Episode 8
Setting Your Compass for the New Year - Series Recap! | Series 6.8
Recapping all 7 ways to Set Your Compass for the New Year - you've learned the ropes, now set sail!
- If we just have one giant, 'I want to build a ship' bucket, it's hard to see where all that money is going to for the various elements we're going to need. (06:31)
- If you are more intentional about setting money aside ahead of time, you can add a lot more happiness to your life on a daily basis as well. (09:17)
- What parts are worth insuring? Hull of the ship, very very important. One of the nails the ship, really not so much. (11:43)
Quote for the episode: "But the end result of any goal is for more overall happiness, either through addition of happiness, or subtraction of anxiety." (03:08)
Securities offered through TFS Securities, Inc., and Advisory Services through TFS Advisory Services, an SEC Registered Investment Advisor Member FINRA/SIPC. TFS Securities, Inc., is located at 437 Newman Springs Road, Lincroft, NJ 07738 (732) 758-9300.
Transcript
Welcome to the Enjoy More 30s Family Finance
Voiceover Audio:podcast. The only podcast dedicated to making life more
Voiceover Audio:enjoyable for young families by hitting on the financial topics
Voiceover Audio:that tend to weigh on us, stress us out, and distract our focus
Voiceover Audio:from simply enjoying life.
Joseph Okaly:Hello and welcome. I'm so happy to have you today
Joseph Okaly:as we recap this most recent series of the Enjoy More 30s
Joseph Okaly:Family Finance podcast. If you don't know, every week, I'm
Joseph Okaly:talking to you about money so you can take steps forward, gain
Joseph Okaly:confidence, remove financial anxiety, basically just focus
Joseph Okaly:solely on making your life more enjoyable. As always, if you do
Joseph Okaly:like what you're hearing, please make sure to subscribe, follow
Joseph Okaly:us on Apple podcasts wherever you may listen. Clicking the
Joseph Okaly:stars leaving the reviews really really helps us reach the
Joseph Okaly:millions of other young families out there that are just like
Joseph Okaly:you.
Joseph Okaly:Today we have the recap, as I said of the most recent series,
Joseph Okaly:Setting Your Compass for the New Year exclamation point. I
Joseph Okaly:sincerely hope these episodes can help as you take sail into
Joseph Okaly:this new year with a positive productive mindset on the
Joseph Okaly:opportunities you have. The goal of this series was the same as
Joseph Okaly:the goal of all the other series, and we want to make sure
Joseph Okaly:that we're remembering that goal. It is to remove anxiety
Joseph Okaly:and financial worry so we can focus our energy on what really
Joseph Okaly:matters most. We want to be enjoying more living with our
Joseph Okaly:family. We want to be enjoying more living with our friends.
Joseph Okaly:You don't need to have anxiety when it comes to money. And with
Joseph Okaly:the right mindset, a few steps in the right direction, a few
Joseph Okaly:really good podcast episodes, you can make huge strides in
Joseph Okaly:this area. So every time you make a step, be proud of these
Joseph Okaly:steps as you take them then. You're making life more
Joseph Okaly:enjoyable then for you, and by a natural consequence, for your
Joseph Okaly:family as well. And lastly, stay tuned to the end, we will have a
Joseph Okaly:new series coming up and we want to tell you what it is. Each
Joseph Okaly:episode of this specific series was in a kind of chronological
Joseph Okaly:order and walked us through the whole process of setting your
Joseph Okaly:compass for this new year. So we can really take it one episode
Joseph Okaly:at a time recap along the way and it should put you in a great
Joseph Okaly:position to have a conversation with your spouse about the
Joseph Okaly:things that you guys want to do into this new year to make life
Joseph Okaly:even more enjoyable.
Joseph Okaly:The first episode was titled Goals Are a Two Spouse Exercise!
Joseph Okaly:Here we spoke about the very first part, which is setting
Joseph Okaly:that compass, figuring out where exactly it is you want to go.
Joseph Okaly:And really not just you but more accurately where you and your
Joseph Okaly:spouse both want to go. When you're married as you know you
Joseph Okaly:have one ship. You may decide to have separate bank accounts,
Joseph Okaly:split up responsibilities, but you cumulatively still have that
Joseph Okaly:one ship and a ship that can only sail in one direction at a
Joseph Okaly:time. It has one steering wheel that you and your spouse both
Joseph Okaly:have to set together. You need to know what those goals are.
