Why is a poor man like a dead man? He does not make a ‘living’ (chiyut) on his own, while the living sustain themselves and do not require the help of others. Since a poor man does not sustain himself, he is not considered among the living
Gur Arye, Ex. 4:19
Proverbs 15:27 states, “he who dislikes gifts shall live” meaning that he who disdains living off others has his own living (chiyut).
No wonder we hate being beholden (obligated, dependent, indebted) and value self sufficiency (enough – FU**ability©) and admire those who are independent, not bound, and those who have pulled themselves up by the bootstraps. Yet, while we value rugged individualism, being social beings and not being self sufficient necessitates a division of labor and mutual need.
Cutting the mustard = to do what is needed, live up to expectations
Not being ‘beholden’ conflicts with the need of others but can be ameliorated by payment and or contribution (cutting the mustard).
However, when one can no longer cut the mustard, even if he or she has accumulated sufficient resources to make payment for premium ingredient Grey Poupon, there is still that feeling of being ‘the poor man’ (using French’s) and not living.
As a personal financial life planner, I have seen over and over again those who are not financially beholden, sacrifice their ‘living” for fear that they no longer can Cut The Mustard (despite having 50 years of Grey Poupon accumulated)! Worse, some of these individuals will deplete the shelves of their Grey Poupon (sacrificing ‘enough’ even FU**ability©) supposedly in the name of contribution or even ‘needing more.’ Why? Not being able to ‘cut the mustard’ now means to be poor, dying and or dead.
So as not to be dead, beholden, poor – we put at risk & jeopardy enough & FU**ability© – all for the want of a condiment. (1)
(1) Guirjeff’s Law of 7: That which we intend becomes it’s exact opposite in time.
Sunday, August 29, 2010
Wednesday, August 25, 2010
Schwartzing #1 Insurance & Res. Real Estate (Your Home) Is Not An Investment
SCHWARTZING #1
(Schwartzing is basically - "I don't have time for nonsense. He's my thoughts & opinion (usually it is to a person who isn't looking for an information or opinion though they say otherwise - but ratification only or having someone to blame if their own choice doesn't work out) -
INSURANCE = substituting a small loss (premium) to avoid a large loss -IT IS NOT AN INVESTMENT - INSURANCE IS A TRANSFERENCE OF RISK - PERIOD.
RESIDENTIAL REAL ESTATE = SHELTER NOT AN INVESTMENT
ATTEMPTS TO REFRAME INSURANCE AND RESIDENTIAL REAL ESTATE INTO INVESTMENTS ARE SELF SERVING BSers - AND LOOK AT THE RESULTS:
1) FINANCIAL MELTDOWN CRISIS INSTIGATED BY NO MONEY OR LOW MONEY DOWN AND BS QUALIFICATIONS
2) INSURERS DIFFICULTIES IN THE LATE '80'S AND 90'S - AND SO CALLED VANISHING PREMIUM POLICIES 'REINCARNATING'
BOTH (INSURANCE & RESIDENTIAL REAL ESTATE) GOT F**KED UP AND LOST THEIR WAY (OBJECTIVE) WHEN THEY WERE SPUN, SUBSIDIZED INTO ATTEMPTS TO MAKE THEM INVESTMENTS
AND THAT' A SCHWARTZING - go wash you hands
(Schwartzing is basically - "I don't have time for nonsense. He's my thoughts & opinion (usually it is to a person who isn't looking for an information or opinion though they say otherwise - but ratification only or having someone to blame if their own choice doesn't work out) -
INSURANCE = substituting a small loss (premium) to avoid a large loss -IT IS NOT AN INVESTMENT - INSURANCE IS A TRANSFERENCE OF RISK - PERIOD.
RESIDENTIAL REAL ESTATE = SHELTER NOT AN INVESTMENT
ATTEMPTS TO REFRAME INSURANCE AND RESIDENTIAL REAL ESTATE INTO INVESTMENTS ARE SELF SERVING BSers - AND LOOK AT THE RESULTS:
1) FINANCIAL MELTDOWN CRISIS INSTIGATED BY NO MONEY OR LOW MONEY DOWN AND BS QUALIFICATIONS
2) INSURERS DIFFICULTIES IN THE LATE '80'S AND 90'S - AND SO CALLED VANISHING PREMIUM POLICIES 'REINCARNATING'
BOTH (INSURANCE & RESIDENTIAL REAL ESTATE) GOT F**KED UP AND LOST THEIR WAY (OBJECTIVE) WHEN THEY WERE SPUN, SUBSIDIZED INTO ATTEMPTS TO MAKE THEM INVESTMENTS
AND THAT' A SCHWARTZING - go wash you hands
Thursday, August 19, 2010
Up OR Down (More): Up AND Down (Enough) + A Torah Goes To The Movies 'UP'
Up OR Down (More): Up AND Down (Enough)
Did it (the stock, the bond, etc) go Up OR Down?’ is the game of More. In contrast, Enough is concerned with Up AND Down relative to the goal.
· More is outside in relative to an external scoreboard; Enough is inside out – internally comparative.
· More is concerned with the Dow Jones whereas Enough is interested relative to progress toward or maintenance of a goal.
· More is ‘more, better, now’ which usually becomes ‘less, worse, and later’
· More is never ending as there is never Enough.
Societial external validation of worthiness, compounds the anxiety inducing Ups OR Downs of More. Then add for good measure the fear of not having Enough, and More becomes a hardwired almost instinctual autopilot. The More Up or Down result: - upsy daisy - upended.
And that’s the MOREal (‘upshot’) of the story – ‘enough’ to make one Up-chuck.
Up OR Down = More (Moreon Behavior)
Up AND Down = is achieving Enough – regardless.
And now an Encore Presentation of an UPPER (Fixer UPPER)
Up – Paradise Falls – Lost and Found: A Torah Goes To the Moves
By Uptrodden (1)
All lost; whole find
e.e. cummings
Up is two stories.
First there is the montage of the love between Carl and Ellie (from childhood where she attaches a grape soda bottle cap to his jacket signifying each other’s club membership) through the crushing weight Ellie’s passing with now 78 year old Carl being left behind to being crotchety and a curmudgeon in the Walter Matthau sense)
Set by Ellie predeceasing Carl, the second story, has Carl, now the homebody, pursuing his & Ellie’s lifelong dream of their youth: an adventure to South America’s “Paradise Falls” following the footsteps of famed explorer Charles Muntz.
In a last-ditch effort to save himself from becoming an inmate in a nursing home, homebody Carl harnesses thousands of helium balloons to his ‘abode,’ uprooting and literally takes flight to Paradise Falls (grape bottle cap still adorning his lapel)..
An underlying theme in Judaism (and Original Incompletion) is the cyclical circular process of down (descend) to go up (ascend) and up to go down. This process of our soul’s curriculum perfects oneself (Tikkun Atzmi) via developing one’s portion (chalik) thus completing one’s incompletions and meriting Teshuvah (return) to the world to come. (the hidden that awaits – temporally?). The metaphors for this up down, down up – comeuppance/uplifting – is often masked in tests (nes), choices, and dialectic tension masked symbolically between:
· clean/unclean,
· blocked,/unblocked (uprooting/uprighting),
· chamatz (‘uppity’ arrogance – puffed up /unleavened acknowledgment) and humility (balloon bursting - upchuck)
· light/darkness (down) – upsy daisy
(It should be noted that in ‘the perceived down’ can be an upshot revealing the concealed light if reframed properly – it’s a prism/prison refracting .)
