Can I give you some free investment advice?

Most people are doing it wrong, lost in the numbers, missing the point. This is also true for budgeting.

Some people in my industry might not want to admit what I am about to:   

Even though I am a financial advisor and planner, the most universal advice I can give about investing and budgeting is not financial.

What so many people miss about investing and budgeting is that the way we allocate our time, energy, and attention, have a tremendous impact on our use of and needs for money. 

Merriam Webster has three definitions for “invest”[i] and only one has to do with money. The second relates to investing your time. The third definition relates to investing emotionally, which of course involves a combination of time, energy, and attention. 

Money is not the only limited resource we invest, save, and spend. You invest and budget things you have limited amounts of thoughtfully now and for the future, with the hope of making the most of what you have over time. The default for most people is to be hyper focused on the money part, without necessarily considering the impact your financial habits have on your time, energy, and attention.

There is a simple mistake that is tempting to make when it comes to financial goal setting. It seems logical to pick a nice round number and try to grow your nest egg to that. Starting with a number is a trap to get you stuck in that default thinking mode that doesn’t properly consider how your time, energy, and attention are impacted.

It’s not easy to back into a number, but a number you back into by will have more utility than a nice round number you picked randomly.

Most people don’t really know how much they will need, and it can be difficult to imagine what your future self-will want. The soul searching required to get to the bottom of what you really want is tough work. I haven’t met too many people whose entire financial goal is just a number, and I have yet to meet a single person who became happy by reaching a specific number. There is no magic number.

“I think everybody should get rich and famous and do everything they ever dreamed of so they can see that it's not the answer[ii].” Jim Carey

When it comes to investing, people think of money first, and it’s easy to stop there. When it comes to budgeting, people think of money, if they think about it at all. Dollars are often distractions that can give you a myopic view of what is important to you. 

While “more money” comes to mind so easily as a goal, it’s too broad to be useful. You really want to think about what the money can do for you. How can it give you back more autonomy over your time, energy, or attention? 

I cannot overstate how powerful it can be to also track how you’re spending and investing your time, attention, and energy. 

It can be easy to overlook how interconnected each of these limited resources are. If you focus too much on just the money you might lose sight of how you’re spending and investing your time, energy, and attention. 

The media is not your friend. It is a machine designed to steal enough of your attention and time to convince you to spend money.

You only have so much time, energy, attention, and money if you can be a little more mindful of how your limited resources are connected you might be able to use them in a way that works better for you.

Photo by Mark Fletcher-Brown on Unsplash