February 2025
In this session, Morton advisors will help attendees bucket their spending into areas that are most meaningful to them and their lifestyles. For example, how much spending should go toward your memory bank vs. bank account? There are dozens of spending decisions we make on a daily basis, and by having a clear plan, investors will be much more likely to feel empowered to enjoy their wealth.
Here are some key takeaways from their conversation:
Watch previous episodes here:
Ep. 18 How Your Money Mindset Impacts Your Goals
Ep. 17 Estate & Tax Law Changes Might Change Next Year: What You Should Know
Before we start our panel. Show me a hand if you guys are having a wonderful experience so far at our symposium. Now keep your hands up. Now show me a hand. I want you to keep your hands up for a reason. If this is the panel that you've been waiting for the entire day and this is why you came. Thank you guys. It means the world to me. You want this? No. We appreciate you guys all showing up and being here today. But how many of you guys have had a budget before? Anyone? Yeah. Was that an enjoyable experience living on a budget? Now, what about a spending strategy? How many of you guys have created a spending strategy once? Like, what is a spending strategy, right. How do you define a spending strategy? Well, we define a spending strategy as aligning your short and long-term goals with your spending or aligning your spending with your needs, wants, and dreams. Now, one of the things that I think we could all agree upon is that as we move through life, our goals and our view on money evolve. Now, traditionally when you're starting in a career, it's all about the bank account. It's all about accumulating wealth and and saving as much as possible. And then as you move through life, you start to transfer away from the bank account and more into the memory bank. It's all about wealth preservation. It's about creating new experiences and about thinking, what's retirement going to look like and what kind of lifestyle do I want to live in retirement. And we want to take today and kind of challenge that traditional mindset because we think that at every stage in life, you should be able to both contribute to the memory bank and the bank account. So without further ado, I want to introduce my amazing panel. These are two of my best friends and people that I look up to, and they happen to be Morton Advisors. Kevin Rex and Patrice Bening. Kevin, I'm going to start with you. Introduce yourself first and then tell us how do you define yourself as a spender.
Nice to see everybody. Thank you for being here. I for for those of you that know me, are probably just as shocked. Why would I be on a smart spending strategy panel? Because I am somebody that loves to spend money. I would say that part of my kind of fear is that I spend so much on the memory bank, and sometimes I kind of disregard it, don't think about the future, and think about the bank account. And it's led to a situation where my wife and I have taken incredible trips. We get to spend a lot of time with our kids. We feel like we have a lot of nice things and the things that we care about. But, yeah, I think I'm somebody that's a memory bank guy. And it turns into some of the fear around. Well, am I doing enough, for the bank account?
Thank you. Kevin and Patrice, I know that you are much different than than Kevin. So go ahead and introduce yourself and tell us how you define yourself as a spender.
Well, I'm Patrice, I was here for the earlier session, so I might repeat myself on certain things, but I just want to say I want to be more like Kevin. The. So in Morton, we have six, core values, and one of them is enjoyment. Kevin. Rex is Mr. enjoyment. I just want to say this right now. That we appreciate that about him. So I'm not that I'm vastly different that you, but I think my priorities have shifted over the years. So as I am entering my almost empty nester stage, I'm realizing that I've kind of spent my 30s blindfolded. And even though I've worked in the financial services industry, not in this particular role, I did not emphasize my future self. I think as a 20 year old, my 40 year old was far away from me. Really, far. I did not even emphasize or even understand what my future self was going to look like. So I placed a zero emphasis on that. So I feel like I need to play catch up. So I'm on the bank account side of things right now and I'm okay with that. I do try to create probably pockets of fun and I do love fun. But I would say that the bank account is more a priority for me right now.
Great. Thank you. Patrice. And you guys couldn't be any different. And there's no right or wrong to that. And that's one of the great things that we're going to discover in today's panel. But, for me, I don't really spend. So my wife loves to spend she's really good at it. And so I let her do it. But I've kind of figured out a life hack and that's if I'm really nice to her. And I take the kids out for the weekend and go camping so she could go on a spa trip, or I take them to the park and she can go get her nails done. She tends to spend on me. So I mean, it's comes back, kind of comes back. So I that's that's how I theorize spending. But thank you for those answers, guys. Today we're going to be hopefully having an interactive panel. We want to let your guys involvement. So we're going to have a third panelist. And that's going to be Menti. And if you guys look up on that screen, it's going to show you how you guys can join the mentee program. So everyone take out your phones.
We going to have some fun in here. So we need interaction. We need people to participate. So we're going to make this interactive and fun.
We want to know who you guys relate to. So who do you guys as a spender tend to veer toward more towards Kevin, where you're constantly contributing to the memory bank or more towards Patrice, where you're more conservative and thinking about the bank account. So let's go ahead and answer that second question.
