In addition to seeming like total fraudsters, lots of financial advisors must come off as boring putzes to most people who come in contact with them, like an effervescent nanny in a pin-striped suit firing off lists of do’s and don’ts to anyone who will listen.
What I try to encourage is a view of spending that lines up with what we know about the psychology of money, and what actually bring the most satisfaction. We’ll call it the High Value Splurge.
I’d like to consider myself a tightwad who understands value. Or, as the famous refrain goes: Price is what you pay. Value is what you get. I’m willing to spend on those things that will actually produce some long-term satisfaction, and unwilling to spend on things that won’t.
Millenials have earned a (perhaps well-deserved) reputation for being “entitled, lazy, and over-confident.” But their attitude toward money and things, paired with a penchant for simplicity, might produce better investors than ever before, if only they can develop the necessary patience.
Those 80 million Americans born between 1980 and 2000 have taken a different tact when it comes to spending their money. Assuming they can stick with a job long enough to earn something, their attitude is much more in line with what research has shown actually brings satisfaction:
Millennials are highly adept at using technology and social media influences many of their purchases. They prefer to spend on experiences rather than on stuff. Seventy-eight percent of millennials—compared to 59% of baby boomers—“would rather pay for an experience than material goods,” according to a survey from Harris Poll and Eventbrite cited on Bloomberg.Continue reading “Simplifying Complexity – applying the millennial mindset”
In 2005, I bought my first house. It was a total starter home north of Charlotte. New construction, 1,500 sq feet, it became the place that my wife and I lived for five or so years after we married.
Toward the end of the construction process, I realized I was really just taking money and turning it into a house. In 2011, we moved closer to town and ended up building a home in which we still live. I had the same feeling the second time around.
In mid-June, I connected with Tara Siegel Bernard, a journalist from the New York Times who was writing a piece about households with a female primary breadwinner. As an advisor with many such clients, and a member of such a household, I felt uniquely qualified to share my experience.
As a 13-year old, my 7th grade science teacher use to get (understandably) pretty upset with me. Mr. Morris was easily in his 60’s, with well-groomed grey hair, and polos that typically fit too tightly around his bulging biceps.
He also taught 7th grade PE, and would frequently find the need to recite this phrase to me, for one reason or another. He’d look me straight in the eye, as I sat in the back row of science class, or as I did something other than what was required of me on the field during PE: