Survivin’ and Thrivin’ — Workplace Tips

Workplace Tips — (1) Office Politics for the Good Guys

Office Politics is not a bad thing. It is a good thing. We think of Office Politics as a bad thing because the good guys don’t make use of it often enough, leaving the field to the bad guys. That’s what needs to change. The good guys need to become better skilled in Office Politics (while refusing to stoop to use of the tactics employed by the bad guys and thereby compromising our personal integrity, something us good guys all value more than we do career advancement).

To thrive in the New Economy, today’s worker needs to think of himself as a small business–You, Inc.–gaining “market share” as he progresses up the career ladder. “Office Politics” is the term used to refer to the marketing efforts each You, Inc., employs to compete with all the others.

Workplace Tips

We all have experienced bad marketing practices. So we all feel a temptation at times to dismiss all marketing as manipulative. In reality, though, much marketing serves a good purpose by making us aware of products and services that enrich our lives.

The same is true of Office Politics–the marketing arm of You, Inc. A worker who has a good “product” to sell is doing a good thing by employing smart self-promotion strategies. It is only when those who have something valuable to offer become skilled at marketing themselves that those who rely on manipulative strategies find themselves losing the edge that those sorts of strategies sometimes provide.

My hope is that in days to come the term “Office Politics” will lose its stigma and more middle-class workers will become better skilled at marketing themselves to employers in forthright and compelling ways.

Workplace Tips — (2) Creating a Positive Work Environment

Three tips for creating a respectful work environment with little gossip:

1) Make sure that there is enough work to keep everyone busy. This is a big problem in many workplaces today. There was a recent survey done in which it was shown that employees are wasting large amounts of time at work either on the internet or socializing or doing personal business. The biggest reason is not that workers are trying to get away with not putting in a day’s work for a day’s pay. The biggest reason for wasting time cited by workers was that they do not have enough to do! The old saying is that “idle hands are the devil’s workshop.” Those who do not have enough to do often end up causing trouble of one sort or another;

2) Managers’ actions speak louder than their words. Managers who engage in manipulative strategies to advance in their careers will not be believed when they urge those who work under them not to do so. Employees takes their cues from what their managers do, not what they say; and

3) The key from the worker’s perspective is to be clear on what he or she hopes to achieve with the job. If the worker is pursuing specific and motivating career advancement goals, his or her focus will be on the job. If he or she has lost enthusiasm for the job but remains at it out of fear of taking a chance on something new, his or her attention will wonder to unconstructive social interactions and intrigues.

Workplace Tips — (3) How to Make Boring Work Interesting

Three tips:

1) Focus on the people affected by a task rather than on the task itself. For example, accounting work would be considered boring by some. But the work that an accountant does helps the client achieve goals that enhance many lives (doing accounting work for a software firm helps all the people who use the software);

Office Politics

2) View the mundane tasks that make the job seem boring as steps in the solution of a puzzle. Writing and organizing hundreds of tax tips for inclusion in a database might seem boring. But the ultimate goal is to create a learning resource of great power. The worker should aim to view himself or herself as an adventurer required to engage in boring tasks like cutting through brush to attain the exciting purpose of discovering a new world (the world in which the new tax-tips learning resource is available to serve those in need of the information provided in it); and

3) Engage in enough exciting tasks in your non-work hours so that you feel that your life is not in an overall sense boring. If you go home from a boring job to watch television every night, life itself will come to seem boring to you over time. If you go home to prepare for running a marathon or to prepare for the next meeting of your book or investing club, you may come to appreciate the boring nature of the work you do as a chance not to need to become so emotionally involved for a few hours of days that are part of a life that in an overall sense is not boring at all.

Workplace Tips — (4) The Entitlement Generation

I’m 49, and I’ve been hearing some version of the phrase “the entitlement generation” since I was 20 and part of it myself. That suggests two things: (1) it has staying power, so there is some truth to it; and (2) it’s not one particular generation that is the entitlement generation–those new to the workplace just don’t possess a deep enough understanding of the rules of the game to understand how pay decisions are made.

Skill and evidence of skill are not the same thing. Those new to the workplace often have lots of skill and not much evidence of that skill. They are paid considerably less than those with more evidence of skill, and that does not always seem fair. Fair or not, that’s the way it is done. If employers had a magic Skill Indicator Machine, it would be done differently. But they don’t. So there are many young workers with high skill levels who are paid little.

One thing that the young workers who are being paid less than they think they are worth can be told to mitigate their concerns is that there will be a day when they are paid a premium for possessing evidence of skill and not just skill itself. We all find our way to the other side of the divide in time.

Workplace Tips — (5) Make Your Next Vacation a True Vacation

The best rule for making a vacation a true vacation is to have no e-mail or telephone communication with the office at all. That forces co-workers to develop new ways to handle issues that otherwise would come to your attention, and that’s healthy all the way around. If that is impossible, it can work to have one hour per day devoted to an office check-in with a rule that the time spent on office matters can never go beyond that, no matter what.

Most people are aware of the problem with checking in with the office. People need to pay more attention to the other ways in which they bring their regular routines with them when they go on vacation. One big one for me was reading newspapers. There was a time when the first thing I would do on each of my vacation days was to go looking for the Wall Street Journal and the New York Times. Let that go, and you can open up close to two hours per day of recharge time.

The key is breaking your routine. The older we get, the more drawn we are to sticking to a routine. The recharge comes from resisting that urge. You should not be reading the newspaper at the beach. You should be reading poetry, if you never read poetry. Or taking a long walk, if you never take long walks. Or talking to your spouse, if you rarely have time for long talks with your spouse. Or building a sand castle with your kids. Or flying a kite.

You should be eating foods that you don’t usually eat. You should be going to sleep at a different time and waking up at a different time. You must be spending a good bit of your time doing things you would never do at home. That’s the recharge.

How to Get Ahead at Work

I gave up television some years ago. I watch television on vacation. It wouldn’t be a recharge for most others, but it is for me because watching television is an out-of-the-norm experience for me today. The show I most missed when I gave up television was “Law and Order.” On last year’s vacation, I discovered a station that plays “Law and Order” reruns for several hours every night. I was able to watch three or four of them that week without it getting old because it had been such a long time between “Law and Order” viewings for me.

Vacation time is recreation time. The idea is to “re-create” your life. If you come home with a plan to do one thing in your regular life in a new way, it was likely a good value proposition for you to spend the money it took to arrange to take that time away from your normal routine.

Workplace Tips — (6) Workaholics

Workaholics are seeking to obtain a sense of fulfillment by directing their life energies to a field of endeavor from which they have obtained satisfying results in the past.

Success in a job can make people feel wonderful in their 20s and 30s and early 40s. There comes a time, though, when the rewards provided from a job are not as great. Most of us can rise only so high up the corporate ladder. And earning more money does not count for as much after we have earned enough to support a comfortable middle-class lifestyle.

The remedy is identifying alternate means of obtaining the same sense of fulfillment. Workaholics can apply their goal-oriented behavior to goals other than corporate success. For example, a workaholic who made it a goal to see the world could become highly focused on accomplishment of that goal so long as he or she received praise or other rewards for hitting specified targets.

The workaholic needs to see that goals that are hard to attain for others (corporate success) are not so hard to attain for the workaholic, and that goals that are easy to attain for others (enjoying family life) are hard to attain for the workaholic. The typical workaholic responds well to a challenge.

Workplace Tips — (7) How to Stand Out in a Staff Meeting

To stand out at a staff meeting, defend the employees of another department when they are being blamed for the failure of a corporate project as part of an effort to shift blame away from your own department. Most employees see the unfairness of “The Blame Game” and make note of someone who speaks up against it for having the courage to do the right thing.

This works best when the need to shift blame to another department is not that great because the project that failed was not of great significance. It is not strategically smart to employ this approach in circumstances in which your own department messed up in a major way. In those circumstances, some in the group will react with hostility at attempts to give voice to the realities in a staff meeting.

Workplace Tips — (8) Write Your Way to the Top

Most jobs today require writing. Write better, and you’ll move ahead in your career quicker.

The five ingredients of good writing are:

1) Focus. Any piece of good writing (no matter how long) advances one core idea.

2) Usefulness. People don’t read for the sake of reading. Good writing provokes some sort of action or change.

Getting It Done Right

3) Clarity. Good writing is simple and direct.

4) Authenticity. Good writing is supported by believable illustrations of the ideas put forward that come naturally to the author because the extent of his study or experience relating to the topic is great enough to give him the confidence to be himself.

5) Authority. The author needs to know a lot more about the topic than what he or she reveals in the piece of writing at issue to be able to win the confidence of his or her readership.

Workplace Tips — (9) Small Talk Tips

Four tips on what to say when you need to say something and there’s nothing that needs to be said:

1) Understand that you are doing the other person a favor by “breaking the ice” and engaging in small talk. In the sorts of circumstances in which small talk is called for, both parties are seeking to engage in some sort of social interaction. Just about everyone feels awkward doing this. The odds are good that the other party to the conversation will feel gratitude to you for taking a chance at getting the conversational ball rolling;

2) Make your first move with your second move already planned. For example, you could ask “Do you have vacation plans this summer?” You should be prepared to discuss your own vacation plans in the event that the other party responds by saying “No, I don’t” or “No, do you?”;

3) The ideal thing is to get the other person talking because as he or she talks he or she will become more comfortable. So don’t ask questions for which it is likely that you will be required to employ your Step Two. Most people have something to say about vacations, so asking about vacations is a good conversation starter. Asking about classical music is not a good bet unless you pick up some clue that the other party to the conversation has an interest in it;

4) Be a little bold. There are good reasons why the conventional wisdom is to avoid discussions of religion and politics. But you want to avoid the cliché of commenting on the weather if at all possible. Talk about an experience that you had recently that was a bit out of the ordinary or express an opinion that is not likely to offend anyone but which is a little off-center. Small-talk conversations are not the place for truly bold statements. But it usually takes a statement with at least a little bit of life to get them started.

Workplace Tips — (10) Indirect Communication of Criticism

Making It Happen

ou might someday find yourself in circumstances that call for use of the indirect communication of criticism.

Say that a customer service department employee is rude in her handling of calls from customers. You might observe in a staff meeting that: “I have heard a lot of praise of our customer service operations. In fact, the majority of the comments I have heard have been positive.”

The thought is planted in everyone’s mind that you must have heard some negative comments as well.

If anyone asks about the negative comments, you should respond with some reluctance but also supply some facts that permit follow-up. You could say: “Oh, there are always a certain number of customers saying that they get rude responses and so on, but my point here is that most of the comments I have heard have been positive.”

If there are higher-ups in the company concerned about providing good customer service, they will follow up and you cannot be faulted for having identified the problem. If there are no higher-ups concerned about providing good customer service, the reality is that you probably were never going to get anywhere trying to solve this problem in any event.

The Taboo on Talking About Money Hurts Us

The Taboo on Talking About Money Hurts Us Because We Learn through Conversation.

Take an opinion survey on how it is that people learn and my guess is that the most popular responses would be “by taking courses” and “by reading books” and “by experience.” I believe that the single most important way in which we learn is by talking things over with others. We don’t feel confident about what we think we learned from a course or a book or an experience until we talk about it and get feedback on what we say. Conversation is the best teacher.

Talking About Money

Most of us have taken at least one course that has something to do with money and most of us have read a few books on the topic and most of us have some experience with money. But how many of us regularly talk about what we learn from these other sources of knowledge?

We talk about how the price of gasoline has soared lately. But we don’t talk about the important questions: How much of our pay should we be saving?; Are stocks as safe as the “experts” are telling us?; Why are we taking on so much debt even though we earn more than our parents or grandparents did?; Does it make sense to pay off the mortgage early?

Talking about money is taboo. Get involved in serious discussions of money topics and you might reveal to your friends how much you earn or how much wealth you have accumulated. That can inspire envy. Or you might make yourself look foolish because of the things you spend money on or because you don’t possess a firm grasp of the basics of how stock investing works.

There are good reasons why talking about money is taboo. We pay a big price for keeping the taboo in place, however. Talking about money more openly would allow us to rein in wasteful spending. Talking about money would allow us to develop greater confidence in our investing strategies. Talking about money would help us to determine whether paying off the mortgage makes sense or not.

The Taboo on Talking About Money Hurts Us Because We Must Put Ideas Into Our Own Words to Develop Confidence in Them.

Thoughts don’t travel from the pages of a book to your eyes and then into your brain. It is by giving voice to new ideas that we come to understand those new ideas. If you cannot repeat something you have learned, you probably do not understand it well. If you do not give voice to new money ideas, it is not likely that they will remain in your memory for long enough to inspire a change in behavior.

