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Network: By Ross Levin | Accredited Investors
Everywhere I turn today, people are expressing concern about world affairs. Elections always create uncertainty, but combined with terrorism, changes in climate and a host of other issues, things are feeling out of control. And they are. But guess what — things are always out of control.
In the book “The Wisdom of Insecurity,” Alan W. Watts, writing in 1951, says: “The only way to make sense out of change is to plunge into it, move with it and join the dance.”
We can wish for the world to stand still, but the earth rotates and our lives spin with it. So rather than trying to ensure security, maybe we should immerse ourselves in change.
Some clients come in with regularly updated, detailed balance sheets. When the numbers drop, they feel bad. When they rise, they feel good. While their financial security did not change, their perception of it did. When we run retirement-planning models for clients we use thousands of iterations, some drawing on markets that none of us has experienced and use a spending rate that can survive these gyrations. Yet when clients feel poor, they tend to spend less — regardless of the permission the models give them.
Unless you are investing in silly things or doing a lot of borrowing, why fall victim to the market movements? If you have your short-term needs (three or less years) in cash, then there is no need to feel insecure. When you watch waves roll into shore you don’t worry about drowning, so why allow market movements to make you feel broke?
Watts writes: “The desire for security and the feeling of insecurity are the same thing.”Thinking that reaching a number will make you secure is a false pretense. Since markets move, your assets will always be bouncing around. Becoming comfortable with your ability to embrace change paradoxically creates emotional stability. You aren’t locked onto an impression of how the future needs to reward you.
People who are intentional with their spending feel more secure. They consider what they are spending and why they want to spend. They are realistic that most items don’t create long-term pleasure, but also can distinguish those things or experiences they will truly value. A friend says that he often sees something that he wants, waits a couple of days, and realizes he wants it no longer.
Examine your own story to see what’s real. You may not like a candidate, but it’s unlikely that everything falls apart after an election. Rather than worry, plunge into it and dance.
Spend your life wisely.