Episode Summary

Today’s episode dives into the financial aspirations and strategies for the next ten years as both hosts reflect on reaching the milestone age of 40. They explore the importance of investing in community and relationships beyond family ties, the excitement of aging with close friends, and nurturing valuable relationships despite busy schedules. They also address common financial anxieties, the concept of feeling behind financially, and provide practical tips on financial planning. Join Mary Beth and Neela as they blend thoughtful financial advice with personal anecdotes, offering a look into the financial landscape of their 40s and beyond.

What You’ll Learn in this Episode:

• The importance of have long-term meaningful friendships
• How to face the idea of feeling financially behind
• The first step you can take if you’re feeling financially behind
• Why you need an emergency fund and how much you should be stashing away
• How the debt cycle can negatively impact you
• The reason you shouldn’t put all your financial eggs in one basket
• Understanding how to get compound interest to work for your investments
• A few items to focus on as you cruise through your 40s
• Why accountability is essential to improve personal and financial health
• How to find the balance between financial discipline and enjoying life

Stay Connected:

• Connect with Mary Beth on Twitter, Instagram, and on LinkedIn
• Connect with Neela on Twitter, Instagram, and on LinkedIn
• Join the Abacus community by connecting with us on Facebook, Twitter, Instagram and on LinkedIn

Transcript of the Episode

Neela [00:00:14]:

Hey there. Welcome to the If Money Were Easy podcast. The show where we teach you how to expand what’s possible with your money. We’re your hosts, Neela Hummel

Mary Beth [00:00:23]:

and Mary Beth Storjohann, 

Neela [00:00:25]:

certified financial planners & Co CEOs of Abacus Wealth Partners. Today on the show, we’re going to talk about we’re 40. Here’s what we’re looking forward to financially over the next decade. 

Mary Beth [00:00:39]:

Happy birthday. 

Neela [00:00:40]:

Wow, I just said we’re 40. 

Mary Beth [00:00:42]:

We’re 40. We’re both 40. It’s like officially been what, two weeks? 

Neela [00:00:45]:

Two weeks. 

Mary Beth [00:00:46]:

Two and a half. Yep. Oh, my goodness. 

Neela [00:00:48]:

Feeling strong 40 vibes over here. I’d like to remind people that been feeling 40 for like 15 years. But now it’s official. 

Mary Beth [00:00:54]:

Neela’s very excited about 40. I had to, like, warm up to it. Didn’t even want to dip my toe in. But now the water is great and I feel really good here. 

Neela [00:01:02]:

It’s really nice here. 

Mary Beth [00:01:03]:

Yeah, it’s really nice. 

Neela [00:01:04]:

So for those of you in your 30s, eyeing your 40s, don’t worry. It’s great. On the other side. 

Mary Beth [00:01:08]:

It’s great. It is great. 

Mary Beth [00:01:09]:

Okay, I mean, you’re a newbie, but you’ve basically been 40 for 15 years. So what would you say is the best part of being 40? Because we’re so far into it, by the way. 

Neela [00:01:17]:

It was so far into it. 

Mary Beth [00:01:18]:

Right. 

Neela [00:01:18]:

With my two weeks of vast experience, I think at the highest level, it’s trusting myself a little more. I think it’s trusting the work that I’ve done financially, trusting the work that I’ve done professionally, and trusting myself to make better determinations. I think about how to use my time, energy, and resources just overall. 

Mary Beth [00:01:43]:

Yeah, that’s great. 

Neela [00:01:45]:

Yeah. How about you? 

Mary Beth [00:01:47]:

I would say same and said another way and said in my way, giving fewer give a lot less Fs of anybody thinks. But this is a family friendly podcast most times. And so we’ll just say caring a lot less about what other people think. 

Neela [00:02:04]:

Yeah. 

Mary Beth [00:02:04]:

And it feels great. 

Neela [00:02:07]:

Yep. You know what’s heavy? The weight of other people’s expectations. 

Mary Beth [00:02:10]:

Your opinions. Exactly. Exactly. So it’s feeling pretty good. I’m, you know, so much further along than you. I’m almost… 

Neela [00:02:16]:

So seasoned. 

Mary Beth [00:02:18]:

Almost six months in here. So very wise, Very wise. In my. In my 40 something. 

