So I saw The Corporation, I saw Inconvenient Truth, and I know about how Halliburton is this really evil company and so is Merck. It’s enough to make you swear off investing forever, and in fact one woman in my (former) investment club did just that.
“It’s all dirty!” she cried, “I’m outta here!” I empathize.

There’s little old me with my middle-class income on the one hand. There’s great big corporations we love to hate on the other. And somehow I need to bridge the two if I hope to retire in a manner to which my dachshunds are accustomed.

I believe there is a way we can stop holding our noses as we embark on the journey of reconciling our personal values with our wealth-building goals via corporations.

1. Consider this: Just like the in the mix of humans, there are in fact some lousy corporations, but also some pretty wonderful corporations (I have a crush on Apple for example), and just like humans, even the good ones may have asymmetries, areas where they screw up until someone calls them on it (like Apple who got their knuckles rapped about labour practices in their Chinese ipod factories). Let’s allow for that – a measure of imperfection that we can live with.

2. Let’s subscribe to the philosophy of changing from the inside rather than critiquing from the outside. I’m not suggesting we take on the truly dreadful companies, of course. But if there’s a company that’s doing well, perhaps with an area or two that could use improvement, let’s support what they’re doing right, and use our shareholders’ votes to move it further in a good direction.

3. Let’s avail ourselves of the life-giving investment options available to us right now, for instance:

A. Looking for something ultra secure? Citizens Bank of Canada offers Shared World term deposits with terrific rates, and every penny of your principle goes towards micro-credit lending (providing financing to small, family businesses in developing countries.)

B. More interested in mutual funds? Many firms now offer funds that include only companies which put corporate social responsibility on the table with profitability. Some are quite diversified, others are quite focused, for example, Criterion’s brand new “Global Clean Energy” fund. Check out www.socialinvestment.ca to start exploring the possibilities.

C. Are you a do-it-yourself-er like me? As of this spring, there is a new ETF via IShares that tracks the Janzti Social Index fund, which in turn consists of 60 canadian stocks meeting Michael Jantzi’s social, environmental and governance standards. The symbol is XEN, it has an MER of 0.5% and as of today’s date is selling in the low $20’s.

Each of these is an easy starting place. Whether we prefer to leave our wealth in the hands of a Financial Planner, or prefer a more direct approach, one of the joys of living in 2007 are the many doors open to us. Thanks to pioneers like Jantzi and others, we have options. Let’s take them.

It was in grade two that I encountered the Dunce Cap. I think I evaded having it crown my head but one thing’s for sure: the bright yellow paper cone with the big, black letters D-U-N-C-E C-A-P made an indelible impression.

School was no longer just about discovery, creativity and making friends. It was now also a place demarcating some people from the rest of us. A place of grades. Of pointing out in all kinds of ways who met the bar and who didn’t.

Thankfully we’ve long since figured out that putting dunce caps on 8 year olds is a really lousy thing to do. What we haven’t figured out yet is that judging our worth by the way we handle our money is an equally lousy thing to do.

We all have our particular, acutely sensitive spots regarding our money. When it’s touched, our whole being gets called into question.

For me, it’s bouncing a cheque. I imagine the other party judging me as incompetent at managing my financial affairs. I imagine the other party judging me as, gasp!, so broke my bank account couldn’t handle the $37.50. Neither is actually the case, of course, and for all I know those thoughts didn’t cross their mind. But when it happens, it robs me of sleep, an anxious tail-spin ensues and it takes days to gain perspective. (note. even here I feel compelled to state: It rarely happens! Honest!)

What is it for you?

• Carrying debt? (goodness knows we get enough media commentary on this!)
• Unable to buy a home - a deep-seated Canadian value - in this market?
• No real retirement savings to speak of?
• Guilt about lack of control over your money?
• Feeling like you don’t measure up to where you ‘should’ be, financially?

What I can say is this. You’re in good company. I’ve encountered numerous individuals, fine people – professors, single parents, working class, high income earners – who struggle in this crucial area.

I have a deal to pitch. It’s this. Let’s all give ourselves a break. Let’s all acknowledge that life is messy… hell, we’re often messy… and that our money may be terribly messy. But there’s hope in this mess. It’s September. It’s back to school time.

