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    How to Unmask Your Financial Phobias

    By Brandon Miller, CFP–

    I’ve always loved Halloween for its sanctioned flamboyance, especially here in San Francisco. But this year is sadly subdued. That’s highly ironic given that masks are now de rigueur and we’re living through a year with more horrors than a cable channel Fright Fest.

    The wild uncertainty infiltrating our lives is causing a lot of anxiety about many things that may never before have entered our consciousness. But fears surrounding money, well, they have likely been around since the Chinese introduced the world to currency over a millennium ago.

    In my practice, I try to help clients unmask their financial fears and reveal how money is simply a tool for creating the life they want. Perhaps you recognize your own phobias in some of these common “what ifs,” and can benefit from my suggestions for handling them.

    What if … I run out of money and become a burden on someone—or homeless?

    The biggest reason people fear not having enough money is because they don’t know what they actually have. To calm your qualms, start with a realistic assessment of your assets and debts. And define what you want the money for. For example, are you saving for a retirement that entails traveling the world, moving somewhere cheaper, or turning a hobby into a business? Knowing what you want helps you to figure out the costs and create a plan to get from where you are to where you’re going.

    What if … someone becomes a burden on me?

    Whether a special needs child, an elderly relative, or a beloved friend, if your wealth needs to protect others, I usually suggest a more conservative investment strategy with lower-risk investments since the cash needs to stretch across several lifetimes. Annuities, special-needs trusts, purchasing long-term care insurance for a parent, and other creative solutions may also be options to explore.

    What if … I’m overspending and under-saving? 

    Most of us don’t have unlimited funds, so we have to find a balance between enjoying today and saving for tomorrow. Again, knowing where you stand financially and what you want your money to accomplish is key to easing your anxiety. The math will tell you if your spending/saving levels are fine or you need to make adjustments.

    What if … I make a mistake with my investments?

    If you find yourself paralyzed with indecision, you could probably benefit from working with a financial professional. I can often show reluctant investors the true cost of continuing to do what they are doing versus the possibilities that open up with a diversified investment strategy.

    What if … the market crashes?

    With shocking downturns seemingly every other day, you may be numb to this phobia. If not, look at history to see that over time, the market has recovered. That being said, a well-diversified portfolio where you invest in different asset classes can help you lessen the impact of market swings.

    What if … I don’t trust stocks or the market?

    I’ve had clients that either feared or loathed stocks and Wall Street and avoided them altogether. The problem with this is that it’s tough to achieve diversification without them. All-cash instruments mean you could be safely losing money to inflation and real estate lacks liquidity if you need money quickly. To combat your distaste for stocks, I suggest looking into socially responsible companies that align with your values so that you are investing in something you believe.

    What if … I become a slave to money?

    It’s hard to give up a gravy train that’s rolling your way. On the other hand, how much is your precious—and limited—time worth? Only you know the answer to how much wealth is “enough” for you. Just remember that money isn’t the goal, but instead is the tool to finance your dreams.

    What if … my wealth ruins my children?

    I hope you have instilled good money habits in your offspring so this won’t be an issue. But there are ways you can set up your estate—with trust funds and annuities, for example—that control how much of their inheritance your kids can get at any given time.

    Obviously, your own situation is unique. But self-awareness is the key first step. Taking the time to add up what you actually have and defining what you want to accomplish are the best weapons for fighting your financial phobias. It is too bad that ending this nightmare of a year isn’t so easy.

    The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. Brio does not provide tax or legal advice, and nothing contained in these materials should be taken as such. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.

    Brio Financial Group is a registered investment adviser. SEC Registration does not constitute an endorsement of Brio by the SEC nor does it indicate that Brio has attained a particular level of skill or ability. Advisory services are only offered to clients or prospective clients where Brio Financial Group and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Brio Financial Group unless a client service agreement is in place.

    Brandon Miller, CFP®, is a financial consultant at Brio Financial Group in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.

    Published on October 8, 2020