I am reminded of the importance of putting ideas into words on a daily basis, when I construct posts that I submit to the Retire Early boards. Discussion-board threads are conversations. Writing a post is a form of speech. Every post I write solidifies my thinking on the topic being addressed. When I fail to engage in discussions of my ideas, they disappear from consciousness, like an unrecorded dream. It is by talking about money that we learn about money. It is by talking about money that we remember what we have learned about money.

The Taboo on Talking About Money Hurts Us Because the Information Vacuum Is Filled by Misleading Visual Money Messages.

Money Concerns

It is human nature for us to compare ourselves with our peers. If you see a fellow who you went to school with driving an expensive car, there is going to be a voice in your head saying “you should have such a car too.” If you knew that a fellow you went to school with had saved $100,000 in his first five years out of school, there would be a voice in your head saying “you should have saved $100,000 in your first five years out of school too.”

We don’t need to engage in talking about money to learn that a friend is driving an expensive car. We can see the car. But if we don’t engage in talking about money, we are unlikely ever to learn that a friend has saved $100,000 in his first five years out of school. Spending communicates itself visually in a way that saving rarely does.

We see the benefits of spending everywhere we turn. That makes us want to spend. We rarely see the benefits of saving. That weakens any desire we possess to save. If we engaged in more talking about money, we would be better able to assess effectively the pros and cons of spending and saving decisions.

The Taboo on Talking About Money Hurts Us Because It Is Only Through Conversation That We Can Obtain Truly Customized Money Advice.

We like money because it enhances our enjoyment of life. We all have a particular vision of what constitutes The Good Life. The best money advice is customized money advice.

Conversation yields customized advice in a way that courses and books never can. When you engage in talking about money with your friends, you obtain feedback on the particular money topics that are of greatest interest to you. Give that up out of concern over the taboo on talking about money, and you give up a lot.

The Taboo on Talking About Money Hurts Us Because We Miss Out on Stories of Money Successes and Money Failures.

The Millionaire Next Door is a wonderful book because it reports on an important truth that few suspected before that book came along. Most millionaires don’t live in huge houses. Most millionaires don’t drive sports cars. Most millionaires don’t dress the part. It’s spenders that do those sorts of things, and few spenders become millionaires. You become a millionaire by saving. Savers care most about buying freedom, not houses and cars and clothes.

Why didn’t we know that?

It’s because for years and years we weren’t talking about money with friends. You probably have a friend who is a millionaire but who you don’t suspect of being one because you don’t often engage in intimate money conversations. If it were not for the taboo on talking about money, we all would know who the millionaires are and we all would be having conversations with them and be learning from them.

The Taboo on Talking About Money Hurts Us Because We Miss Out on Non-Conventional Money Ideas.

Money Problems

We rely on the media for most of our money information. That’s fine up to a point. But the learning experience that can be obtained from the conventional media is a limited learning experience.

When a magazine editor is putting together a cover article, she is aiming to attract lots of eyeballs to the page. That means that she is searching for lowest-common-denominator advice — advice that appeals to everyone and that offends no one. The most powerful money ideas are often ideas that do not appeal to everyone and that offend a good number of ones.

Those sorts of ideas are life-changing ideas. Those ideas need to come in through a back door. Those are the sorts of ideas that usually catch on by word of mouth. Those are the sorts of ideas initiated by a group of people sitting in a room together talking about money. It is through human conversation that powerful ideas are born and it is through human conversation that powerful idea are spread.

The Taboo on Talking About Money Hurts Us Because It Makes Us Dependent on the Views of Dubious “Experts.”

Today’s investing advice stinks. There’s no softer way of putting it that is accurate.

Why? Why can’t we do better?

The biggest problem is that middle-class investors are intimidated by “experts.” They hear many experts saying one thing, and they are not willing to trust the voice of common sense telling them a different message. Why are we so intimidated? Because we don’t have confidence in our own money beliefs. Why do we lack confidence? Because we don’t engage in talking about money with friends.

Conversation frees us. It permits us to check out new ideas, to test our skeptical reactions before putting them forward in public and risking the embarrassment of being wrong on a large stage. Conversation is liberating. The taboo on talking about money renders us dependent on “experts” who do not necessarily see it as their primary objective to advance our best interests.

The Taboo on Talking About Money Hurts Us Because It Is Often By Speaking Our Fears Aloud That We Gain the Courage to Deal With Them.

Feelings matter more than facts when it comes to dealing with money issues. If you want to become a more effective saver, you need to work through the emotions that are holding you back from doing so. You cannot work through emotions by reading a book or attending a speech. This is why so many turn to financial advisors to help them deal with money problems. People sense their need for hand holding as they do combat with their money problems.

Money Troubles
Financial advisors get paid a lot of money for assuming these hand holding duties. And they do not always give the best possible advice. Sometimes that’s because they are compromised by having goods and services to sell. Other times it is just because they do not know the people they are trying to advise well enough.

Our friends know us well. And our friends have our best interests at heart. We should be talking about money with our friends a lot more than we do. They have the ability to give us what we need to deal with the emotions attached to money problems and wouldn’t think of charging a big hourly fee for doing so.

The Taboo on Talking About Money Hurts Us Because We Don’t Adequately Explore the Implications of Our Money Beliefs.

Learning doesn’t come about in a flash. That’s why books can never do the complete job and speeches can never do the complete job and even personal experience can never do the complete job. We learn in stages, little by little, bit by bit.

Talking about money permits this learning process to unfold naturally. You learn something about money and you talk with your friends about it. Then, a few months later you are in a position to build on the earlier insight, and you talk with your friends about it a little more, focusing on a different angle. It’s a good idea to consult books and listen to speeches to get started thinking about money. Nothing beats talking about money for coming to terms with the full implications of a fresh money management insight.

The Taboo on Talking About Money Hurts Us Because We All Need Reassurance When Our Strategies Come Into Question.

Why is it that the communities that congregate on internet discussion boards are sometimes reluctant to permit the voicing of new ideas? One big reason is that many use discussion boards not to learn but for affirmation of ideas already held.

Say that you are following a buy-and-hold investing strategy. There comes a time when the market is behaving in such a manner as to cause you to feel doubts about the ongoing wisdom of your stock allocation decisions. What you most need in such circumstances is a group of like-thinking people to tell you why you made your decisions in the first place and to tell you that everything is allright and that you just need to firm up your courage to stay the course. A discussion board at which a good percentage of the community follows a buy-and-hold strategy provides this.

Money Peace

That’s the power of talking about money. Books tell us the benefits of buy-and-hold; talking about money supplies the reassurance needed to make it happen in the real world. Speeches explain the benefits of saving; talking about money permits the back-and-forth that expands the good idea into a workable plan that inspires changes in human behavior.

The taboo against talking about money has been around for a long time. It is a strong force. We’re not going to overcome it overnight. We do need to begin work tearing down the wall. It holds us back in our efforts to attain financial freedom early in life.


Restaurant Tipping Tips — How Not to Impress Your Date

Restaurant Tipping Tip #1

If you make your tip a percentage of the bill, you should apply a much lower percentage to the portion of the bill that covers alcoholic drinks since the markup on alcoholic drinks in restaurants is so high.

Restaurant Tipping

Restaurant Tipping Tip #2

The “standard” tip percentage has increased over time. It used to be 10 percent. Then it became 15 percent. Now sometimes one hears that the tip should be 20 percent. The amount of tips should of course be increasing over time to cover inflation. But there is no good reason why the percentage figure should be increasing. This has generally been happening because times have been good and people feel freer with money. You’re not being “cheap” if you resist tip-percentage inflation. You are being cheap if you still tip the same dollar amount as you did “in the old days,” however.

Restaurant Tipping Tip #3

Part of the reason why restaurant service is paid through tips is that service is an important part of the restaurant dining experience and giving control of the payment for this service to the diner is a good means of insuring that good service is provided. So it is proper to tip better when service is good and less when it is bad (some people feel funny about this). But it is extreme to leave a zero tip or an insignificant tip. In cases in which service is so bad that you feel justified in leaving a zero tip, you should be talking to management. In these sorts of cases, the problem is more than a problem with one particular waiter or waitress.

Restaurant Tipping Tip #4

Your date will notice how much you tip. Properly so.

Restaurant Tipping Tip #5

The fact that your date will notice how much you tip does not mean that you should always be exceedingly generous with tips when on a date. Your date wants to know that you are charitable, so generous tipping is a plus. Your date also wants to know that you have enough self-confidence not to feel a need to impress her or him with such tactics. Going overboard can backfire.

Restaurant Tipping Tip #6

How Much to Tip You should provide a reasonable tip even in restaurants that you do not ever expect to visit again because you are only traveling though the town in which they are located. But it makes obvious strategic sense to tip more generously at restaurants you expect to dine at frequently.

Restaurant Tipping Tip #7

Sometimes, you cannot afford a big tip. If that’s the case, that’s the case, and you shouldn’t feel bad about it. If you order the most expensive item on the menu, though, and then try to persuade yourself that you are not leaving a suitable tip because you cannot afford to do so, it’s not going to work. You should take the need to tip into account when deciding what to order.

Restaurant Tipping Tip #8

When dining with a group, do not fuss over the amount of the tip. In these circumstances, the most important thing is to avoid social friction. Include an extra big tip as part of your contribution to the cost of the meal to cover for someone who doesn’t come up with his or her share. Don’t sweat the small stuff.

Restaurant Tipping Tip #9

The rule in #8 holds even more when someone in the group took on the task of calculating each person’s share and you ended up being the last person to contribute and you see that the waiter or waitress will be stiffed if you leave only your fair share. If all of the calculations have been made, you should put in something extra to make it work, even if that is not an entirely “fair” result. This does not apply, of course, if it appears that the initial count was wrong by a large amount. Make a fuss only if you are talking about a big number.

Impressing Your Date

Restaurant Tipping Tip #10

There’s power in determining how much to tip. Don’t let the power go to your head. Yes, you want to tip less when service is poor. But don’t start thinking that it is your job to “punish” waiters or waitresses who don’t do a good job. Make your little “statement” and let it be.


Six Unconventional Mid-Life Career Change Tips

Mid-Life Career Change

Set forth below are six unconventional tips for making a mid-life career change. Please read all six, and, if at the end of the article you are convinced that the key to a successful transition is the integration of life, work and money goals, please check out the other articles on the Passion Saving approach to money management offered at this site.

The first unconventional mid-life career change tip is to understand that each day you remain at a job you don’t love because the money is good you fall farther behind on your long-term quest for financial freedom.

Making a mid-life career change is a lot harder than making a career change when you are young. You’ve got a lot more to lose because you have already worked your way a good bit up the ladder of success at the career you are in today. I’ve known many people who remained in jobs they didn’t like longer than they should have because the job seemed “good enough.”

That’s often a mistake. When workers are forming an assessment as to whether a job is “good enough,” they usually focus on whether the pay and benefits are good. That sort of analysis passes over the most important matter at issue.

Your financial compensation is only part of the total pay package you obtain from the work you do. More important in a long-term sense is what you learn from doing the job. Think of yourself as a company named “You, Inc.” Your paycheck represents your day-to-day profits. The skills you develop are the result of your long-term research and development project. A company that ignores research and development because today’s profits are acceptable is a company with a dim future.

If you are missing out on the learning experience that is part of the typical middle-class worker’s complete pay package, you are missing out on something of great significance. Most of us are only in the workforce for 40 to 45 years. So, if you pass up five years of learning while you stick with a “good enough” job, you are falling behind in a big way.

Don’t let the financial risks of changing jobs cause you to stay too long at a job that no longer offers much long-term excitement or potential. The financial risks of staying at a job where you are not continuing to learn are often greater than the financial risks of making a well-planned move to something you enjoy more.

The second unconventional mid-life career change tip is to not take the “Do What You Love and the Money Will Follow” maxim too seriously.

There is a good bit of wisdom in the “Do What You Love” maxim. It really is true that the most financially rewarding jobs go to those doing work that so motivates them that they possess the energy to become the absolute best at what they do.

All that said, the “Do What You Love” maxim does not address a critical consideration that you must take into account when planning a mid-life career change. When will the money follow? If you don’t get a reliable income stream in place in time, you might not be able to stick it out long enough at the new career to see the benefits of doing what you love ever generate real-world financial profits for you.

It is a good idea to aim to do what you love. But knowing what you love and developing the courage to chase the dream is not enough. You need to have a plan in place before making a mid-life career change. Not just a career plan. You need a financial plan to protect you from the downside risks you take on in making such a dramatic life transition.

The third unconventional mid-life career change tip is to focus not on work issues but on money issues.

There are lots of work issues that need to be taken into account in putting together a plan for a mid-life career change. You need to take tests to learn what sorts of things you are best equipped to do. You need to talk to people now working in the career you hope to enter to see whether jobs in that field are as enjoyable to those on the inside as they appear to be to those on the outside. But no matter how much you do of that sort of thing, you have not done enough to take the risk involved in handing in a resignation from your current job in pursuit of a mid-life career change.