There are three basic interpretations of the circular cyclical process:
· Down To Go Up -(descend) to (ascend) – (exile to redemption/deliverance) like the material (down) and spiritual (up) engaging in a process of dance spiritualizing the material, materializing the spiritual
· Uprising- ascension for descension. Man elevates first (ascend – up) for the spiritual to descend (come down) per the Tanya.
· Engagement – the material and the spiritual like the paraffin and the light of the candle INcounter (not old T groups) for illumination in a dialectic
May you have the strength to struggle with your dreams and when you fail, may you always fail forward
A Jewish Blessing (somewhat modified)
Carl, now with walker – an elevator on his stair, falls – forward ‘up’ward. Though his house is in good repair (Tikkun Bayit), the house has become his Egypt – comfortable though resigned memories and the adventure of his & Ellie’s youth unfinished. Rather than be taken to the nursing home, with the house affixed with the hundreds/thousands of helium filled balloons, Carl begins his Exodus from his Egypt (limitations) repairing himself (Tikkun Atzmi).
Carl’s mission: to finally fulfill the desired journey of his & Ellie’s childhood to “Paradise Falls” – ‘the promised adventureland.’
On this journey, Carl is accidentally accompanied by Russell, the Wildlife Adventure scout, who has a pursuit as well: his final ‘merit’ badge and recognition by his dad.
The pursuit for “Paradise Falls” reverses Carl’s Paradise Lost (Ellie) reigniting his candle. This quest also yields (hod) a kinship between Carl and Russell in part filling the hole in each other’s soul. (Carl’s caused by the loss of Ellie, and Russell’s levado (2) from absentee parents which no amount of merit badges fulfill). Carl and Russell, through their adventure, repairing a part of each other’s world – Tikkun Olam – inside out ).
The voyage to “Paradise Falls” is para-dicey with tests (nes – in Hebrew also means miracle) in Carl’s journey ‘upward’ Tikkun Atzmi (repairing perfecting oneself) (3)
Up, down, down Up.
Up, descend, ascend – to Paradise…Falls.
Not outward bound – but inward bound
The process of UpGrade:
Tikkun Atzmi, Tikkun Bayit, Tikkun Olam (inside out) completing one’s soul curriculum assignment.
The film concludes with Russell adorned with the grape soda top awarded by Carl.
And that’s the ‘merited’ badge.
“On ‘word, ’ & Upward – Olam Haba regained & Upheld: Upsy-daisy (4)
(1) Uptrodden has been my aol email name for 20+ years. As a fee only financial planner, I represented ‘the few, the proud, the rich, the former rich – The Uptrodden).
(2) Russell’s levado – the inability to share (symbolically) his merit badges with his dad.
(3) Note: there was no product placement for 7UP in this movie – though Refreshing & ‘the uncola’).
(4) No puns were harmed and all pun labor laws were complied with in the writing of this ‘screen’ play on words – The Punisher.
Did it (the stock, the bond, etc) go Up OR Down?’ is the game of More. In contrast, Enough is concerned with Up AND Down relative to the goal.
· More is outside in relative to an external scoreboard; Enough is inside out – internally comparative.
· More is concerned with the Dow Jones whereas Enough is interested relative to progress toward or maintenance of a goal.
· More is ‘more, better, now’ which usually becomes ‘less, worse, and later’
· More is never ending as there is never Enough.
Societial external validation of worthiness, compounds the anxiety inducing Ups OR Downs of More. Then add for good measure the fear of not having Enough, and More becomes a hardwired almost instinctual autopilot. The More Up or Down result: - upsy daisy - upended.
And that’s the MOREal (‘upshot’) of the story – ‘enough’ to make one Up-chuck.
Up OR Down = More (Moreon Behavior)
Up AND Down = is achieving Enough – regardless.
And now an Encore Presentation of an UPPER (Fixer UPPER)
Up – Paradise Falls – Lost and Found: A Torah Goes To the Moves
By Uptrodden (1)
All lost; whole find
e.e. cummings
Up is two stories.
First there is the montage of the love between Carl and Ellie (from childhood where she attaches a grape soda bottle cap to his jacket signifying each other’s club membership) through the crushing weight Ellie’s passing with now 78 year old Carl being left behind to being crotchety and a curmudgeon in the Walter Matthau sense)
Set by Ellie predeceasing Carl, the second story, has Carl, now the homebody, pursuing his & Ellie’s lifelong dream of their youth: an adventure to South America’s “Paradise Falls” following the footsteps of famed explorer Charles Muntz.
In a last-ditch effort to save himself from becoming an inmate in a nursing home, homebody Carl harnesses thousands of helium balloons to his ‘abode,’ uprooting and literally takes flight to Paradise Falls (grape bottle cap still adorning his lapel)..
An underlying theme in Judaism (and Original Incompletion) is the cyclical circular process of down (descend) to go up (ascend) and up to go down. This process of our soul’s curriculum perfects oneself (Tikkun Atzmi) via developing one’s portion (chalik) thus completing one’s incompletions and meriting Teshuvah (return) to the world to come. (the hidden that awaits – temporally?). The metaphors for this up down, down up – comeuppance/uplifting – is often masked in tests (nes), choices, and dialectic tension masked symbolically between:
· clean/unclean,
· blocked,/unblocked (uprooting/uprighting),
· chamatz (‘uppity’ arrogance – puffed up /unleavened acknowledgment) and humility (balloon bursting - upchuck)
· light/darkness (down) – upsy daisy
(It should be noted that in ‘the perceived down’ can be an upshot revealing the concealed light if reframed properly – it’s a prism/prison refracting .)
There are three basic interpretations of the circular cyclical process:
· Down To Go Up -(descend) to (ascend) – (exile to redemption/deliverance) like the material (down) and spiritual (up) engaging in a process of dance spiritualizing the material, materializing the spiritual
· Uprising- ascension for descension. Man elevates first (ascend – up) for the spiritual to descend (come down) per the Tanya.
· Engagement – the material and the spiritual like the paraffin and the light of the candle INcounter (not old T groups) for illumination in a dialectic
May you have the strength to struggle with your dreams and when you fail, may you always fail forward
A Jewish Blessing (somewhat modified)
Carl, now with walker – an elevator on his stair, falls – forward ‘up’ward. Though his house is in good repair (Tikkun Bayit), the house has become his Egypt – comfortable though resigned memories and the adventure of his & Ellie’s youth unfinished. Rather than be taken to the nursing home, with the house affixed with the hundreds/thousands of helium filled balloons, Carl begins his Exodus from his Egypt (limitations) repairing himself (Tikkun Atzmi).
Carl’s mission: to finally fulfill the desired journey of his & Ellie’s childhood to “Paradise Falls” – ‘the promised adventureland.’
On this journey, Carl is accidentally accompanied by Russell, the Wildlife Adventure scout, who has a pursuit as well: his final ‘merit’ badge and recognition by his dad.
The pursuit for “Paradise Falls” reverses Carl’s Paradise Lost (Ellie) reigniting his candle. This quest also yields (hod) a kinship between Carl and Russell in part filling the hole in each other’s soul. (Carl’s caused by the loss of Ellie, and Russell’s levado (2) from absentee parents which no amount of merit badges fulfill). Carl and Russell, through their adventure, repairing a part of each other’s world – Tikkun Olam – inside out ).
The voyage to “Paradise Falls” is para-dicey with tests (nes – in Hebrew also means miracle) in Carl’s journey ‘upward’ Tikkun Atzmi (repairing perfecting oneself) (3)
Up, down, down Up.