Anyone who wants can let go of self-judgment, clearly differentiate between our inherent worth and our current financial skills and circumstances, and learn. There’s no fear of grades or measurement. Let’s courageously reclaim our creativity, the thrill of discovery and befriend our finances. What works? What doesn’t? How can we nurture and grow it? How can we manage it in a way that reflects our values?

There are no dunce caps around and neither is there pressure to become top of the class. It’s about a quiet, inner sense of confidence and growing competence. It’s about our money increasingly becoming a blessing to us, and those around us. That’s financial freedom!

(as originally published in Shared Vision Magazine)

I start with a story about Leah. I worked with Leah about 15 years ago, and Leah drove me nuts. She drove me nuts because every.freaking.time I’d say, “I have to do XYZ” Leah would cheerfully interrupt, “no, you choose to”. I didn’t feel like I had a choice. I felt like I was stuck, against my will. Her comments sent my frustration level sky high.

Leah, you were right, in retrospect. I’ve been reading a book called “The Now Habit” which digs deep into the root causes of procrastination, and the author talks alot about the power of the messages we feed ourselves. I draw heavily on his ideas.
Here’s what happens with procrastination. We feed ourselves messages about managing our money (among other things) that either

1. stress us out (I Have to get this done…but I don’t want to), or …
2. depress us (I Should have … or I Should do….but I’m not)

Both result in procrastination. Let’s unpack this a little.

1. The I Have To message.
For example,

* I Have To pay my bills
* I Have To figure out how I’m going to have money to retire
* I Have To get my money organized

Right off the bat, we’re giving ourselves mixed messages: these are things we are forced to do, but if we had free choice, we would not do them. This inner tension is stressful!

Now I don’t know about you, but I don’t respond well to being forced to do anything. The result is that our mind goes into protective mode: fight or flight. In this case, we fight. We resist. We…procrastinate.

What would happen if we practiced a language change, to:

* I am going to pay this bill
* I am creating a plan for my retirement
* I choose to organize my money

This syntax puts us back in the driver’s seat. Our sense of agency, and sense of Self, is back in its appropriate place: in charge.

2. The I Should message.
For example,

1. I should have started saving for my retirement earlier
2. I should have more assets than I have
3. I should have better systems and structure for my finances

Right off the bat we’re giving ourselves a message of inadequacy. We compare ourselves unfavourably to an ideal state. We fall short.

Who wants to feel like we’re falling short? Our mind again jumps in to protect our sense of self, not by fight on the I should have message, but by flight. We avoid taking action on something in which are current state seems so woeful in contrast to the ideal state. And so we… procrastinate.

What would happen if we let go of both the past (our past perceived shortcomings) and the future (the ideal state) and instead used language like this:

* I can begin to prepare for my retirement by ….
* One way I could start to build my assets would be…
* One simple thing I can do to give me greater control over my finances is…

These statements contain no value judgements, but rather, open up space for new beginnings and movement.

Let’s allow ourselves to use this kind of language. Let’s catch ourselves right away when we use dis-empowering self-talk, and instead, adopt effective self-leadership language that moves us out of procrastination and into empowered action.

If you’re ready to take action, there are three opportunities for you below. If you know someone who may be ready to take action, please forward this to him or her (esp. single parents). And if you know Leah, please give her my warm regards and a belated ‘thanks’ for trying to point me in the right direction those 15 years ago.

-nancy

the financial consumer agency of canada did a study last fall on Canadians and their banking habits.

Interesting stuff!  Here’s the link:  http://www.fcac-acfc.gc.ca/eng/Publications/SurveyStudy/Consumer/PDFs/FCAC_GenSurvExec_2006-eng.pdf

Key highlights (how do you stack up?):

60% of Canadians deal with only one bank for everything.  This percentage diminishes in inverse relationship to education levels.  Note:  in 1998, it was 38%!

8% opened or tried to open a new account at a new financial institution last year

59% claimed that their total monthly service fees were less than $10

85% have a credit card;  58% had more than one credit card - 49% have one at a f.i. other than their primary f.i. ; 3.3 million got a new card last year;  45% carry a balance from month to month

46% used the internet for personal banking; 42% used only in-person traditional banking; 25% use telephone banking

6% claimed they had a serious problem with their institution last year = 1.4 million canadians

60% said they find most information about financial matter hard to understand

40% have consulted with family about their finances

41% acknowledged a need for further education about their finances

… and the really interesting stat:  1/3 of us follow a budget closely; 1/3 of us follow one ‘more or less’; 1/3 of us don’t follow one at all…

John entered his second marriage at 38, with a painful secret. He was $25,000 in credit card debt. He always meant to tell Susan, but could never find the courage. John was deeply ashamed both of the $25,000 debt itself (it was consumer debt) and even more that he hadn’t told Susan.

