They say more money means more problems, and it’s easy to see why. As your career grows, so do the demands of life. Balancing a flourishing career with a mortgage, kids, and a more comfortable lifestyle can be overwhelming. So we’d like to counter that more money often presents different challenges-ones that you might not be equipped to handle on your own. 

Instead of doubling down on old strategies, it’s time to adapt and evolve your approach to managing your money to ensure you continue to thrive both professionally and personally. On the Aligned Money Show, George Grombacher and I got to tackle this topic together. 

In this episode you’ll learn: 

• Why being too focused on the S&P 500 can handicap your investment strategy
• How a financial advisor can guide you through life transitions and help prioritize your financial goals
• Why you should beware of financial advice from your co-workers
• Why you need to learn how to calculate your net worth

An Unbalanced Approach to Investing

What’s been top of mind for me lately is America’s obsession with the S&P 500. When we start a new client relationship, especially with those who’ve done some investing on their own, there’s a good chance that the majority of their portfolio is tied up in SPY, the ETF tracking the S&P 500. While this might seem like a safe, diversified choice, it overlooks broader investment opportunities.

The Influence of Media

We are fortunate to have access to a wealth of information about personal finance, and it’s never been easier to invest on your own. However, one consequence of this accessibility is an overemphasis on the S&P 500. Many DIY investors think owning the 500 largest U.S. companies equates to being diversified. 

The constant media coverage and emphasis on the S&P 500 as a benchmark for market performance can lead to a narrow investment focus. While the S&P 500 is an essential index and a critical component of many portfolios, true diversification means looking beyond the S&P 500 to include a variety of asset classes and geographies.

Diversification Beyond Borders

The S&P 500 represents just 500 out of approximately 3,500 publicly traded companies in the U.S., not to mention the vast number of international markets. Limiting your investments to the S&P 500 can restrict your portfolio’s growth potential and expose you to unnecessary risks. If you look at the last 20 years, the U.S. has only been the top-performing developed market once. There’s a whole world of opportunities out there. 

Additionally, historical market returns often come from small companies growing larger, not just big companies getting bigger. By investing in small and mid-cap stocks, emerging markets, and other international markets, you can capture growth opportunities that the S&P 500 may miss.

The Evolution of Financial Priorities

A core principle I use in with my clients is understanding that as your career progresses, your relationship with money needs to evolve, too. Big life changes like buying a house, getting married, or having children often happen in your thirties and forties. These milestones, coupled with career advancements, can lead to a substantial increase in net worth. 

However, this period also brings increased busyness and financial complexity. As your financial situation becomes more intricate, your investment strategy should adapt to reflect these changes. Diversifying your investments and adjusting your portfolio to match your evolving financial goals and risk tolerance is crucial for long-term success. 

Managing Financial Stress

At KB Financial Advisors, we help clients navigate this busy period by first listening to their concerns. We then help develop a well-organized financial plan that focuses on key goals without getting bogged down by every detail. This approach helps alleviate stress and ensures that you can make informed decisions without feeling overwhelmed. 

By prioritizing your financial objectives and breaking down complex financial issues into manageable steps, we help you regain control and confidence in your financial journey. Our goal is to simplify your financial life and provide the clarity needed to focus on what truly matters-which is often maximizing the time you have to spend investing in your passions and your relationships .

The Value of Financial Advice

I recall a client who was overwhelmed by day-to-day expenses despite being in a solid financial position. By reviewing their situation, I helped them realize that their focus should be on investment strategy rather than minor expense adjustments. This shift in perspective underscored the value of professional financial guidance. 

Personalized advice can provide a fresh perspective and identify opportunities for improvement that may not be apparent when managing finances alone. Tailored financial advice can help you avoid common pitfalls and make more informed decisions that align with your long-term goals.

Calculating Net Worth as a Financial Metric

One of our best difference-making tips is to calculate your net worth as a multiple of your annual income. This simple yet powerful metric helps gauge your financial progress and determine whether you need to focus on saving more or optimizing your investment portfolio. 

Understanding this ratio allows you to make more strategic financial decisions that align with your long-term goals. By regularly monitoring this metric, you can track your financial growth and adjust your strategies as needed to stay on course toward financial independence. This approach provides a clear and straightforward way to measure your financial health and progress.

