(see image credit at bottom)
Around November of 2020 I made a decision that was a long time in the making.
I stopped taking on new clients with my firm.
Now – before I start to sound like someone I’m not, I should disclose:
My firm is not some mega large RIA.
My family is not independently wealthy (whatever that means).
My decision isn’t permanent, nor is it perfect, nor is it prescriptive for anyone else.
However, after a lot of thought, we as a family have decided that we have Enough as it is, and am choosing not to grow my firm any larger from a client standpoint.
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Again – awkward disclosure – we don’t have “enough” assets, but we do have “enough” income as it stands. And I’m incredibly blessed to have the privilege of a number of things I’ll get into later.
I don’t want to share this and come across as boastful, arrogant, or holier-than-thou, but as I shared the decision with some close friends they all encouraged me to write about it. So if for nothing else, that’s what I want to do: share my thoughts and hope maybe it resonates with someone who can start thinking what’s Enough for them.
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The seed of this thought was planted years ago, probably by so many various inputs I couldn’t start to give appropriate credit. And its first emergence from the soil made its way into the world last December when I wrote about Growing Small.
It took me at least a year to really digest what this could look like for me, and especially in the past few months – at the tail end of a crazy year – for the thought to really materialize into something concrete. In that article on Growing Small, I contrasted the perma-growth culture to what I really wanted in life, and committed to exploring what this idea of growing small looks like for me, my family, and for my firm.
And while I’ve talked about the danger of living in Tomorrowland at the expense of Today, recently a friend of mine – Jake – I thought really put this well in an email exchange:
“As a dad to small kids, I sometimes think that we all have it backwards: we spend our 30s and 40s working hard towards career goals, when in reality it’s this time that’s most valuable with our children! Perhaps we should all coast through our middle years then work hard when the kids start heading out on their own.”
I think he’s on to something. At least for those of us with kiddos.
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We spend our 30s/40s working hard, grinding, and GROWING and then spend our 40s/50s easing off. But it’s during that first stage where our kids are so impressionable, and when they actually want to hang out with us. The second stage they might be out of the house, or at least teenagers who are too cool to want to hang out with their lame parents.
What if we inverted these two stages?
What if we slowed down – if we grew small – in our 30s/40s and then ramped back up if needed in our 40s/50s? Yes: compound interest, yada yada. That is an entirely true point, not only the compounding of our investments, but also the compounding of any businesses we own.
Yet.
I’ll always have more time to build investments and build my business (and if I don’t, I have my term life insurance policy to take care of my family). I won’t always have time to spend with my young kids.
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I also realized something personally that I’ve known in theory for awhile: our personal happiness wasn’t increasing in proportion to our income. Is there less stress? Yes, at times. I can still pretty clearly remember earning something like $30,000 my first year or two out of college, and when I launched my firm in 2017 we earned exactly zero dollars for the year. That relative lack of income definitely correlated to higher anxiety.
The stress has diminished, but the general level of happiness? Not so much. It’s not that we’re unhappy, it’s just that after a certain threshold the correlation between income and satisfaction seemed to diverge. And so chasing more revenue – for us – isn’t necessarily going to lead to more satisfaction or happiness.
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I’m fully aware this isn’t quite as easy for everyone to do. I’m fortunate enough to have a number of things playing into my favor: I own my own business, I have tremendous and loyal clients that span the spectrum from accumulators to retirees, we live in a relatively affordable area, I have no corporate ladder to climb, and my business model allows for recurring revenue.
Not everyone can say the same – I get that.
But a larger part factors in: I don’t desire More. I don’t want to have the largest advisory firm, I don’t want to be in the top X% of income earners, I don’t want to be on the Forbes list.
If I did want these things – and there’s nothing wrong with those that do – I’d have to Do More to Get More. I’d have to hire employees. I’d need additional office space. I’d need to invest more time and more resources to get More clients/revenue/recognition.
And by defining how much is Enough for us – we realized we don’t need anything More.
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Not taking on new clients doesn’t mean early retirement for me. When I take on a new client, it’s rather intense from a time and emotion standpoint to build out a full financial plan, to get to know not just the financial picture, but the deeper, off-the-balance sheet issues such as fears, goals, and dreams. By not taking on new clients, I’m able to focus on the existing and amazing client base – and not have to work the same amount of hours I’ve worked pretty much my entire career to this point.
