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One of my favorite sayings is that personal finance is much more personal than finance. For years, one of the core principles of our financial planning has been to encourage clients to pay off their mortgage whenever possible. This may seem counterintuitive. The prevailing wisdom of the last decade was to invest that money. Low interest rates fueled the narrative that more money could be made by placing additional mortgage payments in the stock market.

Overall, this was factually correct. Why pay off a 3% mortgage when the S&P 500 returns just over 10% over the long term? Simple math would tell you that the smartest course of action is to put some extra cash into the market. But the best advice isn’t always driven by cold hard math.

For many customers, the convenience of knowing their primary residence seemed like a better option. Eliminating what is often their biggest monthly expense has paid huge dividends in the help and confidence department. Can you appreciate that feeling? The reality is that the “right” decision for the customer had nothing to do with financial dollars and cents, but rather personal satisfaction with where they live.

Steve Buren

The past year highlights that even the “right” decision doesn’t always work out. Traditional investment advice may carry greater risk than intended. Consider the long-held belief that a balanced portfolio of 60% stocks and 40% bonds will help smooth out experienced market volatility. For those who believe in this approach, 2022 has been a tough year. Both stocks and bonds have seen their values ​​rise and fall, and are not always counterbalanced. Rather than reducing volatility, this combination increased it.

It is worth remembering that there are no “right” answers in finance. We never know what may happen in the markets tomorrow, next week or next year. For us, that means we put more weight on the personal side of personal finance. Questions like, “Will it be enough?” or “Am I going to be okay?” gain a deeper sense of security, confidence and well-being. Generating a one or two percentage point higher yield does little to answer these questions or reassure someone that they are on a good path going forward.

A recent reading of George Kinder’s Three Questions for Financial Life Planning offered a framework for exploring deeper questions that I recommend you try with your spouse or close friend. He calls on people to answer three questions.

First, imagine that you are financially secure. You have enough money to cover your needs today and in the future. How would you live your life? Would you change anything? A dream; don’t hold back. Describe a life that is fully and abundantly yours.

Next, imagine that you have just visited your doctor and they tell you that you have 5-10 years to live. You will not get sick or have any “notice” of your death. What will you do with the rest of your time? Would you change anything in your life today, and if so, how would you do it?

Now imagine your doctor calling and telling you today: you have 24 hours to live. How do you feel as you face your mortality? You might be asking yourself, what did I miss? Who did I miss? What did I fail to do?

These questions envision a world where all your basic needs are met, allowing you to focus on what’s important. Spend some time really thinking about your answers and exploring what really matters to you. The answers may be surprising.

Questions like these allow us to get to the heart of what matters. Money is important, but remember it’s a means to an end. What is your ultimate goal? How you approach your finances and overall plan are far more important than your balance sheet. Money is emotional.

As an example, we had a new client who told us that they purchased a property in North Denver several years ago. What was once a blighted area of ​​backyards has now become a hot market, with development skyrocketing as the neighborhood reinvents itself. They had valuable real estate but no plan for it.


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