Taking Your Next Step

If you realize that your relationship with money is not growing in tandem with your career, KB Financial Advisors can help. We are committed to helping you navigate your financial journey with confidence and clarity. Let’s ensure you’re where you want to be and more importantly, that you’re on track to end up where you want to go.

Discover how KB Financial Advisors can support your financial journey today by scheduling a call today! 

 

TRANSCRIPT

George Grombacher  0:02  

And then to get us started give me two truths and a lie, please.

 

Landon Loveall  0:06  

Yes, so two truths and a lie. I was born with one hand. Landon is not my first name. And I call it an eight foot bull shark fishing from the beach.

 

George Grombacher  0:21  

Oh my goodness, these are amazing. And you would think that I would know if you had one hand or two or three or four, but I don’t I have not yet seen the ends of your arms. It’s your name Landon. And he caught an eight foot bull shark from the beach. Oh, my goodness. Hmm. Your name is not really Landon.

 

Landon Loveall  0:47  

That’s correct. Landon is my middle name. And so that was my mother’s gift to me. She, she liked Joshua, which is my first name, but she did not want people calling me Josh. So she went with Landon instead. Hey, hen. Ever since then, you know, it’s always been a question on loan applications. Okay, like, what name do I go with here. And I once had to go through a federal background investigation for a job with the federal government. And they sent an investigator out to meet with me. And in these background investigations when the investigator meets with you. If there are any questions, they’ll just ask the question. 

 

They won’t give you any background information. And so we sat down together and everything we’ve talked about so far has been fairly routine. And then the investigator goes, in the course of our investigation, we’ve discovered that you may have used other aliases, and age and that’s all he says. And it’s just like, explain yourself. And so this is a Friday afternoon, I plan to take off early from work that day. And he just shows up and I’m like, I don’t know, man, you know, I go by Atlanta, and it’s my middle name. Joshua is my first name. Maybe that’s what you found? I guess it was because, you know, the very low level security clearance that I needed coming out of that background investigation was given to me. Wow,

 

George Grombacher  2:23  

just very, very matter of fact, got the light shining on you. This person is grilling you and they’re gonna get to the bottom of it. It’s like, it’s just my middle name, buddy. My mom didn’t want me to call Josh. Yep. All right, well, I need to know more about the other two. Also, do you go swimming now because you realize that there’s monsters right next to the beach.

 

Landon Loveall  2:45  

So the shark was intentional. Growing up as a child, you know, I go back to renting VHS tapes from local video rental shops, that was my childhood. And the one little local shop in our town had National Geographic sharks of the world. And, you know, there’s, I don’t know how many times I rented that as a kid. And so sharks were my childhood obsession. And then, you know, as an adult, taking trips to the beach, I learned how to, you know, fish for sharks from the beach, and, and really just, you know, amazing animals. And so I’ve caught a number of big shark from the beach and the largest being an eight foot bull shark.

 

George Grombacher  3:36  

So how far do you cast out

 

Landon Loveall  3:39  

so this particular spot, I’m fishing a an inlet that connects the Gulf of Mexico to a bay in Florida, and so it’s kind of like, you know, setting up on the side of the interstate and waiting for a car to pass by. So you just know that there are going to be a lot of fish going back and forth. And because of that, there tend to be a lot of sharks there as well. And so I weighed out as far as I can, you know, up to, you know, my chest and then cast out from there. And, you know, just wait for a sharp swim bot.

 

George Grombacher  4:16  

Okay. That seemed like a very good idea, but whatever.

 

Landon Loveall  4:23  

So we have some good pictures and videos and dad was with me for that one. And, you know, then I waited out to, you know, to kind of fight the shark and, and, you know, as part of catching it, and I was kind of out at that same depth and he’s on the sand yell and you know, don’t let him pull you in and, and it was definitely an open question there for a little bit.

 

George Grombacher  4:50  

Don’t let it pull it. Okay. Thanks. Right. Yeah, I guess that’s the only logical thing to say to your child who is now wrangling in April. A shark.

 

Landon Loveall  5:00  

That’s right. And then the other truth, yeah, I was born with one hand. And, and so I’m missing my left hand at my wrist. And so I get questions, you know, How’d you learn how to do this? And, and I go, Well, you know, how did you learn how to do that, you know, we all at one point in time were born into this world, you know, not knowing how to do all of the things that we do without thinking today, and we learned along the way. 

