Wednesday, September 6, 2017

Life In A Box Blog #6

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.

Life In A Box?:
Developing an Organizational Structure for Your Assets

The video begins, “Remember when life was simple? When everything you had could fit into a box or two?” If we think back a long way, most of us can recall a time and place in which all of our toys and clothes might fit into one or two containers.  But now, things are different.

If you are like me, the thought of moving again is something of a nightmare because packing everything up would take days, with hundreds of boxes.  Ugh!!!  I don’t know how or when it happened, but now I possess items such as a quesadilla maker, storage bins with tons of Christmas decorations, five televisions, mounds of clothes for the family, and much more.  How did this happen???

Beyond that, beyond just the physical items that you own, your life has become far more complex
with ownership of a business, deeds, legal documents, cash account in three banks, insurance policies, collectible coins, IRAs, lots of random paperwork (receipts, warranties, etc.), and much more.  For most of us, these are stored all over the house in no particular order.  Moreover, written documents and unwritten dreams of the future exist, in a perpetual state of hope that tomorrow will just work itself out. 

The wish is that you will wake up in 10-20 years with all things consolidated and organized.  The dreams that you have, of a solid financial future and purpose in life and a sense of accomplishment, exist in your thoughts.  All the while, for the money that you have saved, you just hope that something good happens in the next couple of decades.

I get it.  Most of us live lives of hurried, stressful tension, at least most of the time. We just don’t have time or energy to get it all together.  Until we make the time to do it, with enough energy to carry it
out, we live our lives hoping and wishing that everything will be OK. Or, we just don’t think about it.

How do I take control over my money and my future?

Answer: I choose to live and plan with intention, making time and energy to get it done.  There is no magic, no mystification, no misunderstanding.  I just decide to do it.

Now, in deciding to just do it, sometimes it helps to perform some preliminary, warm-up actions that will provide a sort of jumpstart to the process.  To begin thinking about ‘thinking about’ change, and to begin by completing some pre-work on the project, is perfectly OK.  In fact, the pre-work shows some awareness that we really need to do this, that it is becoming a priority for us.  Let’s look at some examples of these before-the-actual-work work:

1. Begin by locating all legal documents, insurance policies, deeds, tax returns, and the like AND putting them in ONE place:  In my view, there is no simpler way to get started on a financial planning process.  Gathering each and every one of these documents can be a solid visual reminder of all that is involved.  Rather than feeling overwhelmed, the hope is that it leads a person to think “Wow, I really need to get this organized.”  Additionally, the process of gathering all of the documents makes the subsequent parts of the process MUCH easier.  If you are missing a document or two, it is a perfect time to order or find them.  In looking at these documents, you may discover that you need to update wills, update beneficiaries, add insurances, or something else. 

2. Budget 30 minutes per week just to focus on Financial Planning:  Thirty minutes is the show length of one sitcom.  Not long at all.  But devoting just 30 minutes per week to actual financial planning can lead to some dramatic results.  Use the 30 minutes to:

            A. Start a new online savings or emergency account ( )
            B. Jot down some major / important financial goals that you have
            C. List some financial questions that you have
            D. Get an idea of your allocation in your 401k or IRAs
            E.  Work toward an idea of your current net worth
            F.  Review your home / auto insurance and list any questions
            G. If you have a will, take note of the last time it was updated
            H. If you don’t have a will or powers of attorney, schedule a time to get those done
            I.  Discover how much excess cash you have each month, save 20% of it
            J.  Get a general idea of your overall debt situation and financial position
            K. Review your mortgage terms and balance. Consider refinance or accelerate payments.
            L.  And Many More……….

3. Write down some of your financial goals on note cards and post them in two or three places in your house:  Repetition and multiple reminders work for me.  If I see a reminder two or three times a day, I am far more likely to follow through with an action.  You can list your financial goals, financial questions, current debt load, cash accumulation goals, income goals, and more.

4. Read, read, read:  What can I say? The more reading you do in a topic area, the more motivation you are showing actively.  Whether it is a short article or full book, read on things that you want to know.  The more informed you become, the more questions you will have.  And typically, these new questions are far more detailed and productive.

5. The Interest Exercise: This one can be painful and shocking.  Do your best to calculate the total amount of interest that you are paying each month.  Interest can come from your mortgage, a car loan, student loans, other loans, credit cards, and more.  Consider service fees and costs as a part of this.  Get interested in the amount of Interest you are paying.  There is no better motivator for financial management than to discover how much you are paying others each month to loan you money. 

6. Identify Savings / Discounts You Could Have:  A few phone calls can lead to big savings and discounts.  Once, I called my cable provider to inquire about saving money. They informed me of a ‘brand new plan’ that offered current customers an approximate 30% savings each month. I would never have known about it without that phone call.  You can inquire to your credit card providers about eligibility to lower your interest rate.  You can accelerate your payment schedule for a mortgage to save dollars.  Shop around for credit cards, loans, and so on.  I often get a little concerned about those who get every financial product from one bank or one provider.  Open up the world of lending to find the best deals.

7. Additional Income Streams: Have you ever wanted to develop additional income through a part-time job, rental property ownership, franchising, or another venture?  A big part of financial planning is putting some thought into developing some additional ways to produce income.  One of the most popular, and perilous, means of producing additional income (and tax savings) is to own rental property.  But it is not for the faint of heart.  Some choose to start an in-home business to produce an additional $300-500 per month.  Some consider a weekend part-time job.  Whether it is for a year or a lifetime, you can benefit yourself greatly by looking into one or two ways to produce extra cash.

8. Collaborate with other who have gotten or want to get better control over finances:  Find a friend or co-worker or churchgoer who has a similar interest as you do with money.  Some of us are better at this than others.  But consider posting on your social media to find a friend who wants to do some money management or financial planning.  Exchange notes or learn from each other.  Share your concerns or questions with each other.  Join a formal group or just talk with others in more informal settings.  We learn from others. Be willing to open up a bit and seek to learn from others’ experiences.

Of course, there are many other ways to ‘begin the beginning’ of your personal financial planning process.  We take baby steps until we are ready for full strides.  But we keep moving forward with the goal of a fully organized, written, and realistic financial plan in place.  We may never run, but we will never step back.  Do what you can to take action in some way, no matter how small or big that action may be.

In summary, it is OK to take warm-up or preliminary steps to financial planning.  It is perfectly OK.  Allowing those steps to lead you to scheduling an appointment with a licensed financial advisor is the key. The willingness to work with a professional third-party financial planner is the goal.  All of the major financial thinkers and bloggers recommend it.  Working with a third party allows for objective input and strategy that will pay off in the mid- and long-term.

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.

Check out these short videos:

Entrepreneurs and Financial Planning:

And learn a little more about me on my website:

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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