Wednesday, December 10, 2014

The Money Mind Part II: The MORE aka MORE-on Mind

The Money Mind Part II: The MORE aka MORE-on Mind

More is an extra material affair

            However motivated, the MORE Mind (derived from Acquisition ()one’s Savior savior from mortality in this life or at least provide temporary altered state as a diversion from the inevitable))) never is satisfied. For the The MORE Mind further sub-derived from The Happiness, Commitment or Fear Mind – there is never ENOUGH.  Thus, the The MORE Mind is analogous to the Hamster wheel enduring a circular without end Sisyphian existence. The MORE Mind, “in addition,” finds itself the captive of the following duality (read from the bottom up).

(And of course if Worthy, you’re God)*      If Worthless, you’re the Devil
If you’re Good; you’re Worthy (net worth?) If you’re Bad; you’re WorthLESS
If you are a Winner; You’re Good                If you’re a Loser: You’re Bad
If you are Better; You’re A Winner              If you are Worse – You’re A Loser
If you get More – You Are Better                If you get Less – You’re Worse
If Right – You get More                               If Wrong – you get Less
If  yes, you are Right                                      If no, you are Wrong
Yes                                                                  No

Are you useful, functional of service?

* God being just one less ‘o’ than good.

            The More-on Mind, in general, is pre-soaked by what United Capital’s Duran might call The Happiness, Commitment, or Fear Mind. The Happiness & Commitment Minds pre-soakers seek altered states (divertissements) to mask reality while The Fear Mind,  with the next ‘risk’ up what if and or but seems to be a built in genetic pre-conditioner – the only question is level and degree of activation.

            Now there is also a (faux) Enough Mind. This (faux) Enough Mind recycles to The More Mind. The stages of recycling (faux) Enough Mind to The MORE Mind (reading from the bottom up):

Become An Adventuresome Capitalist OR
Run for Political Office OR
Become a Philanthropist recycling ‘more’ to charity
Bored - I’ll know how to make ‘More’ so I can:
Avoidance of Meaning IN Their Life
My someday things (3 months, for better or worse but not for lunch)
The Sam Levinson: I finally got the means to the end (Enough), and I moved the ends (again)
Ok, I need a cushion to Enough, just in case
Quantitatively having Enough
What is Enough (enough to live on)?

            While the Happiness, Commitment and Fear Minds marinate both the More and (faux) Enough Mind, both are secondary derivatives of the prime mobile’ – acquisition. Acquisition is the over arching strategy to delude oneself to avoid mortality or at least palliate oneself from the inevitable. (And note: acquisition, in Hebrew, is Cain – as in Cain and Abel.)
            What the More Mind (aka Never Enough Mind) and the (Faux) Enough Mind share is the avoidance of the meaning not of life – but meaning IN their life. The More Mind’s avoidance is enabled and masked by ‘there is never enough,’ facilitated by every increasing invention of high serious low low risk probability potential problems to rationalize making ‘more.’ The (Faux) Enough Mind, despite assertions of wishing to ‘make a difference’ (in 20 minutes), and concerns about ‘what next?’ recycles to the comfort of the habituated now hard wired ‘more’ when confronted with finding meaning IN their life and failing to secure it immediately.
            The question isn’t what’a next, making a difference per se, palliation (another higher dosage for the altered state) – or even finding the meaning OF life, but the finding meaning IN one’s life. If anything, THE ENOUGH Mind (which is not a predisposition (1)) is a CHOICE that agitates, goads and if successful discovers what for it is ‘enough to live on; enough to live for.’
Unfortunately, The ENOUGH Mind choice seems to only occurs when the stock market is down reverts and resets back the MORE-ON Mind. (Note: The Mantra of Thee MORE Mind (MORE, BETTER, NOW) has a habit of becoming WORSE, LESS, AND LATER – thus MORE becomes LESS (The LESSon?) once again sacrificing what one needs for what one doesn’t need.)
The MORE MindLESS–  “Subtraction by MORE.”

It’s one thing to fight the dragon; another to slay the dragon, but the hardest is to embrace the dragon.