Five years into the marriage, he was pretty sure Susan suspected (after all, a few hundred dollars a month didn’t make it off his paycheque into the family budget, but mysteriously ‘disappeared’ each month), but still didn’t feel ready to discuss it.

John came to me wanting to get really organized with his spending, and make a plan to shed the debt. How would you suggest he deal with his secret?

You’re a debt-phobe, he’s got ten credit cards maxed out.
You’re a saver, she’s a spender.
You think life is to be lived, he thinks the cheap bottle of wine is just fine.

What do you do when you and your partner have strong differences around money?
This is a tough issue, and it can take years to create a financial M.O. that both parties can live with.

Here are some ways to start working as a team.

1. Take heart. Different ways of handling money can lead to a stronger economic unit than two people who have similar vulnerabilities. Differences usually include different strengths. Forging an M.O. based on differing strengths can ultimately be more successful than two spendthrifts who get along well, as they sink financially.

2. Let go of judgment. When our partner’s financial conduct is threatening to us (and let’s face it: our financial well-being is extremely close to the bone!), it’s easy to point angry fingers. While understandable, this entrenches each person into the position of Judge versus Wrongdoer. The tension is exacerbated, and diminishes the chances of growing together as a financial team.

Try this. At a time and place when you are each relaxed, engage in a judgement-free exploration of each other’s financial behaviour. What drives them? Did your partner’s family lose everything, so now she is unwilling to risk a penny? Or perhaps did one grow up with a lot of money but a lot of bitterness, so now ‘material possessions’ seem empty and undesirable? Very likely, you will discover something that you can relate to, and your temptation to judge will be tempered by understanding and compassion. From there, you can consider possible solutions to your conflicts.

3. As a couple, write out the strengths (yes, the strengths) the other person brings to the table. This can be challenging depending on how far down the road you are, but give it your very best try – as long as you can be sincere. Share your list with your partner, then together, write a combined list of your strengths as a couple. This exercise is based on the business principles of “Appreciative Inquiry,” ie., building on strengths is more effective than repair-based models of organizational improvement. Let there be some joint positive energy around this. Celebrate your combined strengths. Place the list where you both can see it. Elicit the best from one another.

This may not be an easy path to negotiate. It touches on our basic survival instincts - our ‘rice bowl’, as Steven Covey puts it. It will call for diplomacy, patience, forgiveness and courage - at the times we seem least to have them. Have hope. Consider these exercises a beginning point towards forging yourselves into a money team. You may need extra resources - a couples’ counselor, a seminar on conflict resolution, and above all, time. Avail yourselves of them! Money, like so many other aspects of relationship, can ultimately become a place of confidence, safety and even intimacy together, with dedicated attention and care.

It happens around now, every year. There’s been no long weekend for three months straight. Usually dreary weather. Midway through Sun Run 10K training, and it’s getting hard. And now, one blessed day, the sun comes out. There’s only one response, and it’s called Retail Therapy. Don’t laugh. You know exactly what I’m talking about here: the madness of a grossly-out-of-proportion-to-one’s-means spending spree. An antidote to boredom. Or loneliness. Or SADs (this is Vancouver, after all).

My worst was a ticket purchase … to England the next day … mere hours after a first fight with my then-boyfriend. Two weeks, £2,000 (that would be $8,000 Cdn.) later he and I made up, but boy was my lingerie budget seriously trashed. In fact, so was my whole financial picture.

Therein lies the rub. Retail Therapy, like any other binge, feels great in the moment, and awful the morning after. I’ve learned a few things in the years since England. For my fellow Retail Therapists, I offer the following counter strategies:

1. If I find something I must buy, I give myself permission to buy it in 24 hours (or a month, if it’s a ticket to Italy). This gives my sanity a fighting chance to change my mind. Frequently, the urge will pass in a day. If not, the purchase decision is at least better grounded, and it won’t wreak as much havoc, if any.

