Desperation
Feel lost at least once a day? Seems normal to me (Desperation was written in 1968, and lord knows you can find songs about being lost, anxiety, and depression as far back as we have recorded music). However, our world feels like an endless amount of choices, creating an infinite level of complexity.
It’s Complicated
We can be bombarded moment by moment. Text messages. Personal email. Work email. Work phone. Personal phone. Advertising. Video. Your brain has something like 70,000 thoughts per day. It runs 24 hours a day. It consumes roughly 20% of the calories you burn each day. That is a lot of thinking. It makes who knows how many decisions each day (I have seen estimates ranging from 6,000 to 35,000).
Tired at the end of the day? No wonder. We have so many choices it can be impossible to relax, since the next decision feels urgent and smack dab in front of us. What is on my to-do list? Did I get everything onto my list? What is the traffic like today? What route do I take home? What to watch? What to read?
Made a decision? You can find at least one source of some kind, or some person, that contradicts your decision. Did I make the right decision? Will it blow up in my face? There are plenty of loud noises, daily. Editorials masquerading as news. Everyone pitching their way as the way.
You try to get it way from it all. And yet you have to make decisions to do that. Then, things can happen that affect you. What if your flight is cancelled? Or there is a big storm and you get stranded? Or power goes out at the house while you are gone? Even things you intend to be pleasurable can have a decision tax. Anxiety is the clinical diagnosis of the day. Lexapro and equivalents? Might as well be ballpark peanuts the way they are consumed.
Moving Forward
Maybe it is time to go backward as we go forward. Not in time. I am not a believer in returning to the “old days”. Our world is vastly better each year. I mean backwards in how you process. Whether you read Seven Habits, Atomic Habits, Marcus Aurelius (my favorite), the latest bestseller on this topic, keep a journal, or use Headspace, these are all saying, essentially, the same thing:
“The chief task in life is simply this: to identify and separate matters so that I can say clearly to myself (emphasis, mine) which are externals not under my control, and which have to do with the choices I actually control. “ Epictetus, Discourses.
“Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom.” ― Viktor E. Frankl.
One of the things that makes the human race so powerful is our ability to choose. To control the complexity of our world, you have to use it. Every day. Nearly every moment. With intention.
Once you determine what is within your control, and therefore the choices that are worth spending time on, you may want to prioritize your choices, which to me is Steven Covey’s key point. This is another means of reducing complexity.
Here is how we reduce complexity in financial planning:
Spend less than you make. By the way, your spending plan needs to accommodate your fun money.
Save automatically.
Understand and document your ‘enough’, so that when you reach funded contentment, you know it. Revisit this, often.
For money you can’t lose, I advise investing in a long-term, diversified, low-cost, consistent strategy, mostly indexed. The probability of compounding and therefore, long-term ‘winning’ is quite high. You won’t hit many home runs this way. More importantly, the probability of ‘losing’ over a 20+ year period is quite low, and most of us have quite a few years to live. The median age in the US is 39 and the average life expectancy is 77. If you are above average (most of you reading this are), then you should plan for a longer life span.
These things are simple, and easy to say, and equally hard to execute and stick to.
The way to accomplish #1 is through #2. How do you figure out #2, at least quantitatively? You define #3 (this is part of what we do when we build your financial plan) and quantify what you can. In plain English, define how much you want to save and set that up automatically so that you save first. What is left is what you spend, which you can do with abandon, since your savings need is both defined and automatically executing.
Once this process is established, a few things happen, mentally:
You gain a level of comfort through the elimination of worry about your future and what you know you ‘should be doing’ - because you are doing it.
Anxiety about spending can be substantially reduced or eliminated, as there is no need to monitor it, and if you are saving enough then there is no need to worry about it (some people will, of course!). Monitoring and/or judging spending spending - what folks regard as the traditional budget process - is no fun for you and a primary reason why people avoid financial planning (it is no fun for us, either!).
There are no thoughts involved or complex decisions to be made. It is automatic.
As more information, new tools (hello ChatGPT/AI), more products, and more people come to this world, it gets more complex. All the more reason to stick to first principles:
Control the controllable.
Make as few decisions as possible by automating as much as possible.
Enjoy what you have.
Sundry
I finished My Father’s House this week, an entertaining historical novel about World War II resistance and the Vatican.
The Webb telescope is producing amazing data and images.
Could it be? Could Dan Snyder be selling the Commodores?
H/T to Tom Morgan, who stimulated this piece.
If you want to know my background, go here.