Whoa, oh oh. Come on spenders, where you at?
Oh, they're going slow. That's okay. Yeah yeah.
All my sisters I know you all spend. So let's go. Let's go represent.
Oh, no. It's good. It looks like we've got a good balance in the audience today. And one thing that we talked about is, you know, we evolve as spenders over time. And I don't think Kevin or Patrice have, have always been this way. So maybe take a second. And Patrice you first run us through like how you've evolved as the spender and how we've ended up here where you're at now.
So when I was three, I'm just kidding, this, earlier session this morning was around money mindsets and really how our thoughts affect our feelings and our feelings affect our behavior and the decisions we make. So our spending is very much dictated by our mindset. But when I think about myself in my 20s and my 30s and now in my 40s, I'm a completely different person every single decade. I would say that in my 20s there were two buckets for me. There was the needs bucket, and then there was the fun bucket. And it was great buckets to be in. But I really again, I did not give much thought to my future self. And what's interesting is to go down on anatomy and psychology. We all know about our prefrontal cortex. And that's really kind of focused on our long term planning, analytical skills. A judgment, rationale. So what's interesting about our prefrontal cortex is that it does not develop fully until our mid to late 20s. So if we as advisors try to have a long term planning conversation with a 20 year old, it's going to be a very difficult conversation because they cannot even conceptualize what long term planning looks like. So it helps us really reframe our conversations and figure out what to do. Now, I was a different 20 year old because I shared earlier. I bought my house when I was 23 years old, so I was a, mortgage person at 23. Not very popular one probably at that time, but I would say that I made a very important with both my husband and I made a very impulsive decision. And that's kind of what happens with us in our 20s. If you think about my son is in college right now and he can make impulsive decisions without really giving thought about the long term consequences to his decisions. Younger people drive faster because they don't think if there is a, you know, getting a ticket or if you get into an accident, there's really no repercussions around that. So what's interesting is translated to the financial side of things. We don't really make decisions thinking what's going to be the long term effect of that. So for me, the 20s were all about that was let's make money and then whatever. I didn't have whatever I had leftover, I spent it. As a matter of fact, I clearly remember I was I was doing my taxes and, I rounded up my credit card, totals. And I had realized I spent an average of $1,000 a month on just dinners with friends, and it was $12,000 a year. Was the opportunity cost of $12,000. What else could I have done with it? I literally I had no regrets, though I really didn't. I enjoyed every single weekend and every single penny that was spent on those nice dinners. I would not spend $1,000 a month on dinners right now, so that's definitely changed for me. Well, I appreciate them, yes, but that's not no longer a priority for me. The 30s have shifted for me in the sense that I understood financial planning. Kids will do that to you, actually, in a scary way. So I realized that all of a sudden I maybe have to plan for college. I'm even have to plan what happens if my husband and I are not here? So insurance became a thing. Estate planning. Somebody spelled that for me. Not sure what that means. So I would say that all that kind of had to reframe in my mind of what I was going to look like from a spending perspective. So, you know, going from 20 to 30 is where you're in survival mode and I think my 30s were very much about the memory bank because my kids were little. So I would say I definitely prioritize that. And I think if you are in that part of your life or if you have adult children that aren't part of your life, I think it's very important to have that, you know, going for you. But now I'm, you know, really focusing on how really how can I invest in myself. And in a business in my retirement and, and kind of how that looks like for me in the future.
Now, I love that. And you do such a wonderful job kind of articulating that evolution and and being real. So thank you for that that response together. Kevin, what about you?
I'm still caught up in the prefrontal cortex and I'm past my 20s and I'm like, I don't know if mine's developed yet. And then I got caught up on the impulse. And I don't know if most of the guys or what, but like, I'm like, I still want to drive fast and I still want to make quick decisions. So my evolution is going to be a little bit quicker because I don't think I've evolved nearly as much, when I was in my 20s. And I like that you bring up kind of the buckets of it, like you have your needs. And when you're in your 20s, your needs are pretty small. You have an apartment, you have a car and maybe some food, and everything else is like, what can I do with that? And I think today I still kind of feel that same way, which if I have money in my bank account, I'm like, ooh, where can I go? What can I do? And so it's a scary thing where if I see money, I'm like, what can I, what can I have fun with? What's changed, I think, is that my needs bucket has gotten a lot bigger where some of them are actually really needs. And other ones I kind of talk myself into in them being needs. So you think about having children and as we all know, if you have kids, they are crazy expensive. Do your kids need private tutors? Maybe they don't need them, but as a dad, it's like I want to give them every opportunity possible. So when it comes to your kids, all of a sudden everything about them becomes a need and so potentially your needs get bigger. So then therefore your wants have to shrink. I haven't even thought about my future dreams. Well, one solution for me was, well, I'll just make my wants needs and then we're good, right. So from from my standpoint, I think my maturity has come truly by marrying my wife, she has a much longer term vision. She's got big, ambitious dreams. And so we have to take a step back. And now it's a partnership versus just my myself kind of spending money, you know, frivolously whatever I want. So my evolution is not as long. And I think I'm still very similar. But I'm working through how to how do I continue to evolve to, to fill all those buckets. Yeah.