Neela [00:02:22]:

I also love. You and I are both fanatic when those articles come out that are like, hey, you’re in your 20s, this is what you should be doing. Hey, your 30s, this is where you should be. And so I’m also excited to take the bait on a subject like this, but also from a positive spin. I feel like so many of those lists are always a comparison game of if this is not you, if you don’t in this like perfect cookie cutter, then you’re behind. 

Mary Beth [00:02:46]:

Absolutely. 

Neela [00:02:47]:

And so hopefully people leave with, you know, a couple of nuggets. But also, you know, there’s a lot of good stuff happening in this decade too. 

Mary Beth [00:02:54]:

Absolutely. I would say. I just did a presentation this week and I talked about giving generalizations is so hard, especially when we are in a world of personal finance. And so I’ll give you all of the rule of thumbs or generalizations of like how much to save. But it’s just a generalization and it’s. 

Neela [00:03:09]:

Yeah. 

Mary Beth [00:03:10]:

What works for your personal situation. And I wanna be mindful of we are two white women, middle upper class. 

Neela [00:03:15]:

Yeah. 

Mary Beth [00:03:17]:

And so this is our perspective of where we are, what we’re excited about over the next decade. Right. So we are speaking from our perspective and this is not all encompassing into where others are at in their lives. 

Neela [00:03:27]:

Right, Absolutely. 

Mary Beth [00:03:29]:

So we don’t need to talk about all the changes happening to our body. That’ll be a whole different conversation. Right. Cause I mean that’s the one that we have with our girlfriends of like, you hit 40 and everything just starts breaking. But I will say, women listening. 40, get your mammograms. 

Neela [00:03:44]:

Yes. 

Mary Beth [00:03:44]:

We’re both scheduled. 

Neela [00:03:45]:

Yes. 

Mary Beth [00:03:45]:

Get those done. It’s important. Yes. So do that. 

Neela [00:03:48]:

On that note, things that I am excited about is actually really prioritizing my health. And I think that does also come with a price tag. 

Mary Beth [00:03:56]:

Yes. 

Neela [00:03:56]:

Especially if you’re talking about any non preventative procedures or any homeopathic work. A lot of that is not covered by insurance. And so you ended up going out of pocket for that stuff. But I think investing in my health is something I’m excited for because like my 30s I was having babies and so I feel like my whole health life was about the babies and it wasn’t really about me. And so the idea of putting myself first health wise, making sure I’m doing all the preventative things, the you know, mammogram, if you’re 45 and over or if you have a family history of colon cancer in your family, please get those colonoscopies. Super important. But having more latitude and what I’m willing to pay for from a health standpoint to really invest in my health. 

Mary Beth [00:04:42]:

Yeah. I think I’ve definitely felt myself switch over the past few years as well of like Being willing and interested in investing in that space. Right. As our body shift as we age. 

Neela [00:04:52]:

Right. 

Mary Beth [00:04:52]:

Understanding just the health insurance landscape and business of it in general and what’s available to us, and then having to do private pay, but being able to prioritize and save and pay out of pocket. It is a privilege that we can do that. But it is something I feel comfortable and confident in doing. It is something I’ve also pursued in terms of like, what’s the care that I need and taking a very proactive approach in it. Not waiting to go to my general practitioner who says check out these things because they don’t. Right. You really have to take your healthcare into your own hands, especially as a woman, especially at this age. There’s just not a lot of research out there in terms of perimenopause and menopause and the things that our bodies are going through. And so really going down your own rabbit holes and learning and leaning on others and podcasts and such. So I think we talk about this a lot offline. But yes, I think investing in our healthcare, I am looking forward to that. I think prioritizing that. And it feels good to be able to do that again, recognizing it’s not a privilege all folks have. But being able to do that is one of the exciting points. 

Neela [00:05:51]:

What else for you? 

Mary Beth [00:05:52]:

Over the next decade, what’s exciting; so my kids now are nine and seven, almost seven. I mean, over the next decade, I can’t imagine 19. College. College will be right there. 

Neela [00:06:03]:

Right. 

Mary Beth [00:06:04]:

That’s bananas. But I get really excited. I love my kids. I think I love a lot of the ages and like, where they’re at now. Teenager years might terrify me, but I’m really excited to build and evolve our relationships over time. 

Neela [00:06:18]:

Yeah. 

Mary Beth [00:06:18]:

And watching them become more independent. One, how our relationships will evolve to how I will have time back to myself in some other ways in terms of mental space. So that’s exciting. But I think from raising kids standpoint, I’m excited. Excited and nervous to see them grow and evolve through these years. Yeah, they’re going to get licenses during this our kids are going to drive decade. 

