Sunday, August 8, 2010


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

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:

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