Up, descend, ascend – to Paradise…Falls.
Not outward bound – but inward bound
The process of UpGrade:
Tikkun Atzmi, Tikkun Bayit, Tikkun Olam (inside out) completing one’s soul curriculum assignment.
The film concludes with Russell adorned with the grape soda top awarded by Carl.
And that’s the ‘merited’ badge.
“On ‘word, ’ & Upward – Olam Haba regained & Upheld: Upsy-daisy (4)
(1) Uptrodden has been my aol email name for 20+ years. As a fee only financial planner, I represented ‘the few, the proud, the rich, the former rich – The Uptrodden).
(2) Russell’s levado – the inability to share (symbolically) his merit badges with his dad.
(3) Note: there was no product placement for 7UP in this movie – though Refreshing & ‘the uncola’).
(4) No puns were harmed and all pun labor laws were complied with in the writing of this ‘screen’ play on words – The Punisher.
Wednesday, August 18, 2010
Overview: Setting An ENOUGH Personal Financial Goal
Overview: Setting An ENOUGH Personal Financial Goal
Disclaimers:
This is NOT comprehensive personal financial planning. One of the failures of setting personal financial (life) goals in a vaccuum is that you solve one problem and you create two others - like pulling the stray thread of a sweater off only to find the arm of the sweater unwoven.
Basically personal financial goals are a subset of life planning (which is done first otherwise your goals will tend to be created outside in - relative to indexes, the Joneses etc. instead of inside out. For exercises to integrate life planning (mission and values) get my out of print second edition book ENOUGH on Amazon (probably so cheap the shipping is more expensive)
We will only be dealing with Accumulation/Distribution goals during lifetime NOT Asset Conservation (estate planning), Income Conservation (tax planning) nor Asset Protection (typically insurance) goals as there are additional standards required.
Elements of a Personal Financial Goal
Amount
Start Date/End Date - Duration
Rate of Return After Tax Risk Adjusted
Inflation Rate
Cost
Feedback/Monitor & Frequency of Feedback
Responsibility - Primary, Secondary
Amount
The amount of the objective is determined by doing a spending plan (ok - a budget). Basically, other than taxes, I suggest three categories: fixed monthly (mortgage etc), flexible monthly (food, allowance, etc), and irregular expenditures (insurance premiums etc.). Further, I suggest three columns to correspond to each item - gottas (base level absolute requirement), oughtas (somewhat above the gottas) and niceta (luxury) level. Finally, place a couple of other colums relative to each item to designate how the amount of the item increases or decreases upon: disability, slow down period prior to retirement, retirement, death (the expenditure amount if one or the other passes), and divorce (especially if imminent)
Don't bortz – this exercise is critical to give you more control from the chaos you won't admit to.
Start Date/End Date - Duration
Simply, the beginning and ending date (which constitutes duration of the
goal) is the amount of time. Relative to a retirement goal, it makes you
focus in on the uncomfortable prediction of how long you will live. So,
in the case of the retirement goal, add maybe 5 years after you come up
with your expect age of proceeding/graduating to the World to Come.
Rate of Return After Tax Risk Adjusted
It is not what you make but what you keep after tax, after inflation and risk
adjusted. In subsequent blogs, these elements of the goal will be discussed in detail and in the context of your own personal ‘beta’ of your job.
Inflation Rate
A rose is not a rose is not a rose – and there is no such thing as a one inflation rate for all. The inflation rate on a higher education goal is 200%-300% of overall inflation and long term care costs have been rising at 300%+ (over 9% compound). So each goal is modified by the inflation rate relative to the goal and your stage in your life cycle (no not Kawaskis)
Cost
People love to talk about benefits and if anything just wink at the costs of a goal. A cost is a tradeoff. And unlike the feminists of the 1980’s, you can’t have it all. Cost is the mechanism of price – that illustrates your values. You vote your votes with what you will pay. And cost is not just nominal dollars – but opportunities etc.
Feedback/Monitor & Frequency of Feedback
Despite whiney retorts to the contrary, we generally do what is inspected
not what is expected. In place must be monitor to determine if on course,
and make mid course corrections if necessary. At a minimum, quarterly measuring of the metric(s)- standard(s) is preferable.
Responsibility - Primary, Secondary
This isn’t about pin the tail on the donkey or Democrats – but who has responsibility for achievement of the goal, and each particular step. Designation
is where the buck(s) stops. There is no ‘team’ excuse as this is a cop out
resulting in ‘if everyone is responsible, no one is responsible’ excuse.
There you have it. An overview of the elements of a personal financial life
goal. More specifics relative to each element in upcoming weekly blogs.
Disclaimers:
This is NOT comprehensive personal financial planning. One of the failures of setting personal financial (life) goals in a vaccuum is that you solve one problem and you create two others - like pulling the stray thread of a sweater off only to find the arm of the sweater unwoven.
Basically personal financial goals are a subset of life planning (which is done first otherwise your goals will tend to be created outside in - relative to indexes, the Joneses etc. instead of inside out. For exercises to integrate life planning (mission and values) get my out of print second edition book ENOUGH on Amazon (probably so cheap the shipping is more expensive)
We will only be dealing with Accumulation/Distribution goals during lifetime NOT Asset Conservation (estate planning), Income Conservation (tax planning) nor Asset Protection (typically insurance) goals as there are additional standards required.
Elements of a Personal Financial Goal
Amount
Start Date/End Date - Duration
Rate of Return After Tax Risk Adjusted
Inflation Rate
Cost
Feedback/Monitor & Frequency of Feedback
Responsibility - Primary, Secondary
Amount
The amount of the objective is determined by doing a spending plan (ok - a budget). Basically, other than taxes, I suggest three categories: fixed monthly (mortgage etc), flexible monthly (food, allowance, etc), and irregular expenditures (insurance premiums etc.). Further, I suggest three columns to correspond to each item - gottas (base level absolute requirement), oughtas (somewhat above the gottas) and niceta (luxury) level. Finally, place a couple of other colums relative to each item to designate how the amount of the item increases or decreases upon: disability, slow down period prior to retirement, retirement, death (the expenditure amount if one or the other passes), and divorce (especially if imminent)
Don't bortz – this exercise is critical to give you more control from the chaos you won't admit to.
Start Date/End Date - Duration
Simply, the beginning and ending date (which constitutes duration of the
goal) is the amount of time. Relative to a retirement goal, it makes you
focus in on the uncomfortable prediction of how long you will live. So,
in the case of the retirement goal, add maybe 5 years after you come up
with your expect age of proceeding/graduating to the World to Come.
Rate of Return After Tax Risk Adjusted
It is not what you make but what you keep after tax, after inflation and risk
adjusted. In subsequent blogs, these elements of the goal will be discussed in detail and in the context of your own personal ‘beta’ of your job.
Inflation Rate
A rose is not a rose is not a rose – and there is no such thing as a one inflation rate for all. The inflation rate on a higher education goal is 200%-300% of overall inflation and long term care costs have been rising at 300%+ (over 9% compound). So each goal is modified by the inflation rate relative to the goal and your stage in your life cycle (no not Kawaskis)
Cost
People love to talk about benefits and if anything just wink at the costs of a goal. A cost is a tradeoff. And unlike the feminists of the 1980’s, you can’t have it all. Cost is the mechanism of price – that illustrates your values. You vote your votes with what you will pay. And cost is not just nominal dollars – but opportunities etc.
