Money Mindset: Did You or Did You Not Contribute to His Success?

Photo Credit: Emily Scott

Among the many things that occur for me between the year-end and the year-beginning is the review of what I call my financial recipe.  The ingredients of this recipe include my budget (actual and planned), my philanthropic contributions (actual and planned), the income forecast for the coming year, tax preparation, and an examination of the alignment of my values with my money.  As with any recipe, the ingredients are all mixed up and baked together: the past year with the new year, the personal expenses with the professional expenses, the expected budget with the actual balance sheet, and the intellectual with the emotional.  It is the latter – the realistic versus the irrational – that always catches me by surprise.

Tangent: My Bag Lady Syndrome (I have mentioned this in other blogs), which, by the way, affects nearly 50% of women in the United States (according to a 2014 study by Allianz Insurance), is about as emotional vs. intellectual as you can get. 

Two things happened in the last 12 months that caught me by surprise – me, someone who has been very conscious of the emotional side of money for decades.  The first: my father died in April at 96, and my mother turned 92 in June.  I realized that my genetics coupled with my relatively healthy lifestyle could potentially push my age far longer than I anticipated.

 I went back to my life’s financial plan (not to be confused with my yearly plan) to adjust for my longevity.  The domino effect is obvious to me; my wealth needs to be spread out over more time, which means I have to re-evaluate not just my annual budget but my investment strategy as well.  While this is all fabulously practical, the emotional side of the equation made me gulp as I realized that my funds and my spending must be altered by the 30% increase in my life span.  “Mama needs a new pair shoes,” quickly disappeared from my dialogue.

The second: I heard the echo of my ex-husband’s comments about our financial picture when we were separated and going to marriage counseling; that he would have been just as successful with or without me. (Why the echo now, I’ll explain in just a bit.) I wasn’t surprised by his ownership of the money as it is common for the breadwinner to have this perspective.  I was hurt, and then indignant, by his belief that I did nothing to contribute to his success, especially since he’d always claimed otherwise. 

The debater in me wanted to point to all the ‘evidence’ that proved otherwise.  And I have lots of it; including emails from the very man himself extolling my virtues and help.  Here’s the deal – our marriage ended over 4 years ago, so this is an absolutely moot point. 

The rub, the punch in the gut, of being told I was not a contributing member of the partnership goes to the core of how I viewed my identity for 20 years. His words infiltrated my self-worth. It took serious work on my part to get the missing links back in line.  Included in those absent pieces was reconnecting with what I do well, appreciating and recognizing my own skills and talents. For the most part, the effort was worth it.  My metaphor for the healing process: I went from an amputated arm, to a broken arm, to a broken wrist, to a broken finger, to, at present, a hangnail.  You know, that ‘something’ that just seems to catch on ‘something’ that causes you to say “ouch.”

So why now – why did this echo rebound years later? Over the last year, this sentiment, this fear, this wound has come up for many of my clients during our discussions. I am astounded by the number of divorced (or divorcing) women wading through this question of identity and worth. What did they add to the equation for all those years? That’s what they’re asking themselves, and me. I am not alone in this vortex. 

I discussed this phenomenon with a woman I respect immensely, Joan DiFuria, founding partner, of Money, Meaning, and Choices; on how one moves forward.  The minute she used the word, “reframe,” I sat up and took notice, as this is one of my favorite tools, personally and professionally. 

Reframing: Our thought process often gets in our own way and if we can redirect the thought – reframe – we then have an opportunity to add new information into the equation. 

Joan said, “What are the actions you take to reframe?  You acknowledge that if you don’t get recognized, it doesn’t mean you need to devalue your contribution. Fair is not the objective.”  In other words, you need to come to terms with your needs and your worth, on your own or with professional help. Trust yourself for you deserve it. Joan added, “What we can’t recognize, we can’t change.”

I spend a lot of time with my clients, interviewing them to learn their story, their narrative.  Together, we combine what they think their narrative is with what others think their narrative is. The epiphany occurs when we parse out the conjectures of others within the portrayal of ourselves.  As they say, everyone is entitled to their perspective.  That’s the entitlement – it’s their perspective, not the universal truth.

Interestingly, one of my recent female clients is the breadwinner of the family.  We’ve talked about the balance of financial power, the respect needed on both sides for each partner’s contribution to the family.  It’s not binary, it’s multi-complex.  Cultural and societal norms, familial backgrounds, how we value money, how we assess the power of money, how we define work and partnership, and how we incorporate our own experiences are just part of a long list of questions to explore. These are the ingredients that make up our approach to finances, our personal sense of worth.

Volatility is Back

“Volatility is back,” a Portfolio Manager from First Fiduciary Trust declared at a business lunch last week.  She and the subsequent panel speakers were talking about the recent plunges and surges in the stock market.  After more than a year of rising stock prices and very low (if any) volatility in the market, the last couple of weeks have proven that those calm waters may be a thing of the past. Uncertainty once again rules the market, and therefore our financial wellbeing.

