Nobody expects this from a financial planner, but, to me, it’s simply what financial planning should be…

A quick story

I was meeting with a good friend of mine from high school. We played baseball on rival high school teams but ended up playing on the same summer league teams. We became pretty good friends over time but eventually parted ways when we went off to college.

Fast forward 20 years, he reached out to me looking for a financial advisor. Of course, I said I’d be happy to talk and to see if I’d be the right advisor for him. It might seem odd that I didn’t say “I’d be a great fit for you!”. I honestly don’t approach my relationships this way.

My take is that good financial advice needs to come from the right person.

Anyways, we finally met to talk about what led him to this point and why he’s looking for a financial advisor now.

Like most people, he was reaching an inflection point. That’s usually when most people really start to think about talking to an expert. He was about to raise some money for a business he started 15 years ago, and, after many twists and turns and pivots, his hard work and dedication were starting to pay off.

Later in that initial meeting, I asked him a question that is typically part of my first conversations, “tell me about your goals.” Now, if you know me, this is also kind of a “gotcha” question because I know that most of the time we only get surface level goals when we ask the question in this way.

His response? “I’m thinking about retirement and saving for college for my two kids.”

So then I asked, “Is that it?”

He replied, “Yeah. I think that’s it.”

What did I say next?

“Baloney! That’s a pretty (freaking) boring list of goals!” (that’s the PG13 version by the way).

Now, time out. First of all, those goals are just fine. Most people have them, but I know there’s so much more that people really want (if we have the courage to ask them). Second, this is a dear friend of mine that I’ve known for 20+ years. I don’t say this to every new relationship as a financial advisor. But, in this case, it felt necessary.

I looked at him and said, “You’re about to sign a $50 million contract for your business, you’re finally making a couple hundred thousand dollars per year, you’re 40 years old with a young family…this is your inflection point in life! And that’s all you’re thinking about?! Tell me what you really want! What gets you excited every day?”

He looked at me in a slight state of shock. I’m pretty sure no one expects a financial advisor to say something like this to them.

What happened?

He rattled off a dozen or more other things in life that matter to him – traveling and seeing the world, making sure their parents are OK financially, buying a vacation home for the family, joining his local country club (which can cost $30k just to get in), and on and on.

Wow! What a breakthrough!

I looked at him and said, “Now we’re talking! This I can work with. Let’s get started making all of this possible.”

The problem with financial advice (at least historically)

We aren’t great at setting goals especially in a situation where money is involved.

Why? Because we only focus on money so we aren’t thinking about the rest of our lives.

Financial planning, done right, isn’t just about money. It’s about defining and creating the life you want to live (not just in retirement but today as well), defining the role you want money to play in it, and developing simple, actionable strategies that help you get there.

Money touches pretty much everything in our lives. Don’t believe me? Try this exercise:

Make a list of all of the things you did in the last week or month. Now, make note of how many of them touched money in some way.

• The home you live in.

• The car(s) you drive. Plus the gas and insurance and maintenance.

• Or maybe the Ubers or public transportation you take.

• The food you eat.

• The computer/laptop you use for work.

• The time you spend with friends.

• That great vacation you just took (or want to take).

It all touches money.

The point is that financial planning (again, done right) should look at all aspects of your life and help you make smarter, more informed decisions that align with your values and the life you want to live. It isn’t just about investing and retirement that can be decades off.

What comes after breakthroughs

Breakthroughs are magical. They change the complete dynamic of a relationship and how many people think about money.

Don’t get me wrong. Money matters. And, also, I’ve learned that it’s not just how much you have, it’s what you do with it that matters.

And, also, breakthroughs can also lead to “How the heck am I going to do all of this???” types of moments as well.

That’s OK and very, very normal. The truth is that the majority of people will always need to prioritize their goals and make trade-offs.

And, remember, you can do anything in time but not everything at the same time.

The reality is that even after breakthroughs we still have to do the work. We still have to look at your entire financial picture, review your cash flow, make sure you have an emergency fund and a plan for debt, create the right savings and investment strategies, understand and manage taxes, make sure it’s all protected with proper insurance and estate planning documents, etc.

There’s still a process we have to follow. We still need to put in the time to get the plan up and running, to create definable goals and mileposts so we can measure and manage progress, to evolve the strategies over time as life and the world around us change.

But breakthroughs make sure we are on the right path from day one.

How to create your own breakthroughs

For those that know me, you probably know what I am going to say 🙂

I am a firm believer that having a coach on your team is an essential element of success – personally, professionally, financially. The right financial advisor can be the best investment you can ever make, but the “right” one can be hard to find (I’ll address this in another post). But having someone with a different perspective, a different point of view, and the courage to call you on your “BS” can be life changing.

And, also, I’m not here to force this on anyone so if you want to do this on your own, that is of course 100% OK. But my personal experience tells me that coaches and mentors are essential and they can help you accelerate your path to success.

My advice for anyone that is thinking about what they should be doing with their money is to stop thinking about money … at least for a few minutes. Start thinking about the life you truly want. If you aren’t sure where to start, you’re like 99% of people when I first meet them (including myself).

Here’s what I use to get clarity around my life and what I want to achieve:

It doesn’t have to be this exactly, but the point is to think about all aspects of your life. It helps us get out of our heads and focus on what really matters.

So take a minute and put a number to each aspect of your life. I know it helped me get clarity around where I needed to spend my time, energy, and money.

Instead of asking “where should I invest my money”, maybe we should be asking, “what part of my life needs an investment?”

When you figure out what “a life well lived” means to you, that’s when you’ll start to see that financial planning is about so much more than just money.

And when your financial decisions are aligned with your values and the life you want, that’s when the real magic happens.

Cheers to health, wealth, and the good (financial) life,

Brent

Hi there! I’m Brent, and I’m a co-founder of Facet. In the spirit of full transparency, I’m sharing some information about myself, my work, and my company.

Facet is an SEC Registered Investment Advisor. That’s a technical term for a company that can provide financial and investment advice for a fee.

My content is meant to be informational, educational, and hopefully entertaining, but it’s not legal, tax, investment, or financial advice. And, remember, all investments have risks, and past performance is never a guarantee of future performance.

View additional information about Facet’s Privacy Policy.

When you become a parent, everything changes. You start thinking about creating a brighter future for your kids.

Am I doing the right things? Will she be OK? Will I be a good enough dad? How do I give her every opportunity out there?

For me, as a financial advisor, I started to reflect on what I want to teach her about money and, more importantly, how to use money in pursuit of a life well lived.

So, from a dad, to his daughter, here is where I am starting…

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I used to write these ridiculous slam poems for co-workers. In reality, they were just poems and the lines rhymed. They ended up becoming a pretty fun way to break the ice in Friday morning meetings.

They eventually faded into the background and were forgotten. They were always a source of inspiration and creativity for me, but I couldn’t find a good use for them anymore.

It’s also one of those moments where I wish I could sing, but that has never been and never will be reality. In fact, my tryout for the choir in middle school lasted literally 5 seconds.

Here’s how my first, and only, audition played out

Imagine opening the door to an auditorium (that was the basketball court at the time). At the far end of the court was a piano and the choir director.

I walked across the entire court and stood in front of the piano.

He started playing, I started singing.

And then he stopped, looked at me and said, “Thank you for coming. Truly. But this isn’t going to work.”

I’m not even sure I completed one line. It was obvious that I wasn’t destined to reach Taylor Swift status with my singing.

As I walked back across the full length of the basketball court, I could hear every step I took.

Tap. Tap. Tap. Tap. Tap…

That walk felt like 30 minutes even though it probably only took about 30 seconds.

Fast forward to today.

Writing (not singing) became my source of creativity and inspiration. And that writing turned into fun poems, and now I’m turning them into my own little way of sharing lessons about money and life for my daughter.

Because if I tried to sing them … well … you’d only listen to the first 5 seconds before running for the exit :-)

I call these letters/poems/slams (whatever!) “Money Lessons for Monty”. (btw, her name is Montana).

Who knows. Maybe one day I’ll make a book out of it.

And now, time for my first poem

Please know this is simply my way of expressing how I think and feel about money in a way that resonates with me. It’s my way of not taking the topic and myself too seriously.

I hope you find them, at the very last, enjoyable. And maybe, just maybe, you find a little nugget that you can use in your life or pass on to your kids.

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Cheers to health, wealth, and the good (financial) life,

Brent

Hi there! I’m Brent, and I’m a co-founder of Facet. In the spirit of full transparency, I’m sharing some information about myself, my work, and my company.

Facet is an SEC Registered Investment Advisor. That’s a technical term for a company that can provide financial and investment advice for a fee.

My content is meant to be informational, educational, and hopefully entertaining, but it’s not legal, tax, investment, or financial advice. And, remember, all investments have risks, and past performance is never a guarantee of future performance.

View additional information about Facet’s Privacy Policy.

I have been a financial planner for almost twenty years, and only one time in my career has a client ever made what I call “the big mistake.” And, having personally worked with several hundred people over that period of time, I’m pretty proud of that track record.

What’s the big mistake? In this context, it’s when they allow their emotions to take control and they sell their investments during a stock market downturn.

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Now, it’s time for a little story…

In early 2009, in the depths of the Great Recession, a client of mine called me every single day for about a month. Like clockwork, when the market opened (that’s 9:30 am ET), he would call me and tell me he wanted to sell everything in his investment accounts.

For weeks this went on. Every. Single. Day.

Honestly, it felt like groundhogs day. He’d call, we’d talk, he’d do nothing. Until the day he showed up at my office.

And I get it. Those were very scary days for all of us. Now, imagine being a financial planner and having to worry not just about your own money but the money for hundreds of people and, in some cases, their entire families (parents, kids, grandkids).

When you have been entrusted to be a steward for hundreds of families and their money (and now 20,000+ at my current company)...that’s a very real, and very big, burden to carry. It’s also one of the greatest honors of my life that people place that kind of trust in me And I don’t take it lightly.

One of the overlooked roles that good financial planners play is to be the person that stands between a client (I now call them members at Facet) and the big financial mistake. There’s more value in this than most people will ever know or give credit to.

And this situation would test my ability to do just that.

Here’s how the conversation played out (paraphrasing just a bit):

He said, “That’s it Brent…I’m out. Sell everything. I’ll get back in when things are better.”

I looked at him and replied, “You know how I feel about that decision. And, today, if that is your choice, I will honor it.”

He looked at me, and I could see the fear in his eyes, and said, “Yes. I can’t sleep at night. I need to do this.”

We ended up selling the investments in his non-retirement accounts (i.e. he agreed to stay invested in his 401k and IRAs because he couldn’t touch them for another 10+ years anyways).

Our professional relationship ended shortly thereafter (for a series of reasons), but I remember hearing that he took his money and bought silver and gold bars and had them stored in his basement. That’s a true story.

We have several mutual friends so I’ve heard, over the years, that he never did “get back in.” The truth is that there will always be something to worry about IF you are looking for it.

Never trivialize the emotions we feel

I share this story because I know there are people out there that feel this way when we hear bad news about the economy and/or when markets start to go in the opposite direction than the one we prefer (i.e. down).

This is very real for a lot of people. And, also, when we act on these emotions is when we make big financial mistakes.

The goal isn’t to not have emotions. The goal is to:

#1 - Understand that emotions are very real and very normal. We aren’t wrong or bad for having them; we’re human.

#2 - Be able to process the emotion, understand the source (the cause), and to find a way to get back to a state of “financial calm” (where we can balance logic with our emotions).

If we try to fight our emotions, we often just add fuel to the fire.

I’ve learned how to acknowledge, process, and work through my emotions in my 20 years as a planner. I’ve also learned how to quiet those emotions.

Here’s how.

I have a clear vision for the life that I want

A few years back, I went through an exercise of defining my ideal day. I’ll share that exercise in a future post.

It took some time to get it “right” but it has paid immense dividends.

The outcome of the exercise was to get my head out of thinking about money and to think about the life I want to live.

If I were to ask you, “what does living a fulfilling and enriching life look like” what would your answer be?

I know what my answer is, and, as a result, I am able to focus my time, energy, and money on making it a reality.

In short, I know the WHY behind my money.

And, honestly, if you can get here, you’ve done a good amount of the heavy lifting.

I know what I want to achieve, why I want to achieve it, and I know how to make my money work for me and the life I want.

If you don’t have a clear vision of what this looks like, don’t worry. It’s not an easy exercise, and I had a great friend and mentor of mine help me in the process. It takes time and it can feel a little scary and daunting at first. But when you get there, it can truly be life changing.

And then you can make decisions that are aligned with that life and the person you want to become. As a result, I have the clarity I need to follow my path and not to be distracted or worried about someone else’s.

I have a clear plan to make it possible (in time)

When I work with people, I generally ask three question:

1. What do you want?

2. Who do you need to become to make it possible?

3. How will you get it?

The step above (creating a clear vision for the life you want) will help you answer questions #1 and #2. This section is about #3, the HOW.

Since I have a clear vision for what I want to achieve, I am then able to create a clear strategy for all facets of my financial life.

And if I am being completely honest, I used to strive for perfection in my plan. Everything had to be completely right before I would make a decision.

What I’ve learned in my career is that simple, actionable strategies that lead to action are exponentially more valuable than waiting to find the perfect path forward.

My motto is → imperfect, incremental, implementable.

So here is what I have in place:

• A process to manage my cash flow (how much I make, the taxes I pay, how much I spend and how much I save and invest).

