Fear Not The Bag Lady

I know a woman named Lily. She lays awake nights worrying that her bed will soon be a makeshift cardboard box on the street. This despite financial wealth that would have the 99% salivating.

Lily owns her own home, a comfortably sized condo in a luxury building. She has an investment portfolio worth north of $5 million bucks. Annual revenue generated from investments? A tidy $200,000 before taxes. Oh yeah, as if that weren’t enough, government coffers kick in a yearly $16,000. Part of this bonus dough comes from simply reaching a certain age, and the other part is drawn from society’s pension fund to which we all contribute during our working years.

What does Lily do with all this money? Well, not one to feel that money is burning a hole in her yoga pants pocket, for the most part she’s a prudent consumer. That said, she indulges from time to time in travels around the globe. Sure, travel is pricey, but Lily loves meeting new people, experiencing different cultures, and she can afford it. And because she doesn’t come close to spending what’s remaining after taxes from her $216,000 gross income, she donates a fair bit to her favorite charities.

All in all, Lily has no financial concerns. But this doesn’t stop her suffering from a malady commonly referred to as, ‘What’s The Point Of Having Money If You Worry So Much About Money That Anxiety Stresses You Out, Meddles With Your Peace of Mind, And Jumbles Inner Equilibrium.’

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Let Go My Nose

I don’t mean to be glib. Money, and the chance of losing all of her money, is a real concern for Lily.

Frightened of losing her wealth, Lily fixates on the ‘what ifs’. What if my investment portfolio drops in value? And if that happens, what if I can no longer afford condo property taxes and monthly payments? If I have to sell the condo, and I place the proceeds in my bank account, what if someone then steals my identity, gains access to my account and all my money is taken? If I have no money, what will I do? Live on the street? Eat at a soup kitchen? Or if I get sick? What happens if I don’t have enough money to pay for health care? Or, or, or …

Are these real concerns? Sure. Conceivably, any of those scenarios could play out. But let’s step back for a moment, put a lid on fear, and give reason some room to breathe.

Lily is 75 years old. Her health is excellent. She has first rate insurance coverage that would take care of most, if not all, medical related costs. Her portfolio is mostly in high rated bonds and cash. Meaning? The portfolio is minimally exposed to stock market volatility, and risk of loss is highly unlikely. Her financial institution fully insures all customer accounts against losses arising from identity theft. And, if needed or desired, Lily could well afford private nursing care without dipping into her principal.

Still, try telling this to Lily and you hit a wall of fear that blocks reason from taking hold.

That’s the thing with money, our connection to it is intensely emotional, not rational. So, Lily, like too many others, lets money concerns lead her around by the nose.


ENTER BUDDHA

bmAttachment brings misery. Those who know the joy of peace of mind, whether wealthy or poor, have learned to let go the delight of having money and possessions.


Magic Numbers Are Delusions

The Boston College Center on Wealth and Philanthropy undertook a study titled, The Joys and Dilemmas of Wealth. The joys being obvious, the study focused on dilemmas.

For our purposes, here’s what stood out from the results: despite their enormous financial wealth (study participants had a net worth of $25 million plus), the majority of participants did not see themselves as financially secure. Go on, read that bit again. Now roll your eyes and shake your head because that’s the natural response.

You want nuttier? Here we go: participants stated that, to feel financially secure, they would need about another 25% of their current assets. 25% huh? So, with a net worth of $25m, we’re talking $6m and change. Whoa!

Just for fun, let’s break this down. Say participant ‘A’ has $25m. Presumably, peace of mind comes from being bumped up past $31m. As for participant ‘B’, she has $50m. Well, she needs to hurdle over $62m to bask in the warm and fuzzies.

What’s going on here?! The unfortunate part is that these folks will never feel peace of mind, regardless of how much money they have, because they are tying peace of mind to a dollar figure. The thing is, peace of mind does not suddenly arrive when you hit a magic number.

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Bag Lady Syndrome

According to results of a study by Allianz (Allianz SE – OTCMKTS:AZSEY), a giant German based life insurance company, nearly 30% of women between ages 25-75 who earn more than $200,000 annually fear the proverbial dropping of the other shoe that will result in them living on the street, alone and penniless.

