Betty Needs a One Pager

Betty pulled a legal pad from her purse and clicked her pen.

Jingo settled beside her at the kitchen table. Borris was asleep in the chair Dudley had intended to use.

Betty looked at Dudley.

“Are we okay?”

Dudley turned toward his laptop.

“No.”

He stopped.

“I didn’t do anything.”

“You were going to open something.”

“I was going to answer your question.”

“You were going to explain my question.”

Dudley looked at the laptop. This was possible.

Betty wrote three things on the pad.

What do we have?

What does our life cost?

Will it last?

“Answer those.”

“I have answered those.”

“On one page.”

“I’ve answered them on several pages.”

“I know.”

Dudley had built a retirement system. It contained accounts, expenses, taxes, income, inflation, investment returns and several versions of the future. It was thoughtful, comprehensive and almost completely useless to Betty.

She pushed the legal pad toward him.

“One page.”

Over the next few days, Dudley collected the numbers.

He started with what they had.

Their brokerage accounts held approximately $1.2 million. That included the 401(k)s, traditional IRAs, Roth IRA and taxable investments they had accumulated through decades of jobs and ordinary saving.

The brokerage companies supplied those balances. Dudley did not estimate money when somebody else already knew exactly where it was.

Their local bank supplied the balances for checking, savings and the auto loan. The mortgage balance came from the bank holding the mortgage.

The house and cars required a different standard of precision.

Dudley searched the Internet.

According to various websites, their house was either a valuable historic property with considerable character or an aging collection of future repairs located on a desirable lot. Dudley selected a reasonable estimate.

The cars were easier. They had lost value while he was looking at them.

He put everything into the detailed balance sheet underneath the one-pager. Financial accounts, cash, property and debts all went into the system. On Betty’s page, most of it became two lines:

Financial assets: about $1.2 million.

Net worth: about $1.4 million.

Dudley shaded the net-worth number gray. He liked knowing it, but the house could not buy groceries unless they sold it. Betty liked the house because they lived there.

Next came the cost of their life.

Dudley had created budget categories in Lunch Money: mortgage, auto loans, healthcare, essentials, discretionary spending, travel and home improvements. Each category had a monthly budget.

Their actual spending refused to cooperate.

One month had more travel. Another had a house repair. Some months included dinners with friends. Others included a trip to Costco that neither of them could fully explain.

Lunch Money showed what had actually happened. Dudley reviewed the transactions, fixed the categories and compared the results with their plan.

The months were different.

The average was close enough.

Their life cost approximately $10,000 a month.

That number included more than the bills required to keep the house running. It included travel, dinners, projects, giving and time with people they loved.

Earlier versions of Dudley’s budget had treated those things as exceptions. Eventually, enough exceptions became a life.

The same categories went into ProjectionLab. Lunch Money looked backward. ProjectionLab looked forward.

Dudley told ProjectionLab which portions of their expenses were fixed and which were adjustable. The mortgage, auto loans and health insurance were fixed for now. Parts of discretionary spending, travel and home projects could be reduced if markets became unpleasant.

He also told it that some expenses would decline every five years. The auto loans would eventually end. Health insurance would change at Medicare. The mortgage would someday disappear, assuming the house did not outlive civilization.

Then he entered consulting income, Social Security and the brokerage balances. ProjectionLab carried everything into the future and tested whether the money might last.

It produced charts, projections and hundreds of alternate versions of Dudley and Betty.

Some were rich.

Some were poor.

Most were fine.

The detailed explanation lived in a section Dudley called For the Nerds. Betty had granted him this territory as long as she was not required to visit.

Sunday morning, Dudley returned to the kitchen table with his laptop.

Betty had her legal pad. Jingo sat beside her. Borris appeared when Dudley opened the computer, having heard the unmistakable sound of a lap becoming unavailable.

Dudley turned the screen toward Betty.

“At the top is what we have.”

“One-point-two million.”

“In the brokerage accounts.”

“And the other things?”