Feedback/Monitor & Frequency of Feedback
Despite whiney retorts to the contrary, we generally do what is inspected
not what is expected. In place must be monitor to determine if on course,
and make mid course corrections if necessary. At a minimum, quarterly measuring of the metric(s)- standard(s) is preferable.
Responsibility - Primary, Secondary
This isn’t about pin the tail on the donkey or Democrats – but who has responsibility for achievement of the goal, and each particular step. Designation
is where the buck(s) stops. There is no ‘team’ excuse as this is a cop out
resulting in ‘if everyone is responsible, no one is responsible’ excuse.
There you have it. An overview of the elements of a personal financial life
goal. More specifics relative to each element in upcoming weekly blogs.
Sunday, August 8, 2010
PART IV: WHAT IS YOUR ENOUGH?
Buying Instead of Being Sold
The heuristic of More Investing is one of rationalization after being sold instead of buying. Think of a funnel on its side sequentially narrowing from left to right illustrating more. The MOREon personal financial planner begins with products, stocks, bonds, saving accounts and the like. Next as the funnel narrows, the planner devises strategies for using those products. (More acquisitions are often impulsive and unfocused because the personal financial planner is pre occupied with the pitch of “make more save more/ which one what kind”- rather than achieving your objectives. Since most personal financial planners are still compensated largely or solely through commissions or assets (way under) management (a soft commission if there ever was one), it is to their financial advantage to actively churn the portfolio (transaction based commissions) or seek more aggressive than necessary investment managers to make more (assets under management compensation). Finally, the funnel narrows to where the planner gives rationalizations for the products and strategies that he or she has chosen for you.
This is tuchass backwards.
With the retro fitting ENOUGH planning, we begin the funnel with your objectives and move through a logical process to align personal resources with those goals. Next comes the strategies, strategies determine the choice of investment vehicles. For each investment considered in the ENOUGH model, we determine the rate of return, after tax, after inflation, risk adjusted. Finally, the funnel is tapered and tightened down to buying is planned and focused. The advantage is that you are no longer cajoled, sold, manipulated or steered; you are in control of our financial planning decisions. Conclusion: the ENOUGH personal financial planning process is almost perfectly reversed relative to the more MOREon model.
What is Your Enough?
He who knows he has enough is rich.
Tao Te Ching
Enough is a deeply personal concept. One man’s floor may well be another man’s ceiling. Nor is enough measured only in dollars and cents. Wealth is also measured as your ability to adjust to circumstances (adaptability and resourcefulness). If one is ‘adaptable and resourceful’ then regardless of currency changes, then he can procure ‘enough.’ Alan Durning asks the provocative question, ‘When does having more cease to add appreciably to human satisfaction? . . . For each of us in the world’s consuming class, asking is essential. Unless we see that more is not always better, our decline will be overwhelmed by our appetites.’
Since most of us are frenetically chasing more, and unable to grasp it, how do we know when we have enough? As Don Robinson said, ‘The weakness of our age is our apparent inability to distinguish our needs from our greeds.’ Because we cannot define enough, we put enough at risk, seeking the financial rainbow and sometimes in the process losing what is truly important to us. We willingly sacrifice, or at least jeopardize, what we truly need to satisfy our greed and what we don’t ‘need.’
So, what is ENOUGH? First of all, ENOUGH is not my attempt to impose my values on my readers as some of the ‘green with envy’ so called enoughers would do. ENOUGH is not a philosophy of restraint or frugality or even fiscal conservatism. In fact, the purpose of my writings hopefully will help you determine what is enough for you, you may well find yourself describing enough as “plenty.” Each person will define enough in his or her own terms and according to personal values. ENOUGH is aligning personal life goals with personal financial resources – enough to live on; enough to live for – towards one’s signification (why I am).
If we already have enough, then why do we want more? Why do we feel so much stress and discontent? Why do so many people survey their lives and proclaim, “I am not satisfied?” To me the answer is obvious - we have not discovered our personal and internal definition of enough. We have not learned the wisdom of Abraham Joshua Heschel that “to have more does not mean to be more.”
Overview of the ENOUGH
He who knows that enough is enough will always have enough.
Lao Tsu
If I am what I have, and if what I have is lost, who then am I?
Erich Fromm
Having just conquered the known world, Alexander the Great went to visit his friend Diogenes. Diogenes was sitting in his open tent, stirring the kettle which contained his lunch. Alexander, speaking from the opening of the tent, said, “Di, guess what? I’ve just conquered the world. Is there anything I can do for you?”
Diogenes continued stirring for a moment, then looked up and said, “could you move to the left? You’re blocking my sun.”
Diogenes, certainly no more on, was able to determine what was enough for him. Alexander, however, reportedly wept when he learned that there were no more worlds to conquer. Again we see that one man’s floor is another’s acoustical tile ceiling (as one former girlfriend complained.) Obviously Alexander had more than his philosopher friend. But who had sufficiency, resourcefulness - adaptability, enough?
True contentment depends not upon what we have; a tub was large enough for Diogenes, but a world was too little for Alexander.
Caleb Colton
Conclusion
I am not suggesting that once you have defined and achieved your personal enough that you stop achieving or aspiring. When your cup is full, you may decide to stop pouring tea, or you may start filling another cup. The point is, you are in control, steering your boat to your objectives. (For those who argue against control with psycho babble invective ‘control freak’ think of the alternative – chaos. Of course there is going with the flow – something dead fish do.) The point is you are managing the planner. You and your resources, may still be manipulated (nudge is the politically correct cover word for manipulation these days) but the probability is less so. For sure you won’t be a victim of ‘fill or kill,’ throw it against the wall see what sticks, or ‘which one, what kind’ financial planning masquerading product or asset under management sales when you have honed down your ‘enough.’
We shall not cease from exploration. And the end of all our exploring will be to arrive where we started and know the place for the first time.
T.S. Eliot, Four Quartets
NEXT: The Series of The Elements of an ENOUGH Objective:
Buying Instead of Being Sold
The heuristic of More Investing is one of rationalization after being sold instead of buying. Think of a funnel on its side sequentially narrowing from left to right illustrating more. The MOREon personal financial planner begins with products, stocks, bonds, saving accounts and the like. Next as the funnel narrows, the planner devises strategies for using those products. (More acquisitions are often impulsive and unfocused because the personal financial planner is pre occupied with the pitch of “make more save more/ which one what kind”- rather than achieving your objectives. Since most personal financial planners are still compensated largely or solely through commissions or assets (way under) management (a soft commission if there ever was one), it is to their financial advantage to actively churn the portfolio (transaction based commissions) or seek more aggressive than necessary investment managers to make more (assets under management compensation). Finally, the funnel narrows to where the planner gives rationalizations for the products and strategies that he or she has chosen for you.
This is tuchass backwards.
With the retro fitting ENOUGH planning, we begin the funnel with your objectives and move through a logical process to align personal resources with those goals. Next comes the strategies, strategies determine the choice of investment vehicles. For each investment considered in the ENOUGH model, we determine the rate of return, after tax, after inflation, risk adjusted. Finally, the funnel is tapered and tightened down to buying is planned and focused. The advantage is that you are no longer cajoled, sold, manipulated or steered; you are in control of our financial planning decisions. Conclusion: the ENOUGH personal financial planning process is almost perfectly reversed relative to the more MOREon model.
What is Your Enough?
He who knows he has enough is rich.