And almost 50% of the women, regardless of their age, income, or marital status, fear becoming ‘bag ladies’. And these are women who run the family household and have a solid career, some of whom earn more than their spouse.

Why didn’t Allianz include men in the study? Well, it seems that while women tend to be grounded, willing to acknowledge limitations, and question themselves and others with a view to learning, men are, um, uh, um … different.

How so? Generally speaking, men make for terrible study subjects on this issue because they are prone to self-delusional thinking. Specifically, men the world over are known to inhabit two primary delusions:

  • Men know where they are going, thus never ask for directions.
  • Financial know-how is genetically programmed into their wiring.

My guess is that if someone ventured to study men on this subject, and were able to somehow, magically, tease out the male animal’s delusionary thought processes, there may come into being a condition known as Bag Man Syndrome, in which men exhibit the same money fears as women. Until that day arrives, we’re focused on women.


CHEWY BIT

For those readers who disagree about the nature of men, please write a letter to the editor (that would be me) explaining the basis of your disagreement, providing proof that you are not delusional, and I will be sure not to respond because, you see, a writer needs latitude and I humbly request that you smile and grant me this latitude.


Deconstructing the Mythical Bag Lady

I don’t claim to know precisely why this sense of impending financial doom is prevalent among women. But I’ll do my best to shed some light on the issue. In this regard, consider the following:

  • Travel through history and you’ll see that women were blocked from acquiring wealth, power and freedom. Today, this oppression continues outright in most countries though in subtler forms in Western countries.
  • Sure, women are now empowered like never before but there is still a ways to go. Economic imbalances persist in North America and Europe with women typically paid less than men for the same work.
  • As a result of taking time out from the work force to populate our planet and care for little ones, women earn less thus save less for retirement.

There are many excellent books on this topic, with the most recent one to make a splash written by Sheryl Sandberg, Facebook Chief Operating Officer, and woman extraordinaire, Lean In: Women, Work, and the Will to Lead – https://www.amazon.com/Lean-Women-Work-Will-Lead/dp/0385349947.

  • We humans become acclimated to our environment. If generation after generation of women are taught that money matters are not their concern, and are not afforded the opportunity to assume authority over financial matters, then over the decades and centuries, this kind of thinking burrows into the subconscious, leading women to internalize a belief that they are limited in their financial ability.

Okay, so if we know how the bag lady myth came about then the question becomes, how is the subconscious rehabilitated and destructive thoughts banished?


ENTER BUDDHA

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Do not allow the words or actions of others to define who you are, especially when those words or actions lead to self-limiting beliefs. Honestly acknowledge these beliefs, then challenge them. If false, discard them and replace with positive self-perception. Changing your thoughts, replacing the negative with positive, leads to confidence and ability.


Reconstructing Your Relation With Money

So if you’ve been plagued by this negative line of thinking, it’s time to stop and investigate why. It’s time to change your relationship with money, open up this particular space, and plant new ideas supportive of financial success and peace of mind such as:

  • There is no mysterious formula to successfully managing money. Read lots, study lots, and go to it, just like any other venture (oh, and staying part of the BuddhaMoney community will seriously increase your odds of success!)
  • Empowering yourself is good for you.
  • Banish fear through planning and saving.
  • If you’re feeling stressed, hire a qualified financial professional to help out.
  • The whole ‘bag lady’ myth and the shoe dropping superstition, let that silly thinking go so you can get on with life and not be dragged down by yourself.

Just so you know, I’m not giving up on Lily. I’m working with her. I’m planting seeds. I’m watering the seeds. I’m hopeful that she’ll one day be able to minimize the irrational money fears that grip her way too tight. And when that day arrives, when Lily rejoices in all that she is and all that she has, she’ll know true freedom.


ps. Dear BuddhaMoney members, this article was published back in January, 2017. It’s posting for the second time results from me encountering this issue over and over, and wanting to do what I’m able to empower people to face this issue, do what they can to lessen the grip of negative emotions, and feel that much lighter in the way they relate to money. 