Career Change at 40

Doing that sort of thing is not enough because, no matter how much you plan, you will never be able to anticipate every possible future development that will affect your job satisfaction years down the road. Jump to a new career without putting a financial plan into place to smooth out both the current and future transitions, and there is a good chance that a few years down the road you will be back in the same sorts of circumstances that caused you to want to make the first mid-life career change.

Even career changes that are successful in the short-term are often not so successful after a number of years pass by. You must explore new career options if you are dissatisfied with the career you are in today. But you must also accumulate the financial resources that will open up options for future changes. Otherwise, you may find yourself five or ten years from now as dissatisfied as you are today but also five or ten years older. Not good.

The fourth unconventional mid-life career change tip is to understand that the real reason for your job dissatisfaction lies within.

It’s not a bad boss that caused you to tire of your current career. It’s not a bad corporate culture. It’s not a bad economy. It’s you!

I’m not playing a game of “Blame the Victim” here. I understand that there are lots of bad bosses out there, and lots of bad companies, and lots of bad economies. There are of course outside forces that play a role in causing you to be dissatisfied in your career. But those outside forces are not usually the primary factor in causing job dissatisfaction, and it is important for you to understand what the primary factor is if you hope to pull off a successful mid-life career change.

When I say that you are the primary cause of your career dissatisfaction, I am not saying that there is something “wrong” or “bad” about the way you feel about your current career. To the contrary. It is natural and good to feel dissatisfaction about a job after you have been in it a number of years.

Career Change Mid-Life

God created us with a desire to learn and to grow over time. It is that desire that is causing you to become dissatisfied with a career that no longer provides the challenge it once did. The surprising thing would be if you never felt a need to pursue a mid-life career change.

The fifth unconventional mid-life career change tip is to be wary of quick solutions to the problems causing your feelings of dissatisfaction.

The biggest pitfall to changing careers is that the same frustrations that caused the worker to tire of the career she is leaving will cause her to tire in time of the career she is starting. The common pattern is comprised of three steps: (1) the work is new and thus presents a challenge; during this phase the work is hard but fulfilling; (2) the worker has learned enough to be less anxious but is still learning more; this is the most enjoyable of the three phases of the typical career progression; and (3) the worker has mastered the work and becomes bored with it.

It makes perfect sense to seek a new career after mastering an earlier one or finding that one is not suited for the earlier one. The pitfall is that there is a good chance that the old frustrations will recur, this time when the worker is older and has fewer fresh-start options open to her.

The better approach is to gain over time a level of financial independence that lets one call the shots to a greater extent than the typical employee. This might mean starting one’s own business or joining a start-up company (that one could not otherwise afford to take the risk of joining) or entering a career that offers more challenges than most (and thus provides a more satisfactory long-term level of fulfillment than most). It is by reducing the extent to which one needs to work for money that one obtains the best possible long-term assurance of being able to spend one’s time doing soul-satisfying work.

The sixth unconventional mid-life career change tip is to see that what you really need is not career planning alone, but a combination of career and financial planning.

Financial planning by itself does not work. For most of us, the idea of accumulating lots of green pieces of paper with pictures of government buildings on the back supplies little motivation. Thus, most of us say that we would like to get around to saving effectively someday, but few of us actually feel inspired enough by the project to follow through on what we say.

Career planning by itself does not work. An individual worker simply does not have control over enough of the factors that determine job satisfaction to be able to put together a plan for career change that stands a good-enough chance of solving the problems that are the cause of his dissatisfaction with his current job.

What does work? Career planning combined with financial planning. Build a nice nest egg, and you gain a level of control over your future career decisions possessed by few of today’s middle-class workers. Acquire a higher level of financial freedom, and all sorts of exciting possibilities open up to you. It won’t matter too much whether one particular new job you choose ends up being the right choice for the long-term or not. Those who gain significant levels of financial freedom early in life enjoy more opportunities than most others for ever more regardless of what happens with their boss or their company or the economy.

How Do I Change Careers at Mid Life?

The other side of the story is that starting to save not to finance an age-65 retirement but to open the door to exciting new ways to make your mark on the world through the work you do can transform your attitude toward saving overnight. I have spoken to hundreds of middle-class workers in the Financial Freedom Discussion-Board Community who save percentages of their income that most other middle-class workers view as beyond the reach of mere mortals. Some members of our community save not 10 percent of their pay, but 20 percent. Some save not 20 percent, but 30 percent. Some save 40 percent. Some save 50 percent.

How do we do it? We aren’t saving to finance an old-age retirement. We are saving for some form of “early retirement.” We employ a number of different definitions of that term, but our common goal is to enjoy the benefits of financial freedom well before we turn 65. 

Many of us began saving in this different and more effective way because of dissatisfaction we felt about jobs we were in. It could be that your job dissatisfaction will prove to be your ticket to a better way of both managing your money and managing your career too. The power of this new approach comes from the integration of life, work and money goals that is its defining characteristic.

Yes, you need to change careers. But you might want to slow down in your implementation of the plan and make sure that the solution you come up with is one that will serve you well for a long time to come. To make a successful mid-life career change, you need not just a job-change plan, but a money-change plan too.

What you really need is a Life Planin which you put your savings to use helping you achieve your most important work goals. Use the motivation you feel today as a result of your dissatisfaction with your current job to drive your future saving efforts, and the next time you feel a need to make a mid-life career change (and there is a good chance that there will indeed be a next time), you will be in far better shape to pull one off quickly and successfully.

Yes, you need to change careers. But you might want to slow down in your implementation of the plan and make sure that the solution you come up with is one that will serve you well for a long time to come. To make a successful mid-life career change, you need not just a job-change plan, but a money-change plan too.

What you really need is a Life Plan in which you put your savings to use helping you achieve your most important work goals. Use the motivation you feel today as a result of your dissatisfaction with your current job to drive your future saving efforts, and the next time you feel a need to make a mid-life career change (and there is a good chance that there will indeed be a next time), you will be in far better shape to pull one off quickly and successfully.

Life Planning Tips

Life Planning Tips Item #1 — That Summer Feeling

Jonathan Richmond wrote a song by that name. I thought it was a great title because it is evocative of something that we all have experienced but that most of us have not put a name to.That summer feeling is the feeling you have when you are eight years old and there are no limits to what you can do with your life. When you experience that summer feeling, life is a giant groove waiting to be experienced.

Life Planning Tips

We become more skilled over time, we become smarter over time, we become wealthier over time. But we often lose access to that summer feeling. It’s not something that you should expect to be able to feel all the time. But I think you are missing out on something important if you never experience it anymore.

You can’t remain stuck at age eight, of course. The things that excite you change with time. To reexperience that summer feeling, you need to go looking for it in different places.

When you are in your 20s, you get that sort of feeling when you develop a crush on a new love interest. But what then? How do you gain access to that summer feeling in your 30s, your 40s, your 50s, and your 60s?

Through the work you do.

That’s why it’s a mistake to work solely for money. You need to work for money at some stages of your life. Most of us are not lucky enough to be able when we are young to earn all the money we need to live doing work we absolutely love. But you should be striving to spend a larger percentage of your time doing work you love as you age.

As you age, you attain higher levels of financial freedom, and attaining higher levels of financial freedom should translate into gaining the freedom to spend more of your time doing work you love. During those hours when you are engaged in the tasks that you were put on earth to do, you enjoy a grown-up version of the emotion that Jonathan Richmond was describing in his song. All the walls fall down. The room is filled with light. Work becomes play.

Life Planning Tips Item #2 — What’s Your Passion?

Ten questions that can help in identifying your passion:

1) What toys did you most like to play with when you were young, and what feature do most of them have in common?

2) What sorts of success stories cause you to feel pangs of jealousy or regret?

3) If you turn off the television, put down the newspaper and any magazines you keep around the house, and take the telephone off the hook, what is it that you are drawn to do with your time?

4) What job assignment that you have worked on in the past six months did you get most excited about?

5) Imagine that you were your best friend and that you were trying to cheer yourself up because you were feeling down. What would you point to as the trait you possess that is most unique, most you, most important, most likely to make a difference?

6) What is your favorite song? What is your favorite movie? What sorts of jokes do you like? What is it in the mix of answers you give that makes your answers different from the answers to these sorts of questions that would be given by most others?

7) What was the first job you looked into when you finished school (regardless of whether you obtained the position or not)?

8) If you won $20 million in the lottery, what would you do with your time?

9) What sorts of articles do read first when you pick up a newspaper or magazine?

Just Do It

10) What nicknames have friends used to refer to you by? Why did they choose the ones they did over the hundreds of other possibilities?

Life Planning Tips Item #3 — “I’ve Been Awake in the Middle of the Night A Lot Again Lately…

…because a few weeks ago I started down an unfamiliar road.” So says Lisa Belkin in her “Life’s Work” column in the New York Times.

I very much related to Belkin’s story of how she worried about making mistakes in her articles when she started as a reporter. It used to be my job to find out what changes in the tax law were being placed into tax bills in those closed-door meetings where much of our most important legislation is written. I wrote for a daily publication, and it often wouldn’t be until 30 minutes before my deadline when I would learn the news that I needed to write up as my day’s work. That meant pushing the button before I had a chance for too many reviews of what I had written. There were occasions when, an hour or two after I got home from the office, the thought would pop into my head: Did I phrase that the right way?

The title of the column is “The Motivating Power of Fear.” I like it that Belkin takes something bad and points out the good side of it. No one would deliberately put herself through the sort of stress that she describes feeling when she stretches herself to rise to a new level of achievement. The reality, though, is that it is in conquering the fear that you know you have done something important. Belkin got over her worries about making mistakes in her articles and I got over my worries about mistakes I might make when forced to turn out copy quickly. We sharpened new skills, and, by doing so, overcame the fears that we experienced at the time when we were not confident in our use of those skills.

The other important point made in the column is that the fear itself never really goes away. As you learn new skills, the things that provoke fear change. But there is always some new skill that you need to learn, so there is always some new fear to be conquered. If you ever get to a point where you feel no stress at all, it will probably be because you’re dead.

Manageable stress is a good thing, compared to the alternative.

Life Planning Tips Item #4 — “In a Maybury World…

…there would be much less pressure to retire early.” So argues a poster going by the name “Mountain Mike” in a thread at the Early Retirement Forum examining whether it is changes in the unwritten contract between employers and workers that have caused so many of us in recent years to begin looking for a way out.

A number of great points are made in the early portion of the thread:

1) The workplace has always been a place of struggle, but in recent decades there are places where the heightened level of competitiveness has turned the workplace toxic;

2) It’s not entirely the fault of any particular bosses or any particular companies. Bosses and companies are feeling pressures too that are forcing them to adopt policies that de-emphasize the human side of the work arrangement;

3) Regardless of whose fault it is, it is only natural that smart and successful people are in time going to catch on to the reality that the game being played in the new workplace is a game that few can ever really win in a permanent sense. So they are going to begin a quest to take matters into their own hands by developing higher levels of financial security and thereby creating richer and more interesting work games to occupy their time and energies; and

Don't Let the Bad Guys Get You Down

4) The same factors that are causing the problems also point the way to the potential solution. The problem is that super-competitiveness is placing strains on families and individual workers who want a life outside of the office as well as the opportunity to experience the satisfaction that comes from facing up to a work problem and overcoming it. The other side of the story is that competitiveness has increased the size of the paychecks received by many of the workers living in today’s industrialized economies.

Save a portion of your Productivity Bonus, and you might be able to buy your ticket out of the craziness and into a life of soul-satisfying work. Fail to save, and you leave yourself at risk of being crushed by the relentless push to do more, more, more work in less, less, less time.

Saving is not something you do just to provide for your old age. Saving is something to do to enhance your enjoyment of life in all the years to come before you turn 65 as well.

Life Planning Tips Item #5 — Hammering Nails Into a Life Plan

Last Wednesday night my boy Timothy asked me whether wood would float on water. I said that it would.

On Thursday he had a follow-up question: Would wood float if it had a person on it? I explained that this was the idea behind a raft.

On Friday, I noticed that there were several pieces of wood nailed together sitting on our porch. I asked my wife about it. She explained that Timothy had decided to build a raft that he could float on the next time we took a visit to a nearby creek.

I explained to Timothy that the raft he had built was not large enough to hold a person. I said that it might be large enough to hold a stuffed animal.

On Saturday morning, I saw Timothy at work hammering nails into new pieces of wood to make his raft larger.

Timothy loves his work.

He doesn’t love all work, of course. He doesn’t love having to pick up his toys before he can watch Scoobie-Do.

But he loves doing the work that something inside him tells him he was put on earth to do.

