How a Financial Advisor Invests Their Money – Cameron Hendricks, Ep #132

It’s always fun to peek behind the curtain and see the strategies and process people use for their decision making.

During this conversation, we review some of my core beliefs on how I manage my own money including:

  • Financial decisions must be integrated as every financial decision affects others
  • Being intentional and being a good steward with our money decisions
  • Navigating the balance between enjoying today while saving for tomorrow
  • Structuring money management around the Live, Give, Owe and Grow philosophy

4 Primary Uses of Money

I have framed our financial decisions around the idea that there are 4 ways you can use your money. You can use it to live, give, owe, or grow. For us, we rank these in the following order: give, grow, live, owe.

Give

Giving is at the top of our financial priority list as we have found if not done first intentionally, then there is typically nothing left to give if it is at the bottom of our budget. We’ve also seen firsthand how giving can release our grip on money and break the power that money can have in our daily lives.

Grow

My goal for investing is to provide a higher likelihood my future self will have the flexibility to make decisions, and therefore live life by design and not by default. The key for us has been automating our savings and currently that equates to approximately 15% of our income. We use 401k/403b, Roth IRA, 529, and a brokerage account all of which have their intended purpose in an investment strategy to maximize tax efficiency and future use. Overall currently we have approximately a 90% stock exposure.

Owe

I’ve never wanted to put myself in a position where I wouldn’t be able to pay off a debt with relative ease, and therefore want the likelihood of being underwater on a loan to be very very small. We’ve always put down good size down payments on houses/cars as well as paid attention to low interest rates, both of which have also helped keep payments on the lower side.

Live

With 3 yr old twins, a large part of our spending goes to daycare costs! After that along with the above Give/Grow/Owe categories, we are relatively free to spend as we see fit with little guilt. We try to spend money on the things that create joy, including going to NC State sporting events and going on camping trips.

Tune in to the episode to hear more.

Outline of This Episode

  • [4:25] What are Cameron’s money influences?
  • [9:07] How does Cameron divide up his resources?
  • [15:27] Does he worry about his 90% stock allocation?
  • [21:26] How does he see debt?
  • [26:30] What was the best money he spent in 2020?
  • [31:15] The power of small wins

Resources & People Mentioned

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