Neela [00:06:40]:

But question, do kids still care about licenses? I feel like I’ve heard mixed reviews. 

Mary Beth [00:06:44]:

Mixed reviews. I think it depends on the child, on the kid and their level of independence and their interests. Because I have also heard mixed reviews. 

Neela [00:06:52]:

So what you’re saying Ellie’s going to get her license the day she turns 16 and Luca is going to be taking Ubers until he’s 45? 

Mary Beth [00:06:58]:

Yes, absolutely. That’s exactly how I would say, yeah, yeah, got it. That’s where I’ll probably be driving him around till he’s 25. Who knows? Sorry, Luca. But yeah, I look at that and I think the evolving relationships, watching them grow up, you know, obviously need to prioritize some of those bigger investments like cars and those things. But I’m excited just in terms of being able to grow with them. You know, you’re always a parent, but they become cooler and funnier. Like, yeah, they’re still cool and funny now, but they’re so unique. And so that for me is exciting. But also, again, they’re going to want to be with their friends and I’ll be a little bit sad, but I also feel a little bit great. I was talking with another girlfriend this morning about hobbies. She’s also a planner. She has a part time client service associate working for her. 50 years old. She’s like, she does modern dance. She teaches bicycling every Thursday. She has all these great hobbies. And I was like, tell me about these hobbies. What are they like? She’s like, she’s a great role model because her kids are grown. I just loved hearing about it. Like, that’s the dream, right? Having this solid relationship with your kids and then having hobbies for yourself. So I’m excited for hobbies. Better hobbies than what I have going on. 

Neela [00:08:04]:

I think you have great hobbies. 

Mary Beth [00:08:05]:

I do have great. More time for hobbies? 

Neela [00:08:08]:

Working out, reading and making pies are all great hobbies. 

Mary Beth [00:08:09]:

True. But I work from home and so you can only make so many pies for yourself. So how about you? 

Neela [00:08:14]:

So, following the kids thread, we have always advised that investing in experiences is better than investing in the stuff. And pulling on the kids thread a little bit is being able to do some cool experiences with my kids as they grow and as their interests emerge, you know, and like really kind of picking your spots. So, for example, my oldest just turned eight. He’s very into music. And so we go down these rabbit holes because I’m like a, you know, 90s alternative rock baby, and so sharing all of my, like, old CDs with him. But what we’ve started doing is picking concerts that are kid appropriate. And he is all in. He wants to stay till the very last song. He wants to be like the last guy out of the venue. He’s all about that. And like, we’ve already just this year had some like really special experiences in going to concerts together. And so I’m excited to do more of that. With my kids as they’re personalities keep growing and evolving and they really find their interests and passions and getting to share those with them. 

Mary Beth [00:09:18]:

That’s so cool. That’s cool. I love that you do that. It’s fun. What about personally? 

Neela [00:09:23]:

So personally, it’s really interesting. 40s and 50s tend to be your peak earning decades. 

Mary Beth [00:09:27]:

Right. 

Neela [00:09:28]:

And so you tend to be. And again, not everyone’s path is this, but you’re a little further on in your career, maybe making a little bit more money. You hopefully have been doing some degree of retirement savings, maybe some college savings, et cetera, if you’ve got kiddos. And I think for me, I’ve been very hard on myself financially over the last two decades. Just like you need to do more, you need to save more, you need to do this. You know, it’s no surprise that I ended up in this profession because that was just my M.O. but I think some of it is going a little easier on myself and recognizing that the habits that I’ve implemented are doing what they’re supposed to be doing. I think just going easier on myself and saving extra when I can. But also I’ll never forget like my 11th grade calculus teacher talking about don’t forget to stop and smell the roses. And so I think financially giving myself a little bit of a break and being able to do those experiences with my kids and not feel like I have to save every extra dollar that I can take my family out to eat or something like that. 

Mary Beth [00:10:37]:

Right. That’s a great one. 

Neela [00:10:38]:

Yeah. How about you personally? 

Mary Beth [00:10:41]:

Personally, I would say on the financial front, trusting a little bit more that it will all work out. 

Neela [00:10:48]:

Yeah. 

