I always joke that someday I will write a book about personal finance, and it will say, “Spend less than you make.” That’s it. That’s the book. And in some ways, it’s that easy, right? It’s easy to articulate anyway. I could maybe expand my book to a paragraph to capture some nuance, but, regardless, it sure is easy to put the broad strokes on paper. Yet, it’s not easy. It’s dang hard.
At Aptus, we know financial planning is difficult. It’s what we do, all day, every day. The challenge doesn’t come from the complexity of the subject matter, which is an inch deep and a mile wide. No, we’re certain AI will be able to answer almost all financial questions within the next few years, if it can’t already. Even without AI, the answers to even relatively complex financial planning questions are almost always available somewhere online. The answer is out there.
So why isn’t it easy? It’s our humanity! Our experiences. Our interests. Our anxieties. Our fears. Our hopes. Our dreams. Our relationships. Our biases. Our blind spots. Our stupid primal lizard brains, ha!
AI is a bit terrifying to me, because I think it has the potential to take away jobs that humans actually like doing. Aptus doesn’t fear AI, though, because we believe AI-enabled financial planning software will be able to quickly and efficiently analyze our clients’ financial information/documents and produce a good financial plan. Think of that plan as my one-sentence or one-paragraph book expanded with specific details, projections, recommendations, and to-do lists. Bam. Done. Done?
No, not done. Just the beginning. In many ways, software can already provide a basic financial plan. Many investment advisors can easily print you a 30-page financial plan and give you login credentials for a client-facing portal that sure looks cool. That’s not worth much.
Financial planning is a process. We know from working with hundreds of clients that there is a big difference between a recommendation and an action. We want action. We want positive outcomes. We are ok if AI answers financial questions and kicks out a plan. That work doesn’t excite us. To turn our to-do lists into reality, we need to collaborate closely with our clients. We need to know our clients and meet them where they are. We want to know you, understand you and help you. That’s exciting to us.
As a baby step toward starting conversations with our clients about their relationship with money, we ask 3 questions.
Question 1/Literacy: In general, how would you rate your financial literacy?
1) I haven't read much about personal finance
2) I've read a little about personal finance
3) I've read a fair amount about personal finance
4) I'm a student of personal finance, and read a lot
Question 2/Engagement: In general, how would you rate your financial engagement?
1) I don't spend any time on my/our personal finances
2) I spend a little time on my/our personal finances
3) I spend a fair amount of time on my/our personal finances
4) I'm deeply involved in my/our personal finances
Question 3/Anxiety: In general, how would you rate your financial anxiety?
1) I'm very anxious about my/our personal finances
2) I'm somewhat anxious about my/our personal finances
3) I'm fairly relaxed about my/our personal finances
4) I'm completely relaxed about my/our personal finances
Based on the answers to the three questions, we assign the clients to one of 8 Aptus Archetypes.
Ok, now answer the 3 questions. Don't spend too much time on them and don't take it too seriously. Just make your best quick assessment. If you answer 1 or 2, that’s “Low.” If you answer 3 or 4, that’s “High.” Write down whether you are High or Low for Literacy, Engagement and Anxiety. Now see what Archetype you would fit into and let’s talk.
Over Optimizer
You read the White Coat Investor blog, listen to podcasts, and comb through the Bogleheads forum. You’re interested in personal finance and like to DIY. But you don’t know if you’re doing enough or doing it perfectly. When you read about a new personal finance strategy, you always wonder if you should be doing it. Here’s our primary advice: take a breath. It doesn’t have to be perfect. Good enough is good enough. Quit driving your spouse nuts, ha! Work with a planner to set up automation and contact the planner when you need to be talked out of some hair-brained scheme, ha!
Smooth-ish Operator
Like the Over Optimizer, you read a lot and are interested in personal finance. Unlike the Over Optimizer, you aren’t stressed about it. At all. This is great! This is generally ideal. So why Smooth-ish, rather than Smooth? Well, sometimes a little stress can be good. You may be a little too laissez-faire. You may downplay the benefit of new strategies or be too nonchalant to implement small improvements. More likely, you may not have the professional acumen and detachment to determine what’s new and what’s not or what’s worth doing and what’s not.
Paralyzed Analyzer
You read a lot about personal finance but have trouble taking action. Where to start? The breadth of personal finance can be overwhelming. If you can only muster the time and energy to do one thing this month, what should it be? You should probably work with a trusted advisor who can help you prioritize your action steps and develop strategies to knock out important to-dos. You can do it! Read Atomic Habits. Start small. Develop momentum.
Benign Neglector
We love benign neglectors. You are a great fit for Aptus. You know a lot about personal finance, but you don’t want to spend a lot of time on it. And you’re pretty chill about it. That means you can easily follow the mantra “set it and forget it.” To be fair, you are much better at forgetting it, so you need help setting up automation that takes advantage of your natural inertia. You might also need help keeping things on track. But please continue to be chill.
Blissful Ignorer
On the surface, it sounds similar to a Benign Neglector, right? The difference is that Blissful Ignorers don’t know what they don’t know, so the light at the end of the tunnel (e.g., retirement) may be an approaching locomotive (e.g., chronic debt). You can still be a great setter-and-forgetter when you're further along in your journey toward financial literacy. Until then, you may find it challenging to set things up [well] on your own before you start forgetting, ha! No problem, you just need to work with a financial planner who can explain the details and help set things in motion.
Nervous Avoider
This is most of us, right? We see you. You don’t want to read about personal finance. You take no pleasure in financial activities. It’s not an area of interest. Plus, you’re worried sick about the financial tasks you’re ignoring and worried sick you might screw something up if you charge forward. You’re in good company. This is super common. Forcing yourself to learn more about personal finance, even if you find it a bit tedious, might help your confidence. Working with a trusted advisor may be a necessity.
Gunslinger
You, my friend, are a lot of fun. You’re not a student of finance, you just like to go fast and break things. You especially like to trade. Anything. You might buy the stock the person recommended at the water cooler. Or the cryptocurrency your Uncle Bob talked about. Or the silver coins you saw on a Facebook ad. Stop it. Just stop. Ha! No worries, we can keep a Robinhood account for your play money, and teach you the boring, effective way to invest your “real” money.
Busy Bumbler
You’re not nearly as much fun as the Gunslinger because you’re not enjoying it. Not at all. You can’t help yourself though. You hear something and feel like you should take action based on what you heard. Then, almost instantly, you regret it. You hear something else. You do something else. Wash, rinse, repeat. We need a Benign Neglector to teach you the art of doing nothing. And maybe you can learn a bit about personal finance from them too.
What do you think? Did the Archetype describe you? There are stronger and weaker forms of each Archetype, and you may not fit perfectly into one of the boxes. That’s ok. It’s just a fun way to start to think about our complicated relationship with money and how it might inform our approach to managing our finances. If you are married or have a partner, meshing your two unique perspectives adds a layer of complexity. We’re all crazy and beautiful in our own way, and we can lean on each other as we muddle through our financial lives.