By Let’s be honest: the financial sector makes money by helping people accumulate wealth rather than by assisting them in spending it. That’s unfortunate because the delight of purposeful living, spending, and giving outweighs the emotional advantages of collecting.
However, it is still true that we must build, develop, and safeguard our assets in order to finance our lifetime expenditures, no matter how deliberate. So maybe Dorsey (and Wing) have a point.
The Condescension of the Financial Establishment
The first issue facing the financial business is the morning beverage we choose, as well as the location and method of preparation. You’ve undoubtedly been warned, either directly or indirectly, that it’s wasteful to spend $5 to $9 on a cappuccino, latte, or other caffeinated treat when you could make a comparable alternative at home for pennies on the dollar, right?
You’ve probably also heard that if you have a car payment, a mortgage that lasts longer than 15 years, or a down payment of less than 20% on a home, you are among the financially irresponsible. Unfortunately, Dave Ramsey’s Total Money Makeover wasn’t given to him by God via stone tablets on Mount Sinai (also, it turns out, calling people stupid isn’t the most sophisticated form of motivating).
When it comes to financial wellness, financial planning, or wealth management, the judgment that starts with the financial literacy crowd frequently continues because, far too frequently, the playbook is just someone else’s opinion of what should be most important to you, rather than a method to assist you in determining that for yourself and a strategy to help you finance it.
Maybe that’s why studies indicate that up to 70% to 80% of financial planning recommendations are not followed, and Ramsey’s reported recidivism rate is startlingly high! It’s almost as if financial planning is all too frequently reversed; rather than beginning with your own impulse, it begins with someone else’s.
The Myth We All Believe About Retirement
The fact that financial planning has historically been overly focused on retirement may be one of the reasons this is so prevalent. Pete and I pondered whether retirement was a concept created specifically for the Baby Boomers. After all, previous generations essentially worked until they were unable to do so and relied on Social Security in addition to small savings for a comparatively brief retirement.
Boomers, on the other hand, set out to outearn their parents, which they succeeded in doing, but too many of them forced themselves into unfulfilling employment in an attempt to achieve an idealised retirement that frequently didn’t come to pass.
The majority of Gen Xers adhered to that plan, but newer generations are demanding more of their labour and have a more pessimistic outlook on retirement. For them, money doesn’t have enough significance.
The Wildcard of Longevity
And that’s okay since younger generations are probably right to wonder about the standards for working, saving, spending, and living because they may live long lives. Dorsey asked, “How do you plan for a 60-year retirement?” as opposed to investing for a 10- or 20-year retirement.
Maybe it’s about rethinking how work and life are related in general and thinking about the idea that learning to “live your money” is a necessary skill rather than an elective.
The True Significance of Money
Money is “priceless and worthless at the same time,” according to Pete Dorsey’s conundrum. Since most of us who use fiat money utilise paper, cards, and internet numbers that are only worth what other people are willing to believe they are worth, it is difficult to make a literal argument. However, it bears a great deal of emotional burden in addition to controlling the planet and our world.
Dorsey mentioned a discussion he had with a couple, looking at a net worth statement that was well into seven figures. The wife was crying because her husband was constantly keeping an eye on every dollar she spent. She just wanted to shop at Trader Joe’s without paying close attention to every price tag.
The days of generic one-size-fits-all advice are being replaced by deeply personalised advice that is rooted in people’s relationship with money, their risk tolerance, their aspirations, and their evolving circumstances.
Hyper-personalised advice, which is both his primary advice to human financial advisors to improve their EQ, as many of the quantitative components of financial planning are quickly becoming commodities, and goals for Wing’s AI-assisted platform.
They want to achieve this, in part, by redefining the concept of objectives, which the app refers to as “Experiences.” Indeed, in addition to experiences like “Securing My Retirement” and “Investing My Money,” you can also find “Travelling The World,” “Taking A Sabbatical,” and even “Living Like A Nomad,” with additional experiences being added regularly.
According to Pete Dorsey, the crucial change is that this is a client-led financial plan rather than an advisor dictating what you ought to desire.
The Way Ahead
It takes both structural support and individual integrity to make the basic transition from “Can I afford this?” to “Is this worth trading for something else?” This implies:
- An honest assessment of what truly matters to you
- Visibility into all your financial accounts
- Willingness to prioritise some experiences over others
- Understanding that trade-offs are real: You can do anything, but you can’t do everything
- A regular refresh as life and financial circumstances evolve
With a better marketing budget, the financial sector is gradually, if not reluctantly, realising that accumulating without a purpose is merely hoarding. Advice that helps people live abundantly at every stage of life, not just in some mythical retirement that may never come or may linger for forty years or more, is the way of the future, whether it is given by humans, AI, or probably a hybrid. I think this is due to people’s desire to live off their wealth. And maybe, at last, the industry is prepared to assist them in doing just that.