Mary Beth [00:10:48]:

Based just on my background and my upbringing, I should say I am very much the one we say in the industry needs a better term, but we call it bag lady syndrome. Right. Living on the street, it doesn’t matter. Like everything goes from like zero to drastic zero to like destitute. Like that’s just where my mind has always gone. And so I have really felt myself in the past couple years, start to ease into an exhale of like, it’s gonna be okay. I’ve been like this constant vigilance around my money as a financial planner. It’s funny. Funny. Not really funny. And also financial planners end up in this industry for a reason. Right?

Neela [00:11:21]:

Right.

Mary Beth [00:11:21]:

Some level of anxiety around there. There’s something that’s why we’re interested. But I think that money anxiety of like, am I gonna going to be okay? Even earning a decent income and saving, it was still like this idea of this constant reprioritization and should be doing more. And you and I never enough, Never, never enough. Never enough, never enough in terms of saving because I just moved the goalpost for myself. And so really leaning into the idea, trusting that we’ll be okay and allowing more spaciousness and same as you, allowing money for the experiences, recognizing the trade offs that I have made to set myself up. We are lucky. And like what we locked ourselves into for a mortgage leaves us with a lot of spaciousness to do some travel. And that is what I’ve always said I’ve prioritized is travel and experiences with family. I didn’t get to travel a lot growing up. And so being able to have those experiences with kids and leaning into it and not feeling bad about it and not feeling like okay by me doing this thing, I’m taking away from savings for future me. Right. And so trusting more is what I’m settling into. I mean, I’m sure it’s just a roller coaster, it’s ups and downs. But I can observe myself easing more into this idea of like okay spaciousness, okay to spend. I do have the savings on autopilot. We’re putting money aside to where it should go. But the idea is it’s always been like I should just be doing more and more and more into savings and that’s like my own self preservation stuff. So being able to set that enough number and know that it will be okay. 

Neela [00:12:40]:

Yeah. 

Mary Beth [00:12:40]:

And focus on other areas. I’d say I’m in a space in my life where I have the least financial anxiety that I’ve ever had, which is really nice. It’s free. 

Neela [00:12:49]:

That’s so great. 

Mary Beth [00:12:50]:

Takes some work.

Neela [00:12:51]:

We see this a lot with our clients. If you’re not saving a dollar, that that’s like a wasted opportunity. 

Mary Beth [00:12:56]:

Yes. 

Neela [00:12:57]:

That also means that like you’re not enjoying those dollars when you’re spending them on those experiences, activities. Have you.

Mary Beth [00:13:04]:

Yeah. 

Neela [00:13:04]:

So that permission, like has two pieces where one, then you have that permission to spend this money and then you just can enjoy it more. 

Mary Beth [00:13:11]:

You can enjoy it. It is interesting, right? I mean it’s human psychology. And that’s why I always say like therapists become therapists for a reason. Financial planners become financial planners for a reason. Everybody has their thing. I mean that’s absolutely it. I am in the same boat as many of our clients are. Right. We do see it with clients all the time in terms of like that anxiety, that guilt around money, that sense of like never going to be enough. Will I Be okay. 

Neela [00:13:29]:

Yeah. 

Mary Beth [00:13:29]:

And having to do the work of what is that from? Where did it come from? Based on what money beliefs was exposed to and then you start to untangle them over time. But yeah, I’m really excited from that perspective financially and I do this, but I think you do as well. I also like seeing our net worth grow. 

Neela [00:13:45]:

Right. 

Mary Beth [00:13:46]:

And I’ve been tracking our net worth for Brian and I since 2011, I think I started. And so I have a great spreadsheet with tabs that go back every three to six months depending on how my anxiety was doing. But I get excited seeing how it grows over time and it does, obviously has ups and downs. Right. That’s why you track it over time. It’s of course depending on where you are in life. But I get excited watching that number grow as well. We have a card donor advised fund. So being able to have more impact there financially, what we can do by putting money aside, impacting others, knowing we have money for my nephews for certain things. So not just that number of here’s what we’re worth, but the amount in the accounts and what they’re allocated for. I’m not like woohoo retirement, but we have other accounts earmarked for goals and seeing how those amounts have grown over time and what those can be utilized for, for either college funds for yeah. The kids or for nephews or for giving in terms of impact in areas we’re looking to create change in that for me is really cool. So I’m excited about continuing that as well. 

Neela [00:14:44]:

I love that because it’s not, whoa, look how much more money I have. It’s, it’s celebrating progress.

Mary Beth [00:14:50]:

Yes. Yeah. 