Joseph Okaly:Now, some goals can be things to add your happiness, like more
Joseph Okaly:vacations or a bigger house, there's things like that. And
Joseph Okaly:there could be things to also stop detracting maybe from your
Joseph Okaly:happiness. And those are things where we're removing anxiety. So
Joseph Okaly:maybe worrying about what would happen to your family if
Joseph Okaly:something happened to you. But the end result of any goal is
Joseph Okaly:for more overall happiness, either through addition of
Joseph Okaly:happiness, or subtraction of anxiety. Lastly, when you have
Joseph Okaly:this list of goals, now, I highly recommend to hang it up,
Joseph Okaly:make it visible, you know somewhere that you look at it
Joseph Okaly:from time to time, and check in with your spouse about it every
Joseph Okaly:few months to keep it in that front of mind. Remember, if you
Joseph Okaly:achieve even one of those things that you hang up, just one, you
Joseph Okaly:are better now than you were before. Your compass has a route
Joseph Okaly:and your ship now has a direction.
Joseph Okaly:The second episode was Pay Yourself First! You know, we set
Joseph Okaly:our compass in that first episode with the goals but we
Joseph Okaly:also need that ship to actually sail us to where we want it to
Joseph Okaly:go. And as you may know, thing is ships aren't free, they don't
Joseph Okaly:just give them away. And we likely need to save, pull
Joseph Okaly:together funds over time, to be able to pay for the ship to go
Joseph Okaly:where we want it to go. If we just give our money away every
Joseph Okaly:month to other people we will not ever be able to do that. So
Joseph Okaly:how much should you pay yourself every month? The minimum that I
Joseph Okaly:spoke about is at least 5% of your gross income. So if you're
Joseph Okaly:at $100,000 a year, then at least $5,000 a year at a bare
Joseph Okaly:minimum. But if you really you know like yourself, I would
Joseph Okaly:highly recommend 10% to 15% or even more because you know
Joseph Okaly:you're really important, you deserve more. And the exercise
Joseph Okaly:that we went through to try to help you figure out where you
Joseph Okaly:may be with what you could save was that 36% ratio, what we call
Joseph Okaly:Backdoor BudgetingTM with our clients. If you make $120,000 a
Joseph Okaly:year like in the example we spoke about, that comes out to
Joseph Okaly:$10,000 a month and the 36% ratio off of that, we get down
Joseph Okaly:to $3,600 a month for those specific to you expenses, things
Joseph Okaly:that you may have other people may not have. So mortgage, car
Joseph Okaly:loan, student loans, not cell phone bills, you know, not
Joseph Okaly:groceries not going out to eat once a while, those are the
Joseph Okaly:things everyone has. So if you're saving nothing right now,
Joseph Okaly:but you have a mortgage of $2,000 a month and a car loan of
Joseph Okaly:$600, those are the two specific to you expenses. And that comes
Joseph Okaly:at the $2,600 a month we talked about. So the difference between
Joseph Okaly:that $3,600 a month and the $2,600 a month comes out to
Joseph Okaly:about $1,000 a month. So that is what you should have additional
Joseph Okaly:to save towards you. And remember this exercise is just
Joseph Okaly:to get to a starting point. It may be a little too high, may be
Joseph Okaly:a little too low but on average, this is what you should be able
Joseph Okaly:to be saving every month, whether it's 401(k)s or specific
Joseph Okaly:bank account buckets, or whatever it might be. That's
Joseph Okaly:really what we should be getting to in savings total on a monthly
Joseph Okaly:basis. Now if this is you know, too high, too low, like I said,
Joseph Okaly:you could change it. But at least we're doing something
Joseph Okaly:active and intentional to save towards you. Paying yourself
Joseph Okaly:first.