• An appropriate emergency fund based on my monthly expenses, the fact that I’m a dad with a little baby girl, the fact that I own a home, etc. etc.

• I have a strategy for my banking relationships and a high yield savings account for my emergency fund.

• I paid off my student loans just last year so all I have now is a mortgage.

• I even have what I call an “opportunity fund.” It’s extra cash on the sideline to help me sleep at night and so I can take advantage of opportunities if/when they pop up.

• I have the proper insurance to protect my family.

• I have an estate plan to protect my health and my family as well.

• I have an investment strategy for different “buckets” - one is for money I might use in the next 5 to 10 years and one is for the money I likely won’t need for 10+ years.

• I know how much I am adding to my accounts. I know the types of accounts I am using and how they are taxed. I know the fees I am paying in pretty much every investment. And I know the level of risk I am comfortable taking based upon when I will use the money.

• AND I have a “fun money” account where I let myself invest in crazy things like crypto. It’s a very small account but it’s my outlet for releasing FOMO and YOLO vibes.

The bottom line is that I know my WHY, I know my HOW, and I put it into action every month.

I check my cash flow monthly (because I’m a planner at heart) and I revisit my plan every 3 to 6 months or when a material life event occurs.

My plan isn’t static because my life isn’t static.

That doesn’t mean I am making changes every time I look at it, but I know it’s healthy to review my strategies and to make course corrections when needed.

Step 1 was getting clarity around what I want. Step 2 was creating confidence knowing I am doing the right things with my money for the life I want.

I’m an expert and have a team behind me

I have an advantage that most people don’t; I’m a CFP® Professional and a smattering of other designations (Chartered Financial Consultant®, Accredited Behavioral Finance Expert™, Certified Blockchain and Digital Asset™ advisor, Master Certified Life Coach™, and even a Crossfit Level-1 Trainer).

I have the expertise to understand my money and my emotions, to create a financial plan that works for me, and even the expertise to think about the life I want.

And even with all of this, I still have:

• A financial planner who is a CFP® Professional as well.

• A professional and life coach.

• A fitness coach.

• An accountant (who is a CPA).

• And an estate planning attorney.

Plus I have an investment team at my company (Facet) that manages my accounts based upon my life and my plan.

I have the dream team I need to bring my plan to life.

I cannot express how valuable every person on that team is to me and my overall plan, and I encourage everyone I meet to build the version of a dream team that is right for their situation.

I don’t have all the answers, but I know I have the right people around me that can help me find them and to put the right ones into action.

And that is something that I can’t quantify in terms of a cost or price, but I can tell you that it’s priceless.

Never having to worry can be your reality

I am not immune to stress or worry or a bit of FOMO from time to time. As someone battling an anxiety disorder, these things are all part of my daily life. But I have put in place a process and systems that I know work for me.

My WHY gives me clarity.

My HOW gives me confidence.

My PLAN helps me feel in control.

My TEAM helps me take action from a state of “financial calm” and not one of emotion and chaos.

Together, this makes all the difference. I don’t worry about the economy, the markets, interest rates, corporate earnings, what Apple/Google/Tesla/Nvidia are doing, or anything else.

I have an ever-evolving plan that allows me to focus on what I can control.

And I can never guarantee an outcome, but I am confident that the combination of clear goals, simple strategies, consistent action and time will lead to the results I want to achieve.

Imperfect, incremental, and implementable. And that works for me.

I hope this article helps you start your journey towards the path that will work for you.

Cheers to health, wealth, and the good (financial) life,

Brent

Hi there! I’m Brent, and I’m a co-founder of Facet. In the spirit of full transparency, I’m sharing some information about myself, my work, and my company.

Facet is an SEC Registered Investment Advisor. That’s a technical term for a company that can provide financial and investment advice for a fee.

My content is meant to be informational, educational, and hopefully entertaining, but it’s not legal, tax, investment, or financial advice. And, remember, all investments have risks, and past performance is never a guarantee of future performance.

View additional information about Facet’s Privacy Policy.

Here’s what I’ll cover (with links so you can jump ahead):

#1 - What the simple, yet costly mistake is.

#2 - Why so many people make the mistake.

#3 - What you can do to avoid making it yourself (with a framework on how to think about investing).

Investing for retirement is simple. In fact, it can be boiled down to a pretty simple equation:

[Money in + investment returns + time] - fees - taxes - behavioral mistakes = your retirement nest egg

But, as I always say, “it’s simple, but it ain’t easy.”

Research coming out of Vanguard recently found that people saving for retirement in their IRAs are making one simple but very costly mistake that is costing Americans more than $172 billion per year in retirement savings and wealth.

What’s the mistake?

Not investing their money.

That’s right, even after one year following a rollover from a company retirement plan, like a 401k, over 50% of IRA owners are still in cash.

Those numbers eventually go down, meaning more people invest, but very, very slowly.

Source: WSJ & Vanguard

No matter your age or time horizon until retirement, this is a scary reality for tens of thousands of people. And, if we extrapolate the data, this likely means millions of people are missing out on critical investment gains and, more importantly, savings that can make or break retirement.

In fact, by some reports there are almost 30 million left behind or lost 401ks holding almost $1.7 trillion. Imagine what’s happening in those accounts?

The scarier part is that younger generations overwhelmingly have more of their IRA money in cash. And when time in the market is critical to building meaningful wealth, they are at risk of losing out on decades of compounding growth in their accounts.

Why is this happening?

My take is that there are three main reasons why people aren’t investing their money:

#1 - Thinking IRAs are just like 401ks

It appears that the largest issue stems from people thinking their money will be automatically invested once it hits their IRA. The confusion comes from how their company retirement plans (e.g. a 401k) are managed.

Many retirement plans have default investments for people with accounts. This means that their money is automatically invested in a mutual fund (or similar investment) based on their age and expected retirement date.

So even if they forget to choose an investment option, they’re money is automatically invested for them.

When that money is moved to an IRA, there are no default investment options or automated investment plans in place. You (the account owner) is responsible for choosing how you invest your money. So if you do nothing, nothing happens and the money sits in cash or something equivalent to cash.

While this appears to be simple, it clearly isn’t that easy.

#2 - Overwhelmed by the number of investment options

Company retirement plans typically have a limited number of investment options. In my 20 year career as a financial advisor, I’d say I typically see between 15 and 20 investment options. There are certainly plans with more, but most offer a limited investment lineup.

While some people look at this and think it’s a disadvantage for retirement savers, the simple fact of keeping it simple is, in fact, a positive for many people. It’s both simple and easy.

When it comes to an IRA, you have thousands of choices. Picking one investment might feel easy. Picking a handful of investments and understanding what you own, how they work together, how diversified you are, the overall risk of the account, how this account integrates with everything else you have in other accounts … that can feel outright overwhelming.

If you give people too many choices, especially in places where they may lack expertise, they will choose to do nothing over taking action.

#3 - Simply forgetting the account even exists

There are a few principles I live by that relate to this story:

1. Simple is always better than complex.

2. Action always beats perfection.

Some account owners move the money to their IRA and simply forget that the account exists. This generally happens when they lack the experience or expertise to manage their own investments OR they have too many accounts and struggle to keep track of everything.

This is one reason I always recommend consolidation of accounts (in most cases). Simplifying your financial life will almost always lead to better outcomes. Some people will create complexity for the sake of complexity.

Trust me, simple beats complex and action trumps perfection (because we never really find perfection and never take action).

What should you do today?

If there’s one lesson in all of this that you can walk away with today it’s this:

Simple ideas, well executed > complex ideas never implemented

Now, more tactically, here’s what to do:

#1 - Take inventory of all of your investment accounts.

This is simple and easy. Make a list of every investment account that you have – 401k, IRA, Roth IRA, taxable account, education savings accounts, health savings account, and anything else.

Pull up the account online and/or pull up a recent statement and see how you are invested.

For the purposes of this exercise, as long as you aren’t in cash and you are invested you are OK (for now). I could go on about fees and taxes and your overall investment strategy, but that will have to wait for another article.

#2 - Keep investing simple.

Now, full disclosure, this is NOT investment advice. Why? Because I don’t know you and your situation. But here is a simple way to think about this. I am all about creating frameworks or mental models that we can apply for our financial lives.

And you’ll see that my framework is simple and easy because the most important thing is to take action.

If you are interested in learning more, my company and our Chief Investment Officer, Tom Graff, writes some really excellent educational content that you can find on our website. And, all of the content is completely free.

OK, back to my framework. I’m making up a percentage here, but I’d say 80% of the battle is just putting your money in something simple, low cost, and that invests broadly (i.e. that is diversified).

If I wasn’t a financial advisor and I didn’t have access to a team of experts at my own company, I’d put my money in a Vanguard Retirement Date fund. I picked the one that matches with my expected and “normal” retirement date for the visual below. That doesn’t make it right, but I’m sharing it as an example.

As you can see, it’s one investment that holds four individual Vanguard funds. It automatically divvies up the money and adjusts the percentages over time to gradually lower your risk until you reach retirement (i.e. it will adjust the stock to bond investments for you).

Essentially, you end up owning U.S. and international stocks and U.S. and international bonds. For full transparency, my larger investment accounts own something a little more sophisticated than this (plus they are invested through my company Facet), but my health savings account (HSA) is invested in these funds because it’s smaller and I want to keep it simple.

With this simple investment, you’ll own more than 10,000 companies around the world and have some of your money in bonds to balance the risk. And, also, think about how cool this is. You can become a business owner (without having to do the business owner stuff) overnight!

A closing thought to bring this home

This is an oversimplification of what you should be doing with your money. When I work with people in my capacity as a financial advisor, we never make a financial decision in a vacuum. The guidance I shared above is, to some extent, “vacuum advice.” So please know that all of this is shared to hopefully make this a little easier for you and to help you understand how to think through financial solutions.

Remember → Simple ideas, well executed > complex ideas never implemented.

The 80/20 rule works in many areas of personal finance. You can do 20% and get 80% of the results. However, the extra 80% of the work and 20% of the progress is where the real magic can happen.

There’s so much more you need to consider when it comes to creating and achieving financial success including how much you save, the account types you use, the investments you choose, the level of risk you take, the fees and taxes you pay (or don’t pay), and how you evolve your strategies as markets, the economy, and, more importantly, your life change.

And let’s not forget WHY you’re investing in the first place (i.e. what does money let you do?).

It’s never a bad idea to get expert advice. Yes, I am biased in my opinion since I am a financial advisor, but I truly believe it’s one of the best investments you can make (and not just a cost).

I have coaches or mentors for every aspect of my life – personal trainer (I’m also a Crossfit Level 1 Trainer), a life and career coach, and, yes, I even use a financial planner at my own company to help keep me on track. If you want to accelerate your path to success, working with a coach or expert advisor can be a great way to do it.

At the end of the day, the one thing I want is for you, and everyone else, to reach their full financial potential and to use that potential to lead a more fulfilling life.

How you do that … well, that’s your decision. No matter your choice, I wish you the best in your journey.

Cheers to health, wealth, and the good (financial) life,

Brent

Hi there! I’m Brent, and I’m a co-founder of Facet. In the spirit of full transparency, I’m sharing some information about myself, my work, and my company.

Facet is an SEC Registered Investment Advisor. That’s a technical term for a company that can provide financial and investment advice for a fee.

My content is meant to be informational, educational, and hopefully entertaining, but it’s not legal, tax, investment, or financial advice. And, remember, all investments have risks, and past performance is never a guarantee of future performance.

View additional information about Facet’s Privacy Policy.

TLDR (for those a little busier today): Whatever it is you want in life, start going after it today. Honestly, that’s it. Take action. Said another way, if you do nothing, you will get nothing.

Need a famous person to drive the point home?

“If you change nothing, nothing changes.” - Tony Robbins

Of course, there’s more to this story so keep reading if you are interested.

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What’s the #1 thing that people who have created and achieved success – personally, professionally, financially –  have that others don’t?

• Are they smarter or have higher IQs?

• Are they better looking?

• Are they more naturally talented?

• Maybe it’s where they’re from?

• Do they know the right people? Honestly, I could make this #1a.

• Or maybe they’re born with it?

• Maybe it’s Maybelline? (Does anyone else remember that commercial?)

The truth is that it’s none of these things.

Stick with me and I will tell you what it is.

Let’s back up a second. I want to share a little secret I learned from many coaches and mentors in my almost 20 year career as a financial advisor.

I always used to think that the proven way to build wealth is all about following the right process. Don’t get me wrong. A sound process matters, and it does play a role in achieving financial success.

But a secret started to emerge as I learned from these coaches and mentors and reflected on the stories they told, the advice they gave, and, of course, the beers we shared.

And, if I am being honest, it seemed so obvious when I figured it out, and, also, it’s something that so many of us overlook when we see people that are financially successful because it has nothing to do with money.

Here’s my take on this little secret

Money, or wealth, is the output. It’s the personal growth and the person you become that’s the input. There isn’t some miraculous moment where someone decides to pay you more for your work. Nor is there some miraculous moment where someone bestows wealth upon you.

You become the kind of person that is capable of creating success and you develop the philosophies, habits, and strategies along the way that when consistently applied lead to the creation of financial success.

And the best part?

Everyone is capable of becoming that type of person.

I’ll repeat that because it’s important.

Everyone (even you) is capable of becoming that person.

But how do we so often overlook this simple, yet powerful truth?

Because all too often we focus on the wrong thing. We focus on the money and wealth part of the equation (i.e. the output and not the input). It’s also not solely our fault. The media is very quick to talk about “the next big stock to make you rich” or “how to become a millionaire overnight” or even “the next billionaire tech founder.”

