The concept of “good-enough” is essential if you are prone to worry, or if your inability to be perfect prevents you from trying to improve!
Because anxious people get an emotional charge from worry. It’s a tough habit to break!
- A good-enough mother, father or caregiver
- A healthy-enough approach to diet and exercise
- A focused-enough approach to your main vocation (parenting, teaching, coaching, business, sport)
As a Dad, my kids are overwhelming. I was forced to let go (of the unreasonable expectations I set for myself). What enabled me to shift was considering my family’s needs… Do my children say they love me? What does my wife say about my marriage? What happens when I’m not around?
In my work and financial life, it’s easy to endlessly tinker – seeking to optimize a situation where constant change is proven to make things worse, rather than better. My best outcome is to crease a simple solution, that’s good-enough, and limit my ability to screw things up.
What to do? I recommend that you don’t take specific advice from me. Find what works for you. However, I share the specifics of what I do because the simplicity of my approach is a useful counterbalance to the complexity that’s sold to us.
Act as if the goal of the financial services industry is to separate you from your money and run from from any advisor that’s not bound by a fiduciary duty to act in your best interest. Be aware that even the fiduciaries are prone to making money at your expense.
Next, focus on the four things that truly matter
- Save – live on less than you earn
- Fees & Expenses – low-cost passive indexing gives you a big edge
- Dollar-cost averaging – create a strategy that runs on autopilot and get on with living
- Be Able To Hold Through Dips – never extend yourself, live debt free, be able to hold through unexpected unemployment
At times, you may need expert advice for:
- Wills, Estates & Trusts
- Tax & Accounting
- Pensions & Retirement
The rules on the above vary by country and state. Get advice on a fixed fee basis and expect to review every five years.
What about portfolio? I aim for something that’s “good enough” and spend my energy staying focused on the tips above (save, low cost, buy a little bit frequently, be able to hold). The more decisions I have to make, the greater the scope for human misjudgment.
I do best when I focus on what I directly control:
- family annual cost of living
- new investment rate
- cost to hold my portfolio
However, what to do about my house? That’s a key asset for most families. Here’s what I’ve told my family council. If I’m gone then help my wife get to…
- Personal residence (10%)
- US Equity Index Fund (30%)
- Int’l Equity Index Fund (30%)
- US Bond Index Fund (30%)
For the young people reading, the 10% constraint means that it will be a long time before you have enough equity for a down payment. That’s a good thing! I waited until I had 20 years living expenses saved, and had watched two recessions from the sidelines.
One of the neat things about triathlon is the ability to be very good at something by combining good-enough performances in each of its components. With three kids and a young wife, something had to give – from the self-centered approach of my years as an elite athlete.
The financial stuff above is based on a short eBook called, If You Can. The book took me an hour to read – you should read it.