2. Address the underlying need. Dissatisfied with my home: Do I need the new couch from Liberty’s, or would re-arranging the furniture suffice? Feeling lethargic: Do I need a ski weekend in Whistler and a new snowboard, or would scheduling a few runs along the seawall work? Dumped egregiously by a boyfriend: Do I need to go to Cuba or … wait … yeah, in that case, Cuba. Definitely. *

3. I’ve figured out the times I will likely be vulnerable, and prepare in advance. Surprisingly, there are good strategies for handling boredom or breakups that don’t require huge cash. Friends, small celebratory actions, intellectual engagements – these and other ideas are high on fulfillment and easy on the budget.

I hope these help. If all else fails, at least, at least, choose a country with a favourable exchange rate. There are lots of them, you know. If only I’d gone to Mexico instead…

*Strike that from the record.

Coach’s note - I found this in my archives, written about 5 years ago.  I still stand by it!

Oy Vey. It’s RRSP Time.  They tell me I’ll need about a million to retire in comfort, but I figure if I just use TransLink (public transit) til death, no longer need to buy pantyhose for work, and holiday on SaltSpring instead of, say, Tuscany, I only really need half-a-million.  $500,000.  Saved.  Ummm, let’s see:  Salary in the mid-$50s … yes, that would take me about ten years or so, if I don’t eat, shelter myself and if I cancel Tier Three Food TV (since I won’t be eating).  Then again, I could just plan to work til I drop.  Or buy more lottery tickets.

Apparently there actually are people who make their full RRSP contributions.  I’m not one of them (and if you are, go away.  Read something else.)   This is for the 66% of us British Columbians who didn’t contribute at all, according to Stats Can (and for the record, the 34% who did contribute only scraped together $2,600 on average).  We’re the ones who have mortgage or rent payments, the size of which would buy a gold-plated house in any other city.  We have childcare payments.  Student Loan payments.  Car payments.  Line of Credit payments.  And then the washing machine breaks.  So that extra $1,000 monthly RRSP contribution comes from … where, again?

What are we to do?  A few ideas:

1.  Define our own terms for retirement.  How will our cash flow needs mesh with the rest of our financial picture?  For example, will we own a home by then?  In what ways might our expenses decrease? Are we striving for an “annual-golfing-holiday in Palm Springs” style retirement or would we be content with something simpler?

2.  Do the RRSP Thing anyway.  It’s tempting to despair on the whole RRSP project.  However, all the talk  about tax-free, compound interest is for real. Don’t be intimidated by all the literature throwing around obscene suggested-$1000/monthly-contributions (I mean, honestly!).  I started with $25.00.  Trust me: your few dollars will start to gain interest, which gains interest, which gains interest etc. etc. Your initial few dollars will start to look surprisingly decent.  Frankly, I’m pretty pleased when I look at my portfolio now. Furthermore, again and again I’ve seen people make small efforts, and be it God, the Universe or sheer luck, through some mysterious means the small efforts result in disproportionate reward.  Even if only standard returns come, saving for retirement, once started, will slowly but surely accumulate.

3. If needed, take out a loan.   This will force savings (I still resort to this tactic. My willpower is as susceptible as anyone’s) and at these interest rates you’d be hard pressed not to make a net gain.  RRSP loans are usually easy to obtain, since they’re backed by the asset of the RRSP, so if you’re ‘credit challenged’ still give this a go.

4.  Get Creative.  We don’t have a lot of models for preparing for retirement beyond accumulating huge income-yielding assets.  But there are other means.  One couple I know very happily moved to a developing country where the exchange rate keeps them in high style.  Church groups and other organizations have come up with interesting co-op living solutions.  There could be many more ways to ‘do retirement’ that don’t require a million in the bank.  (“Logan’s Run” solution is not one of them!)

These are a few approaches to the daunting task of preparing for retirement.  One last word.  All the graphs and investment charts in the world cannot convince me we live in a predictable world.  Making peace with uncertainty in general and retirement in particular may be the most freeing way to think about retirement.  Within that uncertainty, be thoughtful, absolutely.  But be panicked if you cannot make the industry’s recommended contributions?  Not me.  I have payments to make on a sweet, little condo.  A washing machine to repair.  And Food TV to pay for, of course.

If you’d like an easy-to-understand RRSP manual in the form of an e-booklet, send me an e-mail with “RRSP-me!” in the subject line.

