• Matt Morizio

Change your relationship with money and change your life forever

Step 1: Change your relationship with money

Money is one of those topics behind religion and politics that our society sees as taboo to talk about. So we don’t talk about it. And because we don’t talk about it, we have an unhealthy relationship with it. We get emotional about it. We are confused by it.

We see it as the answer to our problems.

We even use limiting language when we ask questions about money - words like comfortable, enough, terrible: What’s the right amount of money in the bank so I can live comfortably? How much is enough to retire on? I’m a terrible saver - how do I save more?

To successfully use money, we need to first change our relationship with it. We need to see it for what it is: a TOOL to help us accomplish our purpose. That’s all money is, a tool. And it’s used to help us accomplish our purpose.

Think about these stats from a business building workshop I was at last fall:

78% of Americans live paycheck to paycheck

70% have no money in savings

90% have no clue what their biggest expense is in their household

94% fail a financial literacy quiz

67% of Americans can’t pass a basic finance test

10% of Americans collect 50% of ALL the income

10% of Americans own 84% of all the wealth in the country

Now zoom in on two of these statistics: 90% have NO CLUE what their biggest household expense is and 10% of Americans own 84% of the wealth in the country.

We are so brainwashed by society’s mandate not to talk about money that 90% of us, because we don’t talk about it in our own homes, don’t even know what our biggest expense is.

But some do talk about money regularly - probably about 10% if I had to guess…and they make up 84% of the wealth in our country.

It’s not a coincidence.

We get a hall pass for some our mindsets, though. They are not all our fault. The brainwashing started for us as kids.

Watch, I’ll show you. Finish these sentences. "A penny saved is a penny…..” Wrong - it’s a penny. “Find a penny pick it up, all day long you’ll have good….” Wrong, you’ll have a penny all day.

And as the late, great Notorious B.I.G. put it, “Mo’ money mo’…..” That might be true, but it doesn’t help our relationship with money. I’d prefer “Mo’ money mo’ freedom,” or “Mo’ money Mo’ choices.”

With money as a tool, the more you have, the more options you have to positively impact lives around you.

I’m no different. I played minor league baseball for 5 years, and I never earned more than $10,000 in a year (which includes money made from offseason jobs as a substitute teacher, kitchen cutlery salesman, snow plower, window washer, baseball instructor, and more). Having no money was stressful.

Then I was released. I started life in the real world, surrounded by real world problems and real world influences and real world scarcity mindsets. I made $42,000 my first year, and instead of feeling rich because that’s probably 5x more than I ever made in a year, I started to worry. At the time, I recently had my first child and never seemed to have enough.

And it’s true - raising a family on $42k in the Greater Boston area isn’t easy. It probably isn’t enough. But I grew my income over 300% in four years, and guess what - I still didn’t feel like I had enough.

A couple years ago I made a career change and took a pay CUT. Talk about scary. And it got worse, financially….at my lowest point, my monthly income was less than half of what it was just two years ago…and now I have 5 kids and a wife to support on that temporarily shrunken income.

But you know what else changed these last couple years? My relationship with money.

Now I see money as a tool, and I’ve used it to invest in myself and others.

I’ve overextended myself and taken chances, but it’s because today I buy based on worth, not cost. It’s a subtle nuance, but it makes all the difference.

I live with credit card debt right now (which isn’t a viable long term solution by the way). My bank account occasionally overdrafts. It’s stressful. It’s hard.

I’m writing this as a financial advisor giving you bad examples of how to live your life financially….on paper.

But life isn’t lived on a piece of paper. My situation isn’t forever. And neither is yours.

Money is a tool. Sometimes my toolbox is light; other times there are tools in there.

But in my career today I can positively impact lives like very few careers allow. I can literally change the trajectory of someone’s future. As my business grows, so will my income, which means I will have more tools to positively impact the lives around me.

And that makes the struggle worth it. I don’t worry about price. I’m after worth, and that’s a healthy relationship with money.

Step 2: Set goals for your money

Now that we control our money, and our money doesn’t control us, it’s time to set it to work. But before we invest a dime, we need to figure out what we are trying to accomplish in life.

It’s time to set goals for this tool in our toolbox. And when it comes to goal setting, I’m a huge believer in specificity. The more specific the goal the better.

Some goals will be way, way off in the future. It’s ok. Start creating a road map today. I, for example, want to one day own a coastal Maine home where I can offer all expense paid vacations to families who can’t make it happen on their own.

That might not happen for a while, but I’m planning for it today.

Other goals may be near term. For example, I want to begin an addition on my house in the next 12 months. I’m not investing that money the same way I’m investing for my long term goal.

But it’s the act of setting goals that makes the investment strategy clear.

An investment strategy without a goal is like a diet or workout routine without a desired outcome. Eventually, without specificity, it will fail.

Step 3: Invest accordingly

Asking me “How should I invest my money,” without any other context is the same as introducing yourself to a nutritionist and asking, “How should I eat?” or asking a strength coach “What should I do for my workout?”

Without more information, we can’t give you the most appropriate answer.

For example, some people are not emotionally equipped to deal with volatility in their account, even if aggressively growing their money is, on paper, the best thing for them. Likewise, some people, on paper, shouldn’t invest aggressively at all, but maybe their goals and personality mandate a more aggressive than normal investment approach.

Regardless of how your money is invested, here are two key points to help you with any investment strategy in the future:

  1. From day 1, you can either do it yourself or you can hire someone. Those are your two options. If you’re someone who loves doing things on their own, you will either want to open your own online brokerage account or hire an advisor that is very hands on with your investments who can keep you involved along the way.

  2. No matter what you invest in, you will either be trying to grow your money or trying to make your investment pay you, or some combination of those. Real estate, stocks, bonds, fine art, baseball cards, personal businesses, venture capital, private equity, and on and on - they all fall into one or both of those two categories.

And lastly, when investing, here is my final advice. No matter what you choose to invest in, if you cannot answer these three questions BEFORE you invest a dime, don’t even think about starting: What do you buy? When do you sell? What do you reinvest the proceeds from that sale in?

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Investment advice offered through Beck Bode, LLC, a fee-only Registered Investment Advisor in the Greater Boston area.