            One’s doesn’t get rid of shtick (or dragons) – let alone the overreaching acculturation of MORE. That said, but one can limit dragon (even make useful the dragon’s fire) – not by embrace – but by transcendence (2) by finding meaning IN one’s life not OF life. Unlike shrink oriented year$$ of ‘mining the mountain’ excavating the rot of one’s ‘root causes’ – lack of confidence, your mother (without effecting any change)(3) and continuing to be in the grips and the gripes of the hamster wheel of the MORE & faux ENOUGH Minds, this transcendence focuses on climbing the mountain toward.
            The ENOUGH Mind aligns personal resources with one’s personal goals to elevate to connect to one’s significance (meaning IN one’s life) that having enough to live – enough to live for – enables. As such, this ENOUGH orientation is a process towards the healing of personal financial anxiety, puttin’ money in its place facilitating the connection (re-connection?) to one’s significance.
The ENOUGH Mind pole vaults the MORE-On Dragon without pre fabric (DOWNy?) softeners or to borrow the words Rabbi Aden Steinsaltz – The Enough Mind ‘puttin’ one’s life, puttin’ one’s soul, where his money is.”
(1)   Shaddai – one of the first Hebrew words God in Genesis per Rabbi Mordacai Twerski to this writer means, ‘God, God Almighty, God All Sufficient, Enough. (There is no word, phrase in Hebrew for God that means More.)
(2)   Transcend – is derived from the Latin – to climb across
(3)   Being an expert on the underlying ‘root’ cause without effecting the change –  is like a consultant who knows 1000 ways to make love but doesn’t know any girls

Saturday, December 6, 2014

The 'Money Mind'

The Money Mind

There are no solutions; there are only trade-offs
Thomas Sowell

A few questions and observations relative to the recent book The Money Mind & The Money Mind;s predominant taxonomy:

First, does The Money Mind  classification (either happiness, committment or fear) stop a bit short? Would not deconstructing the taxonomy further (be it fear, happiness, commitment) into the underneath payoff (be it gain or avoidance) get further into the primary imperatives (conscious or unconscious) which might actually modify the presentational money mind taxonomy?

Secondly relative to each of the Money Minds:
            Is it happiness or the seeking of an altered state (which is never enough – a hedonic adaptation ‘happiness’ which requires higher and higher dosages? NOTE: In Judaism there is no word for happiness – which is external and comparative. Instead there is the concept of Simcha – joy – an inside out approach)
            Is it a commitment mind or a sense of self other defined?
            Is it really fear – protection – or regardless of outward appearance an inner lack of confidence in one’s adaptability and resourcefulness (the real currency as currency change? NOTE: As planners, I don’t recall colleagues ever monetizing this (a client’s adaptability and resourcefulness) in their personal financial planning models.

(An aside, I, can empathize with the author's loss effectively of his  dad and precarious financial situation at 14 making his predominant Money Mind (pre filter?) Fear.  At 15, my dad died – and he died the Death of a Salesman. He left little behind – so I had to get scholarships, I had to graduate magna cum laude, I had to get an MBA --- I do understand the fear money mind but question (and  if the fear money mind is just the presentational symptom.)

Third, suggestion: consider incorporating formally into 'The Money Mind' prefilter process Kepner Tregoe’s Potential Problem Analysis – it was very effective with my clients when I was in practice.

Fourth, what may even override The Money Mind taxonomy and the fundamental motivation is context. There is quite a bit of writing on risk tolerance (foolishness when out of context of goal and capacity). Risk capacity and risk requirement per each goal prioritized may cause the cognitive to preempt, countermand and overrule – and possibly rightfully so.

Who is risk; he who is satisfied with his portion
Rav Ben Zoma, Ethics of the Fathers

A final comment: personal financial planning is, in my opinion, a failure relative relative to its promise of what I would define as ‘healing personal financial anxiety, putting money in its place, to elevate to connect to one’s signification.’ Why? Regardless of compensation method, personal financial planning is about ‘MORE And MORE’, better, now has a habit of becoming ‘worse, less, later.’ MORE is relative – comparative ‘outside in.’ There is no winning. In contrast, ENOUGH is ‘inside out’ – managing goals rather than managing assets (in comparison)

Per Ben Zoma’s statement above: satis (as in satisfied) in Latin means ‘enough’ and one of the key words in Hebrew for God is Shaddai. And what is the translation of Shaddai per Rabbi Twerski: God, God Almighty, God all sufficient, ENOUGH. There is no word for God (amongst the 100 plus references in Hebrew) for MORE

