Ignore the Click Bait

Several times per month I receive an email from a client with a link to some very scary article with a completely captivating headline.  Something like: “The man who predicted the 2008 global recession warns investors of a complete financial collapse in 2023” or “Man who predicted Lehman crash makes new warning.”  (The latter was an actual article on Yahoo Finance as of the writing of this post.)

I would like to break this down in a couple of ways.  The first is that these articles, which suddenly appear in our social media feed, appear to be a sign from God that He is speaking directly to us, giving us a message upon which we must act.  The reality is that these websites know much more about you and your predilections than you would ever want to believe.  These articles are known as “click bait” and I too have clicked on them once or twice before I figured out what was happening.  In fact, the article writer pays to have their “article” promoted and advanced to your feed.

Generally speaking, these writers have no interest in guiding you to smart financial decisions but most certainly are trying to gain subscribers to their newsletters or their “systems” for beating the market.  Click and read at your own risk.

The second issue that I would like to bring up is that pessimism is much more titillating and tantalizing than optimism.   Here’s an example of two imaginary headlines:  Stock Market Plummets on Recession Fears or Market Advances on Upbeat Employment Data.  We may be drawn to the first article because it could create insight on how best to handle the upcoming recession.  The second article will not garner the same interest as it relates to things moving in a normal direction.  If you miss the former, there may be dire consequences while the latter has no consequences on your investment portfolio.

The reality is that neither article should have any bearing on a well-designed long-term strategy.  You can’t time the market.  Investing is much like planting a garden.  If you plant the seeds properly, provide fresh (weed free) soil, and sunlight, nature does the rest.  You would never dream of pulling up your carrots to check on their progress mid-way through the summer.  Your carrots will go through periods of sudden and slower growth.  Think of the immense change very early on before you even see the sprouts of green poking through the earth.  It is invisible to us, but we trust in the process and our preparation.  Your investment statements come monthly and unless you don’t open the envelopes you know exactly where you stand each month.

Pessimism sounds smarter.  It also manages to get more airtime or print space.  Say something dramatic about the market or the economy and before you know it there is a microphone in front of you.  The optimistic narrative takes a longer time to play out and is so much more boring because the progress happens more gradually and at a slower pace.  However, for long term investors we need to be reminded of our time horizons.  What happens in the next 6 months, or when the Fed stops raising rates, or how mild the next recession may be is immaterial to where we will be five or ten years from now.

For proof, think about where you are right now relative to where you were ten years ago.  Who was the Federal Reserve Chairman then and what did they do to interest rates?  How did that impact you?  When was the last debt ceiling crisis?  Did your portfolio plummet?  When was the last time unemployment was over 6%?  Did you have a job?  None of these are rhetorical questions; they are real.  This is my job, and I would be hard pressed to answer all these questions correctly or with any specificity.  The reason is that for a proper investment strategy and a time horizon greater than a few months these questions aren’t relevant.

I recently finished reading one of the best financial books that I have read, The Psychology of Money by Morgan Housel.  The premise of the book and its 20 concise chapters is that our investment outcomes are based solely on two main factors.  Number one, time is the greatest advantage for those seeking to create or grow their wealth and secondly, our behavior is the greatest determinant of our success.  I have highlighted my copy of this book more than I have highlighted any book in recent history.

Chapter 17 is titled “The Seduction of Pessimism:  Optimism sounds like a sales pitch.  Pessimism sounds like someone trying to help you.”  Mr. Housel further defines optimism as the belief that the odds of a good outcome are in your favor over time, even when there will be setbacks along the way.  I believe this with every fiber in my being.  It is such an honest approach and not in any way Pollyannaish or naïve.  There will be setbacks, of course.  We are experiencing that right now.  We know all about setbacks.  I can assure you that the conversation that we have in five years will be about something completely different than what ails us now.

We have no interest in piquing your interest with salacious headlines or click bait.  You are our friends, our clients, and we take our role as wealth advisors as seriously as you can imagine.  I am committed to helping you navigate through this time of setbacks and help you arrive at your destination.  We share our view and our perspective every other Wednesday on our coffee talks.  If you (or a friend) ever find you need a dose of reality and help from a guide who is interested in your success, I encourage you to please tune in.

Keep your carrots in the ground, I can assure you they will taste much better if allowed to grow to their full potential.

Where Are You Going?

