Another Year Older

Whenever my birthday comes around I reflect on the things I've learned during the year. My birthday just happens to fall near the end of the year, which is fortunate because I can use what I've learned when developing my New Year's resolutions. I'll share my resolutions in the next email. In the meantime, here are three of the things I learned, or lessons that were reinforced, during 2019:

1. Regardless of income, nearly everyone overspends in the same categories. I've worked with individuals and couples of all ages and income levels. Whenever I do a cash flow analysis, the results are the same: Shopping, dining out, groceries, and subscription services are the categories that kill budgets. I even created a calculator to help people see how much they spend on subscriptions.

2. Income inequality is bad, but you're probably better off than you think you are. The people I work with are doing well financially, but they don't always feel like they are. This is understandable given the high cost of living in major cities, child care expenses, etc. I don't have any easy solutions to resolve this problem, but sometimes it's helpful to have a reminder that you're probably better off than you think you are. Check out the table in this article to see how you measure up.

3. How we invest continues to evolve at a rapid pace, but the basic principles of investing are still valid. During 2019 we saw trading commissions for stocks and ETFs go to zero, major consolidation in the financial services industry (Schwab buying TD Ameritrade), the proliferation of online investing tools (Robinhood, Personal Capital), and major outflows from mutual funds and inflows to ETFs. All of the changes and slick tools haven't changed the fact that it's important to build a diversified portfolio, keep your costs low, and stick to your plan. Don't have a plan? Use this tool to get started.

Listening / Playing / Reading / Watching

Here's what's keeping me busy in my spare time:

• The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of the Walt Disney Company by Robert Iger. I just started this and will let you know what I think about it as I read more.

• The Andromeda Evolution by Michael Crichton and Daniel H. Wilson. Sadly, Crichton died in 2008. Fortunately, Wilson does a decent job of expanding the story started in The Andromeda Strain.

• Gears 5 on Xbox One. Who knew the stagnating video game series would reinvent itself with an open-world? Gorgeous and fun to play. I'm looking forward to the inevitable Gears 6.