Very rarely, do they (the media and other people) tell the real story of the time, the discipline, the inner work that goes into creating their financial realities.

–

QUICK TIME OUT! Ok, reality check. There will always be people who do find a scheme that makes them rich very quickly, that happen to find the next big company whose stock shoots into the stratosphere, or that start the next tech unicorn. And, also, this isn’t the norm. These aren’t the things that work consistently and repeatedly over time to build meaningful and sustainable wealth.

–

But people who have achieved extraordinary levels of personal, professional, and financial success know that it’s not about the money, at least not at the start.

Don’t get me wrong. Money matters. It’s important to create it, keep it, and use it intentionally in our lives, but money, or wealth (which, to me, is the intentional use of money and not just the accumulation of it), is simply an indicator of success.

“Your income is the outcome.” - Me

The income you become capable of creating is the outcome of the work, the discipline, and the personal growth along the way. You become someone different and that new person is capable of creating outcomes that may seem unrealistic today.

And now back to the original question

What one thing do (financially) successful people have that others don’t?

A START DATE

Seems overly simplistic, right? But it’s true.

At some point in their lives, they created a clear vision for the life they wanted, the person they needed to become to make it possible, and…

THEY TOOK ACTION.

They aren’t better or smarter or more deserving.

THEY SIMPLY GOT STARTED.

And after hundreds, more likely thousands, of trials, failures, learnings, and achievements they eventually mastered the ability to consistently produce the results they desire most.

And the day you become capable of getting paid for results (i.e. for the value you deliver) is the day you break free from trading your time for money. Trading time for money always has a cap because your time is always limited. We only get so much of it. But the value we can create is limitless.

Everything you want is on the other side of action…

…and a few other things which I’ll share below.

I personally love this quote. The real goal is to grow to become bigger than the challenge, problem, opportunity, or goal. That’s when you become capable of so much more.

And the only way to become this person is to get started...

Let’s talk failure and persistence

…and then you need to keep going. You need to see failure not as a real failure but as a lesson to learn from. Because you will face failure.

Successful people fail … a lot. That doesn’t mean they risk everything over and over again. There is a very real art and science to not just building wealth but keeping it. That’s a story for another day.

Successful people know that the best way to learn is to try, fail, learn and repeat. Over time, you learn a new set of skills, habits, strategies, processes, philosophies, mindsets, etc that make you a better person.

And it’s that person that then is capable of achieving even greater financial success. You can make more money because you are providing more value to your team, company, or even your very own business and customers. 

This will be hard. You will doubt yourself. You will want to stop. Other people will criticize you or say you aren’t good enough. You will make up a thousand excuses why doing something else is better. And you need to fight those thoughts and feelings and keep moving forward.

Because when you reach the tipping point, your life can, and likely will, change.

But most people will stop before they reach the tipping point.

• They’ll post 30 videos on social media and give up.

• They’ll record 10 podcast episodes and give up.

• They’ll write 25 newsletters and give up.

• They’ll (insert action) (X number of times) and give up.

But success isn’t about immediate accomplishment.

“Successful people have fear, successful people have doubts, and successful people have worries. They just don’t let these feelings stop them.”

— T. Harv Eker

A quick story before I close

I recently started posting more regularly to social media. I didn’t come up with a grand plan. I just started creating videos and posting.

And one day, a good friend of mine decided he would give me some feedback. What did he share? Here’s how the conversation played out:

Friend (that loves to give constructive criticism): “Your social media videos suck.”

Me: “Good…because that’s just the beginning”

Consider that the abridged version for the purposes of this newsletter.

The point is that you too may suck (technical term) at what you try to do at first. Most people do. The trick is to keep going and to test, to fail, to learn, to grow.

That’s the secret.

A final word on achieving success

Now, there’s more to this story. There’s a lot that goes into achieving success or accelerating your path to success. Things like:

• Having a clear vision of what success looks like (or what you think it will look like).

• Setting goals that are specific and measurable.

• Establishing clear strategies for how you will execute your plan.

• Having the resilience to stick with things when you fail or don’t succeed (some call this grit)

• The mindset for continuous learning and growth through and from failure.

I will also add that a lot of these things will become more clear once you start. Don’t overthink the start.

But the point is that you can’t achieve success if you don’t start. If you get up every day and take action, take one step in the right direction, you will, over time, start to become a different kind of person.

Start small. Test, learn, fail, and start over. As you grow so too will your opportunities.

Let’s bring this home – a few questions and a challenge

So what do you want to achieve? And who do you need to become to achieve it?

And don’t just think about money. You 1000% can of course! But I always encourage people to look at their entire life and to think about where they want to grow.

• Want to achieve career success? Find someone that is in the role you want and ask them to meet with you.

• What to be a great parent? Find a good one and ask them to spend time with you.

• Want to get in better shape? I’d probably recommend talking to a personal trainer.

• Want to be financially successful? Find someone that has done it and recreate their process.

And, if you really want to accelerate the process, get a coach, find a mentor, or get professional advice. Most people shy away from these things because there might be a cost (especially to professional advice). But, in my opinion, it’s arguably the best investment you can make in getting it right today and avoiding the mistakes that so many people make along the way.

–

I’ve had a fair number of people ask me how to find a “good” financial advisor. Here’s a great resource that shares the right questions to ask and what to look for.

–

Here’s my challenge to you → What action will you take today to become that person?

Cheers to health, wealth, and the good (financial) life,

Brent

Hi there! I’m Brent, and I’m a co-founder of Facet. In the spirit of full transparency, I’m sharing some information about myself, my work, and my company.

Facet is an SEC Registered Investment Advisor. That’s a technical term for a company that provides financial and investment advice for a fee.

My content is meant to be informational, educational, and hopefully entertaining, but it’s not legal, tax, investment, or financial advice. And, remember, all investments have risks, and past performance is never a guarantee of future performance.

View additional information about Facet’s Privacy Policy.

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Have you ever made a decision and 3 days, 3 weeks, or 3 months later looked back and said to yourself…

“What the heck was I thinking!?”

You know what? That’s the wrong question. Let me try this again.

When was the last time you made a decision and then some time later looked back and said to yourself, “What the heck was I thinking!?”

If we are being honest with ourselves, we have all done this. Some of us many times over.

Don’t worry. I’m not here to tell you that you should feel ashamed for making a poor financial decision. I think we all tell ourselves that enough. We all carry some level of guilt, shame, embarrassment, or disappointment about the financial choices we make and/or the situation we find ourselves in.

I’m here to tell you that you are human and that you are normal. In fact, 250 million years of evolution have programmed us to operate this way. That’s a lot of evolution to overcome.

I’ll explain this more in a bit.

However, this is a valuable lesson you need to learn because those who don’t will continue to make very costly financial mistakes, and they may never know why they can’t achieve financial success or build meaningful wealth.

The good news is that I want you, and everyone else, to achieve financial success so I am going to teach you a lesson that very, very few financial advisors will ever know or tell you.

The amygdala hijack and the cause of (many) poor financial decisions

Now, reality check. I am not a psychologist or a neuroscientist, but I am a behavioral finance expert so I’m going to keep this high level.

When we experience strong emotions, we may not notice that our thinking brain or our executive functions change. There’s no automatic alert system in our brain that says, “Hey! Logic and reason are offline!”

As a result, many people continue to make decisions (and believe they are making rational choices) even when in a heightened emotional state.

However, what’s happening when we experience heightened emotions – both positive emotions like love and excitement and negative emotions like sadness and fear – is that we enter a fight, flight or freeze state of mind. And, in this state, the higher level thinking part of our brain can go offline.

The interesting thing is that we can still think we are thinking, but, in reality, our thinking brain can be severely impaired. As a result, we can make very poor and unhealthy financial decisions.

Quick aside, our brains react to stress in much the same way that it reacts to heightened emotional states. Stress can short circuit our higher level thinking brain and make our emotions the primary driver of our decisions.

Our emotions, and our emotional response to stress, is processed in our amygdala. When the amygdala gets activated, it hijacks how we think. The amygdala is also where we process and regulate our behavioral responses. So, if left unchecked, it will quite literally drive our behaviors (actions, decisions, and choices).

And this is what psychologists call the Amygdala Hijack.

Here’s a simple illustration to highlight what happens in our brains when affected by emotions and stress.

Source: https://www.sciencenews.org/article/coronavirus-covid19-stress-brain 

When we aren’t stressed or in a highly emotional state of mind, our higher level thinking brain is online and helps us make better decisions. When we are stressed or faced with a decision that elicits a strong emotion, our brain simply gets confused and starts to send mixed signals.

—-

Here’s another way to think about the power of the amygdala which resides in the limbic system. The limbic system started to develop around 250 million years ago. Comparatively, the “human-like” way of thinking (executive function, cognition, etc) developed only around 2 million years ago (that’s about 1% of the evolutionary timeline as the limbic system).

So imagine you are betting on two runners in a marathon. Runner A has been training for an entire year (365 days). Runner B pretty much woke up 3 days ago (roughly 1% of 365) and signed up for the race. Who do you think will win?

If it isn’t clear, Runner A is our limbic system and Runner B is the neocortex. There’s a very clear winner.

What emotional states mean for financial decision making

In a strange twist of fate, it turns out that emotions are necessary for good decision making. In fact, they can lead to higher levels of motivation and help us take action. So we can’t just ignore our emotions or try to make decisions without them.

But if emotions are both good and bad, what are we to do?

The key to balancing emotions and healthier financial decisions is two-fold; awareness and regulation. Awareness simply means allowing yourself to be present in any moment and to feel the emotion as it rises and as it fades away. The first step of being aware of the emotion is huge because you are then capable of knowing that this emotion can, and most likely will, hijack your thinking process. From there, the key is to allow yourself to come back into a more calm emotional state (regulation).

Now, keep in mind that we can still make good decisions even when our emotions are running high, but it is much harder to do so. My take, after seeing this for 20 years as a financial advisor, is to give yourself some time to let the intensity of the emotion subside.

I’ll repeat that → During periods of heightened emotions or stress, try to avoid making big financial decisions. Trust me. You will thank me for this.

Here’s a little visual for you that shows the rolling state of emotions over time. Don’t laugh at my lack of artistic abilities.

Now, this isn’t a scientific explanation but it is an accurate representation of when we tend to make healthy vs unhealthy financial decisions. The closer an emotion is to an extreme, both high and low (the red/”higher risk” zone), the closer we are to our logical, rational brain going offline or at least being severely impaired.

And, trust me, you will make a decision when in a heightened emotional state and you will think you are thinking and making a smart decision and then you will try like heck to justify it with logic and you will convince yourself you made the right decision (yes, that’s a run-on sentence and I used it on purpose).

And 3 to 6 months later, you will look at yourself in the mirror and say, “what the heck was I thinking when I made that decision?!?!?”

Welcome to the amygdala hijack.

Key point here → don’t beat yourself up or think you aren’t capable of managing your finances or making smart decisions. You are human, and we all get hijacked at some point. I’ve seen it for 20 years:

• People get married, have kids, get promoted, (enter a positive emotional event of your choice), and they make big financial decisions that they might one day regret. Generally, it involves spending too much money on something because we can justify the purchase. We will say things like, “I deserve it” , “we need this”, or “I’ve worked hard for this” to rationalize the decision.

• On the flip side, when we lose a friend or a loved one, have a health scare, get fired, (enter a negative emotional event of your choice), we have a tendency to make poor decisions. We find ourselves saying things like, “I can’t spend it when I’m gone” or “we only live once” or “might as well enjoy it while I have it.”

Now, back to my visual masterpiece. The goal is to make financial decisions in what I call the “financial calm zone” (the green zone). This is the zone where we can still feel the emotion but we are able to balance emotion with cognition (higher level thinking). This is where we tend to make smarter decisions.

So how do we get there?

What you can do - getting back to the “financial calm zone”

The process of regulating our emotions and making better decisions is simple…but it ain’t easy. This will take some work, but it will pay off.

This is something I learned in my class to become a master certified life coach. They call it going through an emotional audit. Also, credit to Dr. Relly Nadler for the framework.

When you are experiencing a strong emotional reaction (again, you can substitute a stressful situation), you can work through these five questions to bring yourself back in line with your “calm financial state” to make better decisions.

• What am I thinking? This will help you integrate your feelings and thoughts.

• What am I feeling? This falls under the “labeling affect” or the idea that you need to “name it to tame it.”

• What do I want now? This helps you reflect on your current desires and connect your thinking brain to the emotion.

• How am I getting in my way? This is primarily about learning from your mistakes and understanding how emotions can be big blockers to better decision making.

• What do I need to do differently now? This is about taking your next step forward and growing from the experience.

The goal isn’t perfection from day one. The goal is to consistently apply this framework of questions to reflect on what you are truly feeling and thinking.

Remember the quote from the beginning?

“You aren’t responsible for your first thought but you are responsible for your second thought and first action.” - Kristen Bell

Your first thought is often the one that has been hijacked by the amygdala which means it will often lead to unhealthy, and regrettable, choices. That first thought isn’t you and it isn’t your truth. However, acting or not acting on that first thought is your responsibility.

With practice, you can learn to process it and move onto a more intentional second thought. From there, you’ll find that your actions can take your money and your life to a whole new level.

Cheers to health, wealth, and the good (financial) life,

Brent

Hi there! I’m Brent, and I’m a co-founder of Facet. In the spirit of full transparency, I’m sharing some information about myself, my work, and my company.

