Author Archives: nhoffmanandco

Hey Big Spender

money-throw-1

October 15, 2018

I have just found out that I spent $138,538.37 at Publix, $61,429.08 with Georgia Power, and $39,142.03 with ATT. At the same time, I fueled up at BP Gas to the amount of $24,289.47 and handed over $15,969.37 to CVS.  You thought you were a big spender!  Now before you call me an irresponsible spendthrift, I must tell you that these expenditures took place over the last 20 years. The figures came to light to me as I celebrated my platinum anniversary as a user of Quicken, the financial software system we use to manage our family finances.

My world looked a lot different back in 1998. I did not know then that my career would culminate in advising families, but I did understand I was working for the most important family I had – mine!  At that time, I was enjoying my life as a capital market professional working for a top Wall Street firm until a fateful day when my new boss came to Atlanta from New York. He told me that the firm no longer felt the need for an “Atlanta presence”.  I walked out of the meeting with no job and the realization I need to quickly understand where we were spending our money.  Quicken was the first purchase I made as an unemployed worker. I could no longer afford to be in the dark about our spending.

Our family’s chief technology officer (my wife) soon took on the responsibility of tracking our expenses.  She diligently captured all transactions whether they were by check, credit card, debit card, automatic draft or cash. And so, I am now able to take a nostalgic look back at the 20-year history of our spending.  I found the results illuminating, and even a little surprising.

We have paid money to over four thousand different payees from 1-2-3 Stitch to Zoo Atlanta. Some large expenditures, like those for college and home renovations, were planned. Others have accumulated through regular life to the point where the numbers are hard to believe, such as the $3,698.05 spent at our family favorite Mexican restaurant, or the fact that we have written checks to forty-nine different doctors.

My short-term New York boss helped me understand that the way to build wealth over time starts with a simple discipline – spend less than you make.  When I ask families considering their retirement plans how much they spend, the answer is often far from precise. I never ask this question to be judgmental, but to start a dialogue which emphasizes the power of knowing where you spend your money.  The freedom and comfort that comes from this knowledge is very liberating. With knowledge, comes clarity.

We naturally worry about our health, our children, and our money.  These worries can consume us. If understanding your spending helps eliminate a major worry, it strikes me that one of my forty-nine doctors would suggest it’s a good thing.

Carl Gambrell

numbers

Want To Share That?

millenials

October 8, 2018

I spent this past weekend camping in North Georgia with no cell service. As a Millennial, I found being disconnected from technology quite uncomfortable, but it also gave me plenty of time to reflect on how much easier my life was thanks to technology. One of the main areas that kept coming to mind was the “shared economy”.

The shared economy has become one of the most popular, and arguably most effective, business models in my lifetime. The most well-known examples of companies that have led this technology-driven model are probably Airbnb and Uber. But home rentals and ridesharing are not the only services provided by this shared economy.

Less familiar companies like TaskRabbit, Care.com and Upwork are a crucial part of the new shared economy world in which we live. TaskRabbit provides in-home services from walking the dog to handymen coming in and fixing stuff around your house. Care.com connects consumers looking for sitters for children or the elderly with the people providing such services. Upwork was launched to help companies without a need for a full-time role in specialist areas like programming and design, to find “freelancers” with those skills.

There are even shared economy options for clothing. Did you know there is a service which enables you to borrow and wear a full set of clothes on a subscription basis, with the choice of buying them at a discount afterwards or simply returning them with free shipping? Women may be interested to know that Rent The Runway allows consumers to rent designer gowns for a special evening at a fraction of the selling price.

The list of shared economy services goes on and on. From sharing a car, to renting a scooter in the middle of the city, to sharing the workplace for periods of time, and even borrowing someone else’s clothes, there is one thing that these companies have in common – technology.

The reality of our era is that developments in technology have allowed service providers to build a platform – in many cases this is just an “app” – and monetize the benefits of sharing resources. One feature of this shared economy is that these platforms typically just facilitate the transaction between the consumer and the actual owner of the resource. This facilitation has allowed resource owners to make a few extra bucks in their spare time, or even create their own full-time job.

As a consumer of shared economy services, I enjoy finding goods and services at a discount within reach of my fingertips. Who wouldn’t want to simultaneously save time and money? The only requirement is to have a smartphone.

As I made my way back in to the “real world” with full cell service, I reminded myself of how lucky I am to live in a time where there is easy access to almost any service I could possibly imagine. And for those services beyond my imagination, there is no doubt that some App out there already does that!

Nirvanna Silva

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