Joseph Okaly:Episode 3, Use Lots of Buckets! Buckets for each goal can add a
Joseph Okaly:lot of clarity to your situation because it helps you better
Joseph Okaly:organize and achieve the things that you want to achieve. If you
Joseph Okaly:think to how you organize your clothes, you probably have some
Joseph Okaly:kind of a system. Your system is probably grouping things
Joseph Okaly:together and spots that make sense and allows you to find
Joseph Okaly:them more easily. And so the same goes when we build this
Joseph Okaly:boat, the same thing goes when we build the ship. We want it to
Joseph Okaly:take us to our goals. If we just have one giant, I want to build
Joseph Okaly:a ship bucket, it's hard to see where all that money is going to
Joseph Okaly:for the various elements we're going to need. Some we may need
Joseph Okaly:right away, you know right up front, we may need for the boat,
Joseph Okaly:some we may not need until the ship is built. And some of it is
Joseph Okaly:to refuel when we get there, you know, there's different pieces
Joseph Okaly:to it. And by breaking it up into different buckets, it's
Joseph Okaly:much easier to see what we have for each specific purpose for
Joseph Okaly:each specific goal. Now, these buckets are three general types
that we've talked about:a short term bucket, an intermediate
that we've talked about:term bucket, and a long term bucket. A short term bucket is a
that we've talked about:bank account. So things that you're going to need over the
that we've talked about:next 1-3 years say. Intermediate bucket is more of a general
that we've talked about:investment account, usually, for maybe 4 to 10 years out more,
that we've talked about:maybe sometimes even more than that for those goals. And the
that we've talked about:long term bucket, it often includes things such as
that we've talked about:retirement, your 401(k), IRAs, things like that, or even a 529
that we've talked about:plan for college savings. But for younger family long term
that we've talked about:tends to be you know, pretty long term. Once we have those
that we've talked about:three general types of buckets, now we can fit our goals from
that we've talked about:the first episode inside of them. New car next year, short
that we've talked about:term bucket, the bank. A wedding 3 years from now, probably still
that we've talked about:short term bucket a different bank account. Second home in
that we've talked about:seven years. Okay, now we can use an intermediate term bucket,
that we've talked about:maybe a general investment account. Retirement, long term
that we've talked about:bucket, Roth 401(k), and so on and so forth. But by having all
that we've talked about:those different buckets, it's much easier to see where we are
that we've talked about:for all those different goals.
that we've talked about:The next episode was kind of an extension of that called Buckets
that we've talked about:For Fun! where we covered easy ways to set money aside, aka
that we've talked about:what I refer to as money blocking for specific things
that we've talked about:that will increase your happiness throughout the year.
that we've talked about:If you've ever received a gift card to something that you love.
that we've talked about:Maybe your favorite restaurant, the movies, really anything else
that we've talked about:you enjoy doing. You know what a great feeling that is. It's
that we've talked about:quite literally a free pass for fun. There's no anxiety around
that we've talked about:it for spending for the outlay, doesn't matter what else is
that we've talked about:going on with you in your life right now, you can go out and
that we've talked about:enjoy that activity completely guilt free. So for example,
that we've talked about:let's say you love getting massages, however, you may get
that we've talked about:them sporadically or you may there's times your money is
that we've talked about:tight during the year when you really need them, but you don't
that we've talked about:feel like you could afford it. If you set a money blocking
that we've talked about:schedule aside, if you use this technique, maybe every time you
that we've talked about:get a bonus, you set $500 aside off the top, so money blocking,
that we've talked about:and you buy a massage gift card. So you always are able to get
that we've talked about:that one massage a quarter or a month or whatever it might be.
that we've talked about:But you have an ability to guilt free, get that massage and make
that we've talked about:life a little bit more enjoyable than it otherwise would be. So
that we've talked about:essentially, if you are more intentional about setting money
that we've talked about:aside ahead of time, you can add a lot more happiness to your
that we've talked about:life on a daily basis as well.
that we've talked about:The next episode was Yes, There Is TOO Conservative! And here
that we've talked about:we've really covered how paying yourself first and separating
that we've talked about:out your goals is all well and good. But if you're using
that we've talked about:inappropriate types of investments for certain goals,
that we've talked about:they may take much much longer to achieve or even worst case,
that we've talked about:perhaps you may never achieve them at all. Now we covered how
that we've talked about:the word investments I understand not soothing to most
that we've talked about:people. We don't put in many bedtime stories can be
that we've talked about:uncomfortable, scary. Anything that's really associated with a
that we've talked about:potential to lose money and maybe not fully understood or
that we've talked about:people are taught about it can kind of come out that way. So
that we've talked about:when we build the ship to sail towards our goals, there can be
that we've talked about:more of a you know, better safe than sorry kind of mentality
that we've talked about:that we see come out in people. Sure, we don't want to be
that we've talked about:reckless in the ocean and sink to the bottom of the sea. But
that we've talked about:you also want to get to where you're going before you, you
that we've talked about:know, say run out of food and supplies. We've covered how
that we've talked about:money that you need there for the next one to three years.