This is true of all of us. Work is not by its nature fun or not fun. There are some forms of work that are no fun at all. And there are some forms of work that are lots of fun.

Over the course of life, you should become more free to be able to do the work you love rather than the work you must do to put food on the table. Why? Because you become more skilled and have more to offer the world. So you should have more options. And because you should have more money saved and thus be less dependent on a paycheck to cover your costs of living.

That’s the way things should work. However, it’s not the way that things work for most people following the Sacrifice Saving approach to money management.

That’s why we all need to work together to learn how to build ourselves strong and steady and long-lasting rafts–er, I mean Life Plans.

Life Planning Tips Item #6 — What Are You Going to Be When You Grow Up (Again)?

For most of mankind’s time on this planet, the idea of not working was not an option. It’s only since the 1930s (when Social Security was enacted) that middle-class Americans have aimed to leave the world of work behind when they turned 65. The Productivity Bonus we have enjoyed in the decades since has put us in a position where there is now a web site (this one!) that informs people of strategies for winning complete financial freedom in their 50s or 40s. It’s a big change that requires a rethinking of lots of things we once took for granted.

A New Day, A New You

You don’t have to work to keep body and soul joined anymore. Not if you don’t want to. Not until you get old. You can do other things. You can read. You can have long conversations with friends. You can putter around the house. You can sleep in.

Can you work?

That’s a question that comes up a lot in Financial Freedom Community conversations. There’s a split in our community re this one. Some think that the purpose of gaining financial freedom should be to escape work altogether and that to engage in any activity that can be done for money after you achieve financial freedom would ruin the experience. Others (I’m in this camp) argue that work you do primarily because you enjoy it and not because you need the bucks is one of the great joys of life.

I think gaining financial freedom early in life is wonderful. I think making use of your financial freedom to make a shift to doing the work you truly love is wonderful too. I never even imagined not working after my “retirement” at age 43.

Whenever I hear someone denigrate the idea of work, I think of Bob Dylan. This is a guy who does not have to work for money. Yet he maintains a touring schedule in his 60s that I don’t think I would want to have handled in my 20s. The guy is tough. The guy has a serious work ethic. The guy loves performing songs for people.

I once read an interview in which a friend of Dylan from a long time ago said that he has held this work ethic for a long time. The person being interviewed said that Dylan told her in a conversation from decades back that she should never stop working. There was no explanation given for this advice in the interview, and my guess is that Dylan didn’t give one. It’s something that he had come to believe and he was just passing along the advice without feeling a need to explain why he felt that way.

Why did he? Why would someone advise a friend to never stop working even if she didn’t need the money? Because work is part of what we are, work is something that defines us. If we stop working altogether at an early age, there is likely going to be a price to pay.I don’t see that there is any need to work for money until one gets old. I think that volunteer work can give life a sense of purpose. So can raising children. So can pursuing hobbies if they are pursued with diligence and determination. So can lots of other things. But I do believe that we all need to direct our lives to a purpose.

Most have their purpose imposed on them from the work they have to do to support themselves financially. Those of us who win financial freedom early in life need to think through the question carefully, and come up with a later-in-life answer to the question “What are you going to be when you grow up (again)?”

Life Planning Tips Item #7 — Financial Stress

Three tips for overcoming financial stress:

1) Set a goal that can be achieved in a small amount of time (within a month) and make certain to check as to whether you have achieved it within that time. For example, your goal could be to save $100. Saving $100 will not in a monetary sense change your life. The feeling of empowerment you will gain from seeing a practical demonstration of what you are capable of may make a big difference;

2) Start a budget as a means of gathering information about what is causing the stress. Many people hesitate to start budgets because they see them as exercises in self-denial. But the primary benefit of a budget is the information it provides about where the money is going. Set up a budget not to cut spending, but just to learn where the money is going. Knowing where the money is going will help you overcome the stress because you will know what you are up against. Down the road, you will turn to spending cuts. The important first step is just to gather information; and

3) Focus on recurring expenses. Most of us devote more energy to examining the pros and cons of a large one-time expense (a new television) than we do to examining the pros and cons of small regular expenses (coffee at Starbucks every morning). It is often the small regular expenses that eat up the buying power we win through pay raises. It is only by focusing on the effect of recurring expenses that we can begin to see benefits in terms of reduced stress from pay raises. If each pay raise translates into more spending, stress increases rather than diminishes as pay increases (because we use each pay raise as a rationalization to spend more and feel more worry about whether we will be able to keep bringing in that amount of money).

Life Planning Tips Item #8 — The Informed Gut

Ride the Waves

I opened a fortune cookie the other day and learned that: “The greatest thoughts come from the heart.” That’s so. That’s very true!

I am a methodical person. Sometimes I think too much. I will go over something again and again in my head before committing myself to action. I am cautious by nature. I like to avoid false steps.

I am also rash. There was a poster on a discussion board who said that I had an unfair advantage over those who took positions contrary to mine because I am able to type so fast. I thought that was very funny. I type with two fingers. I type loud. I bang the keys, especially when the topic being discussed is one that hits me in a deep spot. But I very much hope that there are a good number of posters out there able to type quicker than me.

The reason I am able to turn out responses quickly is not that I type fast. It is that, when I am talking about a subject I care about, I have usually thought about it a lot before posting and can generate a response lickety-split. I often don’t feel a need to engage in lots of new thinking when preparing the posts I put to discussion boards. I let them fly.

So which is it? Am I a Nervous Nelly or a Dangerous Dan? I’m both! I like to think things through before entering a dark cave. But once I enter, I rush through. I figure there’s no sense hanging around in the darkness worrying about what is going to happen more than necessary. My motto is: “Think Before You Leap, But Once You Leap, Leap For Good.” Think first. Then go with your gut.

The thoughts that I generate by means of this Informed Gut Approach to decision-making are at least a decent percentage of the time good ones, in my assessment. When I rely on thinking alone, or on gut alone, I don’t feel as comfortable with the decisions I make. The best thoughts really do come from the heart. That’s a neat way of putting it. Good fortune cookie!

Life Planning Tips Item #9 — Patience

Human beings rarely live entirely in the moment. We live in part in the past (with regrets or good memories) and in part in the future (with anticipation or dread). Patience is a means of highlighting the good side of living partly in the future by experiencing a part of the joy to be had from future life in the here and now, thereby diminishing the desire to rush forward to actual experience of the future moment.

It All Works Out in the End

The best way to cultivate patience is to learn to enjoy anticipating something almost as much as having it. A non-patient person might see something dismal in the fact that his next vacation is twelve months off in the future. A patient person would see the wait as an opportunity to plan an itinerary, to look through brochures, to think about what activities to pursue on the vacation, and so on.

Patience allows us to enjoy the same experience more than once. It permits us to enjoy it both in the time leading up to the experience of it and during the experience of it. Patience enhances life experiences so long as it does not reach the point where it becomes stagnation, where the person is holding off the future out of fear rather than just avoiding a rush forward into it.

A consumer society discourages the cultivation of patience because the sellers of goods and services do not obtain additional profits when we enjoy experiences over a longer time-period than is the norm. It is up to us as individuals to see the benefits of patience and to cultivate it within ourselves. To do so, we need to take ourselves away from the distracting noises of the Consumer Wonderland. We need to have quiet time for reflection and contemplation in which we become aware of the benefits that patience has to offer us.

Middle-Class Millionaires — Page Two

Jan Geiger’s Story of Finding Life Purpose (E-Mail to Rob) — “We Didn’t Need to Be Married”

“When I was married in my 20s and 30s to my previous husband, he and I were determined to be rich and financially independent at an early age. When we were first married we saved about 10% of our income. Each time we got pay raises, we would increase this. By the time we got divorced, I was 38 years old and we were saving 50% of our take-home pay. We lived in a nice house and drove decent (not fabulous) cars, and we took decent but not lavish vacations every year.

“When I met the man who became my next husband five years later, he was really terrible with his money. I told him that if he would not get out of debt, get on a budget, and start saving for our financial independence, we didn’t need to get married. In the first eight years we were married, we more than quadrupled our net worth. This was a combination of new savings and investment growth. In the next seven years, we saw our investments go down in 2000, 2001, and 2002, but we still managed to nearly double our net worth during the seven years. Therefore, our net worth today is nearly eight times what it was when we married 15 years ago.

“My numbers are not unusual for somebody who is motivated. My two sons are 22 and 25. They both intend to be millionaires while they are in their 30s. I have absolutely no doubt that they will both achieve this goal. They have absolutely no doubt that they will achieve this goal. Anyone who has the right mental attitude and the right training can do this.”

Rob’s Comment: Jan made it a condition of marriage that her future husband get serious about money management. I wouldn’t do that. Financial freedom isn’t high enough on my list of priorities for me to take that stand. Whether you are in her camp or my camp on this particular question, I think there is a lesson to be learned from her story.

The more stress you place on financial freedom as a life goal, the more likely you are to get there. That’s the lesson. Some might say that Jan is crazy to think that her sons will become millionaires when they are in their 30s. I’m not so sure. If they are as determined as she is, they just might. Determination counts for an awful lot.

Determination comes at a price. Jan’s determination put her at risk of losing the man she ended up marrying. Her sons’ determination may cause them to take a pass on career options that would have compelling appeal to young men with less determination to acquire lots of wealth early in life. I think that it is generally so that most of us can attain financial freedom a lot sooner than we imagine is possible. At a price. But it can be done.

Most of us are not as determined as Jan and her sons. Please don’t think that that’s a prerequisite to pursuing a financial freedom goal. Many who know that they can never possess the high level of determination that Jan evidences decide as a result that financial freedom is not for them. No! This is not an either-or choice. There are all sorts of levels of wealth-accumulation determination possible.

If you become more determined than you are today, you will achieve financial freedom sooner. That’s the magic that I see in Jan’s story. She is showing us that determination translates over time into wealth. She’s right.

How to Manage Money

Jan’s Note: As a financial planner, I’ve seen far too many marriages destroyed by fighting over money. To me, it was not a risk of losing the man I wanted to marry. It was mitigating the risk that we would fight about money all the time and become divorced. That was the far bigger risk in my mind.

Charlie’s Story of Finding Life Purpose (Comment Posted to the Financial Freedom Blog)“We Will Not Compromise Our Principles in the Rest of Our Life Endeavors”

“Unfortunately I know first hand the pressure to do something unethical at a job to keep a paycheck coming in. As my wife and I get closer to debt freedom (thanks to a lot of great material read, namely your book Passion Saving and Tim Covell’s Rational Simplicity), we will not compromise our principles in the rest of our life endeavors.

“Thanks for your work!”

Rob’s Comment: These few words tell a big story. Financial freedom is not something that has value only after you turn 65. One of the benefits of attaining financial freedom at a stage of life when you still have many years of productive work ahead of you is that it allows you to live a life of integrity. It’s not about retirement, it’s about empowerment!

Thank you, Charlie, for bringing forward a point of such importance to your fellow community members. My guess is that your words will serve to put some new and highly liberating thoughts in the heads of a good number of people.

Javier’s Story of Finding Life Purpose (E-Mail to Rob)“I Was Able to Take an Extended Leave”

“It was about a year and a half or two years ago, I can’t remember well now, when I came across your Passion Saving website. I didn’t know how much you would change my perspective of life and finances.

“I went from being thousands of dollars in debt to having thousands of dollars in savings in a time-period of two years. Thanks to your words I was able to take an extended leave for three months and take care of my wife and newborn. I did this without getting in debt, paying hospital bills, buying a used but dependable sports utility van, taking care of my family, and still not wiping out my savings.

“I do not make a lot of money, mid 30’s to low 40’s. I’m 30 years old and thanks to you my perspective on money changed for good. Now I’m taking some of the first steps to get serious about my own online business on something I like (photography) and about other business opportunities.

“By reading all the information on your website I was able to develop a part of me I didn’t know I would be able to become. And I am sure that you have made the same impact on many other people.”

Rob’s Comment: Please note Javier’s comment that: “I didn’t know how much you would change my perspective of life and finances.” In the days before you become an effective saver, your focus will be on the hurdles. You might be thinking that you don’t earn enough, or that your spouse isn’t supportive, or that perhaps it’s too late for you to turn things around. When you get to the other side of the river, you will be saying things similar to what Javier says here, that you never anticipated that the life changes you were bringing into effect would be so sweeping.

The Word's Greatest SaversBecoming an effective saver is a big change. It’s not money that we talk about at this site. It is Life; money is the fuel we use to realize all of our most important Life Goals. Any changes that affect your ability to achieve your Life Goals naturally make you uneasy. It makes all the sense in the world to start out slow. As you become more comfortable with the changes you make, however, you will find yourself picking up the pace because you will have come to enjoy the change that saving brings to your life.

