The Problem with the Majority of Parenting and Investment Advice.

I read an article on the Farnam Street blog, 5 Mental Models to Remove (Some of) the Confusion from Parenting and was struck by the similarity between the common pitfalls with parenting and personal finance advice and the approaches we often take: 

 "Few topics provoke more unsolicited advice than parenting. The problem is, no matter how good the advice, it might not work for your child. Parenting is the ultimate “the map is not the territory“ situation. There are so many maps out there, and often when we try to use them to navigate the territory that is each individual child, we end up lost and confused. As in other situations, when the map doesn’t match the territory, better to get rid of the map and pay attention to what you are experiencing on the ground...

...As in any other area of your life, developing some principles or models that help you see how the world works will give you options for relevant and useful solutions. Mental models are amazing tools that can be applied across our lives."

 

Are you caught up in tactics without a clear mental model or strategy?

Many of us save a few bucks every month, stash money yearly in our kids 529s, and invest in our company's 401k plans.  All super good things to do, but will it get you to where you want to be?  Do you have a set of family goals that inform all areas of your strategy?  Here are a few of mine: 

I want my kids to be self-reliant adults who will make a difference to society.  That means I am comfortable if they fail often, as long as they win in the long run.  They play a variety of sports, play violin or the sax and arent bashful about speaking Spanish to a stranger.  If you have heard a 10 year old practicing violin, you know the sound of failure. And we save each year so they can go to sleep away camp for part of the summer, where they learn how to make friends and learn on the fly.

I want the freedom in my own life to make choices not based entirely on finances.  That means I invest part of every paycheck, whether the market is up or down, so that I can create long term wealth.  And we prioritize traveling for new and unexpected experiences.  That means Jenn and I have a weekly family budget and stick to it, even if we have to forgo some fun now.

Are you living by tactics as you go? Have you developed a set of guiding principles? If you haven't, you are not alone. Want to live free of financial burdens and have peace of mind? You'll need a strategy and a plan. I can help.  

Let's talk about your personal financial goals. Contact me to set up your free consultation.

How to Pick a College That's Worth the Expense

Picking a college is one of the most important early decisions one can make.  Its arguably the most important decision (other than choosing a suitable mate) in determining the trajectory of someones future.  Money Magazine published a thoughtful analysis on the Top 25 List of the Best Colleges that graduates are likely "able to avoid heavy debt and succeed in the workplace".

Yes, my alma mater, Ga Tech is ranked 19th!!  Tech has long been ranked one of the best values in college.  I like how this article expands the data to include the ability to quickly escape the heavy burden of debt.

Have questions on how to help your kids limit their debt burden due to college expenses?  Call or email Josh.

College Savings Check-in

In Georgia, it is back to school time. Parents, here's a handy timeline to do your own college savings check-in. Not sure how much to save? Here's a college savings calculator that I like. If you have questions about the benefits of a 529 or an IRA as the right vehicle for your family, which one to go with or if you would like a review of your existing plan for some peace of mind, schedule a call.

chamberlainfa.com

Remembering My Mom

It's my mothers birthday today.  She would have been 66 today.  She died entirely too early, though she fought cancer for 20 years--yes, twenty years.  Much longer that she was expected to live.  We had a great relationship, we shared a goofy sense of humor and spoke the same love language.  I don’t have any regrets about how things went down, there was nothing left unsaid.  She died with dignity, under the watchful eye of my little sister.  My mom's death pushed me to change my life: help friends and family to reach a level of financial freedom where dignity, not cash, prevailed in family decisions.   Chamberlainfa.com

The S&P 500 returned an averaged of 10.16%/ year for the last 30 years BUT the average S&P investor only received a 3.98% return?

How is that possible? There are many reasons, but the biggest is that the average investor doesn’t invest in their fund long enough. And that they tend to chase the "hot" fund after 3 years.

If this seems amazing and would like to explore the topic more, lets catch up.

If you understand this, but find yourself part of the group, and need some help, lets catch up. Want to learn more … read on.

Fund managers are measured against an index, such as the S&P 500. This leads to managers deploying a large % of their inv in the index and then making a small % inv in some compelling investment thesis. Based on that thesis, they invest in a "cheap" stock that they expect to catch up (value inv) or in an "expensive" stock that they expect to "pop up" (growth inv). The issue is that it takes time for either of these approaches to play out.

If your approach to reallocating your money each year, is based on switching into the top funds described by any of the standard money magazines in the December or January issues, you and I really need to spend 15 minutes together.