Last year I read Matt Haig’s book The Midnight Library, which I really enjoyed.  I won’t spoil it for you, but the gist of it was that there are infinite ways our lives could turn out based on the smallest of decisions we make.  In one life, one could be an Olympic athlete, in another a socially awkward loner with multiple cats, and every life in between.  Each decision we make helps to shape the future we prepare for ourselves, thus the title, “Where are you going?”

The word “Decision” comes from the combination of two Latin words de (off) and caedere (cut) or to cut off.  Decision then means to cut off every other option that exists.  When we decide we choose our path and close off every other path available.  It is overwhelming if you think about it too long and empowering if you find a way to manage it.

I recently read that the average adult is estimated to make around 35,000 decisions each day.  This is where it gets overwhelming.  Each one of those 35,000 decisions helps to define who you are and where you are going.  It also means that where you are now is a reflection of every decision that you have made.  If you like where you are, then good for you, you made some good decisions.  If you are not crazy about where you are, the way I see it you have two options; you could wallow in your self-pity, or you could focus on making better decisions going forward.

It is this second option that I would like to focus on.  In my book, Now What?  A Practical Guide to Figuring Out Your Financial Future I refer to your “future self” and the responsibility you have to that person.  Making some modest sacrifice today in order to set up your future self a little better is the primary point.  This brings us back to the idea of making the decisions we make every day.  It is unrealistic to focus on all 35,000 of them, most of which will not directly influence your life path.  But, we can bring intentionality and attention to the more important ones.

We should have an idea of who we would like our future self to be.  Let’s try a little exercise.  Fast forward in your mind twenty years from now.  In your ideal life, what are you doing?  Where do you live?  Are you fit or not so much?  Are you happy?  Are you surrounded by people who love you and validate you?  What are you wearing?  It is important to be as specific as you can be with this exercise.  When I do this, I am usually alone, maybe some restful music on, and most assuredly my eyes are closed.  I have done this so frequently over the course of my life that I can be so specific that I can almost feel myself living this future life, sipping an espresso under the shade of an umbrellaed bistro table along the perimeter of St. Mark’s Square in Venice.  It may take some time, but it is worth it.

Once you have a decent idea of who you will become, it makes everything else fall right into place.  Every decision that you make will be framed by this picture that you have created.  You can ask yourself, if I choose this over that will it move me closer to the image of my future self or farther away.  Take a very simple choice of what to eat.  Would super sizing my biggie fries move me closer to my future self or a healthier alternative?  Would hitting the snooze button on the alarm or hitting the gym move me closer to my future self?  Would scrolling through my social media feed for an hour or picking up that book you have been meaning to read, help move me toward who I will become?

Going through these little thoughts have redirected my life in ways that I will never know, but I can tell you that I haven’t eaten anything from a drive through window in over twenty years.  I find myself parking farther away from the door of the store rather than closer.  We got rid of cable TV way before streaming and cord cutting became cool (about 25 years ago).  I started reading books about the same time when before I had never picked up a book since the required reading in high school (for what it is worth, I read between 50 to 60 books a year now.)

I am not telling you this to brag or to hold up my life as some kind of example, because it is far from perfect.  But I must confess that where I am now is more satisfying than where I visualized I would be twenty years ago.  It didn’t happen by mistake but by a series of decisions that moved me closer to who I wanted to become.

I believe you are worth the time to figure out who you want to be and you are powerful enough to make it happen.  You may have had people in your past who have tried to tell you who you are in unflattering terms:  lazy, overweight, not that bright.  You don’t have to believe them, and they have no power over who you will become.  Your present circumstances in no way define who you are.  This is more than positive thinking or affirmations.  This is creating a series of decisions that will cut off paths that will bring you no closer to who you will be and help you march confidently down the paths that will.

I will leave you with a quote from the book/movie The Help:  “You is kind.  You is smart.  You is important.”  I will confess that I cried when I first read that.  The domestic help was speaking these words of empowerment into the mind of the sweet girl who she was responsible for raising.  You are an adult, and you have the power every single day to choose and consequently shape the person you were destined to be.  I truly believe that and I hope in some small way I have encouraged you to believe it too.

Stay the course

Being a successful investor means having a strategy, sticking to that strategy, and resisting the urge to make emotional decisions about the outcome of that strategy.  The primary reason I bring this up, is that I often hear from people just beginning their investing life express reservations and trepidation about continuing to invest in their retirement plan while the markets are turbulent.

