Exploring anchors, belief, and resolutions

Welcome to the Intentional Dollar weekly newsletter — great work taking this small step to move your money forward. I’m Logan, a Certified Financial Planner™, and I’m excited you’re here!

What’s inside?

• One tool to experiment with

• Two quotes from others

• Three questions to dig deeper

• Four lines of poetry for the point

_{One tool to experiment with:}

Anchors:

What financial anchors are holding you back?

Anchors are heavy metal objects that keep boats in place. When you drop your anchor, your intention is to prevent movement, not facilitate it. Anchors are excellent for boating, but not for finances.

Financial anchors drag us down and stop us from advancing toward the financial life we want.

In the bonus article from a few weeks ago, there was emphasis that professional tennis players differ from amateurs in that they don’t lose points — they don’t force errors.

Anchors are the forced errors in your finances. If you want to move to the next level with your money, you have to cut away the anchors. The trouble is that sometimes the water’s murky, and we can’t see the anchors below.

Not all anchors are quantitative — we’ll explore two types below:

Quantitative financial anchors:

• Investment cost → fund expenses, advisory fees, and commissions eat at your returns

• Sub 760 credit score → your cost of debt (interest rate) is higher than it should be

• Car that frequently breaks down → money pit from accumulated repair costs

• Old subscriptions/memberships → silently sap dollars if you don’t proactively manage them

• Too much cash in an investment account → opportunity cost of 8-10% compound annual returns (historical average)

• Credit card debt → paying the minimum isn’t enough

• Mortgage debt → greater than 30% of your gross monthly income erodes your margin to save well

Non-quantitative financial anchors:

• Negative financial mindset → you won’t start saving/investing/budgeting if you don’t believe they will work

• Negative financial peers → we become who we spend time with

• Poor sleep habits → less sleep, lower quality money decisions

• Poor health habits → lower quality health, more expensive premiums/medical bills

• Adverse Diderot effect → you have new things that prompt you to buy more new things, i.e. new house = new furniture

These anchors might be easy to see in the people around you; the problem seems obvious when someone else carries it. To see your own, you must hold a mirror in front of yourself.

The cost cave highlights the importance of identifying and creating awareness of your anchors. This awareness generates space to think about them; to decide if they are worth keeping around, or if they are holding you back from hitting your financial targets.

To start, think about the people you spend time with — how do they talk about money? Or even closer to the source — what’s your internal dialogue on money? If these two things are pulling you down it will be nearly impossible to move forward.

Fill out a list of your money anchors. What’s the smallest thing you could do right now to cut some of them away? And remember, not all anchors are grungy metal eye sores, some of them look appealing — and that’s precisely what compels you to keep them around.

_{Two quotes on belief:}

Don’t carry around the unnecessary weight of a negative belief anchor.

_{Three questions on resolutions:}

1. Why have I delayed these resolutions to a new year?

2. Where have I historically gone wrong with my resolutions, and how can I mitigate this? (motivation won’t be enough)

3. What might my next ten years look like if I can get these resolutions to stick?

Which question stuck with you? Questions like these are spotlights for the mind. Reply to this email and let me know which one shined light on a previously dark cave.

_{Four lines of poetry for the point:}

Contact Me:

Content ideas, questions? Reply to this email or reach out to me at [email protected]