My Financial Valentine.  1993. 

It should have been the date of a lifetime.  Mr. Tall, Dark and Handsome, fluent in French, sweet, worldly (a doctor to boot!) asked me out.  We were going to Le Gavroche, surely a Dream Date for my mom’s generation.  For me in the 1990s, It was my Worst Nightmare.  Granted, he was a doctor, but that didn’t guarantee he’d pick up the cheque, and I simply didn’t have Le Gavroche kind of money.  But not a chance I’d admit it.

So I put on my sexiest little dress, practiced my French and hoped to hell the Visa-Cupid would magically raise my credit limit that very night.  Needless to say, my flirting skills were diminished as I silently calculated each $25-bite-of-dinner and $30-sip-of-wine. A real conversation killer.

Why is it that we can have sex, bare our childhood-trauma secrets and even get all the way to the altar yet remain coy about matters of personal finance?  What is it about money that is so acutely sensitive?  That feels too vulnerable to disclose to the one who sees us the morning after?   Dr. Phil, any ideas?

All I know is that this matters.  Stress and fights about money can severely cripple relationships.  Financial conflict is one of the leading causes of divorce.

I offer as a Financial Valentine the following points on introducing financial conversation into romance:

1.  Decide here and now that a Financial Discussion, even if awkward and un-sexy, is a foundational part of any grown up relationship.  The time for it may vary, but until it occurs, the relationship hasn’t moved out of fairytale status.

2.  The initial conversation may prove easy, with enough agreement to function well together.  Then again, it may be unpleasant and scary.  Just as in all conflicts, you may need to bring all your negotiation skills to the table (and maybe some good beer).  This is not insurmountable, but a chance to grow as a couple.  It may require  several attempts, and that’s OK.

3.  Eliminate Judgement.  There are usually deep seated reasons for our financial behaviours.  Tread carefully and respectfully.

4.  Stay Optimistic.  This is a chance for you, as a couple, to define and shape healthy operating principles.  Ultimately, this can only serve you well as you get on with the wonder of love and relationship.

Happy Valentine’s Day, and best wishes to those who embark on financial discussion with your partner.   And remember, its never too late to begin a financial conversation, no matter how far down the relationship road you are.

You haven’t lived until you’ve had your visa card cut up. Not by you. In front of you. And in front of the thousands waiting behind you in line. By the lovely young Shopper’s Drug Mart (Broadway) cashier who barely has her driver’s license.  It was 1990 when it happened to me.

Oh, the January Bill Blues. Yes, I know them well.

In December, it’s all love and gifts and joy and cha-ching here and credit card there, and next thing you know you’re in over your head. It may sink in slowly, as the “Minimum Payment” and “Due by” envelopes come (or, now, the more discreet and easy-to-ignore e-bills quietly fill up the inbox), and it dawns on you that you actually need to pay them off, all of them, in the next few weeks. Or it may come crashing down, “Oh, $*#&! What the?!? I KNOW I didn’t spend that much at Jacob”. Then you remember the to-die-for dress. The little gloves. And actually, those were just the items you spent on you, in the bliss of the season. Jacob’s a wretchedly seductive store.

So now it’s January and you’re broke. No more lattes for you. In fact, no more movies for awhile either. Definitely, really definitely, no way can you go to Whistler. If you’re lucky, a few miserable, deprived weeks will do the trick and get your monthly cash flow back on track. If you’re me, you’ll get your visa cut up. In front of you. And the thousands … wait, I’ve covered that.

The point is, it’s particularly easy to mess up financially at certain times of the year. Christmas, vacations, birthdays – they all demand more self-discipline (an antiquated notion that sometimes we should control our impulses) than many of us can muster on the spot. So far I’ve come up with three solutions that work well for me.

1. After Christmas, I tally up the receipts for gifts, wine, new clothes (yes, I kept the receipts) to get a reasonable estimate of what the seasons costs me.

2. I’ve opened a bank account (I’m a fan of Citizens bank of Canada or ING) – no service fees, best interest rate) dedicated to special-occasion spending. Money can be automatically diverted into the account each paycheque, et voila! A small cache as needed.

3. I now visit Shopper’s on Fourth. And I choose the checkout with no one else around.

That was many years ago now. But those January Bills Blues. I remember them well.