 

 

You Can Have It All

I’m of the view that I can learn from anyone. In this sense, we are all each other’s teacher.

As for money matters, sure, I know a fair bit about finance and investing. Still, that doesn’t mean I’m done with learning more. Because when it comes to learning, less is NOT more. Nope. More is more. And my plan is to keep on thirsting for knowledge, to continue growing, until my departure date from this planet we call home.

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If You Want It, Here It Is, You Can Have It

My 17-year old son tells me that he’s terrible at managing money.

My 26-year old niece says she doesn’t even know where to start when it comes to investing.

My 42-year old friend complains about mortgage debt and making ends meet.

My 47-year old friend fears for his financial future, knowing he has contributed way too little to his retirement account yet remains unwilling to reduce borrowing and spending.

My 59-year old relative, who has crazy long longevity in her family, plans to continue working into her 80s despite a decent sized nest egg because she’s concerned she’ll run out of money before she runs out of breath.

My 81-year old Uncle, who lost any sense of purpose after his wife passed way, does little with his days but review his substantial investment accounts, the size of which seems to be the only support for his sense of self.

Whew! Not a content bunch, at least on the financial front. And these are some of the folks I learn from, with my primary takeaway being this: freedom is often a perspective, an outlook. And this includes financial freedom.

Because, the thing is, if you want financial freedom, you can have it. But not in the conventional way of thinking, i.e., not by earning or inheriting a gazillion dollars. Rather, through adjusting your relationship to money, by empowering your self through learning about money matters, by tweaking the way you manage money, this is how you achieve financial freedom.

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Money Troubles: Two Sources

1. I Want It!

When did so many of us so-called adults revert to an adolescent mindset? A sense of entitlement, a demanding, impulsive neediness to have what we want when we want it?

A long, long time ago (say, when Elvis first popularized hip gyrations), credit was virtually non-existent. So if you didn’t have the money to buy stuff, well, you didn’t buy it.

The obvious upside of this sort of system was no debt. The perceived downside was you either didn’t get stuff or your possession of stuff was delayed until you could save enough dough.

Then along came credit. And people feeling it was their ‘born in America right’ to possess material things that they cannot afford. And lenders, in business for the purpose of earning bucks from lending, were all too happy to lend.

As for the deep dark debt holes being dug by Ms. and Mr. Consumer, well, that was the lender’s business only if they didn’t get repaid. Otherwise,  Consumer would bear the burden and the strain and the stress of debt.

And why shouldn’t they? I mean, presuming Consumer is of the age of majority, presuming Consumer has been wearing big boy / big girl pants for some time, isn’t it Consumer’s responsibility to manage their finances?

It’s not like Consumer is being forced to borrow money, to max out several credit cards, to finance a luxury car or take out a McMansion home mortgage. So in the end, if Consumer is voluntarily taking on debt, then Consumer alone is responsible for that debt, and all its attendant headaches.

… Stop Wanting! 

You know a simple, entirely effective way to eliminate debt, to prevent that pulsating ulcer from ever happening?

For the single purpose of your financial health and resulting freedom, turn the clock back to the 1950s. Pretend credit does not exist. Pay all cash for each and every purchase, whenever possible, except for your home. And even then, borrow only the absolute minimum. And be certain you can and will repay the mortgage within the contractually agreed upon timeframe.

And recognize that not having the money means you cannot afford the purchase. And that’s okay. There’s no need to keep up with the Jones because the Jones are dead. This is 2017, not 1950. Once you stop wanting what you cannot afford, an amazing thing happens. The leaky boat that is your financial house soon repairs itself. Clouds disperse revealing blue sky, sunshine, and calm waters. Your sense of freedom expands, and life is good.


2. Greed Sucks

You can’t have it all and pay for it later. Thinking otherwise defines greed. Inherently, greed is destructive. It will mess with your moral compass. Blow up relationships. Leave you empty.

So how do you quiet your wants so they’re reasonable and not obsessively focused on Self?

