• John Krehbiel

Who or What do you want to have an IMPACT on?!


Who or what do you want to have an impact on? This question is important for anyone who has been successful managing his or her money. I expect that everyone who reads this article is living above a basic subsistence level, so a portion (probably a large portion) of the money that you earn is being used to purchase things, opportunities or experiences that are important to you. This money can have an IMPACT!


Freedom: Using Your Money to have an Impact on Yourself

Most people work to make money to be able to do and buy what they want when they are not working. But if you decide that you want your money to most powerfully impact you, then it can be used to make it possible for you to do the work that you want to do. This idea is nicely developed in Lawrence Yeo’s article “Money is the Megaphone of Identity” https://moretothat.com/money/ . He describes that once you get out of a Survival Mindset towards money, you can enter the Freedom Phase. The lower part of the Freedom Phase, Freedom-as-Leisure, has similarities to the Survival Mindset. “I’m going to survive my time at this job I hate, in order to purchase leisure time where I can experience freedom.” But Yeo points out that this isn’t a great trade-off because the hours surviving work are usually larger than the leisure hours. Better is to use your money to enable you to have Freedom-in-Work, i.e. do the work that you enjoy and makes you feel fulfilled.


Personally, I was able to do this when a good salary and money decisions as an executive at Harris Corp. enabled me to switch into teaching high school physics at West Shore Jr./Sr. High, where my kids were going to school. It was a blessing to see my kids every day and to know and teach their friends.


When the work you do is fulfilling, the amount of money you need to have “enough” is decreased. Yeo says, “In the Freedom Phase, money is seen as a tool, an amplifier of the authenticity you embody. It is the resource that allows you to take care of yourself as you work on the problems you find worthwhile. You don’t need a lot to keep going, you just need enough.”


Family: Using Your Money to Impact Your Family

The primary question I want to address here is not if, but when. I have clients who know they are going to pass down a large amount of money to their children when they die. I find myself encouraging them to consider gifting the money now, so that they are around to see some of the enjoyment gained by their children and grandchildren. You can gift $15,000/year to any one person without notifying the IRS, and currently you can gift a total of $11.58 million in your lifetime without paying any tax on that money.


Philanthropy: Using Your Money to Positively Impact the World

Many people give to charities that work to improve their community and the world. From a financial planning standpoint, charities benefit from tax exempt status, so it is possible to maximize your impact if you do tax-aware giving. For example, giving appreciated assets (like stocks that have gone up in value) enables you to avoid the tax on the appreciation, and the charity will get the full value of the asset. The Trump tax cut made tax deductibility of regular giving more difficult, however if you give over $5,000 or $10,000 per year there are often ways to at least get a partial tax cut while positively impacting the world.


Bottom Line:

Your money exists to help you achieve your goals. You decide who or what you want to have an impact on with your money!


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