Mary Beth [00:14:51]:

And I think as you start wherever you are on your financial journey in the beginning it always feels very daunting because as you’re saving and as you’re investing, the bulk of the growth comes from your contributions. And the longer you’re an investor because of the joy of compound interest, the more your growth is what’s making the growth and the more it compounds over time and the more you’re able to see how that wave carries when just time is on your side. So the more you give it time to grow, the more you see the progress. But it can feel hard. And I think that’s one of the hardest things about being in your 30s or being at the beginning of your financial journey is feeling like you’re doing all the right things but you’re not like seeing, seeing the results in the same way because you’re like, oh my Four own kids. Like I just don’t feel like it’s growing that much, but it’s mostly growing from money I’m putting in exactly where we know investing. It’s a long term game. 

Mary Beth [00:15:43]:

Exactly. It’s just time. And so, I mean we’re able to look back now from the seats that we’re in, starting our accounts 20 years ago. Right. What do those look like now? 

Neela [00:15:51]:

Right. 

Mary Beth [00:15:51]:

It is. It’s just time and perspective. 

Neela [00:15:53]:

Yeah. And I know this isn’t quite something I’m necessarily looking forward to, but I think it continues as we talk about kids and dependence is the support maybe on the other side think like now starting to really see parents age or like loved ones, the generation above us seeing the impact in general at this point, they’re able to still be self-sufficient, taking care of themselves, but also just like with an eye of getting those memories, honestly with parents and loved ones and locking those in because you don’t know how many great years they have left. 

Mary Beth [00:16:28]:

Yeah, I’d say there’s a deep respect for like mortality at this point in time, from our 20s to 30s and now we’re at the age we have friends that we lose, we have family members. And so I think the older that we get, you have more and more respect for it and you prioritize those memories and those experiences. 

Neela [00:16:46]:

Right. And then just to kind of follow that too. One more thing in terms of investing in things is investing in my relationship with my spouse. Because like we said, Ellie’s nine, she’s going to be in college in nine years. Like you’ve literally had her in the house half as long as you’re going to have her in her house. Crazy. And just making sure that you’re continuing. It’s so easy to get caught up in work. It’s so easy to get caught up with your kids continuing to make sure that you’re prioritizing your spouse even though it always is hard to arrange.

Mary Beth [00:17:17]:

Right. 

Neela [00:17:18]:

Right? Like I’m still at a point where my kids need babysitters. And so every time we’re trying to do something like it takes a lot of coordination because very few people will babysit three kids. I’m just saying that. 

Mary Beth [00:17:29]:

We talked about this in the past. Like it’s planes, trains and automobiles for us to actually get childcare, for us to go on a trip. 

Neela [00:17:33]:

Right. 

Mary Beth [00:17:34]:

Together we have babysitters for date nights. But prioritizing the trips has been really. 

Neela [00:17:39]:

Yeah. 

Mary Beth [00:17:40]:

Good for our relationship. And it takes so much work to make those happen. But they are easier as the kids get older. Right, right. As the kids become more self sufficient. You know, you always have that pull, though. And I don’t know, we know parents that are in their 50s and 60s. Like, there’s always that idea of missing the kids. And I can’t imagine. I mean, I’ll get there, but I can’t imagine a point when like Ellie’s out of the house, Right. Where I’m just like, we’re going on trips and I’m not worried about if she’s missing me because I’m missing her actually. And she doesn’t care because she’s off living her life. Yeah. We’ll get there though. Right. It is a balance because you do see a lot of relationships deteriorate after the kids go off to college because they haven’t been invested in during that time. Right. Because it is all about the kids and so not prioritizing the relationship. And you’re two completely different people by that point in time. 

Neela [00:18:26]:

Yeah. I will say that the clients who have gone through their 40s and 50s and 60s together, their favorite expense is being able to travel with their kids because it’s concentrated time together. They love to be able to treat their families if they can. But those are like the highest ROI moments where it’s the group travel. Because again, experiences. 

Mary Beth [00:18:50]:

Yeah. I would say in addition to the romantic relationships, another thing that I’ve really tried to prioritize and will continue to prioritize is relationship with friends. Like girlfriends, like having a steady group of friends. My friends happen to be spread out all over the country. So making sure that I have time to travel with them in different ways throughout the year. I don’t have the friend that I can run to Target with. I don’t have that necessarily. But I have people… 

Neela [00:19:15]:

Who are you kidding? You don’t have time to run a Target? 

