Planning Your Invincible Summer

"In the depths of winter, I finally learned that within me there lay an invincible summer" - Albert Camus

Financial planning isn’t just about dollars and cents. It’s also about the choices and behaviors that lead to a happy life. Sometimes that means giving yourself permission to spend. Other times it’s about discipline, prioritization, and accepting trade-offs. I faced some of those choices recently, and it made me reflect on the nature of happiness, and how we in our role as advisors and financial planners help our clients navigate some of life’s big decisions.

Winter Blues, Summer Dreams

I hate winter.

I mean I really hate winter. The short, gray days and bone-chilling winds wear on me. My favorite activities are golf, tennis, and swimming, not skiing or ice fishing. I’ll take a paddle board over a snowboard every time. It’s why I save up my vacation time for warm-weather escapes from February through April. And it’s why, in the depths of winter, I recently bought a boat. If I can’t have summer at least I can dream about it and plan to make the most of it when it finally arrives.

Unfortunately, boats aren’t cheap. The combination of increased demand during the pandemic and higher-than-usual inflation gave me a bit of sticker shock when I attended the Milwaukee Boat Show a few weeks ago. I was in the market for a modest pontoon boat for cruising on a small lake in Waukesha County, not a yacht with sleeping quarters, but I learned that “entry level” in the boat world doesn’t mean what it I thought it meant.

Nor are boats good investments. A new boat will lose value as soon as it hits the water. One dealer told me to expect a 30% haircut. In the investing world, we’d call that a bad bear market.

So, what was a spontaneous decision to escape the malaise I was feeling became more complicated when looking at the hard numbers. The whole process has caused me to reflect on the reasons I wanted the boat, the nature of happiness, and how we in our role as advisors and financial planners can help our clients navigate these kinds of big decisions.

What Financial Planning Isn’t

I am struck sometimes by clients who hire advisors to manage their investments but are resistant to financial planning. While everyone’s motivations are unique, I think resistance is often based on a misconception of what planning is. Let’s take a closer look at one of these misconceptions and see if we can do better.

“Financial Planning is About Maximizing My Money”

I used to think that’s what financial planning was. You hire someone look at your income, your spending, your savings, run some projections, and figure out how to invest so you end up with the biggest pot of money to “retire well.”

The problem with this is that no matter how big that pot of money is in retirement, it won’t be worth it if you are miserable in all the years accumulating it, or if you don’t use it to improve your life or the lives of others. Instead, at Johnson Financial Group we are more interested in helping our clients maximize their happiness. We believe that money is not an end in itself; it is a tool help you live your best life. A comfortable retirement is one element of maximizing happiness, but so are your hobbies, the things that bring a smile to your face, the moments and memories you wouldn’t trade for a million bucks. Is that a family vacation, a trip to Italy or Greece, a weekly dinner at a five-star restaurant, an annual hunting or fishing trip? It doesn’t matter. What matters is that it gives you joy. This is why we talk about becoming our clients’ biographers, understanding what makes them happy, and putting meaning to money. A financial plan should be personal and emotional as much as rational and achievable.

Trade Offs and True Happiness

This, of course, doesn’t mean spending money frivolously. It usually means prioritizing, accepting trade-offs, and doing some introspection about what kinds of choices will help you maximize your happiness with the resources you have. This is why we often ask clients to create a financial statement of purpose. Verbalizing your purpose and putting it on paper can help you prioritize what really matters.

In my case, in addition to the boat, I would like to remodel or rebuild the old lake cottage I bought last year. Imagining a better house was another way to beat the malaise of winter. I even created an Instagram account to follow local builders and architects. But I soon came to regret that decision as I realized how destructive Instagram envy can be. I started with modest goals but soon began comparing my dreams to people with budgets far bigger than mine. It was already causing me stress before spending a dime.

And the more I thought about it, the more I realized that a bigger and better house might not maximize my happiness at all. I realized that the happiest moments I have had since buying the property last year were all about being in nature or doing things with the people I care about. Watching a fawn grow up in my backyard, losing his spots and gaining independence as fall came gave me joy. Having a friend over and seeing his nephew catch fish from a kayak was great fun. Paddle boarding down the Bark River with a friend and spotting an egret hunting for lunch in the river was a blast. Skipping stones from a sandbar brought back childhood memories. Having family over on the Fourth of July and sharing unexpected local fireworks show a few days later filled my cup. These things cost me next to nothing and not once did I think about a walk-in-closet or vaulted ceilings.

In the end, I decided that the boat made sense for me financially and, more importantly, because it is a way for me to enjoy nature and spend time relaxing with people I care about. The house isn’t nearly as important, and it can wait for another day when the financial strain is less, or it adds materially to what my colleague Joe Maier calls my “emotional balance sheet.”

An Invincible Plan

I came across the quote at the top of this article on my Bloomberg Terminal earlier this year as I was thinking through my plans for the house and boat. It spoke to me in a number of ways, but mostly because I knew I was looking for an escape from the winter blues in things outside myself. But of course, we all know that getting through life requires more than stuff. It requires resilience, discipline, optimism, and saying yes to life when skies are gray. It starts from within.

So too does an invincible financial plan start from within. A good financial planner knows this and will encourage your dreams but challenge the negative emotions that can cause plans to fail. They will remind you of your financial statement of purpose when your actions or desires don’t align with the values you’ve shared. Sometimes that will take the form of modelling the trade-offs of spending vs saving on a spreadsheet, but just as often it is about behavioral coaching.

Building an invincible financial plan isn’t about putting on financial handcuffs or saying no to every desire. Sometimes it is about giving yourself permission to spend. For us as planners, it is always about being an advocate for your financial well-being and, more importantly, your happiness. Even when it’s five degrees outside.