One of the best parts of my job is giving clients permission to spend.
A typical situation is a retired client (or couple) who has spent a lifetime accumulating wealth.
First, they followed the fundamental equation for reaching financial independence:
They paid attention to the outgoing dollars.
Maybe they looked for sales. Maybe they always drove used cars. Maybe they took modest vacations. Maybe they did all of these things and more.
They didn’t really feel deprived and they weren’t concerned with keeping up with the Joneses.
For decades they saved and invested — often in employer retirement plans.
At some point it was time to retire – sometimes with multi-million dollar portfolios. The classic millionaire next door.
Then comes the switch – after a lifetime of putting money away for the future – the future is here!
You feed the nest egg for years, but eventually it is time for the nest egg to feed you.
For a lot of people it’s anxiety producing.
I get questions like “Can we afford to turn up the thermostat in the winter?”
Stories like “I tried on a pair of jeans that were PERFECT, but they cost $160 (with a coupon). I thought that was too much so I left them there.”
Both of these anecdotes were from retired multi-millionaire clients.
Every advisor I know has stories like these.
A colleague told me of a detailed meeting he had with newly retired clients outlining their overall highly positive financial picture. At the end, the wife’s only comment was: “All I want to know is if I can buy a new washing machine”.
It gives us a lot of joy to say “turn up the heat, buy the jeans, buy the washing machine”.
To be clear, sometimes I have the opposite conversation about tightening the budget belt. Sometimes even with multi-millionaire clients!
Sometimes I have the permission-to-spend conversation with clients who have well south of a million. It all depends on the numbers.
If it’s time for the nest egg to feed you and you’re feeling anxious –- you might just need permission to spend.