Give some away. Really. Giving away money or possessions has the effect of taming the greed monster. In effect, you become more of a Giver, rather than a Taker. And once you start down the Giving path, here’s what happens:

  • Compassion. Prioritizing the needs of others ahead of your own wants not only reduces selfish desire, but also contributes to you seeing how much you already have, and caring for others.
  • Generosity. When you realize how fortunate you are to have what you have, in terms of the people in your life and material goods, then you become grateful. The natural outflow of a heart filled with gratitude is generosity. Generosity subdues greed. And inner peace and contentment then thrive.

But don’t take my word for it. Try it your self; see what happens. And if you’re so inclined, you might want to think about the following:

  • Regular Giving. Determine how much money, stuff and/or time you will give away, and when you will make your gifts, i.e., monthly, annually, etc.
  • Others First. Give to others before giving to your self.
  • Plan. Take time to devise a thoughtful giving plan.
  • Voluntary. Giving comes from inside you, not from social pressure. Be driven by issues close to your heart, issues that engage and excite you, whatever those may be.
  • Happy. Generosity brings happiness to you and the recipient just as surely as miserliness brings misery.

Yours For The Taking

All those people I mentioned in the second paragraph, if they take on the perspective that learning is a never-ending process, and if they are patient and kind to them self, then financial freedom is waiting for them. Because through giving to others and our Self, we’re all allowed to take freedom and feel good about it.

 

 

 

 

 

 

 

 

First Comes Love, Then Prenup?

First comes love, then comes prenup, then comes marriage?

Honeymoon Haze

Some three years ago, when friends of mine learned that I was ready and willing to tie the knot for the second time, they asked whether I had considered a prenup.

Hey, friends are good for that, for looking out for you when you might be wearing blinders. Was I wearing blinders? Well, I will say that the thought of a prenup hadn’t crossed my mind, even though I knew that more than 60% of second marriages in the US and Canada end in divorce.

The thing is, the woman I was soon to marry, my wife, best friend, my partner in laughter and joy, was the kindest, most gentle soul I had known and my brain hadn’t imagined, couldn’t fathom, a scenario where not only would we divorce but she would be unfair toward me in any way. Upon hearing words like this, sensing I had floated up to cloud nine, my friends repeated, with more urgency, the need to consider my finances.

Of course, my brain had been dipped in honeymoon juice, as are all brains when they journey through the honeymoon phase. You know, that period of time when the shiny new love of your life is perfect. If they habitually pick their nose, they’re perfect. If they run a half-marathon, smell like a skunk and refuse to shower, they’re adorable. You’re so ramped up on pleasure hormones that even the disco pop tunes they play every day at five o’clock while drinking a pina colada are filling your heart with warmth and desire.

Still, at some point, as it always does, the haze lifted. And when my feet touched ground I asked myself whether a prenup was good for me. And I decided it wasn’t.

Why? Well, being a guy who knows a fair bit about finances, who knows that conflict over money is a primary reason for break ups, you would think I would minimize my financial risk by having an agreement in place that protects assets I bring into the relationship. That said, my gut told me to assume a holistic view of our impending union (interpretation: the romantic subdued the pragmatist, for better or worse).

For me, marriage is about two people wholeheartedly sharing their life with each other, and part of that sharing includes finances. If you keep finances separate, then you are holding back, putting your self first. And that just didn’t sit well with me. If you’re going to say “I do” you better be willing and wanting to step in with both feet.


Enter Buddha

One is not compelled to marry. Rather, each person has the freedom to decide whether to marry. If that decision is made, then the two people have entered into a partnership. By their nature, partnerships are to be equal.


Under the Bodhi Tree

To challenge Buddha (who would wholeheartedly welcome any challenge), you have to ask whether he would have benefitted from a lawyer and a financial advisor sitting with him while meditating under the Bodhi (pronounced Boh-dee) Tree.

