When he isn’t leaving silly comments on Daily’s blog, Average Joe can normally be found at Average Joe’s Money Blog (creative names aren’t his strong suit), where he writes about saving money, staying motivated and whatever else he finds humorous that day. He’s also co-host of the podcast Two Guys and Your Money.
I’ll bet you have problems.
Major money issues.
Sometimes it’s hard to sleep.
When your credit card gets denied do you smile and tell the clerk, “Oh, I gave you that card? The strip doesn’t work right.” Then do you hand over the next one, hoping that this one has a “good strip?” I’m sure the clerk never realizes that by “good strip” you mean “one with money available.”
Maybe you make a ton of cash, but you’re behind on your taxes. You haven’t paid them in three years and you know, deep down, that it’s only a matter of time until The Man catches up with you.
Worse yet, your problem might be that you just don’t understand all the terminology of investing. Like one of my favorite songs from the band Camera Obscura: “I should be suspended from class, ‘cause I don’t know my elbow from my ass.” Maybe you’re just hoping someone will take control for you.
But this class is your financial life. And it’s not graduate school…this is more like Personal Finance 101. Yet you still don’t know.
Do any of these sound familiar? Are any of these partly the reason why you thought you’d read Add Vodka? Maybe glean a little financial knowledge while Daisy entertains you?
It’s a Good Start.
First, Daisy’s very funny. Second, she owns a good head for money. She can teach without preach. I need to learn that lesson.
Here’s the thing: I was that guy. I didn’t know about money.
Let’s go stronger, Joe: I was clueless.
So, you know what I did about it.
I became your financial advisor.
…okay, maybe I wasn’t your advisor, but I was an advisor. I managed $60M dollars for clients. I worked with about 180 families at a time, helping them make financial decisions. I was a fee based guy. You paid good money to follow my lead.
–and I didn’t know much about money. I was the guy in the song: I should have been suspended from class. I didn’t know my elbow from my ass.
Then I made a ton of money, and because I was technically self employed, I owed a lot of tax. I was that guy who didn’t pay taxes for three years. That’s because I owed an astronomical sum and hadn’t really planned for that (again, see “I don’t know my elbow….”)
And, because I owed a bunch of money, my credit cards all were in jeopardy of going away. I had that “Oh, I gave you THAT card?” look down to a science. It isn’t polite to let the lady at Target know you’re praying when she swipes your credit card.
You Can Change
I wish you could have gone into client meetings with me. You would see something uncomfortable but also more than a little interesting: you would have seen people financially naked.
I didn’t meet a person who wasn’t a little self conscious in their financial birthday suit.
Everyone had problems.
1) I worked with a man who had 2.4 million in savings and didn’t know how an IRA worked. He was pretty embarrassed when I showed him that he had an annuity inside his IRA and didn’t need the dual protection. He was wasting over $20k a year in unnecessary fees.
2) One client had over 30 credit cards and $125k in credit card debt. Her husband had no idea (or so he wanted to believe…but I think in his gut he knew something was amiss). We cut up credit cards for nearly an hour before she stopped pulling more from her purse. They just kept coming and coming….
3) One guy owned a business that had created a net worth in the range of $40M dollars. He had to call someone to find out if he had a no fee checking account. He didn’t.
4) A nice family had severe medical issues for two of their sons. They were busy keeping up with the Jones’ and had no savings. They’d been borrowing money from his retirement plan and now couldn’t pay it back because they had to cover the bills. They owed about $18k in taxes.
5) MANY people didn’t understand their 401k plan or work benefits package. Disability insurance? “I’ll check what I’ve got at work.”
6) MOST people didn’t know anything about investing. Zip, zero, nada. And insurance? They’d heard insurance was bad so they really didn’t want to talk about it. Understand it? No. Talk about it? Learn? No.
7) EVERYONE had embarrassing situations to share. Often I felt like a priest in the confessional. I’d learn to listen and nod. If you think I’m judging the people in the above scenarios, I’m not. How could I? I was right there with them.
It All Starts With You
We all start from somewhere. I remember waking up one day and deciding that instead of saying “this needs to change” I said “I have to change.” Just a couple words made a powerful difference. I was in control and it was time to take charge.
My situation was bad, sure, but so was everyone else’s! Further, it really didn’t matter if my client had credit card issues or couldn’t understand why an annuity was bad. It was about me.me.me.me.me. Normally I’d call that selfish. This time it was taking control.
Joe’s 5 Steps to Change
I became a change agent. I started working on ME and began thinking about how best to help you. Powerful change required a mindset shift, that, while not as easy as some finance gurus will have you believe, did require only five steps:
1) Take control. Make a decision and stick to it. Example: I will call an accountant today and figure out my taxes.
2) Write down everything. I owned a 529 plan for my kids. I didn’t know how it was invested. I created filing systems for all of my investments. Started using Mint. I needed a dashboard to quickly look in on my money.
3) Talk about money. Enter the conversation. I’m amazed by how open the financial community is on Twitter and Facebook. Not the Wall Street crowd. They’re shrouded in technical jargon that (by and large) is irrelevant. I’m talking about the everyday community. Follow people like Daisy, Jeff Rose (Certified Financial Planner), Financial Samurai, or people openly stumbling through it and winning, like Andrea from SoOverDebt. These people are open about money and because they’ve felt the pain of real life before, won’t judge you.
4) Get comfortable with your financial body. It’s your skin. Be comfortable in it. Own it. Then, just like you would if you were out of shape, begin developing muscle. Read Add Vodka. Stop by lesser blogs, like Average Joe’s Money Blog (shameless plug).
5) Begin eating the elephant. Whenever I would get freaked out by all the change that needed to happen in my life, I would go back to the old joke: “How do you eat an elephant?” Answer: “One bite at a time.” By focusing on only the next step, I’d hold off my anxiety and
The meeting with my accountant led to filing back taxes. That led to a letter and visit from the IRS (Ever had an IRS visit? Even when you’re pretty sure it’s coming it’s still more than a little intimidating.) That opened a discussion on paying my taxes, which was the first step to catching up. One nerve-wracking bite at a time. To get there, I just had to take a first step.
Now it’s your turn. Take the first bite.