We have been brought up with the belief that goals and desires are beneficial. How else can we get things accomplished if we do not have desires or set goals? So, how can having desires be detrimental? It all depends on what happens if you do not attain your desires.

Having a desire is beneficial by focusing one’s energy from having many goals (wants) to a single focused direction (desire). For example, children wanting a lot of presents for their birthday may be disappointed if they do not get the one present that they really wanted. So the focus of a desire is beneficial in getting more of what you want in life.

However, what creates the desire is the key. When you have a desire to escape where you are (e.g., desire to become a millionaire in order to escape debt or poverty) or to have more money because you do not feel secure with what you have, then desire can be detrimental. So, should a poor person give up the desire to be rich? No. However, if a poor person is trying to escape where he is at instead of being at peace with where he is, then the desire can be detrimental. If he has a desire to get out of debt and he hits a bump in the road, the key is the reaction. If the person is not tied to the outcome, he will probably see it as a bump in the road and move to get back on track. If the person is tied to the outcome (need to do it or else), he will probably feel depressed about the setback. It is here that desire can be a detriment because the energy needed to get out of debt is focused on the reaction due to hitting a bump in the road instead of focus on getting back on track. So, the key is to not be tied to the outcome. The more energy focused on the task versus the outcome, the better.

Desire can also be detrimental because trying to escape from where we are can be an addiction. Many addictions are centered on a person having a false belief of himself. If you are trying to escape who you are because you define yourself by money, this can lead to greed which is an addiction (needing more and more money to feel good). Yet, you are not your money. If you define yourself by how little or much you have, it is a never ending cycle. This is because if you do not reach your goal, you are going to strengthen the belief that you are not a worthwhile person until you have money. And, if things could not get worse, even if you do reach your goal it will not be good enough. If your belief is that you are not a worthy person because you are broke then having more money is not going to change this because you will find that you need a little bit more to be good enough. It is an endless trap because our net worth does not define our self-worth. Thus, the desire creates a trap to keep our sense of self-worth low. Even having a desire to escape poverty to have a better life for your children is a trap because it is based on “I am a good (or better) parent if I give my child things that I did not have growing up”.

So how do we use the energy of desire without getting trapped into being attached to the outcome?

(more…)

There are many approaches to securing your retirement. The common approach is to save, save, save. Being an actuary, the financial background part of me can not stress enough the need to save if you want to retire at 65. However, for many, the emphasis to save brings a lot of stress and worry. Parents worry how they can raise a family, save for their retirement and save their children’s education, all at the same time. When they retire, they worry if they will have enough money to last through their retirement. They worry if they will outlive their retirement savings or if the market should crash and take their retirement savings with it. They worry about price of prescriptions, insurance and Medicare premiums increasing. There is always something to worry about in retirement, if we want to worry.

A few months ago, I heard a statement from a prominent personal growth speaker/writer that we should not worry about saving for retirement. I was shocked about how someone could say not to worry about saving for retirement. It must be that he does not know what he is talking about, especially because he does not have a financial background. I was thinking that many are not saving enough, so do not tell them not to save. Yet, when I am shocked, it is usually an opportunity to discover something new and different. I then listened again to what he said. He did not say “not to save”, yet to take the worry and stress out of the equation. This is a very important message because when we spend time and energy worrying, we have less energy for life, including energy that can be used to increase our income to be able to make saving easier.

(more…)

Two of my recent blogs have been posted at the following carnivals:

Carnival of Investing with “Variable Annuities: Are they a good investment?”

Carnival of Personal Finance with “Couples & Money”

When we hear of a variable annuity, we may think of them as

• Not a good investment due to the high fees

• A good way to defer taxes

• A way to protect against inflation

• A way to receive a higher investment return compared to fixed annuities by directing your investment (e.g., in equities)

There is confusion whether or not variable annuities are a good investment depending on who you talk to. So, let’s look at some of the logic behind the different viewpoints.

• Annuities can defer taxation on investment gains until you receive the payment

• Investment gains for annuities are taxed as ordinary income, thus forgoing lower capital gains taxes

• Annuities usually have a high commission paid to the broker/agent that the policy holder indirectly pays for in higher management and withdrawal feess

How does this work mathematically for investing in equities?

(more…)

When asked what many couples fight about, money is usually high on the list. Some even say that money is the number one cause of divorce. However, it is usually the issues around money that cause the problems, such as:

• Power & Control – One spouse controls most of the money decisions due to having a financial background or due to bring home most of the income

• Resentments – If one spouse blames the other for their financial condition, the other spouse will find a way to resist changing (rebel)

• Stress – When living paycheck to paycheck, the added strain may have an influence; however, stress is not caused by money rather our reaction to money

• Accountability – When one spouse hides purchases from the other or is not keeping track to a budget, this will create resentments down the road

• Emotions – Money is energy and anger, shame, guilt, fear and other emotions come up in discussions around money (for more see (for more see “Energy of Money” )

I have noticed when people on financial message boards talk about their problems it is usually one spouse is a big saver (wanting to get out of debt) while the other spouse is a big spender (got them into debt). When others hear this, the response is usually the financial pain is not worth it so it is best to get a divorce. For me, money is unjustly maligned. It is up to everyone to determine what their breaking point is for a marriage is. However, if money is listed as the cause of the divorce, my question is was there an attempt to isolate one of the above issues with money to work on it because even having more money will not solve the problem. For example, you may be stressing about money. Yet, even if you have more money, you will find something else to stress about (like keeping your job). Some people like stress due to the adrenaline rush. So if money becomes a non-stress item, they will find another issue to be stressed about.

So what can we do? For me a healthy marriage around money will entail:

(more…)