This stuff goes deep. That’s why it’s hard to get started. That’s also why this stuff continues paying rewards for a long time to come.

Arty’s Story of Finding Life Purpose (Post to the Financial Freedom Blog)“A Less Secure Future, but A Good Retirement Already Had.”

“From the mid 70s through the late 80s, I was involved in producing corporate advertising, creating the artwork. When I first began, the pressures and bustle and novelty thrilled me. I also worked on Wall Street in the same capacity, but never cared about anything except going home from another overtime day to sleep. The irony abounds, as now I wish I cared more about my finances!

“We worked overtime so often that it could not rightly be called that. Sometimes, during huge crunches, I saw 40-year-old creative directors (overweight and with “necessary” gin in them) weeping in the hallways because some artist I hired wasn’t capturing their “feel”. The pressure was murdering them and they had tons of money (which I envied), wife, kids, great homes and cars (which I also envied), but no time or life outside the agency (which I did not envy). The pressures on me were heavy but much less than what applied for them.

“By the late 80s, I became a freelancer, which paid well when I was busy but not at all when I was not. It was when I was slow that I realized the joys of staying home as a young man. These were simple things, playing with the cats, enjoying a sunny day, vacations, etc. I became convinced that this was the life that many were saving to experience in retirement, when they might be too infirm (or whatever) to enjoy it as fully. I had also begun writing various hobby books and human interest articles, which paid less than ad work but enough for a young man with low rent and no wife or kids.

“So, without the more careful planning that Rob employed, I “subtracted” myself from the conventional work mode. I now remain subtracted, living as a writer with few expenses, a good, full life for me. While I still write, and am paid to do freelance marketing, consulting and editing, I do not regret the decision to abandon a good, regular job and “live” my life, albeit poorer, than my peers and friends who got jobs providing good pensions but still await the day to spend them.

“But I could have done far better in planning my retirement, or saving in general, because I had no interest in money. And now I need to do just that, so I’m putting great energies toward learning about it to catch up. So, in that sense, I’m living life “backwardly”, with a less secure future, but a good retirement already had.

Rob’s Comment: The common theme in all Passion Saving/Retire Early stories is planning. These things just do not happen by accident. The core reality is that we have more money running through our hands than our parents or grandparents had running through their hands. More money means more choices. If we plan. If we don’t plan how to make use of the added money, by default we just end up with more stuff.

There are lots of potential paths. One of the things that I most enjoy about reading through the stories posted to this section of the site is that there is such a wonderful diversity of stories. We all plan; that’s the common element to all the stories. But we all choose our own particular path; that’s because it is the intense appeal of the particular path to the one person choosing it that gives him or her the motivation to become one of the world’s most effective savers.

Tmeri’s Story of Finding Life Purpose ( Discussion Board) — Here Was Someone Who…Was Not Afraid to Call the Corporate Culture B.S.”

“Somehow I stumbled across intercst’s page…. Finally, here was someone who…was not afraid to call the corporate culture B.S.”

The Path to Plentiful Free Time and Soul-Satisfying Work

Rob’s Comment: If you read the entire thread containing Tmeri’s story, you will see that I posted comments on that thread back in October 2005 describing the significance I see in it. There are now a good number of blogs and web sites exploring early retirement topics. This was not so back in 1996, when Greaney created his site. A lot of people (including me) felt emotions similar to those described by Tmeri when coming across John’s site at a time when comparatively little in the way of resources dealing with this topic was available.

Humans are social animals. We act on things that we view as “okay” to act on. We develop out ideas as to what is “okay” and what is not by looking at what our fellow humans think and say and do. It was a big move forward for the Financial Freedom Movement when Al Gore invented the internet and made it possible for those of us exploring these ideas to share what we have learned with others in the process of forming similar strategies.

The Greaney approach to early retirement is far too negative and hostile for my tastes. I enjoyed all my corporate jobs for the opportunities that were offered me and for the people I met and for the things I learned. Still, I did experience that same click moment that Tmeri talks about when I discovered John’s site (this was in late 1998, when few knew of it). I didn’t feel comfortable with John’s tone even then. But I was excited to hear someone talking in an open way (if not in an entirely fair or balanced way) about the downside of paycheck dependence.

To attain early retirement, you need to desire early retirement. To desire early retirement, you need to know that early retirement is possible for you. To know that early retirement is possible for you, you need to hear how lots of different people have done it and how they have gone about doing it and what obstacles they encountered and how they overcame them. You don’t learn about this stuff by reading a single article or a single book. You learn about it over time as your mind gradually becomes open to a greater and greater number of new ideas, each one building upon some earlier one. It’s a process that can only be pursued in a totally effective way in a community of people pursuing similar life goals.

Aaron’s Story of Finding Life Purpose (E-Mails to Rob)“This is What Investing Should Be — Calculated, Deliberate, Confident, informed and Simple.”

“I read a number of your articles tonight, and I’m very impressed with your insight about finance and investing.

“Protecting one’s savings and purchasing power while still attempting to invest well for the future is a very challenging thing to do for a human being. There is no such thing as long-term for the majority of us. Give me six months, and I’ll make a plan and probably stick with it half-way. It’ll probably work out for me, half-way.

“The intellectuals mean well, but they don’t add any value. The number of people I know who trust their futures to statistics cannot be counted on one of my fingers. A 20% loss in any investment will make them bail. I am more advanced than they are, in that I’ll bail at a 5% loss and probably buy a little bit of what they are selling. The vast majority wish there was some way this whole ‘chore’ of investing could be taken off their hands.

“I enjoyed your disrobing of Taylor Larimore (co-author of The Bogleheads’ Guide to Investing). I honestly suspect that he’s a respectable and likable person in real life, but believe his advice is fueled as much by faith as reason. If I reasonably believed the next 20 years would be like the last, his quotes from the investment masters would hold a lot more weight.

“As it is, I’m learning to trust my gut more and feeling better. I know you had something to say about that as well….

“I read more of your archived material today. I’ve also been to Mr. Russell’s site on several occasions as well (from his links on the Morningstar forums). I didn’t realize you were Hocus! Man, those Diehards are a piece of work sometimes. That dogmatic, guru-worship thing combined with ridiculing the non-believers really drives down my respect for people.

“You and Mr. Russell are on to the most valuable ideas about spending and investing I’ve ever encountered. Saving 30% can be easier than saving 10%? That is absolutely brilliant, and I know it’s true because I’ve been there. One is a quest, and the other is a drain. Totally different energy.

“I am not willing to save 30% anymore, but I do have 15 years of accumulated savings that I am dead-set against losing and will count on for financial independence some day. I’m waiting for another 1982 opportunity, but don’t know when or if it will ever come.

End of the Day

“Then I saw the PE10-weighted TIPS/S&P 500 portfolio and had an ‘ah-ha’ moment. This is what investing should be ~ calculated, deliberate, confident, informed and simple. And based on mathematics and reason. We should know why our investments will work, and feel good about being able to invest. Faith should not be a factor, and ‘sacrifice’ should not be the attitude.

“I’ve got a lot to learn, Rob. Thanks again for putting all your ideas out there. I really can’t express what I’m going through right now. It’s a turning point for sure.

“Anyway, I’m recommending your site to my friends. It’s the best there is of its kind, by far.”

Rob’s Comment: I hope that the Normals did not take my article about Taylor Larimore (please see the article entitled “Taylor Larimore and the Monster Mistake that Ate Middle-Class Wealth” at the “Heroes and Villains” section of the site) to be uncharitable (the Goons of course view any reference to flaws in the Passive Investing approach as the launching of nuclear missiles). I agree with Aaron’s assessment that Taylor is a likable enough fellow who happened to fall for a Get-Rich-Quick investing approach and who lacks the emotional maturity and balance to fully appreciate the great personal and financial harm he does to those who place their trust in his recommendations when he employs abusive posting practices to block questioning of his ideas. There were of course positive things said about Taylor in the article, and properly so.

Aaron’s “this is what investing should be” statement gets right to the heart of what I am trying to accomplish with the Valuation-informed Indexing approach. I do not say that this is the investing approach that will offer the best possible returns; it is not at all my purpose to devise such an approach (and I lack the ability to do so in any event). The key word in Aaron’s list of characteristics of the Valuation-informed Indexing approach is “simple.” It is my contention that 80 percent of the investing literature is aimed at helping 20 percent of the investing population (that 20 percent probably buys 80 percent of the investing books, but still…).

The reason why John Bogle is so popular among middle-class investors is that he is one of a very small number that gets this. Bogle’s advice is aimed at the average investor, the investor who most needs a hand today. Bogle does not aim to give the best possible advice, he aims to give the best possible simple advice. There’s a desperate need for simple but effective advice now that middle-class workers have been given the job of financing their own retirements.

I of course greatly admire Bogle for what he has done. At the same time, I am appalled by the pigheadedness of a good number of his followers (and to be fair to the followers, pigheadedness is not an attribute entirely non-evident in the Master himself). Indexing is a potentially powerful approach that is in its conventional form poisoned by Bogle’s acceptance of the Get-Rich-Quick gibberish of the Passive Investing School.

There is nothing in the nature of indexing that requires that it be tied in any way, shape or form with Get Rich Quick schemes. My aim is to disassociate indexing (which i love because properly utilized it can do so much good for so many middle-class investors) from Passive Investing (which I loathe because of the great destructive power it has been shown to possess during The Great Safe Withdrawal Rate Debate and during the out-of-control bull market that preceded it and set the stage for it). We are watching play out before us the greatest loss of middle-class wealth in the history of the United States (I am assuming here that stocks may perform in the future at least somewhat as they always have in the past). Indexing is going to be blamed. The only hope that I see for indexing to remain a viable investing strategy in days to come is for responsible indexers to do all that they can to disassociate themselves from any advocacy of the hateful (I don’t at this point think that’s too strong a word) Passive Investing ideas.

Valuation-Informed Indexing is the natural choice for the busy, realistic, emotionally balanced middle-class investor. It’s all the things that indexing once promised to be but then failed to become because its leading advocate got mixed up in promotion of Passive Investing gibberish instead of keeping his focus on the knitting. Valuation-Informed Indexing is indexing without the emotional baggage, indexing that makes sense to the rational human mind, indexing that works according to the historical data, indexing that deep inside feels good and right and on target.

A Rich Life

I am excited to see Aaron combine in the same e-mail observations on what he has learned from our community’s saving insights with what he has learned from our community’s investing insights. Yes, yes, a thousand time yes! I of course understand that saving and investing are different fields of study. But I reject out of hand the idea that we must forget everything we learned about saving when we turn our attention to investing.

Ask the typical aspiring early retiree how early retirement is possible and he or she will tell you that the key is to obtain value for your money, not to spend recklessly. Ask him or her how to invest, and there’s a good chance that he or she will say that Passive Investing is the way to go. Holy Cognitive Dissonance, Batman! Prices matter when buying cars and houses and bananas but make no difference whatsoever when buying stocks, the item that most of us spend more money on during the course of a lifetime than any other? That makes sense? No, that does not make sense. Not to this boy. Find someone else.

Prices matter when buying stocks just as they matter when buying anything else. Of course that is so! That’s Valuation-Informed Indexing.

Some have a hard time seeing how making that single change in one’s understanding of how investing works can bring on the magical results that the historical data shows have always applied in the past to investors willing to rein in the most destructive of investing emotions a bit. It’s a counterintuitive phenomenon, to be sure. But is the magic of Valuation-informed Indexing really so much more powerful than the magic of saving effectively? It is not! It is not.

All of those who have retired early have been amazed at how saving effectively can turn a life around, fill it to the brim with potential and accomplishment and energy and hope and drama and fulfillment. Why should we be skeptical that applying the same principle in the investing area can bring on a similar sort of magic? Fundamental ideas have huge consequences. The way it is.

And it’s great that that’s the way it is, you know? Discovering these simple but oh-so-important truths is what our movement is all about. The conventional media is not going to report on this stuff, not at all often. Not because the people who work those jobs are evil, not because the people who work those jobs are dumb. It’s because the people who work those jobs have not retired early! You start walking down the path that those who follow this site walk and you learn all sorts of things that most of your friends and neighbors and coworkers do not know and can hardly believe are true.

That’s the idea, eh? The goal is not to allow the conventional advice to pull aspiring early retirees into the same pit of boredom and frustration in which so many of those following the conventional financial advice find themselves. The idea is for the ideas we develop together at our boards to pull those following the conventional advice up to the higher place where those of us who were blessed enough to discover these ideas some years back now find ourselves.

Aaron’s story is the story of how middle-class investors will invest in days to come if we all succeed at the important work we have taken on. I find it an inspiring account reflecting deep knowledge of two different subjects on which only the rarest of today’s “experts’ can speak with such perspicacity.