No, I love that answer. And that's very authentic to you to I'll just add one thing on that from my perspective, I when I was reflecting on kind of how I've evolved as a spender, when I, when I look back at the start of my career, it was all about investing in myself. It was very selfish. I wanted to be the next Billy Blanks. And I thought I was going to be a fitness superstar. And, and so I went and got every certification under the sun. I've taught CrossFit classes. I've taught orange theory classes, I've done personal training. I even got my Zumba certification thinking I was going to make myself diverse. But as I realized my dream was to have a family and be able to support a family, you know, I needed to shift what I was investing in for myself. So, helping people is always been a passion of mine and financial planning and investment management. I was able to help people kind of identify those same goals, and create a personalized plan to help them achieve those goals. So I, I still investing in myself. I went and got my, my series licenses, my MBA, my CFP. But then when I got married and started having children, I had less of a urge to invest in myself. Now is about investing in my wife and my kids and making sure they had every opportunity they were able to be exposed to sports, exposed to the arts, be able to swim and dance and sing and do whatever they wanted so that they could have these experience and really identify what they're passionate about. And for my wife, she's a really hard working mom. She travels a lot with work, making sure that she's got the time and the opportunity to take care of herself and be able to go and do the things that she loves. So it's been a transition, a mindset where I was so focused on me and how am I going to put my investments in myself. And now it's like, okay, how can I invest in them so that they can have the same opportunities that I've had?
So thank you guys for for sharing that. I think, when you think about all of these things, it's the foundation of a good spending strategy comes down to we really need to know what our needs, wants and dreams are so that we can have a strategy around how we're going to accomplish those things. And all of you guys have, a pad of paper on your table.
So if you wouldn't mind taking a second, grab the paper and a pen and write down 3 or 4 of your needs, wants and dreams, and then we're going to be able to share them on, on the screen.
And as you do this I'm just going to talk. You guys keep writing. But for me, if I don't write down my dreams, if I don't have a vision board because I am so in the moment, my mom always joked, she's like, you would have been a fantastic garbage man because I would have just loved driving around talking to everybody. Or I could have done like, you could have been anything because you just enjoy what you do, which is true. But that impulsivity, the fact that I enjoy it all, I lose lose sight of the dreams bucket. So as you're going through this exercise, it has been instrumental in changing my life of the needs and wants kind of happen. But for me, I have to write down these dreams. I have to start bucketing these things. So if you can jot down 2 or 3 in each of those buckets, and then we're going to ask that we can go back to the board and see if people are comfortable throwing up different, different words here for identifying 2 to 3 of the needs that they wrote down.
And you want to if you have trouble delineating between wants and dreams, think of your wants. Obviously your needs are non-negotiable. Your wants are discretionary. And maybe I would say short term in nature. You know, if you're thinking about something you would want between now and 18 months from now, and your dreams are very much long term, you know, they're dreams for a reason. But to Kevin's point, putting them on paper, you get closer to bridging that gap between wants and dreams. Because sometimes dreams only stay dreams.
We'll give everyone another minute. And then what we're going to do is we're going to have those who want to throw one of, or 2 or 3 needs, on the mentee, and we'll start to see, you know, if we all have the same needs, different needs.
I like this. Well, since I'm a little girl, clothes have been like, been my absolute thing.
That's a need I'm not not questioning. Just. Oh, yeah.
Wait wait wait. Do you agree with the clothes?
I think we need clothes. Yes, some. Most of the time, I know.
I mean, it was like, I need a habit that I wanted to dress phenomenally. Okay. That started younger, but I couldn't afford what my friends were able to get. Okay. So my. Okay, I'm in. I'm into my wants. Which in my which in my mind are my needs. Okay. So whatever I want clothes this, that and the other. To me they're the same. Wants and needs are the same. How often? Okay. However, I now know that I don't know how long we're going to be around and we have investments, but I know being conservative is an important, necessary need. I just have trouble.
Yeah, I think you and a lot of people, we all struggle with that. And I think one of the things that we're going to be talking, oh sorry, one of the things and I look I think June, I think you're spot on. I think it's really hard to distinguish sometimes between needs and wants or even wants and dreams. And a lot of times we're going to have this inner struggle because one stealing from the other, right. Whether it's a want might be stealing from are you sacrificing a need because you want to fulfill a want or you sacrificing a dream? Because in the short term, the wants easier to accomplish? And I think that's a very real struggle that we all that we all deal with. So let's look at some of the needs that we, we've got up on the screen.