Tao Te Ching
Enough is a deeply personal concept. One man’s floor may well be another man’s ceiling. Nor is enough measured only in dollars and cents. Wealth is also measured as your ability to adjust to circumstances (adaptability and resourcefulness). If one is ‘adaptable and resourceful’ then regardless of currency changes, then he can procure ‘enough.’ Alan Durning asks the provocative question, ‘When does having more cease to add appreciably to human satisfaction? . . . For each of us in the world’s consuming class, asking is essential. Unless we see that more is not always better, our decline will be overwhelmed by our appetites.’
Since most of us are frenetically chasing more, and unable to grasp it, how do we know when we have enough? As Don Robinson said, ‘The weakness of our age is our apparent inability to distinguish our needs from our greeds.’ Because we cannot define enough, we put enough at risk, seeking the financial rainbow and sometimes in the process losing what is truly important to us. We willingly sacrifice, or at least jeopardize, what we truly need to satisfy our greed and what we don’t ‘need.’
So, what is ENOUGH? First of all, ENOUGH is not my attempt to impose my values on my readers as some of the ‘green with envy’ so called enoughers would do. ENOUGH is not a philosophy of restraint or frugality or even fiscal conservatism. In fact, the purpose of my writings hopefully will help you determine what is enough for you, you may well find yourself describing enough as “plenty.” Each person will define enough in his or her own terms and according to personal values. ENOUGH is aligning personal life goals with personal financial resources – enough to live on; enough to live for – towards one’s signification (why I am).
If we already have enough, then why do we want more? Why do we feel so much stress and discontent? Why do so many people survey their lives and proclaim, “I am not satisfied?” To me the answer is obvious - we have not discovered our personal and internal definition of enough. We have not learned the wisdom of Abraham Joshua Heschel that “to have more does not mean to be more.”
Overview of the ENOUGH
He who knows that enough is enough will always have enough.
Lao Tsu
If I am what I have, and if what I have is lost, who then am I?
Erich Fromm
Having just conquered the known world, Alexander the Great went to visit his friend Diogenes. Diogenes was sitting in his open tent, stirring the kettle which contained his lunch. Alexander, speaking from the opening of the tent, said, “Di, guess what? I’ve just conquered the world. Is there anything I can do for you?”
Diogenes continued stirring for a moment, then looked up and said, “could you move to the left? You’re blocking my sun.”
Diogenes, certainly no more on, was able to determine what was enough for him. Alexander, however, reportedly wept when he learned that there were no more worlds to conquer. Again we see that one man’s floor is another’s acoustical tile ceiling (as one former girlfriend complained.) Obviously Alexander had more than his philosopher friend. But who had sufficiency, resourcefulness - adaptability, enough?
True contentment depends not upon what we have; a tub was large enough for Diogenes, but a world was too little for Alexander.
Caleb Colton
Conclusion
I am not suggesting that once you have defined and achieved your personal enough that you stop achieving or aspiring. When your cup is full, you may decide to stop pouring tea, or you may start filling another cup. The point is, you are in control, steering your boat to your objectives. (For those who argue against control with psycho babble invective ‘control freak’ think of the alternative – chaos. Of course there is going with the flow – something dead fish do.) The point is you are managing the planner. You and your resources, may still be manipulated (nudge is the politically correct cover word for manipulation these days) but the probability is less so. For sure you won’t be a victim of ‘fill or kill,’ throw it against the wall see what sticks, or ‘which one, what kind’ financial planning masquerading product or asset under management sales when you have honed down your ‘enough.’
We shall not cease from exploration. And the end of all our exploring will be to arrive where we started and know the place for the first time.
T.S. Eliot, Four Quartets
NEXT: The Series of The Elements of an ENOUGH Objective:
Sunday, August 1, 2010
Part III: The Alternative to More - ENOUGH
Part III: The Alternative to More - ENOUGH
The Ladder to ENOUGH
It must be considered that there is nothing more difficult to carry out, nor doubtful of success, nor more dangerous to handle than to initiate a new order of things.
Machiavelli, The Prince
Enough is enough, and I’ve had enough!
Dr. Seuss, Horton the Elephant
While the more method is not necessarily wrong, there is an alternative - my ENOUGH approach, a derivative application of Managing by Objectives (MBO). My technique seeks to align life goals with personal resources to achieve life goals & values before the practitioner devises an investment strategy for the client. There are plenty of people and organizations eager to impose their investment ideologies on others. Some may define enough as part of their absolutist agenda. (The frugality crowd – ‘green with envy,’ & the faux egalitarian leftists politicos living in 30,000 square foot mansions – Lear Jet liberals who forgot Franklin’s statement, “be your message.”). Nothing could be farther from my ENOUGH approach, an internalized intensely personal process of discovering, defining, prioritizing and re‑evaluating our values and goals. The ENOUGH method seeks to return the person to person‑al financial planning – Personalized Financial Life Planning.
How do we get off the fast track and on to the sanity track? How do we start steering our own course instead of playing a distorted version of - follow the leader, buffeted by the gyrations of the Dow Jones Average, when the leader doesn’t know where we want to go? How do we gain control of our objectives – inside out rather than outside in -without being manipulated by the expert (who doesn’t even do his own personal financial plan let alone business plan?)
The answer is an entirely different model, heuristic or paradigm, the ladder to ENOUGH. In the ENOUGH model, we begin personal financial planning inside‑out, by personally determining our life goals. ENOUGH re‑connects our life goals & values to our personal resources. We no longer allow external values more is good, less is bad - to drive us up the more ladder. We understand that More is an extra material affair that promises ‘more, better, now, but becomes ‘less, worse, later.’ When we decide our goals, we prioritize them, make trade‑offs and create strategies. Then we align our goals with personal financial resources. Each step up the ladder to ENOUGH leads us to our life goals inside out.
Enough to live on; Enough to live for (1)
Warren Buffet
The motivation for advancing on the ladder to ENOUGH is achieving realizable life goals – healing financial anxiety, puttin’ money in it’s place to transcend to one’s significance – ‘enough to live on; enough to live for.’ The ladder to ENOUGH may be more difficult to climb, because it requires difficult decisions. We must ask the question, What Now? What Now demands that we determine goals and priorities. What Now means that we have a purpose beyond that of the make more, save more treadmill. On the ladder to ENOUGH, we begin with decisions about what enough is for us. Then we align our personal resources with life goals and signification. What does ENOUGH do? Consider these benefits:
Seven Benefits of ENOUGH
1. ENOUGH lessens and often heals financial anxiety. First of all, we are not driven by external pressures to seek more in order to be good. Instead, we have the freedom to choose our values and objectives. Freed of the cultural pressure to seek more, we can understand what is important to us and what is enough.
2. ENOUGH enables the individual to reach real‑I‑zable goals. Importantly, “I” decide my mission & goals. ENOUGH planning is merely a strategy to achieve my life goals.
3. ENOUGH is a connecting rope which aligns life goals and personal resources. ENOUGH personal planning saves time and money, because I have designed strategies to achieve specific goals instead of trying any strategy that will yield more.
4. ENOUGH gives each person control to steer, instead of giving someone else the tiller of our boat while we row. The individual chooses personalized financial life objectives and selects strategies best suited for achieving them, instead of being manipulated.
5. At the very least, ENOUGH allows you to assemble your documents and data so you can buy from a personal financial planner instead of being sold, saving money in the process.