I can’t tell you the number of times that I have talked with a person who explained, matter of factly, that of course they stopped contributing to their retirement plan at work because the market has dropped.  They state this without remorse that this action seems so obvious it needs no explanation.  I can take any matter of courses with this conversation.  I can talk about how the market is “on sale” and it is the only thing that people shy away from when it goes on sale.  I can talk about a long-term time horizon and that retirement is a destination that may be more than 30 years away.  Or, I can talk about following a disciplined strategy as the key to increasing the odds of a successful outcome.

What we are experiencing right now, with the market volatility is a normal part of the economic cycle and can no more be avoided than the cold and snow that comes during a Northern Michigan winter.  To expect the summer weather we are currently enjoying to sustain through the winter months would be absurd.  Likewise, to expect the market to only move upward, without any setbacks is also absurd.  It doesn’t mean that you can’t enjoy the winter, you just dress differently.

Think of the current bear market as a financial winter.  For what it is worth, a bear market is defined as a decline in price of at least 20%.  They happen with a frequency of about every five or six years.  So, if you are new to investing, perhaps this is your first one.  That’s great.  Let’s learn from it while the consequences are not as detrimental.  This is the eighth one of my professional career.  That’s how old I am.  It doesn’t make watching account values go down any easier, but my experience tells me that each of the seven previous ones all fully recovered and went on to set new highs.  This time will be no different.

It is during such times as these when wealth can be created.  We are given these opportunities once every five to six years and a disciplined investor can take advantage of them by sticking with their strategy and continue to plow money in at a reduced cost.  I am reminded of one of the worst bear markets of my career, the Great Recession of 2008 and 09.  You may not have been an investor at that time, but I bet you can remember the scary conversations about money at the dinner table.  During the midst of the market freefall, one of the world’s most successful investors, Warren Buffett, wrote an op-ed in the New York Times or Wall Street Journal titled, “Buy American, I Am” or something to that effect.  He claimed to not know if we were close to the bottom, or when things would recover, but he is finding the valuations of some of the world’s most profitable companies at prices that he could have only dreamed of before.

Reading this article, penned by this great investor gave me a certain insight and level of confidence that was sorely lacking at that time.  The media was fanning the flames of fear, as only they can.  There was NO positive news anywhere, and I am not exaggerating… nothing.  And in the midst of this very dark period, off in the distance, this flickering light of hope became for me a beacon on which to fix my gaze.  I believe the very next day, I took his advice and bought some of the companies that I had always wanted to own.  I still own them.

The current malaise which we are enduring is no picnic.  But it is temporary and by the time you roll around to your retirement this will not even be a distant memory.  So much so that, like me, I need to be reminded by books and charts of the things that worried me so much 30 years ago.  I have no independent memory of them.  When I see them on a long-term chart, they are embarrassingly insignificant.

It is only time and experience that can give proper perspective.  But if you need a pep talk, feel free to give me a call.  In the meantime, stick with your strategy, continue to invest while things are on sale, and keep your eyes on the long-term goal thirty years into your future instead of 30 days.  It will make all the difference.

It’s Not As Bad As You Think

I subscribe to the Wall Street Journal and have been a reader of the paper since my senior year in college, when I was given a discounted student subscription.  I have never read it for insights into particular stock investments or investment ideas, but more for a pulse on business and the markets in general.  I also enjoy many of the views on the opinion page and resulting comments from readers in addition to their cultural section.  The weekend journal is also very robust and has an entire section on books, which I enjoy.  Often Joan and I will work on the weekend crossword together if she doesn’t go rogue and complete it herself.

All that to say, I read an article this week that caught my eye.  It was titled “Households Began 2022 in Stronger Financial Shape.”  Curious.  Stronger than what? I thought.  As it turns out, stronger than ever (at least since they have been polling and keeping track, which was 2013).  This is welcomed news and yet it did not make the front cover.  I would be willing to bet that you, dear reader, had no idea this was the case.  I had a sense the consumer is healthy.  I listen to analysts and strategists that tell me such things, but this article included a graph charting the relative health of the consumer since 2013.

According to the Federal Reserve, the percentage of adults who said that they were doing either OK or living comfortably was up to 78% as of the end of last year.  The highest on record (which is about 30% higher than they were in 2013).  This is not only good news for the families who saw the increase in OK’ness but for our current economic environment in which we find ourselves.  In my humble opinion, this news should be shouted from the mountaintops and spread far and wide.  Thus, the point of this blog.

Those of you who know me well, would likely regard me as a glass half full kind of guy.  I think I am as well, and in fact I try to see the good in any situation.  After eight straight weeks of declines in the Dow, a fella needs anything positive on which to cling.  Not only is this not the news of the day, and it should be, the exact opposite story is being broadcast over the airwaves all across the fruited plains.