Middle-Class Millionaires — Page One

Middle-Class Millionairies — Page Three

Middle-Class Millionaires — Page Three

Tasha’s Story of Finding Life Purpose (Letter to Rob) — ”I Woke at 4:00 am and Stared at the Wall for 20 Minutes”

“I woke at 4:00 am and stared at the wall for 20 minutes before turning on my laptop to surf around looking for info on becoming debt-free and financially independent. I found you through a series of Google searches on financial independence. For my third search, I entered “what does financial independence mean? At the bottom of the third Google page, I clicked on “8 Paths to Financial Independence,” which brought me to your well-thought-out, respectfully written piece at

How to Retire Early“Thank you for doing what you do. I am a [thirtysomething] woman starting out at the very beginning to define my financial goals and plot my steps toward achieving them. No doubt I will find valuable information on your great site, as I already have….

“I plan to continue reading and researching, planning and taking action in a Passion Saving spirit. I look forward to living out my plan and hope to contribute my thoughts to your blog at some point.

“Overcoming doubt is a biggie. But I am working on ways that will change my perception and eradicate fears. Once I see the proof of my savings in action, it should get easier. Thanks again for your contribution!”

Rob’s Comment: I am not a person who totally buys into the idea that, if you visualize something, it will happen. I believe that there is something to the idea, however. The reason why it often works is that visualizing something prompts you to think about it and thinking about something leads to planning for it and planning often generates amazing results.

Things that bother you only a little bit rarely provoke action. You just learn to live with those sorts of things. Things that cause you to stare at the wall for 20 minutes at 4:00 in the morning prompt action. Those are the problems that come to be viewed as priority problems. Those are the problems that your creativity comes to solve in time.

There have been a number of times when I found myself staring at the wall at 4:00 in the morning. In no case did I bring myself to that place by choice. In every case that I can recall the experience led me to something good down the road. Pain is a motivator.

Another way of saying it is — You gotta suffer to sing the blues!

Mary’s Story of Finding Life Purpose (E-Mail to Rob) — “I Now Live on SS and in HUD-Subsidized Housing…But My Time’s My Own”

“I’m an INFJ, too–though I test these days as INTP. You are correct that INJFs care nothing about money–unless life’s events force it. If you’re a family man, not caring is not an option. I myself came to the opposite conclusion. I just up and decided–with a flash of Great Insight–“money isn’t even real!” And I forthwith dropped out of the commercial world. Walked out of my “job.” I moved back to New England and lived with various friends for five years, and now I live on SS and in HUD-subsidized housing. Medicaid for healthcare (the best healthcare I’ve ever had!) But my time’s my own, and I’m writing a book showing how we can have as sophisticated a commerce without money as with it. It’s not utopian philosophy, nor is it sci fi. I take this bitter subject quite seriously; we don’t have to do things the way Adam Smith saw it. It’s not the only vision. The trouble is, the vision Smith gave us is so pre-occupying, we don’t have mental space to develop the others.

“One of the things I need to document, though, is what the size of the population is who go to work every day hating their jobs. You sell freedom from money. Which means, jobs they don’t like, right? (Otherwise, they don’t need to be free from money–if they like their jobs, money’s just a gorgeous happenstance.) What’s the size of the unrest out there? Your tack seems to be capturing some attention. I wonder whether your Readers would care to respond to that thought?”

Rob’s Comment: My sense is that it is a small percentage of the population that hates its job and a small percentage of the population that loves its job and that most fall somewhere in-between. I believe that people have a deep need to find fulfillment in their work and that this need is often frustrated today because people have too little control of the details of how the work they do is accomplished. Nurses are the grpup that come to mind immediately. I have seen a good number of nurses who love what they do in a general sense but who feel compelled to spend a lot of their working lives filling out paperwork. Teachers are another group that I view as often frustrated. There are others.

Early Retirement Planning

I want people to be able to spend less time earning the money they need to stay alive so that they can do more important work. If people choose not to work for money, it doesn’t mean that they are not working. It means that they are spending their life energy pursuing quests for non-financial reasons. It could be that in some cases they are just getting into trouble. But it could be that in other cases they are doing heroic things. If you use money effectively, you gain back control of your time. I view my site as a big advertisement for a wonderful but too often overlooked good called “Time.”

Patricia’s Story of Finding Life Purpose (E-Mails to Rob) — “From Shattered Dreams of Early Retirement…to Reassurance from Quantitative Research.”

“Thank you so much for making your research and insights available to us. I have thoroughly enjoyed reviewing your commentary in the website and playing around with simulated scenarios – I’ve gone from shattered dreams of early retirement to glimpses of hope to reassurance from quantitative research. I commend you for putting together such an interesting and useful website.

“Both my partner and I are in the late forties, are both professionals, and have enjoyed a great standard of living in the sense of not having to worry about financial matters. We are definitely not the ultra-rich but, likewise, never had to worry about sticking to a budget. However, this has been achieved by both of us working. Perhaps, a typical double-income trap.

“Our financial net worth (excluding home equity) is $1.5M with a fully paid mortgage. We have three kids (twins of 12 and a boy of 16).

“The dark side of this is that the lifestyle and our savings have been dependent on two incomes, and due to the weak economy plus a rather unfocused career (plus my age!), I am getting to the stage of finding it hard to source an income (I work as a consultant so my salary is highly variable). My dream has always been for me to stop working by the end of 2009 when I hit 50, and only do a small amount of teaching at university while my partner would phase out his job by 2012 at the latest, at the age of 55.

GIven my family configuration, cashflow requirements are quite high so I cannot see my savings nest being able to support us, say, 40 years from now plus leaving something behind for the kids. Your calculator clearly shows that.

“On the other hand, I know that many families can live with half of our budget without necessarily dropping into a miserable lifestyle. But, I am not sure whether we know how to do it – although we are a family of savers, we don’t really know what “sacrifice” means.

“In all this, the positive aspect is that the intelligence behind your retirement analysis, plus that of those who have applied Monte Carlo simulation, plus W Bernstein, plus the Trinity studies, etc. empowers me to really understand the potential scenarios. They give reassurance that the plans that I may be making are supported by analysis, research and evidence so I may know what I’d be getting into.

“To be perfectly honest, I’ve been quite fed up with retirement books that oversimplify matters. For example, I flicked in the library a book under the title “20 Good Summers”, which clearly says that the “number” is 10 to 12 times the annual expected withdrawal, implying a return of roughly 8.5% to 10% year in, year out. That sort of nonsense is risky and damaging. The other day, listening to Dave Ramsey, he said that because the typical diversified stock fund has had an average performance of 12%, then what people need to do is to save to the point when the 12% interest is sufficient, implying that the withdrawal rate is 12%. That’s the sort of guy who scores in the iTunes store as the most popular podcaster on personal finance!

“I don’t really know where to go from here, our savings are not enough given our family cash flow requirements; the possibility of saving a significant amount over the next few years is completely unlikely as I find it hard to find work. I worry about not having enough to execute my goal, yet I feel there is little I can do to change the situation. Perhaps I am going through the typical pre-retirement phase.”

Rob’s Comment: All of my work in the investing area is rooted in what the historical data says. There are many who see the value in this. There are also a good number, however, who find it “depressing” to know what the numbers say. I need to persuade this group that understanding the numbers empowers an investor, that it can never be a negative to learn what the numbers say. Patricia’s words do a great job of illustrating the empowerment that comes from knowing what the numbers say.

Getting Out of a Rut

My thought is that Patricia’s next step should be to employ the power of quantitative research that she discovered exploring the investing realities to learn about places where she can painlessly reduce spending. Some of us work the spending side hard and fail to do all that we can on the investing side. Some of us work the investing side hard and fail to do all that we can on the spending side. There is a law of diminishing returns that applies to both sorts of endeavors. When you find work in one area not bearing as much fruit as you would like, it’s time to turn your attention to the other. When you are doing this right, your saving efforts spur you on to learn more about investing and your investing efforts spur you on to learn more about saving.

I also suggest that Patricia spend some time with The Stock-Return Predictor and the Investor’s Scenario Surfer. Many take the news reported in the Retirement Risk Evaluator — that there’s a good chance that a 4 percent withdrawal won’t cut it for those retiring with a high stock allocation at today’s prices — as depressing. Use the other calculators to explore the other side of the story. Take some money out of stocks until prices return to reasonable levels and you become able to take advantage of the truly juicy long-term returns available to us once we see a big price drop. At a P/E10 level of 10, the most likely annualized 10-year return is 10.7 percent real. Earning a return in that neighborhood for a decade will bring dreams of early retirement to reality many years sooner for a good number of us.

Shall we all begin saying prayers for a return to sanity in stock prices?

Elizabeth’s Story of Finding Life Purpose (E-Mails to Rob) — “I Have Much More Confidence in My Ability to Understand What Is Happening”

“I just want to say thank you.

“As a naive buy and hold forever person getting too old for that approach, I woke up around DJI 13200, realized I had a lot to learn and had better learn it fast, and found this site. I now have cash sitting in MMFs that has not disappeared out of my retirement funds.

“I also have much more confidence in my ability to understand what is happening, and to respond appropriately as the situation evolves–although I think this will be a long painful drop.

“I think that the din of public and especially commercial information based on: (a) an unstated infinite time horizon; and (b) a lack of intersection with the valuation process has done a great disservice to many people who might actually like to retire someday.

“Only when the market dropped significantly last summer did this all become “discussable” in polite company — and even then, it was difficult in many settings. I found that none of my friends (who are not in financial services) had any idea how to sort out useful information from sales pitches–and I was paddling along knowing I’d better do so quickly.

“You were putting all this information out a long time before the inevitable began to show itself in real time. I was not watching then, but obviously it got somewhat ugly in the discussions you described on the site. Again, I thank you for your public service and, in another dimension, for the personal courage it took to make it happen.

“I can hardly say how much I appreciate what you have done here! It’s a site to live by!”

Rob’s Comment: Elizabeth hits on something important when she says “I also have much more confidence in my ability to understand what is happening.” This is critical for the long-term stock investor, in my assessment.

I do not claim that we now know all there is to know about stock investing. I believe that we are in the middle innings of an amazing learning experience. We don’t know it all. But I think it is fair to say that our community now knows a good bit more than John Bogle or Bill Bernstein or Scott Burns or Jonathan Clements. And these are four of the most respected names in the investing advice business! If we know more than them, we know more than a whole big bunch of others too. I am highly confident that we are on the right track.

Achieving Life Goals

One of the things that makes me confident is that Rational Investing just hangs together in a way that Passive Investing does not. I believe that the primary reason why we see such hostility on the part of the Passive Investing enthusiasts when their ideas are questioned is that deep in their hearts they do not really believe in their ideas themselves. In fact, I question whether it is even right to call the principles of Passive Investing “ideas.” They are not the product of rational thought. They are the product of emotion supplemented by intense rationalizing (something very, very different from reasoning). There has never been a time when valuations did not affect long-term returns. It is impossible for the rational human mind to imagine a scenario in which valuations would not affect long-term returns.

Buy into the Passive Investing approach, and you ground your investing strategies in irrationality. This of course may work for so long as the market remains irrational (today’s prices are obviously irrational). But rationality must always enter the picture again or else the market and even the economy that supports it would have to collapse. When that happens, the nice-sounding slogans of the Passive Investing enthusiasts disappear into the mist. They are so much nothingness.

Buy-and-hold cannot be rooted in nothingness. To succeed, it must be rooted in something solid. I like the Rational Investing approach because when exploring new ideas I feel sure of the ground underneath my feet. I think that one of the reasons why Passive Investing enthusiasts are so dogmatic is that they are so unsure of themselves. In contrast, Rational Investors can admit mistakes because we don’t see it as a life-threatening event to acknowledge having gotten something wrong; we admit the mistake, take note of what we can learn from it, and get on with our lives. Making mistakes and fixing them is just part of a natural learning process to those who don’t feel a need to defend indefensible “ideas.”

Successful investing is buy-and-hold investing. Buy-and-hold requires confidence. Confidence comes from building on a solid foundation. Accepting that stocks may perform in the future at least somewhat as they always have in the past provides a solid foundation to all our explorations. Rational Investing works.

And for a highly encouraging reason. Rational Investing works because humans are not inherently irrational creatures. We are all guilty of irrationality at times. But we all crave rationality too. When we find it, it gives us the confident feeling that we need to invest successfully not only in bull markets but in whatever conditions we happen to be required to live through during our investing lifetimes.

I am persuaded by the many kind and intelligent and supportive comments that I have received in recent years from my fellow community members that most middle-class investors are genuinely interested in learning how to invest successfully. We are not dumb. We are not greedy. We are genuinely confused. People want to do what’s right and have a hard time believing that so many big-name “experts” could get it all so terribly, terribly wrong.

