Awareness Archives | Empathic Finance

What kind of freedom are you looking for?

A brief philosophical discourse on what financial freedom really means, and if there are other ways that we could define freedom.

‘Always with you this freedom! For your walled-up country, always to shout “Freedom! Freedom!” as if it were obvious to all people what it wants to mean, this word. But look: it is not so simple as that. Your freedom is the freedom-from: no one tells your precious individual U.S.A. selves what they must do. It is this meaning only, this freedom from constraint and forced duress. But what of the freedom-to?’
David Foster Wallace, Infinite Jest (1996)

I was supposed to attend the first-ever Financial Freedom Summit in St. Louis at the beginning of this month. An offshoot of FinCon, this was more of a “business-to-consumer” conference and less of a “business-to-business” conference.

It didn’t happen due to the pandemic, and instead it, like so much else in our lives, was moved online. The actual event has been postponed to be adjacent to this year’s FinCon in Long Beach, CA, but I have no confidence that either will actually happen.

But it, and so much else in our political discourse, has gotten me to think about what the “freedom” in “financial freedom” actually means. And whether it means the same thing to everyone. I suspect it doesn’t.

Let’s start with a 20th century political theorist, shall we?

[Read more…]

The pastor and the flood: A parable on who can save you

Awareness

I use the story about the pastor and the flood to ask who you’re waiting for to come to your aid. Is it someone else, or is it you?

My dad used to tell this story.

It was meant as a joke, I’m sure, with a solid punchline that knocks you sideways, but like many good jokes, there is a piece of truth hidden inside it.

I’ve adapted this story over the years as my own. I even named a prototype of my first blog after the story. It has always held a great deal of resonance to me.

Why? Well, it shows the folly of viewing your role in the world as a passive participant. It shows how you have agency to help yourself. It shows the benefit of humanism, and the risks in too much blind religiosity.

And it’s flexible enough that it probably has many more lessons too, but those are what resonate for me.

As it always feels relevant, but especially so today, I’m going to tell it in my own way. I’m sure you can find it in other places; I don’t claim that this is original material. Call it a “cover”.

May you find a lesson of your own in this, especially in times of struggle and looking to others for our own salvation.

I call it: The pastor and the flood.

[Read more…]

The affiliate trap: How professionals can lose both trust and income

Awareness, Decisions

Amazon just severely changed its commission rate, showing how easy it is to lose not only trust with affiliate marketing, but also income.

There are many ways that flout conventional wisdom in building my financial coaching business.

For one thing, I don’t use Facebook. I never have. So many coaches have Facebook groups, and I may start an online group at some point (if you’re interested), but I have no interest in using such a privacy-invading platform.

I don’t have a smartphone either, which certainly complicates some things. (Though it is certainly possible to live life today without a smartphone. I even briefly started a website to talk about The Smartphone Free Life.)

But when it comes to making money online, one of the most obvious ways that people engage in is through affiliate marketing.

Affiliate marketing is the overt (or semi-overt) selling of related (or even unrelated) products that earn a commission for you.

You’ve doubtlessly seen this before. A link in an email or a website leads to a product, often accompanied with a notice (“we may receive a commission from any sales that occur when you click this link“).

There is nothing inherently wrong with affiliate marketing. That’s how Wirecutter earns its living, and I’m basically a walking advertisement for Wirecutter in my life and home.

But affiliate marketing is not for me, as I don’t believe that it fosters trust with my clients or my readers.

This is a principled stand, which is nice, but there’s another side to this: financial sustainability. My coaching business is one that I want to maintain for years to come, and I want to earn my living on my own terms, not on commissions to other companies.

This has turned out to be prescient in all sorts of ways.

To show this, let’s talk about Amazon.

[Read more…]

The alarm and the weighted blanket

Awareness

There are two methods of helping people make meaningful change in their financial lives, which I call the “alarm” and the “weighted blanket”.

Your financial situation is like a bed.

We’re each lying in ours. (Or sitting. Or reading. Or whatever else we’re doing.) It’s our resting place.

And yet, despite how you’d probably much prefer to pull the covers over your head and stay there, there are realms outside your bed. New places to explore. New work to do. More fulfillment. More satisfaction. More progress.

But here you are, in bed. What do you need to get out and get moving, from a financial perspective?

I offer two examples. And I believe you need both.

[Read more…]

Offense and defense: What chess can tell us about financial wellness

Awareness

So much financial advice relies on defense, such as reducing spending, but you need a good offense plan too. Just like in a game of chess.

I confess I’m not much of a sports person.

I collected baseball cards as a kid, and was a semi-devoted Philadelphia Phillies fan for a while, but I could never get into the whole culture of mainstream sports.

