Why Financial Planning Is More Personal Than Finance

My wife, Mika, and I took a survey this week about our approach to money. The survey asked us to respond to a number of statements by noting on a continuum whether we agreed or disagreed, ranging from -5 (“I strongly disagree”) to +5 (“I strongly agree”).

For example, here is a sampling of the prompts:

• “If I work hard, I have the right to play hard.”

• “The more money I have in savings, the more secure I feel.”

• “Financial success or failure has a lot to do with luck.”

There were 12 questions like that, and then things got really tough because the prompts were related to how we view money in light of our children, like:

• “It’s important that my children have the same things and opportunities as their peers.”

• “Once my children are old enough to earn their own money, they’ll be expected to cover some of their expenses.”

What did we learn?

Well, we’re a lot alike, but we’re also different. But not just that. We’re also likely different than we thought, meaning Mika didn’t always respond the way I thought she should—I mean, would—and vice versa. But perhaps even more interestingly, I didn’t always respond the way I thought I would!

This is due to a phenomenon known as intersectionality. (Say that 5 times really fast.)

We’ll talk about intersectionality and how it impacts our financial planning—and especially our interactions around money with others—in this week’s FLiP. Meanwhile, Tony brings us an important reminder—that you are not Warren Buffett—along with his thoughts on a divergent week in the markets.

Thanks for joining us!

Tim

Tim Maurer, CFP®, RLP®

Chief Advisory Officer

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Intersectionality is a recognition of the complex, overlapping influences that shape our individual life experiences and, therefore, our worldviews.

For example, I am a white male who grew up in a nuclear family with a father who was an electrical engineer, a stay-at-home mom, and two younger brothers. Mika is a black woman who grew up in a single-parent household, where her mom worked more than full-time to provide for her and her one older brother.

Both sets of parents worked really hard to instill the core values of faith, family, hard work, and frugality. Today, I am a financial advisor, and Mika owns a healthy meal prep and catering company.

So, how would you expect us to respond to the prompt, “Financial success and failure has a lot to do with luck”?

I’ll tell you in a minute, but first—what’s the point? In this case, there are four.

Maybe you’ve already heard this one, but how we do what we do with money goes far beyond the spreadsheet. Sure, who we are when we’re born probably has something to do with it, but how we were raised—and what we’ve experienced, especially in the first 10 years of life—is likely the most potent driver of how we respond to various stimuli.

Certified Financial Therapist Rick Kahler taught me a concept that he and his collaborators, Dr. Ted Klontz and Dr. Brad Klontz, refer to as “money scripts.” The latter defines them as the “typically unconscious, trans-generational beliefs about money that are developed in childhood and drive adult financial behaviors.”

For example, how you respond to a homeless person asking you for money is driven by a money script—that may or may not have words attached to it—that might say, “Nah, they’re just going to spend it on booze or drugs” or “I must give to those in need” or “Look at him in the eyes to be sure he’s seen as a person.”

These responses are neither right nor wrong; they just are. And, it is through recognizing them that we can question whether or not our gut feelings are consistent with our beliefs and values—and yes, we can change our money scripts if and when discovered and desired.

Simply put, just as no two people experience life the same way, no two people experience money the same way. Life experiences—family background, education, health, privilege, hardship—create deeply personal financial perspectives.

Not all net worths are equal. I have a good friend who has been very successful financially, for example, and he’s not afraid to show it. His house is big, his car is a head-turner, and his watch collection costs more than four years at an Ivy League university.

Another friend has even more money, and you’d never know it. In fact, she almost seems to bristle at visual displays of wealth. And by the way, both of these people grew up in similar circumstances, and both have been good investors. I would also label both of them as generous. But it’s those labels that can get us in trouble, too.

Rich, wealthy, poor, new money, old money, stingy, spendthrift, aggressive, conservative, spender, saver. While labels may allow us to size someone up quickly, they’re almost always unhelpful oversimplifications.

For example, a very close friend was the first of his lineal descendants to go to college, and he paid his own way. He graduated with a degree in electrical engineering and absolutely fits the stereotype of hyper-frugality and detail orientation for which his occupational peers are known. But he also gives about 5 times more to charity than the average American as a percentage of income. He’s, uh, un-label-able.

Good financial planning may help you save a pile of money and spend it down before running out, but great financial planning gets to know us more and genuinely reflects who we are and what’s most important to us.

Good financial planning must address (at least) investments, insurance, tax, estate, and retirement planning, but great financial planning is translated through the language of life and infused with purpose through a more human model that helps us connect our assets to our aspirations.

All this considered, how do you think my wife and I responded to the prompt, “Financial success and failure has a lot to do with luck”?

