Packing for the Right Financial Trip - 3 Basic Filtering Questions | Series 4.2

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Welcome to the enjoy more 30s family finance

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podcast. The only podcast dedicated to making life more

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enjoyable for young families by hitting on the financial topics

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that tend to weigh on us stress us out and distract our focus

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from simply enjoying life.

Joseph Okaly: 00:00:17

Hello, and welcome! We are here in the

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second episode of The Your Major Money Misnomer Series. Last

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week, we discussed cryptocurrency, we talked about

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its origins, reasonings for development, and how those

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haven't really exactly matched the quick wealth creation and

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speculation headlines that you're probably seeing today.

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Today's episode is titled Packing for the Right Financial

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Three Basic Filtering Questions, and what we're really

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going to get into today is whether it be, you know, Aunt

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Betty, or Grandma Jane or someone we don't even know on

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Twitter, we've come across a lot of random tidbits of advice,

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right? What's good, what's not so good, it can be really hard

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to tell. So today, we're going to cover what you need to know

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about how to interpret that financial advice or

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recommendations you're invariably going to come across,

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and what you can do in the form of three basic filtering

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questions to make sure they're relevant to you, and what you

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should actually be working into your own plan.

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Now, a passion of mine that has really come up over the years

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since I've owned a home is landscaping and gardening. And I

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don't really know when it kicked in exactly as I distinctly

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remember very much not liking it as a kid, you know, picking out

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weeds from the patio cracks, though probably as a kid was not

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exactly gardening. So I guess I have a little bit of a pass on

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that. But since owning my home, and you guys out there may have

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experienced this as well, it really feels great to make the

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outside of your house look nicer. And in that process, you

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kind of come across plants that you like others that you may not

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like so much. And one of my favorites that has kind of

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developed there are hydrangeas. It's not anything that's exotic,

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or really all that fancy, and I'm sure everybody out there has

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heard of them. But when they're in bloom, they're just these big

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flowers, so lush and beautiful. And you know, the problem

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though, when it comes to trying to make a beautiful hydrangea

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area of your garden, is that the deer, around me at least also

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love them. Now, they don't love them in the way that I love

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them. They love them in the way of eating them. Devouring all of

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the hydrangeas is a great pastime of all deer out there!

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So I tried some different locations, I tried some

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repellents, you know everything out there, you kind of name it.

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But at the end of the day, it's been pretty much the same result

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- every year, they get eaten down to pretty much nothing. And

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in my neck of the woods from my property, its just hydrangeas

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just really are not possible without completely gating them

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in or something to that effect.

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So what you need to know is that it can be very similar when it

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comes to financial advice or recommendations that you may be

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coming across out there. A lot of it could sound like it's a

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good idea, but it needs to fit into what you are actually

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trying to do. So my opinion on most financial products out

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there is that, by and large, there's not necessarily good

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products or bad products, just that products that are a good

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fit for one situation or maybe not such a great fit for another

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situation. If you listen to past episodes that I've done, so

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series 1.6 'Investments Should Be Boring', you know that I

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wouldn't recommend a market timing type of approach. But

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take something like an annuity. Most of these can have benefits,

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but they can also have trade offs for those benefits. So they

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again need to fit with a particular situation.

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One of the examples that we most often use just to kind of drive

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this point home, is when you think about a pickup truck

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versus a small car. One is not inherently better than the

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other, you need to really attach a task to that scenario first.

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If you're driving cross country, thie small car is probably

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better as it will likely get much much better gas mileage. If

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you need to pick up a load of mulch, well now the pickup truck

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is clearly the better choice. We don't want to be pouring mulch

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into the back of the Prius. So if someone says you should be

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using multiple banks, or that you should max out your 401k or

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that you should have a certain type of an annuity or that you

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should have a certain type of life insurance. You really need

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to consider if that car or pickup truck is a fit for your

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specific task or situation.