I think a lot of these we'd all agree upon, right. Housing, family, friends, happiness, saving for retirement. Then there's others up there that people can argue, go to vacations and travel. This is one where someone would say that's a want and someone else would say, no, no. If I don't travel or have a vacation, I my mental, you know, state or to be able to relax or focus at work or with my kids, it maybe it is a need. And so the one thing we want to kind of start really focusing on is it's going to be like truly different for each of us. But writing it down and then being honest with yourself, the next thing you'll notice too, is if you are doing well financially works good, life's good. You can expand that wants bucket and maybe even shift those into the needs. But as soon as you start struggling financially, you know a massage every week might be a need when things are good, but all of a sudden, you know, yeah, will have to push that back to the wants bucket. So it really is this fluid process. And the more that you can have these vision boards or write down these buckets, the better. I think we're all going to be long term.
Did we want to throw some wants up on the board. Let's just now let's shift it now. We've identified what we consider needs. Now let's throw some wants out there and let's see if we can compare.
New house. Good one. date nights. Music. Re-do the backyard.
So, as Patrice was mentioning, these wants or hopefully short term achievable items. And so I love seeing, like, debt free or like, what was the other one that just flipped around? Security. Like, these are things that you can achieve short term. For some of us it might be longer term. Those might be more dreams. When you think about the time it might take to achieve some of this.
Now, yeah, I think I think that's a great point. Like when you look at redoing a backyard or buying a new house, for some it might be a first house and that might be a dream that they've always had. And that could be, you know, a vision that's a long way away based on where they are in their life, in their career And for others, it's just, hey, you know, we've outgrown this house. We've done a good job of accelerating their career. It's time to get that, you know, that next step up house and that could be more of a want. So it all depends on where we're what stage of life are in.
We're really it strikes me as that if I look at all these wants, there's a conflict. We want vacation and we want to have a nicer place to live, but then we're going to have to make a decision what's going to take a priority. And, I think it was, I have a robust, running group of friends, and we were talking about this because that's what we do, and we're running, we're solving world problems like this. But we actually, one of our friends actually confessed how one year. What what she and her husband do, they dedicated to home remodels. And one year, it's dedicated to travel. And they just do that every single year. And it's working great for them. And kind of my mind, I was like, that's brilliant, because I always think in my mind, well, like, there's no I'm never going to be I really want to take this vacation and I really want to redo, you know, my backyard.
But I never commit to one or the other because it's just I can never, you know, I never plan for it. So I think it's like identifying really what's important, even within your wants, and make it tangible and create the plan for it. I think it's going to you bring it more to reality and make it come to, you know, make it true for you.
And we'll do the last exercise for dreams, too. So I'm curious to kind of see what some of these big, big dreams are. But as we do, you bring up a great point where, like individually, my needs, wants and dreams may be completely different than my significant others or the people in my life that they impact. And so having those discussions in those conversations, because I might say I want to redo the bathroom or I would never say that, sorry, I might want to go on a vacation and my wife might want to redo the bathroom, but it's like they are in conflict. So trying to build out that plan, I think again, I'm beating this point home, but writing it down and and having that strategy so important. So on the dream side, you'll see there's a lot of some people said vacations is needs, vacations is wants and vacations is dreams. So it's going to be this creep between each of these categories. And how do we manage, the process.
Yeah. No. And what what rings true to me is, is I see, you know, the home renovation or getting into a new home. And this is a struggle that my, my wife and I have had, you know, since we, we first got married, we were very fortunate in the fact that we were able to come together and buy a home. Our dream had always been to have a home that we could have, you know, an office and a playroom for the kids and enough space to where we could entertain. And then, you know, a backyard where we can go out and throw the ball around and maybe have a pool. But somewhere that we were proud too, to bring, you know, our family and friends over and able to without being crammed and, and so when we had the opportunity to get a first house, it was much smaller than anything we intended. We didn't have a backyard but were like, hey, like, we're very fortunate we get to come in and start, you know, getting equity in a house and let's set some goals. And our dream was to be able to get to that next house. And now eight years later, we sat and had that conversation and we're like, look, we've done everything we could. We've progressed in our careers, and we've kind of hit the goals that we've set out to. But there are some things that are beyond our control. And with the way that interest rates have gone, real estate markets, we were looking at what that house would cost and what that would do to our lifestyle, what that would do to a memory bank.
And, you know, if we wanted to get that step up in house, we would have to pay, you know, 60% of our monthly income to a mortgage. And we could do that. But that means now we're sacrificing the weekend trips, the kids being able to play any sports that they want. And so we made the decision. We're like, let's stay in this house. Let's keep on providing to the memory bank, right? And, you know, as a financial planner and as someone that, you know, manages investments, you might say, well, wouldn't it be better to be getting equity in a bigger house? And when I mean, it's like, well, you got to really understand what's most important to us at the time. And for us as a family, the right decision was continuing to be able to live a better lifestyle, have fun and invest in our kids rather than just being in a bigger house. So it just identifies kind of that struggle that I think we all go through, and maybe we haven't even thought of it, but our wants and our dreams are kind of fighting each other at times.