that we've talked about:Yes, it should likely be invested in something very
that we've talked about:conservative a bank account, almost no growth, but you can't
that we've talked about:really lose what you put into it, so to speak. Outside of
that we've talked about:that, though, using bank or cash type savings vehicles for goals
that we've talked about:that are 4, 5, 10, 20, 30 years out is almost certainly not
that we've talked about:appropriate. This is where people run into being too
that we've talked about:conservative. The one example we went through is two people
that we've talked about:saving $500 a month. If one person is invested, say
that we've talked about:moderately, and receives a 7% return. And another person is
that we've talked about:invested basically in a cash type account, and just receives
that we've talked about:1%, long term, after five years, there might not be too much of a
that we've talked about:difference. So it was about $5,000: $35,000 vs $30,000.
that we've talked about:After 20 years, it was over $120,000 though. And then
that we've talked about:finally, in 30 years, it was over a $400,000 difference
that we've talked about:ending at $610,000 vs $210,000. So too conservative can
that we've talked about:absolutely mean not hitting your goals.
that we've talked about:Next, we went through the differences between insuring for
that we've talked about:catastrophe, not inconvenience. So we covered the mentality that
that we've talked about:I would recommend when looking at which pieces of this trip
that we've talked about:we're designing and the most important to insure. What parts
that we've talked about:are worth insuring? Hull of the ship, very very important. One
that we've talked about:of the nails the ship, really not so much. So if you look at
that we've talked about:your daily life, there's certain insurances that everybody has to
that we've talked about:have. So let's say homeowners insurance, for example and that
that we've talked about:$100 a month isn't fun to pay but if God forbid, your house
that we've talked about:burns down, you don't have to come up with, let's say,
that we've talked about:$400,000 to rebuild it. That's a catastrophe scenario. On the
that we've talked about:other hand, you know, if you want to get insurance on your
that we've talked about:washing machine, you can, but that's not a catastrophe that
that we've talked about:breaks, you'll probably be able to figure it out. And the thing
that we've talked about:is, from what I've seen, many times, people tend not to insure
that we've talked about:for all the catastrophes that they should. They may insure
that we've talked about:their iPhone, but maybe not things pertaining to their life.
that we've talked about:So life insurance, disability insurance, those are the things
that we've talked about:that protect those catastrophic scenarios of losing all of your
that we've talked about:future income potential, which again, is that most important
that we've talked about:asset that a young person has. Legal documents like wills, they
that we've talked about:also kind of fall into that area. You know, it regards our
that we've talked about:kids, if you don't want to leave these areas unprotected, getting
that we've talked about:those kinds of documents are really, really important.
that we've talked about:Lastly, we finished with Diversify, But With One Advisor!
that we've talked about:Here, we covered why you've likely heard the word
that we've talked about:diversification, what it actually means, and the best way
that we've talked about:to really go about doing it in my opinion. So basically, when
that we've talked about:you look at your investments, you can either say, "Hey, I'm
that we've talked about:spread out in a way that actually reduces my investment
that we've talked about:risk", or, "Hey, I now see I have just maybe a bunch of
that we've talked about:similar stuff, but in a lot of different places". We also had
that we've talked about:our last super fun nautical example, where we said how,
that we've talked about:obviously we need to pack a lot of different things on our ship
that we've talked about:for the trip that we're taking. And one of those would be the
that we've talked about:first aid kit. You know, we're probably going to pack it with a
that we've talked about:variety of different medical items. We don't know what we may
that we've talked about:need or what we won't need. So we want to reduce the risk by
that we've talked about:packing a lot of different medical items into that first
that we've talked about:aid kit. We're essentially diversifying our first aid kit,
that we've talked about:diversifying that risk spreading out the risk. What we wouldn't
that we've talked about:do is bring 10 first aid kits that all have just gauze in
that we've talked about:them. That would not reduce the risk for our potential medical
that we've talked about:needs. And what many people think when it comes to
that we've talked about:investments is that they need a lot of different first aid kits.
