At a recent financial education workshop I was asked, “How do we prepare financially for all the f**ery coming with the new administration?”
My initial gut reaction was to clench because I have no idea what’s coming and I want to protect my clients, myself, and most of all my family, from any negative financial consequences. With my years of training and experience in the financial sector my main recommendations are that people have an adequate emergency fund, minimize debt that does not produce income, and maximize earnings.
Although I cannot predict what is coming, my training and experience do give me a “gut knowing” of how to understand financial news and their potential impact.
Understanding Financial News and Economic Cycles
Years ago at a financial conference a presenter on Modern Portfolio Theory (MPT) and investment management began their session showing newspaper headlines of imminent financial collapse from the past 100 years. They meant to remind us that for over a century MPT has been the most reliable way to invest because unfortunately we can’t know what the future holds. MPT focuses on investing across many asset classes, as in don’t put all of your eggs in one basket. As advisors we further help clients by advising they only invest what they will not need in the next 3-5 years, because the market is as likely to go up as it is to go down.
Does this mean we can (or should?) ignore financial news? No, it simply means that projections are not predictions. Over the long run we can see trends, such as the growth of tech firms and strong performance in stocks that are focusing on mitigating the impact of climate change. Over the short term we can only see the step in front of us, like in most areas of life. Yet, I do not say business as usual is the only way forward. When we give up understanding our financial system we give up on creativity and building an economy that works for all of us.
Much of the news we hear is meant to get us riled up so that we consume more news. When the topic is finance it can feel even more dicey because many of us feel confused by the topic and threatened by financial insecurity. This can quickly become overwhelming, especially given that as a society we lean more towards borrowing from tomorrow through debt, rather than saving for tomorrow or creating systems that care for everyone today, from the elderly to the new parent.
Below are three simple steps to take when spiraling with financial anxiety.
- Make a brain dump of all your financial concerns – What’s on your mind? Is it a conversation you overheard about tariffs? Are you worried about rising college tuition and your kids? Are groceries feeling more and more unaffordable? By listing everything out it transforms from an infinite loop to a finite list that you can clearly address.
- Separate what you have control over from what you do not – Remember that you do have control over many things and that other things are a matter of wait and see… A strong financial foundation includes 3-6 months of expenses saved, minimal or no debt that does not produce income or capital, and a growing net of mutual aid. Those of us in a financial position to do so can prioritize giving help to those in less stable financial situations, by providing baby sitting, financial education, and yes, no questions asked cash.
- Reach out to trusted money mentors to talk things through – This includes yours truly! As I wrote in an earlier article, Why You Need a Money Mentor, having someone you feel comfortable to talk to about money can give you new ideas and hope for the future. For anyone in need of a money mentor, I offer free 30 minute heart-centered money calls as well as ongoing private coaching.
Building an Economy of Solidarity and Care
The majority of my training as an investment manager has been about how to help client’s succeed in the existing system – now things are changing and expanding!
I am thrilled to share that earlier this year I joined Strategy Squad and Natural Investments (NI) as their newest advisor. While most investment advisors focus on working within the existing system, NI goes beyond it to build a new system. As an advisor with NI, I feel confident recommending impact investments beyond what’s on Wall Street because as a firm we go through months of due diligence to really understand each community investing opportunity that comes our way.
I dream of a day when community impact investing is as common and well understood as investing in a Fortune 500 company. What if we felt a moral quandary and fear when investing in extractive companies, instead of simply thinking, “well, this is all that’s available…”? I am excited that by joining NI and firmly rooting myself in the regenerative economy I am adding momentum to this industry and societal change.
Wrapping up 2024
Compared to my first two years as an entrepreneur, 2024 has been the most satisfying, both emotionally and financially. Money coaching clients are finding me organically to the point that I always have 5-10 ongoing clients, my preferred amount. The work with Strategy Squad and NI has grown and I truly feel like a member of this team. It’s been a true joy to release 30 episodes of Highly Sensitive Money, including many conversations with personal heroes. Lastly, I’ve continued to bring culturally sensitive financial education workshops to more and more organizations.
Now that I’ve learned which spaces I want to serve, the goal for 2025 is to grow my impact, while avoiding the burnout I experienced in the summer of 2023. I want to continue to center the spaciousness I’ve cultivated in 2024, while growing the number of people and systems I am contributing to. Stay tuned for January’s newsletter to hear more about what I’m planning!
I wish each of you a restful close to the year with loved ones. May you keep your heart grounded enough to be honest and open enough to be creative.
Warmly,
Diana