Sam’s Story of Finding Life Purpose (E-Mail to Rob) — ”It Jolted Me From My Preconceived Notions.”

I just started going through your website — it jolted me from my preconceived notions.

The Pursuit of Happiness

The more I read your articles (most of them posted around 2007) I wonder how right you have been about the excessive valuations. But then again if I had read them in 2007 when posted, I would have just dismissed them as my financial advisor would have wanted me to.

Rob’s Comment: Sam shows by these words that he “knows” some things about investing that most of the “smartest” investing experts in the world today do not know. The line that jumps out at me is the line in which San says that if he had read about the effect of valuations in 2007, he would have ignored what he read. He didn’t want to hear that message in 2007. So he would have just tuned it out.

This is the side of the stock investing story that is rarely discussed. Investing is not an intellectual game. It is an emotional game. It’s not the investors with the highest IQs who are most successful. It’s the ones who have developed the greatest amount of emotional balance.

There is nothing tricky about Rational Investing. The idea that the price you pay for stocks affects the return you obtain from them is the most obvious observation imaginable. It is controversial because it is obvious. It makes those who think of investing as an intellectual game feel bad to see that they have been barking up the wrong tree for a long time.

The bad news is that we cannot today rely on most big-name investing experts to steer us straight. The good news is that we are far more capable of figuring things out for ourselves than most of us today realize.

I hope that Sam will continue his journey to a richer and fuller and deeper understanding of the stock investing realities.

Middle-Class Millionaires — Page One

Middle-Class Millionaires — Page Two

Middle-Class Millionaires Finding Life Purpose

Community members share stories of finding life purpose through effective money management:

Wahchai’s Story of Finding Life Purpose (Post to Motley Fool Board)“The Workplace Is More Pleasant If You Are There Because You Want to Be There”

“I used to berate them for being cheap. Yet both lived essentially as well as I did. They bought their suits and shirts on sale, and drove less expensive cars which they held onto at least four years before trading….Now my friends live the good life….

Retire Early Stories

“Financial security is freedom. Freedom from worry, freedom to use your time as you see fit, freedom even to keep working if you so choose. The workplace is a great deal more pleasant if you are there because you want to be and not because you need to be.

“…I sold my expensive house (made a good profit), and bought a smaller one in the suburbs which I like just as much. Instead of a 740 BMW (great car), I drive an inexpensive SUV with good tires…. Already I feel a sense of security, a feeling of control over my destiny, that I never had before.”

Rob’s Comment: If you attend a marketing class, one of the first things you will learn is that people rarely are persuaded to do something that they didn’t already possess some desire to do. That’s why advertising relies on emotion rather than logic in its sales pitches. You want to persuade people to do what they are already leaning toward doing.

The Sacrifice Saving model of money management is not rooted in emotion. It tries to persuade people to do something they don’t want to do — practice self-denial. It doesn’t work.

People save when they want to save. You can make people want to save by showing them what a powerful value proposition it offers. Wahchai’s story is not a story of self-denial. It is the story of how he came to see that saving is often the money allocation choice offering greater life enhancement. That’s what works.

John’s Story of Finding Life Purpose (,“I Almost Got My Education for Free”

John Greaney describes how he completed his engineering studies in three years and thereby was able to begin earning an engineering salary one year earlier than would have been the case had he taken the usual four years to complete his studies. His first-year salary covered the cost of three years of tuition and room and board, with the result that, in his words, “I almost got my education for free” in the sense that his earnings from his first year of employment as an engineer provided enough funds to cover his three years of schooling.

Rob’s Comment: People who are not seeking to win financial freedom early in life are often amazed when they hear stories of what our community members have accomplished for themselves. John’s story shows why we are able to accomplish the “impossible.” Would John have attempted to finish his course work in three years if his only saving goal was to be able to finance an age-65 retirement? It’s not likely. He would have looked at the pros and cons of finishing his course work in three years from a very difference perspective if he had been coming at things from the conventional perspective. It was his short-term saving perspective that provided him the motivation to finish his course work in three years. His words above demonstrate how great the financial payoff can be for pursuing a saving goal that can be achieved within a relatively short amount of time.

Marie’s Story of Finding Life Purpose (E-Mail to Rob), “You Can Never Tell What the Future Holds”

The Joy of Financial Freedom

“A great reason for following a financial freedom plan is that you can never tell what the future holds. You don’t know if you will be able to continue earning money at the same high rate. You may get sick, lose a high-paying job, lose a spouse, have a disabled family member.

“In my and my husband’s case, we loosely followed Your Money or Your Life. We agreed with it in principle, but didn’t follow all of the steps. But we did manage to save enough and reduce our spending enough to build up a cushion.

“I am incredibly grateful that we did. My husband was diagnosed almost a year ago with a brain disorder. This is on top of our having a special needs teenage son. My husband had to quit his good-paying job, we had to move to get rid of our mortgage, and we had to attend to medical issues. This would have been an incredible pressure cooker situation, one that could have taken its toll on our marriage, our sanity, and our health, if it had not been for our previous work in the financial freedom area.

“As it turns out, we are doing great — bonded together, doing what we need to do medically, moved to our dream area of the country, building a small mortgage-free house, continuing homeschooling our kids, trying to live a calm sane life. Since we had built up several years’ worth of cash reserves, we have time to figure things out. I have a web site and am about to publish a book about a topic that I love. Thankfully we don’t have to be in a big rush to get more money coming in. I can still stay at home to take care of family and we have time.

“In order to do this, we keep our spending to about $1500 per month, but I feel like the richest person on earth. I have my husband, my kids, and time.”

Rob’s Comment: Most of us think at times: “Oh, if only this problem would go away, my life would be great.” Sometimes, the problem we are worried about goes away, but some new and much larger one comes along to take its place. We need always to be seeking new life enhancements to make up for the good stuff that is taken away from us as life proceeds. Seeking to play it safe and just have things remain as they are does not work. Marie and her husband have experienced setbacks that would have crushed the spirits of a lot of us. Their spirits were not crushed. She today feels like one of the richest people on earth in part because she engaged in effective money management in the days before life dealt her some black cards.

Matt’s Story of Finding Life Purpose (E-Mail to Rob), “I Experienced a Freedom I Never Thought Possible”

Juicy Excerpt: “I want you to know that you are one of the reasons I started following the Retire Early board [the reference is to the Motley Fool’s Retire Early Home Page discussion board]. In the Spring of 2000, I started reading the board at the suggestion of my brother. He told me to do a search of the board for your posts, as well as those of a few others, in order to learn what the whole Retire Early thing was about.

“My brother lighted a fire inside me which you helped to nurture. You both made me see the world in a way I had never considered before….

Finding Life Purpose

“In December of 2001, I left my job. I decided to take some RE [early retirement] in the middle. I paid off most of my debt, invested the rest and set off into the wilderness. I spent several months hiking over a thousand miles through the Appalachian mountains. I experienced a freedom I never thought possible.

“I never would have thought it possible had the FIRE [the acronym stands for “financially independent/retired early”] not been started in my soul. You were a contributing factor in that, for which I am immensely grateful.

Rob’s Comment: A key tenet of the Passion Saving approach to money management is that saving to finance an old-age retirement doesn’t work. The conventional saving goal is too distant a dream to supply the ongoing motivation needed to inspire effective saving in the consumer wonderland we live in today. Saving can provide life enhancement in the here and now, just as spending can. Matt G’s story provides a great illustration of the point.

Matt G does need to save for his old age too, of course. My hope is that the taste of freedom that he has experienced will cause him to feel a craving for the much higher level of financial freedom needed for him to overcome paycheck dependence in a permanent way. His time away from the workplace cost him money. The important long-term question is — Will his enhanced appreciation of the rewards of financial freedom result in a big enough boost in his saving effort to permit him to leave the workplace for good earlier than would have been possible had he continued to follow the Sacrifice Saving approach?

Duggg’s Story of Finding Life Purpose (Post to Motley Fool Board)“I Am in the Best Shape of My Life”

“Retiring early allowed me to pursue mountain biking on a full-time basis. In the past year, I have ridden over 6000 miles and have lost 15 pounds. My percent body fat has dropped from 32% to 22%. I never did stretches before retiring, and doing so has immensely improved my riding performance. I am in the best shape of my life…. The typical indoor office work environment, coupled with co-workers passing germs to one another like candy, often gave me constant sniffles and occasional body aches and pains. Since retiring, they have all but gone away.”

Rob’s Comment: Duggg’s plan is too risky for my tastes. I like it that he reports on the health benefits of seeking financial freedom, as these benefits are important and too often are overlooked.

Jsever’s Story of Finding Life Purpose (Motley Fool Board), An Eye-Opening Conversation

“I got a call from a guy that I used to work with, who later became my boss for about 5 months. Nicest guy in the world–too nice to be someone’s boss, for reasons I won’t go into here.

“Anyway, he’s about 52-53 years old…. Anyway, he called me essentially looking for a job. He has 2 teenage kids at home and a wife who doesn’t work…. I believe his title at one time was ‘Vice President.’

The Crooked Path to Financial Freedom

“Today I am vowing: I do not want to be using my network at the age of 50+ to try to hook up with a job just so I can get some health insurance.”

Rob’s Comment: “Things” are great. I have nothing against the idea of spending money on “things.”

One of the “things” I spend money on is the freedom to be able to call the shots re my own future. The store that I go to when I want to buy some of the sexy and juicy and fun and frivolous freedom stuff is called The Freedom Store.

They accept payment there in all sorts of ways. I can put the money into TIPs, or stocks, or real estate, or whatever. So long as the money goes into some sort of account where it generates an income stream helping me overcome the need to work to pay my bills, the guys and gals at The Freedom Store are happy.

They are a great bunch of guys and gals, and they sell a wonderful product. But not too many people seem to know about them. They should advertise!

FoolMeOnce’s Story of Finding Life Purpose (Motley Fool Board), A Government Worker’s Path to Financial Freedom

“I plan on retiring in a few years at age 55…. When I retire I will receive about 70% of my high three salary and maintain full health plan benefits. The pension is inflation-adjusted using the full CPI. I can enjoy my current standard of living on about 2/3 of this amount.”

Rob’s Comment: One of the reasons why those seeking early retirement manage their money more effectively than those who are not is that those seeking early retirement start at the end of the process (determining what they need to be able to leave the workforce) and use what they learn to decide how to spend and save in the time leading up to that point. Following vague injunctions to “see if you can save 10 percent of your salary” will not get you to early retirement. You need to sit down and determine precise amounts of capital that you need to accumulate in precise amounts of time.

One thing you learn quickly is that it takes a lot of saving to generate each dollar of retirement spending. If you assume a 4 percent real return on your investments, it takes $25 of saving to generatee each $1 of retirement spending. An inflation-adjusted government pension offers an amazing opportunity for attaining financial freedom early in life.

Stephanie’s Story of Finding Life Purpose (E-Mail to Rob), Remembering to Mosey

“I am a single mom who up until four years ago made $12.75 per hour at a very physical outdoor job that I did love most of the time. I worked with horses and children. In the past four years, through paying off my mortgage, good money management, savings, and thriftiness, but most importantly through giving 10% of my earnings back to God, I now am almost debt-free and own 3 houses, one of which is paid for. I switched jobs and have doubled my income. I have a hefty IRA and sizable savings.

“I’ve had horses and raised my kids in a country environment for 35 years now. They are better people for it. They appreciate the value of a dollar and are not driven by making a lot of money.

“When I worked at the dude ranch, the people who came were very wealthy and seemed to always be in a rush. They were stressed and were uncomfortable at first with the slow pace. Within a day they had relaxed and could begin to enjoy themselves.

“A friend of mine (a doctor’s wife) was walking along the ranch pathway heading towards the dining room one day. She was traveling at a hurried pace as if she was going to be late. I asked her “Adrian, where’s the fire?” She stopped and stood still for a moment and said “I don’t know, I’m just so used to always having to go somewhere and do something I forgot for a minute where I was.” I reminded her that at the dude ranch we ‘mosey’. She laughed and smiled. They come here every year and I have watched her children grow and appreciate their time at the ranch and the peaceful time they have here riding horses and enjoying one another.

Achieve Financial Independence Early in Life

“People have lost something in this generation. Money can’t buy peace of mind and tranquility…. If you live from paycheck to paycheck ( I used to), you obviously have no plan for your life, your money, your time, your future, or your family.”

Rob’s Comment: Stephanie attributes the web site at for turning her money life around. I had not known about the site until seeing her e-mail, so I cannot speak about it in detail. But it appears from a quick look that the people running the site are doing important work. I added to my “To Do” list the writing of an article on the site for the “Planet Internet” section of the site.

