By Brandon Miller, CFP–
The Columbian singing/songwriting/hip-shaking sensation Shakira is so popular, she only needs one name to be known the world over. The reigning “Queen of Latin music” began performing as a teen and hasn’t slowed down one bit, even though her estate is now worth in excess of $350 million. Asked why she continues to work at a feverish pace despite her wealth, Shakira recounted a childhood lesson of seeing her father lose his business and their comfortable life evaporate. Knowing how easily it could all disappear, she chooses to keep taking the stage.
Hearing her story didn’t surprise me at all. Money experiences from youth tend to have an outsized influence on how we spend, save, and generally handle money as an adult. And even though our financial circumstances may be way different than that of the folks who raised us, we still tend to repeat their patterns, good or bad.
Like Shakira’s fear, losing the money you’ve accumulated is one of the most common worries when it comes to finances. As you age, you have fewer years to earn and make up for any losses you might experience. Even young people with healthy portfolios worry some calamity beyond their control could wipe out their funds for the future. And, of course, the wealthiest are often the most fearful, knowing that they have the farthest to fall if they can no longer afford the private jet and have to fly Ryanair.
If you’re dealing with your own fear-based mindset when it comes to money, I suggest trying a peace-of-mind mindset instead. Spend some of your money getting on top of what is holding you back or perhaps taking risk off your plate altogether. Here are some ways you can do that:
Third-party Assessment
Sometimes all it takes to dispel your fears is having a professional run the numbers for you. Ask them to forecast your situation if all of your nightmare scenarios come true. A realistic look at where you stand and how that plays out over time may help you see that your worries are unfounded.
Money Therapist
For some people, money fears are so deeply felt that no amount of number crunching can overcome them. Financial stress can creep into all areas of your life and make you more miserable than you need to be. Financial therapy—yes, it does exist!—can help you get to the root of your attitudes or negative money behaviors, and change how you think and feel about money.
Guaranteed Income Via Annuities
Annuities may be another useful tool for helping you feel more secure about your money lasting the rest of your life. They get a bad rap (not always undeserved), but the right ones can be a smart investment for some people. Basically, what you’re doing is giving an insurance company a lump sum and they guarantee that you will receive regular payments starting immediately or in the future. Longevity annuities, for example, don’t start paying out until your 80s.
Regular Allowance
This can be a super simple way to recreate the secure feeling of a paycheck. Have a set amount of money you need for expenses and fun taken from your various income sources—Social Security, retirement accounts, savings, etc.—and funneled into one bucket each month.
Fixed vs. Variable Income Balance
If you want to be free of the market’s fickleness, set your monthly allowance by your fixed-income sources. Add up the amount you receive from Social Security, pension, annuities, and other sources of guaranteed income and this is how much you will always have to spend on food, shelter, utilities, and necessities, plus taxes, insurance, and other obligations. Variable income sources like stocks and rental income (your property could become un-rentable) can be used for discretionary items such as travel and even more shoes.
After working hard for your money, you deserve to enjoy it. Shedding your financial fears and finding peace-of-mind might be just the ticket.
Which takes me back to Shakira, still working hard selling tickets and albums to adoring fans. Her hips may not lie, but as for all of us, they may not shake and shimmy as well as they used to one day. Let’s hope that by then, she has made peace with her extraordinary wealth just as she has with her extraordinary talent.
Brio does not provide tax or legal advice, and nothing contained in these materials should be taken as such. 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. It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this program is no guarantee of future results. Any indices referenced for comparison are unmanaged and cannot be invested into directly. 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 November 4, 2021
Recent Comments