 

And so that was kind of me, you know, and I was blessed with parents who, you know, kind of set aside their fears about, you know, what I would be able to do and, and were, you know, wise enough to encourage and give me the space to figure it out. And to not jump in and immediately help when, whenever they saw me struggle. And a lot of that’s my guess is, you know, it’s not really something that I’ve talked a lot about to them, but I just kind of learned along the way. And then I think it’s been very helpful in my life as an adult and career and in kind of developing an ability to come up with creative ways to do things that are different than the way everybody else can get something done.

 

George Grombacher  6:25  

Yeah, that makes a lot of sense. To your parents, your mom was brave enough to your parents are very, very, very brave people. They’re your dad let you get in the ocean with sharks and swim out there. They they allowed you to struggle and figure out how to get through life with with one hand. Yeah, but not courageous enough to let people call you, Josh. That’s

 

Landon Loveall  6:48  

right. And then, you know, my best friend as a child was Logan. And, and so my mom was avoiding Josh, but I get a lot of Logan and London. And so, you know, I’m not sure that that her plan was successful.

 

George Grombacher  7:07  

Right. Oh, regardless. Well, that is a great introduction to you, Landon. I love it. Oh, what is what is top of mind for you right now?

 

Landon Loveall  7:17  

Yeah. So what’s top of mind for me right now is America’s obsession with the s&p 500. So if I start a new client relationship, and the person I’m working with has done some investing on their own, there’s a really good chance that SP y, the ETF is what’s going to be the majority of that portfolio. And so that’s kind of what’s top of mind for me right now.

 

George Grombacher  7:47  

Whose fault is that?

 

Landon Loveall  7:51  

The news media, you know, and so we’re blessed that we have a lot of great people writing about personal finance, and you know, the amount of information that’s available to us, you know, just, it’s never been as easy as it is right now to get good information on financial topics. And it’s never been as easy as it is right now to invest on your own. 

 

And so all of this great, you know, but one of the kind of byproducts consequences of that, at least right now is we’re pretty obsessed with the s&p 500. And we think, and I’m talking about we America as a whole and do it yourself. investors think that the 500 largest US companies that that’s diversified, you know, that if I own the s&p 500, I’ve diversified and it’s like investing, check diversification, check. I’m done. I’m good. And I don’t think so. You know, I don’t think that, that that’s a good approach to investing

 

George Grombacher  9:01  

and missing out and leaving out a couple other things.

 

Landon Loveall  9:04  

Yeah, absolutely. You know, 500 of the largest US companies when they’re 3500, you know, roughly publicly traded US companies, and then one stock market, the United States stock market when there’s an entire world of markets that are out there. And so if we just talk domestic versus International, if you look at the last 20 years, you can look up those periodic tables of investing. 

 

And one version of that will show you, you know, the US as one of the developed markets, and so if you look at the last 20 years, there’s only been one of those years where the US was the top performing developed stock market. And then you go down the list, it’s only eight out of the 20 that the US is in the top 511 Out of the 20 that the US This is in the top 10. And that’s 22. Total develop markets. So there’s an entire opportunity set out there that you’re missing out on. And the other thing about the s&p 500 is, historically, if you look, you know, if you just look at the way the stock market works historically, and you think about stock market performance, from a kind of sensible standpoint, like how does the world work? You know, stock market returns do not come from big companies getting bigger. They come from small companies getting bigger. And so I think about investing, like, I think about my mortgage, 30 years, so in the next 30 years, where are my stock market returns are likely to come from, and they’re not likely to come from those 500 companies in the s&p 500 getting bigger and bigger and bigger.

 

George Grombacher  11:06  

That certainly makes sense. Is it a function of successful media, pushing this forward? It’s the vanguards, the world, which is nothing but a really positive thing. And to your point, we have access to trading that we’ve never been able to do. So it is possible to DIY this stuff. And, you know, I’m busy building my career. I’m, I’m graduating school, and now I’m, I’ve got a job and I’m in my 401 K, and I should start investing. And then you know, now I’ve got a house and I’ve got a family and, you know, it’s just this is just where it fits.

 

Landon Loveall  11:38  

Yeah, absolutely. It’s the easy. It’s kind of the easiest option, the one that, you know, we just kind of naturally gravitate to, and there’s a lot of momentum behind kinda investing that way low cost, seemingly diversified. s&p 500, I’m done. I don’t have to think about it anymore. And it? Yeah, probably because I am busy with my career, which is one of the other big things that I focus on in working with my clients is, you know, how your relationship with money needs to change during your career.

