Spare Change and Play Money

I was a teenager the first time somebody came up to me and asked if I had any spare change. Catching me off-guard, I fiddled around in my pocket while I pondered the question, wondering what was meant by “spare”. Considering that change was pretty much the ONLY money I had, none of it seemed spare to me. Even then, I had worked hard for that money!

Flash forward a few decades, and I find myself managing not only my own, but other people’s money and occasionally I hear the phrase “play money”, usually referring to playing the market. We sometimes accommodate this for clients who: A. Have more than enough money to last their lifetime, and: B. Take FULL RESPONSIBILITY for the outcome (for something akin to gambling). Otherwise, money we manage (both for ourselves and clients) is too important to consider it “spare” nor “play”.

I think I’ve maintained a healthy perspective about money. I’ve certainly never obsessed over it, but I do appreciate its value. Consequently, I find the phrase “spare change” almost offensive and admit to not being a fan of “play money”. Too many times to count we have seen how quickly it isn’t that fun anymore.

“Extra” money is our preferred label to either “spare” or “play”. We define extra as money one is unlikely to need in their lifetime. While even the most sophisticated Financial Planning software doesn’t guarantee results, it renders “probabilities of success” that provide confidence in helping to answer the very important question “How much will we need to maintain the lifestyle we seek?” By implication, this also tells us how much extra we may end with.

We know people with multi-million-dollar portfolios who may not have enough as well as people with a few hundred thousand dollars who likely have more than they “need”. One of the most common questions friends ask us is “How much does one need to retire?” The ONLY correct answer is “It depends.” A very short list of variables includes lifestyle expenses, pensions (or lack thereof), legacy prioritization, and the odds of moving to another state…or country.

If you are clients, you can have confidence that we treat ALL your money very seriously like the precious nest egg it really is. Sometimes this means that we have the dismal job of saying “You can’t afford that”, but sometimes we have the joy of telling clients “I sure hope you aren’t scrimping!” or “You can afford to be (more) charitable if you want to.” or “I see no reason you can’t afford that sports car you’ve long dreamed about!”

How wonderful it is if people reach a point in their lives where money is no longer their primary consideration.