And yeah, please, people have dreams. And I'm curious when you're recommending to write or post are dreams are these dreams that you think are potentially realistic, or are they dreams that I know damn well never?
I mean, I would hope that the dreams that you are putting up there are something that you feel you truly can accomplish. Yeah.
It's more of the runway that will take you to get there. But I would say a lot of times I think even this conversation is good because a lot of times we think we can't do the dreams that we set to do, but it takes another person to guide us through that. So having an accountability partner and I think we have some wonderful conversations, I think at Morton with our clients as we kind of talk through some things and, and, you know, people go, oh, well, I, you know, I probably can buy a second home and move to the mountains or go move to the beach, or I can help my child with the down payment on the house. I never really thought I could before. So it's more of making the numbers tangent versus allowing your mind to think that it's not something that will ever be possible. So. Or in that sense.
Thanks, Patrice. You guys want to move on to the next 20 questions?
Let's I'll share. Yeah, sure. So yeah, it's a little vulnerable, I guess. Vulnerable. So for me, when I think through all this struggle and my natural habit of spending versus save, I'll look at my bank account or I'll look at my 400 and K, or I'll look at just the traditional way of savings. And I'll just be honest, there's times where I'm like, I work really hard. My wife works really hard. We've had successful careers like, why aren't these numbers bigger now? I know it's because I'm investing in the memory bank instead of those bank accounts. And I think for the younger generation, specifically, we tend to invest or tend to save maybe a little differently than possibly our parents or even our grandparents did. So it it was a nice exercise and is actually supported by by the team. Right. We all seek each other's financial support as we go through this. But it's like, well, Kevin, let's look at all that you guys are doing. And so part owner in Morton. So I have equity there. My wife has her own business. There's equity there. You don't really see that on paper. And you have a little bit in the 401K or the trust account.
But then we have life insurance policies that have cash accumulation in them. Then you look at we have a rental property. And so you start going through and looking at our net worth. And even though on a month-to-month basis it might feel like, oh, when we're strapped for cash or things get tight at times. But from a savings standpoint, it might not look traditional, but we've actually still done pretty well. And so that was a nice exercise for me to kind of step back and say, you know, even though I feel at times that we're kind of jeopardizing our future and are we going to be okay? Like, where are we going to pull our assets from? And it's like we have different buckets. And so when we think through planning as a younger generation, whether it be kids or grandkids ourselves, it doesn't have to look like everybody else. It doesn't have to be like, well, how much? You know, how much is in your 401 K? There are other ways to accumulate wealth. There are other ways to plan for future retirement. So for us, it was yeah, I still would like to see the numbers bigger because there's comfort in that. But looking at the full picture I think is important.
No, no. And I think when we did that exercise, it really identified that you're we joke about your spending and you know, how the memory bank is a lot is. Yeah. It is for but you're really doing a lot of the right things and you're accumulating wealth in a lot of different areas. And at the end of the day, when you think about those things, and from a holistic financial planning view, if you you've set a pattern and a habit to where you are making small contributions and you're chipping away, whether it's equity in your home, equity in your business, equity in your wife's business, a little bit in your 401K here, a little bit in the 529 there. All of these things. If you look at them singularly it can be very overwhelming. How am I going to pay for a private school? How am I going to pay for college? But once you set up kind of that path and you're on track by just making small contributions, you know, and it's kind of set it and forget it. I'm putting X amount here, X amount there in ten years and 15 years you can look back and like wow, I did a lot of great things. And I made a huge step forward without ever feeling the pressure of having to accomplish any one of them at one time. And I think that's the importance of having, you know, a partner and having the taking the time to really set out what your needs, wants and dreams are and then creating that financial plan so that you can start to do that.
Yeah. We talk a lot about and just from a mindset standpoint, it's not what you make minus your expenses that equal savings. And because if we did that I would never have any savings. Right. So what happens for me, like all of the things I mentioned, the mortgage comes out automatically. The 401K's contributed to automatically. I have to make the payments on the life insurance or the rental property. So for me, I am actually paying myself first in a lot of those areas, even though it might not feel that way. Then we use our expenses and look at the empty bank account at the end of the month. But so like, I think for all of us to think through as we're building for future wants and especially for future dreams, if you don't put that aside first, there's usually almost, almost always going to be a need or want, whether it's a concert or a game or going to dinner with friends, like in the moment, that just feels awesome.