Facet is an SEC Registered Investment Advisor. That’s a technical term for a company that provides financial and investment advice for a fee.

My content is meant to be informational, educational, and hopefully entertaining, but it’s not legal, tax, investment, or financial advice. And, remember, all investments have risks, and past performance is never a guarantee of future performance.

View additional information about Facet’s Privacy Policy.

• There’s a simple checklist that will take you 30 seconds to get through.

• Then, for each checklist item, I provide a more detailed explanation. Each one is about a 1 minute read.

• So, all told, this article might be a 10 minute read or you can pick and choose a few sections that are more relevant to you.

Think of this as a choose-your-own-journey kind of article. Happy parenting!

As a financial advisor for almost 20 years and a new dad myself, I can say with a lot of confidence that if you do these 10 things you will be way ahead of the game (and your peers).

Now, first things first → keep in mind that this is meant to be a checklist and a brief guide to help you make smarter and more informed decisions.

I will be sharing more detailed articles on each topic for those that want to take a deeper dive. As I add those articles, I will link them to each checklist item.

Second, congratulations! Whether you are already a parent celebrating the birth of another child, a new parent experiencing mother or fatherhood for the first time, or expecting to become a parent very soon, this is an incredibly beautiful and magical experience.

And, while it’s a special time, it’s also sometimes overwhelming, exhausting, and a bit stressful. Don’t worry, I have your back and I’m going to take you through this step-by-step.

Ready? Let’s get started!

// THE CHECKLIST //

Let’s start with the 5 “must-do” list (i.e. the more urgent items):

• Add your baby to your health insurance plan.

• Get life insurance OR review and update your existing life insurance.

• Get estate planning documents or review and update your existing documents.

• Review and update your monthly expenses.

• Revisit and adjust your emergency fund.

Now for the 3 “make sure you do it eventually” list:

• Start saving for your child’s education.

• Keep your own retirement savings a priority.

• Talk to your partner about money (and schedule regular check-ins aka “money date nights”).

And, finally, the 2 “maybe the best investments you’ll make” list:

• Create an ongoing financial plan for all aspects of your finances.

• Get professional guidance from a CFP® Professional

OK, now with the checklist out of the way, let’s get into some of the details on each topic.

// The checklist with a few additional pieces of information //

Back to the 5 “must-do” items on the list (i.e. the more urgent items):

#1 - Add your baby to your health insurance plan.

In the health insurance world, having a baby is often referred to as a “qualifying life event.” In English, that means you become eligible to make changes to your health insurance coverage when your baby is born even if you are outside of your regular open enrollment period.

Now, you usually only have 30 to 60 days to make this change so make sure you check with your employer or insurance company on your deadline and make sure you add your child to the policy. Your premiums might increase as you are adding someone to your plan. If you have questions, call someone. It’s a good investment of your time.

Also, you do have the option to change your plan, but keep in mind you need to think about how this will impact your premiums, annual deductibles, out of pocket maximum, etc. as they could reset if you change plans.

Pro tip: Focus on getting the right coverage and not just on the cost. People often just look at the cost of health insurance. Remember, the wrong coverage will almost always cost you more than the premiums you pay for better coverage.

#2 - Get life insurance OR review and update your existing life insurance.

Life insurance becomes an essential part of any ongoing financial plan the day you have other people that rely on you financially.

As a general rule of thumb, you should have 15x to 20x your income in life insurance. That’s not a formal recommendation as there’s more you need to consider (income, single or dual income household, current debt, education plans, home ownership, etc etc) but, generally speaking, your family will be OK with that amount of coverage.

Also, 99.99% of the time you simply need term life insurance. Don’t fall for the sales pitch of needing really expensive permanent insurance that acts like an investment or this “infinite banking” nonsense.

Pro tip: Buy term insurance. It’s less expensive and gives you the insurance you need.

#3 - Get estate planning documents (will, financial power of attorney, medical power of attorney, and maybe a trust) or review and update your existing documents.

All parents need three basic documents: a will, financial power of attorney, and a medical power of attorney (sometimes called an advanced directive since you are giving directives about your health in advance of an event occurring).

So, get these three documents ASAP.

In some states, you will need a fourth document that is called a living will. It’s the form that shares your wishes for life sustaining health care (i.e. life support). Yeah…not a fun one to talk about but it’s important. Some states include this in the medical POA while some require a separate form.

Last but not least is a trust. It’s not a “must have” document, but it’s something to strongly consider.

Pro tip: Talk to an estate planning attorney on this one! Cheap options like LegalZoom exist. If you’re in a pinch, these options can work. In general, getting the documents right the first time (i.e. talking to an attorney) is your best bet.

#4 - Review and update your monthly expenses.

Kids are … expensive. Recent studies show that the cost to raise a kid through the age of 18 (not including college) has now surpassed $300,000.

Gulp…

If we do some simple math, this means that you can count on roughly $1,400 of additional monthly expenses. Now, it doesn’t always come monthly so there will be ebbs and flows. However, you need to start planning for added monthly expenses.

Start with looking at your take-home pay, how the new expenses will impact your spending, and then make adjustments if/where necessary.

Pro tip: Don’t worry about what you call this (budgeting, cash flow planning, intentional spending) or how you do it just yet (50/30/20 rule, etc). Start with listing all of your regular monthly expenses. Then categorize them. And then assess what’s working and what’s not.

#5 - Revisit and adjust your emergency fund.

The rule of thumb for an emergency fund is to have 3 to 6 months of expenses saved in a checking or high yield savings account (I prefer high yield savings accounts since they pay a lot more interest).

Also, I don’t love rules of thumb because they don’t take your personal situation into consideration, but it’s an OK place to start.

Things that impact the right amount include risk of job loss, single or dual income household, owning a home, number of kids, etc. The more of these you check the box on, the higher the savings.

Pro tip: Determine the amount you want to have in savings and then make a plan to get there gradually. We often feel overwhelmed by big goals. So focus on adding one more month of savings at a time (assuming you haven’t already hit your number).

Moving on to the 3 “make sure you do it eventually” list:

#6 - Start saving for your child’s education.

Remember that $300,000 to raise a kid to age 18? Well, add to that the cost of an education.

For newborns, it could cost over $150,000 for an in-state 4 years school and over $250,000 for an out of state public school by the time the kiddo heads off to college.

Don’t worry, we aren’t funding that today, but we will be funding that over time. The best strategy is to set up an education savings account (also known as a 529 plan) and to start saving monthly. Even small amounts add up over time so start with what fits your ongoing plan (even $50/month is a great start).

There’s a lot more to consider here like how to pick a plan, tax savings, how to invest, etc so make sure you check out my longer article on this (I’ll link it once I write/post it).

Here’s a great resource for you as well: savingforcollege.com.

Pro tip: There’s a lot of uncertainty around the future of college, student loans, and many other things. Don’t let this keep you from getting started. My approach is always to start small and adjust over time as I gain more clarity.

#7 - Keep your own retirement savings a priority.

Ideally, having a kid won’t change any of your saving and investment plans for retirement. The most important thing you can do is to stay the course and continue saving and investing the way you are today.

I am also a realist and know that big changes like having a kid can disrupt the best made plans so adjustments might be necessary. Remember, investing in your future and your retirement isn’t a selfish act. Making sure mom and dad are financially secure is one of the most selfless things you can do for your kids.

Pro tip: If you do make changes, start with smaller changes - 1% up or 1% down - and see how things feel. Ideally, you are going 1% up. Next, try increasing that by another 1% every 6 to 12 months.

By the way, you may have noticed a few “pro tips” talk about small changes. That’s because small changes work and don’t create major shocks to your overall plan. Think incremental, imperfect, yet implementable.

#8 - Talk to your partner about money (and schedule regular check-ins aka “money date nights”).

In my 20 years as a financial planner, this is the most overlooked item on this list. That’s not because we are bad people, it’s just we fall into “getting things done” mode (i.e. being parents, going back to work, dealing with life, etc.).

However, I can also share having helped thousands of people personally and through my company that this might be the most important one for partners.

Making sure you are aligned on what you want for your family, each other, your careers, for college, you name it…is important to remaining on the same team and staying calm when things don’t go as planned.

Pro tip: This can be challenging so knowing how to navigate these conversations without creating emotional triggers is important. Here’s a little “class” I recorded with my own partner that takes you through a framework we created (F.A.C.E.T.S.).

Bringing us home with the 2 “best investments you’ll make” part of the list:

#9 - Create an ongoing financial plan for all aspects of your finances.

We’ve already looked at a few important topics that new parents need to explore, but there are many more areas of our financial lives that we need to address including but not limited your investment strategy, account types (401k vs IRA vs Roth vs…), tax strategies, workplace benefits, managing stock options, managing credit and debt, liability protection, and the list goes on.

The point is that financial planning isn’t just about investments and retirement. It’s about creating clear strategies for every life decision that is impacted by money.

I don’t have stats on this, but I am pretty darn confident that the vast majority of successful people have an ever-evolving plan. Most people don’t stumble into success. Start planning. Today.

Pro tip: I always say that there is no such thing as a financial plan but there is such a thing as financial planning (i.e. an ongoing, evolving strategy). Once you have a strategy in place, make sure you are reviewing it and updating it periodically as life, tax law, legislation, markets, the economy, and the world around you change.

#10 - Get professional guidance from a CFP® Professional.

OK, OK, yes I am biased in my opinion since I am a financial planner. And, also, I know that world class performers have world class coaches and I want you to be a world class mom or dad or to build a world class career or to be world class at whatever you want…

As a new parent, there’s a lot to think about and a lot more to do and a lot of questions come to mind:

• Am I doing the right things with my money?

• Am I making any mistakes or what mistakes do I need to avoid?

• Am I missing out on any opportunities?

• How do I prioritize the seemingly endless and conflicting goals?

• What trade-offs make the most sense financially or for the life I want?

A good financial planner can help you answer these questions so you can make decisions with confidence, save time so you can spend it where you want to, reduce the worry and stress around money, and put you in control of your financial decisions and the life you want for your family.

Pro tip: At the very least, look into expert financial advice. In my opinion, it can be the best investment you can make. You can check out my company, Facet, or you can look for a CFP® Professional here.

Also, here’s a little article on what to ask a financial planner before choosing one.

If you take action on all ten of these items, you are well on your way to achieving financial security and success.

Cheers to health, wealth, and the good (financial) life,

Brent

Hi there! I’m Brent, and I’m a co-founder of Facet. In the spirit of full transparency, I’m sharing some information about myself, my work, and my company.

Facet is an SEC Registered Investment Advisor. That’s a technical term for a company that provides financial and investment advice for a fee.

My content is meant to be informational, educational, and hopefully entertaining, but it’s not legal, tax, investment, or financial advice. And, remember, all investments have risks, and past performance is never a guarantee of future performance.

View additional information about Facet’s Privacy Policy.

Table of Contents:

• Lesson #1 - Whether you [feel] you can or you can’t, you’re right

• Lesson #2 - Define the game you want to play

• Lesson #3 - You have the power to define the meaning of money in your life

• Lesson #4 - You set the price of your financial freedom

• Lesson #5 - Miracles and money have a lot in common

I am going to share with you what I would tell my younger self about money.

But, before I share mine, I think it would be a worthwhile investment of your time to think about the lessons you would share with your younger self.

So…

• If you could tell your younger self one thing about money, what would you say?

• And if you could teach your younger self a lesson about life, what would it be?

I’m sure you’re thinking, ‘Brent! I can’t think of just one!’

Given that I am sharing five lessons, it’s only fair that you can come up with as many life or financial lessons as you’d like.

But I encourage you to take a minute to think about the lessons you have learned, and, maybe more importantly, to make sure you are still applying those lessons to your life choices today.

If there is one thing I’ve learned in my twenty years as a financial planner it’s this,

“It’s not your money that fails you; it’s your choices.”

So let’s dive into the five lessons that I want to share with you. As a financial planner for almost twenty years, I’ve learned quite a bit not just from my personal experiences but also from having worked with thousands of people of all ages and across all stages of life from starting their professional career to retirement to the passing of a loved one.

Lesson #1 - Whether you [feel] you can or you can’t, you’re right

Credit to Henry Ford for this one, kind of. He actually said,

“Whether you think you can or you can’t, you’re right.”

I am not discounting the power of positive thought, but how we think is just the tip of the iceberg when it comes to what really drives our decisions and our actions. In fact, 90% or more of our decisions are driven by our subconscious mind that is controlled by how we feel. And how we feel about our money is based on our emotional relationship with it.

Money is one of the most emotional elements that touches our lives and it is a top cause of stress for many people around the world. Studies have shown that stress and strong emotions can override our neocortex (our higher level thinking brain) and hijack how we make financial decisions. Our feelings quite literally determine how we think, and most of us aren’t aware of the subconscious emotions that are driving our decisions and determining the quality of our lives.

We all have emotional triggers attached to money. They could be fear, shame, disappointment, regret, unworthiness or even placing our self-worth on our net worth. These feelings can lead to a negative emotional relationship with money which can lead to negative self-talk which can lead to a story that we aren’t capable of making progress with our finances.

When we feel we can’t, it becomes a self-fulfilling prophecy.

When we feel capable and we think clearly, we can improve our financial decisions. When we improve the quality of our financial decisions, we can improve the quality of our lives. This all becomes possible when we are consciously aware of how we feel and we work to create a positive emotional relationship with money.