And let’s not even talk about playing sports. Of course not.

So I’m not the best person to use a sports analogy when it comes to making financial progress.

So, how about chess? I’m no good at chess either, but it’s a little more my speed.

Either way, there’s a good analogy in there. And it has to do with how you play.

[Read more…]

Time to plan for the unthinkable

Awareness, Decisions

Now that we’ve seen firsthand how the unthinkable can happen, we need to prepare for other situations that can (and probably will) happen.

By now, we’ve all been dealing with “the unthinkable” for many weeks now. “Nobody” thought this could happen, right?

Now, that’s obviously ridiculous. But that’s not important now.

The point is, that it’s high time to plan for the unthinkable. Maybe now, or maybe when our current crisis is over, but as soon as possible.

[Read more…]

Why you want to keep a list of how you pay bills

Awareness

Keeping a list of payment sources, what you use to pay bills, will eliminate any payment issues when you inevitably have to update your info.

I find that a good deal of people’s money anxiety can be traced to feeling overwhelmed. And directly related to feeling overwhelmed (either cause or effect, or maybe both) is not knowing where you stand.

And it makes sense; anxiety and panic shut down the more rational, logical parts of our brain.

That’s why a lot of the work I do involves quieting the panicked part of people’s brains to see what is right in front of them. And once there, we build simple systems and promote small tasks that will help people gain clarity.

And knowledge is the enemy of panic. When you look under the bed and see no monsters there, you no longer need to worry about there being monsters under the bed.

So here’s one small task that I recommend that we all do. It’s one of those seemingly-not-crucial tasks that add up over time to help you get control of your financial situation.

It involves making a list of payment sources. Because you know you have them, but you don’t know what they are.

[Read more…]

The uncommon color of the swan

Awareness, Connection

I don’t how to talk about the current health crisis better than anyone else, but I still want to acknowledge the reality we’re living in.

I don’t know if you know this, but black swans do in fact exist.

Unfortunately, so do “black swan” events.

Though really, do we need to call them “black” swans? Couldn’t we come up with any other color? Green swan? Burnt sienna swan? What’s the crayon that no one likes? Periwinkle?

Sorry, but I just had to add some color to the situation.

(Okay, I’m even more sorry. Not really, but read on for more.)

[Read more…]

What does the data say? Reading The National Study of Millionaires

Awareness

I review the National Study of Millionaires, the largest study of millionaires ever undertaken, by Chris Hogan and the Dave Ramsey team.

Not too long ago, I reviewed the book “Everyday Millionaires: How Ordinary People Built Extraordinary Wealth—and How You Can Too“.

You can read my full review, but to summarize, I found the arguments compelling and in agreement with my own beliefs, but I objected very passionately to the lack of concrete data presented in the book.

The data, based on what was known as the “National Study of Millionaires”, was discussed in detail, but there wasn’t anything in the way of raw data presented there. So one needed to take 100% of the results on faith.

That isn’t okay.

If I were to tell you that all of the people I’ve coached are immensely good-looking, this would of course be true, but naturally, you’d also want to know how this was determined. Also, was this a cause or an effect? Did I only work with good-looking people, or are the type of people who are interested in digging deep to learn and change their money story just really good-looking?

Claims aren’t enough. You have to back up the claims with data.

And there was nothing in Everyday Millionaires that backed up their claims.

Months later, that changed. The Dave Ramsey team, who undertook the study, released the full study to the public.

It was $10 and available as a PDF, and I was happy to buy it and see all that detailed data contained inside.

Read on to see what I found.

[Read more…]

How to create buckets in an Ally savings account

Awareness

Ally has just added the ability to create Buckets, flexible sub-accounts that allow you to save for particular goals. Here’s how to use them.

I guess you could say that I’m a pretty big fan of Ally.

Maybe it’s that I like their marketing campaigns. Maybe I like their activations at conferences at FinCon (like when they gave out 3-D printed piggy banks).

Maybe it’s that they are so fundamentally better than my other online savings bank experience.

Maybe I just like the color purple.

Ally isn’t without its faults. The biggest fault, historically, has been the difficulty in setting up multiple savings accounts.

When I first signed up, the process was laughably complex. They eventually made it a little easier, but still, the process was pointlessly obtuse. I don’t want multiple savings accounts. I want a single savings account and I want to be able to subdivide it into buckets.

Well, seems they’ve finally listened. I don’t want to take all the credit, but I did talk to them at an event to register my grievance, so I’d like to think that I had some effect. #influencer.

An email I received about buckets and other less-relevant things

Ally is now using buckets. Let’s take a look.

[Read more…]