I don't want to miss out on that. And so if you're not paying yourself first, which I think is one of the biggest keys to financial success long term, we should start considering doing that and having it come out automatically. You don't have to be the one clicking the buttons, it just goes and you'll wake up in a few years and be like, wow, I can't believe that little amount every month made a big difference.
Good point.
You caused a trigger like button me with the college conversations. Raise your hand if you have small children. If you have grandchildren. See? All right, here we go. That's most of the room. So I have, my oldest son is a first-year college. My younger one's a junior. And I have to say that I've embarked on an interesting journey learning about all things college. But when it comes to spending, what's very interesting is that I remember 20 years ago when I started in this industry, 20 plus years ago, I remember often financial advisors would tell clients there are no loans for retirement, but there are definitely loans for college. So that was kind of the mantra that we all lead by. So college was one of those yeah. If I don't say for it, it's all good. And I believed it. It was you know, I started a 529. I was very responsible. I think, you know, it's a great tool for college education. The problem was that I had hazard Lee, you know, invest. They don't contribute to it. I did have automation, but then I pulled it back. Then I stopped it. And what's interesting is that when I think about saving for college, and it's all the things I should have done now that's too late for me. But now I have the benefit of hindsight, is if you think about when you, when you're flying an airplane and they tell you, you know, something happens, put your mask on first, then the kids. So it's the same thing. As I said before in college, we put the mask on first. We forget to put it on the kids. So when I think about what's happened right now and when, as I have conversations with my clients and my friends, there's we know there's a just staggering amount of student debt that the entire US population is struggling to tackle. And the problem is that we come to, you know, junior year of high school. What a little Johnny's like, Mom, I want to go to USC, and oh sure, you cs 90,000 a year times for sure we can do that. And it's not it's truly more of an afterthought, you know, like, all right, well, we'll figure it out. You know, we've got like, 30,000, the 529. We'll just we'll get loans. We'll we'll figure it out. And it's, it's it's literally. Yeah. It's like but now you're thinking maybe I should pull back on my retirement, you know, being the contributions or I am not going to do something else. But it made me think truly, at the end of the day, is that when as you have as you help your children save for that particular bucket, have more of the, you know, have conversations with them. Because a lot of times people save for the cost, not for what's available to save. And with my being my dad is the fact that you know, you can decide. You and your partner, you know, little Johnny's going to go to college one day. That's important to us, and we're going to save $150,000 over the next 15 to 18 years. And that's the number you're going to commit to because then you can back into it. But if you're not going to do that and all of a sudden, you know, you think the child's going to end up at a very expensive private school and you come to one of us and we're going to say, well, you're going to have to save $2,500 a month because college in 18 years is going to be $700,000 as a sticker price.
So how does that sound to you? And you know, Patrice, you know, Kevin, Mike, I we can't do that. So then you're going to put that on hold five years go by and then you can come back to us and say, shoot, I still did not save for college. It's still 700,000, by the way. Probably more now because inflation's higher. So it's just kind of thinking about at the end of the day, student loans are not all worth it. So have more of a discussion about what exactly is important to you. What kind of adult are you trying to raise? Also, I think that's that's a bigger question. What do you want them to be at 25 at 30? Do you want them to be a homeowner? Do you want them to start their life successfully? Because coming out of college saddled with debt is hard to be able to. You're treading water and barely staying afloat with that kind of mindset. So just wanted to it's that me, it's been a learning curve. My friends here know that I am all about college planning, so I'm here as a resource at any point for that.
And an amazing resource so that having kids that are four and six, I'm leveraged. I've leveraged her so many times in the past, and I'm constantly asking her questions, where I think I might know the right answer, but it gives me a lot of, a lot of happiness knowing that I have her by my side to help me with those decisions. We do have a couple more Menti questions that we want to throw up there. And then the first one, really comes down to, you know, dreaming. But also we might have different perspectives on when we get a windfall. And we want to see where your thoughts kind of lie. So if you were given $500,000, what would you put this money toward? And it doesn't have to be one thing. Know.
So I might write needs, wants or dreams. Meet with the events you mentioned. I would invest it and.
So if you're going to invest it, would that be investing it with the purpose of fulfilling a need or want or a dream but need? Okay.
I want 500,000. Yeah.
Definitely. That's definitely my dad. Yeah.
You should have sat in on the investment one downstairs.
You should actually be sitting here in my place.
Yeah. Well, so. So I think dreams is is leading. And I will ask the next question because I want to kind of compare to me and yeah, so we now we see that dream was the leader there.
Now we're going to change that a little bit. And if you were given $50,000, what specifically would you spend it on. That's. Still college. Yeah. You got money in it right now. So I know we started in this too. I don't know who we need to go for it. I don't know that I would spend it. Yeah, yeah.