Normally, the market fluctuations and the declaration of rising volatility would send me into an emotional tailspin.  My bag lady syndrome would take over my entire being, panic would set in, and I’d run for cover (under the sheets). Weird that I’ve been calm. Odd that I haven’t thought about converting all of my holdings to cash and then stashing the bills under my mattress. Surprising that, in response, I haven’t sold my designer clothing, the artwork on my walls, the walls themselves.  Even a recent date told me about his stock selling frenzy (before the markets rebounded), and how nervous he is about the markets. I assured him that this was a blip on the radar screen; I told him not to panic. I lectured about how the media is creating an artificial panic by focusing on the point drop rather than the percentage drop (minimal) in the stock market. I added that the fundamentals remained sound and the economy was not in a freefall.  I can’t begin to describe how unusual my reaction is for me.  I’m actually amazed that my portfolio manager didn’t call me to ask why I didn’t call her; as she knows how low my risk tolerance is.

Am I delusional?  Have I drunk too much of the “Investing-is-a-good-thing” Kool-Aid?  Am I in shock?  Am I in denial?

 No, no, no and no.

Four years ago, when I became a divorced woman, I reexamined what was important to me from a financial perspective. I had to as, suddenly, my life was dependent on “my” money, not “our” money, which, just in case it is not abundantly obvious, is an infinitely smaller pot. Taking pen to paper, I wrote in caps and in bold: FINANCIAL SECURITY AND PEACE OF MIND.  I created every possible QuickBooks report that would reflect my financial portfolio. I then constructed an annual budget I could likely afford.  I took all this information to a financial planner and said, “How long will this last, assuming a very low return on my investments and this level of spending? AND, read my top line carefully, as I am serious about my financial security and peace of mind.”

We argued about the low return I insisted she use, as she thought it was way too low.  I explained to her that I needed, on an emotional basis, to look at a potential worst-case scenario. If I was financially secure in that illustration, I would be even more secure in a higher returns situation.  NOTE: Okay, there are worst cases – another Depression, Armageddon, nuclear war, etc.  I can't even go there because even if I were to squirrel all my dollars under my bed, that would get me nowhere in those devastations.  Even my Bag Lady can’t go there.

According to her prediction, I was good to go until sometime in my 90’s. Okay, I thought, I’m prepared.  I’m prepared because I’ve put my affairs in order from the vantage points of the intellectual and emotional sides of my money.  And, as I used a low rate of return in the predictive model of my finances/life, when the market volatility recently returned, I was able to go back to my report and find comfort in that ‘security blanket.’

That was all well and good until last year when I suddenly had several unexpected expenses come my way, including the new tax law, which increased my annual costs by 50%. So much for my budget. My knee-jerk reaction?  Sell my home, take money off the table in my illiquid real estate investment, improve my annual cash flow, and move into a studio apartment.  This makes perfect sense considering my bag lady syndrome, so, to the real estate section, I went in search of a tiny place I could afford. 

But here’s the deal; I love my home, it’s my sanctuary, it’s the sanctuary of others as well, and, yes, while it is only property, it is only a ‘thing’, I really didn’t want to leave it just yet.

My next reaction?  Go back to the budget. The filtering question:  What can be taken away? 

This was reality time, people.  I had to own up to my expenditures. What did I have to spend each month on necessities? What did I want to spend on various luxuries? What was need vs. want?  Not only did I examine my living expenses, I paid close attention to services I was outsourcing. What was I capable of doing myself, and what did I need (or want) to pay others to do for me? 

Case in point: I pay a professional portfolio manager a lot of money to recommend and manage my investments.  I have an MBA; I worked on Wall Street; and I understand the markets, asset allocation, and investment theory.  I’ve not only invested my own money, I invested other people’s money as well. 

Here’s what I learned:  I’m horrible when it comes to my own investing.  All my objectivity is overpowered by my emotions.  Put a little pressure on me and the panicked bag lady comes out in full force.  I once said, “My version of asset allocation is to put all your money under several mattresses, not just one.”  The people in the room--this I said during a quarterly review meeting with my ex-husband and our financial managers--laughed…I was only semi-kidding. 

Could I save money investing my own money?  Perhaps.  This assumes that my intellectual capability could win over my risk-averse/financial security fear incapacity.  I am aware of the difference between risk (“known unknowns”) and uncertainty (“unknown unknowns”) which hinders my investing clarity. This also assumes that my life wouldn’t be utterly consumed 24/7 by my watching the markets like a hawk.  Do I really want to watch CNN 24/7, a station I avoid like the plague? Do I want to bet my PEACE OF MIND on being better than the professionals; who watch/research/model investments for a living? No and no.

And this is where telling the truth to yourself is vitally important.  This is where the judgment of others falls short.  

My clients and I discuss their assets from these vantage points: values, priorities, fears, wants, and needs.  The acceptance of what you have, of what you are dealing with, from an all-inclusive perspective.  My premise is that when we open to a broader picture, we are more likely to embrace our decisions.

This is why I haven’t panicked…yet.  I know me.  If the markets continue to roller-coaster (which I never liked riding even as a kid), I know I will have all sorts of reactions and probably few will be as calm as what I am experiencing now.  After all, my portfolio manager is on speed dial. 