Just five minutes of national news would be enough to scare the average person into believing that the next recession is imminent.  This is not just the financial news but on other programming as well.  We are bombarded with stories of fear, recession, fuel shortages, wage and price controls, historic inflation, food shortages etc.  You would think that it is 1974 or something.  It is crazy to me and also maddening.

So far, the consumer remains healthy and is undeterred by the negative news.  But my fear is that this story will become a self-fulfilling prophesy.  People start to believe the news and out of fear change their behavior.  In my mind it is a race against time, to see if the economy rebounds and the wheels gain traction to propel us forward before we begin to believe the bad news and tighten the belt leading us to our next recession.

Believe me when I tell you that I have one eye focused on the glass being half full and the other eye fixed on the horizon for the first signs of a major slowdown.  Recessions are not avoidable, and they are a necessary part of the economic cycle.  Just like the snow and cold of winter in Traverse City are unavoidable and part of the blessed cycle of our four seasons.  From my vantage the next recession is not likely this year, but I will continue to watch for any signs that my view could be wrong.

So, in the meantime, take comfort in the fact that more families are comfortable and doing ok than they were ten years ago.  It is not as bad as they are trying to make you believe.  When you get caught up in the negative loop of thinking, please reach out to me and I will give you the proper perspective.


*Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is not guarantee of future results. All indices are unmanaged and may not be invested into directly. 

Caveat Emptor for Higher Education

Caveat emptor is one of only a few Latin phrases that I know, and you probably know it too.  From time to time I throw a Latin phrase out there just so that people know that I am smart.  The direct translation for caveat emptor is – let the buyer beware.  It is often used when considering buying something that is used and sold “as is.”  If you are buying a used car with 300,000 miles on it, caveat emptor is very appropriate (I almost used the word “apropos,” but I feared that it would look like I am showing off).

I believe caveat emptor should be used for a pursuit of a degree from a university or college.  It seems that I am not alone in this thinking.  Ten states have recently begun creating databases that would be publicly accessible as high school students and their families consider, perhaps one of the biggest decisions they will make together.  Sadly, Michigan is not one of the ten states.  How can the buyer beware if the buyer has no information from which to evaluate their options?

My opinion is that these institutions of higher education have no desire to help consumers prudently consider their options; they are money hungry institutions that are partially responsible for the burden of debt under which their graduates lumber.  The average undergrad packs their car after commencement with over $38,000 in debt.  Student loans are the fastest growing segment in lending and cumulatively, they exceed one and a half trillion dollars.  Meanwhile, the U.S government gets our young people hooked on debt and they charge between 200 to 300 % higher interest rates than the 10-year Treasury.  They are treating our young people as profit centers and it is obscene and wrong.

You may be thinking that no one is making them take out these loans, they are doing it voluntarily.  Yes and no.  As an example, my son (while in college) received an email from a government lender suggesting that if he needs money, simply click on the link and he would be pre-approved for thousands of dollars of cash.  It is not paid to the university, it would have been direct deposited into his account.  He could buy groceries, books, new skis, airplane tickets, or tuition with this money.  Fortunately, we have raised our children to be skeptical of these offers and to fear debt.  How many poor unsuspecting young people take the bait and get hooked on debt?  Millions, in a word.

So I go back to my original point of letting the buyer beware.  The student and prospective student should have access to data from which they can make a sound decision about their future.  The data that is on these websites in other states includes important information such as:  first year average salary, average salary after five and ten years, average debt per major, jobs in the highest demand in the state and much more.  Some states have even included the same type of information relating to trade schools, vocational schools, and military-first enlistments.

We are living in the so-called “information age” and it seems, more than suspicious to me that this information has not already been collated for students and families facing these enormous and consequential decisions.  There is no shortage of data.  I applaud those states which have started this process.  One of the most recent additions has been the Florida “student right to know” bill that was put into effect last year.  As of this writing it only refers to the 12 state universities, but other states are including private universities as well.

I have met and counseled plenty of young people who are trapped under the gargantuan levels of debt they carry.  One had a law degree, was practicing law, eking out a modest salary under a debt load that was not sustainable to their current earnings, unless of course they chose not to eat or live in an apartment.  Anecdotally, I recently came across a story of a PhD graduate that had an obscure degree with a half a million dollars of debt who could not find a job in their discipline and was working at Wendy’s.  I don’t know if having information before accumulating that much debt would have prevented the problem, but I have to believe it may have helped.

