Five Dollar Gas and a Disney Vacation

RUSS THORNTON - October 18, 2017

Walt Disney and Mickey Statue at Disneyland

I believe money is fuel that powers our lives. I’m not saying it’s the only thing that makes our lives work, but I think you’d agree that things are pretty difficult without money. 

Money lets us buy and do the things we need, want, and, if planned for properly, dream about. 

Today, I’d like to spend some time discussing the idea that money is “life fuel” and use this perspective to help you think of money decisions like you might consider the fuel we put in our cars. 

DOES THE COST OF FUEL DRIVE YOUR DECISIONS? 

Let’s say you and your kids are planning to drive to Orlando, FL, to spend a few days at Disney World for your annual summer vacation. Does the price of gas impact your decision? If you read the news from summers past, you can see that higher prices at the pump result in many families staying closer to home, deferring their vacation or canceling it altogether while hoping gas will be more affordable next summer. 

Is your financial plan any different? What if the market drops which effectively makes your money “more expensive” to spend (because your investment dollars are worth less)? Couldn’t you make adjustments to your spending or the timing of your expenses? 

Let’s say we’re still talking about your planned trip to Disney World, and gas prices are at or below recent averages. The cost of fuel for your road trip isn’t a factor in your decision making process. But what if the markets are down and your investment portfolio has dropped 15% in recent weeks or months? Does this impact your decision to take the trip to Disney World? 

IT ALL ABOUT PRIORITIES 

If going on a road trip to Disney with the kids is important enough, I think most of us will still take the trip despite the hypothetical market drop. But what if you have more important priorities than a single summer’s vacation? What if by spending money on the Disney vacation, the expense results in having to increase your portfolio’s investment risk to keep your plan on track and in your personalized Comfort Zone® ? Or what if you have to retire a year later in exchange for the trip to Disney? What if it impacts your ability to educate your children in the manner you’d like? Or reduces the financial legacy you’d like to leave behind? 

Let me present this idea to you in another way: what if gas is $5 per gallon? Well, that would likely impact some of your non-critical financial decisions, like taking a road trip to Florida for vacation. But what if you find out a relative or close friend is critically ill and they want you to come visit and help out? I think most of us would do everything we could to make that trip, regardless of the $5 gas. 

WHAT’S IMPORTANT TO YOU? 

I believe the same concept applies to all our major financial decisions. If it’s important enough, you’ll likely find ways to make the money work, whether it’s for a vacation with your kids or making sure you can quit work at your ideal retirement age.  However, if it’s not as important to you, maybe you can make some adjustments or tradeoffs. Maybe you’re willing to work another year or two if it means you can reduce your investment risk today. Or perhaps you’re willing to increase your current savings if it results in an earlier retirement age or less investment risk (or both). And maybe you’ d be willing to make some trade-offs that will allow you to reduce your current level of savings which will result in more current income to fund Disney vacations or other things that are important to you. It all depends on the things and experiences that are important to you and your priorities among them. 

BRINGING IT ALL TOGETHER 

This is exactly what I do in my work as a financial advisor. Here are the four primary steps to my process: 

 1. Start with why   2. Focus on what you can control   3. Tune out the noise   4. Live your best life 

If you dig a little deeper into my process, what I do is help clients figure out and quantify what’s most important in their lives, educate them about the trade-offs among each of their unique goals and dreams, and then monitor and adjust their financial plan and money to 3 maintain comfort and confidence in their plan while keeping the focus on their life and what’s most important to them. And another important benefit of this approach to wealth management is that it strikes and maintains a nice balance between living your best life today while still being financially prepared for an uncertain future. This is how we eliminate financial anxiety and foster greater comfort and confidence.

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