Save it. Yeah. You can stay put it away. Just kind of bury it like a little squirrel. I'm sorry. Oh, cause you can still sit up, you know, let you know I'm one of those people that maybe just for my children. Because I am not really a material girl. It's not really stuff I have to. So the the need in the to, you know, just what whatever need want and dreams. Yeah I remember this. So is like you can't sleep right. Yeah. But it's just it's nobody's business. But you're willing to only live to see what they choose to let you see. So, you know, you always look over at the Joneses, the Schmidts, the Murdochs, the whatever it is, you know, it's at the end of the line. Glad to be political, but I will say we're very fortunate to be here in this room discussing this.
And, this is a first world problem. I know what I'm going.
So I think that's a good perspective that to Jeff's answer, I split it between our kids because in this economy, they're struggling and time is struggling and having children. So I split 50/50 and it's awesome help offset some of those increased expenses that they're having to deal with so that they can even just get their needs.
Yeah, obviously, if someone came into $500,000, you don't have to put it all just in the needs, wants or ginormous bucket. Most of us would probably take a vacation or pay off a little debt, or we would split it a little bit. But what was interesting is a large sum of money gives us kind of thought or the freedom to dream. It's like, okay, well, now I got this, this windfall. What can I really achieve? Where for most people, $50,000 doesn't change their life. And so it's let's redo a bathroom or go on a vacation or it's something usually a little bit more short term. There are some longer-term things on there as well. But it just as you earn money as you come into increased wealth, like having that plan, going back to knowing what those buckets are will just be so impactful.
Yeah. No. And I think this all goes back to the importance, because we're going to beat a dead horse here of of having a plan and writing things down. But you know, we've addressed needs, wants and dreams, but really for holistic planning, you really have to look at the four kind of different areas of, of your world, right? You've got your life, your family, your career and your investments. In each one of these things, you're going to have needs, wants and dreams in. Right. And that's a lot to balance. And there's a lot of decisions to be made. So knowing that, you know, how do you guys partner with clients to kind of help them, you know, understand where the priority should go in, in the context of needs, wants and dreams.
That's really not an easy, easy task to achieve. But one of my, I'm lucky to work with some younger clients, and, I have a young lady. When I say young, if you're under 30, to me, you're going to be younger. And she actually, inherited about $2 million from her grandparents. And it doesn't. What's interesting about that, you might think, what's the big deal? Inheritance? For two years, she did nothing about it. She was paralyzed by the amount of money she received. Not to mention the fact that her grandparents skipped her parents for other reasons and decided to give her all the money. Plus the two real estate properties that are home and, and a rental property. So two years later, she said let the money not really thinking the strategy was it was not invested properly, barely invested. And then when she came to us, it was really kind of thinking, like, what do I do with this? Like, I really don't know what to do with this. So we bucket it. Just like Mike said, there's the life side of it. There's the, career side of it, there's the investment side of it, and there's the family, which for her, she's not quite there yet, but she wants to have a family. So having those discussions really goes. It's not really about money at the end of the day. For her it's like allowing flexibility and she wants to start a business. So she did, it's called cosmic wines. She's assigning wines to your zodiac sign. It's kind of cool, and gets it delivered to your house. But also learning about what money can do for her. Remember, I talked about the prefrontal cortex, and, like, she's having a hard time kind of visualizing the future. She doesn't know if 2 million is a lot or too little. But. And it's hard to even kind of do a full financial plan for her to really understand what the future can look for her. But what we know is doing a spending strategy. How much money are you spending? How much can the portfolio generate? How much money can you make an income? How can you be a, you know, better, be more strategic for your taxes? What kind of savings can you put in place? How can we automate everything? How do we make your life easy so you can focus on the things that are most are most important to you. So I think that's where I get the most joy, is kind of working through those areas of one's life. Probably.
That's awesome. Thanks for sharing that.
Okay, so for me, not everybody in 20 or 30 inherits $2 million. And so one thing that really frustrates me about the financial services industry is we are really well-suited to serve people once they're wealthy. So we said, hey, give us a million bucks, and now you have a partner in your financial future. But what about the 20, 30, 40 year olds that they're successful, they're making really good money, and they have so much complexity in their lives. I don't for those of you that have been through those years, if you think back to raising kids, buying houses, starting businesses that you have questions on, do I put a 30 year fixed on this home or a ten year arm? Do I buy or lease this car? Should I have a side business where I can deduct things and, you know, minimize my taxes? There are so many questions that the young, younger generations have, but they don't have a support from an advisor. So for those of you out there, this is my my little pitch and plug modern decision. So we have an offering now at Morton that I'm so proud of. We started about two years ago and there are no assets under management requirements. So if you think of just even myself or my friends, most of us would be great clients in two, three, five years when you switch jobs and all of a sudden your 401 K becomes accessible, or a lot of us have Bitcoin in a rental property, and we have all these assets and all these things that need advice on, but not necessarily assets under management.
