Outdated Rules, Outdated Results: Rethinking Your Relationship with Money

Where do your financial beliefs come from?

You know, the ones that inform where you put your money. That determine what you deem to be safe vs. risky. That influence how quickly you max out your 401(k) no matter what. That tell you debt is evil.

There's a lot of well meaning "best practices" out there, and most people simply listen to what they're told...ESPECIALLY in relation to money.

But how often do you actually re-assess your financial beliefs?

I want to paint a really clear picture for you quickly...

You trade your most valuable and scarce resource in the world, your time, for money. The pursuit of money probably occupies more time than anything else in your life, with the possible exception of sleep.

The vast majority of decisions you make are tied to money.

The number one stressor in America is money.

20-40% of all divorces are related to money issues.

So why the hell are most people operating under the financial equivalent of Windows 95, outsourcing the management of their money to people running Windows 98, frustrated they don't have enough, but unwilling to make a change?

Who do you listen to?

I remember in college hearing my dad tell me that I needed to put money in the stock market and just never look at it.

As I sat in my apartment I thought "how the hell am I not going to look at this money??"

Dad had the best of intentions. He followed the conventional logic. And my dad was an incredible man so I don't say this with any negative feelings.

But if I followed him as a financial role model, I'd better either find a sugar momma (which I did lol) or strap in until I could count on social security to ride out my life waiting for the next direct deposit.

Are the people you listen to in the type of financial situation you want to be in? Or even on the same damn path??

The problem with most financial advisors

I was at a networking event last week and met a young financial advisor. That's a damn hard job, particularly for someone in their 20s, so I have a lot of respect for the hustle and guts it takes to get after it in that industry.

As I was speaking to this guy I asked if I could challenge him a little bit, and he said sure (I wasn't trying to be an unsolicited asshole).

I started asking about what he was and wasn't allowed to recommend to his clients. He was naturally limited to the offerings his company had available...various index funds/ETFs/insurance vehicles.

I asked if he was able to suggest any of the tools that the truly wealthy use...real estate, oil & gas, businesses, tax advantaged strategies, etc...

The answer was no.

He's a one-ish trick pony with the stock market, which means when it isn't looking rosey (that surely never happens right??), he can't offer much more than a shoulder to cry on when the market takes a shit.

And before you shout Warren Buffet's name, tell me if you truly believe your financial advisor is in the same ball game as the greatest investor alive.

Now don't get me wrong, I know some INCREDIBLE financial advisors. But they don't follow that model. They think outside the box. They run a model that opens them up to other types of deals. They give you the advice that's best for you, not for them.

I beg of you...look for those people in your corner who have what you want, or have demonstrated that they're capable of giving you the type of guidance you need.

The "best practices" that aren't

I could talk on this topic for hours, but I've already lost 75% of you.

I'll do more of this in the future, because I think it's so important. But I want to highlight a few things that we hear all the time that MAY NOT be right for you.

• Buy and hold forever, never look at it

• Don't worry about the market being down, keep investing. It always goes up

• Debt is bad

• Keep your money in what's "safe" (i.e. the stock market); stay away from risk (i.e. anything else)

• Max out your 401(k) before anything else

• Whatever you do, NEVER touch/liquidate your investments/401(k)

Let's be clear. I'm not here to say these concepts are completely wrong.

But they're sure as hell not always right.

Every situation is different. Your actions and strategies should depend on your goals, both near and long term.

To cherry pick a couple of these (I'll go in depth in future weeks)...

Debt. Yup, consumer debt sucks and is not good at all. But you know what's pretty cool? Leverage. Mortgages. Extending your runway. Financing your business. When used smartly, debt is an incredible tool.

Buy and hold forever. I hate this one, because I like taking advantage of opportunities. There are plenty of investments, particularly in the real estate space, that have a large upswing of growth (especially if you force appreciation) and then you see seriously diminishing returns. Yes, you can hold forever and it looks good in 30 years. Or you can sell, capitalize on that extreme upswing, and go do it again. Opportunities arise.

NEVER touch your 401(k)/investments. I had a conversation with a guy recently who was considering going back to his job because he was getting close to running out of runway for his business. He had filled up his sales pipeline, had a lot of momentum, but wasn't sure if they'd close before his cash ran out. Yet he was sitting on a brokerage account with almost $200k. Touching a few thousand dollars to give him the runway to sustain and grow his business can give him an incredible return, but conventional rules said no. Don't touch those funds. Are you kidding me?

As you can tell, I'm no financial advisor

So don't go doing anything crazy without talking to someone who took a really damn hard test (aka don't sue me, good luck to you).

But seriously...I beg of you. Challenge the financial beliefs you hold.

Ask why you do the things you do.

Ask why you have the rules you have.

Ask why the non-negotiables can't be negotiated.

You bust your ass every day, every week, to earn a paycheck. You owe it to yourself (and those around you) to educate yourself. Understand what's out there. Understand your blind spots. Understand your goals. Understand what options will help get you there.

Understand money.
It makes the world go round.

I know many of you may disagree with what I've shared. Hit reply and let me know!

I know many of you may be confused with some of the objections, especially because I just hit on a couple without going deep. Hit reply and ask the question!

Money is important. So I'll be talking a lot more about it, and I'll be more strategic in the future. But for now, I hope I ruffled some feathers. I hope you think differently.