Mary Beth [00:19:17]:

I don’t actually. I’m always. But I can go do the drive pickup. But let’s be honest, that’s mostly Brian as well. 

Neela [00:19:25]:

So it works out. 

Mary Beth [00:19:26]:

Just placed an order today and then had to ask him to go into the store because I forgot to add something to the cart. But that’s just life. But I would say, like, relationships with friends is really important and being able to have that. We talked about community before and so investing in that and continuing to invest in that and how that evolves. Right. Right now it might be around the kids because kids are young and they’re able to play together, but being able to connect and maintain those in the long run. I remember my parents friends, as we were growing up were the parents of my friends. And it was just a great big group. But then kids get different interests. They grow up. And so making sure that you’re anchored in those relationships with those and you’re not just anchored only because of the kids. Again, making sure that you have those interests and you find those people you’re connected with beyond the children is, I think, really important.

Neela [00:20:13]:

I love that you said that. Just cultivating those relationships. It’s really cultivating the relationships that really matter because you have scarce time and you gotta pick your spots. And so, you know, like you were saying, like, giving fewer Fs. It’s like sometimes relationships run their courses or we’ve talked about boundaries in another episode. Sometimes you need to put those up. I can’t give as much as I gave in my 20s because there’s just more constraints. And yet the friends that, like, I keep so close are the ones where you might not talk all the time, but then you just kind of slot right in and everyone’s just excited instead of keeping score. 

Mary Beth [00:20:47]:

Exactly. Exactly. Yeah. And so I think that excites me. Aging with my friends is exciting. 

Neela [00:20:52]:

Yes. 

Mary Beth [00:20:53]:

Aging together, even being able to kind of talk about and learn from each other with what’s happening with our bodies, but just like, seeing how we’ve evolved over time. And it’s so nice to have you get friends at different ages, but the people that you span years of your life, decades of your life together, that’s really cool and really special to have. So that excites me as well. 

Neela [00:21:10]:

So I want to make sure we also talk about. We’re obviously both financial planners. We started doing a lot of the things that financial planners recommend. Early saving, investing, building careers. We obviously run a company, want to make sure that there’s some good, tangible takeaways if people are feeling behind. And I think also to just validate the idea that it’s pretty common for pretty much everyone to feel behind at different points in their life or just continuously, because it’s hard to avoid the comparison game. There’s always somebody who’s further along. And so just know again, you are going through your own journey and it’s never too late to start it. 

Mary Beth [00:21:45]:

Absolutely. I want to go back to this, but I just thought that you had a bullet point on here. We didn’t touch. And I’m very excited. Midlife crisis spending. I’m excited about that. We didn’t talk about it. I don’t know if it’s actually going to be a takeaway. But let’s talk about that before we go into catching up because I want to talk about. What do you want to spend your midlife crisis money on? 

Neela [00:22:01]:

I want a new car. The struggle that a financial planner with a perfectly working car goes through when they also love cars. 

Mary Beth [00:22:09]:

It’s tough. 

Neela [00:22:10]:

Is tough because there’s like the angel devil situation where the devil’s like, you know, you want that car, girl. That’s a. That is a great car. That is a perfect car for you. And then the little financial planner angel is like, you have 67,000 miles on your 11 year old car and there’s no real issue. You can fix that doorknob thing and that ding doesn’t really matter. And is it changing the functionality of your car? 

Mary Beth [00:22:34]:

Just wash it. Just wash your car. 

Neela [00:22:35]:

Wash it. Yep. 

Mary Beth [00:22:37]:

Yeah. 

Neela [00:22:37]:

So that’s just playing out. So my midlife crisis spend is I’m going to get. I’m going to get a car because I’ve driven my same car for the last 11 years and I’m like, can I get a new car every decade? Can I do that?

Mary Beth [00:22:47]:

Okay. 

Neela [00:22:48]:

And it’s totally stupid. It’s a depreciating asset. 

Mary Beth [00:22:51]:

It’s not totally stupid. For those that are listening, who would like to buy the new car, do not have the inner dialogue that we have. It is actually quite normal as long as you have the budgetary expense for it and you’re saving another areas, it’s actually an okay, an okay thing to do. 

Neela [00:23:05]:

So what’s your midlife crisis spend? 