Thursday, December 4, 2014

‘Mohels’ & Assets Under Management ‘Personal Financial Planners

‘Mohels’ & Assets Under Management ‘Personal Financial Planners’

Know before whom you stand

Assets under Management (AUM)  is an increasing annuity for my practice and the monetization metric (for the valuation) and sale of my practice.
Anonymous AUM ‘Fee Only’ Planner

            In the beginning (Genesis), personal financial planning was concerned as a distribution system for otherwise the sale of product by commissioned (‘fill or kill’ aka ‘you only eat what you kill’) salespeople in ‘personal financial planner’ clothing.
            Though still commission driven, this so called personal financial planning distribution system created another variation – fee and commission (later renamed by some Lanny Davis spin concocter to fee based planning to try to hide the transaction nature of the compensation making it more objective). Some ‘so called’ fee and commission planners tried to pitch the objectivity of their advice by having two separate entities: one to solely give advice – and the other typically their broker dealer arrangement where they would receive commissions to give the appearance of a Chinese Wall. (Not Chinese Walls never stopped an invader).
            Fee and commission or the euphemized fee based compensation is akin to being a little pregnant – and worse by a control brother and sister arrangement of two ‘independent entities.’

            When fee only personal financial planning came on the scene, various compensation arrangements offered:

  • Hourly
  • Retainer
  • Assets Under Management
            (AUM is the predominant mode of compensation of 'fee only planners' (though some also charge an additional fee)

Don’t sacrifice what you need for what you don’t need.

Stipulating to there are difficulties with all the above methods of compensation and therefore each type requires full and timely disclosure upfront of type and estimated amounts, ASSets under Management’s (AUM)(2) inherent in conflict of interest is a dagger at the heart – the very essence of the reason for personal financial planning – managing goals and their attainment. By its very nature, AUM, is externally comparative focusing on relative comparisons to indices rather than the client’s goals (despite assertions otherwise as the planner is inherently incentivized and thus take higher risk (for ‘more’) than necessary to meet the personal goals of the client. Two examples:

1.      Seeking assets growth at the expense of lifetime income for the retiree
2.     Unlocking ‘equity from the home’ – increasing the mortgage (leverage) to put into the market for “higher” returns on investment..

As the 2008 meltdown in housing and the market aside proved, ‘unlocking’ that equity not only lost money/equity (though there was that higher amount of assets under management for the planner to be compensated on) but increased the amount of the goal necessary for lifetime income (versus lowering the need if the mortgage would be paid off).

AUM, regardless of conflicted self serving AUM planners writers bloggers apologists’ beta, gamma, alphas – Omaha Omaha hike hike hike long winded audibles eerily reminded one of the same justifications by the blue suede shoe fill or kill commission planners and only a little pregnant fee based ‘planners’ audibles in the 70’s and 80’s. The difference – AUMers are woofs in fee only personal financial planner clothing woofing down the reduced rates of returns  – and now having the audacity to be pitching ‘goals based planning.’ The only thing missing is the Bris and or Baptisms.
Where is the CFP Board, The CPA Financial Planners (loving their AUM), or sadly NAPFA which I co-founded (which has become a marketing trade association in professional organization clothing).?
There is no personal financial planning Messiah to call upon but maybe Personal Financial Planning Mohel(3) will come to the fore-skin of AUM to cut to the chase?
It couldn’t hoit!
Know Before Whom You Stand
& Stand Corrected

1.- Notice AUM contains AU – the periodic symbol for Gold or in this context Planner’s Gold
2- Font and bolding deliberate.
3.- A mohel is a Jewish person (usually a Rabbi) trained in the practice of the covenantal
circumcision. It is not unusual for the Mohel to also be a jeweler by trade given he works with The Family JEWels.

PS: Yes, there are conflicts with hourly and retainer compensation methods but the comparison is akin to making going 60 mph in a 55 mph zone morally equivalent to 120 mph in the same zone. Hourly conflict – an invitation to inefficiency as 1 planner’s hour is another planner’s month. Retainer conflict –if subject to annual review – over utilization (to the planner’s time detriment) or under utilization (to the planner’s benefit) can be addressed

Please no ‘you’re make a mountain out of Mohels’ rebuttals.