When we feel calm and have clarity and confidence in our decisions, we put ourselves in control of the lives we want to live.

If you want to master the role that money plays in your life, start with mastering your mindset. 

Remember, whether you feel you can or you can’t, you’re right.

Lesson #2 - Define the game you want to play

“If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.”

― Warren Buffett

What do I mean by the game? Your game is the life that you want to live. It’s who you want to become, what you want to achieve, what you want to contribute, and what you want to experience. Your game is different from mine, as it should be. Many people never define their game, and, as a result, they end up playing someone else’s and they never seem to understand why they can’t get ahead. If you play someone else's game, you rarely, if ever, win. Why? Because you’re the patsy.

Define the game you want to play and then get to work creating your edge.

For me, I decided my professional edge was going to be in financial planning. I dedicated the first 10 years of my career to being world class at my craft. After 10 years, I had an edge, and that edge allowed me to join a small team that founded Facet in 2016 (which was ranked #46 on the Inc. 5000 Fastest-Growing Companies in America list in 2022). That edge may one day help me build the kind of wealth that can create financial freedom for my family. My game is financial planning. My edge is my education, experience and expertise.

As a financial adviser, I talk to a lot of people about their money. The most successful people I know aren’t crypto millionaires, they weren’t following Reddit and messing around with GameStop or AMC stock, they aren’t day traders or “experts” in trading options or currencies because they took a two-hour class online. They are masters of their game and their craft. They have an edge that they built over years (not days like social media platforms seem to suggest).

Developing your edge is a lot like compound interest. The return feels small at first  but, with consistency and focus, your personal growth starts to explode in the years ahead.

Stop playing someone else’s game. Define the game that you want to play (the life you want, the values that will drive your decisions, what brings you true fulfillment) and start creating your edge to make it possible. If you don't, you will play someone else’s game and by someone else’s rules.

Lesson #3 - You have the power to define the meaning of money in your life

Society, over thousands of years, has placed a cultural significance on money. To the external world, money conveys status, fame, power, intelligence, success, and other things on people that have it. If you aren’t careful, society, the external world around you, will define the meaning that money has in your life.

But here’s a little secret. There’s a second and less discussed meaning of money and it’s very personal and entirely internal. It’s part psychology (how you think and feel about it), part utility (how you use it), and part subjectivity (personal choice). When money, and how you use it, is aligned with your values, the person you want to be, and the life you want to live, it gains real meaning in your life.

For the happiest, most fulfilled people that I know, money isn’t about fame or power or status. 

Money is freedom.

It’s freedom from financial worry and stress. It’s the freedom to choose how, where, and with whom you spend your time. It’s the freedom to define the person you want to be and the life you want to live. Money, and more importantly your plan for it, is the freedom to control and shape your future with confidence.

The right plan for your money is all about giving you the freedom to live life on your own terms. Money isn’t everything, but, used well, it can give you the freedom to do almost anything.

However, there’s a big catch. Freedom, as it turns out, isn’t free.

Lesson #4 - You set the price of your financial freedom

I define financial freedom as having enough passive income, and the wealth to generate that passive income, so that it can cover the lifestyle expenses for the life that I want to live. It’s when work (trading time for money) becomes optional. And that freedom has a price.

Think about it this way. If you need $40,000 per year of income to maintain your lifestyle, you need roughly $1,000,000 to achieve financial freedom. At $80,000 of income you need $2,000,000 and at $120,000 you need $3,000,000. Your number is the price you are placing on your financial freedom. As your lifestyle expenses increase, so does the price.

Most people struggle to achieve financial freedom because they can’t keep the price from increasing. They continue to increase their lifestyle expenses which increases how much wealth they need to create the passive income they need to cover their expenses.

George Foreman summed it up nicely,

“It’s not at what age you want to retire. It’s at what income.”

This doesn’t mean you shouldn’t buy a nice house, a nice car or even that lake house. It simply means to be aware of the impact these decisions will have on your freedom, how you spend your time, and the quality of your life. You set the price of your financial freedom, and every decision you make is either making your freedom more or less affordable.

Lesson #5 - Miracles and money have a lot in common

At some point in my relationship with my clients, I ask them one question, “What is a miracle?” The most common answer is that a miracle is something that we can’t explain or didn’t think was possible.

I prefer to use Charles Eisenstein’s definition that,

“A miracle is something that is impossible from one’s current understanding of reality and truth, but that becomes possible from a new understanding.”

Many of us, myself included, enter our adult lives with limiting beliefs or a limiting mindset that stems from lessons we learned as children. In fact, many of the subconscious thought patterns that govern our financial decisions are formed by the age of seven.

These subconscious beliefs, values, and attitudes determine our individual money stories – what we believe to be true and what is possible with it. In essence, your story determines what you think is a miracle (and impossible for you to influence) and what you think is possible (and within your sphere of influence).

If we are open to exploring our money stories and taking action to change them, we can create a new narrative around what is possible. And I can honestly say that once you figure this part out you will unlock the unlimited potential of money to be a powerful tool to help you define, shape, and express the person you want to become and the life you want to live.

Your decisions are the only way you can influence your life, and the quality of those (financial) decisions will determine the quality of your life.

As Ralph Waldo Emerson so eloquently put it,

“The only person you are destined to become is the person you decide to be.”

Your next decision can change your life. What will it be?

Cheers to health, wealth, and the good (financial) life,

Brent

Hi there! I’m all about full transparency so I’m adding some information about myself, my work, and my company (plus the SEC requires it - which I think is a good idea):

This newsletter, blog, and podcast is brought to you by me (Brent)! I am a co-founder of Facet, which is an SEC Registered Investment Advisor. That’s a technical term for a company that provides financial and investment advice for a fee. However, all of my content (what you’ll find on this site) is free.

My content is meant to be informational, educational, and hopefully entertaining, but it’s not legal, tax, investment, or financial advice. And, remember, all investments have risks, and past performance is never a guarantee of future performance.

And, also, my content and commentary does not necessarily represent the views ofFacet.

By now, you should know that I like to open my posts with questions to get the juices flowing. And today, to no surprise, is about investing:

• How would you define investing?

• Or maybe what’s the point of investing? Is it to get the highest return? To achieve your desired outcome or goal?

• If we define it by the return we achieve, what makes for a good return?

• Is a 10% return a good return? More importantly, how do you know?

How you think about and how you answer these questions will very likely determine how you make investment decisions. And, to be direct for a minute, if you don’t have clearly defined answers, I would highly recommend you make the time to find them.

Now, let’s talk about Buffett, bitcoin, and investing.

In the world of finance, few names resonate with the impact of Warren Buffett (the Oracle of Omaha). Known for his sage-like investment wisdom, Buffett's views often serve as a barometer for what good investment decisions should look like.

Quick fun fact: How much of Warren Buffett’s wealth was created after the age of 65?

The answer: 99%.

“His skill is investing, but his secret is time,” Morgan Housel

In 2018, Buffett’s labeling of bitcoin as "rat poison squared" stirred significant debate, but beyond the surface of this statement lies a deeper lesson about perspectives in investment and life choices.

Let's unravel this narrative, keeping in mind that the essence of any investment lies not just in its inherent, or perceived, value, but in the lens through which we view it.

*I recently added my perspective on bitcoin and how I think about my personal investments at the end of this article (should you care to read about it)*

Decoding Buffett’s investment playbook

Every year, Buffett writes about his perspectives on investing in the Berkshire Hathaway letter to shareholders. He shares thoughts from the last year and life lessons he has learned over time. If you have not read it (or them), do yourself a favor and check them out. You can find his letters here.

I started reading them religiously a few years back and I quickly learned that while his stories and lessons may change, his approach to investing does not. Buffett has a very clear investment strategy (sometimes called an investment thesis).

At the heart of Buffett's investment philosophy is a preference for companies with three things:

1. Good business models,

2. Good management, and 

3. Good cash flow

Easy right? Now you’re ready to be a legendary investor. You can thank me later.

The problem? It’s not that easy.

His approach is less about fleeting trends and more about sustainability and long-term value. Buffett famously opts for investments he would be comfortable holding for ten years rather than  ten days (which feels even more contrarian in today’s world and the rise of social media). This strategy underscores a commitment to fundamentally sound businesses, a principle that steers clear of speculative ventures.

Quick point: When you hear about people buying and selling to try and capture market trends, remember that these people are traders and speculators (in my opinion). They are not investors like you and me. Investors trying to build long-term wealth are more like Warren Buffett - they think and act more like business owners (i.e. they think about creating long-term value).

Enter rat poison … excuse me, bitcoin

When we apply Buffett's framework to bitcoin, the lack of alignment is quite obvious. Let’s compare his investment thesis to bitcoin:

• Good business models - Bitcoin (and its currency bitcoin) doesn’t have a traditional business model. In fact, the entire thesis around the creation, and value, of bitcoin is unproven.

• Good management - Due to its decentralized nature, it is not governed by a management team that can pivot strategies or influence growth.

• Good cash flow - bitcoin doesn't generate revenue or cash flow. It exists as a digital asset whose value is driven largely by market sentiments and speculative interest (at least for now). In short, bitcoin doesn’t pay a dividend.

Through Buffett's investment lens, bitcoin understandably resembles "rat poison," lacking the fundamental qualities he values not only in a single investment but in his overall investment philosophy.

This isn’t about dismissing bitcoin, cryptocurrency, or even blockchain as innovative ideas or concepts that may change the way we develop networks, build businesses, or even pay for goods and services. But it is very much about understanding how successful people think about investing and building wealth, and, maybe more importantly, how they determine what NOT to do with their money.

Full disclosure, I am a big believer in what all of this (crypto and blockchain) can potentially do for society, and I am also thoroughly convinced that no one truly knows what this will ultimately become in the years and decades ahead. So when someone tells you, with absolute clarity, what bitcoin and crypto will become, please remember that no one really knows.

The right answer depends on the question being asked

Buffett's perspective, while valid from his vantage point, is not a universal truth, but it does underscore a critical lesson: the validity of an answer is often tied to the quality of the question asked. Buffett views bitcoin as unsuitable within his investment framework, which is heavily anchored in traditional business metrics.

Based upon his question – ‘what business should I invest in?’ – his answer is right  - ‘bitcoin is not a business and therefore not a good investment’.

However, for others, the question might not be about business models or cash flows but about potential for innovation, market disruption, or even personal beliefs in decentralization and digital currencies. And, for others, bitcoin is gold in digital form and has inflation fighting properties (amongst many others). And, for some, it holds the possibility of a get rich quick scheme.

It’s important to emphasize that none of these ideas are proven. They are all theories at this stage in the game so there is very real risk in betting on these things to be true. So be careful who you listen to and the level of conviction you form based upon their beliefs.

Before you make an investment decision, you should have clarity around the questions that will guide your choices, and those questions should be tied to why you are investing in the first place.

Where are you hoping your money, and your investments, will take you?

As the saying goes, if you don’t know where you’re going, any road will take you there.

Reframing your investment narrative

Buffett’s stance on bitcoin doesn’t mean it’s the one that you have to believe in and follow, but it does teach us one of the most valuable lessons we can all learn about investing. Simply because you can invest in something doesn’t mean you should. Having a clear framework or investment strategy that supports your financial plan, goals, and comfort with risk should always be your starting point.

As I have been telling my clients and members for nearly two decades, ‘don’t chase returns, follow your plan.’

This is hard advice to follow sometimes, especially as Nvidia is ripping right now. (“ripping” is a technical term for posting pretty crazy returns).

So if we revisit those questions from the beginning:

• How would you define investing?

• Or maybe what’s the point of investing? Is it to get the highest return? To achieve your desired outcome or goal?

In general, investing is defined as allocating resources (e.g. money) to various assets (e.g. stocks/businesses, real estate) with the expectation of achieving a gain/profit, an income stream, or both. In short, we want our money to make money so we have more of it in the future.

To me, this is only a partial definition. The purpose of investing is to put money away intentionally today to make the life I want tomorrow possible. The process is what I shared above. And the payoff is building wealth (an amount of money or an income stream) that allows me to achieve financial freedom.

Now for the second set of questions:

• If we define it by the return we achieve, what makes for a good return?

• Is a 10% return a good return? More importantly, how do you know?

A good return needs to be measured against the level of risk you are taking. A higher risk investment should provide a higher return and a lower risk investment should provide a lower return. A “good’ return can only be determined when measured against the level of risk you took to achieve it. The best investors can measure and manage their risk and can quickly determine if their strategy is appropriately rewarding them or not.

A little bonus content…because I believe in full transparency and you should know what I do with my money (it’s rare that people will share this and I think that needs to change).

My Strategy: A thesis, limits of risk, and conviction

I own 1 bitcoin. I bought it for around $20,000. Keep in mind that I am a Certified Digital Asset and Blockchain™ advisor and that I have spent hours, if not days, with investment managers and tech experts and hundreds of hours of self study on all things crypto. However, despite all of this time spent in this space, I can’t find true clarity around what this “thing we call crypto” is really all about and, more importantly, how it will drive value for me as an investor.

So here is how I approach this:

An investment thesis: Key point, this is how I invest not just my money but my time. My perspective on investing is that it’s much bigger than most people think.

My principles:

1. Invest in myself first, always. I am my greatest asset and that will give me the greatest return on life (way more important than just my investments).

2. Invest in my relationships - family, friends, co-workers, people in my community, etc. Relationships matter, trust me. Don’t believe me? Check out the Grant study.