Mary Beth [00:23:07]:

I mean, at least yours is a depreciating asset. I just want to go first class everywhere. So I don’t know. I’m over here on all the luxury travel. That’s it. That’s it. Luxury travel. Sign me up for the bougie, bougie items. 

Neela [00:23:21]:

Nice. 

Mary Beth [00:23:22]:

That is just me. Just all the things. First class. 

Neela [00:23:23]:

That’s the dream. The midlife crisis excess. 

Mary Beth [00:23:26]:

That’s it. Yeah. So just slowly, slowly dipping my toe in. I can’t figure out all the credit card hacks that Neela has yet. I don’t have time to figure out all the credit card hacks. That’s actually one of Neela’s hobbies, so that counts as a hobby for her. I’m just working on my Marriott rewards over here, actually. It’s funny, I make fun of Neela for her hacks and then I’m the one who gets my hotel upgraded everywhere we go. 

Neela [00:23:46]:

So every time Mary Beth and I travel somewhere, they’re always like, oh, Ms. Hummel, your room’s available. I was like, oh my gosh, I’m so lucky. But the reason my room is available because my room is just like your standard run of the mill room. And they’re like, Ms. Storjohann, your entire building will be cover coming very shortly. If you’ll just wait while we clean all 7,000 square feet of it. 

Mary Beth [00:24:06]:

Your building is not ready yet. 

Neela [00:24:08]:

It’s true. 

Mary Beth [00:24:08]:

It’s happened twice. Okay, I digress. But yeah, mine’s luxury spending. That’s what I’m spending on my… 

Neela [00:24:13]:

Midlife crisis spending. 

Mary Beth [00:24:15]:

Yeah, that sounds great. I’m excited for that. I’m excited for that because it pairs well with the don’t give an F’s thing. And so that makes me excited. Okay. But going back to the reality of if you’re not caught up and living in our dream world, Neela’s right in terms of everybody is behind somewhere. And the biggest takeaways are making sure again, you have a fully funded emergency fund. So three to six months of savings, you know, set aside in terms of what’s your lifestyle, expenses, not your fun to have. You just need your must haves, pay your bills, groceries, those things go in the emergency fund, making sure you have that. Plenty of people in their 40s don’t have that. And so just getting started there, I think is really good. 

Neela [00:24:53]:

Right. 

Mary Beth [00:24:53]:

And then tackling your debt, I think that’s like the really hard one for people is getting out of the debt cycle and understanding the financial impact of being in one. 

Neela [00:25:05]:

Right.

Mary Beth [00:25:05]:

Of what you’re actually losing. I think a lot of people get into the debt cycle and actually becomes comfortable for them, but they don’t understand the numbers and the financial impact behind what they’re actually paying and who’s profiting off of it. And again, it’s like the impatience, understanding the time that’s involved. Right. So if you had that money back, it might seem small now, but setting aside those small amounts does actually add up, especially for compound interest. It’s all connected. So I think the emergency fund and the debt cycle, stopping that are two of the biggest priorities. 

Neela [00:25:33]:

Yes. 

Mary Beth [00:25:33]:

In your 40s, if you’re feeling not sure of where to start.

Neela [00:25:35]:

Which also goes hand in hand with making sure that you are getting control of your spending, where you are spending less than you’re making. And then that delta, like you said, is going to fill that emergency fund, pay down that expensive debt, and then, you know, the next level from that is investing.

Mary Beth [00:25:52]:

Yes.

Neela [00:25:52]:

And I think the other thing, if you’re feeling stressed about investing and compound returns look, you know, most people are living into their 80s, 90s. Some make it to beyond a hundred. 

Mary Beth [00:26:03]:

I don’t know, I just saw somebody’s hundredth birthday for a family friend.

Neela [00:26:06]:

See, there you go. It happens. But if you think about where you are in your 40s compared to those like, you still have many years for your investments to grow. So if you’re feeling hard on yourself, just know that the absolute best time to start investing is yesterday and the second best is today. And so know that the beginning always feels a little more arduous because it’s totally driven by what you’re putting in. But investing is key from a long term growth standpoint, from being able to be work optional at some point and just get started and it doesn’t have to be a lot. 

Mary Beth [00:26:38]:

Yeah. You know, something interesting that’s kind of come up for me. I just did a presentation on business exit planning and the idea of like investing and knowing where your personal finances also diversifying. I think your assets is really important. So there could be something where you like. Yep. The emergency fund, maybe. You live and run a lot of expenses through your business. You, you feel like you’re checking some boxes, but all your money’s on the business and you’re writing that and that’s going to be the big payoff for you. Financial planner me says that’s kind of risky. So you want to make sure that you are diversifying your assets. Ideally, you have a retirement plan going for that business and you’re setting something aside for yourself and you’re not just running everything through and waiting for a payday. 