#6. ENOUGH allows you to addition by subtraction. When we discussed more, we saw how more’s allure of ‘more, better, now’ more often than not becomes ‘less, worse, and later.’ More is Fatal Addition via An Extra Material Affair. In ENOUGH, we can experience Addition by Subtraction. Consider, for example, the person who selects a smaller salary over a greater one, but who works fewer hours, enjoys the work more. Remember, wealth is more than money. It is also lifestyle, it is time, it is our values. To trade money for values, for equanimity is truly addition by subtraction. What is better, a salary of $50,000 or $60,000 if the first requires 2,000 annual work hours and the second demands 3,000? The answer is that only you can decide. For some, adding 50 percent more work in return for 20 percent more money is Fatal Addition, and they would gladly add 1,000 hours to their lives by subtraction of salary.
#7 ENOUGH offers FUability©. Now that I have your attention & before you and the politically correct police get your panties and untidy whites in an uproar – think about it. ENOUGH yields:
· Increase choice
· Greater control of one’s life
· Minimizes being ‘beholden,’ dependent, or downright taking ‘crap’ (the shove it factor)
· Lowers the potential of compromising one’s principles and therefore character
· Independence – not being dependent (groveling however euphemized – see choice)
· A sustainable standard of living – enough to live on; enough to live on
You may decide to choose an investment with a lower rate of return over a “bargain” with a higher rate of return. Why? Because the risk in the first investment is lower, and you do not want to jeopardize your plan to achieve enough. The first investment may in fact have been a bargain, realizing the higher return. But by subtracting, you added the security to your enough box, reduced your anxiety, and achieved your goal. Furthermore, that “bargain” might surprise you.
In ENOUGH personal financial life planning we always begin with the goal. ENOUGH often leads us to turn down get‑rich schemes, not because we are anti‑profit or even anti‑risk, but for the more fundamental premise – you manage goals NOT assets. The pitch of more ‘which stock, which bond, which one what kind’ rather than managing the goal. A fundamental principle of ENOUGH personal financial life planning: avoid sacrificing what you need for what you don’t need, schmedrick. (Schmedrick – look it up.)
In this world there are only tragedies: One is not getting what one wants, and the other is getting it.
Oscar Wilde
The Enough Box
It is not the man who has too little who is poor, but the one who hankers after more. What difference does it make how much there is laid away in a man’s safe or in his barn, how much head of stock he grazes or how much cash he puts out in interest, if he is always after what is another’s and only counts what he has yet to get, never what he has already. You ask, “What is the proper limit to a person=s wealth?” First, having what is essential. Then, having what is enough.
Lucilius, Letters, tr. Robert Campbell
How many times have we heard stories about entrepreneurs who have made and then lost their fortunes? In fact, they may make and lose several fortunes in their financial careers. They remind us of bulimics of business, gorging and purging and gorging again. They suffer from ego‑ruptcy, risking what they need for what they don’t need (MOREonic behavior)
ENOUGH builds the foundation of personal financial life planning on personal goals, rather than on accumulating more for more’s own sake. Therefore, the futile win‑lose‑win addiction can be replaced with what I call the enough box. Once a goal has been achieved, presuming that the goal is an important value, ENOUGH planning protects, insulates & fortifies that goal (personal financial Ovaltine). Many external events may jeopardize the assets in the enough box, including elder care, divorce, disability, personal guarantees or additional investments which require feeding- the assets which keep on taking. Various strategies allow us to cushion enough to minimize the probability and seriousness of risk factors. One strategy is to never risk enough for what you don’t need - fatal addition which causes subtraction by addition.
The concept of ENOUGH planning tends to push clients toward that the very difficult questions: “What Next?”and What Now? The answer to “What Next/ What Now?” is an objective that we have struggled to identify, prioritize and pursue. The most common way to evade the question is to create a “cushion” after knowing what enough is and where you have to be on the enough track to be on target. Once preservation and diversification of assets for enough have been achieved, clients add padding with a few more investments, “just in case.” The problem is that this stretching of enough to include more can rupture the entire strategy. However, if maintaining the cushion is successful, clients move on to their second line of defense buffers against confronting “What Next, What Now?” Buffered by their false feeling of security, they indulge in vacations or traveling or deferred leisure activities (otherwise known as ‘someday things’) for a while. But when their defenses of fear, pleasure and ignorance are exhausted, they revert to more for the sake of more by re‑defining enough. As Sam Levenson put it, “I finally got the means to the end and they moved the ends farther apart!”
In ENOUGH personal financial life planning, we are involved with developing and completing, not with extruding or distending. We are concerned about our your personal financial wellness. This approach is an alignment process. We help you to focus on one essential question: “Am I meeting my funding requirements for my personal financial life goals which will support my life aims and values?” Your life aims are the “What Now's/What Next’s” that, by habit, most have been trying so hard to evade and too often haven’t a clue about since they have been working too hard to consider it. They are like the man who worked all day to cut down a tree with a dull saw, because he didn’t want to stop working to sharpen the blade (or the man who climbed the ladder to elope with Mary Jane only to discover that the ladder was leaning against Peggy Sue’s house)! When the Dow Jones Industrial Average plummeted 18%+ (508 points) on October 20, 1987, losing more than one fifth of its value, more investors everywhere asked anxiously, “How much have I lost?” My clients, when I was in practice, asked, “Do we still have enough?
Personal financial life planning as a strategy to achieve life goals is the cornerstone of the ENOUGH approach. The knowledge and acceptance of what is enough for you, I believe, contributes to overall wellness – contributes to personal financial life wellness by reducing the free‑floating, culturally‑embedded more anxiety. With more acting as your motivation, there can never be any closure or sense of accomplishment - just a stressful compulsion and you get jettisoned. With ENOUGH your goals are well‑defined and achievable. Furthermore, you are in control of defining your goals and taking action to achieve them (instead of allowing someone to manipulate your portfolio and hoping that you will get more). You can relax and enjoy your life or choose to be anxious. But now it’s your choice.
Case Study:
Becoming Financially Independent of Your
Independent Business
Most Americans, for whatever reason, would like to be financially independent. Many entrepreneurs and owners of closely‑held businesses, at first blush, appear to have achieved financial independence. However, more often than not, they are financially dependent on their independent business - more slave than master, more concentrated than diversified, more illiquid than liquid.
More and more of the owner’s time is spent on things tangential, but necessary to the business. How many times have owners said, ‘I used to know everybody in the place, but no more. I miss long Friday afternoon lunches of pizza and beer and not going back to the office when I was poorer. Now it seems I spend all my time with bankers who have collateralized everything I own. I spend more and more time with lawyers and accountants and less time running the business.’
Yet in the next breath, the entrepreneur/manager will say, “Investments? I haven’t made any money in them - this is the business I know. Besides, I gotta get the accounts receivable down. I needta meet with the accountants and I gotta talk to our lawyers. I gotta meet with the insurers on the increased premiums and decreased coverages and convince my board members to remain even though our liability coverage has holes large enough to drive a Mack truck through. Margery keeps complaining she is a ‘F priority’ (even below Kathy Griffin) and thinks we ought to see the marriage counselor again. If I’m so rich, so independent, why don’t I feel it? Why don’=t I have any cash?"
Skim milk often masquerades as cream. That which we think saves us often strangles us. The brass ring of success and independence often is slavery. As Jack Lemmon said in Save the Tiger, AAll I need is one more good season.@
One more. . . . One more. . . .
How many “independent” business owners have you known going through these throes? How many entrepreneurs do you know who have been on the less than merry‑go‑round of make it, lose it, make it for the third or fourth time, rivaling their divorce count?
One more. . . .
Knowing what is enough may help to get the entrepreneur off the less than merry‑go‑round of more. What is enough? That is a question you will be answering as you progress through my writings and rantings. For the entrepreneur trapped on the more ladder, ENOUGH can relieve the tyranny of more and restore the joy of doing business. How?