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So what you can do in sorting this out is asking three basic

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questions. What are my goals I'm trying to accomplish, am I able

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to implement it even if I wanted to, and who is providing the

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information? As always, for me, it starts with your goals,

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right? I'm always the high level "What is your mindset? What are

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you trying to accomplish?", let's make sure we're clear on

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that before we decide on anything that we may want to be

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using, what would actually make my life more enjoyable kind o f

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a thought process. Is retiring early a priority? If not, then

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maybe maxing out your 401k isn't the best approach. Sure, you

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want to put enough away to get to, you know, where you're going

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to, but if enjoying the present is more of a priority, maxing

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out your 401k may not actually be fitting with your goals. So

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again, this, to me, is always the first and most important

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filter. We just too often see people doing what they are you

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know, "supposed to do", not what would actually bring them closer

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to making life more enjoyable to them. So always remember that is

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the high arcing goal that we're trying to accomplish.

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The next question is implementation. Can you even

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implement this if you were wanting to? So a Roth IRA is

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great for sure in how it grows tax free, but you may be over

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the income limits. A term life insurance outside of work may be

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great to help in better controlling your own protection,

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but perhaps you have a health issue, and so Group Life

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Insurance through work is the better or maybe only option. Or

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in a different slant, something like calculating excess income

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every month and investing it may sound great, but actually taking

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the time every month to add it all up and make that

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contribution could prove too much of a hassle to really

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maintain long term. So make sure it's something that you can do

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and do so sustainably without too much effort.

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Lastly is in who was providing the information, as that can

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often give you some insight. If it's Great Uncle Al, well, he's

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probably not in your age or situation. So an annuity that is

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a fit for him could likely not be a fit for you. Aunt Marge may

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use three banks but maybe that's because she's over the FDIC

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insurance limits for each institution, and so for you,

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it's more of really just a hassle without adding any

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additional protection. If this is information you're getting

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from a bank or an article you find online, that company is

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likely providing you with that information for a reason. So

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make sure it's coming from a source you trust more than

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anything. Generally speaking, Nightly News, you know, the

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entertainment is not where you should be getting your financial

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information from.

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So a quick recap of today is that there is a ton in the way

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of financial advice and recommendations out there. It

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will not all fit your situation and the goals you've laid out.

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That doesn't necessarily mean it's bad advice, though, just

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that it may not be a fit for your situation and what would

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make life most enjoyable to you - what your goals are. Think of

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that small car versus the pickup truck example. What you need the

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vehicle for determines what's the best fit. Finally use the

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three basic filtering questions I provided to help and determine

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what may be most applicable to you. So one, would it get you

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closer to making your life more enjoyable? Would this actually

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add enjoyment to your life? Or is it something that just seems

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like it might be a good idea to do and may not necessarily help

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in this question. Two, is it implementable and sustainable,

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in an easy to follow way? There's a reason crash diets

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don't work long term. And the reason is because you may be

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able to do it for two weeks, three weeks, two months, but

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long term you can't, so make sure it's implementable in a

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sustainable, easy to follow way. Lastly, what is the sources of

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information? Does it meet where I am in my life? Do I trust who

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this is coming from?

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Thanks very much as always for tuning in today. Iif you are

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able to implement what we cover that is fantastic. You have less

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to worry about than before, you can just focus more on enjoying

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life. If you are wanting help with these things though, or

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have questions you need help and clarifying, check out the Ask

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Joe section on the show's website www.enjoymore30s.com,

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that's enjoymore30s.co. If you enjoyed this episode, please

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make sure to subscribe, follow review us on Apple podcasts or

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wherever you listen. There are literally millions of young

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families out there I'm trying to reach and help just like you.

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The next episode is tax refunds are bad, WHAT? Where we're going

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to cover why that check you may be getting at the end of the

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year could actually be to your detriment. Until next week.

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Thanks for joining me today and I look forward to connecting

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with you again soon.

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The conversations on this show are

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Joseph pinions and provided for general information purposes

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only. They do not constitute accounting legal tax or other

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professional advice for your specific situation. You should

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always seek appropriate advice from a financial advisor,

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accountant, lawyer or other professional before acting upon

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any content or information found here first, Joseph affiliated

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with New Horizons Wealth Management LLC, a branch office

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of TFS securities Inc and TFS advisory services an SEC

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registered investment advisor member FINRA s IPC