“Cash comes from the local bank. The mortgage comes from the mortgage bank. The house and cars are estimates.”

“From where?”

“The Internet.”

Betty nodded.

“Probably.”

“Exactly.”

Below that was the cost of their life.

Approximately $10,000 a month.

Betty studied the number.

“Do we spend exactly that every month?”

“No.”

“Then why is that the number?”

“Because the months move around. Lunch Money tells us what we actually spent. Ten thousand is the planning average.”

“So one expensive month doesn’t mean something is wrong?”

“No. We look at the trend.”

Betty nodded again.

This was going better than most financial conversations.

Dudley continued.

“I entered the same expenses into ProjectionLab. It tests whether our investments, consulting and Social Security can support them.”

“And?”

Dudley felt several paragraphs approaching. He let them pass.

“Yes.”

“Yes what?”

“We’re okay.”

Betty looked at him carefully.

“You’re sure?”

“As sure as anyone can be about the next thirty years.”

“That sounded less reassuring.”

“The plan works if we pay attention and adjust when things change.”

“What happens if the market crashes?”

“We use the safe money and avoid selling investments while they’re down.”

“And if it stays down?”

“We reduce the adjustable spending.”

“Travel?”

“Some.”

“Home projects?”

“The ones that can wait.”

“Flowers?”

Dudley considered the correct answer.

“Essential infrastructure.”

Betty smiled.

Jingo climbed into her lap. The meeting appeared to have received feline approval.

“What if the market does well?” Betty asked.

“We refill the safe money, rebalance and maybe spend a little more.”

“On flowers?”

“Apparently.”

Betty wrote something in the margin.

“What did you write?”

“Live a little.”

Dudley looked at the page. The entire guardrail strategy had just become three words.

Borris put one paw on Dudley’s leg.

“There is no room.”

A second paw appeared.

Dudley moved the laptop. Borris climbed into the newly available space, turned around three times and settled down.

“You’re interrupting the annual financial review.”

Borris closed his eyes.

“Strong objection.”

Betty looked back at the page.

“How often do we do this?”

“I’ll check Lunch Money monthly. Every few months I’ll look for trends. Once a year, I’ll update all the account balances and rerun the plan.”

“And when do I need to worry about it?”

“If something big changes.”

“How big?”

Dudley paused.

Betty smiled.

He had seen this trap before.

“Big enough that the plan no longer looks like our life.”

She wrote:

If something big changes, look again.

Dudley read it.

“That isn’t very technical.”

“That’s why I understand it.”

At the bottom of the page, Betty drew a line.

Dudley still had more. Taxes. Roth conversions. Investment allocation. Inflation assumptions. Monte Carlo results. Withdrawal order. Social Security estimates. Thirty-three years of projected balances.

Betty pointed toward the laptop.

“Underneath.”

The details could stay there. They mattered because Dudley needed to understand the machinery. They did not all belong on the dashboard.

The one-pager only needed to show where they were, where they were going and when they might need to pay attention.

Dudley read it from the top.

They had about $1.2 million available to support retirement. Their life cost about $10,000 a month. Consulting and safe money helped now. Retirement accounts and Social Security helped later. If markets fell, they could reduce adjustable spending. If something important changed, they would review the plan again.

Betty understood where the numbers came from.

More importantly, she understood what they meant.

“So we’re okay?” she asked.

Dudley looked at her.

“Yes.”

No qualification. No chart. No opening the laptop.

Just yes.

Betty wrote one final sentence at the bottom of the legal pad.

We’re okay. Go live.

She tore off the page and handed it to him.

“Make this pretty.”

“How pretty?”

“One page.”

“I understand the requirement.”

“I don’t think you do.”

“No appendices?”

“No.”

“Footnotes?”

“No.”

“QR code?”

Betty stared at him.

“That could take you directly to For the Nerds.”

“Dudley.”

“Fine.”

Borris stretched across the keyboard. Jingo settled deeper into Betty’s lap.

The financial review was over.

The household had voted.