that we've talked about:A lot of different accounts with a lot of different people, and
that we've talked about:they don't spend enough time making sure that they aren't all
that we've talked about:just packed with the same old gauze. Diversifying, remember
that we've talked about:means that you are using a variety of different holdings
that we've talked about:across a variety of different areas. So remember, they're
that we've talked about:small companies, large companies, U.S. companies,
that we've talked about:foreign companies, so on and so forth. Having Apple stock with
that we've talked about:Advisor 1 and Apple stock with Advisor 2 you have not
that we've talked about:diversified your holdings at all, you've really just made
that we've talked about:things more complicated. So having one person in charge of
that we've talked about:that first aid kit means one person that now has enough
that we've talked about:information to make sure that the first aid kit is well
that we've talked about:diversified, well spread out, excuse me, and well stocked for
that we've talked about:this trip. And that brings us to the end of the recap. So now all
that we've talked about:you have to do is set that compass for the new year and set
that we've talked about:sail and go at it.
that we've talked about:Now the final thing I have for you today, I want to share with
that we've talked about:you what's next what's coming up in our upcoming series. And the
that we've talked about:upcoming series title is Raising Your Investment Mindset. Now, to
that we've talked about:be honest, I usually don't like focusing a whole series just on
that we've talked about:investments. I know people like investments, it's it's one of
that we've talked about:the things that people want to focus on. But really, it's just
that we've talked about:one part of what a good comprehensive plan actually
that we've talked about:should include. The planning, the comprehensive planning is
that we've talked about:what I've seen in my 15 ish years, really, that's the thing
that we've talked about:that helps people get them to the goals they want to achieve.
that we've talked about:Now, that being said, I did think of a number of areas that
that we've talked about:I feel, you know, tend to lead people astray when it comes to
that we've talked about:investing. And that can derail their trust, which is more
that we've talked about:important than anything. And one may be having investments or
that we've talked about:using them at all, or maybe even worse, not having any plan
that we've talked about:because they don't have any trust in financial professionals
that we've talked about:anymore, that trust was eroded. And I can't have those things
that we've talked about:happen to you guys. So, so I'm going to focus this series on
that we've talked about:investments. And so again, that's raising your investment
that we've talked about:mindset coming soon. So that takes us to the end of this Set
that we've talked about:Your Compass for the New Year series.
that we've talked about:I as always appreciate you taking the journey with me going
that we've talked about:through these different episodes. You know, you enjoyed
that we've talked about:all the nautical puns for sure. But overall, I really just hope
that we've talked about:that you know, these areas that you can now take some time to
that we've talked about:review with you and your spouse can instill at least one
that we've talked about:positive change. So you're one step further to having life be a
that we've talked about:little bit more enjoyable for you, a little bit more enjoyable
that we've talked about:for your family. I always say if you can absorb all these things,
that we've talked about:implement them, fantastic. I mean, it really feels great, I
that we've talked about:mean it does me a favor, to think that I'm helping somebody
that we've talked about:out there another person in this world that I may not meet. You
that we've talked about:know, we really live in a very, very amazing time. And if it is
that we've talked about:overwhelming though, if you do have questions, just head over
that we've talked about:to my website here EnjoyMore30s.com. That's
that we've talked about:EnjoyMore30s.com. Click Ask Joe to connect and I would be happy
that we've talked about:to help. So thanks so much for joining me today and I can't
that we've talked about:wait to connect with you again in the series to come.
Voiceover Audio:The conversations on this show are
Voiceover Audio:Joe's opinions and provided for general information purposes
Voiceover Audio:only. They do not constitute accounting, legal, tax, or other
Voiceover Audio:professional advice for your specific situation. You should
Voiceover Audio:always seek appropriate advice from a financial advisor,
Voiceover Audio:accountant, lawyer, or other professional before acting upon
Voiceover Audio:any content or information found here first. Joe is affiliated
Voiceover Audio:with New Horizons Wealth Management LLC, a branch office
Voiceover Audio:of TFS Securities, Inc., and TFS Advisory Services an SEC
Voiceover Audio:Registered Investment Advisor Member FINRA/SIPC.