I mean, isn’t it simply a matter of taking care of business that you go with the odds (50% failure rate of first marriage, 60% in second marriages, and atrocious if you venture into marriage a third time or more) and protect your self financially? If you bring a whole lot of dough to the marriage and are used to living a certain lifestyle, why give away that slice of pie to your former spouse after the pillars crumble? Or if you contribute significantly to the marriage in non-financial ways, don’t you have a right to determine beforehand a fair amount of financial compensation for valuable contributions made during marriage?

All In Favour

Agreed, prenups do not fall under any sub-genre of Romance. Regardless, given the close to even odds of marriage ending in divorce, how could you not bring up the issue before the wedding date? A prenup is actually good for your marriage; it may even help sustain your marriage. How so? It will force you to openly discuss what assets each partner is bringing into the relationship, kinds of debts and how much, likely inheritance, saving and spending habits, and financial goals.

The prenup’s basic function is to protect each spouse’s pre-marital assets from a claim by the other spouse in the event of death or divorce. Specifically a prenup may state exactly how much your partner will share in your pre-marital assets in the event of divorce or death (especially relevant to those with children from a prior marriage).

But that’s not its only function. The prenup may also protect assets acquired during marriage by setting a fixed amount for spousal support or eliminating spousal support altogether.

Considering that the median marrying age in North America is approaching 30, it’s more likely that those entering marriage for the first time are bringing assets with them and, just as importantly, debts. For those entering second and subsequent marriages, you likely have more assets, and possibly debt, than when you were younger. All the more reason to have a full discussion about what each of you are bringing to the table. The thinking being that, on divorce or death, the certainty provided by a prenup minimizes destructive arguments about entitlement to assets, as well as minimizing court proceedings and scary legal costs.

All Opposed

Why an agreement focused on selfishness, on me, me, me rather than WE? An agreement that weakens the union through imbalance of financial security? Do the two partners arrive at the table with the same hand? No. One will have less money, fewer assets, therefore less bargaining power. Should one partner object, and the other partner be determined to forge ahead, what is the one with less money to do? What can he/she do? Call off the wedding?

Discuss, discuss, discuss! Absolutely you should discuss money and finances, what you have, what you owe, your spending patterns, values, and financial goals before vowing to spend your life by each other’s side. It would be foolish not to do so.

But why the desire, why the need, to lawyer up and legal language your discussion such that you walk away with a formal contract that sets out ways in which one partner will withhold property from the other, a contract that moves love and trust to shaky ground, one that separates and undermines the marriage before it starts?

Protecting Both Partners

It isn’t uncommon to believe that the wealthier partner is the one clamoring for a prenup. Sure, this may be the case. But a well-crafted, fair, prenup is designed to protect both partners. If you bring big dollars to the marriage and are used to living a certain lifestyle, you’ll want the agreement to specify how much you would owe to your spouse on divorce. And if you contribute to the marriage in non-financial ways, and are sacrificing a career to raise children or pursue other interests, then you want the agreement to spell out fair compensation for your contributions.

Bodhi Tree Revisited

Whether or not a prenup is right for you, well, that’s a personal decision. Should your marriage end in divorce, will a prenup minimize the anguish that typically goes hand out of hand in divorce proceedings? Possibly. Will it make for a more fair settlement of assets? Maybe. Overall, will it help or harm you and your spouse? That’s uncertain. Best I can say is that you should both be on the same page on this issue. If you disagree, with one partner wanting the prenup and the other opposing, and are unable to find compromise, then for the peace and continuing existence of your relationship, it’s not worth it.

So for all you lovebirds thrown off course by the prenup issue, go find a Bodhi tree (or an Elm, Fir, Arbutus, Maple, Redwood or any other tree) of your own to facilitate reflection. Tap into your inner Buddha, share your truth with your partner, and figure out what is best for both of you.

Enter the Buddha

Here’s what I’m thinking: continue with yesterday’s stream because there’s a whole lot more to say on this issue of money and happiness.

So, I left off posing the question, is happiness a pipe dream? I’m going to hedge here and say ‘maybe’. Really, it depends on you. It depends on whether or not you understand that money is a tool meant to serve you, not an object to which you become a servant. Continue reading “Enter the Buddha”