I have met and counseled people who had so much despair over their vast number of loans. They had no possible way to pay them off before they were well into their 50’s.  Each semester they were provided another round of funding that was so nebulous and in the future, that there seemed to never be a consequence to the borrowing.  I am sure they imagined themselves gainfully employed making tons of cash and magically all of these debts would be paid off.

There are consequences to this bubble of debt and burden being placed on our young people and it will likely have lifetime repercussions for many of them.  Some of you may be thinking about how kind and generous it would be for the government to forgive all of that debt and wipe it away.  Believe it or not, there are serious adults in Washington who are pushing for that outcome.  This is also grossly unfair to those who worked their way through or have borrowed reasonable amounts and have since paid them off.  Any parent of a toddler can tell you that when you reward a behavior, you get more of it.  The lesson will be, when I create a problem, someone else will take care of it.  Rubbish.  If we want a generation of dependent citizens, this would be a very good start.  On the other hand, I would have no problem with the government providing loan forgiveness plans in exchange for some sort of public service until the loan is paid off.

I believe the best way to solve a problem is to prevent it in the first place.  Having adequate information for high schoolers and their families would be the best way to start preventing the problem before it begins.  In addition, changing the messaging about higher education as the answer for everyone would be another place.  I have encouraged many young people to pursue the trades.  When you look at that data, it is profoundly compelling.  When their high school classmates are graduating college with forty grand of debt, these trades people will have already been working in their field under full benefits making above average salaries and arrived there debt free.  Push that date forward ten years in the future and they will have a six-figure retirement account and a career path laid out before them. Fast forward another 20 years and they will be eligible for retirement in their fifties.  I know this to be true because I witnessed it firsthand and have enjoyed dozens of them as clients retiring early.

So caveat emptor indeed.  But they can only beware when they have adequate information upon which to evaluate their options.  Let’s turn this information age towards the millions of students who are considering and trying to figure out their future.

Inflation, the Silent Destroyer of Wealth

I am sure by now you have become more aware of a relatively new term in our lexicon… inflation.  I am being facetious, but as long as you can remember inflation has been a non-issue.  It has been benign and unimportant.  For the last twenty years or so, inflation has ranged between one and two percent, barely noticeable.  In fact you are probably more aware of deflation (or price declines) as the prices of most technological items have decreased over your lifetime.

This is the part where I go into “old man” character and say, “Back in my day…”  Well, back in my day inflation became so high and prices increased so quickly that it was hard for the average family to keep up.  Imagine a time when prices increased over ten percent per year.  It was crazy and caused people to fall desperately behind.  They were forced to prioritize which bills they were going to pay, because they couldn’t pay them all.  You see, incomes stayed about the same and prices went up.

The latest figures on inflation are still well below that ten percent mark, but they are closer to ten than they are to zero, so it gets your attention.  At first, everything seems manageable.  Price increases are easily absorbed with our current income.  We begin to rationalize that this too will pass.  Perhaps it will.  The Federal Reserve Chairman, Jerome Powell, assures us that inflation is transitory, brought on by the double whammy of a global pandemic and supply chain issues.  He would urge you not to pay attention to the rising prices as they will soon come down.  My own personal view is that inflation will be more permanent than he is prepared to admit.  Maybe it won’t stay at 7% but it will likely settle in closer to 3-4% or more than double what it has been for the last twenty years.  Don’t despair.  This is roughly equivalent to the historical average of inflation over the last seventy years.

I am not so convinced that inflation is transitory, and as a planner and a realist, I have to consider the fact that he may be wrong.  What if he is?  What if inflation goes higher and stays elevated for some time?  Great question.  It is better to be prepared and have a plan than to get blindsided caught unawares.

Let’s look at simple math.  If you read my book (and I hope you have) you know that one of the lines that is oft repeated is “math wins.”  Numbers don’t lie.  You can’t spend more than you make (unless you are the federal government and then you can print money).  Eventually the borrowing to meet your expensive taste catches up and with the interest rates increasing on the loans you simply can’t manage the cash flow.  This is why people lose their homes, cars, boats and other various possessions.

Let’s assume that you are earning a hefty 1% on your savings (you are not, as it is more likely .05%) to keep the math simple.  Even though inflation as of this writing is just under 8%, let’s just say it is 7%.  If you are earning 1 and the price of everything that you need is going up at 7, you don’t need a PhD in mathematics to know that you are not keeping up.  You are losing 6% purchasing power every year.  At that rate the cost of living will double in 12 years.  It’s just math, and it is unforgiving.  I call this financial planning in reverse.  In this example, I have underestimated the current inflation rate and overestimated the earning power on your savings, so in reality the cost of living would double in less than 12 years.

