“A waterfall begins from only one drop of water, sir.”
-P.K in the movie, The Power of One
As we wrap up the year, we take stock of the progress we have made, and look toward the new year. There are really 4 areas of financial life. I call it our F.L.O.W ® process.
Financial Markers – are milestones along the way that mark the progress you have made and where you want to go. Markers are unique to YOU. We can only walk on our own path; no one else’s. Your starting line is where you are today. The finish line is one SMALL step forward. Tomorrow it repeats. I have seen many people wait, wait, wait for the perfect moment that never comes. The turtle beats the hare by steadiness and consistency. Lesson: Pay a little more toward your debt. Invest a little more each month. A little turns into a lot due to the miracle of compound interest.
Life – is to live. Guess what? This is also unique to you. It does not matter how much money you have, if you do not live a life with meaning. What is life with meaning? Whatever warms your heart. For example, I played some bad golf a couple weeks ago, but the weather was fantastic; no cloud in the sky and 70 degrees with no humidity. Being aware of those moments, are peaceful. That day I played with an older guy, who was going to play basketball with his grandkids after golf. No matter what we shot that day, can take in those meaningful moments. And beating ourselves up for bad golf, can actually take away from those meaningful moments. Lesson: Live for Life, not the “likes”.
Obstacles and Anchors – are real or imaginary, see or unseen challenges that are in the way of our goals. For example, this could be tax law changes, unforeseen expenses, health problems, spending habits, and behavioral challenges just to name a few. I had a couple in my office that in spite of making a great deal of income, they were in bad shape financially. How? They had a lot of “stuff” and a ton of debt. Every paycheck went to making payments.
We created a plan to build up an emergency fund. They did pretty good for a few months, then they spent $4000 on a fancy household item that could have purchased for $200. This is an example of behavioral Anchor. It is like having a powerful boat but dragging an anchor. The solution here is having open honest conversations and to prioritize what is most important. This is not easy. You can have a great map and good boat, but you must pull up the anchor, if you want to go anywhere. You want to know where the most pressing Obstacle or Anchor is for you? The one that is most painful to talk about.
There are many obstacles lie ahead on the river of your financial life. There are many anchors we carry unnecessarily that hold us back. Which are in your way? Do you have someone who can see what you cannot see? What is big Anchor holding you back? What Obstacle may be around the bend? Lesson: It is hard to go with the F.L.O.W when you are dragging your anchor.
Wake, what you leave behind – I had a conversation with a lady, who sold out of her investments due to the uncertainty of the election (see behavior anchor above). She said I am old, and I don’t want to have to worry. Knowing her entire financial position, she really did not have anything to worry about. She had 5 years of expenses worth of cash. She lived well below her means. Her investable money was not really for her, it was for her kids and grandkids. Her time frame was really, decades, not years. Selling was a mistake. Our financial decisions we make, how we spend our time (basketball with grandkids), last a lot longer that what we might think. It can impact generations to come. Lesson: Our daily decisions have an impact long term. We are all playing the long game whether we know it or not.
Every single area of F.L.O.W. is unique to you and they all relate to each other. What give you a sense of purpose, is related to the Financial Markers you have set. The Markers have their own unique Obstacles and Anchors. How you deal with these Obstacles and Anchors affects the Wake you leave behind.
On the lighter side, I got some new golf clubs. There are many financial lessons related to this. Stay tuned…
Hope all is well with you and your family,
Jeremy Finger, CFP®, CIMA®, CRPC®, CPFA
Founder & CEO
Wealth Management Advisor
Finger Financial Five – 5 points in 5 minutes or less – is to provide you with a weekly shot of useful financial information. My intention is to share principles, so that you will have more clarity and peace, that help you make better financial decisions.