And so for us to work with the younger generation, it's just to be able to have a way for us to partner with them. We like to kind of talk about it being like a personal trainer meets a concierge doctor. So you think of a personal trainer like you have to set those goals, but the problem with most of us is you can tell us what to do, but actually going through with it because life gets busy, life gets complicated. So a trainer is gonna you're gonna have a scheduled time. You're probably going to show up if the trainer knows you're coming versus, oh, I'm going to go to the gym. And it's such and such time. You should be talking about gyms. I don't go to the gym, but I would imagine the trainer hold you accountable and they help you achieve these steps along the way. And then the concierge doctor pieces. Most of the younger professionals don't necessarily want to sit down and have quarterly reviews. They just kind of learn on the fly. Or maybe their colleague said, hey, have you ever thought about this? They can just text us. They can just go through the app and say, hey, does this apply to me? Or I'm at the dealership, do I buy or lease this car? How much should I put down? They're offering me 0.9% for three years. Do I take it all of these decisions that most of us just make, kind of either researching or looking at social media or asking friends, we wake up later and we have this financial mosaic, right? It's not that every decision was bad, but there's really no cohesive program or planning to it. And so for me, I'm passionate about working with the younger generations, the kind of forgotten clients that are super successful but don't have the AUM for the traditional modern model. Excuse me. So working with all these different areas with our clients and different focus, different stresses depending on what's going on in their lives, one month it's one thing, the next month it's another, another simple one. And then I'll stop. But enrollment at work, how many of us just pick a health care plan, right? I don't really like HMO or I like it because it's cheaper. I don't really go to the doctor. I don't really know. Do I need an HSA plan? Who invest in just the target date and their 401 K, because that's what their partner does or that's they they don't know how to really build a portfolio. How nice would it be to have somebody that can help you make those decisions? And so that's that's how we partner with our younger clientele and work through those different life decisions.
And what like as an advisor, what a game changer that's been to have the ability to actually work with these people. I used to get introductions to young professionals, and immediately I'd feel like I was getting punched in the gut. I'd be like, got this person their life's getting more, more complicated. They've got all these moving pieces that are accelerating in their careers. They're buying a house. They're starting a family. They need advice the most, and I'm not able to give it to them, even though they're going to be the perfect client in three years. They don't meet our asset, you know, our asset minimum. And so I have to turn away, you know, potentially amazing clients because of a flawed structure. Right. And so for us to think outside the box and be able to actually work with these young families and young professionals and help them, you know, accomplish their needs, wants, and dreams, I mean, as an advisor, it's opened up a whole new world for all of us. And so I'm just appreciative that we as a firm are able to, to identify that as a problem and come up with a solution. But look, I think, you know, we've talked a lot about needs, wants and dreams about spending strategy today. I think if you if you take away anything, it's that the importance of having an accountability partner, the importance of really knowing yourself and knowing what your own needs, wants and dreams are and then identifying what kind of spender you are, you know, what kind of memories do you want to create, or what kind of bank account, or how do you want to build that bank account? And once you've kind of done those three steps, you can really start to to progress moving forward and to accomplishing those needs, wants and dreams. And if you guys don't want to work with a professional, if you don't have a financial advisor, I think it's it's really good just to start with identifying what your emergency fund is, right? If you're a single, a single-income home, you should probably have at least six months of nondiscretionary spending saved. And if you're a dual-income home, maybe you can have three months and get away with it because there's a little less risk if one of you loses your job. If you're an entrepreneur maybe you want 12 to 18 months because you might be sitting there and have an idea for a business. And thank God, no, I got to go create that business. And you're going to want some runway to do that. And once you've got the emergency fund set up, then the next thing you're going to tackle is free money. If you're working for someone and they have a company-sponsored for one K and they match any amount of dollars, take that free money. So if I say it's a 3% match and you make $100,000, make sure you're contributing $3,000 in there because that $3,000 automatically becomes six. So don't turn away free money. Once you get past that, make sure you're covering all your high interest that if you have debt that's above seven 8%, you shouldn't be investing money. You should be focusing on paying down that debt, decreasing the stress in your life. Once that debt is paid off. Now we can talk about if we still have money now, we can start looking at what our short-term goals are or increasing our retirement contributions. We can start, you know, building a taxable account because we want to put a down payment on a house. We could fund that 529 with those monthly contributions. And if you're kind of following that order, you'll be in a good place to at least have the starting point, the foundation, of, of a financial plan.
Yeah. No, thank you. The only thing there's no right or wrong answer to saying yes, it's having a quote, Taylor Swift, and it's probably not her quote. But if you if you fail to plan, you plan to fail, right? So it's just not having a plan. So yeah. Thank you all for your time. Thank you for being incredible. And thank you guys. Thank you.