If you are young, you have the ability to increase your earning power by additional training and advancement in your career.  If you plan on not doing that and coasting on what it is you are doing, you will soon be buried by the previous illustration.  Stay relevant in your career.  Look for opportunities to improve and increase your skill set.  It is critical.

If you are already retired and living on a fixed income, now that’s an entirely different story.  This is tragic and here the math is merciless.  The pension, social security in interest income that you were used to may have been reasonable at the beginning of retirement, but you will have no way to keep up with the cost of living doubling every 12 years.  I remember vividly meeting with a man in his nineties when I was just a fresh face and new at all of this.  His house was paid for so he had no rent or mortgage payment, but he could not meet the rising health care expenses and pay for food.  He told me, with great disappointment, “I had no idea that I was going to live this long.”  I can tell you for a fact, that made an impression on this guy.  I will never forget it.

As a younger person, you have a couple of ways in which you can confront the math on this equation.  As I mentioned, you can increase your earning power by adding skills and consequently value to your employer and therefore get raises that are at least as valuable as the rate of inflation.  The other factor that is on your side is time.  You can invest in longer term investments which have historically outpaced inflation.  If you can average 8-10% on your long-term investments and inflation is increasing at 6% you can stay ahead of it and still see some growth.

The reason for this blog is to introduce you to a term and more importantly a risk factor to which you may not have otherwise been paying attention.  Keep your head up, pay attention, and make sure that you are not blindsided by this silent destroyer of wealth.  You can do it.

Discipline Equals Freedom

I came across the quote by former Navy Seal, Jocko Willink, and it was one of those quotes I had to repeat multiple times before I could figure it out.  Often times you see or hear words crammed together in a sort of word stew, with no real meaning.  I believe we are conditioned to just that sort of nonsense which is why “discipline equals freedom” caused me to pause. Willink wrote a book with the same title and being a book reader, I will likely add it to my list.

At first blush discipline and freedom live on opposites sides of a continuum. We would rarely put them together.  However, upon further reflection they go together like a hand and glove.

We all want freedom.  We want freedom to do what we want when we want, for however long we want.  In my role as a financial advisor, I have discovered that people crave financial freedom.  Most often when I ask the question of a working client or prospective client, “What is it about retirement that is so appealing?” the answer comes back in some sort of nuanced language around financially being free to do what they want.  The idea of not being accountable to anyone, creating and controlling their own schedule follows right behind.

Of course, you know that I believe financial freedom is a worthy goal (otherwise, what am I doing here)?  But in order to achieve that freedom you will need to earn it.  This often takes a lifetime to fulfill.  You can’t arrive at your late fifties and begin thinking about retirement.  In fact, if you are smart you start working towards this goal in your twenties.  Full disclosure, Joan and I were so buried with life and raising kids in our twenties that retirement was not even in our top twenty things to focus on.  I can’t tell you how many people I have met who waited until their kids left the house to begin thinking about their own retirement.  They truly believe that this is a noble thing, and maybe it is, who am I to judge.  However, if you have ever listened to the instructions before a flight, you will remember the admonition to put your own oxygen mask on before assisting others.  This notion runs counterintuitively, because it is admirable to help others and put ourselves last, but if you have passed out due to your own lack of oxygen you will be incapable of helping anyone else.

Arriving at retirement prepared for financial freedom requires discipline during the working years.  It is much more fun and rewarding to spend money along the way on lifestyle decisions, vacations, and toys.  This requires no discipline (other than staying current on all of the debt you accrued to achieve this lifestyle).  On the other hand, it requires discipline to make sacrificial contributions to your retirement plan when the cash flow otherwise would provide for happiness in the moment.  It takes discipline to systematically eliminate debt, paying off all creditors, including the bank who holds your mortgage.  Exercising that discipline covers the admission fee for retirement.

I must also share that we often meet with prospective clients who kept their head down, made contributions, paid down debt and they come to us with their retirement account statements and their benefit package from work and wonder if they did enough.  It is impressive the way they remained disciplined and arrived at retirement, dare I say, overprepared. We have to convince them that they are only working because they love their job, work is optional for them.  I confess, that it is on days like these, when we are delivering the good news that I am the happiest in my profession.  They are financially free, and it wasn’t just handed to them, or something they earned by hitting a certain age and feel they deserve to retire.  Sorry, but if you didn’t put in the work, you can’t enjoy the freedom.