The goal is to spend that extra time with the kids primarily, but also to scratch some creative itches as well. One of which is returning to some level of cadence here on this site.
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I don’t have any qualms sharing what the Enough figure is for us, but I won’t do it here – and I don’t think it’s necessarily helpful because everyone (including me) has different value sets, goals, and lifestyles.
But I will share – because I do think it may be helpful – how we got to the ballpark figure.
We budget religiously.
Right up there with reading the Bible, scribbling in my journal, enjoying my coffee, and perusing the Wall St Journal, quickly hopping into our budget every morning and organizing/categorizing transactions is part of my morning routine every day. YNAB has been a staple of our family longer than most of our kids. I know down to the penny how much money we spend in all areas of our life to live the lifestyle that we want to live. You can’t begin to define Enough without knowing at least a decently-accurate-estimate of what it costs to live your current and desired life.
We know how much we need to save.
Since launching Fident as a startup, I haven’t contributed much to my own personal retirement, so I have some catching up to do. But I know how much we should be saving, and how much we can be saving for our future goals down the road.
We’ve identified Lifestyle Creep.
Saying anything like we’ve defeated this threat is an invitation to be kicked in the teeth, but we’re aware of it. Yes, certain things cost more over time that we need to plan for, but just because income goes up doesn’t necessarily mean other expenses need to. More frequent travel, higher end cars, larger houses, and more extravagant vacations are a small handful of areas that Lifestyle Creep manifests itself. We won’t be perfect in eliminating it, but we will be diligent.
I stopped benchmarking.
I wrote about this as well before, and although it’s still something I struggle with, keeping up with my peers just doesn’t align with my stated values. When I say peers, I mean fellow advisor friends (and their firms) as well as my own personal friends. I’ll freely admit I still get a twinge of envy when I see certain accomplishments or experience a friends’ new grown-up toy – and that might always be there. But I don’t benchmark and compare as much as I used to. (Deliberate switch of pronouns here as this is something I’m more guilty of than my wife is.)
We’ve delineated money as a Means vs money as a Meaning.
This one is probably the most powerful realization, but also the most difficult to describe. Money has this sneaky way of transforming itself as a currency to a status symbol. If we let money or wealth define who we are, we’ll never come close to Enough, because someone is always going to have just a little bit more. To paraphrase Francis Bacon (or PT Barnum, depending on your source): Money is a terrific tool, yet a terrible tyrant.
However – I also realize that things change, and they change fast. We’ll change as individuals, we’ll change as a family, and our finances will most certainly change. All these plans are written in sand, and we have to remain flexible when things blow up.
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I want to be super clear on one thing: I don’t think growth is universally bad. In fact, I think it can be downright healthy. But it shouldn’t be left unchecked, and also shouldn’t be the default operating system setting. Another friend – Jason – phrased it beautifully:
“Whenever someone asks me how we have grown as we have over the years and says they want to do the same, I always share that is unwise to grow for the sake of growth alone but to do it only if it fulfills a bigger purpose. Find your purpose first and then let that purpose guide your decision-making and what it will look like.”
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I think the beauty – and the challenge – of finance is that very few things universally work well for everyone. Maybe capping clients is right for me, but not right for you. Maybe continuing to compound existing growth is right for you, but not right for me.
I do think clearly defining how much is Enough is worth it, however. It will at least give some guiderails in making decisions that can be done purposefully and not by a universally designed default setting.
Earlier in 2020 I wrote a 5 part email series on what Enough really means, and I have a lot more thoughts to share about it which perhaps I’ll condense into a follow up post.
But in the meantime, I wanted to share some thoughts on the reasons why I made perhaps one of the larger career decisions in my life, with the hope it’ll get other people thinking what Enough looks like in their own lives.
*Image credit to Ashby Daniels & Carl Richards – two of my favorite people in our profession. Check out Ashby’s article here where he explains the sketch created for him by Carl.
**UPDATE: if you want to read some more thoughts on this topic, I recently wrote some more here: Enough- Part 2 and The Fear Side of Enough.