ENOUGH is knowing one’s economic “gottas.” The gottas are the absolute requirements - not the oughtas (what you’d like to have) or the nicetas (luxuries). Knowing your real economic gottas makes for the line in the sand where the bank cannot collateralize. Knowing your economic gotta level and having it funded independent of the business can lower anxieties. But ENOUGH requires a change of thinking about how you allocate your personal resources, of which your “baby” -C the business - is just one. Just feeding the baby, “your only good investment,” only starves the rest of the family while reinforcing the more addiction.
ENOUGH may mean deferring the purchase of the latest equipment. (For those approaching retirement it may mean reframing to preservation and distribution rather than growth). It may mean downsizing rather than exposing your entire investment to risk. ENOUGH means insulating your objectives, like your home, and refusing to extend your debt using your home’s equity as collateral, like the entrepreneur who wanted to become financially independent or at least less dependent on his independent business. You need insulation as well for staying power, to ride out economic dips and setbacks. This means rewirement – not necessarily retirement. It does mean having sufficient passive income to provide some percentage (the gotta level) of your standard of living irrespective of the business’s fortunes and the market’s gyrations . It means being active in the business, but not a slave to it. It means that you have time to remember the names of people down the hall and Margery thinking that she is an ‘A’ priority again (okay, B, your dog and the business come first – but she’s at least best in breed). It means long pizza lunches on Friday again, if you choose. It means telling the bank that you have perfect credit and have enjoyed the relationship, but. . . .
Becoming financially independent of your business means - enough already!
(1) Buffet said this in regards to inheritance. This writer is of the opinion, that other than a hand up to help oneself, inheritance by bloodline – hereditary privilege only disables the beneficiary creating of nobility of no-ability, harms society by valuing bloodline over merit, and dissipates resources – talents on loan from God.
The Ladder to ENOUGH
It must be considered that there is nothing more difficult to carry out, nor doubtful of success, nor more dangerous to handle than to initiate a new order of things.
Machiavelli, The Prince
Enough is enough, and I’ve had enough!
Dr. Seuss, Horton the Elephant
While the more method is not necessarily wrong, there is an alternative - my ENOUGH approach, a derivative application of Managing by Objectives (MBO). My technique seeks to align life goals with personal resources to achieve life goals & values before the practitioner devises an investment strategy for the client. There are plenty of people and organizations eager to impose their investment ideologies on others. Some may define enough as part of their absolutist agenda. (The frugality crowd – ‘green with envy,’ & the faux egalitarian leftists politicos living in 30,000 square foot mansions – Lear Jet liberals who forgot Franklin’s statement, “be your message.”). Nothing could be farther from my ENOUGH approach, an internalized intensely personal process of discovering, defining, prioritizing and re‑evaluating our values and goals. The ENOUGH method seeks to return the person to person‑al financial planning – Personalized Financial Life Planning.
How do we get off the fast track and on to the sanity track? How do we start steering our own course instead of playing a distorted version of - follow the leader, buffeted by the gyrations of the Dow Jones Average, when the leader doesn’t know where we want to go? How do we gain control of our objectives – inside out rather than outside in -without being manipulated by the expert (who doesn’t even do his own personal financial plan let alone business plan?)
The answer is an entirely different model, heuristic or paradigm, the ladder to ENOUGH. In the ENOUGH model, we begin personal financial planning inside‑out, by personally determining our life goals. ENOUGH re‑connects our life goals & values to our personal resources. We no longer allow external values more is good, less is bad - to drive us up the more ladder. We understand that More is an extra material affair that promises ‘more, better, now, but becomes ‘less, worse, later.’ When we decide our goals, we prioritize them, make trade‑offs and create strategies. Then we align our goals with personal financial resources. Each step up the ladder to ENOUGH leads us to our life goals inside out.
Enough to live on; Enough to live for (1)
Warren Buffet
The motivation for advancing on the ladder to ENOUGH is achieving realizable life goals – healing financial anxiety, puttin’ money in it’s place to transcend to one’s significance – ‘enough to live on; enough to live for.’ The ladder to ENOUGH may be more difficult to climb, because it requires difficult decisions. We must ask the question, What Now? What Now demands that we determine goals and priorities. What Now means that we have a purpose beyond that of the make more, save more treadmill. On the ladder to ENOUGH, we begin with decisions about what enough is for us. Then we align our personal resources with life goals and signification. What does ENOUGH do? Consider these benefits:
Seven Benefits of ENOUGH
1. ENOUGH lessens and often heals financial anxiety. First of all, we are not driven by external pressures to seek more in order to be good. Instead, we have the freedom to choose our values and objectives. Freed of the cultural pressure to seek more, we can understand what is important to us and what is enough.
2. ENOUGH enables the individual to reach real‑I‑zable goals. Importantly, “I” decide my mission & goals. ENOUGH planning is merely a strategy to achieve my life goals.
3. ENOUGH is a connecting rope which aligns life goals and personal resources. ENOUGH personal planning saves time and money, because I have designed strategies to achieve specific goals instead of trying any strategy that will yield more.
4. ENOUGH gives each person control to steer, instead of giving someone else the tiller of our boat while we row. The individual chooses personalized financial life objectives and selects strategies best suited for achieving them, instead of being manipulated.
5. At the very least, ENOUGH allows you to assemble your documents and data so you can buy from a personal financial planner instead of being sold, saving money in the process.
#6. ENOUGH allows you to addition by subtraction. When we discussed more, we saw how more’s allure of ‘more, better, now’ more often than not becomes ‘less, worse, and later.’ More is Fatal Addition via An Extra Material Affair. In ENOUGH, we can experience Addition by Subtraction. Consider, for example, the person who selects a smaller salary over a greater one, but who works fewer hours, enjoys the work more. Remember, wealth is more than money. It is also lifestyle, it is time, it is our values. To trade money for values, for equanimity is truly addition by subtraction. What is better, a salary of $50,000 or $60,000 if the first requires 2,000 annual work hours and the second demands 3,000? The answer is that only you can decide. For some, adding 50 percent more work in return for 20 percent more money is Fatal Addition, and they would gladly add 1,000 hours to their lives by subtraction of salary.
#7 ENOUGH offers FUability©. Now that I have your attention & before you and the politically correct police get your panties and untidy whites in an uproar – think about it. ENOUGH yields:
· Increase choice
· Greater control of one’s life
· Minimizes being ‘beholden,’ dependent, or downright taking ‘crap’ (the shove it factor)
· Lowers the potential of compromising one’s principles and therefore character
· Independence – not being dependent (groveling however euphemized – see choice)
· A sustainable standard of living – enough to live on; enough to live on
You may decide to choose an investment with a lower rate of return over a “bargain” with a higher rate of return. Why? Because the risk in the first investment is lower, and you do not want to jeopardize your plan to achieve enough. The first investment may in fact have been a bargain, realizing the higher return. But by subtracting, you added the security to your enough box, reduced your anxiety, and achieved your goal. Furthermore, that “bargain” might surprise you.
In ENOUGH personal financial life planning we always begin with the goal. ENOUGH often leads us to turn down get‑rich schemes, not because we are anti‑profit or even anti‑risk, but for the more fundamental premise – you manage goals NOT assets. The pitch of more ‘which stock, which bond, which one what kind’ rather than managing the goal. A fundamental principle of ENOUGH personal financial life planning: avoid sacrificing what you need for what you don’t need, schmedrick. (Schmedrick – look it up.)
In this world there are only tragedies: One is not getting what one wants, and the other is getting it.