3. Invest in my own businesses and ventures - I have owned two businesses and started one (my current company Facet). Building a business and working with amazing people has been one of the most rewarding experiences of my life.

4. Invest in the global economy with the goal of owning everything in a low cost, tax efficient, and diversified manner - This is what you might hear called index investing.

5. Invest in some “fun stuff” to remain mostly rational - Yes, I allow myself to invest in what I call non-core opportunities (bitcoin being one). Remember, the goal of investing isn’t to be perfect. It’s to be mostly rational, most of the time.

*Note: I don’t subscribe to the typical definition of “passive investing” as it creates the wrong narrative. Yes, the investments I use in my accounts and overall portfolio are exchange-traded funds (ETFs) that are passive in nature. However, my overall strategy is proactive, ongoing, and always evolving. That doesn’t mean I am changing my investments, but I am always revisiting my strategy from my cash flow to my emergency fund and high yield savings to the accounts that I invest in (401k, Roth IRA, HSA, taxable account, etc) to how much I invest to how I manage my taxes and so on.

Those principles define my overall investment thesis and how I make investment decisions. My core investments aren’t sexy, but they work for my strategy (i.e. they are more Vanguard and less crypto or Gamestop). If I decide to pursue a non-core investment, I always set a limit of investing (say 1% to 5% of my overall investments), determine my level of conviction, decide how much I am willing to risk, and then I take action.

That’s how I decided to own 1 bitcoin, and it’s a very small percentage of my portfolio. I love what crypto stands for, but I have never heard the same answer about what it is, what it will become, or how to value it across my network. And, because I am still a believer in the power of businesses, I only put a very small portion of my overall portfolio in bitcoin.

Also, I am entering a new chapter as a father, and I can’t justify buying more bitcoin when I think about other priorities like saving for my daughter’s education.

And if you don’t know the difference between Bitcoin and bitcoin, please…don’t invest in crypto.

And now for Thinking Time:

Speaking of better questions: I was once considering an investment of $100,000 in a new business in my home town. The question I asked was “Is this a business and an idea that I want to support?” My answer was a clear “yes.” A good friend of mine reframed the question and asked,

“Would you rather put this $100k towards this business or put that money towards a college education for your daughter?”

Talk about different questions that can completely change your perspective.

When we get clear on our questions and our values, the right answer will come. But always remember the quality of the question (what’s the point of investing?) will determine the quality of your answer (how you actually invest).

Cheers to health, wealth, and the good (financial) life,

Brent

Hi there! I’m Brent, and I’m a co-founder of Facet. In the spirit of full transparency, I’m sharing some information about myself, my work, and my company.

Facet is an SEC Registered Investment Advisor. That’s a technical term for a company that provides financial and investment advice for a fee.

My content is meant to be informational, educational, and hopefully entertaining, but it’s not legal, tax, investment, or financial advice. And, remember, all investments have risks, and past performance is never a guarantee of future performance.

View additional information about Facet’s Privacy Policy.

What you’ll learn in this article (with links to each section):

1. The 5 paths to becoming a millionaire.

2. What millionaires have in common (it’s more than money).

3. The biggest mistakes people make.

4. Thinking time: Questions to explore your path to financial success.

Let’s get the thinking juices flowing:

• What are the keys to creating financial success?

• What about becoming a millionaire?

• How about achieving financial freedom?

• Now, what are the keys to living the life you truly want?

If you took a minute to actually think about (or write down) your answers, how many of them did, or would, overlap?

My guess is that when it comes to the financially oriented questions, many of them would be the same – spend less than you make, save and invest regularly, set goals, create a plan to achieve them, avoid unhealthy debt, invest in your personal growth, start a business or side hustle, etc.

I would also wager that the final question, the one about life, gave you a moment of pause. Why? Because in my 20 years as a financial advisor, the majority of people I worked with could more easily articulate a financial goal than a personal or life goal.

It makes sense if you think about it. Financial goals in many cases come down to simple math. Now, “simple math” doesn’t mean achieving the goal is easy, but there are proven ways to achieve financial outcomes.

When it comes to life goals, like defining the type of parent you want to be (top of mind for me as a new dad), there’s no equation to help you calculate an answer.

Now, what’s the point?

There are proven paths to becoming a millionaire, and you will learn about them below. That doesn’t mean that choosing a path guarantees an outcome for you. There's a big gap between making a choice, taking action, and actually achieving the goal.

However, every path has a unique set of habits, strategies, and methods that lead to becoming a millionaire. And each path will have a very distinct impact on the life that you live.

As you read the rest of this article, think about the life you want and which path might make the most sense for you.

There’s no right or wrong path, but I can almost promise you (as a financial advisor I’m not allowed to make promises or guarantees for compliance reasons!) that getting clarity around the life you want to live is a much better place to start than choosing an arbitrary level of wealth (e.g. one million dollars).

Now, let’s dive in and explore the world of millionaires.

The 5 paths to becoming a millionaire*

#1 - The savers path (aka the “easy” path) - About 20% of millionaires achieved this goal through intentional spending, savings, and investing habits. They followed the tried and true methods of living below your means, saving and investing early and often and avoiding unhealthy or unproductive debt.

Now “easy” doesn’t mean it requires less work, but it does mean it’s a more proven method, with a higher probability of success, than the others we will discuss below (i.e. it’s simple math). So if you save and invest the right amount each year and you get appropriate returns you will eventually become a millionaire. So “easy” = tried and true.

The not-so-easy part is that those that achieved millionaire status saved at least 20% of their income and started saving much earlier than most.

The average wealth created through this path? People that chose this path achieved their first $1 million in their mid to late 30s (so after 15 to 20 years).

#2 - The dreamers path (aka the “hard” path) - About 28% of millionaires achieved this milestone by pursuing higher risk and higher reward (and lower probability of success) endeavors like becoming an actor, musician, athlete, business owner or entrepreneur.

However, while it is the “harder” path to becoming a millionaire, it does lead to, on average, the greatest amount of overall wealth. So, once again, the risk reward trade-off plays out. You have to work harder and take on more risk, but you are rewarded properly if you are successful.

The average wealth created through this path? $7.4 million after 20 years.

#3 - The corporate path - About 33% became millionaires by climbing the corporate ladder. They started in entry level positions, put in their time, got promoted, became managers of teams, moved into executive roles, and maybe even reached the C-suite.

Along the way, they invested in their 401(k)s, they invested in other types of accounts (Roth IRAs, taxable investment accounts), and they accumulated company stock via stock options.

So they made more money (over time), saved and invested intentionally as they made more money, and accelerated their wealth building path through stock in their companies.

The average wealth created through this path? $3.4 million after 20 years.

#4 - The best-in-class path - About 20% of millionaires achieved this milestone by becoming world class in their field of work. This group committed themselves to studying, learning, and becoming masters at their craft in fields like medicine or law, and they were paid well for their unparalleled level of expertise.

And we aren’t talking about the Tony Robbins-like people of the world. We’re talking about the people in our communities that are the best doctors, surgeons, lawyers, real estate developers, architects, etc.

The average wealth created through this path? $4 million over 20 years.

#5 - The lottery winners - No, not people that played the actual lottery. I am talking about the people that inherited their wealth. Interestingly, the number of people that inherit $1 million or more has been shown to be about 3% of all millionaires.**

Now, there are people that inherited less than $1 million that went on to use that money to become millionaires. It’s certainly easier to become a millionaire if you start with $250,000 than with $0.

The point is that the vast majority of millionaires are self-made.

One final point - many of these paths will converge or overlap. As an example, I started on the “best in class” path and then changed to the “dreamers” path along the way. I made the commitment to become an excellent financial planner and then that provided me with the opportunity to be a co-founder of the company I now help run and operate.

So your path may change or several paths may converge.

Now, the real secret…

Can you guess what all groups of millionaires have in common?

Intelligence? Luck? Sales skills? Are they extroverts? Are they better than you and me? Are they just born with the skillset to become rich?

The good news is that it’s none of that.

All of us (yes, you as well) are capable of achieving financial success if we understand an apply the following five things:

1. Mindset - Success isn’t just about the mechanics of money; it’s about creating the mindset necessary to achieve it. One of the main mindset shifts necessary is to believe that you are capable of building wealth and worthy of having it (we all have limiting beliefs we need to let go of before we can rise higher).

2. Alignment - Success comes from focusing your resources – your time, energy and money – on what matters most to you. Whether they’re supporting your path to financial success or the life you want to live, focusing your resources can accelerate your timeline of achievement.

3. Time - This study on millionaires wasn’t conducted over one year, five years, or even ten years. It was conducted over twenty years. Now, some people were able to amass $1 million earlier than 20 years, but, the point is that becoming a millionaire takes time.

4. Habits - Regardless of how each person achieves success, there are clear habits, strategies and methods that lead to greater success. Without the right habits and the discipline to take action and remain committed to your goal, success will be very hard to achieve.

5. Support - Think of support as the team you need around you to achieve success. It can be a great boss or co-workers at work, a great coach or mentor, a financial advisor, and even friends and family to be there to celebrate your wins and support you during the losses.

I call this the MATH(S) of achieving financial success. So choose your path and then apply the MATH(S).

Remember, the media wants to sell you the get-rich-quick schemes. They will put the overnight successes on TV or on a podcast because it captures eyeballs and sells ad space.

This is partly the media’s decision, but my take is that financially successful people play a role in this, too.

The everyday millionaire isn’t worried about being on TV or jumping on the next podcast episode. They’re focused on becoming a millionaire based upon the path that they chose, and they spend their time, energy, and money on things that align with this path. And they also realize that their time is better spent on the things they value outside of work like being good partners, being good parents, giving back to their communities, taking amazing vacations, etc.

And now for some breaking news.

The National Study of Millionaires conducted by Ramsey Solutions surveyed 10,000 people to ask them how they became millionaires. There’s a lot to sort through, but one stat in particular stood out to me. Here’s an excerpt.

“But [millionaires] didn’t risk their money on single-stock investments or “an opportunity they couldn’t pass up.” In fact, no millionaire in the study said single-stock investing was a big factor in their financial success. Single stocks didn’t even make the top three list of factors for reaching their net worth.

That’s right. Millionaires don’t credit “picking the winner” to their success. Despite that fact that this is what many main stream media outlets and social media influencers want you to believe, investing in the next big stock isn’t the proven path to financial success.

BTW, it’s much easier to sell the get-rich-quick scheme than the “work hard, be smart with your money and give it time” narrative.

There is no right or wrong path

Don’t let anyone tell you that one path is better than the other. There is no right or wrong path to achieving financial success. There is only the one that will work for you.

However, while there is no right or wrong path, there are some things that will lead to the wrong outcomes. Here are three big mistakes you can make:

#1 - Not choosing a path - Lack of focus or lack of purpose means you never really have a true direction. More importantly, it means you can’t focus your time, energy, and money on the things that will continue to drive success.

Without a clear path, not only do you waste your valuable resources along the way but you also become susceptible to distractions – ideas, thoughts, schemes – that can take you in a new, and different, direction. The real problem here is that you often can’t tell when you lose site of your goal or when you fall off the path. You become a ship at sea without a destination that’s sailing at the whims of the wind.

A good friend of mine is a great example:

This guy is excellent at taking action in his business. I mean world class at it. He comes up with an idea and WHAM he’s off to the races like Usain Bolt. To the untrained eye it looks like he is destined for success. However, his biggest challenge is that he often changes his mind or starts chasing a new idea. Today it’s Project X. Tomorrow it’s Project Y. Next week? Who knows!

He sees this as positive change or as only a slight shift in his direction.

Having worked alongside this person at various times in my career, what I noticed is that he often gave up on his current idea when success on his current path was only a short distance away. His biggest problem isn’t that he’s making a change; it’s that he doesn’t see that he is now sprinting in the complete opposite direction.

He couldn’t stay on a path, and, as a result, he could never see the benefits, the real payoff, of any path he chose.

What you’ll miss: Clear strategies, habits and methods that lead to success. Choose a path and stick with it.

#2 - Choosing someone else’s path - I am guilty of doing this. I looked at successful people around me and decided that I would follow in their footsteps. This isn’t always a bad thing, but it can lead to choosing the wrong path forward. It isn’t so much that it’s a bad or wrong path for you, but if it’s not truly the path that will work for you, you will soon find yourself lacking vision or motivation to keep going.

The trick is to find the path that works for you and to remain committed to following it. That doesn’t mean you can’t change your path in the future, but being intentional about the path you choose today, creating a strategy to bring it to life, and then taking action will lead to a greater chance of success than trying to follow someone else’s path.

What you’ll miss: Motivation and the ability to keep going during the hard times.

#3 - Not taking action - The path you choose is just the first step of many that you will need to take. Once you’ve chosen a path, you need to put one foot in front of the other again and again and again. You need to take decisive and intentional action and keep moving forward. And when you fail (and failure will come) you need to pick yourself up and continue on your path.

What you’ll miss: This might be obvious, but you’ll miss everything. Why? Because…

Bottom line —> if you don’t take action, you’ll never move forward.

Bringing things home

I am adding to my newsletter a section called “Thinking Time.” It’s something I picked up from a book I read recently titled The Road Less Stupid by Keith Cunningham. He ends every chapter not with telling you the answers to problems but with questions to help you find your own answer(s). So let’s end with a few questions to explore:

• What path to financial success resonates most with your goals and values?

• What goals have you set to measure your progress on this path?

• What habits, actions, strategies are you using to create success?

• How has your mindset about wealth and success influenced your financial decisions?

