All Articles

You Don’t Need Money to Make You Rich

There is more to life that having money. Perhaps this sounds a little strange coming from a financial advisor so I will tell you what I mean.

My wife and I had our first baby back in May. For us, that amazing event put everything in perspective. It’s a bit of a paradox, really, because there’s no doubt that money is important when raising a family, but it doesn’t make you rich in spirit, in life, or in your heart and mind. That is why I feel it goes much deeper than that.

Like so many families, we’re responsible for a baby – a person – and for raising a family and everything that goes along with it from this point forward. Money is an important part of our lives, but when I look at our son it makes the notion of chasing after material possessions seem hollow.

Money Can Run (or Ruin) Your Life

My good friend Tom is an attorney. He was working in a job that was burning him out and running him down. Of course, Tom was making good money, too, but he was working tons of hours, stressed out, and with two young kids, things got a bit tense. So, basically, Tom concluded it was no longer worth wearing himself down to the point where he could no longer enjoy his life, his life as a husband, or his life as a father.

After taking a job probably making less than half of what he was making before and with much lower stress, it is a bit more difficult financially for them. But the difference is they are happier now. I think this illustrates the fact that, for young families, there is way more to life than worrying about and slaving for money.

Worrying about money is universal. Whenever we meet with people at Hefren-Tillotson, we almost always talk about money and worrying about money. But that’s just one piece of the puzzle. Money is a tool that can help us do the things we want to do, so the conversation might be “What else do you want to accomplish?”

A big part of what we do when first meet with people, even before they become clients, is to try to determine what is important to them, what their goals are, and what they want to accomplish.

Things We Like to Find Out First

Looking inside can also contribute to your wealth. What aspects of family life are important to you?” “What other areas of your life do you want to focus on?” “How do you like to spend your time when you’re not at work?” “What does the first day of your retirement look like to you?” These types of questions help us understand these folks and what is important to them. And so, all of this goes beyond just having the “money” conversation; it is hearing and understanding their perspectives. Seeing things through their eyes.

Not surprisingly, money can make people happy. There might be moments here and there, but they’re fleeting. It might make some things easier or provide some temporary additional happiness, but it doesn’t make you rich in life.

You cannot tie your self-worth or happiness to money because money is fleeting. Chances are if the markets make you happy and sad, why tie your worth or your happiness to it? You cannot really control it and so, in my opinion, it is a recipe for disaster for a lot of people. I suppose it is human nature, or the psychology of it, to even think that if I had a million dollars I’d be happier. I’d be set. I wouldn’t have to worry about things. And when you achieve that goal what happens? “A million is nice, but $2 million is a whole lot nicer.” Human nature. We can also fall into the trap of comparing ourselves to others. Comparison robs us of our joy.

No One Starts Out Greedy

In my years at Hefren-Tillotson, and having conversations with lots of people, I’ve found that the hardest thing about spending, especially for a lot of people who have been diligent savers and have gotten themselves into a position to “flip that switch,” is allowing themselves to transition from accumulating money and seeing their accounts grow, to making that psychological shift from saving to spending.

I recently met with folks who retired and are in great financial shape. We went over their retirement analyses and it showed that they are not even close to spending through their money.

In the past, I would’ve said, “Good for you, but still be careful!” Now, I think I’ve matured to “Spend more! Enjoy your money. Give to your kids. Give to charity or church. You have the means to do so. If you want something go ahead and buy it.” Of course, I have to be careful with that advice based on who I’m talking to and what life stage they’re in.

For myself, I am trying to mature that way. I am not good at spending money. I save and save and worry about the future. Just because I’m a financial advisor doesn’t mean I have everything about money figured out. I fall into the same traps as everyone else. I compare myself to others or I reach financial goals that I thought would make things easier only to realize the stresses of life remain the same. I’m still learning and growing. I want to be rich in life.

Money itself isn’t inherently bad. We often hear “money is the root of all evil,” but the Scripture passage from I Timothy actually says “For the love of money is the root of all kinds of evil.” As humans, if we place all of our trust or love into money, that’s where we run into all sorts of problems.

In my work at Hefren-Tillotson, I have found that the most rewarding relationships are those which go above and beyond picking mutual funds or trying to get the best returns. I’m interested in helping you grow and achieve what is most important to you, live the life you want to live, and look after your family. That is what I do. And I want to make your life better. I want you to be truly rich.

DISCLAIMER: Past performance does not predict future results. This report is based on data obtained from sources we believe to be reliable. Hefren-Tillotson does not, nor any other party, guarantee the accuracy or completeness of this report or make any warranties regarding results obtained from its usage. All opinions and estimates included in this report constitute the firms judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation to buy or sell the securities herein mentioned.

What can we help you find?