The Value of Mindfulness

                                                                                                                                                                            Photo Credit: Emily Scott

The tagline of my business is “Your values, vision, and money,” which makes the first question I ask my clients natural and obvious: “What are your values?”  Ah, you say, what do you mean by values? Values are the fundamental beliefs a person holds, which can serve as a guiding force in one’s life. I’m with the many gurus and philosophers who believe that knowing your values and acting in concert with them is key to happiness and success.

A key piece of the work we do together, my clients and I, is to evaluate whether their values and priorities are reflected in their legacy planning, philanthropy, and spending.  For instance, if they claim to value the environment, are they donating to nonprofits specifically focused on any of the environmental issues such as land use, water, forestry, or global warming? Simply put, is their inner life brought forth in their outer life; that’s the question. This alignment is what we curate and as their thought partner, I strive to help them achieve this objective. Here’s the big take home point:  We create mental conflict for ourselves when our values and our actions are in opposition.

Recently, someone asked the same question of me. It’s all well and good that I spend my days exploring values, but what are mine?

Ten years ago, I wrote out my values list. Curious, I went back to see if my values had remained the same and indeed they had.  I believe that values can change over time as we grow, gain experience, and learn.    That being said, I continue to work on the alignment between my values and my daily life. I think that job is never really done. I thought I might share what I rediscovered on that long-forgotten list.

The first value I wrote is mindfulness.

I chuckle at the memory. When I wrote this list, which I did in conjunction with my husband (now ex), he’d written in that very slot, “Strive for perfection, go for the gusto, be the best you can be.”   

When we compared our lists, this glaring difference seemed to explain a source of conflict. We approached decision making very differently, and because of this, we often butted heads.  At the time, we came to appreciate that, by combining these different values and perspectives, we were capable of making much better decisions. That is, if we were willing to be patient with each other’s approach.  I remember thinking, “Well, that’s mindfulness at work right there!”

Mindfulness also played a role in how I thought (and still think) about spending.  While my ex-husband’s normal response was “We can afford it,” I would say, “Is this how we want to spend our money?” We were fortunate in that our disposable income allowed for luxuries, the kind that far too many couldn’t even consider.  Yet, I grew up with a depression-era mother who instilled in me the value of being mindful about spending.  She helped me understand the tradeoffs and choices, for example, whether to save money for a special occasion or spend my allowance on something that would give me immediate satisfaction.  

How is mindfulness reflected in my daily life now? In some ways, it’s a subtle undercurrent, and in other ways, overt.  The subtle ways I would call part of my personality; I’m in my head a lot and think longer about an issue, a situation, a plan, a friend, a blog than probably anyone should.  It is with conscious mindfulness (the more overt variety) that I keep track of and acknowledge my friends’ important events, for I want them to know their importance to me.

Between subtle and overt is the “in general” course of action. Often, my approach to a problem is to reflect, think of different scenarios, ask others for their perspective, and to gather data.  Mindful, to me, is the opposite of impetuous, reactive.  It’s much more about going in, exploring how an idea sits with me, what it requires of me, and others. Of course, there are times when my gut instinct has the easy and obvious answer.  And, unfortunately, there are still too many instances where my knee jerk reaction is what I act on; rarely is that outcome good.  

My observation – which perhaps you share as well – is that rash action is the antithesis of mindfulness.    Those rash actions, those are the ones that get us into trouble, that derail us, that get us thrown completely off course. One day we wake up, and we don’t know how we got where we are.

The very conscious, or overt, acts of mindfulness are the best parts of me.  Taking this value and acting on it in my daily life has proven, time and time again, to bring me joy.  

I often talk about “coming to the conversation curious,” the idea being that when you approach something with an open mind, the amount of information, understanding, and enlightenment you are rewarded with is off the charts.  When you come to the conversation curious, that’s when you truly connect. I will say that when I practice what I preach, the outcome is full abundance. Still a work in progress, I make it a point—I’m married to the concept--of coming to the conversation mindful, curious; open to the possibilities, the choices. When I betray this value, nothing good comes of it. I find myself dissatisfied.

Perhaps this struggle of merging my inner life with my outer life is why I admire people who have found alignment between the two.  I think of Dr. Denis Mukwege in the Democratic Republic of Congo, a man I call my Ghandi.  His deep value of holding precious the human life has had him working tirelessly for over 20 years, mending thousands of women and girls who’ve been brutally raped and tortured.  His eyes are bloodshot, his body shows signs of fatigue, his heart and soul are scarred by what he has witnessed. He has survived death threats and attacks and he is now unable to come and go as he pleases.  Yet, even with the many sacrifices, he has found deep satisfaction and joy because he has never wavered from his values.

When we think of someone who has his/her act together or seems so grounded, is he/she displaying the alignment of values and behaviors?  Is that what resonates with us? When we think of our heroes, of the people we deeply respect and want to emulate, is part of that the ideal that they “walk their talk?” Is that what we’re after?  For me, I would say yes.  

You don’t get there without carefully considering your values and living by them.