 

George Grombacher  12:18  

And that’s a great first step. Right? I think that, obviously, moving from math investing to investing isn’t really imagined. That’s a pretty big step. And then the evolution of it a little bit more knowledge, sophistication, changes.

 

Landon Loveall  12:36  

Yeah, yeah. And so you’re right, that first step, going from having no money to now having some money to invest, starting to invest, and then kind of figuring out as the amount of money that you have, grows, you know, how does that approach to investing and in money in general need to, to change, and this is something that, you know, tends to happen little by little over your career. And so, for a lot of people, there’s not a point in time where you wake up and you go, you know, things are really different now, like today is definitely different than it was yesterday. It’s a gradual change that happens. 

 

And where we see it happen a lot in our work with clients is in your 30s and 40s. You know, a lot of a lot of people during those two decades, you’ve done kind of the big lie things, you may have been able to buy your house, you may have gotten married, you know, your kids may be, you know, approaching school age, you’ve went through a series of promotions at work, your tax return has changed. And so you just you reach this point where to you, it feels like nothing’s happened. But over the last 10 years, you’ve moved from having a net worth that’s less than your annual income to now having a net worth that is a multiple of your annual income.

 

George Grombacher  14:16  

So it’s an you know, hopefully a natural progression. Is it then is it just a function of of inertia that kind of keeps us where we’re at, and it’s fear of branching out from my original strategy. My infatuation? It’s not an infatuation. Just my relationship with investing is the s&p 500. And now it’s I need to move beyond that, but I’m nervous about it. I don’t want to make a mistake.

 

Landon Loveall  14:41  

Yeah, I think it’s all of those things. And so, my experience in working with clients is that are in kind of that age group and going through these things is one of the things that happens is you get through really, really busy. And so right now, you know, my kids are, are 1412 and 10. And I can’t, I can’t put my finger on it, you know, I can’t pull out my Google calendar and say, Here it is, George, this is it. This is what’s changed. This is why I feel the way that I do that I feel so much more busy now than I did, you know, 10 years ago. But there’s first, this sense that something has changed, a lot busier now. 

 

And then the fear starts to creep in with kind of the stress and the anxiety. You know, where it’s like, I don’t know what to do. And then what we naturally want to do is I don’t know what to do. But I remember a time where I wasn’t so busy. When I felt like I had a handle on my money. And I know what I did, then. So let me go back and do that. Again. It said, I’ll try harder this time and make sure that it works. So there’s this sense things have changed, there’s fear that starts to creep in. Kind of a not knowing what to do. And then the natural thing that we tend to do is to want to go back to what worked for us in the past with our money. And think, Oh, well, I’ll just need to go back to that. That’s what I know. And this time, I’ll try harder.

 

George Grombacher  16:37  

I wrote down Infinity War. And it’s not it’s not a war, but it’s just an ongoing thing. You’ve gotten thinking that your life’s going to slow down, and that this is going to be a slower period now that my kids 14 or 15, or 16, or 17. And I’ve got to constantly be working on my health even more as I get older. And so there’s never going to be a perfect time to do these things or to make changes, just recognizing that this is just the way that our lives are. Maybe it’s shocking. Maybe you don’t like that. But that’s just how it is. So how do you how do you go about creating one of my least favorite terms, creating the space to be able to say, Okay, this is something that makes me nervous, what new resources do I need? How can I go about making better choices that are going to get me to where I really want to go?

 

Landon Loveall  17:29  

Yeah, the first thing that I do is I listen. So with a new client, my favorite new clients to work with are the ones that, you know, they’re, they’re ready to talk. And so a common experience I have with a new client relationship is on that first phone call, it’s tell me what’s going on and what prompts you to reach out and I just opened the door and, and they’ve thought about working with someone for a while. And they’ve got kind of this, you know, infinity loop, this mine, you know, circling the drain all these things that they’ve been thinking about. And they just have waited for someone to ask. And so they’ll just tell me everything that’s been on their mind for the last six months while they’ve thought about working with someone. So the first thing that I do is listen. And then the second thing that I do is for our clients, usually what they’re going through, it’s the first time that they’ve experienced something like that. And one challenge that they face is the first thing they’ll do before working with me is though, talk to their co workers. But you know, when I tell them this, when we start working together, when you talk to your co workers, you’re often getting the Instagram filter version of their financial life. Nobody talks about their mistakes. They’ll tell you about something they’re doing that they think is working, and maybe it is working. But if it ends up being a mistake, they don’t come back to you and tell you hey, I really screwed that up. 

