Pizza and your financial life: what do they have in common? Recently, I was able to take advantage of a Christmas present from my wife Betty. We had purchased a wood-fired pizza oven earlier last year, and I quickly figured out that you can buy a pizza oven, but you may not know how to wood-fire a pizza. It has been a long learning curve for me. I’ve bought many books, watched many videos, and had many pizzas that did not turn out and some that turned out fairly well. The gift that Betty gave me was a wood-fired pizza cooking school. She found two, professional, wood-fired pizza makers to spend a couple of days going over everything from the selection of dough to how long it should rise, the room temperature, spices and how to create your own sauce, what kind of wood to use, and how to get the pizza in and out of the oven without having everything fold over on itself, and how to cook it until it is golden brown and delicious.
What does that have to do with building your financial life? Building your financial life is sometimes just like selecting a pizza. Here's what I mean:
Do you like frozen pizza? Frozen pizza is just like choosing the investments of a 401k. They’re already in the freezer case waiting for you. Someone else made the pizza. It has been sitting there for who knows how long, and what you see are the only choices available.
How about home-delivered pizza? That’s kind of like target date funds. Many people find companies that put together investments that are targeted toward certain dates, but the ingredients (the dough, the sauce, the toppings, etc.) have been chosen by someone else. Then, it’s delivered to your house and it’s slightly better than your standard frozen pizza. Some may actually be pretty good, but it’s still an off-the-shelf choice.
Then there’s take-n-bake. Here, you get to choose some of the ingredients, but now you’ve got to take it home and hope that your oven is working correctly, the temperature is correct, and that you are timing is correct so that it doesn’t come out undercooked or overcooked and burnt. You were kind of able to create the pizza yourself, but really, you were just able to pick what they already had available for options.
Then there is making it from scratch. I’ve had many failures over the past year, not all failures, but I didn’t know completely what I was doing. When you make a pizza from scratch, you can craft the pizzas exactly how you want them, but you have to understand the ingredients, you have to understand the construction, you have to understand the flames, and the total complexities involved in making it work. That’s why people will often search for a wood-fired pizza restaurant because there really is a difference between that and having a frozen pizza or a home delivery pizza or a take-n-bake pizza, and that is exactly how it works with your own financial life.
Are you getting something off of the shelf with ingredients that someone else has already chosen or are you having it hand-crafted just for you? If you would like to have more information on how we craft financial futures, then perhaps it's time for you to schedule your Financialoscopy®.