• Can you identify any distractions or shifts in direction that might be keeping you from making progress?

• Who do you need on your team to achieve success?

Now, forget about becoming a millionaire for a second and think about the life you want (I mean truly want). How are you spending your time, energy, and money in pursuit of it?

Give it a second. Let it sink in.

Is your path aligned with this life or might a change of course point you in the right direction?

Cheers to health, wealth, and the good (financial) life,

Brent

*Source #1: GoBankingRates “The Top Ways That US Millionaires Make Their Money”

**Source #2: The National Study of Millionaires

Hi there! I’m Brent, and I’m a co-founder of Facet. In the spirit of full transparency, I’m sharing some information about myself, my work, and my company.

Facet is an SEC Registered Investment Advisor. That’s a technical term for a company that provides financial and investment advice for a fee.

My content is meant to be informational, educational, and hopefully entertaining, but it’s not legal, tax, investment, or financial advice. And, remember, all investments have risks, and past performance is never a guarantee of future performance.

View additional information about Facet’s Privacy Policy.

As Father's Day approaches, it's the perfect time to reflect on the profound influence our parents, particularly our fathers, have on our beliefs, values, and attitudes towards money. And, yes, I understand that most people don’t think about the financial lessons that their fathers teach them, but, as a financial advisor, I’m naturally inclined to explore the financial side of things. 

Whether intentional or not, these influences shape how we think and feel about money, affecting our financial decisions and overall relationship with money throughout our lives.

Before I share these lessons from my father, I hope you’ll join me in thinking about the lessons you learned from your father or a father figure in your life:

• How did your father's approach to money influence your own financial habits and decisions?

• What is one thing you appreciate about your father’s mindset towards money and how has it shaped your own beliefs?

• How do you plan to teach your children about money and financial responsibility, and how does this compare to your father’s approach?

Now, let’s dive in.

Money was kind of like Fight Club in our house

The first rule of Fight Club is: you don’t talk about Fight Club.

The first rule of money is: you don’t talk about money.

That’s not meant to be a negative comment towards my family. The truth is that most families didn’t (that was 30 +/- years ago), and still don’t, talk about money. At home, at work, or in society at large, money remains a taboo topic.

Yet while we didn’t talk about money, there were plenty of lessons to learn. How your family talked about it – are they confident and calm or are they stressed and worried – and how your parents used money will influence how you think, feel and act with it and around it.

And while there are lessons that we remember, many of the beliefs, values and attitudes we have around money were formed before we were 7. What this tells me is that truly understanding our money mindset (the psychology of money) requires more than just a surface level reflection of things we saw. We need to go a layer deeper and explore the emotional side of money. That’s where lasting, meaningful change can be found.

For me, the most valuable lessons I learned from my father weren’t obvious in the moment, but, as I look back at the time I spent with my father, there are a few powerful lessons I unearthed and I want to share them with you.

Maybe you’ll have a similar memory or experience or maybe it will help you think through some beliefs or stories that you still hold around money. Either way, I hope you find at least one “aha” moment that can help you improve the way you think about money.

Being more intentional with money – a values based approach

As a financial planner, I have been trained to be technically proficient. I was taught that we should ask our clients about their financial goals and then help them devise the optimal strategies to achieve them. And while I still believe this to be a part of the financial planning process, it’s only partly right.

In my twenty years as a financial planner, I have learned that the “why” behind the goals are often more important.

• Saving for an appropriate emergency fund is really about feeling financially secure.

• Saving for retirement is really about creating financial freedom.

• Saving for an education is really about creating greater opportunities for our children.

Often, our financial goals and actions stem from deeper beliefs and values that we developed over our lifetimes. In some cases, our financial decisions become reflections of our identities – who we are or who we want to be.

I didn’t know it at the time, but my father was teaching me a very powerful lesson about using money to support something he valued deeply – a quality education.

My brother and I had the opportunity, and privilege, to attend an excellent private school from kindergarten through 12th grade. My father paid for this education. He lived in a modest house and never bought or drove a new car. These were the trade-offs he made so that he could afford an excellent education for his children.

My father valued an education. His goal was to pay for a private school education every year for both me and my brother. His plan and strategy required trade-offs so he could use his cash flow to send us to school (BTW, you couldn’t use education savings accounts or 529 plans to pay for a K-12 education back then. If you could have, I totally would call him out for poor planning!).

As a new father myself – my baby girl just turned 5 weeks old at the time of writing this – I find myself already thinking about, and worrying about, the life I want to give her. A quality education is at the top of that list. And, yes, I already set up two 529 plans – one for her K-12 education and one for college.

Some lessons become stories and even limiting beliefs

As I mentioned above, my father lived in a modest home. It made sense given that he traveled so much. He also always drove a company car, at least for as long as I could remember. They were never new cars either. I vividly remember his red Mercury Grand Marquis. I am still convinced that it was technically a boat on wheels.

Now, this was reinforced on my mother’s side as well. My mother and grandparents always drove their cars into the ground. A ten year old car would be considered relatively new in my family.

The difference was that my grandfather and my mother drove older cars due to financial necessity. My father chose to drive company cars even though they were generally used cars and older models. He chose to do this because he didn’t need or really want a new car and it made sense for him financially.

We never talked about why he made this decision. And, honestly, the type of car didn’t matter, but I have learned that this set of values left a lasting mark on me as an adult. Even when I had the money for a new car, I could never spend it on one. As a financial advisor, I could always justify this decision – buying a new car is one of the worst financial decisions you can make due to the immediate depreciation in value.

Now, real quick, I am not saying that buying a new car is a bad decision in general. People do it all the time. If you have the money, it fits into your overall plan, and it’s important to you, then go for it!

Ok, back to my belief about new vs used cars.

In reality what I was doing was making the decision based on emotions and beliefs that were established during my early and teenage years and justifying them with logic. The real story that I told myself was that you are supposed to drive older cars because we were a middle class family and that’s what families like ours did.

As I unraveled this as an adult, there’s a tangled web of emotions and limiting beliefs that lie beneath the surface. Deep down, buying a new car was in some way abandoning the identity that I established decades ago. I was also afraid to spend money on a new car because I was always worried, deep down, that I wasn’t worthy of a new car or that something would go wrong in my career and I wouldn’t be able to afford it.

This was never an issue in my 20s. Everyone pretty much drove older or used cars. But, in my 30s, as my friends became financially successful, I remained one of the few that kept driving 10+ year old cars. Until just last week, I was driving a car that was old enough to legally drink (i.e. it was 21 years old).

It wasn’t just a financial decision, it was pride – driving an older car and not spending money on a new car … became part of my identity.

At the age of 41, I had never bought a car. I had a leased car through a prior company (it was a perk for being a partner) but I mostly drove the hand-me-downs - the car my brother or grandparents used to drive. But just last week I bought a car. It’s a used car from 2020. I guess some lessons never die, but I’m still proud of this one.

Quick aside, after I bought the car my mother called my partner and asked, “Can he afford it?” My mother has a limiting belief around money because she, and my family, never had a lot of it. But her simple question of, “Can he afford it” has always stuck with me. Even when I can afford something, my subconscious mind still asks, “Can you afford it?”

Now, back to what my father taught me about spending money on things you value. Last year, my partner and I invested in solar panels. This year we invested in an electric car that can be powered via our solar panels. And, also, it’s safer for our growing family and has more space to accommodate our new lifestyle.

We both value supporting, even in small ways, the transition to clean, renewable energy sources.

The funny thing is that this almost never happened. While sitting at the dealership, I told my partner I couldn’t go through with the purchase. I told myself it was a foolish decision. I told myself I shouldn’t spend the money.

My partner helped me think through this. She helped me realize that I needed to make the decision from the point of view of the person I want to become and not from the point of view of the person I had been and the stories the old version of me wanted to keep retelling.

Some stories and beliefs just need to evolve. That process can take time, but it’s important to reflect on them, to explore them, and to decide if they still serve the person you want to be or the life you want to live.

What stories or beliefs do you still carry with you today? And which ones might you need to examine a bit closer?

From lessons from my father to lessons I want to impart as a father

As I write this, I’m looking at my partner and five week old baby girl lying in bed. It’s amazing how these life events can give you the space you need to pause and reflect on what really matters. And, if we’re honest, we all think about money; a lot. It affects nearly every decision we make – from the endless wipes and diapers from Amazon to new (or used) cars to daycare and paying for an education. And, as a financial advisor, I think about money more than most so “meditations on money” are quite common for me.

In reality, they can sometimes reach the point of being slightly unhealthy. That’s something I am working through with my coach.

As an example, remember that used car? I had an absurd spreadsheet that mapped mileage, battery range, features, packages, CarFax reports and accidents, etc, etc, to make sure I was getting a fair value on the purchase. I even created a short equation to help me automatically calculate a fair value. Seriously Brent…get a life!

I often “over math” things (i.e. over think them financially) if that wasn’t already abundantly obvious.

My father taught me that money is a tool to be used wisely and purposefully. It's not just about accumulating wealth but about investing in things that truly matter and enrich our lives. His legacy of valuing an education and his ability to lean into the trade-offs he had to make to create this reality for his kids is something I will always carry with me.

While we never talked about money, my father shaped my approach to financial wellness, emphasizing that our financial decisions should align not just with more responsible financial goals but with the things we value.

The bottom line is that money matters, but to me it’s not what we have, it's what we do with it that matters.

For my daughter

I hope that I can teach my daughter that money, and achieving financial success, isn’t the goal. Money, in my humble opinion, is simply a tool. Used well, it has the power to create financial security, to create opportunities for the people you love, to give back in meaningful ways to your community, and to be an expression of your beliefs and values and the person you are or want to become.

So, to my daughter: Be kind. Have courage. Stand up for what’s right. Explore the world and find what you care about. And then figure out how money can play its most powerful role – as a tool to support the life you want to live. Money will never define you. You are perfect and beautiful just the way you are.

And, also, create a financial plan, spend less than you make, save and invest early, have appropriate insurance, create an estate plan … :-)

My financial planner brain is always on!

So, as we celebrate this Father's Day, I say thank you to my dad. For all the lessons, the support, and the unwavering belief that anything is possible.

Happy Father's Day, Grumpa (that’s our loving nickname for him and he’s going to kill me for writing it here!).

Cheers to health, wealth, and the good (financial) life,

Brent

P.S. In reflecting on your father's influence, what legacy do you hope to leave for your own children regarding money and life values?

You already know my answers, but I’d love to hear yours. Send me a note at brent@facet.com. 

Hi there! I’m Brent, and I’m a co-founder of Facet. In the spirit of full transparency, I’m sharing some information about myself, my work, and my company.

Facet is an SEC Registered Investment Advisor. That’s a technical term for a company that provides financial and investment advice for a fee.

My content is meant to be informational, educational, and hopefully entertaining, but it’s not legal, tax, investment, or financial advice. And, remember, all investments have risks, and past performance is never a guarantee of future performance.

View additional information about Facet’s Privacy Policy.

Jeff Bezos once said, “I got rich when I understood this.”

Given the name, you might imagine it was a lesson he learned about money – maybe a smart investment strategy – that propelled him to become the billionaire he is today. The truth is that it had nothing to do with money. It was a mindset shift he made years ago that he now credits for his success.

So, what is “this”?

Keep reading, and I will tell you. Trust me; you won’t regret it.

Speaking of Regrets…

Let’s start with a question, “What is something you regret not doing?”

Take a minute to think of one thing. If more than one comes to mind, that’s certainly fine. There are no rules here. But humor me and take a minute to think of one as I believe you’ll get more out of reading this if you do.

What is your regret?

Not saving or investing earlier for retirement? Not taking that risk and making the job or career change? Not staying in touch with old friends (a personal one for me)? Not taking those vacation days and traveling because of work? You can always do it later, right?

Or maybe it isn’t one specific thing. Maybe it’s more broad, like wishing you didn’t worry so much or let the anxiety and stress around money keep you from being truly present and enjoying life?

In the spirit of full transparency, here is mine.

The other week, I came across a document I put together in December of 2020 that talked about an important goal I wanted to achieve in the coming year. That goal? To start sharing my knowledge – everything I had learned in my career as a financial advisor (almost 20 years at the time of writing this) – with the world.

Why?

Because here is what I believe:

#1 - That our financial health is just as essential as other aspects of health (physical, social, emotional, etc.) to living well.

#2 - That financial planning, done right, has the power to change our lives and far too many people lack access to this life changing thing that we just happen to call financial advice.

#3 - That all people deserve access to the education, resources, and expert advice they need to take control of their money and lead more fulfilling lives.

And here is what I know (also three things - by the way, you will find that I use three things a lot in an attempt to make things simple):

#1 - Money is a top cause of anxiety and stress for many people because we are never taught this stuff in school and so many of us have to figure it out on our own. I think we all know what happens when you WebMD how you are feeling. The same thing happens when we google (or I guess now ChatGPT) financial advice.

#2 - We have to turn to a financial services industry that can be expensive, exclusive, and filled with conflicts of interest and bad advice. Not to mention, how do you cut through the noise and find a firm or person you can trust?

#3 - People feel increasingly uncertain about the future – the economy, the market, inflation, interest rates, AI and the future of work – and are trying to figure out which financial decisions are the right ones for them, their families, their careers, and their lives.

We all want to know the same things. What should we be doing today, not just for “retirement” which can be decades off? How do we build meaningful careers, be good partners, raise families, be active in their communities, achieve success, and manage our finances?