Mika, the boot-strapped entrepreneur, scored it a negative three, with negative five representing “strongly disagree.” And I, the experienced financial advisor who has observed hundreds of one-percenters for more than 25 years, scored it a positive two. Yep, I’ve seen a lot of very successful people, and while I have marveled at their hard work and ingenuity, I’ve still seen good timing and serendipity play a major role in their success. But I love the fact that my wife isn’t counting on luck, and I hope our kids get that message, too.

And that’s the real takeaway—financial planning isn’t about scoring the “right” answer. It’s about understanding the story behind the score.

Because behind every financial belief is a lifetime of experiences that shape how we see money, risk, security, and success—how we think about growing, protecting, giving, and living. And when we take the time to unpack those stories—especially with the people we share our lives with—we gain not just financial clarity, but a deeper understanding of each other.

So, what’s your story? And how does it shape the way you see money?

This article was originally published in Forbes.com.

This one will stop you in your tracks:

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“We do not see things as they are, we see them as we are.”

It was a good week to be diversified:

• – 2.66% .SPX (500 U.S. large companies)

• + 0.90% IWD (U.S. large value companies)

• – 4.29% IWM (U.S. small companies)

• – 0.70% IWN (U.S. small value companies)

• + 0.72% EFV (International value companies)

• – 1.40% SCZ (International small companies)

• + 1.65% VGIT (U.S. intermediate-term Treasury bonds

Contributed by Tony Welch, CFA®, CFP®, CMT, Chief Investment Officer, SignatureFD

There has been ample coverage of the Berkshire Hathaway “cash pile.” This WSJ article discusses the outsized cash position. We have fielded questions gauging our level of concern over the Oracle of Omaha’s stock selling. Though we could easily point out that they have been net sellers of stock throughout this bull market, that is irrelevant. Rather, we need to remember that Warren is Warren, and you are you. Like many things we can worry about, we try to block out the noise and consider your financial design.

Berkshire could be raising cash for many reasons, including succession planning, cash inflows from their business lines, lack of “fat pitches” in the bigger U.S. stocks, and more. But that doesn’t mean you should sell your stocks too. We want to keep our Grow capital invested and compounding. And yes, that may mean some drawdowns along the way, but market timing difficulty has been well-researched.

An investor’s super-power is being able to tune out the noise, even if it is the activity of a $1 trillion company, and instead, focus on your objectives and your design to hit those objectives.

Work with Tim and Tony

U.S. large cap stocks may have hit a new all-time high only about 1 ½ weeks ago, but the sentiment has shifted dramatically in a short amount of time. In fact, the American Association of Individual Investors reported a jump in bearish investor sentiment in the last week. 61% of respondents were bearish, while only 19% were bullish. Those are the types of figures you typically see toward the bottom of major bear markets. The Economic Policy Index has been elevated, driven by a spike in trade uncertainty. That is likely playing a role in the sentiment shift.

Additionally, we have seen a major downshift in the projected Q1 economic growth rate. The Atlanta Fed is now tracking a -1.5% contraction in economic growth for Q1 owing to a relative blowout in the trade deficit. That likely has a lot to do with a spike in orders ahead of new tariffs. The Citigroup Economic Surprise Index is now in negative territory, implying that the recent data releases have been coming in below expectations. The Personal Income and Outlays report showed a -0.2% drop in spending driven mainly by a pullback on consumer goods. It would appear that there is something of a growth scare manifesting in Q1.

Our 2025 outlook included an expectation that economic growth would ease this year, but we believe the risk of outright recession remains low, even if the first quarter does experience a trade-driven contraction. Personal income rose a strong 0.9% in January, and PCE Inflation came in at expectations, rising 0.3% on the month and 2.5% over the past year. Though consumers cut spending on goods, they continued to spend more on services, echoing consumer confidence surveys that show now is not a good time to make big purchases like a home, vehicle, or major appliance. There are, therefore, cracks, but corporate profits have been accelerating. Typically, employment remains robust as long as profits are on the upswing.

Positive earnings trends are important, not only in supporting the labor market but also in supporting stock prices. Valuations for large U.S. companies are relatively rich, but it is not uncommon for share prices to run ahead of fundamentals. Historically, if earnings were growing, market corrections have tended to be contained rather than giving way to bear markets. Q4 earnings were up about 19%, with almost the entirety of the S&P 500 reporting.

Just because earnings are strong does not mean we should necessarily expect another in the string of two consecutive 20%+ up years in stocks. It is not uncommon for the third year of a bull market to produce muted returns. As such, our main theme of the year – portfolio rebalancing and diversification – remains the name of the game. Investors were handsomely rewarded for taking concentrated bets in 2023 and 2024, but we do not believe that strategy will be as effective in the months ahead. For now, we believe the weight of the indicator evidence remains bullish, but the backdrop does not appear as favorable as it was this time last year.

Have a great rest of your weekend!

Tim