So, in fact discipline does equal freedom.  The earlier we start with that discipline the easier the lift.  This is one of the reasons writing my book was so important.  I am passionate about helping young people discover their own path to figuring out their financial future.  I am encouraged by the vast number of them who are on the right track, and I am confident that it will make all the difference for them.

Embrace the Hygge

It is late December and I just planted all of the snowplow stakes along the driveway.  I am happy that I did it on a day before it was necessary, and the ground was not yet frozen.  To me this marks the beginning of my hibernation period, after all Ursu does mean bear in Latin.  I don’t fully hibernate, but I do move a good deal of my life to the indoors.  The days paddling across North Lake Leelanau with no destination in mind on my SUP are but a memory.  The lake looks cold now.

I actually like this time of year and don’t mind the short days when it seems darkness comes earlier and earlier.  I lean into this time and create a cozy nest where I can read and enjoy a beverage by the fire.  In some of the Nordic countries they create a cozy environment called Hygge.  Don’t ask me to pronounce it but if need a good laugh, you can type it into Google and it will be pronounced for you.  The idea behind the word is that it is important to acknowledge the shortened days, gather friends and family, to tell stories, play games and share meals.

In addition to the warmth from the fire, we typically have about eight candles flickering to create a warm and inviting space.  I am a sucker for candlelight, even if they are not real candles.  There is something about the glow and flickering flame that dances unaware of anyone else in the room.  I can feel the stress of the day evaporating like the dew on an August morning.  For me, it has become important to create this environment as a way to wind down.

I strongly encourage you to make the time to create your own version of Hygge.  Start by planning what you can do around your own apartment or house.  Then practice it a bit by yourself and find comfort in the stillness and your own company.  Once you have an idea, and don’t feel weird, invite some good friends to join you.  Obviously, you are not doing this every night, but try it a couple of times per month.  Our world is so noisy and there are no shortages of distractions to keep our minds busy.  Creating this environment, which should be technology free will be like an island oasis in the stormy seas of our lives.

Oh, and one last thing.  If you are in these northern climates, we can go weeks without any sunshine.  You may want to check with your primary care physician about your Vitamin D levels and if you should supplement your diet with them.  Also ask her if a sunlight therapy lamp may be a good idea too.  I swear by both of these things and have done both for years.  Now, I must go back to my reading.

Fear Is Not Your Friend

If you are distressed by anything external, the pain is not due to the thing itself, but to your estimate of it; and this you have the power to revoke at any moment.” -Marcus Aurelius

Fear is not your friend.  Making decisions in a state of fear will never serve you.”  Brian Ursu

Only one of these quotes is famous, but they both are true.  Fear is a dangerous emotion and leads to poor decision making.  There is nothing wrong with being scared of one thing or another but allowing that concern to dictate your actions or reactions is wrong.  Wringing your hands and trembling in fear will not help you properly assess the perceived threat.

Too often I have witnessed investors make devastating decisions based on their perceived threat.  This could be the result of an election (the last two come to mind) yet the market marches higher despite the frenzy they have worked themselves up in.  Another “external” that causes bad behavior is the passage of this or that piece of legislation.  Granting greater importance to the outcomes of these externals will undermine even the best investment strategy.

I am not, by any means, suggesting that you plant your head firmly in the sand and not pay attention to the externals, but measure your response to them and use your power to revoke them.  Logic and understanding is the antidote to fear.  Consider this quote by noted scientist Marie Curie.  “Nothing in life is to be feared, it is only to be understood. Now is the time to understand more, so that we may fear less.”  With limited understanding the threat grows beyond its limits and causes us to fear disproportionately.

Consider the Japanese proverb, “Fear is only as deep as the mind allows.”  We are the ones who nurture our fears and not only welcome them into our psyche but nurture them until they grow stronger than our own resistance.  By fixating on that which we fear we give it lifeforce that is undeserving and allow our minds to turn into something that is paralyzing.  To suggest that we just use willpower to defeat our fears is probably not practical or healthy, but the more you conquer your fears, the easier the next one will be to defeat.

I often encourage people who are gripped by fear to play out their fear in real time.  For example, if this person wins the election what happens then?  The market will crash.  Why will the market crash?  Because this is the worst person in the world.  Have we had other atrocious presidents elected before?  Of course.  And what has happened as a result?  The market is much higher now then it was back then.  Businesses continued to improve, hired new people, brought new technologies to being, grew their earnings and increased their value.  This has happened during good presidents and the not so good.