Neela [00:27:18]:

Yeah.

Mary Beth [00:27:18]:

And if you are doing that, you definitely want to be working with a financial planner to understand business valuations, exit strategies and the tax impact. Because I do see a lot of people, especially if you’re 40s people, are going in and out of business depending on where you’re at in life. I know this is a big swing from where we started talking, but that’s also something. 

Neela [00:27:34]:

Yeah. 

Mary Beth [00:27:35]:

Risk to you at this stage of life is putting all your eggs in that one basket. 

Neela [00:27:39]:

Right. 

Mary Beth [00:27:39]:

And not diversifying outside of it. 

Neela [00:27:41]:

I love that you brought that up because I think one of the best visuals that can really hit that point home is that if you sketch out your net worth in a pie chart for the business owners, that is a huge piece of their financial net worth. 

Mary Beth [00:27:54]:

Right.

Neela [00:27:54]:

And maybe if you also own a house, then you pretty much have two assets and they’re both highly illiquid. And so you might have a high net worth on paper but the liquidity piece is really challenging. And the diversification, of course. 

Mary Beth [00:28:08]:

Exactly. 

Neela [00:28:09]:

Everything goes great when those all go up quickly, but also what happens if or when one doesn’t. 

Mary Beth [00:28:15]:

Yeah, exactly. So I think when you’re in your 40s, 20s are a time to have fun. You’re kind of just getting started. 30s, you’re starting to build your career, income’s coming in. 40 is a peak income time. 40s and 50s are your peak income years. And so it is a time to start to buckle down, down and start to really think about retirement is still a ways off. But you’re not in your 20s anymore. Right. So you do need to double down and focus and figure out where to get started. If you’re not working with a financial planner, I would encourage you to work with one to get yourself prioritized if you struggle to do that on your own. 

Neela [00:28:47]:

Right. 

Mary Beth [00:28:47]:

But I think this is the decade that you give fewer F’s as we talked about in closing. And so therefore, you’re more focused on yourself. What’s important for you, what are you prioritizing, and how do you take care of and nurture yourself? I look at my 40s as the nurturing of myself. Not just self care, but making sure, like, boundaries are set. Physical health, mental health, financial health, these are all on the checklist right now. And I feel like they are important and I actually don’t care what anybody else thinks about them. It’s time for me to put myself first. And I also need to identify when I’m my own roadblock. Right. Do I have my own toxic traits? Am I, in my own way, my own scarcity stuff an issue? Am I causing undue emotional stress for any reason? Like, that’s where I’m like, okay, put on your big girl pants, figure out, like, what are your issues and then get to work on them. So I think that’s. That’s how I look at this decade is just the time to unapologetically nurture myself, but also hold myself accountable as well. 

Neela [00:29:38]:

I love that you mentioned it’s time to kind of buckle down. It’s like you’re not too late, but you also can’t afford to wait anymore. 

Mary Beth [00:29:46]:

Right, Exactly. 

Neela [00:29:46]:

It’s like, time to get serious and it’s time for a plan. If you don’t have one. 

Mary Beth [00:29:51]:

Yep, exactly. That’s it. That’s our 40s.

Neela [00:29:55]:

That’s it. 

Mary Beth [00:29:56]:

That’s six months in a combined two weeks into our 40s. So we’ll check in with you. 

Neela [00:30:03]:

Maybe another episode coming down the pike. Of what we learned about our financials in our 30s, then we can speak with a decade of experience. 

Mary Beth [00:30:10]:

Yes. Or we’ll talk about 45 what we were wrong about in our assumptions of how our 40s would go.

Neela [00:30:16]:

How we’re already wrong. 

Mary Beth [00:30:18]:

Yeah, exactly. 

Neela [00:30:20]:

Well, thanks for listening. 

Mary Beth [00:30:21]:

Thanks for listening. 

Mary Beth [00:30:24]:

Thanks for tuning in to today’s episode of If Money Were Easy. If this is the year that you want to expand what’s possible with your money, and you can use some professional guidance along the way, head over to abacuswealth.com/get started and schedule your free consultation. 

Mary Beth [00:31:02]:

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