Oscar Wilde
The Enough Box
It is not the man who has too little who is poor, but the one who hankers after more. What difference does it make how much there is laid away in a man’s safe or in his barn, how much head of stock he grazes or how much cash he puts out in interest, if he is always after what is another’s and only counts what he has yet to get, never what he has already. You ask, “What is the proper limit to a person=s wealth?” First, having what is essential. Then, having what is enough.
Lucilius, Letters, tr. Robert Campbell
How many times have we heard stories about entrepreneurs who have made and then lost their fortunes? In fact, they may make and lose several fortunes in their financial careers. They remind us of bulimics of business, gorging and purging and gorging again. They suffer from ego‑ruptcy, risking what they need for what they don’t need (MOREonic behavior)
ENOUGH builds the foundation of personal financial life planning on personal goals, rather than on accumulating more for more’s own sake. Therefore, the futile win‑lose‑win addiction can be replaced with what I call the enough box. Once a goal has been achieved, presuming that the goal is an important value, ENOUGH planning protects, insulates & fortifies that goal (personal financial Ovaltine). Many external events may jeopardize the assets in the enough box, including elder care, divorce, disability, personal guarantees or additional investments which require feeding- the assets which keep on taking. Various strategies allow us to cushion enough to minimize the probability and seriousness of risk factors. One strategy is to never risk enough for what you don’t need - fatal addition which causes subtraction by addition.
The concept of ENOUGH planning tends to push clients toward that the very difficult questions: “What Next?”and What Now? The answer to “What Next/ What Now?” is an objective that we have struggled to identify, prioritize and pursue. The most common way to evade the question is to create a “cushion” after knowing what enough is and where you have to be on the enough track to be on target. Once preservation and diversification of assets for enough have been achieved, clients add padding with a few more investments, “just in case.” The problem is that this stretching of enough to include more can rupture the entire strategy. However, if maintaining the cushion is successful, clients move on to their second line of defense buffers against confronting “What Next, What Now?” Buffered by their false feeling of security, they indulge in vacations or traveling or deferred leisure activities (otherwise known as ‘someday things’) for a while. But when their defenses of fear, pleasure and ignorance are exhausted, they revert to more for the sake of more by re‑defining enough. As Sam Levenson put it, “I finally got the means to the end and they moved the ends farther apart!”
In ENOUGH personal financial life planning, we are involved with developing and completing, not with extruding or distending. We are concerned about our your personal financial wellness. This approach is an alignment process. We help you to focus on one essential question: “Am I meeting my funding requirements for my personal financial life goals which will support my life aims and values?” Your life aims are the “What Now's/What Next’s” that, by habit, most have been trying so hard to evade and too often haven’t a clue about since they have been working too hard to consider it. They are like the man who worked all day to cut down a tree with a dull saw, because he didn’t want to stop working to sharpen the blade (or the man who climbed the ladder to elope with Mary Jane only to discover that the ladder was leaning against Peggy Sue’s house)! When the Dow Jones Industrial Average plummeted 18%+ (508 points) on October 20, 1987, losing more than one fifth of its value, more investors everywhere asked anxiously, “How much have I lost?” My clients, when I was in practice, asked, “Do we still have enough?
Personal financial life planning as a strategy to achieve life goals is the cornerstone of the ENOUGH approach. The knowledge and acceptance of what is enough for you, I believe, contributes to overall wellness – contributes to personal financial life wellness by reducing the free‑floating, culturally‑embedded more anxiety. With more acting as your motivation, there can never be any closure or sense of accomplishment - just a stressful compulsion and you get jettisoned. With ENOUGH your goals are well‑defined and achievable. Furthermore, you are in control of defining your goals and taking action to achieve them (instead of allowing someone to manipulate your portfolio and hoping that you will get more). You can relax and enjoy your life or choose to be anxious. But now it’s your choice.
Case Study:
Becoming Financially Independent of Your
Independent Business
Most Americans, for whatever reason, would like to be financially independent. Many entrepreneurs and owners of closely‑held businesses, at first blush, appear to have achieved financial independence. However, more often than not, they are financially dependent on their independent business - more slave than master, more concentrated than diversified, more illiquid than liquid.
More and more of the owner’s time is spent on things tangential, but necessary to the business. How many times have owners said, ‘I used to know everybody in the place, but no more. I miss long Friday afternoon lunches of pizza and beer and not going back to the office when I was poorer. Now it seems I spend all my time with bankers who have collateralized everything I own. I spend more and more time with lawyers and accountants and less time running the business.’
Yet in the next breath, the entrepreneur/manager will say, “Investments? I haven’t made any money in them - this is the business I know. Besides, I gotta get the accounts receivable down. I needta meet with the accountants and I gotta talk to our lawyers. I gotta meet with the insurers on the increased premiums and decreased coverages and convince my board members to remain even though our liability coverage has holes large enough to drive a Mack truck through. Margery keeps complaining she is a ‘F priority’ (even below Kathy Griffin) and thinks we ought to see the marriage counselor again. If I’m so rich, so independent, why don’t I feel it? Why don’=t I have any cash?"
Skim milk often masquerades as cream. That which we think saves us often strangles us. The brass ring of success and independence often is slavery. As Jack Lemmon said in Save the Tiger, AAll I need is one more good season.@
One more. . . . One more. . . .
How many “independent” business owners have you known going through these throes? How many entrepreneurs do you know who have been on the less than merry‑go‑round of make it, lose it, make it for the third or fourth time, rivaling their divorce count?
One more. . . .
Knowing what is enough may help to get the entrepreneur off the less than merry‑go‑round of more. What is enough? That is a question you will be answering as you progress through my writings and rantings. For the entrepreneur trapped on the more ladder, ENOUGH can relieve the tyranny of more and restore the joy of doing business. How?
ENOUGH is knowing one’s economic “gottas.” The gottas are the absolute requirements - not the oughtas (what you’d like to have) or the nicetas (luxuries). Knowing your real economic gottas makes for the line in the sand where the bank cannot collateralize. Knowing your economic gotta level and having it funded independent of the business can lower anxieties. But ENOUGH requires a change of thinking about how you allocate your personal resources, of which your “baby” -C the business - is just one. Just feeding the baby, “your only good investment,” only starves the rest of the family while reinforcing the more addiction.
ENOUGH may mean deferring the purchase of the latest equipment. (For those approaching retirement it may mean reframing to preservation and distribution rather than growth). It may mean downsizing rather than exposing your entire investment to risk. ENOUGH means insulating your objectives, like your home, and refusing to extend your debt using your home’s equity as collateral, like the entrepreneur who wanted to become financially independent or at least less dependent on his independent business. You need insulation as well for staying power, to ride out economic dips and setbacks. This means rewirement – not necessarily retirement. It does mean having sufficient passive income to provide some percentage (the gotta level) of your standard of living irrespective of the business’s fortunes and the market’s gyrations . It means being active in the business, but not a slave to it. It means that you have time to remember the names of people down the hall and Margery thinking that she is an ‘A’ priority again (okay, B, your dog and the business come first – but she’s at least best in breed). It means long pizza lunches on Friday again, if you choose. It means telling the bank that you have perfect credit and have enjoyed the relationship, but. . . .
Becoming financially independent of your business means - enough already!
(1) Buffet said this in regards to inheritance. This writer is of the opinion, that other than a hand up to help oneself, inheritance by bloodline – hereditary privilege only disables the beneficiary creating of nobility of no-ability, harms society by valuing bloodline over merit, and dissipates resources – talents on loan from God.
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