There are some who will scoff at the site because its money advice is rooted in Biblical principles. This is a mistake. I rarely discuss religion in a direct sense at my site. But I frequently find my attention pulled to the consideration of spiritual topics in my investigations of money problems and money solutions. All effective writing in this field has a spiritual dimension.

How could it be otherwise? When we talk about whether we are going to save or not, we are talking about whether we are going to gain control over our future lives or not. Is the quest to live a good life not a spiritual quest? Money questions are life questions. Money questions are spiritual questions.

There are of course numerous ways to address those spiritual questions. Ignoring them is not an option for those of us who want to go deep, however. Spiritual matters are the drivers of human behavior. Money advice that ignores the spiritual side of human life can never get beyond the surface and down to the roots, where the real action takes place.

I’ll be moseying along now….

Middle-Class Millionaires — Page Two

Middle-Class Millionaires — Page Three

Financial Infidelity and Financial Intimacy

I have recently seen a number of articles on the topic of “financial infidelity” — telling lies about what you spend money on to your spouse or life partner, or keeping secret from him or her your ownership of a hidden stash of assets.

The consensus view is that it is bad because it undermines trust in relationships. I agree. But I think that there is an added harm done by financial infidelity that is not as frequently noted.

Financial Infidelity

Sexual infidelity not only undermines trust in relationships. It also undermines the efforts of those who engage in it of achieving true sexual intimacy with their spouses. It’s the same with financial infidelity. Those engaging in it not only risk seeing harm come to their relationships as a result. They also give up opportunities to achieve growth.

The first way in which financial infidelity robs you of opportunities to achieve greater intimacy is that it makes it possible for you and your spouse to go for long periods of time without sharing with each other how you spend your money.

Say that you keep a budget and that both you and your spouse review it at least once a month. In that event, you always have at least a rough idea what your spouse is spending money on.

That means that you know more about what your spouse is all about as a person. You know more about her weaknesses and you know more about her strengths. You know more about the ways in which she is sharp and you know more about the ways in which she is goofy. You know more about what she fears and you know more about her hopes for the future.

Marshall Crenshaw had a song entitled “What Do You Dream Of?” It was about watching his lover as she slept and wondering what was going through her head at the time. What Marshall Crenshaw needs to do to obtain a good answer to his question is to ask this young lady to put together a budget and to permit him to review it regularly.

Budgets tell all to those who have enough experience with them to know where to look for the insights contained in them.

The second way in which financial infidelity robs you of opportunities to achieve greater intimacy is that it robs you of an opportunity to learn more about yourself.

Financial Intimacy

It’s not just your spouse you need to know well to achieve deeper intimacy. It’s you too. Intimacy takes two, and you are one of the two. It is only by knowing yourself well that you can effectively arrange for the meshing with another that you are seeking when pursuing deeper intimacy.

You don’t know yourself as well as you think you do. We all think we know ourselves well, but our self-knowledge is always to some extent an illusion. To know yourself completely, you would need to be able to stand outside yourself and examine your behavior objectively. It cannot be done. How many of us really are aware of how others see us?

Perfect self-knowledge is not attainable. But you can attain enhanced self-knowledge by refraining from financial infidelity. If you are honest with your spouse about how you spend money, you are going to hear feedback. Sometimes the feedback will surprise you.

It’s when the feedback surprises you that you are learning what others find remarkable about you (in either a good or bad way) that you do not. Knowing that is an aid to achieving enhanced intimacy with your spouse.

The third way in which financial infidelity robs you of opportunities to achieve greater intimacy is that it diminishes the pressure that would otherwise exist for both you and your spouse to develop over time a respect for your differences.

You and your spouse have different personality types. Every personality type has its good points and its bad points. Deep intimacy comes from both of you developing respect for the strengths of the personality type of the other spouse.

If you are honest in your reports to your spouse about how you spend money, there are going to be times when friction develops over the choices you make. Good. Learning comes from friction. Put that friction to constructive use, and you will over time develop not only an understanding of how your spouse is different but also a respect for those differences and an appreciation of how they are in some circumstances a positive.

Your spouse likes to spend money on flowers to put in vases in the house. It’s not a necessary expense. You would rather add the money to the kids’ college fund. Can you come over time to see the benefit of spending money on the flowers?

I am not saying that you should always go along with the money choices your spouse makes. You should not. It might be a better idea to put the money into the kids’ college fund.

My point is that, if you avoid financial infidelity, you will be forced to struggle over your personality differences. Handled properly, that struggle brings a deeper level of intimacy. Have you ever had a fight with your spouse and resolved it and found that all of a sudden you were more turned on by her (or him) than you had been in a long while?

The fourth way in which financial infidelity robs you of opportunities to achieve greater intimacy is that it robs you of a safe way to work through your differences in perspective.

Debt in MarriageI am advocating the use of money discussions to achieve deeper intimacy. You don’t have to rely on money discussions to do this. You could achieve the same effect through discussions of religion or of child rearing or of health matters or of any of a large number of things. You should be having discussions about all those other things, of course. But you know what? Money discussions are safer.

Money discussions are ideal for achieving enhanced intimacy for two reasons.

One, money discussions are significant. How we spend our money determines how we live our lives. So you don’t need to force things to make money questions matter enough to bring intimacy. Money questions always matter.

But, two, they usually don’t matter all that much. Money stuff matters, but indirectly. Talking about money is not like talking about religion or about how to raise the children or things like that. Those discussions can be so intense that they can be intimidating. Money questions are generally not life-and-death questions. So money discussions always matter, but generally do not matter so much as to be too hot to handle.

Money discussions are hard enough to require the struggle needed to reach deeper intimacy, but generally not so hard as to cause upsets that the two of you cannot handle. We all care about money. But there are few of us who make the accumulation of money our highest priority in life.

The fifth way in which financial infidelity robs you of opportunities to achieve greater intimacy is that it robs you of a self-perpetuating line of discussion.

Say that you were to seek to achieve deeper intimacy by talking about a movie. That could work. But if you want to continue the effort the following week, you need to go to another movie. There’s a good chance that the next movie will not be significant enough to achieve the desired effect.

Money discussions are never-ending. If you discuss ways to cut spending through the month of January, come February you are going to need to begin discussing how to invest the money that the January cuts permitted you to save. Somewhere down the road you will need to discuss how to spend the money generated by the investments.

There is no end point to our money desires. So there is no end point to the use of money discussions to bring about deeper intimacy with your spouse. Avoid financial infidelity and learn how to discuss money issues with your spouse constructively, and you will find yourself riding a never-ending wave.

The sixth way in which financial infidelity robs you of opportunities to achieve greater intimacy is that it robs you of a discussion topic that regularly takes you to unexpected places.

Money issues start out being safe issues to discuss for the purpose of achieving deeper intimacy. But they don’t need to stay safe. As soon as you and your spouse begin to feel that the money discussions are getting boring, you can put your foot down on the accelerator and take things to a wilder place.

Say that you are discussing where to take your vacation. It’s between the mountains and the beach. You discuss all sorts of pros and cons. Then, from out of nowhere, your wife says “You know, it would really be great to be able to go to China.”


Fighting Over Money

You didn’t know that about her. You didn’t know she had it in her. Now you do. Forget the financial side for a bit. Explore the non-financial questions that just got brought to the table as a result of the financial talks. She wants to go to China. What does that tell you about her that you didn’t know? What else is there coming from that same place that you didn’t know about her until now?

Money discussions can lead you anywhere at all. Financial infidelity keeps you chained to a boring self-oriented place. Vote no. Infidelity is a bore. It’s deep intimacy that is truly sexy.


Getting Over Your Fear of Money

Step One for getting over your fear of money: Learn what it is.

Most of us suffer from a fear of money from time to time, and don’t even know it.

Fear of Money
If you paid fees when you bought your house that you didn’t understand, you suffer from the affliction.

If you chose the fund into which your Section 401(k) contributions are placed by asking a co-worker what he or she thought was best, you need to read this article.

If you have a feeling that you should be getting paid more than you are for the work you do, but are not really sure, you have a fear of money that it would be good for you to address.

Step Two for getting over your fear of money: Learn why just about everyone suffers from it at some time and to some extent.

Money decisions are life decisions. Directing money to a life goal makes your pursuit of it a real pursuit. If you are rational, the things you spend money on are the things you care about most.


You know what? Most of us do not make it a practice to make conscious decisions about what matters most to us. We do that when we must. Our usual practice, however, is to drift, to let things happen to us and to limit our involvement to responding in the best way possible to the things that happen that are not the result of our direction.

We say that we want the freedom to do what we want with our lives. We don’t always want the responsibility that comes with that freedom, however. We don’t want everything riding on our own efforts.

If we think through money choices, we are really thinking through life choices. This is not an easy thing to do. It is a hard thing to do.

Fear of Saving Someone once asked Willie Nelson why he took up singing other people’s songs when he was so good at writing his own. He said that writing his own songs was so emotionally draining an experience that he preferred to avoid it. Making conscious money decisions is a bit like writing your own songs. It’s a good thing to do. But it’s understandable that most of us don’t naturally seek out the experience.

Step Three for getting over your fear of money: Learn why it is important that you get over it.

Ducking money decisions can cause you a lot of pain.

There are mouth-watering opportunities available to most middle-class workers in the New Economy. Take advantage of them, and you can build a wonderful future for yourself. There are great risks too. The risks are greater than they were for your parents. If you fail to make conscious money decisions, you run the risk of losing your place in the middle-class.

The potential ups are very high. The potential downs are very low. You really must rein in your fear of money. You really must get it under control.

Step Four for getting over your fear of money: Prepare a budget.

Crafting a budget is the answer.

It’s that simple. And that complicated.

Crafting a budget goes a long way to solving the problem because crafting a budget means putting your money choices on paper. When you see your options on paper, you will be naturally led to making conscious decisions that are at least somewhat reasonable. You need to get this stuff out of your head, where it fills you with fear and undermines your confidence, and get it down on paper, where you can deal with it rationally.

Budgets are wonderful things. They cause you to think about money questions differently than most do. More effectively than most do. Writing a budget is like voting yourself a raise.

Step Five for getting over your fear of money: Make your budget a Life Plan.

Make your budget more than a list of spending categories and the amounts of your income allocated to them. Include plans for things you want to do with your future. How much do you want to save this year and next year and the following year? What percentage of your next raise will you direct to saving? If you had more money to invest, how would you invest it? What would be your ideal retirement age, if it were possible for you to retire early?

Fear of Investing

Ask yourself these sorts of questions when crafting your budget. Spend some time thinking about them. Do research if you think that will help. Talk the questions over with loved ones. Come up with answers that are at least minimally persuasive to you. Write them down.

Step Six for getting over your fear of money: Revise your budget.

The crafting of a budget is not a one-time thing. There are questions that won’t occur to you the first time you prepare a budget that will jump out at you on the second try, or the third.

The most important benefit of a budget is not the constraint it places on spending. The most important benefit is the learning process it facilitates. Learning conquers fear.

Step Seven for getting over your fear of money: Take one new money-related action every six months or so.

Much of your fear of money results from a concern that you will do things wrong. There’s all sorts of mumbo jumbo in the personal finance literature. There are show-offs who feel that it makes them look big to point out the mistakes of others. Many money decisions are one-time things, and your lack of experience may cause you to get things wrong. Since money is involved, you will feel stupid when you see that you have made mistakes.

You don’t want to be paralyzed by a desire not to make mistakes. Take actions. Don’t do things that may cause significant financial losses until you are sure of what you are doing. But take the sorts of steps that help you become better informed.

Ask a friend something, paying no care to the concern you feel that it may make you look dumb to ask the question. Ask someone who posts something on a discussion board that you don’t really understand to offer a more basic and more complete explanation. Buy a book. Do things. Actions build confidence. Even doing dumb stuff (so long as it is not stuff that is too costly) can get you moving, and that motion may in the long run take you someplace good.

Step Eight for getting over your fear of money: Engage in cautious efforts to get over the taboo about sharing details of your financial circumstances with others.

Fear of Career Change

You don’t want to share everything with just anyone, to be sure. Be cautious about this. But it can be a healthy step to share some aspects of your financial circumstances with trustworthy friends.

Many of us learn best by talking things over with friends. Learning is not just about taking in facts and arguments. Learning in part comes from the development of an attitude of receptiveness to new ideas. We are more receptive to things said by friends because our knowledge of what makes our friends tick provides us the context we need to make full sense of the things we hear.

We learn about all sorts of things from interactions with friends. We generally don’t learn much about how to manage money from them, however. Discussions of personal financial circumstances is taboo. There are reasons for the taboo, so you need to tread lightly here. But give some thought to whether there might be particular people with whom you could safely share some thoughts and questions and facts and concerns.

When you put your money fears out in the open, their power is diminished. You still need to take action on the question at issue, of course. But often getting over the fear of money is the hardest part of the job of getting to a better financial place.