I’ll put it out there in the universe – I’d like to be a Brand-with-a-capital-B someday. Books, TV shows, t-shirts, memes, all featuring some witty quip of mine and making me money while I sleep. Like Suze Orman, only less irritating. That’s not even how you spell Suzie.
Marie Kondo has it down. She has made millions by telling us what slobs we are, yet her sweet personality, soothing voice, and adorable wardrobe have us falling all over ourselves to hear her message. So, until I can become my own Brand-with-a-capital-B, I’ll just gently borrow Marie’s ideas.
I give you the Magic Art of Tidying up Your Finances.
Like Marie, we will sort by category, not by room. We’ll start easy and then get to the harder, sentimental stuff last.
Category 1: Consolidate your accounts.
Just as having 6 white shirts doesn’t spark joy in your closet, having 4 old 401(k) plans and IRAs at 3 different custodians does not help your finances to be more diversified. It’s only messy. Pick your favorite broker (I’m partial to the discount variety like Fidelity, Schwab, TD Ameritrade, E-Trade, and Vanguard) and move all like accounts to one.
Category 2: Papers.
This is straight from Marie! So much of people’s clutter is in the form of paper that is unnecessary to keep. Sure, you may need proof of residence for your kids’ school choice forms. Keep one- or two-months’ worth of utility or cable bills. Beyond that, everything you need for proof of payment or purchase can be gotten online. Get thee to the shredder with those old investment statements and bills!
Category 3: Investments.
Here is where the emotional stuff comes in. Once you’ve consolidated your accounts, you can more easily see where you have too many types of one asset class. Hint, one large cap US stock fund is fine. You don’t need ten. They all invest in the same stuff. Also, selling an investment that didn’t work out as you planned does not make you a quitter. Just an unemotional investor, as we all should be.
As for the sentiment, remember, just because your great-grandfather bought those shares of GE, doesn’t mean it’s good for your portfolio to have 15% invested there. What served you (or previous generations) before, may not serve you still. Don’t be afraid to sell old investments! It’s the only way to have a streamlined portfolio.
Of course, you’ll want to thank the old accounts, papers, file cabinets, and investments that have served you before getting rid of them. I hope reading this blog has sparked some joy in your day.