Banking à Savings rates tab.  Simply create a log on to one of the banks and open a new account.  Schedule an automatic ACH / ETF from your checking account to the new account weekly or monthly.   Ta-da !!!  You have started a savings plan !

4. Make a Verbal Commitment to a Loved One or Friend:  There is power in speaking things out loud. Results can come from asking for accountability on a spoken oath.  This is a primary principle for my life.  Saying a thing out loud makes that thing far more tangible, more real.  Even if you just say this commitment to yourself once a day, the vow becomes more likely to occur. Say It!

5.  Find a Friend who has developed a Financial Plan:  Ask around. Find a friend who has gone through the process.  Those who have gone through Dave Ramsey’s Financial Peace University are valuable.  But preferably, find a friend that has gone through a formal financial planning process, not just focused on debt reduction.  Ask them questions. Get an idea of the time commitment required.  Ask them about the difference it made in their lives.

6.  Identify Roadblocks:  List and describe the things that tend to keep you from thinking this way. Why would I not get my financial life on track now? How does it benefit me to go another year without financial direction? When I start to get motivated to work on a plan, what are the thoughts or events that come to my mind to prevent me from carrying through?  How do I really FEEL about doing this financial plan? Does it overwhelm me? Do I consider it important?

7.  Identify YOUR reasons for getting a Plan together:  Each of us values a goal for different reasons.  Taking 60 seconds to list YOUR reasons for making a change or achieving a goal can work wonders.  A good, real reason for doing a thing is often the precursor for Action.  When we take action, focused action, results come quickly.  Know YOUR reasons for getting your assets organized, your cash segregated, your risk managed, and more.  Whether it is stress relief, wealth creation, ability to give to charity, finally having a good night's sleep, or whatever, just do it.

8.  Picture a Life WITHOUT your Biggest Financial Distraction:  What is the one financial issue that tends to dominate your thoughts and feelings? Is it debt, income level, risk, something else?  Try to imagine life without that problem.  Try to see yourself living a life without that concern.  How would life change or feel different without that issue in your mind every day?  For a student loan or credit card debt or no cash or whatever, imagine how you would function and feel without that issue.

Of course, these are just some preliminary considerations as we go about our lives.  They are meant to help us set the stage for actually getting a plan together.  In Medias Res…. in the middle of things.  Each of us is left with two choices: either continue as is or launch ourselves toward where we really want to be.

In my days of doing individual therapy, I would often use Reality Therapy’s 8 questions.  The first question is: What do you want?  The second: What do you Really want? The third: Is it working? The fourth: What’s your plan to make it work?

One point of asking these questions, clearly, is to identify and name your current situation.  But the other more subtle point is to remind you that the responsibility for change is YOURS alone.  We wouldn’t want that any other way.  If we are not in control of our lives, who is?  If I cannot change my life, who can? If I am going to get where I really really want to be, it is really really up to me.

Personally, I want to get there. I am done with wishful thinking and wistful lamenting. It is my desire to bring action and accountability to bear in my life so that I can get to a place of financial ease.

So, I hope that this blog article has been useful to you. My team’s goal in working with clients through the financial planning process is to build solid foundations, save wisely, invest profitably, and rest easy.  Until next time…… Be Blessed.

Richard Barbee
9724 Kingston Pike #701
Knoxville, TN  37922

These are the opinions of Richard Barbee and not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. None of the above should be construed as individual legal, investment, or tax advice. Please consult with a legal, investment, or tax professional regarding your unique circumstances. Neither Richard Barbee nor Cambridge can offer legal advice.

Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Advisory services through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Slate, Disharoon, Parrish and Associates, LLC are not affiliated.

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