My “why” for this newsletter and the broader Financial Wellness Project is that I want to be someone that people can turn to and that they can trust. I want to share my knowledge as a financial planner and a behavioral finance expert and I want to share real stories about life and the role that money plays in it.

More importantly, I want to share it with the hope that you can at least learn one thing (hopefully many more) and apply it in a way that improves some aspect of your life.

Alright, enough about me for now. If you want to hear more about my story, and what I stand for, head over to the “My Story” page.

OK, back to regrets

Oh, yes, my beautifully written document. I had a project plan, a content calendar, and even the resources I would need to make it happen! But, here we are, three years later and nothing.

So what went wrong?

I have a million excuses. I overanalyzed every step. I got busy at work. I needed better equipment. I didn't have enough time. I was worried that what I shared wouldn’t be good enough. I was afraid of failing.

As a result, I never started. And I regret it.

I still beat myself up for not starting back then. And the funnier part? I still doubt myself and my ability to get started even today. The simple act of sharing this post will be hard for me.

Does any of this sound familiar to you? When you think of your regret, what kept you from taking action?

Now, back to Jeff Bezos…

Here’s what he attributes to his success. He calls it the Regret Minimization Framework. Here’s a graduation speech he gave that mentions it.

In short, he asked himself one question, “In [X] years, what will I regret not having done?”

The result of asking this question? The company we now know as Amazon. And it all started with selling books out of his garage. If you read about the founding story of Amazon, you’ll learn that pretty much everyone around him told him not to leave his job and start his company. His boss at the time agreed that he had a really good idea … for someone that didn’t have a good job (i.e. he’d be making a mistake leaving his good paying job).

Oddly, this is exactly what people told me back in 2016 when I was planning to leave my job as partner in a wealth management firm and start the company I have since co-founded and now help run. I can still hear their voices saying, “Brent, why would you give up such a good job?!” “[Your idea] will never work!”

I’m glad I did not listen to them.

Now that’s a decision I do not regret. It’s also a lesson I learned about life. If you ask someone for their opinion, most people will give you an answer through the lens of their life and world view and not yours.

We all have regrets

I have plenty, and I am trying to learn from all of them. However, people that lead truly fulfilling lives do their best to minimize the regrets they will have in the future. And, no, you don’t have to start the next Amazon to live an extraordinary life.

Jeff Bezos didn’t actually become rich when he started Amazon, but his Regret Minimization Framework was the mindset shift he needed to make to put him on a path to being capable of building meaningful and lasting wealth, and, yes, it also came with some risk.

And here’s a little secret for you: creating financial success isn't just about the mechanics of money; it’s in the level of thinking required to create it.

The truth is that our greatest regrets stem from decisions that aren’t aligned with our values, our sense of self or identities, and the lives that we want to live. Trying and failing will lead to a far more fulfilling life than never having tried at all. Later in life, when you ask people what they regret it’s almost always the things they didn’t do.

And who knows, maybe, just maybe, doing what you truly want or truly love will lead to a level of success that you never thought possible – or that your internal critic said you could never achieve.

The things we want – from watching a few more sunsets, to being great parents, to starting that business you’ve always dreamed of – require us to be more intentional about the actions we take. People that have achieved any level of success know that you need to start with creating a clear vision for the things, experiences, relationships, successes … [add your goal or crazy dream here] … you want out of life and then take action to make it all possible.

And it can be uncomfortable, hard, and even scary, but it’s often worth it.

Taking my own advice

Today I am doing what I should have done three years ago and launching The Financial Wellness Project with the amazing people at my company, Facet. I (we) have a simple mission – to redefine the role of money in our lives, to reimagine what’s possible when we use money more intentionally, and to make financial wellness a reality for all.

The regret I want to avoid is seeing more families, like mine, that never have access to the kind of financial advice that can truly change their lives. Financial advice shouldn’t be reserved for the wealthy. It should be accessible to all.

So this is the action I am taking to avoid that regret.

Regrets aside, why should you care?

So, you might be asking, “Brent, why should I spend my valuable time with you?”

It’s a great question. I have to earn the right to be a voice you can trust.

Here’s what I bring to the table:

• Real stories about life, money, people and their successes (and failures) and the financial habits, strategies, and tips that you can apply in your life…and a behind the scenes look at how I make financial decisions in mine.

• Real expertise from my 20 years as a financial advisor, behavioral finance expert, life coach, business owner, and entrepreneur and everything I have learned along the way.

• Access to my network of some of the smartest and most amazing people I know in financial services, business, and entrepreneurship.

*I am a Certified Financial Planner® Professional, a Chartered Financial Consultant®, an Accredited Behavioral Finance Professional™, a Certified Life Coach®, a Certified Blockchain and Digital Asset Advisor™, and a Crossfit Level 1 Trainer (I am a big believer that health is a form of wealth).

My hope is that what I share will help you improve how you think, make smarter (and better) financial decisions, and change how money works for you.

My ask of you

Before I wrap up, I have an ask of you.

Will you join me?

Yes, that is a little selfish because I am asking you to subscribe to my newsletter, but I want you to take this action for yourself. My ask is that you commit to spending 14 minutes, or less, with me every week to improve some aspect of your financial life.

Why 14 minutes? Because it’s 1% of your day. So every week you can get 1% better with your money. Imagine how that 1% will compound over time.

And, if you’ve already subscribed, thanks for joining our community!

“Don't think about making art, just get it done. Let everyone else decide if it's good or bad, whether they love it or hate it. While they are deciding, make even more art.”

- Andy Warhol

Today, I start making my art. My hope is that you find at least one insight or moment of inspiration that helps you achieve something you never thought possible.

Cheers to health, wealth, and the good (financial) life,

Brent

And, because I don’t like to take myself or money too seriously, let’s have a little fun. Here is my question of the week: “I wish my wallet came with…?”

Share your answer with me at brent@facet.com.

My answer? Free refills!

Hi there! I’m Brent, and I’m a co-founder of Facet. In the spirit of full transparency, I’m sharing some information about myself, my work, and my company.

Facet is an SEC Registered Investment Advisor. That’s a technical term for a company that provides financial and investment advice for a fee.

My content is meant to be informational, educational, and hopefully entertaining, but it’s not legal, tax, investment, or financial advice. And, remember, all investments have risks, and past performance is never a guarantee of future performance.

View additional information about Facet’s Privacy Policy.

April is financial literacy month and it’s dedicated to educating people on basic money concepts such as budgeting, savings, debt, compound interest, and investing, just to name a few. Given that only 57% of adults in the United States are deemed to be financially literate, it’s certainly something we need to address. Improving the financial literacy of all people is a noble cause, but there remain many questions surrounding how to do it.

Google financial literacy and you will find that there is no agreed upon definition, no standardized way to measure it, and no consistent process to ensure people are learning the right skills and how best to apply them in real life situations. If you can’t define financial literacy, you can’t teach it. If you can’t measure it, you certainly can’t manage it or even judge whether financial literacy programs are improving financial health and wellness.

The one thing we do know is that the lack of personal financial knowledge costs U.S. households over $350 billion per year. Financial literacy is critically important to making healthier financial decisions, but financial literacy alone will fail because it’s only one piece of a much bigger puzzle that’s part psychology, part life, and part money. Here are the 3 reasons why financial literacy, by itself, will fail.

#1 Financial literacy is the wrong starting point

While there is no commonly agreed upon definition of financial literacy, there is one common theme amongst all of them: poor financial health is due to a lack of education. It’s considered a knowledge problem. Proper education is important, but financial literacy programs focus on the facts and figures and ignore our feelings (our emotions), which ultimately drive our behaviors. It’s a mindset problem and not only  a money and math problem.

For many, money is a cause of stress, worry, fear, and even shame and embarrassment. Deeply rooted emotional issues and limiting beliefs about money will keep most people from making healthier decisions with it. More often than not, financial literacy programs address the technical aspects of money (the thinking and financial parts) and ignore the attitudes, beliefs, and values (the emotional and psychological parts) around it. When 90%+ of the decisions we make are driven by emotions and not by logic, existing programs are starting from the wrong point.

#2 Financial literacy doesn’t lead to behavior change

Tony Robbins has been quoted as saying, “Knowledge is only potential power. Action is power.” It’s not what you know, it’s what you do with it that matters. Financial literacy and the programs that teach it focus on potential power (financial knowledge) and fail to provide real power (changes to behavior and actions) that can put people in control of the lives they want to live. In fact, studies have shown that improved financial literacy can explain just 0.1% of behavior changes that occur.

Our behaviors are driven by a complex web of emotions, attitudes, beliefs, and values, and, without a clear understanding of how they drive our behaviors, more financial information will fail to produce real change. In short, information does not equal transformation. Financial literacy programs today are hacking at the leaves of change when they need to focus on the root of the problem and better integrate knowledge with healthier behavior.

If you don’t change your mindset (how you think), your habits (what you do), your systems (how you do them), or your environment (what shapes your choices), all the information in the world won’t lead to better financial outcomes. All of that being said, it’s important to note that in some cases there are greater systemic issues that limit one’s ability to choose or to change circumstances so the push for greater financial literacy is just the tip of the iceberg.

#3 It’s only one aspect of a much bigger financial (and life) picture 

There is a continuum of care with financial advice that can lead to improved financial health and wellness, and financial literacy is only one piece of it. Improved financial well-being occurs when all of the pieces of the puzzle are placed together (or integrated) to support the bigger picture, and these include:

• An understanding of beliefs and attitudes, cultural and community values, and behaviors and sentiment.

• Appropriate levels of literacy, education, and knowledge on various money related topics.

• Access to the tools, resources and money management systems through which this knowledge can be applied.

• The right environment to help develop healthier habits and support ongoing behavior change.

• Ongoing financial planning to adapt to a dynamic, increasingly complex, and constantly evolving life – personally, professionally, and financially.

Financial literacy and the programs that support it fail because they focus on one aspect of this continuum of care. It mirrors a problem in the financial services industry where advice focuses on one aspect of our financial lives, our investments. We need advice and guidance in all aspects of our lives and ongoing support, and often course corrections and adjustments, to achieve true financial health, wellness, security, and independence.

The greatest challenge surrounding financial literacy

The biggest challenge facing not just financial literacy but improved financial health and wellness comes down to three words: access, inclusion, and integration. Greater access to financial tools, resources, and expert advice unlocks the door to opportunity. Greater inclusion brings all people and communities through the door to participate in better education and economic ecosystems (lack of inclusion is a broader systemic issue). Greater integration takes the individual pieces of the continuum of care, threads them together, and truly drives greater financial health and prosperity.

Financial literacy alone will always fail to improve overall health and wellness just as advice limited to investments will fail to help people eliminate financial stress, make smarter, more informed decisions in all aspects of life, and put them in control of the lives they want to live. If we want to create real change, we need to create greater access to financial advice and ensure the inclusion of all people and communities. The key is to focus on the integration of all parts and not just any one of them, such as financial literacy, in isolation.

Hi there! I’m Brent, and I’m a co-founder of Facet. In the spirit of full transparency, I’m sharing some information about myself, my work, and my company.

Facet is an SEC Registered Investment Advisor. That’s a technical term for a company that provides financial and investment advice for a fee.

My content is meant to be informational, educational, and hopefully entertaining, but it’s not legal, tax, investment, or financial advice. And, remember, all investments have risks, and past performance is never a guarantee of future performance.

View additional information about Facet’s Privacy Policy.

Financial wellness is wellness.

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True financial wellness isn’t just about having money. It’s when money becomes an empowering element in your life so you’re living free from financial worry and stress, making financial decisions with clarity and confidence, and feeling in control of not just your money but the life you want to live.

Think of this newsletter as your VIP, all-access pass to the proven habits, strategies, and systems that can help you master every facet of your money. But this newsletter isn’t just about money. We’re here to reimagine the role of money in life so that you can reimagine what’s possible in yours.

We'll also explore the often overlooked impact of our relationship with money (the psychology of money) because the secret to financial success (as you define it) lies not just in the mechanics of money but in the level of thinking required to create it.

And we’ll tap into the true power of money which lies in the possibilities it can create in your life when used more intentionally and in direct alignment with your values, the person you want to become, and the life you want to live.

If you want to:

1. transform your relationship with (and mindset around) money,

2. level up your financial habits and decision-making skills,

3. and improve your quality of life

…and do it faster (by starting earlier and avoiding costly mistakes)

This is the newsletter, and community, for you.

In just 14 minutes every week, I’ll share personal insights and proven strategies that successful people have used to build wealth, and, more importantly, the secrets to how they used their money to lead more fulfilling and enriched lives.

And I won’t just share them, I will clarify them, simplify them, and codify them so that you can apply them to your life (no matter where you are today) to unlock your full potential.

*Why 14 minutes? It’s 1% of your day. So every week you’ll get 1% better. Over time, this 1% will compound to take your mindset, money and life to entirely new levels. And, yes, getting better with your money can be this easy.*

Join our community of like-minded people that are getting 1% better every week. Every minute you invest here is a step towards a more fulfilling and enriched life.

Hi there! I’m Brent, and I’m a co-founder of Facet. In the spirit of full transparency, I’m sharing some information about myself, my work, and my company.

Facet is an SEC Registered Investment Advisor. That’s a technical term for a company that provides financial and investment advice for a fee.

My content is meant to be informational, educational, and hopefully entertaining, but it’s not legal, tax, investment, or financial advice. And, remember, all investments have risks, and past performance is never a guarantee of future performance.

View additional information about Facet’s Privacy Policy.