Numbers on a Screen

Dealing with money is less tangible today than at any time in the history of money. Paychecks are directly deposited into bank accounts. Bills are paid automatically online. Debit and credit cards can be used everywhere (even in NYC cabs), and we are quickly adopting the use of Apple Pay, Venmo, and Zelle for a variety of transactions. We view our investment accounts by logging in to a website or opening an app on the phone. Over the past 10 years, I’ve found fewer and fewer reasons to carry cash, let alone withdraw it from the bank. It sometimes feels like money is nothing more than numbers on a screen.

As I teach my children about money, I am starting with tangible currency. There’s something about those coins and bills that feel like better teaching tools than numbers on a screen. My children receive birthday gifts in cash, and they often find loose change that they place in their piggy banks. Soon, I hope to start an allowance program for my older child, and I will pay him in cash. Occasionally, I allow my son to empty the piggy bank, count the total sum, and purchase a toy at the store with physical bills and coins. We had a lot of fun depositing coins into the self-serve checkout lane at Wal-Mart. The Tooth Fairy has not visited our house yet, but I wrote her a letter with instructions to pay in cash. I want to ensure that my children understand the physical concept of money before they start scanning their iPhones at the register. This summer, however, I plan to open my son’s first savings account. This is a chance to teach about earning interest. I can’t wait.

I’ll never forget a conversation I had with an investor several years ago. Through the magic of compound returns, she had accumulated a sizeable portfolio. This balance accrued from a few stocks she inherited from her father, who was investing in the late 1940s. She added a modest amount of savings from her employment over the years, and now, in her late 70s, had accumulated a small fortune. As I walked her through a financial projection based on her living expenses, I explained she had practically zero chance of running out of money in her lifetime. But she didn’t believe me. Running out of money was her biggest concern. Despite my attempts to stress test her plan, even going as far as to illustrate negative, real returns for the rest of her life, she didn’t believe me.

Then I had an epiphany. Her investment portfolio was nothing more than numbers on a screen, or in her case, numbers on a monthly statement. She was practically disassociated from her money, having never lived a lifestyle commensurate with her wealth. She had used very little of her wealth to purchase tangible items and services, and to my knowledge, she hadn’t given much away. Her wealth wasn’t real to her. She never touched it. It was mostly a source of anxiety each month as she opened the statement to analyze her results.

I think a lot of people are suffering from the same condition today. Our money has become so esoteric that it’s nothing more than numbers on the screen.

You’re probably rolling your eyes at me right now. Especially those of you who are living paycheck to paycheck, struggling to make ends meet. Or those entrepreneurs who risked everything to build a business from scratch.  You get it, I know. You are still connected to your money.

But for a growing number of Americans, wealth disassociation is becoming a reality. This problem is likely to grow. Baby Boomers, who are now between ages 60-80, hold more than half of the wealth in the U.S., more than $78 trillion.  Most of this wealth will transfer to their heirs over the next few decades. How many Millennials and Gen Xers will take over their parents, numbers on the screen, with the same reluctance to spend it?

I have even found myself losing touch with my money, and it took me almost two decades in wealth management to start earning significantly more than I needed to pay the bills. When I bought a house earlier this year, I moved a bunch of numbers around on the screen to close the deal. This included applying for a new mortgage loan, consolidating high-yield savings balances into my checking account, taking a 401k loan, and increasing the HELOC on my old house to cover repairs and expenses until it sells. Then I wired a large sum to the escrow account for the closing, signed a few documents, and the title attorney handed me the keys. It felt like all I did was move a bunch of numbers around on a screen, but in the end, I took possession of a physical house. One that I am enjoying immensely, by the way.

My point is that it’s important to check in and get real with money. This doesn’t mean paying for things in cash or writing checks at the grocery store. Please stop writing checks at the grocery store. But it does mean taking the time to assess how your relationship with money is impacting your mental and physical health. Is it a source of anxiety when it shouldn’t be? Are you relentlessly pursuing more that you do not need and will never spend? Are you taking the time to truly enjoy the fruits of your labor or the gifts from your family? Are you putting it to its best use?

Those numbers are the screen are very real. Maybe it’s time to figure out what will happen to them before you leave this life.

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