Catastrophic thinking is running rampant right now.   Take any issue and those who represent either side of that issue will try to get you to believe that the other side will bring the end of civilization for us all.  I don’t care what the issue, the truth lies somewhere between the two extremes and is not as devastating as we are being led to believe.  The sun will come up tomorrow, there will be more opportunities for us to grow and help others to grow, and the world will not end.

I have learned that the message “Be Not Afraid” appears 365 times in the bible.  It could be coincidental that 365 happens to be the number of days we have in a year, but to me it is a reminder that fear is not helpful or productive and the repeated message is for our benefit.

Overcoming our fears is key to growth and a successful life.  Think of the quote by Ralph Waldo Emerson, “He who is not everyday conquering some fear has not learned the secret of life.”  I want nothing more than for you to learn the secret of life.  Facing your fears head on and moving forward regardless of them will make all the difference.

Goals: Let’s Get Started

I hope you enjoyed reading the book, Now What?  A Practical Guide to Figuring Out Your Financial Future.  I may be presuming that you had if you are reading this blog, but if not I would encourage you to pick it up and give it a spin (I enjoyed writing it and communicating much of what I know about financial issues).

The one area I would have liked to spend more time with is Goals.  As long as I can remember, I have been a person who sets goals, both personal and professional.  I believe it is a healthy practice unless of course you hope to never grow, advance or improve.  If this is the case, you should probably stop reading and go back to scrolling through your feed on your phone.

If you are still with me, let’s review the prime components of setting goals.  They must be specific.  This means that you need to be clear about what your goal is.  “Eat healthier” is not specific.  What does this mean?  One salad per month?  Less fast food?  Change my diet to one that is sustainable may be closer.  Which brings us to the second point of goal setting.  They must be measurable.  This means that you can quantify your efforts.  “Choose healthy meal options for 80% of my meals” is an example.  Another way to express the measurable component, would be “go down two dress sizes” (I don’t know if that is a thing, but let’s say it is) or “lose two inches around my waist” (I know for certain that is a thing).

I almost forgot.  Part of measurable needs to be a timeframe.  The shorter the timeframe the more realistic.  90 days is about perfect for most goals.  Think of it as a sprint, 90 days of doing something is possible.  What I have found is that as soon as I start to see the results from my effort, I am motivated to continue.  The same will be true for you.

So, goals need to be specific and measurable.  Next, they need to be achievable, which means that it is within your control of attaining.  For me, winning the 100 meter freestyle Olympic Gold Medal is not in the realm of attainable and I would only be setting myself up for failure.  I don’t like setting myself up for failure.  I was told that reasonable goals are ones that you may have an 80% probability of hitting.  If you make it too easy, its not meaningful enough for you to put any effort towards.  Spoiler alert:  I have failed at more goals than I have succeeded at over my life, but I have hit far more than if I set zero.

Finally, your goal should be compatible.  This means that your goal must fit naturally with who you are.  It should be a reflection of who you are and more importantly who you see yourself as in the future.  If you have not heard the message that I was raised on, “you can be anything you want to be, your only limits are your own,” let me tell you those words are true.

It is important to visualize the person you want to be in order to figure out which goals are the most important.  Be specific in this visualization too.  Who are you with?  What are you doing? What do you feel like after hitting your goal?  This visualization exercise puts you in the future and your actions, motivations and consistent work will bridge the gap between where you are and where you want to be.

I don’t care about your background, the obstacles you may face, or whatever limitations you have already set, you can overcome them.  But you will only overcome them with diligent work, visualization, and proper goal setting.  Without these things, you will likely remain in the comfortable rut in which you currently find yourself.  If you are ok with that, that’s cool too.  It’s just that my worldview is one in which, life is short, and the saddest thing to me is complacency.

Maybe, you have never had anyone to believe in your dreams.  In fact, I have known people who were raised in an environment in which their dreams were belittled and smashed before their very eyes.  Generally speaking, these dream smashers are little people who are very insecure, and perhaps they are motivated by keeping you safe by not trying.  That is a generous view of their motivations, but regardless, you can do it.  I believe in you!

This is not some trite, motivational poster, kind of belief.  It is true.  I believe that you can and should plan on growing, improving and becoming the person that you were always meant to be.  Setting goals and breaking out of the rut, are the surest ways I know how to make that change.  If you don’t have people in your life to support your goals, reach out to me, and I will be your cheerleader.  I believe in you and hope for nothing but the best for you.

Do something great.