 

And it was extremely painful and embarrassing. Let me humiliate myself by letting you know what I’ve done. So for them, it’s their first time experiencing something like this. But for us. That conversation with this new client is one of many similar conversations and my own experience of being kind of that age going through those things. So a big part of our work as advisors is that collective experience to let them know. 

 

Okay, first you’re going to be okay, you know Like, this part of life is really tough and I get it, but you’re going to be okay. Here’s what you should worry about and everything else, just forget about it for now, it doesn’t matter, you don’t have to think about it. Here’s what we’re going to do. And so moving them from kind of, here’s all the things that are on my mind, to a well organized plan that focuses on the things that you do need to think about. And kind of being able to take that deep breath and say, okay, like, I feel like I got a handle on it. Now I know, you know what I need to do next?

 

George Grombacher  20:38  

And is that really success?

 

Landon Loveall  20:41  

For me? Yeah. For me, it is. And you know, and I hope that it is for, for them, everybody’s experience is different. Another example, what really is success is, you know, a client who told me, so this client was going through all the things that we’re talking about now. You know, there was a period of time where they were married, had no kids, no house, no money. And I were the four or five years that we’ve worked together. They first went through an IPO, which is a big part of our work with tech professionals. So she went through an IPO, they bought a house, sold a house, bought another house, had two kids. So that’s been like the last five years. And so and one of our annual meetings, the question that they asked is, you know, we’re really busy, we don’t feel like we’ve got a good handle on our month to month expenses, is this something that we should worry about? 

 

And so we reviewed all the information we looked at, okay, well, tell me about your expenses, well, you’re not running up credit card bills, you’re still paying those off every other month, every month, you’re still maxing out your 401 K, you’re saving bonuses, and kind of those big checks that when they come. So, no, you don’t need to worry about your expenses. And he shared with me, he said, You know, I, I’d looked at this before our meeting. And I looked at the amount of money, we spend every month on takeout. And I thought, you know, if we work really hard, maybe we can cut $250 a month off of the amount that we’re spending on takeout. He said, But then I looked at our investment portfolio, and when good day in the stock market is worth a lot more to us than $250. So, you know, and he was starting to realize like, what am I going to worry about $250 on takeout, or making sure that my portfolio is invested correctly, and then I’m finding opportunities to feed that portfolio. And so that was success for me the realization that the game that they’re playing with their life, and their money is different now that they have money than it was back before the house, the kids and no money.

 

George Grombacher  23:24  

I love it. 250 bucks. We’re like, if we really try hard, we’ll be able to cut that out. But what’s the point? It makes you happy? You know, you don’t even think about doing that. I love it. Yeah. Well, then we’re ready for your difference making tip. What do you have

 

Landon Loveall  23:40  

for us, sir? Yeah, my difference. Difference making tip is calculate your net worth as a multiple of your annual income. So we work with busy professionals. And, you know, the game of money for a busy professional, a W two employee is to take your career and your income and build an investment portfolio that allows you to achieve financial independence. And so the easiest one kind of ratio to measure your progress in that journey is to calculate your net worth as a multiple of your annual income. 

 

And it’ll also give you insight to do I need to focus on managing my expenses so I can save more money, or do I need to focus on my investment portfolio? Because it’s those investment returns that are driving progress for me.

 

George Grombacher  24:37  

Well, I think that that is great stuff that definitely gets a Come on. landed. Thank you so much for coming on. Where can people learn more about you? How can they engage with you?

 

Landon Loveall  24:45  

Yeah. kBw financial advisors.com It’s easy to go there and schedule a free call with me. You know, to just talk about what’s going on in your life and see if working together would be a good fit. It

 

George Grombacher  25:00  

won’t. If you enjoyed this as much as I did show Landon your appreciation, share today’s show with a friend who also appreciates good ideas go to kbfinancialadvisors.com Check out the great resources and click on the button that allows you to schedule some time with Landon. And make sure that you are where you want to be and more importantly that you’re going to end up where you want to end up. Thanks again Landon. Thank you. Till next time, my friendly reminder is never going to be anybody more interested in your financial success than you are. So act accordingly.